Exhibit 10.1

 

PORTIONS OF THIS AGREEMENT WERE OMITTED AND HAVE BEEN FILED

SEPARATELY WITH THE SECRETARY OF THE COMISSION PURSUANT TO AN

APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE

SECURITIES EXCHANGE ACT OF 1934; [***] DENOTES OMISSIONS

Exclusive Distribution Agreement

 

Party A: HPGC Medical Co., Ltd.

Legal representative: Zhu Weidong

Address: No. 418 Hayao Road, Daoli District, Harbin, Heilongjiang Province, the
People’s Republic of China

 

Party B: Israel Wize Pharma Ltd.

Legal representative:

Address: Hanagar 5 St, Hod HaSharon, Israel.

 

Whereas Party B has been granted a license with respect to the Products (as
defined below) in the Territory (as defined below), and further, Party A has
valuable experience and good reputation in the Territory, and Party B has agreed
to appoint Party A as an exclusive distributor of the Products in the Territory,
therefore, the Parties have, based on the principle of voluntary, equality,
fairness, honesty and good faith, through amicable negotiation, agreed as
follows:

 

1.Definitions

 

1.1“Affiliate” means any entity that, directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
as applicable, a Party. For the purpose of this definition, “control” means (a)
the possession, directly or indirectly, of the power to direct the management or
policies of an entity, whether through the ownership of voting securities or
voting rights or by contract related to corporate governance; or (b) the
ownership, directly or indirectly, of more than fifty percent (50%) of the
voting shares of or other equity interests in such entity.

 

 

 

 

1.2“Agreement” means any and all written agreements entered into by and between
the Parties, including this Agreement and all appendices and schedules hereto
and any other documents to amend or supplement this Agreement at any time in the
future.

 

1.3“Client” means any end user, drug wholesaler or pharmacy in the Territory.

 

1.4“Manufacturer” means Pharma Stulln GmbH, the manufacturer of the Products, a
limited liability company incorporated in Germany with its registered address at
Werksstraße 3, 92551 Stulln, Germany, or other designated address, or any other
third party manufacturer agreed and appointed by both Parties (on the premise
that Party A shall be provided with the due diligence report of such third party
manufacturer).

 

1.5“Parties” mean Party A and Party B collectively.

 

1.6“Products” means LO2A, Lacrycon® formula (in Chinese: Lacrycon® “LO2A”), in
any package or dosage, including Uni-dose and Multi-dose, which are manufactured
by the Manufacturer and of which details are set forth in Clause 3.4 hereof.

 

1.7“Territory” means the mainland of China, excluding Hong Kong, Macau and
Taiwan.

 

1.8“Person” means any individual, corporation, partnership, limited partnership,
limited liability partnership, enterprise, limited liability company, business
unit, joint stock company, trust, joint venture company or other similar person
or organization.

 

1.9“Competitive Products” means any products of other specifications that use
formulation, or are applied to indication, same to that of the Products.

 

1.10“CFDA” means China Food and Drug Administration

 

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2.Exclusive Distribution Right

 

2.1Party B agrees to grant Party A, and Party A agrees to accept, an exclusive
distribution right with respect to the Products in the Territory during the Term
of this Agreement, under which Party A has the right to, by itself or through
any of its Affiliates or any dealer, distributor, medical institution or any
other Person designated by Party A (collectively as “Party A’s Designated
Entity”), sell, offer to sell, store, disposal, transport, bid for, market and
promote and/or advertise, and provide service for, and conduct any other
activities related to, the Products (collectively as “Distribution”). Party A
shall be fully liable for the activities or omissions of any of Party A’s
Designated Entities.

 

2.2During the Term of this Agreement and subject to the terms hereof, without
prior written consent of Party A, Party B shall not, and shall cause the
Manufacturer not to (with respect to Clauses 2.2.1-2.2.3 only) :

 

2.2.1directly license, distribute, sell, transfer or deliver by establishing any
other economic entity or otherwise, the Products to any Person, other than Party
A or Party A’s Designated Entity, in the Territory, for the purpose of
distribution;

 

2.2.2directly sell or transfer the Products to Party A’s Designated Entity
instead of through Party A;

 

2.2.3appoint or authorize any Person other than Party A or Party A’s Designated
Entity to distribute the Products in the Territory; or

 

2.2.4conduct any activities in connection with any of the Distribution as set
forth above with respect to the Competitive Products in the Territory.

 

2.3During the Term of this Agreement, Party A shall not engage in the
Distribution of the Products out of the Territory, nor shall it conduct any
activities in connection with any of the manufacture or Distribution as set
forth herein with respect to the Competitive Products as importer or
manufacturer. Nothing herein shall prevent Party A from acting as wholesaler to
Competitive Products.

 

3.Product Information

 

3.1Country of origin: Place of Manufacturer as set forth in Clause ‎1.4.

 

3.2Manufacturer: As set forth in Clause ‎1.4.

 

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3.3Indication: As set forth in the CTD file which shall include Dry eye,
conjunctivochalasis, sjogren’s syndrome indication.

 

3.4Size and Packing:

 

Packaging may include the following:

 

3.4.1Uni-dose Product: 0.65ml/bottle, 30 bottles/box, and 36 packs/box.

 

3.4.2Multi-dose Product: 10 ml/bottle, 1 bottles/box, and 72 packs/box.

 

4.Other Rights and Obligations of Party A

 

4.1Party B shall, extend reasonable efforts to assist Party A in completing
clinical trials. All necessary regulatory approvals, registration procedures,
licenses, and permits and authorizations (including import approvals) required
for the marketing, importation, sale and service of the, Products in the
Territory, including without limitation, obtaining an approval on registration
for the Products issued by CFDA, and paying fees for registration and clinical
trial in accordance with the registration procedures and estimated schedule set
forth in Appendix 2, shall be the responsibility of Party A, and Party A shall
ensure that the same is maintained throughout the Term. Upon reasonable request
by Party B, Party A shall provide Party B with information about the
registration progress of the Products and copies of such regulatory approvals
once received. In the event of termination for any reason of this Agreement, all
such regulatory approvals shall immediately be transferred and assigned to Party
B or any designee on Party B’s behalf.

 

4.2The Parties shall mutually agree on final decisions on, packaging design of
the Products to be distributed in the Territory. Lacrycon® shall be displayed on
package of the minimum selling unit (pack). For the purpose of this Clause, to
the extent permitted by applicable laws, Party A and Party A’s Designated Entity
shall have the right to print on any promotion or bidding materials in
connection with the Products any trademark, trade name or logo of Party A, Party
B, the Manufacturer, Party A’s Designated Entity or any third party.

 

4.3If Party A intends to engage in sub-packaging or production of the Products
in the Territory, it shall enter into a separate agreement, terms and conditions
to be agreed with Party B, to set forth matters, including without limitation,
sub-packaging, production, license, pricing, etc.

 

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4.4Party A and Party A’s Designated Entity shall be liable to promote the
Products in the Territory and to take part in determination of price and pricing
strategies with respect to the Products under any bidding procedures. Party B
shall use its best endeavor to provide Party A with all support necessary for
any bidding with respect to the Products, including but not limited to provision
of applicable technical documents.

 

4.5Party A has the right to conduct audit on Party B, each year during the Term
of this Agreement subject to prior notice of at least thirty (30) days and after
coordinating such audit with Party B during normal working hours. Such audit
shall be limited to aspects relevant to the distribution and quality control of
the Products under the terms of this Agreement only, including but not limited
to, basic information of related Persons, production and, management team and
governance structure, main relevant financial data and analysis, operational
risks analysis and solutions. Such audit shall be at the cost of Party A. Party
B shall, or shall be responsible to coordinate with the Manufacturer or their
respective related Persons to, assist Party A with the audit. Party B shall have
the right to inspect Party A’s facilities during regular business hours in order
to inter alia check regulatory compliance.

 

4.6Party A shall have the obligation and responsibility to protect the image and
reputation of the Products and their trademark.

 

4.7Upon the occurrence of any of the following circumstances in the Territory,
Party A shall, within ten (10) working days, notify Party B of, and Party B
shall, within ten (10) working days from receipt of notice from Party A, follow
up and do its utmost to solve, the circumstance, and, Party B shall immediately
designate applicable staff to solve the circumstance if it is serious:

 

4.7.1A Client of Party A has made negative comments on or complains about the
Products, determined by Party A to be reasonably justifiable including those on
the quality, conditions, package and other respects of or defects in the
Products; and

 

4.7.2A Client has suffered adverse reaction by using the Products.

 

4.8In case of any recall of the Products as set forth in Clause ‎5.11 of this
Agreement, Party A shall offer Party B necessary assistance by coordinating the
carrying-out and facilitating of the recall of the Products.

 

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5.Other Rights and Obligations of Party B

 

5.1Party B shall extend best efforts to obtain, before[***], applicable
approvals for the Uni-dose Products with respect to sjogren’s syndrome
indication in Hungary, and provide Party A with applicable certificate documents
with respect to dry eyes, conjunctivochalasis, sjogren’s syndrome indication. In
the event that Party B is only available to provide Party A with applicable
certificate documents with respect to two of the above three indications, Party
B shall pay the compensation equivalent to [***]% of the ordering amount of the
Products of the corresponding year to Party A.

 

5.2Before[***], Party B shall extend best efforts to obtain a valid patent
registration for the Uni-dose Products and the Multi-dose Products with respect
to, including but not limited to, dry eyes, conjunctivochalasis, sjogren’s
syndrome indication in the Territory.

 

5.3Before[***], Party B shall use its best endeavor to obtain a marketing
approval for the Uni-dose Products and Multi-dose Products in Hungary, the
products of which shall cover the following indications: dry eyes,
conjunctivochalasis, sjogren’s syndrome indication. Party B shall provide Party
A with applicable certificate documents immediately after it has obtained
registration documents.

 

5.4Party B shall, upon CFDA’s request, provide Party A with available documents
and other assistance and supports necessary for application for registration of
the Products, so that the Products will be registered in China in accordance
with the registration schedule as set forth in Appendix 2.

 

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5.5In case of the Uni-dosed Products, within thirty (30) days upon the execution
of this Agreement, or in case of the Multi-dosed Products and the Products for
any new indication, within thirty (30) days after Party B has obtained
applicable approval documents, Party B shall extend best efforts to provide
Party A with all available registration documents and technical support
necessary for Party A to apply to CDFA for clinical trials and obtaining import
drug license; if Party A is required to conduct any additional experimental
research to complete the registration of Products due to the quality,
completeness or other reasons of any registration documents provided by Party B,
Party B shall provide relevant research materials and bear the cost of
registration (up to USD[***]) and provide the necessary Products for additional
experiments. Party B shall engage professionals to support Party A throughout
the registration in the Territory, so that the Products will be registered in
accordance with the registration schedule set forth in Appendix 2, including but
not limited to:

 

a)certificate documents (including patent specifications)

 

b)pharmaceutical research materials

 

c)non-clinical research materials

 

d)clinical trial materials

 

e)drug standards and drafting notes

 

f)source of and quality standard for bulk drug substance and excipients

 

g)selection basis and quality standard for packaging materials and container
that directly contact drugs

 

5.6Party B shall ensure that the Manufacturer shall produce the Products in
compliance with any applicable law, registration documents of, and quality and
specification requirements of the Products.

 

5.7Party B shall be ready for, and cause the Manufacturer to deliver, the
Products in accordance with the ordering quantity commitment of the Products
agreed upon by the Parties hereunder including according to agreed lead time and
other agreed terms as shall be set forth in a Purchase Order (as defined below),
ensuring that the supply of the Products will not be interrupted during the Term
of this Agreement.

 

5.8Party B shall ensure that it has in place a valid and binding agreement with
the Manufacturer for the manufacture of the Products so that it may fulfill its
obligations under this Agreement, and that it holds the licensed rights in
connection with the Products, which are valid, enforceable and legally binding.

 

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5.9Party B shall undertake that the Products delivered to Party A and accepted
by Party A under this Agreement are free of quality problems (including but not
limited to in compliance with ex-factory standards for the Products) and take
responsibility for the quality of the Products at the time of delivery to Party
A. Party A shall visually check and accept the quantity of Products at Dalian
Port and inform Party B within forty-eight (48) hours. Within seven (7) working
days after the visually check and quantity acceptance of Products at Dalian
Port, , Party A has the right to deliver the Products to designated warehouses
and conduct random sampling inspections at designated warehouses. If Party A
finds any damage to, defect in or shortage of the Products, Party A may, within
forty-eight (48) hours after discovering such damage, defect or shortage, notify
Party B in writing (including but not limited to fax, email, etc.) of the same,
and such damage, defect or shortage shall be solved in accordance with
applicable refund and exchange rules jointly formulated by the Parties.

 

5.10Party B shall be responsible for, and appoint staff to perform, after-sale
services for the Products during normal working hours in Israel. In respect of
product quality problems with documented evidence, Party B shall cooperate and
reasonably assist Party A in solving issues in connection therewith, failing
which Party B shall be liable for all consequences arising thereout.

 

5.11During or after any of the following conditions, Party B may, if necessary,
stop selling the Products in the Territory at any time during the Term of this
Agreement, and Party A shall, and cause Party A’s Designated Entity to,
cooperate with Party B in recalling the Products in the Territory in accordance
with a notice from Party B: (a) any applicable competent authority has required
Party B stopping selling the Products in the Territory; (b) Party B has stopped
selling the Products in the Territory for safety reason; or (c) the Products
shall be recalled as required under applicable laws.

 

5.12Party B shall, cause the Manufacturer to produce, and deliver to Party A up
to [***] samples in Uni-dose. Party B shall bear the cost of such samples
(including goods and shipping cost).

 

5.13Party A shall provide a logo approved by the relevant authorities for Party
B to have placed on the Products in Chinese in compliance with the Drug
Administration Law of the People’s Republic of China. All liability for
compliance in connection with the logo shall be borne by Party A.

 

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5.14Party B shall have the right to inspect Party A’s facilities during normal
business hours to check compliance with regulations and other matters.

 

5.15For the first three (3) years, Party B shall provide Party A with support
with respect to exhibition, promotion conference, academic marketing or
otherwise which shall be no less than ten (10) times per year and no less than
one (1) week per time, including but not limited to providing staff, materials
and so on. Expert consultant fees and round-trip ticket costs shall be borne by
Party B. Accommodation fees and transportation fees within the Territory shall
be borne by Party A.

 

5.16Party B shall provide Party A a fourteen (14) days right of first refusal,
subject to the same terms and conditions officially proposed by any third party
to purchase the assets of Party B and/or the Manufacturer only in case that such
third party is a competitor of Party A or, in case that such third party did not
confirm in writing that it would abide by the terms and conditions signed
between Party A and Party B herein. In the event that there is a material change
of Party B or the Manufacturer, Party B shall ensure the effectiveness of this
Agreement and ensure that the Products are provided to Party A in a timely
manner. (see Clause 14.9)

 

6.Joint Review Committee

 

6.1Within forty-five (45) working days upon the effectiveness of this Agreement,
the Parties shall set up a joint review committee (“Joint Committee”). The Joint
Committee is composed of six (6) members, where each Party shall nominate three
(3) members, each of whom shall be the director of either Party. Each of Party A
and Party B shall appoint one person to be the joint chairman of the Joint
Committee, who shall be a director of either Party.

 

6.2The Joint Committee shall be responsible to supervise the implementation of
this Agreement, and discuss about and decide on all matters as agreed upon by
the Parties.

 

6.3The Joint Committee shall hold its first meeting within forty-five (45)
working days upon the effectiveness of this Agreement. Then, the Joint Committee
shall hold a meeting before or on the fifth (5th) working days of each calendar
quarter or as requested by either joint chairman. The meeting may be held by
means of teleconference or video and telephone conference. Each Party shall
cause a representative to attend the meeting in a reasonable way. If a
representative of either Party is unable to attend the meeting, such Party may
appoint a person having equivalent experience and authorization to attend the
meeting.

 

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6.4If the Joint Committee fails to reach an agreement on a certain matter, the
chairman or the chief executive officer of each Party shall meet to discuss
about the same without delay. If the chairmen or the chief executive officers of
the Parties fail to reach an agreement on such matter, the Parties may resolve
the matter in accordance with the provisions regarding dispute resolution under
this Agreement.

 

6.5Each Party may change any members nominated by it to the Joint Committee
depending on the implementation of this Agreement.

 

7.Representations and Warranties

 

7.1Party A represents, warrants and undertakes to Party B that, as of the
effective date of, and during the Term of, this Agreement:

 

7.1.1Party A has the full power, authority and qualification and has taken all
actions necessary to enter into, deliver and perform this Agreement. This
Agreement shall, upon execution, become legal, valid and duly enforceable to and
binding on Party A;

 

7.1.2No performance by Party A of any its obligation to Party B under this
Agreement will result in any violation of or conflict with any obligations or
undertakes of Party A to a third party or infringe upon any rights of a third
party;

 

7.1.3Party A will perform its obligations under this Agreement in compliance
with all applicable laws and regulations;

 

7.1.4Party A has obtained or will obtain and maintain all regulatory approvals,
registration and permits necessary to conduct the business contemplated hereby.

 

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7.2Party A agrees and covenants :

 

7.2.1to conduct the sale of the Products in an orderly and businesslike manner
in order to protect the image and reputation of Party B, the Products and the
trademark Lacrycon® (and such other trademarks as Party B may use from time to
time in connection with the Product), and to maintain adequate stocks of the
Product to meet Customers’ demands;

 

7.2.2to notify Party B immediately of: (i) all adverse comments or complaints by
Party A’s Customers regarding the Product, including comments regarding the
Product’ quality, condition, packaging, or any other attributes or defects, (ii)
all adverse events and adverse reactions that may be attributable to a
Customer’s use of the Product, whether or not Party A can confirm that the event
is actually associated with the Product, and whether or not Party A can confirm
that the event was due to improper dosing or other negligence on the part of the
Customer (end-user); and (iii) all results of clinical studies and any adverse
results or facts arising therefrom or in connection therewith;

 

7.2.3to comply in its business conduct with, and bear any and all costs
associated with the compliance with, all laws and other legal and regulatory
requirements applicable from time to time to the business of the marketing,
sale, and service of the Product in the Territory;

 

7.2.4to store properly and deliver the Product, and cause the Product to be
properly stored and delivered, in accordance with industry best practices and
the instructions given by Party B from time to time. Party A shall sell the
Product on a first in first out basis unless otherwise directed by Party B;

 

7.2.5not to issue any warranties, guarantees or licenses with respect to the
Product that purport to obligate Party B to any person or entity other than the
applicable warranties or license for Products expressly set forth herein;

 

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7.2.6to promptly comply with such guidance and/or instruction as may be provided
to the Party A by Party B from time to time and to consult with Party B
immediately in respect of any complaint, investigation, enquiry or like matter
(whether by a governmental body, agency or otherwise) which might adversely
affect the Product’s brand, reputation or image or the ability of the Party A to
perform its obligations under this Agreement;

 

7.2.7in the event that Party B decides in its sole discretion or is required by
the government in the Territory with solid evidence to the quality defects of
the Products to recall Products sold in the Territory or to conduct a similar
remedial or preventive action, for any reason (including for the purposes of
effecting Product modifications for safety, regulatory, health or other purposes
or to meet the requirements of any national or supra-national government or
regulatory body or authority), whether before or after the termination or expiry
of this Agreement, Party A , fully co-operate with Party B in organizing and
carrying out such recall promptly and effectively. Costs and expenses of such
recall, if any, shall be borne by Party B; and

 

7.2.8Party A, including its officers, directors, employees and dealers, shall
use only legitimate and ethical business practices in the activities
contemplated by this Agreement and will not pay, offer, or authorize payment,
directly or indirectly, to any person, entity, organization, or government, in
the activities hereunder. Party A shall comply fully with all laws applying to
the sale and distribution of the Product, including all anti-corruption laws and
laws prohibiting the payment of commercial or private bribes.

 

7.3Party B represents, warrants and undertakes to Party A that, as of the
effective date of, and during the Term of, this Agreement:

 

7.3.1Party B has the full power, authority and qualification and has taken all
actions necessary to enter into, deliver and perform this Agreement. This
Agreement shall, upon execution, become legal, valid and duly enforceable to and
binding on Party B;

 

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7.3.2All authorization, regulations, licenses, registration and performance in
connection with this Agreement are valid, enforceable and legally binding;

 

7.3.3No performance by Party B of any its obligation to Party A under this
Agreement will result in any violation of or conflict with any obligations or
undertakes of Party B to a third party or infringe upon any rights of a third
party;

 

7.3.4To the knowledge of Party B, the Product IP will not infringe upon legal
rights of a third party, including but not limited to intellectual property
rights;

 

7.3.5To the knowledge of Party B, there is no circumstance or obstacle that will
prevent Party B from performing any of its obligations under this Agreement or
restrict or interfere with Party B in the performance of this Agreement.

 

8.Product Price and Quantity

 

8.1During the Distribution Period under this Agreement, unless otherwise set
forth in an order confirmed by the Parties, the Parties agree that the product
price shall be the cost, insurance and freight to Dalian, including product
costs, insurance premium and freight, i.e. CIF Dalian (Incoterms 2010). Unit
price of every Product payable by Party A to Party B is set forth in Appendix 1.
For the purpose of this Agreement, “Distribution Period” means, with respect to
every Product, a period that commences on the date on which all permits and
approvals necessary for the Distribution of such Product in the Territory,
including but not limited to an imported drug registration certificate issued by
CFDA, and ends on the date on which the Term of this Agreement expires.

 

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8.2The Parties have agreed upon, on the whole, the annual binding ordering
quantity of the Products during the Distribution Period as set forth in Appendix
1, provided that the definite ordering quantity of the Products shall be subject
to any order contract and purchase order actually delivered by Party A to Party
B and the unit price of the Product shall be subject to Appendix 1. Party A
shall ensure to meet the binding ordering quantity of the Products for the first
year and the second year as set forth in Appendix 1. The binding ordering
quantity of the Products for the third year to the fifth year is the maximum
ordering quantity, and Party B agrees that the actual ordering quantity of the
Products may be reduced by up to [***]% on the maximum ordering quantity of that
year, which reduction shall not be deemed as a breach of this Agreement. If, in
a given year, the ordering quantity exceeds in aggregate the ordering quantity
commitment of that year, Party B shall do its commercially reasonable efforts to
perform at least [***]% of the ordering quantity in excess. If the Distribution
of the Products is affected by government official change of policy related to
the Product, the Parties shall discuss in good faith to determine a new
estimated annual ordering quantity of the Products.

 

8.3Subject to registration of the Multi-dose Products in the Territory, during
the first year and the second year of the Distribution Period, as long as the
total annual ordering amount of the Products remains unchanged, Party A shall
have the right to exchange the binding ordering quantity of the Uni-dose
Products with that of the Multi-dose Products, or vice versa, provided that the
percentage of the amount so exchanged shall not exceed [***]% of the ordering
amount of the original size.

 

8.4During the Distribution Period, Party B will provide Party A with, free of
charge, the Products (including the Uni-dose Products and the Multi-dose
Products) in accordance with the following:

 

8.4.1For the first year: no free merchandize;

 

8.4.2For the second year and third year: if the quantity of the Products ordered
by Party A exceeds the minimum ordering quantity of that year, Party B will
provide free merchandise in a quantity equivalent to [**]% of the ordering
amount of the Uni-dose Products in the last year;

 

8.4.3For the fourth year and fifth year: (a) if the quantity of the Products
ordered by Party A exceeds the minimum ordering quantity of that year but is
less than the maximum ordering quantity of that year, Party B will provide free
of charge the Uni-dosed Products in a quantity equivalent to [***]% of the
ordering amount of the Products in the last year; (b) if the quantity of the
Products ordered by Party A exceeds the maximum ordering quantity of that year,
Party B will provide free of charge the Uni-dosed Products in a quantity
equivalent to [***]% of the ordering amount of the Products in the last year.

 

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If Party A is entitled to the foregoing, it shall inform Party B of the definite
quantity of the Products to be provided by Party B free of charge and Party B
shall prepare and deliver such Products within three (3) months after it has
been informed by Party A of the same. All of the Products that are provided free
of charge will be provided in the form of Uni-dose Products, no matter whether
for the Multi-dose Products or the Uni-dose Products (based on price in US$).

 

8.5If the Multi-dose Products fail to be registered in the Territory due to any
reason attributable to Party B, Party A may cancel any orders of the Multi-dose
Products, and the binding ordering quantity of the Multi-dose Products set forth
in Appendix 1-1 shall not apply, and the Parties will comply with the binding
ordering quantity of the Uni-dose Products set forth in Appendix 1-2 only.
Further, Party B shall provide Party A with the Uni-dose Products free of charge
in an amount equivalent to [***]% of the ordering amount of the Uni-dose
Products in the last year. Such Free merchandise will be applicable throughout
the Distribution Period under this Agreement.

 

9.Order, Inspection and Acceptance, Delivery and Payment

 

9.1During the Distribution Period, Party B shall produce and deliver the
Products in accordance with purchase orders placed by Party A (each a “Purchase
Order”). Party A shall place a non-cancellable, non-returnable purchase order
for units of Products (___ Products per unit). Party B shall confirm in writing
(or by email or by fax), after its receipt of an order from Party A. If Party B
fails to confirm in writing with Party A within ten (10) working days after its
receipt of an order from Party A, it shall be deemed that Party B has rejected
such order. If Party B fails to supply the Products in accordance with any order
placed by Party A, and in accordance with the terms set forth in the herein and
within the Purchase Order, Party B shall take any one or more of the following
remedy measures: (a) if Party B fails to supply the Products in accordance with
any order placed by Party A for first one (1) month there shall be no penalty
imposed on Party B; (b) if Party B fails to supply the Products in accordance
with any order placed by Party A for a period of for more than one (1) month but
less than two (2) months, Party B shall pay Party A [***]% of the amount of such
Purchase Order as compensation; (c) if Party B fails to supply the Products in
accordance with any order placed by Party A for a period of for more than two
(2) months but less than three (3) months, Party B shall pay Party A [***]% of
the amount of such Purchase Order as compensation; (d) if Party B fails to
supply the Products in accordance with any order placed by Party A for more than
three (3) consecutive months, Party A shall have the right to unilaterally
terminate this Agreement (except for force majeure).

 

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9.2When Party A has placed an order, Party B shall deliver the Products within
two hundred and ten (210) days (for completion of manufacture of initial order)
after the day on which it has received the first order from Party A and
thereafter for each order within one hundred and twenty (120) days to one
hundred and fifty (150) days after the day on which it has received the order
from Party A. For the purpose of this Clause, the number of days shall include
those for shipping and count up to the day on which the Products arrive at the
port of Dalian. All the Products shall be delivered in Dalian, except for
expedited delivery which will be delivered in coordination with Party A (Party B
shall bear the cost of such expedited delivery).

 

9.3Party B shall send to Party A customs clearance documents as required by
Party A within five (5) to ten (10) working days after shipping of the Products.
Party B shall ensure that, upon the delivery, the remaining validity period of
the Products shall be no less than five-sixths of the total original validity
period of the Products. Party B shall pay Party A late fees at a rate of 0.1% of
the price set forth in the applicable order for every one (1) month the delivery
is delayed. If Party B delays delivery for a period of more than three (3)
months, the applicable order shall be terminated, and Party B shall indemnify
Party A for all losses suffered under such order.

 

9.4Party B shall, upon the delivery of the Products to the delivery point set
forth in the applicable order, issue a Confirmation of Delivery to Party A,
together with information related to the Products delivered, including but not
limited to size and quantity of the Products. On the delivery date, Party A’s
staff shall confirm the size, quantity and quality of the Products ordered, and
then sign or sealed on the Confirmation of Delivery, in which case it shall be
deemed that Party A has confirmed that it has received and accepted the Products
set forth in the Confirmation of Delivery, provided that any rights of Party A
under Clause 5.9 shall not be affected thereby. All risks of destruction, damage
or loss of the Products shall pass to Party A on the day on which the Products
are delivered to Party A by Party B.

 

16

 

 

9.5Payment for orders shall be made in accordance with the following mechanism.
Partial shipment of ordered Products is allowed. Within ten (10) days after
confirmation of the Purchase Order by Party B, an amount equal to [***]% of the
total payment for the full order shall be paid to Party B by means of remittance
of immediately available funds into the bank account designated by Party B and
such amount shall be deducted from the final shipment delivery of the full
order. All of the shipments and inspection in respect of Products shall be
completed within seven (7) working days as of delivery to Dalian port. After
Party A conducts inspection upon and accepts the Products at the designated
warehouse, and no later than nine (9) working days as of delivery to Dalian
port, an amount equal to [***]% of the total payment for the full order or for
each shipment, as the case may be, shall be paid to Party B by irrevocable
transferable letter of credit.

 

9.6Unless otherwise set forth herein, each Party shall bear its own legal fees
and expenses and all other fees, costs and taxes incurred in connection with
negotiation, preparation, execution and delivery of this Agreement.

 

9.7The terms and conditions of this Agreement shall apply to all Purchase Orders
submitted to Party B by Party A.

 

10.Intellectual Property Rights

 

10.1Unless otherwise set forth herein, any and all intellectual property rights
in the Products (“Product IP”, including but not limited to Lacrycon® brand,
name, specific trademark right, patent and trade secret, whether registered or
applied for registration in the Territory) shall be owned by Dr. Shabtay
Dikstein (“IP Holders”).

 

17

 

 

10.2Subject to the terms of this Agreement, Party B hereby grants Party A and
Party A’s Designated Entity an exclusive, non-transferable and royalty-free
license with respect to the Product IP, solely to enable Party A and Party A’s
Designated Entity to engage in the Distribution of the Products in the
Territory.

 

10.3Party B hereby represents and warrants that, prior to the execution of this
Agreement, it has been granted a license with respect to the Product IP owned by
the IP Holders and that each of the IP Holders has consented that Party B may
further grant a license with respect to the Product IP to Party A and Party A’s
Designated Entity for the purpose of the Distribution of the Products in the
Territory.

 

10.4The Parties agree that Party A shall first use Lacrycon® trademark and 哈药®
trademark to sell the Products in the Territory. Party A shall have the right to
use literal logo and trade logo of Party B, the Manufacturer and related persons
in its documents, advertisement, promotional materials and website for the
purpose of promotion of the Products, provided that Party A shall indicate that
it has been authorized by related persons.

 

10.5In the event that this Agreement expires or is early terminated, any license
with respect to the Product IP granted under this Clause 10 shall terminate
automatically.

 

10.6Any academic research and/or development or engineering or use of LO2A or
the Product IP for any use other than distribution under this Agreement is not
subject to the prior consent of Party B. The ownership of any improved
technology in relation to, derived from or based upon LO2A shall belong to the
IP Holders. No publication shall be made by Party A related to LO2A research
without prior written consent of the inventor.

 

10.7If Party A finds that any information about the Product IP or any part
thereof licensed under this Agreement is used on any fake or imitation goods and
any other materials, Party A shall notify Party B as soon as it becomes aware of
the same.

 

10.8Party A shall not initiate any trademark proceedings without Party B’s prior
written consent.

 

18

 

 

11.Confidential Information

 

11.1By either Party (the “Disclosing Party”) acknowledging its relationship with
the other Party (the “Receiving Party”) in accordance with this Agreement, the
Receiving Party will obtain information including, without limitation, specific
information and materials of the Disclosing Party, including but not limited to
the business plan, strategies, work plan, methodology, and/or the information
and materials relating to the customers, technology or products of the
Disclosing Party. Considering such materials, including but not limited to the
type of the product defect detected, frequency of certain defects in the
Products and consumer information, are of significant value to the Disclosing
Party, the interests of the Disclosing Party will be damaged if the Receiving
Party divulges such information to any third party, and all such information
shall be deemed as the “Confidential Information”. Therefore, the Receiving
Party shall take all reasonable precautions to protect the confidentiality of
the Confidential Information. The Receiving Party agrees that, the Disclosing
Party has the right to prohibit the unauthorized use or disclosure of any
Confidential Information which actually or has threatened the Disclosing Party.

 

11.2The Receiving Party shall take every reasonable precaution to protect the
confidentiality of Confidential Information and shall ensure its employees and
who need to know Confidential Information are bound by appropriately strict
confidentiality undertakings.

 

11.3The Receiving Party agrees not to obtain benefits for any third party in any
way by using the Confidential Information, or to disclose the Confidential
Information to any third party (except where the employees of the Receiving
Party need to know such Confidential Information; provided that non-disclosure
agreement shall be executed with such employees in order to ensure the
confidentiality of the information).

 

11.4The information shall not be deemed as Confidential Information if it falls
into any one or more of the following categories:

 

11.4.1the information which has become published or public knowledge other than
due to the breach of the Receiving Party;

 

19

 

 

11.4.2the Confidential Information used by the Receiving Party, which is
independent information.

 

11.4.3the information which has been known to the Receiving Party prior to
receipt of the Confidential Information;

 

11.4.4the information which is obtained by the Receiving Party lawfully without
duty of confidentiality with respect thereto.

 

11.5The Receiving Party shall not publicly announce or publish the existence of
this Agreement without prior written consent of the Disclosing Party, unless
such information is required to be made public pursuant to applicable laws or
the requirements of competent government authorities or the stock exchange. In
such case, the Receiving Party shall notify the Disclosing Party immediately,
and the Disclosing Party will use appropriate legal means to protect the
confidentiality of the information if possible.

 

11.6Upon expiry or termination of this Agreement, the Receiving Party agrees to
return the Confidential Information of the Disclosing Party or destroy the
Confidential Information in the manner selected by the Disclosing Party.

 

12.Limitation on Liability; Insurance

 

12.1PARTY B’S TOTAL LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT, UNDER
ANY LEGAL THEORY, WHETHER FOR BREACH OF CONTRACT, WARRANTY, PARTY B’S GROSS
NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE, IS LIMITED TO THE ANNUAL NET
SALES OF THE PARTICULAR PRODUCT(S) SOLD TO PARTY A HEREUNDER IN THE APPLICABLE
YEAR. PARTY A’S SOLE REMEDY IS TO REQUEST FROM PARTY B, AT PARTY B’S OPTION, TO
EITHER REFUND THE RESPECTIVE SUPPLY PRICE OR REPAIR OR REPLACE THE PRODUCT(S)
THAT IS NOT AS WARRANTED. IN NO EVENT AND UNDER NO LEGAL THEORY, INCLUDING
WITHOUT LIMITATION FOR BREACH OF WARRANTY, BREACH OF CONTRACT, NEGLIGENCE OR
OTHERWISE WILL PARTY B BE LIABLE FOR SPECIAL, INCIDENTAL, INDIRECT, PUNITIVE OR
CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS OR REVENUES,
COST OF CAPITAL, COST OF SUBSTITUTE PRODUCTS, FACILITIES OR SERVICES, DAMAGE TO
BUSINESS OR REPUTATION, DOWNTIME COSTS OR CLAIMS OF CUSTOMERS OR PARTY A FOR
SUCH DAMAGES, WHETHER OR NOT PARTY B SHALL HAVE BEEN MADE AWARE OF THE
POSSIBILITY OF SUCH LOSS TO THE FULL EXTENT SUCH MAY BE DISCLAIMED BY LAW.

 

20

 

 

12.2If either Party breaches any provision of this Agreement, the non-breaching
Party may send a written notice to the breaching Party, requiring the breaching
Party to remedy the breach. The breaching Party shall remedy the breach and
indemnify the non-breaching Party for the relevant losses suffered as a result
thereof within thirty (30) working days after receipt of the electronic and/or
written notice from the non-breaching Party, failing which the non-breaching
Party has the right to terminate this Agreement.

 

12.3For the purpose of this Clause 12, the circumstances where Party A may claim
for damages shall include but not limited to:

 

12.3.1If Party A distributes the Products by using the intellectual property
rights in the Products in accordance with this Agreement, and thus infringes
upon the legitimate rights and interests of any third party (including but not
limited to the holder of the intellectual property right in the Products), which
causes losses to Party A, Party A has the right to pursue the corresponding
liabilities against Party B and claim damages from Party B;

 

12.3.2If the percent defective (result of manufacture) of the Products delivered
by Party B for each purchase order is lower than [***]%, such defective Products
shall be officially certified as proven to be defective and stored by Party A,
and Party B shall deliver replenishment of the corresponding quantity when the
next purchase order is delivered; if the percent defective of the Products
delivered by Party B for each purchase order is to or higher than [***]%, Party
B shall deliver replenishment of up to two times the corresponding quantity when
the next purchase order is delivered.

 

21

 

 

12.4During the term of this Agreement, Party A shall discretionally decide to
obtain and maintain mandatory, adequate and sufficient insurance required by its
business operations and in line with industry practices, including but not
limited to product liability insurance and defective product liability
insurance. Party A shall extend its best efforts to register Party B and the IP
Holders as beneficiaries of such insurance, and Party A shall provide relevant
certifications to Party B.

 

13.Force Majeure

 

13.1If either Party is prevented from performing this Agreement due to
earthquake, typhoon, flood, fire, war or other force majeure events which are
unforeseeable, unavoidable and insurmountable, such Party shall immediately
notify the other Party of the conditions of the event in writing or other form
which can be approved, and within thirty (30) working days thereafter, provide
documentary evidence, explaining the details of the force majeure event and the
reasons for its failure to perform this Agreement or its need to delay the
performance of this Agreement, in whole or in part. The Parties may negotiate
whether or not to terminate this Agreement, exempt part of the liabilities
hereunder or delay the performance of this Agreement depending on the extent of
the effect of such force majeure event upon the performance of this Agreement.

 

14.Term and Termination

 

14.1This Agreement shall become effective upon execution and shall remain in
effect for five years, unless earlier terminated pursuant to the provisions of
this Clause 14 (the “Term”). If not otherwise terminated, the Term shall
automatically renew for additional five year Terms provided that the parties
fulfill all of their obligations under this Agreement as were in effect during
the fifth year of the engagement during the applicable five year Term. If any
terms and conditions change in the automatic extension agreement, the Parties
shall enter into a supplementary agreement separately.

 

22

 

 

14.2Either Party may terminate this Agreement immediately by giving a notice to
the other Party if:

 

14.2.1The other Party assigns any of the interests or obligations under this
Agreement without prior written consent of the first Party, provided however
that a change of control of either Party shall not be deemed an assignment for
the purposes of this Clause;

 

14.2.2The other Party enters into liquidation process, reaches a composition
agreement with the creditors or hands over its properties to the custodian,
declares or has become bankrupt, or adopts a resolution on dissolution of the
company, providing that the proceedings are not dismissed or the problem
resolved within 60 days; or

 

14.2.3The other Party is prosecuted or convicted of a crime by the court due to
its violation of the law; as a result, its operation and business would have
adverse effects on the reputation, good will or prestige of the first Party’s
company and products.

 

14.3Without prejudice to the other provisions in this Agreement, Party A has the
right to terminate this Agreement by giving a written notice to Party B of at
least 60 days in advance, and if such matter is not remedied by Party B in such
time, if:

 

14.3.1Party A deems the data provided by Party B cannot meet the requirements
for Party A’s registration of the Products in the Territory;

 

14.3.2Party B fails to complete the appropriate procedures on schedule in
accordance with Clauses 5.1 through 5.3 herein;

 

14.3.3The Products fail to be registered in the Territory;

 

14.3.4Party B decides to cease the sales of the Products in the Territory or the
regulator requires cessation of production of the Products;

 

14.3.5The quality problem with the Products supplied by Party B has adverse
effects and serious consequences on Party A (e.g., media exposure, government
notification for public information), which is detrimental to Party A’s
reputation and brand image; or

 

14.3.6Party B’s act constitutes a material breach under this Agreement, and
Party B fails to remedy the breach within thirty (30) working days after receipt
of the written notice (including warning or other written request) from Party A,
or Party B refuses or threatens to refuse the performance of its obligations
under this Agreement.

 

23

 

 

Under any of the circumstances set forth in Clauses 14.3.1 through 14.3.3 above,
Party A shall not assume any liability to Party B for its termination of this
Agreement, and Party A agrees not to pursue liabilities under such circumstances
against Party B.

 

In any event that Party B cannot fulfill its obligations under this Agreement,
the IP Holders and the Manufacturer shall be entitled to replace Party B as a
party to this agreement, by entering into a separate agreement directly with
Party A.

 

14.4Without prejudice to the other provisions in this Agreement, Party B has the
right to terminate this Agreement by giving a written notice to Party A of at
least sixty (60) days in advance, and if such matter is not remedied by Party A
in such time, if:

 

14.4.1Party A contests the validity of any patents or intellectual property
rights of the Product;

 

14.4.2Party A fails to make timely payment;

 

14.4.3Party A fails to register the Products in the Territory for Market
Approval after having been provided with the required documents for
registration;

 

14.4.4Party A decides to cease the sales of the Products in the Territory or the
regulator requires cessation of production of the Products;

 

14.4.5Party A’s act constitutes a material breach under this Agreement, and
Party A fails to remedy the breach within thirty (30) working days after receipt
of the written notice (including warning or other written request) from Party B,
or Party A refuses or threatens to refuse the performance of its obligations
under this Agreement;

 

14.4.6Party A does not meet any milestones, or minimum purchase quantities under
this Agreement;

 

14.4.7Due to adverse effects and serious consequences resulting from the
Products.

 

24

 

 

Under any of the circumstances set forth in Clauses 14.4.1 through 14.4.4 above,
Party B shall not assume any liability to Party A for its termination of this
Agreement, and Party A agrees not to pursue liabilities under such circumstances
against Party B.

 

14.5Party B will repurchase the Products which are still in stock of Party A
upon termination or expiry of this Agreement at the purchase price of Party A,
and complete such repurchase within thirty (30) days after termination or expiry
of this Agreement, failing which Party A has the right to sell any non-expired
Products in good condition.

 

14.6Upon expiry or termination of this Agreement, Market Approval shall
automatically be transferred and assigned to Party B and the license to Party A
granted hereunder shall immediately expire. Party B has no right to retain the
advance payment for the Products which have not been delivered (for any reason
whatsoever), and, within ten (10) working days, it shall remit such advance
payment to the bank account designated by Party A.

 

14.7Party B shall return all of the remaining documents, materials and other
relevant data of Party A within thirty (30) working days after expiry or
termination of this Agreement. Party B shall not directly and / or knowingly
sell the Products in any way in the name of Party A in the Territory. If Party B
violates the provisions, Party A has the right to require Party B to indemnify
it for 5 times the sales amount, and pursue legal liabilities against Party B.

 

14.8Party A shall return the remaining documents, materials and other relevant
data in relation to the registration of the Products which are provided by Party
B within thirty (30) working days after expiry or termination of this Agreement.
Party A shall not make any commercial use (directly or indirectly) of the
Products or the formula upon which the Product is based after expiration of
termination of this Agreement, unless with the express written consent of Party
B.

 

25

 

 

14.9Upon the occurrence of any one of the following circumstances of Party B:
(a) sale, transfer or otherwise disposal of drug production technology in
connection with the Products, including but not limited to transferring
technology directly, granting drug marketing authorization to a third party, or
exclusively licensing production technology in connection with the Products to a
third party; (b) sale, transfer or otherwise disposal of key assets (both
movable property and real estate) necessary for production of the Products; or
(c) sale, transfer or otherwise disposal of more than 50% equity interest in
Party B or the Manufacturer that results in a surviving entity which is a
competitor of Party A and/or does not agree to fulfill the obligations of this
Agreement, Party A shall retain the right to terminate this Agreement.

 

15.Notice

 

15.1The notice shall be deemed to have been duly given if the notice regarding
the satisfaction of any requirement in this Agreement is delivered in writing
(or in electronic document, email or other form) to each other to the address
provided by the Parties below, or either Party sends the notice in writing (or
in electronic document, email or other form) in other predetermined manner to
the address of the other Party set forth in this Agreement. Either Party shall
notify the other Party of any change of its mailing address, and the date of
notice shall be the date when the notice is sent by email, fax or personal
delivery.

 

Party B’s Mailing Address: 24 Hanagar st. PO Box 6653, Hod Hasharon, Israel

 

Email: or@wizepharma.com / noam@wizepharma.com

 

Other Contact Information: +972-(0)72-2600536

 

Party A’s Mailing Address: No. 418 Hayao Road, Daoli District, Harbin,
Heilongjiang Province, the People’s Republic of China

 

Email: hyjtyyyxgs_2018@163.com

 

Other Contact Information: FAX: +86 0451-84619388

 

16.Governing Law and Dispute Resolution

 

16.1This Agreement is entered into and interpreted in accordance with, and
governed by, the laws of China. Any dispute between the Parties arising from the
performance of this Agreement shall be first settled through friendly
consultation. If such consultation fails, either Party may submit such dispute
to the China International Economic and Trade Arbitration Commission for
arbitration in accordance with its arbitration rules then-effective at the time
of applying for arbitration. The seat of arbitration shall be Beijing and the
arbitration proceedings shall be conducted in Chinese. The arbitral award shall
be final and binding upon the Parties.

 

26

 

 

17.Miscellaneous

 

17.1This Agreement constitutes the entire agreement between the Parties with
respect to the subject matter hereof. In the event of any conflict between the
previous agreements, consultations or undertakings and the provisions of this
Agreement, this Agreement shall prevail; in the event of no conflict between
them, they shall be effective separately. The amendment and modification to this
Agreement shall be made in writing and signed by the authorized representatives
or legal representatives of the Parties.

 

17.2At any time or during any period, the failure of either Party to enforce any
provision of this Agreement or to exercise any right or remedy shall not
constitute a waiver of such provision, right or remedy, or preclude such Party
from enforcing any or all provisions of this Agreement or exercising any right
or remedy. Any waiver may not be effective unless made in writing.

 

17.3This Agreement is made in Chinese and English. In the event of any
discrepancy between the two language versions, the Chinese version shall
prevail.

 

17.4All exhibits hereto, as an integral part of this Agreement, shall have equal
legal effect with this Agreement.

 

17.5The headings in this Agreement are used only as a reminder and shall not be
deemed as the restriction on or interpretation of the meaning of the clauses
herein.

 

17.6This Agreement is executed in two counterparts, each in Chinese and English,
with each Party holding one counterpart, each in Chinese and English. This
Agreement shall be concluded and become effective on the date when it is signed
by the legal representatives or authorized representatives of the Parties on
behalf of the Parties.

 

27

 

 

IN WITNESS WHEREOF, this Agreement is executed by the Parties on May 31, 2018.

 

Party A: HPGC Medical Co., Ltd.

Legal Representative: /s/ Zhu Weidong

Date of signing: May 31, 2018

 

Party B: Israel Wize Pharma Ltd.

Legal Representative: /s/ Or Eisenberg

Date of signing: May 31, 2018

 

28

 

 

Appendix 1:Ordering amount and ordering quantity of the Products ordered by
Party A and amount of the Products provided by Party B free of charge

 

Appendix 1-1:Ordering amount and ordering quantity of the Multi-dose Products
ordered by Party A and amount of the Products provided by Party B free of
charge.

 

   Multi-dose Products (10ml/bottle)  Minimum  Maximum Year   Minimum Ordering
Quantity
(dose)  Maximum Ordering Quantity
(dose)  Minimum Ordering Amount (US$)  Maximum Ordering Amount (US$)  Unit Price
(CIF, US$)  Amount of Free merchandise (US$)  Amount of Free merchandise (US$)
                        1   [***]    [***]    [***] US$/bottle   [***]    2  
[***]    [***]    [***] US$/bottle  [***]    3   [***]  [***]  [***]  [***] 
[***] US$/bottle  [***]    4   [***]  [***]  [***]  [***]  [***] US$/bottle 
[***]  [***] 5   [***]  [***]  [***]  [***]  [***] US$/bottle  [***]  [***]

 

Note:

1) Appendix 1-1 shows the estimated ordering quantity of the Multi-dose Products
and the definite sales quantity will be discussed and determined in subsequent
orders.  Provisions regarding the Free merchandise shall be applicable during
the period of cooperation between the Parties.  Party A shall inform Party B of
the definite quantity of the Products to be provided free of charge 3 months in
advance;

 

2) For the second year and the third year of the period of cooperation, the
amount of the Products to be provided free of charge shall be [***]% of the
ordering amount of the Products in the last year.  For the fourth year and the
fifth year of the period of cooperation, if the ordering quantity in the last
year exceeds the minimum quantity but is less than the maximum quantity of that
year, the amount of the Products to be provided free of charge shall be [***]%
of the ordering amount of the Products in the last year; or if the ordering
quantity in the last year exceeds the maximum quantity of that year, the amount
of the Products to be provided free of charge shall be [***]% of the ordering
amount of the Products in the last year.

 

29

 

 

Appendix 1-2:Ordering amount and ordering quantity of the Uni-dose Products
ordered by Party A and amount of the Products provided by Party B free of charge

 

   Uni-dose Products (0.65ml/bottle)    Year   Minimum Ordering Quantity (pack) 
Maximum Ordering Quantity (pack)  Minimum Ordering Quantity (one million
bottles)  Maximum Ordering Quantity (one million bottles)  Minimum Ordering
Amount (US$)  Maximum Ordering Amount (US$)  Unit Price (CIF, US$)  Minimum
Amount of Free merchandise (US$)  Maximum
Amount of Free merchandise (US$)                               1   [***]  [***] 
[***]  [***]  [***]  [***]  ([***] US$/box)  [***]  [***] 2   [***]  [***] 
[***]  [***]  [***]  [***]  ([***] US$/box)  [***]  [***] 3   [***]  [***] 
[***]  [***]  [***]  [***]  ([***] US$/box)  [***]  [***]                      
        4   [***]  [***]  [***]  [***]  [***]  [***]  ([***] US$/box)  [***] 
[***]                               5   [***]  [***]  [***]  [***]  [***] 
[***]  ([***] US$/box)  [***]  [***]

 

Note:

1) Appendix 1-2 shows ordering commitment for minimum ordering quantity of the
Uni-dose Products and the definite sales quantity will be discussed and
determined in subsequent orders.  Provisions regarding the free merchandise
shall be applicable during the period of cooperation between the Parties.  Party
A shall inform Party B of the definite quantity of the Products to be provided
free of charge 3 months in advance;

 

2) For the second year and the third year of the period of cooperation, the
amount of the Products to be provided free of charge shall be [***]% of the
ordering amount of the Products in the last year.  For the fourth year and the
fifth year of the period of cooperation, if the ordering quantity in the last
year exceeds the minimum quantity but is less than the maximum quantity of that
year, the amount of the Products to be provided free of charge shall be [***]%
of the ordering amount of the Products in the last year; or if the ordering
quantity in the last year exceeds the maximum quantity of that year, the amount
of the Products to be provided free of charge shall be [***]% of the ordering
amount of the Products in the last year.  

 

3) If Party A cancels any orders for the Multi-dose Products due to Party B’s
failure to provide sufficient documents, the amount of the Products to be
provided free of charge in the next year shall be [***]% the total ordering
amount of the Uni-dose Products ordered by Party A in the last year (in the form
of the Products).  Provisions regarding the Free merchandise shall be applicable
to each year of the period of cooperation between the Parties.

 

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Appendix 2:Schedule and Milestones for Registration of Multi-dose and Uni-dose
Products in China

 

Size Content Duration (in month, counting from the day on which Party A obtains
a full set of CTD materials in compliance with the submission requirement of
CFDA) Milestone Registration of Uni-dose Products Translation of registration
materials for the Uni-dose Products and application for clinical trial 3-5
months milestone 1 Approval on clinical trial 6-8 months milestone 2 Clinical
trial 15-30 months milestone 3 Approval on new drug registration of Uni-dose
Products 12-17 months milestone 4 Maximum extended period 3 months /
Registration of Multi-dose Products Translation of registration materials for
the Multi-dose Products and submission a supplementary application 1-2 months
milestone 5 Approval on supplementary application regarding the Multi-dose
Products 8-12 months milestone 6 Maximum extended period 3 months / Total
Duration 51-80 months /

 

Note:

 

1. The date on which Party A applies for clinical trial regarding the Uni-dose
Products will be counted from 3-5 months after Party A has obtained a full set
of CTD materials for three indications, which shall include certificate
documents that Party B has obtained for sjogren’s syndrome in Hungary, and
which, as assessed by Party A, are in compliance with the submission requirement
of CFDA.

 

2. The duration of this appendix is on an estimated basis as the definite
duration is difficult to determine. In particular, the duration for “approval on
clinical trial”, “approval on new drug registration of Uni-dose Products” and
“approval on supplementary application regarding the Multi-dose Products” is
subject to the decision of CDFA.

 

3. Party B agrees that Party A will be granted a “maximum extended period” for
the purpose of registration of the Multi-dose and Uni-dose Products in China.

 

 

31