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 the index where the answer starts. If multiple answers seem to exist, write the index of the answer that is the most plausible. If multiple indices must be used to answer the question, the output should be a common separated list of indices.
PROBLEM: Execution Version Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) would likely cause competitive harm to the Company, if publicly disclosed. Double asterisks denote omissions.   DEVELOPMENT AGREEMENT   This Development Agreement (this Agreement) is entered into and effective as of September 30, 2019 (Effective   Date) by and between Howmedica Osteonics Corp., a New Jersey corporation, also known as Stryker Orthopaedics   (Stryker), and Conformis, Inc., a Delaware corporation having a principal place of business located at 600 Technology Park   Drive, Billerica, MA 01821 (Conformis). Stryker and Conformis are collectively referred to herein as the Parties and   individually as a Party.   WHEREAS, the Parties are concurrently entering into an asset purchase agreement for Stryker's purchase of certain   Conformis assets concerning Patient-Specific Instrumentation (Asset Purchase Agreement), and a License Agreement, a   Distribution Agreement and a Quality Agreement, as defined in and attached to the Asset Purchase Agreement (collectively, such   agreements are referred to herein as the Other Agreements).   WHEREAS, Stryker and its Affiliates have developed and commercialized an Off-The-Shelf Knee Implant offered under   the trademark Triathlon.   WHEREAS, Conformis currently offers Patient-Specific Instrumentation for use with its Patient-Specific Implants,   including partial and total knee and hip arthroplasty.   WHEREAS, Stryker desires that Conformis develop, in accordance with the R&D Program, certain Patient-Specific   Instrumentation to be used with the current version of the Off-The-Shelf Knee Implant offered under the trademark Triathlon (such   Patient-Specific Instrumentation as so developed, the KIB Product).   THEREFORE, in consideration of the mutual representations, warranties and covenants herein and in the Other   Agreements constituting good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties   hereby agree as follows:   ARTICLE I   DEFINITIONS   1.1 Definitions. For purposes of this Agreement, the following terms shall have the following meanings, and to the extent   not defined in this section or otherwise in this Agreement, a term shall have the meaning ascribed to it in any of the Other   Agreements:   Source: CONFORMIS INC, 10-Q, 11/1/2019



Acceptance and Accept have the meaning set forth in Article 3.4 of this Agreement.   Acceptance Criteria has the meaning set forth in the R&D Work Plan.   Acceptance Notification Period has the meaning set forth in Article 3.3 of this Agreement.   Affiliate has the meaning set forth in the Asset Purchase Agreement.   Agents means Third Parties who are acting under the direction or control of a Party.   Applicable Laws means all applicable federal, state, local and foreign laws, ordinances, rules, regulations, orders,   writs, injunctions and decrees of any kind.   Asset Purchase Agreement has the meaning set forth in the recitals.   Change of Control has the meaning set forth in the Asset Purchase Agreement.   Claims has the meaning set forth in Article 7.3(a) of this Agreement.   Confidential Information has the meaning set forth in the Asset Purchase Agreement.   Conformis Background IP means any Invention, and all Intellectual Property rights underlying such Invention, that is,   as of the Effective Date, owned or licensable by Conformis without causing a breach of, or incurring any obligation to, a third   party, in each case to the extent necessary or reasonably useful to design, develop, manufacture, sell or otherwise exploit the KIB   Product, and for the avoidance of doubt, excluding the Purchased Assets, Conformis Foreground IP, Stryker Background IP,   Improved Stryker Background IP and Improved Conformis Background IP.   2   Source: CONFORMIS INC, 10-Q, 11/1/2019



Conformis Foreground IP means any Invention first developed by Conformis after the Closing Date other than in the   performance of the R&D Program, and all Intellectual Property rights underlying such Invention (for the avoidance of doubt,   excluding any Intellectual Property rights subsisting prior to the Closing Date or generated in the performance of the R&D   Program). For the avoidance of doubt, Conformis Foreground IP shall not include any Inventions using Stryker Confidential   Information (which shall not include the Purchased Assets for the purposes of the definition of Conformis Foreground IP) or   Stryker Background IP.   Conformis Indemnified Parties has the meaning set forth in Article 7.3(b) of this Agreement.   Conformis-Prosecuted Joint IP Rights has the meaning set forth in Article 5.8 of this Agreement.   Court has the meaning set forth in the Asset Purchase Agreement.   Deliverables has the meaning set forth under the R&D Work Plan.   Disclosing Party has the meaning set forth in the Asset Purchase Agreement.   Distribution Agreement has the meaning set forth in the Asset Purchase Agreement.   Equipment has the meaning set forth in Article 5.6(a) of this Agreement.   Failure Notice has the meaning set forth in Article 3.4 of this Agreement.   Finally Rejects has the meaning set forth in Article 3.4 of this Agreement.   Force Majeure Event has the meaning set forth in Article 10.4(a) of this Agreement.   3   Source: CONFORMIS INC, 10-Q, 11/1/2019



Improved Conformis Background IP means any Invention to the extent first arising in the performance of the R&D   Program, whether or not embodied in the KIB Product, that constitutes an improvement to Conformis Background IP, Conformis   Confidential Information (which shall not include any Confidential Information owned or commonly owned by Stryker) or the   Purchased Assets, and all Intellectual Property rights underlying such Invention (but expressly excluding all Transferred IP,   Conformis Foreground IP, Conformis Background IP and Stryker Background IP, and, for the avoidance of doubt, excluding all   Intellectual Property rights subsisting prior to the Closing Date).   Improved Stryker Background IP means any Invention to the extent first arising in the performance of the R&D   Program, whether or not embodied in the KIB Product, that constitutes an improvement to Stryker Background IP or any Stryker   Confidential Information (which shall not include the Purchased Assets for the purposes of this definition), and all Intellectual   Property rights underlying such Invention (but expressly excluding all Transferred IP, Conformis Foreground IP, Conformis   Background IP and Stryker Background IP, and, for the avoidance of doubt, excluding all Intellectual Property rights subsisting   prior to the Closing Date).   Insolvency Event means, with respect to any Party, the occurrence of any one of the following events:   (i) an involuntary proceeding is commenced against such Party under any applicable United States bankruptcy, insolvency,   reorganization or other similar United States or foreign law now or hereafter in effect, or a proceeding is commenced seeking   appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) for such Party or for all or   any substantial part of its property and such proceeding shall not be dismissed within [**] or an order for relief by a court of   competent jurisdiction shall be entered in any such proceeding; or   (ii) such Party shall commence a voluntary proceeding under any applicable United States or foreign bankruptcy, insolvency,   reorganization or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary   case under any such law, or shall consent to the appointment of or taking possession by a receiver, liquidator,   4   Source: CONFORMIS INC, 10-Q, 11/1/2019



assignee, custodian, trustee, sequestrator (or other similar official) of such Party or of all or any substantial part of its property, or   shall make an assignment for the benefit of creditors.   Intellectual Property has the meaning set forth in the Asset Purchase Agreement.   Invention means any idea, invention, discovery, know-how, data, work of authorship, information, improvement,   technology, process, concept or material, whether or not patentable, copyrightable or protectable as a trade secret, and whether   or not reduced to practice or memorialized in writing.   Joint CI has the meaning set forth in the Asset Purchase Agreement.   Joint IP has the meaning set forth in Article 5.1(c) of this Agreement.   Joint IP Rights has the meaning set forth in Article 5.8 of this Agreement.   KIB Product has the meaning set forth in the recitals.   KIB Product IP means any Invention first arising in the performance of the R&D Program, whether or not embodied in   the KIB Product, and all Intellectual Property rights underlying such Invention (but expressly excluding all Transferred IP,   Conformis Background IP, Stryker Background IP, Improved Conformis Background IP and Improved Stryker Background IP,   and, for the avoidance of doubt, excluding all Intellectual Property rights subsisting prior to the Closing Date).   License Agreement has the meaning set forth in the Asset Purchase Agreement.   Off-The-Shelf Implant has the meaning set forth in the Asset Purchase Agreement.   5   Source: CONFORMIS INC, 10-Q, 11/1/2019



Off-The-Shelf Knee Implant has the meaning set forth in the Asset Purchase Agreement.   Other Agreements has the meaning set forth in the recitals.   Patents has the meaning set forth in the Asset Purchase Agreement.   Patient-Specific Implants has the meaning set forth in the Asset Purchase Agreement.   Patient-Specific Instrumentation has the meaning set forth in the Asset Purchase Agreement.   Person has the meaning set forth in the Asset Purchase Agreement.   Prior CDA has the meaning set forth in the Asset Purchase Agreement.   Purchased Assets has the meaning set forth in the Asset Purchase Agreement.   Receiving Party has the meaning set forth in the Asset Purchase Agreement.   Redelivery Period has the meaning set forth in Article 3.4 of this Agreement.   R&D Program means work performed in the development of the KIB Product under this Agreement pursuant to the   R&D Work Plan.   R&D Work Plan means the research and development plan set forth in Exhibit 1.   Relevant Indemnified Parties means (a) if Stryker is the indemnified Party, the Stryker Indemnified Parties and (b) if   Conformis is the indemnified Party, the Conformis Indemnified Parties.   6   Source: CONFORMIS INC, 10-Q, 11/1/2019



Representatives has the meaning set forth in the Asset Purchase Agreement.   Stryker Background IP means any Invention, and all Intellectual Property rights underlying such Invention, that is, as   of the Effective Date owned or licensable by Stryker without causing a breach of, or incurring any obligation to, a third party, in   each case to the extent each such Invention is (a) necessary or reasonably useful to design, develop, manufacture, sell and   otherwise exploit the KIB Product and (b) provided to Conformis by or on behalf of Stryker in connection with Conformis'   activities under this Agreement, and, for the avoidance of doubt, excluding the Transferred IP, Conformis Background IP,   Improved Conformis Background IP and Improved Stryker Background IP.   Stryker Indemnified Parties has the meaning set forth in Article 7.3(a) of this Agreement.   Stryker-Prosecuted Joint IP Rights has the meaning set forth in Article 5.8 of this Agreement.   Termination Notice means a written notice delivered by one Party to the other Party of its election to terminate this   Agreement pursuant to Article VIII.   Third Party has the meaning set forth in the Asset Purchase Agreement.   Trademarks has the meaning set forth in the Asset Purchase Agreement.   Transferred IP has the meaning set forth in the Asset Purchase Agreement.   Triathlon has the meaning set forth in the Asset Purchase Agreement.   Wire Instructions has the meaning set forth in the Asset Purchase Agreement.   7   Source: CONFORMIS INC, 10-Q, 11/1/2019



ARTICLE II   RESEARCH AND DEVELOPMENT PROGRAM   2.1 R&D Work Plan. The Parties agree to conduct the R&D Program pursuant to the R&D Work Plan and to perform   their respective obligations therein. To the extent Conformis' performance under the R&D Program is delayed due to Stryker's   delay in performing any of its obligations in accordance with the timelines in the R&D Work Plan, the applicable timelines shall be   deemed extended by a period of time corresponding to the length of such portion of the delay attributable to Stryker, on a day-by-   day basis. The R&D Work Plan may be amended by mutual written agreement of the Parties from time to time.   2.2 Agents or Third Parties. To the extent working with Agents or other Third Parties is permitted under the R&D Work   Plan, should a Party wish to engage an Agent or any other Third Party in connection with the R&D Work Plan or any other work   under this Agreement, such Party must obtain in advance a written agreement by such Agent or other Third Party (i) to assign to   the Party all Inventions conceived, created or generated by the Agent or other Third Party, and (ii) to maintain all Confidential   Information in confidence as set forth in Section 5.2.   ARTICLE III DELIVERABLES AND COMPLETION   3.1 Deliverables. Subject to the remedies set forth in Section 3.4, Conformis shall furnish Stryker with the Deliverables   as defined in the R&D Work Plan, and Stryker shall have the opportunity to analyze and test each Deliverable for the purposes of   determining Acceptance as set forth in the R&D Work Plan. Each Deliverable shall be deemed to be completed once such   Deliverable has been Accepted (as defined below).   3.2 Free from Infringement. Without the consent of Stryker, Conformis shall not introduce any structure or   methodology in the Deliverables (including a Deliverable within a Product or a Stryker Product) that (1) raise a colorable   argument of patent infringement in the manufacture, use, sale, offer for sale or importation of the Deliverable as such Deliverable   8   Source: CONFORMIS INC, 10-Q, 11/1/2019



is intended to be exploited under the Other Agreements, (2) misappropriate any Confidential Information of any Third Party, or   (3) otherwise violate any Intellectual Property rights of any Third Party. For clarity, disclosure of a matter on the Disclosure   Schedules to the Asset Purchase Agreement shall not be deemed consent by Stryker under this Section 3.2.   3.3 Completion. After a Deliverable has been furnished to Stryker, Stryker (or its Agent designee) will be entitled to   analyze and test the Deliverable to determine if it operates in accordance with and otherwise conforms to the applicable   Acceptance Criteria set forth in R&D Work Plan. Conformis shall provide such assistance as Stryker may reasonably request in   such determination. Stryker shall have [**] (Acceptance Notification Period) following the date the Deliverable is received by   Stryker to Accept or reject the Deliverable as described in Section 3.4.   3.4 Acceptance or Rejection. Respecting any Deliverable for Milestone #1 or Milestone #2, as set forth below, if   Stryker determines that a Deliverable operates in accordance with and otherwise conforms to the applicable Acceptance Criteria   pursuant to the R&D Work Plan, then Stryker will notify Conformis in writing that Stryker Accepts such Deliverable. If Stryker   reasonably determines that a Deliverable does not operate in accordance with or otherwise conform to the applicable Acceptance   Criteria, then Stryker will provide Conformis with a written notice of rejection within the Acceptance Notification Period   describing the defect in view of the relevant Acceptance Criteria and including sufficient detail with respect to such Stryker testing   and testing results as Conformis reasonably requests (Failure Notice). Conformis shall have [**] (or such longer period of time   as may be agreed between the parties in good faith should the scope and complexity of the applicable Deliverable warrant some   longer period of time) (Redelivery Period) following the date it receives the Failure Notice to correct and redeliver the   Deliverable. If Conformis timely delivers a corrected version of the Deliverable within the Redelivery Period, then Stryker will be   9   Source: CONFORMIS INC, 10-Q, 11/1/2019



entitled to repeat its acceptance analysis and testing process for the purposes of determining Acceptance as set forth in the R&D   Work Plan until such Deliverable operates in accordance with or otherwise conforms to the applicable Acceptance Criteria;   provided, however, that if Stryker properly rejects a particular Deliverable three (3) or more times in accordance with this Article   III, or if Conformis fails to deliver a version or corrected version, as the case may be, of the Deliverable within any respective [**]   period, Stryker may, terminate this Agreement in accordance with Section 8.2(c) (in the event of such three (3) rejections, Stryker   Finally Rejects the Deliverable). Such termination, together with the provisions of Section 5.2 of the License Agreement,   constitutes as Stryker's sole remedy and Conformis' exclusive liability in the event of any such rejection or failure by Conformis to   deliver materially conforming Deliverables hereunder so long as such rejection or failure does not arise from Conformis' fraud,   willful misconduct, gross negligence or bad faith. Stryker shall be deemed to have accepted a Deliverable timely furnished to it   unless (a) the Deliverable fails to operate in accordance with and otherwise conform the applicable Acceptance Criteria, and (b)   Stryker provides Conformis a written Failure Notice within the Acceptance Notification Period in accordance with this Section   3.4 (any acceptance or deemed acceptance, described in this Section 3.4, Acceptance or Accept). Acceptance of a   Deliverable shall not constitute a waiver of any rights Stryker may have based on Conformis' warranties set forth in this   Agreement.   3.5 Payment for Milestones. Stryker shall pay to Conformis the following milestone payments for the development   work to be conducted hereunder if and when the following milestones are met, as follows:   (a) Milestone #1 - Within thirty (30) days following the date on which Stryker receives the first prototype of the Patient-   Specific Instrumentation delivered to it by Conformis in accordance with the R&D Work Plan, Stryker shall pay to Conformis a   total of two million U.S. dollars ($2,000,000); and   10   Source: CONFORMIS INC, 10-Q, 11/1/2019



(b) Milestone #2 - Within thirty (30) days following the date on which there is a design freeze of the Patient-Specific   Instrumentation for the KIB Product in accordance with the R&D Work Plan, Stryker shall pay to Conformis a total of three   million U.S dollars ($3,000,000).   3.6 Payment. Stryker shall make all payments to Conformis required herein by wire transfer in accordance with the Wire   Instructions. Such payments are non-refundable and non-creditable except as set forth in the Other Agreements.   ARTICLE IV   RESTRICTIVE COVENANT   4.1 Exclusivity. Except as specifically provided in the Distribution Agreement, Conformis shall be prohibited from   developing or assisting another in developing, or causing another to develop, Patient-Specific Instrumentation for Off-The-Shelf   Knee Implants for any Third Party in the field of orthopedics until January 1, 2032 (or earlier, to the extent set forth in Section   2.3.3.4 or Section 2.3.5 of the Distribution Agreement), with the exception that Conformis (including any entity involved in a   Change of Control of Conformis, any such entity an Acquirer), may develop Patient-Specific Instrumentation for any Off-The-   Shelf Implants of Conformis, an Acquirer or any of their Affiliates. For purposes of clarity, the foregoing does not prevent   Conformis from granting any license, release, covenant not to sue or other immunity to any third party under any Patents, including   any such immunity that would authorize manufacture, use or sale of Patient-Specific Instrumentation for Off-The-Shelf Knee   Implants outside the Buyer Field.   ARTICLE V   INTELLECTUAL PROPERTY   5.1 Inventions.   (a) Inventorship of all Inventions developed by either Party, or both Parties, in the performance of the R&D Program, shall   be determined in accordance with the inventorship laws of the United States, even to the extent such Invention is not pursued in   patent applications.   (b) All right, title and interest in and to the Improved Stryker Background IP will vest solely in Stryker. Conformis agrees   to assign and hereby assigns to Stryker all right, title and interest in and to all Improved Stryker Background IP in which ownership   in same has vested in   11   Source: CONFORMIS INC, 10-Q, 11/1/2019



Conformis by operation of law or by assignment by its employees or consultants; and to facilitate such assignment to Stryker,   Conformis agrees (i) to regularly ensure that its employees and consultants timely make any appropriate assignments to it of that   which constitutes Improved Stryker Background IP, and (ii) at Stryker's reasonable request, to execute and have its employees   and consultants execute, as necessary, all assignments and any other documentation necessary to perfect title in Stryker of such   Improved Stryker Background IP.   (c) All right, title and interest in and to the Improved Conformis Background IP and KIB Product IP (Joint IP) shall be   owned jointly by the Parties. Subject to the limitations set forth in this Agreement, the Joint IP may be used freely by either Party or   its Affiliates and licensed to Third Parties by Conformis and its Affiliates, on the one hand, outside of the Buyer Field or by Stryker   and its Affiliates, on the other hand, within the Buyer Field, in each case, without the consent of, or duty to account to or notify, the   other Party, but, except with respect to external licenses of the Improved Conformis Background IP by Conformis or its Affiliates   to Third Parties, any external Third Party license shall be governed in accordance with the last sentence of Section 4.3(c) of the   APA. Each Party to whom ownership is to vest in Joint IP by operation of law or by assignment by its employees or Agents agrees   to assign and hereby assigns to the other Party an undivided one-half right, title and interest in and to all Joint IP; and to facilitate   such assignment, the Party possessing such ownership agrees (i) to regularly ensure that its employees and consultants timely make   any appropriate assignments to it; and (ii) at the other Party's reasonable request, to execute and have its employees and   consultants execute, as necessary, all assignments and any other documentation to perfect the undivided one-half right, title and   interest in and to the other Party of such Joint IP.   (d) Notwithstanding anything to the contrary, the foregoing does not constitute either (1) the grant by Conformis to Stryker   of any license or immunity of any kind with respect to the Conformis Background IP or Conformis Foreground IP, regardless of   the extent to which the Joint IP constitutes improvements to the Conformis Background IP or Conformis Foreground IP, (2) the   grant by Stryker to Conformis of any license or immunity of any kind with respect to the Stryker Background IP, or (3) the grant   by either Party of any license or immunity of any kind under any Intellectual Property rights owned by such Party, regardless of   whether the exploitation of the Joint IP would infringe such Intellectual Property rights. Neither Party shall assign a partial interest in   12   Source: CONFORMIS INC, 10-Q, 11/1/2019



the Joint IP or Joint IP Rights to any Affiliate or Third Party (i.e., neither Party shall create any additional joint owners of the Joint   IP), but each Party may assign all of its right, title and interest in and to the Joint IP and Joint IP Rights to an Affiliate or Third Party   pursuant to and in accordance with Section 10.2.   (e) Conformis shall promptly disclose to Stryker all (i) Improved Stryker Background IP, and (ii) Joint IP. Stryker shall   promptly disclose to Conformis all Joint IP.   (f) To the extent required and for the avoidance of doubt, Stryker hereby grants Conformis, and Conformis hereby   accepts, a non-exclusive license to the Stryker Background IP and Improved Stryker Background IP solely for purposes of   performing any obligations under this Agreement and the Distribution Agreement.   5.2 Confidential Information. The provisions of Sections 4.3(a)-(i) of Article 4 of the APA are incorporated herein as if   fully set forth herein.   5.3 Maintenance of Records. Each Party shall prepare and maintain complete and accurate records concerning all   Inventions for the purpose of documenting any possible Intellectual Property rights arising under this Agreement.   5.4 No Other Rights.   (a) Conformis acknowledges and agrees that, as between the Parties, Stryker owns all right, title and interest, including all   Intellectual Property rights, within the Stryker Background IP and Stryker's Confidential Information, including any Stryker   Confidential Information underlying the Joint IP, and that, under this Agreement, except as expressly set forth herein, Conformis   shall acquire no right, title, or interest in or to any of the foregoing, or any other Intellectual Property rights that are owned or   controlled by Stryker, by implication, estoppel or otherwise.   (b) Stryker acknowledges and agrees that, as between the Parties, Conformis owns all right, title and interest, including all   Intellectual Property rights, in and to Conformis Background IP and Conformis' Confidential Information, including any Conformis   Confidential Information underlying the Joint IP, and that, under this Agreement, Stryker shall acquire no right, title, or interest in or   to any of the foregoing or any other Intellectual Property rights that are owned or controlled by Conformis, by implication, estoppel   or otherwise.   5.5 Employees and Consultants.   13   Source: CONFORMIS INC, 10-Q, 11/1/2019



(a) Conformis shall ensure that all its employees, consultants, Agents or other Third Parties who perform any portion of   Conformis' R&D Program obligations under this Agreement have entered into written agreements with Conformis whereby such   employee, consultant, Agent or other Third Party assigns to Conformis all ownership rights in any Inventions made or developed   by such employee, consultant, Agent or Third Party in the course of such R&D Program work under this Agreement.   (b) Stryker shall ensure that all its Affiliates and its or their employees, consultants, Agents or other Third Parties who perform any   portion of Stryker's R&D Program obligations under this Agreement have entered into written agreements with Stryker whereby   such employee, consultant, Agent or Third Party assigns to Stryker all ownership rights in any Inventions made or developed by   such employee, consultant, Agent or Third Party in the course of such R&D Program work under this Agreement.   5.6 Tangible Property.   (a) All tooling, patterns, dies, gauges, jobs, fixtures, and all specifications, drawings, samples, designs, software, firmware,   programs, formulae, and other tangible items (Equipment) furnished by Stryker to Conformis in connection with this   Agreement: (i) shall only be used in the performance of the R&D Program; (ii) shall remain the property of Stryker; and (iii) shall   be disposed of or returned in good repair, normal wear and tear excepted, by Conformis to Stryker at Stryker's direction and   expense upon Stryker's request. Conformis assumes risk of loss and damage to said items while in its possession or under its   control, subject to normal wear and tear. Conformis shall notify Stryker promptly whenever any items of Stryker's tangible   property are in need of repair or replacement. Stryker shall endeavor to mark its property as property of Stryker for   14   Source: CONFORMIS INC, 10-Q, 11/1/2019



use only under this Agreement. Conformis waives any right it may have in law or equity to withhold Stryker's property.   (b) All Equipment furnished by Conformis to Stryker in connection with this Agreement: (i) shall only be used in the performance   of the R&D Program; (ii) shall remain the property of Conformis; and (iii) shall be disposed of or returned in good repair, normal   wear and tear excepted, by Stryker to Conformis at Conformis' direction and expense upon Conformis' request. Stryker assumes   risk of loss and damage to said items while in its possession or under its control, subject to normal wear and tear. Stryker shall   notify Conformis promptly whenever any items of Conformis' tangible property are in need of repair or replacement. Conformis   shall endeavor to mark its property as property of Conformis for use only under this Agreement. Stryker waives any right it may   have in law or equity to withhold Conformis' property.   5.7 Trademarks. Nothing in this Agreement shall confer to any Party any rights, whether by way of ownership, license or   right to use, in any of the Trademarks of any other Party. Conformis shall not use the Trademarks of Stryker without Stryker's   prior written consent and Stryker shall not use the Trademarks of Conformis without Conformis' prior written consent.   5.8 Prosecution of Patent Rights. Stryker shall be solely responsible, in its sole discretion, for preparing, filing,   prosecuting and maintaining Patents arising from all Improved Stryker Background IP. Stryker shall be solely responsible for costs   and expenses of preparing, filing, prosecuting and maintaining any such Patents. Stryker shall have the first right to prepare, file,   prosecute and maintain Patents or copyrights arising from any Joint IP that is not Improved Conformis Background IP (Stryker-   Prosecuted Joint IP Rights). Conformis shall have the first right to prepare, file, prosecute and maintain Patents or copyrights   arising from any Improved Conformis Background IP (Conformis-Prosecuted Joint IP Rights, and together with the Stryker-   Prosecuted Joint IP Rights, Joint IP Rights). With respect to Joint IP Rights, the non-prosecuting Party will have the right, but   not the obligation, to review and comment, and have the comments reasonably considered by the prosecuting Party, with regard to   the filing, prosecution,   15   Source: CONFORMIS INC, 10-Q, 11/1/2019



and maintenance of the Joint IP Rights. In this regard, the prosecuting Party agrees to provide reasonable time for the non-   prosecuting party to review and comment prior to any deadline associated with such Patent. Conformis and Stryker shall be   equally responsible for costs and expenses of preparing, filing, prosecuting and maintaining any such Joint IP Rights.   Notwithstanding the foregoing, in the event that the applicable Party decides not to file at all or not to file a continuing or other   application to maintain the viability of the U.S part of a family of patents to which an application belongs, or decides to abandon or   discontinue the prosecution or maintenance of any of the Joint IP Rights, such Party shall notify the other Party thereof, and such   other Party may elect to continue the prosecution (including non-provisional application and PCT entry) or maintenance of such   Joint IP Rights at its sole expense and in the name(s) of both Stryker and Conformis. The provisions of Sections 5.1(c) and 5.1(d)   and this Section 5.8 shall run with the Joint IP, and each party shall ensure that any assignee of its interest in the Joint IP expressly   assumes in writing such provisions. Any Party pursuing Patent applications in accordance with this Section 5.8 may disclose   Confidential Information in patent applications to the extent necessary to provide requisite support for claims therein, provided   however, the non-prosecuting Party will have the right, but not the obligation, to review and comment on the scope and content of   the proposed disclosure, including the proposed disclosure of Confidential Information, prior to submission of the first disclosure of   same in any such Patent applications, and have the comments reasonably considered by the prosecuting Party. In this regard, the   prosecuting Party agrees to provide reasonable time for the non-prosecuting party to review and comment prior to any such   submission associated with such Patent.   5.9 Infringement and Defense.   (a) Each Party may in its sole discretion enforce the Patents or other intellectual property rights it solely owns pursuant to   this Agreement, as well as to defend against any assertions of invalidity, unenforceability or ownership of such Patents.   (b) The Parties shall confer and consult with respect to disputes with Third Parties respecting the infringement, validity,   enforceability or ownership of any Joint IP, including the settlement thereof. Such consultation shall be for the purpose of   determining the best approach within such actions and neither Party shall take any action to enforce or defend any Joint IP without   the other Party's prior written consent.   16   Source: CONFORMIS INC, 10-Q, 11/1/2019



5.10 Publicity. Neither Party shall issue any press release or otherwise publicize this Agreement or the development work   to be conducted hereunder, except in accordance with Section 4.2 of the APA.   ARTICLE VI   REPRESENTATIONS AND WARRANTIES   6.1 Representations, Warranties and Covenants. Each Party hereby represents and warrants to, and covenants with,   each other Party that:   (a) Due Organization. Good Standing and Power. It is a corporation duly organized, validly existing and in good standing under   the laws of its jurisdiction of organization and has the power and authority to own, lease and operate its assets and to conduct the   business now being conducted by it. It has all requisite corporate power and authority to enter into this Agreement and to perform   its obligations hereunder.   (b) Authorization and Validity of Agreement. The execution, delivery and performance by it of this Agreement and the   consummation by it of the transactions contemplated hereby have been duly authorized and approved by all necessary corporate   or equivalent action on its part. This Agreement has been duly executed and delivered by it and constitutes its legal, valid and   binding obligation, enforceable against it in accordance with its terms, except as the same may be limited by applicable   bankruptcy, insolvency, reorganization, moratorium or other Applicable Laws relating to or affecting creditors' rights generally and   by general equity principles.   (c) Absence of Conflicts. The execution, delivery and performance by it of this Agreement and the consummation by it of the   transactions contemplated hereby do not and will not:   (i) violate any Applicable Laws, regulations, orders, writs, injunctions or decrees of any governmental, judicial, legislative,   executive, administrative or regulatory   17   Source: CONFORMIS INC, 10-Q, 11/1/2019



authority of the United States or any foreign country or of any state or local governmental authority;   (ii) conflict with, or result in the breach of any provision of, its certificate or articles of incorporation, bylaws or equivalent   organizational documents;   (iii) result in the creation of any lien or encumbrance of any nature upon any property being transferred or licensed by it   pursuant to this Agreement; or   (iv) violate, conflict with, result in the breach or termination of or constitute a default under (or event which with notice, lapse of   time or both would constitute a default under), any permit, contract or agreement to which it is a Party or by which any of its   properties or businesses are bound.   (d) Consents. No authorization, consent or approval of, or notice to or filing with, any governmental authority is required for the   execution, delivery and performance by it of this Agreement, other than those associated with obtaining required regulatory   approvals as contemplated hereby.   (e) Employee and Consultant Obligations. Each of its employees, consultants and Agents who will engage in activities on behalf of   a Party under the R&D Work Plan, or who will have access to Confidential Information, is contractually obligated, or will be   contractually obligated prior to his/her participation or access, to (i) assign to the Party all Intellectual Property rights conceived,   made or discovered by such employee or Agent, whether solely or in collaboration with others, in connection with such   employee's, consultant's or Agent's work for the Party, and (ii) maintain the confidentiality of the Confidential Information. To the   extent applicable, it is the intent of the Parties that ownership of all developments under this Agreement shall vest in the respective   Party by operation of law or by assignment prior to assignment to the other Party pursuant to Article V.   18   Source: CONFORMIS INC, 10-Q, 11/1/2019



(f) Debarment. No employee, consultant or Agent who will engage in activities on behalf of such Party under the R&D   Work Plan, or who will have access to Confidential Information of the other Party, has been the subject of a debarment proceeding   under 21 U.S.C. § 335a, and has been excluded from participation in any Federal or State or other government health care   program.   6.2 EXCEPT AS EXPRESSLY PROVIDED ELSEWHERE IN THIS AGREEMENT, INCLUDING THE   REQUIREMENTS IN THE R&D WORK PLAN, CONFORMIS MAKES NO WARRANTY WITH RESPECT TO THE   SERVICES OR DELIVERABLES FURNISHED HEREUNDER, AND NO WARRANTIES OF ANY KIND, WHETHER   WRITTEN, ORAL, IMPLIED OR STATUTORY, INCLUDING WARRANTIES OF MERCHANTABILITY, NON-   INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE, SHALL APPLY.   ARTICLE VII LIMITATION ON LIABILITY AND INDEMNIFICATION   7.1 Responsibility and Control. Each Party shall be solely responsible for the safety of its own employees, Agents and   subcontractors with respect to their activities related to this Agreement.   7.2 Limitation of Liability. EXCEPT FOR [**], IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE   OTHER PARTY FOR [**], EVEN IF SUCH PARTY WAS ADVISED OR AWARE OF THE POSSIBILITY OF SUCH   DAMAGES. CONFORMIS' LIABILITY ON A PER OCCURRENCE BASIS UNDER SECTION 7.3(A)(IV) SHALL NOT   EXCEED THE GREATER OF (I) $[**] AND (II) THE AMOUNT OF INSURANCE COVERAGE ACTUALLY PAID TO   CONFORMIS UNDER THEN-CURRENT INSURANCE POLICIES OF CONFORMIS IN RESPECT OF SUCH   DAMAGES. For the purposes of this Section 7.2, per occurrence means the occurrence of any claim or series of claims   directly arising out of or resulting from the same act, omission or event.   7.3 Mutual Indemnification.   (a) Indemnification by Conformis. Conformis shall indemnify and hold harmless Stryker, its directors, officers, employees, Agents   and Affiliates and   19   Source: CONFORMIS INC, 10-Q, 11/1/2019



their respective successors, heirs and assigns (collectively the Stryker Indemnified Parties) against any and all claims, suits,   actions, and demands, wherever brought and however denominated, brought by a Third Party (all of the foregoing being referred   to herein as Claims) against the Stryker Indemnified Party including all damages, collateral damages and settlements arising   therefrom and reasonable outside attorneys' fees and litigation expenses related thereto, to the extent arising from or related to (i)   any breach of Conformis' representations, warranties or obligations under this Agreement, (ii) any alleged violation of any   Applicable Laws by Conformis, (iii) the negligence (excluding any product liability Claim), gross negligence or intentionally   wrongful acts or omissions of Conformis, its employees, consultants, Agents and Affiliates in their performance hereunder, and (iv)   any portion of a Claim alleging personal injury on account of product liability attributable to a Deliverable (including a Deliverable   within a Product or a Stryker Product). Conformis shall have no obligation or liability with respect to any Claim under Section   7.3(a)(iii) or Section 7.3(a)(iv) to the extent directly arising out of or relating to: (1) any use of the Products in any manner not in   accordance with applicable documentation (e.g., instructions for use, package inserts, labels, surgical guides and other materials   provided by or approved by Conformis) that is not a result of Conformis' conduct; (2) damage to the Products occurring after   shipment that is not a result of Conformis' conduct; or (3) any modifications to the Products that are not contemplated by the   instructions for use thereto by any Person other than Supplier and that is not a result of Conformis' conduct. Notwithstanding   anything to the contrary, Stryker's sole remedy and Conformis' exclusive liability for breach of Section 3.2 with respect to a   Product or a Stryker Product shall be as set forth in Section 10.1(i) of the Distribution Agreement.   (b) Indemnification by Stryker. Stryker shall indemnify and hold harmless Conformis, its directors, officers, employees, Agents   and   20   Source: CONFORMIS INC, 10-Q, 11/1/2019



Affiliates and their respective successors, heirs and assigns (collectively the Conformis Indemnified Parties) against any and   all Claims against the Conformis Indemnified Parties to the extent arising from or related to (i) any breach of Stryker's   representations or warranties under this Agreement, (ii) any alleged violation of any Applicable Laws by Stryker, and (iii) the   grossly negligent or intentionally wrongful acts or omissions of Stryker, its employees, consultants, Agents and Affiliates in their   performance hereunder.   (c) Joint Liability. To the extent that Stryker, on the one hand, and Conformis, on the other hand, each has indemnification   obligations to the other in connection with a single Claim, they will contribute to the aggregate damages, liabilities, costs and   expenses arising from such Claim in a proportion reflecting the relative and comparative responsibilities and determined liability of   the Parties for such damages, liabilities, costs and expenses, as well as any other relevant equitable considerations. The amount   paid or payable by a Party for purposes: of apportioning the aggregate damages, liabilities, costs and expenses shall be deemed to   include all reasonable legal fees and expenses incurred by such Party in connection with investigating, preparing for or defending   against such Claim.   (d) Indemnification Procedures. Claims for indemnification under this Agreement shall be governed by the indemnification   procedures set forth in Section 5.5 of the Asset Purchase Agreement.   (e) Settlement. If the indemnifying Party assumes the defense of a Claim, no compromise or settlement of such claims may be   effected by the indemnifying Party without the indemnified Party consent unless: (a) there is no finding or admission of any violation   of Applicable Requirements or any violation of the rights of any Person by the indemnified Party and no effect on any other claims   that may be made against the indemnified Party, (b) the sole relief provided is   21   Source: CONFORMIS INC, 10-Q, 11/1/2019



monetary damages that are paid in full by the indemnifying Party and (c) such settlement includes as an unconditional release of   liability by such Third Party claimant in respect of all Indemnified Persons.   ARTICLE VIII   TERM AND TERMINATION   8.1 Term. The term of this Agreement shall begin as of the Effective Date and continue until Acceptance of all Deliverables   for Milestones #1 and #2 pursuant to Section 3.4 and completion of Milestone #3, unless earlier terminated under Section 8.2, as   provided for under the Other Agreements, or as mutually agreed by the Parties.   8.2 Termination.   (a) Dissolution or Insolvency Event. Either Party may terminate this Agreement effective immediately upon delivery of a   Termination Notice if the other Party is (A) dissolved or is seeking to dissolve itself under applicable corporate law other than as   part of a corporate restructuring under which its assets were first transferred to an assignee under this Agreement in accordance   with Section 10.2; or (B) (i) becomes subject to an Insolvency Event, provided that, no termination right shall exist in respect of an   Insolvency Event that is a chapter 11 case under the Bankruptcy Code if the Party subject to such chapter 11 case (x) continues   to perform all of its material obligations under this Agreement, (y) does not seek to reject this Agreement or take any action in   such chapter 11 case to disavow or undermine the rights of the other Party under this Agreement, and (z) assumes this Agreement   on or before any deadline in such chapter 11 case for such assumption; notwithstanding the foregoing, nothing herein shall limit or   prevent the Party not subject to an Insolvency Event from objecting to assumption or assumption and assignment of this   Agreement or requiring cure payments or adequate assurance   22   Source: CONFORMIS INC, 10-Q, 11/1/2019



of future performance as a condition of assumption or assumption and assignment.   (b) Default. If any Party believes the other is in material breach of any of its material obligations under this Agreement in a   manner other than as set forth in Article III to which this Section 8.2(b) does not apply, it may give notice of such material breach   to the allegedly breaching Party, which Party shall have [**] (or such longer period of time as may be reasonably commensurate   with the effort reasonably required to remedy such default) in which to remedy such default. If such alleged material breach is not   remedied in the time period set forth above, the Party alleging material breach shall refer the matter to the chief executive officers   of each Party, who shall meet and confer within [**] after notice from the non-breaching Party of its desire for such a meeting. If   the Parties are unable to resolve any dispute in such meeting and no Action has been brought in accordance with Section 10.8   with respect to such dispute, the non-breaching Party may terminate this Agreement immediately upon delivery to the defaulting   Party of a Termination Notice. The non-defaulting Party's right to terminate this Agreement in accordance with this Section 8.2(b)   shall not be construed as an exclusive remedy.   (c) If Stryker Finally Rejects any Deliverable for Milestone #1 or #2 in accordance with Article III, Stryker may terminate   this Agreement, which termination shall be effective immediately upon delivery of a Termination Notice to Conformis.   8.3 Surviving Rights/Obligations.   (a) The provisions of Articles V, VI, VII and IX and Sections 8.3, 8.4, 10.1, 10.2, 10.5 - 10.13 and 10.15, together with   any provisions required for the interpretation or enforcement of any of the foregoing, shall survive the termination or expiration of   this Agreement, provided, however that Section 7.3(a)(iv) shall survive the termination or expiration of this Agreement for only   [**] thereafter. The termination of this Agreement shall not relieve any Party from obligations that are expressly indicated to survive   termination of the Agreement.   23   Source: CONFORMIS INC, 10-Q, 11/1/2019



8.4 Return or Destruction of Confidential Information. Solely with respect to Confidential Information in which a   Party has no ownership interest at all, owned or co-owned Confidential Information being exempt herefrom, upon termination of   this Agreement, unless independently authorized to retain such of the Disclosing Party's Confidential Information under an Other   Agreement, each Receiving Party shall, and shall direct its Representatives to, cease all use and make no further use of any   Confidential Information of the Disclosing Party and shall, upon written request from the Disclosing Party, promptly return or   destroy all Confidential Information of the Disclosing Party (including copies thereof) that is in tangible form (provided, however,   that, with respect to electronic imaging of the Disclosing Party's Confidential Information, such materials shall be deleted and   removed from access by an ordinary user from all computer hard drives, servers and similar media but shall not require any action   to delete or erase such materials from any disaster recovery tapes or other back-up media or any record retention or computer   storage system so long as the Receiving Party and its Representatives take such actions as are reasonably likely to prevent access   to such materials by any person other than information technology and other administrative employees who are responsible for   maintaining those disaster recovery tapes and other back-up media) and any documents created by the Receiving Party or any of   its Representatives containing Confidential Information of the Disclosing Party. The Receiving Party shall provide to the Disclosing   Party written certification of destroyed Confidential Information of the Disclosing Party promptly following the destruction thereof.   Notwithstanding the foregoing, the Receiving Party and its Representatives may retain one copy of any Confidential Information of   the Disclosing Party in a secure location in the Receiving Party's legal department for the purpose of establishing compliance with   Applicable Laws (including professional standards) and for defending or maintaining any litigation (including any administrative   proceeding) relating to this Agreement, the Other Agreement, the Prior CDA or the Confidential Information, provided that all such   information shall continue to be kept confidential pursuant to the terms of this Agreement.   24   Source: CONFORMIS INC, 10-Q, 11/1/2019



ARTICLE IX   RECORD-KEEPING AND AUDITS   9.1 Records Retention. Each of the Parties shall record in written or electronic form all material information with respect   to the performance of its obligations relating to the R&D Program in accordance with standard industry practices.   ARTICLE X   MISCELLANEOUS   10.1 Agency. Neither this Agreement nor any of the Other Agreements creates any partnership, agency or other   relationship among the Parties for any purpose, including for all tax purposes. No Party is granted any right or authority to assume   or to create any obligation or responsibility on behalf or in the name of the other Party or to bind the other Party in any manner   whatsoever.   10.2 Assignment and Change of Control. Except as otherwise provided herein, a Party shall not have the right to   assign any of its rights or obligations under this Agreement (whether through a merger, sale of stock, or otherwise) without the   prior written consent of the other Party; except that, either Party shall be permitted, without any need for the other Party's   consent, to assign this Agreement (a) in whole or in part to an Affiliate (provided, however, that once such Person is no longer an   Affiliate of the assigning Party, such former Affiliate shall assign this Agreement back to the assigning Party), provided that the   assigning Party provides the other Party notice of any such assignment provided further that failure to provide such notice of such   assignment shall not render such assignment void; or (b) to a Third Party in connection with sale or transfer of all or substantially all   of the assigning Party's business or assets relating to the subject matter of this Agreement, whether by Change of Control, merger,   sale of assets or otherwise; provided, however, that, with respect to clause (b), (i) any assignment of this Agreement shall be void   and have no effect unless and until the assignee assumes the   25   Source: CONFORMIS INC, 10-Q, 11/1/2019



obligations of the assigning Party in a written instrument, a copy of which is provided to the other Party; and (ii) any assignment of   this Agreement must be accompanied by a simultaneous assignment of the Other Agreements to the same assignee, and the   assigning Party's interest in the Purchased Assets to the same assignee unless otherwise agreed by Conformis in advance, which   agreement shall not be unreasonably withheld. Any assignment in whole or in part shall not relieve the assigning Party of its   obligations hereunder. If and to the extent that a Party assigns any of its rights and/or obligations hereunder in accordance with this   Section 10.2, then this Agreement shall be binding upon the assignee to the same extent as if it were a Party hereto. Any   assignment not in accordance with this Section 10.2 shall be void.   10.3 Further Actions. Each Party agrees, subsequent to the execution and delivery of this Agreement and without any   additional consideration, to execute, acknowledge and deliver such further documents and instruments, and to do all such other   acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.   10.4 Force Majeure.   (a) In the event that either Party is unable to perform any of its obligations under this Agreement, or to enjoy any of its   benefits because of fire, natural disaster, action or decrees of Governmental Entities or any other event not within such Party's   reasonable control (a Force Majeure Event), the Party who has been so affected shall give written notice to the other Party as   soon as practicable and shall do everything reasonably possible to resume performance. Upon receipt of such notice, all   obligations under the Agreement shall be immediately suspended. If the period of nonperformance exceeds [**] from the receipt   of notice of the Force Majeure Event, the Party whose ability to perform has not been so affected may, by giving written notice,   terminate the Agreement. Any acceptance or warranty period affected by a Force Majeure Event shall likewise be extended for a   period equal to the duration of such Force Majeure Event. As applied to this Section 10.4   26   Source: CONFORMIS INC, 10-Q, 11/1/2019



and to determine whether an event is reasonably beyond control of a Party, materials shortages, strikes, slowdowns, other labor   related delays or events resulting from a Party's, its Affiliates or their respective agents' negligence, gross negligence, fraud or   intentional misconduct are not Force Majeure Events.   (b) Notwithstanding the provisions set forth in Section 10.4(a), above, a Force Majeure Event shall not include any   governmental action of an enforcement nature that arises from or relates to either Party's failure to comply with any federal,   national, state, provincial, international, or local law, statute, regulation or ordinance applicable to such Party's performance   hereunder.   10.5 Notices. All notices, requests, demands, waivers, instructions, consents and other communications to be given   pursuant to the terms of this Agreement will be in writing and will be deemed to have been duly given upon receipt if delivered by   hand, sent by a nationally recognized overnight mail service, or mailed by registered or certified mail, return receipt requested,   postage prepaid:   If to Stryker, addressed to:   Howmedica Osteonics Corp. c/o Stryker Corporation Attn: Legal Department, [**] 325 Corporate Drive Mahwah, NJ 07430   If to Conformis, addressed to:   Conformis, Inc. Attn: Chief Executive Officer and General Counsel 600 Technology Park Drive Billerica, MA 01821   With a copy (which shall not constitute notice) to:   27   Source: CONFORMIS INC, 10-Q, 11/1/2019



WilmerHale Attn: Jason Kropp, Esq. 60 State Street Boston, MA 02109   Any Party may change its address, telephone number, or facsimile number by prior written notice to the other Party.   10.6 Amendments and Waivers. This Agreement may not be modified or amended except by an instrument or   instruments in writing signed by the Party against whom enforcement of any such modification or amendment is sought. Conformis   may waive compliance by Stryker or Stryker may waive compliance by Conformis with any term or provision of this Agreement   on the part of such Party to be performed or complied with, but only by an instrument in writing. The waiver by any Party of a   breach of any term or provision of this Agreement will not be construed as a waiver of any subsequent breach.   10.7 Governing Law. This Agreement shall be governed and construed in accordance with the laws of New York State   (without regard to the conflict of laws provisions thereof).   10.8 Jurisdiction. Subject to Section 10.14, the federal and state Courts of New York State shall have exclusive   jurisdiction to hear and decide any suit, Action or proceedings, and to settle any disputes, which may arise out of or in connection   with this Agreement; provided, however, that each Party shall have the right to institute judicial proceedings in any court of   competent jurisdiction against the other Party or anyone acting by, through or under the other Party, in order to enforce an Order   entered by federal state courts of New York. Each Party shall cause its applicable permitted Third Party sublicensees and   Affiliates receiving any rights or benefits (including the receipt of any Confidential Information) under this Agreement to be bound   by this Section 10.8 prior to their exercise of any such rights or receipt of any such benefits. If such Party fails to comply with the   foregoing sentence   28   Source: CONFORMIS INC, 10-Q, 11/1/2019



with respect to any such Third Party or Affiliate, the other Party shall have the right to seek relief in any court of competent   jurisdiction in connection with any dispute involving such Third Party or Affiliate.   10.9 Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of   any provision shall not affect the validity or enforceability of the other provisions hereof. If any term or other provision of this   Agreement, or the application thereof to any Person or any circumstance, is invalid, illegal or unenforceable by a Court of   competent jurisdiction, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be   valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement   and the application of such provision to other Persons or circumstances shall not be affected by such invalidity, illegality or   unenforceability, nor shall such invalidity, illegality or unenforceability affect the validity or enforceability of such provision, or the   application thereof, in any other jurisdiction.   10.10 Entire Agreement and Third-Party Beneficiaries. This Agreement (including the Other Agreements) contains   the entire agreement by and among the Parties with respect to the subject matter hereof and there are no agreements,   understandings, representations or warranties between the Parties other than those set forth or referred to herein. This Agreement   is not intended to confer upon any Person not a party (or their successors and assigns permitted by Section 10.2), and to the   extent expressly provided, their Affiliates, Agents, employees and representatives, any rights or remedies hereunder, except that   Section 7.3(a) and Section 7.3(b) hereof are intended to benefit, and to be enforceable by, any of the Relevant Indemnified   Parties therein described.   10.11 Jointly Prepared. This Agreement has been prepared jointly and shall not be strictly construed against any Party.   29   Source: CONFORMIS INC, 10-Q, 11/1/2019



10.12 Expenses. Except as otherwise set forth in this Agreement and the Other Agreements, all legal and other costs and   expenses incurred in connection with this Agreement and the transactions contemplated hereby will be paid by the Party incurring   such costs and expenses.   10.13 Counterparts and Electronic Transmission. This Agreement may be executed in one or more counterparts, all   of which will be considered one and the same agreement, and will become effective when one or more counterparts have been   signed by each of the Parties and delivered to the other Party. This Agreement may be executed and delivered by facsimile or e-   mail transmission with the same effect as if a manually signed original was personally delivered.   10.14 Negotiation in Event of Dispute. In the event of any dispute or disagreement between any of the Parties as to   the interpretation of any provision of this Agreement or any agreement incorporated herein, the performance of obligations   hereunder or thereunder, or any other disputed matter relating hereto or thereto, such matter, upon the written request of any   Party, will be referred to an executive of each Party. Such executives will promptly meet in good faith to resolve the dispute. If the   executives do not agree upon a decision within thirty calendar days after the reference of the matter to them, any Party will be free   to exercise any remedies available to it.   10.15 Rules of Construction. As used in this Agreement, the words include, includes and including means   including without limitation, and no inferences or conclusions of any sort shall be drawn from the fact that in some instances in   this Agreement the words include, includes and including are actually followed by the phrase without limitation or the   equivalent while in other instances they are not. Except where the context expressly requires otherwise, the use of any gender   herein will be deemed to encompass references to any gender, and the use of the singular will be deemed to include the plural (and   vice versa).   30   Source: CONFORMIS INC, 10-Q, 11/1/2019



[Signature Page Follows]   31   Source: CONFORMIS INC, 10-Q, 11/1/2019



IN WITNESS WHEREOF, the parties have caused this Development Agreement to be duly executed as of the respective   dates written below.   HOWMEDICA OSTEONICS CORP. CONFORMIS, INC.   By: /s/ Spencer Stiles By: /s/ Mark A. Augusti Name: Spencer Stiles Name: Mark A. Augusti Title: President Title: President and CEO Date: September 26, 2019 Date: 9-30-2019   [Signature Page to Development Agreement]   Source: CONFORMIS INC, 10-Q, 11/1/2019



Execution Version Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) would likely cause competitive harm to the Company, if publicly disclosed. Double asterisks denote omissions.   Source: CONFORMIS INC, 10-Q, 11/1/2019 
Question: Highlight the parts (if any) of this contract related to Cap On Liability that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery.

SOLUTION: 38669

PROBLEM: Exhibit 10.13   TRANSPORTATION AGREEMENT   BETWEEN   ENERGY XXI GULF COAST, INC.   AND   ENERGY XXI USA, INC.   DATED EFFECTIVE AS OF   March 11, 2015









  TRANSPORTATION AGREEMENT   TABLE OF CONTENTS   ARTICLE 1 DEFINITIONS AND INTERPRETATION 1     ARTICLE 2 NOMINATIONS AND TRANSPORTATION 3     ARTICLE 3 RATES AND CHARGES 4     ARTICLE 4 QUALITY AND PRESSURE SPECIFICATIONS 5     ARTICLE 5 OFFSHORE PLATFORM FACILITIES AND OPERATING PROCEDURES 6     ARTICLE 6 GRAVITY BANK 8     ARTICLE 7 MEASUREMENT AND TESTING 9     ARTICLE 8 TERM 11     ARTICLE 9 TITLE AND CUSTODY 11     ARTICLE 10 BILLING AND PAYMENT 11     ARTICLE 11 REMEDIES 12     ARTICLE 12 FORCE MAJEURE 13     ARTICLE 13 INDEMNIFICATION 14     ARTICLE 14 NOTICES 14     ARTICLE 15 ASSIGNMENT 15     ARTICLE 16 MISCELLANEOUS 15

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  TRANSPORTATION AGREEMENT   This Transportation Agreement (the Agreement), dated as of March 11, 2015 (the Effective Date), is by and between ENERGY XXI GULF COAST, INC., a Delaware corporation (Shipper), and  ENERGY XXI USA, INC., a Delaware corporation  (Transporter). Shipper and Transporter may be referred to herein individually as a Party or collectively as the Parties.   WITNESSETH:   WHEREAS, Shipper desires to contract with Transporter for transportation service on Transporter's Gathering System;   WHEREAS, Transporter is willing to transport Shipper's Crude Petroleum on the Gathering System for the compensation and subject to the terms and conditions set forth below;   NOW, THEREFORE, in consideration of the mutual agreements, covenants and conditions herein contained, Transporter and Shipper hereby agree as follows:   ARTICLE 1 DEFINITIONS AND INTERPRETATION   1.1 Definitions. In addition to terms defined elsewhere in this Agreement and in Annex I hereto, the following definitions shall apply hereunder:   Agreement shall have the definition set forth in the preamble of this Agreement.   A.P.I. shall mean the American Petroleum Institute.   Barrel or Bbl shall mean forty-two (42) United States gallons at a temperature of sixty degrees (60°) Fahrenheit.   BS&W shall mean the basic sediment, water or other impurities found in a stream of Crude Petroleum.   Claiming Party shall have the meaning set forth in the definition of Force Majeure below.   Crude Petroleum shall mean the direct liquid products of oil wells, indirect petroleum products resulting either from distillate recovery equipment in gas and distillate fields, or a mixture of the direct product and indirect petroleum products.   Delivery Point shall mean the point(s) of interconnection between the Gathering System and one or more oil pipelines downstream of the Gathering System where Transporter delivers Crude Petroleum to Shipper. The initial Delivery Point shall be located at Grand Isle.

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  Downstream Pipelines shall mean any pipeline or other receiving facility downstream of the Delivery Point.   Effective Date shall have the definition set forth in the preamble of this Agreement.   Force Majeure shall mean an event which is not within the reasonable control of the Party claiming suspension (the Claiming Party), and which by the exercise of due diligence the Claiming Party is unable to overcome in a commercially reasonable manner. Force Majeure includes, to the extent such event satisfies the requirements of the preceding sentence: acts of God; wars (declared or undeclared); insurrections; hostilities; strikes; lockouts; riots; floods; fires; storms; storm warnings; named or numbered tropical disturbances and evacuations associated with the threat of the same; industrial disturbances; acts of the public enemy; sabotage; blockades; epidemics; landslides; lightning; earthquakes; washouts; arrests and restraints of rulers and peoples; civil disturbances; explosions; breakage or accidents to machinery or lines of pipe; hydrate obstruction or blockages of any kind of lines of pipe; adverse operating conditions on Shipper's facilities, Transporter's facilities, or the facilities of Downstream Pipelines; repairs, improvements, replacements or alterations to plants, lines of pipe or related facilities; inability of either Party to obtain necessary machinery, drilling or workover rigs, materials, permits, easements or rights-of-way on reasonable terms; freezing of delivery facility; and other events beyond the reasonable control of Shipper that affect production levels; action or restraint by court order or public or governmental authority (so long as the Claiming Party has not applied for or assisted in the application for, and has opposed where and to the extent reasonable, such government action); provided, however, that none of the loss of Shipper's or its Affiliates' markets, Shipper's or its Affiliates' inability to obtain adequate capacity (other than for reasons of force majeure affecting a Downstream Pipeline), nor Shipper's or its Affiliates' inability economically to use or resell Crude Petroleum transported hereunder shall constitute an event of Force Majeure. A force majeure event that occurs respecting one or more Downstream Pipelines for which there are no reasonable alternatives for a Claiming Party to utilize in order to meet its duties and obligations under this Agreement, regardless of whether such Downstream Pipeline declared such force majeure event, shall constitute Force Majeure for purposes of this Agreement, subject to the requirement of the first sentence of this definition. The failure of a Claiming Party to settle or prevent a strike or other labor dispute with employees shall not be considered to be a matter within such Claiming Party's control.   Gathering System shall mean Transporter's Grand Isle Gathering System.   Month shall mean a period of time beginning at 7:00 a.m. Central Clock Time on the first day of a calendar month and ending at 7:00 a.m. Central Clock Time on the first day of the next succeeding calendar month.   Psig shall mean pounds per square inch gauge.   Receipt Point shall mean the point(s) of interconnection between the Gathering System and one or more oil pipelines or other interconnecting facilities located upstream of the Gathering System where Shipper delivers Crude Petroleum to Transporter. The initial Receipt Points are identified on Exhibit A.

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  Shipper shall have the definition set forth in the preamble of this Agreement.   Transporter shall have the definition set forth in the preamble of this Agreement.   1.2 Other Terms. Other capitalized terms used in this Agreement and not defined in Section 1.1 above shall have the meanings ascribed to them throughout this Agreement.   ARTICLE 2 NOMINATIONS, SCHEDULING AND TRANSPORTATION   2.1 Nomination.   (a)  Applications for the transportation of Crude Petroleum shall be submitted in writing on Transporter's prescribed nomination of shipment form.   (b) Shipper desiring to nominate Crude Petroleum for transportation shall make such nomination to Carrier in writing on or before the twenty-fifth day of the month preceding the month during which the transportation under the nomination is to begin; except that, if space is available for current movement, a Shipper may nominate Crude Petroleum for transportation after the twenty-fifth day of the month preceding the month during which the transportation under the nomination is to begin.   2.2 Capacity Allocation.   (a) When pursuant to nominations hereunder, there shall be offered to Transporter more Crude Petroleum than can be immediately gathered and/or transported, the gathering and/or transportation shall be apportioned among all Shippers by Transporter on a just and reasonable basis.   2.3 Transportation.   (a) Subject to the provisions of this Agreement and all applicable Laws, Transporter shall accept and transport Shipper's Crude Petroleum and redeliver the quantity of Crude Petroleum received by Transporter, less applicable Losses as set forth in Section 7.3, at the Delivery Point. Transporter shall be under no obligation to deliver the identical Crude Petroleum received, and reserves the right to make delivery out of its common stock.   2.4 Transporter's Right to Shutdown Operations.   (a) Transporter shall have absolute discretion and authority to partially or totally shutdown any and all operations and activities (and temporarily or permanently discontinue the services) contemplated hereunder at any time, if in Transporter's sole discretion, such shutdown is warranted to (i) ensure the safety of persons, property, or the environment; (ii) ensure the operational integrity of the Gathering System; or (iii) modify, inspect, maintain or repair the Gathering System. Transporter shall notify Shipper in writing in the event of any of the occurrences listed above. In such cases, Transporter shall not have any liability to Shipper for such shutdowns.

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  (b) In the event interruption of service is required, Transporter's dispatcher will advise Shipper of an interruption as soon as practicable.   (c)  Nothing contained herein shall preclude Transporter from taking reasonable action(s) necessary to adjust receipts or deliveries hereunder in order to maintain the operational integrity of the Gathering System.   2.5 Line Fill and Tank Bottom Inventory.   (a) Either prior to or after the acceptance of Crude Petroleum for transportation, Transporter will, upon reasonable notice, require Shipper to provide a pro rata part of the volume of Crude Petroleum necessary for pipeline fill, unavailable stocks below tank connections, and reasonable additional minimum quantities required for efficient operation or to safeguard Transporter's tankage during passage of a tropical storm or hurricane. Crude Petroleum provided by Shipper for this purpose may be withdrawn after reasonable written notice of Shipper's intention to discontinue shipment in the Gathering System. Transporter may require advance payment of final transportation charges and settlement of any unpaid accounts receivable before final delivery will be made.   (b) In the event Shipper's inventory balance drops below its pro rata part of the volume of Crude Petroleum necessary for pipeline fill, unavailable stocks below tank connections, and reasonable additional minimum quantities required for the efficient operation of the system, then Transporter will require Shipper to provide the necessary volume to meet its pro rata part of such volume of Crude Petroleum.   (c) In the event that Shipper maintains an inventory balance after Shipper ceases movements on the Gathering System or Shipper gives written notice of its intent to cease movements over the system and Shipper is unable to schedule appropriate shipments to clear the inactive inventory balance, Shipper will be required to settle the inactive inventory balance through Transporter. In the event no such Shipper notice is given, then Transporter may require either an adjustment in Shipper's inventory balance or settlement of Shipper's inventory balance at any time after Shipper has ceased making movements under this Agreement for a period of six months. Such settlement will be based upon the fair market value of the Crude Petroleum, as published by Platts, at the time Shipper provides written notice of termination of this Agreement or if no such written notice is given, then at such time as Transporter calls for the settlement of the Shipper's inventory balance.   ARTICLE 3 RATES AND CHARGES   3.1 Transportation Charges. Crude Petroleum accepted for transportation by Transporter shall be subject to the transportation rates set forth on Exhibit A plus any other applicable charges specified in this Article 3.

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  ARTICLE 4 QUALITY AND PRESSURE SPECIFICATIONS   4.1 Quality Specifications. Transporter reserves the right to reject any and all shipments of: (i) Crude Petroleum delivered by Shipper to Transporter whose gravity, viscosity, and/or other characteristics are such that it is not readily susceptible to transportation through the Transporter's existing facilities and it will damage the quality of other shipments or cause disadvantage to other shippers and/or the Transporter; (ii) Crude Petroleum containing water, sediment and other impurities totaling in excess of one per cent as determined by centrifugal test, or by such other tests as may be agreed upon by the Shipper and Transporter; or (iii) Crude Petroleum where Shipper has failed to comply with all applicable laws, rules, and regulations made by any governmental authorities regarding shipment of Crude Petroleum.   4.2 Contaminants. Transporter has the right, at its discretion, to reject crude oil containing contaminants. If Transporter determines that a Shipper has delivered to Transporter's facilities Crude Petroleum that has been contaminated by the existence of and or excess amounts of impure substances, including but not limited to chlorinated and/or oxygenated hydrocarbons, arsenic, lead and/or other metals which results in harm to other shippers, Downstream Pipelines, users of the contaminated Crude Petroleum or Transporter, such Shipper will be excluded from further entry into applicable segments of the pipeline system until such time as the quality of the Crude Petroleum is to the satisfaction of the Transporter. Transporter is not responsible for monitoring receipts or deliveries for contaminants. Further, Transporter reserves the right to dispose of any contaminated Crude Petroleum blocking its pipeline system. Disposal thereof may be made in any reasonable manner including but not limited to commercial sales, and any liability associated with the contamination or disposal of any Crude Petroleum shall be borne by the Shipper introducing the contaminated Crude Petroleum into Transporter's system. Shipper liability includes, but is not limited to, claims from other shippers, carriers, or users of the contaminated Crude Petroleum and the costs of any regulatory or judicial proceeding.   4.3  Periodic Samples. Transporter reserves the right to periodically sample and test the quality of the Crude Petroleum delivered by Shipper at any Receipt Point. Transporter shall be responsible for all costs attributable to such periodic sampling and testing. If at any time Shipper's Crude Petroleum triggers any of the rejection rights set forth in Section 4.1, Shipper shall pay for any tests performed thereafter to establish that such Crude Petroleum no longer triggers such provisions.   4.4 Pressure. The present maximum operating pressure at all reception points is 1440 psig. Shipper's injection pressure shall be maintained within this stated maximum limit and shall conform, as near as possible, to the hydraulic gradient. Transporter reserves the right to reduce the maximum operating pressure by written notice to Shipper. Shipper shall furnish, or cause the producer from which Crude Petroleum is purchased to furnish, install, calibrate, and maintain continuous pressure recording devices at or near injection points to monitor pipeline operating pressures. Copies of the recording charts taken from these recording devices shall be furnished to Transporter on a weekly basis by Shipper. Shipper shall also furnish Transporter copies of annual calibration certificates for recording devices. Transporter reserves the right to witness calibration of these devices, and Shipper shall notify Transporter at least 48 hours prior to the initiation of such calibration procedures. Circumstances may arise which in Transporter's judgment require the Gathering System, or any part thereof, be shut down. Following such shutdown periods, Shippers shall obtain authorization from Transporter prior to the resumption of injections.

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  4.5 Excess Water, Sediment and Other Impurities. If during any monthly accounting period, the weighted average of the BS&W on all meter tickets covering Crude Petroleum delivered to Transporter by Shipper reflects a water, sediment and other impurities content which exceeds 1%, Shipper shall pay to Transporter a handling charge as specified in the table in Exhibit A on such excess water, sediment, and other impurities to cover the treating, separation and other aspects of handling such excess water, sediment and other impurities delivered to Transporter. This explicitly excludes disposal. Transporter shall accept excess water for handling only when Shipper has made the necessary arrangements for disposal of such excess water. Shipper may dispose of its excess water by method acceptable to Transporter such as barging or trucking subject to a mutually agreed upon schedule for excess water removal by Shipper from Transporter's Grand Isle tankage. As an alternative, Shipper may request Transporter to dispose of Shipper's excess water by use of Transporter's onshore disposal wells. The fees for disposal are set forth in Exhibit A. In any event, Shipper must contact Transporter in advance at 713-351-3000 to schedule means by which BS&W will be disposed. Where no meter tickets are available or meter tickets are in Transporter's opinion unreliable, water, sediment and other impurities in the system in excess of that reported on acceptable meter tickets will be allocated in a fair and equitable manner by Transporter. Notwithstanding the fact that Transporter levies a handling charge covering excess water, sediment and other impurities content in a Crude Petroleum stream, Transporter reserves the right to reject any nomination of products other than Crude Petroleum which satisfies all quality standards, requirements and conditions set forth herein.   ARTICLE 5 OFFSHORE PLATFORM FACILITIES AND OPERATING PROCEDURES   5.1 Transporter or its authorized representative shall have access to the platform from which shipments are received for the purpose of examining and checking meters and other installations utilized in connection with the handling of Crude Petroleum injected into the pipeline.   5.2  Shipper, upon request by Transporter, shall install, maintain and operate, or make arrangements with platform owners to install, maintain, and operate equipment to inject corrosion inhibitors, biocides, scale inhibitors, paraffin chemicals, or other chemicals as specified by Transporter.   5.3 Shipper shall provide or arrange with platform operator to furnish, operate, and maintain such pumping equipment as is necessary to inject the Crude Petroleum nominated by Shipper for shipment or will cause same to be done. Pumping equipment shall be controlled and operated so that the hourly rate at which Crude Petroleum is injected during each month shall not exceed 120% of the average hourly volume nominated and accepted for shipment during the current calendar month. If piston pumps are used, surge absorbers shall be installed, upon reasonable request of Transporter, to minimize pulsation. Transporter reserves the right, upon written notification to all Shippers to further limit the variation of Shipper's injection rates, if in Transporter's judgment proration is imminent. Reasonable exceptions to variations of injection rates for Shippers with newly discovered, expended production, and unusual production difficulties will be allowed by Transporter.

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  5.4  Physical and legal transfer of custody of Crude Petroleum to Transporter shall be at points where producer's or other delivering parties' lines are connected to Transporter's existing facilities, however, measurement of quantities received for the account of Shipper at such points shall be determined by measurement facilities installed on the production platforms where the Crude Petroleum is produced or to which it is moved for delivery into Transporter's existing facility.   5.5 The Transporter shall have the right to require uniform measurement and sampling equipment/procedures at all installations so that custody transfer measurements are made on a uniform basis. Transporter reserves the right to require Shipper to install or cause platform owners to install in accordance with applicable API and ASTM (American Society for Testing Materials) standards metering and meter proving equipment capable of continuous custody measurement, and devices for continuous proportional to-flow sampling of the Crude Petroleum.   5.6 If Crude Petroleum to be delivered to Transporter is produced at some distance from the Transporter's facilities and Transporter does not elect to provide a connection directly to the production platform where it is produced, Shipper may furnish, or cause to be furnished, free of cost to Transporter, the connecting pipeline required to deliver such Shipper's Crude Petroleum to the location designated by Transporter. If such location is on another producer's platform, all arrangement for installing the connecting pipeline or other required equipment or facilities on such platform shall be the sole responsibility of the Shipper.   5.7 At Transporter's request, Shipper will allow, or cause the platform owner(s) to allow, Transporter to place, operate, repair and maintain riser piping, scraper traps, valves, surveillance equipment, and any other equipment deemed by Transporter to be needed for the safe and efficient operation of the Gathering System. In the event Transporter should decide to transmit meter readings or other data from the platform from which Shipper's Crude Petroleum is run, Shipper will allow, or cause the platform owner(s) to allow, reasonable access to and use of communication facilities which may be available at the platform.   5.8 Where meter readings are available Transporter will prepare, as near as practicable to 7:00 a.m. on the first day of each month, a monthly pipeline run ticket for Shipper showing opening and closing meter readings and water, sediment, other impurities percentage on the basis of which Crude Petroleum and water, sediment, and other impurities volumes will be determined. If for any reason Transporter's representative fails to reach any receipt point on the first day of the month, Shipper's own representative, with prior authorization from Transporter, will obtain and make a record for Transporter's representative of the closing meter reading and will withdraw the sample material from the sampling equipment. The sample material thus withdrawn will be sealed in a special container and retained by Shipper's representative for Transporter's representative who will, during his next trip to that receipt point, determine the water, sediment, and other impurities percentage of the sample material in the special container and prepare the monthly pipeline run ticket. Where no meter readings are available, Crude Petroleum including water, sediment and other impurities will be determined by Transporter from the best available data.

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  5.9 It is recognized that from time to time producers inject acid into well formations containing Crude Petroleum in an attempt to stimulate production and fluids subsequently produced from such wells may contain unspent acid which must be neutralized to a pH of 4.5 or greater before the fluids (with which acid is produced) are delivered to Transporter. If such total fluids (Crude Petroleum plus unspent acid) is not so neutralized, the Gathering System may have to be shut down which in turn will require all connected producers to shut in their wells. To assist Transporter to anticipate the need and to prepare for possible corrective actions which may be required to void or minimize operating difficulties caused by any unneutralized acid, Shippers shall furnish, or cause the producer from which Crude Petroleum is purchased to furnish to Transporter, the following information at least 24 hours in advance of start of production from any well which has been acidized: (i) estimated time of first production from acidized well; (ii) estimated time that first production from acidized well, which has been neutralized to a pH equal to or greater than 4.5, will be injected into the Gathering System; and (iii) estimated time that produced fluids from previously acidized wells, which has been neutralized to a pH equal to or greater than 4.5, will be free of neutralized acids. Shipper shall assume full responsibility for and reimburse Transporter for all extra costs and expenses incurred by Transporter as the result of any unspent and/or unneutralized acids being present in the Crude Petroleum delivered to Transporter by Shipper. Shipper will be billed for all such extra costs and expenses for shutting down, purging of such unspent acids, and subsequent resuming operation of the Transporter's Gathering System. Transporter shall not be liable to any Shipper for any damage sustained by Shipper(s) as the result of unspent and/or unneutralized acids being received from other Shipper(s).   5.10 In the event that Shipper does not operate the wells from which the Crude Petroleum nominated for shipment is produced or does not operate the treating, measurement, or pumping equipment through which such Crude Petroleum is handled prior to its delivery to Transporter, then Shipper shall designate the party or parties responsible for the operation of such facilities and shall authorize and direct such party or parties to (1) comply with all provisions of this Agreement related to their operations and (2) furnish to Transporter such reasonably requested operational, technical, administrative, and analytical data as Transporter deems necessary to account for volumes being delivered to Transporter and assure safe, lawful, and efficient operations.   ARTICLE 6 GRAVITY BANK   6.1 To assure that no shipper will be materially damaged or allowed to benefit by changes in gravity due to the intermixing of petroleum in the Gathering System, Shipper will be required, as a condition of tendering, to participate in a Gravity Bank. The table of gravity differential values per barrel as attached hereto as Exhibit B is incorporated herein and made a part of this Agreement.

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  6.2 Transporter shall administer the Gravity Bank providing adjustments for the value of crudes with different qualities in the manner specified below for both receipt and delivery volumes. Applicable barrels and gravities shall be the net barrels at 60 degrees Fahrenheit (with no deduction for Loss allowance) and the gravities recorded by the Operator at points where it customarily records gravities and quantities. The weighted average gravity differential value per barrel (for two or more gravities of petroleum), as hereinafter referred to, shall be obtained in the following manner: multiply the gravity differential values per barrel (from the attached table as same is from time to time revised) by the number of barrels to which such gravity differential values are applicable and then divide the total of the resultant gravity differential values in dollars and cents by the total of the applicable barrels.   6.3 Adjustments between shippers shall be computed as follows: (i) compute the weighted average gravity differential value per barrel of the barrels received from by each shipper and (ii) compute the weighted average gravity differential value per barrel of the composite common stream for receipts.   6.4 Calculation:   (a) If the weighted average gravity differential value per barrel of a shipper as so determined under Section 6.3(i) above shall be greater than the weighted average gravity differential value per barrel of the aforementioned common stream petroleum as determined under Section 6.3(ii), the difference in cents per barrel shall be calculated and shipper shall be credited (receives) an amount calculated by multiplying said difference in gravity differential value per barrel by the applicable barrels.   (b) If the weighted average gravity differential value per barrel of a shipper is less than the weighted average gravity differential value per barrel of the aforementioned common stream petroleum, the difference shall be calculated as above outlined and a shipper debited for such difference.   (c) A sample calculation is attached as Exhibit C.   6.5 These calculations shall be made for each calendar month and the algebraic sum of the adjustments for the system shall be zero +/- One Dollar. If a shipper shall have a net debit balance in combining the two adjustments made above, the balance shall be remitted to the clearinghouse within fifteen (15) days from receipt of statement of such debit. If Shipper shall have a credit, the clearinghouse shall remit the amount thereof after receipt by the clearinghouse of the sums from those shippers having debits as calculated above.   ARTICLE 7 MEASUREMENT AND TESTING   7.1 Crude Petroleum tendered to Transporter for transportation shall be measured and tested by a representative of Transporter prior to its receipt from Shipper. Shipper shall have the privilege of being present or represented at the measurement and testing. Quantities shall be measured by meters and calculated in accordance with applicable A.P.I. Manual of Petroleum Measurement Standards. All shipments of required specifications will be received and delivered as net standard volume, as the total volume excluding water, sediment and other impurities, corrected by the appropriate volume correction factor for the observed temperature and A.P.I. gravity, relative density, or density to a standard temperature of 60 degrees Fahrenheit and also corrected by the applicable pressure correction factor and meter factor. Where measurement and testing of shipments to determine water, sediment, and other impurities content is not performed, the Transporter shall determine the water, sediment, and other impurities content of shipments based on the best available data. Due to the complexity of the allocations of the non-metered receipt locations, any prior period volume adjustment of 500 barrels or less will be corrected by including the corrected prior Months' (positive or negative) volume in the current month allocation process. Any shipper request for volume or quality adjustments prior to the most previous twenty-four (24) Month time frame will not be considered.

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  7.2  Evidence of Receipts and Deliveries. Transporter shall account to Shipper for Crude Petroleum received and delivered. Crude Petroleum received from Shipper and Crude Petroleum delivered to Shipper shall, in each instance, be evidenced by tickets, showing opening and closing tank gauges or meter readings, as applicable, temperature, basic sediment and water, and any other data essential to the determination of quantity. Such tickets shall be jointly signed by representatives of Transporter and Shipper, and shall constitute full receipt for (a) the Crude Petroleum received and (b) the Crude Petroleum delivered. Where meter tickets are not available or in Transporter's opinion are unreliable, Transporter shall use the best available data to determine the quantity of Crude Petroleum received and delivered. For receipt locations where custody transfer measurement is by Lease Automatic Custody Transfer (LACT) unit or by allocation process, a deduction of twenty-five hundredths of one percent (0.25%) will be made to cover evaporation, interface losses and normal losses during transportation.   7.3 Losses.   (a) All shipments of Crude Petroleum of 50 degrees A.P.I. gravity or above shall be subject to a deduction to cover the shrinkage resulting from the mixture thereof, in the facilities of Transporter, with Crude Petroleum of A.P.I. gravity of 49.9 degrees or less according to the following table:   A.P.I. Gravity  (Degrees)    Deduction  50 through 59.9    1% 60 through 74.9    2% 75 through 84.9    3% 85 through 94.9    4% 95 through 104.9    5% 105 through 120.9    6%   (b) The quantity of Crude Petroleum deliverable shall be the net standard volume less shrinkage, evaporation, or any other losses in transit or due to leaks or pipeline breaks. All such shrinkage, evaporation, and gains or losses shall be assigned by Transporter to Shipper on a just and reasonable basis.

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  ARTICLE 8 TERM   8.1 Term. Subject to the other provisions of this Agreement, the term of this Agreement shall commence on the Effective Date and shall remain in effect until terminated by either Party upon thirty (30) days' prior written notice.   8.2 Remedies Cumulative. Each Party shall have any and all remedies available to it under this Agreement, at law, or in equity for any breach by the other Party of the other Party's obligations under this Agreement. All such remedies are cumulative, not exclusive, and such Party may exercise any or all of such remedies in addition to or as an alternative to termination of the Term. No election of remedies shall be required or implied as the result of a Party's decision to avail itself of a remedy hereunder.   ARTICLE 9 TITLE AND CUSTODY   9.1 Title. A nomination of Crude Petroleum shall be deemed a warranty of title to such Crude Petroleum by Shipper, or a warranty of the good right to deliver such Crude Petroleum for transportation hereunder. Transporter may, in the absence of adequate security, decline to receive any Crude Petroleum which is in litigation, or as to which a dispute over title may exist, or which is encumbered by any lien. By nominating Crude Petroleum, Shipper also agrees to be responsible for any and all losses resulting from disputes, encumbrances, or failure of title thereto. Neither acceptance for transportation, nor redelivery by Transporter at the Delivery Point shall be deemed a representation by Transporter as to title.   9.2  Custody. As among the Parties, Shipper shall be in custody, control and possession of the Crude Petroleum affected by this Agreement at all times prior to delivery to Transporter at the Receipt Point and after redelivery by Transporter at the Delivery Point and Transporter shall have custody and control of the Crude Petroleum affected by this Agreement at all times after delivery by Shipper at the Receipt Point and prior to redelivery by Transporter at the Delivery Point.   ARTICLE 10 BILLING AND PAYMENT   10.1 Payment. All payments are due within 10 days of receipt of the invoice by ACH or wire transfer, unless the Transporter determines in a manner not unreasonably discriminatory that the financial condition of Shipper or Shipper's guarantor (if any) is or has become impaired or unsatisfactory or Transporter determines in a manner not unreasonably discriminatory it necessary to do so, in which case the payment due date shall be that specified in a written notice to the Shipper. Notwithstanding the foregoing, Shipper may withhold payment of amounts it disputes in good faith, provided that if any such amount is later determined to have been due Transporter Section 10.2 below shall apply to such amount.

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  10.2 Past-Due Interest. If any charge remains unpaid after the due date specified in Transporter's invoice, then such amount due may bear interest from the day after the due date until paid, calculated at an annual rate equivalent to the lesser of (1) 125% of the prime rate of interest, as of the date of Transporter's invoice, charged by the Citibank N.A. of New York, New York, for ninety (90) day loans made to substantial and responsible commercial borrowers or (2) the maximum rate allowed by law. In addition Shipper shall pay all documented costs incurred by Transporter to collect any unpaid amounts.   10.3 Setoff. In the event Shipper fails to pay any such undisputed charges when due, Transporter shall have the right to setoff such amounts owed and future amounts owed against those amounts Transporter owes Shipper.   10.4 In the event Transporter determines in a manner not unreasonably discriminatory that the financial condition of Shipper or Shipper's guarantor (if any) is or has become impaired or unsatisfactory or Transporter determines in a manner not unreasonably discriminatory it is necessary to obtain security from Shipper, Transporter, upon notice to Shipper, may require any of the following prior to Transporter's delivery of Shipper's Crude Petroleum in Transporter's possession or prior to Transporter's acceptance of Shipper's Crude Petroleum: (1) prepayment of all charges, (2) a letter of credit at Shipper's expense in favor of Transporter in an amount sufficient to ensure payment of all such charges and, in a form, and from an institution acceptable to Transporter, or (3) a guaranty in an amount sufficient to ensure payment of all such charges and in a form and from a third party acceptable to Transporter. In the event, Shipper fails to comply with any such requirement on or before the date supplied in Transporter's notice to Shipper, Transporter shall not be obligated to provide Shipper access to Transporter's facilities or provide services pursuant to this Agreement until such requirement is fully met.   ARTICLE 11 REMEDIES   11.1 Lien/Auction.   (a) Transporter shall have a lien on all Crude Petroleum delivered to Transporter to secure the payment of any and all transportation, or any other charges that are owed Transporter. Such lien shall survive delivery of Crude Petroleum to Shipper. Such lien shall extend to all Crude Petroleum in Transporter's possession beginning with Shipper's first receipt of transportation or other services from Transporter. The lien provided herein shall be in addition to any lien or security interest provided by statute or applicable law. Transporter may withhold delivery to Shipper of any of Shipper's Crude Petroleum in its possession and exercise any other rights and remedies granted under this Agreement or existing under applicable law until all such charges have been paid as provided above.   (b) If Shipper fails to pay the undisputed portion of an invoice by the due date, in addition to any other remedies under this Agreement or under applicable law, Transporter shall have the right, either directly or through an agent, to sell at a private sale any and all Crude Petroleum of such Shipper in its custody at fair market value at the time of sale. The proceeds of any sale shall be applied to the following order: (i) to the reasonable expenses of holding, preparing for sale, selling, and to the extent allowed by law, reasonable attorney's fees and legal expenses incurred by Transporter; and (ii) to the satisfaction of the Shipper's indebtedness including interest herein provided from the date of payment is due. The balance of the proceeds of the sale remaining, if any, shall be paid to Shipper or, if there is a dispute or claim as to entitlement, held for whoever may be lawfully entitled thereto.

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  11.2 Suspension of Performance. In the event Shipper fails to pay charges when due, Transporter shall not be obligated to provide Shipper access to Transporter's facilities or provide services pursuant to this Agreement until such time as payment is received by Transporter.   11.3 Legality of Shipments. Transporter reserves the right to reject any and all Crude Petroleum nominated for shipment when Shipper fails or is unwilling or unable to comply with all applicable Laws, or fails to reasonably demonstrate to Transporter that the shipment would be in conformance with the provisions of this Agreement.   11.4 Claims. As a condition precedent to recovery for losses or delay to shipments, claims must be filed in writing with Transporter within one year and one day after delivery of the Crude Petroleum, or, in case of failure to make delivery, then within one year and one day after a reasonable time for delivery has elapsed; and suits arising out of such claims shall be instituted against the Transporter only within two years and one day from the date of delivery, or within two years and one day after a reasonable time for delivery has elapsed. Where claims are not filed or suits are not instituted thereon in accordance with the foregoing provisions, Transporter shall not be liable and such claims will not be paid.   ARTICLE 12 FORCE MAJEURE   12.1 Force Majeure. If either Transporter or Shipper is rendered unable by an event of Force Majeure to carry out, in whole or part, its obligations hereunder and such Party gives notice and full details of the event to the other Party as soon as practicable after the occurrence of the event, then, pending such Force Majeure, but only during that period, the obligations of the Party affected by the event (other than the obligation to make payments then due or becoming due with respect to performance prior to the event) shall be canceled or suspended, as applicable, to the extent required; provided, however, that notwithstanding anything in the foregoing to the contrary, Shipper's obligation to pay the transportation charge set forth in Section 3.1 shall not be reduced, suspended or otherwise excused in any manner as the result of Force Majeure, regardless of which Party is affected. The Party affected by the Force Majeure shall use commercially reasonable efforts to remedy the Force Majeure condition with all reasonable dispatch, shall give written notice to the other Party of the termination of the Force Majeure, and shall resume performance of any suspended obligation promptly after termination of such Force Majeure; provided, that notwithstanding anything in the foregoing to the contrary, a Party may elect, in its sole discretion, whether or not to repair or replace its facilities following catastrophic destruction of all or substantially all of such facilities.

13







  ARTICLE 13 INDEMNIFICATION   13.1  Shipper shall release, indemnify, defend, and hold harmless Transporter and its affiliates, directors, officers, employees, agents, consultants, representatives, and invitees from and against all claims and losses arising out of or relating to (i) the operations of Shipper, (ii) any breach of this agreement by Shipper, except to the extent attributable to the negligence, willful misconduct or fault of Transporter, and (iii) operations or activities upstream or downstream of the Gathering System, except to the extent attributable to the negligence, willful misconduct or fault of Transporter.   13.2  Transporter shall release, indemnify, defend, and hold harmless Shipper and its Affiliates, directors, officers, employees, agents, consultants, representatives, and invitees from and against all claims and losses arising out of or relating to (i) the operations of Transporter and (ii) any breach of this agreement by Transporter, except to the extent attributable to the negligence, willful misconduct or fault of Shipper.   ARTICLE 14 NOTICES   14.1 Notices. Unless otherwise provided herein, any notice, request, invoice, statement, or demand which either Party desires to serve upon the other regarding this Agreement shall be made in writing and shall be considered as delivered (i) when hand delivered, (ii) when delivery is confirmed by pre-paid delivery service (such as FedEx, UPS, DHL or a similar delivery service), (iii) if mailed by United States certified mail, postage prepaid, three (3) Business Days after mailing, (iv) if sent by facsimile transmission, when receipt is confirmed by the equipment of the transmitting Party, or (v) when sent, if sent by Email. Any notice shall be given to the other Party at the following address, or to such other address as either Party shall designate by written notice to the other:   ENERGY XXI USA, INC.           Attn:       Phone:      Fax:       Email address:           ENERGY XXI GULF COAST, INC.           Attn:       Phone:      Fax:       Email address:

14







  ARTICLE 15 ASSIGNMENT   15.1 Assignment.   (a) Shipper shall have the right to assign, or transfer all, but not less than all, of its rights and obligations under this Agreement with the prior written consent of Transporter, which consent may be withheld in Transporter's sole discretion.   (b) No assignment or transfer of this Agreement shall be effective as to Transporter unless and until Transporter has been provided written notice thereof.   15.2 Encumbrance.   (a)  Shipper shall not pledge, encumber or grant any security interest with respect to any portion of its interests or rights under this Agreement.   (b)  Transporter shall have the right to pledge, encumber or otherwise grant security interests in its interests or rights under this Agreement.   15.3  Nothing herein shall prevent or prohibit Shipper, without consent of Transporter, from engaging and using contractors and subcontractors to perform services, for the benefit of Shipper, in connection with the performance by Shipper of its obligations under this Agreement.   ARTICLE 16 MISCELLANEOUS   16.1 Applicable Laws. This Agreement is subject to, and the Parties shall comply with, all valid present and future laws, regulations, rules and orders of Governmental Authorities now or hereafter having jurisdiction over the Parties, this Agreement, or the Services performed or the facilities utilized under this Agreement.   16.2 Authorizations. The Parties hereto represent that they have all requisite corporate and/or company authorizations necessary or proper to consummate this Agreement.   16.3 Entirety. This Agreement constitutes the entirety of the understanding between the Parties with respect to the subject matter dealt with herein, and replaces and supersedes all prior agreements, conditions, understandings, representations and warranties made between the Parties with respect to the subject matter hereof, whether written or oral. It is further agreed that no amendment, modification or change herein shall be enforceable, except as specifically provided for in this Agreement, unless reduced to writing and executed by both Parties.   16.4 Governing Law; Jurisdiction; Jury Waiver.   (a) The validity, construction and performance of this Agreement shall be governed by the laws of the State of Texas, not including any of its conflicts of law rules that would direct or refer to the laws of another jurisdiction. The Parties have allocated liability risk pursuant to this Agreement and therefore intend that no anti-indemnity law, rule or regulation apply hereto.

15







  (b)  The Parties agree that the appropriate, exclusive and convenient forum for any disputes between the Parties arising out of this Agreement or the transactions contemplated hereby shall be in any state or federal court in Harris County, Texas, and each of the Parties irrevocably submits to the jurisdiction of such courts solely in respect of any proceeding arising out of or related to this Agreement. The Parties further agree that the Parties shall not bring suit with respect to any disputes arising out of this Agreement or the transactions contemplated hereby in any court or jurisdiction other than the above specified courts.   (c) EACH PARTY HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY DISPUTE ARISING FROM OR UNDER THIS AGREEMENT.   16.5 Non-Waiver. No waiver by either Party hereto of any one or more defaults by the other in the performance of any of the provisions of this Agreement shall be construed as a waiver of any other default or defaults whether of a like kind or different nature. Any delay, less than any applicable statutory period of limitations, in asserting or enforcing any rights under this Agreement, shall not be deemed a waiver of such rights. Failure of either Party to enforce any provision of this Agreement or to require performance by the other Party of any of the provisions hereof shall not be construed to affect the validity of this Agreement or any part thereof, or the right of either Party thereafter to enforce each and every provision hereof.   16.6 Severability. If any term or other provision or portion of a provision of this Agreement is determined to be invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other terms and conditions of this Agreement shall nevertheless remain in full force and effect.   16.7 Amendments. This Agreement shall not be altered or amended, except by an agreement in writing executed by all parties to this Agreement in accordance with the limited partnership agreement of Transporter.   16.8 Confidentiality.   (a) Confidentiality. Except as otherwise provided in this Section 16.8, each Party agrees that it shall maintain all terms and conditions of this Agreement, and all information disclosed to it by the other Party or obtained by it in the performance of this Agreement and relating to the other Party's business (including all data relating to the production of Shipper, including well data, production volumes, volumes gathered, transported, or compressed, and quality) (collectively, Confidential Information) as confidential, and that it shall not cause or permit disclosure of this Agreement or its existence or any provisions contained herein without the express written consent of the other Party.

16







  (b) Permitted Disclosures. Notwithstanding Section 16.8(a), disclosures of any Confidential Information may be made by either Party (i) to the extent necessary for such Party to enforce its rights hereunder against the other Party; (ii) to the extent to which a Party is required to disclose all or part of this Agreement by a statute or by the order or rule of a Governmental Authority exercising jurisdiction over the subject matter hereof, by order, by regulations, or by other compulsory process (including deposition, subpoena, interrogatory, or request for production of documents in any administrative, judicial, or legislative proceedings); (iii) to the extent required by the applicable regulations of a securities or commodities exchange; (iv) to a third person in connection with a proposed sale or other transfer of all or any portion of a Party's assets and properties related to the subject matter of this Agreement, provided that such third person agrees in writing to be bound by the terms of this Section 16.8; (v) to its own directors, officers, employees, agents and representatives; (vi) to an Affiliate; (vii) to financial advisors, attorneys, and banks, provided that such Persons are subject to a confidentiality undertaking consistent with this Section 16.8(b); or (ix) any information which, through no fault of a Party, becomes a part of the public domain.   (c) Notification. If either Party is or becomes aware of a fact, obligation, or circumstance that has resulted or may result in a disclosure of any of the terms and conditions of this Agreement authorized by Section 16.8(b)(ii) or (iii), it shall so notify in writing the other Party promptly and shall provide documentation or an explanation of such disclosure as soon as it is available.   (d) Party Responsibility. Each Party shall be deemed solely responsible and liable for the actions of its directors, officers, employees, agents, representatives and Affiliates for maintaining the confidentiality commitments of this Section 16.8   (e) The provisions of this Section 16.8 shall survive any termination of this Agreement for a period of one (1) year.

17







  16.9 Representations. Each Party declares, warrants, and represents on behalf of itself (i) that it has contributed to the drafting of this Agreement or has had it reviewed by legal counsel before executing it, (ii) that this Agreement has been purposefully drawn and correctly reflects such Party's understanding of the transaction that it contemplates as of the Effective Date hereof, (iii) that this Agreement has been validly executed and delivered; (iv) that this Agreement has been duly authorized by all action necessary for the authorization thereof, and (v) this Agreement constitutes a binding and enforceable obligation of the Party, enforceable in accordance with its terms.   16.10 Counterparts. This Agreement may be executed in any number of counterparts and if so signed in counterparts, all counterparts taken together shall have the same effect as if all parties had signed the same instrument.   16.11 No Partnership. This Agreement shall not constitute a partnership or joint venture between Transporter and Shipper. Transporter shall carry out its operations with respect to the Gathering System as an independent contractor and shall not (except as expressly set forth in this Agreement) be subject to the control of Shipper in doing so.   16.12 No Third Party Beneficiaries. This Agreement is for the sole and exclusive benefit of the Parties hereto. Except as expressly provided herein to the contrary, nothing herein is intended to benefit any other Person not a Party hereto, and no such Person shall have any legal or equitable right, remedy or claim under this Agreement.   16.13 Exhibits. All exhibits and the like contained in or attached to the Agreement are integrally related to this Agreement and are hereby made a part of the Agreement for all purposes. To the extent of any ambiguity, inconsistency or conflict between the body of this Agreement and any of the exhibits and the like attached to the Agreement, the terms of the body of the Agreement shall prevail.   16.14 Further Assurances. Each Party shall take such acts and execute and deliver such documents as may be reasonably required to effectuate the purposes of this Agreement.   16.15 Limitation of Liability. EXCEPT WITH REGARD TO OBLIGATIONS TO INDEMNIFY A PARTY FOR CLAIMS MADE BY THIRD PARTIES, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY (OR ITS AFFILIATES) PURSUANT TO THIS AGREEMENT FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, OR SPECIAL DAMAGES OR LOSSES OR ANY PUNITIVE, EXEMPLARY, TREBLE, OR SIMILAR DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PERFORMANCE OF, OR FAILURE TO PERFORM, ITS OBLIGATIONS HEREUNDER, EVEN IF SUCH DAMAGES OR LOSSES ARE CAUSED BY THE SOLE, JOINT, OR CONCURRENT NEGLIGENCE, STRICT LIABILITY, OR OTHER FAULT OF THE PARTY WHOSE LIABILITY IS BEING WAIVED HEREBY.   [Next page is signature page]

18







  IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in duplicate originals to be effective as of the Execution Date.   ENERGY XXI USA, INC.   ENERGY XXI GULF COAST, INC.           By: /S/ ANTONIO DE PINHO   By: /S/ RICK FOX           Name: ANTONIO DE PINHO   Name: RICK FOX           Title: PRESIDENT   Title: CFO

19







  EXHIBIT A TABLE OF RATES   FROM ESTABLISHED RECEPTION POINTS TO GRAND ISLE (JEFFERSON PARISH), LOUISIANA

From   Rate in Cents Per Barrel of 42 United States Gallons

Reception Points Offshore Louisiana   Crude Petroleum Transportation

Excess Water, Sediment, and  Other Impurities Handling  Block 22, Grand Isle 16     38.58      29.76  Block 30, Grand Isle 33     57.91      29.76  Block 73, West Delta 73     122.78      29.76  Block 90, West Delta 90     122.78      29.76  Block 62, West Delta 62     152.28      60.88  Block 54, South Timbalier 54     166.65      60.88  Block 30, West Delta 30     172.71      60.88  Block 32, West Delta 30     172.71      60.88  Block 45, West Delta 45     172.68      60.88  Block 93, South Pass 89     177.11      60.88  Block 152, Mississippi Canyon 268     242.01  &bbsp;  60.88  Block 311, Mississippi Canyon 311     242.01      60.88  Block 397, Mississippi Canyon 397     282.87      60.88  Block 280, Mississippi Canyon 281     291.11      60.88    Disposal Fee: _______________________

A-1







  EXHIBIT B ADJUSTMENT AUTHORIZATION   TABLES OF DIFFERENTIALS FOR USE IN DETERMINING ADJUSTMENTS FOR DIFFERENCE IN GRAVITY OF CRUDE PETROLEUM   API GRAV  DIFF/BBL  API GRAV  DIFF/BBL  API GRAV  DIFF/BBL   API GRAV   DIFF/BBL   API GRAV   DIFF/BBL   API GRAV   DIFF/BBL 20   2.75   24.9   3.485   29.8   4.22   34.7   4.955   39.6   5.08   44.5   5.1 20.1   2.765   25   3.5   29.9   4.235   34.8   4.97   39.7   5.08   44.6   5.1 20.2   2.78   25.1   3.515   30   4.25   34.9   4.985   39.8   5.08   44.7   5.1 20.3   2.795   25.2   3.53   30.1   4.265   35   5   39.9   5.08   44.8   5.1 20.4   2.81   25.3   3.545   30.2   4.28   35.1   5   40   5.1   44.9   5.1 20.5   2.825   25.4   3.56   30.3   4.295   35.2   5   40.1   5.1   45   5.1 20.6   2.84   25.5   3.575   30.4   4.31   35.3   5   40.2   5.1   45.1   5.085 20.7   2.855   25.6   3.59   30.5   4.325   35.4   5   40.3   5.1   45.2   5.07 20.8   2.87   25.7   3.605   30.6   4.34   35.5   5   40.4   5.1   45.3   5.055 20.9   2.885   25.8   3.62   30.7   4.355   35.6   5   40.5   5.1   45.4   5.04 21   2.9   25.9   3.635   30.8   4.37   35.7   5   40.6   5.1   45.5   5.025 21.1   2.915   26   3.65   30.9   4.385   35.8   5   40.7   5.1   45.6   5.01 21.2   2.93   26.1   3.665   31   4.4   35.9   5   40.8   5.1   45.7   4.995 21.3   2.945   26.2   3.68   31.1   4.415   36   5.02   40.9   5.1   45.8   4.98 21.4   2.96   26.3   3.695   31.2   4.43   36.1   5.02   41   5.1   45.9   4.965 21.5   2.975   26.4   3.71   31.3   4.445   36.2   5.02   41.1   5.1   46   4.95 21.6   2.99   26.5   3.725   31.4   4.46   36.3   5.02   41.2   5.1   46.1   4.935 21.7   3.005   26.6   3.74   31.5   4.475   36.4   5.02   41.3   5.1   46.2   4.92 21.8   3.02   26.7   3.755   31.6   4.49   36.5   5.02   41.4   5.1   46.3   4.905 21.9   3.035   26.8   3.77   31.7   4.505   36.6   5.02   41.5   5.1   46.4   4.89 22   3.05   26.9   3.785   31.8   4.52   36.7   5.02   41.6   5.1   46.5   4.875 22.1   3.065   27   3.8   31.9   4.535   36.8   5.02   41.7   5.1   46.6   4.86 22.2   3.08   27.1   3.815   32   4.55   36.9   5.02   41.8   5.1   46.7   4.845 22.3   3.095   27.2   3.83   32.1   4.565   37   5.04   41.9   5.1   46.8   4.83 22.4   3.11   27.3   3.845   32.2   4.58   37.1   5.04   42   5.1   46.9   4.815 22.5   3.125   27.4   3.86   32.3   4.595   37.2   5.04   42.1   5.1   47   4.8 22.6   3.14   27.5   3.875   32.4   4.61   37.3   5.04   42.2   5.1   47.1   4.785 22.7   3.155   27.6   3.89   32.5   4.625   37.4   5.04   42.3   5.1   47.2   4.77 22.8   3.17   27.7   3.905   32.6   4.64   37.5   5.04   42.4   5.1   47.3   4.755 22.9   3.185   27.8   3.92   32.7   4.655   37.6   5.04   42.5   5.1   47.4   4.74 23   3.2   27.9   3.935   32.8   4.67   37.7   5.04   42.6   5.1   47.5   4.725 23.1   3.215   28   3.95   32.9   4.685   37.8   5.04   42.7   5.1   47.6   4.71 23.2   3.23   28.1   3.965   33   4.7   37.9   5.04   42.8   5.1   47.7   4.695 23.3   3.245   28.2   3.98   33.1   4.715   38   5.06   42.9   5.1   47.8   4.68 23.4   3.26   28.3   3.995   332   4.73   38.1   5.06   43   5.1   47.9   4.665 23.5   3.275   28.4   4.01   33.3   4.745   38.2   5.06   43.1   5.1   48   4.65 23.6   3.29   28.5   4.025   33.4   4.76   38.3   5.06   43.2   5.1   48.1   4.635 23.7   3.305   28.6   4.04   33.5   4.775   38.4   5.06   43.3   5.1   48.2   4.62 23.8   3.32   28.7   4.055   33.6   4.79   38.5   5.06   43.4   5.1   48.3   4.605 23.9   3.335   28.8   4.07   33.7   4.805   38.6   5.06   43.5   5.1   48.4   4.59 24   3.35   28.9   4.085   33.8   4.82   38.7   5.06   43.6   5.1   48.5   4.575

B-1







  API GRAV  DIFF/BBL   API GRAV  DIFF/BBL   API GRAV  DIFF/BBL   API GRAV   DIFF/BBL   API GRAV   DIFF/BBL   API GRAV   DIFF/BBL

24.1   3.365   29   4.1   33.9   4.835   38.8   5.06   43.7   5.1   48.6   4.56 24.2   3.38   29.1   4.115   34   4.85   38.9   5.06   43.8   5.1   48.7   4.545 24.3   3.395   29.2   4.13   34.1   4.865   39   5.08   43.9   5.1   48.8   4.53 24.4   3.41   29.3   4.145   34.2   4.88   39.1   5.08   44   5.1   48.9   4.515 24.5   3.425   29.4   4.16   34.3   4.895   39.2   5.08   44.1   5.1   49   4.5 24.6   3.44   29.5   4.175   34.4   4.91   39.3   5.08   44.2   5.1   49.1   4.485 24.7   3.455   29.6   4.19   34.5   4.925   39.4   5.08   44.3   5.1   49.2   4.47 24.8   3.47   29.7   4.205   34.6   4.94   39.5   5.08   44.4   5.1   49.3   4.455

B-2







  EXHIBIT C SAMPLE QUALITY BANK CALCULATION   GRAND ISLE GATHERING SYSTEM COMMON STREAM HLS CRUDE   Receipt Bank

SHIPPER   BBLS REC'D   API GRAV   FROM EXH. A  GRAV DIFF   BBLS REC'D X  GRAV DIFF A   100.00   29.8   4.220   422.00 B   150.00   38.6   5.060   759.00 C   100.00   36.4   5.020   502.00 C   200.00   46.2   4.920   984.00 TOTAL   550.00        2667.00   Common stream weighted average GRAVITY value: 2667.00/550.0 = 4.84909091   Shipper A:               Weighted average GRAVITY value: 422.00/100 = 4.220              Calculation: (4.84909091 - 4.220) x 100 =   $ 62.909                         Total Shipper A pays the bank:          $ 62.91                  Shipper B:               Weighted average GRAVITY value: 759.00/150 = 5.060               Calculation: (4.84909091 - 5.060) x 150 =   ($ 31.636)                        Total Shipper B pays the bank:          ($ 31.64)                 Shipper C:              Weighted average GRAVITY value: 1486.00/300 = 4.953               Calculation: (4.84909091 - 4.953) x 300 =   ($ 31.273)                        Total Shipper B pays the bank:          $ (31.27)                 NET          $ 0.00

C-1 
Question: Highlight the parts (if any) of this contract related to Cap On Liability that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery.

SOLUTION: 53383

PROBLEM: Exhibit 4.23

Rise Education Group

SERVICE AGREEMENT

This Service Agreement (this Agreement) is entered into as of [Date] in Beijing, China, by and between:

Party A: Rise (Tianjin) Education Information Consulting Co., Ltd. (Service Provider)

Address: Room C209, C210, C213, C214, C217 and C218, 2/F, Building 1, No. 8 Huanhe West Road, Airport Economic Zone, Tianjin, China

Party B: [•] (Service Recipient)

Address: [•]

Whereas: 1. Service Provider is a company with adequate financial and other resources in the field of English teaching and training for children, capable of providing valuable and sophisticated educational services solutions to educational institutions and teachers; 2. Service Recipient engages in the field of English teaching and training for children. Service Recipient agrees to accept Service Provider's services as specified in this Agreement and utilize Service Provider's resources to provide services to relevant education and training institutions.

This Agreement is entered into by and between Service Provider and Service Recipient (each a Party and collectively, the Parties) upon mutual consultation to promote the development of education and training and cultivate talents for the society. 1. Scope of Services

Service Provider shall provide the following operation support services (the Services) to Service Recipient: (1) Academic Support Services

Service Provider, having a dedicated team for research and development in courses and teaching methods, will provide Service Recipient with customized academic supports, including those in respect of teaching skills, operation guidance for teachers, codes of conduct and staff training, to meet the needs of Service Recipient for academic support in its operations. 1





Rise Education Group (2) Enrollment Support Services

Service Provider, having a dedicated student enrollment support team, will provide Service Recipient with customized student enrollment support services, including recommending Service Recipient's courses to potential users, through the internet, WeChat, offline activities and other methods, to meet the needs of Service Recipient for student enrollment support in its operations and promote student enrollments with Service Recipient. (3) [Human Resources Support Services

Service Provider, having a dedicated human resources support team, will provide Service Recipient with customized human resources support services, including but not limited to those in connection with staff recruitment, onboarding, probation, job transfers, departure, social security and provident funds, to meet the needs of Service Recipient for human resources support in its operations.] (4) [Financial Management Support Services

Service Provider, having a dedicated financial management support team, will provide Service Recipient with customized financial management support services, including but not limited to consulting services relating to accounting management, cash flow management, financial analysis and financial budgeting, to meet the needs of Service Recipient for financial management support in its operations.] (5) [Legal Support Services

Service Provider, having a dedicated legal support team, will provide Service Recipient with customized legal support services, including but not limited to those relating to the management of legal and regulatory matters, contract review, dispute resolution, litigation and arbitration proceedings, and acquisition and merger transactions, to meet the needs of Service Recipient for legal support in its operations.] (6) Customer Support Services

Service Provider, having a dedicated team operating a national customer service center, will provide Service Recipient with customized customer support services, including but not limited to answering customers' incoming calls, following up on customers' telephone inquiries, arranging return visits, inviting customers to trial courses, assisting on handling customers' complaints and conducting ad hoc customer satisfaction surveys, to meet the needs of Service Recipient for customer support services in its operations. (7) [Internet Technology Support Services

Service Provider, having a dedicated internet technology support team, will provide Service Recipient with customized internet technology support services, including but not limited to network engineering services and cybersecurity support services, to meet the needs of Service Recipient for internet technology support in its operations.] (8) [Administrative Support Services

Service Provider, having a dedicated administrative support team, will provide Service Recipient with customized administrative support services, including but not limited to centralized procurement services and inventory management services, to meet the needs of Service Recipient for administrative support in its operations.] 2





Rise Education Group 2. Non-exclusivity

The provision of the Services under this Agreement is non-exclusive. Service Provider may use the Services by itself or provide similar services to any other third party within the area where Service Recipient operates or other areas. 3. Assignment

Unless otherwise provided herein, Service Recipient shall not assign or transfer any rights or obligations hereunder to any third party without the prior written consent of Service Provider. Service Provider may assign or transfer its rights and obligations hereunder to any third party in connection with, among other things, equity restructuring or business restructuring, without the consent of Service Recipient. 4. Service Fee

Service Recipient shall pay Service Provider the [service fees]/ [commissions and service fees] ([collectively,] Service Fee) (inclusive of all applicable taxes) in accordance with Schedule 1 for the Services provided by Service Provider.

[To facilitate the operation of Service Recipient, in the event that Service Recipient incurs losses, Service Provider may agree to waive the obligations of Service Recipient to pay Service Fee to Service Provider.] 5. Payment Methods

Service Recipient shall make the payment of Service Fee through bank remittance or other payment methods to the following account designated by Service Provider:

Account Name: Rise (Tianjin) Education Information Consulting Co., Ltd.

Account Bank: Bank of China (Tianjin Ronghe Square Sub-branch)

Account Number: 272672784101 6. Intellectual Property

All the legal rights in respect of the Services shall be owned by Service Provider. Service Recipient does not obtain any intellectual property rights in respect of the Services by entering into this Agreement. All the intellectual property rights created or derived from the provision of the Services, including but without limitation, copyrights, patents, patent applications, trademarks, trademark applications, software, know-how, technology data and commercial secrets, regardless of whether being developed or created by Service Provider or Service Recipient, shall be exclusively and solely owned by Service Provider. 3





Rise Education Group 7. Representations and Warranties (1) Service Provider hereby represents and warrants to Service Recipient as follows: (a) Service Provider is a limited liability company duly organized and existing under the laws of China. (b) Service Provider has legal rights to execute and perform this Agreement. The execution and performance of this Agreement does not contravene the articles of association or other constitutional documents of Service Provider. Service Provider has obtained all necessary and appropriate approvals and authorizations to execute and perform this Agreement. (c) The execution and performance of this Agreement by Service Provider will not violate any provisions of laws and regulations, governmental approvals, authorizations, notifications, or any other regulatory documents binding or affecting Service Provider, and will not violate any of its agreements with, or commitments to, any third party. (d) This Agreement constitutes legal, valid and enforceable obligations of Service Provider. (2) Service Recipient hereby represents and warrants to Service Provider as follows: (a) Service Recipient is a [private non-enterprise entity]/ [limited liability company] duly organized and existing under the laws of China. (b) Service Recipient has legal rights to execute and perform this Agreement. The execution and performance of this Agreement does not contravene the articles of association or other constitutional documents of Service Recipient. Service Recipient has obtained all necessary and appropriate approvals and authorizations to execute and perform this Agreement. (c) The execution and performance of this Agreement by Service Recipient will not violate any provisions of laws and regulations, governmental approvals, authorizations, notifications, or any other regulatory documents binding or affecting Service Recipient, and will not violate any of its agreements with, or commitments to, any third party. (d) This Agreement constitutes legal, valid and enforceable obligations of Service Recipient. 8. Confidentiality

The Parties covenant and confirm that any verbal communications, written documents or electronic information (including but not limited to software codes and any contents contained in the software) relating to this Agreement between the Parties shall be confidential information. Neither Party may disclose any confidential information of the other Party without prior written consent from the other Party, except that: (1) relevant information has been made public not as a result of any fault or disclosure by the information recipient; (2) such disclosure is required under applicable laws or regulations or rules of securities exchanges. Any employees of one Party disclosing any confidential information shall be deemed as the Party disclosing confidential information and such Party shall be liable therefor under this Agreement. This clause shall survive the termination of this Agreement. 4





Rise Education Group 9. Events of Default

Failure by a Party to perform its obligations under this Agreement or any non-compliance of its performance of obligations with this Agreement or any of its representations and warranties under this Agreement being materially untrue or inaccurate shall constitute an event of default. The defaulting Party shall indemnify the non-defaulting Party for all the direct and indirect losses arising from its default.

Notwithstanding the foregoing, upon any delay by Service Recipient in its payment of any Service Fee to Service Provider, for each day of delay in such payment, Service Recipient must pay Service Provider liquidated damages at 0.5 percent (0.5%) of the Service Fee that are due and unpaid. In the event that such delay in payment is more than fifteen (15) days, Service Provider may terminate this Agreement. Service Recipient shall be liable for indemnifying Service Provider in full for the losses it incurred therefrom.

Either Party's failure to exercise the right to claim liquidated damages or indemnification for losses against the other Party shall not be deemed as a waiver of such right. 10. Termination

This Agreement shall be terminated upon the occurrence of any of the following: (1) The validity period of this Agreement expires and the Parties fail to reach an agreement on renewal; (2) The Parties mutually agree to terminate this Agreement; or (3) Service Provider exercises the right to terminate this Agreement upon a default by Service Recipient.

If this Agreement is terminated by Service Provider upon a default by Service Recipient, Service Provider will not refund the prepaid Service Fee to Service Recipient. 11. Notice

Any written notice sent by registered or express mail shall be deemed being delivered three (3) business days after the date on which the mail is dispatched (evidenced by the postmark) unless the address on the mailing slip is different from the address specified in this Agreement. Any written notice sent by facsimile shall be deemed being delivered when the receipt is confirmed.

In addition, Service Provider may send any notice by email to the email address provided by Service Recipient in this Agreement, and the notice shall be deemed as being delivered when such email is successfully sent. 5





Rise Education Group The address of each Party for notice purposes shall be as follows:

Service Provider: Rise (Tianjin) Education Information Consulting Co., Ltd.

Mailing address: Room C209, C210, C213, C214, C217 and C218, 2/F, Building 1, No.8 Huanhe West Road, Airport Economic Zone, Tianjin, China

Attention: SUN Yiding

Service Provider: [•]

Mailing address: [•]

Attention: [•] 12. Dispute Resolution and Governing Law

The Parties shall seek to resolve all the disputes arising from or in connection with this Agreement through friendly consultation. In the event that any dispute cannot be resolved through such consultation, such dispute shall be submitted to the Beijing Arbitration Commission (BAC) for arbitration pursuant to the then effective arbitration procedures and rules of BAC. The arbitral award shall be final and binding upon the Parties. 13. Renewal

This Agreement shall be effective as of the date set forth above in this Agreement. The term of this Agreement shall be five (5) years. This Agreement shall be renewed automatically for another five (5) years upon the expiration unless the Parties confirm, in writing, the termination of this Agreement. 14. Miscellaneous (1) [This Agreement shall supersede other service agreements previously entered into by both Parties. In case of any conflicts in any terms and conditions or any dispute on the interpretation, application or implementation of this Agreement, this Agreement shall prevail. Any amendment to this Agreement shall be in writing and executed by both Parties hereto.] (2) This Agreement is executed in two (2) original copies and each Party shall hold one original copy. Both original copies shall have the same legal effect. (3) This Agreement shall become effective upon being affixed with both Parties' official seals.

[The remainder of this page is left blank] 6





Rise Education Group IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed Rise (Tianjin) Education Information Consulting Co., Ltd.

(Corporate Seal)

Date:

[•]

(Seal)

Date: 7





Rise Education Group SCHEDULE 1

Service Fees

During the term of this Agreement, Service Recipient shall pay to Service Provider the Service Fee on a quarterly basis. The amount of the Service Fee shall be [determined on the basis of the actual costs incurred by Service Provider in connection with its provision of the services, plus a mark-up at a percentage as agreed upon between both Parties, to be allocated to Service Recipient and other service recipients in proportion to their respective revenues] / [computed at a percentage (as agreed upon between both Parties) of Service Recipient's revenues] and confirmed by a letter of confirmation substantially in the form attached hereto.

Service Fee shall be paid after each quarter. Service Recipient shall pay the Service Fee for the preceding quarter in accordance with a written payment instruction of Service Provider during each quarter. 8





Rise Education Group Annex 1 - Form of the Letter of Confirmation on the Amount of Service Fee

Letter of Confirmation on the Amount of Service Fee

Reference is made to the Service Agreement (the Agreement), dated as of [Date], by and between Rise (Tianjin) Education Information Consulting Co., Ltd. (Service Provider) and [•] (Service Recipient). Pursuant to Section 4 and Schedule 1 of the Agreement, Service Provider and Service Recipient agree that the amount of the Service Fee for the [•] quarter of 20[•] shall be [RMB [•] ([•][in letters]) in total]/[set at [•]% of the revenues booked by Service Recipient during the quarter, amounting to RMB [•] ([•][in letters])]. The above-referenced Service Fee shall be paid by Service Recipient to the account designated by Service Provider not later than [Date] in accordance with a written payment instruction of Service Provider. Rise (Tianjin) Education Information Consulting Co., Ltd. [•]

(Corporate Seal) (Seal)

[Date] 9 
Question: Highlight the parts (if any) of this contract related to Liquidated Damages that should be reviewed by a lawyer. Details: Does the contract contain a clause that would award either party liquidated damages for breach or a fee upon the termination of a contract (termination fee)?

SOLUTION:
10538