Document:

Promissory Note

 Exhibit 10.1 

THIS PROMISSORY NOTE IS SUBORDINATE TO CERTAIN OBLIGATIONS OF THE COMPANY AS DESCRIBED IN THE BFI LOAN DOCUMENTS (DEFINED HEREIN) AND SUBJECT TO
THAT CERTAIN DEBT SUBORDINATION AGREEMENT DATED MARCH 19, 2010 AMONG BFI BUSINESS FINANCE AND THE HOLDER. 
 THIS PROMISSORY NOTE
HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 
 THIS PROMISSORY NOTE HAS BEEN ISSUED WITH
“ORIGINAL ISSUE DISCOUNT” WITHIN THE MEANING OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. UPON WRITTEN REQUEST, THE COMPANY WILL PROMPTLY MAKE AVAILABLE TO ANY HOLDER OF THIS NOTE THE FOLLOWING INFORMATION:
(1) THE ISSUE PRICE AND DATE OF THE NOTE, (2) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE NOTE AND (3) THE YIELD TO MATURITY OF THE NOTE. TO OBTAIN THIS INFORMATION, A HOLDER SHOULD CONTACT THE CHIEF FINANCIAL OFFICER AT 2070 LAS
PALMAS DRIVE, CARLSBAD, CA 92011. 
 PROMISSORY NOTE 

 

			
	 $1,000,000
	  	October 5, 2010
		  	San Diego, California

FOR VALUE RECEIVED, Orange 21 North America Inc. (formerly known as Spy Optic, Inc.), a California corporation (the
“Company”), promises to pay to the order of Costa Brava Partnership III, L.P., a Delaware limited partnership, or its registered assigns (“Holder”), the principal sum of One Million Dollars ($1,000,000) on
July 29, 2011 (the “Maturity Date”), together with fees and interest thereon as provided in Section 2 of this Note (the “Note”). 

1. Definitions. For purposes of this Note, the following terms shall have the following meanings: 

“Affiliate” shall mean with respect to any Person, any other Person which directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with, such first Person. 
 “BFI Loan
Documents” shall mean the Loan and Security Agreement, dated as of February 26, 2007, between the Company and BFI Business Finance, as modified by the First Modification to Loan and Security Agreement, dated as of December 7,
2007, as further modified by the Second Modification to Loan and Security Agreement dated as of February 12, 2008, and as further modified by the Third Modification to Loan and Security Agreement dated as of June 23, 2008, and the other
Loan Documents as defined therein. 

 “Business” means the business of the Company or its Subsidiaries of
designing, developing, manufacturing and marketing products for the action sports, motorsports and youth lifestyle markets, and related activities, as conducted or proposed to be conducted by the Company or its Subsidiaries on the date hereof and
reasonable extensions thereof. 
 “Business Day” means any day which is not a Saturday or Sunday or a legal
holiday on which national banks are authorized or required to be closed. 
 “Control” shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and
“Controlled” (and the lower-case versions of the same) shall have meanings correlative thereto. 

“Debt” shall mean all liabilities, obligations and indebtedness of every kind and nature of any Person, including,
without limitation: (i) all obligations for borrowed money, including, without limitation, all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments or deferred purchase price of
property; (ii) obligations as lessee under any leases (including under any capital leases); (iii) any reimbursement or other obligations under any performance or surety bonds, any letters of credit and similar instruments issued for the
account of such Person; (iv) all net obligations in respect of any derivative products; (v) all guaranties, endorsements (other than for collection or deposit in the ordinary course of business), and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any other Person, or otherwise to assure a creditor against loss; and (vi) obligations secured by any Lien on property owned by such Person, whether or not the obligations
have been assumed or are limited in recourse. 
 “GAAP” means generally accepted principles of good accounting
practice in the United States, consistently applied. 
 “Governmental Authority” shall mean any federal, state,
local or other governmental department, commission, board, bureau, agency or other instrumentality or authority, domestic or foreign, exercising executive, legislative, judicial, regulatory or administrative authority or functions of or pertaining
to government. 
 “Investment” shall mean, with respect to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of any loan, advance to, guarantee or assumption of Debt of, or purchase or other acquisition or any other debt participation or interest in such Person, any purchase or other acquisition of any capital
stock, debt or other securities of such Person, any capital contribution to such Person in, or any other investment in, or acquisition (in one transaction or a series of transactions) of, any interest or all or substantially all of the property and
assets or business of another Person or assets constituting a business unit, line of business or division of, such Person. 

“Legal Requirement” means any present or future requirement imposed upon the Company or any of its Subsidiaries by any
law, statute, rule, regulation, directive, order, decree or guideline (or any interpretation thereof by courts or of administrative bodies) of the United States of America, or any state, or other political subdivision thereof, or by any board,

 
governmental or administrative agency, central bank or monetary authority of the United States of America or any other jurisdiction in which the Company owns property or conducts its business, or
any political subdivision of any of the foregoing. 
 “Lien” shall mean any security interest, mortgage,
pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory, judgment or other), claim or other priority or preferential arrangement of any kind or nature whatsoever, including any conditional sale or other title retention
agreement, any easement, right of way or other encumbrance on title to real property, and any capital lease having substantially the same economic effect as any of the foregoing (other than a financing statement filed by a lessor in respect of an
operating lease not intended as security). 
 “Material Adverse Effect” shall mean any event, matter, condition
or circumstance which (i) has or would reasonably be expected to have a material adverse effect on the business, properties, operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries, taken as a whole;
(ii) would materially impair the ability of the Company or any other Person to perform or observe their respective obligations under or in respect of this Note; (iii) would materially impair the rights and remedies of Holder under this
Note, or (iv) affects the legality, validity, binding effect or enforceability of this Note. 

“Obligations” shall mean all debts, liabilities, obligations, covenants and duties of the Company howsoever created,
arising or evidenced, whether direct or indirect, joint or several, absolute or contingent, or now or hereafter existing, or due or to become due, which arise out of or in connection with this Note, including, without limitation, all costs and
expenses incurred by Holder in connection with the enforcement of this Note and any interest and fees that accrue to Holder after the commencement by or against the Company of any proceeding under any laws naming the Company as a debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in such proceeding. 
 “Organic
Document” means, relative to any Person, its articles or certificate of incorporation, or certificate of limited partnership or formation, its bylaws, partnership or operating agreement or other organizational documents, and all
stockholders agreements, voting trusts and similar arrangements applicable to any of its capital stock, partnership interests or other ownership interests. 

“Permitted Debt” shall mean (i) Obligations of the Company to Holder hereunder or under any other document related
to or in connection with the Note; (ii) Obligations of the Company under the Promissory Note dated as March 19, 2010 (the “March 2010 Note”), by the Company in favor of Holder and under any other document related to or in
connection therewith; (iii) Debt of the Company under the BFI Loan Documents not to exceed $4,000,0000 at any one time outstanding, or extensions, renewals and refinancings of such Debt, provided that the principal amount of such Debt
being extended, renewed or refinanced under the BFI Loan Documents does not increase and in no case shall the Company be permitted to draw in excess of $4,000,000 at any one time outstanding under the BFI Loan Documents; (iv) Debt of the
Company and any Subsidiary of the Company existing on the date hereof and disclosed to Holder on Schedule A hereto or extensions, renewals and refinancings of such Debt, provided that the principal amount of such Debt being extended,
renewed or refinanced does not increase 

 
and the terms thereof are not modified to impose more burdensome terms upon Company or the relevant Subsidiary; (v) Debt of Orange 21 Europe, S.r.l. (formerly known as Spy Optic, S.r.l.) and
LEM S.r.l. and extensions, renewals and refinancings of such Debt; (vi) accounts payable to trade creditors for goods and services and current operating liabilities (not the result of the borrowing of money) incurred in the ordinary course of
business of Company or any Subsidiary of the Company in accordance with customary terms; (vii) Debt consisting of guarantees resulting from endorsement of negotiable instruments for collection by the Company or a Subsidiary of the Company in
the ordinary course of business; (viii) interest rate swaps, currency swaps and similar financial products entered into or obtained in the ordinary course of business; and (viii) capital leases or other Debt incurred solely to acquire
equipment, computers, software or implement tenant improvements which is secured in accordance with clause (ix) of the definition of “Permitted Liens” and is not in excess of the lesser of the purchase price or the fair market value
of such equipment, computers, software or tenant improvements on the date of acquisition. 
 “Permitted
Investments” shall mean debt obligations maturing within twelve months of the time of acquisition thereof which are accorded a rating of AA- or better by S&P (or an equivalent rating by another recognized credit rating agency of similar
standing), commercial paper with a maturity of 270 calendar days or less which is accorded a rating of A4 or better by S&P (or an equivalent rating by another recognized credit rating agency of similar standing), certificates of deposit maturing
within twelve months of the time of acquisition thereof issued by commercial banks that are accorded a rating by a recognized rating service then in the business of rating commercial banks which is in the first quartile of the rating categories used
by such service, obligations maturing within twelve months of the time of acquisition thereof of any Governmental Authority which obligations from time to time are accorded a rating of BBB or better by S&P (or an equivalent rating by another
recognized credit rating agency of similar standing), and demand deposits, certificates of deposit, bankers acceptance and time deposits (having a tenor of less than one year) of United States banks having total assets in excess of $1,000,000,000.

 “Permitted Liens” shall mean (i) the existing Liens as of the date hereof disclosed to Holder on
Schedule B hereto, or incurred in connection with the extension, renewal or refinancing of the Debt secured by such existing Liens, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing
Lien and the principal amount of the Debt being extended, renewed or refinanced does not increase; (ii) Liens on the assets of Orange 21 Europe, S.r.l. (formerly known as Spy Optic, S.r.1.) and LEM S.r.l. securing Debt permitted by clause
(iv) of the definition of Permitted Debt; (iii) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings and which are adequately reserved
for in accordance with GAAP; (iv) Liens of materialmen, mechanics, warehousemen, carriers or employees or other like Liens arising in the ordinary course of business and securing obligations either not delinquent or being contested in good
faith by appropriate proceedings which are adequately reserved for in accordance with GAAP and which do not in the aggregate materially impair the use or value of the property or risk the loss or forfeiture of title thereto; (v) Liens
consisting of deposits or pledges to secure the payment of worker’s compensation, unemployment insurance or other social security benefits or obligations, or to secure the performance of bids, trade contracts, leases, public or statutory
obligations, surety or appeal 

 
bonds or other obligations of a like nature incurred in the ordinary course of business (other than for Debt or any Liens arising under ERISA); (vi) easements, rights of way, servitudes or
zoning or building restrictions and other minor encumbrances on real property and irregularities in the title to such property which do not in the aggregate materially impair the use or value of such property or risk the loss or forfeiture of title
thereto; (vii) statutory landlord’s Liens under leases to which Company or any of its Subsidiaries is a party; and (viii) Liens (A) upon or in any equipment, computers or software acquired or held by Company or any of its
Subsidiaries or tenant improvements implemented by Company or any of its Subsidiaries to secure the purchase price of such equipment, computers or software or Debt incurred solely for the purpose of financing the acquisition of such equipment,
computers or software or the implementation of such tenant improvements, or (B) existing on such equipment, computers or software at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and
improvements thereon, or the proceeds of such equipment, computers, software or tenant improvements. 

“Person” shall mean an individual, a partnership, a corporation, a limited liability company, an association, a joint
stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof. 

“SEC Reports” shall mean reports, schedules, forms and registration statements, and any amendments thereto, filed with
the Securities and Exchange Commission (the “Commission”) pursuant to the Securities Act of 1933 or Securities Exchange Act of 1934 and the rules and regulations of the Commission promulgated thereunder. 

“Subsidiary” shall mean, with respect to any Person (herein referred to as the “parent”), any corporation,
limited liability company, partnership, association or other business entity (i) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or more than 50% of the
general partnership interests are, at the time any determination is being made, owned, controlled or held by the parent, or (ii) that is, at any time any determination is made, otherwise Controlled by, the parent or one or more Subsidiaries of
the parent and one or more Subsidiaries of the parent. 
 2. Payment of Interest and Fees. 

(a) Interest Generally. Interest shall accrue from the date hereof on a daily basis on the unpaid principal amount
of this Note outstanding from time to time (computed on the basis of actual calendar days elapsed and a year of 365 days) at a rate equal to, from the date hereof through through the Maturity Date, (a) 9% per annum payable in cash monthly in
arrears on the last day of each calendar month, and (b) 3% per annum payable in cash on the Maturity Date. 

(b) Default Interest. Upon the occurrence and during the continuance of any Event of Default, this Note shall bear
interest at a rate per annum equal to 2% plus the rate otherwise applicable to the Note. 

 (c) Fees. On each of December 31, 2010 and the Maturity Date,
the Company shall pay the Holder a facility fee of 0.61% of the original principal amount of this Note. 
 3. Payments.

 (a) Form of Payment. All payments of interest and principal shall be in lawful money of the United
States of America by a check drawn on the account of the Company and sent via overnight courier service to Holder at such address as previously provided to the Company in writing (which address, in the case of Holder as of the date of issuance
hereof, shall initially be the address for Holder as set forth in this Note); provided that Holder may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Company with prior written notice setting out
such request and Holder’s wire transfer instructions. Whenever any payment to be made shall otherwise be due on a day which is not a Business Day, such payment shall be made on the immediately succeeding Business Day and such extension of time
shall be included in the computation of accrued interest. All payments shall be applied first to accrued interest, and thereafter to principal. 

(b) No Set-Off. The Company agrees to make all payments under this Note without set-off or deduction and regardless
of any counterclaim or defense. 
 (c) Prepayment. The Company shall have the right to prepay all amounts
owed under this Note in whole or in part at any time upon five (5) Business Days prior written notice to Holder. 
 4.
Representations and Warranties. The Company hereby makes the following representations and warranties to Holder, which are made and given subject to, and qualified in their entirety by the schedule of exceptions attached hereto as Schedule
C: 
 (a) Organization, Good Standing and Qualification. The Company is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation, and has all requisite power and authority to execute, deliver and perform its obligations under this Note. Each of the Company and its Subsidiaries is qualified
to do business and is in good standing in each jurisdiction in which the failure so to qualify or be in good standing would have a Material Adverse Effect, and has all requisite power and authority to own its assets and carry on its business.

 (b) Corporate Power and Authorization; Consents. The execution, delivery and performance by the Company
of this Note have been duly authorized by all necessary action of the Company and do not and will not (i) contravene the terms of the Company’s Organic Documents; (ii) result in a breach of, or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any lease, instrument, contract or other
agreement to which the Company or any of its Subsidiaries are party or by which they or their properties may be bound or affected; (iii) necessitate the consent, approval, order or authorization of, or registration, qualification, designation,
declaration or filing with, any Governmental Authority or any third party; or (iv) violate any provision of any law, rule, regulation, order, judgment, decree or the like binding on or affecting

 
the Company, except in the case of each of clauses (ii), (iii) and (iv), such as would not result in a Material Adverse Effect. 

(c) Enforceability. This Note constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms 
 (d) Financial Statements and Other Information. Orange
21, Inc., a Delaware corporation and sole owner of the Company (“Parent”), has previously furnished to Holder copies of (i) its audited consolidated financial statements for the fiscal year ended December 31, 2009, including the
balance sheet as of the close of the fiscal year and the income statement for such year, together with a statement of cash flows and (ii) unaudited copies of its consolidated balance sheet, income statement and statement of cash flows as of and
for the six month period ended June 30, 2010 (the “Financial Statements”). The Financial Statements fairly present, in all material respects, in conformity with GAAP (except as may be indicated in the notes thereto), the
financial position of the Company taken as a whole as of the date thereof for the period specified therein (subject to normal year-end adjustments). There are no material liabilities required in accordance with GAAP to be set forth in the Financial
Statements that are not so set forth. Since December 31, 2009, there has been no event or circumstance, either individually or in the aggregate, that has had or would reasonably be expected to have a Material Adverse Effect. All forecasts and
projections that Parent and/or the Company have provided to Holder have been prepared in good faith on the basis of the assumptions stated therein, which assumptions were believed to be reasonable at the time made, it being understood that
projections as to future events are not to be viewed as facts and actual results may vary materially from such forecasts. 

(e) Litigation. There is no action, suit, proceeding or investigation pending or, to the knowledge of Company and
its Subsidiaries, currently threatened against the Company and its Subsidiaries which questions the validity of this Note or any related document or the right of the Company and its Subsidiaries to enter into such agreements, or to consummate the
transactions contemplated hereby or thereby, or which would reasonably be expected to result, either individually or in the aggregate, in any Material Adverse Effect, nor, to the knowledge of the Company, is there any reasonable basis for the
foregoing. The Company and its Subsidiaries are not parties or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality which would reasonably be expected to have a Material
Adverse Effect. There is no material action, suit, proceeding or investigation by Company and its Subsidiaries currently pending or which Company and its Subsidiaries intend to initiate. 

(f) Operations in Conformity With Law, etc. The operations of the Business as conducted by the Company and its
Subsidiaries are not in violation of any Legal Requirement presently in effect, except for such violations and defaults as do not and will not, in the aggregate, result, or create a material risk of resulting, in any Material Adverse Effect. The
Company and its Subsidiaries have not received notice of any such violation or default, and the Company and its Subsidiaries have no knowledge of any reasonable basis on which the operations of the Business as conducted by the Company and its
Subsidiaries would reasonably be expected to violate or to give rise to any such violation or default. 

 (g) Intellectual Property. The Company and its Subsidiaries have
obtained all material patents, trademarks, service marks, trade names, copyrights, licenses and other rights, free from materially burdensome restrictions, that are necessary for the operation of the Business, except for those for which the failure
to obtain is not reasonably likely to have a Material Adverse Effect. The Company and its Subsidiaries have not received or otherwise been made aware of any communications alleging that the Company and its Subsidiaries have violated or, by
conducting the Business, would violate, in any material respect, any patents, trademarks, service marks, trade names, copyrights, trade secrets, information, proprietary rights and processes of any other person or entity used in the conduct of its
Business. 
 (h) Title to Property and Assets. The Company and its Subsidiaries have good and marketable
title to, or valid leasehold interests in or rights to use, all of the material assets and properties used by the Company and its Subsidiaries in the Business (collectively, the “Properties and Facilities”), subject to no Liens
except for the Permitted Liens. Taken as a whole, the Properties and Facilities are in good repair, working order and condition (ordinary wear and tear excepted) and all such assets and properties are owned or leased by the Company and its
Subsidiaries free and clear of all Liens, except for the Permitted Liens, or as otherwise permitted hereunder. The Properties and Facilities constitute all of the material assets, properties and rights of any type used in or necessary for the
conduct of the Business. 
 (i) Tax Returns, Payments and Elections. The Company and its Subsidiaries have
filed all material tax returns and reports (or timely extensions) as required by law relating to any material tax liability of the Company and its Subsidiaries. Such returns and reports are true and correct in all material respects and the Company
and its Subsidiaries have paid all material taxes and other assessments due, except where the validity or amount thereof is being contested in good faith by appropriate proceedings and adequate reserves have been set aside on the Financial
Statements. There are no pending, or to the knowledge of the Company and its Subsidiaries, contemplated reviews, audits or proceedings with respect to any tax return, report or other tax liability of the Company or any of its Subsidiaries, which, in
either case, relates to any material tax liability of the Company or any such Subsidiary. 
 (j) Employment
Matters. The Company and its Subsidiaries have complied in all material respects with all applicable state and federal equal employment opportunity laws and with other laws related to employment, including without limitation all laws relating to
withholding of taxes and other sums. All persons classified by the Company and its Subsidiaries as independent contractors for employee benefit and state and federal tax purposes are appropriately classified, except where the failure to do so would
not reasonably be expected to have a Material Adverse Effect. The Company and its Subsidiaries are not delinquent in material payments to any of its employees, consultants or independent contractors for any wages, salaries, commissions, bonuses or
other direct compensation for any services performed for it to the date hereof, except where such a delinquency would not reasonably be expected to have a Material Adverse Effect. 

(k) Affiliate Arrangements. There are no contractual arrangements or obligations owed to or by the Company and its
Subsidiaries by or to any Affiliate other than this Note and the March 2010 Note and obligations to employees and officers for (i) payment of salary and commissions and bonuses for services rendered, (ii) reimbursement for reasonable

 
expenses incurred on its behalf and (iii) other standard employee benefits made generally available to all employees. 

(l) Permits and Licenses. The Company and its Subsidiaries have all permits, licenses and any similar authority
necessary for the conduct of their Business, the lack of which could reasonably be expected to have a Material Adverse Effect. The Company and its Subsidiaries are not in default in any material respect under any of such permits, licenses or other
similar authority. 
 (m) Customer and Trade Relations. As of the date hereof, there exists no actual or,
to the knowledge of the Company and its Subsidiaries, threatened termination or cancellation of, or any material adverse modification or change in the business relationship of the Company and its Subsidiaries with any customer, supplier or licensor
material to its operations. 
 5. Affirmative Covenants. So long as any indebtedness under this Note remains outstanding,
the Company shall, and shall cause each of its Subsidiaries to: 
 (a) Compliance with Laws. Comply in all
material respects with applicable laws, rules, regulations and orders, such compliance to include, without limitations, paying before the same become delinquent all taxes, assessments, and charges imposed upon it or upon its property by any
Governmental Authority except for good faith contests for which adequate reserves are being maintained. 
 (b)
Insurance. Carry and maintain in full force and effect, at its own expense and with financially sound and reputable insurance companies, insurance in such amounts, with such deductibles and covering such risks as is customarily carried by
companies engaged in the same or similar businesses and owning similar properties in the localities where the Company or any such Subsidiary operates. 

(c) Continuance of Business. Maintain its legal existence, licenses and privileges in good standing under and in
compliance with all applicable laws and continue to operate its business as currently conducted. Without limiting the generality of the foregoing, the Company and its Subsidiaries shall do and cause to be done all things necessary to apply for,
preserve, maintain and keep in full force and effect all of its registrations of trademarks, service marks and other marks, trade names and other trade rights, patents, copyrights and other intellectual property in accordance with prudent business
practices. 
 (d) Maintenance. Conduct its business in a manner consistent with relevant industry
standards, keep its material assets and properties in good working order and condition and make all needful and proper repairs, replacements and improvements thereof so that such business may be properly and prudently conducted at all times.

 (e) Leases. Pay when due all rents and other amounts payable under any leases to which the Company or
any Subsidiary is a party or by which the Company or such Subsidiary’s properties and assets are bound, unless such payments are the subject of a permitted protest. 

 (f) Books and Records. Keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP, reflecting all financial transactions of the Company and any such Subsidiary. 

(g) Inspection. At any reasonable time and from time to time permit Holder or any of its agents or representatives
to visit and inspect any of the properties of the Company and any such Subsidiary and to examine and make copies of and abstracts from the records and books of account of the Company and such Subsidiary, and to discuss the business affairs, finances
and accounts of the Company and such Subsidiary with any of the officers, employees or accountants of such Loan Party and such Subsidiary. The Company hereby irrevocably authorizes all accountants and third parties to disclose and deliver to Holder
at the Company’s expense all financial information, books and records, work papers, management reports and other information in their possession relating to the Company whether verbally, in writing (by record or authenticated record) or
otherwise. 
 (h) Notice of Litigation. Provide to Holder promptly after the filing or commencement
thereof, notice of all actions, suits, and proceedings before any court or Governmental Authority affecting the Company or any such Subsidiary, and in any event within three (3) days after the occurrence thereof, which could have a Material
Adverse Effect. 
 (i) Notice of Material Adverse Effect, Etc. So long as any amount payable hereunder
shall remain unpaid, furnish to Holder: (i) prompt written notice, and in any event within three (3) days after the occurrence thereof, of any other condition or event, which has resulted, or that could reasonably be expected to result, in
a Material Adverse Effect; and (ii) such other statements, lists of property and accounts, budgets, forecasts, projections, reports, or other information respecting the operations, properties, business or condition (financial or otherwise) of
the Company or any Subsidiary as Holder may from time to time reasonably request; provided that any such information shall be kept confidential and will be subject to the terms and conditions of a non-disclosure agreement between the parties.

 (j) Notice of Defaults and Events of Defaults. Provide to Holder, as soon as possible and in any event
within three (3) days after the occurrence thereof, written notice of each event which either (i) is an Event of Default, or (ii) with the giving of notice or lapse of time or both would constitute an Event of Default, in each case
setting forth the details of such event and the action which is proposed to be taken by the Company and any such Subsidiary with respect thereto. 

(k) Taxes. Pay and discharge (i) all federal and other material taxes, fees, assessments and governmental
charges or levies imposed upon it or upon its properties or assets prior to the date on which penalties attach thereto, and all lawful claims for labor, materials and supplies which, if unpaid, might become a Lien upon any of its properties or
assets, except to the extent such taxes, fees, assessments or governmental charges or levies, or such claims, are being contested in good faith by appropriate proceedings and are adequately reserved against in accordance with GAAP; and (ii) all
other lawful claims which, if unpaid, would by law become a Lien upon its property not constituting a Permitted Lien. 

 (l) Governmental Approvals. Promptly obtain and maintain any and all
authorizations, consents, approvals, licenses, franchises, concessions, leases, rulings, permits, certifications, exemptions, filings or registrations by or with any Governmental Authority material and necessary for the Company and any such
Subsidiary to conduct its business and own (or lease) its properties or to execute, deliver and perform this Note. 

(m) Preliminary Annual Financial Statements. If Seth Hamot is no longer a member of Parent’s board of
directors, provide Holder as soon as possible after the end of each fiscal year of the Company, and in any event within sixty (60) days of the end of the Company’s fiscal year, preliminary year end financial statements, including but not
limited to, the balance sheet and income statement for such year. 
 (n) Reviewed Annual Financial
Statements. If Seth Hamot is no longer a member of Parent’s board of directors, provide Holder as soon as possible after the end of each fiscal year of the Company, and in any event within one hundred twenty (120) days of the end of
the Company’s fiscal year: 
 (i) a complete copy of the Company’s financial statements, including but
not limited to (1) the management letter, if any; (2) the balance sheet as of the close of the fiscal year; and (3) the income statement for such year, together with a statement of cash flows, reviewed by a firm of independent
certified public accountants of recognized standing and acceptable to Holder, or if permitted by Holder in writing, by the Company. 

(ii) a statement certified by the chief financial officer of the Company that the Company is in compliance with all the
terms, conditions, covenants, and warranties of this Note; and 
 (iii) a complete copy of all filings required
under securities law. 
 (o) Other Financial Statements. No later than thirty (30) days after the
close of each month (each, an “Accounting Period”), if Seth Hamot is no longer a member of Parent’s board of directors, provide Holder with the balance sheet of the Company as of the close of such Accounting Period and its
income statement for that portion of the then current fiscal year through the end of such Accounting Period certified by the chief financial officer of the Company as being complete, correct, and fairly representing its financial condition and the
results of operations. 
 (p) Tax Returns. If Seth Hamot is no longer a member of Parent’s board of
directors, provide Holder copies of each of the Company’s federal income tax returns, and any amendments thereto, within one hundred twenty (120) days after the end of the Company’s fiscal year. 

(q) Fees and Expenses. Pay the out-of-pocket fees and expenses incurred by Holder in connection with the
preparation and administration of this Note and any amendments, modifications or waivers of the provisions hereof, including attorneys’ fees. Such fees will be indebtedness under this Note, and shall be due and payable on the date hereof and
deducted from the proceeds of this Note. 

 6. Negative Covenants. So long as Obligations under this Note remain outstanding, the
Company shall not, and, with respect to paragraphs (a) through (g) below, shall not permit any of its Subsidiaries to: 

(a) Liens. Create or suffer to exist any Lien on any assets of the Company or any such Subsidiary except Permitted
Liens. 
 (b) Debt. Incur any Debt other than Permitted Debt; prepay, redeem, purchase, defease or
otherwise satisfy in any manner prior to the scheduled repayment thereof any Permitted Debt (other than amounts due or permitted to be prepaid in respect of this Note, the March 2010 Note, and Debt permitted by clause (v) of the definition of
Permitted Debt); or amend, modify or otherwise change the terms of any Permitted Debt (other than this Note, the March 2010 Note, and Debt permitted by clause (v) of the definition of Permitted Debt) so as to accelerate the scheduled repayment
thereof or increase the principal amount of such Permitted Debt. 
 (c) Restrictions on Fundamental
Changes. Enter into any acquisition, merger, consolidation, reorganization, or recapitalization, or reclassify its capital stock, or liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution), become a partner in a
partnership, a member or equityholder of a joint venture, limited liability company or similar entity, or convey, sell, assign, lease, license, transfer, or otherwise dispose of, in one transaction or a series of transactions, all or any substantial
part of its business, property, or assets (including shares of capital stock of the Company or any of its Subsidiaries), whether now owned or hereafter acquired, or acquire by purchase or otherwise all or substantially all of the properties, assets,
stock, or other evidence of beneficial ownership of any Person. 
 (d) Extraordinary Transactions and Disposal
of Assets. Enter into any transaction not in the ordinary course of the Business, including the sale, lease, license, moving, relocation, transfer or other disposition, whether by sale or otherwise, of any of the assets of the Company or its
Subsidiaries except for sales of inventory in the ordinary course of business or except as expressly permitted by this Note. 

(e) Change Name. Change the name of the Company or any of its Subsidiaries, Federal Employer Identification Number,
business structure, or identity, or add any new fictitious name. To that effect, the Company shall not do business under any name other than the correct legal name of the Company and its Subsidiaries, unless the Company has provided to Holder
evidence that Company or such Subsidiary has taken such legal steps required with respect to fictitious or assumed names under the applicable laws of the jurisdictions in which the Company or such Subsidiary is located and/or does business.

 (f) Changes in Business. Enter into or engage in any business other than that carried on (or
contemplated to be carried on) as of the date hereof. 
 (g) Distributions. Declare or pay any dividends
or make any distribution of any kind on the Company’s or any such Subsidiary’s capital stock, or purchase, redeem or otherwise acquire, directly or indirectly, any shares of the Company’s or such Subsidiary’s capital stock, any
rights to acquire shares of capital stock of the Company or such Subsidiary, except for 

 
the repurchase of such securities from former employees of or consultants to the Company or such Subsidiary at the original issue price paid therefor pursuant to contractual rights of the Company
or such Subsidiary upon the termination of such employees’ or consultants’ employment by or provision of service to the Company or such Subsidiary. 

(h) Amendment of Organic Documents. Amend, supplement, or otherwise modify any of the provisions of the Organic
Documents of the Company. 
 (i) Investments. Make any Investments except Permitted Investments.

 (j) Accounting Changes. Change its fiscal year or make or permit any change in accounting policies or
reporting practices, except as required by GAAP. 
 (k) Subsidiaries. Organize, create or acquire any
Subsidiary. 
 (l) Transactions with Affiliates. Directly or indirectly enter into or permit to exist any
material transaction with any of its Affiliates except for transactions that are in the ordinary course of the business of the Company or unanimously approved by the Parent’s board of directors, upon fair and reasonable terms, that are fully
disclosed to Holder prior to the entering of such transactions, and that are no less favorable to the Company than would be obtained in arm’s length transaction with a non-Affiliate. 

(m) Management. Make any significant change in its management without a minimum thirty (30) days’ prior
written notice to Holder. 
 (n) Suspension. Suspend or cease operations with respect to a substantial
portion of its business except as unanimously approved by the Parent’s board of directors. 
 7. Use of Proceeds.
The Company shall use the proceeds from the amounts loaned to the Company under this Note for general working capital and other lawful corporate purposes. 

8. Default. 

(a) Events of Default. For purposes of this Note, any of the following events which shall occur shall constitute an
“Event of Default”: 
 (i) any indebtedness under this Note is not paid when and as the same
shall become due and payable, whether at maturity, by acceleration, five (5) days following notice of prepayment or otherwise; 

(ii) default shall occur in the observance or performance of (A) any covenant, obligation or agreement of the Company
contained in Sections 5 or 6, or (B) any other provision of this Note, and, in the case of this clause (B), such default shall continue uncured for a period of ten (10) days; 

(iii) any representation, warranty or certification made herein by or on behalf of the Company or any of its Subsidiaries
shall prove to have been false or incorrect in 

 
any material respect on the date or dates as of which made (any such falsity being a “Representation Default”); 

(iv) the Company shall (A) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of
itself or any part of its property, (B) become subject to the appointment of a receiver, trustee, custodian or liquidator for itself or any part of its property, (C) make an assignment for the benefit of creditors, (D) fail generally,
become unable or admit in writing to its inability to pay its debts as they become due, (E) institute any proceedings under the United States Bankruptcy Code or any other federal or state bankruptcy, reorganization, receivership, insolvency or
other similar law affecting the rights of creditors generally, or file a petition or answer seeking reorganization or an arrangement with creditors to take advantage of any insolvency law, or file an answer admitting the material allegations of a
bankruptcy, reorganization or insolvency petition filed against it, or (F) become subject to any involuntary proceedings under the United States Bankruptcy Code or any other federal or state bankruptcy, reorganization, receivership, insolvency
or other similar law affecting the rights of creditors generally; 
 (v) the Company shall (i) liquidate,
wind up or dissolve (or suffer any liquidation, wind-up or dissolution), except to the extent expressly permitted by Section 6, (ii) suspend its operations other than in the ordinary course of business, or (iii) take any action to
authorize any of the actions or events set forth above in this Section 8(a)(v); 
 (vi) the Company or any
Subsidiary (i) fails to make any payment beyond the applicable grace period, if any, whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise, (a) under the BFI Loan Documents, (b) under the March 2010
Note or (c) in respect of any Debt (other than the Debt hereunder, the Debt under the BFI Loan Documents and the Debt under the March 2010 Note) having an aggregate outstanding principal amount (individually or in the aggregate with all other
Debt as to which such a failure shall exist) of not less than $5,000, (ii) fails to observe or perform any other agreement or condition relating to (a) the BFI Loan Documents, (b) the March 2010 Note or (c) any such Debt
described in clause (i)(c) above, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of the BFI Loan Documents, the March 2010 Note or any such Debt described in (i)(c) above (or a
trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, the Debt under the BFI Loan Documents, the March 2010 Note or the Debt described in (i)(c) above to become due or
to be repurchased, prepaid, defeased or redeemed (automatically or otherwise); 
 (vii) Parent shall breach the
terms of the Design, Manufacturing and Distribution License between O’Neill Trademark BV as Licensor and Parent as Licensee, or the Trademark Sublicense Agreement by and between Margaritaville Eyewear, LLC as Sublicensor and Parent as
Sublicensee (each, a “License Agreement”), or any other event occurs under or in connection with a License Agreement, the effect of such breach or other event is to cause, or to permit to cause, the licensor under such License
Agreement to terminate the License Agreement or reduce in scope or duration any aspect of the License Agreement; 

(viii) any final judgment or judgments for the payment of money shall be rendered against the Company in excess of $5,000
which judgments are not, within thirty (30)

 
days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within thirty (30) days after the expiration of such stay, other than any judgment which is
covered by insurance or an indemnity from a credit worthy party; provided that the Company provides Holder a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to Holder) to the effect
that such judgment is covered by insurance or an indemnity and the Company will receive the proceeds of such insurance or indemnity within 30 days of the issuance of such judgment; or 

(ix) this Note shall for any reason cease to be, or shall be asserted by the Company not to be, a legal, valid and binding
obligation of the Company. 
 (b) Consequences of Events of Default. 

(i) If any Event of Default shall occur for any reason, whether voluntary or involuntary, and be continuing, Holder may,
upon notice or demand, declare the outstanding Obligations under this Note to be due and payable, whereupon the outstanding Obligations under this Note shall be and become immediately due and payable, and the Company shall immediately pay to Holder
all such Obligations. Upon the occurrence of an actual or deemed entry of an order for relief with respect to the Company under the United States Bankruptcy Code, then all Obligations under this Note shall automatically be due immediately without
notice of any kind. The Company agrees to pay Holder all out-of-pocket costs and expenses incurred by Holder (including attorney’s fees) in connection with the enforcement or protection of its rights in relation to this Agreement, including any
suit, action, claim or other activity of the Holder to collect or otherwise enforce the Obligations under this Note or any portion thereof, or in connection with the transactions contemplated hereby. 

(ii) Holder shall also have any other rights which Holder may have been afforded under any contract or agreement at any
time and any other rights which Holder may have pursuant to applicable law. 
 9. Lost, Stolen, Destroyed or Mutilated
Note. In case this Note shall be mutilated, lost, stolen or destroyed, the Company shall issue a new Note of like date, tenor and denomination and deliver the same in exchange and substitution for and upon surrender and cancellation of such
mutilated Note, or in lieu of this Note being lost, stolen or destroyed, upon receipt of evidence satisfactory to the Company of such loss, theft or destruction. 

10. Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, THE COMPANY (BY ITS EXECUTION
HEREOF) AND THE HOLDER (BY ITS ACCEPTANCE OF THIS NOTE) WAIVES AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION ARISING OUT OF OR BASED
UPON OR RELATING TO THIS NOTE OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. 

 11. Governing Law. This Note shall be deemed to be a contract made under the laws of
the State of New York and for all purposes shall be governed by, construed under, and enforced in accordance with the laws of the State of New York. 

12. Amendment and Waiver. Any term of this Note may be amended and the observance of any term of this Note may be waived (either
generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Holder. 

13. Notices. Any notice or other communication in connection with this Note may be made and is deemed to be given as follows:
(i) if in writing and delivered in person or by courier, on the date when it is delivered; (ii) if by facsimile, when received at the correct number (proof of which shall be an original facsimile transmission confirmation slip or
equivalent); or (iii) if sent by certified or registered mail or the equivalent (return receipt requested), on the date such mail is delivered, unless the date of that delivery is not a Business Day or that communication is delivered on a
Business Day but after the close of business on such Business Day in which case such communication shall be deemed given and effective on the first following Business Day. Any such notice or communication given pursuant to this Note shall be
addressed to the intended recipient at its address or number (which may be changed by either party at any time) specified as follows: 
  

			
	If to the Company:	  	Orange 21 North America, Inc.
		  	2070 Las Palmas Drive
		  	Carlsbad, CA 92011
		  	Facsimile No.: (760) 804-8420
		  	Telephone No.: (760) 804-8421
		  	Attention: Chief Executive Officer
		
	With a copy to:	  	Sheppard, Mullin, Richter & Hampton LLP
		  	12275 El Camino Real, Suite 200
		  	San Diego, CA 92130-2006
		  	Facsimile No.: (858) 509-3691
		  	Attention: John Hentrich, Esq.
		
	If to Holder:	  	Costa Brava Partnership III, L.P.
		  	c/o Roark, Rearden & Hamot, LLC
		  	420 Boylston St, Suite 5-F
		  	Boston, MA 02116
		  	Facsimile No: (617) 267-6785
		  	Attention: Seth W. Hamot, President
		
	With a copy to:	  	Ropes & Gray LLP
		  	One International Place
		  	Boston, MA 02110
		  	Facsimile No: (617) 951-7050
		  	Attention: David A. Fine, Esq. and Jeffrey R. Katz, Esq.

 14. Severability. If at any time any provision of this Note shall be held by any
court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon the legality or enforceability of any other
provision of this Note. 
 15. Assignment. The provisions of this Note shall be binding upon and inure to the benefit of
each of the Company and the Holder and their respective successors and assigns, provided that the Company shall not have the right to assign its rights and obligations hereunder or any interest herein. This Note may be endorsed, assigned and
transferred in whole or in part by the Holder to any other Person. 
 16. Indemnity. The Company agrees to indemnify the
Holder, and its respective directors, officers, employees and agents (each such Person being called an “Indemnitee”) against, and to hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable counsel fees, charges and disbursements, incurred by or asserted against any Indemnitee arising out of in any way connected with, or as a result of (i) the execution or delivery of this Note or any agreement or
instrument contemplated thereby, the performance by the parties thereto of their respective obligations thereunder or the consummation of the transactions contemplated thereby or (ii) any breach by the Company of its obligations under this Note
or any agreement or instrument contemplated thereby. 
 17. Remedies Cumulative; Failure or Indulgence Not a Waiver. The
remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note. No failure or delay on the part of Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. 

18. Excessive Interest. Notwithstanding any other provision herein to the contrary, this Note is hereby expressly limited so that
the interest rate charged hereunder shall at no time exceed the maximum rate permitted by applicable law. If, for any circumstance whatsoever, the interest rate charged exceeds the maximum rate permitted by applicable law, the interest rate shall be
reduced to the maximum rate permitted, and if Holder shall have received an amount that would cause the interest rate charged to be in excess of the maximum rate permitted, such amount that would be excessive interest shall be applied to the
reduction of the principal amount owing hereunder (without charge for prepayment) and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal, such excess shall be refunded to the Company. 

Further, notwithstanding any other provision herein to the contrary, and without any further action from the parties to this Note, if the
fees (except with respect to paragraph 16) and interest charged hereunder shall be determined by a court of competent jurisdiction to be a “financial benefit” for purposes of 8 § 203(c)(v) of the General Corporation Law of the State
of Delaware, this Note shall be deemed amended to eliminate such fees and reduce such interest rate to 0%. If Holder shall have received any such fees or interest, such amounts shall be applied to the reduction of the principal amount owing
hereunder (without charge for prepayment), or if 

 
such fees and interest paid to the Holder exceed the unpaid balance of principal, such excess shall be refunded to the Company. 

19. Registered Obligation. The Company shall establish and maintain a record of ownership (the “Register”) in
which it will register by book entry the interest of the initial Holder and of each subsequent assignee in this Note, and in the right to receive any payments of principal and interest or any other payments hereunder, and any assignment of any such
interest. The Company shall make appropriate entries in the Register to reflect any assignment promptly following receipt of written notice from the assignor of such assignment. Notwithstanding anything herein to the contrary, this Note is intended
to be treated as a registered obligation for federal income tax purposes and the right, title, and interest of the Holder and its assignees in and to payments under this Note shall be transferable only upon notation of such transfer in the Register.
This Section shall be construed so that the Note is at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Internal Revenue Code and any related regulations (or any successor
provisions of the Code or such regulations). 
 20. Entire Agreement. This Note contains the entire understanding of the
parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, discussions and representations, oral or written, with respect to such matters, which the parties acknowledge have been merged into this Note.

 21. Waiver of Notice. To the extent permitted by law, the Company hereby waives demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note. 
 22.
Subordination. This Promissory Note and each of Holder’s rights and privileges hereunder is expressly subject to the terms of that certain Debt Subordination Agreement by and between BFI Business Finance and Holder dated the date hereof.

 [Remainder of Page Intentionally Left Blank] 

 IN WITNESS WHEREOF, the each of the undersigned has caused this Note to be duly executed by
its officers, thereunto duly authorized as of the date first above written. 
  

			
	THE COMPANY:
	
	ORANGE 21 NORTH AMERICA INC.
		
	By:	 	/s/ A. Stone Douglass
	Name:	 	A. Stone Douglass
	Title:	 	Chief Executive OfficerMaster Laboratory Services Agreement, dated in March 2008

 Exhibit 10.6 

CONFIDENTIAL TREATMENT 

REQUESTED PURSUANT TO RULE 406 

Master Laboratory Services Agreement 
  

 
 Introduction and Scope 

 
 Section 1. Parties; Defined Terms

  

	 	1.1	This is an agreement between Eli Lilly and Company, Lilly Corporate Center, Indianapolis, IN 46825, (“Lilly”) and Shanghai ChemPartner Co., Ltd., Building #3,
720 Cailun Road, Zhangjiang Hi-Tech Park, Pudong New Area, Shanghai, People Republic of China, 201203 (“ChemPartner”). 

  

	 	1.2	Other capitalized terms are defined in Exhibit A. 

Section 2. Scope of Agreement 
  

	 	2.1	Projects. From time to time during the term of the Master Agreement, ChemPartner and Lilly may execute Work Orders that are consistent with Exhibit B for
Projects comprising the types of laboratory services listed below. Except to the extent the parties agree to particular Work Orders, nothing about the Agreement requires ChemPartner to furnish, or Lilly to request ChemPartner to furnish, any
particular services or deliverables or any particular quantity of services or deliverables. 

  

	 	2.1.1	* 

  

	 	2.1.2	* 

  

	 	2.1.3	* 

  

	 	2.1.4	* 

  

	 	2.1.5	* 

  

	 	2.2	Manner of Executing Work Orders. Lilly may from time to time request ChemPartner to prepare and submit a proposed Work Order signed by ChemPartner. Should it
choose to comply, ChemPartner/bears the expense of preparing and submitting the proposal. A proposed Work Order becomes part of the Agreement only if Lilly accepts it by: 

 

	 	2.2.1	Signing the proposed Work Order (or an identical counterpart). Lilly may then issue a purchase order/solely for administrative purposes. If so, neither the terms and
conditions of the purchase order nor anything else about it affect the agreed Work Order. 

  

	 	2.2.2	Issuing its standard form of purchase order solely for the purpose of accepting the proposed Work Order without revision. Neither the terms and conditions of the
purchase order nor anything else about it affects the proposed Work Order. 

  

	 	2.3	 Term of Master Agreement. The term of the Master Agreement is from March 1, 2008 through
June 30th 2011, unless it is cancelled or terminated
earlier. Nonetheless, if any Work Orders are in effect on the day the Master Agreement would otherwise expire, the Master Agreement remains in effect solely for the purpose of those Work Orders (and not for the purpose of executing new Work Orders)
until their expiration, cancellation, or termination. 

  

	 	2.4	Term of Work Orders. Each Work Order takes effect and expires according to the Project Specifications, unless it is cancelled or terminated earlier. If the
Project Specifications do not state when the Work Order takes effect, it takes effect when Lilly accepts ChemPartner’s proposal. If no expiration date is specified, the Work Order expires when the Project is complete. Any individual Work Order
may be cancelled or terminated independently of the rest of the Agreement, with any provision of the Agreement relevant to termination or cancellation apply only to that Work Order. Cancellation or termination of the Master Agreement cancels or
terminates all Work Orders. 

  

	*	Indicates where text has been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. The omitted materials
have been filed separately with the Securities and Exchange Commission. 

  

 Page 1 of 26 

	 	2.5	Inconsistencies Between Master Agreement and Work Order. If the terms of the Master Agreement are inconsistent with the terms of the Work Order, the Master
Agreement controls unless: 

  

	 	2.5.1	the Master Agreement expressly allows a Work Order to supersede the inconsistent term and; 

 

	 	2.5.2	the Work Order clearly expresses the parties’ intent to do so. 

  

 
 ChemPartner’s Rights and Obligations 

  
 Section 3. ChemPartner’s
General Obligations 
  

	 	3.1	ChemPartner will furnish Lilly all Services and Deliverables described by the Project Specifications and will provide everything it needs to furnish such Services and
Deliverables except for those responsibilities the Project Specifications expressly assign to Lilly. 

  

	 	3.2	Upon expiration, notice of termination or notice of cancellation of this Agreement and request by Lilly, ChemPartner will cooperate in transferring ChemPartner’s
obligations and any work in progress to another supplier. 

 Section 4. Warranties 

 

	 	4.1	ChemPartner warrants that: 

  

	 	4.1.1	ChemPartner’s performance under this Agreement (including all Services, Deliverables, Work Product and ChemPartner’s employment practices) complies with all
Applicable Law. 

  

	 	4.1.2	Services will be rendered with at least that degree of skill and knowledge normally possessed and employed by members of the relevant trade or profession in good
standing in the United States of America. 

  

	 	4.1.3	The Services, Deliverables, and Work Product do not infringe any Intellectual Property Rights of any other Person, and any use thereof by Lilly consistent with this
Agreement does not infringe such rights; however, this warranty does not extend to any substances, processes, methods, information, or written materials furnished by Lilly and used in accordance with Lilly’s instructions in performing the
Services or incorporated into the Deliverables or Work Product in accordance with Lilly’s instructions. 

  

	 	4.2	Without limiting any other representations or warranties in this Agreement, ChemPartner disclaims any and all implied warranties of merchantability and of fitness for a
particular purpose. 

 Section 5. Customs-Trade Partnership Against Terrorism (C-TPAT) 

 

	 	5.1	As a participant in the U.S. Department of Homeland Security’s Customs-Trade Partnership Against Terrorsim (or “C-TPAT”), Lilly takes measures to
secure its supply chains against acts of terrorism, including an assessment of the security practices of its suppliers using the C-TPAT Security Criteria established by the United States Department of Homeland Security, available at
http://supplierportal.lilly.com or http://www.customs.gov. ChemPartner will take measures consistent with the C-TPAT Security Criteria to ensure the security of the supply chain for all articles shipped to Lilly by way of importation
into the United States. ChemPartner will cooperate with Lilly’s measures to implement C-TPAT, for example by completing and updating questionnaires that Lilly uses to assess the security practices of its suppliers, by informing Lilly of any
breaches of the security of the supply chain for articles shipped to Lilly, and by assisting Lilly in assessing and evaluating ChemPartner’s security practices. 

 

 Page 2 of 26 

 Section 6. ChemPartner’s Invoices 

 

	 	6.1	Timing. 

  

	 	6.1.1	ChemPartner will submit invoices for hourly fees and for reimbursement of expenses once a month. 

 

	 	6.1.2	ChemPartner will submit invoices for an advanced payment, a part of fixed fees to initiate the services, or submit invoices for fixed fees after Lilly has received and
accepted all Services and Deliverables subject to the fixed fee. 

  

	 	6.2	Invoices. Each invoice submitted by ChemPartner must comply with Lilly’s standard forms and procedures (as changed from time to time) and published on the
interact at http://supplierportal.lilly.com and with any specific requirements in this Agreement. Each invoice will be accompanied by: 

  

	 	6.2.1	Reference to Work Order and associated purchase order number. 

  

	 	6.2.2	Any additional information that Lilly may reasonably request. 

  

	 	6.3	Currency. Invoices will be in United States dollars and payment will be in United States dollars. 

Section 7. Safety and Security at Lilly’s Facilities 
  

	 	7.1	ChemPartner will comply with, and will cause its Affiliates, Subcontractors, and their respective Representatives to comply with, all policies and procedures that Lilly
establishes to enhance the safely or security of Lilly’s facilities or of persons at or near Lilly’s facilities, including measures restricting access such as the use of identification badges and passwords. ChemPartner will promptly notify
Lilly of any violation of such policies and procedures by any of the Persons listed in the preceding sentence. 

  

	 	7.2	ChemPartner will comply with, and will cause its Affiliates, Subcontractors, and their respective Representatives to comply with, the instructions of a Lilly security
official that are reasonably necessary to redress a threat, or to avoid an imminent threat, to the safety or security of such facilities or persons. 

Section 8. Debarment and Exclusion from Certain Health Care Programs 

 

	 	8.1	ChemPartner represents that it has not been 

  

	 	8.1.1	Debarred by the United States Food and Drug Administration under any provision of the Generic Drug Enforcement Act or 

 

	 	8.1.2	Excluded by the Office of the Inspector General of the United States Department of Health and Human Services, or by any other authority, from participating in any
health care program (such as Medicare or Medicaid) funded by any Governmental Authority. 

  

	 	8.2	ChemPartner agrees that no Person who has been debarred or excluded as described above will furnish any of the Services or Deliverables or perform any of
ChemPartner’s other obligations under the Agreement. 

  

 Page 3 of 26 

	 	8.3	ChemPartner will immediately notify Lilly in writing (with a copy to Lilly’s legal counsel) of any actions taken or proceeding pending that threatens or confirms a
debarment or exclusion of any such Person. 

 Section 9. Section 9 Care of Animals 

 

	 	9.1	ChemPartner will comply with the applicable requirements of Exhibit E for all animals that ChemPartner or its Subcontractors either: 

 

	 	9.1.1	Supply to Lilly for use in research; or 

  

	 	9.1.2	Use in animal studies that are conducted for the purpose of providing the Services or Deliverables. 

 

	 	9.2	To avoid misunderstanding, ChemPartner acknowledges that the requirements of this Section 9 are in addition to (and neither limit nor are limited by) its other
obligations under the Agreement, including its obligations to comply with Applicable Law and to satisfy the Project Specifications. 

  

 
 Lilly’s Rights and Obligations

  
 Section 10. Lilly’s
General Obligations 
  

	 	10.1	Lilly will pay ChemPartner the Compensation according to the terms of this Agreement. Lilly will owe ChemPartner no compensation other than that described in this
Section, whether for time of staff, labor, materials, expenses, overhead, profit, taxes, insurance, or other costs of furnishing the Services and Deliverables. 

 

	 	10.2	Lilly will perform any obligations expressly assigned to it in the Project Specifications or elsewhere in the Agreement. 

Section 11. Payment 
  

	 	11.1	Payment Terms. Payment will be due* days after Lilly’s Accounts Payable Department receives an invoice that complies with the requirements of this
Agreement, except that Lilly may withhold payment of any amount that it may reasonably dispute in good faith until such dispute is resolved. 

Section 12. Access to Lilly’s Facilities and Information Systems 

 

	 	12.1	Lilly retains its right to restrict or refuse any Person (including ChemPartner, its Affiliates, its Subcontractors, and their respective Representatives) access to
Lilly’s facilities, computers, or other information systems. 

  

	 	12.2	In particular, but not in limitation of the preceding Section, Lilly may restrict or refuse access to any individual who does not do any of the following to
Lilly’s satisfaction. 

  

	 	12.2.1	Submit to and pass a drug screen. 

  

	 	12.2.2	Pass a background check. 

  

	 	12.2.3	Accept or acknowledge in writing a personal obligation to protect Lilly’s Confidential Information. 

 

	*	Indicates where text has been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. The omitted materials
have been filed separately with the Securities and Exchange Commission. 

  

 Page 4 of 26 

	 	12.3	Such restriction or refusal excuses ChemPartner’s performance under this Agreement only if it renders ChemPartner’s performance impracticable, does not
comport with Lilly’s written procedures, and is manifestly unreasonable. 

 Section 13. Lilly’s Right to Cancel

  

	 	13.1	Lilly may cancel this Agreement for any reason including convenience by written notice to ChemPartner. Cancellation will be effective ninety (90) days after
ChemPartner receives the notice or on a later date if the notice so specifies. 

  

	 	13.2	In the event of such cancellation, Lilly’s obligation to compensate ChemPartner is reduced to the portion of the Compensation corresponding to Services and
Deliverables properly furnished prior to cancellation, with the calculation of the amount of the reduction consistent with the provisions of this Agreement establishing the amount of Compensation. 

 
  

Information and Property Rights 
  

Section 14. Ownership of Inventions, Work Product, and Deliverables 

 

	 	14.1	(a) Ownership in Lilly. Subject to the terms and conditions of this Agreement (including the provisions of any applicable Work Order), all Inventions, excluding
any ChemPartner Prior Rights, that are developed, generated, discovered, evolved or derived by ChemPartner in relation to a Work Plan undertaken by ChemPartner under this Agreement (the “Inventions”) shall be assigned to Lilly. Lilly shall
be the sole and exclusive owner of any and all information, items, material and knowledge relating to a Invention that is either: (i) disclosed (orally, in writing, electronically, by observation or otherwise) to ChemPartner from Lilly under
this Agreement or (ii) acquired, generated, developed, discovered, evolved or derived by ChemPartner (solely or jointly with Lilly) as a result of the Work Order or Project performed by ChemPartner under this Agreement, including all Lilly
Confidential Information as defined in Exhibit A. In order to ensure that Lilly’s sole ownership interest in Inventions is fully vested in Lilly, ChemPartner shall promptly after the conception, discovery, invention and/or development of any
material Inventions notify Lilly thereof and cooperate with Lilly in taking all steps which Lilly believes reasonably necessary or desirable to secure its ownership rights in such Inventions including cooperation in completing any patent
applications relating to such Inventions, as well as executing and delivering any instrument that may be reasonably useful or required to confirm the ownership in Lilly, or assign, convey and transfer to Lilly any ownership interest, if any, that
ChemPartner may have in such Inventions. Moreover, promptly after the conception, discovery, invention and/or development of material Inventions, ChemPartner shall, to the extent not already in Lilly’s possession, furnish to Lilly all
information, items, material and knowledge encompassed in such Inventions together with any other information, items, material and knowledge that is reasonably useful or necessary for Lilly to exploit its sole ownership interest in such Inventions.

 (b) Assignment of Inventions. ChemPartner acknowledges and agrees that (a) the development,
generation, discovery, evolution or creation of such Invention is sponsored by and will be assigned to Lilly, (b) responsibility for patenting such Invention is borne by Lilly, and (c) Lilly is the exclusive holder of all rights in such
Invention worldwide. ChemPartner further acknowledges and agrees that ChemPartner has no right to, and will not, directly or indirectly, reproduce, adapt, modify, create derivative works from, manufacture, market, introduce into circulation,
publish, distribute, sell, license, sublicense, transfer, rent, lease, transmit or provide access electronically, broadcast, display, enter into computer memory, or use such Invention, any portion or copy thereof in any form, or any such rights, or
authorize or assign others to do so, except as explicitly provided in this Agreement or as otherwise agreed in writing by Lilly. ChemPartner has no right to, and shall not directly or indirectly, apply to register any copyright, trademark, patent,
title, or other intellectual property rights in or related to the Invention, in the People’s Republic of China or any country or region throughout the world, unless requested in writing to do so by Lilly. 

 

 Page 5 of 26 

 During the term of this Agreement, ChemPartner shall promptly disclose to Lilly all
material Inventions developed, generated, discovered, evolved or created by or vested in ChemPartner. If and to the extent that Lilly does not originally acquire full legal and beneficial interest to any Invention pursuant to Section 14.1(a) of
this Agreement, ChemPartner shall and hereby does in advance assign to Lilly such right and interest, therein, and shall take all other steps and execute all other documents, including under the import/export control regulations (e.g., the
Regulations of the People’s Republic of China on Technology Import and Export Administration), which may be necessary in order to give full force and effect to the provisions of this Article. The provisions of the preceding sentence apply inter
alia to patent application rights vesting in or assigned to ChemPartner pursuant to the provisions of the Patent Law of the People’s Republic of China or to contracts entered into by ChemPartner with employees and permitted contractors. Lilly
shall have the sole discretion to apply for patents in any jurisdiction for any patentable subject matter comprising or contained in any Invention, and ChemPartner shall assist and shall procure the assistance of its current and former employees and
permitted contractors in the prosecution of any such patent applications. If, by operation of law, ChemPartner is unable to assign such rights to Lilly or such assignment is not approved or registered (as applicable) by a government authority,
ChemPartner grants to Lilly, its successors and assigns, an exclusive (without ChemPartner retaining any rights), irrevocable, worldwide, paid-up license to use, reproduce, adapt, modify, create derivative works from manufacture, market, introduce
into circulation, publish, distribute, sell, offer to sell, import, license, sublicense, transfer, rent, lease, transmit or provide access electronically, broadcast, display, enter into computer memory, and use the Invention, all modified and
derivative Invention thereof, all portions and copies thereof in any form. Ancillary rights such as the right to sue on behalf of the patent owner, to reissue or reexamine the patent, to pay maintenance fees, to revoke or abandon the patent, to
obtain patent term extensions, supplementary protection certificates and the like shall also be included in the terms of the exclusive license granted to Lilly. 

(c) Assignment from Employees. In respect of each ChemPartner employee who is or will be assigned to a Work Order or Project and
to the extent required under the laws of the People’s Republic of China, ChemPartner agrees to obtain an assignment from such employee to ChemPartner by agreement between ChemPartner and such employee, and to negotiate and resolve, through
disclaimer or waiver, any rights such employee might have, including securing a waiver of any ChemPartner employee-inventor’s right to first assignment to service invention-creation (or Invention) pursuant to “Implementing Rules for
Ownership Rights to Invention-Creation and Service Remuneration in Shanghai Municipality”(effective as of April 29, 2007), in respect of any Invention developed, generated, discovered, evolved or derived hereunder, including any rights to
any reward or remuneration related to his or her contribution to such Invention or to ChemPartner’s assignment thereof, and any pre-emptive right to the assignment of such Invention. ChemPartner further agrees to assign to Lilly all rights in
such Invention. ChemPartner shall hold Lilly harmless from any claim from any of ChemPartner’s employees in relation to any reward or remuneration related to such employee’s contribution to such Invention or employee’s assignment
thereof to the ChemPartner, and ChemPartner shall not claim any other reimbursement, compensation or payment for any reason, other than the fees that Lilly has expressly agreed to pay ChemPartner under this Agreement. 

 

	 	14.2	Procedural Safeguard Restrictions to Protect Confidentiality and Invention Ownership. ChemPartner shall require each of its employees and permitted independent
Subcontractors performing Services to execute and deliver written agreements embodying confidentiality and non-use restrictions and assignment of intellectual property covenants in such form and substance as is reasonably acceptable to Lilly. In
addition, during the term of any applicable Work Order under this Agreement, ChemPartner agrees not to engage either itself or with or for a third party in any research efforts with respect to any drug target that is or has been the subject of
Project without Lilly’s prior written consent, which consent shall not be unreasonably withheld. 

  

 Page 6 of 26 

	 	14.3	Security. As a means reasonably designed to protect Lilly’s rights and otherwise to ensure such ChemPartner’s compliance with its respective
obligations set forth in Section 7 and Section 12 of this Agreement, ChemPartner agrees to maintain reasonable security measures to ensure the protection, secrecy and confidentiality of all Lilly Confidential Information and Inventions. To
that end, in addition to other customary security measures taken by ChernPartner, ChemPartner shall: (i) appropriately partition all Lilly Projects from any other work performed by ChemPartner, either for its own account or for third parties;
and (ii) maintain information technology systems that are compatible with Lilly’s information technology systems and that ensure confidential communications between ChemPartner and Lilly, as well as the confidential transfer of data
between ChemPartner and Lilly. 

  

	 	14.4	Ownership of Lilly Data. Lilly Data is and shall remain the exclusive property of Lilly and/or its Affiliates, as applicable. ChemPartner will not possess or
assert any lien or other right against or to Lilly Data. The Lilly Data shall be used by ChemPartner solely as specified in this Agreement and then only in connection with providing the Services set forth in this Agreement. ChemPartner shall protect
the proprietary nature of Lilly Data and shall in no way, directly or indirectly, disclose Lilly Data or allow third party access to Lilly Data. ChemPartner shall in no way, directly or indirectly, commercially exploit Lilly Data.

  

	 	14.4.1	Upon expiration or other termination of this Agreement, or upon request of Lilly, ChemPartner agrees to remove all copies and instances of Lilly Data from
ChemPartner’s systems and files, and at Lilly’s discretion either promptly return all Lilly Data to Lilly or destroy the Lilly Data in its possession, and certify to the same. 

 

	 	14.4.2	ChemPartner acknowledges that the Lilly Data may contain personal data, health data and/or medical records data, the use of which data is subject to various privacy
laws, including all state, federal and international laws and regulations and state, federal and national government agency orders and decrees to which Lilly may be subject (“Privacy Laws”), as well as certain restrictions imposed on the
Lilly Data by the data subjects or other third party data providers. Any such Lilly Data containing personal data, health data and/or medical records data that is subject to various privacy laws shall be a Trade Secret for purposes of this
Agreement, whether separately designated as such or not. ChemPartner agrees to strictly abide by all such restrictions pertaining to the Lilly Data, as they are promulgated and applied, currently and in the future. Furthermore, ChemPartner shall in
good faith execute any and all documents that Lilly is required to have ChemPartner execute in order that Lilly may comply with any Privacy Laws. If ChemPartner’s use (whether directly or indirectly) of the Lilly Data is contrary to any Privacy
Law, or contrary to any of the restrictions set forth in this Agreement, Lilly shall have the right to: i) terminate this Agreement for cause if such breach has not been cured within five (5) days of receipt by ChemPartner of written notice,
and ii) pursue any other legal and equitable remedies. 

  

	 	14.4.3	ChemPartner represents and warrants that it will only transfer (including internal ChemPartner transfers that occur beyond the internal firewalls of ChemPartner) Lilly
Data in a secure and confidential mariner, including at a minimum, encrypting the data with no less than 128 bit encryption or through establishing a virtual private network with Lilly. 

 

	 	14.4.4	ChemPartner will, and will cause ChemPartner’s Subcontractors and CheinPartner Affiliates to, maintain reasonable and adequate security measures to ensure
protection, secrecy and confidentiality of all Confidential Information, including but not limited to, Lilly Data, and cooperate fully in resolving any actual or suspected acquisition or misuse of Lilly Data. 

 

 Page 7 of 26 

 Section 15. Lilly’s Property in ChemPartner’s Possession 

 

	 	15.1	In the course of their relationship under this Agreement, ChemPartner may have Lilly’s Property in its possession. ChemPartner will retain Lilly’s Property
and will exercise appropriate care toward it to protect against damage, destruction, loss, unauthorized use, or unauthorized disclosure, but in no event will ChemPartner exercise a lower degree of care in safeguarding Lilly’s Property than
ChemPartner uses in safeguarding its own Property of a similar nature. 

  

	 	15.2	ChemPartner will neither encumber Lilly’s Property nor use it for any purpose other than the performance of its obligations under this Agreement.

  

	 	15.3	ChemPartner will promptly notify Lilly of any loss or damage to Lilly’s Property in its possession. 

 

	 	15.4	ChemPartner will neither dispose of Lilly’s property nor transfer possession of it to anyone else except in accordance with this Agreement. ChemPartner will follow
Lilly’s written instructions for disposition of any of Lilly’s Property (including Records that are Lilly’s Property) in ChemPartner’s possession. Such disposition may include destruction, delivery to Lilly, or delivery to
another destination of Lilly’s choosing. For the purpose of Electronic Records, “delivery” includes an electronic transmission of the Record or the delivery of the Record stored on an appropriate physical medium; and
“destruction” includes the destruction of the physical medium on which a Record is stored or the complete and permanent removal of a Record from its storage medium. 

 

	 	15.5	If Lilly does not furnish written instructions for the disposition of its Property within a reasonable period of time after expiration, termination, or cancellation of
the Agreement, ChemPartner will deliver to Lilly all of Lilly’s Property in its possession and will destroy ally residual Electronic Records that are Lilly’s Property. 

Section 16. Laboratory Samples 
  

	 	16.1	For the purpose of this Section, “laboratory samples” means any compound, substance, or mixture of compounds or substances (and any derivative of such a
compound, substance, or mixture of compounds or substances) 

  

	 	16.1.1	that Lilly furnishes ChemPartner for any purpose related to the Agreement (such as research compounds, reference standards, reagents, or specimens) or

  

	 	16.1.2	that ChemPartner creates as a result of performing the Services or Lilly. 

  

	 	16.2	Lilly will be the sole owner of any and all laboratory samples. 

  

	 	16.3	ChemPartner will dispose of any waste generated from ChemPartner’s possession of the laboratory samples in accordance with Applicable Law and the other provisions
of the Agreement. 

  

	 	16.4	To avoid misunderstanding, ChemPartner acknowledges that 

  

	 	16.4.1	All laboratory samples in the possession of ChemPartner are subject to the provisions of Section 15. 

 

	 	16.4.2	Information regarding the laboratory samples (including the identity, description, and properties of any laboratory samples and any information that ChemPartner
acquires from its processing, study, use, or handling of the laboratory samples) is Lilly’s Confidential Information, provided it satisfies the definition of Confidential Information. 

 

 Page 8 of 26 

 Section 17. Lilly’s Confidential Information 

 

	 	17.1	“Confidential Information” means any and all information, items, material or knowledge (whether or not patentable) including, without limitation, any and all
suggestions, descriptions, ideas, inventions (whether or not patentable) discoveries, know-how, Trade Secrets, techniques, data, results, strategies, methods, syntheses, processes, practices, skill, experience, documents, apparatus, devices,
chemical formulations, compounds, composition of matter, chemical or biological samples, assays, cell lines, vectors, screens, databases, database structures and data, analysis, methods, chemical synthesis or process data that is: (i) disclosed
to ChemPartner from Lilly or any agent of Lilly (including, without limitation, acquired by ChemPartner through observation at Lilly’s facilities) during the term of this Agreement or (ii) acquired, generated, developed, discovered,
evolved or derived by ChemPartner (solely or jointly with Lilly) as a result of the Services. 

 “Trade
Secret” shall mean any technical or business information including, without limitation, technical or non-technical data, a formula pattern, compilation, program, device, method, technique, drawing, process, financial data, or list of actual or
potential customers or suppliers which: (i) derives economic value, actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy or confidentiality. The Parties hereby agree that in the absence of clear and convincing evidence to the contrary, that any Confidential Information shall be presumed to be a Trade Secret.
ChemPartner shall not: 
  

	 	17.1.1	disclose Lilly’s Confidential Information except as authorized below or by Lilly in writing; nor 

 

	 	17.1.2	use Lilly’s Confidential Information for any purpose other than the purpose of this Agreement. 

 

	 	17.1.3	disclose Lilly’s Trade Secrets except with only its Representatives who must need to know the information for the sole purpose of this Agreement.

  

	 	17.2	ChemPartner may disclose Lilly’s Confidential Information: 

  

	 	17.2.1	To its Representatives and to its Affiliates, Subcontractors, and their respective Representatives who need to know the information for the purpose of this Agreement
and who have contractual confidentiality obligations that prohibit any disclosure and use of Lilly’s Confidential Information under this Agreement. ChemPartner shall be responsible to Lilly for any unauthorized disclosure or use of Lilly’s
Confidential Information by ChemPartner’s Representatives. 

  

	 	17.3	Promptly upon termination, expiration, or cancellation of this Agreement, ChemPartner will destroy all Records of Lilly’s Confidential Information in
ChemPartner’s possession or control that are not Lilly’s Property. (Such Records that are Lilly’s Property are addressed in Section 15.) For the purpose of Electronic Records, “destroy” includes destroying the physical
medium on which a Record is stored or completely and permanently removing a Record from its storage medium. 

  

	 	17.4	The restrictions on disclosure and use of Lilly’s Confidential Information survive for ten (10) years after expiration, termination, or cancellation of this
Agreement or after ChemPartner returns or destroys all Records of the relevant Confidential Information in its possession or control, whichever is later. The foregoing notwithstanding, the restrictions on prohibition or use of Lilly’s Trade
Secrets survive for as long as the information satisfies the definition of Trade Secret. 

  

 Page 9 of 26 

 Section 18. Records and Audits 

 

	 	18.1	Records That Must Be Created and Maintained. At its own expense, ChemPartner will create and maintain all Records: (i) required by this Agreement and
Applicable Law that relate to this Agreement and to ChemPartner’s performance under this Agreement; (ii) sufficient to demonstrate that any and all amounts invoiced to Lilly under this Agreement are accurate and proper in both kind and
amount; (iii) sufficient to demonstrate the accuracy of any representations or reports submitted to Lilly under this Agreement; and (iv) sufficient to enable Lilly to comply with Applicable Laws and other legal obligations, to the extent
that ChemPartner has or reasonably should have knowledge of those Applicable Laws and other legal obligations. 

  

	 	18.2	Record Retention Periods. ChemPartner will maintain all of the Records listed above for the longest of the following retention periods that applies: (i) any
period prescribed by Applicable law or stated expressly in this Agreement; (ii) for Records related to invoices, for three (3) years after payment of the invoice by Lilly; (iii) for Records related to reports submitted to Lilly, for
three (3) years after the report is submitted; and (iv) for all Records not addressed by one of the above, for three (3) years after the term of this Agreement. 

 

	 	18.3	Access to Records. At no additional cost to Lilly, ChemPartner will allow Lilly to inspect (and, upon request, ChemPartner will furnish copies of) Records
ChemPartner is required to create or maintain under this Agreement for the purposes of evaluating and verifying: (i) compliance with the requirements of this Agreement; (ii) compliance with Applicable Law related to this Agreement or to
ChemPartner’s performance under this Agreement; (iii) the accuracy and propriety of any invoice submitted to Lilly; and (iv) the accuracy of any representations or reports submitted to Lilly. 

 

	 	18.4	Access to Facilities. At reasonable times and with reasonable advance notice, Lilly may enter and inspect any premises where Records are maintained or Services
are performed as Lilly deems necessary to accomplish the evaluations and verifications described in the preceding Section, Access to Records. ChemPartner will cooperate with Lilly and provide reasonable assistance to Lilly to facilitate the
evaluation and inspection, and Lilly will reasonably cooperate with ChemPartner to mitigate disruption to ChemPartner’s operations. In the event that Records are maintained, Services are performed, or Lilly’s Property is kept at premises
that ChemPartner does not control, ChemPartner will secure rights of entry and inspection sufficient to allow Lilly to exercise its rights under this Section. 

 

	 	18.5	Lilly Employees and Designees. Lilly, its employees, or designees may exercise Lilly’s rights of entrance and inspection under this Section. Examples of
Persons that Lilly may designate include Lilly’s independent auditors and representatives of Government Authorities having jurisdiction over Lilly or its activities related to this Agreement. 

 

	 	18.6	Records Generated Electronically. For Records generated by Electronic databases, spreadsheets, programs or the like, Lilly’s rights to access and inspection
under this Section extend to the database, spreadsheet or program that generated the Record as well as the Record itself. 

  

	 	18.7	Records Subject to Other Provisions of this Agreement. Some Records required by this Section may also fall within the definition of Work Product, Deliverables or
ChemPartner Intellectual Capital. ChemPartner’s obligations under this Section do not diminish ChemPartner’s other obligations toward, or Lilly’s property rights to, such Records. ChemPartner’s obligations to maintain Records
under this Section are extinguished to the extent that ChemPartner properly satisfies another obligation in this Agreement to deliver or to dispose of such Records. 

 

	 	18.8	Audit Expenses. Lilly will pay its own expenses for any inspection of the Records or ChemPartner’s premises. 

 

 Page 10 of 26 

	 	18.9	Audit Expenses. However, if in any audit, Lilly determines that material issues exist that result, resulted or will result in an overcharge of * or more of the
invoiced amount for the audited period, ChemPartner will, within thirty (30) days, reimburse Lilly for its out-of-pocket costs incurred in conducting the audit, in addition to any remedies that Lilly may have for the overcharge (such as a
refund). This Section is intended as a fair allocation of audit expenses, not as damages or a penalty. 

 Section 19.
Nondisclosure, Publicity, and Use of Lilly Name or Trademarks 
  

	 	19.1	ChemPartner will not disclose any information about this Agreement, including its existence, without Lilly’s consent. 

 

	 	19.2	ChemPartner will not use the name of Lilly, any Lilly employee or any Lilly product or service in any press release, advertising or materials distributed to prospective
or existing customers, annual reports or any other public disclosure, except with Lilly’s prior written authorization or as required by Applicable Law. To the extent allowed by Applicable Law, ChemPartner will provide copies of any proposed
disclosure for prior review and comment by Lilly’s external corporate communications (public relations) department no less than ten (10) days prior to disclosure. Under no circumstances will ChemPartner use the Lilly logo or other
trademark in any such materials or disclosures. 

  

	 	19.3	In no event will ChemPartner: 

  

	 	19.3.1	represent, directly or indirectly, that any product or service provided by ChemPartner has been approved, recommended, certified or endorsed by Lilly; or

  

	 	19.3.2	use Lilly’s name, logo, or other trademarks on any business cards, letterhead, or similar materials. 

 

	 	19.4	Lilly may, in its sole discretion, revoke any authorization or consent given under this Section. 

 
  

Risk Allocation 
  

Section 20. Breach and Remedies 
  

	 	20.1	Remedies cumulative. Except to the extent that remedies are expressly limited in this Agreement, each party is entitled to all the remedies available to it in
law and in equity. The parties do not intend the identification of a particular remedy to limit a party to that remedy unless the language clearly states that the remedy is the sole or exclusive remedy. 

 

	 	20.2	Termination for material breach. If a Party believes that the other Party is in breach of this Agreement, the Party believing that breach has occurred shall
provide written notification of the breach to the other party. The Party believed to be in breach shall have thirty (30) days to remedy the breach, unless the Work Order clearly and unequivocally provides otherwise. Either party may terminate
this Agreement for material breach by written notice to the breaching party (with a copy to the breaching party’s legal counsel) if the breach is not resolved within thirty days, or within the timeframe set forth by a particular Work Order, and
after the written notice is received. 

  

	 	20.3	Injunctive Relief. ChemPartner acknowledges that, due to the nature of Lilly’s business, monetary damages are inadequate to protect Lilly from any
threatened or actual breach of ChemPartner’s duty to protect Lilly’s Confidential Information and that any breach will cause irreparable harm to Lilly. Accordingly, ChemPartner agrees that Lilly is entitled to an injunction restraining any
breach or threatened breach without having to prove the inadequacy of monetary damages or irreparable harm. 

  

	*	Indicates where text has been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. The omitted materials
have been filed separately with the Securities and Exchange Commission. 

  

 Page 11 of 26 

 Section 21. Insurance 

 

	 	21.1	ChemPartner will satisfy the requirements of Exhibit D. 

Section 22. Indemnification 
  

	 	22.1	ChemPartner will indemnify and defend Lilly and its Affiliates against any and all Losses (including Lilly’s own Losses and those owed under third-party Claims) to
the extent arising from: 

  

	 	22.1.1	Any breach of ChemPartner’s obligations under this Agreement. 

  

	 	22.1.2	Any Fault of ChemPartner or its Affiliates. 

  

	 	22.1.3	Any Fault incident to this Agreement on the part of ChemPartner’s Representatives, or its Affiliates’ Representatives, or its Subcontractors, or its
Subcontractor’s Representatives. 

  

	 	22.1.4	Any Claim that the Services, Work Product, or Deliverables, or Lilly’s use thereof, infringes the Intellectual Property Rights of another Person, except to the
extent such infringement arises from any substances, processes, methods, information, or written materials furnished by Lilly and used in accordance with Lilly’s instructions in performing the Services or incorporated into the Deliverables or
Work Product in accordance with Lilly’s instructions. 

  

 
 General Terms and Conditions 

 
 Section 23. Independent Contractor 

  

	 	23.1	In performing its obligations under this Agreement, ChemPartner acts solely as an independent contractor This Agreement does not create a partnership, joint venture, or
any similar relationship between Lilly and ChemPartner. Neither ChemPartner nor Lilly has any authority: 

  

	 	23.1.1	to bind, incur any liability on behalf of, or otherwise commit the other or; 

 

	 	23.1.2	to act in any other manner as agent or representative of the other. 

  

	 	23.2	Neither ChemPartner, its Affiliates, its Subcontractors, nor any of their Representatives are employees of Lilly for any purpose. Lilly will not withhold any taxes, pay
any Social Security taxes, pay unemployment compensation, furnish worker’s compensation insurance, or provide any employment benefits for ChemPartner, its Affiliates, its Subcontractors or any of their Representatives. 

Section 24. Delegation and Assignment 
  

	 	24.1	ChemPartner will not delegate any of its obligations under this Agreement without Lilly’s written consent. In no event will such a delegation relieve ChemPartner
of any of its obligations to Lilly. 

  

	 	24.2	Neither party may assign its rights under this Agreement without the other party’s written consent except that: 

 

	 	24.2.1	Property Rights acquired under the Agreement may be freely assigned unless the Agreement expressly prohibits the assignment; and 

 

	 	24.2.2	Accounts Receivable may be assigned in accordance with Applicable Law. 

 

 Page 12 of 26 

 Section 25. Severability 

 

	 	25.1	If a provision of this Agreement is held to be unenforceable, the other provisions will remain in effect. If possible, the offending provision will be modified to the
slightest degree necessary to make it enforceable, remaining as close as possible to the parties’ original intent for the provision. If not possible, the offending provision will be stricken. 

Section 26. Contract Interpretation 
  

	 	26.1	The meaning of a provision of this Agreement will be considered in context with other provisions of the Agreement. 

 

	 	26.2	The following principles apply to the construction of this Agreement unless the construction is plainly contrary to the intent of the parties: 

 

	 	26.2.1	“Including” means “included but not limited to.” 

  

	 	26.2.2	Language that has a generally prevailing meaning is given that meaning unless the Agreement expressly assigns a different one. 

 

	 	26.2.3	Technical terms used in the technical field of the subject of the Agreement are given their technical meaning. 

 

	 	26.2.4	Singular words may be treated as plural, and plural words may be treated as singular. 

 

	 	26.2.5	The masculine gender may be treated as feminine, and the feminine gender may be treated as masculine. 

 

	 	26.3	In computing any period of time under this Agreement, the day of the act, event, or default from which the designated period of time begins to run is not included. If
the Agreement specifies that a period is to run for a certain number of business days, only business days are included in the count, and the period may not end on any other day. 

Section 27. Choice of law and venue. 

This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, USA, excluding any choice of law
rules that may direct the application of the law of any other jurisdiction. English shall be the official language of this Agreement and the English language shall control for purposes of interpreting its provisions. If a dispute arises between the
Parties relating to this Agreement, the Parties agree to hold a meeting in New York, New York, USA, or such other place as the Parties may agree, within no more than twenty (20) business days following a call for such meeting, to attempt in
good faith to negotiate a resolution of the dispute prior to pursuing other available remedies. If, within thirty (30) days after such meeting, or, if such meeting does not occur, within sixty (60) days after the request for such meeting,
the Parties have not succeeded in resolving the dispute, such dispute, on the written request of one Party delivered to the other Party, shall be submitted to final and binding arbitration before three arbitrators in accordance with the Rules of the
International Chamber of Commerce in effect on the date that a request for arbitration is filed, provided, however, that in no event shall the arbitrators have authority to award punitive damages. The seat of arbitration shall be New York, New York,
USA, and the language of the proceedings shall be English. Judgment on the award of the arbitrators may be entered in any court having jurisdiction thereof. Without prejudice to the foregoing, either Party may seek appropriate preliminary or interim
equitable relief from a court of competent jurisdiction. 
 Section 28. Survival 

 

	 	28.1	The expiration, termination or cancellation of this Agreement will not extinguish the rights of either party that accrue prior to expiration, termination or
cancellation or any obligations that extend beyond termination, expiration or cancellation, either by their inherent nature or by their express terms. 

 

 Page 13 of 26 

 Section 29. No Waiver 

 

	 	29.1	No provision of this Agreement is waived unless the waiver is in writing and signed by the party granting the waiver. 

 

	 	29.2	No delay in exercising any right, power or privilege under this Agreement will operate to waive completely or partially any present or future exercise of that right,
power or privilege. 

 Section 30. Notice 

 

	 	30.1	Unless specifically directed otherwise in the Agreement, whenever written notice is required by this Agreement, it must be delivered to address indicated below by:

  

	 	30.1.1	Certified mail, Postage Pre-Paid, Return Receipt Requested; 

  

	 	30.1.2	Hand Delivery; 

  

	 	30.1.3	Commercial overnight delivery service such as Federal Express or United Parcel Service; or 

 

	 	30.1.4	Facsimile. 

  

	 	30.2	Either party may change its address for notices by written notice to the other. 

 

	 	30.3	Notice is effective when received. If delivery of any written notice under this Agreement cannot be made despite the exercise of diligent efforts, the requirement to
give notice is excused. 

  

			
	Address for Notices to Lilly:	  	Address for Notices to Lilly’s Legal Counsel (if required):
		
	 ELI LILLY AND COMPANY
 Lilly
Corporate Center
 Indianapolis, IN 46285

Attention: LRL Procurement
 Telephone:
(317) 276-2000
 Facsimile: (317) 277-2404
	  	 ELI LILLY AND COMPANY
 Lilly
Corporate Center
 Indianapolis, IN 46285

Attention: Legal - Commercial Transactions

Telephone: (317) 276-2000
 Facsimile:
(317) 433-6610

		
	 Address for Notices to ChemPartner:
	  	Address for Notices to ChemPartner’s Legal Counsel (if required):
		
	 Shanghai ChemPartner Co., Ltd

No. 3 Building, 720 Cai Lun Road
 Zhangjiang
Hi-Tech Park, Pudong New Area Shanghai
 P.R. China 201203

Attention: Michael Hui, CEO
 Telephone:
86-21-51320000 x8306
 Facsimile: 86-21-51320002
	  	 Shanghai ChemPartner Co., Ltd.

No. 3 Building, 720 Cai Lun Road
 Zhangjiang
Hi-Tech Park, Pudong New Area Shanghai
 P.R. China 201203

Attention:                       
                 

Telephone:                       
                 

Facsimile:                       
                 

  

 Page 14 of 26 

 Section 31. Integration and Amendments 

 

	 	31.1	This Agreement is the final, complete and exclusive expression of all the statements, promises, terms and conditions within its scope and supersedes any prior written
or oral agreements within its scope. In making the Agreement, neither party relies on any promise or statement made by the other party, other than those contained in the Agreement. 

 

	 	31.2	No amendment to this Agreement will be binding on either party unless it is in writing and signed by each party or executed in another manner expressly provided by this
Agreement. Such an amendment does not require the consent or agreement of any third party, even if the third party is beneficiary of this Agreement. 

Section 32. Signatures 
  

	 	32.1	This Agreement is legally binding when, but not until, each party has received from the other a counterpart of the Agreement signed by an authorized Representative. The
parties’ representatives may sign separate, identical counterparts of this document; taken together, they constitute one agreement. A signed counterpart may be delivered by any reasonable means, including facsimile or other Electronic
transmission. 

  

									
	ELI LILLY AND COMPANY	  		 	SHANGHAI CHEMPARTNER CO., LTD
					
	By:	 	 /s/ Edward J Roberson
	  		 	By:	 	 /s/ Michael Hui

	Printed Name: Edward J Roberson	  		 	Printed Name: Michael Hui
	Title:	 	Director	  		 	Title:	 	CEO
	Date:	 	March 3, 2008	  		 	Date:	 	Feb. 29th, 2008

  

 Page 15 of 26 

 Exhibit A Definitions 

 

	A.1	Capitalized Terms 

  

	 	A.1.1	Affiliate of a party means any entity that controls, is controlled by, or is under common control with that party. One entity is deemed to control the other if
and only if it directly or indirectly: 

  

	 	A.1.1.1	owns more than fifty percent (50%) of the equity in the other; or 

  

	 	A.1.1.2	controls more than fifty percent (50%) of the voting rights of the other. 

 

	 	A.1.2	Agreement includes the Master Agreement and any Work Orders. 

  

	 	A.1.3	Applicable Law means any statute, law, treaty, rule, code, ordinance, regulation, permit, interpretation, certificate or order of a Governmental Authority, or
any judgment, decision, decree, injunction, writ, order subpoena, or like action of any court, arbitrator or other government entity. 

  

	 	A.1.4	Claim includes claims, demands, lawsuits, administrative proceedings or similar actions. 

 

	 	A.1.5	Compensation means ChemPartner’s compensation for performance under this Agreement established in a Work Order and consistent with 0.

  

	 	A.1.6	Confidential Information means information that is designated as a party’s Confidential Information elsewhere in this Agreement, subject to the conditions
that follow. Except as otherwise provided by this Agreement, the status of information as a party’s Confidential Information is not affected by the means by which other party (the “acquiring party”) acquires it. For example,
Confidential Information may be acquired by written, oral, or electronic communication, either directly or through one or more intermediaries, or by visual observation. Similarly, acquisition or disclosure of Confidential Information may be either
intentional or inadvertent without affecting its status. Notwithstanding anything to the contrary in this Agreement, Confidential Information does not include any information that: 

 

	 	A.1.6.1	Was or becomes generally known to the public by means other than a breach by the acquiring party of a contractual, legal, or fiduciary duty of confidentiality owed to
the disclosing party, its Affiliates, its Subcontractors (if applicable), or any of their Representatives; 

  

	 	A.1.6.2	Is in the lawful possession of the acquiring party prior to acquisition as a result of this Agreement; 

 

	 	A.1.6.3	Was or becomes available to the acquiring party on a nonconfidential basis from a third person that is not bound by any contractual, legal, or fiduciary duty of
confidentiality to the disclosing party, to its Affiliates, or to the Representatives of the disclosing party or its Affiliates; or 

  

	 	A.1.6.4	Is developed entirely by Representatives of the acquiring party who have no access to the disclosing party’s Confidential Information. 

 

	 	A.1.7	Deliverables means any materials, articles, substances, models, samples, software, data, records, reports, notices, documents, photographs, video recordings,
audio recordings, drawings, designs, specifications, information and the like (whether physical, Electronic, magnetic or other form) that ChemPartner is specifically obligated to furnish Lilly or that are identified as Deliverables in this
Agreement. 

  

 Page 16 of 26 

	 	A.1.8	Electronic relates to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities. 

 

	 	A.1.9	Fault means any act or omission of negligence; gross negligence; or willful, wanton, or intentional misconduct. 

 

	 	A.1.10	Governmental Authority means any federal, state, local or foreign government entity, authority, agency, instrumentality, court, tribunal, regulatory commission
or other body, whether legislative, judicial, administrative or executive (or a combination or permutation thereof), and any arbitrator to whom a dispute has been presented under government rule or by agreement of the parties with an interest in
such dispute. 

  

	 	A.1.11	Intellectual Property means all inventions, original expressions of ideas embodied in a tangible form, trademarks, Trade Secrets, information, know-how, and the
like that are afforded (or may be afforded upon action by a Governmental Authority, such as the United States Patent Office) Intellectual Property Rights. 

  

	 	A.1.12	Intellectual Property Rights means the property rights or quasi-property rights afforded by patents, copyrights, trademarks, or Trade Secrets; publicity rights;
privacy rights; and moral rights (such as the rights of attribution and integrity). 

  

	 	A.1.13	Invention means any and all suggestions, descriptions, ideas, inventions (whether or not patentable), results, discoveries, know-how, Trade Secrets, techniques,
data, strategies, methods, syntheses, processes, practices, skill, experience, documents, apparatus, devices, chemical and biological formulations, compounds, composition of matter, metabolites, chemical and biological samples, assays, inventions
arising out of bioavailability or pharmacokinetic studies, inventions arising out of toxicology assessment, and inventions arising out of biology screening. 

 

	 	A.1.14	Loss includes losses, damages, costs, or expenses (including interest, penalties, reasonable attorney or accounting fees, and expert witness fees) recoverable at
law or in equity, whether sounding in contract, tort, strict liability or other theory. 

  

	 	A.1.15	Master Agreement means the body of the document this Exhibit is attached to and all of its Exhibits, excluding any Work Orders. 

 

	 	A.1.16	Person includes an individual or a partnership, corporation, association, limited liability company or other form of organization. 

 

	 	A.1.17	Project means the Services and Deliverables specified in a particular Work Order. 

 

	 	A.1.18	Project Specifications means the description of the Services and Deliverables set forth in a particular Work Order. 

 

	 	A.1.19	Property means Intellectual Property, Records, information, and all other property, both tangible and intangible. 

 

	 	A.1.20	Record means without limitation, all information, data, text, images, sounds codes, source codes, computer programs, software, data bases or the like, used,
created or obtained in the performance of this Agreement, inscribed in tangible medium or stored in an Electronic or other medium and that is retrievable in perceivable form. 

 

	 	A.1.21	Representatives means a party’s officers, directors, and employees, and agents. 

 

	 	A.1.22	A Section is any numbered paragraph of this Agreement. 

  

	 	A.1.23	Services means that particular services that ChemPartner is to provide on a Project. 

 

	 	A.1.24	Subcontractor means any Person that performs any of the obligations of ChemPartner under this Agreement, whether in privity to ChemPartner or in privity to
another Subcontractor. 

  

 Page 17 of 26 

	 	A.1.25	Work Order is a contractual commitment meeting the requirements for a Work Order set forth in this Agreement, executed by both Lilly and ChemPartner, that
engages ChemPartner to furnish Lilly specified Services and Deliverables. 

  

	 	A.1.26	Work Product means all articles, materials, goods, information, works of authorship, trademarks, artwork, drawings, text, specifications, calculations, reports,
inventions, discoveries, processes, improvements, software and other documentation and materials created, developed, conceived or first reduced to practice by ChemPartner, alone or with others, related to Services rendered for Lilly under this
Agreement or derived from information or materials ChemPartner has received from Lilly. 

  

 Page 18 of 26 

 Exhibit B Model Work Order 

This Exhibit shows an example the form that will be used to write Work Orders under this Master Agreement. Instructions for completing
the form are shown in italics. 
  
  

Eli Lilly and Company Work Order 
  

 

	B.1	Parties and Master Agreement 

  

	 	B.1.1	Lilly is Eli Lilly and Company, an Indiana corporation. 

  

	 	B.1.2	ChemPartner is Shanghai ChemPartner Co., Ltd., Building #3, 720 Cailun Road, Zhangjiang Hi-Tech Park, Pudong New Area, Shanghai, People’s Republic of China, 201203
(“ChemPartner”). 

  

	 	B.1.3	This Work Order is subject to the Master Agreement between the parties effective             .

  

	 	B.1.4	Capitalized words that appear in this Work Order are defined in the Master Agreement. 

 

	B.2	Project Information 

Fill in the blanks. 
  

	 	B.2.1	Name of Project:              

 

	 	B.2.2	Date submitted:              

 

	 	B.2.3	Name of Lilly employee requesting Proposal:             

 

	B.3	Project Specifications 

Describe the Services that will be performed under this Work Order. 

 

	 	B.3.1	Specification of Services 

  

	 	B.3.1.1	             

 

	 	B.3.1.2	             

List each Deliverable, all its specifications, and the deadline for its delivery. A deadline may be expressed as a particular date or
as a certain number of days after a particular event or milestone.) 
  

	 	B.3.2	Specification of Deliverables 

  

	 	B.3.2.1	             

 

	 	B.3.2.2	             

 

	 	B.3.3	Lilly’s Responsibilities 

List all of the materials or information all materials or information that Lilly is required to furnish and actions Lilly is required
to take in furtherance of the Project. If there are none, delete this section. 
  

	 	B.3.3.1	             

 

	 	B.3.3.2	             

 

	B.4	Project Personnel 

 Use
this section only if Lilly has requested that the Project or a particular portion of the Project be performed by a particular individual or by an individual with particular qualifications. Otherwise delete it. 

 

 Page 19 of 26 

	 	B.4.1	The following responsibilities for the Project will be carried out on behalf of ChemPartner exclusively by the following individuals. 

 

			
	 Responsibilities
	 	 Name or qualifications of individual

		 	
		 	

  

	B.5	Compensation 

  

	 	B.5.1	ChemPartner’s entire Compensation for complete performance of this Project is set forth in this Section. See the Master Agreement for additional
explanation. 

 Select one of the two following sections and fill in the blanks. Delete the other section. 

  

	 	B.5.2	ChemPartner will receive fixed fee in the amount of              dollars
($            ). (See the Master Agreement for a description of a fixed fee.) 

Select one of the two following sections and fill in any blanks. Delete the other section. 

 

	 	B.5.3	There is no advanced payment to initiate the project once the Work Order is signed by both parties 

 

	 	B.5.4	Lilly will pay to ChemPartner an advanced payment in the amount of $              dollars
($            ), which represents              percent of the fixed fee to initiate the project once the Work Order
is signed by both parties. Upon successful completion of the project by ChemPartner, the balance of the fixed fee shall be invoiced. However, if the project is cancelled by Lilly, ChemPartner may retain the advanced payment 

Select one of the two following sections and fill in any blanks. Delete the other section. 

 

	 	B.5.4	There is no additional compensation for reimbursement of expenses. 

  

	 	B.5.5	In addition, ChemPartner will be compensated for reimbursable expenses as provided in the Master Agreement. (See the Master Agreement for a complete description of
reimbursable expenses.) 

  

	 	B.5.5.1	The estimated amount of reimbursable expenses is              dollars
($            ). 

  

	 	B.5.5.2	The guaranteed maximum amount of reimbursable expenses is             
($            ). 

  

	B.6	Invoices 

  

	 	B.6.1	             

 

	 	B.6.2	             

 

 Page 20 of 26 

	B.7	Signatures 

  

	 	B.7.1	This Work Order is legally binding when, and not until, each party has executed it in a manner allowed by the Master Agreement. 

 

									
	ELI LILLY AND COMPANY	 		 	SHANGHAI CHEMPARTNER CO., LTD.
					
	By:	 	(Example only. Not intended to be signed.)	 		 	By:	 	(Example only. Not intended to be signed.)

									
					
	Printed Name:	 	  
	 		 	Printed Name:	 	  

									
					
	Title:	 	  
	 		 	Title:	 	  

					
	Date	 	  
	 		 	Date	 	  

  

 Page 21 of 26 

 Exhibit C Compensation 

 

	C.1	Work Orders 

  

	 	C.1.1	Each Work Order establishes the Compensation for a particular Project. This Exhibit establishes the framework for the Compensation and explains the alternatives that
may be included in a Work Order. 

  

	C.2	Fixed Fee 

  

	 	C.2.1	A Work Order may designate a fixed fee for all or any part of a Project. If so, the fixed fee will be ChemPartner’s entire compensation for the complete
performance of the Project (or relevant portion of the project), except to the extent the Work Order expressly provides for other compensation. 

  

	 	C.2.2	By executing the Work Order, ChemPartner represents a good-faith belief and professional opinion that the Project (or relevant part) can be fully performed for the
fixed fee, that it has adequate information to form that belief and opinion, and that it accepts the risk that its own cost of performance may exceed the fixed fee. 

 

	C.3	Reimbursable Expenses 

  

	 	C.3.1	If a Work Order expressly provides for Lilly to reimburse ChemPartner for expenses, Lilly will reimburse ChemPartner for only those described below. Lilly will
reimburse ChemPartner for its actual expense (subject to any restrictions or conditions below); Lilly will pay ChemPartner no overhead allowance, profit margin, administrative charge, handling fee, or any other markup on expenses.

  

	 	C.3.2	Note to avoid misunderstanding: Reimbursable expenses are included in the defined term “Compensation.” 

 

	 	C.3.3	Only those reasonable and proper out-of-pocket expenses directly attributable to the Project are reimbursable. 

Examples of expenses that are not directly attributable to the Services and, thus not reimbursable, include: 

 

			
	 *
	 	 * 

	 *
	 	 *

	 *
	 	 * 

	 *
	 	 * 

	 *
	 	 * 

	 * 
	 	 * 

	 * 
	 	 *

	 * 
	 	 * 

  

	 	C.3.4	Lilly will not reimburse ChemPartner for expenses arising from ChemPartner’s use of Subcontractors (subject this Agreements restrictions and conditions on the use
of Subcontractors) in excess of the amount Lilly would have compensated ChemPartner had it furnished the subcontracted Services and Deliverables itself. 

  

	 	C.3.5	Travel expenses are reimbursable only if Lilly approves the travel (including the individuals traveling) in advance and only to the extent the expenses do not exceed
the amount that Lilly would reimburse its own employees were they to travel under the same circumstances. Expenses for travel between ChemPartner’s offices and Lilly’s offices are not reimbursable. 

 

	*	Indicates where text has been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. The omitted materials
have been filed separately with the Securities and Exchange Commission. 

  

 Page 22 of 26 

	 	C.3.6	Reimbursable expenses will be reduced to reflect all discounts available to ChemPartner from the third-party suppliers (including, without limitation discounts for
early payment, provided ChemPartner receives funds prior to the discount date) whether or not ChemPartner actually takes advantage of the discount. 

  

	C.4	Effect of an Estimated Amount 

  

	 	C.4.1	A Work Order may state an estimated amount for the total Compensation (or any specified part of the Compensation) that Lilly will owe ChemPartner for full performance
of the Project (or any relevant part). 

  

	 	C.4.2	By executing the Work Order, ChemPartner represents a good-faith belief and professional opinion that the Project (or relevant part) can be fully performed within the
estimated amount and that it has adequate information to form that belief and opinion. 

  

	 	C.4.3	If ChemPartner later believes that the Services for the Project cannot be completely performed without exceeding the estimated amount, ChemPartner will curtail its work
to mitigate further cost to Lilly while preserving the value of any work already completed. ChemPartner will give Lilly prompt written notice that it believes the Project cannot be completed within the estimated amount, the reasons for that belief,
the amount of compensation already accrued, and a new good-faith estimate for completing the Project. The notice constitutes an offer to amend the Work Order to the place the old estimated amount with the new. 

 

	 	C.4.4	Lilly has the option to accept the offer to amend the Work Order or to cancel the Work Order immediately (with any notice period otherwise required being waived). Until
Lilly exercises its option, ChemPartner will take commercially reasonable measures to mitigate further costs to Lilly while preserving the value of any work already completed. 

 

	 	C.4.5	In no event does ChemPartner have any obligation to proceed with the Project after the estimated amount is reached. In no event does Lilly have any responsibility to
pay ChemPartner any compensation in excess of the lower of: (i) the estimated amount; or (ii) the amount of compensation accrued at the time ChemPartner believed or reasonable should have believed the Project could not be completed within
the estimated amount. 

  

	C.5	Effect of a Guaranteed Maximum Amount 

  

	 	C.5.1	A Work Order may state a guaranteed maximum amount for the Compensation (or any specified part of the Compensation) that Lilly will owe ChemPartner for full performance
of the Project (or any specified part). In no event is Lilly obligated to pay ChemPartner more than the stated amount for full performance of the Project (or full performance of the relevant part of the Project). 

 

	 	C.5.2	By executing the Work Order, ChemPartner represents a good-faith belief and professional opinion that the Project (or relevant part) can be fully performed within the
guaranteed maximum amount, that it has adequate information to form that belief and pinion, and that it accepts the risk that its own cost of performance may exceed the guaranteed maximum amount. 

 

 Page 23 of 26 

 Exhibit D Insurance 

 

	D.1	Required Policies 

  

	 	D.1.1	ChemPartner will maintain, or will cause its Affiliates and Subcontractors to maintain, all insurance policies described in Table D-1 (below) covering all activities
related to this Agreement on the part of ChemPartner, its Affiliates, its Subcontractors, their respective Representatives, and anyone else for whose acts or omissions ChemPartner may be liable. 

 

	 	D.1.2	ChemPartner will maintain, or will cause others to maintain, liability umbrella liability insurance of no less than * following form with the policies required by Table
D-1. 

  

	 	D.1.3	Each policy will be underwritten by an insurer rated A, XV or better by A.M. Best Co. and (except to the extent prohibited by Applicable Law) contain a waiver of
subrogation in favor of Lilly. 

  

	*	Indicates where text has been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. The omitted materials
have been filed separately with the Securities and Exchange Commission. 

  

 Page 24 of 26 

 Table D-1 

 

					
		  	*	  	
			
		  	Maximum Limit	  	 Deductible

	 *
	  	*	  	 *

			
		  	*	  	
		  	Maximum Limit	  	 Deductible

	 *
	  	*	  	 *

			
		  	*	  	
		  	Maximum Limit	  	 Deductible

	*	  	*	  	 *

		  	*	  	
			
		  	*	  	
		  	Maximum Limit	  	 Deductible

	*	  	*	  	 *

 

	*	Indicates where text has been omitted pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended. The omitted materials
have been filed separately with the Securities and Exchange Commission. 

  

 Page 25 of 26 

 Exhibit E Animal Care and Use Principles for Animal 

Researchers and Suppliers 
  

	E.1	Compliance 

  

	 	E.1.1	Lilly expects all individuals and organizations with which Lilly contracts for animal research services (“Researchers”), or the supply of animals to be used
in Lilly research (“Suppliers”), to do the following for each location at which Researchers and Suppliers use or hold animals: 

  

	 	E.1.1.1	comply with all applicable country and local laws, regulations, and standards regarding the care and use of animals, 

 

	 	E.1.1.2	comply with the Lilly animal care and use principles stated below even if they impose requirements beyond the applicable local legal requirements,

  

	 	E.1.1.3	establish a mechanism to assess compliance with such laws, regulations, standards, and the Lilly principles stated below, and 

 

	 	E.1.1.4	regularly assess and report to its management the status of compliance with these requirements. 

 

	E.2	Lilly Principles for Animal Care and Use 

  

	 	E.2.1	Animal Care. Researchers and Suppliers must provide living conditions for research animals that are appropriate for their species and contribute to their health
and well-being. Personnel who care for animals or who conduct animal studies must be appropriately qualified regarding the proper care and use of animals in research. 

 

	 	E.2.2	Studies. Researchers must assure that studies involving animals are designed and conducted in accordance with both (i) applicable country and local
regulatory guidance, and (ii) the following widely recognized principles of animal care and use: 

  

	 	E.2.2.1	with due consideration of the relevance of the study to human or animal health and the advancement of scientific knowledge 

 

	 	E.2.2.2	selecting only animals appropriate for that study 

  

	 	E.2.2.3	using only the minimum number of animals required to obtain valid results 

  

	 	E.2.2.4	using alternative methods instead of live animals when appropriate 

  

	 	E.2.2.5	avoiding or minimizing discomfort and distress to the animals. 

  

	E.3	Reporting 

  

	 	E.3.1	Researchers and Suppliers must report to Lilly any animal welfare issues or concerns that may effect the welfare of animals or validity of the testing being conducted.
This would include but is not limited to any animal illness, disease outbreaks, or any significant (ie, reportable to a government authority) non-compliance with any country or local animal welfare laws, regulations, or standards, or the Lilly
principles stated above. 

  

	E.4	Audits/monitoring 

  

	 	E.4.1	Lilly has the discretion to periodically assess Researchers’ and Suppliers’ animal use, care, and welfare in accordance with the Records and Audits section of
the Agreement. 

  

 Page 26 of 26

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