Exhibit 10.4

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

 

 

 

 

 

 

 

 

 

 

SUPPLY AGREEMENT

 

BY AND BETWEEN

 

ANTHROGENESIS CORPORATION

 

AND

 

ALLIQUA, INC.

 

 

 

April 10, 2014

 

 

 

 

 

 

 

 

 

  

 

 

 

TABLE OF CONTENTS

 

PAGE

 

ARTICLE 1  DEFINITIONS 1     ARTICLE 2  SUPPLY OF MANUFACTURED PRODUCTS 2    
2.1   Sale and Purchase of Manufactured Products 2 2.2   Forecasts; Firm Orders
4 2.3   Shipment and Delivery 4 2.4   Alliqua Right to Manufacture 4     ARTICLE
3  REGULATORY AND QUALITY MATTERS 5     3.1   Regulatory Responsibility 5
3.2   Change Control 5 3.3   Records 5 3.4   Testing 6 3.5   Regulatory
Inquiries 6 3.6   Notice of Regulatory Inspections 6 3.7   Quality Agreement 6
3.8   Quality Audits 7 3.9   Intentionally Omitted 7 3.10   Cooperation 7
3.11   Recalls 8 3.12   Complaints 8 3.13   Warning Letters 9 3.14   Inquiries
from Health Care Professionals 9 3.15   Debarment 9 3.16   Additional Covenants
of Alliqua 9     ARTICLE 4  PRICE AND PAYMENT TERMS 9     4.1   Purchase Price 9
4.2   Taxes 10 4.3   Freight and Insurance 10 4.4   Payments 10 4.5   Interest
Charges 10 4.6   Pricing 10     ARTICLE 5  INSPECTION OF MANUFACTURED PRODUCTS
10     5.1   Inspection by Alliqua 10 5.2   Disputes Over Manufactured Products
11 5.3   Replacement of Manufactured Products That Are Not Acceptable
Manufactured Products 11 5.4   Exclusive Remedy 11

 

i

 

 

ARTICLE 6  REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS 11     6.1   Mutual
Representations and Warranties 11 6.2   Additional CCT Representations and
Warranties 12 6.3   Alliqua Compliance with Applicable Law 12     ARTICLE 7 
INDEMNIFICATION AND INSURANCE 13     7.1   CCT Indemnification 13 7.2   Alliqua
Indemnification 13 7.3   Indemnification Procedures 13 7.4   Limitation of
Liability 13 7.5   Insurance 14     ARTICLE 8  CONFIDENTIAL INFORMATION 14    
8.1   Confidentiality 14 8.2   Authorized Disclosure 15 8.3   Return of
Confidential Information 15 8.4   Publicity; Terms of the Agreement;
Confidential Treatment 15 8.5   Technical Publication 16 8.6   Equitable Relief
17     ARTICLE 9  TERM AND TERMINATION 17     9.1   Term 17 9.2   Termination 17
9.3   Effects of Termination 18     ARTICLE 10  GENERAL PROVISIONS 19    
10.1   Entire Agreement; Amendment 19 10.2   Force Majeure 19 10.3   Notices 19
10.4   No Strict Construction; Headings 20 10.5   Assignment 20
10.6   Performance by Affiliates 21 10.7   Further Actions 21
10.8   Severability 21 10.9   No Waiver 21 10.10   Independent Contractors 21
10.11   Governing Law 22 10.12   Counterparts 22

 

ii

 

  

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

SUPPLY AGREEMENT

 

THIS SUPPLY AGREEMENT (this “Agreement”) dated as of April 10, 2014 (the
“Effective Date”), by and between Anthrogenesis Corporation, a Delaware
corporation doing business as Celgene Cellular Therapeutics (“CCT”), and
Alliqua, Inc., a Florida corporation (“Alliqua”). Alliqua and CCT may each be
referred to as a “Party” or collectively be referred to as the “Parties”.

 

PREAMBLE

 

A. CCT and Alliqua entered into a License, Marketing and Development Agreement
dated November 14, 2013 (the “License Agreement”), under which CCT granted
certain rights to Alliqua to market and sell the Licensed Products (as defined
therein); and

 

B. CCT and Alliqua entered into a Supply Agreement dated November 14, 2013 (the
“Biovance Supply Agreement”) for the supply of Biovance® and agreed to enter
into a supply agreement with respect to ECM products on substantially the same
terms as the Biovance Supply Agreement, except that the purchase price shall be
as set forth in Schedule 2.5 to the Biovance Supply Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, CCT and Alliqua agree as
follows:

ARTICLE 1
DEFINITIONS

 

All capitalized terms used but not defined herein shall have the meaning
ascribed to such term in the License Agreement. In addition to the terms defined
in the License Agreement and elsewhere in this Agreement, the following terms
have the meanings indicated:

 

“Acceptable Manufactured Products” has the meaning set forth in Section 5.1.

 

“Act” means the Federal Food, Drug, and Cosmetic Act, as amended, and the rules,
regulations, guidelines and requirements of the FDA as may be in effect from
time to time.

 

“Alliqua Indemnified Parties” has the meaning set forth in Section 7.1.

 

“Calendar Year” means each successive period of twelve (12) calendar months
commencing on January 1.

 

“CCT Indemnified Parties” has the meaning set forth in Section 7.2.

 

“CCT Recall Event” has the meaning set forth in Section 3.11.

 

 

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

“CFR” has the meaning set forth in Section 3.1.

 

“cGMPs” means current Good Manufacturing Practices as described in Part 820 of
Title 21 of the U.S. Code of Federal Regulations.

 

“ECM” means CCT’s extracellular matrix products derived from the human placenta.

 

“FDA” means the United States Food and Drug Administration or any successor
agency performing a similar function.

 

“Firm Order” means a written irrevocable firm purchase order for Manufactured
Products, which order shall include a delivery schedule specifying the required
delivery date and quantity for each Manufactured Product stock keeping unit
ordered and the location to which shipment of Manufactured Products is to be
delivered.

 

“Forecast” has the meaning set forth in Schedule 2.2, subsection (a)(ii).

 

“Long Range Forecast” has the meaning set forth in Schedule 2.2, subsection
(a)(i).

 

“Losses” has the meaning set forth in Section 7.1.

 

“Manufactured Product” means ECMs that have received Regulatory Clearance and/or
Approval.

 

“Permitted Subcontractor” has the meaning set forth in Section 2.1(d).

 

“Product Samples” has the meaning set forth in Section 3.4.

 

“Purchase Price” has the meaning set forth in Section 4.1.

 

“Quality Agreement” has the meaning set forth in Section 3.7.

 

“Required Manufacturing Changes” has the meaning set forth in Section 3.2.

 

“Term” has the meaning set forth in Section 9.1.

 

“Third Party Claims” has the meaning set forth in Section 7.1.

 

 

ARTICLE 2
SUPPLY OF MANUFACTURED PRODUCTS

 

2.1 Sale and Purchase of Manufactured Products.

 

(a) Subject to the terms and on the conditions set forth in this Agreement, as
soon as reasonably practicable after the date that CCT obtains Regulatory
Clearance and/or Approval in the United States for an ECM, CCT shall supply and
sell to Alliqua, and Alliqua shall purchase from CCT, Alliqua’s entire
requirements of Manufactured Products, in finished form and final packaging, for
exploitation in the Territory under the License Agreement. The form and
packaging of any Manufactured Products shall be in accordance with such
specifications for such Manufactured Product (the “Specifications”) that are
hereafter agreed to by the Parties. As soon as reasonably practicable after the
Effective Date, the Parties shall endeavor in good faith to agree in writing
upon the Specifications. For purposes of the immediately preceding sentence,
neither Party may propose specifications that (i) would conflict with the
specifications comprising a part of CCT’s application for Regulatory Clearance
and/or Approval of such Manufactured Product, or (ii) would materially increase
the documented cost of manufacturing finished form of Manufactured Product
and/or the documented cost of final packaging of such Manufactured Product.
Following the date that CCT obtains Regulatory Clearance and/or Approval in the
United States for an ECM, the Parties will agree to any changes to the
Specifications that are necessary in order for the Specifications for such ECM
to not conflict with the applicable Regulatory Clearance and/or Approval.

 

-2-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(b) CCT shall manufacture, store at its facility, and test all finished
Manufactured Products or cause the same to be manufactured, stored at the
manufacturing facility, and tested, in conformity with the applicable
Specifications for such Manufactured Product and in compliance with all
applicable Law, including cGMPs, and the terms and conditions of this Agreement
and the Quality Agreement. CCT’s responsibility for finished packaging of the
Manufactured Product will include supply to Alliqua of the Manufactured Products
in finished packaging (including (i) sterile pouch inner packaging, with the
appropriate labels affixed to such inner packaging (such pouch inner packaging
and labeling as reasonably determined by CCT (following consultation with, and
taking into account input from, the JSC) in compliance with applicable Law and
Regulatory Clearance and/or Approval), (ii) outer cartons and outer carton
labeling and (iii) package inserts) all as further detailed in the applicable
Specifications, with tracking letters to the extent required under applicable
Law . For the avoidance of doubt, except as provided in Section 2.1(c) below,
CCT will not charge Alliqua any amounts for such packaging that are in addition
to the Purchase Price.

 

(c) Alliqua either will: (i) provide CCT, at Alliqua’s cost, with the outer
cartons for the Manufactured Product finished packaging (the “Outer Cartons”) or
(ii) direct CCT to procure the Outer Cartons from a supplier designated by
Alliqua. If Alliqua directs CCT to procure the Outer Cartons, then the per unit
cost charged by the Outer Carton supplier will be added to the Purchase Price,
without markup, for each Manufactured Product. In addition, Alliqua, at its
cost, will provide CCT with all outer carton labels, package inserts and, to the
extent required, preprinted tracking letters, in each case for CCT to include in
the finished Manufactured Products. Alliqua also shall be responsible for
providing CCT with all required artwork to be used in connection therewith.

 

(d) Subject to any legal requirements under applicable Law, CCT may, at its sole
option, engage or use subcontractors and suppliers that it reasonably believes
are qualified to perform some or all of CCT’s obligations under this Agreement
(each, a “Permitted Subcontractor”).

 

(e) Without limiting the foregoing, all Permitted Subcontractors shall be
subject to the applicable terms and conditions of this Agreement and the Quality
Agreement and no agreement with any Permitted Subcontractor shall release CCT
from any of its obligations under this Agreement or the Quality Agreement. CCT
shall remain responsible for any services performed by such Permitted
Subcontractor to the same extent as if it had performed the obligations itself.

 

-3-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(f) For the purposes of clarity, nothing in this Agreement shall provide a right
of reference to support any filing by Alliqua or an Alliqua Affiliate with the
FDA for any product other than the Manufactured Products or to support any
similar filing with another Governmental Authority in or out of the Territory.

 

2.2 Forecasts; Firm Orders. The Parties shall comply with the provisions of
Schedule 2.2 to this Agreement with respect to the matters set forth therein.

 

2.3 Shipment and Delivery.

 

(a) CCT shall deliver to Alliqua the Manufactured Products (in finished form and
final packaging) ordered pursuant to a Firm Order by the required delivery dates
therefor EXW (Incoterms 2010) CCT’s designated facility in the United States.
For purposes of clarity, Alliqua bears all risk and costs from the time Alliqua
or its carrier picks up the Manufactured Products at CCT’s designated facility
in the United States and CCT has no obligation to load the Manufactured Products
or clear them for export.

 

(b) CCT shall package Manufactured Products for shipment in accordance with
practices that are customary and reasonable in the industry with respect to
similar products and comply with applicable Law, unless otherwise specified in
writing by Alliqua at least ten (10) Business Days prior to such shipment, in
which event CCT shall package Manufactured Products for shipment in accordance
with such instructions and any commercially reasonable, documented actual
external costs incurred by CCT (without markup) on account of the shipping
packaging changes requested by Alliqua shall be promptly reimbursed by Alliqua.

 

(c) Prior to shipment, CCT shall perform release testing for the Manufactured
Product pursuant to the Specifications, cGMPs and the Quality Agreement.

 

2.4 Alliqua Right to Manufacture.

 

(a) If CCT terminates this Agreement pursuant to Section 9.2(a), or Alliqua
terminates this Agreement pursuant to Section 9.2(b), (c) or (d), then, for so
long as Alliqua has the right to Commercialize the Manufactured Products in the
Territory under the License Agreement, Alliqua or any person or entity
designated by Alliqua (including an Affiliate of Alliqua) may, following notice
to CCT, manufacture, store at its facility, and test Alliqua’s requirements of
the Manufactured Products for Commercialization in the Field in the Territory in
accordance with the License Agreement.

 

(b) If Alliqua elects to manufacture, store, and test Alliqua’s requirements of
the Manufactured Products in accordance with Section 2.4(a), CCT shall cooperate
with and assist Alliqua or any person or entity designated by Alliqua (including
an Affiliate of Alliqua) in transferring the processes for manufacturing,
storing and testing the Manufactured Product to Alliqua or any person or entity
designated by Alliqua (including an Affiliate of Alliqua).

  

-4-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

ARTICLE 3
REGULATORY AND QUALITY MATTERS

 

3.1 Regulatory Responsibility. Subject to the terms of this Agreement and the
License Agreement, all matters in the Territory regarding obtaining and
supporting Regulatory Clearance and/or Approval of the Manufactured Products,
and manufacturing and testing of the Manufactured Products in compliance with
the applicable Specifications for the Manufactured Product and applicable Law
(including cGMPs), shall be the responsibility of, and shall remain under the
control of CCT. Except as set forth in Section 3.2 below, any costs or expenses
required to comply with CCT’s obligations under this Section 3.1 shall be borne
by [****]. Each Party shall be registered with the FDA’s Center for Biologics
Evaluation and Research pursuant to 21 Code of Federal Regulations (“CFR”) Part
1271, as and when their activities with respect to Manufactured Products require
such registration. Each Party shall promptly (within three (3) Business Days)
provide the other Party with copies of all communications received from any
Regulatory Authority concerning the Manufactured Products which directly or
indirectly affect or relate to the manufacturing, storage, testing, packaging or
labeling thereof, and any filings that directly or indirectly affect or relate
to the manufacturing, storage, testing, packaging or labeling of the
Manufactured Products to be made to any such agency for prior review and comment
at least five (5) Business Days prior to such submission. Each Party shall
provide notice to the other Party of meetings with any Regulatory Authority,
whether via electronic means, in person, or otherwise, which affect or relate to
the manufacturing, storing, testing, packaging or labeling of the Manufactured
Products. CCT will require each Permitted Subcontractor to keep CCT and Alliqua
fully and promptly advised of any inspections, inspectional observations and
other communications and interactions between such Permitted Subcontractor and
any Regulatory Authority which may directly or indirectly affect or relate to
the manufacturing, storage, testing, packaging or labeling of any Manufactured
Products. In the event of any inconsistency between the provisions of this
Section 3.1 and the provisions of the License Agreement, the provisions of the
License Agreement shall control.

 

3.2 Change Control. CCT and Alliqua shall cooperate in timely making any and all
changes to the Specifications or manufacturing processes that are required by
applicable Law (collectively, “Required Manufacturing Changes”). The
commercially reasonable, documented costs attributable to the Required
Manufacturing Change, including the cost of a reasonable quantity (in light of
the Forecasts submitted by Alliqua) of raw materials, work-in-process,
Manufactured Products and packaging materials rendered obsolete as a result of
any such Required Manufacturing Changes, shall be borne [****].

 

3.3 Records. CCT shall, and shall cause its Affiliates and each Permitted
Subcontractor to, keep appropriate accounts, notes, data and records of the work
performed under this Agreement in accordance with applicable Law, including
cGMPs, and the terms and conditions of this Agreement and the Quality Agreement.
CCT shall provide Alliqua with a copy of a certificate of analysis with each
batch of Manufactured Products delivered to Alliqua, as set forth in the Quality
Agreement.

 

-5-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

3.4 Testing. CCT shall be solely responsible for (a) taking and maintaining
quality control samples of all Manufactured Products delivered to Alliqua
(collectively, the “Product Samples”), and (b) testing Product Samples, in each
case, in accordance with the Quality Agreement. CCT shall promptly provide
Alliqua data resulting from testing related to the Product Samples for
distribution in the Territory as such information becomes available, including
any discovery of any negative or adverse trending in testing data.

 

3.5 Regulatory Inquiries. Without limiting any provision of the License
Agreement, upon being contacted (and, in the case of CCT, upon any Permitted
Subcontractor being contacted) by any Regulatory Authority for any regulatory
purpose pertaining to this Agreement or to the Manufactured Products, including
notice of the initiation of any inquiries, notices or inspection activity by any
such agency, a Party shall immediately notify the other Party and provide the
other Party with (a) a reasonable description of any such inquiries and related
documentation, (b) an opportunity to advise and comment with respect thereto and
(c) if appropriate, an opportunity to participate with respect thereto to the
extent such matters relate to the Manufactured Products in the Territory.

 

3.6 Notice of Regulatory Inspections. Each Party shall (a) advise the other
Party of any requests by any Regulatory Authority (including, in the case of
CCT, any such requests made to a Permitted Subcontractor) for any inspections
with respect to the manufacturing, storing, testing, packaging and/or labeling
of Manufactured Products, (b) provide the other Party with copies of any
correspondence related thereto, and, to the extent it (or, in the case of CCT,
by a Permitted Subcontractor) becomes aware of the results, observations or
outcome of any inspections or audits of the facilities or operations involved in
the manufacture, storage, testing, packaging and/or labeling of the Manufactured
Products conducted by any Regulatory Authority, including providing the other
Party an opportunity to advise and comment with respect to any correspondence to
be provided by such Party (or, in the case of CCT, by a Permitted Subcontractor)
to the applicable agency, and (c) notify the other Party of any such information
as it relates to the Manufactured Products in the Territory within three (3)
Business Days of obtaining the information.

 

3.7 Quality Agreement. Within sixty (60) Business Days after the Effective Date,
CCT and Alliqua shall negotiate in good faith the terms of, and enter into, a
reasonable and customary quality agreement (the “Quality Agreement”). The
Quality Agreement shall include provisions with respect to, among other things,
release testing, change control procedures with respect to the Specifications
and the manufacturing processes for the Manufactured Products, stability
testing, recalls of any Manufactured Products, and record retention requirements
with respect to recalls. In the event of any conflict between the terms of the
Quality Agreement and the terms of this Agreement, the terms of the Quality
Agreement shall govern.

 

-6-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

3.8 Quality Audits.

 

(a) Upon reasonable advance notice and during reasonable business hours, Alliqua
shall have the right to inspect and audit those portions of CCT’s and its
Affiliates’ and its Permitted Subcontractors’ facilities in which the
Manufactured Products are manufactured, stored or tested, to ascertain
compliance with cGMPs, applicable Law, and the terms and conditions of this
Agreement and the Quality Agreement; provided, however, that (i) Alliqua’s
representatives shall follow all security and facility access procedures as
reasonably required by CCT or its Affiliate or Permitted Subcontractor, as
applicable, and (ii) Alliqua may not exercise its right under this Section
3.8(a) more than once in any twelve (12)-month period (unless such inspection
and audit reveals a material compliance issue, in which event Alliqua shall have
the right to conduct a follow-up inspection and audit to verify that such issue
has been remedied). CCT shall use commercially reasonable efforts to promptly
resolve, and to cause its Affiliates and its Permitted Subcontractors to
promptly resolve, any quality issues raised by any inspections and audits of
their respective facilities.

 

(b) Upon reasonable advance notice and during reasonable business hours, CCT
shall have the right to inspect and audit (i) those portions of Alliqua’s
facilities in which the Manufactured Products are stored, handled or labeled and
(ii) if Alliqua elects to manufacture, store, and test Alliqua’s requirements of
the Manufactured Products or designate another person or entity to manufacture,
store, and test Alliqua’s requirements of the Manufactured Products, in
accordance with Section 2.4(a), those portions of Alliqua’s facilities or those
of its designated Person, as the case may be, in which the Manufactured Products
are manufactured, stored, handled or labeled, in each case, to ascertain
compliance with cGMPs, applicable Law, and the terms and conditions of this
Agreement and the Quality Agreement; provided, however, that (i) CCT’s
representatives shall follow all security and facility access procedures as
reasonably required by Alliqua, as applicable, and (ii) CCT may not exercise its
right under this Section 3.8(a) more than once in any twelve (12)-month period
(unless such inspection and audit reveals a material compliance issue, in which
event CCT shall have the right to conduct a follow-up inspection and audit to
verify that such issue has been remedied). Alliqua shall use commercially
reasonable efforts to promptly resolve any quality issues raised by any
inspections and audits of its facilities.

 

(c) Except as otherwise set forth in this Agreement, each Party shall, at its
sole cost and expense, maintain in full force and effect all necessary licenses,
approvals, permits and other authorizations required by applicable Law to carry
out its duties and obligations under this Agreement and the Quality Agreement.

 

3.9 Intentionally Omitted.

 

3.10 Cooperation. The Parties will cooperate in good faith in responding to any
Regulatory Authority inquiry or in making any report to the Regulatory Authority
with respect to Manufactured Products. Notwithstanding anything to the contrary
in this Agreement (and without limiting CCT’s obligation under the License
Agreement to obtain, support and maintain Regulatory Clearances and/or
Approvals), CCT will have final authority for regulatory decisions and
responsibility for all communications with any Regulatory Authority with respect
to obtaining or maintaining Regulatory Approval of the Manufactured Products.

 

-7-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

3.11 Recalls. CCT and Alliqua will each notify the other Party promptly if it
becomes aware that a Manufactured Product is the subject of a recall or market
withdrawal that is mandated by a Regulatory Authority, and the Parties will
reasonably cooperate in the handling and disposition of such recall or market
withdrawal; provided, however, in the event of a disagreement as to any matters
related to any such recall or market withdrawal, other than the determination of
who will bear the costs as set forth in the immediately following sentences, CCT
will have the final authority with respect to any product recall or withdrawal
relating to Manufactured Products, including any recall or market withdrawal
that is not mandated by a Regulatory Authority. [****] will bear the cost of all
recalls or market withdrawals of Manufactured Products purchased by Alliqua
pursuant to this Agreement where such recall or market withdrawal is the direct
result of CCT’s or a Permitted Subcontractor’s [****] Recall Event”). [****]
will bear the cost of all recalls or market withdrawals of Manufactured Products
purchased by Alliqua pursuant to this Agreement where such recall or market
withdrawal is the direct result of Alliqua’s [****] Recall Event”). If a recall
or market withdrawal [****], then the costs of such recall or market withdrawal
will be [****] will bear the cost of all recalls or market withdrawals of
Manufactured Products purchased by Alliqua pursuant to this Agreement where the
recall or market withdrawal is [****]. Alliqua will maintain records of all
sales of Manufactured Product and all customers sufficient to adequately
administer a recall or market withdrawal for the longer of one (1) year after
termination or expiration of this Agreement or the period required by applicable
Law. Alliqua will, in all events and regardless of who bears the cost, be
responsible for administering the physical aspects of any recalls or market
withdrawals with respect to the Manufactured Products, provided, however, that
any reasonable external costs and expenses incurred by Alliqua relating to the
recall or market withdrawal (including, but not limited to reasonable recall
destruction costs) will be allocated between the Parties as set forth above in
this Section. Any revenue attributable to Manufactured Products held or sold by
Alliqua (or its designee) that is subject to a recall will be deducted from Net
Sales for purposes of the License. In the event of any recall, if requested by
Alliqua, CCT will provide Manufactured Products to Alliqua to replace the
recalled Manufactured Products and, to the extent the recalled Manufactured
Products were previously paid for by Alliqua, the cost of such replacement
Manufactured Products shall be allocated between the Parties as set forth above
in this Section.

 

3.12 Complaints. Alliqua will collect complaint files for the Manufactured
Products in accordance with the provisions of the Quality Agreement.
Manufactured Products complaint reports received by Alliqua will be sent to CCT
at [****] within twenty-four (24) hours after receipt of the complaint by
Alliqua. Alliqua and CCT will notify each other of any Manufactured Product
complaints made by customers that will or could require a report of an “adverse
reaction” to the FDA pursuant to 21 CFR 1271.350, and will thereafter reasonably
cooperate with each other relative to any investigation or inquiry that may be
initiated by FDA with respect thereto. The complaint handling obligations of the
Parties will be detailed further within the Quality Agreement and/or the Safety
Data and Exchange Agreement.

 

-8-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

3.13 Warning Letters. In the event that either Party (or, in the case of CCT,
any Permitted Subcontractor) receives a warning letter from the FDA or the
equivalent from any other Governmental Authority in connection with the
Manufactured Product, such Party will notify the other Party promptly, and in
any event within twenty four (24) hours (to the extent legally permitted) after
receiving such warning letter.

 

3.14 Inquiries from Health Care Professionals. CCT shall provide reasonable
assistance to Alliqua in its preparation and filing with appropriate Regulatory
Authorities related to reimbursement and health care insurance filings required
for the marketing and distribution of Manufactured Products in the Territory by
Alliqua.

 

3.15 Debarment. Neither Party shall use any employee or consultant (or, in the
case of CCT, any Permitted Subcontractor or employees or consultants thereof)
who has been debarred by any Regulatory Authority, or, to such Party's
knowledge, is the subject of debarment proceedings by a Regulatory Authority.
Each Party shall notify the other Party promptly upon becoming aware that any of
its employees or consultants (or, in the case of CCT, any Permitted
Subcontractor or employees or consultants thereof) has been debarred or is the
subject of debarment proceedings by any Regulatory Authority.

 

3.16 Additional Covenants of Alliqua. Alliqua shall:

 

(a) discharge its obligations pursuant to this Agreement in accordance with all
applicable Laws, including those enforced by the FDA (including compliance with
cGMP);

 

(b) maintain the Manufactured Products pending sale to its customers in a
facility that is properly equipped to store such Manufactured Products in
accordance with the applicable Manufactured Product labeling; and

 

(c) comply in all respects with Article 3 hereof and the Quality Agreement and
the Safety Data and Exchange Agreement.

 

 

 

ARTICLE 4
PRICE AND PAYMENT TERMS

 

4.1 Purchase Price.

 

(a) For all Manufactured Products ordered pursuant to Firm Orders by Alliqua at
any time, Alliqua shall pay CCT a purchase price (“Purchase Price”) for each
conforming quantity of Manufactured Product delivered hereunder in accordance
with the terms set forth in Schedule 4.1 to this Agreement.

 

(b) If at any time during the Term, CCT notifies Alliqua in writing that CCT has
incurred an increase in the costs associated with manufacturing the Manufactured
Products, the Parties shall promptly negotiate in good faith an increase in the
Purchase Price to account for such increase in costs; provided, however, that if
the Parties fail to reach agreement on any such price increase, the resolution
of such disagreement shall be governed by the provisions of Article 13 of the
License Agreement.

 

-9-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

4.2 Taxes. The Purchase Price and other amounts payable by Alliqua to CCT
pursuant to this Agreement shall not be reduced on account of any taxes unless
required by applicable Law. CCT alone shall be responsible for paying any and
all taxes (other than any withholding taxes required by applicable Law to be
paid by Alliqua) levied on account of, or measured in whole or in part by
reference to, any payments it receives from Alliqua.

 

4.3 Freight and Insurance. In addition to the Purchase Price, for the purposes
of clarity, Alliqua shall pay all actual freight and insurance expenses incurred
by Alliqua in connection with the sale and shipment of the Manufactured
Products.

 

4.4 Payments.

 

(a) Upon each delivery of Manufactured Products, CCT shall promptly submit an
invoice to Alliqua. All invoices and payments for Manufactured Products shall be
in United States dollars. Alliqua shall pay each invoice (except for any amounts
disputed by Alliqua in good faith) within thirty (30) days after receipt
thereof.

 

(b) If an inconsistency between any invoice, purchase order, purchase order
release, confirmation, acceptance or similar document and this Agreement exists,
the terms of this Agreement shall control.

 

(c) Payment due to CCT shall be paid in United States dollars by wire transfer
to an account designated in writing by CCT.

 

4.5 Interest Charges. If CCT does not receive payment of any sum due to it on or
before the due date, simple interest shall thereafter accrue on the sum due
until the date of payment at the rate of [****] per month or, if less, the
maximum rate allowable by applicable Law.

 

4.6 Pricing. All resale prices of Manufactured Products shall be reviewed by the
JSC and Alliqua shall consider in good faith any comments of the JSC. For
purposes of clarity, Alliqua shall have final discretion with respect to resale
prices of the Manufactured Products during the Term, including resale price
increases and decreases and the timing thereof.

 

 

ARTICLE 5
INSPECTION OF MANUFACTURED PRODUCTS

 

5.1 Inspection by Alliqua. Alliqua may inspect and analyze the Manufactured
Products delivered to Alliqua for purposes of determining whether the
Manufactured Products meet the applicable Specifications at the time of delivery
thereof (such Manufactured Product, “Acceptable Manufactured Products”). Alliqua
shall notify CCT in writing within thirty (30) days after the date of delivery
to Alliqua (or within thirty (30) days after discovery that any Manufactured
Product is not Acceptable Manufactured Products for reasons that could not
reasonably have been detected by Alliqua’s customary inspection on delivery) of
any Manufactured Product or portion thereof which Alliqua is returning because
it is not an Acceptable Manufactured Product, including documentation of the
reasons therefor. If CCT does not receive such notice within such thirty
(30)-day period, the shipped Manufactured Products will be deemed accepted as
Acceptable Manufactured Products.

 

-10-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

5.2 Disputes Over Manufactured Products. CCT shall have a reasonable opportunity
not to exceed thirty (30) days from the date of receipt of the notice described
in Section 5.1 to inspect and/or test such Manufactured Product that Alliqua
claims is not an Acceptable Manufactured Product. If CCT, after good faith
consultation with Alliqua, disputes any determination by Alliqua that a
Manufactured Product is not an Acceptable Manufactured Product, then
representative samples of such Manufactured Product shall be forwarded to an
independent Third Party laboratory jointly selected by CCT and Alliqua, in their
reasonable discretion, for analysis, which analysis shall be performed in
compliance with industry standards and applicable Law. The findings of such
Third Party laboratory regarding whether the Manufactured Product was an
Acceptable Manufactured Product shall be binding upon the Parties. The cost of
such analysis by such Third Party laboratory shall be borne by the Party whose
analysis was not substantiated by the findings of such Third Party laboratory.

 

5.3 Replacement of Manufactured Products That Are Not Acceptable Manufactured
Products. CCT shall, at Alliqua’s option, either replace any Manufactured
Product order or portion thereof which is not an Acceptable Manufactured Product
as soon as reasonably practicable at CCT’s cost and expense, including shipping
costs, or promptly refund to Alliqua the payments made for such returned
Manufactured Products (including Alliqua’s shipping costs). At the sole option
of CCT, said Manufactured Products may be returned to CCT, at CCT’s expense
including shipping costs, or destroyed in an environmentally acceptable manner,
in accordance with applicable Law, at CCT’s expense. CCT will not, however,
replace any Manufactured Product which fails or ceases to conform to the
Specifications or which is unsalable, in each case, as a result of improper
storage, transport or other mishandling or other event after the Manufactured
Product has been delivered to Alliqua, Alliqua’s designated courier or other
Alliqua designee.

 

5.4 Exclusive Remedy. The sole and exclusive remedy available to Alliqua in
connection with Manufactured Products that are not Acceptable Manufactured
Products shall be replacement of such Manufactured Product by CCT in accordance
with Section 5.3 above. Notwithstanding the immediately preceding sentence,
Manufactured Products that are not Acceptable Manufactured Products shall be
deemed not to have been delivered for purposes of Section 9.2(b).

 

 

ARTICLE 6
REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS

 

6.1 Mutual Representations and Warranties. Each Party represents and warrants to
the other Party as of the Effective Date as follows:

 

-11-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(a) It is a corporation duly organized, validly existing and in good standing
under the laws of the State of its incorporation, with the requisite legal
authority to own and use its properties and assets and to carry on its business
as currently conducted.

 

(b) It has the requisite corporate authority to enter into and to consummate the
transactions contemplated by this Agreement and otherwise to carry out its
obligations hereunder. The execution and delivery of this Agreement by it and
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on its part and no further consent or action is
required by it, by its Board of Directors or by its stockholders.

 

(c) This Agreement has been duly executed by it and is the valid and binding
obligation of the Company enforceable against it in accordance with its terms,
except (i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, and (ii) as limited by
laws relating to the availability of specific performance, injunctive relief or
other equitable remedies.

 

6.2 Additional CCT Representations and Warranties. CCT represents and warrants
to Alliqua that at the time each Manufactured Product is delivered to Alliqua
such Manufactured Product: (a) will meet the Specifications therefor; (b) will
have been manufactured, stored and handled at CCT’s facility, and tested in
accordance with the applicable Law, Regulatory Clearances and/or Approvals,
Specifications and cGMPs; (c) will not be (i) adulterated, or (ii) manufactured,
stored or handled at CCT’s facility, or tested in a manner that violates the
Act, or any other applicable Law; (d) will pass to Alliqua free and clear of any
security interest, lien or other encumbrances and (e) will have a remaining
shelf life of no less than the Minimum Shelf Life (as defined below). Promptly
following Regulatory Clearance and/or Approval, the Parties will discuss in good
faith at the JSC and agree in writing on a commercially reasonable minimum
remaining shelf life that the Manufactured Products will have upon delivery to
Alliqua (the “Minimum Shelf Life”).

 

6.3 Alliqua Compliance with Applicable Law. Alliqua shall at all times: (a)
handle, warehouse, store, label, package, market, sell, distribute and otherwise
dispose of the Manufactured Products in the Territory in compliance with all
applicable Law, Regulatory Clearances and/or Approvals, Specifications and
cGMPs; and (b) except for any Regulatory Clearances and/or Approvals that CCT is
responsible for maintaining, maintain all applicable licenses, registrations and
permits necessary to take control of, market, sell and distribute such
Manufactured Products in the Territory. Alliqua will not market any Manufactured
Product in any manner which is inconsistent with its labeling or with applicable
Law, or otherwise make any false or misleading representations to customers or
others regarding the Manufactured Product.

 

-12-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

ARTICLE 7
INDEMNIFICATION AND INSURANCE

 

7.1 CCT Indemnification. Subject to the procedures set forth in Section 7.3, CCT
shall indemnify Alliqua, its Affiliates and its and their respective directors,
officers, employees and agents (the “Alliqua Indemnified Parties”), and defend
and save each of them harmless, from and against any and all claims, lawsuits,
losses, damages, liabilities, penalties, costs and expenses (including
reasonable attorneys’ fees and disbursements) (collectively, “Losses”) incurred
by any of them in connection with any and all suits, investigations, claims or
demands of Third Parties (collectively, “Third Party Claims”) in connection
with, arising from or occurring as a result of: (a) the breach or inaccuracy of
any representation or warranty made by CCT in this Agreement or the Quality
Agreement; (b) the breach by CCT of any of its obligations under this Agreement
or the Quality Agreement; or (c) any manufacturing defect of the Manufactured
Products manufactured by CCT or on its behalf; in each case except for those
Losses for which Alliqua has an obligation to indemnify any CCT Indemnified
Parties pursuant to Section 7.2 of the License Agreement.

 

7.2 Alliqua Indemnification. Subject to the procedures set forth in Section 7.3,
Alliqua shall indemnify CCT, its Affiliates and its and their respective
directors, officers, employees and agents (the “CCT Indemnified Parties”), and
defend and save each of them harmless, from and against any and all Losses
incurred by any of them in connection with any Third Party Claims in connection
with, arising from or occurring as a result of: (a) the breach or inaccuracy of
any representation or warranty made by Alliqua in this Agreement or the Quality
Agreement; (b) the use of any and all Promotional Materials; (c) the breach by
Alliqua of any of its obligations under this Agreement or the Quality Agreement;
(d) any Manufactured Products manufactured by Alliqua or on its behalf by any
Person other than CCT; or (e) any defect in the design or manufacture of those
materials provided by Alliqua to CCT pursuant to Section 2.1(c), in each case
except for those Losses for which CCT has an obligation to indemnify any Alliqua
Indemnified Parties pursuant to Section 7.1 or the License Agreement.

 

7.3 Indemnification Procedures. The Party claiming indemnity under this Article
7 (the “Indemnified Party”) shall give written notice to the Party from whom
indemnity is being sought (the “Indemnifying Party”) promptly after learning of
such Claim. The Indemnifying Party shall have the right to assume and conduct
the defense of the Claim with counsel of its choice, and the Indemnified Party
may participate in and monitor such defense with counsel of its own choosing at
its sole expense. The Indemnified Party shall provide the Indemnifying Party
with reasonable assistance, at the Indemnifying Party's expense, in connection
with the defense of the Claim for which indemnity is being sought. Each Party
shall not settle or compromise any Claim without the prior written consent of
the other Party, which consent shall not be unreasonably withheld, delayed or
conditioned. If the Parties cannot agree as to the application of the foregoing
Sections 7.1 and 7.2, each may conduct separate defenses of the Claim, and each
Party reserves the right to claim indemnity from the other in accordance with
this Article 7 upon the resolution of the underlying Claim.

 

-13-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

7.4 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL,
CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES, INCLUDING LOST
PROFITS, ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT EXCEPT FOR
FRAUD OR WILLFUL MISCONDUCT, BREACH OF EITHER PARTY'S CONFIDENTIALITY
OBLIGATIONS, A PARTY'S INDEMNIFICATION OBLIGATIONS, A BREACH OF EACH PARTY'S
EXCLUSIVITY OBLIGATIONS OR A BREACH OF THE LICENSE GRANTS, REGARDLESS OF ANY
NOTICE OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT ANY DAMAGES
CLAIMED BY OR PAID TO A THIRD PARTY IN A THIRD PARTY ACTION SHALL NOT BE
CONSIDERED SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES FOR
PURPOSES OF THIS AGREEMENT.

 

7.5 Insurance. Each Party shall, at all times during the Term of this Agreement
and for five (5) years thereafter, obtain and maintain at its own expense the
following types of insurance, with limits of liability not less than those
specified below:

 

(a) Commercial general liability insurance against claims for bodily injury and
property damage which shall include contractual coverage and product liability
coverage, with limits of not less than $[****] per occurrence and in the
aggregate. The other Party, its officers, directors, representatives and agents
shall be named as additional insureds.

 

(b) Workers compensation and employers' liability with limits to comply with the
statutory requirements of the state(s) in which the Agreement is to be
performed. The policy shall include employers' liability for not less than
$[****] per accident.

 

All policies shall be issued by insurance companies with an A.M. Best's rating
of Class A-:V (or its equivalent) or higher status. Each Party shall deliver
certificates of insurance evidencing coverage to the other Party promptly after
the execution of this Agreement and annually thereafter. All policies provided
for herein shall expressly provide that such policies shall not be cancelled,
terminated or altered without at least thirty (30) days prior written notice to
the insured Party, and each insuring Party shall immediately notify the insured
Party in the event that a policy provided for herein is cancelled, terminated or
altered.

 

 

ARTICLE 8
CONFIDENTIAL INFORMATION

 

8.1 Confidentiality. During the Term and for a period of five (5) years
thereafter, each Party shall maintain all Confidential Information of the other
Party in trust and confidence and shall not, without the written consent of the
other Party, disclose any Confidential Information of the other Party to any
Third Party or use any Confidential Information of the other Party for any
purpose other than as necessary in connection with the exercise of rights or
discharge of obligations under this Agreement. The confidentiality obligations
of this Section 8.1 shall not apply to Confidential Information to the extent
that the receiving Party can establish by competent evidence that such
Confidential Information: (a) is publicly known prior or subsequent to
disclosure without breach of confidentiality obligations by such Party or its
employees, consultants or agents; (b) was in such Party’s possession at the time
of disclosure without any restrictions on further disclosure; (c) is received by
such receiving Party, without any restrictions on further disclosure, from a
Third Party who has the lawful right to disclose it; or (d) is independently
developed by employees or agents of the receiving Party who had no access to the
disclosing Party’s Confidential Information.

 

-14-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

8.2 Authorized Disclosure. Nothing herein shall preclude a Party from disclosing
the Confidential Information of the other Party to the extent:

 

(a) such disclosure is reasonably necessary (i) for the filing or prosecuting of
Patents as contemplated by the License Agreement; (ii) to comply with the
requirement of Regulatory Authorities with respect to obtaining and maintaining
Regulatory Clearance and/or Approval (or any pricing and reimbursement
approvals) of any Manufactured Product; or (iii) for prosecuting or defending
litigations as contemplated by the License Agreement;

 

(b) such disclosure is reasonably necessary to its employees, agents,
consultants or contractors on a need-to-know basis for the sole purpose of
performing its obligations or exercising its rights under this Agreement;
provided that in each case, the disclosees are bound by written obligations of
confidentiality and non-use consistent with those contained in this Agreement;

 

(c) such disclosure is reasonably necessary to any bona fide potential or actual
investor, acquiror, merger partner, or other financial or commercial partner for
the sole purpose of evaluating an actual or potential investment, acquisition or
other business relationship; provided that in each case, the disclosees are
bound by written obligations of confidentiality and non-use consistent with
those contained in this Agreement;

 

(d) such disclosure is reasonably necessary to comply with applicable Laws,
including regulations promulgated by applicable security exchanges, a valid
order of a court of competent jurisdiction, administrative subpoena or order.

 

Notwithstanding the foregoing, in the event a Party is required to make a
disclosure of the other Party’s Confidential Information pursuant to any of
Sections 8.2(a) through 8.2(d), such Party shall promptly notify the other Party
of such required disclosure and shall use reasonable efforts to obtain, or to
assist the other Party in obtaining, a protective order preventing or limiting
the required disclosure.

 

8.3 Return of Confidential Information. Promptly after the termination or
expiration of this Agreement for any reason, each Party shall return to the
other Party all tangible manifestations of such other Party’s Confidential
Information at that time in the possession of the receiving Party.

 

8.4 Publicity; Terms of the Agreement; Confidential Treatment.

 

(a) The Parties agree that the terms of this Agreement (including without
limitation any exhibits and schedules hereto) shall be considered Confidential
Information of each Party, subject to the special authorized disclosure
provisions set forth in Section 8.2 and this Section 8.4.

 

-15-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(b) If either Party desires to make a public announcement concerning the
material terms of this Agreement, such Party shall give reasonable prior advance
notice of the proposed text of such announcement to the other Party for its
prior review and approval (except as otherwise provided herein), such approval
not to be unreasonably withheld, conditioned or delayed. A Party commenting on
such a proposed press release shall provide its comments, if any, within three
(3) Business Days after receiving the press release for review. In addition, to
the extent required by applicable Laws, including regulations promulgated by
applicable security exchanges, each Party shall have the right to make a press
release announcing the achievement of each milestone under this Agreement as it
is achieved, and the achievements of Regulatory Clearances and/or Approvals in
the Territory as they occur, subject to the other Party’s consent as to form and
substance of such announcement, which shall not be unreasonably withheld,
conditioned or delayed. In relation to the other Party’s review and approval of
such an announcement, such other Party may make specific, reasonable comments on
such proposed press release within the prescribed time for commentary, but shall
not withhold its consent to disclosure of the information that the relevant
milestone has been achieved and triggered a payment hereunder. Neither Party
shall be required to seek the permission of the other Party to repeat any
information regarding the terms of this Agreement that has already been publicly
disclosed by such Party, or by the other Party, in accordance with this Section
8.4, provided such information remains accurate as of such time.

 

(c) In addition, the Parties acknowledge that either or both Parties may be
obligated to file under applicable law and regulation a copy of this Agreement
with the USA Securities and Exchange Commission or similar stock exchange
authorities or other governmental authorities. Each Party shall be entitled to
make such a required filing; provided, however, that it requests confidential
treatment of the commercial terms and sensitive technical terms hereof and
thereof to the extent such confidential treatment is reasonably available to
such Party. In the event of any such filing, each Party shall provide the other
Party with a copy of this Agreement marked to show provisions for which such
Party intends to seek confidential treatment and shall reasonably consider and
incorporate the other Party’s comments thereon to the extent consistent with the
legal requirements, with respect to the filing Party, governing disclosure of
material agreements and material information that must be publicly filed.

 

8.5 Technical Publication. Neither Party may publish peer reviewed manuscripts
or give other forms of public disclosure such as abstracts and media
presentations (such disclosure collectively, for purposes of this Section 8.5,
“publication”), of results of studies carried out under this Agreement, without
the opportunity for prior review by the other Party, except to the extent
required by applicable Laws. A Party seeking publication shall provide the other
Party the opportunity to review and comment on any proposed publication that
relates to the Manufactured Product at least thirty (30) days (or at least ten
(10) days in the case of abstracts and media presentations) prior to its
intended submission for publication. The other Party shall provide the Party
seeking publication with its comments in writing, if any, within twenty (20)
days (or within five (5) days in the case of abstracts and media presentations)
after receipt of such proposed publication. The Party seeking publication shall
consider in good faith any comments thereto provided by the other Party and
shall comply with the other Party’s reasonable request to remove any and all of
such other Party’s Confidential Information from the proposed publication. In
addition, the Party seeking publication shall delay the submission for a period
up to sixty (60) days in the event that the other Party can demonstrate
reasonable need for such delay in order to accommodate the preparation and
filing of a patent application. If the other Party fails to provide its comments
to the Party seeking publication within such twenty (20) day period (or five (5)
day period, as the case may be), such other Party shall be deemed not to have
any comments, and the Party seeking publication shall be free to publish in
accordance with this Section 8.5 after the thirty (30) day period (or ten (10)
day period, as the case may be) has elapsed. The Party seeking publication shall
provide the other Party a copy of the publication at the time of the submission.
Each Party agrees to acknowledge the contributions of the other Party and its
employees in all publications as scientifically appropriate.

 

-16-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

8.6 Equitable Relief. Each Party acknowledges that its breach of Article 8 of
this Agreement may cause irreparable injury to the other Party for which
monetary damages may not be an adequate remedy. Therefore, each Party shall be
entitled to seek injunctive and other appropriate equitable relief to prevent or
curtail any actual or threatened breach of the obligations relating to
Confidential Information set forth in this Article 8 by the other Party. The
rights and remedies provided to each Party in this Article 8 are cumulative and
in addition to any other rights and remedies available to such Party at law or
in equity.

 

 

 

ARTICLE 9
TERM AND TERMINATION

 

9.1 Term. The term of this Agreement shall commence on the Effective Date and
shall continue until this Agreement is terminated pursuant to this ARTICLE 9
(the “Term”).

 

9.2 Termination. This Agreement may be terminated as follows:

 

(a) By CCT upon six months’ prior written notice to Alliqua.

 

(b) By Alliqua upon [****] prior written notice to CCT if, on at least [****]
occasions within any twelve (12) month period, CCT fails to deliver at least
[****]% of any Manufactured Products specified in a Firm Order conforming to the
provisions of Schedule 2.2, subsection (c) by the required delivery date
specified therein and in conformity with the applicable Specifications.

 

(c) By either Party immediately upon written notice to the other Party if the
other Party materially breaches its obligations under this Agreement and, after
receiving written notice identifying such material breach in reasonable detail,
fails to cure such material breach within sixty (60) days from the date of such
notice. If the alleged breaching Party disputes in good faith the existence or
materiality of a breach specified in a notice provided by the other Party in
accordance with this Section 9.2(c), and such alleged breaching Party provides
the other Party notice of such dispute within the applicable cure period, then
the non-breaching Party shall not have the right to terminate this Agreement
under this Section 9.2(c) unless and until an arbitrator, in accordance with
Article 13 of the License Agreement, has determined that the alleged breaching
Party has materially breached the Agreement and such breaching Party fails to
cure such breach within the applicable cure period (measured as commencing after
the arbitrator’s decision). It is understood and agreed that during the pendency
of such dispute, all of the terms and conditions of this Agreement shall remain
in effect and the Parties shall continue to perform all of their respective
obligations hereunder.

 

-17-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(d) To the extent permitted under applicable Laws, if at any time during the
Term of this Agreement, an Event of Bankruptcy (as defined below) relating to
either Party (the “Bankrupt Party”) occurs, the other Party (the “Non-Bankrupt
Party”) shall have, in addition to all other legal and equitable rights and
remedies available hereunder, the option to terminate this Agreement upon sixty
(60) days written notice to the Bankrupt Party. It is agreed and understood that
if the Non-Bankrupt Party does not elect to terminate this Agreement upon the
occurrence of an Event of Bankruptcy, except as may otherwise be agreed with the
trustee or receiver appointed to manage the affairs of the Bankrupt Party, the
Non-Bankrupt Party shall continue to make all payments required of it under this
Agreement as if the Event of Bankruptcy had not occurred, and the Bankrupt Party
shall not have the right to terminate any license granted herein. The term
“Event of Bankruptcy” means: (a) filing, in any court or agency pursuant to any
statute or regulation of any state or country, (i) a petition in bankruptcy or
insolvency, (ii) for reorganization or (iii) for the appointment of (or for an
arrangement for the appointment of) a receiver or trustee of the Bankrupt Party
or of its assets; (b) with respect to the Bankrupt Party, being served with an
involuntary petition filed in any insolvency proceeding, which such petition is
not dismissed within sixty (60) days after the filing thereof; (c) proposing or
being a party to any dissolution or liquidation when insolvent; or (d) making an
assignment for the benefit of creditors. Without limitation, the Bankrupt
Party’s rights under this Agreement shall include those rights afforded by 11
USAC. § 365(n) of the United States Bankruptcy Code (the “Bankruptcy Code”) and
any successor thereto. If the bankruptcy trustee of a Bankrupt Party as a debtor
or debtor-in-possession rejects this Agreement under 11 USAC. § 365(o) of the
Bankruptcy Code, the Non-Bankrupt Party may elect to retain its rights licensed
from the Bankrupt Party hereunder (and any other supplementary agreements
hereto) for the duration of this Agreement and avail itself of all rights and
remedies to the full extent contemplated by this Agreement and 11 USAC. § 365(n)
of the Bankruptcy Code, and any other relevant Laws..

 

(e) This Agreement shall automatically terminate upon expiration or termination
of the License Agreement or the termination of the License Agreement only with
respect to ECMs.

 

9.3 Effects of Termination.

 

(a) Upon termination of this Agreement for any reason, all submitted Firm Orders
for Manufactured Products shall be delivered and paid for in accordance with
Article 2.

 

(b) Termination or expiration of this Agreement for any reason shall be without
prejudice to any rights that shall have accrued to the benefit of a Party prior
to such termination or expiration.

 

(c) Section 3.11, this Section 9.3 and Articles 1, 4, 5, 6, 7, 8 and 10 shall
survive expiration or termination of this Agreement for any reason; Schedule
2.2, subsection (h) and Section 2.4 shall survive a termination of this
Agreement pursuant to Section 9.2(a) or (b); and, with respect to Firm Orders
submitted and/or filled after termination of this Agreement pursuant to Schedule
2.2, subsection (h), the provisions of this Agreement otherwise applicable to
the Manufactured Products that are the subject of such Firm Orders shall survive
termination of this Agreement.

 

 

-18-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

ARTICLE 10
GENERAL PROVISIONS

 

10.1 Entire Agreement; Amendment. This Agreement, together with the exhibits and
schedules hereto, which are hereby incorporated herein, represents the entire
agreement and understanding between the Parties with respect to its subject
matter and supersedes and terminates any prior and/or contemporaneous
discussions, representations or agreements, whether written or oral, of the
Parties regarding the subject matter hereto, and supersedes, as of the Effective
Date, all prior and contemporaneous agreements and understandings between the
Parties with respect to the subject matter hereof (including for the Prior CDA).
There are no covenants, promises, agreements, warranties, representations,
conditions or understandings, either oral or written, between the Parties other
than as are set forth in this Agreement. Amendments or changes to this Agreement
shall be valid and binding only if in writing and signed by duly authorized
representatives of the Parties.

 

10.2 Force Majeure. Both Parties shall be excused from the performance of their
obligations under this Agreement to the extent that such performance is
prevented by force majeure and the nonperforming Party promptly provides notice
of the prevention to the other Party. Such excuse shall be continued so long as
the condition constituting force majeure continues and the nonperforming Party
takes reasonable efforts to remove the condition. For purposes of this
Agreement, force majeure shall mean conditions beyond the control of the
Parties, including an act of God, war, civil commotion, terrorist act, labor
strike or lock-out, epidemic, failure or default of public utilities or common
carriers, destruction of production facilities or materials by fire, earthquake,
storm or like catastrophe, and failure of plant or machinery (provided that such
failure could not have been prevented by the exercise of skill, diligence, and
prudence that would be reasonably and ordinarily expected from a skilled and
experienced person engaged in the same type of undertaking under the same or
similar circumstances). If a force majeure persists for more than ninety (90)
days, then the Parties shall discuss in good faith the modification of the
Parties’ obligations under this Agreement in order to mitigate the delays caused
by such force majeure.

 

10.3 Notices. Any notice required or permitted to be given under this Agreement
shall be in writing, shall specifically refer to this Agreement, and shall be
addressed to the appropriate Party at the address specified below or such other
address as may be specified by such Party in writing in accordance with this
Section 10.3, and shall be deemed to have been given for all purposes (a) when
received, if hand-delivered or sent by confirmed facsimile or a reputable
courier service, or (b) five (5) Business Days after mailing, if mailed by first
class certified or registered airmail, postage prepaid, return receipt
requested.

 

-19-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

  If to CCT:   Anthrogenesis Corporation, d/b/a Celgene Cellular Therapeutics  
  Attn.: Chief Executive Officer     33 Technology Drive Warren,
NJ  07059-5148       Fax: [****]         With a copy to (which shall not
constitute notice):           Proskauer Rose LLP     Eleven Times Square     New
York, NY  10036     Attn: Robert A. Cantone, Esq.     Fax No.: (212) 969-2900  
and       Celgene Corporation     86 Morris Avenue     Summit, NJ 07901    
Attention: General Counsel     Fax: [****]         If to Alliqua:   Alliqua,
Inc.     2150 Cabot Boulevard West     Langhorne, Pennsylvania  19047    
Attention: Chief Executive Officer     Fax No.: [****]         With a copy to
(which shall not constitute notice):           Lowenstein Sandler LLP     65
Livingston Avenue     Roseland, New Jersey  07068     Attention: Michael Lerner,
Esq.     Fax No.: (973) 597-6395

 

 

10.4 No Strict Construction; Headings. This Agreement has been prepared jointly
by the Parties and shall not be strictly construed against either Party.
Ambiguities, if any, in this Agreement shall not be construed against any Party,
irrespective of which Party may be deemed to have authored the ambiguous
provision. The headings of each Article and Section in this Agreement have been
inserted for convenience of reference only and are not intended to limit or
expand on the meaning of the language contained in the particular Article or
Section. Except where the context otherwise requires, the use of any gender
shall be applicable to all genders, and the word “or” is used in the inclusive
sense (and/or). The term “including” as used herein means including, without
limiting the generality of any description preceding such term.

 

-20-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

10.5 Assignment. Neither Party may assign this Agreement without the prior
written consent of the other Party, such consent not to be unreasonably
withheld, conditioned or delayed; provided, however, that either Party may
assign this Agreement without the consent of the other Party, effective upon
written notice to the other Party thereof, to (i) an Affiliate of such Party,
provided that the Party hereunder who assigns this Agreement agrees in writing
to continue to be bound by and subject to the terms and conditions of this
Agreement and (ii) any Person who acquires all or substantially all of such
Party’s assets or that is the surviving entity in a merger, recapitalization,
combination or other similar transaction with such assigning Party and who
agrees in writing to be bound by and subject to the terms and conditions of this
Agreement. Further, CCT may assign without Alliqua’s consent its rights to
payments received under this Agreement. Any permitted assignment shall be
binding on the successors of the assigning Party. Any attempted or purported
assignment in violation of this Section 10.5 shall be null and void.

 

10.6 Performance by Affiliates. Each Party may discharge any obligations and
exercise any right hereunder through any of its Affiliates. Each Party hereby
guarantees the performance by its Affiliates of such Party’s obligations under
this Agreement, and shall cause its Affiliates to comply with the provisions of
this Agreement in connection with such performance. Any breach by a Party’s
Affiliate of any of such Party’s obligations under this Agreement shall be
deemed a breach by such Party, and the other Party may proceed directly against
such Party without any obligation to first proceed against such Party’s
Affiliate.

 

10.7 Further Actions. Each Party shall execute, acknowledge and deliver such
further instruments, and to do all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.

 

10.8 Severability. If any provision of this Agreement is found by a court of
competent jurisdiction to be unenforceable, then such provision shall be
construed, to the extent feasible, so as to render the provision enforceable,
and if no feasible interpretation would save such provision, it shall be severed
from the remainder of this Agreement. The remainder of this Agreement shall
remain in full force and effect, unless the severed provision is essential and
material to the rights or benefits received by either Party. In such event, the
Parties shall negotiate, in good faith, and substitute a valid and enforceable
provision or agreement that most nearly implements the Parties’ intent in
entering into this Agreement.

 

10.9 No Waiver. No provision of this Agreement can be waived except by the
express written consent of the Party waiving compliance. Except as specifically
provided for herein, the waiver from time to time by either Party of any of its
rights or its failure to exercise any remedy shall not operate or be construed
as a continuing waiver of same or of any other of such Party’s rights or
remedies provided in this Agreement.

 

10.10 Independent Contractors. For all purposes under this Agreement, Alliqua
and CCT and their respective Affiliates are independent contractors with respect
to each other, and shall not be deemed to be an employee, agent, partner or
legal representative of the other Party. This Agreement does not grant any Party
or its employees, consultants or agents any authority (express or implied) to do
any of the following without the prior express written consent of the other
Party: create or assume any obligation; enter into any agreement; make any
representation or warranty; serve or accept legal process on behalf of the other
Party; settle any claim by or against the other Party; or bind or otherwise
render the other liable in any way.

 

-21-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

10.11 Governing Law. This Agreement shall be governed by the laws of the state
of New York, without regard to its choice of law provisions that would require
the application of the laws of a different jurisdiction. The Parties hereby
irrevocably submit to the jurisdiction of the state and federal courts sitting
in the County and State of New York for the adjudication of disputes arising out
of or relating to this Agreement.

 

10.12 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute the same legal instrument. Facsimile or PDF execution
and delivery of this Agreement by any Party shall constitute a legal, valid and
binding execution and delivery of this Agreement by such Party. The Parties to
this document agree that a copy of the original signature (including an
electronic copy) may be used for any and all purposes for which the original
signature may have been used. The Parties agree they will have no rights to
challenge the use or authenticity of this document based solely on the absence
of an original signature.

 

 

[Signature page follows.]

 

-22-

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed
in duplicate, as of the Effective Date, by its duly authorized officer or
representative.

 

ANTHROGENESIS CORPORATION   ALLIQUA, INC.               By: /s/ Perry Karsen  
By: /s/ David Johnson   Name: Perry Karsen   Name:   David Johnson   Title:
Chief Executive Officer   Title: Chief Executive Officer  

 

 

 

 

 

[Signature Page to Supply Agreement]

 

 

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

SCHEDULE 2.2

 

(a) Alliqua shall submit to CCT as soon as practicable after the Effective Date,
and in any event not later than the thirtieth (30th) day after Regulatory
Clearance and/or Approval in the United States of an ECM, and thereafter no
later than the fifth (5th) Business Day of every month during the Term:

 

(i) a three (3) year rolling forecast (“Long Range Forecast”) organized by
Manufactured Product stock keeping unit and by quarterly periods, setting forth
the quantities of each Manufactured Product that Alliqua expects to purchase
from CCT during the three (3) years commencing with the beginning of said month,
and

 

(ii) a twelve (12)-month rolling forecast (“Forecast”) organized by Manufactured
Product stock keeping unit and by months, setting forth the quantities of each
Manufactured Product that Alliqua expects to purchase from CCT during the twelve
(12)-month period commencing with the beginning of said month.

 

(b) Alliqua shall make all Forecasts and Long Range Forecasts in good faith
given market and other information available to Alliqua. Each Forecast shall
constitute a binding commitment of Alliqua to purchase at least the percentages
of Manufactured Products set forth below pursuant to Firm Orders issued in
accordance with Subsection (c) below, notwithstanding any change in the quantity
of a Manufactured Product specified in a subsequent Forecast. Except as provided
in the preceding sentence, each Forecast shall be non-binding on Alliqua. Each
Long Range Forecast shall be non-binding on Alliqua. Alliqua shall be required
to submit Firm Orders to purchase at least that percentage of the quantity of
each of the Manufactured Products specified in the Forecast as follows:

 

Period of the Forecast Percentage of the aggregate amount of Manufactured
Products that Alliqua is required to submit Firm Orders for during such period
[****] [****] [****] [****] [****] [****]

 

 

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(c) Alliqua shall purchase Manufactured Products solely by Firm Orders for such
Manufactured Products. For a given month, CCT will accept Firm Orders for
quantities of Manufactured Products, provided such Firm Orders in the aggregate
do not exceed [****] of the quantity set forth in the binding portion of the
Forecast most recently submitted for such month; provided, however, that if,
with respect to any month, Alliqua orders any Manufactured Product in excess of
[****] of the quantity set forth in the binding portion of the Forecast most
recently submitted for such month, CCT shall make commercially reasonable
efforts to supply such excess up to [****] of the quantity set forth in the
binding portion of the Forecast most recently submitted for such month, but
shall not be liable for its failure to do so. Alliqua shall specify a delivery
date in each Firm Order that is at least sixty (60) days after the date on which
the Firm Order is submitted to CCT. CCT shall, within five (5) Business Days
after CCT receives each Firm Order submitted in accordance with the preceding
two sentences, accept in writing such Firm Order. Subject to any other term or
condition of this Agreement, Alliqua shall be obligated to purchase, and CCT
shall be obligated to deliver by the required delivery date set forth therein,
such quantities of each Manufactured Product as are set forth in each Firm
Order. If Alliqua requests changes to any Firm Order previously submitted by
Alliqua, including any increases or decreases in quantity of Manufactured
Products, required delivery date or form of Manufactured Product, CCT shall
provide Alliqua a good faith estimate of the anticipated costs of complying with
such request. If Alliqua approves such estimated costs in writing, CCT shall use
commercially reasonable efforts to comply with such changes but shall not be
liable for its failure to do so. In the event that CCT complies with any such
request, Alliqua shall reimburse CCT for its commercially reasonable, documented
costs incurred in complying with such request. Notwithstanding anything to the
contrary in this subsection (c), during the first six months of Manufactured
Product deliveries under this Agreement, CCT shall have the right to reasonably
restrict the maximum number of Units (by size) per month of Manufactured
Products that CCT shall be obligated to deliver to such quantities that are
agreed upon in writing by the Parties to be reasonably sufficient for the
commercial launch of the Manufactured Product, and during such six month period
CCT shall have no obligation to deliver, nor to accept any portion of a Firm
Order requiring it to deliver, more than such maximum number of Units (by size)
per month.

 

(d) CCT shall promptly notify Alliqua in writing if at any time CCT has reason
to believe that CCT will not be able to (i) fill a Firm Order for any
Manufactured Product in accordance with the delivery schedule specified therein
by Alliqua and pursuant to the terms and conditions of this Agreement and the
Quality Agreement, or (ii) supply Manufactured Products to Alliqua in
satisfaction of the most recent Forecast, which notice in either case shall
provide Alliqua with information on the extent of the expected shortfall of
supply. Upon such notice of a supply shortfall, or in any event upon CCT's
failure to satisfy, within the delivery time frame specified by Alliqua, a
portion of the Manufactured Products ordered by Alliqua in compliance with this
Agreement and the Quality Agreement, Alliqua and CCT will immediately meet and
work together in good faith to identify an appropriate resolution to the supply
shortfall. Any agreed resolution to the supply shortfall will be set forth in a
writing executed by both Parties. Compliance by CCT with this subsection (d)
shall not relieve CCT of any other obligation or liability under this Agreement,
including any obligation or liability under subsections (e) or (f) below.

 

(e) If CCT fails to deliver at least [****] of any Manufactured Products
specified in a Firm Order conforming to the provisions of Subsection (c) above
by the required delivery date specified therein and in conformity with the
applicable Specifications, Alliqua, at its option, may:

 

 

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

(i) cancel all or any portion of such Firm Order with respect to such
Manufactured Products, in which event Alliqua shall have no liability with
respect to the portion of such Firm Order so cancelled; or

 

(ii) accept late delivery of all or any portion of such Firm Order with respect
to such Manufactured Product, in which event the Purchase Price otherwise
payable by Alliqua with respect to all Manufactured Products delivered late and
accepted by Alliqua under such Firm Order shall be reduced by [****].

 

(f) If CCT fails to deliver at least [****] of any Manufactured Products
specified in a Firm Order conforming to the provisions of Subsection (c) above
by the required delivery date specified therein and in conformity with the
applicable Specifications, CCT shall pay to Alliqua any reasonable, documented
external expenses incurred by Alliqua resulting from CCT’s breach of its
obligation to deliver the full quantity of any Manufactured Product specified in
such Firm Order by the required delivery date specified therein. Notwithstanding
anything to the contrary in this Agreement, delivery by CCT of at least [****]
of the quantity ordered will be accepted by Alliqua in full satisfaction of
CCT’s obligation to supply a Firm Order. Should delivered quantities of
Manufactured Product be below [****], CCT will use commercially reasonable
efforts to accelerate the subsequent delivery of Manufactured Product, if so
requested by Alliqua. Alliqua will be invoiced for the actual quantities
shipped, adjusted as provided in Subsection (e)(ii) above. CCT will not be
responsible for warehousing Manufactured Product for Alliqua. CCT will make
available to Alliqua or Alliqua’s designee, as the case may be, all Manufactured
Products upon release.

 

(g) The remedies provided for in Subsections (e) and (f) above shall be the sole
remedies of Alliqua with respect to any single failure by CCT to deliver less
than [****] of any Manufactured Product specified in a Firm Order conforming to
the provisions of C 2.2(c) by the required delivery date specified therein and
in conformity with the applicable Specifications; and the remedy provided for in
Section 9.2(b) of the Agreement shall be the sole remedy of Alliqua with respect
to the failure of CCT on at least [****] within any [****] period to deliver at
least [****] of any Manufactured Products specified in a Firm Order conforming
to the provisions of Schedule 2.2, subsection (c) by the required delivery date
specified therein and in conformity with the applicable Specifications.

 

(h) Notwithstanding anything to the contrary in the Agreement, following
termination of the Agreement pursuant to Sections 9.2(a) or (b), during the
twelve (12) month period commencing on the date notice of termination is given
pursuant to either of such Sections (the “Termination Supply Period”), Alliqua
may submit Firm Orders for quantities of Manufactured Products in accordance
with subsection (c) above, except that the Firm Orders for any month during the
last nine (9) months of the Termination Supply Period may not exceed one hundred
percent (100%) of the forecasted amount for such nine (9) months in the most
recent Forecast provided by Alliqua to CCT prior to such notice of termination.

 

 

 

 

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION
(THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS.
ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND
HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED
IN THIS EXHIBIT WITH “*****”.

 

SCHEDULE 4.1

ECM PURCHASE PRICE

 

 

Purchase Price per unit of Manufactured Products, regardless of dimensions
thereof: $[****]

 

Maximum dimension of Manufactured Products at the $[****] Purchase Price noted
above: [****]

 

If Alliqua wishes to have larger sizes of Manufactured Products, the Purchase
Price for such larger sizes will be negotiated in good faith and agreed to by
the Parties in writing.

 

Where CCT is procuring Outer Cartons, the Outer Carton cost will be added to the
Purchase Price as provided under Section 2.1(c) of this Agreement.

 

The Parties may discuss at the JSC an amendment to this Agreement to specify
Purchase Prices for each particular SKU of the Manufactured Products. Any such
amendment will be in writing and subject to agreement by both Parties.