Document:

incy_Ex_10_2

		

			Exhibit 10.2

		

		

			CONFIDENTIAL TREATMENT MATERIAL

		

		

			 

		

		
			CONFIDENTIAL TREATMENT REQUESTED: Information for which confidential treatment has been requested is omitted and is noted with asterisks.  An unredacted version of this document has been filed separately with the Securities and Exchange Commission (the “Commission”).
		

		
			 
		

		
			 
		

		
			 
		

		
			LICENSE AND COLLABORATION AGREEMENT

BY AND BETWEEN

INCYTE EUROPE SARL
		

		
			AND
		

		
			JIANGSU HEnGRUI MEDICINE CO., LTD.
		

		
			 
		

		
			SEPTEMBER 1, 2015
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

			CONFIDENTIAL TREATMENT MATERIAL

		

		

			 

		

TABLE OF CONTENTS
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 1

					
					
						DEFINITIONS

					
1 
				
	
					
						ARTICLE 2

					
					
						LICENSES

					
12 
				
	
					
						2.1

					
					
						Grant to Incyte

					
12 
				
	
					
						2.2

					
					
						Additional Licensing Provisions

					
13 
				
	
					
						2.3

					
					
						Hengrui Retained Rights

					
13 
				
	
					
						2.4

					
					
						Transfer of Hengrui Know-How

					
14 
				
	
					
						2.5

					
					
						Performance by Affiliates, Subcontractors and Sublicensees

					
14 
				
	
					
						2.6

					
					
						Restrictive Covenants

					
15 
				
	
					
						ARTICLE 3

					
					
						GOVERNANCE

					
16 
				
	
					
						3.1

					
					
						Joint Steering Committee

					
16 
				
	
					
						3.2

					
					
						Joint Steering Committee Membership

					
17 
				
	
					
						3.3

					
					
						Joint Steering Committee Meetings

					
18 
				
	
					
						3.4

					
					
						Decision-Making

					
18 
				
	
					
						3.5

					
					
						Dispute Resolution Procedures

					
18 
				
	
					
						3.6

					
					
						Limits on JSC and Committee Authority

					
19 
				
	
					
						3.7

					
					
						Committees

					
19 
				
	
					
						3.8

					
					
						Minutes of Committee Meetings

					
19 
				
	
					
						3.9

					
					
						Exchange of Information

					
20 
				
	
					
						3.10

					
					
						Alliance Managers

					
20 
				
	
					
						ARTICLE 4

					
					
						DEVELOPMENT

					
20 
				
	
					
						4.1

					
					
						Overview

					
20 
				
	
					
						4.2

					
					
						Development Costs

					
23 
				
	
					
						4.3

					
					
						Records, Reports and Information

					
23 
				
	
					
						4.4

					
					
						Clinical Supply

					
24 
				
	
					
						ARTICLE 5

					
					
						REGULATORY

					
24 
				
	
					
						5.1

					
					
						Regulatory Data and Regulatory Materials

					
24 
				
	
					
						5.2

					
					
						Regulatory Filings and Regulatory Approvals

					
24 
				
	
					
						5.3

					
					
						Communications

					
26 
				
	
					
						5.4

					
					
						Adverse Event Reporting; Safety Data Exchange and Medical Inquiries

					
26 
				
	
					
						5.5

					
					
						Regulatory Authority Communications Received by a Party

					
28 
				
	
					
						5.6

					
					
						Recall, Withdrawal, or Market Notification of Product

					
29 
				
	
					
						ARTICLE 6

					
					
						COMMERCIALIZATION

					
30 
				
	
					
						6.1

					
					
						Commercialization in the Territories

					
30 
				

		
			 
		

		
			
		

		
			

		 

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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TABLE OF CONTENTS
		

		
			(continued)
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						6.2

					
					
						Both Parties’ Performance

					
31 
				
	
					
						ARTICLE 7

					
					
						PAYMENTS

					
31 
				
	
					
						7.1

					
					
						Upfront License Fee

					
31 
				
	
					
						7.2

					
					
						Milestone Payments

					
31 
				
	
					
						7.3

					
					
						Royalty Payments to Hengrui

					
32 
				
	
					
						7.4

					
					
						Royalty Payments and Reports

					
33 
				
	
					
						7.5

					
					
						Third Party Royalties and Other Payments

					
33 
				
	
					
						7.6

					
					
						Taxes and Withholding

					
34 
				
	
					
						7.7

					
					
						Currency Conversion

					
35 
				
	
					
						7.8

					
					
						General Payment Procedures

					
35 
				
	
					
						7.9

					
					
						Late Payments

					
35 
				
	
					
						7.10

					
					
						Records; Audits

					
35 
				
	
					
						ARTICLE 8

					
					
						INTELLECTUAL PROPERTY MATTERS

					
36 
				
	
					
						8.1

					
					
						Inventions and Related Intellectual Property Rights

					
36 
				
	
					
						8.2

					
					
						Patent Prosecution and Maintenance of Hengrui Patents

					
37 
				
	
					
						8.3

					
					
						Patent Prosecution and Maintenance of Joint Patents

					
38 
				
	
					
						8.4

					
					
						Defense and Enforcement of Patents

					
40 
				
	
					
						8.5

					
					
						Patent Term Extensions

					
43 
				
	
					
						ARTICLE 9

					
					
						REPRESENTATIONS, WARRANTIES AND COVENANTS

					
43 
				
	
					
						9.1

					
					
						Mutual Representations and Warranties

					
43 
				
	
					
						9.2

					
					
						Additional Representations and Warranties of Hengrui

					
44 
				
	
					
						9.3

					
					
						Mutual Covenants

					
46 
				
	
					
						9.4

					
					
						Disclaimer

					
48 
				
	
					
						9.5

					
					
						No Other Representations or Warranties

					
48 
				
	
					
						ARTICLE 10

					
					
						INDEMNIFICATION

					
48 
				
	
					
						10.1

					
					
						Indemnification by Hengrui

					
49 
				
	
					
						10.2

					
					
						Indemnification by Incyte

					
49 
				
	
					
						10.3

					
					
						Indemnification Procedures

					
49 
				
	
					
						10.4

					
					
						Limitation of Liability

					
52 
				
	
					
						10.5

					
					
						Insurance

					
52 
				

		
			 
		

		
			
		

		
			

		 

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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TABLE OF CONTENTS
		

		
			(continued)
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						ARTICLE 11

					
					
						CONFIDENTIALITY

					
52 
				
	
					
						11.1

					
					
						Confidential Information

					
52 
				
	
					
						11.2

					
					
						Confidentiality Obligations

					
53 
				
	
					
						11.3

					
					
						Return of Confidential Information

					
53 
				
	
					
						11.4

					
					
						Permitted Disclosure and Use

					
53 
				
	
					
						11.5

					
					
						Notification

					
54 
				
	
					
						11.6

					
					
						Publicity; Filing of this Agreement

					
54 
				
	
					
						11.7

					
					
						Publication

					
55 
				
	
					
						11.8

					
					
						Use of Names

					
56 
				
	
					
						11.9

					
					
						Survival

					
56 
				
	
					
						11.10

					
					
						Effect of Change of Control of Hengrui

					
56 
				
	
					
						ARTICLE 12

					
					
						TERM AND TERMINATION

					
57 
				
	
					
						12.1

					
					
						Term

					
57 
				
	
					
						12.2

					
					
						Incyte Termination for Convenience

					
58 
				
	
					
						12.3

					
					
						Termination for Breach or Bankruptcy

					
58 
				
	
					
						12.4

					
					
						Termination Disputes

					
58 
				
	
					
						ARTICLE 13

					
					
						EFFECTS OF TERMINATION AND OTHER REMEDIES FOR MATERIAL BREACH OR DEFAULT, BANKRUPTCY, OR TERMINATION FOR CONVENIENCE

					
59 
				
	
					
						13.1

					
					
						Termination by Incyte for Convenience, and Termination by Hengrui for Incyte’s Breach or Bankruptcy

					
59 
				
	
					
						13.2

					
					
						Termination by Incyte for Hengrui’s Breach or Bankruptcy

					
60 
				
	
					
						13.3

					
					
						Expiration of this Agreement

					
61 
				
	
					
						13.4

					
					
						Return of Confidential Information

					
61 
				
	
					
						13.5

					
					
						Accrued Rights

					
61 
				
	
					
						13.6

					
					
						Survival

					
61 
				
	
					
						13.7

					
					
						Rights in Bankruptcy

					
61 
				
	
					
						ARTICLE 14

					
					
						DISPUTE RESOLUTION

					
62 
				
	
					
						14.1

					
					
						Disputes

					
62 
				
	
					
						14.2

					
					
						Arising Between the Parties

					
62 
				
	
					
						14.3

					
					
						Dispute Resolutions

					
62 
				
	
					
						14.4

					
					
						Patent and Trademark Dispute Resolution

					
62 
				
	
					
						14.5

					
					
						Arbitration

					
62 
				
	
					
						14.6

					
					
						Injunctive Relief

					
63 
				

		
			 
		

		
			
		

		
			

		 

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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TABLE OF CONTENTS
		

		
			(continued)
		

		
			 
		

			
					
						ARTICLE 15

					
					
						MISCELLANEOUS

					
63 
				
	
					
						15.1

					
					
						Entire Agreement; Amendment

					
63 
				
	
					
						15.2

					
					
						Force Majeure

					
63 
				
	
					
						15.3

					
					
						Notices

					
63 
				
	
					
						15.4

					
					
						No Strict Construction; Interpretation

					
64 
				
	
					
						15.5

					
					
						Assignment

					
64 
				
	
					
						15.6

					
					
						Further Actions

					
65 
				
	
					
						15.7

					
					
						Severability

					
65 
				
	
					
						15.8

					
					
						No Waiver

					
65 
				
	
					
						15.9

					
					
						Cumulative Remedies

					
65 
				
	
					
						15.10

					
					
						Independent Contractors

					
65 
				
	
					
						15.11

					
					
						No Third Party Rights

					
65 
				
	
					
						15.12

					
					
						Expenses

					
65 
				
	
					
						15.13

					
					
						English Language; Governing Law

					
66 
				
	
					
						15.14

					
					
						Counterparts

					
66 
				

		
			 
		

		
			
		

		
			

		 

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

			CONFIDENTIAL TREATMENT MATERIAL

		

		

			 

		

LICENSE AND COLLABORATION AGREEMENT
		

		
			This License and Collaboration Agreement (this “Agreement”), dated as of September 1, 2015 (the “Effective Date”), is made by and between Incyte Europe SARL, a Swiss limited liability company (a société à responsabilité limitée) having its principal place of business at 1 rue Pre-de-la-Bichette, Geneva, Switzerland 1202 (“Incyte”), and Jiangsu Hengrui Medicine Co., Ltd., a Chinese limited liability company with offices at No.7 Kunlunshan Road, Lianyungang Eco & Tech Development Zone, Jiangsu Province, China 222047 (“Hengrui”). Incyte and Hengrui are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”  
		

		
			RECITALS
		

		
			Whereas, Hengrui has developed and is currently further developing the Licensed Antibodies (as defined below), including the PD-1 monoclonal antibody SHR-1210 for the treatment and/or control of cancer;
		

		
			Whereas, Incyte has significant experience in the development of pharmaceutical products; 
		

		
			Whereas, Incyte and Hengrui desire to establish a global collaboration for the further development and worldwide commercialization of the Licensed Antibodies; and
		

		
			Whereas, Hengrui will have the exclusive commercialization rights in the Hengrui Territory (as defined below) and Incyte will have the exclusive commercialization rights in the rest of the world.
		

		
			Now Therefore, in consideration of the foregoing premises and the mutual promises, covenants and conditions contained in this Agreement, the Parties agree as follows:
		

		
			Article 1
Definitions
		

		
			As used in this Agreement, the following initially capitalized terms shall have the meanings set forth in this Article 1 or as otherwise defined elsewhere in this Agreement:
		

		
			1.1.“Affiliate” means any Person directly or indirectly controlled by, controlling or under common control with, a Party, but only for so long as such control shall continue.  For purposes of this definition, “control” (including, with correlative meanings, “controlled by”, “controlling” and “under common control with”) shall be presumed to exist with respect to a Person in the event of the possession, direct or indirect, of (i) the power to direct or cause the direction of the management and policies of such Person (whether through ownership of securities, by contract or otherwise), or (ii) at [**] of the voting securities or other comparable equity interests.  The Parties acknowledge that in the case of certain entities organized under the laws of certain countries outside of the United States, the maximum percentage ownership permitted by law for a foreign investor may be less than [**], and that in such case, such lower percentage shall be substituted in the preceding sentence; provided that such foreign investor has the power to direct or cause the direction of the management 
		

		
			 
		

		 

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			and policies of such Person.  For the avoidance of doubt, neither of the Parties shall be deemed to be an “Affiliate” of the other.  
		

		
			1.2.“Anti-Corruption Laws” means the U.S. Foreign Corrupt Practices Act, as amended, the UK Bribery Act 2010, as amended, and any other applicable anti-corruption laws and laws for the prevention of bribery, fraud, racketeering, money laundering or terrorism.
		

		
			1.3.“Back-up Antibodies” means any PD-1 Antibody (other than the Lead Antibody) that is (i) Controlled by Hengrui (or its Affiliates) as of the Effective Date, or (ii) that comes under the Control of Hengrui (or its Affiliates) during the Term, including (A) any second generation PD-1 monoclonal antibodies and (B) any second generation PD-1 monoclonal antibody derivatives.   
		

		
			1.4.“Back-up Product” means any pharmaceutical product containing a Back-up Antibody (alone or with other active ingredients), in all forms, presentations, formulations, administration, dosages, dosage forms, and packages.  
		

		
			1.5.“Biosimilar Product” means, on a country-by-country basis, a biologic product (a) whose licensing, approval, or marketing authorization relies in whole or in significant part on a prior approval, licensing or marketing authorization granted any Licensed Product; (b) whose licensing, approval, or marketing authorization relies in whole or in significant part on any data generated in support of a prior approval,  licensing, or marketing authorization granted any Licensed Product; or (c) is determined by the applicable Regulatory Authority to be  “interchangeable” with a Licensed Product as such term is defined in 42 USC §262(i)(3); provided, that, for clarity, the reference to reliance “in significant part” in clauses (a) and (b) of this Section 1.5 shall not mean that regulatory approval of such biologic product does not require the conduct of clinical trials for such product. 
		

		
			1.6.“Business Day” means a day (other than Saturday or Sunday) on which banks are open for business in Geneva, Switzerland and Jiangsu Province, China.  
		

		
			1.7.“Calendar Quarter”  means the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31.
		

		
			1.8.“Calendar Year” means a period of twelve consecutive calendar months beginning on and including January 1 and ending on December 31.
		

		
			1.9.“Clinical Trial” means human clinical studies in which a Licensed Product is administered or otherwise evaluated in humans, including any Phase IV clinical studies sponsored by either Party or co-sponsored by both Parties or investigator initiated human clinical studies funded or otherwise supported by either Party or both Parties.
		

		
			1.10.“CMC Information” means information or data related to, or contained in, the DMFs or the CMC section (or equivalent thereof) of any MAA or other Regulatory Approval for the Licensed Products, or IND or CTA, or any other similar data or information. 
		

		
			1.11.“Commercialize”, “Commercializing” or “Commercialization” means all activities covering the marketing, promotion, selling or offering for sale of a Licensed 
		

		 

		

			2

		

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			Product, including planning, market research, pre-marketing, advertising, educating, marketing, promoting, importing, exporting, distributing and post-marketing safety surveillance and reporting obligations.  For clarity, “Commercialization” shall not include any activities covering Manufacturing or Development of the Licensed Antibodies or the Licensed Products.
		

		
			1.12.“Commercially Reasonable Efforts” means, with respect to a Party’s obligations under this Agreement, including to Develop, Commercialize or Manufacture the Licensed Antibodies or the Licensed Products, those efforts and resources consistent with such Party’s efforts in pursuing the development, commercialization or manufacture of any other comparable pharmaceutical products that are of similar market potential as such Licensed Antibody or Licensed Product being actively Developed, Manufactured or Commercialized under this Agreement by such Party, taking into account all relevant factors including product labeling or anticipated labeling, present and future market potential, past performance of such Licensed Antibody or Licensed Product, financial return, medical and clinical considerations, present and future regulatory environment and competitive market conditions, all as measured by the facts and circumstances at the time such efforts are due; provided that, Commercially Reasonable Efforts with respect to a Licensed Product requires that a Party: (a) set and seek to achieve reasonable objectives for carrying out its obligations, subject to adjustment or modification of such objectives taking into account all relevant factors, including those set forth above, and (b) make and implement decisions and allocate appropriate resources for the purpose of advancing progress with respect to achieving such objectives.  Commercially Reasonable Efforts shall be determined on a market-by-market basis for a particular Licensed Antibody or Licensed Product, and it is anticipated that the level of effort will be different for different markets. 
		

		
			1.13.“Control” means, when used in reference to intellectual property (including Patents, Inventions and Know-How), Confidential Information, other intangible property, or materials, that a Party owns or has a license or sublicense to such intellectual property (including Patents, Inventions and Know-How), Confidential Information, other intangible property or materials, and has the ability to grant access, a license or sublicense or other right to use such intellectual property (including Patents, Inventions and Know-How), Confidential Information, other intangible property or materials, as applicable, as provided for herein; provided, however, that such ability to grant such access, license, sublicense or other right is included only to the extent not (i) requiring the consent of a Third Party or (ii) violating the terms of any agreement or other arrangement with any Third Party.
		

		
			1.14.“Develop”,  “Developing” or “Development” means all activities covering research, non-clinical, preclinical and clinical trials, toxicology testing, manufacturing development, formulation development, statistical analysis and reporting, preparation and submission of applications (including CMC Information) for Regulatory Approvals (including Pricing Approval) of the Licensed Products in the Territories, necessary or reasonably useful or requested or required by a Regulatory Authority as a condition or in support of obtaining or maintaining all Regulatory Approvals (including Pricing Approval) for the Licensed Products in the Territories. For clarity, “Development” shall include all Clinical Trials as well as other post Product Approval studies (including non-interventional studies) conducted for the aforementioned purposes, but shall not include any activities covering Commercialization or Manufacture. 
		

		
			
		

		 

		

			3

		

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			1.15.“Development Activities” means all Development activities that either have applicability for the Development of the Licensed Antibodies and the Licensed Products in a country of the Incyte Territory or a country of the Hengrui Territory or are necessary for the Development of a Licensed Antibody or a Licensed Product.
		

		
			1.16. “Development Costs” means the costs and expenses incurred by a Party or its Affiliates directly attributable to, or reasonably allocable to, the Development of the Licensed Products. “Development Costs” shall include (i) Out-of-Pocket Costs and (ii) internal costs (e.g., staff or administrative) that are directly attributable or reasonably allocable to the Development of the Licensed Products.  
		

		
			1.17.“Development Data” means all non-clinical, clinical, technical, chemical, safety, and scientific data and information and other results, including relevant laboratory notebook information, screening data, Regulatory Data and synthesis schemes, including descriptions in any form, data and other information, generated by or resulting from or in connection with the conduct of Development Activities. 
		

		
			1.18.“Dollar” means a U.S. dollar, and “$” shall be interpreted accordingly.
		

		
			1.19.“EMA” means the European Medicines Agency or its successor.
		

		
			1.20.“Euro” means a Euro, and “€” shall be interpreted accordingly. 
		

		
			1.21.“European Union” or “EU” means the countries of the European Union, as it is constituted as of the Effective Date and such other countries included in the Incyte Territory as of the Effective Date that after the Effective Date become members of the EU.
		

		
			1.22.“FDA” means the U.S. Food and Drug Administration or its successor.
		

		
			1.23.“FD&C Act” means the U.S. Federal Food, Drug and Cosmetic Act, as amended, and the regulations promulgated thereunder.
		

		
			1.24.“Field” means all uses, including diagnosis, therapeutic treatment and prevention of all diseases in animals and humans. 
		

		
			1.25.“First Commercial Sale” means, with respect to a Licensed Product, on a country by country basis, the first sale of such Licensed Product in a given country or other regulatory jurisdiction in the Territories after receipt of Regulatory Approval (not including Pricing Approval) for such Licensed Product in such country or regulatory jurisdiction.  
		

		
			1.26.“Good Clinical Practices” or “GCP” means all applicable Good Clinical Practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses and reporting of clinical trials, including, as applicable, (i) as set forth in European Commission Directive 2001/20/EC relating to the implementation of good clinical practice in the conduct of clinical trials on medicinal products for human use, and brought into law by European Commission Directive 2005/28/EC laying down the principles and detailed guidelines for good clinical practice for investigational medicinal products, (ii) regulation 536/2014 of the European Parliament and of the council of 16 April 2014 on clinical trials on medicinal products for human use, (iii) the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (“ICH”) 
		

		 

		

			4

		

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			Harmonised Tripartite Guideline for Good Clinical Practice (CPMP/ICH/135/95) and any other guidelines for good clinical practice for trials on medicinal products in the EU, (iv) the Declaration of Helsinki (2004) as last amended at the 64th World Medical Association in October 2013 and any further amendments or clarifications thereto, (v) U.S. Code of Federal Regulations Title 21, Parts 50 (Protection of Human Subjects), 56 (Institutional Review Boards) and 312 (Investigational New Drug Application), as may be amended from time to time, and (vi) the equivalent Laws in any relevant country, each as may be amended and applicable from time to time and in each case that provide for, among other things, assurance that the clinical data and reported results are credible and accurate and protect the rights, integrity, and confidentiality of trial subjects. 
		

		
			1.27.“Good Laboratory Practices” or “GLP” means all applicable Good Laboratory Practice standards, including, as applicable, (i) as set forth in European Commission Directive 2004/10/EC relating to the application of the principles of good laboratory practices, as may be amended from time to time, as well as the OECD Series on Principles of Good Laboratory Practice, (ii) the then-current good laboratory practice standards promulgated or endorsed by the FDA as defined in 21 C.F.R. Part 58, and (iii) the equivalent Laws in any relevant country, each as may be amended and applicable from time to time.
		

		
			1.28.“Good Manufacturing Practices” or “GMP” means all applicable Good Manufacturing Practices including (i) the applicable part of quality assurance to ensure that products are consistently produced and controlled in accordance with the quality standards appropriate for their intended use, as defined in European Commission Directive 2003/94/EC laying down the principles and guidelines of good manufacturing practice, (ii) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Sections 210, 211, 601 and 610, (iii) the Rules Governing Medicinal Products in the European Community, Volume IV Good Manufacturing Practice for Medicinal Products, (iv) the principles detailed in the ICH Q7A guidelines, and (v) the equivalent Laws in any relevant country, each as may be amended and applicable from time to time. 
		

		
			1.29.“Governmental Authority” means any multinational, federal, state, local, municipal or other governmental authority of any nature (including any governmental association, division, prefecture, subdivision, department, agency, bureau, branch, office, commission, committee, council, court or other tribunal, such as statutory health insurance funds and their associations), in each case having jurisdiction over the applicable subject matter.
		

		
			1.30.“Hengrui Invention” means any Invention conceived, created or reduced to practice solely by Hengrui or its Affiliates, or a Person under an obligation of assignment to Hengrui or its Affiliates.
		

		
			1.31. “Hengrui Know-How” means all Know-How that is Controlled by Hengrui (or its Affiliates) as of the Effective Date or at any time during the Term, which is necessary or useful for the Development, Manufacture or Commercialization of the Licensed Antibodies and/or Licensed Products.  
		

		
			1.32. “Hengrui Patent” means any Patent in the Territories that is (i) Controlled by Hengrui (or its Affiliates) as of the Effective Date, including the Patents listed in Schedule 
		

		
			
		

		 

		

			5

		

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			1.32, or (ii) that comes under the Control of Hengrui (or its Affiliates) during the Term, in each case of (i) or (ii) which is necessary or useful for the Development, Manufacture or Commercialization of the Licensed Antibodies and/or Licensed Products. 
		

		
			1.33.“Hengrui Technology” means the Hengrui Patents and Hengrui Know-How.
		

		
			1.34.“Hengrui Territory” means China, including Hong Kong, Macau and Taiwan.
		

		
			1.35.“Incyte Invention” means any Invention conceived, created or reduced to practice solely by Incyte or its Affiliates, or a Person under an obligation of assignment to Incyte or its Affiliates.
		

		
			1.36.“Incyte Territory” means the entire world except for countries of the Hengrui Territory.
		

		
			1.37.“IND” means the equivalent application of an Investigational New Drug Application to the equivalent agency of the FDA in the Territories, such as a clinical trial application (“CTA”) or a clinical trial exemption, the filing of which is necessary to commence or conduct clinical testing of a pharmaceutical product in humans in such jurisdiction.    
		

		
			1.38.“Invention” means any Know-How (in each case, whether patentable or not) that is not existing as of the Effective Date and is conceived, created or reduced to practice under this Agreement during the Term.
		

		
			1.39.“Joint Invention” means any Invention that is neither a Hengrui Invention nor an Incyte Invention.
		

		
			1.40.“Joint Patent” means any Patent claiming a Joint Invention.
		

		
			1.41.“Joint Steering Committee” or “JSC” means the joint steering committee formed by the Parties as described in Section 3.1.
		

		
			1.42.“Joint Technology” means the Joint Inventions and the Joint Patents.
		

		
			1.43.“Know-How” means any proprietary data, results, material(s), technology, and nonpublic information of any type whatsoever, in any tangible or intangible form, including know-how, trade secrets, practices, techniques, methods, processes, inventions, developments, specifications, formulations, formulae, materials or compositions of matter of any type or kind (patentable or otherwise), software, algorithms, marketing reports and plans, market research, expertise, technology, test data (including pharmacological, biological, chemical, biochemical, toxicological, preclinical and clinical test data), analytical and quality control data, stability data, other study data and procedures, including Development Data.
		

		
			1.44.“Laws” means all laws, statutes, rules, regulations, directives, decisions, ordinances, guidelines and other pronouncements of any Governmental Authority.
		

		
			1.45.“Lead Antibody” means the humanized anti-human PD-1 monoclonal antibody SHR-1210, as exemplified by the sequence in Exhibit A.  
		

		 

		

			6

		

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			1.46.“Lead Product”  any pharmaceutical product containing the Lead Antibody (alone or with other active ingredients), in all forms, presentations, formulations, administration, dosages, dosage forms, and packages.  
		

		
			1.47.“Licensed Antibodies” means the Lead Antibody and the Back-up Antibodies.  
		

		
			1.48.“Licensed Product” means any pharmaceutical product containing a Licensed Antibody (alone or with other active ingredients), in all forms, presentations, formulations, administration, dosages, dosage forms, and packages.  
		

		
			1.49.“Manufacture” or “Manufacturing” means all activities related to the manufacturing of Licensed Antibodies or Licensed Product, or any ingredient thereof, including manufacturing for research, pre-clinical or clinical use or commercial sale, in-process and lot release testing, release of a Licensed Antibody or Licensed Product, quality assurance activities related to manufacturing of a Licensed Antibody or Licensed Product, packing, labeling, handling and storage of Licensed Product.
		

		
			1.50.“Manufacturing Costs” means the total cost of manufacturing Licensed Antibodies or Licensed Product, as applicable, including the following components (i) external manufacturing fees, including freight and duty; (ii) raw materials, excipients, and packaging components; (iii) direct labor; (iv) factory overhead costs that can be directly attributed to the Licensed Antibodies or Licensed Product, such as equipment maintenance and repair, ongoing stability program costs, other plant services (e.g., waste treatment, waste incineration), supplies, and indirect labor (e.g., indirect hourly wages, salaried personnel, employee benefits, and overtime), and depreciation on direct capital assets (capital assets that can be directly attributed to the Licensed Antibodies or Licensed Product); and (v) allocations of indirect factory overhead and site support costs, such as utilities, quality assurance/testing, plant security, site science and technology (e.g., process design, process improvement), engineering, plant management/administration, building maintenance and repairs, safety and environmental, production planning and scheduling, depreciation on indirect capital assets, procurement, warehousing, and corporate site services (e.g., Finance, Human Resources, Information Services, etc.).   
		

		
			1.51.“Marketing Authorization Application” or “MAA” means an application to the appropriate Regulatory Authority for approval to market the Licensed Products (but excluding Pricing Approval) in any particular country or regulatory jurisdiction, including such application filed with the FDA, with the EMA pursuant to the centralized procedure, with the MHLW or with the applicable Regulatory Authority of a country in the Territories.  
		

		
			1.52.“MHLW”  means Japan’s Ministry of Health, Labor and Welfare and any of its subsidiary agencies or local governments responsible for pharmaceutical matters, or any successor agency having substantially the same function.  
		

		
			1.53.“Net Sales” means the gross amount invoiced by or on behalf of Incyte or any of its respective Affiliates or sublicensees (or any permitted distributors) in accordance with this Agreement to independent Third Parties on account of sales of the Licensed Products, less the following deductions specifically and solely related to the Licensed Products and actually allowed:    
		

		 

		

			7

		

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			(a)customary trade, cash or quantity discounts, including early payment cash discounts, actually paid, granted or accrued, to the extent not already reflected in the amount invoiced; 
		

		
			(b)retroactive price reductions that are actually allowed or granted;
		

		
			(c)value added tax, excise and sales taxes and customs duties to the extent included in the price and separately itemized on the invoice price (but specifically excluding, for clarity, any income taxes assessed against the income arising from such sale);
		

		
			(d)outbound freight, transportation, shipment and insurance costs to the extent included in the price and separately itemized; 
		

		
			(e)returns, rebates, chargebacks and other allowances;
		

		
			(f)bad debt; 
		

		
			(g)compulsory payments and rebates directly related to the sale of the Licensed Products paid to a Governmental Authority pursuant to governmental regulations by reason of any national or local health insurance program or similar program; and
		

		
			(h)any other adjustment to gross sales in order to calculate net sales as customarily calculated by Incyte in accordance with GAAP. 
		

		
			In the case of any sale of the Licensed Products for value other than in an arm’s length transaction exclusively for cash, such as barter or counter-trade, Net Sales shall be determined by referencing Net Sales at which substantially similar quantities of the Licensed Products are sold in an arm’s length transaction for cash.
		

		
			Notwithstanding the foregoing, amounts billed by Incyte, its Affiliates, its sublicensees or any permitted distributors for the sale of Licensed Product among Incyte, its Affiliates, its sublicensees or any permitted distributor for resale shall not be included in the computation of Net Sales hereunder.  Net Sales shall be accounted for in accordance with U.S. generally accepted accounting principles (“GAAP”), consistently applied.
		

		
			If a Licensed Product is sold as part of a product containing an additional clinically active component, Net Sales of Product, for the purpose of determining royalty payments, shall be determined by multiplying Net Sales (as defined above) of the combination product by the fraction A/(A+B), where A is the average sales price of the Licensed Products containing the Licensed Antibody alone when sold separately in finished form and B is the average sale price of the additional clinically active component sold separately in finished form, provided that, if the individual components are not sold separately, the Parties will agree in good faith a reasonable apportionment of the sale price between the components of the Licensed Products in question.
		

		
			1.54. “Out-of-Pocket Costs” means costs and expenses, excluding value added tax, paid to Third Parties (or payable to Third Parties and accrued in accordance with GAAP), other than Affiliates or employees, by either Party. 
		

		 

		

			8

		

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			1.55.“Patents” means patents and patent applications and all substitutions, divisions, continuations, continuations-in-part, any patent issued with respect to any such patent applications, any reissue, reexamination, utility models or designs, renewal or extension (including any supplementary protection certificate) of any such patent, and any confirmation patent or registration patent or patent of addition based on any such patent, and all counterparts thereof in any country. 
		

		
			1.56.“Patent Term Extension” means any term extensions, supplementary protection certificates and equivalents thereof offering Patent protection beyond the initial term with respect to any issued Patents.
		

		
			1.57.“PD-1” means programmed cell death protein 1. 
		

		
			1.58.“PD-1 Antibody” means any a monospecific monoclonal antibody that binds to the PD-1 receptor and blocks its interaction with the PD-1 ligands PD-L1 and PD-L2.  
		

		
			1.59.“Person” means any corporation, limited or general partnership, limited liability company, joint venture, trust, unincorporated association, governmental body, authority, bureau or agency, any other entity or body, or an individual.
		

		
			1.60.“Phase I Clinical Trial” means a human clinical trial in any country that would satisfy the requirements of 21 CFR 312.21(a) or the foreign equivalent thereof.  
		

		
			1.61.“Pricing Approval” means the approval, agreement, determination or decision from a Governmental Authority establishing the price and/or reimbursement for the Licensed Products for sale in a given country or regulatory jurisdiction, as required by applicable Laws in such country or other regulatory jurisdiction prior to or subsequent to the marketing and sale of the Licensed Products in such country or regulatory jurisdiction.
		

		
			1.62.“Product Approval” means the approval by a Governmental Authority necessary for the marketing and sale of the Licensed Products in a given country or regulatory jurisdiction, which may include the approval of an MAA (but shall not include any Pricing Approvals).
		

		
			1.63.“Product Complaint” means any written, verbal or electronic expression of dissatisfaction regarding any Licensed Product sold by or on behalf of either Party (or any of its Affiliates or sublicensees) in the Territories, including reports of actual or suspected product tampering, contamination, mislabeling or inclusion of improper ingredients. 
		

		
			1.64.“Registration Study” means a Clinical Trial of a Licensed Product which is sufficiently powered to demonstrate the efficacy and safety of such Licensed Product for purposes of obtaining a Product Approval of such Licensed Product in the U.S. or EU.  
		

		
			1.65.“Regulatory Approvals” means all necessary approvals (including INDs, Product Approvals, Pricing Approvals and, in each case any supplements and amendments thereto), licenses, registrations or authorizations of any Governmental Authority, necessary for the Development, Manufacture, and Commercialization of the Licensed Products in a given country or regulatory jurisdiction.  
		

		 

		

			9

		

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			1.66.“Regulatory Authority” means, in a particular country or regulatory jurisdiction, any applicable Governmental Authority involved in granting Regulatory Approvals in such country or regulatory jurisdiction, including (i) in the U.S., the FDA, and (ii) in the European Union, the European Commission and relevant national medicines regulatory authorities.  
		

		
			1.67.“Regulatory Costs” means the costs and expenses incurred by a Party or its Affiliates attributable to, or reasonably allocable to, the filing fees associated with submissions for Regulatory Approvals for the Licensed Products, including the MAA, Product Approval, Pricing Approvals and Manufacturing-related Regulatory Approvals, the preparation, obtaining or maintaining of Regulatory Materials subsequent to receipt of the respective Regulatory Approvals for which such Regulatory Material is necessary and the cost of maintaining such respective Regulatory Approvals after it was received, including expenses for meetings with Regulatory Authorities after filing for the respective Regulatory Approval.
		

		
			1.68.“Regulatory Data” means any and all research data, pharmacology data, chemistry, manufacturing and control data, preclinical data, clinical data and all other documentation submitted, or required to be submitted, to Regulatory Authorities in association with obtaining or maintaining all Regulatory Approvals (including Pricing Approval) for the Licensed Products in the Territories (including any applicable Drug Master Files (“DMFs”), Chemistry, Manufacturing and Control (“CMC”) data, or similar documentation). 
		

		
			1.69.“Regulatory Materials” means regulatory applications, submissions, notifications, communications, correspondence, registrations, Regulatory Approvals and/or other filings made to, received from or otherwise conducted with a Regulatory Authority that are necessary in order to Develop, Manufacture, obtain and maintain Regulatory Approvals, market, sell or otherwise Commercialize the Licensed Products in a particular country or regulatory jurisdiction.  Regulatory Materials include materials relating to pre-IND meetings, INDs, pre-MAA meetings (including the biologics license application filed with the FDA), MAAs, presentations, responses, and applications for other Regulatory Approvals. 
		

		
			1.70.“Royalty Term” means, on a country-by-country and Licensed Product-by-Licensed Product basis the period of time beginning on the First Commercial Sale of a Licensed Product in a given country in the Incyte Territory and ending upon the later of: (i) the [**] of the First Commercial Sale of such Licensed Product in such country and (ii) the date on which such Licensed Product (including, the use, sale, offer for sale, importation, development or manufacturing thereof) is no longer covered by a Valid Claim in such country.    
		

		
			1.71.“SAE” means Serious Adverse Event.
		

		
			1.72.“Superiority” with respect to a study, will be concluded if the null hypothesis of equal efficacy is rejected at the significance level Alpha[**], or equivalently, the lower limit of [**] confidence interval of the difference between Test and Control (nivolumab or pembrolizumab) is greater than zero (0).  (Assuming there is no superiority margin).  If the study has multiple testings, the alpha value needs to be split (to keep the overall Type I error rate to no more than [**]) and the split method needs to be pre-specified in the protocol. 
		

		
			
		

		 

		

			10

		

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			1.73.“SUSAR” means Suspected Unexpected Serious Adverse Reaction. 
		

		
			1.74.“Territories” means, collectively, the Hengrui Territory and the Incyte Territory, and “Territory” means the Hengrui Territory, with respect to Hengrui, or the Incyte Territory, with respect to Incyte, as applicable.
		

		
			1.75.“Third Party” means any Person other than Hengrui or Incyte or their respective Affiliates.
		

		
			1.76.“United States” or “U.S.” means the United States of America and its possessions and territories (which includes the Commonwealth of Puerto Rico and the District of Columbia).
		

		
			1.77.“Valid Claim” means a claim of an issued and unexpired Hengrui Patent that (i) has not been rejected, revoked or held to be invalid or unenforceable by a court or other authority of competent jurisdiction, from which decision no appeal can be further taken and (ii) a claim within a patent application which application has not been pending for more than [**] years with respect to filings in the U.S., or [**] years with respect to filings outside the U.S., in each case from the date of its first priority filing and which claim has not been finally abandoned, disclaimed or admitted to be invalid or unenforceable through reissue or disclaimer.
		

		
			Interpretation.  Except where expressly stated otherwise in this Agreement, the following rules of interpretation apply to this Agreement: (a) “include”, “includes” and “including” are not limiting; (b) “hereof”, “hereto”, “herein” and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement; (c) words of one gender include the other gender; (d) references to a contract or other agreement mean such contract or other agreement as from time to time amended, modified or supplemented; (e) references to a Person are also to its permitted successors and assigns; (f) references to an “Article”, “Section”, “Exhibit” or “Schedule” refer to an Article or Section of, or an Exhibit or Schedule to, this Agreement, unless expressly stated otherwise; and (g) references to a law include any amendment or modification to such law and any rules and regulations issued thereunder, whether such amendment or modification is made, or issuance of such rules and regulations occurs, before or after the date of this Agreement.
		

		
			Additional Definitions. The following terms have the meanings set forth in the corresponding Sections of this Agreement: 
		

			
					
						Term

					
					
						Section

				
	
					
						“Abandoned Development”

					
					
						4.1.2(i)

				
	
					
						“Acquirer”

					
					
						11.10

				
	
					
						“Acquirer Technology”

					
					
						11.10.1

				
	
					
						“Agreement”

					
					
						Preamble

				
	
					
						“Alliance Manager”

					
					
						3.10

				
	
					
						“Audit”

					
					
						7.10

				
	
					
						“Audited Party”

					
					
						7.10

				
	
					
						“Auditing Party”

					
					
						7.10

				
	
					
						“Australian Study”

					
					
						4.1.6(i)

				
	
					
						“Bankrupt Party”

					
					
						13.7

				

		
			 
		

		
			
		

		

		 

		

			11

		

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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						“Change of Control”

					
					
						11.10

				
	
					
						“Clinical Supply Agreement”

					
					
						4.4

				
	
					
						“CMC”

					
					
						1.68

				
	
					
						“Committee”

					
					
						3.7

				
	
					
						“Confidential Information”

					
					
						11.1

				
	
					
						“Controlling Party”

					
					
						8.4.1(a)

				
	
					
						“CTA”

					
					
						1.37

				
	
					
						“Current Protocol”

					
					
						4.1.6(i)

				
	
					
						“Disclosing Party”

					
					
						11.1

				
	
					
						“DMFs”

					
					
						1.68

				
	
					
						“Effective Date”

					
					
						Preamble

				
	
					
						“GAAP”

					
					
						1.53

				
	
					
						“Hengrui”

					
					
						Preamble

				
	
					
						“Hengrui Co-Development Option”

					
					
						4.1.5

				
	
					
						“Hengrui Combination Study”

					
					
						2.3

				
	
					
						“Hengrui Product”

					
					
						2.3

				
	
					
						“ICH”

					
					
						1.26

				
	
					
						“Incyte”

					
					
						Preamble

				
	
					
						“Incyte Royalty Payments”

					
					
						7.3

				
	
					
						“Incyte Royalty Rates”

					
					
						7.3

				
	
					
						“Indemnification Claim Notice”

					
					
						10.3.1

				
	
					
						“Indemnified Party” and “Indemnifying Party”

					
					
						10.3.1

				
	
					
						“Indemnitee” and “Indemnitees”

					
					
						10.3.1

				
	
					
						“Infringement Claim”

					
					
						8.4.1

				
	
					
						“Joint Steering Committee” or “JSC”

					
					
						1.41

				
	
					
						“Losses”

					
					
						10.1

				
	
					
						“Party” or “Parties”

					
					
						Preamble

				
	
					
						“Receiving Party”

					
					
						11.1

				
	
					
						“Recovery”

					
					
						8.4.2(c)(iv)

				
	
					
						“Redacted Agreement”

					
					
						11.6.2

				
	
					
						“SEC”

					
					
						11.6.1

				
	
					
						“Segregated Technology”

					
					
						11.10.2

				
	
					
						“Senior Officer”

					
					
						3.5.1

				
	
					
						“Study Modifications”

					
					
						4.1.6(i)

				
	
					
						“Term”

					
					
						12.1

				
	
					
						“Third Party Claim”

					
					
						10.1

				
	
					
						“Third Party IP”

					
					
						7.5.2(a)

				
	
					
						“Third Party IP Agreement”

					
					
						7.5.2(a)

				
	
					
						“VAT”

					
					
						7.6

				

		
			Article 2
Licenses
		

		
			2.1Grant to Incyte.    Subject to the terms and conditions of this Agreement, Hengrui hereby grants to Incyte, and Incyte hereby accepts, an exclusive (even as to Hengrui and its Affiliates but subject to Hengrui’s retained rights in Section 2.3), royalty-bearing license, including the right to sublicense through multiple tiers (subject to the restrictions set forth in Section 2.5.3), under the Hengrui Technology and Hengrui’s interest in the Joint 
		

		 

		

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			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			Technology to (i) Develop the Licensed Antibodies and Licensed Product in the Field for purposes of Commercialization in the Field and in the Incyte Territory, (ii) Manufacture the Licensed Antibodies and Licensed Product for purposes of (a) Development in the Field for Commercialization in the Field and in the Incyte Territory and (b) Commercialization in the Field and in the Incyte Territory, and (iii) Commercialize, use and otherwise exploit the Licensed Antibodies and Licensed Product in the Field and in the Incyte Territory.    
		

		
			2.2Additional Licensing Provisions.  
		

		
			2.2.1No Implied Licenses; Retained Rights.  Except as explicitly set forth in this Agreement, neither Party grants any license, express or implied, under its intellectual property rights to the other Party, whether by implication, estoppel or otherwise.    
		

		
			2.2.2Documents and Declarations.  Each Party shall execute all documents, give all declarations regarding the licenses granted hereunder and reasonably cooperate with the other Party upon its reasonable request at the cost of the requesting Party to the extent such documents, declarations and/or cooperation are required for the recordal or registration of the licenses granted hereunder at patent office(s) in the requesting Party’s Territory.
		

		
			2.3Hengrui Retained Rights.   Hengrui shall retain rights under the Hengrui Technology to conduct Clinical Trials of the Licensed Antibodies in combination with Hengrui wholly-owned compounds (any such wholly-owned compound of Hengrui, other than the Licensed Antibodies, being referred to herein as a “Hengrui Product”) in both the Hengrui Territory and the Incyte Territory (each, a “Hengrui Combination Study”); provided that any such Hengrui Combination Study must be approved by (i) Incyte as provided in the last sentence of Section 3.1.2 and (ii) the applicable Regulatory Authorities in accordance with applicable Law.  In the event Hengrui desires to conduct a Hengrui Combination Study in the Incyte Territory, Hengrui shall purchase all Licensed Antibody or Licensed Product, as applicable, for use in such Hengrui Combination Study in the Incyte Territory from Incyte at [**] in accordance with the terms and conditions of a supply agreement to be negotiated between the Parties in good faith and on commercially reasonable terms.  For the avoidance of doubt, Hengrui’s retained rights under this Section 2.3 are limited solely to the right to conduct a Hengrui Combination Study in the Territories and in no event shall Hengrui have the right to Commercialize any Licensed Antibodies or Licensed Products in the Incyte Territory, including any Licensed Antibodies or Licensed Products which are the subject of a Hengrui Combination Study.    A clinical supply agreement will be negotiated in good faith and executed by the Parties within [**] days of the execution of this Agreement which will govern supply of the Licensed Antibody and / or Licensed Product for use in the Hengrui Combination Studies; provided that such clinical supply agreement shall be on commercially reasonable terms, including  (i) the supply price shall be [**] and (ii) all Licensed Antibodies and / or Licensed Products supplied under such clinical supply agreement shall be Manufactured in accordance with GMP and all applicable Laws.  As between the Parties, Hengrui will have the sole right to promote and otherwise Commercialize its Hengrui Products throughout the world, including the Incyte Territory, consistent with the approved label for any such Hengrui Product (including any approved use of such Hengrui Product in combination with the Licensed Products); provided, that, for 
		

		 

		

			13

		

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			clarity, Hengrui shall have no right to promote or otherwise Commercialize the Licensed Antibodies or Licensed Products in the Incyte Territory, and shall not in connection with such promotion of such Hengrui Product in the Incyte Territory make any statement with respect to the Licensed Antibodies or Licensed Products except as may specifically be set forth in the approved label for such Hengrui Product; provided, further, that Incyte shall have the right to review and provide input on all briefing documents sent to Regulatory Authorities in the Incyte Territory and lead all meetings and other interactions with Regulatory Authorities in the Incyte Territory with respect to the Licensed Antibodies and Licensed Products, including meetings or other interactions by Hengrui with Regulatory Authorities with respect to the Licensed Antibodies or Licensed Products in relation to any Hengrui Combination Study.  For clarity, the license granted by Hengrui to Incyte under Section 2.1 includes the right for Incyte to Develop the Licensed Antibodies in combination with other compounds in both the Incyte Territory and the Hengrui Territory, subject to the oversight of the JSC under Section 3.1.1, provided that Hengrui shall have final decision making authority for all decisions related clinical Development of the Licensed Antibodies in combination with other compounds in the Hengrui Territory; provided further, that any approvals related to Incyte’s clinical Development of the Licensed Antibodies in combination with other compounds in the Hengrui Territory shall not be unreasonably withheld, conditioned or delayed.
		

		
			2.4Transfer of Hengrui Know-How.  Within [**] after the Effective Date, Hengrui shall furnish or make available to Incyte a data package that shall include tangible or physical embodiments or electronic files of the Hengrui Know-How existing at the Effective Date,  with any Hengrui Know-How that is necessary for or included in any IND application for a Licensed Product translated into English by or on behalf of Hengrui.  If Incyte requests that any additional Hengrui Know-How be translated into English beyond that necessary for or included in any IND application for a Licensed Product, then the Parties shall share equally the cost of such translation.  In the event Incyte reasonably believes at any time during the Term that the tangible or physical embodiments or electronic file of the Hengrui Know-How furnished by Hengrui is incomplete, Incyte shall provide written notice thereof to Hengrui, and Hengrui shall furnish such missing Hengrui Know-How as promptly as practicable after receipt of Incyte’s written notice hereunder.  Hengrui shall use its reasonable endeavors to answer all questions received from Incyte regarding the Hengrui Know-How as soon as reasonably possible after receipt of Incyte’s request.  
		

		
			2.5Performance by Affiliates, Subcontractors and Sublicensees.
		

		
			2.5.1Performance by Affiliates.  The Parties recognize that each Party may perform some or all of its obligations under this Agreement through Affiliates; provided, however, that each Party shall remain responsible for and be guarantor of the performance by its Affiliates and shall cause its Affiliates to comply with the provisions of this Agreement in connection with such performance.  Each Party hereby expressly waives any requirement that the other Party exhaust any right, power or remedy, or proceed against an Affiliate, for any obligation or performance hereunder prior to proceeding directly against such Party.  Wherever in this Agreement the Parties delegate responsibility to Affiliates, the Parties agree that such entities may not make decisions inconsistent with this Agreement, amend the terms of this Agreement or act contrary to its terms in any way.  
		

		 

		

			14

		

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			2.5.2Subcontractors.  Each Party shall ensure that each of its subcontractors accepts and complies with all of the terms and conditions of this Agreement, and such Party shall guarantee its subcontractors’ performance under this Agreement.  For the avoidance of doubt, each Party will remain directly responsible for the Development and Commercialization obligations and all amounts owed to the other Party under this Agreement.  Each Party hereby expressly waives any requirement that the other Party exhaust any right, power or remedy, or proceed against a subcontractor, for any obligation or performance hereunder prior to proceeding directly against such Party.    
		

		
			2.5.3Sublicensees.  Incyte shall have the right to sublicense any of the rights granted to Incyte under Section 2.1 to an Affiliate or Third Party; provided, however, that Incyte shall provide Hengrui with written notice of any such sublicense to a Third Party.  
		

		
			2.5.4Conditions of Sublicenses and Subcontracts.  With respect to each such sublicense pursuant to Section 2.5.3 or subcontract pursuant to Section 2.5.2, as applicable, each Party shall ensure that each of its sublicensees and subcontractors accepts and complies with all applicable terms and conditions of this Agreement, including with respect to provisions related to the use and ownership of Know-How and Patents, and such Party shall remain responsible for the performance of its sublicensees and subcontractors hereunder, and any such sublicense or subcontract shall (a) be subject and subordinate to the terms and conditions of this Agreement, (b) contain terms and conditions which are not inconsistent with the terms and conditions of this Agreement, (c) not in any way diminish, reduce or eliminate any of such Party’s rights and obligations under this Agreement, and (d) impose on the sublicensee or subcontractor all applicable obligations under the terms of this Agreement, including, to the extent applicable, the reporting, audit, inspection and confidentiality provisions hereunder, as well as a provision prohibiting such sublicensee or subcontractor from sublicensing or subcontracting in violation of the terms of this Agreement.  For the avoidance of doubt, each Party will remain directly responsible for all of its Development and Commercialization obligations and amounts owed to the other Party under this Agreement.  Each Party hereby expressly waives any requirement that the other Party exhaust any right, power or remedy, or proceed against a sublicensee or subcontractor, for any obligation or performance hereunder prior to proceeding directly against such Party.  Each Party shall provide the other Party with a copy of each such sublicense agreement granted pursuant to Section 2.5.3 within [**] after the execution thereof (redacted as such Party reasonably determines to protect confidential or commercially sensitive information. except to the extent necessary to determine compliance with the terms and conditions of this Agreement). 
		

		
			
		

		 

		

			15

		

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			2.6Restrictive Covenants. 
		

		
			2.6.1Activities.  Each Party hereby covenants and agrees that, during the Term, it shall not (and shall cause its respective Affiliates, sublicensees and subcontractors not to), either directly or indirectly, Commercialize the Licensed Antibodies or the Licensed Products in countries outside of its respective Territory.  Without limiting the generality of the foregoing, except as expressly permitted under this Agreement, neither Party shall (i) engage in any advertising activities relating to the Licensed Antibodies or the Licensed Products directed solely to customers located in countries within the Territory of the other Party, or (ii) solicit or fulfill orders from any prospective purchaser located in countries within the Territory of the other Party.  The restrictions in this Section 2.6.1 shall survive expiration of this Agreement. 
		

		
			2.6.2Contracts.  In the event that either Party (or any of its Affiliates) enters into any agreement with a subcontractor (including, any distributors or wholesalers) or a sublicensee for the Licensed Products, it shall include in any and all such agreement provisions substantially similar to those set forth in Section 2.6.1 such that such subcontractor or sublicensee, as applicable, shall only be authorized to Commercialize the Licensed Products within the applicable countries in the respective Territory of such Party, and shall be prohibited from Commercializing the Licensed Products outside of such Territory. 
		

		
			2.6.3Jurisdictional Compliance.  It is the desire and intent of the Parties that the restrictive covenants contained in this Section 2.6 be enforced to the fullest extent permissible under the Laws and public policies applied in each jurisdiction in which enforcement is sought.  Hengrui and Incyte believe that the restrictive covenants in this Section 2.6 are valid and enforceable.  However, if any restrictive covenant should for any reason become or be declared by a competent court or competition authority to be invalid or unenforceable in any jurisdiction, such restrictive covenant shall be deemed to have been amended to the extent necessary in order that such provision be valid and enforceable, such amendment shall apply only with respect to the operation of such provision of this Section 2.6 in the particular jurisdiction in which such declaration is made.  
		

		
			Article 3
Governance
		

		
			3.1Joint Steering Committee.    The Parties shall establish the JSC within [**] after the Effective Date.  The JSC shall perform the following functions:    
		

		
			3.1.1Review, coordinate and discuss the overall strategy for Developing, Manufacturing and Commercializing the Licensed Products in the Territories, including the overall strategy for seeking Regulatory Approvals for the Licensed Products in the Territories.  For clarity, Hengrui shall have final approval over clinical Development (but not preclinical Development or Manufacturing) in the Hengrui Territory (such approval not to be unreasonably withheld, conditioned or delayed);
		

		 

		

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			3.1.2Review and discuss any proposed Hengrui Combination Study, and any decisions with respect to a proposed Hengrui Combination Study shall take into consideration the potential impact of such Hengrui Combination Study on the safety and efficacy profile of the Licensed Antibodies or Licensed Products, as applicable.  For clarity, Incyte shall have final approval over Development activities, including Hengrui Combination Studies, in the Incyte Territory;
		

		
			3.1.3Facilitate the exchange of information between the Parties under this Agreement regarding the Development, Manufacturing and Commercialization of the Licensed Products in the Territory and establishing procedures for the efficient sharing of information and materials and Know-How reasonably necessary or useful for the Development, Manufacture or Commercialization of the Licensed Products in the Territories; 
		

		
			3.1.4Review any Development or Commercialization status reports provided in accordance with Section 4.3.2 and Section 6.2.1, respectively;
		

		
			3.1.5Coordinate and facilitate exchange by both Parties of CMC Information, Regulatory Data and Regulatory Materials in support of filings, facility inspections and Product launch in the Incyte Territory and the Hengrui Territory;
		

		
			3.1.6Review and discuss the contents of all submissions to Regulatory Authorities and Governmental Authorities in the Territories for Regulatory Approvals (including Pricing Approvals), Regulatory Materials and all necessary filing and registration activities related thereto;
		

		
			3.1.7Review Regulatory Approvals for the Licensed Products in the Territories;
		

		
			3.1.8Review, discuss and oversee issues regarding pharmacovigilance and safety in the Territories (including the maintenance of the global safety database);
		

		
			3.1.9Review the progress of the other Committees, if any;
		

		
			3.1.10Resolve disputes and other matters referred to the JSC by any other Committee, if any; and 
		

		
			3.1.11Have such other responsibilities as may be assigned to the JSC pursuant to this Agreement or as may be mutually agreed upon by the Parties in writing from time to time.  
		

		
			3.2Joint Steering Committee Membership.  Hengrui and Incyte shall each designate two (2) representatives of appropriate seniority and experience to serve on the JSC by written notice to the other Party.  Either Party may designate substitutes for its representatives if one (1) or more of such Party’s designated representatives are unable to be 
		

		 

		

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			present at a meeting.  From time to time each Party may replace its representatives by written notice to the other Party specifying the prior representative(s) and their replacement(s).  The JSC shall be chaired by a representative of Incyte.  One member of the JSC shall serve as secretary of the JSC at each Committee meeting, and the secretary shall alternate from meeting to meeting between an Incyte Committee member and a Hengrui Committee member.    The chairperson shall be responsible for (i) calling meetings, (ii) preparing and issuing minutes of each such meeting within [**] thereafter, and (iii) preparing and circulating an agenda for the upcoming meeting; provided that the chairperson shall consider including any agenda items proposed by either Party no less than [**] prior to the next scheduled JSC meeting.    
		

		
			3.3Joint Steering Committee Meetings.  The JSC shall hold at least one (1) meeting per Calendar Quarter at such times during such Calendar Quarter as it elects to do so, provided that the JSC shall meet more or less frequently as Incyte and Hengrui mutually agree.  Meetings of the JSC shall be effective only if at least one (1) representative of each Party is present or participating or, in case no representative of one Party being present or participating, such Party’s chairperson refuses to calling a meeting or such Party’s representatives refuse to accept invitations to meetings or participate in meetings, each over a period of more than one Calendar Quarter. The JSC may meet either (i) in person at either Party’s facilities or at such locations as the Parties may otherwise agree or (ii) by audio or video teleconference.  Other representatives of each Party involved with the Licensed Products may attend meetings as non-voting participants, subject to the confidentiality provisions set forth in Article 11.  Additional meetings of the JSC may also be held with the consent of each Party, as required to resolve disputes, disagreements or deadlocks in the other Committees or as otherwise required under this Agreement, and neither Party shall unreasonably withhold its consent to hold such additional meetings.  Each Party shall be responsible for all of its own expenses incurred in connection with participating in the JSC meetings or any of the other Committee meetings.  
		

		
			3.4Decision-Making.  As expressly set forth in Section 3.1, the JSC may make decisions with respect to any subject matter that is subject to the JSC’s decision-making authority and functions.  All decisions of the JSC shall be made by unanimous vote or unanimous written consent, with Incyte and Hengrui each having, collectively, among its respective members, one (1) vote in all decisions.  The JSC shall use commercially reasonable efforts to resolve the matters within its roles and functions or otherwise referred to it.  If the JSC cannot reach consensus on a matter within [**] after such matter has been brought to the JSC’s attention, then such matter shall be first referred to the Chief Medical Officer of Incyte and the Chairman of the Board of Hengrui.  Such officers shall use their commercially reasonable efforts to reach mutually acceptable resolutions on all such disputed matters.  If such officers are unable to resolve such dispute within [**] after the dispute is first referred to such officers, the matter shall be resolved as provided in Section 3.5.   
		

		
			3.5Dispute Resolution Procedures.  In the event that any matter remains unresolved pursuant to Section 3.4, then the following shall apply: 
		

		
			3.5.1With respect to all disputes arising between the Parties under the JSC, if the Parties are unable to resolve such dispute pursuant to Section 3.4, either Party may refer such dispute in writing to the Chief Executive Officer of each of the Parties, or a designee from senior 
		

		 

		

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			management with decision-making authority (the Chief Executive Officer or such designee, the “Senior Officer”), for attempted resolution by good-faith negotiations within [**] after such notice is received.   If the Chief Executive Officers are unable to resolve such dispute within [**] after such dispute is first referred to them pursuant to this Section 3.5.1, then Incyte shall have the final decision making authority in the Incyte Territory and Hengrui shall have final decision making authority in the Hengrui Territory.  In exercising its final decision making authority, (i) neither Party may (A) require the other Party to violate any applicable Law or any agreement it may have with any Third Party or (B) amend the terms and conditions of this Agreement, and (ii) Incyte may not require Hengrui to conduct Development Activities beyond those contemplated by Section 4.1.2. 
		

		
			3.5.2Nothing in this Section 3.5 shall affect the right of a Party to exercise its rights or remedies for a breach of this Agreement by the other Party.
		

		
			3.6Limits on JSC and Committee Authority.  The JSC and any other Committee shall have only the powers assigned expressly to it in this Agreement, and shall not have any power to amend, modify or waive compliance with this Agreement.  In furtherance thereof, each Party shall retain the rights, powers and discretion granted to it under this Agreement and no such rights, powers or discretion shall be delegated or vested in the JSC and any other Committee unless such delegation or vesting of rights is expressly provided for in this Agreement or the Parties expressly so agree in writing.  Without limiting the generality of the foregoing, neither the JSC nor any other Committee shall have decision-making authority with respect to (but may review and discuss) (i) any Commercialization activities for the Licensed Products in the Territories, (ii) Development Activities by Hengrui in the Hengrui Territory, (iii) Development Activities by Incyte in the Incyte Territory, (iv) approving of the publication of the conduct and outcomes of Clinical Trials pursuant to Section 11.7, and (v) obtaining, maintaining or enforcing Patent protection and market and data exclusivity for the Licensed Products in the Territories.   
		

		
			3.7Committees.  From time to time, the JSC may establish and delegate duties to other sub-committees or directed teams (each, a “Committee”) to oversee particular projects or activities.  Each such Committee shall be constituted and shall operate as the JSC determines; provided that each Committee shall have equal representation from each Party.  Committees may be established on an ad hoc basis for purposes of a specific project, or on such other basis as the JSC may determine.  Each Committee and its activities shall be subject to the oversight, review and approval of, and shall report to, the JSC.  In no event shall the authority of a Committee exceed that of the JSC. 
		

		
			3.8Minutes of Committee Meetings.  Definitive minutes of all Committee meetings shall be finalized after the meeting to which the minutes pertain as follows:   
		

		
			3.8.1Within [**] after a Committee meeting, the secretary of such Committee shall prepare and distribute to all members of such committee draft minutes of the meeting.  Such minutes shall provide a list of any issues yet to be resolved, either within such Committee or through the relevant resolution process.
		

		 

		

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			3.8.2The members of each Committee shall then have [**] after receiving such draft minutes to collect comments thereon and provide them to the secretary of such Committee.
		

		
			3.8.3Upon the expiration of such second [**], the Parties shall have an additional [**] to discuss each other’s comments and finalize the minutes.  The secretary and chairperson(s) of such Committee shall each sign and date the final minutes.  The signature of such chairperson(s) and secretary upon the final minutes shall indicate each Party’s assent to the minutes.
		

		
			3.9Exchange of Information.  Each Party shall keep the other Party fully and promptly informed as to its progress and activities relating to the Development and Commercialization of the Licensed Antibodies and the Licensed Products in the Territories, including with respect to regulatory matters and meetings with Regulatory Authorities, by way of updates to appropriate Committees or to the other Party in the event that the Committees are disbanded and as otherwise specified in this Agreement, or as reasonably requested from time to time by the other Party, but in any case at least once a Calendar Quarter.  If and to the extent reasonably requested by either Party, the other Party shall promptly provide to such Party or the JSC copies of the Regulatory Data or Regulatory Materials. In connection therewith, (i) Hengrui and Incyte shall provide each other with such information regarding their respective Development Activities, or otherwise relating to the Licensed Antibodies and the Licensed Products, as the other Party may reasonably request from time to time during the Term, (ii) Hengrui shall disclose to Incyte any Hengrui Know-How once it becomes available to Hengrui and (iii) each Party shall disclose to the other Party any Joint Technology once it becomes available to such Party.   
		

		
			3.10Alliance Managers.  Promptly following the Effective Date, each Party shall designate an individual to serve as the main point of contact for each Party to exchange information, facilitate communication and coordinate the Parties’ activities under this Agreement relating to the Licensed Products and to provide day-to-day support to the Committees (each, an “Alliance Manager”).  Each Alliance Manager shall be experienced in project management and shall have appropriate experience in the pharmaceutical industry.  Each Party may change its designated Alliance Manager from time to time upon written notice to the other Party; provided that the Parties recognize and agree as to the importance of continuity in their relationship and the activities hereunder.  
		

		
			Article 4
Development
		

		
			4.1Overview.
		

		
			4.1.1Overview of General Development Activities.  Subject to the terms and conditions of this Agreement, during the Term, (i) Hengrui shall be responsible for conducting all Development Activities in the Hengrui Territory and (ii) Incyte shall be responsible for conducting all Development Activities in the Incyte Territory, subject to Section 4.1.6.  Without limiting the foregoing, Incyte shall use Commercially Reasonable Efforts to Develop the Licensed Products in the Incyte Territory.   The 
		

		 

		

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			Parties shall conduct the Development Activities in their respective Territories in compliance with applicable Laws, GCPs, GLPs, GMPs and based on their respective experience, capabilities and capacity.  Each Party shall utilize adequately skilled personnel to perform or oversee, as applicable, the Development and Manufacturing of the Licensed Antibodies and the Licensed Products, in accordance with the terms of this Agreement.  
		

		
			4.1.2Abandoned Development.    
		

		
			(i)If, during the Term, prior to First Commercial Sale of a Licensed Product in an indication in the Field in the Incyte Territory, Hengrui determines in good faith that Incyte has ceased to conduct any Development activities in good faith for at least [**] and no significant constraints on such Development imposed by the actions or omissions of Hengrui, or by a Regulatory Authority, or by a Force Majeure event have occurred during such period (“Abandoned Development”), then Hengrui may deliver to Incyte written notice that Hengrui deems Incyte to have Abandoned Development.  If Hengrui delivers such written notice to Incyte, such notice shall set forth the basis for Hengrui’s good faith determination.  If Incyte disagrees with Hengrui’s determination that Incyte has Abandoned Development, then the Parties will meet within [**] to discuss such disagreement.  If the Parties cannot agree after such discussion, then the terms of Section 14 shall apply to resolve such dispute.
		

		
			(ii)If it is finally determined pursuant to the procedures set forth in clause (i) above that Incyte has Abandoned Development, then, within [**] Days of such final determination being conclusively made, Incyte shall either: (1) provide Hengrui with a written plan describing the actions that Incyte proposes to take to remedy such Abandoned Development together with a payment of [**]; or (2) provide Hengrui with written notice that Incyte chooses not to provide such a plan and payment, in which case Hengrui shall have the right to terminate this Agreement in accordance with Section 12.3.1(c).  In the event that Incyte elects to provide such a plan and payment, Incyte shall, within [**] from the delivery of such plan and payment to Hengrui, initiate and diligently pursue such plan.  If Incyte fails to initiate and diligently pursue such plan within such [**] period, then Hengrui may terminate this Agreement in accordance with Section 12.3.1(c).
		

		
			4.1.3Preclinical Development Activities.  Notwithstanding anything to the contrary contained herein, Hengrui shall be responsible for conducting all preclinical Development Activities necessary to support the filing and clearance of any IND applications for the Licensed Antibodies for submission to Regulatory Authorities in the U.S., EU and Japan; provided, however, that Incyte shall also have the right to conduct preclinical Development Activities with respect to any Licensed Antibodies in the Incyte Territory. Hengrui shall assemble the appropriate documentation required for the IND submissions in consultation with Incyte.  It is the intent of the Parties that an IND for the Lead Antibody be submitted to Regulatory Authorities in the U.S., EU, and Japan in accordance with Section 5.2.  For clarity, Hengrui shall be responsible for conducting, at its sole cost and expense, any Development Activities required by any Regulatory Authority in the Incyte Territory prior to the initiation of Phase I Clinical Trials in the Incyte Territory.
		

		 

		

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			4.1.4Clinical Development Activities.   Hengrui shall be responsible for all Development Activities associated with clinical Development and Regulatory Approval of the Licensed Antibodies and Licensed Products in the Hengrui Territory.  Subject to Section 4.1.6, Incyte shall be responsible for all Development Activities associated with clinical Development and Regulatory Approval of the Licensed Antibodies and Licensed Products in the Incyte Territory.  
		

		
			4.1.5Hengrui Co-Development Option.  In the period beginning on the Effective Date until [**] after the Effective Date, Hengrui and Incyte agree to negotiate in good faith an agreement under which Hengrui would have the right to elect to co-fund  Development by Incyte of the Licensed Antibodies for Commercialization by Incyte in the Incyte Territory (the “Hengrui Co-Development Option”), which Hengrui Co-Development Option would include an increase in royalties payable to Hengrui  in exchange for Hengrui sharing in Development Costs with respect to the Development Activities related to the Hengrui Co-Development Option, and in which case the Parties would establish a mechanism for such sharing of Development Costs on the basis of full-time equivalents and a rate for such full-time equivalents.  For clarity, (i) failure by the Parties to reach agreement on the Hengrui Co-Development Option shall not constitute a breach of this Agreement by either Party as long as such Party has negotiated such agreement in good faith during such [**] period, and (ii) this Section 4.1.5 shall not preclude the Parties from agreeing to co-fund a global study to Develop the Licensed Antibodies for both Commercialization by Incyte in the Incyte Territory and by Hengrui in the Hengrui Territory, in which case such co-funding would [**] in royalties payable to Hengrui.
		

		
			4.1.6Australian Phase I Clinical Trial.    
		

		
			(i)Responsibilities.  After the Effective Date, Incyte, after consultation with Hengrui, will have final decision-making authority with respect to the currently planned Phase I Clinical Trial in Australia (the “Australian Study”); provided that Incyte will reasonably take into consideration Hengrui’s input for all major decisions (dose, schedule and amendments).  Hengrui will transfer to Incyte the IND, Regulatory Data and Regulatory Materials for the Australian Study within [**] after the Effective Date.  Hengrui and Incyte will coordinate with respect to contracts between Hengrui and Third Parties providing materials or services for the Australian Study (including clinical site(s) and contract research organization(s)) to either assign contracts to Incyte or to allow Incyte to directly interact with such Third Parties.  Hengrui agrees not to amend or terminate any contracts with Third Parties related to the Australian Study without Incyte’s prior written consent or to not otherwise materially breach such contracts.  Incyte will lead the clinical operation and Hengrui will co-manage the Australian Study with Incyte, until it is completed per the current protocol as summarized in Exhibit C to this Agreement (the “Current Protocol”).  The JSC shall have the right to amend the Current Protocol; provided that any such amendment shall not 
		

		
			

		 

		

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adversely impact Hengrui’s rights, financial obligations, or responsibilities without Hengrui’s prior written approval.  The JSC will define Hengrui’s role in co-managing (including representation on the study team) the Australian Study within [**] after the Effective Date; provided that Incyte will not exercise its final decision making authority under Section 3.5.1 to give Hengrui less than a meaningful role in co-managing the Australian Study.  Any modifications to the Australian Study after completion of the Current Protocol (including additional cohorts, expansion for combination therapies, etc.) (“Study Modifications”) will be exclusively managed and funded by Incyte.
		

		
			(ii)Australian Study Development Costs.    Hengrui and Incyte will each contribute [**] to the out-of-pocket Development Costs for the conduct of the Australian Study in accordance with Current Protocol [**] and will [**] for the conduct of the Australian Study in accordance with the Current Protocol, through a mechanism to be agreed upon by the JSC within [**] after the Effective Date.  
		

		
			(iii)Australian Study Data and Results.  Notwithstanding anything to the contrary in this Agreement, Hengrui shall have access to all Regulatory Data and Regulatory Materials from the Australian Study conducted under the Current Protocol (but not from Study Modifications), and Hengrui may submit any such Regulatory Data and Regulatory Materials to the applicable Governmental Authorities in the Hengrui Territory. 
		

		
			4.2Development Costs.    Subject to Section 4.1.6(ii) and to the last sentence of Section 4.1.5, all Development Costs for Development Activities in the Incyte Territory shall be borne by Incyte and all Development Costs for Development Activities in the Hengrui Territory shall be borne by Hengrui.
		

		
			4.3Records, Reports and Information.
		

		
			4.3.1General.  Each Party shall maintain current and accurate records of all Development Activities in its respective Territory, and all data and other information resulting from such Development Activities (which records shall include, as applicable, books, records, reports, research notes, charts, graphs, comments, computations, analyses, recordings, photographs, computer programs and documentation thereof (e.g., samples of materials and other graphic or written data generated in connection with such Development Activities)).  Such records shall properly reflect all work done and results achieved in the performance of such Development Activities in sufficient detail and in good scientific manner appropriate for regulatory and patent purposes.  Each Party shall document such Development Activities, including Clinical Trials, in formal written study reports according to applicable national and international (e.g., ICH, GCP and GLP) guidelines. All Clinical Trial activities should be documented by setting up, maintaining and controlling a trial master file according to ICH-GCP. 
		

		
			
		

		 

		

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			4.3.2Status Updates in the Territories.  Each Party shall provide the JSC with reports detailing its respective Development Activities and the results thereof at least [**] prior to any JSC meeting, but in any event, on at least a Calendar Quarter basis.  
		

		
			4.4Clinical Supply.   The Parties shall use good faith efforts to negotiate and enter into a clinical supply agreement (the “Clinical Supply Agreement”) within [**] of the execution of this Agreement which will govern the supply of the Licensed Antibodies and / or Licensed Products by Hengrui to Incyte for use in Clinical Trials to be performed by Incyte (or its Affiliates or designees).  The Parties agree that the Clinical Supply Agreement shall be on commercially reasonable terms, including (i) a supply term of up to the earlier of ([**]; (ii) the supply price shall be [**]; (iii) all Licensed Antibodies and / or Licensed Products supplied under the Clinical Supply Agreement shall be Manufactured in accordance with GMP and all applicable Laws; and (iv) provisions for a manufacturing technology transfer from Hengrui to Incyte or a contract manufacturing organization of Incyte’s designation.    
		

		
			Article 5
Regulatory
		

		
			5.1Regulatory Data and Regulatory Materials.
		

		
			5.1.1Regulatory Materials.  During the Term, responsibility for overseeing, monitoring and coordinating regulatory actions, communications and filings with, and submissions to, all applicable Regulatory Authorities with respect to the Licensed Products in the Territories shall be allocated between the Parties as set forth in this Article 5.  
		

		
			5.1.2Regulatory Data Generated by Hengrui and Incyte.  Within [**] after the Effective Date, Hengrui shall provide Incyte with a copy of any Regulatory Materials and Regulatory Data necessary or useful for Incyte to execute its rights or to perform its obligations under this Agreement. During the Term, Hengrui and Incyte shall promptly provide each other copies of any further Regulatory Materials and Regulatory Data.  All Regulatory Materials and Regulatory Data provided by Hengrui to Incyte under this Agreement shall be translated into the English language.  
		

		
			5.1.3CMC Information.  Upon reasonable request by Incyte, Hengrui shall provide Incyte with any CMC Information necessary or useful or otherwise requested or required by a Regulatory Authority and/or Governmental Authority as a condition or in support of obtaining or maintaining all Regulatory Approvals (including Pricing Approval) for the Licensed Products in the Incyte Territory.  All materials provided by Hengrui to Incyte under this Agreement shall be translated into the English language. 
		

		
			
		

		 

		

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			5.2Regulatory Filings and Regulatory Approvals.
		

		
			5.2.1General Responsibilities; Ownership of Regulatory Approvals.
		

		
			(a)General Responsibilities of Incyte. Except with respect to Hengrui’s obligation to prepare all Regulatory Materials associated with the filing and clearance of all INDs as set forth in Section 4.1.3, Incyte shall be responsible for the preparation of all Regulatory Materials necessary or desirable for obtaining and maintaining Regulatory Approvals in the Incyte Territory (including in connection with patient information leaflets, labeling and packaging for the Licensed Products in the Incyte Territory).  Hengrui shall have the right to review any essential materials and may provide advice to Incyte on the proposed strategy and documentation for submission in the Incyte Territory and Incyte shall reasonably consider such comments in good faith in preparing such materials.  Incyte shall submit such Regulatory Materials and MAAs, as applicable, to the applicable Governmental Authorities in the Incyte Territory.  
		

		
			(b)General Responsibilities of Hengrui. Hengrui shall be responsible for the preparation of all Regulatory Materials necessary or desirable for obtaining and maintaining Regulatory Approvals in the Hengrui Territory (including in connection with patient information leaflets, labeling and packaging for the Licensed Products in the Hengrui Territory).  Incyte shall have the right to review any essential materials and may provide advice to Hengrui on the proposed strategy and documentation for submission in the Hengrui Territory and Hengrui shall reasonably consider such comments in good faith in preparing such materials.  Hengrui shall submit such Regulatory Materials and MAAs, as applicable, to the applicable Governmental Authorities in the Hengrui Territory.  
		

		
			(c)Meetings with Authorities.  To the extent not prohibited by applicable Laws, Incyte and Hengrui shall each be entitled to attend key meetings with the relevant Regulatory Authorities in the Territories with respect to obtaining or maintaining the Licensed Products Approvals for the Licensed Products in the Territories, including oral explanations before the Committee for Human Medicinal Products or before U.S. or foreign equivalents thereof and to participate fully in such meetings.  A party attending a key meeting with Regulatory Authorities in the other Party’s Territory shall be limited to [**] attendees. 
		

		
			(d)Ownership of Regulatory Approvals.  All Regulatory Approvals for the Licensed Products in the Territories shall be in the name of the Party responsible for preparing and submitting such Regulatory Approvals in its respective territory (or portions thereof), and such Party shall own all right, title and interest in and to all such Regulatory Approvals and all related Regulatory Materials. 
		

		
			(e)Cooperation.  Each Party shall cooperate with and provide reasonable assistance to the other Party in connection with all activities undertaken by such Party relating to the obtaining and maintaining of the Regulatory Approvals.
		

		
			5.2.2Pricing Approvals.  Notwithstanding the provisions of Section 5.2.1, to the extent that a given country or regulatory jurisdiction in the Territories requires Pricing Approval for sale of the Licensed Products in such country or regulatory jurisdiction, Incyte shall (to the extent permitted by applicable Laws) be solely responsible for obtaining and maintaining Pricing Approvals in the countries and regulatory 
		

		 

		

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			jurisdictions in the Incyte Territory, in its own name, and Hengrui shall (to the extent permitted by applicable Laws) be solely responsible for obtaining and maintaining Pricing Approvals in the countries and regulatory jurisdictions in the Hengrui Territory, in its own name.  Each Party shall keep the other Party informed on an ongoing basis of each Party’s strategy for seeking, and the results it obtains in seeking, such Pricing Approvals in its respective Territory, including the results of any material discussion or other communication with relevant Governmental Authorities regarding such Pricing Approvals.  To the extent not prohibited by applicable Laws, Incyte and Hengrui shall be entitled to attend key meetings with the relevant Regulatory Authorities with respect to obtaining or maintaining Pricing Approvals for the Licensed Products in each other’s respective Territory.  
		

		
			5.2.3Cost of Regulatory Activities.    [**] provided, however, that the Parties [**] associated with the Australian Study conducted in accordance with the Current Protocol.
		

		
			5.2.4Reporting and Review.  Each Party shall keep the other Party reasonably and regularly informed in connection with the preparation of all material Regulatory Materials, Regulatory Authority review of Regulatory Materials, and Regulatory Approvals, in each case with respect to the Licensed Products within its respective Territory.  Upon reasonable request, each Party shall provide the other Party, in a timely manner, with copies of all material notices, questions, and requests for information in tangible form which it receives from a Regulatory Authority with respect to the Licensed Products in its respective Territory;  provided, however, that such Party shall have the right to redact any information to the extent not related to the Licensed Products.
		

		
			5.3Communications.  The Parties shall cooperate in communicating with any Regulatory Authority having jurisdiction regarding the Licensed Products in the Territories and each Party shall keep the other Party informed of planned regulatory submissions and material communications, either on its own initiative in accordance with this Agreement or as a result of such a Regulatory Authority initiating contact with such Party in connection therewith.  Each Party shall promptly provide, and cause its Affiliates, its sublicensees and permitted distributors to provide, the other Party with copies of regulatory submissions to, and material communications with, any Regulatory Authorities in its Territory.  Notwithstanding the foregoing, except as may be required by applicable Laws, neither Party shall, with respect to the Licensed Products, communicate with any Regulatory Authority having jurisdiction in the other Party’s Territory regarding the Licensed Products, unless requested or permitted in writing to do so by the other Party, or unless so ordered by such Regulatory Authority, in which case such Party shall immediately notify the other Party of such order and shall, to the extent permitted by applicable Laws, not take any further actions or communicate with such Regulatory Authority further until the other Party has provided instruction as to how to proceed.  All communications with Regulatory Authorities regarding the Licensed Products in the Territories shall be undertaken as provided in this Agreement.  
		

		
			
		

		 

		

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			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			5.4Adverse Event Reporting; Safety Data Exchange and Medical Inquiries.    
		

		
			5.4.1Pharmacovigilance.  Incyte shall be responsible for the collection, review, assessment, tracking and filing of information related to adverse events associated with the Licensed Products in the Incyte Territory (whether or not Product Approval has been achieved), in each case in accordance with applicable Laws and this Agreement (and Incyte shall ensure that, in the Development and Commercialization of the Licensed Products, it will record, investigate, summarize, notify, report and review all adverse events in accordance with applicable Laws).  Hengrui shall be responsible for the collection, review, assessment, tracking and filing of information related to adverse events associated with the Licensed Products in the Hengrui Territory (whether or not Product Approval has been achieved), in each case in accordance with applicable Laws and this Agreement (and Hengrui shall ensure that, in the Development and Commercialization of the Licensed Products, it will record, investigate, summarize, notify, report and review all adverse events in accordance with applicable Laws). Each Party shall keep the other Party informed of any SAE, SUSAR, or pregnancy report occurring in subjects exposed to the Licensed Products, whether through commercial use or Development Activity, according to timelines defined in a written pharmacovigilance agreement. The safety representatives from each of the Parties shall meet and agree upon a written pharmacovigilance agreement for exchanging adverse event and other safety information relating to the Licensed Products within [**] prior to the anticipated first dosing of the first patient in the first Clinical Trial performed under this Agreement.  [**] of establishing and maintaining the global safety database for the Licensed Products.  Such written pharmacovigilance agreement shall ensure that all adverse event and other safety information is exchanged according to a schedule that will permit each Party (and its Affiliates, sublicensees or subcontractors) to comply with applicable Laws and regulatory requirements in their respective Territory, including reporting any safety data provided by the other Party to the Regulatory Authorities in such Party’s Territory.    
		

		
			5.4.2Medical Inquiries for the Licensed Products.  Incyte shall be responsible for handling all medical questions or inquiries, including all Product Complaints, in the Incyte Territory, with regard to any Licensed Product sold by or on behalf of Incyte (or any of its Affiliates or sublicensees) (including setting up a call center in connection therewith), in each case in accordance with applicable Laws and this Agreement.  Hengrui shall be responsible for handling all medical questions or inquiries, including all Product Complaints, in the Hengrui Territory, with regard to any Licensed Product sold by or on behalf of Hengrui (or any of its Affiliates or sublicensees or permitted distributors) (including setting up a call center in connection therewith), in each case in accordance with applicable Laws and this Agreement. Incyte shall promptly forward any and all medical questions or inquiries which it receives with respect to any Licensed Product sold by or on behalf of Hengrui (or any of its Affiliates or sublicensees or permitted distributors) in the Hengrui Territory to Hengrui in accordance with all applicable Laws.  Hengrui shall promptly forward any and all medical questions or inquiries which it receives with respect to 
		

		 

		

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			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			any Licensed Product sold by or on behalf of Incyte (or any of its Affiliates or sublicensees) in the Incyte Territory to Incyte in accordance with all applicable Laws.  Notwithstanding the foregoing, Incyte shall be responsible for handling any Product complaints received from inside the Incyte Territory related to the Manufacture of the Licensed Products, and Hengrui shall support Incyte and provide all reasonably requested assistance and information to handle such Licensed Product complaints.
		

		
			5.5Regulatory Authority Communications Received by a Party.    
		

		
			5.5.1General.  Each Party shall promptly inform the other Party of notification of any action by, or notification or other information which it receives (directly or indirectly) from, any Regulatory Authority whether in the Incyte Territory or in the Hengrui Territory which (i) raises any material concerns regarding the safety or efficacy of the Licensed Products, (ii) indicates or suggests a potential material liability of either Party to Third Parties in connection with the Licensed Products, (iii) is reasonably likely to lead to a recall, market withdrawal or market notification with respect to the Licensed Products whether in the Incyte Territory or in the Hengrui Territory, or (iv) relates to expedited exchange of individual case safety reports and periodic safety reports with respect to the Licensed Products whether in the Incyte Territory or in the Hengrui Territory, or Product Complaints, and which may have an adverse impact on Regulatory Approvals or the continued Commercialization of the Licensed Products whether in the Incyte Territory or in the Hengrui Territory.  Incyte shall be solely responsible for responding to any such communications relating to the Licensed Products in the Incyte Territory and Hengrui shall be solely responsible for responding to any such communications relating to the Licensed Products in the Hengrui Territory.  Each Party shall reasonably cooperate with and assist the other Party in complying with regulatory obligations, including by providing to the other Party, within [**] after a request, such information and documentation which is in such Party’s possession as may be necessary or reasonably helpful for the other Party to prepare a response to an inquiry from a Regulatory Authority whether in the Incyte Territory or in the Hengrui Territory with respect to the Licensed Products.  Each Party shall promptly provide, and cause its Affiliates and sublicensees to provide, the other Party with a copy of all material correspondence received from a Regulatory Authority whether in the Incyte Territory or in the Hengrui Territory specifically regarding the matters referred to above.   
		

		
			5.5.2Disclosures.  In addition to its obligations under this Agreement, each Party shall disclose to the other Party the following regulatory information:
		

		
			(a)Regulatory Actions.  All information pertaining to material actions taken by Regulatory Authorities whether in the Incyte Territory or in the Hengrui Territory, in connection with the Licensed Products, including any notice, audit notice, inspection notice, notice of initiation by Regulatory Authorities of investigations, inspections, 
		

		 

		

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			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			detentions, seizures or injunctions concerning the Licensed Products whether in the Incyte Territory or in the Hengrui Territory, notice of violation letter (i.e., an untitled letter), warning letter, service of process or other substantial inquiry which (i) raises any material concerns regarding the safety or efficacy of the Licensed Products, (ii) alleges a potential material liability of either Party to Third Parties in connection with the Licensed Products, (iii) is reasonably likely to lead to a recall, market withdrawal or market notification with respect to the Licensed Products whether in the Incyte Territory or in the Hengrui Territory, or (iv) relates to expedited exchange of individual case safety reports and periodic safety reports with respect to the Licensed Products whether in the Incyte Territory or in the Hengrui Territory, or Product Complaints, and which are reasonably likely to have an adverse impact on Regulatory Approvals or the continued Commercialization of the Licensed Products whether in the Incyte Territory or in the Hengrui Territory; provided, however, that a Party shall be entitled to redact those portions thereof to the extent not related to the Licensed Products.  Without limiting the generality of the foregoing, each Party shall promptly, but in any event within [**], inform the other Party of any such material actions by any Regulatory Authority with respect to the Licensed Products whether in the Incyte Territory or in the Hengrui Territory.
		

		
			(b)Regulatory Non-compliance.  With respect to information pertaining to notices from Regulatory Authorities whether in the Incyte Territory or in the Hengrui Territory of non-compliance with applicable Laws in connection with the Licensed Products, including receipt of a warning letter or other notice of alleged non-compliance from any Regulatory Authority directly or indirectly relating to the Licensed Products whether in the Incyte Territory or in the Hengrui Territory, such Party shall be entitled to redact those portions thereof to the extent not related to the Licensed Products.
		

		
			5.6Recall, Withdrawal, or Market Notification of Product.
		

		
			5.6.1Notification and Determination.  In the event that any Governmental Authority threatens or initiates any action to remove the Licensed Products from the market whether in the Incyte Territory or in the Hengrui Territory (in whole or in part), the Party receiving notice thereof shall notify the other Party of such communication promptly, but in no event later than [**], after receipt thereof.  Notwithstanding the foregoing, in all cases Incyte shall determine whether to initiate any recall, withdrawal or market notification of the Licensed Products in the Incyte Territory, and Hengrui shall determine whether to initiate any such recall, withdrawal or market notification of the Licensed Products in the Hengrui Territory, including the scope of such recall or withdrawal (e.g., a full or partial recall, or a temporary or permanent recall) or market notification; provided, however, that before Incyte or Hengrui (as the case may be) initiates a recall, withdrawal or market notification, the Parties shall promptly meet and discuss in good faith the reasons therefor; provided, further, that such discussions shall not delay any action that Incyte or Hengrui (as the case may be) reasonably believes has to be taken in relation to any recall, withdrawal or market notification.  In the event of any such recall, withdrawal or market notification, Incyte or Hengrui (as the case may be) shall determine the necessary actions to be taken, and shall implement such action, with the other Party providing reasonable input (which the first 
		

		 

		

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			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			Party shall in good faith consider and incorporate into any recall, withdrawal or market notification strategy) and reasonable assistance, to conduct such recall, withdrawal or market notification.  Without limiting the foregoing, each Party shall have the right to propose that a Licensed Product recall, withdrawal or market notification should be initiated by the other Party, but such other Party shall make the final decision whether the recall, withdrawal or market notification will be initiated in its Territory.  Each Party shall at all times utilize a batch tracing system which will enable each to identify, on a prompt basis, customers within its Territory who have been supplied with Product of any particular batch, and to recall such Licensed Product from such customers as set forth in this Section 5.6.  
		

		
			5.6.2Cost Allocation.  All direct costs and expenses associated with implementing a recall, withdrawal or market notification with respect to the Licensed Products in the Territories shall be allocated between Hengrui and Incyte as follows:    
		

		
			(a)in the event, and to the extent, that the recall, withdrawal or market notification arises as a result of a breach of this Agreement by Hengrui, then [**] implementing such recall, withdrawal or market notification;    
		

		
			(b)in the event, and to the extent, that the recall, withdrawal or market notification arises as a result of the breach of this Agreement by Incyte, then [**] for implementing such recall, withdrawal or market notification; and 
		

		
			(c)in all other cases (i.e., other than as provided for in Section 5.6.2(a) or (b) above), all costs and expenses incurred by either Party for implementing the recall, withdrawal or market notification in the Incyte Territory shall be borne [**] and all costs and expenses incurred by either Party for implementing the recall, withdrawal or market notification in the Hengrui Territory shall be borne [**].
		

		
			Article 6
Commercialization
		

		
			6.1Commercialization in the Territories.    During the Term, Incyte shall be solely responsible for Commercializing the Licensed Products in the Incyte Territory in accordance with this Agreement and Hengrui shall be solely responsible for Commercializing the Licensed Products in the Hengrui Territory in accordance with this Agreement.  Subject to the terms and conditions of this Agreement, each Party shall be responsible for one hundred percent (100%) of the expenses incurred in connection with the Commercialization of the Licensed Products in its respective Territory.  Without limiting the foregoing, Incyte shall use Commercially Reasonable Efforts to Commercialize the Licensed Products in the Incyte Territory.    Each Party shall choose the trademarks and tradenames to be used by such Party in its respective Territory with respect to the Licensed Products, and, as between the Parties, shall own all right, title and interest in and to its trademarks and tradenames, which trademarks and tradenames shall not be used by the other Party except as expressly provided in this Agreement.  
		

		
			6.2Both Parties’ Performance. Without limiting the generality of the provisions of Section 6.1,  each Party shall be solely responsible for (i) receiving, accepting 
		

		 

		

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			and filling orders for the Licensed Products in such Party’s Territory, (ii) handling all returns of the Licensed Products in such Party’s Territory, (iii) controlling invoicing, order processing and collection of accounts receivable for the sales of the Licensed Products in such Party’s Territory, and (iv) distributing and managing inventory of the Licensed Products in such Party’s Territory.    
		

		
			6.2.1Status Updates in the Territories.  Each Party shall provide the JSC with reports detailing its respective Commercialization efforts and the results thereof at least [**] prior to any JSC meeting, but in any event, on at least a [**] basis. 
		

		
			6.2.2Other Reports.  Each Party shall submit in writing to the other Party such other summary reports as such other Party may reasonably request from time to time during the Term with respect to material activities undertaken by Incyte for the Licensed Products in the Incyte Territory and by Hengrui for the Licensed Products in the Hengrui Territory (as the case may be), including general market conditions and general sales information.  
		

		
			Article 7
Payments
		

		
			7.1Upfront License Fee.  An upfront payment amount equal to Twenty Five Million Dollars ($25,000,000) shall be due from Incyte to Hengrui, payable within [**] of the Effective Date upon receipt of a respective invoice from Hengrui, payable by wire transfer of immediately available funds into an account designated in writing by Hengrui.  
		

		
			7.2Milestone Payments.  Incyte shall pay to Hengrui the milestone payments described in this Section 7.2 upon achievement (first occurrence) of the corresponding milestone event.  Incyte shall promptly notify Hengrui in writing of, but in no event later than [**] after, the achievement, or in case of a Incyte sublicensee achieving such milestone no later than [**] after receipt of notice by such sublicensee, of each such milestone event achieved by it and Hengrui shall provide a respective invoice to Incyte.  Incyte shall pay the applicable milestone payment by wire transfer of immediately available funds into an account designated by Hengrui within [**] after receipt of such written undisputed invoice pursuant to Section 7.8.  Each milestone payment shall only be due for the first Licensed Product to achieve the applicable milestone irrespective of the number of Licensed Products that may subsequently achieve the applicable milestone event.  For clarity, all milestone payments will be made once only.  
		

			
					
						Development Milestone Event for the first Licensed
Product achieving any such Development Milestone Event

					
					
						Milestone Payment

				
	
					
						[**]

					
					
						[**]

				
	
					
						[**]

					
					
						[**]

				

		
			 
		

		
			
		

		
			

		 

		

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			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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						[**]

					
					
						[**]

				
	
					
						4.  Demonstration of a Licensed Product’s Superiority [**]

					
					
						One Hundred Fifty Million Dollars ($150,000,000)

				
	
					
						Sales Milestone Event for the first Licensed Product
achieving any such Sales Milestone Event

					
					
						Milestone Payment

				
	
					
						[**]

					
					
						[**]

				
	
					
						[**]

					
					
						[**]

				
	
					
						[**]

					
					
						[**]

				
	
					
						[**]

					
					
						[**]

				

		
			7.3Royalty Payments to Hengrui.  As further consideration for the rights granted to Incyte under this Agreement, during all or any portion of the Calendar Year falling within the Royalty Term, Incyte shall pay to Hengrui payments (“Incyte Royalty Payments”) on the Calendar Year Net Sales on a country-by-country basis in the Incyte Territory in accordance with the royalty rates set forth in this Section 7.3 (subject to reduction in accordance with this Section 7.3 and Section 7.5.2) (the “Incyte Royalty Rates”).  During the Royalty Term, Incyte Royalty Payments payable under this Section 7.3 shall be reduced by [**] of the applicable Incyte Royalty Rate for a given Licensed Product in a given country in the Incyte Territory in the event one or more Third Parties is: [**].  Notwithstanding the foregoing or the operation of Section 7.5, in no event will the Incyte Royalty Rate be reduced by more than [**] of the base Incyte Royalty Rate listed in the table below (i.e., the Incyte Royalty Rate has a floor of [**]); provided, however, that Incyte may carryforward into subsequent Calendar Years any excess amount by which it would have been entitled to reduce the Incyte Royalty Rate but for such [**] limitation and, at the end of the Royalty Term, Hengrui shall pay to Incyte any such excess amount that has not theretofore been recovered by Incyte. For the avoidance of doubt, Incyte Royalty Rates apply only to the Net Sales in the Incyte Territory.    
		

			
					
						Net Sales in the Incyte Territory

					
					
						Incyte Royalty Rate

				
	
					
						1.  Calendar Year Net Sales up to [**] in the Incyte Territory.

					
					
						[**]

				
	
					
						2.  Calendar Year Net Sales of greater than [**] and less than [**] in the Incyte Territory.

					
					
						[**]

				
	
					
						3.  Calendar Year Net Sales greater than [**] in the Incyte Territory.

					
					
						[**]

				

		
			7.4Royalty Payments and Reports.  Incyte shall calculate all Incyte Royalty Payments payable to Hengrui pursuant to this Article 7 and report Net Sales on a country-by-country basis in the Incyte Territory with respect to Net Sales in the Incyte Territory within 
		

		
			
		

		 

		

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			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			[**] of the end of each Calendar Quarter, which amounts shall be converted to Dollars at such time in accordance with Section 7.7‎, at which time Hengrui shall issue an invoice to Incyte for such Royalty Payment.  Incyte shall pay to Hengrui the Incyte Royalty Payment due for Net Sales on a country-by-country basis in the Incyte Territory during a given Calendar Quarter within [**] after the end of such Calendar Quarter, provided that Incyte has received such invoice from Hengrui.  Each Incyte Royalty Payment due to Hengrui shall be accompanied by (i) a statement of the Net Sales of the Licensed Products on a country-by-country basis during the applicable Calendar Quarter (including such amounts expressed in local currency and as converted to Dollars), and (ii) a calculation, on a country-by-country basis, of the amount of the Incyte Royalty Payment due on such Net Sales for such Calendar Quarter. Without limiting the generality of the foregoing, Incyte shall require its Affiliates and sublicensees and permitted distributors to account for its Net Sales and to provide such reports with respect thereto as if such sales were made by Incyte.    
		

		
			7.5Third Party Royalties and Other Payments. 
		

		
			7.5.1Certain Existing Obligations.  Except as otherwise set forth in this Agreement, Hengrui shall be solely responsible for the payment of any royalties, sublicense revenues, milestones or other payments due to Third Parties for a grant to Hengrui to any Patent that is owned by a Third Party as of the Effective Date and that was issued or published as of the Effective Date, which Patent claims or covers the Lead Antibody or the Lead Product as such Lead Antibody and Lead Product exist as of the Effective Date (but excluding any improvements or modifications made to, or combinations with any other compound of, the Lead Antibody or the Lead Product by Incyte, its Affiliates or its sublicensees on or after the Effective Date). 
		

		
			7.5.2Licenses to Third Party Patents.
		

		
			(a)If Incyte determines that it is necessary or useful to obtain a license under any Patent of a Third Party relevant to the Development, the Manufacture or the Commercialization of the Licensed Products in the Incyte Territory (“Third Party IP”), it shall inform the JSC of such determination along with documentation supporting such determination. The JSC shall discuss the desirability of obtaining a license to or acquiring such Third Party IP, and, if it is determined by the Parties to obtain a license to or acquire such Third Party IP, discuss and recommend appropriate financial terms and conditions (including the scope of the license to be negotiated) for such license or acquisition agreement (such agreement, a “Third Party IP Agreement”). The JSC also may designate one Party, or that the Parties jointly, be responsible for handling negotiations of a Third Party IP Agreement, but, absent agreement by the Parties to obtain a license or acquire such Third Party IP, or absent a designation by the JSC (which agreement shall not be subject to Incyte’s deciding vote on the JSC) which Party shall be responsible for handling the negotiations of a Third Party IP Agreement, Incyte shall have the right, at its sole discretion, to negotiate such Third Party IP Agreement for the Incyte Territory. The negotiating Party shall have responsibility and authority for negotiating and executing such Third Party IP Agreement; provided that, through their representatives on the JSC, the negotiating Party shall keep the other Party reasonably informed with respect to the negotiations and deal terms relating to such Third Party IP Agreement (including scope of the license and financial terms) and such 
		

		 

		

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			negotiating Party  shall consider in good faith any comments, recommendations or analysis provided by the other Party; provided, further, that the negotiating Party shall not agree to any terms or conditions relating to the other Party’s Territory without the prior written consent of the other Party.    
		

		
			(b)Any and all amounts (including upfront payments, milestone payments, license fees, royalties or other payments) payable under a Third Party IP Agreement to the extent applicable to the Licensed Products shall be shared equally by Hengrui and Incyte; provided that Incyte shall be entitled to deduct Incyte’s share from the Incyte Royalty Payments, provided that in no case will the Incyte Royalty Payments be reduced by more than [**] of the rate set forth in Section 7.3 by operation of this Section 7.5.2(b) (subject to recovery by Incyte of any excess reduction amounts in carryover Calendar Years as contemplated by Section 7.3).   If any amounts payable under a Third Party IP Agreement (other than royalties on the Licensed Products) are applicable to products other than the Licensed Products, then only [**] applicable to the Licensed Products will be shared by Hengrui.  [**]. 
		

		
			7.6Taxes and Withholding.    Each Party shall comply with applicable Laws and regulations regarding filing and reporting for income tax purposes.  If applicable Laws require withholding of income taxes or other taxes imposed upon payments by Incyte to Hengrui, Incyte shall assist Hengrui to obtain a withholding tax exemption certificate to be issued by the competent tax authority.  Hengrui shall provide Incyte with such withholding tax exemption certificate at least [**] prior to the payable date of any such payments.  If Hengrui fails to do so, Incyte shall be permitted to withhold the withholding tax amount at the rate set forth by law from such payments; provided that Incyte pays such amount to the competent tax authority.  Incyte shall submit appropriate proof of payment of the withholding taxes to Hengrui within a reasonable period of time and shall make reasonable efforts to assist Hengrui to recoup such taxes, if any, from the respective tax authorities.   In addition, the Parties shall cooperate in accordance with applicable Law to minimize indirect taxes (such as value added tax (“VAT”), sales tax, consumption tax and other similar taxes) in connection with this Agreement.  
		

		
			7.7Currency Conversion.  All payments hereunder shall be made in U.S. Dollars.  For the purpose of calculating any sums due hereunder, or otherwise reimbursable pursuant to, this Agreement (including any costs as defined in this Agreement and the calculation of Net Sales expressed in currencies other than U.S. Dollars), any amount expressed in a foreign currency shall be converted into U.S. Dollars using the average of the Oanda foreign currency exchange rate (Oanda.com) for the applicable reporting period for the payment due.    
		

		
			7.8General Payment Procedures.  Any payment under this Article 7 other than royalties pursuant to Sections 7.3  is subject to a prior written undisputed invoice to be served to the Party owing the payment and complying with reasonable tax and accounting requirements of the Party owing the payment. The receiving Party shall invoice the paying Party for all amounts due to such receiving Party under this Agreement, and such payments of all undisputed amounts shall be made within [**] following the receipt by the paying Party of an invoice from the receiving Party specifying the amount due in accordance with this Agreement.  In the event either Party disputes an invoice delivered under this Agreement, the receiving Party shall deliver written notice to the delivery Party of its dispute of such invoice 
		

		
			
		

		 

		

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			within [**] after receipt of such invoice and the parties shall use good faith efforts to resolve such dispute as soon as practicable, including by providing supporting documentation reasonably requested by the receiving Party in connection therewith.   
		

		
			7.9Late Payments.    Any amount required to be paid by a Party hereunder which is not paid on the date due shall bear interest at a rate equal to [**] effective for the date that payment was first due as reported by [**] plus [**].  Such interest shall be computed on the basis of [**]. 
		

		
			7.10Records; Audits.  Incyte and its Affiliates, sublicensees, permitted distributors and subcontractors shall keep full, true and accurate records and books of account containing all particulars that may be necessary for the purpose of confirming the accuracy of, and calculating, as applicable, the Incyte Royalty Payments and other amounts payable to Hengrui hereunder (including records of Net Sales), and any other records reasonably required to be maintained with respect to Incyte’s obligations under this Agreement, and each Party shall maintain complete and accurate records in sufficient detail to permit the other Party to confirm the accuracy of any other amounts payable or otherwise reimbursable hereunder, in each case for a minimum period of [**] or such longer period as required by applicable Laws.  Each Party shall have a right to request an audit of the other Party in order to confirm the accuracy of any of the foregoing (an “Audit”); provided, however, that each Party shall only have the right to request such Audit of the other Party one time during any given Calendar Year.  Upon the written request by a Party (the “Auditing Party”) to Audit the other Party (the “Audited Party”), the Auditing Party shall have the right to engage an independent, internationally recognized accounting firm acceptable to the Audited Party to perform a review as is reasonably necessary to enable such accounting firm to calculate or otherwise confirm the accuracy of any of the foregoing for the Calendar Year(s) requested by the Auditing Party; provided that (i) such accountants shall be given access to, and shall be permitted to examine and copy such books and records of the Audited Party upon [**] prior written notice to the Audited Party, and at all reasonable times on such calendar days, (ii) prior to any such examination taking place, such accountants shall enter into a confidentiality agreement with the Audited Party reasonably acceptable to the Audited Party in order to keep all information and data contained in such books and records strictly confidential and shall not disclose such information or copies of such books and records to any third person including the Auditing Party, but shall only use the same for the purpose of the reviews and/or calculations which they need to perform in order to determine any amounts being reviewed, and (iii) such accountants shall use reasonable efforts to minimize any disruption to the Audited Party’s business.  The Audited Party shall make personnel reasonably available during regular business hours to answer queries on all such books and records required for the purpose of the Audit.  The accountants shall deliver a copy of their findings to each of the Parties within [**] of the completion of the review, and, in the absence of fraud or manifest error, the findings of such accountant shall be final and binding on each of the Parties.  Any underpayments by a Party, as well as interest for the underpayment according to Section 7.9, shall be paid to the other Party within [**] of notification of the results of such inspection.  Any overpayments made by a Party shall be refunded by the other Party, together with interests for the overpayment according to Section 7.9, within [**] of notification of the results of such inspection.  The cost of the accountants shall be the responsibility of the Auditing Party unless the accountants’ calculation shows that the actual royalties payable, Net Sales, and/or any such other amount Audited hereunder to be different, by more than [**], than the amounts as previously calculated by the Audited Party.    
		

		 

		

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			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			Article 8
Intellectual Property Matters 
		

		
			8.1Inventions and Related Intellectual Property Rights.    
		

		
			8.1.1Hengrui IP.  Hengrui Inventions shall be solely owned by Hengrui and, to the extent such Hengrui Inventions are necessary or useful for the Development, Manufacture or Commercialization of the Licensed Antibodies and/or Licensed Products, shall be deemed to be Hengrui Know-How and shall be subject to the licenses and rights granted to Incyte under this Agreement.
		

		
			8.1.2Incyte IP.   Incyte Inventions shall be solely owned by Incyte.    
		

		
			8.1.3Joint Technology.    Joint Technology shall be jointly owned by the Parties, with each Party entitled to the free use and enjoyment of such Joint Technology in its respective Territory, but subject to the terms and conditions of this Agreement, including the territorial limitations in the license grant under Section 2.1 and including the limitations provided in Section 2.2.1.  Each Party shall own a fifty percent (50%) undivided interest in all such Joint Technology, without accounting to or obtaining consent from the other Party, and is entitled to use and grant licenses to the Joint Technology within its respective Territory only and subject to the restrictions set forth in this Agreement, including Section 2.5.3 which shall apply mutatis mutandis.    
		

		
			8.1.4Disclosure.  Each Party shall promptly disclose to the other in writing, and shall cause its Affiliates, or licensees and sublicenses, and its and their employees, agents and contractors to so disclose, the development, making, conception or reduction to practice of any Joint Technology. 
		

		
			8.1.5Employees.  Each Party will require all of its, and will cause its Affiliates to require all of their, employees to assign all Inventions that are developed, made or conceived by such employees to it or such Affiliate, respectively, for further assignment according to the ownership principles described in this Section 8.1, free and clear of all liens, encumbrances, charges, security interests, mortgages or other similar restrictions and shall ensure that such assignment complies with applicable local Laws, including making any required payments to the inventor of such Invention.  Each Party will also use its Commercially Reasonable Efforts to require any agents, independent contractors, sublicensees or other Third Parties performing an activity pursuant to this Agreement to assign all Inventions that are developed, made or conceived by such agents, independent contractors or sublicensees to it, for further assignment according to the ownership principles described in Section 8.1, free and clear of all liens, encumbrances, charges, security interests, mortgages or other similar restrictions and shall use Commercially Reasonable Efforts to 
		

		
			
		

		 

		

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			ensure that that such assignment complies with applicable local Laws, including making any required payments to the inventor of such Invention. Each Party shall be responsible for performing any actions and executing any documents necessary under applicable Laws, including but not limited to the German Act on Employee Inventions (ArbnErfG), to ensure that such Party becomes the owner of the applicable Inventions in accordance with this Agreement.  Each Party shall bear its own costs relating to any payments that are due to its inventors under the ArbnErfG or other applicable employee invention Laws.  
		

		
			8.1.6Amendment of Patent Schedules. Without limiting Hengrui’s warranty provided under Section 9.2.5, if, at any time after the Effective Date, either Party identifies an Hengrui Patent that existed as of the Effective Date but which was not previously included on Schedule 1.32, then such Patent shall be added to Schedule 1.32.
		

		
			8.2Patent Prosecution and Maintenance of Hengrui Patents.  
		

		
			8.2.1Patent Prosecution.  As between the Parties, Incyte shall have the first right to prepare, file, prosecute (including any reissues, re-examinations, post-grant proceedings, requests for patent term extensions, supplementary protection certificates, interferences, derivation proceedings, supplemental examinations and defense of oppositions) and maintain the Hengrui Patents in the Incyte Territory.  
		

		
			8.2.2General Provisions. Incyte will keep Hengrui informed with regard to the filing, prosecution and maintenance of Hengrui Patents in the Incyte Territory. Incyte will share and discuss with Hengrui all material aspects of patent prosecution, including (i) material communications to and from any patent authorities, and (ii) drafts of any material filings or responses to be made to such patent authorities, in each case regarding Hengrui Patents. Such exchange of information shall be made sufficiently in advance in order to allow Hengrui to review and comment thereon. Incyte shall consider in good faith any input made by Hengrui with respect to strategies for filing and prosecuting the Hengrui Patents. If Hengrui fails to provide its comments reasonably in advance of the deadline for filing or otherwise responding to the patent authorities, Incyte shall be free to act without consideration of Hengrui’s comments.  Without limiting the foregoing, Incyte shall consult with Hengrui a reasonable time prior to taking or failing to take any substantive action with respect to such Patent Applications, including any action that would materially adversely affect the scope or validity of rights under any Hengrui Patents in the Incyte Territory (such as substantially narrowing or canceling any claim without reserving the right to file a continuing or divisional Patent Application, abandoning any Patent or not filing or perfecting the filing of any Patent Application in any country).  Hengrui shall provide to Incyte all information material to patentability of any pending Patent Applications during prosecution of such Patent Applications in compliance 
		

		
			
		

		 

		

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			with  37 CFR 1.56 or under applicable Laws in any other jurisdiction requiring information disclosure.
		

		
			8.2.3In the event that Incyte elects not to file, prosecute or maintain in any country in the Incyte Territory any Hengrui Patent, Incyte will give Hengrui at least [**] notice before any relevant deadline and provide to Hengrui information it reasonably requests relating to the Hengrui Patent.  Hengrui will then have the right to assume responsibility, using patent counsel of its choice, for the prosecution of such Hengrui Patent in the applicable countries in the Incyte Territory, at Hengrui’s cost.  The Parties will cooperate in such prosecution in all respects.  Each Party will provide the other Party all reasonable assistance and cooperation in such prosecution efforts, including providing any necessary powers of attorney and executing any other required documents or instruments for such prosecution.  Each Party will provide the other Party with copies of any documents it receives or prepares in connection with such prosecution and will inform the other Party of the progress of it. 
		

		
			8.2.4Costs. Following the Effective Date, the costs of prosecution and maintenance of the Hengrui Patents in [**] shall, except as set forth in Section 8.2.3, be borne by [**], and costs of prosecution and maintenance of the Hengrui Patents in [**] shall be borne by [**].    
		

		
			8.3Patent Prosecution and Maintenance of Joint Patents.    
		

		
			8.3.1Initial Phase/Patent filing. The Parties shall jointly decide, through the JSC, on the optimal strategy for prosecution and maintenance of Joint Patents. Such decision shall include the content and the timing of a respective patent application, and the selection of the jurisdiction for filing of a provisional or initial patent application. Up to the stage of entry into the national/regional phases, the Parties will jointly discuss and agree on any action to be taken.  Decisions regarding the filing of Joint Patents in the Hengrui Territory shall not be subject to Incyte’s final decision making authority under Section 3.5.
		

		
			8.3.2National/Regional Phases.  Upon entry into the national/regional phases, Hengrui shall have the obligation, to prepare, file, prosecute (including any reissues, re-examinations, post-grant proceedings, requests for patent term extensions, supplementary protection certificates, interferences, derivation proceedings, supplemental examinations and defense of oppositions) and maintain Joint Patents in the Hengrui Territory, and Incyte shall have the obligation, to prepare, file, prosecute (including any reissues, re-examinations, post-grant proceedings, requests for patent term extensions, supplementary protection certificates, interferences, derivation proceedings, supplemental examinations and defense of oppositions) and maintain Joint Patents in the Incyte Territory.  The Parties shall fully and closely cooperate on all prosecutional matters. Section 8.2.2 shall apply mutatis mutandis.  
		

		
			
		

		 

		

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			8.3.3Step-In Rights.  In the event that either Party intends not to prepare, file, prosecute, or maintain a Joint Patent in any country or jurisdiction within its respective Territory, such Party shall provide reasonable prior written notice to the JSC of such intention (which notice shall, in any event, be given no later than [**] prior to the next deadline for any action that may be taken with respect to such Joint Patent in the respective territory), and the other Party shall thereupon have the option, in its sole discretion, to assume the control and direction of the preparation, filing, prosecution, and maintenance of such Joint Patent, provided there is no other Patent of the same patent family in the respective jurisdiction which covers the Licensed Antibodies or the Licensed Products.  Upon the continuing Party’s written exercise of such option to the non-continuing Party, the continuing Party shall assume responsibility and full control, and shall bear the costs, for the preparation, filing, prosecution, and maintenance of any such Joint Patent.  The non-continuing Party shall assign to the continuing Party its interest in such Joint Patent and shall execute such documents and perform such acts, at the continuing Party’s expense, as may be reasonably necessary to permit the continuing Party to file such patent application, and/or to prosecute and/or maintain such Joint Patent.  For clarity, in the event that the continuing Party continues the prosecution or maintenance of any such Joint Patent pursuant to this Section 8.3.3, then such Patent shall no longer be considered a Joint Patent, and shall not be deemed licensed to the other Party under Section 2.1.  
		

		
			8.3.4Costs.  The costs of prosecution and maintenance of the Joint Patents in the Territories shall be [**].  Thereafter, the costs of prosecution and maintenance of the Joint Patents in [**] shall be borne by [**] and the costs of prosecution and maintenance of the Joint Patents in [**] shall be borne by [**].  
		

		
			8.4Defense and Enforcement of Patents.    
		

		
			8.4.1Infringement of Third Party Patents.  Subject to and without limiting the Parties’ rights and the procedures set forth under Section 7.5.2 and Section 10.1(vi), each of the Parties shall promptly, but in any event no later than [**] after receipt of notice thereof, notify the other Party in writing in the event of any claims by a Third Party of alleged patent infringement by Incyte or Hengrui or any of their respective Affiliates or sublicensees with respect to the research, development, manufacture, use, sale, offer for sale or importation of a Licensed Antibody or a Licensed Product (each, an “Infringement Claim”).  Subject to and without limiting the Parties’ rights and the procedures set forth under Section 7.5.2, with respect to Infringement Claims in the Territories, the Parties shall attempt to negotiate in good faith a resolution with respect thereto.  If the Parties cannot settle such Infringement Claim with the appropriate Third Parties within [**] after the receipt of the notice pursuant to this Section 8.4.1, then the following shall apply:    
		

		
			
		

		 

		

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			(a)Subject to Sections 10.1 and Section 10.3, in the case of any such claim against Incyte alone or both Incyte and Hengrui, in each case, with respect to the Licensed Antibodies or the Licensed Products in [**], then [**] shall be deemed to be the “Controlling Party” for purposes of such Infringement Claim.  In the case of any claim against Hengrui alone, or both Incyte and Hengrui, in each case, with respect to the Licensed Antibodies or the Licensed Products in [**], then [**] shall be deemed to be the “Controlling Party” for purposes of such Infringement Claim.  In the event of [**] litigation (such that related cases and/or claims are being pursued both inside [**] and [**]),[**] shall reasonably assist [**] in its role as the Controlling Party in [**].  
		

		
			(b)Subject to Section 10.1 and Section 10.3, the Controlling Party shall assume control of the defense of such Infringement Claim at its expense. The non-Controlling Party, upon reasonable request of the Controlling Party, agrees to join in any such litigation at the Controlling Party’s expense, and in any event to reasonably cooperate with the Controlling Party at the Controlling Party’s expense.  The non-Controlling Party will have the right to consult with the Controlling Party concerning such Infringement Claim and to participate in and be represented by independent counsel in any litigation in which such non-Controlling Party is a party at its own expense.  The Controlling Party shall have the exclusive right to settle any Infringement Claim without the consent of the non-Controlling Party, unless such settlement shall have a material adverse impact on the non-Controlling Party (in which case the consent of such non-Controlling Party shall be required and the consent of [**] is required if such settlement is reasonably likely to [**] on [**]).  For purposes of this Section 8.4.1(b), any settlement that would involve the waiver of rights (including the rights to receive payments) or a payment obligation of such non-Controlling Party shall be deemed a material adverse impact and shall require the consent of such non-Controlling Party, such consent not to be unreasonably withheld, conditioned or delayed.  The Controlling Party shall provide the non-Controlling Party with copies of all material correspondence from the opposing party and from the court adjudicating the dispute and shall be provided with draft pleadings and motions prior to submission and any settlement offers and documentation in connection with such Infringement Claim.    
		

		
			(c)If a Party shall become engaged in or participate in any suit described in this Section 8.4.1, the other Party shall cooperate, and shall cause its and its Affiliates’ employees to cooperate, with such Party in all reasonable respects in connection therewith, including giving testimony and producing documents lawfully requested, and using its reasonable efforts to make available to the other, at no cost to the other (other than reimbursement of actually incurred, reasonable out-of-pocket travel and lodging expenses), such employees who may be helpful with respect to such suit, investigation, claim or other proceeding.
		

		
			(d)Any settlements paid to a Third Party pursuant to a suit, action or proceeding brought pursuant to Section 8.4.1 shall not be subject to a claim for indemnification by the settling Party pursuant to Section 10.1 or 10.2, except for settlements paid to a Third Party pursuant to a suit, action or proceeding that are subject to Hengrui’s indemnification obligation pursuant to Section 10.1(vi). 
		

		
			
		

		 

		

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			8.4.2Prosecution of Infringers.    
		

		
			(a)Notice.  If either Party (i) receives notice of any patent nullity actions, any declaratory judgment actions or any alleged or threatened infringement of patents or patent applications or misappropriation of intellectual property in the Territories comprising the (x) Joint Technology or (y) Hengrui Patents or Hengrui Know-How or (ii) learns that a Third Party is infringing or allegedly infringing any Patent within the Hengrui Patents, in each case in the Territories, or if any Third Party claims that any such Patent is invalid or unenforceable, in each case with respect to the Territories, it will promptly notify the other Party thereof, provide copies of documents received and provide evidence of infringement or the claim of invalidity or unenforceability reasonably available to such Party.    
		

		
			(b)Enforcement of Patents.    
		

		
			(i)As between Hengrui and Incyte, Incyte will have the first right (but not the obligation) to take the appropriate steps to enforce or defend any Patent within the Hengrui Patents and Joint Patents against infringement by a Third Party that is conducting the manufacture, sale, use, offer for sale or import of any pharmaceutical product in the Incyte Territory and nullity actions and opposition proceedings in the Incyte Territory, provided that Incyte provides copies of all material correspondence from the opposing party and from the court adjudicating the dispute and Hengrui shall be provided with draft pleadings and motions prior to submission and any settlement offers and documentation in connection with such enforcement and shall have the right to suggest patent counsel, which suggestion shall be considered by Incyte in good faith and Incyte shall bear the costs of such enforcement or defense, as applicable. Notwithstanding the foregoing and to the extent legally possible, Hengrui will have the right, at its own expense, to be represented in any such action by counsel of its own choice.  Hengrui shall make any declaration and execute any document necessary for Incyte to take the steps set out in the first sentence of this clause (i).    
		

		
			(ii)If, pursuant to Section 8.4.2(b)(i), Incyte fails to institute or defend such litigation or otherwise take steps to remedy the infringement of an Hengrui Patent or a Joint  Patent within [**] (or any shorter period required by applicable Law) of the date one Party has provided notice to the other Party pursuant to Section 8.4.2(a) of such infringement or claim, then Hengrui will have the right (but not the obligation), at its own expense, to bring or defend any such suit, action or proceeding by counsel of its own choice. Incyte will have the right, at its own expense, to be represented in any such action by counsel of its own choice. 
		

		
			(iii)[**] shall not have any right to bring any suit, action or proceeding with respect to the infringement of a [**] or a [**] in [**]; provided, however, that [**] shall inform, consult with and provide reasonable updates to [**] in connection with any such suit, action or proceeding in [**].
		

		
			(c)Cooperation; Damages.    
		

		
			(i)If one Party brings any suit, action or proceeding under Section 8.4.2(b), the other Party agrees to be joined as party plaintiff if necessary to prosecute the suit, action or proceeding and to give the first Party reasonable authority to file and prosecute the suit, action or proceeding at the first Party’s cost (other than in connection with a suit, action or proceeding involving a Joint Patent where both Parties must initiate such suit, action or proceeding); provided, however, that neither Party will be required to transfer any 
		

		 

		

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			right, title or interest in or to any property to the other Party or any other party to confer standing on a Party hereunder.
		

		
			(ii)The Party not pursuing the suit, action or proceeding hereunder will provide reasonable assistance to the other Party, including by providing access to relevant documents and other evidence and making its employees available, subject to the other Party’s reimbursement of any Out-of-Pocket Costs incurred by the non-enforcing or defending Party in providing such assistance.
		

		
			(iii)[**] shall not, without the prior written consent of [**] (which shall not be unreasonably withheld, conditioned or delayed), enter into any stipulation, compromise or settlement relating to any claim, suit or action that it brought under Section 8.4.2 involving [**] that admits the invalidity or unenforceability of [**] or requires [**] to pay any sum of money, or otherwise adversely affects the rights of [**] with respect to [**], or [**] rights hereunder (including [**]).  
		

		
			(iv)Any settlements, damages or other monetary awards (a “Recovery”) recovered pursuant to a suit, action or proceeding brought pursuant to Section 8.4.2 will be allocated first to the costs and expenses of the Party taking such action, and second, to the costs and expenses (if any) of the other Party, with any remaining amounts of any monetary Recovery (if any) to be split as follows: (A) if [**] is the Party taking such action, the remaining Recovery shall be treated as [**] and be [**]  (and, for purposes of clarity, all remaining Recoveries related to [**] shall be [**]), and (B) if [**] is the Party taking such Action, the remainder shall be treated as [**] of [**] (applying Section 1.53, mutatis mutandis) and [**] shall pay to [**] a  [**] mutatis mutandis (and, for purposes of clarity, all remaining Recoveries related to [**] shall be [**]).
		

		
			(v)Any settlements paid to a Third Party pursuant to a suit, action or proceeding brought pursuant to Section 8.4.2 shall not be subject to a claim for indemnification by the settling Party pursuant to Section 10.1 or 10.2, except for settlements paid to a Third Party pursuant to a suit, action or proceeding that are subject to Hengrui’s indemnification obligation pursuant to Section 10.1(vi). 
		

		
			(d)Infringement and Defense.   For clarity, with respect to any and all infringement or defense of any [**] anywhere in [**], [**] (or its designee) shall have the sole and exclusive right to bring an appropriate suit or other action against any Person engaged in such infringement or defense of any such [**] in its sole discretion and at its sole expense; provided, however, that [**] shall inform, consult with and provide reasonable updates to [**] in connection with any such suit, action or proceeding in [**].  
		

		
			8.5Patent Term Extensions.  As between Incyte and Hengrui, Incyte, to the extent permitted by applicable Law, shall have the exclusive right, but not the obligation, to seek, in Hengrui’s name if so required, Patent Term Extensions (including any supplemental protection certificates and the like available under applicable Laws) in any country in the Incyte Territory in relation to the Hengrui Patents and Joint Patents.  Hengrui shall cooperate and support Incyte in connection with all such activities.  Incyte, its agents and attorneys will give due consideration to all suggestions and comments of Hengrui regarding any such activities with the aim of using reasonable efforts to obtain all available Patent Term Extensions (including any supplemental protection certificates and the like available under 
		

		 

		

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			applicable Laws), but, in the event of a disagreement between the Parties, Incyte will have the final decision making authority. If Incyte seeks a Patent Term Extension, supplemental patent protection or related extension of rights with respect to any Incyte Patent that exists as of the Effective Date and covers a Licensed Product, then for the purpose of calculating the Royalty Term, the last-to-expire Patent among the Hengrui Patents will be deemed to be extended by the same amount of time as the Incyte Patent.
		

		
			Article 9
Representations, Warranties and Covenants 
		

		
			9.1Mutual Representations and Warranties.  Each Party hereby represents and warrants (as applicable) to the other Party as follows, as of the Effective Date: 
		

		
			9.1.1Corporate Existence and Power.  It is a company or corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it is incorporated, and has full corporate power and authority and the legal right to own and operate its property and assets and to carry on its business as it is now being conducted and as contemplated in this Agreement, including the right to grant the licenses granted by it hereunder.
		

		
			9.1.2Authority and Binding Agreement.  (i) It has the corporate power and authority and the legal right to enter into this Agreement and perform its obligations hereunder, (ii) it has taken all necessary corporate action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder, and (iii) this Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, and binding obligation of such Party that is enforceable against it in accordance with its terms, except as enforcement may be affected by bankruptcy, insolvency or other similar laws and by general principles of equity.
		

		
			9.1.3No Conflicts.  The execution, delivery and performance of this Agreement by it does not (i) conflict with any agreement, instrument or understanding, oral or written, to which it or any of its Affiliates is a party and by which it or any of its Affiliates may be bound or (ii) violate any Laws of any Governmental Authority having jurisdiction over it. 
		

		
			9.1.4All Consents and Approvals Obtained.  Except with respect to Regulatory Approvals for the Development, Manufacturing or Commercialization of the Licensed Antibodies and the Licensed Products or as otherwise described in this Agreement, (i) all necessary consents, approvals and authorizations of, and (ii) all notices to, and filings by such Party with, all Governmental Authorities and other Persons required to be obtained or provided by such Party as of the Effective Date in connection with the execution, delivery and performance of this Agreement have been obtained and provided. 
		

		
			
		

		 

		

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			9.1.5To the Knowledge of such Party, neither such Party nor any of its Affiliates has used any employee that is debarred by the FDA under the Generic Drug Enforcement Act of 1992 (or by any analogous agency or under any analogous Law in the Territory) and neither Party will use any such employee after the Effective Date.
		

		
			9.1.6Anti-Corruption Laws.  Neither it nor any of its Affiliates has, directly or indirectly, solicited, received or agreed to accept any payment of money or anything else of value in violation of the Anti-Corruption Laws that are applicable to it or its Affiliates.
		

		
			9.2Additional Representations and Warranties of Hengrui.  Hengrui hereby represents and warrants to Incyte that, as of the Effective Date, except as set forth on Schedule 9.2 and for purposes of this Agreement, “Knowledge” means, when referring to the Knowledge of Hengrui, the actual knowledge of Hengrui personnel.  
		

		
			9.2.1Neither Hengrui nor any of its Affiliates has filed any Marketing Authorization Applications with a Governmental Authority in the Territories for the sale of the Licensed Products in the Territories. 
		

		
			9.2.2Neither Hengrui nor its Affiliates, nor, to the Knowledge of Hengrui, its subcontractors, has received any notice in writing or otherwise has knowledge of any facts which have led Hengrui to believe that any of the Regulatory Approvals relating to the Licensed Products are not currently in good standing with the FDA, the EMA or their foreign equivalents.  
		

		
			9.2.3Neither Hengrui nor its Affiliates, nor, to the Knowledge of Hengrui, its subcontractors has received written notice of any proceedings pending before or threatened by any Regulatory Authority with respect to the Licensed Products or any facility where the Licensed Products is Manufactured. 
		

		
			9.2.4To the Knowledge of Hengrui, (i) the issued patents encompassed within the Hengrui Patents are valid and enforceable patents, and (ii) there are no facts which would render the patent applications encompassed within the Hengrui Patents, if and when issued, invalid or unenforceable. To the Knowledge of Hengrui, no Third Party (a) is infringing any such Hengrui Patents or has misappropriated any Hengrui Technology or (b) has challenged the ownership, scope, duration, validity, enforceability or priority of, or Hengrui’s right to use or license, any Hengrui Technology.
		

		
			9.2.5To the Knowledge of Hengrui: Schedule 1.32 contains a complete and correct list of all the Hengrui Patents as of the Effective Date and the Patents identified in Schedule 1.32 are all the Patents that are Controlled by Hengrui or any of its Affiliates that are necessary for 
		

		 

		

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			Incyte to Develop, Manufacture and Commercialize the Licensed Antibodies and the Licensed Products in the Incyte Territory. 
		

		
			9.2.6There are no claims, judgments or settlements against or owed by Hengrui, nor any pending reissue, reexamination, interference, opposition or similar proceedings, with respect to Hengrui Technology, and Hengrui has not received notice as of the Effective Date of any threatened claims or litigation or any reissue, reexamination, interference, opposition or similar proceedings seeking to invalidate or otherwise challenge the Hengrui Technology. 
		

		
			9.2.7To the Knowledge of Hengrui, and based on the current anticipated date of launch, use, sale, offer for sale, or importation by Hengrui or Incyte (or their respective Affiliates), as applicable, of the Licensed Products (as the Licensed Products exists on the Effective Date, and excluding, for the avoidance of doubt, any additional technology that may be combined or incorporated therewith, or any future improvements or enhancements to the Licensed Products) in the Territories, such Licensed Products (i) do not infringe any issued, valid and enforceable patent of any Third Party and (ii) do not misappropriate any Know-How of any Third Party.  
		

		
			9.2.8To the Knowledge of Hengrui, Hengrui and its Affiliates have complied with all applicable Laws in all material respects, including any disclosure requirements, in connection with the filing, prosecution and maintenance of the Hengrui Patents in the Territories. Any material renewal and maintenance fees due as of the Effective Date with respect to the prosecution and maintenance of the Hengrui Patents in the Territories have been paid, to the extent applicable. 
		

		
			9.2.9As of the Effective Date, Hengrui has disclosed to Incyte all reasonably relevant data and information regarding the Hengrui Technology and the Licensed Antibodies and all such data and information is complete and accurate in all material aspects.  Hengrui has allowed, and will continue to allow, Incyte access to all material information in its possession or Control (i) containing the results of all preclinical testing and human clinical testing of the Licensed Antibodies and (ii) concerning side effects, injury, toxicity or sensitivity reaction and incidents or severity thereof with respect to the Licensed Antibodies. 
		

		
			9.2.10To the Knowledge of Hengrui, there are no safety or efficacy issues involving the Licensed Antibodies or the Development or Commercialization of the Licensed Antibodies or the Licensed Products in the Field or in the Incyte Territory.
		

		
			9.2.11Any research and development, including Clinical Trials regarding the Licensed Antibodies were conducted and the Development Data resulting from such research and development have been generated by or on behalf of Hengrui or its Affiliates, or to Knowledge 
		

		 

		

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			of Hengrui with respect to any subcontractors, in compliance in all material respects with all applicable Laws and, to the extent applicable, GCP, GLP and GMP. 
		

		
			9.2.12To the Knowledge of Hengrui, the inventors named in the Hengrui Patents listed on Schedule 1.32 that are owned by Hengrui or any Affiliate are all of the true inventors for such Patents and have assigned, or are under a written obligation to assign, to Hengrui all of their right, title and interest to such Hengrui Patents and the inventions described therein.  
		

		
			9.2.13To the Knowledge of Hengrui, the Hengrui Know-How has (i) not been licensed in conflict to any agreement, instrument or understanding to which Hengrui is a Party, and (ii) not been disclosed to Third Parties other than under an obligation of confidentiality.
		

		
			Hengrui acknowledges that Incyte is relying, and is entitled to rely, on the foregoing representations and warranties.
		

		
			9.3Mutual Covenants.  Each Party hereby covenants, on behalf of itself and its Affiliates, to the extent applicable, to the other Party that, during the Term:
		

		
			9.3.1Compliance.  Each Party shall, in conducting any and all activities under this Agreement with respect to the Licensed Products, comply with all applicable Laws, including all applicable Regulatory Approvals for the Licensed Products in its respective Territory.  In addition, neither Party shall use in any capacity, in connection with its Commercialization (or Development) of the Licensed Products hereunder, any Person who has been debarred pursuant to Section 306 of the FD&C Act (or similar Law outside of the U.S.), or who is the subject of a conviction described in such section, and each Party shall inform the other Party in writing immediately if it or any Person who is performing services for each Party hereunder is debarred or is the subject of a conviction described in Section 306 (or similar Law outside of the U.S.), or if any action, suit, claim, investigation or legal administrative proceeding is pending or, to such Party’s knowledge, is threatened, relating to the debarment of such Party any Person used in any capacity by such Party in connection with its Commercialization (or Development) of the Licensed Products hereunder.
		

		
			9.3.2Economic Sanctions Laws. Each Party and its Affiliates shall not, to the extent it would cause such Party or its Affiliates to violate applicable Laws, directly or indirectly engage in any transactions, or otherwise deal with, any country or Person targeted by the U.S., European Union, or other relevant economic sanctions laws in connection with any activities related to such Party’s interaction with the other Party contemplated under this Agreement. 
		

		
			9.3.3Compliance. On behalf of itself, its officers, directors and employees and on behalf of its Affiliates, agents, representatives, 
		

		 

		

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			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			consultants and subcontractors hired in connection with the subject matter of this Agreement (together with the Party, the “Party Representatives”) that in connection with any activities of such Party of its obligations under this Agreement, as applicable:
		

		
			(a)its Party Representatives shall not directly or indirectly pay, offer or promise to pay, or authorize the payment of any money, or give, offer or promise to give, or authorize the giving of anything else of value, to:
		

		
			(i)any official of a Governmental Authority in order to influence official action;
		

		
			(ii)any Person (whether or not an official of a Governmental Authority) (a) to influence such Person to act in breach of a duty of good faith, impartiality or trust (“acting improperly”), (b) to reward such Person for acting improperly, or (c) where such Person would be acting improperly by receiving the money or other thing of value;
		

		
			(iii)any other Person while knowing or having reason to know that all or any portion of the money or other thing of value shall be paid, offered, promised or given to, or shall otherwise benefit, an official of a Governmental Authority in order to influence official action for or against either Party in connection with the matters that are the subject of this Agreement; or
		

		
			(iv)any Person to reward that Person for acting improperly or to induce that Person to act improperly.
		

		
			In each case (i)-(iv), in violation of the Anti-Corruption Laws that are applicable to such Party Representatives.
		

		
			9.3.4Anti-Corruption Laws. Its Party Representatives shall not, directly or indirectly, solicit, receive or agree to accept any payment of money or anything else of value in violation of the Anti-Corruption Laws that are applicable to such Party Representatives.
		

		
			9.3.5Notification. It shall promptly provide the other Party with written notice of the following events:
		

		
			(a)upon becoming aware of any breach or violation by a Party or its Party Representative of any representation, warranty or undertaking set forth in Section 9.3.4; and
		

		
			(b)upon receiving a formal notification that it is the target of a formal investigation by a Governmental Authority for a violation of applicable Law related to activities hereunder or upon receipt of information from any of its Party Representatives connected with this Agreement that any of them is the target of a formal investigation by a Governmental Authority for a violation of applicable Law related to activities hereunder except to the extent that the disclosing Party’s counsel reasonably believes that such 
		

		 

		

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			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			disclosure to the other Party could have a significant adverse impact on the disclosing Party’s legal position or defense (including the loss of attorney-client privilege) with respect to any such occurrence.  In the event that either Party determines that disclosure of relevant factual information regarding an occurrence could have a significant adverse impact on its legal position or defense, the determining Party shall promptly notify the other Party in writing that the determining Party is exercising its right not to disclose relevant factual information regarding an occurrence.  
		

		
			9.4Disclaimer.  Incyte understands that the Licensed Antibodies and the Licensed Products are the subject of ongoing clinical research and development and that Hengrui cannot ensure the usefulness of the Licensed Antibodies and the Licensed Products or that the Licensed Products will receive Regulatory Approvals.
		

		
			9.5No Other Representations or Warranties.  EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, ARE MADE OR GIVEN BY OR ON BEHALF OF A PARTY.  EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, ALL REPRESENTATIONS AND WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED.
		

		
			Article 10
Indemnification
		

		
			10.1Indemnification by Hengrui.  Hengrui hereby agrees to save, indemnify, defend and hold Incyte, its Affiliates, its sublicensees, and their respective directors, officers, agents and employees harmless from and against any and all losses, damages, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses) (collectively, “Losses”) arising in connection with any and all charges, complaints, actions, suits, proceedings, hearings, investigations, claims, demands, judgments, orders, decrees, stipulations or injunctions by a Third Party (each a “Third Party Claim”) resulting or otherwise arising from (i) any breach by Hengrui of any of its representations, warranties, covenants or obligations pursuant to this Agreement, (ii) the negligence or willful misconduct by Hengrui or its Affiliates or their respective officers, directors, employees, agents, consultants, subcontractors or sublicensee in performing any obligations under this Agreement, (iii) any matter arising from the research and development of the Licensed Antibodies or the Licensed Products by or on behalf of Hengrui prior to the Effective Date in the Territories, (iv) the Development or Manufacturing of the Licensed Antibodies and the Licensed Products in the Territories hereunder and the Commercialization of the Licensed Products in the Hengrui Territory (including, for clarity, product liability Losses resulting therefrom) by Hengrui or its Affiliates or their respective officers, directors, employees, agents, consultants, subcontractors or sublicensees, (v) any Development Activities conducted by Hengrui, or (vi) any claim of patent infringement brought by a Third Party on the basis that the Lead Antibody or Lead Product infringes any Patent that was issued or published as of the Effective Date (but excluding any improvements or modifications made to, or combinations with any other compound of, the Lead Antibody or the Lead Product by Incyte, its Affiliates or its sublicensees on or after the Effective Date, solely to the extent such claim arises from 
		

		 

		

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			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			or relates to such improvement, modification, or combination); in each case except to the extent that such Losses are subject to indemnification by Incyte pursuant to Section 10.2.
		

		
			10.2Indemnification by Incyte.  Incyte hereby agrees to save, indemnify, defend and hold Hengrui, its Affiliates, its sublicensees and their respective directors, agents and employees harmless from and against any and all Losses arising in connection with any and all Third Party Claims resulting or otherwise arising from (i) any breach by Incyte of any of its representations, warranties, covenants or obligations pursuant to this Agreement, (ii) the negligence or willful misconduct by Incyte or its Affiliates or their respective officers, directors, employees, agents, consultants, subcontractors or sublicensees in performing any obligations under this Agreement, (iii) the Development or Manufacturing or Commercialization of the Licensed Antibodies and the Licensed Products in the Incyte Territory (including, for clarity, any product liability Losses resulting therefrom) by Incyte or its Affiliates or their respective officers, directors, employees, agents, consultants, subcontractors or sublicensees, or (iv) any Development Activities conducted by Incyte; in each case except to the extent that such Losses are subject to indemnification by Hengrui pursuant to Section 10.1. 
		

		
			10.3Indemnification Procedures.    
		

		
			10.3.1Notice of Claim.  All indemnification claims in respect of any indemnitee seeking indemnity under Sections 10.1 or 10.2, as applicable (collectively, the “Indemnitees” and each an “Indemnitee”) will be made solely by the corresponding Party (the “Indemnified Party”).  The Indemnified Party will give the indemnifying Party (the “Indemnifying Party”) prompt written notice (an “Indemnification Claim Notice”) of any Losses and any legal proceeding initiated by a Third Party against the Indemnified Party as to which the Indemnified Party intends to make a request for indemnification under Sections 10.1 or 10.2, as applicable, but in no event will the Indemnifying Party be liable for any Losses that result from any delay in providing such notice which materially prejudices the defense of such proceeding.  Each Indemnification Claim Notice shall contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss are known at such time).  Together with the Indemnification Claim Notice, the Indemnified Party will furnish promptly to the Indemnifying Party copies of all notices and documents (including court papers) received by any Indemnitee in connection with the Third Party Claim.    
		

		
			10.3.2Control of Defense.  The Indemnifying Party, at its option, may assume the defense of any Third Party Claim subject to indemnification as provided for in Sections 10.1 or 10.2, as applicable, by giving written notice to the Indemnified Party within [**] after the Indemnifying Party’s receipt of an Indemnification Claim Notice.  Upon assuming the defense of a Third Party Claim, the Indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel it selects, and such Indemnifying Party shall thereafter continue to defend such Third Party Claim in good faith.  Should the Indemnifying Party assume the defense of a Third Party Claim (and continue to defend 
		

		 

		

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			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			such Third Party Claim in good faith), the Indemnifying Party will not be liable to the Indemnified Party or any other Indemnitee for any legal expenses subsequently incurred by such Indemnified Party or other Indemnitee in connection with the analysis, defense or settlement of the Third Party Claim, unless the Indemnifying Party has failed to assume the defense and employ counsel in accordance with this Section 10.3 or in case the matter is subject to indemnification under Section 10.1(vi).
		

		
			10.3.3Right to Participate in Defense.  Without limiting Section 10.3.2, any Indemnitee will be entitled to participate in the defense of a Third Party Claim for which it has sought indemnification hereunder and to employ counsel of its choice for such purpose; provided, however, that such employment will be at the Indemnitee’s own expense unless (i) the employment thereof has been specifically authorized by the Indemnifying Party in writing, (ii) the Indemnifying Party has failed to assume the defense (or continue to defend such Third Party Claim in good faith) and employ counsel in accordance with this Section 10.3, in which case the Indemnified Party will be allowed to control the defense, or (iii) any matter that is subject to indemnification under Section 10.1(vi), in which case the reasonable cost of such employment of counsel shall be at the Indemnifying Party’s expense.
		

		
			10.3.4Settlement.  With respect to any Losses relating solely to the payment of money damages in connection with a Third Party Claim and that will not result in the Indemnitee becoming subject to injunctive or other relief or otherwise adversely affect the business of the Indemnitee in any material manner, and as to which the Indemnifying Party will have acknowledged in writing the obligation to indemnify the Indemnitee hereunder, the Indemnifying Party will have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the Indemnifying Party, in its reasonable discretion, deems appropriate; provided, however, that such terms shall include a complete and unconditional release of the Indemnified Party from all liability with respect thereto, and will transfer to the Indemnified Party all amounts which such Indemnified Party is liable to pay prior to the time of the entry of judgment.  With respect to all other Losses in connection with Third Party Claims, where the Indemnifying Party has assumed the defense of such Third Party Claim in accordance with Section 10.3.2, the Indemnifying Party will have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, provided it obtains the prior written consent of the Indemnified Party (which consent will be at the Indemnified Party’s reasonable discretion).  The Indemnifying Party that has assumed the defense of (and continues to defend) such Third Party Claim in accordance with Section 10.3.2 will not be liable for any settlement or other disposition of a Loss by an Indemnitee that is reached without the written consent of such Indemnifying Party.  Regardless of whether the Indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnitee will admit any liability with respect to, or settle, compromise or discharge, any 
		

		 

		

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			Third Party Claim without first offering to the Indemnifying Party the opportunity to assume the defense of such Third Party Claim in accordance with Section 10.3.2.
		

		
			10.3.5Cooperation.  If the Indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party will, and will cause each other Indemnitee to, cooperate in the defense or prosecution thereof and will furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection with such Third Party Claim.  Such cooperation will include access during normal business hours afforded to the Indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making Indemnitees and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the Indemnifying Party will reimburse the Indemnified Party for all its reasonable out-of-pocket expenses incurred in connection with such cooperation.
		

		
			10.3.6Expenses of the Indemnified Party.  Except as provided above, the reasonable and verifiable costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party in connection with any Third Party Claim will be reimbursed on a Calendar Quarter basis by the Indemnifying Party, without prejudice to the Indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the Indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.
		

		
			10.4Limitation of Liability.  NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES UNDER OR IN CONNECTION WITH THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.  NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 10.4 IS INTENDED TO OR SHALL LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER Section 10.1 or 10.2,  OR DAMAGES AVAILABLE FOR A PARTY’S BREACH OF CONFIDENTIALITY OBLIGATIONS UNDER Article 11 OR FOR A PARTY’S GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUD.
		

		
			10.5Insurance.  Each Party shall have and maintain such type and amounts of liability insurance as is normal and customary in the pharmaceutical industry in the United States generally for parties similarly situated and shall upon request provide the other Party with a copy of its policies of such insurance, along with any amendments thereto.  It is understood that such insurance shall not be construed to create a limit of either Party’s liability with respect to its indemnification obligations under this Article 10.  Each Party shall provide the other Party with written notice at least [**] prior to the cancellation, nonrenewal or material change in such insurance or self-insurance which materially adversely affects the rights of the other Party hereunder.  Upon request, each Party will promptly provide the other 
		

		 

		

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			Party with certificates of insurance evidencing such coverages.  The certificates shall specify the dates such coverage expires.  
		

		
			Article 11
Confidentiality
		

		
			11.1Confidential Information.  As used in this Agreement, the term “Confidential Information” means all information, whether it be in written form, visually or orally, including all production schedules, lines of products, volumes of business, processes, new product developments, product designs, formulae, technical information, laboratory data, clinical data, patent information, know-how, trade secrets, financial and strategic information, marketing and promotional information and data, and other material relating to any products, projects or processes of one Party (the “Disclosing Party”), that is provided to, or otherwise obtained by, the other Party (the “Receiving Party”) in connection with this Agreement (including information exchanged prior to the date hereof in connection with the transactions set forth in this Agreement, including any information disclosed by either Party pursuant to the Confidential Disclosure Agreement between the Parties dated May 6, 2015.  Notwithstanding the foregoing sentence, Confidential Information shall not include any information or materials that:    
		

		
			(a)were already known to the Receiving Party (other than under an obligation of confidentiality) at the time of disclosure by the Disclosing Party, to the extent such Receiving Party has documentary evidence to that effect;
		

		
			(b)were generally available to the public or otherwise part of the public domain at the time of disclosure thereof to the Receiving Party;
		

		
			(c)became generally available to the public or otherwise part of the public domain after disclosure or development thereof, as the case may be, and other than through any act or omission of a Party in breach of such Party’s confidentiality obligations under this Agreement;
		

		
			(d)were disclosed to a Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others; or
		

		
			(e)were independently discovered or developed by or on behalf of the Receiving Party without the use of the Confidential Information belonging to the other Party, to the extent such Receiving Party has documentary evidence to that effect.
		

		
			11.2Confidentiality Obligations.  Each of Incyte and Hengrui shall keep all Confidential Information received from or on behalf of the other Party with the same degree of care with which it maintains the confidentiality of its own Confidential Information, but in all cases no less than a reasonable degree of care.  Neither Party shall use such Confidential Information for any purpose other than in performance of this Agreement or disclose the same to any other Person other than to such of its and its Affiliates’ directors, officers, managers, employees, independent contractors, agents, consultants, (potential) sublicensees or (potential) investors who have a need to know such Confidential Information to implement the terms of this Agreement or enforce its rights under this Agreement and who are bound by confidentiality obligations not less strict than those contained herein; provided, however, that 
		

		
			
		

		 

		

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			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			a Receiving Party shall advise any of its and its Affiliates’ directors, officers, managers, employees, independent contractors, agents, consultants, (potential) sublicensees or (potential) investors who receives such Confidential Information of the confidential nature thereof and of the obligations contained in this Agreement relating thereto, and the Receiving Party shall ensure (including, in the case of a Third Party, by means of a written agreement with such Third Party having terms at least as protective as those contained in this Article 11) that all such directors, officers, managers, employees, independent contractors, agents, consultants, (potential) sublicensees or (potential) investors comply with such obligations.  It is understood that receipt of Confidential Information under this Agreement will not limit the Receiving Party from assigning its employees to any particular job or task in any way it may choose, subject to the terms and conditions of this Agreement.    
		

		
			11.3Return of Confidential Information. Subject to a Party’s continuing right to use and disclose Confidential Information of the other Party under the surviving license pursuant to Article 13, if any, following expiration or any early termination of this Agreement, the Receiving Party shall return or destroy all documents, tapes or other media containing Confidential Information of the Disclosing Party that remain in the possession of the Receiving Party or its directors, officers, managers, employees, independent contractors, agents, consultants, (potential) sublicensees or (potential) investors, except that the Receiving Party may keep one (1) copy of the Confidential Information in the legal department files of the Receiving Party, solely for archival purposes.  Such archival copy shall be deemed to be the property of the Disclosing Party, and shall continue to be subject to the provisions of this Article 11.  The provisions of this Section 11.3 shall not apply to copies of electronically exchanged Confidential Information made as a matter of routine information technology backup, provided that it is not otherwise accessible to Receiving Party other than its information technology representatives responsible for maintaining the Receiving Party’s electronic backup systems, and to Confidential Information or copies thereof which must be stored according to provisions of mandatory applicable Laws.    
		

		
			11.4Permitted Disclosure and Use.  Notwithstanding Section 11.2: (i) either Party may disclose Confidential Information belonging to the other Party only to the extent such disclosure is reasonably necessary to: (a) comply with or enforce any of its obligations or rights under this Agreement: or comply with applicable Laws; and (ii) either Party may disclose Confidential Information belonging to the other Party related to a Licensed Product only to the extent such disclosure is reasonably necessary to obtain or maintain Regulatory Approvals of a Licensed Product to the extent such disclosure is made to a Governmental Authority.  If a Party deems it necessary to disclose Confidential Information of the other Party pursuant to this Section 11.3, such Party shall give reasonable advance written notice of such disclosure to the other Party to permit such other Party sufficient opportunity to object to such disclosure or to take measures to ensure confidential treatment of such information, including seeking a protective order or other appropriate remedy.
		

		
			11.5Notification.  The Receiving Party shall notify the Disclosing Party promptly upon discovery of any unauthorized use or disclosure of the Disclosing Party’s Confidential Information, and will cooperate with the Disclosing Party in any reasonably requested fashion to assist the Disclosing Party to regain possession of such Confidential Information and to prevent its further unauthorized use or disclosure.
		

		
			
		

		 

		

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			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			11.6Publicity; Filing of this Agreement.
		

		
			11.6.1Publicity.  The Parties (or their Affiliates) shall issue a press release, in the form attached as Exhibit B, within one (1) Business Day after the Effective Date, to announce the execution of this Agreement and describe the material financial and operational terms of this Agreement.  Except as otherwise provided in this Section 11.6, each Party shall maintain the confidentiality of all provisions of this Agreement, and without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed, neither Party nor its respective Affiliates shall make any press release or other public announcement of or otherwise disclose the provisions of this Agreement to any Third Party, except for: (i) disclosure to those of its directors, officers, employees, accountants, attorneys, underwriters, lenders and other financing sources, (potential) strategic partners, advisors, agents and (potential) sublicensees whose duties reasonably require them to have access to this Agreement; provided that such directors, officers, employees, accountants, attorneys, underwriters, lenders and other financing sources, advisors, agents, (potential) strategic partners or (potential) sublicensees are required to maintain the confidentiality of this Agreement; (ii) disclosures required by the rules or regulations of the New York Stock Exchange, The NASDAQ Stock Market or any other stock exchange on which securities issued by a Party or a Party’s Affiliate are traded, in which case the disclosing Party shall provide the nondisclosing Party with at least [**] notice unless otherwise not practicable, but in any event no later than the time the disclosure required by such rule or regulations is made; (iii) disclosures as may be required by Law, in which case the disclosing Party shall provide the nondisclosing Party with prompt advance notice of such disclosure and cooperate with the nondisclosing Party to seek a protective order or other appropriate remedy, including a request for confidential treatment in the case of a filing with the U.S. Securities and Exchange Commission (“SEC”); (iv) reports that may be filed with the SEC under the Securities Exchange Act of 1934 by either Party or its applicable Affiliate setting forth the press release referred to above, and/or this Agreement in redacted form as provided in Section 11.6.2; (v) disclosures that are consistent with or complementary to those described in clause (iv) but which do not contain any Confidential Information of the other Party; and (vi) other disclosures for which consent has previously been given.  A Party may publicly disclose without regard to the preceding requirements of this Section 11.6 any information that was previously publicly disclosed pursuant to this Section 11.6. 
		

		
			11.6.2Redacted Agreement.  The Parties acknowledge that, if legally required, either or both Parties or its applicable Affiliate may be obligated to file a copy of this Agreement with the SEC or other Governmental Authorities.  Each Party or its applicable Affiliate shall be entitled to make such a required filing; provided that it initially files a redacted copy of this Agreement approved by both Parties (“Redacted Agreement”) and requests confidential treatment of the terms redacted from this Agreement for a reasonable period of time.  In the event of any such filing, each Party shall (i) permit the other party to review and 
		

		 

		

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			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

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			comment upon such request for confidential treatment and any subsequent correspondence with respect thereto at least [**] in advance of its submission to the SEC or such other Governmental Authorities, (ii) reasonably consider and incorporate the other Party’s comments thereon to the extent consistent with the then-current legal requirements governing redaction of information from material agreements that must be publicly filed, (iii) promptly deliver to the other Party any written correspondence received by it or its representatives from such Governmental Authority, if any, with respect to such confidential treatment request and promptly advise the other Party of any other substantive communications between it or its representatives with such Governmental Authority with respect to such confidential treatment request, (iv) upon the written request of the other Party, request an appropriate extension of the term of the confidential treatment period, where available (it being understood that a Governmental Authority may in its sole discretion reject such request) and (v) if such Governmental Authority requests any changes to the redactions set forth in the Redacted Agreement, use commercially reasonable efforts to support the redactions in the Redacted Agreement as originally filed (to the extent consistent with the then-current legal requirements governing redaction of information from material agreements that must be publicly filed) and, to the extent reasonably practicable, not agree to any changes to the Redacted Agreement without first discussing such changes with the other Party and taking the other Party’s comments into consideration when deciding whether to agree to such changes.  Each Party shall be responsible for its own legal and other external costs in connection with any such filing, registration or notification.    
		

		
			11.7Publication.  The Parties intend to publish or present the conduct and the outcomes of Clinical Trials and will use Commercially Reasonable Efforts to align such publication or presentation to the public. Each Party shall submit, through the JSC, for the other Party’s approval, such approval not to be unreasonably withheld, conditioned or delayed, copies of each proposed academic, scientific, medical and other publication or presentation that contains or refers to the Hengrui Technology or otherwise relates to the Licensed Antibodies, the Licensed Products or any research or Development Activities under this Agreement to the other Party at least [**] in advance of submitting such proposed publication or presentation to a publisher or other Third Party.  The other Party shall have the right to review and comment on each such proposed publication or presentation and the publishing Party shall consider any comments in good faith. The other Party shall have the right to remove any of its own Confidential Information prior to submission for publication or presentation by the publishing Party.  The publishing Party shall redact or otherwise modify the proposed publication or presentation to remove any such Confidential Information of the other Party.  If the non-publishing Party informs the publishing Party that a publication, in the non-publishing Party’s reasonable judgment, could be expected to have a material adverse effect on any patentable invention owned by or licensed, in whole or in part, to the non-publishing Party (other than pursuant to a license granted under this Agreement), or on any Know-How which is Confidential Information of the non-publishing Party, the publishing Party shall delay or prevent such publication as follows:  (i) with respect to a patentable invention, such publication shall be delayed sufficiently long (not to exceed sixty (60) days) to permit the timely preparation and filing of a patent application; and (ii) with respect to 
		

		 

		

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			Know-How which is Confidential Information of such non-publishing Party, such Know-How shall be deleted from the Publication.  In addition, in the event that the document includes data, information or material generated by the other Party’s scientists, and professional standards for authorship would be consistent with including the other Party’s scientists as co-authors of the document, the names of such scientists will be included as co-authors.  
		

		
			11.8Use of Names.  Except as otherwise set forth in this Agreement, neither Party shall use the name of the other Party in relation to this transaction in any public announcement, press release or other public document without the written consent of such other Party, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that subject to Section 11.6, either Party may use the name of the other Party in any document filed with any Regulatory Authority or Governmental Authority, including the FDA, EMA and the SEC.
		

		
			11.9Survival.  The obligations and prohibitions contained in this Article 11 as they apply to Confidential Information shall survive the expiration or termination of this Agreement for a period of [**].
		

		
			11.10Effect of Change of Control of Hengrui.  In the event that Hengrui is acquired in a Change of Control by a Third Party (an Acquirer as defined below), then:    
		

		
			11.10.1the intellectual property of such Acquirer held or developed by such Acquirer prior to such acquisition (“Acquirer Technology”) shall be excluded from the Hengrui Technology;
		

		
			11.10.2intellectual property that, following such Change of Control, is developed, made or otherwise acquired or controlled by the Acquirer without use of proprietary Hengrui Technology (such proprietary know-how, the “Segregated Technology”) shall not be included within the Hengrui Technology.  Hengrui shall ensure that the Acquirer shall have no rights of access or other rights to Incyte’s Confidential Information.  Hengrui shall take reasonable steps to limit data access and sharing between Hengrui personnel working on the preclinical Development of Licensed Products or having access to data from such Development or any Incyte Confidential Information and Hengrui personnel working on Segregated Technology. 
		

		
			11.10.3Notwithstanding the foregoing, if rights to Segregated Technology were granted to the Acquirer in accordance with, and not in breach of, this Agreement prior to the Change of Control, then the use of such Segregated Technology in accordance with such grant (and consistent with the exclusive licenses granted under this Agreement) shall not be deemed use of Segregated Technology for purposes of this Section 11.10 but shall be deemed Acquirer Technology;
		

		
			11.10.4Such Acquirer (and Affiliates of such Acquirer which are not controlled by (as defined under the Affiliate definition in Article 1) Hengrui itself) shall be excluded from the Affiliate definition solely for purposes of the applicable components of the Hengrui 
		

		 

		

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			Technology. For clarity, the Acquirer has sole discretion as to whether it will contribute its intellectual property or know-how to Hengrui’s activities and Hengrui Technology under this Agreement; 
		

		
			As used herein, “Acquirer” means the Third Party involved in the Change of Control, and any Affiliate of such Third Party that was not an Affiliate of the Acquired Party immediately prior to the Change of Control; and “Acquired Party” means the Party that was the subject of such Change of Control, together with any entity that was its Affiliate immediately prior to the Change of Control, and  “Change of Control” means any of the following: (i) the sale or disposition of all or substantially all of the assets of a Party to a Third Party, (ii) the acquisition by a Third Party, other than an employee benefit plan (or related trust) sponsored or maintained by a Party or any of its Affiliates, of more than [**] of such Party’s outstanding shares of voting capital stock (e.g., capital stock entitled to vote generally for the election of directors), or (iii) the merger or consolidation of a Party with or into another corporation, other than, in the case of (i-iii) of this definition, an acquisition or a merger or consolidation or sale of assets of the Party in which holders of shares of such Party’s voting capital stock immediately prior to the acquisition, merger, sale or consolidation have at least [**] of the ownership of voting capital stock of the acquiring Third Party or the surviving corporation in such merger or consolidation, as the case may be, immediately after the acquisition, merger, sale or consolidation.  Notwithstanding the foregoing, a Change of Control shall not be deemed to occur on account of an initial public offering, the acquisition of securities of a Party by an institutional investor, or Affiliate thereof, that acquires a Party’s securities in a transaction or series of related transactions that is a bona fide equity financing transaction, or a sale of assets, merger or other transaction effected exclusively for the purpose of changing the corporate domicile of a Party.
		

		
			Article 12
Term and Termination 
		

		
			12.1Term.  This Agreement shall become effective on the Effective Date and, unless earlier terminated pursuant to this Article 12, shall remain in effect, on a country-by-country basis, until the expiration of the Royalty Term in such country in the Territories (the “Term”).    
		

		
			12.2Incyte Termination for Convenience.    Subject to Section 13.1,  Incyte shall have the right to terminate this Agreement in its sole discretion by providing [**] prior written notice to Hengrui.
		

		
			12.3Termination for Breach or Bankruptcy.  Without prejudice to any other remedies available to it at law or in equity or under this Agreement,
		

		
			12.3.1 Hengrui may terminate this Agreement:
		

		
			(a)in the event that Incyte shall have materially breached or defaulted in the performance of any of its obligations, Incyte shall have [**] after written notice thereof was provided to Incyte by Hengrui to cure such breach or default.  Unless Incyte has cured such breach or default prior to the expiration of such [**] period, such termination shall become effective upon receipt of the written notice of termination to be given within [**] of the end of such [**] period; or 
		

		
			
		

		 

		

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			(b)as a result of the filing for or institution of bankruptcy, reorganization, liquidation or receivership proceeding, or upon an assignment of a substantial portion of the assets for the benefit of creditors of Incyte; provided that such termination shall be effective only if such proceeding is not dismissed within [**] after the filing thereof;  and 
		

		
			(c)if it is finally determined pursuant to Section 4.1.2(i) that Incyte has Abandoned Development, and if Incyte either fails to provide to Hengrui the written plan and payment provided for in Section 4.1.2(ii) or provides such plan and payment but fails to initiate and diligently pursue such plan within the [**] set forth in Section 4.1.2(ii), then Hengrui may elect to terminate this Agreement by providing Incyte written notice of such termination, such termination to be effective immediately.
		

		
			12.3.2Incyte may terminate this Agreement:
		

		
			(a)in the event that Hengrui shall have materially breached or defaulted in the performance of any of its obligations, Hengrui shall have [**] after written notice thereof was provided to Hengrui by Incyte to cure such breach or default.  Unless Hengrui has cured such breach or default prior to the expiration of such [**] period, such termination shall become effective upon receipt of the written notice of termination to be given within [**] of the end of such [**] period; or 
		

		
			(b)as a result of the filing for or institution of bankruptcy, reorganization, liquidation or receivership proceeding, or upon an assignment of a substantial portion of the assets for the benefit of creditors of Hengrui; provided that such termination shall be effective only if such proceeding is not dismissed within [**] after the filing thereof. 
		

		
			12.4Termination Disputes.    Notwithstanding anything to the contrary in this Agreement, if a Party gives notice of termination under Section 12.3.1 or 12.3.2, and the other Party disputes whether such notice was proper, then the issue of whether or not this Agreement was properly terminated shall be resolved in accordance with Section 14, and this Agreement shall remain in full force and effect until such dispute is resolved.  If as a result of such dispute resolution process it is determined that the notice of termination was proper, then such termination shall be deemed to be effective on the date on which such dispute is resolved.  On the other hand, if as a result of the dispute resolution process it is determined that the notice of termination was improper, then no termination shall have occurred and this Agreement shall remain in full force and effect.
		

		
			Article 13
Effects of Termination and Other Remedies for Material Breach or Default, Bankruptcy, or Termination for Convenience
		

		
			13.1Termination by Incyte for Convenience, and Termination by Hengrui for Incyte’s Breach or Bankruptcy.  Without limiting any other legal or equitable remedies that a Party may have, if this Agreement is terminated (i) by Incyte in accordance with Section 12.2, or (ii) by Hengrui in accordance with Section 12.3.1, then the following provisions shall apply: 
		

		
			13.1.1Termination of Licenses granted to Incyte.  For clarity, all rights and licenses granted to Incyte under this Agreement shall immediately terminate and be of no further force and effect and Incyte shall cease Developing and Commercializing the Licensed 
		

		 

		

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			Antibodies and the Licensed Products. Notwithstanding the foregoing, any sublicenses granted by Incyte will remain in full force and effect; provided that the sublicensee is not then in breach of its sublicense agreement and the sublicensee agrees to be bound to Hengrui under the terms and conditions of the sublicense agreement and that Hengrui shall not be bound to perform any duties or obligations set forth in any sublicenses that extend beyond the duties and obligations of Hengrui set forth in this Agreement. 
		

		
			13.1.2Transition of Clinical Studies.  In the event there are any ongoing clinical trials of any Licensed Product in the Incyte Territory, at Hengrui’s request, following the date a notice of termination has been issued, Incyte agrees to continue such trials in the normal course until the effective date of the termination, or, to the extent so requested by Hengrui, to promptly transition to Hengrui or its designee such clinical trials or portions thereof; in each case, at Incyte’s expense.
		

		
			13.1.3Grant of License to Hengrui.  Incyte would grant to Hengrui a non-exclusive, royalty-free, paid-up, perpetual, sublicensable, license under any Incyte Patents and any Know-How that Incyte is obligated to provide Hengrui under Section 13.1.4 below, in order to make, have made, use, sell, offer for sale and import Licensed Products anywhere in the world; and
		

		
			13.1.4Regulatory Filings.  Incyte shall promptly assign and transfer to Hengrui all MAAs and Regulatory Approvals for Licensed Products that are held or controlled by or under authority of Incyte or its Affiliates or Sublicensees, and shall take such actions and execute such other instruments, assignments and documents as may be necessary to effect the transfer of rights under the MAAs and Regulatory Approvals to Hengrui, including causing each of its Sublicensees to transfer any such Regulatory Filings to Hengrui.  If applicable Law prevents or delays the transfer of ownership of MAAs and Regulatory Approvals to Hengrui, Incyte shall grant, and does hereby grant, to Hengrui an exclusive and irrevocable right of access and reference to such MAAs and Regulatory Approvals for Licensed Products, and shall cooperate fully to make the benefits of such MAAs and Regulatory Approvals available to Hengrui and/or its designee(s).  Within [**] after notice of such termination, Incyte shall provide to Hengrui copies of all such MAAs and Regulatory Approvals, and of all Regulatory Materials and other Know-How pertaining to any Licensed Products, or the manufacture thereof.  Hengrui shall be free to use and disclose such MAAs and Regulatory Approvals and other items in connection with the exercise of its rights and licenses under this Section 13.1.
		

		
			13.1.5Trademarks.  Incyte hereby assigns and shall cause to be assigned to Hengrui all worldwide rights in and to any trademarks specific to one or more Licensed Products that Incyte used with Licensed Product(s).  It is understood that such assignment shall not include the Incyte name or trademark for the Incyte company itself, or any rights to any trademarks for Incyte products other than the Licensed Products.
		

		
			
		

		 

		

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			13.1.6If this Agreement is terminated by Hengrui pursuant to Section 12.3.1, then the transfer of all MAAs and Regulatory Approvals pursuant to Section 13.1.4 and Trademarks pursuant to Section 13.1.5 shall be without charge to Hengrui.  If this Agreement is terminated by Incyte pursuant to Section 12.2, the Parties agree to negotiate in good faith the transfer of such MAAs, Regulatory Approvals and Trademarks, including commercially reasonable and customary compensation to Incyte, within [**] after such termination is effective.
		

		
			13.1.7Wind-Down.  If this Agreement is terminated by Incyte in accordance with Section 12.2, notwithstanding the foregoing provisions of this Section 13.1, the licenses granted to Incyte under this Agreement shall survive for a period ending on the last calendar day of the [**] following the effective date of such termination and Incyte and its Affiliates shall be entitled to (a) finish or otherwise wind-down any ongoing Clinical Trials with respect to any Licensed Antibodies or Licensed Products hereunder or transfer such Clinical Trials (where Incyte is permitted to do so under applicable Laws) to Hengrui and (ii) finish any work-in-progress and sell any Licensed Products remaining in inventory, in accordance with the terms of this Agreement; provided that, for clarity, Incyte shall have no obligation to undertake such activities and; provided further, that such licenses shall be non-exclusive and Incyte shall remain obligated to pay Hengrui the Royalty Payments and other amounts payable hereunder (including milestones) applicable to said subsequent sales, with respect to sales in the Incyte Territory, as applicable, in accordance with the terms and conditions set forth in this Agreement and otherwise complies with the terms set forth in this Agreement.    
		

		
			13.2Termination by Incyte for Hengrui’s Breach or Bankruptcy.  Without limiting any other legal or equitable remedies that Incyte may have, if this Agreement is terminated by Incyte in accordance with Section 12.3.2, then the following provisions shall apply:  
		

		
			13.2.1Termination of Licenses granted to Hengrui.  For clarity, all rights and licenses granted to Hengrui under this Agreement shall immediately terminate and be of no further force and effect.
		

		
			13.2.2Continuance of Licenses granted to Incyte.  All rights and licenses granted to Incyte under this Agreement shall continue and shall become perpetual licenses; provided, however, that Incyte Royalty Payments payable by Incyte to Hengrui under Article 7 after the effective date of termination shall be reduced by [**] and Incyte shall only pay [**] of the milestone payments as regulated in Section 7.2.  
		

		
			13.3Expiration of this Agreement.  Upon expiration of this Agreement pursuant to Section 12.1 with respect to a given country in the Incyte Territory, Incyte will have an exclusive (even as to Hengrui), fully paid, perpetual, royalty-free right and license under the licenses in Section 2.1 to Develop, Commercialize and to Manufacture the Licensed Products in the Incyte Territory.  
		

		
			
		

		 

		

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			13.4Return of Confidential Information.  Upon the expiration or termination of this Agreement, the provisions of Section 11.3 shall apply. 
		

		
			13.5Accrued Rights.  Termination or expiration of this Agreement for any reason will be without prejudice to any rights that will have accrued to the benefit of a Party prior to the effective date of such termination.  Such termination will not relieve a Party from obligations that are expressly indicated to survive the termination or expiration of this Agreement.
		

		
			13.6Survival.  Notwithstanding anything to the contrary contained herein, the following provisions shall survive any expiration or termination of this Agreement: Sections 2.2.1, 7.6-7.10 (with respect to payment obligations accrued prior to such expiration or termination), 8.1.1,  8.1.2,  8.1.3,  8.1.6,  11.9 and 15.3 and Article 1 (solely to the extent necessary for the interpretation of the other surviving provisions) and Article 13. Except as set forth in this ‎Article 13 or otherwise expressly set forth herein, upon termination or expiration of this Agreement all other rights and obligations of the Parties shall cease.   
		

		
			13.7Rights in Bankruptcy.  All rights and licenses granted under or pursuant to this Agreement by Hengrui and Incyte are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of right to “intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code.  The Parties agree that each Party, as licensee of certain rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code.  The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against a Party (such Party, the “Bankrupt Party”) under the U.S. Bankruptcy Code, (a) the other Party shall be entitled to a complete duplicate of (or complete access to, as appropriate) any intellectual property licensed to such other Party and all embodiments of such intellectual property, which, if not already in such other Party’s possession, shall be promptly delivered to it (x) upon any such commencement of a bankruptcy proceeding upon such other Party’s written request therefore, unless the Bankrupt Party elects to continue to perform all  of its obligations under this Agreement or (y) if not delivered under clause (x), following the rejection of this Agreement by the Bankrupt Party upon written request therefore by the other Party and (b) the Bankrupt Party shall not unreasonably interfere with the other Party’s rights to intellectual property and all embodiments of intellectual property, and shall assist and not unreasonably interfere with the other Party in obtaining intellectual property and all embodiments of intellectual property from another entity.  The “embodiments” of intellectual property includes all tangible, intangible, electronic or other embodiments of rights and licenses hereunder, including all compounds and products embodying intellectual property, Products, filings with Regulatory Authorities and related rights and Hengrui Know-How in the case that Hengrui is the Bankrupt Party.    
		

		
			Article 14
Dispute Resolution
		

		
			14.1Disputes.  The Parties recognize that, from time to time during the Term, disputes may arise as to certain matters which relate to either Party’s rights and/or obligations hereunder.  It is the objective of the Parties to establish procedures to facilitate the resolution of disputes arising under this Agreement in an expedient manner by mutual cooperation and without resort to litigation.  To accomplish this objective, the Parties agree to follow the 
		

		 

		

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			procedures set forth in this Article 14 to resolve any controversy or claim arising out of, relating to or in connection with any provision of this Agreement.  
		

		
			14.2Arising Between the Parties.  With respect to all disputes arising between the Parties or their representatives and not arising from the JSC under Sections 3.4 and 3.5, including any alleged failure to perform, or breach, of this Agreement, or any issue relating to the interpretation or application of this Agreement, if the Parties are unable to resolve such dispute within [**] after such dispute is first identified by either Party in writing to the other, the Parties shall refer such dispute to the Chief Executive Officers of each of the Parties, for attempted resolution by good-faith negotiations within [**] after such notice is received.    
		

		
			14.3Dispute Resolutions.  If the Chief Executive Officers are not able to resolve such dispute referred to them under Section 14.2 within such [**] period, then either Party may refer the matter to expedited arbitration in accordance with Section 14.5 unless such dispute, controversy or claim relates to the scope, validity, enforceability or infringement of any patent rights covering the manufacture, use or sale of any Licensed Product or of any trademark rights relating to any Licensed Product in which case it shall be resolved in accordance with Section 14.4.    
		

		
			14.4Patent and Trademark Dispute Resolution.  Any dispute, controversy or claim relating to the scope, validity, enforceability or infringement of any patent rights covering the manufacture, use or sale of any Licensed Product or of any trademark rights relating to any Licensed Product shall be submitted to a court or patent authority of competent jurisdiction in the Territories in which such patent or trademark rights were granted or arose.
		

		
			14.5Arbitration.  Any dispute relating to the validity, performance, construction or interpretation of this Agreement, which cannot be resolved amicably between the Parties, shall be determined by arbitration in accordance with [**].  The decision of the arbitrators shall be final and binding upon the Parties and enforceable in any court of competent jurisdiction.  Place of arbitration is New York, New York, U.S.  The number of arbitrators is three (3).  The language of the arbitration proceeding is English.  Judgment upon any award made by the arbitrators may be entered in any court having jurisdiction thereof.    
		

		
			14.6Injunctive Relief.  Nothing herein may prevent either Party from seeking a preliminary injunction or temporary restraining order, in any court of competent jurisdiction, so as to prevent any Confidential Information from being disclosed in violation of this Agreement.  
		

		
			Article 15
Miscellaneous
		

		
			15.1Entire Agreement; Amendment.  This Agreement, including the Schedules and Exhibits hereto, sets forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties hereto with respect to the subject matter hereof and supersedes, as of the Effective Date, all prior agreements and understandings between the Parties with respect to the subject matter hereof, including the Confidential Disclosure Agreement between the Parties dated May 6, 2015 (which shall remain effective prior to the Effective Date). There are no covenants, promises, agreements, warranties, representations, conditions or 
		

		 

		

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			understandings, either oral or written, between the Parties other than as are set forth herein and therein.  No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized representative of each Party.
		

		
			15.2Force Majeure.  A Party shall be excused from the performance of its obligations under this Agreement to the extent that such performance is prevented by force majeure and the nonperforming Party promptly provides notice of the prevention to the other Party.  Such excuse shall be continued so long as the condition constituting force majeure continues and the nonperforming Party makes reasonable efforts to remove the condition.  For purposes of this Agreement, force majeure shall include conditions beyond the reasonable control of the Parties, including an act of God, war, civil commotion, terrorist act, epidemic, failure or default of public utilities or common carriers, destruction of production facilities or materials by fire, earthquake, and storm or like catastrophe.  Notwithstanding the foregoing, a Party shall not be excused from making payments owed hereunder because of force majeure affecting such Party. When such circumstances arise, the Parties shall discuss what, if any, modification of the terms of this Agreement may be required in order to arrive at an equitable solution.    
		

		
			15.3Notices.  Any notice required or permitted to be given under this Agreement shall be in writing, shall specifically refer to this Agreement, and shall be addressed to the appropriate Party at the address specified below or such other address as may be specified by such Party in writing in accordance with this Section 15.3, and shall be deemed to have been given for all purposes (i) when delivered, if hand-delivered or sent by facsimile on a Business Day, (ii) on the next Business Day if sent by a reputable international overnight courier service, or (iii) three (3) Business Days after mailing, if mailed by first-class certified or registered airmail, postage prepaid, return receipt requested.  Unless otherwise specified in writing, the mailing addresses of the Parties shall be as described below: 
		

			
					
						If to Hengrui:

					
					
						Jiangsu Hengrui Medicine Co., Ltd.

				
	
					
						 

					
					
						No.7 Kunlunshan Road

				
	
					
						 

					
					
						Lianyungang Eco & Tech Development Zone

				
	
					
						 

					
					
						Jiangsu Province, China 222047

				
	
					
						 

					
					
						Attention: President

				
	
					
						 

					
					
						Fax: [**]

				

		
			 
		

			
					
						With a copy to:

					
					
						Wilson, Sonsini, Goodrich and Rosati, P.C.

				
	
					
						 

					
					
						650 Page Mill Road

				
	
					
						 

					
					
						Palo Alto, CA 94304-1050

				
	
					
						 

					
					
						Attention: Karen Wong

				
	
					
						 

					
					
						Fax: [**]

				

		
			 
		

			
					
						If to Incyte:

					
					
						Incyte Europe SARL

				
	
					
						 

					
					
						1 rue Pre-de-la-Bichette

				
	
					
						 

					
					
						Geneva, Switzerland 1202

				
	
					
						 

					
					
						Attention: Hervé Hoppenot

				
	
					
						 

					
					
						Fax: [**]

				

		
			
		

		
			

		 

		

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						With a copy to:

					
					
						Incyte Corporation

				
	
					
						 

					
					
						1801 Augustine Cut-off

				
	
					
						 

					
					
						Wilmington, DE 19803

				
	
					
						 

					
					
						Attention: General Counsel

				
	
					
						 

					
					
						Fax: [**]

				

		
			 
		

			
					
						And a copy to:

					
					
						Morgan, Lewis & Bockius LLP

				
	
					
						 

					
					
						502 Carnegie Center

				
	
					
						 

					
					
						Princeton, New Jersey 08540

				
	
					
						 

					
					
						Attention:  Randall B. Sunberg

				
	
					
						 

					
					
						Fax: [**]

				

		
			 
		

		
			15.4No Strict Construction; Interpretation.  This Agreement has been prepared jointly and shall not be strictly construed against either Party.  Ambiguities, if any, in this Agreement shall not be construed against any Party, irrespective of which Party may be deemed to have authored the ambiguous provision.  The headings of each Article and Section in this Agreement have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular Article or Section.
		

		
			15.5Assignment.    Neither Party may assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the other Party, except that either Party may make such an assignment without the other Party’s consent to (i) Affiliates (provided, however that (a) the assigning Party provides prior written information of any planned assignment to an Affiliate, (b) assigning Party will remain jointly and severally liable with, and will guarantee in written form vis-à-vis the other Party the performance of, the relevant Affiliate under this Agreement, and (c) the relevant Affiliate assignee will assume in writing vis-à-vis the other Party all of the assigning Party’s obligations under this Agreement) and (ii) a successor to substantially all of the business of the assigning Party to which this Agreement relates, whether in a merger, sale of stock, sale of assets or other transaction; provided, that if such assignment by Incyte would result in non-creditable withholding or other similar taxes becoming due on payments to Hengrui under this Agreement, then any such assignment will require Hengrui’s prior written consent absent an express agreement by Incyte or the assignee to pay or reimburse Hengrui for any such non-creditable taxes resulting from such assignment, such consent not to be unreasonably withheld or delayed. Any permitted assignment shall be binding on the successors of the assigning Party.  Any assignment or attempted assignment by either Party in violation of the terms of this Section 15.4 shall be null, void and of no legal effect.
		

		
			15.6Further Actions.  Each Party agrees to execute, acknowledge and deliver such further instruments, and to perform all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.
		

		
			15.7Severability.  If any one or more of the provisions of this Agreement are held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, such provision or provisions shall be considered severed from this 
		

		 

		

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			Agreement and shall not serve to invalidate any remaining provisions hereof.  The Parties shall make a good-faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.
		

		
			15.8No Waiver.  Any delay in enforcing a Party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such Party’s rights to the future enforcement of its rights under this Agreement, except with respect to an express written and signed waiver relating to a particular matter for a particular period of time.
		

		
			15.9Cumulative Remedies.  No remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.
		

		
			15.10Independent Contractors.  Each Party shall act solely as an independent contractor, and nothing in this Agreement shall be construed to give either Party the power or authority to act for, bind, or commit the other Party in any way.  Nothing herein shall be construed to create the relationship of partners, principal and agent, or joint-venture partners between the Parties.  Furthermore, none of the transactions contemplated by this Agreement shall be construed as a partnership for any tax purpose.
		

		
			15.11No Third Party Rights.  The provisions of this Agreement are for the exclusive benefit of the Parties, and no other person or entity shall have any right or claim against any Party by reason of these provisions or be entitled to enforce any of these provisions against any Party.
		

		
			15.12Expenses.  Except as otherwise specifically provided in this Agreement, each Party (and its Affiliates) shall bear its own costs and expenses in connection with entering into this Agreement and the consummation of the transactions and performance of its obligations contemplated hereby.
		

		
			15.13English Language; Governing Law.  This Agreement was prepared in the English language, which language shall govern the interpretation of, and any dispute regarding, the terms of this Agreement.  This Agreement and all disputes arising out of or related to this Agreement or any breach hereof shall be governed by and construed under the substantive laws of the State of New York, without giving effect to any choice of law principles that would require the application of the laws of a different state.  Both Parties consent to the jurisdiction of the state and federal courts in New York, New York, U.S. 
		

		
			15.14Counterparts.  This Agreement may be executed in two (2) counterparts, including by facsimile or PDF, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
		

		
			 
		

		
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			In Witness Whereof, the Parties have executed this Agreement by their duly authorized representatives as of the Effective Date.
		

			
					
						JIANGSU HENGRUI MEDICINE CO., LTD.

					
					
						INCYTE EUROPE SARL

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						By:

					
					
						/s/ Piaoyang Sun

					
					
						By:

					
					
						/s/ Hervé Hoppenot

				
	
					
						Name:

					
					
						Piaoyang Sun

					
					
						Name:

					
					
						Hervé Hoppenot

				
	
					
						Title:

					
					
						Chairman

					
					
						Title:

					
					
						President

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						INCYTE EUROPE SARL

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						By:

					
					
						/s/ Sébastien Roy

				
	
					
						 

					
					
						 

					
					
						Name:

					
					
						Sébastien Roy

				
	
					
						 

					
					
						 

					
					
						Title:

					
					
						Authorized Signatory

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						Signed in Geneva, Switzerland on 1 September 2015

				

		
			 
		

		
			 
		

		
			

		 

		

			(Signature Page to the License and Collaboration Agreement)

		

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

			CONFIDENTIAL TREATMENT MATERIAL

		

		

			 

		

EXHIBIT A
		

		
			[**]
		

		
			 
		

		
			[**]
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			A-2

		

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

			CONFIDENTIAL TREATMENT MATERIAL

		

		

			 

		

 
		

		
			EXHIBIT B
		

		
			Press Release 
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			B-1

		

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

			CONFIDENTIAL TREATMENT MATERIAL

		

		

			 

		

 
		

			
					
						

					
					
						 

				

		
			 
		

		
			FOR IMMEDIATE RELEASE
		

		
			 
		

		
			Incyte Announces Global License Agreement with Jiangsu Hengrui Medicine for 
SHR-1210, an Investigational Anti-PD-1 Monoclonal Antibody
		

		
			Incyte to pay Hengrui $25 million upfront plus the potential for milestone and royalty payments
		

		
			WILMINGTON, DE – September 2, 2015 – Incyte Corporation (Nasdaq: INCY) today announced a global license and collaboration agreement with Jiangsu Hengrui Medicine Co., Ltd. for the development and commercialization of SHR-1210, an investigational anti-PD-1 monoclonal antibody. Under the agreement, Incyte will have the exclusive development and commercialization rights to SHR-1210 worldwide, with the exception of Mainland China, Hong Kong, Macau, and Taiwan. SHR-1210 is expected to enter proof-of-concept studies for the treatment of patients with advanced solid tumors in the coming months.
		

		
			“The addition of this anti-PD-1 candidate to our early stage portfolio reinforces our commitment to cancer patients and further diversifies our clinical development programs,” stated Hervé Hoppenot, President and Chief Executive Officer of Incyte. “We continue to make excellent progress in the multiple clinical trials underway across our existing portfolio, including our strategic collaborations.” 
		

		
			Piaoyang Sun, Chairman of the Board of Hengrui, added, “Both Incyte and Hengrui are dedicated to cancer immunotherapy and are investigating several relevant biological targets in the area. The addition of SHR-1210 is an excellent fit to Incyte’s oncology portfolio, and we are pleased to see Incyte’s commitment to this PD-1 program. Combining the expertise and resources of both companies can accelerate the development of SHR-1210.”
		

		
			Terms of the Agreement
		

		
			Under the terms of the agreement, Incyte will acquire development and commercialization rights to SHR-1210 worldwide, with the exception of Mainland China, Hong Kong, Macau, and Taiwan, in exchange for an upfront payment of $25 million. The terms also include potential milestone payments of up to $770 million to Hengrui, consisting of $90 million for regulatory approval milestones, $530 million for commercial performance milestones, and $150 million based on clinical superiority.  The terms also include tiered royalties to Hengrui on net sales of SHR-1210 in Incyte territories. Under the Agreement, Incyte and Hengrui will assume all financial obligations associated with the development and commercialization of SHR-1210 in their respective territories.
		

		
			About Anti-PD-1 Monoclonal Antibodies
		

		
			Monoclonal antibodies targeting PD-1 enhance anti-tumoral immunity and are being developed for the treatment of cancer. Many tumor cells express PD-L1, an immunosuppressive PD-1 ligand. Inhibition of the interaction between PD-1 and PD-L1, known as immune checkpoint blockade, can enhance T-cell responses and mediate preclinical antitumor activity.
		

		
			
		

		
			

		 

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

			CONFIDENTIAL TREATMENT MATERIAL

		

		

			 

		

For this transaction, Incyte was advised by Morgan Lewis, and Hengrui was advised by Wilson Sonsini Goodrich & Rosati. 
		

		
			About Incyte 
		

		
			Incyte Corporation is a Wilmington, Delaware-based biopharmaceutical company focused on the discovery, development and commercialization of proprietary therapeutics, primarily for oncology.  For additional information, please visit www.incyte.com.
		

		
			About Jiangsu Hengrui Medicine Co., Ltd.
		

		
			Jiangsu Hengrui Medicine Co., Ltd., established in 1970, is a fully integrated pharmaceutical company in China, with annual net sales of over U.S. $1.2 billion. Hengrui's products and innovative R&D span multiple therapeutic areas, including oncology and hematology, anesthesiology and pain management, cardiovascular and metabolic diseases, contrast media, and inflammation. Visit http://www.hrs.com.cn for further information.
		

		
			Forward-Looking Statements (Incyte)
		

		
			Except for the historical information set forth herein, the matters set forth in this press release, including without limitation statements with respect to the timing of proof of concept studies for SHR-1210, contain predictions and estimates and are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on Incyte’s current expectations and subject to risks and uncertainties that may cause actual results to differ materially, including the high degree of risk associated with drug development, results of further research and development, unanticipated delays, other market or economic factors and technological advances, regulatory approval of the transaction and other risks detailed from time to time in Incyte's filings with the Securities and Exchange Commission, including its Quarterly Report on Form 10-Q for the quarter ended June 30, 2015. Incyte disclaims any intent or obligation to update these forward-looking statements.
		

		
			
		

		
			

		 

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

			CONFIDENTIAL TREATMENT MATERIAL

		

		

			 

		

 
		

			
					
						Contacts

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						Investors

					
					
						 

					
					
						Media

					
					
						 

				
	
					
						Michael Booth, DPhil

					
					
						+1 302 498 5914

					
					
						Catalina Loveman

					
					
						+1 302 498 6171

				
	
					
						 

					
					
						mbooth@incyte.com

					
					
						 

					
					
						cloveman@incyte.com

				

		
			 
		

		
			 
		

		
			 
		

		
			1 Weber J (Oct 2010). "Immune checkpoint proteins: a new therapeutic paradigm for cancer--preclinical background: CTLA-4 and PD-1 blockade". Seminars in Oncology 37(5): 430–9. doi:10.1053/j.seminoncol.2010.09.005. PMID 21074057.
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

		

 

		

			CONFIDENTIAL TREATMENT MATERIAL

		

		

			 

		

EXHIBIT C
		

		
			Australian Study Protocol Summary 
		

		
			 
		

		
			 
		

		 

		

			C-1

		

		

			[**] = Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.Exhibit 10.1

 

ASSIGNMENT AND TRANSFER AGREEMENT

 

November 2, 2015

 

THIS ASSIGNMENT
AND TRANSFER AGREEMENT (this “Assignment”) is made as of the date first written above by and between JAB
Cosmetics B.V., a private limited company incorporated under the laws of the Netherlands (“Assignor”), and Coty
Inc., a Delaware corporation (“Assignee” or, together with Assignor, the “Parties”).

 

WHEREAS, Assignor
is party to that certain Shares and Trademarks Sale and Purchase Agreement, effective as of November 2, 2015 (the “Agreement”),
by and among Assignor, Hypermarcas S.A., a publicly-held corporation organized under the laws of the Federative Republic of Brazil
(“Hypermarcas”), Cosmed Indústria de Cosméticos e Medicamentos S.A., a closely-held corporation
organized under the laws of the Federative Republic of Brazil (“Cosmed” or, together with Hypermarcas, the “Sellers”),
and as intervening and consenting parties, Novita Distribuição, Armazenamento e Transportes S.A., a closely-held
corporation organized under the laws of the Federative Republic of Brazil, and Savoy Indústria de Cosméticos S.A.,
a closely-held corporation organized under the laws of the Federative Republic of Brazil, a true, correct and complete copy of
which is attached hereto as Exhibit A;

 

WHEREAS, each
of the Board of Directors of Assignee and the Audit and Finance Committee of the Board of Directors of Assignee has reviewed and
evaluated the acquisition of the beauty business of Hypermarcas on the terms and subject to the conditions contemplated by the
Agreement (the “Transaction”) and, having determined that the Transaction serves the best interests of the Assignee
and its stockholders, unanimously adopted, approved, ratified and confirmed such assignment in all respects the Assignee entering
into the Transaction;

 

WHEREAS, in accordance
with clause (ii) of Section 24.2 of the Agreement, the Assignor has delivered to Sellers a written notice, confirming the assignment
and transfer of Assignor’s rights and obligations under the Agreement; and

 

WHEREAS, each
of Assignor and Assignee desire that the Agreement, and all of the Assignor’s rights and obligations thereunder, be assigned
to Assignee pursuant to this Assignment in order that Assignee may effectuate the Transaction.

 

NOW, THEREFORE,
for good and valuable consideration, the receipt, adequacy and legal sufficiency of which are hereby acknowledged, the Parties
agree as follows:

 

1. Definitions.
All capitalized terms appearing herein that are not otherwise defined herein shall have the meanings given to such terms in
the Agreement.

 

2. Assignment.
Pursuant to Section 24.2 of the Agreement, Assignor hereby sells, grants, conveys, assigns and transfers to Assignee its entire
right, title and interest in and to the Agreement and all of Assignor’s rights and obligations thereunder.

[initials] [initials]

    	1

    	

    

3. Assumption.
Assignee hereby accepts Assignor’s right, title and interest in and to the Agreement and all of Assignor’s rights and
obligations thereunder, and assumes and agrees with Assignors to unconditionally adhere to, perform and comply with and to be bound
as of the date hereof by all of the terms, covenants, agreements, provisions and conditions of the Agreement and any other documents
related thereto (the “Assumed Obligations”), in the same manner and with the same force and effect as
if Assignee had originally executed the Agreement. Assignee shall indemnify, defend and hold harmless Assignor and its stockholders,
directors, managing directors, officers, employees, subsidiaries and any other affiliates from and against any liabilities, damages,
penalties, judgments, assessments, losses, costs and expenses in any case, whether arising under strict liability or otherwise,
in each case arising from, in connection with, in respect of, or related in any manner whatsoever to, the failure by Assignee to
fulfill any of the Assumed Obligations.

 

4. Successors
and Assigns. This Assignment is binding between the Parties and shall inure to the benefit of the Parties and their respective
successors and authorized assignees.

 

5. Governing Law.
This Assignment shall be governed by and construed in accordance with the laws of the state of New York without regard to its choice-of-law
principles (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law).

 

6. Further Assurances.
Subject to the terms and conditions of the Agreement, each of the Parties agrees to obtain, execute, acknowledge and deliver promptly
upon request of the other Party such further agreements or instruments and to do, or cause to be done, such further acts and things
as may be necessary or appropriate to complete the transactions contemplated hereby.

 

7. Assignments.
Except as provided in Section 24.2 of the Agreement, neither this Assignment, nor the rights or obligations hereunder may be assigned
by either of the Parties without the previous consent, in writing, of the other Party.

 

8. Severability.
If any provision of this Assignment shall be held void, voidable, invalid or inoperative, no other provision of this Assignment
shall be affected as a consequence thereof, and, accordingly, the remaining provisions of this Assignment shall remain in full
force and effect, as if such void, voidable, invalid or inoperative provision had not been included herein. If any provision of
this Assignment, or the enforcement of any provision hereof, with respect to any person or entity or circumstance, is void or unenforceable,
then an appropriate and equitable provision shall replace it, with a view towards having this Assignment implemented to the maximum
extent possible for it to be valid and enforceable, in accordance with the intent and objective of such void or unenforceable provision.

 

9. Entire Agreement.
This Assignment and the Agreement, including any related annexes, schedules and exhibits, as well as any other agreements and documents
referred to herein and therein, will together constitute the entire agreement between the Parties with respect to the subject matter
hereof and thereof and will supersede all prior negotiations, 

[initials] [initials]

    	2

    	

    

agreements and understandings of the Parties of any nature, whether
oral or written, with respect to such subject matter.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]

[initials] [initials]

    	3

    	

    

IN WITNESS WHEREOF,
Assignor and Assignee have executed and delivered this Assignment as of the date first written above.

 

	 	JAB COSMETICS B.V.
	 	 	 
	 	By:	/s/ Joachim Creus
	 	 	Name: Joachim Creus
	 	 	Title:   Managing Director

 

	 	By:	/s/ Andrea Oechsler-Steinhauser
	 	 	Name: Andrea Oechsler-Steinhauser
	 	 	Title:   Managing Director
	 	 	 
	 	COTY INC.

 

	 	By:	/s/ Jules P. Kaufman
	 	 	Name: Jules P. Kaufman
	 	 	Title:   Senior Vice President, General Counsel & Secretary

[initials] [initials]

    	 

    	

    

Exhibit A

 

	Shares
        and Trademarks Sale and Purchase Agreement

         

        By
        and Between

         

        Hypermarcas
        S.A.,

         

        Cosmed
        Indústria de Cosméticos e Medicamentos S.A.,

         

        and

         

        JAB
        Cosmetics BV

         

        With
        respect to the sale of The “BPC Business”

         

        As
        Intervening Parties

         

        Novita
        Distribuição, Armazenamento e Transporte S.A.

         

        and

         

        Savoy
        Indústria de Cosméticos S.A.

         

        São
        Paulo, November 2nd, 2015

[initials] [initials] [initials] [initials] [initials]

    	5

    	

    

Shares
and Trademarks Sale and Purchase Agreement

 

By this private instrument:

 

	I.	On one side:

 

(a) Hypermarcas
S.A., a publicly-held corporation, organized and existing under the Laws of the Federate Republic of Brazil, with
headquarters in the City of São Paulo, State of São Paulo, at Rua Nova Cidade, 404, Vila Olímpia, Zip
Code 04547-070, enrolled with the CNPJ/MF under No. 02.932.074/0001-91, herein represented in accordance with its bylaws, by
its officers, Mr. Claudio Bergamo dos Santos, Brazilian citizen, married, business administrator, bearer of the
Identity Card RG No. 8.765.296-1-SSP/SP and enrolled with the CPF/MF under No. 221.793.328-07, and Mr. Martim Prado
Mattos, Brazilian citizen, married, business administrator, bearer of the Identity Card RG No. 27.978.664-5-SSP/SP and
enrolled with the CPF/MF under No. 101.110.688-43, both resident and domiciled in the City of São Paulo, State of
São Paulo, duly authorized to execute this Agreement, as it was declared by them, hereinafter referred to as
“Hypermarcas”; and

 

(b) Cosmed
Indústria de Cosméticos e Medicamentos S.A., a closely-held corporation, organized and existing
under the Laws of the Federate Republic of Brazil, with headquarters in the City of Barueri, State of São Paulo, at
Avenida Ceci, 282, módulo 1, Centro Empresarial Tamboré, Tamboré, ZIP Code 06460-120, enrolled with the
CNPJ/MF under No. 61.082.426/0002-07, herein represented in accordance with its bylaws, by its officers, Mr. Martim Prado
Mattos, Brazilian citizen, married, business administrator, bearer of the Identity Card RG No. 27.978.664-5-SSP/SP and
enrolled with the CPF/MF under No. 101.110.688-43, and Mr. Carlos Roberto Scorsi, Brazilian citizen, married, business
administrator, bearer of the Identity Card RG No. 13.389.345-SSP/SP and enrolled with the CPF/MF under No. 030.408.158-22,
both resident and domiciled in the City of São Paulo, State of São Paulo, duly authorized to execute this
Agreement, as it was declared by them, hereinafter referred to as “Cosmed”, and together with Hypermarcas,
the “Sellers”.

 

	II.	On the other
side:

 

(c) JAB
Cosmetics BV,, organized and existing under the Laws of the Netherlands, with headquarters in the City of
Haarlem, at Oudeweg, 147, ZIP Code 2031, CC, herein represented in accordance with its incorporation documents, by its legal
representatives, Mr. Markus Hopmann, and Mr. Joachim Creus, duly authorized to execute this Agreement, as it was declared by
them, hereinafter referred to as the “Buyer”.

 

Sellers and Buyer
hereinafter jointly referred to as the “Parties”, and each of them, individually and indistinctly referred
to as a “Party”.

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    	6

    	

    

	III.	And as Intervening
And Consenting Parties:

 

(d) Novita
Distribuição, Armazenamento e Transportes S.A., a closely-held corporation, organized and existing
under the Laws of the Federate Republic of Brazil, with headquarters in the City of Goiânia, State of Goiás, at
Rua Iza Costa, 1.104, Quarter Area, Part Area, Mezzanine, suite A, Setor Fazenda Retiro, 74666-003, enrolled with the CNPJ/MF
under No. 22.137.853/0001-02, herein represented according to its bylaws, by its officers, Mr. Martim Prado Mattos,
Brazilian citizen, married, business administrator, bearer of the Identity Card RG No. 27.978.664-5-SSP/SP and enrolled with
the CPF/MF under No. 101.110.688-43 and Mrs. Juliana Aguinaga Damião Salem, Brazilian citizen, married, lawyer,
enrolled with the Brazilian Bar Association, Section of São Paulo (“OAB/SP”) under No. 285.697, and
with the CPF/MF under No. 104.685.497-65, both resident and domiciled in the City of São Paulo, State of São
Paulo, duly authorized to execute this Agreement, as it was declared by them, hereinafter referred to as
“Novita”; and

 

(e) Savoy
Indústria de Cosméticos S.A., a closely-held corporation, duly organized and existing under the
Laws of the Federate Republic of Brazil, with headquarters in the City of Goiânia, State of Goiás, at Avenida C,
171, Quarter 403, part 14, 822, suite 2, Setor Jardim América, 74275-010, enrolled with the CNPJ/MF under No.
15.392.876/0001-06, herein represented according to its bylaws, by its officers, Mr. Martim Prado Mattos, Brazilian
citizen, married, business administrator, bearer of the Identity Card RG No. 27.978.664-5-SSP/SP and enrolled with the CPF/MF
under No. 101.110.688-43, and Mr. Carlos Roberto Scorsi, Brazilian citizen, married, business administrator, bearer of
the Identity Card RG No. 13.389.345-SSP/SP and enrolled with the CPF/MF under No. 030.408.158-22, both resident and domiciled
in the City of São Paulo, State of São Paulo, duly authorized to execute this Agreement, as it was declared by
them, hereinafter referred to as “Savoy”;

 

Novita and Savoy jointly
referred to herein as the “Companies”, and each of them individually referred to as the “Company.

 

Whereas:

 

I. Sellers own, directly and/or
indirectly, tangible and intangible assets used in connection with the business of development, manufacturing, marketing and distributing
the beauty and personal care products listed in Exhibit I, which is currently conducted by the Sellers (the “BPC
Business”), and includes rights of intellectual property, selected working capital, employees, real estate and other
assets used exclusively for the BPC Business, as defined herein;

 

II. as of the date of this
Agreement, Hypermarcas is the holder of ninety-nine (99) common shares, representing 99% of the issued and outstanding shares
of Novita, and Savoy is the holder of one (1) common share, representing 1% of the issued and outstanding shares of Novita
which, on the Business Closing Date, will be held by Cosmed (the “Novita Shares”);

 

III. as of the
date of this Agreement, Hypermarcas is the holder of eighteen billion, four hundred and sixty-eight million, three hundred
and ninety-two thousand, fifty-

[initials] [initials] [initials] [initials] [initials]

    	7

    	

    

nine (18.468.392.059) common shares, representing 100% of the issued and outstanding shares of
Savoy, and on the Business Closing Date Novita will be the holder of common shares representing 100% less one of the issued
and outstanding shares of Savoy, and Cosmed will be the holder of one share representing the issued and outstanding shares of
Savoy (jointly, the “Savoy Shares”);

 

IV. subject to
the terms and conditions set forth herein, Sellers desire to sell and transfer to Buyer, and Buyer desires to acquire from
Sellers the BPC Business, through the acquisition of the Trademarks, as defined herein below, and the Novita Shares.

 

Now, therefore, in
consideration of the representations, warranties, and covenants herein contained, the Parties, agree to enter into this Shares
and Trademarks Sale and Purchase Agreement (“Agreement”), which shall be governed by the following clauses
and conditions:

 

Chapter
I.Definitions and Interpretation

 

Section
1.Definitions

 

1.1. Definitions.The
following words, expressions, abbreviations with capital letters, not defined in others sections of this Agreement, shall have
the meaning ascribed to them in this Section 1.1, except if otherwise herein expressly indicated or if the context is not
compatible with any significance herein indicated:

 

	Accounting
    Expert	 	has the meaning set forth in Section
        4.3.3 of this Agreement.

         

	Affiliate	 	with respect to any Person, any
        other Person that, directly or indirectly, Controls, is Controlled by, or is under common Control with the former.

         

	Agreement	 	means this Shares and Trademarks
        Sale and Purchase Agreement together with all of its Exhibits, as they may be amended from time to time in writing by
        the Parties.

         

	Applicable
    Law	 	means any constitution, statute,
        law, regulation, rule, ruling, order, injunction, judgment or decree of or by any competent Governmental Authority or
        arbitration chamber.

         

	Arbitral
    Tribunal	 	has the meaning set forth in Section
        29.5 of this Agreement.

         

	Arbitration
    Rules	 	has the meaning set forth in Section
        29.2 of this Agreement.

[initials] [initials] [initials] [initials] [initials]

    	8

    	

    

	Auditing
    Report	 	has the meaning set forth in Section
        4.3 of this Agreement.

         

	Base
    Working Capital	 	has the meaning set forth in Section
        4.2 of this Agreement.

         

	BPC Assets	 	has the meaning set forth in Section
        12.1.8(i) of this Agreement.

         

	BPC Business	 	has the meaning set forth in Recital
        I of this Agreement.

         

	BPC Business Special Business
        Closing Balance Sheet

         
	 	has the
    meaning set forth in Section 4.3 of this Agreement.
	Business
    Closing 	 	has the meaning set forth in Section
        10.1 of this Agreement.

         

	Business
    Closing Date	 	has the meaning set forth in Section
        10.1 of this Agreement.

         

	Business
    Day	 	means any day, in the City of
        São Paulo, State of São Paulo, in the City of Goiânia, State of Goiás, and in the City of Senador
        Canedo, State of Goiás, that is not a Saturday, Sunday, or holiday, or other day on which banks may or are required
        to, under the current legislation, close without performing bank activities and transactions.

         

	Business
    Employees	 	has the meaning set forth in Section
        8.2.6 of this Agreement.

         

	Buyer	 	has the meaning set forth in the
        Preamble of this Agreement.

         

	CADE	 	means the Administrative Council
        for Economic Defense (Conselho Administrativo de Defesa Econômica).

         

	CAM-CCBC	 	has the meaning set forth in Section
        29.2 of this Agreement.

         

	CDI	 	means
the average annual rate (considering a year of two hundred and fifty two (252) days) in respect of

[initials] [initials] [initials] [initials] [initials]

    	9

    	

    

	 	 	transactions with Interbank Deposit Certificates
        (CDI, in the local acronym), maturing in one business day (over), appraised and disclosed by CETIP S.A. –
        Mercados Organizados, the daily factor of which is rounded off at the eighth decimal place, net of all taxes or, if
        extinguished, an equivalent rate which replaces it.
	 	 	 
	Closing
    Novita Shares Purchase Price	 	has the meaning set forth in Section
        4.1 of this Agreement.

         

	CNPJ/MF	 	means the Brazilian Taxpayers
        Registry.

         

	Co-Arbitrators	 	has the meaning set forth in Section
        29.5 of this Agreement.

         

	Company
    or Companies	 	has the meaning set forth in the
        Preamble of this Agreement.

         

	Conditions Precedent to Business
        Closing for Buyer

         
	 	has the meaning set forth in Section
        8.2 of this Agreement.

         

	Conditions Precedent to Business
        Closing for Sellers

         
	 	has the
    meaning set forth in Section 8.3 of this Agreement.
	Conditions Precedent to Trademarks
        Closing for Buyer

         
	 	has the meaning set forth in Section
        5.2 of this Agreement.

         

	Conditions Precedent to Trademarks
        Closing for Sellers

         
	 	has the meaning set forth in Section
        5.3 of this Agreement.

         

	Control	 	shall have the meaning ascribed
        to it under Law No. 6,404, of 15.12.1976, as amended from time to time.

         

	Corporate
    Reorganization	 	has the meaning set forth in Section
        8.2.1 of this Agreement.

         

	Cosmed	 	has the meaning set forth in the
        Preamble of this Agreement.

         

	De
    Minimis	 	has the meaning set forth in Section
        16.3.2(i) of this Agreement.

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    	10

    	

    

	Direct
    Claim	 	has the meaning set forth in Section
        17.1 of this Agreement.

         

	Disagreement
    Notice	 	has the meaning set forth in Section
        4.3.1 of this Agreement.

         

	Dispute	 	has the meaning set forth in Section
        29.1 of this Agreement.

         

	Excluded
    Assets	 	shall mean those assets of Sellers
        and their Affiliates which are currently owned by Savoy and not exclusively or predominantly used in the BPC Business,
        as identified in Exhibit A.

         

	Exercise Period

         
	 	has the meaning set forth in Section
        10.5(i) of this Agreement.

         

	FGTS	 	means the unemployment fund (Fundo
        de Garantia por Tempo de Serviço).

         

	Final
    PPAA Amount	 	has the meaning set forth in Section
        4.3 of this Agreement.

         

	Financial
    Statements	 	has the meaning set forth in Section
        12.1.6 of this Agreement.

         

	Fundamental
    Representations	 	means the representations and
        warranties made by Sellers pursuant to Sections 12.1.1; 12.1.2; 12.1.3; 12.1.4(i)(a); 12.1.4(ii); 12.1.4(iii); and 12.1.5.

         

	Goiás
    Industrial	 	means Companhia de Distritos Industriais
        de Goiás – GOIASINDUSTRIAL.

         

	Governmental
    Authority	 	means any national, state or municipal
        governmental, administrative or political body, entity or person or any subdivision thereof, or any judicial court or
        arbitral tribunals, office of the judicial, executive, legislative or administrative branches, or any governmental or
        regulatory agency, instrumentality, commission, department, board, bureau, or any authorized civil, military or law enforcement
        officer of any of the foregoing, with jurisdiction or authority over the matters or Persons in question, including, without
        limitation, the Companies.

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	Hazardous
    Substances	 	means any pollutant, contaminant,
        waste or chemical or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substance, waste or
        material as regulated under the Applicable Law.

         

	Hypermarcas	 	has the meaning set forth in the
        Preamble of this Agreement.

         

	ICMS
    Incentive	 	means the tax incentive granted
        by the State of Goiás to Hypermarcas according to Law No. 17,442/11, as well as set forth in the special agreement
        TARE No. 001-019/2012 – GSF. The ICMS Incentive comprises, among other benefits: (i) a granted credit correspondent
        to the application of the percentage of (a) ten percent (10%) on the tax base value on interstate transactions involving
        a manufacturing product of its economic group located within the State of Goiás, provided that the tax burden is
        not lower than two percent (2%), and (b) eight percent (8%) on the internal transactions involving a manufacturing product
        of its economic group located within the State of Goiás, provided that the tax burden is not lower than two percent
        (2%); and (ii) a reduction of the tax base on internal transactions in a form that results on the application of the equivalent
        to the percentage of ten per cent (10%) on the transaction value. The enjoy of this ICMS Incentive depends on the compliance
        of some specific requirements provided in the Law No. 17,442/11, as well as in the special agreement TARE No. 001-019/2012
        - GSF, such as, but not limited to (i) performing investments of R$ 364 million to R$536 million in the State of Goiás;
        (ii) reaching until the conclusion of the project 2,700 to 3,400 direct employees, hiring, preferentially, local
        workforce; and (iii) minimum annual collection of the ICMS.

         

	IFRS	 	means the International Finance
        Reporting Standards as in effect from time to time and issued by the International Accounting Standards Board.

         

	Indebtedness	 	means, with respect to any Person,
        the amount of any obligation that is required to be reflected as indebtedness on a consolidated balance sheet of such
        Person prepared in accordance with IFRS, including, without duplication: (a) the amount of short-term loans and financing;
        plus (b) the amount of long-

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	 	 	term loans and financing; plus (c) the amount of other obligations subject to payment
        of interest; plus (d) all payment obligations of the Person issued or assumed for deferred purchase price payments
        associated with acquisitions, divestitures or other similar business combination transactions; plus (e) balance of discounted
        receivables; plus (f) the amount of all Tax installment programs.
	 	 	 
	Indemnified
    Party	 	has the meaning set forth in Section
        17.1 of this Agreement.

         

	Indemnifying
    Party	 	has the meaning set forth in Section
        17.1 of this Agreement.

         

	Information	 	has the meaning set forth in Section
        28.1 of this Agreement.

         

	INPI	 	means the National Institute of
        Intellectual Property (“Instituto Nacional da Propriedade Industrial”).

         

	INSS	 	means the National Institute of
        Social Security (“Instituto Nacional do Seguro Social”).

         

	Intellectual
    Property	 	means all intellectual property
        rights, including, but not limited to, trademarks, service marks, commercial names and request for their registration,
        designs and requests for their registration, domain names and requests for their registration, registered copyrights and
        requests for its registration, patents and requests for their registration, commercial secrets and know how, including,
        without limitation, any existing rights in discoveries and improvements, processes, formulas, inventions (whether patentable
        or not), inventions discovery, new products and new products development, products’ formulas, tests of products
        and quality control proceedings, products utilities, development researches, suppliers and customers lists, addresses
        lists, information on products, booklets, prototypes, specifications, equipment blueprint, manuals, engineering data,
        industrial drawings and specifications, drawings, sales registries, production and marketing information, computers ́
        programs, software, data basis, logical codes, websites e and other technology processing information of owner
        nature in Brazil or 

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	 	 	abroad, related to and/or that are currently used by Sellers and/or the Companies exclusively with
        respect to the BPC Business.
	 	 	 
	Inventory	 	means finished goods, semi-finished
        goods, raw materials (including packaging materials) and other support materials and supplies such as maintenance parts,
        fuel, office supplies, protection materials and uniforms.

         

	Knowledge	 	means the knowledge of a Person
        or any of its officers, quotaholders or shareholders, as applicable, as a result of its participation in the management
        of such Person, or of its capacity of quotaholder or shareholder, as the case may be.

         

	Lease
    Agreements	 	means
(i) the Lease Agreement with respect to the real property located in the City of Goiânia, State of Goiás, registered
under real estate record file No. 110,734, at the 2nd Real Estate Registry Office of Goiânia/GO, to be executed between
Hypermarcas and Novitá, with the intervention of Buyer as guarantor; (ii) the Free Lease and Cost Sharing Agreement
with respect to part of an area located in the City of Senador Canedo, State of Goiás, corresponding to part of the real
property registered under real estate record file No. 12,524, at Real Estate Registry Office of Senador Canedo/GO, to be executed
between Savoy and Cosmed, with the intervention of Hypermarcas as guarantor; (iii) the Sublease Agreement of Real Property
for Non-Residential Purposes with respect to 70% of the real property located at Avenida Ceci, 282, Centro Empresarial Tamboré,
Tamboré, City of Barueri, State of São Paulo, registered under the real estate record file No. 129,194, at the Real
Estate Registry Office of Barueri/SP, to be executed between Cosmed and Savoy, with the intervention of Buyer as guarantor; and
(iv) the Sublease Agreement of Real Property for Non-Residential Purposes with respect to part of the real property located at
Avenida Magalhães de Castro, 4800, Continental Tower, Units 241, 251 and 252, City of São Paulo, State of São
Paulo, registered under the real estate record files No. 212,308, 212,310 and 212,311, at the 18th Real Estate Registry Office
of São Paulo/SP, to be

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	 	 	executed between Hypermarcas
        and Novitá, with the intervention of Buyer as guarantor, all to be executed on the Business Closing Date, in accordance
        with the drafts attached hereto as Exhibit B.
	 	 	 
	Leased
    Real Estate	 	means locations leased by Sellers
        and/or their Affiliates for the conduct of the BPC Business, as identified in Exhibit C.

         

	Lien	 	means any lien or encumbrance,
        including in rem guarantees (mortgage, pledge and antichresys (anticrese)), conditional disposal or assignment,
        usufruct or any other security or enjoyment (fruição) right, bond, conditional sale (alienação
        fiduciária), title retention, option, seizure, attachment, confiscation (sequestro), collateral, guaranty,
        options, right of first refusal and/or preemptive rights, other similar security right, or any other contractual or judicial
        charge, restriction, claim or right of any nature.

         

	Loss	 	means any losses, damages, indemnifications,
        costs or expenses (including reasonable attorneys’ fees and court expenses), fines, penalties, obligations to third
        parties, arbitration awards, final and unappealable judicial awards, expenditures and damages, and other indirect damages,
        that are effectively and actually suffered, incurred or disbursed by the Indemnified Party, including interests, fines
        and penalties related thereto. For the purposes of clarity, “Loss” does not include loss of profits
        (lucros cessantes).

         

	Material Adverse Effect

         
	 	means any extraordinary event,
        circumstance, change or effect that, individually or in the aggregate, would be materially adverse to the assets, business,
        condition (financial or otherwise) or results of operations of the BPC Business (taken as a whole) which extraordinary
        event, circumstance, change or effect has an impact to the BPC Business greater than twenty five percent (25%) of the
        Purchase Price; provided, however, that no Excluded Matter shall be taken into account in determining whether there has
        been a Material Adverse Effect. For the purposes of defining a “Material Adverse Effect”, “Excluded
        Matters” means any of the following: (i) events, occurrences, developments, circumstances 

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	 	 	or conditions
        in the economy or the securities or financial markets generally (including changes to interest rates or the availability
        of financing); (ii) industry or market events, occurrences, developments, circumstances or conditions; (iii) changes
        in political conditions (including acts of war, whether or not declared, armed hostilities, sabotage and terrorism and
        any escalation or worsening thereof); (iv) changes in the Applicable Laws and/or in the current interpretation thereof;
        (v) compliance by Sellers with the obligations set forth in this Agreement and any effects on Sellers, the Companies
        and/or the BPC Business resulting therefrom; or (vi) any changes in IFRS (or other applicable accounting regulations)
        or accounting standards or principles (or interpretations thereof).
	 	 	 
	Net
    Indebtedness 	 	means the difference between (i)
        Indebtedness and (ii) the sum of (a) all cash on hand and demand deposits held by the Person determined in accordance
        with IFRS and (b) any short-term, highly rated and highly-liquid investments or securities readily convertible to known
        amounts of cash without penalty and which are subject to an insignificant risk of changes in value. Investments shall
        have maturity of three (3) months or less from the date of its acquisition.

         

	Notice	 	has the meaning set forth in Section
        17.2 of this Agreement.

         

	Notice of Fulfillment of Conditions
        to Business Closing

         
	 	has the meaning set forth in Section
        10.1.2 of this Agreement.

         

	Novita	 	has the meaning set forth in the
        Preamble of this Agreement.

         

	Novita
    Shares	 	has the meaning set forth in Recital
        II of this Agreement.

         

	Novita
    Shares Purchase Price	 	has the meaning set forth in Section
        4.1 of this Agreement.

         

	Owned
    Real Estate	 	means locations owned by Sellers
        and/or their Affiliates for the conduct of the BPC Business, as identified in Exhibit D.

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	Party
    or Parties	 	has the meaning set forth in the
        Preamble of this Agreement.

         

	Person	 	means any individual, partnership,
        joint venture, limited liability company, corporation, or any other entity or organization, including Governmental Authorities.

         

	Pre-Closing
    Tax Period	 	means (i) all Tax periods ending
        on or before the Business Closing Date; and (ii) the portion of any Straddle Period attributable to the Tax period ending
        on the Business Closing Date.

         

	Preliminary
    Novita Shares Purchase Price	 	has the meaning set forth in Section
        4.2.2 of this Agreement.

	 	 	 
	Purchase
    Price	 	has the meaning set forth in Section
        4.1 of this Agreement.

         

	Purchase
    Price Adjustment	 	has the meaning set forth in Section
        4.2 of this Agreement.

         

	Representatives
    	 	has the meaning set forth in Section
        28.1 of this Agreement.

         

	Savoy	 	has the meaning set forth in the
        Preamble of this Agreement.

         

	Savoy
    Shares	 	has the meaning set forth in Recital
        III of this Agreement.

         

	Sellers	 	has the meaning set forth in the
        Preamble of this Agreement.

         

	Straddle
    Period	 	means any Tax period that begins
        before and ends after the Business Closing Date.

         

	Taxes	 	means any taxes, collections,
        contributions, charges, fees or similar levies or other assessments (including, without limitation, interests, fines,
        penalties, monetary adjustments and imposition increases) imposed by or payable to any Governmental Authority or other
        tax or social security authorities, whether federal, state or municipal, or of any other 

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	 	 	nature, including, without limitation,
        customs, revenue, profits, franchise, withheld on source, indirect taxation, ad valorem, added value, social security,
        social contributions, payment rolls, financial, real estate, chattel and personal property, transference license, sales,
        use, employment, services and other taxation of any kind and nature, including but not limited to the contributions related
        to the FGTS and INSS. The fines and penalties referred to above shall include those applied by any Governmental Authority
        in the event the Person fails to comply with the Tax Applicable Law, such as but not limited to the lack of payment, the
        register of undue credits, the non-compliance with fiscal obligations (such as but not limited to the issuance or register
        of fiscal books, invoices, the failure of filing of electronic reports, inconsistences or divergences in the information
        provided in the Tax reports filed with the Governmental Authority), fines and penalties arising from the non-compliance
        with the terms, conditions, requirements and tax obligations provided in the legislation related to any Tax incentive
        and that may result in its suspension or revocation.
	 	 	 
	Third
    Party Claim	 	has the meaning set forth in Section
        17.2 of this Agreement.

         

	Tipping
    Basket	 	has the meaning set forth in Section
        16.3.2(ii) of this Agreement.

         

	Trademark
    Assignment Agreement 	 	means the trademark assignment
        agreement, to be executed between Hypermarcas and Buyer on the Trademarks Closing Date, for the purposes of registering
        before the INPI and before all other competent trademark offices, of the transfer of the Trademarks of the BPC Business,
        in accordance with the draft attached as Exhibit E.

         

	Trademarks	 	means all the trademarks, domain
        names, industrial designs and patents, as well as any other registered intellectual property asset, owned by Hypermarcas
        exclusively in connection with the BPC Business, as listed in Exhibit F.

         

	Trademarks
    Call Option	 	has the meaning set forth in Section
        10.5 of this Agreement.

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	Trademarks
    Closing	 	has the meaning set forth in Section
        7.1 of this Agreement.

         

	Trademarks
    Closing Date	 	has the meaning set forth in Section
        7.1 of this Agreement.

         

	Trademarks
    License Agreement	 	means the trademark and other
        registered Intellectual Property license agreement, to be executed between Hypermarcas and/or the Companies, as applicable,
        and Buyer on the Trademarks Closing Date, for the purposes of the license of all Trademarks of the BPC Business to Hypermarcas
        and/or the Companies, as applicable, for a royalty amount and term detailed in the agreement, in accordance with the draft
        attached as Exhibit G.

         

	Trademarks License Agreement
        Termination Notice

	 	has the
    meaning set forth in Section 10.5.2 of this Agreement.
	 	 	 
	Trademarks
    Purchase Price	 	has the meaning set forth in Section
        4.1 of this Agreement.

         

	Upfront
    Novita Shares Purchase Price	 	has the meaning set forth in Section
        4.1 of this Agreement.

 

Section
2.Interpretation

 

2.1. Interpretation.In
this Agreement, except when specifically otherwise provided:

 

(i) the table of contents and
article and section headings are for convenience only and shall not affect the interpretation of this Agreement;

 

(ii) references to
any document, instrument or agreement, including this Agreement shall include (a) all exhibits to this Agreement; and (b) all
documents, instruments or agreements issued or executed in replacement hereof or thereof, if existing;

 

(iii) references
to a document or agreement, including this Agreement, shall be deemed to include any amendment, restatement, modification or
supplement thereto entered into in accordance with the terms thereof;

 

(iv) the words
“include”, “includes” and “including” are not limiting;

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(v) references to
any Person shall include such Person’s successors and permitted assigns, heirs and representatives;

 

(vi) the words “hereof”,
“herein”, and “hereunder” and words of similar import shall refer to this Agreement as a whole and not
to any particular provision of this Agreement;

 

(vii) references
to “days” shall mean calendar days;

 

(viii) the singular
includes the plural and the plural includes the singular;

 

(ix) references to
any laws, generally, shall mean laws in effect on the date of execution of this Agreement, and references to any specific law shall
mean such specific law in effect on the date of execution of this Agreement; and

 

(x) any reference
to an article, section, clause or exhibit is to the article, section, clause of, or to a schedule or exhibit to this Agreement
unless otherwise indicated.

 

Chapter
II. Sale and Transfer of the Shares and of the Trademarks; Purchase Price

 

Section
3. Sale and Transfer of the Shares and the Trademarks

 

3.1. Trademarks. Subject
to the terms and conditions set forth herein, on the Trademarks Closing Date, Hypermarcas shall sell, assign, transfer and deliver
to Buyer, in exchange for the Trademarks Purchase Price and the Upfront Novita Shares Purchase Price, as described in Section
4.1, and Buyer, on its side, shall acquire from Hypermarcas, all, and not less than all, of the Trademarks with all goodwill
which they represent, free and clear of any and all Liens.

 

3.2. Novita Shares.
Subject to the terms and conditions set forth herein, on the Business Closing Date, Sellers shall sell, assign, transfer and deliver
to Buyer, in exchange for the Closing Novita Shares Purchase Price, as described in Section 4.1, and Buyer, on its side,
shall acquire from Sellers all, and not less than all, of the Novita Shares with all which they represent, free and clear of any
and all Liens.

 

3.3. Wrong Pocket.
To the extent that certain assets relating exclusively to the BPC Business, that must be transferred to Buyer pursuant to this
Agreement are erroneously not included in the Exhibits to this Agreement or not transferred to Buyer or the Companies for any reason,
Sellers shall at their own cost transfer such assets to Buyer or the Companies, as the case may be, and Buyer and the Companies,
as the case may be, shall promptly assume and accept such assets from Sellers. For the avoidance of doubt, (i) the foregoing will
not give rise to any adjustment to the Purchase Price, and (ii) no intellectual property rights or assets are not part of the BPC
Business shall be subject to this Section 3.3.

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3.3.1. On the same
manner, and to the extent that certain assets not relating exclusively to the BPC Business, that should remain with Hypermarcas
or any of its Affiliates, including Cosmed, as the case may be, pursuant to this Agreement are erroneously included in the Exhibits
to this Agreement or transferred to the Buyer or the Companies for any reason, Buyer or the Companies, as applicable, shall transfer
such assets to Sellers, as the case may be, and Sellers shall promptly assume and accept such assets from Buyer or the Companies.
For the avoidance of doubt the foregoing will not give rise to any adjustment to the Purchase Price.

 

3.4. The Use of
the “Lucretin” Trademark by Hypermarcas. The Buyer hereby acknowledge that they are aware that the trademark
“Lucretin”, which is used in connection with certain products of the BPC Business, is also used by Hypermarcas in certain
other products, as described and specified in Exhibit 3.4 hereto. In view of the foregoing, and without prejudice to the
assignment and transfer of the Trademarks in accordance with this Agreement, Buyer hereby authorizes Hypermarcas to continue to
use the “Lucretin” trademark, in accordance with its current use, for a period of twelve (12) months as of the Business
Closing Date.

 

3.4.1. For the purposes
of Section 3.4 above, the Parties hereby acknowledge and agree that the Trademarks Transfer Agreement shall contain an express
provision according to which Buyer shall authorize Hypermarcas to continue to hold the trademark registrations related to the products
listed in Exhibit 3.4 to this Agreement.

 

Section
4. Purchase Price; Purchase Price Adjustment

 

4.1. Purchase
Price. The purchase price herein agreed comprises: (i) the price to be paid by Buyer to Hypermarcas for the Trademarks,
in the total amount of six hundred million Reais (R$600.000.000,00) (the “Trademarks Purchase Price”); and (ii) the
price to be paid by Buyer to Hypermarcas, for the Novita Shares, in the amount of (a) one billion one hundred and ten million Reais
(R$1.110.000.000,00) (the “Upfront Novita Shares Purchase Price”) plus (b) two billion and ninety million Reais
(R$2.090.000.000,00) (the “Closing Novita Shares Purchase Price”), totaling, for the purchase of the Novita
Shares, three billion and two hundred million Reais (R$3.200.000.000,00) (the “Novita Shares Purchase Price”)
(being the Trademarks Purchase Price and the Novita Shares Purchase Price jointly referred to as the “Purchase Price”).

 

4.1.1. Cosmed hereby
assigns its right for the receipt of its part of the Novita Shares Purchase Price and the Purchase Price Adjustment, as applicable,
proportionally to its interest in the corporate capital of Novita, to Hypermarcas, and shall grant Hypermarcas and the Buyer, once
the Novita Shares Purchase Price and Purchase Price Adjustment, as applicable, are paid by the Sellers, full irrevocable and irreversible
release in connection with all rights to any payments due in connection with the Novita Shares Purchase Price or the Purchase Price
Adjustment, as applicable, acknowledging that it has no right to receive or claim any amount of the Trademarks Purchase Price,
Novita Shares Purchase Price or Purchase Price Adjustment,
at any title or any time.

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4.2. Purchase
Price Adjustment. The Parties agree that the Novita Shares Purchase Price was calculated assuming the working capital indicated
in Exhibit 4.2 hereto (the “Base Working Capital”), provided that “working capital” shall
include the accounts receivable, the accounts payable and the Inventory of the BPC Business, as defined and calculated in conformity
with the methodology, criteria and statements detailed in Exhibit 4.2, based on the Financial Statements. The adjustment
to the Novita Shares Purchase Price (the “Purchase Price Adjustment”), if any, shall be calculated as follows:

 

PPAA = TWC – BWC – ND

 

Where:

 

PPAA is the Novita
Shares Purchase Price Adjustment Amount.

TWC means the
working capital transferred to the Companies on or before the Business Closing Date, as defined and calculated in conformity with
the methodology, criteria and statements detailed in Exhibit 4.2.

BWC means the
Base Working Capital.

ND means the
Companies Net Indebtedness on the Business Closing Date.

 

4.2.1. Closing
Adjustment to the Novita Shares Purchase Price. Not less than ten (10) Business Days prior to the Business Closing Date,
Sellers shall present to Buyer (i) an estimated unaudited balance sheet (balanço patrimonial) and trial balance or
management accounts (balancete analítico) for the Companies, in each case as of the Business Closing Date; (ii)
the amount of the estimated TWC; and (iii) the amount of the estimated Net Indebtedness, which
shall be used for purposes of calculating the closing adjustment to the Novita Shares Purchase Price. The information presented
as per this Section shall be calculated, by Sellers in good faith in accordance with (A) the definitions of Indebtedness and Net
Indebtedness provided in this Agreement, (B) IFRS and (C) provided that the Inventory to be included in the balance sheet and management
accounts and TWC shall be determined in accordance with the physical stock taking to be conducted jointly by the Sellers and the
Buyer, along with their respective experts, within three (3) days prior to the Business Closing Date. The Parties agree that the
Inventory calculation will follow the same valuation principles Hypermarcas’ past practices with respect to the BPC Business.

 

4.2.2. Closing
Adjustment Calculation. The Closing Novita Shares Purchase Price to be paid to Sellers on the Business Closing Date shall
be the amount equal to two billion and ninety million Reais (R$2.090.000.000,00) (i.a) minus the amount, if any, by which
the estimated TWC is lesser than the Base Working Capital or (i.b) plus the amount, if any, by which the estimated TWC is
greater than the Base Working Capital, as the case may be, minus, in any case (ii) the amount, if any, of the estimated
Net Indebtedness (“Preliminary Novita Shares Purchase Price”).

 

4.3. Calculation
of the Final PPAA. The Parties agree that for the purposes of calculating the final PPAA, Sellers (in conformity with the
formula contained in Section 4.2 above) shall prepare a special balance sheet as of the Business Closing Date, related exclusively
to the BPC Business (the “BPC Business Special Business Closing Balance

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Sheet”). The BPC Business Special Business
Closing Balance Sheet shall be subject to a special review of the accounts of the working capital by KPMG Auditores Independentes,
as of the Business Closing Date, and based on the assumptions of Exhibit 4.3. Sellers shall have the term of forty
five (45) days, counted as of the Business Closing Date, to present the report containing the calculation of the final PPAA (the
“Auditing Report”). The final PPAA shall be based on the results of the calculations of the Closing Novita Shares
Purchase Price, as adjusted pursuant to Section 4.2, minus the Preliminary Novita Shares Purchase Price (“Final
PPAA Amount”).

 

4.3.1. Disagreement
Notice. Upon the receipt of the Auditing Report, Buyer shall have thirty (30) days to review it and present, by means of
a written notice to Sellers, its disagreements, if any, with respect to the Auditing Report, specifying in reasonable detail each
disputed item and the basis therefore (the “Disagreement Notice”). In the event no Disagreement Notice is sent
by Buyer within the term set forth in this Section 4.3.1, the Auditing Report and the Final PPAA Amount shall be considered
conclusive and binding upon the Parties.

 

4.3.2. Solution
of Disagreement. In the event a Disagreement Notice is sent by Buyer, the Parties shall, in good faith and within thirty
(30) days as of the receipt by Sellers of the Disagreement Notice, discuss and negotiate the solution of any such disagreement
and any determination regarding the Final PPAA Amount agreed to in writing by the Parties shall be final, non-appealable and binding
upon such Parties and their successors and assignees for the purposes of this Agreement.

 

4.3.3. If the Parties
are unable to resolve any disagreement set forth in the Disagreement Notice in the manner set forth in Section 4.3.2 within
the referred thirty (30) day period, then the Parties shall, within five (5) days following the expiration of such thirty (30)
day period, submit the matter for resolution to one of the independent accounting firms set forth in Exhibit 4.3.3, which
shall be jointly appointed by Buyer and Sellers (“Accounting Expert”), and, in the event Buyer and Sellers are
unable to reach an agreement with respect to the selection of the Accounting Expert within such five (5) day period, then the Accounting
Expert shall be immediately selected by lottery from one of the firms set forth in Exhibit 4.3.3.

 

4.3.3.1. The Parties
shall cooperate in good faith with the Accounting Expert in the carrying out of its mandate and shall furnish the Accounting Expert
with such data and other information as the Accounting Expert may reasonably request for the purposes of carrying out its mandate
hereunder. The Accounting Expert shall have full access to the Parties systems and documents exclusively for the purpose of calculating
the adjustments to the Final PPAA Amount, if any, resulting from the Accounting Expert’s opinion with respect to the disputed items,
upon the execution of a confidentiality agreement with the Parties.

 

4.3.3.2. Subject
to the terms of the Accounting Expert’s mandate set forth under Section 4.3.3, the Parties shall jointly instruct
the Accounting Expert to determine, as soon as practicable and in any event no later than fifteen (15) days (or such

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other time
as the Parties hereto shall agree in writing) after its engagement, the Accounting Expert’s opinion with respect exclusively
to those items in dispute, and to deliver a written report as to the resolution of the dispute and the resulting calculation of
the definitive Final PPAA Amount and Auditing Report. The Accounting Expert shall provide the Parties with a written explanation
in reasonable detail of the determination of the disputed items and its effects, if any, to the calculation of the Final PPAA Amount.
The determination of the Accounting Expert shall be final, conclusive and binding upon the Parties. The fees and expenses of the
Accounting Expert incurred pursuant to this Section 4.3.3.2 shall be paid by the Party which presents the calculation
of the Purchase Price Adjustment that is further from the Accounting Expert’s conclusion.

 

4.3.4. Positive
Amount. In the event the Final PPAA Amount, calculated in accordance with the formula of Section 4.2, and subject
to the provisions of Section 4.3, as applicable, is a positive amount, then the amount of the Purchase Price Adjustment
shall be paid by Buyer to Hypermarcas. In this event, the Final PPAA Amount shall be considered, for all purposes, an increase
of the Purchase Price.

 

4.3.5. Negative
Amount. In the event the Final PPAA Amount, calculated in accordance with the formula of Section 4.2, and subject
to the provisions of Section 4.3, as applicable, is a negative amount, then the amount of the Purchase Price Adjustment
shall be paid to Buyer by Hypermarcas. In this event, the Final PPAA Amount shall be considered, for all purposes, a decrease of
the Purchase Price.

 

4.3.6. Payments. Any
payments due by any of the Parties, in accordance with the provisions of Sections 4.3.4 and 4.3.5 above, shall be
made within ten (10) Business Days counted as of the (i) end of the thirty (30) days term set forth in Section 4.3.2,
if no Disagreement Notice is sent by Buyer; or (ii) execution of the agreement set forth in Section 4.3.3, in the event
a Disagreement Notice is sent and the Parties solve the disagreement in an amicable manner; or (iii) date of delivery of the written
report by the Accounting Expert, with its conclusive and binding determination, as provided in Section 4.3.3.2 above.

 

4.3.7. Fine. The
lack of payment of any of the amounts due under the terms of this Section 4.2 and Section 4.3, as applicable,
within the term set forth in Section 4.3.6, shall subject the non-compliant Party to a pecuniary fine of five percent
(5%) of the amount due and not paid, increased by interests of one percent (1%) per month calculated pro rata temporis,
and adjusted by the positive variation of the CDI rate, as from the due date until the date on which the payment is fully made,
without prejudice of any other measures that the Parties may be
entitled to according to the Applicable Law.

 

4.3.8. No Inflation. The
Parties hereby agree that the Preliminary Novita Shares Purchase Price and the Final PPAA Amount set forth in this Section 4
shall not be subject to any update or monetary or inflation adjustment.

 

4.3.9. Access
to Information. To the extent permitted by applicable law, Buyer will be granted continued access to the information available
during the due diligence

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procedures related to the transaction set forth herein until the Business Closing Date. For the purposes
of clarity, the provisions of this Section 4.3.9 shall not alter and/or amend the indemnity provisions set forth in Section
16 herein below.

 

Chapter
III. Trademarks Closing

 

Section 5. Conditions
Precedent for the Trademarks Closing 

 

5.1. Conditions
Precedent for the Trademarks Closing. The respective obligations of each of the Parties to consummate the transfer of the
Trademarks and pay the Trademarks Purchase Price and the Upfront Novita Shares Purchase Price, in accordance with the terms set
forth in Sections 3.1 and 4.1 above, are subject to the satisfaction of each of the conditions set forth in this Section 5,
as detailed below.

 

5.1.1. Approval
by the Brazilian Antitrust Authority. The Parties shall have obtained approval from CADE for the consummation of the transactions
set forth herein, pursuant to Section 14.1 below.

 

5.1.2. No Legal
Restriction. No provision of any Applicable Law or other legal restrictions (whether they are temporary, preliminary or
permanent) shall have been issued, emanated, started, enacted or applied, nor shall be in full force and effect, which prohibits,
restricts or prevents the Parties from consummating the transactions set forth in this Agreement.

 

5.1.3. No Contravention. No
action, suit or proceeding will have been commenced between the date of this Agreement and the Trademarks Closing Date against
Sellers, Buyer, the Companies or their respective Affiliates, which has resulted in the issuance of an injunction or other equitable
remedy preventing the Parties from consummating the transactions set forth in this Agreement.

 

5.2. Conditions
Precedent for Trademarks Closing by Buyer. Without prejudice to the satisfaction of the conditions precedent set forth in
Section 5.1 above, on the Trademarks Closing Date, Buyer shall acquire all of the Trademarks and pay the Trademarks Purchase
Price and the Upfront Novita Shares Purchase Price, provided that the following conditions precedent have been satisfied, or waived
by Buyer, in accordance with Section 5.2.4, on or before the Trademarks Closing Date (the “Conditions Precedent
to Trademarks Closing for Buyer”):

 

5.2.1. Representations
and Warranties. All representations and warranties of Sellers made in Section 12 of this Agreement shall be
true, precise and correct in all material respects as from the date hereof and on the Trademarks Closing Date, as if they were
made on the Trademarks Closing Date, provided that the condition set forth herein shall be considered duly fulfilled unless any
breach, misrepresentation or inaccuracy of any representation and warranty made by Sellers in Section 12 represents a Material
Adverse Effect, provided that this shall not be construed as a waiver of the Buyer or in any other way limit the Buyer’s
right to seek indemnification for Losses relating to such breach,

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misrepresentation or inaccuracy of any representation and warranty
regardless if such events represent or not a Material Adverse Effect. For the avoidance of doubt, the Fundamental Representations
shall not be subject to any materiality carve-out and shall be true, precise and correct in all respects as from the date hereof
and on the Trademarks Closing Date.

 

5.2.2. Obligations. Sellers
shall have complied, in all material respects, with all its respective and relevant obligations, covenants and undertakings under
this Agreement that are required to be performed or complied with prior to the Trademarks Closing Date and shall have substantially
taken all relevant actions and delivered all documents required or necessary for the implementation of the Trademarks Closing;
provided, however, that any non-compliance of the obligations set forth in this Section 5.2.2 shall not be considered as
a violation hereof except to the extent it configures a Material Adverse Effect.

 

5.2.3. No Material
Adverse Effect. No Material Adverse Effect shall have occurred and its effects are continuing.

 

5.2.4. Waiver. The
Conditions Precedent to Trademarks Closing for Buyer are for exclusive benefit of Buyer and may be waived in writing by Buyer,
in total or in part, at Buyer’s exclusive discretion. Notwithstanding, in the event Buyer waive any of the Condition Precedent
to Trademarks Closing for Buyer for the purposes of implementation and consummation of the Trademarks Closing, Sellers shall remain
responsible for any and all liabilities arising from the waived Condition Precedent to Trademarks Closing for Buyer and shall hold
Buyer harmless from any Loss incurred in connection therein.

 

5.3. Conditions
Precedent for Trademarks Closing by Sellers. Without prejudice to the satisfaction of the conditions precedent set forth
in Section 5.1 above, on the Trademarks Closing Date, Hypermarcas shall sell all of the Trademarks, in exchange for the
Trademarks Purchase Price and the Upfront Novita Shares Purchase Price, provided that the following conditions precedent have been
satisfied, or waived by Sellers, in accordance with Section 5.3.3 on or before the Trademarks Closing Date (“Conditions
Precedent to Trademarks Closing for Sellers”):

 

5.3.1. Representations
and Warranties. All representations and warranties made by Buyer in Section 13 of this Agreement shall be true,
precise and correct in all material respects as from the date hereof and on the Trademarks Closing Date, as if they were made on
the Trademarks Closing Date.

 

5.3.2. Obligations. Buyer
shall have complied, in all material respects, with all of their obligations, covenants, and undertakings under this Agreement
that are required to be performed or complied with prior to Trademarks Closing Date and shall have substantially taken all actions
and delivered all documents required or necessary for the implementation of the Trademarks Closing.

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5.3.3. Waiver. The
Conditions Precedent to Trademarks Closing for Sellers are for exclusive benefit of Sellers and may be waived in writing by Sellers,
in total or in part, at Sellers exclusive discretion. Notwithstanding, in the event Sellers waive any of the Condition Precedent
to Trademarks Closing for Sellers for the purposes of implementation and consummation of the Trademarks Closing, Buyer shall remain
responsible for any and all liabilities arising from the waived Condition Precedent to Trademarks Closing for Sellers and shall
hold Sellers harmless from any Loss incurred in connection therein.

 

Section
6. Use of the Trademarks Up to the Trademarks Closing Date 

 

6.1. Use of the
Trademarks. Hypermarcas hereby agrees and undertakes to, up to the Trademarks Closing Date, and in addition to the obligations
provided for in Section 9, except as previously and expressly authorized by Buyer:

 

(i)  not to
create any Liens over the Trademarks;

 

(ii) not to abandon,
cancel, let lapse, fail to protect or otherwise dispose of any of the Trademarks; and

 

(iii) not to transfer,
lease, lease back, sublease, license or otherwise dispose of any of the Trademarks, or any interest therein, maintaining the Trademarks
in good conditions.

 

6.2. Breach of
Obligations. Notwithstanding the restrictions of Section 6.1, in the event that any Trademark becomes subject to
a Lien without action from Hypermarcas, such fact shall not be deemed as a breach of the obligations provided for in Section 6.1
above, provided that Hypermarcas shall take all necessary actions to cancel such Lien and consummate the Trademarks Closing pursuant
to this Agreement.

 

Section
7. Trademarks Closing 

 

7.1. Trademarks
Closing. Subject to the fulfillment or waiver of the conditions precedent provided for in Section 5 above, the closing
of the Trademarks sale and assignment from Hypermarcas to Buyer and the payment of the Trademarks Purchase Price and the Upfront
Novita Shares Purchase Price from Buyer to Hypermarcas (the “Trademarks Closing”), the Trademarks Closing shall
occur on the next Business Day after 15 (fifteen) days of the date of publication of CADE’s approval in accordance with Section
14.1 below, or at any other date agreed between the Parties in writing, subject to the provisions of Section 7.5 (the
“Trademarks Closing Date”).

 

7.1.1. Place. The
acts related to the Trademarks Closing shall be performed at the offices of Souza, Cescon, Barrieu & Flesch Advogados, located
in the City of São Paulo, State of São Paulo, at Rua Funchal, No. 418, 11th floor.

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7.2. Simultaneous
Actions. The Parties acknowledge and declare that, for the purposes of this Agreement, none of the obligations provided
for in Section 7.3 below, to be complied by the Parties on the Trademarks Closing Date, shall be deemed as perfect and fulfilled
unless all the other obligations referred to in Section 7.3 shall have been fully, properly and simultaneously complied
with on the Trademarks Closing Date.

 

7.3. Obligations
on the Trademarks Closing Date. On the Trademarks Closing Date, the Parties agree to perform the following acts:

 

(i) Sellers shall
deliver to Buyer, and Buyer shall deliver to Sellers, a statement confirming that the conditions precedent set forth in Section
5.1 and 5.3 have been duly complied with and/or waived by the applicable Party;

 

(ii) Buyer shall
pay the Trademarks Purchase Price and the Upfront Novita Shares Purchase Price to Hypermarcas, in immediately available funds to
the bank account indicated in Exhibit 7.3.(ii);

 

(iii) the Parties
shall execute the Trademark Assignment Agreement, along with any other forms necessary for the registration of such agreement,
and Buyer shall arrange for the filing of such Trademark Assignment Agreement with the INPI and any other applicable Governmental
Authority as soon as practicable thereafter; and

 

(iv) the Parties
shall execute the Trademark License Agreement and Buyer shall arrange for the filing of such Trademark License Agreement with the
INPI and any other applicable Governmental Authority as soon as practicable thereafter.

 

7.4. Management
of the Trademarks until the Business Closing Date. Without prejudice to the transfer and assignment of the Trademarks, on
the Trademarks Closing Date, in accordance with the provisions of this Agreement, the Parties acknowledge and agree that, during
the period comprised between the Trademarks Closing Date and the Business Closing Date, Hypermarcas shall continue to manage the
Trademarks. For such purposes, on the Trademarks Closing Date, Buyer shall grant
to Hypermarcas a power of attorney, in accordance with the draft attached hereto as Exhibit 7.4.

 

Chapter
IV. Business Closing

 

Section
8. Conditions Precedent for the Business Closing

 

8.1. Conditions
Precedent for the Business Closing. The respective obligations of each of the Parties to consummate the transfer of the
Novita Shares and pay the Closing Novita Shares Purchase Price, in accordance with the terms set forth in Sections 3.2 and 4.1
above are subject to the satisfaction of each of the conditions set forth in this Section 8, as detailed below.

 

8.1.1. No Legal
Restriction. No provision of any Applicable Law or other legal restrictions (whether they are temporary, preliminary or
permanent) shall have

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been issued, emanated, started, enacted or applied, nor shall be in full force and effect, which prohibits,
restricts or prevents the Parties from consummating the transactions set forth in this Agreement.

 

8.1.2. No Contravention. No
action, suit or proceeding will have been commenced between the date of this Agreement and the Business Closing Date against Sellers,
Buyer, the Companies or their respective Affiliates, which has resulted in the issuance of an injunction or other equitable remedy
preventing the Parties from consummating the transactions set forth in this Agreement.

 

8.1.3. Trademarks
Closing. The Trademarks Closing shall have been consummated, and the Trademarks shall have been transferred to Buyer and
the Trademarks Purchase Price and the Upfront Novita Shares Purchase Price shall have been paid to Hypermarcas, in accordance with
the provisions of this Agreement.

 

8.2. Conditions
Precedent for Business Closing by Buyer. Without prejudice to the satisfaction of the conditions precedent set forth in
Section 8.1 above, on the Business Closing Date, Buyer shall acquire all of the Novita Shares and pay the Preliminary Novita
Shares Purchase Price, provided that the following conditions precedent have been satisfied, or waived by Buyer, in accordance
with Section 8.2.11, on or before the Business Closing Date (the “Conditions Precedent to Business Closing for
Buyer”):

 

8.2.1. Corporate
Reorganization. Hypermarcas shall have delivered to Buyer all documents that evidence the effective and definitive assignment
and transfer of all the BPC Business to Savoy and to Novita, as the case may be pursuant to Exhibit 8.2.1, in a manner to
cause Savoy and Novita to hold and operate the BPC Business as it is currently held by Sellers, and shall have concluded the
assignment and transfer of all the Excluded Assets from Savoy to Hypermarcas or any of its Affiliates, as detailed in Exhibit
8.2.1 (the “Corporate Reorganization”).

 

8.2.2. Representations
and Warranties. All representations and warranties of Sellers made in Section 12 of this Agreement shall be
true, precise and correct in all material respects as from the date hereof and on the Business Closing Date, as if they were made
on the Business Closing Date, provided that the condition set forth herein shall be considered duly fulfilled unless any breach,
misrepresentation or inaccuracy of any representation and warranty made by Sellers in Section 12 represents a Material Adverse
Effect, provided that this shall not be construed as a waiver of the Buyer or in any other way limit the Buyer’s right to
seek indemnification for Losses relating to such breach, misrepresentation or inaccuracy of any representation and warranty regardless
if such events represent or not a Material Adverse Effect. For the avoidance of doubt, the Fundamental Representations shall not
be subject to any materiality carve-out and shall be true, precise and correct in all respects as from the date hereof and on the
Business Closing Date.

 

8.2.3. Obligations. Sellers
shall have complied, in all material respects, with all its respective and relevant obligations, covenants and undertakings under
this Agreement that are required to be performed or complied with prior to the Business Closing

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Date and shall have substantially
taken all relevant actions and delivered all documents required or necessary for the implementation of the Business Closing, and
Sellers shall have caused the Companies to comply, in all material respects, with all of their relevant obligations, covenants
and undertakings in this Agreement that are required to be performed by the Companies prior to Business Closing Date; provided,
however, that any non-compliance of the obligations set forth in this Section 8.2.3 shall not be considered as a violation
hereof except to the extent it configures a Material Adverse Effect.

 

8.2.4. No Material
Adverse Effect. No Material Adverse Effect shall have occurred and its effects are continuing.

 

8.2.5. Conduction
of the BPC Business. The BPC Business shall have been conducted by the Sellers and/or the Companies, as the case may
be, between the date hereof and the Business Closing Date, in all material respects, as the BPC Business is currently conducted,
including after the conclusion of the Corporate Reorganization, in a way that all of the obligations and restrictions provided
for in Section 9 shall have been substantially complied with, in all material respects. For avoidance of doubts, any action
taken by Sellers for purposes of compliance with the provisions of this Agreement, which may result on the deviation of the BPC
Business from past practices and/or its ordinary course, shall not be deemed as a breach by the Sellers of this condition precedent.

 

8.2.6. Employees. Sellers
shall have finalized the transfer of the business employees, as listed in Exhibit 8.2.6 (“Business Employees”),
to the Companies, with no termination of their respective employment agreements, upon the record in their respective Labor and
Social Security Register and amendment to their employment agreements. The Parties acknowledge and agree that Exhibit 8.2.6
may be amended, updated or altered up to the Business Closing Date due to (a) termination of employment for justa causa, (b) new engagements for replacement
purposes, (c) termination of employment or new engagements in the ordinary course of business, or (d) as it may be required by
any Applicable Laws, public authorities’ decisions or ordinances, provided that no Business Employees listed in Exhibit 
9.1(viii) should be terminated without justa causa.

  

 8.2.7. ICMS Incentive. Hypermarcas
shall have applied and obtained before the State of Goiás, and to the benefit of Novita, the ICMS Incentive substantially
with the same benefits as Hypermarcas currently enjoys under the ICMS Incentive related to the BPC Business, and provided that
the obligations in respect of the ICMS Incentive as currently applicable shall be adjusted in a manner proportional to the ICMS
Incentive currently enjoyed by Hypermarcas. Buyer hereby undertakes to cooperate and to take all reasonable necessary actions and
execute all necessary documents to obtain such transfer.

 

8.2.9. Licenses
and Permits. The Sellers shall cause Novita and Savoy to:

 

(A) obtain (i) the
Sanitary Operational Authorization to be issued by the National Agency of Sanitary Vigilance (“ANVISA”), and the (ii)
Regulatory

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Operating Permit, to be issued by the local Sanitary Agency (“VISA”) (“alvará de funcionamento
– AFE”); and

 

(B) file with the
respective Governmental Authority the request for the granting of the licenses, registrations, approvals or permits specified in
Exhibit 8.2.9(B).

 

8.2.9.1. All costs,
fees and expenses for obtaining and/or filing, as applicable, the aforementioned licenses, including those new costs arising from
the process of obtainment of such licenses or any impositions made by any Governmental Authority in connection with the obtainment
of such licenses, shall be entirely borne by Hypermarcas.

 

8.2.10. IT System. The
Sellers shall cause Novita to be able to independently invoice its customers, in accordance with the current practices of Hypermarcas
with respect to the BPC Business. For such purposes, Hypermarcas shall create, within its own IT environment, the sub-systems required
for Novita to issue its invoices for the sale of products.

 

8.2.10.1. For the
purposes of clarity, the obligation contained in Section 8.2.10 above shall not be interpreted or construed as an obligation of
Sellers to develop an independent IT system for the Companies, nor to transfer and integrate the sub-system created in accordance
with Section 8.2.10 above into the Buyer’s own system, which shall be the sole responsibility of Buyer.

 

8.2.11. Waiver.
The Conditions Precedent to Business Closing for Buyer are for exclusive benefit of Buyer and
may be waived in writing by Buyer, in total or in part, at Buyer’ exclusive discretion. Notwithstanding, in the event Buyer
waive any of the Condition Precedent to Business Closing for Buyer for the purposes of implementation and consummation of the Business
Closing, Sellers shall remain responsible for any and all liabilities arising from the waived Condition Precedent to Business Closing
for Buyer and shall hold Buyer harmless from any Loss incurred in connection therein.

 

 

8.3. Conditions
Precedent for Business Closing by Sellers. Without prejudice to the satisfaction of the conditions precedent set forth in
Section 8.1 above, on the Business Closing Date, Sellers shall sell all of the Novita Shares, in exchange for the Closing
Novita Shares Purchase Price, provided that the following conditions precedent have been satisfied, or waived by Sellers, in accordance
with Section 8.3.3 on or before the Business Closing Date (“Conditions Precedent to Business Closing for Sellers”):

 

8.3.1. Representations
and Warranties. All representations and warranties made by Buyer in Section 13 of this Agreement shall be true,
precise and correct in all material respects as from the date hereof and on the Business Closing Date, as if they were made on
the Business Closing Date.

 

8.3.2. Obligations. Buyer
shall have complied, in all material respects, with all of their obligations, covenants, and undertakings under this Agreement
that are

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required to be performed or complied with prior to Business Closing Date and shall have substantially taken all actions
and delivered all documents required or necessary for the implementation of the Business Closing.

 

8.3.3. Waiver.
The Conditions Precedent to Business Closing for Sellers are for exclusive benefit of Sellers and may be waived in writing by Sellers,
in total or in part, at Sellers exclusive discretion. Notwithstanding, in the event Sellers waive any of the Condition Precedent
to Business Closing for Sellers for the purposes of implementation and consummation of the Business Closing, Buyer shall remain
responsible for any and all liabilities arising from the waived Condition Precedent to Business Closing for Sellers and shall hold
Sellers harmless from any Loss incurred in connection therein.

 

Section
9. Conduction of the BPC Business Up to the Business Closing Date 

 

9.1. Conduction
of the BPC Business. Sellers, directly exclusively with respect to the BPC Business, up to the Business Closing Date, undertake
and agree to, except as previously and expressly authorized by Buyer:

 

(i)  subject
to Section 9.1.2, conduct the BPC Business under its ordinary course according to past practices, using commercially reasonable
efforts to preserve and protect the goodwill related to the BPC Business and the existing relationships with its suppliers, clients
and all other Persons that maintain business relationships related to the BPC Business;

 

(ii)  to cause
the Companies to comply with all material obligations and/or agreements, and not to amend or terminate any of the same except as
it may be required in the ordinary course of the BPC Business as currently conducted by Sellers;

 

(iii) except in the
ordinary course of the BPC Business, as currently conducted by Sellers, not to enter into any new agreements;

 

(iv) except in the
ordinary course of the BPC Business, as currently conducted by Sellers, not to incur in any obligations that would increase the
Indebtedness of the BPC Business; provided, however, that no financial Indebtedness shall be incurred on behalf and/or in the name
of the Companies;

 

(v) not to make any
capital expenditures in excess of five million Reais (R$ 5.000.000,00) per project, including the purchase of any additional
machinery;

 

(vi) not to create
any Liens over the Companies’ shares or any assets owned by the Sellers and/or the Companies in connection with the BPC Business,
except in the ordinary course of business of the BPC Business, as currently conducted by Sellers or as it may be required
by any Applicable Laws, public authorities’ decisions or ordinances;

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(vii) not to transfer,
lease, leaseback, sublease, license or otherwise dispose of any assets or properties, or any interest therein regarding exclusively
to the BPC Business, maintaining all assets in good conditions, except for normal wear and tear, except as provided in the Lease
Agreements;

 

(viii) except in
the ordinary course of the BPC Business, as currently conducted by Sellers, not to hire and/or fire any employees nor modify any
of the existing labor conditions, including but not limited to, salaries, compensation plans and social benefits, unless (a) for
justa causa, (b) for replacement purposes, or (c) as it may be required by any Applicable Laws, public authorities’
decisions or ordinances, or as a result of salary agreements with employee unions; provided that no Business Employees listed in
Exhibit 9.1(viii) should be terminated without justa causa;

 

(x) not to amend
the Bylaws of the Companies, except for the amendments required for purposes of implementing the Corporate Reorganization set forth
by this Agreement;

 

(xi) not to issue,
sell or transfer any equity interests or effect any recapitalization, reclassification, stock split, reverse split or similar change
to the corporate capital of the Companies, except as required for purposes of implementing the Corporate Reorganization;

 

(xii) not to declare
and/or credit any dividends of the Companies;

 

(xiiii) not write
down or write up (or fail to write down or write up, in accordance with applicable standards of IFRS and consistent with past practices)
the value of any asset or revenue in a material form regarding the BPC Business;

 

(xiv) not to make
or terminate any material Tax election, Tax collection, Tax incentive benefits, file any Tax ruling (consulta formal) or
similar document, amend any material tax return or change any material procedure which may impact the Taxes of the BPC Business
to be transferred to the Companies, except in the ordinary course of business as currently conducted by Sellers or as required
by the Applicable Law and/or under this Agreement;

 

(xv) not take or
cause the Companies to take any intentional action or omission to deviate the commercial conduct of the BPC Business in a manner
that is inconsistent or differing with its ordinary course and past practices; and

 

(xvi) maintain marketing
expenses consistent with the ordinary course of the BPC Business, as currently conducted by Sellers.

 

9.1.1. Control
and Management of the BPC Business. None of the provisions set forth in this Agreement shall give to Buyer, directly or
indirectly, the right to control or manage the BPC Business before the Business Closing Date.

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9.1.2. Compliance
with the Agreement. The compliance by Sellers with the provisions of this Agreement shall, in no event, be considered or
interpreted as a breach of Sellers’ obligation to conduct the BPC Business in the ordinary course and in accordance with
past practices, whenever such provisions and obligation conflict.

 

9.2. Breach of
Obligations. No breach of the obligations provided for in Section 9.1 above shall entitle any of the Parties
to terminate this Agreement or in any manner affect the obligation of the Parties to implement the Business Closing except if (i)
such breach is not cured by the breaching Party within forty-five (45) days as of the notice from the non-breaching Party informing
about such breach, and/or (ii) such breach results in a Material Adverse Effect, provided that nothing established herein shall
limit in any way the right of Buyer to claim indemnification for any Losses arising out of the breach of this Agreement, subject
to the provisions of Section 16.

 

Section
10. Business Closing

 

10.1. Business
Closing. Subject to the fulfillment or waiver of the conditions precedent provided for in Section 8 above, the closing
of the sale of the Novita Shares to Buyer and the payment of the Preliminary Novita Shares Purchase Price to Hypermarcas (the “Business Closing”),
the Business Closing shall occur on the date determined in accordance with Section 10.1.3 below, subject to the provisions
of Section 10.4 (the “Business Closing Date”).

 

10.1.1. Place. The
acts related to the Business Closing, including the formalization of the assignment and transfer of the Novita Shares by the Sellers
to Buyer, shall be performed at the offices of Souza, Cescon, Barrieu & Flesch Advogados, located in the City of São
Paulo, State of São Paulo, at Rua Funchal, No. 418, 11th floor.

 

10.1.2. Preferable
Business Closing Date. The Parties undertake to endeavor their best efforts for the Business Closing to occur on or before
March 31st, 2016.

 

10.1.3. Notice
of Fulfillment of Conditions to Transfer. Once the conditions precedent for the Business Closing set forth in Sections
8.1 and 8.2 are fulfilled, Hypermarcas shall notify Buyer, in writing, within ten (10) Business Days counted as of the date
of the fulfillment of the last Condition Precedent for the Business Closing set forth in Sections 8.1 and 8.2 (the “Notice
of Fulfillment of Conditions to Business Closing”), to inform (i) such fulfillment, attaching to such Notice of Fulfillment
of Conditions to Business Closing sufficient and documented evidence of such fulfillment; and (ii) the Business Closing Date, which
shall be on the last Business Day of a month, at least fifteen (15) days after the receipt, by Buyer, of such notice.

 

10.2. Simultaneous
Actions. The Parties acknowledge and declare that, for the purposes of this Agreement, none of the obligations provided
for in Section 10.3 below, to be complied by the Parties and by the Companies on the Business Closing Date, shall be deemed
as perfect and fulfilled unless all the other obligations referred to in Section 10.3

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shall have been fully, properly and
simultaneously complied with on the Business Closing Date.

 

10.3. Obligations
on the Business Closing Date. On the Business Closing Date, the Parties agree to practice the following acts:

 

(i) Sellers shall
deliver to Buyer, and Buyer shall deliver to Sellers, a statement confirming that the conditions precedent set forth in Section
8 have been duly complied with and/or waived by the applicable Party;

 

(ii) the assignment
and transfer, to Buyer, of all of the Novita Shares, by means of the execution of the proper term of transfer in Novita’s
Transfer of Shares Registry Book, the corresponding registry in Novita’s Shares Registry Book and the holding of a general
shareholders’ meeting of Novita, which minutes shall be substantially in accordance with Exhibit 10.3(ii), to
decide on (a) the resignation of the current managers of Novita, and (b) the appointment of the new managers of Novita indicated
by Buyer;

 

(iii) the receipt
by Buyer of the executed resignation letters of the legal representatives of Novita and Savoy appointed by Hypermarcas,
substantially in the form of Exhibit 10.3(iii);

 

(iv) the holding
of a general shareholders’ meeting of Savoy, which minutes shall be substantially in accordance with Exhibit 10.3(iv),
to decide on (a) the acceptance of the resignation of the legal representatives of Savoy, and (b) the appointment of the new officers
of Savoy indicated by Buyer;

 

(v) Buyer shall pay
the Preliminary Novita Shares Purchase Price to the Sellers, in immediately available funds to the bank account indicated in Exhibit
7.3(ii);

 

(vi) Sellers shall
cause the Companies to grant a public instrument of power of attorney to the individuals appointed by Buyer with powers of management
of the Companies, for the period comprising the Business Closing Date and date of register of the general shareholders meeting
of Novita and Savoy, as the case may be, in the form attached hereto as Exhibit 10.3(vi). Buyer shall hold Sellers
and its Affiliates harmless from and indemnify them for any and all Losses incurred and/or suffered by them as a result from the
actions practiced by the attorneys-in-fact appointed by means of such power of attorney;

 

(vii) the Parties
shall execute the closing memorandum formalizing the Business Closing and Business Closing actions, as per the form of the draft
attached hereto as Exhibit 10.3(vii);

 

(viii) the Parties
shall execute the Lease Agreements;

 

(ix) the Parties
shall terminate the Trademarks License Agreement.

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10.3.1. File of
the General Shareholders Meetings. No later than five (5) Business Days as of the Business Closing Date, Buyer shall file
before the Board of Trade of State of Goiás, the minutes of the general shareholders’ meeting of Novita and Savoy
provided for in Sections 10.3(ii) and 10.3(iv), respectively. Sellers undertake to cooperate with Buyer to obtain
such registration, including by timely signing and presenting any and all reasonable additional documents that may be required
by the Board of Trade of State of Goiás to conclude such registration.

 

10.4. Drop Dead
Date. Subject to Section 10.5 below, if the Business Closing Date does not occur until December
31, 2016 (the “Drop Dead Date”) and no Party is in breach of its obligations under this Agreement, any of the
Parties may choose not to consummate the Business Closing, and shall inform the other Party in writing of its decision within five
(5) Business Days as of the Drop Dead Date. In the event any Party is in breach of its obligations under this Agreement, such breaching
Party shall not have the right to choose not to consummate the Business Closing and the non-breaching Party shall, within thirty
five (35) Business Days as of the Drop Dead Date, notify the other Party in writing of whether it intends to (i) terminate this
Agreement; or (ii) consummate the Business Closing by means of waiving any pending conditions
precedent provided for in Section 8 above.

 

10.4.1. No Effect. If
this Agreement is terminated pursuant to Section 10.4, unless otherwise provided herein, this Agreement shall become
void and of no effect, provided that (i) Section 7 (Trademarks Closing), Section 10.4 (Drop Dead Date), Section 10.5
(Call Option), Section 25 (Severability of the Provisions), Section 28 (Confidentiality) and Section 29 (Arbitration)
shall survive the termination of this Agreement and (ii) nothing herein shall relieve a Party hereto of any liabilities for Losses
incurred or suffered by any other Party as a result of any breach of any covenant or undertaking under this Agreement, including,
but not limited to, as a result of any willful or negligent act or omission.

 

10.5. Call Option. In
the event the Business Closing does not occur pursuant to Section 10.4 above, Hypermarcas shall have the right to exercise
a call option for the acquisition of the Trademarks (the “Trademarks Call Option”), which shall be further detailed
in the Trademarks License Agreement and shall be subject to the following terms and conditions:

 

(i) the Trademarks
Call Option shall be exercisable during a period of sixty (60) days counted as of the earlier of (i) the termination of this Agreement
pursuant to Section 10.4; or (ii) the end of the five (5) Business Days period set forth in Section 10.4, in case
no notice is sent by any of the Parties (the
“Exercise Period”)

 

(ii) the price of
the Trademarks Call Option (the “Call Option Price”) shall be the amount equal to the Trademarks Purchase Price,
duly adjusted in accordance with the variation of the CDI, from the date of actual payment of the Trademarks Purchase Price until
the date of the actual payment of the Call Option Price; and

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(ii) the Upfront
Novita Shares Purchase Price received on the Trademarks Closing Date shall be returned to the Buyer, duly adjusted in accordance
with the variation of the CDI, from the date of actual payment until the date of such return, which shall be the same date of payment
of the Call Option Price.

 

10.5.1. Liens. Buyer
agrees, until the first of (i) the Business Closing Date or (ii) the end of the Exercise Period, not to (a) sell or dispose,
in any way, nor create any Liens on the Trademarks, (b) abandon, cancel, let lapse, fail to protect or otherwise dispose of any
of the Trademarks; and/or (c) transfer, lease, lease back, sublease, license or otherwise dispose of any of the Trademarks, or
any interest therein, maintaining the Trademarks in good conditions.

 

10.5.2. No Exercise
of the Call Option. In the event Sellers do not to exercise the Trademarks Call Option within the Exercise Period, Buyer
shall be entitled to terminate, with a 6 (six) month prior written notice, the Trademarks License Agreement (the “Trademarks
License Agreement Termination Notice”), without any liabilities, and sell or dispose, in any way, or create any Liens
on the Trademarks; provided, however, that in case Buyer delivers the Trademarks License Agreement Termination Notice to Hypermarcas
for such purposes, then the Exercise Period shall be considered extended for a period of thirty days as of the date on which the
Trademarks License Agreement Termination Notice is delivered to Hypermarcas.

 

10.6. Failure
to Implement the Business Closing. In case the Business Closing does not occur as a result of any action for which the any
of the Sellers, on the one side, or any of the Buyer, on the other side, can be held responsible for, which responsibility shall
be determined by a final and non-appealable decision, in accordance with Section 29 below, then the Party held responsible
for such an action shall pay to the other Party a penalty in the amount of six hundred million Reais (R$600.000.000,00), without
prejudice to the reimbursement of any Losses incurred by the non-responsible Party.

 

10.7. Potential
Negotiation of Real Estate Sale. The Parties agree to negotiate in good faith the potential sale to Buyer of the real estate
property located in the City of Goiânia, State of Goiás, registered under real estate record file No. 110,734, at
the 2nd Real Estate Registry Office of Goiânia/GO, as an ancillary agreement within the context of the transactions contemplated
herein until the Business Closing Date. Nothing in this Section 10.7 shall be understood and/or construed as to cause the effective
sale of such real estate as a condition precedent for the implementation of the transactions contemplated herein, including the
Business Closing, In case no agreement is reached with respect to the sale of such real estate, its use shall be regulated in the
form of the applicable Lease Agreement attached hereto.

 

Section
11. Further Obligations of Sellers

 

11.1. Dismemberment
of Real Estate Properties. The Parties hereby undertake to practice any and all acts, and to execute any and all necessary
documents that may be required to accomplish (i) the dismemberment of ownership of the real estate

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property described in Exhibit 11.1(i),
and (ii) the complete regularization of all competent real estate registries in order to reflect the built areas within such estate
properties, by implementing the steps described in Exhibit 11.1(ii). All costs and expenses in connection thereto or required
to be incurred, or resulting from the fact that the Companies are not the lawful registered owners solely of the real estate property
described in Exhibit 11.1(i), as belonging to the BPC Business as of the Business Closing Date, shall be directly borne
and paid by the Sellers.

 

Chapter
V. Representations and Warranties

 

Section
12. Representations and Warranties of Sellers 

 

12.1. Representations
and Warranties. Subject to the limitations contained therein, Sellers hereby represent and warrant the following to Buyer.

 

12.1.1. Organization.
Sellers and each of the Companies are corporations, duly organized and validly existing and in good standing under the Applicable
Laws of the Federate Republic of Brazil. Sellers are legally qualified to independently conduct the BPC Business as currently conducted
by Hypermarcas and its Affiliates, as well as to own and use all of the BPC Business’ properties and assets. The Companies
have no and, on the Business Closing Date, will have no direct or indirect subsidiaries, provided that Novita shall hold all of
the Savoy Shares prior to the Business Closing Date.

 

12.1.2. Authorization.
Sellers and the Companies have the full power and necessary authority to execute and deliver this Agreement and to perform the
obligations contained herein. Sellers and the Companies are in their full capacity and do not depend on any additional authorization
to execute this Agreement, except as provided for in this Agreement.

 

12.1.3. Valid and
Enforceable Agreement. This Agreement has been duly and validly executed and delivered by Sellers and the Companies and is
a valid and binding agreement of Sellers and the Companies, enforceable against each of Sellers and the Companies in accordance
with its terms (assuming the validity with respect to Buyer).

 

12.1.4. No Conflict;
Consents. The execution and delivery of this Agreement by each of Sellers and the Companies, and the completion of the operations
described herein do not:

 

(i) except as disclosed
in Exhibit 12.1.4(i), breach or conflict with (a) any organization or corporate document of Sellers nor of the Companies,
or with any corporate resolution of its respective shareholders, or (b) any agreement, contract, commitment, obligation, understanding,
arrangement or restriction of any kind relating to the BPC Business to which any of Sellers and the Companies is a party or are
subject to, or by which their respective assets or properties are bound, which is relevant for the operation of the BPC Business
and which termination would prevent the operation of the BPC Business in accordance with its past practices;

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(ii) breach or conflict
with any Applicable Law to which Sellers and the Companies, or their respective assets or properties may be bound to or affected
by;

 

(iii) except as otherwise
provided for in this Agreement, or as disclosed in Exhibit 12.1.4(iii), create any Liens on any of the assets or properties
of the Companies, or on the Shares; or

 

(iv) except as otherwise
provided for in this Agreement, and except further as provided for in Section 14.1, require the consent or approval
of any Governmental Authorities or any third parties in connection with the execution and performance of this Agreement by Sellers
and the Companies or the consummation by Sellers and the Companies of the transaction contemplated by this Agreement.

 

12.1.5. Ownership.
All shares of the Companies have been duly authorized, validly issued and are fully paid. Furthermore, all such shares are free
and clear of any Liens, and, except as provided for in this Agreement, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights or other agreements or commitments that could require
Sellers or the Companies to sell, transfer or otherwise dispose of any of the shares of the Companies or that could require the
Companies or Sellers to cause the Companies to issue or sell any of its own corporate capital or any right which may otherwise
be converted or exchanged into equity in the Companies’ capital stock.

 

12.1.6. Financial
Statements, Books and Records. Exhibit 12.1.6 hereto contains complete copies of (i) audited financial statements of
the BPC Business (except for the intimate care business), and (ii) managerial financial statements comprising balance sheet and
profit and loss account regarding the intimate care business both as of December 31, 2014 (the “Financial Statements”).
The Financial Statements have been prepared in accordance with IFRS and accurately reflect the books and records and other financial
records of Sellers and the Companies, as applicable, and are true, correct and complete and precisely represent the financial position
and results of operations and changes in financial positions of the BPC Business. Except as otherwise provided in this Agreement,
the BPC Business shall not have on the Business Closing Date any off balance sheet obligations, undisclosed debt, obligation or
liability, whether due or maturing, disclosed or not, contingent, outstanding or of any other nature. The books and records of
Sellers and the Companies regarding the BPC Business are true, correct and complete in all material respects, and were prepared
in accordance with the Applicable Laws.

 

12.1.7. Absence of
Changes. Subject to Section 9.1.2, since January 1st, 2015, Sellers have conducted the BPC Business
only in the ordinary course of business and consistent with past operational practices of the Sellers and the Applicable Laws and,
after the implementation of the Corporate Reorganization, the BPC Business shall be conducted in the ordinary course, consistent
with past operational practices of the Sellers and the Applicable Law.

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12.1.8. Assets.

 

(i) Assets.
Except with respect to Real Estate, which representation is granted pursuant to item (ii) below, Sellers are the legitimate and
lawful owners or lessees of all assets (tangible or intangible) used in or held in use for the conduct of the BPC Business
(including all pieces of equipment and vehicles, excluding Inventory), which, except as described in Exhibit 12.1.8(i)(a),
are free and clear of any Liens and are sufficient to conduct the BPC Business as currently conducted, and are described in Exhibit 12.1.8(i)(b)
(the “BPC Assets”). The BPC Assets have been properly maintained by Sellers in good working order, suitable
for use as currently used and are operational, except for their natural wear and tear (with no material defects), are (and will
be until the Business Closing Date) in working order for the purposes for which they were intended to, in accordance with past
practices of the Sellers. The BPC Assets will be, until the Business Closing Date, owned by the Companies without Liens, for the
continuance of the BPC Business, as currently carried out by Hypermarcas and its Affiliates.

 

(ii) Real Estate.
Sellers and the Companies, as applicable, are the lawful possessors of the Leased Real Estate and/or the lawful owners of the Owned
Real Estate and, exclusively with respect to the Owned Real Estate, the Sellers, have good and marketable title of it.

 

(a) the Owned Real Estate
is free and clear of any Liens;

 

(b) both the Owned Real
Estate and Leased Real Estate are in good conditions of use, with exception to normal wear and tear through use and time that are
not material in nature or in cost;

 

(c) the existing use
of each Owned Real Estate and Leased Real Estate is a lawful permitted use, all consents and licenses which are strictly required
for such existing uses have been obtained and all Taxes and expenses due have been paid;

 

(d) there are no pending
or, to the Knowledge of Sellers, imminent lawsuits or administrative actions relating to the property or other matters which could
be reasonably expected to adversely affect the current use, occupancy, or value of the Owned Real Estate; and

 

(e) the Owned Real Estate
and the Leased Real Estate constitute all the real property necessary and sufficient to continue to operate the BPC Business substantially
in the same manner as conducted by the Sellers up to the date hereof.

 

(iii) Leases.
All the leases listed in Exhibit 12.1.8(iii) are valid, binding, and enforceable in accordance with their terms and
are in full force and effect. There are no outstanding material defaults by Sellers (and on the Business Closing Date there will
be no outstanding material defaults) thereunder (nor to the Knowledge of Sellers

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 are any of the other parties thereto in material
default). No written notice of any alleged breach of any of the terms of the leases has been served by any landlord.

 

12.1.9. Intellectual
Property. Hypermarcas is the sole lawful owner of the rights over the registered Intellectual Property listed in Exhibit 12.1.9(i),
which, together with other unregistered items, constitutes all Intellectual Property used exclusively in the conduction of the
BPC Business as currently conducted and, except as disclosed in Exhibit 12.1.9(ii):

 

(i) there is no restriction
on the disclosure, use or transfer of such Intellectual Property;

 

(ii) the Intellectual
Property is free and clear of any Liens;

 

(iii) Hypermarcas has
not granted any license, in any way, or similar rights to third parties, except its Affiliates, in relation to any of the Intellectual
Property and the use thereof by any third party, except its Affiliates, is not in any way authorized;

 

(iv) the Intellectual
Property is duly registered or, as applicable, all applicable registry requests have been filed with INPI, or other competent trademark
offices, in Brazil or abroad, and are in good standing with all fees and filings due as of the date hereof and the Trademarks Closing
Date;

 

(v) Hypermarcas has
not received notice of any claims (a) challenging the validity, effectiveness or ownership by Hypermarcas of the Intellectual
Property, and, to the Sellers’ Knowledge, no such proceeding is threatened, or (b) to the effect that the use, distribution,
licensing, sublicensing, sale or any other exercise of rights in any product, work, technology or process as now used or offered
or proposed for use, licensing, sublicensing or sale by the Seller infringes on or misappropriates any intellectual property or
other proprietary or personal right of any Person;

 

(vi) the software used
by or on behalf of Sellers and the Companies has been internally developed, purchased or licensed from third parties for the Sellers
and the Companies’ use. The Sellers and the Companies have been in compliance in all material respects with all of its software
license agreements and are not in breach of any software license; and

 

(vii) to the Knowledge
of Sellers, the Sellers and the Companies have not violated any third party Intellectual Property right, or ever infringed or misappropriated
any such right.

 

12.1.10. Environmental
Aspects. Sellers and the Companies, as applicable, hold the environmental permissions which are strictly required to operate
the BPC Business as it is currently operated by Sellers.

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(i) To the Knowledge
of Sellers, Sellers and the Companies are and have been in compliance with substantially all environmental Applicable Laws regarding
the BPC Business, have filed all material reports and other information required to be so filed by the Applicable Laws.

 

(ii) There are no material
liabilities of or relating to the BPC Business or, to the Knowledge of Sellers, of any of the former owners of the Real Estate
on any title whatsoever, arising under or relating to any environmental Applicable Law, and there are, to Sellers’ Knowledge,
no facts, conditions, situations or set of circumstances which could reasonably be expected to result in or be the basis for any
such material liability.

 

(iii) To the Knowledge
of Sellers, no Hazardous Substance has been discharged, disposed of, dumped, injected, pumped, deposited, spilled, leaked, emitted
or released at, from, on or under any Real Estate or any property leased or operated for purposes of the BPC Business.

 

12.1.11. Relevant
Contracts. There are no contracts in effect in which Sellers and the Companies are a party or subject to, with respect to the
BPC Business, which contain any obligations or reflects a transaction which would be deemed to be out of its ordinary course
of business. To the Knowledge of the Sellers, the Sellers and the Companies are not in default on any material obligation contained
in any such contracts. None of such agreements contain any limitations to the freedom of the Companies to compete in any line of
business or with any Person or in any area, or to the conduct of the BPC Business in any manner.

 

12.1.12. Financial
and Commercial Matters.

 

12.1.12.1. Warranties
and Merchandising. To the Knowledge of Sellers (a) there is no material outstanding warranty with respect to the products related
to the BPC Business; (b) there are no material agreements, contracts or commitments, other than labor agreements, which contain,
describe, or in any other manner binds Sellers or the Companies with respect to incentives for sales of Sellers’ products
or services related to the BPC Business, or to make payments to or for a customer, or make any other accommodation for a customer,
related to the BPC Business.

 

12.1.12.2. Customers
and Suppliers. Exhibit 12.1.12.2(a) hereto contains a true and complete list of Hypermarcas’ one hundred (100)
largest customers, related to the BPC Business (based on the amount of sales in Reais), which shall contain the amount in
Reais of such sales to each such customer for 2014. Exhibit 12.1.12.2(b) hereto contains a true and complete list of Sellers’
thirty (30) largest suppliers, related to the BPC Business (based on the amount of purchases in Reais).

 

12.1.13. Litigation.
There is no litigation, procedure, action, suit, proceeding, judicial or administrative measure, claim, or any assessment notice,
summons, judicial notification, investigation or arbitration pending before any agency, court or tribunal, foreign or domestic,
in which the Companies have been summoned, notified or officially

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 communicated with respect to the Companies. Any litigation, procedure,
action, suit, proceeding, judicial or administrative measure, claim, or any assessment notice, summons, judicial notification,
investigation or arbitration pending before any agency, court or tribunal that relates to the BPC Business or shall not be transferred
to the Companies and/or the Buyer in connection to the transactions contemplated herein and shall remain under the full and exclusive
liability of Sellers. Sellers are not aware of any facts or circumstances which could result in a private or government action,
suit, proceeding, claim, arbitration or investigation before any agency, court or tribunal, foreign or domestic against the Companies
that could have a negative effect to the BPC Business.

 

12.1.14. Tax Matters.
On the date hereof and on the Business Closing Date:

 

(i) The Companies,
and the Sellers in connection with the BPC Business, are and have been in compliance with all Tax Applicable Laws. The Companies,
and the Sellers in connection with the BPC Business, have performed all of its Tax obligations and ancillary obligations.

 

(ii) All the Taxes
due by the Companies, and the Sellers in connection with the BPC Business, were duly registered in the correspondent financial
statements of the Companies or the Sellers, as applicable, and, until the date hereof, were duly and shall be, on the Business
Closing Date, with respect to the Companies, and the Sellers in connection with the BPC Business, timely and fully paid. All Taxes
required to be withheld, collected or deposited by or against the Companies, and the Sellers in connection with the BPC Business,
have been timely withheld, collected or deposited, as appropriate, and to the extent required.

 

(iii) Until the date
hereof, all the federal, state and municipal statements of the Companies, and the Sellers in connection with the BPC Business,
were and on the Business Closing Date shall be, timely presented to the competent Governmental Authorities.

 

(iv) The Companies
are not bound to any sharing, indemnity, financing or Tax allocation with respect to the BPC Business.

 

(v) Sellers are in
full compliance with the projects, investments, minimum tax payments, obligations related to the adoption and maintenance of certain
business structure and other applications submitted by it to the competent Governmental Authorities in order to enjoy the Tax incentive
described in Exhibit 12.1.14(v).

 

(vi) There is no audit
relating to any Taxes with respect to the Companies, or the Sellers in connection with the BPC Business, currently in progress.

 

12.1.14.1. Sellers
and the Companies have not received or paid any amounts with respect to the BPC Business which have not been registered in their
respective accounting books, nor have they retained any amounts from third-parties which they should have, but failed to, deliver
to corresponding authorities.

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12.1.15. Labor Aspects.

 

(i) All of Business
Employees are duly registered as such in the proper books, in accordance with Applicable Laws.

 

(ii) Sellers and the
Companies fully comply with all of its obligations arising from the applicable labor and social security laws with respect to the
Business Employees.

 

(iii) Except as otherwise
provided in Exhibit 12.1.15(iii), Sellers and the Companies are not a party or is bound to any collective bargaining
or similar agreement entered into with any labor organization, or to labor rules or practices agreed upon with a labor organization
or employees’ association that is applicable to the Business Employees.

 

(iv) There is no claim,
legal or other proceeding proposed by any current or former employee of the Companies, that alleges breach of labor agreement or
of any Applicable Law.

 

(v) Exhibit 12.1.15(v)
contains a complete list of all plans or programs of benefits and/or incentives and/or support offered by Sellers and the Companies
to the Business Employees.

 

(vi) Sellers and the
Companies are in compliance with all Applicable Laws relating to the FGTS and to INSS regarding the Business Employees, and have
adequately funded and/or contributed to the FGTS and INSS of all the Business Employees.

 

12.1.16. Insurance.
Exhibit 12.1.16 contains a list of insurance policies which are currently in force, with respect to the BPC Business
and the BPC Assets. All of the premiums related to such insurance policies that were due until this date have been fully and timely
paid. All of the before mentioned policies shall be valid and remain in full force up to the Business Closing Date. There are no
ongoing claims under said insurance policies.

 

12.1.17. Guarantees
to Third Parties. Sellers and the Companies are not guarantors or sureties of, or otherwise are liable for, any Person’s
Liability, as referred to the BPC Business.

 

12.1.18. Permits and
Licenses. Sellers hold the permits, licenses, approvals and authorizations from Governmental Authorities which are strictly
required for Sellers to continue to conduct the BPC Business, as it is currently conducted by the Sellers. There is no material
breach or violation of any such permits, licenses, approvals and authorizations that could result in the loss of the same or that
could impact the BPC business. No proceeding to modify, suspend, terminate or otherwise limit such permits, licenses, approvals
and authorizations is pending.

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12.1.19. Brokerage
Fees and Commissions. There is no investment banker, broker, legal advisor or finder which has been retained by or its authorized
to act on behalf of the Companies who is or might be entitled to any fees, commission or payment from the Companies in connection
with the negotiation, preparation or execution of this Agreement or the consummation of the transactions contemplated herein.

 

12.1.20. Compliance
with Laws. Sellers, including, but not limited to, in relation to the BPC Business, and the Companies are in compliance, in
all material respects, with all Applicable Laws.

 

12.1.21. Anti-corruption;
Anti-bribery. Neither of Sellers (in connection with the Companies and/or with the BPC Business), nor, to the Knowledge of
Sellers, an officer, an employee or other agent of Person authorized to act on behalf of the Companies has:

 

(i) used or promised
to use, directly or indirectly, any funds for any unlawful contribution, gift, entertainment or other unlawful payment to a member
of a Governmental Authority, any foreign or domestic government official or employee, or any political party, party official, political
candidate or official of any public international organization;

 

(ii) made, paid, gave,
authorized (tacitly or otherwise), offered, accepted or promised to make any payment or gift to confer any financial or other advantage
or to transfer anything of value (whether directly, indirectly or through a third party) to or for the use or benefit of any Person,
including, for the avoidance of doubt, third parties, in all such cases with the intention of unlawfully influencing to obtain
or retain business or business advantage; or

 

(iii) made, authorized,
offered, accepted, tolerated or promised to make any bribe, facilitation payment, rebate, payoff, influence payment or kickback
or has taken any other actions that would violate: (a) any Applicable Laws that relate to bribery or corruption, including the
anti-corruption or anti-money laundering Applicable Laws of Brazil; or (b) the OECD Convention of Combating Bribery of Foreign
Public Officials in International Business Transactions, the United Nations Convention Against Corruption.

 

12.1.22. Compliance
with Antitrust Laws. Neither of Sellers (in connection with the Companies and/or with the BPC Business), nor, to the Knowledge
of Sellers, an officer, an employee or other agent of Person authorized to act on behalf of the Companies: (i) has ever been engaged
in any agreement or practice whose object or effect is (a) to prevent, restrain or distortion of competition; (b) to control the
relevant market of goods or services; (c) to arbitrarily increase profits; and (d) to abusively exercise a dominant position; or
(ii) has breached any provisions of Law No. 12,529, of November 30, 2011, CADE’s Internal Rules, as well as any other resolutions
and guidelines issued by CADE, including but not limited to the provisions set forth in Article 36, Articles 88 to 91 of Law No.
12,529, of November 30, 2011 and Articles 108 to 134 of CADE’s Internal Rules.

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12.1.23. Dividends.
There are no dividends, interest on net equity or any other remuneration due to Sellers which have been declared by the Companies,
and there are no payments or distributions in cash or in kind pending or to be made.

 

12.1.24. Product Liability
Claims. The Companies are not on the date of this Agreement subject to any known asserted claims for liability on account of
products sold on or prior to such date, which are not fully covered, including all costs of defense and investigation related to
such claims, by its or its vendors’ general liability insurance policies.

 

Section
13. Representations and Warranties of Buyer

 

13.1. Representations
and Warranties. Subject to the limitations contained therein, Buyer hereby represent and warrant the following to Sellers,
which representations and warranties are true, complete and accurate as of the date of the execution of this Agreement (except
the representation and warranties related to an specific date, which shall be true and accurate on the date to which they refer)
and shall be true, complete and accurate on the Business Closing Date.

 

13.1.1. Organization.
Buyer is duly incorporated, validly existing and in good standing under the laws of the Netherlands, respectively. Buyer is legally
qualified to conduct their activities as they are being conducted. Buyer have the power to purchase the Novita Shares and the Trademarks
under the terms and conditions provided herein, as well as to comply with all the obligations provided herein in connection thereto.

 

13.1.2. Authorization.
Buyer has full power and necessary authority to execute and deliver this Agreement and to perform the obligations contained in
this Agreement. Buyer have full capacity and do not depend on any additional authorization to execute this Agreement.

 

13.1.3. Valid and
Enforceable Agreement. This Agreement is executed by Buyer and is a valid and enforceable obligation of Buyer (assuming the
validity with respect to Sellers).

 

13.1.4. No Conflict;
Consents. The execution and delivery of this Agreement by Buyer and the completion of the operations described herein and therein
do not:

 

(i) breach or conflict
with (a) any organization or corporate document of Buyer, or with any corporate resolution of its respective shareholders or quotaholders,
or (b) any agreement, contract, commitment, obligation, understanding, arrangement or restriction of any kind to which any of the
Buyer is a party or is subject to, or by which its respective assets or properties are bound;

 

(ii) breach or conflict
with any Applicable Law to which Buyer or their respective assets or properties may be bound to or affected by; or

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(iii) require any consent,
approval or authorization of any Governmental Authority, except as provided for in Section 14.1.

 

13.1.5. Financial
Capacity. Buyer has the financial capacity necessary to accomplish the payments set forth in Section 4.1 above.

 

13.1.6. Antitrust
Matters. Buyer are not aware of any act, fact, event or circumstance that could either (i) result in the merger filing to CADE
of the transactions contemplated herein, as provided for in Section 14.1 below, not being classified under the fast track
procedure (“procedimento sumário”), or (ii) have a negative impact on the analysis of the transaction
contemplated herein by CADE.

 

Chapter
VI. Further Covenants of the Parties

 

Section
14. Other Covenants

 

14.1. Filing of
the Transaction with the Brazilian Antitrust Authority. The Parties expressly agree that they shall jointly notify the transactions
contemplated hereunder as a merger filing with CADE for review and approval, under the terms of Law No. 12,529, dated December
30, 2011. Buyer shall lead the work related to such filing, provided that all documents, petitions and requests or any other information
(including the holding of meetings with CADE) to be provided shall be previously approved by Sellers, and Sellers shall cooperate
with Buyer in order to provide the necessary information for obtaining the approval from CADE.

 

14.1.1. The
approval request shall be filed by the Parties with CADE no later than five (5) Business Days from the execution of this Agreement.

 

14.1.2. The
costs, fees and expenses related to the filing of the transaction contemplated herein with CADE shall be borne by Buyer, provided,
however, that (i) any penalties possibly imposed by CADE shall be borne by the Party that caused such penalty; and (ii) each Party,
at its own expense, shall be entitled to appoint its own counsel for following-up on the process with CADE on its behalf.

 

14.1.3. The
Buyer shall undertake to bear the risks related to CADE’s approval, including in case of approval with restrictions.

 

14.2. Actions by
Sellers. The Sellers agree to, immediately after the Trademarks Closing Date, take all actions for purposes of: (i) the completion
of the Corporate Reorganization described in Section 8.2.1, (ii) the request for the licenses and permits described in Section
11.1, and (iii) the obtainment of the ICMS Incentive described in Section 8.2.7.

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14.2.1. For purposes
of this Section 14.2, Seller shall provide periodic updates (every thirty (30) days) to Buyer on the current status of the
actions taken in connection with Section 14.2.

 

14.3. IPI Lawsuit.
After the Trademarks Closing Date and upon request of Buyer, Hypermarcas agrees to cooperate with the Companies to file the appropriate
IPI Lawsuit providing all reasonably requested information and assisting the Companies with any other reasonable requests related
to it.

 

Section
15. Non-Compete; Non-Solicit

 

15.1. Non-Compete.
For a period of five (5) years as of the Business Closing Date, exclusively with respect to the products of the BPC Business, Sellers,
directly or indirectly, may not in the Brazilian territory (i) operate, engage, own, manage, join, control (including, without
limitation, through or as a result of, financing or equity participation), or participate in the ownership, management, operation
or control of, or serve as a consultant, advisor, agent, representative of or to, any business related to the beauty and personal
care market that competes, directly or indirectly, with the BPC Business; and (ii) create, acquire, lease, sublease or in any other
way develop new trademarks that are similar to or that, in any manner, compete with the Trademarks in the BPC Business.

 

15.1.1. Non-Compete
Penalty. In the event Sellers fail to comply with their non-compete obligation established on Section 15.1 above, they
shall, without prejudice to other remedies available by law, be subject to the payment to Buyer of a non-compensatory fine in the
amount of thirty million Reais (R$30.000.000,00), in order to repair part of the damages that may be incurred by Buyer, which will
be entitled to seek for additional compensation.

 

15.1.2. The Parties hereby
acknowledge and agree that the provisions of this Section 15.1 shall apply exclusively to Sellers and their Affiliates. Therefore,
in case the Excluded Products are transferred, in total or in part, to any third parties, at any time, including during the five-year
term set forth in Section 15.1, the non-compete restrictions set forth herein shall not apply to any such third parties.

 

15.2. Sellers’
Non-Solicit. For a period of thirty (30) months as of the Business Closing Date, Sellers shall not, directly or indirectly,
persuade or attempt to attract any person employed and/or contracted by Sellers or by the Companies (operating within the BPC Business)
to leave his/her job or to end his/her contractual relationship, for any reason or purpose, and from employing, in a contractual,
temporary or not, salary, statutory or autonomous basis, directly or indirectly, such persons, or assist third parties in employing
such persons in any way or supply funds or any other type of support to the activity or business of third parties related to the
BPC Business (provided, however, that the provisions of this Section 15.2 are not applicable to past employees of Sellers
which had been dismissed by Sellers or by any of its Affiliates on or prior to September 30, 2015).

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15.2.1. Non-Solicit
Exception. The limitations provided above shall not prohibit the Sellers from hiring any person who has been terminated by
the Buyer or any of their Affiliates prior to commencement of employment discussions between the Sellers and such officer, director
or employee.

 

15.3. Buyer’s
Non-Solicit. For a period of thirty (30) months as of the Business Closing Date, Buyer shall not, directly or indirectly, persuade
or attempt to attract any person employed and/or contracted by Sellers or any of their Affiliates not related to the BPC Business,
provided that such Person is currently not primarily involved in the BPC Business or was not primarily involved with the BPC Business
during the past twelve (12) months, to leave his/her job or to end his/her contractual relationship, for any reason or purpose,
and from employing, in a contractual, temporary or not, salary, statutory or autonomous basis, directly or indirectly, such persons,
or assist third parties in employing such persons in any way or supply funds or any other type of support to the activity or business
of third parties.

 

15.3.1. Non-Solicit
Exception. The limitations provided above shall not prohibit the Buyer from hiring any person who (i) initiates discussions
regarding such employment without any direct or indirect solicitation by the Buyer, (ii) responds to any public advertisement placed
by the Buyer, or (iii) has been terminated by the Sellers or any of their Affiliates prior to commencement of employment discussions
between the Buyer and such officer, director or employee. The Parties agree that the exceptions set forth in this Section 15.3.1(i)
and (ii) shall not be applicable for any person listed in Schedule 15.3.1.

 

15.4. Non-Solicit
Penalty. In the event any of the Parties fails to comply with their non-solicit obligation established on Sections 15.2
and 15.3 above, the non-compliant Party shall be subject to the payment to the other Party of a non-compensatory fine for
each individual employed and/or contracted, in the amount equivalent to one million Reais (R$1.000.000,00).

 

Chapter
VII. Indemnity; Management of Complaints

 

Section
16. Indemnity

 

16.1. Buyer’s
Indemnity. Subject to the provisions contained in this Section 16, and to the time limitations set forth in Section
16.3.1, Sellers jointly undertake to indemnify and hold harmless, Buyer, the Companies, and their respective Affiliates to
which the BPC Business may have been contributed as well as any of their respective managers, shareholders/quotaholders, representatives,
directors, officers, employees, Affiliates or agents, and/or any of their successors and assignees, from and against any and all
Losses arising from or relating to:

 

(i) any obligation, liability,
fact, act, event, activity of the Companies or relating to the BPC Business, ensuing from acts, facts or omissions entailed,
verified or incurred prior and up to the Business Closing Date, either disclosed or undisclosed, known or unknown, whether provisioned
or not in the Financial Statements;

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(ii) any breach, misrepresentation
or inaccuracy of any representation and warranty made by Sellers in this Agreement; or

 

(iii) any breach, arrears
or default of any of the obligations or covenants of any of Sellers in this Agreement; or

 

(iv) any obligation,
liability, fact, act, event, activity (whether provisioned or not) arising, directly or indirectly, from any liabilities of Sellers
and their Affiliates not related to the BPC Business, which may be ascribed to the Companies or Buyer or their respective
Affiliates by succession for any reason or in any way; or

 

(v) any obligation,
liability, fact, act, event, activity (whether provisioned or not) in respect of the BPC Business arising, directly or indirectly,
as a result of the implementation of any or all of the steps of the transfer of the BPC Business to the Companies, including any
Losses related to the Tax and labor procedures and ancillary documents.

 

16.1.1. Tax Indemnification.
Without limiting the foregoing and for the avoidance of doubt: (i) the Sellers shall indemnify and hold harmless the Buyer from
and against any Taxes which relate to the Pre-Closing Tax Period that (a) become due and have to be paid by the Companies in connection
with the BPC Business; and (b) are assessed by any competent Tax authorities against the Companies; (ii) if Buyer or the Companies
pay any Taxes pursuant to Section 16.1.1(i) below, the Buyer shall notify the Sellers about those payments and Sellers shall
settle the claim of refund to the Buyer within twenty (20) Business Days after such notification; and (iii) the tax indemnification
obligation provided in this Section shall be valid for six (6) years, as of the Business Closing Date.

 

16.1.1.1 Straddle
Period. In the case of any Straddle Period, the amount of Taxes allocable to the portion of the Pre-Closing Tax Period shall
be deemed to be:

 

(i) In the case of Taxes
imposed on a periodic basis (such as real or personal property Taxes), the amount of such Taxes for the Straddle Period (or, in
the case of such Taxes determined on an arrears basis, the amount of such Taxes for the immediately preceding period) multiplied
by a fraction, the numerator of which is the number of calendar days in the Pre-Closing Tax Period and the denominator of which
is the number of calendar days of the Straddle Period, and

 

(ii) In the case of Taxes
not described in item (a) above (such as franchise Taxes, Taxes that are based upon or related to income or receipts, based upon
occupancy or imposed in connection with any sale or other transfer or assignment of property (real or personal, tangible or intangible)),
the amount of any such Taxes shall be determined as if such taxable period ended as of the close of business on the Business Closing
Date.

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16.1.2. Tax Obligations.
Sellers shall be solely responsible for the payment of any and all Taxes, including for the preparation of the Tax returns and
ancillary obligations, which are based on the activities of the BPC Business due by the Companies, until the Business Closing Date.

 

16.1.2.1. Tax Return
Copies. Sellers undertake to prepare at their own costs and deliver to Buyer the applicable Tax returns relating exclusively
to the Companies and due in connection with the BPC Business, for its review and file. Furthermore, Sellers shall be fully responsible
for all Tax returns of the Companies relating to the Pre-Closing Tax Period.

 

16.2. Seller’s
Indemnity. Subject to the provisions contained in this Section 16, Buyer, with respect to the transactions herein
contemplated, shall indemnify and hold harmless Sellers from any and all Losses suffered by Sellers, arising out of or resulting
from:

 

(i) any obligation, liability,
fact, act, event, activity relating to the BPC Business, ensuing from acts, facts or omissions entailed, verified or incurred
from and after the Business Closing Date;

 

(ii) any breach, misrepresentation
or inaccuracy of any representation and warranty made by Buyer in this Agreement; or

 

(iii) any breach, arrears
or default of any of the obligations or covenants of Buyer in this Agreement.

 

16.3. Limitations.
The indemnifying obligations set forth in Sections 16.1 and 16.2 above shall be subject to the following terms and
limitations:

 

16.3.1. The indemnification
undertakings on both Sellers and Buyer contemplated in Sections 16.1 and 16.2 herein are granted for a term
of six (6) years, as of the Business Closing Date, except for those (a) of a labor nature, which shall remain valid and effective
for a term of two (2) years; (b) of a civil nature, which shall remain valid and effective for a term of three (3) years; provided,
however, that in case such Loss results from a Third Party Claim, then a judicial or administrative procedure or assessment shall
have been initiated by such third party, within the terms set forth in this Section 16.3.1; or the Indemnifying Party shall
have received a written notice, in accordance with Section 18.1 below, with respect to any Third Party Claim assessed
by the competent Governmental Authority or claimed (judicially or extra-judicially) in writing by the respective third party, within
the terms provided in this Section 16.3.1, provided further that the indemnification obligations of Sellers (w) pursuant
to a breach, misrepresentation or inaccuracy of the representations under Section 12.1.10; (x) pursuant to Section 16.1(iv)
and 16.1(v); (y) for misrepresentation or inaccuracy of any of the Fundamental Representations; and (z) of fraud or willful
misconduct of Sellers shall not be subject to any time limitation.

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16.3.2. Furthermore:

 

(i) Sellers shall not
be liable to indemnify any Indemnified Party in respect of any Loss (and such Loss shall not be taken into account in determining
whether the Tipping Basket (as defined below) has been met) unless the Losses exceed fifty thousand Reais (R$ 50,000.00) (the
“De Minimis”), it being understood if such amount is exceeded in respect of a Loss, Sellers shall pay the full
amount of such Loss. For the purpose of calculating whether the De Minimis amount is exceeded, the amounts of individual Losses
arising from substantially the same facts or circumstances shall be aggregated; and

 

(ii) Sellers shall
not be liable to indemnify any Indemnified Party in respect of any Losses unless the Losses, when taken together with all other
Losses claimed, exceed two million Reais (R$ 2,000,000.00) (the “Tipping Basket”), at which time Sellers
shall indemnify the Indemnified Parties for the entirety of their aggregate Losses and not just the amount exceeding the Tipping
Basket.

 

16.3.2.1. The indemnification
limitations provided in Section 16.3.2 shall not apply to any Losses arising out of (a) Section 16.1(iv) and 16.1(v);
(b) misrepresentation or inaccuracy of any of the Fundamental Representations; (c) or willful misconduct of Sellers and (d)
Direct Claims.

 

16.4. Taxes on Payments.
Any sum payable under this Section 16 shall be paid free and clear of any Tax deduction or withholding whatsoever,
except as may be required by law. If any deduction or withholding is required by law, or if an Indemnified Party is subject to
additional taxation as a result from such payment, the Indemnifying Party shall increase the amount of the indemnity payment by
such additional amount as it is necessary to ensure that the net amount received and retained by the Indemnified Party (after taking
into account all deductions, tax on gross revenues, withholding, additional taxation in respect of its receipt or entitlement to
such payment) is equal to the amount which it would have received and retained if the payment in question has not been subject
to any deductions or withholdings or additional taxation. In the same sense, if the payment of any amounts arisen from a Loss by
the Indemnified Party results in a reduction of any taxation, which the Indemnified Party is subject to, the Indemnifying Party
shall deduct the amount of indemnity to be paid equivalent to the benefits accrued by the Indemnified Party regarding such payment.

 

16.5 Insurance and
recoveries. The Indemnified Party shall use commercially reasonable efforts to seek full recovery in respect of any Losses
indemnifiable hereunder against any other potential sources of recovery, including under all insurance policies covering any Loss
against insurers to the same extent as they would if such Loss were not subject to indemnification hereunder. In the event that
an insurance or other recovery is made by any Indemnified Party with respect to any Loss for which any such Person has been indemnified
hereunder, then a refund equal to the aggregate amount of the recovery shall be promptly delivered to the Indemnifying Party.

 

16.6. Subrogation.
The Indemnifying Party shall be subrogated to all rights of the Indemnified Party in respect of any Loss borne by the Indemnifying
Party; the 

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Indemnified Party shall fully cooperate in timely manner with the Indemnifying Party in order to seek recovery from
any third party for any Loss borne by the Indemnifying Party. Buyer shall, and shall cause the Companies to, and Sellers also shall,
endeavor their best efforts to bring indemnity claims against any third party who has an indemnification obligation to either of
them with respect to any Loss and to diligently pursue such claims until finally adjudicated.

 

16.7. Exclusive
remedy. The indemnification pursuant to this Section 16 shall be the sole and exclusive remedy of the Parties, from
and after the Trademarks Closing Date and the Business Closing Date, as the case may be, for any breach of any representation,
warranty, covenant or undertaking made by the Parties in this Agreement. Any further statutory claims for Losses, damages, rescission
or seeking reduction of the Purchase Price deriving from any breach of a representation, warranty, covenant or undertaking are
expressly excluded, provided that this Section 16.7 shall not restrict or limit the right of a Party to seek specific performance
of any of the obligations provided for in this Agreement or file any injunction or preliminary remedy provided for under the applicable
law.

 

Section
17. Management of Complaints

 

17.1. Notice of
Loss. Except in the event related to a Loss resulting from a Third Party Claim, pursuant to Section 17.2 below
(“Direct Claim”), any Party which requests an indemnity pursuant to Section 16 above (“Indemnified
Party”) shall present to the other Party (“Indemnifying Party”) a notice of any issue which has given
or shall give origin to an indemnifiable right pursuant to this Agreement, as soon as practicable after the date on which it becomes
aware of the act or fact that gives or shall give origin to the indemnity right herein foreseen, mentioning the Loss amount, its
respective calculation method and containing a reference to the provisions of this Agreement with respect to which this indemnifiable
right is demanded or demandable.

 

17.1.1. Indemnity
Payment. The payment or reimbursement of any indemnity pursuant to Section 17.1 above shall be made within fifteen
(15) days as of the receipt by the Indemnifying Party of the notice sent by the Indemnified Party, requesting the Loss payment
or reimbursement, in the event that the Loss has been incurred. If the Indemnifying Party does not agree with the request made
by the Indemnified Party, the issue shall be subject to arbitration pursuant to Section 29 and if the request is confirmed
by such decision, then the Indemnifying Party shall effect the payment or reimbursement within fifteen (15) days after being notified
of such decision.

 

17.2. Losses Related
to Third Parties Claims. The Indemnified Party shall notify the Indemnifying Party about any third party claim or demand, judicial
or not (“Third Party Claim”) that the Indemnified Party has verified that gave or shall give origin to any indemnity
obligation pursuant to this Agreement as soon as practicable (except that, in the event that such Third Party Claim is object of
an administrative proceeding or lawsuit, such notice shall be delivered until the date equivalent to a third of the legal deadline
for answer), including the estimated amount of such claim or demand (“Notice”), and the Indemnifying Party shall
have the right to assume the defense, at its own expenses, of any such Third Party

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Party shall have the right to assume the
defense, at its own expenses, of any such Third Party Claim, to be handled by a lawyer chosen by the Indemnifying Party, who shall
be acceptable to the Indemnified Party, which acceptance shall not be unreasonably withheld.

 

17.2.1. Indemnifying
Party Defense. If the Indemnifying Party elects to conduct the defense of any Third Party Claim, it shall handle such defense
with diligence and care, and with the objective of no further losses being incurred. In this case, the Indemnified Party shall
collaborate, in the manner which is reasonably required, in this defense or suit.

 

17.2.2. Settlement. The
Indemnified Party shall not enter into any settlement, commitment or termination of the Third Party Claim, without the previous
written approval of the Indemnifying Party. However, the Indemnifying Party shall have the obligation to agree with any settlement,
commitment or termination of such Third Party Claim which the Indemnified Party shall recommend and which, according to its terms,
exempts the Indemnifying Party from the payment of the total amount of any Loss related to such Third Party Claim; provided, however
that the Indemnifying Party shall not be obliged to agree with the pronouncing of any decision or with the execution of any settlement
that (i) foresees an injunction or any other non-monetary measure that affects the Indemnifying Party or any Affiliate of the
Indemnifying Party, or (ii) does not include, as an unconditional term, the release of all Losses referred to such Third Party
Claim by its plaintiff or claimer in benefit of the Party which is subject to the respective Third Party Claim.

 

17.2.3. Lack
of Notice. The lack of notice of the Indemnified Party to the Indemnifying Party, pursuant to Section 17.2 above,
shall not prejudice the right of the Indemnified Party to receive the indemnity payment, except if such lack of notice prejudices
the Indemnifying Party’s rights or ability to present a defense.

 

Chapter
VIII. General Provisions

 

Section
18. Notices

 

18.1. Notices. All
notices, communications and/or notifications to be made under this Agreement shall be made in writing and shall be deemed properly
given to the Parties, provided that they are made by means of personal delivery (including delivery by commercial services such
as messengers and airfreight forwarders), by electronic means (such as electronic mail) or by mail sent registered or certified
mail, postage prepaid, at the following addresses and e-mail addresses (or to such other addresses or e-mail address designed
in writing by a Party to the other informing the change of address):

 

	 	If to Sellers:
	 	Hypermarcas S.A.
	 	Attn.:      Mr. Claudio Bergamo dos Santos, CEO
	 	                Mr. Martim Prado Mattos, CFO
	 	Av. Magalhães de Castro, 4800, 24o andar, Conjunto 241
	 	Edifício Continental Tower - Bairro Cidade Jardim

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São Paulo, SP, CEP
05502-001

E-mail:
notificações@hypermarcas.com.br

 

With
a copy to, which shall not constitute notice under this Agreement:

  Souza,
Cescon, Barrieu & Flesch Advogados

  Attn.: Fabíola
C.L. Cammarota de Abreu

Rua
Funchal, 418, 11o. andar

  São
Paulo, SP, CEP 04551-060

  E-mail:
Fabiola.cammarota@souzacescon.com.br

 

 If
to Buyer:

 Jab
Cosmetics BV

 Attn.:
Joachim Creus

 E-mail:
joachim.creus@jabse.eu

 City
of Haarlem, at Oudeweg, 147

ZIP
Code 2031, CC

The
Netherlands

 

 With
a copy to, which shall not constitute notice under this Agreement:

  Barbosa
Mussnich Aragão Advogados

  Attn.: Paulo
Aragão

  Av.
Presidente Juscelino Kubitscheck, 1455, 10o. andar

  São
Paulo, SP, CEP 04543-011

  E-mail:
pca@bmalaw.com.br

 

 18.1.1. Changes. Any
Party may by notice given in accordance with Section 18.1 designate another address or Person for the receipt of the notices
hereunder.

 

Section
19. Expenses

 

19.1. Expenses. Except
as otherwise provided for herein, each Party shall bear the payment of its own fees and expenses (including, without limitation,
the fees and expenses of its attorneys, accountants, financial advisors and other professionals) incurred with the preparation
and execution of this Agreement and/or the transactions contemplated herein.

 

19.2. Without
prejudice of the foregoing, each party shall be responsible for and shall pay all expenses involved in notarization, authentication
and legalization of the signatures of any of the representatives of the Parties on any of the transfer documents relating to the
transfer of the Trademarks or the registered Intellectual Property. Buyer will bear all expenses relating to the recording of
any such Transfer documents relating to the transfer of the Trademarks or the registered Intellectual Property with any Governmental
Authorities as may be necessary or appropriate.

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Section
20. Best Efforts, Additional Assurance

 

20.1. Best
Efforts. Subject to the terms and conditions contained herein, each of the Parties hereby agree to endeavor its best efforts
to take, or cause to be taken, all reasonable required or advisable actions and measures in accordance with the Applicable Law
to consummate and implement the transactions contemplated herein.

 

Section
21. Approvals and Consents

 

21.1. Approvals. Without
prejudice to the remaining provisions of this Agreement, the Parties shall cooperate, to the required extent, to present all the
notices and therefore obtain, as soon as reasonably possible, all the approvals, consents, authorizations and waivers from governmental
departments or federal, state and municipal agencies, or any other party that is required or deemed necessary or beneficial for
the consummation of the transactions contemplated herein.

 

Section
22. Entire Agreement

 

22.1. Entire
Agreement. This Agreement, together with all its Exhibits (all hereby incorporated by reference), contain the entire agreement
and understanding of the Parties with respect to subject that is its object.

 

Section
23. Waiver; Amendment

 

23.1. Waiver. No
waiver, termination, or disregard of this Agreement, or of any of the terms and provisions contained herein, shall bind the Parties
unless it is made in writing. No waiver by any of the Parties to any term or provision of this Agreement or any violation to this
Agreement shall affect the right of such Party to later demand the compliance with such term or provision, or to exercise any
right or remediation in case of any other violation, whether or not similar.

 

23.2. Amendment. This
Agreement cannot be modified or amended, except through a written instrument executed by all the Parties.

 

Section
24. Assignment and Transfer

 

24.1. Assignment. Neither
this Agreement, nor the rights or obligations hereunder may be assigned by any of the Parties without the previous consent, in
writing, of the other Party.

 

24.2. Special
Authorization to Buyer. Notwithstanding the provisions of Section 24.1 above, the Sellers hereby agree that Buyer
may assign and transfer its rights and obligations to Coty Inc., who, in its turn, once such assignment is effected, may assign
and transfer its rights and obligation to an Affiliate Controlled by Coty Inc., which may be a

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Brazilian Controlled Affiliate, provided,
however, that (i) Buyer and/or Coty Inc., as applicable, shall deliver to Sellers a prior written notice, confirming the assignment
and transfer of such rights and obligations and, in the case of Coty Inc., the Affiliate to which the rights and obligations will
be transferred; (ii) Coty Inc. and/or the Affiliate to which the rights and obligations will be transferred, as the case may be,
shall unconditionally adhere to the terms and conditions set forth in this Agreement and any other documents related hereto; and
(iii) Buyer shall not be released from its obligations as main obligor hereunder, including with respect to the payment of the
Purchase Price, and shall continue to be responsible for the full compliance with any such obligations.

 

Section
25. Severability of the Provisions

 

25.1. Severability. If
any provision of this Agreement shall be held void, voidable, invalid or inoperative, no other provision of this Agreement shall
be affected as a consequence thereof, and, accordingly, the remaining provisions of this Agreement shall remain in full force
and effect, as if such void, voidable, invalid or inoperative provision had not been included herein. If any provision of this
Agreement, or the enforcement of any provision hereof, with respect to any Person or entity or circumstance, is void or unenforceable,
then an appropriate and equitable provision shall replace it, with a view towards having this Agreement implemented to the maximum
extent possible for it to be valid and enforceable, in accordance with the intent and objective of such void or unenforceable
provision.

 

Section
26. Binding Effect

 

26.1. Binding
Effect. This Agreement is binding among the Parties and shall inure to the benefit of the Parties and their respective
successors and authorized assignees.

 

Section
27. Public Announcements

 

27.1. Announcements. The
announcement of the transactions contemplated herein may be made by each of the Parties in accordance with Exhibit 27.1
hereto, provided that this Section 27.1 shall not be construed as a limitation to the compliance, by Sellers, of any disclosure
obligations it may have under Brazilian law or of any disclosure obligations that Buyer may have under the Laws of the Netherlands.

 

Section
28. Confidentiality

 

28.1. Confidentiality.
 Each of the Parties undertake to keep the confidentiality of all information, data, reports and other registries (“Information”)
related to the Parties, the Companies and their Affiliates, this Agreement, its existence, terms and conditions and the content
of any discussions relating to this Agreement and its subject matters, and not to reveal to any third parties without the other
Party’s prior written approval, except for any of its respective agents, employees, accountants, counsel, consultants, advisors,
Affiliates, officers, directors, shareholders or quotaholders (“Representatives”),

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    	57

    	

    

provided that such Party obtain from its
Representatives confidentiality commitments in terms similar or equivalent to those provided for herein.

 

28.1.1. Exceptions
to Confidentiality Obligations. The confidentiality obligations set forth in Section 28.1 above shall not apply
with respect to and to the extent that: (i) the Parties have previously agreed in writing with a disclosure or use of such information;
(ii) such information was already disclosed to a Party or to other Persons not bound by a duty of confidentiality or such information
becomes publicly available through no fault of such Party or Persons; or (iii) such information is disclosed pursuant to any requirement
of Law, stock exchange’s regulations to which the Parties are subject and/or upon a request from a Governmental Authority
or stock exchange, provided that (a) the disclosing Party shall promptly notify the other Party in writing, with a reasonable
period of time in advance of disclosure (to the extent that it is possible), with regard to any such requirement received; and
(b) the disclosure is restricted to the minimum confidential information necessary to comply with such requirement.

 

28.1.2. Buyer’s
Business. Without prejudice of the provisions of Section 28.1 above, the Parties acknowledge and agree that such
confidentiality obligation shall in no way limit the Buyer’s rights with respect to the BPC Business following the consummation
of the transactions contemplated herein.

 

Section
29. Arbitration

 

29.1. Amicable
Solution. In the event any and all controversies, disputes or questions of any nature arises out of or in connects with
this Agreement including its existence, validity, enforceability, performance, interpretation, compliance, breach, termination
or otherwise, arise between the Parties, as well as its successors at any title (“Dispute”), the Parties will
endeavor its best efforts to resolve any dispute in an amicable way, by negotiations, in good faith, within a period of thirty
(30) days counted from the date a written notice sent from one Party is received by the other. In case the Parties fail to reach
an agreement within the deadline prescribed above the Dispute shall be resolved by arbitration under the terms of this Section
29.

 

29.2. Arbitration. The
arbitration shall be administered by the CAM-CCBC-Center for Arbitration and Mediation of the Brazil-Canada Chamber of Commerce
(“CAM-CCBC”), according to the Arbitration Rules of the CAM-CCBC in effect on the date of filling of the request
for arbitration (“Arbitration Rules”) and with Law 9,307/96.

 

29.3. Arbitration
Language. The arbitration shall be conducted in the English language and it shall take place in the City of São
Paulo, State of São Paulo, where the arbitral award shall be rendered. The Parties hereby agree that evidence may be produced
in Portuguese, without the need for translation.

 

29.4. Governing
law. The arbitration shall be governed by the laws of the Federative Republic of Brazil. The Parties hereby expressly exclude
any possibility of

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judgment based on equity. The decisions
rendered by the arbitrators shall be final and binding upon the Parties and their successors at any title.

 

29.5. Arbitral
Tribunal. The Arbitral Tribunal shall be composed by three (3) arbitrators (“Arbitral Tribunal”), one
of whom shall be appointed by the claimant(s), and one by the respondent(s). The third arbitrator, whom shall serve as the President
of the arbitral tribunal, shall be appointed, in agreement, by the arbitrators appointed by the parties (“Co-Arbitrators”),
within fifteen (15) days from the appointment of the second arbitrator, according to the Arbitration Rules. If the parties to
the arbitration fail to appoint an arbitrator, or if the Co-Arbitrators fail to agree on the appointment of the third arbitrator
as per the Arbitration Rules, the appointments shall be made by the President of CAM-CCBC, as per the Arbitration Rules.

 

29.6. Expenses. The
expenses of the arbitral proceedings, including, but not limited, to the administrative costs of the Chamber, arbitrator’s
fees and independent expert’s fees, when applicable, shall be borne by each party as per the Arbitration Rules. Upon issuance
of the arbitral award, the arbitral tribunal may determine that the winning party be reimbursed by the losing party for these
expenses proportionally.

 

29.7. Provisional
Measures. Before the constitution of the Arbitral Tribunal, any of the Parties might request provisional and/or urgent
measures to the Courts. Such request shall not be construed as a waiver of the rights under this arbitration clause or a waiver
of arbitration. After its constitution, all provisional and/or urgent measures shall be requested directly to the Arbitral Tribunal,
and the Arbitral Tribunal may sustain, revoke or modify the order granted by the Courts. Provisional and urgent measures, as well
as actions to enforce an arbitral award, when applicable, may be requested, upon the option of the interested party, (i) to the
Courts with jurisdiction over the parties and/or their assets; or (ii) to the Courts of São Paulo, state of São
Paulo, Brazil.

 

29.8. Confidentiality. The
Parties agree that the arbitration shall be kept strictly confidential, and its elements (including, without limitation, the allegations
of the parties, third-party statements, evidence, expert opinions and any other documents presented or exchanged during the course
of the arbitral proceedings as well as any decisions rendered by the arbitral tribunal) may only be revealed to the Arbitral Tribunal,
the parties, their lawyers and any other person necessary to the conduction of the arbitration, except if and to the extent that
its disclosure might be required to be implemented by a Party, as a consequence of legal duty.

 

Section
30. Governing Law

 

30.1. Law. This
Agreement shall be governed by and construed in accordance with the laws of the Federative Republic of Brazil.

 

And, being therefore
agreed, the Parties execute this Shares and Assets Sale and Purchase Agreement, in five (5) counterparts, of equal content and
form, in the presence of the two (2) witnesses identified below.

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    	59

    	

    

São Paulo, November 2nd, 2015

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    	60

    	

    

Signature page of JAB Cosmetics BV of
the Shares and Trademarks Sale and Purchase Agreement for the Acquisition of Novita Distribuição, Armazenamento
e Transportes S.A. and Savoy Indústria de Cosméticos S.A.

 

JAB Cosmetics BV

 

	/s/ Markus Hopmann	 	/s/ Joachim Creus	 
	Markus Hopmann	 	Joachim Creus	 
	 	 	 	 
	Witnesses:	 	 	 

 

	1.	/s/ Olivier Lefebvre	 	2. 	/s/ Stefanie de Geest	 
	 	Name:  Olivier Lefebvre	 	 	Name:  Stefanie de Geest	 

    	 

    	

    

Signature page of Hypermarcas S.A. Cosmed
Indústria de Cosméticos e Medicamentos S.A., Novita Distribuição, Armazenamento e Transporte S.A.
and Savoy Indústria de Cosméticos S.A. of the Shares and Trademarks Sale and Purchase Agreement for the Acquisition
of Novita Distribuição, Armazenamento e Transportes S.A. and Savoy Indústria de Cosméticos S.A.

 

Hypermarcas
S.A.

 

	/s/ Claudio Bergamo dos Santos	 	/s/ Martim Prado Mattos	 
	Claudio Bergamo dos Santos	 	Martim Prado Mattos	 
	Chief Executive Officer	 	Chief Financial Officer	 
	 	 	 	 
	Cosmed Indústria
    de Cosméticos e Medicamentos S.A.
	 	 	 	 
	/s/ Martim Prado Mattos	 	/s/ Carlos Roberto Scorsi	 
	Martim Prado Mattos	 	Carlos Roberto Scorsi	 
	Administrative-Financial Officer	 	Officer	 
	 	 	 	 
	Novita Distribuição,
    Armazenamento e Transportes S.A.
	 	 	 	 
	/s/ Martim Prado Mattos	 	/s/ Juliana Aguinaga Damião Salem	 
	Martim Prado Mattos	 	Juliana Aguinaga Damião Salem	 
	Administrative-Financial Officer	 	Officer	 
	 	 	 	 
	Savoy Indústria
    de Cosméticos S.A.
	 	 	 	 
	/s/ Martim Prado Mattos	 	/s/ Carlos Roberto Scorsi	 
	Martim Prado Mattos	 	Carlos Roberto Scorsi	 
	Administrative-Financial Officer	 	Officer	 
	 	 	 	 
	Witnesses:	 	 	 
	 	 	 	 

	1.	/s/ Gabriela Elien Luz	 	2.	/s/ Bruna Regina S. Lins	 
	 	Name:	 	 	Name:	 
	 	RG: 44.084.075-2	 	 	RG: 49 281 1925	 
	 	CPF: 357.576.778-56	 	 	CPF:  418 531 898 05	 

    	 

    	

    

Table
of Exhibits

To
the

Shares
and Trademarks Sale and Purchase Agreement

 

	Exhibit
    I	BPC
    Business Products
	Exhibit
    A	Excluded
    Assets
	Exhibit
    B	Lease
    Agreements
	Exhibit
    C	Leased
    Real Estate
	Exhibit
    D	Owned
    Real Estate
	Exhibit
    E	Trademark
    Assignment Agreement
	Exhibit
    F	Trademarks
	Exhibit
    G	Trademarks
    License Agreement
	Exhibit
    3.4	Products
    in which the Lucretin Trademark is Used and which will not be transferred
	Exhibit
    4.2	Base
    Working Capital 
	Exhibit
    4.3	Assumptions
    for the Special Review of the Accounts of the Working Capital by KPMG
	Exhibit
    4.3.3	List
    of Independent Account Firms
	Exhibit
    7.3(ii)	Bank
    Account for the Payment of the Trademarks Purchase Price and the Novita Shares Purchase Price
	Exhibit
    7.4	Power
    of Attorney to be granted by Hypermarcas for the management of the Trademarks between the Trademarks Closing and the Business
    Closing
	Exhibit
    8.2.1	Corporate
    Reorganization
	Exhibit
    8.2.6	Business
    Employees
	Exhibit
    8.2.9(B)	Licenses,
    registrations, approvals or permits to be filed with the respective Governmental Authority
	Exhibit
    9.1(viii)	Business
    Employees who cannot be terminated without justa causa
	Exhibit
    10.3(ii)	Draft
    Minutes of the General Shareholders’ Meeting of Novita, to be held on the Business Closing Date
	Exhibit
    10.3(iii)	Draft
    Resignation Letter to be delivered by Sellers’ representatives on the Business Closing Date
	Exhibit
    10.3(iv)	Draft
    Minutes of the General Shareholders’ Meeting of Savoy, to be held on the Business Closing Date
	Exhibit
    10.3(vi)	Draft
    Public Power of Attorney to be granted to the representatives of Buyer on the Closing Date
	Exhibit
    10.3(vii)	Draft
    Closing Memo
	Exhibit
    11.2(i)	Real
    estate property to be dismembered 
	Exhibit
    11.2(ii)	Steps
    for the complete regularization of all competent real estate registries in order to reflect the built areas within such estate
    properties

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	Exhibit
    12.1.4(i)	List
    of breaches organizational documents and contracts resulting from the execution of the SPA
	Exhibit
    12.1.4(iii)	List
    of Liens to the Assets resulting from the Execution of the SPA
	Exhibit
    12.1.4(iv)	List
    of Required Governmental Approvals
	Exhibit
    12.1.6	Financial
    Statements
	Exhibit
    12.1.8(i)(a)	Assets
    subject to Liens
	Exhibit
    12.1.8(i)(b)	BPC
    Assets
	Exhibit
    12.1.8(iii)	List
    of Lease Agreements
	Exhibit
    12.1.9(i)	List
    of Intellectual Property Owned by Hypermarcas
	Exhibit
    12.1.9(ii)	List
    of Exceptions to Intellectual Property
	Exhibit
    12.1.12.2(a)	List
    of 100 largest customers of the BPC Business
	Exhibit
    12.1.12.2(b)	List
    of 30 largest suppliers
	Exhibit
    12.1.15(iii)	Collective
    Bargaining Agreements
	Exhibit
    12.1.15(v)	Benefit
    Programs
	Exhibit
    12.1.16	Insurance
    Policies
	Exhibit
    15.3.1	List
    of employees to whom the exceptions set forth in Section 15.3.1(i) shall not be applicable
	Exhibit
    27.1	Form
    of Announcements

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