TASK DEFINITION: In this task, you're given a passage that represents a legal contract or clause between multiple parties, followed by a question that needs to be answered. Based on the paragraph, you must write unambiguous answers to the questions and your answer must refer a specific phrase from the paragraph. If multiple answers seem to exist, write the answer that is the most plausible.
PROBLEM: Exhibit 10.1   COLLABORATION AGREEMENT   THIS COLLABORATION AGREEMENT   (Agreement) is made as of this 18t h day of August 2014 (the Effective Date), by and between Capsugel US, LLC and its Affiliates with an address at 412 Mt. Kemble Ave, Suite 200C, Morristown, NJ 07960 ( CAPSUGEL) and Cardax, Inc., and its Affiliates, with a corporate address at 2800 Woodlawn Dr., Suite 129, Honolulu, HI 96822 (CARDAX). CARDAX and CAPSUGEL are each a Party and together constitute the Parties   RECITALS   WHEREAS, CAPSUGEL is experienced in formulating, developing, manufacturing, testing and packaging of health and nutrition products; and   WHEREAS, CARDAX is experienced in developing products that are based on its astaxanthin technologies; and   WHEREAS, CAPSUGEL and CARDAX desire to enter into an arrangement under which the Product (as defined below) will be formulated and developed for the purpose of identifying a marketing partner(s) (Marketer) for Marketer's onward sale of the Product in the Territory.   NOW, THEREFORE, the Parties hereto agree to the following:   SECTION 1   DEFINITIONS   The following terms for the purpose of this Agreement shall have the following respective meanings:   1.1 Active Ingredient shall mean the synthetic Astaxanthin and/or esters thereof that will be formulated in the Product as the active ingredient of the Product.   1.2 Adjusted Net Sales shall mean [***].   1.3 Administrative Cost shall mean [***].   1.4 Affiliate shall mean, with respect to either Party, all entities which, directly or indirectly, are controlled by, control or are under common control with such Party. For purposes of this Agreement, the word control shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, including through ownership of more than fifty percent (50%) of the voting shares or interest of an entity; provided, however, with respect to CAPSUGEL, the term Affiliate shall be limited to entities who directly or indirectly through one or more intermediaries are controlled by the parent of CAPSUGEL's direct parent entity and with respect to CARDAX the term Affiliate shall not include Cardax Pharmaceuticals, Inc.   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 1





    1.5 Applicable Laws shall mean all applicable laws, statutes, ordinances, codes, rules and regulations applicable to the formulation, development and/or manufacture, marketing, distribution sale, and disposal of the Product or any aspect thereof and the obligations of CAPSUGEL or CARDAX, as the context requires under this Agreement.   1.6 Annual Period shall mean the twelve (12) month period beginning on the first day in which the Launch Date occurs and each twelve (12) month period beginning on the anniversary of such day thereafter.   1.7 Commercially Reasonable Efforts means a Party's reasonable efforts and diligence, consistent with professional business standards generally practiced in the health and nutrition industry, applied in accordance with the Party's commercially reasonable business, legal, medical and scientific judgment, including the efforts and resources the Party would use for a product owned by it or to which it has rights, which is of similar market potential at a similar stage in its product life, taking into account the competitiveness of the marketplace, the proprietary position of the compound, the Applicable Laws, the profitability of the applicable products, and other relevant factors including, without limitation, technical, legal, scientific or medical factors.   1.8 Development Plan shall have the meaning set forth in Section 2.1.   1.9 Disclosing Party shall have the meaning set forth in the Confidentiality Agreement.   1.10 Formulation means a specific combination of excipient(s) that can formulate the Active Ingredient, as well as compounds other than the Active Ingredient, developed as a result of the work conducted under the Development Plan.   1.11 Force Majeure shall have the meaning set forth in Section 10.5.   1.12 Indemnified Party shall have the meaning set forth in Section 8.3.   1.13 Indemnifying Party shall have the meaning set forth in Section 8.3.   1.14 Intellectual Property Rights means a composition of matter, formula, process, method of use, invention, improvement, business name, domain name or database right to the extent any of the foregoing is protected in a utility model, trademark, service mark, trade name or business name, copyright, registered design, design right, patent, know-how, trade secret, rights in or to confidential information all goodwill related thereto and any other intellectual property right of any nature whatsoever throughout the world (whether registered or unregistered and including all applications and rights to apply for the same).   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 2





    1.15 Launch Date shall mean the date [***].   1.16 Loss or Losses shall mean any and all damages, fines, fees, settlements, payments, obligations, penalties, deficiencies, losses, costs and expenses, including, without limitation, environmental losses, interest, court costs, reasonable fees of attorneys, accountants and other experts and other reasonable expenses of litigation or other proceedings or of any claim, default or assessment.   1.17 Manufacturing Facility shall mean those areas of CAPSUGEL or CAPSUGEL's subcontractors manufacturing, packaging, laboratory and warehousing facilities utilized in the formulation, manufacture, packaging, storage, testing, shipping or receiving of the Product.   1.18 Materials mean all excipient(s) and inactive raw materials used in the formulation of the Product. For the avoidance of doubt, Materials does not include any Active Ingredient or work in process or finished goods inventory.   1.19 Net Sales means [***].   1.20 Product shall mean Active Ingredient Formulated in CAPSUGEL's proprietary Lipid Multi-Particulate Technology, including any improvements or derivatives of such technology.   1.21 Receiving Party shall have the meaning set forth in the Confidentiality Agreement.   1.22 Regulatory Approvals means any and all approvals, licenses, registrations, or authorizations of the relevant Regulatory Authority, necessary for the development, manufacture, use, storage, import, transport, export or commercialization of the Product in a particular country or jurisdiction.   1.23 Regulatory Authority (ies) means any governmental regulatory authority within a Territory involved in regulating any aspect of the development, manufacture, testing, market approval, sale, distribution, packaging or use of the Product.   1.24 Regulatory Filings shall mean the registrations, permits, licenses, authorizations, presentations, notifications, filings and/or approvals (together with all applications therefore and all related documents required by the FDA and all other laws for the development, manufacture, use, importation, export, marketing, sale and distribution of the Product within the Territory.   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 3





    1.25 Royalty Payment shall have the meaning set forth in Section 5.1.   1.26 Specifications shall mean the Product description and attributes agreed upon between the Parties upon conclusion of the Development Plan and appended to this Agreement as Exhibit B that will be attached hereto and, when attached, will be a part hereof, prior to commercialization of the Product.   1.27 Territory shall mean worldwide.   Section 2   Product Development, Manufacture and Commercialization   2.1 Governance Process Among the Parties . Both CARDAX and CAPSUGEL will agree upon a development plan, which shall be in writing and attached hereto as Exhibit A (the Development Plan), which shall describe various parameters including each Party's duties, obligations, time schedule and deliverables schedule. The activities performed under the Development Plan (the Development Activities)  shall  be administered by a joint project team (JPT), which shall review/update/amend the Development Plan for the Product in the Territory and coordinate the Formulation, development, manufacturing and commercialization of the Product, including identifying and selecting one or more Marketers as contemplated under Section 2.4. Each Party shall appoint a project manager to oversee that Party's performance of its obligations under this Agreement and shall notify the other Party of the name and full contact details of its appointed project manager. The  JPT shall comply with this Agreement for decisions specifically assigned to a Party pursuant to this Agreement. Meetings shall  take place by telephone or in person and the JPT will operate by consensus. If consensus cannot be reached, the matter will be submitted to the Head of Dosage Form Solutions of CAPSUGEL and the President and CEO of CARDAX for resolution. If such matter is not resolved, then the Parties may attempt to mediate such issue under the JAMS mediation rules. No member or any Affiliate of any member of the JPT shall have any liability under this Agreement and shall be exculpated to the fullest extent not prohibited by law from any liability to any Party that such member is not an employee, officer, consultant or acting in any similar capacity.     2.2 CAPSUGEL Responsibilities. With respect to the Product, CAPSUGEL, [***] shall [***] perform the development work necessary to formulate, analytically develop and take all other developmental actions necessary or required to develop the Product and manufacture pre- clinical and clinical batches (collectively, the CAPSUGEL Development Activities ). For purposes of further clarification, CAPSUGEL Development Activities shall include, without limitation, each of the following performed with all due diligence, care and skill and in accordance with all other Applicable Laws:

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 4







  (a) Formulation Development. Formulation shall mean a specific combination of Materials that formulate the Active Ingredient, as well as compounds other than the Active Ingredient, developed as a result of the work conducted under the Development Plan. The development of the Formulation of the Product, includes without limitation, all stability tests and other studies as applicable, providing CARDAX reports of such stability tests, using Commercially Reasonable Efforts to modify the Formulation as necessary and develop processes capable of scale-up and commercialization in accordance with Applicable Laws.         (b) Analytical Methods. Developing and validating analytical methods including but not limited to dissolution, assay, and stability as agreed upon by the Parties.         (c) Manufacture of Study Batches. The manufacture [***] of batches of Product in amounts specified on or about the dates determined a s  reasonably necessary for conducting all required for CAPSUGEL/CARDAX funded studies. Any other batches required or reasonably required by the Marketer for applying for and all actions related to additional Regulatory Approvals and Regulatory Filings of the Product and any related communications, studies or support for the FDA or any other Regulatory Authority (ies), which may include human and animal studies, shall be paid for by the Marketer, unless the Parties agree otherwise.         (d) Manufacturing Development. Development of manufacturing processes and systems in conformance with cGMP requirements of FDA to manufacture pilot batches, exhibit batches and commercial batches of Product.         (e) Reporting.  CAPSUGEL shall, throughout the performance of the Development Plan studies, consult with CARDAX on matters including technical, intellectual property and regulatory aspects and keep the other apprised of all developments.         (f) Commercial Manufacturing. CAPSUGEL shall manufacture the Product for each Marketer unless otherwise agreed by the Parties and the applicable Marketer.

2.3 CARDAX Responsibilities.

  (a) CARDAX shall be responsible for [***] the Active Ingredient [***], subject to reasonable notice and delivery schedules and reasonable amounts required by CAPSUGEL for it to perform its obligations under this Agreement or as otherwise agreed by CARDAX.         (b) [***]   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 5





    2.4 Joint Responsibilities.

[***]   The marketing of the Product shall be carried out by one or more mutually identified Marketer(s) by the JPT or otherwise in accordance with Section 2.1. CAPSUGEL and CARDAX will jointly control identification, decision rights, and terms for a Marketer as determined by the JPT or otherwise in accordance with Section 2.1. If a Marketer is not identified, or the terms are not determined, by the JPT or otherwise in accordance with Section 2.1, then the Marketer (and such terms) may be designated by either Party, subject to the reasonable approval of the other Party.    Any additional costs/activities required from a Marketer will be subject to agreement of the JPT or otherwise as provided in Section 2.1, including but not limited to pre-launch out-of-pocket expenses and the funding of such costs and expenses. These costs will be shared [***].   2.5 Ownership of Application. CARDAX shall own and control all information and rights in, to and under all Regulatory Approvals in the Territory (including all associated contents and correspondences) and applications therefore related to the Product and any other marketing authorizations within the Territory, unless otherwise mutually agreed upon by the Parties.

Section 3   Intellectual Property Matters   3.1 Background IP. This Agreement shall not change, modify or otherwise affect any rights to any confidential information, inventions, patents, patent applications or other Intellectual Property Rights owned or developed by either Party before the Effective Date or developed by a Party after the Effective Date other than under the terms of this Agreement (Background IP). This Agreement shall not confer on either Party any rights in and/or to any Background IP of the other party, except as otherwise provided in this Agreement.   3 .2  CAPSUGEL Property. CARDAX acknowledges that CAPSUGEL possesses certain inventions, processes, know-how, trade secrets, improvements, other intellectual properties and other assets, including but not limited to formulation recipes, processing details, laboratory analyses, analytical methods, procedures and techniques, computer technical expertise and software, which have been independently developed by CAPSUGEL, including but not limited to, the Background IP of CAPSUGEL (collectively Capsugel Property). CARDAX and CAPSUGEL agree that any Capsugel Property or improvements thereto which are used, improved, modified or developed by CAPSUGEL under or during the term of this Agreement are the product of CAPSGUEL's technical expertise possessed and developed by CAPSUGEL prior to the Effective Date and are the sole and exclusive property of CAPSUGEL.   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 6





      3 . 3  CARDAX Property. CAPSUGEL acknowledges that CARDAX possesses certain inventions, processes, know-how, trade secrets, improvements, other intellectual properties and other assets, which have been independently developed by CARDAX, including but not limited to, the Background IP of CARDAX (collectively CARDAX Property). CAPSUGEL and CARDAX agree that any CARDAX Property or improvements thereto which are used, improved, modified or developed by CARDAX under or during the term of this Agreement are the product of CARDAX's technical expertise possessed and developed by CARDAX prior to the Effective Date and are the sole and exclusive property of CARDAX.   3.4 Use of Confidential Information. CARDAX may use the confidential information of CAPSUGEL generated under this Agreement, except for CAPSUGEL's internal technical protocols and Background IP, to the extent necessary (i) in connection with seeking regulatory approval for a Compound Formulation or the Product and/or (ii) filing a patent application. Compound Formulation means any specific combination of excipient(s) and the Active Ingredient developed as a result of the work conducted under this Agreement. CARDAX may use and disclose CAPSUGEL's internal technical protocols and Background IP, to the extent necessary for Regulatory Approvals as contemplated by Section 2.3(b) to the extent reasonably determined by CAPSUGEL after notice and consultation with CAPSUGEL by CARDAX.   3.5 Inventions. Each Party will own all of its inventions and other Intellectual Property Rights made under this Agreement, including any patents, patent applications and other Intellectual Property Rights related to such inventions, if any, made solely by its employees or independent contractors or employees or independent contractors of its Affiliates, unless otherwise expressly set forth herein.   3.6 Joint Inventions. The Parties will jointly own all inventions and other Intellectual Property Rights jointly made under this Agreement that are directly resulting from work conducted under this Agreement in accordance with the Development Plan and related specifically to the Product or the Compound Formulation, including any patents, patent applications and other Intellectual Property Rights related to such inventions, if any, unless otherwise expressly set forth herein. During the Term, each Party hereby provides a worldwide, exclusive, royalty free, perpetual license of such Intellectual Property Rights for use by each licensee in its business in connection with the development and marketing and commercialization of the Product. For avoidance of doubt, no Party or any of its Affiliates shall have any rights to the Background IP of the other Party nor shall any Party have rights to any trademarks, service marks, trade names, business names or product names developed by the other Party. All decisions regarding the protection and exploitation of joint investments and other Intellectual Property Rights shall be determined by the JPT or otherwise in accordance with Section 2.1.   3.7 [reserved]   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 7





     3.8 Freedom to Operate. CARDAX acknowledges that it shall be solely and fully responsible to use its Commercially Reasonable Efforts for doing any and all freedom to operate assessments regarding possible infringement of third party intellectual property rights for the Product in the part of the Territory that the Parties reasonably determine require such protection; provided, however, each Party shall be solely and fully responsible for doing any and all freedom to operate assessments regarding possible infringement of third party intellectual property rights for any and all of its Intellectual Property Rights.   Section 4   Exclusivity   [***]   Section 5   Consideration   5.1 Royalty Payments. CAPSUGEL shall pay to CARDAX a royalty equal to [***] of the Adjusted Net Sales (Royalty Payment) within [***] after the end of [***].   5.2 Mode of Payment. CAPSUGEL will endeavor to contract with Marketer to receive profit sharing payments in U.S. dollars and CAPSUGEL will in turn pay CARDAX its share in U.S. dollars. Should Marketer require that local currency based payments be made to CAPSUGEL then CAPSUGEL will pay CARDAX its share in such local currency unless otherwise agreed. For instances in which Marketer sells the product in a local currency other than U.S. dollars but agrees to pay CAPSUGEL in U.S. dollars, the conversion of local currency to USD will be a mutually agreeable methodology with such Marketer (e.g., using the Marketer's standard accounting methodology such as its average daily rate for its accounting month).   5.3 Taxes. All federal, national, regional, district, local or other governmental income tax or similar tax that is imposed on either Party as a result of income, shall be the responsibility of such Party. All amounts payable by CAPSUGEL to CARDAX under this Agreement shall be paid free and clear of all deductions or withholdings whatsoever, except as may be required by law. If any deductions or withholdings are required by law to be made from any of the amounts payable by CAPSUGEL to CARDAX, the amount of any such withholding may be treated as part of the Royalty Payment, depending on the timing and the applicable legal requirements and CAPSUGEL shall provide CARDAX a receipt of any such withholdings.   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 8





    Section 6   Regulatory Requirements   6.1 Regulatory Contacts. [***] CAPSUGEL shall notify CARDAX immediately, and in no event, no later than three (3) business day(s), after it receives any contact or communication from any governmental or regulatory authority, including without limitation the FDA, that in any way relates to or may have an impact on a Product or the CAPSUGEL Development Activities.   6.2 Regulatory Inspections. Throughout the Term of this Agreement, CAPSUGEL agrees to cooperate with any governmental or regulatory body, particularly the FDA, which requests a general GMP inspection or audit or any inspection or audit relative to the manufacture, storage, handling, or shipment of Product manufactured, stored, handled, or shipped by CAPSUGEL. In addition, CAPSUGEL shall use its Commercially Reasonable Efforts to meet all reasonable U.S. FDA and other appropriate regulatory demands.   6.3 CARDAX Inspection. CARDAX shall have the right to audit CAPSUGEL's facilities, quality systems and records from time to time upon reasonable notice and CARDAX shall have the right to have a third party accounting firm, subject to a non-disclosure agreement, audit CAPSUGEL's financials as they relate to Net Sales and Adjusted Net Sales. In the event that the amount of the Royalty Payment for any quarter is 10% or more than the amount reported by CAPSUGEL, then CAPSUGEL will pay the costs and expenses of the audit or investigation.   6.4 Regulatory Notices. CAPSUGEL shall provide prompt written notice to CARDAX of the occurrence of, and the results of any regulatory notices including inspections as referenced in this Section 6 relating to the manufacture of Product.   6.5 Recordkeeping. CAPSUGEL shall keep true, accurate, and complete books, records, reports, and accounts (hereinafter Records) of all business or activities in connection with or relating to the manufacture, storage, handling, and shipment, including all validations, qualification, and validation protocols, of Product and this Agreement. CARDAX has the right, upon reasonable prior notice and during normal business hours, to inspect and examine such Records. CAPSUGEL agrees to retain all such Records for a period of five (5) years after the expiration of the Term or after termination of this Agreement.   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 9





    6.6 Recall. In the event that either Party believes it may be necessary to conduct a recall, field correction, market withdrawal, stock recovery, or other similar action with respect to any Product which was sold under this Agreement (a Recall), CARDAX and CAPSUGEL shall promptly consult with each other in good faith as to how best to proceed, it being understood and agreed that the final decision as to any Recall of any Product sold by Marketer(s) shall be made jointly; provided, however, that neither Party shall be prohibited hereunder from taking any action that it is required to take by Applicable Law or taking Commercially Reasonable Efforts to mitigate the loss from any Recall or seizure or to protect the public. Each of CAPSUGEL and CARDAX shall make a permanent, complete and accurate record of all costs incurred by it in connection with any Product Recall or seizure. With respect to any Recall or seizure of any Product caused by the negligence, mistake or omission of CAPSUGEL, CAPSUGEL shall (i) reimburse CARDAX for all out-of-pocket costs and expenses reasonably incurred by CARDAX in connection with the Recall or seizure, including, without limitation, replacing the Product subject to the Recall or seizure in accordance with this Agreement; and (ii) as provided in Section 8.1, indemnify and save CARDAX and its Affiliates harmless from and against any and all damages to or claims by third parties associated (or Affiliated) with or resulting from any such Recall or seizure. With respect to any Recall or seizure caused by the negligence, mistake or omission of CARDAX (including but not limited to failure of the Active Ingredient to meet the Specifications), CARDAX shall: (i) reimburse CAPSUGEL for all out-of-pocket costs and expenses reasonably incurred by CAPSUGEL in connection with the Recall or seizure; and (ii) as provided in Section 8.2, indemnify and save CAPSUGEL and its Affiliates harmless from and against any and all damages to or claims by third parties associated with or resulting from any such Recall or seizure.   With respect to any Recall or seizure of a Product not caused by the negligence, mistake or omission of either Party, each Party shall bear [***] of the aggregate costs of any and all out-of-pocket costs, expenses and losses reasonably incurred by either Party in connection with the Recall or seizure.   If CAPSUGEL and CARDAX cannot agree which party is at fault or whether a Recall or seizure was reasonably beyond the control of the Parties, then an independent technical expert, acceptable to both Parties, shall be designated to make such determination. The designated technical expert shall not be an employee, consultant, officer, director or shareholder of, or otherwise associated with, CAPSUGEL, CARDAX or their respective Affiliates. The technical expert's determination will be, in the absence of fraud or manifest error, binding and conclusive upon the Parties.   Each Party shall keep the other fully informed of any notification or other information, whether received directly or indirectly, which might affect the marketability, safety or effectiveness of a Product, or which might result in liability issues or otherwise necessitate action on the part of either party, or which might result in Recall or seizure of the Product.   Prior to any reimbursement pursuant to this Section 6 the Party claiming reimbursement shall provide the other Party with all available documentation of all reimbursable costs and expenses.   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 10





    Section 7   Representations and Warranties   7.1 Representations and Warranties of CAPSUGEL. CAPSUGEL hereby represents and warrants to CARDAX as follows:     (a) CAPSUGEL is a corporation in good standing under the laws of the jurisdiction of its organization and authorized to do business wherever necessary to fulfill the terms and conditions of this Agreement;         (b) CAPSUGEL has the full power and authority to execute and deliver this Agreement and perform its covenants, duties and obligations described in this Agreement;         (c) This Agreement is the valid, legal and binding obligation of CAPSUGEL, enforceable in accordance with its terms;         (d) Neither the execution and delivery of this Agreement nor the performance of CAPSUGEL's covenants, duties and obligations described in this Agreement constitute or will constitute a default under or conflict with any judgment, decree or order of any court or other governmental body to which CAPSUGEL is subject and will not conflict or be inconsistent with or result in the termination, modification, breach or default under the terms of any contract, commitment, covenant, agreement, instrument, document or understanding to which CAPSUGEL is a party;         (e) CAPSUGEL is not a party to, nor to CAPSUGEL's knowledge is CAPSUGEL as of the Effective Date threatened with, any legal or equitable action or proceeding before any court, arbitrator, administrative agency or other tribunal which is reasonably likely to adversely affect its ability to execute and deliver this Agreement or fully and timely perform its covenants, duties and obligations described in this Agreement;         (f) CAPSUGEL has obtained and continuously maintained all permits, authorizations and licenses issued by all federal, state and local governmental agencies and authorities necessary for the conduct of CAPSUGEL's businesses as of the Effective Date;         (g) CAPSUGEL has and shall continue to follow, comply with and adhere to all Applicable Laws necessary for the conduct of CAPSUGEL's businesses;

CAPSUGEL shall during the performance of the CAPSUGEL Development Activities ensure that, at all times, its employees, contractors, consultants, sub-contractors carry out their duties with all reasonable skill and care customary for the type of scientific research and development work covered by this Agreement and shall at all times comply with all applicable laws and regulations; record experimental data and all other material information relating to the CAPSUGEL Development Activities in individual notebooks or other appropriate formats and treat the same as Confidential Information; ensure that, at all times, its employees, contractors, consultants and sub-contractors are fully aware of and comply with the confidentiality provisions of their respective contracts which, for the avoidance of doubt, are comparable to the confidentiality provisions set out in this Agreement; keep CARDAX informed of the progress of the CAPSUGEL Development Activities by providing bi-weekly written reports and such other interim reports or updates as CARDAX may reasonably request.   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 11





     7.2 Representations and Warranties of CARDAX. CARDAX hereby represents and warrants to CAPSUGEL as follows:     (a) CARDAX is a corporation in good standing under the laws of the jurisdiction of its organization and authorized to do business wherever necessary to fulfill the terms and conditions of this Agreement;         (b) CARDAX has the full power and authority to execute and deliver this Agreement and perform its covenants, duties and obligations described in this Agreement;         (c) This Agreement is the valid, legal and binding obligation of CARDAX, enforceable in accordance with its terms;         (d) Neither the execution and delivery of this Agreement nor the performance of CARDAX's covenants, duties and obligations described in this Agreement constitute or will constitute a default under or conflict with any judgment, decree or order of any court or other governmental body to which CARDAX is subject and will not conflict or be inconsistent with or result in the termination, modification, breach or default under the terms of any contract, commitment, covenant, agreement, instrument, document or understanding to which CARDAX is a party;         (e) CARDAX is not a party to, nor to CARDAX's knowledge is CARDAX as of the Effective Date threatened with, any legal or equitable action or proceeding before any court, arbitrator, administrative agency or other tribunal which is reasonably likely to adversely affect its ability to execute and deliver this Agreement or fully and timely perform its covenants, duties and obligations described in this Agreement; and         (f) CARDAX has obtained and continuously maintains all permits, authorizations and licenses issued by all federal, state and local governmental agencies and authorities necessary for the conduct of CARDAX's businesses as of the Effective Date.

Disclaimer. THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT ARE THE PARTIES' ONLY WARRANTIES AND NO OTHER WARRANTY, EXPRESS, IMPLIED OR STATUTORY, WILL APPLY. EACH PARTY EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. FOR THE AVOIDANCE OF DOUBT, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF NON-INFRINGEMENT THAT ARE NOT EXPRESSLY SET FORTH IN THIS AGREEMENT.   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 12





    Section 8   Indemnification   8.1 CAPSUGEL's Indemnification of CARDAX. CAPSUGEL shall indemnify, defend and hold CARDAX, its Affiliates and their respective officers, directors, employees and agents harmless from and against any and all third party Losses suffered, incurred or sustained by CARDAX or to which CARDAX becomes subject at any time, to the extent arising out of or resulting, directly or indirectly, from: (a) any breach of CAPSUGEL's representations, warranties or obligations under this Agreement; (b) any personal injury, death or property damage caused by the possession, use, or consumption by any person of any Product that does not comply with the Specification in any way or is the result of actions or inactions of CAPSUGEL in its manufacturing or is alleged to result from any inherent risk of the Formulation or a defect in the Formulation; and (c) any other negligent act or omission on the part of CAPSUGEL, its Affiliates or their respective employees or agents except, in each case, to the extent such claims are attributable to the gross negligence or willful misconduct of CARDAX.   8.2 CARDAX's Indemnification of CAPSUGEL. CARDAX shall indemnify, defend and hold CAPSUGEL, its Affiliates and their respective officers, directors, employees and agents harmless from and against any and all third party Losses suffered, incurred or sustained by CAPSUGEL or to which CAPSUGEL becomes subject at any time, to the extent arising out of or resulting, directly or indirectly, from (a) any breach of CARDAX's representations, warranties or obligations under this Agreement; (b) any personal injury, death or property damage caused by the possession, use or consumption by any person of any Product supplied by CAPSUGEL under this Agreement that does not comply with the Specifications as a result of actions or inactions of CARDAX or is alleged to result from any inherent risk of the Product or a defect in the Active Ingredient; and (c) any other negligent act or omission on the part of CARDAX, its Affiliates or their respective employees or agents except, in each case, to the extent such claims are attributable to the gross negligence or willful misconduct of CAPSUGEL.   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 13





    8.3 Indemnification Process. If CARDAX, Affiliates or their respective employees, servants or agents, or CAPSUGEL, its Affiliates or their respective employees, servants or agents (in each case an Indemnified Party), receive any written claim which such Indemnified Party believes is the subject of indemnity hereunder by the other Party hereto (an Indemnifying Party), the Indemnified Party shall, as soon as reasonably practicable after forming such belief, give notice thereof to the Indemnifying Party, provided that the failure to give timely notice to the Indemnifying Party as contemplated hereby shall not release the Indemnifying Party from any liability to the Indemnified Party unless the Indemnifying Party demonstrates that the defense of such claim is prejudiced by such failure. The Indemnifying Party shall have the right, by prompt notice to the Indemnified Party to assume the defense of such claim at its cost, with counsel reasonably satisfactory to the Indemnified Party. If the Indemnifying Party does not so assume the defense of such claim or, having done so, does not diligently pursue such defense, the Indemnified Party may assume the defense, with counsel of its choice, but at the cost of the Indemnifying Party. If the Indemnifying Party so assumes the defense, it shall have absolute control of the litigation; the Indemnified Party may, nevertheless, participate therein through counsel of its choice and at its cost. The Party not assuming the defense of any such claim shall render all reasonable assistance to the Party assuming such defense, and out-of-pocket costs of such assistance shall be for the account of the Indemnifying Party. No such claim shall be settled other than by the Party defending the same, and then only with the consent of the other Party, which consent shall not be unreasonably withheld; provided that the Indemnified Party shall have no obligation to consent to any settlement of any such claim which (i) imposes on the Indemnified Party any liability or obligation which cannot be assumed or performed in full by the Indemnifying Party, (ii) does not unconditionally release the Indemnified Party, (iii) does require a statement as to or an admission of fault, culpability or failure to act by or on behalf of Indemnified Party or any of its Affiliates or (iv) does impose any restrictions on the conduct of business by the Indemnified Party or its Affiliates.   8.4 Limitation of Damages.  IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES OR LOST PROFITS ARISING UNDER OR RELATING TO THIS AGREEMENT. Except in the event of (i) a Party's gross negligence or willful misconduct and/or (ii) a Party's breach of its confidentiality obligation, the total liability of one Party to the other Party (and its Affiliates) arising out of or in connection with this Agreement or the Products, whether in contract, tort (including negligence), statute or otherwise, shall, to the maximum extent permitted by Applicable Law, be limited to the amount of revenues it receives under this Agreement.   8.5 Insurance. During the Term and for a period of two (2) years after the termination of the Agreement or the expiry date of the last batch manufactured whichever is later, thereafter, each Party shall obtain and maintain, at its sole expense adequate product liability insurance for the Product as it reasonably deems necessary and appropriate. Evidence of coverage, in the form of certificates of insurance, shall be provided promptly upon registration of the Product in given countries and as reasonably requested thereafter.   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 14





    Section 9   Confidentiality and Publicity   Confidentiality. The Parties agree that the terms of the Confidentiality Agreement entered into between the parties dated Nov 19, 2013 shall govern this Agreement.   Section 10   Term and Termination   10.1 Term and Renewal. [***] In addition, any contract entered into by the Parties with a Marketer for the Product shall survive termination of this Agreement in accordance with its terms, including any renewal rights provided therein.   10.2 Termination for Breach . A material breach that is subject to cure that is not cured within [***] of written notice of breach shall be cause for termination, provided that if the breaching party is diligently pursuing in good faith the remedy of the breach at the expiration of such [***] cure period, then such [***] cure period shall be extended for a reasonable period to effect the cure. Upon any breach by CAPSUGEL, CARDAX shall be permitted to use all Intellectual Property of CAPSUGEL used in the Formulation and the Product to the extent necessary for the development and marketing of the Product. Upon any breach by CARDAX, CAPSUGEL shall be permitted to use all Intellectual Property of CARDAX used in the Active Ingredient and the Product to the extent necessary for the development and marketing of the Product in accordance with the terms of this Agreement as of the date of such termination.   10.3 Termination for Bankruptcy . This Agreement may be terminated by either Party, forthwith, or at any time thereafter by notice to the other if the other becomes bankrupt or insolvent, or enters into liquidation whether compulsorily or voluntarily, or convenes a meeting of its creditors, or has a receiver appointed over all or part of its assets, or ceases for any reason to carry on business.   10.4 Development or Commercial Non-Viability.   In the event that CAPSUGEL reasonably determines that the development of the Compound Formulation is not feasible with Commercially Reasonable Efforts in accordance with the Development Plan, with such changes as reasonably requested by CAPSUGEL, then CAPSUGEL may discontinue the development of the Compound Formulation and Product and terminate this Agreement, in which case, CARDAX shall have the right to license the Intellectual Property Rights as provided in Section 4.   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 15





    In the event that CARDAX reasonably determines that, with Commercially Reasonable Efforts by the Parties, the development of a Product is not feasible due to any legal, or technical developments with respect to the Product, including but not limited to conflicts of Intellectual Property Rights; withdrawal of a Product by a major regulatory agency for safety or efficacy reasons; or inability of the Parties to produce a Product that passes FDA required biostudies, in which such developments make the Product nonviable or that the Product is not acceptable to any applicable Marketer, then, CARDAX may elect to discontinue the development of the Product and terminate this Agreement.   10.5 Termination for Force Majeure. Neither Party shall be liable to the other for default or delay in the performance of any of its obligations under this Agreement if such default or delay shall be caused directly or indirectly by accident, fire, flood, riot, war, terrorism, act of God, embargo, strike, failure or delay of normal source of supply of materials, or delay of carriers, equipment failure or complete or partial shutdown of plant by any of the foregoing causes or other causes beyond its reasonable control, including FDA action (Force Majeure).   10.6 No Waiver. The failure of either Party to terminate this Agreement by reason of the breach of any of its provisions by the other Party shall not be construed as a waiver of the rights or remedies available for any subsequent breach of the terms and provisions of this Agreement.   10.7 Property. In the event of termination of this Agreement for whatever cause, in addition to the other obligations of the Parties hereunder, each Party shall return to the other Party or to the other Party's designee no later than thirty (30) days after the effective date of termination all of such other Party's property, including all proprietary information, in its possession, except to the extent required to be retained by law or to comply with such Party's continuing obligations hereunder.   10.8 Survival. The provisions of Sections 3.6, 4, 6, 8, 9 and 11 shall survive any termination of this Agreement.   Section 11   Miscellaneous   11.1 Dispute Resolution. This Agreement shall be governed by and interpreted in accordance under the laws of the State of New York. Any dispute, controversy or claim arising out of this Agreement, or the breach, termination or invalidity thereof, shall be discussed between the senior management of the Parties who will attempt to resolve the matter amicably. Any disputes which cannot be resolved in this way within sixty (60) days of one Party notifying the other of the existence of a dispute shall be finally settled before JAMS in accordance with the expedited arbitration procedures of JAMS. The arbitration shall be conducted in English in New York, New York, USA. The costs of the arbitration payable to JAMS shall be funded equally by the parties, provided that the prevailing party shall be reimbursed for such costs and expenses and its own actual out of pocket costs   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 16





    11.2 Integration and Amendment . This Agreement, the Exhibits hereto contain the complete agreement between the Parties with respect to the subject matter hereof. All previous and collateral agreements, representations, warranties, promises and conditions relating to the subject matter of this Agreement are superseded by this Agreement. This Agreement may only be amended by a written instrument duly executed by the Parties hereto.   11.3 Assignment. Neither Party may assign this Agreement without the prior written consent of the other Party; provided, however that either Party may assign in connection with a merger or sale of all or substantially all of its stock or assets, provided the assignee agrees to be bound by all of the terms and conditions of this Agreement.   11.4 Waiver. No waiver of any default by either Party shall be deemed to constitute a waiver of any subsequent default with respect to the same or any other provision hereof. No waiver shall be effective unless made in writing with specific reference to this Agreement and signed by a duly authorized representative of the Party granting the waiver.   11.5 Notice. Any notice or request expressly provided for or permitted under this Agreement shall be in writing, delivered manually or by mail, e- mail, or facsimile and shall be deemed sufficiently given if and when received by the Party to be notified at its address first set forth below, or if and when mailed by registered mail or certified mail, postage prepaid, addressed to such Party at such address, or upon delivery confirmation. Either Party, by notice to the other, may change its address for receiving such notices.     If to CAPSUGEL: CAPSUGEL US, LLC   412 Mt. Kemble Ave. Suite 200C   Morristown, NJ 07960 USA   Attn: President, Dosage Form Solutions Telephone: [***] Facsimile: [***] E-mail: [***]     With a copy to CAPSUGEL US, LLC   412 Mt. Kemble Ave. Suite 200C   Morristown, NJ 07960 USA   Attn: General Counsel Telephone: [***] Facsimile: [***] E-mail: [***]   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 17





      If to CARDAX: CARDAX, Inc.   2800 Woodlawn Dr., Suite 129   Honolulu, HI 96822   Attn: President and CEO Telephone: [***] Facsimile: [***] E-mail: [***]     With a copy to  Herrick, Feinstein LLP   2 Park Avenue   New York, NY 10016   Attn: Richard M. Morris Telephone: [***] Facsimile: [***] E-mail: [***]   11.6 Severability of Provisions. Each provision of this Agreement shall be treated as a separate and independent clause, and the unenforceability of any one clause shall in no way impair the enforceability of any of the other clauses herein. Moreover, if one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to scope, activity, subject or otherwise so as to be unenforceable at law, such provision or provisions shall be construed by the appropriate judicial body or arbitration panel by limiting or reducing such provision or provisions, so as to be enforceable to the maximum extent allowable under the applicable law as such law shall then be.   11.7 Independent Contractors. Each Party hereto shall be an independent contractor of the other. Neither Party shall be the legal agent of the other for any purpose whatsoever and therefore has no right or authority to make or underwrite any promise, warranty or representation, to execute any contract or otherwise to assume any obligation or responsibility in the name of or on behalf of the other Party, except to the extent specifically authorized in writing by the other Party. Neither Party shall be bound by or liable to any third persons for acts or obligations or debts incurred by the other toward such third party, except to the extent specifically agreed to in writing by the Party to be so bound. This Agreement shall not create a partnership or other similar arrangement.   11.8 Announcement. The Parties agree to coordinate external communications (e.g. joint press release) regarding this collaboration.   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 18





    11.9 Headings; Interpretation. The section headings contained in this Agreement are for convenience of reference only, do not form a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words include, includes and including shall be deemed to be followed by the phrase but not limited to. All references herein to Sections, Sections and Exhibits shall be deemed references to Sections and Sections of, and Exhibits to, this Agreement unless the context shall otherwise require. All Exhibits attached to this Agreement shall be deemed incorporated herein by reference as if fully set forth herein. Words such as herein, hereof, hereto, hereby and hereunder refer to this Agreement and to the Exhibits, taken as a whole. Except as otherwise expressly provided herein: (a) any reference in this Agreement to any agreement shall mean such agreement as amended, restated, supplemented or otherwise modified from time to time; (b) any reference in this Agreement to any law shall include corresponding provisions of any successor law and any regulations and rules promulgated pursuant to such law or such successor law; and (c) all terms of an accounting or financial nature shall be construed in accordance with generally accepted accounting principles, as in effect in the United States from time to time.   11.10 Counterparts. This Agreement may be executed by the Parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original and all of which counterparts taken together shall constitute but one and the same instrument.   * * * Signature Page Follows * * *   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 19





    IN WITNESS WHEREOF, the Parties have caused this this Agreement to be executed by their respective duly authorized representatives as of the day and year first above written.   CAPSUGEL US, LLC   By: /s/ Amit Patel   Name: Amit Patel   Title: President, Dosage Form Solutions     CARDAX, INC.   By: /s/ David G. Watumull   Name: David G. Watumull   Title: President and CEO     CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 20





    EXHIBIT A   DEVELOPMENT PLAN   [***]   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 21





    EXHIBIT B   SPECIFICATIONS   As provided in Section 1.26, to be provided upon conclusion of the Development Plan   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 22





    EXHIBIT C   [***]   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 23





    EXHIBIT D   MASS MARKET CHANNELS   [***]   CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. 24 
Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?

SOLUTION: During the Term and for a period of two (2) years after the termination of the Agreement or the expiry date of the last batch manufactured whichever is later, thereafter, each Party shall obtain and maintain, at its sole expense adequate product liability insurance for the Product as it reasonably deems necessary and appropriate. Evidence of coverage, in the form of certificates of insurance, shall be provided promptly upon registration of the Product in given countries and as reasonably requested thereafter.

PROBLEM: CONTENT DISTRIBUTION AND LICENSE AGREEMENT   Deal Terms   Licensed Program/ Film or Video Inevitable Licensed Rights to ConvergTV and ConvergTV Channels and/or Distribution Outlets x All, including but not limited to: xSimultaneous Internet Streaming x OTT Television x Internet Protocol Television x Radio, short wave, microwave, fiber optic x Alternative, secondary and specialty distribution x Stored as VOD, Content Distribution Networks/Company Servers x Full Television Broadcast Rights: x Free: Terrestrial, Cable, Satellite x Pay: Terrestrial, Cable, Satellite x Direct Satellite IP Distribution Systems Licensed Territory x Worldwide ¨ Other: _______________________________________________ License Term Perpetual, unlimited runs x Other: 2 years Commencing: November 15, 2012 Run Dates Within ConvergTV determined parameters. License Consideration Revenue Share as specified in this CONTENT DISTRIBUTION AND LICENSE AGREEMENT. Authorized Language Primary: x All ¨ Other (specify): ________________________________________ May be subtitled or translated by ConvergTV into foreign language(s). Additional Terms Closed Captioned Version, - NTSC, PAL, SEACAM or standards to be developed, provided by ConvergTV. Producer Information Producer: Fulucai Productions Ltd. Name of Contact: James Durward Address: 3632-13 St. SW, Calgary, Alberta, Canada, T2T 3R1 Telephone: 403-689-3901 Email: jimdurward@shaw.ca



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Source: FULUCAI PRODUCTIONS LTD., 10-Q, 12/23/2013





  This CONTENT DISTRIBUTION AND LICENSE AGREEMENT (the Agreement) is entered into as of November 15, 2012 (the Effective Date) by and between, CONVERGTV, INC., a Delaware Corporation, (ConvergTV), whose principal place of business is located at 3201 Budinger Ave., St. Cloud, FL 34769, P.O. Box 540817, Merritt Island, Florida 32954, and Fulucai Productions Ltd. (the producer, publisher, content owner, authorized distributor, agent, or assignee of the Program rights, licensor, and grantor, any and all referred to herein as the Producer), whose principal place of business is located at 3632- 13 St. SW, Calgary, Alberta, Canada, T2T 3R1. The foregoing entities may be individually referred to as a Party or may be jointly referred to as the Parties.   The Parties agree as follow:   1. Grant of License and Rights.     (a) For the License Term and within the Licensed Territory, Producer hereby grants to ConvergTV a right and license to Distribute the program, file or video listed on the Deal Terms above (the Program) consisting of (check one) ¨ episodes (series) or x one-offs, for unlimited runs for the License Term through ConvergTV channels and/or other distribution outlets, in accordance with the License Rights. The terms License Term, Licensed Rights, and Licensed Territory shall have the meaning specified in the Deal Terms above, which such Deal Terms are part of this Agreement and are hereby incorporated herein by reference. As used in this Agreement and this license, the term Distribute includes, but is not limited to, any and all License Rights specified in the Deal Terms, all rights of distribution, the right to copy and reproduce the Program, the right to create derivative works of the Program for the purpose of creating branding elements and short form promotional materials (Promotional Works), the right to sell copies, the right to import and export the Program and the Promotional Works, the right to display the Program and Promotional Works publicity, the right to transmit the Program and Promotional Works through any transmission or delivery method that exists today, or that is created in the future, to any number of devices or users, including transmission through simultaneous delivery or streaming, and the right to sublicense and/or assign some or all of these rights to others.    (b) Producer further grants to ConvergTV the right and license to Distribute the Program on any ConvergTV channel, and/or other distribution outlets, that exists today or that is created or developed in the future and this right includes the right to Distribute on any channels of a ConvergTV affiliate and/or other distribution outlets without limitation.    (c) Producer further grants to ConvergTV the right and license to Distribute and re-Distribute, including relicensing or sublicensing, the Program at such dates and times as are determined by ConvergTV in its sole discretion.    (d) Producer further grants to ConvergTV the right and license to create (re-edit), at its sole cost and expense, new and different versions of the Program, create foreign language, subtitled or translated versions of the Program as well as to create closed captioned versions of the Program, including NTCS, PAL, SEACAM standards, or other standards, including those yet to be developed.

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Source: FULUCAI PRODUCTIONS LTD., 10-Q, 12/23/2013





     (e) Producer further grants to ConvergTV the right and license to utilize any and all footage from the Program for promotional and marketing purposes related to the Distribution of the Program and for promotion of channels or other distribution methods.    (f) The grant of rights and license pursuant to this Section 1 shall include, but not be limited to, the right of ConvergTV to Distribute and re-Distribute all or any portions of the Program and Promotional Works, including excerpts therefrom, and any new and different versions of the Program, on simultaneous internet transmission or streaming, internet protocol television and any television networks and stations, and/or other distribution outlets, via domestic or foreign television signals, as well as through CATV and DBS systems, satellite, microwave, fiber optic and/or other modes of Distribution yet to be developed, but which may be utilized by ConvergTV in the future. ConvergTV shall have the right to insert commercials within the Program.   2. Delivery.    (a) The Program shall be delivered to ConvergTV utilizing English as the primary language unless otherwise specified or as indicated in the Deal Terms.    (b) The Program will conform to and be delivered in accordance with Exhibit A.    (c) The Program must be saved as executable files (NOT as playable DVD/Blu-Ray movies).    (d) The Program materials delivered to ConvergTV shall be duplicate copies, and ConvergTV disclaims liability for any damage or loss to any original master delivered by Producer to ConvergTV.   3. Consideration. The Producer agrees and acknowledges that it will receive no upfront compensation for the rights it has granted herein and that ConvergTV has no obligation to Producer to exercise any of its rights under this Agreement. The revenue share for the Program is stated in Exhibit B. The Producer shall have thirty (30) days from the payment date to dispute the amount of any revenue share payout or any such claim or dispute is hereby waived by the Producer.   4. Program Exclusivity For The License Term Within The Licensed Territory . During the License Term (which is identified in the Deal Terms), Producer agrees that ConvergTV has the exclusive right to exercise the rights granted to it under this Agreement with respect to the Program, including those in Section 1, within the Licensed Territory.

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Source: FULUCAI PRODUCTIONS LTD., 10-Q, 12/23/2013





  5. Producer's Representations and Warranties.   The Producer represents and warrants for the benefit of ConvergTV that:    (a) it: (A) has the right to enter into and perform this Agreement and to grant ConvergTV all the rights and licenses granted by it herein; and (B) either owns the Program or controls the exhibition and distribution rights thereto;    (b) it has or will obtain, at its sole cost and expense, all rights necessary to enter into this Agreement and to permit the exercise by ConvergTV of the rights and licenses herein granted including any and all music synchronization and mechanical rights and licenses as well as any and all performance rights by the artists and/or other material susceptible to performing rights contained in the Program and that such rights that Producer does not have or cannot obtain are within the public domain and are free to exercise by ConvergTV;    (c) neither the Program, nor the production or use of the Program, or any element of the Program hereunder, will: (A) violate any right of privacy or any other right of any person, firm, corporation or other entity; (B) be defamatory; or (C) infringe upon or violate any copyright, trademark, trade name, patent or any proprietary rights of any third parties;    (d) there are no agreements, contracts, commitments or licenses, nor shall Producer enter into any agreements, contracts, commitments or grant any licenses, which would prevent the fulfillment of this Agreement or impair or conflict with the rights granted hereunder;    (e) it has all required releases for the Program and to grant the rights and licenses specified in Section 1, including but not limited to personal appearance, voice, location, sync, mechanical and for any other use requiring authorization of a person, place or thing;    (f) it will not permit its Programs, other than as provided in this Agreement, to be displayed in full length, or nearly full length, on or through any channel, distribution or other platforms or services, or by any other means, including but not limited to the distribution or viewing platforms or services of ConvergTV's competitors;    (g) it has not violated any law, rule, or regulation in connection with the creation or distribution of the Program; and    (h) it shall comply with the Producer Performance Standards set forth in Exhibit C.   6. Insurance. The Producer has no insurance requirement.   7. Indemnification. Producer shall indemnify, defend and hold harmless ConvergTV and its parents, subsidiaries, divisions, officers, directors, employees, attorneys and agents, and their respective successors or assigns, from all costs, expenses and damages arising from any breach or alleged breach of the warranties made by it in this Agreement.   Producer shall further indemnify, defend and hold harmless ConvergTV and its parents, subsidiaries, divisions, officers, directors, employees, attorneys and agents, and their respective successors or assigns, from all costs, expenses and damages arising from any costs, errors, omissions, slander, losses, liability or for any other cause as a direct or indirect result of the Distribution, transmission or publication of the Producer's Program or content.

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Source: FULUCAI PRODUCTIONS LTD., 10-Q, 12/23/2013





    8. Protection of Copyright.    (a) Producer shall take all reasonable steps to protect all copyrights pertaining to each Program from infringement and will institute such actions and proceedings as may be reasonable to prevent any unauthorized use, reproduction, exhibition or exploitation by third parties of the Program or any part thereof, or the material on which the Program is based which may be in contravention of the rights and license granted to ConvergTV herein.    (b) If the Producer does not fulfill its obligation in Section 8(a) above, ConvergTV shall have the right, but not the obligation, to take such action as ConvergTV deems reasonable under the circumstances. For this purpose, Producer hereby appoints ConvergTV its attorney-in-fact to act in its name to prevent any unauthorized use, reproduction, exhibition, or exploitation of any Program or any part thereof. Any damages awarded or settlement payments made as a result of any action taken by ConvergTV shall belong to ConvergTV.   9. Non-Disclosure. The Producer agrees to not disclose, discuss, transcribe, publish or share: (i) any information contained in this Agreement; or (ii) any non-public, confidential or proprietary information as it relates to ConvergTV with any third party, including but not limited to any individual, person, corporation, company, or distributor, except that Producer may disclose such information or materials, to the extent reasonably necessary, to its attorneys, auditors, consultants, shareholders, and other fiduciaries who are themselves bound by confidentiality obligations with regarding any such disclosed information or materials.   10. Security of Content. For Programs licensed by and/or through ConvergTV and that are resident in the ConvergTV distribution platform, ConvergTV shall provide reasonable protections for the ConvergTV distribution platform to prevent the unauthorized distribution, unauthorized licensing, unauthorized sub-licensing, piracy, theft of content and/or unauthorized monetization of the Programs from the ConvergTV distribution platform.   11. Monetization of Content. The Producer agrees and authorizes ConvergTV, its subsidiaries, agents and/or assigns to monetize the Producer's Program and content by traditional ad (commercial) insertion; product placement; branded programming; overlays; interactive advertising; merchandise; utilization of brand value; syndication (theatrical, televised, mobile, OTT, Internet, IPTV); social media television; interactive television; mobile app sales; cable, satellite, OTT, IPTV, mobile subscriber fees; subscription and premium distribution and any and all methods of content monetization that may now or in the future exist, by and on any and all known or future means of content distribution.   12. Force Majeure: If either Party is prevented from performing its obligations hereunder as a result of a force majeure event, then the non- performing Party shall not be liable to the other Party for its failure to perform such obligations. As used in this Agreement, force majeure shall mean any act of God, fire, flood, war, public disaster, other calamity, strike, or labor difficulties, or any governmental determination, action, regulation, or order, or any other occurrence beyond the reasonable control of the non-performing Party, which, despite the non- performing Party's reasonable efforts, prevents the performance of its obligations hereunder. In the case of a force majeure event, ConvergTV will not be responsible for payment of any revenue share.

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  13. Entire Agreement . This Agreement, which includes the Deal Terms and any and all exhibits, schedules or attachments to this Agreement, contains the entire agreement of the Parties, and supersedes any prior written or oral agreements between them concerning the subject matter contained herein. There are no representations, agreements, arrangements, or understandings, oral or written, between and among the Parties hereto, relating to the subject matter contained in this Agreement that are not fully expressed herein.   14.. Notices. All notices, statements or requests for approvals (Notices) that either Party hereto is required or may desire to give to the other shall be given in writing by addressing the same to the other at the addresses set forth herein, or at such other address as may be designated, in writing, by any such Party in a Notice to the other. Notices shall be made by personal delivery, overnight courier, first class registered mail (postage prepaid and return receipt requested), facsimile or e-mail. A Notice shall be deemed served and received on the date executed on a receipt of acceptance or if by personal delivery, upon physical delivery of the same.   15. Governing Law. All questions with respect to the construction of this Agreement, and the rights and liabilities of the Parties hereto, shall be governed by the laws of the State of Florida. The Parties also agree that the venue for this Agreement shall be in the County of Brevard, Florida. The Parties expressly waive any claim to jurisdiction in any federal or other state forum or venue in any other county or place. In the event of any controversy, claim or dispute between the Parties hereto, including, but not limited to, any action at law or in equity, including any action for declaratory or injunctive relief, arising out of or relating to this Agreement or the breach thereof, the prevailing Party shall be entitled to recover from the losing Party all of his or her actual attorney's fees and costs in bringing, prosecuting, or defending said action.   16. Successors and Assigns. Subject to the restrictions against assignment as herein contained, this Agreement shall be binding upon and inure to the benefit of the Parties, their predecessors, assigns, successors in interest, personal representatives, their past and present attorneys, principals, employees, independent contractors, officers, directors, shareholders, parents, issue, subsidiaries, agents, servants, estates, heirs, administrators, executors, conservators, trustees, legatees, and other affiliated entities of each of the Parties hereto.   17. Modification, Severability & Waiver . This Agreement may not be altered, modified, or changed in any manner except by a writing executed by the Party against whom it is to be enforced. Waiver of the breach of any of the provisions of this Agreement shall not be deemed to be a waiver of any other breach of the same or any other provision of this Agreement. If any term, provision, covenant or condition of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

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Source: FULUCAI PRODUCTIONS LTD., 10-Q, 12/23/2013





    18. Audit. Each of the Parties may, at its own expense, audit the other Party's compliance with this Agreement, including but not limited to, auditing the other Party's representations and warranties.   19. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall be deemed to be one and the same instrument. All counterparts so executed shall constitute one agreement binding upon all Parties, notwithstanding that all Parties are signatory to the original or the same counterpart. The Parties may execute this Agreement by facsimile and/or electronic means and such signatures shall be treated as original signatures for all purposes.   IN WITNESS WHEREOF the Parties hereto have caused this Agreement as of the Effective Date.

CONVERGTV, INC. by     Name:  Title:   FULUCAI PRODUCTIONS LTD.(PRODUCER) by     Name:  Title:

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Source: FULUCAI PRODUCTIONS LTD., 10-Q, 12/23/2013







Source: FULUCAI PRODUCTIONS LTD., 10-Q, 12/23/2013 
Question: Highlight the parts (if any) of this contract related to Audit Rights that should be reviewed by a lawyer. Details: Does a party have the right to  audit the books, records, or physical locations of the counterparty to ensure compliance with the contract?

SOLUTION: Each of the Parties may, at its own expense, audit the other Party's compliance with this Agreement, including but not limited to, auditing the other Party's representations and warranties.

PROBLEM: Exhibit 10.26

STRATEGIC ALLIANCE AGREEMENT

This STRATEGIC' ALLIANCE AGREEMENT (including the exhibits and schedules hereto, this Agreement) is made and entered into this 16 day of August. 2012 (the Effective Date) by and between Lightbridge Corporation, a Nevada Corporation  (Lightbridge), and Lloyds Register FNMA, acting through its office in Abu Dhabi (Lloyds and. together with Lightbridge. the Parties).

BACKGROUND

Lightbridge and Lloyds believe  that, by cooperatively combining their considerable experience, expertise and  financial and market resources, they can increase the volume of business they can conduct in in the area of nuclear consulting and strategic advisory services in the United Arab Emirates. Accordingly, in consideration of the foregoing and of the mutual representations, warranties, covenants and agreements contained in this Agreement and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound by this Agreement, agree as follows:

ARTICLE I  DEFINITIONS

As used in this Agreement:

Affiliate shall mean,  with respect to any referenced Person, any other Person that directly or  indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such referenced Person.

Business Day shall mean any day other than a Saturday, a Sunday or a day on which commercial banks in New York or London are generally authorized or required to close.

Confidential Information shall mean, as to any Party as a Recipient, (a) all non-public written,  graphic, oral, electromagnetic or other information (including technical, financial and business information regarding models, market studies, business plans. clients' names, reports, plans. projections, data or any other  information) relating to the business, strategy, prospects or plans of the other  Party or any of the other Party's Affiliates and (b) any reproductions, copies,  notes, analyses, work papers. compilations, studies, interpretations or any  other document or information derived from any of the foregoing.

Project shall mean any  undertaking involving the provision of nuclear consulting or strategic advisory  services to any entity in the United Arab Emirates.

Government Authority shall mean any national, federal, provincial, state, prefectural or municipal governmental tribunal or organization, or any political subdivision. instrumentality. Ministry, department, legislative body, agency, court, tribunal, authority, corporation, commission or other body or entity of, or under the direct or indirect control of, any of the foregoing, including any central bank or other fiscal, monetary or other authority.

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Law shall mean any law, statute, ordinance, act, legislation, bill, enactment, policy, treaty, international agreement, ordinance, judgment, injunction, award, decree, rule, regulation, interpretation, determination, requirement, writ or order of, or any term of any license or permit issued by, any Government Authority.

Person shall mean any  individual, corporation, partnership, limited liability company, joint venture,  association, trust, unincorporated organization or other entity.

Recipient shall mean each Party. whenever it has received or is receiving Confidential Information directly or indirectly from the other Party or any of its Affiliates.

ARTICLE II  GENERAL SCOPE; RELATIONSHIP OF THE PARTIES

Section 2.1 General Scope. During the term of this Agreement, the Parties shall actively seek attractive  Projects and, in pursuit of any potential Project, shall promote the Lightbridge-Lloyds strategic alliance whenever given the opportunity to do so. Each Party shall present to the other Party every potential Project which such Party desires to pursue.

Section 2.2 Relationship of Parties. With respect to any Project, regardless of which Party identified such Project, the Parties agree that Lloyds shall act as prime contractor on any Project and that Lightbridge shall have a right of first refusal to participate in such Project as a sub- contractor to Lloyds, and shall be entitled to perform such work which would generate up to twenty-five percent (25%) of the total fees payable to Lloyds as general contractor under the Project.

Section 2.3 Identification of Projects. Upon identification of a Project, the Parties shall jointly prepare a proposed plan for the acquisition and execution of the Project, which shall include a detailed forecasted budget therefore. Upon the award of a prime contract regarding a Project to Lloyds, the Parties shall attempt in good faith to negotiate and enter into a subcontract agreement whereby the scope of Lightbridge's services on the Project, and compensation to Lightbridge therefore, shall be specified.

Section 2.4 No Commitment. Notwithstanding anything to the contrary, the Parties understand and agree that each Party shall have the right, at all times and in their sole and absolute discretion, to pursue or not pursue or continue with or not continue with a Project and that neither Party shall have any obligation or liability to the other Party arising out of or relating to a decision not to pursue a Project for any reason. Each Party agrees that it shall not pursue any damages against the other Party or any of its Affiliates arising out of or relating to a decision by such Party or any of its Affiliates not to pursue or continue with a Project, regardless of' the reason for such decision.

ARTICLE III  COMPLIANCE WITH LAWS

Each Party shall, and shall  cause its Affiliates to. at all times, comply in all respects with all  applicable Laws in connection with the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, each Party (the Relevant Party) shall not,  and shall cause its Affiliates not to, do or cause to be done any of the following in connection with the transactions contemplated by this Agreement: (a) directly or indirectly through any other Person. pay, offer to pay, promise to pay, or authorize the payment of any monies or anything of value to any official or employee of any Government Authority or any political party or candidate for political office for the purpose of illegally or improperly inducing or rewarding any action by such official, employee or candidate favorable to the Relevant Party or any of its Affiliate or (b) take any other action that, if taken by a Person subject to United States law, would violate  the United States Foreign Corrupt Practices Act. Each Party acknowledges and agrees that is familiar with the United States Foreign Corrupt Practices Act.

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ARTICLE IV  CONFIDENTIALITY

Section 4.1  Obligation to  Maintain and Protect Confidentiality.  The Recipient agrees that it shall  receive, protect and maintain the Confidential Information in the strictest confidence. The Recipient agrees to keep all of the Confidential Information confidential, not to use that Confidential Information other than for the purpose of this Agreement and not to disclose the same to any Person other than in accordance with this Agreement without the prior written consent of the Party from whom such Confidential Information was received, unless:

(a) the Recipient is required to make the disclosure by Law or under any administrative guideline or directive (whether or not having the force of Law) the observance of which, if not having the force of Law, is in accordance with the practice of responsible persons similarly situated;

(b) the disclosure is necessary for the purpose of obtaining any consent, authorization, approval or license from any Government Authority with respect to the transactions effected pursuant to this Agreement;

(c) it is necessary that the disclosure be made to any taxation or fiscal authority;

(d) the disclosure is made in accordance with Section 4.3 to the officers, employees, or agents of the Recipient, or to the professional advisors of the Recipient for the purpose of obtaining professional advice in relation to this Agreement or any matter the subject thereof or otherwise for the purpose of consulting those professional advisors;

(e) the disclosure is necessary or desirable in relation to any procedure for discovery of documents and any proceedings before any court, tribunal (including any arbitral tribunal) or regulatory body; or

In respect of any Confidential Information to be disclosed by the Recipient pursuant to the exceptions referred to in this Section 4.1, the Recipient must, prior to such disclosure, notify the Party from whom the Confidential Information was received of the need or intention to disclose.

Section 4.2 Exceptions to Confidentiality. The confidentiality provisions contained in this Agreement do not apply to information or details of the Confidential Information which:

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(a) are part of the public domain at the time acquired by the Recipient;

(b) are not acquired by the Recipient. either directly or indirectly, from the disclosing Party or its Affiliates;

(c) are made known to the Recipient by a Person who did not acquire knowledge of the information or of the details, either directly or indirectly, under an obligation of confidentiality or has an independent right to disclose same;

(d) after being made known to the Recipient, becomes part of the public domain through no fault of the Recipient or of any Person to which the Recipient has disclosed details of the Confidential Information; or

(e) the Recipient can establish were in its possession prior to the date of disclosure of such details by the disclosing Party.

Section 4.3 Disclosure to Affiliates; Safekeeping. The Recipient agrees that prior to disclosure of Confidential Information to any Affiliate, it will inform the Affiliate of the confidential nature of the Confidential Information and require such Affiliate to treat the Confidential Information as confidential according to this Agreement as if such Affiliate were a Recipient. The Recipient shall, and shall cause each of its Affiliate to, use its best endeavors to procure and ensure at  all times the safe and confidential storage of Confidential Information in their  possession or control. Without limiting the foregoing, the Recipient shall, and shall cause its Affiliate to, safeguard the Confidential Information to the same extent as if it were information of or pertaining to the Recipient. and the Recipient acknowledges that the release, publication or dissemination of the Confidential Information could be harmful to a Project or a Party.

Section 4.4 Return of Confidential Information. The Recipient agrees that upon the written request of the disclosing Party it will promptly (a) return all Confidential Information and any and all copies thereof to the disclosing Party and shall require each of its Affiliate to do likewise or (b) destroy the same and deliver a certificate of destruction to the disclosing Party.

Section 4.5 Survival of Confidentiality Obligations. This Article IV shall survive termination of this Agreement.

ARTICLE V  EVENTS OF DEFAULT; TERM AND TERMINATION

Section 5.1  Events of Default.  Each of the following events constitutes an event of default (an  Event  of Default)  by a Party (the Defaulting Party) under this Agreement:

5.1.1 the Defaulting Party fails to perform in any material  respect any obligation under this Agreement. or any representation or warranty made by the Defaulting Party in this Agreement is untrue in any material respect, and such failure is not cured within 30 days after the non-Defaulting Party notifies the Defaulting Party of such failure; or

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5.1.2  the Defaulting Party:

(a) files a petition or otherwise commences, or authorizes or acquiesces in the commencement of. a proceeding or cause under any bankruptcy, winding up, liquidation. insolvency, receivership or similar law for the protection of creditors or has such a petition filed or proceeding commenced against it. which, in the case of an involuntary petition or proceeding, remains undismissed and unstayed for 90 days; or

(b) is otherwise adjudicated insolvent or unable to pay its debts as they become due, otherwise makes an assignment for the benefit of its creditors or is dissolved or otherwise terminated.

Section 5.2 Remedies. Upon the occurrence and during the continuation of any Event of Default, the non-Defaulting Party may immediately terminate this Agreement by giving notice  to the Defaulting Party. The non-Defaulting Party's remedy set forth in the  immediately preceding sentence is not intended to be exclusive and is in addition to, and may be exercised concurrently with, any other right or remedy that may otherwise be available to the Non-Defaulting Party at law or in equity. Without limiting the foregoing and for the avoidance of doubt, the Non-Defaulting Party may recover damages against the Defaulting Party even if this Agreement is terminated (including damages arising out of such termination).

Section 5.3 Term and Termination. This Agreement is effective on the Effective Date and shah continue in effect until the earlier of (a) the fifth (5t h) anniversary of the Effective Date, and (b) termination by either Party for any reason upon thirty (30) days' written notice to the other Party; provided, however, that no Party shall be able to terminate this Agreement so long as such Party is a Defaulting Party under this Agreement. The occurrence of the Termination Date shall not relieve either Party of any unfulfilled obligation or undischarged liability of such Party relating to the period prior to the Termination Date.

ARTICLE VI  NOTICE

Section 6.1  Notices. All  notices, consents, demands or other communications (collectively, the  Notices) made pursuant to this Agreement shall be in writing, in the English language and signed and correctly dated by the Party sending same. All Notices shall he delivered personally (by courier or otherwise) or by facsimile to the receiving Party at the address given below:

If to Lightbridge  With copy to:  Addressed to:       Lightbridge Corporation Pillsbury Winthrop Shaw Pittman LLP 1600 Tysons Boulevard 2300 N Street, NW Tysons Corner, VA 22102 Washington, DC 20037 Attn: James D. Guerra Attn: Louis A. Bevilacqua Tel.: 571-730-1200 Tel.: 202-663-8158

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If to Lloyds  With copy to: Addressed to:        Energy Area Business Manager Global Nuclear Director Lloyd's Register, EMEA Lloyd's Register Festival Office Tower, Suite 2001 71 Fenchurch Street Dubai Festival City London Al Rebat Street EC3M 4BS Ras Al Khor, Deira United Kingdom Dubai Tel: +44 20 7423 1677 United Arab Emirates   Tel.: +971 4 701 4236

Section 6.2 Effective Date of Notices. Any Notice delivered personally shall be deemed to have been given on the date it is so delivered, or upon attempted delivery if acceptance of delivery is refused, and any notice delivered by facsimile transmission shall be deemed to have been given on the first Business Day it is received (or on the first Business Day after it is received, if received on other than a Business Day). Notice given in any other manner shall be deemed to have been given on the first Business Day it is received (or on the first Business Day after it is received, if received on other than a Business Day).

Section 6.3 Change of Address for Notices. A Party may change the address to which Notices hereunder are to be sent to it by giving Notice of such change of address in the manner provided in Section 11.1.

ARTICLE VII  MISCELLANEOUS

Section 7.1 No Partnership; No Agency. Nothing contained in this Agreement shall be construed so as to  create a partnership, joint venture or common enterprise between the Parties. Neither Party shall be liable for the debts or obligations of the other Party. Each Party shall limit its activities pursuant to the terms of this Agreement to that of the functions and related services expressly set forth herein. Without limiting the foregoing, neither Party is authorized to assume or create any obligation, liability, or responsibility, expressed or implied, on behalf of or in the name of the other Party or any of its Affiliates or to bind the other Party or any of its Affiliates in any manner whatsoever, and neither Party shall hold itself out as an agent or legal representative of the other Party or any of its Affiliates.

Section 7.2 Governing Law. The terms of this Agreement shall be governed by and construed in accordance with the laws of England.

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Amendment and Modifications. This Agreement may be amended, modified or supplemented at any time by the Parties but only pursuant to an instrument in writing signed by both of them.

Section 7.4 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

Section 7.5 Assignment. No Party may assign this Agreement without the prior written consent of the other Party.

Section 7.6  Entire Agreement. This Agreement, together with that certain Non-Circumvention and  Confidentiality Agreement, dated December 16, 2011, between Lightbridge and Lloyd's Register Group Services Limited, contains the entire Agreement of the Parties with respect to the transactions contemplated hereby and supersedes all prior understandings and agreements of the Parties with respect to the subject matter hereof.

Section 7.7 Severability. If any provision of this Agreement is held invalid or unenforceable. all other provisions will not be affected. With respect to the provision held invalid or unenforceable, the Parties will amend this Agreement as necessary to effect the original intent of the parties to this Agreement as closely as possible.

Section 7.8 No Third-Party Beneficiaries. Nothing in this Agreement, expressed or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any Person other than the Parties and their respective successors and permitted assigns, nor is anything in this Agreement intended to relieve or discharge any obligation of any third person to any Party or give any third person any right of subrogation or action against any Party.

Section 7.9 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different Parties in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. Delivery of an  executed counterpart of the signature page of this Agreement by facsimile  transmission shall he equally as effective as delivery of a manually executed counterpart of this Agreement.

Section 7.10 Expenses. Each of the Parties shall pay its own costs incurred in connection with the negotiation, preparation and execution of this Agreement.

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

Lightbridge Corporation      By:/s/ James D. Guerra   Name: James D. Guerra   Title: COO

Lloyds Register EMEZ      By:/s/ N.D.A.M. Nooren   Name: N.D.A.M. Nooren   Title: AREA Business Manager - Energy MEAA

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Question: Highlight the parts (if any) of this contract related to Anti-Assignment that should be reviewed by a lawyer. Details: Is consent or notice required of a party if the contract is assigned to a third party?

SOLUTION:
No Party may assign this Agreement without the prior written consent of the other Party.