PRIVATE & CONFIDENTIAL

AGREEMENT

BETWEEN:

[UK Company] (1)

and

[Chinese Organisation] (2)

[TEMPLATE] RESEARCH AND DEVELOPMENT AGREEMENT

[Note: this document is for illustrative purposes only to indicate the types of provisions that could be included in such an agreement and does not constitute legal advice nor recommendation of any particular provision. Specific legal advice should be taken in respect of any particular transaction.]

TABLE OF CONTENTS

1. Definitions............................................................................1

2. Know How and Confidential Materials Disclosure and Transfer4

3. Research Program.................................................................4

4. Management of Research Collaboration.................................5

5. Research Funding.................................................................6

6. Reports and Audits relating to the Research Program.............6

7. Ownership and Use of Intellectual Property............................7

8. Confidentiality and Non-Disclosure........................................9

9. Representations, Warranties and Covenants........................11

10. Term and Termination of Agreement....................................13

11. Force Majeure.....................................................................15

12. Assignment.........................................................................15

13. Severability.........................................................................15

14. Governing Law, Jurisdiction, Venue......................................16

15. Dispute Resolution..............................................................16

16. Notices...............................................................................16

17. Relationship of the Parties...................................................17

18. Entire Agreement................................................................17

19. English Language................................................................18

20. Amendment........................................................................18

21. Waiver and Non-Exclusion of Remedies................................18

22. Further Assurance...............................................................18

23. Expenses............................................................................18

24. Counterparts.......................................................................18

Schedule 1..................................................................................1

Part 1..........................................................................................1

Chinese Organisation Patents......................................................1

Part 2..........................................................................................1

Chinese Organisation Know How and Materials.............................1

Schedule 2..................................................................................2

Part 1..........................................................................................2

UK Company Patents...................................................................2

Part 2..........................................................................................2

UK Company Know How and Materials..........................................2

Schedule 3..................................................................................3

Research Plan.............................................................................3

Schedule 4..................................................................................4

Research Budget.........................................................................4

This Research and Development Agreement (the “Agreement”) is made as of [ ] 2015 (the “Signing Date”) by and between:

(1) [UK Company] whose registered office is at [ ] (“UK Company”); and

(2) [Chinese Organisation], a Chinese [ ] with its principal place of business at [ ] (“Chinese Organisation”).

Background

(A) UK Company has developed and is the owner of certain proprietary intellectual property and technology relating to [ ];

(B) Chinese Organisation has experience in, among other things, the development and commercialisation of [ ];

(C) The Parties wish to conduct certain collaborative research and development activities regarding [ ]; and

(D) Some aspects of the Research Activities (as defined below) will be undertaken by Lancaster Students (as defined below) under the direction of the UK Company (the "Lancaster Research"). The Lancaster Research is subject to an agreement between the UK company and Lancaster University dated [ ] (the "Lancaster Agreement").

[(E) UK Company has disclosed Confidential Information to the Chinese Organisation under a confidentiality agreement dated [ ] (the "Confidentiality Agreement").]

Agreement

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

1. Definitions

Unless otherwise specifically provided herein, the following terms, when used with a capital letter at the beginning, shall have the following meanings:

1.1. “Affiliate” means, with respect to a Person, any Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such first Person. “Control” and, with correlative meanings, the terms “controlled by” and “under common control with” mean (a) the power to direct the management or policies of a Person, whether through ownership of voting securities or by contract relating to voting rights or corporate governance, resolution, regulation or otherwise, or (b) to own 50% or more of the outstanding voting securities or other ownership interest of such Person.

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1.2. “Applicable Law” means the applicable laws, rules and regulations in the Territory that may be in effect from time to time.

1.3. “Chinese Organisation Material” means Materials owned by the Chinese Organisation and provided to the UK Company pursuant to Section 2.1.

1.4. "Background IPR" means the Chinese Organisation IPR and/or the UK Company IPR as the context requires.

1.5. “Breaching Party” has the meaning set forth in Section 10.3.

1.6. “Business Day” means a day other than Saturday or Sunday or public holiday in England and China.

1.7. "Chinese Organisation IPR" means the Chinese Organisation Patents and Chinese Organisation Know How.

1.8. "Chinese Organisation Know How" means the certain Know how and Materials owned by the Chinese Organisation before the Signing Date that are listed on Part 2 of Schedule 1.

1.9. "Chinese Organisation Patents" means the certain Patents owned by the Chinese Organisation before the Signing Date that are listed on Part 1 Schedule 1.

1.10. “Complaining Party” has the meaning set forth in Section 10.3.

1.11. “Confidential Information” means any and all confidential data, results, know-how (including the Chinese Organisation Know-How and UK Company Know How), plans, business information and other Information, whether oral or in writing or in any other form, disclosed before, on or after the date of this Agreement by one Party to another Party, including the terms and existence of this Agreement.

1.12. “Disclosing Party” has the meaning set forth in Section 8.1.

1.13. “Force Majeure” has the meaning set forth in Section 11.1.

1.14. “Force Majeure Party” means a Party prevented or delayed in its performance under this Agreement by an event of Force Majeure.

1.15. "GDST Funding" means research funding provided by the Guangdong Department of Science and Technology ("GDST") to the Chinese Organisation for the purpose of carrying out the Research Activities.

1.16. “Information” means all technical, scientific and other know-how and information, trade secrets, knowledge, technology, means, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, apparatuses, specifications, data, results, laboratory notes and notebooks, and other material, in written, electronic or any other form now known or hereafter developed, and any products, apparatuses, and other materials and compositions.

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1.17. “Intellectual Property Rights” or "IPR" means Patents, trademarks, service marks, trade secrets, trade names, registered designs, design rights, copyrights (including rights in computer software), domain names, database rights and any rights or property similar to any of the foregoing in any part of the world, whether registered or not, together with the right to apply for the registration of any such rights.

1.18. "Lancaster Student" means a student enrolled on a [to be completed] course at Lancaster University during the Term.

1.19. "Lancaster University" means Lancaster University with its campus at Bailrigg, Lancaster, United Kingdom LA1 4YW

1.20. “Materials” means samples or other materials provided by a Party to another Party under this Agreement.

1.21. “Notice Period” has the meaning set forth in Section 10.3.

1.22. “Party” means the Chinese Organisation or UK Company and “Parties” means both the Chinese Organisation and UK Company.

1.23. “Patents” means (a) all national, regional and international patents and patent applications, including provisional patent applications, (b) all patent applications filed either from such patents, patent applications or provisional applications or from an application claiming priority from either of these, including divisionals, continuations, continuations-in-part, provisionals, converted provisionals, and continued prosecution applications, (c) any and all patents that have issued or in the future issue from the foregoing patent applications ((a) and (b)), including utility models, petty patents and design patents and certificates of invention, (d) any and all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications ((a), (b) and (c)), and (e) any similar rights, including so-called pipeline protection, or any importation, revalidation, confirmation or introduction patent or registration patent or patent of additions to any such foregoing patent applications and patents.

1.24. “Person” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organisation, including a government or political subdivision, department or agency of a government.

1.25. “Receiving Party” has the meaning set forth in Section 13.2.

1.26. “Research Activities” means all those tests, studies and other activities described in the Research Plan as may be amended in accordance with Section 6.3.

1.27. “Research Budget” is set out in Schedule 4.

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1.28. “Research Documentation” means any and all documents, records, accounts, notes, reports and other data documenting Research Activities, whether in written, electronic, video or other form.

1.29. “Research Plan” means a description of the research to be undertaken by UK Company and Chinese Organisation as set forth in Schedule 3, as may be amended pursuant to Section 3.1.

1.30. “Research Program” means the collective set of Research Activities to be conducted by the Parties in accordance with the Research Plan.

1.31. “Researchers” means all those students, employees or agents of UK Company and Chinese Organisation, each of who are engaged in the conduct of the Research Activities.

1.32. "Resulting IPR" means any IPR in any Results.1.33. “Results” means any ideas, inventions, discoveries, know-how, data,

documentation, reports, materials, writings, designs, computer software, processes, principles, methods, techniques and other information, recorded in any form, that are discovered, conceived, reduced to practice in the conduct of the Research Program by or on behalf of either of the Parties.

1.34. “Retention Period” has the meaning defined in Section 8.1.

1.35. “Signing Date” has the meaning set forth in the preamble to this Agreement.

1.36. “Term” means the period of [ ] from the Signing Date or such longer period as the Parties agree in writing or shorter upon early termination pursuant to Section 11.

1.37. “Territory” means [the People's Republic of China].

1.38. “Third Party” means any Person not including the Parties and the Parties’ respective Affiliates.

1.39. "UK Company IPR" means the UK Company Patents and UK Company Know How.

1.40. "UK Company Know How" means the certain Know how and Materials owned by the UK Company before the Signing Date that are listed on Part 2 of Schedule 2.

1.41. "UK Company Patents" means the certain Patents owned by the UK Company before the Signing Date that are listed on Part 1 of Schedule 2.

2. Know How and Confidential Materials Disclosure and Transfer

2.1. Each Party shall within thirty (30) days after the Signing Date, provide to the other Party (at no cost to the other Party) that Party's Know How and Materials existing at the Signing Date as described in Part 2 of Schedule 1 and Part 2 of Schedule 2 in order to enable the Parties to carry out the Research Activities allocated to them under the Research Plan.

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2.2. All Background IPR and Materials together with any information derived therefrom shall be subject to the confidentiality and non-use restrictions of Section 8.

2.3. Both Parties acknowledge and agree that the Materials are experimental in nature. Each Party shall use, store and handle such Materials in accordance with any instruction provided by the disclosing Party and all Applicable Law relating thereto.

3. Research Program3.1. Research Activities . The initial Research Plan is set out at Schedule 3. The

Research Plan may only be amended by prior written agreement of the Parties [through the JSC]. Each Party shall conduct the Research Activities in accordance with this Agreement and the Research Plan.

3.2. Conduct of Research Activities . Each Party shall (a) perform or cause to be performed the Research Activities in good scientific manner and in compliance in all material respects with all Applicable Laws, and [(b) use skilled personnel up to an equivalent of [ ] FTE of the level of a [ ] to perform such Research Activities][Note: the resources to be applied can be set out here or in the Research Plan or Research Budget.]. Neither Party guarantees that a particular result can be obtained. As between the Parties, the UK Company shall direct the activities of the Lancaster Student.

3.3. [Research Manager . Each Party shall appoint a Research Manager who shall be responsible for all activities undertaken by that Party pursuant to the Research Program. The Research Managers shall serve as the primary contacts for the Parties on all matters related to the Research Activities and the Research Plan.] [Note: may not be necessary]

3.4. Research Results . Each Party shall, throughout the Term, promptly provide the other Party with all Results, raw data and other information that they have obtained in the conduct of the Research Program, in sufficient written detail to permit the other Party to analyze such Results and employ them in their own Research Activities.

4. Management of Research Collaboration4.1. Formation of Joint Steering Committee [Note: a JSC is more appropriate

if the research is extensive in scope or continues over a long period.] The Parties shall establish the “Joint Steering Committee” or “JSC” (the “JSC”) to oversee the Research Program. Each Party shall initially appoint two (2) representatives of such Party to the JSC, including the Research Managers. The JSC may change its size from time to time by mutual consent of its members, provided that the JSC shall consist at all times of an equal number of representatives of each of the Parties. Each Party may replace its JSC representatives at any time upon written notice to the other Parties. The JSC may invite non-members (including consultants and advisors of a Party who are under an obligation of confidentiality consistent with this Agreement), but with a maximum of two (2) per Party, to participate in the discussions and meetings of the JSC, provided that such participants shall have no voting authority at the JSC. The JSC shall have a chairperson, who shall serve for a term of one year, and who shall be

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selected alternately, on an annual basis, by Chinese Organisation and UK Company. The initial chairperson shall be selected by UK Company. The role of the chairperson shall be to convene and preside at meetings of the JSC, to prepare and circulate agendas and to ensure the preparation of minutes, but shall have no additional powers or rights beyond those held by the other JSC representatives.

4.2. Meetings . The JSC shall meet (face to face or by conference call) at least [ ] times per calendar year during the Term unless the Parties mutually agree in writing to a different frequency for such meetings as reasonably necessary.

4.3. Specific Responsibilities of the JSC . [Note: This should reflect the specifics of the particular agreement] The JSC shall be responsible for overseeing the activities of the Parties under the Research Program. In addition to its general responsibilities, the JSC shall in particular, without limitations

(i) implement the Research Plan;(ii) oversee the conduct of research according to the Research Plan;(iii) decide on discontinuation of studies in the Research Plan;(iv) decide on possible additional studies in the Research Plan;(v) decide on possible amendment of scope of the Research Plan;(vi) resolve possible non-scientific issues (e.g. logistics and financial)

directly relating to the Research Plan;(vii) facilitate the flow of Information between the Parties in relation to

the Research Plan; (viii) Decide on the prosecution of Resulting IPR; and(ix) perform such additional functions in relation to the Research

Program as the Parties may jointly agree from time to time. 4.4. Decision-Making of JSC . The JSC shall act by consensus. The representatives

from each of (a) Chinese Organisation and (b) UK Company, will have, collectively, one (1) vote. If the JSC cannot reach consensus on an issue that comes before the JSC, then the Parties shall refer such matter to a senior designee from each of UK Company and Chinese Organisation (collectively, “the Senior Officers”). The Senior Officers shall have relevant experience and seniority to discuss and resolve the relevant issue(s). The Senior Officers shall use reasonable efforts to resolve such issue within thirty (30) days of the issue being referred to them. In the event that the Senior Officers cannot reach agreement, either Party may refer the issue to dispute resolution in accordance with Section 16.2. [Notwithstanding the foregoing, [ ] Company shall have final determination at the JSC, without further escalation to the Senior Officers over the following issues:

4.4.1 [ ]. ] [Note: should one party have final say on any particular issue?]

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5. Research Funding5.1. Research Budget . Each Party will commit the resources as set out in the

Research Budget in Schedule 4 to carrying out its Research Activities. 5.2. GDST Funding . The Parties anticipate that the Chinese Organisation will

apply for GDST Funding in respect of the Research Program. If the Chinese Party is granted GDST Funding it shall only use such funding for the conduct of the Research Activities and only in the Territory. Neither Party shall accept such funding unless the GDST has explained in writing the terms of such grant, in particular in relation to the ownership and exploitation of Results obtained using such funding, and both Parties agree in writing that such terms are acceptable to them. If the Chinese Organisation receives GDST Funding and the terms are acceptable to both Parties then a proportion of such funding may be used to reimburse the UK Company for costs related to the Research Program in accordance with GDST guidelines. [Note: to set out process for reimbursement of such costs –eg does the UK Company have to invoice the Chinese Organisation?]

5.3. Books and Records . Chinese Organisation shall maintain complete and accurate books, records and accounts that, in reasonable detail, fairly reflect the GDST Funding. UK Company shall have the right to review and audit such books, records and accounts in accordance with Section 6.3.

6. Reports and Audits relating to the Research Program6.1. Recordkeeping . Each Party shall prepare and maintain complete, current,

accurate, organized and legible records of all Research Documentation as necessary for patent and regulatory purposes and in full compliance with Applicable Law. All laboratory notebooks recording the Research Activities shall be dedicated to the Research Activities and not include any other research. Each Party shall retain all Research Documentation during the Term and thereafter until (a) the third (3rd) anniversary of the date that the Term expires or terminates; or (b) until such later date as may be required by Applicable Law (the “Retention Period”). Each Partner shall make all Research Documentation available at reasonable times upon reasonable notice for review and audit pursuant to Section 6.3.

6.2. Reporting . Each Party shall submit written progress reports to the other Party within [thirty (30)] days of the end of each milestone specified in the Research Plan during the term of this Agreement, which reports shall describe a detailed summary of the Research Activities performed and Results achieved during the relevant period. Each Party shall submit a final written report to the other Party within [thirty (30)] days of the earlier of the completion of the Research Activities and the expiration or earlier termination of the Research Program for any reason, which report shall include a comprehensive summary of the Research Activities undertaken and the Results achieved by that Party. [Note: to be tailored to the specific requirements of the Project]Audits. UK Company or its authorized representatives shall have the right, no more often than once per six months and upon prior written notice, during regular business hours, to: (a) monitor the conduct of the Research Activities and inspect the Chinese Organisation's premises where the Research Activities are or are to be carried out, (b) review and audit during

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the Retention Period all Research Documentation and any other books, records, and data documenting to the Research Activities, and (c) interview the Research Manager. The Chinese Organisation shall, and shall cause its Research Manager and other of their personnel to, cooperate with any such activities. Each Party shall promptly inform the other Party of any inspections and the like by authorities that may affect or relate to the Research Activities and shall provide the other Party with a copy of any reports from such inspections to the extent permissible by law. [Note: the Chinese Organisation may wish to make this right mutual. Is that acceptable to the English company?]

6.3. Taxes . Chinese Organisation shall be solely responsible for any taxes and/or charges related to receiving and spending the GDST Funding. Any sums payable to the UK Company under this Agreement, including reimbursement for travel expenses, shall be payable in full by the Chinese Organisation without deduction of any tax. If the Chinese Organisation is required by law to deduct any tax then the sums payable to the UK Company shall be grossed up by the Chinese Organisation to take account of such tax and ensure that the UK Company receives the full amount of the sums payable.

6.4. Each Party is solely responsible for paying any and all inventor compensation claims relating to any Results created by its employees.

7. Ownership and Use of Intellectual Property

[Note: this section dealing with IP is a suggestion that is compliant with Chinese law. Essentially, improvements made by the Chinese company cannot be exclusively licensed or assigned to the UK company for free. However, the UK Company should be aware that under the provisions in this Section 7 the Chinese Organisation will own all improvements to the UK Company's Background IP that the Chinese Organisation makes. The UK Company will have to negotiate a licence/assignment of such improvements after they have been made. The Chinese Organisation can use such improvements itself. If the UK Company has strong Background IP in China then it may well be able to prevent the use of such improvements to the extent that they require use of such Background IP. However, if the UK company has no Background IP in China then it will be in a weak position. Strategies for the UK Company to ameliorate this position would include: (a) limiting the research activities to be carried out by the Chinese company under the Research Plan so that they do not come up with improvements (b) ensuring that most Research Activities are carried out by the Lancaster Student and therefore improvements would be owned by the UK Company (c) agreeing a fair price now for the Chinese Organisation's improvements and (d) entering now into an exclusive exploitation arrangement for China with the Chinese Organisation (eg a distribution agreement) so that any exploitation of the Chinese Organisation's improvements will result in remuneration to the UK company and/or payment for an exclusive licence or assignment of the Chinese Organisation's improvements.]

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7.1. Each Party shall promptly disclose in confidence to the other Party all Resulting IPR during the term of this Agreement and the Parties shall co-operate, where required, in relation to the preparation and prosecution of patent applications and any other Resulting IPR applications, and in relation to any legal proceedings concerning such patents and patent applications and any other Resulting IPR applications.

7.2. Each Party shall own the Resulting IPR generated by it under the Research Program. Each Party shall obtain assignments from their employees and contractors of all the rights in the Results generated by such employees and contractors (which in the case of the UK Company shall include the Lancaster Student).

7.3. Subject to Section 7.7.2, nothing contained in this Agreement or any licence agreement pertaining to this Project shall affect the absolute and unfettered rights of each Party in all inventions, discoveries and intellectual property contained in its Background IPR.

7.4. Unless agreed otherwise, each Party shall undertake and continue at its expense the timely prosecution and maintenance of all Resulting IPR which is solely owned by that Party. In the event that the owner of the IPR is unable or unwilling to comply with its obligation under this Section, the JSC shall consider how best to deal with such Resulting IPR and shall have the option to require an assignment of such Resulting IPR to the other Party to enable prosecution and maintenance of such Resulting IPR by that other Party at its own cost. If any Party wishes to exploit commercially any Resulting IPR assigned pursuant to this Section 7.4 that Party shall pay to the assigning Party a royalty and/or other appropriate form of remuneration which is fair and reasonable taking into consideration the respective financial and technical contributions of the Parties concerned to the development of the Resulting IPR, the expenses incurred in securing intellectual property protection thereof and the costs of its commercial exploitation and any use of Background IPR.

7.5. If any of the Parties are jointly responsible for generating Resulting IPR such Resulting IPR shall be jointly owned by such Parties in accordance with the inventive contribution made by each Party to such Resulting IPR. [Note: joint ownership only arises if both parties make an inventive contribution. If one party invents an improvement and the other party simply tests its efficacy then only the first party will own the improvement.]

7.6. Through the JSC the Parties shall agree between them on who shall be responsible for the timely prosecution and maintenance of all such Resulting IPR and the Party that is nominated to be so responsible shall be entitled to charge the other Party with a percentage of the costs of so doing as agreed between them. In the absence of any agreement to the contrary between the Parties the costs shall be equally shared.

7.7. Each Party grants to the other Party (and their respective Affiliates) a non-exclusive, non-assignable, non-sublicensable, royalty-free licence to:

7.7.1 use its Resulting IPR for their own internal research and development purposes but not for the purposes of commercial exploitation; and

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7.7.2 subject to any existing third party obligations, use its Background IPR for the purpose of undertaking the Research Program but not for the purposes of commercial exploitation. [Note: should the licences be limited to certain territories eg The UK company use exclusively outside China and the Chinese Organisation use exclusively inside China?]

7.8. If a Party wishes to exploit commercially Resulting IPR owned by the other Party, the Parties shall negotiate to grant such Party (but the owning Party shall not be obliged to grant) of a licence to use such Resulting IPR for that purpose, subject to the agreement of appropriate terms in relation thereto, including a royalty and/or other appropriate form of remuneration which is fair and reasonable taking into consideration the respective financial and technical contributions of the Parties concerned to the development of the Resulting IPR, the expenses incurred in securing intellectual property protection thereof and the costs of its commercial exploitation and any use of Background IPR. [Note: the effect of this agreement ends at the end of the R&D phase. Commercial exploitation would be subject to a separate agreement.]

7.9. Should any of the Parties wish to exploit its own Resulting IPR itself and its Affiliates or with a Third Party during the duration of the Term of this Agreement or within [two years] thereafter, that Party must notify the other Party before doing so, always provided that the disclosure of information required for such exploitation is subject to the obligations of confidentiality at least equivalent to those under Section 8.

7.10. With regard to joint inventions, the Parties owning such inventions agree to co-operate fully in the protection of such joint inventions and each Party shall be entitled to make use of such joint inventions subject only to negotiating a licence in good faith from the other Party for its interest in such joint inventions on similar terms to those set out in Section 7.7.

8. Confidentiality and Non-Disclosure

8.1. Confidentiality Generally . At all times during the term of this Agreement and indefinitely following termination or expiration hereof, each Party (the “Receiving Party”) shall, and shall cause its officers, directors, employees, agents, and Affiliates to keep confidential and not publish or otherwise disclose and not use, directly or indirectly, for any purpose, any Confidential Information provided to it by another Party (the “Disclosing Party”), except to the extent such disclosure or use is otherwise expressly permitted by the terms of this Agreement.

8.2. To secure the confidentiality attaching to the Confidential Information, the Receiving Party shall:

8.2.1 keep separate all Confidential Information disclosed by the Disclosing Party and all information generated from that information from all documents and other records and keep all documents and other material bearing or incorporating any of that Confidential Information at its usual place of business;

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8.2.2 not use, reproduce, transform, transfer or store any of the Confidential Information in an externally accessible computer or electronic information retrieval system or transmit it in any form or by any means whatsoever outside of its usual place of business;

8.2.3 notify the Disclosing Party promptly of the date and circumstances of the loss or unauthorised disclosure, if any, of the Confidential Information or any part of the Confidential Information;

8.2.4 allow access to the Confidential Information exclusively to those of its employees who have a need to see and use it for the conduct of the Receiving Party's Research Activities and inform each of the said employees of the confidential nature of the Confidential Information and of the obligations on the Receiving Party in respect thereof and shall take such steps as may be reasonably desirable to enforce such obligations;

8.2.5 obtain a written confidentiality undertaking addressed to the Disclosing Party from each of its employees to whom the Confidential Information will be disclosed under clause 8.2.4; and

8.2.6 make copies of the Confidential Information only to the extent that the same is strictly required for the Receiving Party's Research Activities. [Note: if any particular security measures should be applied (eg firewalls, passwords etc) then they can be mentioned here.]

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

8.4. Exclusions . Notwithstanding the foregoing, Confidential Information shall not include any information that:

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

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

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

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

8.4.5 is proved by written documentation to have been independently developed by or for the Receiving Party or its Affiliates without reference to the Disclosing Party’s Confidential Information.

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

8.5. Use of Name and Trade marks . No Party shall mention or otherwise use the name, insignia, symbol, trademark, trade name or logotype of another Party or its Affiliates in any publication, press release, promotional material or other form of publicity without the prior written consent of such other Party. Neither Party shall, and shall not permit their Affiliates to, use any trademark that is the same as or confusingly similar to, misleading or deceptive with respect to or that dilutes any trade mark of, the other Party.

8.6. No public announcement concerning this Agreement, its subject matter or the transactions described herein shall be made, either directly or indirectly, by UK Company or Chinese Organisation or their respective Affiliates, except as may be legally required by Applicable Laws, regulations or judicial order without first obtaining the approval of the other Party and agreement upon the nature, text and timing of such announcement, which approval and agreement shall not be unreasonably withheld or delayed. The Party desiring to make any such voluntary public announcement shall provide the other Party with a written copy of the proposed announcement in reasonably sufficient time prior to public release to allow such other Party to comment upon such announcement, prior to public release.

8.7. In exception to Section 8.5, within thirty (30) days of the Signing Date, UK Company may issue a mutually agreed press release, relating to the license and collaboration as described in this Agreement. UK Company will provide the text to the Chinese Organisation reasonably in advance of the planned announcement, and the Parties will work in good faith to agree on the final text of the announcement.

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9. Representations, Warranties and Covenants

9.1. UK Company represents and warrants to Chinese Organisation that:

9.1.1 UK Company is the sole and exclusive owners of the entire right, title and interest in the Patents listed on Schedule 2 and is entitled to grant the licenses specified herein.

9.1.2 All Intellectual Property Rights in the Results created by UK Company’s employees, consultants, agents and Lancaster Student shall be owned by UK Company with the right to license them to Chinese Organisation under this Agreement.

9.1.3 As far as the UK Company is aware, the use of the UK Company IPR in the Research Program will not infringe the Intellectual Property Rights of any third party, nor amount to a breach of confidence, passing off or actionable act of unfair competition in relation to the business, assets or products of any third party.

9.2. Chinese Organisation represents and warrants to UK Company that:

9.2.1 Chinese Organisation is the sole and exclusive owner of the entire right, title and interest in the Patents listed on Schedule 1 and are entitled to grant the licenses specified herein.

9.2.2 All Intellectual Property Rights in the Results created by Chinese Organisation’s employees, consultants, agents and all Researchers shall be owned by Chinese Organisation with the right to license them to UK Company under this Agreement.

9.2.3 Before any Researcher commences any Research Activities, Chinese Organisation shall have entered into a binding agreement whereby the Results created by such Researchers shall be owned by Chinese Organisation with the right to license them to UK Company under this Agreement.

9.2.4 As far as the Chinese Organisation is aware, the use of the Chinese Organisation IPR in the Research Program will not infringe the Intellectual Property Rights of any third party, nor amount to a breach of confidence, passing off or actionable act of unfair competition in relation to the business, assets or products of any third party.

9.3. The UK Company represents and warrants to Chinese Organisation and Chinese Organisation represents and warrants to UK Company that:

9.3.1 it has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;

9.3.2 it has full legal power to grant the rights and licenses granted to the other under this Agreement; and

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9.3.3 it has taken all necessary action on its part required to authorise the execution and delivery of this Agreement.

9.4. Disclaimer and liability with respect to provided material All information, materials and/or Results provided by the Parties under the Research Program are provided “as is”. Except for the express warranties set forth in Sections 9.1.1 through 9.3, neither Party makes any representations and grants any warranties, express or implied, either in fact or by operation of law, by statute or otherwise, and to the maximum extent permitted by applicable law each Party specifically disclaim and exclude any other warranties, whether written or oral, or express or implied, including any warranty of quality, merchantability or fitness for a particular use or purpose or any warranty as to the validity of any patents or the non-infringement of any intellectual property rights of third parties.

9.5. Liability cap . Notwithstanding anything to the contrary in this Section 9 or in this agreement, the maximum total aggregate liability of [UK Company][each Party] under this Agreement shall never exceed [ ].

9.6. Insurance . Each Party shall have and maintain such type and amounts of liability insurance as is normal and customary in the industry generally for Persons similarly situated, and shall upon request provide the other Party with a copy of its policies of insurance in that regard, along with any amendments and revisions thereto. [Note: this agreement does not include indemnities as it does not cover exploitation of products and therefore the risks of eg third party claims are limited. However, if indemnities are appropriate then they can be included]

10. Term and Termination of Agreement

10.1. Term . The Agreement shall commence on the Signing Date and shall continue until the end of the Term unless this Agreement is earlier terminated in accordance with this Article 10.

10.2. Termination on Notice . Each Party shall have the right, in its sole discretion, to terminate the Agreement upon [thirty (30)] days’ prior written notice to the other Party.

10.3. Termination for Material Breach . In the event that a Party shall be in material default in the performance of any of their material obligations under this Agreement (a “Breaching Party”), in addition to any other right and remedy the other Party (the “Complaining Party”) may have, the Complaining Party may terminate this Agreement in its entirety by [40 days] prior written notice (the “Notice Period”) to the Breaching Party, specifying the breach and its claim of right to terminate, provided always that the termination shall not become effective at the end of the Notice Period if the Breaching Party cures the breach complained about during the Notice Period.

10.4. Without affecting any other right or remedy available to it, a Party may terminate this Agreement with immediate effect by giving written notice to the other Party if:

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10.4.1the other Party suspends, or threatens to suspend, payment of its debts or is unable to pay its debts as they fall due or admits inability to pay its debts or is deemed unable to pay its debts;

10.4.2the other Party commences negotiations with all or any class of its creditors with a view to rescheduling any of its debts, or makes a proposal for or enters into any compromise or arrangement with any of its creditors;

10.4.3a petition is filed, a notice is given, a resolution is passed, or an order is made, for or in connection with the winding up of the other Party;

10.4.4an application is made to court, or an order is made, for the appointment of an administrator, or if a notice of intention to appoint an administrator is given, or if an administrator is appointed over the other Party;

10.4.5the holder of a qualifying floating charge over the assets of the other Party (being a company) has become entitled to appoint or has appointed an administrative receiver;

10.4.6a person becomes entitled to appoint a receiver over all or any of the assets of the other Party or a receiver is appointed over all or any of the assets of the other Party;

10.4.7a creditor or encumbrancer of the other Party attaches or takes possession of, or a distress, execution, sequestration or other such process is levied or enforced on or sued against, the whole or any part of its assets and such attachment or process is not discharged within 14 days; or

10.4.8the other Party suspends or ceases, or threatens to suspend or cease, carrying on all or a substantial part of its business.

10.5. Consequences of Termination .

10.5.1Return of Material; Termination of Rights. In the event of termination or expiration of this Agreement:

10.5.1.1. all rights and licenses granted to each Party under this Agreement shall terminate save that the licenseso under Section 7.7.1 shall continue; and

10.5.1.2. each Party shall return all data, files, records and other materials in its possession or control containing or comprising the other Party’s Information or other Confidential Information to which such first Party does not retain rights hereunder [(except one copy of which may be retained by the returning Party’s General Counsel solely for archival purposes.

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10.5.2In the event of termination of this Agreement under Section 10.2, the terminating Party shall reimburse the other Party for any and all non-cancellable obligations committed before receipt of the notice of termination, provided that the other Party provides satisfactory proof that such expenses cannot be cancelled or recovered and in no event shall such expense exceed the amount budgeted therefor in the Research Budget.

10.5.3Remedies . Early termination of this Agreement by a Party shall in no way affect or limit such Party’s right to claim against the other Party for any damages arising out of the breach of this Agreement.

10.6. Accrued Rights; Surviving Obligations . Survival. The termination of this Agreement shall not relieve the Parties from performing any obligations accrued prior to the date this Agreement terminates. Subject to the foregoing, each Party’s obligations under Sections [ ] shall survive the termination or expiration of this Agreement.

11. Force Majeure

11.1. In this Agreement, “Force Majeure” means an event which is beyond a non-performing Party’s reasonable control, including an act of God, strike, lock-out or other industrial/labour disputes (whether involving the workforce of the Party so prevented or of any other Person), war, riot, civil commotion, terrorist act, malicious damage, epidemic, quarantine, fire, flood, storm, natural disaster or compliance with any law or governmental order, rule, regulation or direction (including changes in the requirements of the Health Authorities), whether or not it is later held to be invalid.

11.2. The Force Majeure Party shall, within thirty (30) days of the occurrence of a Force Majeure event, give notice in writing to the other Party specifying the nature and extent of the event of Force Majeure, its anticipated duration and any action being taken to avoid or minimize its effect. Subject to providing such notice and to Section 11.1, the Force Majeure Party shall not be liable for delay in performance or for non-performance of its obligations under this Agreement, in whole or in part, nor shall the other Party have the right to terminate this Agreement, except as otherwise provided in this Agreement, where non-performance or delay in performance has resulted from an event of Force Majeure. The suspension of performance allowed hereunder shall be of no greater scope and no longer duration than is reasonably required.

11.3. The Force Majeure Party shall use reasonable endeavours, without being obligated to incur any expenditure or cost, to (a) bring the Force Majeure event to a close or (b) find a solution by which the Agreement may be performed despite the continuation of the event of Force Majeure.

12. Assignment

12.1. No Party may assign its rights or, except in respect of the UK Company and the Lancaster Student, delegate its obligations under this Agreement,

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whether by operation of law or otherwise, in whole or in part without the prior written consent of the other Parties, which consent shall not be unreasonably withheld. Any attempted assignment or delegation in violation of this Section 12 shall be void.

13. Severability

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

14. Governing Law, Jurisdiction, Venue

14.1. Governing Law . This Agreement and any dispute or claim arising out of or in connection with it (whether contractual or non-contractual in nature such as claims in tort, from breach of statute or regulation or otherwise) shall be governed by and construed in accordance with the laws of the Peoples' Republic of China excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. The Parties agree to exclude the application to this Agreement of the United Nations Convention on Contracts for the International Sale of Goods.

14.2. Arbitration . Any dispute or claim arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination shall be referred to and finally resolved by arbitration administered by the Hong Kong International Arbitration Centre (HKIAC) under the HKIAC Administered Arbitration Rules in force when the Notice of Arbitration is which are deemed incorporated into this Section 14.2. The place of arbitration shall be Hong Kong. The language to be used in the arbitration procedures shall be English. The arbitration proceedings including any outcome shall be confidential. Nothing in this Section 14.2 will preclude either Party from seeking equitable interim or provisional relief from a court of competent jurisdiction including a temporary restraining order, preliminary injunction or other interim equitable relief, concerning a dispute either prior to or during any arbitration if necessary to protect the interests of such Party or to preserve the status quo pending the arbitration proceeding.

15. Dispute Resolution

15.1. If a dispute arises between the Parties relating to the existence, negotiation, validity, formation, interpretation, breach, performance or

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application of this Agreement, the Parties shall use the following non-binding procedure in good faith prior to a Party pursuing judicial remedies provided that this shall not prevent each Party pursuing interim remedies to protect their rights.

15.2. Each Party shall notify the other Party of the dispute in accordance with this Section 15. The Parties shall use good faith efforts to resolve such dispute within thirty (30) days after delivery of such notice, which good faith efforts shall include at least one in-person meeting between representatives of each Party having decision-making authority. For Chinese Organisation the representatives shall be [ ]. For UK Company the representative shall be [ ]. All discussions under this Section 27 are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence.

15.3. If the Parties are unable to resolve the dispute in accordance with this Section 15, any Party may initiate arbitration in accordance with Section 14.

16. Notices

16.1. Notice Requirements .

Any notice, request, demand, waiver, consent, approval or other communication permitted or required under this Agreement shall be in writing, shall refer specifically to this Agreement and shall be deemed given only if delivered by hand or sent by facsimile transmission (with transmission confirmed) or electronic mail, or by internationally recognised overnight delivery service that maintains records of delivery, addressed to the Parties at their respective addresses specified in Section 16.2 or to such other address as the Party to whom notice is to be given may have provided to the other Party in accordance with this Section 16. Such notice shall be deemed to have been given as of the date delivered by hand or transmitted by facsimile (with transmission confirmed) or electronic mail, or on the second Business Day (at the place of delivery) after deposit with an internationally recognised overnight delivery service. Any notice delivered by facsimile shall be confirmed by a hard copy delivered as soon as practicable thereafter. This Section 16 is not intended to govern the day-to-day business communications necessary between the Parties in performing their obligations under the terms of this Agreement.

16.2. Address for Notice .

For : Chinese OrganisationAddress:

Facsimile: For the attention of:

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For: UK CompanyAddress: Facsimile: For the attention of:

17. Relationship of the Parties

The status of a Party under this Agreement shall be that of an independent contractor. Nothing contained in this Agreement shall be construed as creating a partnership, joint venture or agency relationship between the Parties or, except as otherwise expressly provided in this Agreement, as granting any Party the authority to bind or contract any obligation in the name of or on the account of another Party or to make any statements, representations, warranties or commitments on behalf of another Party. All persons employed by a Party shall be employees of such Party and not of another Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party.

18. Entire Agreement

This Agreement constitutes the entire agreement between the Parties with respect to the subject matter of the Agreement. This Agreement supersedes all prior agreements, whether written or oral, with respect to the subject matter of the Agreement. [In particular this Agreement supersedes and amends the Confidentiality Agreement, to the extent that it is inconsistent with this Agreement.] Each Party confirms that it is not relying on any statements, representations, misrepresentation, warranties or covenants of any person (whether a Party to this Agreement or not) except as specifically set out in this Agreement. Nothing in this Agreement is intended to limit or exclude any liability for fraud. All Schedules referred to in this Agreement are intended to be and are hereby specifically incorporated into and made a part of this Agreement. In the event of any inconsistency between any such Schedules and this Agreement, the terms of this Agreement shall govern.

19. English Language

This Agreement is written and executed in the English and Chinese language. In the event of any conflict in interpretation between the English version and such translation, the [English] version shall prevail.

20. Amendment

Any amendment or modification of this Agreement must be in writing and signed by authorised representatives of both Parties.

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21. Waiver and Non-Exclusion of Remedies

A Party’s failure to enforce, at any time or for any period of time, any provision of this Agreement, or to exercise any right or remedy shall not constitute a waiver of that provision, right or remedy or prevent such Party from enforcing any or all provisions of this Agreement and exercising any rights or remedies. To be effective any waiver must be in writing. The rights and remedies provided herein are cumulative and do not exclude any other right or remedy provided by law or otherwise available, except as expressly set forth herein.

22. Further Assurance

Each Party shall perform all further acts and things and execute and deliver such further documents as may be necessary or as the other Party may reasonably require to implement or give effect to this Agreement.

23. Expenses

Except as otherwise expressly provided in this Agreement, each Party shall pay the fees and expenses of its respective lawyers and other experts and all other expenses and costs incurred by such Party incidental to the negotiation, preparation, execution and delivery of this Agreement.

24. Counterparts

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together shall be deemed to constitute one and the same instrument. An executed signature page of this Agreement delivered by facsimile transmission or by electronic mail in “portable document format” (“.pdf”) shall be as effective as an original executed signature page.

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THIS AGREEMENT IS EXECUTED by the authorised representatives of the Parties as of the date first written above.

SIGNED for and on behalf of CHINESE ORGANISATION

SIGNED for and on behalf of UK COMPANY

Signature Signature

Name:

Name:

Title: Authorised Signatory Title: Authorised Signatory

[Signature Page to Research and Development Agreement]

PRIVATE & CONFIDENTIAL

Schedule 1

Part 1

Chinese Organisation Patents

Part 2

Chinese Organisation Know How and Materials

1

Schedule 2

Part 1

UK Company Patents

Part 2

UK Company Know How and Materials

2

Schedule 3

Research Plan

3

Schedule 4

Research Budget

4