Bionik Laboratories (BNKL) 10-K 2017 FY Annual report

Exhibit 10.33

DISTRIBUTION AGREEMENT

by and between

BIONIK LABORATORIES CORP.

and

ChinaBionik Medical RehabilitationTechnologyLtd.

May 17, 2017

TABLE OF CONTENTS

		Page
ARTICLE 1.	DEFINITIONS AND INTERPRETATION	1
1.1.	Definitions	1
1.2.	Interpretation	4
ARTICLE 2.	EXCLUSIVE APPOINTMENT; FUTURE PRODUCTS	5
2.1.	Exclusive Distributorship Appointment	5
2.2.	Option in Respect of Future Products	5
ARTICLE 3.	COMMERCIALIZATION OF DISTRIBUTION PRODUCTS	6
3.1.	Commercialization Obligations	6
3.2.	Marketing Materials	6
3.3.	Product Labels and Inserts	6
3.4.	Use of Trademarks	6
ARTICLE 4.	TERMS OF PURCHASE OF DISTRIBUTION PRODUCTS	7
4.1.	Forecasting	7
4.2.	Terms and Conditions	7
4.3.	Rejection of Product	8
ARTICLE 5.	TRAINING AND OTHER OBLIGATIONS OF BIONIK	10
5.1.	Information	10
5.2.	Training by BIONIK	10
5.3.	Compliance with Laws	10
5.4.	Anti-Corruption Laws	10
ARTICLE 6.	INTELLECTUAL PROPERTY RIGHTS AND
	LICENSE GRANT	10
6.1.	Intellectual Property Rights	10
6.2.	Use of BIONIK Trademarks and Service Marks	10
ARTICLE 7.	REGULATORY MATTERS	11
7.1.	Regulatory Diligence	11
7.2.	Regulatory Authority Action and Communications	11
7.3.	Adverse Event and Product Quality Complaint Notification and  Reporting	12
ARTICLE 8.	RECORDKEEPING AND REPORTING	12

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8.1.	Records	12
8.2.	Audit of Records	12
ARTICLE 9.	CONFIDENTIALITY	13
9.1	Definition of Confidential Information	13
9.2.	Secrecy and Use	13
9.3.	Authorized Disclosure	14
9.4.	Notification	14
9.5.	Remedies	14
9.6.	Survival	14
ARTICLE 10.	TERM AND TERMINATION	14
10.1.	Term	14
10.2.	Early Termination	14
10.3.	Process	15
10.4.	Effect of Expiration or Termination	15
ARTICLE 11.	INDEMNIFICATION	16
11.1.	Indemnification of BIONIK	16
11.2.	Indemnification by Company	16
ARTICLE 12.	REPRESENTATIONS, WARRANTIES AND COVENANTS	17
12.1.	Representations and Warranties	17
12.2.	Additional Representations and Warranties of BIONIK	17
12.3.	Product Warranty	17
12.4.	DISCLAIMER OF WARRANTY AND LIMITATION  OF LIABILITY	17
ARTICLE 13.	FORCE MAJEURE	18
13.1.	Force Majeure	18
ARTICLE 14.	GOVERNING LAW	18
14.1.	Governing Law	18
ARTICLE 15.	DISPUTE RESOLUTION	19
15.1.	Dispute Resolution	19
15.2.	Other Matters Unaffected	19

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ARTICLE 16.	MISCELLANEOUS	20
16.1.	Survival	20
16.2.	Notices	20
16.3.	Entire Agreement	20
16.4.	No Implied Waivers	21
16.5.	Severance	21
16.6.	Amendments	21
16.7.	Assignment	21
16.8.	Relationship of Parties	21
16.9.	Further Actions	21
16.10.	Counterparts	21

Annex A	Price and Payment Terms
Annex B	Specifications
Schedule I	Company Trademarks
Schedule II	Current Products
Schedule III	BIONIK Trademarks
Schedule IV	Milestones

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DISTRIBUTIONAGREEMENT

ThisDistribution Agreement (this “Agreement”),ismade and entered into as of May 17, 2017 (the “EffectiveDate”), by and betweenBionikLaboratories Corp., a company incorporated in accordance with the Law ofToronto, Canada with an office located at 483 Bay Street,Office N105,Toronto, ON M5G 2C9,Canada (“BIONIK”), andChina Bionik MedicalRehabilitation TechnologyLtd.a company organized under theLaw of thePeople’s Republic of China, with an office located at Waterside Pavilion Garden No.1 Building, Suite 2003, Nankai District,Tianjin, China (the “Company”), each being a “Party,” and collectively,the “Parties.”

RECITALS

1.          BIONIK has entered into a co-operative joint venturecontract withGinger Capital Investment Holding,Ltd.dated as of thedatehereof(“JV Contract”)for the establishment of the Company.Pursuant to the JV Contract, BIONIK and the Company shall enter into a distribution agreement,which willspecify the terms upon which BIONIK will grant to the Company an exclusive, non-transferable, revocable, royalty-free license to Market, sell and distribute the Distribution Products (as defined below) in the Territory (as defined below).

2.          The Parties desire theCompany to Market, selland distribute the Distribution Products in theTerritory in accordance with the terms and conditions set forth hereunder.

Now,therefore, in consideration of the promises and mutual covenants contained in this Agreement,the Parties agree as follows:

ARTICLE1.DEFINITIONS AND INTERPRETATION

1.1. Definitions. As usedin this Agreement,the following terms will have the meanings set forth in this Section.

“Acquired FutureProduct”shall have the meaning set forth in Section 2.2(d).

“Affiliate”shall mean,with regard to a given Person,a Person that Controls, is Controlled by,or is under common Control with, the given Person where“Control”means (i) ownership of more than fifty percent (50%) of the equity interest orvoting stock,(ii) the power to appoint or elect a majority of the directors,or (iii) the power to direct the management and policies of a Person, directly or indirectly, whether through the ownership ofvoting securities,by contract or otherwise.

“Agreement”shall have the meaning set forth in the first paragraph hereof.

“BIONIK”shall have the meaning set forth in the first paragraph hereof.

“BIONIK Trademarks” shall mean Trademarksowned by BIONIK as specified in Schedule III.

“CFDA”shall mean China Food and Drug Administration (formerly State Food &Drug Administration or“SFDA”)

“Company”shall have the meaning set forth in the first paragraph hereof.

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“Company Trademarks”shallmean the Trademarks specified inScheduleI.

“Confidential Information”shall have the meaning set forth in Section 9.1.

“Current Products”shall mean the products listed inSchedule IIattached hereto, together with all follow-on dosage forms,strengths and indicationsof such products.

“Disclosing Party”shall havethemeaning set forth in Section 9.1.

“Dispute”shallhavethe meaning set forthin Section 15.1(a).

“Distribution Products”shall mean theCurrentProductsand the Acquired FutureProducts.

“EffectiveDate”shall havethe meaningset forth in the first paragraph hereof.

“Exercise Notice”shall havethe meaning set forth in Section 2.2(b).

“Force MajeureEvent”shall have the meaning set forthin Section 13 l(a).

“FutureProduct”shall meanany BIONIK medical device productsother than the CurrentProductsthat BIONIK may at anytime during the Term of thisAgreement proposetomarket inthe Territory.

“FutureProductNotice”shall have the meaningsetforthin Section2.2.

“Hindered Party”shall have the meaningsetforth in Section 13.1(a).

“Hong Kong”shallmeantheHongKongSpecial Administrative Region.

“Intellectual Property”meansany and all:(i)inventions(whether patentable or unpatentableand whether or not reduced to practice),allimprovementsthereto,and all patents,patent applicationsand patent disclosures, together withallre-issuances,continuation, continuations, in part,revisions,extensions andre-examinations thereof;(ii)registered and unregistered trademarks,servicemarks,tradedress,logos,tradenames,assumed names,together with alltranslations,adaptations,derivationsand combinationsthereof and including all goodwillassociated therewith,and allapplications,registrations and renewals in connection therewith; (iii) copyrightable works, allcopyrights andall applications,registrationsand renewals inconnectiontherewith,worksofauthorship; (iv)rights in thenature of the aforesaiditemsinany country,and rightstosue for passingoff(whether for past,presentor future infringement).

“JV Contract”shall have themeaningset forth intheRecitalshereof.

“Law”or“Laws”shallmean anypublished laws,regulations,rules,provisions,circular,permits,authorizations,interpretations,ordersor decisions ofany government authorities orlegislative authoritiesor judgments,awards,decisionsor interpretations of any judicial authorities.

“License Agreement”shall mean thatcertainLicense Agreement betweenthePartiesdated as ofthe date hereof.

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“Manufacture”and“Manufacturing”shall mean,with respect to a Distribution Product,themanufacturing, processing,formulating,packaging,labeling,holding and quality controltesting of the Distribution Product.

“Marketing”shall meanthe programs and activitiesnormally undertaken byamedical devicecompany relating tothemarketing,Promotion andsale of a medical deviceproduct intheTerritory including patient information,web sites,advertising,studiesinsupport ofadvertising claims, seminars,symposia,training,and education,as wellasselling,contracting forsale ofsoliciting contracts forsale of, anddistributingsuch product.When used asaverb,“Market”shallmeantoengageinsuch activities.

“MarketingMaterials”shall mean,in respectofa Distribution Product,all written, printed,video,audioand internetorweb-based materials,conventionpanels, speakersprogramsand other materials relating to theDistribution Product, other than ProductLabelsandInserts,intendedfor usebyRepresentatives or otherwise bythe Companyin performing itsMarketing obligationshereunder,includingvisual aids, advertisements, formulary kits, file cards,premium items,clinical studies,reprints,drug information updates, direct mailings,product-orientedweb sites,and any other promotionalsupport items used by theCompanytoconductthe Marketing and Promotion of theDistribution Product.

“Net Sales”shall mean thegross amount invoiced byBIONIK forsales of theDistributionProducts toCompany,lessdeductions for(a)quantityand cash discountsandsales rebatesactuallygiven;(b)freight,shipping insuranceand other transportation expenses;(c)sales, value-added,excise taxes, tariffsand duties, and other taxesdirectlyrelated tothe sale; all to the extent that(a), (b)and(c) areincluded in thegross invoice price andspecified on theinvoice (but not including taxesassessed againstthe income derived fromsuchsale);(d) returns(including withdrawalsand recalls); and(e)amountsrepaid,discounted orcredited byBIONIK.

”Party”and“Parties”havethemeaningssetforth in thefirst paragraph hereof.

“PRC”shallmean thePeople’sRepublicofChina(solely for the purpose of this Agreement,excluding theprovinceof Taiwan,Hong Kong andthe Macau SpecialAdministrativeRegion).

“Product Labelsand Inserts”shall mean (a)the productmonograph asapproved bythe applicableRegulatoryAuthorityintheTerritory, (b)all labelsand other written,printed or graphicmatteraffixedtoanycontainer,packagingorwrapperutilizedwithaDistribution Product,or (c) any written materialpackagedwithorotherwisephysically accompanying aDistribution Product,includingpackage inserts.

“Product QualityComplaint”shalt mean any and allManufacturing orpackaging-relatedcomplaints fromThird Partiesrelated totheDistribution Product, including(a) anycomplaintinvolving the possible failure of the DistributionProduct to meet any applicableSpecifications, (b) any dissatisfaction with thedesign, package or labeling of theDistribution Product; or(c) any adverse event that may involve the quality of theDistributionProduct,includinglack of effect, infection,or request for testing.

“Promotion”shall meanthose activities normally undertaken by a medical device company’s sales force to implement marketing plans and strategiesaimed at encouraging the appropriate use of a particular medical deviceproduct in the Territory.When used as averb,“Promote”shall mean to engage in such activities.

“Proprietary Information”shall mean anyinformation or Intellectual Property of a party that is of a proprietary and confidential nature,including,but notlimited to trade clinical methods,clinicalprocesses,clinical documentation and techniques.

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“Purchase Price”shall havethe meaningset forth in Section 4.12.

“Recall Event”shallhave the meaning set forthin Section4.3.

“Receiving Party”shall havethemeaning set forth in Section 9.1.

“Regulatory Approval”shall mean,with respect to a DistributionProduct,any and all approvals,licenses,registrations orauthorizations necessaryfor the saleand Marketing of theDistribution Product throughout the Territory,includingwithout limitation, CFDA approval.

“RegulatoryAuthority”shallmean:

(a) any provincial,territorial or federal governmentor formulary body in the Territory with responsibility for determininglistability of aDistributionProduct on any applicable formulary or for determining thepricingof theDistribution Product for reimbursement, withjurisdiction to reviewthe pricing ofand payment for Distribution Products under thepublic drugsystem under applicableLaw;

(b)anyprovincial,territorial or federalgovernment in theTerritory with jurisdiction to grant, suspend or withdraw themarketingauthorization to Import, sell or distribute theDistribution Product in theTerritory under applicableLaw;and

(c) any provincial, territorialor federalgovernment or reviewboard in theTerritory with jurisdiction over pricingof patented products or with jurisdiction over competition aspects of pricing of products.

“Representative”shall mean a medical device salesrepresentative qualified bytraining andexperience to Promotethe medical deviceproducts in theTerritory.

“Specifications”shall have themeaning set forth in Section 12.3.

“Taxes”shall havethe meaning setforth in Section 4.12.

“Term”shallhavethe meaningset forth in Section 10.1.

“TerminatingParty”shall have the meaning set forth in Section 10.3.

“Territory”shallmean the PRC, Hong Kong, and the Macau Special AdministrativeRegion.

“Testing Methods”shall have the meaning set forth in Section 4.3.

“ThirdParty”shall mean any Person other than BIONIK,the Company or any Affiliate thereof and“ThirdParties”shallbe the plural of the same.

“USA”shall mean the United States of America.

1.2.Interpretation.

(a)Any reference herein to any Section,subsection or paragraph is to such Section,subsection or paragraph in thisAgreement unless the context otherwise requires.

(b) The italicized typeface,headingsand titlesherein areused for convenience of referenceonly and shall not affect the construction of this Agreement.

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(c) Unlessthe context otherwise requires, wordsimporting thesingular include theplural and vice versa,and pronouns importing a gender include all other genders.

(d) Reference toanylegislation or law or to any provision thereof shall include references to any such legislation orlaw as itmay, afterthe EffectiveDate,from timeto time,be amended,supplemented orre-enacted,and any reference to astatutory provision shall include any subordinatelegislation or administrative rules or regulations made from time to time under that provision.

(e)The terms “hereof’,“herein”,“hereby”, “hereto”and derivative or similar words refer to this entireAgreement orspecified Sections orsubsections of this Agreement, asthe case may be.

(f) Reference to the word“include” shall be construed without limitation.

(g)Any word or phrase defined in the body of this Agreement as opposed to being defined inSection1.1 above shallhavethemeaning assigned to it insuch definition throughout this Agreement, unlessthecontrary is expressly stated or the contrary clearly appears from the context.

(h)“Person”meansan individual,firm,partnership,jointventure,company, corporation,body corporate,unincorporated body of persons or any state or any agencyof a state.

(i)Where any obligation in thisAgreementis expressed to be undertaken or assumed by any party, that obligationis to be construed as requiring the party concerned to exercise,to theextent possible, allrights and powers ofcontrol over theaffairs of any otherperson which it is able to exercise (whether directly or indirectly)in order to secure performance of the obligation.

(j) Where a word or expression is defined hereincognate words and expressions will,if capitalized,be construed analogously.

ARTICLE 2.EXCLUSIVE APPOINTMENT;FUTUREPRODUCTS

2.1.Exclusive Distributorship Appointment.Effectiveasof the Effective Date,andsubject to the termsand conditions ofthis Agreement, BIONIK,acting for itself and its relevant Affiliates, herebyappointsthe Company asitsexclusive distributor of theDistribution Products in theTerritory.As exclusive distributor,theCompanyshall have the exclusive right during theTerm with respect to each Distribution Product to Market,distribute and sellsuch Distribution Productin the Territory.Subject to theterms hereof,the Company shall makeall decisionswith respect to the Marketing,planning,strategy,Promotion andselling price ofeach Distribution Product and shall havethe responsibilityfor establishing and modifying theterms and conditions ofthe sale ofthe Distribution Product and the rightto doso.

2.2.Option in Respect of FutureProducts.

(a) Intheevent that BIONIK or anyof its Affiliates, whilethisAgreement remainsineffect, proposesto Market,distribute andsell,intheTerritory,anyFutureProduct whichwould compete with the CurrentProduct or would beused in theCurrentProduct,BIONIK shall providetheCompany with a written noticeof suchfact (the“FutureProduct Notice”),identifyingthe relevantFuture Product.

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(b) TheCompanyshall havethe right,atanytime within one hundred andeighty(180) daysafter receipt of a Future Product Notice,toexercise the exclusive right to Market,distribute and sell therelevant Future Productin theTerritoryby providing a notice to BIONIK(the“Exercise Notice”).Duringsuch onehundred andeighty(180)-dayperiod,BIONIK shall notenter, andshall not permit its Affiliates to enter,intonegotiationswith a ThirdParty with respect totheopportunity to Market,distributeandsell the relevant Future Productinthe Territory. If theCompany doesnot providean Exercise Notice during such onehundred and eight(180)-dayperiod,then (i)therelevant FutureProduct shallnotbeincluded asa DistributionProduct under this Agreement, (ii)theCompany’sfightsin respect ofacquiring the right to Market, sell and distributesuch FutureProduct in the Territoryshall terminate,and (iii) BIONIK and its Affiliates shallbefree to makeother arrangements with respecttothe distribution of such Future Product in theTerritory.

(c) Following theCompany’s exerciseof its rightsunder Section 2.2(b)in respect ofthe relevant FutureProduct,theParties shallseek to determinethe PurchasePrice of such Future Productto be paid bythe Company

(d) Following the Company’sacquisition ofrightsto distributetherelevant FutureProduct in the Territory anddetermination of thePurchasePrice to be paid by the Company to BIONIK in respect ofsuch product as provided in Section 2.2(c)(at which point such Future Productwillbecomean“Acquired Future Product”),Companyshall usecommercially reasonable effortsto,withinareasonable period oftime,obtain RegulatoryApprovals pursuantto Section 7.1 toimport,Market,sell anddistribute the Acquired FutureProduct throughout theTerritory.

ARTICLE 3. COMMERCIALIZATION OFDISTRIBUTION PRODUCTS

3.1.Commercialization Obligations. During theTerm For eachDistribution Product and subjectto thetermsand conditions of this Agreement,the Company shall,onceRegulatory Approvalis obtainedforsuch Distribution Product inthe Territory, use commerciallyreasonableeffortsin respect of the Marketing, distribution and salein theTerritory of the Distribution Product.Prior to obtaining RegulatoryApproval, the Company shall only conductlimited Marketing,distribution andsales oftheDistributionProductsincompliance with applicable PRC Law.

3.2.Marketing Materials.

(a)Promptlyfollowing the EffectiveDate,BIONIK shall providethe Company with samples of anyMarketingMaterialsthat havebeen used orapproved for usein theTerritory in connection withany Distribution Product.At the Company’srequestduring the Term applicable to a Distribution Product,BIONIK shallprovide theCompany withsamplesof any marketing materials used byBIONIKin the United Statesinconnectionwith versionsof theDistributionProduct forwhich regulatory marketing approval hasbeensought orobtained in the United States.

(b)BIONIKshallprovide the Company with reasonable technical assistance from BIONIK’sregulatory,medicaland promotional regulatory affairsgroupsin connection withCompany’sefforts tocreateMarketing Materials.

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3.3.Product Labelsand Inserts.Subject totheprovisions ofthisAgreement,allDistribution Products sold and distributed bythe Companyshall usetheProduct LabelsandInsertsthatare attached to or accompanysuch DistributionProducts as delivered by BIONIKto theCompanypursuant tothe termshereof and theCompany shall not Market, sell or distribute anyDistribution Product using anyother ProductLabelsand Inserts.

3.4.UseofTrademarks.The Company shallMarket, sell or distributethe Distribution Products underBIONIKTrademarks and onlyunlessrequired byapplicable Law,theCompanyTrademarks,both ofwhich shall beused and displayed asmutually agreed inwriting bythe Parties. The Companyshall alsocomplywithall noticeandmarkingrequirementsasrequired byapplicable intellectual propertyLaw.

ARTICLE4.TERMS OFPURCHASEOFDISTRIBUTIONPRODUCTS

4.1. Forecasting. Company agrees to supply BIONIK with a ninety (90) - day rolling forecast of its anticipated requirements for each Distribution Product (the “Forecast”). Company will update and provide the Forecast to BIONIK monthly. The Forecast will include the quantity and type of Distribution Product to be purchased. Such Forecast shall not be binding on either Party, but shall be made in good faith.

4.2.Terms and Conditions. During theTerm of thisAgreement andsubject to the terms and conditions of this Agreement,the Company shall purchase the Distribution Products from BIONIK based on theForecast by issuing a purchase order toBIONIK.

(a)Price and Payment.The purchase price for each of the Distribution Products (the“PurchasePrice”)and the payment for the Purchase Price for theDistributionProductsshall be the price and payment as set forth onAnnex A. which shall be approximately forty per cent (40%) off the list price of the Distribution Products in other territories.After CFDA approval has been obtained for the Distribution Products or six (6) months after the establishment of the Company (whichever if the earlier),and if the government-approved selling prices for the DistributionProducts are below the Company’s expected selling prices,the Company may renegotiate the Purchase Price of theDistribution Products. The Purchase Price for theDistributionProducts may be amended by BIONIK no more than once per year and by no more than twenty percent (20%) overthe price previously in effect for the relevant Distribution Product.The new Purchase Price after such amendment shall apply to all orders received after theeffective date of such new Purchase Price as mutually agreed in writing by both Parties. Price changes shall not affect unfulfilled purchase orders accepted by BIONIK prior to the effective date of the price change.Notwithstanding theabove,Company may purchase Distribution Productsfor demonstration purposes only at fullyloaded cost to be advised by BIONIK.

(b)Taxes. Each Partyshall respectively bear and pay any and all Taxes, expenses and costs in connection withits negotiation, preparation,execution and performance of this Agreement under applicable Laws unless otherwise provided.“Taxes”means (i) any national,provincial,municipal,or localtaxes, charges,fees,levies,or other assessments, including,without limitation,all income tax (including enterprise income tax and withholding tax),turnover tax (including value-added tax,businesstax, and consumption tax), tariffs (including import duty and import value-added tax) or other assessments of any kind whatsoever, and (ii) all interest, penalties or additional amounts imposed by any governmentof any nation or any province or location thereof,in connection with any item described in clause (i)above.

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(c)Order and Acceptance.Allorders for the Distribution Productssubmitted by the Company shall be initiated by written purchase orders sent to BIONIK by email or facsimile transmission and requesting a delivery date during theterm of this Agreement;provided,however,that an order may initiallybeplaced orally if a confirmational written purchase order (which maybe sent by either mail or facsimiletransmission)isreceived by BIONIK within five (5)daysafter said oral order. To facilitate BIONIK’sproductionscheduling, the Companyshall submit purchase orders to BIONIK atleastninety(90) days prior to the requested delivery date.No order shall be binding upon BIONIK until accepted by BIONIK in writing,and BIONIK shall have no liabilityto the Companywith respect to purchase orders that arenot accepted.Nopartialshipment of an order shallconstitute the Company’sacceptance of the entire order, absent theCompany’s written acceptanceof such entire order.BIONIKshall use BIONIK’s reasonable commercial efforts to deliver the Distribution Products atthe times specified in Company’spurchaseorder,and shall,in any event,deliver the Distribution Productswithin five (5)days after thetimes specified in the Company’s purchase order.

(d)Terms ofPurchase Orders. Nothing contained in any purchase orderof the Company,or any Invoice, order acknowledgment orsimilar documentation of BIONIK,shall in any way modify the termscontained in this Agreement or add anyadditional termsor conditions. Unless otherwise provided herein,if there is anything contrary between a purchase orderand this Agreement, thisAgreementshall prevail.

(e)Delivery.All deliveries, unlessotherwisestated in the accepted purchase order, shall comply with thedelivery termsotherwise mutuallyagreed in writing.

(f)Inventory.Companyagrees to purchase and maintain a mutually agreeable level of inventory of the Distribution Products in theTerritory.

4.3.Rejection ofProduct.

(a)Specifications.TheDistribution Products supplied to Company by BIONIK under thisAgreement willconform tothe specifications,standards,formulations,criteria and the requirements of allLaws applicable the Distribution Productsand all other requirementsasset forth furtherinAnnexB(“Specifications”).IfCompanyrequestsany change to the Specifications(whichchangeisnot the result ofa requirement or mandateofaRegulatory Authority),it shall providewritten notice of any such changeand the reasons therefortoBIONIK. BIONIKshall notify Companywithin thirty (30) days after the notice from Company whether such changecan bemadeand its good faith estimate ofthecost ofanysuch change. If such changecan be made, thePartiesshall negotiatemgood faithand agree on a written implementation plan. Any associated cost for thechangewill beborne byCompanyunless BIONIKin its sole discretion reasonablybelieves the changeisglobally applicable.

(b)QualityControl.BIONIK will conduct qualitycontrol testingoftheDistributionProducts priortoshipmentIII accordance with anymethods and procedures described in theSpecificationsand/or any other methodsand procedures as Company may from time totime reasonablyrequest in responseto newand necessarycriteria resulting from market and regulatory changes, which are agreed to in advance bythe Parties(collectively, the“TestingMethods”).BIONIKwillconduct quality control testing ofthe Distribution Productsin accordance with theTestingMethodspriorto each shipment of the Distribution Productsto ensurethat eachsuchshipment conforms with the Specifications.

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(c)Rejection. Company maytest or causetobe tested theDistribution Productssupplied to it under thisAgreement inaccordance with Company’s customaryprocedures within thirty (30) days after itsreceipt.Companywillhave the right toreject anyshipment of the Distribution Products made to it under thisAgreementthat doesnot meettheSpecificationswhen received by it when tested in accordancewith the Testing Methods. Allclaims by Company of non-conforming Distribution Products willbedeemedwaived unlessmade by the Company in writingand received byBIONIK within such thirty (30)-dayperiod. All claimswill beaccompanied by a report of analysis of theallegedly non-conformingDistributionProduct that will havebeen made bythequalitycontrolstaff of the Company,using the TestingMethodsBIONIK will provide replacement Distribution Product for thenon-conformingDistribution Product and will have thirty (30)daysto conduct itsownanalysis of therejected Distribution Product.If,after itsown analysisofsuch Distribution Productsample,BIONIK confirms suchnon-conformity in writing,BIONIK willreplace such shipment at its expense,and reimburse Companyfor any reasonable charges incurred by Company for shipping and/orstorage,if applicable,ofthenon-conforming shipments.If,after its own analysis,BIONIK does not confirm such non-conformity,thePartieswill agree to retest theshipment or otherwise in a good faith attempt to agree upon a settlement of the issue. In theevent that thePartiescannot resolvethe issue,thePartieswill submit the disputed Distribution Productto an independent testinglaboratory,to bemutuallyagreed upon by the Parties,for testing. Thefindingsof such laboratory will be binding on the Parties,absentmanifest error.Expenses ofsuch laboratory testswill be borne by BIONIK if such testing confirmsthenon-conformity,otherwiseCompanywill bear suchexpenses. In theeventthat any suchshipment or batch thereof isultimately agreed orfound nottomeettheSpecifications,BIONIKwill replacesuchshipmentat itsexpense, and reimburse Companyfor anyreasonablecharges incurred byCompanyfor shipping and/or storage,if applicable,of thenon-conforming shipment.Company will returnor destroy any such rejected shipment to BIONIK ifso instructed byBIONIK, at BIONIK’sexpense.In the eventthat anysuchshipmentor batchthereof isultimatelyagreedor found to meettheSpecifications, Companywill accept andwill pay forsuchshipment or batch oftheDistribution Products.

(d)Recall. Inthe event that anyDistribution Productsold by BIONIK to Companypursuantto this Agreementshouldbe alleged or provennot tomeet theSpecifications (as tothe DistributionProduct)or other mandatory standardsfortheDistribution Product imposed bya RegulatoryAuthority,asthe case maybe(“RecallEvent”),either Partywill notify the other Partyimmediately,and thePartieswill cooperate fullyin theinvestigation and dispositionof thematter.If therecall of aDistribution Product isdue to any act,negligence or breachof warranty by BIONIK, then in such event, BIONIKwill bear all reasonabledirect costsassociated with the recall, including, without limitation,refund of theactual costof conductingthe recall inaccordance with therecallguidelinesof theapplicableRegulatoryAuthority,including, butnot limited to, expensesrelating to (a)notifying the tradeindustry, media and customers or(b) retentionor use of attorneys, staff,consultants, experts and testingfacilities.

(e)Replacement.Without anyprejudiceto anyother rightsofCompany, withinthirty (30)daysof a Recall Event,BIONIK will,at BIONIK’s election, (a)replacethe affectedDistribution Productwithconforming Distribution Product free ofcharge (includingall shippingrelated charges),or(b)refund thepurchasepriceof the affected Distribution Product, or issue a credit to Companyin anamount equal to thecostto Companyfor the affected Distribution Product.

4.4Distribution Product Safety.DuringtheTermofthisAgreement and for one (1)year after itstermination orexpiration,BIONIKwill promptlyprovide Companywith allinformationWithin its possessionorcontrol or otherwise availableto BIONIK regardinghandlingprecautions,toxicity and hazardsassociatedwith theDistribution Products. The information will be provided in written form. Inaddition,BIONIKwillprovidetheCompany with any safetyinformation or processingaidsas applicable for usingthe Distribution Products.

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4.5Notification.BIONIK agrees thatitwillnotifyCompanypromptly ofany (a)contactby any governmental,regulatory or administrative personconcerning theDistribution Products,whether or notrelating toaRecall Event and provide Companythe details ofsuch contact,including copies of anyrelated documents, or(b)incidentspertaining to theManufactureoftheDistribution Products that would requirenotificationto theRegulatory Authorities, including but notlimited to,fire,explosion, environmentalevent, serious injury or physicaldamage.

ARTICLE 5.TRAINING AND OTHER OBLIGATIONS OF BIONIK

5.1.Information.BIONIKshall use commercially reasonable efforts to provide tothe Company, upon the Company’sreasonable request,technical, scientific,pricingor other informationotherwiseobtained byBIONIKor in BIONIK’s possessionfor thepurpose of enablingthe Company to Market,selland distribute theDistribution Products.

5.2.Training byBIONIK.BIONIKshallprovide reasonable salesandtechnicaltraining,and technicalsupport,to theCompany’s personnel,withthe frequencyand content of thetrainingto bereasonably determined by agreementbetween theCompany and BIONIK as necessary for theCompanyto fulfillits obligationshereunder and toenablethe Company to PromotetheDistribution Productsin theTerritory.BIONIK andtheCompanyshalleach pay their owncosts for travel,food,andlodgingduringthetrainingperiod.Inaddition tosalesand technical training,BIONIKshallcooperate with theCompany inestablishingefficient promotional procedures and policies.BIONIKshallpromptlyrespond to the Company’sreasonable technical questionsrelatingto theDistribution Products.In addition,BIONIKshall, at the Company’s reasonablerequest but at BIONIK’sexpense, provideatleastone (1) trainingsession per each product line of the DistributionProducts orat leastthree (3)trainingsessions in totalintheTerritory,at a conferenceor similarfacility,tosurgeons and other potential users oftheDistribution Products,theformofwhichtrainingshallbereasonably agreed upon by theParties.BIONIKshall also promptlyrespond to all reasonable inquiriesfrom theCompany concerningmatterspertaining tothis Agreement.

5.3.Compliance with Laws.BIONIK shall,atits own expenses,complyfully all applicable Laws, includingany and all applicablehealthandsafetyLawswith respectto theDistributionProducts and BIONIK’s obligationsunderthis Agreement.Company shallsimilarlyat itsownexpenses,comply fullywith all applicable Laws with respect to theMarketing,Promotion,sale and distribution ofthe the Distribution Productsin theTerritory and itsobligationsunderthis Agreement.

5.4.Anti-Corruption Laws.Each Party and its employeesand agents shallatall timescomplywith all applicable anti-corruption Lawsincluding without limitation, theForeignCorruptPractice Act, asifitwereaPerson ofUSAand all applicablePRCanti-briberyLaws.Confirmed violations of the provisionswillbedeemedamaterialbreachofthisAgreement, givingaParty the right toimmediatelyterminatethis Agreementfor cause.

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ARTICLE 6. INTELLECTUAL PROPERTY RIGHTS AND LICENSE GRANT

6.1.Intellectual Property Rights. Subject to the provisionsunder thisAgreementand/orthe LicenseAgreement, each Partyretainsall rights,title and interestto theIntellectualPropertyowned by such Party.Other provisions with respectto Intellectual Property Rightsshallbe specified under theLicense Agreement.

6.2.Useof BIONIK Trademarks and Service Marks. Companyshall not usethe name“BIONIK”or any of BIONIK’s trademarks or servicemarks as part of this corporate orother legal name,oras part ofthe name under which it conductsbusiness,unless permittedinwriting by BIONIK.Companymaynotremoveor alterthe BIONIKname,or anyof BIONIK Trademarks or service markswhich arerequired byLaw, which BIONIK has placed on anyDistributionProductssold hereunder.Trademarks and service markscurrent as of theEffectiveDate of thisAgreement areset forth in Schedule III hereto. BIONIK shall have the right to modify oradd trademarksor servicemarksat anytimeinits solediscretion andagreesto provide Companyreasonable noticeof suchmodifications and additions.

ARTICLE 7.REGULATORY MATTERS

7.1.RegulatoryDiligence.

(a)Unlessotherwiseprovided in the JV contract or required bythe applicableLaws, Companyshall,at itsownexpense,obtain and maintain,orshall causeto beobtained and maintained,all RegulatoryApprovals for eachDistribution Product to enabletheimport,Marketing, saleand distribution of theDistribution Product inthe Territoryin accordance with applicableLaw,includingbut not limited to the filing,registration or approval processesbefore importing,distributingandMarketinganymedical device in theTerritory. Company shall notifyBIONIK each timeitsubmits an applicationforgovernment registration and marketingapprovalfora Distribution Productand shallsupply the BIONIK with copies of and accesstoCompany’sfilingsandshallkeep the BIONIK fullyinformed ofthe progressof each such application.

(b)For theavoidance of doubt,such filings pursuant to Section7.1(a) would grant Regulatory Approvalforsuch Distribution Productinthe name of,and allsuch RegulatoryApprovals shall betransferred to,BIONIK unlessotherwise required byapplicable Lawsoragreed bytheParties.

(c)Without limitingthe foregoing,ifCompanywishesto Manufacture anyofthe Distribution Productsand BIONIK isagreeable toit,BIONIK shall take all actionsneededoradvisableto transfer anyrelevant Regulatory Approval to Company.

(d) For clarity,in no event shall the Companyhave anyobligation to Market,sell or distribute anyDistributionProduct unlessand untilall therelevantRegulatoryApprovalshavebeen obtained byCompany and a copyof such Regulatory Approvalshas been provided toBIONIK provided thatCompany shall still havetheobligation toMarket,sell or distribute any Distribution Productin a limited manner andinfull compliancewithapplicable Law.

7.2.RegulatoryAuthorityAction and Communications.

(a)Each Party shall immediatelynotifythe otherof any information received regardingany threatenedor pending action by aRegulatoryAuthoritywhich might affect theDistribution Productsor thecontinued Manufacture, Marketing,distribution,saleor use of theDistribution Productsin theTerritory. Upon receiptof any such information,theParties shall consult in an effortto arriveat amutuallyacceptableprocedure for takingappropriateaction;provided,however,that nothing set forth in this Section 7.2 shallbeconstrued asrestricting theright of either Party to make a timely report of such matter to anyRegulatory Authority ortake otheraction that it deems appropriate under or requiredby applicable Law.

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(b) EachParty shallpromptly provide notice to the otherParty of any materialcommunications with anyRegulatoryAuthority concerning theDistributionProducts.To the extent permissibleunder applicableLaw, copies of all such material communications shallbe attached to the notice sentpursuant to this Section 7.2.

7.3.Adverse Event andProduct Quality Complaint Notification and Reporting.

(a) The Company shall,and shallcause each of its Representatives to, provide timely notice toBIONIK when he orshebecomes aware of an adverse event associated with use of a DistributionProduct(whether or notthe reported effect is (i) describedin the full prescribing information orthe published literature with respect to suchDistributionProduct or (ii) determined to be attributable tosuch DistributionProduct) of any information in or coming into its,hisor her possessionorcontrol concerning such adverse event.

(b) The Company shall,and shall cause each of its Representatives to,timely notify BIONIKwhen he or she becomes aware of anyProductQuality Complaint associated with use of aDistribution Product.

(c) The Parties shall cooperate in developing and maintaining procedures to implement this Section 7.3 and to ensure compliance with applicable Laws and requirements oftheRegulatory Authorities.

ARTICLE 8. RECORDKEEPINGAND REPORTING

8.1.Records. The Company shall keep orshall cause to be kept complete and accuratebooks and records (financial and otherwise) pertaining to the Marketing,sale anddistribution of the DistributionProducts and the performance of its obligations hereunder.The Company shall retain such books and records until the earlier of (a) one (1) year after the endthe Term applicable to the relevantDistribution Product and (b) such date as the Company has provided BIONIK with a complete copy of all such books andrecords, or for such longer period as maybe required by applicable Law.

8.2.Audit of Records.

(a) At the request of BIONIK, and only upon at least thirty (30) days’ prior written notice, the Company shall permit an independent certified public accounting firm of nationally recognized standing designated by BIONIK and reasonably satisfactory to the Company, at reasonable times and upon reasonable prior written notice, to examine and audit all books and records maintained by the Company pursuant to Section 8.1. The Company and its accountants shall cooperate with and permit such firm to review all invoices, receipts, working papers and other appropriate information relating to such determinations. Such examination and audit may not be conducted more than once in any twelve (12)-month period. The report of any such examination and audit shall be made simultaneously to BIONIK and the Company.

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(b) BIONIK shall treat all information subject to review under this Section 8.2 inaccordance with the confidentiality provisions of ARTICLE 9. and shall cause its accounting firm to enter into a reasonably acceptable confidentiality agreement with the Company obligating such firm to maintain all such financial information in confidence pursuant to such confidentiality agreement.

ARTICLE 9. CONFIDENTIALITY

9.1.Definition of Confidential Information. As used herein,“ConfidentialInformation”means any information, whether in written, visual,oral, electronic or other form, furnished by either Party,its Affiliates,or their respective agents and employees (the“DisclosingParty”),to the other Party, its Affiliates, or their respective agents and employees (the“ReceivingParty”)under this Agreement,including theProprietary Information of the Disclosing Party,except to the extentthat the Receiving Party can establish by competent proof that such information: (a) was already known to the Receiving Party,as shown by its written records,other than under an obligation of confidentiality,at the time of disclosure by the Disclosing Party;(b) was publicly available at the time of its disclosure by the Disclosing Party; (c) became publicly available after itsdisclosure by the Disclosing Party, other than through any violation of confidentiality owed to the Disclosing Party;(d) became available to the Receiving Party on a non-confidential basis from a source other than the Disclosing Party,provided that such source is not bound by a confidentiality agreement with the Disclosing Party with respect to such information; or (e) was independently developed by the Receiving Patty without reference to the Confidential Information.

9.2.Secrecy and Use.In its handling of the Confidential Information, the Receiving Party will use the same standard of care used by theReceiving Parry to avoid disclosure, publication, dissemination and unauthorized use of its most sensitive and confidential information, but in no case,less thanastandard of reasonable care.

(a) TheReceiving Party, and any person to whom the Receiving Party discloses Confidential Information as provided herein,will not disclose,publish or disseminate the Confidential Information to any Person, including any Affiliate of the Receiving Party,except that the Receiving Party may disclosethe Confidential Information to those of its Affiliates, and and such Affiliates’ employees,agents,or representatives, who have a need to receive such Confidential Information as a result of their specific responsibilities under this Agreement and who agree to be bound by the confidentiality obligations of the Receiving Party,including without limitation,the provisions of this Section;provided,however, that neither Party will disclose, publish or disseminate,or permit its Affiliates,and such Affiliates’ employees,agents or representatives, to disclose,publish or disseminate,any information,whether or not Confidential Information,which bears the name of the other Party or its Affiliates,without the prior written consent of such other Party, which consent will not be unreasonably withheld.

(b) The Receiving Party, and any Person to whom the Receiving Party discloses Confidential Information as provided herein,will not use Confidential Information,including any derivation from,or modification of Confidential Information,or any Ideas,concepts and/or techniques contained therein,for any purpose whatsoever other than as expressly provided in this Agreement.

(c)TheReceivingPartywillsecure allConfidentialInformation inwritten orelectronic form,andallcopies,notes and records thereof, in a mannerconsistent withcompany policy oftheReceivingParty regarding thehandling of confidentialinformation.

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9.3.AuthorizedDisclosure. Notwithstanding the foregoing,thePartiesmay with priorwrittenapprovalof theParty who disclosedtheConfidential Information reveal ConfidentialInformation to government personnelto the extent necessary to obtainanyrequired governmental approval, to outside lawyers, accountants and consultants to the extentnecessary for themtoprovide their professionalassistance, and to a court of competent jurisdiction to the extentnecessary for response to a valid order, provided that ConfidentialInformationsorevealedin written form is markedconfidentialand that such government personnel and outside individuals shall be requested to undertake to respect the confidentiality provisions of this Agreement.

9.4.Notification. TheReceivingParty will notify the Disclosing Party immediately, and cooperate with the DisclosingParty as theDisclosingParty may reasonably request, upon theReceivingParty’s discovery of any loss or compromise of the Disclosing Party’s ConfidentialInformation.

9.5.Remedies.Each Partyagrees that the unauthorizeduse ordisclosure of any ConfidentialInformation by theReceivingParty in violation ofthis Agreement will cause severe andirreparable damage to the Disclosing Party and its Affiliates.In the event of any violation of this Section, the ReceivingParty agrees thattheDisclosing Party and/or its Affiliates willbe authorized andentitled to obtainfrom any court of competentjurisdiction injunctive relief, whether preliminary or permanent, as wellas any other relief permitted by applicableLaws. TheReceiving Party will waive anyrequirement that the Disclosing Party and/or its Affiliates postbond as a conditionfor obtaining any such relief.

9.6.Survival.The provisions of this Section willbe in effect for a period of five (5)years following the termination orexpirationof this Agreement.

ARTICLE10. TERM AND TERMINATION

10.1.Term.This Agreement shalltake effect from the Effective Date and remain in effect fora period of five(5)years (the“Term”)unlessthis Agreement is terminatedearlierpursuant to Section 10.2. The Parties shallhave the option prior to the expiration of theinitial Term to renew this Agreement for subsequent periods, inwhich case,“Term”shallinclude these subsequentrenewalperiods.

10.2.EarlyTermination. (i) Either Party (except as otherwise provided below in this Section) shall have theright toterminate this Agreement in accordance with the provisions of Section 10.3 forso long as any of the following events occurs and continues:

(a) EitherParty orits Affiliates breaches a material provision of this Agreement and suchbreach,if capable of being cured, is not cured within sixty (60) days after the date of written notification of such breach,in which event only the non-breachingParty has the right to terminate,

(b) Either Party becomes bankrupt,or is the subject of proceedings for liquidation or dissolution,or ceases to carryon business or becomes unable to pay its debts as they come due,in whichevent the other Party has the rightto terminate;

(c)EitherParty becomes entitled to terminatethisAgreement under Section13.1;

(d) Theexpiration ortermination of theJVContract in accordance with its terms:and

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(e)Either Party engagesinany act offraud orcommitsany crime which hasresulted in a materialeffect on such Party’scapacityto perform this Agreement.

(ii) In addition,BIONIKshall havetheoptionto terminatethis Agreement if any ofthe milestonesset forth in Schedule IV(“Milestones”)is not met.

10.3.Process. In the event a Party desires to terminate this Agreementpursuant toSection 10.2(the“Terminating Party”),thefollowing processshallapply:

(a)TheTerminatingPartyshall provide writtennotice tothe otherParty indicating its desire toterminate thisAgreement and detailing the effectedsub-section in Section 10.2;

(b)If applicable, the Parties(acting through their respective mostsenior officers) attempt to removeorcurethereason during a sixty(60)-day periodfollowingthe notice; and if unresolved bythe endofthesixty (60)-clay period, thisAgreementshall be terminated.

(c)Fortheavoidance of any doubt,there is no cure period for earlier terminationpursuant Section 10.2(i)(d)and(e)and(ii)above.

10.4.EffectofExpiration orTermination.

(a)Licenses.Subject to theLicenseAgreement,uponexpiration orearlierterminationof this Agreement for any reason,all rights andlicenses granted by BIONIKtothe Company hereundershall terminate;providedthat,in the event the expiration or termination is with respect tooneor more Distribution Products but not to thisAgreementin itsentirety, the rights and licenses granted by BIONIK to Company shall remain in effect with respect to the remaining Distribution Productsuntilsuch timeasthis Agreementexpires or terminateswith respecttosuch DistributionProducts.

(b)Inventory.Upon termination ofthisAgreement due to a Change-of-Control Event(as defined under the JV Contract)of BIONIK or termination byCompanypursuant to Section 10.2(a)due toa breach byBIONIK with respect to oneor more DistributionProducts orin itsentirety,theCompanyshallsell toBIONIK and BIONIK shallpurchasefrom the Company,at thePurchasePrice paidfor such Distribution Productsbythe Company hereunder,any and all unsold quantities ofthe Distribution Products affected by the expiration ortermination that areheld bytheCompanyasof the date of such expirationor termination,freeand clear of any and allliens,mortgages, encumbrances,pledges,security interests or charges ofany nature whatsoever.The Company shall ship all such Distribution Products toBIONIKasdirectedby BIONIKat BIONIK’sexpense.The Partiesagreethat BIONIKshallhavetherightto Market, sell and distributeDistribution Products purchased byBIONIKpursuant to this Section 10.4(b);providedthat, unless otherwiseagreed by theParties, BIONIKshall Market,sell and distribute any suchDistribution Products only afterthey have beenrepackaged byBIONIKsuch that the Distribution Products donot bearProduct Labelsand Inserts,or any other written materials, identifyingtheCompanyasthe distributorof the productsanddo not contain any Company Trademarks.

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ARTICLE11.INDEMNIFICATION

11.1.Indemnification ofBIONIK.BIONIK willindemnifyand hold the Company,its Affiliates,and all oftheirrespectivedirectors,officers,employees, sub-licensees and agents harmless from and against any andall liability,damage,loss,costs orexpense (including,withoutlimitation,reasonableattorneys’ fees)arising out of third-partyclaims or litigation instituted by a Third Party based upon or arisingout of:

(a) BIONIK’sgrossnegligence,recklessnessorwillful misconduct in respect of anyDistributionProduct which itisresponsible for manufacturing orsupplying under this Agreement;

(b)BIONIK’sbreach ofany representation provided in ARTICLE12.;

(c)any personal injury,death or property damageattributable toBIONIK’s negligence,recklessness orwillful misconduct;

(d)any violation of anyLaws by BIONIK;

(e)anyenvironmental liability imposed onthe Company, its Affiliates,and/orany oftheirrespectivedirectors,officers, employees,sub-licenseesand agents which may arise as a result of the Company’s contractual relationship with BIONIKunder this Agreement and caused by BIONIK;or

(f) anyalleged or actual violation byBIONIK of theIntellectual Property rights of a Third Party.

TheCompany willpromptly notify BIONIK of any threatened or pending claims,demands, causes ofaction,losses,damages,penalties,fines, expensesor judgmentsthat could give riseto anobligation to indemnify under this Section.BIONIK will control the defense of any action in whichtheCompanyis indemnified under this Agreement,including the right to selectcounsel,and tosettle any claim;providedthat,without the written consent of the Company(which will not be unreasonably withheld or delayed),BIONIK will not agreeto settle anyclaim against the Company totheextentsuch settlementwould createanyobligation or actionon the part of theCompany other than thepayment ofmoney(subject to indemnification) or would have a material,adverse effect on theCompany. TheCompanywill cooperate as reasonablyrequested(attheexpenseofBIONIK)in thedefenseof any such action.

11.2.Indemnification by Company. The Company, willindemnify andhold BIONIK, its Affiliates, andallof theirrespective directors, officers, employees,sub-licensees andagentsharmless fromand againstany and all liability, damage, loss, costs or expense (including, withoutlimitation, reasonable attorneys’ fees) arising out of third-party claims orlitigation instituted by aThirdParty based upon or arising out of:

(a) the Company’s breach of any representation providedin Section12.1;

(b) any personalinjury,death or property damage attributable to the Company’s negligence, recklessness or willfulmisconduct; or

(c) any violation of any Laws by the Company.

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BIONIKwillpromptly notify the Company of any threatenedor pending claims, demands, causes of action, losses,damages, penalties, fines, expenses orjudgments that could give rise to an obligation to indemnify under this Section. the Company will control the defense of any action In which BIONIKis indemnifiedhereunder, including the rightto select counsel, and to settle any claim; providedthat,without the written consent of BIONIK(which willnot be unreasonably withheld or delayed),the Company will not agree to settle any claim againstBIONIK to the extent such settlement would create any obligation or action on the part of BIONIK other than the payment of money (subjectto Indemnification) or wouldhave a material, adverse effect on BIONIK.BIONIK will cooperate as reasonably requested (at the expense of the Company) in the defense of any suchaction.

ARTICLE 12. REPRESENTATIONS, WARRANTIES AND COVENANTS

12.1.Representations and Warranties. Each Party represents to the other Party that it has the full right and authority to enter into and perform its obligations under this Agreement,and the execution, delivery and performance of this Agreement have been duly authorized by allnecessary corporate action on its part, and no consent is required from anyThird Party forsuchParty to enter into and perform its obligations except for any consent which have already beenobtained.

12.2.Additional Representations and Warranties of BIONIK.BIONIK represents andwarrants to Company that,as of theEffective Date:

(a) In additionto and without limiting tothe representations and warranties provided under this Agreement,BIONIKandits Affiliates havethe sole and exclusiverights under,and the sole and exclusive rightto grant a license in respect of, any relevantIntellectualProperty to make, have made, use and sell the DistributionProducts to Company; and

(b) (i) suchRegulatory Approvals as havebeengranted with respect to Current Products are infull force andeffect andhave been duly and validly issued; (ii) there is no action orproceeding by anyRegulatory Authority pending or, to the knowledge of BIONIK, threatened seeking therecall of any Current Product orthe amendment, revocation or suspensionof any Regulatory Approval that has been grantedfor a CurrentProduct which would affect ordelay theManufacture, packaging,release or distribution of the Current Product, and (iii) BIONIK has made available to the Company complete and correct copies of all Regulatory Approvals.

12.3.Product Warranty.

(a) The DistributionProducts sold to the Company(i) will befreefrom defects in material and workmanship,(ii} will befreeand clearof all liens and encumbrances; (iii) willcomply at the timeof shipment to theCompany with (1)the requirementsof theCE Mark registration under the MedicalDevice Directive and/or theFood and Drug Administration (FDA),(2) allapplicableLawstothe Distribution Productsin theTerritoryand (3)all written specificationsforsuchProducts attached asAnnex B(the“Specifications”).

12.4.DISCLAIMER OFWARRANTY AND LIMITATIONOFLIABILITY.

(a)DISCLAIMER OF WARRANTY.EXCEPT FOR THE WARRANTIESEXPRESSLY SETFORTH INTHIS AGREEMENT,EACH PARTY DISCLAIMS ALL OTHER WARRANTIES,EXPRESS AND IMPLIEDWITHRESPECT TO THE DISTRIBUTIONPRODUCTS,INCLUDING WITHOUTLIMITATION,ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENTANDFITNESS FOR APARTICULAR PURPOSE.

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(b)LIMITATIONOFLIABILITY.INNOEVENT SHALL EITHER PARTYORITS AGENTS,OFFICERS,OREMPLOYEES, BELIABLEFORANY SPECIALDAMAGES,INCIDENTAL DAMAGES,INDIRECT DAMAGES, CONSEQUENTIALDAMAGES,OR EXEMPLARY DAMAGES WHATSOEVER(INCLUDINGDAMAGES FOR LOSS OFPROFITS,BUSINESS INTERRUPTION,LOSS OFINFORMATION),HOWEVERCAUSED,WHETHER ORNOTTHE POSSIBILITYOFSUCH DAMAGES HASBEEN DISCLOSEDTO THEOTHER PARTY IN ADVANCE;PROVIDED,HOWEVER, THAT THE FOREGOING SHALL NOTAPPLY TO AND SHALL NOT BE CONSTRUED TO PRECLUDE RECOVERY FROMANINDEMNIFYING PARTY BYANINDEMNIFIED PARTY IN RESPECTOF ANY OF SUCH LOSSES DIRECTLY INCURRED FROMTHIRDPARTY CLAIMS.

ARTICLE13, FORCE MAJEURE

13.1.ForceMajeure.

(a) When the obligationsofa Partyunderthis Agreement cannotbe performedinfull orinpart according tothe agreedtermsasa direct resultof anevent thatisunforeseeableandtheoccurrenceandconsequencesofwhich cannotbe prevented oravoided, suchasearthquake, typhoon,flood,fireandother natural disasters, war,insurrectionandsimilar militaryactions,civil unrestandstrikes,slowdowns and other labor actions(a“Force MajeureEvent”),the liabilityof thePartythat encounters such Force Majeure Event (the“Hindered Party”)shall bereleased infull orin part in lightof the impactoftheevent uponthis Agreement,ifall ofthe following conditions are met:

(i) TheForceMajeureEventwasthe direct cause ofthe stoppage,impedimentor delay encountered bythe Hindered Partyin performing its obligationsunderthis Agreement;

(ii)The Hindered Party used its commercially reasonable efforts to perform its obligationsunder this Agreement and to reduce the losses to the other Party arising from the Force Majeure Event; and

(iii) At the time of the occurrence of the Force Majeure Event,the Hindered Partyimmediately informed the other Party, providing written information on such event within fifteen (15) days of its occurrence, including a statement of the reasons for the delay in implementing or partially implementing this Agreement.

(b) If a Force Majeure Event shall occur,the Parties shall decide whether this Agreement should be amended in light of the impact of the event upon the implementation hereof, and whether the Hindered Party should be partially or fully freed from its obligations hereunder.

(c) If a Force Majeure Eventlasts for more than sixty (60) days,either Party shall be entitled to terminate this Agreement immediately with no further cure period in accordancewith Section 10.2.

ARTICLE 14.GOVERNING LAW

14.1.Governing Law. Theformation, validity,interpretation,execution,amendment and termination of and settlement of Disputes under this Agreement shall all be governed by theLaw of the State of New York.

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ARTICLE15.DISPUTE RESOLUTION

15.1.Dispute Resolution.

(a) Notwithstanding Article 14, any dispute,controversy orclaim arising out of or relatingin any way to this Agreement, including without limitation any dispute concerning the construction, validity,interpretation,enforceability or breach of thisAgreement shall be exclusively resolved by binding arbitration upon a Party’s submission of the dispute to arbitration. In the event of a dispute,controversy or claim arising out of or relating in any way to this agreement/the relationship,the complaining Party shall notify the other Party in writing thereof.Within thirty(30) days of such notice,management level representatives of both Parties shallmeet at an agreed location to attempt to resolve the dispute in good faith. Should the dispute not be resolved within thirty (30) days after such notice, the complaining Party shall seek remedies exclusively through arbitration. The demand for arbitration shall be made within a reasonable time after the claim, dispute or other matter in question has arisen,and in no event shall it be made after two years from when the aggrieved party knew or should have known of the controversy, claim, dispute or breach.

(b) This agreement toarbitrate shall be specifically enforceable. A Party may apply to any court with jurisdiction forinterim or conservatory relief,including without limitation a proceeding to compel arbitration.

(c) The arbitration shall be conducted by three arbitrators. Each Party shall select an arbitrator within ten (10) days of commencement of arbitration and the two designatedarbitrations shall select a third neutral arbitratorwithin twenty (20) days of their selection, Ifthe two arbitrators cannot select the arbitrator, the arbitrator shall be selected by the American Arbitration Association;

(d)The arbitration shallbe conducted in accordance with the then existing CommercialRules of the American Arbitration Association.

(e)The arbitration shallbe conductedin New York,New York.

(f) The Law of the State of New York shall be applied in any arbitration proceedings,without regard to principles of conflict of laws.

(g) The cost of the arbitration proceeding and any proceedingin court to confirm or to vacate any arbitration award, as applicable (including,without limitation, reasonable attorneys’ fees and costs),shall be borne by theunsuccessful party,as determinedby the arbitrators,and shall be awarded as partofthe arbitrators’ award.It is specifically understood and agreed that any party may enforce any awardrendered pursuant to the arbitration provisions of this Section by bringing a suit in any courtof competent jurisdiction. The Parties agree that the arbitrators shall have authorityto grant injunctive or other forms of equitable relief to anyParty. This Section shallsurvive the termination or cancellation of this Agreement.

(h)Each Patty shallpay its own proportionate share of arbitrator fees and expenses plusthe fees and expenses ofthe arbitrator it designated and the arbitration fees and expenses of the American Arbitration Association.The arbitrators shall be entitled to award the foregoing arbitration and administrativefees and expenses as damages,

15.2.Other Matters Unaffected. During the period when a disputeis beingresolved,except forthe matter being disputed,theParties shallin allother respects continue theirimplementation of this Agreement.

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ARTICLE 16.MISCELLANEOUS

16.1.Survival.The agreements of theParties contained in ARTICLE 11.(Indemnification),ARTICLE 12.(Representations, Warranties and Covenants),ARTICLE13.(Force Majeure),ARTICLE14.(Governing Law),ARTICLE 15.(Dispute Resolution),ARTICLE 16.(Miscellaneous)and Sections 6.1(Intellectual Property Rights),7.2(Regulatory Authority Action and Communications),7.3(Adverse Event and Product QualityComplaint Notification and Reporting), 4.3(d)(Product Recalls),8.1 (Records),8.2(Audit of Records),and 10.4(Effect a/Termination)shall continue to survive after the expiration or termination of this Agreement, with respect to one or moreDistributionProducts or in its entirety, and thedissolution of theCompany.

16.2.Notices. Notices or other communicationsrequired to be given by eitherPartypursuant to this Agreement shallbe sent in letter form or by facsimile to the address of the otherParty set forth below or to such other address as may from time to time bedesignated by the other Party through notification to such Party at its legal address as in effect from time to time.The dates on which notices shall be deemed to have been effectively given shall be determined as follows:

(a)Noticesgiven bypersonaldelivery shallbe deemedeffectively given onthedate ofpersonaldelivery;

(b) Notices givenin letter form shall be deemed effectively given onthe seventh day after thedate mailed(asindicated bythe postmark)by registered airmail,postage prepaid,orthethird day after delivery to aninternationally recognizedcourierservice;

(c)Notices givenby facsimile shallbedeemed effectively given upon receiptby thesenderof a confirmed transmittalreceipt.

Company:	China BionikMedical RehabilitationTechnology Ltd.
	P.R. China
	Attention: _____________
	Fax Number
BIONIK:	Bionik Laboratories Corp.
	483Bay Street,Office NI05
	Toronto,ONM5G2C9
	Canada
	Attention:PeterBloch
	Phone Number:(416) 640~7887

16.3.Entire Agreement.This Agreement andits schedules andannexeshereto constitutethe complete and only agreementbetween theParties on the subject matterofthis Agreement andreplaces all previous oralor written agreements,contracts,understandings and communications of theParties in respect of the subject matter of this Agreement.

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16.4.NoImplied Waivers. AParty that inaparticular situation waives its rights in respect of a breach of contract by the otherParty shall not be deemedtohave waivedits rights against the otherParty for a similar breach of contract inother situations.

16.5.Severance.If any provision of this Agreement or part thereofisrendered void,illegal or unenforceable inany respectunderanyLaw, the validity,legality and enforceability ofthe remaining provisions shallnot in any way beaffected or impaired thereby.

16.6.Amendments. This Agreement may be amended but only in a writing executed by authorized representatives of the Parties.

16.7.Assignment.Neither Party will be entitled to assignits rights hereunder, or subcontractwith aThirdParty for the performanceof itsobligations hereunder, without the express writtenconsentof the otherParty;provided,however, that upon theprior written notice toIE,the Company may assign all orsome of its rights or obligations hereunder to its ownAffiliates. Subject to the foregoing,thisAgreement willinureto thebenefit of the Parties permittedsuccessors and assigns.

16.8.Relationship ofParties. Each ofBIONIKand the Company is an independent contractorunder this Agreement.Neither such party shallhave any express or impliedright or authorityto assume or create any obligations on behalf of orin the name of the other orto bind the other to any contract, agreement orundertaking with any third party.

16.9.Further Actions. Each Party agrees to execute, acknowledge anddeliversuchfurther instruments,andto do allsuch otheracts, as may be necessary or appropriate in order to carry out the purpose and intent of this Agreement.

16.10.Counterparts.This Agreement may be executed in several counterparts, each of which will be deemed an original,but all of which will constitute one and the same instrument.

[The remainder of this page has been intentionally left blank.]

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INWITNESSWHEREOF,thePartieshave caused thisAgreement to bedulyexecuted and deliveredtobe effectiveas oftheEffectiveDate.

BIONIK LABORATORIES CORP.		ChinaBionikMedical Rehabilitation
		Technology Ltd
By:	/s/ Peter Bloch	By:	/s/ Lev Zhang
Name:	Peter Bloch	Name:	Lev Zhang
Title:	CEO	Title:

/s/ Michael Prywata	/s/ Jia Cai
Michael Prywata	Jia Cai
	/s/ Rongrong Jiang
	Rongrong Jiang

[SignaturePage toDistribution Agreement]

ANNEX A

PRICE AND PAYMENT TERMS

Payment terms are thirty (30) days net of the invoice date

Finished goods transfer price

Annex A

Arm	$	58,500
Arm/Hand	$	75,000
Wrist	$	58,500

ANNEX B

SPECIFICATIONS

Specification documents provided under separate cover

SCHEDULE I

COMPANY TRADEMARKS & IP

As defined in in Schedule III of the related JV agreement dates May 17^th, 2017

SCHEDULE I

CURRENT PRODUCTS

As defined in in Schedule 1 of the related JV agreement dates May 17^th, 2017

SCHEDULE III

BIONIK TRADEMARKS & IP

As defined in in Schedule III of the related JV agreement dates May 17^th, 2017

SCHEDULE IV

Milestones

Description of Event		Deadline
1.	Appointment of a General Manager of the Company	3 months of the Effective Date
2.	Net Sales of $200,000	First anniversary of Effective Date
3.	Net Sales of $500,000	Second anniversary of Effective Date
4.	Net Sales of $2,000,000	Third anniversary of Effective Date
5.	Net Sales of $5,000,000	Fourth anniversary of Effective Date