Exhibit 10.3

 

Certain identified information has been excluded from the exhibit because it is
both (i) not material and (ii) would likely cause competitive harm to the
Company, if publicly disclosed.  Double asterisks denote omissions.

 

 

SUPPLY AGREEMENT

 

THIS SUPPLY AGREEMENT (together with together with all Appendices, Exhibits and
Schedules attached hereto, entered into by the Parties, the “Agreement”) is made
and entered into on the date of last signature (the “Effective Date”) by and
between AKEBIA THERAPEUTICS, INC., a Delaware corporation with an office at 245
First Street, Suite 1100, Cambridge, MA 02142 (“Akebia”) and ESTEVE QUÍMICA,
S.A., a corporation organized under the laws of Spain, with an office at Torre
ESTEVE – Pg. Zona Franca, 109, 08038 Barcelona, SPAIN, (“EQ”).

 

WHEREAS, pursuant to this Agreement, and subject to the terms and conditions and
for the consideration described herein, EQ shall manufacture and supply Product
for Akebia’s commercial purposes (that is to say, for the purposes of commercial
manufacturing of drug product) and Akebia shall pay EQ for such Product as
described herein.

 

NOW THEREFORE, the Parties hereby agree:

 

1.

Agreement Definitions.  When used in this Agreement the following terms and
expressions will have the following meaning:

 

Affiliate means, with respect to either Akebia or EQ, any corporation, company,
partnership, joint venture and/or firm which controls, is controlled by or is
under common control with Akebia or EQ, as applicable. As used in this
definition, “control” means (i) in the case of corporate entities, direct or
indirect ownership of more than fifty percent (50%) of the stock or shares
having the right to vote for the election of directors (or such lesser
percentage that is the maximum allowed to be owned by a foreign corporation in a
particular jurisdiction); and (ii) in the case of non-corporate entities, the
direct or indirect power to manage, direct or cause the direction of the
management and policies of the non-corporate entity or the power to elect more
than fifty percent (50%) of the members of the governing body of such
non-corporate entity.

 

Agreement means this Supply Agreement, together with all Appendixes and
Schedules attached hereto, as amended from time to time by the Parties.

 

Akebia Equipment means any Equipment that, to the extent agreed by the Parties,
is provided by Akebia or its designees for the purposes of the Manufacture of
Product.

 

Akebia Improvements means any Technology and discoveries, inventions,
developments, modifications, innovations, updates, enhancements, improvements,
writings or rights (whether or not protectable under patent, trademark,
copyright or similar laws) that are conceived, discovered, invented, developed,
created, made or reduced to practice during the provision of the Services, (i)
by Akebia; or (ii) by EQ or both Parties jointly, solely to the extent specific
to any Akebia Materials, Manufacture Materials or Product.

 

Akebia Materials means any materials provided by Akebia or its designees to EQ,
for the purposes of providing the Services. Akebia Materials shall be provided
free of cost or charge to EQ.

 

 

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Akebia Technology means any Technology of Akebia (i) existing prior to the
Effective Date, or (ii) developed or obtained by or on behalf of Akebia
independent of this Agreement and without reliance upon the Confidential
Information of EQ. For clarification, Akebia Technology includes the Technology
developed by EQ for or on behalf of Akebia pursuant to the Master Services
Agreement by and between the Parties dated as of July 15, 2015 (hereinafter
“Master Services Agreement”) or any Statement of Work (as such term in defined
in the referred Master Services Agreement) entered into by the Parties
thereunder.

 

Applicable Law means any laws, rules, regulations, guidelines, or requirements
of any Authorities that may be in effect from time to time and that may be
applicable to any of the activities performed by any of the Parties pursuant to
this Agreement (for clarification, when the term Applicable Law is used to
define the legal framework applicable to a Party’s activities under this
Agreement such term shall mean any laws, rules, regulations, guidelines, or
requirements applicable in the country where such Party’s activities are
performed). Notwithstanding the foregoing, international laws and regulations
that apply respectively to each other’s activities shall be observed under this
Agreement.

 

Authority means any supra-national, federal, national, regional, state,
provincial, or local authority responsible for granting approvals relating to
the performance of Services under this Agreement or for issuing any Applicable
Law or for exercising authority with respect to the Manufacture of any Product
in the country where such Manufacture is performed.

 

Batch means a specific quantity of Product that is intended to be of uniform
character and quality, within specified limits, in compliance with the
Specifications, and produced during the same cycle of Manufacture as defined by
the applicable Batch Record.

 

Batch Documentation means, for each Batch, the Certificate of Compliance and the
Certificate of Analysis.

 

Batch Records means the set of detailed processing instructions which EQ follows
or has followed to Manufacture each Batch of Product.

 

Business Day means any calendar day in which the banks in both Cambridge,
Massachusetts (USA) and Barcelona, Spain are open for business.

 

Business Records means all records, including reports, accounts, costs of
procuring raw materials, notes and data of all information and results obtained
from performance of Services.

 

Certificate of Analysis means a document signed by an authorized representative
of EQ, describing testing methods applied to Product and the results of testing.

 

Certificate of Compliance means a document signed by an authorized
representative of EQ, certifying that a particular Batch was Manufactured in
accordance with cGMP, Applicable Laws and the Specifications.

 

Certificate of Lot Disposition a document approved by Akebia’s quality assurance
department, that assigns disposition status to each Batch of Product.

 

cGMP means current good manufacturing practices and regulations applicable to
the Manufacture of Product that are promulgated by any Authority and which may
be in effect from time to time and applicable to the Services.

 

EQ Improvements means any Technology and discoveries, inventions, developments,
modifications, innovations, updates, enhancements, improvements, writings or
rights (whether or not protectable under patent, trademark, copyright or similar
laws) that are conceived, discovered, invented, developed, created, made or
reduced to practice, by or on behalf of EQ, in connection with the performance
of Services under this Agreement, that have general applications and are not
specific to any Akebia Materials, Manufacture Materials or Product, or are
otherwise distinct from Akebia Improvements and Akebia Technology.

 

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EQ Technology means any Technology of EQ (a) existing prior to the Effective
Date; or (b) developed or obtained by or on behalf of EQ independent of this
Agreement and without reliance upon the Confidential Information of Akebia.

 

Equipment means any equipment or machinery, including Akebia Equipment, used by
EQ at the Facilities in the Manufacturing of Product for Akebia.

 

Facility means the premise or premises of the manufacturing plant in [**], owned
and used by EQ, where EQ carries out the Manufacturing of the Product for Akebia
and the premise or premises of the manufacturing plant of [**] where such
Affiliate of EQ shall manufacture certain [**] to be used by EQ in the
Manufacture of the Product.

 

Force Majeure means an event caused by facts or circumstances which a Party
could not foresee or which, if foreseeable, they could not avoid using
commercially reasonable efforts.

 

Gross Negligence means a conscious, voluntary act or omission in reckless
disregard of a legal duty and of the consequences to another party.

 

Manufacture and Manufacturing means any steps, processes and activities
necessary to produce Product including the manufacturing, processing, packaging,
labeling, quality control testing, storage and release of Product for Akebia up
until the time that a Certificate of Compliance is signed.

 

Manufacture Materials means the substances detailed in Appendix A and other
materials that are necessary for production of the Product at EQ facilities and
are required to be procured by EQ for the Manufacture of Product.

 

Manufacturing Process means the processes and activities (or any step in any
such processes or activities) to be carried out by EQ to Manufacture the Product
for Akebia, as contemplated in the Master Batch Record.

 

Master Batch Record means the set of detailed processing instructions which EQ
must follow to Manufacture each Batch of Product for Akebia in accordance with
the Specifications and Applicable Law.

 

Non-Conforming Product means a Batch of Product delivered by or on behalf of EQ
to Akebia, or to a Third Party contractor of Akebia, which, as determined either
between the Parties or by an independent testing laboratory, fails to conform to
the Specifications and such failure existed when the Batch of Product was
delivered by or on behalf of EQ.

 

Non-Conformity means a non-conformity with the Specifications.

 

Party or Parties means EQ and/or Akebia, referred to individually or
collectively, as required by the context.

 

Product means the active pharmaceutical ingredient in vadadustat with the final
Specifications agreed by the Parties as indicated in Section 2.2.1.

 

Services means the Manufacturing and supply of Products by EQ to Akebia as set
forth in this Agreement.

 

Specifications means the technical and quality assurance specifications for the
Product agreed by the Parties as indicated in Section 2.2.1, as they may be
amended by written agreement of EQ and Akebia from time to time.

 

Technology means any methods, techniques, trade secrets, copyrights, know-how,
data, documentation, regulatory submissions, specifications and other
intellectual property of any kind (whether or not protectable under patent,
trademark, copyright or similar laws).

 

 

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Term means the period of time during which this Agreement is in effect as set
forth in Section 10.1 herein.

 

Third Party means any person or entity other than EQ, Akebia and their
respective Affiliates.

 

 

2.

About Services.

 

2.1.Provision of Services and Product.

 

2.1.1.General. EQ will use all such commercially reasonable efforts to perform
the Services and deliver Product as directed by the Binding Forecast (as defined
below) and the subsequent Purchase Orders issued by Akebia and accepted by EQ,
in accordance with the terms and conditions of this Agreement, and exercising
the industry standard of skill, care and diligence.

 

2.1.2.Minimum Purchase Obligation. Unless otherwise agreed to in writing between
the Parties, Akebia shall, upon regulatory approval to market a drug product
containing the Product in the United States or Europe, by the Food and Drug
Administration or the European Medicines Agency respectively (“US/EU Approval”)
and each year during the Term (for this purpose, the first year starting on the
date the referred US/EU Approval is granted and ending on the following 31st of
December and the last year ending on the date this Agreement expires or is
terminated), purchase from EQ, per the terms of this Agreement, the greater of:

 

(a)at least [**]% of Akebia’s, and its Affiliates and licensee’s, global needs
for Product for commercial purposes (the “Global Demand”); or

 

(b)at least [**] of Product in a calendar year.

 

The foregoing shall be considered Akebia’s minimum purchase obligation under
this agreement (“Minimum Purchase Obligation”). Notwithstanding the foregoing,
it is understood between the Parties that, except for the last year of the Term,
failure by Akebia to achieve the Minimum Purchase Obligation for a year shall
not be considered a material breach of this Agreement, provided that: (i) Akebia
has purchased during such year from EQ at least [**]% of its global needs of
Product, (ii) the shortfall to achieve the Minimum Purchase Obligation is added
to the Minimum Purchase Obligation applicable for the following year; and (iii)
such Minimum Purchase Obligation applicable for the following year (with the
addition of the shortfall to achieve the Minimum Purchase Obligation of the
prior year) is achieved by Akebia at the end of such following year. The
foregoing is further provided that if the Minimum Purchase Obligation applicable
for the last year in which this Agreement is in effect is not achieved by
Akebia, Akebia shall pay EQ the Supply Price for [**]% of the difference between
Akebia’s actual purchase amount for the applicable year, and the Minimum
Purchase Obligation for that year.

 

2.1.3.Applicable Law, Approvals. EQ will be responsible for obtaining from any
Authority, at its expense, such approvals as may be necessary for EQ under
Applicable Law for the performance of Services by EQ. At Akebia’s request, EQ
will provide Akebia with copies of all such approvals. EQ will perform the
Services in compliance with Applicable Laws and will also comply with the
provisions of the Foreign Corrupt Practices Act of 1977, the UK Bribery Act, the
1997 OECD Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions, and, if applicable to EQ’s activities,
other local and international anti-corruption and anti-bribery laws. In the
event that Akebia requires EQ to comply with any requirements in addition to
what is set forth in Applicable Laws, Akebia shall inform EQ of such additional
requirements and the Parties shall discuss in good faith how to proceed. EQ
shall make commercially reasonable efforts to accept and implement the
additional requirements as requested by Akebia. Should the Parties fail to agree
on how to proceed, the matter will be resolved as detailed in Section 11.10. EQ
shall not be required to accept any Purchase Order with such additional
requirements until an agreement is reached.

 

 

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2.1.4.Facilities and Staff. EQ will perform all Services at the Facilities,
providing all staff necessary to perform the Services in accordance with the
terms of this Agreement, and shall hold as appropriate at either the Facilities
all Equipment, Akebia Equipment, Akebia Materials and other items used in the
Services. EQ will not change the location of such Facilities or use any
additional facility for the performance of Services under this Agreement without
the prior written consent from Akebia, which will not be unreasonably denied,
withheld or conditioned.

 

2.1.5.Facilities Validation. EQ will be responsible for performing all
validation of the Facilities and Equipment and cleaning and maintenance
processes employed in the Manufacturing Process in accordance with cGMP, EQ’s
standard operating procedures, the applicable Quality Agreement, Applicable
Laws, and in accordance with any other validation procedures requested by Akebia
and approved to in writing to EQ.

 

2.1.6.Process Validation. EQ has, as of the Effective Date of this Agreement,
commenced [**] activities for [**] of Product manufacturing at EQ Facilities.
Such activities are, and will continue to be, conducted in accordance with the
Master Services Agreement. The corresponding work orders under such Master
Services Agreement issued by Akebia and accepted by EQ shall be governed by the
Master Services Agreement, and any other agreements reached by the Parties with
respect such process validation activities, until such activities conclude.

 

2.1.7.Audits. With reasonable notice by Akebia to EQ and during normal business
hours, EQ will allow Akebia employees to, at Akebia’s cost, observe
the  Manufacturing of the Product by EQ at the Facility, review Records
pertaining to Services and inspect the Facilities used by EQ to render Services.
Except with the prior consent of EQ, which shall not be unreasonably denied,
withheld or conditioned, or as required by Authorities, such audits shall not
take place more than [**].  

 

2.1.8.Inspections. EQ will permit Akebia to be present and participate in any
visit to or inspection by any Authority (if and to the extent it relates in any
way to any Product, or the Manufacturing Process). EQ will give as much advance
notice as possible to Akebia of any such visit or inspection. Unless prohibited
by Applicable Law, EQ will provide Akebia with a copy of any report or other
written communication received from such Authority in connection with such visit
or inspection, and any written communication received from any Authority
relating to the Product, the Facility (if it relates to or affects the
Manufacture of Product) or the Manufacturing Process, and, unless prohibited by
Applicable Law, will consult with Akebia before responding to each such
communication. EQ will comply with all reasonable requests and comments by
Akebia with respect to all contacts and communications with any regulatory
authority relating to the Services.

 

2.1.9.Batch Records Retention. EQ will maintain all Batch Records in a secure
area reasonably protected from fire, theft and destruction. All Batch Records
will be the property of Akebia. EQ will not transfer, deliver or otherwise
provide any Batch Records to any third party without the prior written approval
of Akebia. Batch Records will be retained by EQ for a minimum period of [**]
following completion of the Manufacture of such Batch, or longer if required by
Applicable Law (therefore, once such period has expired, EQ shall not have an
obligation under this Agreement to further retain the Records for the Batch of
Product). EQ will, solely at the direction and written request of Akebia, and at
Akebia’s cost and expense, promptly deliver Batch Records to Akebia or its
designee, unless the Batch Records are required to be retained by EQ by
Applicable Law or regulation or for insurance purposes; in which case, EQ shall
deliver copies of such Batch Records to Akebia, and retain copies to satisfy
such Applicable Law or regulation.

 

2.1.10.Business Records Retention. EQ will maintain all Business Records in a
secure area reasonably protected from fire, theft and destruction. Business
Records will be retained by EQ for at least the minimum period required by
Applicable Law. EQ will, and at Akebia’s cost and expense, allow Akebia or its
designee to access (at reasonable and agreed upon times, or by sending copies to
Akebia either physically or electronically, as agreed between the Parties and no
more than once every calendar year) any and all Business Records that, for the
reasons and purposes and within the scope indicated in this Section 2.1.10,
Akebia requests to review. The reasons, scope and purpose for Akebia’s review of
Business Records shall be regarding matters related with this Agreement only
(not with any other matters), which may include, but shall not be limited to,
verification of the price of Manufacture Materials. Review of Business Records
by Akebia shall be conducted under confidential conditions and Akebia shall
treat Business Records as Confidential Information as defined under this
Agreement.

 

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2.1.11.Sample Retention. EQ will take samples of Product Manufactured under this
Agreement and shall retain them for such period and in such quantities as may be
required by cGMP or any Applicable Law. Upon Akebia’s request and at Akebia's
cost and expense, EQ will promptly destroy such samples if EQ has them in excess
of those that EQ is required to retain according to Applicable Law.

 

2.1.12.Safety Procedures. EQ will be solely responsible for implementing and
maintaining health and safety procedures for the performance of Services and for
the handling of any materials or hazardous waste used in or generated by the
Services in accordance with Applicable Law. EQ will develop safety and handling
procedures for Product and for its Manufacture Materials.

 

2.1.13.Testing. The Product Manufactured under this Agreement will be
Manufactured in accordance with the agreed Manufacturing Process, the
Specifications and cGMP. Each Batch of Product will be sampled and tested by EQ
against and in accordance with the Specifications, and the quality assurance
department of EQ will review the documentation relating to the Manufacture of
the Batch and will assess if the Manufacture has taken place in compliance with
cGMP and the Manufacturing Process.

 

2.2.Manufacturing Process, Specifications and Akebia Technology Transfer.  

 

2.2.1.Technology Transfer. As soon as possible after the execution of this
Agreement, following the Process Validation, the Parties will agree on the
Manufacturing Process and the Specifications, and, unless agreed by the Parties
in writing to the contrary, Akebia will transfer to EQ all Akebia Technology
required for the Manufacture of the Product which is not already in the
possession of EQ. Any Akebia Technology transferred to EQ for the development
and/or Manufacturing of the Product has been and shall be generated in
compliance with any Applicable Law, and shall be true, complete and correct in
all material respects, to the best of Akebia’s knowledge.

 

2.2.2.Changes to Manufacturing Process or Specifications. Any change to the
Manufacturing Process or Specifications must be approved in advance by EQ and
Akebia, irrespective of whether the change is proposed by either Party or
becomes mandatory under any Applicable Law. Before approving and implementing
any such change, the Parties will negotiate in good faith and agree upon the
allocation of any resulting cost savings or incremental additional costs to be
incurred by EQ as a result of such change. However, in case of changes that
become mandatory under any Applicable Law, unless otherwise agreed to between
the Parties, Akebia shall bear all resulting additional costs, except if such
changes are also legally required for products manufactured by EQ for other
customers, in which case the resulting additional costs will be proportionally
distributed among all such customers and Akebia.

 

Supply Price shall be adjusted each year, as required, to fully absorb the
yearly amortization of such additional costs resulting from such mandatory
changes. For clarification, reductions or savings in EQ’s Manufacturing costs
that result from the implementation by EQ of improvements, changes or
efficiencies developed solely by EQ in the Manufacturing Process or, in general,
the Manufacturing activities of EQ, shall not result in a reduction of the
supply Price unless otherwise specifically agreed by the Parties.  

 

2.3.Planning, Forecasts.  

 

2.3.1.On the [**] of each calendar quarter, Akebia will provide EQ a rolling
forecast for Akebia’s anticipated need for Product supplied by EQ each calendar
quarter in the following [**] months, or shorter period as may remain under the
Term (“Proposed Forecast”). The first [**] months of each Proposed Forecast
shall be binding on the Parties, once accepted by EQ (“Binding Forecast”). The
remaining [**] months will be projected in good faith, but will remain
non-binding (“Non-Binding Forecast”).

 

 

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The first Proposed Forecast under this Agreement is the fully executed version
of the forecast that was received by email by EQ from Akebia on [**] (“First
Forecast”). Upon execution of this Agreement, the First Forecast shall be
considered accepted by EQ, and, therefore, the initial [**] months of the First
Forecast shall be binding on the Parties and become the first Binding Forecast.

 

For future forecasts, EQ must communicate its written acceptance or rejection of
the Proposed Forecast to Akebia within [**] of its receipt by EQ. Failure by EQ
to accept or reject the Proposed Forecast within [**] of its receipt will result
in the first [**] months of Proposed Forecast becoming a Binding Forecast and,
therefore, become binding upon both Parties. For clarification, upon acceptance
of a Proposed Forecast by EQ, only the first [**] months of Proposed Forecast
become a Binding Forecast and, therefore, the rest of the months in the Proposed
Forecast remain a Non-Binding Forecast.

 

2.3.2.Except with EQ’s specific written acceptance, which shall not be
unreasonably denied, withheld or conditioned, the volumes for a new quarter in
the Binding Forecast shall not be below [**] percent ([**]%), nor shall it be
above [**] percent ([**]%) of the volumes forecasted for such quarter in the
previous Non-Binding Forecast. Except with EQ’s specific written acceptance,
which shall not be unreasonably denied, withheld or conditioned, a newly
provided forecast shall not amend a previous Binding Forecast.

 

Unless otherwise agreed in good faith between the Parties, the maximum aggregate
volume of Product that EQ anticipates being able to Manufacture and supply
during each period of [**] months while this Agreement is in effect is [**] of
total Product (“Maximum Volume”) and, therefore, except with the specific
written acceptance of EQ, the Forecasts provided by Akebia shall not exceed the
Maximum Volume during any [**] months period during the Term.

 

2.3.3.Events of a regulatory nature that prevent Akebia from launching its
product, vadadustat, (e.g. delay in market approvals from regulatory agencies,
etc.) which then prevents or delays Akebia from purchasing an amount of Product
within a Binding Forecast period, shall not constitute a material breach of this
Agreement on the part of Akebia, and any such shortfall or gap due to delays of
a regulatory nature will be resolved in good faith between the Parties. The
foregoing is provided, however, that Akebia shall pay to EQ:

 

(a) the Supply Price corresponding to the amount of Product already Manufactured
and Product in-process (“Undelivered Product”). Fully Manufactured Undelivered
Product which Supply Price is paid by Akebia to EQ as contemplated in this
Section will be made available by EQ to Akebia promptly upon completion of the
Manufacturing process at the time of their completion in accordance with the
delivery terms set forth in this Agreement. Notwithstanding the foregoing, the
Parties may use reasonable factors, including the shelf-life of the completed
Undelivered Product, to together decide whether Undelivered Product may be used
to fulfill future Purchase Order(s) as part of future Binding Forecasts rather
than delivering the Undelivered Product promptly as set forth above. In that
case, each unit of Undelivered Product that the Parties agree may be used to
fulfill future Purchase Order(s) will be kept by EQ, and made part of future
Purchase Order(s) as agreed by the Parties. Akebia shall not be obligated to pay
the Supply Price for such Undelivered Product until it is invoiced by EQ in
accordance with sections 2.4 and 2.7 below; and

 

(b) the costs and expenses associated with procuring the Manufacturing Materials
or any other non-cancellable obligations that EQ has reasonably incurred in
order to supply Product under the Binding Forecast(s). Upon receipt of payment
by Akebia for the Manufacturing Materials the Manufacture Materials shall become
Akebia property, and delivered to Akebia at Akebia’s cost, or otherwise disposed
of as agreed between the Parties. Notwithstanding the foregoing, the Parties may
use reasonable factors, including the shelf-life of any such Manufacture
Materials, to together decide whether such Manufacture Materials may be used to
Manufacture future Products as part of future Binding Forecasts. In that case,
those Manufacturing Materials that the Parties agree that may be used to
Manufacture Products as part of future Binding Forecasts shall not be paid by
Akebia as contemplated in this Section 2.3.3 (b) but shall be kept by EQ for its
use in the Manufacture of such future Products.

 

If Akebia finally and definitely ceases or decides not to pursue the regulatory
approval of any product containing the Product, Akebia shall be entitled to
terminate this Agreement with immediate effect; provided, however, that the
provisions of Section 10.5 shall also apply in the event of such termination.

 

 

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2.4.Purchase Orders.

 

2.4.1.Throughout the Term, Akebia shall submit to EQ a binding Purchase Order
for the volume of Product requested for the upcoming Binding Forecast period
(“Purchase Order”) in Akebia’s standard format to facilitate payment to EQ.
Except in the event that it is otherwise specifically agreed by the Parties for
an specific Purchase Order, the terms of a Purchase Order shall not change or
add to the terms of this Agreement. The terms of Purchase Orders submitted by
Akebia may only be changed with the specific written agreement of both Parties.
The first Purchase Order after the Effective Date of this Agreement shall be
submitted by Akebia to EQ no later than [**] after the Effective Date, and shall
represent a Purchase Order for the first [**] months of the First Forecast.

 

2.4.2.EQ shall provide, no later than [**] after receipt of each Forecast from
Akebia, an updated production forecast for the following [**] months in order
for Akebia to plan for Batch Documentation review.

 

2.4.3.EQ shall deliver the Product on the date agreed by the Parties in the
corresponding Purchase Order (provided that deliveries in +/- [**] from the
delivery date agreed in the Purchase Order and shortfalls in Product delivery of
less than [**] percent ([**]%) of the agreed volume of Product in a Purchase
Order shall be accepted), which shall be no less than [**] from the date of
receipt of the Purchase Order by EQ.

 

Shortfalls in Product delivery of less than [**] percent ([**]%) shall be
resolved in good faith between the Parties aiming to achieve delivery of one
hundred percent (100%) of the Product in the Purchase Order affected by the
shortfall as soon as reasonably practical for EQ.

 

If EQ is unable to deliver the Product within [**] from the agreed date or in at
least [**]% of the agreed volume of Product, the Parties will discuss
appropriate steps to alleviate such a shortfall but Akebia will have the right,
in its discretion, to (i) require EQ to use commercially reasonable efforts to
make up the shortfall as promptly as reasonably practical or (ii) have the
quantity of the shortfall of Product be manufactured and supplied by a Third
Party. If Akebia elects to secure from a Third Party any quantity of Product to
make up the shortfall, EQ shall (a) refund to Akebia the Price paid to EQ for
the Product in the shortfall (provided that if the Price for the Product in the
shortfall has not been yet paid by Akebia, such Price shall not have to be paid
by Akebia), and (b) pay to Akebia the Price paid to the Third Party manufacturer
beyond the Price that Akebia would have had to pay to EQ for the shortfall
quantity of Product under this Agreement.

 

2.4.4.EQ shall not be liable for any delay in supplying Product when such delay
is due to: (a) reasonably unforeseeable and significant Manufacture Material(s)
supply chain issues that could not have been prevented or avoided through
reasonable means by EQ; or (b) EQ not being provided, or being provided with
defective Akebia Materials, Akebia Equipment or Akebia Technology for EQ to
Manufacture the Product, or (c)  any fact, circumstance or reason attributable
to Akebia or its designees. Notwithstanding the foregoing, the Parties expect EQ
to maintain a comprehensive, reasonable (as per industry standards) supply chain
strategy with respect to Manufacture Materials, and EQ shall be liable under the
terms of Section 2.4.3 for any delay to Product delivery caused by a failure of
EQ to maintain a reasonable risk mitigation strategy reasonably capable of
mitigating  any possible issues of sourcing Manufacture Materials.

 

2.5.Supply of Materials.  

 

2.5.1.Except for the Akebia Materials that the Parties agree shall be supplied
by Akebia to EQ, EQ shall be responsible for producing or procuring through the
appropriate Third Party suppliers, all the Manufacture Materials required by EQ
for the Manufacture of the Products. EQ shall be responsible for ensuring that
such Manufacture Materials comply with the Specifications and for adequately
reviewing, testing and storing such Manufacture Materials.

 

 

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2.5.2.EQ agrees (a) to store all Akebia Materials according to the terms and
conditions set forth in this Agreement and directions provided by Akebia; (b)
not to provide Akebia Materials to any Third Party without the express prior
written consent of Akebia; (c) not to use Akebia Materials for any purpose other
than conducting the Services; and (d) to destroy or return to Akebia, in
Akebia’s discretion and at Akebia’s cost and expense, all unused quantities of
Akebia Materials according to Akebia’s written directions.

 

2.5.3.Akebia shall be responsible for delivery of the Akebia Materials [**] to a
Facility. If applicable, EQ shall provide Akebia with reasonable assistance to
obtain and maintain any necessary import approvals, licenses, customs clearance
applications, forms and other correspondence in connection with the delivery of
the Akebia Materials.

 

2.5.4.Akebia will ensure that Akebia Materials are delivered timely and that
such Akebia Materials comply with their respective specifications, if
applicable. Prior to using any Akebia Materials, EQ will review and test them
against such Specifications, if applicable. In the event of any disagreement
between the Parties regarding whether any Akebia Materials meet the agreed
specifications or not, the provisions of Section 2.7 hereof shall apply.

 

2.5.5.Akebia will at all times retain title to and ownership of the Akebia
Materials. EQ will provide within a Facility an area or areas where the Akebia
Materials, the Product, and any Manufacture Materials, are segregated and stored
in accordance with any applicable specifications and cGMP, and in such a way as
to be able at all times to clearly distinguish such Akebia Materials, Product,
intermediates and components from other products and materials belonging to EQ,
or held by it for a Third Party. EQ will ensure that Akebia Materials, the
Product, and any Manufacture Materials, are free and clear of any liens or
encumbrances attributable to or related to EQ or its Affiliates. EQ will at all
times take such measures as are reasonably customary to protect the Akebia
Materials, the Product, and any intermediates and components of Akebia Materials
or Product, from loss, damage and theft at all stages of the Manufacturing
Process. EQ will immediately notify Akebia if at any time it believes any Akebia
Materials, the Product, or any Manufacture Materials, have been damaged, lost or
stolen.

 

2.6.Supply of Equipment.  

 

2.6.1.Prior to accepting any Binding Forecast, EQ will verify that it has all
Equipment necessary to perform the Services. In case EQ does not have certain
Equipment necessary to perform the Services, the Parties shall discuss how to
proceed before any Purchase Order relating to such Binding Forecast is accepted.

 

2.6.2.To the extent agreed by the Parties, Akebia will timely deliver the Akebia
Equipment to EQ. EQ will not use the Akebia Equipment except in performance of
services under this Agreement and shall follow the instructions and comply with
the specifications of the Akebia Equipment. Title to any Equipment other than
the Akebia Equipment will remain with EQ. Title to the Akebia Equipment will
remain with Akebia and EQ will ensure that the Akebia Equipment is properly
labeled as Akebia property and remains free and clear of any liens or
encumbrances attributable to or related to EQ or its Affiliates. At Akebia’s
written request and cost the Akebia Equipment will be returned to Akebia, or to
Akebia’s designee. Within [**] after any termination or expiration of this
Agreement, EQ shall notify Akebia in writing if any Akebia Equipment remains at
an EQ Facility. If, after [**] from the day in which Akebia receives the
referred written notice from EQ, EQ has not received a written notice from
Akebia requesting EQ to return the Akebia Equipment to Akebia or if in such
notice Akebia only requests that some of the Akebia Materials are returned, EQ
shall have the right to either (a) dispose of any remaining Akebia Equipment at
Akebia’s cost; or (b) purchase from Akebia remaining Akebia Equipment at the
current market value of such Akebia Equipment, without markup. EQ will be
responsible, at its own cost, for ordinary maintenance of the Akebia Equipment
while in EQ’s possession as per reasonable instructions provided by Akebia.
Repairs of any Akebia Equipment shall be at Akebia's cost and expense, unless
repair is needed due to EQ’s negligence or wrongful acts. EQ will immediately
notify Akebia if at any time it believes any Akebia Equipment has been damaged,
lost or stolen.

 

 

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2.7.Delivery and Acceptance Process.  

 

2.7.1.Release of Product and Invoicing. If, based upon the review performed by
EQ, a Batch of Product conforms to the Specifications and was Manufactured
according to cGMP and the Manufacturing Process, then a Certificate of
Compliance shall be completed by EQ, [**]. At the time of invoice, EQ will
deliver the Batch Documentation to Akebia. It is understood that EQ agrees to
provide Akebia supporting Batch Documentation as it is completed throughout a
Manufacturing campaign. Upon Akebia’s request, EQ shall also deliver to Akebia
all raw data and other Batch Records in the possession or under the control of
EQ relating to the Manufacture of each Batch of Product.

 

No delivery of Product by EQ will occur without prior release for delivery by
Akebia’s quality assurance department. Akebia’s Certificate of Lot Disposition
must be received by EQ prior to delivery of Product. For such purpose, Akebia’s
quality department will review the documentation provided by EQ for the Batch of
Product and, within [**] of receipt of such documentation, will provide EQ with
the Certificate of Lot Disposition or, otherwise, with its justified objections
to issuing the Certificate of Lot Disposition. Akebia’s quality assurance
department will not refuse to issue the Certificate of Lot Disposition for any
reasons other than objections relating to the quality of the Product for which
such certificate should be issued.

 

2.7.2.Delivery of Product. If Akebia’s quality assurance department issues a
Certificate of Lot Disposition, EQ shall deliver Product in accordance with the
agreed instructions for shipping and packaging agreed to by the Parties in
writing. Delivery will be [**] and Akebia shall be responsible for Product after
title and risk of loss vests with Akebia in accordance with [**]. Akebia shall
collect the Products as soon as reasonably practicable after the date in which
EQ has received the above-mentioned Certificate of Lot Disposition from Akebia´s
quality assurance department, but, except as otherwise specifically agreed by
the Parties, within [**] from the date of the invoice by EQ.

 

If Akebia does not collect the Products within the referred [**] period
referenced above, and unless otherwise specifically agreed by the Parties,
either;

 

(a)If such delay in collection of the Product is caused by Akebia, EQ shall be
entitled to charge a reasonable storage fee to Akebia until the date that Akebia
actually collects the Products and, in case the Product is to be shipped outside
the European Union, EQ shall invoice Akebia the corresponding Value Added Tax
(“VAT”). EQ shall provide Akebia with reasonable assistance to obtain and
maintain any necessary export approvals, licenses and customs clearance
applications, forms and other correspondence in connection with the Product.

 

(b)If such delay in collection of the Product is caused, in whole or in part, by
EQ, it is agreed that EQ, rather than Akebia, shall appear as exporter of record
in the corresponding export documentation (DUA). Any such change in exporter of
record shall not change the commercial conditions that have been agreed by the
Parties under this Agreement (for example, risk of loss and INCOTERMS™ 2010).

 

2.7.3.Inspection and Acceptance of Product. Any claim of Akebia or its designees
concerning Non-Conforming Products shall be communicated by Akebia to EQ in
writing as soon as possible but in no event later than [**] from its discovery
by Akebia or its designees. Any such Non-Conformity claim will need to be
accompanied by a sample of the Product analyzed by Akebia and with all relevant
documentation regarding such analysis, including but not limited to the
Certificate of Analysis and a report indicating the methods used by Akebia. For
clarification, after the end of the above-mentioned period to claim a
Non-Conformity of Products, Akebia and its designees shall not be entitled to
claim that the Products delivered by EQ were Non-Conforming Products. Also,
Akebia and its designees shall not be entitled to claim that the Products
delivered by EQ were Non-Conforming Products if Akebia, or as appropriate, its
designees, fail to perform the tests, analysis, inspections and/or reviews of
the Product appropriately and in a timely manner, and/or complete its related
documentation required under Applicable Laws, the Quality Agreement, and/or
cGMP.

 

 

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2.7.4.Product Quality Disputes. In case of any disagreement between the Parties
regarding as to whether any a Product is Non-Conforming Product, the quality
assurance representatives of the Parties will attempt to resolve any such
disagreement in good faith. If the disagreement is not resolved in a reasonable
time (which will not exceed [**]), a representative sample of the Product and/or
relevant documentation will be submitted to an independent testing laboratory of
recognized standing in the industry and agreed upon by the Parties for tests and
final determination of whether or not such Product is a Non-Conforming Product.
Such laboratory will use the test methods contained in the applicable
Specifications. The determination of conformance by such laboratory will be
final and binding on the Parties. The fees and expenses of the laboratory will
be paid by the Party against whom the determination is made.

 

2.7.5.Product Non-Conformance and Remedies. If any Product is agreed by the
Parties, or is determined in accordance with Section 2.7.4., to be a
Non-Conforming Product, EQ shall be liable to Akebia for such Non-Conforming
Product; provided that (except in respect to Third Party claims, which shall be
subject to the provisions of Section 9 below) EQ's liability shall be limited
to, at Akebia’s option, (i) refunding in full the Price paid by Akebia for the
Non-Conforming Product, including the cost of Akebia Materials used in the
Manufacture of such Non-Conforming Product; or (ii) at EQ’s cost and expense,
supply to Akebia Product that is not Non-Conforming Product (in the same
quantity as the Product that has been agreed by the Parties to be Non-Conforming
Product) as soon as reasonably possible; or (iii) if possible according to
Applicable Law and cGMP, reworking or reprocessing the Non-Conforming Product,
at EQ’s cost and expense, so that the Non-Conforming Product conforms to
Specifications.

 

Notwithstanding the foregoing, should EQ provide Non-Conforming Product that,
after a diligent quality investigation performed in accordance with cGMP, the
Quality Agreement, and industry good practices, are attributable, in whole or in
part, to EQ’s failure to comply with cGMP, the Quality Agreement, or their
obligations under this Agreement, EQ shall be responsible, up to the amounts
indicated in Section 9.5 hereof, for the resulting costs and expenses to Akebia,
including, without limitation, the costs of any resulting recall, expenses
related to communications and meetings with all required regulatory agencies,
expenses of replacement stock of Product, the cost of notifying customers, the
costs associated with shipment and destruction of recalled drug product
containing the Product from customers, and replacement Product equal to the
amount of Product found to contain the Non-Conformity.

 

EQ shall not be responsible for the costs associated with any Non-Conforming
Product that has been detected by Akebia and Akebia fails to communicate it to
EQ within [**], or if Akebia (or the Third Party that receives the Product
supplied by EQ on behalf of Akebia) fails to appropriately and timely perform
the tests, analysis, inspections and/or reviews of the Product, and/or complete
its related documentation required under Applicable Laws, the Quality Agreement,
and/or industry good practices.

 

2.7.6.Disposition of Non-Conforming Product. The ultimate disposition of
Non-Conforming Product, which shall be carried out in accordance with Applicable
Law, will be the responsibility of Akebia’s quality assurance department. The
costs associated with the disposal of any Non-Conforming Product shall be borne
by EQ.

 

2.8.Subcontracting.  With Akebia’s prior written consent, EQ may subcontract the
performance of specific obligations of EQ to an Affiliate of EQ or to a
qualified Third Party; provided, that (a) such Affiliate or Third Party performs
those Services in a manner consistent with the terms and conditions of this
Agreement; and (b) EQ remains liable for the performance of such Affiliate or
Third Party.

 

2.9.Quality Agreement.  In accordance with Applicable Law, the Parties shall
agree upon a quality agreement describing, in accordance with this Agreement,
the quality assurance responsibilities and obligations of the Parties for the
Manufacture of Product (“Quality Agreement”).

 

 

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3.

Price and Payments.

 

3.1.Price. Price for the Product supplied by EQ to Akebia during the Term of
this Agreement shall be determined as set forth in Appendix B (“Price or Supply
Price”). Each invoice from EQ will include such Price and the quantities of
Product per the applicable Purchase Order.

 

3.2.Modifications in Price. Notwithstanding the foregoing, the Parties agree
that any change in the EQ cost of Manufacture Materials necessary to manufacture
Product shall be [**]. EQ shall diligently monitor any such change in cost at
least on a [**] basis, and shall [**] the Price for the Product in any
subsequent delivery of Product where Manufacture Materials with such change in
costs are used. Accuracy as to the monitoring and representation of changes in
Manufacture Material costs shall be verifiable by Akebia in any audit of EQ by
Akebia.

 

3.3.Invoice. EQ will invoice Akebia referencing in each such invoice the
Purchase Order(s) to which the invoice relates. EQ will invoice on the date in
which, as contemplated in Section 2.7.1 hereof, [**].

 

3.4.Payments. Payment will be due [**] after the date of the invoice. Akebia
will make all payments pursuant to this Agreement by wire transfer to a bank
account designated by EQ, without deduction of any transfer charges or banking
commissions. Payments must be made in all cases under these conditions even if,
for whatever reason, Akebia does not take delivery of the Products after EQ has
communicated that they have been cleared for delivery The foregoing is except
and provided that Akebia will be entitled to withhold payment of the part of
EQ’s invoices that refer to Products that Akebia claims to be Non-Conforming in
accordance with Section 2.7.5. hereof. If the Parties agree or it is ultimately
determined, as indicated in Section 2.7.5, that (i) the Products were
Non-Conforming Products, the remedies also indicated in Section 2.7.5 shall
apply, or that (ii) the Products were conforming to the Specifications, Akebia
will immediately pay to EQ the withheld part of EQ’s invoice, together with the
interest indicated in Section 3.5.

 

3.5.Interest on Late Payments. Any amounts not paid on the date due under this
Agreement shall be subject to interest from the date payment was due through and
including the date upon which payment is received. Interest shall accrue on a
daily basis and be calculated on the assumption of a 360 day year and using an
annual rate equal to the official published one year EURIBOR (“Euro Interbank
Offered Rate”), as may vary during the Term, plus [**] basis points. Interest
shall be payable on demand. Interest shall not be compounded.

 

3.6.Taxes. The Prices specified in this Agreement are exclusive of any sales,
use, excise, VAT or similar taxes, and of any export and import duties which may
be levied as a result of the shipment of the Product. It shall be EQ’s sole
obligation to report all compensation received by EQ hereunder for Services as
may be required by Applicable Law. Akebia shall pay all applicable sales and use
taxes, including all applicable goods and services tax, value added tax, local
taxes, applicable duties, electronic delivery taxes, sales, use and excise
taxes, levies and import and export fees (collectively, “Taxes”) that are
required by law in connection with the provision of Services and that are not
recoverable by EQ. EQ shall reasonably cooperate and assist Akebia in recovering
any non-applicable taxes due to Akebia. Where any Taxes are paid directly to a
tax authority or government by Akebia, Akebia shall not deduct this amount from
any amount due to EQ.  

 

4.

Representations and Warranties of EQ.  EQ represents and warrants as follows:

 

4.1.Organization of EQ. EQ is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization.

 

4.2.Enforceability of this Agreement.  The execution and delivery of this
Agreement by EQ has been authorized by all requisite corporate or company
action.  This Agreement is and will remain a valid and binding obligation of EQ,
enforceable in accordance with its terms, subject to Applicable Laws.

 

 

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4.3.Absence of Other Contractual Restrictions.  EQ is under no contractual or
other obligation or restriction that is inconsistent with EQ’s execution or
performance of this Agreement.  EQ will not enter into any agreement, either
written or oral, that would conflict with EQ’s responsibilities under this
Agreement.

 

4.4.Qualifications of EQ Personnel.  EQ has engaged, will engage and will cause
its Affiliates involved in rendering Services to engage, employees and permitted
subcontractors including consultants (collectively, “EQ Personnel”) with the
proper skill, training and experience to provide services detailed in this
Agreement.  The foregoing is provided that the involvement of Affiliates of EQ
in providing the Services shall require Akebia’s prior approval (which is hereby
granted by Akebia for the manufacturing of certain intermediates of the Product
by and at the Facilities. Before providing Services, all EQ Personnel must be
subject to binding commitments with EQ under which they have confidentiality
obligations with regard to Akebia’s Confidential Information (as defined below)
that are consistent with the terms of this Agreement.

 

4.5.Compliance.  EQ will perform all Services with requisite care, skill and
diligence, in accordance with Applicable Law, cGMPs and industry standards and
that at the time of delivery to Akebia, the Product Manufactured by EQ shall
conform to the Specifications and will not be will not be adulterated or
misbranded within the meaning of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 335(a).

 

4.6.Conflicts with Rights of Third Parties.  To EQ’s knowledge, having made
reasonable investigations in the ordinary course of business, the use of EQ
Technology by EQ for the Manufacture of the Products for Akebia as contemplated
in this Agreement will not violate any patent, trade secret or other proprietary
or intellectual property rights of any Third Party.

 

4.7.Absence of Debarment.  EQ, its Affiliates, EQ Personnel and each of their
respective officers and directors, as applicable: (a) have not been debarred and
are not subject to a pending debarment, and will not use in any capacity in
connection with Services any person who has been debarred or is subject to a
pending debarment, pursuant to section 306 of the United States Food, Drug and
Cosmetic Act, 21 U.S.C. § 335a; (b) are not ineligible to participate in any
federal and/or state healthcare programs or federal procurement or
non-procurement programs (as that term is defined in 42 U.S.C. 1320a-7b(f)); (c)
are not disqualified by any government or regulatory authorities from performing
specific services, and are not subject to a pending disqualification proceeding;
and (d) have not been convicted of a criminal offense related to the provision
of healthcare items or services and are not subject to any such pending action.
EQ will notify Akebia immediately if EQ, its Affiliates, any EQ Personnel, or
any of their respective officers or directors, as applicable, is subject to the
foregoing, or if any action, suit, claim, investigation, or proceeding relating
to the foregoing is pending, or to the best of EQ’s knowledge, is threatened.

 

5.

Representations and Warranties of Akebia.  Akebia represents and warrants as
follows:

 

5.1.Organization of Akebia.  Akebia is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization.

 

5.2.Enforceability of this Agreement.  The execution and delivery of this
Agreement by Akebia has been authorized by all requisite corporate or company
action.  This Agreement is and will remain a valid and binding obligation of
Akebia, enforceable in accordance with its terms, subject to Applicable Laws.

 

5.3.Absence of Other Contractual Restrictions.  Akebia is under no contractual
or other obligation or restriction that is inconsistent with Akebia’s execution
or performance of this Agreement.  Akebia will not enter into any agreement,
either written or oral, that would conflict with Akebia’s responsibilities under
this Agreement.

 

 

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5.4.Akebia Technology Transfer. To the best of Akebia’s knowledge, any Akebia
Technology transferred to EQ for the development and/or Manufacturing of the
Product has been and shall be generated in compliance with any Applicable Law
and shall be true, complete and correct in all material respects and sufficient
for its intended purpose and use.

 

5.5.Conflicts with Rights of Third Parties. To its knowledge, having made
reasonable investigations in the ordinary course of business, the use by EQ of
Akebia Materials and Akebia Technology as provided to EQ for the provision of
the Services will not violate any patent, trade secret or other proprietary or
intellectual property rights of any Third Party.

 

5.6.Compliance with Applicable Law. Any activities carried out by Akebia, its
Affiliates, officers, directors and employees in connection with this Agreement
shall comply with any Applicable Law. When inspecting the Product supplied by EQ
and testing it for compliance with the Specifications, Akebia shall comply with
any Applicable Law and shall do so with appropriate care, skill and diligence.

 

6.

Disclaimer of Other Representations and Warranties. EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, EACH PARTY SPECIFICALLY DISCLAIMS, WHETHER WRITTEN OR
ORAL, OR EXPRESS OR IMPLIED, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR USE.

 

7.

Proprietary Rights.

 

7.1.Akebia Technology. All rights to and interests in Akebia Technology will
remain solely in Akebia and, other than as set forth herein, no right or
interest therein is transferred or granted to EQ under this Agreement. EQ
acknowledges and agrees that it does not acquire a license or any other right to
Akebia Technology except for the limited purpose of carrying out its duties and
obligations under this Agreement and that such license will expire upon the
expiration or termination of this Agreement.

 

7.2.Akebia Improvements. EQ shall communicate to Akebia any Akebia Improvements
made by EQ in the performance of the Services. All rights to and interest in
Akebia Improvements (patentable or not) will remain solely in Akebia and, other
than as set forth herein, no right or interest therein is transferred or granted
to EQ under this Agreement.

 

7.3.EQ Technology. All rights to and interests in EQ Technology will remain
solely in EQ and, except as otherwise set forth in this Agreement, no right or
interest therein is transferred or granted to Akebia under this Agreement. EQ
hereby grants to Akebia a [**] license in the EQ Technology to Akebia solely to
use Product delivered by EQ to Akebia under this Agreement for (i) the
development,  manufacture and/or commercialization (directly by Akebia, through
Akebia’s designees or by Akebia’s sub-licensees) of drug products, or (ii) any
other legally permitted use of such Product delivered by EQ (for clarification,
the license contemplated in this paragraph shall not allow Akebia, its designees
or its sub-licensees to use EQ Technology for the manufacture, directly or
through its designees, of drug products that do not contain Product delivered by
EQ to Akebia under this Agreement).

 

7.4.EQ Improvements. EQ shall communicate to Akebia any EQ Improvements made by
EQ in the performance of the Services. Any and all rights and title to EQ
Improvements made by EQ in the performance of the Services (patentable or not)
will be the sole and exclusive property of EQ.

 

 

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8.

Confidential Information.

 

8.1.Definition. “Confidential Information” means any and all non-public
scientific, technical, financial or business information, or data or trade
secrets in whatever form (written, oral or visual) that is furnished or
otherwise made known directly or indirectly by one Party (the “Discloser”) to
the other (the “Recipient”) pursuant to the terms of this Agreement or otherwise
in connection with this Agreement, whether marked confidential or not, and
irrespective of whether such information was furnished or otherwise made known
prior to or after the Effective Date. Prior to the Effective Date, the Master
Services Agreement between the Parties shall govern.

 

8.2.Obligations.  During the term of this Agreement and for a period of [**]
thereafter (and in the case of trade secrets, until such time as Discloser no
longer treats such information as a trade secret), Recipient agrees to (a) hold
in confidence all Discloser’s Confidential Information, and not disclose
Discloser’s Confidential Information except as expressly provided in Section
8.3, without the prior written consent of Discloser; (b) use Discloser’s
Confidential Information solely to carry out Recipient’s rights or obligations
under this Agreement; (c) treat Discloser’s Confidential Information with the
same degree of care Recipient uses to protect Recipient’s own confidential
information but in no event with less than a reasonable degree of care; and (d)
reproduce Discloser’s Confidential Information solely to the extent necessary to
carry out Recipient’s rights or obligations under this Agreement, with all such
reproductions being considered Discloser’s Confidential Information.

 

8.3.Permitted Disclosures.  Recipient may provide Discloser’s Confidential
Information solely to its employees or contractors (but if Recipient is EQ, then
solely to EQ Personnel who are in compliance with Section 4.4 hereof) on a
need-to-know basis and solely as necessary to carry out Recipient’s rights or
obligations under this Agreement; provided, that Recipient remains liable for
the compliance of such employees or contractors (or if EQ is Recipient, the
compliance of such EQ Personnel) with the terms of this Agreement.  If Recipient
is required by a governmental authority or by order of a court of competent
jurisdiction to disclose any of Discloser’s Confidential Information, Recipient
will give Discloser prompt written notice of such requirement or order and
Recipient will take all reasonable and lawful actions to avoid or minimize the
degree of such disclosure.  Recipient will cooperate reasonably with Discloser
in any efforts to seek a protective order.

 

8.4.Exceptions.  Recipient’s obligations of non-disclosure and non-use under
this Agreement will not apply to any portion of Discloser’s Confidential
Information that Recipient can demonstrate, by competent proof:

 

(a)is generally known to the public at the time of disclosure or becomes
generally known through no wrongful act on the part of Recipient;

 

(b)is in Recipient’s possession at the time of disclosure other than as a result
of Recipient's breach of any legal obligation;

 

(c)becomes known to Recipient on a non-confidential basis through disclosure by
sources other than Discloser having the legal right to disclose such
Confidential Information; or

 

(d)is independently developed by Recipient without reference to or reliance upon
Discloser’s Confidential Information.

 

8.5.Public Announcements. Neither Party shall issue any public announcement,
press release, or other public disclosure regarding this Agreement or its
subject matter without the other Party’s prior written consent, except for any
such disclosure that is, in the opinion of the disclosing Party’s counsel,
required by Applicable Law or the rules or common practices of a stock exchange
on which the securities of the disclosing Party are listed.  Both Parties agree
that each of them may disclose that Akebia has engaged EQ as a manufacturer for
the Product.

 

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9.

Indemnification and Insurance.

 

9.1.Indemnification by EQ.  EQ will indemnify, defend and hold harmless Akebia,
its Affiliates, and its and their respective officers, directors, employees and
agents (collectively, the “Akebia Indemnitees”) against any and all losses,
damages, liabilities or expenses (including reasonable attorney’s fees and other
costs of defense) (collectively, “Losses”) that any of them may suffer in
connection with any and all suits, investigations, claims, or demands of Third
Parties (collectively, “Third Party Claims”) arising from, relating to or
occurring as a result of (a) any EQ Indemnitee’s negligence or willful
misconduct in performing its obligations under this Agreement; (b) the use of EQ
Technology by EQ for the Manufacture of the Products for Akebia violating any
patent, trade secret or other proprietary or intellectual property rights of any
Third Party; or (c) EQ’s breach of this Agreement; except to the extent that
such Third Party Claims are due to any breach by Akebia of its obligations under
this Agreement or the negligence or willful misconduct of Akebia. For clarity,
for product liability claims, EQ shall not indemnify Akebia if the relevant
Product conformed to the Specifications at the time of delivery by EQ, or if the
failure of the Product to conform should have been reasonably detected by Akebia
via a visual inspection or via testing, inspection, analysis or review of the
Product or is related documentation as required under Applicable Law, the
Quality Agreement and/or cGMP.

 

9.2.Indemnification by Akebia.  Akebia will indemnify, defend and hold harmless
EQ, its Affiliates, and its and their respective officers, directors, employees
and agents (collectively, the “EQ Indemnitees”) against any Losses that any of
them may suffer in connection with any Third Party Claims arising from, relating
to or occurring as a result of (a) the development, further manufacture,
commercialization or use of any product containing the Product (including, but
not limited to, product liability claims and claims that such product infringes
any Third Party rights and claims for personal damages or injuries); (b) Akebia
Technology transferred to EQ for the Development and/or Manufacturing of the
Product not having been generated in compliance with Applicable Laws, or not
being true, complete and correct in all material respects, or being insufficient
for its intended purpose and use or violating any patent, trade secret or other
proprietary or intellectual property rights of any Third Party; (c) any Akebia
Indemnitee’s negligence or willful misconduct in performing obligations under
this Agreement; or (d) Akebia’s breach of this Agreement; except to the extent
that such Third Party Claims are due to any breach by EQ of its obligations
under this Agreement, any Non-Conforming Product supplied by EQ (except if the
Product’s Non-Conformity should have been reasonably detected by Akebia via a
visual inspection or via testing, inspection, analysis or review of the Product
or is related documentation as required under Applicable Law, the Quality
Agreement and/or cGMP), or negligence or willful misconduct of EQ.

 

9.3.Indemnification Procedures.  Each Party must promptly notify the other Party
after receipt of any Third Party Claims for which the other Party might be
liable under Section 9.1 or 9.2 hereof, as applicable. The indemnifying Party
will have the sole right to defend, negotiate, and settle such claims.  The
indemnified Party will be entitled to participate in the defense of such matter
and to employ counsel at its expense to assist in such defense; provided,
however, that the indemnifying Party will have final decision-making authority
regarding all aspects of the defense of the claim.  The indemnified Party will
provide the indemnifying Party with such information and assistance as the
indemnifying Party may reasonably request, at the expense of the indemnifying
Party.  Neither Party will be responsible or bound by any settlement of any
claim or suit made without its prior written consent; provided, however, that
the indemnified Party will not unreasonably withhold or delay such consent.

 

9.4.Exclusion of Indirect and Consequential Damages. EXCEPT IN THE EVENT OF
WILFUL MISCONDUCT OR GROSS NEGLIGENCE, OR BREACH OF THE PARTIES’ OBLIGATIONS OF
CONFIDENTIALITY UNDER THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE FOR SPECIAL,
INCIDENTAL, CONSEQUENTIAL (INCLUDING LOST PROFITS, BUSINESS OR GOODWILL),
PUNITIVE OR INDIRECT DAMAGES SUFFERED OR INCURRED BY THE OTHER PARTY OR ITS
AFFILIATES IN CONNECTION WITH THIS AGREEMENT, HOWEVER CAUSED, EVEN IF ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES.

 

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9.5.Liability Limitation. EXCEPTING ANY BREACH OF THEIR OBLIGATIONS OF
CONFIDENTIALITY IN SECTION 8, THEIR OBLIGATIONS IN SECTION 11.1, EACH PARTY’S
LIABILITY UNDER SECTION 9.1 AND 9.2, AND NOTWITHSTANDING THEIR OBLIGATIONS UNDER
SECTION 9 HEREIN, THE PARTIES’ maximum aggregate total liability to EACH OTHER
under this Agreement will not exceed during EACH CALENDAR YEAR the higher of (i)
[**]; and (ii) [**]; provided, that, nothing in this Agreement excludes or
limits A PARTY's liability for damages resulting from [**] of its OBLIGATIONS
imposed under this Agreement IF SUCH [**] ARE THE RESULT OF SUCH PARTY’s [**] or
[**].

 

9.6.Insurance.  EQ will carry, with financially sound and reputable insurers,
insurance coverage (including worker’s compensation at or above the applicable
statutory limits, comprehensive liability coverage with contractual liability,
and professional liability/errors and omissions coverage) with respect to the
conduct of its business against loss from such risks and in such amounts as is
customary for well-insured companies engaged in similar businesses and
sufficient to support its obligations under this Agreement. Upon the request of
Akebia, EQ will provide Akebia with a Certificate of Insurance evidencing such
coverage, and providing that [**] advance written notice will be given to Akebia
of any material change or cancellation in coverage or limits. EQ may use
self-insurance, and the use of primary and excess limits to achieve the total
required limits is acceptable.

 

10.

Term and Termination.  

 

10.1.Term.  This Agreement is effective on the Effective Date and will expire on
the 4th anniversary of the Effective Date. Not later than the [**], the Parties
shall conclude good faith negotiations on [**], as well as [**] applicable for
the [**] that may be agreed by the Parties.

 

10.2.Akebia Termination at Will. Akebia will have the right, in its sole
discretion, to terminate this Agreement for any reason upon one hundred and
eighty (180) days prior written notice to EQ.

 

10.3.Akebia Termination for Cause.  Akebia may terminate this Agreement or any
Purchase Orders if EQ fails to cure a material breach of this Agreement by EQ
within [**] after receiving written notice from Akebia of such breach. Further,
Akebia may terminate this Agreement or any Purchase Orders with immediate effect
at any time upon written notice to EQ in the event of a material breach of this
Agreement by EQ which cannot be cured (e.g., breach of confidentiality
obligations under Section 8).

 

10.4.Termination by EQ for Cause.  EQ may terminate this Agreement or any
Purchase Orders if Akebia fails to cure its material breach of this Agreement
within [**] after receiving written notice from EQ of such breach. Further, EQ
may terminate this Agreement or any Purchase Orders with immediate effect at any
time upon written notice to Akebia in the event of a material breach of this
Agreement by Akebia which cannot be cured.

 

10.5.Effect of Termination or Expiration.  Upon termination or expiration of
this Agreement, neither EQ nor Akebia will have any further obligations under
this Agreement provided, that, such termination or expiration shall be without
prejudice to any rights that have accrued to the benefit of a Party prior to
such expiration or termination and, further provided, that:

 

(a)Except in the event of termination of the Agreement by Akebia in accordance
with Section 10.3. hereof, Akebia will promptly pay to EQ: (i) the Price of any
existing inventories of Product or Product in-process held by EQ that are
subject to a Binding Forecast in effect at the time of such expiration or
termination; (ii) the cost of any unused Manufacture Materials at the time of
such termination; (iii) the cost of any unused Manufacture Materials which EQ
has purchased for Manufacture of Product, acting diligently in the ordinary
course of business in order to perform the Services in accordance with the
current

 

--------------------------------------------------------------------------------

 

Binding Forecast provided by Akebia, and have not yet begun such Manufacture at
the time of such expiration or termination; (iv) the unamortized cost of any
Equipment purchased by EQ after the Effective Date or of any other special
investment made by EQ after the Effective Date, in both cases, if these have
been made in connection with an accepted Purchase Order and have been agreed
with Akebia in writing prior to EQ accepting such Purchase Order; (v) the costs
and expenses in relation to the termination of irrevocable commitments made in
connection with any Binding Forecast prior to termination; and/or (vi) the costs
of terminating on-going work under any accepted Purchase Orders. At Akebia’s
election in writing EQ will deliver or destroy all Product and Materials as
directed by Akebia. Delivery shall be [**] and at no additional cost for Akebia,
and destruction shall be at Akebia’s cost.

 

(b)each Recipient will promptly return to the Discloser all of Discloser’s
Confidential Information (including all copies) provided to Recipient under this
Agreement, except for one (1) copy which Recipient may retain solely to monitor
Recipient’s surviving obligations of confidentiality and non-use and, to
exercise all surviving rights under this Agreement; and

 

(c)the terms and conditions under Articles 6, 7, 8 and 9 and under Sections
10.5, 11.1(e), 11.3, 11.5, 11.8, 11.9, 11.10, 11.11 and 11.12 will survive any
such termination or expiration.

 

 

11.

Miscellaneous.

 

11.1.Exclusivity and Patent Challenges.  The Parties acknowledge that Akebia
and/or its Affiliates shall supply secret and substantial know-how to EQ for the
purposes of this Agreement. In order to protect that know-how and without
prejudice to EQ's obligations under this Agreement, EQ agrees that:

 

(a)during the Term of this Agreement, neither EQ nor any of its Affiliates shall
use Akebia Technology, Akebia Improvements, or any other know-how of Akebia to
[**];

 

(b)during the Term of this Agreement, in any country, neither EQ, nor any of its
Affiliates shall [**];

 

(c)during the Term of this Agreement and for two (2) years thereafter, neither
EQ nor any of its Affiliates shall (i) commence or participate in [**], or
otherwise assert in writing [**]; or (ii) [**];

 

(d)after the Term of this Agreement and for so long as Akebia owns or controls
patented rights covering the manufacture, use or sale of vadadustat or
intermediates thereof in any country in the world (collectively, the "Akebia
Patent Rights"), neither EQ nor any of its Affiliates shall [**]; and

 

(e)after the termination of this Agreement, EQ shall never use or exploit any
Akebia Patent Rights while they remain patented, or Akebia Technology, Akebia
Improvements, or other substantial know-how received from or on behalf of Akebia
in connection with the activities performed hereunder, unless the content of
such technology or improvement is publicly available, is independently developed
by EQ (without using any Akebia Technology, Akebia Improvements, or other
substantial know-how received from or on behalf of Akebia in connection with the
activities performed hereunder) or obtained by EQ from a Third Party that has
developed it independently from EQ or Akebia.

 

11.2.Force Majeure. Except as otherwise expressly set forth in this Agreement,
neither Party will be deemed to have breached this Agreement for failure or
delay in fulfilling or performing any obligation under this Agreement when such
failure or delay is caused by or results from Force Majeure. The Party affected
by any Force Majeure will promptly notify the other Party, explaining the
nature, details and expected duration thereof. Such Party will also notify the
other Party from time to time as to when the affected Party reasonably expects
to resume performance in whole or in part of its obligations under this
Agreement, and notify the other Party of the cessation of any such event. A
Party affected by Force Majeure will use commercially reasonable efforts to
remedy, remove or mitigate such event and the effects thereof with all
reasonable dispatch. Upon termination of the Force Majeure, the performance of
any suspended obligation or duty will promptly recommence. In the event that the
affected Party's failure or delay remains uncured for a period of [**], the
other Party may thereafter terminate this Agreement immediately upon written
notice.

 

 

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11.3.Independent Contractor. EQ is an independent contractor and not an agent or
employee of Akebia. EQ will not in any way represent itself to be an agent,
employee, partner or joint venturer of or with Akebia, and EQ has no authority
to obligate or bind Akebia by contract or otherwise.  EQ has full power and
authority to determine the means, manner and method of performance of Services.
EQ is responsible for, and will withhold and/or pay, any and all applicable
federal, state or local taxes, payroll taxes, workers’ compensation
contributions, unemployment insurance contributions, or other payroll deductions
from the compensation of EQ’s employees and other EQ Personnel and no such
employees or other EQ Personnel will be entitled to any benefits applicable to
or available to employees of Akebia.  EQ understands and agrees that it is
solely responsible for such matters and that it will indemnify Akebia and hold
Akebia harmless from all claims and demands in connection with such matters.

 

11.4.Notices.  All notices must be in writing and sent to the address for the
recipient set forth below or at such other address as the recipient may specify
in writing under this procedure. All notices must be given (a) by personal
delivery, with receipt acknowledged; or (b) by prepaid certified or registered
mail, return receipt requested; or (c) by prepaid recognized express delivery
service. This clause 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. Notices will be effective upon receipt or at
a later date stated in the notice.

 

To Akebia:  

Akebia Therapeutics, Inc.

245 First Street

Cambridge, MA 02142

Attention: Vice President, Manufacturing

cc: General Counsel

[**]

 

To EQ:ESTEVE QUÍMICA, S.A.

Torre ESTEVE – Pg. Zona Franca, 109

Barcelona, SPAIN, 08038

Attention: Pere Mañé, Managing Director

[**]

 

11.5.Assignment.  Neither Party shall have the right to assign any or all of its
rights or obligations under this Agreement without the other Party's prior
written consent, which consent shall not unreasonably be withheld, delayed or
conditioned.  

 

Notwithstanding the foregoing, prior written consent shall not be required in
connection with a merger, reorganization, consolidation, or a sale of all or
substantially all of a Party's assets or relevant business to which this
Agreement relates and, the assigning Party shall cause the Third Party to assume
the assigning Party’s rights and obligations hereunder. For clarity, Akebia
agrees that it shall not, directly or indirectly, assign or transfer its rights
to commercialize vadadustat without also assigning (to the same assignee or
transferee for vadadustat) this Agreement.

 

The Parties agree to notify the other as soon as commercially reasonable, should
any such assignment to a Third Party occur, or could potentially occur. This
Agreement is binding upon, and will inure to the benefit of, the Parties and
their respective successors and permitted assigns.

 

11.6.No Benefit to Third Parties. The representations, warranties, covenants and
agreements set forth in this Agreement are for the sole benefit of the Parties
hereto and their successors and permitted assigns, and they will not be
construed as conferring any rights on any other persons.

 

 

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11.7.Entire Agreement.  Except as set forth in Section 2.1.7., this Agreement,
together with the attached Exhibits and any Purchase Orders accepted by the
Parties as set forth in this Agreement, each of which shall be deemed
incorporated into this Agreement, constitute the entire agreement between the
Parties with respect to the specific subject matter of this Agreement and all
prior agreements, oral or written, with respect to such subject matter are
superseded, provided, however, that the provisions of such agreements intended
to survive following expiration or termination shall survive in accordance with
their terms.  Each Party confirms that it is not relying on any representations
or warranties of the other Party except as specifically set forth in this
Agreement. If there is any conflict, discrepancy or inconsistency between the
terms of this Agreement and any Purchase Order the terms of this Agreement will
control unless specifically stated and agreed by the Parties in the Purchase
Order.

 

11.8.No Modification.  This Agreement may be changed only by a writing signed by
authorized representatives of each Party.

 

11.9.Severability; Reformation.  Each provision in this Agreement is independent
and severable from the others, and no provision will be rendered unenforceable
because any other provision is found by a proper authority to be invalid or
unenforceable in whole or in part.  If any provision of this Agreement is found
by such an authority to be invalid or unenforceable in whole or in part, such
provision will be changed and interpreted so as to best accomplish the
objectives of such unenforceable or invalid provision and the intent of the
Parties, in accordance with Applicable Law.

 

11.10.Dispute Resolution. If a dispute arises between the Parties relating to
this Agreement, the Parties shall meet in good faith to discuss and resolve the
dispute.  If the Parties cannot resolve the dispute within [**], senior
management representatives of each Party will meet in good faith to resolve the
dispute.  If the dispute remains unresolved after attempted resolution by senior
management representatives of the Parties as described above, then each Party
will be free to pursue any available remedy at law or in equity.  Each Party
will bear its own legal fees and any costs incurred under this Section
11.10.  Nothing in this Section 11.10 shall be interpreted to (i) modify either
Party’s termination rights in Section 10; or (ii) prohibit the Chief Executive
Officer (“CEO”) of either Party from reaching out to the CEO of the other Party
at any time to attempt to resolve the dispute.

 

11.11.Governing Law. This Agreement and any disputes arising out of or relating
to this Agreement will be governed by, construed and interpreted in accordance
with the laws of [**] without regard to any choice of law principle that would
require the application of the law of another jurisdiction. The Parties
expressly reject any application to this Agreement of the United Nations
Convention on Contracts for the International Sale of Goods.

 

11.12.Jurisdiction; Venue. For any legal action or proceeding concerning the
validity, interpretation or enforcement of this Agreement, or otherwise
concerning matters arising out of or related to this Agreement including its
performance or breach, the Parties hereby irrevocably submit to the exclusive
jurisdiction of the courts and tribunals of the of [**]. Nothing in this clause
shall preclude either Party from seeking interim or provisional relief,
including a temporary restraining order, preliminary injunction or other interim
equitable relief, if such Party thinks this is necessary to protect its
interests.

 

11.13.Waivers. Any delay in enforcing a Party’s rights under this Agreement, or
any waiver as to a particular default or other matter, will not constitute a
waiver of such Party’s rights to the future enforcement of its rights under this
Agreement, except with respect to an express written waiver relating to a
particular matter for a particular period of time signed by an authorized
representative of the waiving Party, as applicable.

 

 

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11.14.No Strict Construction; Headings; Interpretation. This Agreement has been
prepared jointly and will not be strictly construed against either Party.  The
section headings are included solely for convenience of reference and will not
control or affect the meaning or interpretation of any of the provisions of this
Agreement.  The words “include,” “includes” and “including” when used in this
Agreement are deemed to be followed by the phrase “but not limited to”.

 

11.15.Counterparts.  This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original and all of which
together will constitute one and the same instrument. A facsimile or portable
document format (“.pdf”) copy of this Agreement, including the signature pages,
will be deemed an original.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, each Party has caused this Agreement to be executed by its
duly authorized representative as of the Effective Date.

 

AKEBIA THERAPEUTICS, INC.

ESTEVE QUÍMICA, S.A

 

 

 

 

 

 

 

By:

 

/s/ Jason A. Amello

 

By:

 

/s/ Pere Mañé

 

 

 

 

 

 

 

Print Name:

 

Jason A. Amello

 

Print Name:

 

Pere Mañé

 

 

 

 

 

 

 

Title:

 

SVP, Chief Financial Officer

 

Title:

 

Managing Director

 

 

 

 

 

 

 

Date:

 

9-April 2019

 

Date:

 

March 12, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AKEBIA THERAPEUTICS, INC.

 

ESTEVE QUÍMICA, S.A

 

 

 

 

 

 

 

By:

 

/s/ John Butler

 

By:

 

/s/ Manuel Lourenço

 

 

 

 

 

 

 

Print Name:

 

John Butler

 

Print Name:

 

Manuel Lourenço

 

 

 

 

 

 

 

Title:

 

CEO

 

Title:

 

Global API Business Director

 

 

 

 

 

 

 

Date:

 

9-April 2019

 

Date:

 

March 15, 2019