Exhibit 10.1

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

CONTRACT MANUFACTURING AGREEMENT

 

This Contract Manufacturing Agreement (this “Agreement”) is entered into and
effective this 7th day of February, 2014 (the “Effective Date”), by and between
Therapure Biopharma Inc. (“Therapure”), a Canadian corporation with its
principal place of business in Mississauga, Ontario and Insmed Incorporated
(“Insmed”), a Virginia corporation, having its principal office at 9 Deer Park
Drive, Suite C, Monmouth Junction, New Jersey. Each of Therapure and Insmed is
referred to herein as a “party” and collectively as the “parties”.

 

RECITALS

 

WHEREAS, Therapure maintains certain registrations and licenses with certain
Governmental or Regulatory Authorities (as defined below) as are necessary and
appropriate to Manufacture ARIKACE (as defined below) for use in or as finished
drug products for sale in the Territory (as defined below);

 

AND WHEREAS, Insmed shall obtain the NDA and all other ARIKACE Permits (as
defined below) necessary or required for the sale, marketing, distribution and
reimbursement of ARIKACE in the Territory;

 

AND WHEREAS, the parties shall perform certain development work in connection
with developing ARIKACE for scale production, as further described in this
Agreement;

 

AND WHEREAS, in furtherance of the foregoing, Therapure and Insmed wish to enter
into this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:

 

ARTICLE 1
DEFINITIONS

 

1.1.         Definitions.           As used in this Agreement, the following
words and phrases shall have the respective meanings ascribed below.

 

1.1.1.      “Acceptance Criteria” shall have the meaning set out in Section
13.2.3(i).

 

1.1.2.      “Affiliate” of any person or entity means another person or entity
that directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person or entity. For
the purposes of this definition, “control” means, as to any person or entity,
the power to direct or cause the direction of the management and policies of
such person or entity, whether through the ownership of voting securities, by
contract or otherwise.

 

1.1.3.      “Agreement” shall have the meaning set out in the Preamble.

 

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1.1.4.      “Amikacin” shall mean the active pharmaceutical ingredient Amikacin
in unfinished form, which is to be included in ARIKACE.

 

1.1.5.      “Annual Minimum Batch Processing Fee Amount” shall have the meaning
set out in Schedule C.

 

1.1.6.      “Anti-Corruption Laws” means all applicable laws, regulations,
orders, judicial decisions, conventions and international financial institution
rules regarding corruption, bribery, ethical business conduct, money laundering,
political contributions, gifts and gratuities, or lawful expenses to public
officials and private persons, agency relationships, commissions, lobbying,
books and records, and financial controls.

 

1.1.7.      “ARIKACE” shall mean ARIKACE™ (liposomal amikacin for inhalation),
as Manufactured according to the ARIKACE Specifications.

 

1.1.8.      “ARIKACE Delivery Deadline” shall have the meaning set out in
Section 12.3.1.

 

1.1.9.      “ARIKACE Permit” shall have the meaning set out in Section 8.1.2.

 

1.1.10.    “ARIKACE SOPs” shall mean the Standard Operating Procedures
applicable to the Manufacture of ARIKACE.

 

1.1.11.    “ARIKACE Specifications” shall have the meaning set out in Section
4.6.

 

1.1.12.    “Allocated Minimum Batch Labour” shall mean the labour allocated by
Therapure to Manufacture that amount of ARIKACE equivalent to the Annual Minimum
Batch Processing Fee Amount in any Manufacturing Year.

 

1.1.13.    “Basis of Design” shall mean the engineering specifications for
ARIKACE, as are described in Schedule F.

 

1.1.14.    “Batch” shall mean [***] kilograms of ARIKACE that is intended to
have uniform character and quality as set out in ARIKACE Specifications, and is
produced according to a single manufacturing order during the same cycle of
Manufacture.

 

1.1.15.    “Batch Processing Fee” shall mean the processing fee for ARIKACE to
be paid by Insmed.

 

1.1.16.    “Batch Production Records” shall mean the batch production records of
ARIKACE, which document the Manufacture of the Batch according to the ARIKACE
Specifications.

 

1.1.17.    “Batch Release Date” shall mean the date on which Therapure submits
to Insmed a report which documents that a Batch meets all of the release
specifications according to the analytical release testing being performed by
Therapure.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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1.1.18.    “Batch Release Documentation” shall mean the executed Batch
Production Records as well as the analytical release testing to be performed by
Therapure.

 

1.1.19.    “Binding Portion” shall have the meaning set out in Section 11.3.5.

 

1.1.20.    “Breach Date” shall have the meaning set out in Section 22.1.1(ii).

 

1.1.21.    “Business Day” shall mean any day other than a Saturday, a Sunday or
a day on which banks in Toronto, Ontario or New York, New York are authorized or
obligated by Law to not open or remain closed.

 

1.1.22.    “Certificate of Analysis” shall mean a certificate relating to a
Batch of ARIKACE or Amikacin that sets forth a list of items tested by
Therapure, the applicable specifications, and the test results.

 

1.1.23.    “cGMP Process Validation Performance Run Fee” shall have the meaning
set out in Section 12.1.1.

 

1.1.24.    “Change Fee” shall have the meaning set out in Section 7.1.3.

 

1.1.25.    “Change Notice” shall have the meaning set out in Section 7.1.2.

 

1.1.26.    “Change of Control” shall occur, with respect to any specified
person, if:

 

(i)                                     any Group, who prior to such time
beneficially owned less than 50 percent of the voting shares or other equity
interests of such specified person (measured by voting power rather than the
number of shares or other equity interests), shall acquire (including by merger,
consolidation or otherwise) voting shares or other equity interests of such
specified person, in one or more transactions or series of transactions, and
after such transaction or transactions such Group beneficially owns 50 percent
or more of voting shares or other equity interests of such specified person
(measured by voting power rather than the number of shares or other equity
interests); or

 

(ii)                                  such specified person shall sell all or
substantially all of its assets relating to this Agreement to any Group which,
prior to the time of such transaction, beneficially, directly or indirectly,
owned less than 50 percent of the voting shares or other equity interests of
such specified person (measured by voting power rather than the number of shares
or other equity interests).

 

1.1.27.    “Clean Room Consumables” shall mean the clean room consumable items
used by operators in the Workshop during Manufacturing, including, without
limitation, wipes, shoe covers, gloves, face masks, sterile coveralls, hairnets,
goggles, aprons and lab coats.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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1.1.28.    “Commercial Manufacturing Date” shall have the meaning set out in
Section 11.3.1.

 

1.1.29.    “Commercialization Permits” shall have the meaning set out in Section
8.1.2.

 

1.1.30.    “Commodity Taxes” shall mean all Taxes levied on or measured by, or
referred to as goods and services, harmonized sales, Québec sales, value-added,
consumption, sales, provincial sales, use, transfer, land transfer, registration
charges, gross receipt, turnover, excise or stamp, all customs duties,
countervail, anti-dumping and special import measures and all import and export
taxes.

 

1.1.31.    “Confidentiality Agreement” shall mean the Mutual Confidential
Disclosure Agreement between Insmed and Therapure dated March 1, 2012.

 

1.1.32.    “Confidential Information” shall mean any non-public information or
other material, whether written, oral, electronic, or in any other form,
received or obtained at any time in connection with this Agreement whether
before, on or after the date of this Agreement, that is confidential or
proprietary. Confidential Information includes, but is not limited to,
proprietary and non-public know-how, plans, flow charts, technical
documentation, formulas, ingredients, concepts, and information concerning the
design, specifications and methods for the development, manufacture, packaging
and supply of ARIKACE or Amikacin produced by Therapure or Insmed in addition to
the terms and conditions of this Agreement. Moreover, Confidential Information
includes notes, analyses, compilations, summaries, data, studies,
interpretations, forecasts, records, memoranda or other documents or information
prepared by the parties and their respective Affiliates and representatives
which contain, reflect or are based on, in whole or in part, Confidential
Information. Confidential Information shall not include any information to the
extent which, either before or after disclosure to the party receiving the
Confidential Information (the “Receiving Party”):

 

(i)                                     was or becomes published or lawfully
known to the public through no fault or omission on the part of the Receiving
Party;

 

(ii)                                  was known or used by the Receiving Party
prior to its disclosure by the party disclosing the Confidential Information
(the “Disclosing Party”) to the Receiving Party and the Receiving Party is able
to substantiate that such information was derived by it from a source
(independent from the Disclosing Party) without any obligation of
confidentiality; or

 

(iii)                               is provided to the Receiving Party without
restriction by a third party having the legal right to do so.

 

1.1.33.    “CPI - Canada” shall mean the Consumer Price Index for Canada as
calculated by Statistics Canada or, in the event Statistics Canada ceases to be
responsible for calculation of CPI - Canada, by the agency or entity that
assumes such responsibility.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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1.1.34.    “Corrective Action” shall have the meaning set out in Section 17.2.

 

1.1.35.    “Corrective Action Date” shall have the meaning set out in Section
17.3.2(i).

 

1.1.36.    “Correction Costs” shall have the meaning set out in Section
17.3.2(i).

 

1.1.37.    “Cost of Amikacin” shall mean $[***] per kilogram (the cost of
Amikacin as of the Effective Date) or the then-current cost of Amikacin procured
by Insmed, as supported in both cases by reasonable documentation provided by
Insmed to Therapure.

 

1.1.38.    “Cost of Excipients” shall mean (i) $[***] per kilogram (the cost of
dipalmitoylphosphatidylcholine (DPPC) as of the Effective Date); and (ii) $[***]
per kilogram (the cost of cholesterol as of the Effective Date) or the
then-current cost of such materials procured by Insmed, as supported in both
cases by reasonable documentation provided by Insmed to Therapure.

 

1.1.39.    “Current Good Manufacturing Practices” or “cGMPs” shall mean the good
manufacturing practices required by the FDA (and set out in the FD&C Act or FDA
regulations, as they may be amended from time to time (including, without
limitation, 21 CFR 210 and 211), and other applicable Governmental or Regulatory
Authorities as mutually agreed by the parties in writing, laws, policies,
guidelines or guidance in effect at any time during the Term, for the
manufacture and testing of biopharmaceutical materials as applied solely to
ARIKACE.

 

1.1.40.    “Demand Forecast” shall have the meaning set out in Section 11.3.3.

 

1.1.41.    “Dollars” (represented as “$”) shall mean U.S. Dollars.

 

1.1.42.    “Effective Date” shall have the meaning set out in the Preamble.

 

1.1.43.    “EMA” shall mean the European Medicines Agency, or any one or more
successor agency thereto performing similar functions.

 

1.1.44.    “Equipment” shall have the meaning set out in Section 3.1.2.1.

 

1.1.45.    “Equipment Costs” shall have the meaning set out in Section 3.1.3.2.

 

1.1.46.    “Equipment Invoices” shall have the meaning set out in Section
3.1.3.2.

 

1.1.47.    “Equipment Replacement Costs” shall have the meaning set out in
Section 3.1.2.6.

 

1.1.48.    “European Economic Area” shall mean the members states of the
European Union (except Croatia), as of the Effective Date, plus Iceland and
Norway.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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1.1.49.    “Excipients” shall mean dipalmitoylphosphatidylcholine (DPPC) and
cholesterol, but excluding ethanol, NaCL and NAOH.

 

1.1.50.    “Extension Term” shall have the meaning set out in Section 14.1(ii).

 

1.1.51.    “Facility” shall mean Therapure’s manufacturing facilities in
Mississauga, Canada, used, among other things, for the Manufacture of ARIKACE.

 

1.1.52.    “Facility Permit” shall have the meaning set out in Section 8.1.1.

 

1.1.53.    “FCPA” shall mean the U.S. Foreign Corrupt Practices Act (15 U.S.C.
Section 78dd-1, et -seq.), as amended.

 

1.1.54.    “FDA” shall mean the United States Food and Drug Administration, or
any successor agency thereto performing similar functions.

 

1.1.55.    “FD&C Act” shall mean the United States Federal Food, Drug and
Cosmetic Act, as may be amended from time to time.

 

1.1.56.    “Firm Portion” shall have the meaning set out in Section 11.3.6.

 

1.1.57.    “Force Majeure” shall have the meaning set out in Section 23.1.

 

1.1.58.    “G&A Cost” shall mean:

 

(i)                                     an amount equal to Therapure’s
out-of-pocket third party costs actually incurred for the construction, retrofit
and associated validation of the Workshop and the procurement and validation of
Equipment;

 

(ii)                                  an amount equal to Therapure’s
out-of-pocket third party costs actually incurred in connection with the
Technology Transfer Program plus [***] percent; and

 

(iii)                               for the period following the completion of
the Technology Transfer Program, an amount equal to Therapure’s out-of-pocket
third party costs actually incurred plus [***] percent.

 

1.1.59.    “Governmental or Regulatory Authority” shall mean any domestic or
foreign entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including, FDA, EMA and
Health Canada as well as any other agency, department, board, commission, court,
tribunal, judicial body or instrumentality of any union of nations, federation,
nation, state, municipality, county, locality or other political subdivision
thereof.

 

1.1.60.    “Group” shall mean any person, or any two or more persons acting as a
group, and all Affiliates of such person or persons.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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1.1.61.    “Heads of Agreement” shall mean the Heads of Agreement Summary
entered into by Insmed and Therapure dated August 14, 2013.

 

1.1.62.    “Health Canada” shall mean Health Canada, the regulatory body of the
Government of Canada governing health products under the Food and Drugs Act
(Canada) and regulations.

 

1.1.63.    “Indemnified Party” shall mean the person seeking indemnification.

 

1.1.64.    “Indemnifying Party” shall mean the person from whom indemnification
is sought.

 

1.1.65.    “Indication” shall mean an approved use of ARIKACE by a Governmental
or Regulatory Authority for the treatment, prevention, or diagnosis of a medical
condition.

 

1.1.66.    “Inflation Period” shall mean the period commencing on the Effective
Date and ending on the first day of Manufacturing Year 1.

 

1.1.67.    “Initial Delivery Date” shall mean the first date on which Therapure
delivers ARIKACE to Insmed after Insmed obtains Permits related to the
Manufacture of ARIKACE.

 

1.1.68.    “Initial Term” shall have the meaning set out in Section 14.1(i).

 

1.1.69.    “Insmed” shall have the meaning set out in the Recitals.

 

1.1.70.    “Insmed Intellectual Property” shall have the meaning set out in
Section 16.1.2.

 

1.1.71.    “Insmed Representatives” shall have the meaning set out in Section
21.2.

 

1.1.72.    “Intellectual Property Rights” shall mean United States, Canadian,
and worldwide intellectual property rights including, without limitation,
trademarks, service marks, trade dress, logos, copyrights, rights of authorship,
inventions, patents, rights of inventorship, moral rights, rights of publicity
and privacy, trade secrets, industrial design rights, rights under unfair
competition and unfair trade practices laws, know how, show how and all other
intellectual and industrial property rights related thereto, or otherwise,
whether registered, unregistered, statutory, common law, or pending, throughout
the world.

 

1.1.73.    “Inventory” shall mean the amount of ARIKACE specified in the Demand
Forecast.

 

1.1.74.    “Joint Project Team” shall have the meaning set out in Section 2.1.1.

 

1.1.75.    “Latent Defect” shall mean a defect in ARIKACE to the extent
attributable to Therapure, which results in ARIKACE not conforming to the
Acceptance Criteria

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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and that is not discoverable by a commercially reasonable examination of such
ARIKACE in accordance with Insmed’s quality assurance program.

 

1.1.76.    “Latent Defect Notice” shall have the meaning set out in Section
13.2.3(ii).

 

1.1.77.    “Laws” shall mean all constitutions, laws, statutes, ordinances,
treaties, rules, common law, rulings, regulations, orders, charges, directives,
determinations, executive orders, writs, judgments, injunctions, decrees,
restrictions or similar pronouncements of any applicable Governmental or
Regulatory Authority.

 

1.1.78.    “Litigation Conditions” shall have the meaning set out in Section
21.3.2.

 

1.1.79.    “Losses” shall have the meaning set out in Section 21.1.

 

1.1.80.    “Manufacture” or “Manufacturing” shall mean the formulation, filling,
packaging, inspecting, validating and testing of ARIKACE, and does not include
authority over commercialization activities, including, without limitation,
pricing and price-reporting, sales, marketing, and/or distribution.

 

1.1.81.    “Manufacturing Defect” means a deviation from the ARIKACE
Specifications, Master Batch Record and ARIKACE SOPs resulting in an inability
to issue a Certificate of Analysis.

 

1.1.82.    “Manufacturing Materials” shall mean the formulation and packaging
materials, filling components such as product containers, vials, filters,
stoppers, hoses, packaging, standard labels or supplies required for the
Manufacture of ARIKACE (other than Amikacin and Excipients) in accordance with
ARIKACE Specifications and the external testing required for such materials and
for Amikacin and Excipients.

 

1.1.83.    “Manufacturing Period” shall mean the period commencing on the date
on which Insmed delivers to Therapure the first shipment of Amikacin and
Excipients intended for Manufacture into ARIKACE for commercial distribution.

 

1.1.84.    “Manufacturing Permit” shall have the meaning set out in Section
8.1.1.

 

1.1.85.    “Manufacturing Site Registration Filing Date” shall mean the date on
which Insmed files the Therapure manufacturing site registration.

 

1.1.86.    “Manufacturing Suppliers and Vendors” shall mean suppliers of all
Manufacturing Materials, including all raw materials and primary and secondary
packaging components used in the Manufacture of ARIKACE, as well as any
providers of services used by Therapure in connection with Manufacture of
ARIKACE.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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1.1.87.    “Manufacturing Technology Transfer” means the transfer by Therapure
to Insmed (or its third-party designee) at Insmed’s expense of all know-how,
documents, records, technology, materials and information necessary or useful in
the manufacture of ARIKACE, and shall include, without limitation, consultation
time with Therapure’s employees, as reasonably requested by Insmed.

 

1.1.88.    “Manufacturing Year” shall mean any 12-month period, the first of
which shall commence on the date Therapure receives its first shipment of
Amikacin and Excipients intended for Manufacture into ARIKACE for commercial
distribution.

 

1.1.89.    “Master Batch Record” shall mean the formal set of instructions for
the Manufacture of ARIKACE at a 200 kilogram scale.

 

1.1.90.    “NDA” shall mean the FDA-required New Drug Application or a
corresponding license or application required by a Governmental or Regulatory
Authority.

 

1.1.91.    “Negotiated Cap” shall have the meaning set out in Section
6.1(iii)(A).

 

1.1.92.    “Notice of Non-Conformity” shall have the meaning set out in Section
13.2.3(i).

 

1.1.93.    “Permits” shall mean franchises, approvals, permits, authorizations,
applications, licenses, pharmacy licenses, orders, registrations, certificates,
variances, drug master files and other similar permits or rights obtained from
any applicable Governmental or Regulatory Authority.

 

1.1.94.    “Persistent Failure” shall mean either that (i) at least [***]
percent of the number of Batches Manufactured under this Agreement in any [***]
rolling period fail to conform with Therapure’s Manufacturing Requirements; or
(ii) [***] successive Batches Manufactured under this Agreement fail to conform
with Therapure’s Manufacturing Requirements. For clarity, once a Batch is
determined to be non-conforming in accordance with the procedure described in
Section 13.2.3, such Batch shall count as a non-conforming Batch for the
purposes of this Persistent Failure definition.

 

1.1.95.    “Persistent Failure Cure Period” shall have the meaning set out in
Section 6.3.1.

 

1.1.96.    “Persistent Failure Cure Plan” shall have the meaning set out in
Section 6.3.1.

 

1.1.97.    “Product Documentation” shall mean all documentation related to
ARIKACE required to ensure compliance with any and all existing product filings
in any jurisdiction for Therapure’s Manufacture of ARIKACE.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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1.1.98.    “Product Information” shall mean all information and data relating to
Amikacin and ARIKACE necessary for Therapure to Manufacture ARIKACE, including
formulae, methods of manufacture, product descriptions, test methods, validation
of test methods, Batch Production Records, and all other supporting
documentation, data and reports acquired by Insmed or its Affiliates during the
Term in connection with the manufacture and supply of ARIKACE, and all
applications, submissions, filings and correspondence of Insmed or its
Affiliates with or to any Governmental or Regulatory Authority with respect to
Amikacin and ARIKACE.

 

1.1.99.    “Purchase Order” shall have the meaning set out in Section 11.2.1.

 

1.1.100.                 “Quality Agreement” shall have the meaning set out in
Section 13.1.

 

1.1.101.                 “Reallocated Minimum Batch Labour” shall have the
meaning set out in 6.1(i)(B).

 

1.1.102.                 “Registration Batch shall have the meaning set out in
Section 12.1.1.

 

1.1.103.                 “Release Testing Fee” shall mean the release testing
fee for Manufacturing Materials, Amikacin and Excipients to be paid by Insmed.

 

1.1.104.                 “Request Order” shall mean a notice to ship Amikacin
and/or Excipients issued by Therapure and derived from the Demand Forecast.

 

1.1.105.                 “Response to Notice of Non-Conformity” shall have the
meaning set out in Section 13.2.3(iii).

 

1.1.106.                 “Review Period” shall have the meaning set out in
Section 7.1.4.

 

1.1.107.                 “SOPs” shall mean all Standard Operating Procedures
other than the ARIKACE SOPs applicable to the Workshop.

 

1.1.108.                 “Stage Deposit” shall mean the non-refundable amount of
$[***].

 

1.1.109.                 “Standby Fees” shall have the meaning set out in
Section 6.1(iii)(B).

 

1.1.110.                 “Storage Period” shall have the meaning set out in
Section 12.4.

 

1.1.111.                 “Substances” shall have the meaning set out in Section
9.2.

 

1.1.112.                 “Target Technology Transfer Completion Date” shall have
the meaning set out in Section 4.7.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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1.1.113.                 “Tax” shall mean all taxes, duties, fees, premiums,
assessments, imposts, levies, rates, withholdings, dues, government
contributions and other charges of any kind whatsoever, whether direct or
indirect, together with all interest, penalties, fines, additions to tax or
other additional amounts, imposed by any Governmental or Regulatory Authority.

 

1.1.114.                 “Technology Transfer” shall mean the scale production
of ARIKACE as described in Schedule A.

 

1.1.115.                 “Technology Transfer Invoices” shall have the meaning
set out in Section 4.4.

 

1.1.116.                 “Technology Transfer Period” shall mean the period
commencing on the Effective Date and ending on the Manufacturing Site
Registration Filing Date.

 

1.1.117.                 “Technology Transfer Program” shall mean all activities
with respect to the completion of the Technology Transfer.

 

1.1.118.                 “Technology Transfer Program Managers” shall have the
meaning set out in Section 4.5.

 

1.1.119.                 “Term” shall mean the Initial Term and any Extension
Terms.

 

1.1.120.                 “Termination Payment Section” shall have the meaning
set out in Section 14.5.1.

 

1.1.121.                 “Territory” shall mean Canada, the European Economic
Area, the United States of America and its territories, commonwealths,
possessions, including, without limitation, Puerto Rico, plus any other
territories as mutually agreed by the parties in writing from time to time.

 

1.1.122.                 “Therapure” shall have the meaning set out in the
Preamble.

 

1.1.123.                 “Therapure Intellectual Property” shall have the
meaning set out in Section 16.2.1.

 

1.1.124.                 “Therapure’s Manufacturing Requirements” shall have the
meaning set out in Section 13.2.1.

 

1.1.125.                 “Therapure Representatives” shall have the meaning set
out in Section 21.1.

 

1.1.126.                 “Third Party Claims” shall have the meaning set out in
Section 21.1.

 

1.1.127.                 “True-Up Payment” shall have the meaning set out in
6.1(i).

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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1.1.128.                 “US Export Control Laws” shall mean all applicable U.S.
laws and regulations relating to the export or re-export of commodities,
technologies, or services, including, but not limited to, the Export
Administration Act of 1979, 24 U.S.C. §§ 2401-2420, the International Emergency
Economic Powers Act, 50 U.S.C. §§ 1701-1706, the Trading with the Enemy Act, 50
U.S.C. §§ 1 et. seq., the Arms Export Control Act, 22 U.S.C. §§ 2778 and 2779,
and the International Boycott Provisions of Section 999 of the U.S. Internal
Revenue Code of 1986.

 

1.1.129.                 “Workshop” shall mean a production and control area and
related utilities located in the Facility, in which Therapure Manufactures
ARIKACE.

 

1.1.130.                 “Workshop Construction Costs” shall have the meaning
set out in Section 3.1.3.1.

 

1.1.131.                 “Workshop Construction Invoices” shall have the meaning
set out in Section 3.1.3.1.

 

1.1.132.                 “Workshop Construction Period” shall mean the period
commencing on the Effective Date and ending upon completion of the construction
of the Workshop.

 

1.1.133.                 “Workshop Construction Plan” shall mean the plan as set
out in Schedule E for the construction of the Workshop, including the budget for
the Workshop Construction Costs and the Equipment Costs.

 

1.1.134.                 “Workshop Deposit” shall mean the non-refundable amount
of $[***].

 

1.1.135.                 “Year” shall mean any 12-month period, the first of
which shall commence on the Effective Date.

 

1.2.         Schedules. The following Schedules shall form part of this
Agreement:

 

Schedule A

-

Technology Transfer Activities Quote

 

 

 

Schedule B

-

Process Flow Diagram

 

 

 

Schedule C

-

Minimum Commitments

 

 

 

Schedule D

-

Demand Forecasting Examples

 

 

 

Schedule E

 

Workshop Construction Plan

 

 

 

Schedule F

 

Basis of Design

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
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COMMISSION.

 

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ARTICLE 2
JOINT PROJECT TEAM

 

2.1.         Joint Project Team.

 

2.1.1.      Formation, Membership and Purpose. Within [***] days following the
Effective Date, the parties shall establish a joint project team which shall
include each party’s project manager, as well as at least one technical
representative from each party (the “Joint Project Team”). The Joint Project
Team will meet to discuss questions or issues regarding the project and the
relationship between the parties. The Joint Project Team will have no formal
voting authority, but shall be expected to work towards consensus decisions on
matters of concern to the parties regarding the project and the relationship
between the parties. In the event the Joint Project Team is unable to reach a
consensus decision, the question(s) or issue(s) in dispute shall be resolved in
accordance with Article 37.

 

2.1.2.      Limitation of Authority. The Joint Project Team shall have only such
powers as are specifically delegated to it hereunder and shall not be a
substitute for the rights of the parties.

 

2.1.3.      Quarterly Manufacturing Meetings. The Joint Project Team shall meet
once each calendar quarter at a mutually agreeable location to review all
aspects of this Agreement, including each Demand Forecast. The Joint Project
Team representatives from each party with an appropriate level of expertise in
manufacturing, quality assurance and regulatory affairs and other matters
mutually identified as relevant shall attend such meetings to facilitate the
highest level of performance under this Agreement. Each party shall designate
one Joint Project Team representative who shall have reasonable access to such
party’s information, of the type set out in this Section 2.1.3(i)-(vii) related
to ARIKACE and the authority to discuss and address issues related to the
Manufacture of ARIKACE and this Agreement, including: (i) Manufacturing
operations; (ii) regulatory, quality and compliance activities; (iii) FDA,
Health Canada or EMA correspondence, (iv) ARIKACE planning and scheduling;
(v) the Workshop; (vi) all critical systems data associated with the
Manufacturing operations; and (vii) technical issues related to qualification
and shipment of Amikacin.

 

2.1.4.      Additional Meetings of the Joint Project Team. In addition to the
quarterly meetings under Section 2.1.3, the Joint Project Team shall hold
meetings at such times as it elects to do so; provided, however that the Joint
Project Team shall hold meetings no less frequently than bi-weekly, subject to
additional meetings as needed or by mutual agreement. The location of meetings
shall be established by the Joint Project Team, provided that such meetings may
be held in person, teleconference or video conference, as mutually agreed by the
parties. For purposes of clarity, no meeting of the Joint Project Team shall be
held or be valid without at least one member of each party being present at such
meeting. To the extent practicable, each party shall provide proposed agenda
items to the Joint Project Team members in advance of each Joint Project Team
meeting date. Each member of the Joint Project Team may propose additional
agenda items at least [***] Business Days in advance of each meeting. The costs
incurred by each party in connection with its participation at any meetings of
the Joint Project Team shall be borne

 

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solely by such party. Unless the members of the Joint Project Team agree upon a
person to act as secretary of a meeting of the Joint Project Team, a Joint
Project Team member of Therapure shall serve as secretary of that meeting. The
secretary of each meeting shall prepare, and by e-mail distribute to all members
of the Joint Project Team, minutes of the meeting within [***] days following
the meeting to allow adequate review and comment.

 

ARTICLE 3
WORKSHOP CONSTRUCTION PERIOD

 

3.1.         Workshop Construction Period. During the Workshop Construction
Period, the parties agree as follows:

 

3.1.1.      Workshop Construction. Without limiting the obligations of Therapure
under this Agreement, Therapure shall:

 

(i)                                     procure the necessary assets required to
be used or held for use in the construction of the Workshop in accordance with
the Workshop Construction Plan;

 

(ii)                                  construct, configure, retrofit and
validate the Workshop, as approved by Insmed and in accordance with the Workshop
Construction Plan, to allow for the Manufacture of ARIKACE; and

 

(iii)                               undertake such activities as are required to
secure and maintain all approvals from the FDA, Health Canada or EMA necessary
for use of the Workshop for the Manufacture of ARIKACE.

 

3.1.2.      Equipment.

 

3.1.2.1.   Therapure shall procure the necessary assets specifically required
for the Manufacture or testing of ARIKACE (the “Equipment”).

 

3.1.2.2.   Therapure shall own, possess and have good and marketable title to
all of the Equipment.

 

3.1.2.3.   Therapure shall not be permitted to use the Equipment for any
purpose, other than the Manufacture of ARIKACE, at any time during the Term
without the prior written consent of Insmed, which consent shall not be
unreasonably withheld, conditioned or delayed.

 

3.1.2.4.   If Therapure identifies another customer that could utilize the
Equipment during the Term, and Insmed provides its prior written consent for
such use, Therapure and Insmed shall negotiate in good faith a compensatory
payment to Insmed.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
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3.1.2.5.   Therapure shall take reasonable precautions to protect the Equipment
from damage (except for normal wear and tear).

 

3.1.2.6.   The costs associated with the replacement of the Equipment (the
“Equipment Replacement Costs”) due to ordinary wear and tear shall be borne
[***] percent by Insmed and [***] percent by Therapure; provided, however, that
Therapure shall be responsible for paying all other reasonable Equipment
Replacement Costs.

 

3.1.2.7.   Therapure shall have established (i) procedures that require routine
calibration, inspection, checking and maintenance of the Equipment; and
(ii) calibration and maintenance processes for the Equipment, as supported by
calibration and maintenance records available to Insmed.

 

3.1.2.8.   Therapure shall obtain and maintain, during the Term, commercially
reasonable levels of insurance on the Equipment.

 

3.1.3.      Payment and Invoicing.

 

3.1.3.1.   Without limiting the obligations of Insmed under this
Agreement, Insmed shall pay all reasonable (and for costs exceeding $[***])
third party and internal Therapure costs of the construction, retrofit and
associated validation of the Workshop in accordance with the Workshop
Construction Plan (the “Workshop Construction Costs”). Therapure shall invoice
Insmed on a monthly basis based on commitments made in accordance with the
Workshop Construction Plan (the “Workshop Construction Invoices”); provided,
however, that no Workshop Construction Invoices shall be rendered by Therapure
to Insmed for Workshop Construction Costs in excess of the applicable amounts
set forth in the Workshop Construction Plan, without the prior written consent
of Insmed. Each Workshop Construction Invoice shall be payable by Insmed within
[***] days of invoice by Therapure and any failure to pay within that period
shall be subject to the late payment fee set out in Section 12.2.2.

 

3.1.3.2.   The cost of Equipment (the “Equipment Costs”) shall be borne [***]
percent by Insmed and [***] percent by Therapure. Therapure shall invoice Insmed
on a monthly basis based on commitments made in accordance with the Workshop
Construction Plan (the “Equipment Invoices”); provided, however, that no
Equipment Invoices shall be rendered by Therapure to Insmed for Equipment Costs
in excess of the applicable amounts set forth in the Workshop Construction Plan,
without the prior written consent of Insmed. Each Equipment Invoice shall be
payable by Insmed within [***] days of invoice by Therapure and any failure to
pay within that period shall be subject to the late payment fee set out in
Section 12.2.2.

 

3.1.4.      Workshop Deposit.

 

3.1.4.1.   Insmed shall pay to Therapure the Workshop Deposit as follows,
receipt of which shall be acknowledged by Therapure in writing in the manner
provided in Section 24.1:

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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(i)                                     concurrently upon execution of this
Agreement, in an amount equal to $1.5 million; and

 

(ii)                                  within [***] days of the issuance of the
first purchase order for Equipment, in an amount equal to $[***] million.

 

3.1.4.2.   The Workshop Deposit shall be credited as follows:

 

(i)                                     $[***] of the Workshop Deposit shall be
credited in equal instalments of $[***] per calendar month against each Workshop
Construction Invoice or Equipment Invoice under this Agreement (starting with
the first Workshop Construction Invoice or Equipment Invoice such that the full
$[***] amount is credited in [***] months); provided, that if a Workshop
Construction Invoice or Equipment Invoice is not issued in a calendar month
during such [***] month period, then the excess credit shall be carried forward
and applied against the next issued Workshop Construction Invoice or Equipment
Invoice; and

 

(ii)                                  $[***] of the Workshop Deposit shall be
credited against the last of the Workshop Construction Invoices or Equipment
Invoices under this Agreement.

 

ARTICLE 4
TECHNOLOGY TRANSFER PERIOD

 

4.1.         Objective. During the Technology Transfer Period, Insmed and
Therapure shall reasonably cooperate with each other to complete the Technology
Transfer Program as set out under Schedule A. The provisions of this Article 4
apply solely during the Technology Transfer Period.

 

4.2.         Diligence and Resources.

 

4.2.1.      Without limiting the obligations of Insmed under this
Agreement, Insmed shall, at its own expense, in respect of the Technology
Transfer Program:

 

(i)                                     work diligently in a professional manner
and with all reasonable commercial efforts in fulfilling any and all of its
obligations, including under this Section 4.2.1;

 

(ii)                                  subject to Article 18, provide to
Therapure all Product Documentation and Product Information;

 

(iii)                               pursuant to and in accordance with a Request
Order, deliver Amikacin to Therapure DDP (Incoterms 2010) Therapure’s facilities
in Mississauga, Ontario;

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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(iv)                              assist Therapure in process implementation and
validation;

 

(v)                                 approve or object to engineering and process
designs within [***] Business Days of receipt thereof by Insmed from Therapure
(or be deemed to approve the same within [***] Business Days of receipt by
Insmed from Therapure of a second notice thereof);

 

(vi)                              in Insmed’s sole discretion, file, seek,
prosecute and maintain all ARIKACE Permits, including the NDA and all other
approvals from any applicable Governmental or Regulatory Authority;

 

(vii)                           provide reasonable technical advice and
resources to Therapure to the extent necessary for Therapure to undertake the
Technology Transfer;

 

(viii)                        provide to Therapure SOPs and manufacturing bill
of materials;

 

(ix)                              pay Therapure’s fees and charges relating to
Technology Transfer and engineering and production of regulatory compliance
batches required for licensing of the Manufacturing operations, as set out in
Schedule A; and

 

(x)                                 promptly report to Therapure (and in no
event later than [***] Business Days after the occurrence of) any development
which may materially and adversely affect Therapure’s performance under this
Agreement.

 

4.2.2.      Without limiting the obligations of Therapure under this Agreement,
Therapure shall, in respect of the Technology Transfer Program:

 

(i)                                     work diligently in a professional manner
and with all reasonable commercial efforts in fulfilling any and all of its
obligations, including under this Section 4.2.2;

 

(ii)                                  employ specialized technical resources
reasonably necessary to execute the Technology Transfer;

 

(iii)                               following completion of the Workshop
Construction Period, operate the Workshop to allow for the Manufacture of
ARIKACE;

 

(iv)                              retain suitably qualified personnel and
maintain appropriate quality systems and other infrastructure to support
Manufacture of ARIKACE and the continued operation and maintenance of the
Workshop;

 

(v)                                 promptly report to Insmed (and in no event
later than [***] Business Days after the occurrence of) any development which
may materially and adversely affect Insmed’s performance under this Agreement;

 

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DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
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COMMISSION.

 

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(vi)                              reasonably assist Insmed, at a cost to Insmed
of $[***] per hour, with filing, seeking, prosecuting and maintaining all
ARIKACE Permits, including the NDA and all other approvals from any applicable
Governmental or Regulatory Authority; and

 

(vii)                           use reasonable commercial efforts to carry out
the activities set out in Schedule A.

 

4.3.         Stage Deposit. Insmed shall pay to Therapure the Stage Deposit as
follows, receipt of which shall be acknowledged by Therapure in writing in the
manner provided in Section 24.1:

 

(i)                                     prior to commencement of Stage 1A
activities as described in Schedule A, in an amount equal to $[***] to be offset
against the last of the Technology Transfer Invoices for Stage 1 activities as
described in Schedule A;

 

(ii)                                  prior to commencement of Stage 2A
activities as described in Schedule A, in an amount equal to $[***] to be offset
against the last of the Technology Transfer Invoices for Stage 2 activities as
described in Schedule A; and

 

(iii)                               prior to commencement of Stage 3A activities
as described in Schedule A, in an amount equal to $[***] to be offset against
the last of the Technology Transfer Invoices for Stage 3 activities as described
in Schedule A.

 

4.4.         Payment and Invoicing. Therapure shall invoice Insmed (i) on a
monthly basis, (A) the amounts set out in Schedule A based on percentage of the
work completed by Therapure and (B) the reasonable (and for costs exceeding
$[***], documented) costs as pre-approved by Insmed due to third parties in
connection with the Technology Transfer Program for goods and services provided
at the G&A Cost; and (ii) the Manufacturing Materials as they are procured at
the G&A Cost (the “Technology Transfer Invoices”). Each Technology Transfer
Invoice shall be payable by Insmed within [***] days of invoice by Therapure and
any failure to pay within that period shall be subject to the late payment fee
set out in Section 12.2.2.

 

4.5.         Technology Transfer Program Managers. Each party shall appoint one
project manager to act as that party’s representative (the “Technology Transfer
Program Manager”) with responsibility for being the primary point of contact
between the parties with respect to the Technology Transfer Program. Technology
Transfer Program Managers shall have regular (no less frequently than once per
week, unless otherwise agreed between the parties, provided that such
communications may be held in person, teleconference or video conference, as
mutually agreed by the parties) communications in connection with the Technology
Transfer Program. Each party may also appoint a substitute or successor
representative by providing written notice thereof to the other party.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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4.6.         ARIKACE Specifications. Prior to commencement of Stage 3A
activities as described in Schedule A, Insmed shall approve both the Master
Batch Record and ARIKACE SOPs delivered to it by Therapure during the Technology
Transfer Period. The Master Batch Record and ARIKACE SOPs approved by Insmed
shall collectively constitute the “ARIKACE Specifications” (as such term is used
in this Agreement).

 

4.7.         Technology Transfer Delays. The parties acknowledge and agree that
the parties will use reasonable commercial efforts to complete the Technology
Transfer by the target technology transfer completion date, which the parties
agree shall be [***] from the Effective Date (the “Target Technology Transfer
Completion Date”). To the extent a delay in the Target Technology Transfer
Completion Date is attributable to an act or omission of Therapure that is not
otherwise caused by an event or circumstance beyond Therapure’s control, then
Therapure shall compensate Insmed at a rate equal to $[***] per week that the
Target Technology Transfer Completion Date is so delayed.

 

ARTICLE 5
MANUFACTURING PERIOD

 

5.1.         Manufacturing Period. During the Manufacturing Period, the parties
agree as follows:

 

5.1.1.      Diligence and Resources.

 

5.1.1.1.   Without limiting the obligations of Insmed under this
Agreement, Insmed shall, at its own expense, in respect of the Manufacturing
Period:

 

(i)                                     work diligently in a professional manner
and with all reasonable commercial efforts in fulfilling any and all of its
obligations, including under this Section 5.1.1.1;

 

(ii)                                  subject to Article 18, provide to
Therapure all Product Documentation and Product Information;

 

(iii)                               if requested by Therapure, provide
reasonable technical support to Therapure to the extent necessary for Therapure
to Manufacture ARIKACE; and

 

(iv)                              pursuant to and in accordance with a Request
Order, deliver to Therapure DDP (Incoterms 2010) Therapure’s facilities in
Mississauga, Ontario:

 

(A)                               the Amikacin for the applicable calendar
quarter (or such longer period of time to the extent required to release Batches
for commercial Manufacturing), for further processing into ARIKACE; and

 

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(B)                               the Excipients,

 

provided, however, that the Amikacin and Excipients so delivered:

 

(A)                               shall be stored in a secure and appropriately
segregated area within the Facility;

 

(B)                               shall not be transferred to any third party
(except as may be required by applicable Law) without the prior written consent
of Insmed; and

 

(C)                               shall only be used by Therapure for the
Manufacture of ARIKACE.

 

5.1.1.2.   Without limiting the obligations of Therapure under this Agreement,
Therapure shall, in respect of the Manufacturing Period:

 

(i)                                     work diligently in a professional manner
and with all reasonable commercial efforts in fulfilling any and all of its
obligations, including under this Section 5.1.1.2;

 

(ii)                                  prepare executed Batch Production Records;

 

(iii)                               manufacture and package Batches pursuant to
Therapure’s Manufacturing Requirements;

 

(iv)                              within [***] days prior to commencement of a
calendar quarter send Request Orders to Insmed for quantities of Amikacin and
Excipients derived from the quantity of ARIKACE forecasted in the Demand
Forecast for such calendar quarter (or such longer period of time to the extent
required to release Batches for commercial Manufacturing);

 

(v)                                 store all Amikacin and Excipients in a
secure and appropriately segregated area within the Facility;

 

(vi)                              take reasonable precautions to protect
Amikacin and Excipients from damage; provided, that in the event of damage to
the Amikacin or Excipients, to the extent attributable to the negligence or
intentional act or omission of Therapure, Insmed’s exclusive remedy shall be the
payment by Therapure of the costs associated with the replacement of such
Amikacin or Excipients, which the parties agree shall be no greater than the
Cost of Amikacin or the Cost of Excipients, as applicable;

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
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(vii)                           not transfer any Amikacin or Excipients to any
third party (except as may be required by applicable Law) without the prior
written consent of Insmed;

 

(viii)                        only use Amikacin and Excipients for the
Manufacture of ARIKACE; and

 

(ix)                              maintain commercially reasonable levels of
insurance for all Amikacin and Excipients stored within the Facility.

 

5.1.2.      Subcontracting. Therapure will [***]. Each permitted subcontractor
shall be bound by the terms of this Agreement that are reasonably applicable to
the work being performed by such subcontractor as consented to by Insmed.
Therapure will be responsible for the actions of such subcontractors, including
any breach of the applicable terms of this Agreement by such subcontractors.
Therapure shall be responsible for the direction and coordination of the
performance of each permitted subcontractor. No contractual relationship shall
be created between Insmed and subcontractors.

 

5.1.3.      Notification of Certain Events. In addition to other notices
required pursuant to this Agreement, and without limiting the rights and
obligations of each party under Section 13.2, each party shall use its
reasonable commercial efforts to give notice to the other party within [***]
Business Days of becoming aware of the following:

 

(i)                                     any defective or adulterated ARIKACE or
any information which may suggest that Amikacin, Excipients or ARIKACE is or may
be defective, adulterated or misbranded, or fails to meet the Batch Production
Records or to maintain the stability as indicated; or

 

(ii)                                  any material safety or toxicity problem
regarding ARIKACE.

 

ARTICLE 6
MINIMUM COMMITMENTS; PERSISTENT FAILURE

 

6.1.         True-Up Payment. The payments in Section 6.1 shall be calculated
within [***] days after the end of any Year, and Insmed shall pay any amounts
owing within [***] days of invoice by Therapure, with any late payment subject
to the late payment fee set out in Section 12.2.2:

 

(i)                                     Subject to Section 6.1(ii) and 6.1(iii),
beginning on [***], if in that Year or in any subsequent Year, Insmed fails to
order that amount of ARIKACE equivalent to the Annual Minimum Batch Processing
Fee Amount, then Insmed shall pay to Therapure for such Year an amount (the
“True-Up Payment”) equal to ( (x) — (y) ), where “(x)” equals the Annual Minimum
Batch Processing Fee Amount as set out in Schedule C and “(y)” equals the actual
aggregate Batch Processing Fees paid by Insmed for such Year; provided, that the
True-Up Payment shall be reduced by

 

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DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
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COMMISSION.

 

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(A)                               [***] percent of the cost of the Clean
Room Consumables for such Year;

 

(B)                               if Therapure is able to reasonably reallocate
the Allocated Minimum Batch Labour for such Year (the “Reallocated Minimum Batch
Labour”) in the manner provided under this Section 6.1(i)(B) (to the extent
applicable), [***] percent of the cost of the Reallocated Minimum Batch Labour.
Therapure shall use reasonable commercial efforts to reallocate the excess
Allocated Minimum Batch Labour for any Year in which the Binding Portion of the
Demand Forecast for such Year plus the Firm Portion of the Demand Forecast for
such Year do not exceed the amount of ARIKACE equivalent to the Annual Minimum
Batch Processing Fee Amount for such Year; and

 

(C)                               any Standby Fees paid pursuant to
Section 6.1(iii)(B) for such Year.

 

For clarity, no payment shall be due by Insmed if the reductions in clauses (A),
(B) and (C) above exceed the True-Up Payment for such Year.

 

(ii)                                  If, in any Year, an additional Indication
is approved, then the Annual Minimum Batch Processing Fee Amount for any
subsequent Year shall be increased automatically by an amount equal to the
lesser of (x) [***]; or (y) $[***].

 

(iii)                               Insmed shall promptly report to Therapure if
Insmed expects, acting reasonably, that approval by Governmental or Regulatory
Authority for an Indication shall not be obtained prior to [***], in which case:

 

(A)                               the parties shall negotiate in good faith an
amendment to Schedule C to update the Annual Minimum Batch Processing Fee
Amounts based on the anticipated approval date for an Indication; provided, that
the new Annual Minimum Batch Processing Fee Amount for a Year negotiated by the
parties cannot be greater than [***] (the “Negotiated Cap”). By way of example,
the new Annual Minimum Batch Processing Fee Amount for [***] negotiated by the
parties cannot be greater than $[***];

 

(B)                               effective [***] and continuing until the
earlier of (x) an amendment to Schedule C agreed to by the parties or
(y) termination of this Agreement pursuant to Section 6.1(iii)(D), Insmed shall,
on a monthly basis, pay to Therapure a monthly

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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standby fee at a rate of [***] (collectively, the “Standby Fees”);

 

(C)                               notwithstanding anything to the contrary in
this Agreement, Insmed shall not be required to make any True-Up Payment until
Schedule C is amended in accordance with Section 6.1(iii)(A) (for
clarity, Insmed shall not be required to make any True-Up Payment if this
Agreement is terminated pursuant to Section 6.1(iii)(D)); and

 

(D)                               if the parties are unable to agree on an
amendment to Schedule C within [***] days, then Insmed may terminate this
Agreement by giving notice to Therapure in the manner provided in Section 24.1;
provided, however, that if Insmed does not elect to terminate this Agreement,
the dispute shall be resolved in accordance with Article 37 and the Negotiated
Cap shall apply in any such dispute resolution proceeding.

 

(iv)                              For clarity, following an amendment to
Schedule C in accordance with the terms of Section 6.1(iii), the Annual Minimum
Batch Processing Fee Amount used in the calculation of the True-Up Payment for
that Year and any subsequent Year shall equal the new Annual Minimum Batch
Processing Fee Amount for such Year(s) in such amended Schedule C.

 

6.2.         Safety Stock. Therapure must maintain at all times at least enough
inventory of Manufacturing Materials to meet the greater of (x) [***] percent of
Insmed’s forecasted amount for the applicable calendar quarter; or (y) [***].

 

6.3.         Persistent Failure.

 

6.3.1.      In the event of a Persistent Failure, Insmed shall provide Therapure
with written notice of such Persistent Failure in the manner provided in
Section 24.1. Subject to Section 6.3.2, following Therapure’s receipt of such
notice, Therapure shall for a period of [***] days (the “Persistent Failure Cure
Period”) use reasonable commercial efforts to cure such Persistent Failure;
provided, that after the Persistent Failure Cure Period, or any time prior
thereto if in Therapure’s sole discretion a cure for such Persistent Failure
cannot be reasonably effected within the Persistent Failure Cure Period,
Therapure shall deliver to Insmed Therapure’s good faith plan for curing such
Persistent Failure (the “Persistent Failure Cure Plan”). If Insmed does not
accept the Persistent Failure Cure Plan in its sole discretion, acting
reasonably, or following acceptance by Insmed of the Persistent Failure Cure
Plan, Therapure fails to cure the failure as agreed in the Persistent Failure
Cure Plan:

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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(i)                                     the parties shall cooperate to promptly
conduct Manufacturing Technology Transfer, whereby Insmed may satisfy any
requirement for ARIKACE by its own manufacture or other self-supply;

 

(ii)                                  subject to the terms and conditions of
this Agreement, Therapure shall grant to Insmed a non-exclusive, perpetual,
irrevocable, transferable, fully paid, worldwide license (with a right to
sublicense through multiple tiers) to use the Intellectual Property Rights
developed or used by, or on behalf of, Therapure in the Manufacture of ARIKACE
solely to make, have made, use, offer for sale, sell, export or import ARIKACE;
and

 

(iii)                               Therapure shall use reasonable commercial
efforts to assist Insmed (at Therapure’s cost and expense) with Insmed’s efforts
to qualify an alternate site for manufacturing ARIKACE. For clarity, nothing in
this Agreement shall prohibit Insmed from qualifying an alternate site for the
manufacture of ARIKACE at any time during the Term.

 

6.3.2.      If, and to the extent that, the reason Therapure is prevented from
reasonably effecting a cure for the Persistent Failure within the Persistent
Failure Cure Period is directly attributable to the unavailability of necessary
Amikacin, Excipients or Manufacturing Materials, the Persistent Failure Cure
Period shall be extended for the period that Therapure is prevented from
performance by such unavailability, subject to Therapure demonstrating to
Insmed’s satisfaction, acting reasonably, that it has diligently pursued and, to
the extent reasonably possible, continues to diligently pursue a cure for the
Persistent Failure.

 

ARTICLE 7
CHANGES AND DEVIATIONS

 

7.1.         Change Notice.

 

7.1.1.      The parties hereby acknowledge and agree that in the event that:

 

(i)                                     during the Technology Transfer Period,
changes are proposed or required, including, without limitation, changes to any
activities and/or deliverables set out in Schedule A, changes to Schedule F
and/or process changes;

 

(ii)                                  beginning in Manufacturing Year 1, at the
end of each Manufacturing Year the actual Batch size varies from Schedule B for
that Manufacturing Year; or

 

(iii)                               there is a change in, or proposed change to,
the Amikacin, ARIKACE Specifications, Master Batch Records, ARIKACE SOPs, the
Manufacturing of ARIKACE and/or the Commercial Manufacturing Date,

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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then this Agreement and the applicable Schedule shall be amended in accordance
with the procedure described below.

 

7.1.2.      Either party shall present a written notice to the other party
outlining in sufficient detail the proposed changes to the relevant Schedule
(the “Change Notice”).

 

7.1.3.      Within [***] Business Days after submission of the Change Notice,
Therapure shall present in writing to Insmed a quote for work to be undertaken
and/or proposed revisions to the Batch Processing Fee (the “Change Fee”),
required as a result of the Change Notice, such Change Fee to reflect solely the
incremental costs and Therapure’s reasonable profits associated with the Change
Notice, as supported by reasonable documentation provided by Therapure to
Insmed.

 

7.1.4.      The parties shall have [***] Business Days (the “Review Period”)
after presentation of the Change Fee to discuss the Change Fee. On or before the
expiry of the Review Period, the parties shall:

 

(i)                                     accept the Change Fee by executing the
Change Fee and related Change Notice (in accordance with Section 7.1.6) and
returning a copy to each other;

 

(ii)                                  discuss proposed amendments to the Change
Fee and/or related Change Notice; or

 

(iii)                               reject the Change Fee in writing (in which
case the Change Fee and related Change Notice shall not be effective).

 

7.1.5.      Any amended Change Fee and/or related Change Notice mutually agreed
and executed by the parties shall be incorporated as part of the relevant
Schedule and such Schedule shall be deemed to have been amended to include the
Change Fee and/or related Change Notice, as amended.

 

7.1.6.      All Change Fees and related Change Notices will be executed (i) on
behalf of Therapure by its Vice President, Operations and (ii) on behalf of
Insmed by its Vice-President, Technical Operations before they will be deemed to
be effective. In addition, Change Fees and related Change Notices that include
changes in the Batch Processing Fees will also be executed (i) on behalf of
Therapure by its Chief Executive Officer; and (ii) on behalf of Insmed by its
Vice-President, Technical Operations before they will be deemed to be effective.

 

7.1.7.      The parties acknowledge and agree that changes in Schedule A,
Schedule B, or Schedule F may result in changes to the pricing set out in this
Agreement. If any Change Notice may result in documented changes to the pricing
set out in this Agreement, the parties shall negotiate an appropriate amendment
to this Agreement to reflect such changes, applied retroactively to the
effective date of such changes.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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7.2.         Acknowledgments. Insmed hereby acknowledges that Schedule B sets
out the criteria on which Schedule A is based.

 

7.3.         Changes to Workshop. Therapure, at its own expense, may make
commercially reasonable changes to the Workshop without the prior consent of
Insmed, provided that such changes (i) do not adversely affect Therapure’s
ability to Manufacture or release ARIKACE; (ii) do not negatively affect the
condition or maintenance of the Equipment; and (iii) comply with all applicable
Laws relating to the Manufacture or release of ARIKACE.

 

7.4.         Changes to ARIKACE Specifications, Master Batch Records and/or the
ARIKACE SOPs. The parties acknowledge and agree that in the event of any changes
that impact ARIKACE Specifications, Master Batch Records and/or the ARIKACE
SOPs, any resulting increase in Batch Processing Fees shall be borne by Insmed;
provided, however, that to extent that (i) changes in the Master Batch Records
or ARIKACE Specifications, as the case may be, result in a reduction in the cost
of Manufacturing; and (ii) such changes were proposed by Therapure and adopted
by Insmed, then the Batch Processing Fee shall be reduced to reflect [***] of
the total cost reduction.

 

ARTICLE 8
REGULATORY MATTERS

 

8.1.         Permits.

 

8.1.1.      Insmed shall have sole right, at its own expense, to file, seek,
prosecute and maintain all Permits, including the NDA and all other approvals
from any applicable Governmental or Regulatory Authority, related to the
Manufacture of ARIKACE (collectively, the “Manufacturing Permits”). The parties
acknowledge and agree that the Manufacturing Permits specifically exclude all
Permits necessary or required under applicable Laws to keep the Workshop and
Facility operational for purposes of carrying out Therapure’s Manufacturing
obligations hereunder (the “Facility Permits”), the obtaining and maintaining of
which shall be the sole responsibility of Therapure. Therapure shall also have
sole responsibility for maintaining the Workshop in a state of GMP compliance
and preparedness for inspection by the FDA, Health Canada, EMA or, to the extent
reasonably requested by Insmed, any other applicable Governmental or Regulatory
Authority.

 

8.1.2.      Insmed shall have sole right, at Insmed’s expense, to file, seek,
prosecute and maintain all Permits related to the commercialization and
distribution of ARIKACE anywhere in the Territory, including, but not limited
to, all Permits necessary or required for the sale, marketing, distribution and
reimbursement of ARIKACE in the Territory (collectively, the “Commercialization
Permits”, and together with the Manufacturing Permits, the “ARIKACE Permits”).
Therapure shall provide Insmed with such information related to Manufacturing as
may be reasonably requested by Insmed in order to obtain and maintain any such
ARIKACE Permits.

 

8.1.3.      Insmed shall keep Therapure informed of:

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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(i)                                     the progress made towards obtaining
Manufacturing Permits and promptly notify Therapure, in writing, of any expected
delay greater than one month in obtaining any such Manufacturing Permits;

 

(ii)                                  the receipt of any Manufacturing Permits,
in writing, promptly after such Manufacturing Permits are obtained; and

 

(iii)                               any new submitted application for
Manufacturing Permits and inform Therapure promptly after such Manufacturing
Permits are obtained.

 

8.1.4.      In addition to the procedure described under Article 7, in the event
that Insmed initiates any reasonable change to the NDA or any other ARIKACE
Permit, Therapure shall, at Insmed’s expense (such expense to only include
Therapure’s personnel and other direct costs and third party costs attributable
to effecting such change), assist Insmed in supporting and implementing such
change.

 

8.1.5.      Each party shall promptly notify the other of new regulatory
requirements and other applicable Laws of which it becomes aware which are
necessary for the Manufacture or distribution of ARIKACE. The parties shall
confer with each other and use reasonable commercial efforts to implement the
best means to comply with such applicable Laws.

 

ARTICLE 9
SUPPLIERS; MATERIAL TRANSFERS

 

9.1.         Vendor and Supplier Audit and Certification. Insmed shall have the
right to approve all suppliers of all Manufacturing Materials, including all raw
materials and primary and secondary packaging components used in the Manufacture
of ARIKACE and the terms under which such components shall be provided. Insmed
shall also have the right to approve any providers of services used by Therapure
in connection with Manufacture of ARIKACE, which approval shall not be
unreasonably withheld, conditioned or delayed. Each party shall notify the other
as far in advance as reasonably practicable of any changes in Manufacturing
Suppliers and Vendors or the costs of goods or services to be provided by any
such Manufacturing Suppliers and Vendors.

 

9.2.         Material Transfers. Each of the parties may from time to time
provide to the other materials owned by or licensed to a party (“Substances”).
In such instances the parties shall enter into a material transfer agreement (it
being noted that upon one party’s request, the parties shall have good faith
discussions regarding any necessary or appropriate amendments to the material
transfer agreement).

 

ARTICLE 10
AUDITS

 

10.1.       Audits. Insmed shall have the right, subject to Article 19 hereof,
to a compliance audit of the Workshop and any relevant documentation, including,
but not limited to, production

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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records relevant to: (i) assessing ARIKACE’s safety, purity and potency; and
(ii) determining compliance with ARIKACE Specifications, cGMPs, this Agreement,
and applicable Laws. Such audits may be conducted upon reasonable advance
written notice to Therapure no more than once per calendar year (except for any
for cause audit or in the event the audit results in any adverse findings, in
which case a reasonable number of additional audits shall be permitted), and
shall be at Insmed’s expense. In connection with performing such audits, Insmed
shall take reasonable steps to avoid disruption of operations at the Workshop
and to comply with reasonable rules and regulations generated by Therapure. If
Insmed’s audit results in any adverse findings, Insmed shall notify Therapure of
such findings in writing and Therapure shall prepare a corrective action
reasonably acceptable to Insmed within [***] days following delivery to
Therapure of such findings. Therapure shall use reasonable commercial efforts to
correct any such adverse finding. Any Insmed Representatives who conduct the
audits shall have appropriate and relevant qualifications, as determined by
Insmed, in its reasonable judgement, shall comply with all Workshop
rules regarding safety and security, and shall execute written agreements to
maintain in confidence all Confidential Information obtained during the course
of any audit except for disclosure to Therapure under the terms of this
Agreement.

 

ARTICLE 11
DEMAND FORECAST

 

11.1.       Agreement to Supply and to Purchase.

 

11.1.1.    During the Term, and subject to the terms and conditions of this
Agreement, Therapure shall be a non-exclusive manufacturer and supplier of
ARIKACE for Insmed.

 

11.2.       Purchase Orders.

 

11.2.1.    Insmed may from time to time submit to Therapure a purchase order (a
“Purchase Order”) under which supply of ARIKACE shall be implemented in
accordance with the terms of Section 11.3.

 

11.2.2.    Purchase Orders shall be submitted no later than [***] days prior to
the required delivery date, specifying the quantity of ARIKACE and the required
delivery date.

 

11.2.3.    If a Purchase Order is in compliance with this Article 11, Therapure
shall acknowledge and accept such Purchase Order in writing to Insmed within
[***] Business Days of receipt of same. If Therapure fails to provide Insmed
with such written acknowledgement and acceptance within the [***] Business Day
period, Therapure shall be deemed to have accepted the applicable Purchase
Order. Within [***] Business Days of Therapure’s acceptance of a Purchase
Order, Insmed shall pay to Therapure as a deposit a non-refundable amount equal
to [***] percent of the value of such Purchase Order. Notwithstanding this
Section 11.2, if any Purchase Order is outside the binding portion of the Demand
Forecast, Therapure reserves the right to decline such Purchase Order.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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11.2.4.    Notwithstanding any other provision of this Agreement, a failure of
Therapure to meet a purchase quantity specified on a Purchase Order in excess of
the applicable forecasted amount by the requested delivery date(s) (despite
using reasonable commercial efforts to do so) shall not constitute a breach of
this Agreement by Therapure.

 

11.3.       Demand Forecast.

 

11.3.1.    As soon as reasonably practicable, Insmed shall provide written
notice to Therapure of the date on which Insmed intends to request the first
delivery of ARIKACE for commercial distribution (the “Commercial Manufacturing
Date”).

 

11.3.2.    Prior to delivery of the Demand Forecast under
Section 11.3.3(i), Insmed and Therapure shall reasonably discuss in good faith
Insmed’s anticipated supply requirements for ARIKACE. All such discussions shall
be non-binding on both parties.

 

11.3.3.    Insmed shall provide to Therapure:

 

(i)                                     [***] months before the Commercial
Manufacturing Date, an initial forecast covering the [***] month period
following the Commercial Manufacturing Date; and

 

(ii)                                  prior to the first day of each calendar
quarter during the Term, commencing with the calendar quarter which includes the
Commercial Manufacturing Date, a forecast covering a rolling [***] month period,

 

setting out in each case Insmed’s requirements for ARIKACE for each month during
the applicable [***] month period. The forecasts under clauses (i) and
(ii) above are “Demand Forecasts”.

 

11.3.4.    Therapure shall accept or reject each Demand Forecast in writing to
Insmed within [***] Business Days. Any rejection of a Demand Forecast by
Therapure shall be accompanied by a written reason for such rejection. If
Therapure fails to provide Insmed with such written acceptance or rejection
within the [***] Business Day period, Therapure shall be deemed to have accepted
the Demand Forecast. Therapure may only reject a Demand Forecast submitted in
accordance with Section 11.3.3 if Therapure is limited by capacity restraints;
provided, that the cost of any portion of the ARIKACE under a Demand Forecast
rejected by Therapure shall be removed from the applicable Annual Minimum Batch
Processing Fee Amount for the applicable Year. Notwithstanding the foregoing,
Therapure may not reject (i) any portion of a Demand Forecast containing a
previously accepted Binding Portion; or (ii) any portion of a Demand Forecast
pursuant to which a Firm Portion becomes a Binding Portion so long as the
applicable portion of the Demand Forecast complies with Section 11.3.6.

 

11.3.5.    The first [***] of each Demand Forecast accepted by Therapure shall
be binding on Insmed and Therapure and shall obligate Therapure to Manufacture,
sell and

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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deliver to Insmed the specified quantity of ARIKACE, all in accordance with the
terms and conditions of this Agreement (such first 6 month period, the “Binding
Portion”).

 

11.3.6.    The [***] of each Demand Forecast accepted by Therapure shall be
semi-binding on Insmed and Therapure in accordance with this Section 11.3.6
(such second [***] period, the “Firm Portion”). The forecasted quantity of
ARIKACE for [***] of each Demand Forecast (i) shall not vary (either up or down)
by more than the greater of (x) [***] percent or (y) [***], for any such month
in any subsequent Demand Forecast and (ii) may not be changed in Demand
Forecasts more than [***] times while in such firm period.

 

11.3.7.    The [***] of each Demand Forecast are non-binding on both Parties and
not subject to any forecasting restrictions but should represent good faith
estimates on the part of Insmed.

 

11.3.8.    An example of the Demand Forecast described in Section 11.3 is set
out in Schedule D and is provided by way of example only.

 

11.4.       Production and Inventory Report. Therapure shall provide Insmed with
monthly reports documenting year-to-date production and Inventory promptly
following the date which it becomes generally available to Therapure, which
shall include, to the extent available, the following information: (i) lot
number; (ii) planned release month; (iii) FDA, Health Canada or EMA submission
or planned submission date; (iv) release date; (v) expiration dates of ARIKACE;
and (vi) vials available.

 

11.5.       Right to Observe. Insmed shall be entitled to have a representative
present at any time to observe, but not to participate in, production, testing,
quality control and assurance or other activities associated with the
Manufacture and release of ARIKACE, provided such representative not interfere
with the operations of Therapure. Insmed shall provide as much advance notice as
possible to Therapure of any such visit.

 

11.6.       Problems with Supply. At any time during the Term, as soon as it
becomes reasonably apparent to Therapure that circumstances will result in any
failure or delay in delivery of any ARIKACE to continue for more than [***],
Therapure shall notify Insmed as soon as possible, and Therapure shall meet with
Insmed to discuss the best practical method of assuring Insmed a source of
supply of such ARIKACE, as applicable, during the continuance of such
circumstances; provided, however, that during such circumstances, Therapure
shall continue to use reasonable commercial efforts to prioritize and/or
allocate space and capacity within the Facility to manufacture ARIKACE for
Insmed.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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ARTICLE 12
PRICE; INVOICING; DELIVERY

 

12.1.       Price.

 

12.1.1.    Subject to this Agreement, Insmed shall pay a fee (the “cGMP Process
Validation Performance Run Fee”) per Batch for the three [***] kilogram cGMP
validation batches (each, a “Registration Batch”) as set out in Schedule A for
the processing of each Registration Batch and its associated analytical testing.
The Batch Processing Fee to be paid by Insmed will be determined by Therapure
[***] days following completion of the third Registration Batch; provided,
however, that if the Batch Processing Fee so determined is outside the margin of
plus or minus [***] percent of the cGMP Process Validation Performance Run Fee
other than as a result of a change made at the request of Insmed to the scope of
work to be performed by Therapure, then Insmed may terminate this Agreement
without any additional payment by giving notice to Therapure in the manner
provided in Section 24.1.

 

12.1.2.    The Release Testing Fee to be paid by Insmed will be determined by
the parties [***] days following completion of the third Registration Batch.

 

12.1.3.    The Batch Processing Fee to be paid by Insmed shall not include the
cost of the Amikacin or the Excipients. Insmed shall supply the Amikacin and the
Excipients to Therapure at no cost.

 

12.1.4.    The Batch Processing Fees, the Release Testing Fees and the Annual
Minimum Batch Processing Fee Amount shall be adjusted annually beginning on the
anniversary of the Effective Date, by an amount equal to the [***].

 

12.2.       Invoicing and Payment.

 

12.2.1.    Therapure shall invoice Insmed for:

 

(i)            ARIKACE, on the Batch Release Date, and, subject to
Section 12.2.3, Insmed shall pay Therapure within [***] days of each Batch
Release Date, with any late payment subject to the late payment fee set out in
Section 12.2.2;

 

(ii)           amounts due to third parties in connection with goods and
services provided, on a monthly basis at the G&A Cost, and Insmed shall pay
Therapure within [***] days of invoice by Therapure, with any late payment
subject to the late payment fee set out in Section 12.2.2; and

 

(iii)          Manufacturing Materials, as they are procured at the G&A Cost,
and Insmed shall pay Therapure within [***] days of invoice by Therapure, with
any late payment subject to the late payment fee set out in Section 12.2.2.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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12.2.2.    Payments shall be made in United States Dollars by electronic fund
transfer to an account specified by Therapure or by other means agreed to by
Therapure and Insmed. Each invoice shall be payable by Insmed in accordance with
the terms noted above. If payment in full in respect of any invoice is not made
on the required invoice payment date, Insmed shall pay a late fee in an amount
equal to 1.5 percent per month calculated for the period during which payment is
late, multiplied by the invoice balance remaining unpaid on the required invoice
payment date. The amount of the late fee shall cumulate until paid in full.

 

12.2.3.    Insmed shall have no obligation to pay for non-conforming ARIKACE
that is subject to an unresolved Notice of Non-Conformity under Section 13.2.3,
and such ARIKACE shall be excluded in determining whether Therapure has
satisfied its obligations hereunder, including without limitation its obligation
to timely deliver ARIKACE under Section 12.3.1.

 

12.3.       Delivery.

 

12.3.1.    Therapure shall deliver ARIKACE to Insmed Ex-Works (Therapure’s
facilities in Mississauga, Ontario) pursuant to Incoterms 2010 within [***] of
the required delivery date (the “ARIKACE Delivery Deadline”); provided, however,
that Therapure shall not deliver ARIKACE, in whole or in part, prior to Insmed’s
acceptance (or deemed acceptance) of the Batch of ARIKACE in accordance with the
procedure described in Section 13.2.3.

 

12.3.2.    If, following acceptance (or deemed acceptance) by Insmed of the
Batch of ARIKACE in accordance with the procedure described in Section 13.2.3,
Therapure fails to deliver ARIKACE in accordance with Section 12.3.1, and such
failure is attributable to an act or omission of Therapure, for every [***] past
the ARIKACE Delivery Deadline that ARIKACE has not been so delivered by
Therapure, Insmed shall receive a credit equal to [***] percent of the Batch
Processing Fee payable for such ARIKACE. By way of example only, Insmed shall
receive:

 

(i)            if Therapure delivers a Batch of ARIKACE, in whole or in part,
within [***] of the ARIKACE Delivery Deadline, no credit;

 

(ii)           if Therapure delivers a Batch of ARIKACE, in whole or in part,
within [***] to [***] of the ARIKACE Delivery Deadline, a credit equal to [***]
percent of the Batch Processing Fee payable for such ARIKACE; and

 

(iii)          if Therapure delivers a Batch of ARIKACE, in whole or in part,
within [***] to [***] of the ARIKACE Delivery Deadline, a credit equal to [***]
percent of the Batch Processing Fee payable for such ARIKACE.

 

The applicable Annual Minimum Batch Processing Fee Amount shall also be reduced
by any credit Insmed receives in the applicable Year pursuant to this
Section 12.3.2.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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12.3.3.    Insmed agrees to take delivery of, and pay for, in accordance with
this Agreement, all quantities of ARIKACE Manufactured by Therapure, according
to Purchase Orders, provided that Insmed accepts (or is deemed to accept) the
Batches of ARIKACE in accordance with the procedure described in Section 13.2.3.

 

12.3.4.    All liability for ARIKACE shall pass to Insmed upon delivery by
Therapure.

 

12.3.5.    Therapure shall provide Insmed with any reasonably requested
production documentation related to any delivered ARIKACE.

 

12.4.       Storage.

 

12.4.1.    Therapure agrees to store in its inventory (at Therapure’s expense)
any ARIKACE for a period not to exceed the first calendar month anniversary of
the Batch Release Date (the “Storage Period”). By way of example, if a Batch
Release Date is May 15, the first calendar month anniversary would be June 15.
If ARIKACE remains at Therapure’s warehouse after the end of the Storage Period,
Therapure shall notify Insmed in writing and charge Insmed for further storage
at a cost of $[***] per skid for each subsequent calendar month, or part
thereof.

 

12.4.2.    Therapure agrees to store in its inventory any Manufacturing
Materials at a cost to Insmed of $[***] per skid per calendar month, or part
thereof.

 

ARTICLE 13
QUALITY CONTROL

 

13.1.       Quality Agreement. Insmed and Therapure agree to negotiate in good
faith a quality agreement (the “Quality Agreement”) to be executed and delivered
no later than six months from the Effective Date that will address matters
relating to, without limitation, product quality and safety.

 

13.2.       Batch Release.

 

13.2.1.    Therapure shall Manufacture ARIKACE in accordance with (i) cGMPs or
any other applicable Laws; (ii) the applicable ARIKACE Permit (including the
NDA) and Facility Permit; (iii) the ARIKACE Specifications; and (iv) the
requirements set out in the Quality Agreement (clauses (i) through
(iv) collectively, “Therapure’s Manufacturing Requirements”).

 

13.2.2.    On the Batch Release Date, Therapure shall deliver to Insmed the
Batch Release Documentation for each Batch.

 

13.2.3.    Insmed shall examine the Batch Release Documentation upon receipt in
accordance with Insmed’s quality assurance program then in effect and the
following shall apply:

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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(i)            If Insmed believes any Batch or part thereof does not conform to
Therapure’s Manufacturing Requirements (the “Acceptance Criteria”) or otherwise
breaches Section 20.1(i), it shall notify Therapure in writing as soon as
reasonably practicable, but in no event later than [***] of its receipt of the
Batch Release Documentation, and instruct Therapure not to deliver ARIKACE.
Insmed shall provide Therapure with a detailed explanation of the
non-conformity. Each notice given by Insmed to Therapure under this
Section 13.2.3 is referred to as a “Notice of Non-Conformity”. If Insmed fails
to provide to Therapure a Notice of Non-Conformity within the [***] period, then
Insmed shall be deemed to have accepted the Batch is conforming and waived its
right to object to such conclusion.

 

(ii)           Notwithstanding Section 13.2.3(i), Insmed shall provide notice in
writing to Therapure of a Latent Defect (a “Latent Defect Notice”) within [***]
Business Days of Insmed become aware of such Latent Defect.

 

(iii)          Upon receipt of a Notice of Non-Conformity or a Latent Defect
Notice, Therapure shall promptly investigate the Batch of any ARIKACE identified
in the notice and provide written notice back to Insmed as to whether Therapure
agrees with Insmed’s determination of non-conformity or Latent Defect (the
“Response to Notice of Non-Conformity”). If Therapure fails to provide to Insmed
a Response to Notice of Non-Conformity within [***] of receipt of the Notice of
Non-Conformity or Latent Defect Notice, then Therapure shall be deemed to have
accepted Insmed’s conclusion that the Batch of any ARIKACE is non-conforming or
contains a Latent Defect, as applicable, and waived its right to object to such
conclusion.

 

(iv)          If Therapure disagrees with Insmed’s conclusion regarding
non-conformity or Latent Defect, Insmed shall have the right to investigate the
origin of the non-conformity or Latent Defect, as applicable, and Therapure
shall give access to Insmed to any necessary documentation.

 

(v)           If Insmed disagrees with Therapure’s conclusion regarding
non-conformity or Latent Defect after an investigation pursuant to
Section 13.2.3(iv), then the Batch Release Documentation shall be supplied to a
mutually acceptable independent laboratory or consultant for resolution, whose
determination of conformity or non-conformity or Latent Defect, and
determination of the party responsible for causing such non-conformity or Latent
Defect, shall be binding. The cost of the independent laboratory or consultant
shall be allocated between the parties in proportion with their relative fault
for the non-conforming ARIKACE; provided, however, that (i) if the independent
laboratory or consultant

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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determines that Therapure is not responsible for causing such non-conformity or
Latent Defect, Insmed shall reimburse Therapure for any reasonable expenses
incurred by Therapure in connection with the procedures set out in this
Section 13.2.3; and (ii) if the independent laboratory or consultant determines
that Therapure is responsible for causing such non-conformity or Latent Defect,
Therapure shall reimburse Insmed for any reasonable expenses incurred by Insmed
in connection with the procedures set out in this Section 13.2.3.

 

(vi)          If Insmed agrees with Therapure’s conclusion regarding
non-conformity or Latent Defect, or if the independent laboratory or consultant
determines in accordance with Section 13.2.3(v) that Therapure is not
responsible (in whole or in part) for causing such non-conformity or Latent
Defect, Insmed shall be deemed to accept, and shall be obligated to pay for the
Batch of ARIKACE (in which case such amounts of ARIKACE shall be included for
purposes of determining whether Therapure has satisfied its obligations
hereunder, including without limitation its obligation to timely deliver ARIKACE
under Section 12.3.1).

 

(vii)         If Therapure accepts Insmed’s conclusion regarding such
non-conformity or Latent Defect, or if the independent laboratory or consultant
determines in accordance with Section 13.2.3(v) that Therapure is responsible
(in whole or in part) for causing such non-conformity or Latent Defect, then, in
either case, Insmed’s exclusive remedy (including for any breach by Therapure of
Section 20.1(i), but subject to Therapure’s indemnification obligations with
respect to Third Party Claims under Section 21.2) shall be, at its election,
either: (i) the prompt replacement by Therapure of the non-conforming or
defective ARIKACE with conforming ARIKACE at no cost to Insmed (where such
replacement shall [***]), or (ii) the repayment by Therapure of the full amount
of any payments, including shipping and handling costs made by Insmed for such
non-conforming or defective ARIKACE; provided, however, that if the independent
laboratory or consultant determines in accordance with Section 13.2.3(v) that
Insmed is also responsible for causing such non-conformity or Latent Defect, the
[***] shall be [***].

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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ARTICLE 14
TERM, TERMINATION AND SURVIVAL

 

14.1.       Term. Unless extended or terminated early pursuant to this
Article 14, the term of this Agreement shall commence on the Effective Date and,
unless terminated earlier in accordance with the terms and conditions of this
Agreement, shall continue:

 

(i)            for an initial term of 5 years from the Initial Delivery Date
(“Initial Term”); and

 

(ii)           for successive periods of two years each (each, an “Extension
Term”) following the expiration of the Initial Term, unless terminated by either
party by not less than two years prior written notice to the other party.

 

14.2.       Termination.

 

14.2.1.    In addition to the termination rights set out in Sections
6.1(iii)(D) and 12.1.1, Insmed shall have the option to terminate this Agreement
by giving notice to Therapure in the manner provided in Section 24.1 upon the
occurrence of any of the following:

 

(i)            Therapure’s material breach of a provision of this Agreement;

 

(ii)           Therapure’s default under the terms of the Quality Agreement, and
such default remains uncured for [***] after notice thereof by Insmed; or

 

(iii)          in the event of insolvency of Therapure; or in the event that an
involuntary or voluntary petition in bankruptcy is filed by, against, or on
behalf of Therapure, and such petition shall not be dismissed within 90 days
after the filing thereof; or in the event Therapure makes a general assignment
for the benefit of its creditors, or a receiver or trustee is appointed for its
business or property; or

 

(iv)          for any other reason, on no fewer than 180 days notice.

 

14.2.2.    Therapure shall have the option to terminate this Agreement by giving
notice to Insmed in the manner provided in Section 24.1 upon the occurrence of
any of the following:

 

(i)            Insmed’s material breach of a provision of this Agreement;

 

(ii)           Insmed’s default under the terms of the Quality Agreement, and
such default remains uncured for [***] after notice thereof by Therapure; or

 

(iii)          in the event of insolvency of Insmed or in the event that an
involuntary or voluntary petition in bankruptcy is filed by, against, or on
behalf of Insmed, and such petition shall not be dismissed within 90 days after
the

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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filing thereof; or in the event Insmed makes a general assignment for the
benefit of its creditors, or a receiver or trustee is appointed for its business
or property.

 

14.2.3.    Notwithstanding any other provision of this Agreement:

 

(i)            in the event of a default by Therapure under Section 14.2.1(i),
Therapure will have [***] after written notice thereof by Insmed to cure such
default; and

 

(ii)           in the event of a default by Insmed under
Section 14.2.2(i), Insmed will have [***] after written notice thereof by
Therapure to cure such default.

 

14.3.       Failure of Technology Transfer Program Not a Breach by Therapure.
The parties acknowledge and agree that Therapure does not make any guarantee nor
provides any assurance that the Technology Transfer Program shall lead to any
particular result or outcome. Notwithstanding any other provision of this
Agreement, a failure of the Technology Transfer Program to lead to any
particular result or outcome in and of itself (absent negligence or wilful
misconduct on the part of Therapure) shall not constitute a breach of this
Agreement by Therapure.

 

14.4.       Effect of Termination.

 

14.4.1.    Upon termination or expiration of this Agreement, Therapure shall:

 

(i)            immediately cease the Manufacture of ARIKACE;

 

(ii)           immediately deliver to Insmed any remaining ARIKACE, Amikacin,
Excipients and Manufacturing Materials purchased by Insmed, subject to the
provisions of Article 13;

 

(iii)          subject to the terms and conditions of this Agreement, grant to
Insmed a non-exclusive, perpetual, irrevocable, worldwide, transferable, license
(with a right to sublicense through multiple tiers) to use the Intellectual
Property Rights owned by or licensed to Therapure and used by Therapure in the
Manufacture of ARIKACE solely to make, have made, use, offer for sale, sell,
export or import ARIKACE; provided, that if this Agreement is terminated
pursuant to Section 14.2.1(iv) such license shall be royalty-bearing for any
patent owned by or licensed to Therapure (other than any Therapure Intellectual
Property) and carry a commercially reasonable royalty rate on the net sales of
ARIKACE where the Manufacture of ARIKACE would infringe such patent, and, in all
other cases, shall be fully paid; provided, further that in the event of any
failure to agree on the terms of such royalty, the license shall be granted on a
royalty free basis

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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until final resolution of such dispute pursuant to Article 37 (with the royalty
applied retroactively on ARIKACE Manufactured and sold following the grant of
such license);

 

(iv)          use reasonable commercial efforts to assist Insmed (at Therapure’s
cost) with Insmed’s efforts to qualify an alternate site for manufacturing
ARIKACE; provided, that such assistance shall be at Insmed’s cost if this
Agreement is terminated pursuant to Section 14.2.1(iv), 14.2.2(i) or 14.2.2(ii);

 

(v)           cease using the Confidential Information of Insmed and return to
Insmed or destroy all copies of the Confidential Information of Insmed, except
that Therapure may maintain 1 archival copy in its legal files for the sole
purpose of determining its continuing obligations under this Agreement; and

 

(vi)          transfer-back to Insmed any document relative to the Intellectual
Property Rights of Insmed or any Affiliate of Insmed, provided that Insmed shall
reimburse Therapure for any expenses incurred in effecting such transfer where
the termination is a result of any reason other than by default by Therapure
provided in section 14.2.1.

 

14.4.2.    Upon termination or expiration of this Agreement, Insmed shall:

 

(i)            be permitted to file an amendment under its ARIKACE regulatory
applications/filings to provide for manufacturing of ARIKACE by another party at
another manufacturing facility, and Therapure shall upon request use reasonable
commercial efforts to assist Insmed in such efforts (including signing and
delivering any documents as necessary with applicable regulatory authorities);

 

(ii)           have the right to conduct the Manufacturing Technology Transfer
pursuant to the terms of Section 6.3.1(i), provided, however that Insmed shall
be responsible for all reasonable costs associated with such Manufacturing
Technology Transfer if this Agreement is terminated by Therapure pursuant to
Section 14.2.2;

 

(iii)          accept for delivery any ARIKACE delivered by Therapure, subject
to the provisions of Article 13;

 

(iv)          pay all amounts owed to Therapure (including unbilled work in
process) within [***] days of expiration or termination of this Agreement; and

 

(v)           cease using the Confidential Information of Therapure and return
to Therapure all copies of the Confidential Information of Therapure, except

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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that Insmed may maintain 1 archival copy in its legal files for the sole purpose
of determining its continuing obligations under this Agreement.

 

14.4.3.    Upon termination or expiration of this Agreement, this Agreement
shall automatically and without any further action by or on behalf of either of
the parties terminate and be of no further force or effect except as set out in
Section 14.6. All licenses granted to Therapure shall automatically terminate
upon the expiration or termination of this Agreement. No termination of this
Agreement shall release or discharge the parties from any debt or liability
which shall have been incurred or accrued prior to the date of such termination
or which is attributable to a period prior to such termination. Upon termination
of this Agreement, any payments then-owing under this Agreement shall be deemed
immediately due and payable, except as may otherwise be provided herein.

 

14.5.       Termination Payment.

 

14.5.1.    If this Agreement is terminated pursuant to Section 6.1(iii)(D) or
14.2.1(iv) (each, a “Termination Payment Section”) on or after January 1,
2016, Insmed shall pay to Therapure, in immediately available funds, within
[***] days of such termination, a fee equal to (x) less (y), where:

 

“(x)” equals the sum of (A) [***]; and (B) [***],

 

“(y)” equals any unused portion of the Workshop Deposit held by Therapure on the
termination date.

 

By way of example, if this Agreement is terminated pursuant to a Termination
Payment Section in [***], Insmed shall pay to Therapure a fee of [***] in
immediately available funds within [***] days of such termination.

 

14.5.2.    If this Agreement is terminated pursuant to a Termination Payment
Section prior to [***], Insmed shall pay to Therapure, in immediately available
funds, within [***] days of such termination, a fee equal to [***] less any
unused portion of the Workshop Deposit held by Therapure on the termination
date.

 

14.6.       Survival. Termination, expiration, cancellation or abandonment of
this Agreement through any means or for any reason, shall be without prejudice
to the rights and remedies (which shall be cumulative) of either party with
respect to any antecedent breach of any of the provisions of this Agreement. The
provisions of Sections 14.3, 14.4, 14.5 and 14.6, Article 18, Article 21,
Article 22 and Article 37 and any other clause which is stated to survive the
termination or expiration of this Agreement shall survive expiration or
termination of this Agreement. Subject to Section 14.4.2, Insmed’s obligation to
purchase any ARIKACE shall terminate immediately upon the effective date of
termination of this Agreement.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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ARTICLE 15
INSURANCE

 

15.1.       Therapure Insurance. Therapure shall procure and maintain, during
each Manufacturing Year and for a period of at least 3 years following the
expiration date of the last Batch Manufactured by Therapure,
(i) Product/Completed Operations Liability Insurance in an amount not less than
$5 million per claim and in the aggregate; (ii) Commercial General Liability
Insurance in an amount not less than $5 million per occurrence and in the
aggregate, which insurance may cover any operation of Therapure; (iii) Workers
Compensation Insurance, statutory through WSIB covering work-related injuries to
Therapure’s employees; (iv) Professional Liability/Errors & Omissions Liability
Insurance in an amount not less than $5 million per claim and in the aggregate
covering claims for losses incurred as a result of the acts, errors, or
omissions of Therapure in the performance of Therapure’s obligations under this
Agreement; and (v) Property Insurance coverage for Therapure’s property at the
manufacturing facility required for Therapure to perform its obligations under
this Agreement for such property’s full replacement cost. Therapure shall
furnish Insmed a certificate evidencing its ARIKACE and Commercial General
Liability Insurance. The requirements of this Section 15.1 shall be re-evaluated
annually, based on Therapure’s financial condition; provided, however that the
obligation of Therapure with respect to the insurance coverage set out in this
Section 15.1 shall not be amended except by the mutual agreement of the parties.

 

15.2.       Insmed Insurance. Insmed shall procure and maintain, during the Term
and for a period of 3 years beyond the expiration date of ARIKACE,
(i) Product/Completed Operations Liability Insurance in an amount not less than
$5 million per claim and in the aggregate: (ii) Commercial General Liability
Insurance in an amount not less than $5 million per occurrence and in the
aggregate, which insurance may cover any or all operations of Insmed and its
Affiliates: and (iii) Property Insurance covering the full replacement cost of
the Amikacin and Excipients Insmed shall furnish Therapure a certificate
evidencing its insurance upon written request. The requirements of this
Section 15.2 shall be re-evaluated annually, based on Insmed’s financial
condition; provided, however that the obligation of Insmed with respect to the
insurance coverage set out in this Section 15.2 shall not be amended except by
the mutual agreement of the parties.

 

ARTICLE 16
INTELLECTUAL PROPERTY

 

16.1.       Insmed Intellectual Property.

 

16.1.1.    Insmed shall solely own and retain exclusive worldwide right, title
and interest in and to all proprietary or Confidential Information and all
Intellectual Property Rights which it owned on and prior to the Effective Date,
and it shall also own any and all Confidential Information and Intellectual
Property Rights and proprietary information that are (i) improvements,
derivatives or modifications to any of the foregoing and (ii) developed during
the Term related to Insmed’s process.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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16.1.2.    Therapure hereby assigns, transfers and conveys to Insmed or its
designee, all of Therapure’s worldwide right, title and interest in and to any
and all inventions, works of authorship and information, including software,
data, drawings, specifications, photographs and sketches, to the extent
covering, claiming or relating to ARIKACE (including manufacturing process,
quality control, testing or compliance procedures relating solely to ARIKACE),
whether or not patentable or registrable under patent, copyright or similar
laws, which Therapure (through its employees or permitted subcontractors) may
solely or jointly conceive, develop or reduce to practice, or cause to be
conceived, developed or reduced to practice, solely in the Manufacture of
ARIKACE or which result, to any extent, from use of Insmed’s property or Insmed
Materials, including its Confidential Information (collectively, the “Insmed
Intellectual Property”), including any and all moral rights and Intellectual
Property Rights inherent therein and appurtenant thereto, including, but not
limited to, all patent rights, copyrights, trademarks, know-how and trade
secrets. Therapure further acknowledges and agrees that all original works of
authorship that are made by Therapure in the Manufacture of ARIKACE and which
are protectable by copyright (and are required to be assigned above) are “works
made for hire,” as that term is defined in the United States Copyright Act. Upon
the request and at the reasonable expense of Insmed, Therapure shall execute and
deliver to Insmed any and all documents and instruments, and do such other acts,
that may be necessary or desirable to evidence the foregoing assignment and
transfer and otherwise to vest in Insmed possession and control of all Insmed
Intellectual Property and Intellectual Property Rights of Insmed.

 

16.1.3.    Insmed shall grant to Therapure during the Term a non-exclusive,
non-transferable, non-assignable, royalty-free limited license (with a right to
sublicense only to permitted third-party subcontractors) to use the Insmed
Intellectual Property and Intellectual Property Rights of Insmed solely to the
extent necessary for Therapure to meet its obligations hereunder.

 

16.1.4.    Therapure acknowledges and agrees that title to Insmed Intellectual
Property shall always remain with Insmed, and that Therapure shall not acquire
any interest therein except to the extent such Insmed Intellectual Property is
included in the license granted to Therapure hereunder. Therapure shall not
challenge, contest or otherwise impair Insmed’s ownership of Insmed Intellectual
Property or the validity or enforceability of Intellectual Property Rights of
Insmed therein.

 

16.2.       Therapure Intellectual Property.

 

16.2.1.    Notwithstanding anything to the contrary contained herein, any
Confidential Information and Intellectual Property Rights and proprietary
information which is developed by, or on behalf of, Therapure related to
Therapure’s general business processes and the manufacturing process, quality
control, testing and compliance procedures and is not Insmed Intellectual
Property (collectively, the “Therapure Intellectual Property”) shall be solely
and exclusively owned by Therapure. In no event shall Insmed challenge, contest
or otherwise impair Therapure’s ownership of any of Therapure Intellectual
Property or the validity of any of Therapure Intellectual Property.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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16.2.2.    Notwithstanding anything to the contrary contained herein and in
addition to any rights granted to Insmed, Therapure shall grant to Insmed a
non-exclusive, perpetual, irrevocable, transferable, fully paid, worldwide
license (with a right to sublicense through multiple tiers) to use the Therapure
Intellectual Property used by Therapure in the Manufacture of ARIKACE solely to
make, have made, use, offer for sale, sell, export or import ARIKACE.

 

16.2.3.    Insmed acknowledges and agrees that title to Therapure Intellectual
Property shall always remain with Therapure, and that Insmed shall not acquire
any interest therein except to the extent such Therapure Intellectual Property
is included in the licenses granted to Insmed hereunder.

 

16.2.4.    Insmed shall immediately give Notice to Therapure upon becoming aware
of any Intellectual Property Rights infringement or imitation of any
Intellectual Property Rights of Therapure or of any facts that Insmed believes
might constitute infringement or imitation.

 

ARTICLE 17
PHARMACOVIGILENCE AND FIELD CORRECTIVE ACTIONS

 

17.1.       Pharmacovigilence. Insmed shall deliver written notice to Therapure
of any complaints it receives, directly or through an Affiliate or third party,
regarding or relating to ARIKACE promptly upon receipt of such complaints by
Insmed’s complaint handling unit. Therapure shall cooperate with Insmed in any
necessary and appropriate investigation of any such complaint. Upon request by
Insmed and at Insmed’s expense, Therapure shall conduct any necessary batch
record reviews or other analysis of its Manufacturing operations for ARIKACE.
Unless otherwise agreed, Therapure shall complete and deliver its written
analysis to Insmed as soon as reasonably practicable, giving due consideration
to any potential reporting requirements imposed by Governmental or Regulatory
Authorities. Insmed shall be responsible for reporting any and all complaints
relating to ARIKACE to any applicable Governmental or Regulatory Authorities
requiring the filing of such reports. Such reporting shall be made in compliance
with all applicable Laws. Therapure shall give prompt (and in any event within
[***]) written notice to Insmed of complaints it receives regarding or relating
to ARIKACE and provide such information and documentation to Insmed as is
necessary for Insmed to evaluate such complaints with respect to Insmed’s
existing inventory and previously distributed ARIKACE. Insmed shall reimburse
Therapure for the direct costs it incurs in connection with any investigation or
review pursuant to this Section 17.1, unless the circumstances giving rise to
the such investigation or review are attributable to the acts or omissions of
Therapure.

 

17.2.       Field Corrective Actions.

 

17.2.1.    The parties hereby acknowledge and agree that field corrective
actions, market withdrawals and/or recalls may be initiated by a Governmental or
Regulatory Authority or by Insmed. Each party shall promptly notify (and in any
event, within [***]) the other party of all facts or circumstances which could
precipitate the need for implementing a field corrective action, market
withdrawal and/or recall (“Corrective Action”) with respect to ARIKACE. Such
facts or circumstances may include product complaints received by a party or

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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other information regarding ARIKACE which comes to the attention of a party,
including information regarding the Manufacturing process or its output.
Reported information shall include, but not be limited to:

 

(i)            the date the information was received;

 

(ii)           lot number(s); and

 

(iii)          the reported terms(s) seriousness, and any other relevant outcome
information.

 

17.2.2.    Therapure shall make available any necessary batch records or other
analysis of its Manufacturing operations for ARIKACE which may be necessary in
order for Insmed to fully investigate the matter. Neither party shall
unreasonably withhold any information from the other party involving patient
safety, efficacy of ARIKACE or efficacy of a Corrective Action. Insmed shall
develop and issue any statements to be made to any third parties (including,
without limitation, Governmental or Regulatory Authorities or the general
public) relating to a Corrective Action in compliance with all applicable Laws
and shall provide Therapure with reasonable opportunity for review prior to the
publication or release of such statements.

 

17.3.       Correction Costs.

 

17.3.1.    In the event that a Corrective Action or like procedures are
necessary, each party shall cooperate fully with the other to ensure expeditious
completion of such Corrective Action in compliance with all applicable Laws.

 

17.3.2.    Subject to Section 17.3.3:

 

(i)            if a Corrective Action relates to a Manufacturing Defect caused
by Therapure (including any failure to follow any ARIKACE SOP or Master Batch
Record), Therapure shall be responsible for complying with
Section 13.2.3(vii) and paying reasonable costs and expenses directly related to
the Corrective Action (the “Correction Costs”), which the parties agree shall be
no greater than the greater of (x) the [***]; and (y) the [***];

 

(ii)           if a Corrective Action relates to design, marketing,
distribution, production or handling by Insmed of ARIKACE or any Manufacturing
Defect primarily caused by an act or omission of Insmed, including defects in
the Amikacin, the Excipients or the Manufacturing Materials, Insmed shall be
responsible for and pay all Correction Costs; and

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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(iii)          if a Corrective Action relates to a failure by Therapure to
maintain the Workshop in a state of GMP compliance, Therapure shall be
responsible for and pay all costs and expenses related to bringing the Workshop
into a state of GMP compliance.

 

17.3.3.    In the event that a Corrective Action has been caused by or
contributed to by the fault of both Therapure and Insmed, the responsibility for
and payment of the Correction Costs shall be apportioned among the parties in
proportion to the degree of fault by Therapure and Insmed in causing the
Corrective Action.

 

17.3.4.    In the event that Correction Costs are incurred by a party that are
paid by the other party, the responsible party shall reimburse the incurring
party for any such reasonable Correction Costs within [***] days of receipt of a
bill from the incurring party for such Correction Costs.

 

17.4.       Compliance. The obligations of Therapure and Insmed set out in this
Article 17 are intended to comply with the applicable Laws relating to
Manufacture, release and distribution of ARIKACE. The requirements of this
Article 17 shall therefore be construed and interpreted to comply with all such
Laws. To the extent provisions of this Article 17 do not adequately reflect any
such Law such provisions shall be revised to the extent reasonably necessary to
make such provisions legal and valid in accordance with such Laws.

 

ARTICLE 18
CONFIDENTIAL INFORMATION, NONDISCLOSURE, PUBLICITY AND NON-SOLICITATION OF
EMPLOYEES

 

18.1.       Confidentiality.

 

18.1.1.    Each of Therapure and Insmed shall (and shall use its best efforts to
cause each of its respective Affiliates and representatives to) keep
confidential and not disclose to any other person or entity or use for its own
benefit, or the benefit of any other person or entity, any Confidential
Information. Each of Insmed or Therapure shall be responsible for any breach of
this Article 18 by any of the Insmed Representatives or any of the Therapure
Representatives, as applicable.

 

18.1.2.    The parties may disclose Confidential Information solely to the
extent required by any Governmental or Regulatory Authority having jurisdiction
over that party asserting a right to obtain such information, including, without
limitation, where disclosure is required to be made for the purpose of obtaining
regulatory approvals in any jurisdiction; provided, however, that prior to any
disclosure pursuant to this Section 18.1.2 (except where such disclosure is
required to be made to a Governmental or Regulatory Authority in order for such
Disclosing Party to obtain regulatory approvals in any jurisdiction), the
Disclosing Party shall promptly advise the other party in the event of any
request by a Governmental or Regulatory Authority or other Governmental or
Regulatory Authority for the Confidential Information and shall cooperate with
the other party to assert any right of objection to such

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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request or to seek a protective order or to take other appropriate action to
protect the Confidential Information, except as otherwise prohibited by Law.

 

18.1.3.    Notwithstanding anything in this Agreement to the contrary, each of
the parties shall not disclose the other party’s or any of its respective
Affiliates’ Confidential Information of the type set out in the Demand Forecast
to the other party or its respective Representatives other than those production
personnel or Representatives who need to know such Confidential Information.

 

18.2.       Limitation of Disclosure. The parties agree that, except as
otherwise may be required to be disclosed by law, order or regulation of a court
or tribunal or Governmental or Regulatory Authority, no information concerning
this Agreement and the transactions contemplated herein shall be made public by
either party without the prior written consent of the other.

 

18.3.       Public Announcements. Therapure and Insmed shall consult with each
other before issuing, and give each other the opportunity to review and comment
upon, any press release or other public statements with respect to the
announcement of the transactions contemplated by this Agreement, and shall not
and shall cause their respective Therapure Representatives or Insmed
Representatives not to issue any such press release or make any such public
statement prior to such consultation, except as such party may reasonably
conclude may be required by applicable Law, court process or by obligations
pursuant to any listing agreement with any national securities exchange or
national securities quotation system.

 

18.4.       Non-Solicitation of Employees. During the Term: (i) Insmed agrees
that, without the prior written consent of Therapure, neither Insmed nor any
Insmed Representative shall (or shall assist or encourage others to), directly
or indirectly, solicit to hire or cause or seek to cause to leave the employ of
Therapure or any of its Affiliates any person who is then employed by Therapure
or any of its Affiliates; (ii) Therapure agrees that, without the prior written
consent of Insmed, neither Therapure nor any Therapure Representative (which,
for the purposes of this Section 18.4, does not include Affiliates of Therapure)
shall (or shall assist or encourage others to), directly or indirectly, solicit
to hire or cause or seek to cause to leave the employ of Insmed or any of its
Affiliates any person who is then employed by Insmed or any of its Affiliates;
provided that general solicitations in electronic or written media or hiring as
a result thereof, shall not constitute a breach of this Section 18.4.

 

ARTICLE 19
GOVERNMENTAL OR REGULATORY AUTHORITY INSPECTIONS AND NOTICES

 

19.1.       Governmental or Regulatory Authority Inspections. Each party shall
promptly (within [***] Business Days) notify the other party of any notices of
inspection, request for records or other documentation received from a
Governmental or Regulatory Authority which are related to the Manufacture of
ARIKACE and shall have final authority and responsibility for submitting
responses to the observations; provided, that Therapure shall, to the extent
reasonably practicable, (i) provide Insmed with the ability to review and
comment on any draft responses

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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and (ii) incorporate any comments from Insmed. Responses to the observations
shall be made in accordance with all applicable Laws and requirements of the
Governmental or Regulatory Authority. The responding party shall inform the
other of the results of any such inspection and provide a copy of any report or
other written communication received or submitted in connection with such
inspection. Therapure will allow the EMA, FDA, Health Canada or other applicable
Governmental or Regulatory Authority to perform reasonable inspections and
audits of the Facility to ensure compliance with applicable Laws.

 

19.2.       Governmental or Regulatory Authority Notices. To the extent allowed
or consented to by Law, Therapure shall promptly (within [***] Business Days)
notify Insmed of any subpoena, civil investigative demand, or similar request
for records or other documentation received from a Governmental or Regulatory
Authority regarding ARIKACE and allow Insmed the opportunity to seek a
protective order at the discretion and cost of Insmed.

 

ARTICLE 20
REPRESENTATIONS, WARRANTIES AND COVENANTS

 

20.1.       Therapure’s Representation and Warranty. Therapure represents,
warrants and covenants as follows:

 

(i)            that at the time of Manufacture, ARIKACE shall conform to ARIKACE
Specifications and shall be Manufactured in accordance with Therapure’s
Manufacturing Requirements;

 

(ii)           during the Term, Therapure shall comply with and shall take no
action that would cause it to be in violation of applicable Laws, including but
not limited to the FCPA, US Export Control Laws and Anti-Corruption Laws in the
Territory; further, it shall immediately notify Insmed if Therapure has any
information or suspicion that there may be a violation of the FCPA or any other
Anti-Corruption Law in connection with the performance of this Agreement, and
shall reasonably cooperate with Insmed with respect to any investigation or
audit related thereto;

 

(iii)          it has not been debarred pursuant to the FD&C Act, excluded from
a federal health care program, or debarred from federal contracting by any
Governmental or Regulatory Authority in the Territory, and have not been
convicted of or pled nolo contendere, to a crime that could lead to such
debarment or exclusion;

 

(iv)          it will not directly or indirectly employ, contract with or retain
any person or entity, including but not limited to Manufacturing Suppliers and
Vendors, to perform services under this Agreement if such person or entity is
debarred pursuant to the FD&C Act, excluded from a federal health care program,
or debarred from federal contracting by any Governmental or Regulatory Authority
in the Territory, or has been convicted or pled nolo

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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contendere to a crime that could lead to such exclusion or debarment. In the
event that Therapure becomes aware of or receives notice of the debarment or
exclusion of any person or entity providing services to under this Agreement,
then Therapure agrees to notify Insmed immediately and address the issue as
directed by Insmed;

 

(v)           that it has obtained, and shall remain in compliance during the
Term with all applicable Facility Permits which are required under applicable
Laws of Governmental or Regulatory Authorities applicable to the operation of
the Workshop for Manufacture of ARIKACE as set out in this Agreement;

 

(vi)          subject to the terms and conditions of this Agreement, it shall
deliver ARIKACE within [***] from the Batch Release Date;

 

(vii)         ARIKACE delivered to Insmed shall (A) be free from any and all
encumbrances, liens, security interest or other third-party claims; and (B) not
be misbranded, contaminated or adulterated in violation of applicable Laws;

 

(viii)        during the Term, Therapure shall promptly report to Insmed any
development coming to its attention which may, in any way, reasonably be
expected to materially affect the performance of this Agreement;

 

(ix)          that it is duly organized and validly existing under the Laws of
the Province of Ontario, and has full corporate power and authority to enter
into this Agreement and to carry out the provisions hereof, and its entering
into this Agreement has been duly authorized by all requisite corporate action;

 

(x)           the execution, delivery and performance of this Agreement by
Therapure does not conflict with any agreement, instrument or understanding,
oral or written, to which it is a party or by which it may be bound, nor violate
any material applicable Law; and

 

(xi)          this Agreement is legally binding upon it and enforceable in
accordance with its terms.

 

20.2.       Disclaimer of Warranties. EXCEPT FOR THOSE WARRANTIES EXPRESSLY SET
OUT IN THIS AGREEMENT, NEITHER PARTY MAKES ANY OTHER WARRANTIES OR
REPRESENTATIONS OF ANY KIND WHATSOEVER, WRITTEN OR ORAL, EXPRESS OR IMPLIED,
STATUTORY, BY OPERATION OF LAW OR OTHERWISE, WITH RESPECT TO ARIKACE, MATERIALS
PROVIDED UNDER THIS AGREEMENT OR THE MANUFACTURE OF ARIKACE AND EACH PARTY
EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES WITH RESPECT TO THE SUBJECT
MATTER OF THIS AGREEMENT, INCLUDING THE WARRANTIES OF

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, AND
SUITABILITY OF ARIKACE.

 

20.3.       Insmed’s Representation and Warranty. Insmed represents, warrants
and covenants as follows:

 

(i)            the Insmed Intellectual Property and the technical advice and
resources provided by Insmed to Therapure in respect of the Technology Transfer
Program are sufficient to enable Therapure to fulfill any and all of its
obligations under this Agreement, including the obligations of the Therapure in
respect of the Technology Transfer Program and to Manufacture ARIKACE as
contemplated by this Agreement;

 

(ii)           Insmed has provided to Therapure all Product Information and
Product Documentation necessary for Therapure to Manufacture ARIKACE and to
enable Therapure to comply with any and all applicable ARIKACE Permits which are
required under applicable Laws of Governmental or Regulatory Authorities;

 

(iii)          Insmed has not received written notice alleging that the Insmed
Intellectual Property directly relating to the Manufacture of ARIKACE violates,
misappropriates or infringes the intellectual property rights (including
patents) of a third party within the 3-year period prior to the Effective Date;
and to Insmed’s knowledge there is no basis for such an allegation or
litigation;

 

(iv)          during the Term, it has the right to give Therapure any
information or materials provided hereunder, and that Therapure has the right to
use such information or materials for the Manufacture of ARIKACE;

 

(v)           in connection with the performance of its obligations under this
Agreement, it shall comply with all applicable Laws and, if obtained, shall
remain in compliance during the Term with all applicable ARIKACE Permits which
are required under applicable Laws of Governmental or Regulatory Authorities;

 

(vi)          the Amikacin, the Excipients and the Manufacturing Materials
delivered to Therapure by Insmed are, to Insmed’s knowledge (but except as
disclosed to Therapure regarding the toxicity of ARIKACE pursuant to
Section 5.1.3(ii)), free of hazardous or toxic components, or, if hazardous or
toxic components are present, that all such risks, hazards and testing or
certification of such materials, and any specific handling instructions required
to handle such materials, shall have been fully disclosed by providing notice to
Therapure in advance of delivery of such Amikacin, Excipients and Manufacturing
Materials;

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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(vii)         there are no actual or pending, and to Insmed’s knowledge, no
alleged or threatened, adverse actions, suits, claims, or formal governmental
investigations, or settlements or judgments, involving ARIKACE by or against
Insmed or any of its Affiliates in or before any Governmental or Regulatory
Authority. In particular, to Insmed’s knowledge, there is no pending or
threatened product liability action involving the use or administration of any
ARIKACE;

 

(viii)        there is no litigation pending against Insmed that alleges that
the Manufacture of ARIKACE infringes, misappropriates or otherwise violates the
intellectual property rights (including patents) of a third party; Insmed has
not received written notice alleging such infringement, misappropriation or
violation within the 3-year period prior to the Effective Date; and to Insmed’s
knowledge there is no basis for such an allegation or litigation;

 

(ix)          during the Term, the Amikacin comply with all testing requirements
under the relevant Governmental or Regulatory Authority and, when applicable,
are produced in compliance with the process approved by the Governmental or
Regulatory Authority under all Permits (including the NDA), and shall be
delivered to Therapure in accordance with all Request Orders;

 

(x)           during the Term, Insmed shall promptly report to Therapure any
development coming to its attention which may, in any way, reasonably be
expected to materially affect the performance of this Agreement;

 

(xi)          that it is duly organized and validly existing under the Laws of
the State of Virginia, and has full corporate power and authority to enter into
this Agreement and to carry out the provisions hereof, and its entering into
this Agreement has been duly authorized by all requisite corporate action;

 

(xii)         the execution, delivery and performance of this Agreement by it
does not conflict with any agreement, instrument or understanding, oral or
written, to which it is a party or by which it may be bound, nor violate any
material applicable Law; and

 

(xiii)        this Agreement is legally binding upon it and enforceable in
accordance with its terms.

 

ARTICLE 21
THIRD PARTY INDEMNIFICATION

 

21.1.       Insmed Third Party Indemnification. Insmed shall indemnify, defend
and hold harmless Therapure, its Affiliates and their respective directors,
officers, employees,

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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subcontractors, delegates, agents and Affiliates (collectively, the “Therapure
Representatives”) from and against any and all liabilities, charges,
obligations, penalties, judgments, demands, disbursements of any kind and
nature, losses, damages, fines, costs and expenses (including, without
limitation, reasonable attorneys’ fees), including, without limitation, property
damage or personal injury (including, without limitation, death) of third
parties (collectively, “Losses”) arising out of or resulting from any third
party claims, judgments, demands, actions or suits (collectively, “Third Party
Claims”) to the extent arising or resulting from:

 

(i)            Insmed’s storage, promotion, labeling claim, marketing,
distribution, pricing, use or sale (including resale) of ARIKACE;

 

(ii)           any claim that the use, sale, Manufacture, marketing, packaging
design, handling or distribution or use of ARIKACE by Insmed violates the
Intellectual Property Rights of any third party, except to the extent such
violation results from any Manufacturing Materials supplied by Therapure or
Therapure Intellectual Property;

 

(iii)          any product liability or similar claim for injury to person or
property in connection with the sale, marketing, handling, or distribution of
ARIKACE, except with respect to any Manufacturing Defect caused by Therapure;

 

(iv)          any negligence or wilful misconduct by an Insmed Representative;

 

(v)           any breach by Insmed of its representations, warranties or
covenants in this Agreement; or

 

(vi)          any failure of the Amikacin, the Excipients or the Manufacturing
Materials supplied by Insmed to meet their applicable specifications,

 

in each case, except to the extent any of the foregoing arises out of or results
from the negligence or wilful misconduct of any Therapure Representative or
Therapure’s breach of its obligations under this Agreement.

 

21.2.       Therapure Third Party Indemnification. Therapure shall indemnify
Insmed, its Affiliates and their respective employees, directors, officers,
subcontractors, delegates, agents and Affiliates (collectively, the “Insmed
Representatives”) from and against any and all Losses arising out of or
resulting from any Third Party Claims to the extent arising or resulting from:

 

(i)            any product liability or similar claim for injury to person or
property, solely in connection with a Manufacturing Defect caused by Therapure,
in each case, except to the extent such Third Party Claims are: (A) attributable
to the Amikacin or the Manufacturing Materials; (B) caused by an act or omission
of a Insmed Representative; or (C) or attributable to Insmed’s instructions or
specifications;

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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(ii)                                  any breach by Therapure of its
representations, warranties or covenants in this Agreement; or

 

(iii)                               any negligence or wilful misconduct by a
Therapure Representative,

 

in each case, except to the extent any of the foregoing arises out of or results
from the negligence or wilful misconduct of any Insmed Representative or
Insmed’s breach of its obligations under this Agreement.

 

21.3.       Procedure.

 

21.3.1.    In the event of a Third Party Claim, then the Indemnified Party shall
promptly notify the Indemnifying Party thereof in writing after becoming aware
of such Third Party Claim; provided, however, that no delay on the part of the
Indemnified Party in notifying the Indemnifying Party shall relieve the
Indemnifying Party from any obligation hereunder unless (and then only to the
extent that) the Indemnifying Party is actually and materially prejudiced
thereby. Such notice shall set out in reasonable detail the basis of the claim
(including, if applicable, the representation, warranty or covenant alleged to
have been breached), and, if estimable, the amount of such claim.

 

21.3.2.    The Indemnifying Party shall have the right, exercisable by written
notice to the Indemnified Party within [***] of receipt of notice from the
Indemnified Party of the commencement of or assertion of any Third Party Claim,
to assume the defense of such Third Party Claim to the extent that it involves
(and continues to involve) monetary damages; provided, however, that:

 

(i)                                     the Indemnifying Party expressly agrees
in such notice that, as between the Indemnifying Party and the Indemnified
Party, the Indemnifying Party shall be solely obligated to satisfy and discharge
the Third Party Claim;

 

(ii)                                  the defense of such Third Party Claim by
the counsel representing the Indemnifying Party does not, in the reasonable
judgment of the Indemnified Party, constitute a conflict of interest under the
applicable canons or rules of legal professional ethics; and

 

(iii)                               the Indemnifying Party makes reasonably
adequate provision to ensure the Indemnified Party of the ability of the
Indemnifying Party to satisfy the full amount of any adverse monetary judgment
that would reasonably be expected to result therefrom.

 

(the conditions set out in clauses (i), (ii) and (iii) above are collectively
referred to as the “Litigation Conditions”).

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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21.3.3.    In no event shall the Indemnifying Party have the right to control
any Third Party Claim to the extent such Third Party Claim covers injunctive,
criminal or other equitable relief that, if granted, would adversely affect the
Indemnified Party.

 

21.3.4.    Within [***] after the Indemnifying Party has given notice to the
Indemnified Party of its intended exercise of its right to defend a Third Party
Claim, the Indemnified Party shall give notice to the Indemnifying Party of any
objection thereto based upon the Litigation Conditions. If the Indemnified Party
so objects, the Indemnified Party shall continue to defend the Third Party Claim
at the expense of the Indemnifying Party until such time as such objection is
withdrawn. If no such notice is given, or if any such objection is withdrawn,
the Indemnifying Party shall be entitled, at its sole cost and expense, to
assume and conduct such defense, with counsel selected by the Indemnifying Party
and reasonably acceptable to the Indemnified Party, until such time as the
Indemnified Party shall give notice that any of the Litigation Conditions, in
its reasonable judgment, are no longer satisfied.

 

21.3.5.    During such time as the Indemnifying Party is controlling the defense
of such Third Party Claim, the Indemnified Party shall cooperate, and cause its
Affiliates and agents to cooperate, to the extent commercially reasonable, upon
request of the Indemnifying Party in the defense or prosecution of the Third
Party Claim, including by furnishing such records, information and testimony and
attending such conferences, discovery proceedings, hearings, trials or appeals
as may reasonably be requested by the Indemnifying Party.

 

21.3.6.    In the event that the Indemnifying Party fails to satisfy the
Litigation Conditions or does not notify the Indemnified Party in writing of the
Indemnifying Party’s intent to defend any Third Party Claim within [***] days
after notice thereof, the Indemnified Party may (without further notice to the
Indemnifying Party) undertake the defense thereof with counsel of its choice and
at the Indemnifying Party’s expense (including attorneys’ fees and costs and
expenses of enforcement or defense).

 

21.3.7.    The Indemnifying Party or the Indemnified Party, as the case may be,
shall have the right to join in (including the right to conduct discovery,
interview and examine witnesses and participate in all settlement conferences),
but not control, at its own cost and expense, the defense of any Third Party
Claim that the other party is defending as provided in this Agreement.

 

21.3.8.    The Indemnifying Party, if it shall have assumed the defense of any
Third Party Claim as provided in this Agreement, shall not consent to a
settlement of, or the entry of any judgment arising from, any such Third Party
Claim without the prior written consent of the Indemnified Party (which consent
shall not be unreasonably withheld or delayed), provided, however, that the
Indemnifying Party may settle claims involving solely monetary damages without
the consent of the Indemnified Party if a full release of the Indemnifying Party
is obtained with respect to such claims. The Indemnifying Party shall not,
without the prior written consent of the Indemnified Party, not to be
unreasonably withheld, enter into any compromise or settlement which commits the
Indemnified Party to take, or to forbear to take, any action. The Indemnified
Party shall have the right to settle any Third Party Claim, on such terms and

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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conditions as it deems reasonably appropriate, to the extent such Third Party
Claim involves equitable or other non-monetary relief; provided, however, the
Indemnified Party shall not, without the prior written consent of the
Indemnifying Party (which consent shall not to be unreasonably withheld,
conditioned or delayed) enter into any compromise or settlement that would
adversely affect the Indemnifying Party. The Indemnifying Party’s indemnity
obligation shall be reduced by the any amounts the Indemnified Party receives or
shall receive from any third party, including an insurance carrier, for the
Losses.

 

ARTICLE 22
LIMITATION OF LIABILITY

 

22.1.       Limitation of Liability.

 

22.1.1.    Subject to Section 22.1.2 and to Sections 5.1.1.2(vi) and
13.2.3(vii) (which shall be Insmed’s exclusive remedy with respect to claims
related thereto), the maximum aggregate liability of Therapure for all claims,
judgments, demands, actions or suits arising under, out of or related to this
Agreement, including the services contemplated hereby and any claims whether in
contract, tort, strict liability, in equity or otherwise, shall be strictly
limited to:

 

(i)                                     for [***], the [***];

 

(ii)                                  for [***], the [***]; and

 

(iii)                               for [***], the [***].

 

22.1.2.    Notwithstanding anything to the contrary, the exclusive remedies set
forth in Section 5.1.1.2(vi) and Section 13.2.3(vii) and the limitations and
exclusions set forth in Section 22.1.1 shall not apply:

 

(i)                                     in the case of, (A) gross negligence,
wilful misconduct or fraud by Therapure, or (B) any material breach by Therapure
of its confidentiality or non-use obligations under Section 18.1 and 18.2; or

 

(ii)                                  to Therapure’s third party indemnification
obligations under Section 21.2.

 

22.1.3.    EXCEPT FOR:

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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(i)                                     TERMINATION PAYMENTS UNDER SECTION 14.5;

 

(ii)                                  DAMAGES AVAILABLE FOR A PARTY’S BREACH OF
ITS CONFIDENTIALITY OBLIGATIONS UNDER ARTICLE 18; OR

 

(iii)                               AMOUNTS ACTUALLY PAID TO A THIRD PARTY AND A
PARTY’S ACTUAL COSTS INCURRED IN CONNECTION WITH DEFENDING A THIRD PARTY CLAIM
TO THE EXTENT, IN EITHER CASE, THAT A PARTY IS OBLIGATED TO INDEMNIFY THE OTHER
UNDER ARTICLE 21,

 

IN NO EVENT SHALL EITHER PARTY BE LIABLE UNDER ANY LEGAL THEORY, WHETHER IN
CONTRACT OR TORT OR PRODUCTS LIABILITY OR OTHERWISE, FOR ANY INDIRECT,
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES, INCLUDING DAMAGES FOR
LOSS OF BUSINESS PROFITS, BUSINESS LOSSES, BUSINESS INTERRUPTION, WORK STOPPAGE,
LOSS OF DATA, LOSS OF GOODWILL, AND ANY OF THE LIKE), WHETHER FORESEEABLE OR
NOT, THAT ARE IN ANY WAY RELATED TO THIS AGREEMENT.

 

ARTICLE 23
FORCE MAJEURE

 

23.1.       Force Majeure. Neither party shall be held liable or responsible to
the other party for failure to perform or for delays in performing any
obligation under this Agreement if such failure or delay is caused by acts of
God, fires, strike, epidemics, lockout or other industrial dispute, embargoes,
war (whether or not declared), riot, rebellion, insurrections, or other similar
events, or other causes beyond the reasonable control and without the fault or
negligence of the party so affected to the extent it disproportionately affects
the industry in which Insmed or Therapure operates or the processes hereunder (a
“Force Majeure”); provided that such affected party promptly notifies the other
party of the nature of the Force Majeure and provides an estimate of its
expected duration and impact on the performance of such party’s obligations
under this Agreement. The party affected by such Force Majeure shall exercise
reasonable commercial efforts to (i) overcome the Force Majeure and
(ii) mitigate or limit damages to the non-affected party. For clarification, any
action by a Governmental or Regulatory Authority or FDA, Health Canada or EMA,
including the shutdown of a Therapure’s Facility or the Workshop by the FDA or
other Governmental or Regulatory Authority (other than any shutdown due
primarily to the fault or negligence of Therapure) shall constitute a Force
Majeure, provided such action also limits the production, sales or
commercialization ability of a significant number of similarly situated
participants in the industry in which Therapure or Insmed operates. If any Force
Majeure continues for a period of [***] or more, the party that is not subject
to the Force Majeure event shall have the right to terminate this Agreement upon
[***] days prior notice to the other.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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ARTICLE 24
NOTICES

 

24.1.       Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given if
(i) delivered personally, (ii) by telecopy (which transmission is confirmed
electronically), or (iii) sent by overnight courier (providing proof of
delivery) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):

 

If to Therapure:

 

Copy to (which copy shall not constitute notice to Therapure):

 

 

 

Therapure Biopharma Inc.
2585 Meadowpine Blvd.,
Mississauga, Ontario,
Canada L5N 8H9

 

Gowling Lafleur Henderson LLP
1 First Canadian Place
100 King Street West
Suite 1600
Toronto, Ontario, M5X 1G5

 

 

 

Attention: Brian Fielding, Chief Financial Officer and Elaine dos Santos, Law
Clerk
Telephone: [***]
Email: [***]
Email: [***]

 

Attention: Vanessa Grant
Telephone: [***]
Email: [***]

 

 

 

If to Insmed:

 

Copy to (which copy shall not constitute notice to Insmed):

 

 

 

Insmed Incorporated
9 Deer Park Drive, Suite C
Monmouth Junction, NJ 08852

 

Insmed Incorporated
9 Deer Park Drive, Suite C
Monmouth Junction, NJ 08852

 

 

 

Attention: Christine Pellizzari, Corporate Counsel

Telephone: [***]
Email: [***]

 

Attention: Peter Clarke, PhD, Vice President, Technical Operations

Telephone: [***]
Email: [***]

 

Notices shall be effective upon receipt if personally delivered, on the day
following the date of transmission if sent by facsimile, and on the second
business day following the date of delivery to the overnight delivery service if
sent by overnight delivery. A party may change its address listed above by
notice to the other party.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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ARTICLE 25
APPLICABLE LAW

 

25.1.       Applicable Law. This Agreement shall be deemed to be made in and in
all respects shall be construed and interpreted and the rights granted herein
governed in accordance with the laws of the State of New York, regardless of any
laws or principles of conflicts of laws or rules that would cause the
application of the laws of any jurisdiction other than the State of New York.
Subject to Section 37.1.2, the parties hereby irrevocably submit exclusively to
the jurisdiction of the U.S. District Court for the Southern District of New
York, unless such court declines the exercise of jurisdiction, in which case the
courts of the State of New York located in the County, City and State of New
York (and, in each case, any appellate court therefrom), solely in respect of
the interpretation and enforcement of the provisions of this Agreement and of
the documents referred to in this Agreement, and in respect of the transactions
contemplated hereby, and hereby waive, and agree not to assert, as a defense in
any action, suit or proceeding for the interpretation or enforcement hereof or
of any such document, that it is not subject thereto or that such action, suit
or proceeding may not be brought or is not maintainable in said courts or that
the venue thereof may not be appropriate or that this Agreement or any such
document may not be enforced in or by such courts, and the parties irrevocably
agree that all claims with respect to such action or proceeding shall be heard
and determined in said courts. Subject to Section 37.1.2, the parties hereby
consent to and grant any such court jurisdiction over the person of such parties
and over the subject matter of such dispute and agree that mailing of process or
other papers in connection with any such action or proceeding in the manner
provided in Section 24.1 or in such other manner as may be permitted by law
shall be valid and sufficient service thereof. Any process or other papers
hereunder may be served by registered or certified mail, return receipt
requested, or by personal service, provided that a reasonable time for
appearance or response is allowed.

 

EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT:

 

(i)                                     NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER;

 

(ii)                                  EACH PARTY UNDERSTANDS AND HAS CONSIDERED
THE IMPLICATIONS OF THIS WAIVER;

 

(iii)                               EACH PARTY MAKES THIS WAIVER VOLUNTARILY;
AND

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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(iv)                              EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATES IN THIS
Article 25.

 

25.2.       Vienna Convention. The United Nations Convention on Contracts for
the International Sale of Goods (also called the Vienna Convention, and which is
cited in the statutes of Canada as the International Sale of Goods Contracts
Convention Act) will not apply to this Agreement or the transactions
contemplated by this Agreement.

 

ARTICLE 26
DOCUMENTS INCORPORATED BY REFERENCE

 

26.1.       Documents Incorporated by Reference. The following documents shall
be specifically incorporated herein by reference and made a part hereof:

 

(i)                                     the Schedules identified in this
Agreement;

 

(ii)                                  the ARIKACE Specifications; and

 

(iii)                               the Quality Agreement.

 

ARTICLE 27
ASSIGNMENT

 

27.1.       Assignment.

 

27.1.1.    Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned, transferred, delegated or otherwise
disposed of (whether voluntarily or involuntarily, directly or indirectly, by
operation of law, merger, sale of stock, sale of assets or otherwise), by either
party without the prior written consent of the other party, which consent shall
not be unreasonably withheld, conditioned or delayed. Notwithstanding the
foregoing, either party may, without the prior consent of the other party,
assign, transfer, delegate or otherwise dispose of, this Agreement, or any of
its rights, interests or obligations hereunder to:

 

(i)                                     any Affiliate of such party, provided,
that no such assignment shall relieve the assigning party from any of its
obligations hereunder; or

 

(ii)                                  any successor in connection with a Change
of Control of such party, provided that (A) the successor assumes this Agreement
in writing or by operation of law, and (B) if such assignment is in writing,
such party delivers prompt written notice of such assignment to the other party.

 

27.1.2.    Any purported assignment of this Agreement in violation of
Section 27.1.1 shall be null and void.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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27.1.3.    The terms and conditions of this Agreement shall be binding on and
inure to the benefit of the permitted assigns and successors of the parties.

 

ARTICLE 28
FURTHER ASSURANCES

 

28.1.       Further Assurances. Each party agrees to execute and deliver any and
all such other and additional instruments and documents to do any and all such
other acts and things as may be necessary or expedient to effectuate more fully
this Agreement and to carry out the business contemplated by this Agreement.

 

ARTICLE 29
TAXES

 

29.1.       Taxes.

 

29.1.1.    All amounts payable by Insmed to Therapure under this Agreement are
exclusive of applicable Commodity Taxes, if any. Insmed and Therapure agree to
provide a valid exemption certificate to claim exemption from applicable
Commodity Taxes under where required under applicable Law. Insmed shall pay all
Commodity Taxes payable in respect of the export or import of the Amikacin or
purchase of ARIKACE pursuant to this Agreement, and in respect of the subsequent
export, import, sale or distribution of ARIKACE by Insmed (or at Insmed’s
Expense, defend against the imposition of such taxes and expenses). Insmed shall
act as exporter and importer of record of the Amikacin. Therapure shall notify
Insmed of any such taxes that any Governmental or Regulatory Authority requires
Therapure to collect from Insmed, and Insmed may assume the defense thereof in
Therapure’s name, and Therapure agrees to fully cooperate in such defense to the
extent of the capacity of Therapure, at Insmed’s Expense. Therapure shall pay
all Canadian federal income, provincial, municipal or other taxes imposed on
Therapure’s net income resulting from the Manufacture by Therapure of ARIKACE
for Insmed under this Agreement.

 

29.1.2.    All amounts payable by Insmed to Therapure under this Agreement shall
be made free and clear of, and without deduction or withholding for, any present
or future Taxes. If any Taxes are so levied or imposed, Insmed agrees to pay the
full amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement, after withholding or
deduction for or on account of any Taxes, shall not be less than the amount
otherwise required to be paid.

 

ARTICLE 30
ENTIRE AGREEMENT

 

30.1.       Entire Agreement. This Agreement (along with the Quality Agreement
and all documents specifically incorporated herein by reference and made a part
hereof) constitutes the entire agreement of the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements or understandings,
both written and oral (including the Confidentiality

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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Agreement and the Heads of Agreement), with respect to such subject matter
(including any letter of intent or term sheet). No party hereto has made any
representation or warranty or given any covenant to another party hereto except
as set out in this Agreement.

 

ARTICLE 31
SEVERABILITY

 

31.1.       Severability. It is the intention of the parties hereto that the
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions of this Agreement. It is the intention of
the parties hereto that if any provision of this Agreement, or the application
thereof to any person, entity or circumstance, is invalid or unenforceable,
(i) a suitable and equitable provision shall be substituted herefor in order to
carry out, so far as the may be valid and enforceable, the intent and purpose of
such invalid or unenforceable provision and (ii) the remainder of this Agreement
and the application of such provision to other persons, entities or
circumstances shall not be affected by such invalidity or unenforceability, nor
shall such invalidity or unenforceability affect the validity or enforceability
of such provision, or the application thereof, in any other jurisdiction.

 

ARTICLE 32
AMENDMENT AND WAIVER OF AGREEMENT

 

32.1.       Amendment and Waiver of Agreement. This Agreement may not be
amended, supplemented or otherwise modified, except upon the execution and
delivery of a written agreement by the parties hereto. By an instrument in
writing, the parties may waive compliance by the other party hereto with any
provision of this Agreement; provided, however, that any such waiver shall not
operate as a waiver of, or estoppel with respect to, any other or subsequent
failure or with respect to a party hereto that has not executed and delivered
any such waiver. No failure to exercise and no delay in exercising any right,
remedy, or power hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, or power hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy or
power provided herein or by law or at equity.

 

ARTICLE 33
INDEPENDENT CONTRACTOR

 

33.1.       Independent Contractor. From and after the Effective Date, Therapure
shall act as an independent contractor for Insmed or any of its Affiliates, as
the case may be, in providing the services required hereunder and shall not be
considered an agent, partner or joint venturer with Insmed or any of its
Affiliates.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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ARTICLE 34
COUNTERPARTS

 

34.1.       Counterparts. This Agreement may be executed in counterparts, each
of which shall constitute an original and all of which together shall constitute
one and the same instrument. This Agreement may be executed by fax or other
electronic transmission with the same binding effect as original ink signatures.

 

ARTICLE 35
INTERPRETATION

 

35.1.       Interpretation. When a reference is made in this Agreement to
sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. Headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the word “include,” “includes” or “including” are used
in this Agreement, they shall be deemed to be followed by the words “without
limitation”. This Agreement shall not be construed for or against any party
hereto by reason of the authorship or alleged authorship of any provision hereof
or by reason of the status of the respective parties hereto. For all purposes of
this Agreement, words stated in the singular shall be held to include the plural
and vice versa, and words of one gender shall be held to include each other
gender, as the context may require or allow. The terms “hereof,” “herein,” and
“herewith” and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole (and not to any particular
provision of this Agreement). The word “or” shall not be exclusive.

 

ARTICLE 36
NO THIRD PARTY BENEFICIARIES

 

36.1.       No Third Party Beneficiaries. Other than as contemplated in
Article 21, this Agreement is not intended to and does not confer upon any
person or entity other than the parties hereto any legal or equitable rights or
remedies.

 

ARTICLE 37
DISPUTE RESOLUTION

 

37.1.       Dispute Resolution.

 

37.1.1.    Prior to initiating any arbitration proceeding relating to any
disputes arising from or in connection with this Agreement or any transaction
contemplated hereby, including any question regarding its existence, validity,
or termination (any such dispute, a “Controversy”), the parties shall attempt in
good faith to resolve such Controversy promptly by negotiations between
executives who have authority to settle the Controversy and who are at a higher
level of management than the persons with direct responsibility for the issues
in Controversy; provided, however, that notwithstanding this Section 37.1.1, any
Controversy regarding non-conforming ARIKACE or Latent Defects shall be finally
resolved in accordance with Section 13.2.3. All such negotiations shall take
place in New York, New York, or such

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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other location as may be agreed upon by the parties. Either party may give the
other party written notice of any such Controversy at any time. Within [***]
after delivery of this notice, the receiving party shall submit to the other a
written response. The notice and the response shall include: (i) a statement of
the party’s position; and (ii) the name and title of the executive who shall
represent that party and of any other person (who shall, unless otherwise agreed
to by the parties, not be serving in their capacity as inside or outside counsel
to the parties) who shall accompany the executive. Within [***] after delivery
of the notifying party’s notice, the executives of both parties shall meet and
thereafter meet as often as they both reasonably deem necessary, to attempt to
resolve the Controversy. All negotiations pursuant to this clause are
confidential and shall be treated as compromise and settlement negotiations for
purposes of applicable rules of evidence. In the event that such Controversy is
not resolved within a [***] period after delivery of the initial notice or such
longer period to which the parties agree in writing, either party shall be free
to proceed to arbitrate such Controversy in accordance with Section 37.1.2.

 

37.1.2.    Subject to Section 37.1.1, all Controversies, including any question
as to whether a particular Controversy is arbitrable hereunder, shall be
referred to and finally resolved by binding arbitration under the Commercial
Arbitration Rules of the American Arbitration Association by three arbitrators
appointed in accordance with said Rules, with the two co-arbitrators having
[***] days from the appointment of the second arbitrator to nominate the chair.
The place of arbitration shall be New York, New York, and the language to be
used in the arbitral proceedings shall be English. Judgment upon the award may
be entered by any court having jurisdiction as set out in Section 25.1. Except
to the extent necessary to confirm an award or as may be required by law,
neither party nor any arbitrator may disclose the existence, content, or results
of an arbitration without the prior written consent of both parties. The
arbitration tribunal shall determine the legal costs. This Section 37.1.2
applies equally to requests for temporary, preliminary or permanent injunctive
relief, except that in the case of temporary or preliminary injunctive relief,
any party may proceed in court without prior arbitration for the limited purpose
of avoiding immediate and irreparable harm. The provisions of this
Section 37.1.2 shall be enforceable in any court of competent jurisdiction.
Following all permitted discovery and in accordance with procedures otherwise
determined by the arbitrator, each party shall prepare a written report setting
forth its final position with respect to the substance of the Controversy. The
parties agree that they will use reasonable commercial efforts to complete the
arbitration as expeditiously as possible. Judgment upon the award rendered by
such arbitrator shall be binding on the parties and may be entered by any court
having jurisdiction thereof.

 

ARTICLE 38
EXPENSES

 

38.1.       Expenses. Except as otherwise provided in this Agreement, each party
shall pay its own expenses and costs incidental to the preparation of this
Agreement and to the consummation of the transactions contemplated hereby.

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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ARTICLE 39
USE OF NAME

 

39.1.       Use of Name. Neither party may use the name of the other party for
any advertisement, publicity or any other reason unless such use has been
approved in writing or by email by legal counsel of such party (or such other
person that the Chief Executive Officer of such party may designate in writing)
prior to use or publication.

 

ARTICLE 40
AUTHORITY

 

40.1.       Authority. The parties executing this Agreement on behalf of Insmed
and Therapure represent and warrant that they have the authority to enter into
this Agreement and to bind their respective companies to all the terms and
conditions of this Agreement.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE TO FOLLOW]

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be signed by
their duly authorized representatives as of the date first written above.

 

 

THERAPURE BIOPHARMA INC.

 

 

 

By:

/s/ Nicholas Green

 

 

Name: Nicholas Green

 

 

Title: President & CEO

 

 

 

 

By:

/s/ Brian Fielding

 

 

Name: Brian Fielding

 

 

Title: VP Finance & CFO

 

 

 

 

INSMED INCORPORATED

 

 

 

By:

/s/ Matthew Pauls

 

 

Name: Matthew Pauls

 

 

Title: Chief Commercial Officer

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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SCHEDULE A

 

TECHNOLOGY TRANSFER ACTIVITIES QUOTE

 

[See attached.]

 

[***]

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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SCHEDULE B

PROCESS FLOW DIAGRAM

 

[See attached.]

 

[***]

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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SCHEDULE C

 

MINIMUM COMMITMENTS

 

Year

 

[***]

 

[***]

 

[***]

 

[***] and
Beyond

 

Annual Minimum Batch Processing Fee Amount (Dollars)

 

$

[***]

 

$

[***]

 

$

[***]

 

$

[***]

 

 

Per Section 6.1, by way of example only, and using hypothetical assumptions:

 

If in [***]: (i) Annual Minimum Batch Processing Fee Amount was $[***] and
(ii) actual aggregate Batch Processing Fee paid by Insmed was $[***] for such
Year, then the True-Up Payment payable by Insmed to Therapure for such Year
shall be equal to $[***]; provided, however, that [***] percent of the cost of
the Clean Room Consumables (or $[***], assuming the cost of the Clean
Room Consumables was $[***]) and, if Therapure is able to its sole satisfaction
to reallocate the Allocated Minimum Batch Labour, [***] percent of the cost of
the Reallocated Minimum Batch Labour (or $[***], assuming the cost of the
Reallocated Minimum Batch Labour was $[***]) shall be credited against the
True-Up Payment, such that the True-Up Payment would be reduced to $[***].

 

Additional Indication Approved in [***]

 

If in [***] an additional Indication is approved, the Annual Minimum Batch
Processing Fee Amount for [***] would automatically be increased to $[***].
Consequently, if the actual aggregate Batch Processing Fee paid by Insmed is
$[***] for [***], then the True-Up Payment would be $[***]; provided, however,
that [***] percent of the cost of the Clean Room Consumables (or $[***],
assuming the cost of the Clean Room Consumables was $[***]) and, if Therapure is
able to its sole satisfaction to reallocate the Allocated Minimum Batch Labour,
[***] percent of the cost of the Reallocated Minimum Batch Labour (or $[***],
assuming the cost of the Reallocated Minimum Batch Labour was $[***]) shall be
credited against the True-Up Payment, such that the True-Up Payment would be
reduced to $[***].

 

Additional Indication Approved in [***]

 

If in [***] an additional Indication is approved, the Annual Minimum Batch
Processing Fee Amount for [***] would automatically be increased to $[***].
Consequently, if the actual aggregate Batch Processing Fee paid by Insmed is
$[***] for [***], then the True-Up Payment would be $[***] provided, however,
that [***] percent of the cost of the Clean Room Consumables (or $[***],
assuming the cost of the Clean Room Consumables was $[***]) and, if Therapure is
able to its sole satisfaction to reallocate the Allocated Minimum Batch Labour,
[***] percent of the cost of the Reallocated Minimum Batch Labour (or $[***],
assuming the cost of the Reallocated Minimum Batch Labour

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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was $[***]) shall be credited against the True-Up Payment, such that the True-Up
Payment would be reduced to $[***].

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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SCHEDULE D

 

DEMAND FORECASTING EXAMPLES

 

[***]

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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SCHEDULE E

 

WORKSHOP CONSTRUCTION PLAN

 

[See attached.]

 

[***]

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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SCHEDULE F

 

BASIS OF DESIGN

 

[See attached.]

 

[***]

 

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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

 

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