[*]
    Designates portions of this document that have been omitted pursuant to a request for Confidential Treatment filed separately
    with the Commission	EXECUTION
VERSION




 







 





EXCLUSIVE
LICENSE AND RESEARCH COLLABORATION AGREEMENT


 


by
and between


 


COCRYSTAL
PHARMA, INC.


 


and


 


MERCK
SHARP & DOHME CORP.


 




    	 	 	 



    	[*] Designates portions of this document that have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission	 



    

 


EXCLUSIVE
LICENSE AND RESEARCH COLLABORATION AGREEMENT


 


This
Agreement (this “Agreement”) is effective as of January 2, 2019 (the “Effective Date”),
and is entered into by and between Cocrystal Pharma, Inc., a corporation organized and existing under the laws of Delaware (“Cocrystal”)
and Merck Sharp & Dohme Corp., a corporation organized and existing under the laws of New Jersey (“Merck”).


 


RECITALS:


 


WHEREAS,
Cocrystal has discovered certain Compounds (as hereinafter defined), developed Cocrystal Know-How (as hereinafter defined) and
has rights to Cocrystal Patent Rights (as hereinafter defined);


 


WHEREAS,
Merck and Cocrystal desire to enter into a research collaboration to discover and develop additional Compounds upon the terms
and conditions set forth herein;


 


WHEREAS,
Merck desires to obtain a license under the Cocrystal Patent Rights and Cocrystal Know-How upon the terms and conditions set
forth herein, and Cocrystal desires to grant such a license;


 


NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, the receipt and sufficiency
of which are hereby acknowledged, Cocrystal and Merck hereby agree as follows:


 


Article
1 DEFINITIONS.


 


Unless
specifically set forth to the contrary herein, the following terms, whether used in the singular or plural, shall have the respective
meanings set forth below.


 


	 	1.1	“AAALAC”
    shall mean the Association for Assessment and Accreditation of Laboratory Animal Care International.
	 	 	 
	 	1.2	“Act”
    shall mean, as applicable, the United States Federal Food, Drug and Cosmetic Act,
    21 U.S.C. §§ 301 et seq., and/or the Public Health Service Act, 42 U.S.C. §§ 262 et seq., as amended
    from time to time.
	 	 	 
	 	1.3	“Affiliate”
    shall mean (i) any corporation or business entity of which, now or hereafter, fifty percent
    (50%) or more of the securities or other ownership interests representing the equity, the voting stock or general partnership
    interest are owned, controlled or held, directly or indirectly, by Merck or Cocrystal; or (ii) any corporation or business
    entity which, now or hereafter, directly or indirectly, owns, controls or holds fifty percent (50%) (or the maximum ownership
    interest permitted by law) or more of the securities or other ownership interests representing the equity, the voting stock
    or, if applicable, the general partnership interest, of Merck or Cocrystal; or (iii) any corporation or business entity of
    which, now or hereafter, fifty percent (50%) or more of the securities or other ownership interests representing the equity,
    the voting stock or general partnership interest are owned, controlled or held, directly or indirectly, by a corporation or
    business entity described in (i) or (ii). 
	 	 	 
	 	1.4	“Agreement”
    shall have the meaning given such term in the preamble to this document.


 




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	 	1.5	Business
    Day” means any day other than a Saturday, Sunday, or a day on which commercial banks
    located in the country where the applicable obligations are to be performed are authorized or required by law to be closed.
	 	 	 
	 	1.6	“Calendar
    Quarter” shall mean the respective periods of three (3) consecutive calendar months
    ending on March 31, June 30, September 30 and December 31.
	 	 	 
	 	1.7	“Calendar
    Year” shall mean each successive period of twelve (12) months commencing on January
    1 and ending on December 31.
	 	 	 
	 	1.8	“Clinical
    Trial” shall mean a Phase I Clinical Trial, Phase II Clinical Trial, Phase III Clinical
    Trial, and/or Post-approval Clinical Trial. 
	 	 	 
	 	1.9	“Cocrystal
Know-How” shall mean all information and materials created by Cocrystal [*], including
but not limited to discoveries, improvements, processes, methods, protocols, formulas, data, Inventions (including without limitation
any Compound conceived and/or reduced to practice by Cocrystal and as set forth on Schedule 8.4.2), know-how and trade secrets, patentable
or otherwise[*], and which are: (i) Controlled by Cocrystal or its Affiliates, (ii) not generally known, and (iii) necessary or
useful to Merck to make, have made, use, import, offer to sell and sell, and otherwise develop, manufacture, market and commercialize
Compound and Product in the Field and in the Territory; excluding, however, any
(1) Merck Know-How, Cocrystal Patent Rights and Collaboration Information and Inventions, [*], and (3) any other compounds, materials,
adjuvants and delivery devices Controlled by Cocrystal or its Affiliates that are neither necessary nor useful to Merck to make,
have made, use, import, offer to sell and sell, and otherwise develop, manufacture, market and commercialize Compound and Product
in the Field and in the Territory.
	 	 	 
	 	1.10	“Cocrystal
    Patent Rights” shall mean Patent Rights that during the Term (as hereinafter defined)
    are Controlled by Cocrystal or any of its Affiliates, including, but not limited to, the patent application listed on Schedule
    1.10, which claim or cover (i) any Compound conceived and/or reduced to practice by Cocrystal [*], or (ii) a method of
    use or process of manufacture thereof conceived and/or reduced to practice by Cocrystal [*], but excluding, however, all Collaboration
    Patent Rights.
	 	 	 
	 	1.11	“Collaboration
    Information and Inventions” shall mean all discoveries, improvements, processes, methods,
    protocols, formulas, data (including all data, results and other information generated by results of X-ray crystallography
    techniques used in the Research Program), Inventions (including Compounds or improvements thereto conceived and/or reduced
    to practice by Cocrystal and/or Merck [*]), know-how and trade secrets, patentable or otherwise[*], and (i) resulting from
    the Research Program; (ii) discovered, developed or invented (x) solely by employee(s) of Cocrystal and/or its Affiliates,
    and/or a Third Party acting on behalf of Cocrystal and/or its Affiliates, (y) solely by employee(s) of Merck and/or its Affiliates,
    or (z) jointly by the Parties and/or their respective Affiliates and/or a Third Party acting on a Party’s behalf; and
    (iii) discovered, developed or invented during the period commencing [*] and ending [*].
	 	 	 
	 	1.12	“Collaboration
    Patent Rights” shall mean Patent Rights that claim or cover Collaboration Information and Inventions. [*]


 




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	 	1.13	“Combination
    Product” shall mean a Product that includes one or more pharmaceutically active ingredients other than Compound
    in combination with Compound. All references to Product in this Agreement shall be deemed to include Combination Product.
    
	 	 	 
	 	1.14	“Commercially
    Reasonable Efforts” shall mean [*].
	 	 	 
	 	1.15	“Compound”
    shall mean any molecule that (i) inhibits the Target [*] and was discovered, conceived and/or reduced to practice [*]
    and (ii) any derivatives or modifications thereof, [*]. 
	 	 	 
	 	1.16	“Control”,
    “Controls” or “Controlled by” shall
    mean with respect to any item of or right under Cocrystal Patent Rights or Cocrystal Know-How or Merck Know-How, or other
    intellectual property assets or rights, as applicable, the possession of (whether by ownership or license, other than pursuant
    to this Agreement) or the ability of a Party to grant access to, or a license or sublicense of, such items or right as provided
    for herein without violating the terms of any agreement or other arrangement with any Third Party existing at the time such
    Party would be required hereunder to grant the other Party such access or license or sublicense. 
	 	 	 
	 	1.17	“EMA”
    shall mean the European Medicines Agency and any successor Regulatory Authority having substantially
    the same function.
	 	 	 
	 	1.18	“EU
    Major Countries” shall mean the countries of Germany, France, Great Britain, Spain
    and Italy. 
	 	 	 
	 	1.19	“FDA”
    shall mean the United States Food and Drug Administration and any successor Regulatory Authority
    having substantially the same function.
	 	 	 
	 	1.20	 “Field”
    shall mean all therapeutic (including, without limitation prophylactic) and/or diagnostic
    uses. 
	 	 	 
	 	1.21	“First
    Commercial Sale” shall mean, with respect to a Product and country, the first sale
    for end use or consumption of such Product in the country after Marketing Authorization in such country.
	 	 	 
	 	1.22	“FTE”
    shall mean [*] hours of a full-time scientist’s work time over [*] consecutive calendar
    months (including normal vacations, sick days and holidays). 
	 	 	 
	 	1.23	“FTE
    Rate” shall mean an amount equal to [*] for one (1) full FTE, which represents the
    fully burdened annual rate for each such FTE and includes related salary, benefits, administration, facilities costs and overhead.
    
	 	 	 
	 	1.24	“GLP”
    or “Good Laboratory Practice” shall
    mean the applicable then-current standards for laboratory activities for pharmaceuticals or biologicals, as set forth in the
    Act and any regulations or guidance documents promulgated thereunder, as amended from time to time, together with any similar
    standards of good laboratory practice as are required by any Regulatory Authority in the Territory.
	 	 	 
	 	1.25	“IND”
    shall mean an Investigational New Drug application, Clinical Study Application, Clinical
    Trial Exemption, or similar application or submission for approval to conduct human clinical investigations filed with or
    submitted to a Regulatory Authority in conformance with the requirements of such Regulatory Authority.


 




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	 	1.26	“IND
    Enabling Toxicology Study” shall mean an animal study under conditions meeting Good
    Laboratory Practices that is intended to support the filing of an IND for the Product.
	 	 	 
	 	1.27	“Indication”
    shall mean a separate and distinct disease or medical condition in humans which a Product
    that is in Clinical Trials is intended to treat, prevent and/or diagnose and/or for which a Product has received Marketing
    Authorization.
	 	 	 
	 	1.28	“Information”
    shall mean any and all information and data, including without limitation all Merck Know-How,
    all Cocrystal Know-How, and all other scientific, pre-clinical, clinical, regulatory, manufacturing, marketing, financial
    and commercial information or data, whether communicated in writing or orally or by any other method, which is provided by
    one Party to the other Party in connection with this Agreement.
	 	 	 
	 	1.29	“Initiates”,
    “Initiated” or “Initiation” shall
    mean, (i) with respect to an IND Enabling Toxicology Study, the administration of the first dose to the first animal in such
    IND Enabling Toxicology Study; or (ii) with respect to a Clinical Trial, the administration of the first dose to the first
    subject in such Clinical Trial.
	 	 	 
	 	1.30	“Invention”
    shall mean any process, method, composition of matter, article of manufacture, discovery
    or finding that is conceived and/or reduced to practice. 
	 	 	 
	 	1.31	“Liability”
    shall mean any and all claims and suits asserted by Third Parties, including all losses,
    liabilities, damages, costs, fees and expenses, including reasonable attorneys’ fees and expenses of litigation incurred
    in connection therewith.
	 	 	 
	 	1.32	“Major
    Countries” shall mean the countries of the United States, United Kingdom, Germany,
    France, Spain, Italy, [*].
	 	 	 
	 	1.33	“Marketing
    Authorization” shall mean all approvals from the relevant Regulatory Authority necessary
    to market and sell a Product in a country [*].
	 	 	 
	 	1.34	“Merck
    Know-How” shall mean all information and materials, including but not limited to discoveries,
    improvements, processes, methods, protocols, formulas, data, Inventions, know-how and trade secrets, patentable or otherwise,
    which [*] (i) are Controlled by Merck or its Affiliates, (ii) are not generally known
    and (iii) are [*] necessary to Cocrystal in the performance of its obligations under
    the Research Program excluding, however, any Collaboration Information and Inventions.
	 	 	 
	 	1.35	 “NDA”
    shall mean a New Drug Application, Biologics License Application, Marketing Authorization
    Application, filing pursuant to Section 510(k) of the Act, or similar application or submission for Marketing Authorization
    of a Product filed with a Regulatory Authority to obtain marketing approval for a biological, pharmaceutical or diagnostic
    product in that country or in that group of countries.
	 	 	 
	 	1.36	“Net
    Sales” shall mean the gross invoice price [*] of
    Product sold by Merck or its Related Parties to the first Third Party after deducting, if not previously deducted, from the
    amount invoiced or received: [*]


 











With
respect to sales of Combination Products, Net Sales shall be calculated on the basis of the gross invoice price of Product(s)
containing the same strength of Compound sold without other active ingredients. In the event that Product is sold only as a Combination
Product, Net Sales shall be calculated on the basis of the gross invoice price of the Combination Product [*]. In the event that
Product is sold only as a Combination Product and either Party reasonably believes that the calculation set forth in this Paragraph
does not fairly reflect the value of Compound relative to the other active ingredients in the Combination Product, the Parties
shall [*].


 






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	 	1.37	“Party”
    shall mean Merck or Cocrystal, individually, and “Parties” shall mean Merck
    and Cocrystal, collectively.
	 	 	 
	 	1.38	“Patent
    Rights” shall mean any and all patents and patent applications in the Territory (which
    for the purpose of this Agreement shall be deemed to include certificates of invention and applications for certificates of
    invention), including divisionals, continuations, continuations-in-part, reissues, renewals, substitutions, registrations,
    re-examinations, revalidations, extensions, supplementary protection certificates, pediatric exclusivity periods and the like
    of any such patents and patent applications, and international (i.e., WIPO), regional (e.g., EPO, EA), and foreign national
    equivalents of the foregoing.
	 	 	 
	 	1.39	“Person”
    means any individual, partnership, joint venture, limited liability company, corporation,
    firm, trust, association, unincorporated organization, governmental authority or agency, or any other entity not specifically
    listed herein.
	 	 	 
	 	1.40	“Phase
    I Clinical Trial” shall mean a human clinical trial in any country that would satisfy
    the requirements of 21 CFR 312.21(a).
	 	 	 
	 	1.41	“Phase
    II Clinical Trial” shall mean a human clinical trial in any country that would satisfy
    the requirements of 21 CFR 312.21(b).
	 	 	 
	 	1.42	“Phase
    III Clinical Trial” shall mean a human clinical trial in any country that would satisfy
    the requirements of 21 CFR 312.21(c).
	 	 	 
	 	1.43	“PMDA”
    shall mean the Pharmaceuticals and Medical Devices Agency in Japan and any successor Regulatory
    Authority having substantially the same function.
	 	 	 
	 	1.44	“Product(s)”
    shall mean any pharmaceutical or biological preparation in final form containing Compound
    (i) for sale by prescription, over-the-counter or any other method or (ii) for administration to human patients in a Clinical
    Trial, for any and all uses in the Field, including without limitation any Combination Product. For clarity, different formulations
    or dosage strengths of a given Product with the same Compound shall be considered the same Product for purposes of this Agreement.
	 	 	 
	 	1.45	“Regulatory
    Authority” shall mean any applicable government regulatory authority involved in granting
    approvals for the manufacturing, marketing, reimbursement and/or pricing of a Product in the Territory, including, in the
    United States, the FDA and any successor governmental authority having substantially the same function.
	 	 	 
	 	1.46	“Related
    Party” shall mean each of Merck, its Affiliates, and their respective sublicensees
    (which term does not include distributors), as applicable. 


 




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	 	1.47	“Research
    Program” shall mean the research activities undertaken by the Parties as set forth
    in Article 2 and Schedule 2.1. 
	 	 	 
	 	1.48	“Research
    Program Term” shall mean the duration of the Research Program and “Extended
    Research Program Term” shall mean any period of the Research Program as it may be extended by mutual agreement of the
    Parties, as described more fully in Section 2.11.
	 	 	 
	 	1.49	“Target”
    shall mean influenza [*].
	 	 	 
	 	1.50	“Territory”
    shall mean all of the countries in the world, and their territories and possessions.
	 	 	 
	 	1.51	“Third
    Party” shall mean an entity other than Merck and its Related Parties, and Cocrystal
    and its Affiliates. 
	 	 	 
	 	1.52	 “Valid
    Patent Claim” shall mean (i) a claim of an issued, unexpired and in-force patent included
    within the Cocrystal Patent Rights or Collaboration Patent Rights that claims Compound [*],
    which has not been revoked or held unenforceable or invalid by a decision of a court or other governmental agency of competent
    jurisdiction (which decision is not appealable or has not been appealed within the time allowed for appeal), and which claim
    has not been disclaimed, denied or admitted to be invalid or unenforceable through reissue, re-examination, supplemental examination
    or disclaimer or otherwise or (ii) a claim in a pending patent application included in such Patent Rights (i.e. Cocrystal
    Patent Rights or Collaboration Patent Rights that claims Compound [*]) that has been pending for no longer than [*] that continues
    to be prosecuted in good faith. For purposes of determining whether a Product infringes or is covered by a Valid Claim, the
    claims of a patent application shall be presumed to have been issued as a patent.
	 	 	 
	 	1.53	“Violation”
    shall mean that either Cocrystal, or any of its officers or directors has been: (a) convicted
    of any of the felonies identified among the exclusion authorities listed on the U.S. Department of Health and Human Services,
    Office of Inspector General (OIG) website, including 42 U.S.C. 1320a-7(a) (https://oig.hhs.gov/exclusions/index.asp); and/or
    (b) identified in the OIG List of Excluded Individuals/Entities (LEIE) database (https://oig.hhs.gov/exclusions/exclusions_list.asp)
    or the U.S. General Services Administration’s list of Parties Excluded from Federal Programs (https://www.sam.gov/portal/public/SAM/)
    (each of (a) and (b), singly and collectively, the “Exclusions Lists”).


 


Article
2 RESEARCH PROGRAM


 


	 	2.1	General.
    Cocrystal and Merck shall engage in the Research Program upon the terms and conditions set
    forth in this Agreement. The activities to be undertaken in the course of the Research Program are set forth in Schedule
    2.1 which may be amended from time to time upon mutual written agreement by authorized representative(s) of the Parties
    (the “Research Plan”).
	 	 	 
	 	2.2	Conduct
    of Research. Subject to Section 2.3, Cocrystal and Merck each shall proceed diligently with
    the work set out in the Research Program by using their respective reasonable good faith efforts to allocate sufficient time,
    effort, equipment and facilities to the Research Program and to use personnel with sufficient skills and experience as are
    required to accomplish the Research Program in accordance with the terms of this Agreement and Schedule 2.1.


 






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	 	Merck
    shall be entitled to utilize the services of its Affiliates and Third Parties to perform its Research Program activities,
    provided that such Third Parties are subject to confidentiality obligations consistent with the requirements of Section
    4.1. Cocrystal shall be entitled to utilize the service of Third Parties to perform its Research Program activities only upon
    Merck’s prior written consent or as specifically set forth in Schedule 2.1. Notwithstanding the foregoing, each
    Party shall remain at all times fully liable for its respective responsibilities under the Research Program.


 








	 	2.3	Merck
    Funding of Cocrystal FTEs. During the Research Program Term and in accordance with the Research Plan, Merck will provide
    Cocrystal with research funding pursuant to Section 5.2 for [*]. Notwithstanding the foregoing, Merck shall not be required
    to fund any FTEs for the Research Program pursuant to Section 5.2 from and after the end of the Research Program Term.
	 	 	 
	 	2.4	Use
    of Research Funding. Cocrystal shall apply the research funding it receives from Merck under
    this Agreement solely to carry out its Research Program activities in accordance with Schedule 2.1 and the terms and
    conditions of this Agreement.
	 	 	 
	 	2.5	[*].
	 	 	 
	 	2.6	Joint
    Research Committee. The Parties hereby establish a committee to facilitate the Research
    Program as follows:


 


	 	2.6.1	Composition
    of the Joint Research Committee. The Research Program shall be conducted under the direction of a joint research committee
    (the “Committee”) comprised of three (3) representatives
    of Merck (who shall be employees of Merck or its Affiliate, as applicable) and three (3) representatives of Cocrystal (who
    shall be employees of Cocrystal or its Affiliate, as applicable). A list of initial representatives of Merck and Cocrystal
    are attached hereto as Schedule 2.6.1. Each Party may change its representatives to the Committee from time to time
    in its sole discretion, effective upon notice to the other Party of such change. These representatives shall have appropriate
    technical credentials, experience and knowledge, and ongoing familiarity with the Research Program. Additional representative(s)
    or consultant(s) may from time to time, by mutual consent of the Parties, be invited to attend Committee meetings, subject
    to such representative’s or consultant’s written agreement to comply with the requirements of Section 4.1. The
    Committee shall be chaired by a representative of Merck. Decisions of the Committee shall be made unanimously by the representatives.
    In the event that the Committee cannot or does not, after reasonable good faith efforts, reach agreement on an issue within
    [*] after such matter has been referred to the Committee, then the matter shall be [*].
	 	 	 
	 	2.6.2	Scope
    of Committee Oversight. The Committee shall be responsible for overseeing the Research Program, including to (i) review
    and amend the Research Plan from time to time, (ii) review and coordinate the Parties’ activities under the Research
    Program, (iii) confer regarding the status of the Research Program and the progress under the Research Program and to make
    determinations and decisions in connection with the activities under the Research Program (including issues of priority),
    (iv) review relevant data under the Research Program, (v) consider and advise on any technical issues that arise under the
    Research Program, and (vi) determine such other matters as allocated to the Committee hereunder. The Committee shall not have
    the authority to: (w) modify or amend the terms and conditions of this Agreement; (x) waive either Party’s compliance
    with the terms and conditions of this Agreement; (y) determine any issue in a manner that would conflict with the express
    terms and conditions of this Agreement or (z) amend the Research Plan in a manner that would increase the financial or other
    resource (i.e., FTEs) obligations imposed on Cocrystal or Merck beyond the scope of those required under the then current
    planned activities, and if such amendment would increase such financial or other resource (i.e., FTEs) obligations,
    then such amendment must be mutually agreed to by the Parties in writing (including mutual agreement on the number of additional
    FTEs of Cocrystal needed to perform such work and to be funded by Merck in accordance with Section 5.1); provided that,
    for the avoidance of doubt if the work proposed in the amendment to the Research Program activities could be performed by
    the FTEs then currently being funded by Merck and such work would not impose additional financial obligations on Cocrystal
    beyond the then current Research Program activities, Cocrystal shall perform such work at no additional charge and the Research
    Program activities shall automatically be deemed to be amended to include such work as proposed by the Committee. 


 




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	 	2.6.3	Meetings.
    During the Research Program Term, the Committee shall meet in accordance with a schedule established by mutual written
    agreement of the Parties, but no less frequently than once per Calendar Quarter,
    with the location for such meetings alternating between Cocrystal and Merck facilities (or such other location may be determined
    by the Committee). Alternatively, the Committee may meet by means of teleconference, videoconference or other similar communications
    equipment. The Committee shall confer regarding the status of the Research Program, review relevant data, consider and advise
    on any technical issues that arise, consider issues of priority, and review and advise on any budgetary and economic matters
    relating to the Research Program which may be referred to the Committee. For each meeting, the Committee shall designate one
    member to take minutes on the meeting, and such minutes shall be approved by each of Cocrystal and Merck within ten (10) Business
    Days of such meeting. Each Party shall bear its own expenses related to the attendance of such meetings by its representatives.
    At the end of the Research Program Term, the Committee shall have a final meeting to review the results of the Research Program
    and then shall be disbanded.
	 	 	 
	 	2.6.4	Disbandment
    of Committee. Upon completion (or earlier termination) of the Research Program, the Committee shall be disbanded and shall
    have no further authority with respect to the activities hereunder.


 


	 	2.7	Alliance
    Managers.


 


	 	2.7.1	Appointment.
    Each Party shall have the right to appoint an employee who shall oversee interactions between the Parties for all matters
    related to this Agreement (each an “Alliance Manager”). Such persons shall endeavor to ensure clear and
    responsive communication between the Parties and the effective exchange of information, and may serve as a single point of
    contact for any matters arising under this Agreement. The Alliance Managers shall have the right to attend all Committee meetings
    as non-voting participants and may bring to the attention of the Committee any matters or issues either of them reasonably
    believes should be discussed, and shall have such other responsibilities as the Parties may mutually agree in writing. Each
    Party may designate different Alliance Managers by notice in writing to the other Party.



 




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	 	2.7.2	Responsibilities
    of the Alliance Managers. The Alliance Managers, if appointed, shall have the responsibility of creating and maintaining
    a constructive work environment between the Parties. Without limiting the generality of the foregoing, each Alliance Manager
    shall:





 





	 	(a)	identify
    and bring disputes and issues that may result in disputes (including without limitation any asserted occurrence of a material
    breach by a Party) to the attention of the Committee in a timely manner, and function as the point of first referral in all
    matters of conflict resolution; 
	 	 	 
	 	(b)	provide
    a single point of communication for seeking consensus both internally within the Parties’ respective organizations and
    between the Parties; 
	 	 	 
	 	(c)	plan
    and coordinate cooperative efforts, internal communications and external communications between the Parties with respect to
    this Agreement; and
	 	 	 
	 	(d)	take
    responsibility for ensuring that meetings and the production of meeting agendas and minutes occur as set forth in this Agreement,
    and that relevant action items resulting from such meetings are appropriately carried out or otherwise addressed.


 


	 	2.8	Exchange
    of Information. Upon execution of this Agreement, and on an ongoing basis during the Research
    Program Term, each Party shall disclose to the other Party in writing or in an electronic format Cocrystal Know-How or Merck
    Know-How, as the case may be, that is reasonably necessary for a Party to perform its responsibilities under the Research
    Program and not previously disclosed. 
	 	 	 
	 	2.9	Records
    and Reports.


 


	 	2.9.1	Records.
    Each Party shall maintain records, in sufficient detail and in good scientific manner appropriate for patent and regulatory
    purposes, which shall fully and properly reflect all work done and results achieved in the performance of the Research Program
    by the Party.
	 	 	 
	 	2.9.2	Copies
    and Inspection of Records. Merck shall have the right, during normal business hours and upon reasonable notice, to inspect
    and copy all such records of Cocrystal referred to in Section 2.9.1. Merck shall maintain such records and the information
    disclosed therein in confidence in accordance with Section 4.1. Merck shall have the right to arrange for its employee(s)
    and/or consultant(s) involved in the activities contemplated hereunder to visit the offices and laboratories of Cocrystal
    and any of its Third Party contractors as permitted under Section 2.2 during normal business hours and upon reasonable notice,
    and to discuss the Research Program work and its results in detail with the technical personnel and consultant(s) of Cocrystal;
    provided that such consultants and Third Party contractors agree in written agreement to comply with the requirements
    of Section 4.1. Upon request, Cocrystal shall provide copies of the records described in Section 2.9.1. 
	 	 	 
	 	2.9.3	[*]Reports.
    Within [*] following the end of [*], Cocrystal shall provide to Merck a written progress report in English which shall
    describe the work performed to date on the Research Program, evaluate the work performed in relation to the goals of the Research
    Program and provide such other information as may be required by the Research Program or reasonably requested by Merck relating
    to the progress of the goals or performance of the Research Program. For clarity, all such reports shall be considered the
    confidential Information of both Parties for purposes of Article 4.


 




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	 	2.10	Collaboration
    Information and Inventions. The entire right, title and interest in:



 


	 	2.10.1	Cocrystal
    Know-How shall be owned solely by Cocrystal;
	 	 	 
	 	2.10.2	Merck
    Know-How shall be owned solely by Merck; and
	 	 	 
	 	2.10.3	Collaboration
    Information and Inventions and Collaboration Patent Rights shall be owned jointly by Cocrystal and Merck. Each Party hereby
    assigns to the other Party an undivided interest in the Collaboration Information and Inventions that its employees or Third
    Party contractors or consultants (in the case of Cocrystal, approved by Merck or identified in Schedule 2.1), or employees
    or Third Party contractors or consultants (in the case of Cocrystal, approved by Merck or identified in Schedule 2.1)
    of its Affiliates, solely discovered, developed or invented and any Collaboration Patent Rights thereon. 


 


Each
Party shall promptly disclose to the other Party in writing the development, making, conception or reduction to practice of Collaboration
Information and Inventions and all Compounds. Inventorship of Patent Rights shall be determined in accordance with United States
patent laws (regardless of where the applicable activities occurred). Subject to the licenses granted to the other Party under
this Agreement and the other terms and conditions of this Agreement, each Party shall have the non-exclusive right to exploit
its interest in Collaboration Information and Inventions and Collaboration Patent Rights, and to grant licenses under its interest
in Collaboration Information and Inventions and Collaboration Patent Rights, as it deems appropriate, without the consent of,
and without accounting to, the other Party; provided, however, that for clarity, the foregoing joint ownership rights
shall not be construed as granting, conveying or creating any license or other rights to the other Party’s intellectual
property, unless otherwise expressly set forth in this Agreement; and further provided that, in the event that any Collaboration
Patent Rights claim or cover a Compound or the manufacturing process therefor, Cocrystal shall not grant any license under its
interest in such Collaboration Patent Rights to any Third Party without Merck’s prior written consent.


 


	 	2.11	Research
    Program Term. Except as otherwise provided herein, the term of the Research Program shall
    commence on the Effective Date and continue for a period of [*]. The Parties may extend the term of the Research Program for
    [*] by mutual written agreement of the authorized representative of the Parties reached at least [*] prior to the end of such
    [*], and shall, in such case, amend Schedule 2.1 as applicable. 
	 	 	 
	 	2.12	Materials.
    In the course of the Research Program Term, Merck and Cocrystal may provide the other Party
    with certain materials (“Materials”) solely for the purpose of enabling
    such Party to perform its activities under the Research Program in accordance with the terms of this Agreement. Cocrystal
    shall not use any Materials provided by Merck in humans, nor shall any of the Materials, or any derivatives, analogs, modifications
    or components thereof be transferred, delivered or disclosed to any Third Party without the prior written approval of Merck.
    Upon expiration or termination of the Research Program Term, any unused Materials and any derivatives, analogs, modifications
    or components thereof shall be, at Merck’s option, either returned to Merck or destroyed in accordance with instructions
    by Merck; however, upon early termination of this Agreement, any unused Materials and any derivatives, analogs, modifications
    or components thereof shall be, at the providing Party’s option, either returned to the providing Party or destroyed
    in accordance with instructions by the providing Party. 


 




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	 	2.13	Exclusive
    Efforts. During the Research Program Term and for a period of [*] following the expiration
    or termination of the Research Program Term, [*], Cocrystal (i) shall work exclusively
    (even as to Cocrystal itself) with Merck in any research and discovery efforts related to the Target, either alone or through
    a Third Party; provided, however, that Cocrystal shall not be obligated to perform any such work with or for
    the benefit of Merck during [*] unless [*] and (ii) shall not, and shall ensure that
    its Affiliates and its licensees and sublicensees who have any use or other rights in or to Cocrystal Know-How or Cocrystal
    Patent Rights do not, directly or indirectly, conduct, exploit, or fund any activity that involves the research and discovery
    efforts related to the Target, either alone or with a Third Party, regardless of whether the collaborative work with Merck
    under the Research Plan is ongoing or has concluded. It is the desire and intent of the Parties that the restrictive covenants
    contained in this Section 2.13 (Exclusive Efforts) be enforced to the fullest extent permissible under applicable laws, rules,
    regulations, and public policies applied in each jurisdiction in which enforcement is sought. Merck and Cocrystal believe
    that the restrictive covenants in this Section 2.13 are valid and enforceable. However, if any restrictive covenant should
    for any reason become or be declared by a competent court or competition authority to be invalid or unenforceable in any jurisdiction,
    such restrictive covenant shall be deemed to have been amended to the extent necessary in order that such provision be valid
    and enforceable, and such amendment shall apply only with respect to the operation of such provision of this Section 2.13
    in the particular jurisdiction in which such declaration is made. 


 


	 	2.14	Compliance
    with Law and Ethical Business Practices.


 


	 	2.14.1	The
    Parties shall conduct the Research Program in accordance with all applicable laws, rules and regulations including, without
    limitation, all current governmental regulatory requirements concerning Good Laboratory Practices. A Party shall notify the
    other Party in writing of any deviations from applicable regulatory or legal requirements. Each Party hereby certifies that
    it has not in the past [*], and it will not, employ or otherwise use in any capacity the services of any person or entity
    debarred under Section 21 USC 335a in performing any services hereunder. A Party shall notify the other Party in writing immediately
    if any such debarment occurs or comes to its attention and shall promptly remove any person or entity so disbarred from performing
    any activities under the Research Program or function or capacity related to the Research Program. [*] 
	 	 	 
	 	2.14.2	Each
    Party acknowledges that Merck’s corporate policy requires that Merck’s business must be conducted within the letter
    and spirit of the law. By signing this Agreement, each Party agrees to conduct the services contemplated herein in a manner
    which is consistent with both law and good business ethics.
	 	 	 
	 	2.14.3	Specifically,
    Cocrystal warrants that none of its current employees, agents, officers or other members of its management are officials,
    officers, agents, representatives of any government or international public organization. Cocrystal shall not make any payment,
    either directly or indirectly, of money or other assets, including but not limited to the compensation Cocrystal derives from
    this Agreement (hereinafter collectively referred as a “Payment”), to government or political party officials,
    officials of international public organizations, candidates for public office, or representatives of other businesses or persons
    acting on behalf of any of the foregoing (hereinafter collectively referred as “Officials”) where such
    Payment would constitute violation of any law, and for clarity, shall comply at all times with the federal Physician Self-Referral
    Law, 42 U.S.C. 1395nn, and the regulations promulgated thereunder, similar state physician self-referral laws and regulations,
    the federal Medicare/Medicaid Anti-kickback Law and regulations promulgated thereunder and similar state Anti-kickback laws
    and regulations. In addition, regardless of legality, Cocrystal shall make no Payment either directly or indirectly to Officials
    if such Payment is for the purpose of influencing decisions or actions with respect to the subject matter of this Agreement
    or any other aspect of Merck’s business.


 




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	 	2.14.4	Each
    Party certifies to the other Party that as of the date of this Agreement that it has screened itself, and its officers, directors
    and employees against the Exclusions Lists and that it has informed the other Party whether it, or any of its officers or
    directors has been in Violation. After the execution of this Agreement, each Party shall notify the other Party in writing
    immediately if any such Violation occurs or comes to its attention. 
	 	 	 
	 	2.14.5	Cocrystal’s
    failure to abide by the provisions of this Section 2.14 shall be deemed a material breach of this Agreement. Merck may in
    such case and with immediate effect terminate this Agreement at its sole discretion upon written notice to Cocrystal and without
    prejudice to any other remedies that may be available to Merck.
	 	 	 
	 	2.14.6	Each
    Party shall indemnify and hold the other Party and any of its Affiliates harmless from and against any and all Liabilities
    (including all costs and reasonable attorneys’ fees associated with defending against such claims) that may arise by
    reason of its acts or omissions or its agents or other Third Parties acting on its behalf which would constitute a violation
    of this Section 2.14. The procedure for such indemnification shall be the same as set forth in Section 6.4, which shall apply
    mutatis mutandis.


 


	 	2.15	Animal
    Research. If animals are used in research hereunder, Cocrystal will comply with the Animal Welfare Act or any other
    applicable local, state, national and international laws and regulations relating to the care and use of laboratory animals.
    Merck encourages Cocrystal to use the highest standards, such as those set forth in the Guide for the Care and Use of Laboratory
    Animals (NRC, 1996), for the humane handling, care and treatment of such research animals. Cocrystal hereby certifies that
    it has and shall maintain current and valid accreditation from AAALAC during the Term. Any animals which are used in the course
    of the Research Program, or products derived from those animals, such as eggs or milk, will not be used for food purposes,
    nor will these animals be used for commercial breeding purposes. 


 


Article
3 LICENSE; EXCHANGE OF INFORMATION; DEVELOPMENT AND COMMERCIALIZATION.


 


	 	3.1	License
    Grant.


 


	 	3.1.1	Subject
    to the terms of this Agreement, Cocrystal hereby grants to Merck an exclusive license (even as to Cocrystal) in the Territory
    under Cocrystal Patent Rights and Cocrystal’s interest in Collaboration Patent Rights, with the right to grant and authorize
    sublicenses, to make, have made, use, import, offer to sell and sell Compound and Product for any and all uses in the Field.
	 	 	 
	 	3.1.2	Subject
    to the terms of this Agreement, Cocrystal hereby grants to Merck an exclusive license (even as to Cocrystal) in the Territory
    under Cocrystal Know-How and Cocrystal’s interest in Collaboration Information and Inventions, with the right to grant
    and authorize sublicenses, (i) to make, have made, use, import, offer to sell and sell Compound and Product for any and all
    uses in the Field and (ii) to otherwise carry out activities contemplated under this Agreement.
	 	 	 
	 	3.1.3	Notwithstanding
    the scope of the exclusive licenses granted to Merck under Sections 3.1.1 and 3.1.2, Cocrystal
    shall retain the rights during the Research Program Term within the Field necessary solely in connection with performing Cocrystal’s
    obligations under the Research Program in accordance with this Agreement to (i) make and use in the Territory, Compound, Product
    and any Invention claimed in or covered by Cocrystal Patent Rights or Collaboration Patent Rights and (ii) use Cocrystal Know-How.


 




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	 	3.1.4	Subject
    to the terms of this Agreement, Merck hereby grants to Cocrystal a non-exclusive license (which shall not be sublicensable
    unless approved by Merck in writing) during the Research Program Term in the Territory under Merck Know-How to make and use
    Compound and to carry out Cocrystal’s activities pursuant to the Research Program.


 


		3.2	Non-Exclusive
                                         License Grant. In the event that the
                                         making, having made, use, import, offer for sale and/or sale by Merck or its Related
                                         Parties of Compound or Product in the Field would infringe during the Term an issued
                                         letters patent in a country that Cocrystal (or its Affiliate who did not become an Affiliate
                                         as a result of a Change of Control (as defined below)) Controls that claims a composition
                                         of matter for the Compound in the country and which patents are not covered by the grant
                                         in Section 3.1, Cocrystal hereby grants to Merck, to the extent Cocrystal is legally
                                         able to do so, a non-exclusive, sublicensable, royalty-free license (except royalties
                                         or other compensation due a Third Party licensor which Merck shall pay, provided that
                                         such payments shall be considered a payment made pursuant to a Third Party License under
                                         Section 5.4.5 and eligible for offset as provided therein) under such issued letters
                                         patent for Merck and its Related Parties to make, have made, use, import, offer to sell
                                         and sell Compound and Product in the country in the Field.



 


		3.3	No
                                         Implied Licenses. Except as specifically set forth
                                         in this Agreement, neither Party shall acquire any license or other intellectual property
                                         interest, by implication or otherwise, in any Information disclosed to it under this
                                         Agreement or under any patents or patent applications owned or controlled by the other
                                         Party or its Affiliates.



 


		3.4	No
                                         Grant of Inconsistent Rights by Cocrystal. During
                                         the Term, Cocrystal (and its Affiliates) shall not assign, transfer, convey or otherwise
                                         grant to any Person or otherwise encumber (including through lien, charge, security interest,
                                         mortgage, encumbrance or otherwise) (i) any rights to any Cocrystal Know-How or Cocrystal
                                         Patent Rights in any manner that is inconsistent with or would interfere with the grant
                                         of the rights or licenses to Merck hereunder; (ii) any rights to any Compounds or Products;
                                         or (iii) any rights to Cocrystal’s interest in Collaboration Patent Rights; provided,
                                         however, that Cocrystal shall grant to Merck the rights to the Compounds and Products
                                         as set forth herein. Without limiting the foregoing, during the Term, (x) Cocrystal (and
                                         its Affiliates) shall not use (and shall not grant to any Third Party the right to use)
                                         any Compounds or Products for any purposes (including the development, manufacturing
                                         or commercialization thereof), except for Cocrystal’s performance of the activities
                                         to be performed by Cocrystal under this Agreement and (y) Cocrystal (and its Affiliates)
                                         shall not provide or otherwise transfer to any Third Parties any Cocrystal Know-How or
                                         Collaboration Information and Inventions for use, except as provided on Schedule 3.4
                                         or for transfers approved by Merck in writing. 



 


		3.5	Sublicenses.
                                         Merck shall have the right to sublicense (through
                                         multiple tiers of sublicenses) any or all of the licenses granted to Merck hereunder.
                                         Merck shall be responsible for ensuring that the performance by any of its sublicensees
                                         hereunder that are exercising rights under a sublicense hereunder is in accordance with
                                         the applicable terms of this Agreement, and the grant of any such sublicense shall not
                                         relieve Merck of its obligations under this Agreement (except to the extent they are
                                         performed by any such sublicensee(s) in accordance with this Agreement). [*]



 


Cocrystal
shall not have the right to sublicense the license granted to Cocrystal Section 3.1.4, except as approved by Merck in writing.


 




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		3.6	Development
                                         and Commercialization; Reports. Merck shall be solely
                                         responsible for development and commercialization of the Product in the Field in the
                                         Territory. Merck shall use Commercially Reasonable Efforts, at its own expense, to develop
                                         and commercialize Products. In pursuing such development and commercialization, Merck
                                         shall comply with all applicable federal, state and local laws and regulations, including,
                                         without limitation, all laws and regulations, domestic and foreign, applicable to the
                                         development, production, distribution, sale, commercialization and use of any Product,
                                         including, without limitation, in connection with labeling, packaging, instructions as
                                         to use, quality control, registration, export controls (including ITAR) and anti-bribery.
                                         Each year after the expiration of the Research Program Term and until First Commercial
                                         Sale, within [*], Merck shall provide Cocrystal with [*] update on the development and
                                         regulatory progress for each Product and the related Compound. 



 


		3.7	Excused
                                         Performance. In addition to the provisions of Article
                                         6, the obligations of Merck with respect to any Product under Section 3.6 are expressly
                                         conditioned upon the continuing absence of any adverse condition or event relating to
                                         the safety or efficacy of the Product, and the obligation of Merck to develop or market
                                         any such Product shall be delayed or suspended so long as in Merck’s opinion any
                                         such condition or event exists. Upon such condition or event, Merck shall provide written
                                         notice thereof as soon as practicable to Cocrystal, keep Cocrystal informed of the steps
                                         being taken to remedy it and use Commercially Reasonable Efforts to avoid and to promptly
                                         remedy the delay or suspension.



 


		3.8	Regulatory
                                         Matters. In the event that Merck determines that
                                         any regulatory filings for any Compounds or Products are required for any activities
                                         hereunder (including any activities under the Research Program), including INDs, NDAs
                                         and other Marketing Authorizations (as applicable), then as between the Parties, Merck
                                         (or its Affiliate or Related Party) shall have the sole right, in its discretion, to
                                         obtain such regulatory filings (in its (or its Affiliate’s or its Related Party’s)
                                         name) and as between the Parties, Merck (or its Affiliate or its Related Party) shall
                                         be the owner of all such regulatory filings. As between the Parties, Merck (or its Affiliate
                                         or Related Party) shall have the sole right to communicate and otherwise interact with
                                         Regulatory Authorities with respect to the Compounds and/or Products (including during
                                         the Research Program Term). For clarity, Cocrystal shall have no right to, and shall
                                         not, make any regulatory filings related to any Compounds or Products or otherwise interact
                                         with any Regulatory Authorities with respect to the Compounds or Products.



 


Article
4 CONFIDENTIALITY AND PUBLICATION.


 


		4.1	Nondisclosure
                                         Obligation. All Information disclosed by one Party
                                         to the other Party hereunder shall be maintained in confidence by the receiving Party
                                         and shall not be disclosed to any Third Party or used for any purpose except as set forth
                                         herein without the prior written consent of the disclosing Party, except to the extent
                                         that such Information:



 


		4.1.1	is
                                         known by the receiving Party at the time of its receipt, and not through a prior disclosure
                                         by the disclosing Party, as documented by the receiving Party’s business records;



 


		4.1.2	is
                                         in the public domain by use and/or publication before its receipt from the disclosing
                                         Party, or thereafter enters the public domain through no fault of the receiving Party;



 




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		4.1.3	is
                                         subsequently disclosed to the receiving Party by a Third Party who may lawfully do so
                                         and is not under an obligation of confidentiality to the disclosing Party;



 


		4.1.4	is
                                         developed by the receiving Party independently of Information received from the disclosing
                                         Party, as documented by the receiving Party’s business records;



 


		4.1.5	is
                                         disclosed to governmental or other regulatory agencies in order to obtain patents or
                                         to gain or maintain approval to conduct clinical trials or to market Product, but such
                                         disclosure may be only to the extent reasonably necessary to obtain patents or authorizations;



 


		4.1.6	is
                                         deemed necessary by Merck to be disclosed to Related Parties, agent(s), consultant(s),
                                         and/or other Third Parties for any and all purposes Merck and its Affiliates deem necessary
                                         or advisable in the ordinary course of business in accordance with this Agreement on
                                         the condition that such Third Parties agree to be bound by confidentiality and non-use
                                         obligations that substantially are no less stringent than those confidentiality and non-use
                                         provisions contained in this Agreement; provided, however, that the term of confidentiality
                                         for such Third Parties shall be no less than [*]; or



 


		4.1.7	is
                                         deemed necessary by counsel to the receiving Party to be disclosed to such Party’s
                                         attorneys, independent accountants or financial advisors for the sole purpose of enabling
                                         such attorneys, independent accountants or financial advisors to provide advice to the
                                         receiving Party, on the condition that such attorneys, independent accountants and financial
                                         advisors agree to be bound by the confidentiality and non-use obligations contained in
                                         this Agreement; provided, however, that the term of confidentiality for
                                         such attorneys, independent accountants and financial advisors shall be no less than
                                         [*].



 


Any
combination of features or disclosures shall not be deemed to fall within the foregoing exclusions merely because individual features
are published or available to the general public or in the rightful possession of the receiving Party unless the combination itself
and principle of operation are published or available to the general public or in the rightful possession of the receiving Party.


 


If
a Party is required by judicial or administrative process (including a request for discovery received in an arbitration or litigation
proceeding) to disclose Information that is subject to the non-disclosure provisions of this Section 4.1 or Section 4.2, such
Party shall promptly inform the other Party of the disclosure that is being sought in order to provide the other Party an opportunity
to challenge or limit the disclosure obligations. Information that is disclosed by judicial or administrative process shall remain
otherwise subject to the confidentiality and non-use provisions of this Section 4.1 and Section 4.2, and the Party disclosing
Information pursuant to law or court order shall take all steps reasonably necessary, including without limitation obtaining an
order of confidentiality, to ensure the continued confidential treatment of such Information.


 


		4.2	Cocrystal
                                         Know-How. Each Party agrees to keep all Cocrystal
                                         Know-How and Collaboration Information and Inventions confidential in accordance with
                                         Section 4.1, provided, however, that, after expiration or termination of
                                         this Agreement, Cocrystal shall not be obligated to keep Cocrystal Know-How confidential
                                         and each Party may disclose Collaboration Information and Inventions to Affiliates and
                                         Third Parties on a confidential basis.



 




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		4.3	Publication.
                                         Merck and Cocrystal each acknowledge the other
                                         Party’s interest in publishing the results of the Research Program in order to
                                         obtain recognition within the scientific community and to advance the state of scientific
                                         knowledge. Each Party also 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 Section 4.1, either Party wishing to make a publication
                                         with respect to the research under the Research Program, whether before or up to [*]
                                         after the end of the Research Program Term, shall deliver to the other Party a copy of
                                         the proposed written publication or an outline of an oral disclosure at least [*] prior
                                         to submission for publication or presentation. The reviewing Party shall have the right
                                         (a) to propose modifications to the publication or presentation for patent reasons, trade
                                         secret reasons or business reasons or (b) to request a reasonable delay in publication
                                         or presentation in order to protect patentable information. If the reviewing Party requests
                                         a delay, the publishing Party shall delay submission or presentation for a period of
                                         not to exceed [*] as necessary to enable patent applications protecting each Party’s
                                         rights in such information to be filed in accordance with Article 7. If the reviewing
                                         Party requests modifications to the publication or presentation, the publishing Party
                                         shall edit such publication to prevent disclosure of trade secret or proprietary business
                                         information prior to submission of the publication or presentation. In addition to the
                                         foregoing, (i) during the Research Program Term, any publication or presentation shall
                                         require the express approval of the Committee and (ii) [*] any publication or presentation
                                         shall require the written approval of Merck, provided, however, that Merck
                                         shall keep Cocrystal informed of the status of its review and approval of any proposed
                                         publication or presentation.



 


		4.4	Publicity/Use
                                         of Names. No disclosure of the existence,
                                         or the terms, of this Agreement may be made by either Party, and no Party shall use the
                                         name, trademark, trade name or logo of the other Party, its Affiliates or their respective
                                         employee(s) in any publicity, promotion, news release or disclosure relating to this
                                         Agreement or its subject matter, without the prior express written permission of the
                                         other Party, except as may be required to comply with applicable law (including securities
                                         law, and filings required by the U.S. Securities and Exchange Commission); provided,
                                         that such disclosing Party shall give the other Party reasonable advance written notice
                                         of such required disclosure, to the extent permitted by law, and provide such other Party
                                         with at least [*] to review such disclosure and propose reasonable modifications (including
                                         redactions); provided further that the disclosing Party shall be required to edit
                                         such disclosure as requested by such other Party to prevent disclosure of trade secret
                                         or proprietary business information except to the extent the U.S. Securities and Exchange
                                         Commission does not allow redaction of such information. Notwithstanding the foregoing,
                                         promptly following the Effective Date, Cocrystal may issue the press release attached
                                         hereto as Schedule 4.4.



 


Article
5 PAYMENTS; ROYALTIES AND REPORTS


 


		5.1	Upfront
                                         Payment. In consideration for the licenses and other rights granted to Merck herein
                                         under the Cocrystal Patent Rights and Cocrystal Know-How,
                                         upon the terms and conditions contained herein, Merck shall pay to Cocrystal an amount
                                         equal to Four Million United States Dollars ($4,000,000), payable within thirty (30)
                                         days of the Effective Date.



 


		5.2	Research
                                         Program Funding. The funding for Cocrystal FTEs during the Research Program Term
                                         for which Merck is responsible under Section 2.3 shall be due and payable [*] as further
                                         provided in this Section 5.2.



 


		5.2.1	Quarterly
                                         FTE Payments. During the Research Program Term, Merck shall pay Cocrystal the FTE
                                         Rate for [*]. Such payments by Merck will be payable to Cocrystal within [*] after Merck’s
                                         receipt of [*] invoice from Cocrystal, in an amount equal to [*].



 


		5.2.2	[*]



 




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		5.2.3	[*]



 


		5.2.4	Reimbursement
                                         of Certain Expenses. Merck shall reimburse Cocrystal for out-of-pocket costs incurred
                                         by Cocrystal in performing the Research Plan to the extent such out-of-pocket costs are
                                         expressly set forth in the budget attached hereto as Schedule 5.2.4 (the “Expense
                                         Budget”) and to the extent Cocrystal provides appropriate documentation (including
                                         original receipts); provided, however, that in no event shall Cocrystal
                                         be entitled to receive payment for (and Cocrystal shall be solely responsible for) any
                                         and all out-of-pocket costs that are in excess of [*] of the total out-of-pocket costs
                                         set forth in the budget for the Research Program. Cocrystal shall issue invoices to Merck
                                         for such out-of-pockets costs [*] with no mark-up on cost. All such invoices shall be
                                         issued in U.S. dollars. Merck shall pay the undisputed amount of such invoices within
                                         [*] after receipt thereof.



 


		5.3	Milestone
                                         Payments. Subject to the terms and
                                         conditions of this Agreement, Merck shall pay to Cocrystal the following milestone payments,
                                         for which Merck (or its Related Party(ies)) achieves the following milestone events hereunder
                                         during the Term:



 


		5.3.1	Initiation
                                         of [*]: [*];



 


		5.3.2	Initiation
                                         of [*]: [*];



 


		5.3.3	Initiation
                                         of [*]: [*];



 


		5.3.4	Initiation
                                         of [*]: [*];



 


		5.3.5	Marketing
                                         Authorization from [*]: [*];



 


		5.3.6	Marketing
                                         Authorization from [*]: [*];



 


		5.3.7	Marketing
                                         Authorization from [*]: [*];



 


		5.3.8	[*]
                                         in Net Sales of a Product worldwide by Merck and its Related Parties in a given Calendar
                                         Year: [*]; and



 


		5.3.9	[*]
                                         in Net Sales of a Product worldwide by Merck and its Related Parties in a given Calendar
                                         Year: [*].



 


Merck
shall notify Cocrystal in writing within [*] following the achievement of each milestone [*]. With respect to the achievement
of a milestone [*], Merck shall make the appropriate milestone payment within [*]. With respect to the achievement of a milestone
[*], Merck shall make the appropriate milestone payment within [*]. The milestone payments shall be payable only upon the initial
achievement of such milestone by any Product and no amounts shall be due hereunder for subsequent or repeated achievement of such
milestone by such Product or any other Product.


 


		5.4	Royalties.



 


		5.4.1	Royalties
                                         Payable By Merck. Subject to the terms and conditions of this Agreement, Merck shall
                                         pay Cocrystal royalties, calculated on a Product-by-Product basis, as set forth in this
                                         Section 5.4.



 




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		(a)	Patent
                                         Royalties. Merck shall pay Cocrystal royalties in an amount equal to the following
                                         percentage of Net Sales of Products by Merck and its Related Parties where sale of Product
                                         would infringe a Valid Patent Claim in the country of sale (“Patent Net Sales”):



 


		(1)	[*]
                                         of worldwide Patent Net Sales in each Calendar Year up to and including [*];



 


		(2)	[*]
                                         of worldwide Patent Net Sales in each Calendar Year for the portion of Patent Net Sales
                                         exceeding [*] up to and including [*];



 


		(3)	[*]
                                         of worldwide Patent Net Sales in each Calendar Year for the portion of Patent Net Sales
                                         exceeding [*] up to and including [*];



 


		(4)	[*]
                                         of worldwide Patent Net Sales in each Calendar Year for the portion of Patent Net Sales
                                         exceeding [*] up to and including [*]; and



 


		(5)	[*]
                                         of worldwide Patent Net Sales in each Calendar Year for the portion of Patent Net Sales
                                         exceeding [*].



 


		(b)	Know-How
                                         Royalty. Merck shall pay Cocrystal royalties in an amount equal to the following
                                         percentage of Net Sales of Products by Merck or its Related Parties where sale of Product
                                         would not infringe a Valid Patent Claim in the country of sale (“Know-How Net
                                         Sales”) for a period of [*] after First Commercial Sale of such Product in
                                         such country:



 


		(1)	[*]
                                         of worldwide Know-How Net Sales in each Calendar Year up to and including [*];



 


		(2)	[*]
                                         of worldwide Know-How Net Sales in each Calendar Year for the portion of Know-How Net
                                         Sales exceeding [*] up to and including [*];



 


		(3)	[*]
                                         of worldwide Know-How Net Sales in each Calendar Year for the portion of Know-How Net
                                         Sales exceeding [*] up to and including [*];



 


		(4)	[*]
                                         of worldwide Know-How Net Sales in each Calendar Year for the portion of Know-How Net
                                         Sales exceeding [*] up to and including [*]; and



 


		(5)	[*]
                                         of worldwide Know-How Net Sales in each Calendar Year for the portion of Know-How Net
                                         Sales exceeding [*].



 


		(c)	Royalty
                                         tiers in Section 5.4.1(a) shall be calculated based on worldwide Patent Net Sales of
                                         each Product, and royalty tiers in Section 5.4.1(b) shall be calculated based on worldwide
                                         Know-How Net Sales of each Product, provided that the determination of whether
                                         the royalty shall be calculated under Section 5.4.1(a) or 5.4.1(b) shall be determined
                                         on a country-by-country basis. Royalties on each Product at the rates set forth above
                                         shall continue on a country-by-country basis until the expiration of the later of: (i)
                                         the last-to-expire Valid Patent Claim claiming the Compound in such country; or (ii)
                                         for a period of [*] after First Commercial Sale of such Product in such country.



 




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		(d)	All
                                         royalties are subject to the following conditions:



 


		(i)	that
                                         only one royalty shall be due with respect to the same unit of Product;



 


		(ii)	that
                                         no royalties shall be due upon the sale or other transfer among Merck or its Related
                                         Parties, but in such cases the royalty shall be due and calculated upon Merck’s
                                         or its Related Party’s Net Sales to the first independent Third Party;



 


		(iii)	no
                                         royalties shall accrue on the sale or other disposition of Product by Merck or its Related
                                         Parties for use in a Clinical Trial; and



 


		(iv)	no
                                         royalties shall accrue on the disposition of Product in reasonable quantities by Merck
                                         or its Related Parties as samples (promotion or otherwise) or as donations (for example,
                                         to non-profit institutions or government agencies for a non-commercial purpose).



 


		5.4.2	Change
                                         in Sales Practices. The Parties acknowledge that during the Term, Merck’s sales
                                         practices for the marketing and distribution of Product may change to the extent to which
                                         the calculation of the payment for royalties on Net Sales may become impractical or even
                                         impossible. In such event the Parties agree to meet and reasonably discuss in good faith
                                         new ways of compensating Cocrystal to the extent currently contemplated under Section
                                         5.4.1.



 


		5.4.3	Royalties
                                         for Bulk Compound. In those cases in which Merck sells bulk Compound rather than
                                         Product in packaged form to an independent Third Party, the royalty obligations of this
                                         Section 5.4 shall be applicable to the bulk Compound sales.



 


		5.4.4	Compulsory
                                         Licenses. If a compulsory license is granted to a Third Party with respect to Compound
                                         or Product in any country in the Territory with a royalty rate lower than the royalty
                                         rate provided by Section 5.4.1, then the royalty rate to be paid by Merck on Net Sales
                                         in that country under Section 5.4.1 shall be reduced to the rate paid by the compulsory
                                         licensee.



 


		5.4.5	Third
                                         Party Licenses. In the event that Merck obtains a license under, or other rights
                                         to, Patent Rights from any Third Party(ies) that would be necessary or advisable to avoid
                                         infringement of such Patent Rights in a country in order to make, have made, use, import,
                                         offer to sell and/or sell Product(s) (or Compound(s) contained in such Product(s)) (hereinafter
                                         “Third Party Licenses”),
                                         [*] of any and all payments (including royalties and any payments for obtaining such
                                         right or license) actually paid under such Third Party Licenses by Merck or its Related
                                         Parties in connection with the manufacture, use, sale or import, as applicable, of Product(s)
                                         (or Compound(s) contained in such Product(s)) for a Calendar Quarter in the country for
                                         the Product shall be creditable against the royalty payments due Cocrystal by Merck with
                                         respect to the sale of such Product in the country in such Calendar Quarter. Notwithstanding
                                         the foregoing, in no event shall the royalties owed by Merck to Cocrystal for such Calendar
                                         Quarter with respect to sale of the Product in the country be [*] pursuant to this Section
                                         5.4.5 (provided, however, that to the extent Merck is not able to [*] of
                                         the amounts paid by Merck or its Related Parties under any Third Party License as a result
                                         of the foregoing restriction, then Merck shall be entitled to carry forward such right
                                         of off-set to future royalty payments due Cocrystal by Merck with respect to the sale
                                         of such Product in the country in future Calendar Quarters with respect to such excess
                                         amount, provided that the royalty that is otherwise due Cocrystal with respect
                                         to sale of the Product in the country is not reduced by more than [*] pursuant to this
                                         Section 5.4.5). At the request of Merck, Cocrystal shall provide assistance to Merck
                                         (or its Related Parties) in obtaining any such Third Party Licenses or otherwise taking
                                         action with respect Patent Rights of any Third Party(ies) that may be necessary in order
                                         to make, have made, use, import, offer to sell and/or sell Product(s) (or Compound(s)
                                         contained in such Product(s)).



 




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		5.5	Reports;
                                         Payment of Royalty. During the Term following the First Commercial Sale of a Product,
                                         Merck shall furnish to Cocrystal a [*] written report for the Calendar Quarter showing,
                                         on a country-by-country and Product-by-Product basis, the Net Sales (including the gross
                                         invoice price exclusive of applicable taxes, aggregate deductions, and the number of
                                         units of Product sold) of all Products subject to royalty payments sold by Merck and
                                         Related Parties in the Territory during the reporting period and the royalties payable
                                         under this Agreement (including the applicable royalty rate and any adjustment pursuant
                                         to Section 5.4.5, if applicable). Reports shall be due on [*]. Royalties shown to have
                                         accrued by each royalty report shall be due and payable on the date such royalty report
                                         is due. Merck shall keep complete and accurate records in sufficient detail to enable
                                         the royalties payable hereunder to be determined.



 


		5.6	Audits.



 


		5.6.1	Upon
                                         the written request of Cocrystal and not more than [*], Merck shall permit an independent
                                         certified public accounting firm of nationally recognized standing selected by Cocrystal
                                         and reasonably acceptable to Merck, at Cocrystal’s expense, to have access during
                                         normal business hours to such of the records of Merck, its Affiliates and any of its
                                         Related Parties who have Net Sales in Major Countries as may be reasonably necessary
                                         to verify the accuracy of the royalty reports hereunder for any Calendar Year ending
                                         not more than [*] prior to the date of such request. The accounting firm shall disclose
                                         to Cocrystal only whether the royalty reports are correct or incorrect and the amount
                                         of any discrepancy. No other information shall be provided to Cocrystal.



 


		5.6.2	If
                                         such accounting firm correctly identifies a discrepancy made during such period, the
                                         appropriate Party shall pay the other Party the amount of the discrepancy within [*]
                                         of the date Cocrystal delivers to Merck such accounting firm’s written report so
                                         correctly concluding, or as otherwise agreed upon by the Parties. The fees charged by
                                         such accounting firm shall be paid by Cocrystal; provided, however, that
                                         if such audit uncovers an underpayment of royalties by Merck that exceeds the greater
                                         of [*] and [*] of the total royalties owed, then the fees of such accounting firm shall
                                         be paid by Merck.



 


		5.6.3	Merck
                                         shall include in each sublicense granted by it pursuant to this Agreement a provision
                                         requiring the sublicensee to make reports to Merck, to keep and maintain records of sales
                                         made pursuant to such sublicense and to grant access to such records by Cocrystal’s
                                         independent accountant to the same extent required of Merck under this Agreement.



 


		5.6.4	Upon
                                         the expiration of [*] following the end of any Calendar Year, the calculation of royalties
                                         payable with respect to such Calendar Year shall be binding and conclusive upon Cocrystal
                                         unless subject to a current audit, and Merck and its Related Parties shall be released
                                         from any liability or accountability with respect to royalties for such Calendar Year.



 




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		5.6.5	Cocrystal
                                         shall treat all financial information subject to review under this Section 5.6 or under
                                         any sublicense agreement in accordance with the confidentiality and non-use provisions
                                         of this Agreement, and shall cause its accounting firm to enter into an acceptable confidentiality
                                         agreement with Merck and/or its Related Parties obligating it to retain all such information
                                         in confidence pursuant to such confidentiality agreement.



 


		5.7	Payment
                                         Exchange Rate. All payments to be made by Merck
                                         to Cocrystal under this Agreement shall be made in United States dollars and may be paid
                                         by bank wire transfer in immediately available funds to such bank account in the United
                                         States as may be designated in writing by Cocrystal from time to time. In the case of
                                         sales outside the United States, the rate of exchange to be used in computing the monthly
                                         amount of currency equivalent in United States dollars due Cocrystal shall be made at
                                         the monthly rate of exchange utilized by Merck in its worldwide accounting system. 



 


		5.8	Tax
                                         Matters. Cocrystal shall be liable for all taxes
                                         based on, measured by, or calculated with respect to, income or profits of Cocrystal
                                         (“Income Taxes”) imposed upon any
                                         payments made by Merck to Cocrystal under this Article 5 (“Agreement Payments”).
                                         If applicable laws, rules or regulations require the withholding of Income Taxes, Merck
                                         shall make such withholding payments as are required to be made from the Agreement Payment,
                                         shall subtract the amount thereof from the Agreement Payments and shall pay over such
                                         amount withheld and deducted to the proper governmental authorities. Merck shall submit
                                         to Cocrystal appropriate proof of payment of the withheld Income Taxes as well as the
                                         official receipts within a reasonable period of time following payment thereof. Merck
                                         shall provide Cocrystal reasonable assistance in order to allow Cocrystal to reduce or
                                         mitigate any such Income Tax withholding to the extent permitted under applicable laws,
                                         including to obtain the benefit of any present or future treaty against double taxation
                                         which may apply to the Agreement Payments. [*] 



 


Article
6 REPRESENTATIONS AND WARRANTIES


 


		6.1	Representations
                                         and Warranties of Each Party. Each
                                         Party represents and warrants to the other Party that as of the Effective Date:



 


		6.1.1	such
                                         Party is duly organized and validly existing under the laws of the state or jurisdiction
                                         of its organization and has full corporate right, power and authority to enter into this
                                         Agreement and to perform its obligations hereunder;



 


		6.1.2	the
                                         execution and delivery of this Agreement and the consummation of the transactions contemplated
                                         hereby have been duly authorized by the necessary corporate actions of such Party. This
                                         Agreement has been duly executed by such Party. This Agreement and any other documents
                                         contemplated hereby constitute valid and legally binding obligations of such Party enforceable
                                         against it in accordance with their respective terms, except to the extent that enforcement
                                         of the rights and remedies created thereby is subject to bankruptcy, insolvency, reorganization,
                                         moratorium and other similar laws of general application affecting the rights and remedies
                                         of creditors; and



 




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		6.1.3	the
                                         execution, delivery and performance by such Party of this Agreement and any other agreements
                                         and instruments contemplated hereunder will not (i) in any respect violate any statute,
                                         regulation, judgment, order, decree or other restriction of any governmental authority
                                         to which such Party is subject, (ii) violate any provision of the corporate charter,
                                         by-laws or other organizational documents of such Party, or (iii) constitute a material
                                         violation or breach by such Party of any provision of any material contract, agreement
                                         or instrument to which such Party is a party or to which such Party may be subject although
                                         not a party.



 


		6.2	Cocrystal
                                         Representations and Warranties. Cocrystal
                                         represents and warrants to Merck that as of the Effective Date:



 


		6.2.1	all
                                         Patent Rights within the Cocrystal Patent Rights are in full force and effect, and, to
                                         the best of Cocrystal’s knowledge, the Cocrystal Patent Rights and Cocrystal Know-How
                                         are not invalid or unenforceable, in whole or in part;
	 	 	 
		6.2.2	it
                                         has the full right, power and authority to enter into this Agreement, to perform the
                                         activities hereunder, including the Research Program, and to grant the licenses granted
                                         hereunder (including under Article 3);
	 	 	 
		6.2.3	except
                                         for the transfer of Cocrystal Know-How to [*] for the performance of services as set
                                         forth in Schedule 3.4, it (and its Affiliates) has not prior to the Effective
                                         Date (i) assigned, transferred, conveyed or otherwise encumbered its right, title and
                                         interest in Cocrystal Patent Rights or Cocrystal Know-How, or (ii) otherwise granted
                                         any rights to any Third Parties that would conflict with the rights granted to Merck
                                         hereunder;
	 	 	 
		6.2.4	[*]
                                         it is the sole and exclusive owner of the Cocrystal Patent Rights and Cocrystal Know-How,
                                         all of which are free and clear of any liens, charges and encumbrances, and no other
                                         person, corporate or other private entity, or governmental entity or subdivision thereof,
                                         has any claim of ownership whatsoever with respect to the Cocrystal Patent Rights and
                                         Cocrystal Know-How;
	 	 	 
		6.2.5	neither
                                         it nor any of its Affiliates has received any written notification from a Third Party
                                         that the research, development, manufacture, use, sale or import of Compounds or Products
                                         infringes or misappropriates the Patent Rights or know-how owned or controlled by such
                                         Third Party, and Cocrystal has no knowledge that a Third Party has any basis for any
                                         such claim;
	 	 	 
		6.2.6	[*]
                                         the exercise of the license granted to Merck under the Cocrystal Patent Rights and Cocrystal
                                         Know-How, including without limitation the development, manufacture, use, sale and import
                                         of Compounds and Products do not interfere with or infringe any intellectual property
                                         rights owned or possessed by any Third Party;
	 	 	 
		6.2.7	there
                                         are no claims, judgments or settlements against or owed by Cocrystal (or any of its Affiliates)
                                         and no pending or threatened claims or litigation relating to the Cocrystal Patent Rights
                                         and Cocrystal Know-How;
	 	 	 
		6.2.8	Cocrystal
                                         has disclosed to Merck all reasonably relevant information regarding (i) the Compounds
                                         and/or Products and/or (ii) the Cocrystal Patent Rights and Cocrystal Know-How licensed
                                         under this Agreement, including (a) any licenses and material agreements related to the
                                         Cocrystal Patent Rights, Cocrystal Know-How, Compounds and/or Products and (b) and safety
                                         or efficacy information related to the Compounds and/or Products;






 



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	 	6.2.9	Cocrystal
    has disclosed to Merck the existence of any patent opinions related to the Cocrystal Patent Rights and Cocrystal Know-How
    licensed under this Agreement; 
	 	 	 
	 	6.2.10	Cocrystal
    has complied with all existing country-specific laws and regulations involving inventor remuneration associated with the Cocrystal
    Patent Rights; 
	 	 	 
	 	6.2.11	Schedule
    1.10 sets forth a true, correct and complete list of Cocrystal Patent Rights existing as of the Effective Date. The Cocrystal
    Patent Rights and Cocrystal Know-How constitute all intellectual property owned or otherwise Controlled (through license or
    otherwise) by Cocrystal (or any of its Affiliates) that relate to the Compounds and/or Products or the development, manufacture,
    commercialization and/or use thereof;
	 	 	 
	 	6.2.12	neither
    Cocrystal nor any of its Affiliates has obtained, or filed for, any INDs, NDAs or Marketing Authorizations for any Compounds
    or Products, and, to the best of Cocrystal’s knowledge, no other Person has obtained, or filed for, any INDs, NDAs or
    Marketing Authorizations for any Compounds or Products;
	 	 	 
	 	6.2.13	Cocrystal
    (and its Affiliates) has not employed or otherwise used in any capacity in the past [*], and will not employ or otherwise
    use in any capacity, the services of any Person debarred under United States law, including under Section 21 USC 335a or any
    foreign equivalent thereof, with respect to the Compounds or Products or otherwise in performing any portion of the Research
    Program. 
	 	 	 
	 	6.2.14	all
    research and development (including non-clinical studies) related to the Compounds prior to the Effective Date has been conducted
    in accordance with all Applicable Laws; 
	 	 	 
	 	6.2.15	except
    for the transfer of Cocrystal Know-How to [*] for the performance of services as set forth in Schedule 3.4, there are
    no agreements (including any licenses), written or oral, granting any licenses or other rights to (or from) Cocrystal (or
    any of its Affiliates) relating to the Compounds or Products or the Cocrystal Know-How or Cocrystal Patent Rights;
	 	 	 
	 	6.2.16	all
    information and data provided by or on behalf of Cocrystal to Merck on or before the Effective Date in contemplation of this
    Agreement was and is true and accurate and complete in all material respects, and Cocrystal has not intentionally disclosed,
    failed to disclose, or cause to be disclosed, any information or data that would reasonably be expected to cause the information
    and data that has been disclosed to be misleading in any material respect; and 
	 	 	 
	 	6.2.17	it
    has or expects to have the resources and capabilities to do the work contemplated by the Research Plan. 


 


	 	6.3	Indemnification.


 


	 	6.3.1	By
    Cocrystal. Cocrystal shall indemnify and defend Merck, its Affiliates and
    its and such Affiliates’ respective directors, officers, employees and agents from and against any Liabilities arising
    out of or relating to Cocrystal’s breach of any of its representations, warranties, covenants and obligations in this
    Agreement except to the extent arising out of or relating to Merck’s breach of any of its representations, warranties,
    covenants and obligations in this Agreement.


 




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	 	6.3.2	By
    Merck. Merck shall indemnify and defend Cocrystal, its Affiliates and its and such Affiliates’ respective directors,
    officers, employees and agents from and against any Liabilities arising out of or relating to Merck’s exercise of its
    licenses hereunder, including the research, development, manufacture, use, sale or other disposition of Compounds and Products
    by Merck or its Affiliates or Related Parties, or Merck’s breach of any of its representations, warranties, covenants
    and obligations in this Agreement, except to the extent arising out of or relating to Cocrystal’s breach of any of its
    representations, warranties, covenants and obligations in this Agreement. 


 


	 	6.4	Indemnification
    Procedure.


 


	 	6.4.1	Any
    Party that may be indemnified pursuant to Sections 6.3 (the “Indemnified Party”) shall give prompt written
    notification to the Party from whom indemnification is sought (the “Indemnifying Party”) of the assertion
    by a Third Party of any Liabilities for which indemnification may be sought (it being understood and agreed, however, that
    the failure by the Indemnified Party to give such notification shall not relieve the Indemnifying Party of its indemnification
    obligation under this Agreement except and only to the extent that such Indemnifying Party is actually prejudiced as a result
    of such failure to give such notification).
	 	 	 
	 	6.4.2	Within
    [*], the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such
    Liabilities [*] and will consult with the Indemnified Party with respect to a possible conflict of interest of such counsel
    retained by the Indemnifying Party. If the Indemnifying Party does not assume control of such defense, the Indemnified Party
    shall control such defense at the expense of the Indemnifying Party.
	 	 	 
	 	6.4.3	The
    Party not controlling such defense may participate therein at its own expense. If the Parties cannot agree as to the application
    of Section 6.3 or 6.4 to any claim, pending resolution of the dispute pursuant to Section 9.7, the Parties may conduct separate
    defenses of such claims, with each Party retaining the right to claim indemnification from the other Party in accordance with
    Section 6.3 or 6.4 upon resolution of the underlying claim.
	 	 	 
	 	6.4.4	The
    Party controlling such defense shall keep the other Party advised of the status of such action, suit, proceeding or claim
    and the defense thereof and shall consider in good faith recommendations made by the other Party with respect thereto. Such
    other Party shall provide such cooperation as may be reasonably requested by the Party controlling such defense in connection
    with or in furtherance of such defense.
	 	 	 
	 	6.4.5	The
    Indemnified Party shall not agree to any settlement of such action, suit, proceeding or claim without the prior written consent
    of the Indemnifying Party, which shall not be unreasonably withheld or delayed. The Indemnifying Party shall not agree to
    any settlement of such action, suit, proceeding or claim or consent to any judgment in respect thereof that does not include
    a complete and unconditional release of the Indemnified Party from all Liability with respect thereto or that imposes any
    Liability or obligation on the Indemnified Party without the prior written consent of the Indemnified Party, which shall not
    be unreasonably withheld or delayed.


 




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	Article
    7	PATENT
    PROVISIONS.


 


	 	7.1	Filing,
    Prosecution and Maintenance of Patents.


 


	 	7.1.1	Cocrystal
    Patent Rights. 


 


(a)
Merck agrees, at its expense, to file patent applications claiming Cocrystal Know-How and Cocrystal Patent Rights, and to
prosecute and maintain in the Territory, after appropriate consultation with Cocrystal, the Cocrystal Patent Rights licensed to
Merck under this Agreement. Merck shall give Cocrystal an opportunity to review the text of any patent application before filing,
shall consult with Cocrystal with respect thereto, and shall supply Cocrystal with a copy of the application when filed and as
filed, together with notice of its filing date and serial number. Merck shall keep Cocrystal promptly advised of the status of
Cocrystal Patent Rights and, upon Cocrystal’s request, shall provide advance copies of any papers related to the prosecution
and maintenance of Cocrystal Patent Rights. Merck shall promptly give notice to Cocrystal of the grant, lapse, revocation, surrender,
invalidation or abandonment of any Cocrystal Patent Rights licensed to Merck for which Merck is responsible for the filing, prosecution
and maintenance.


 


(b)
Merck shall give notice to Cocrystal and the Committee of any desire to not file patent applications claiming Cocrystal Patent
Rights or Cocrystal Know-How or to cease prosecution and/or maintenance of Cocrystal Patent Rights on a country by country basis
in the Territory. [*]


 


In
addition to the foregoing, in the event Merck does not continue the prosecution or maintenance of the applicable Cocrystal Patent
Rights, and such Cocrystal Patent Rights have been published by a patent office, Merck shall permit Cocrystal to continue the
prosecution or maintenance of the applicable patent application or patent at its own expense and Merck shall execute documents
in a timely manner as may be reasonably necessary to allow Cocrystal to continue such prosecution or maintenance.


 


	 	7.1.2	Collaboration
    Patent Rights. Merck shall have the first right to file, prosecute, and maintain patents and patent applications claiming
    Collaboration Information and Inventions. Merck shall keep Cocrystal promptly advised of the status of any actual and prospective
    patent filings and upon Cocrystal’s request, shall provide advance copies of any papers related to the filing of Collaboration
    Information and Inventions and the prosecution and maintenance of Collaboration Patent Rights. Merck shall give notice to
    Cocrystal of any desire to cease prosecution and/or maintenance of Collaboration Patent Rights on a country-by-country basis
    in the Territory [*]. 
	 	 	 
	 	7.1.3	Patent
    Term Extension. The Parties shall cooperate fully with each other to provide necessary information and assistance, as
    the other Party may reasonably request, in obtaining patent term extension or supplemental protection certificates or their
    equivalents in any country in the Territory where applicable to Cocrystal Patent Rights and Collaboration Patent Rights. In
    the event that elections with respect to obtaining such patent term extension are to be made, Merck shall have the right to
    make the election and Cocrystal agrees to abide by such election.
	 	 	 
	 	7.1.4	Other
    Cooperation. The Parties agree to cooperate fully and provide any information and assistance that either may reasonably
    request for the filing, prosecution and maintenance of Cocrystal Patent Rights and Collaboration Patent Rights. The Parties
    further agree to take reasonable actions to maximize the protections available under the safe harbor provisions of 35 U.S.C.
    102(c) for U.S. patents and patent applications. 


 




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	 	7.1.5	Filing,
    Prosecution and Maintenance Expenses. With respect to all filing, prosecution and maintenance activities under this Section
    7.1, the filing and/or prosecuting Party shall be responsible for payment of all costs and expenses related to such activities.
	 	 	 
	 	7.1.6	Inventor
    Remuneration. Cocrystal shall comply with all applicable country-specific inventor remuneration laws and regulations associated
    with Cocrystal Patent Rights and Collaboration Patent Rights when inventor remuneration obligations are triggered by an employee
    or contractor of Cocrystal or its Affiliates, or a Third Party acting on behalf of Cocrystal or its Affiliates. Merck shall
    comply with all applicable country-specific inventor remuneration laws and regulations associated with Cocrystal Patent Rights
    and Collaboration Patent Rights when inventor remuneration obligations are triggered by an employee or contractor of Merck
    or its Affiliates, or a Third Party acting on behalf of Merck or its Affiliates. For clarity, any applicable country-specific
    inventor remuneration paid by Merck or its Related Parties is not considered a payment subject to 5.4.5.


 


	 	7.2	Interference,
    Derivation, Opposition, Reexamination, Reissue, Supplemental Examination, Inter Partes Review and Post-Grant Review
    Proceedings. 


 


	 	7.2.1	Third
    Party Initiated Proceedings. Each Party shall, within [*] of learning of such event, inform the other Party of any request
    for, or filing or declaration of, any interference, derivation proceeding, opposition, reexamination requested by a Third
    Party, inter partes review, post-grant review or similar contested administrative proceeding involving a Third Party
    relating to Cocrystal Patent Rights or Collaboration Patent Rights. Merck and Cocrystal shall thereafter consult and cooperate
    fully to determine a course of action with respect to any such proceeding. Merck shall have the first right to control such
    proceedings with respect to Cocrystal Patent Rights and Collaboration Patent Rights, and Cocrystal shall have the right to
    review and approve any submission to be made in connection with such proceeding, which approval will not be unreasonably withheld
    or delayed, and shall be provided copies of all documents filed in connection with such proceedings. In the event that Merck
    chooses not to control such proceeding under this Section 7.2.1, and upon Merck’s written consent with respect to Collaboration
    Patent Rights, which consent shall not be unreasonably withheld or delayed, Cocrystal shall have the right to control such
    proceeding.
	 	 	 
	 	7.2.2	Party
    Initiated Proceedings. Merck shall have the first right, at its expense, to initiate a reexamination, supplemental examination,
    reissue or similar administrative proceeding relating to Cocrystal Patent Rights or Collaboration Patent Rights. Notwithstanding
    the foregoing, Merck shall not initiate any such proceeding without the prior written consent of Cocrystal, which consent
    shall not be unreasonably withheld or delayed. Cocrystal shall have the right to review and approve any submission to be made
    in connection with such proceeding, which approval shall not be unreasonably withheld or delayed, and shall be provided copies
    of all documents filed in connection with such proceedings. If there is disagreement regarding whether a reexamination, supplemental
    examination, reissue or similar administrative proceeding relating to Cocrystal Patent Rights or Collaboration Patent Rights
    should be initiated, such disagreement shall be referred to the senior intellectual property officers of the Parties. In the
    event that these two executives do not, after reasonable good faith efforts, reach agreement, the resolution and/or course
    of conduct shall be determined by Merck, in good faith, with respect to Collaborative Patent Rights. In the event that Merck
    chooses not to initiate a proceeding under this Section 7.2.2, and upon Merck’s written consent with respect to Collaboration
    Patent Rights, which consent shall not be unreasonably withheld or delayed, Cocrystal shall have the right to initiate such
    proceedings. The initiating Party shall have the first right to control such proceedings.


 




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	 	7.2.3	Cooperation.
    In connection with any administrative proceeding under Section 7.2.1 or 7.2.2, Merck and Cocrystal shall cooperate fully
    and provide each other with any information or assistance that either may reasonably request. The Parties shall keep each
    other informed of developments in any such action or proceeding, including the status of any settlement negotiations and the
    terms of any offer related thereto. For any proceeding, the controlling Party shall obtain the prior approval from the other
    Party of any settlement offer or settlement agreement, which approval shall not be unreasonably withheld or delayed. 
	 	 	 
	 	7.2.4	Expenses.
    The Party controlling any administrative proceeding pursuant to Section 7.2.1 and 7.2.2 shall bear all expenses related
    thereto, with the exception that each Party shall have the right to be represented by counsel of its own choice at its own
    expense.


 


	 	7.3	Enforcement
    and Defense.


 


	 	7.3.1	The
    Parties shall give notice to each other of either (i) any infringement of Cocrystal Patent Rights or Collaboration Patent
    Rights, or (ii) any misappropriation or misuse of Cocrystal Know-How or Collaboration Information and Inventions, that may
    come to its attention. Merck and Cocrystal shall thereafter consult and cooperate fully to determine a course of action, including
    but not limited to the commencement of legal action by either or both Merck and Cocrystal, to terminate any infringement of
    Cocrystal Patent Rights or Collaboration Patent Rights or any misappropriation or misuse of Cocrystal Know-How or Collaboration
    Information and Inventions. Merck, upon notice to Cocrystal, shall have the first right to initiate and prosecute legal action
    at its expense and in the name of Merck and/or Cocrystal, or to control the defense of any declaratory judgment action relating
    to Cocrystal Patent Rights, Cocrystal Know-How, Collaboration Patent Rights or Collaboration Information and Inventions. Each
    Party shall have the right to be represented by counsel of its own choice at its own expense.
	 	 	 
	 	7.3.2	Merck
    shall promptly inform Cocrystal if it elects not to exercise its first right under Section 7.3.1 to initiate and prosecute
    legal action, and Cocrystal shall thereafter have the right, at its expense, to either initiate and prosecute such action
    or to control the defense of such declaratory judgment action in the name of Cocrystal and, if necessary, Merck. Each Party
    shall have the right to be represented by counsel of its own choice at its own expense. 
	 	 	 
	 	7.3.3	For
    any action to terminate any infringement of Cocrystal Patent Rights or Collaboration Patent Rights or any misappropriation
    or misuse of Cocrystal Know-How or Collaboration Information and Inventions, in the event that a Party is unable to initiate
    or prosecute such action solely in its own name, the other Party will join such action voluntarily and will execute and cause
    its Affiliates to execute all documents necessary for the Party to initiate litigation to prosecute and maintain such action
    under this Section 7.3. In connection with any action or potential action, Merck and Cocrystal will cooperate fully and will
    provide each other with any information or assistance that either may reasonably request, including cooperating with regard
    to any pre-litigation review of the Cocrystal Patent Rights and Collaboration Patent Rights. Each Party shall keep the other
    informed of developments in any action or proceeding and provide the other Party, upon request, with copies of documents filed
    in connection therewith. For any proceeding, the controlling Party shall obtain the approval from the other Party of any settlement
    offer or settlement agreement, which approval shall not be unreasonably withheld or delayed.


 




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	 	7.3.4	Any
    recovery obtained by either or both Merck and Cocrystal in connection with or as a result of any action contemplated by this
    Section 7.3, whether by settlement or otherwise, shall be shared in order as follows:


 


	 	(a)	the
    Party which initiated and prosecuted the action shall recoup all of its costs and expenses incurred in connection with the
    action;
	 	 	 
	 	(b)	the
    other Party shall then, to the extent possible, recover its costs and expenses incurred in connection with the action; and
	 	 	 
	 	(c)	the
    amount of any recovery remaining shall then be allocated between the Parties on a pro-rata basis taking into consideration
    the relative economic losses suffered by each Party.


 


	 	7.3.5	Each
    Party shall inform the other Party of any certification regarding any Cocrystal Patent Rights or Collaboration Patent Rights
    it has received pursuant to either 21 U.S.C. §§355(b)(2)(A)(iv) or (j)(2)(A)(vii)(IV), or its successor provisions
    or any similar provisions in a country in the Territory other than the United States, and shall provide a copy of such certification
    within [*] of receipt. Merck has the first right to initiate and prosecute any legal action as a result of such certification;
    provided, however, that Merck shall inform Cocrystal of such decision to initiate such action within [*] of
    receipt of the certification, after which time Cocrystal shall have the right to initiate and prosecute such action. Regardless
    of which Party has the right to initiate and prosecute such action, both Parties shall, as soon as practicable after receiving
    notice of such certification, convene and consult with each other regarding the appropriate course of conduct for such action.
    The non-initiating Party shall have the right to be kept fully informed and participate in decisions regarding the appropriate
    course of conduct for such action, and the right to join and participate in such action. Cocrystal’s and Merck’s
    rights and obligations with respect to the prosecution of any legal action as a result of such certification and any recovery
    obtained as a result of such legal action shall be as defined in Sections 7.3.3 and 7.3.4. 


 


	Article
    8	TERM
    AND TERMINATION


 


	 	8.1	Term
    and Expiration. This Agreement shall be effective as of the Effective Date and unless terminated earlier pursuant to Sections
    8.2 or 8.3, this Agreement shall continue in full force and effect on a Product-by-Product and country-by-country basis until
    expiration of all Merck royalty obligations hereunder with respect to such Product in such country. Upon expiration of this
    Agreement as to each Product and country, Merck’s licenses pursuant to Section 3.1 and 3.2 shall become fully paid-up,
    perpetual [*] licenses. The period from the Effective Date until the date of expiration or earlier termination of this Agreement
    in its entirety, or as the case may be, until the date of the expiration or earlier termination of this Agreement in part
    with respect to a given Product on a country-by-country basis, shall be referred to herein as the “Term”.


 




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	 	8.2	Termination
    by Merck. Notwithstanding anything contained herein to the contrary, prior to the First Commercial Sale of the first Product
    hereunder, Merck shall have the right to terminate this Agreement at any time in its sole discretion by giving [*] advance
    written notice to Cocrystal. For the avoidance of doubt, termination by Merck under this Section 8.2 can be effected only
    through a written notice specifically referring to this Section 8.2. No later than [*] after the effective date of such termination,
    each Party shall return or cause to be returned to the other Party all Information received from the other Party and all copies
    thereof; provided, however, that each Party may keep one copy of Information received from the other Party in
    its confidential files for record purposes, and Merck and its Affiliates may retain Information reasonably necessary to practice
    under its continued license to use Cocrystal Know-How specified below. In the event of termination under this Section 8.2:
    (i) each Party shall pay all amounts then due and owing as of the termination date; and (ii) except for the surviving provisions
    set forth in Section 8.5, the rights and obligations of the Parties hereunder shall terminate as of the date of such termination;
    provided, further, that Merck and its Affiliates shall have a fully paid-up [*] license to use Cocrystal Know-How
    for research purposes only, and that both Parties shall be entitled to exploit their interest under Collaboration Information
    and Inventions and Collaboration Patent Rights, subject to Section 8.4, for any and all purposes without having to consult
    with, account to or seek consent from the other Party.
	 	 	 
	 	 	[*]


 


	 	8.3	Termination
    for Cause.


 


	 	8.3.1	Cause
    for Termination. This Agreement may be terminated at any time during the Term:


 


	 	(a)	upon
    written notice by either Party if the other Party is in breach of its material obligations hereunder by causes and reasons
    within its control and has not cured such breach within [*] after notice requesting cure of the breach; provided, however,
    in the event of a good faith dispute with respect to the existence of a material breach, the [*] cure period shall be tolled
    until such time as the dispute is resolved pursuant to Section 9.7; or
	 	 	 
	 	(b)	by
    either Party (the “Terminating Party”) upon the filing or institution of bankruptcy, reorganization, liquidation
    or receivership proceedings, or upon an assignment of a substantial portion of the assets for the benefit of creditors by
    the other Party (the “Bankruptcy Party”); provided, however, that in the case of any involuntary
    bankruptcy or receivership proceeding such right to terminate shall only become effective if the Bankruptcy Party consents
    to such involuntary proceeding is not dismissed within [*] after the filing thereof.


 


	 	8.3.2	Effect
    of Termination for Cause on License.


 


	 	(a)	If
    either Party terminates this Agreement pursuant to Section 8.3.1, then [*] and each Party shall, within [*] after the effective
    date of such termination, return or cause to be destroyed all Information of the other Party in tangible form and all Compound
    substances or compositions delivered or provided by the other Party, as well as any other material provided by the other Party
    in any medium; provided, however, that each Party may retain one copy of Information received from the other
    Party in its confidential files for record purposes, and Merck and its Affiliates may retain Information reasonably necessary
    to practice under its continued licenses to use Cocrystal Know-How and Merck and its Affiliates shall have a fully paid-up
    [*] license to use Cocrystal Know-How for research purposes only. For the avoidance of doubt, each Party may retain Collaboration
    Information and Inventions since each Party has an undivided interest therein, and both Parties shall be entitled to exploit
    their interest under Collaboration Information and Inventions and Collaboration Patent Rights, subject to Section 8.4, for
    any and all purposes without having to consult with, account to or seek consent from the other Party. 
	 	 	 
	 	 	[*]


 




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	 	(b)	Upon
    termination of this Agreement by Merck pursuant to Section 8.2, or by Cocrystal pursuant to Section 8.3.1(a), Merck and its
    Affiliates, sublicensees and distributors shall be entitled, during the [*] period immediately following the effective date
    of termination, to finish any work-in-progress and to sell any Product or Compound remaining in inventory, in accordance with
    the terms of this Agreement.
	 	 	 
	 	(c)	If
    this Agreement is terminated by the Terminating Party pursuant to Section 8.3.1(b) due to the rejection of this Agreement
    by or on behalf of the Bankruptcy Party under Section 365 of the United States Bankruptcy Code (the “Code”),
    all licenses and rights to licenses granted under or pursuant to this Agreement by the Bankruptcy Party to the Terminating
    Party are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the Code, licenses of rights to “intellectual
    property” as defined under Section 101(35A) of the Code. The Parties agree that the Terminating Party, as a licensee
    of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Code, and
    that upon commencement of a bankruptcy proceeding by or against the Bankruptcy Party under the Code, the Terminating Party
    shall be entitled to a complete duplicate of or complete access to (as the Terminating Party deems appropriate), any such
    intellectual property and all embodiments of such intellectual property. Such intellectual property and all embodiments thereof
    shall be promptly delivered to the Terminating Party (i) upon any such commencement of a bankruptcy proceeding upon written
    request therefore by the Terminating Party, unless the Bankruptcy Party elects to continue to perform all of its obligations
    under this Agreement or (ii) if not delivered under (i) above, upon the rejection of this Agreement by or on behalf of the
    Bankruptcy Party upon written request therefore by the Terminating Party. The foregoing provisions of this Section 8.3.2(c)
    are without prejudice to any rights the Terminating Party may have arising under the Code or other applicable law.
	 	 	 
	 	(d)	[*]
    


 


	 	8.4	[*]
	 	 	 
	 	8.5	Effect
    of Expiration or Termination; Survival. Expiration or termination of this Agreement shall
    not relieve the Parties of any obligation accruing prior to such expiration or termination. Any expiration or termination
    of this Agreement shall be without prejudice to the rights of either Party against the other accrued or accruing under this
    Agreement prior to expiration or termination, including without limitation the obligation to pay royalties for Product(s)
    or Compound sold prior to such expiration or termination. The provisions of Article 4 shall survive the expiration or termination
    of this Agreement and shall continue in effect for [*]. In addition, the provisions of Article 1, Article 7 (with respect
    to Collaboration Patent Rights), Article 8 and Article 9 shall survive any expiration or termination of this Agreement and
    the provisions of Article 6 shall survive until the expiration of the applicable statute of limitations.


 




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	Article
    9	MISCELLANEOUS


 


	 	9.1	Force
    Majeure. Neither Party shall be held liable to the other Party nor be deemed to have defaulted
    under or breached this Agreement for failure or delay in performing any obligation under this Agreement to the extent such
    failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, potentially including,
    but not limited to, embargoes, war, acts of war (whether war be declared or not), acts of terrorism, insurrections, riots,
    civil commotions, strikes, lockouts or other labor disturbances, fire, floods, or other acts of God, or acts, omissions or
    delays in acting by any governmental authority or the other Party. The affected Party shall notify the other Party of such
    force majeure circumstances as soon as reasonably practical, keep the other Party informed of the steps being taken to remedy
    the circumstances and promptly undertake all reasonable and diligent efforts necessary to cure such force majeure circumstances.
	 	 	 
	 	9.2	Assignment/Change
    of Control. Except as provided in this Section 9.2, 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 consent
    of the other Party. Merck may, without Cocrystal’s consent, assign this Agreement and its rights and obligations hereunder
    in whole or in part to a Merck Affiliate or in connection with a Change of Control (as defined below). Cocrystal may, without
    Merck’s consent, assign this Agreement and its rights and obligations hereunder in connection with a Change of Control;
    provided, however, that Cocrystal must notify Merck at least [*] prior to completion of any such Change of Control.
    Without limiting the foregoing, in the event that there is a Company Change of Control that is a Competing Pharma Change of
    Control, then Cocrystal shall provide written notice to Merck at least [*] prior to the completion of such Change of Control
    and [*]. Any permitted assignee shall assume all obligations of its assignor under this Agreement. All Patent Rights, know-how
    or other intellectual property rights licensed to Merck hereunder prior to any Change of Control (or otherwise coming under
    the Control of Cocrystal (or any of its Affiliates that were Affiliates prior to such Change of Control) following such Change
    of Control) shall, in all cases, continue to be licensed to Merck hereunder in accordance with this Agreement. Any attempted
    assignment not in accordance with this Section 9.2 shall be void. If a proposed assignment would have an adverse impact upon
    the tax treatment of payments due under this Agreement to the other Party, the assigning Party shall undertake such steps
    as are necessary to remedy such adverse impact. Notwithstanding anything in this Agreement to the contrary, the Patent Rights,
    know-how or other intellectual property owned or otherwise Controlled, as of the effective date of the Change of Control of
    Cocrystal or its Affiliates and thereafter, by (i) any counterparty (a Third Party) to a Change of Control (the “Acquirer”)
    of Cocrystal or its Affiliates (the “Acquired Party”) or (ii) any of
    Acquirer’s Affiliates that are not Affiliates of the Acquired Party, in each case immediately prior to the closing of
    such Change of Control, shall not become subject to the license grants and other requirements of this Agreement. For purposes
    of this Section 9.2, a “Change of Control” of a Party shall be deemed
    to occur if such Party is involved in a merger, reorganization or consolidation, or if there is a sale of all or substantially
    all of such Party’s assets or business relating to this Agreement or if a person or group other than the current controlling
    person or group shall effectively acquire control of the management and policies of such Party. For purposes of this Section
    9.2, a “Competing Pharma Change of Control” shall mean [*].
	 	 	 
	 	9.3	Use
    of Affiliates. Merck shall have the right to exercise its rights and perform its obligations
    under this Agreement either itself or through any of its Affiliates.


 




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	 	9.4	Severability.
    If any one or more of the provisions contained in this Agreement is held invalid, illegal
    or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall
    not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive
    rights of the Parties. The Parties shall in such an instance use reasonable efforts to replace the invalid, illegal or unenforceable
    provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of this Agreement.
	 	 	 
	 	9.5	Notices.
    All notices which are required or permitted hereunder shall be in writing and sufficient
    if delivered personally, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight
    courier), sent by nationally-recognized overnight courier or sent by registered or certified mail, postage prepaid, return
    receipt requested, addressed as follows:


 


	 	if
    to Cocrystal, to:	Cocrystal
                                         Pharma, Inc.

        19805
        N. Creek Parkway

        Bothell,
        WA 98011

        [*]

         

	 	and:	Cocrystal
                                         Pharma, Inc.

        4400
        Biscayne Blvd

        Suite
        101

        Miami,
        FL 33137

        [*]

         

	 	if
    to Merck, to:	Merck
                                         Sharp & Dohme Corp.

        One
        Merck Drive

        Whitehouse
        Station, NJ 08889-0100

        [*]

         

	 	and:	Merck
                                         Sharp & Dohme Corp.

        2000
        Galloping Hill Road

        [*]

        Kenilworth,
        NJ 07033-1310

        [*]

         

	 	or
    to such other address(es) as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance
    herewith. Any such notice shall be deemed to have been given: (a) when delivered if personally delivered or sent by facsimile
    on a business day (or if delivered or sent on a non-business day, then on the next business day); (b) on the business day
    after dispatch if sent by nationally-recognized overnight courier; or (c) on the fifth (5th) business day following the date
    of mailing, if sent by mail. The Parties hereby agree that, to the extent permitted by law, any notice provided in accordance
    with this Section 9.5 shall constitute due service of process with respect to any legal proceeding between the Parties arising
    hereunder and that compliance with the Hague Convention for the Service of Process, if otherwise applicable, shall not be
    required.


 


	 	9.6	Applicable
    Law. This Agreement shall be governed by and construed in accordance with the laws of the
    State of New York without reference to any rules of conflict of laws or renvoi.


 




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	 	9.7	Dispute
    Resolution.


 


	 	9.7.1	The
    Parties shall negotiate in good faith and use reasonable efforts to settle any dispute, controversy or claim arising from
    or related to this Agreement or the breach thereof (a “Dispute”). Any Party shall give the other Party
    written notice of any Dispute not resolved in the normal course of business and referring to this Section 9.7.1. Within [*]
    from the date of delivery of such notice, the receiving Party shall submit to the other Party a written response. The notice
    and response shall include (a) a statement of that Party’s position and a summary of arguments supporting that position,
    and (b) the name and title of the executive who will represent that Party and of any other person who will accompany the executive.
    Within [*] from the date of delivery of the initial notice, the executives of both Parties shall meet at a mutually acceptable
    time and place, and thereafter as often as they reasonably deem necessary, to attempt to resolve the Dispute. [*] All negotiations
    pursuant to this Section 9.7 are confidential and shall be treated as compromise and settlement negotiations for purposes
    of applicable rules of evidence.
	 	 	 
	 	9.7.2	If
    the Parties do not fully settle following the procedure in Section 9.7.1, and a Party wishes to pursue the matter, each dispute,
    controversy or claim arising from or related to this Agreement or the breach thereof that is not an Excluded Claim (as defined
    below) shall be brought in the federal court located in New York, New York, if federal jurisdiction is available, or, alternatively,
    in the state courts located in New York, New York. Each of the Parties hereby submits to the exclusive jurisdiction of such
    courts for the purpose of any such litigation; provided, that a final judgment in any such litigation shall be conclusive
    and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each Party irrevocably
    and unconditionally agrees not to assert (a) any objection which it may ever have to the laying of venue of any such litigation
    in such courts, (b) any claim that any such litigation brought in any such court has been brought in an inconvenient forum,
    and (c) any claim that such court does not have jurisdiction with respect to such litigation. Each
    party irrevocably and unconditionally waives any right to a trial by jury and agrees that any of them may file a copy of this
    paragraph with any court as written evidence of the knowing, voluntary and bargained-for agreement among the Parties irrevocably
    to waive its right to trial by jury in any LITIGATION.
	 	 	 
	 	9.7.3	As
    used in this Section 9.7, the term “Excluded Claim” shall mean a dispute, controversy or claim that concerns
    (a) a decision by the Committee or Merck within the proper scope of the Committee’s authority pursuant to Section 2.6,
    or an issue concerning the integrity of data submitted to a regulatory agency, neither of which shall be justiciable in any
    forum; (b) the validity or infringement of a patent, trademark or copyright; or (c) any antitrust, anti-monopoly or competition
    law or regulation, whether or not statutory. Any action concerning Excluded Claims identified in clauses (b) and (c) of this
    Paragraph may be brought in any court having jurisdiction.


 


	 	9.8	Limitation
    of Liability. Notwithstanding anything to the contrary contained herein, neither Party shall
    be liable to the other Party under any theory for any special, incidental, indirect, consequential or other similar damages,
    or any punitive damages, whether arising directly or indirectly out of the transactions contemplated by this Agreement. To
    be clear, neither Party shall be entitled to recover for any lost profit or lost sale damages of any kind, whether those claimed
    damages are direct or indirect.


 




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	 	9.9	Entire
    Agreement; Amendments. This Agreement, together with the Schedules and Exhibits hereto,
    contains the entire understanding of the Parties with respect to the subject matter hereof. Any other express or implied agreements
    and understandings, negotiations, writings and commitments, either oral or written, with respect to the subject matter hereof
    are superseded by the terms of this Agreement. The Schedules and Exhibits to this Agreement are incorporated herein by reference
    and shall be deemed a part of this Agreement. This Agreement may be amended, or any term hereof modified, only by a written
    instrument duly executed by authorized representative(s) of both Parties hereto.
	 	 	 
	 	 	Notwithstanding
    anything to the contrary in the foregoing, that certain Mutual Confidential Disclosure Agreement between the Parties dated
    as of July 11, 2018, shall remain in full force and effect with respect to the subject matter thereof and information disclosed
    thereunder.
	 	 	 
	 	9.10	Headings.
    The captions to the several Articles, Sections and subsections hereof are not a part of
    this Agreement, but are merely for convenience to assist in locating and reading the several Articles and Sections hereof.
	 	 	 
	 	9.11	Independent
    Contractors. It is expressly agreed that Cocrystal and Merck shall be independent contractors
    and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency. Neither Cocrystal
    nor Merck shall have the authority to make any statements, representations or commitments of any kind, or to take any action,
    which shall be binding on the other Party, without the prior written consent of the other Party.
	 	 	 
	 	9.12	Waiver.
    The waiver by either Party hereto of any right hereunder, or of any failure of the other
    Party to perform, or of any breach by the other Party, shall not be deemed a waiver of any other right hereunder or of any
    other breach by or failure of such other Party whether of a similar nature or otherwise.
	 	 	 
	 	9.13	Waiver
    of Rule of Construction. Each Party has had the opportunity to consult with counsel in connection
    with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this
    Agreement shall be construed against the drafting Party shall not apply.
	 	 	 
	 	9.14	Certain
    Conventions. Any reference in this Agreement to an Article, Section, subsection, paragraph,
    clause, Schedule or Exhibit shall be deemed to be a reference to an Article, Section, subsection, paragraph, clause, Schedule
    or Exhibit, of or to, as the case may be, this Agreement, unless otherwise indicated. Whenever this Agreement refers to a
    number of days, unless otherwise specified, such number refers to calendar days. Unless the context of this Agreement otherwise
    requires, (a) words of any gender include each other gender, (b) words such as “herein”, “hereof”,
    and “hereunder” refer to this Agreement as a whole and not merely to the particular provision in which such words
    appear, (c) words using the singular shall include the plural, and vice versa, and (d) the term “including” (or
    “includes”) will be deemed to mean “including without limitation” (or “includes without limitations”).
	 	 	 
	 	9.15	Business
    Day Requirements. In the event that any notice or other action or omission is required to
    be taken by a Party under this Agreement on a day that is not a business day (excluding notices required under Section 2.14),
    then such notice or other action or omission shall be deemed to be required to be taken on the next occurring business day.
    


 




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	 	9.16	Further
    Assurances. Each Party agrees to 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, without limitation, the filing of such additional assignments
    (including assignments for recordation in patent offices), agreements, documents and instruments, that may be necessary or
    as the other Party hereto may at any time and from time to time reasonably request in connection with this Agreement or to
    carry out more effectively the provisions and purposes of, or to better assure and confirm unto such other Party its rights
    and remedies under, this Agreement.
	 	 	 
	 	9.17	Counterparts.
    This Agreement may be signed in any number of counterparts (including by facsimile or electronic
    transmission), each of which shall be deemed an original, but all of which shall constitute one and the same instrument. After
    facsimile or electronic transmission, the Parties agree to execute and exchange documents with original signatures.


 


[Remainder
of this Page Intentionally Left Blank]


 




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IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.


 


	MERCK
    SHARP & DOHME CORP.	 	COCRYSTAL
    PHARMA, INC.
	 	 	 	 	 
	BY:	/s/Benjamin
    B. Thorner	 	BY:	/s/
    Gary L. Wilcox
	 	Benjamin
    B. Thorner	 	 	Gary
    L. Wilcox
	 	 	 	 	 
	TITLE:	Senior
                                         Vice President &

        Head
        Business Development & Licensing
	 	TITLE:	Chief
    Executive Officer


 


		[Signature Page to Exclusive License and Collaboration Agreement]






 




    	 	 	 



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SCHEDULE
1.10 PATENT RIGHTS


 


[*]


 




    	 	 	 



    	[*] Designates portions of this document that have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission	 



    

 


SCHEDULE
2.1 RESEARCH PROGRAM


 


[*]


 




    	 	 	 



    	[*] Designates portions of this document that have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission	 



    

 


SCHEDULE
2.6.1 REPRESENTATIVES OF THE JRC


 


Merck
Representatives


 


[*]


 


Cocrystal
Representatives


 


[*]


 




    	 	 	 



    	[*] Designates portions of this document that have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission	 



    

 


SCHEDULE
3.4 TRANSFER EXCEPTIONS 


 


[*]


 




    	 	 	 



    	[*] Designates portions of this document that have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission	 



    

 


SCHEDULE
4.4 PRESS RELEASE 


 


Cocrystal
Pharma Announces Exclusive Worldwide License and


Collaboration Agreement with Merck


 


BOTHELL,
WA, January __, 2019 – Cocrystal Pharma, Inc. (NASDAQ: COCP), (“Cocrystal” or the “Company”),
a clinical stage biotechnology company discovering and developing novel antiviral therapeutics that target the replication machinery
of influenza viruses, hepatitis C viruses and noroviruses, announced today that it has entered into an exclusive license and collaboration
agreement with Merck to discover and develop certain proprietary influenza A/B antiviral agents.


 


Under
the terms of the agreement, Merck will fund research and development for the program, including clinical development, and will
be responsible for worldwide commercialization of any products derived from the collaboration. Cocrystal will be paid an undisclosed
upfront sum and is eligible to receive payments related to designated development, regulatory and sales milestones with the potential
to earn up to $156 million, as well as undisclosed royalties on product sales.


 


“We
are thrilled to work with Merck, a preeminent research-intensive pharmaceutical company, to advance the development of certain
influenza A/B antivirals. Our R&D team has been intently focused on advancing our influenza program forward and we believe
the combination of Merck resources and our innovative platform will enable us to rapidly advance important new treatments for
influenza, which is a significant worldwide unmet need,” commented Dr. Gary Wilcox, Vice Chairman and Chief Executive Officer
of Cocrystal. “This collaboration is a significant milestone for Cocrystal that we believe further validates our approach
to drug discovery with our unique structure-based technologies and Nobel Prize winning expertise to create first- and best-in-class
antiviral drugs.”


 


“Collaborations
like this are an integral part of our infectious disease R&D strategy,” said Dr. Daria Hazuda, Chief Scientific Officer
Merck Exploratory Science Center and Vice President Infectious Diseases and Vaccines Discovery, Merck Research Laboratories. “New
meaningful options for the treatment of influenza are badly needed. We look forward to working with Cocrystal’s experienced
team.”


 


About
Cocrystal Pharma, Inc. 


 


Cocrystal
Pharma, Inc. is a clinical stage biotechnology company discovering and developing novel antiviral therapeutics that target the
replication machinery of influenza viruses, hepatitis C viruses, and noroviruses. Cocrystal employs unique structure-based technologies
and Nobel Prize winning expertise to create first- and best-in-class antiviral drugs. Novel inhibitors effective against influenza
strains A and B have been identified and are in the preclinical stage. Several of these have potencies approaching single digit
nanomolar. The Company’s lead candidate CC-42344 for influenza strain A is effective in animal models against both the pandemic
and seasonal strains of influenza A. We continue to identify and develop non-nucleoside polymerase inhibitors for Norovirus infections
using the Company’s proprietary structure-based drug design technology platform. For further information about Cocrystal,
please visit www.cocrystalpharma.com.


 




    	 	 	 



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Forward-Looking
Statements


 


This
press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995,
including our expectations regarding the timing for achievement of certain research and clinical development milestones related
to the licensing agreement with Merck as well as royalties on any product sales. The words “believe,” “may,”
“estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,”
“could,” “target,” “potential,” “is likely,” “will,” “expect”
and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking
statements largely on our current expectations and projections about future events. Some or all of the events anticipated by these
forward-looking statements may not occur. Important factors that could cause actual results to differ from those in the forward-looking
statements include the availability of products manufactured by third parties, the results of planned research and, if successful,
clinical trials, and receipt of regulatory approvals. Further information on our risk factors is contained in our filings with
the SEC, including our Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, the Prospectus Supplement dated
July 19, 2018, and our Annual Report on Form 10-K for the year ended December 31, 2017. Any forward-looking statement made by
us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may
emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update
any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required
by law.


 


Investor
and Media Contact:


Jenene
Thomas Communications, LLC


(833)
475-8247


COCP@jtcir.com


 




    	 	 	 



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SCHEDULE
5.2.4 EXPENSE BUDGET


 


[*]


 




    	 	 	 



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SCHEDULE
8.4.2 COCRYSTAL COMPOUNDS


 


See
attached.


 






    	 	 	 



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[*]