Exhibit 10.4

FOIA CONFIDENTIAL TREATMENT REQUEST BY

HEDGEPATH PHARMACEUTICALS, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 30-0793665

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: Confidential treatment requested with respect to certain portions hereof
denoted with “***”

Final

Date: May 15, 2015

 

 

Second Amended

and Restated Supply

and License

Agreement

 

 

 

Mayne Pharma Ventures Pty Ltd (Mayne Pharma)

HedgePath Pharmaceuticals, Inc. (HPPI)

 

 

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Table of contents

 

 

Table of contents

     2   

Details

     6   

Agreed terms

     8   

1.

 

Defined terms & interpretation

     8   

1.1

 

Defined terms

     8   

1.2

 

Interpretation

     11   

1.3

 

Amendment and Restatement

     12   

2.

 

Term

     12   

2.1

 

Initial Term

     12   

2.2

 

Extension

     12   

2.3

 

Acknowledgment with respect to continuing obligations

     12   

3.

 

Licence

     13   

3.1

 

Licence to exploit the Product in the Territory

     13   

3.2

 

HPPI obligations

     13   

3.3

 

Supporting the exclusive licence

     13   

3.4

 

Sub licensing the MP Licensed Rights

     14   

4.

 

Development

     14   

4.1

 

Development Plan and Budget

     14   

4.2

 

JDC

     14   

4.3

 

Material development decisions

     15   

4.4

 

Mayne Pharma support

     15   

5.

 

Marketing Authorisation

     16   

5.1

 

Obtaining and maintaining Marketing Authorisations

     16   

5.2

 

Assistance by Mayne Pharma

     17   

5.3

 

Failure to obtain Marketing Authorisations

     17   

6.

 

Manufacture and supply of Product

     17   

6.1

 

Forecasts

     17   

6.2

 

Orders

     17   

6.3

 

Manufacture; Failure to Supply

     17   

6.4

 

Backup manufacturer

     18   

7.

 

Payments

     18   

7.1

 

HPPI Payments

     18   

7.2

 

Review of Prices

     18   

7.3

 

Mayne Pharma Payments

     18   

7.4

 

Payment terms

     18   

7.5

 

Reimbursement

     19   

8.

 

Delivery, risk and title

     19   

8.1

 

Delivery

     19   

8.2

 

Risk

     19   

8.3

 

Title

     19   

 

 

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9.

 

Acceptance of Product

     19   

9.1

 

Certificate of Analysis

     19   

9.2

 

Defective Product

     19   

9.3

 

Sole remedy

     20   

10.

 

Complaints

     20   

10.1

 

Handling customer complaints

     20   

10.2

 

Notification of complaints

     20   

10.3

 

Adverse Drug Events

     20   

10.4

 

Supplementary agreements

     20   

11.

 

Recalls

     20   

11.1

 

Notice of recall

     20   

11.2

 

Directing that the Product be recalled

     21   

11.3

 

Administering a recall

     21   

11.4

 

Cost of the recall

     21   

11.5

 

Submission to independent analysis

     21   

12.

 

Performance obligations

     21   

12.1

 

Business Plan

     21   

12.2

 

Promotional Material

     22   

12.3

 

Efforts to maximise sales

     22   

12.4

 

Minimum Annual Volumes

     22   

13.

 

Compliance with laws and regulations

     22   

13.1

 

HPPI’s obligations

     22   

13.2

 

Mayne Pharma’s obligations

     23   

13.3

 

Anti-corruption

     23   

14.

 

Inspection

     23   

15.

 

Representations and warranties

     24   

15.1

 

Legal capacity and relationships

     24   

15.2

 

Mayne Pharma warranties

     24   

15.3

 

HPPI warranties

     24   

16.

 

Liability, indemnity and insurance

     25   

16.1

 

No exclusion or limitation

     25   

16.2

 

Exclusion and disclaimer of implied obligations

     25   

16.3

 

Limitation of liability regarding matters other than Non-Excludable Obligations

     25   

16.4

 

Indemnity

     25   

16.5

 

HPPI Insurance

     25   

16.6

 

Mayne Pharma Insurance

     26   

16.7

 

Maintain insurance

     26   

16.8

 

Evidence of insurance

     26   

17.

 

Confidentiality

     26   

17.1

 

Definition

     26   

17.2

 

Restrictions on disclosure and use

     27   

17.3

 

Exceptions

     27   

18.

 

Intellectual Property Rights

     27   

18.1

 

Intellectual Property Rights in the Product as at the Start Date

     27   

 

 

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18.2

 

***

     28   

18.3

 

Reserved

     28   

18.4

 

***

     28   

18.5

 

Development of Intellectual Property Rights and Licence of HPPI Licensed Rights

     28   

18.6

 

Notification of infringement

     28   

18.7

 

Right to take action

     28   

19.

 

Branding

     28   

19.1

 

Directions regarding use of the Trade Mark

     28   

19.2

 

Samples of marketing materials

     29   

19.3

 

Use of the Trade Mark

     29   

19.4

 

Goodwill

     29   

19.5

 

No right for HPPI to register the Trade Mark

     29   

20.

 

Termination

     29   

20.1

 

Termination for breach by a party

     29   

20.2

 

Termination by Mayne Pharma for cause arising under a related agreement

     29   

20.3

 

Notification of insolvency events

     30   

20.4

 

Change of control and disposal of assets or business by HPPI

     30   

20.5

 

Impact of claims of infringement

     30   

20.6

 

Accrued rights and remedies

     31   

20.7

 

Sell down or repurchase

     32   

20.8

 

Return of Confidential Information

     32   

21.

 

Force majeure

     32   

21.1

 

Occurrence of Force Majeure Event

     32   

21.2

 

Termination

     33   

22.

 

Notices and other communications

     33   

22.1

 

Service of notices

     33   

22.2

 

Effective on receipt

     33   

23.

 

Dispute resolution

     33   

24.

 

GST

     34   

24.1

 

Interpretation

     34   

24.2

 

Consideration is GST exclusive

     34   

24.3

 

Gross up of consideration

     34   

24.4

 

The sale of the Product is intended to be a GST-free export of goods

     34   

24.5

 

Reimbursements (net down)

     34   

24.6

 

Tax invoices

     35   

24.7

 

Adjustments

     35   

24.8

 

Similar goods and services taxes or value added taxes

     35   

25.

 

Tax

     35   

25.1

 

Payments free of taxes; obligations to withhold; payments on account of taxes

     35   

25.2

 

Refunds

     35   

26.

 

Miscellaneous

     36   

26.1

 

Survival of Obligations

     36   

26.2

 

Approvals and consents

     36   

26.3

 

Announcements

     36   

26.4

 

Subcontracting

     36   

26.5

 

Assignment

     36   

 

 

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26.6

 

Costs

     36   

26.7

 

Relationship

     36   

26.8

 

No modification

     36   

26.9

 

Non waiver

     36   

26.10

 

Entire agreement

     37   

26.11

 

Further Action

     37   

26.12

 

Severability

     37   

26.13

 

Counterparts

     37   

26.14

 

Governing law

     37   

Schedule 1 – Agreement details

     38   

Schedule 2 – Not used

     39   

Schedule 3 – Development Plan

     40   

Schedule 4 – Product and Product Specification

     41   

Schedule 5 – Economic details

     42   

Schedule 6 – Qualification of Backup Manufacturer

     45   

Schedule 7 – Licence of HPPI Licensed Rights

     46   

 

 

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Details

 

 

Date    May 15, 2015 Parties    Name    Mayne Pharma Ventures Pty Ltd, an
Australian company ACN 168 896 357 Short form name    Mayne Pharma Notice
details   

Level 14, 474 Flinders Street, Melbourne, Vic 3000, Australia

Facsimile: +61 3 9614 7022

   Attention: General Counsel Name    HedgePath Pharmaceuticals, Inc., a company
incorporated in Delaware, successor in interest by merger to Commonwealth
Biotechnologies, Inc, a Virginia corporation Short form name    HPPI Notice
details   

324 South Hyde Park Avenue #350, Tampa, FL 33606, United States

Facsimile: +1 813-527-0500

   Attention: Nicholas Jon Virca, President & CEO

Background

 

A Mayne Pharma manufactures and has rights in respect of the Product.

 

B HPPI develops and commercialises medicinal products.

 

C On the terms and conditions set out in this Agreement:

 

  (i) Mayne Pharma agrees to supply HPPI with the Product and provide to HPPI a
license to certain Intellectual Property Rights; and

 

  (ii) the parties agree to participate in the JDC.

 

D Mayne Pharma International Pty Ltd, a company incorporated in Australia (ACN
007 870 984) (MPI) and HPPI entered into that certain Supply and License
Agreement dated on or about September 3, 2013 (the “Original Agreement”).

 

E MPI and HPPI entered into that certain Amendment No. 1 to the Original
Agreement, dated on or about December 17, 2013 (“Amendment No. 1”).

 

F MPI and HPPI entered into that certain Amendment No. 2 to the Original
Agreement, dated on or about March 6, 2014 (“Amendment No. 2”).

 

G MPI assigned, and Mayne Pharma assumed, the rights and obligations under the
Original Agreement as amended by Amendment No. 1 and Amendment No. 2.

 

H Mayne Pharma had the right to terminate the Original Agreement (as amended),
if HPPI did not obtain equity funding of at least Five Million Dollars (USD5
million) or lesser amount as agreed to by the parties, on or before May 30,
2014. In consideration of Mayne Pharma not exercising such termination right,
HPPI agreed to issue to Mayne Pharma in a private placement certain stock under
the Mayne Pharma Purchase Agreement (as defined) and to enter into related
agreements with Mayne Pharma, Hedgepath, LLC (as defined) and others.

 

 

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I Pursuant to clause 26.8 of the Original Agreement, Mayne Pharma and HPPI
amended and replaced, in their entirety, their agreements as set forth in the
Original Agreement, Amendment No. 1 and Amendment No. 2, with the agreements,
terms, conditions, representations and warranties set forth in that certain
Amended and Restated Supply Agreement, dated on or about June 24, 2014 (“First
Amended and Restated Supply and License Agreement”).

 

J MPI and HPPI entered into that certain Amendment No. 1 to the First Amended
and Restated Supply Agreement, with effect from September 19, 2014 (“Amendment
No. 1 to the First Amended and Restated Supply and License Agreement”).

 

K Pursuant to clause 26.8 of the First Amended and Restated Supply and License
Agreement, in connection with Mayne Pharma’s investment of Two Million Five
Hundred Thousand Dollars (USD2.5 million) in HPPI under the 2015 SPA (as
defined), Mayne Pharma and HPPI desire to amend and replace, in their entirety,
their agreements as set forth in the First Amended and Restated Supply and
License Agreement and Amendment No. 1 to the First Amended and Restated Supply
and License Agreement, with the agreements, terms, conditions, representations
and warranties set forth herein.

 

 

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Agreed terms

 

 

1. Defined terms & interpretation

 

1.1 Defined terms

In this agreement:

Actual Launch Date means the date of the first commercial sale of the Product in
any part of the Field, directly or indirectly, by HPPI.

Adverse Drug Event means any untoward medical occurrence in a patient or
clinical investigation subject administered with the Product, including any
unfavourable and unintended sign (including an abnormal laboratory finding),
symptom, or disease temporally associated with the use of the Product, whether
or not considered related to the Product.

Affected Obligations is defined in clause 21.1(a)(ii).

Affiliate means, with respect to a party, any person which, directly or
indirectly, is controlled by, controls or is under common control with that
party. In this definition, “control” means having the power to exercise or
control the right to vote attached to 50% or more of the issued voting equity in
that party, to appoint one half or more of the directors to the board or the
managers of the party, or to determine substantially the conduct of the party’s
business activities. Notwithstanding this definition, but solely for purposes of
this Agreement and not applicable laws, rules and regulations generally, if
Mayne Pharma controls HPPI:

 

  (a) Affiliates of HPPI will not include Mayne Pharma nor any person that would
otherwise be an Affiliate of HPPI as a result of Mayne Pharma’s control of HPPI;
and

 

  (b) Affiliates of Mayne Pharma will not include HPPI nor any person that would
otherwise be an Affiliate of Mayne Pharma as a result of Mayne Pharma’s control
of HPPI.

Agreement means this Second Amended and Restated Supply and License Agreement.

Alternate Product means any product ***.

API means active pharmaceutical ingredient.

Budget is defined in clause 4.1(b).

Business Day means:

 

  (a) for receiving a notice under clause 22, a day that is not a Saturday,
Sunday, public holiday or bank holiday in the place where the notice is
received; and

 

  (b) for performing an obligation or exercising a right by Mayne Pharma, a day
that is not a Saturday, Sunday, bank holiday or public holiday in Melbourne,
Australia;

 

  (c) for performing an obligation or exercising a right by HPPI, a day that is
not a Saturday, Sunday, bank holiday or public holiday in New York, New York,
USA; and

 

  (d) for all other purposes, a day that is not a Saturday, Sunday, bank holiday
or public holiday in Melbourne, Australia.

Business Hours means the hours between 9am and 5pm on a Business Day.

Business Plan is the business plan provided by HPPI under clause 12.1 and
updated from time to time in accordance with that clause.

 

 

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Certificate of Analysis means a document which is signed and dated by an
authorised representative of Mayne Pharma containing analysis results and
certifying that the Product conforms with the Product Specification.

Commercial Year means a year starting at the start of the first Quarter after
the Target Launch Date.

Competing Product means ***.

Confidential Information is defined in clause 17.1.

CPI means the ‘Price Indexes of Materials Used in Manufacturing Industries,
Australia’ issued by the Australian Bureau of Statistics using the index figure
for chemicals.

Defective Product is defined in clause 9.2.

Delivery Date is defined in clause 6.2(c).

Developed Intellectual Property Rights is defined in clause 18.5.

Development Plan means the plan for the research, development and registration
activities relating to the Product, as at the Start Date which shall be provided
by HPPI to Mayne Pharma for approval as provided in clause 4.1, and as may be
updated in accordance with clause 4.1(a) and 4.3(b).

Disclosing Party is defined in clause 17.1.

Equity Holders Agreement means the amended and restated equity holders agreement
dated of even date herewith between Mayne Pharma, HPPI, Hedgepath, LLC, Frank E.
O’Donnell, Jr., M.D. and Nicholas J. Virca.

Field means treatment of human patients with cancer via oral administration. The
initial three indications included within the Field shall be prostate, lung and
skin cancer, which shall be developed in accordance with the Development Plan.
It is agreed that HPPI has the exclusive right hereunder to develop the Product
for additional indications in the Field; provided, however, that HPPI may not
expand the Field to include any other types of cancer or any other medical
indication unless agreed to in advance in writing by Mayne Pharma.

Force Majeure Event means, in relation to a party, anything outside the
reasonable control of the party, including:

 

  (a) any act or omission of a third person (except for an act or omission of
any Affiliate or contractor, or in relation to HPPI, any Sub Licensee);

 

  (b) fire, flood, earthquake, elements of nature or act of God; or

 

  (c) riot, civil disorder, rebellion or revolution.

Forecast is defined in clause 6.1(a).

Forecast Period is set out in Schedule 5.

Good Distribution Practice means the guidelines for the proper distribution of
medicinal products for human use in the Territory, including in accordance with
21 CFR 210/211 and USP 1079, as each may be amended from time to time.

Good Manufacturing Practice means the guidelines for the proper manufacture of
medicinal products for human use in the Territory, including in accordance with
in accordance with 21 CFR 210/211, as may be amended from time to time.

Hedgepath, LLC means a Hedgepath, LLC, a limited liability company organised in
the State of Florida.

 

 

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HPPI Licensed Rights is defined in item 1 of Schedule 7.

HP Patents means each of US patent application 61/813,122 (prostate-specific
antigen as biomarker for hedgehog pathway inhibitor treatment and prognostic
monitoring of prostate cancer) and US patent application 61/831,823 (Treatment
and Prognostic Monitoring of Cancer Using Hedgehog Pathway Inhibitors) in the
name of Hedgepath, LLC and any resulting issued patents whether or not in the
Territory, and all continuations-in-part, continuations or divisions of any such
patent or patents, or substitutes of it, and any reissues, extensions, or
renewals of it, whether or not in the Territory.

Initial Term is set out in Schedule 1.

Intellectual Property Rights or IPR means all intellectual property rights
subsisting anywhere in the world, including:

 

  (a) inventions, know how, patents, copyrights, designs, trade and service
marks, logos and any right to have information kept confidential; and

 

  (b) any application or right to apply for registration of any of the rights
referred to in paragraph (a),

whether or not such rights are registered or capable of being registered.

JDC is defined in clause 4.2.

Marketing Authorisation means a registration, approval or licence from a
Relevant Regulatory Authority in the Territory for the importation, storage,
promotion, sale or distribution of the Product in the Field.

Mayne Pharma Purchase Agreement is defined in the Equity Holders Agreement.

MP Licensed Rights means all Intellectual Property Rights in the Product
existing as at the Start Date and owned by Mayne Pharma or its Affiliates:

 

  (a) comprising, in respect of patent rights, *** in the name of Mayne Pharma,
together with and any resulting issued patents in the Territory, and all
continuations-in-part, continuations or divisions of any such patent or patents,
or substitutes of it, and any reissues, extensions, or renewals of it, in the
Territory; and

 

  (b) excluding rights in respect of trade and service marks and logos.

Minimum Annual Volume for the Product is as agreed by the parties in accordance
with item 1.2 of Schedule 5.

Minimum Order Quantity means the batch size for the Product as set out in
Schedule 5.

***.

Off Label Sales is defined in clause 7.3(a).

Order is defined in clause 6.2(a).

Personnel, of a party, means its employees, officers, directors, agents,
consultants and contractors (to avoid doubt, such contractors not including the
other party).

Precluded Extent is defined in clause 21.1.

Precluded Party is defined in clause 21.1.

Price is set out in Schedule 5.

Product means the product set out in Schedule 4, and any other product agreed by
the parties in writing for the purposes of this Agreement from time to time (at
which time the parties must also agree in

 

 

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writing related amendments to Schedule 4 and Schedule 5), it being acknowledged
and agreed that the term “Product” may include products covering different
medical indications developed under the Development Plan, provided the same are
included within the scope of the Field.

Product Specification means the specification with respect to the manufacture,
packaging, quality and characteristics (including the raw materials and product
specification) and testing of the Product, as set out in Schedule 4.

Quality Agreement means the technical agreement between the parties detailing
the specification and technical terms for the manufacture of the Product as set
out in the Marketing Authorisation.

Quarter means a 3 month period starting 1 January, 1 April, 1 July or 1 October.

reasonable commercial efforts means ***.

Recipient is defined in clause 17.2.

Relevant Regulatory Authority, in relation to a country or region in or
comprising the Territory, means any governmental authority (whether federal,
state or local) regulating the manufacture, importation, storage, promotion,
sale, distribution or use of therapeutic substances, and in the case of
Australia and the USA includes the Therapeutic Goods Administration (TGA) and
the Food and Drug Administration (FDA) respectively, or any successor body.

Safety Data Exchange Agreement (SDEA) means the agreement between the parties
setting out the rules and procedures for exchanging information concerning
certain safety and pharmacovigilance issues.

Sales Forecast is set out in item 1.2 of Schedule 5.

Start Date is set out in Schedule 1.

Sub Licensee is defined in clause 3.4.

Tax means any tax (including any GST or VAT), withholding tax, duties, levies,
charges, fees and other imposts of any kind (including any fine, interest,
penalty and expenses in connection with those items) levied, assessed, charged
or collected in connection with this Agreement or the performance of services
under this Agreement, but does not include any income or capital gains tax.

Target Launch Date is 30 June 2017, as that date may be extended by agreement of
the parties in writing.

Term means the Initial Term and any extensions under clause 2.2.

Territory is set out in Schedule 1.

Trade Mark means US trade mark (number 77793077) “SUBA” for goods and services
in class 5 (pharmaceutical and veterinary preparations having enhanced
bioavailability excluding pharmaceutical products for the treatment of opioid
addiction) and any other trademarks (whether registered or unregistered)
notified in writing by Mayne Pharma to HPPI for the purposes of this Agreement
from time to time.

2015 SPA is defined in the Equity Holders Agreement.

 

1.2 Interpretation

In this Agreement, except where the context otherwise requires:

 

  (a) the singular includes the plural and vice versa, and a gender includes
other genders;

 

  (b) another grammatical form of a defined word or expression has a
corresponding meaning;

 

 

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  (c) a reference to a clause, paragraph, schedule or annexure is to a clause or
paragraph of, or schedule or annexure to, this Agreement, and a reference to
this Agreement includes any schedule or annexure;

 

  (d) a reference to a document or instrument includes the document or
instrument as novated, altered, supplemented or replaced from time to time;

 

  (e) a reference to AUD is to Australian dollars, to USD is to United States
dollars, to GBP is to British pounds and to EUR is to euros;

 

  (f) a reference to time is to Melbourne, Australia time;

 

  (g) a reference to a party is to a party to this Agreement, and includes the
party’s executors, administrators, successors and permitted assigns and
substitutes;

 

  (h) a reference to a person includes a natural person, partnership,
corporation, limited liability company, trust, association, governmental or
local authority or agency or other entity;

 

  (i) a reference to a statute, ordinance, code or other law includes
regulations and other instruments under it and consolidations, amendments,
re-enactments or replacements of any of them;

 

  (j) the meaning of general words is not limited by specific examples
introduced by including, for example or similar expressions;

 

  (k) a rule of construction does not apply to the disadvantage of a party
because the party was responsible for the preparation of this Agreement or any
part of it;

 

  (l) if a day on or by which an obligation must be performed or an event must
occur is not a Business Day, the obligation must be performed or the event must
occur on or by the next Business Day;

 

  (m) headings are for ease of reference only and do not affect interpretation;
and

 

  (n) clauses 1 and 26 prevail over a Schedule to the extent of any
inconsistency.

 

1.3 Amendment and Restatement

Mayne Pharma and HPPI hereby agree by their mutual execution hereof that this
Agreement amends, restates and supersedes, in their entirety, effective as of
May 15, 2015, each and all their agreements as set forth in the First Amended
and Restated Supply and License Agreement and Amendment No. 1 to the First
Amended and Restated Supply and License Agreement.

 

2. Term

 

2.1 Initial Term

This Agreement starts effective as of the Start Date and continues for the
Initial Term unless terminated in accordance with its terms and conditions.

 

2.2 Extension

This Agreement automatically continues after the Initial Term for additional
periods of ***, unless a party gives notice of its wish not to extend this
Agreement at least *** before the end of the Initial Term or any extended term
under this clause 2.2 or this Agreement is terminated in accordance with its
terms and conditions.

 

2.3 Acknowledgment with respect to continuing obligations

HPPI acknowledges that Mayne Pharma has no ongoing obligations with respect to
the continuing grant of the IP licence other than under clauses 3.3, 4.1(a) and
4.1(g). This does not limit Mayne Pharma’s obligations to the supply of Product
and its related obligations in the remainder of this Agreement, including under
clauses 5.2, 6 to 11 and clause 13.2.

 

 

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LICENCE

 

3. Licence

 

3.1 Licence to exploit the Product in the Territory

Mayne Pharma grants to HPPI an exclusive licence to exploit the Product in the
Field in the Territory, including:

 

  (a) to conduct the activities in the Territory under the Development Plan; and

 

  (b) to import, promote, market, sell and distribute the Product in the
Territory,

which licence:

 

  (c) comprises the right to copy and exploit the MP Licensed Rights and to use
the Trade Mark, to the extent reasonably necessary or desirable to exploit the
Product in the Field in the Territory;

 

  (d) may only be assigned or sub licensed in accordance with this Agreement or
otherwise with the prior written consent of Mayne Pharma; and

 

  (e) excludes the right to manufacture, except by a Backup Manufacturer in
accordance with Schedule 6.

 

3.2 HPPI obligations

HPPI must:

 

  (a) obtain from Mayne Pharma all its requirements for the Product, including
for clinical trials, importation, promotion, marketing, sale or distribution in
the Territory;

 

  (b) not directly itself, or indirectly through any third party:

 

  (i) research, develop, manufacture, import, promote, market, sell, distribute
or otherwise have any commercial interest or involvement in any Competing
Product in the Territory during the Term and *** after the end of the Term; or

 

  (ii) sell or distribute the Product to any other party which it knows, or has
reasonable grounds for suspecting, will sell or distribute the Product outside
the Territory or outside the Field;

 

  (iii) import, promote, market, sell or distribute the Product outside the
Territory or outside the Field; and

 

  (c) refer to Mayne Pharma all enquiries, sales leads, prospects and other
information HPPI may receive concerning sales and prospective sales of the
Product outside the Territory or the Field.

 

3.3 Supporting the exclusive licence

Mayne Pharma must not, directly itself or indirectly through any third party,
import, promote, market, distribute or sell the Product or any Competing Product
in the Territory in the Field during the Term, other than as a result of any off
label use of an Alternate Product which the parties acknowledge is outside the
reasonable control of Mayne Pharma (but subject to the provisions of clause 7.3
hereof).

 

 

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3.4 Sub licensing the MP Licensed Rights

HPPI may only grant a sub licence of the MP Licensed Rights and the Trade Mark
to a third party (including any Affiliate or approved contractor) (Sub Licensee)
with the prior written consent of Mayne Pharma under a written agreement that:

 

  (a) includes obligations on that third party that relate to use and disclosure
of Intellectual Property Rights and Confidential Information at least equivalent
to those imposed on the HPPI under this Agreement, without any right of further
disclosure or sub license;

 

  (b) ends at the same time as this Agreement ends (whether by expiry or
termination); and

 

  (c) includes an assignment to HPPI of all Intellectual Property Rights that
relate to the Product,

and HPPI remains responsible for ensuring its Sub Licensees comply with such
written agreement.

 

4. Development

 

4.1 Development Plan and Budget

 

  (a) Within *** of the execution of this Agreement, HPPI will propose to Mayne
Pharma, and Mayne Pharma shall approve, an updated Development Plan as
recommended by the JDC. Such Development Plan, as finally approved by both
parties, shall be included as an updated Schedule 3 hereto and shall be deemed
an integrated part of this Agreement.

 

  (b) Within *** of the execution of this Agreement, HPPI will propose to Mayne
Pharma a budget for HPPI to conduct its activities (***) *** (once approved, the
Budget). ***.

 

  (c) The Budget shall include a detailed listing of (amongst other customary
matters for budgets for the clinical development of a pharmaceutical product),
including third party service provider costs to be borne by HPPI.

 

  (d) HPPI and Mayne Pharma will conduct the activities set out in, and in
accordance with, the Development Plan and further in accordance with the Budget.

 

  (e) Up until the Target Launch Date, the parties must review the Development
Plan and the Budget through the JDC ***.

 

  (f) ***.

 

  (g) Mayne Pharma agrees to provide, as part of its services pursuant to clause
4.4 and at its expense, the relevant CMC section of the Product dossier to
support pre-IND activities set out in the Development Plan as of the Start Date.

 

4.2 JDC

 

  (a) Within *** from the Start Date, the parties will form a joint development
committee (JDC):

 

  (i) to make recommendations to HPPI on research, development and registration
activities relating to the exploitation of the Product in the Field in the
Territory, including medico regulatory strategy;

 

  (ii) to review progress against the current Development Plan and Budget and
recommend amendments to HPPI;

 

  (iii) to consider and make recommendations to HPPI for appropriate
intellectual property protection for the outcomes of any research and
development;

 

 

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  (iv) to direct the conduct of entire clinical program for the Product,

which JDC will continue until the Target Launch Date. The parties acknowledge
and agree that the JDC is solely advisory in nature, shall have no power or
authority to legally bind HPPI or Mayne Pharma, and at all times shall remain
subject to the authority of the board of directors of HPPI. ***.

 

  (b) Each of the parties will appoint two representatives to the JDC. In
addition, from time to time the parties may, by agreement in writing, invite
additional representatives from either party, or industry experts or
consultants, to participate in certain meetings on specific issues as needed, at
HPPI’s cost and expense. ***.

 

  (c) Each of the parties may change its representatives at any time during the
term of this Agreement by notice to the other party, except that Nicholas J.
Virca will be a representative of HPPI from the Start Date unless or until it is
no longer possible for reasons outside HPPI’s reasonable control.

 

  (d) Each member of the JDC (including the chairperson) shall be entitled to
one (1) vote on all matters which must be presented under this Agreement (or
which are otherwise presented) to the JDC for approval, with the chairperson to
have a casting vote that resolves any deadlock. The JDC shall fully abide by
such vote or action in the conduct of its affairs, subject always to clause
4.2(a) and the continuing authority of the board of directors of HPPI.

 

  (e) The JDC may hold meetings in person, by teleconference or by video
conference:

 

  (i) on a regular basis until the Target Launch Date, but not less than one per
month;

 

  (ii) as otherwise reasonably requested by the parties.

The JDC may also take action by written consent of the JDC members, and a
majority of the JDC members may act by written consent on any matter which must
be presented under this Agreement (or which are otherwise presented) to the JDC
for approval.

 

  (f) The site, date and proposed agenda of any meeting of the JDC must be
determined by agreement of the members of the JDC.

 

4.3 Material development decisions

HPPI agrees that any material decisions regarding the following are subject to
the prior written consent of Mayne Pharma, such consent not to be unreasonably
withheld, conditioned or delayed:

 

  (a) the research, development and registration of the Product by HPPI;

 

  (b) any material amendments to the Development Plan or the Budget; and

 

  (c) the seeking of appropriate intellectual property protection for the
outcomes of any research and development (including any decision to disclose
Confidential Information of HPPI relating to the Product, and any filing,
prosecution or maintenance of patent rights), all of which, for the avoidance of
doubt, shall be considered Developed Intellectual Property Rights subject to
clause 18.5 and Schedule 7.

 

4.4 Mayne Pharma support

 

  (a) From the date of this Agreement until ***, Mayne Pharma will provide to
HPPI, from time to time, the following services in connection with the
exploitation of the Product in the Territory in the Field and the conduct of the
Development Plan, comprising:

 

  (i) coordinating the JDC meetings;

 

 

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  (ii) directing the conduct of the entire clinical program for the Product,
subject to the oversight and approval by the JDC and, as applicable hereunder or
for other matters binding on HPPI, the HPPI board of directors;

 

  (iii) medico regulatory strategy, including directing a third party (at HPPI’s
expense, subject to clause 4.4(b)) to prepare the regulatory documents to
progress and file any Marketing Authorisation, including any application for,
maintenance of or variation of, any Marketing Authorisation, for the Product;

 

  (iv) intellectual property strategy; and

 

  (v) other administrative services as agreed with HPPI,

but excluding, without limitation, the provision of legal, tax, accounting or
other professional advice.

 

  (b) Mayne Pharma shall obtain HPPI’s advance approval (which may be undertaken
by email by HPPI’s President, Chief Executive Officer or Chief Financial
Officer) prior to providing such services on a case by case basis (including,
for the avoidance of doubt, services which require, or would with the passage of
time require, cash outlays by or material obligations of HPPI). Mayne Pharma
shall use reasonable commercial efforts in performing such services, and shall
perform such services in accordance with all applicable laws, rules and
regulations.

 

  (c) Mayne Pharma shall provide all such services in accordance with the
Development Plan and within the spending guidelines set out in the Budget. The
cost of Mayne Pharma’s internal personnel and other internal costs and expenses
incurred by Mayne Pharma in the provision of such services shall be borne by
Mayne Pharma.

 

  (d) HPPI shall, at its expense, reimburse Mayne Pharma for any third party
costs incurred by Mayne Pharma in connection with the provision of such
services, subject to Mayne Pharma’s compliance with clauses 4.4(b), 4.4(c) and
subject to clause 7.5. Where possible, third party costs to be incurred in
connection with the provision of such services will be invoiced directly to
HPPI.

 

  (e) For purposes of HPPI’s and Mayne Pharma’s accounting and reporting, each
party shall reasonably cooperate with the other should the other party request
any accounting or financial information relating to Mayne Pharma’s services
under this clause 4.4.

 

5. Marketing Authorisation

 

5.1 Obtaining and maintaining Marketing Authorisations

HPPI must:

 

  (a) actively seek, in coordination with the JDC and Mayne Pharma and at its
own cost and expense (other than for services provided by Mayne Pharma under
clause 4.4), and use reasonable commercial efforts to obtain all Marketing
Authorisations in its own name;

 

  (b) pay fees or charges in respect of the application for all Marketing
Authorisations, maintenance of all Marketing Authorisations and the making of
any variation to all Marketing Authorisations; and

 

  (c) comply with the requirements of any Relevant Regulatory Authority within
the Territory, including in connection with any Marketing Authorisation and all
reporting obligations.

 

 

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5.2 Assistance by Mayne Pharma

Mayne Pharma will, at HPPI’s cost and expense other than for services provided
under clause 4.4:

 

  (a) assist HPPI in connection with any Marketing Authorisation, including any
application for, maintenance of or variation of, any Marketing Authorisation;
and

 

  (b) provide any documents required by HPPI in connection with any Marketing
Authorisation.

 

5.3 Failure to obtain Marketing Authorisations

If, notwithstanding HPPI’s compliance with clause 5.1, a Marketing Authorisation
has not been obtained by HPPI, any Affiliate or Sub Licensee at least *** before
the Target Launch Date, then following consultation with the other party for up
to ***, either party, acting reasonably, may terminate this agreement with
immediate effect with notice to the other party.

OBLIGATIONS RELATING TO SUPPLY OF PRODUCT

 

6. Manufacture and supply of Product

 

6.1 Forecasts

 

  (a) On the ***, HPPI must provide Mayne Pharma with a forecast of its monthly
requirements for the Product for the following Forecast Period (Forecast).

 

  (b) The first Forecast will include ***. For each subsequent Forecast:

***

 

6.2 Orders

 

  (a) HPPI must provide Mayne Pharma with a purchase order setting out the
quantities of the Product, desired delivery date and delivery instructions
(Order), ***.

 

  (b) Each Order must be for at least the Minimum Order Quantity, and any amount
above the Minimum Order Quantity for whole multiples of any incremental order
quantity specified in item 1 of Schedule 5, unless the parties agree otherwise
in writing before an Order is placed.

 

  (c) Within *** of receipt by Mayne Pharma of an Order, Mayne Pharma must
confirm its acceptance in writing and notify HPPI of the expected date of
delivery (Delivery Date) of the Product. Without limitation, Mayne Pharma may
refuse to confirm any quantity of Orders in a Quarter to the extent they exceed
*** of the most recent Forecast provided by HPPI for that Quarter.

 

  (d) Mayne Pharma agrees to use reasonable commercial efforts:

 

  (i) to provide a Delivery Date *** after the delivery date specified in the
Order; and

 

  (ii) to supply the Order by the Delivery Date.

 

  (e) No Order amends this Agreement unless HPPI expressly states in the Order
that it seeks to amend this Agreement, and Mayne Pharma agrees in writing to the
Order.

 

6.3 Manufacture; Failure to Supply

 

  (a) Mayne Pharma will manufacture the Product in accordance with all confirmed
Orders received from HPPI.

 

  (b) In the situation where Mayne Pharma is not able to supply Product, or
Mayne Pharma anticipates that it will be unable to supply Product to HPPI in
satisfaction of HPPI’s Orders or forecasted Orders, Mayne Pharma shall use
reasonable commercial efforts:

 

  (i) to inform HPPI in a timely manner about such situation and the details
causing such situation; and

 

 

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  (ii) to provide HPPI with a reasonable estimate of the length and extent of
production interruption or other issue affecting Mayne Pharma’s satisfaction of
HPPI’s Product demand.

 

6.4 Backup manufacturer

HPPI is entitled to qualify an alternate manufacturer of the Product in
accordance with Schedule 6.

 

7. Payments

 

7.1 HPPI Payments

In consideration for Mayne Pharma manufacturing and delivering the Products in
accordance with this Agreement, HPPI must make the payments set out in, and
comply with, Schedule 5.

 

7.2 Review of Prices

 

  (a) Mayne Pharma has the right to review and vary any Floor Price set out in
Schedule 5 by giving *** notice to HPPI, to reflect any changes in:

***

 

  (b) Mayne Pharma will consult with HPPI during the *** period of notice of a
variation under clause 7.2.

 

7.3 Mayne Pharma Payments

 

  (a) The parties acknowledge that notwithstanding clause 3.3, there is a risk
that Mayne Pharma may, directly itself or indirectly through any third party,
sell an Alternate Product in the Territory in the Field as a result of off label
use (Off Label Sales).

 

  (b) If HPPI becomes aware of any Off Label Sales in any Quarter ***, it must
notify Mayne Pharma promptly, and in any event, no later than ***, and provide
Mayne Pharma with its evidence of such Off Label Sales.

 

  (c) Prior to a Marketing Authorisation being obtained by HPPI, any Affiliate
or Sub Licensee, within *** after receipt of a notice from HPPI under clause
7.3(b), Mayne Pharma must pay to HPPI a cash royalty of *** on gross sales up to
USD*** and *** on gross sales over USD*** for the relevant Quarter for the
Alternate Product sold through Off Label Sales ***.

 

  (d) After a Marketing Authorisation is obtained by HPPI, any Affiliate or Sub
Licensee, if Off Label Sales of any Alternate Product exceed ***, then the
parties agree to enter into a good faith negotiation to enter into an
arrangement under which they will share profits from Off Label Sales of any
Alternate Product ***.

 

7.4 Payment terms

Each party must make payments due under this Agreement:

 

  (a) in the currency specified in Schedule 5 and where necessary, converted:

 

  (i) in respect of any payment covering a Quarter, at the average daily
exchange rate for the applicable Quarter as published by the financial
institution specified in Schedule 5; and

 

  (ii) otherwise, at the daily exchange rate quoted by the financial institution
specified in Schedule 5 on the date of payment;

 

  (b) to the bank account of the other party listed on the relevant invoice,
with the party making payment to bear the costs of any such remittance; and

 

 

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  (c) in the case of payments due to Mayne Pharma, to Mayne Pharma or its
nominee as specified on the relevant invoice.

 

7.5 Reimbursement

Where a party agrees to reimburse to the other party any costs or expenses, then
it will reimburse these amounts within *** from receipt of the other party’s
invoice for, and reasonable evidence of, such costs or expenses.

 

8. Delivery, risk and title

 

8.1 Delivery

Mayne Pharma must deliver the Product to HPPI in accordance with the delivery
terms set out in item 3 of Schedule 5. Any Product that HPPI is paying for must
have the minimum shelf life specified in item 4 of Schedule 5.

 

8.2 Risk

All risk of loss or of damage to the Product will pass to HPPI upon delivery of
the Product in accordance with the delivery terms set out in item 3 of
Schedule 5.

 

8.3 Title

Title to the Product will pass to HPPI upon payment in full of the Price payable
for that Product or if no amount is payable, then on delivery.

 

9. Acceptance of Product

 

9.1 Certificate of Analysis

Each delivery of the Product will be accompanied by a Certificate of Analysis
from Mayne Pharma in respect of the Product so delivered.

 

9.2 Defective Product

 

  (a) HPPI must notify Mayne Pharma within *** of delivery of the Product if
HPPI reasonably believes any of the Product does not conform to the Product
Specification (Defective Product).

 

  (b) If HPPI gives notice under clause 9.2(a), the parties agree to consult
with each other to resolve the issue (during which time Mayne Pharma may conduct
its own retention sample testing). If the discrepancy is not resolved within a
further *** from the receipt of the notice, the parties agree to appoint (at
HPPI’s expense) an independent analyst, acceptable to both parties, that will
carry out tests on representative samples taken from such shipment, and the
results of such tests will be binding on the parties.

 

  (c) If HPPI does not notify Mayne Pharma in accordance with clause 9.2(a),
then HPPI will be deemed to have accepted the Product at the end of the ***
period after delivery of the Product.

 

  (d) If the independent analyst determines that the Defective Product does not
conform to the Product Specification and as long as the Product has been
transported, handled and stored in accordance with the Marketing Authorisation
and all reasonable directions of Mayne Pharma once the Product has left Mayne
Pharma’s facility, then:

 

  (i) Mayne Pharma must, at its expense, replace any such Defective Product and
reimburse HPPI for the costs of the independent analyst; and

 

  (ii) all quantities of Defective Product must, at Mayne Pharma’s election and
expense be either:

 

 

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  (A) returned to Mayne Pharma at an address notified by Mayne Pharma, and
packed and shipped according to instructions provided by Mayne Pharma; or

 

  (B) destroyed by HPPI under Mayne Pharma’s direction.

 

  (e) If:

 

  (i) the independent analyst determines that the Defective Product does conform
to the Product Specification; or

 

  (ii) the Product has not been transported, handled and stored in accordance
with the Marketing Authorisation and all reasonable directions of Mayne Pharma
once the Product has been delivered to HPPI in accordance with this Agreement,

then HPPI is deemed to have accepted the Product and will reimburse Mayne Pharma
for any costs and expenses incurred by Mayne Pharma in attempting to resolve the
issue, including the costs of any retention sample testing conducted by Mayne
Pharma.

 

9.3 Sole remedy

Despite any other provision in this Agreement, HPPI’s sole remedy in respect of
Product which fails to conform to the Product Specification is, and Mayne
Pharma’s liability to HPPI under this Agreement will be, limited as set out in
clauses 9.2 and 16.3.

 

10. Complaints

 

10.1 Handling customer complaints

HPPI must handle all customer complaints relating to any Product in the
Territory and any related activities associated with reporting or management of
customer complaints.

 

10.2 Notification of complaints

If HPPI becomes aware of any material complaint in connection with the Product,
it must promptly notify Mayne Pharma of the complaint and provide details.

 

10.3 Adverse Drug Events

HPPI must advise Mayne Pharma as soon as reasonably practicable after becoming
aware of any Adverse Drug Event.

 

10.4 Supplementary agreements

 

  (a) For Product supplied for clinical trial use, the parties will enter into
an agreement outlining the party’s responsibilities with respect to the use of
the Product for that purpose.

 

  (b) The parties must execute a Safety Data Exchange Agreement and Quality
Agreement at least *** before the Target Launch Date.

 

  (c) This Agreement prevails to the extent of any inconsistency between it and
the Safety Data Exchange Agreement or the Quality Agreement. To avoid doubt,
clause 10.1 to 10.3 do not limit any obligations under the Safety Data Exchange
Agreement and Quality Agreement.

 

11. Recalls

 

11.1 Notice of recall

If a party determines any quantity of the Product should be recalled for any
reason, or a party is notified of a recall, that party must give the other party
notice within the time frames set out in the

 

 

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Safety Data Exchange Agreement of its request to recall that quantity and
specify its reasons. If a party determines that to avoid an immediate perceived
threat to health, time does not permit the provision of notice, such notice may
be made by telephone or e-mail transmission to the other party’s medical affairs
liaison and quality contact person to be confirmed in writing after such notice.

 

11.2 Directing that the Product be recalled

If, within *** of the receipt of notice under clause 11.1, the parties are
unable to agree on the need to undertake a recall (including after HPPI
discusses the issue with the Relevant Regulatory Authority), then either party
may direct that the Product be recalled, with or without the agreement of the
other party, if it reasonably determines that such recall is necessary to
protect the public health or is necessary to ensure compliance with applicable
laws, rules and regulations.

 

11.3 Administering a recall

HPPI must administer any recall of the Product in the Territory.

 

11.4 Cost of the recall

If the cause of the recall is because the Product does not conform to the
Product Specification, and it is as a result of a breach of warranty or
negligence by Mayne Pharma, then Mayne Pharma must, at its expense, reimburse to
HPPI for all its reasonable costs and expenses of any recall and the costs of
any independent analyst engaged under clause 11.5. Otherwise, all costs and
expenses in respect of the recall and the independent analyst are payable by
HPPI.

 

11.5 Submission to independent analysis

If the parties cannot agree on whether the Product conformed to the Product
Specification, then the parties agree to submit a sample of the Product to an
independent analyst, acceptable to both parties, for a report. Absent manifest
error, the finding of the independent analyst is binding on the parties

PERFORMANCE OBLIGATIONS

 

12. Performance obligations

 

12.1 Business Plan

 

  (a) At least *** before the Target Launch Date, HPPI must provide a business
plan to Mayne Pharma in connection with the distribution of Product in the
Territory outlining the sales and marketing of the Product in the Territory from
the Target Launch Date until the end of *** later, which plan must include
market situational analysis, market segmentation, targeting and position,
marketing strategies and selling strategies.

 

  (b) After the Target Launch Date, the parties must meet *** to review HPPI’s
Business Plan outlining the sales and marketing of the Product in the Territory
for the following ***. In developing the Business Plan, HPPI will use *** or
similar locally sourced data, provided such data are available. The parties will
discuss such Business Plan in good faith and HPPI may amend such Business Plan
following the discussions.

 

  (c) If HPPI fails to update the Business Plan in accordance with clause
12.1(b), the then current Business Plan will continue until updated in
accordance with that clause.

 

  (d) HPPI will use reasonable commercial efforts to achieve the objectives in
the Business Plan.

 

 

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12.2 Promotional Material

 

  (a) HPPI is responsible for all sales, distribution, public relations, medical
education and similar expenses related to HPPI’s promotion and marketing of the
Product in the Territory.

 

  (b) Mayne Pharma will, at its own expense, provide to HPPI information
relating to the Product and promotional information available to Mayne Pharma
which HPPI reasonably requires for the promotion and marketing of the Product in
the Territory but only to the extent that Mayne Pharma has the right to provide
such information.

 

  (c) HPPI will provide to Mayne Pharma at Mayne Pharma’s expense information
relevant to Mayne Pharma’s business outside the Territory.

 

  (d) HPPI must make available to Mayne Pharma samples of all materials
(including all advertisements, promotions and other marketing material) used by
it in respect of the Product, and grants to Mayne Pharma a non-exclusive,
perpetual, irrevocable, royalty free licence to use those materials in
connection with the importation, promotion, marketing, sale or distribution of
the Product outside the Territory, which licence is capable of sub license to
any Affiliate or licensee of Mayne Pharma.

 

12.3 Efforts to maximise sales

From the Target Launch Date:

 

  (a) until the Minimum Annual Volumes for the Product have been agreed by the
parties as provided for in Schedule 5 of this Agreement, HPPI must use best
efforts to maximise the sale of the Product in the Territory; and

 

  (b) after Minimum Annual Volumes have been established as provided for in
Schedule 5 of this Agreement, HPPI must use reasonable commercial efforts to
maximise the sale of the Product in the Territory.

 

12.4 Minimum Annual Volumes

 

  (a) HPPI will purchase in each Commercial Year at least the Minimum Annual
Volumes as agreed to by the parties in accordance with Schedule 5 hereof.

 

  (b) If, in any Commercial Year, HPPI purchases less than the Minimum Annual
Volumes, HPPI may elect to pay to Mayne Pharma the difference between the
aggregate Prices paid for the volume of Product actually purchased for that
Commercial Year and the value of the Minimum Annual Volumes for that Commercial
Year, within *** of the end of that Commercial Year.

 

  (c) If, in any Commercial Year, HPPI purchases less than the Minimum Annual
Volumes and has not elected to pay to Mayne Pharma the amount under clause
12.4(b) within *** of the end of the Commercial Year, then Mayne Pharma may,
with immediate effect by notice to HPPI, terminate this Agreement.

 

13. Compliance with laws and regulations

 

13.1 HPPI’s obligations

HPPI must:

 

  (a) promptly obtain and maintain as and when required all necessary
registrations, permits, approvals and licences in respect of HPPI’s activities
under this Agreement;

 

 

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  (b) advise Mayne Pharma of any matters necessary or relevant to be known by
Mayne Pharma to ensure that it manufactures the Product in compliance with all
applicable laws, rules and regulations;

 

  (c) conduct the activities under the Development Plan, and import, promote,
market, sell and distribute the Product in accordance with all laws, rules and
regulations, Good Distribution Practice and any Marketing Authorisation; and

 

  (d) transport, handle and store the Product in accordance with any Marketing
Authorisation and all reasonable directions specified by Mayne Pharma not
inconsistent with any Marketing Authorisation.

 

13.2 Mayne Pharma’s obligations

Mayne Pharma must:

 

  (a) obtain and maintain, as and when required, all necessary registrations,
permits, approvals and licences in respect of Mayne Pharma’s activities under
this Agreement, including in respect of the manufacture of the Product in
Australia;

 

  (b) manufacture the Product in accordance with all laws in Australia (or such
other jurisdiction in which the Product is manufactured) and the Marketing
Authorisation;

 

  (c) manufacture the Product in accordance with Good Manufacturing Practices;

 

  (d) ensure that Mayne Pharma’s premises comply with standards stipulated by
relevant State or Commonwealth authorities of Australia; and

 

  (e) transport, handle and store the Product in accordance with all laws and
Marketing Authorisations.

 

13.3 Anti-corruption

 

  (a) Without limitation, each party represents that it is now in compliance
with, and will at all times remain in compliance with, all applicable laws and
regulations relating to anti-corruption in Australia and in the Territory
(including the US Foreign Corrupt Practice Act), as well as the UK Bribery Act
2010 and related regulations, and any other applicable anti-corruption laws
prohibiting bribery or other forms of corruption, including money laundering,
within the public and private sectors.

 

  (b) Except as disclosed in writing, each party warrants that:

 

  (i) it does not have any interest which directly or indirectly conflicts with
its proper and ethical performance of this Agreement; and

 

  (ii) it will maintain arms-length relations with all third parties (including
government officials) with which it deals for, or on behalf of, the other party.

 

14. Inspection

Each party must procure that the other party or its authorised representative
may, at the other party’s expense and on reasonable notice, visit and inspect
the facilities of the first party, its Affiliates, sub licensees or its
contractors used in respect of the Product (not more than once per year), to
ensure compliance with this Agreement.

 

 

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LIABILITY

 

15. Representations and warranties

 

15.1 Legal capacity and relationships

Each party represents and warrants that:

 

  (a) it is a corporation organised and validly existing under the laws of its
jurisdiction of incorporation and has the legal capacity and authority to enter
this Agreement and perform its obligations under this Agreement; and

 

  (b) this Agreement is a valid and binding obligation of that party enforceable
in accordance with its terms, and it will not become a party to any agreement in
conflict with this Agreement.

 

15.2 Mayne Pharma warranties

 

  (a) Mayne Pharma represents and warrants that the Product supplied to HPPI
under this Agreement:

 

  (i) will conform in all material respects to the Product Specification; and

 

  (ii) will be manufactured in conformity with Good Manufacturing Practice, in
accordance with all Marketing Authorisations and in accordance with all laws in
Australia.

 

  (b) Mayne Pharma represents and warrants that it is the lawful and exclusive
owner of the entire right, title and interest in and to all MP Licensed Rights.

 

  (c) To the extent permitted by law, Mayne Pharma makes no other
representations or warranties, express or implied, with respect to the Product
or this Agreement. In particular:

 

  (i) Mayne Pharma does not warrant that the importation or sale of the Product
in the Territory will not infringe the Intellectual Property Rights of any third
party; and

 

  (ii) Except as expressly provided for in clause 4.4, Mayne Pharma provides no
warranties in respect of the provision of the services referred to in clause
4.4.

 

15.3 HPPI warranties

HPPI represents and warrants that:

 

  (a) as at the Start Date:

 

  (i) HPPI is successor by merger to Commonwealth Biotechnologies, Inc, a
Virginia corporation;

 

  (ii) the Amended Plan of Reorganization of CBI (the Plan), dated January 4,
2013, and filed in In re: Commonwealth Biotechnologies, Inc., Case
No. 11-30381-KRH, U.S. Bankruptcy Court, E.D. Virginia (the Case), has been
confirmed pursuant to a final and non-appealable order of the bankruptcy court;

 

  (iii) HPPI has delivered a true, correct and complete copy of the Plan with
all amendments to Mayne Pharma;

 

  (iv) the Effective Date, as defined in the Plan, has occurred and is
August 12, 2013 and HPPI has taken all actions reasonable and necessary to
formally close the Case;

 

  (v) there are no voting trusts, proxies, or other agreements or understandings
with respect to the voting of the capital stock of HPPI; and

 

  (vi) the HP Patents have been irrevocably assigned to HPPI on a royalty free
basis; and

 

 

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  (b) it will use reasonable commercial efforts to maintain all warehousing,
sales, personnel and facilities required to perform its obligations under this
Agreement.

 

16. Liability, indemnity and insurance

 

16.1 No exclusion or limitation

HPPI may have certain rights and remedies that cannot be excluded, restricted or
modified by agreement. Nothing in this Agreement operates to exclude, restrict
or modify the application of any implied condition or warranty, provision, the
exercise of any right or remedy, or the imposition of any liability under any
law where to do so would contravene that law or cause any term of this Agreement
to be void (Non-excludable Obligation).

 

16.2 Exclusion and disclaimer of implied obligations

Except for the Non-excludable Obligations and the express covenants,
representations and warranties set out in this Agreement, MAYNE PHARMA MAKES NO
OTHER COVENANTS, REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
THE WARRANTY OF NON INFRINGEMENT, OR ANY OTHER MATTER, ANY SUCH COVENANTS,
REPRESENTATIONS AND WARRANTIES BEING EXPRESSLY DISCLAIMED.

 

16.3 Limitation of liability regarding matters other than Non-Excludable
Obligations

Mayne Pharma’s liability to HPPI arising directly or indirectly under or in
connection with this Agreement or the performance or non-performance of this
Agreement and whether arising under any indemnity, statute, in tort (including
for negligence or otherwise (except as provided for below in this clause 16.3)),
or on any other basis in law or equity is limited as follows:

***

 

16.4 Indemnity

HPPI must indemnify and hold harmless and keep indemnified and held harmless
Mayne Pharma and each of its Personnel from and against all actions, claims,
demands, losses, damages, costs and expenses (including legal expenses as
between a solicitor and their own client) howsoever and wheresoever arising,
whether during or after the Term, which arise directly or indirectly from or in
respect of:

 

  (a) the research, development or registration activities relating to the
Product, directly or indirectly, by HPPI;

 

  (b) the importation, promotion, marketing, sale or distribution of the
Product, directly or indirectly, by HPPI;

 

  (c) the use or effects of such Product;

 

  (d) to avoid doubt and without limitation, any actual or alleged infringement
of Intellectual Property Rights (but excluding the MP Licensed Rights) arising
from any of activities, use or effects referred to in clauses 16.4(a) to
16.4(c),

except to the extent that such action, claim, demand, loss, damage, cost or
expense is caused by a breach of an express warranty given under this Agreement
by Mayne Pharma or the gross negligence, fraud or wilful misconduct of Mayne
Pharma or its Affiliates or Personnel.

 

16.5 HPPI Insurance

 

  (a)

HPPI must take out, at its own cost, adequate insurance cover for the Term (and
in the case of a claims based policy, for *** after), with reputable insurers to
the reasonable

 

 

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  satisfaction of Mayne Pharma, in respect of its liabilities under this
Agreement and its activities contemplated by this Agreement, which:

 

  (i) covers each of HPPI, Mayne Pharma and its Personnel for their respective
rights, interests and liabilities (to avoid doubt, in whatever country the
liability arises); and

 

  (ii) notes Mayne Pharma’s interest under the policy.

 

  (b) Without limiting clause 16.5(a):

 

  (i) for such period as there is a Mayne Pharma appointee to the board of
directors of HPPI, HPPI must take out, at its own cost, adequate director and
officer liability insurance cover;

 

  (ii) clinical trial insurance which provides coverage for at least *** for
each occurrence and *** in the aggregate or such other level of cover as agreed
in writing by the parties, acting reasonably, and which covers each of HPPI,
Mayne Pharma and its Personnel for their respective rights, interests and
liability arising directly or indirectly from or in respect of the conduct of
any clinical trial for the Product; and

 

  (iii) from the Actual Launch Date, HPPI must effect product and public
liability insurance which provides coverage for at least *** for each
occurrence, and which covers each of HPPI, Mayne Pharma and its Personnel for
their respective rights, interests and liabilities arising directly or
indirectly from or in respect of:

 

  (A) the research, development or registration activities relating to the
Product, directly or indirectly, by HPPI;

 

  (B) the importation, promotion, marketing, sale or distribution of the
Product, directly or indirectly, by HPPI; and

 

  (C) the use or effects of such Product.

 

16.6 Mayne Pharma Insurance

Mayne Pharma must effect and maintain product and public liability insurance,
with reputable insurers, which provides coverage for at least *** for each
occurrence.

 

16.7 Maintain insurance

Each party must maintain the insurance policies referred to in clause 16.5 or
16.6 (as applicable) throughout the Term and, in the case of a claims-based
policy, until *** after the termination or expiry of this Agreement.

 

16.8 Evidence of insurance

Promptly in response to a request by a party, the other party must provide to
the requesting party evidence of the currency of the insurance policies referred
to in clause 16.5 or 16.6 (as applicable).

CONFIDENTIALITY AND IPR

 

17. Confidentiality

 

17.1 Definition

Subject to clause 17.3, Confidential Information of a party (in this context,
the Disclosing Party) means all information regardless of its form:

 

  (a) treated by the Disclosing Party as confidential or in which it would be
reasonable to expect that the Disclosing Party has an expectation of
confidentiality (even if not specifically identified as confidential); and

 

 

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  (b) disclosed by the Disclosing Party to the other party or of which the other
party becomes aware, whether before or after the Start Date,

and any derived information from which that information can reasonably be
ascertained. Without limiting the generality of the foregoing, Confidential
Information shall include, information and materials related to Product,
processes, formulations, procedures, tests, equipment, data, batch records,
reports, know-how, patent positioning, relationships with consultants and
employees, business plans and business developments, and information concerning
the existence, scope or activities of any research, design, development,
manufacturing, marketing or other activities hereunder or otherwise relating to
the Disclosing Party or its business.

 

17.2 Restrictions on disclosure and use

Subject to the exceptions and permitted disclosures set out below, each party
(Recipient) agrees:

 

  (a) to keep the Confidential Information of the Disclosing Party strictly
secret and confidential from third parties (including any patent office); and

 

  (b) to use the Confidential Information only for the purposes of this
Agreement or exercise of the rights granted under this Agreement, and not for
any other activity (including the purchase or sale or securities of the
Disclosing Party in the public markets) without the prior written approval of
the other party,

except that each party may share such Confidential Information with any
Affiliate, sub licensee or approved contractors to the extent necessary or
reasonably desirable for the purposes of this Agreement, provided each party
remains responsible for ensuring such Affiliates, sub licensees or contractors
comply with restrictions on use and disclosure of information which are at least
equivalent to those set out in this Agreement, without any right of further
disclosure.

 

17.3 Exceptions

The restrictions on use and disclosure set out above do not apply to the extent
the Recipient can show the information:

 

  (a) was public knowledge or generally known at the date of its disclosure or
which subsequently becomes public knowledge or generally known through no act or
failure to act on the part of the Recipient;

 

  (b) is or was already in the Recipient’s possession and was not acquired
directly or indirectly from the Disclosing Party (in each case as shown by the
Recipient’s written records);

 

  (c) is or was acquired by the Recipient in good faith from a third party who
was not under an obligation of confidence with respect to that Confidential
Information; or

 

  (d) to the extent it is required by law, rule or regulation to be disclosed
(including the U.S. federal securities laws and the rules and regulations of the
U.S. Securities and Exchange Commission and the listing rules of the Australian
Stock Exchange).

 

18. Intellectual Property Rights

 

18.1 Intellectual Property Rights in the Product as at the Start Date

HPPI acknowledges and agrees that Mayne Pharma owns all Intellectual Property
Rights in the Product existing as at the Start Date other than the HP Patents,
HPPI Licensed Rights or any Intellectual Property Rights developed exclusively
by HPPI or its Affiliates or Personnel prior to the Start Date.

 

 

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18.2 ***

 

18.3 Reserved

 

18.4 ***

 

18.5 Development of Intellectual Property Rights and Licence of HPPI Licensed
Rights

 

  (a) From and after the Start Date, all Intellectual Property Rights relating
to the Product for its use in the Field that are (i) developed by HPPI, its
Affiliates or Personnel; (ii) jointly developed by HPPI and Mayne Pharma and
their respective Affiliates and Personnel, or (iii) developed by Mayne Pharma
and its Affiliates and Personnel in providing the services referred to in clause
4.4 (collectively, Developed Intellectual Property Rights) shall be the sole and
exclusive property of HPPI, and, to the extent created in part by Mayne Pharma,
its Affiliates or Personnel, Mayne Pharma hereby irrevocably transfers and
assigns to HPPI without additional consideration all such Intellectual Property
Rights. Notwithstanding the foregoing, the parties agree with Schedule 7 applies
to Developed Intellectual Property Rights.

 

  (b) All Intellectual Property Rights relating to the Product for its use in
the Field that are developed solely by Mayne Pharma, its Affiliates or Personnel
from and after the Start Date shall be the sole and exclusive property of Mayne
Pharma, but without limiting clause 3.3 of this Agreement.

 

18.6 Notification of infringement

Each party will immediately notify the other party if it becomes aware of
potential or actual:

 

  (a) infringement of the other party’s Intellectual Property Rights the subject
of this Agreement; or

 

  (b) the infringement of third party rights as a result of the research,
development and registration activities relating to the Product, or the
manufacture, importation, promotion, marketing, sale or distribution of the
Product, as contemplated under this Agreement.

 

18.7 Right to take action

Each party has the sole right at its own expense to take action in respect of
any potential or actual infringement of Intellectual Property Rights it owns,
regardless of the grant of any rights, exclusive or otherwise, to the other
party under this Agreement. In response to a request by a party taking such
action, the other party will provide information and assistance in connection
with such potential or alleged infringement to the extent it relates to the
Intellectual Property Rights which are the subject of this Agreement, and the
requesting party will reimburse to the other party all reasonable costs and
expenses incurred as a result.

 

19. Branding

 

19.1 Directions regarding use of the Trade Mark

HPPI may use the Trade Mark in connection with its promotion, marketing, sale
and distribution of the Product in the Territory, and must observe all
directions notified to it by Mayne Pharma regarding the depiction of its Trade
Marks.

 

 

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19.2 Samples of marketing materials

HPPI must submit to Mayne Pharma samples of all materials (including all
advertisements, promotions and other marketing material for the Product) that
depict the Trade Mark for approval by Mayne Pharma before use.

 

19.3 Use of the Trade Mark

HPPI must not, whether during the Term or after the end of this Agreement:

 

  (a) use the Trade Mark as part of its corporate, business or trading name;

 

  (b) use any other trade mark or name in conjunction with or in close proximity
to the Trade Mark;

 

  (c) use the Trade Mark in a manner which would jeopardise or invalidate any
registration (or prejudice any application for registration) of the Trade Mark
or could assist or give rise to an application to terminate, revoke or dilute
any such registration; or

 

  (d) use the Trade Mark in a manner which might prejudice the right or title of
Mayne Pharma to the Trade Mark.

 

19.4 Goodwill

HPPI acknowledges that any goodwill and other such rights in the Trade Marks
that may otherwise accrue to HPPI as a result of its use of the Trade Mark,
accrue to the benefit of Mayne Pharma.

 

19.5 No right for HPPI to register the Trade Mark

HPPI must not, whether during the Term or after the end of this Agreement, apply
to register anywhere in the Territory or the world any trade mark, or apply to
register or use any business name, company name or Internet domain name that
comprises or contains the Trade Mark or any words or images that are similar to
the Trade Mark without the prior written consent of Mayne Pharma.

TERMINATION

 

20. Termination

 

20.1 Termination for breach by a party

A party may terminate this Agreement with immediate effect by notice in the
manner set forth below to the other party if:

 

  (a) that other party breaches any material provision of this Agreement and
fails to remedy the breach within *** after receiving notice requiring it to do
so;

 

  (b) that other party breaches a material provision of this Agreement where
that breach is not capable of remedy; or

 

  (c) any event referred to in clause 20.3 happens to that other party (whether
or not notification has been provided under clause 20.3).

 

20.2 Termination by Mayne Pharma for cause arising under a related agreement

Mayne Pharma may terminate this Agreement with immediate effect by notice to
HPPI if:

 

  (a) any of HPPI, Hedgepath, LLC, Frank E. O’Donnell, Jr., M.D. or Nicholas J.
Virca breaches a material provision of the Equity Holders Agreement, and:

 

  (i) fails to remedy the breach within *** after receiving notice requiring it
to do so; or

 

  (ii) that breach is not capable of remedy;

 

 

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  (b) HPPI breaches a material provision of the Mayne Pharma Purchase Agreement
or the 2015 SPA, and:

 

  (i) fails to remedy the breach within *** after receiving notice requiring it
to do so; or

 

  (ii) that breach is not capable of remedy.

 

20.3 Notification of insolvency events

Each party must notify the other party immediately if:

 

  (a) that party ceases to carry on its business operations;

 

  (b) that party ceases to be able to pay its debts as they become due;

 

  (c) any step is taken by a mortgagee or secured party to take possession or
dispose of the whole or part of that party’s assets, operations or business;

 

  (d) that party makes a general assignment for the benefit of creditors;

 

  (e) that party becomes the subject of the filing or institution of bankruptcy,
liquidation or receivership proceedings;

 

  (f) any step is taken to appoint a receiver, a receiver and manager, a trustee
in bankruptcy, a provisional liquidator, a liquidator, an administrator or other
like person of the whole or part of that party’s assets, operations or business;
or

 

  (g) an order is made for winding up or dissolution without winding up of that
party or an effective resolution is passed for the winding up of that party.

 

20.4 Change of control and disposal of assets or business by HPPI

 

  (a) For so long as this Agreement is in effect, HPPI must seek the prior
written consent of Mayne Pharma before it disposes of the whole or a substantial
part of its assets, operations or business, such consent not to be unreasonably
withheld, conditioned or delayed. HPPI must, at its own reasonable expense,
provide to Mayne Pharma such information as Mayne Pharma reasonably requires to
consider such a request for consent, including an independent third party
opinion on valuation that has been approved by the board of HPPI. Without
limitation, a breach of this clause is a breach of a material provision of this
Agreement not capable of remedy.

 

  (b) For so long as this Agreement is in effect, HPPI must notify Mayne Pharma
before it undergoes any change in its direct or indirect beneficial ownership or
control. If, acting reasonably, Mayne Pharma considers that such change will
have a material, negative impact on its rights under this Agreement, it may
terminate this Agreement by giving *** notice to HPPI.

 

20.5 Impact of claims of infringement

 

  (a) If Mayne Pharma becomes subject to, or acting in its discretion, considers
it is at risk of becoming subject to, any litigation, arbitration or similar
proceeding claiming its activities under this Agreement with respect to the
Product infringe the Intellectual Property Rights of any third party (the Third
Party IPR), then Mayne Pharma may, at any time while such proceeding or risk
remains, with immediate effect by notice to HPPI, elect not to supply Product
for commercial sales until:

 

  (i) Mayne Pharma enters into written agreement under which it obtains an
exclusive license to copy and exploit all Intellectual Property Rights in the
applicable Third Party IPR; or

 

 

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  (ii) all rights arising from the applicable Third Party IPR in the Territory
have expired, lapsed or been invalidated by action of Mayne Pharma, HPPI or
otherwise.

 

  (b) During any period that Mayne Pharma has elected not to supply Product for
commercial sale under clause 20.5(a):

 

  (i) Mayne Pharma will supply Product:

 

  (A) for uses reasonably related to the development and submission of
information under a US Federal law which regulates the manufacture, use, or sale
of drugs for clinical trials that have already started at the date of the notice
until those clinical trials have completed;

 

  (B) at the Floor Price in accordance with item 5.2(a) of Schedule 5, in which
case item 5.1 of Schedule 5 no longer applies;

 

  (ii) HPPI may allow any Backup Manufacturer to manufacture the Product for
commercial sale, in accordance with Schedule 6 except that notwithstanding item
3.1 of Schedule 6, the parties will use their reasonable commercial efforts to
Qualify a Backup Manufacturer (both as defined in Schedule 6) within 6 months
after consent is provided by Mayne Pharma under item 2 of Schedule 6;

 

  (iii) recognizing that the exercise by Mayne Pharma of its election under this
clause 20.5 to not provide Product for commercial supply would materially impact
the timing for any planned commercial launch of the Product in the Field, should
Mayne Pharma exercise its rights under this clause 20.5, HPPI and Mayne Pharma
shall, with input from the JDC, promptly take action to amend the Development
Plan to establish (amongst any other matters the parties may agree) a revised
Target Launch Date and resulting date by which the applicable Marketing
Authorisation must be obtained to reflect any delay caused by the exercise by
Mayne Pharma of its election under this clause 20.5. The parties shall use
reasonable commercial efforts to approve such revised Development Plan within 30
days of Mayne Pharma’s election. The parties shall not be bound by or be held in
breach of this Agreement for failure to achieve any Target Launch Date or
similar deadlines to the extent caused by the exercise by Mayne Pharma of its
election under this clause 20.5; and

 

  (iv) in consideration for Mayne Pharma allowing such manufacture by a Backup
Manufacturer, at the end of each Quarter:

 

  (A) HPPI must notify Mayne Pharma of the quantities of any Product
manufactured by the Backup Manufacturer in that Quarter under clause
20.5(b)(ii); and

 

  (B) HPPI must pay to Mayne Pharma:

Mayne Pharma Sales Share Rate x (the Total Net Sales for that Quarter minus the
reasonable cost of goods (per unit) incurred by HPPI to obtain the Product sold
in that Quarter from the Backup Manufacturer),

within *** of the date of Mayne Pharma’s notice under clause 20.5(a).

 

20.6 Accrued rights and remedies

The termination or expiry of this Agreement does not affect any accrued rights
or remedies of either party.

 

 

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20.7 Sell down or repurchase

At the termination or expiry of this Agreement except for termination by Mayne
Pharma under clause 20.1 or 20.2:

 

  (a) Mayne Pharma will fill any Orders provided they are placed *** before the
date of the termination or expiry of this Agreement; and

 

  (b) HPPI may promote, market, sell and distribute any Product for a period of
*** from the termination or expiry of this Agreement (in which case, to avoid
doubt, the provisions of clause 7, 10 and 11 continue to apply), subject to HPPI
meeting its contractual obligations after the termination or expiry of this
Agreement.

 

20.8 Return of Confidential Information

At the termination or expiry of this Agreement for any reason whatsoever:

 

  (a) each party will, as soon as practicable, return to the other party all of
the other party’s Confidential Information (other than Confidential Information
comprising part of the HPPI Licensed Rights), whether in permanent or
magnetic/computer disk form or any other form provided that each party may:

 

  (i) provide one copy of that Confidential Information to its legal advisers,
to be held by them solely for the purpose of determining the scope of that
party’s obligations under this clause; and

 

  (ii) retain one copy of such of that Confidential Information that is required
by the Relevant Regulatory Authority, to be retained by that party.

 

  (b) HPPI must, within *** after the termination or expiry of this Agreement,
deliver to Mayne Pharma, at Mayne Pharma’s option, all advertising, promotional
or sales materials relating to the Product which are still in the power,
possession or control of HPPI, any of its Affiliates or any Sub Licensee.

GENERAL

 

21. Force majeure

 

21.1 Occurrence of Force Majeure Event

If a Force Majeure Event affecting a party precludes that party (Precluded
Party) partially or wholly from complying with its obligations (except its
payment obligations) under this Agreement then:

 

  (a) as soon as reasonably practicable after that Force Majeure Event arises,
the Precluded Party must notify the other party in writing of:

 

  (i) the Force Majeure Event;

 

  (ii) which obligations the Precluded Party is precluded from performing
(Affected Obligations);

 

  (iii) the extent to which the Force Majeure Event precludes the Precluded
Party from performing the Affected Obligations (Precluded Extent); and

 

  (iv) the expected duration of the delay arising directly out of the Force
Majeure Event;

 

  (b) the Precluded Party’s obligation to perform the Affected Obligations will,
to the Precluded Extent, be suspended for the duration of the actual delay
arising directly out of the Force Majeure Event; and

 

 

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  (c) the other party’s obligations to perform any obligations dependent on the
Affected Obligations will be suspended until the Precluded Party resumes
performance.

 

21.2 Termination

If the suspension under clause 21.1(b) continues for more than ***, the other
party may terminate this Agreement with immediate effect by giving notice to the
Precluded Party.

 

22. Notices and other communications

 

22.1 Service of notices

A notice, demand, consent, approval or communication under this Agreement
(Notice) must be:

 

  (a) in writing, in English and signed by a person duly authorised by the
sender; and

 

  (b) hand delivered or sent by reputable international courier, prepaid post or
by facsimile transmission to the recipient’s address for Notices specified in
the Details, as varied by any Notice given by the recipient to the sender.

 

22.2 Effective on receipt

A Notice given in accordance with clause 22.1 takes effect when taken to be
received (or at a later time specified in it), and is taken to be received:

 

  (a) if hand delivered or sent by reputable international courier, on delivery;

 

  (b) if sent by prepaid post, on the second Business Day after the date of
posting (or on the seventh Business Day after the date of posting if posted to
or from a place outside Australia);

 

  (c) if sent by facsimile, when the sender’s facsimile system generates a
message confirming successful transmission of the entire Notice unless, within 8
Business Hours after the transmission, the recipient informs the sender that it
has not received the entire Notice,

but if the delivery, receipt or transmission is not on a Business Day or is
after 5.00pm on a Business Day, the Notice is taken to be received at 9.00am on
the next Business Day.

 

23. Dispute resolution

In the event of any action, question or disagreement arising from or relating to
this Agreement, the parties hereto agree to settle such action, question or
disagreement by arbitration before a single arbitrator in Atlanta, Georgia,
selected by, and such arbitration to be administered by, the American
Arbitration Association (“AAA”) in accordance with its International Arbitration
Rules, and judgment on the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof. Each of the parties hereto agrees and
acknowledges that all actions, questions or disagreements between or among them
arising from or relating to this Agreement are subject to the alternative
dispute resolution procedures of this clause 23. Each of the parties hereto
agrees that any aspect of alternative dispute resolution not specifically
covered in this Agreement shall be covered, without limitation, by the
applicable AAA rules and procedures. Each of the parties hereto further agrees
that any determination by the arbitrator regarding any action, question or
disagreement arising from or relating to this Agreement shall be final and
binding upon the parties hereto and shall not be subject to further appeal.

 

 

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24. GST

 

24.1 Interpretation

 

  (a) Words or expressions used in this clause 24 which are defined in the A New
Tax System (Goods and Services Tax) Act 1999 (Cth) have the same meaning in this
clause.

 

  (b) Clause 25 prevails over this clause 24 to the extent of any inconsistency.

 

24.2 Consideration is GST exclusive

Any consideration to be paid or provided to the Supplier for a supply made by it
under or in connection with this Agreement, unless specifically described in
this Agreement as ‘GST inclusive’, does not include an amount on account of GST.

 

24.3 Gross up of consideration

 

  (a) Despite any other provision in this Agreement, if the Supplier makes a
taxable supply under or in connection with this Agreement (not being a supply
the consideration for which is specifically described in this Agreement as ‘GST
inclusive’):

 

  (i) the consideration payable or to be provided for that supply under this
Agreement but for the application of this clause (‘GST exclusive consideration’)
is increased by, and the Recipient must also pay to the Supplier, an amount
equal to the GST payable on the supply (‘GST Amount’); and

 

  (ii) the GST Amount must be paid to the Supplier by the Recipient without set
off, deduction or requirement for demand, at the same time as the GST exclusive
consideration is payable or to be provided.

 

24.4 The sale of the Product is intended to be a GST-free export of goods

 

  (a) Mayne Pharma and HPPI acknowledge that the supply of the Product under
this Agreement is intended to constitute a GST-free supply of exported goods
under item 1 of section 38-185(1) of the GST Act.

 

  (b) HPPI warrants that in relation to each delivery of the Product, it will it
satisfy the requirements under:

 

  (i) Item 1 of section 38-185(1) and section 38-185(3) the GST Act; and

 

  (ii) The interpretation of those provisions in paragraph (i) as outlined by
the Australian Taxation Office in its Public Goods and Services Tax Ruling ‘GSTR
2002/6, Goods and Services Tax: Exports of goods, items 1 to 4A of the table in
subsection 38-185(1) of the A New Tax System (Goods and Services Tax) Act 1999’.

 

  (c) HPPI must provide written evidence to the Supplier that it has satisfied
the requirements in clause 24.4(b) within *** of the Supplier issuing an invoice
for the relevant Product.

 

  (d) In the event HPPI fails to satisfy the requirements in clause 24.4(b),
clause 24.4(c) or the Australian Taxation Office otherwise determines that the
sale of the Product by Mayne Pharma constitutes a taxable supply, HPPI must
immediately pay to Mayne Pharma the GST Amount payable in relation to the supply
of the Product in accordance with clause 24.3 and any applicable interest, fines
and penalties payable by Mayne Pharma as a result of the supply of the Product
being treated as a GST-free supply.

 

24.5 Reimbursements (net down)

If a payment to a party under this Agreement is a reimbursement or
indemnification or otherwise calculated by reference to a loss, cost or expense
incurred by that party, then the payment will be reduced by the amount of any
input tax credit to which that party, or the representative member of the GST
group that party is a member of (as the case may be), is entitled in respect of
that loss, cost or expense.

 

 

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24.6 Tax invoices

The Supplier will give the Recipient a tax invoice in respect of a taxable
supply made under or in connection with this Agreement.

 

24.7 Adjustments

If and to the event an adjustment event arises in respect of a supply made under
or in connection with this Agreement, then:

 

  (a) if the Supplier’s corrected GST Amount is less than the previously
attributed GST Amount, the Supplier shall refund the difference to the
Recipient;

 

  (b) if the Supplier’s corrected GST Amount is greater than the previously
attributed GST Amount, the Recipient shall pay the difference to the Supplier;

 

  (c) the Supplier must issue an adjustment note to the Recipient within *** of
the adjustment event occurring or otherwise as soon as it becomes aware of the
adjustment event; and

 

  (d) any payment under clauses 24.7(a) or 24.7(b) must be paid to the Supplier
or Recipient (as the case may be) within *** of the adjustment note being issued
by the Supplier.

 

24.8 Similar goods and services taxes or value added taxes

Clauses 24.2, 24.3 and 24.5 to 24.7 apply with the necessary changes in respect
of any similar goods and services taxes or value added taxes levied in
jurisdictions outside Australia.

 

25. Tax

 

25.1 Payments free of taxes; obligations to withhold; payments on account of
taxes

 

  (a) Any and all payments to be made to Mayne Pharma under this Agreement must
be, to the extent permitted by law, be made free and clear or and without
reduction or withholding for any Tax. HPPI acknowledges and agrees that any
amount (in cash, securities or property in kind) received by Mayne Pharma or its
nominee from HPPI as consideration arising under or related to this Agreement,
is deemed to be a payment made to Mayne Pharma under this Agreement.

 

  (b) Whenever HPPI is required by law to make a deduction or withholding in
respect of Tax from any payment to be made to Mayne Pharma under this Agreement,
then HPPI will:

 

  (i) make that deduction or withholding from the payment;

 

  (ii) promptly pay an amount equal to the amount deducted or withheld as
required by law and by the date that Tax is due to be paid to the appropriate
governmental or regulatory agency having jurisdiction over HPPI;

 

  (iii) if requested by Mayne Pharma, within *** of that request, deliver to
Mayne Pharma official relevant receipts issued by such Tax authority, if any,
received by HPPI or other documentation of HPPI evidencing payment of that
amount; and

 

  (c) pay Mayne Pharma such additional amounts as necessary to ensure Mayne
Pharma receives when due a net amount (after deduction or withholding of any
Taxes in respect of such additional amounts) equal to the full amount which
Mayne Pharma would have received if no deduction or withholding had been made.

 

25.2 Refunds

Mayne Pharma has no obligation to file or otherwise pursue any refund of Taxes
withheld or deducted from funds paid to Mayne Pharma.

 

 

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26. Miscellaneous

 

26.1 Survival of Obligations

Any indemnity or any obligation of confidence under this Agreement is
independent and survives termination of this Agreement. Any other term by its
nature intended to survive termination of this Agreement survives termination of
this Agreement, to avoid doubt, including clause 3.2(b)(i), 7.1, 7.4, 7.5,
12.2(d), 16, 17, 18.1, 18.7, 19.3 to 19.5, 20.6 to 20.8, 23, 24, 25, 26.1, 26.11
and 26.14 and Schedule 7.

 

26.2 Approvals and consents

Except where this Agreement expressly provides otherwise, a party may, in its
discretion, give conditionally or unconditionally or withhold any approval or
consent under this Agreement.

 

26.3 Announcements

Without limiting clause 17, a public announcement by HPPI in connection with
this Agreement or any transaction contemplated by it must be approved in writing
by Mayne Pharma before it is made, except if required by law or a regulatory
body (including any relevant stock exchange), in which case HPPI must, to the
extent practicable, first consult with and take into account the reasonable
requirements of Mayne Pharma.

 

26.4 Subcontracting

Each party may appoint contractors to perform its obligations under this
Agreement, except that HPPI must obtain the prior written consent of Mayne
Pharma before appointing a contractor to perform a material part of the HPPI’s
obligations under this Agreement. The appointment of any contractor by a party
does not relieve that party of any of its obligations under this Agreement.

 

26.5 Assignment

 

  (a) HPPI may assign any of its rights or obligations under this Agreement only
with the prior written consent of Mayne Pharma.

 

  (b) Mayne Pharma may assign any of its rights or obligations under this
Agreement to:

 

  (i) an Affiliate or any entity to whom Mayne Pharma has disposed the whole or
a substantial part of its assets, operations or business; or

 

  (ii) otherwise with the prior written consent of HPPI.

 

26.6 Costs

Each party must pay its costs and expenses of negotiating, preparing and
executing this Agreement.

 

26.7 Relationship

The relationship of principal and agent does not exist between the parties. Each
party is an independent contractor and not an agent of HPPI. Neither party has
any authority to act, execute any documents or warrant or represent on behalf of
or otherwise bind the other party.

 

26.8 No modification

This Agreement cannot be modified except in writing and signed by each party.

 

26.9 Non waiver

A party’s failure to exercise any right conferred on it under this Agreement
will not be deemed to be a waiver of that right, unless it is in writing signed
by that party. A party’s waiver of any right under this Agreement at any given
time is not deemed to be a waiver for any other time.

 

 

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26.10 Entire agreement

This Agreement, including its schedules, the Equity Holders Agreement, the 2014
Transaction Documents (as defined in the Equity Holders Agreement) and the 2015
Transaction Documents (as defined in the Equity Holders Agreement) and the
exhibits, annexes, instruments and the documents contemplated thereby,
constitute the entire agreement between the parties in connection with its
subject matter and supersedes all previous or contemporaneous agreements,
promises or understandings between the parties in connection with its subject
matter.

 

26.11 Further Action

Each party must do, at its own expense, everything reasonably necessary
(including executing documents) to give full effect to this Agreement and any
transaction contemplated by it.

 

26.12 Severability

If any term or provision of this Agreement is held to be invalid or
unenforceable, it is to be read down so as to be valid or enforceable or, if
such reading down is not possible, severed and the remaining terms hereof will
not be affected but will be valid and enforced to the fullest extent permitted
by law.

 

26.13 Counterparts

This Agreement may be executed in counterparts, including electronic
counterparts. All executed counterparts constitute one document. Delivery of an
executed signature page of this Agreement by facsimile transmission or
electronic transmission shall be as effective as delivery of a manually executed
counterpart hereof.

 

26.14 Governing law

This Agreement is governed by the laws of Delaware, USA, without regard to the
conflicts of laws principles thereof.

[Schedules Follow Beginning on Next Page]

 

 

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– Agreement details

 

Start Date

3 September 2013

Initial Term

Starts on the Start Date and continues until the later of:

10 years from the Target Launch Date;

all issued patents of Mayne Pharma or any of its Affiliates referred to in
paragraph (a) of the definition of MP Licensed Rights have lapsed or expired.

Territory

United States of America, including all of its commonwealths, territories and
possessions.

 

 

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– Not used

 

 

 

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– Development Plan

 

To be provided and approved in accordance with clause 4.1(a).

 

 

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– Product and Product Specification

 

Product: SUBA-itraconazole 50mg hard capsules

Hard gelatin capsules, size *** body and cap printed “***” in *** on the cap.
Capsules contain white to off-white powder. The outside of the capsule must be
free from powder and the two capsule halves must lock firmly together.

Comprehensive product specifications will be agreed between the parties during
the conduct of the activities in the Development Plan and will form part of
Marketing Authorisation submission to the Relevant Regulatory Authority.

 

 

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– Economic details

 

Floor Price, Minimum Order Quantity and Minimum Annual Volumes

Floor Price and Minimum Order Quantity

 

Product

   Floor Price per
unit (USD)   Minimum Order
Quantity (MOQ)
(capsules)   Incremental
Order Quantity
(after the MOQ)
(capsules)

SUBA-itraconazole 50mg hard capsule

   ***   ***   ***

Minimum Annual Volumes

***

Forecast Period

***

Delivery terms

EXW (Incoterms 2010), Salisbury, South Australia, Australia.

Minimum shelf life

***

Price

Product Mayne Pharma provides ***

Mayne Pharma will provide Product for the conduct of the activities in the
Development Plan and any other activities relating to the research, development
or registration activities relating to the Product approved by Mayne Pharma, ***
set out in the table below:

 

Relevant part of the Field for which the

Product is used

   Maximum capsules free of charge ***    *** ***    *** ***    ***

In response to a request by HPPI following a recommendation by the JDC, Mayne
Pharma will review and consider changes to the relevant part of the Field for
which the Product is used and/or the maximum number of capsules *** for the
purposes of this item 5.1 of this Schedule 5, and may change either or both,
acting in its discretion by notice to HPPI.

 

 

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Product for which Mayne Pharma is ***

HPPI *** Mayne Pharma for:

any Product required for the conduct of the activities in the Development Plan
and any other activities relating to the research, development or registration
activities relating to the Product:

 

  (i) above the amount specified in item 5.1 of this Schedule 5; or

 

  (ii) ***,

at the Floor Price, and payable by HPPI within *** of the date of Mayne Pharma’s
invoice, to be issued on or after shipment of the Product; and

all other Product, in accordance with this item 5 of this Schedule 5.

Definitions

In this Schedule 5:

Actual ASP means for any ***.

Floor Price means the floor price set out in the table above.

Forecast ASP means the forecasted ***.

***

Price is calculated under item 5.6 of this Schedule 5.

Total Net Sales means ***.

Transfer Price means ***.

Total Units Sold ***.

Forecast ASP

At least *** before the start of each ***, the parties will use reasonable
commercial efforts to agree on the forecasted Total Net Sales on a per Product
basis and the forecasted Total Units Sold for that ***, which will be used to
calculate the Forecast ASP.

Transfer Price

The Transfer Price must be reviewed by the parties, and if necessary, revised at
least *** before the start of each ***. The Transfer Price for the Product at
the time of invoice is ***.

Price

The Price to be paid by HPPI for the Product in the Territory is:

the Transfer Price, payable by HPPI within *** of the date of Mayne Pharma’s
invoice, to be issued on or after shipment of the Product; and

as adjusted by a reconciliation of the Actual ASP in relation to the Forecast
ASP *** as follows:

***

Timely accounting for deductions

HPPI must, and must ensure that its Affiliate and any Sub licensee must,
promptly process any deduction from Total Net Sales and in any event, process
such deductions no later than *** after they are allowed (in the case of
discounts, bonuses, commissions and rebates), applied or the Products are
rejected or returned.

Books of Account

 

  (a) HPPI will maintain books of account and records with respect to sales and
stocks of the Product supplied by Mayne Pharma under this Agreement in the
Territory by HPPI, its Affiliates and Sub Licensee (including stock records)
(Books of Account).

 

 

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  (b) Mayne Pharma will have the right to appoint, on reasonable notice, a
certified accountant who is independent and from a nationally recognised
accounting firm (Accountant) to inspect and examine the Books of Account.

 

  (c) Mayne Pharma will bear the fees of the Accountant unless an error
equivalent to *** or more of the Total Net Sales in any calendar year is
discovered, in which case the fees will be borne by HPPI.

 

  (d) HPPI will maintain the Books of Account in accordance with business
accounting standards in the Territory and at a standard sufficient to facilitate
any Product recall.

 

  (e) HPPI will have the right to appoint on reasonable notice an Accountant to
inspect and examine Mayne Pharma’s manufacturing costs, including Mayne Pharma’s
cost of goods as such is relevant to the calculation of the Floor Price.

Reporting requirements

Within *** from the end of each month of each Quarter, HPPI must use reasonable
commercial efforts to submit to Mayne Pharma an estimated reconciliation report
in reasonable detail.

Currency and exchange rate

Currency

USD

Financial institution for exchange rate

National Bank of Australia Limited

 

 

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– Qualification of Backup Manufacturer

 

Definitions

In this Schedule 6:

***

 

 

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– Licence of HPPI Licensed Rights

 

Licence of HPPI Licensed Rights

Grant of licence

From the Start Date, HPPI grants to Mayne Pharma an exclusive, perpetual,
irrevocable, royalty free licence to copy and exploit outside the Territory any
Intellectual Property Right (including all Developed Intellectual Property Right
subject to clause 18.5 of the Agreement, but excluding rights in respect of
trade and service marks and logos) that satisfies all of the following criteria:

relates to, or has potential application in connection with, the Product,
including any dossier containing technical or clinical information relating to
the Product; and

is owned by HPPI or its Affiliates or Sub Licensees, or licensed by HPPI, its
Affiliates or Sub Licensees (without restriction as to license or sub license)
at any time during the period starting at the Start Date until the earlier of:

 

  (i) ***; or

 

  (ii) the termination or expiry of this Agreement,

(HPPI Licensed Rights) including the HP Patents and also including, in respect
of Intellectual Property Rights not yet in existence at the Start Date but
created before the earlier of the dates referred to in items 1.1(b)(i) and
(ii) of this Schedule 7), by way of a grant of a licence of future Intellectual
Property Rights, which takes effect from the date of creation of those rights.

HPPI to ensure it remains free to licence the HPPI Licensed Rights

HPPI must:

ensure that, in respect of any Intellectual Property Rights comprising the HPPI
Licensed Rights owned by it, its Affiliates or any Sub Licensee; and

use reasonable commercial efforts to ensure that, in respect of any Intellectual
Property Rights comprising the HPPI Licensed Rights licensed by it, its
Affiliates and any Sub Licensee,

HPPI is free to grant to Mayne Pharma an exclusive, perpetual, irrevocable,
royalty free licence to copy and exploit outside the Territory such Intellectual
Property Rights. Promptly on becoming aware of any restriction on such right to
grant such licence, HPPI must notify Mayne Pharma.

Restriction on assignment or sub licence

The licence under item 1.1 of this Schedule 7 may only be assigned or sub
licensed in accordance with this Agreement or otherwise with the prior written
consent of HPPI.

Copies of documents, data and other information embodying the HPPI Licensed
Rights

Promptly in response to a request by Mayne Pharma at any time during the Term or
a reasonable period after the termination or expiry of this Agreement, HPPI must
provide to Mayne Pharma a copy of any documents, data and other information
embodying the HPPI Licensed Rights since the most recent request by Mayne Pharma
under this item 2 of Schedule 7.

Intellectual property protection for HPPI Licensed Rights

HPPI will consult with Mayne Pharma regarding intellectual property protection
for such rights outside the Territory.

 

 

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In particular, HPPI must give at least *** prior notice before it, or any of its
Affiliates:

 

  (i) discloses any Confidential Information comprised in the HPPI Licensed
Rights to any third party unless subject to equivalent restrictions on use and
disclosure as those under clause 18, without any right of further disclosure;
and

 

  (ii) without limitation, discloses any Confidential Information comprised in
the HPPI Licensed Rights to any patent office, including as part of a patent
application.

If HPPI decides not to file, prosecute or maintain patent protection for any
invention comprised in the HPPI Licensed Rights in any country outside the
Territory, it must promptly give notice to Mayne Pharma (with such notice to be
given at least *** before any deadline for decisions relating to such filing,
prosecution or maintenance).

Mayne Pharma may, by notice to HPPI, request that HPPI make a decision in
respect of the filing, prosecution or maintenance of patent protection for any
invention comprised in the HPPI Licensed Rights in any country outside the
Territory, in which case HPPI must respond before any deadline referred to in
item 3(c) of this Schedule 7 but in any event no later than *** after the
request by Mayne Pharma.

If HPPI gives notice to Mayne Pharma under item 3(c) or (d) of this Schedule 7
of its intention not to file, prosecute or maintain patent protection of any
invention comprised in the HPPI Licensed Rights in any country outside the
Territory, Mayne Pharma may decide to take over such filing, prosecution or
maintenance at its cost by giving notice to HPPI before the relevant deadline,
in which case:

 

  (i) HPPI will, or will procure that its Affiliate (as applicable) will,
promptly assign to Mayne Pharma or its nominee all rights in respect of the
invention (including under any patent application or issued patent); and

 

  (ii) from the date of such assignment, HPPI acknowledges that:

 

  (A) such rights no longer form part of the HPPI Licensed Rights;

 

  (B) Mayne Pharma or its nominee may, in its discretion and at its cost, file,
prosecute, maintain, enforce and defend any assigned patent application or
issued patent; and

 

  (C) any information in respect of the invention that is not public knowledge
is deemed to be Confidential Information of Mayne Pharma.

Sub licensing and assignment

Sub licensing

Upon notice to HPPI, Mayne Pharma may grant a sub licence of the HPPI Licensed
Rights to a third party without the prior written consent of HPPI under a
written agreement that includes obligations on that third party that relate to
use and disclosure of Intellectual Property Rights of HPPI and Confidential
Information of HPPI at least equivalent to those imposed on Mayne Pharma under
this Agreement.

Assignment

Despite clause 26.5(b), Mayne Pharma may assign any of its rights or obligations
under this Schedule 7 without the prior written consent of HPPI.

[Signature page follows]

 

 

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Signed as an AGREEMENT by authorised officers of each party.

 

Signed for Mayne Pharma Ventures Pty Ltd by an authorised officer in the
presence of    

/s/ Scott Richards

    Signature of officer

/s/ Kate Rintoul

   

Scott Richards

Signature of witness     Name of officer (print)

Kate Rintoul

   

CEO and Director

Name of witness (print)     Office held    

May 15, 2015

    Date Signed for HedgePath Pharmaceuticals, Inc by an authorised officer in
the presence of    

/s/ Nicholas J. Virca

    Signature of officer

/s/ Catherine A Boyle-Virca

   

Nicholas J. Virca

Signature of witness     Name of officer (print)

Catherine A Boyle-Virca

   

President and CEO

Name of witness (print)     Office held    

May 15, 2015

    Date

 

 

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