Document:

License and Supply Agreement

 Exhibit 10.53 
  
 Portions of this exhibit marked [*] are omitted and 
 are requested to be treated confidentially 
  
 Dated 7 December 2005 
  

  
 Norgine B.V. 
  
 – and – 
  
 Salix Pharmaceuticals, Inc. 
  

  
 LICENSE AND SUPPLY AGREEMENT 
  

  
 

 
  
 CityPoint, One Ropemaker Street |
London EC2Y 9AW 
 Tel: +44 20 7920 4000 | Fax: +44 20 7496 8500 
 www.mofo.com 

 Table of Contents 
  

					
	 	  	 	  	Page

	 1.
	  	DEFINITIONS	  	4
			
	 2.
	  	MANAGEMENT OF THE RELATIONSHIP	  	20
			
	 3.
	  	IMPLEMENTATION OF THE LIFECYCLE MANAGEMENT PLAN	  	25
			
	 4.
	  	LICENSEE DILIGENCE ON LAUNCH AND FOR LIFECYCLE MANAGEMENT PLAN	  	26
			
	 5.
	  	LICENSOR’S OBLIGATIONS	  	26
			
	 6.
	  	COMMERCIALISATION	  	27
			
	 7.
	  	ADDITIONAL CLINICAL TRIALS	  	33
			
	 8.
	  	LICENSOR’S SUPPLY OBLIGATIONS	  	34
			
	 9.
	  	FORECASTS, ORDERS, DELIVERY AND ACCEPTANCE	  	37
			
	 10.
	  	LICENCE FEES, PRICE AND PAYMENT TERMS	  	41
			
	 11.
	  	MANUFACTURE	  	47
			
	 12.
	  	REGULATORY AND OTHER MATTERS	  	50
			
	 13.
	  	EXCLUSIVITY	  	51
			
	 14.
	  	TRADE MARKS AND DOMAIN NAMES	  	52
			
	 15.
	  	INTELLECTUAL PROPERTY - INITIAL FILINGS AND OWNERSHIP	  	54
			
	 16.
	  	INTELLECTUAL PROPERTY - LICENCES	  	55
			
	 17.
	  	IP – MAINTENANCE, PROSECUTION AND DEFENCE	  	56
			
	 18.
	  	CONFIDENTIALITY AND NON-DISCLOSURE	  	59
			
	 19.
	  	WARRANTIES AND UNDERTAKINGS	  	63
			
	 20.
	  	INDEMNIFICATION AND INSURANCE	  	63
			
	 21.
	  	TERMINATION	  	68
			
	 22.
	  	CONSEQUENCES OF TERMINATION	  	69
			
	 23.
	  	FORCE MAJEURE	  	71
			
	 24.
	  	CHANGE OF CONTROL OF LICENSEE	  	72
			
	 25.
	  	ASSIGNMENT	  	72
			
	 26.
	  	GOVERNING LAW AND JURISDICTION	  	72
			
	 27.
	  	NOTICES	  	73
			
	 28.
	  	RELATIONSHIP OF THE PARTIES	  	73
			
	 29.
	  	ENTIRE AGREEMENT AND SEVERABILITY	  	74
			
	 30.
	  	ENGLISH LANGUAGE	  	74
			
	 31.
	  	AMENDMENT	  	75

  

 -i- 

 Table of Contents 
 (CONTINUED) 
  

					
	 	  	 	  	PAGE

	32.	  	WAIVER AND NON-EXCLUSION OF REMEDIES	  	75
			
	33.	  	NO BENEFIT TO THIRD PARTIES	  	75
			
	34.	  	FURTHER ASSURANCE	  	75
			
	35.	  	EXPENSES	  	75
			
	36.	  	COUNTERPARTS	  	76

  

 -ii- 

 THIS LICENSE AND SUPPLY AGREEMENT is made the 7th of December 2005 
  
 BETWEEN: 
  

	(1)	NORGINE B.V., a limited liability company under the laws of the Netherlands, with its principal offices at Hogehilweg 7, 1101 CA Amsterdam ZO, The Netherlands
(“Licensor”); and 

  

	(2)	SALIX PHARMACEUTICALS, INC., a company incorporated in USA whose principal place of business is 1700 Perimeter Park Drive, Morrisville, NC 27560-8404, USA
(“Licensee”). 

  
 WHEREAS: 
  

	(a)	Licensor is engaged in, among other things, the research, development, manufacture and commercialisation of drug products in Europe and elsewhere in the world.

  

	(b)	Licensee is engaged in, among other things, the development and commercialisation of drug products in the Territory (as hereafter defined). 

  

	(c)	Licensor is the owner of certain intellectual property and related rights covering the Product (as hereafter defined). 

  

	(d)	Licensee wishes to commercialise the Product in the Territory. 

  

	(e)	Licensor is willing to grant to Licensee a licence under Licensor’s intellectual property and related rights in the Territory to Commercialise (as hereafter defined) Product in
the Territory and is also willing to supply Licensee with its requirements of Product for these purposes and Licensee desires to acquire such licence to Commercialise and to enter into arrangements for the manufacture and supply of Product upon the
terms and conditions below. 

  

 3 

 IT IS NOW AGREED AS FOLLOWS: 
  

	1.	DEFINITIONS 

  

	1.1	In this Agreement the following definitions shall apply unless the context requires otherwise: 

  
 “Affiliate” - any company, partnership or other business entity which controls, is controlled by or is
under common control with either Party. For the purposes of this definition only, “control” means the direct or indirect ownership of more than fifty percent (50%) of the issued shares or other voting rights of the subject entity or,
possession, directly or indirectly, of the power to direct or cause the direction of management and policies of such entity. 
  
 “Agreement” - this document including any and all schedules, appendices and other addenda to it as may be added and/or amended from time
to time in accordance with the provisions of this document (including any Lifecycle Management Plan, as agreed in accordance with Clause 2). 
  
 “Allocable Overhead” – an amount added to an item of cost to reflect indirect costs of manufacture incurred by Licensor or for its
account including overhead attributable to the manufacturing operation of its information systems, human relations, payroll, purchasing, supervisory and other internal groups together with its occupancy costs any of which it normally allocates to
its product costs based on a method consistently applied. 
  
 “ANDA” - an Abbreviated New Drug Application as defined in the U.S. Federal Food, Drug, and Cosmetic Act and the regulations promulgated thereunder (21 U.S.C. s355) which references the NDA. 
  
 “ANDA Date” - the date of approval by the FDA of an ANDA
permitting commercial marketing of a product competitive to the Product in the Territory by a Third Party. 
  
 “Applicable Laws” - all applicable laws, rules, regulations, directives and guidelines (including any amendments, extensions or
replacements thereto) (i) in the Territory that apply to the development or Commercialisation of the Product in the Territory; and (ii) in or outside the Territory that apply to the performance of either Party’s obligations under this
Agreement. 
  

 4 

 “Business Day” - 9.00am to 5.00pm local time on a day other than a Saturday, Sunday or
bank or other public holiday in the United States of America or the United Kingdom. 
  
 “Certificate of Analysis (C of A)” or “Certificate of Compliance (C of C)” - documents issued for finished materials, raw materials, and/or Product(s) of that name as described in detail in
the current Guide to Good Manufacturing Practice for Medicinal Products published by the European Commission or its equivalent in the Territory. 
  
 “Change of Control” - the transfer or issue of shares in the capital of an entity which when completed, would result in any shareholder
(together with any person acting in concert with that shareholder (within the meaning given in the City Code on Takeovers and Mergers as in force at the Effective Date)) holding more than fifty percent (50%) of the total number of shares in the
capital of such entity. 
  
 “Clinical Study” -
any Clinical Trial and/or other study on Product carried out by or on behalf of Licensee post NDA Approval Date, including, without limitation, any Phase IV Clinical Trial, any study carried out in order to obtain a label extension or other new NDA
for the Product in the Territory and any study carried out with the intention that the results will be used for marketing purposes or as part of the Lifecycle Management Plan, post Initial NDA. 
  
 “Clinical Trial” – any of a Phase IIb Clinical Trial,
Phase III Clinical Trial or Phase IV Clinical Trial. 
  
 “CMC Data” - that part of an NDA or Regulatory Approval containing the data and other Know How relating to the chemistry and manufacturing controls and other manufacturing processes for the Product, including relating to
the Packaging and Labelling. 
  
 “Commercialisation”, “Commercialising”, or “Commercialise” – all activities relating to the import, advertising, promotion and other marketing, pricing and reimbursement, Detailing, distribution,
storage, handling, offering for sale and selling, customer service and support, post Marketing Authorisation. 
  

 5 

 “Commercialisation Plan” – the plan for the Commercialisation of the Product in the
Territory to be generated by Licensee under the provisions of Clause 6.1, which shall include the Marketing Plan and Budget. 
  
 “Commercially Reasonable Efforts” – efforts and resources commonly used by pharmaceutical companies for a product owned by such a
company or to which it has rights, taking into account the market potential and the patent and other proprietary position of the relevant product. 
  
 “Competent Authority” - any national or local agency, authority, department, inspectorate, minister, ministry official, parliament or
public or statutory person (whether autonomous or not) of any government of any country having jurisdiction over either (i) any of the activities contemplated by this Agreement or (ii) either of the Parties. 
  
 “Confidential Information” – any Know How disclosed
either directly or indirectly by one Party to the other Party and pertinent to the subject matter of this Agreement. In the case of (i) obligations on Licensee in relation to Licensor Confidential Information, Confidential Information of the
Licensor shall include Licensor IP; and (ii) obligations on both Licensee and Licensor, Confidential Information shall include trade secrets and confidential information relating to the business affairs or finances of one Party supplied or
otherwise made available to the other Party in relation to the performance of this Agreement. 
  
 “Control” - with respect to any Know How, Patent Rights or Trade Mark, possession of the right, whether directly or indirectly, and whether by ownership, licence or otherwise, to assign, or grant a
licence, sub-licence or other right to or under, such Know How, Patent or other Trade Mark as provided for herein without violating the terms of any agreement or other arrangement with any Third Party. 
  
 “Cost of Manufacturing” - Licensor’s cost of
manufacturing Product in finished product form for use in Clinical Studies or as free samples which shall comprise the direct cost of manufacturing the Product, as determined by Licensor in accordance 

  

 6 

 
with IAS accounting principles consistently applied, limited to direct labour and material costs and Product quality assurance/control costs and including
Allocable Overhead. 
  
 “Costs” – Actual
out-of-pocket costs and expenses. 
  
 “Cover”
(including the variations such as “Covered”, “Coverage” or “Covering”) - making, using or Commercialisation of a given product in a Commercialised form in a country that would infringe a Valid Claim
of a Patent Right in such country in the absence of a licence under such Patent Right. The determination of whether the product is so Covered by a particular Patent Right shall be made on a country-by-country basis. 
  
 “Data Package” – has the meaning set out in Clause
7.5. 
  
 “Detail” (including such variations as
“Detailing”) - face to face contact between a field sales force representative and a medical professional with prescribing authority for the purpose of discussing scientific or medical information about a pharmaceutical product(s).

  
 “Detailing Commitment” – the Detailing
effort specified in Schedule 1 to be effected by the Licensee in the Initial Period. 
  
 “Development Costs” – the direct cost and expenses paid and/or payable to a Third Party for a Clinical Trial the subject of Clause 7.2. 
  
 “Disclosing Party” - the Party which discloses Confidential
Information of it or any Third Party to the other Party. 
  
 “Documents” – analyses, books, CD-ROM, charts, comments, computations, designs, discs, diskettes, files, graphs, ledgers, notebooks, paper, photographs, plans, records, recordings, reports, research notes, tapes and
any other graphic or written data or other media on which Know How is permanently stored and other computer information storage means and advertising and promotional materials of any nature whatsoever including preparatory materials for the same.

  
 “Effective Date” – the date of
execution of this Agreement. 
  

 7 

 “Expert Determination” – the procedure set out in Schedule 2. 
  
 “ex US Licensee” – any Third Party (if any) to whom
Licensor licenses the Product so that that person may develop and/or Commercialise the Product in any part of the world outside the Territory. 
  
 “FDA” - the United States Food and Drug Administration or any successor agency thereto. 
  
 “First Trademark” - the registered trademarks Controlled by
the Licensor or its Affiliates as set out in Schedule 3. 
  
 “Forecasts” – has the meaning given to it in Clause 9.1. 
  
 “Force Majeure” - in relation to either Party, any event or circumstance which is beyond the reasonable control of that Party which event or circumstance that Party could not reasonably be expected to
have taken into account at the Effective Date and which results in or causes the failure of that Party to perform any or all of its obligations under this Agreement, including acts of God, lightning, fire, storm, flood, earthquake, accumulation of
snow or ice, lack of water arising from weather or environmental problems, strike, lockout or other industrial or student disturbance, act of the public enemy, war declared or undeclared, threat of war, terrorist act, blockade, revolution, riot,
insurrection, civil commotion, public demonstration, sabotage, act of vandalism, prevention from or hindrance in obtaining in any way materials, energy or other supplies, explosion, fault or failure of plant or machinery (which could not have been
prevented by Good Industry Practice), or Legal Requirement governing either Party, provided that lack of funds shall not be interpreted as a cause beyond the reasonable control of that Party. 
  
 “GAAP” – generally accepted accounting principles in
effect in the United States of America from time to time. 
  
 “Good Clinical Practice” or “GCP” - clinical practice as set out in: 
  

	 	(a)	Directive 2001/20/EC and Directive 2001/83/EC as well as ICH-GCP and any other guidelines for good clinical practice for trials on medicinal products in the European Community as
amended and applicable from time to time; and 

  

 8 

	 	(b)	US Code of Federal Regulations Title 21, Parts 50 (Protection of Human Subjects), 56 (Institutional Review Boards) and 312 (Investigational New Drug Applications), as may be amended
from time to time; and 

  

	 	(c)	the Declaration of Helsinki as last amended at the 52nd World Medical Association in October 2000 and any further amendments thereto. 

  
 “Good Industry Practice” – in relation to any
undertaking and any circumstance, the exercise of that degree of skill, diligence, prudence and foresight which would reasonably and ordinarily be expected from a skilled and experienced person engaged in the same type of undertaking under the same
or similar circumstances. 
  
 “Good Manufacturing
Practice” or “GMP” - manufacture in accordance with: 
  

	 	(a)	the current principles and guidelines of good manufacturing practice for medicinal products for human use and “substantial conformity with good manufacturing requirements”
(as such phrase is used in Clause 802(f)(1) of the U.S. Federal Food, Drug, and Cosmetic Act, as such Act may be amended from time to time); and 

  

	 	(b)	US Code of Federal Regulations, Title 21, Part 210 (Current Food Manufacturing Practice in Manufacturing, Processing, Packaging or Holding of Drugs), Part 211 (Current Food
Manufacturing Practice for Finished Pharmaceuticals). 

  
 “Half Year” - each period of six months ending on 30 June and 31 December in each Year. 
  
 “IAS” - International Accounting Standards established by the International Accounting Standards Board. 
  
 “ICH-GCP” – the ICH Harmonised Tripartite
Guideline for Good Clinical Practice (CPMP/ICH/135/95). 
  

 9 

 “IND” - an investigational new drug application filed with the FDA prior to beginning
clinical trials in humans or any comparable application filed with the Regulatory Authority of a country other than the United States prior to beginning trials in humans in that country. 
  
 “Indemnification Claim Notice” – has the meaning set out in Clause 20.3. 
  
 “Indication”- the indication set out in Schedule 4.

  
 “Initial NDA” – the NDA filed by
the Licensor under the terms of Clause 5 for the Product in the Territory. 
  
 “Initial Period” – the period of twenty four months after Launch. 
  
 “Insolvency Event” - in relation to either Party, means any one of the following: 
  

	 	(a)	a notice shall have been issued to convene a meeting for the purpose of passing a resolution to wind up that Party, or such a resolution shall have been passed other than a
resolution for the solvent reconstruction or reorganisation of that Party; or 

  

	 	(b)	a resolution shall have been passed by that Party’s directors to seek a winding up or a petition for a winding up shall have been presented against that Party which, in the
case of a petition presented against a Party, shall not have been appealed within seven (7) days of having been lodged or such an order shall have been made and shall not have been dismissed within thirty (30) days thereafter; or

  

	 	(c)	a receiver, administrative receiver, receiver and manager, interim receiver, custodian, sequestrator or similar officer is appointed in respect of that Party or an encumbrancer
takes steps to enforce or enforces its security against such Party which shall not have been dismissed by a court of competent jurisdiction within thirty (30) days thereafter; or 

  

	 	(d)	 (i) a resolution shall have been passed by that Party or that Party’s directors to make an application for an administration order or to 

  

 10 

	 	 
appoint an administrator, or (ii) an application for an administration order shall have been made to the court or a notice of appointment of an
administrator shall have been filed at the court in respect of that Party, which in the case of such an application made to the court or notice filed with the court, shall not have been appealed within seven (7) days of having been made or
filed or such an order or appointment shall have been dismissed within thirty (30) days thereafter; or 

  

	 	(e)	a proposal for a voluntary arrangement shall have been made in relation to that Party under Part I Insolvency Act 1986; or 

  

	 	(f)	a step or event shall have been taken or arisen outside the United Kingdom, in the jurisdiction in which a Party shall be incorporated or trade, in respect of such Party, which is
similar or analogous to any of the steps or events listed at (a) to (e) above (including in the case of Licensee under the US Bankruptcy Code (including a filing under Chapter 11 proceedings) or other relevant laws of the USA which, in the
case of a filing made against Licensee, shall not have been appealed within 7 days of having been lodged or such an order shall have been made and dismissed within thirty (30) days thereafter; or 

  

	 	(g)	that Party proposes or makes any general assignment, composition or arrangement with or for the benefit of all or some of that Party’s creditors or makes or suspends or
threatens to suspend making payments to all or some of that Party’s creditors or the Party submits to any similar type of voluntary arrangement with its creditors. 

  
 “Invoice Income” - shall be as defined in Clause 10.4. 
  
 “Invoice Price” - the price per Unit of Product invoiced by
Licensor in each Year, as defined in Clause 10.4. 
  
 “Joint Steering Committee” or “JSC” - the committee to be established pursuant to Clause 2.1. 
  
 “Know How” - technical and other information which is not in the public domain, including information comprising or relating to concepts,
discoveries, data, designs, 

  

 11 

 
formulae, ideas, inventions, methods, models, assays, research plans, procedures, designs for experiments and tests and results of experimentation and
testing (including results of research or development), processes (including manufacturing processes, specifications and techniques), laboratory records, chemical, pharmacological, toxicological, clinical, analytical and quality control data, trial
data, case report forms, data analyses, reports, manufacturing data or summaries, information contained in submissions to and information from ethical committees and regulatory authorities and including sales and marketing information and
information relating to distributors, wholesalers and customers to extent that it is not in public domain. Know How includes Documents containing Know How, including but not limited to any rights including trade secrets, copyright, database or
design rights protecting such Know How. The fact that an item is known to the public shall not be taken to preclude the possibility that a compilation including the item, and/or a development relating to the item, is not known to the public.

  
 “Label”, “Labelled” or
“Labelling” - all labels and other written, printed or graphic matter upon (i) the Product or any container or wrapper utilized with the Product, or (ii) any written material accompanying the Product, including, without
limitation, package inserts and patient information leaflets. 
  
 “Launch” - the first invoiced commercial sale of the Product by Licensee, its Affiliates or distributors in the Territory after the NDA Approval Date. 
  
 “Launch Commitment” – the amount of Costs to be incurred in the Initial Period by Licensee, directly
or indirectly, in relation to (i) educational promotional activities; (ii) advertising the Product in the Territory; (iii) marketing, selling and promoting the Product in the Territory; and (iv) public relations in relation to
Product in the Territory as set out in Schedule 5. 
  
 “Legal Requirement” - any present or future law, regulation, directive, instruction, direction or rule of any Competent Authority or Regulatory Authority including any amendment, extension or replacement thereof which is
from time to time in force. 
  
 “Licensee IP”
– all Know How and Patent Rights relating to the Product or its Commercialisation or the Lifecycle Management Plan discovered, generated, conceived, reduced to practice or developed by Licensee during the Term. 
  

 12 

 “Licensor IP” - the Licensor Patent Rights and Licensor Know How including any
improvements thereto and the Trademark. 
  
 “Licensor
Know How” - Know How Controlled by Licensor or its Affiliates at the Effective Date or during the term of this Agreement which relates to the Product and which is reasonably required for the Licensee to undertake Commercialisation in the
Territory and otherwise to exercise its rights under this Agreement. 
  
 “Licensor Patent Rights” - the Patent Rights Covering the Product set out in Schedule 6 and all other Patent Rights Controlled by Licensor or its Affiliates during the term of this Agreement which Cover the development or
Commercialisation of the Product in the Territory or otherwise where a licence is reasonably required to enable the Licensee to exercise its rights under this Agreement. 
  
 “Lifecycle Management Plan” - the plan for further development of the Product in the Territory post-Launch
covering Clinical Studies (including Phase IV Clinical Trials) for Label extensions or new NDAs, an outline of which will be submitted by the Licensee to the JSC within 90 days of the Effective Date and the detail of which will be determined by the
JSC under the provisions of Clause 2.2.2 from time to time. 
  
 “List Price” - the price for a Unit of Product in the Territory published by the Licensee in a given Year. 
  
 “Loan Note” – the loan note in the form of Schedule 7 evidencing the Loan under Clause 10.9. 
  
 “Losses” - any and all liabilities, damages, losses and
expenses, to the extent that the same are recoverable at law (including reasonable lawyers’ fees and disbursements). In calculating “Losses”, the duty to mitigate on the part of the Party suffering the Losses shall be taken into
account. 
  
 “Manufacture Date” – the date
on which Licensee acquires an immediate license to manufacture under the terms of Clause 11.3. 
  
 “Manufacturing Period” – the period in which Licensor shall continue to supply Product to Licensee under the terms of this
Agreement, as determined under Clause 11. 
  

 13 

 “Margin” – until the start of the first Quarter after the Quarter in which the sum
due under Clause 10.11.1 is paid, [*] per cent ([*]%) and from the start of the first Quarter after the sum due under Clause 10.11.1 is paid and thereafter, [*] per cent ([*]%). For clarity the
[*] per cent ([*]%) Margin shall apply to Product delivered after the start of the first Quarter following the date on which the sum due under Clause 10.11.1 has been paid. 
  
 “Marketing Authorisation” - any approval required from a
Regulatory Authority to market and sell a pharmaceutical product in any relevant territory including any form of pricing or reimbursement approval. 
  
 “Marketing Plan and Budget” – the plan to be submitted as part of the Commercialisation Plan which is to be updated annually.

  
 “NDA” - a New Drug Application as defined in
the U.S. Federal Food, Drug, and Cosmetic Act and the regulations promulgated thereunder (21 U.S.C. s355) filed with the FDA. 
  
 “NDA Approval” - the approval by the FDA of the Initial NDA, under the terms of Clause 5.2. 
  
 “NDA Approval Date” – the date of the NDA Approval.

  
 “Net Sales” - the gross amounts received by
Licensee, its Affiliates or its or their distributors or sub-licensees for all sales of Product less the following items to the extent that they are paid or actually allowed and are shown on the relevant invoice: 
  

	 	(a)	trade, quantity, and cash discounts or rebates actually allowed and taken and any other adjustments, provided that such discounts or rebates are not applied disproportionately to
the Product as compared with other similar products of the selling entity, including, without limitation, those granted on account of price adjustments, billing errors and recall returns. For clarity this includes trade, quantity and cash discounts
or rebates actually allowed and taken by buying groups, healthcare insurance companies, pharmacy benefit management companies, health maintenance organisations or other institutions or health care organisations but does not include any discount or
rebate for rejected goods or damaged goods; 

  

 14 
 * Confidential treatment requested; certain information 
 omitted and filed separately with the SEC. 

	 	(b)	any tax, tariff, customs duties, excise or other duties or other governmental charge (other than an income tax) levied on the sale, transportation or delivery of the Product;

  

	 	(c)	freight, shipment and insurance costs incurred transporting Product to a Third Party purchaser; and 

  

	 	(d)	payments or rebates reasonably and customarily paid in connection with sales of Product to any governmental or regulatory authority in respect of any state or federal Medicare,
Medicaid or similar programs; 

  
 The transfer of
Product by Licensee or one of its Affiliates to another Affiliate or to a distributor or sub-licensee shall not be considered a sale. In such cases Net Sales shall be determined based on the invoiced sale price by the Affiliate, distributor or
sub-licensee to the first Third Party trade purchaser, less the deductions allowed under this Clause. 
  
 Upon the sale or other disposal of Product other than in a bona fide arms length transaction exclusively for money or upon any use of Product for the
purposes which do not result in a disposal of that Product in consideration of sales revenue customary in the country of sale, such other sale, disposal or use shall be deemed to constitute a sale at the relevant open market price in that country in
which the sale, other disposal or use occurs, or, if that price is not ascertainable, a reasonable price assessed on an arm’s length basis for the goods or services provided in exchange for the supply. Disposal of Product for, or use of
Product, in Clinical Studies or as free samples to be in quantities common in the industry for this sort of Product shall not give rise to any deemed sale under this Clause. 
  
 Such amounts shall be determined from the books and records of Licensee, its Affiliates, distributors and sub-licensees
maintained in accordance with GAAP, consistently applied. 
  

 15 

 “New Trademark” – any trademarks Controlled by the Licensor or its Affiliates used
in connection with Commercialisation of the Product by Licensee in the Territory during the term of this Agreement or thereafter under the terms of Clause 14. 
  

“Package”, “Packaged” and “Packaging” - all primary and secondary packaging components, including, without
limitation, cartons, partitions, shippers, or any other like matter used in packaging the Product for supply to the Licensee in the Territory during the Manufacturing Period. 
  
 “Party or Parties” – Licensor and/or Licensee. 
  
 “Patent Rights” - patent applications and patents, utility
certificates, improvement patents and models and certificates of addition and all foreign counterparts of them in all countries, including any divisional applications and patents, refilings, renewals, re-examinations, continuations,
continuations-in-part, patents of addition, extensions, (including patent term extensions) reissues, substitutions, confirmations, registrations, revalidations, pipeline and administrative protections and additions, and any equivalents of the
foregoing in any and all countries of or to any of them, as well as any supplementary protection certificates and equivalent protection rights in respect of any of them. 
  
 “Phase IIb Clinical Trial” – a human clinical trial where a product is tested in a limited number of
sick and possibly also healthy patients for the purpose of establishing dose ranging and/or further indication of efficacy of Product. 
  
 “Phase III Clinical Trial” – an adequate and well controlled, multi centre, human clinical trial to be conducted in a number of
patients estimated to be sufficient to establish efficacy and safety of a Product in the medical indication being investigated and at a standard suitable to obtain a Marketing Authorisation (excluding dose ranging studies). 
  
 “Phase IV Clinical Trial” – any trial carried out post
NDA Approval. 
  
 “Product” - the pharmaceutical
product developed by the Licensor, currently known as Moviprep, the active ingredients in which are set out in Schedule 8 as described in the Initial NDA, finished, Packaged and Labelled in the manner specified in the Initial NDA and including line
extensions thereto such as new flavours and any new indications therefor and any new NDAs therefor. 
  

 16 

 “Projected Sales” – the number of Units of Product forecast to be sold by the
Licensee or its Affiliates to Third Parties in any Year of this Agreement commencing on the second anniversary of the commencement of first full Year of this Agreement post-Launch, which number is to be agreed between Parties at JSC under Clause 2
and failing which the provisions of Clause 2.1.3 shall apply. Provided that, if Launch is in the first Quarter of a Year the balance of that Year shall count as the first full Year post-Launch for the purpose of this definition and if Launch occurs
after the end of the first Quarter of a Year the first Year shall be the next full Year to start after Launch. 
  
 “Purchase Order” – has the meaning set out in Clause 9.2. 
  
 “Purchase Price” – the price of supply of a Unit of Product by Licensor to Licensee which shall be the
Margin on the Sales Price. 
  
 “Quarter” - each
period of three months ending on 31 March, 30 June, 30 September or 31 December, and “Quarterly” shall be construed accordingly. 
  
 “Recipient Party” - the Party which receives Confidential Information of the Disclosing Party. 

 
 “Regulatory Authority” - any national, supranational,
regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity including the FDA, in any country involved in the granting of a Marketing Authorisation. 
  
 “Royalty” - the royalty payable on Net Sales by the
Licensee under the terms of Clauses 10.6 and 10.7. 
  
 “Royalty Term” – the period in which the Royalty shall continue to be payable under the terms of Clause 10. 
  
 “Safety and Quality Agreement” - the agreement to be made between Licensor, Licensee and, if required by Licensee such of Licensor’s
Affiliates who shall be 

  

 17 

 
manufacturing Product on behalf of Licensor, within ninety (90) days of the Effective Date as specified in Clause 6.2 concerning safety and quality
matters and such other technical matters as may reasonably be required by the Parties and in accordance with the applicable Regulatory Authorities, in connection with the supply and release of the Product in the Territory. 
  
 “Sales Price” - the average sales price for a Unit of
Product in the Territory in a given Half Year calculated by dividing (i) the aggregate Net Sales in that Half Year by (ii) the number of Units of Product comprised in such aggregate Net Sales. 
  
 “Salix Affiliate” - the Licensee, its holding company,
Salix Pharmaceuticals, Ltd, a Delaware Corporation and any subsidiary of Licensee or its holding company and for this purpose subsidiary shall be as defined in S.736 Companies Act 1985. 
  
 “Specifications” - the specifications for Product set forth in the Initial NDA. 
  
 “Supply Income” - shall be as defined in Clause 10.3.

  
 “Territory” – the United States of
America, its territories and possessions. 
  
 “Third
Party” – a party other than either of the Parties or any of their respective Affiliates. 
  
 “Trademark” – the First Trademark and any New Trademark. 
  
 “Trademark Royalty” - the royalty payable on Net Sales by the Licensee under the terms of Clause 10.6.

  
 “Trademark Term” – the period in which
the Trademark Royalty shall continue to be payable under the terms of Clause 10.7. 
  
 “Trade Dress” - those aspects of the Packaging of the Product involving the design, get up and trade dress thereof which are not required or dictated by the Initial NDA, including the style of
printing; 
  
 “Unit” – a single packet of
Product suitable for one (1) adult bowel preparation. 
  

 18 

 “Valid Claim” – either: 
  

	 	(a)	a claim of an issued and unexpired patent included within Patent Rights, which has not been held permanently revoked, unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction, unappealable or un-appealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise; or 

  

	 	(b)	a claim of a pending patent application included within Patent Rights which claim was filed and is being prosecuted in good faith and has not been abandoned or finally disallowed
without the possibility of appeal or refiling of the application, provided that no more than seven (7) years have passed since the earliest priority date for such application. 

  
 “Visicol” – the pharmaceutical product approved for
purgative use in connection with gastrointestinal conditions, marketed by Licensee under the trade name Visicol in the Territory as at the Effective Date and any reformulation or modification thereof and any similar product based or derived from
such Visicol product. 
  
 “Year” – any
period of twelve (12) months commencing on 1 January and ending on 31 December. 
  

	1.2	In this Agreement: 

  

	 	1.2.1	unless the context otherwise requires all references to a particular Clause, paragraph or Schedule shall be a reference to that Clause, paragraph or Schedule, in or to this
Agreement as it may be amended from time to time pursuant to this Agreement; 

  

	 	1.2.2	the table of contents and headings are inserted for convenience only and shall not affect the interpretation of any provision of this Agreement; 

  

	 	1.2.3	unless the contrary intention appears words importing the masculine gender shall include the feminine and vice versa and words in the singular include the plural and vice versa;

  

 19 

	 	1.2.4	unless the contrary intention appears words denoting persons shall include any individual, partnership, company, corporation, joint venture, trust, association, organisation or
other entity, in each case whether or not having separate legal personality; 

  

	 	1.2.5	reference to the words “include” or “including” are to be construed without the limitation to the generality of the preceding words; and

  

	 	1.2.6	reference to any statute or regulation includes any modification or re-enactment of that statute or regulation. 

  
 2. MANAGEMENT OF THE RELATIONSHIP 
  

	2.1	Joint Steering Committee 

  
 With effect from the Effective Date the Parties shall establish and run a Joint Steering Committee (“JSC”) to manage and oversee the
Initial NDA and issues arising prior to the NDA Approval Date and implementation of the Lifecycle Management Plan and Commercialisation as follows: 
  

	 	2.1.1	The JSC shall comprise six (6) persons (“Members”) and Licensor and Licensee respectively shall be entitled to appoint three (3) Members, to remove any
Member appointed by it and to appoint any person to fill a vacancy arising from the removal or retirement of such Member appointed by it. 

  

	 	2.1.2	Licensee and Licensor respectively shall each notify the other of any change in the identities of their Members. Each Party shall use reasonable endeavours to keep an appropriate
level of continuity in representation. Members may be represented at any meeting by another person designated by the absent Member. There will be a Chairperson who will alternate between one of the Licensor Members and one of the Licensee Members at
each meeting. 

  

	 	2.1.3	Conclusions and decisions of the JSC shall be made by unanimous agreement of the Members wherever possible and shall be minuted by or on behalf of the Chairperson who shall send a
copy of the minutes of each JSC meeting to both Parties. Both Parties will use their reasonable efforts to build consensus. The JSC members shall at all times when making a decision consider in good faith and make decisions consistent with:

  
 (i) Licensor’s global
plans for commercialising the Product; 
  

 20 

 (ii) Obtaining NDA Approval as soon as possible; and 
  
 (iii) Licensee’s Commercialisation of the Product in
the Territory. 
  
 If the JSC does not reach unanimous agreement
on any particular matter then such matters requiring resolution shall be referred to the Chief Executive Officer of Licensor or equivalent position or his or her nominee and the Chief Executive Officer of Licensee or equivalent position or his or
her nominee for resolution, who together shall use reasonable and good faith efforts to resolve such matters within thirty (30) days of the date such matters are referred to them for resolution. If the Parties still fail to resolve the matter
so referred then: 
  

	 	(iv)	Save with respect to Projected Sales and quantities of Product to be supplied under Clause 8.2, Licensee shall have the casting vote on (a) issues relating to the
Commercialisation of the Product in the Territory; (b) the conduct of Clinical Studies under the Lifecycle Management Plan, and (c) at any time after the termination of the Manufacturing Period, decisions relating to the manufacture of the
Product; 

  

	 	(v)	Licensor shall have the casting vote on (a) issues relating to the Initial NDA (including any Clinical Trials prior to the NDA Approval Date subject to Clause 7.2)
(b) during the Manufacturing Period, Clinical Study design, including the protocol for such Clinical Studies, (c) during the Manufacturing Period, decisions relating to changes to the Specification or manufacture of the Product and the
implementation of any improvements thereto, and (d) the quantity of Product to be supplied under Clause 8.2; or 

  

	 	(vi)	With regard to Projected Sales the matter shall be resolved by Expert Determination. 

  
 and any such agreement or resolution in this way shall for the purposes of this Agreement constitute a unanimous vote of
the JSC. 
  

 21 

	 	2.1.4	The venue for meetings shall alternate between the premises of the Parties, if not held by teleconference or videoconference. Each Party shall be responsible for its own expenses
including travel and accommodation costs incurred in connection with JSC meetings. 

  

	 	2.1.5	The JSC shall have power to invite persons whose special skills or influence might advance the Lifecycle Management Plan or assist in connection with the Initial NDA, in confidence
and upon behalf of the JSC, to attend and address meetings of the JSC. For the avoidance of doubt it is agreed that such persons shall not be JSC Members and shall not participate in the decision making process of the JSC. 

 

	 	2.1.6	The JSC Chairperson is responsible for promptly preparing the minutes of any JSC meeting, seeking unanimous approval of those minutes from the JSC Members, signing and dating the
approved minutes and promptly distributing a copy of the signed minutes to each Party. It is only such signed and dated minutes which shall constitute a decision of the JSC. 

  

	2.2	The Joint Steering Committee: 

  

	 	2.2.1	shall hold meetings in person as frequently as the members of the JSC may agree shall be necessary and otherwise by teleconference or a video-conference but in any event no less
frequently than four times a Year until the end of December 2007, with the first such meeting occurring not later than 31 March in each Year and the third such meeting not later than 31 October in such Year. Thereafter, the Parties shall
discuss and agree the frequency with which JSC meetings shall be held. Dates of meetings shall be agreed by the Parties not less than thirty (30) days beforehand; responsibility for arranging the meetings, including, at least, providing notice
and an agenda, shall be the responsibility of the Chairperson for that meeting; the first meeting will take place as soon as practicable after the Effective Date, but in no event later than twenty (20) Business Days after the Effective Date and
will be organised by Licensee. At such first meeting the JSC shall agree and establish a timetable for the transfer of the Licensor Know How; 

  

 22 

	 	2.2.2	shall by 31 October in each Year determine the detail of the Lifecycle Management Plan and Commercialisation Plan for the following Year. The Lifecycle Management Plan and
Commercialisation Plan shall contain reasonable target dates for major events as appropriate, and the JSC shall discuss these in good faith with reference to progress made in the current Year. The JSC may, at the request of the Licensee only, add to
and/or amend each Lifecycle Management Plan and Commercialisation Plan during the course of any Year as it considers appropriate from time to time, as long as each amendment is reduced to writing and signed and dated in accordance with the decision
making process described in Clause 2.1.3 above. The JSC shall retain copies of all such authorised versions of the Lifecycle Management Plan and Commercialisation Plan and each shall become incorporated in this Agreement as of the date of signature
by the JSC Chairperson; 

  

	 	2.2.3	shall, for the avoidance of doubt, not manage the progress of the Initial NDA on a day-to-day basis (this being the responsibility of the Licensor); 

  

	 	2.2.4	shall, for the avoidance of doubt, not manage the implementation of the Commercialisation Plan on a day-to-day basis (this being the responsibility of the Licensee);

  

	 	2.2.5	as an output of each meeting shall prepare a report to the respective management of each Party detailing the progress of the Initial NDA and the implementation of the
Commercialisation Plan; 

  

	 	2.2.6	shall be a co-ordination forum in relation to the global issues relating to Product Commercialisation; 

  

	 	2.2.7	shall discuss Trademark issues pursuant to Clause 14, if required to do so; 

  

	 	2.2.8	shall review the Quarterly Net Sales reports filed with it by Licensee under Clause 6.7.6; 

  

	 	2.2.9	shall, subject to Clause 2.1.3 (vi) determine the Projected Sales for each relevant Year; 

  

	 	2.2.10	shall, subject to Clause 2.1.3, determine the quantity of Product to be given away as free samples in connection with Licensee’s sales and promotion activities under the
Commercialization Plan and for use in Clinical Studies and to be supplied under Clause 8.2; 

  

 23 

	 	2.2.11	shall ensure a regular flow of information between the Parties; 

  

	 	2.2.12	shall effect and review the calculations under Clause 10; and 

  

	 	2.2.13	shall perform such other functions and responsibilities as are given to it under the express provisions of this Agreement. 

  
 Provided that: 
  

	 	2.2.14	the JSC shall have no authority to amend any commercial terms of this Agreement or any matter that would cause any payments stated in this Agreement to be other than the amount of
those terms as stated herein. 

  

	2.3	No later than seven (7) days prior to each meeting of the JSC, the Licensee will provide the Licensor with written copies of all materials the Licensee intends to present at
the JSC meeting which shall include a written report summarising its conduct of the Lifecycle Management Plan since the previous meeting and any material results and issues, which it wishes to bring to the attention of the JSC.

  

	2.4	No later than seven (7) days prior to each meeting of the JSC, the Licensor will provide the Licensee with written copies of all materials the Licensor intends to present at
the JSC meeting which shall include a written report summarising its progress in the Initial NDA since the previous meeting and any material results and issues, which it wishes to bring to the attention of the JSC. 

  

	2.5	Licensee acknowledges that Licensee only has the right to Commercialise Product in the Territory and that Licensor retains the right to develop and Commercialise Product outside the
Territory. Licensor may develop and Commercialise the Product outside the Territory either by itself or by the grant of licences to ex-US Licensees. In such a case in order to allow the effective worldwide development and Commercialisation of
Product Licensee agrees to allow representatives of ex-US Licensee(s) to participate in JSC meetings as an observer (subject to any such observer entering into appropriate confidentiality obligations). Licensor undertakes to use all reasonable
endeavours to ensure that the Commercialisation of the Product outside the Territory does not adversely affect the Commercialisation of the Product in the Territory by the Licensee. 

  

 24 

 3. IMPLEMENTATION OF THE LIFECYCLE MANAGEMENT PLAN 
  

	3.1	Licensee shall carry out its responsibilities under the Lifecycle Management Plan at its own cost and expense as follows: 

  

	 	3.1.1	Licensee shall ensure that the various aspects of the Lifecycle Management Plan are carried out in accordance with GCP as appropriate. Any animals involved shall only be used in
accordance with relevant Legal Requirements and shall be provided humane care and treatment in accordance with current generally accepted veterinary practice; and 

  

	 	3.1.2	With effect from the NDA Approval Date, Licensee shall be responsible for making and obtaining in its own name all regulatory filings, permissions and other approvals required by
any Regulatory Authority in the Territory in relation to the conduct of the Lifecycle Management Plan. 

  

	 	3.1.3	Licensee shall keep or cause to be kept detailed written records and reports of the progress of the Lifecycle Management Plan in sufficient detail and in good scientific manner
appropriate for all purposes including NDA purposes and patent purposes. These written records and reports shall properly reflect all the work done and the results achieved in carrying out such part of the Lifecycle Management Plan.

  

	 	3.1.4	From the NDA Approval Date, Licensee shall maintain the Initial NDA including by filing variations to the Initial NDA as necessary. Licensee shall be responsible for the
preparation, submission and prosecution of all necessary Regulatory Authority filings and applications required to obtain all label extensions or label changes to the Initial NDA, to obtain any subsequent NDA for the Product and to Commercialise
Product in the Territory. Licensee or its Affiliates shall be the owner and party of record for all such filings, applications and approvals. Licensee shall be responsible for its costs associated with preparation, submission and prosecution of all
filings and applications. 

  

	 	3.1.5	 Licensee shall promptly inform Licensor in writing of the commencement of any Clinical Study pursuant to Clause 7.1 required by a Regulatory Authority in the
Territory or effected by the Licensee (measured by the first dosing of a volunteer or patient in any such Clinical Study) and also of each 

  

 25 

	 	 
NDA filing made or label extension or label change thereto obtained by Licensee or its Affiliates in the Territory in relation to the Product. Licensee shall
also promptly inform Licensor in writing of the occurrence of Launch for the Product in the Territory. 

  

	 	3.1.6	Licensee shall provide Licensor with reasonable advance notice of all material meetings or calls with Regulatory Authorities relating to the Initial NDA or any subsequent NDA for
the Product. A maximum of two (2) Licensor personnel may attend such meetings or calls at Licensor’s own cost and expense. 

  
 4. LICENSEE DILIGENCE ON LAUNCH AND FOR LIFECYCLE MANAGEMENT PLAN 
  

	4.1	Licensee and its Affiliates’ core obligation in relation to Commercialisation of Product shall be to use its Commercially Reasonable Efforts to achieve Launch of the Product
for the Indication as soon as reasonably practicable after the NDA Approval Date. 

  

	4.2	Following Launch of the Product in the Territory Licensee shall either itself or through its Affiliates use Commercially Reasonable Efforts to implement the Lifecycle Management
Plan. All decisions relating to any amendment to the Lifecycle Management Plan shall be discussed and agreed by the JSC in accordance with the procedures set out in, and subject always to the terms of, Clause 2. 

  

	4.3	If Licensor at any time believes that Licensee or its Affiliates are not using Commercially Reasonable Efforts to implement the Lifecycle Management Plan Licensor shall have the
right, no more frequently than once every six (6) months, to give written notice to Licensee requesting written justification, in the form of detailed reasons, which would support the proposition that Licensee and its Affiliates and
sub-licensees are using Commercially Reasonable Efforts. Licensee shall provide such written justification within sixty (60) days of receipt of any such request. 

  
 5. LICENSOR’S OBLIGATIONS 
  

	5.1	Licensor will: 

  

	 	5.1.1	transfer the Licensor Know How to Licensee in the manner and in accordance with the timetable established by the JSC under Clause 2.2.1; 

  

 26 

	 	5.1.2	promptly during the term of this Agreement disclose to the Licensee all Licensor IP Controlled by Licensor or its Affiliates, not previously disclosed or transferred under this
Clause 5; and 

  

	 	5.1.3	in accordance with Clause 11, provide such assistance as Licensee may reasonably require in connection with the manufacture of Product, after the termination of the Manufacturing
Period. 

  

	5.2	Licensor will: 

  

	 	5.2.1	Diligently progress the Initial NDA through to NDA Approval, including effecting all such Clinical Trials as may reasonably be required on the terms of Clause 7.2, promptly dealing
with all matters and issues raised by the FDA in connection therewith and paying all fees (including the PDUFA fee) payable on or in connection with such NDA Approval. Licensee will give reasonable assistance to Licensor in such matters provided
that in the event that in connection with the Initial NDA the FDA requests any Clinical Trials, the Parties shall act in connection with such Clinical Trials in accordance with Clause 7.2; 

  

	 	5.2.2	Keep the Licensee fully informed of the progress of the Initial NDA, by reports to the JSC and otherwise as reasonably required; 

  

	 	5.2.3	Provide the Licensee with reasonable advance notice of all material meetings or calls with the FDA relating to the Initial NDA. Two representatives of Licensee may attend such
meetings or calls at Licensee’s own cost and expense; and 

  

	 	5.2.4	On NDA Approval promptly transfer the Initial NDA into the sole name of the Licensee. 

  
 6. COMMERCIALISATION 
  

	6.1	 Within ninety (90) Business Days of the Effective Date, Licensee shall provide Licensor through the JSC with a preliminary version of its Commercialisation
Plan, including the Marketing Plan and Budget for the first year post-Launch all of which shall reflect the Launch Commitment and Detailing Commitment. The Marketing Plan and Budget shall also contain information of the type specified in Schedule 9.
Such Commercialisation Plan, Marketing Plan and Budget shall be updated at least 

  

 27 

	 	 
once each Year thereafter and shall be supplied to Licensor and be reviewed and agreed at a JSC meeting. Where such Commercialisation Plan is updated after
Launch of Product in the Territory, in addition to containing details of Licensee’s proposed plans for Commercialisation, it shall also contain a summary of the progress of sales and marketing of Product in the Territory and sales forecasts for
the Year covered by the Commercialisation Plan. Such plan shall be received by Licensor subject to the obligations of Clause 18 (Confidentiality). 

  

	6.2	Save as specified under Clause 11, Licensee shall obtain all of its requirements for Product from Licensor (or as Licensor may direct) on the terms of this Agreement. Within ninety
(90) days of the Effective Date the Parties shall enter into a safety and quality agreement covering manufacture of Product (the “Safety and Quality Agreement”) by Licensor (or its nominee) and Licensor shall promptly enter
into such further agreements or procure execution of the same, by any Party manufacturing the Product for Licensor for supply to Licensee under the terms of this Agreement. Licensor shall procure that each Affiliate of Licensor who is manufacturing
Product on behalf of Licensor also enters into the Safety and Quality Agreement if required by Licensee. Notwithstanding any Safety and Quality Agreement entered into between Licensee and any nominees or Affiliates of Licensor, Licensor shall remain
solely liable for the performance of its obligations under this agreement and for the performance of any such obligations subcontracted to any such nominee or Affiliate of Licensor. 

  

	6.3	Licensee shall exercise its rights under this Agreement as principal and it shall not sell or otherwise dispose of Product on behalf of, or in the name of Licensor or any of
Licensor’s Affiliates, provided that to the extent required by applicable law, the name of the Licensor or Licensor’s Affiliates may appear on the packaging of the Product as manufacturer. 

  

	6.4	After the NDA Approval Date, Licensee, as the holder of the Initial NDA and without limiting its obligations under this Agreement or under any Applicable Law, shall comply with the
content and terms of the Initial NDA; 

  

	6.5	Licensee shall maintain in the Territory, as part of its existing scientific service, a scientific service for scientific information relating to the Product and shall liaise with
Licensor in relation to any enquiries made to such service. 

  

 28 

	6.6	Licensee shall establish and/or maintain a sales force appointed and trained in accordance with Good Industry Practice to promote the Product in the Territory (provided that it is
acknowledged that such sales force shall promote other products with the Product). 

  

	6.7	Licensee shall: 

  

	 	6.7.1	comply at all times with all Applicable Laws pertaining to the Commercialisation of the Product in the Territory; 

  

	 	6.7.2	either itself, its Affiliates or through its distributors, maintain adequate facilities for the efficient Commercialisation of the Product throughout the Territory;

  

	 	6.7.3	during the Manufacturing Period maintain or have maintained the Product, pending distribution and sale to customers, in a facility that is properly equipped (including temperature
and humidity monitoring) to store pharmaceutical and other sensitive products. Licensor, or its duly appointed agent, shall have the right to inspect the premises of Licensee or (accompanied by Licensee) its sub-contractor where the Product is held,
stored, and/or distributed, and Licensee shall permit such inspection or arrange for such inspection no more often than once per year, upon advance notice at any reasonable time, of the methods and procedures used in the distribution, storage and
sale of the Product and provide to Licensor promptly in response to any request therefor, all government inspection reports and certificates relating thereto; 

  

	 	6.7.4	during the Manufacturing Period, in dealing with or handling the Product follow the reasonable instructions of Licensor, and provide for or have provided the storage of Product in a
manner consistent with the terms of the Initial NDA and Applicable Law; 

  

	 	6.7.5	at its own cost and expense, hold such stocks of Product for the Territory at levels reasonably required to satisfy the anticipated demand for Product; 

  

	 	6.7.6	in marketing and selling Product: 

  

	 	(i)	not make any statements, representations, warranties or guarantees concerning the Product which are contrary to the Initial NDA or Applicable Laws; and 

  

 29 

	 	(ii)	avoid any misleading or deceptive marketing practices or any other promotional activities that may to the knowledge of the Licensee harm or otherwise damage Licensor’s or its
Affiliates image or reputation, in the Territory; 

  

	 	6.7.7	keep the JSC informed of the Commercialisation of the Product in the Territory (including but not limited to sales of the Product) by way of a written report detailing the level of
sales made during the previous Quarter (as reasonably available to Licensee at the time of compiling such report) and summarising any material developments relating to Commercialisation of the Product in the Territory during the previous Quarter.
Such report shall be submitted within thirty (30) days of the end of each Quarter. Licensee shall also use reasonable efforts to inform the JSC of any other information that it receives which in the Licensee’s opinion is likely to be of
material interest, benefit, or use to the Licensor in relation to the sale of the Product outside of the Territory; 

  

	 	6.7.8	investigate promptly and report to Licensor all significant customer complaints or reports of incidents relating to the Product affecting quality of which it has knowledge and
co-operate with Licensor in the handling of such complaints and in accordance with Clause 12.1. Licensee shall provide a copy of each investigation report under this Clause 6.7.8 to Licensor; 

  

	 	6.7.9	 during the Manufacturing Period keep Licensor informed in a timely manner of any information brought to Licensee’s attention which in Licensee’s
reasonable judgment could lead to a variation of the Initial NDA, Packaging or Labelling (subject to any overriding provisions of the pharmacovigilance procedures to be set out in the Safety and Quality Agreement). For the avoidance of doubt, during
the Manufacturing Period all decisions relating to the Specification and methods of manufacturing shall be made solely by Licensor provided that Licensor shall give Licensee reasonable notice in writing of any changes prior to effecting them and

  

 30 

	 	 
provided that such changed Specification is still in accordance with the Initial NDA and any subsequent NDA. If a change to the Specifications is required
which will necessitate a change to an NDA, Licensor shall consult with Licensee with regard to making this change to the Specifications so as to allow Licensee to file all necessary documents with the Regulatory Authorities to make the necessary
changes to each NDA prior to effecting such change to the Specification; and 

  

	 	6.7.10	retain and archive all documentation relating to the Product, including, in particular, documentation relating to regulatory matters and to any Clinical Study and provide copies of
the same to Licensor as and when requested by Licensor. 

  

	6.8	Licensee shall not Commercialise the Product in conjunction or otherwise together with any other products as a loss leader without Licensor’s prior written approval, which
approval may be withheld by Licensor for any reason, provided always that Licensee shall be permitted to sell and promote Product with other products on an arms-length basis in accordance with Good Industry Practice. 

  

	6.9	Licensee shall be responsible for all costs and expenses associated with its Commercialisation activities. 

  

	6.10	Subject to the obligations of the Licensor under Clause 5, Licensee, at its sole cost and expense, shall be responsible for obtaining all permissions, consents and licences
(required in addition to the Initial NDA), required to Commercialise the Product in the Territory under any Applicable Law, including without limitation, any import approvals, wholesale dealer’s licenses and pricing and reimbursement approvals.
Licensor agrees to reasonably cooperate with Licensee in obtaining any such additional necessary authorisations and approvals required to Commercialise the Product in the Territory, including representatives of Licensor attending meetings with the
relevant Regulatory Authorities if so requested by Licensee together with Licensee, at Licensor’s own cost and expense for such attendance. 

  

	6.11	Licensee shall be responsible for setting the List Price of Product in the Territory and for determining the Sales Price from time to time. 

  

	6.12	Licensee shall during the term of this Agreement fulfil all of its obligations hereunder in a manner that is consistent with Good Industry Practice: 

  

	6.13	Licensee shall not: 

  

	 	6.13.1	advertise the Product or canvass or solicit orders for the Product outside the Territory; or 

  

 31 

	 	6.13.2	open branches for the sale of the Product outside the Territory; or 

  

	 	6.13.3	maintain distribution depots for the Product outside the Territory. 

  
 Provided that this provision shall not prevent Licensee from contributing to international journals or advertising therein or attending and/or exhibiting
at international conferences or events outside of the Territory; 
  

	6.14	Licensee’s core obligations in relation to Commercialisation of Product in the Territory shall be as follows: 

  

	 	6.14.1	to use Licensee’s Commercially Reasonable Efforts to maximise sales of the Product in the Territory; and 

  

	 	6.14.2	to incur the Launch Commitment. At the end of the Initial Period Licensee shall provide evidence reasonably satisfactory to the Licensor that the Licensee has satisfied such
obligation; and 

  

	 	6.14.3	to effect the Detailing Commitment. At the end of the Initial Period Licensee shall provide evidence reasonably satisfactory to the Licensor that the Licensee has satisfied such
obligation; and 

  

	 	6.14.4	 in each Year of this Agreement commencing not less than twenty-one (21) months after Launch to purchase from the Licensor (as evidenced by invoices dated
during such Year) the number of Units of Product at the Purchase Price therefor equal to [*] per cent ([*]%) of the Projected Sales for that Year (“the Minimum Units”) or within thirty (30) days of
the end of such Year make any balancing payment necessary such that the Licensor has received monies equivalent to the sum it would have received if such Minimum Units had been purchased at the Purchase Price. For clarity the number of Units
Licensee has purchased in a Year shall be determined by invoices for Units of Product dated in such Year. Within thirty (30) days of the end of each Year the Parties shall meet to discuss and agree (i) the number of Units for which
Licensee has been invoiced in that Year, and (ii) the size of the balancing payment (if any) Licensee needs to make to 

  

 32 
 * Confidential treatment requested; certain information 
 omitted and filed separately with the SEC. 

	 	 
Licensor such that Licensor has received payment for the Minimum Units for that Year. The balancing payment will be a sum equal to the number of additional
Units of Product Licensee needs to purchase in order to meet its obligations to purchase the Minimum Units multiplied by the Invoice Price for a Unit of Product for that Year. Licensee shall make such payment and Licensor shall deliver an invoice in
respect of such payment within five (5) Business Days of such meeting and such payment shall be part of the Invoice Income for the purposes of Clause 10.5. Provided that Licensee shall not be liable to make any such balancing payment and for
any breach of its obligation under this Clause 6.14.4 where such failure to purchase Product is by reason of the failure of Licensor to supply Product in accordance with the terms of Clauses 8 and 9. 

  

	6.15	Licensee undertakes that, whilst Commercialising Product, it will not discount the price at which it sells Product below List Price (a) by more than Licensee discounts its own
products of similar type, or (b) by any more than a pharmaceutical company which owned a product or the rights to a product of similar market potential to the Product in the Territory might reasonably be anticipated to discount the price of
that product. 

  
 7. ADDITIONAL CLINICAL TRIALS 

 

	7.1	The Licensee may from time to time, propose to the Licensor that additional Clinical Studies be initiated in relation to the Product in the Territory whether on its own initiative
or because a Phase IV Clinical Trial is required by FDA (“Additional Studies”). The Parties shall meet and discuss the same in good faith and if the Parties agree the plans and protocols for such Additional Studies the Licensee may
at its sole cost and expense proceed with the additional Clinical Study which shall be included as part of the Lifecycle Management Plan. Provided that where any Phase IV Clinical Trial is required by the FDA in the Territory after the NDA Approval
Date, the Parties shall promptly agree in good faith the plans and protocols for such Additional Study and the Licensee shall be entitled to conduct the same as a Clinical Study, at its sole cost and expense. 

  

	7.2	 Where any Clinical Trial is required by the FDA in connection with the Initial NDA the Parties shall promptly agree in good faith the plans and protocols for such

  

 33 

	 	 
additional Clinical Trial and the budget therefor and it shall be conducted as agreed between the Parties. The Development Costs of any such additional
Clinical Trial required in connection with the Initial NDA pre-NDA Approval Date shall be paid by the Licensor, provided that a sum equal to the first [*] dollars ($[*]) and [*] per cent ([*]%)
of any Development Costs exceeding [*] dollars ($[*]) shall be reimbursed by the Licensee, by being paid in addition to the milestone payable under Clause 10.10, upon payment of such milestone.

  

	7.3	Any failure of the Parties to agree under Clauses 7.1 or 7.2 shall be referred to Expert Determination. 

  

	7.4	Where one Party carries out any Additional Study or Clinical Trial under this Clause 7 it shall prepare a final report of the results from such Additional Study or Clinical
Trial and from all sites and shall present the same to the other Party at the same time supplying a written copy. The first Party may thereafter release such results or submit them for use at conferences and publication in scientific journals in
accordance with the provisions of Clause 18 (Confidentiality). 

  

	7.5	All rights in and to any data, results, information, inventions, discoveries and/or improvements arising out of the performance of a Clinical Trial the subject of Clause 7.2,
whether patentable or not, conceived, made, obtained or developed (the “Licensor Data Package”) pursuant to a Clinical Trial shall vest in and remain the property of the Licensor, provided always that such Licensor Data Package
shall be Licensor IP for all purposes under this Agreement. 

  

	7.6	All rights in and to any data, results, information, inventions, discoveries and/or improvements arising out of the performance of an Additional Study the subject of Clause 7.1,
whether patentable or not, conceived, made, obtained or developed (the “Licensee Data Package”) pursuant to an Additional Study shall vest in and remain the property of the Licensee, provided always that such Licensee Data Package
shall be Licensee IP for all purposes under this Agreement. 

  
 8. LICENSOR’S SUPPLY OBLIGATIONS 
  

	8.1	Subject to the provisions of Clauses 9 and 11 and the terms of the Safety and Quality Agreement, the Licensor shall: 

  

 34 
 * Confidential treatment requested; certain information 
 omitted and filed separately with the SEC. 

	 	8.1.1	manufacture or have manufactured and supply to Licensee such amounts of Product for Licensee’s Commercialisation of the Product in the Territory, as Licensee may order from
time to time and undertakes that all Product supplied to the Licensee shall have been manufactured in the manner specified in the NDA and in accordance with GMP, Specifications and the Safety and Quality Agreement; 

  

	 	8.1.2	provide Licensee with a copy of a manufacturing authorisation for the purposes of manufacturing Product in respect of each site at which manufacture (or any part thereof) of Product
shall occur for supply to Licensee and shall provide Licensee with advance written notice of any proposed change to such manufacturing authorisation(s) in order that Licensee may make any relevant variations to the Regulatory Approval(s). Licensee
will give Licensor all reasonable assistance in obtaining a manufacturing authorisation for the Product from the Regulatory Authorities in the Territory; 

  

	 	8.1.3	ensure that Product to be supplied to Licensee is handled and stored by it in accordance with all Applicable Laws and shall ensure that it creates and retains manufacturing,
analytical and distribution records, testing and releasing materials, and undertakes production and quality controls, including in-process controls and all necessary stability studies, and analysis relating to the Product all in accordance with the
Specification and GMP; 

  

	 	8.1.4	procure that Licensee, or its duly appointed agent, shall have the right to inspect the premises of Licensor or Licensor’s contract manufacturer(s) where the Product for supply
to Licensee is manufactured, Packaged or Labelled, which inspections may take place no more often than once per Year upon advance notice at any reasonable time, provided however, that Licensee shall have the right to inspect such premises at any
time following the receipt of a complaint, report or query concerning or relating to the manufacture of the Product; 

  

	 	8.1.5	ensure that no changes in chemistry and manufacturing controls specified in the CMC Data in the Initial NDA are made without Licensee having obtained the prior approval of the
applicable Regulatory Authority for such changes if such approval is required; 

  

 35 

	 	8.1.6	keep Licensee informed in a timely manner of any information brought to Licensor’s attention which in Licensor’s reasonable judgment could lead to a variation of the NDA,
Packaging or Labelling (subject to any overriding provisions of the Safety and Quality Agreement); 

  

	 	8.1.7	provide Licensee with reasonable assistance in relation to any questions or issues raised by any Regulatory Authority relating to Product or the Initial NDA, including, but not
limited to, the provision of any relevant background data relating to Product in Licensor’s possession or control; 

  

	 	8.1.8	supply the Product in Packaging approved by Licensee under the terms of Clause 14.8 which incorporates all information (including the patient information leaflet) that may be
required by the NDA, any Regulatory Authority or any Applicable Law from time to time; 

  

	 	8.1.9	notify Licensee promptly of any proposed inspections by any Regulatory Authority (either in the Territory or outside of the Territory) of the facilities at which Product is
manufactured and procure that Licensee has a right to attend on such occasions if the inspection is by a Regulatory Authority in the Territory and in any event Licensor shall inform Licensee of the outcome. Where the proposed inspection is by a
Regulatory Authority from inside the Territory, Licensee shall give Licensor all reasonable assistance in preparing for that inspection; 

  

	 	8.1.10	establish and maintain a scientific service for scientific information relating to the Product and shall liaise with Licensee in relation to any enquiries made to such service;

  

	 	8.1.11	retain and archive all documentation relating to the Product including, in particular, documentation relating to regulatory matters and to Clinical Trials of Product; and

  

	 	8.1.12	investigate promptly and report to Licensee all significant customer complaints or reports of incidents relating to the Product affecting quality of which it has knowledge and,
where such complaints arise in the Territory, shall co-operate with Licensee in the handling of such complaints and in accordance with Clause 12.1 and shall provide a copy of each investigation report under this Clause 8.1.12 to Licensee.

  

 36 

	8.2	From time to time Licensee may place Purchase Orders for samples of the Product for distribution in connection with its sales and promotions activities under the Commercialisation
Plan and for use in Clinical Studies. The quantity of each such Purchase Order is to be agreed by JSC, save that in no event shall such quantities to be used in Clinical Studies or given away as free samples be more than is common in the industry
for this sort of Product. Each such quantity ordered shall be manufactured fully in accordance with the terms of Clause 8.1 and delivered and accepted on the terms of Clauses 9.3 to 9.9 and invoiced at Licensor’s Cost of Manufacture.

  
 9. FORECASTS, ORDERS, DELIVERY AND ACCEPTANCE 

 

	9.1	No later than one hundred and twenty (120) days prior to the anticipated Launch date for Product in the Territory, the Licensee shall prepare and provide to Licensor a written
forecast covering the period between NDA Approval Date and the end of the first full Quarter following Launch (“First Full Quarter”). Following discussion of this pre-Launch forecast between the Parties Licensee shall place firm
binding purchase orders on Licensor covering the period between NDA Approval Date and the end of the First Full Quarter, such purchase orders not to specify a delivery date earlier than ninety (90) days after the date upon which such purchase
orders are dated and submitted to Licensor. On or before the commencement of the First Full Quarter and each Quarter thereafter Licensee shall prepare and provide to Licensor a written forecast by Quarter of Licensee’s requirements for Product
(“Forecasts”) for the immediately succeeding eight full Quarters (i.e. after Launch commencing with the Quarter just beginning). The amounts set forth for the first and second Quarters in each Forecast shall constitute a firm
binding purchase order and shall be binding upon Licensee and subject to the provisions of Clause 9.2. The amounts set forth in the following six (6) Quarters shall constitute Licensee’s non-binding, good faith estimate of the Product
requirements of Licensee for such periods; provided, however, that, in relation to the amounts set forth for the third Quarter, when such Quarter becomes the second Quarter of the next Forecast the amounts set forth in such next Forecast for the
second Quarter shall not be less than [*] percent ([*]%) nor shall Licensor be obligated to supply greater than [*] percent ([*]%) of the amounts set forth in the immediately preceding Forecast for such Quarter, but
Licensor may agree to supply such greater amount in its sole discretion. 

  

 37 
 * Confidential treatment requested; certain information 
 omitted and filed separately with the SEC. 

	9.2	Each Forecast provided to Licensor by Licensee pursuant to Clause 9.1 shall so far as it relates to the second Quarter specify the quantity of the Product ordered and the
required delivery date therefor and shall be accompanied by firm binding purchase orders covering each consignment required which purchase orders shall be consistent with the Forecast (“Purchase Orders”). In the event of a conflict
between the terms and conditions of any Purchase Order and this Agreement, the terms and conditions of this Agreement shall prevail. A Purchase Order must be for an amount of Product which fits Licensor’s batch size. Licensor shall have no
obligation to supply quantities of Product in the event Licensee places orders for amounts of Product that are not multiples of Licensor’s standard manufacturing batch size for the Product. 

  

	9.3	Licensor shall within ten (10) days of the receipt of any Purchase Order from Licensee made pursuant to Clause 9.2 give written notice to Licensee of the dates by when it
shall fulfil such Purchase Order. 

  

	9.4	All Product supplied under this Agreement shall be delivered Ex Works (INCOTERMS 2000) Licensor’s or its nominee’s manufacturing and/or distribution facility in Europe and
shall be accompanied by (i) a written Certificate of Analysis confirming that such quantity of Product meets the Specification and (ii) an invoice for payment for such amount of Product at Invoice Price. Licensee shall secure transport and
insurance with its own providers at its sole cost and expense. Licensee shall pay all freight, insurance charges, taxes, import and export duties, inspection fees and other charges applicable to the sale and transport of Product purchased by
Licensee hereunder which amounts shall be separately set forth on Licensor’s invoices to Licensee. Title and risk of loss and damage to Product purchased by Licensee hereunder shall pass to Licensee upon receipt of the Product by the carrier
designated by Licensee at Licensor’s or its nominee’s facility. 

  

	9.5	 Following receipt of a shipment of Product from Licensor, Licensee or its designated agent shall, within thirty (30) days, carry out a visual inspection (as
defined below) of such shipment to ensure that Packaging and Labelling of Product has taken place in accordance with the Specification and is accompanied by an associated Certificate of Analysis and Certificate of Compliance, and if Licensee
determines in its sole 

  

 38 

	 	 
discretion (exercised reasonably) that it has not so taken place it shall promptly notify rejection of shipment to Licensor in writing. Subject to the
provisions of Clause 9.7, if Licensee does not notify Licensor of rejection of such shipment within such thirty (30) days, such shipment of Product shall be deemed to have been accepted. 

  

	9.6	For the purposes of this Agreement, “visual inspection” shall mean: 

  

	 	9.6.1	comparing the applicable order against the documentation accompanying the shipment to verify that the delivery date, identity, quantity and exterior shipment labelling comply with
the order; 

  

	 	9.6.2	verifying that the Certificate of Analysis for the shipment states that the Product conforms in all material respects to the applicable Specifications; and 

 

	 	9.6.3	verifying that the Certificate of Compliance for the shipment states that the Product was manufactured in accordance with Good Manufacturing Practice; and 

 

	 	9.6.4	visually inspecting the exterior of the shipment of Products to verify that the shipment appears to be in good condition. 

  
 For the avoidance of doubt, visual inspection does not include laboratory
analysis. 
  

	9.7	Notwithstanding the foregoing, Licensor shall remain liable to Licensee to the extent provided in Clauses 9.8 or 9.9 as appropriate for any defect that subsequently is
discovered which renders the Product unsaleable if such defect is due to the failure of the Product to meet Specification and/or GMP and provided that Licensee immediately inform Licensor by notice in writing of such defect and rejection of the
relevant shipment (if applicable) not later than ten (10) days from the date of discovery of such defect. 

  

	9.8	Within ten (10) days of receipt by Licensor of a notice of rejection from Licensee in accordance with Clauses 9.5 or 9.7 Licensor shall indicate in writing to Licensee
whether Licensor is issuing a return authorisation or not. In the event that a return authorisation is so issued Licensee shall return to Licensor at Licensor’s expense the quantities of Product in question and Licensor shall replace such
quantities within sixty (60) days or as soon as reasonably practicable thereafter. If the payment in respect of such quantities is outstanding, it shall be postponed until such replacement quantities are received and accepted by Licensee in
accordance with this Clause 9. 

  

 39 

	9.9	After receipt of any rejection notice from Licensee pursuant to Clause 9.5 or Clause 9.7 if Licensor does not issue a return authorisation under Clause 9.8, Licensor
shall analyze any batch of Product rejected by Licensee for non-conformity with the Specifications within thirty (30) days of receipt of such notice, and present its findings with respect to such Product to Licensee. If such tests confirm
non-conformity with the Specification Licensor shall promptly supply to Licensee (at Licensor’s cost and expense) a conforming batch in the same quantity as the rejected batch and shall reimburse Licensee for any out of pocket costs or expenses
incurred by Licensee including shipping charges in relation to such non-conforming batch. If the Parties cannot agree on whether the batch of Product in question conforms to the Specifications, an independent qualified laboratory reasonably
acceptable to both Parties, and at a cost equally shared by both Parties, shall analyse both Licensee’s and Licensor’s samples of Product in question, and the definitive results of such laboratory shall be binding on the Parties. If the
batch of Product in question is determined to be non-conforming, such non-conforming Product shall be held for Licensor’s disposition, or shall be returned to Licensor, in each case at Licensor’s expense, as directed by Licensor no later
than fifteen (15) days following such determination. Licensor shall replace each non-conforming batch of Product, or the non-conforming portion thereof, with conforming Product within sixty (60) days or as soon as reasonably practical
after receipt of notice of rejection thereof. If the batch of Product in question is determined to be conforming and provided that the Certificate of Analysis did not indicate it to be non-conforming, such Product shall be returned to Licensee at
Licensee’s cost and expense. 

  

	9.10	Licensor shall not hold any stocks of Product for Licensee for sale in the Territory. 

  

	9.11	Licensor shall employ stock rotation methods and techniques consistent with Good Industry Practice so as to ensure that Product delivered to Licensee has a minimum of [*] per
cent ([*]%) of its shelf life unexpired. 

  

	9.12	 Licensor shall use Commercially Reasonable Efforts to fill at least [*] per cent ([*]%) of each properly placed Purchase Order by the date agreed for
delivery. In the event that the Licensor expects an inability to supply Product by the date agreed for delivery 

  

 40 
 * Confidential treatment requested; certain information 
 omitted and filed separately with the SEC. 

	 	 
it shall give Licensee notice to this effect as soon as Licensor becomes aware of the circumstance. Save for a Force Majeure event (in which case the
provisions of Clause 23 shall apply), it shall be a material breach of the Agreement if Licensor is not able or otherwise does not fill at least eighty per cent (80%) of each properly placed Purchase Order for a period of greater than two
consecutive Quarters. 

  
 10. LICENCE FEES, PRICE AND PAYMENT
TERMS 
  
 Supply Price 
  

	10.1	Licensor will manufacture and supply Licensee with Product during the Manufacturing Period at the Purchase Price. 

  

	10.2	Within sixty (60) days of the end of each Half Year post-Launch Licensee shall submit to Licensor a report setting out Licensee’s calculation of the Sales Price for that
Half Year, the underlying data based on which such calculation has been made and a calculation of the Supply Income (as defined below) due to the Licensor for that Half Year. For the avoidance of doubt it is declared and agreed that Units used in
Clinical Studies or Units given away as free samples shall not be counted when calculating the Sales Price for a Half Year. 

  

	10.3	Within fifteen (15) days of receipt of the report under Clause 10.2 the JSC shall meet and agree the total that was due to Licensor in any Half Year for the supply of Units of
Product delivered in that Half Year. This shall be calculated by multiplying the Purchase Price applicable in that Half Year by the actual number of Units delivered in that Half Year (“Supply Income”). Where any payment has been
made by Licensee under Clause 6.14.4 in respect of a Year at the calculation of the Supply Income for the Half Year ended on 31 December the relevant number of Units of Product in respect of such payment shall be included in the calculation of
the Supply Income in respect of such Half Year. 

  

	10.4	Throughout each Half Year Licensor shall invoice Licensee for Product supplied pursuant to this Agreement at the Invoice Price as specified below. Licensee shall make payment of
each invoice submitted pursuant to Clause 9.4 within thirty (30) days of receipt of such invoice. Licensor shall invoice Licensee for Product at the following rates: 

  

	 	10.4.1	in the first Half Year (or part thereof) post-Launch, at the Margin on the List Price; and 

  

 41 

	 	10.4.2	in each subsequent Half Year at the Purchase Price for the previous Half Year; 

  
 (the applicable price for a Half Year being the “Invoice Price”), the total amount invoiced in any Half
Year for manufacturing and supplying Product at the Invoice Price being the “Invoice Income”. Invoice Income in respect of the Half Year ended on 31 December in each Year shall include any balancing payment made under Clause
6.14.4. 
  

	10.5	At the same time as the JSC meets under Clause 10.3 it shall reconcile the Invoice Income with the Supply Income for the previous Half Year, the difference between the two figures
being the balancing payment (“Reconciliation Amount”). The Party which this calculation shows needs to make a balancing payment shall pay the Reconciliation Amount to the other within thirty (30) days of the relevant meeting of
the JSC being held. Any dispute between the Parties as to any matter relating to the calculation of the Sales Price including the components of the Sales Price, the Supply Income, the Invoice Price, the Invoice Income in any Half Year or the
Reconciliation Amount shall be resolved in accordance with the mechanism set out in Clause 10.18. 

  
 Royalty 
  

	10.6	In the event that the Licensor is not supplying all the Product requirements of the Licensee, under the terms of Clause 11, Licensee shall pay to Licensor a royalty at the rate of
[*] percent ([*]%) of Net Sales of all Product not supplied by Licensor, such Royalty to be payable on all such Net Sales during the period (the “Royalty Term”) until whichever shall be the earlier of:

  

	 	10.6.1	the date of expiry of the last to expire of any Valid Claim of any Licensor Patent Rights Covering the Product in the Territory; and 

  

	 	10.6.2	the approval of an ANDA for the Product in the Territory. 

  

	10.7	 Where after the expiry of the Royalty Term, Licensor is not supplying all the Product requirements of the Licensee, Licensee shall pay to Licensor a trademark
royalty at the rate of [*] per cent ([*]%) of Net Sales of all Product not supplied by Licensor, (the “Trademark Royalty”), and the terms of Clauses 10.14 to 10.18 shall apply to such Trademark Royalty.
The Trademark Royalty shall be payable for the period in 

  

 42 
 * Confidential treatment requested; certain information 
 omitted and filed separately with the SEC. 

	 	 
which the Licensee shall continue to market the Product in the Territory under the Trademark (the “Trademark Term”). The Licensee
acknowledges that, it shall not at any time use any trademark other than the Trademark on the Product. Such Trademark Royalty shall be deemed included in the Purchase Price during the Manufacturing Period in respect of all Product supplied by the
Licensor and shall be deemed included in the Royalty during the Royalty Term. 

  
 Signature 
  

	10.8	Upon the Effective Date, Licensee will pay to Licensor a fee of [*] US Dollars (US$[*]). 

  
 Loan 
  

	10.9	Upon the Effective Date, Licensee will advance to Licensor an unsecured, subordinated, loan of [*] US Dollars (US$[*]) (“the Loan”). The Loan shall be
repayable upon the earlier of (i) [*]; and (ii) [*], on the terms of the Loan Note. Upon the Loan becoming repayable Licensor shall pay Licensee the Loan amount plus any interest accrued thereon (the
“Interest”) and a sum equal to the Interest shall be added to the milestone payable by the Licensee under Clause 10.10. 

  
 Milestone payments 
  

	10.10	Within ten (10) Business Days of the NDA Approval Date, Licensee shall pay Licensor a fee of [*] US Dollars (US$[*]) as increased, if at all, under
Clause 7.2 and/or Clause 10.9. 

  

	10.11	The following sales milestone payments shall be paid by Licensee to Licensor: 

  

	 	10.11.1	[*] US Dollars (US$[*]) for the first time that aggregate Net Sales in a Year surpass [*] US Dollars (US$[*]); 

  

	 	10.11.2	[*] US Dollars (US$[*]) for the first time that aggregate Net Sales in a Year surpass [*] US Dollars (US$[*]); and 

  

	 	10.11.3	[*] US Dollars (US$[*]) for the first time that aggregate Net Sales in a Year surpass [*] US Dollars (US$[*]). 

  

	10.12	 Each of the milestone payments under Clauses 10.10 and 10.11, shall only be payable by Licensee upon the first occurrence of the applicable event whenever it occurs
but 

  

 43 
 * Confidential treatment requested; certain information 
 omitted and filed separately with the SEC. 

	 	 
upon the first occurrence of the applicable event the milestone payment shall be payable even if more than one occurs in a Year, unless otherwise noted. Such
milestone payments are non-refundable in any circumstances whatsoever. 

  

	10.13	Licensee shall promptly (and in any event within thirty (30) days) report to Licensor when its accounting records evidence the occurrence of each milestone event under Clause
10.11 and within five (5) Business Days of reporting such event shall make the applicable milestone payment to Licensor. 

  
 General 
  

	10.14	If applicable Licensee shall make the Royalty and Trade Mark Royalty payments due to Licensor under Clauses 10.6 and 10.7 at Quarterly intervals within forty-five (45) days of
the end of each Quarter. Each Royalty and Trade Mark Royalty payment shall be accompanied by a report summarising the Net Sales of Product (not supplied by Licensor) in the Territory during the relevant Quarter, the taxes withheld, if any, and the
total Royalty and Trade Mark Royalty payments due. 

  

	10.15	Licensee shall make all payments to Licensor under this Agreement in US Dollars from the USA. 

  

	10.16	All payments under this Agreement shall be made free and clear of and without set off, deduction or deferment in respect of any taxes, disputes or claims whatsoever unless required
by law or practice of any Competent Authority. Licensee and Licensor shall co-operate to minimise any deduction or withholding in relation to any payments pursuant to this Agreement and, without limitation, Licensor shall provide Licensee with a
W-8BEN (or successor form) duly executed by Licensor. 

  

	10.17	 Licensee and its Affiliates shall keep and shall require its or their distributors and/or sub-licensees to keep, full, true and accurate records and books of
account containing all particulars that may be necessary for the purpose of auditing all amounts payable to Licensor including evidence of the Sales Price, Supply Income and Net Sales in each Year, in calculating any Royalty or Trademark Royalty due
and in compiling the reports due from Licensee under Clauses 6.7.7 and 6.14, 10.2 and 10.14 (as applicable) (“Records”) for a minimum period of six (6) years. Upon timely request by Licensor, Licensor shall have the right to
instruct an independent, internationally recognized, accounting firm to perform an audit, conducted so far as appropriate in 

  

 44 

	 	 
accordance with GAAP, as is reasonably necessary to enable such accounting firm to report to Licensor on such Records on the following basis:

  

	 	10.17.1	such firm of accountants shall be given access to and shall be permitted to examine and copy such books and records upon twenty (20) Business Days notice having been given by
Licensor and at all reasonable times on Business Days for the purpose of certifying to Licensor either (a) that the Sales Price calculated and reported in any Year is correct; or (b) that the Net Sales calculated and reported by Licensee
or its Affiliates during any Year were calculated correctly in accordance with this Agreement; or (c) that the Supply Income calculated and reported in any Year is correct; or (d) that the figures in any report issued by Licensee under
Clauses 6.7.7, 6.14, 10.2 or 10.14 during any Year were accurately calculated and reported by Licensee or its Affiliates in accordance with this Agreement (and in either case if such certification cannot be given specifying the reasons why which
will enable the Parties to recalculate any relevant sums); 

  

	 	10.17.2	prior to any such examination taking place, such firm of accountants shall undertake to Licensee that they shall 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 Licensor, but shall only use the same for the purpose of the reviews and/or calculations which they need to perform in
order to issue the certificate to Licensor which this Clause 10.17 envisages; 

  

	 	10.17.3	any such access examination and certification shall occur no more frequently than once per Year and will not go back over Records more than two (2) Years old unless a
discrepancy is found; 

  

	 	10.17.4	Licensee shall make available personnel to answer queries on all Records required for the purpose of that certification; 

  

	 	10.17.5	 if the certification is in disagreement with the Net Sales or Supply Income as calculated by Licensee, Licensee shall notify Licensor within ten (10) days of
receipt by Licensee whether or not Licensee agrees with the certification. If Licensee notifies its agreement with the certification within the ten (10) day period or fails to give any notification within that period, 

  

 45 

	 	 
the Net Sales/Supply Income calculated by the certification shall be used for purposes of calculating any monies owed and any monies owed by one Party to the
other shall be paid by that Party. The Cost of the accountant shall be the responsibility of Licensee if the recalculation shows Licensee’s previous figures supplied to Licensor to be inaccurate by more than the lesser of five hundred thousand
US Dollars (US$500,000) or three percent (3%) of Net Sales or Supply Income (as applicable) in such Year and the responsibility of Licensor otherwise. 

  

	10.18	If there is any dispute between the Parties as to any matter relating to the milestones due under Clause 10.11, the Supply Income or the Invoice Income in any Year or the
calculation of the Reconciliation Amount, or in connection with the determination of the Sales Price or Purchase Price or if within ten (10) days starting on the day after receipt of the notification referred to in Clause 10.17.5, Licensee and
Licensor have not agreed to the terms in dispute in relation to the certification, either Party may refer the items in dispute to a partner of at least ten (10) years qualified experience at an independent, internationally recognized, public
accounting firm agreed by the Parties in writing for final and binding resolution, or failing agreement on the identity of the public accounting firm within fifteen (15) days starting on the day after receipt of the notification, an
independent, internationally recognized, public accounting firm appointed on the application of either Party by the President for the time being of the Institute of Chartered Accountants in England and Wales. Such person appointed under this Clause
10.18 shall act otherwise on the Terms of Schedule 2 save that: 

  

	 	10.18.1	such person’s terms of reference shall be to determine the matters in dispute within twenty (20) days of his appointment; 

  

	 	10.18.2	the Parties shall each provide such person with all information relating to the items in dispute which such person reasonably requires and such person shall be entitled (to the
extent he considers appropriate) to base his determination on such information; and 

  

	 	10.18.3	such person’s Costs shall be paid by Licensee and Licensor as such person may determine. 

  

	10.19	 All payments to Licensor under the terms of this Agreement are expressed to be exclusive of sales or value added tax, which may be due on any invoice and Licensee

  

 46 

	 	 
shall pay to Licensor in addition to those payments all such sales and value added tax for which Licensor is liable to account to the relevant tax
authorities in relation to any supply made or deemed to be made for sales or value added tax purposes under this Agreement on receipt of a tax invoice or invoices from Licensor. 

  

	10.20	All payments made to Licensor under this Agreement shall be made by wire transfer to the bank account that may be notified by Licensor to Licensee from time to time.

  

	10.21	If either Party fails to make any payment to the other Party hereunder on the due date for payment and the payment is not in dispute between the Parties, or in the event of a
dispute that has not been resolved, without prejudice to any other right or remedy available to that Party, that Party expecting payment shall be entitled to charge the other Party interest (both before and after judgement) on the amount unpaid at
the annual rate of LIBOR or EURIBOR plus two per cent (2%) calculated on a daily basis until payment in full is made without prejudice to that Party’s right to receive payment on the due date. 

  
 11. MANUFACTURE 
  

	11.1	 Within twelve (12) months of the Effective Date the JSC shall meet to identify contract manufacturers that may be suitable to act as such a second source (the
“Second Source”) to manufacture Product for sale in the Territory. Following such meetings Licensee may meet with such potential Third Party manufacturers of Product to discuss their capability to manufacture Product. Following such
meetings Licensee shall present to Licensor a list of preferred Third Parties to act as Second Source and the Parties shall discuss which Third Party to appoint as Second Source. The final decision on such selection of a Second Source and the terms
on which such Third Party is appointed shall rest with the Licensor acting reasonably, provided that it is acknowledged that Licensor may require any such Second Source to enter into a direct undertaking with the Licensor that the Second Source will
not use all or any part of the technology and manufacturing processes disclosed to it and implemented for the purposes of obtaining Regulatory Approvals necessary for the manufacture of the Product by it, other than for the manufacture of the
Product for and on behalf of Licensee. The Third Party appointed as the Second Source shall be appointed as Licensor’s sub-contractor provided always that all cost and expenses incurred by the Second Source shall be for the sole account of the
Second Source and / or the 

  

 47 

	 	 
Licensee and Licensor shall not be liable therefor in any manner. Following the appointment of the Second Source, Licensee shall, at its own cost and
expense, assist such Third Party to obtain all Regulatory Approvals necessary for such Third Party to act as Second Source. Licensor shall use Commercially Reasonable Efforts to assist Licensee in this respect by providing the necessary technology
transfer with respect to the manufacture of Product and such other assistance as Licensee may request subject to the following: 

  

	 	11.1.1	when Licensor provides this technology transfer Licensor is not required to make changes to its processes or formulation, and its obligations in connection with that technology
transfer will be limited to such time and effort as Licensor can reasonably afford without being to the detriment of Licensor’s business and on a schedule to be agreed between the Parties at the time. 

  

	 	11.1.2	Licensee shall reimburse Licensor all its costs for the whole of the foregoing including (i) reasonable lawyers’ fees and disbursements, (ii) for the time and effort
of its employees effecting the technology transfer at a reasonable hourly rate to be agreed between the Parties at the time, (iii) any travel, accommodation and other expense incurred by such employees effecting this transfer, and (iv) any
other costs associated with the technology transfer or the appointment of the Second Source for which Licensor can provide evidence in Document form. 

  

	 	11.1.3	Licensor’s obligation for technology transfer is limited to transferring technology and Documents that are in Licensor’s possession or is Controlled by Licensor.

  
 Once the Second Source is appointed Licensee
undertakes not to place orders for Product with the Second Source unless Licensee’s right to manufacture Product arises pursuant to Clause 11.3 and as a result the Second Source shall not be entitled to manufacture Product unless and until the
Licensee shall have a license to manufacture under Clause 11.3. 
  

	11.2	In the event that no Second Source is validated, in accordance with the terms of Clause 11.1, by the Manufacture Date: 

  

	 	11.2.1	If no Second Source has been agreed the provisions of Clause 11.1 shall apply immediately, save that 

  

 48 

	 	(i)	The final decision on selection of the Second Source shall be with the Licensee; 

  

	 	(ii)	The Third Party appointed as the Second Source shall be appointed as the Licensee’s sub-contractor; 

  

	 	(iii)	Licensor shall provide all such assistance with the technology transfer in accordance with such timetable as may reasonably be required by Licensee and such Second Source;

  

	 	(iv)	Licensee shall reimburse to Licensor its reasonable costs for effecting technology transfer, being (a) time of its employees, at a reasonable hourly rate agreed between the
parties and (b) any travel, accommodation and other expense incurred by such employees effecting the transfer, as evidenced by Licensor in Document form. 

  

	 	11.2.2	If the Second Source has not been validated the provisions of Clause 11.1 subject to the terms of Clause 11.2.1, shall continue insofar as required to enable validation to be
effected; 

  
 and where this Clause 11.2 applies
Licensor shall continue to supply Product under the terms of this Agreement, unless and until such Second Source has been validated and has commenced and scaled up manufacture to satisfy the requirements for Product of Licensee but in any event no
longer than (i) [*] ([*]) months after expiry of the [*] ([*]) month notice period to be given under Clause 11.3.1, or (ii) [*] ([*]) months after the
expiry of the [*] ([*]) month notice period under Clause 11.5. 
  

	11.3	Notwithstanding the terms of Clauses 8 and 9, Licensee shall have an immediate licence to manufacture, or have manufactured on its behalf, Product for its use in the Territory in
the event that: 

  

	 	11.3.1	Licensor shall be in material breach of its obligations under this Agreement in connection with manufacture and supply of Product under Clauses 8 or 9, and Licensee shall serve
notice in writing of its intent to effect manufacture under this Clause 11.3 and Licensor shall not have remedied such breach within three (3) months of service of such notice; or 

  

 49 
 * Confidential treatment requested; certain information 
 omitted and filed separately with the SEC. 

	 	11.3.2	Licensor shall have given notice to Licensee under Clause 11.5 of Licensor’s intention to cease manufacture and supply of Product to Licensee under the terms of this Agreement.

  

	11.4	Licensee shall procure that in the exercise of its rights to manufacture or have manufactured Product: 

  

	 	11.4.1	Any manufacturer shall be appointed as a sub-contractor, in accordance with the terms of Clause 16.3; 

  

	 	11.4.2	All Product shall be manufactured in the manner specified in the NDA and in accordance with GMP and the Specifications; 

  

	 	11.4.3	Any manufacturer shall undertake to create and retain manufacturing, analytical and distribution records, testing and releasing materials, production and quality controls, including
in-process controls and all necessary stability studies, and analysis relating to the Product all in accordance with the Specifications and GMP; 

  

	 	11.4.4	Any manufacturer shall supply the Product in Packaging which incorporates all information (including the patient information leaflet) that may be required by the NDA, any Regulatory
Authority or any Applicable Law from time to time; 

  

	 	11.4.5	Licensee (or its manufacturer) shall investigate promptly and report to Licensor all significant customer complaints or reports of incidents relating to the Product of which it has
knowledge whether in the Territory or elsewhere. 

  

	11.5	Licensor has the option (but no obligation) upon service of not less than twenty four (24) months notice in writing, to expire at the end of a Year, to cease to supply Product
to Licensee, under the terms of this Agreement. 

  
 12.
REGULATORY AND OTHER MATTERS 
  

	12.1	 During the Manufacturing Period, except as may otherwise be agreed, Licensee shall refer any significant complaints or reports of incidents which it or any of its
Affiliates receives concerning the Product affecting quality to Licensor within seven (7) Business Days of Licensee’s receipt of the same, provided, that all complaints concerning suspected or actual Product tampering, contamination or
mix-up shall be 

  

 50 

	 	 
delivered within two (2) Business Days of receipt of the same by Licensee or any Affiliate or subcontractor of Licensee. For the avoidance of doubt, to
the extent that any such complaint amounts to or relates to an adverse reaction the terms of the pharmacovigilance procedures set out in the Safety and Quality Agreement shall apply in relation to such complaint; in the event of any inconsistency
between the application of this Clause 12.1 and the Safety and Quality Agreement, the terms of the Safety and Quality Agreement shall prevail. 

  

	12.2	In addition to the requirements of Clause 12.1 and the Safety and Quality Agreement, during the Manufacturing Period, each Party agrees to keep the other Party informed,
commencing within two (2) Business Days of notification of any action by, or notification or other information which it receives (directly or indirectly) from any Regulatory Authority, which: (a) raises any material concerns regarding the
safety or efficacy of any Product; (b) which indicates or suggests a potential material liability for either Party to Third Parties arising in connection with any Product; or (c) which is reasonably likely to lead to a recall of any
Product, including in all cases, but not limited to: 

  

	 	12.2.1	Regulatory Authority inspections of manufacturing, distribution or other related facilities, in which Product is manufactured, stored or otherwise present; 

 

	 	12.2.2	receipt of a warning letter from any Regulatory Authority relating to any Product; or 

  

	 	12.2.3	initiation of any Regulatory Authority investigations, detention, seizure or injunction concerning any Product. 

  

	12.3	Within thirty (30) days of expiry of the Manufacturing Period the Parties shall enter into a safety agreement to cover the Parties’ ongoing responsibilities regarding
safety issues, pharmocovigilence and adverse event reporting. 

  
 13. EXCLUSIVITY 
  
 During the term of this
Agreement neither Licensee nor any Salix Affiliate will distribute, market, sell or otherwise Commercialise in the Territory any pharmaceutical product which is licensed for use for the Indication provided that nothing contained herein shall prevent
Licensee or any such Salix Affiliate from the development, distribution, marketing, sale or other exploitation of Visicol. 
  

 51 

 14. TRADE MARKS AND DOMAIN NAMES 
  

	14.1	The Parties agree that, subject to consultation through the JSC, it shall be Licensor’s responsibility and expense to provide a single Trademark for Product satisfactory to the
Competent and/or Regulatory Authorities in the Territory which can be used for Launch of such Product in the Territory. It is intended that such trade mark shall be the First Trademark. If the FDA requires any different trademark and the Licensee is
prevented from using the First Trademark on the Product the Parties shall through the JSC determine the New Trademark for the Product Provided that the New Trademark (i) must be acceptable to Licensor (acting reasonably) having regard to
Licensor’s desire to have a global Trademark, (ii) must be acceptable to the FDA, (iii) all costs (including reasonable attorneys’ fees) for filing and prosecuting applications to register, and maintaining registration of such
New Trademark in the Territory will be paid by Licensor and (iv) any New Trademark shall be registered in the name of, be owned by and be the sole property of Licensor and subject to the terms and conditions set forth in this Clause 14.

  

	14.2	Licensee agrees to Commercialise Product solely under the Trademark. Licensee shall ensure that each reference to and use of the Trademark by Licensee in any marketing material
related to the Product is acceptable to Licensor as specified in Clause 14.4 and is accompanied by an acknowledgement that the Trademark is a trademark or registered trademark owned by Licensor and used by Licensee under license.

  

	14.3	The initial Trade Dress for the Product shall be as set by the Licensor as part of its global commercialisation plan. Licensee may request Licensor to modify or alter the Trade
Dress for the Product. In such a case Licensor shall implement such modifications or alterations on the following terms: 

  

	 	14.3.1	 Licensee shall supply Licensor with full details of such new Trade Dress and if the cost and expense of printing Packaging with such new Trade Dress is greater than
the cost and expense of the two colour printing process intended to be used by or on behalf of Licensor for the Trade Dress outside the Territory, Licensor shall, within sixty (60) days of receipt of details of 

  

 52 

	 	 
such new Trade Dress, advise Licensee in writing of such additional cost and expense relating to preparing and printing such new Trade Dress specified as a
price per Unit (or other package volumes) as agreed between the Parties from time to time; 

  

	 	14.3.2	if Licensee decides to proceed, Licensor shall be responsible for commissioning and acquiring all related artwork, plates and other materials necessary to print the Packaging in the
new Trade Dress at Licensee’s cost and expense; and 

  

	 	14.3.3	if Licensee decides to proceed, the additional price per Unit identified by Licensor under Clause 14.3.1 shall be added to the Purchase Price under Clause 10.1.

  

	14.4	A copy of the marketing material (which the Parties agree may be in draft layout) using or otherwise containing the Trademarks in the form to be distributed, referenced or otherwise
used by Licensee in connection with its Commercialisation of the Product shall be provided to Licensor not less than thirty (30) days before Licensee intends to release, distribute, reference or use such material and Licensor shall have fifteen
(15) Business Days from receipt of the same to provide Licensee with any comments or suggested amendments in relation to the use of the Trademark. Licensee shall take such reasonable comments or suggested amendments into account.

  

	14.5	The final decision on Packaging, design and Labelling shall be Licensee’s; Licensor shall as directed by Licensee (acting in accordance with the requirement of the relevant
Marketing Authorisation), ensure that the external Packaging of the Product complies with the Applicable Law of the Territory. Save to the extent Licensee may be required to do so by a Competent or Regulatory Authority or pursuant to the
requirements of the Marketing Authorisation, Licensee shall not alter the Packaging or Labelling of the Product nor shall Licensee conceal or otherwise obscure, remove or otherwise interfere with the Trademarks or other markings, which Licensor, in
its sole discretion, may include on the Packaging or Labelling of the Product. 

  

	14.6	Licensee shall provide Licensor with information and examples as to Licensee’s use of the Trademarks, as Licensor may request, to permit Licensor’s proper maintenance and
registrations of the Trademarks. 

  

 53 

	14.7	Licensee expressly acknowledges that Licensor owns the Trademarks, and the goodwill associated therewith. Licensee shall not attack, dispute, or contest the validity of
Licensor’s ownership of the Trademarks or any registrations issued or issuing with respect thereto, both during the term of this Agreement and/or thereafter. Licensee further agrees that any use of the Trademarks by Licensee shall be for the
benefit of Licensor and any goodwill accrued in connection with the use and display of the Trademarks shall accrue solely to the benefit of Licensor and not Licensee. In the event Licensee acquires any rights relating to the Trademark for any
reason, Licensee agrees to assign to Licensor, at no cost to Licensor, all such rights, together with any related goodwill. Licensee shall not do or perform any act that may endanger, destroy, or similarly affect the value of the goodwill pertaining
to the Trademarks nor do any act that might support a petition to cancel or otherwise invalidate any registration relating to the Trademarks or cause the applicable registrar to require a disclaimer of exclusive rights in such Trademarks nor assist
any other person or other entity, directly or indirectly, in so doing. Licensee will, at any time, upon the request of Licensor, execute any documents reasonably required by Licensor to confirm Licensor’s ownership of all such rights in the
Trademarks. 

  

	14.8	Licensee shall not sell or otherwise distribute Product under any other trademark, logo or other indicia other than as contemplated under the terms and conditions of this Agreement.

  

	14.9	Licensee shall not use any trademarks or trade names (other than the Trademarks) so resembling the Trademarks so as to be likely to cause confusion, dilution, or deception. Licensee
shall not register the Trademarks in its own name nor attempt to register any trademarks, marks, or trade names confusingly similar to the Trademarks. 

  

	14.10	Before Licensee uses a domain name in connection with the Product in the Territory, Licensee and Licensor shall agree as to the design of the homepage of such domain name, such
agreement not to be unreasonably withheld or delayed. Licensor shall own all domain names that incorporate the Licensor’s name or a Trademark. 

  
 15. INTELLECTUAL PROPERTY - INITIAL FILINGS AND OWNERSHIP 
  

	15.1	Any and all Licensor IP shall as between Licensee and Licensor remain vested in and be owned by Licensor. 

  

 54 

	15.2	Any and all Licensee IP shall as between Licensee and Licensor remain vested in and be owned by Licensee. 

  

	15.3	Licensor shall at its own cost and expense maintain the Trademarks in the Territory and shall be solely responsible for the filing, prosecution and maintenance of the Trademarks in
the Territory. 

  
 16. INTELLECTUAL PROPERTY - LICENCES

  

	16.1	With effect from the Effective Date, Licensor hereby grants to Licensee an exclusive licence under the Licensor IP to make, have made, use, have used, Commercialise and have
Commercialised, Product in the Territory but always subject to the other provisions of this Agreement. Licensee shall not exercise its right of manufacture save as permitted under Clause 11. 

  

	16.2	Forthwith following the Effective Date and during the term of this Agreement Licensee shall disclose and make available to Licensor all Licensee IP in so far as the same may
reasonably be considered to be of assistance to the Licensor in the global Commercialisation of the Product and grant to Licensor a royalty free irrevocable licence to use the same in connection with the Commercialisation of the Product in all
countries outside the Territory. 

  

	16.3	Licensee shall have the right to sub-contract or sublicense the whole of or part of the Lifecycle Management Plan and any of its rights and obligations hereunder. The appointment of
any sub-contractor or sub-licensee shall be on the following terms: 

  

	 	16.3.1	as between the Licensee and any sub-contractor or sub-licensee, all intellectual property created by such sub-contractor or sub-licensee in connection with the Product shall be
owned by Licensee and shall become Licensee IP; and 

  

	 	16.3.2	that the sub-contractor or sub-licensee shall be subject in its contract with the Licensee to terms relating to confidentiality substantially in the form of Clause 18
(Confidentiality); and 

  

	 	16.3.3	notwithstanding any such subcontract or sub-license, Licensee shall remain solely responsible for the performance of its obligations hereunder and any breach by sub-contractor or
sub-licensee shall be deemed a breach by Licensee. 

  

 55 

	16.4	Licensor acknowledges that Licensee alone has the right to Commercialise the Product in the Territory and Licensor shall not itself either directly or indirectly effect any
Commercialisation of the Product in the Territory, during the Term. For the avoidance of doubt, this provision shall not prevent Licensor from contributing to or advertising in international journals or from attending and/or exhibiting at any
international conference held in the Territory. 

  

	16.5	Licensor undertakes and agrees that during the term of this Agreement it will not, and will procure that its Affiliates do not, appoint any other licensee, distributor, reseller or
other person to Commercialise the Product in the Territory nor will it, and it will procure that its Affiliates do not, directly or indirectly supply the Product to distributors, resellers or users located within the Territory.

  

	16.6	Licensor shall, and Licensor shall procure that its Affiliates shall, during the term of this Agreement promptly refer to Licensee (or as Licensee shall direct) all enquiries it may
receive for Product for sale or ultimate delivery in the Territory. 

  
 17. IP – MAINTENANCE, PROSECUTION AND DEFENCE 
  

	17.1	Licensor shall at its own cost and expense be solely responsible for the filing, prosecution and maintenance of Licensor Patent Rights and the Trademarks in the Territory using
reasonable endeavours to prosecute all patent applications forming part of Licensor Patent Rights to grant, including the conduct of any claims or proceedings relating to them (including but not limited to any interference, reissue or re-examination
or opposition or revocation proceedings). Licensor shall keep Licensee promptly informed of all filings made for Licensor Patent Rights and the Trademarks including sending Licensee a copy of any such filing and otherwise shall keep Licensee
informed of all material developments in relation to the Licensor Patent Rights and the Trademarks and shall, upon Licensee’s request, provide Licensee with copies of relevant documents related to the filing, prosecution and maintenance of the
Licensor Patent Rights and the Trademarks. 

  

	17.2	 In the event that Licensor declines to file or, having filed, declines to further prosecute and maintain any pending Licensor Patent Rights in the Territory,
Licensor shall provide Licensee with written notice thereof. In the case where Licensor has filed but is declining to further prosecute or maintain Licensor Patent Rights, such notice shall be given at least thirty (30) days prior to the
expiration of any official substantive 

  

 56 

	 	 
deadline relating to such activities. In any of such circumstances Licensee shall have the right to decide that Licensee should file, continue to file or
prosecute such Licensor Patent Rights and in such case Licensee shall give written notice to Licensor. Licensor shall upon receipt of any such notice from Licensee transfer to Licensee all its files relating to the relevant Licensor Patent Rights
and execute any documents to transfer control of such filing, prosecution and maintenance to Licensee and thereafter Licensee shall be responsible for the cost and expense of prosecuting and maintaining such Licensor Patent Rights and the same shall
become Licensee IP for all purposes under the terms of this Agreement. 

  

	17.3	In the event that Licensee declines to file or, having filed, declines to further prosecute and maintain any pending Patent Rights within the Licensee IP (“Licensee Patent
Rights”), Licensee shall provide Licensor with written notice thereof. In the case where Licensee has filed but is declining to further prosecute or maintain Licensee Patent Rights, such notice shall be given at least thirty (30) days
prior to the expiration of any official substantive deadline relating to such activities. In any of such circumstances Licensor shall have the right to decide that Licensor should file, continue to file or prosecute such Licensee Patent Rights, and,
in such case, Licensor shall give written notice to Licensee. Licensee shall upon receipt of any such notice from Licensor transfer to Licensor all its files relating to the relevant Licensee Patent Rights and execute any documents to transfer
control of such filing, prosecution and maintenance to Licensor and thereafter Licensor shall be responsible for the cost and expense of prosecuting and maintaining such Licensee Patent Rights and such Licensee Patent Rights shall thereafter become
Licensor Patent Rights for all purposes under the terms of this Agreement. 

  

	17.4	Notwithstanding any other provision of this Clause 17, the Parties shall cause their patent attorneys to liaise so far as practicable with respect to the filing, prosecution and
maintenance of Patents Rights falling within Licensee Patent Rights and Licensor Patent Rights and the Trademarks. Each Party shall be responsible for the cost of its own patent attorney incurred pursuant to this Clause 17.4.

  

	17.5	In the case where either Party believes that an infringement by a Third Party of the Licensor IP may be occurring in the Territory, such Party shall disclose full details of the
potential infringement to the other Party. 

  

 57 

	17.6	Where an infringement of Licensor IP or any infringement of the Trademark is occurring in the Territory Licensee shall have the first right to, but shall not be obliged to, at its
own cost and expense, enforce the same in accordance with the following: 

  

	 	17.6.1	Licensee shall have sole conduct of the claim and any proceedings including any counterclaim for invalidity or unenforceability or any declaratory judgment action and including the
right to settle. Where Licensee decides to commence proceedings, in respect of the Licensor IP it shall be entitled to require Licensor to join Licensee as co-plaintiff. In such case Licensor shall provide all necessary assistance to Licensee in
relation to any such proceeding provided that Licensee shall on demand by Licensor indemnify Licensor against the Costs of such activity unless Licensor elects to be separately represented (which shall be at Licensor’s discretion) in which case
such separate representation shall be at Licensor’s own cost and expense. Licensee shall have the sole right to settle such proceedings including any counterclaim for invalidity or unenforceability, provided that such settlement does not
include a licence under the relevant Licensor IP; 

  

	 	17.6.2	if Licensee succeeds in any such infringement proceedings whether at trial or by way of settlement, Licensee shall be entitled to retain (i) such part of any award of Costs and
damages made in such proceedings or settlement sum as is equal to Licensee’s Costs of taking the proceedings; and (ii) [*]% of the remainder of the award, and shall promptly pay the remaining [*] per cent
([*]%) of the remainder to the Licensor; 

  

	 	17.6.3	 if Licensee fails to take any such proceedings, Licensor may give Licensee notice requesting Licensee to take such proceedings within thirty (30) days of the
date of notice and if Licensee decides not to do so Licensor shall be entitled to do so at its own cost and expense in which case it shall have sole conduct of any claim or proceedings including any counterclaim for invalidity or unenforceability or
any declaratory judgment action. Licensee shall provide all necessary assistance to Licensor in relation to such proceedings and Licensor shall on demand by Licensee indemnify Licensee against the Costs of such activity, unless Licensee elects to be
separately represented (which shall be at Licensee’s discretion), in which case such 

  

 58 
 * Confidential treatment requested; certain information 
 omitted and filed separately with the SEC. 

	 	 
separate representation shall be at Licensee’s cost and expense. Licensor shall have sole right to settle such proceedings including any counterclaim
for invalidity or unenforceability. If Licensor succeeds in any such proceedings it shall be entitled to retain the whole of any award of Costs and damages made or settlement sum paid. 

  

	17.7	In the event that Licensee or Licensor identifies any Patent Rights of a Third Party which it reasonably believes that Licensee or any of its Affiliates or sublicensees might
infringe by the conduct of the Lifecycle Management Plan or Commercialisation of Product in the Territory, Licensee shall in its discretion be responsible as between Licensor and Licensee for taking a licence or otherwise defending any claim or
proceeding based on such Third Party Patent Rights in the Territory on such terms as it may in its sole discretion determine and at its sole cost and expense and liability, provided that Licensor shall give (at Licensor’s expense) such
assistance as Licensee may reasonably require in connection with any such assistance. 

  

	17.8	Each Party shall promptly take all necessary steps to facilitate the other Party’s application (made either on the other Party’s own initiative or promptly on request by
the first Party) for extensions to the term of Patent Rights, including applications for supplementary protection certificates and patent term extensions. 

  
 18. CONFIDENTIALITY AND NON-DISCLOSURE 
  

	18.1	At all times during the term of this Agreement each Party (the “Receiving Party”) shall, and shall cause its officers, directors, employees, consultants, Affiliates
and, in respect of Licensee, its sub-licensees to, keep confidential and not publish or otherwise disclose and not use, directly or indirectly, for any purpose, any Confidential Information provided to it by the other Party (the “Disclosing
Party”), except to the extent such disclosure or use is expressly permitted by the terms of this Agreement or is reasonably necessary for the performance of this Agreement. Licensee shall be treated as the Disclosing Party in respect of any
Licensee IP, Licensor shall be treated as the Disclosing Party in respect of any Licensor IP. 

  

 59 

	18.2	Each Party may disclose Confidential Information provided to it by the other Party to the extent that such disclosure is: 

  

	 	18.2.1	made in response to a valid order of a court of competent jurisdiction or other Competent Authority; provided, however, that the Receiving Party shall first have given notice to the
Disclosing Party and given the Disclosing Party a reasonable opportunity to quash any such order or obtain a protective order requiring that the Confidential Information and documents that are the subject of such order be held in confidence by such
court or authority or, if disclosed, be used only for the purpose for which the order was issued; and provided further that if such order is not quashed or a protective order is not obtained, the Confidential Information disclosed in response to
such court or governmental order shall be limited to that information that is legally required to be disclosed in response to such court or governmental order; 

  

	 	18.2.2	made by a Party or its Affiliates to a Regulatory Authority as may be necessary or useful in connection with any filing, application or request for a Marketing Authorisation;
provided, however, that reasonable measures shall be taken to assure confidential treatment of such information, to the extent such protection is available; 

  

	 	18.2.3	made by the Receiving Party to a patent authority as may be necessary or useful for purposes of obtaining or enforcing a Patent Right (consistent with the terms and conditions of
Clause 17); provided, however, that reasonable measures shall be taken to assure confidential treatment of such information, to the extent such protection is available; 

  

	 	18.2.4	otherwise required by law, regulation or established procedure, (including any filing required by any national securities exchange or another similar regulatory body (whether of the
whole or any redacted version) provided, however, that the Receiving Party shall (a) provide the Disclosing Party with reasonable advance notice of and an opportunity to comment on any such required disclosure, (b) if requested by the
Disclosing Party, seek confidential treatment with respect to any such disclosure to the extent available, and (c) use good faith efforts to incorporate the comments of the Disclosing Party in any such disclosure or request for confidential
treatment; or 

  

 60 

	 	18.2.5	made by a Party or its Affiliates to Third Parties as may be necessary or useful in connection with the Commercialisation of Product as contemplated by this Agreement, including
subcontracting transactions in connection therewith. 

  

	18.3	Notwithstanding the foregoing, Confidential Information shall not include any information that: 

  

	 	18.3.1	is or hereafter becomes part of the public domain by public use, publication, general knowledge or the like through no wrongful act, fault or negligence on the part of the Receiving
Party; 

  

	 	18.3.2	can be demonstrated by documentation or other competent proof to have been in the Receiving Party’s or its Affiliates’ possession prior to disclosure by the Disclosing
Party; 

  

	 	18.3.3	is subsequently received by the Receiving Party or its Affiliates from a Third Party who is not bound by any obligation of confidentiality with respect to the said information;

  

	 	18.3.4	is generally made available to Third Parties by the Disclosing Party without restriction on disclosure; or 

  

	 	18.3.5	is independently developed by or for the Receiving Party or its Affiliates without reference to the Disclosing Party’s Confidential Information. 

  

	18.4	Specific aspects or details of Confidential Information shall not be deemed to be within the public domain or in the possession of the Receiving Party merely because the
Confidential Information is embraced by more general information in the public domain or in the possession of the Receiving Party. Further, any combination of Confidential Information shall not be considered in the public domain or in the possession
of the Receiving Party merely because individual elements of such Confidential Information are in the public domain or in the possession of the Receiving Party unless the combination and its principles are in the public domain or in the possession
of the Receiving Party. 

  

	18.5	 The Parties acknowledge that scientific publications must be strictly monitored to prevent any adverse effect from premature publications of results of the research
and development activities hereunder. Accordingly, the Parties shall not publish, present 

  

 61 

	 	 
or otherwise disclose any material related to the Lifecycle Management Plan or the Commercialisation of the Product without the prior written consent of the
JSC (such consent not to be unreasonably withheld or delayed). Each Party’s contribution to such material results shall be duly recognised in such publications. 

  

	18.6	Neither Party shall mention or otherwise use the name, insignia, symbol, trademark, trade name or logotype of the other Party or its Affiliates in any publications, press release,
promotional material or other form of publicity without the prior written consent of the other Party in each instance (which shall not be unreasonably withheld or delayed), except for those disclosures for which consent has previously been obtained.
The restrictions imposed by this Clause 18.6 shall not prohibit either Party from making any disclosure identifying the other Party that is required by Applicable Law or the requirements of a national securities exchange or another similar
regulatory body, provided that any such disclosure shall be governed by this Clause 18.6. 

  

	18.7	Notwithstanding the foregoing, Licensor shall be entitled to include the name of Licensee within a published list of collaborators. 

  

	18.8	Notwithstanding the foregoing, each Party shall have the right to use the name of the other party and the Products to the extent necessary or useful in connection with the
Commercialisation of Product as contemplated by this Agreement, including subcontracting and sublicensing transactions in connection therewith. 

  

	18.9	Neither Party shall issue any press release or make any other public announcement or statement concerning this Agreement or the transactions covered by it without the prior written
approval of the other Party, except that each Party (after consultation with counsel and after informing the other Party) may in accordance with Clause 18.2 make such announcements and disclosures, if any, as may be required by Applicable Law or the
requirements of a national securities exchange or another similar regulatory body, or in connection with a public offering of securities or any filing with the U.S. Securities and Exchange Commission or a foreign equivalent.

  

 62 

 19. WARRANTIES AND UNDERTAKINGS 
  

	19.1	Each Party represents and warrants to the other Party that: 

  

	 	19.1.1	it has legal power, authority and right to enter into this Agreement and to perform its respective obligations in this Agreement; and 

  

	 	19.1.2	it is not at the Effective Date a party to any agreement, arrangement or understanding with any Third Party which in any manner prevents it from fulfilling or affects its ability to
perform any of its obligations under the terms of this Agreement to a material extent; and 

  

	 	19.1.3	it has disclosed to the other all information and material which is material to the decision of the other to enter into this Agreement. 

  

	19.2	Licensor represents and warrants to Licensee that Licensor is sole owner or licensee of Licensor IP with the right to grant to Licensee the rights which are granted in this
Agreement, free and clear of any liens or encumbrances which would prevent or impair the grant of such rights. 

  

	19.3	Licensor represents and warrants that as at the Effective Date and so far as Licensor is aware, there are no actual or threatened proceedings relating to infringement of Third Party
intellectual property rights by the use of Licensor IP and, further represents and warrants that the Licensor IP is not the subject of any actual or threatened challenge or revocation proceedings. 

  

	19.4	Save as is expressly stated in Clauses 19.1, 19.2 and 19.3 no representation, condition or warranty whatsoever is made or given by or on behalf of Licensee or Licensor. All
conditions and warranties whether arising by operation of law or otherwise are hereby expressly excluded including any conditions and warranties to the effect that: 

  

	 	19.4.1	any of the Licensor IP is valid or enforceable; or 

  

	 	19.4.2	any of the acts to be undertaken by Licensee or Licensor pursuant to this Agreement will not infringe the rights of Third Parties. 

  
 20. INDEMNIFICATION AND INSURANCE 
  

	20.1	 In addition to any other remedy available to Licensor, subject to Clauses 20.3 and 20.4, Licensee shall indemnify, defend and hold harmless Licensor, its Affiliates
and its and their respective directors, officers and employees in full and on demand, from 

  

 63 

	 	 
and against any and all Losses incurred by them to the extent resulting from or arising out of or in connection with any claims made or suits brought by a
Third Party against Licensor, its Affiliates or their respective directors, officers or employees (collectively, “Licensor Third Party Claims”) that allege that the claimant has suffered personal injury or death as a result of the
use of the Product marketed or sold by the Licensee, its Affiliates, its sub-licensees, distributors or agents; except for any Losses for which Licensor has an obligation to indemnify Licensee and its Affiliates pursuant to Clause 20.2

  

	20.2	In addition to any other remedy available to Licensee, subject to Clauses 20.3 and 20.4, Licensor shall indemnify, defend and hold harmless Licensee, its Affiliates, and its and
their respective directors, officers and employees in full and on demand, from and against any and all Losses incurred by them to the extent resulting from or arising out of or in connection with any claims or suits brought by a Third Party against
Licensee, its Affiliates or their respective directors, officers or employees (collectively, “Licensee Third Party Claims”) that allege that the claimant has suffered personal injury or death as a result of Licensor or its
Affiliates or sub-licensee’s commercialisation of Product outside the Territory or that arise or result from any failure by Licensor or its Affiliates or sub-contractors to supply Product manufactured in the manner specified in the NDA and in
accordance with GMP, Specifications and the Safety and Quality Agreement but only to the extent that such failure caused such Losses and provided always that Licensor’s total liability under this Clause 20.2 under all Indemnification Claim
Notices served in any one Year shall not exceed US$[*] ([*] US Dollars). 

  

	20.3	 An Indemnified Party shall give the Indemnifying Party prompt written notice of any Loss or discovery of fact upon which such Indemnified Party intends to base a
request for indemnification under Clause 20.1 or 20.2 (an “Indemnification Claim Notice”). In no event shall the Indemnifying Party be liable for any Loss that results from any delay in providing the Indemnification Claim
Notice. Each Indemnification Claim Notice shall contain a description of the claim and the nature and amount of the Loss claimed (to the extent that the nature and amount of such Loss is known at such time). The Indemnified Party shall furnish
promptly to the Indemnifying Party copies of all correspondence, communications and official documents (including court documents) received in respect of any such Loss. For the avoidance of doubt, all indemnification 

  

 64 
 * Confidential treatment requested; certain information 
 omitted and filed separately with the SEC. 

	 	 
claims in respect of a Party, its Affiliates or their respective directors, officers, employees and agents (each, an “Indemnitee”) shall be
made solely by such Party to this Agreement. 

  

	20.4	The obligations of an Indemnifying Party under this Clause 20 shall be governed by and contingent upon the following: 

  

	 	20.4.1	At its option, the Indemnifying Party may assume the defence of any Third Party Claim (which, for the avoidance of doubt, shall include the conduct of all dealings with such Third
Party) by giving written notice to the Indemnified Party within fourteen (14) days after the Indemnifying Party’s receipt of an Indemnification Claim Notice. The assumption of the defence of a Third Party Claim by the Indemnifying Party
shall not be construed as an acknowledgement that the Indemnifying Party is liable to indemnify any Indemnitee in respect of the Third Party Claim, nor shall it constitute a waiver by the Indemnifying Party of any defences it may assert against any
Indemnified Party’s claim for indemnification. 

  

	 	20.4.2	Upon the assumption of the defence of a Third Party Claim by the Indemnifying Party: 

  

	 	(a)	subject to the provisions of Clause 20.4.3, it shall have the right to and shall assume sole control and responsibility for dealing with the Third Party and the Third Party Claim,
including the right to settle the claim on any terms the Indemnifying Party chooses, but at all times in accordance with the provisions of Clause 20.4.4; 

  

	 	(b)	if it chooses, the Indemnifying Party may appoint as counsel in the defence of the Third Party Claim any law firm or counsel selected by the Indemnifying Party; and

  

	 	(c)	 except as expressly provided in Clause 20.4.3, the Indemnifying Party shall not be liable to the Indemnified Party for any legal expenses subsequently incurred by
such Indemnified Party or any Indemnitee in connection with the analysis, defence or settlement of the Third Party Claim. In the event that it is ultimately determined that the Indemnifying 

  

 65 

	 	 
Party is not obligated to indemnify, defend or hold harmless an Indemnitee from and against the Third Party Claim, the Indemnified Party shall reimburse the
Indemnifying Party for any and all costs and expenses (including lawyers’ fees and costs of suit) reasonably incurred by the Indemnifying Party in its defence of the Third Party Claim with respect to such Indemnified Party or Indemnitee.

  

	 	20.4.3	Without limiting Clause 20.4, any Indemnitee shall be entitled to participate in, but not control, the defence of a Third Party Claim by having its views regularly solicited by
the Indemnifying Party and, where proceedings are commenced, to retain counsel of its choice for such purpose; provided, however, that such retention shall be at the Indemnitee’s own expense unless, (a) the Indemnifying Party has failed to
assume the defence and retain counsel in accordance with Clause 20.4.1 (in which case the Indemnified Party shall control the defence), or (b) the interests of the Indemnitee and the Indemnifying Party with respect to such Third Party
Claim are sufficiently adverse to prohibit the representation by the same counsel of both Parties under Applicable Law, ethical rules or equitable principles. 

  

	 	20.4.4	With respect to any Losses relating solely to the payment of money to the Third Party to settle the Third Party Claim and that will not result in the Indemnified Party or the
Indemnitee becoming subject to injunctive relief, and as to which the Indemnifying Party shall have acknowledged in writing the obligation to indemnify the Indemnitee under Clause 20.4.1, the Indemnifying Party shall have the sole right to
enter into any such settlement including any consent judgment, on such terms as the Indemnifying Party, in its sole discretion, shall deem appropriate. With respect to all other Losses or where the Indemnified Party will be subject to injunctive
relief, where the Indemnifying Party has assumed the defence of a Third Party Claim in accordance with Clause 20.4.1, the Indemnifying Party shall have authority to consent to the entry of any judgement, enter into any settlement or otherwise
dispose of such Losses, provided that it obtains the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed). 

  

 66 

	 	20.4.5	If the Indemnifying Party chooses not to defend or prosecute any Third Party Claim, the Indemnified Party shall retain control of the defence thereof but no Indemnified Party or
Indemnitee shall admit any liability with respect to, or settle, compromise or discharge, any such Third Party Claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld. The Indemnifying
Party shall not be liable for any settlement or other disposition of Losses by an Indemnified Party or an Indemnitee under such a Third Party Claim that is reached without the written consent of the Indemnifying Party. 

  

	 	20.4.6	If the Indemnifying Party chooses to defend any Third Party Claim, the Indemnified Party shall, and shall cause each other Indemnitee to, reasonably cooperate in the defence thereof
and shall 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 therewith. Such cooperation shall include
access during normal business hours by 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 the Indemnified Party, the Indemnitees
and its and their employees and agents available on a mutually convenient basis to provide additional information and explanation of any records or information provided, and the Indemnifying Party shall reimburse the Indemnified Party for all of its
related reasonable out-of-pocket expenses. 

  

	 	20.4.7	Except as expressly provided above, the reasonable and verifiable costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party where it
participates in the defence under Clause 20.4.4 or Clause 20.4.6 shall be reimbursed on a Quarterly 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. 

  

 66 

	20.5	Except with respect to Third Party Claims under Clauses 20.1 or 20.2, neither Party shall be liable to the other in contract, tort, negligence, breach of statutory duty or otherwise
for any loss, damage, costs or expenses of any nature whatsoever incurred or suffered by the other Party or its Affiliates: 

  

	 	20.5.1	of a direct nature, where the same is a loss of turnover, profits, business or goodwill; or 

  

	 	20.5.2	of an indirect or consequential or punitive nature, including any indirect or consequential economic loss or other indirect or consequential loss of turnover, profits, loss of
enterprise value, business or goodwill or otherwise. 

  

	20.6	Licensee shall maintain during any period in which Licensee is Commercialising Product or otherwise has indemnification obligations to Licensor, (a) commercial general
liability insurance with a combined single limit for bodily injury and property damage of not less than ten million dollars (US$10,000,000), and (b) products liability/completed operations coverage with a minimum indemnity limit of five million
dollars (US$5,000,000) per occurrence. Such policies shall (i) be provided by insurance carrier(s) reasonably acceptable to Licensor and (ii) be written on a claims made basis. Such policies shall remain in effect throughout the Term of
this Agreement and shall not be cancelled or subject to a reduction of coverage without the prior written authorisation of Licensor. 

  

	20.7	Licensor shall maintain during the Manufacturing Period insurance cover sufficient to satisfy any claim for indemnity under Clause 20.2. 

  
 21. TERMINATION 
  

	21.1	This Agreement shall come into force on the Effective Date and shall continue thereafter for the period in which Licensee shall continue to Commercialise Product in the Territory,
subject to termination under this Clause 21. 

  

	21.2	Without prejudice to its other rights and remedies in connection therewith, each of the Parties (“the Terminating Party”) shall have the right to terminate this
Agreement for cause with immediate effect upon giving written notice of termination to the other (“the Defaulting Party”) upon the occurrence of any of the following events: 

  

	 	21.2.1	 the Defaulting Party commits a material breach of this Agreement which is (i) incapable of remedy or (ii) which in the case of a breach (other than for

  

 68 

	 	 
non-payment of a sum of money on its due date) capable of remedy shall not have been remedied within ninety (90) days of the receipt by it of a written
notice from the other Party identifying the breach and requiring its remedy; or (iii) which in the case of a breach for non-payment of a sum of money by its due date, shall not have been remedied by payment in full within fifteen (15) days
of the receipt by it of a written notice from the other Party identifying the breach and requiring its remedy. 

  

	 	21.2.2	if an Insolvency Event occurs in relation to the Defaulting Party. In any event when a Party first becomes aware of the likely occurrence of any Insolvency Event in regard to that
Party, it shall promptly so notify the other Party in sufficient time to give the other Party sufficient notice to protect its interests under this Agreement. 

  

	21.3	Licensee shall have the right to terminate this Agreement without cause at any time (i) prior to the NDA Approval Date by service of six (6) months notice in writing on
Licensor, and (ii) post the NDA Approval Date by service of twelve (12) months notice in writing on Licensor. 

  
 22. CONSEQUENCES OF TERMINATION 
  

	22.1	On or before the effective date of termination of this Agreement where termination is effected by Licensor pursuant to Clause 21.2 (for cause) or by Licensor under Clause 23.2
(force majeure) or by Licensee under Clause 21.3, Licensee: 

  

	 	22.1.1	shall deliver up to Licensor all Licensor Know How in its Control; 

  

	 	22.1.2	shall deliver up to Licensor or, at Licensor’s request destroy, any and all quantities of Product in its possession, power, custody or control subject always to Licensee’s
right to fulfil orders accepted by it prior to the date of service of notice of termination; 

  

	 	22.1.3	shall commensurate with legislative and regulatory requirements, transfer to Licensor or its nominee all INDs, NDAs and other regulatory filings and approvals for Product in the
Territory. In the event that such a transfer is not possible, Licensee shall use reasonable endeavours to ensure that Licensor has the benefit of the NDAs and other regulatory filings and approvals and, to this end, consents to any Regulatory
Authority cross-referencing 

  

 69 

 to the data and information on file with any Regulatory Authority as may be necessary to facilitate the
granting of second NDAs, regulatory filings and approvals for the Product to Licensor, and Licensee agrees to complete whatever other procedures are reasonably necessary in relation to the same to enable Licensor (either itself or in conjunction
with a Third Party) freely to develop and sell the Product in substitution for Licensee at Licensor’s expense in the Territory; 
  

	 	22.1.4	shall use its reasonable endeavours to assign to Licensor the benefit and burden of any agreement made between Licensee and any clinical researcher in relation to Product;

  

	 	22.1.5	shall cease all use of the Trademarks; 

  

	 	22.1.6	grants to Licensor a fully paid-up, royalty-free, worldwide, sub-licensable license under Licensee IP to develop, make, have made, use, Commercialise and have Commercialised
Products and shall deliver to Licensor copies of all Documents evidencing Licensee IP (including Know-How) in its possession and control; 

  

	 	22.1.7	shall have no further licences under this Agreement (with the effect that all sub-licenses granted by Licensee shall automatically cease) and shall not after the effective date of
termination itself use, license or otherwise exploit the Licensor IP. 

  

	22.2	Upon the effective date of termination of this Agreement where termination is effected by Licensee pursuant to Clause 21.2 (termination for cause): 

  

	 	22.2.1	the licenses granted to Licensee under Clause 16.1 shall continue thereafter without limit in time; 

  

	 	22.2.2	the licenses granted to the Licensor to the Licensee IP shall continue insofar as reasonably required for the purpose of Commercialisation of the Product outside the Territory only
without limit in time; 

  

	 	22.2.3	the right to manufacture under Clause 11.3 shall apply; 

  

	 	22.2.4	Licensee shall continue to pay the Trademark Royalty under Clause 10.7; 

  

	 	22.2.5	Licensor shall continue to prosecute, maintain and defend the Licensor Patent Rights in accordance with Clauses 15 and 17; and 

  

 70 

	 	22.2.6	Clause 14 shall continue in accordance with its terms. 

  

	22.3	Save as may be expressly specified otherwise in this Agreement the provisions of Clauses 10.7, 10.14 to 10.21, 15, 18, 19, 20, 22 and 26 shall survive termination of this Agreement,
in accordance with their terms. 

  
 23. FORCE MAJEURE

  

	23.1	If a Party (the “Affected Party”) is unable to carry out any of its obligations under this Agreement due to Force Majeure this Agreement shall remain in effect but
the Affected Party’s relevant obligations under this Agreement and the corresponding obligations of the other Party (“Non-Affected Party”) under this Agreement, shall be suspended for a period equal to the circumstance of Force
Majeure provided that: 

  

	 	23.1.1	the suspension of performance is of no greater scope than is required by the Force Majeure; 

  

	 	23.1.2	the Affected Party immediately gives the Non-Affected Party prompt written notice describing the circumstance of Force Majeure, including the nature of the occurrence and its
expected duration, and continues to furnish regular reports during the period of Force Majeure and notifies the Non-Affected Party immediately of the cessation of the Force Majeure; 

  

	 	23.1.3	the Affected Party uses all reasonable efforts to remedy its inability to perform and to mitigate the effects of the circumstance of Force Majeure; and 

  

	 	23.1.4	as soon as practicable after the event which constitutes Force Majeure the Parties discuss how best to continue their operations as far as possible in accordance with this
Agreement. 

  

	23.2	If the circumstance of Force Majeure prevails for a continuous period in excess of six (6) months. 

  

	 	23.2.1	where the Licensor is the Affected Party during the Manufacturing Period, the Licensee’s right to manufacture under Clause 11.3 shall apply; 

  

	 	23.2.2	 where the Licensee is the Affected Party, the Licensor as Non-Affected Party may, without prejudice to any other rights or remedies which may be available to it,
terminate this Agreement with immediate effect by giving 

  

 71 

	 	 
written notice of termination to the Licensee. In the event of termination under this Clause 23.2 the provisions of Clause 22.1 shall not apply and the
Parties shall promptly meet to negotiate in good faith the consequences of any such termination and the continued use of the Licensor IP and the Licensee IP by the Parties. 

  
 24. CHANGE OF CONTROL OF LICENSEE 
  
 Licensee shall provide written notice to Licensor of an impending Change of
Control of Licensee or any Salix Affiliate as soon as the impending Change of Control can be legally disclosed. Within fifteen (15) days of the receipt of a written notice pursuant to this Clause, the Chief Executive Officer of each Party shall
meet to discuss the impact of any proposed change of control upon the Agreement and the commercial value of Product and to discuss the possible nature of the relationship with the combined entity and the Licensor may (at its option) require
confirmation in writing from the controlling entity of its performance of the obligations of the Licensee fully in accordance with the terms of this Agreement. 
  

25. ASSIGNMENT 
 This Agreement and the licenses
herein granted shall be binding upon and inure to the benefit of the successors in interest of the respective Party. Neither this Agreement nor any interest hereunder shall be assignable by either Party without the written consent of the other Party
(such consent not to be unreasonably withheld or delayed) provided, however, that Licensor may assign this Agreement and obligations hereunder together with the Licensor Patent Rights to any Affiliate of Licensor to which it may transfer all or
substantially all of its assets (including those assets relating to this Agreement) without obtaining the consent of Licensee. 
  
 26. GOVERNING LAW AND JURISDICTION 
  
 The interpretation and construction of this Agreement shall be governed by the laws of England excluding any conflicts or choice of law rule or principle
that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. Save where any dispute is to be referred to Expert Determination, any dispute arising out of or relating to the
existence, negotiation, validity, formation, interpretation, breach, performance or application of this Agreement shall be subject to the non-exclusive jurisdiction of the courts of England and Wales. 
  

 72 

 27. NOTICES 
  

	27.1	Any notice, request, demand, waiver, consent, approval or other communication permitted or required under this Agreement shall be in writing and shall be deemed given only if
delivered by hand or sent by facsimile transmission (with transmission confirmed) or by a postal delivery service that maintains records of delivery, addressed to the Parties at their respective addresses specified in Clause 27.2 or to such
other address as the Party to whom notice is to be given may have provided to the other Party in accordance with this Clause 27. Such notice shall be deemed to have been given as of the date delivered if sent by hand or post or as of the date
transmitted if sent by facsimile (with transmission confirmed). Any notice delivered by facsimile shall be confirmed by a hard copy delivered as soon as practicable thereafter. This Clause 27 is not intended to govern the day-to-day business
communications necessary between the Parties in performing their obligations under the terms of this Agreement 

  

	27.2	Address for Notice. 

  

			
	For:	 	Licensor
		
	Address:	 	Norgine B.V., Hogehilweg 7, 1101 CA Amsterdam ZO, The Netherlands
		
	Fax number:	 	+31 20 567 0999
	
	For the attention of: Managing Director
		
	For:	 	Licensee
		
	Address:	 	1700 Perimeter Park Drive, Morrisville, NC 27560-8404, USA
		
	Fax number:	 	+1 919 862 1095
	
	For the attention of: General Counsel

  
 28. RELATIONSHIP OF THE PARTIES

  
 The status of a Party under this Agreement shall be that
of an independent contractor. Nothing contained in this Agreement shall be construed as creating a partnership, joint venture or agency relationship between the Parties or as granting either Party the 

  

 73 

 
authority to bind or contract any obligation in the name of or on the account of the other Party or to make any statements, representations, warranties or
commitments on behalf of the other Party. All persons employed by a Party shall be employees of such Party and not of the other Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of
such Party. 
  
 29. ENTIRE AGREEMENT AND SEVERABILITY 
  

	29.1	This Agreement and the Loan Note constitute the entire agreement between the Parties with respect to the subject matter of this Agreement. This Agreement supersedes all prior
agreements, whether written or oral, with respect to the subject matter of this Agreement. If there is any conflict between the terms of this Agreement and those of the Loan Note the terms of this Agreement shall govern. Each Party confirms that it
is not relying on any representations, warranties or covenants of the other Party except as specifically set out in this Agreement. Nothing in this Agreement is intended to limit or exclude any liability for fraud. All Schedules referred to in this
Agreement are intended to be and are hereby specifically incorporated into and made a part of this Agreement. In the event of any inconsistency between any such Schedules and this Agreement, the terms of this Agreement shall govern.

  

	29.2	If any provision of this Agreement is held to be invalid, illegal or unenforceable, in any respect, then, to the fullest extent permitted by Applicable Law and if the rights or
obligations of any Party will not be materially and adversely affected: (a) such provision will be given no effect by the Parties and shall not form part of this Agreement, (b) all other provisions of this Agreement shall remain in full
force and effect, and (c) the Parties shall use their best efforts to negotiate a provision in replacement of the provision held invalid, illegal or unenforceable that is consistent with Applicable Law and achieves, as nearly as possible, the
original intention of the Parties. To the fullest extent permitted by Applicable Law, the Parties waive any provision of law that would render any provision in this Agreement invalid, illegal or unenforceable in any respect.

  
 30. ENGLISH LANGUAGE 
  
 This Agreement is written and executed in the English language. Any
translation into any other language shall not be an official version of this Agreement and in the event of any conflict in interpretation between the English version and such translation, the English version shall prevail. 
  

 74 

 31. AMENDMENT 
  
 Any amendment or modification of this Agreement must be in writing and signed by authorised representatives of both Parties. 
  
 32. WAIVER AND NON-EXCLUSION OF REMEDIES 
  
 A Party’s failure to enforce, at any time or for any period of time,
any provision of this Agreement, or to exercise any right or remedy shall not constitute a waiver of that provision, right or remedy or prevent such Party from enforcing any or all provisions of this Agreement and exercising any rights or remedies.
To be effective any waiver must be in writing. All rights and remedies are cumulative and do not exclude any other right or remedy provided by law or otherwise available. 
  
 33. NO BENEFIT TO THIRD PARTIES 
  
 The provisions of this Agreement are for the sole benefit of the Parties and their successors and permitted assigns, and they shall not be construed as
conferring any rights in any other persons except as otherwise expressly provided in Clause 20 (indemnity). A person who is not a Party to this Agreement (including any employee, officer, agent, representative or subcontractor of either
Party) has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement but this does not affect any right or remedy of a Third Party which exists or is available apart from that Act. 
  
 34. FURTHER ASSURANCE 
  
 Each Party shall perform all further acts and things and execute and deliver such further documents as may be necessary or
as the other Party may reasonably require to implement or give effect to this Agreement. 
  
 35. EXPENSES 
  
 Except as
otherwise expressly provided in this Agreement, each Party shall pay the fees and expenses of its respective lawyers and other experts and all other expenses and costs incurred by such Party incidental to the negotiation, preparation, execution and
delivery of this Agreement. 
  

 75 

 36. COUNTERPARTS 
  
 This Agreement may be executed in two counterparts, each of which shall be deemed an original and both of which taken together shall be deemed to
constitute one and the same instrument. An executed signature page of this Agreement delivered by facsimile transmission shall be as effective as an original executed signature page. 
  
 IN WITNESS WHEREOF the Parties have executed this Agreement the day and year first above written. 
  

			
	SIGNED by	  	)    /s/ Carolyn J. Logan
		
	for and on behalf of	  	)    Carolyn J. Logan
		
	SALIX PHARMACEUTICALS, INC.	  	)    President and Chief Executive Officer
		
	SIGNED by	  	)    /s/ Peter Stein
		
	for and on behalf of	  	)    Peter Stein
		
	NORGINE B.V.	  	)    Managing Director

  

 76General Conditions of the Contract for Construction

 Exhibit 10.210 
  
 

 
  
 for the following PROJECT: 
  
 (Name and location or address): 
  
 Design and Construction of the world headquarters building
for Pharmaceutical 
 Products Development, Inc.’s Headquarters 
 Wilmington, NC 
  

			
	 THE OWNER:
 (Name and address):

River Ventures LLC
 3151 South 17th Street
 Wilmington, NC 28412
  
 THE ARCHITECT:
 (Name and address):
 Cline Design Associates, P.A.
 125 North Harrington Street
 Raleigh, NC 27603
  
 THE CONTRACTOR and
CONSTRUCTION MANAGER:
  
 Bovis Lend Lease, Inc.
 8540 Colonnade Center Drive, Suite 201
 Raleigh, NC 27615
	 	 ADDITIONS AND DELETIONS:
  
 The author of this document has added information needed for its completion. The author may also have revised the text of the original AlA standard form. An Additions and
Deletions Report that notes added information as well as revisions to the standard form text is available from the author and should be reviewed. A vertical line in the left margin of this document indicates where the author has added necessary
information and where the author has added to or deleted from the original AlA text.
  
 This document has important legal consequences. Consultation with an attorney is encouraged with respect to its completion or modification.
  
 This document has been approved and endorsed by The Associated General Contractors of America

  

			
	TABLE OF ARTICLES	  	 
		
	 1       GENERAL PROVISIONS
	  	3
		
	 2       OWNER
	  	4
		
	 3       CONTRACTOR
	  	5
		
	 4       ADMINISTRATION OF THE CONTRACT
	  	10
		
	 5       SUBCONTRACTORS
	  	15
		
	 6       CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS
	  	16
		
	 7       CHANGES IN THE WORK
	  	17
		
	 8       TIME
	  	19
		
	 9       PAYMENTS AND COMPLETION
	  	20
		
	 10     PROTECTION OF PERSONS AND PROPERTY
	  	25

  

					
			
	AlA Document A2O1TM - 1997. Copyright © 1911, 1915, 1918, 1925, 1937, 1951 1958, 1961 1963, 1966, 1967, 1970, 1976, 1987 and 1997 by The American Institute of Architects. All rights reserved. WARNING: This AlA Document is
protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AlA Document, or any portion of it, may result in severe civil and criminal penalties and will be prosecuted to the maximum extent possible
under the law. This document was produced by AlA software at 14:53:55 on 08/18/2005 under Order No.1000194010 1 which expires on 8/18/2006, and is not for resale.	  	1	 	 

			
	 11     INSURANCE AND BONDS
	  	27
		
	 12     UNCOVERING AND CORRECTION OF WORK
	  	30
		
	 13     MISCELLANEOUS PROVISIONS
	  	31
		
	 14     TERMINATION OR SUSPENSION OF THE CONTRACT
	  	32

  

					
			
	AlA Document A2O1TM - 1997. Copyright © 1911, 1915, 1918, 1925, 1937, 1951 1958, 1961 1963, 1966, 1967, 1970, 1976, 1987 and 1997 by The American Institute of Architects. All rights reserved. WARNING: This AlA Document is
protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AlA Document, or any portion of it, may result in severe civil and criminal penalties and will be prosecuted to the maximum extent possible
under the law. This document was produced by AlA software at 14:53:55 on 08/18/2005 under Order No.1000194010 1 which expires on 8/18/2006, and is not for resale.	  	2	 	 

 ARTICLE I GENERAL PROVISIONS 
  
 § 1.1 BASIC DEFINITIONS § 1.1.1 THE CONTRACT DOCUMENTS 
  
 The Contract Documents consist of the Agreement between Owner and Contractor (hereinafter
the Agreement), Conditions of the Contract (General, Supplementary and other Conditions), Drawings, Specifications, Addenda issued prior to execution of the Contract, other documents listed in the Agreement and Modifications issued after execution
of the Contract. A Modification is (1) a written amendment o the Contract signed by both parties, (2) a Change Order, (3) a Construction Change Directive or (4) a written order for a minor change in the Work issued by the
Architect. Unless specifically enumerated in the Agreement, the Contract Documents do not include other documents such as bidding requirements (advertisement or invitation to bid, Instructions to Bidders, sample forms, the Contractor’s hid or
portions of Addenda relating to bidding requirements). 
  
 § 1.1.2 THE
CONTRACT 
  
 The Contract Documents form the Contract for Construction. The
Contract represents the entire and integrated agreement between the parties hereto and supersedes prior negotiations, representations or agreements, either written or oral. The Contract may be amended or modified only by a Modification. The Contract
Documents shall not be construed to create a contractual relationship of any kind (1) between the Architect and Contractor, (2) between the Owner and a Subcontractor or Sub-subcontractor, (3) between the Owner and Architect or
(4) between any persons or entities other than the Owner and Contractor. The Architect shall, however, be entitled to performance and enforcement of obligations under the Contract intended to facilitate performance of the Architect’s
duties. 
  
 § 1.1.3 THE WORK 
  
 The term “Work” means the construction and services required by the Contract
Documents, whether completed or partially completed, and includes all other labor, materials, equipment and services provided or to he provided by the Contractor to fulfill the Contractor’s obligations. The Work may constitute the whole or a
part of the Project. 
  
 § 1.1.4 THE PROJECT 
  
 The Project is the total construction of which the Work performed under the Contract
Documents may be the whole or a part and which may include construction by the Owner or by separate contractors. 
  
 § 1.1.5 THE DRAWINGS 
  
 The Drawings are the graphic and pictorial portions of the Contract Documents showing the design, location and dimensions of the Work, generally including plans,
elevations, sections, details, schedules and diagrams. 
  
 § 1.1.6 THE
SPECIFICATIONS 
  
 The Specifications are that portion of the Contract
Documents consisting of the written requirements for materials, equipment, systems, standards and workmanship for the Work, and performance of related services. 
  

§ 1.1.7 THE PROJECT MANUAL 
  
 The Project Manual is a volume assembled for the Work which may include the bidding requirements, sample forms, Conditions of’ the Contract and Specifications. The
Project Manual includes these General Conditions, the Specifications and all Addenda issued prior to the execution of the Agreement. 
  
 § 1.2 CORRELATION AND INTENT OF THE CONTRACT DOCUMENTS 
  
 § 1.2.1 The intent of the Contract Documents is to include all items necessary for the proper execution and completion of the Work by the Contractor. The
Contract Documents are complementary, and what is required by one shall be as binding as if required by all; performance by the Contractor shall be required only to the extent consistent with the Contract Documents and reasonably inferable from them
as being necessary to produce the indicated results. In the event of discrepancies between or within Contract Documents, which were known or should have reasonably been known, , the Construction Manager shall provide the better quality or greater
quantity and shall comply with the more stringent requirements and either or both in accordance with the Architect’s interpretation. The Construction Manager shall bring all known inconsistencies to the Architect’s attention, prior to
installation, for the Architect’s interpretation. 
  
 § 1.2.2
Organization of the Specifications into divisions, sections and articles, and arrangement of Drawings shall not control the Contractor in dividing the Work among Subcontractors or in establishing the extent of Work to be performed by any trade.

  

					
			
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 § 1.2.3 Unless otherwise stated in the Contract Documents, words which have well-known technical or
construction industry meanings are used in the Contract Documents in accordance with such recognized meanings. 
  
 § 1.3 CAPITALIZATION 
  
 §
1.3.1 Terms capitalized in these General Conditions include those which are (I) specifically defined, (2) the titles of numbered articles or (3) the titles of other documents published by the American Institute of Architects.

  
 § 1.4 INTERPRETATION 
  
 § 1.4.1 In the interest of brevity the Contract Documents frequently omit
modifying words such as “all” and “any” and articles such as “the” and “an,” hut the fact that a modifier or an article is absent from one statement and appears in another is not intended to affect the
interpretation of either statement. 
  
 § 1.5 EXECUTION OF CONTRACT
DOCUMENTS 
  
 § 1.5.1 The Contract Documents shall he signed by
the Owner and Contractor. If either the Owner or Contractor or both do not sign all the Contract Documents, the Architect shall identify such unsigned Documents upon request. 
  
 § 1.5.2 Execution of the Contract by the Contractor is a representation that the Contractor has visited the site, become
generally familiar with local conditions under which the Work is to be performed and correlated personal observations with requirements of the Contract Documents. 
  
 § 1.6 OWNERSHIP AND USE OF DRAWINGS, SPECIFICATIONS AND OTHER INSTRUMENTS OF SERVICE 
  
 § 1.6.1 The Drawings, Specifications and other documents, including those in
electronic form, prepared by the Architect and the Architect’s consultants are Instruments of Service through which the Work to be executed by the Contractor is described. The Contractor may retain one record set. Neither the Contractor nor any
Subcontractor, Sub-subcontractor or material or equipment supplier shall own or claim a copyright in the Drawings, Specifications and other documents prepared by the Architect or the Architect’s consultants, and unless otherwise indicated the
Architect and the Architect’s consultants shall he deemed the authors of them and will retain all common law, statutory and other reserved rights, in addition to the copyrights. All copies of Instruments of Service, except the Contractor’s
record set, shall be returned or suitably accounted for to the Architect, on request, upon completion of the Work. The Drawings, Specifications and other documents prepared by the Architect and the Architect’s consultants, and copies thereof
furnished to the Contractor, are for use solely with respect to this Project. They are not to be used by the Contractor or any Subcontractor, Sub-subcontractor or material or equipment supplier on other projects or for additions to this Project
outside the scope of the Work without the specific written consent of the Owner, Architect and the Architect’s consultants. The Contractor, Subcontractors, Sub-subcontractors and material or equipment suppliers are authorized to use and
reproduce applicable portions of the Drawings, Specifications and other documents prepared by the Architect and the Architect’s consultants appropriate to and for use in the execution of their Work under the Contract Documents. All copies made
under this authorization shall bear the statutory copyright notice, if any, shown on the Drawings, Specifications and other documents prepared by the Architect and the Architect’s consultants. Submittal or distribution to meet official
regulatory requirements or for other purposes in connection with this Project is not to be construed as publication in derogation of the Architect’s or Architect’s consultants’ copyrights or other reserved rights. 
  
 ARTICLE 2 OWNER § 2.1 GENERAL 
  
 § 2.1.1 The Owner is the person or entity identified as such in the Agreement
and is referred to throughout the Contract Documents as if singular in number. The Owner shall designate in writing a representative who shall have express authority to hind the Owner with respect to all matters requiring the Owner’s approval
or authorization. Except as otherwise provided in Section 4.2.1, the Architect does not have such authority. The term “Owner” means the Owner or the Owner’s authorized representative. 
  
 § 2.1.2 The Owner shall furnish to the Contractor within fifteen days after
receipt of a written request, information necessary and relevant for the Contractor to evaluate, give notice of or enforce mechanic’s lien rights. Such information shall include a correct statement of the record legal title to the property on
which the Project is located, usually referred to as the site, and the Owner’s interest therein. 
  

					
			
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 § 2.2 INFORMATION AND SERVICES REQUIRED OF THE OWNER 
  
 § 2.2.1 The Owner shall, at the written request of the Contractor, prior to
commencement of the Work and thereafter, furnish to the Contractor a Guaranty in the form as shown in Exhibit A. 
  
 § 2.2.2 Except for building permits and fees, including those required under Section 3.7.1, which are the responsibility of the Contractor under the
Contract Documents, the Owner shall secure and pay ftr necessary approvals, easements, assessments and charges required for construction, use or occupancy of permanent structures or for permanent changes in existing facilities. 
  
 § 2.2.3 The Owner shall furnish surveys describing physical characteristics,
legal limitations and utility locations for the site of the Project, and a legal description of the site. The Contractor shall he entitled to rely on the accuracy of information furnished by the Owner provided that the Construction Manager has
diligently reviewed the information and has informed the Owner in writing if it has actual knowledge of incorrect information. The Construction Manager shall exercise proper precautions relating to the safe performance of the Work. 
  
 § 2.2.4 Information or services required of the Owner by the Contract Documents
shall be furnished by the Owner with reasonable promptness. Any other information or services relevant to the Contractor’s performance of the Work under the Owner’s control shall be furnished by the Owner after receipt from the Contractor
of a written request for such information or services. 
  
 § 2.2.5
Unless otherwise provided in the Contract Documents, the Contractor will be furnished, free of charge, such copies of Drawings and Project Manuals as are reasonably necessary for execution of the Work. 
  
 § 2.3 OWNER’S RIGHT TO STOP THE WORK 
  
 § 2.3.1 If the Contractor fails to correct Work which is not in accordance with
the requirements of the Contract Documents as required by Section 12.2 or persistently fails to carry out Work in accordance with the Contract Documents, the Owner may issue a written order to the Contractor to stop the Work, or any portion
thereof, until the cause for such order has been eliminated; however, the right of the Owner to stop the Work shall not give rise to a duty on the part of the Owner to exercise this right for the benefit of the Contractor or any other person or
entity, except to the extent required by Section 6.1.3. 
  
 § 2.4
OWNER’S RIGHT TO CARRY OUT THE WORK 
  
 § 2.4.1 If the
Contractor defaults or neglects to carry out the Work in accordance with the Contract Documents and fails within a seven-day period after receipt of written notice from the Owner to commence and continue correction of such default or neglect with
diligence and promptness, the Owner may after such seven-day period give the contractor a second written notice to correct such deficiencies within a three-day period. If the Contractor within such three-day period after receipt of such second
notice fails to commence and continue to correct any deficiencies, the Owner may, without prejudice to other remedies the Owner may have, correct such deficiencies. In such case an appropriate Change Order shall be issued deducting from payments
then or thereafter due the Contractor the reasonable cost of correcting such deficiencies, including Owner’s expenses and compensation for the Architect’s additional services made necessary by such default, neglect or failure. Such action
by the Owner and amounts charged to the Contractor are both subject to prior approval of the Architect. If payments then or thereafter due the Contractor are not sufficient to cover such amounts, the Contractor shall pay the difference to the Owner.

  
 § 2.5.1 In no event shall the Owner have control over, charge of,
or any responsibility for construction means, methods, techniques, sequences or procedures or for safety precautions unless the respective subcontractor or vendor is working directly for/with the Owner. 
  
 ARTICLE 3 CONTRACTOR 
  
 § 3.1 GENERAL 
  
 § 3.1.1 The Contractor is the person or entity identified as such in the Agreement and is referred to throughout the Contract Documents as if singular in
number, The term “Contractor” means the Construction Manager or the Construction Manager’s authorized representative. 
  
 § 3.1.2 The Contractor shall perform the Work in accordance with the Contract Documents. 
  

					
			
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 § 3.1.3 The Contractor shall not be relieved of obligations to perform the Work in accordance with the
Contract Documents either by activities or duties of the Architect in the Architect’s administration of the Contract, or by tests, inspections or approvals required or performed by persons other than the Contractor. 
  
 § 3.2 REVIEW OF CONTRACT DOCUMENTS AND FIELD CONDITIONS BY CONTRACTOR 

 
 § 3.2.1 Since the Contract Documents are complementary, before starting each
portion of the Work, the Contractor shall carefully study and compare the various Drawings and other Contract Documents relative to that portion of the Work, as well as the information furnished by the Owner pursuant to Section 2.2.3, shall
take field measurements of any existing conditions related to that portion of the Work and shall observe any conditions at the site affecting it. These obligations are for the purpose of facilitating construction by the Contractor and are not for
the purpose of discovering errors, omissions, or inconsistencies in the Contract Documents; however, any errors, inconsistencies or omissions discovered by the Contractor shall be reported promptly to the Architect as a request for information in
such form as the Architect may require. 
  
 § 3.2.2 Any design errors
or omissions noted by the Contractor during this review shall be reported promptly to the Architect, but it is recognized that the Contractor’s review is made in the Contractor’s capacity as a contractor and not as a licensed design
professional unless otherwise specifically provided in the Contract Documents. The Contractor is not required to ascertain that the Contract Documents are in accordance with applicable laws, statutes, ordinances, building codes, and rules and
regulations, but any nonconformity discovered by or made known to the Contractor shall be reported promptly to the Architect. 
  
 § 3.2.3 If the Contractor believes that additional cost or time is involved because of clarifications or instructions issued by the Architect in response to
the Contractor’s notices or requests for information pursuant to Sections 3.2.1 and 3.2.2. the Contractor shall make Claims as provided in Sections 4.3.6 and 4 3 7 If the Contractor fails to perform the obligations of Sections 3.2.1 and 3.2.2,
the Contractor shall pay such costs and damages to the Owner as would have been avoided if the Contractor had performed such obligations. The Contractor shall not be liable to the Owner or Architect for damages resulting from errors, inconsistencies
or omissions in the Contract Documents or for differences between field measurements or conditions and the Contract Documents unless the Contractor recognized such error, inconsistency, omission or difference and knowingly failed to report it to the
Architect. 
  
 § 3.3 SUPERVISION AND CONSTRUCTION PROCEDURES

  
 § 3.3.1 The Contractor shall supervise and direct the Work,
using the Contractor’s best skill and attention. The Contractor shall be solely responsible for and have control over construction means, methods, techniques, sequences and procedures and for coordinating all portions of the Work under the
Contract, unless the Contract Documents give other specific instructions concerning these matters. If the Contract Documents give specific instructions concerning construction means, methods, techniques, sequences or procedures, the Contractor shall
evaluate the jobsite safety thereof and, except as stated below, shall he fully and solely responsible for the jobsite safety of such means, methods, techniques, sequences or procedures. If the Contractor determines that such means, methods,
techniques, sequences or procedures may not be safe, the Contractor shall give timely written notice to the Owner and Architect and shall not proceed with that portion of the Work without further written instructions from the Architect. If the
Contractor is then instructed to proceed with the required means, methods, techniques, sequences or procedures without acceptance of changes proposed by the Contractor, the Owner shall be solely responsible for any resulting loss or damage.

  
 § 3.3.2 The Contractor shall be responsible to the Owner for acts
and omissions of the Contractor’s employees, Subcontractors and their agents and employees, and other persons or entities performing portions of the Work for or on behalf of the Contractor or any of its Subcontractors. 
  
 § 3.3.3 The Contractor shall he responsible for inspection of portions of Work
already performed to determine that such portions are in proper condition to receive subsequent Work. 
  
 § 3.4 LABOR AND MATERIALS 
  
 § 3.4.1 Unless otherwise provided in the Contract Documents, the Contractor shall provide and pay for labor, materials, equipment, tools, construction equipment and machinery, water, heat, utilities, transportation, and other
facilities and services necessary for proper execution and completion of the Work, whether temporary or permanent and whether or not incorporated or to be incorporated in the Work, 
  

					
			
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 § 3.4.2 The Contractor may make substitutions only with the consent of the Owner, after evaluation by the
Architect and in accordance with a Change Order. 
  
 § 3.4.3 The
Contractor shall enforce strict discipline and good order among the Contractor’s employees and other persons carrying out the Contract. The Contractor shall not permit employment of unfit persons or persons not skilled in tasks assigned to
them. 
  
 § 3.5 WARRANTY 
  
 § 3.5.1 The Contractor warrants to the Owner and Architect that materials and
equipment furnished under the Contract will be of good quality and new unless otherwise required or permitted by the Contract Documents, that the Work will be free from defects not inherent in the quality required or permitted, and that the Work
will conform to the requirements of the Contract Documents. Work not conforming to these requirements, including substitutions not properly approved and authorized, may be considered defective. The Contractor’s warranty excludes remedy for
damage or defect caused by abuse, modifications not executed by the Contractor, improper or insufficient maintenance, improper operation, or normal wear and tear and normal usage. If required by the Architect, the Contractor shall furnish
satisfactory evidence as to the kind and quality of materials and equipment. 
  
 § 3.6 TAXES 
  
 § 3.6.1 The Contractor shall pay
sales, consumer, use and similar taxes for the Work provided by the Contractor which are legally enacted when bids are received or negotiations concluded, whether or not yet effective or merely scheduled to go into effect. 
  
 § 3.7 PERMITS, FEES AND NOTICES 
  
 § 3.7.1 Unless otherwise provided in the Contract Documents, the Contractor
shall secure and pay for the building permit and other permits and governmental fees, licenses and inspections necessary for proper execution and completion of the Work which are customarily secured after execution of the Contract and which are
legally required when bids are received or negotiations concluded. The Construction Manager shall furnish the Owner with copies of certificates of all permits and fees, licenses and inspections necessary for the proper execution and completion of
the Work for which the Construction Manager is responsible. Upon completion of the Work, the Construction Manager shall deliver to the Architect original copies of all required certificates of inspection. 
  
 § 3.7.2 The Contractor shall comply with and give notices required by laws,
ordinances, rules, regulations and lawful orders of public authorities applicable to performance of the Work. 
  
 § 3.7.3 It is not the Contractor’s responsibility to ascertain that the Contract Documents are in accordance with applicable laws, statutes, ordinances, building codes, and rules and regulations.
However, if the Contractor observes that portions of the Contract Documents are at variance therewith, the Contractor shall promptly notify the Architect and Owner in writing, and necessary changes shall he accomplished by appropriate Change Order.

  
 § 3.7.4 If the Contractor performs Work knowing it to be contrary
to laws, statutes, ordinances, building codes, and rules and regulations without such notice to the Architect and Owner, the Contractor shall assume appropriate responsibility for such Work and shall bear the costs attributable to correction.

  
 § 3.8 ALLOWANCES 
  
 § 3.8.1 The Contractor shall include in the Contract Sum all allowances stated
in the Contract Documents. Items covered by allowances shall be supplied for such amounts and by such persons or entities as the Owner may direct, but the Contractor shall not be required to employ persons or entities to whom the Contractor has
reasonable objection. 
  
 § 3.8.2 Unless otherwise provided in the
Contract Documents: 
  

	 	.1	allowances shall cover the cost to the Contractor of materials and equipment delivered at the site and all required taxes, less applicable trade discounts;

  

	 	.2	Contractor’s costs for unloading and handling at the site, labor, installation costs, overhead, profit and other expenses contemplated for stated allowance amounts shall
be included in the Contract Sum hut not in the allowances; 

  

	 	.3	whenever costs are more than or less than allowances, the Contract Sum shall be adjusted accordingly by Change Order. The amount of the Change Order shall reflect
(I) the difference between actual costs and the allowances under Section 3.8.2.1 and (2) changes in Contractor’s costs under Section 3.8.2.2. 

  

					
			
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 § 3.8.3 Materials and equipment under an allowance shall he selected by the Owner in sufficient time to avoid
delay in the Work. 
  
 § 3.9 SUPERINTENDENT 
  
 § 3.9.1 The Contractor shall employ a competent superintendent and necessary
assistants who shall be in attendance at the Project site during performance of the Work. The superintendent shall represent the Contractor, and communications given to the superintendent shall be as binding as if given to the Contractor. Important
communications shall be confirmed in writing. Other communications shall be similarly confirmed on written request in each case. 
  
 § 3.10 CONTRACTOR’S CONSTRUCTION SCHEDULES 
  
 § 3.10.1 The Contractor, promptly after being awarded the Contract, shall prepare and submit for the Owner’s and Architect’s information a
Contractor’s construction schedule for the Work. The schedule shall not exceed time limits current under the Contract Documents, shall he revised at appropriate intervals as required by the conditions of the Work and Project, shall be related
to the entire Project to the extent required by the Contract Documents, and shall provide for expeditious and practicable execution of the Work. 
  
 § 3.10.2 The Contractor shall prepare and keep current, for the Architect’s approval, a schedule of submittals which is coordinated with the
Contractor’s construction schedule and allows the Architect reasonable time to review submittals. 
  
 § 3.10.3 The Contractor shall perform the Work in general accordance with the most recent schedules submitted to the Owner and Architect. 
  
 § 3.11 DOCUMENTS AND SAMPLES AT THE SITE 
  
 § 3.11.1 The Contractor shall maintain at the site for the Owner one record copy of the Drawings, Specifications, Addenda,
Change Orders and other Modifications, in good order and marked currently to record field changes and selections made during construction, and one record copy of approved Shop Drawings, Product Data, Samples and similar required submittals. These
shall be available to the Architect and shall be delivered to the Architect for submittal to the Owner upon completion of the Work. 
  
 § 3.12 SHOP DRAWINGS, PRODUCT DATA AND SAMPLES 
  
 § 3.12.1 Shop Drawings are drawings, diagrams, schedules and other data specially prepared for the Work by the Contractor or a Subcontractor,
Sub-subcontractor, manufacturer, supplier or distributor to illustrate some portion of the Work. 
  
 § 3.12.2 Product Data are illustrations, standard schedules, performance charts, instructions, brochures, diagrams and other information furnished by the Contractor to illustrate materials or equipment for
some portion of the Work. 
  
 § 3.12.3 Samples are physical examples
which illustrate materials, equipment or workmanship and establish standards by which the Work will be judged. 
  
 § 3.12.4 Shop Drawings, Product Data, Samples and similar submittals are not Contract Documents. The purpose of their submittal is to demonstrate for those portions of the Work for which submittals are
required by the Contract Documents the way by which the Contractor proposes to conform to the information given and the design concept expressed in the Contract Documents. Review by the Architect is subject to the limitations of Section 4.2.7.
Informational submittals upon which the Architect is not expected to take responsive action may he so identified in the Contract Documents. Submittals which are not required by the Contract Documents may be returned by the Architect without action.

  
 § 3.12.5 The Contractor shall review for compliance with the
Contract Documents, approve and submit to the Architect Shop Drawings, Product Data, Samples and similar submittals required by the Contract Documents with reasonable promptness and in such sequence as to cause no delay in the Work or in the
activities of the Owner or of separate contractors, Submittals which are not marked as reviewed for compliance with the Contract Documents and approved by the Contractor may be returned by the Architect without action. 
  

					
			
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 § 3.12.6 By approving and submitting Shop Drawings, Product Data, Samples and similar submittals, the
Contractor represents that the Contractor has determined and verified materials, field measurements and field construction criteria related thereto, or will do so, and has checked and coordinated the information contained within such submittals with
the requirements of the Work and of the Contract Documents. 
  
 § 3.12.7
The Contractor shall perform no portion of the Work for which the Contract Documents require submittal and review of Shop Drawings, Product Data, Samples or similar submittals until the respective submittal has been approved by the Architect. If
material or equipment is installed before it is approved by the Architect pursuant to the Contract Documents, the Construction Manager shall be liable for its removal and replacement at no extra charge to the Owner if, in the opinion of the Owner
after consultation with the Architect, the material or equipment does not comply with the Contract Documents. 
  
 § 3.12.8 The Work shall be in accordance with approved submittals except that the Contractor shall not be relieved of responsibility for deviations from requirements of the Contract Documents by the
Architect’s approval of Shop Drawings, Product Data, Samples or similar submittals unless the Contractor has specifically informed the Architect in writing of such deviation at the time of submittal and (1) the Architect has given written
approval to the specific deviation as a minor change in the Work, or (2) a Change Order or Construction Change Directive has been issued authorizing the deviation. The Contractor shall not be relieved of responsibility for errors or omissions
in Shop Drawings, Product Data, Samples or similar submittals by the Architect’s approval thereof. 
  
 § 3.12.9 The Contractor shall direct specific attention, in writing or on resubmitted Shop Drawings, Product Data, Samples or similar submittals, to revisions other than those requested by the Architect on
previous submittals. In the absence of such written notice the Architect’s approval of a resubmission shall not apply to such revisions. 
  
 § 3.12.10 The Contractor shall not be required to provide professional services which constitute the practice of architecture or engineering, unless such
services are specifically required by the Contract Documents for a portion of the Work or unless the Contractor needs to provide such services in order to carry out the Contractor’s responsibilities for construction means, methods, techniques,
sequences and procedures. The Contractor shall not be required to provide professional services in violation of applicable law. If professional design services or certifications by a design professional related to systems, materials or equipment are
specifically required of the Contractor by the Contract Documents, the Owner and the Architect will specify all performance and design criteria that such services must satisfy. The Contractor shall cause such services or certifications to be
provided by a properly licensed design professional, whose signature and seal shall appear on all drawings, calculations, specifications, certifications, Shop Drawings and other submittals prepared by such professional. Shop Drawings and other
submittals related to the Work designed or certified by such professional, if prepared by others, shall bear such professional’s written approval when submitted to the Architect. The Owner and the Architect shall be entitled to rely upon the
adequacy, accuracy and completeness of the services, certifications or approvals performed by such design professionals, provided the Owner and Architect have specified to the Contractor all performance and design criteria that such services must
satisfy. Pursuant to this Section 3.12.10, the Architect will review, approve or take other appropriate action on submittals only for the limited purpose of checking for conformance with information given and the design concept expressed in the
Contract Documents. 
  
 The Contractor shall not be responsible for the adequacy
of the performance or design criteria required by the Contract Documents. 
  
 § 3.13 USE OF SITE 
  
 § 3.13.1 The Contractor
shall confine operations at the site to areas permitted by law, ordinances, permits and the Contract Documents and shall not unreasonably encumber the site with materials or equipment. 
  
 § 3.14 CUTTING AND PATCHING 
  
 § 3.14.1 The Contractor shall he responsible for cutting, fitting or patching required to complete the Work or to make ts parts fit together properly.

  
 § 3.14.2 The Contractor shall not damage or endanger a portion of
the Work or fully or partially completed construction of the Owner or separate contractors by cutting, patching or otherwise altering such construction, or by 
  

					
			
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 excavation, The Contractor shall not cut or otherwise alter such construction by the Owner or a separate contractor
except with written consent of the Owner and of such separate contractor; such consent shall not he unreasonably withheld. The Contractor shall not unreasonably withhold from the Owner or a separate contractor the Contractor’s consent to
cutting or otherwise altering the Work. 
  
 § 3.15 CLEANING UP

  
 § 3.15.1 The Contractor shall keep the premises and
surrounding area free from accumulation of waste materials or rubbish caused by operations under the Contract. At completion of the Work, the Contractor shall remove from and about the Project waste materials, rubbish, the Contractor’s tools,
construction equipment, machinery and surplus materials. 
  
 § 3.15.2
If the Contractor fails to clean up as provided in the Contract Documents, the Owner may do so and the cost thereof shall be charged to the Contractor. 
  
 § 3.16 ACCESS TO WORK 
  
 § 3.16.1 The Contractor shall provide the Owner and Architect access to the Work in preparation and progress wherever
located. 
  
 § 3.17 ROYALTIES, PATENTS AND COPYRIGHTS 
  
 § 3.17.1 The Contractor shall pay all royalties and license fees. The Contractor
shall defend suits or claims for infringement of copyrights and patent rights and shall hold the Owner and Architect harmless from loss on account thereof, but shall not be responsible for such defense or loss when a particular design, process or
product of a particular manufacturer or manufacturers is required by the Contract Documents or where the copyright violations are contained in Drawings. Specifications or other documents prepared by the Owner or Architect However, if the Contractor
has reason to believe that the required design, process or product is an infringement of a copyright or a patent, the Contractor shall be responsible for such loss unless such information is promptly furnished to the Architect. 
  
 § 3.18 INDEMNIFICATION 
  
 § 3.18.1 To the fullest extent permitted by law the Contractor shall indemnify,
defend and hold harmless the Owner, and its agents and employees of any of them from and against claims, damages, losses and expenses, including but not limited to attorneys’ fees, arising out of or resulting from performance of the Work,
provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property (other than the Work itself), but only to the extent caused by the negligent acts or
omissions of the Contractor, a Subcontractor, anyone directly or indirectly employed by them or anyone for whose acts they may be liable, except to the extent such claim, damage, loss or expense is caused in part by a party indemnified hereunder.
Such obligation shall not be construed to negate, abridge, or reduce other rights or obligations of indemnity which would otherwise exist as to a party or person described in this Section 3.18. 
  
 § 3.18.2 In claims against any person or entity indemnified under this
Section 3.18 by an employee of the Contractor, a Subcontractor, anyone directly or indirectly employed by them or anyone for whose acts they may be liable, the indemnification obligation under Section 3.18.1 shall not be limited by a
limitation on amount or type of damages, compensation or benefits payable by or for the Contractor or a Subcontractor under workers’ compensation acts, disability benefit acts or other employee benefit acts. 
  
 ARTICLE 4 ADMINISTRATION OF THE CONTRACT 
  
 § 4.1 ARCHITECT 
  
 § 4.1.1 The Architect is the person lawfully licensed to practice architecture or an entity lawfully practicing architecture
identified as such in the Agreement and is referred to throughout the Contract Documents as if singular in number. The term “Architect” means the Architect or the Architect’s authorized representative. 
  
 § 4.1.2 Duties, responsibilities and limitations of authority of the Architect as
set forth in the Contract Documents shall not be restricted, modified or extended without written consent of the Owner, Contractor and Architect. Consent shall not be unreasonably withheld. 
  

					
			
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 § 4.1.3 If the employment of the Architect is terminated, the Owner shall employ a new Architect against whom
the Contractor has no reasonable objection and whose status under the Contract Documents shall be that of the former Architect. 
  
 § 4.2 ARCHITECT’S ADMINISTRATION OF THE CONTRACT 
  
 § 4.2.1 The Architect will provide administration of the Contract as described in the Contract Documents, and will be an Owner’s representative
(I) during construction, (2) until final payment is due and (3) with the Owner’s concurrence, from time to time during the one-year period for correction of Work described in Section 12.2. The Architect will have authority
to act on behalf of the Owner only to the extent provided in the Contract Documents, unless otherwise modified in writing in accordance with other provisions of the Contract. The Architect will provide those services as describe in the Contract
Documents. The Architect shall have authority to order minor changes in the Work pursuant to Subparagraph 7.4.1 which do not involve an adjustment in the Contract Sum or Contract Time. The Architect shall have no authority to order changes in the
Work involving adjustments in the Contract Sum or Contract Time without the written approval of the Owner. 
  
 § 4.2.2 The Architect, as a representative of the Owner, will visit the site at intervals appropriate to the stage of the Contractors operations (1) to become generally familiar with and to keep the
Owner informed about the progress and quality of the portion of the Work completed, (2) to endeavor to guard the Owner against defects and deficiencies in the Work, and (3) to determine in general if the Work is being performed in a manner
indicating that the Work, when fully completed, will be in accordance with the Contract Documents. However, the Architect will not be required to make exhaustive or continuous on-site inspections to check the quality or quantity of the Work. The
Architect will neither have control over or charge of, nor be responsible for, the construction means, methods, techniques, sequences or procedures, or for the safety precautions and programs in connection with the Work, since these are solely the
Contractor’s rights and responsibilities under the Contract Documents, except a~ provided in Section 3.3.1. 
  
 § 4.2.3 The Architect will not be responsible for the Contractor’s failure to perform the Work in accordance with the requirements of the Contract
Documents. The Architect will not have control over or charge of and will not be responsible for acts or omissions of the Contractor, Subcontractors, or their agents or employees, or any other persons or entities performing portions of the Work.

  
 § 4.2.4 Communications Facilitating Contract Administration.
Except as otherwise provided in the Contract Documents or when direct communications have been specially authorized, the Owner and Contractor shall endeavor to communicate with each other through the Architect about matters arising out of or
relating to the Contract. Communications by and with the Architect’s consultants shall be through the Architect. Communications by and with Subcontractors and material suppliers shall be through the Contractor. Communications by and with
separate contractors shall be through the Owner. 
  
 § 4.2.5 Based on
the Architect’s evaluations of the Contractor’s Applications for Payment, the Architect will review and certify the amounts due the Contractor and will issue Certificates for Payment in such amounts. 
  
 § 4.2.6 The Architect will have authority to reject Work that does not conform to
the Contract Documents. Whenever the Architect considers it necessary or advisable, the Architect will have authority to require inspection or testing of the Work in accordance with Sections 13.5.2 and 13.5.3, whether or not such Work is fabricated,
installed or completed. However, neither this authority of the Architect nor a decision made in good faith either to exercise or not to exercise such authority shall give rise to a duty or responsibility of the Architect to the Contractor,
Subcontractors, material and equipment suppliers, their agents or employees, or other persons or entities performing portions of the Work. 
  
 § 4.2.7 The Architect will review and approve or take other appropriate action upon the Contractor’s submittals such as Shop Drawings, Product Data and
Samples, hut only for the limited purpose of checking for conformance with information given and the design concept expressed in the Contract Documents. The Architect’s action will he taken with such reasonable promptness as to cause no delay
in the Work or in the activities of the Owner, Contractor or separate contractors, while allowing sufficient time in the Architect’s professional judgment to permit adequate review, Review of such submittals is not conducted for the purpose of
determining the accuracy and completeness of other details such as dimensions and quantities, or for substantiating instructions for installation or performance of equipment or systems, all of which remain the responsibility of the Contractor as
required by the Contract 
  

					
			
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 Documents. The Architect’s review of the Contractor’s submittals shall not relieve the Contractor of the
obligations under Sections 3.3, 3.5 and 3.12. The Architect’s review shall not constitute approval of safety precautions or, unless otherwise specifically stated by the Architect, of any construction means, methods, techniques, sequences or
procedures. The Architect’s approval of a specific item shall not indicate approval of an assembly of which the item is a component. 
  
 § 4.2.8 The Architect will prepare Change Orders and Construction Change Directives, and may authorize minor changes in the Work as provided in
Section 7.4, 
  
 § 4.2.9 The Architect will conduct inspections
to determine the date or dates of Substantial Completion and the date of final completion, will receive and forward to the Owner, for the Owner’s review and records, written warranties and related documents required by the Contract and
assembled by the Contractor, and will issue a final Certificate for Payment upon compliance with the requirements of the Contract Documents. 
  
 § 4.2.10 If the Owner and Architect agree, the Architect will provide one or more project representatives to assist in carrying out the Architect’s
responsibilities at the site. The duties, responsibilities and limitations of authority of such project representatives shall be as set forth in an exhibit to be incorporated in the Contract Documents. 
  
 § 4.2.11 The Architect will interpret and decide matters concerning performance
under and requirements of, the Contract Documents on written request of either the Owner or Contractor. The Architect’s response to such requests will be made in writing within any time limits agreed upon or otherwise with reasonable
promptness. If no agreement is made concerning the time within which interpretations required of the Architect shall be furnished in compliance with this Section 4.2, then delay shall not be recognized on account of failure by the Architect to
furnish such interpretations until 15 days after written request is made for them 
  
 § 4.2.12 Interpretations and decisions of the Architect will be consistent with the intent of and reasonably inferable from the Contract Documents and will be in writing or in the form of drawings. When making such
interpretations and initial decisions, the Architect will endeavor to secure faithful performance by both Owner and Contractor, will not show partiality to either and will not he liable for results of interpretations or decisions so rendered in good
faith. 
  
 (Paragraph deleted) 
  
 § 4.3 CLAIMS AND DISPUTES 
  
 § 4.3.1 Definition. A Claim is a demand or assertion by one of the parties
seeking, as a matter of right, adjustment or interpretation of Contract terms, payment of money, extension of time or other relief with respect to the terms of the Contract. The term “Claim” also includes other disputes and matters in
question between the Owner and Contractor arising out of or relating to the Contract. Claims must be initiated by written notice. The responsibility to substantiate Claims shall rest with the party making the Claim. All Claims must be supported by a
detailed chronology of all applicable backup data, including copies of all applicable Contract Documents, Submittals, Requests for Information, Bulletin Drawings, correspondence, Construction Change Directives, and all other documents directly
related to the Claim that are available, or should be available, to the claimant at the time the claim is brought. 
  
 § 4.3.2 Time Limits on Claims. Claims by either party must be initiated within 21 days after occurrence of the event giving rise to such Claim or within 21
days after the claimant first recognizes the condition giving rise to the Claim, whichever is later. Claims must be initiated by written notice to the Architect and the other party. 
  
 § 4.3.3 Continuing Contract Performance. Pending final resolution of a Claim except as otherwise agreed in writing or as
provided in Section 9.7.1 and Article 14, the Contractor shall proceed diligently with performance of the Contract and the Owner shall continue to make payments in accordance with the Contract Documents. 
  
 § 4.3.4 Claims for Concealed or Unknown Conditions. If conditions are encountered
at the site which are (I) subsurface or otherwise concealed physical conditions which differ materially from those indicated in the Contract Documents or (2) unknown physical conditions of an unusual nature, which differ materially from
those ordinarily found to exist and generally recognized as inherent in construction activities of the character provided for in the Contract Documents, then notice by the observing party shall he given to the other party promptly before conditions
are disturbed and in no event later than 21 days after first observance of the conditions. The Architect will promptly 
  

					
			
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 investigate such conditions and, if they differ materially and cause an increase or decrease in the Contractor’s
cost of, or time required for, performance of any part of the Work, will recommend an equitable adjustment in the Contract Sum or Contract Time, or both. If the Architect determines that the conditions at the site are not materially different from
those indicated in the Contract Documents and that no change in the terms of the Contract is justified, the Architect shall so notify the Owner and Contractor in writing, stating the reasons. Claims by either party in opposition to such
determination must he made within 21 days after the Architect has given notice of the decision. If the conditions encountered are materially different, the Contract Sum and Contract Time shall he equitably adjusted, but if the Owner and Contractor
cannot agree on an adjustment in the Contract Sum or Contract Time, the adjustment shall he referred to the Architect for initial determination, subject to further proceedings pursuant to Section 4.4. 
  
 § 4.3.5 Claims for Additional Cost. If the Contractor wishes to make Claim for an
increase in the Contract Sum, written notice as provided herein shall be given before proceeding to execute the Work. Prior notice is not required for Claims relating to an emergency endangering life or property arising under Section 10.6.

  
 § 4.3.6 If the Contractor believes additional cost is involved for
reasons including but not limited to (1) a written interpretation from the Architect, (2) an order by the Owner to stop the Work where the Contractor was not at fault, (3) a written order for a minor change in the Work issued by the
Architect, (4) failure of payment by the Owner, (5) termination of the Contract by the Owner, (6) Owner’s suspension or (7) other reasonable grounds, Claim shall be filed in accordance with this Section 4.3. 

 
 § 4.3.7 Claims for Additional Time

  
 § 4.3.7.1 If the Contractor wishes to make Claim for an increase
in the Contract Time, written notice as provided herein shall be given. The Contractor’s Claim shall include an estimate of cost and of probable effect of delay on progress of the Work. In the case of a continuing delay only one Claim is
necessary. 
  
 § 4.3.7.2 If adverse weather conditions are the basis
for a Claim for additional time, such Claim shall be documented by data substantiating that weather conditions were the cause of delay, and had an adverse effect on the scheduled construction. 
  
 § 4.3.7.3 The Construction Manager shall include —0- days per month in the
Preliminary Construction Schedule to be shown as one activity for weather delays. Each weather day that delays or changes the critical path schedule would be promptly documented and submitted at the periodic progress meeting for approval. If Owner
and Construction Manager agree that the aggregate total of all weather days affects the critical path of the Project, a Claim for additional time and extended general conditions cost will he submitted and will be granted as a change order at the
appropriate time. The project schedule will be updated monthly to reflect the actual number of weather days and the impact it has on the Project’s critical path schedule, if any. 
  
 § 4.3.8 Injury or Damage to Person or Property. If either party to the Contract suffers injury or damage to person or property
because of an act or omission of the other party, or of others for whose acts such party is legally responsible, written notice of such injury or damage, whether or not insured, shall be given to the other party within a reasonable time not
exceeding 21 days after discovery. The notice shall provide sufficient detail to enable the other party to investigate the matter. 
  
 § 4.3.9 If unit prices are stated in the Contract Documents or subsequently agreed upon, and if quantities originally contemplated are materially changed in a
proposed Change Order or Construction Change Directive so that application of such unit prices to quantities of Work proposed will cause substantial inequity to the Owner or Contractor, the applicable unit prices shall be equitably adjusted.

  
 § 4.3.10 Claims for Consequential Damages. The Contractor and
Owner waive Claims against each other for consequential damages arising out of or relating to this Contract. This mutual waiver includes: 
  

	 	.1	damages incurred by the Owner for rental expenses, for losses of use, income, profit, financing, business and reputation, and for loss of management or employee productivity
or of the services of such persons; and 

  

	 	.2	damages incurred by the Contractor for principal office expenses including the compensation of personnel stationed there, for losses of financing, business and reputation,
and for loss of profit except anticipated profit arising directly from the Work. 

  

					
			
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 This mutual waiver is applicable, without limitation, to all consequential damages due to either party’s termination
in accordance with Article 14. Nothing contained in this Section 4.3.10 shall be deemed to preclude an award of liquidated direct damages, when applicable, in accordance with the requirements of the Contract Documents. 
  
 § 4.4 RESOLUTION OF CLAIMS AND DISPUTES 
  
 § 4.4.1 Decision of Architect. Claims, including those alleging an error or
omission by the Architect but excluding those arising under Sections 10.3 through 10.5, shall he referred initially to the Architect for decision. An initial decision by the Architect shall he required as a condition precedent to mediation,
arbitration or litigation of all Claims between the Contractor and Owner arising prior to the date final payment is due, unless 30 days have passed after the Claim has been referred to the Architect with no decision having been rendered by the
Architect. The Architect will not decide disputes between the Contractor and persons or entities other than the Owner. 
  
 § 4.4.2 The Architect will review Claims and within ten days of the receipt of the Claim take one or more of the following actions: (1) request
additional supporting data from the claimant or a response with supporting data from the other party, (2) reject the Claim in whole or in part, (3) approve the Claim, (4) suggest a compromise, or (5) advise the parties that the
Architect is unable to resolve the Claim if the Architect lacks sufficient information to evaluate the merits of the Claim or if the Architect concludes that, in the Architect’s sole discretion, it would be inappropriate for the Architect to
resolve the Claim. 
  
 § 4.4.3 In evaluating Claims, the Architect
may, hut shall not be obligated to, consult with or seek information from either party or from persons with special knowledge or expertise who may assist the Architect in rendering a decision. The Architect may request the Owner to authorize
retention of such persons at the Owner’s expense. 
  
 § 4.4.4 If
the Architect requests a party to provide a response to a Claim or to furnish additional supporting data, such party shall respond, within ten days after receipt of such request, and shall either provide a response on the requested supporting data,
advise the Architect when the response or supporting data will be furnished or advise the Architect that no supporting data will be furnished. Upon receipt of the response or supporting data, if any, the Architect will either reject or approve the
Claim in whole or in part. 
  
 § 4.4.5 The Architect will approve or
reject Claims by written decision, which shall state the reasons therefore and which shall notify the parties of any change in the Contract Sum or Contract Time or both. The approval or rejection of a Claim by the Architect shall be final and
binding on the parties but subject to litigation. 
  
 § 4.4.6 [Intentionally Deleted] 
  
 § 4.4.7 Upon
receipt of a Claim against the Contractor or at any time thereafter, the Architect or the Owner may, but is not obligated to, notify the surety, if any, of the nature and amount of the Claim. If the Claim relates to a possibility of a
Contractor’s default, the Architect or the Owner may, but is not obligated to, notify the surety and request the surety’s assistance in resolving the controversy. 
  
 § 4.4.8 If a Claim relates to or is the subject of a mechanic’s lien, the party asserting such Claim may proceed in
accordance with applicable law to comply with the lien notice or filing deadlines prior to resolution of the Claim by the Architect. 
  
 (Paragraphs deleted) 
  
 § 4.4.9 If any Claim submitted to litigation involves the Architect, then the Architect and Construction Manager may be joined in the proceeding. 
  

					
			
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 (Paragraphs deleted) 
  
 ARTICLE 5 SUBCONTRACTORS 
  
 § 5.1 DEFINITIONS 
  
 § 5.1.1 A Subcontractor is a person or entity who has a direct contract with the Contractor to perform a portion of the Work at the site. The term “Subcontractor” is referred to throughout the
Contract Documents as if singular in number and means a Subcontractor or an authorized representative of the Subcontractor. The term “Subcontractor” does not include a separate contractor or subcontractors of a separate contractor.

  
 § 5.1.2 A Sub-subcontractor is a person or entity who has a direct
or indirect contract with a Subcontractor to perform a portion of the Work at the site. The term “Sub-subcontractor” is referred to throughout the Contract Documents as if singular in number and means a Sub-subcontractor or an authorized
representative of the Sub-subcontractor. 
  
 § 5.2 AWARD OF SUBCONTRACTS
AND OTHER CONTRACTS FOR PORTIONS OF THE WORK 
  
 § 5.2.1 Unless
otherwise stated in the Contract Documents or the bidding requirements, the Contractor, as soon as practicable after award of the Contract, shall furnish in writing to the Owner through the Architect the names of persons or entities (including those
who are to furnish materials or equipment fabricated to a special design) proposed for each principal portion of the Work. The Architect will promptly reply to the Contractor in writing stating whether or not the Owner or the Architect, after due
investigation, has reasonable objection to any such proposed person or entity. Failure of the Owner or Architect to reply promptly shall constitute notice of no reasonable objection. 
  
 § 5.2.2 The Contractor shall not contract with a proposed person or entity to whom the Owner or Architect has made reasonable
and timely objection. The Contractor shall not be required to contract with anyone to whom the Contractor has made reasonable objection. 
  
 § 5.2.3 If the Owner or Architect has reasonable objection to a person or entity proposed by the Contractor, the Contractor shall propose another to whom the
Owner or Architect has no reasonable objection. If the proposed but rejected Subcontractor was reasonably capable of performing the Work, the Contract Sum and Contract Time shall be increased or decreased by the difference, if any, occasioned by
such change, and an appropriate Change Order shall be issued before commencement of the substitute Subcontractor’s Work. However, no increase in the Contract Sum or Contract Time shall be allowed for such change unless the Contractor has acted
promptly and responsively in submitting names as required. 
  
 § 5.2.4
The Contractor shall not change a Subcontractor, person or entity previously selected if the Owner or Architect makes reasonable objection to such substitute. 
  
 § 5.3 SUBCONTRACTUAL RELATIONS 
  
 § 5.3.1 By appropriate agreement, written where legally required for validity, the Contractor shall require each Subcontractor, to the extent of the Work to
be performed by the Subcontractor, to be hound to the Contractor by terms of the Contract Documents, and to assume toward the Contractor all the obligations and responsibilities, including the responsibility for safety of the Subcontractor’s
Work, which the Contractor, by these Documents, assumes toward the Owner and Architect. Each subcontract agreement shall preserve and protect the rights of the Owner and Architect under the Contract Documents with respect to the Work to be performed
by the Subcontractor so that subcontracting thereof will not prejudice such rights, and shall allow to the Subcontractor, unless specifically provided otherwise in the subcontract agreement, the benefit of all rights, remedies and redress against
the Contractor that the Contractor, by the Contract Documents, has against the Owner. Where appropriate, the Contractor shall require each Subcontractor to enter into similar agreements with Sub-subcontractors. The Contractor shall make available to
each proposed Subcontractor, prior to the execution of the subcontract agreement, copies of the Contract Documents to which the Subcontractor will be hound, and, upon written request of the Subcontractor, identify to the Subcontractor terms and
conditions of the proposed subcontract agreement which may be at variance with the Contract Documents. Subcontractors will similarly make copies of applicable portions of such documents available to their respective proposed Sub-subcontractors,

  

					
			
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 §5.3.2 Each subcontract shall be in writing and shall specifically provide that the Owner is an intended third-party
beneficiary of such subcontract or the Owner will be named as a co-obligee to the performance and/or payment bonds provided by any Subcontractor and/or supplier. 
  
 §5.3.3 The Construction Manager shall provide copies of its subcontracts, agreements and current information on the status of its
accounts upon demand by the Owner. 
  
 § 5.4 CONTINGENT ASSIGNMENT OF
SUBCONTRACTS 
  
 § 5.4.1 Each
subcontract agreement for a portion of the Work is assigned by the Contractor to the Owner provided that: 
  

	 	.1	assignment is effective only after termination of the Contract by the Owner for cause pursuant to Section 14.2 and only for those subcontract agreements which the Owner
accepts by notifying the Subcontractor and Contractor in writing; and 

  

	 	.2	assignment is subject to the prior rights of the surety, if any, obligated under bond relating to the Contract. 

  
 § 5.4.2 Upon such assignment, if the Work has been suspended for more than 30
days, the Subcontractor’s compensation shall be equitably adjusted for increases in cost resulting from the suspension. 
  
 ARTICLE 6 CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS 
  
 § 6.1 OWNER’S RIGHT TO PERFORM CONSTRUCTION AND TO AWARD SEPARATE CONTRACTS 
  
 § 6.1.1 The Owner reserves the right to perform construction or operations related to the Project with the Owner’s own
forces, and to award separate contracts in connection with other portions of the Project or other construction or operations on the site under Conditions of the Contract identical or substantially similar to these including those portions related to
insurance and waiver of subrogation. If the Contractor claims that delay or additional cost is involved because of such action by the Owner, the Contractor shall make such Claim as provided in Section 4.3. 
  
 § 6.1.2 When separate contracts are awarded for different portions of the Project
or other construction or operations on the site, the term “Contractor” in the Contract Documents in each case shall mean the Contractor who executes each separate Owner-Contractor Agreement. 
  
 § 6.1.3 The Owner shall provide for coordination of the activities of the
Owner’s own forces and of each separate contractor with the Work of the Contractor, who shall cooperate with them. The Contractor shall participate with other separate contractors and the Owner in reviewing their construction schedules when
directed to do so. The Contractor shall make any revisions to the construction schedule deemed necessary after a joint review and mutual agreement. The construction schedules shall then constitute the schedules to he used by the Contractor, separate
contractors and the Owner until subsequently revised. 
  
 § 6.1.4
Unless otherwise provided in the Contract Documents, when the Owner performs construction or operations related to the Project with the Owner’s own forces, the Owner shall be deemed to be subject to the same obligations and to have the same
rights which apply to the Contractor under the Conditions of the Contract, including, without excluding others, those stated in Article 3, this Article 6 and Articles 10, II and 12. 
  
 § 6.2 MUTUAL RESPONSIBILITY 
  
 § 6.2.1 The Contractor shall afford the Owner and separate contractors reasonable opportunity for introduction and storage of their materials and equipment
and performance of their activities, and shall connect and coordinate the Contractor’s construction and operations with theirs as required by the Contract Documents. 
  
 § 6.2.2 If part of the Contractor’s Work depends for proper execution or results upon construction or operations by the
Owner or a separate contractor, the Contractor shall, prior to proceeding with that portion of the Work, promptly report to the Architect apparent discrepancies or defects in such other construction that would render it unsuitable for such proper
execution and results. Failure of the Contractor so to report shall constitute an acknowledgment that the Owner’s or separate contractor’s completed or partially completed construction is fit and proper to receive the Contractor’s
Work, except as to defects not then reasonably discoverable. 
  
 § 6.2.3
The Owner shall be reimbursed by the Contractor for costs incurred by the Owner which are payable to a separate contractor because of delays, improperly timed activities or defective Construction of the Contractor. The Owner shall be responsible
to the Contractor for costs incurred by the Contractor because of delays, improperly timed activities, damage to the Work or defective construction of a separate contractor. 
  

					
			
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 § 6.2.4 The Contractor shall promptly remedy damage wrongfully caused by the Contractor to completed or
partially completed construction or to property of the Owner or separate contractors as provided in Section 10.2.5. 
  
 § 6.2.5 The Owner and each separate contractor shall have the same responsibilities for cutting and patching as are described for the Contractor in
Section 3.14. 
  
 § 6.3 OWNER’S RIGHT TO CLEAN UP

  
 § 6.3.1 If a dispute arises among the Contractor, separate
contractors and the Owner as to the responsibility under their respective contracts for maintaining the premises and surrounding area free from waste materials and rubbish, the Owner may clean up and the Architect will allocate the cost among those
responsible. 
  
 ARTICLE 7 CHANGES IN THE WORK 
  
 § 7.1 GENERAL 
  
 § 7.1.1 Changes in the Work maybe accomplished after execution of the Contract, and without invalidating the Contract, by Change
Order, Construction Change Directive or order for a minor change in the Work, subject to the limitations stated in this Article 7 and elsewhere in the Contract Documents. 
  
 § 7.1.2 A Change Order shall be based upon agreement among the Owner, Contractor and Architect; a Construction Change Directive
requires agreement by the Owner and Architect and may or may not he agreed to by the Contractor; an order for a minor change in the Work may he issued by the Architect alone. 
  
 § 7.1.3 Changes in the Work shall be performed under applicable provisions of the Contract Documents, and the Contractor shall
proceed promptly, unless otherwise provided in the Change Order, Construction Change Directive or order for a minor change in the Work. 
  
 § 7.2 CHANGE ORDERS 
  
 § 7.2.1 A Change Order is a written instrument prepared by the Architect and signed by the Owner, Contractor and Architect, stating their agreement upon all
of the following: 
  

	 	.1	change in the Work; 

  

	 	.2	the amount of the adjustment, if any, in the Contract Sum; and 

  

	 	.3	the extent of the adjustment, if any, in the Contract Time. 

  
 § 7.2.2 Methods used in determining adjustments to the Contract Sum may include those listed in Section 7.3.3.

  
 § 7.3 CONSTRUCTION CHANGE DIRECTIVES 
  
 § 7.3.1 A Construction Change Directive is a written order prepared by the
Architect and signed by the Owner and Architect, directing a change in the Work prior to agreement on adjustment, if any, in the Contract Sum or Contract Time, or both. The Owner may by Construction Change Directive, without invalidating the
Contract, order changes in the Work within the general scope of the Contract consisting of additions, deletions or other revisions, the Contract Sum and Contract Time being adjusted accordingly. 
  
 § 7.3.2 A Construction Change Directive shall be
used in the absence of total agreement on the terms of a Change Order. 
  
 § 7.3.3 If the Construction Change Directive provides for an adjustment to the Contract Sum, the adjustment shall he based on one of the following methods: 
  

	 	.1	mutual acceptance of a lump sum properly itemized and supported by sufficient substantiating data to permit evaluation; 

  

	 	.2	unit prices stated in the Contract Documents or subsequently agreed upon; 

  

	 	.3	cost to he determined in a manner agreed upon by the parties and a mutually acceptable fixed or percentage fee; or 

  

	 	.4	as provided in Section 7.3.6. 

  

					
			
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 § 7.3.4 Upon receipt of a Construction Change Directive, the Contractor shall promptly proceed with the
change in the Work involved and advise the Architect of the Contractor’s agreement or disagreement with the method, if any, provided in the Construction Change Directive for determining the proposed adjustment in the Contract Sum or Contract
Time. 
  
 § 7.3.5 A Construction Change Directive signed by the
Contractor indicates the agreement of the Contractor therewith, including adjustment in Contract Sum and Contract Time or the method for determining them. Such agreement shall he effective immediately and shall be recorded as a Change Order.

  
 § 7.3.6 If the Contractor does not respond promptly or disagrees
with the method for adjustment in the Contract Sum, the method and the adjustment shall be determined by the Architect on the basis of reasonable expenditures and savings of those performing the Work attributable to the change, including, in case of
an increase in the Contract Sum, a reasonable allowance for overhead and profit. In such case, and also under Section 7.3.3.3, the Contractor shall keep and present, in such form as the Architect may prescribe, an itemized accounting together
with appropriate supporting data. Unless otherwise provided in the Contract Documents, costs for the purposes of this Section 7.3.6 shall be limited to the following: 
  

	 	.1	costs of labor, including social security, old age and unemployment insurance, fringe benefits required by agreement or custom, and workers’ compensation insurance;

  

	 	.2	costs of materials, supplies and equipment, including cost of transportation, whether incorporated or consumed; 

  

	 	.3	rental costs of machinery and equipment, exclusive of hand tools, whether rented from the Contractor or others; 

  

	 	.4	costs of premiums for all bonds and insurance, permit fees, and sales, use or similar taxes related to the Work; and 

  

	 	.5	additional costs of supervision and field office personnel directly attributable to the change. 

  
 § 7.3.7 The amount of credit to be allowed by the Contractor to the Owner for a deletion or change which results in a net
decrease in the Contract Sum shall be actual net cost as confirmed by the Architect. When both additions and credits covering related Work or substitutions are involved in a change, the allowance for overhead and profit shall be figured on the basis
of net increase, if any, with respect to that change. 
  
 § 7.3.8
Pending final determination of the total cost of a Construction Change Directive to the Owner, amounts not in dispute for such changes in the Work shall he included in Applications for Payment accompanied by a Change Order indicating the
parties’ agreement with part or all of such costs. For any portion of such cost that remains in dispute, the Architect will make an interim determination for purposes of monthly certification for payment for those costs. That determination of
cost shall adjust the Contract Sum on the same basis as a Change Order, subject to the right of either party to disagree and assert a claim in accordance with Article 4. 
  
 §7.3.8.1 A Change Order, when issued, shall be full compensation, or credit, for the extra work included, omitted or
substituted. It shall show on its face the adjustment in time for completion of the Project as a result of the change in the Work. Each Change Order shall include all known costs related thereto, including all overhead, miscellaneous expenses and
incidentals. 
  
 § 7.3.9 When the Owner and Contractor agree with the
determination made by the Architect concerning the adjustments in the Contract Sum and Contract Time, or otherwise reach agreement upon the adjustments, such agreement shall be effective immediately and shall be recorded by preparation and execution
of an appropriate Change Order. 
  
 § 7.4 MINOR CHANGES IN THE WORK

  
 § 7.4.1 The Architect will have authority to order minor
changes in the Work not involving adjustment in the Contract Sum or extension of the Contract Time and not inconsistent with the intent of the Contract Documents. Such changes shall be effected by written order and shall be binding on the Owner and
Contractor, The Contractor shall carry out such written orders promptly. 
  

					
			
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 ARTICLE 8 TIME 
  
 § 8.1 DEFINITIONS 
  
 § 8.1.1 Unless otherwise provided, Contract Time is the period of time, including authorized adjustments, allotted in the Contract Documents for Substantial Completion of the Work. 
  
 § 8.1.2 The date of commencement of the Work is
the date established in the Agreement. 
  
 § 8.1.3 The date of Substantial Completion is the date certified by the Architect in accordance with Section 9.8. 
  
 § 8.1.4 The term “day” as used in the Contract Documents shall mean calendar day unless otherwise specifically
defined. 
  
 § 8.2 PROGRESS AND COMPLETION 
  
 § 8.2.1 Time limits stated in the Contract Documents are of the essence of the
Contract. By executing the Agreement the Contractor confirms that the Contract Time is a reasonable period for performing the Work. 
  
 § 8.2.2 The Contractor shall not knowingly, except by agreement or instruction of the Owner in writing, prematurely commence operations on the site or
elsewhere prior to the effective date of insurance required by Article 11 to be furnished by the Contractor and Owner. The date of commencement of the Work shall not be changed by the effective date of such insurance. Unless the date of commencement
is established by the Contract Documents or a notice to proceed given by the Owner, the Contractor shall notify the Owner in writing not less than five days or other agreed period before commencing the Work to permit the timely filing of mortgages,
mechanic’s liens and other security interests. 
  
 § 8.2.3 The
Contractor shall proceed expeditiously with adequate forces and shall achieve Substantial Completion within the Contract Time. 
  
 § 8.2.4 If the progress or completion of the critical path of the Work is materially delayed by any fault, neglect, act or failure to act on the part of the
Construction Manager or any one acting for or on behalf of the Construction Manager, then the Construction Manager shall, at its own cost and in addition to all of the other obligations imposed by the Owner, work such overtime or require the
appropriate subcontractor to work overtime as may be necessary to make up for all time lost and to avoid delay in the progress and completion of the work. 
  
 § 8.3 DELAYS AND EXTENSIONS OF TIME 
  
 § 8.3.1 If the Contractor demonstrates that it has been delayed at any time in the commencement or progress of the critical path of the Work by an act or
neglect of the owner or Architect, or of an employee of either, or of a separate contractor employed by the Owner, or by changes ordered in the critical path of the Work, or by labor disputes, fire, unusual delay in deliveries, unavoidable
casualties or other causes beyond the Contractor’s control, or by delay authorized by the Owner, or by other causes which the Architect determines may justify delay, then the Contract Time shall be extended by Change Order for such reasonable
time as the Architect may determine. 
  
 § 8.3.1.1 Time extensions, if
any, determined by the Architect will extend the Contract Time in an amount equal to the time approved by the Architect. Unless the delay is caused by the Owner or Architect, time Extensions and related costs are the sole and exclusive remedy for
delay set forth in § 8.3.1, In no event shall the Owner, or Architect, be liable to the Construction Manager, any subcontractor, any supplier, or any other person or organization, or to any surety for or employee or agent of any of them, for
damages arising out of or resulting from delays caused by the Construction Manager or anyone for whose acts the Construction Manager is responsible. To the extent any delay is cause solely by the Owner, the Construction Manager will be entitled to
charge for any general conditions incurred. 
  
 § 8.3.2 Claims relating to time shall be made in accordance with applicable provisions of Section 4.3. 
  
 § 8.3.3 This Section 8.3 does not preclude recovery of damages for delay by either party under other provisions of the Contract Documents. 
  
 §8.3.4 After being given notice that costs for additional services will be
incurred by the Architect, the Construction Manager shall bear the reasonable cost of any additional services of the Architect made necessary by delays in completion of the Work due to actions or inactions of the Construction Manager or any
subcontractors. The Construction Manager shall promptly pay any such costs upon demand by the Owner. 
  

					
			
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 ARTICLE 9 PAYMENTS AND COMPLETION 
  
 § 9.1 CONTRACT SUM 
  
 § 9.1.1 The Contract Sum is stated in the Agreement and, including authorized adjustments, is the total amount payable by the Owner to the Contractor for
performance of the Work under the Contract Documents. 
  
 § 9.2 SCHEDULE
OF VALUES 
  
 § 9.2.1 Before the first Application for Payment,
the Contractor shall submit to the Architect a schedule of values allocated to various portions of the Work, prepared in such form and supported by such data to substantiate its accuracy as the Architect may require. This schedule, unless objected
to by the Architect, shall be used as a basis for reviewing the Contractor’s Applications for Payment. The Schedule of Values shall be prepared in such a manner that each major item of the Work and each subcontracted item of the Work is shown
as a separate line item on AIA Document G703, Application and Certificate for Payment, Continuation Sheet, or other form acceptable to the Owner. This Schedule of Values, unless rejected by the Owner, shall be used as a basis for reviewing the
Contractor’s Application for Payment. 
  
 § 9.3 APPLICATIONS FOR
PAYMENT 
  
 § 9.3.1 At least ten days before the date established
for each progress payment, the Contractor shall submit to the Architect an itemized Application for Payment for operations completed in accordance with the schedule of values. Such application shall be notarized, if required, and supported by such
data substantiating the Contractor’s right to payment as the Owner or Architect may require, such as copies of requisitions from Subcontractors and material suppliers, and reflecting retainage if provided for in the Contract Documents.

  
 § 9.3.1.1 As provided in Section 7.3.8, such applications may
include requests for payment on account of changes in the Work which have been properly authorized by Construction Change Directives, or by interim determinations of the Architect, but not yet included in Change Orders. 
  
 § 9.3.1.2 Such applications may not include requests for payment for portions of
the Work for which the Contractor does not intend to pay to a Subcontractor or material supplier, unless such Work has been performed by others whom the Contractor intends to pay. 
  
 § 9.3.2 Unless otherwise provided in the Contract Documents, payments shall be made on account of materials and equipment
delivered and suitably stored at the site for subsequent incorporation in the Work. If approved in advance by the Owner, payment may similarly be made for materials and equipment suitably stored off the site at a location agreed upon in writing.
Payment for materials and equipment stored on or off the site shall be conditioned upon compliance by the Contractor with procedures satisfactory to the Owner to establish the Owner’s title to such materials and equipment or otherwise protect
the Owner’s interest, and shall include the costs of applicable insurance, storage and transportation to the site for such materials and equipment stored off the site. 
  
 § 9.3.2.1 In requesting payment for materials stored on or off site, the Construction Manager shall submit with it Application
for Payment an itemized list of the stored materials prepared in sufficient detail to identify the materials and their value. Evidence such as bills of sale or other proof that the materials listed have been paid for by the Construction Manager may
be requested by the Owner. 
  
 §9.3.2.2 For materials stored off the
site, the Construction Manager shall submit with its Application for Payment evidence that the materials are stored at the location previously agreed to in writing; ; that the materials are insured while in storage and while in transit to the site;
and that transportation to the site will be provided. No payment will be certified for material stored off the site until the storage location has been agreed upon in writing and the other requirements of this subparagraph have been fulfilled.

  
 § 9.3.3 The Contractor warrants that title to all Work covered by
an Application for Payment will pass to the Owner no later than the time of payment. The Contractor further warrants that upon submittal of an Application for Payment all Work for which Certificates for Payment have been previously issued and
payments received from the Owner shall, to the best of the Contractor’s knowledge, information and belief, be free and clear of liens, claims, security interests or encumbrances in favor of the Contractor, Subcontractors, material suppliers, or
other persons or 
  

					
			
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 entities making a claim by reason of having provided labor, materials and equipment relating to the Work. Monthly, the
Construction Manager shall submit a fully-executed and notarized Partial Release of Lien and Waiver of Claim form from the Construction Manager and all subcontractors in a form approved by the Owner and the Architect for the previous month’s
Work. 
  
 § 9.4 CERTIFICATES FOR PAYMENT 
  
 § 9.4.1 The Architect will, within seven days after receipt of the
Contractor’s Application for Payment, either issue to the Owner a Certificate for Payment, with a copy to the Contractor, for such amount as the Architect determines is properly due, or notify the Contractor and Owner in writing of the
Architect’s reasons for withholding certification in whole or in part as provided in Section 9.5.1. 
  
 § 9.4.2 The issuance of a Certificate for Payment will constitute a representation by the Architect to the Owner, based on the Architect’s evaluation of the Work and the data comprising the
Application for Payment, that the Work has progressed to the point indicated and that, to the best of the Architect’s knowledge, information and belief, the quality of the Work is in accordance with the Contract Documents. The foregoing
representations are subject to an evaluation of the Work for conformance with the Contract Documents upon Substantial Completion, to results of subsequent tests and inspections, to correction of minor deviations from the Contract Documents prior to
completion and to specific qualifications expressed by the Architect. The issuance of a Certificate for Payment will further constitute a representation that the Contractor is entitled to payment in the amount certified. However, the issuance of a
Certificate for Payment will not be a representation that the Architect has (1) made exhaustive or continuous on-site inspections to check the quality or quantity of the Work, (2) reviewed construction means, methods, techniques, sequences
or procedures, (3) reviewed copies of requisitions received from Subcontractors and material suppliers and other data requested by the Owner to substantiate the Contractor’s right to payment, or (4) made examination to ascertain how
or for what purpose The Contractor has used money previously paid on account of the Contract Sum. 
  
 § 9.4.3 The Owner may withhold payment to the Construction Manager notwithstanding the Architect’s certification if it is necessary, in the Owner’s reasonable opinion, to do so to protect the
Owner from loss due to any of the reasons set forth in Sub-subparagraphs 9.5.1.1 through 9.5.1.7. In the event the Owner withholds payment under this section, it shall give the Construction Manager notice and an opportunity to cure the reason for
nonpayment. 
  
 § 9.5 DECISIONS TO WITHHOLD CERTIFICATION 

 
 (Paragraph deleted) 
  
 § 9.5.1 The Architect may withhold a Certificate for Payment in whole or in part, to the extent reasonably necessary to protect
the Owner, if in the Architect’s opinion the representations to the Owner required by Section 9.4.2 cannot be made. If the Architect is unable to certify payment in the amount of the Application, the Architect will notify the Contractor
and Owner as provided in Section 9.4.1. If the Contractor and Architect cannot agree on a revised amount, the Architect will promptly issue a Certificate for Payment for the amount for which the Architect is able to make such representations to
the Owner. The Architect may also withhold a Certificate for Payment or, because of subsequently discovered evidence, may nullify the whole or a part of a Certificate for Payment previously issued, to such extent as may be necessary in the
Architect’s opinion to protect the Owner from loss for which the Contractor is responsible, including loss resulting from acts and omissions described in Section 3.3.2, because of: 
  

	 	.1	defective Work not remedied; 

  

	 	.2	third party claims filed or reasonable evidence indicating probable filing of such claims unless security acceptable to the Owner is provided by the Contractor;

  

	 	.3	failure of the Contractor to make payments properly to Subcontractors or for labor, materials or equipment; 

  

	 	.4	reasonable evidence that tile Work cannot be completed for the unpaid balance of the Contract Sum; 

  

	 	.5	damage to tile Owner or another contractor; 

  

	 	.6	reasonable evidence that the Work will not he completed within the Contract Time, and that the unpaid balance would not be adequate to cover actual or liquidated damages for
the anticipated delay; or 

  

	 	.7	persistent failure to carry out the Work in accordance with the Contract Documents. 

  

					
			
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 § 9.5.2 When the above reasons for withholding certification are removed, certification will be made for
amounts previously withheld. 
  
 § 9.6 PROGRESS PAYMENTS 

 
 § 9.6.1 After the Architect has issued a Certificate for Payment, the Owner
shall make payment in the manner and within the time provided in the Contract Documents, and shall so notify the Architect. 
  
 § 9.6.2 The Contractor shall promptly pay each Subcontractor, upon receipt of payment from the Owner, out of the amount paid to the Contractor on account of
such Subcontractor’s portion of the Work, the amount to which said Subcontractor is entitled, reflecting percentages actually retained from payments to the Contractor on account of such Subcontractor’s portion of the Work. The Contractor
shall, by appropriate agreement with each Subcontractor, require each Subcontractor to make payments to Sub-subcontractors in a similar manner. 
  
 § 9.6.3 The Architect will, on request, furnish to a Subcontractor, if practicable, information regarding percentages of completion or amounts applied for by
the Contractor and action taken thereon by the Architect and Owner on account of portions of the Work done by such Subcontractor. 
  
 § 9.6.4 Neither the Owner nor Architect shall have an obligation to pay or to see to the payment of money to a Subcontractor except as may otherwise be
required by law. 
  
 § 9.6.5 Payment
to material suppliers shall be treated in a manner similar to that provided in Sections 9.6.2, 9.6.3 and 9.6.4. 
  
 § 9.6.6 A Certificate for Payment a progress payment, or partial or entire use or occupancy of the Project by the Owner shall not constitute acceptance of
Work not in accordance with the Contract Documents. 
  
 § 9.6.7 Unless
the Contractor provides the Owner with a payment bond in the full penal sum of the Contract Sum. payments received by the Contractor for Work properly performed by Subcontractors and suppliers shall be held by the Contractor for those Subcontractors
or suppliers who performed Work or furnished materials, or both, under contract with the Contractor for which payment was made by the Owner. Nothing contained herein shall require money to be placed in a separate account and not commingled with
money of the Contractor, shall create any fiduciary liability or tort liability on the part of the Contractor for breach of trust or shall entitle any person or entity to an award of punitive damages against the Contractor for breach of the
requirements of this provision. 
  
 § 9.7 FAILURE OF PAYMENT

  
 § 9.7.1 If the Architect does not issue a Certificate for
Payment, through no fault of the Contractor, within seven days after receipt of the Contractor’s Application for Payment, or if the Owner does not pay the Contractor within seven days after the date established in the Contract Documents the
amount certified by the Architect or awarded by arbitration, then the Contractor may, upon seven additional days’ written notice to the Owner and Architect, stop the Work until payment of the amount owing has been received. The Contract Time
shall be extended appropriately and the Contract Sum shall be increased by the amount of the Contractor’s reasonable costs of shut-down, delay and start-up, plus interest as provided for in the Contract Documents. 
  
 § 9.7.2 If the Owner is entitled to reimbursement or payment from the
Construction Manager under or pursuant to the Contract Documents, such payment shall be made promptly upon demand by the Owner. Notwithstanding any language in the Contract Documents to the contrary, if the Construction Manager fails to make any
payment to the Owner, or the Owner incurs any costs and expenses to commence a cure any default of the Construction Manager or to correct defective work and the Construction Manager fails to commence a cure within five (5) days, the Owner shall
have an absolute right to offset such amount against the Contract Sum, and may, in the Owner’s sole discretion, elect either to (I) deduct an amount equal to that to which the Owner is entitled from any payments then or thereafter due the
Construction Manager, or (2) issue a written notice to the Construction Manager reducing the Contract Sum by an amount equal to that to which the Owner is entitled. 
  
 § 9.8 SUBSTANTIAL COMPLETION 
  
 § 9.8.1 Substantial Completion is the stage in the progress of the Work when the Work or designated portion thereof is sufficiently complete in accordance
with the Contract Documents so that the Owner can occupy or utilize the Work for its intended use. Tile Owner will he allowed to start its occupant move-in work Forty-five (45) days prior 
  

					
			
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 to the Date of Substantial Completion, as adjusted, for floors P1, P2, 1, 2, 11 and 12. Substantial Completion for floors
P1, P2, 1,2, II and 12 is hereby defined as the stage in the progress of the Work when the Work for floors P1, P2, 1, 2, II and 12 or designated portion thereof is sufficiently complete in the Contract Documents so that the Owner is able to conduct
business and use the upfit space for its commercially intended purpose. 
  
 § 9.8.2 When the Contractor considers that the Work, or a portion thereof which the Owner agrees to accept separately, is substantially complete, the Contractor shall prepare and submit to the Architect a comprehensive list of
items to be completed or corrected prior to final payment. Failure to include an item on such list does not alter the responsibility of the Contractor to complete all Work in accordance with the Contract Documents. 
  
 § 9.8.3 Upon receipt of the Contractor’s list, the Architect will make an
inspection to determine whether the Work or designated portion thereof is substantially complete. If the Architect’s inspection discloses any item, whether or not included on the Contractor’s list, which is not sufficiently complete in
accordance with the Contract Documents so that the Owner can occupy or utilize the Work or designated portion thereof for its intended use, the Contractor shall, before issuance of the Certificate of Substantial Completion, complete or correct such
item upon notification by the Architect. In such case, the Contractor shall then submit a request for another inspection by the Architect to determine Substantial Completion. 
  
 § 9.8.3.1 If additional final inspections are required because the Contractor requested any final inspection before the Work, or
any portion of the Work, was ready for final inspection, such additional inspections will be done at the Contractor’s expense. The Architect’s reasonable fees and expenses for any such additional inspections will be deducted from amounts
due the Contractor on the subsequent Application for Payment. 
  
 § 9.8.4
When the Work or designated portion thereof is substantially complete, the Architect will prepare a Certificate of Substantial Completion which shall establish the date of Substantial Completion, shall establish responsibilities of the Owner and
Contractor for security, maintenance, heat, utilities, damage to the Work and insurance, and shall fix the time within which the Contractor shall finish all items on the list accompanying the Certificate. Warranties required by the Contract
Documents shall commence on the date of Substantial Completion of the Work or designated portion thereof unless otherwise provided in the Certificate of Substantial Completion. 
  
 § 9.8.5 The Certificate of Substantial Completion shall be submitted to the Owner and Contractor for their written acceptance of
responsibilities assigned to them in such Certificate. Upon such acceptance and consent of surety, if any, the Owner shall make payment of retainage applying to such Work or designated portion thereof. Such payment shall be adjusted for Work that is
incomplete or not in accordance with the requirements of the Contract Documents. 
  
 § 9.9 PARTIAL OCCUPANCY OR USE 
  
 § 9.9.1 The
Owner may occupy or use any completed or partially completed portion of the Work at any stage when such portion is designated by separate agreement with the Contractor, provided such occupancy or use is consented to by the insurer as required under
Section 11.4.1.5 and authorized by public authorities having jurisdiction over the Work. Such partial occupancy or use may commence whether or not the portion is substantially complete, provided the Owner and Contractor have accepted in writing
the responsibilities assigned to each of them for payments, retainage, if any, security, maintenance, heat, utilities, damage to the Work and insurance, and have agreed in writing concerning the period for correction of the Work and commencement of
warranties required by the Contract Documents. When the Contractor considers a portion substantially complete, the Contractor shall prepare and submit a list to the Architect as provided under Section 9.8.2. Consent of the Contractor to partial
occupancy or use shall not be unreasonably withheld. The stage of the progress of the Work shall be determined by written agreement between the Owner and Contractor or, if no agreement is reached, by decision of the Architect. 
  
 § 9.9.2 Immediately prior to such partial occupancy or use, the Owner, Contractor
and Architect shall jointly inspect the area to be occupied or portion of the Work to he used in order to determine and record the condition of the Work. 
  
 § 9.9.3 Unless otherwise agreed upon, partial occupancy or use of a portion or portions of the Work shall not constitute acceptance of Work not complying with
the requirements of the Contract Documents, 
  

					
			
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 § 9.10 FINAL COMPLETION AND FINAL PAYMENT 
  
 § 9.10.1 Upon receipt of written notice that the Work is ready for final inspection and acceptance and upon receipt of a final
Application for Payment, the Architect will promptly make such inspection and, when the Architect finds the Work acceptable under the Contract Documents and the Contract fully performed, the Architect will promptly issue a final Certificate for
Payment stating that to the best of the Architect’s knowledge, information and belief, and on the basis of the Architect’s on-site visits and inspections, the Work has been completed in accordance with terms and conditions of the Contract
Documents and that the entire balance found to be due the Contractor and noted in the final Certificate is due and payable. The Architect’s final Certificate for Payment will constitute a further representation that conditions listed in
Section 9.10.2 as precedent to the Contractor’s being entitled to final payment have been fulfilled. 
  
 § 9.10.1.1 All warranties and guarantees required under the Contract Documents shall be assembled and delivered by the Construction Manager to the Architect as part of the final Application for Payment.
The final Certificate for Payment will not be issued by the Architect and payment will not he due until all warranties and guarantees have been received and accepted by the Owner. 
  
 § 9.10.2 Neither final payment nor any remaining retained percentage shall become due until the Contractor submits to the
Architect (1) an affidavit that payrolls, bills for materials and equipment, and other indebtedness connected with the Work for which the Owner or the Owner’s property might be responsible or encumbered (less amounts withheld by Owner)
have been paid or otherwise satisfied, (2) a certificate evidencing that insurance required by the Contract Documents to remain in force after final payment is currently in effect and will not be canceled or allowed to expire until at least 30
days’ prior written notice has been given to the Owner, (3) a written statement that the Contractor knows of no substantial reason that the insurance will not he renewable to cover the period required by the Contract Documents,
(4) consent of surety. if any. to final payment and (5) if required by the Owner, other data establishing payment or satisfaction of obligations, such as receipts, releases and waivers of liens, claims, security interests or encumbrances
arising out of the Contract, to the extent and in such form as may be designated by the Owner. If a Subcontractor refuses to furnish a release or waiver required by the Owner, the Contractor may furnish a bond satisfactory to the Owner to indemnify
the Owner against such lien. If such lien remains unsatisfied after payments are made, the Contractor shall refund to the Owner all money that the Owner may be compelled to pay in discharging such lien, including all costs and reasonable
attorneys’ fees. The Contractor shall provide to the Owner and Architect a fully-executed and notarized Final Release of Lien and Waiver of Claim form from the Contractor and all subcontractors in form acceptable to the Owner and Architect.

  
 § 9.10.3 If, after Substantial Completion of the Work, final
completion thereof is materially delayed through no fault of the Contractor or by issuance of Change Orders affecting final completion, and the Architect so confirms, the Owner shall, upon application by the Contractor and certification by the
Architect, and without terminating the Contract, make payment of the balance due for that portion of the Work fully completed and accepted. If the remaining balance for Work not fully completed or corrected is less than retainage stipulated in the
Contract Documents, and if bonds have been furnished, the written consent of surety to payment of the balance due for that portion of the Work fully completed and accepted shall be submitted by the Contractor to the Architect prior to certification
of such payment. Such payment shall he made under terms and conditions governing final payment, except that it shall not constitute a waiver of claims. 
  
 § 9.10.4 The making of final payment shall constitute a waiver of Claims by the Owner except those arising from: 

 

	 	.1	liens, Claims, security interests or encumbrances arising out of the Contract and unsettled; 

  

	 	.2	failure of the Work to comply with the requirements of the Contract Documents; or 

  

	 	.3	terms of special warranties required by the Contract Documents. 

  
 § 9.10.5 Acceptance of final payment by the Contractor, a Subcontractor or material supplier shall constitute a waiver of claims by that payee except those
previously made in writing and identified by that payee as unsettled at the time of final Application for Payment. 
  
 § 9.10.6 Final payment constituting the entire unpaid balance of the Contract Sum will be paid by the Owner to the Construction Manager within thirty
(30) days after the final Certificate for Payment has been issued by the Architect. 
  

					
			
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 ARTICLE 10 PROTECTION OF PERSONS AND PROPERTY 
  
 § 10.1 SAFETY PRECAUTIONS AND PROGRAMS 
  

§ 10.1.1 The Contractor shall be responsible for initiating, maintaining and supervising all safety precautions and programs in connection with the
performance of the Contract. 
  
 § 10.2 SAFETY OF PERSONS AND PROPERTY

  
 § 10.2.1 The Contractor shall take reasonable precautions for
safety of, and shall provide reasonable protection to prevent damage, injury or loss to: 
  

	 	.1	employees on the Work and other persons who may be affected thereby; 

  

	 	.2	the Work and materials and equipment to he incorporated therein, whether in storage on or off the site, under care, custody or control of the Contractor or the
Contractor’s Subcontractors or Sub-subcontractors; and 

  

	 	.3	other property at the site or adjacent thereto, such as trees, shrubs, lawns, walks, pavements, roadways, structures and utilities not designated for removal, relocation or
replacement in the course of construction. 

  
 § 10.2.2
The Contractor shall give notices and comply with applicable laws, ordinances, rules, regulations and lawful orders of public authorities bearing on safety of persons or property or their protection from damage, injury or loss. 
  
 § 10.2.3 The Contractor shall erect and maintain, as required by existing
conditions and performance of the Contract, reasonable safeguards for safety and protection, including posting danger signs and other warnings against hazards, promulgating safety regulations and notifying owners and users of adjacent sites and
utilities. 
  
 § 10.2.3.1 The Contractor shall also he responsible for
all measures necessary to protect any property and improvement adjacent to the Property as a cost of work. Any damage to such property and improvements shall be promptly repaired by the Contractor. 
  
 § 10.2.4 When use or storage of explosives or other hazardous materials or
equipment or unusual methods are necessary for execution of the Work, the Contractor shall exercise utmost care and carry on such activities under supervision of properly qualified personnel. 
  
 § 10.2.4.1 Use of explosives is not permitted,
unless approved by the Owner. 
  
 § 10.2.5 The Contractor shall
promptly remedy damage and loss (other than damage or loss insured under property insurance required by the Contract Documents) to property referred to in Sections 10.2.1.2 and 10.2.1.3 caused in whole or in part by the Contractor, a Subcontractor,
a Sub-subcontractor, or anyone directly or indirectly employed by any of them, or by anyone for whose acts they may be liable and for which the Contractor is responsible under Sections 10.2.1.2 and 10.2.1.3, except damage or loss attributable to
acts or omissions of the Owner or Architect or anyone directly or indirectly employed by either of them, or by anyone for whose acts either of them may be liable, and not attributable to the fault or negligence of the Contractor. The foregoing
obligations of the Contractor are in addition to the Contractor’s obligations under Section 3.18. 
  
 § 10.2.6 The Contractor shall designate a responsible member of the Contractor’s organization at the site whose duty shall be the prevention of accidents. This person shall be the Contractor’s
superintendent unless otherwise designated by the Contractor in writing to the Owner and Architect. 
  
 § 10.2.7 The Contractor shall not load or permit any part of the construction or site to be loaded so as to endanger its safety. 
  
 § 10.3 HAZARDOUS MATERIALS 
  
 § 10.3.1 If reasonable precautions will be inadequate to prevent foreseeable bodily injury or death to persons resulting from a material or substance,
including but not limited to asbestos or polychlorinated biphenyl (PCB), encountered on the site by the Contractor, the Contractor shall, upon recognizing the condition, immediately stop Work in the affected area and report the condition to the
Owner and Architect in writing. 
  

					
			
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 § 10.3.2 The Owner shall obtain the services of a licensed laboratory to verify tile presence or absence of
the material or substance reported by the Contractor and, in the event such material or substance is found to be present, to verify that it has been rendered harmless. Unless otherwise required by the Contract Documents, the Owner shall furnish in
writing to the Contractor and Architect the names and qualifications of persons or entities who are to perform tests verifying the presence or absence of such material or substance or who are to perform the task of removal or safe containment of
such material or substance. The Contractor and the Architect will promptly reply to the Owner in writing stating whether or not either has reasonable objection to the persons or entities proposed by the Owner. If either the Contractor or Architect
has an objection to a person or entity proposed by the Owner, the Owner shall propose another to whom the Contractor and the Architect have no reasonable objection. When the material or substance has been rendered harmless, Work in the affected area
shall resume upon written agreement of the Owner and Contractor. The Contract Time shall be extended appropriately and the Contract Sum shall be increased in the amount of the Contractor’s reasonable additional costs of shut-down, delay and
start-up, which adjustments shall be accomplished as provided in Article 7 
  
 § 10.3.3 [Intentionally Deleted]. 
  
 § 10.4 The Owner shall not be responsible under Section 10.3 for materials and substances brought to the site by the Contractor unless such materials or substances were required by the Contract Documents. The Contractor
agrees not to knowingly use, after reasonable investigation, fill, or products or other materials to be incorporated into the Work which may contain any asbestos or PCB, or are hazardous, toxic or comprised of any items that are known to he
hazardous or toxic. 
  
 § 10.5 If, without negligence on the part of
the Contractor, the Contractor is held liable for the cost of remediation of a hazardous material or substance solely by reason of performing Work as required by the Contract Documents, the Owner shall indemnify the Contractor for all cost and
expense thereby incurred. 
  
 § 10.6 EMERGENCIES 
  
 § 10.6.1 In an emergency affecting safety of persons or property, the Contractor
shall act, at the Contractor’s discretion, to prevent threatened damage, injury or loss. Additional compensation or extension of time claimed by the Contractor on account of an emergency shall be determined as provided in Section 4.3 and
Article 7. 
  
 § 10.7 BROWNFIELDS AGREEMENT 
  
 § 10.7.1 The Contractor understands and acknowledges that the Owner is a party
to a certain Brownfields Agreement between the North Carolina Department of Environment and Natural Resources and Owner and that the terms and conditions of the Brownfields Agreement apply to the Project including any and all work performed on the
Project site. A copy of the current draft version of the Brownfields Agreement dated May 4, 2005 is attached hereto as Exhibit B and incorporated herein by reference (hereinafter the current draft of the Brownfields Agreement and any amendment
thereto is referred to collectively as the “BFA”). The BFA is still under negotiation and will be finalized subsequent to the execution of this Agreement. As new, amended versions of the BFA are agreed upon and issued, this Agreement will
be supplemented by the amended versions of the BFA and the amended versions will be incorporated into this Agreement by reference as if fully set forth herein by Change Order. Contractor acknowledges that the BFA contains certain specific terms and
conditions detailing how certain work must he performed by Owner on the Project site. Contractor agrees to ensure that Contractor and its employees, subcontractors and other agents comply with the terms and conditions of Sections 14, 15, 16, 22 and
26 of the BFA and Contractor will seek instruction and direction from Owner if it has any questions or concerns about complying with these sections, During the negotiation of the BFA, Owner and Contractor will work with DENR to administer and comply
with any new or revised procedures related to Work to be performed on the Project site based on current site conditions. 
  
 § 10.7.2 Owner agrees to fully indemnify, defend and hold harmless Contractor from any claim, damage or loss arising out of or resulting from any hazardous
material or substance not known by the Contractor to exist on the Project site where such hazardous material or substance presents the risk of bodily injury or death and has not been rendered harmless prior to the start of work by the Contractor;
provided, however, that Owner shall have no obligation of indemnity hereunder with respect to any claim, damage or loss related to any hazardous material or substance known by Contractor to exist on the Project site including, without limitation,
any contaminants identified in Section 9 of the BFA, and to the extent caused by (i) Contractor’s failure to use commercially reasonable efforts 
  

					
			
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 to ensure that Contractor and its employees, subcontractors and other agents abide by the terms and conditions of
Sections 14, 15, 16, 22 and 26 of the BFA, or (ii) Contractor’s breach of any term, condition or covenant of this Agreement or any other Contract Document; and provided further, that such claim, damage or loss is not due to the negligence
of a party seeking indemnity. 
  
 § 10.7.3 The Owner acknowledges that
the Contractor may not have factored or incorporated certain terms and conditions of the BFA, in its current or amended form, into its Guaranteed Maximum Price or the Construction Schedule. Where the Contractor believes that the performance of the
Work in accordance with the terms and conditions of the BFA attached hereto will increase the Cost of the Work and/or require additional time in the construction schedule, the Owner and Contractor will mutually agree upon any required change in such
Contract Time or Cost of Work, if any. 
  
 ARTICLE 11 INSURANCE AND BONDS

  
 § 11.1 CONTRACTOR’S LIABILITY INSURANCE 
  
 § 11.1.1 The Contractor shall purchase from and maintain in a company or
companies lawfully authorized to do business in the jurisdiction in which the Project is located such insurance as will protect the Contractor from claims set forth below which may arise out of or result from the Contractor’s operations under
the Contract and for which the Contractor may be legally liable, whether such operations be by the Contractor or by a Subcontractor or by anyone directly or indirectly employed by any of them, or by anyone for whose acts any of them may be liable:

  

	 	.1	claims under workers’ compensation, disability benefit and other similar employee benefit acts which are applicable to the Work to be performed;

  

	 	.2	claims for damages because of bodily injury, occupational sickness or disease, or death of the Contractor’s employees; 

  

	 	.3	claims for damages because of bodily injury sickness or disease, or death of any person other than the Contractor’s employees; 

  

	 	.4	claims for damages insured by usual personal injury liability coverage; 

  

	 	.5	claims for damages, other than to the Work itself, because of injury to or destruction of tangible property, including loss of use resulting therefrom;

  

	 	.6	claims for damages because of bodily injury, death of a person or property damage arising out of ownership, maintenance or use of a motor vehicle; 

 

	 	.7	claims for bodily injury or property damage arising out of completed operations; and 

  

	 	8	claims involving contractual liability insurance applicable to the Contractor’s obligations under Section 3.18. 

  
 § 11.1.2 The insurance required by Section 11.1.1 shall be written for not
less than limits of liability specified in the Contract Documents or required by law, whichever coverage is greater. Coverages, must be written on an occurrence basis, and shall be maintained without interruption from date of commencement of the
Work until date of final payment and termination of any coverage required to be maintained after final payment. 
  
 § 11.1.2.1 The Owner shall be named as an additional insured under the Construction Manager’s liability insurance. 
  
 § 11.1.3 Certificates of insurance acceptable to the Owner shall be filed with
the Owner prior to commencement of the Work. These certificates and the insurance policies required by this Section 11.1 shall contain a provision that coverages afforded under the policies will not be canceled or allowed to expire until at
least 30 days’ prior written notice has been given to the Owner. If any of the foregoing insurance coverages are required to remain in force after final payment and are reasonably available, an additional certificate evidencing continuation of
such coverage shall be submitted with the final Application for Payment as required by Section 9.10.2. Information concerning reduction of coverage on account of revised limits or claims paid under the General Aggregate, or both, shall be
furnished by the Contractor with reasonable promptness in accordance with the Contractor’s information and belief. 
  
 § 11.2 OWNER’S LIABILITY INSURANCE 
  
 § 11.2.1 The Owner shall be responsible for purchasing and maintaining the Owner’s usual liability insurance. 
 § 11.3 PROJECT MANAGEMENT PROTECTIVE LIABILITY INSURANCE 
  
 (Paragraphs deleted) 
  

					
			
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 [Intentionally Deleted] (Paragraph deleted) 
  
 § 11.4 PROPERTY INSURANCE 
  
 § 11.4.1 Unless otherwise provided, the Owner shall purchase and maintain, in a company or companies lawfully authorized to do
business in the jurisdiction in which the Project is located, property insurance written on a builder’s risk “all-risk” or equivalent policy form in the amount of the initial Contract Sum, plus value of subsequent Contract
modifications and cost of materials supplied or installed by others, comprising total value for the entire Project at the site on a replacement cost basis without optional deductibles. Such property insurance shall he maintained, unless otherwise
provided in the Contract Documents or otherwise agreed in writing by all persons and entities who are beneficiaries of such insurance, until final payment has been made as provided in Section 9.10 or until no person or entity other than the
Owner has an insurable interest in the property required by this Section 11.4 to be covered, whichever is later. This insurance shall include interests of the Owner, the Contractor, Subcontractors and Sub-subcontractors in the Project.

  
 § 11.4.1.1 Property insurance shall be on an “all-risk”
or equivalent policy form and shall include, without limitation, insurance against the perils of fire (with extended coverage) and physical loss or damage including, without duplication of coverage, theft, vandalism, malicious mischief, collapse,
earthquake, flood, windstorm, falsework, testing and startup, temporary buildings and debris removal including demolition occasioned by enforcement of any applicable legal requirements, and shall cover reasonable compensation for Architect’s
and Contractor’s services and expenses required as a result of such insured loss. 
  
 § 11.4.1.2 The Owner will provide the Contractor with a copy of a Certificate of Insurance for the Builder’s Risk policy prior to the commencement of the Work. 
  
 § 11.4.1.3 If the property insurance requires deductibles, the Owner shall pay costs not covered because of such deductibles,

  
 § 11.4.1.4 This property insurance shall cover portions of the
Work stored off the site, and also portions of the Work in transit. 
  
 §
11.4.1.5 Partial occupancy or use in accordance with Section 9.9 shall not commence until the insurance company or companies providing property insurance have consented to such partial occupancy or use by endorsement or otherwise. The Owner
and the Contractor shall take reasonable steps to obtain consent of the insurance company or companies and shall, without mutual written consent, take no action with respect to partial occupancy or use that would cause cancellation, lapse or
reduction of insurance. 
  
 § 11.4.2 Boiler and Machinery Insurance.
The Owner shall purchase and maintain boiler and machinery insurance required by the Contract Documents or by law, which shall specifically cover such insured objects during installation and until final acceptance by the Owner; this insurance shall
include interests of the Owner, Contractor, Subcontractors and Sub-subcontractors in the Work, and the Owner and Contractor shall be named insureds. 
  
 § 11.4.3 Loss of Use Insurance. The Owner, at the Owner’s option, may purchase and maintain such insurance as will insure the Owner against loss of use
of the Owner’s property due to fire or other hazards, however caused. The Owner waives all rights of action against the Contractor for loss of use of the Owner’s property, including consequential losses due to fire or other hazards however
caused. 
  
 § 11.4.4 If the Contractor requests in writing that
insurance for risks other than those described herein or other special causes of loss be included in the property insurance policy, the Owner shall, if possible, include such insurance, and the cost thereof shall be charged to the Contractor by
appropriate Change Order. 
  
 § 11.4.5 If during the Project
construction period the Owner insures properties, real or personal or both, at or adjacent to the site by property insurance under policies separate from those insuring the Project, or if after final payment property insurance is to be provided on
the completed Project through a policy or policies other than those insuring the Project during the construction period, the Owner shall waive all rights in accordance with the terms of Section 11 .4.7 for damages caused by fire or other causes
of loss covered by this separate property insurance. All separate policies shall provide this waiver of subrogation by endorsement or otherwise. 
  

					
			
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 § 11.4.6 Before an exposure to loss may occur, the Owner shall file with the Contractor a copy of each policy
that includes insurance coverages required by this Section 11.4. Each policy shall contain all generally applicable conditions, definitions, exclusions and endorsements related to this Project. Each policy shall contain a provision that the
policy will not be canceled or allowed to expire, and that its limits will not be reduced, until at least 30 days’ prior written notice has been given to the Contractor. 
  
 § 11.4.7 Waivers of Subrogation. The Owner and Contractor waive all rights against (1) each other and any of their
subcontractors, sub-subcontractors, agents and employees, each of the other, and (2) the Architect, Architect’s consultants, separate contractors described in Article 6, if any, and any of their subcontractors, sub-subcontractors, agents
and employees, for damages caused by fire or other causes of loss to the extent covered by property insurance obtained pursuant to this Section 11.4 or other property insurance applicable to the Work, except such rights as they have to proceeds
of such insurance held by the Owner as fiduciary. The Owner or Contractor, as appropriate, shall require of the Architect, Architect’s consultants, separate contractors described in Article 6, if any, and the subcontractors, sub-subcontractors,
agents and employees of any of them, by appropriate agreements, written where legally required for validity, similar waivers each in favor of other parties enumerated herein. The policies shall provide such waivers of subrogation by endorsement or
otherwise. A waiver of subrogation shall be effective as to a person or entity even though that person or entity would otherwise have a duty of indemnification, contractual or otherwise, did not pay the insurance premium directly or indirectly, and
whether or not the person or entity had an insurable interest in the property damaged. 
  
 § 11.4.8 A loss insured under Owner’s property insurance shall be adjusted by the Owner as fiduciary and made payable to the Owner as fiduciary for the insureds, as their interests may appear, subject to requirements of any
applicable mortgagee clause and of Section 11.4,10. The Contractor shall pay Subcontractors their just shares of insurance proceeds received by the Contractor, and by appropriate agreements, written where legally required for validity, shall
require Subcontractors to make payments to their Sub-subcontractors in similar manner. 
  
 § 11.4.9 If required in writing by a party in interest, the Owner as fiduciary shall, upon occurrence of an insured loss, give bond for proper performance of the Owner’s duties. The cost of required bonds shall be charged
against proceeds received as fiduciary. The Owner shall deposit in a separate account proceeds so received, which the Owner shall distribute in accordance with such agreement as the parties in interest may reach, or in accordance with an arbitration
award in which case the procedure shall be as provided in Section 4.6. If after such loss no other special agreement is made and unless the Owner terminates the Contract for convenience, replacement of damaged property shall be performed by the
Contractor after notification of a Change in the Work in accordance with Article 7. 
  
 § 11.4.10 The Owner as fiduciary shall have power to adjust and settle a loss with insurers unless one of the parties in interest shall object in writing within five days after occurrence of loss to the Owner’s exercise of
this power; if such objection is made, the dispute shall be resolved as provided in Sections 4.5 and 4.6. The Owner as fiduciary shall, in the case of arbitration, make settlement with insurers in accordance with directions of the arbitrators. If
distribution of insurance proceeds by arbitration is required, the arbitrators will direct such distribution. 
  
 § 11.5 PERFORMANCE BOND AND PAYMENT BOND 
  
 § 11.5.1 The Owner shall have the right to require the Contractor to furnish bonds covering faithful performance of the Contract and payment of obligations arising thereunder as stipulated in bidding requirements or specifically
required in the Contract Documents on the date of execution of the Contract. 
  
 § 11.5.2 Upon the request of any person or entity appearing to be a potential beneficiary of bonds covering payment of obligations arising under the Contract, the Contractor shall promptly furnish a copy of the bonds or shall
permit a copy to be made. 
  
 § 11.5.3 Contractor shall not be
responsible to provide a bond, effect a discharge or refund any payments to Owner arising out of a lien or claim filed due to Owner’s failure to pay amount properly due to Contractor pursuant to this Agreement. 
  
 § 11.5.4 Contractor will require Subcontractors whose subcontracts are over
$100,000 to furnish performance and payment bonds unless directed not to by Owner, In the event Owner so directs, Owner shall be responsible for all costs which would otherwise be recoverable under either a payment or performance bond. Contractor
and Owner shall be the obliges on such performance and payment bonds. 
  

					
			
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 ARTICLE 12 UNCOVERING AND CORRECTION OF WORK 
  
 § 12.1 UNCOVERING OF WORK 
  
 § 12.1.1 If a portion of the Work is covered contrary to the Architect’s request or to requirements specifically expressed in the Contract Documents, it
must, if required in writing by the Architect, be uncovered for the Architect’s examination and be replaced at the Contractor’s expense without change in the Contract Time. 
  
 § 12.1.2 If a portion of the Work has been covered which the Architect has not specifically requested to examine prior to its
being covered, the Architect may request to see such Work and it shall be uncovered by the Contractor. If such Work is in accordance with the Contract Documents, costs of uncovering and replacement shall, by appropriate Change Order, be at the
Owner’s expense. If such Work is not in accordance with the Contract Documents, correction shall be at the Contractor’s expense unless the condition was caused by the Owner or a separate contractor in which event the Owner shall he
responsible for payment of such costs. 
  
 § 12.2 CORRECTION OF WORK

  
 § 12.2.1 BEFORE OR AFTER SUBSTANTIAL COMPLETION 

 
 § 12.2.1.1 The Contractor shall promptly correct Work rejected by the
Architect or failing to conform to the requirements of the Contract Documents, whether discovered before or after Substantial Completion and whether or not fabricated, installed or completed. Costs of correcting such rejected Work, including
additional testing and inspections and compensation for the Architect’s services and expenses made necessary thereby, shall be at the Contractor’s expense. 
  
 § 12.2.2 AFTER SUBSTANTIAL COMPLETION 
  
 § 12.2.2.1 In addition to the Contractor’s obligations under Section 3.5, if, within one year after the date of
Substantial Completion of the Work or designated portion thereof or after the date for commencement of warranties established under Section 9.9.1, or by terms of an applicable special warranty required by the Contract Documents, any of the Work
is found to be not in accordance with the requirements of the Contract Documents, the Contractor shall correct it promptly after receipt of written notice from the Owner to do so unless the Owner has previously given the Contractor a written
acceptance of such condition. The Owner shall give such notice promptly after discovery of the condition. During the one-year period for correction of Work, if the Owner fails to notify the Contractor and give the Contractor an opportunity to make
the correction, the Owner waives the rights to require correction by the Contractor and to make a claim for breach of warranty. If the Contractor fails to correct nonconforming Work within a reasonable time during that period after receipt of notice
from the Owner or Architect, the Owner may correct it in accordance with Section 2.4. 
  
 § 12.2.2.2 The one-year period for correction of Work shall be extended with respect to portions of Work first performed after Substantial Completion by the period of time between Substantial Completion
and the actual performance of the Work. 
  
 § 12.2.2.3 The one-year
period for correction of Work shall not be extended by corrective Work performed by the Contractor pursuant to this Section 12.2. 
  
 § 12.2.3 The Contractor shall remove from the site portions of the Work which are not in accordance with the requirements of the Contract Documents and are
neither corrected by the Contractor nor accepted by the Owner. 
  
 §
12.2.4 The Contractor shall bear the cost of correcting destroyed or damaged construction, whether completed or partially completed, of the Owner or separate contractors caused by the Contractor’s correction or removal of Work which is not
in accordance with the requirements of the Contract Documents. 
  
 §
12.2.5 Nothing contained in this Section 12.2 shall be construed to establish a period of limitation with respect to other obligations which the Contractor might have under the Contract Documents. Establishment of the one-year period for
correction of Work as described in Section 12.2,2 relates only to the specific obligation of the Contractor to correct the Work, and has no relationship to the time within which the obligation to comply with the Contract Documents may be sought
to be enforced, nor to the time within which proceedings may be commenced to establish the Contractor’s liability with respect to the Contractor’s obligations other than specifically to correct the Work. 
  

					
			
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 § 12.3 ACCEPTANCE OF NONCONFORMING WORK 
  
 § 12.3.1 If tile Owner prefers to accept Work which is not in accordance with the requirements of the Contract Documents, the
Owner may do so instead of requiring its removal and correction, in which case the Contract Sum will be reduced as appropriate and equitable. Such adjustment shall be effected whether or not final payment has been made. 
  
 ARTICLE 13 MISCELLANEOUS PROVISIONS 
  
 § 13.1 GOVERNING LAW 
  
 § 13.1.1 The Contract shall be governed by the law of the place where the
Project is located. 
  
 § 13.2 SUCCESSORS AND ASSIGNS

  
 § 13.2.1 The Owner and Contractor respectively bind
themselves, their partners, successors, assigns and legal representatives to the other party hereto and to partners, successors, assigns and legal representatives of such other party in respect to covenants, agreements and obligations contained in
the Contract Documents. Except as provided in Section 13.2.2, neither party to the Contract shall assign the Contract as a whole without written consent of the other. If either party attempts to make such an assignment without such consent,
that party shall nevertheless remain legally responsible for all obligations under the Contract. 
  
 § 13.2.2 The Owner may, without consent of the Contractor, assign the Contract to an institutional lender providing construction financing for the Project. In such event, the lender shall assume the
Owner’s rights and obligations under the Contract Documents, The Contractor shall execute all consents reasonably required to facilitate such assignment. 
  

§ 13.3 WRITTEN NOTICE 
  
 § 13.3.1 Written notice shall be deemed to have been duly served if delivered in person to the individual or a member of the firm or entity or to an officer
of the corporation for which it was intended, or if delivered at or sent by registered or certified mail to the last business address known to the party giving notice. 
  
 § 13.4 RIGHTS AND REMEDIES 
  
 § 13.4.1 Duties and obligations imposed by the Contract Documents and rights and remedies available thereunder shall be in addition to and not a limitation of
duties, obligations, rights and remedies otherwise imposed or available by law. 
  
 § 13.4.2 No action or failure to act by the Owner, Architect or Contractor shall constitute a waiver of a right or duty afforded them under the Contract, nor shall such action or failure to act constitute approval of or
acquiescence in a breach thereunder, except as may be specifically agreed in writing. 
  
 § 13.4.3 If any provision of the Contract Documents is held to he illegal, invalid or unenforceable under any law, such provision shall be fully severable, and all other provisions shall remain in full force and effect.

  
 §13.4.4 Nothing contained in this Contract shall be deemed to
create a contractual relationship with or cause of action in favor of any third party against Contractor or Owner. 
  
 § 13.5 TESTS AND INSPECTIONS 
  
 § 13.5.1 Tests, inspections and approvals of portions of the Work required by the Contract Documents or by laws, ordinances, rules, regulations or orders of
public authorities having jurisdiction shall be made at an appropriate time. Unless otherwise provided, the Contractor shall make arrangements for such tests, inspections and approvals with an independent testing laboratory or entity acceptable to
the Owner, or with the appropriate public authority, and shall bear all related costs of tests, inspections and approvals. The Contractor shall give the Architect timely notice of when and where tests and inspections are to he made so that the
Architect may be present for such procedures. The Owner shall bear costs of tests, inspections or approvals which do not become requirements until after bids are received or negotiations concluded. 
  
 § 13.5.2 If the Architect, Owner or public authorities having jurisdiction
determine that portions of the Work require additional testing, inspection or approval not included under Section 13.5.1, the Architect will, upon written authorization from the Owner, instruct the Contractor to make arrangements for such
additional testing, inspection 
  

					
			
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 or approval by an entity acceptable to the Owner, and the Contractor shall give timely notice to the Architect of when
and where tests and inspections are to be made so that the Architect may be present for such procedures. Such costs, except as provided in Section 13.5.3, shall he at the Owner’s expense. 
  
 § 13.5.3 If such procedures for testing, inspection or approval under Sections
13.5.1 and 13.5.2 reveal failure of the portions of the Work to comply with requirements established by the Contract Documents, all costs made necessary by such failure including those of repeated procedures and compensation for the Architect’s
services and expenses shall he at the Contractor’s expense. 
  
 §
13.5.4 Required certificates of testing, inspection or approval shall, unless otherwise required by the Contract Documents, be secured by the Contractor and promptly delivered to the Architect. 
  
 § 13.5.5 If the Architect is to observe tests, inspections or approvals required
by the Contract Documents, the Architect will do so promptly and, where practicable, at the normal place of testing. 
  
 § 13.5.6 Tests or inspections conducted pursuant to the Contract Documents shall be made promptly to avoid unreasonable delay in the Work. 
  
 § 13.6 INTEREST 
  
 § 13.6.1 Payments due and unpaid under the Contract Documents shall bear interest from the date payment is due at such rate as
the parties may agree upon in writing or, in the absence thereof, at the legal rate prevailing from time to time at the place where the Project is located. 
  
 § 13.6.2 PROJECT RECORDS The Construction Manager if maintained in its normal course of business, shall maintain the following Project records: hid estimates,
payment records, payroll records, meeting minutes, daily reports, logs, diaries, shop drawings, submittals, schedules, internal correspondence, notes and memoranda and all correspondence involved in the Project. These Project records shall be made
readily available to the Owner upon request. 
  
 § 13.6.3 The Construction Manager shall maintain and shall require all subcontractors to maintain a drug-free workplace. 
  
 § 13.7 COMMENCEMENT OF STATUTORY LIMITATION PERIOD 
  
 § 13.7.1 As between the Owner and Contractor: 
  

	 	.1	Before Substantial Completion. As to acts or failures to act occurring prior to the relevant date of Substantial Completion, any applicable statute of limitations shall
commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than such date of Substantial Completion; 

  

	 	.2	Between Substantial Completion and Final Certificate for Payment. As to acts or failures to act occurring subsequent to the relevant date of Substantial Completion and prior
to issuance of the final Certificate for Payment, any applicable statute of limitations shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than the date of issuance of the final
Certificate for Payment; and 

  

	 	.3	After Final Certificate for Payment. As to acts or failures to act occurring after the relevant date of issuance of the final Certificate for Payment, any applicable statute
of limitations shall commence to run and any alleged cause of action shall be deemed to have accrued in any and all events not later than the date of any act or failure to act by the Contractor pursuant to any Warranty provided under
Section 3.5, the date of any correction of the Work or failure to correct the Work by the Contractor under Section 12.2, or the date of actual commission of any other act or failure to perform any duty or obligation by the Contractor or
Owner, whichever occurs last. 

  
 ARTICLE 14 TERMINATION OR
SUSPENSION OF THE CONTRACT 
  
 § 14.1 TERMINATION BY THE CONTRACTOR

  
 § 14.1.1 The Contractor may terminate the Contract if the
Work is stopped for a period of 30 consecutive days through no act or fault of the Contractor or a Subcontractor, Sub-subcontractor or their agents or employees or any 
  

					
			
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 other persons or entities performing portions of the Work under direct or indirect contract with the Contractor, for any
of the following reasons: 
  

	 	.1	issuance of an order of a court or other public authority having jurisdiction which requires all Work to be stopped; 

  

	 	.2	an act of government, such as a declaration of national emergency which requires all Work to he stopped; 

  

	 	.3	because the Architect has not issued a Certificate for Payment and has not notified the Contractor of the reason for withholding certification as provided in
Section 9.4. 1, or because the Owner has not made payment on a Certificate for Payment within the time stated in the Contract Documents; or 

  

	 	.4	the Owner has failed to furnish to the Contractor promptly, upon the Contractor’s request, reasonable evidence as required by Section 2.2.1.

  
 § 14.1.2 The Contractor may terminate the Contract
if, through no act or fault of the Contractor or a Subcontractor, Sub-subcontractor or their agents or employees or any other persons or entities performing portions of the Work under direct or indirect contract with the Contractor, repeated
suspensions, delays or interruptions of the entire Work by the Owner as described in Section 14,3 constitute in the aggregate more than 100 percent of the total number of days scheduled for completion, or 120 days in any 365-day period,
whichever is less. 
  
 § 14.1.3 If one of the reasons described in
Section 14. 1.1 or 14.1.2 exists, the Contractor may, upon seven days’ written notice to the Owner and Architect, terminate the Contract and recover from the Owner payment for Work executed and for proven loss with respect to materials,
equipment, tools, and construction equipment and machinery, including reasonable overhead, profit and damages. 
  
 § 14.1.4 If the Work is stopped for a period of 60 consecutive days through no act or fault of the Contractor or a Subcontractor or their agents or employees or any other persons performing portions of the
Work under contract with the Contractor because the Owner has persistently failed to fulfill the Owner’s obligations under the Contract Documents with respect to matters important to the progress of the Work, the Contractor may, upon seven
additional days’ written notice to the Owner and the Architect, terminate the Contract and recover from the Owner as provided in Section 14.1.3. 
  
 § 14.2 TERMINATION BY THE OWNER FOR CAUSE 
  
 § 14.2.1 The Owner may terminate the Contract if the Contractor after notice and an opportunity to cure: 
  

	 	.1	persistently or repeatedly refuses or fails to supply enough properly skilled workers or proper materials; 

  

	 	.2	fails to make payment to Subcontractors for materials or labor in accordance with the respective agreements between the Contractor and the Subcontractors;

  

	 	.3	persistently disregards laws, ordinances, or rules, regulations or orders of a public authority having jurisdiction; or 

  

	 	.4	otherwise is guilty of substantial breach of a provision of the Contract Documents. 

  
 § 14.2.2 When any of the above reasons exist, the Owner, upon certification by the Architect that sufficient cause exists to
justify such action, may without prejudice to any other rights or remedies of the Owner and after giving the Contractor and the Contractor’s surety, if any, seven days’ written notice, terminate employment of the Contractor and may,
subject to any prior rights of the surety: 
  

	 	.1	take possession of the site and of all materials, equipment, tools, and construction equipment and machinery thereon owned by the Contractor; 

  

	 	.2	accept assignment of subcontracts pursuant to Section 5.4; and 

  

	 	.3	finish the Work by whatever reasonable method the Owner may deem expedient. Upon request of the Contractor, tile Owner shall furnish to the Contractor a detailed accounting
of the costs incurred by the Owner in finishing the Work. 

  
 § 14.2.3 When the Owner terminates the Contract for one of the reasons stated in Section 14.2.1, the Contractor shall not be entitled to receive further payment until the Work is finished. 
  
 § 14.2.4 If the unpaid balance of the Contract Sum exceeds costs of finishing the
Work, including compensation for the Architect’s services and expenses made necessary thereby, and other damages incurred by the Owner and not expressly waived, such excess shall he paid to the Contractor. If such costs and damages exceed the
unpaid balance, the Contractor shall pay the difference to the Owner. The amount to be paid to the Contractor or Owner, as the case may be, shall be certified by the Architect, upon application, and this obligation for payment shall survive
termination of the Contract. 
  

					
			
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 § 14.2.5 The Construction Manager shall bear the costs of any additional services of the Architect resulting
from the Owner’s termination of the Contract pursuant to this Paragraph 14,2 provided that the Contractor shall not he responsible for the Architect’s services incurred to perform construction administration for any replacement Contractor

  
 § 14.3 SUSPENSION BY THE OWNER FOR CONVENIENCE 
  
 § 14.3.1 The Owner may, without cause, order the Contractor in writing to
suspend, delay or interrupt the Work in whole or in part for such period of time as the Owner may determine. 
  
 § 14.3.2 The Contract Sum and Contract Time shall he adjusted for increases in the cost and time caused by suspension, delay or interruption as described in Section 14.3.1. Adjustment of the Contract
Sum shall include profit. No adjustment shall be made to the extent: 
  

	 	.1	that performance is, was or would have been so suspended, delayed or interrupted by another cause for which the Contractor is responsible; or 

  

	 	.2	that an equitable adjustment is made or denied under another provision of the Contract. 

  
 § 14.4 TERMINATION BY THE OWNER FOR CONVENIENCE 
  
 § 14.4.1 The Owner may, at any time, terminate the Contract for the Owner’s convenience and without cause, provided the
termination is not done solely to replace the Construction Manager. 
  
 §
14.4.2 Upon receipt of written notice from the Owner of such termination for the Owner’s convenience, the Contractor shall: 
  

	 	.1	cease operations as directed by the Owner in the notice; 

  

	 	.2	take actions necessary, or that the Owner may direct, for the protection and preservation of the Work; and 

  

	 	.3	except for Work directed to be performed prior to the effective date of termination stated in the notice, terminate all existing subcontracts and purchase orders and enter
into no further subcontracts and purchase orders. 

  
 §
14.4.3 In case of such termination for the Owner’s convenience, prior to the construction phase, the Construction Manager shall be entitled to the Contract Sum set out in paragraph 4.1 .1 of the Agreement, which shall be an accord and
satisfaction of the full amount due by the Owner. In case of such termination for the Owner’s convenience after acceptance of the Guaranteed Maximum Price proposal and commencement of the Construction Phase, the Contractor shall he entitled to
receive payment for Work executed and the associated Fee. 
  

					
			
	AlA Document A2O1TM - 1997. Copyright © 1911, 1915, 1918, 1925, 1937, 1951 1958, 1961 1963, 1966, 1967, 1970, 1976, 1987 and 1997 by The American Institute of Architects. All rights reserved. WARNING: This AlA Document is
protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AlA Document, or any portion of it, may result in severe civil and criminal penalties and will be prosecuted to the maximum extent possible
under the law. This document was produced by AlA software at 14:53:55 on 08/18/2005 under Order No.1000194010 1 which expires on 8/18/2006, and is not for resale.	  	34

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