Document:

VYSTAR CORPORATION 8-K

 

Exhibit 10.4

 

	 

MASTER SECURITY
AGREEMENT 

	 

by and among

  

Murida
Furniture Co. Inc.

Vystar Corporation, and

The Other Grantors Party Hereto 

(individually and collectively,
and jointly and severally, as “Grantor”)

 

in favor and for
the benefit of

 

Fidelity
Co-operative Bank
 (as “Lender”) 

 

Dated as of: July 18, 2019

 

     

     

    

 

TABLE OF CONTENTS

 

	1.	DEFINITIONS	2
	2.	GRANT OF SECURITY INTEREST AND LIEN; COLLATERAL	6
	 	2.1	Grant	6
	 	2.2	Description
    of the Collateral	6
	3.	CROSS COLLATERALIZATION	8
	4.	AUTHORIZATION AND RATIFICATION	8
	 	4.1	Authorization
    to File	8
	 	4.2	Ratification
    by Grantor	9
	5.	ACTIONS BY GRANTOR AS TO COLLATERAL	9
	 	5.1	Promissory
    Notes and Tangible Chattel
    Paper	9
	 	5.2	Deposit
    Accounts	9
	 	5.3	Investment
    Property and Equity Interests	9
	 	5.4	Landlord
    Access Agreements; Bailee
    Letters	10
	 	5.5	Electronic
    Chattel Paper and Transferable
    Records	10
	 	5.6	Letter-of-Credit
    Rights	10
	 	5.7	Commercial
    Tort Claims	11
	 	5.8	Motor
    Vehicles	11
	 	5.9	Other
    Actions as to any and All
    Collateral	11
	6.	INTELLECTUAL PROPERTY COLLATERAL	11
	 	6.1	Intellectual
    Property License	11
	 	6.2	Dealing
    With Intellectual Property	12
	 	6.3	Additional
    Intellectual Property	13
	 	6.4	Intellectual
    Property Litigation	13
	7.	PERFECTION CERTIFICATE	13
	8.	CERTAIN REPRESENTATIONS AND WARRANTIES	14
	 	8.1	Incorporation
    of Representation and Warranties	14
	 	8.2	Representations
    and Warranties Regarding the Collateral	14
	9.	CERTAIN COVENANTS	15
	 	9.1	Incorporation
    of Covenants	15
	 	9.2	Joinder
    of Additional Grantors	15
	 	9.3	Covenants
    Concerning the Collateral and Grantor	16
	10.	GRANTOR’S USE OF COLLATERAL	17
	11.	INSURANCE	17
	 	11.1	Maintenance
    of Insurance	17

 

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	 	11.2	Insurance
    Proceeds	18
	 	11.3	Continuation
    of Insurance	18
	12.	COLLATERAL PRESERVATION	19
	 	12.1	Preservation
    Costs And
    Expenses	19
	 	12.2	Lender’s
    Obligations
    and Duties
    Regarding Preservation	19
	13.	NOTICE TO PERSONS OBLIGATED ON COLLATERAL	19
	14.	DEFAULT	20
	15.	RIGHTS AND REMEDIES	20
	 	15.1	Rights
    And Remedies
    Generally	20
	 	15.2	Power
    of Attorney	20
	 	 	15.2.1     Appointment
    and Powers of Lender	20
	 	 	15.2.2     Ratification
    of actions done or taken	21
	 	 	15.2.3     No
    Duty Upon Lender	21
	 	15.3	Lender’s
    Sale
    of Collateral	21
	 	15.4	Proceeds
    of collection
    or sale; expenses	21
	 	15.5	Set-off	22
	 	15.6	Intellectual
    property	22
	 	15.7	Rights
    and remedies cumulative	22
	 	15.8	Enforcement;
    non-waiver; all waivers
    in writing	23
	 	15.9	Commercially
    reasonable action	23
	 	15.10	Non-exhaustive
    actions	24
	16.	CERTAIN WAIVERS; RELIANCE; CONFIRMATIONS	24
	 	16.1	Obligations
    absolute	24
	 	16.2	Marshaling	25
	 	16.3	Waiver
    of hearing prior to enforcement	25
	 	 	16.3.1
    Waiver of automatic Stay	25
	 	 	16.3.2
    Waiver of certain damages	25
	 	16.4	Reliance	26
	 	 	16.4.1 No Reliance
    on Lender	26
	 	 	16.4.2
    Reliance by Lender	26
	 	16.5	Confirmation
    of document receipt	26
	17.	RELATION TO OTHER DOCUMENTS	26
	18.	MISCELLANEOUS	27
	 	18.1	Multiple
    grantors	27
	 	18.2	Duration;
    termination and release	27
	 	18.3	Recitals;
    incorporation	28
	 	18.4	Indemnification	28

 

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	18.5	Costs
    and expenses	28
	18.6	Survival	28
	18.7	Construction
    and interpretation	28
	18.8	Severability	28
	18.9	Binding
    effect; assignment	28
	18.10	Integration;
    amendment	29
	18.11	Counterparts;
    reproductions; electronic signatures	29
	18.12	Governing
    law	29
	18.13	Jury trial
    waiver	29
	18.14	Independent
    counsel	30
	18.15	Relationship
    of the parties	30
	18.16	Notices	30

 

LISTING OF EXHIBITS:

 

Exhibit
A:      Perfection Certificates of Rotmans and Vystar

 

Exhibit
B:      Intellectual Property
Security Agreement

 

    TOC - iii of iii

     

    

 

MASTER SECURITY
AGREEMENT

 

This
MASTER SECURITY AGREEMENT, dated as of July 18, 2019 (the “Effective Date”), is made by and among (i)
MURIDA FURNITURE CO.,
INC. (d/b/a “Rotmans”), a Massachusetts corporation having a principal
place of business at 725 Southbridge Street, Worcester, Massachusetts 01610 (in its capacity as a debtor, grantor, pledgor and
assignor hereunder; collectively with its successors and/or permitted assigns, “Rotmans”), (ii) Vystar
Corporation (a/k/a “Vystar Corp.”),
a Georgia corporation having a principal place of business at 101 Aylesbury Road, Worcester, Massachusetts 01609 (in its capacity
as a debtor, grantor, pledgor and assignor hereunder; collectively with its successors and/or permitted assigns, “Vystar”;
Vystar and Rotmans are herein referred to, individually and/or collectively as the context may require, and jointly and severally,
as “Borrower”), and (iii) each other now or hereafter existing guarantor from time to time party hereto
by execution of any one or more counterpart signature pages and/or joinders hereto (in their respective capacities as a debtor,
grantor, pledgor and assignor hereunder, and together with their respective successors and/or permitted assigns, herein referred
to, individually and/or collectively as the context may require, and jointly and severally, as “Guarantor”;
Guarantor and Borrower are herein referred to, individually and/or collectively as the context may require, and jointly and severally,
as “Grantor”), in favor and for the benefit of

 

Fidelity
Co-operative
Bank (d/b/a “Fidelity
Bank”),

 

a Massachusetts-chartered co-operative
bank having a principal place of business located at 675 Main Street, Fitchburg, Massachusetts 01420 (in its capacity as a secured
party, grantee, pledgee and assignee hereunder; collectively with its successors and/or assigns, “Lender”.

 

R E C I T A L S
:

 

A.      
This Agreement (hereinafter defined) is entered into, executed and delivered in connection with a certain Master Credit Agreement
dated as of the Effective Date by and between Lender and Borrower (as amended, restated, supplemented, addended or otherwise modified
from time to time, the “Loan Agreement”), pursuant and subject to the terms and conditions of which
Lender has agreed to make and extend to Borrower, and Borrower has agreed to accept from Lender: (i) a certain revolving
demand line of credit facility in the original Face Amount of Three
Million and 00/100 Dollars
($3,000,000.00) (as such Face Amount may be reduced or otherwise modified from time to time, including, without
limitation pursuant to Section 8.11 of the Note the “Loan”); and (ii) certain other banking,
credit and/or financial accommodations time to time, as may be now or hereafter more particularly set forth in the Loan Agreement
and/or the other Loan Documents (the immediately preceding subclauses (i) – (ii) are, both individually and collectively,
sometimes hereinafter referred to as the “Credit Accommodations”).

 

B. 
      The Loan is evidenced by the Note and the Indefeasible Satisfaction of all Obligations is secured by, inter alios, the Liens
of this Agreement and the other of the Security Instruments.

 

C.
    Guarantor is an Affiliate of Borrower and has made, executed and delivered a Guaranty to Lender, pursuant
and subject to the terms and conditions of which Guarantor has unconditionally and jointly and severally guaranteed to Lender
the Indefeasible Satisfaction of all Obligations.

 

D.
       Pursuant to the provisions of the Loan Agreement, it is a condition of Lender’s agreement to make and extend (or continue
to make and extend) any Credit Accommodations that Grantor: (i) enter into, execute and deliver this Agreement to and with
Lender (Grantor and Lender and are sometimes herein referred to, each individually, as a “Party”, and
collectively, as the8 “Parties”); and (ii) grant to Lender a First Priority (hereinafter defined)
Lien on the Collateral (hereinafter defined) in accordance with the terms and conditions hereof, all for the purposes of securing
the Indefeasible Satisfaction of all Obligations.

 

     

     

    

 

E.
       Grantor will receive substantial direct and indirect benefits from (i) the execution, delivery and performance of the
obligations under the Loan Agreement and the other Loan Documents, and/or (ii) Lender’s making and extending (or continuing
to make and extend) any Credit Accommodations, and each is, therefore, willing to enter into this Agreement and grant—and,
for the avoidance of doubt, each hereby expressly does grant—to Lender a First Priority (hereinafter defined) Lien on all
of such Person’s right, title, interest and claims in, to and under the Collateral to secure the Indefeasible Satisfaction
of all Obligations.

 

NOW,
THEREFORE, for and in consideration of all of the above recitals (collectively, the “Recitals”)
and the covenants, agreements, representations and warranties herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

A
G R E E M E N T :

 

1.             DEFINITIONS.
Capitalized terms used but not otherwise defined in this Agreement (including any such capitalized terms appearing in the Recitals
and/or in the preamble that are not otherwise defined herein) shall have the respective meanings and definitions ascribed to them
in the Loan Agreement, and such capitalized and defined terms are incorporated into this Agreement, and made a part hereof, by
this reference. Except as otherwise defined or indicated by the context herein, all terms which are defined in the UCC (hereinafter
defined) shall have their respective meanings as used in Article 9 of the UCC; provided, however that
if a term is defined in Article 9 of the UCC differently than in another Article of the UCC, the term has the meaning specified
in Article 9 of the UCC. As used in this Agreement, the following terms shall have the respective meanings ascribed to them below
in this Article 1:

 

1.1       “Agreement”
means this Master Security Agreement, together with any and all Exhibits, Schedules and other addenda now or from time to time
hereafter attached hereto (all of which are expressly incorporated herein, and made a part hereof, by this reference), as amended,
restated, supplemented, renewed, ratified, reaffirmed and/or otherwise modified from time to time in accordance with the provisions
hereof.

 

1.2       “Acquisition
Documents” means, individually and collectively, any and all (i) “Acquisition Documents”
as defined in the Loan Agreement, which such defined term and the meaning ascribed to it in the Loan Agreement are hereby incorporated
by this reference into the definition provided by this Section 1.2; and (ii) agreements, instruments, contracts or
other documents of any kind or nature (in each case as amended, restated, supplemented or otherwise modified from time to time)
pursuant to which Grantor will or proposes to, or, as the case may be or the context may provide) under which Grantor has any one
or more rights, options, benefits or interests of any kind to, directly or (through one or more intermediaries) indirectly, (A)
purchase or acquire (whether for or payable in cash or any other kind of consideration, including Equity Interests of Grantor;
and whether acquired by license or otherwise) any assets Disposed (or to be Disposed) of by any other Person (including, without
limitation, any Intellectual Property), (B) enter into or otherwise effectuate any Business Combination with any other Person,
and/or (C) enter into or otherwise effectuate any Permitted Acquisition with any other Person; and (iii) schedules,
exhibits, annexes and other addenda to—and any and all letters of intent, side letters, memoranda of understanding, plans
of merger and other agreements entered into in connection with or affecting any terms of—any documents referenced in the
immediately preceding subclauses (i) and (ii).

 

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1.3       “Acquisition
Document Rights” means, individually and collectively with respect Grantor, all of Grantor’s rights, title
and interest in, to and under the Acquisition Documents, including (i) all rights and remedies relating to monetary damages,
including indemnification rights and remedies, and claims for damages or other relief pursuant to or in respect of all or any
part of the Acquisition Documents, and (ii) all proceeds, collections, recoveries and rights of subrogation with respect
to the foregoing.

 

1.4       “Borrower” has the meaning given to such
terms in the preamble to this Agreement.

 

1.5       “Claims
Act” means the Federal Assignment of Claims Act of 1940, 31 U.S.C. § 3727 et seq., as amended.

 

1.6       “Collateral”
has the meaning given to such term in Section 2.2.

 

1.7       “Copyrights”
means, individually and collectively with respect to Grantor, any and all copyrights (whether statutory or common law, whether
established or registered in the United States or any other country or any political subdivision thereof, whether registered or
unregistered and whether published or unpublished; and including those listed on Grantor’s Perfection Certificate), all tangible
embodiments of the foregoing and all copyright registrations and applications made by Grantor, in each case, whether now owned
or hereafter created or acquired by or assigned to Grantor, together with any and all (i) rights and privileges arising
under applicable law and international treaties and conventions with respect to Grantor’s use of such copyrights, (ii)
reissues, renewals, continuations and extensions thereof and amendments thereto, (iii) income, fees, royalties, damages,
claims and payments now or hereafter due and/or payable with respect thereto, including damages and payments for past, present
or future infringements thereof, (iv) rights corresponding thereto throughout the world, and (v) rights to sue for
past, present or future infringements thereof.

 

1.8       “Corporate
Obligor” has the meaning ascribed to such term in the Loan Agreement, and such defined term and its meaning are
incorporated herein by this reference.

 

1.9       “Credit
Accommodations” has the meaning given to such term in Paragraph A of the Recitals.

 

1.10     “Effective
Date” has the meaning given to such term in the preamble to this Agreement.

 

1.11     “ESIGN”
has the meaning given to such term in Section 5.5.

 

1.12     “Event
of Default” has the meaning given to such term in Article 14, provided that such term and its use,
meaning and interpretation, for purposes of this Agreement and all other of the Loan Documents, is expressly subject to the provisions
of Section 8.2 of the Loan Agreement.

 

1.13     “First
Priority” means, with respect to any Lien purported to be created in any Collateral pursuant to this Agreement, such
Lien is the most senior Lien to which such Collateral is subject (subject only to Liens permitted herein or any other of the Loan
Documents (e.g., Permitted Liens), and/or as otherwise expressly permitted in a writing signed by a duly authorized officer
of Lender).

 

1.14      “Grantor”
has the meaning given to such term in the preamble to this Agreement, provided that such meaning and term is subject
to the provisions of Section 18.1.

 

1.15      “Guarantor” has
the meaning given to such term in the preamble to this Agreement.

 

1.16      “Intellectual
Property Collateral” means, collectively, the Patents, Trademarks (excluding only United States intent-to-use Trademark
applications to the extent that and solely during the period in which the grant of a security interest therein would impair, under
applicable federal law, the registrability of such applications or the validity or enforceability of registrations issuing from
such applications), Copyrights, Trade Secrets, Intellectual Property Licenses and all other industrial, intangible and intellectual
property of any type, including mask works and industrial designs.

 

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1.17      “Intellectual
Property Licenses” means, individually and collectively with respect to Grantor, any and all license and distribution
agreements with, and covenants not to sue, any other Person with respect to any Patent, Trademark, Copyright or Trade Secret or
any other patent, trademark, copyright or trade secret, whether Grantor is a licensor or licensee, distributor or distributee under
any such license or distribution agreement (including those listed on Grantor’s Perfection Certificate), together with any
and all (i) renewals, extensions, supplements and continuations thereof, (ii) income, fees, royalties, damages, claims
and payments now and hereafter due and/or payable thereunder and with respect thereto including damages and payments for past,
present or future infringements or violations thereof, (iii) rights to sue for past, present and future infringements or
violations thereof, and (iv) other rights to use, exploit or practice any or all of the Patents, Trademarks, Copyrights
or Trade Secrets or any other patent, trademark, copyright or trade secret.

 

1.18       “Intellectual
Property Security Agreement” means an agreement substantially in the form of Exhibit B hereto, or such other
form as is satisfactory to Lender in its sole but reasonable discretion.

 

1.19       “Lender”
has the meaning given to such term in the preamble to this Agreement.

 

1.20       “Loan”
has the meaning given to such term in Paragraph A of the Recitals.

 

1.21       “Loan
Agreement” has the meaning given to such term in Paragraph A of the Recitals.

 

1.22      “Obligations”
is intended to be used in its most comprehensive sense and collectively means and includes any and all: (i) Indebtedness,
obligations, liabilities and undertakings of each and all of Grantor and the other Obligors (expressly including, without limitation,
Borrower and each Guarantor) to, or in favor or for the benefit of, Lender (and/or any Affiliate of Lender) of whatever kind and
description, whether direct or indirect, absolute or contingent, primary or secondary, joint or several, due or to become due,
now existing or hereafter arising, and whether or not evidenced by or arising under this Agreement or any other of the Loan Documents
(including, without limitation and for the avoidance of doubt, any other Security Instruments, the Loan Agreement, any one or
more Guaranties, the Note and any and all other now or hereafter existing promissory notes or other instruments evidencing, securing,
guaranteeing or relating to any Indebtedness of any such Obligors to Lender and constituting any part of the Loan Documents),
or otherwise; and (ii) “Obligations” as defined in the Loan Agreement, which such defined term and the
meaning ascribed to it in the Loan Agreement are hereby incorporated by this reference into the definition provided by this Section
1.22.

 

1.23      “Party”
and “Parties” have the meanings given to such terms in the preamble to this Agreement.

 

1.24      “Patents”
means, individually and collectively with respect to Grantor, any and all patents issued or assigned to, and all patent applications
and registrations made by, Grantor (whether issued, established or registered or recorded in the United States or any other country
or any political subdivision thereof; and including those listed on Grantor’s Perfection Certificate) and all tangible embodiments
of the foregoing, together with any and all (i) rights and privileges arising under applicable law and international treaties
and conventions with respect to Grantor’s use of any patents, (ii) inventions and improvements described and claimed
therein, (iii) reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof and amendments
thereto, (iv) income, fees, royalties, damages, claims and payments now or hereafter due and/or payable thereunder and with
respect thereto, including damages and payments for past, present or future infringements thereof, (v) rights corresponding
thereto throughout the world, and (vi) rights to sue for past, present or future infringements thereof.

 

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1.25      “Perfection
Certificate” has the meaning given to such term in Article 7. Grantor’s duly executed Perfection Certificate
is attached hereto as Exhibit A and is incorporated herein, and made a part hereof, by this reference.

 

1.26
     “Recitals” has the meaning given to such term on Page 2 of this Agreement (specifically, in the
paragraph that immediately precedes Article 1 hereof).

 

1.27      “Rotmans”
has the meaning given to such term in the preamble to this Agreement.

 

1.28      “State”
means The Commonwealth of Massachusetts.

 

1.29      “Subsidiary”
has the meaning ascribed to such term in the Loan Agreement, and such defined term and its meaning are incorporated herein by this
reference.

 

1.30      “Trade
Secrets” means, individually and collectively with respect to Grantor, any and all (so-called) “know-how”,
trade secrets, manufacturing and production processes and techniques, inventions, research and development information, technical,
marketing, financial and business data and databases, pricing and cost information, business and marketing plans, customer and
supplier lists and information, all other confidential and proprietary information, and all tangible embodiments of the foregoing,
together with any and all (i) rights and privileges arising under applicable law and international treaties and conventions
with respect to such trade secrets, (ii) income, fees, royalties, damages, claims and payments now or hereafter due and/or
payable with respect thereto, including damages and payments for past, present or future misappropriations thereof, (iii) rights
corresponding thereto throughout the world, and (iv) rights to sue for past, present or future misappropriations thereof.

 

1.31      “Trademarks”
means, individually and collectively with respect to Grantor, all trademarks (including service marks), slogans, logos, symbols,
certification marks, collective marks, trade dress, uniform resource locators (URL’s), domain names, corporate names and
trade names (whether statutory or common law, whether registered or unregistered and whether established or registered in the United
States or any other country or any political subdivision thereof; and including those listed on Grantor’s Perfection Certificate)
that are owned by or assigned to Grantor, all registrations and applications for the foregoing, and all tangible embodiments of
the foregoing, together with, in each case, the goodwill symbolized thereby and any and all (i) rights and privileges arising
under applicable law and international treaties and conventions with respect to Grantor’s use of any trademarks, (ii)
reissues, continuations, extensions and renewals thereof and amendments thereto, (iii) income, fees, royalties, damages
and payments now and hereafter due and/or payable thereunder and with respect thereto, including damages, claims and payments for
past, present or future infringements thereof, (iv) rights corresponding thereto throughout the world, and (v) rights
to sue for past, present and future infringements thereof.

 

1.32
     “UCC” means the Uniform Commercial Code as in effect from time to time in the State; provided,
however, that if by reason of mandatory provisions of law, any or all of the perfection or priority of Lender’s
security interest in any item or portion of the Collateral is governed by the Uniform Commercial Code as in effect in any state
or jurisdiction other than the State, the term “UCC” means the Uniform Commercial Code as in effect
from time to time in such other state or jurisdiction for purposes of the provisions hereof relating to such perfection or priority
and for purposes of definitions relating to such provisions.

 

1.33      “UETA”
has the meaning give to such term in Section 5.5.

 

1.34      “Vystar”
has the meaning given to such term in the preamble to this Agreement.

 

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2.             GRANT
OF SECURITY INTEREST AND LIEN; COLLATERAL.

 

2.1              Grant.
In consideration of Lender’s making or extending any Credit Accommodations, whether now or hereafter, and to secure the Indefeasible
Satisfaction of all Obligations, Grantor (and, for the avoidance of doubt if Grantor comprises more than one Person, each Person
constituting Grantor) hereby grants to Lender a First Priority Lien on and security interest in, and hereby pledges and assigns
to Lender, all of the Collateral.

 

2.2              Description
of the Collateral. As used in this Agreement, the term “Collateral” is intended to be used in its
most comprehensive sense and, with respect to Grantor (and, for the avoidance of doubt if Grantor comprises more than one Person,
each Person constituting Grantor), means any and all assets and property of Grantor, and all right, title, interest and claims
of Grantor in, to and under any and all such assets and property, wherever located, and whether now or hereafter owned, existing,
acquired or arising (and howsoever acquired or arising), and any and all proceeds and products thereof, accessions thereto, and
replacements and substitutions therefor, expressly including, without limitation, all right, title, interest and claims of Grantor
(and, for the avoidance of doubt if Grantor comprises more than one Person, all right, title, interest and claims of each such
Person constituting Grantor) in, to and under the following:

 

2.2.1       all
accounts and accounts receivable;

 

2.2.2       all
inventory, including, without limitation, raw materials, work-in-process, finished goods and supplies, and perishable inventory;

 

2.2.3       all
contract rights;

 

2.2.4       all general intangibles, including, without limitation, (i) all payment intangibles; and (ii)
all licenses, franchises, permits, approvals and authorizations obtained, granted, used or required in connection with Grantor’s
business operations or any other Collateral;

 

2.2.5       all
Intellectual Property Collateral;

 

2.2.6       all cash proceeds and noncash proceeds resulting from, or arising directly or indirectly
in connection with, Grantor’s sale, assignment, bargain, transfer or other disposition of any kind whatsoever of any Collateral
or any of Grantor’s rights, title, interests and claims in, to or under any Collateral;

 

2.2.7       all
equipment, machinery, furniture;

 

2.2.8       all
farm products;

 

2.2.9
      all goods of any kind whatsoever, including, without limitation, perishable goods and goods customarily sold on any recognized
market;

 

2.2.10     all chattel paper (whether tangible or electronic);

 

2.2.11     all fixtures, including, without limitation,
all trade fixtures and movable fixtures;

 

2.2.12
    all investment property, financial assets, certificated and uncertificated securities or other stock or Equity Interests of
any kind or nature (irrespective of whether or not any of the foregoing may be traded on any publicly recognized market or
exchange), and all profits interests, economic interests, beneficial interests, securities accounts and security
entitlements; and expressly including, without limitation and for the avoidance of doubt, all right, title and interest in
any stock in Grantor or any Subsidiary thereof (regardless of class, voting rights, preference, certification or other
characteristics thereof, and irrespective of whether now or hereafter existing, issued, authorized and/or outstanding) now or
hereafter held or deposited in any one or more securities accounts, or any escrow, trust or other account(s) of any kind, for
purposes of, or directly or indirectly relating to, any future capital raise, or issuance, sale, transfer, exchange or other
disposition thereof, and/or which is now or hereafter the subject of any one more securities entitlements;

 

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2.2.13     all letter-of-credit rights;

 

2.2.14     all rights
under judgments, and all commercial tort claims and choses in action;

 

2.2.15       all
books, records and information relating to the operation of Grantor’s business or otherwise with respect to any Collateral,
and all rights of access to such books, records and information and all property in which such books, records and information are
stored, recorded and maintained;

 

2.2.16       all
computers, software, point-of-sale systems and other systems utilized from time to time by Grantor in the ordinary course of business
or otherwise;

 

2.2.17       all
instruments, promissory notes, documents of title, documents, policies and certificates of insurance, securities, deposits, deposit
accounts, money, cash or other property;

 

2.2.18     all Acquisition Documents and Acquisition Document
Rights;

 

2.2.19       all
federal, state and local tax refunds and abatements to which Grantor is or becomes entitled, howsoever and whenever arising, including,
without limitation, any loss carryback tax refunds;

 

2.2.20       all
insurance proceeds, refunds and premium rebates, including, without limitation, proceeds of fire and credit insurance, whether
any of such proceeds, refunds and premium rebates arise out of any of the Collateral listed, described or contemplated in this
Article 2 or otherwise;

 

2.2.21     all
liens, guaranties, rights, remedies and privileges pertaining to any of the Collateral listed, described or contemplated anywhere
in this Article 2, including, without limitation, the right of stoppage in transit;

 

2.2.22       all
deposit, checking, savings, money market, securities and other accounts maintained or owned by, or maintained for the benefit or
in the name of, Grantor with any bank, credit union, trust company or other financial institution, organization or association
of any kind, including, without limitation, any and all cash or other assets in any such accounts at any time;

 

2.2.23       any
and all deposits or other sums at any time credited by or due from Lender to Grantor, and any and all other property of Grantor
now and at any time or times hereafter in the possession or custody of, or in transit to, Lender or any Affiliate of Lender (including,
without limitation, certificated securities or other stock or equity interests of any kind or nature); and

 

2.2.24       all
personal property and assets of Grantor not otherwise set forth or listed or contemplated above in this Article 2 (whether
tangible or intangible), and all right, title, interest and claims of Grantor of any kind therein, thereto, thereunder or otherwise
directly or indirectly in connection therewith, whether now or at any time or times hereafter owned, existing, acquired or arising
(and howsoever acquired or arising), and any and all products and proceeds (whether cash proceeds or noncash proceeds) thereof,
accessions thereto, and substitutions and replacements therefor, wherever located.

 

     7

     

    

 

3.             CROSS
COLLATERALIZATION. Grantor hereby expressly confirms, acknowledges and agrees that the Indefeasible Satisfaction of
all of the Obligations is secured (directly or indirectly) on a cross-collateralized basis by (i) all of the
Collateral and the security interests and other Liens therein and thereon granted to Lender pursuant this Agreement, (ii)
all of the Mortgaged Properties and the Liens thereon granted to Lender pursuant to the Mortgages, and (iii) any and
all other property and assets (whether tangible or intangible) of Grantor and/or any other of the Obligors that may be now or
at any time or times hereafter: (A) subject to any security interests or other Liens established, evidenced and/or
created in favor of Lender (and/or any Affiliate of Lender) pursuant to any other of the Security Instruments or Loan
Documents; (B) in the possession of, or in transit to, Lender (and/or any Affiliate of Lender), and/or (C)
pledged, assigned (whether collaterally or otherwise), mortgaged, hypothecated or granted to, or in favor or for the benefit
of, Lender (and/or any Affiliate of Lender) by Grantor and/or any other such Obligors under any other agreements, instruments
or documents, whether as collateral or security for the (y) Obligations, and/or (z) for any other now or hereafter existing
or arising obligations, liabilities or undertakings of Grantor or any such Obligors to, or in favor or for the benefit of,
Lender (or any Affiliate thereof), howsoever the same may be established, created or evidenced.

 

4.             AUTHORIZATION AND
RATIFICATION.

 

        4.1           Authorization
to File.

 

4.1.1       Grantor
hereby irrevocably authorizes Lender at any time and from time to time to file in any relevant jurisdiction any financing statements
(including fixture filings) and any continuations thereof and/or amendments thereto that contain the information required by Article
9 of the UCC of each applicable jurisdiction for the filing of any financing statement or amendment or continuation relating to
the Collateral, including (i) whether Grantor is an organization, the type of organization and any organizational identification
number issued to Grantor; (ii) any financing or continuation statements or other documents for the purpose of perfecting,
confirming, continuing, enforcing or protecting the Liens and security interest granted by Grantor hereunder and under any other
of the Loan Documents, without the signature of Grantor where permitted by law, including the filing of a financing statement (or
amendment thereto) describing or indicating the Collateral (A) as “all assets” of Grantor or words of similar
effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC of
the State or any other state or jurisdiction, or (B) as being of an equal or lesser scope or with greater detail; and (iii)
in the case of a financing statement filed as a fixture filing or covering Collateral constituting minerals or the like to be extracted
or timber to be cut, a sufficient description of the real property to which such Collateral relates. Grantor hereby agrees to provide
all information described in the immediately preceding sentence to Lender promptly upon Lender’s request.

 

4.1.2       Grantor
hereby further authorizes Lender to file with the United States Patent and Trademark Office and the United States Copyright Office
(and any successor office and any similar office of any Governmental Authority in any United States state or other country) this
Agreement, the Intellectual Property Security Agreement and/or any other necessary documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Liens and security interests granted by Grantor hereunder or under any other of the Loan
Documents, without the signature of Grantor where permitted by law, and naming Grantor as debtor (and/or, as the case may be, assignor),
and Lender as secured party (and/or, as the case may be, assignee).

 

4.1.3       Grantor
hereby further authorizes Lender at any time and from time to time, with respect to any motor vehicles constituting all or any
part of the Collateral, to file in any relevant jurisdiction with the registrar of motor vehicles or other appropriate Governmental
Authority in such jurisdiction an application or other document requesting the notation or other indication of the Liens and security
interests created hereunder (or under any other of the Loan Documents) on such certificate of title, but only to the extent such
notation or other indication is required under Section 5.8 below.

 

     8

     

    

 

4.2       Ratification
by Grantor. If and to the extent Lender has, prior to the Effective Date (or, as the case may be, prior to
Grantor’s execution of any counterpart signature page and/or joinder to this Agreement), any valid and existing Liens
on the Collateral, Grantor also hereby ratifies its authorization for Lender to have filed in any UCC jurisdiction any
initial financing statements or amendments thereto if filed prior to the Effective Date (or, as the case may be, prior to
Grantor’s execution of any counterpart signature page and/or joinder to this Agreement).

 

5.            ACTIONS BY GRANTOR AS
TO COLLATERAL. To further insure the attachment, perfection and priority of, and the ability of Lender to enforce, Lender’s
Lien in the Collateral, Grantor hereby agrees, in each case at Grantor’s sole and exclusive Cost and Expense, to take (or
cause to be taken or effectuated) the following actions with respect to the following Collateral, none of which shall serve or
be deemed as any limitation on the Obligations (or any part thereof) and/or any other obligations, liabilities or undertakings
of any Obligors contained in this Agreement and/or in any other of the Loan Documents:

 

5.1       Promissory
Notes and Tangible Chattel Paper. If Grantor now, or at any time hereafter while any Obligations are outstanding, holds or
acquires any promissory notes or tangible chattel paper, Grantor shall, and hereby agrees to, forthwith endorse, assign and deliver
the same to Lender, accompanied by such instruments of transfer or assignment duly executed in blank as Lender may from time to
time specify; provided, that excepted from the foregoing shall be financing held by Grantor from the
sale of assets where Lender has issued a partial release of the conveyed assets.

 

5.2       Deposit
Accounts. For each deposit account that Grantor now, or at any time hereafter while any Obligations are outstanding, maintains
and/or opens at any depository institution, Grantor shall, and hereby agrees to, at Lender’s request and option (exercisable
in its sole but reasonable discretion), pursuant to an agreement in form and substance reasonably satisfactory to Lender, either:
(i) cause such depositary institution to agree to comply, without further consent of Grantor, at any time with instructions
from Lender to such depositary institution directing the disposition of funds from time to time credited to such deposit account;
or (ii) arrange for Lender to become the customer of such depositary institution with respect to the deposit account, with
Grantor being permitted, only with the express prior written consent of Lender, to exercise rights to withdraw funds from such
deposit account. Lender agrees with Grantor that Lender shall not give any such instructions or withhold any withdrawal rights
from Grantor unless any unwaived Event of Default has occurred, or, if effect were given to any withdrawal not otherwise permitted
by the Loan Documents, an Event of Default would occur. The provisions of this Section 5.2 shall not apply to: (A)
any deposit account for which Grantor, the depositary institution and Lender have entered into a cash collateral agreement specially
negotiated among Grantor, the depositary institution and Lender for the specific purpose set forth therein; (B) a deposit
account for which Lender is the depositary institution and is in automatic control; and (C) any deposit accounts specially
and exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Grantor’s
salaried employees.

 

5.3       Investment
Property and Equity Interests. If Grantor now, or at any time hereafter while any Obligations are outstanding, holds or
acquires any certificated securities or other Equity Interests of any kind or nature, Grantor shall, and hereby agrees to,
forthwith endorse, assign and deliver the same to Lender, accompanied by such instruments of transfer or assignment duly
executed in blank as Lender may from time to time specify in its sole but reasonable discretion. If any securities or other
Equity Interests now or hereafter acquired by Grantor are uncertificated and are issued to Grantor or its nominee directly by
the issuer thereof, Grantor shall, and hereby agrees to, immediately notify Lender thereof in writing, and, at Lender’s
request and option (exercisable in its sole but reasonable discretion), pursuant to an agreement in form and substance
reasonably satisfactory to Lender, either: (i) cause the issuer to agree to comply, without further consent of Grantor
or such nominee, at any time with instructions from Lender as to such securities or other Equity Interest; or (ii)
arrange for Lender to become the registered owner of such securities or other Equity Interests. If any securities or other
Equity Interests, whether certificated or uncertificated, or any other investment property now or hereafter acquired by
Grantor are held by Grantor or its nominee through a securities intermediary or commodity intermediary, Grantor shall, and
hereby agrees to, immediately notify Lender thereof in writing, and, at Lender’s request and option (exercisable in its
sole but reasonable discretion), pursuant to an agreement in form and substance satisfactory to Lender (in its sole but
reasonable discretion), either: (A) cause such securities intermediary or (as the case may be) commodity intermediary
to agree to comply, in each case without further consent of Grantor or such nominee, at any time with entitlement orders or
other instructions from Lender to such securities intermediary as to such securities or other Equity Interests or investment
property, or (as the case may be) to apply any value distributed on account of any commodity contract as directed by Lender
to such commodity intermediary; or (B) in the case of financial assets or other investment property held through a
securities intermediary, arrange for Lender to become the entitlement holder with respect to such investment property, with
Grantor being permitted, only with the express prior written consent of Lender, to exercise rights to withdraw or otherwise
deal with such investment property. Notwithstanding (but not in limitation of) the foregoing, Lender agrees with Grantor that
Lender shall not give any such entitlement orders or instructions or directions to any such issuer, securities
intermediary or commodity intermediary, and shall not withhold its consent to the exercise of any withdrawal or dealing
rights by Grantor, unless any unwaived Event of Default has occurred, or, after giving effect to any such investment and
withdrawal rights not otherwise permitted by the Loan Documents, an Event of Default would occur. The provisions of this Section
5.3 shall not apply to any financial assets credited to a securities account for which Lender is the securities
intermediary.

 

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5.4       Landlord
Access Agreements; Bailee Letters. Grantor shall, and hereby agrees to, use its commercially reasonable efforts to obtain and
deliver to Lender (i) as soon as practicable after its execution hereof (including any joinder and/or counterpart signature
page hereto), and with respect to each location where Grantor maintains any Collateral, a bailee letter and/or a landlord lien
waiver and access agreement, as applicable; and (ii) a bailee letter and/or a landlord lien waiver and access agreement,
as applicable, from all such bailees and landlords, as applicable, who from time to time have possession of any Collateral in the
ordinary course of Grantor’s business.

 

5.5       Electronic
Chattel Paper and Transferable Records. If Grantor now, or at any time hereafter while any Obligations are outstanding, holds
or acquires any right or interest in or to any electronic chattel paper, or any “transferable record,” as that term
is defined in Section 201 of the federal Electronic Signatures in Global and National Commerce Act (15 U.S.C. § 7001 et
seq., as amended from time to time; hereinafter, “ESIGN”), or in Section 16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction (as so in effect and amended from time to time, hereinafter, “UETA”),
Grantor shall, and hereby agrees to, promptly notify Lender thereof and, at the request and option of Lender (exercisable in its
sole but reasonable discretion), shall take such action as Lender may reasonably request to vest in Lender control, under §
9-105 of the UCC, of such electronic chattel paper or control under Section 201 of ESIGN or, as the case may be, under Section
16 of UETA, as so in effect in such jurisdiction, of such transferable record. Lender agrees with Grantor that Lender will arrange,
pursuant to procedures satisfactory to Lender and so long as such procedures will not result in Lender’s loss of control,
for Grantor to make alterations to the electronic chattel paper or transferable record permitted under UCC § 9-105 or, as
the case may be, Section 201 of ESIGN or Section 16 of UETA for a party in control to make without loss of control, unless any
unwaived Event of Default has occurred, or, after taking into account any action by Grantor with respect to such electronic chattel
paper or transferable record, an Event of Default would occur.

 

5.6       Letter-of-Credit
Rights. If Grantor is now, or at any time while any Obligations are outstanding becomes, a beneficiary under a letter of
credit, Grantor shall, and hereby agrees to, promptly notify Lender thereof in writing and, at the request and option of
Lender, exercised in its sole but reasonable discretion, Grantor shall, pursuant to an agreement in form and substance
reasonably satisfactory to Lender, either (i) arrange for the issuer and any confirmer or other nominated Person of
such letter of credit to consent to an assignment to Lender of the proceeds of such letter of credit; or (ii) arrange
for Lender to become the transferee beneficiary of such letter of credit, with Lender agreeing, in each case, that the
proceeds of such letter of credit are to be applied toward the repayment of Indebtedness constituting the Obligations (or any
part thereof) upon the occurrence of any unwaived Event of Default.

 

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5.7      Commercial
Tort Claims. If Grantor now, or at any time hereafter while any Obligations are outstanding, holds or acquires any commercial
tort claim which might reasonably result in awarded damages (less any and all legal and other Costs and Expenses incurred or reasonably
expected to be incurred by Grantor) of $5,000.00 or more, and which is not listed on Grantor’s Perfection Certificate,
Grantor shall, and hereby agrees to, give immediate written notice thereof to Lender and, at the request and option of Lender (exercisable
in its sole but reasonable discretion), immediately execute or otherwise authenticate a supplement to this Agreement, and will
otherwise take any and all necessary actions to subject such commercial tort claim to the First Priority security interest and
Liens created under and by this Agreement.

 

5.8      Motor
Vehicles. If Grantor now, or at any time hereafter while any Obligations are outstanding, owns any motor vehicles of any kind
with any NADA®, Kelley Blue Book® or Black
Book® (so-called) “trade-in value” of $5,000.00 or more, Grantor shall,
and hereby agrees to, deliver to Lender within thirty (30) days hereafter or thereafter, as the case may be, originals of the certificates
of title or ownership for all such motor vehicles owned by Grantor with Lender listed as a lienholder thereon.

 

5.9      Other
Actions as to Any and All Collateral. Grantor further agrees that Grantor shall, at Lender’s request and option, in each
case exercisable in Lender’s sole but reasonable discretion, take any and all other actions as Lender may at any time or
times reasonably determine to be necessary, advisable and/or useful for the preservation, attachment, perfection and/or priority
of, and/or for the ability of Lender to enforce or exercise any rights relating to, any security interests and other Liens hereunder
granted to Lender on all or any part of the Collateral, including, without limitation: (i) executing, delivering and, where
appropriate, filing financing statements and any amendments and continuations relating thereto under the UCC, to the extent, if
any, that Grantor’s signature thereon is required therefor; (ii) causing Lender’s name to be noted as secured
party on any certificate of title for a titled good and/or any other titled Collateral if such notation is a condition to attachment,
perfection or priority of, or ability of Lender to enforce, Lender’s Lien on such Collateral; (iii) complying with
any Requirements of Law (including, without limitation, any provision of any statute, regulation and/or treaty of the United States
and/or any other Governmental Authority) as to any Collateral if compliance therewith is a condition to attachment, perfection
or priority of, or ability of Lender to enforce, Lender’s Lien on such Collateral; (iv) obtaining any waivers, consents
and/or approvals from any Governmental Authority and/or other third Person(s) in form and substance reasonably satisfactory to
Lender, including, without limitation, any consent of any licensor, lessor or other Person obligated on Collateral; (v) obtaining
waivers from mortgagees and landlords, and bailee letters from bailees, as applicable, in form and substance satisfactory to Lender
and in the manner provided by this Agreement; (vi) taking any and all actions under any earlier versions of the UCC or under
any other Requirements of Law, as determined by Lender in its sole but reasonable discretion to be applicable in any relevant UCC
or other jurisdiction, including, without limitation, any foreign jurisdiction; and/or (vii) executing, delivering and,
where appropriate filing of, the Intellectual Property Security Agreement in the form attached hereto as Exhibit B, any supplemental
Intellectual Property Security Agreements and any other applicable filings related thereto with the United States Patent and Trademark
Office and the United States Copyright Office.

 

6.             INTELLECTUAL
PROPERTY COLLATERAL.

 

6.1      Intellectual
Property License. For the purpose of enabling Lender, following the occurrence of any unwaived Event of Default, to
exercise rights and remedies under Article 15 hereof at such time as Lender shall be lawfully entitled to exercise
such rights and remedies, and for no other purpose, Grantor hereby grants to Lender, to the extent of Grantor’s rights
and effective only upon the occurrence of any unwaived Event of Default, an irrevocable, non-exclusive license, subject, in
the case of Trademarks, to sufficient rights to quality control and inspection in favor of Grantor to avoid the risk of
invalidation of such Trademarks, to use and sublicense any of the Intellectual Property Collateral then owned by or licensed
to Grantor. Such license shall include access to all devices, products and media in which any of the Intellectual Property
Collateral is embodied, embedded, recorded or stored and to all computer programs used for the compilation or maintenance or
printout thereof.

 

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6.2          Dealing
With Intellectual Property. On a continuing basis, Grantor shall and hereby agrees to, at Grantor’s sole Cost and Expense:

 

6.2.1       promptly
following its becoming aware thereof, notify Lender of any adverse determination in any proceeding or the institution of any proceeding
in any federal, state or local court or administrative body or in the United States Patent and Trademark Office or the United States
Copyright Office regarding Grantor’s claim of ownership in or right to use any of the Intellectual Property Collateral material
to (i) the use and/or operation of any other Collateral or any Mortgaged Property; (ii) Grantor’s, Borrower’s
and/or any other Corporate Obligor’s business or business operations; and/or (iii) Grantor’s right to register
any such Intellectual Property Collateral or its right to keep and maintain any such registration in full force and effect;

 

6.2.2       maintain
and protect the Intellectual Property Collateral as presently used and operated and as contemplated by the Loan Agreement;

 

6.2.3     not
permit to lapse or become abandoned any Intellectual Property Collateral material to the use and/or operation of any other Collateral
or any Mortgaged Property, and/or to Grantor’s, Borrower’s and/or any other Corporate Obligor’s business or
business operations, in each case as presently used and operated and as contemplated by the Loan Agreement, and not settle or
compromise any pending or future litigation or administrative proceeding with respect to such Intellectual Property Collateral
absent Lender’s prior written consent;

 

6.2.4      upon Grantor obtaining knowledge thereof, promptly
notify Lender in writing of any event which could be reasonably expected to materially and adversely affect the value or utility
of all or any part of the Intellectual Property Collateral that is material to (i) the use and/or operation of any other
Collateral or any Mortgaged Property, (ii) Grantor’s, Borrower’s and/or any other Corporate Obligor’s
business or business operations, (iii) the ability of Grantor or Lender to Dispose of the Intellectual Property Collateral
or any portion thereof, and/or (iv) the rights and remedies of Lender in relation thereto, including, without limitation,
any levy or threat of levy or any legal process against the Intellectual Property Collateral or any portion thereof;

 

6.2.5     not
license the Intellectual Property Collateral, expressly excluding licenses entered into by Grantor in, or incidental to, the ordinary
course of business, or amend or permit the amendment of any of the licenses in a manner that adversely affects the right to receive
payments thereunder, or in any manner that could materially impair in the reasonable business judgment of Grantor, the value of
the Intellectual Property Collateral or the Lien on and security interest in the Intellectual Property Collateral created therein
hereby, without the prior written consent of Lender;

 

6.2.6       diligently keep adequate records
respecting its Intellectual Property Collateral; and

 

6.2.7       furnish
to Lender from time to time upon Lender’s reasonable request therefor reasonably detailed statements and amended schedules
(including to the Perfection Certificate, as the case may be) further identifying and describing the Intellectual Property Collateral
and such other materials evidencing or reports pertaining to the Intellectual Property Collateral as Lender may from time to time
reasonably request.

 

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6.3       Additional
Intellectual Property. If, at any time while any Obligations are outstanding, Grantor shall (i) obtain any rights
to any additional Intellectual Property Collateral, or (ii) become entitled to the benefit of any additional
Intellectual Property Collateral or any registration, renewal or extension thereof, including any reissue, division,
continuation or continuation-in-part of any Intellectual Property Collateral, or any improvement of, to, in and/or on any
Intellectual Property Collateral, Grantor hereby ratifies, confirms, acknowledges and agrees that the provisions of this
Agreement (including, without limitation, the provisions of this Article 6 and Article 15 below) shall automatically
apply to any and all any such items enumerated in the immediately preceding clause (i) or (ii) of this Section 6.3,
and any and all such items shall, with respect to Grantor, automatically constitute Intellectual Property Collateral
hereunder as if the same would have constituted Intellectual Property Collateral at the time of Grantor’s execution
hereof, and shall be subject to the security interests and other Liens created by this Agreement, without the necessity of
any further authorization, consent, exercise, ratification or other action of any kind by any Party. Grantor shall promptly (A)
provide to Lender written notice of any of the foregoing, and (B) confirm the attachment of the Lien and security
interest created by this Agreement to any rights or benefits described in clauses (i) or (ii) of the immediately preceding
sentence of this Section 6.3 by execution and delivery to Lender of an instrument in form and substance reasonably
acceptable to Lender describing such rights or benefits, and so confirming, and the filing of any instruments or
statements as shall be reasonably necessary to create, preserve, protect or perfect Lender’s security interest in and
Lien on such Intellectual Property Collateral, including by execution and filing of a supplemental Intellectual Property
Security Agreement in accordance with Section 5.9 hereof.

 

6.4       Intellectual
Property Litigation. Absent the existence of any unwaived Event of Default, Grantor shall have the right to commence and prosecute
in its own name, as the party in interest, for its own benefit and at the sole Cost and Expense of Grantor, such applications for
protection of the Intellectual Property Collateral and suits, proceedings or other actions to prevent the infringement, misappropriation,
counterfeiting, unfair competition, dilution, diminution in value or other damage as are necessary to protect the Intellectual
Property Collateral. Upon the occurrence of any unwaived Event of Default, Lender shall have the right—but shall in no way
be obligated—to file applications for protection of the Intellectual Property Collateral and/or bring suit in the name of
Grantor and/or Lender to enforce the Intellectual Property Collateral and any license thereunder. In the event of any such suit
upon the occurrence of any such unwaived Event of Default (as aforesaid), Grantor shall, at Lender’s and option, exercised
in its sole discretion, do any and all commercially reasonable acts, and execute any and all documents reasonably requested by
Lender in aid of such enforcement and Grantor shall promptly reimburse and indemnify Lender for all Costs and Expenses incurred
by or charged to Lender in the exercise of its rights under this Section 6.4 in accordance with the (as-incorporated) provisions
of Sections 18.4 and 18.5 below. Upon the occurrence of any unwaived Event of Default, if Lender shall not elect to bring
suit to enforce the Intellectual Property Collateral as permitted by this Section 6.4, Grantor shall, and hereby covenants
and agrees, at Lender’s request and option (exercisable in each instance in Lender’s sole but reasonable discretion),
to take all commercially reasonable actions necessary, whether by suit, proceeding or other action, to prevent the infringement,
misappropriation, counterfeiting, unfair competition, dilution, diminution in value of or other damage to any of the Intellectual
Property Collateral by any other Person; and for that purpose Grantor agrees to diligently maintain any suit, proceeding or other
action against any Person so infringing necessary to prevent such infringement.

 

7.          PERFECTION
CERTIFICATE. Grantor hereby represents and warrants that Grantor has completed, duly executed and delivered to Lender
the certificate(s) attached hereto as Exhibit A (each) entitled “Perfection Certificate”,
which contains certain information with respect to, inter alia, Grantor, its organization and the Collateral (as may
be amended, supplemented, addended or otherwise modified from time to time, individually or collectively, as the context may
require, herein referred to as the or a or any specified Person’s, “Perfection Certificate”).
As of the date upon which Grantor executed its Perfection Certificate, Grantor represents and warrants to Lender as follows: (i) Grantor’s
exact legal name is that as is indicated on its Perfection Certificate and on its signature page hereto and thereto; (ii) Grantor
is an organization of the type, and is organized in the jurisdiction, set forth in its Perfection Certificate; (iii) Grantor’s
Perfection Certificate accurately sets forth its organizational identification number or accurately states that Grantor has
none, and, if so required by the provisions of such Perfection Certificate, its taxpayer or employer identification number; (iv) Grantor’s
Perfection Certificate accurately sets forth Grantor’s place of business or, if more than one, its chief executive
office, as well as Grantor’s mailing address, if different; (v) all information set forth in
Grantor’s Perfection Certificate is true and correct; and (vi) there has been no change in any information set
forth in Grantor’s Perfection Certificate since the date upon which Grantor executed the same.

 

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8.          CERTAIN REPRESENTATIONS
AND WARRANTIES.

 

8.1
      Incorporation of Representation and Warranties. Grantor hereby makes the representations and warranties set forth in the
Loan Agreement as they relate to Grantor or to any one or more Loan Documents to which Grantor is a party, each of which is hereby
incorporated into this Agreement, mutatis mutandis, by this reference, and each of which Grantor hereby expressly reaffirms,
ratifies and confirms, and each of which Lender shall be entitled to rely on as though fully set forth and made by Grantor herein;
provided however, that, without limiting the foregoing, each reference in any such representation and warranty to
Borrower’s knowledge shall, for the purposes of this Section 8.1, be deemed to be a reference to Grantor’s knowledge

 

8.2       Representations
and Warranties Regarding the Collateral. In addition to, and without limiting, any other of the representations and warranties
of Grantor set forth (or incorporated by reference and reaffirmed) herein, Grantor hereby represents and warrants that, in respect
of the Collateral:

 

             8.2.1      Grantor
is the absolute owner of (and/or has other rights in or power to Dispose of) the Collateral, free from any and all rights, titles,
interests, claims and Liens of any other Person, except for the Liens of the Loan Documents (including, without limitation, those
granted, created and established hereunder) in favor of Lender (and/or Lender’s Affiliates, as the case may be) and Permitted
Liens, and no financing statement or other instrument similar in effect (including, without limitation, any amendment or continuation
of any financing statement) covering all or any part of the Collateral or listing Grantor as a debtor is on file in any recording
or filing office, except such as have been heretofore filed in favor of Lender;

 

             8.2.2      none
of the Collateral constitutes, or is the proceeds of, farm products;

 

             8.2.3      except
as otherwise disclosed to Lender in writing (including, without limitation in Grantor’s Perfection Certificate or in any
other Exhibit, Schedule or other addenda attached hereto or to the Loan Agreement), with respect to any and all Intellectual Property
Collateral that is material to the use and/or operation of any other Collateral or any Mortgaged Property, or Grantor’s,
Borrower’s and/or any other Corporate Obligor’s business or business operations: (i) such Intellectual
Property Collateral is valid, subsisting, unexpired and enforceable and has not been abandoned; (ii) Grantor is the
exclusive owner of all right, title and interest in and to, or has the right to use, all such Intellectual Property Collateral;
(iii) the consummation and performance of this Agreement and/or any other of the Loan Documents to which Grantor is
a party will not result in the invalidity, unenforceability or impairment of any such Intellectual Property Collateral, or in default
or termination of any Intellectual Property License; (iv) there are no outstanding holdings, decisions, consents, settlements,
decrees, orders, injunctions, rulings or judgments that would limit, cancel or question the validity or enforceability of any such
Intellectual Property Collateral or Grantor’s rights therein or use thereof; (v) to Grantor’s knowledge
the operation of Grantor’s business and Grantor’s use of such Intellectual Property Collateral in connection therewith,
does not infringe or misappropriate the intellectual property rights of any other Person; (vi) no action or proceeding
is pending or, to Grantor’s knowledge, threatened (A) seeking to limit, cancel or question the validity of any
such Intellectual Property Collateral or Grantor’s ownership interest or rights therein, (B) which, if adversely
determined, could have a Material Adverse Effect on the value of any such Intellectual Property Collateral, or (C) alleging
that any such Intellectual Property Collateral, or Grantor’s use thereof in the operation of its business, infringes or misappropriates
the intellectual property rights of any Person; and (vii) to Grantor’s knowledge, there has been no Material
Adverse Effect on such Grantor’s rights in its Trade Secrets constituting all or any part of such Intellectual Property Collateral
as a result of any unauthorized use, disclosure or appropriation by or to any Person, including Grantor’s current and former
employees, contractors and agents;

 

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             8.2.4     none
of the account debtors or other Persons obligated on any of the Collateral is a Governmental Authority covered by the Claims Act,
or any similar Requirements of Law, in respect of such Collateral; and

 

             8.2.5    the
Collateral is and will be valid and genuine in all respects, and the pledge of the Collateral pursuant to this Agreement, together
with the filing of a completed financing statement accurately describing Grantor, Lender and such Collateral with applicable Governmental
Authorities, creates a valid and perfected Lien (or Liens) on all right, title, interest and claims in, to and under the Collateral
that may be perfected by such filing, securing the payment and performance when due of the Obligations.

 

9.            CERTAIN COVENANTS.

 

9.1     Incorporation
of Covenants. Grantor hereby makes and undertakes the covenants and agreements set forth in the Loan Agreement as they relate
to Grantor and/or to any one or more Loan Documents to which Grantor is a party, each of which is hereby incorporated into this
Agreement, mutatis mutandis, by this reference, and each of which Lender shall be entitled to rely on as though fully set
forth and made and agreed to by Grantor herein. Grantor hereby expressly (i) reaffirms, ratifies and confirms, and acknowledges
and agrees that it is bound by and will Indefeasibly Satisfy, each and all of the as- incorporated covenants, agreements and undertakings
referenced by the immediately preceding sentence, and all other of its covenants, agreements and undertakings contained herein;
and (ii) covenants and agrees with, and hereby promises to, Lender that Grantor will duly and punctually perform or cause
to be performed, and will Indefeasibly Satisfy, each and every part of the Obligations and all of the terms and conditions of the
Loan Documents to which it is a party.

 

9.2     Joinder
of Additional Grantors. Until all Obligations are Indefeasibly Satisfied, Grantor shall, and hereby covenants and agrees
to, cause each hereafter existing, acquired, organized, incorporated, declared, established, formed and/or created Subsidiary
of Grantor or any other Corporate Obligor to promptly, and in any event within thirty (30) days, after the acquisition,
organization, incorporation, declaration, establishment, formation and/or creation of such new Subsidiary, (i) pledge
all of its assets, and grant First Priority security interests and other Liens thereon, to Lender pursuant and subject to the
provisions of the Loan Agreement (including, without limitation, Section 6.3.3 thereof), and (ii) execute and deliver
to Lender a joinder and/or counterpart signature page to this Agreement, together with a Perfection Certificate (in each case
executed and delivered by a Responsible Officer thereof) and all such other instruments, agreements, certificates, filings or
other documents as may be required under the provisions of the Loan Agreement. Upon Grantor’s execution and delivery of
any joinder and/or counterpart signature page to this Agreement, such Subsidiary shall constitute a “Grantor”
hereunder with the same force and effect as if originally named as a Grantor herein. Upon the execution and delivery by any
such Subsidiary of any such joinder and/or counterpart signature page hereto, and of any such required and accompanying
Perfection Certificate, any and all supplemental schedules, exhibits or other addenda attached thereto shall, together with
such Perfection Certificate itself, be incorporated into and become part of and supplement the Exhibits, Scheduled and/or
other addenda attached to this Agreement, and each reference to such Perfection Certificate, Exhibits, Scheduled and/or other
addenda shall mean and be a reference to such Perfection Certificate, Exhibits, Scheduled and/or other addenda as amended,
supplemented or otherwise modified from time to time. The execution and delivery any such joinder and/or
counterpart signature page hereto, and of any such required and accompanying Perfection Certificate, shall not require the
consent of or authorization by any other, then-existing Grantor hereunder. The rights and obligations of each Grantor
hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a Party to this
Agreement.

 

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9.3        Covenants
Concerning the Collateral and Grantor. In addition to, and without limiting, any other of the covenants and agreement of Grantor
set forth (or incorporated by reference) herein, Grantor hereby covenants and agrees with Lender as follows:

 

9.3.1           The Collateral,
to the extent not delivered to Lender pursuant to the provisions of Article 5 above, will be kept at those locations listed
on Grantor’s Perfection Certificate and Grantor will not remove the Collateral from such locations except in the ordinary
course of Grantor’s business or as otherwise permitted hereunder or under any other of the Loan Documents, without providing
at least thirty (30) days’ prior written notice to Lender;

 

9.3.2           Grantor
will keep the Collateral in good order and repair (except for ordinary wear and tear) and will not use the same in violation of
Requirements of Law or any policy of insurance thereon;

 

9.3.3           Except
as otherwise set forth in any other of the Loan Documents, and except for the Liens herein granted and the Permitted Liens, Grantor
shall be the owner of (or have other rights in) the Collateral free from any right or claim of any other Person or any Lien, and
Grantor shall defend the same against, and indemnify and hold Lender (and each and all of the other Indemnified Parties) harmless
from (except in the event of gross negligence, fraud or willful misconduct on the part of any one or more Indemnified Parties),
all claims and demands of all Persons at any time claiming the same or any interests therein adverse to Lender;

 

9.3.4           Except
(i) for Permitted Liens; (ii) as otherwise expressly permitted by Lender in writing, and/or (iii) as otherwise
expressly permitted in any other of the Loan Documents, Grantor shall not pledge, mortgage or create, or suffer to exist any right
of any Person in or claim by any Person to the Collateral, or any other Lien in and/or upon the Collateral in favor of any Person,
other than Lender;

 

9.3.5           From
and after the Effective Date, Grantor shall not permit to become effective in any lease, license, contract or other agreement,
a provision that would prohibit or require the consent of any Person to the grant of a Lien on such lease, license, contract or
other agreement in favor of Lender;

 

9.3.6           Grantor
shall promptly make, stamp or record such entries or legends on Grantor’s books and records and/or on any of the Collateral
consisting of chattel paper as Lender may reasonably request from time to time, to indicate and disclose that Lender has a Lien
on such Collateral;

 

9.3.7           Grantor
shall deliver to Lender from time to time promptly at Lender’s request (in Lender’s sole but reasonable discretion)
all invoices, original documents of title, contracts, chattel paper, instruments and any other writings relating thereto, and other
evidence of performance of contracts, or evidence of shipment or delivery of any merchandise or of the rendering of any services;
and Grantor will deliver to Lender promptly at Lender’s request from time to time (in Lender’s sole but reasonable
discretion) additional copies of any or all of such papers or writings, and such other information with respect to any of the Collateral
and such schedules of inventory, schedules of accounts and such other writings as Lender may in its sole discretion deem to be
necessary or effectual to evidence any Obligations or Lender’s Lien on all or any part of the Collateral;

 

9.3.8
          Grantor shall, substantially in accordance with and subject to the
provisions of Sections 6.1.3 and 6.1.4 of the Loan Agreement, permit Lender, its agents and/or its representatives, at any
reasonable time or times, at the sole Cost and Expense of Grantor, to (i) examine and make copies of or extracts from
any of Grantor’s books, records and files (including, without limitation, orders and original correspondence); (ii)
to perform field exams, and inspect and examine the Collateral and test or appraise the same as to quality, quantity, value
and condition; and (iii) to verify the Collateral or any portion or portions thereof or Grantor’s compliance
with the provisions of this Agreement and/or any other of the Loan Documents;

 

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9.3.9
          Grantor
will pay promptly when due all taxes, assessments, Governmental Charges and any other charges or levies upon the Collateral or
incurred in connection with the use or operation of such Collateral or incurred in connection with this Agreement and/or any other
of the Loan Documents, other than any charge or claim being contested in good faith by appropriate proceedings promptly initiated
and diligently conducted and for which any reserve or other appropriate provision, if any, as shall be required by GAAP has been
made therefor;

 

9.3.10
         Grantor
will, upon learning of any Insolvency Event affecting any account debtors obligated to Grantor (directly or indirectly) in the
amount of $50,000 or more, promptly notify Lender thereof;

 

9.3.11
         Except
as expressly permitted by the terms and conditions of this Agreement or any other of the Loan Documents (expressly including, without
limitation, Section 7.1 of the Loan Agreement), or otherwise with Lender’s express prior written consent in each instance,
Grantor will not Dispose of (in one transaction or in a series of transactions, and whether voluntarily or involuntarily) all or
substantially all of its assets, including, without limitation, any Collateral, whether tangible or intangible; and

 

9.3.12
          Dispose
of all or any material part or substantial portion of any Collateral (including, without limitation, any Collateral consisting
of equipment financed and/or otherwise acquired with Loan Proceeds), other than obsolete or worn out inventory in the ordinary
course of Grantor’s business operations.

 

10.
           GRANTOR’S USE
OF COLLATERAL. Subject to the terms and conditions hereof and the other Loan Documents to which Grantor is a party (and/or
to which Grantor or its property is subject or otherwise bound by), and Lender’s rights and remedies hereunder and thereunder
(including, without limitation, any such rights and remedies arising upon the occurrence of any unwaived Event of Default), the
Parties hereby agree that (i) Grantor shall hold, process, sell, license, use or consume Collateral in connection with the
manufacturing or processing of finished goods, and/or otherwise Dispose of inventory for fair consideration, all in the ordinary
course of Grantor’s business, but not, without limitation, by way of, directly or indirectly, sales or other Dispositions
to creditors or in bulk, or sales or other Dispositions occurring under circumstances which would or could create any Lien or interest
adverse to Lender’s Liens on any such Collateral or other rights hereunder in the proceeds resulting therefrom; and (ii)
Grantor may receive from account debtors any and all amounts due as proceeds of the Collateral at Grantor’s sole Cost
and Expense and liability.

 

11.
           INSURANCE.

 

  11.1     Maintenance
of Insurance.

11.1.1
          Grantor
shall, and hereby covenants and agrees to, maintain in force with financially sound and reputable insurers (selected by Grantor
and reasonably acceptable to Lender, and none of whom are Affiliates of Grantor) property and casualty insurance on all Collateral
against such risks, casualties and contingencies as shall be in accordance with general practices of businesses engaged in similar
activities in similar geographic areas (and/or as may otherwise be reasonably required by Lender from time to time pursuant to
the provisions this Agreement, the Loan Agreement and/or any other of the Loan Documents). Such insurance shall in all events be
in such minimum amounts such that Grantor will not be deemed a co-insurer under applicable insurance laws, regulations and policies,
and otherwise shall be in such amounts, contain
such terms, be in such forms and be for such periods as may be reasonably satisfactory to Lender. All such policies of insurance
now or hereafter maintained by Grantor pursuant to this Agreement and all other of Loan Documents shall at all times be payable
to Lender as its interest may appear in the event of loss and, unless any such other Loan Documents expressly provide with respect
to any specified types or policies of insurance, shall name Lender as additional insured and loss payee pursuant to a valid lender’s
loss payable clause. No loss under any policies of insurance now or hereafter maintained by Grantor pursuant to any Loan Documents
shall be adjusted without Lender’s express prior written consent and approval in each instance, and all such policies of
insurance shall provide in writing that they shall not be canceled without first providing at least twenty (20) days’ prior
written notice of cancellation to Lender.

 

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11.1.2
          Grantor
hereby acknowledges and agrees that if all or any part of the Collateral is now, or at any time after the Effective Date will be,
located in an area with special flood hazards, Grantor shall be required to obtain on or before the Closing (or, as the case maybe,
the upon which Grantor executes and delivers this Agreement), and maintain at all times while any of the Obligations are outstanding,
flood insurance in such amounts as Lender may reasonably require. Grantor shall deliver to Lender copies of any such policies of
flood insurance and all renewals thereof and, if Lender so requires in its sole but reasonable discretion, written evidence of
Grantor’s payment of any premiums with respect to any such flood insurance.

 

11.1.3
          On
or before the execution and delivery hereof, Grantor shall provide to Lender one or more certificates, binders or policies of insurance
evidencing compliance with the insurance requirements set forth herein and in the Loan Agreement. In the event that Grantor fails
to provide evidence of such insurance, Lender may, at its option, secure such insurance and charge any and all Costs and Expenses
associated therewith to Grantor, which such Costs and Expenses shall be due and payable to Lender (or its designee) immediately
upon demand therefor and, until paid in full in cash, shall bear interest at the Default Rate, and shall be Indebtedness constituting
a part of the Obligations secured by the Liens hereof. Upon the occurrence of any unwaived Event of Default, Lender is hereby authorized—but
Lender is not in any way obligated—and Grantor hereby expressly authorizes Lender, upon not less than twenty (20) days’
prior written notice to Grantor, to cancel any insurance maintained pursuant to this Agreement and apply any returned or unearned
premiums, all of which shall be and hereby are assigned to Lender, toward payment of any Indebtedness constituting all or any part
the Obligations.

 

11.2
        Insurance
Proceeds. The proceeds of any casualty insurance in respect of any casualty loss of any of the Collateral shall, subject to
the rights, if any, of other Persons with an interest having priority in the property covered thereby, so long as no unwaived Event
of Default has occurred, and to the extent that the amount of such proceeds is less than $50,000.00, be disbursed to Grantor
for direct application by Grantor solely to the repair or replacement of Grantor’s property so damaged or destroyed; and,
provided that no unwaived Event of Default exists, Lender shall (i) disburse from time to time all or any part of such proceeds
so held as cash collateral, upon such terms and conditions as Lender may prescribe in its sole but reasonable discretion, for direct
application by Grantor solely to the repair or replacement of Grantor’s property so damaged or destroyed, or (ii)
apply all or any part of such proceeds to the repayment of the Indebtedness constituting the Obligations (or any part thereof)
following the occurrence of any unwaived Event of Default.

 

11.3
        Continuation
of Insurance. In the event of any failure by Grantor to obtain and continually maintain insurance as herein provided (and/or
as may be provided under any other of the Loan Documents), Lender may, at its option (but without obligation unless otherwise expressly
required by applicable law), obtain such insurance and charge the amount thereof to Grantor, which such amount shall be due and
payable to Lender (or its designee) immediately upon demand therefor and, until paid in full in cash, shall bear interest at the
Default Rate, and shall be Indebtedness constituting a part of the Obligations secured by the Liens hereof. Grantor expressly acknowledges
and agrees that, if Grantor fails to purchase and/or renew any such insurance required hereunder
and/or under any other of the Loan Documents, such failure constitutes an express Event of Default hereunder, and under all other
of the Loan Documents, for which no grace period of any kind is applicable and/or provided.

 

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12.         COLLATERAL
PRESERVATION.

 

12.1        Preservation
Costs and Expenses. In Lender’s sole discretion, if Grantor fails to do so, Lender may and is hereby authorized to discharge
taxes and other Liens at any time levied or placed on any Collateral, and make repairs thereto and pay any necessary filing fees
and/or insurance premiums in connection (directly or indirectly) therewith, and otherwise to make any Protective Advance; provided,
however, that Lender shall have no obligation to whatsoever to make any such expenditures or Protective Advances,
nor shall the making thereof be construed as a waiver or cure in connection with any Event of Default hereunder and/or under any
other of the Loan Documents. Grantor shall and hereby agrees to reimburse Lender immediately upon demand for all Costs and Expenses
incurred by Lender in connection with the matters contemplated by the immediately preceding sentence, and such Costs and Expenses
shall bear interest at the Default Rate from the date of such demand until paid in full.

 

12.2       
Lender’s Obligations and Duties Regarding Preservation. Notwithstanding anything herein to the contrary, Grantor
shall remain obligated and liable under each contract, agreement or instrument constituting Collateral to be observed or performed
by Grantor thereunder. Lender shall not have any obligation or liability under any such contract, agreement or instrument by reason
of or arising out of this Agreement, any other of the Loan Documents or the receipt by Lender of any payment relating to any of
the Collateral; nor shall Lender be obligated in any manner to perform any of the obligations of Grantor under or pursuant to
any such contract, agreement or instrument, to make inquiry as to the nature or sufficiency of any payment received by Lender
in respect of the Collateral or as to the sufficiency of any performance by any Person under any such contract, agreement or instrument,
to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may
have been assigned to Lender or to which Lender may be entitled at any time or times. Lender’s sole duty with respect to
the custody, safe keeping and physical preservation of the Collateral in its possession, under §9-207 of the UCC of the State
or any other state or jurisdiction where any such Collateral is located, shall be to deal with such Collateral in the same manner
as Lender deals with similar property for its own account. Lender shall not be deemed to have assumed any liability or responsibility
to Grantor or any third Person for the correctness, validity or genuineness of any instruments or documents that may be released
or endorsed to Grantor by Lender (which shall automatically be deemed to be without recourse to Lender in any event) or for the
existence, character, quantity, quality, condition, value or delivery of any goods purporting to be represented by any such documents;
and Lender, by accepting such Lien on the Collateral, or by releasing any Collateral to Grantor, shall not be deemed to have assumed
any obligation or liability to any supplier or account debtor or to any other third Person, and Grantor shall and hereby agrees
to, at Grantor’s sole Cost and Expense, indemnify, defend and hold harmless Lender and each other Indemnified Party in respect
to any claim or proceeding (including, without limitation, any and all Costs and Expenses relating to any such claim or proceeding)
arising out of any matter referred to in this Section 12.2.

 

13.         NOTICE TO PERSONS
OBLIGATED ON COLLATERAL. Upon the occurrence of any unwaived Event of Default that is not waived or cured in
accordance with Section 15.8 below, Grantor shall, at the request and option of Lender (exercisable in Lender’s
sole discretion), notify account debtors and other Persons obligated on any of the Collateral of the Lien of Lender on any
account, chattel paper, general intangible, instrument or other Collateral and that payment thereof is to be made directly to
Lender or to any financial institution and/or other Person(s) designated by Lender as Lender’s agent therefor, and
Lender may itself, without demand upon Grantor (the same being hereby expressly waived by Grantor), so notify account debtors
and other Persons obligated on Collateral; provided, however, that Lender shall simultaneously
provide Grantor with copies of any such notices to account debtors as and when the same are sent. After the making of such a
request or the giving of any such notification, Grantor shall hold any proceeds of collection of accounts, chattel paper,
general intangibles, instruments and other Collateral received by Grantor as trustee for the benefit of Lender without
commingling the same with other funds of Grantor, and Grantor shall turn the same over to Lender in the identical form
received, together with any and all necessary endorsements or assignments. Lender shall apply the proceeds of collection of
accounts, chattel paper, general intangibles, instruments and other Collateral received by Lender to the Obligations then due
and owing and/or for which Lender has otherwise made demand for satisfaction and/or payment of, such proceeds to be
immediately credited after final payment in cash or other immediately available funds of the items giving rise to them.

 

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14.          DEFAULT. As
used in this Agreement, “Event of Default” shall have the meaning and definition ascribed to such term
in the Loan Agreement, and such term and its meaning are incorporated herein by this reference. Grantor hereby expressly acknowledges
and agrees that the Loan Documents are cross- defaulting instruments, and that the occurrence of any Event of Default under this
Agreement shall constitute a default (or, as the case may be, an “Event of Default”) under all of the Loan Documents,
irrespective of whether any such Loan Documents explicitly so state.

 

15.          RIGHTS
AND REMEDIES.

 

15.1        Rights
and Remedies Generally. Upon the occurrence of any unwaived Event of Default, Lender, to the maximum extent that Grantor could
lawfully do so, and without presentment, demand, notice, protest or advertisement of any kind, shall have the rights and remedies
of a secured party under the UCC of the state, commonwealth or other jurisdiction in which any Collateral is located, together
with any additional rights and remedies as may be provided by applicable law and/or by the terms of any agreement, instrument or
other document between the Parties, including, without limitation, the right to take possession of the Collateral, and for that
purpose Lender may: (i) so far as Grantor can lawfully give authority therefor, enter onto, occupy and use any premises
owned by Grantor and/or in which Grantor has any interest whatsoever on which any Collateral may be situated and remove the same
therefrom; (ii) without presentment, demand, notice, protest or advertisement of any kind, require Grantor to assemble the
Collateral in a single location at a place to be designated by Lender in its reasonable discretion and make the Collateral at all
times secure and available to Lender at Grantor’s sole Cost and Expense; and (iii) sell, lease, assign and/or deliver
the whole or any part of the Collateral (whether alone or in conjunction with any other property of Grantor, irrespective of whether
real or personal), at commercially reasonable public or private sale, for cash, upon credit and/or for future delivery, and allocate
the sale proceeds or leases among the items of Collateral sold without the necessity of any such Collateral being present at any
such sale, or in view of prospective purchasers thereof.

 

15.2        Power
of Attorney.

 

15.2.1
        Appointment and Powers of Lender. Grantor hereby irrevocably
constitutes and appoints Lender as Grantor’s true and lawful attorney, with full power of substitution, at the sole
Cost and Expense of Grantor but for the sole benefit of Lender, upon the occurrence of any unwaived Event of Default that is
not waived or cured in accordance with Section 15.8 below, (i) to convert the Collateral into cash, including,
without limitation, completing the manufacture or processing of work in process, and the sale (either public or private) of
all or any portion or portions of the inventory and other Collateral; (ii) to enforce collection of the Collateral,
either in its own name or in the name of Grantor, including, without limitation, executing releases or waivers, compromising
or settling with any account debtors and prosecuting, defending, compromising or releasing any action relating to the
Collateral; (iii) to receive, open and dispose of all mail addressed to Grantor and to take therefrom any remittances
or proceeds of Collateral on which Lender has a Lien; (iv) to notify applicable Governmental Authorities (including,
without limitation, any postal office) to change the address for delivery of mail addressed to Grantor to such address as
Lender shall designate; (v) to endorse the name of Grantor in favor of Lender upon any and all checks, drafts, money
orders, notes, acceptances or other instruments of the same or different nature; (vi) to sign and endorse the name of
Grantor on and to receive as secured party any of the Collateral, any invoices, freight or express receipts, or bills of
lading, storage receipts, warehouse receipts, or other documents of title of the same or different nature relating to the
Collateral; (vii) to sign the name of Grantor on any notice of any account debtors or on verification of the
Collateral; (viii) if Grantor’s authorization given in this Agreement is not sufficient, to file such financing
statements, and any such amendments and continuations with respect thereto, with or without Grantor’s signature (or a
photocopy of this Agreement in substitution for a financing statement, as Lender may deem appropriate), and to execute in
Grantor’s name on any such financing statements, continuations and/or amendments which may require Grantor’s
signature, in order to perfect or protect Lender’s security interests and other Liens; (ix) to file and
prosecute registration and transfer applications with the appropriate Governmental Authorities with respect to any
Intellectual Property Collateral; and (x) upon written notice to Grantor, to exercise voting rights with respect to
voting Equity Interests constituting Collateral, which rights may be exercised, if Lender so elects, with a view toward
causing the liquidation of assets of the issuer of any such Equity Interests.

 

 

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15.2.2      Ratification
of Actions Done or Taken. To the extent not expressly prohibited by applicable law (and, if so prohibited, then to the
maximum extent permitted thereby), Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue
of the power of attorney granted under this Section 15.2. Said power of attorney is a power coupled with an interest and
is irrevocable until all of the Obligations have been Indefeasibly Satisfied.

 

15.2.3       No
Duty Upon Lender. The powers conferred on Lender hereunder are solely to protect its interests in the Collateral and shall
not impose any duty and/or obligation upon it to exercise any such powers. Lender shall be accountable only for the amounts that
it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees,
attorneys, representatives, Affiliates and/or other Indemnified Parties shall be responsible to Grantor for any act or failure
to act, except for Lender’s own gross negligence or willful misconduct.

 

15.3         Lender’s
Sale of Collateral. If notice of any sale contemplated by this Article 15 is legally required under applicable law,
and unless the Collateral is perishable, threatens to decline speedily in value or is of a type customarily sold on any recognized
market, Lender shall give Grantor at least ten (10) days’ prior written notice of the time and place of any public sale of
Collateral or of the time after which any private sale or any other intended disposition is to be made. Grantor hereby expressly
acknowledges and agrees that ten (10) days’ prior written notice of such sale or sales shall, in all events, be commercially
reasonable notice. Upon any such sale, Lender may become the purchaser of the whole or any part of the Collateral sold, discharged
from any and all claims and free from any right of redemption. In case of any such sale by Lender of all or any part of the Collateral
on credit, and/or for future delivery, such Collateral so sold may be retained by Lender until the selling price is paid by the
purchaser thereof. Lender shall incur no liability in case of the failure of the purchaser to take possession and pay for the Collateral
so sold. In case of any such failure, the said Collateral may be resold in Lender’s sole discretion. Any Collateral remaining
unsold after being offered at public auction may be abandoned and/or disposed of for no consideration in such manner as Lender
deems appropriate in its sole discretion.

 

15.4        Proceeds
of Collection or Sale; Expenses. Grantor shall and hereby agrees to pay to Lender, immediately upon demand, any and all Costs
and Expenses incurred or paid by or charged to Lender or any other Indemnified Party in protecting, preserving or enforcing any
one or more of Lender’s various and cumulative rights and remedies hereunder or under any other of the Loan Documents with
respect to, or directly or indirectly in connection with, all or any part of the Collateral, including, without limitation, any
such Costs and Expenses so incurred, paid or charged in connection with any collection, sale, assignment, transfer or other disposition
of all or any part of the Collateral contemplated by this Article 15. After deducting all of said Costs and Expenses, the
balance (if any) of any proceeds of collection, sale or other disposition of all or any part of the Collateral shall, to
the extent actually received in cash, be applied to the payment of the Obligations in such order or preference as Lender may determine
in its sole discretion (subject to Requirements
of Law), with proper allowance and provision being made for any Obligations not then due and/or for which Lender has not
otherwise made demand for the payment and/or satisfaction of. Upon the Indefeasible Satisfaction of all Obligations, and
after making any payments required by §§9-608(a)(1)(C) or 9-615(a)(3) of the UCC of the State or of any other
relevant jurisdiction, any excess (if any) shall be returned to Grantor. Unless and until the Obligations shall be
Indefeasibly Satisfied, Grantor shall and hereby expressly agrees to be and remain liable for the entirety of any deficiency,
and hereby promises to pay to Lender the full amount of such deficiency in cash immediately upon Lender’s demand
therefor, and confirms and agrees that, until so paid in full and in cash, such amount shall bear interest at the Default
Rate, be Indebtedness constituting a part of the Obligations, and be secured by the security interests and Liens hereof and
of the other Security Instruments.

 

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15.5          Set-off.
Lender may, and is hereby authorized by Grantor at any time and from time to time, to the fullest extent permitted by applicable
law and without advance notice to Grantor (any such notice being hereby expressly waived by Grantor), to (i) receive any
income from any Equity Interests constituting Collateral and hold such income as additional Collateral, and/or set-off against
and apply all or any part such income to the Obligations in priority and manner as Lender deems advisable in its sole discretion;
and (ii) set-off and apply any and all cash collateral at any time held by Lender as security for any Obligations, and any
other Indebtedness, deposits, credits or other sums at any time owing by Lender to, or for the credit or the account of, Grantor,
against all or any part of the Obligations, whether now or at any time hereafter existing, whether or not any such Obligations
have matured and irrespective of whether Lender has exercised any other rights that Lender has or may have with respect to any
such Obligations, including without limitation, any acceleration rights. Lender agrees within a commercially reasonable time, to
notify Grantor in writing after any such set-off and application; provided, however, that any failure
by Lender to give such written notice shall not affect the validity of such set-off and application. The rights of Lender under
this Section 15.5 are in addition to, but not a limitation of, all other rights and remedies which Lender may have hereunder
or under any provisions of any other Loan Documents, or otherwise at law and/or in equity, and expressly, without limitation, other
rights of set-off.

 

15.6          Intellectual
Property. Upon the occurrence of any unwaived Event of Default that is not waived or cured in accordance with Section 15.8
below, and upon the written demand of Lender at any time thereafter, Grantor shall execute and deliver to Lender an assignment
or assignments of any or all of the Intellectual Property Collateral and such other documents and take such other actions as are
necessary or appropriate to carry out the intent and purposes hereof. Within five (5) Business Days of written notice thereafter
from Lender, Grantor shall make available to Lender, to the extent within Grantor’s power and authority, such personnel in
Grantor’s employ on the date of the Event of Default as Lender may reasonably designate to permit Grantor to continue, directly
or indirectly, to produce, advertise and sell the products and services sold by Grantor under the Intellectual Property Collateral,
and such persons shall be available to perform their prior functions on Lender’s behalf.

 

15.7
         Rights and Remedies Cumulative. Grantor hereby acknowledges that all
rights and remedies of Lender with respect to the Obligations and/or the Collateral, whether evidenced hereby or by any other
instrument or papers (including, without limitation, any of the Loan Documents), and/or as otherwise conferred by any
Requirements of Law, shall be cumulative and may be exercised singularly, alternatively, successively, simultaneously or
concurrently at such time or at such times as Lender deems expedient in its sole discretion. Upon the occurrence of any
unwaived Event of Default that is not waived or cured in accordance with Section 15.8 below, the rights, powers and
privileges provided in this Article 15 and all other remedies available to Lender under this Agreement and/or any
other of the Loan Documents, and/or at law or in equity, may be exercised by Lender at any time and from time to time,
whether or not the Indebtedness of constituting the Obligations and secured by the Loan Documents shall be due and payable,
and irrespective of whether Lender shall have instituted any foreclosure proceedings or other action for the enforcement of
its rights under the Note and/or any other of the Loan Documents.

 

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15.8           Enforcement;
Non-Waiver; All Waivers in Writing. Lender shall have the right at any and all times to enforce the provisions of this
Agreement and/or any other of the Loan Documents in accordance with the terms hereof and thereof, notwithstanding any conduct
or custom on the part of Lender in refraining from so doing at any time or times. No action, inaction or omission of
Lender under this Agreement shall be deemed to constitute or establish a “course of performance or dealing” that
would require Lender to so act or refrain from acting in any particular manner at a later time under similar or dissimilar
circumstances. The failure of Lender at any time or times to enforce its rights under such provisions, strictly in accordance
with the same, shall not be construed as having created a custom in any way or manner contrary to such provisions, or as
having in any way or manner modified or waived the same, and no delay or omission on the part of Lender in exercising any of
its rights or remedies under any Loan Documents shall operate as a waiver of such rights or remedies or a waiver of any other
rights or remedies. Lender shall not be deemed to have waived any of its rights and remedies under this Agreement, under any
other of the Loan Documents or otherwise in respect of any of the Obligations or the Collateral, and no Event of Default or
demand shall be waived (nor deemed waived) by Lender, except and unless such waiver is in writing and signed by a duly
authorized officer of Lender, and which writing makes explicit reference to the right, remedy, Event of Default or demand so
waived. A waiver on any one occasion shall not be construed as a bar to or waiver of any right or remedy on any future
occasion. Grantor hereby confirms, acknowledges and agrees that no notice to or demand on Grantor in any one case, instance
or circumstance shall entitle Grantor to any other or further notice or demand in any similar or other case, instance or
circumstance.

 

15.9           Commercially
Reasonable Action. To the extent that applicable law imposes duties on Lender to exercise remedies in a commercially reasonable
manner, Grantor hereby expressly acknowledges and agrees that it is not (and shall hereafter not be) commercially unreasonable
for Lender: (i) to fail to incur any costs, expenses and/or disbursements reasonably deemed significant by Lender to prepare
all or any part of the Collateral for disposition or otherwise to fail to complete any raw material or work in process into finished
goods or other finished products for disposition; (ii) to fail to obtain any third Person consents for access to all or
any part of the Collateral to be disposed of, or to obtain or, if not required by other applicable law, to fail to obtain any Governmental
Authority or third Person consents for the collection or disposition of all or any part of the Collateral to be collected or disposed
of; (iii) to fail to exercise any collection remedies against account debtors or other third Persons obligated on all or
any part of the Collateral or to fail to remove any Liens on or against all or any part of the Collateral; (iv) to exercise
collection remedies against account debtors and other Persons obligated on all or any part of the Collateral directly or through
the use of collection agencies and any other collection specialists; (v) advertise any dispositions of all or any part of
the Collateral through any publications or media of general circulation (including, without limitation, through and/or with any
advertisements or any brokers appearing or doing business, or holding auctions, on the Internet), whether or not all or any part
of the Collateral is of a specialized nature; (vi) contact any other third Persons, whether or not in the same business
as Grantor, for expressions of interest in acquiring all or any portion of the Collateral; (vii) hire one or more professional
auctioneers to assist in the disposition of all or any part of the Collateral, whether or not all or any part of the Collateral
is of a specialized nature; (viii) dispose of all or any part of the Collateral by utilizing one or more Internet sites
that provide for the auction of assets of the types included in such Collateral or that have the reasonable capability of doing
so, or that match buyers and sellers of assets; (ix) dispose of any assets in wholesale rather than retail markets; (x)
disclaim any disposition warranties to the maximum extent such warranties are capable of being, and or permitted to be, disclaimed
by applicable law; (xi) purchase any insurance and/or credit enhancements to insure Lender against risks of loss, collection
or disposition of all or any part of the Collateral and/or to provide to Lender a guaranteed return from the collection or disposition
of all or any part of the Collateral; and/or (xii) the extent deemed appropriate by Lender, to obtain any services of any
brokers, investment bankers, consultants, attorneys and/or other professionals to assist Lender in the collection or disposition
of all or any part of the Collateral.

 

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15.10           Non-Exhaustive
Actions. Grantor hereby expressly acknowledges that the purpose of Section 15.9 above is to provide non-exhaustive indications
of what actions or omissions by Lender would fulfill Lender’s duties under the UCC of the State or any other relevant jurisdiction
in Lender’s exercise of remedies against all or any part of the Collateral, and that other actions or omissions by Lender
shall not be deemed to fail to fulfill such duties solely on account of not being indicated in such Section 15.9. Without
limitation upon the foregoing, nothing contained in Section 15.9 above shall be construed to grant any rights to Grantor,
or to impose any duties and/or obligations on Lender, that would not have been granted or imposed by this Agreement or any other
of the Loan Documents, and/or by applicable law, in the absence of such Section 15.9.

 

16.           CERTAIN
WAIVERS; RELIANCE; CONFIRMATIONS.

 

16.1        Obligations
Absolute.

 

16.1.1           Grantor
hereby waives demand, notice, protest, notice of acceptance of this Agreement, notice of loans made, credit extended, Collateral
received or delivered or other action taken in reliance hereon and all other demands and notices of any description, kind or nature,
and Grantor assents to any extension or postponement of the time of payment or any other indulgence, to any substitution, exchange
or release of or failure to perfect any Lien on any Collateral, to the addition or release of any party or Person primarily or
secondarily liable, to the acceptance of partial payment thereon and the settlement, compromising or adjusting of any thereof,
all in such manner and at such time or times as Lender may deem advisable in its sole discretion. Grantor further hereby waives
any and all suretyship defenses.

 

16.1.2          
Grantor hereby confirms, acknowledges and agrees that Lender shall have no duty as to the collection or protection of the Collateral
or any income therefrom, the preservation of rights against prior parties, or the preservation of any rights pertaining thereto
beyond the safe custody thereof as set forth in Section 12.2 above, and that all obligations of Grantor hereunder shall
be absolute and unconditional irrespective of: (i) any illegality or lack of validity or enforceability of any Obligation
or any Loan Document or any related agreement or instrument; (ii) any change in the time, place or manner of payment of,
or in any other term of, the Obligations or any other obligation of any Obligor under any Loan Document, or any rescission, waiver,
amendment or other modification of any Loan Document or any other agreement, including any increase in the Obligations resulting
from any extension of additional credit, permitted Overadvance or otherwise; (iii) any taking, exchange, substitution, release,
impairment or non-perfection of any Collateral, or any taking, release, impairment, amendment, waiver or other modification of
any Guaranty; (iv) any manner of sale, disposition or application of proceeds of any Collateral or any other collateral
or other assets to all or part of the Obligations; (v) any default, failure or delay, willful or otherwise, in the performance
of the Obligations; (vi) any change, restructuring or termination of the corporate structure, ownership or existence of
any Corporate Obligor or any of its Subsidiaries, or any Insolvency Proceeding affecting Borrower or its assets or any resulting
release or discharge of any Obligations; (vii) any failure of Lender to disclose to any Obligor any information relating
to the business, condition (financial or otherwise), operations, performance, properties or prospects of any other Obligor now
or hereafter known to such Lender; Grantor waiving any duty of Lender to disclose such information; (viii) the failure of
any other Person to execute or deliver this Agreement (including any joinder and/or counterpart signature page hereto) or any other
agreement or the release or reduction of liability of Grantor or other grantor or surety or Obligor with respect to the Obligations;
(ix) the failure of Lender to assert any claim or demand or to exercise or enforce any right or remedy under the provisions
of any Loan Document or otherwise; (x) any defense, set-off or counterclaim (other than a defense of payment in cash) that
may at any time be available to, or be asserted by, Borrower or any other Obligor against Lender; or (xi) any other circumstance
(including, without limitation, any statute of limitations) or manner of administering the Loan or any existence of or reliance
on any representation by Lender that might vary the risk of Grantor or otherwise operate as a defense available to, or a legal
or equitable discharge of, any Obligor.

 

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16.2           Marshaling.
Lender shall not be required to marshal any present or future collateral security (including, without limitation, the Collateral)
for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or other assurances
of payment in any particular order, and all of its rights and remedies hereunder and in respect of such collateral security and
other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising.
To the extent not expressly prohibited by applicable law (and, if so prohibited, then to the maximum extent permitted thereby),
Grantor hereby expressly confirms and agrees that Grantor will not invoke or attempt to avail itself of any law relating to the
marshaling of collateral and/or which might cause delay in or impede the enforcement or exercise of any Lender’s rights and
remedies under this Agreement or under any other instrument creating or evidencing any of the Obligations, or under which any of
the Obligations is outstanding, or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to
the extent that Grantor may lawfully do so, and Grantor hereby irrevocably waives the benefits of all such laws.

 

16.3           Waiver
of Hearing Prior to Enforcement. To the extent not expressly prohibited by applicable law (and, if so prohibited, then to the
maximum extent permitted thereby), Grantor hereby expressly waives any and all rights that it may now or hereafter have to a judicial
hearing in advance of the enforcement of any of Lender’s rights and remedies hereunder, including, without limitation, Lender’s
right, following the occurrence of any Event of Default that is unwaived (and which is not waived or cured in accordance with Section
15.8 above), to take immediate possession of the Collateral and to exercise its various and cumulative rights and remedies
with respect thereto under this Agreement or under any other of the Loan Documents, at law and/or in equity.

 

16.3.1           Waiver
of Automatic Stay. In the event Grantor shall at any time while any Obligations are outstanding become a “debtor”
or “debtor-in-possession” under any provision of the Bankruptcy Code, whether by Grantor’s voluntary petition,
or through the grant of an order for relief on an involuntary petition against Grantor, or otherwise on account of any other Insolvency
Event affecting Grantor that constitutes an Event of Default, Grantor, to the extent not expressly prohibited by applicable law
(and, if so prohibited, then to the maximum extent permitted thereby), hereby unconditionally and expressly: (i) consents
to the entry of an order granting Lender relief from the (so-called) “automatic stay” provisions of the Bankruptcy
Code, upon Lender’s motion, complaint or other pleading pursuant to which Lender seeks to exercise its rights to foreclose
on, realize upon and/or liquidate all or any part of the collateral or security for the Obligations and apply the proceeds thereof
to reduction of the Obligations; and (ii) waives any and all rights Grantor may have to object to and/or defend against
such motion, complaint or other pleading, including, without limitation, any assertion or contention that Grantor, as a debtor
or debtor-in-possession in any proceeding under the Bankruptcy Code, is able to provide adequate protection against any diminution
in the value of any Collateral in any such proceeding. The foregoing consent to Lender’s relief from such automatic stay,
and the waiver of Grantor’s rights to object, defend and/or offer any adequate protection response to any of Lender’s
motions, complaints or other pleadings seeking relief from such automatic stay in any such proceeding under the Bankruptcy Code,
(A) is subject to the approval of the bankruptcy court in which any such proceeding is then pending or before; and (B)
each constitute material inducements to Lender to make and extend any Credit Accommodations, and which inducements and the
materiality thereof Grantor hereby expressly acknowledges.

 

16.3.2           Waiver
of Certain Damages. To extent not expressly prohibited by applicable law (and if so prohibited, then to the maximum extent
permitted thereby), (i) Grantor hereby agrees not to assert, and Grantor hereby expressly waives, any claim against any
Indemnified Party on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement
or instrument contemplated hereby or thereby, the transactions contemplated hereby or thereby, all or any part of the Loan or the
use of proceeds thereof, and/or otherwise in respect of the Obligations; and (ii) no Indemnified Party shall be liable
to Grantor or any Affiliates thereof for any damages arising from the use of any information or other materials distributed by
it through telecommunications, electronic or other information transmission systems in connection with this Agreement or any other
of the Loan Documents or the transactions contemplated hereby or thereby by unintended recipients.

 

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16.4       Reliance.

 

16.4.1       No
Reliance on Lender. Grantor hereby represents that Grantor and its officers and executives are experienced and have expertise
in the business of operating and maintaining (or causing to be maintained) Grantor’s business operations and the Collateral
associated and/or used in connection therewith, and confirms that neither Grantor nor any of its officers and executives are relying
upon any expertise, business acumen or advice of or from Lender or any other Indemnified Party in connection with such ownership
and operation.

 

16.4.2        Reliance
by Lender. Grantor hereby confirms and acknowledges that Lender has examined and relied upon the experience and expertise
of Grantor and its officers and executives in owning, operating and maintaining (or causing to be maintained) the Collateral associated
and/or used in connection with Grantor’s business operations, and will continue to rely upon Grantor’s ownership of
the Collateral as a means of maintaining the value thereof as security for the Indefeasible Satisfaction of the Obligations. Grantor
hereby further acknowledges, and expressly confirms Grantor’s full and complete understanding, that (i) Lender has
a valid interest in maintaining the value of the Collateral so as to ensure that, should any Event of Default occur in respect
of the Obligations, Lender can recover all Indebtedness and other amounts owed to Lender under the Loan Documents by a sale of
the Collateral; (ii) in making and/or extending any Credit Accommodations, Lender is expressly relying upon each and all
of the waivers, confirmations, acknowledgments, certifications, consents and agreements, and upon the truth, accuracy and completeness
of each and all of the representations and warranties, of and made by Grantor in this Article 16 in connection with Grantor’s
organization, business and business operations, condition (financial or otherwise) and the Collateral, without any obligation on
the part of Lender to investigate to the same, and notwithstanding any such investigation that may have been heretofore made or
caused to be made by Lender; (iii) such reliance by Lender existed on the part of Lender immediately prior to the Grantor’s
execution hereof (including any joinder and/or counterpart signature page hereto); (iv) such waivers, certifications, representations
and warranties are a material inducement to Lender to make and/or extend any Credit Accommodations; and (v) in the absence
of such waivers, certifications, representations and warranties, Lender would not be willing to make and/or extend any Credit Accommodations.

 

16.5        Confirmation
of Document Receipt. Grantor hereby represents and warrants, and hereby certifies and acknowledges, to Lender all other of
the Indemnified Parties, that Grantor has received copies of, and has read, reviewed and fully understands each and all of the
terms, conditions and provisions of, this Agreement and all other of the Security Instruments, the Note, the Loan Agreement, any
and all Guaranties, and any and all other now-existing Loan Documents executed by any one or more Obligors in connection with all
or any part of the Obligations, the Credit Accommodations and/or the transactions contemplated by the Loan Documents.

 

17.          RELATION TO OTHER
DOCUMENTS. The provisions of this Agreement shall be in addition to those of any guaranty, pledge or security agreement,
promissory note or other evidence of liability of any Obligor now or hereafter held by (or in favor of) Lender or any Affiliate
of Lender (including, without limitation, the Intellectual Property Security Agreement or any other the Loan Documents), all of
which shall be construed as complementary to each other. Nothing contained herein shall prevent Lender from enforcing any or all
such other guaranties, pledges or security agreements, promissory notes or other evidences of liability in accordance with their
respective terms, nor shall anything contained herein or in any such other guaranties, pledges or security agreements, promissory
notes or other evidences of liability derogate from, or otherwise limit or vitiate, any of the rights or remedies of Lender hereunder
or thereunder.

 

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18.         MISCELLANEOUS.

 

18.1        Multiple
Grantors. If at any time Grantor is comprised of more than one Person (including, without limitation, in the case of Rotmans
and Vystar on the Effective Date), all of the Obligations shall be joint and several as among each and all such Persons,
and each reference in any of the Loan Documents to “Grantor” shall be (and hereby is) deemed to refer to each
such Person constituting Grantor individually and also to all such Persons jointly; provided, however,
that the release by Lender of any one such Person shall not release any other Person obligated on account of the Obligations (whether
in whole or in part), or any of them. Any and all present and future debts or obligations of any one such Person to any other Person
constituting, and/or owning or holding any Equity Interests in or of, Grantor are hereby subordinated to the Indefeasible Satisfaction
of all Obligations (except as may be otherwise expressly provided in any Subordination Agreement directly applicable to such debts
or obligations). No Person directly, indirectly or contingently liable for any Obligations may seek contribution from any other
Persons also so liable, unless and until all Obligations to Lender of the Person from whom contribution is sought shall have been
Indefeasibly Satisfied; and notwithstanding the existence of any “reimbursement and indemnity agreement”, “contribution
agreement” or “indemnity agreement” (or similarly-titled agreement(s) of like import and effect) privately
executed between or among any such Persons (and irrespective of whether any of the same may be disclosed or undisclosed to Lender).
Except as otherwise expressly provided in a writing signed by a duly authorized officer of Lender, the release or compromise by
Lender of any Collateral or security for the Loan or any other Credit Accommodations (whether now or hereafter existing or arising)
shall not release any such Person directly, indirectly or contingently liable for all or any part of the Obligations.

 

18.2        Duration;
Termination and Release.

 

18.2.1        The
terms and conditions of, and the Liens granted by Grantor to Lender pursuant to, this Agreement (and any other of the Loan Documents
to which Grantor is a party and/or to which it or any of its property is otherwise bound) shall continue in full force and effect
until all Obligations are Indefeasibly Satisfied. Upon the Indefeasible Satisfaction of all Obligations, Lender shall, upon the
written request and at the sole and exclusive Cost and Expense of Grantor, provide Grantor with written authority (signed by a
duly authorized officer of Lender) to file with any one or more applicable Governmental Authorities any applicable termination
statements or other filings as are reasonably necessary or advisable to evidence the termination of the Liens created hereby.

 

18.2.2        If
any of the Collateral shall be Disposed of by Grantor in a transaction expressly permitted by the Loan Agreement and the other
Loan Documents, then the Lien created pursuant to this Agreement in such Collateral shall be released, and Lender shall, upon the
written request and presentation by, and at the sole and exclusive Cost and Expense of, Grantor, execute all releases and other
documents reasonably necessary or advisable for the release of the Liens created hereby on such Pledged Collateral; provided that
Borrower shall provide to Lender evidence of such transaction’s compliance with the Loan Agreement and the other Loan Documents
as Lender shall reasonably request. At the request and sole Cost and Expense of Borrower, a Grantor shall be released from its
obligations hereunder in the event that all the Equity Interests of such Grantor are sold, transferred or otherwise Disposed of
in a transaction permitted by the Loan Agreement; provided that Borrower shall have delivered to Lender, at least ten (10)
Business Days (or such shorter period reasonably acceptable to Collateral Agent) prior to the date of the proposed release, a written
request for release identifying the relevant Grantor and the terms of the sale or other disposition in reasonable detail, including
the price thereof and any expenses in connection therewith, together with a certification signed by a Responsible Officer of Borrower
stating that such transaction is in compliance with the Loan Agreement and the other Loan Documents.

 

 

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18.3       Recitals;
Incorporation. All of the Recitals, together with any and all capitalized and defined terms and their respective meanings set
forth therein and in the preamble to this Agreement, and any and all Exhibits, Schedules
and/or other addenda or attachments hereto (whether now or hereafter, and as any of the same may from time to time be amended or
otherwise modified in any respect), are all hereby incorporated into this Agreement, and made a part hereof, by this reference.
Grantor hereby represents and warrants to Lender that all of the Recitals are true and correct in all material respects.

 

18.4       Indemnification.
All of the provisions, consents, acknowledgments, covenants, agreements, indemnifications and waivers set forth and made in Section
11.2 of the Loan Agreement (entitled “Indemnification”) shall apply to this Agreement (and, in the case
of any such consents, acknowledgments, covenants, agreements, indemnifications and waivers made by Borrower in such Section, Grantor
hereby confirms that the same shall be and hereby are deemed expressly and independently made by Grantor in this Agreement) and
are incorporated herein by this reference, mutatis mutandis, as if fully set forth herein.

 

18.5       Costs
and Expenses. All of the provisions, consents, acknowledgments, covenants, agreements and/or waivers (as the context may provide)
set forth and made in Section 11.5 of the Loan Agreement (entitled “Costs and Expenses”) shall apply
to this Agreement (and, in the case of any such consents, acknowledgments, covenants, agreements and/or waivers made by Borrower
in such Section, Grantor hereby confirms that the same shall be and hereby are deemed expressly and independently made by Grantor
in this Agreement) and are incorporated herein by this reference, mutatis mutandis, as if fully set forth herein.

 

18.6       Survival.
In addition to any provisions hereof which, by their express terms, are intended to survive the execution and delivery of this
Agreement, and the Indefeasible Satisfaction of the Obligations, all covenants, agreements, representations and warranties made
by Grantor (or otherwise deemed made by Grantor by express incorporation and reference) in this Agreement pertaining to and/or
arising under the as-incorporated provisions of Sections 18.4 and 18.5 above, or otherwise in connection with the matters
contemplated thereby, shall survive the execution and delivery of this Agreement and the payment in full of the Loan.

 

18.7       Construction
and Interpretation. Each and all of the consents, confirmations, acknowledgments and agreements set forth and made, and all
rules of construction and interpretation set forth, in Section 11.11 of the Loan Agreement (entitled “Construction; Ambiguity;
Interpretation”) shall apply to this Agreement (and, in the case of any such consents, confirmations, acknowledgments
and agreements made by Borrower in such Section, Grantor hereby confirms that the same shall be and hereby are deemed expressly
and independently made by Grantor in this Agreement) and are incorporated herein by this reference, mutatis mutandis, as
if fully set forth herein. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to be delivered hereunder (if any) shall be prepared,
in accordance with GAAP as in effect from time to time and applied on a consistent basis.

 

18.8        Severability.
If any term of this Agreement shall be held to be invalid, illegal or unenforceable, the validity of all other terms hereof shall
in no way be affected thereby, and this Agreement shall be construed and be enforceable as if such invalid, illegal or unenforceable
term had not been included herein.

 

18.9        Binding
Effect; Assignment. This Agreement shall create a continuing security interest in the Collateral and shall (i) be binding
upon Grantor and its successors and permitted assigns, and (ii) inure, together with the rights and remedies of Lender hereunder,
to the benefit of Lender and each of its respective successors, transferees and assigns and their respective officers, directors,
employees, affiliates, agents, advisors and controlling Persons; provided that, Grantor shall not assign or otherwise
transfer any of its rights or obligations under this Agreement without the express prior written consent of Lender and any attempted
assignment or transfer without such consent shall in all events be null and void. Without limiting the generality of the foregoing
subclause (ii), Lender may assign or otherwise transfer any Obligations (including, without limitation, any Indebtedness constituting
any Obligations) held by it and secured by this Agreement to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted to Lender, herein or otherwise, subject to the provisions of the Loan
Agreement.

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18.10         Integration;
Amendment. This Agreement, together with any and all exhibits, schedules and other addenda hereto (all of which are hereby
expressly incorporated into this Agreement by this reference), and all other Loan Documents executed and delivered in connection
herewith, is intended by the Parties as the final, complete and exclusive statement with respect to the transactions contemplated
hereby and thereby. All prior or contemporaneous promises, agreements and understandings, whether oral, written, electronically
transmitted or otherwise, are hereby expressly deemed to be superseded by this Agreement and all such other Loan Documents executed
in connection herewith, and no Party is relying on any promise, agreement or understanding not set forth in this Agreement or in
such other Loan Documents. No modification or amendment of this Agreement or of any other Loan Document shall be effective, and
the same shall be null and void, unless the same shall be expressly approved in writing by Lender, and, in any event, be made in
writing and signed by each of the Parties.

 

18.11         Counterparts;
Reproductions; Electronic Signatures. This Agreement, and any amendments, waivers, consents or supplements hereto, may be
executed in counterparts (and by different Parties in different counterparts), each of which shall constitute an original, but
all taken together shall constitute a single contract. All of the confirmations, acknowledgments and agreements set forth and
made in Section 11.17 of the Loan Agreement (entitled “Counterparts, Reproductions; Electronic Signatures”)
shall apply to this Agreement (and, in the case of any such confirmations, acknowledgments and agreements made by Borrower in
such Section, Grantor hereby confirms that the same shall be and hereby are deemed expressly and independently made by Grantor
in this Agreement) and are incorporated herein by this reference, mutatis mutandis, as if fully set forth herein.

 

18.12          Governing
Law. This Agreement and the obligations arising hereunder shall at all times be governed by, and construed in accordance with,
the laws of the State, excluding any conflicts of law rule or principle which might refer such construction to the laws of another
state, country, province or jurisdiction. All of the provisions, consents, acknowledgments, agreements and waivers set forth and
made in Section 11.18 of the Loan Agreement (entitled “Governing Law; Jurisdiction and Venue”) shall apply to
this Agreement (and, in the case of any such consents, acknowledgments, covenants, agreements and/or waivers made by Borrower in
such Section, Grantor hereby confirms that the same shall be and hereby are deemed expressly and independently made by Grantor
in this Agreement) and are incorporated herein by this reference, mutatis mutandis, as if fully set forth herein.

 

18.13          JURY
TRIAL WAIVER. EXCEPT AS EXPRESSLY PROHIBITED BY APPLICABLE LAW (AND, IF SO PROHIBITED, THEN TO THE MAXIMUM EXTENT PERMITTED
THEREBY), EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN ANY
SUIT, ACTION OR OTHER LEGAL PROCEEDING RELATING DIRECTLY OR INDIRECTLY TO THE OBLIGATIONS, ANY COLLATERAL OR OTHER SECURITY FOR
THE OBLIGATIONS, THIS AGREEMENT OR ANY OTHER OF THE LOAN DOCUMENTS, AND/OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, WHETHER
BASED ON CONTRACT, TORT OR OTHERWISE, AND WHETHER BY CLAIM, COUNTERCLAIM OR OTHERWISE. EACH PARTY HEREBY: (A) CERTIFIES
THAT NO AGENT, ATTORNEY, REPRESENTATIVE OR ANY OTHER PERSON HAS REPRESENTED TO IT, WHETHER EXPRESSLY OR OTHERWISE, THAT THE OTHER
PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF LITIGATION; (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED
TO EXECUTE AND DELIVER THIS LOAN DOCUMENT AND ALL OTHER OF THE LOAN DOCUMENTS
TO WHICH IT IS A PARTY (OR TO WHICH IT IS OTHERWISE BOUND) BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED
IN THIS SECTION 18.13; AND (C) AGREES NOT TO SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE, OR HAS NOT BEEN, WAIVED.

     29

     

    

 

18.14        Independent
Counsel. All of the representations, confirmations, agreements and acknowledgments set forth and/or made by in Section 11.22
of the Loan Agreement (entitled “Independent Counsel”) shall apply to this Agreement (and, in the case of any
such representations, confirmations, agreements and acknowledgments made by Borrower in such Section, Grantor hereby confirms
that the same shall be and hereby are deemed expressly and independently made by Grantor in this Agreement) and are incorporated
herein by this reference, mutatis mutandis, as if fully set forth herein.

 

18.15
       Relationship
of the Parties. For the avoidance of doubt, and for purposes of this Agreement and all other of the Loan Documents, the Parties
each hereby acknowledge and agree that (i) neither Grantor nor any other of the Obligors, nor any of Grantor’s or
any other of the Obligors’ respective Affiliates, shall ever be deemed to be an Indemnified Party; (ii) the relationship
between Lender and Grantor is only that of a secured party and debtor, respectively; and (iii) Grantor and the other Obligors
and all of their respective Affiliates on the one hand, and Lender and its respective Affiliates on the other hand, are not (and
shall not hold themselves out to be) agents, employees, joint venturers, Affiliates and/or partners of each other.

 

18.16        Notices.
All notices, demands, requests, consents or approvals required, permitted, contemplated or desired to be given hereunder (each,
for purposes of this Section 18.16, a “Notice”) shall be in writing—and shall be
made and deemed to have been validly served, given or delivered—in accordance with the provisions of Section 11.14
of the Loan Agreement (entitled “Notices”), which such Section and all of the provisions thereof shall apply
to this Agreement and are all incorporated herein by this reference, mutatis mutandis, as if fully set forth herein; provided,
however, that (i) with respect any Grantor other than Borrower, such Grantor’s address for any Notice
shall be the respective address ascribed to Grantor in the preamble to this Agreement, or on any counterpart signature page or
joinder hereto; and (ii) Lender shall be entitled to rely upon any written notice, statement, certificate, order or other
document or any telephone message believed by it to be genuine and correct and to have been signed, sent or made by the proper
Person, and, with respect to all matters pertaining to this Agreement and its duties hereunder.

 

[Remainder of Page Intentionally Left Blank;
Lender’s and the

Grantors’ Respective Signature Pages, and
Exhibits, Follow]

 

     30

     

    

 

IN WITNESS WHEREOF,
Lender caused this Agreement to be executed and delivered by its duly authorized signatory as an instrument under seal as of the
Effective Date.

 

	 	 	 	 	LENDER:
	 	 	 	 	Fidelity Co-Operative
Bank
	Witness:	 	 	 	 
	 	 	 	 	 
	 	 	By:	 
	Witness Signature	 	Name:	Sally A. Buffum
	Witness Name:	 	 	Title:	Senior Vice President

 

Lender’s
Signature Page To:

Master
Security Agreement

Fidelity
Bank

Murida
Furniture Co., Inc., Vystar Corporation & Affiliated Grantors

 

     

     

    

 

IN WITNESS WHEREOF,
the undersigned Borrower, in such capacity and in its capacity as a “Grantor” hereunder, has caused this Agreement
to be executed and delivered by its duly authorized signatory as an instrument under seal as of the Effective Date.

 

	 	 	 	 	BORROWER:
	 	 	 	 	Murida Furniture Co.,
Inc.
	Witnesses:	 	 	 	 
	 	 	 	 	 
	 	 	By:	 
	Witness Signature	 	Name:	Steven Rotman
	Witness Name:	 	 	Title:	President

 

Borrower
(Rotmans’) Signature Page To:

Master
Security Agreement

Fidelity
Bank

Murida Furniture Co., Inc., Vystar Corporation & Affiliated Grantors

 

     

     

    

 

IN WITNESS WHEREOF,
the undersigned Borrower, in such capacity and in its capacity as a “Grantor” hereunder, has caused this Agreement
to be executed and delivered by its duly authorized signatory as an instrument under seal as of the Effective Date.

 

	 	 	 	 	BORROWER:
	 	 	 	 	Vystar Corporation
	Witnesses:	 	 	 	 
	 	 	 	 	 
	 	 	By:	 
	Witness Signature	 	Name:	Steven Rotman
	Witness Name:	 	 	Title:	President & CEO

 

Borrower
(Vystar’s) Signature Page To:

Master
Security Agreement

Fidelity
Bank

Murida Furniture Co., Inc., Vystar Corporation & Affiliated Grantors

 

     

     

    

 

EXHIBIT A

PERFECTION CERTIFICATE(S)

 

[Immediately Follows This Page]

 

Exhibit
A To:

Master
Security Agreement

Fidelity
Bank

Murida
Furniture Co., Inc., Vystar Corporation & Affiliated Grantors

 

     

     

    

 

EXHIBIT B

INTELLECTUAL PROPERTY SECURITY AGREEMENT

 

[Immediately Follows This Page]

 

Exhibit
B To:

Master
Security Agreement

Fidelity
Bank

Murida
Furniture Co., Inc., Vystar Corporation & Affiliated Grantorsipix_ex101.htm

EXHIBIT 10.1
 
EXCLUSIVE LICENSE AGREEMENT
 
by and between
 
INNOVATION PHARMACEUTICALS INC.
 
and
 
ALFASIGMA S.p.A.
 
Dated as of July 18, 2019
 
	 
	
	
 
	 

 
CONFIDENTIAL
 
EXCLUSIVE LICENSE AGREEMENT
 
THIS EXCLUSIVE LICENSE AGREEMENT (this “Agreement”) is entered into as of July 18, 2019 (the “Effective Date”), by and between INNOVATION PHARMACEUTICALS INC., a Nevada corporation with a principal place of business at 100 Cummings Center, Suit 151B, Beverly, Massachusetts (hereinafter referred to as “IPI”), and ALFASIGMA S.p.A. an Italian corporation with a principal place of business at Via Ragazzi del ’99 n.5, 40133 Bologna (Italy) (hereinafter referred to as “ALFASIGMA”). IPI and ALFASIGMA are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.
 
WHEREAS, IPI owns or controls certain intellectual property rights with respect to the IPI’s proprietary pharmaceutical compound Brilacidin, including patents and patent applications listed in Exhibit A; 
 
WHEREAS, ALFASIGMA has experience in, among other things, the development, manufacture and commercialization of pharmaceutical compounds and products; and
 
WHEREAS, ALFASIGMA desires to obtain, and IPI desires to grant to ALFASIGMA, an exclusive license to develop, manufacture and commercialize a product incorporating/containing Brilacidin for the prevention, treatment, amelioration, diagnosis or monitoring of Ulcerative Proctitis/Proctosigmoiditis (UP/UPS) using finished formulation(s) for local administration (e.g., gel, foam, enema) to the rectum and/or colon, subject to the terms and conditions of this Agreement.
 
NOW, THEREFORE, in consideration of the foregoing and the premises and conditions set forth herein, the Parties agree as follows.
 
ARTICLE I
 
Definitions
 
All references to particular Exhibits, Articles or Sections shall mean the Exhibits to, and Articles and Sections of, this Agreement, unless otherwise specified. For the purposes of this Agreement and the Exhibits hereto, the following words and phrases shall have the following meanings:
 
1.1 “Affiliate” means, with respect to any Person, any other Person which controls, is controlled by or is under common control with such Person, now or in the future, for as long as such control exists. For purposes of this Section, “control” shall mean the direct or indirect ownership of more than fifty percent (50%) of the voting or economic interest of a Person, or the power, whether pursuant to contract, ownership of securities or otherwise, to direct the management and policies of a Person. For clarity, once a Person ceases to be an Affiliate of a Party, then, without any further action, such Person shall cease to have any rights, including license and sublicense rights, under this Agreement by reason of being an Affiliate of such Party.
 
1.2 “Agreement” shall have the meaning set forth in the Preamble.
 
1.3 “ALFASIGMA” shall have the meaning set forth in the Preamble.
 
1.4 “ALFASIGMA Indemnified Parties” shall have the meaning set forth in Section 12.1(a).
  
	 
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CONFIDENTIAL
 
1.5 “ALFASIGMA Material Breach” means any material breach by ALFASIGMA of any of its obligations as follows: (a) make any payment to IPI under ARTICLE VI when due and payable; (b) unauthorized activities within or outside the ALFASIGMA Territory as specified in Section 2.7; or (c) failure to use Commercially Reasonable Efforts pursuant to Section 4.2(a). ALFASIGMA shall not be liable for any failure to perform, or be considered in breach of, its obligations under this Agreement (other than obligations to make payments of money) to the extent such performance has been delayed, interfered with or prevented by an event of Force Majeure.
 
1.6 “ALFASIGMA Territory” means worldwide.
 
1.7 “Anti-Corruption Laws” means all Laws, conventions and international financial institution rules regarding corruption, bribery, ethical business conduct, money laundering, political contributions, gifts, gratuities, or lawful expenses to public officials and private persons, agency relationships, commissions, lobbying, books and records, and financial controls.
 
1.8 “Audited Party” shall have the meaning set forth in Section 7.6.
 
1.9 “Background IP” shall mean and include all IP relating to the Compound and/or the Product which is owned or Controlled by the respective Party and/or its Affiliates at the Effective Date, and which shall remain IP owned or Controlled by such Party and/or its Affiliates during the Term.
 
1.10 “Business Day” means any day other than Saturday, a Sunday or any day banks are authorized or required to be closed in New York City, United States, or in Bologna, Italy.
 
1.11 “Calendar Quarter” means the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31, for so long as this Agreement is in effect; provided, however, that (a) the first Calendar Quarter shall extend from the Effective Date until the end of the first full Calendar Quarter thereafter, and (b) the last Calendar Quarter shall end upon the expiration of this Agreement.
 
1.12 “Calendar Year” means each successive period of twelve (12) months commencing on January 1 and ending on December 31, for so long as this Agreement is in effect; provided, however, that (a) the first Calendar Year shall commence on the Effective Date and end on December 31, 2019, and (b) the last Calendar Year shall commence on January 1 of the Calendar Year in which this Agreement terminates or expires and end on the date of termination or expiration of this Agreement.
 
1.13 “Commencement of the First Phase III” means the date of completion, in accordance with the Law and the study protocol under the Development Plan, of a first study visit by a human subject in the first phase III clinical trial, as conducted by ALFASIGMA, its Affiliates or Sublicensees hereunder for the Development of the Product or the Compound (first patient first visit). 
 
1.14 “Commercialization” means all activities directed to marketing, distributing, detailing or selling the Compound or the Product (as well as importing and exporting activities in connection therewith), including all activities directed to obtaining pricing approvals. Cognates of the word “Commercialization” shall have correlative meanings.
  	 
	3
	
 
	 

 
CONFIDENTIAL
 
1.15 “Commercially Reasonable Efforts” means with respect to the efforts to be expended by any Party with respect to any objective, reasonable, diligent, good faith efforts to accomplish such objective as such Party would use in its ordinary course of business to accomplish a similar objective under similar circumstances. With respect to any objective relating to the Development and Commercialization of a Product by ALFASIGMA, “Commercially Reasonable Efforts” means that level, caliber and quality of efforts and resources reasonably and normally used in the research, Development and Commercialization by companies in the pharmaceutical industry of the size of ALFASIGMA for a compound or product which is of similar market potential and at a similar stage in its Development or product life, taking into account, without limitation, with respect to the Product, issues of safety, efficacy, product profile, competitiveness in the marketplace, including efforts used by similarly positioned competitors for competing products, regulatory structure involved, timing for market entry, proprietary position, and other relevant scientific, technical, business, marketing, return on investment and other commercial factors. Without limiting the generality of the foregoing, “Commercially Reasonable Efforts” requires that ALFASIGMA (a) promptly assigns responsibility for such obligations to specific employees who are held accountable for progress and monitoring such progress on an ongoing basis, and (b) set and consistently seek to adhere to the targets, budgeting and timelines (to the extent adherence to such activities and timelines are controllable by ALFASIGMA) set forth in the then most current version of the Development Plan agreed upon by the Parties, unless ALFASIGMA has a reasonable basis to diverge from the Development Plan. 
 
1.16 “Competing Activities” shall have the meaning set forth in Section 9.3(c).
 
1.17 “Compound” means IPI’s proprietary molecule known as Brilacidin in the chemical structure set forth in Exhibit B, including any back-up compounds and analogues (including, prodrugs, metabolites, complexes, degradants, impurities, mixtures and other combinations) their salts, solvates, hydrates, stereoisomers, crystalline and amorphous forms, owned or Controlled by IPI as of the Effective Date or during the Term. 
 
1.18 “Compound Specifications” means specifications of the Compound set forth in Exhibit D. 
 
1.19 “Confidential Information” shall have the meaning set forth in Section 10.1.
 
1.20 “Control” or “Controlled” means the possession of the right to grant licenses or sublicenses or to disclose proprietary or trade secret information without violating the terms of any agreement or other arrangement with a Third Party and without misappropriating or infringing the proprietary or trade secret information of a Third Party or being obligated to pay any royalties or other consideration therefor.
 
1.21 “Cover”, “Covered” or “Covering” means, with respect to a product, technology, process or method, that, in the absence of ownership of or a license granted under a Valid Claim, the practice or exploitation of such product, technology, process or method would infringe such Valid Claim (or, in the case of a Valid Claim that has not yet issued, would infringe such Valid Claim if it were to issue). 
 
1.22 “Defending Party” shall have the meaning set forth in Section 8.6.
 
1.23 “Designee” shall have the meaning set forth in Section 11.6(d).
 
1.24 “Development” means, with respect to the Compound and/or the Product, all processes and activities that are reasonably required to obtain Marketing Approval of such Compound and/or the Product, including toxicology, pharmacology and other pre-clinical efforts, test method development and stability testing, statistical analysis, clinical studies and regulatory activities. Cognates of the word “Development” shall have correlative meanings.
  	 
	4
	
 
	 

 
CONFIDENTIAL
 
1.25 “Development Plan” shall have the meaning set forth in Section 3.2(b). 
 
1.26 “Effective Date” shall have the meaning set forth in the Preamble.
 
1.27 “Executive Officer” means an executive of each Party who shall have a title of Vice President or more senior in the case of IPI and shall have a title of Vice President or more senior in the case of ALFASIGMA. 
 
1.28 “FCPA” means the U.S. Foreign Corrupt Practices Act (15 U.S.C. Section 78dd-1, et seq.) as amended.
 
1.29 “First Commercial Sale” means the first sale of commercial quantities of the Product by ALFASIGMA or any of its Affiliates or Sublicensees in the ALFASIGMA Territory to a Third Party on arm’s length terms for use in the Indication after receipt of Marketing Approval by ALFASIGMA in the ALFASIGMA Territory. Sales for test marketing, sampling and promotional uses, clinical trial purposes or compassionate or similar use shall not be construed as a First Commercial Sale. 
 
1.30 “Force Majeure” means any unforeseen circumstances that are not within the reasonable control of, and without fault or negligence on the part of, the Party affected thereby, potentially including an act of God, war, act of terrorism, insurrection, riot, strike or labor dispute, fire, explosion, flood, government requisition or allocation, interruption or delay in transportation, fuel supplies or electrical power, embargo, boycott, order or act of civil or military authority.
 
1.31 “Formulation” means the finished formulation(s) for local administration (e.g., gel, foam, enema) to the rectum and/or colon.
 
1.32 “Good Manufacturing Practices” or “GMP” means the current Good Manufacturing Practices as set forth in the United States of America or European Community Directive 2003/94/EC (or any successor regulation thereto) in relation to medicinal products for human use and investigational medicinal products for human use, as interpreted by ICH Harmonized Tripartite Guideline, Good Manufacturing Practice Guide for Active Pharmaceutical Ingredients, including without limitation, ICH Q7A (Guideline on Good Manufacturing Practice for Active Pharmaceutical Ingredients) and Eudralex Vol 4. 
 
1.33 “Governmental Authority” means any court, agency, department, authority or other instrumentality of any national, state, county, city or other political subdivision.
 
1.34 “Good Clinical Practice” or “GCP” means the current Good Clinical Practices officially published and interpreted or required by (a) the FDA, as set forth in FDA regulations in 21 C.F.R. Parts 11, 50, 54, 56, and 312 and related FDA guidance documents, and (b) the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH), as set forth the International Conference on Harmonization ICH E6 (R2): Good Clinical Practices Consolidated Guideline (issued as EMA/CHMP/ICH/135/1995), or as otherwise required by the Law.
  	 
	5
	
 
	 

 
CONFIDENTIAL
 
1.35 “Indication” (or “UP/UPS Indication”) means the prevention, treatment, amelioration, diagnosis or monitoring of Ulcerative Proctitis/Proctosigmoiditis (UP/UPS). 
 
1.36 “Infringement” means any infringement as determined by Law, including direct infringement, contributory infringement or any inducement to infringe. Cognates of the word “Infringe” shall have correlative meanings. 
 
1.37 “Insolvency Event” means, in relation to either Party, any of the following: (a) that Party becomes unable to, or shall admit in writing its inability to, pay its debts as they become due; (b) that Party shall commence any case, proceeding or other action (i) under any existing Law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (ii) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or any such Party shall make a general assignment for the benefit of its creditors; (c) there shall be commenced against such Party any case, proceeding or other action of a nature referred to in clause (b) above that results in the entry of an order for relief or any such adjudication or appointment; (d) there shall be commenced against such Party any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (e) such Party shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clauses (b), (c) or (d) above.
 
1.38 “IP” means any and all invention, whether or not patentable, discovery or Know-How, including patents, copyrights, trade secrets or any other proprietary information protectable by statutory provision or common law doctrine, but specifically excluding trademarks and trade names.
 
1.39 “IPI Indemnified Parties” shall have the meaning set forth in Section 12.1(b).
 
1.40 “IPI Know-How” means all Know-How owned or Controlled by IPI as of the Effective Date or during the Term that is reasonably necessary or useful for the Development, Manufacture or Commercialization of the Compound and/or the Product in the Indication in the ALFASIGMA Territory. The IPI Know-How shall include the Know-How relating to the Compound whether in and/or outside the Formulation. IPI Know-How does not include IPI Patents. IPI Know-How also does not include any Know-How owned or Controlled by any Third Party acquirer of IPI to the extent not related to the Compound and/or the Product in the Indication in the ALFASIGMA Territory. 
 
1.41 “IPI Material Breach” means any material breach by IPI of any of its obligations as follows: (a) supply of Compound to ALFASIGMA pursuant to Article V and Exhibit D and Exhibit F, (b) transfer of the IPI Know-How pursuant to Section 2.5 and Section 2.6 (as applicable), (c) grant of exclusive Licenses by IPI pursuant to Section 2.1(a), (d) prosecution and maintenance of the IPI Patents pursuant to Section 8.2,(e) IPI or its successors or permitted assignees ceasing to be the owner of Know How and Patent Rights licensed under this Agreement, and (f) supply by IPI to ALFASIGMA of all available documents (CMC & Clinical) required for submission to Regulatory Authorities in the ALFASIGMA Territory. IPI shall not be liable for any failure to perform, or be considered in breach of, its obligations under this Agreement (other than obligations to make payments of money) to the extent such performance has been delayed, interfered with or prevented by an event of Force Majeure.
  	 
	6
	
 
	 

 
CONFIDENTIAL
 
1.42 “IPI Patents” means all Patent Rights (other than the Joint Patents) owned and/or Controlled by IPI as of the Effective Date or during the Term with respect to Compound and/or Product and that Cover (a) the compositions of matter of the Compound and/or Product, or (b) methods of use, administration or formulation of the Compound and/or the Product in and/or outside the Indication. A list of the “IPI Patents” as of the Effective Date is set forth in Exhibit A hereto. IPI Patents does not include any Patents owned or Controlled by a Third Party acquirer of IPI to the extent not related to the Compound and/or the Product in the Indication in the ALFASIGMA Territory. 
 
1.43 “IPI Territory” means worldwide as it relates to products other than those licensed under this Agreement.
 
1.44 “JDC” shall have the meaning set forth in Section 3.1.
 
1.45 “Joint IP” means all IP created or developed jointly by or on behalf of IPI or its Affiliates or Sublicensees and ALFASIGMA or its Affiliates or Sublicensees arising as a result of the activities undertaken by the Parties under this Agreement, but only to the extent not claimed in or Covered by any published or otherwise publicly available Joint Patent. Joint IP shall not include any IP solely owned or Controlled by IPI or ALFASIGMA. 
 
1.46 “Joint Patents” means any Patent Right that claims or Covers any invention, development or discovery and which Patent Right names at least one inventor from both (i) IPI or its Affiliates or any Person acting on IPI’s behalf, and (ii) ALFASIGMA or its Affiliates, Sublicensees or any Person acting on ALFASIGMA’s behalf.
 
1.47 “Know-How” means techniques, technology, trade secrets, inventions (whether patentable or not), methods, know-how, data and results (including pharmacological, toxicological and pre-clinical, clinical, manufacturing data and results), analytical and quality control data and results, regulatory documents, and other information, compositions of matter, cells, cell lines, assays, animal models and other physical, biological, or chemical material. For clarity, “Know-How” shall include Chemistry, Manufacturing and Control (“CMC”) data. 
 
1.48 “Law” means, individually and collectively, any and all laws, ordinances, rules, directives, administrative circulars and regulations of any kind whatsoever of any Governmental Authority within the applicable jurisdiction, currently in effect or enacted or promulgated during the Term, as amended from time to time, applicable to Development, Manufacturing, Commercialization and/or the rights and obligations of either Party hereunder, including GCP and GMPs.
 
1.49 “License” shall have the meaning set forth in Section 2.1(a), subject to Section 2.6(b)(i). 
 
1.50 “Losses” shall have the meaning set forth in Section 12.1.
 
1.51 “Manufacture” shall mean all activities related to the manufacturing of a pharmaceutical product, or any ingredient thereof, including but not limited to test method development and stability testing, characterization, formulation, process development, manufacturing for use in non-clinical or clinical studies, manufacturing scale-up, quality assurance/quality control development, quality control testing (including in-process release and stability testing), packaging, release of product or any component or ingredient thereof, quality assurance activities related to manufacturing and release of product, and regulatory activities related to any of the foregoing. Cognates of the word “Manufacture” shall have correlative meanings. 
  	 
	7
	
 
	 

 
CONFIDENTIAL
 
1.52 “Manufacturing Cost” means a supplier’s fully-burdened internal and Third Party costs invoiced to the supplier, in each case to extent directly and actually incurred in Manufacturing the Compound, determined in accordance with such supplier’s standard cost accounting policies that are in accordance with GAAP and expressed on a per unit Manufactured basis. Costs included will be consistent with the activities outlined in the definition of “Manufacture”. For clarity, the Manufacturing Cost will be calculated without applying any mark-up.
 
1.53 “Marketing Approval” means, with respect to the Compound and/or the Product in a particular country or jurisdiction, all approvals (including where applicable, pricing and reimbursement approvals), registrations, licenses or authorizations from any Regulatory Authority that are necessary for the Development, Manufacture and Commercialization in such country or jurisdiction.
 
1.54 “Manufacturing Option” shall have the meaning set forth in Section 2.6.
 
1.55 “Milestone Event” shall have the meaning set forth in Section 6.1(b).
 
1.56 “Milestone Payments” shall have the meaning set forth in Section 6.1(b).
 
1.57 “Net Sales” means, with respect to any Product, the amount invoiced by ALFASIGMA, its Affiliates or Sublicensees for the sale of such Product to a Third Party in the ALFASIGMA Territory less the following deductions, to the extent attributable to the Product and to the extent actually incurred, accrued or allocated, in each case in accordance with GAAP (or corresponding standards in the ALFASIGMA Territory), consistently applied:
 
(a) trade and quantity discounts other than early payment cash discounts;
 
(b) returns, rebates, chargebacks and other allowances;
 
(c) retroactive price reductions that are allowed or granted;
 
(d) deductions to gross invoice price of Product imposed by Regulatory Authorities or other Governmental Authorities; and
 
(e) transportation and insurance costs of such units of Product and custom duties paid with respect to such units of Product,
 
(collectively, the “Net Sales Deductions”). In no event shall any particular Net Sales Deduction be deducted more than once in calculating Net Sales (i.e., no “double counting” of deductions).
  	 
	8
	
 
	 

 
CONFIDENTIAL
 
1.58 “Net Sales Deductions” shall have the meaning set forth in Section 1.58.
 
1.59 “New IP” shall mean that if ALFASIGMA solely generates IP regarding the Compound and/or the Product during the Term, the IP shall belong exclusively to ALFASIGMA, pursuant to the terms and conditions of this Agreement. Likewise, if IPI solely generates IP regarding the Compound and/or the Product during the Term, the IP shall belong exclusively to IPI, pursuant to the terms and conditions of this Agreement.
 
1.60 “Oral Drug Product(s)” shall mean finished formulation(s) for oral administration containing the Compound (alone or in combinations with other active pharmaceutical ingredients).
 
1.61 “Other GI Indications” shall have the meaning set forth in Section 2.4(d).
 
1.62 “Packaging and Labeling” shall have the meaning set forth in Section 5.5.
 
1.63 “Party” or “Parties” shall have the meaning set forth in the Preamble.
 
1.64 “Patent Rights” means any provisional and non-provisional patents and patent applications, together with all additions, divisions, continuations, continuations-in-part, substitutions, reissues, re-examinations, extensions, registrations, patent term extensions, supplemental protection certificates, design patents, certificates of invention and other similar rights, so-called pipeline protection, any importation, revalidation, confirmation or introduction patent, renewals and foreign counterparts thereof.
 
1.65 “Person” means any corporation, limited or general partnership, limited liability company, joint venture, trust, unincorporated association, governmental body, authority, bureau or agency, any other entity or body, or an individual.
 
1.66 “Product” means any pharmaceutical product using the Formulation containing the Compound (alone or in combinations with other active pharmaceutical ingredients) in the Indication.
 
1.67 “Promotional Materials” means all written, printed, video or graphic advertising, promotional, educational and communication materials (other than the Product labels and package inserts) for marketing, advertising and promoting of the Product.
 
1.68 “Regulatory Authority” means any Governmental Authority or other authority responsible for granting Marketing Approvals for the Product. 
 
1.69 “Regulatory Exclusivity” means, with respect to any country, any exclusive Commercialization rights or data exclusivity rights conferred by any Regulatory Authority with respect to the Product, other than a Patent Right, during which ALFASIGMA or its Affiliates or Sublicensees have the exclusive right to market, price, and sell the Product in such country through a regulatory exclusivity right. 
 
1.70 “Regulatory Materials” means materials developed or compiled in preparation for Regulatory Authority meetings, regulatory applications, submissions, dossiers, notifications, registrations, Marketing Approvals and/or other filings made to or with, or other approvals granted by, a Regulatory Authority with respect to the Compound or Product in a particular jurisdiction.
  	 
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CONFIDENTIAL
 
1.71 “Royalties” shall have the meaning set forth in Section 6.1(c).
 
1.72 “Royalty Term” means the period commencing upon the First Commercial Sale and ending upon the last to occur of: (a) the expiration of the last to expire IPI Patent that contains a Valid Claim Covering the Compound or the Product in the ALFASIGMA Territory; (b) the expiration of Regulatory Exclusivity for the sale of Product in the ALFASIGMA Territory; and (c) the tenth (10th) anniversary of the First Commercial Sale. 
 
1.73 “Sublicensees(s)” means any Person (other than an Affiliate) to which ALFASIGMA has granted a permitted sublicense in accordance with the terms of this Agreement.
 
1.74 “Term” shall have the meaning set forth in Section 11.1. 
 
1.75 “Third Party” means a Person other than (a) IPI or any of its Affiliates and (b) ALFASIGMA or any of its Affiliates.
 
1.76 “Third Party Manufacturer” shall have the meaning set forth in Exhibit D.
 
1.77 “UC/CD Indications” shall have the meaning set forth in Section 2.3(d).
 
1.78 “Valid Claim” means a claim of (a) an issued and unexpired Patent Right, which claim has not been held invalid or unenforceable by a court or other government agency of competent jurisdiction from which no appeal can be or has been taken and has not been held or admitted to be invalid or unenforceable through re-examination or disclaimer, opposition procedure, nullity suit or otherwise, or (b) a pending Patent Right application; provided, however, that if a claim of a pending patent application shall not have issued within seven (7) years after the earliest filing date from which such claim takes priority, such claim shall no longer constitute a Valid Claim for purposes of this Agreement unless and until a patent issues with such claim. 
 
1.79 “VAT” shall have the meaning set forth in Section 7.8.
 
ARTICLE II
 
License Grant
 
2.1 Licenses. (a) Subject to the terms and conditions of this Agreement, IPI hereby grants to ALFASIGMA (i) an exclusive royalty-bearing license, with the right to grant sublicenses pursuant to Section 2.2, under IPI’s right, title and interest in and to the IPI Patents, the IPI Know-How, the Joint IP, the Joint Patents and the New IP owned or Controlled by IPI specifically for and limited to Develop the Product in the ALFASIGMA Territory for the Indication, and (ii) an exclusive, royalty-bearing license, with the right to grant sublicenses pursuant to Section 2.2, under IPI’s right, title and interest in and to the IPI Patents, the IPI Know-How, the Joint IP, the Joint Patents and the New IP owned or Controlled by IPI to Manufacture, have Manufactured and Commercialize the Product in the ALFASIGMA Territory for the Indication (collectively, the “License”). The License shall be exclusive even with respect to IPI and its Affiliates, except as set forth in Section 2.1(b). 
 
(b) Anything to the contrary in Section 2.1(a) notwithstanding, IPI shall have the right, directly or through Third Parties, to develop and Manufacture the Compound or one or more products incorporating the Compound (other than the Product) in the IPI Territory in support of IPI obtaining marketing approval for products (other than the Product), and commercializing products (other than the Product) in the IPI Territory, and nothing in this Section 2.1(b) shall be read to the contrary; provided, that IPI shall not, directly or through any of its Affiliates or Third Parties, Manufacture and/or commercialize any Oral Drug Product specifically for the Indication. Without limiting the foregoing, IPI shall have the right, directly or through Third Parties, to develop and Manufacture products (other than the Product) incorporating the Compound in the ALFASIGMA Territory in support of IPI obtaining marketing approval for, and commercializing such products in the ALFASIGMA Territory.
  	 
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2.2 Sublicenses. ALFASIGMA shall have the right to grant sublicenses (or further rights of reference) through multiple tiers under the License to its Affiliates and/or Sublicensees without IPI’s consent; provided, however, that (a) each sublicense shall be subject to and consistent with the terms hereof; (b) ALFASIGMA shall enforce the performance by each Sublicensee of such Sublicensee’s obligations under such sublicense; (c) notwithstanding any such sublicense, ALFASIGMA shall remain solely liable for the performance of its obligations hereunder by itself and through its Affiliates and Sublicensees; and (d) ALFASIGMA shall prior to the execution of each such sublicense notify IPI in writing of the identity of such proposed sublicensee. 
 
2.3 Right of First Refusal for Oral Drug Product(s) in Ulcerative Colitis/ Crohn’s Disease (UC/CD) Indications. (a) If at any time during the Term, IPI (or any of its Affiliates) receives or solicits a bona fide offer from a Third Party which wishes to obtain rights to Develop, Manufacture and/or Commercialize an Oral Drug Product(s) in the UC/CD Indications in any country of the ALFASIGMA Territory, then prior to effecting any such transaction IPI shall notify in writing to ALFASIGMA the terms and conditions offered by that Third Party to IPI.
 
(b) If, within 30 days after IPI notifying to ALFASIGMA pursuant to Section 2.3(a), ALFASIGMA notifies IPI of its interest to such Development, Manufacturing and/or Commercialization rights, then the Parties shall negotiate in good faith a final binding agreement based on the terms and conditions offered by that Third Party, to add the Oral Drug Product(s) in the UC/CD Indications to this Agreement. If, despite negotiations in good faith, the Parties do not reach any such agreement within 60 days after receipt by IPI of the ALFASIGMA’s notice above, then IPI shall be free to grant such Development, Manufacturing and/or Commercialization rights to any Third Party at terms and conditions which are not substantially more favorable for such Third Party than those notified to ALFASIGMA, provided, however, that (i) in the event that terms and conditions are substantially more favorable for such Third Party than those notified to ALFASIGMA, IPI shall promptly notify thereof to ALFASIGMA and then the Parties shall have a new period of 30 days to negotiate in good faith a final binding agreement based on such more favorable terms and conditions, and (ii) subject to paragraph (i) above, no further negotiation options will be provided to ALFASIGMA thereafter.
 
(c) If, ALFASIGMA notifies to IPI of its lack of interest to (or within 30 days after receipt by ALFASIGMA of IPI’s written proposal under Section 2.3(a), ALFASIGMA does not notify IPI of its interest to such Development, Manufacture and/or Commercialization rights, then IPI shall be free to grant such rights to any Third Party at terms and conditions which are not substantially more favorable for such Third Party than those notified to ALFASIGMA, provided, however, that (i) in the event that terms and conditions are substantially more favorable for such Third Party than those notified to ALFASIGMA, IPI shall promptly notify thereof to ALFASIGMA and then the Parties shall have a new period of 30 days to negotiate in good faith a final binding agreement based on such more favorable terms and conditions, and (ii) subject to paragraph (i) above, no further negotiation options will be provided to ALFASIGMA thereafter. 
  	 
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(d) For the purpose hereof, the term “UC/CD Indications” means the usage of Oral Drug Product(s) for the prevention, treatment, amelioration, diagnosis or monitoring of Ulcerative Colitis (UC) and Crohn’s Disease (CD).
 
2.4 Right of First Negotiation for drug product(s) in Other GI Indications. (a) If at any time during the Term, (i) ALFASIGMA wishes to obtain the rights to Develop, Manufacture and/or Commercialize a drug product(s) containing the Compound (alone or in combinations with other active pharmaceutical ingredients) in Other GI Indications in any country of the ALFASIGMA Territory where IPI has not granted rights to Third Party at that time, ALFASIGMA will propose in writing to IPI the terms and conditions to obtain such rights and then the Parties shall negotiate in good faith a final binding agreement to add such drug product(s) in Other GI Indications to this Agreement; and/or (ii) IPI wishes (directly or indirectly through any of its Affiliates or Third Parties) to Develop, Manufacture and/or Commercialize such drug product(s) in Other GI Indications, IPI will propose in writing to ALFASIGMA the terms and conditions to grant to ALFASIGMA such rights to such drug product(s) in Other GI Indications. If, within 30 days thereafter, ALFASIGMA notifies IPI of its interest to such Development, Manufacturing and/or Commercialization rights, then the Parties shall negotiate in good faith a final binding agreement on commercially reasonable terms to add such other drug product(s) containing the Compound in Other GI Indications to this Agreement.
 
(b) If, despite negotiations in good faith, the Parties do not reach any such agreement within 60 days after receipt by IPI of ALFASIGMA’s written proposal under Section 2.4(a)(i), or by ALFASIGMA of the IPI’s written proposal under Section 2.4(a)(ii), as the case may be, then IPI shall be free to grant such Development, Manufacturing and/or Commercialization rights to any Third Party at terms and conditions which are not substantially more favorable for such Third Party than those notified to ALFASIGMA, provided, however, that (i) in the event that terms and conditions are substantially more favorable for such Third Party than those notified to ALFASIGMA, IPI shall promptly notify thereof to ALFASIGMA and then the Parties shall have a new period of 30 days to negotiate in good faith a final binding agreement based on such more favorable terms and conditions, (ii) subject to paragraph (i) above, no further negotiation options will be provided to ALFASIGMA thereafter.
 
(c) In the case under Section (a)(ii) above, if, ALFASIGMA notifies to IPI of its lack of interest to (or within 30 days after receipt by ALFASIGMA of IPI’s written proposal, ALFASIGMA does not notify IPI of its interest to) such Development, Manufacturing and/or Commercialization rights, then IPI shall be free to grant such rights to any Third Party at terms and conditions which are not substantially more favorable for such Third Party than those notified to ALFASIGMA, (i) in the event that terms and conditions are substantially more favorable for such Third Party than those notified to ALFASIGMA, IPI shall promptly communicate thereof to ALFASIGMA and then the Parties shall have a new period of 30 days to negotiate in good faith a final binding agreement based on such more favorable terms and conditions, and (ii) subject to paragraph (i) above, no further review options will be provided to ALFASIGMA thereafter.
 
(d) For the purpose hereof, the term “Other GI Indications” means the usage of any drug products containing the Compound (other than, for clarity, the Product), whether in the Formulation and/or other formulation, for the prevention, treatment, amelioration, diagnosis or monitoring of gastrointestinal diseases and conditions (including any Oral Drug Products in the Indications), in each case other than the UC/CD Indications.
 
2.5 Technology/Know-How Transfer. (a) The Parties agree that within (i) thirty (30) days after the Effective Date, IPI shall provide to ALFASIGMA, a single copy of all tangible embodiments (including in the electronic form) of the IPI Know-How (including the Background IP) and the other materials as set forth in Exhibit H, and (ii) one hundred eighty (180) days after the Effective Date, IPI shall provide to ALFASIGMA a single copy of any other tangible embodiments (including in the electronic form) of the IPI Know-How (including the Background IP) as reasonably necessary or useful for the practice and/or use of the License, in each case, on an exclusive basis for use in the Indication in the ALFASIGMA Territory, without any fee or consideration to IPI. 
  	 
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(b) IPI shall give reasonable assistance to ALFASIGMA, without any fee or consideration to IPI, in connection with the technology transfer as reasonably necessary or useful to Manufacture the Compound (subject to Section 2.6) and/or the Product. 
 
(c) During the Term, (i) without any fee or consideration to IPI, IPI shall continue to provide to ALFASIGMA all relevant IPI Know-How as it becomes reasonably available to IPI and/or its Affiliates during the Term, concerning the Compound and/or the Product as reasonably necessary or useful for the practice and/or use of the License, and (ii) ALFASIGMA shall share with IPI all ALFASIGMA Know-How concerning the Compound generated under the Development Plan, provided, however, that (w) any such sharing of ALFASIGMA Know-How shall not result in any transfer of ownership of or right to IPI, (x) ALFASIGMA shall be and remain the owner of all such Know-How in the ALFASIGMA Territory, (y) such data shall be subject to confidentiality obligation as customary for Know-How of this type, and (z) subject to Section 2.5(d), IPI shall be entitled to use such Know-How as may be appropriate to support IPI regulatory approvals of the Compound for any indications other than the Indication and/or to support the Compound knowledge base. 
 
(d) Any proposed use by IPI (directly or through any of its Affiliates or Third Parties) for Commercial exploitation of the new owned Know-How of ALFASIGMA relating to the Compound (under Section 2.5(c)(ii)), will be subject to approval by ALFASIGMA, and subject to negotiation in good faith of appropriate compensation to ALFASIGMA.
 
(e) For the avoidance of doubt, nothing in this Agreement will be construed to require IPI to modify, enhance, improve, develop additional indications other than the Indications, or otherwise make any Developments in respect of the Compound, any drug product containing the Compound (alone or in combinations with other active pharmaceutical ingredients), the Product, the IPI Patents, or any IPI Know-How for or on behalf of ALFASIGMA, unless otherwise expressly agreed in writing by IPI.
 
2.6 Manufacturing Option. (a) ALFASIGMA will have the option exercisable at any time during the Term, without any fee or consideration to IPI, to Manufacture (or have Manufactured) the Compound for Development and/or Commercialization of the Product in the ALFASIGMA Territory with a right to sub-license in multiple tiers (the “Manufacturing Option”) (i) without IPI’s approval, in the event that IPI is unable to provide the Compound to ALFASIGMA pursuant to Article V, Exhibit D and Exhibit F and (ii) upon IPI’s approval (such approval to not be unreasonably withheld), in the event that ALFASIGMA is able to Manufacture and/or have Manufactured the Compound of similar quality at cost more favorable than that then currently applied or offered (as the case may be) by IPI to ALFASIGMA, provided, however, that, (x) ALFASIGMA offers to IPI the same Manufacturing terms, and (y) the approval by IPI under paragraph (ii) above shall not be denied in case IPI is not able to match any such Manufacturing terms.
  	 
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(b) Subject to the exercise of the Manufacturing Option under Section 2.6(a), (i) IPI shall grant to ALFASIGMA a non-exclusive, royalty-bearing license, with the right to grant sublicenses pursuant to Section 2.2, under IPI’s right, title and interest in and to the IPI Patents, the IPI Know-How, the Joint IP, the Joint Patents and the New IP owned or Controlled by IPI to Manufacture or have Manufacture the Compound in the ALFASIGMA Territory (as part of the License), (ii) IPI shall provide to ALFASIGMA, without any fee or consideration to IPI, all technological Know-How owned and/or Controlled by IPI and/or its Affiliates during the Term, as reasonably necessary or useful to support ALFASIGMA in the Development and Manufacturing of the Compound, as applicable, including any technology transfer for such purpose, and (iii) ALFASIGMA shall share with IPI all its Know-How concerning the formulation of the Compound generated by ALFASIGMA as a result of the exercise of the Manufacturing Option, provided, however, that (w) any such sharing of the ALFASIGMA Know-How shall not result in any transfer of the ownership of or right to IPI, (x) ALFASIGMA shall be and remain the owner of any and all such Know-How in the ALFASIGMA Territory, (y) such Know-How shall be subject to confidentiality obligation as customary for data of this type, and (z) subject to Section 2.6(c), IPI shall be entitled to use such Know-How as may be appropriate to support IPI regulatory approvals of the Compound for any indications other than the Indications and/or to support the Compound knowledge base. 
 
(c) Any proposed use by IPI (directly or through any of its Affiliates or Third Parties) for Commercial exploitation of the new owned Know-How of ALFASIGMA relating to the formulation of the Compound (under Section 2.6(b)(iii)), will be subject to approval by ALFASIGMA, and subject to negotiation in good faith of appropriate compensation to ALFASIGMA. 
 
2.7 Prohibited Activities within the ALFASIGMA Territory. To the extent permitted under the Law in the ALFASIGMA Territory, ALFASIGMA agrees that (i) neither it, nor any of its Affiliates, will Commercialized the Compound or Product to any Third Party for use in formulations other than the Formulation and/or outside the Indication, as applicable, and (ii) ALFASIGMA shall notify IPI if ALFASIGMA becomes aware that any Third Party to whom it has sold or provided the Compound and/or Product, or to whom it has granted any rights with respect to the Compound and/or Product, directly or indirectly, is engaging in the direct or indirect Commercialization of the Compound and/or Product for use in formulations other than the Formulation and/or outside the Indication, as applicable, and use Commercially Reasonable Efforts to cause such Third Party to cease such activities. 
 
2.8 No Other Rights. Except as expressly set forth in this Agreement, neither Party grants to the other Party any license, express or implied under its intellectual property rights. ALFASIGMA agrees that it shall not use any of the IPI Patents or IPI Know-How, except for the use or practice of the License and the other purposes which are not expressly prohibited under this Agreement.
 
2.9 Third Party License. In the event during the Term, ALFASIGMA and/or IPI desires to obtain from any Third Party a license to any of such Third Party’s IP to Develop, Manufacture and Commercialize the Compound and/or the Product in the Indication in the ALFASIGMA Territory, then the Parties shall cooperate in order to enter into negotiations with such a Third Party with respect to the terms of such licenses.
  	 
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ARTICLE III
 
Governance
 
3.1 Joint Development Committee. Promptly following the Effective Date, ALFASIGMA and IPI will establish a Joint Development Committee (“JDC”), consisting of six (6) people, with three (3) representatives appointed by IPI and three (3) representatives appointed by ALFASIGMA. The JDC will be chaired by one of ALFASIGMA’s representatives. The role of the JDC shall be to determine and approve appropriate material actions with respect to the Development of the Product in accordance with the terms and conditions of this Agreement. It will also serve as a forum for the sharing of information and facilitating communications between the Parties regarding Development, Manufacture and/or Commercialization activities with respect to the Compound and/or Product and the Oral Drug Products in/or outside the Indication. 
 
3.2 JDC Responsibilities. The JDC shall be responsible for:
 
(a) coordinating the activities of the Parties under this Agreement and providing a forum to facilitate communications between the Parties regarding (i) Development, Manufacture and/or Commercialization activities with respect to the Compound and/or Product, and (ii) the Oral Drug Products in/or outside the Indication;
 
(b) reviewing, discussing and approving the Development plan for the Product in the ALFASIGMA Territory (including the budget constituting part thereof), which shall be prepared by ALFASIGMA within ninety (90) days after receipt by ALFASIGMA of the documents and other materials pursuant to Section 2.5(a)(i), which shall be appended to this Agreement in Exhibit C (the “Development Plan”); 
 
(c) reviewing, discussing and approving, from time to time, amendments to the Development Plan as necessary or required to obtain Marketing Approval;
 
(d) reviewing, discussing and approving activities as necessary or required to progress the Development of the Product by ALFASIGMA; 
 
(e) facilitating the exchange of information between the Parties relating to the clinical trials, studies and data arising out of the progress of the Development of the Product;
 
(f) reviewing and approving activities related to the Manufacture of Compound and/or the Product; 
 
(g) discussing the status, and facilitating the exchange of information between the Parties, of the IP, the Joint IP and/or the Joint Patents related to the Compound and/or the Product, as required in connection with this Agreement; and
 
(h) establishing subcommittees or task forces to investigate and make recommendations with respect to particular matters affecting the Development and/or Commercialization of the Compound and/or Product, as the JDC deems necessary or advisable.
 
3.3 Meetings and Minutes. (a) The JDC shall meet at least quarterly for the first two (2) Calendar Years, and thereafter twice per Calendar Year, or more often as needed and as agreed by the Parties, with each Party bearing its own costs and expenses for organization and participation. Meetings may be in-person, or by telephone conference call, or internet meeting, as determined by the JDC members for the applicable meeting. Employees or consultants of a Party who are not representatives of the Parties on the JDC may attend JDC meetings; provided, however, that such attendees are bound by obligations of confidentiality, non-use, and non-disclosure consistent with Article X. 
  	 
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(b) ALFASIGMA will be responsible for preparing reasonably detailed written minutes of all JDC meetings that reflect material decisions made and action items identified at such meetings. Such minutes shall be distributed in draft form no later than fifteen (15) Business Days following each meeting and shall be deemed accepted and effective unless the other Party has objected to the same within ten (10) Business Days of its receipt of such minutes and, if the Parties do not agree on any issue with respect to the minutes, such issue shall be recorded in the finalized minutes for such meeting.
 
3.4 Decision-Making. (a) The JDC shall attempt to make decisions by consensus of the representatives present, with each Party having a single vote irrespective of the number of representatives of such Party in attendance or by a written resolution signed by at least one (1) representative appointed by each Party. 
 
(b) If the JDC cannot, or does not, reach consensus on an issue which has been discussed during a meeting of the JDC within ten (10) Business Days after the matter has first been discussed by the JDC, or any shorter term which is required by specific circumstances, then such issue shall be referred to the respective Executive Officers of the Parties. Such Executive Officers shall meet for attempted resolution by good faith negotiations within thirty (30) days after such issue is referred to them. If the Executive Officers are not able to resolve such disputed issue within this thirty (30)-day period, and the disputed matter relates solely to the Product for the Indication in the Territory or, subject to Section 3.4(c), the Compound in connection with any Adverse Regulatory Determination as defined below, then ALFASIGMA shall have the final decision making authority as to such disputed matter; provided, that ALFASIGMA’s final decision making authority shall not (i) alter, amend or modify this Agreement, (ii) impose an additional obligation on IPI, (iii) be used to determine whether ALFASIGMA has used Commercially Reasonable Efforts to undertake its obligations under this Agreement, or (iv) materially adversely affect the right of IPI under Section 2.1(b). Any activity that requires JDC approval shall not be undertaken unless and until the matter has been resolved pursuant to this Section 3.4(b).
 
(c) Without prejudice to the generality of Section 3.4(b), if a Regulatory Authority imposes or threatens to impose an obligation or requirement on ALFASIGMA relating to the Compound and such obligation or requirement is reasonably likely to adversely affect the ability of ALFASIGMA to obtain Marketing Approval for the Product (an “Adverse Regulatory Determination”), then ALFASIGMA shall promptly notify IPI of the Adverse Regulatory Determination. The Parties shall, within ten (10) Business Days of IPI’s receipt of notice of an Adverse Regulatory Determination, meet in-person, or telephonically to determine, in good faith, a response to the applicable Regulatory Authority that addresses the Adverse Regulatory Determination. In connection with the Parties activities pursuant to the preceding sentence, (i) the Parties shall use Commercially Reasonable Efforts to eliminate, mitigate or otherwise minimize the effect of the Adverse Regulatory Determination on ALFASIGMA, and/or (ii) at ALFASIGMA’s request, IPI shall, in coordination with ALFASIGMA, attend any Regulatory Authority meeting, interact with the Regulatory Authority and provide documentary information to the Regulatory Authority; provided, that ALFASIGMA shall bear the documented reasonable costs of IPI in connection with its activities under this Section 3.4(c). 
 
ARTICLE IV
 
Development & Commercialization
 
4.1 ALFASIGMA Responsibilities. Subject to the terms and conditions of this Agreement, during the Term ALFASIGMA shall be solely responsible for all costs and expenses associated with Developing, Manufacturing, and Commercializing the Product in the ALFASIGMA Territory. All Development activities undertaken by or on behalf of ALFASIGMA with respect to the Product shall be in accordance with the Development Plan. All Development and Commercialization activities undertaken by or on behalf of ALFASIGMA under this Agreement shall be in compliance with all Laws in the ALFASIGMA Territory. Without limiting the foregoing, ALFASIGMA shall not utilize deceptive, misleading or unethical business practices in connection with the Commercialization of the Product hereunder. 
  	 
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4.2 Diligence. (a) ALFASIGMA shall (directly and/or through one or more of its Affiliates and/or Sublicensees) use Commercially Reasonable Efforts to Develop, Manufacture and Commercialize the Product in the ALFASIGMA Territory. Without limiting the generality of the foregoing, ALFASIGMA shall use Commercially Reasonable Efforts to cause the First Commercial Sale of a Product in any country of the ALFASIGMA Territory promptly after, and in any case not later than, twelve (12) months after the date of obtainment of any Marketing Approval in such country. 
 
(b) If IPI, acting reasonably and in good faith believes that ALFASIGMA has breached its obligations to use Commercially Reasonable Efforts pursuant to Section 4.2(a), then IPI may provide to ALFASIGMA a written notice documenting in reasonable detail the reasons for the assertion of such breach. Upon receipt of such notice, ALFASIGMA shall have a period of twenty (20) Business Days to notify IPI in writing if it has a reasonable good faith objection to any such assertion of IPI specifying in reasonable detail the nature of the objections and the disputed items (the “Disputed Items”). If ALFASIGMA notifies IPI any Disputed Items, then the Parties shall attempt to resolve in good faith their differences and reach agreement within 10 (ten) Business Days after such notice, failing which all matters as to which agreement is not so reached may, thereafter, be submitted to arbitration pursuant to Section 13.3. For clarity, IPI shall have the right to seek termination of this Agreement under Section 11.2 through the arbitration proceeding commenced pursuant to this Section 4.2(b).
 
4.3 Development progress information. During the Term, ALFASIGMA shall maintain normal, complete and accurate records of all work conducted by or on behalf of ALFASIGMA in connection with the Development and Commercialization of the Product and all material results, data and developments made in conducting such activities. Such records shall be maintained according to standard practice in a format mutually agreed in good faith by the Parties.
 
4.4 Data Sharing and Right of Reference. (a) In addition to the adverse event and safety reporting to be undertaken under the safety data exchange agreement described in Section 4.6, each of the Parties shall provide to, or share with, the other Party the information as set forth and in accordance with Section 2.5, Section 2.6(b) and Section 2.6(c). 
 
(b) As part of the License granted by IPI, ALFASIGMA shall have the right (with the right to grant further rights of reference through multiple tiers) to access, use and reference any Regulatory Materials of IPI (including any investigational new drug application, clinical study application, clinical trial exemption, or similar application or submission for approval to conduct human clinical investigations filed with or submitted to a Regulatory Authority in conformity with the requirements of such Regulatory Authority) to Develop, Manufacture and Commercialize the Compound (subject to Section 2.6) and/or the Product in the ALFASIGMA Territory.
  	 
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(c) ALFASIGMA shall share with IPI all material data generated by ALFASIGMA as a result of the Development hereunder, provided, however, that (i) any such sharing of data shall not result in any transfer of the ownership of or right to IPI, (ii) ALFASIGMA shall be and remain the owner of all such data on a worldwide basis, (iii) such data shall be subject to confidentiality obligation as customary for data of this type, and (iv) subject to Section 4.4(d), IPI shall be entitled to use such data as may be appropriate to support IPI regulatory approvals of the Compound for any indications other than the Indication and/or to support the Compound knowledge base.
 
(d) Any proposed use by IPI (directly or through any of its Affiliates or Third Parties) for Commercial exploitation of new owned data (excluding any information required by Law or as reasonably necessary to assure or support patient safety) belonging to ALFASIGMA pursuant to Section 4.4(c)(ii), will be subject to approval by ALFASIGMA, and subject to negotiation in good faith of appropriate compensation to ALFASIGMA.
 
4.5 Regulatory Activities. ALFASIGMA shall apply for and maintain, at ALFASIGMA’s sole cost and expense and in the name of ALFASIGMA, its Affiliates or Sublicensees, all Marketing Approvals of the Product in the ALFASIGMA Territory. ALFASIGMA shall be responsible for the preparation of all Regulatory Materials and all communications and interactions with Regulatory Authorities with respect to the Product in the ALFASIGMA Territory, both prior to and subsequent to receipt of Marketing Approval, and shall be responsible for submitting such Regulatory Materials and communications to such Regulatory Authorities, subject to review by the JDC prior to submission. Without prejudice to Section 2.5(d), Section 2.6(c) and Section 4.4(d), ALFASIGMA shall promptly provide IPI with an electronic copy (in English) of all material correspondence from Regulatory Authorities received by or on behalf of ALFASIGMA with respect to the Development of the Product in the ALFASIGMA Territory. ALFASIGMA shall consult in good faith with IPI through the JDC with respect to matters addressed in this Section 4.5.
 
4.6 Safety Data Exchange Agreement. Within sixty (60) days after the Effective Date, but in any event prior to commencement of any clinical trials by ALFASIGMA for the Development of the Product, the Parties, through the JDC, will in good faith negotiate and finalize terms setting forth the obligations, procedures and timelines for exchanging information pertaining to safety reporting obligations (such as adverse and serious adverse events) observed in connection with the Development of the Compound and Product, which terms shall be appended to this Agreement in Exhibit E and constitute a part of this Agreement.
 
4.7 Government Filings. ALFASIGMA shall be solely responsible for applying and maintaining all Regulatory Approvals in the ALFASIGMA Territory, at its sole cost and expense, to the extent required to comply with its obligations hereunder.
 
4.8 Promotional Material. (a) ALFASIGMA will create, develop and produce, directly or through its Affiliates, Sublicensees or other nominees, Promotional Materials for the Product in accordance with the Marketing Approvals and the Law in the ALFASIGMA Territory.
 
(b) Notwithstanding anything to the contrary herein, ALFASIGMA shall not use any IPI trademarks, names, logos or other marks in connection with any Promotional Materials or the Product without IPI’s prior written consent, which consent shall not be withheld or delayed in the event that the Law requires the use of any such IPI marks. 
  	 
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(c) ALFASIGMA shall own all right, title and interest in and to any Promotional Materials created by or on behalf of ALFASIGMA hereunder relating to the Product including copyrights. 
 
(d) ALFASIGMA shall not own any right, title and interest in any trademarks, names, logos and other marks or intellectual property Controlled by IPI or its Affiliates. 
 
4.9 Product Trademark. (a) ALFASIGMA shall Commercialize the Product under the trademark and the trade dress selected by ALFASIGMA (the “Product Trademark” and the “Product Trade Dress,” respectively), provided that the Product Trademark and Product Trade Dress shall not incorporate, or be confusingly similar to, any trademark or trade dress used by IPI with respect to any product.
 
(b) All uses of the Product Trademark and Product Trade Dress by ALFASIGMA, its Affiliates and Sublicensees to identify and/or in connection with the Commercialization of the Product shall be in accordance with the Marketing Approvals and all Laws in the ALFASIGMA Territory. ALFASIGMA shall own and retain all rights to the Product Trademark and Product Trade Dress. 
 
(c) During the Term, ALFASIGMA will bear all costs and expenses relating to the maintenance and enforcement of the Product Trademarks as it deems appropriate in connection with the Commercialization of the Product.
 
(d) IPI shall not incorporate or use with respect to the Product any trademark or trade dress similar or confusingly similar to the Product Trademark and the Product Trade Dress.
 
4.10 Medical Inquiries. Following the Effective Date, and without limiting Section 4.5, ALFASIGMA shall be responsible for handling all medical questions or inquiries in the ALFASIGMA Territory, including all Product complaints, with regard to the Product sold by or on behalf of ALFASIGMA (or of any of its Affiliates and Sublicensees), in each case in accordance with the Law and this Agreement. IPI shall ensure complete support to ALFASIGMA wherever required during such medical inquiries.
 
4.11 Recall, Withdrawal, or Market Notification of Product. In the event that (i) any Governmental Authority threatens or initiates any action to recall or withdraw the Product from the market in the ALFASIGMA Territory, or to cause a market notification (e.g., by requiring the issuance of a “Dear Doctor” letter) in the ALFASIGMA Territory, or (ii) ALFASIGMA makes the determination to initiate any action to recall or withdraw the Product from the market in the ALFASIGMA Territory, or to cause a market notification in the ALFASIGMA Territory, then to the extent legally permitted, ALFASIGMA shall notify and consult with IPI promptly and without delay after receipt of such communication and prior to making any determination to initiate any such action, as applicable. Subject to such consultation and giving due consideration to any comments provided by IPI, ALFASIGMA shall determine whether to initiate any recall, withdrawal or market notification of the Product. ALFASIGMA shall at all times utilize a batch tracing system which will enable the Parties to identify, on a prompt basis, customers who have been supplied with Product of any particular batch, and to recall such batch of Product from such customers as set forth in this Section 4.11. Any and all costs and expenses associated with implementing a recall, withdrawal or market notification with respect to the Product shall be borne by ALFASIGMA, except for any recall, withdrawal or market notification due to the Compound Manufactured by IPI, in which case IPI shall bear any and all such costs and expenses of such recall up to the price of the Compound. This limitation of costs and expenses borne by IPI shall not apply in the event of willful misconduct or gross negligence on the part of IPI (or its Affiliates or Third Party Manufacturer). In the event of any dispute between the Parties with respect to whose default the recall, withdrawal or market notification of the Product has happened, the Parties shall submit the dispute to an independent third party laboratory of recognized repute within the pharmaceutical industry agreed upon by the Parties, the appointment of which shall not be unreasonably withheld or delayed by either Party. The determination of such laboratory shall be in writing and, in the absence of fraud or manifest error, shall be final and binding upon the Parties for all purposes hereunder. The cost and expense of such independent third party laboratory, together with any documented cost directly borne by the other Party due to any third party laboratory’s requests, shall be paid by the Party resulting in error according to the determination of such third party laboratory and neither Party shall be liable or bound to any further refund or reimbursement of costs.
  	 
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ARTICLE V
 
Manufacture
 
5.1 Compound Supply. Subject to Section 2.6, IPI shall have the sole responsibility for and sole authority with respect to Manufacturing and supplying to ALFASIGMA all Compound for use as an active pharmaceutical ingredient in any Product to be Manufactured for use by ALFASIGMA, its Affiliates or its Sublicensees in accordance with this Agreement and the Law. IPI and ALFASIGMA will enter into a mutually acceptable customary supply agreement within one (1) year prior to ALFASIGMA requiring Compound to support its obligations under this Agreement in accordance with the terms set forth in this Article V regarding the Manufacture and supply of the Compound.
 
5.2 Compound Supply Terms for the Development of the Product. The Parties agree to the terms and conditions for the supply of the Compound by IPI to ALFASIGMA for use in the Development of the Product as set forth in Exhibit D. 
 
5.3 Compound Supply Terms for the Commercialization of the Product. Subject to Section 5.1, prior to the First Commercial Sale the Parties will in good faith negotiate and finalize terms setting forth the obligations, procedures and timelines for the Manufacture and supply of the Compound for the Commercialization of the Product by IPI to ALFASIGMA at the Manufacturing Cost, which terms shall be appended to this Agreement in Exhibit F and constitute a part of this Agreement.
 
5.4 Product Manufacture. ALFASIGMA will Manufacture (or have Manufactured) the Product from the Compound for Development and/or Commercialization of the Product in the ALFASIGMA Territory.
 
5.5 Packaging and Labeling. ALFASIGMA shall be responsible (at its sole cost and expense) for all final labeling and packaging of the Product (whether in commercial or clinical packaging presentation), including insertion of materials such as patient inserts, patient medication guides, professional inserts and any other written, printed or graphic materials accompanying the Product in the ALFASIGMA Territory and considered to be part of the finished Product packaging and labeling, and handling, storage, quality control, quality assurance, testing and release (collectively, “Packaging and Labeling”). ALFASIGMA shall ensure that all such Packaging and Labeling complies with the Law and the Marketing Approvals for the Product in the ALFASIGMA Territory. To the extent that a Third Party is involved in Packaging and Labeling, ALFASIGMA shall be wholly responsible for, and bear one hundred percent (100%) of the costs related to, qualifying such Third Party to perform such activities.
 
5.6 Subcontracting. IPI may, with prior written consent of ALFASIGMA, subcontract the performance of any Manufacturing of the Compound conducted in accordance with this Agreement to any of its Affiliates or any Third Party; provided that (i) IPI shall remain responsible for the performance of such subcontracted activities in accordance with this Agreement, and (ii) the price of the Compound shall not be revised or adjusted upwards.
 
5.7 Compliance with Law. The Parties will, and will cause their Affiliates and Third Party subcontractors and (sub)licensees to, comply with the Law in the ALFASIGMA Territory in performing Manufacturing activities with respect to the Compound and Product for use in the Indication in the ALFASIGMA Territory. 
  	 
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ARTICLE VI
 
Fees, Royalties, & Payments
 
6.1 Consideration. In consideration of the rights granted to ALFASIGMA hereunder, ALFASIGMA shall pay to IPI the following amounts, subject to the terms and conditions of this Agreement:
 
(a) Initial Payment. ALFASIGMA shall pay to IPI a one-time, non-refundable, non-creditable initial payment in the amount set forth on Exhibit I (“Initial Payment”) on the Effective Date; 
 
(b) Milestone Payments. ALFASIGMA shall pay to IPI the following one-time, non-refundable, non-creditable milestone payments (each, a “Milestone Payment”), following the occurrence of certain milestone events as set forth below (each, a “Milestone Event”). 
 
(i) Development Milestones
 
For the UP/UPS Indication:
 
(1) US$ 1 million, upon Commencement of the First Phase III Clinical Trial; and
 
(2) US$ 1 million, upon the first filing of the Marketing Approval application to the US Regulatory Authority (“FDA”) or the EU Regulatory Authority (“EMA”), as applicable, without any duplication;
 
(ii) Regulatory Milestones
 
For the UP/UPS Indication:
 
(1) US$ 3 million, upon obtainment of the Marketing Approval from FDA; and
 
(2) US$ 1 million, upon obtainment of the Marketing Approval from EMA.
  	 
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(iii) Sales Milestones
 
	Milestone upon achievement of the following aggregate Net Sales 
    
	Payment
  

	First achievement of US$ 100 million
   
	US$ 3 million
 

	First achievement of US$ 200 million
 
	US$ 6 million 
  

	First achievement of US$ 300 million
  
	US$ 9 million 

 
ALFASIGMA shall notify IPI in writing of the occurrence of any applicable Milestone Event (each, a “Sales Milestone Notice”) within ten (10) Business Days after such occurrence.
 
(c) Royalties. During the Royalty Term, ALFASIGMA will pay IPI a royalty equal to 6% of the Net Sales, on a product-by-product, country-by-country basis, while and to the extent that the Compound or the Product is Covered by any IPI Patent (the “Royalty”, and together with the Initial Payment and the Milestone Payment, collectively, the “Consideration”), provided, however, that the Royalty shall be automatically, without action of any Party, reduced to 2% of the Net Sales if the Compound and/or the Product are not Covered by any IPI Patent or are otherwise Covered by a Joint Patent under Section 8.1(c). 
 
(d) Royalty Reduction. Upon request of ALFASIGMA, the Parties acting in good faith shall negotiate a reduction of the Royalty rate set forth in Section 6.1(c), on a country-by-country and Product-by-Product basis, under general equitable standards, if following the entry into the market of any country of the ALFASIGMA Territory of a generic version of the Product by a Third Party (as determined by a reliable data source that is reasonably satisfactory to the Parties), the Product is no longer competitive in such market due to the then applicable Royalty rate. When negotiating a reduction to the applicable Royalty rate in accordance with this Section 6.1(d), the Parties shall use Commercially Reasonable Efforts to proportionately share equally the economic loss associated with any reduction in revenue, profitability, margins or similar financial metric, resulting from the entry of the generic version of the Product in the applicable country. For clarity, the term “generic version” is intended to refer to the entry of a true-generic version of the Product by a Third Party, and not merely a product competitive to the Product.
  	 
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ARTICLE VII
 
Payments, Records & Audits
 
7.1 Manner of Payment. (a) The Consideration payable by ALFASIGMA to IPI hereunder shall be made in U.S. Dollars by wire transfer of immediately available funds to such bank account as shall be designated in writing by IPI from time to time.
 
(b) The Initial Payment and any Milestone Payments to be made by ALFASIGMA under this Agreement shall be paid within ten (10) Business Days from the date of receipt of the invoice issued by IPI to ALFASIGMA.
 
(c) Any Royalty payment to be made by ALFASIGMA under this Agreement shall be calculated and reported by ALFASIGMA to IPI pursuant to Section 7.2, within thirty (30) days from the end of each Calendar Quarter, and shall be paid within forty five (45) days from the date of receipt of the invoice issued by IPI to ALFASIGMA.
 
7.2 Sales Reports. ALFASIGMA shall deliver to IPI within thirty (30) days from the end of each Calendar Quarter a Royalty report which will detail on a product-by-product basis: (a) Net Sales in the applicable Calendar Quarter, including an itemized calculation of any relevant Net Sales Deductions, provided, however, that if any accrued Net Sales Deductions are subsequently reduced or increased, and adjustments thereof will be accounted for in the Calendar Quarter following the Calendar Quarter in which any such reduction or increase occurs; and (b) a calculation of the amount of the Royalty payment due on such Net Sales during the applicable Calendar Quarter.
 
7.3 Financial Records. ALFASIGMA will maintain records as are reasonably required to determine, in accordance with this Agreement, Net Sales (including, for clarity, Net Sales of Affiliates and Sublicensees) and Royalties due under this Agreement. ALFASIGMA will maintain such records until the later of (a) three (3) years after the end of the period to which such records pertain, (b) the expiration of the applicable tax statute of limitations (or any extensions thereof), or (c) such longer period as may be required under the Law.
 
7.4 Currency Conversion; Remittance. All payments due hereunder shall be converted into U.S. Dollars using the average conversion rate for the relevant period as reported by Reuters Ltd (at http://reuters.com/finance/currencies/quote) on the last Business Day of the relevant period.
 
7.5 Late Payments. If any undisputed payment due to IPI pursuant to this Agreement is not made when due, the payment shall accrue interest from the date due until the actual date of payment at the rate of four percentage points above the U.S. Prime Rate (as published in The Wall Street Journal, Eastern Edition); provided that in no event shall such rate exceed the maximum legal annual interest rate. The payment of such interest shall not limit IPI from exercising any other rights it may have as a consequence of the lateness of any payment.
  	 
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7.6 Audits. IPI will have the right, at its own expense, to have a nationally recognized, independent, certified public accounting firm selected by it to review any such records of ALFASIGMA and its Affiliates (the “Audited Party”) in the location(s) where such records are maintained by the Audited Party upon reasonable written notice (which shall be no less than thirty (30) days’ prior written notice) and during regular business hours and under obligations of strict confidence, for the purpose of verifying the basis and accuracy of payments made under Sections 6.1 within the twenty-four (24) month period preceding the date of the request for review. The Parties agree that IPI shall not be granted the right to audit the Sublicensees, and ALFASIGMA will remain liable for the performance of the obligations of such Sublicensees pursuant to Section 2.2(c). An audit under this Section 7.6 shall not occur more than once in any Calendar Year; provided, that the foregoing limitation shall not limit IPI from conducting additional audits in the event that IPI should “have cause” to reasonably believe that this Agreement has been breached or that the initial audit was flawed on the basis of the materials provided to the auditors. Should such inspection lead to the discovery of a discrepancy to IPI’s detriment, ALFASIGMA will, within ten (10) Business Days after the conclusion of such inspection, pay any undisputed amount of the discrepancy together with interest at the rate set forth in Section 7.5. IPI will pay the full cost of the review unless the underpayment of amounts due to IPI is greater than five percent (5%) of the amount due for the entire period being examined, in which case ALFASIGMA will pay the reasonable cost of such review. Any undisputed overpayment of Royalties by ALFASIGMA revealed by an examination will be paid by IPI within ten (10) Business Days of the conclusion of such inspection. In no event will IPI be responsible for late payment of withholding taxes related thereto, and ALFASIGMA shall indemnify and hold IPI harmless for any such late payment of withholding taxes.
 
7.7 Tax Withholding. (a) All payments by ALFASIGMA under this Agreement shall be made without any deduction or withholding on account of any tax by ALFASIGMA unless such deduction or withholding is required by the Law to be assessed against IPI. If ALFASIGMA is so required to make any deduction or withholding from payments due to IPI under this Agreement, then ALFASIGMA shall (i) promptly notify IPI of such requirement, (ii) pay to the relevant authorities on the IPI’s behalf the full amount required by Law to be deducted or withheld promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed against IPI, (iii) promptly forward to IPI an official receipt (or certified copy) or other documentation reasonably acceptable to IPI evidencing such payment to such authorities, and (iv) make such payment to IPI (1) reduced by the full amount on account of any such tax, and (2) with respect solely to the Initial Payment and the Milestone Payments, increased by an amount up to 8% on account of any such tax (the amount equal to any such increase, the “Withholding Tax Gross-Up”). 
 
(b) The Parties will take all reasonable and lawful steps to minimize the amount of any tax payable under Section 7.7(a), and IPI (i) shall use Commercially Reasonable Efforts to enforce its rights under the Law to obtain a tax credit or refund arising from the payment by ALFASIGMA of any such tax on the IPI’s behalf, and (ii) after obtaining the benefit of the tax credit or refund, promptly reimburse to ALFASIGMA the corresponding amount of the Withholding Tax Gross-Up by wire transfer of immediately available funds. 
  	 
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7.8 VAT. All payments due to IPI from ALFASIGMA pursuant to this Agreement shall be paid exclusive of any goods and services tax (“VAT”) required to be paid by ALFASIGMA to tax authorities in the ALFASIGMA Territory (which, if applicable, shall be payable by ALFASIGMA upon receipt of a valid VAT invoice). If ALFASIGMA is required to withhold and/or IPI is required to report any such tax, ALFASIGMA shall promptly provide IPI with applicable receipts evidencing payment of such tax and other documentation reasonably requested by IPI. For the avoidance of doubt, ALFASIGMA shall be responsible for all VAT or other taxes payable by it in respect of any payment under this Agreement.
 
7.9 No Offset. If any matter with respect to which ALFASIGMA or IPI, as the case may be, may be able to assert a claim is pending or unresolved at the time that any payment is due from the paying Party to the non-paying Party under this Agreement or otherwise, the paying Party shall have no right to offset, deduct, counterclaim or otherwise withhold from such payment any amount with respect to any such pending or unresolved claims, whether or not such claims arise out of or relate to this Agreement or any other matter. 
 
ARTICLE VIII
 
Intellectual Property
 
8.1 Ownership of Know-How and Patent Rights. (a) If ALFASIGMA generates New IP, any such New IP shall belong exclusively to ALFASIGMA, pursuant to the terms and conditions of this Agreement.
 
(b) If IPI generates New IP regarding the Compound, any such New IP shall belong exclusively to IPI and will be part of the License granted to ALFASIGMA solely to the extent necessary for the Indication, pursuant to the terms and conditions of this Agreement. 
 
(c) If IPI and ALFASIGMA generate Joint IP and/or Joint Patents related to the Compound and/or the Product in the Indication, the ownership of any such Joint IP and/or Joint Patents shall be equally shared by the Parties. Except as otherwise expressly set forth hereunder, neither Party shall license or otherwise Commercially exploit any Joint IP and/or Joint Patent anywhere in the world without the prior written consent of the other Party.
 
8.2 Prosecution and Maintenance. (a) IPI shall use Commercially Reasonable Efforts to prepare, file, prosecute and maintain, at its own cost and expense, the IPI Patents in the ALFASIGMA Territory. ALFASIGMA shall prepare, file, prosecute and maintain, at its own cost and expense, the ALFASIGMA Patents in the ALFASIGMA Territory. Parties shall keep each other reasonably informed of the status of such Patent Rights in the ALFASIGMA Territory. Without prejudice to the generality of the foregoing, in the event that IPI decides to abandon or discontinue the filing, prosecution or maintenance, in whole or in part, of any of the IPI Patents (including decisions relating to interference, opposition, revocation, reexamination and similar proceedings), it shall provide prompt written notice to ALFASIGMA. In such case ALFASIGMA may elect to continue the maintenance or prosecution of such IPI Patents at its cost and expense.
  	 
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(b) The Parties shall discuss in good faith, and thereupon implement, a mutually agreeable patent strategy with respect to the Joint Patents and/or the Joint IP that may be patentable related to the Compound and/or the Product in the Indication, and the following provisions shall: (i) with respect to the Joint Patents and the Joint IP for which the Parties agree that patent prosecution should be sought, the Parties shall cooperate in the preparation, filing and prosecution of patent applications (including provoking, instituting or defending interference, opposition, revocation, reexamination, derivation, and similar proceedings related to the Joint Patents), and shall discuss and agree in good faith on the content and form of relevant patent applications and any other relevant matters before such applications are made; (ii) each Party shall consider in good faith any comments from the other Party regarding steps to be taken to strengthen any Joint Patent; and (iii) all costs and expenses incurred to prosecute and maintain the Joint Patents (including as a result of provoking, instituting or defending interference, opposition, revocation, reexamination and similar proceedings related to the Joint Patents) shall be equally borne by the Parties. 
 
8.3 Enforcement. Each Party will notify the other promptly in writing when any Infringement of any IPI or ALFASIGMA Patent or IPI or ALFASIGMA Know-How by a Third Party is uncovered or reasonably suspected in the ALFASIGMA Territory. Each Party shall have the obligation to use commercially reasonable efforts to enforce its own Patents and institute suit against any such Infringer or alleged Infringer and control and defend such suit in ALFASIGMA Territory. Parties shall reasonably cooperate in any such litigation, including by joining any such suit as a party if required under the Law. If a Party, using its commercially reasonable efforts determines not to enforce its own Patents and institute suit, as provided above, then the other Party shall have the right to do so.
 
8.4 Progress Reports. The Party initiating or defending any enforcement action described in Section 8.3 shall keep the other Party reasonably informed of the progress of any such enforcement action, and the other Party shall have the right to participate in such action with counsel of its own choice and at its sole expense. Each Party shall ensure full and complete support of the other Party wherever required.
 
8.5 Expenses; Recovery. Subject to Section 8.4, the Party initiating or defending any such enforcement action shall bear the costs and expenses of any enforcement action described in Section 8.3 and shall be entitled to any recovery resulting from any such enforcement action; provided, that if the recovery of ALFASIGMA includes the grant of sublicenses to any Third Party, then such Third Party shall thereafter be a Sublicensee for all purposes of this Agreement.
 
8.6 Defense. If either (a) the Product Developed, Manufactured or Commercialized by or under authority of ALFASIGMA becomes the subject of a Third Party’s claim or assertion of Infringement of a patent relating to the Development, Manufacture or Commercialization of the Compound or Product in the Indication in the ALFASIGMA Territory, or (b) a declaratory judgment action is brought naming either Party as a defendant and alleging invalidity of any of the IPI Patents, the Party first having notice of the claim or assertion shall promptly notify the other Party, and the Parties shall promptly confer to consider the claim or assertion and the appropriate course of action. Unless the Parties otherwise agree in writing, each Party shall have the right to defend itself against a suit that names it as a defendant (the “Defending Party”). The Defending Party shall be entitled to enter into any settlement of any claim described in this Section 8.6 in a manner that would not adversely affect the rights or interests of the other Party, without the prior written consent of such Party. In any event, the other Party shall reasonably assist the Defending Party and cooperate in any such litigation at the Defending Party’s reasonable request and expense.
  	 
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8.7 Patent Marking. ALFASIGMA will mark, and will cause its Affiliates and Sublicensees to mark, the Product with all IPI Patents in accordance with the Law, which marking obligation will continue for as long as required under the Law.
 
8.8 Patent Challenge. (a) For the avoidance of doubt, the provisions under Section 8.3, Section 8.4, Section 8.5 and Section 8.6 shall apply in respect of challenges by a Third Party of the validity or enforceability of the IPI Patents as though such challenge of the validity or enforceability of such IPI Patents constituted an Infringement of such IPI Patents.
 
(b) IPI will be permitted to terminate this Agreement upon written notice to ALFASIGMA, effective upon receipt, if ALFASIGMA or any of its Sublicensees or Affiliates, directly or indirectly, (i) initiate or request an interference or opposition proceeding with respect to, (ii) make, file or maintain any claim, demand, lawsuit or cause of action to challenge the validity or enforceability of, or (iii) oppose any extension of, or the grant of a supplementary protection certificate with respect to, any IPI Patent.
 
ARTICLE IX
 
Representations & Warranties & Certain Covenants
 
9.1 Mutual Representations and Warranties. Each of IPI and ALFASIGMA represents and warrants to the other that:
 
(a) it is duly organized and validly existing under the Law of the jurisdiction of its incorporation, and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;
 
(b) it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the individual executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action; and
 
(c) this Agreement is legally binding upon it and enforceable in accordance with its terms, and execution, delivery and performance of this Agreement by it do not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any Law.
 
9.2 IPI Representations and Warranties. IPI represents and warrants to ALFASIGMA that as of the Effective Date:
 
(a) IPI is the sole owner or exclusive licensee of the entire right, title and interest in and to the IPI Patents and the IPI Know-How, free and clear of any liens, claims, encumbrances, restrictions and other legal or equitable claims of any kind or nature; a true and complete list of the IPI Patents as of the Effective Date is set forth in Exhibit A hereto
  	 
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(b) IPI has the right to grant to ALFASIGMA the rights and licenses set forth in this Agreement;
 
(c) except as set forth in Exhibit G, IPI has not entered into any agreement prior to the Effective Date that would require IPI to pay any royalties to a Third Party licensor pursuant as a result of the Development, Manufacturing and Commercialization of the Compound and/or the Product in the Indication by ALFASIGMA, its Affiliates or its Sublicensees under the IP owned and/or Controlled by IPI in the ALFASIGMA Territory.
 
(d) IPI, to its best knowledge, is not aware of any Infringement by a Third Party of any of the IPI Patents;
 
(e) as of the Effective Date, (i) the IPI Patents exist and are pending, and (ii) IPI has not received notification of any pending or written threatened claims, judgments or settlements asserted against IPI relating to the IPI Patents;
 
(f) as of the Effective Date, IPI has conducted all preclinical and clinical studies for the Compound and the Manufacturing of the Compound, in all material respects accordance with (i) all Laws, (ii) the published standards of any applicable Regulatory Authorities in the ALFASIGMA Territory, and (iii) the scientific standards applicable to the conduct of such studies and activities in the ALFASIGMA Territory, including current good laboratory practice and GCP. Neither IPI, nor any officer, employee or agent of IPI, has made an untrue statement of a material fact to any Regulatory Authority with respect to the Compound (whether in any submission to such Regulatory Authority or otherwise), nor knowingly failed to disclose a material fact required to be disclosed to any Regulatory Authority with respect to the Compound;
 
(g) To the best of its knowledge, IPI has not used in any capacity, in connection with its Development of the Compound, any Person who has been debarred pursuant to Section 306 of the FD&C Act (or similar Law outside of the U.S.), or who is the subject of a conviction described in such section to the knowledge of IPI. 
 
9.3 ALFASIGMA Covenants. ALFASIGMA covenants to IPI that:
 
(a) it will conduct, and will cause its contractors to conduct, all preclinical and clinical studies for the Product and the manufacturing of the Product, in accordance with (i) all Laws, (ii) the published standards of any applicable Regulatory Authorities in the ALFASIGMA Territory, and (iii) the scientific standards applicable to the conduct of such studies and activities in the ALFASIGMA Territory, including current good laboratory practice and GCP. Neither ALFASIGMA, nor any officer, employee or agent of ALFASIGMA, will make an untrue statement of a material fact to any Regulatory Authority with respect to the Compound or the Product (whether in any submission to such Regulatory Authority or otherwise), nor knowingly fail to disclose a material fact required to be disclosed to any Regulatory Authority with respect to the Compound or Product; 
 
(b) it shall not use in any capacity, in connection with its Development of the Product hereunder, any Person who has been debarred pursuant to Section 306 of the FD&C Act (or similar Law outside of the U.S.), or who is the subject of a conviction described in such section to the knowledge of ALFASIGMA, and ALFASIGMA shall inform IPI in writing immediately if it or any Person who is performing services for ALFASIGMA hereunder is debarred or is the subject of a conviction described in Section 306 (or similar Law outside of the U.S.), or if any action, suit, claim, investigation or legal administrative proceeding is pending or, to ALFASIGMA’s knowledge, is threatened, relating to the debarment of ALFASIGMA or any Person used in any capacity by ALFASIGMA in connection with its Development of the Product hereunder; 
  	 
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(c) during the Term, ALFASIGMA shall not, and shall cause its Affiliates not to, directly or indirectly, develop, manufacture, market, promote, import, export, or sell, or assist any Third Party, directly, to develop, manufacture, market, promote, import, export, or sell in the ALFASIGMA Territory, any generic version of the Product without the prior written consent of IPI (collectively, “Competing Activities”); and 
 
(d) in connection with the performance and exercise of its rights and obligations under this Agreement, it will comply with all Laws in the ALFASIGMA Territory and will also comply with USFCPA and all applicable Anti-Corruption Laws. Without limiting the foregoing, neither ALFASIGMA nor any of its directors, officers, employees or agents will, directly or indirectly, make, offer, promise, authorize, solicit or accept any unlawful payment, kickback, gift, rebate, or other thing of value to, from, or for the benefit of any Person to obtain or retain business for or with, or to direct business to, any Person.
 
9.4 IPI Covenants. IPI covenants to ALFASIGMA that:
 
(a) it shall at all times provide to ALFASIGMA all the Know-How owned or Controlled by and reasonably available to IPI as required under this Agreement. IPI shall provide reasonable assistance to ALFASIGMA in the process of technology transfer. IPI agrees that the technology transfer shall be completed within one (1) year or earlier from the Effective Date;
 
(b) subject to Section 2.6, it shall at all times supply the Compound to ALFASIGMA with timing as specified in Exhibit D and as per the supply terms agreed by the Party. In the event, there are some vendor problems faced by IPI for Compound, then IPI shall notify ALFASIGMA well in advance and allow ALFASIGMA to work together with IPI to find a replacement supplier, without prejudice to any right or remedy of ALFASIGMA under this Agreement or the Law; and
 
(c) during the Term, IPI shall not, and shall cause its Affiliates not to, directly or indirectly, or assist any Third Party, directly, to carry out any Competing Activities, under Section 9.3(c) which shall apply mutatis mutandis to IPI, without the prior written consent of ALFASIGMA. 
 
9.5 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS ARTICLE IX (REPRESENTATIONS AND WARRANTIES; COVENANTS), NEITHER IPI NOR ALFASIGMA MAKES ANY REPRESENTATIONS OR EXTEND ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, QUALITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, OR VALIDITY OF PATENT CLAIMS. NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY (I) IPI THAT IPI WILL BE SUCCESSFUL IN OBTAINING ANY PATENT RIGHTS, OR THAT ANY PATENTS WILL ISSUE BASED ON A PENDING APPLICATION, AND (II) ALFASIGMA THAT ALFASIGMA WILL BE SUCCESSFUL IN COMPLETING THE DEVELOPMENT OF THE PRODUCT OR OBTAINING ANY REGULATORY APPROVAL.
 
	 
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ARTICLE X
 
Confidentiality
 
10.1 Definition. “Confidential Information” means all Know-How and other information, materials and data, which the disclosing Party or any of its Affiliates has supplied or otherwise made available to the other Party or its Affiliates hereunder, whether made available orally, in writing or in electronic or other form, including information comprising or relating to concepts, discoveries, inventions, ideas, data, designs or formulae, and which either (a) based on all relevant circumstances, should reasonably be understood to be confidential and proprietary, or (b) is marked or identified as confidential or proprietary. For clarity, any information or materials made available by either Party to the other Party via the shared drive established by the Party shall constitute the Confidential Information of that Party. 
 
10.2 Confidentiality Obligations. During the Term and for a period of five (5) years after termination of this Agreement (and indefinitely with respect to any Confidential Information that constitutes a trade secret), each Party agrees to keep in confidence and not to disclose to any Third Party, or use for any purpose, except pursuant to, and in order to carry out, the terms and objectives of this Agreement or as otherwise specifically permitted under this Agreement, any Confidential Information of the other Party. The terms of this Agreement will be considered Confidential Information of both Parties, subject to permitted disclosures as set forth in this Article X. The restrictions on the disclosure and use of Confidential Information set forth in this Article X will not apply to any Confidential Information that:
 
(a) was known by the receiving Party prior to disclosure by the disclosing Party hereunder (as evidenced by the receiving Party’s written records or other competent evidence);
 
(b) is or becomes part of the public domain through no fault of the receiving Party or its Affiliates or Sublicensees;
 
(c) is disclosed to the receiving Party by a Third Party having a legal right to make such disclosure without violating any confidentiality or non-use obligation that such Third Party has to the disclosing Party and provided such Third Party is not disclosing such information on behalf of the disclosing Party; or
 
(d) is independently developed by personnel of the receiving Party who did not have access to the Confidential Information (as evidenced by the receiving Party’s written records or other competent evidence).
 
In addition, if either Party is required to disclose Confidential Information of the other Party by regulation, the Law or legal process, including by the rules or regulations of the United States Securities and Exchange Commission or similar regulatory agency in a country other than the United States or of any stock exchange, such Party shall provide prior written notice and a copy of such intended disclosure to such other Party if possible under the circumstances, will consider in good faith the other Party’s comments, will disclose only such Confidential Information of such other Party as is required to be disclosed and will cooperate in the disclosing Party’s efforts to obtain a protective order or to limit the scope of the required disclosures. Notwithstanding anything in this Agreement to the contrary, either Party may disclose to bona fide potential or existing investors or lenders, potential acquirers/acquirees, and such Party’s consultants and advisors, the existence and terms of this Agreement to the extent necessary in connection with a proposed equity or debt financing of such Party, or a proposed acquisition or business combination or similar transaction, so long as such recipients are bound in writing to maintain the confidentiality of such information.
  	 
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10.3 Permitted Disclosures. Each Party agrees that it and its Affiliates will provide or permit access to Confidential Information received from the other Party and such Party’s Affiliates and representatives only to the receiving Party’s employees, agents, consultants, Affiliates, advisors, contractors, potential and existing Sublicensees and distributors, in each case who, in such Party’s reasonable judgment, have a need to know such Confidential Information to assist the receiving Party with the activities contemplated by this Agreement, and who are subject to obligations of confidentiality and non-use with respect to such Confidential Information at least as restrictive as the obligations of confidentiality and non-use of the receiving Party under this Article X. Each Party shall remain responsible for any failure by its Affiliates, and its and its Affiliates’ respective employees, agents, consultants, advisors, contractors, Sublicensees and distributors, to treat such Confidential Information as required under this Article X.
 
10.4 Return/Destruction of Materials. Upon expiration or early termination of this Agreement for any reason, each Party and its Affiliates and Sublicensees shall immediately return to the other Party or destroy all Confidential Information of the other Party and its Affiliates in such Party’s possession, except for one copy which may be retained in the recipient Party’s confidential files for archival purposes.
 
10.5 Publicity. The Parties agree not to (and to ensure that their respective Affiliates do not) issue any press releases or public announcements concerning this Agreement or the transactions contemplated hereby without the prior written consent of the other Party (which shall not be unreasonably withheld or delayed), except as required by the Law (including the rules and regulations of any stock exchange or trading market on which a Party’s (or its parent entity’s) securities are traded); provided, that the Party intending to disclose such information shall use reasonable efforts to provide the other Party with advance notice of such required disclosure, and an opportunity to review and comment on such proposed disclosure (which comments shall be considered in good faith by the disclosing Party). Notwithstanding the foregoing, a press release acceptable to and approved by both Parties will be issued upon signing of this Agreement. In addition, without prior submission to or approval of the other Party, either Party may issue press releases or public announcements which incorporate information concerning this Agreement which information was included in a press release or public disclosure which was previously disclosed under the terms of this Agreement or which contains only non-material factual information regarding this Agreement. Notwithstanding the above, IPI may issue an SEC filing and accompanying press release concerning this Agreement once fully executed with text to be approved at the time of signature of this Agreement by both parties.
 
10.6 Publication. (a) Prior to ALFASIGMA or its Affiliates publishing, publicly presenting and/or submitting for written or oral publication a manuscript, abstract or the like that refers to the Compound or Product or includes data resulting from ALFASIGMA’s Development of the Product under this Agreement, ALFASIGMA or its Affiliates shall provide IPI a copy thereof for its review at least thirty (30) days prior to the proposed date of the publication (unless such Party is required by law to publish such information sooner). ALFASIGMA shall consider in good faith any comments provided by IPI during such thirty (30) day period. With respect to publications submitted by or on behalf of a ALFASIGMA’s Sublicensees, or academic institutions and investigators cooperating with ALFASIGMA, its Affiliates or its Sublicensees in carrying out the Development of the Product, ALFASIGMA shall (a) provide IPI, from time to time, with a publication strategy plan and (b) a copy of said publications or material presentations intended to be given to a public international audience for IPI’s information reasonably within a thirty (30) days prior to the proposed date of the publication. IPI shall have the right to make comments and suggest changes to any such plan and/or publication during such thirty (30) day period, and ALFASIGMA shall consider in good faith any such comments and suggested changes. 
 
(b) Prior to IPI or its Affiliates publishing, publicly presenting and/or submitting for material presentations, written or oral publication a manuscript, abstract or the like, with respect to the Compound (to the extent involving the Product) or Product, the provisions of Section 10.6(a) shall apply mutatis mutandis.
  	 
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10.7 Relationship to the Confidentiality Agreement. This Agreement supersedes that certain Confidentiality Agreement by and between the Parties dated May 7, 2019; provided, however, that all “Confidential Information” disclosed or received by the Parties thereunder will be deemed “Confidential Information” hereunder and will be subject to the terms and conditions of this Agreement. 
 
ARTICLE XI
 
Term & Termination
 
11.1 Term. This Agreement shall commence as of the Effective Date and, unless sooner terminated in accordance with the terms hereof or by mutual written consent, shall continue on a Product-by-Product and country-by-country basis, until the expiration of the Royalty Term (the “Term”). 
 
11.2 Termination by IPI for ALFASIGMA’s Material Breach. IPI will have the right to terminate this Agreement with immediate effect upon delivery of written notice to ALFASIGMA in the event of any ALFASIGMA Material Breach; provided, however, that such termination will not be effective if such Material Breach has been cured within sixty (60) days after written notice thereof is given by IPI to ALFASIGMA specifying the nature of the alleged breach. 
 
11.3 Termination by ALFASIGMA for IPI’s Material Breach. ALFASIGMA will have the right to terminate this Agreement with immediate effect upon delivery of written notice to IPI in the event of any IPI Material Breach; provided, however, that such termination will not be effective if such Material Breach has been cured within sixty (60) days after written notice thereof is given by ALFASIGMA to IPI specifying the nature of the alleged Material Breach.
 
11.4 Termination by the Parties. (a) Either Party will have the right to terminate this Agreement with immediate effect upon delivery of written notice to the other Party in the event of breach of any material provision hereof; provided, however, that such termination will not be effective if such material breach has been cured within sixty (60) days after written notice thereof is given by the non-breaching Party to the breaching Party specifying the nature of the alleged material breach. 
 
(b) Either Party may terminate this Agreement immediately, by providing a written notice to the other Party, if, at any time, any Insolvency Event occurs in relation to the other Party.
 
(c) Either Party may terminate this Agreement, on a Product-by-Product and country-by-country basis, by providing a written notice of thirty (30) days to the other Party, if, at any time, the Regulatory Authority in the ALFASIGMA Territory puts a permanent ban or prohibition on the manufacture, marketing or sale of the Product in the ALFASIGMA Territory or otherwise permanently removes the Product from the market, in each case pursuant to a an irrevocable and unappealable decision of such Regulatory Authority.
  	 
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11.5 Termination Without Cause by ALFASIGMA. ALFASIGMA may terminate all development activities and this Agreement without cause at any time by giving 60 days’ prior written notice to IPI; provided, however, that, (i) ALFASIGMA’s exercise of such termination will not result in any financial, indemnification or any other termination penalty or compensation owed to IPI as it relates to such termination, and (ii) ALFASIGMA will return and/or transfer to IPI all Background IP and/or the New IP generated by or on behalf of ALFASIGMA under this Agreement. 
 
11.6 Effects of Termination due to ALFASIGMA’s Material Breach. Upon early termination of this Agreement by IPI under Section 11.2 or Section 11.4(a): 
 
(a) ALFASIGMA will responsibly wind-down, in accordance with accepted pharmaceutical industry norms and ethical practices, any on-going clinical studies for which it has responsibility hereunder in which patient dosing has commenced or, if reasonably practicable and requested by IPI, ALFASIGMA shall, and shall cause its Affiliates and Sublicensees to, complete such trials, or if requested by IPI, transition such clinical studies to IPI. ALFASIGMA will be responsible for any costs associated with such wind-down. 
 
(b) All sublicenses granted by ALFASIGMA pursuant to Section 2.2 will automatically terminate.
 
(c) All rights and licenses granted by IPI to ALFASIGMA in Article II will terminate, and ALFASIGMA and its Affiliates and Sublicensees will cease all use of IPI Know-How and IPI Patents. In such event ALFASIGMA shall have the right to sell the semi-finished and finished Products available in stock with ALFASIGMA as on that date of termination.
 
(d) All rights and licenses related to Product in the ALFASIGMA Territory shall immediately revert to IPI or to an Affiliate or Third Party designated by IPI (each, a “Designee”). 
 
(e) All Marketing Approvals and other regulatory filings, documents and communications relating to the Product owned (in whole or in part) or otherwise controlled by ALFASIGMA or its Affiliates or Sublicensees (except Product Trademarks and Product Trade Dress of ALFASIGMA), as such items exist as of the effective date of such termination (including all related completed and ongoing clinical studies), will be assigned or transferred to IPI or its Designee, at ALFASIGMA’s expense, and ALFASIGMA will provide to IPI or its Designee one (1) copy of each of the foregoing and all documents contained in or referenced in any such items, together with the raw and summarized data for any clinical studies (and where reasonably available, electronic copies thereof). In the event of any failure to complete such assignment, ALFASIGMA hereby consents and grants to IPI the right to access and reference (without any further action required on the part of ALFASIGMA, whose authorization to file this consent with any Regulatory Authority is hereby granted) any of the foregoing items.
 
(f) ALFASIGMA hereby grants to IPI and its Affiliates, and IPI and its Affiliates will automatically have, a worldwide, perpetual and irrevocable, royalty-free and fully paid-up, non-exclusive license, with the right to grant sublicenses through multiple tiers, under Know-How and Patent Rights that are Controlled by ALFASIGMA or any of its Affiliates and their respective Sublicensees that are reasonably necessary or useful to Develop, Manufacture or Commercialize the Product (such license effective only as of and after the effective date of such termination).
  	 
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(g) ALFASIGMA agrees (and shall cause its Affiliates and Sublicensees to so agree) to fully cooperate with IPI and its Designee(s) as reasonably necessary or useful to facilitate a smooth, orderly and prompt transition of the Development and Commercialization of the Compound and/or the Product in the ALFASIGMA Territory to IPI and/or its Designee(s). 
 
(h) ALFASIGMA shall transfer to IPI, without any consideration payable to ALFASIGMA or its Affiliates, ownership of ALFASIGMA Joint IP and Joint Patents related to the Compound and/or the Product.
 
11.7 Effects of Termination due to IPI Material Breach. Upon early termination of this Agreement by ALFASIGMA under Section 11.3 or Section 11.4(a): 
 
(a) IPI shall, in accordance with ALFASIGMA instruction, (i) assign to ALFASIGMA, a right to order the Compound directly from the then existing Third Party Manufacturer of the Compound for use in the Indication in the ALFASIGMA Territory and (ii) deliver to ALFASIGMA one (1) electronic copy of any tangible embodiments of the technology to Manufacture the Compound without payment of any consideration to IPI. To be clear, this Section 11.7(a)(ii) will only apply in the case of an IPI Material Breach.
 
(b) All sublicenses granted by ALFASIGMA pursuant to Section 2.2 will survive the termination and continue in full force and effect.
 
(c) All rights and licenses granted by IPI to ALFASIGMA in Article II will survive the termination and continue in full force and effect.
 
(d) ALFASIGMA, its Affiliates and Sublicensees will retain and be entitled to continue to use the IPI Confidential Information, IPI Know-How, IPI Patents, and New IP owned and/or Controlled by IPI as related to the Compound and/or the Product specifically limited for use in the Indication.
 
(e) IPI shall transfer to ALFASIGMA, without any consideration payable to IPI or its Affiliates, the quota ownership of IPI of the Joint IP and Joint Patents related to the Compound and/or the Product.
 
(f) All Marketing Approvals and other regulatory filings, documents and communications relating to the Product owned (in whole or in part) or otherwise controlled by ALFASIGMA or its Affiliates or Sublicensees, as such items exist as of the effective date of such termination (including all related completed and ongoing clinical studies), shall continue to be owned by ALFASIGMA. 
 
(g) ALFASIGMA shall continue to use and own the rights which ALFASIGMA possesses under Know-How and Patent Rights that are Controlled by ALFASIGMA or any of its Affiliates and their respective Sublicensees that are necessary or useful to Develop, Manufacture or Commercialize the Compound and /or the Product in the ALFASIGMA Territory.
 
(h) Any obligation of ALFASIGMA to pay any Consideration under this Agreement shall automatically terminate.
  	 
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11.8 Effects of Termination without cause by ALFASIGMA. Upon termination of this Agreement pursuant to Section 11.5 the provisions of Section 11.6 shall apply.
 
11.9 Survival. The following provisions will survive termination or expiration of this Agreement: Section 8.2(a), Section 10.2, Section 11.6, Section 11.7, Section 11.8, Article XII and Section 13.3. Termination or expiration of this Agreement will not relieve either Party of any liability or obligation which accrued hereunder prior to the effective date of such termination or expiration nor preclude either Party from pursuing all rights and remedies it may have hereunder or at Law or in equity with respect to any breach of this Agreement. 
 
11.10 License Survival During Bankruptcy. All rights and licenses granted under or pursuant to this Agreement by IPI to ALFASIGMA are, and shall otherwise be deemed to be, for purposes of Paragraph 365(n) of the United States Bankruptcy Code, licenses of rights to “intellectual property” as defined under Paragraph 101(35A) of the United States Bankruptcy Code. The Parties agree that, in the event of the commencement of a bankruptcy proceeding by or against IPI, including under the United States Bankruptcy Code, ALFASIGMA shall retain and may fully exercise all of its rights and elections under the United States Bankruptcy Code or any similar provision of law of any jurisdiction outside the United States, subject to performance by ALFASIGMA of its obligations under this Agreement. The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against IPI, including under the United States Bankruptcy Code, ALFASIGMA shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property, if not already in ALFASIGMA’s possession, and that such materials shall be promptly delivered to ALFASIGMA upon any such commencement of a bankruptcy proceeding upon written request therefor by ALFASIGMA.
 
ARTICLE XII
 
Indemnification
 
12.1 Indemnity. 
 
(a) Indemnification by IPI. IPI agrees to defend, indemnify and hold ALFASIGMA, its Affiliates, its Sublicensees and their respective directors, officers, employees and agents (the “ALFASIGMA Indemnified Parties”) harmless from and against any claims, losses, costs, damages, fees or expenses (including reasonable legal fees and expenses) (collectively, “Losses”) resulting from any Third Party claim (including product or Compound liability claims or claims related to the technology transferred) arising out of or resulting from (i) the negligence or willful misconduct of IPI, or its Affiliates, or the Third Party Manufacturer in connection with the performance of its obligations hereunder, (ii) the IPI Material Breach, (iii) the breach by IPI of its representations and warranties set forth in this Agreement, or (iv) death or personal injury due to Compound Manufactured by IPI, or its Affiliates, or the Third Party Manufacturer; except, in each case, to the extent such Losses result from the circumstances described in clause (i), (ii) or (iii) of Section 12.1(b). In the event of any such claim against the ALFASIGMA Indemnified Parties by a Third Party, ALFASIGMA shall promptly notify IPI in writing of the claim (provided, however, that any failure or delay to notify shall not excuse any obligations of IPI except to the extent IPI is actually prejudiced thereby) and IPI shall in consultation with ALFASIGMA, manage and control, at its sole expense, the defense of the claim and its settlement; provided, however, that IPI shall not settle any such claim without the prior written consent of ALFASIGMA if such settlement does not include a complete release from liability of the ALFASIGMA Indemnified Parties or if such settlement would involve the undertaking of any obligation by any ALFASIGMA Indemnified Party, would bind or impair any ALFASIGMA Indemnified Party, or includes any admission of wrongdoing by any ALFASIGMA Indemnified Party. The ALFASIGMA Indemnified Parties shall cooperate with IPI and may, at their sole option and expense, be represented in any such action or proceeding by counsel of their own choosing.
  	 
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(b) Indemnification by ALFASIGMA. ALFASIGMA agrees to defend, indemnify and hold IPI and its Affiliates and their respective directors, officers, employees and agents (the “IPI Indemnified Parties”) harmless from and against any Losses resulting from any Third Party claim (including product liability claims) arising out of or resulting from (i) the negligence or willful misconduct of ALFASIGMA, its Affiliates, or Sublicensees, in connection with the performance of its obligations hereunder, (ii) the ALFASIGMA Material Breach, or (iii) the breach by ALFASIGMA of its representations and warranties set forth in this Agreement; except, in each case, to the extent such Losses result from the circumstances described in clause (i), (ii), (iii) or (iv) of Section 12.1(a). In the event of any such claim against the IPI Indemnified Parties by a Third Party, IPI shall promptly notify ALFASIGMA in writing of the claim (provided, however, that any failure or delay to notify shall not excuse any obligation of ALFASIGMA except to the extent ALFASIGMA is actually prejudiced thereby) and ALFASIGMA shall solely manage and control, at its sole expense, the defense of the claim and its settlement; provided, however, that ALFASIGMA shall not settle any such claim without the prior written consent of IPI if such settlement does not include a complete release from liability of the IPI Indemnified Parties or if such settlement would involve the undertaking of any obligation by any IPI Indemnified Party, would bind or impair a IPI Indemnified Party, or includes any admission of wrongdoing by any IPI Indemnified Party. The IPI Indemnified Parties shall cooperate with ALFASIGMA and may, at their sole option and expense, be represented in any such action or proceeding by counsel of their own choosing.
 
12.2 Limitation of Damages. IN NO EVENT SHALL EITHER PARTY BE LIABLE HEREUNDER TO THE OTHER PARTY FOR ANY PUNITIVE, RELIANCE, INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOST REVENUE, LOST PROFITS, OR LOST SAVINGS) HOWEVER CAUSED AND UNDER ANY THEORY, EVEN IF IT HAS NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. THE LIMITATIONS SET FORTH IN THIS SECTION 12.2 SHALL NOT APPLY WITH RESPECT TO (A) ANY BREACH OF ARTICLE X OR (B) THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF A PARTY. NOTHING IN THIS SECTION 12.2 IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF A PARTY UNDER THIS ARTICLE XII WITH RESPECT TO ANY DAMAGES OR SETTLEMENT PAYMENTS PAID TO A THIRD PARTY IN CONNECTION WITH A THIRD-PARTY CLAIM.
 
12.3 Insurance. At such time as ALFASIGMA or any of its Affiliates or Sublicensees begins to Commercialize Product, ALFASIGMA shall, at its own expense, procure and maintain clinical trial, product liability and general comprehensive liability insurance in the amount of $5,000,000 per occurrence and $5,000,000 annual aggregate. Insurers will waive all rights of subrogation against IPI. Upon IPI’s request, ALFASIGMA will promptly provide for itself and its Affiliates and Sublicensees copies of certificates of insurance evidencing such coverages. ALFASIGMA shall notify IPI not less than twenty-five (25) Business Days in advance of any material change or cancellation of any policy. If any insurance is on a claims-made basis, ALFASIGMA will maintain such insurance for a period of not less than the expiry date of the last Product Manufactured for Commercialization in the ALFASIGMA Territory. 
 
ARTICLE XIII
 
General Provisions
 
13.1 Entire Agreement; Amendment. This Agreement and all Exhibits attached to this Agreement constitute the entire agreement between the Parties as to the subject matter hereof. All prior and contemporaneous negotiations, representations, warranties, agreements, statements, promises and understandings with respect to the subject matter of this Agreement are hereby superseded and merged into, extinguished by and completely expressed by this Agreement. None of the Parties shall be bound by or charged with any written or oral agreements, representations, warranties, statements, promises or understandings not specifically set forth in this Agreement. No amendment, supplement or other modification to any provision of this Agreement shall be binding unless in writing and signed by all Parties.
  	 
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13.2 Independent Contractors. The relationship between IPI and ALFASIGMA created by this Agreement is solely that of independent contractors. This Agreement does not create any agency, distributorship, employee-employer, partnership, joint venture or similar business relationship between the Parties. Neither Party is a legal representative of the other Party, and neither Party shall have the right to assume or create any obligation, representation, warranty or guarantee, express or implied, on behalf of the other Party for any purpose whatsoever.
 
13.3 Governing law; Jurisdiction. This Agreement shall be construed and enforced in accordance with the laws of Switzerland without regard to the conflicts of law provisions thereof. All disputes arising out of or in connection with this Agreement shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one arbitrator appointed in accordance with the said Rules. The arbitration shall be in Zurich, Switzerland. Any proceeding brought by either Party under this Agreement shall be exclusively conducted in the English language.
 
13.4 Notice. All notices or communications required or permitted to be given by either Party hereunder shall be deemed sufficiently given if mailed by registered mail or certified mail, return receipt requested, or sent by overnight courier, such as Federal Express, to the other Party at its respective address set forth below or to such other address as notified by the other Party from time to time pursuant to this Section 13.4. Mailed notices shall be deemed to be received on the third Business Day following the date of mailing. Notices sent by overnight courier shall be deemed received the following Business Day.
 
If to ALFA If to ALFASIGMA: 
 
Alfasigma S.p.A.
Via Ragazzi del ’99, 5, 40133 Bologna, Italy
Attn: Michele Cera, Corporate General Counsel
 
If to IPI: If to IPI:
 
Innovation Pharmaceuticals Inc. 
100 Cummings Center, Suite 151-B, Beverly MA 01915, USA
Attn: Leo Ehrlich, CEO
 
With a copy (which shall not constitute notice) to:
 
Attn: Arthur P. Bertolino, MD, PhD MBA, President and Chief Medical Officer
 
13.5 Compliance with Law; Severability. Nothing in this Agreement shall be construed to require the commission of any act contrary to the Law. If any one or more provisions of this Agreement is held to be invalid, illegal or unenforceable, the affected provisions of this Agreement shall be curtailed and limited only to the extent necessary to bring it within the applicable legal requirements and the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.
  	 
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13.6 Assignment. Neither this Agreement nor any of the rights or obligations created herein, may be assigned by either Party, in whole or in part, without the prior written consent of the other Party, except that either Party shall be free to assign this Agreement as a whole without consent in connection with any merger or sale of such Party or sale of all or substantially all of the assets of such Party. This Agreement shall bind and inure to the benefit of the successors and permitted assigns of the Parties hereto. Any assignment of this Agreement in contravention of this Section 13.6 shall be null and void.
 
13.7 Force Majeure. No Party shall be liable for any failure to perform, or be considered in breach of, its obligations under this Agreement (other than obligations to make payments of money) to the extent such performance has been delayed, interfered with or prevented by an event of Force Majeure, and the obligations of such Party under this Agreement (other than obligations to make payments of money) whose performance is affected by Force Majeure shall be suspended for so long as its performance remains affected by the event of Force Majeure. Any Party that experiences an event of Force Majeure shall provide prompt notice of such event to the other Party, including an estimate of the likely period of time during which its performance will be affected, and shall use all reasonable efforts to remove the condition constituting Force Majeure. In the event of a prolonged condition of Force Majeure that makes it unreasonable to continue to perform other activities then being performed by the Parties and their Affiliates pursuant to this Agreement, the Parties shall consult with one another and may, if so agreed by the Parties, appropriately scale back their respective activities in order to avoid waste or inappropriate usage of resources under the circumstances. If the event or condition of Force Majeure continues to exist for more than 90 days, then the Party not affected by the event or condition of Force Majeure shall have the right to terminate this Agreement upon 60 days written notice, and such termination shall be effective on the 60th day thereafter if such event or condition of Force Majeure continues to exist at that time.
 
13.8 Cumulative Remedies. Unless as otherwise expressly set forth hereunder, no remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under the Law.
 
13.9 Ambiguities; No Presumption. Each of the Parties acknowledges and agrees that this Agreement has been diligently reviewed by and negotiated by and between them, that in such negotiations each of them has been represented by competent counsel and that the final agreement contained herein, including the language whereby it has been expressed, represents the joint efforts of the Parties hereto and their counsel. Accordingly, in interpreting this Agreement or any provision hereof, no presumption shall apply against any Party hereto as being responsible for the wording or drafting of this Agreement or any such provision, and ambiguities, if any, in this Agreement shall not be construed against any Party, irrespective of which Party may be deemed to have authored the ambiguous provision.
 
13.10 No Third Party Beneficiaries. No person or entity other than ALFASIGMA, IPI and their respective Affiliates, successors and permitted assignees hereunder, shall be deemed an intended beneficiary hereunder or have any right to enforce any obligation of this Agreement.
  	 
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13.11 Waivers. A Party’s consent to or waiver, express or implied, of the other Party’s breach of its obligations hereunder shall not be deemed to be or construed as a consent to or waiver of any other breach of the same or any other obligations of such breaching Party. A Party’s failure to declare the other Party in default, to insist upon the strict performance of any obligation or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof, no matter how long such failure continues, shall not constitute a waiver by such Party of its rights hereunder, of any such breach, or of any other obligation or condition. A Party’s consent in any one instance shall not limit or waive the necessity to obtain such Party’s consent in any future instance and in any event no consent or waiver shall be effective for any purpose hereunder unless such consent or waiver is in writing and signed by the Party granting such consent or waiver.
 
13.12 Further Assurance. Each Party shall duly execute and deliver, or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents and instruments, as may be necessary or as the other Party may reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes hereof, or to better assure and confirm unto such other Party its rights and remedies under this Agreement.
 
13.13 Headings; Exhibits. Article and Section headings used herein are for convenient reference only, and are not a part of this Agreement. All Exhibits are incorporated herein by this reference.
 
13.14 Interpretation. The terms “hereof”, “herein” and “hereunder” and terms of similar import will refer to this Agreement as a whole and not to any particular provision hereof. Except where the context otherwise requires, wherever used, the singular shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders and the word “or” is used in the inclusive sense (and/or). The term “including” as used herein shall mean including, without limiting the generality of any description preceding such term. The language in all parts of this Agreement shall be deemed to be the language mutually chosen by the Parties. The Parties and their counsel have cooperated in the drafting and preparation of this Agreement, and this Agreement therefore shall not be construed against any Party by virtue of its role as the drafter thereof.
 
13.15 Counterparts. This Agreement may be executed in one or more counterparts, each of which when taken together shall constitute one and the same agreement, and may be executed through the use of facsimiles or .pdf documents.
 
[Signature Page Follows]
 
	 
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.
 
	INNOVATION PHARMACEUTICALS INC.
	 
	ALFASIGMA S.P.A.
	 

	  
	 
	  
	 

	By:
	/s/ Arthur P. Bertolino
	 
	By:
	/s/ Pier Vincenzo Colli
	 

	Name:
	Arthur P. Bertolino
	 
	Name:
	Pier Vincenzo Colli
	 

	Title:
	President and CMO
	 
	Title:
	Chief Executive Officer
	 

 
	 
	40

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