Exhibit 10.7

ROYALTY AND SUBLICENSE INCOME AGREEMENT

This ROYALTY ASSIGNMENT AGREEMENT (the “Agreement”), dated as of December 18, 2009, is by and among (i) PureTech Ventures, LLC, a Delaware limited liability company, (“PureTech”), (ii) Gelesis, Inc., a Delaware corporation, (“Gelesis-US”) and (iii) Gelesis LP (formerly AML-Dienstein B. V.), a Bermudan limited partnership (“Gelesis-Bermuda” and collectively with Gelesis-US, “Gelesis”).

WHEREAS, PureTech is required to provide certain funding, management services and intellectual property as set forth in (i) the Note Purchase Agreement dated on or about the date hereof by and between Gelesis-US and PureTech and (ii) the Management and Overhead Services Agreement dated on or about the date hereof by and between Gelesis-US and PureTech;

WHEREAS, PureTech will receive certain consideration for such funding, management services and intellectual property, including the potential royalty payments and sublicense payments set forth herein;

NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1. Definitions. Reference is made to that certain Patent License and Assignment Agreement dated December 9, 2009 (the “License Agreement”) by and among Gelesis-Bermuda, One S. R. L., Luigi Ambrosio, Luigi Nicolais and Alessandro Sannino. All capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the License Agreement.

2. Royalties.

(a) Gelesis shall pay to PureTech, during the applicable term described in Section 2(b) below, earned royalties at the following rates:

If the manufacture, use, lease, or sale of any Licensed Product is covered by more than one of the Valid Claims under the Patent Rights in the Field, or any patents in the Improvements or Food IP, multiple royalties shall not be due.

(b) The Parties hereby agree that should intellectual property rights owned by a third party pose as an obstacle to the development or commercialization of any Licensed Product that is not a Food Product (the “Blocking IP”), Gelesis-Bermuda or an applicable affiliate of Gelesis-Bermuda shall, after consulting in good faith with PureTech, seek a potential settlement solution with the Blocking IP holder and the royalty rates for Licensed Products that are not Food Products set forth in Section 2(a) shall be reduced by the amount of such consideration paid for the rights to such Blocking IP; provided, however that in no case shall the royalty rates for Licensed Products that are not Food Products set forth in Section 2(a) be reduced by more than fifty percent (50%) as a result of the application of this Section 2(b).

(c) The obligation of Gelesis to pay royalties pursuant to Section 2(a) shall terminate on a country-by-country basis concurrently with (i) the expiration or termination of the applicable Valid Claim under the Patent Rights in the country in which the Licensed Product is sold, or (ii) the withdrawal, cancellation, or disclaiming of the applicable Valid Claim under the Patent Rights in the country in which the Licensed Product is sold.

3. Sublicense Income. Gelesis shall pay to PureTech ten percent (10%) of Sublicense Income received by Gelesis and its affiliates on Food Products.

4. Reports and Payments. Following the commencement of Gelesis’s obligations to pay any royalties pursuant to Section 2, Gelesis shall deliver to PureTech within sixty (60) days after the end of each calendar quarter a written report showing its computation of royalties due under this Agreement for such calendar quarter. Simultaneously with the delivery of each such report, Gelesis shall tender payment of all amounts shown to be due thereon. The royalty payments due on sales in currencies other than U.S. dollars shall be calculated using the appropriate exchange rate for such currency quoted by the relevant Government Authority as published by the Wall Street Journal on the last business day of the calendar quarter to which such report relates. All amounts due under this Agreement shall be paid to PureTech in U.S. dollars by wire transfer to an account in a bank designated by PureTech, or in such other form and/or manner as PureTech may reasonably request. During the term of this Agreement, PureTech, at its cost, shall have the right from time to time (not to exceed once during each calendar year) to engage a certified public accountant, reasonably acceptable to Gelesis, to inspect, during normal business hours, upon reasonable advance notice (not less than one week), and subject to a written obligation of confidentiality acceptable to Gelesis, such books, records and other supporting data of Gelesis as may be necessary to verify Gelesis’s computation of royalties due under this Agreement.

5. Withholding Taxes. All payments made by Gelesis to PureTech shall be net of withholding taxes.

6. Miscellaneous.

(a) Transfers of Rights under this Agreement. This Agreement, and the rights and obligations of each party hereunder, may not be assigned by any party without the prior written consent of each of PureTech and Gelesis.

(b) Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the respective successors, permitted assigns, heirs, executors, and administrators of the parties hereto and shall inure to the benefit of and be enforceable by each party hereto.

(c) Notices. Any notice, demand, request or delivery required or permitted to be given pursuant to the terms of this Agreement shall be in writing and shall be deemed given (i) when delivered personally or when sent by facsimile transmission and confirmed by telephone or electronic transmission report (with a hard copy to follow by mail), (ii) on the next business day after timely delivery to a generally recognized receipted overnight courier (such as FedEx) and (iii) on the third business day after deposit in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid), addressed to the party at such party’s address as set forth on the signature pages hereto or as subsequently modified by written notice delivered as provided herein.

(d) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware and the laws of the United States applicable therein (without giving effect to any choice or conflict of laws provision or rule that would cause the application of the laws of any other jurisdiction) and shall be treated in all respects as a Delaware contract.

(e) Waivers and Amendments. Except as otherwise expressly set forth in this Agreement, any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only by written agreement of PureTech, Gelesis-US and Gelesis-Bermuda. No waivers of or exceptions to any term, condition or provision of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.

(f) Delays or Omissions. No delay on the part of any party in exercising any right, power, remedy or privilege hereunder shall operate as a waiver thereof nor shall any waiver on the part of any party of any such right, power, remedy or privilege, nor any single or partial exercise of any such right, power, remedy or privilege, preclude any further exercise thereof or the exercise of any other such right, power, remedy or privilege. All remedies, either under this Agreement, by law, or otherwise afforded to the parties, shall be cumulative and not alternative.

(g) Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference, only and are not to be considered in construing this Agreement.

(h) Entire Agreement. This Agreement embodies the entire agreement and understanding among the parties with respect to the subject matter hereof and related transactions, and supersedes all prior agreements and understandings among the parties, written or oral, with respect thereto.

(i) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(j) Severability. If any provision of this Agreement shall be held to be illegal, invalid or unenforceable, such illegality, invalidity or unenforceability shall attach only to such provision and shall not in any manner affect or render illegal, invalid or unenforceable any other provision of this Agreement, and this Agreement shall be carried out as if any such illegal, invalid or unenforceable provision were not contained herein.

(k) Non-Impairment. No amendment, waiver or termination of the License Agreement following the date hereof shall have any effect on the terms of this Agreement unless such amendment, waiver or termination is approved in writing by PureTech. In addition, each of Gelesis-US and Gelesis-Bermuda agree not to, through any reorganization, recapitalization, reclassification, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by such party, but will at all times in good faith assist in the carrying out of all the provisions of this Agreement and in the taking of all such action as may be necessary or appropriate in order to protect the rights described herein against impairment.

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IN WITNESS WHEREOF, the parties have executed this Royalty and Sublicense Income Agreement as of the date first above written.

AMENDMENT NO. 1 TO ROYALTY AND SUBLICENSE INCOME AGREEMENT

This Amendment No. 1 (“Amendment No. 1”) to the Royalty and Sublicense Income Agreement dated as of December 18, 2009 (the “Agreement”) by and among Gelesis, Inc, a Delaware corporation (“Gelesis-US”), Gelesis IP L. P., a Bermudan limited partnership (“Gelesis-Bermuda”), and PureTech Ventures, LLC, a Delaware limited liability company (“PureTech”), is entered into on this 28th day of June, 2012 by and among Gelesis-US, Gelesis-Bermuda, PureTech, and Gelesis, LLC, a Delaware limited liability company (“Gelesis. LLC”). This Amendment No. 1 shall not become binding and shall have no effect unless and until Gelesis, Inc. enters into a License and Collaboration Agreement (the “Gelesis/AZ Agreement”) with AstraZeneca AB (“AstraZeneca”) substantially in the form attached hereto as Exhibit A. The date on which the Gelesis/AZ Agreement is signed shall be the effective date (the “Amendment No. 1 Effective Date”) of this Amendment No. 1. For purposes hereof, all capitalized terms used herein but not defined herein shall have the meanings given to them in the Master Agreement and License Agreement.

Pursuant to Section 6(e) of the Agreement and Section 9. 9 of the License Agreement, Gelesis-US, Gelesis-Bermuda, Gelesis, LLC, and PureTech hereby agree as follows:

1. The parties hereby agree that Gelesis-US and Gelesis-Bermuda hereby assign to Gelesis, LLC, and Gelesis, LLC hereby accepts and assumes, all rights, interests, and obligations under this Agreement. All references to “Gelesis-US”, “Gelesis-Bemuda”, and “Gelesis” in the Agreement shall hereafter be deemed to refer to Gelesis, LLC.

2. Section 2 of the License Agreement is hereby deleted and replaced its their entirety as follows:

“2. In the event that, on a country-by-country basis, one or more patents are issued by the patent authority in that country and contain a Valid Claim, Gelesis LLC shall pay to PureTech Ventures, LLC two percent (2%) of Net Sales of such Licensed Product during the Calendar Year. For the avoidance of doubt there is no increase to the royalty for more than one Valid Claim. In the event that, on a country-by country basis, there is no Valid Claim, Gelesis LLC shall pay to PureTech five percent (5%) of any royalty paid to Gelesis, LLC by AstraZeneca pursuant to Section 10. 5. 2 (i. e. Royalty Scenario 2) of the Gelesis/AZ Agreement. The royalties referred to in Section 2 shall (i) be paid to PureTech within thirty (30) days following receipt of such royalty by Gelesis, LLC from AstraZenca and (b) be subject to all of the same adjustments as the royalties payable to Gelesis, LLC under the AstraZeneca Agreement.”

Solely for purposes of this Section 1 of this Amendment No. 1, all capitalized terms shall have the meanings ascribed to them in the Gelesis/AZ Agreement.

3. In the event that the Gelesis/AZ Agreement is terminated, PureTech may request in writing that the Amendments set forth in Section 2 of this Amendment No. 1 be terminated. In such event, the amendment set forth in Section 2 of this Amendment No. 1 shall terminate and be of no further force or effect.

4. The Agreement (including Amendment No. 1) are hereby confirmed and continue in all other respects.

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IN WITNESS WHEREOF, the parties have caused this Amendment No to be executed by their duly authorized representatives as of the Amendment No, 1 Effective Date.

Exhibit 10.8

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH “[***]”. SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF DISCLOSED.

SECOND AMENDED AND RESTATED

SUPPLY AND DISTRIBUTION AGREEMENT

This SECOND AMENDED AND RESTATED SUPPLY AND DISTRIBUTION AGREEMENT (this “Agreement”), is made and entered into as of the first day of July, 2021 (the “Second Restatement Date”), by and between Roman Health Pharmacy LLC, a Delaware limited liability company, having its principal office at 900 Broadway, Suite 706, New York, NY 10003 (“RO”) and Gelesis Inc., a Delaware corporation, having its principal office at 501 Boylston Street, Suite 6102, Boston, MA 02116 (“GELESIS”). RO and GELESIS each may be referred to herein individually as a “Party,” or collectively as the “Parties.”

WITNESSETH:

WHEREAS, GELESIS has developed and manufactured the medical device product PLENITY™, an orally administered, non-stimulant, non-systemic prescription aid in the form of capsules for weight management, as further described on Schedule A (the “Product”) and has obtained a de novo classification order from the FDA (as defined below) to market, distribute and sell the Product in the United States; and

WHEREAS, GELESIS desires to appoint RO as the exclusive distributor of the Product in the Territory in the Field (each as defined below);

WHEREAS, GELESIS further agrees to supply RO with the Product under the terms and conditions of this Agreement;

WHEREAS, RO desires to serve as the exclusive distributor of the Product in the Territory in the Field and to purchase the Product from GELESIS, in each case, subject to the terms and conditions of this Agreement;

WHEREAS, the Parties previously entered into that certain Supply and Distribution Agreement, made and entered into as of the Effective Date (defined below) (the “Original Agreement”)

WHEREAS, the Parties amended and restated the Original Agreement pursuant to that certain Amended and Restated Supply and Distribution Agreement made and entered into as of the Restatement Date (defined below) (the “First Amended and Restated Agreement”); and

WHEREAS, the Parties now desire to amend and restate the First Amended and Restated Agreement in its entirety as follows;

NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises and covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows:

ARTICLE 1

DEFINITIONS

Unless otherwise specifically provided herein, the following terms shall have the following meanings:

1.1.            “Adverse Event” means an event involving a (i) death, or (ii) an injury or illness that is life-threatening, results in irreversible impairment or damage to a body structure or function, or necessitates medical or surgical intervention to preclude irreversible impairment or damage to a body structure or function, excluding trivial impairment or damage, where the event was or may have been attributed to the Product, or the Product was or may have been a factor in the event, including events occurring as a result of user error, the manufacture, design or labeling of the Product, or the failure or malfunction of the Product.

1.2.            “Affiliate” means, with respect to a Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such first Person at any time for so long as such Person controls, is controlled by or is under common control with such first Person. For purposes of this definition, “control” and, with correlative meanings, the terms “controlled by” and “under common control with,” shall mean (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person, whether through the ownership of voting securities, by contract relating to voting rights or corporate governance, or otherwise, or (b) the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities or other ownership interest of a Person (or, with respect to a limited partnership or other similar entity, its general partner or controlling entity); provided that, if local law restricts foreign ownership, control will be established by direct or indirect ownership of the maximum ownership percentage that may, under such local law, be owned by foreign interests.

1.5.             “Allotment Period” [***].

1.6.            “Applicable Law” means all foreign, federal, state and local laws, rules, regulations and requirements of governmental and regulatory authorities applicable to the Parties, this Agreement, or the Manufacture, storage, handling, transportation, prescribing, Distribution and use of the Product in the Territory.

1.9.             “Business Day” means a day that is not a Saturday, Sunday or day on which banking institutions in New York, New York are required by law to remain closed.

1.10.         “CGMP” means the current good manufacturing practices and quality system requirements applicable to the Manufacturing, handling, storage and distribution of the Product pursuant to Applicable Law, including, the regulations of the FDA in 21 C.F.R. Part 820, as from time to time in effect.

1.11.           “Change of Control” means, with respect to a Person, any of the following transactions with a Third Party (a “Third Party Acquirer”): (a) a merger or consolidation of such Person with the Third Party Acquirer which results in the holders of the voting securities of such Person outstanding immediately prior thereto (other than the Third Party Acquirer, its “affiliates” and “associates” (as such terms are used in the Exchange Act)) ceasing to represent at least fifty percent (50%) of the combined voting power of the surviving entity (or, if applicable, its parent company) immediately after such merger or consolidation; (b) the sale to the Third Party Acquirer of all or substantially all of the business of such Person to which this Agreement relates (whether by merger, consolidation, sale of stock, sale of assets or other similar transaction); or (c) the Third Party Acquirer (which shall not be any trustee or other fiduciary holding securities under an employee benefit plan of such Person, or any corporation owned directly or indirectly by the stockholders of such Person, in substantially the same proportion as their ownership of stock of such Person), together with any of the Third Party Acquirer’s “affiliates” or “associates”, as such terms are used in the Exchange Act, becoming the beneficial owner of fifty percent (50%) or more of the combined voting power of the outstanding securities of such Person or by contract or otherwise having the right to control the Board of Directors or equivalent governing body of such Person or the ability to cause the direction of management of such Person.

1.12.          “Company Names” means GELESIS’ (or its successor in interest’s) corporate name(s), as may be used in connection with the Distribution of the Product in the Field in the Territory.

1.13.           “Competing Product” [***].

1.15.          “Confidential Information” means, with respect to a Party, all confidential and proprietary information provided by or on behalf of such Party to another Party either in connection with the discussions and negotiations pertaining to this Agreement or in the course of performing this Agreement, whether or not marked as confidential, including without limitation know-how, knowledge, practices, processes, ideas, research plans, engineering designs and drawings, research data, personal data, manufacturing processes and techniques; scientific, manufacturing, marketing and business plans, and financial and personnel matters, sales, suppliers, customers, employees, investors or business. For purposes of this Agreement, the terms of this Agreement shall be deemed to be Confidential Information of both Parties.

1.16.          “Contract Manufacturer” means any Third Party contract manufacturer of GELESIS to Manufacture the Product to be supplied to RO under this Agreement, which are listed on Schedule B, as amended from time to time.

1.18.           “Default Shipping Costs” means the actual, out-of-pocket costs incurred by RO or any of its Affiliates for the shipping option for each package of the Product shipped, which shipping option shall be selected by GELESIS from RO’s standard shipping options from time to time on its or its Affiliates’ telehealth platform. Such shipping costs will not be charged to the End Users selecting such standard shipment option.

1.20.           “Distribute” means sell, have sold, provide, have provided, ship, have shipped, distribute, have distributed, and otherwise commercialize and have commercialized.

1.22.           “End User” means any patient for whom the Product has been indicated for use per the de novo classification order issued by the FDA.

1.23.            “Exclusive Period” [***].

1.24.            “FDA” means the United States Food and Drug Administration and any successor agency thereto.

1.25.            “Field” [***].

1.26.            “First Amended and Restated Agreement” has the meaning set forth in the recitals.

12.2.

9.1.

1.33.           “Indemnified Party” means the Party seeking indemnification for Losses pursuant to Section 12.1 or 12.2.

1.34.            “Indemnifying Party” means the Party from which indemnification is sought pursuant to Section 12.1 or 12.2.

1.35.            “Initial 2021 Purchase” has the meaning set forth in Section 4.2(g).

1.36.            “Lookback Period” means, with respect to each Allotment Confirmation, [***].

1.38.           “Mail Order/Online Pharmacy” means the business of (a) receiving orders for medical products or devices that are submitted by or on behalf of End Users or Health Care Providers via postal or other package delivery services, or via telecommunications, internet, or other remote communication technologies, and (b) filling such orders by shipping such products or devices to such End Users.

1.39.          “Manufacture” and “Manufacturing” means, with respect to the Product, the manufacturing, processing, formulating, packaging, labeling, holding and quality control testing of the Product.

1.40.          “Named Competitors” means the following Third Parties (and their successors or assigns of their respective business in the Field) and each of their respective Affiliates: [***].

1.45.          “Person” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization, including a government or political subdivision, department or agency of a government.

1.46.           “Previous Supply Price” means [***] for each twenty eight (28)-day supply unit of the Product purchased by RO, which supply price was in effect prior to the Restatement Date.

1.48.          “Product Packaging” means (a) any container, packaging, or wrapper of a Product and all labels and other written, printed or graphic matter affixed to any container, packaging or wrapper utilized with a Product, (b) any written material packaged with or otherwise physically accompanying a Product, including package inserts, and (c) any written material related to (a) or (b) that is required to be submitted to or approved by a Regulatory Authority or that is subject to Applicable Law.

1.49.           “Product Quality Complaint” means such Manufacturing or packaging- related complaints or other complaints alleging deficiencies related to the identity, quality, durability, reliability, safety, effectiveness, or performance received from Third Parties related to a Product, including complaints involving the possible failure of a Product to meet any of the Specifications.

1.50.           “Product Trademark” means the Trademark PLENITY™, all packaging designs and other trade dress used in connection with the Product and such other Trademarks relating thereto and any registrations thereof or any pending applications relating thereto.

1.53.          “Reasonable Efforts” means, with respect to an activity to be conducted by a Party, the level of effort that would generally be used by a similarly situated company to conduct such activity with respect to a product owned by it or to which it has rights similar to the rights contemplated under this Agreement, at a similar stage in its development or product life, taking into account, without limitation, issues of safety and efficacy, product profile, the proprietary position, the then-current competitive environment for such product, the likely timing of the product’s entry into the market, the regulatory environment and status of the product, and other relevant scientific and technical factors, in each case as measured by the facts and circumstances at the time such efforts are due.

1.55.          “Regulatory Approval” means any and all approvals, clearances, orders, licenses, registrations or authorizations of the FDA, or other federal, state or local regulatory authorities, necessary for the sale and marketing of the Product in the Field in the Territory, including a de novo classification order for the Product, Manufacturing approval or authorization and labeling approval or labeling in accordance with Applicable Law related thereto.

1.56.          “Regulatory Authorities” means any applicable supra-national, federal, national, regional, state, provincial or local regulatory agencies, departments, bureaus, commissions, councils or other government entities, including the FDA and any entity exercising regulatory authority with respect to the Manufacture, Distribution, use, or other regulation of the Product in the Territory.

1.57.          “Regulatory Documentation” means all applications, submissions, registrations, licenses, authorizations and approvals (including all Regulatory Approvals) and all correspondence submitted to or received from the FDA or other federal, state or local regulatory authorities (including minutes and official contact reports relating to any communications with the FDA or other federal, state or local regulatory authorities) and all supporting documents and all clinical studies and tests, relating to a Product and all data contained in any of the foregoing or required to be maintained pursuant to Applicable Law, including advertising and promotion documents, Adverse Event files, Product Quality Complaint files and Manufacturing records.

1.58.           “Restatement Date” means January 12, 2021.

1.64.           “Second Restatement Date” has the meaning set forth in the preamble.

1.65.           “Specifications” means the specifications and quality control testing procedures, including the requirements set forth in the Regulatory Approvals, for a Product, each as may be amended or supplemented from time to time by GELESIS in accordance with Section 8.5.

1.67.           “Supply Price” means, for each twenty eight (28)-day supply unit of the Product purchased by RO, (i) [***] for the Initial 2021 Purchase, (ii) [***] for the Second 2021 Purchase, and (iii) thereafter, the price that is mutually agreed by the Parties in writing (which price shall be no more than [***] for each twenty eight (28)-day supply unit of the Product purchased by RO).

1.69.           “Territory” [***].

1.70.           “Third Party” means any Person other than GELESIS and RO, or their respective Affiliates.

1.72.           “Trademark” shall include any word, name, symbol, color, designation or device or any combination thereof, including any trademark, trade dress, brand mark, trade name, brand name, logo or business symbol together with the goodwill of the business associated therewith and symbolized thereby.

ARTICLE 2

RIGHT OF DISTRIBUTION; EXCLUSIVITY

2.1.             Exclusive Distributorship. During the Exclusive Period, GELESIS hereby appoints RO and its Affiliates as the exclusive distributor of the Product in the Field in the Territory, and grants RO and its Affiliates the exclusive right to Distribute the Product in the Field in the Territory.

2.2.             Exclusive License. Subject to Section 9.2, during the Exclusive Period, GELESIS hereby grants to RO and its Affiliates an exclusive (except as set forth expressly in Section 2.3(b)), royalty-free, fully paid up license, with the right to transfer or sublicense solely in accordance Section 14.4, under Gelesis’ right, title and interest in and to Product Trademarks and Company Names, to use the Product Trademarks and Company Names in accordance with the terms of this Agreement solely for the purposes of Distribution of the Product in the Field in the Territory.

                (a)            During the Exclusive Period, [***].

                (b)           During the Exclusive Period, [***].

2.4.            Extension of Exclusive Period. The Exclusive Period may be extended by mutual written agreement of the Parties. On or before the date that is ninety (90) days prior to the end of the initial Exclusive Period (and any extension thereof), each Party will inform the other Party of its intention to either extend the Exclusive Period or to permit the Exclusive Period to expire.

2.5.            Expiration of the Exclusive Period. Unless otherwise agreed by the Parties in writing, upon expiration of the Exclusive Period, the exclusive right and license granted by GELESIS to RO and its Affiliates under Section 2.1 and Section 2.2 shall automatically convert to non-exclusive for the remainder of the Term.

ARTICLE 3
COMMERCIALIZATION OF THE PRODUCT

3.1.            Distribution Efforts. During the Term, RO shall use Reasonable Efforts to Distribute the Product in the Field in the Territory. Subject to GELESIS meeting its obligations pursuant to ARTICLE 4, RO shall maintain an inventory of Product and a distribution network that are sufficient to permit reasonably prompt delivery of Product to customers and to meet reasonably anticipated market demand for the Product in the Field in the Territory.

3.2.            Packaging and Labeling. GELESIS shall be responsible, at its sole expense, for providing all Product Packaging for the Product to be Distributed in the Territory in the Field under this Agreement in accordance with all Regulatory Approvals and Applicable Law. Any changes to the labeling and packaging of the Product in the Territory shall be subject to Section 8.5.

3.3.             Expired Product. RO may not sell the Product with an expired shelf life, and RO shall dispose of such expired Product at RO’s expense in accordance with Gelesis’ written instructions and Applicable Law.

ARTICLE 4

SUPPLY OF PRODUCT

4.1.            General. Subject to the terms and conditions of this Agreement, during the Term, GELESIS agrees to supply RO with, and RO agrees to purchase from GELESIS, all of RO’s requirements of supplies of the Product in finished, packaged form subject to Sections 4.2 and 4.3.

                   (a)    RO will notify GELESIS at least 45 days prior to the anticipated date of first sale of the Product by RO or any of its Affiliates. [***].

(b)              Within three (3) Business Days of receiving each Allotment Confirmation, RO shall submit to GELESIS a purchase order (“Purchase Order”), which may be submitted via email, specifying (i) the amount of Product RO will order for each month during the Allotment Period, which amount shall not exceed the maximum amount set forth in the Allotment Confirmation for each such month, and (ii) the delivery date(s) for each month of supply, which date(s) shall be no earlier than seven (7) days prior to the beginning of such month. For the avoidance of doubt, RO may specify multiple delivery dates (at intervals no shorter than weekly) for any and all months covered by the applicable Purchase Order.

                 (c)    [***].

                 (d)    [***].

(e)              If Product is delivered to RO with less than five (5) months of shelf life remaining and RO fails to sell or dispense such Product during the applicable Lookback Period before it expires, then, for purposes of the calculations set forth in Sections 4.2(c) and 4.2(d), such Product shall not count as Product delivered by GELESIS to RO for such Lookback Period.

(f)               Notwithstanding Sections 4.2(c) and 4.2(d), GELESIS may increase the maximum amount of the Product to be supplied in any Allotment Confirmation at its own discretion.

(g)               Notwithstanding the foregoing or anything to the contrary herein, the Parties acknowledge and agree that (i) RO’s initial purchase made during the 2021 calendar year was [***] 28-day supply units (the “Initial 2021 Purchase”) and (ii) RO’s second purchase made during the 2021 calendar year will be [***] 28-day supply units (the “Second 2021 Purchase”). The Initial 2021 Purchase and the Second 2021 Purchase will be delivered by GELESIS pursuant to the delivery schedule provided by RO in Purchase Orders submitted by RO from time-to-time on an as needed basis, subject to the following minimums. With respect to the Initial 2021 Purchase, at least [***] 28-day supply units of Product will be shipped by January 15, 2020, and at least [***] additional 28-day supply units of Product will be delivered on the first day of each month in 2021 thereafter until the entire Initial 2021 Purchase has been fulfilled, in each case to the delivery location(s) designated by RO in the applicable Purchase Order; provided that GELESIS shall deliver at least [***] of the Initial 2021 Purchase (i.e., [***] 28-day supply units of Product) by November 30, 2021 to the delivery location(s) designated by RO in the applicable Purchase Orders. With respect to the Second 2021 Purchase, at least [***] 28-day supply units of Product will be delivered by September 1, 2021, at least [***] additional 28-day supply units of Product will be delivered by the first day of each of October 2021, November 2021, and December 2021, and at least [***] additional 28-day supply units of Product will be delivered on the first day of each month in 2022 thereafter until the entire Second 2021 Purchase has been fulfilled, in each case to the delivery location(s) designated by RO in the applicable Purchase Order. Upon notice from RO to GELESIS that RO is nearing depletion of the Second 2021 Purchase, GELESIS shall provide RO with an Allotment Confirmation for the following Allotment Period, and Sections 4.2(a)-(f) shall continue to apply.

4.3.             Supply Shortage. In the event of any shortage experienced by GELESIS with respect to any inputs or capacity that may reasonably be expected to affect GELESIS’ ability to satisfy its supply obligations hereunder in respect of a particular month, then GELESIS shall notify RO promptly after it becomes aware of such circumstances that could reasonably be expected to result in any such shortage. GELESIS shall, unless mutually agreed otherwise by the Parties, allocate its available inputs and capacity pro rata amongst the affected Purchase Order(s) and any order of any Third Party dispensing the Product that has been prescribed by a Health Care Provider to an End User in the course of providing medical services to such End User in person. [***].

4.4.              Delivery. Subject to Section 4.3, GELESIS shall deliver all quantities of the Product set forth in each Purchase Order DDP (incoterms 2010) to up to [***] delivery locations within the Territory as may be specified from time to time by RO, at GELESIS’ sole cost and expense, on the dates specified in such Purchase Order. Title and risk of loss and damage to the Product shall pass to RO upon delivery of the Product to RO at the delivery location(s) specified in the applicable Purchase Order. For the avoidance of doubt, GELESIS shall be solely responsible for importation of the Product into the Territory and any costs and expenses associated therewith. If GELESIS does not satisfy its delivery requirements for a particular month by the date that is ten (10) days following the delivery date set forth in the applicable Purchase Order, GELESIS shall, at RO’s sole discretion, (a) refund the amount paid by RO or its Affiliates for the undelivered Product (or any portion thereof), or (b) deliver such ordered Product as soon as reasonably possible, but in no event no later than thirty (30) days following the original delivery date set forth on the applicable Purchase Order.

4.5.             Initial Inspection. Upon delivery in accordance with Section 4.4, RO will have seven (7) Business Days to inspect each delivery of the Product, and shall report any defects in quantity or nonconformance with the Product warranty set forth in Section 5.1 identifiable from visible inspection to GELESIS within such period. If no such report is received by GELESIS within such period, RO will be deemed to have accepted such Product. If such report is timely provided by RO, then:

                   (a)    If GELESIS does not agree with RO on the alleged nonconformance in the report, a designee of RO and a designee of GELESIS shall promptly meet to discuss and attempt to resolve the dispute in good faith within five (5) Business Days. If the Parties cannot resolve the dispute within five (5) Business Days, the Parties shall designate an independent testing laboratory reasonably acceptable to both Parties for a determination, which determination shall be binding on the Parties, absent manifest error. If the Parties cannot agree on an independent testing laboratory within ten (10) Business Days, then either Party may, upon notice to the other Party, refer the dispute to arbitration in accordance with Section 14.6(a). The Parties shall attempt to resolve any such dispute within ninety (90) days.

                   (b)    If GELESIS agrees with RO that the Product identified in the report is nonconforming, or, pursuant to Section 4.5(a), it is ultimately determined that the Product identified in the report is nonconforming, then as GELESIS’ sole liability and RO’s sole remedy with respect to such nonconforming Product, GELESIS shall deliver replacement Product at no additional charge to RO in substitution for the nonconforming Product.

ARTICLE 5

PRODUCT WARRANTY; QUALITY

5.1.            Product Warranty. GELESIS hereby represents and warrants that any Product delivered to RO hereunder will (a) be free from any defects; (b) be designed, manufactured, packaged, labeled, stored, and distributed in accordance with CGMP and Applicable Law; and (c) conform to the Specifications and the applicable certificate of analysis at the time of delivery. GELESIS shall ensure that any Product delivered to RO hereunder shall have at least [***], and in any event no less than [***], of its shelf life remaining at the time of delivery. The Parties shall negotiate at quarterly intervals, on a good faith basis and taking into account the volume of Product sold by RO to End Users in eighty four (84)-day supply units, to establish an amount of Product delivered to RO that shall have a shelf life of at least [***]remaining at the time of delivery. In the event that Product is delivered to RO with less than [***] of shelf life remaining at the time of delivery, the Parties will work together in good faith to increase the frequency that Product is shipped and delivered to RO.

5.2.             Intentionally Omitted.

5.3.             Record Keeping by GELESIS. During the Term, GELESIS shall maintain, or cause to be maintained, all records necessary to comply with all Applicable Law relating to the Manufacture and supply of the Product. All such records shall be maintained for such period as may be required by Applicable Law; provided, however, that all records relating to the Manufacture, stability and quality control of each batch of a Product shall be retained at least until the first (1st) anniversary of the end of the approved shelf life for all Product from such batch.

                   (a)    RO shall notify GELESIS in writing of any claim that any such Product supplied under this Agreement does not conform to the warranty set forth in Section 5.1, which nonconformance was not identifiable upon visual inspection as provided in Section 4.5, within ten (10) Business Days after RO becomes aware of any such nonconformity. RO shall provide GELESIS with a sample of such nonconforming Product, if available, and all relevant reports, data, and laboratory test results. Failure by RO to provide notice of nonconformance within the applicable timeframe shall constitute irrevocable acceptance of the Product by RO.

                   (b)    If RO notifies GELESIS of any nonconforming Product pursuant to Section 5.4(a) (other than a claim that the Product does not conform to Section 5.1(b)) and RO and GELESIS cannot agree as to whether such Product is nonconforming, RO and GELESIS shall designate an independent testing laboratory reasonably acceptable to both Parties for a determination, which determination shall be binding on the Parties, absent manifest error. The Party that was incorrect as to whether the Product was conforming shall pay the testing laboratory’s fees. If the Parties cannot agree on an independent testing laboratory within ten (10) Business Days, or if the dispute relates to a claim that the Product does not conform to Section 5.1(b), then either Party may, upon notice to the other Party, refer the dispute to arbitration in accordance with Section 14.6(a). The Parties shall attempt to resolve any non-conformance issue within ninety (90) days.

                    (c)    If GELESIS agrees that the Product identified by RO is nonconforming Product, or, pursuant to Section 5.4(b) it is ultimately determined that the Product identified by RO is nonconforming, then as GELESIS’ sole liability and RO’s sole remedy with respect to such nonconforming Product (except, in each case, with respect to any indemnification obligations arising pursuant to Article 12), GELESIS shall, at RO’s option, either: (i) deliver replacement Products at no additional charge to RO in substitution for the nonconforming Product, or (ii) refund to RO the price paid to GELESIS by RO for such nonconforming Product, or, if the invoice has not been paid, cancel the invoice, and reimburse RO the costs for removal or disposal of such nonconforming Product.

                    (d)    If nonconforming Product is dispensed prior to the discovery of the nonconformance, RO or its Affiliates may notify Health Care Providers and pharmacies associated with RO’s telehealth platform who prescribed or Distributed the nonconforming Product and End Users to whom the nonconforming Product was dispensed of the nonconformance with a copy to GELESIS, if, in RO’s discretion, such notice is reasonably appropriate to safeguard patient health and safety. Notwithstanding this section, any recall of the Product will be conducted in accordance with Section 8.3.

ARTICLE 6
PRICE AND PAYMENT

6.2.            Payment by RO.

(a)              Subject to Section 6.3, with respect to the Product purchased or delivered to a Ro facility as of the Restatement Date and sold by RO or any of its Affiliates to any End User for a given month, RO shall pay to GELESIS:

(i)       [***]

(ii)       [***]

(A)       [***]

(B)       [***]

(C)       [***]

(D)       [***].

(b)       [***].

(c)       [***].

(d)       [***].

(e)       [***].

6.3.            Purchase Price Adjustment. During the Term, if GELESIS enters into an arrangement with a Third Party with respect to Distribution or commercial supply of the Product, whereby GELESIS provides such Third Party pricing (including volume discount pricing) for each twenty eight (28)-day supply unit of the Product that is, taken as a whole, lower than the Previous Supply Price or the Supply Price, as applicable, GELESIS shall promptly notify RO, and such lower pricing shall automatically apply to the Previous Supply Price or the Supply Price, as applicable, of the Product supplied by GELESIS to RO hereunder effective as of the date such lower pricing was made available to such Third Party, and, to the extent that RO has paid any amount for the Product in excess of such adjusted price following the date such lower pricing was made available to such Third Party, GELESIS shall issue RO a credit equal to such amount against future payment for the Product payable by RO (or, if there is a supply shortage at the time the credit would be issued by GELESIS or used by RO, at RO’s option, GELESIS will issue RO a cash reimbursement or a credit).

6.4.            Intentionally Omitted.

6.5.            Payment Terms.

(a)    All payments payable by RO to GELESIS pursuant to Section 6.2(a) for a given month shall be paid in full by RO within thirty (30) days following the end of such month. When making such payments, RO shall furnish to GELESIS a written report stating the number of packages of the Product shipped, and the aggregate number of twenty eight (28)-day supply unit of the Product sold, in each case, by RO or any of its Affiliates to End Users during such month, and the calculation of payments payable by RO to GELESIS pursuant to Section 6.2(a). All payments payable by RO to GELESIS pursuant to Section 6.2(a) and 6.2(b)(i) have been timely paid in full by RO. The payment payable by RO to GELESIS pursuant to Section 6.2(b)(ii) shall be due and payable by RO within thirty (30) days following the Second Restatement Date and RO’s receipt of a correct invoice. All payments payable by RO to GELESIS pursuant to Section 6.2(c) for Product purchased by RO during any calendar month shall be paid in full by RO within thirty (30) days of the end of such calendar month following receipt, inspection and acceptance of a full and complete delivery of the applicable Products (including an invoice therefor). Any payments payable by RO to GELESIS pursuant to Section 6.2(d) shall be paid in full by RO within thirty (30) days of the end of each calendar quarter for Product sold during such calendar quarter having a resale price greater than [***] per twenty eight (28)-day supply unit, subject to any refunds or returns as provided pursuant to Section 6.2(d).

(b)    If there is any dispute with regard to the amount payable by RO to GELESIS pursuant to Section 6.2, RO shall not be obligated to pay such disputed portion until the dispute is resolved by the Parties. The Parties shall use good faith efforts to resolve any such disputes promptly. Upon resolution of any such dispute, RO shall pay to GELESIS the amounts determined to be due within five (5) Business Days.

(c)    All payments to be made by one Party to the other Party (“Payee”) under this Agreement shall be made in United States dollars and shall be paid by bank wire transfer or by automated clearinghouse (electronic funds transfer) in immediately available funds to such bank account designated in writing by the Payee from time to time.

6.6.            Taxes. The fees specified in this Agreement are exclusive of any sales, use, excise, or similar taxes (“Sales Tax”). RO shall calculate and pay to GELESIS all Sales Tax imposed by any federal, state, provincial, local, or other governmental entity for the Product or services provided under this Agreement, excluding, for the avoidance of doubt, any customs, duties, levies, tariffs or similar charges of any kind, or any taxes based solely on GELESIS’ net income. In the event that GELESIS is required to pay any such Sales Taxes, RO shall reimburse GELESIS for payment of such taxes paid. GELESIS agrees to cooperate in good faith with RO to enable RO to secure any exemption from Sales Tax upon resale of the Product to End Users.

ARTICLE 7

INSPECTION AND AUDIT

(a)    Annual Inspection. During the Term, and no more than once during any twelve (12) month period, upon at least thirty (30) days prior written request of RO, RO and its designated agents may visit and conduct inspection of those portions of the facilities of GELESIS, an Affiliate, or a Contract Manufacturer where the Product to be supplied under this Agreement is being Manufactured, during regular business hours, to ascertain compliance with CGMP, Applicable Law, and the Specifications in the Manufacture, handling, storage, and shipping of the Product, and to verify GELESIS’ compliance with the terms and conditions of this Agreement (an “Inspection”). As part of any Inspection, RO and its agents may inspect (i) the materials used in the Manufacture of the Product, (ii) the holding facilities for such materials, (iii) the equipment used in the Manufacture of the Product, and (iv) any related records.

(b)    For Cause Inspection. In addition, RO may conduct an Inspection at any time upon reasonable prior notice to GELESIS if such an Inspection is a reasonable response to a Regulatory Authority inquiry regarding any Product, a deviation in Manufacture of the Product, Product Quality Complaint or Adverse Events regarding the Product, or a material breach of this Agreement.

(c)    Regulatory Inspections. During the term of this Agreement, GELESIS shall notify RO promptly after learning of any proposed or unannounced visit or inspection by any Regulatory Authority of any facility (whether owned by GELESIS, an Affiliate, or a Contract Manufacturer) involved in the Manufacture or storage of the Product to be supplied under this Agreement. Unless the Regulatory Authority objects or otherwise prohibited by Applicable Law, GELESIS shall permit RO or its agents to be present in such visit or inspection. GELESIS shall provide to RO (i) a copy of any report or other written communications received by GELESIS from such Regulatory Authority in connection with such visit or inspection within seven (7) days after receipt thereof, and (ii) a copy of all responses thereto submitted to such Regulatory Authority as soon as practicable relating to the manufacture of the Product.

(d)    Conditions on Inspections. RO shall bear all of its own costs related to any such Inspection or visit. During each Inspection, RO and its designated agents may only inspect materials, facilities and equipment to the extent used in the Manufacture and supply of the Product. Inspections may not unreasonably interfere with GELESIS’ operations or the operations of any of its Affiliates or Contract Manufacturers. In addition, GELESIS may impose reasonable rules and requirements on an Inspection with respect to the protection of confidential information or trade secrets by asking RO or its agents to execute a confidentiality agreement containing terms no less strict than the relevant terms contained herein.

(e)    Remedial Efforts. Following an Inspection, the Parties shall meet to discuss findings, and GELESIS shall use Reasonable Efforts to implement (or cause any applicable Affiliate or Contract Manufacturer to implement) reasonable corrective action within sixty (60) days of notification of any problems (or, if such implementation cannot reasonably be completed within sixty (60) days, GELESIS shall commence such implementation or cause the Affiliate or Contract Manufacturer to commence such implementation, within sixty (60) days, and shall diligently continue or shall have diligently continued such implementation thereafter).

7.2.            Audit by GELESIS.

(a)    Annual Audit. During the Term, at the request of GELESIS, RO shall permit GELESIS, through an independent accounting firm retained by GELESIS at its sole cost, at reasonable times and upon reasonable prior written notice, to examine and audit the books and records maintained by RO solely for purposes of verifying RO’s compliance with the terms and conditions of this Agreement, including verifying RO’s compliance with its payment obligations pursuant to Section 6.2 (each, an “Audit”). RO and its accountants shall cooperate with and permit such firm to review all invoices, receipts, and other appropriate information relating to the Distribution of the Product.

(b)    For Cause Audit Right. In addition, GELESIS may conduct an Audit at any time upon reasonable prior notice to RO if such an Audit is a reasonable response to a material breach of this Agreement.

(c)    Conditions on Audit. Any data related to patient personal information must be de-identified before such data can be audited. Such examination and audit may not be conducted more than once in any twelve (12)-month period. Audits may not unreasonably interfere with the RO’s operations or the operations of any of its Affiliates. In addition, RO may impose reasonable rules and requirements on an Audit with respect to the protection of confidential information or trade secrets by asking the independent firm to execute a confidentiality agreement containing terms no less strict than the relevant terms contained herein.

(d)    Audit Results. RO shall receive a copy of the audit report furnished by such accounting firm to GELESIS. Should such Audit lead to the discovery of a discrepancy of payments by RO to GELESIS’ detriment, and only to the extent that RO agrees with and accepts such conclusion under the Audit, RO shall pay, within thirty (30) days after its receipt from the accounting firm of the audit report, the amount of the discrepancy. If RO does not agree with the conclusion of such report, the matter shall be referred to arbitration in accordance with Section

14.6. Should such Audit lead to the discovery that an excess amount of payment has been made by RO to GELESIS, then GELESIS shall, within thirty (30) days after its receipt from the accounting firm of the audit report, credit RO for such amount against its future payment obligations pursuant to Section 6.2 (or, if there is a supply shortage at the time the credit would be issued by GELESIS or used by RO, at RO’s option, GELESIS will issue RO a cash reimbursement instead of a credit).

ARTICLE 8

REGULATORY MATTERS

(a)    During the Term, GELESIS shall be responsible for preparing and filing all Regulatory Documentation necessary to obtain and maintain Regulatory Approvals for the Product in the Territory; provided that RO shall have the primary responsibility to obtain and maintain Regulatory Approvals to the extent solely related to RO’s Distribution of the Product in the Field in the Territory.

(b)    Each Party shall have the right to communicate with Regulatory Authorities with respect to the Product (i) to the extent reasonably necessary to exercise its rights, and perform its obligations hereunder, including under this Section 8.1, and (ii) to the extent required by Applicable Law. Each Party shall keep the other Party informed of any material communication with Regulatory Authorities with respect to the Product, and shall, in response to written requests from the other Party, provide the other Party a copy of any such material communications with Regulatory Authorities, and any relevant Regulatory Documentation submitted to or received from the Regulatory Authorities with respect to the Product.

(c)    Each Party shall, upon reasonable request of, and at the cost of the other Party, cooperate with the other Party and assist the other Party in connection with (i) preparing and filing of any Regulatory Documentation in connection with obtaining and maintaining Regulatory Approvals for the Product in the Territory, and (ii) preparing for and conducting any material communications with applicable Regulatory Authorities, in each case, as set forth in this Section 8.1.

8.2.            Adverse Event, and Product Quality Complaint Notification and Reporting.

(a)     Each Party shall notify the other Party promptly (and in no event later than two (2) Business Days of becoming aware of) any material communications from any Regulatory Authority alleging any non-compliance with Applicable Laws or raising any concern, in each case, with respect to the Manufacturing, quality, safety, efficacy or marketing of the Product (including any Form FDA 483 with inspectional observations, Warning Letter, or Untitled Letter).

(b)    GELESIS shall be solely responsible for submitting medical device reports, including for Adverse Events and applicable Product Quality Complaints, with respect to a Product to FDA and comparable reports to applicable Regulatory Authorities, in conformance with Applicable Law; provided, however, that each Party shall have the right to make such other reports or communications with applicable Regulatory Authorities as are necessary to comply with Applicable Laws. RO or its Affiliate shall forward reports of Adverse Events to GELESIS no later than two (2) business days of RO or its Affiliate’s becoming aware of such Adverse Event. RO or its Affiliate shall forward reports of Product Quality Complaints of which RO or its Affiliate has become aware to GELESIS on a weekly basis in the form of a report that removes identifying information for the complainants. GELESIS shall provide prompt notice to RO of any significant safety issues or any other information that might necessitate a change in Product Packaging.

(a)    In the event that any Regulatory Authority issues or requests a recall or market withdrawal or takes similar action in connection with any Product in the Territory, GELESIS shall notify RO within one (1) business day of such issuance or request. In the event that either Party determines that such a recall or market withdrawal of the Product may be necessary or advisable, such Party shall advise the other Party thereof within one (1) business day of such determination. GELESIS shall also notify RO promptly in the event of (i) the issuance of an FDA alert or similar alert or foreign equivalent thereof with respect to the Product, and (ii) any communication from any Regulatory Authority regarding a potential recall or market withdrawal of any Product.

(b)    Within a period of time reasonable under the circumstances after the date of a notice given pursuant to the first two sentences of Section 8.3(a), GELESIS shall determine (i) whether to conduct a recall with respect to the Product in the Territory, (ii) the breadth and extent of any such recall, (iii) the strategies and notifications to be used, and (iv) other related issues; provided, however, that, notwithstanding anything contained in clause (i) of this Section 8.3(b), GELESIS shall be required to conduct such recall with respect to the Product in the event that such recall is (A) mandated by any Regulatory Authority, or (B) reasonably requested by RO in writing if RO has a reasonable basis to conclude that material harm to End Users may occur and GELESIS agrees that a recall is appropriate. GELESIS shall be responsible for determining whether such recall must be reported to Regulatory Authorities, e.g., under 21 C.F.R. Part 806, and for all communications with Regulatory Authorities regarding the recall.

(c)    Subject to Section 8.4, any withdrawal or recall with respect to the Product in the Territory required or agreed upon by the Parties pursuant to this Section 8.3 shall be conducted by GELESIS with reasonable cooperation from RO, regardless of the Party requesting such withdrawal or recall.

8.4.         Recall and Market Withdrawal Expenses. GELESIS shall bear the expenses of any recall or market withdrawal of a Product; provided, however, that RO shall bear such expenses if the recall or market withdrawal is due solely to RO’s negligence, willful misconduct or material breach of its obligations under this Agreement. Such expenses of recall or market withdrawal shall include the expenses of notification and destruction or return of the recalled or withdrawn Product.

(a)    Following written notice to RO, GELESIS may amend the Specifications or Product Packaging to the extent required by any applicable Regulatory Authority or by Applicable Law. In addition, if either Party requests a change to the Specifications or Product Packaging other than required by any applicable Regulatory Authority or by Applicable Law, it shall provide written notice to the other Party and shall obtain the other Party’s consent prior to the implementation of such change, which consent may not be unreasonably withheld, conditioned or delayed. GELESIS shall implement or cause to be implemented any such amendments in a timely manner consistent with Applicable Law and the obtaining of any necessary Regulatory Approvals.

(b)    Unless otherwise agreed by the Parties in writing, the reasonable expenses incurred in making any changes in the Specifications or Product Packaging (including the cost of any Inventory rendered unusable due to any such change) shall be borne by (i) GELESIS, if such change is due to a requirement of an applicable Regulatory Authority or Applicable Law or GELESIS’ request, and (ii) RO, if such change is due to RO’s request.

(c)    Without limiting the foregoing, GELESIS shall provide RO reasonable prior notice of any of the following changes with respect to the Manufacture of the Product hereunder: (i) any material change relating to the manufacturing facility for any Product; and (ii) any change that would require a regulatory submission to Regulatory Authorities, where such change relates to, manufacturing facilities, equipment, process, testing methods, or other procedures used to manufacture the Product.

(d)    GELESIS shall be solely responsible for obtaining any necessary Regulatory Approvals in connection with any change to the Specifications, Product Packaging, Manufacture of the Product or any other changes related to the Product.

ARTICLE 9

INTELLECTUAL PROPERTY

9.1.            Ownership of Existing Intellectual Property. Subject to the license and other rights granted to RO in Section 2.2, as between the Parties, GELESIS shall own all right, title, and interest in and to the Product Trademarks, the Company Names, and the other intellectual property owned or controlled by GELESIS prior to the Effective Date and developed or acquired by GELESIS during the Term independently of this Agreement (collectively, “GELESIS Intellectual Property”), and RO shall own all right, title, and interest in and to all intellectual property owned or controlled by RO prior to the Effective Date and developed or acquired by RO during the Term independently of this Agreement (collectively, “RO Intellectual Property”). All license rights to GELESIS Intellectual Property not specifically granted under this Agreement are expressly reserved by GELESIS. Any license granted in this Agreement may be transferred or assigned only in connection with a permitted assignment of this Agreement under Section 14.4.

9.2.            Preservation of Goodwill in Trademarks. GELESIS shall have the right to review and approve RO’s use or display of the Product Trademarks and Company Names prior to such use or display by RO thereof. GELESIS will provide RO with approval or disapproval of the proposed use or display within ten (10) Business Days of RO’s submission to GELESIS. In the event that GELESIS fails to respond within such ten (10) Business Day period, the proposed use or display shall be deemed approved by GELESIS. Without limiting the foregoing, RO shall, and shall cause its Affiliates to, (a) strictly conform to such guidelines as GELESIS may reasonably provide in writing from time to time with respect to the manner of use of the Product Trademarks and Company Names and (b) strictly maintain the quality standards of GELESIS with respect to the goods sold in connection with the Product Trademarks and Company Names.

ARTICLE 10

REPRESENTATIONS, WARRANTIES AND COVENANTS

10.1.          Representations, Warranties and Covenants.    Each Party hereby represents, warrants and covenants to the other Party as of the Effective Date as follows:

(a)    Such Party (i) is duly organized and in good standing under the laws of the state under which such Party is incorporated, (ii) has the power and authority and the legal right to enter into this Agreement to which it is a party and to perform its obligations hereunder and thereunder, and (iii) has taken all necessary action on its part required to authorize the execution and delivery of this Agreement. This Agreement has been duly executed and delivered on behalf of such Party and constitutes a legal, valid and binding obligation of such Party and is enforceable against it in accordance with its terms subject to the effects of bankruptcy, insolvency or other laws of general application affecting the enforcement of creditor rights and judicial principles affecting the availability of specific performance and general principles of equity, whether enforceability is considered a proceeding at law or equity.

(b)    All necessary consents, approvals and authorizations of all Regulatory Authorities and other Persons (i) required to be obtained by such Party in connection with the execution and delivery of this Agreement have been obtained and (ii) required to be obtained by such Party in connection with the performance of its obligations under this Agreement have been obtained or will be obtained prior to such performance.

(c)    With respect to such Party, the execution and delivery of this Agreement and the performance of such Party’s obligations hereunder (i) do not conflict with or violate in any material way any requirement of Applicable Law, (ii) do not conflict with or violate any provision of the articles of incorporation, bylaws, limited partnership agreement or any other organizational document or similar instrument of such Party, and (iii) do not conflict with, violate, or breach or constitute a default under, any contractual obligation or court or administrative order by which such Party is bound.

10.2.          Additional Representations, Warranties and Covenants of GELESIS.

GELESIS represents, warrants and covenants, as applicable, to RO that:

(a)    as of the Effective Date, GELESIS is not aware of (i) any pending or threatened product liability actions, suits, proceedings, claims or investigations against GELESIS (or its predecessors in interest) involving the Product, (ii) any pending or threatened actions, suits, proceedings, claims or investigations (or has not received any communication) alleging that the Manufacturing, Distribution, or use of the Product, Product Trademarks or Company Names has infringed, misappropriated, or otherwise violated, or that by conducting the activities as contemplated in this Agreement either Party would violate, infringe or misappropriate, any of the intellectual property rights of any other Person, (iii) litigation or investigation(s) initiated by, and warning letters or untitled letters received from, Regulatory Authorities with respect to the Product, or (iv) any other pending or threatened actions, suits, proceedings, claims, or investigations that are not covered by the foregoing clauses (i)-(iii) and would reasonably be expected to have (A) a material adverse effect upon, the operations, business, assets or financial condition of GELESIS taken as a whole, or (B) a material impairment of the ability of GELESIS to perform its obligations under this Agreement;

(b)    (i) GELESIS and its Affiliates have sufficient legal rights to grant to RO and its Affiliates the licenses and other rights set forth in this Agreement under the Product Trademarks and Company Names, (ii) GELESIS has not previously licensed, assigned, transferred or conveyed any of its rights or titles in or interests to the Product Trademarks to a Third Party in a manner that would limit the rights granted to RO under this Agreement, and (iii) no patent, trademark or other intellectual property rights owned or possessed by Third Parties would be interfered with, infringed or violated by the Manufacture, Distribution, or use of the Product, or use of the Product Trademarks and Company Names, in each case, pursuant to the terms hereof;

(c)    as of the Effective Date, neither GELESIS nor any of its Affiliates has been debarred or is subject to a debarment proceeding and neither GELESIS nor any of its Affiliates shall use in any capacity, in connection with the activities to be performed under this Agreement, any Person who has been debarred pursuant to Section 306 of the Federal Food, Drug, and Cosmetic Act, as amended, or who is the subject of a conviction described in such section. GELESIS agrees to inform RO in writing immediately if it or any Person who is performing activities under this Agreement is debarred or is the subject of a conviction described in Section 306, or if any action, suit, claim, investigation or legal or administrative proceeding is pending or, to the knowledge of GELESIS, is threatened, relating to the debarment or conviction described in Section 306 of GELESIS or any Person performing activities under this Agreement;

(d)    the information contained in the Product Packaging complies with Applicable Law as of the Effective Date;

(e)    GELESIS shall comply with all Applicable Laws (including, where applicable, FDA, Federal Trade Commission (“FTC”), fraud and abuse, wholesale distribution, health, and pharmacy state and federal laws and regulations (including state and federal laws and regulations related to fee splitting, kickbacks, and physician self-referrals), HIPAA, and state health privacy laws), and will maintain all Regulatory Approvals with respect to the Product, and proper records in accordance with CGMP and other Applicable Laws in connection with the Manufacture and sale to RO of the Product; and

(f)    the Product is not reimbursable under any Third Party payer programs as of the Effective Date, and GELESIS will not pursue any Third Party coverage for the Product during the Exclusive Period; and

10.3.          Additional Representations, Warranties and Covenants of RO. RO represents, warrants, and covenants, as applicable, to GELESIS that:

(a)    RO shall comply with all Applicable Laws (including, where applicable, FDA, FTC, fraud and abuse, wholesale distribution, health, and pharmacy state and federal laws and regulations (including state and federal laws and regulations related to fee splitting, kickbacks, and physician self-referrals), HIPAA, and state health privacy laws) in conducting the Distribution of the Product under this Agreement, and shall maintain proper records in accordance with CGMP and other Applicable Laws in connection with the Distribution of the Product in the Field in the Territory.

(b)    as of the Effective Date, RO is not aware of any pending or threatened litigation, warning letters, untitled letters, actions, suits, proceedings, claims or investigations against RO (or its predecessors in interest), which could interfere materially and adversely with RO’s performance of its obligations and exercise of its rights under this Agreement; and

(c)    as of the Effective Date, neither RO nor any of its Affiliates has been debarred or is subject to a debarment proceeding and neither RO nor any of its Affiliates shall use in any capacity, in connection with the activities to be performed under this Agreement, any Person who has been debarred pursuant to Section 306 of the Federal Food, Drug, and Cosmetic Act, as amended, or who is the subject of a conviction described in such section. RO agrees to inform GELESIS in writing immediately if it or any Person who is performing activities under this Agreement is debarred or is the subject of a conviction described in Section 306, or if any action, suit, claim, investigation or legal or administrative proceeding is pending or, to the knowledge of RO, is threatened, relating to the debarment or conviction described in Section 306 of RO or any Person performing activities under this Agreement.

10.4.          DISCLAIMER OF WARRANTY. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT, GELESIS AND RO MAKE NO REPRESENTATIONS AND GRANT NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND GELESIS AND RO EACH SPECIFICALLY DISCLAIM ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY, TITLE, NONINFRINGEMENT OR ENFORCEABILITY OF ANY INTELLECTUAL PROPERTY.

ARTICLE 11

CONFIDENTIALITY AND NONDISCLOSURE

(5) years thereafter, each Party (the “Receiving Party”) (i) shall hold in strict confidence and shall not publish or otherwise disclose, directly or indirectly, to any Third Party any Confidential Information of the other Party or its Affiliates (collectively, the “Disclosing Party”), (ii) except as permitted pursuant to Section 11.2 and Section 11.3, shall not directly or indirectly use Confidential Information of a Disclosing Party for any purpose other than performance of its obligations or exercise of its rights under this Agreement, or as otherwise expressly permitted under this Agreement, and (iii) shall use the same level of effort to maintain the confidentiality of Confidential Information of a Disclosing Party as it uses for its own confidential or proprietary information, but in any event at least Reasonable Efforts.

11.2.         Permitted Disclosure. Each Party may disclose Confidential Information of a Disclosing Party to the extent that such information:

(a)    is already known to the Receiving Party, other than under an obligation of confidentiality, at the time of disclosure by the Disclosing Party, as shown by documentary evidence;

(b)    is part of the public domain at the time of its disclosure by the Disclosing Party; or becomes part of the public domain after its disclosure by the Disclosing Party other than through any act or omission of the Receiving Party in breach of this Agreement;

(c)    is disclosed to the Receiving Party by a Third Party who had no obligation of non-disclosure with respect to such information; or

(d)    is independently developed by or for the Receiving Party without reference to such information, as shown by documentary evidence.

11.3.          Disclosure and Use. Each Party may disclose Confidential Information of the other Party to the extent that such disclosure is:

(i)    made in response to a valid order of a court of competent jurisdiction or other governmental body of a country or any political subdivision thereof of competent jurisdiction; provided, however, that the Receiving Party shall, to the extent permitted under Applicable Law, first provide notice to the Disclosing Party and give the Disclosing Party a reasonable opportunity to quash such order and to obtain a protective order requiring that the Confidential Information and/or documents containing such Confidential Information that are the subject of such order be held in confidence by such court or agency, and will reasonably cooperate with the Disclosing Party in seeking such protection, or, if disclosed, be used only for the purposes for which the order was issued; and provided further that if a disclosure order is not quashed or a protective order is not obtained, the Confidential Information disclosed in response to such court or governmental order shall be limited to that information which is legally required to be disclosed in such response to such court or governmental order;

(ii)    made by the Receiving Party to Third Parties (A) as may be necessary in connection with the Manufacture, Distribution, or otherwise use of the Product as contemplated by this Agreement, including, customers, or employees; or (B) who is performing diligence in connection with a transaction with the Receiving Party relating to this Agreement, including a potential investor or an acquirer, in each case ((A) and (B)), provided that such Third Party shall execute a written confidentiality agreement with the Receiving Party prior to such disclosure, which agreement shall contain confidentiality terms with respect to such Confidential Information that are no less onerous than those set forth in this Agreement; or

(iii)    necessary to (A) make a report to Regulatory Authority as required by Applicable Law or permitted herein, or (B) carry out or notify an affected Person of a product recall, or (C) provide notice under Section 5.4(d) as required to safeguard patient health and safety.

11.4.         Notification.   The Receiving Party shall notify the Disclosing Party immediately, and cooperate with the Disclosing Party as the Disclosing Party may reasonably request, upon the Receiving Party’s discovery of any loss or compromise of the Disclosing Party’s Confidential Information.

11.5.         Remedies. Each Party agrees that the unauthorized use or disclosure of any Confidential Information by the Receiving Party in violation of this Agreement will cause severe and irreparable damage to the Disclosing Party. In the event of any violation of this Article 11, the Receiving Party agrees that the Disclosing Party shall be authorized and entitled to seek injunctive relief, whether preliminary or permanent, as well as any other relief permitted by Applicable Law, without the necessity of proving irreparable injury or actual damages and without the necessity of having to post a bond.

11.6.          Return of Information. Within thirty (30) days after the expiration or termination of this Agreement, each Party shall return to the other Party any and all copies of Confidential Information disclosed to it and shall destroy any and all documents, memoranda, notes, studies and analyses that incorporate or are derived from such information, subject to the Receiving Party retaining a single copy of such Confidential Information solely for archival purposes.

11.7.         Public Announcement. The Parties shall coordinate all public announcements and press releases (each a “Public Announcement”) regarding the relationship of the Parties. Without prejudice to RO’s rights under Article 2, neither Party shall make a Public Announcement regarding the relationship of the Parties without the prior written approval of the other Party.

ARTICLE 12

INDEMNIFICATION

12.1.         Indemnification of RO. GELESIS shall defend, indemnify, and hold harmless RO, its Affiliates, and their respective directors, officers, employees, and agents (collectively, “RO Indemnified Parties”) from and against any and all losses, damages, liabilities, costs, and expenses (including reasonable attorneys’ fees and expenses) (collectively, “Losses”) in connection with any and all suits, investigations, claims, or demands of Third Parties (collectively, “Third Party Claims”) to the extent arising from or occurring as a result of (a) the breach of one or more of GELESIS’ representations or warranties in this Agreement or the failure by GELESIS to comply with or perform one or more of its covenants in this Agreement, (b) personal injury or death as a result of use of the Product (or any Third Party Claims in anticipation of, or intended to prevent or forestall any of the foregoing) (collectively, “Product Liability Claims”), other than the Product Liability Claims described in Section 12.2(b), (c) the Manufacture, supply, handling, storage, shipment, or transport of the Product by or on behalf of GELESIS prior to delivery to RO pursuant to Section 4.4, or (d) the infringement of Third Parties’ intellectual property rights resulting from the Manufacture of the Product by GELESIS or from Distribution of the Product supplied to RO in accordance with this Agreement, in each case ((a) through (d)), except for those Losses arising from or occurring as a result of, directly or indirectly, matters for which RO is obligated to indemnify GELESIS under Section 12.2, as to which Losses each Party shall indemnify the other to the extent of their respective liability. For the avoidance of doubt, GELESIS’ indemnification obligations with respect to any Product Liability Claim shall be specifically covered by subsection (b), and not any other subsections of this Section 12.1.

12.2.          Indemnification of GELESIS. RO shall defend, indemnify, and hold harmless GELESIS, its Affiliates, and their respective directors, officers, employees, and agents (collectively, “GELESIS Indemnified Parties”) from and against any and all Losses in connection with any and all Third Party Claims to the extent arising from or occurring as a result of (a) the breach by RO of one or more of RO’s representations or warranties in this Agreement or the failure by RO to comply with or perform one or more of its covenants in this Agreement, (b) Product Liability Claims arising from any supply, handling, storage, shipment, or transport by or on behalf of RO of the Product after delivery by GELESIS to RO pursuant to Section 4.4 that results in the failure of the Product to conform to the Specifications or the applicable certificate of analysis, (c) the supply, handling, storage, shipment, or transport of the Product by or on behalf of RO after delivery by GELESIS to RO pursuant to Section 4.4, in each case ((a) through (c)), except for those Losses arising from or occurring as a result of, directly or indirectly, matters for which GELESIS is obligated to indemnify RO under Section 12.1, as to which Losses each Party shall indemnify the other to the extent of their respective liability. For the avoidance of doubt, RO’s indemnification obligations with respect to any Product Liability Claim shall be specifically covered by subsection (b), and not any other subsections of this Section 12.2.

12.3.             Indemnification Procedure.

(a)    Notice of Claim; Copies and Cooperation. Each Indemnified Party agrees to give the Indemnifying Party prompt written notice of any Third Party Claim or the discovery of a fact upon which such Indemnified Party intends to base a request for indemnification under Section 12.1 or Section 12.2, as the case may be. Each Party shall furnish promptly to the other Parties copies of all papers and official documents received in respect of any Third Party Claim. The Indemnified Party shall reasonably cooperate as requested by and at the expense of the Indemnifying Party in the defense of such Third Party Claims.

(b)    Control of Damage Actions. With respect to any Third Party Claim relating solely to the payment of money damages and which shall not result in the Indemnified Party’s becoming subject to injunctive or other relief or otherwise adversely affecting the Indemnified Party in any manner, and as to which the Indemnifying Party shall have acknowledged in writing the obligation to indemnify the Indemnified Party under this Agreement, the Indemnifying Party shall have the sole right to defend, settle or otherwise dispose of such Third Party Claim, on such terms as the Indemnifying Party shall deem appropriate.

(c)    Control of Other Actions. With respect to any Third Party Claim other than those addressed in Section 12.3(b), the Indemnifying Party shall have the sole right to control the defense of such Third Party Claim, provided that the Indemnifying Party shall obtain the written consent of the Indemnified Party, prior to ceasing to defend, settling or otherwise disposing of such Third Party Claim, which consent shall not be unreasonably withheld, conditioned or delayed unless as a result thereof, (i) the Indemnified Party would become responsible for the payment of any money damages or other costs (with respect to which the Indemnifying Party has contested or challenged or may contest or challenge its obligation to indemnify), (ii) the Indemnified Party would become subject to injunctive or other equitable relief or any remedy other than the payment of money by the Indemnifying Party or (iii) the Indemnified Party would otherwise be adversely affected, in which case (i) through (iii) the Indemnified Party may withhold its consent in its sole discretion.

12.4.          Insurance. GELESIS shall maintain workers’ compensation coverage sufficient to meet the statutory requirements of every state in which GELESIS’ personnel are engaged in activities contemplated under this Agreement. In addition, GELESIS agrees to obtain and maintain at all times while this Agreement remains in effect: (a) Commercial General Liability Insurance with a minimum limit per occurrence of $1,000,000 and a minimum aggregate limit of $2,000,000; (b) Product Liability Insurance with a combined single limit of at least $7,000,000 per occurrence and in the aggregate; and (c) Excess or Umbrella Liability with a minimum limit of $5,000,000 per occurrence over the insurance coverage described above. Such insurance shall protect GELESIS from claims for property damage and personal injury (including bodily injury and death), as applicable. All insurance shall be primary and not contributory with regard to any other insurance available to RO or its Affiliates. All insurance shall be underwritten by companies having a minimum AM Best rating of A-, XV. Certificates of insurance (or copies of policies, if required by RO) shall be furnished to RO, and such policies shall (i) other than with respect to workers’ compensation coverage, include RO, its Affiliates, and each of their respective owners, officers, directors, agents, contractors and employees as additional insureds and, (ii) include a waiver of subrogation in favor of RO and its Affiliates, to the fullest extent permitted by Applicable Law.

12.5.        Limitation on Damages. EXCEPT AS ARISING FROM A BREACH OF CONFIDENTIALITY OBLIGATIONS UNDER ARTICLE 11 OR PURSUANT TO THIS ARTICLE 12 (INDEMNIFICATION), NEITHER RO NOR GELESIS SHALL BE LIABLE TO THE OTHER FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF BUSINESS, GOODWILL, REVENUE OR PROFITS, WHETHER IN CONTRACT, WARRANTY, NEGLIGENCE, TORT, STRICT LIABILITY OR OTHERWISE, WHETHER ARISING OUT OF THE MANUFACTURE, USE OR SALE OF THE LICENSED PRODUCT BY THE OTHER PARTY OR OTHERWISE.

ARTICLE 13

TERM AND TERMINATION

13.1.        Term. The term of this Agreement shall commence upon the Effective Date and shall continue in effect until terminated pursuant to Section 13.2 (the “Term”).

(a)        Termination for Material Breach. If either Party is in material breach in the performance of any of its obligations under this Agreement (the “Breaching Party”), the other Party (the “Complaining Party”) may terminate this Agreement upon thirty (30) days’ prior written notice (the “Notice Period”) to the Breaching Party, specifying the breach and its claim of right to terminate, provided that the termination shall not become effective at the end of the Notice Period if the Breaching Party cures the breach during the Notice Period.

(b)        Termination Upon Insolvency. Either Party may terminate this Agreement if, at any time, the other Party shall file in any court or agency pursuant to any statute or regulation of any state, country or jurisdiction, a petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the appointment of a receiver or trustee of such other Party or of its assets, or if such other Party proposes a written agreement of composition or extension of its debts, or if such other Party shall be served with an involuntary petition against it, filed in any insolvency proceeding, and such petition shall not be dismissed within sixty (60) days after the filing thereof, or if such other Party shall propose or be a party to any dissolution or liquidation, or if such other Party shall make an assignment for the benefit of its creditors.

(c)        Mutual Agreement. This Agreement may be terminated upon mutual agreement between the Parties.

(d)        [***].

(e)        Termination for Prolonged Force Majeure. This Agreement may be terminated for prolonged Force Majeure (ninety (90) days or more) pursuant to and in accordance with Section 14.1.

(a)        Supply of Prior Orders. Upon termination of this Agreement for any reason, GELESIS shall not have any further obligation to supply any Product to RO, provided that GELESIS shall Manufacture (or cause the Contract Manufacturer to Manufacture) and deliver (or cause the Contract Manufacturer to deliver) in accordance with the terms of this Agreement all quantities of the Product set forth in any Purchase Order submitted by RO prior to the date of termination, unless otherwise agreed in writing by the Parties. The delivery terms, payment terms, and any other applicable terms and conditions of this Agreement shall apply to such Product.

(b)        Inventory. Upon termination of this Agreement for any reason, RO shall have the right to sell its inventory of the Product in the Field in the Territory subject to Section 6.2.

(c)        Licenses. Upon termination of this Agreement for any reason, all rights and licenses granted by GELESIS to RO under Section 2.2 shall terminate, provided that (i) RO shall have the right to use the Product Trademarks and Company Names after termination for the purposes of selling off its inventory of Product; and (ii) RO and its Affiliates shall have no obligation to remove content or materials incorporating the Product Trademarks or Company Names in connection with Distribution of the Product which were permeated on any website or platform (e.g., Instagram) or otherwise disseminated on any website or platform in accordance with the terms and conditions of this Agreement prior to the termination.

(d)        Intentionally Omitted.

(e)        Pharmacy Transfer Coordination. Upon expiration or termination of this Agreement, to the extent permitted by Applicable Law, RO will coordinate the transfer of Product prescriptions to a pharmacy of the patient’s choice that carries the Product to ensure continuity of care to patients. GELESIS will work in good faith with RO, as needed, to coordinate such transfers.

13.4.        Accrued Rights; Surviving Obligations.

(a)        The termination of this Agreement for any reason shall be without prejudice to any rights that have accrued to the benefit of a Party prior to such termination. Such termination shall not relieve a Party from obligations that are expressly indicated to survive the termination of this Agreement. Except as otherwise expressly provided herein, termination of this Agreement in accordance with the provisions hereof shall not limit remedies which may otherwise be available to a Party in law or equity.

(b)        Articles 9, 11, 12 and 14 and Sections 5.1, 5.3, 10.4, 13.3, and 13.4 of this Agreement shall survive termination of this Agreement.

ARTICLE 14

MISCELLANEOUS

14.1.        Force Majeure. Neither Party shall be held liable or responsible to the other Party or be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement, when such failure or delay is caused by or results from causes beyond the reasonable control of the non-performing Party, including fires, floods, embargoes, shortages, war, acts of war (whether war be declared or not), insurrections, riots, civil commotion, strikes, lockouts or other labor disturbances, acts of God (collectively, “Force Majeure”). The non-performing Party shall notify the other Party of such force majeure within ten (10) days after such occurrence by giving written notice to the other Party stating the nature of the event, its anticipated duration, and any action being taken to avoid or minimize its effect. The suspension of performance shall be of no greater scope and no longer duration than is necessary and the non-performing Party shall use Reasonable Efforts to remedy its inability to perform; provided, however, that in the event the suspension of performance continues for thirty (30) days after the date such event of Force Majeure commences, the Parties shall meet to discuss in good faith how to proceed in order to carry out the intent of this Agreement; provided further, that in the event the suspension of performance continues for ninety (90) days after the date such event of Force Majeure commences, the Party who, absent this Section 14.1, would have a claim for breach may terminate this Agreement immediately upon written notice to the other Party. For purposes of this Agreement, an event of Force Majeure shall not include a failure to commit or secure sufficient resources or capacity, financial or otherwise, to the performance of obligations under this Agreement, or general market or economic conditions.

14.2.        Further Assurance. Each Party shall, and shall cause its Affiliates to, cooperate with and provide assistance to the other Party in support of such other Party’s exercising its right or performing its obligations under this Agreement. Without limiting the foregoing, GELESIS agrees that, to the extent available and permitted under Applicable Law, it will, and will cause its Affiliates to provide to RO such additional information or documentation relating to the Product as may be reasonably requested by RO, and that is necessary or reasonably useful to facilitate RO’s Distribution of the Product, at no additional charge to RO, and each Party shall, and shall cause its Affiliates to, otherwise duly execute and deliver, or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents, and instruments, as may be necessary or as the other Party may reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes hereof, or to better assure and confirm unto such other Party its rights and remedies under this Agreement.

14.3.        Notice. Unless otherwise expressly provided herein, all notices or other communications which are required or permitted hereunder shall be in writing and delivered personally, sent by email of a PDF attachment, by nationally-recognized overnight courier or by registered or certified mail, postage prepaid, return receipt requested, in each case, to the addresses set forth below:

or to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith. Any such communication shall be deemed to have been given (a) when delivered, if personally delivered or sent by facsimile or email on a Business Day, (b) on the Business Day after dispatch, if sent by nationally-recognized overnight courier, and (c) on the third Business Day following the date of mailing, if sent by mail.

14.4.        Assignment. Neither Party shall be entitled to assign its rights or delegate its obligations under this Agreement without the express written consent of the other Party, except that (a) each Party may, without such consent of the other Party, assign its rights or delegate its duties under this Agreement to an Affiliate that is a directly or indirectly wholly-owned subsidiary, provided, however, that the assigning Party shall remain primarily (and not secondarily or derivatively) liable for the full and timely performance by such Affiliate of all its obligations under this Agreement, or (b) either Party may, without such consent, assign its rights and delegate its duties under this Agreement, whether by contract or operation of law, to a Third Party Acquirer in the event of a Change of Control of such Party. Any permitted successor or assignee of rights or obligations under this Agreement shall, in a writing delivered to the other Party, expressly assume performance of such rights or obligations. All validly assigned and delegated rights and obligations of the Parties hereunder shall be binding upon and inure to the benefit of and be enforceable by and against the successors and permitted assigns of the respective Parties. Any assignment not in accordance with this Section 14.4 shall be void.

14.5.        Governing Law. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Delaware excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. The United Nations Convention on Contracts for the International Sale of Goods is expressly disclaimed by the Parties with respect to this Agreement and the transactions contemplated hereby.

14.6.        Dispute Resolution. Except as provided in Sections 4.6, 5.4, 11.5 and 14.6(b), if a dispute arises between the Parties in connection with this Agreement or any document or instrument delivered in connection herewith, including an alleged breach of any representation, warranty or covenant herein or therein, or a disagreement regarding the interpretation of any provision hereof or thereof (a “Dispute”), the Parties shall resolve such Dispute in accordance with this Section 14.6:

(a)        Any Dispute shall be referred to and finally resolved by arbitration administered by the International Chamber of Commerce (the “ICC”) in accordance with the then- prevailing ICC Rules of Arbitration. The number of arbitrators shall be three (3). The legal place of arbitration shall be New York, New York. The language of the arbitration shall be English.

(i)        The Party commencing the arbitration shall designate an arbitrator in its notice of arbitration. The other Party shall designate an arbitrator within thirty (30) days from the receipt of the notice of arbitration. The third arbitrator shall be chosen promptly by mutual agreement of the two party-designated arbitrators, but in no event later than thirty (30) days after the date on which the second arbitrator is confirmed or appointed.

(ii)        Any award issued by the arbitrators (including an interim, interlocutory, partial, or final award) shall be issued, with all reasonable expediency, in writing and shall include a statement of decision describing the essential findings and conclusions on which the award is based, including, where applicable, the calculation of any damages awarded. The decision or award rendered by the arbitrators shall be final and non-appealable, and judgment may be entered upon it in accordance with applicable law in any court of competent jurisdiction. The arbitrators shall be authorized to award compensatory damages, but shall not be authorized to reform, modify, or materially change this Agreement or any other agreements contemplated hereunder. Each Party shall bear its own counsel fees, costs, and disbursements arising out of the arbitration described in this Section 14.6(a) and shall pay an equal share of the fees and expenses of the arbitrators and of the ICC.

(b)        Nothing in this Agreement, including this Section 14.6, shall preclude either Party from seeking interim or provisional relief, including a temporary restraining order, preliminary injunction or other interim equitable relief concerning a dispute with the other Party, either prior to or during the dispute resolution procedures set forth in this Section 14.6, if necessary to protect the interests of such Party. This Section 14.6(b) shall be specifically enforceable.

14.7.        Consent to Jurisdiction. Each Party, for the purpose of enforcing an award under Section 14.6(a) or for seeking injunctive or other equitable relief as permitted by Sections 11.5 and 14.6(b) or elsewhere hereunder, (a) irrevocably submits to the exclusive jurisdiction of the United States District Courts located in the State of Delaware (the “Court”), and (b) agrees not to raise any objection at any time to the laying or maintaining of the venue of any action, suit or proceeding in the Court, irrevocably waives any claim that such action, suit or other proceeding has been brought in an inconvenient forum and further irrevocably waives the right to object, with respect to such action, suit or other proceeding, that such Court does not have any jurisdiction over such Party. Each Party further agrees that service or any process, summons, notice or document by U.S. registered mail to such Party’s notice address provided for in this Agreement shall be effective service of process for any action, suit or proceeding in the Court with respect to any matters to which it has submitted to jurisdiction in accordance with this Section 14.7.

14.8.        Status of the Parties. Except as set forth expressly in this Agreement, nothing in this Agreement shall give either Party the right to enter into any agreements or take action on behalf of the other Party, nor shall it represent to any Person that it has any such right or authority under this Agreement. It is expressly agreed that RO and GELESIS shall be independent contractors and that the relationship between RO and GELESIS shall not constitute a partnership, joint venture, or agency.

14.9.        No Third Party Beneficiaries. Except as set forth in Sections 12.1 and as to those Third Parties expressly referred to therein, the agreements, covenants, and representations contained herein are for the benefit of the Parties only and are not for the benefit of any Third Party.

14.10.        Amendment. This Agreement may not be amended in any respect whatsoever except according to its explicit terms or by a further written agreement executed by each of the Parties.

14.11.        Waiver. A Party’s failure to enforce, at any time or for any period of time, any provision of this Agreement, or to exercise any right or remedy, does not constitute a waiver of such provision, right or remedy, nor does such failure in one or more instances constitute a continuing waiver or a waiver in other instances by such Party. The exercise of any right or remedy does not constitute an election or prevent the exercise of any or all rights or remedies, all rights and remedies being cumulative.

14.12.        Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of any Party under this Agreement will not be materially and adversely affected thereby, (a) such provision shall be fully severable, (b) this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never compromised a part hereof, (c) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom, and (d) in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and reasonably acceptable to the Parties herein. To the fullest extent permitted by Applicable Law, each Party hereby waives any provision of law that would render any provision hereof prohibited or unenforceable in any respect.

14.13.        Entire Agreement. This Agreement, including the Schedules, which are attached hereto and incorporated herein by reference, constitutes, on and as of the Effective Date, the entire agreement of the Parties with respect to the subject matter hereof, and all prior or contemporaneous understandings or agreements, whether written or oral, between the Parties with respect to such subject matter, including without limitation the confidentiality agreement between the Parties dated as of March 12, 2019 are hereby superseded in their entireties. This Agreement shall not be amended in any respect whatsoever except by a further agreement, in writing, fully executed by each of the Parties.

14.14.        Construction. Except where the context otherwise requires, wherever used, the singular includes the plural, the plural includes the singular, and the word “or” is used in the inclusive sense (and/or). The term “including” or its variations as used herein does not limit the generality of any description preceding such term. The language of this Agreement shall be deemed to be the language mutually chosen by the Parties and no rule of strict construction shall be applied against either Party. Unless otherwise specified or where the context otherwise requires, (a) references in this Agreement to any clause, paragraph, or schedule are references to such clause, paragraph, or schedule of this Agreement, and references to this Agreement are references to this Agreement and all schedules hereto; (b) “hereof,” “hereto,” “hereby,” “herein” and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement; (c) references to a Person are also to its permitted successors and assigns; (d) references to a Law include any amendment or modification to such Law and any rules, regulations or legally binding guidelines issued thereunder, in each case, as in effect at the relevant time of reference thereto; (e) references to any agreement, instrument or other document in this Agreement refer to such agreement, instrument or other document as originally executed or, if subsequently amended, replaced or supplemented from time to time, as so amended, replaced or supplemented and in effect at the relevant time of reference thereto; (f) “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends, and such phrase does not mean simply “if”; (g) references to monetary amounts are denominated in United States Dollars (“Dollar” or “$”); and (h) references to days (excluding Business Days), weeks, months, quarter, or year shall be deemed references to calendar days, weeks, months, quarter, or year.

14.15.        Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which, taken together, shall constitute one and the same instrument. This Agreement, to the extent signed and delivered by electronic means, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.

[Signature Page Follows]

CONFIDENTIAL

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the Effective Date.

CONFIDENTIAL

Schedule A

Product Specifications

CONFIDENTIAL

Schedule B

Contract Manufacturer

Packaging – Centerpiece Holdings LLC

440 Stevens Ave, Ste 200

Solana Beach, CA 92075

Exhibit 10.9

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH “[***]”. SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF DISCLOSED.

Distribution Agreement

Pharmaceutical Distribution Agreement (“Agreement”) dated as of Feb 12, 2020 (the “Effective Date”) between Gelesis, Inc., a Delaware Corporation (“Manufacturer”) and Specialty Medical Drugstore, LLC, an Ohio limited liability corporation dba GoGoMeds (“Pharmacy”) and, together with Gelesis, the “[__]” and together with GoGoMeds the “Parties”).

PREAMBLE

Pharmacy is a VIPPS accredited pharmacy engaged in the sale of prescription medications and is licensed or authorized to sell prescriptions in all 50 states and the District of Columbia and maintains a website with the URL of https://www.GoGoMeds.com (the “Pharmacy Website”).

Manufacturer is engaged in the manufacturing and sale of prescription medications. Manufacturer wants to utilize the pharmacy fulfillment services of Pharmacy to sell and distribute Manufacturer products to patients for whom those products have been prescribed in compliance with applicable law and pharmacy board regulations, on the terms and conditions set out in Agreement.

ACCORDINGLY, the Parties hereby agree as follows:

Section 1 - Services and Purchases

1.1              Appointment; List of Products; No Insurance. Manufacturer appoints Pharmacy as an online dispenser in the United States for the Manufacturer products set forth on the attached Exhibit A, subject to amendment from time to time by mutual agreement of the Parties (the “Products”). Pharmacy will sell all Products under this Agreement on a cash pay basis, with no insurance reimbursement and no reimbursement by any federal, state or other government-sponsored health care program, unless and until the Parties mutually agree otherwise in writing.

1.2              Acceptance; Efforts.

Pharmacy accepts its appointment as a dispenser for the Products in the United States. Pharmacy will provide pharmacy fulfillment services and a functioning website so that the public can obtain pricing information for the Products from Pharmacy. Pharmacy will maintain an inventory of Products and a distribution network that are sufficient to permit promptly delivery of Products to customers and to meet reasonably anticipated market demand for the Products.

Pharmacy will distribute electronic onboarding communications to newly initiated Product patients. The content of these communications will be similar to those offered to newly initiated Product patients in the telehealth channel and provided by Manufacturer.

1.3              Exclusivity.

For two (2) years following the first dispensing of product by Pharmacy to an end user (“Exclusive Period”), Manufacturer hereby appoints Pharmacy as the exclusive mail order dispenser of Products in the United States which are prescribed other than Via Telehealth Platform in the United States. For purposes of this Agreement. “Via a Telehealth Platform” shall mean, in connection with providing medical services on a telehealth platform or a prescription for such Product which is sent, submitted, or processed through a telehealth platform. The Parties may agree in writing to extend the Exclusive Period.

Pharmacy will not, and shall cause its affiliates not to, directly or indirectly (i) dispense any product that is intended for internal consumption, ingestion or other internal use by patients for weight management and/or loss (a “Competing Product”) in the United States, or sell any nutritional physical products in conjunction with the Product without Manufacturer’s prior written consent.

1.4              Payment Terms, and Purchase Orders.

During the Exclusive Period, the supply price for the per patient twenty eight (28)-day supply unit of the Product purchased by Pharmacy shall be [***] unless otherwise mutually agreed by the Parties.

All payments payable by Pharmacy to GELESIS for a given month shall be paid in full by Pharmacy within thirty (30) days following the end of such month.

Unpaid balances accrue interest at 1% per month on all overdue amounts, such interest being deemed to accrue on a day to day basis from the due date of payment.

1.5              Purchase Orders.

Pharmacy must purchase product directly from Manufacturer unless otherwise agreed in writing by the Parties. Pharmacy shall transmit orders for Manufacturer Product to Manufacturer using an electronic data transmission, telephonically, email, online, fax or other processes agreed to in writing by the Parties.

In the event that Pharmacy submits a purchase order directly to Manufacturer, if Manufacturer accepts such purchase order and delivers notice of acceptance to Pharmacy, then Manufacturer shall deliver the Products requested in such purchase order within three (3) business days after receipt and acceptance of purchase order.

Pharmacy and Manufacturer will work mutually to establish a rolling non-binding forecast process to maintain proper inventory and service levels.

Manufacturer shall deliver Products ordered by Pharmacy at Manufacturer’s expense to Pharmacy facility address set forth in the purchase order.

1.6              Product Returns.

Pharmacy will have the right to return to Manufacturer, and (where product has been paid for) receive credit at the higher of the original purchase price or current WAC at the time of the return for (a) outdated Product (up to one year past expiration), (b) overstocks, (c) inactive Product or non-moving Product due to market conditions, (d) Product less than two months prior to its expiration date, (e) Product discontinued by Manufacturer where current Product inventory is not sold with sixty days of discontinuation, and (f) immediately upon termination of this agreement, without incurring a restocking fee/charge.

1.7              Disputed Amounts. Pharmacy shall be permitted to withhold payment of any amounts invoiced to Pharmacy or due to Manufacturer which Pharmacy reasonably in good faith disputes and contests. The Parties agree to act in good faith to negotiate and resolve any disputed amounts.

1.8              Marketing, Etc. Manufacturer will be responsible for all marketing efforts and costs associated with the dispensing of Products in the US. Pharmacy will provide reasonable input and guidance, and analytic data under section 1.7, to support dispensing of Products in the US.

1.9              Data and Analytics. Both Parties, acting reasonably, will share data and analytics generated under and regarding this program to help insure the success of the program, subject to compliance with, and only to the extent permitted by HIPAA and other applicable law and regulation. For clarity, no identifiable data (e.g., names, email, address, IP address or zip code) of any patients may be shared by Pharmacy to Gelesis without such patients’ express prior written consent. Pharmacy will invite patients to acknowledge agreement for personally identifiable data (e.g. email address) to be shared with Gelesis and will do so if the patient does.

Pharmacy will house all data and analytics generated by it that include protected health information (PHI) under HIPAA in its database system, in accordance with HIPAA.

Examples of the types of data and analytics to be shared by the Parties are set forth in Exhibit B hereto.

Section 2 - Prescriptions; Manufacturer Product Warranties

2.1              Standards. Pharmacy will fill only prescriptions that Pharmacy in good faith determines to be legitimate under applicable laws and pharmacy board regulations.

2.2              Manufacturer Compliance Warranties. Manufacturer hereby represents, warrants and guarantees that all Products that Manufacturer supplies under this Agreement, at the time of delivery by Manufacturer:

(a)               will not be adulterated, misbranded, or otherwise prohibited within the meaning of the Federal Food, Drug, and Cosmetic Act. 21 U.S.C. Section 301 et seq. as amended from time to time (the “FDCA”) or within the meaning of any applicable state or municipal law in which the definition of adulteration or misbranding are substantially similar to those contained in the FDCA:

(b)               will not include any drug sample as defined in Section 503(c)(1) of the FDCA (21 U.S.C. Section 353(c)(1)) or any drug subject to Section 503(b) of the FDCA (21 U.S.C. Section 353(b)) that was purchased by public or private hospital or other health care entity or that was donated or supplied at a reduced price to a charitable organization as described in Section 501(c)(3) of the Internal Revenue Code of 1954, as amended;

(c)               will not include any drugs subject to Section 503(b) of the FDCA that were re-imported in violation of Section 801(d) of the FDCA (21 U.S.C. Section 381(d)); and

(d)               will be merchandise that may be legally transported or sold under the provisions of any other applicable federal, state or municipal law.

2.3              Pharmacy Representations and Warranties. Pharmacy hereby represents, warrants and guarantees that:

(a)               it shall comply in all material respects with any and all federal, state and local rules, regulations and statutes concerning health care fraud and abuse, including but not limited to 42 U.S.C. § 1320a-7b(b);

(b)               Pharmacy will not file any claims for payment for the Products with Medicare or any other Federal health care program or commercial third-party insurance, unless otherwise agreed in writing by Manufacturer;

(c)               Pharmacy will not require patients to purchase any other item or product from Pharmacy in order to purchase a Product;

(d)               Pharmacy will not use any Product in marketing, advertising or promotion to healthcare professionals or patients without the prior written consent of Manufacturer:

(e)               Pharmacy will not offer any inducement to a healthcare provider to prescribe, or switch patients to, a Product;

(f)                Pharmacy and its licensed practitioners are, and at all times have been, licensed as required by applicable law and are in compliance in all material respects with applicable laws relating to such licensure;

(g)               Neither Pharmacy, nor any officer, director, employee, or independent contractor of Pharmacy has been (i) debarred or excluded (or is the subject of any proceeding or any investigation that could reasonably be expected to result in debarment or exclusion) from participation under any state or federal health care program, including any state or federal workers compensation programs, or any other third party payor program, (ii) subject to sanction pursuant to 42 U.S.C. § 1320a-7a or § 1320a-8, nor are any such exclusions, sanctions or charges pending or threatened;

(h)               Pharmacy will not adulterate or misbrand and will not otherwise commit a prohibited act within the meaning of the FDCA or within the meaning of any applicable state or municipal law in which the definition of adulteration or misbranding are substantially similar to those contained in the FDCA.

2.4              Mutual Representations. Each Party hereby represents and warrants to the other Party that: (a) it is a corporation or other legal entity validly existing and in good standing in its jurisdiction of organization, (b) it has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement, (c) its execution and delivery of, and performance of its obligations under, this Agreement has been duly authorized by all requisite corporate action on its part and (d) it has duly executed and delivered this Agreement and this Agreement is enforceable against it in accordance with its terms.

Section 3 - Fulfillment, Pricing and Shipping

3.1              Fulfillment. Pharmacy will receive orders and prescriptions for products using Pharmacy’s established processes.

3.2              Product Pricing and Changes. Patients will receive their prescriptions for Products directly from Pharmacy at the cash price established by the Manufacturer. [***]. Manufacturer shall notify Pharmacy in writing of the price for each Product and any changes in that price from time to time. Pharmacy requires 10 business day notification of price changes. In situations where a patient has been given a promotional offer such as “first month free”, [***].

3.3              Shipping. Products will be delivered to patients via method(s) set forth by Manufacturer (Exhibit A), which Manufacturer may update at any time at its sole discretion. [***]. All first orders will be shipped by 2-Day air via preferred carrier. Refills may be shipped in most economical way. For processing time, once a prescription and order is both received and validated by 1:00PM Eastern Time, Pharmacy will fill and ship the same day. Anything after this time will be shipped no later than the end of the next business day.

The expense and risk of loss for all such deliveries, shipments, or mailings shall be borne by Pharmacy, and Manufacturer disclaims any liability for the actions or omissions of delivery.

Section 4 - Payments

4.1              Direct Patient Payment. Pharmacy will collect payment for Products directly from patients.

4.2              Dispense Fee. [***].

4.3              Payment; Reports: Audits. Pharmacy will report weekly to Manufacturer all product activity. Pharmacy shall Invoice Manufacturer fees for all Prescriptions dispensed and shipped for Products under this Agreement each calendar month during the Term no later than 15 business days (21 calendar days) days after the last day of that calendar month, together with a report detailing all applicable sales, shipping amounts and other relevant information mutually agreed upon by the Parties. Payments shall be made by electronic funds transfer or other mutually acceptable method within 30 business days of receipt of invoice. Manufacturer shall have the right to audit Pharmacy’s records concerning sales of Products. Prescriptions dispensed, shipment details, and any holding facilities for Product, upon reasonable request, during regular business hours, no more than twice in any 12-month period or more frequently if Manufacturer has good cause to suspect errors in the remittance of Prescriptions dispensed or accompanying reports, or other breach of Pharmacy’s obligations under this Agreement.

4.4              Weekly Sales Reporting. The Parties will agree on a weekly sales reporting mechanism convenient to both Parties.

Section 5 - White Label Program

5.1              White Label Program. If Manufacturer wants to utilize its own white label website for Product sales under this Agreement, the Parties will negotiate a development and consulting fee for that website along with a monthly maintenance fee for software and server support.

Section 6 - Confidentiality

6.1              Existing Confidentiality Agreement. Each Party has disclosed prior to the Effective Date and may disclose or make available to the other Party following the Effective Date certain of its confidential information. “Confidential Information” means all ideas and information of any kind, whether in written, oral, graphical, machine-readable or other form, whether or not marked as confidential or proprietary, which are transferred, disclosed or made available by the disclosing Party, including of third parties, prior to or during the Term. The receiving Party will: (a) not use the disclosing Party’s Confidential Information except for the exercise of its rights or performance of its obligations hereunder; and (b) not disclose such Confidential Information to any party, other than (i) its employees and consultants who have a “need to know” for the receiving Party to exercise its rights or perform its obligations hereunder and (ii) investors, prospective investors, prospective acquirers, and professional advisers; provided that such employees and consultants, investors, prospective investors, prospective acquirers and professional advisers are bound by agreements or, in the case of professional advisers, ethical duties respecting such Confidential Information in accordance with the terms of this Section 6; and (iii) use reasonable measures to protect the confidentiality of such Confidential Information. If the receiving Party is required by law to make any disclosure of such Confidential Information, the receiving Party will first give written notice of such requirement to the disclosing Party, and will permit the disclosing Party to intervene in any relevant proceedings to protect its interests in the Confidential Information, and provide full cooperation to the disclosing Party in seeking to obtain such protection. Information will not be deemed Confidential Information hereunder if such information: (1) is known or becomes known (independently of disclosure by the disclosing Party) to the receiving Party prior to receipt from the disclosing Party from a source other than one having an obligation of confidentiality to the disclosing Party; (2) becomes publicly known, except through a breach hereof by the receiving Party; or (3) is independently developed by the receiving Party, which can be shown by written evidence.

6.2              Irreparable Injury. The receiving Party acknowledges and agrees that any violation of this Section 6 may result in irreparable injury and damage to the disclosing Party not adequately compensable in money damages, and for which the disclosing Party will have no adequate remedy at law. The receiving Party acknowledges and agrees, therefore, that if this Section 6 is breached, in addition to any and all other remedies, the disclosing Party may need to obtain injunctions, orders, or decrees in order to protect the Confidential Information and will be entitled to do so without having to post a bond.

Section 7 - Term and Termination

7.1              Term. This Agreement shall continue in force for the period of 2 years from the date of this Agreement (the “Term”).

7.2              Termination Without Cause. Manufacturer may terminate this Agreement without cause by giving at least 90 days’ prior written notice to Pharmacy.

7.3              Termination for Material Breach. If either Party materially breaches this Agreement and either (a) that breach is not, by its nature, reasonably susceptible to cure or (b) the breaching Party fails to cure that breach within 30 days after the non-breaching Party notifies the breaching Party in writing of that breach, the non-breaching Party may terminate this Agreement, with immediate effect, by written notice to the breaching Party.

7.4              Termination for Insolvency, Etc. Either Party to this Agreement may at its option terminate this Agreement by written notice to the other, with immediate effect, if any of the following occurs: (a) the other Party becomes insolvent or makes a general assignment for the benefit of creditors; (b) the other Party files a petition of bankruptcy or does not oppose a petition filed against it; (c) the other Party has a final judgment filed against it which remains unsatisfied or of record for 30 days or longer; or (d) the other Party is dissolved.

7.5              Transition. In the event of a termination of this Agreement for any reason, Pharmacy will (a) continue to process all orders for Products received by Pharmacy prior to the effective date of termination as required by applicable law, (b) pay to Manufacturer all sums due and owing for Products sold prior to termination and (c) return, or ensure the return, of all Products not sold prior to termination.

Section 8 - Miscellaneous

8.1              Independent Contractors. Pharmacy and Manufacturer each are sophisticated business entities, and the relation of Pharmacy to Manufacturer shall be and is that of an independent contractor. Each Party’s employees shall perform their work and functions at all times in strict conformance with currently approved methods and practices in a competent and professional manner and shall maintain any licenses and certifications required to perform their job. Manufacturer shall not exercise any control over the professional judgment or methods used by Pharmacy and its employees in the dispensing of medications or provision of any other Pharmacy services. Nothing in this Agreement shall be deemed to constitute, create, give effect to or otherwise recognize a joint venture, partnership, franchise or business entity of any kind. Manufacturer and Pharmacy shall pay for all social security, withholding tax, employment insurance, workers compensation insurance and all other similar expenses with respect to their own employees, and will indemnify and hold harmless the other against all losses, damages, expenses, claims and liabilities resulting from its failure to pay the same.

8.2              Legal Compliance. The Parties enter into this Agreement with the intent of conducting their relationship in full compliance with all applicable state, local and federal laws, including without limitation, the FDCA, Medicare/Medicaid anti-fraud and abuse laws and regulations (“Medicare Fraud Laws”) and the Health Insurance Portability and Accountability Act of 1996 and the Health Information Technology for Economic and Clinical Health Act (“HIPAA”). Notwithstanding any unanticipated effect of any of the provisions herein, neither Party shall conduct itself under the terms of this Agreement in a manner that violates the FDCA, Medicare Fraud Laws, HIPAA or other applicable law or regulation. Without limiting the foregoing. Pharmacy shall maintain the confidentiality of all personally identifiable information in accordance with HIPAA and all other applicable privacy laws and shall not provide any information to Manufacturer that has not been properly de-identified in accordance with accepted HIPAA practices.

8.3              Assignment. Neither Party shall assign, delegate, subcontract or transfer, in whole or in part, this Agreement or its obligations hereunder to any third party except upon prior written consent of the other Party; provided, however, that Manufacturer may assign, delegate, subcontract or transfer, in whole or in part, this Agreement or its obligations hereunder without such consent, to any affiliate of Manufacturer, or to any successor in interest of all or substantially all of Manufacturer’s assets relating to this Agreement, whether by merger, acquisition, sale or other transaction.

8.4              Waiver. If any portion of this Agreement is found unenforceable for any reason, the remainder will remain in full force and effect. The failure of either Party at any time to require performance by the other Party of any provision of this Agreement shall not affect in any way the full right to require that performance at any subsequent time, nor shall the waiver by either Party of a breach of any provision of this Agreement be taken or held to be a waiver of the provision itself.

8.5              Mutual Indemnification. Each Party shall indemnify, defend and hold harmless the other Party, its affiliates and their officers, directors, employees, agents and other representatives (“Representatives”) from and against any and all losses, damages, liabilities, costs, and expenses (including reasonable attorneys’ fees and expenses )(“Losses”) in connection with any suits, claims, investigations or demands of third parties (“Claims”) to the extent arising from or relating to negligence or willful misconduct of the indemnifying Party or its Representatives in the performance of its or their duties under this Agreement. Additionally, Pharmacy shall indemnify, defend and hold harmless Manufacturer and its Representatives from and against any and all Losses in connection with any and all Claims to the extent arising from or occurring as a result of (a) the breach by Pharmacy of one or more of Pharmacy’s representations or warranties in this Agreement or the failure by Pharmacy to comply with or perform one or more of its covenants in this Agreement, (b) the supply, handling, storage, shipment, or transport of the Product by or on behalf of Pharmacy after delivery by Manufacturer to Pharmacy pursuant to Section 1.3.

8.6              Liability. Under no circumstances will either Party be liable for any special, indirect, incidental or consequential damages, including, without limitation, for lost income or profits, in any way arising out of or related to this Agreement, even in either Party has been advised as to the possibility of those damages, except as arising from a Party’s breach of confidentiality under Section 5 or to the extent that a Party is required to pay those damages to a third party in connection with a matter for which that Party is entitled to indemnification under this Agreement.

8.7              Entire Agreement. This Agreement contains all of the agreements, understandings, representations, conditions, warranties, and covenants made between the Parties. Neither Party shall be liable for any representations made that are not set forth in this Agreement.

8.8              Intellectual Property. Each Party acknowledges the validity of all trademark registrations (“Marks”) owned by the other and each Party agrees it will not do anything or commit any act which might prejudice or adversely affect the validity of the Marks or the ownership thereof, and shall cease to use the Marks or any similar Marks in any manner on the expiration or other termination of this Agreement.

8.9              Force Majeure. If an event occurs that prevents or materially impairs a Party’s performance under this agreement and is due to a cause beyond the Party’s reasonable control, including an act of God, flood, fire, explosion, terrorist act, earthquake, casualty, accident, war, revolution, civil commotion, blockade or embargo, injunction or Change in Law, the affected Party shall promptly notify the other Party in writing of that force majeure event and shall exercise diligent efforts to resume performance under this Agreement as soon as possible. If resumption of performance is made impracticable by that event, the Parties will enter into good faith negotiations to make reasonable revisions to this Agreement to accommodate the effects of that event while seeking to maintain the Parties as close as possible to their original positions despite those revisions. Neither Party will be liable to the other Party for any loss or damage due to that cause, nor will the Term be extended thereby unless the Parties agree to that extension in writing. Either Party may terminate this Agreement because of that default or delay upon 30 days prior written notice to the other Party, if the default or delay is continuing at the end of the 30 day notice period. “Change in Law” means, for purposes of this Section 8.9, any new legislation enacted by the federal or any state government, any new third party payor or governmental agency law, rule, regulation, guideline or interpretation of a previously issued law, rule, regulation of guideline; or any judicial or administrative order, binding interpretation or decree.

8.10          Binding Effect: This Agreement shall be binding upon the Parties and their respective successors and assigns.

8.11          Amendment. This Agreement may be amended or modified at any time and in all respects, or any provision hereof may be waived, only by an instrument in writing executed by all of the Parties. Any purported amendment or modification that is not reflected in an instrument in writing executed by all of the Parties shall be void.

8.12          Notices. All notices, requests, consents, claims, objections, and other communications required or permitted to be sent by this Agreement shall be in writing and shall be delivered in person or sent by nationally recognized overnight express mail carrier, to all of the other Parties to this Agreement at the Party’s main corporate address. Each notice should be addressed to each respective Notice Agent. For the purpose of this Agreement Manufacturer designates [Gerard Rotonda] or his successor as its Notice Agent and Pharmacy designates Gerard Rotunda or his successor as its Notice Agent.

8.13          Governing Law. This Agreement and any claim arising out of this Agreement shall be governed by and construed according to the laws of the State of New York, without reference to any choice or conflict of law provision or rule, whether in the State of New York or any other jurisdiction, that would cause the laws of any jurisdiction other than the State of New York to apply.

8.14          JURISDICTION AND VENUE; SERVICE OF PROCESS. THE NEW YORK STATE AND UNITED STATES FEDERAL COURTS HAVING JURISDICTION OVER NEW YORK COUNTY, NEW YORK, AND ANY OTHER COURT IN WHICH AN ACTION IS BROUGHT AGAINST A PARTY TO THIS AGREEMENT BY A THIRD PERSON ASSERTING A CLAIM AGAINST WHICH THE DEFENDANT IS ENTITLED UNDER THIS AGREEMENT TO BE INDEMNIFIED, SHALL HAVE EXCLUSIVE JURISDICTION OVER ALL ACTIONS, SUITS AND PROCEEDINGS ARISING OUT OF, BASED UPON OR RELATED TO THIS AGREEMENT OR THE SUBJECT MATTER OF THIS AGREEMENT, AND EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY (I) SUBMITS FOR ITSELF AND ITS PROPERTY TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH ACTION OR PROCEEDING OR FOR RECOGNITION OF ANY JUDGMENT AND (II) WAIVES (A) ANY OBJECTION TO THE LAYING OF VENUE OF, AND (B) ANY DEFENSE BASED ON AN INCONVENIENT FORUM IN, ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

8.15          Severability. The provisions of this Agreement are severable. If any provision is held to be invalid, unenforceable or void, the remaining provisions shall not, as a result, be invalidated. All rights and obligations of the Parties expressed in this Agreement shall be in addition to and not in limitation of those provided under applicable law .

8.16          Interpretation. “Agreement” means this agreement together with all exhibits hereto, as the same may from time to time be amended, modified, supplemented or restated in accordance with the terms of this agreement. The use in this Agreement of the term “includes” or “including” means “includes or including, without limitation.” All references to sections, subsections, clauses, paragraphs, and exhibits mean those provisions of this Agreement and the exhibits attached to this Agreement, except where otherwise stated. The title of and the section and paragraph headings in this Agreement are for convenience of reference only and shall not govern or affect the interpretation of any of the terms or provisions of this Agreement. The use in this Agreement of the masculine, feminine or neuter forms shall also denote the other forms, as in each case the context may require.

8.17          Counterparts; Facsimile and Electronic Signatures. This Agreement may be executed in counterparts, each of which shall be an original, but all of which together constitute one and the same instrument. Facsimile and electronic counterpart signatures to this Agreement will be valid and binding.

* * *

IN WITNESS WHEREOF, each Party has executed and delivered this Agreement as of the date first written above.

Merchant Transaction Fee: Cost will be [***].

Shipping Method and Packing Material: Cost will be [***]

Adhoc Reporting Fee: $ [***]

[***]

Example of Detail reporting fields (this list is not all inclusive):

Exhibit 10.10

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH “[***]”. SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF DISCLOSED.

LICENSE, COLLABORATION AND SUPPLY AGREEMENT

By and Between

GELESIS INC.

And

CMS Bridging DMCC

LICENSE, COLLABORATION AND SUPPLY AGREEMENT

This License, Collaboration and SUPPLY Agreement (the “Agreement”) is entered into as of June 18, 2020 (the “Effective Date”) by and between Gelesis Inc., a company organized and existing under the laws of the State of Delaware, having its principal offices at 501 Boylston Street, Suite 6102, Boston, MA 02116, USA (“Licensor”) and CMS Bridging DMCC, a company incorporated under the laws of the UAE (Registration No.: DMCC177608) having its registered office at Unit No: 205B, JBC1, Plot No: JLT-PH1-G2A, Jumeirah Lakes Towers, Dubai, UAE (“Licensee”). Licensor and Licensee are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

Whereas, Licensor owns or controls certain proprietary titles, patents, know-how and other intellectual property rights relating to the Product (as defined below);

Whereas, Licensee is a healthcare company having legally required permits, approvals and qualifications, expertise, experience, skills, infrastructure and appropriately qualified personnel to develop, manufacture and commercialize the Product in the Territory; and

Whereas, Licensee wishes to acquire an exclusive license to develop, import, register, sell, resell and commercialize the Product in the Field in the Territory and Licensor wishes to grant such exclusive license under the terms and conditions set forth in this Agreement.

Now, Therefore, in consideration of the foregoing premises and the mutual promises, covenants and conditions contained in this Agreement, the Parties agree as follows:

Article 1
Definitions

Notwithstanding the foregoing, the deductions set forth in (a) through (e) may not exceed [***] of the gross amount invoiced on a per Product basis.

Net Sales shall not include transfers or dispositions of Products for no consideration for promotional, charitable, pre-clinical, clinical or regulatory purposes; provided that, subject to Sections 4.6 and 5.4, the total amount of transfers or dispositions shall not exceed the following percentage of the amount of total orders received for the applicable Calendar Year: [***]. The transfer or sale of Product among Licensee and Designated Parties shall not be considered a sale unless the purchaser is a Third Party distributor or End Customer. Upon the sale or other disposal of Product other than in a transaction generating revenues from or based on a sales price for the Product which sales price is either customary or would be reasonably expected in the Territory for arm’s length transactions, such sale, disposal or use shall be deemed to constitute a sale with the consideration for the sale being the consideration for the relevant transaction and constituting Net Sales hereunder, and if the consideration is not a monetary amount or is less than fair market value, a sale shall be deemed to have occurred at the average Net Sales price charged to Third Parties in arm’s length transactions for cash sales in such Market during the applicable reporting period (or if there were only de minimis cash sales in such Market, at the fair market value as determined by Licensor in good faith based on pricing in comparable markets). Unless otherwise specified herein, Net Sales will be calculated in accordance with GAAP generally and consistently applied.

Article 2
License

2.1              Rights and Licenses to Licensee.

(a)               Rights Granted to Licensee. Subject to the terms and conditions of this Agreement and, with respect to the Licensed Marks, the Exclusive Trademark License, Licensor hereby grants to Licensee an exclusive, transferable (solely in accordance with Article 15.4), sub-licensable (solely in accordance with Article 2.1(b)) and royalty-bearing license under the Licensor IP to Develop, import, register, Manufacture (solely using the Bulk Products supplied by Licensor to Manufacture the Finished Product) and Commercialize the Product, whether through online sales channels or offline sales channels, in the Field in and for the Territory (“License”) during the Term of this Agreement.

(b)              Right to Sublicense. Licensee shall have the right to sublicense, through multiple tiers, to any Affiliate or Third Party the License for any Market, provided that (i) Licensee obtains the express prior written consent from Licensor for each sublicense to any Third Party, (ii) each sublicense agreement shall be consistent with the terms and conditions of this Agreement; (iii) Licensee causes the performance of each such Sub-Licensee to be in compliance with the applicable terms and conditions of this Agreement, and Licensee shall remain liable for and shall serve as a surety to guarantee for the liabilities arising out of all acts or omissions of its Sub-Licensees; and (iv) within ten (10) days after the execution of any sublicense agreement, Licensee shall provide Licensor with a true and complete copy of such sublicense agreement (while the key commercial terms and conditions of which may be reasonably redacted other than those required to confirm the Sublicensee’s compliance with the applicable requirements of this Agreement). Without limiting the generality of the foregoing, each sublicense agreement shall contain at least the following terms and conditions: (i) requiring each Sub-Licensee to protect and keep confidential any Confidential Information of the Parties in accordance with Article 12 of this Agreement; (ii) requiring each Sub-Licensee to assign to Licensee (or directly to Licensor) all Data, Inventions and other Information related to the Product that are developed by such Sub-Licensee so that Licensee can comply with its obligations to assign the same to Licensor in accordance with Article 9.1; (iii) providing that Licensor shall have the right to audit the books and records of each Sub-Licensee in accordance with this Agreement; (iv) providing that Licensor is an intended third party beneficiary; and (iv) not imposing any obligation or liability on Licensor).

(c)               Right to Sub-contract. Licensee shall be entitled to utilize the services of an Affiliate or a Third Party to perform parts or entirety of the Licensed activities with respect to the Products in the Field in the Territory; provided that (i)  Licensee shall at all times be responsible for the activities subcontracted pursuant to this Article 2.1(c) as if such activities were performed by Licensee itself; and (ii) all sales of the Products by Licensor to Licensee under this Agreement shall be made only to Licensee or its Affiliates and not to any Third Party. Notwithstanding the foregoing mentioned in this paragraph, the express prior written consent from Licensor will be required (which shall not be unreasonably delayed, withheld or conditioned) for the engagement of a Third Party by Licensee to engage in Development or Manufacturing of the Products.

(d)              Priority Access to the License-in Interest in Other Hydrogel Pipeline Products of Licensor. In the event that Licensor decides by a managing resolution that it will seek to negotiate a license arrangement in relation to other self-Controlled hydrogel pipeline product(s) either solely for the Mainland China Market or a larger territory containing the Mainland China Market, then Licensor shall give a written notice (a “Commercialization Notice”) to Licensee of its decision. The Commercialization Notice shall provide a summary of the principal terms that Licensor will be seeking in such license arrangement. Upon receipt of the Commercialization Notice, Licensee shall have thirty (30) days from the date of such receipt to indicate by written notice (a “Negotiation Notice”) to Licensor whether it desires to negotiate such license arrangement. If, within such thirty (30) days, Licensee serves a Negotiation Notice, then the Parties shall negotiate exclusively during the next ninety (90) days (the “Exclusive Negotiation Period”) the terms and conditions of such a license arrangement. If Licensee fails to serve a Negotiation Notice within such thirty (30) days or if the Parties do not enter into a definitive agreement for such a license arrangement before the expiration of the Exclusive Negotiation Period, then following the expiry of such thirty (30) days or the Exclusive Negotiation Period (as applicable), Licensor will be free to negotiate and enter into definitive agreement with any Third Party for such license arrangement in regard of the given pipeline product without any further obligations to Licensee.

2.2              No Implied Licenses; Retained Rights.

(a)               Except as explicitly set forth in this Agreement and the Exclusive Trademark License, neither Party shall be deemed by estoppels or implication to have granted the other Party any license or other right to any Confidential Information or other Intellectual Property Rights of such Party. Licensee covenants that it will not, and it will not permit any of its Affiliates and Designated Parties to, use or practice any Licensor IP outside of the scope of the License.

(b)              Notwithstanding the exclusive License granted to Licensee under Article 2.1, Licensor hereby expressly retains the rights to use the Licensor IP in the Field in the Territory in order to (i) perform its obligations under this Agreement, and (ii) make and have made the Product in the Territory for any use outside the Territory (whether Bulk Product or Finished Product and including related manufacturing and supply chain activities), in each case whether directly or through its designated party. For clarity, Licensor retains the exclusive right to practice, license and otherwise exploit the Licensor IP outside the scope of the License granted to Licensee under Article 2.1.

2.3              Restrictive Covenants

(a)               Territorial Restrictions.

(i)                 Licensee shall not, and shall not permit any of its Affiliates or Designated Parties to, sell the Products directly or indirectly (including via the Internet or mail order) (x) to any Person outside the Territory (including internet address or the like outside the Territory) or (y) to any Person in the Territory that Licensee or any of its Affiliates or Designated Parties, or distributors knows (or is reasonably expected to know) who is likely to Develop or Commercialize any Product for use outside the Territory or assist another Person to do so, or who has directly or indirectly developed or Commercialized any Product for use outside the Territory or assisted another Person to do so. Licensee shall not, and shall not permit any of its Affiliates, or Designated Parties to, engage in any advertising or promotional activities relating to the Product directed primarily to customers, buyers or users outside the Territory. Without limiting the foregoing and to the extent permitted by the Applicable Law, Licensee shall, and shall cause any of its Affiliates, or Designated Parties to, work with designated cross-border E-Commerce Platforms to implement a technically feasible solution to block the electronic orders for the Product placed via any IP address outside the Territory. If Licensee or any of its Affiliates, or Designated Party receives or becomes aware of the receipt of any orders for any Product for use outside the Territory, it shall refer such orders to Licensor. Licensee shall cause its Affiliates, or Designated Parties to notify Licensor of any receipt of any orders for any Product for use outside the Territory. In addition, Licensee shall not permit any of its Designated Parties in the Markets of Taiwan, Singapore and United Arab Emirates (excluding Hong Kong and Macao) to accept any orders from and deliver the Product to the Mainland China Market.

(ii)              Licensor shall not, and shall not permit any of its Affiliates or Third Party (sub)licensees to, sell the Products directly or indirectly (including via the Internet or mail order) (x) to any Person (other than Licensee, its Affiliates, or Designated Parties) for commercial use in the Territory or (y) to any Person outside the Territory that Licensor or any of its Affiliates knows (or are reasonably expected to know) who is likely to Commercialize any Product in the Territory or assist another Person to do so, or who has directly or indirectly Commercialized any Product in the Territory or assisted another Person to do so. Licensor shall not, and shall not permit any of its Affiliates or Third Party (sub)licensees to, engage in any advertising or promotional activities relating to the Product directed primarily to customers, buyers or users in the Territory. If Licensor or any of its Affiliates receives or becomes aware of the receipt by a (sub)licensee or distributor of any orders for any Product for commercial use in the Territory, such Person shall refer such orders to Licensee. Licensor shall cause its Affiliates to notify Licensee of any receipt of any orders for any Product for commercial use in and for the Territory.

(iii)            If either Party reasonably believes that any Third Party is directly or indirectly commercializing or facilitating the Commercialization of the Product in the other Party’s territory, such Party shall notify the other Party in writing. After delivery and receipt of such notice, the Parties will promptly meet to discuss in good faith and mutually agree on potential remedies for such market intrusion which are appropriate in the circumstances and both Parties shall coordinate with each other to implement appropriate remedies, including with limitation file a joint warning or lawsuit against such Third Party, or limiting the supply to such Third Party, or cause to be terminated the distributorship with such Third Party.

(b)              Competing Product.

(i)                 Without limiting Article 2.3(a) and subject to Article 2.3(b)(ii) below, during the Term of this Agreement, except for the Development, Manufacture and Commercialization of the Product in the Field in the Territory under this Agreement, neither Licensee nor Licensor (including their Affiliates) shall, either on its or their own or in collaboration with any Third Party, develop, market, promote, sell, distribute or otherwise commercialize any Competing Product in the Territory.

(ii)              Notwithstanding the foregoing, in the event that a Third Party becomes an Affiliate of a Party after the Effective Date through merger, acquisition, consolidation or other similar transaction, and such Third Party, as of the closing date of such transaction, is engaged in the development, marketing, promotion, sale, distribution or commercialization of any Competing Product in the Territory, then:

(A)             if such transaction results in a Change of Control of such Party, then such new Affiliate shall have the right to continue the development, marketing, promotion, sale, distribution or commercialization of such Competing Product in the Territory, such continuation shall not constitute a breach of such Party’s exclusivity obligations set forth above; provided that such new Affiliate conducts such activities for the Competing Product independently of the activities of this Agreement and does not use any Licensor IP in the conduct of such activities for the Competing Product; and

(B)              if such transaction does not result in a Change of Control of such Party, then such Party and its new Affiliate shall have twelve (12) months from the closing date of such transaction to wind down or divest such Competing Product, and its new Affiliate’s development, marketing, promotion, sale, distribution or commercialization of such Competing Product in the Territory during such twelve (12) month period shall not deemed a breach of such Party’s exclusivity obligations set forth above; provided that such new Affiliate conducts such activities for the Competing Product independently of the activities of this Agreement and does not use any Licensor IP in the conduct of such activities for the Competing Product.

2.4              Performance of License in the Territory in Licensee’s Name. Both Parties agree and acknowledge that certain activities as licensed in Article 2.1 may be conducted and performed in the name of Licensee or its Designated Parties; provided however, to the extent permitted by the Applicable Law, the Licensee or its Affiliate (but not Third Party Designated Party) shall hold the Marketing Authorization and other applicable Regulatory Approvals for the Product in the Field in the Territory. If the Applicable Law doesn’t permit Licensee or its Affiliate to hold any Marketing Authorization or Regulatory Approval for the Product in the Field in the Territory, then Licensor (or its designee) shall hold such Marketing Authorization or Regulatory Approval and cooperate with Licensee in any commercially reasonable and lawful arrangements, including by executing written binding documents in an appropriate form as agreed by both Parties, to provide to Licensee the benefit of exploitation of such necessary Marketing Authorization and Regulatory Approvals for Product in the Field in the Territory, in which case Licensor shall be obligated to maintain such Marketing Authorization and Regulatory Approvals at Licensee’s cost and expense throughout the Term of this Agreement. For clarity, nothing herein shall require Licensor to assign or transfer title of any Intellectual Property to Licensee.

Article 3
Governance

3.1              Joint Steering Committee. Within thirty (30) days of the Effective Date, the Parties shall establish a joint steering committee to oversee the performance of the Agreement and the Exclusive Trademark License, which shall consist of two appointees of the Licensor and two appointees of Licensee (the “Steering Committee” or “SC”). The Steering Committee shall be run and act in accordance with the provisions of Exhibit E. Without prejudice to the provisions of Exhibit E the Steering Committee shall act as a forum to discuss and coordinate all aspects of the Development, Manufacture and Commercialization of the Products in the Field in and for the Territory for the purpose of coordinating and maximizing the commercial interests of both Parties and any key decisions and updates on progress in relation thereto will be shared among members of the Steering Committee in accordance with Exhibit E to ensure both Parties are kept up to date on relevant issues. For the avoidance of doubt, except as provided otherwise in this Agreement (including clause (3) in Exhibit E), Licensee shall have the sole and final discretion or decision-making power in relation to Manufacture and Commercialization of the Products in the Field in the Territory, provided that Licensee must exercise its final decision-making power consistent with Licensor’s Global Branding Strategy and strictly in accordance with the terms of the Exclusive Trademark License. For the avoidance of doubt, such discretion or decision-making power shall only apply to the extent that such activity concerns only in the Field in the Territory, and Licensee shall not have the final discretion or decision making power over matters that affects the Development, Manufacture or Commercialization of the Product outside the Territory, or the Development of any indication outside the Field in the Territory (as long as such indication, once approved, will be automatically included in the Field and the rights or benefits granted to Licensee under this License will be accordingly extended to such indication), for which Licensor shall have the final decision making power. Licensor shall have the final decision making authority in relation to the Development of the Product (including the local regulatory strategies or solutions for the Territory) and the Global Branding Strategy for the Product; provided that Licensor’s decision is consistent with the guidance or requirements of local Regulatory Authorities and provides its decision promptly within a period officially requested by the Regulatory Authority or otherwise reasonably requested by Licensee. Licensee may not, and shall procure that its Affiliates and Designated Parties do not, exercise its discretion or final decision making power or perform or conduct any such activity in a manner that has, or is reasonably likely to have, a detrimental impact on the Development, manufacture or Commercialization of the Product outside the Territory or the legal title, right and benefit as enjoyed by the Licensor in the Licensor IP or Products (including Development of any indication outside the Field in the Territory, as long as such indication, once approved, will be automatically included in the Field and the rights or benefits granted to Licensee under this License will be accordingly extended to such indication). The Steering Committee shall continue to exist until the earlier of the Parties mutually agreeing in writing to disband the Steering Committee (either in entirety or with respect to a particular Product or Products) or on termination of this Agreement in its entirety with respect to all Products. On discontinuance of the Steering Committee, but in the event that this Agreement continues in effect, the Steering Committee shall have no further responsibilities under this Agreement and any requirement of a Party to provide information, reports or other materials to the Steering Committee shall be deemed a requirement to provide such information, reports or other materials to the other Party.

Article 4
DEVELOPMENT

4.1              Responsibilities; Diligence; Costs.

(a)               Responsibilities. Licensee will use Commercially Reasonable Efforts, with the assistance and cooperation of Licensor or its Affiliates as provided in this Article 4, to conduct the necessary Development activities to obtain or maintain the applicable Regulatory Approvals in the Field in the Territory for the Product.

(b)              Specific Development Diligence Obligations. Without limiting the generality of the foregoing and subject to the timely fulfillment of Licensor’s coordination obligation set forth in Development Plan (receipt by Licensee of the Required Information and Regulatory Materials filed with the FDA), Licensee shall obtain applicable Regulatory Approval from a competent Regulatory Authority in Mainland China Market (including without limitation NMPA or its successor) to enable the Commercialization of the Product in the Mainland China Market before the fifth (5^th) anniversary of the Effective Date. For clarity, in the event that the failure of Licensee to comply with such timeline is caused by reasons that are beyond the control of Licensee such as Force Majeure or the delayed processing by the applicable Regulatory Authority, then such timeline shall be correspondingly extended to reflect and accommodate the delay caused by such reasons.

For further clarity, Licensor shall not invoke Article 4.1(b) to terminate this Agreement for Licensee’s failure to obtain the required Regulatory Approval within the above timeline if (i) the Commercialization of such Product remains legally permitted in Mainland China through the on-line channel; and (ii) Licensee undertakes to comply with the Minimum Annual Royalty Commitment requirement set forth in Section 6.2(b).

(c)               Costs. Licensee shall be responsible for all the costs and expenses in connection with the Development of the Products in the Field in the Territory.

4.2              Development Activities.

(a)               All Development of the Product in the Field in the Territory under this Agreement shall be conducted pursuant to a written development plan (the “Development Plan”), as such Development Plan may be revised from time to time in accordance with this Article 4.2. The Development Plan shall contain in reasonable detail all major Development activities (including all clinical trials) and the timelines for such activities. As of the Effective Date, the Parties have agreed to the initial Development Plan, which is attached hereto as Exhibit B. From time to time, but at least every six (6) months, Licensee shall propose updates or amendments to the Development Plan in consultation with Licensor and submit such proposed updated or amended plan to the SC for review, discussion, and approval. Once approved by the SC, the updated or amended Development Plan shall become effective.

(b)              Licensee shall and shall cause its Designated Parties to, use Commercially Reasonable Efforts to Develop the Product in the Field in the Territory and to apply for, obtain and maintain Regulatory Approvals for the Products in the Field in and for the Territory. Licensee shall regularly (no less than quarterly) submit the progress details of Development in the Field in the Territory to the SC for discussions and Licensor shall provide reasonable advice on the Development for Licensee. Licensee shall take reasonably into account the Licensor’s advice on the Development but in the event of any conflicts between both Parties in respect of the Development, Licensor shall have the sole discretion and final decision-making power to determine the protocol (including any changes thereto) of any clinical trial and pre-clinical studies of the Product in the Field in the Territory, including the determination to suspend or terminate the applicable trials in the case of the Material Adverse Events, subject to the Exhibit E.

4.3              Performance. Licensee shall conduct or cause to be conducted Development activities in the Field in and for the Territory in good scientific manner, and in compliance with all Applicable Laws (including without limitation, all GCP, GLP, GMP and GSP).

4.4              Development Records. Licensee shall maintain complete, current and accurate records of all Development activities in regard to the Products by Licensee and Designated Parties, and all Information resulting from such activities. Such records shall fully and properly reflect all work done and results achieved in the performance of the Development activities in good scientific manner appropriate for regulatory and patent purposes. Licensor shall have the right to review and copy such Development records maintained by Licensee and Designated Parties at reasonable times mutually agreed upon by the Parties and to obtain access to the originals of such records to the extent reasonably necessary for regulatory or patent purposes.

4.5              Development Updates and Reports.

(a)               Licensee shall keep Licensor reasonably informed of its and its Designated Parties’ Development activities with respect to the Product in the Field in the Territory. At each regularly scheduled SC meeting, Licensee shall provide Licensor with a written report of the Development activities performed in the Field in and for the Territory by or on behalf of Licensee since the last SC meeting, including the progress and results of its and its Designated Parties’ work. Such report shall be at a level of detail reasonably agreed by both Parties and sufficient to enable Licensor to determine Licensee’s compliance with its diligence obligations hereunder. In addition, Licensee shall promptly provide written notice to Licensor, through the SC, of any significant Development events for the Product in the Field in the Territory (e.g., clinical trial initiation or completion, clinical holds, and receipt of clinical study reports) and such additional information regarding its Development activities as may be reasonably requested by Licensor from time to time. In addition and without limiting the foregoing, Licensee shall also promptly provide Licensor with copies of all Data and all supporting documentation (e.g. clinical trial protocols, CRFs, analysis plans) generated or developed by or on behalf of Licensee in the Development of the Product.

(b)              Licensor shall provide updates to Licensee, on at least a quarterly basis through the SC or upon the reasonable request of Licensee, regarding significant Development events relating to the Product outside the Territory, provided however, that such updates shall be provided only if such events materially impact Licensee’s ability to Develop the Product or Commercialize the Products in the Field in the Territory in accordance with the terms of this Agreement.

4.6              Licensor Assistance. Throughout the Term, Licensor shall notify Licensee of any new Licensor Know-How that is reasonably necessary for Licensee to Develop the Product or Commercialize the Products in the Field in the Territory in accordance with this Agreement and, at any time that Licensor or Licensee identifies Licensor Know-How not previously provided to Licensee, Licensor shall promptly provide Licensee with copies of such Licensor Know-How. Without limiting the foregoing, in order to assist Licensee in the conduct of clinical studies of the Product in the Field in and for the Territory during the Term, Licensor shall (a) promptly upon Licensee’s request, supply Licensee with Licensor Know-How that is reasonably necessary for Licensee to conduct clinical studies of the Product and not previously provided to Licensee, and (b) promptly after the Effective Date, provide Licensee (or its Designated Party), for use in clinical studies of the Product in the Field, with patient diary developed and used in clinical studies of the Product conducted by Licensor in the English language; and (c) provision of reasonable amount of sample Products and placebo for use in clinical Development (for clarity, excluding Post-Marketing Studies) free of charge; provided that such amount together with the quantity supplied under Article 5.4(a) shall be subject to the Supply Ceiling set forth in Article 7.2(b) and shall not exceed [***] units of Product and [***] units of the placebo during the first five (5) years after the Effective Date and Licensor shall have no obligation to supply such products for free after the fifth anniversary of the Effective Date. Subject to the Supply Ceiling set forth in Article 7.2(b), Licensor shall use Commercially Reasonable Efforts to supply any additional quantity of the Products or placebo for use in Development (for clarity, excluding Post-Marketing Studies) at a price equal to the Cost of Goods if reasonably required by Licensee. Without limiting the foregoing, promptly upon Licensee’s request, Licensor shall provide Licensee with the Required Information (in the English language) requested by Licensee in order to obtain or maintain Regulatory Approvals for the Product in the Field in the Territory; provided, however, that Licensor shall not be obligated to provide the CMC Data to Licensee if such data may be submitted by Licensor to the Regulatory Authorities in the Territory directly. In the event it is not possible for Licensor to submit the CMC Data directly to the Regulatory Authorities, Licensee shall use Commercially Reasonable Efforts to negotiate with the applicable Regulatory Authorities to minimize the CMC Data required to be submitted to the Regulatory Authorities. Licensee shall reimburse Licensor for the pre-agreed cost and expense incurred by Licensor to provide such assistance. For the purpose of this clause, (i) Licensor shall not charge Licensee for any normal occupational activities or behaviors that are supposed to be conducted or performed by its officers, directors, employees or agents in the ordinary business course; and (ii) Licensor shall not be obligated to provide the assistance set forth herein unless the costs and expenses to be reimbursed by Licensee have been mutually agreed upon by the Parties.

Article 5
Regulatory

5.1              Regulatory Responsibilities.

(a)               Subject to the terms and conditions of this Agreement, Licensee shall conduct or cause to be conducted all regulatory activities in the Territory related to the Product in the Field in its own or its Affiliate’s name under the Localization Paradigm or in the name of Licensor under the Importation Paradigm if Licensee or its Affiliate is not allowed to hold the product registration under its name, including the preparation of Regulatory Materials and communications and interactions with Regulatory Authorities in the Territory with respect to the same, for the purpose of securing or maintaining all necessary Regulatory Approvals to import the Products, Develop the Products, Manufacture the Products, or Commercialize the Products in the Field in the Territory. Licensee or its Affiliate shall be responsible for all of the costs and expenses in connection with obtaining and maintaining Regulatory Approvals for Products in the Field in the Territory.

(b)              Licensee shall keep Licensor informed of regulatory developments related to the Products in the Field in the Territory and shall promptly notify Licensor in writing of any decision by any Regulatory Authority in the Territory regarding the Products.

(c)               Licensee shall provide Licensor with draft of all Regulatory Materials relating to the Product in the Field in the Territory a reasonable time prior to submission for review, and shall consider and implement in good faith all reasonable comments received from Licensor. In addition, Licensee shall notify Licensor of any Regulatory Materials submitted to or received from any Regulatory Authority in the Territory and shall provide Licensor with copies thereof within five (5) days after submission or receipt. If any such Regulatory Materials is not in the English language, Licensee shall also provide Licensor with an English translation of Key Regulatory Materials and an English summary of other Regulatory Materials sufficient for Licensor to understand the contents of such Regulatory Materials. For the purpose of this section, Key Regulatory Materials shall mean those materials set forth in Exhibit G. Licensor shall have the right to review and comment on such Regulatory Materials and Licensee shall take such comment into consideration and incorporate such comment when appropriate.

(d)              Licensee shall provide Licensor with reasonable advance notice of any meeting or discussion with any Regulatory Authority (or related advisory committees) in the Territory related to the Product in the Field. Licensee shall lead such meeting or discussion, provided however that Licensor or its designee shall have the right, but not the obligation, to attend and participate in such meeting or discussion. Notwithstanding the foregoing, for key meetings or discussions with Regulatory Authorities related to the Product, Licensor or its designee shall attend such meetings at the cost and expenses of the Licensee if reasonably requested by Licensee. If Licensor is not able to attend such meeting or discussion due to the Force Majeure or other reasons, Licensee shall promptly provide Licensor with a written English summary of such meeting or discussion.

(e)               Licensee shall not submit any Regulatory Materials or seek Regulatory Approvals for the Product outside the Territory or any indication outside the Field in the Territory and shall not communicate with any Regulatory Authority having jurisdiction outside the Territory, unless so ordered by such Regulatory Authority, in which case Licensee shall immediately notify Licensor of such order and cooperate with Licensor to respond to such order.

(f)                Licensee shall be solely responsible for providing additional label to ensure safe use of the Product in each Market in the Territory (including adding label in the local language to promote safe use by patient in such Market), and such label must identify Licensee or its Designated Parties (not Licensor) as contact entity for inquiry or complaint regarding the Product. Licensee shall also include clear marking on the Product’s external and internal package to indicate that such Product is not for re-importation into the USA.

5.2              Rights of Reference. Each Party hereby grants, at no cost, to the other Party and the other Party’s Affiliates and permitted sublicensees the right to use, cross-reference, file or incorporate by reference all Regulatory Materials pertaining to the Product in the Field submitted by or on behalf of such granting Party and all Data Controlled by such granting Party. The receiving Party and its Affiliates may use such rights of reference for the purpose of seeking, obtaining and maintaining Regulatory Approval and Commercializing the Product in the Field in its territory and otherwise performing under this Agreement, including, with respect to Licensee, to support any regulatory filings relating to the Product in the Field in the Territory and in interactions with any Regulatory Authority in connection with Development, Manufacture or Commercialization of the Product in the Field in the Territory, and in the case of Licensor as the receiving Party, also for the purpose of seeking, obtaining and maintaining Regulatory Approval and Commercializing the Product outside the Territory anywhere in the world (collectively, the “Permitted Purposes”). In addition, Licensor hereby grants to Licensee and its Affiliates the right, solely for the Permitted Purposes, to use, cross-reference, file or incorporate by reference all Required Information related to the Product to the extent such Required Information is Controlled by Licensor and its Affiliates.

5.3              Adverse Event Reporting and Safety Data Exchange. Within thirty (30) days after the Effective Date, the Parties (under the guidance of their respective pharmacovigilance departments, or equivalent thereof) shall define and finalize the actions that the Parties shall employ with respect to the Products to protect patients and promote their well-being in a written pharmacovigilance agreement (the “Pharmacovigilance Agreement”). For the avoidance of doubt, Licensor shall be responsible for global pharmacovigilance activities, including maintaining the global safety database for the Products, at Licensor’s expense, and Licensee shall be responsible for local pharmacovigilance activities in the Field in the Territory at Licensee’s expense. Furthermore, Licensee will bear all costs of post-marketing surveillance for the Products required by Applicable Laws in the Territory. To the extent required under and in accordance with the Pharmacovigilance Agreement, Licensee shall also be responsible for reporting adverse events and safety data related to the Products to Licensor for inclusion in the global safety database and Licensor shall provide Licensee access to the global safety database to the extent required for Licensee to comply with its pharmacovigilance obligations in the Territory. Each Party hereby agrees to comply with its respective obligations under the Pharmacovigilance Agreement and to cause its Affiliates to comply with such obligations.

5.4              Licensor’s Assistance. As reasonably required by Licensee, Licensor shall (a) provide a reasonable quantity of reference and retention samples as required by Licensee for use in clinical Development (for clarity, excluding Post-Marketing Studies) free of charge; provided that such amount together with the quantity supplied under Article 4.6(c) shall be subject to the Supply Ceiling set forth in Article 7.2 and shall not exceed [***] units during the first five (5) years after the Effective Date and Licensor shall have no obligation to supply Products for free after the fifth anniversary of the Effective Date; (b) provide assistance and support to prepare for any meeting or teleconference with Regulatory Authorities (or related advisory committees) in the Territory at Licensee’s cost and expense; (c) provide Licensee with reasonable and necessary assistance in furtherance of the Commercialization of Product in the Field in the Territory, including discussion and recommendations for the regulatory strategies and plans with respect to the Products in the Field in the Territory, and preparation and execution of applicable letters of certification or authorizations that will facilitate or enable Licensee or its Affiliate for regulatory purpose in the Field in the Territory. Licensee shall reimburse Licensor for the pre-agreed cost and expense incurred by Licensor to provide such assistance. For the purpose of this clause, (i) Licensor shall not charge Licensee for any normal occupational activities or behaviors that are supposed to be conducted or performed by its officers, directors, employees or agents in the ordinary business course; and (ii) Licensor shall not be obligated to provide the assistance set forth herein unless the costs and expenses to be reimbursed by Licensee have been mutually agreed upon by the Parties.

5.5              Availability for On-site Inspection. Once the Regulatory Authority in the Territory (such as NMPA) requests for an on-site inspection on the Regulatory Materials and Required Information Controlled by the Licensor, Licensee will notify Licensor in advance and Licensor shall use Commercially Reasonable Efforts to coordinate with Licensee in preparing for such official on-site inspection, including allowing Licensee to carry out a preparatory inspection, and ensuring the Regulatory Materials and Required Information be kept properly and made available to such official on-site inspection.

5.6              Audits and Inspection of Licensee. Upon reasonable notification, Licensor shall be entitled to conduct an audit of the regulatory and compliance systems, procedures and practices of Licensee and Designated Parties relating to the Development, Manufacture and Commercialization of the Product in the Field in the Territory. In addition, Licensee shall promptly notify Licensor of any inspections relating to the Development, Manufacture and/or Commercialization of the Product by any Regulatory Authority in the Territory, including the NMPA, of which it becomes aware. Unless prohibited by Applicable Laws, Licensee shall permit Licensor’s representative to observe such inspection. Licensee shall also provide Licensor with copies of all correspondences submitted to or received from the Regulatory Authority relating to such inspection.

Article 6
Commercialization

6.1              Overview. Subject to the terms and conditions of this Agreement and the Exclusive Trademark License, Licensee will have the right to Commercialize the Products in the Field in the Territory through itself or Designated Parties, with full control and discretion over all aspects of the Commercialization of Products in the Field in the Territory in compliance with the Global Brand Strategy and Applicable Laws, including with respect to each Product in the Field: (a) developing and executing a commercial launch, (b) negotiating with applicable Governmental Authorities regarding product pricing and reimbursement status of the Products; (c) marketing, advertising, promotion, tendering, bidding and hospital listing; (d) booking sales, distribution and performance of related services; (e) handling all aspects of order processing, invoicing and collection, inventory and receivables; (f) determining pricing and terms of sale of Products; (g) providing customer support, including handling medical queries, and performing other related functions; and (h) conforming its practices and procedures to Applicable Laws relating to the marketing, detailing and promotion of the Products in the Field in the Territory. Licensee shall bear all of the costs and expenses incurred in connection with such Commercialization activities.

6.2              Commercial Diligence.

(a)               Licensee will use Commercially Reasonable Efforts to Commercialize the Product in the Field in each Market in the Territory.

(b)              Without limiting the generality of the foregoing, Licensee shall comply with the Minimum Annual Royalty Commitment as set forth below for the period commencing on January 1, 2022 and ending on the expiration date of this Agreement (“Minimum Annual Royalty Term”); provided that both Parties shall renegotiate in good faith to reasonably adjust the applicable Minimum Annual Royalty rate if any Material Adverse Event on the Commercialization of Product occurs after the expiration of the last valid claim of patents covering the Products in the Territory. Both Parties shall, within thirty (30) days after the end of any Calendar Year during the Minimum Annual Royalty Term, confirm and reconcile the total annual royalty payment paid or payable to Licensor based on the actual annual Net Sales of the Product (“Actual Annual Royalty”) and compare it against the Minimum Annual Royalty Commitment of such Calendar Year (being a “Surplus” in case of a positive balance and a “Deficit” in case of a negative figure). A Surplus of any Calendar Year may be carried forward to cover the Deficit occurred in the following two (2) Calendar Year until the amount of the Surplus of such Calendar Year is exhausted in so doing. If there turns out to be a Deficit in any given Calendar Year, then (i) Licensee may first avail itself of the available Surplus attributed to the Calendar Year before the immediately preceding Calendar Year (if any) to cover such Deficit (until such Surplus is fully reduced to zero); and (ii) if the available Surplus attributed to the Calendar Year before the immediately preceding Calendar Year is insufficient to cover such Deficit or the Calendar Year before the immediately preceding Calendar Year is a year of Deficit, then Licensee may further avail itself of the Surplus attributed to the immediately preceding Calendar Year to cover such Deficit. If the Deficit for a Calendar Year is not fully offset to zero through the steps as mentioned above in the (i) and (ii), then the balance amount of Deficit is a “Loss”. If there has been a Loss for two (2) consecutive Calendar Years during the Minimum Annual Royalty Term and Licensee fails to make up the Loss within thirty (30) Business Days upon receipt of a notice from Licensor to cure such breach, then Licensor will have a right to terminate this Agreement in whole.

[Examples for Reference]

6.3              Commercialization Plan. All Commercialization of the Product in the Field in the Territory under this Agreement shall be conducted pursuant to a written commercialization plan that complies with the terms of the Exclusive Trademark License, the Global Brand Strategy, and the Brand Guidelines (the “Commercialization Plan”), as such Commercialization Plan may be revised from time to time in accordance with this Article 6.3. The Commercialization Plan shall contain in reasonable detail all major Commercialization activities planned for the Product in the Territory and the timelines for such activities. Within thirty (30) days after the Effective Date, Licensee shall deliver an initial Commercialization Plan to the SC for review and discussion. Thereafter, from time to time, but at least every six (6) months, Licensee shall propose updates or amendments to the Commercialization Plan in consultation with Licensor to reflect changes in its Commercialization plan, including those in response to changes in the marketplace, relative success of the Licensed Product, and other relevant factors influencing such plan and activities, and submit such proposed updated or amended plan to the SC for review and discussion before adopting such update or amendment.

6.4              Sales Channel.

(a)               Subject to compliance with the terms of this Agreement, the Exclusive Trademark License, the Global Brand Strategy, and the Brand Guidelines, Licensee may Commercialize the Products in the Field in the Territory through either the online or offline sales channels. Specifically, (i) with respect to the online channels, Licensee may either, (A) sell to the End Customers in the Territory the Finished Products imported from Licensor via its self-owned virtual online stores or sub-licensed third-party online stores on the designated cross-border E-commerce Platforms; or (B) sell to the End Customers in the Territory the self-manufactured Finished Products via its self-owned virtual online stores or sub-licensed third-party online stores on the designated domestic E-commerce Platforms; and (ii) with respect to the offline channels, Licensee may elect either to import the Finished Products from Licensor, or self-Manufacture (only using the Bulk Product supplied by Licensor) the Products to meet the Commercialization demands from the offline sales channels.

(b)              In order to prevent the re-sale or export the Product by End Customers to a country or region outside the Territory (such as United States) (“Parallel Imports”), Licensee shall, upon becoming aware of such instance, work with Licensor and E-Commerce Platforms to implement a technically feasible solution to curb or block the Parallel Imports, including without limitation (i) to impose reasonable restrictions on the electronic ordering on the E-Commerce Platforms (such as making any ex-Territory address an invalid delivery address in the ordering system), (ii) to keep through itself and its Designated Parties accurate and complete records of the name, address, email, quantity of each individual order in an auditable format available for review by Licensor upon reasonable request, (iii) to reasonably price the Product directed for sale towards the End Customers in the Mainland China Market on the designated cross-border E-Commerce Platforms, after taking into account the lowest then-applicable price of the Product in the United States, EU and other major markets , and (iv) to limit the sale of the Product in the Territory (whether through online or offline channels) per order per person to no more than a fixed amount to be agreed by the Parties in good faith (or determined by arbitration pursuant to Section 14.2 if the Parties are unable to agree); provided that in each case, (A) such measures are permitted by Applicable Law and (if applicable) the rules of E-Commerce Platforms; and (B) Licensor has the final decision right to refuse, or require Licensee to adopt, any specific measures to cope with the Parallel Imports in case of failure to reach an agreement through the SC.

(c)               Notwithstanding the measures adopted by Licensee to prevent Parallel Imports, if, during any twelve (12) month period, the volume of Parallel Import reaches or exceeds [***] of the volume of the Product supplied by Licensor to Licensee or its Affiliates under this Agreement (subject to determination by arbitration pursuant to Section 14.2 if the Parties are unable to agree), then Licensor shall have the right to notify Licensee and invoice Licensee for a payment of the lesser of [***] for each Supply Unit (4-week) that is identified as Parallel Imports. Upon receipt of such notice and invoice, Licensee shall (i) pay the amount invoiced within thirty (30) days after receipt of such invoice; and (ii) take all necessary action to reduce the volume of Parallel Import to less than five percent (5%) within one hundred eighty (180) days after recipe of such notice. If Licensee fails to make such payment or reduce the volume of Parallel Import within the applicable time period, then such failure shall be deemed an uncured material breach of this Agreement by Licensee, and Licensor may terminate this Agreement as a whole immediately upon written notice to Licensee under Article 13.2.

(d)              Licensee shall be solely responsible for ensuring that all sales of the Product by Licensee or Designated Parties are made in compliance with all Applicable Laws. Licensee shall keep Licensor informed on any regulatory actions taken or any circulars or notices issued by Regulatory Authorities with respect to sales of medical devices or pharmaceutical products via cross border E-Commerce Platforms, including any notice, action and interaction with any Governmental Authority regarding the sales of the Product by Licensee or Designated Parties via cross border E-Commerce Platform. If any Governmental Authority issues any order or takes any other action to stop the cross border sale of the Product, or if, in any one calendar month, there are more than three (3) seizures of the Product sold through cross border E-Commerce Platform by any Governmental Authority, Licensee shall promptly notify Licensor. As used herein “cross border E-Commerce Platform” means an E-Commerce Platform that is hosted, operated or based in one Market in the Territory and sells the Product to End User in another Market in the Territory.

6.5              Bidding. Licensee shall be responsible and have full decision-making power for conducting bidding activities for all Products in the Field in the Territory in its own or its Affiliate’s name. Licensee shall keep Licensor informed (through the SC) of any material issues concerning bidding process for all Products in the Field in the Territory, including updates of any discussion and correspondence with any Regulatory Authority with respect thereto. Licensee shall reasonably consider Licensor’s comments with respect to Licensee’s or its Affiliate’s bidding activities for all Products in the Field in the Territory and shall promptly notify Licensor of bidding result for all Products in the Field in the Territory. To facilitate the performance of bidding activities by Licensee in the Field in the Territory, at Licensee’s request and expense, Licensor shall provide reasonable assistance, including executing applicable letter of certification, authorization or other documents in an appropriate form as mutually agreed by the Parties.

6.6              Licensor’s assistance. As reasonably required by Licensee or the Regulatory Authority, Licensor shall prepare and execute applicable letters of certification or authorizations that will facilitate or enable Licensee or its Affiliate for the purpose to Develop, Manufacture or Commercialize the Product in the Field in the Territory. Licensee shall reimburse Licensor for the pre-agreed cost and expense incurred by Licensor to provide such assistance.

6.7              Commercialization Reports. Licensee shall keep Licensor reasonably informed of its and its Designated Parties’ Commercialization activities with respect to the Product in the Field in the Territory. At each regularly scheduled SC meeting, Licensee shall provide Licensor with a written report regarding the Commercialization activities with respect to the Product in the Field in the Territory conducted since last SC meeting. Each such report shall be in a form reasonably requested by Licensor and shall summarize Licensee’s and its Designated Parties’ significant Commercialization activities with respect to the Product in the Field in the Territory, covering subject matter at a level of detail reasonably required by Licensor and sufficient to enable Licensor to determine Licensee’s compliance with its diligence obligations hereunder and compliance with the Global Brand Strategy and the Brand Guidelines. In addition, Licensee shall make available to Licensor such additional information about its Commercialization activities as may be reasonably requested by Licensor from time to time.

6.8              Coordination of Commercialization Activities. The Parties recognize that they may benefit from the coordination of certain activities in support of the Commercialization of the Product in and outside the Territory. As such, the Parties shall coordinate such activities where appropriate, which may include scientific and medical communication and product positioning and Licensor’s Global Brand Strategy.

6.9              Minimum Advertised Price Policy. Licensee acknowledges that Licensor has made substantial investment in promoting the Product and the PLENITY™ brand. Licensee hereby agrees to use Commercially Reasonable efforts to maintain and enhance the premium brand image of the Product. Without limiting the generality of the foregoing, Licensee acknowledges that Licensor has implemented a Minimum Advertised Pricing Policy (the “MAP Policy”) and acknowledges that Licensor may terminate Licensee for failure to comply with the MAP Policy in accordance with the terms of the Map Policy. Notwithstanding the foregoing, it is understood by the Parties that the implementation of the MAP Policy shall not limit Licensee’s freedom to determine the actual resale price of the Product in the Territory.

Article 7
MANUFACTURE AND SUPPLY

7.1              Supply Model. Licensee shall have the sole discretion and right to select to either or both of (i) Importation Paradigm, or (ii) Localization Paradigm to satisfy the supply demands of the Products in the Field in and for the Territory.

(a)               In case of the Importation Paradigm, Licensee shall or shall cause its Affiliate to, purchase the Finished Products from the Licensor and the Licensor shall supply the Finished Products at a price equal to a [***] margin above the actual Cost of Goods of such Finished Product.

(b)              In case of the Localization Paradigm, Licensor shall or shall cause its Affiliates or contractors to supply the Bulk Products to Licensee or its Affiliate for Manufacturing the Finished Products for Commercialization in the Field in the Territory. Such Bulk Products shall be supplied at a price equal to a [***] margin above the actual Cost of Goods of such Bulk Products. Licensee shall Manufacture the Finished Product only in accordance with the specifications (including with respect to dosage, dosage form, presentation, and instruction for use) provided by Licensor.

(c)               The applicable supply price of Finished Products or Bulk Products, as the case may be, shall be individually or collectively referred to as “Supply Price” and the actual Cost of Goods thereof shall be disclosed to Licensee and subject to Licensee’s right to audit pursuant to Article 8.8. The Cost of Goods of the Products as of the Effective Date is set forth in Exhibit H and may be updated on an annual basis by Licensor via the meeting of SC (for clarity, update to the Cost of Goods shall, without prejudice to the audit right of Licensee as stated in Section 8.8, be reviewed but not subject to approval by SC). It is agreed and acknowledged that the Costs of Goods updated by Licensor shall be no less favorable than the corresponding reference cost during the period from October of 2020 to the end of 2022 (for Finished Products as indicated in the Exhibit H). Notwithstanding the foregoing, beginning as of January 2022 the Costs of Goods as set forth in Exhibit H shall be further adjusted in response to actual and auditable changes in the costs of producing Products according to this Agreement. Gelesis shall use Commercially Reasonable Efforts to reduce Cost of Goods during the Term of this Agreement. Such Supply Price shall become due and payable within thirty (30) days after receipt of the applicable Finished Products or Bulk Products by Licensee.

(d)              Under the Localization Paradigm, upon Licensee’s request, Licensor shall provide Licensee with one (1) Manufacturing technology transfer (whether to Licensee or its Affiliate) in order for Licensee (or its Affiliate) to Manufacture the Finished Product using the Bulk Product supplied by Licensor. In connection with such Manufacturing technology transfer, Licensor shall use Commercially Reasonable Efforts to perform all the necessary activities and provide all necessary assistance and resource as required by the NMPA or other applicable Regulatory Authority, including the technical assistance and on-site personal support for building up the production line and Manufacturing of the Finished Products in compliance with applicable GMP until the First Commercial Sale of Finished Products Manufactured by Licensee (or its Affiliate) in the Territory, together with all relevant Regulatory Approvals, Licensor Know-how, records, documentations and information duly transferred to Licensee (or its Affiliate) within agreed period. Licensee shall reimburse Licensor for the pre-agreed cost and expense incurred by Licensor to provide such assistance requested by Licensee in connection with the Manufacturing technology transfer. For the purpose of this clause, (i) Licensor shall not charge Licensee for any normal occupational activities or behaviors that are supposed to be conducted or performed by its officers, directors, employees or agents in the ordinary business course; and (ii) Licensor shall not be obligated to provide the assistance set forth herein unless the costs and expenses to be reimbursed by Licensee have been mutually agreed upon by the Parties. For clarity, the Manufacturing technology transfer shall not cover the manufacture of the Bulk Product, and Licensee shall not have the right to manufacture the Bulk Product.

7.2              Ordering of Products

(a)               Forecast. Promptly after the Effective Date, the Parties shall discuss in good faith Licensee’s anticipated requirement for the Products in the Territory. No later than January 1, 2021, Licensee shall or shall cause its Affiliate to submit to Licensor a good faith monthly rolling forecast (the “Rolling Forecast”) of the quantities of the Finished Product (under the Importation Paradigm) and/or Bulk Products (under the Localization Paradigm) that Licensee (or its Affiliate) will purchase from Licensor for the next twenty four (24) months. Thereafter, the Parties shall discuss in good faith, and Licensee shall update, the Rolling Forecast on a monthly basis no later than ten (10) Business Days before the beginning of the next calendar month. Of the twenty four (24) month Rolling Forecast, Licensee shall be obliged to issue, or cause its Affiliate to issue, firm purchase orders for the first three (3) months’ forecast (the “Binding Forecast”), while the forecast for the remaining twenty one (21) months shall be non-binding forecast; provided that when a particular month enters into the Binding Forecast (i.e., becomes the third month in the Rolling Forecast), the quantities forecasted for such month shall be no more than one hundred fifteen percent (115%) and no less than eighty five percent (85%) of the quantities forecasted for such month when such month is the seventh (7^th) month of the Rolling Forecast. Licensor agrees that it shall use Commercially Reasonable Efforts to supply the quantities set forth in the Binding Forecast of the relevant Products or Bulk Products; provided however that Licensor shall not be obligated to supply any Product to Licensee prior to October 1, 2020.

(b)              Supply Ceiling. Notwithstanding anything to the contrary in this Agreement, for any calendar month, Licensor shall not be obligated to supply to Licensee more Products than the quantity agreed to by the Parties as follows (the “Supply Ceiling”). Beginning the first Calendar Quarter of 2021 and continuing on a quarterly basis thereafter, the Parties shall discuss and mutually agree to update a Supply Ceiling forecast for the next twenty-four (24) months (the “Supply Ceiling Forecast”).  The first twelve (12) months of a Supply Ceiling Forecast shall be considered fixed to enable Licensor to manage its production planning process. The initial Supply Ceiling Forecast is set forth in Exhibit F (INITIAL SUPPLY CEILING FORECAST). In the event the Parties are unable to agree on the Supply Ceiling for any month, then the Supply Ceiling for the last month that the Parties have previously agreed (if there is no such agreement then as set forth in the Initial Supply Ceiling Forecast (as may be updated from time to time by mutual agreement) or March 2023 following expiry of the Initial Supply Ceiling Forecast) shall continue to apply. For clarity, Licensor shall guarantee the supply capacity of the Product as long as the quantity ordered by Licensee (or its designated Affiliate) in accordance with this Agreement falls within the Supply Ceiling.

(c)               Contents of Purchase Orders. Licensee shall, by itself or through its Affiliate, deliver to Licensor purchase orders (each, a “Purchase Order”) for Licensee’s demand of the volumes of the Finished Products (under the Importation Paradigm) or Bulk Products (under the Localization Paradigm), which shall be consistent with the Binding Forecast. Each Purchase Order shall be in the form mutually agreed between the Parties from time to time, and shall specify (i) the specifications, quantities and types (per SKU) of the Product or Bulk Product ordered, (ii) shipping instructions and destination(s), (iii) sales channels to which the ordered Finished Products supply (in case of Importation Paradigm) and (iv) the delivery date. In the event that any term or condition of a Purchase Order that is different from, or contrary to, the terms and conditions of this Agreement, the terms and conditions of this Agreement shall prevail.

(d)              Confirmation of Purchase Orders. Licensee shall issue or cause to be issued each Purchase Order to Licensor not less than three (3) months prior to the delivery date identified in the Purchase Order or such other shorter time period as mutually agreed to between the Parties in writing. Licensor shall confirm to Licensee or its Affiliate whether Licensor can accept the Purchase Orders (or any portion thereof) within five (5) Business Days after receipt of such Purchase Order. Upon acceptance by Licensor, the Purchase Order shall become binding on both Parties.

7.3              Delivery of Products.

(a)               Delivery against Purchase Orders. Licensor shall be obliged to supply the ordered Finished Products (under the Importation Paradigm) or Bulk Products (under the Localization Paradigm) on or before the delivery date as per the Purchase Order accepted by Licensor. The Product shall be delivered in Licensor’s standard packing and as per labelling requirements reasonably instructed in advance by Licensee. Should Licensor for any reason be unable or expect that it will be unable to deliver the Products as per the delivery schedule set forth in the given Purchase Order, Licensor shall inform Licensee (or its Affiliate) of such delay in delivery at least fifteen (15) days in advance of delivery date. If such delay in Delivery is solely attributable to Licensor, Licensee shall be entitle to a reduction in the Supply Price as the sole remedy for the claim of such Delivery delay as below: for every full week of delay beyond the thirtieth (30^th) day after the Delivery date as set forth in the applicable purchase order accepted by Licensor until the date of actual Delivery, the Supply Price for such delayed Product shall be reduced by five percent (5%), up to a total reduction of no more than fifty percent (50%). For the avoidance of doubt, Licensor shall not be liable for such delay damages if the delay is caused by reasons that are beyond the control of Licensor such as Force Majeure or Licensee’s failure to perform its obligations under (b) below.

(b)              Incoterm. The ordered Finished Products or Bulk Products under this Agreement shall be delivered FCA, Licensor’s designated facility (Incoterms 2020) basis (“Delivered” and each a Delivery”), it being understood that Licensee shall at its own cost arrange for its designated forwarder to take delivery of the Product and undertake the exportation formalities of the Products from the country of designated facility on behalf of Licensor, while Licensor shall provide authorization letter and documents as necessary for Licensee or its designated forwarder to complete the exportation custom clearance. The title and risk of loss with respect to the Products shall transfer to Licensee upon Delivery.

(c)               Formalities. Licensee shall be responsible for obtaining from the Governmental Authorities all applicable licenses, permits, approvals necessary for exporting, transporting and importing the Finished Products or Bulk Products ordered under this Agreement into the Territory, and Licensor shall, as reasonably required by Licensee in advance, also timely provide Licensee with the necessary documents and assistances for facilitating the process of exporting, transportation and importation of the Products into the Territory, at Licensee’s cost and expense.

(d)              Remaining Shelf Life. Licensor shall ensure that the Product delivered to Licensee (or its designated Affiliate) will have a minimum remaining shelf-life of eighty percent (80%) of the label claim of the Product at the date of delivery, provided the desired delivery quantity shall not be less than five hundred (500) Supply Units (4-week).

7.4              Inspection, Acceptance and Return of Products

(a)               Incoming Inspection. Licensee shall, within fifteen (15) days of delivery of the Finished Product (under the Importation Paradigm) or Bulk Products (under the Localization Paradigm), cause its Affiliate to conduct incoming inspection and analysis of the ordered Finished Products or Bulk Products to confirm if they conforms to the specifications or have any visible defects, and send a written notice (“Rejection Notice”) to Licensor should it determine that the ordered Finished Products or Bulk Products do not conform to the specifications or have any visible defects, along with a copy of its analysis report. If Licensor accepts the Rejection Notice, it shall, at its option, (i) replace the non-conforming Finished Products or Bulk Products without any charges to Licensee or its Affiliate as applicable within three (3) months from the date of acceptance of Rejection Notice by Licensor or (ii) reduce the invoicing amount to Licensee or its Affiliate as applicable or return the amount paid by Licensee or its Affiliate for the non-conforming Finished Product or Bulk Products. Licensee or its Affiliate shall destroy (at the cost of Licensor) or return (to the extent permitted by the Applicable Law) the non-conforming Finished Products or Bulk Products as may be notified by Licensor. In the event of returning non-conforming Finished Products or Bulk Products, Licensor shall reimburse freight charges to Licensee or its Affiliate.

(b)              Disagreement with the Inspection Results. In the event Licensor does not accept the Rejection Notice, Licensor shall promptly notify Licensee and the Parties shall discuss and review each Party’s analysis and testing of the relevant Product. If the Parties are unable to agree whether a particular Product is non-confirming Product, Licensee shall submit the sample retained by itself or its Affiliate to an independent and competent inspection institution mutually agreed by the Parties (unless mandatorily designated by Applicable Law or Regulatory Authority), whose adjudication as to whether the Product conforms to the specifications or not shall be final and binding on the Parties. The expenses incurred for such independent competent institution determination shall be borne by the Party against whom the findings are made. If the said institution finds the Product does not conform to the specifications, Licensor shall, at Licensor’s option, (i) replace the same without any charges to Licensee or its Affiliate within three (3) months from the date of report by the institution or (ii) reduce the invoicing amount to Licensee or its Affiliate or return the amount paid by Licensee or its Affiliate for the non-conforming Products. Licensee or its Affiliate shall destroy (at the cost of Licensor) or return (to the extent permitted by the Applicable Law) the non-conforming Products as may be notified by Licensor. In the event of returning non-conforming Product, Licensor shall reimburse freight charges to Licensee or its Affiliate.

7.5              Recall.

(a)               Regardless of whether the Product is sold under the Importation Paradigm or the Localization Paradigm, Licensee shall pursuant to consultations with Licensor, and at Licensee’s own expense recall the Products in the Field within the Territory, if any of the below circumstances occurs.

(b)              Compliance with Recall Requirements. Licensee warrants that: (i) it will implement and complete the recall of the Products within the Territory by the statutory deadline and in strict compliance with all Applicable Laws; and (ii) it shall perform in full coordination with the other Party, including timely sharing and providing feedbacks of recall information, controlling and recovering Products with potential safety hazards.

(c)               Joint Statement with respect to Recall. Following the decision to implement a Product recall in the Field in the Territory, the Parties shall mutually agree on a prepared statement for use in response to any inquiries regarding such recall.

(d)              Cost. The costs and expenses of the Product recalls in the Field in the Territory shall be assumed by Licensee unless the recall is caused by the quality of the Finished Product (under the Importation Paradigm) or Bulk Product (under the Localization Paradigm) existing at the time of Delivery or safety issue existing at the time of Delivery (but excluding safety issues caused by the promotion or marketing of the Product by Licensee or its Designed Parties beyond the scope of Regulatory Approval or otherwise not in compliance with Applicable Laws, in which case the cost and expense of the recall shall be borne solely by Licensee) of the Product then in such case the cost and expense of the recall shall be borne by Licensor.

Article 8
FINANCIAL TERMS

8.1              Upfront Payment. As consideration for the rights and licenses granted by Licensor to Licensee under this Agreement, Licensee shall pay Licensor an one time, non-refundable and non-creditable upfront fee of USD Fifteen (15) Million within five (5) Business Days after the execution of this Agreement and receipt of the given Invoice.

8.2              Invoices. For the convenience of payment in this Article 8, any payment to be made by Licensee shall be accompanied with an invoice from Licensor, in a form as reasonably required by Licensee.

8.3              Milestone Payments.

(a)               Regulatory Approval Milestone Payments. Licensee shall pay to Licensor the one-time, non-refundable and non-creditable milestone payment of USD five (5) million within thirty (30) days after the earlier of (i) the approval of the Marketing Authorization Application of the Product by NMPA and (ii) fifth (5^th) anniversary of the Effective Date. Licensee will promptly notify Licensor of the approval of the Marketing Authorization Application of the Product by NMPA.

(b)              Sales Milestone Payments. Licensee shall pay to Licensor the one-time, non-refundable, non-creditable sales milestone payments set forth below, in each case within thirty (30) days after the end of the Calendar Year during which the aggregated Net Sales of all Products in the Territory twelve (12)-month period first reach the values indicated below. Licensee shall provide a report at the time of each such payment which shows the calculation of aggregated Net Sales of all Products in the Territory for the applicable Calendar Year.

(c)               One Time Payment. Each milestone payment in this Article 8.3 shall be payable only once, in connection with the first achievement of the applicable Milestone Event and no additional milestone payments will be due on account of subsequent achievements of any Milestone Event. For clarity, the milestone payments in Article 8.3(b) are additive such that if multiple milestone events specified above are achieved in the same Calendar Year, then the milestone payments for all such milestone events shall be payable within thirty (30) days after the end of such Calendar Year.

8.4              Royalty Payments. Licensee shall pay Licensor royalties on Net Sales of all Products in the Territory for each Calendar Year during the Term, which shall be calculated by multiplying the Net Sales of such Products during each such Calendar Year by eleven percent (11%). This Section 8.4 is intended to provide for payments to Licensor equal to eleven percent (11%) of Net Sales for the entire Term of this Agreement but both Parties shall renegotiate in good faith to reasonably adjust the applicable Royalty rate if any Material Adverse Event on the Commercialization of Product occurs after the expiration of the last valid claim of patents covering the Products in the Territory. In establishing this payment structure, the Parties recognize, and Licensee acknowledges, the substantial value of the various actions and investments undertaken by Licensor prior to the Effective Date and that Licensor will undertake under this Agreement, and that the value of the Licensor IP licensed to Licensee hereunder resides substantially in Licensor Know-How. As a result, the Parties attribute such value to Licensor’s leading proprietary knowledge in the subject matter, including trade secrets, preclinical and clinical data pertaining to the Product, and regulatory filings made by Licensor prior to the Effective Date, in each case created or generated by Licensor through the expenditure of significant resources and as a result of Licensor’s unique innovative capabilities. The Parties agree that, because Licensor is not separately compensated under this Agreement for such additional benefits, the royalty rate set forth above is appropriate for the entire Term of this Agreement. The Parties have agreed to the payment structure set forth herein as a convenient and fair mechanism for both Parties in order to compensate Licensor for these additional benefits as part of the overall consideration for Licensor to enter into this Agreement.

8.5              Reports; Payment. Within thirty (30) days after the end of each Calendar Quarter commencing with the first Calendar Quarter in which there is any sale of the Product anywhere in the Territory, Licensee shall, on a Market-by-Market basis, provide Licensor with a report (a “Royalty Report”) setting forth (a) the quantity and description of the Product sold in each sales transaction the Territory during the Calendar Quarter, (b) the calculation of the Net Sales and Per Unit Price of the Product sold in each sales transaction in the Territory (including all relevant deductions from invoiced amounts made in the calculation of Net Sales in accordance with the definition of Net Sales), (c) the exchange rates used to calculate the royalties payable, (d) whether any sales milestone in Article 8.3(b) is reached, and (e) the milestone payments and royalties due hereunder. Concurrent with the delivery of such Royalty Report, Licensee shall pay Licensor the milestone and royalty payments due and payable under this Agreement for such Calendar Quarter. The information contained in each Royalty Report shall be the Confidential Information of Licensee.

8.6              Payment Method; Foreign Exchange. All payments due to Licensor hereunder shall be made in US Dollars by wire transfer of immediately available funds into an account designated by Licensor. For purposes of making sales milestone and royalty payments due under this Agreement, Licensee shall convert Net Sales at the rate of exchange equal to the average of the daily foreign exchange rates published in the Wall Street Journal, for the Calendar Quarter in which such payments occurred, or for periods less than a Calendar Quarter, the average of the daily rates published in the Wall Street Journal, for the applicable period. If Licensor does not receive payment of any sum due to it on or before the due date therefor, simple interest shall thereafter accrue on the sum due to Licensor from the due date until the date of payment at a per-annum rate of twelve percent (12%) or the maximum rate allowable by Applicable Law, whichever is less.

8.7              Books and Records. Licensee shall keep, and shall require its Designated Parties to keep, accurate books and accounts of record in connection with its sales of Products in sufficient detail to permit verification of Licensee’s milestone and royalty payments due under this Agreement, and shall maintain such records for a period of three (3) years from the end of the Calendar Year in which sales occurred or a longer period as required under Applicable Laws. Licensor shall keep, and shall require its Affiliates to keep, accurate books and accounts of record in connection with manufacture of Products in sufficient detail to permit verification of Cost of Goods for the Products supplied to Licensee hereunder, and shall maintain such records for a period of three (3) years from the end of the Calendar Year in which Product (as applicable) was manufactured or a longer period as required under Applicable Laws.

8.8              Audit Rights. Each Party, through an independent, internationally recognized certified public accountant reasonably acceptable to the other Party, shall have the right to access and audit the other Party’s (including its Affiliates’ and Designated Parties’, as applicable) relevant books and records kept in accordance with Article 8.7 for the sole purpose of (a) with respect to Licensor’s right to audit, verifying Licensee’s milestone and royalty payments to Licensor due under this Agreement and the calculation of Net Sales upon which such milestone and royalty payments are calculated, and (b) with respect to Licensee’s right to audit, if applicable, verifying the cost as the basis of Supply Price charged by Licensor pursuant to Article 7.1; such access shall be conducted after reasonable prior notice by the auditing Party to the audited Party during the audited Party’s ordinary business hours, shall not be more frequent than once during any Calendar Year. Such accountant shall execute a confidentiality agreement with the audited Party in customary form and shall only disclose to the auditing Party whether, in the case of Licensor as the auditing Party, Licensee paid Licensor the correct milestone and royalty payments due under this Agreement during the audit period and, in the case of Licensee as the auditing Party, Licensor charged the correct Supply Price based on the applicable COGS during the audit period and if not, any information necessary to explain the source of the discrepancy. If such audit determines that Licensee underpaid any amount properly due and such determination is not subject to a good faith dispute, then Licensee shall promptly pay Licensor an amount equal to such underpayment. If such audit determines that Licensee overpaid Licensor and such determination is not subject to a good faith dispute, then Licensee may take a credit for such overpayment against any future payment due to Licensor (if there will be no future payment, Licensor shall promptly issue a refund to Licensee in the amount of such overpayment). The auditing Party shall bear the full cost of such audit unless such audit discloses (i) in the case of Licensor as the auditing Party, an underpayment of milestones or royalties by Licensee of more than five percent (5%) of the amount due for the audited period, or (ii) in the case of Licensee as the auditing party, an overcharge of the Supply Price by Licensor of more than five percent (5%) of the amount due for the audited period, in which case the audited Party shall bear the full cost of such audit.

8.9              Taxes.

(a)               Unless otherwise specified herein, each of the Parties hereto shall be responsible for its own costs and expenses occurred in connection with this Agreement and the transactions contemplated hereby.

(b)              If Licensee is required to make a payment to Licensor that is subject to a deduction or withholding of income taxes by a Governmental Authority in the Territory, (excluding VAT as defined in Article 8.9(d)) (a “Withholding Tax”), then Licensee shall, in accordance with Applicable Laws, (i) deduct or withhold such Withholding Tax in the full amount required to be deducted or withheld from the amount due to Licensor, (ii) remit such Withholding Tax to the proper Governmental Authority when due, (iii) furnish Licensor with proof of payment of such Tax Withholding within thirty (30) days following the payment, and (iv) pay to Licensor the stated amount payable under this Agreement (after deducting any such Withholding Tax).

(c)               If Licensee (or Licensee’s assignees or successors) is required to make a payment to Licensor subject to Withholding Tax, and if such Withholding Tax obligation arises as a result of any action taken by Licensee or its Affiliates or successors, including an assignment of this Agreement as permitted under Article 15.4, as a result of which (i) the payment arises in a territory other than the territory under the laws of which Licensee is organized, (ii) there is a change in the tax residency of Licensee, or (iii) the payments arise or are deemed to arise through a branch of Licensee in a territory other than the territory under the laws of which Licensee is organized, and such action has the effect of increasing the amount of Withholding Tax (each, an “Withholding Tax Action”), then notwithstanding Article 8.9(b), the payment by Licensee (in respect of which such Withholding Tax is required to be made) shall be increased by the amount necessary to ensure that Licensor receives an amount equal to the same amount that it would have received had no Withholding Tax Action occur.

(d)              All payments due to Licensor from Licensee pursuant to this Agreement shall be paid exclusive of, and without reduction for, any value-added tax (including any goods and services tax) (“VAT”) (which, if applicable, shall be payable by Licensee). Licensee shall be responsible for the payment of all VAT applicable to the transactions contemplated by this Agreement and shall file all applicable VAT tax returns. Licensor shall cooperate, to the extent reasonably required, with the filing of any such VAT tax returns. Licensee shall indemnify Licensor for any VAT imposed on Licensor as a result of the transactions contemplated by this Agreement and if Licensor directly pays any such VAT, Licensee shall promptly reimburse Licensor for such VAT including all reasonable related costs. If Licensor determines that it is required to report any such tax, Licensee shall promptly provide Licensor with applicable receipts and other documentation necessary or appropriate for such report.

(e)               The Parties agree to cooperate with one another and use reasonable efforts to avoid or reduce Withholding Taxes in respect of the payments made by Licensee to Licensor under this Agreement. Licensor shall provide Licensee any tax forms that may be reasonably necessary in order for Licensee to not withhold taxes or to withhold taxes at a reduced rate under an applicable bilateral income tax treaty, to the extent legally able to do so. Licensor shall use reasonable efforts to provide any such tax forms to Licensee in advance of the due date. Licensee shall provide Licensor with reasonable assistance to enable the recovery, as permitted by Applicable Laws, of Withholding Taxes resulting from payments made under this Agreement, such recovery to be for the benefit of Licensor. Licensee shall use reasonable efforts to minimize any such taxes required to be withheld on behalf of Licensor by Licensee, its Affiliates or Sub-Licensees. Each Party agrees to reasonably assist the other Party in lawfully claiming exemptions from or minimizing such deductions or withholdings under double taxation laws or similar circumstances.

Article 9
Intellectual Property Matters

9.1              Ownership of Data and Inventions.

(a)               Licensee agrees that, as between the Parties, all legal and beneficial ownership of (i) all Intellectual Property Rights relating to the Products (including any data generated from the use of the Products and other improvements) and (ii) all of the Information provided or generated under this Agreement or otherwise related to the Products (including all Data and Inventions) shall both ultimately belong to and remain vested in Licensor. The Intellectual Property Rights in foregoing (i) and (ii) are hereinafter regarded as and included into “Licensor IP”. Nothing in this Agreement shall be construed as assigning or otherwise transferring to Licensee, its Affiliate or any Third Parties any right, title or interest in and to Licensor IP.

(b)              Without limiting the foregoing, Licensee shall and hereby does assign to Licensor all right, title and interest in any Licensor IP (including Data and Inventions) that is generated or developed by or on behalf of Licensee (including its Designated Parties). Licensee shall take (and cause its Designated Parties, and their respective employees and agents to take) such further actions reasonably requested by Licensor to evidence such assignment and to obtain patent and other intellectual property rights protection therefor. Licensee shall obligate its Designated Parties to assign all Licensor IP generated or developed by such Person to Licensee, so that Licensee can comply with its obligations to assign the same to Licensor pursuant to this Article 9.1, and Licensee shall promptly obtain such assignment. If the assignment of any Licensor IP to Licensor as set forth above is not permitted by Applicable Laws, Licensee shall hold such Licensor IP for the sole benefit of Licensor, and Licensee shall and hereby does grant to Licensor an exclusive (even as to Licensee), worldwide, transferable, sublicenseable (through multiple tiers), fully paid, royalty free, perpetual and irrevocable license under such Licensor IP for any and all uses.

(c)               For clarity, during the Term of this Agreement, all Licensor IP that is assigned by Licensee to Licensor under Article 9.1 shall be included in the License granted to Licensee in accordance with the terms of this Agreement without additional consideration or payment.

9.2              Patent Prosecution.

(a)               Licensor Patents. Licensor shall have the first right, but not the obligation, to prepare, file, prosecute and maintain Licensor Patents both in and outside the Territory, including any related interference, re-issuance, re-examination and opposition proceedings with respect thereto, at Licensor’s own cost and expense.

(b)              During the Term, Licensee shall cooperate with Licensor, at Licensor’s request and cost, in connection with the prosecution of patent applications included within such Licensor Patents. Licensor shall periodically through SC inform Licensee of the status and material steps and developments with regard to the preparation, filing, prosecution and maintenance of the Licensor Patents in the Territory.

(c)               If Licensor decides that it is no longer interested in filing, maintaining, or prosecuting a particular Licensor Patent in any Market in the Territory during the Term, Licensor shall inform Licensee of such decision promptly in writing and, in any event, so as to provide Licensee a reasonable amount of time to meet any applicable deadline to establish or preserve such patent in such Market of the Territory. Licensee shall have the right to assume responsibility for continuing the prosecution, maintenance or defense of such Licensor Patent in Licensor’s name in such Market in the Territory at Licensee’s sole cost and expense and through counsel of its own choice, provided that it responds with its willingness to do so within thirty (30) days upon receipt of the notice. Upon transfer of such responsibility to Licensee, Licensor shall promptly deliver copies of all necessary files related to such Licensor Patent with respect to which responsibility has been transferred and shall take all actions and execute all documents reasonably necessary for Licensee to assume such prosecution and maintenance of such Licensor Patent in such Market in the Territory. Licensee’s prosecution or maintenance of such Licensor Patent shall not require Licensor to assign such Licensor Patent to Licensee and shall not change the Parties’ respective rights and obligations under this Agreement with respect to such Licensor Patent other than those expressly set forth in this Article 9.2(b).

(d)              Collaboration. Each Party shall provide the other Party all reasonable assistance and cooperation in the patent prosecution efforts provided in this Article 9.2, including providing any necessary powers of attorney and executing any other required documents or instruments for such prosecution.

9.3              Patent Enforcement.

(a)               Notification Regarding Licensor Patents. If Licensee becomes aware of any existing or threatened infringement of any Licensor Patent in the Field in the Territory (“Infringement”), it shall promptly notify Licensor in writing to that effect and the Parties will consult with each other regarding any actions to be taken with respect to such Infringement.

(b)              Licensor Patents Enforcement Rights. Each Party shall share with the other Party all Information available to it regarding each alleged Infringement. Licensor shall have the sole right, but not the obligation, to bring an appropriate suit or other action against any person or entity engaged in such Infringement (including as part of any enforcement action against infringement of any Licensor Patent globally), at Licensor’s cost and expense and subject to Licensor’s control. Recoveries obtained by Licensor from the enforcement of the Licensed Patents shall be first applied to reimburse Licensor’s cost and expense in connection therewith. If Licensor obtains recoveries in excess of its cost and expense in any enforcement action against Infringement in the Field in the Territory, such excess recoveries shall be shared equally between the Parties.

9.4              Third Party Infringement Claims.

(a)               Third Party IP Action. During the Term, each Party shall promptly notify the other Party in writing upon becoming aware of any allegation by a Third Party that the Development, Manufacture or Commercialization of any Products in the Field in the Territory infringes or misappropriates or may infringe or misappropriate the Intellectual Property Rights of such Third Party in the Territory (a “Third Party IP Action”). Licensor shall have the first right, but not the obligation, to defend the Third Party IP Action, and unless otherwise agreed in writing by the Parties, Licensor shall have control of the defense of any such Third Party IP Action by counsel of its own choice; provided, however, that Licensor may not settle or compromise any Third Party IP Action, or knowingly take any other action in the course thereof, in a manner that materially adversely affects Licensee’s rights or interests, without the written consent of Licensee (such consent not to be unreasonably withheld, conditioned or delayed). If Licensor decides not to defend any Third Party IP Action, Licensor shall promptly notify Licensee and thereafter, Licensee shall have the right to defend such Third Party IP Action. The defending Party shall bear the expense of the defense of a Third Party IP Action. Licensor shall keep Licensee reasonably informed of all material developments in connection with any Third Party IP Action. This Article 9.4 shall not be interpreted as placing on either Party a duty of inquiry regarding Third Party Intellectual Property Rights.

(b)              Third Party IP Agreement. In the event either Party determines that it is necessary or advisable to acquire rights under a Third Party’s Patents, know-how or other Intellectual Property Rights, through a license or other agreement with such Third Party (“Third Party IP Agreement”), in order to Develop, Manufacture, use, sell, offer to sell, have sold, import or otherwise Commercialize any Product in the Field in the Territory under this Agreement, whether or not there has been the institution of any infringement claim, such Party shall notify the other Party of such determination. Licensor shall have the first right, but not the obligation, to negotiate any Third Party IP Agreement to acquire rights under a Third Party’s Intellectual Property Rights both in the Territory and outside the Territory. If Licensor decides not to negotiate a Third Party IP Agreement in the Field in the Territory, Licensee shall have the right to negotiate such Third Party IP Agreement to acquire rights under a Third Party’s Intellectual Property Rights solely in the Field in the Territory; provided that the financial terms and other material terms of such Third Party IP Agreement affecting Licensor shall be subject to Licensor’s consent, not to be unreasonably withheld, conditioned or delayed.

9.5              Trademarks. The Parties acknowledge and agree that use of the Licensed Marks in connection with the Development, Manufacture and Commercialization of Products in the Field in the Territory shall, at all times, be subject to the terms of the Exclusive Trademark License and that the ownership, registration, restrictions on use, and enforcement matters relative to the Licensed Marks are governed by Articles 2 through 5, and 7 of the Exclusive Trademark License. Without prejudice to the foregoing (especially the principle that all legal and beneficial ownership of Licensor IP, including Licensed Marks, vested in Licensor) and subject to the terms of Article 8 of the Exclusive Trademark License, Licensor shall register (in the name of Licensor) in the Territory the applicable Licensed Mark(s) selected by Licensor for Commercialization of the Products in the Field in the Territory. Licensee shall Develop, Manufacture and Commercialize the Products in the Field in the Territory under the Licensed Marks; provided that if such Licensed Mark is rejected or refused by a Regulatory Authority in the Territory, the SC, pursuant to Article 3, will determine an alternative trademark to serve as the Licensed Mark for the applicable Product in the Field in the Territory, the decision of which shall be given without undue delay. Licensee shall, and shall require that its Designated Parties will, use the Licensed Marks solely in connection with the Development and Commercialization of Products in the Field in the Territory and strictly in accordance with the terms of the Exclusive Trademark License and the Brand Guidelines. Notwithstanding the foregoing, Licensee acknowledges that all use of the Licensed Marks and all rights and goodwill attached to or arising out of such use, shall accrue to the benefit of Licensor. Licensee shall not, and shall require that its Designated Parties will not, engage in any action that will interfere with or diminish Licensor’s rights or goodwill in any Licensed Marks.

Article 10

Representations And Warranties; covenants

10.1          Mutual Representations and Warranties. Each Party hereby represents and warrants to the other Party as follows as of the Effective Date:

(a)               Corporate Existence. It is a company or corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it is incorporated.

(b)              Corporate Power, Authority and Binding Agreement. (i) It has the corporate power and authority and the legal right to enter into this Agreement and the Exclusive Trademark License, and perform its obligations hereunder and thereunder; (ii) it has taken all necessary corporate action on its part required to authorize the execution and delivery of this Agreement and the Exclusive Trademark License, and the performance of its obligations hereunder and thereunder; and (iii) this Agreement and the Exclusive Trademark License have been duly executed and delivered on behalf of such Party, and each constitutes a legal, valid, and binding obligation of such Party that is enforceable against it in accordance with the terms of each such agreement, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights and remedies generally.

10.2          Additional Representations and Warranties of Licensor. Except as would not have a material adverse effect on the rights or interests of Licensee under this Agreement or the Exclusive Trademark License, Licensor hereby represents and warrants to Licensee as follows as of the Effective Date:

(a)               Sole Ownership; Encumbrances. It is the sole owner of, or otherwise has the right to grant the licenses to Licensee hereunder of, the Licensor IP existing as of the Effective Date.

(b)              No Conflicting Agreements. Neither it nor, to its knowledge, any of its Affiliates has entered into any agreement or any other transaction with any Third Party or Affiliate that conflicts with Licensor’s undertakings under this Agreement or the Exclusive Trademark License, or granting any right, interest or claim in or to, any Licensor IP that would conflict with the licenses to Licensee as purported to be granted pursuant to this Agreement or the Exclusive Trademark License,.

(c)               Notice of Infringement or Misappropriation. Neither it nor, to its knowledge, any of its Affiliates has received any written notice from any Third Party asserting the Product Liability against Licensor or alleging that the Development, Manufacture, or Commercialization of the Products or the practice of the Licensor IP, in each case in connection with the Development, Manufacture, or Commercialization of the Products in the Field in the Territory or any other jurisdiction would infringe, misappropriate or otherwise violate any Intellectual Property Rights owned or controlled by a Third Party.

(d)              Compliance with Law. Licensor and, to its knowledge, its Affiliates, and its subcontractors, and their respective consultants and agents, have conducted all research and development of the Products in the Territory prior to the Effective Date in compliance with all Applicable Laws, including GLP and GCP as applicable.

(e)               Product Warranty. The Finished Products or Bulk Products supplied to Licensee hereunder shall, at the time of delivery pursuant to Article 7.3(b), conform to the specifications and Applicable Laws, and such Finished Products or Bulk Products shall be manufactured in accordance with the requirements of the relevant Regulatory Authorities with respect to drug manufacturing and any GMP regulations applicable to the manufacture of the Product, especially the FDA’s requirements. Licensor further warrants that the Finished Products or Bulk Products supplied to Licensee (or its Affiliates) under this Agreement shall be manufactured in a GMP compliant facility.

(f)                No Proceeding. There are no pending, and, to its knowledge, no threatened in writing, investigations, inquiries, actions, suits or proceedings against Licensor or its Affiliates in the Territory involving the Products or relating to the transactions contemplated by this Agreement or the Exclusive Trademark License.

10.3          Additional Representations and Warranties of Licensee. Except as would not have a material adverse effect on the rights or interests of Licensor under this Agreement or the Exclusive Trademark License, Licensee hereby represents and warrants to Licensor as follows as of the Effective Date:

(a)               No Conflicting Agreements. Neither it nor, to its knowledge, any of its Affiliates has entered into any agreement or any other transaction with any Third Party or Affiliate that conflicts with its undertakings under this Agreement or the Exclusive Trademark License.

(b)              No Suits or Proceedings. There are no suits, claims, or proceedings pending, or, to its knowledge, threatened against it or any of its Affiliates in any court or by or before any governmental body or agency which to its knowledge would have a material adverse effect on its ability to perform its obligations under this Agreement or the Exclusive Trademark License.

(c)               Requisite Approvals and Expertise. It has, and will at all times throughout the Term have, the requisite approvals, permits, licenses, expertise, resources, experience and skill reasonably required to perform its obligations under this Agreement and the Exclusive Trademark License.

10.4          Compliance with Law. Each Party shall comply in all material aspects with all Applicable Laws in the course of performing its obligations and exercising its rights under this Agreement and the Exclusive Trademark License. Without limiting the foregoing, Licensee is aware of, and agrees to and shall cause its Affiliates, and Designated Parties to abide by, the obligations imposed by the Anti-Corruption Laws. Licensee agrees that no portion of monies paid or payable to itself, its Affiliates and its third-party suppliers and contractors, if applicable, in connection with its duties hereunder shall, directly or indirectly, be paid, received, transferred, loaned, offered, promised or furnished to or for the use of (i) any Government or Public Official (as defined below); (ii) any political party, party official or candidate for public or political office; (iii) any person while knowing or having reason to know that all or a portion of the value will be offered, given, or promised, directly or indirectly, to anyone described in items (i) or (ii) above, for the purpose of obtaining or retaining business for or with, or directing business to, any Person. For the purposes of this Agreement, “Government or Public Official” means any officer or employee or anyone acting for or on behalf of: a government, quasi-government or any department or agency thereof; a public international organization or any department, agency or institution thereof, or a government-owned or controlled company, corporation, institution, partnership or other entity

10.5          No Other Representations or Warranties. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT AND THE EXCLUSIVE TRADEMARK LICENSE, NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, ARE MADE OR GIVEN BY OR ON BEHALF OF A PARTY, AND ALL REPRESENTATIONS AND WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED.

Article 11

Indemnification and Limitation of Liability

11.1          Indemnification by Licensor. Licensor shall defend, indemnify, and hold Licensee and its Affiliates and their respective officers, directors, employees, and agents (the “Licensee Indemnitees”) harmless from and against any and all losses, damages, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses) (collectively, “Losses”) in connection with any and all claims, demands, suits, or proceedings of Third Parties (excluding Licensee’s Designated Parties) (collectively, “Third Party Claims”) to the extent that such Third Party Claims arise out of, are based on, or result from (a) the Development, manufacture or Commercialization of the Products by or on behalf of Licensor or its Affiliate or licensees (other than Licensee, its Affiliates, and Designated Parties), including Product Liabilities claims, in each case occurring outside of the Territory; (b) the breach of any of Licensor’s obligations under this Agreement or the Exclusive Trademark License, including Licensor’s representations and warranties set forth herein or therein, (c) the use of the Licensed Marks by Licensee or Designated Parties in accordance with the terms of this Agreement and the Exclusive Trademark License infringes a Third Party’s trademark or other proprietary rights in the Territory, or (d) the willful misconduct, gross negligence or violations of Applicable Laws of Licensor, its Affiliates, its licensees (other than Licensee, its Affiliates, and Designated Parties), or the officers, directors, employees, or agents of Licensor or its Affiliates, its licensees (other than Licensee, its Affiliates, and Designated Parties). The foregoing indemnity obligation shall not apply to the extent that any Third Party Claim arises from, is based on, or results from any activity or occurrence for which Licensee is obligated to indemnify the Licensor Indemnitees under Article 11.2.

11.2          Indemnification by Licensee. Licensee shall defend, indemnify, and hold Licensor and its Affiliates and their respective officers, directors, employees, and agents (the “Licensor Indemnitees”) harmless from and against any and all Losses in connection with any and all Third Party Claims to the extent that such Third Party Claims arise out of, are based on, or result from (a) the breach of any of Licensee’s obligations under this Agreement or the Exclusive Trademark License, including Licensee’s representations and warranties set forth herein or therein, or (b) the willful misconduct, gross negligence or violations of Applicable Laws of Licensee, its Affiliates, and Designated Parties or the officers, directors, employees, or agents of Licensee or its Affiliates, and Designated Parties, or (c) the use of the Licensed Marks by Licensee and Designated Parties, except to the extent the Licensor is required to indemnify Licensee pursuant to Article 11.1; (d) the Development, Manufacture or Commercialization of the Products by or on behalf of Licensee (including its Affiliates, and Designated Parties), including Product Liabilities claims, in each case occurring in the Territory. The foregoing indemnity obligation shall not apply to the extent that any Third Party Claim arises from, is based on, or results from any activity or occurrence for which Licensor is obligated to indemnify the Licensee Indemnitees under Article 11.1.

11.3          Indemnification Procedures. The Party claiming indemnity under this Article 11 (the “Indemnified Party”) shall give written notice to the Party from whom indemnity is being sought (the “Indemnifying Party”) promptly after learning of such Third Party Claim and shall offer control of the defense of such Third Party Claim to the Indemnifying Party. The Indemnified Party shall provide the Indemnifying Party with reasonable assistance, at the Indemnifying Party’s expense, in connection with the defense of the Third Party Claim for which indemnity is being sought. The Indemnified Party may participate in and monitor such defense with counsel of its own choosing at its sole expense; provided, however, the Indemnifying Party shall have the right to assume and conduct the defense of the Third Party Claim with counsel of its choice. The Indemnifying Party shall not settle any Third Party Claim without the prior written consent of the Indemnified Party, not to be unreasonably withheld, unless the settlement involves only the payment of money. The Indemnified Party shall not settle or compromise any such Third Party Claim without the prior written consent of the Indemnifying Party, and the Indemnifying Party shall have no obligation to indemnify the Indemnified Party with respect to any Third Party Claim settled or compromised without the Indemnifying Party’s consent.

11.4          Mitigation of Loss. Each Indemnified Party shall take and shall procure that its indemnitees take all such reasonable steps and action as are reasonably necessary or as the Indemnifying Party may reasonably require in order to mitigate the Third Party Claims and Losses under this Article 11. Nothing in this Agreement or the Exclusive Trademark License shall or shall be deemed to relieve any Party of any common law or other duty to mitigate any losses incurred by it.

11.5          LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT OR THE EXCLUSIVE TRADEMARK LICENSE, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS ARTICLE 11.5 IS INTENDED TO OR SHALL LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER ARTICLE 11.1 OR 11.2, OR DAMAGES AVAILABLE FOR A PARTY’S BREACH OF ARTICLE 2.3 OR ARTICLE 12.

Article 12
Confidentiality

12.1          Confidentiality. Each Party agrees that, during the Term and for a period of ten (10) years thereafter (or, with respect to Licensor Know-How that constitutes a trade secret under Applicable Laws, for so long as such Licensor Know-How continues to constitute a trade secret under Applicable Laws), it shall keep strictly confidential and shall not publish or otherwise disclose and shall not use for any purpose other than as provided for in this Agreement or the Exclusive Trademark License (which includes the exercise of any rights or the performance of any obligations hereunder or thereunder) any Confidential Information of the other Party, except to the extent expressly authorized by this Agreement or the Exclusive Trademark License or otherwise agreed in writing by the Parties. The foregoing confidentiality and non-use obligations shall not apply to any portion of the other Party’s Confidential Information that the receiving Party can demonstrate by competent written proof:

(a)               was already known to the receiving Party or its Affiliate, other than under an obligation of confidentiality, at the time of disclosure by the other Party;

(b)              was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party;

(c)               became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving Party in breach of this Agreement;

(d)              was disclosed to the receiving Party or its Affiliate by a Third Party (in the case of Licensee as the receiving Party, excluding its Designated Parties) who has a legal right to make such disclosure and who did not obtain such information directly or indirectly from the other Party; or

(e)               was independently discovered or developed by the receiving Party or its Affiliate without access to or aid, application, use of the other Party’s Confidential Information, as evidenced by a contemporaneous writing.

12.2          Authorized Disclosure. Notwithstanding the obligations set forth in Article 12.1, a Party may disclose the other Party’s Confidential Information and the terms of this Agreement or the Exclusive Trademark License to the extent:

(a)               such disclosure is reasonably necessary (i) for the filing or prosecuting Patent rights as contemplated by this Agreement; (ii) for the filing or prosecuting of trademark rights as contemplated by the Exclusive Trademark License; (iii) to comply with the requirements of Regulatory Authorities or Applicable Laws with respect to obtaining and maintaining Regulatory Approval of the Products; or (iv) for the prosecuting or defending litigation as contemplated by this Agreement or the Exclusive Trademark License;

(b)              such disclosure is reasonably necessary to its Affiliates, employees, agents, consultants, contractors, and actual and potential licensees or sublicensees (but, in the case of Licensee, subject to Article 12.3) on a need-to-know basis for the purpose of performing its obligations or exercising its rights under this Agreement or the Exclusive Trademark License, including, with respect to Licensor, for the purpose of Development, manufacture, Commercialization or other exploitation of the Products outside the Territory or the Development of any indication outside the Field in the Territory (as long as such indication, once approved, will be automatically included in the Field and the rights or benefits granted to Licensee under this License will be accordingly extended to such indication) during the Term and worldwide after termination of this Agreement; provided that in each case, the disclosees are bound by written obligations of confidentiality and non-use consistent with those contained in this Agreement;

(c)               such disclosure is reasonably necessary to any bona fide potential or actual investor, acquiror, merger partner, or other financial or commercial partner for the sole purpose of evaluating or carrying out an actual or potential investment, acquisition or other business relationship; provided that in connection with such disclosure, such Party shall inform each disclosee of the confidential nature of such Confidential Information and obligate each disclosee in writing to treat such Confidential Information as confidential; or

(d)              such disclosure is reasonably necessary to comply with Applicable Laws, including regulations promulgated by applicable security exchanges, court order, administrative subpoena or order.

Notwithstanding the foregoing, in the event a Party is required to make a disclosure of the other Party’s Confidential Information pursuant to Article 12.2(a) or 12.2(d), such Party shall promptly notify the other Party of such required disclosure and shall use reasonable efforts to obtain, or to assist the other Party in obtaining, a protective order preventing or limiting the required disclosure.

12.3          CMC Data Limitation. Without limitation of any of the foregoing or the protections for CMC Data, Licensee shall adopt and implement reasonable procedures to limit the dissemination of Sensitive Information, including appropriate firewall procedures to prevent the disclosure of and use of Sensitive Information beyond the limited Licensee regulatory team members who are required to receive such information in order to prepare, submit, obtain or maintain a Regulatory Approval for the Product in the Field in the Territory or if access to CMC Data is otherwise necessary for regulatory or quality reasons to sell the Product in the Field in the Territory, segregating all Sensitive Information from its own information or materials or that of others (including Affiliates) in order to prevent commingling and securing all tangible embodiments of such Sensitive Information in a safe, locked file, or other suitable locked container, or on a secure, password-protected computer or in a locked room with restricted access when such items are not in use; not copying or otherwise duplicating any embodiments of the Sensitive Information, except as necessary to prepare, submit, obtain or maintain a Regulatory Approval for the Product in the Field in the Territory or if the copy or duplication of the CMC Data is otherwise necessary for regulatory or quality reasons to sell the Product in the Field in the Territory (provided that any such copies or duplications of such Sensitive Information shall be marked “confidential,” “proprietary,” or the like), and notifying Licensor immediately, and cooperating with Licensor as Licensor may reasonably request, upon any discovery of any loss or compromise of Sensitive Information. Notwithstanding the foregoing, to the extent any Sensitive Information is subject to the exceptions set forth in Article 12.2, such Sensitive Information shall not be subject to this Article 12.3.

12.4          Publicity; Terms of Agreement.

(a)               The Parties agree that the terms of this Agreement and the Exclusive Trademark License are the Confidential Information of both Parties, subject to the special authorized disclosure provisions set forth in this Article 12.4.

(b)              If either Party desires to make a public disclosure concerning the terms of this Agreement or the Exclusive Trademark License, such Party shall give prior advance notice of at least five (5) Business Day of the proposed text of such disclosure to the other Party for its prior review (except as otherwise provided herein). A Party commenting on such a proposed disclosure shall provide its comments, if any, within three (3) Business Days after receiving the proposed disclosure for review. In addition, where required by Applicable Laws, including regulations promulgated by applicable security exchanges, such Party shall have the right to make a press release or other public disclosure regarding the achievement of each milestone under this Agreement as it is achieved, the achievements of Regulatory Approval, including product pricing and reimbursement, in the Field in the Territory as they occur, or the occurrence of other events that affect either Party’s rights or obligations under this Agreement or the Exclusive Trademark License, in each case subject only to the review procedure set forth in the preceding sentences. In relation to the other Party’s review of such an announcement, such other Party may make specific, reasonable comments on such proposed press release within the prescribed time for commentary, but such other Party’s approval shall not be required. Neither Party shall be required to seek the permission of the other Party to repeat any information regarding the terms of this Agreement or the Exclusive Trademark License that has already been publicly disclosed by such Party, or by the other Party, in accordance with this Article 12.4.

(c)               The Parties acknowledge that either or both Parties or their Affiliates may be obligated to file under Applicable Laws a copy of this Agreement and/or the Exclusive Trademark License with the applicable stock exchange or other Governmental Authorities. Each Party and its Affiliates shall be entitled to make such a required filing, provided that it requests confidential treatment of the commercial terms and sensitive technical terms hereof and thereof to the extent such confidential treatment is reasonably available. In the event of any such filing, each Party will provide the other Party with a copy of this Agreement and, if applicable, the Exclusive Trademark License marked to show provisions for which such Party or its Affiliate intends to seek confidential treatment and shall reasonably consider and incorporate the other Party’s timely comments thereon to the extent consistent with the legal requirements, with respect to the filing Party or Affiliate, governing disclosure of material agreements and material information that must be publicly filed.

12.5          Publications and Presentations. The SC will coordinate the plans of the Parties regarding planned publication of Data and results of clinical or pre-clinical studies of the Product performed by or on behalf of Licensee in the Territory into a single schedule that will be shared with the Parties. With respect to publication in any academic journal, authorship of any publication shall be determined based on the accepted standards used in peer-reviewed, academic journals at the time of the proposed publication. Notwithstanding the forgoing, each Party recognizes the mutual interest in obtaining valid Patent protection and in protecting business interests and trade secret information. Consequently, except for disclosures permitted pursuant to Article 12.2, if Licensee, its Affiliates, Designated Parties or their employees or consultants wishes to publish or present to any Third Party, results of the Development work, or any research results, or any Data or other clinical information about a Product being Developed or Commercialized in the Field in the Territory pursuant to this Agreement, it shall deliver to Licensor a copy of the proposed written publication or an outline of an oral disclosure as soon as practicable and as least thirty (30) days prior to submission for publication or presentation. Licensor shall notify Licensee promptly after of receipt of such proposed publication whether such draft publication contains (a) Confidential Information of Licensor, or (b) information that if published would have an adverse effect on any Licensor Patent or any Invention. Licensor shall have the right to (i) propose modifications to the publication or presentation for Patent reasons, trade secret reasons, confidentiality reasons or business reasons or (ii) request a reasonable delay in publication or presentation in order to protect patentable information. If Licensor requests a delay to protect patentable information, Licensee shall delay submission or presentation for a period not to exceed sixty (60) days to enable Patent applications protecting such information to be filed in accordance with the terms of this Agreement. In addition, upon Licensor’s request, Licensee shall remove Confidential Information of Licensor prior to submission of the publication or presentation.

12.6          Equitable Relief. Each Party acknowledges that its breach of this Article 12 will cause irreparable harm to the other Party, which cannot be reasonably or adequately compensated in damages in an action at law. By reasons thereof, each Party agrees that the other Party shall be entitled, in addition to any other remedies it may have under this Agreement or the Exclusive Trademark License or otherwise, to preliminary and permanent injunctive and other equitable relief to prevent or curtail any actual or threatened breach of the obligations relating to Confidential Information set forth in this Article 12 by the other Party.

Article 13
Term And Termination

13.1          Term. This Agreement shall commence on the Effective Date and shall continue in force and effect until the twentieth (20^th) anniversary of the Effective Date (the “Term”) unless terminated earlier by mutual written agreement of the Parties or pursuant to Article 13.2, 13.3 or 13.5. This Agreement may be further extended for additional three (3)-year terms each if neither Party is found to be in material breach of this Agreement (all such additional terms, collectively with the Initial Term, the “Term”).

13.2          Termination for Breach.

(a)               Subject to the terms and conditions of this Article 13.2, a Party (the “Non-Breaching Party”) shall have the right, in addition to any other rights and remedies, to terminate this Agreement in the event the other Party (the “Breaching Party”) is in material breach of its obligations under this Agreement or the Exclusive Trademark License. Licensee agrees that the breach of the obligation of Article 2.3(a)(i), 2.3(b), 4.1(a), 4.1(b), 6.2(a), 6.2(b), 8.1, 8.3 or 8.4 of this Agreement, or Article 2 of the Exclusive Trademark License shall be deemed as a material breach of Licensee.

(b)              The Non-Breaching Party shall first provide written notice to the Breaching Party, which shall identify with particulars the alleged breach. With respect to material breaches of any payment provision hereunder, the Breaching Party shall have a period of thirty (30) days after such written notice is provided to cure such breach. With respect to breach of the MAP Policy referenced in Article 6.9, Licensee acknowledges that it has received a copy of the MAP Policy attached to this Agreement as Exhibit 6.9, which provides that Licensee shall have a period of five (5) days after the receipt of Licensor’s written notice to cure such breach; provided that Licensor shall have the right to terminate this Agreement if there is a second breach of the MAP Policy in any twelve (12) month period. With respect to all other material breaches, the Breaching Party shall have a period of sixty (60) days after such written notice is provided to cure such breach. Notwithstanding the foregoing, if a Party gives to the other Party a notice pursuant to this Article 13.2 of a material breach by such other Party, and such other Party provides notice during the applicable cure period set forth above that such other Party disputes the basis for termination pursuant to this Article 13.2, then this Agreement shall not terminate unless and until an arbitrator issues a final award pursuant to Article 14.2 upholding such basis for termination provided that the resolution of such dispute is promptly commenced and diligently pursued by the non-terminating Party.

13.3          Termination for Insolvency. Any Party may terminate this Agreement effective immediately by written notice to the other Party if the other Party is subject to an Insolvency Event.

13.4          Change of Control. Subject to Article 2.3(b), this Agreement shall remain unchanged and valid as it is in the event of Change of Control of either Party unless both Parties agree otherwise.

13.5          Termination for Patent or Trademark Challenge. Except to the extent the following is unenforceable under the laws of a particular jurisdiction, Licensor may terminate this Agreement in its entirety, immediately if Licensee or its Affiliates, or Designated Parties, individually or in association with any other person or entity, commences a legal action challenging the validity, enforceability or scope of any Patents or trademarks owned or Controlled by Licensor anywhere in the world and fails to cure such breach within thirty (30) days after receipt of Licensor’s written notice.

13.6          Material Adverse Event. Each Party shall have a right to either terminate, in part or in whole, this Agreement or the Exclusive Trademark License or request a good-faith negotiation for an amendment to the relevant articles of this Agreement when any Material Adverse Event occurs (for clarity, neither Party shall have any obligation to agree to any such amendment).

13.7          Effects of Expiration and Termination.

13.7.1    General Effects. Upon any expiration or termination of this Agreement:

(a)               Licenses. Subject only to Licensee’s right to sell off existing inventory in accordance with clause (c) below, on the effective date of expiration or termination of this Agreement, all licenses and other rights granted by Licensor to Licensee under this Agreement (including any Sublicenses granted thereunder) shall terminate.

(b)              Confidential Information. On the effective date of expiration or termination, each Party shall promptly return or destroy all Confidential Information of the other Party (subject to Licensee’s right to retain Regulatory Materials pursuant to Article 13.7.2(a)); provided, however, that, subject to continuing compliance with Article 12, Licensor may retain any Confidential Information to the extent necessary to exercise rights retained by Licensor under this Agreement following expiration and termination.

(c)               Inventory; Wholesalers. Licensor shall have the right, but not the obligation, to purchase any and all of the inventory of the Product held by Licensee or its Affiliates as of the date of expiration or termination, at a price equal to the Supply Price paid by Licensee to Licensor for such inventory, and to the extent Licensor does not purchase such Product inventory, Licensee will have the continued right to sell the Product in its inventory for no more than six (6) month after the date of expiration or termination; provided, however, that Licensee’s obligations under this Agreement with respect to the Product that Licensee sells, including the obligation to remit royalties to Licensor hereunder, shall continue in full force and effect; and provided further that during such inventory sell off period, Licensee shall not sell the Product at a price that is lower than the average price of the Product sold during the one (1) year period prior to expiration or termination.

(d)              Survival. Notwithstanding anything to the contrary, the following provisions shall survive any expiration or termination of this Agreement as described in this Article 13: Articles 8.7 and 8.8, Article 9.1(a) and (b), Article 10.4, Article 11 Article 12, Article 13.7, 13.8 and 13.9, Article 14, and Article 15.3.

13.7.2    Additional Effects of Termination of Agreement for Material Breach of Licensee. In the event that this Agreement expires pursuant to Article 13.1 or this Agreement is terminated by Licensor for the uncured material breach of License as defined in the Article 13.2, then the following effects of termination shall apply (in addition to those set forth in Article 13.7.1 above):

(a)               Regulatory Materials. Licensee shall, as instructed by Licensor, either (i) if applicable and if permitted by Applicable Laws, promptly transfer and assign to Licensor or its designee all Regulatory Materials, including each Regulatory Approval that is owned or Controlled by Licensee or its or Designated Party with respect to the Product(s), (ii) terminate or withdraw any Regulatory Materials, including Regulatory Approval that is Controlled by Licensee or its or Designated Party with respect to the Product(s), and/or (iii) continue to hold any such Regulatory Materials (including Regulatory Approval) for the sole benefit of Licensor or its designee, in each case in accordance with Applicable Laws. Prior to the effective date of termination and thereafter, Licensee shall, as instructed by Licensor, take all action necessary to, and shall use all reasonable efforts to, transfer, terminate or withdraw (as the case may be) all such Regulatory Materials (including Regulatory Approvals) on or promptly after the effective date of termination. If transfer or assignment of any Regulatory Materials (including Regulatory Approval) to Licensor or its designee is not permitted by Applicable Law, then, at Licensor’s request, Licensee shall continue to hold such Regulatory Materials (including Regulatory Approval) for the sole benefit of Licensor or its designee, and shall appoint Licensor or its designee as its exclusive distributor (with the right to subcontract and appoint subdistributors) under such Regulatory Approval for the Product in the Territory and also as its agent to communicate with the applicable Regulatory Authority with respect to such Regulatory Materials, until such time Licensor or its designee files its own Regulatory Materials and obtain its own Regulatory Approval for the Product in the Territory. Licensee may retain copies of all Regulatory Materials to the extent required by Applicable Laws or for so long as may be required for Licensee to perform any of its surviving obligations under this Agreement. All Regulatory Materials subject to this Article 13.7.2(a) shall be the Confidential Information of Licensor and, to the extent Licensee retains such Regulatory Materials in accordance with this Article 13.7.2(a), Licensee shall be subject to and shall comply with Article 12 with respect to such Regulatory Materials.

(b)              Transition Assistance. Licensee shall, and shall cause its Designated Parties to, reasonably cooperate with Licensor or its designee to facilitate orderly transition of the Development, Manufacture (if applicable) and Commercialization of the Product in the Territory to Licensor or its designee, including (i) assigning or amending as appropriate, upon request of Licensor, any agreements or arrangements with Third Party vendors (including distributors) to Develop, Manufacture or Commercialize the Product in the Territory or, to the extent any such Third Party agreement or arrangement is not assignable to Licensor, reasonably cooperating with Licensor to arrange to continue to provide such services for a reasonable time after termination; (ii) to the extent that Licensee or its Affiliate is performing any activities described above in (i), reasonably cooperating with Licensor to transfer such activities to Licensor and continuing to perform such activities on Licensor’s behalf for a reasonable time after termination until such transfer is completed. Without limiting the foregoing, if Licensee Manufactures and Commercializes the Product under the Localization Paradigm, Licensee shall continue to Manufacture and supply the Product to Licensor on the same supply terms as stated in this Agreement until Licensor establishes its own Manufacture capability in the Territory.

(c)               Ongoing Clinical Trial. If at the time of such termination, any clinical trials for the Product are being conducted by or on behalf of Licensee, its Designated Parties, then, at Licensor’s election on a trial-by-trial basis: (i) Licensee shall, and shall cause its Designated Parties to, fully cooperate with Licensor to transfer the conduct of all such clinical trials to Licensor or its designee, and Licensor shall assume any and all liability and costs for such clinical trials incurred after the effective date of such termination, provided that Licensee shall continue to bear all costs and expenses incurred in connection with the conduct of such clinical trials until the effective date of such termination; or (ii) Licensee shall, and shall cause its Designated Parties to, at its own cost and expense, orderly wind down the conduct of any such clinical trial which is not assumed by Licensor under clause (i).

(d)              Licensor IP. For clarity, Licensor shall retain ownership in all right, title and interest in and to all Licensor IP, including Licensed Marks.

13.7.3    Additional Effect of Termination of Agreement For Material Breach of Licensor. In the event that this Agreement is terminated by Licensee for the uncured material breach of Licensor in accordance with this Agreement, then without prejudice to other remedies entitled by Licensee under the Applicable Laws, Licensor shall not, either directly or indirectly, initiate or conduct any Commercialization activities with respect to the Product(s) in the Field in the Territory within two (2) years from the termination by Licensee.

13.8          Accrued Rights and Obligations. Termination of this Agreement shall not affect rights or obligations of the Parties under this Agreement that have accrued prior to the date of termination.

13.9          Not Sole Remedy. Termination is not the sole remedy under this Agreement and, whether or not termination is effected and notwithstanding anything contained in this Agreement to the contrary, all other remedies shall remain available except as otherwise agreed upon and set forth herein.

Article 14
Dispute Resolution

14.1          Dispute. The Parties recognize that disputes as to certain matters may from time to time arise that relate to either Party’s rights or obligations hereunder. It is the objective of the Parties to establish procedures to facilitate the resolution of disputes arising under this Agreement in an expedient manner by mutual cooperation. To accomplish this objective, the Parties agree that, if a dispute arises under this Agreement or the Exclusive Trademark License, including any alleged breach of, or any issue relating to the interpretation or application of, this Agreement or the Exclusive Trademark License, but excluding any dispute at the SC that is subject to the provisions of Article 3 and Exhibit E (“Dispute”), and the Parties are unable to resolve such Dispute within thirty (30) days after such Dispute is first identified by either Party in writing to the other, the Parties shall refer such Dispute the Executive Officers for attempted resolution by good faith negotiations within thirty (30) days after such notice is received, which negotiations shall include at least one (1) in person meeting of the Executive Officers within twenty (20) days after such notice is received. If the negotiations by the Executive Officers fail to achieve a mutually acceptable resolution, the Dispute shall be finally and exclusively settled by binding arbitration administered by the Hong Kong International Arbitration Centre (“HKIAC”) in accordance with its Commercial Rules as provided in Article 14.2.

14.2          Arbitration.

(a)               If either Party intends to commence binding arbitration of a Dispute that has not been resolved in accordance with Article 14.1, such Party shall file its demand for arbitration (“Demand”), which shall include a statement of the issues to be resolved, with the Hong Kong office of the HKIAC. The filing Party shall simultaneously deliver a copy of the Demand to the other Party. Within thirty (30) days after receipt of the Demand, the other Party may, by written notice to the HKIAC and the Party that initiated the arbitration, add additional issues to be resolved. All arbitration proceedings shall be held in Hong Kong, unless the Parties mutually agree in writing upon a different location.

(b)              Promptly following receipt of the Demand, the Parties shall meet and discuss in good faith and agree on three (3) arbitrators to resolve the Dispute, which arbitrators shall have experience with respect to the matter(s) to be arbitrated. If the Parties cannot agree on three (3) arbitrators within thirty (30) days of the Demand, then such constitution of arbitrators shall be left to the decision by the applicable arbitration rules of the HKIAC. The arbitrators shall apply the governing law set forth in Article 14.5. The Parties shall instruct the arbitrators to: (i) conclude the arbitration as soon as practicable (and in any event within six (6) months after selection of the arbitrators), and (ii) deliver a written, reasoned opinion stating the arbitrators’ decision within thirty (30) days after the arbitration hearing is concluded.

(c)               The Parties shall share equally (50% each) the administrative charges, arbitrators’ fees and related expenses of arbitration, but each Party shall pay its own attorney’s fees incurred in connection with such arbitration; provided however, if the arbitrators specifically determine that one Party prevailed clearly and substantially over the other Party, then the arbitrators may require the non-prevailing Party to pay the prevailing Party’s reasonable attorney’s fees and expert witness costs and arbitration costs.

(d)              Either Party may apply to the arbitrators for, or may seek from any court having jurisdiction, interim injunctive or provisional relief as necessary to protect the rights or property of such Party until the arbitration award is rendered or the controversy is otherwise resolved. The arbitrators may grant legal, equitable and monetary relief consistent with the terms of this Agreement. Judgment upon the award rendered by the arbitrators shall be binding, final and non-appealable (absent manifest error) and may be entered and enforced in any court having jurisdiction thereof.

14.3          Injunctive Relief. Notwithstanding anything to the contrary in this Article 14, either Party may apply to any court having jurisdiction for interim injunctive relief (including a temporary restraining order or preliminary injunction) to protect a Party’s interests or preserve the status quo during the pendency of a dispute between the Parties.

14.4          Intellectual Property Disputes. Notwithstanding Article 14.2, in the event that a Dispute arises with respect to the validity, scope, enforceability or ownership of any Patent, trademark or other Intellectual Property Rights, and such Dispute is not resolved in accordance with Article 14.1, such Dispute shall not be submitted to an arbitration proceeding in accordance with Article 14.2, unless otherwise agreed by the Parties in writing, and instead, either Party may initiate litigation in a court of competent jurisdiction in any Market or country in which such rights apply.

14.5          Governing Law. This Agreement and all disputes arising out of or related to this Agreement or any breach hereof shall be governed by and construed under the laws of the State of New York without reference to conflict of laws principles. The application of the U.N. Convention on Contracts for the International Sale of Goods is excluded.

Article 15
Miscellaneous

15.1          Entire Agreement; Amendment. This Agreement, together with the Exclusive Trademark License including the Exhibits attached hereto and thereto, sets forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto with respect to the subject matter hereof and supersedes, as of the Effective Date, all prior and contemporaneous agreements and understandings between the Parties with respect to the subject matter hereof, including the Confidentiality Agreement; provided, that all information shared by the Parties or their Affiliates pursuant to the Confidentiality Agreement shall be deemed Confidential Information under this Agreement, and the use and disclosure thereof shall be governed by Article 12 hereof. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth in this Agreement and the Exclusive Trademark License. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party. In the event and to the extent that there is a conflict between the provisions of this Agreement relating to the Development, Manufacture and Commercialization of the Products and the provisions of the Exclusive Trademark License, the provisions of this Agreement shall control, but, for the avoidance of doubt, not with regard to any use of any Licensed Marks, including any requirements regarding the use of the Licensed Marks in connection with the promotion, marketing, and Commercialization of the Products, in which case the provisions of the Exclusive Trademark License shall control.

15.2          Force Majeure. Both Parties shall be excused from the performance of their obligations under this Agreement to the extent that such performance is prevented by force majeure and the nonperforming Party promptly provides notice of the prevention to the other Party. Such excuse shall be continued so long as the condition constituting force majeure continues and the nonperforming Party takes reasonable efforts to remove the condition. For purposes of this Agreement, force majeure shall include conditions beyond the reasonable control of the applicable Party, including an act of God, war, civil commotion, terrorist act, labor strike or lock-out, epidemic, pandemic, failure or default of public utilities or common carriers, and destruction of production facilities, equipment or materials by fire, earthquake, storm or like catastrophe (but excluding the action of Governmental Authority). Notwithstanding the foregoing, a Party shall not be excused from making payments owed hereunder because of a force majeure affecting such Party. If a force majeure persists for more than ninety (90) days, the Party not claiming relief under this force majeure provision shall be entitled to terminate this Agreement upon written notice.

15.3          Notices. Any notice required or permitted to be given under this Agreement shall be in writing, shall specifically refer to this Agreement, and shall be addressed to the appropriate Party at the address specified below or such other address as may be specified by such Party in writing in accordance with this Article 15.3, and shall be deemed to have been given for all purposes (a) when received, if hand-delivered or sent by a reputable courier service, or (b) five (5) Business Days after mailing, if mailed by first class certified or registered airmail, postage prepaid, return receipt requested.

If to Licensor:

Yishai Zohar

Chief Executive Officer

Gelesis Inc.

501 Boylston Street, Suite 6102

Boston, MA 02116

[***]

With copies to (which shall not constitute notice):

David Abraham

General Counsel

Gelesis Inc.

501 Boylston Street, Suite 6102

Boston, MA 02116

[***]

If to Licensee:

CMS Bridging DMCC
Attention: Dr. Huaizheng Peng

Unit No: 205B, JBC1, Plot No: JLT-PH1-G2A,

Jumeirah Lakes Towers,

Dubai
[***]

With copies to (which shall not constitute notice):

CMS Bridging DMCC

Attention: Ms. Wu Sanyan (Aliciya)

Unit No: 205B, JBC1, Plot No: JLT-PH1-G2A,

Jumeirah Lakes Towers,

[***]

15.4          Assignment. This Agreement may not be assigned or otherwise transferred, nor may any right or obligation hereunder be assigned or transferred, by either Party without the prior written consent of the other Party. Notwithstanding the foregoing, either Party may, without consent of the other Party, assign this Agreement and its rights and obligations hereunder in whole or in part to an Affiliate of such Party, or in whole to its successor in interest in connection with the sale of all or substantially all of its business or assets to which this Agreement relates. Any attempted assignment not in accordance with the foregoing shall be null and void and of no legal effect. Any permitted assignee shall assume all assigned obligations of its assignor under this Agreement. The terms and conditions of this Agreement shall be binding upon, and shall inure to the benefit of, the Parties and their respected successors and permitted assigns.

15.5          Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

15.6          Severability. If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, the provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

15.7          No Waiver. Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such Party’s rights to the future enforcement of its rights under this Agreement, except with respect to an express written and signed waiver relating to a particular matter for a particular period of time.

15.8          Independent Contractors. Each Party shall act solely as an independent contractor, and nothing in this Agreement shall be construed to give either Party the power or authority to act for, bind, or commit the other Party in any way. Nothing herein shall be construed to create the relationship of partners, principal and agent, or joint-venture partners between the Parties.

15.9          English Language. This Agreement was prepared in the English language, which language shall govern the interpretation of, and any dispute regarding, the terms of this Agreement.

15.10      Counterparts. This Agreement may be executed in counterparts, all of which taken together shall be regarded as the same instrument. Each Party may execute this Agreement in Adobe™ Portable Document Format (PDF) sent by electronic mail. PDF signatures of authorized signatories of the Parties will be deemed to be original signatures, will be valid and binding upon the Parties, and, upon delivery, will constitute due execution of this Agreement.

[Signature Page Follows]

In Witness Whereof, the Parties have executed this License, Collaboration and Supply Agreement by their duly authorized officers as of the Effective Date.

Exhibit A

PRODUCTS

Product: The medical device product cleared as PLENITY™ (also known as Gelesis100), with a Device Classification Name of Ingested, Transient, Space Occupying Device For Weight Management And/Or Weight Loss, and a De Novo number of DEN180060. PLENITY™ is an ingested, transient, space occupying device using the specific formulation of hydrogel particles cleared by FDA on 12 April 2019, wherein the specific formulation of hydrogel particles is made from carboxymethyl cellulose sodium salt cross-linked by citric acid, for weight management and cleared by the FDA to aid in weight management in overweight and obese adults with a Body Mass Index (BMI) of 25 - 40 kg/m2, when used in conjunction with diet and exercise. The novel and proprietary biocompatible hydrogel particles are engineered to rapidly absorb and release water at specific locations in the gastrointestinal tract. The hydrogel particles are manufactured through a multi-step, proprietary aqueous process using starting components carboxymethylcellulose (CMC) sodium salt and citric acid. In the Finished Product the hydrogel particles are contained within a hard capsule containing thousands of hydrogel particles (approximately 750 mg); each particle is approximately the size of a grain of salt [***]

Bulk Product: The bulk (unencapsulated) hydrogel particulate material as cleared and used in PLENITY™.

Finished Product: The Product as cleared as PLENITY™ encapsulated and in its cleared packaging (as updated). The PLENITY™ capsules are commercialized in primary and secondary packaging which protect the product from damage, ensure its stability over the labeled shelf life, and allow for convenient storage of weekly and monthly supplies. The primary packaging of Plenity is a peelable blister (Pod) containing 3 Gelesis100 capsules. The pods consist of a cavity sealed by a foil, and have a pod diameter of 45 mm and a pod height of 9.2 mm. The first level of secondary packaging is a tube that contains a weekly supply of 14 Pods and is closed by a screw-on cap. The second level of secondary packaging is a cardboard box which contains four tubes (supply for 4 weeks of therapy, 56 Pods) and the patient and physician instructions for use packaging insert. The lid of the box is secured to the bottom part of the box with two tamper-proof tape seals.

Exhibit B-

Initial Development Plan

Development of Plenity in China

[***]

[***]

Note:

a.       [***];

b.       [***].

a.       [***];

b.       [***].

c.       [***].

a.       [***].

b.       [***]

c.       [***].

exhibit c

eXHIBIT d

exclusive trademark license AGREEMENT

eXHIBIT E

TERMS OF REFERENCE OF the steering committee

The responsibilities of the SC shall be to:

Exhibit F

INITIAL SuppLy Ceiling FORECAST

Exhibit G

Key Regulatory Materials