Exhibit 10.1

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

 

 

COMMERCIAL SUPPLY AGREEMENT

 

CYNAPSUS THERAPEUTICS INC.

 

- and -

 

ARx, LLC

 

Dated as of August 9, 2016

 

 

 

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

THIS COMMERCIAL SUPPLY AGREEMENT (the “Agreement”) is made as of August 9, 2016
by and between CYNAPSUS THERAPEUTICS INC., a corporation incorporated under the
laws of Canada (hereinafter referred to as “Cynapsus”), and ARx, LLC, a
corporation incorporated under the laws of Pennsylvania (hereinafter referred to
as “ARx”).

 

RECITALS:

 

1.ARx is a custom developer and cGMP manufacturer of high-quality drug and
biopharmaceutical delivery materials and technologies (oral thin films, buccal
and mucosal thin films & transdermal patches) for the pharmaceutical industry;

 

2.Cynapsus is completing clinical trials for the Product (as defined below) and
expects to be filing a New Drug Application (“NDA”) with the United States Food
and Drug Administration (“FDA”) before the end of 2016 or in early 2017;

 

3.Cynapsus and ARx have entered into an agreement dated March 17, 2015 pursuant
to which ARx agreed to provide Cynapsus with formulation, CMC and clinical unit
production of the Product and certain related services to support the clinical
studies and registration of the Product (“Framework Agreement”). In the event of
any conflict between the terms of this Agreement and the terms of the Framework
Agreement, the provision of this Agreement shall prevail;

 

4.In addition, the Framework Agreement indicated that the Parties anticipated
entering into a Commercial Supply Agreement (“CSA”) with respect to the United
States of America (“Territory”), prior to filing the NDA with the FDA; and

 

5.Parties have determined that it is timely to define the terms and conditions
and to conclude this Agreement at this time.

 

NOW THEREFORE in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Parties hereto agree as follows:

 

1.DEFINITIONS

 

1.1          In addition to terms defined elsewhere in this Agreement, the terms
set forth below shall be defined in this Agreement (including the recitals) as
follows:

 

1.1.1“Affiliate” with respect to any Party means any Person who directly or
indirectly through one or more intermediaries controls, is controlled by, or is
under common control with the Party. The term “control” means the beneficial
(direct or indirect) ownership of more than fifty percent (50%) of the voting or
equity interests of such Person or the power or right to direct the management
and affairs of its business, whether through the ownership of voting securities,
by contract or otherwise.

 

1 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

1.1.2“API” means Apomorphine Hydrochloride USP that when used in the manufacture
of the Product becomes an active ingredient thereof.

 

1.1.3“ARx Packaging” means the packaging activities related to preparing slit
rolls from the master rolls and packaging them in foil bags and shipping them to
The Tapemark Company, or any other provider as specified by Cynapsus.

 

1.1.4“Cynapsus Development” means all activities relating to the development of
the Product that Cynapsus determines are needed to lead to an acceptable Product
formulation, Specifications, manufacturing process and stability profile, as
necessary or desirable for the ongoing manufacture of the Product for
distribution and sale in the Territory.

 

1.1.5“Clinical Development” means all activities relating to human clinical
trials of the Product as required to support the Regulatory Filing and to obtain
the Marketing Authorization in the Territory.

 

1.1.6“Development” and “Development Activities” means the Cynapsus Development.

 

1.1.7“DMF” means the drug master file governing the development and manufacture
of the API.

 

1.1.8“Dossier” means the documentation containing all necessary information
regarding the Product Development, Clinical Development, and all processes,
techniques, studies and data in connection with the Product, to be prepared by
Cynapsus for the purpose of registering the Product with the Regulatory
Authorities to permit the marketing and sale of the Product in the Territory,
and which consists of at least a complete registration file in Common Technical
Document (CTD) format established in accordance with the Laws and standards of
the Territory.

 

1.1.9“Finishing Ingredients” means all excipients used in the formulation and
manufacture of the Product, added to the API to manufacture the final Product.

 

1.1.10“GCP” means current good clinical practices, in the Territory, as
established by the Regulatory Authorities in the Territory.

 

1.1.11“Generic” means any sublingual oral films or bulk rolls containing
apomorphine salt(s) and is AB rated or substitutable for the Product.

 

2 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

1.1.12“GLP” means current good laboratory procedures, in the Territory, as
established by the Regulatory Authorities in the Territory.

 

1.1.13“GMP” means current good manufacturing practices for the manufacture of
finished pharmaceutical products, which set minimum standards to ensure that
pharmaceutical products meet established requirements for identity, strength,
quality, and purity, as established by the Regulatory Authorities in the
Territory.

 

1.1.14“Improvements” means any variations, modifications, improvements or
enhancements relating to the Products or the Technical information, whether
patentable or not, conceived or first reduced to practice by a Party.

 

1.1.15“Launch Date” means the date the Product is available for commercial sale
in the Territory.

 

1.1.16“Law” means any federal, state, provincial and local laws, statutes,
regulations, rules, guidelines, orders, and any other requirements of any
government or Regulatory Authority applicable to the development, registration,
manufacturing, testing, packaging, storing, shipping, supply, marketing,
distribution, and sale of pharmaceutical products or as otherwise applicable to
the Parties respective obligations under this Agreement.

 

1.1.17“Losses” means any damages, suits, claims, actions, demands, liabilities,
obligations, costs, expenses or losses, including, without limitation,
reasonable legal fees and expenses, court costs, arbitration fees, penalties,
fines, and amounts paid in settlement of claims.

 

1.1.18“Marketing Authorization” means an approval or authorization from the
appropriate Regulatory Authorities in the Territory as required to permit
Cynapsus to promote, market, distribute and sell the Product in the Territory.

 

1.1.19“Net Sales Price” means the per unit actual net revenues earned by
Cynapsus on the sale of the Product, being the gross price invoiced for the sale
of the Product by Cynapsus and its Affiliates to arm’s length third party
customers, excluding any applicable sales, excise and value-added taxes, tariffs
and duties, and any other taxes directly related to the sale of the Product (but
not including taxes assessed against the income derived from such sale), and
less deductions actually incurred, allowed or specifically allocated to the
Product including, but not limited to:

 

(a)trade, quantity and cash discounts;

 

(b)service allowances (including, without limitation, wholesalers’ fees for
services) and independent brokers or agents’ commissions, if any, taken, allowed
or paid;

 

3 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

(c)credits, payment terms, and allowances for the Product, if any, given or
accrued on account of price and shelf adjustments, returns, off-invoice
promotional discounts, rebates, charge-backs, any and all federal, state,
provincial or local government rebates or discounts whether in existence now or
enacted at any time hereafter, volume reimbursements, and the gross amount
billed for any Product that is returned, rejected, recalled, seized or
destroyed;

 

(d)any surcharge, levy, tax or assessment mandated by any federal, state,
provincial, or local government or administrative agency to fund a compensation
program or reserve for persons injured by the Product; and

 

(e)all charges paid by Cynapsus for freight, handling, testing, storage,
insurance and duties in connection with the purchase of the Product from ARx.

 

1.1.20“Packaging” means all material used to prepare fully packaged Product,
including, without limitation labelling, containers, foil, inserts, cartons, and
shipping cases, as applicable.

 

1.1.21“Parties” means the parties to this Agreement referred to collectively,
and “Party” means any party to this Agreement referred to individually.

 

1.1.22“Person” includes any individual, partnership, corporation, unincorporated
organization, association, joint venture, limited liability company, trust or
any other form of entity.

 

1.1.23“Product” means the bulk roll bi-layer sublingual soluble film containing
one apomorphine layer and one pyridoxine layer for treatment of OFF episodes in
Parkinson’s patients as set forth in the Specifications.

 

1.1.24“Quality Agreement” means a Quality Assurance/Quality Control Agreement
between the Parties which sets forth certain obligations of the Parties in
relation to the manufacture, quality control and testing of the Product in
accordance with GMP. The Parties shall attach the Quality Agreement to this
Agreement as Schedule A.

 

1.1.25“Regulatory Authorities” means the applicable governmental regulatory
health authorities in the Territory or other specified jurisdiction responsible
for regulating the manufacture, distribution and sale of pharmaceutical products
in the Territory or other specified jurisdiction.

 

1.1.26“Regulatory Filing” means all materials relating to the filing for and
procurement of the Marketing Authorization for the Product in the Territory.

 

4 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

1.1.27“Specifications” means the specifications for the manufacture of the
Product set forth in Schedule B, which specifications shall conform to the
Marketing Authorization.

 

1.1.28“Supply Price” means the cost [*****] for ARx to supply the Product to
Cynapsus as set forth on Schedule C.

 

1.1.29“Technical Information” means all confidential and/or proprietary
manufacturing processes, scientific, technical, engineering and operational
information, know-how, trade secrets, Product designs, diagrams and schematics,
formulations, protocols, analytical methods, standards and Product
specifications of either Party, in any tangible or intangible form, relating to
the Development, manufacture or commercialization of the Product, including,
without limitation, the applicable process validation protocol, tooling details,
analytical technology transfer protocol, API specifications, Finishing
Ingredients specifications, finished Product specifications, Packaging
specifications, and any such information needed for the purposes of preparing
the Dossier and obtaining and maintaining the Marketing Authorization.

 

1.1.30“Territory” means the United States of America.

 

2.DOSSIER, REGULATORY FILING & MARKETING AUTHORIZATION

 

2.1Information and Preparation of Dossiers. ARx shall promptly provide to
Cynapsus any and all documentation, records, reports, data and other information
relating to the ARx Development as necessary to allow Cynapsus to prepare the
Dossier and file the Regulatory Filing. ARx shall also provide to Cynapsus such
additional information relating to ARx’s manufacturing obligations pursuant to
this Agreement as may be required to prepare and file any amendments or
supplements to the Dossier and Regulatory Filing and any report or response
required by the Regulatory Authorities from time to time. Compensation for any
such work shall be specified in an applicable mutually agreed upon Work Plan.
Cynapsus shall prepare the Dossier and file the Regulatory Filing at its own
expense. If at any time ARx becomes aware of any information that could
reasonably be expected to delay the approval of the Regulatory Filing by the
Regulatory Authorities, then ARx shall immediately notify Cynapsus in writing.

 

2.2Filing for Marketing Authorization.

 

2.2.1Regulatory Filing. Cynapsus shall be responsible for the preparation and be
the filing Party of record for the Regulatory Filing and the Marketing
Authorization. Cynapsus shall use its reasonable commercial efforts to file the
Regulatory Filing within the Territory as soon as possible. Cynapsus shall
control and direct the Regulatory Filing process and shall determine the course
of action and timing as necessary to obtain the Marketing Authorization.
Cynapsus shall consult with and update ARx regularly regarding the status of the
Regulatory Filing and shall notify ARx immediately if the Regulatory Authorities
in the Territory approve or disapprove the Product. Cynapsus shall be
responsible for all fees and expenses relating to the Regulatory Filing.

 

5 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

2.2.2Designation of Manufacturer. The Regulatory Filing for the Product shall
state that ARx is a manufacturer and supplier of the Product. Provided that ARx
has not breached the terms of this Agreement, Cynapsus shall not change ARx’s
manufacturing facilities as a site listed in the Marketing Authorization for the
manufacture and supply of the Product. Notwithstanding the foregoing, Cynapsus
may also register an additional third party manufacturing facility in the
Regulatory Filing for the Product to allow Cynapsus to obtain Product from such
third party manufacturer.

 

2.2.3Communications. Cynapsus shall be solely responsible for all communications
with the Regulatory Authorities relating to the Product Dossier, whether
occurring prior to or after the granting of the Marketing Authorization.

 

2.3Deficiency. Should the Regulatory Authorities require additional information
or documentation in relation to the Product in order to obtain the Marketing
Authorization in the Territory or if the Regulatory Filing is rejected due to
the failure of the Dossier to satisfy the requirements of the Regulatory
Authorities, then ARx and/or Cynapsus, in accordance with their respective
obligations under this Agreement, shall take all reasonable corrective actions
and make such additions and revisions to the information submitted in the
Regulatory Filing as may be necessary to obtain the Marketing Authorization in
the Territory. The Parties acknowledge that the Regulatory Authorities may
require an expedited response to its inquiries and in such case shall work
together to ensure that responses are filed within the requisite deadlines. If,
despite the foregoing, the Regulatory Filing is rejected by the Regulatory
Authorities and all rights to appeal have been exhausted or expired, or if the
Regulatory Filing is voluntarily withdrawn with the mutual agreement of the
Parties, then Cynapsus shall be entitled to terminate this Agreement upon
delivering written notice to ARx. Termination shall be without further
obligation or liability on the part of either Party other than as provided in
Articles 13 and 15 of this Agreement.

 

2.4Maintenance. Once the Marketing Authorization in the name of Cynapsus is
obtained, it will be Cynapsus’s responsibility, at its own expense, to maintain
and update all regulatory elements of its Marketing Authorization as may be
required, provided that during the term of this Agreement ARx shall provide all
necessary manufacturing data and updates to the Technical Information relating
to ARx’s manufacture of the Product as may be required by the Regulatory
Authorities in the Territory.

 

2.5Drug Master File. Cynapsus shall ensure that the applicable API manufacturer
for the Product files with the Regulatory Authorities a DMF governing the
development and manufacture of the API for the Product.

 

6 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

2.6Lack of Timely Availability. If Cynapsus determines, in its reasonable
discretion, that due to reasons that are reasonably within the control of ARx
which do not include raw material availability from a supplier, API availability
and Force Majeure events, the implementation of the Technical Information in
relation to a Product will not be completed by ARx in a sufficiently timely
fashion as to allow Cynapsus to commence the commercial sale of the Product in
accordance with Cynapsus’s scheduling requirements, then Cynapsus will advise
ARx in writing and will allow ARx [*****] to rectify the same to the reasonable
satisfaction of Cynapsus. If Cynapsus is not satisfied, then Cynapsus may, upon
delivering written notice to ARx, thereafter be entitled to manufacture the
Product on its own behalf or obtain the Product from a third party manufacturer
until the timeliness is rectified to the reasonable satisfaction of Cynapsus.

 

3.EXCLUSIVITY

 

3.1Exclusive Purchaser. For as long as the Agreement remains in force, ARx will
not manufacture any Generic products or formulations.

 

3.2Exclusive Manufacturer. For as long as the Agreement remains in force, ARx
shall be the majority supplier of Product in the Territory, unless otherwise
agreed to by the Parties in writing. For the purpose of this Agreement, Majority
Supply shall be defined as providing not less than [*****] percent ([*****]%) of
commercial supply of the Product in the Territory (“Majority Supply”).]

 

3.3Contingency Supplier. As required by good commercial and supply practice,
Cynapsus shall qualify a secondary supplier of the Product for contingency
purposes (“Contingency Supplier”) in the Territory that shall be acceptable to
ARx, acting reasonably. To enable the Contingency Supplier to successfully
produce the Product, Cynapsus may request ARx’s technical transfer assistance
for a mutually agreed upon cost.

 

3.4ARx Option. ARx shall have an option to provide to Cynapsus services in the
Territory with respect to [*****] in connection with the Product (“Additional
Services”), provided that (a) ARx has the regulatory authority and commercial
capability to provide such Additional Services, in the opinion of Cynapsus,
acting reasonably, and (b) the Additional Services that are offered to Cynapsus
on financial terms and conditions no less favorable than any other third party
from which Cynapsus shall have solicited competing bids. In the event that ARx
shall satisfy the conditions set out in the preceding sentence, the Parties
shall negotiate in good faith such agreement(s) on commercially reasonable terms
with respect to the Additional Services similar to those terms set forth in this
Agreement, to the extent relevant.

 

3.5Right to Bid. In the event that ARx shall obtain required regulatory
approvals to manufacture the Product in one or more markets outside of the
Territory and Cynapsus shall have decided to enter one or more such markets
outside of the Territory, ARx shall be invited by Cynapsus to bid for the right
to supply the Product in such market(s). Notwithstanding the above, Cynapsus
shall retain the sole discretion to select one or more suppliers of the Product
in markets outside of the Territory.

 

7 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

3.6Technology Fee. Cynapsus, its successors and assigns, shall pay to ARx
[*****]% of the invoiced cost incurred by Cynapsus with respect to the
manufacture of the Product, not including the costs of the related API and
Finished Packaging, in the Territory by a Contingency Supplier, or any other
party outside of the Territory.

 

4.MANUFACTURE OF PRODUCT

 

4.1Product. ARx will manufacture the Product for supply to Cynapsus in
accordance with the terms of this Agreement.

 

4.2License of Cynapsus Technical Information. Cynapsus shall provide to ARx such
Cynapsus Technical Information, as is available to Cynapsus, as necessary for
ARx to manufacture the Product pursuant to this Agreement. Cynapsus hereby
grants to ARx, subject to the terms and conditions hereof and Cynapsus’ right to
license to the Contingency Supplier, solely in connection with the manufacture
of the Product, an exclusive (except as to Cynapsus), royalty free, right and
license to use Cynapsus’s Technical Information to manufacture the Product for
sale to Cynapsus and to manufacture other products and formulations which are
not Generic. ARx shall not, without Cynapsus’ written consent, sell, assign,
license or transfer any Cynapsus Technical Information or any rights in relation
thereto to any third party; provided that it does not limit ARx’s right and
license to use Cynapsus’s Technical Information to manufacture the Product for
sale to Cynapsus and to manufacture other productions and formulations which are
not Generic.

 

4.3Manufacturing Obligation. ARx shall manufacture the Product using the
Technical Information and in accordance with the applicable Marketing
Authorization, Product Specifications, this Agreement, the Quality Agreement,
and other requirements herein. Subject to the terms and conditions of this
Agreement, ARx shall supply Cynapsus with the quantities of the Product ordered
by Cynapsus hereunder for commercial sale and promotional activities.

 

4.4API & Finishing Ingredients.

 

4.4.1Supply of API. During the term of this Agreement, Cynapsus shall supply to
ARx all API necessary to manufacture the Product. All API supplied to ARx under
this Agreement shall be used by ARx exclusively for the manufacture of the
applicable Product for Cynapsus.

 

4.4.2Notification of API Requirements. Three (3) months prior to commencement of
each Product manufacturing run, Cynapsus shall arrange to have ARx provided with
sufficient quantities of API to enable ARx to manufacture the quantities of
Product ordered by Cynapsus. Promptly upon receiving Cynapsus’s Product
Forecasts (in accordance with Article 5.1 hereof), ARx shall give Cynapsus
notice of the expected timing of its ship dates and corresponding API
requirements as necessary to fulfill such Forecasts.

 

8 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

4.4.3API & Product Information. The API supplier shall provide Cynapsus and ARx
with a certificate of analysis for each lot of API and one (1) Safety Data Sheet
for the API. Cynapsus shall provide ARx with one (1) Safety Data Sheet for each
Product.

 

4.4.4Inspection. ARx shall inspect the outer packaging of all API shipments
within five (5) business days of receipt and shall immediately inform Cynapsus
of any defects in or damage to the API discoverable upon visual inspection made
with reasonable care. Cynapsus shall use its reasonable efforts to have all
damaged or defective API shipments replaced or corrected, and ARx shall provide
assistance in the investigation of any damaged shipment. ARx shall not be
responsible for any delays caused by damage to API not caused by ARx.

 

4.4.5API Testing. Initially a contract laboratory selected by Cynapsus shall
test and analyze the API to verify that the API satisfies the applicable
Specifications and the requirements of the Marketing Authorization. Eventually
as specified in section 3.4 ARx may be qualified as a testing lab to test and
release the API.

 

4.4.6Wastage. ARx shall store and handle all API so as to minimize wastage,
shrinkage or deterioration, provided that ARx will be entitled to a mutually
agreeable allowance for inventory loss and yield loss. Such allowance will be
based on manufacturing process capability and will be determined by the Parties
after the production of three full scale batches of the applicable Product and
will apply to all API supplied by Cynapsus, inclusive of API consumed during
Product sampling and testing. In determining ARx’s compliance with the yield
allowance, ARx shall be credited with all Product manufactured by ARx which is
in saleable condition, excluding amounts used for samples and analytical
testing. In the event of any loss or waste of API in excess of the applicable
yield allowance by ARx, calculated on a yearly basis, or if there is any loss of
API in relation to any batch of Product that does not comply with the provisions
of this Agreement, calculated on a yearly basis, ARx shall credit Cynapsus with
[*****]% of the cost of the API so lost, and Cynapsus shall be entitled to set
off such credited amounts against amounts due to ARx hereunder.

 

4.4.7Title. Title to all API supplied to ARx by Cynapsus or a third party shall
at all times remain with Cynapsus. ARx shall clearly mark such API as the
property of Cynapsus and use reasonable and customary efforts to avoid any
confusion with any other raw materials. ARx shall not at any time sell or offer
for sale, assign, mortgage, pledge or allow any lien to be created upon the API
provided by Cynapsus, excluding any liens given by Cynapsus.

 

9 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

4.4.8Return of API Upon Termination. Upon the termination of this Agreement, ARx
shall deliver to Cynapsus all unused API in ARx’s possession, Exworks ARx’s
place of business, Incoterms 2010.

 

4.4.9Finishing Ingredients. ARx shall obtain, test, and release all Finishing
Ingredients applicable to the manufacture and supply of the Product in
accordance with the Specifications and the Marketing Authorization.

 

4.5Restrictions on Changes to Product. The Parties acknowledge that once the
Regulatory Filing has been submitted to the Regulatory Authorities, any change
whatsoever to the API, Finishing Ingredients, ARx Packaging or Product, or any
related process, method or procedure may jeopardize the regulatory status of the
Product. ARx shall not make any changes whatsoever to the API, Finishing
Ingredients, ARx Packaging or Product, or any related process, method or
procedure used in connection with manufacturing, supplying, storing or testing
the Product, without first discussing and obtaining prior written approval from
Cynapsus for such change in accordance with ARx’s change control procedure,
which approval is not to be unreasonably withheld, including, without
limitation, changes to the production facility, methods of manufacture or other
processes, or any other changes. Cynapsus shall approve all proposed changes if
necessary for the purpose of complying with GMPs or Laws in the Territory. The
Parties shall negotiate in good faith all fees and charges payable to the
Regulatory Authorities which may be required in connection with any change as
aforesaid, unless such change is required by Cynapsus or the Regulatory
Authorities. ARx shall continue to supply Cynapsus with Product which satisfies
the Marketing Authorization until such time as any new Product formulation or
change is approved by the Regulatory Authorities, if such approval is necessary.

 

4.6ARx Packaging. ARx will supply slit rolls of the Product in foil bags to
Cynapsus.

 

4.7Stability. Cynapsus shall, at its own expense, conduct all stability studies
required to obtain the Marketing Authorization and required for ongoing
commercial sale of the Product.

 

4.8Manufacturing Facility.

 

4.8.1Location of Manufacturing Facility. ARx shall manufacture the Product at
its manufacturing facilities in Glen Rock, Pennsylvania. ARx shall not change
the location of the manufacturing facilities for the Product without the prior
written consent of Cynapsus, which consent shall not be unreasonably withheld.
Any such consents or approval regarding any change in the manufacturing
facilities shall be documented in the Quality Agreement.

 

4.8.2Qualification of Facility. ARx shall at all times maintain the
manufacturing facilities for the Product in compliance with standards
promulgated by the Regulatory Authorities for manufacturing facilities in the
Territory and all applicable GMPs and Laws in the Territory. ARx shall
throughout the term of this Agreement, obtain and maintain any and all licenses,
permits, orders, authorizations and consents (including, without limitation,
facility licenses and permits) as required by the Regulatory Authorities in the
Territory, as necessary or required to manufacture, store, ship, supply, and
dispose of the Product for supply to Cynapsus in the Territory, or as otherwise
required to perform ARx’s obligations under this Agreement.

 

10 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

4.9No Contract Manufacturing. Except with the consent of Cynapsus, which consent
may be withheld in Cynapsus’s absolute discretion, only ARx, and not its
Affiliates or any sublicensee or third party, shall manufacture the Product for
supply to Cynapsus. Any such consent shall be documented in the Quality
Agreement.

 

4.10Inspections.

 

4.10.1Cynapsus Inspections. During the term of this Agreement and until one year
after the expiration date for the last Product supplied hereunder, ARx shall
permit Cynapsus’s representatives to enter ARx’s facilities and the facilities
of any contract provider of ARx, which access ARx shall use commercially
reasonable efforts to negotiate on behalf of Cynapsus, all upon reasonable prior
notice and during normal business hours, for the purpose of inspecting the
facilities of ARx or the contract provider, as the case may be, and quality
control procedures and confirming compliance with all applicable GMPs and Laws
in the Territory, the requirements of the Regulatory Authorities in the
Territory, the Quality Agreement and this Agreement. If during any such
inspection Cynapsus discovers any instances in which ARx/contact provider has
not complied with the foregoing, then ARx shall provide to Cynapsus a written
plan for correcting such deficiencies within 30 days from receipt of an audit
report from Cynapsus and include a proposed timetable for implementing such
corrections, and shall ensure that such deficiencies are corrected as soon as
reasonably practicable.

 

4.10.2Initial Inspections. Without limitation to the foregoing, Cynapsus shall
upon the execution of this Agreement be permitted to conduct a Quality Assurance
and technical inspection of ARx’s facilities no later than 180 days after
signing this agreement. If Cynapsus is not reasonably satisfied with the results
of this inspection, Cynapsus will deliver its audit report with observations to
ARx within 30 days. ARx shall be permitted 30 days to respond.

 

4.10.3Routine ARx Inspections. ARx shall routinely inspect its manufacturing
facilities to confirm compliance with GMPs and Laws in the Territory, the
requirements of Regulatory Authorities in the Territory, the Quality Agreement
and this Agreement.

 

11 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

4.10.4Inspection by Governmental Authorities. If ARx receives any notification
of any inspection of its manufacturing facilities where the Product is
manufactured, tested, or stored by any Regulatory Authority in the Territory or
the Territory, or any warning letter or similar correspondence from any such
Regulatory Authority relating to the Product, then ARx shall:

 

(a)Immediately provide Cynapsus with notice of the inspection and all notices,
correspondence and documents related to Product received by ARx from the
applicable Regulatory Authorities;

 

(b)Permit the applicable Regulatory Authorities to enter ARx’s facilities for
the purpose of regulatory inspection;

 

(c)Immediately furnish Cynapsus with copies of all reports related to Product
received by ARx as a result of any such inspection;

 

(d)Provide to Cynapsus a written plan for correcting any such Product related
deficiencies documented by the Regulatory Authorities, including a proposed
timetable for implementing such corrections; and

 

(e)Ensure that any deficiencies are corrected, as soon as reasonably
practicable.

 

4.11Safety. ARx shall maintain and enforce safety procedures for the handling
and manufacture of the Product that comply in all respects with the Marketing
Authorization and all applicable Laws in the Territory.

 

4.12Additional Quality Assurance/Control Obligations. The Parties will enter
into a separate Quality Agreement, a copy of which shall be attached hereto as
Schedule A. All Product manufactured by ARx for supply to Cynapsus shall be
manufactured in accordance with ARx’s obligations under both this Agreement and
the Quality Agreement. In the event of any conflict between the terms of this
Agreement and the terms of the Quality Agreement, the provisions of the Quality
Agreement shall apply for matters relating to Quality Assurance and Quality
Control.

 

4.13Storage. To the extent any Product, Packaging, API, or Finishing Ingredients
are stored, ARx shall store such Product, API, or Finishing Ingredients in a
controlled environment that meets the Specifications, this Agreement, the
Quality Agreement, GMPs and all other applicable Laws. API and Finishing
Ingredients utilized by ARx in connection with the development and manufacturing
of Product shall be generally used by ARx on a first in, first out basis and
shall not be used by ARx beyond the shelf life required under applicable Laws or
as designated or approved by Cynapsus. ARx will implement and enforce reasonable
security precautions to prevent unauthorized access to the Product, API, or
Finishing Ingredients while in the control of ARx. ARx shall be liable for any
loss or damage to Product, API or Finishing Materials in ARx’s possession or
control due to ARx’s negligence or wilful misconduct.

 

12 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

5.PRODUCT SUPPLY

 

5.1Rolling Forecasts. Cynapsus will provide by the fifth (5th) day of each month
(or if such date is not a regular business day, the next business day) a rolling
six (6) month good faith forecast of the monthly quantities of the Product
Cynapsus intends to purchase during such period (each, a “Forecast”). Cynapsus
shall provide the first Forecast for the Product one hundred and twenty (120)
days prior to the date anticipated for making the Product available for
commercial sale in the Territory (the “Launch Date”).

 

Within five (5) business days following receipt of such Forecast, ARx in turn
shall acknowledge receipt of said Forecast and determine if there are any
anticipated concerns in being able to manufacture, package and supply any of the
projected demand to Cynapsus for any part of the Forecast. In the event ARx
anticipates such concerns: (i) ARx shall notify Cynapsus in writing as soon as
reasonably practicable (but in no event later than 5 (five) business days)
following receipt of such Forecast; and (ii) ARx and Cynapsus shall discuss any
such concerns and determine the appropriate corrective actions to eliminate or
minimize any potential future service issues.

 

Cynapsus may submit Forecast adjustments to ARx for quantities of Product less
than or in excess of the Forecast amounts. For adjustments in excess of the
current Forecast, ARx agrees to use commercially reasonable efforts to
accommodate such adjustments assuming Materials, API and capacity are available
to support such increases. If ARx expects to be unable to fill the portion of
any adjustment within the anticipated time frame, then ARx shall notify Cynapsus
within five (5) business days after receipt of such adjustment, and Cynapsus and
ARx shall agree upon an alternate schedule to accommodate the adjustment.

 

5.2Batch Size and Minimum Order. ARx will manufacture the Product in the batch
size specified in the Marketing Authorization. Cynapsus shall place orders in
whole multiples of the batch size unless otherwise agreed by ARx. The Parties
hereby acknowledge that the batch size shall be [*****]. ARx shall not modify
the batch size for the Product unless the change is mutually agreed upon by the
Parties and subject to the requirements that: (i) such modification will be
described in validation documentation which will be submitted to Cynapsus; and
(ii) the modification shall not violate the Marketing Authorization. If the
batch size is modified, then Cynapsus may, if necessary, modify its then current
Forecast to accommodate the amended batch size.

 

13 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

5.3Purchase Orders.

 

5.3.1Detail. Cynapsus shall order the Product by issuing a binding purchase
order stating the quantity and type of Product ordered and a delivery date for
the Product (a “Purchase Order”), which date shall be at least ninety (90) days
after the date of the Purchase Order, if consistent with the Forecast, except
for the first order of the Product for which the specified delivery date shall
be at least ninety (90) days after the date of the Purchase Order. If the terms
written on any Purchase Order are inconsistent with the terms of this Agreement,
the terms of this Agreement shall prevail. ARx shall accept all Purchase Orders
that comply with the provisions of this Agreement and shall verify each Purchase
Order in writing within five (5) business days of receipt.In the event ARx will
not be able to fulfill such Purchase Order in accordance with the terms herein,
ARx must notify Cynapsus in writing as soon as reasonably practicable (but in no
event later than five (5) business days) following receipt of such Purchase
Order, whereupon ARx and Cynapsus shall agree upon an alternate ship date and
ARx shall meet the alternate ship date which in such case the alternate ship
date becomes the confirmed ship date.

 

Cynapsus may request to cancel or modify a Purchase Order within five (5) days
of its submission to ARx, but may not otherwise do so without ARx’s prior
written consent. If Cynapsus cancels or modifies any Purchase Order, then
Cynapsus shall reimburse ARx for the cost of any materials purchased by ARx to
produce the cancelled or modified Purchase Order or lost manufacturing time,
unless ARx can reasonably put such materials or manufacturing time to
alternative use. The Parties acknowledge and agree that Cynapsus is not
obligated to buy any specific amount of Product under this Agreement, except for
the Purchase Order, specified batch size in Section 5.2, and Majority Supply
obligations in Section 3.2.

 

5.3.2[Deleted]

 

5.3.3Forecasts and Purchase Orders. The Parties acknowledge that the Forecasts
are meant to be good faith estimates of the quantity of Product that Cynapsus
intends to order from ARx, provided, however, that the Forecasts are non-binding
and in no event shall a Forecast be deemed a Purchase Order.

 

5.3.4Conflicts. Each Purchase Order will specify the quantity of Product, size
mix, packaging configuration, designated carrier and ship date, as applicable.
To the extent of any conflict or inconsistency between this Agreement and any
Purchase Order, invoice, confirmation, acceptance or any similar document, the
terms of this Agreement shall govern in all respects.

 

5.4Price & Payment. For each shipment of Product manufactured by ARx pursuant to
a Purchase Order and delivered to Cynapsus for commercial sale in the Territory,
Cynapsus shall pay to ARx an amount equal to the Supply Price for the actual
Product shipped. ARx shall invoice Cynapsus no sooner than the date of each
Product shipment. Cynapsus shall pay ARx in full for each issued invoice within
forty-five (45) days from the invoice date, provided, however, that payment
shall not constitute approval or disapproval of any Product. All payments made
by Cynapsus to ARx pursuant to this Agreement shall be made by bank transfer or
as ARx may otherwise direct.

 

14 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

5.5Uncompetitive Pricing. [*****]

 

5.6Payment Not Required For Non-Conforming Product. Cynapsus is not obliged to
pay for any Product which it determines is non-conforming (as contemplated by
Article 5.11.1 below). If Cynapsus disagrees with the amount of any invoice
submitted to it, Cynapsus shall promptly notify ARx and the Parties shall
promptly attempt to resolve such disagreement in good faith.

 

5.7Delivery. Delivery of each order of the Product shall be made Ex-Works ARx’s
facilities in Glen Rock, Pennsylvania (Incoterms 2010). Each delivery shall be
accompanied by an advice note specifying the Product being shipped, Cynapsus’s
Purchase Order number, Cynapsus’s product number, the quantity of the Product
delivered, and the shipment’s destination.

 

ARx shall utilize best efforts to deliver to Cynapsus by the delivery date
specified in each Purchase Order between ninety percent (90%) and one hundred
and ten percent (110%) of the quantity of Product ordered in such Purchase
Order. For the avoidance of doubt, ARx shall be entitled to ship Product within
the Specifications.

 

If a Product is delivered more than five (5) business days late, then Cynapsus
may use expedited shipping and ARx shall be responsible for all shipping costs
and expenses incurred by Cynapsus in connection therewith.

 

5.8Delays.

 

5.8.1Notice of Delay in Delivery. ARx shall notify Cynapsus as soon as possible
of any potential delay in the delivery of any Product shipment.

 

5.8.2Remedy for Delay in Delivery. If ARx fails to deliver any shipment of the
Product by the delivery date specified by Cynapsus in a Purchase Order submitted
and confirmed in accordance with the terms of this Agreement, and the delay is
not due to the failure to receive any materials, including those to be procured
by Cynapsus, receive the necessary approvals for release and shipment from
Cynapsus, or a Force Majeure Event, then the following shall apply:

 

(a)if the shipment is late by 30 days or less, then the Supply Price will remain
the same.

 

(b)if the shipment is between thirty one (31) days and sixty (60) days late,
then the Supply Price for the Product payable by Cynapsus shall be [*****];

 

15 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

(c)if the shipment is between sixty one (61) days and ninety (90) days late,
then the Supply Price for the Product payable by Cynapsus shall be [*****]; and

 

(d)if delivery of a Product shipment is more than ninety (90) days late, then
Cynapsus shall be entitled to either [*****].

 

5.9Reports. Upon written request from Cynapsus, ARx shall provide Cynapsus with
a monthly report detailing projected shipment dates for Purchase Orders,
including the quantities of Product expected to be shipped. ARx shall provide
the report by the fifteenth (15th) day of each month, or, if such date is not a
business day, on the next business day.

 

5.10Testing. ARx shall be responsible for all in-process testing of Product
prior to delivery to Cynapsus to ensure that the Product meets the applicable
Specifications, GMP’s, the Quality Agreement, and the other terms of this
Agreement.

 

5.11Non-Conforming Product.

 

5.11.1Definition. A Product shipment is non-conforming if dispostioned as
discard in an investigation because:

 

(a)it does not conform to the Specifications or batch record and is not noted in
a deviation;

 

(b)the batch record does not conform to the applicable GMPs;

 

(c)it does not conform with the requirements of the Quality Agreement; or

 

(d)it has not been manufactured, supplied or tested in accordance with the terms
of this Agreement.

 

5.11.2Notification. If any shipment of Product is non-conforming in relation to
any matter discoverable upon visual inspection made with reasonable care, then
Cynapsus will notify ARx within thirty (30) days of receipt of the Product. If
any shipment of Product is non-conforming in relation to any matter which is not
discoverable upon visual inspection made with reasonable care, then Cynapsus
will notify ARx within thirty (30) days of discovery provided, however, that
Cynapsus must notify ARx of all non-conformities within [*****] of the date of
shipment. ARx shall promptly notify Cynapsus as to whether it confirms or denies
that the Product is non-conforming.

 

16 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

5.11.3Review; Independent Testing Laboratory. If ARx does not agree that the
Product is non- conforming, then the Parties shall submit information regarding
the disputed shipment to each other for review. If the Parties cannot agree as
to whether the Product is non-conforming within four (4) weeks of Cynapsus’s
initial claim of non-conformance, then upon the request of either Party, the
dispute shall be submitted to a mutually acceptable independent laboratory with
a minimum of ten (10) years of senior level experience manufacturing
pharmaceutical products and complying with guidelines and regulations of the
Regulatory Authorities in the Territory. If the independent laboratory
determines the Product is not non-conforming then Cynapsus shall pay for the
Product and any associated investigation. The costs of the independent
laboratory shall be borne by the Party with whom the independent laboratory
disagrees.

 

5.11.4Credit; Offset. If any Product delivered by ARx hereunder is determined to
be non-conforming, then ARx shall replace the non-conforming Product with
substitute Product that conforms with the requirements of this Agreement within
[*****] from the date of such request or as soon as reasonably possible. At
ARx’s expense, Cynapsus shall, in accordance with ARx’s written instructions,
return or destroy all non-conforming Product.

 

5.12Manufacturing Process; Duty to Report. If a manufacturing process event
occurs during the manufacture of any Product batch which is likely to materially
affect the safety, efficacy or regulatory status of the Product, ARx shall
notify Cynapsus as soon as reasonably possible according to ARx’s deviation
procedure (but in any event within two (2) business days of becoming aware of
the process event). Cynapsus and ARx shall consult with each other as to the
disposition of all affected batches of the Product, which disposition shall be
agreed upon by ARx and Cynapsus in the deviation report. ARx agrees to report to
Cynapsus, on an annual basis, any atypical process events, regardless of whether
they are or are not likely to materially affect the safety, efficacy or
regulatory status of the Product in the Annual Product Report. No Product may be
reworked unless agreed upon by ARx and Cynapsus and is in conformity with the
Marketing Authorization (or, to the extent applicable, any other Laws in the
Territory) and the Quality Agreement.

 

5.13Specifications. The Parties acknowledge and agree that Cynapsus may need to
make changes to the Specifications of the Product throughout the Term of the
Agreement. Cynapsus shall make any such changes that it so requires to the
Specifications and such change shall become effective immediately. Such changes
shall be electronically communicated to ARx. If ARx has any objections to the
modified Specifications, ARx must notify Cynapsus in writing within five (5)
calendar days. If ARx objects, then the Parties shall meet as soon as possible
thereafter to discuss ARx’s objections and reach a mutually agreeable solution.
If the parties cannot agree on a solution, the Specifications shall not change.

 

17 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

6.RECORDS

 

6.1Records. ARx shall maintain all records necessary to comply with all
applicable Laws in the Territory relating to the Development, manufacture,
testing, packaging, storage and supply of the Product, and the performance of
its obligations under this Agreement. All such records shall be maintained for
such period as may be required pursuant to the applicable Laws; provided,
however, that all records relating to the manufacture, stability and quality
control of each batch of the Product shall be retained at least until the first
(1st) anniversary of the end of the approved shelf life for all Product from
such batch. Cynapsus shall maintain its records in a similar manner as
appropriate for all its activities and obligations under this Agreement.

 

6.2Samples and Batch Records. ARx shall prepare and maintain batch records and
file samples, properly stored, for each lot or batch of Product manufactured and
shipped hereunder in compliance with the GMPs and Laws in the Territory
pertaining thereto.

 

6.3Inspection of Books and Records. During the term of this Agreement, and
thereafter for the greater of (i) the period stipulated by the Laws in the
Territory, and (ii) two (2) years, ARx agrees that Cynapsus, at reasonable times
upon reasonable prior notice, may inspect the manufacturing books and records of
ARx pertaining solely to its obligations under this Agreement for purposes of
ensuring compliance with the terms of this Agreement. ARx agrees to undertake to
obtain the foregoing right of inspection for Cynapsus with respect to the
relevant books and records of ARx’s contract provider and to report the outcome
of such efforts to Cynapsus. If ARx’s current contract provider is unwilling to
provide the foregoing rights of inspection, ARx shall take steps to identify
another contract provider who will provide such rights of inspection.

 

7.COMPLIANCE WITH LAW & INFORMATION EXCHANGE

 

7.1Adverse Event Reporting. During the term of this Agreement and for one (1)
year thereafter, or as otherwise required pursuant to the Laws of the Territory,
each Party shall (i) provide prompt written notice to the other Party of any
information in its possession or control concerning side effects, injury,
toxicity or sensitivity reaction (“Adverse Events”) associated with uses,
studies, investigations or tests of the Product (animal or human), whether or
not determined to be attributable to the Product, and (ii) notify the other
Party’s responsible drug safety department by telephone and facsimile within
seventy-two (72) hours (regardless of weekday, weekend or holiday) after such
Party first becomes aware of any Adverse Event that gives cause for concern or
is unexpected or that is fatal, life-threatening as it occurred, permanently
disabling, requires or prolongs in-patient hospitalization, represents a
significant hazard, or is a cancer or a congenital anomaly or represents an
overdose, or any other circumstance that might necessitate a recall, expedited
notification of the Regulatory Authorities or a significant change in the
labelling of the Product, including, without limitation, any deviation from the
specified environmental conditions for shipping or storage of the Product.

 

18 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

7.2Customer Complaints. Cynapsus shall maintain customer complaint files.
Cynapsus may promptly (but in any event within five (5) business days) report to
the other any and all complaints related to the Product manufacture to ARx and
request that a manufacturing investigation be complete with appropriate
justification for the complaint to be manufacturing related. Cynapsus shall be
solely responsible for reviewing, responding and interacting with the Regulatory
Authorities in the Territory and the patient, practitioner and the other person
or entity filing the complaint regarding all complaints related to the Product
in the Territory. Each Party will cooperate reasonably with the other Party in
connection with a Party’s investigation of an Adverse Event.

 

7.3Government Communications.

 

7.3.1The Parties shall promptly (but in any event not later than five (5)
business days) provide each other with copies of all material communications
received from any Regulatory Authority or other governmental agency, including,
without limitation, Adverse Event reports and safety reports, regarding the API,
Product or the facilities, procedures or processes used in connection with the
Product. The foregoing notification obligation shall be twenty-four (24) hours
if a governmental agency or Regulatory Authority is commencing or threatening
seizure of Product, API or, with respect to ARx, closure of or suspension of
operations at its manufacturing or laboratory facilities for the Product.
Material communications include any letters, reports or other documents received
by any governmental agency or Regulatory Authority that relates to the Product
or such facilities, processes or procedures.

 

7.3.2Cynapsus shall be entitled to review ARx’s responses to any material
communications related to the Product with the Regulatory Authorities prior to
their submission, if practicable, and Cynapsus’s reasonable views and requests
shall be taken into account prior to submission of such communications to the
relevant agency, subject to Cynapsus’s comments being submitted on a timely
basis. ARx shall also use its best efforts to provide Cynapsus with the notice,
information, documentation, and opportunity to comment provided for above with
respect to any Contract Provider.

 

8.PRODUCT RECALL

 

8.1Notification or Recall. If any Regulatory Authority or other governmental
agency issues or requests a recall or takes similar action in connection with
the Product in the Territory, or if Cynapsus reasonably determines after
consultation with ARx that an event has occurred which may result in the need
for a recall or market withdrawal because the use or consumption thereof has or
poses an actual and imminent danger of resulting in bodily injury or property
damage (a “Recall Event”), the Party notified of or wishing to implement such
recall or similar action shall, within twenty four (24) hours (regardless of
weekday, weekend or holiday), advise the other Party thereof by telephone or
facsimile, after which the Parties shall promptly discuss and work together to
effect an appropriate course of action. Cynapsus shall be responsible for final
determination of any Recall Event and notifying the Regulatory Authorities in
the Territory of such Recall Event.

 

19 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

8.2Recall Expenses. Except as set forth below, Cynapsus shall bear the full
expense of a Recall Event. If a Recall Event results solely from the negligent
acts or omissions or wilful misconduct of ARx, then ARx shall bear the full
expenses of costs incurred for shipping, return, destruction and replacement of
Product (“Replacement Expenses”). If a Recall Event is partially caused by the
actions or omissions of both Parties, then each Party shall be responsible for
its proportionate share of the Replacement Expenses of the Recall Event based on
its proportionate share of causation. The Parties shall discuss and agree on the
scope and costs of a Recall Event, if practicable, prior to enforcement of the
recall.

 

9.INTELLECTUAL PROPERTY RIGHTS

 

9.1Reservation of Rights. No right, title or interest is granted, whether
expressly or by implication, to any technology or intellectual property rights
owned by either Party other than pursuant to the terms of this Agreement. Each
Party hereby reserves all rights not expressly granted under this Agreement.

 

9.2Ownership.

 

9.2.1Clinical Studies. Cynapsus shall own all right, title and interest in and
to all Clinical Development studies and data (including, for greater certainty,
all bioequivalence studies and data) prepared by or on behalf of Cynapsus in
connection with the Product. As between the Parties, Cynapsus shall have the
sole right to use and protect the Regulatory Filings, Marketing Authorizations
and Clinical Development studies and data. ARx shall not file any documents in
contravention of these rights.

 

9.2.2Dossier, Regulatory Filing, and Marketing Authorization. Cynapsus shall own
all right, title and interest in and to the Dossier, Regulatory Filing and
Marketing Authorization registered in the name of Cynapsus.

 

9.2.3Technology.

 

(a)Cynapsus shall own all right, title and interest in and to all [Technical
Information relating to the Product developed by Cynapsus, whether before or
during the course of this Agreement, including, for greater certainty, all
Technical Information developed pursuant to the Cynapsus Development
Activities].

 

20 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

(b)Subject to the language below in Paragraph 3 and Article 4.2, Cynapsus shall
own all right, title and interest in and to all Technical Information relating
to the Product developed by ARx, including, for greater certainty, all Technical
Information developed pursuant to the development activities of ARx.

 

(c)ARx shall own all right, title and interest in and to all Technical
Information possessed by ARx prior to the date of this Agreement and which does
not relate specifically to the Product.

 

9.2.4Improvements. If ARx, in conjunction with Cynapsus, conceives, develops,
creates or reduces to practice any Improvements of the Technical Information or
the Product, all documents and materials in any medium relating to the
Improvements so made, conceived or reduced to practice, whether or not
patentable or copyrighted, shall be considered work made for hire under Work
Plan and Cynapsus shall be the sole owner thereof. ARx will: 1) irrevocably
assign and transfer to Cynapsus all right, title and interest worldwide in and
to all such Improvements, and to all modifications, enhancements and derivative
works thereof and to all patents, copyrights, inventions and other intellectual
property rights related thereto; and 2) upon Cynapsus’s request, execute all
assignments, applications and other documents and perform such acts as requested
by Cynapsus to obtain patent, copyright or other protection in any jurisdiction
to protect Cynapsus’s interest in any Improvements. ARx shall have the right to
incorporate Improvements into the Product only upon receiving Cynapsus’s prior
written approval. Cynapsus hereby grants to ARx, subject to the terms and
conditions hereof an exclusive (except as to Cynapsus), royalty fee, right and
license to use the Improvements to manufacture the Products for sale to Cynapsus
and in connection with other products and formulations which are not Generic.
Cynapsus has a right to sublicense rights to Improvements to a Contingency
Supplier solely in connection with the manufacture of the Products, provided
that the Parties renegotiate the [*****] based upon the value of the Improvement
and contribution to the Improvement by ARx.

 

To the extent that ARx conceives, develops, creates or reduces to practice any
improvements independent of Cynapsus or this Agreement, but which could apply to
the Product (Independent Improvements), Independent Improvements shall not
constitute improvements and ARx shall own all rights to the Independent
Improvements. Use of Independent Improvements shall be negotiated by Cynapsus
and ARx independent of this Agreement.

 

9.2.5Further Documents. Each Party agrees to execute, or to have executed, any
additional documents necessary to establish, evidence, maintain or protect the
other Party’s rights hereunder. Neither Party shall make any filing or claim in
contravention of the other Party’s rights.

 

21 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

9.3Trade-marks.

 

9.3.1Designation and Ownership. Cynapsus shall be responsible for the selection,
registration and maintenance of all trade-marks used by Cynapsus in connection
with the Product in the Territory. ARx shall not acquire or assert any right,
title, and interest in and to any such trade-marks or marks substantially
similar to such trade-marks.

 

9.3.2Indemnity in Favour of ARx. Cynapsus shall defend, indemnify and hold ARx
harmless from any and all Losses which ARx may suffer, incur or become liable
for as a result of or in connection with any third party demand, claim or action
asserted or commenced against ARx based upon the contention that the use by
Cynapsus of any trade-marks in relation to the Product in the Territory
infringes the trade-mark or other intellectual property rights in the Territory
of any third party.

 

9.4Patent Infringement Claims.

 

9.4.1Indemnity in Favour of ARx. Cynapsus shall defend, indemnify and hold ARx
harmless from any and all Losses which ARx may suffer, incur or become liable
for as a result of or in connection with any claim, action, cause of action or
demand asserted against ARx to the extent such claim is based upon the
contention that Cynapsus’s attempt to obtain the Marketing Authorization in the
Territory and/or the manufacture of the Product by ARx infringes the patent or
other intellectual property rights in the Territory of any third party (an
“Infringement Action”).

 

9.4.2Defense of Infringement Actions. Each Party shall promptly notify the other
of any Infringement Action commenced or threatened against the Party by an
unrelated third party. Cynapsus shall assume control and direct the
investigation, handling and defense of all Infringement Actions within the
Territory, including without limitation, selecting counsel and negotiating with
third parties, provided that Cynapsus shall consult with ARx and give ARx the
opportunity to provide comments. Cynapsus shall bear all costs and expenses of
defending the proceeding. ARx may choose to be represented by counsel of its own
choice, at its own expense, but such counsel may not appear in any legal or
judicial proceedings without the consent of Cynapsus, which consent shall not be
unreasonably withheld. ARx shall fully cooperate with Cynapsus in defending the
Infringement Action, including, without limitation, assisting in the production
and location of evidence and having its employees and other representatives
testify in any court proceeding, if necessary, all at Cynapsus’s reasonable
cost. Cynapsus may settle or compromise any claim without the consent of ARx. If
the proceeding is successfully defended and the Parties are entitled to an award
of damages and/or reimbursement of legal fees, then Cynapsus shall be entitled
to the entire amount awarded Cynapsus.

 

22 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

9.4.3Termination Due to Infringement Action. If an Infringement Action is
commenced against Cynapsus and/or ARx, and if Cynapsus reasonably determines
that the likelihood and consequences of an unfavourable rulings warrants that
Cynapsus refrain from marketing and selling the Product in the Territory, or if
Cynapsus agrees to refrain from marketing and selling the Product in the
Territory pursuant to a settlement of an Infringement Action, or if a court of
competent jurisdiction makes a final determination that the marketing and sale
of the Product in the Territory infringes the patent or other intellectual
property rights in the Territory of a third party and all rights to appeal have
been exhausted or expired, then Cynapsus may terminate this Agreement upon
delivering written notice to ARx in accordance with Section 13.4.

 

9.4.4Patent Challenge. Cynapsus shall have the sole right to determine if it
will challenge any third party patent or other intellectual property rights
which may affect the API or the sale of the Product in the Territory, and ARx
shall not commence any patent or other intellectual property challenge
proceedings in contravention of the foregoing without notifying Cynapsus.
Cynapsus shall bear all costs and expenses of pursuing any such proceeding, and
shall have the sole right to select counsel, handle and direct the proceeding
and negotiate with third parties. Cynapsus may settle or compromise any claim
without the consent of ARx. ARx shall cooperate with Cynapsus and provide
reasonable assistance at Cynapsus’s request and expense. If the Parties’
challenge is successful and if the Parties are entitled to any reimbursement of
legal fees or an award of damages or other compensation, then Cynapsus shall be
entitled to the entire amount awarded. ARx is not precluded from filing other
challenges not specifically related to the Product but which may involve
processes that are used with the Product provided it provides prior written
notice to Cynapsus.

 

10.REPRESENTATIONS & WARRANTIES

 

10.1Representations and Warranties. Each Party represents and warrants to the
other Party as follows, which representations and warranties shall be true as at
the date hereof and throughout the term of this Agreement:

 

10.1.1it has full corporate power and authority and has taken all corporate
action necessary to enter into and perform this Agreement; and

 

10.1.2this Agreement is its legal, valid and binding obligation, enforceable in
accordance with the terms and conditions hereof.

 

10.2ARx General Warranties. ARx represents and warrants to Cynapsus as follows:

 

10.2.1Technical Expertise. ARx has and throughout the term of this Agreement
will continue to have the technical expertise, experience and personnel
necessary to develop and manufacture the Product in the manner contemplated by
this Agreement; Notwithstanding anything in this Agreement to the contrary, a
breach of this Paragraph 10.2.1 shall not occur unless and until Cynapsus sets
forth the grounds for the alleged breach to ARx in writing and ARx fails to cure
the alleged breach to the reasonable satisfaction of Cynapsus within ninety (90)
days from receipt of the written notice.

 

23 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

10.2.2No Other Agreements. No contracts, commitments or agreements of any nature
exist, and none will be entered into during the term of this Agreement, that
impair or inhibit the ability of ARx to perform its obligations hereunder; and

 

10.2.3Debarred. ARx has never been and is not currently: (1) an individual who
has been debarred by the FDA pursuant to 21 U.S.C. § 335a(a) or (b) (“Debarred
Individual”)from providing services in any capacity to a person that has an
approved or pending drug product application with FDA, or an employer, employee,
or partner of such a Debarred Individual; or (2) a corporation, partnership or
association that has been debarred by FDA pursuant to 21 U.S.C. § 335a(a) or (b)
(“Debarred Entity”)from submitting or assisting in the submission of an NDA, or
an employee, partner, shareholder, member, subsidiary, or affiliate of a
Debarred Entity, or (3) an employer, employee or partner of an individual
convicted within the last five years for crimes described in subsections (a) or
(b) of Section 306(i) of the Food Drug and Cosmetic Act. ARx further represents
that: (4) ARx has no knowledge of any circumstances which may affect the
accuracy of the foregoing representation, including, without limitation, any FDA
investigations of, or debarment proceedings against, ARx or any person or entity
performing services or rendering assistance which is in any way related to
activities taken pursuant to this Agreement; and (5) ARx will immediately notify
Cynapsus in writing, by certified or registered mail if ARx, at any time during
the term of this Agreement, becomes aware of any such circumstances described in
this Article 10.2(c).

 

10.3ARx Manufacturing and Supply Warranty. ARx warrants and represents to
Cynapsus that all Product delivered to Cynapsus hereunder shall:

 

10.3.1be manufactured and stored by ARx in accordance with the Technical
Information, Specifications and the terms of this Agreement and the Quality
Agreement;

 

10.3.2be manufactured and stored by ARx in accordance with all applicable GMPs,
and all applicable Laws in the Territory;

 

10.3.3be manufactured and stored at ARx’s facilities which are approved by the
Regulatory Authorities in the Territory;

 

24 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

10.3.4not be adulterated or misbranded under any applicable Laws in the
Territory; have at least [*****] of the Product shelf-life remaining at the time
of delivery to Cynapsus.

 

10.4Cynapsus General Warranties. Cynapsus represents and warrants to ARx that:

 

10.4.1Information. All information for the Product supplied by Cynapsus to ARx
hereunder will comply with the Marketing Authorization and all applicable
requirements of the Regulatory Authorities and Laws in the Territory;

 

10.4.2No Other Agreements. No contracts, commitments or agreements of any nature
exist, and Cynapsus covenants that none will be entered into during the term of
this Agreement that impair or inhibit the ability of Cynapsus to perform its
obligations hereunder;

 

10.4.3No Lawsuits. As of the date hereof there have not been any claims,
lawsuits, arbitrations, legal or administrative or regulatory proceedings,
charges, or complaints or investigations by any government authority threatened,
commenced, pending or proceeding against Cynapsus, and Cynapsus has not received
any notice thereof, which could prevent Cynapsus from complying with its
material obligations under this Agreement; and

 

10.4.4Intellectual Property. Cynapsus has the right to use and license for
manufacture to ARx all Cynapsus Technical Information, as well as all
trademarks, copyrights and other intellectual property that is or will be a part
of the Product.

 

10.5Disclaimer. EXCEPT FOR THE WARRANTIES AND REPRESENTATIONS PROVIDED OR
REFERENCED IN THIS AGREEMENT, THE PARTIES MAKE NO OTHER WARRANTIES OR
REPRESENTATIONS TO EACH OTHER, EXPRESS OR IMPLIED, INCLUDING THOSE WITH RESPECT
TO THE PRODUCT, WHETHER STATUTORY OR OTHERWISE, AND EACH PARTY SPECIFICALLY
DISCLAIMS ALL OTHER WARRANTIES, INCLUDING, WITHOUT LIMITATION ANY IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

 

11.COVENANTS OF ARx

 

11.1Compliance. ARx shall manufacture, test, store, ship, supply, dispose and
handle the Product and API, and shall otherwise comply with its obligations
under this Agreement all in strict compliance with all applicable GMPs, the Laws
in the Territory, and all applicable licenses, governmental permits or
applications in the Territory. All Product delivered to Cynapsus hereunder by
ARx shall comply with the terms of this Agreement.

 

25 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

11.2Permits and Licenses. ARx shall throughout the term of this Agreement obtain
and maintain any and all licenses, permits, orders, applications and consents
(including, without limitation, facility licenses and permits) required by the
Regulatory Authorities, the Territory, and all applicable Laws, Regulations, and
GMPs necessary or required to manufacture, store, ship, supply, and dispose of
the Products or otherwise required to perform ARx’s obligations under this
Agreement.

 

11.3Compliance with Environmental, Safety, and Industrial Hygiene. With respect
to all environmental, safety and industrial hygiene matters related to ARx’s
activities under this Agreement, ARx shall (a) certify compliance with all
applicable Laws, (b) inform Cynapsus promptly of any significant adverse event
(e.g., fires, explosions, accidental discharges) that may affect Product, (c)
inform Cynapsus promptly of any allegations or findings of violations of
applicable Laws, (d) allow Cynapsus to inspect ARx’s facilities, upon ARx
approval, if notified of adverse event, such inspections to be at reasonable
times and upon reasonable notice. If ARx shall fail to comply with any of the
conditions in this Section and remedy within a reasonable amount of time, then
Cynapsus shall have the right to terminate this Agreement, effective upon 90
days’ prior written notice, and without payment of any penalty or termination
fee except for payments owed pursuant to Section 13.4 and ARx shall be free from
the exclusivity provisions of Section 3.1.

 

12.COVENANTS OF CYNAPSUS

 

12.1Compliance. Cynapsus shall be solely responsible for compliance with all
applicable Laws in the Territory relating to the advertising, sale, and other
marketing activities concerning the Product.

 

12.2Permits and Licenses. Cynapsus shall throughout the term of this Agreement,
at its expense, obtain and maintain any and all licenses, permits, orders,
authorizations and consents required by the Regulatory Authorities in the
Territory to perform its obligations under this Agreement.

 

12.3Sale of Product. Cynapsus shall use its commercially reasonable efforts to
market and sell the Product in the Territory. Cynapsus shall be responsible for
all costs and expenses incurred in marketing and commercializing the Product in
the Territory.

 

12.4If Cynapsus shall fail to comply with any of the conditions in this Section
and remedy within a reasonable amount of time, then ARx shall have the right to
terminate this Agreement, effective upon 90 days’ prior written notice, and
without payment by ARx of any penalty or termination fee.

 

13.TERM & TERMINATION

 

13.1Term and Optional Commercial Term. The initial term of this Agreement shall
commence upon the delivery by Cynapsus of the first Forecast for the Product
pursuant to Section 5.1, and, unless terminated earlier in accordance with the
provisions hereof, shall continue for a period of ten (10) years from the Launch
Date in the Territory. Thereafter, this Agreement shall automatically renew for
successive one (1) year periods unless a Party delivers written notice of
termination to the other Party at least one (1) year prior to the end of the
applicable term.

 

26 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

If Cynapsus, in its absolute discretion, wishes to make the Product available
for commercial sale outside of the Territory, then Cynapsus shall deliver
written notice to ARx advising that Cynapsus wishes to extend the Territory as
defined in this Agreement in the applicable country or countries. In the event
that ARx shall have obtained the required regulatory approvals to manufacture
the Product in one or more markets outside of the Territory and Cynapsus shall
have decided to enter one or more such markets outside of the Territory, ARx
shall be invited by Cynapsus to bid for the right to supply the Product in such
market(s). Notwithstanding the above, Cynapsus shall retain the sole discretion
to select one or more suppliers of the Product in markets outside of the
Territory.

 

13.2Termination. If any one or more of the following events occur, then this
Agreement may be terminated in its entirety as set forth herein:

 

13.2.1if a Party files a petition in bankruptcy or is adjudged a bankrupt, or a
petition in bankruptcy is filed against it and is not dismissed within sixty
(60) days, or it becomes insolvent, takes advantage of legislation for creditor
relief, has a receiver or receiver-manager appointed in relation to its assets,
or discontinues its business, then the other Party may terminate this Agreement
upon delivering written notice of termination;

 

13.2.2if a Party violates or fails to perform any of its material undertakings,
agreements, covenants or obligations under this Agreement (excluding matters
otherwise specifically addressed with a termination right elsewhere in this
Agreement) and the failure is not capable of cure or, if capable of cure, is not
remedied within ninety (90) days after receipt of written notice from the
non-defaulting Party, then the non-defaulting Party may terminate this Agreement
upon delivering written notice of termination; and

 

13.2.3if a Party wilfully or fraudulently misrepresents any fact, information or
report required to be made or disclosed under this Agreement, then the other
Party may terminate this Agreement upon delivering written notice of
termination.

 

13.3Termination by Cynapsus Without Cause. Notwithstanding anything to the
contrary in this Agreement, Cynapsus may terminate this Agreement if Cynapsus no
longer wishes to market the Product in the Territory upon one (1) year written
notice and ARx shall be free from the exclusivity requirements of Section 3.1.

 

13.4Effect of Termination.

 

Upon the effective date of expiration or termination of this Agreement for any
reason and upon request of Cynapsus, ARx shall within thirty calendar (30) days
or less deliver to Cynapsus copies of all Technical Information, API purchased
by Cynapsus and all other materials, supplies and proprietary materials provided
by, or purchased on behalf of Cynapsus, at Cynapsus’ cost, and ARx shall be free
from the exclusivity requirements of Section 3.1

 

27 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

In the event of the termination of this Agreement by Cynapsus for any reason
other than those set forth in Section 13.2, or in the event of a termination of
this Agreement by ARx, Cynapsus shall be responsible for any portion of the
compensation owed to ARx for the manufacturing, quality control, quality
assurance and stability testing, packaging and related services, as contemplated
in this Agreement (the “Manufacturing Services”), required to produce the
Products or out-of-pocket expenses, time, materials in anticipation of any
Manufacturing Services, rendered for any firm Purchase Orders prior to the
effective date of such termination, or any costs incurred as a result of the
termination, to the extent such fees and expenses are not cancelable or have not
been reimbursed by a third party.

 

13.5Post-Termination. Without prejudice to the rights or remedies available to
either Party and provided Cynapsus is not in material default hereunder, despite
the termination or expiration of this Agreement, ARx shall deliver to Cynapsus
all Products for which Cynapsus has issued Purchase Orders or has otherwise paid
prior to termination or expiration. Cynapsus will pay for such Products in
accordance with the applicable terms of this Agreement.

 

13.6Survival. The expiration or earlier termination of this Agreement shall not
relieve any Party hereto from any obligations which accrued prior to such
expiration or earlier termination, and shall not destroy or diminish the binding
force and effect of any of the terms and conditions of this Agreement that
expressly or by implication come into or continue in effect on or after
termination or expiration. If this Agreement terminates, the license granted to
ARx in Sections 3.6, 4.2 and 9.2.4 shall survive termination.

 

14.INDEMNIFICATION & INSURANCE

 

14.1Indemnification of ARx. Cynapsus agrees to defend, indemnify and hold ARx,
its Affiliates and their respective officers, directors, employees, agents and
representatives, harmless from and against any Losses arising out of any third
party claim, action, cause of action or demand resulting from:

 

14.1.1any breach of this Agreement by Cynapsus;

 

14.1.2any negligent or intentionally wrongful act or omission of Cynapsus or its
employees or other representatives;

 

14.1.3the use or consumption of the Product;

 

14.1.4Cynapsus’s specific written instructions to ARx; and

 

28 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

14.1.5Any intellectual property claims related to Cynapsus’ Product.

 

14.2Indemnification of Cynapsus. ARx agrees to defend, indemnify and hold
Cynapsus, its Affiliates and their respective officers, directors, employees,
agents or representatives harmless from and against any Losses arising out of
any third party claim, action, cause of action or demand resulting from damage
to property, death, or personal injury and from:

 

14.2.1any breach of this Agreement by ARx; and

 

14.2.2the negligent or intentionally wrongful act or omission by ARx or its
respective employees or other representatives.

 

Not withstanding anything in this Agreement to the contrary, ARx’s total
liability under this Agreement shall not exceed [*****]; provided that, at such
time as ARx provides additional [*****] and testing capabilities, ARx’s
liability under this Agreement shall not exceed [*****].

 

14.3Indemnification Procedure. Any Party entitled to indemnification hereunder
(the “Indemnitee”) shall notify the other Party (the “Indemnitor”) promptly of
any claim threatened or commenced against the Party for which the Party is so
entitled. The Indemnitor shall assume control and direct the defense,
investigation or handling of the claim for and on behalf of the Indemnitee,
provided however that, the Indemnitor shall not settle or consent to judgment
without the Indemnitee’s approval, which approval shall not to be unreasonably
withheld. The Indemnitee shall cooperate with the Indemnitor, and may
participate, at the Indemnitee’s expense, in the defense of such claim. If the
Indemnitor fails to assume control of the defence of any claim, or, having
elected to assume control, thereafter fails to diligently defend the claim, the
Indemnitee shall, without limitation to the Indemnitor’s obligations hereunder,
be entitled to contest, settle or pay the amount of the claim, and the
Indemnitor shall be bound by the results obtained by the Indemnitee with respect
to the claim.

 

14.4Insurance.

 

14.4.1ARx Insurance. ARx shall, during the term of this Agreement and for a
period of [*****] after the expiration date of the last unit of Product sold by
Cynapsus, maintain a policy of product liability insurance for the Product
insuring against personal injury, death and damage to property due to
manufacturing defects. The said policy shall have a liability limit of not less
than [*****] per occurrence and [*****] in the aggregate, on an annual basis,
and shall be maintained with a financially sound and reputable insurer. The
policy shall provide that: (i) the insurer will provide thirty (30) days written
notice to Cynapsus prior to any cancellation. ARx shall, upon the written
request of Cynapsus, furnish to Cynapsus a certificate of insurance evidencing
the foregoing coverage.

 

29 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

14.4.2Cynapsus Insurance. Cynapsus shall, during the term of this Agreement,
maintain a policy of product liability insurance for the Product insuring
against personal injury, death and damage to property. The said policy shall
have a liability limit of not less than [*****] per occurrence and [*****] in
the aggregate. At the time of Product launch, during the proceeding term of this
Agreement, and for a period of [*****] after the expiration date of the last
unit of Product sold by Cynapsus, Cynapsus’ liability limit [shall be increased
so it is not less [*****] per occurrence and [*****] in the aggregate, on an
annual basis, and shall be maintained with a financially sound and reputable
insurer. The policy shall provide that: (i) the insurer will provide thirty (30)
days written notice to ARx prior to any cancellation, and (ii) without limiting
any indemnity obligations hereunder, ARx shall be named as an additional
insured. Cynapsus shall, upon the written request of ARx furnish to ARx a
certificate of insurance evidencing the foregoing coverage.

 

14.5Limitation of Liability. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, IN
NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL,
INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES (INCLUDING, WITHOUT
LIMITATION, LOST PROFITS, BUSINESS OR GOODWILL) SUFFERED OR INCURRED BY SUCH
OTHER PARTY IN CONNECTION WITH THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREIN OR A BREACH OR ALLEGED BREACH OF THIS AGREEMENT. THE FOREGOING SENTENCE
SHALL NOT (A) APPLY IN CASES OF A PARTY’S FRAUD, GROSS NEGLIGENCE OR INTENTIONAL
MISCONDUCT, (B) NOT LIMIT THE OBLIGATIONS OF EITHER PARTY TO INDEMNIFY THE OTHER
PARTY FROM AND AGAINST THIRD PARTY CLAIMS UNDER THIS ARTICLE 14, OR (C) LIMIT
THE DAMAGES AVAILABLE TO A PARTY FOR THE OTHER PARTY’S BREACH OF ITS OBLIGATIONS
UNDER ARTCLES 9 AND 15.

 

14.6Survival. The indemnification obligations set forth in this Article 14 shall
survive the termination of this Agreement and remain in full force and effect
for a [*****] year period after the expiration date of the last unit of Product
manufactured by ARx in relation to any claim based on events which occur during
the term hereof.

 

30 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

15.CONFIDENTIALITY

 

15.1Confidentiality. During the term of this Agreement and for ten (10) years
thereafter, each Party shall maintain in strict confidence the Confidential
Information (as defined below) of the other Party. Each Party shall not use the
Confidential Information of the other Party for any purpose other than the
purposes expressly permitted by this Agreement, and shall not disclose such
Confidential Information to any third party (including, without limitation in
connection with any publications, presentations or other disclosures) except to
its employees, agents or advisors who have a need to know such Confidential
Information to achieve the purposes of this Agreement or as otherwise
contemplated herein for the purposes of this Agreement. Each Party shall ensure
that any person to whom it discloses the other Party’s Confidential Information
is informed of the confidential nature of and duty not to disclose the
information, and is obligated to maintain the confidentiality thereof. Each
Party may also disclose such of the Confidential Information of the other Party
as may be required by law or by any governmental authority having jurisdiction,
provided that prior to any such disclosure the Party required to disclose shall,
if possible, notify the other Party prior to disclosing any Confidential
Information and provide such other Party with a reasonable opportunity to
contest or limit the scope of the required disclosure and obtain any protective
orders as may be appropriate. Except as otherwise provided herein, upon
termination or expiration of this Agreement, or upon request, a Party shall
destroy or, if so requested, return all Confidential Information of the other
Party and certify in writing that such return or destruction has been completed.

 

15.2Definition. “Confidential Information” means all proprietary technical
information (including the Technical Information and the Dossier), marketing,
business and financial information, scientific data, information marked
confidential and all other information which a reasonable person would treat
confidentially that relates to the Product or the business of a Party.
Confidential Information shall not include any information which the receiving
Party can show:

 

15.2.1was known to or in the possession of the receiving Party prior to the date
of its actual receipt from the disclosing party;

 

15.2.2is readily available to the public other than through any act or omission
of the receiving Party in contravention of this Agreement or any other agreement
between the Parties;

 

15.2.3was disclosed by a third party not under an obligation of confidentiality
to the disclosing Party; or

 

15.2.4is subsequently independently developed by the receiving Party without use
of the Confidential Information as demonstrated by competent written records.

 

15.3No Publicity. Except as required by law, neither Party shall originate any
publicity, news release or other public announcements, written or oral, whether
to the public press, to stockholders, or otherwise, relating to this Agreement,
any amendment hereto, performance hereunder or the existence of an arrangement
between the Parties without the prior written approval of the other Party, which
approval shall not be unreasonably withheld. Nothing in the provision shall be
deemed to prevent a Party from making such disclosures or announcements that, in
the opinion of legal counsel, are legally required of such Party; provided that
in any event the non-disclosing Party shall have the right to review any such
disclosure and revise such disclosure to the extent it relates to the use of the
non-disclosing Party’s name or Confidential Information.

 

31 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

16.MISCELLANEOUS

 

16.1Any notice or other document required or permitted to be given pursuant to
this Agreement shall be in writing and shall be delivered by prepaid registered
mail, return receipt requested; personally by hand; by courier; by email; or by
facsimile transmission, in each case addressed to the Party or Parties to whom
it is to be given at the address or facsimile number shown below or at such
other address or facsimile number as the Party to whom such notice is to be
given shall have last notified the other Party in accordance with the provisions
of this section:

 

In the case of ARx at:

 

ARx, LLC

400 Seaks Run Road

Glen Rock, PA 17327

United States

Attention:General Counsel

Fax No.:

Email:

 

And in the case of Cynapsus at:

 

Cynapsus Therapeutics Inc.

828 Richmond St. W,

Toronto, Ontario M6J 1C9

Canada,

Attention:Thierry Bilbault

FaxNo.: 416.703.8752

Email:TBilbault@Cynapsus.ca

 

Any such notice or other document shall:

 

(a)if delivered by hand, courier, or email be deemed to have been given and
received at the place of receipt on the date of delivery, provided that if
delivery is other than during business hours (9:00 a.m. to 5:00 p.m., local
time) in the place of receipt, such notice shall be deemed to have been given
and received at the place of receipt on the first business day thereafter;

 

(b)if mailed, be deemed to have been given and received at the place of receipt
on the earlier of the date of actual receipt and ten (10) business days after
the date of mailing. In the event of postal disruption, such notices or
documents must be delivered by means other than by mail; and

 

32 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

(c)if transmitted by facsimile, and provided that the sender has received
confirmation of receipt, be deemed to have been received on the same day if
transferred during business hours (9:00 a.m. to 5:00 p.m., local time) in the
place of receipt, and be deemed to have been given and received at the place of
receipt on the next business day in the place of receipt following the day of
sending, if transferred after business hours in the place of receipt.

 

16.2Relationship of the Parties. The relationship of the Parties is that of
independent parties. This Agreement does not constitute any one Party hereto as
the agent or legal representative of the other Party for any purpose whatsoever.
Neither of the Parties grants to the other any right or authority to assume or
create any obligation or responsibility, express or implied, on behalf of it or
in its name in any manner whatsoever, unless otherwise agreed to in writing by
the other Party.

 

16.3Assignment. This Agreement shall be binding upon and inure to the benefit of
the Parties hereto and their respective successors and permitted assigns. Except
as otherwise expressly provided herein, neither Party may assign or transfer it
rights or obligations under this Agreement, in whole or in part, without the
prior written consent of the other Party, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, either party
shall have the right to assign or otherwise transfer its rights or obligations
under this Agreement to a successor in interest by merger, operation of law or
purchase of its the assets or entire business, whether by contract or operation
of law, without the consent of the other party. Any assignment or transfer by a
Party other than in accordance with the terms hereof shall be void and shall
entitle the other Party to terminate this Agreement.

 

16.4No Waiver; Remedies. No Party to this Agreement shall be deemed or taken to
have waived any provision of this Agreement unless such waiver is in writing,
and then such waiver shall be limited to the circumstances set forth in such
written waiver. No failure or delay on the part of a Party in exercising any
right, power or remedy shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
All remedies provided for hereunder shall be cumulative of and in addition to
any and all other remedies, at law or in equity, which any Party may have, and
the exercise of any one or more of such remedies shall not preclude the exercise
of any others.

 

16.5Time. Time shall be of the essence of this Agreement and every part hereof.

 

33 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

16.6Force Majeure. If either Party is prevented from complying, either totally
or in part, with any of the terms or provisions of this Agreement, by reason of
force majeure, including but not limited to fire, flood, earthquake, storm,
general strike, lockout, riot, war, terrorism, rebellion, accident, acts of God
and/or any other cause or externally induced casualty beyond its reasonable
control, whether similar to the foregoing matters or not (a “Force Majeure
Event”), then, upon written notice by the Party liable to perform to the other
Party, the requirements of this Agreement or such of its provisions as may be
affected, and to the extent so affected, shall be suspended during the period of
such disability, provided that the Party asserting force majeure shall bear the
burden of establishing the existence of such Force Majeure Event by clear and
convincing evidence, and provided further that the Party prevented from
complying shall use its best efforts to remove such disability, and shall
continue performance with the utmost dispatch whenever such causes are removed,
and shall notify the other Party of the Force Majeure Event not more than five
(5) business days from the time of the event. When such circumstances arise, the
Parties shall discuss what, if any, modification of the terms of this Agreement
may be required in order to arrive at an equitable solution. For greater
certainty, if ARx claims that it is prevented from supplying the Product to
Cynapsus as a result of a Force Majeure Event, then for the duration of the
Force Majeure Event Cynapsus may manufacture or arrange for the manufacture of
the Product by a third party, and may submit alternative Marketing Authorization
or modify the current Marketing Authorization, all without obligation to ARx.
Notwithstanding the foregoing, if a Force Majeure Event shall continue for a
period of longer than [*****] or [*****] in any [*****] month period, then the
Party unaffected by such event may terminate this Agreement upon giving not less
than [*****] written notice of termination to the other Party subject to the
provisions of Section 13.4, provided that if the Force Majeure Event ceases
within such [*****] period this Agreement shall remain in full force and effect.

 

16.7Governing Law & Dispute Resolution.

 

16.7.1This Agreement shall be governed by and construed in accordance with the
laws of New York, New York. The Parties consent to the jurisdiction of the
courts of Ontario, and each Party waives any defenses to inconvenient forum or
sovereign immunity.

 

16.7.2All disputes arising in connection with this Agreement, its negotiation,
performance, breach, existence or validity, shall be determined by arbitration
in accordance with the National Arbitration Rules of the ADR Institute of Canada
by one or more arbitrators appointed in accordance with the applicable rules.
The place of arbitration shall be Toronto, Ontario, and the language of
arbitration shall be English. The determination of any such arbitration shall be
final and binding on the Parties and no appeal shall lie therefrom. Any award
rendered may be entered in any court having jurisdiction. Responsibility for the
costs of the arbitration proceeding shall be determined in the discretion of the
arbitration panel. The Parties shall keep all details of the arbitration
proceeding and arbitral award strictly confidential and shall use all reasonable
efforts to take such action as may be appropriate to prevent the unauthorized
disclosure of the proceedings, any information disclosed in connection therewith
and the award granted. Notwithstanding the foregoing, neither Party shall be
precluded from applying to a court of competent jurisdiction for any relief in
the nature of injunction, specific performance, or other equitable remedy.

 

34 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

16.7.3Severability. If any provision in this Agreement is held to be invalid,
void or unenforceable, then the remainder of this Agreement, or the application
of such provision to the Parties or to the circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby and
shall be enforced to the fullest extent permitted by law. The Parties agree to
renegotiate any such invalid, void or unenforceable provision in good faith in
order to provide a reasonably acceptable alternative consistent with the basic
purposes of this Agreement.

 

16.7.4Entire Agreement. This Agreement (including the Schedules attached hereto)
constitutes the entire agreement between the Parties with respect to the subject
matter hereof, and all prior or agreements, whether written or oral, are
superseded hereby. This Agreement may be amended only in writing executed by the
Parties.

 

16.7.5Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute this Agreement.

 

16.8Headings. The captions and headings contained herein are for convenience of
the Parties and in no way define, limit or describe the scope of this Agreement.

 

16.8.1Language. The language of this Agreement and all proceedings taken in
relation thereto shall be English.

 

16.8.2Currency. Unless otherwise specifically provided, all references to money
amounts are expressed in terms of U.S. dollars and all payments made pursuant to
this Agreement shall be made in that currency.

 

[Signature Page Follows]

 

35 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date and year first written above.

 

CYNAPSUS THERAPEUTICS INC.   ARX, LLC       By: /s/ Anthony Giovinazzo   By: /s/
Tadgh Prendeville Name:  Anthony Giovinazzo   Name: Tadgh Prendeville
Title:  President and CEO   Title: General Manager I have authority to bind the
corporation   I have authority to bind the corporation          

Schedule A: Quality Agreement Schedule B: Product Specifications Schedule C:
Pricing

 

36 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

Schedule A: Quality Agreement

 

37 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

  Quality Agreement [image_001.jpg] 

This agreement is between the following two companies:

 

CYNAPSUS THERAPEUTICS Inc.

828 Richmond Street West
Toronto, Ontario, M6J 1 C9
Canada
T: 416-703-2449
F: 416-703-8752

ARx, LLC

 

400 Seaks Run Road

Glen Rock, PA 17327

 

Tel: 717-227-8269

Fax: 717-227-8274

 

Overview

 

This Quality Assurance Agreement is between CYNAPSUS THERAPEUTICS Inc.
(hereinafter called CYNAPSUS) and ARx, LLC (hereinafter called ARX).

 

This Quality Assurance Agreement defines the expectations and responsibilities
for ARX as a development and manufacturing partner, as outlined in this
agreement, relating to the manufacturing control activities for drug products
conducted as required by 21 Code of Federal Regulations Part 210 and part 211 by
US FDA on behalf of CYNAPSUS This document has been drawn up according to the
US-FDA cGMP regulations set by the US FDA. On agreement to the expectations and
responsibilities defined in this document, this document is considered as
binding to both parties named in this agreement.

 

It is the responsibility of CYNAPSUS to maintain this document in a current
state and to ensure that approval has been given. Any revisions to this document
must be agreed to by both parties in writing prior to implementation of the
revision.

 

38 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

  Quality Agreement [image_001.jpg] 

 

ARX is a pharmaceutical manufacturer who holds appropriate site and facility
licenses. Any changes in to facilities or licenses directly affecting Cynapsus
products, require prior agreement of CYNAPSUS.

 

ARX and CYNAPSUS will inform the other party of any changes or of any
restrictions to the appropriate manufacturing license for the products covered
by the agreement.

 

Communication

 

ARX and CYNAPSUS have identified key contact personnel to ensure responsible
individuals are contacted for issue resolution. Attachment 1 is a listing of all
key contact titles for both parties. Changes to key personnel will be confirmed
in writing and Attachment I revised as necessary.

 

Services provided

 

ARX will function as a manufacturer providing bulk and/or finished products as
listed in Attachment 2. Changes to products will be confirmed in writing and
Attachment 2 will be revised as necessary.

 

It is the responsibility of ARX to ensure all activities related to the
manufacturing, (packaging and labelling if applicable) and release of products
listed in Attachment 2 are in compliance with cGMP.

 

ARX will be responsible for ensuring that all products are properly packaged and
labeled to protect from environmental exposure. Products will be sent by
acceptable means to arrive at CYNAPSUS or CYNAPSUS designated place(s) during
the normal working hours.

 

39 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

  Quality Agreement [image_001.jpg] 

 

Responsibilities for ARX and CYNAPSUS are summarized in Attachment 3. ARX will
provide to CYNAPSUS the supporting documents for responsibilities as listed in
Attachment 3, as applicable.

 

Arrangements on prices and other commercial terms (e.g., presentation, delivery
times, liabilities and guarantees) are reserved to a separate contract
agreement.

 

Raw Materials (excluding API)

 

Unless otherwise specified in sales agreements and/or scope of work for specific
products, ARX will be responsible to:

 

·Supply all raw materials to be used to manufacture the product (unless supplied
by CYNAPSUS). For printed packaging materials produced by ARX, CYNAPSUS will
first approve the accuracy, updating and regulatory compliance of all CYNAPSUS
artwork and label text copy.

·If the test method identified is a compendial method, ensure testing will be
conducted to the current identified Pharmacopoeia edition, including any current
supplements.

·Test materials which are non-compendial according to test methods and
specifications set by ARX and/or CYNAPSUS, or supply materials to a third party
contract testing laboratory if instructed by CYNAPSUS.

·Retain and maintain retention samples, including any printed packaging
materials.

 

40 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

  Quality Agreement [image_001.jpg] 

 

Bulk and/or Finished Products

 

Unless otherwise specified in sales agreements and/or scope of work for specific
products, ARX will be responsible to:

 

·Review and release bulk, ensuring manufacturing formula, methods and in-process
and bulk specifications are met.

·If the test method identified is a compendial method, ensure testing will be
conducted to the current identified Pharmacopoeia edition, including any current
supplements.

·Test materials which are non-compendial according to test methods and
specifications set by ARX and/or CYNAPSUS, or supply materials to a third party
contract testing laboratory if instructed by CYNAPSUS.

·Retain and maintain retention samples, including any printed packaging
materials.

·Notify CYNAPSUS, in advance, of any changes to specifications set by ARX and
CYNAPSUS.

·Provide Certificate of Analysis and Certificate of Manufacture

·Certificate of Analysis to contain at least:

·Product name, lot number and expiry date

·Tests, test methods used, specifications and actual numerical results

·Authorized personnel (QC and QA Manager) to sign and date

·Statement of compliance

·Certificate of Manufacture to contain at least:

·Product name, batch number, date of manufacture and expiry date

·Statement of compliance with manufacturing documents, reference document
numbers, revisions.

·Authorized personnel (QA Manager) to sign and date

·Notify and obtain review and approval from CYNAPSUS of any deviations,
investigations.

 

41 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

  Quality Agreement [image_001.jpg] 

 

·Upon request, supply copies of full batch records to CYNAPSUS in a timely
manner.

·Retain samples and records.

·Notify CYNAPSUS for any rework requested. Obtain approval prior to executing.

·Store finished product under approved or GMP conditions, and distribute in
accordance with the agreed procedures and requirements provided by CYNAPSUS
Distribution, shipping and storage of finished product becomes the
responsibility of CYNAPSUS, once the product leaves the ARX warehouse.

 

CYNAPSUS will be responsible to:

·Notify ARX of any discrepancies related to the received documents

·Approve the manufacturing master documents and/or critical manufacturing
deviations.

·Release finished product to Market and authorize shipments.

·Fulfill other responsibilities as per attachment #3.

 

CYNAPSUS will be responsible to:

·Investigate customer complaints

·CYNAPSUS to notify ARX of any complaints received for products supplied by ARX
that are related to manufacturing issues.

Note: ARX to investigate complaint which are related to manufacturing and the
quality of the product and respond to CYNAPSUS in a timely manner.

·CYNAPSUS to respond to customer regarding complaint.

·In the event there is recall required in accordance with applicable
regulations, CYNAPSUS will manage, authorize and direct the recall of the
product.

·Report Adverse Drug Reactions

 

42 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

  Quality Agreement [image_001.jpg] 

 

Out of Specification Results and manufacturing related deviations

 

For any out of specification / suspect testing results generated during testing
of products supplied to CYNAPSUS, ARX will notify CYNAPSUS within one business
day of valid OOS results. Likewise, ARX will notify CYNAPSUS of manufacturing
related investigations related to CYNAPSUS products within One Business day.
Copies of CYANPSUS related investigations will be provided to CYNAPSUS for
review and approval.

 

Facilities and Equipment

 

ARX will be responsible to:

 

·Inform CYNAPSUS in a timely manner of any modifications or changes to the
manufacturing, packaging and labelling (as applicable) facilities, which may
impact products supplied to CYNAPSUS.

·ARX being located in US will:

·Maintain appropriate Licenses (including from US-FDA) as required by Law.

·Provide a current copy of such Licenses to CYNAPSUS upon request.

·Immediately notify CYNAPSUS regarding any License suspension activity, which
impacts the products supplied to CYNAPSUS.

·Ensure that all testing is conducted according to GMP using validated equipment
and maintain a calibration program and validation program for all Laboratory
equipment and supporting systems. All validation documentation will be made
available to CYNAPSUS, upon request for inspection upon reasonable advance
notice.

·If, during a Regulatory inspection at CYNAPSUS requests are made for
documentation to support activities at ARX (e.g., Site SOPs), ARX will provide
these to CYNAPSUS within 72 hours or allow CYNAPSUS and auditors access to ARX
facilities and staff with reasonable notice

 

43 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

  Quality Agreement [image_001.jpg] 

 

Validation

 

ARX will maintain a formal validation program for:

·Process (Fabrication & Packaging) Validation

·Equipment Validation

·Cleaning Validation

ARX will allow CYNAPSUS access to validation documentation (i.e. protocols and
reports) when on-site and upon request.

 

Change Control

 

ARX will ensure all changes made are handled as per internal change control
procedures and will notify CYNAPSUS, as applicable.

 

Inspections / Audits

 

ARX will be responsible to:

·Notify CYNAPSUS of all local regulatory activity, including inspection and
outcome, which may impact product supplied to CYNAPSUS products. CYNAPSUS
reserves the right to request regulatory agency inspection reports and responses
by ARX as it relates to CYNAPSUS’s product.

·Ensure contractors and suppliers used by ARX adhere to the supplier
qualification programs.

 

44 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

  Quality Agreement [image_001.jpg] 

 

CYNAPSUS may:

·Audit ARX on an annual basis, to assess and ensure the ongoing GMP compliance
of the facility in regard to activities conducted on behalf of CYNAPSUS. Audits
will be scheduled through the identified ARX contact and both ARX and CYNAPSUS
will agree upon the timing of the audit. The audit will be requested 60 days in
advance and will consist of no more than two auditors for two days.

·Provide a written Audit Report detailing all audit observations within 30 days
of audit performance. ARX will provide a written response to all observations
detailing the response to each observation 30 days after audit report receipt,
the owner of the action and a target date of completion. The audit observations,
reports and responses will be agreed to by both parties and will be completed by
both parties within an agreed upon timeframe. Both ARX and CYNAPSUS will monitor
the completion of all observation responses to ensure timely completion of all
audit findings.

 

Training and Qualification

 

ARX will maintain a training program to assure all personnel engaged in the
manufacturing, packaging and labelling (as applicable) of products supplied to
CYNAPSUS have the education; training and experience to properly perform their
assigned functions in compliance with GMP. Training records will be readily
retrievable and available to CYNAPSUS for review upon request.

 

Confidentiality

 

All documentation, including methods, specifications, batch records, and master
formulas will be treated confidentially by both ARX and CYNAPSUS. Documentation
will be returned to CYNAPSUS or ARX, if requested. A separate confidentially
agreement may be in place between ARX and CYNAPSUS.

 

45 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

  Quality Agreement [image_001.jpg] 

 

Both companies agree to keep each other’s “intellectual property” strictly
confidential. Neither party is entitled to use the “intellectual property” of
the other disclosed to it under this agreement. Exceptions include disclosures
of information necessary for authorities during GMP inspections.

 

Approval Signatures

 

On behalf of ARX and CYNAPSUS, we agree to the conditions and relative
responsibilities as set out in the above document.

 

  CYNAPSUS ARX Name Thierry Bilbault Todd Sunstrom Job Title Chief Scientific
Officer Director of Quality Signature /s/ Thierry Bilbault /s/ Todd Sunstrom
Date June 3, 2015 June 5, 2015

 

46 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

  Quality Agreement [image_001.jpg] 

 

Attachment 1: LISTING OF KEY CONTACT PERSONNEL

 

CYNAPSUS ARX

Name: Thierry Bilbault

Job Title: Chief Scientific Officer

Telephone: 416-703-2449 x261

Email: tbilbault@cynapsus.ca

Name: Todd Sunstrom

Job Title: Director of Quality

Telephone: 717-227-8269/717-227-8274

Email: tsunstrom@arglobal.com

Name:

Job Title:

Telephone:

Email:

Name:

Job Title:

Telephone:

Email:

Name:

Job Title:

Telephone:

Email:

Name:

Job Title:

Telephone:

Email:

 

47 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

  Quality Agreement [image_001.jpg] 

 

Attachment 2: Product Supplied from ARX to CYNAPSUS.

 

Apomorphine HCl Hemihydrate/pH regulating Oral Dissolvable Bulk Film (Slit).
Theoretical Film Content [*****] Apomorphine HCl Hemihydrate/mm2

 

Master Roll: Theoretical Meters from Coating of [*****]

Slit Rolls:  Theoretical Meters from Coating of [*****].

 

 

 

The above list is current as of June 3, 2015

 

 

  CYNAPSUS ARX Name Thierry Bilbault Todd Sunstrom Job Title Chief Scientific
Officer Director of Quality Signature /s/ Thierry Bilbault /s/ Todd Sunstrom
Date June 3, 2015 June 5, 2015

 

48 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

  Quality Agreement [image_001.jpg] 

 

Attachment 3: Summary of Responsibilities

 

    ARX CYNAPSUS Maintenance of Marketing Authorization & Licenses   X Raw
Materials (including API) Specifications X X API Supply/procurement   X
Excipient Supply/procurement X   Excipient Testing/release for use X   Retention
samples X   Bulk and/or Finished Product Specifications X X Manufacturing
formula and method X X In process control/testing X   Analytical testing X X
Certificate of Analysis X   Certificate of Manufacture X   Stability Studies   X
Retention samples X   Release of Finished product to Market   X Validation
Process and Product related Analytical Method Validation Protocols prepared and
approved X X Records retained by X   Summary Report Retained by X  

  

49 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

Schedule B: Product Specifications

 

50 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

 

Effective Date:

June 10, 2016

APL-130277 Bulk Roll

Specification

Revision No:

2

[image_001.jpg] 

 

Manufacturer: ARx LLC. Document Number: N/A

 

 

ACTIVE BULK ROLL SPECIFICATION

 

Test Method Specification Film Appearance LSOP-0000801 An opaque blue to
blue-green film Identity A 12912 The retention time of the major peak in the
sample conforms to the retention time of the major peak in the standard within ±
3% Identity B 12912 The UV spectrum of the major peak is consistent with that of
the standard. Assay3 12912

Average:

 

90-110% LC

 

Related Substances3 12912

Total Impurities

 

NMT 2.0%

 

Bulk Uniformity 12912

Stage1-10 of 10 specimens

 

AV<15%

 

Stage 2-30 of 30

 

specimens

 

AV<25%

 

pH3 14832 [*****] Moisture by Karl Fischer3 13652 [*****] Residual Solvents
17932

[*****]

 

[*****]

 

Water Activity  LSOP-0000041 [*****] Bioburden3

USP <61>

 

USP <62>

 

USP <1111>

 

Total Aerobic Count ≤ 200 CFU/film Yeast/Mold Count ≤ 20 CFU/film

 

Absence of Staphylococcus aureus and Pseudomonas aeruginosa

 

1 ARx Test Method and analyzed at ARx LLC., 400 Seaks Run Rd, Glen Rock, PA
17327, USA.

2 QCL Test Method and analyzed at Quality Chemical Lab, 3400 Enterprise Dr,
Wilmington, NC 28405, USA

3 [*****]

  

 

 

QA Approved by:

  

 

Name: Thierry Bilbault Signature: /s/ Thierry Bilbault Date: June 13, 2016

 

51 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY

CYNAPSUS THERAPEUTICS INC.

 

Portions herein identified by [*****] have been omitted pursuant to a request
for confidential treatment under Rule 24b-2 of the Securities Exchange Act of
1934, as amended. A complete copy of this document has been filed separately
with the Securities and Exchange Commission.

 

Schedule C: Supply Price

 

The Supply Price for the Product will be [*****].

 

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