EXHIBIT 10.2
 
Portions of this Exhibit have been redacted because they are both (i) not
material and (ii) would be competitively harmful if publicly disclosed.
Information that was omitted has been noted in this document with a placeholder
identified by the mark “[***]”
 
 
COMMERCIAL SUPPLY AGREEMENT
 
(Bremelanotide–Pre-filled syringe in auto-injector)
 
THIS COMMERCIAL SUPPLY AGREEMENT (“Agreement”) is made as of this 29th day of
September, 2020 (“Effective Date”)
 
BETWEEN
 
(1)
Palatin Technologies, Inc., a New Jersey corporation, with a place of business
at 4-B Cedar Brook Drive, Cranbury, New Jersey, USA 08512 (“Palatin”); and
 
(2)
Catalent Belgium S.A., a Belgian company, with a place of business at Rue Font
St. Landry, 10 Parc Mercator B-1120, Neder over Heembeek, Belgium (“Catalent”).
 
RECITALS
 
A.
Palatin is a biopharmaceutical company that develops, tests and commercializes,
directly or through third parties, pharmaceutical products.
 
B.
Catalent is a leading provider of advanced technologies, and development,
manufacturing and packaging services for pharmaceutical, biotechnology and
consumer healthcare companies.
 
C.
Palatin desires to engage Catalent to provide certain services to Palatin in
connection with the processing of Palatin’s Product (as defined below), and
Catalent desires to provide such services, all pursuant to the terms and
conditions set out in this Agreement.
 
THEREFORE, the parties agree as follows:
 
1. DEFINITIONS
 
The following terms have the following meanings in this Agreement:
 
1.1 “Acknowledgement” has the meaning set out in Clause 4.3.
 
1.2 “Affiliate” means (a) with respect to Palatin, any corporation or other
business entity that, directly or indirectly, is controlled by, controls, or is
under common control with Palatin; and (b) with respect to Catalent, Catalent,
Inc., Catalent Pharma Solutions, Inc. and any corporation or other business
entity controlled, directly or indirectly, by Catalent Pharma Solutions, Inc.
For such purposes, “control” means the direct or indirect ownership of at least
fifty percent (50%) of the voting interest in such corporation or other entity
or the power in fact to control the management directions of such entity.
 
1.3 “Agreement” has the meaning set out in the introductory paragraph, and
includes all its Attachments and other appendices (all of which are incorporated
herein by reference).
 
 

 
 
1.4 “Annual Product Maintenance Fee” has the meaning set forth in Clause 7.1C.
 
1.5  “API” means the compound bremelanotide, as further described in the
Specifications.
 
1.6 “API Inventions” has the meaning set out in Section 11.
 
1.7 “Applicable Laws” means, with respect to Palatin, all laws, statutes,
statutory provisions or subordinate legislation, currently in effect or enacted
or promulgated during the Term, and as amended from time to time, of each
jurisdiction in which API or Product is produced, marketed, distributed, used or
sold; and with respect to Catalent, cGMP and all other laws, statutes, statutory
provisions and subordinate legislation, currently in effect or enacted or
promulgated during the Term, and as amended from time to time, of the
jurisdiction in which Catalent Processes Product.
 
1.8 “Auto Injector Assembly Line” means the Processing line expansion for auto
injector assembly undertaken by Catalent pursuant to the Manufacturing
Preparation and Services Agreement.
 
1.9 “Batch” means a defined quantity of Product that has been or is being
Processed in accordance with the Specifications.
 
1.10 “Catalent Defective Processing” has the meaning set out in Clause 5.2.
 
1.11 “Catalent” has the meaning set out in the introductory paragraph. Catalent
shall have the right to cause any of its Affiliates to perform any of its
obligations hereunder, and Palatin shall accept such performance as if it were
performance by Catalent.; provided, however, that Catalent shall remain fully
liable for the performance by its Affiliate of Catalent’s obligations under this
Agreement to the same extent as if Catalent had performed or failed to perform
its obligations under this Agreement.
 
1.12 “Catalent Indemnitees” has the meaning set out in Clause 13.2.
 
1.13 “Catalent IP” has the meaning set out in Section 11.
 
1.14 “cGMP” means current Good Manufacturing Practices promulgated by the
Regulatory Authorities in the jurisdictions included in Applicable Laws. This
includes 2003/94/EEC Directive (as supplemented by Volume 4 of EudraLex
published by the European Commission), as amended, if and as implemented in the
relevant constituent country; and in the United States, this includes 21 C.F.R.
Parts 210 and 211, as amended.
 
1.15 “Change of Control” means, with respect to a party: (a) any merger,
reorganization, consolidation, or other business combination of such party with
a third party that results in the voting securities of such party outstanding
immediately prior thereto ceasing to represent at least fifty percent (50%) of
the combined voting power of the surviving entity immediately after such merger,
reorganization, consolidation, or other business combination; (b) a third party
becoming the beneficial owner of fifty percent (50%) or more of the combined
voting power of such party in a single transaction or series of related
transactions; or (c) the sale, transfer, exchange or other disposition to a
third party of all or substantially all of a party’s assets or business relating
to this Agreement (whether alone or in connection with a sale, transfer,
exchange or other disposition of other assets or businesses of such party).
 
1.16 “Confidential Information” has the meaning set out in Clause 10.1.
 
1.17 “Contract Year” means, with respect to the initial Contract Year, the
period beginning on the Effective Date and ending on August 20, 2021, and, with
respect to each successive Contract Year, each consecutive 12 month period
beginning on August 21 and ending on August 20 of the following calendar year,
as applicable.
 
1.18 “CPR” has the meaning set out in Clause 18.10.
 
 

 
 
1.19 “Defective Product” has the meaning set out in Clause 5.2.
 
1.20 “Discloser” has the meaning set out in Clause 10.1.
 
1.21 “Effective Date” has the meaning set out in the introductory paragraph.
 
1.22 “Equipment” means any equipment to be supplied by Catalent to use in the
Processing, including any equipment procured under the Manufacturing Preparation
and Services Agreement.
 
1.23 “Exception Notice” has the meaning set out in Clause 5.2.
 
1.24 “Facility” means Catalent’s facility in Brussels, Belgium or such other
Catalent facility as mutually agreed by the parties.
 
1.25 “FDA” means the United States Food and Drug Administration or any successor
thereto.
 
1.26 “Firm Commitment” has the meaning set out in Clause 4.2.
 
1.27 “Invention” has the meaning set out in Section 11.
 
1.28 “Losses” has the meaning set out in Clause 13.1.
 
1.29 “Manufacturing Preparation and Services Agreement” means that certain
manufacturing preparation and services agreement, dated as of June 10, 2016
between Catalent and Palatin.
 
1.30 “Minimum Requirement” has the meaning set out in Clause 4.1.
 
1.31 “Palatin” has the meaning set out in the introductory paragraph, or any
successor or permitted assign.
 
1.32 “Palatin Indemnitees” has the meaning set out in Clause 13.1.
 
1.33 “Palatin IP” has the meaning set out in Section 11.
 
1.34 “Palatin-supplied Materials” means any materials to be supplied by or on
behalf of Palatin to Catalent for Processing, as provided in Attachment C,
including API, Ypsomed auto injector components and parts, and reference
standards.
 
1.35 “Price” shall have the meaning set forth in Attachment D hereto.
 
1.36 “Process” or “Processing” means the compounding, filling, producing,
manufacturing, assembling and packaging (clinical, secondary or retail
packaging) of Palatin-supplied Materials and Raw Materials into Product by
Catalent, in accordance with the Specifications and under the terms of this
Agreement.
 
 

 
 
1.37 “Processing Date” means the day on which the first step of physical
Processing is scheduled to occur, as identified in an Acknowledgement.
 
1.38 “Process Inventions” has the meaning set out in Section 11.
 
1.39 “Product” means the pharmaceutical product containing the API, as more
specifically described in the Specifications.
 
1.40 “Product Maintenance Services” has the meaning set out in Clause 2.3.
 
1.41 “Purchase Order” has the meaning set out in Clause 4.3.
 
1.42 “Quality Agreement” has the meaning set out in Clause 9.6.
 
1.43 “Raw Materials” means all raw materials, supplies, components, syringes,
and packaging necessary to manufacture and ship Product in accordance with the
Specifications, as provided in Attachment C, but excluding Palatin-supplied
Materials.
 
1.44 “Recall” has the meaning set out in Clause 9.5.
 
1.45 “Recipient” has the meaning set out in Clause 10.1.
 
1.46 “Regulatory Approval” means any approvals, permits, product and/or
establishment licenses, registrations or authorizations, including European
marketing authorizations and applications and U.S. Investigational New Drug
applications, New Drug Applications and Abbreviated New Drug Applications, as
applicable, of any Regulatory Authorities that are necessary or advisable in
connection with the development, manufacture, testing, use, storage,
exportation, importation, transport, promotion, marketing, distribution or sale
of API or Product in the Territory.
 
1.47 “Regulatory Authority” means the regulatory bodies or agencies in the
Territory that are responsible for (A) the regulation (including pricing) of any
aspect of pharmaceutical or medicinal products intended for human use or (B)
health, safety or environmental matters generally. This includes the European
Medicines Agency; and in the United States, this includes the United States Food
and Drug Administration.
 
1.48 “Representatives” of an entity means such entity’s duly-authorized
officers, directors, employees, agents, accountants, attorneys or other
professional advisors.
 
1.49 “Review Period” has the meaning set out in Clause 5.2.
 
1.50 “Required Disclosure” has the meaning set out in Clause 5.2.
 
1.51 “Rolling Forecast” has the meaning set out in Clause 4.2.
 
1.52 “Specifications” means the procedures, requirements, standards, quality
control testing and other data and the scope of services as set out in
Attachment C, as modified from time to time in accordance with Section 8.
 
1.53 “Supply Failure” has the meaning set forth in Clause 4.7.
 
1.54 “Term” has the meaning set out in Clause 16.1.
 
 

 
 
1.55 “Territory” means the European Union and the United States and its
territories and possessions, those countries that are listed in Attachment E,
and any other country that the parties agree in writing to add to this
definition of Territory in an amendment to this Agreement; provided, however,
that Territory shall not be amended to include countries that are targeted by
the comprehensive sanctions, restrictions or embargoes administered by the
United Nations, European Union, United Kingdom, or the United States. Catalent
shall not be obliged to Process Products for sale in any of such countries if it
is prevented from doing so, or would be required to obtain or apply for special
permission to do so, due to any restrictions (such as embargoes) imposed on it
by any governmental authorities, including without limitation, those imposed by
the U.S. Office of Foreign Asset Control.
 
1.56 “Uncured Supply Failure” has the meaning set out in Clause 4.7.
 
1.57 “Unit Pricing” has the meaning set out in Clause 7.1B.
 
1.58 “Validation Services” has the meaning set out in Clause 2.1.
 
1.59 “Vendor” has the meaning set out in Clause 3.2B.
 
2. VALIDATION, PROCESSING & RELATED SERVICES
 
2.1 Validation Services. Catalent shall perform the Product qualification,
validation and stability services set out in Attachment A (the “Validation
Services”).
 
2.2 Supply and Purchase of Product. Catalent shall Process Product in accordance
with the Specifications, Applicable Laws and this Agreement. Except as set forth
in Clause 4.7, Palatin and its Affiliates shall purchase [***] from Catalent
[***] of Palatin’s and its Affiliates’ requirements of Product in the Territory
in accordance with this Agreement.
 
2.3 Product Maintenance Services. Palatin will receive the product maintenance
services set out in Attachment B (the “Product Maintenance Services”).
 
2.4 Other Related Services.
 
A. Catalent shall provide any other Product-related services as the parties may
agree in writing (the “Services”). The Services to be performed by Catalent
under this Agreement shall be detailed in individual statements of work in the
form attached hereto as Attachment F, each of which, upon acceptance and
execution by both parties, will be binding on both parties and incorporated into
the Agreement (each a “Statement of Work”). In addition to a description of the
Services to be provided, each Statement of Work shall include a schedule for
completion of the Statement of Work, a fee and payment schedule, and such other
information as is necessary for Catalent to perform the relevant Services,
including any Palatin-supplied Materials required to complete the Services and
the respective responsibilities of the parties. Catalent shall not initiate work
or incur fees or expenses chargeable to Palatin until a Statement of Work has
been fully executed.
 
B. Either party may request a written amendment to any Statement of Work prior
to the completion of Services. Any such request shall detail the requested
changes to the applicable task, responsibility, duty, pricing, time line or
other matter and shall be promptly reviewed by the other party. Such amendment
will become effective upon the execution by both parties. Both parties shall act
in good faith and promptly when considering an amendment requested by the other
party. Without limiting the foregoing, Palatin shall not unreasonably withhold
approval of an amendment if the proposed changes in pricing or time lines result
from, among other appropriate reasons, forces outside the reasonable control of
Catalent or changes in the assumptions upon which the initial pricing or time
lines were based. Catalent shall not be obligated to perform any modified
Services, and shall not initiate any additional or supplemental Services, until
an amendment has been executed by the parties with respect to such modified,
additional or supplemental Services.
 
C. Each Statement of Work, together with any associated amendments, shall
constitute a unique agreement and shall stand alone with respect to any other
Statement of Work. Each fully signed Statement of Work, together with any
associated amendments, will be subject to the terms of this Agreement and will
be incorporated herein and form part of this Agreement.
 
 

 
 
D. Any Statement of Work hereunder may be terminated in whole or in part [***]
by Palatin. Upon termination of a Statement of Work, neither Catalent nor
Palatin will have any further obligations under such Statement of Work, except
that:
 
(1)
Catalent will terminate all affected Services in progress in an orderly manner
as soon as practical and in accordance with a schedule agreed to by Palatin and
as permitted by Applicable Laws, unless Palatin specifies in the notice of
termination that Services in progress should be completed;
 
(2)
Catalent will deliver or, at Palatin’s option and sole expense, dispose of, any
Palatin-supplied Materials in its possession or control and all deliverables
developed through the date of termination;
 
(3)
Palatin will pay Catalent any unpaid amounts due and owing Catalent for (i) all
Services performed up to the date of termination, (ii) all reimbursable costs
and expenses actually incurred as of the date of termination in accordance with
the Statement of Work, and (iii) all non-cancelable commitments made in the
performance of the Services, in each case including any costs incurred to wind
down and cease any ongoing Services; and
 
(4)
with respect to any advance payments made by Palatin for the Services in excess
of amounts payable by Palatin pursuant to Section 2.4(D)(3), Catalent will
promptly refund such amounts to Palatin for Services not rendered.
 
E.           Notwithstanding the foregoing, nothing in this Agreement will
obligate either party to enter into any Statement of Work under this Agreement.
Unless otherwise expressly agreed in the applicable Statement of Work, in the
event of a conflict between the terms and conditions of the Agreement and the
Statement of Work, the terms of the Agreement shall take precedence and control.
 
3. MATERIALS, EQUIPMENT AND AUTO INJECTOR ASSEMBLY LINES
 
3.1 Palatin-supplied Materials.
 
A. Palatin shall supply to Catalent for Processing, at [***]cost, all
Palatin-supplied Materials, in quantities sufficient to meet Palatin’s
requirements for Product. Palatin shall deliver DDP (Incoterms 2010) such items
and associated certificates of analysis to the Facility no later than [***] (but
not earlier than [***] unless otherwise agreed by Catalent) before the
Processing Date. Palatin shall be responsible at its cost for securing necessary
export or import, or similar clearances, permits or certifications required in
respect of such supply. Catalent shall use Palatin-supplied Materials solely for
Processing. To the extent not previously provided, Palatin shall provide to
Catalent, prior to delivery of any Palatin-supplied Materials, a copy of all
associated material safety data sheets, safe handling instructions, health and
environmental information, and any regulatory certifications or authorizations
that may be required under Applicable Laws relating to the API and Product, and
shall promptly provide any updates thereto.
 
B. Within [***] following receipt of Palatin-supplied Materials, Catalent shall
inspect such items to verify their identity. Unless otherwise expressly required
by the Specifications, Catalent shall have no obligation to test such items to
confirm that they meet the associated specifications or certificate of analysis
or otherwise; but in the event that Catalent detects a nonconformity with
Specifications, Catalent shall give Palatin prompt notice of such nonconformity.
Catalent shall not be liable for any defects in Palatin-supplied Materials, or
in Product as a result of defective Palatin-supplied Materials unless Catalent
failed to properly perform the foregoing obligations. Catalent shall follow
Palatin’s reasonable written instructions in respect of return or disposal of
defective Palatin-supplied Materials.
 
C. Palatin shall retain title to Palatin-supplied Materials at all times, and
Palatin shall bear the risk of loss thereof, except in the event of losses
related to Catalent’s gross negligence or willful misconduct, in which case
Catalent’s liability shall be limited pursuant to Section 14 below.
 
3.2 Raw Materials.
 
A. Catalent shall procure Raw Materials only from vendors that are approved in
writing by Palatin or otherwise qualified in accordance with the provisions of
the Quality Agreement. Catalent shall be responsible for procuring Raw Materials
as necessary to meet the Firm Commitment. Catalent shall not be liable for any
delay in delivery of Product if (i) Catalent is unable to obtain, in a timely
manner, a particular Raw Material necessary for Processing and (ii) Catalent
placed orders for such Raw Materials promptly following receipt of Palatin’s
Firm Commitment. In the event that any Raw Material becomes subject to purchase
lead time beyond the Firm Commitment time frame, the parties will negotiate in
good faith an appropriate amendment to this Agreement, including Clause 4.2.
 
 

 
 
B. In certain instances, Palatin may require a specific supplier, manufacturer
or vendor (“Vendor”) to be used for Raw Material. In such an event, (i) such
Vendor will be identified in the Specifications and (ii) the Raw Materials from
such Vendor shall be deemed Palatin-supplied Materials for purposes of this
Agreement. If the cost of the Raw Material from any such Vendor (other than a
Vendor specified in the Specifications as of the Effective Date) is greater than
Catalent’s costs for the same raw material of equal quality from other vendors,
Catalent shall add the difference between Catalent’s cost of the Raw Material
and the Vendor’s cost of the Raw Material to the Unit Pricing. Palatin will be
responsible for all reasonable, out-of-pocket costs incurred by Catalent
associated with qualification of any such Vendor who has not been previously
qualified by Catalent.
 
C. In the event of (i) a Specification change for any reason, (ii) obsolescence
of any Raw Material or (iii) termination or expiry of this Agreement, Palatin
shall bear the cost of any unused Raw Materials (including packaging), so long
as Catalent (a) purchased such Raw Materials in quantities consistent with
Palatin’s then current Firm Commitment and any minimum purchase obligations
required by the vendor and (b) used commercially reasonable efforts to mitigate
such costs by using any such unused Raw Materials in the manufacture of other
products.
 
3.3 Artwork and Labeling. Palatin shall provide, or approve prior to Catalent’s
procurement of applicable Raw Material, all artwork, advertising and labeling
information necessary for Processing, if any. Such artwork, advertising and
labeling information is and shall remain the exclusive property of Palatin, and
Palatin shall be solely responsible for the content thereof. Such artwork,
advertising and labeling information or any reproduction thereof may not be used
by Catalent, during or after the Term, in any manner other than performing its
obligations hereunder.
 
3.4 [***].
 
3.5 Auto Injector Assembly Line. With respect to all equipment and components of
the Auto Injector Assembly Line, notwithstanding any amounts that Palatin
contributes to the purchase of equipment and components in connection with the
establishment of such Auto Injector Assembly Line, Catalent shall solely own all
right, title and interest in and to such line, and all equipment and components
relating thereto, and shall bear the risk of loss thereof. [***] The parties
shall work together in good faith to plan and schedule such Palatin priority
access based on a combination of Palatin’s (i) Rolling Forecasts and Firm
Commitment and (ii) Minimum Requirements for the applicable Contract Year(s). In
the event that during a Contract Year(s), Catalent uses the Auto Injector
Assembly Line for another Catalent customer in keeping with the priority access
requirements set forth in this Clause 3.5, then [***] .
 
4. MINIMUM REQUIREMENT, FORECASTS & PURCHASE ORDERS
 
4.1 Minimum Requirement. During each Contract Year, Palatin (or its Affiliates
or licensees) shall purchase the minimum number of units of Product set out on
Attachment D (“Minimum Requirement”). If during any Contract Year Palatin
purchases a number of units of Product that is less than the Minimum Requirement
(the difference, a “Purchase Shortfall”), then within [***] after the end of
such Contract Year, Palatin shall pay Catalent an amount equal to [***].
 
4.2 Forecast. On or before [***], and thereafter on a [***], Palatin shall
furnish to Catalent a written [***] rolling forecast of the quantities of
Product that Palatin intends to order from Catalent during such period (“Rolling
Forecast”); provided that to the extent feasible at least [***] of the total
number of units purchased in the relevant Contract Year shall be purchased in
each of the first and second six months of such relevant Contract Year. The
[***] of such Rolling Forecast shall constitute a binding commitment to purchase
the quantities of Product specified therein (“Firm Commitment”) and [***] of the
Rolling Forecast shall be non-binding, good faith estimates.
 
4.3 Purchase Orders.
 
A. Concurrently with the submission of each Rolling Forecast, Palatin shall
submit to Catalent a binding, non-cancelable purchase order for Product,
specifying the Batch size (to the extent the Specifications permit Batches of
different sizes) and the requested delivery date for each Batch (“Purchase
Order”); provided, that each Purchase Order shall be for not less than the Firm
Commitment (but only to the extent the Firm Commitment was not covered in a
previous Purchase Order). Purchase Orders for quantities of Product in excess of
the Firm Commitment shall be submitted by Palatin at least [***] in advance of
the delivery date requested in the Purchase Order.
 
 

 
 
B. Within [***] after receipt of a Purchase Order, Catalent shall issue a
written acknowledgement (“Acknowledgement”) that it accepts or rejects such
Purchase Order. Each acceptance Acknowledgement shall either confirm the
delivery date set out in the Purchase Order or provide a reasonable alternative
delivery date (which, in any event, shall be [***] ), and shall include the
Processing Date. Catalent may reject any Purchase Order in excess of the Firm
Commitment or otherwise not given in accordance with this Agreement; provided,
however, that Catalent shall use its commercially reasonable efforts to supply
Palatin with quantities of Product which are up to [***] in excess of the
quantities specified in the Firm Commitment, subject to Catalent’s other supply
commitments and manufacturing, packaging and equipment capacity. A properly
submitted Purchase Order shall be deemed [***] within [***] after receipt of
such Purchase Order.
 
C. In the event of a conflict between the terms of any Purchase Order or
Acknowledgement and this Agreement, the terms of this Agreement shall control
unless the terms of the Purchase Order expressly override the terms set forth
herein.
 
4.4 Catalent’s Cancellation of Purchase Orders. Notwithstanding Clause 4.5,
Catalent reserves the right to cancel all, or any part of, a Purchase Order upon
written notice to Palatin, and Catalent shall have no further obligations or
liability with respect to such Purchase Order, if Palatin refuses or fails to
timely supply conforming Palatin-supplied Materials in accordance with Clause
3.1 and such failure is not cured within [***] after the giving of written
notice of such failure. Any such cancellation of Purchase Orders shall not
constitute a breach of this Agreement by Catalent nor shall it absolve Palatin
of its obligation in respect of the Minimum Requirement.
 
4.5 Palatin’s Modification or Cancellation of Purchase Orders.
 
A. Palatin may modify the delivery date or quantity of Product in a Purchase
Order only by submitting a written change order to Catalent at least [***] in
advance of the earliest Processing Date covered by such change order. To the
extent the change order modifies the delivery date or modifies the quantity of
Product in a Purchase Order, such change order shall be effective and binding
against Catalent only upon the written approval of Catalent, and notwithstanding
the foregoing, Palatin shall remain responsible for the Firm Commitment.
 
B. Changes to or postponement of any Batch of Product by Palatin will not reduce
or in any way affect Palatin’s Minimum Requirement obligations set out in Clause
4.1.
 
4.6 Unplanned Delay or Elimination of Processing. Catalent shall use
commercially reasonable efforts to meet the Purchase Orders, subject to the
terms and conditions of this Agreement. Catalent shall provide Palatin with as
much advance notice as practicable, and shall provide at least [***]advance
notice where possible, if Catalent determines that any Processing will be
delayed or eliminated for any reason.
 
4.7 Supply Failure. For purposes of this Agreement, a “Supply Failure” shall
mean a failure by Catalent to supply Product meeting the Specifications, subject
to Clauses 5.2, 5.3 and 5.4, in the quantities ordered by Palatin (subject to
the limitations and terms set forth in Clauses 4.3 and 4.4) for [***] , where
such failure is [***] . In the event of [***] (such event, an “Uncured Supply
Failure”), Palatin shall have the right [***] . In the event of such Uncured
Supply Failure, [***] , the parties shall meet to discuss in good faith how to
equitably manage any Minimum Requirement for the then current Contract Year,
[***] .
 
4.8 Observation of Processing. In addition to Palatin’s audit right pursuant to
Clause 9.4, Palatin may send [***] Representatives to the Facility to observe
Processing for a maximum of [***] (unless otherwise agreed by Catalent in
writing), upon at least [***] prior notice, at reasonable times during regular
business hours. Such Palatin Representatives shall abide by all Catalent safety
rules and other applicable policies and procedures, and Palatin shall be
responsible for such compliance. Palatin shall defend, indemnify and hold
harmless Catalent for any action, omission or other activity of such Palatin
Representatives while on Catalent’s premises. Palatin’s Representatives shall be
required to sign Catalent’s standard visitor confidentiality agreement prior to
being allowed access to the Facility.
 
5. TESTING; SAMPLES; RELEASE
 
 

 
 
5.1 Batch Records and Data; Release.
 
A. Subject to Clause 5.1B, unless otherwise agreed to by the parties in writing,
within [***] after Catalent completes Processing of a Batch, Catalent shall
provide Palatin with copies of executed Batch records prepared in accordance
with the Specifications; provided, that if testing reveals an
out-of-Specification result, Catalent shall provide such Batch records within
[***] after resolution of the out-of-Specification result. After Catalent
completes Processing of a Batch, Catalent shall also provide Palatin or its
designee with a certificate of analysis for such Batch. Issuance of a
certificate of conformance/analysis constitutes release of the Batch by Catalent
to Palatin. Palatin shall be responsible for final release of Product (including
testing), at its cost, to the market.
 
B. If testing reveals an out-of-Specification result with respect to a Batch,
Catalent shall report such result to Palatin as soon as practicable, and in any
event within [***] after obtaining such result. Within [***] after resolution of
the out-of-Specification result, Catalent shall provide Palatin a written report
detailing the cause of such out-of-Specification result and the manner in which
it was resolved. Catalent shall provide Palatin with such further information as
Palatin reasonably requests with respect to such out-of-Specification result.
 
5.2 Testing; Rejection. Following Palatin’s receipt of a shipment of a Batch,
Palatin or Palatin’s designee may test samples of such Batch to confirm that the
Specifications have been met. Unless within [***] after Palatin’s receipt of a
Batch (“Review Period”), Palatin or its designee notifies Catalent in writing
(an “Exception Notice”) that such Batch is not in compliance with Clause 12.1A
(“Defective Product”), and provides a sample of the alleged Defective Product,
the Batch shall be deemed accepted by Palatin and Palatin shall have no right to
reject such Batch. Upon timely receipt of an Exception Notice from Palatin,
Catalent shall in its sole discretion conduct an appropriate investigation to
determine whether or not it agrees with Palatin that Product is Defective
Product and to determine the cause of any nonconformity. If Catalent agrees that
Product is Defective Product and determines that the cause of nonconformity is
attributable to Catalent’s negligence or willful misconduct (“Catalent Defective
Processing”), then Clause 5.4 shall apply.
 
5.3 Discrepant Results. If the parties disagree as to whether Product is
Defective Product and/or whether the cause of the nonconformity is Catalent
Defective Processing, without regard to whether Catalent conducts an appropriate
investigation as provided in Clause 5.2, and this is not resolved within [***]
of the Exception Notice date, the parties shall cause a mutually acceptable
independent third party to review records, test data and to perform comparative
tests and/or analyses on samples of the alleged Defective Product and its
components, including Palatin-supplied Materials. The independent party’s
results as to whether or not Product is Defective Product and the cause of any
nonconformity shall be final and binding. Unless otherwise agreed to by the
parties in writing, the costs associated with such testing and review shall be
borne by Catalent if Product is Defective Product attributable to Catalent
Defective Processing, and by Palatin in all other circumstances. For avoidance
of doubt, where the cause of nonconformity cannot be determined or assigned, it
shall be deemed not Catalent Defective Processing.
 
5.4 Defective Processing. Catalent shall, [***] either (A) [***] or (B) [***] .
This shall be Palatin’s sole and exclusive remedy under this Agreement for
Defective Product attributable to Catalent Defective Processing, other than as
provided in Clause 4.7, 9.5 and 13.1 of this Agreement.
 
6. DELIVERY
 
6.1 Delivery. Catalent shall deliver Product Ex Works (Incoterms 2010) the
Facility promptly following Catalent’s release of Product. Catalent shall
segregate and store all Product until tender of delivery. Title to Product shall
transfer to Palatin upon Catalent’s tender of delivery. Palatin shall qualify or
validate at least three carriers to ship Product and then designate the priority
of such qualified carriers to Catalent, and Catalent shall not, without
Palatin’s prior written consent, utilize any other carrier for purposes of
delivering Product to Palatin or its designees. Catalent shall include with each
shipment of Product the applicable Purchase Order number, the Batch number and
the quantity of Product.
 
6.2 Storage Fees. If Catalent performs in accordance with the Purchase Order,
and Palatin fails to take delivery of any Product on any agreed delivery date,
Catalent shall store such Product and Palatin shall be invoiced on the first day
of each month following such scheduled delivery for reasonable storage costs.
All such storage shall be under conditions set forth in the Specifications. For
each such Batch of stored Product, risk of loss shall transfer to Palatin upon
placement into storage and Catalent shall have the right to ship such Product to
Palatin within two months after billing.
 
 

 
 
6.3 Bill and Hold. From time to time, at Palatin’s request, the agreed delivery
date of the Purchase Order may be extended under a bill and hold arrangement as
more fully set forth below. For each such Batch of stored Product, Palatin
agrees that: (A) Palatin has made a fixed commitment to purchase the Product,
(B) risk of loss for such Product passes to Palatin upon placement into storage,
(C) such Product shall be on a bill and hold basis for legitimate business
purposes, (D) Palatin shall identify a fixed delivery date for the Product and
(E) Palatin shall agree to be invoiced and to pay such invoice in accordance
with the payment terms set forth in Clause 7.3 of this Agreement. Upon making a
request for a bill and hold arrangement, Palatin shall provide Catalent with a
letter confirming items (A) through (E) of this Clause 6.3 for each Batch of
stored Product.
 
7. PAYMENTS; LICENSING; CHANGE OF CONTROL
 
7.1
Fees. In consideration for Catalent performing services hereunder:
 
A. Palatin shall pay to Catalent the fees for Validation Services set out on
Attachment A. Catalent shall submit an invoice to Palatin for such fees upon the
completion of the relevant phase of the Validation Services.
 
B. Palatin shall pay Catalent the unit pricing for Product set out on Attachment
D (“Unit Pricing”). Catalent shall submit an invoice to Palatin for such fees
upon tender of delivery of Product as provided in Clause 6.1.
 
C. Except as provided in Clause 3.5, Palatin shall pay Catalent the annual fees
for Product Maintenance Services set out on Attachment D (the “Annual Product
Maintenance Fee”). Catalent shall submit an invoice to Palatin for such Annual
Product Maintenance Fee payable upon [***] and upon each anniversary of such
date thereafter during the Term.
 
D. Other Fees. Palatin shall pay Catalent for all other fees and expenses of
Catalent owing in accordance with the terms of this Agreement, including
pursuant to Clauses 2.4, 4.1, 6.2, 9.2.1 and 16.4. Catalent shall submit an
invoice to Palatin for such fees as and when appropriate. All such invoices
shall contain sufficient detail and appropriate itemization of fees and expenses
(with copies of supporting documentation for expenses provided upon written
request), and shall reference the applicable Palatin purchase order number.
Catalent shall remit all invoices to the following address:
 
By Mail:
Palatin Technologies, Inc.
4-B Cedar Brook Drive
Cranbury, New Jersey 08512 USA
Attn:  Accounts Payable
 
By electronic mail:
accountspayable@palatin.com
 
7.2 Unit Pricing Adjustment. From and after [***] , the Unit Pricing shall be
adjusted [***] , effective as of [***] . Catalent shall give Palatin written
notice of such adjustment by [***] . The written notice shall specify the basis
for each adjustment in the Price, including increases or decreases in the cost
of Raw Materials, continuous improvement benefits and any increase or decrease
of any other component of Unit Pricing. The amount of any increase in the cost
of components of Unit Pricing other than Raw Materials shall not exceed [***] .
The cost of Raw Materials shall be passed through to Palatin [***] . To manage
the cost of Raw Materials, Palatin, at its option, may negotiate the terms of a
supply agreement with any supplier of Raw Materials, including but not limited
to [***] with respect to the supply of [***] .
 
7.3 Payment Terms. Payment of all Catalent invoices shall be due [***] after the
later of (A) the date of the invoice and (B) the date of delivery. Palatin shall
make payment in euros. Unless an invoice is disputed by Palatin in good faith,
if any payment is not received by Catalent by its due date, then Catalent may
charge interest on the outstanding sum from the due date (both before and after
any judgment) at [***] per month until paid in full (or, if less, the maximum
amount permitted by Applicable Laws). Further, if Palatin shall fail to make any
payment when due other than for an invoice disputed by Palatin in good faith,
and shall not have cured such non-payment within [***] after receiving from
Catalent written notice of non-payment, then Catalent shall have the right, at
its option, to suspend any further performance hereunder until such default is
corrected, without thereby releasing Palatin from its obligations under this
Agreement.
 
 

 
 
7.4 Taxes. All taxes, duties and other levies assessed (excluding tax based on
net income) on or in connection with Palatin-supplied Materials, services or
Product in connection with provision or sale to Catalent or Palatin, shall be
reimbursed by Palatin to Catalent (and shall be included in invoices) and all
charges are exclusive of any applicable taxes, duties and levies which shall be
added to invoices directed at Palatin.
 
7.5 Palatin and Third Party Expenses. Except as may be expressly covered by
Product Maintenance Service fees, Palatin shall be responsible for 100% of its
own and all third-party expenses associated with the development, Regulatory
Approvals and commercialization of Product, including regulatory filings and
post-approval marketing studies.
 
8. CHANGES TO SPECIFICATIONS
 
All Specifications and any changes thereto agreed to by the parties from time to
time shall be in writing, dated and signed by the parties. Any change to the
Process shall be deemed a Specification change. No change in the Specifications
shall be implemented by Catalent, whether requested by Palatin or requested or
required by any Regulatory Authority, until the parties have agreed in writing
to such change, the implementation date of such change, and any increase or
decrease in costs, expenses or fees directly resulting from such change
(including any change to Unit Pricing). Catalent shall respond promptly to any
request made by Palatin for a change in the Specifications, and both parties
shall use commercially reasonable, good faith efforts to agree to the terms of
such change in a timely manner. As soon as reasonably practicable after a
request is made for any change in Specifications, Catalent shall notify Palatin
of the costs associated with such change and shall provide such supporting
documentation as Palatin may reasonably require. Palatin shall pay all direct
costs associated with such agreed upon changes. If there is a conflict between
the terms of this Agreement and the terms of the Specifications, this Agreement
shall control unless the parties mutually agree that the terms of the
Specifications expressly override the terms set forth herein. Catalent reserves
the right to postpone effecting changes to the Specifications until such time as
the parties agree to and execute the required written amendment.
 
9. RECORDS; REGULATORY MATTERS
 
9.1 Record Keeping. Catalent shall maintain materially complete and accurate
Batch, laboratory data, reports and other technical records relating to
Processing in accordance with Catalent standard operating procedures and all
Applicable Laws. Such information shall be maintained for a period of at least
[***] from the relevant finished Product expiry date or longer if required under
Applicable Laws or the Quality Agreement.
 
9.2 Regulatory Compliance. Catalent shall obtain and maintain all permits and
licences with respect to general Facility operations required by any Regulatory
Authority in the jurisdiction in which Catalent Processes Product. Palatin shall
obtain and maintain all other Regulatory Approvals and other authorizations and
certificates, including those necessary for Catalent to commence Processing.
During the Term, Catalent will assist Palatin with all regulatory matters
relating to Processing, at Palatin’s request and sole expense. Catalent reserves
the right to assess Palatin for any regulatory fees that may be established by
any Regulatory Authority subsequent to the Effective Date of this Agreement,
which fees result directly from Catalent’s formulation, development,
manufacturing, processing, filing, packaging, storing or testing of the Product
or Palatin-supplied Materials. Except as required under Applicable Laws or by
any governmental agency, Palatin shall not identify Catalent in any regulatory
filing or submission without Catalent’s prior written consent. Such consent
shall not be unreasonably withheld and shall be memorialized in a writing signed
by authorized representatives of both parties. Upon Catalent’s written request,
Palatin shall provide Catalent with a copy of any Regulatory Approvals required
to distribute, market and sell Product in one or more countries within the
Territory. If Palatin is unable to provide such information, Catalent shall have
no obligation to deliver Product to Palatin, notwithstanding anything to the
contrary in this Agreement. The parties intend and commit to cooperate to allow
each party to satisfy its obligations under Applicable Laws relating to
Processing under this Agreement.
 
9.2.1 GDUFA Fees. Palatin shall reimburse Catalent for any fees Catalent may be
required to pay pursuant to the US Generic Drug User Fee Amendments of 2012
("GDUFA Fees"), [***] . GDUFA Fees are assessed on Catalent when an Abbreviated
New Drug Application ("ANDA") applicant identifies Catalent in an ANDA
application filed with FDA. GDUFA Fees are assessed by the FDA annually and
shall be paid by Palatin annually, where applicable. Prior to October 1st of
each year, and where applicable, Catalent will invoice Palatin for [***] the
annual GDUFA Fees Catalent incurs for each Catalent manufacturing or packaging
facility identified in any Palatin ANDA(s) pursuant to FDA regulations (this
includes but is not limited to any Catalent facility which manufactured or
packaged Palatin's registration batches).
 
 

 
 
9.3 Governmental Inspections and Requests. Catalent shall promptly advise
Palatin if an authorized agent of any Regulatory Authority (A) notifies Catalent
that it intends to or does visit the Facility for the purpose of reviewing the
Processing or (B) takes any regulatory action with respect to the Product or the
Processing. Catalent shall promptly provide to Palatin a report of the result of
any such inspection by any Regulatory Authority to the extent directly related
to the Processing of the Product and furnish to Palatin a copy of all written
information provided by such Regulatory Authority to the extent specifically and
directly related to the Processing of the Product, if any, within 10 days of
Catalent’s receipt of such information, in each case redacted as appropriate to
protect any Confidential Information of Catalent and/or confidential information
Catalent’s other customers. Palatin acknowledges that it may not direct the
manner in which Catalent fulfills its obligations to permit inspection by and to
communicate with Regulatory Authorities. Notwithstanding the foregoing, Catalent
shall not initiate or participate in any communications with any Regulatory
Authority concerning the Product or the Processing thereof without prior
consultation with Palatin, unless Catalent (i) reasonably believes it is
required by Applicable Law to make the communication under conditions that make
such prior consultation impossible or impractical, in which case Catalent shall
promptly thereafter notify Palatin in writing of the nature and content of the
communication, or (ii) is requested to do so by Palatin. If any inspection by
Regulatory Authorities is related to the Processing of the Product, Palatin
shall reimburse Catalent for all reasonable and documented costs associated with
such inspection attributable to the Processing of the Product. If deficiencies
are identified in connection with any inspection by Regulatory Authorities
related to or otherwise affecting the Processing of the Product, Catalent shall
use commercially reasonable efforts to correct all such deficiencies in a timely
manner. Catalent shall advise Palatin periodically of progress being made with
respect to such deficiencies and notify Palatin, in writing, upon completion of
any corrective action taken.
 
9.4 Palatin Facility Audits. During the Term, Palatin’s Representatives shall be
granted access upon [***] prior notice, at reasonable times during regular
business hours, to (A) the portion of the Facilities where Catalent performs
Processing, (B) relevant personnel involved in Processing and (C) Processing
records described in Clause 9.1, in each case solely for the purpose of
verifying that Catalent is Processing in accordance with cGMPs, the
Specifications and the Product master Batch records. Palatin may not conduct an
audit under this Clause 9.4 more than [***] ; provided, that additional
inspections may be conducted in the event there is a material quality or
compliance issue concerning Product or its Processing. Palatin’s Quality
Assurance Manager will arrange Palatin audits with Catalent Quality Management.
Audits shall be designed to minimize, to the extent reasonably possible,
disruption of operations at the applicable Facility. Palatin’s Representatives
shall be required to sign Catalent’s standard visitor confidentiality agreement
prior to being allowed access to the Facility. Such Representatives shall comply
with the Facility’s rules and regulations. Palatin shall defend, indemnify and
hold harmless Catalent for any action or activity of such Representatives while
on Catalent’s premises.
 
9.5 Recall. If Catalent believes a recall, field alert, Product withdrawal or
field correction (“Recall”) may be necessary with respect to any Product
supplied under this Agreement, Catalent shall promptly notify Palatin. Catalent
will not act to initiate a Recall without the express prior written approval of
Palatin, unless otherwise required by Applicable Laws. If Palatin believes a
Recall may be necessary with respect to any Product supplied under this
Agreement, Palatin shall promptly notify Catalent and Catalent shall provide all
necessary cooperation and assistance to Palatin. Palatin shall provide Catalent
with an advance copy of any proposed submission to a Regulatory Authority in
respect of any Recall, and shall consider in good faith any comments from
Catalent. The cost of any Recall shall be borne by Palatin, and Palatin shall
reimburse Catalent for expenses incurred in connection with any Recall, in each
case unless such Recall is caused solely by Catalent’s breach of its obligations
under this Agreement with respect to Processing, violation of Applicable Laws or
its negligence or willful misconduct, then such cost shall be borne by Catalent;
provided, however, that for purposes hereof, such Catalent cost shall be limited
to reasonable, actual and documented administrative costs incurred by Palatin
(or its Affiliates, licensees or distributors) for such Recall and, subject to
Section 14, replacement of the Product subject to Recall in accordance with
Section 5.
 
9.6 Quality Agreement. Within six months after the Effective Date, and in any
event prior to the first Processing of Product hereunder, the parties shall
negotiate in good faith and enter into a quality or technical agreement (the
“Quality Agreement”). The Quality Agreement shall in no way determine liability
or financial responsibility of the parties for the responsibilities set out
therein. In the event of a conflict between any of the provisions of this
Agreement and the Quality Agreement with respect to quality-related activities,
including compliance with cGMP, the provisions of the Quality Agreement shall
govern. In the event of a conflict between any of the provisions of this
Agreement and the Quality Agreement with respect to any commercial matters,
including allocation of risk, liability and financial responsibility, the
provisions of this Agreement shall govern.
 
9.7 Quality Assurance/Quality Control Standards. Upon Palatin’s written request,
Catalent shall deliver to Palatin copies of Catalent’s quality assurance/quality
control investigations, deviations, out-of-Specification notifications and
change controls relevant to the Processing of Product. Catalent shall notify
Palatin of any material changes made to any of the foregoing or any
Specifications during the Term.
 
 

 
 
10. CONFIDENTIALITY AND NON-USE
 
10.1 Definition. As used in this Agreement, the term “Confidential Information”
includes all information furnished by or on behalf of Catalent or Palatin (the
“Discloser”), its Affiliates or any of its or their respective Representatives,
to the other party (the “Recipient”), its Affiliates or any of its or their
respective Representatives, whether furnished before, on or after the Effective
Date and furnished in any form, including written, verbal, visual, electronic or
in any other media or manner and information acquired by observation or
otherwise during any site visit at the other party’s facility. Confidential
Information includes all proprietary technologies, know-how, trade secrets,
discoveries, inventions and any other intellectual property (whether or not
patented), analyses, compilations, business or technical information and other
materials prepared by either party, their respective Affiliates, or any of its
or their respective Representatives, containing or based in whole or in part on
any information furnished by the Discloser, its Affiliates or any of its or
their respective Representatives. Confidential Information also includes the
existence of this Agreement and its terms.
 
10.2 Exclusions. Notwithstanding Clause 10.1, Confidential Information does not
include information that (A) is or becomes generally available to the public or
within the industry to which such information relates other than as a result of
a breach of this Agreement, (B) is already known by the Recipient at the time of
disclosure as evidenced by the Recipient’s written records, (C) becomes
available to the Recipient on a non-confidential basis from a source that is
entitled to disclose it on a non-confidential basis or (D) was or is
independently developed by or for the Recipient without reference to the
Confidential Information of the Discloser as evidenced by the Recipient’s
written records.
 
10.3 Mutual Obligation. The Recipient agrees that it will not use the
Discloser’s Confidential Information except in connection with the performance
of its obligations hereunder and will not disclose, without the prior written
consent of the Discloser, Confidential Information of the Discloser to any third
party, except that the Recipient may disclose the Discloser’s Confidential
Information to any of its Affiliates and its or their respective Representatives
that (A) need to know such Confidential Information for the purpose of
performing under this Agreement, (B) are advised of the contents of this Clause
and (C) are bound to the Recipient by obligations of confidentiality at least as
restrictive as the terms of this Clause. Each party shall be responsible for any
breach of this Clause by its Affiliates or any of its or their respective
Representatives.
 
10.4 Permitted Disclosure. The Recipient may disclose the Discloser’s
Confidential Information to the extent required under Applicable Laws or by the
rules of any stock exchange on which the securities of the Discloser are listed
in each case upon the reasonable advice of Recipient’s legal counsel; provided,
that prior to making any such legally required disclosure, the Recipient shall
give the Discloser as much prior notice of the requirement for and contents of
such disclosure as is practicable under the circumstances and use reasonable
efforts to limit the scope of any such disclosure and to obtain confidential
treatment of all Confidential Information disclosed pursuant to such
requirement. Any such disclosure, however, shall not relieve the Recipient of
its confidentiality obligations as set forth in this Section 10.
 
10.5 Disclosure of this Agreement. A public disclosure of this Agreement or the
Manufacturing Preparation and Services Agreement is permitted if, upon the
reasonable advice of legal counsel of the party making the public disclosure, it
is required by law (a "Required Disclosure"), including without limitation in a
filing with the US Securities and Exchange Commission or the NYSE MKT, provided
that the party making the public disclosure shall provide copies of the Required
Disclosure to the non-disclosing party reasonably in advance of such filing or
other disclosure for the non-disclosing party's review and comment (but not
approval). Each party shall consider in good faith any comments provided by the
other party with respect to the content of the Required Disclosure, including
with respect to the redaction of this Agreement and any other agreement that is
to be filed or otherwise publicly disclosed in connection with the Required
Disclosure, and shall incorporate such comments or redactions in the Required
Disclosure if doing so does not interfere with the disclosing party's ability to
comply with any requirements under applicable law or any request or requirement
of the US Securities and Exchange Commission or the NYSE MKT.
 
10.6 No Implied License. Except as expressly set out in Clause 10.1, the
Recipient will obtain no right of any kind or license under any Confidential
Information of the Discloser, including any patent application or patent, by
reason of this Agreement. All Confidential Information will remain the sole
property of the Discloser, subject to Section 11.
 
10.7 Return of Confidential Information. Upon expiry or termination of this
Agreement, the Recipient will (and will cause its Affiliates and its and their
respective Representatives to) cease its use and, upon written request, within
[***] either return or destroy (and certify as to such destruction) all
Confidential Information of the Discloser, including any copies thereof, except
for a single copy which may be retained for the sole purpose of ascertaining
compliance with its obligations under this Agreement and any copies remaining on
the Recipient’s standard computer back-up devices.
 
10.8 Survival. The obligations of confidentiality and non-use contained in this
Section 10 will terminate [***] after the expiry or termination of this
Agreement, except with respect to trade secrets, for which the obligations of
confidentiality and non-use contained in this Section 10 will continue for so
long as such information remains a trade secret under applicable law.
 
 

 
 
11. INTELLECTUAL PROPERTY
 
For purposes hereof, “Palatin IP” means all intellectual property and
embodiments thereof owned by or licensed to Palatin as of the Effective Date or
developed by Palatin other than in connection with this Agreement; “Catalent IP”
means all intellectual property and embodiments thereof owned by or licensed to
Catalent as of the Effective Date or developed by Catalent other than in
connection with this Agreement; “Invention” means any intellectual property
developed by either party or jointly by the parties in connection with this
Agreement; [***] . The parties shall cooperate to achieve the allocation of
rights to Inventions anticipated herein and each party shall be solely
responsible for costs associated with the protection of its intellectual
property.
 
12. REPRESENTATIONS AND WARRANTIES
 
12.1 Catalent. Catalent represents, warrants and undertakes to Palatin that:
 
A. at the time of delivery by Catalent as provided in Clause 6.1, all Product
shall have been Processed in accordance with Applicable Laws and in conformance
with the Specifications and the Quality Agreement and will not be adulterated,
misbranded or mislabeled within the meaning of Applicable Laws; provided, that
Catalent shall not be liable for defects attributable to Palatin-supplied
Materials (including artwork, advertising and labeling);
 
B. Catalent will comply with all Applicable Laws applicable to Catalent’s
performance under this Agreement and its use of any Palatin-supplied Materials;
 
C. To Catalent’s knowledge, there are no patents owned by others, or trade
secrets or other proprietary rights of others, that would be infringed by the
Catalent IP in Catalent’s performance of the Agreement;
 
D. Catalent and its employees, affiliates, contractors, and agents have never
been (i) debarred or (ii) convicted of a crime for which a person can be
debarred, under Section 335(a) or 335(b) of the Federal Food, Drug, and Cosmetic
Act; and
 
E. Catalent will not release any Batch of Product if the required certificates
of conformance indicate that Product does not comply with the Specifications.
 
12.2 Palatin. Palatin represents, warrants and undertakes to Catalent that:
 
A. all Palatin-supplied Materials shall have been produced in accordance with
Applicable Laws, shall comply with all applicable specifications, including the
Specifications, shall not be adulterated, misbranded or mislabeled within the
meaning of Applicable Laws, and shall have been provided in accordance with the
terms and conditions of this Agreement;
 
B. the content of all artwork provided to Catalent shall comply with all
Applicable Laws;
 
C. all Product delivered to Palatin by Catalent will be held, used and disposed
of by or on behalf of Palatin in accordance with all Applicable Laws, and
Palatin will otherwise comply with all laws, rules, regulations and guidelines
applicable to Palatin’s performance under this Agreement;
 
D. Palatin will not release any Batch of Product if the required certificates of
conformance indicate that Product does not comply with the Specifications and if
Palatin does not hold all necessary Regulatory Approvals to market and sell the
Product;
 
E. Palatin has all necessary authority to use and to permit Catalent to use
pursuant to this Agreement all intellectual property related to Product or
Palatin-supplied Materials (including artwork), and the Processing of the
foregoing, including any copyrights, trademarks, trade secrets, patents,
inventions and developments; to Palatin’s knowledge, there are no patents owned
by others related to the Palatin IP utilized with the Product that would be
infringed or misused by Palatin’s performance of the Agreement; and, to
Palatin’s knowledge, no trade secrets or other proprietary rights of others
related to the Palatin IP utilized with the Product would be infringed or
misused by Palatin’s performance of this Agreement; and
 
 

 
 
F. to Palatin’s knowledge, the work to be performed by Catalent under this
Agreement will not violate or infringe upon any trademark, tradename, copyright,
patent, trade secret, or other intellectual property or other right held by any
person or entity.
 
12.3 Mutual: No transactions or dealings under this Agreement shall be conducted
with or for an individual or entity that is designated as the target of any
sanctions, restrictions or embargoes administered by the United Nations,
European Union, United Kingdom, or the United States.
 
12.4 Limitations. Save as expressly set out in this Agreement, neither party
gives any representation or warranty in respect of the subject matter of this
Agreement, and all representations and warranties that may be implied (by
statute or otherwise) are hereby excluded to the maximum extent permitted by
law.
 
13. INDEMNIFICATION
 
13.1 Indemnification by Catalent. Catalent shall defend, indemnify and hold
harmless Palatin, its Affiliates, and their respective directors, officers and
employees (“Palatin Indemnitees”) from and against any and all claims, losses,
demands, liabilities, damages, costs and expenses (including reasonable
attorneys’ fees and reasonable investigative costs) in connection with any claim
or action by any third party (“Losses”) arising out of or resulting from (A) any
breach of its representations, warranties or obligations set out in this
Agreement, (B) any negligence or willful misconduct by Catalent or (C) any
actual or alleged infringement or violation of any patent, trade secret,
copyright, trademark or other proprietary rights of a third party by the
Catalent IP used in Catalent’s performance of its obligations under this
Agreement, but for the avoidance of doubt not with respect to any such
infringement or violation due to Palatin IP, API Inventions or Palatin-supplied
Materials; in each case except to the extent that any of the foregoing arises
out of or results from any Palatin Indemnitee’s negligence, willful misconduct
or breach of this Agreement.
 
13.2 Indemnification by Palatin. Palatin shall defend, indemnify and hold
harmless Catalent, its Affiliates, and their respective directors, officers and
employees (“Catalent Indemnitees”) from and against any and all Losses arising
out of or resulting from (A) any breach of its representations, warranties or
obligations set out in this Agreement, (B) any manufacture, packaging, sale,
promotion, distribution or use of or exposure to Product or Palatin-supplied
Materials, including product liability or strict liability, (C) Palatin’s
exercise of control over the Processing, to the extent that Palatin’s
instructions or directions violate Applicable Laws, (D) the conduct of any
clinical trials utilizing Product or API, (E) any actual or alleged infringement
or violation of any third party patent, trade secret, copyright, trademark or
other proprietary rights by intellectual property or other information provided
by Palatin, including Palatin-supplied Materials, or (F) any negligence or
willful misconduct by Palatin; in each case except to the extent that any of the
foregoing arises out of or results from any Catalent Indemnitee’s negligence,
willful misconduct or breach of this Agreement.
 
13.3 Indemnification Procedures. All indemnification obligations in this
Agreement are conditioned upon the indemnified party (A) promptly notifying the
indemnifying party of any claim or liability of which the indemnified party
becomes aware (including a copy of any related complaint, summons, notice or
other instrument); provided, that failure to provide such notice within a
reasonable period of time shall not relieve the indemnifying party of any of its
obligations hereunder except to the extent the indemnifying party is prejudiced
by such failure, (B) cooperating with the indemnifying party in the defense of
any such claim or liability and any related settlement negotiations (at the
indemnifying party’s expense) and (C) not compromising or settling any claim or
liability without prior written consent of the indemnifying party.
 
14. LIMITATIONS OF LIABILITY
 
14.1 TOTAL LIABILITY. CATALENT’S TOTAL LIABILITY UNDER THIS AGREEMENT SHALL IN
NO EVENT EXCEED [***] .
 
14.2 INDIRECT DAMAGES. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR
INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL LOSS OR DAMAGES, OR FOR
LOSS OF REVENUES, PROFITS OR DATA, ARISING OUT OF PERFORMANCE UNDER THIS
AGREEMENT, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, EVEN IF SUCH PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
 
 

 
 
15. INSURANCE
 
Each party shall, at its own cost and expense, obtain and maintain in full force
and effect during the Term the following in US dollars or foreign currency
equivalent: (A) Commercial General Liability Insurance with a per-occurrence
limit of not less than [***] ; (B) Products and Completed Operations Liability
Insurance with a per-occurrence limit of not less than [***] ; and (C) All Risk
Property Insurance, including transit coverage, in an amount equal to the full
replacement value of its property while in, or in transit to, a Catalent
facility as required under this Agreement. Each party may self-insure all or any
portion of the required insurance as long as, together with its Affiliates, its
US GAAP or foreign currency equivalent net worth is greater than [***] or its
annual EBITDA (earnings before interest, taxes, depreciation and amortization)
is greater than [***] . Each required insurance policy, other than
self-insurance, shall be obtained from an insurance carrier with an A.M. Best
rating of at least A- VII. If any of the required policies of insurance are
written on a claims made basis, such policies shall be maintained throughout the
Term and for a period of at least [***] thereafter. Each party shall obtain a
waiver of subrogation clause from its property insurance carriers in favor of
the other party, and such waivers will operate the same whether insurance is
carried through third parties or self-insured. Upon the other party’s written
request from time to time, each party shall promptly furnish to the other party
a certificate of insurance or other evidence of the required insurance.
 
16. TERM AND TERMINATION
 
16.1 Term. This Agreement shall commence on the Effective Date and shall
continue until the end of the fifth Contract Year (the “Initial Term”), unless
earlier terminated in accordance with Clause 16.3 (the Initial Term as may be
extended in accordance with Clause 16.2, the “Term”).
 
16.2 Renewal. The Initial Term shall automatically be extended for one 24-month
period unless at least [***] prior to the end of the Initial Term one party
gives the other party written notice of its desire to terminate as of the end of
the Initial Term.
 
16.3 Termination. This Agreement may be terminated:
 
A. by either party if steps are taken by or against the other party for the
appointment of a liquidator, an administrator, a receiver, administrative
receiver, manager, interim receiver, trustee, trustee in bankruptcy, nominee or
supervisor or the other party proposes or enters into an agreement or
arrangement with its creditors generally or makes an assignment for the benefit
of its creditors generally, or otherwise suffers or permits the taking of any
steps for adjudicating it to be bankrupt or insolvent and any such process, if
reasonably shown to be warranted, frivolous or vexatious, is not withdrawn,
dismissed or discharges within [***] , or any equivalent or similar action to
the above in consequence of the insolvency of that party is taken in any
jurisdiction and is not withdrawn, dismissed or discharged in the circumstances
described above;
 
B. by either party if the other party materially breaches any of the provisions
of this Agreement and such breach is not cured within [***] after the giving of
written notice requiring the breach to be remedied; provided, that in the case
of a failure of Palatin to make payments in accordance with the terms of this
Agreement, Catalent may terminate this Agreement if such payment breach is not
cured within [***] of receipt of notice of non-payment from Catalent;
 
C. by Palatin pursuant to Clause 4.7; and
 
D. by Palatin upon notice and payment of the termination penalty provided in
Clause 16.4D.
 
16.4 Effect of Termination. Expiry or termination of this Agreement shall be
without prejudice to any rights or obligations that accrued to the benefit of
either party prior to such expiry or termination. In the event of a termination
of this Agreement:
A. Catalent shall promptly return to Palatin, at Palatin’s expense and
direction, all remaining inventory of Product and Palatin-supplied Materials;
provided, that all outstanding undisputed invoices have been paid in full;
 
B. Palatin shall pay Catalent all undisputed invoiced amounts outstanding, plus,
upon receipt of an undisputed invoice(s), amounts for any (i) Product that has
been shipped pursuant to Purchase Orders but not yet invoiced, (ii) Product
Processed pursuant to Purchase Orders that has been completed but not yet
shipped, and (iii) in the event that this Agreement is terminated for any reason
other than by Palatin pursuant to Clause 16.3A, 16.3B or 16.3C, all Product in
process of being Processed pursuant to Purchase Orders (or, alternatively,
Palatin may instruct Catalent to complete such work in process, and the
resulting completed Product shall be governed by clause (ii)); and
 
 

 
 
C. In the event that this Agreement is terminated for any reason other than by
Palatin pursuant to Clause 16.3A, 16.3B or 16.3C, Palatin shall pay Catalent for
all out-of-pocket costs and expenses incurred, and all noncancellable
commitments made, in connection with Catalent’s performance of this Agreement,
so long as such costs, expenses or commitments were made by Catalent consistent
with Palatin’s then current Firm Commitment and any minimum purchase obligations
required by the vendor; provided, however, that notwithstanding the foregoing,
Palatin shall have no obligation to pay Catalent for costs, expenses or
commitments made with respect to Product in process of being Processed pursuant
to Purchase Orders (it being understood that the amounts payable pursuant to
Clause 16.4B(ii) shall fully compensate Catalent with respect to such Product in
process).
 
D. If this Agreement is terminated by Palatin pursuant to Clause 16.3D or for
any reason other than pursuant to Clause 16.3B or 16.3C, then Palatin shall pay
Catalent a termination penalty in accordance with the following schedule:
 
 
Date of Termination
Amount of Termination Penalty
 
During Contract Year 1
[***]
 
During Contract Year 2
[***]
 
During Contract Year 3
[***]

 
16.5 Survival. The rights and obligations of the parties shall continue under
Sections 11 (Intellectual Property), 13 (Indemnification), 14 (Limitations of
Liability), 17 (Notice), 18 (Miscellaneous); under Clauses 10 (Confidentiality
and Non-Use) and 15 (Insurance), in each case to the extent expressly stated
therein; and under Clauses 7.3 (Payment Terms), 7.4 (Taxes), 7.5 (Palatin and
Third Party Expenses), 9.1 (Record Keeping), 9.5 (Recall), 12.4 (Limitations on
Warranties), 16.4 (Effect of Termination) and 16.5 (Survival), in each case in
accordance with their respective terms if applicable, notwithstanding expiry or
termination of this Agreement.
 
17. NOTICE
 
All notices and other communications hereunder shall be in writing and shall be
deemed given: (A) when delivered personally or by hand; (B) when delivered by
facsimile transmission (receipt verified); (C) when received or refused, if sent
by registered or certified or recorded post (return receipt requested), postage
prepaid; or (D) when delivered by courier service; in each case, to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice; provided, that notices of a change of address shall be
effective only upon receipt thereof):
 
To Palatin: 
Palatin Technologies, Inc.
4-B Cedar Brook Drive
Cranbury, New Jersey 08512 USA
Attn: Chief Financial Officer
Facsimile: (609) 495-2202
 
With a copy to: 
Thompson Hine LLP
335 Madison Avenue, 12th Floor
New York, New York 10017 USA
Attn: Faith Charles, Esq.
Facsimile: (212) 344-6101
 
To Catalent: 
Catalent Belgium S.A.
Rue Font St. Landry
10 Parc Mercator B-1120
Neder over Heembeek, Belgium
Attn: General Manager
Facsimile: 32-2-788-39-59
 
With a copy to: 
Catalent Pharma Solutions
14 Schoolhouse Road
Somerset, NJ 08873 USA
Attn: General Counsel (Legal Department)
Facsimile: +1 (732) 537-6491
 
 

 
 
18. MISCELLANEOUS
 
18.1 Entire Agreement; Amendments. This Agreement, together with the Quality
Agreement and each Purchase Order and Statement of Work, constitutes the entire
understanding between the parties, and supersedes any contracts, agreements or
understandings (oral or written) of the parties, with respect to the subject
matter hereof. For the avoidance of doubt, this Agreement does not supersede any
existing generally applicable confidentiality agreement between the parties as
it relates to time periods prior to the date hereof or to business dealings not
covered by this Agreement. No term of this Agreement may be amended except upon
written agreement of both parties, unless otherwise expressly provided in this
Agreement.
 
18.2 Captions; Certain Conventions. The headings used in this Agreement are for
convenience only and are not to be interpreted or construed as a substantive
part of this Agreement. Unless otherwise expressly provided herein or the
context of this Agreement otherwise requires, (A) words of any gender include
each other gender, (B) words such as “herein”, “hereof”, and “hereunder” refer
to this Agreement as a whole and not merely to the particular provision in which
such words appear, (C) words using the singular shall include the plural, and
vice versa, (D) the words “include(s)” and “including” shall be deemed to be
followed by the phrase “but not limited to”, “without limitation” or words of
similar import, (E) the word “or” shall be deemed to include the word “and”
(e.g., “and/or”) and (F) references to “Clause” or other subdivision, or to an
Attachment or other appendix, without reference to a document are to the
specified provision or Attachment of this Agreement. This Agreement shall be
construed as if it were drafted jointly by the parties.
 
18.3 Further Assurances. The parties agree to execute such further instruments
and to undertake such other acts as may be reasonably necessary or appropriate
to give full effect to the terms of this Agreement.
 
18.4 No Waiver. In no event shall any delay, failure or omission (in whole or in
part) in enforcing, exercising or pursuing any right, power, privilege, claim or
remedy conferred by or arising under this Agreement or by law, be deemed to be
or construed as a waiver of that or any other right, power, privilege, claim or
remedy in respect of the circumstances in question, or operate so as to bar the
enforcement of that, or any other right, power, privilege, claim or remedy, in
any other instance at any time or times subsequently.
 
18.5 Severability. If any term of this Agreement is declared invalid or
unenforceable by a court or other body of competent jurisdiction, the remaining
terms of this Agreement will continue in full force and effect.
 
18.6 Independent Contractors. The relationship of the parties is that of
independent contractors, and nothing in this Agreement is intended to create or
will be construed as creating between the parties the relationship of joint
venture, co-partners, employer/employee or principal/agent.
 
18.7 Successors and Assigns. Neither party may assign this Agreement, in whole
or in part, without the prior written consent of the other party; provided,
however, that either party may, without the other party’s consent, assign this
Agreement in its entirety to an Affiliate or to a successor to substantially all
of the business or assets of the assigning party or the assigning party’s
business unit responsible for performance under this Agreement.
 
18.8 Third Party Rights. This Agreement shall not confer any rights or remedies
upon any person or entity other than the parties to this Agreement and their
respective successors and permitted assigns, and a person or entity who is not a
party to this Agreement has no rights to enforce any term of this Agreement.
 
18.9 Governing Law. This Agreement and the legal relations between the parties
in connection herewith shall be governed by, and construed in accordance with,
the laws of the State of New Jersey, USA, without regard to the conflict of law
principles thereof. The United Nations Convention on Contracts for the
International Sale of Goods shall not apply to this Agreement.
 
18.10 Alternative Dispute Resolution. Any dispute that arises between the
parties in connection with this Agreement shall first be presented to the senior
executives of the parties for consideration and resolution. If such executives
cannot reach a resolution of the dispute within a reasonable time, not to exceed
30 days unless otherwise agreed by the parties in writing, then such dispute
shall be submitted to arbitration by the International Institute for Conflict
Prevention and Resolution, 575 Lexington Avenue, 21st Floor, New York, NY  10022
(“CPR”) by one arbitrator mutually agreed upon by the Parties. If no agreement
can be reached within 30 days after names of potential arbitrators have been
proposed by the CPR, then the CPR will choose one arbitrator having reasonable
experience in commercial transactions of the type provided for in this
Agreement. The arbitration shall take place in the English language in New York
City, New York, in accordance with the CPR administered arbitration rules then
in effect, and judgment upon any award rendered in such arbitration will be
binding and may be entered in any court having jurisdiction thereof. Unless
otherwise agreed to by the parties in writing, the arbitration shall commence
within 60 days of the date on which a written demand for arbitration is filed.
The arbitrator’s decision shall set forth a reasoned basis for any award of
damages or finding of liability. The arbitrator shall not have power to award
damages in excess of actual compensatory damages and shall not multiply actual
damages or award punitive damages.
 
 

 
 
18.11 Prevailing Party. In any dispute resolution proceeding between the parties
in connection with this Agreement, the prevailing party will be entitled to
recover its reasonable attorney’s fees and costs in such proceeding from the
other party.
 
18.12 Publicity. Neither party will make any press release or other public
disclosure regarding this Agreement or the transactions contemplated hereby
without the other party’s express prior written consent, except as required
under Applicable Laws, by any governmental agency or by the rules of any stock
exchange on which the securities of the disclosing party are listed, in which
case the party required to make the press release or public disclosure shall use
commercially reasonable efforts to obtain the approval of the other party as to
the form, nature and extent of the press release or public disclosure prior to
issuing the press release or making the public disclosure. Notwithstanding the
foregoing, the parties hereto intend to make a jointly agreed press release with
respect to the Agreement within 60 days after the Effective Date or at such
other time as mutually agreed by the parties.
 
18.13 Right to Dispose. If Catalent requests in writing from Palatin direction
with respect to disposal of any inventories of Product, Palatin-supplied
Materials, Palatin Equipment, other equipment, samples or other items belonging
to Palatin and is unable to obtain a response from Palatin within 90 days after
making such request, Catalent shall be entitled in its sole discretion to
dispose of all such items.
 
18.14 Force Majeure. Except as to payments required under this Agreement,
neither party shall be liable in damages for, nor shall this Agreement be
capable of termination by reason of, any delay in such party’s performance, or
breach of its obligations, hereunder if such delay or breach is caused by events
beyond such party’s reasonable control, including acts of God, law or regulation
or other action or failure to act of any government or agency thereof, war or
insurrection, civil commotion, destruction of production facilities or materials
by earthquake, fire, flood or weather, labor disturbances, epidemic or failure
of suppliers, public utilities or common carriers. If the events shall continue
unabated for 90 days, then both parties shall meet to discuss and negotiate in
good faith what modifications to this Agreement should result from such events.
 
18.15 Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original but all of which together will
constitute one and the same instrument. Delivery of an executed counterpart of
this Agreement by fax or e-mail in an image format (e.g., .pdf file) shall be as
effective as delivery of a manually executed counterpart of this Agreement.
 
(signature page follows)
 
 
 

 
 
IN WITNESS WHEREOF, the parties have caused their respective duly authorized
representatives to execute this Agreement effective as of the Effective Date.
 
CATALENT BELGIUM S.A.
PALATIN TECHNOLOGIES, INC. 

 
   

By:     /s/ Wim Blendeman
By:    /s/ Stephen T. Wills
Name: Wim Blendeman
Name:  Stephen T. Wills
Title: General Manager
Title: CFO

 

 
 

 
 
 
ATTACHMENT A
 
VALIDATION SERVICES
 
 
[To be agreed by the parties within ninety (90) days following the Effective
Date and, when agreed to, to form a part of this Agreement.
Attachment to reflect standard Catalent quotation format, including pricing.
If no validation services are desired, state “N/A” on this page.]
ATTACHMENT B
 
PRODUCT MAINTENANCE SERVICES
 
 
[***]
 
 
 
 

 
ATTACHMENT C
 
SPECIFICATIONS
 
 
[***]
 
 
 

 
 
ATTACHMENT D
 
PRICING, FEES AND MINIMUM REQUIREMENT
 
[***]
 
 

 
 
ATTACHMENT E
 
COUNTRIES INCLUDED IN TERRITORY
 
Canada
 
Kosovo
Former Yugoslav Republic of Macedonia
 
Turkey
 
 
Albania
Andorra
Bosnia and Herzegovina
Iceland
Liechtenstein
Monaco
Montenegro
Norway
San Marino
Serbia
Switzerland
Vatican City State
 
Armenia
Azerbaijan
Belarus
Georgia
Kazakhstan
Kyrgyzstan
Moldova
Russia
Tajikistan
Ukraine
Uzbekistan
Turkmenistan
Mongolia
Vietnam
 
People’s Republic of China
Taiwan
Hong Kong S.A.R.
Macau S.A.R.
Republic of Korea
 
 
 

 
 
ATTACHMENT E
 
FORM STATEMENT OF WORK
 
[***]