Exhibit 10.29

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

Execution Version

Outsourcing Agreement

Between

Paratek Pharmaceuticals, Inc.

and

CARBOGEN AMCIS AG

Date

30 December 2016

 

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

Table of Contents

 

Article 1

 

Interpretation

 

6

1.1

 

Definitions

 

6

1.2

 

Other Definitions

 

10

1.3

 

Currency

 

10

1.4

 

Headings

 

10

1.5

 

Exhibits

 

10

1.6

 

Applicable Law

 

10

Article 2

 

Term

 

10

2.1

 

Term

 

 

2.2

 

Effect of Expiration on Purchase Orders

 

11

Article 3

 

Supply of Product

 

11

3.1

 

Supply of Product

 

 

3.2

 

Manufacturing Services

 

12

3.3

 

Supply of Materials and Customer Material

 

12

3.4

 

Production Capacity

 

14

3.5

 

Processing Changes

 

14

3.6

 

Monitoring of Facilities

 

14

3.7

 

Subcontracting

 

15

3.8

 

[* * *]

 

 

3.9

 

[* * *]

 

 

3.1

 

Territory Expansion

 

15

3.11

 

Supply to Customer Licensees

 

16

3.12

 

Alternative Supply

 

16

Article 4

 

Forecasts

 

16

4.1

 

Short Term Rolling Forecasts

 

16

4.2

 

Long Term Forecasts

 

17

Article 5

 

Testing and Samples

 

17

5.1

 

Release Testing

 

17

5.2

 

Additional Release Testing

 

18

5.3

 

Retention Samples

 

18

5.4

 

Stability Testing

 

18

5.5

 

Reference Standards

 

18

CONFIDENTIAL

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

 

5.6

 

Preparation of Process Qualification

 

18

Article 6

 

Purchase Orders

 

19

6.1

 

Placement of Purchase Orders

 

19

6.2

 

Acceptance of Orders

 

19

6.3

 

Delays

 

19

6.4

 

Cancellation of Purchase Orders

 

20

6.5

 

Material Failure of Supply

 

20

6.6

 

Services

 

20

Article 7

 

Shipment of Product

 

20

7.1

 

Storage of Product

 

20

7.2

 

Release and Shipment of Product

 

21

7.3

 

Documentation

 

21

7.4

 

Steering Committee

 

21

Article 8

 

Acceptance of Shipments

 

22

8.1

 

Acceptance of Shipments

 

22

8.2

 

Dispute of Rejected Product

 

22

8.3

 

Remedies

 

23

Article 9

 

Fees

 

23

9.1

 

Fees

 

23

9.2

 

Adjustments to Fees

 

23

9.3

 

Taxes

 

24

Article 10

 

Invoicing and Payment

 

24

10.1

 

Issuance of Invoices

 

24

10.2

 

Invoice Contents

 

24

10.3

 

Delay of Shipment

 

25

10.4

 

Payment of Invoices

 

25

Article 11

 

Intellectual Property

 

25

11.1

 

Title

 

25

11.2

 

No Grant of Rights

 

25

11.3

 

Grant of License by Customer

 

26

11.4

 

Ownership of Inventions

 

26

11.5

 

Patents to Inventions

 

26

CONFIDENTIAL

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

 

11.6

 

No Use of Trademarks

 

26

11.7

 

[* * *]

 

26

Article 12

 

Confidentiality & Publicity

 

27

12.1

 

Obligation of Confidentiality

 

27

12.2

 

Disclosure with Consent

 

27

12.3

 

Publicity

 

28

12.4

 

Disclosure Required by Law

 

28

12.5

 

Employee Confidentiality and Invention Assignment

 

28

12.6

 

Duration of Obligation

 

28

Article 13

 

Representations, Warranties and Covenants

 

29

13.1

 

Supplier’s Representations, Warranties and Covenants

 

29

13.2

 

Customer’s Representations, Warranties and Covenants

 

30

13.3

 

No Other Warranty

 

30

13.4

 

No Consequential Damages and Limitation of Liability

 

31

Article 14

 

Indemnification

 

31

14.1

 

Indemnification of Supplier

 

31

14.2

 

Indemnification of Customer

 

32

14.3

 

[* * *]

 

32

14.4

 

Indemnification Procedure

 

32

Article 15

 

Insurance

 

32

15.1

 

Insurance Coverage

 

32

15.2

 

Evidence of Insurance

 

33

Article 16

 

Legal and Regulatory

 

33

16.1

 

Compliance with Laws

 

33

16.2

 

Maintenance of Records

 

33

16.3

 

Notice of Reports

 

33

16.4

 

Drug Master Files

 

34

16.5

 

Compliance with Regulatory Standards

 

34

16.6

 

Inspection

 

34

Article 17

 

Recalls

 

34

17.1

 

Safety

 

34

17.2

 

Recalls

 

34

CONFIDENTIAL

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

 

17.3

 

Supplier’s Liability for Recall

 

35

17.4

 

Customer’s Liability for Recall

 

35

17.5

 

Replacement Shipments

 

35

Article 18

 

Termination

 

35

18.1

 

Termination

 

35

18.2

 

Consequences of Termination

 

36

18.3

 

Return of Samples

 

37

18.4

 

Return of Confidential Information

 

37

18.5

 

Survival

 

38

Article 19

 

Miscellaneous

 

38

19.1

 

Assignment; Inurement

 

38

19.2

 

Change of Control

 

39

19.3

 

Counterparts

 

39

19.4

 

Dispute Resolution

 

39

19.5

 

Force Majeure

 

39

19.6

 

Performance

 

40

19.7

 

Further Assurances

 

40

19.8

 

Independent Contractors

 

40

19.9

 

Injunctions

 

40

19.1

 

Notices

 

40

19.11

 

Entire Agreement

 

41

19.12

 

Severability

 

41

19.13

 

Waiver

 

42

 

CONFIDENTIAL

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

THIS AGREEMENT (this “Agreement”), dated December 30, 2016 (the “Effective
Date”), is

BETWEEN:

Paratek Pharmaceuticals, Inc., a company having a place of business at 75 Park
Plaza, 4th Floor, Boston, MA 02116, USA (“Customer”)

AND:

CARBOGEN AMCIS AG, a company having a place of business at Hauptstrasse 171, CH
4416 Bubendorf, Switzerland (“Supplier” and, collectively with Customer, the
“Parties”, and each, a “Party).

WHEREAS:

A.Customer is the owner of certain technology and patent rights regarding the
Product (as defined herein) having the description set out in Exhibit A
(Description of Product) and Exhibit B (Chemical Synthesis);

B.Customer has filed / intends to file for approval with the United States Food
and Drug Administration and/or its foreign equivalents, an Investigational New
Drug Application (“IND”) and a New Drug Application (“NDA”), and/or the foreign
equivalents thereof, for certain formulations containing the Product;

C.Supplier is engaged in the business of performing contracted process
development, Manufacturing and supply services of active pharmaceutical
ingredients (“APIs”) and intermediates; and

D.Customer desires that Supplier Manufacture the Product in bulk quantities, and
Supplier desires to perform such services, each on the terms and conditions set
out in this Agreement.

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

Article 1

Interpretation

1.1

Definitions

In this Agreement, in addition to words and phrases defined where they are used,
the following words and phrases shall have the following meanings:

a)“Affiliate” of a Party shall mean any entity, directly or indirectly,
controlling, controlled by, or under common control with a Party.  For purposes
of this definition, "controlling" (including, “controlled by” and “under common
control”) shall mean:  (a) ownership of at least fifty percent (50%) of the
equity capital or other ownership interest in or of an entity; (b) the power to
control or otherwise direct the affairs of an entity; (c) in the case of
non-stock organizations, the power to control the distribution of profits of an
entity;

CONFIDENTIAL

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

or (d) such other relationship as, in fact, results in actual control over the
management, business, and affairs of an entity;

b)“Agreement” means this Supply Agreement for the Product, including all
Exhibits attached hereto;

c)“Applicable Law” means any applicable law, statute, rule, regulation, order,
judgment or ordinance of any governmental or regulatory authority or agency;

d)“Applicable Regulatory Authority” means FDA, EMEA and/or other equivalent
governmental or regulatory authorities or agencies and any successors thereto;

e)“Business Day” means any day on which banking institutions in Boston,
Massachusetts and Bubendorf, Switzerland are open for business;

f)“Campaign” means a schedule of one or more discrete batches of Product
Manufactured in sequence by Supplier without pausing to change over to
manufacture of any other product;

g)“cGMP Requirements” means the current Good Manufacturing Practices standards
required under ICH Q7A guideline and/or any similar standards of applicable
governmental and/or regulatory authorities as defined in the Quality Agreement;

h)“Change of Control” means any transaction or series of transactions wherein
(a) the voting securities of Supplier outstanding immediately prior thereto
cease to represent at least fifty percent (50%) of the combined voting power of
the surviving entity immediately after such transaction or transactions; (b) the
stockholders or equity holders of Supplier approve a plan of complete
liquidation of Supplier, or an agreement for the sale or disposition by Supplier
of all or substantially all of Supplier’s assets, other than to an Affiliate;
(c) a Third Party becomes the beneficial owner of fifty percent (50%) or more of
the combined voting power of the outstanding securities of Supplier; or (d)
substantially all of Supplier’s business or assets which relate to this
Agreement are sold or otherwise transferred to a Third Party;

i)“Chemical Synthesis” means established and reliable execution of chemical
reactions in order to produce the “Product” by applying chemical and physical
manipulations usually involving one or more reactions;

j)“Confidential Information” means all written information and data provided by
the Parties to each other hereunder and identified as being “Confidential” and
provided to the recipient, except that the term “Confidential Information” shall
not apply to any information or any portion thereof which:

(i) was known to the recipient or any of its Affiliates, as evidenced by its
written records, before receipt thereof under this Agreement;

(ii) is disclosed to the recipient or any of its Affiliates, without obligations
of confidentiality, during the Term by a Third Party who has the right to make
such disclosure;

(iii) is or becomes part of the public domain through no breach of this
Agreement by the recipient; or

CONFIDENTIAL

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

(iv) the recipient can demonstrate through competent written records is
independently developed by or for the recipient or any of its Affiliates by
individuals or entities who have not had access to the information disclosed
under this Agreement.

The Confidential Information may include, without limitation, data, know-how,
formulae, processes, designs, sketches, photographs, plans, drawings,
specifications, samples, reports, studies, data, findings, inventions, ideas,
production facilities, machines, production capacities, prices, market share,
research and development projects, and other market data.  For the purposes of
this Agreement, Master Batch Record shall be deemed the Confidential Information
of Customer and the Product Specifications shall be deemed the Confidential
Information of Customer;

k)“Customer Licensee” means any Third Party to whom Customer grants a license or
a right to research, develop, make, have made, use, sell, have sold, import,
export or otherwise exploit a Product or Customer Product;

l)“Customer Material” means the compound satisfying the Customer Material
Specification;

m)“Customer Material Specifications” means the specifications for the Customer
Material set forth in the Quality Agreement, as such may be amended from time to
time in accordance with its terms;

n)“Customer Product” means any pharmaceutical product owned, controlled or sold
by Customer, its Affiliates or Customer Licensees that incorporates or is
derived from a Product;

o) “Customer Technology” means:

[* * *];

p)“Drug Master File” or “DMF” means a submission to the Applicable Regulatory
Authority that provides detailed information about facilities, processes or
articles used in the Manufacture, processing, packaging and storing of a drug or
excipient, among others, in order to obtain appropriate Applicable Regulatory
Authority approval for the production for that drug;

q)“EMEA” means the European Medicines Agency and any successors thereto;

r)“FDA” means the United States Food and Drug Administration and any successors
thereto;

s)“FD&C Act” means the Federal Food, Drug and Cosmetic Act, as the same may be
amended or supplemented from time to time;

t)“Fees” means the fees specified in Exhibit C, as may be amended by the Parties
in accordance with this Agreement;

u)“Improvements” means, in relation to any Intellectual Property, any and all
versions, adaptations, modifications, improvements, enhancements, changes,
revisions, translations and derivative works (whether complete or incomplete),
of, to, in or based upon such Intellectual Property;

v)“Intellectual Property” means anything that is protected by any Rights in and
to any and all patents, trade-marks, copyrights, industrial designs,
Confidential Information, know-how and processes,

CONFIDENTIAL

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

and all other intellectual and industrial property Rights whatsoever and
world-wide (whether registered or unregistered and including Rights in any
application for any of the foregoing);

w)“Manufacture,” “Manufactured” or “Manufacturing” means all activities involved
in the production of Products to be supplied to Customer or its Affiliates
hereunder, including the preparation, formulation, finishing, testing, storage
and packaging for shipment of Products and the handling, storage and disposal of
any residues or wastes generated thereby;

x)“Manufacturing Process” means the activities set out in (a) this Agreement,
(b) the Master Batch Record and (c) Supplier’s standard operating procedures for
the Manufacturing, characterization and testing, and bulk packaging and storage
of the Product;

y)“Master Batch Record” means the complete detailed Manufacturing and control
instructions and specifications for the Manufacturing Process for the Product,
as defined by the applicable validation protocol and cGMP Requirements, as may
be amended from time to time; in accordance with cGMP Requirements, or by mutual
agreement of both Customer and Supplier;

z)“Materials” means any and all materials, reagents, chemicals, compounds,
physical samples, models, specimens and any other similar physical substances
that are used in the Manufacture of the Product except for Customer Materials,
including processes and activities leading up to and peripheral to the
Manufacture of the Product;

aa)“Product” means the compound product as described in Exhibit A satisfying the
Product Specifications;

bb)“Product Specifications” means the specifications for the Product set forth
in the Quality Agreement, as such may be amended from time to time in accordance
with its terms;

cc)“Quality Agreement” shall mean that certain Quality Agreement Relating to
Contract Manufacturing Services by and between Customer and Supplier, dated
December 22, 2016;

dd)“Recall” means any action by Supplier, Customer or any of their respective
Affiliates, to recover possession of the Product or finished products containing
the Product shipped to Third Parties.  “Recalled” and “Recalling” shall have
comparable meanings;

ee)“Rights” shall mean any and all proprietary, possessory, use and ownership
rights, titles and interests (whether beneficial or legal) of all kinds
whatsoever, howsoever arising, world-wide and whether partial or whole in
nature;

ff)“Seizure” means any action by an Applicable Regulatory Authority in any
jurisdiction, to detain or destroy any Product or any intermediate or finished
products containing the Product or prevent release of the Product or finished
products containing the Product.  “Seized” and “Seizing” shall have comparable
meanings;

gg) “Services” refers to any activities undertaken by Supplier relating to the
Product, as referenced in Section 6.6 (Services);

CONFIDENTIAL

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

hh)“Supplier Technology” means, to the extent such is not Customer Technology:
[* * *];

ii) “Term” means the Initial Term and the Renewal Term, if applicable;

jj)“Territory” means the United States of America and its territories and
possessions and any other countries in the world added to the definition of
“Territory” pursuant to Section 3.10;

kk)“Third Party” means any party other than a Party to this Agreement or an
Affiliate of a Party to this Agreement; and

ll)“Yield” means, with respect to any batch of Product manufactured by Supplier
under this Agreement, a percentage equal to the amount of Customer Material
contained in such batch of Product delivered and accepted by Customer under this
Agreement divided by the amount of Customer Material used in the Manufacturing
Process of such batch of Product.

1.2

Other Definitions

Any words defined elsewhere in this Agreement shall have the particular meaning
assigned to the words.  

1.3

Currency

In this Agreement, all references to money or payments means U.S. Dollars and
all payments made hereunder shall be made in that currency.  

1.4

Headings

The headings in this Agreement are solely for convenience of reference and shall
not be used for purposes of interpreting or construing the provisions hereof.

1.5

Exhibits

The Exhibits attached hereto shall be deemed to form an integral part of this
Agreement. In the event of a conflict between the terms and conditions set out
in this Agreement and the terms and conditions set out in any Exhibit hereto,
the terms and conditions set out in this Agreement shall govern.

1.6

Applicable Law

This Agreement shall be governed by and construed in accordance with the
substantive Laws of the [* * *], excluding any rules of conflicts of laws that
would apply the substantive laws of any other jurisdiction.

Article 2

Term

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

2.1

Term

[* * *]

This Agreement shall commence on the Effective Date and shall be valid until the
[* * *] (the “Initial Term”). Both Parties shall use reasonably diligent efforts
to come to a subsequent long-term agreement, including good faith negotiations
regarding minimum volume-based Product commitments from Customer to Supplier, no
later than [* * *] to replace this Agreement and serve as a long-term supply
agreement between the Parties.   Should the Parties have not agreed to the
following agreement by [* * *], this Agreement shall automatically stay in force
for a maximum of [* * *] (unless otherwise mutually agreed by the Parties or as
otherwise set forth in Section 18.1(a)) or until the Parties have signed the
follow-on agreement (the “Renewal Term”).

2.2

Effect of Expiration on Purchase Orders

For the avoidance of doubt, any signed Purchase Order which has not been
completed at the date of expiry shall continue in effect unless cancelled in
accordance with Section 6.4 or Article 18. For further avoidance of doubt, the
terms and conditions of this Agreement shall remain applicable to any such
signed Purchase Order which continues in effect.

Article 3

Supply of Product

3.1

Supply of Product

a) During the Term, Supplier shall Manufacture the Product and perform all
Services at its facilities located at Bubendorf, Switzerland and at Neuland,
Switzerland (such facilities, the “Facilities” and each, a
“Facility”).  Supplier will supply to Customer or Customer’s designee, the
Product, Manufactured in accordance with the accepted  Purchase Order placed by
Customer, Master Batch Record, the Product Specifications, the Quality Agreement
and cGMP Requirements and, subject to Section 3.1(b), in such quantities as
ordered by Customer in Purchase Orders submitted pursuant to Section 6.1 and
accepted pursuant to Section 6.2.

b) [* * *]  

c) [* * *]  

d) In the event the Product manufactured and delivered to Customer under a
Purchase Order is less than [* * *] of the amount ordered by Customer under such
Purchase Order or if Customer otherwise reasonably requests, [* * *].

d) For clarity, nothing in this Section 3.1 limits Supplier’s liability under
this Agreement or under law, including liability for negligence, willful
misconduct and failure to comply with Product Specifications; [* * *].

CONFIDENTIAL

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

3.2

Manufacturing Services

Supplier will make available its labor, equipment and Facilities for the
Manufacture and characterization of the Product, including in-process and
quality control analyses, release testing, storage and bulk packaging of the
Product, and shipping of the Product, in accordance with the terms and
conditions of this Agreement.

3.3

Supply of Materials and Customer Material

 

a)

Materials

 

i.

Supplier shall, at its cost, be responsible for the purchase, planning, supply,
control, testing, release and compliance of all Materials (other than Customer
Materials unless expressly otherwise set forth in this Agreement) required for
the Manufacture of the Product and performance of Services under accepted
Purchase Orders.  

 

ii.

Supplier shall ensure that all Materials (other than Customer Material unless
expressly otherwise set forth in this Agreement) used in the Manufacture of the
Product and performance of Services shall comply with the specifications
mutually agreed by the Parties in writing and applicable requirements of the
Quality Agreement.  

 

iii.

Supplier shall test and inspect all Materials as set forth in the Quality
Agreement and Supplier’s standard incoming inspection and testing procedures,
which at a minimum will include appearance and identity testing.  

 

b)

Customer Material

 

i.

Customer or its designee (for which Customer is responsible) shall, at its cost,
be responsible for the planning, supply, control, testing, release and
compliance of all Customer Materials supplied to Supplier that are required for
the Manufacture of the Product and performance of Services under accepted
Purchase Orders. Customer shall ensure that all Customer Materials meet the
Customer Material Specifications.

 

ii.

Customer or its designee (for which Customer is responsible) shall, at its cost,
be responsible for the qualification of suppliers of Customer Materials.

 

iii.

Customer or its designee (for which Customer is responsible) shall ensure that
all Customer Materials used in the Manufacture of the Product and performance of
Services shall meet applicable requirements set forth in the Quality Agreement.

 

iv.

Supplier shall test and inspect all Customer Materials in accordance with the
Quality Agreement and Supplier’s standard incoming inspection and testing
procedures. Supplier shall also independently release Customer Materials (but
Supplier shall not use any Customer Materials that have not also been released
by Customer).

 

v.

Upon receipt of a Purchase Order from Customer, Supplier will inform Customer of
the latest delivery date required for Customer Materials [* * *]. Customer will
use commercially reasonable efforts to coordinate delivery of Customer Materials
by that date according to [* * *].

CONFIDENTIAL

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

 

vi.

If Customer is unable to deliver Customer Materials by the date required by
Supplier, this will be promptly communicated to Supplier. Supplier will use
commercially reasonable efforts to reallocate capacity and accommodate the
planned Campaign at a later date. [* * *]  Supplier will be released from its
obligation under the relevant Purchase Order and any associated penalties
regarding delivery date for the corresponding Product.  In the event of any such
delay in the delivery of Customer Materials to Supplier, the Parties shall
negotiate in good faith and agree upon a revised schedule for the supply of
Products to Customer or its designee, which revised schedule shall be binding on
Supplier in accordance with this Agreement.

 

vii.

In the event that Customer Materials delivered to Supplier are found by Supplier
to be non-conforming to the Customer Material Specifications at the time of
delivery of such Customer Materials to Supplier and Customer challenges this
finding, the Parties shall conduct a joint investigation.  If Supplier and
Customer are unable to resolve the issue of non-compliance then a sample of the
relevant Customer Material will be submitted to an independent laboratory
reasonably acceptable to both Parties for testing against the Customer Material
Specifications, and determination whether or not the Customer Material did not
comply with the Customer Material Specifications at the time of delivery to
Supplier.  The test results of the independent laboratory testing shall be final
and binding upon Customer and Supplier, and the fees and expense of such
laboratory testing and the out-of-pocket costs reasonably incurred by the
Parties in the joint investigation shall be [* * *]  In such event, except as
set forth in Section 3.3(b)(vi), Supplier shall be released from its obligation
with respect to the relevant Purchase Order and any associated penalties
regarding a delayed delivery date for the corresponding Product under such
Purchase Order.  In the event that Customer delivers any such non-conforming
Customer Materials, the Parties shall negotiate in good faith and agree upon a
revised schedule for the supply of Products to Customer or its designee, which
revised schedule shall be binding on Supplier in accordance with this Agreement.

 

viii.

Customer will provide Supplier with a Certificate of Analysis, a BSE/TSE
statement and a Certificate of Compliance, data on the chemical and physical
properties, toxicity, and handling, storing, and shipping information for any
Customer Materials (MSDS or equivalent) and any other information that is
necessary for the safe handling and transportation of Customer Materials.
Customer shall update all of such information provided to Supplier after such
updated information becomes available or known to Customer.

Following receipt of Customer Materials from Customer and until the delivery of
Product containing such Customer Materials, Supplier shall bear the risk of any
loss of or damage to such Customer Materials resulting from [* * *].  Supplier
shall retain exclusive control over Customer Materials and shall not transfer
any portion of them to any Third Party without the prior written consent of
Customer. Supplier shall identify Customer Materials at all times as Customer
property and shall segregate same from other substances except as needed for the
Manufacture of the Product and performance of the Services.  Supplier shall not
take any action inconsistent with Customer’s ownership interest in Customer
Materials, including but not limited to, Supplier shall keep Customer Materials
free and clear of any liens,

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encumbrances, or security interests resulting from the actions or omissions of
Supplier or its Affiliates and, in the event of any such liens, encumbrances, or
security interests, Supplier shall promptly remove same at its sole expense.  

3.4

Production Capacity

Supplier agrees to provide to Customer all such facility and Manufacturing
capacity to perform the Manufacturing Process as required to meet the Product
requirements as described in the then-current Short Term Rolling Forecast (as
defined below).  Supplier agrees that it shall provide to Customer at least [* *
*] prior written notice of any scheduled shutdown at any Facility that may
impact Supplier’s ability to Manufacture and timely deliver the Product to
Customer under this Agreement, [* * *].

For the avoidance of doubt, Supplier confirms that it has the capacity to
deliver [* * *], or such adjusted amount as mutually agreed by the Parties.
Batch size and annual capacity could be adjusted in the future by mutual
agreement of the Parties based on results of ongoing scale up work.

3.5

Processing Changes

a)Supplier shall not make any material changes to the Manufacturing Process,
starting materials, the Master Batch Record or Product Specifications for the
Manufacture of the Product except in accordance with the Quality Agreement.  For
clarity, formatting changes in the documentation related to the Master Batch
Record shall not be deemed a “material” change under this Section 3.5(a).

b)Customer (or Supplier, if changes are necessitated by Applicable Law) may
request reasonable changes to the Manufacturing Process, the Master Batch
Record, the Product Specifications, storage, testing or analytical methods or
any starting materials for the Manufacture of the Product [* * *].  The notice
of any such change by Customer shall comply with the cGMP documentation system
and standard operating procedures maintained by Supplier at the Facilities. No
material modifications or additions to the machinery, equipment and other fixed
assets used by Supplier in the manufacture and supply of the Product to Customer
shall be required without the consent of Supplier, which consent may be granted
or withheld in Supplier’s sole discretion.

c)In the event of a change to the Manufacturing Process, the Master Batch Record
or the Product Specifications, the relevant documents and related Exhibits to
this Agreement will be revised accordingly.

d)All operational Master Batch Records and standard operating procedures
utilized by Supplier are in the German language. Any requirement by Customer for
translation of such records will be billed at cost.

3.6

Monitoring of Facilities

Customer shall have the right to have a representative present at each Facility
to observe the performance of the Manufacturing Process by Supplier during
normal business hours with at least [* * *] advance notice.   Supplier shall
have the right to reasonably restrict such observation access to prevent

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undue interference with Supplier’s business operations or compromise Supplier’s
confidentiality obligations to Third Parties; provided, however, Customer’s
observation access shall be absolute with regard to the Manufacturing Process
for the Product.  As such it is Supplier’s obligation to segregate Third Party
documents and materials from Customer’s documents and materials and Customer
will not be restricted from observing any part of Customer’s Manufacturing
Process and related documentation.

3.7

Subcontracting

Supplier shall obtain Customer’s prior written approval, in accordance with the
Quality Agreement, to use a subcontractor to perform services under this
Agreement, such approval not to be unreasonably withheld, conditioned or
delayed. Any and all such contractors shall perform such services in accordance
with the terms and conditions of this Agreement, and Supplier shall remain
liable for the performance of its obligations under this Agreement. Supplier may
use the Third Party suppliers set forth in Schedule 4 of the Quality Agreement
for such specific activities set forth opposite their respective name(s) in such
Schedule.   It is hereby agreed that Customer may authorize the use of
additional Third Party suppliers under this Agreement in accordance with the
Quality Agreement. Supplier agrees to use the Third Party suppliers identified,
as applicable, in Schedule 4 of the Quality Agreement as the exclusive suppliers
of starting materials for the Product Manufacturing Process and any deviation
from said supply sources requires the prior written approval of Customer, in
accordance with the Quality Agreement, such approval not to be unreasonably
withheld, conditioned or delayed.

3.8

[* * *]

3.9

[* * *]

3.10

Territory Expansion

At any time during the Term, Customer may provide written notice to Supplier of
its intent to expand the Territory under this Agreement to include one or more
additional countries or territories.  Promptly following such notification, the
Steering Committee (as defined below) shall meet to discuss any expansion of
Supplier‘s Manufacturing capabilities necessitated by such expansion in
accordance with clause (b) of Section 7.4 and the Parties shall execute an
amendment that (a) amends the definition of “Territory” under clause jj) of
Section 1.1 to include such additional countries or territories and (b) modifies
the provisions of this Agreement as necessary in order to reflect the regulatory
requirements of such additional countries or territories.  For clarity, neither
Party shall be obligated to amend the definition of Territory at any point
during the Term.

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3.11

Supply to Customer Licensees

In the event Customer delivers a written request to Supplier requesting that
Supplier engage in negotiations with a Customer Licensee on the terms of a
definitive agreement pursuant to which Supplier would Manufacture and supply
Product to such Customer Licensee or a designee of a Customer Licensee, Supplier
shall use commercially reasonable good faith efforts to negotiate and execute
such agreement on substantially the same terms of this Agreement (including
pricing, orders, forecasting, delivery, non-conformance, failure to supply, term
and termination).

3.12

Alternative Supply

At any time during the Term, Customer may elect to qualify one or more
alternative Manufacturing facilities (whether owned by a Third Party, Customer
or by one of Customer’s Affiliates) to Manufacture the Products (each, a “Backup
Supplier”).  Customer shall be responsible for any costs associated with
qualifying Backup Suppliers.  [* * *].  Supplier shall use commercially
reasonable efforts to cooperate with the qualification of any Backup Supplier,
including (a) technology transfer of all Supplier Technology necessary or useful
for the Manufacture of the Products; provided that, to the extent that such
technology and know-how constitutes Confidential Information of Supplier, it
shall be subject to the provisions of Article 12 and Customer’s designated
alternative supplier shall be required to enter into a confidentiality agreement
with Supplier containing substantially the same terms as Article 12 and (b)
providing Customer and any Backup Supplier with consulting services related to
the Manufacture, quality control and quality assurance of the Products. Any work
related to technology transfer or qualification of a second supplier shall be
considered as Services under this Agreement as described in Section 6.6.  For
the avoidance of doubt, Supplier will first prepare a customary Scope of Work
describing the Services to be performed and the costs to Customer for the
approval of Customer.  No Services shall be commenced by Supplier unless (a) a
customary Scope of Work relating to such Services has been agreed, executed and
delivered by both Supplier and Customer; and (b) a Purchase Order has been
issued by Customer and accepted by Supplier relating to such Services, which
Purchase Order references the specific Scope of Work and this Agreement.  In
case of disagreement on the Scope of Work, the Parties will enter into good
faith negotiations to reach a mutually satisfactory resolution.

Article 4

Forecasts

4.1

Short Term Rolling Forecasts

Commencing on the Effective Date, Customer shall provide to Supplier on a
calendar quarterly basis on or before the last Business Day of each calendar
quarter during the Term, a short term rolling forecast for the [* * *] period
commencing on the first day of the following calendar month (each, a “Short Term
Rolling Forecast”).  Each Short Term Rolling Forecast shall set out Customer's
reasonable and genuine

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estimate of the quantities of the Product to be ordered by Customer and to be
delivered by Supplier under this Agreement for the following [* * *].

(A): In case of an order volume equal or less than [* * *]: The first [* * *] of
each short term rolling forecast shall be binding firm purchase orders by
Customer (each a “Purchase Order”) and the last [* * *] of each short term
rolling forecast shall be non-binding, good faith estimates. Customer shall
provide Supplier with one or more Purchase Order(s) for Product consistent with
the first [* * *] binding portion of each Short Term Rolling Forecast, at least
[* * *] in advance of the scheduled delivery dates provided in such Purchase
Order(s).

(B): In case of order volume larger than [* * *]: The first [* * *] of each
short term rolling forecast shall be binding firm purchase orders by Customer
(each a “Purchase Order”) and the last [* * *] of each short term rolling
forecast shall be non-binding, good faith estimates. Customer shall provide
Supplier with one or more Purchase Order(s) for Product consistent with the
first [* * *] binding portion of each Short Term Rolling Forecast, at least [* *
*] in advance of the scheduled delivery dates provided in such Purchase
Order(s).

4.2

Long Term Forecasts

Within [* * *] after the Effective Date, Customer shall provide to Supplier a
long term forecast of the estimated quantities of the Product required by
Customer from Supplier during the following [* * *] (the “Long Term
Forecast”).  Customer shall during the Term provide to Supplier together with
the Short Term Rolling Forecast, on a calendar quarter basis, updates of such
Long Term Forecasts for the following [* * *] (or the balance of the Term, if
shorter). For the avoidance of doubt, the first [* * *] of each Long Term
Forecast shall constitute the Short Term Rolling Forecast of which the first [*
* *], or the first [* * *], as the case may be due to the order volume, shall be
binding and the remainder of the Short Term Rolling Forecast and Long Term
Forecast shall be non-binding.

Article 5

Testing and Samples

5.1

Release Testing

a)Supplier shall perform release testing of all batches of Product prior to
delivery to Customer in accordance with the Product Specifications and the
Master Batch Record, to determine whether such batches of Product meet the
requirements set out in the Product Specifications.  Customer shall be
responsible for the final release of Product prior to shipping and further
processing.

b)Supplier shall ensure that:

(i) its quality assurance department approves each batch of Product for release
promptly following successful completion of release testing done by its quality
control department (in this section “promptly” means [* * *]); and

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(ii) its quality assurance department does not release any batch of Product that
does not meet the requirements set out in the Product Specifications without
prior written consent of Customer.

c)Supplier shall prepare a Certificate of Analysis and Certificate of
Conformance, setting out the results of the release testing and which shall be
included with each batch of Product shipped to Customer.

d)Customer shall have the right to oversee the activities set forth in this
Section 5.1 in accordance with the Quality Agreement.

5.2

Additional Release Testing

Customer reserves the right to conduct, in its sole discretion and at its
expense, additional analytical testing on the Product.  

5.3

Retention Samples

Supplier shall retain and store in accordance with cGMP Requirements, Applicable
Law and Supplier's internal quality standard operating procedures, retention
samples of each batch of Product Manufactured under this Agreement.

5.4

Stability Testing

If requested by Customer, Supplier shall be responsible for performing annual
stability testing of the Product and shall ensure that all such testing is
performed in compliance with the applicable ICH regulations (e.g. follow-up
stability studies of commercially used products). Costs associated with annual
stability testing will be quoted separately from commercial unit pricing under a
separate Scope of Work or Purchase Order.

5.5

Reference Standards

If requested by Customer, Supplier shall be responsible for qualification and
requalification of reference standards. Costs associated with qualification and
requalification of reference standards will be quoted separately from commercial
unit pricing under a separate Scope of Work or Purchase Order.

5.6

Preparation of Process Qualification

All costs associated with the preparation of process qualification (as but not
limited to analytical method validation, process optimization, PAR studies,
preparation of quality risk assessments, preparation of validation protocols and
report per stage, preparation of validation master protocol and report,
preparation of process performance assessment) will be handled separately from
the commercial unit pricing under separate Scopes of Work or Purchase
Orders.  Until otherwise agreed, all pricing for process qualification services
to be similar to current framework between Supplier and Customer.

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Article 6

Purchase Orders

6.1

Placement of Purchase Orders

Consistent with the Short Term Rolling Forecast as set forth in Section 4.1,
Customer shall place with Supplier Purchase Orders, stating Customer’s required
delivery data, anticipated delivery schedule and the anticipated Fees, in
accordance with the Fee Schedule set out in Exhibit C, for each delivery of
Product to be made under this Agreement. Purchase Orders must have at least [* *
*] of lead time before anticipated delivery to allow sufficient time for
Supplier’s planning, raw material purchases, production and release. Each
Purchase Order shall constitute a firm, binding order, upon Supplier’s
acceptance thereof in accordance with Section 6.2.

6.2

Acceptance of Orders

Supplier may reject any Purchase Order placed by Customer that is not placed in
accordance with this Agreement by giving written notice (e-mail shall constitute
written notice) to Customer within a reasonable time, not to exceed [* * *]
after receipt of each Purchase Order, setting out the reason for such
rejection.  In the event Supplier does not respond within [* * *], such Purchase
Order shall be considered accepted by Supplier.  In the event the ordered amount
of Product under the Purchase Order differs more than [* * *] from the firm
portion of the most recent Short Term Rolling Forecast or more than [* * *] from
the firm portion of the most recent Short Term Rolling Forecast, Supplier shall
[* * *].  

In the event the terms and conditions of this Agreement conflict with the terms
and conditions of the Purchase Order, the terms and conditions of this Agreement
shall take precedence unless otherwise agreed upon by the Parties.  

6.3

Delays

If, after acceptance of a Purchase Order, Supplier is unable for any reason to
supply quantities of the Product in accordance with the Purchase Orders placed
by Customer under Section 6.1 on the timelines set forth therein, Supplier shall
inform Customer within [* * *] of becoming aware of its inability to supply the
Product of the expected duration of such inability and shall keep Customer
informed on a timely basis of developments during any such period of time. The
Parties shall cooperate to expedite the scheduling of the resumption of
Manufacture of the Product by Supplier when any such inability has been
alleviated. In the event of any delay in delivery of Product from the delivery
date on the applicable Purchase Order for such Product, if such delay is: [* *
*].

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6.4

Cancellation of Purchase Orders

In the event that Customer cancels all or part of a Purchase Order already
accepted by Supplier, Supplier will use best efforts to reallocate capacity and
mitigate any resultant costs of such cancellation. Except as expressly set forth
in Section 3.4, Section 6.2, Section 6.3 and Section 6.5, the following will be
charged to Customer:

[* * *]

6.5

Material Failure of Supply

If Supplier, for any reason, fails to supply at least [* * *] of the units of
Product ordered by Customer pursuant to valid Purchase Orders during any period
of [* * *] or longer beginning on the requested delivery date, in addition to
and without limiting any other remedies available to Customer, [* * *].

6.6

Services

From time-to-time during the Term, Customer may request that Supplier perform
Services for Customer relating to the Product, for which Customer shall pay
reasonable compensation to Supplier.  In the event that Supplier is willing to
perform any such Services requested by Customer, Supplier will first prepare a
scope of work describing the Services to be performed and the costs to Customer
for the approval of Customer (each a “Scope of Work”).  No Services shall be
commenced by Supplier unless (a) a Scope of Work relating to such Services has
been agreed, executed and delivered by both Supplier and Customer; and (b) a
Purchase Order has been issued by Customer and accepted by Supplier relating to
such Services which Purchase Order references the specific Scope of Work and
this Agreement. Customer shall have the right to terminate any Scope of Work and
corresponding Purchase Order for Services at any time on reasonable advance
written notice to Supplier (without terminating this Agreement), in which case
Customer shall be responsible for:

[* * *]

Article 7

Shipment of Product

7.1

Storage of Product

Supplier shall ensure that all Product held in storage is stored in accordance
with the Product Specifications until shipped to Customer under this Agreement
and that all storage areas meet cGMP Requirements. [* * *]

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Should any Product, during storage, change chemical composition, then Supplier
and Customer will agree upon a plan for disposition of the Product, including
possible disposal, reworking or using the Product “as is.” For clarity, Supplier
shall not commence any action set forth in the preceding sentence until such a
plan has been agreed by Customer. The cost of reworking the Product shall be
borne by [* * *].

The cost of storage, monitoring (including any on-going analytical analysis),
and insurance before shipment shall be borne by [* * *].

7.2

Release and Shipment of Product

a)Supplier shall notify Customer by facsimile or electronic transmission of each
batch of Product Manufactured by it under this Agreement in accordance with this
Article 7 as soon as reasonably possible, and no later than [* * *], after
Supplier’s quality assurance department approves the batch for release following
successful completion of the release testing procedures.  

b)Supplier shall pack and label shipping boxes and ship all orders of Product in
a prompt and timely manner and in accordance with international transport
guidelines and regulations, the Product Specifications, and Customer's
reasonable written instructions including, as applicable, for such shipment and
the terms of this Agreement.  

c)Supplier shall not sell or otherwise dispose of any Product except in
accordance with the terms and conditions of this Agreement.  

d)The Products will be shipped [* * *]. All freight, applicable taxes (excluding
any and all income taxes, employment taxes and the like incurred by Supplier),
duties, express and delivery charges shall be for Customer’s account and shall
not be subject to discount. Delivery shall be deemed completed and risk of loss
or damage of the Products shall pass to Customer upon [* * *]. Title to the
Products shall pass to Customer upon [* * *].

7.3

Documentation

Supplier shall include with each shipment of Product shipped to Customer under
Section 7.2:

a)commercially appropriate documentation;

b)a Certificate of Analysis and Certificate of Compliance in English for each
batch of Product included in the shipment, in the forms set out in Exhibit D;
and

c)a copy of any deviation or investigation reports concerning each batch of
Product shipped (to be sent separately from shipment as part of the batch record
documentation).

7.4

Steering Committee

The Parties agree to form a steering committee (the “Steering Committee”) to
oversee their interactions under this Agreement as provided herein.  Each Party
shall name a mutually agreed upon equal number

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of representatives to the Steering Committee, which shall meet either in person
or remotely (as mutually agreed) at least [* * *], or as otherwise mutually
agreed by the Parties. The primary function of the Steering Committee is to
ensure the ongoing communication between the Parties and discuss and resolve any
issues arising under this Agreement.  The Steering Committee shall in particular
have responsibility for the following: (a) reviewing key metrics for the
Product’s production and quality, and reviewing and monitoring any required
remediation with respect to production and quality for the Product; (b)
reviewing Supplier’s capacity and short-term and long-term planning for clinical
and commercial supply of the Product, including anticipating any capacity
shortfalls and discussing the cost allocation of investments required to
increase capacity or improve efficiencies; (c) [* * *]; (d) reviewing and
discussing draft Scopes of Work; (e) discussing the cost allocation, if any, of
extraordinary costs incurred by Supplier in connection with the Manufacture of
Products or provision of Services; and (f) establishing resource priorities and
resolving resource conflicts.

Article 8

Acceptance of Shipments

8.1

Acceptance of Shipments

Customer or its designees shall, within a period of [* * *] after the date of
physical receipt of any shipment of Product from Supplier, inspect the Product
for any shortages or any defects or deviations of the Product Specifications
(hereinafter “Out Of Specification”) that would be apparent from visual
inspections of the Product.  In the event that Customer is of the opinion that
the Product is Out Of Specification at the time of delivery, Customer shall,
within [* * *] after the date of physical receipt of Product, provide Supplier
with a written notice to reject the Product (a "Notice of Rejection"), which
shall include a description of the grounds for rejection and copies of test
reports and testing methodology conducted on the Product, if any.  However, with
respect to any Out Of Specification Product which would not be apparent from a
reasonable visual inspection on delivery, including in the case of any hidden
defects, such Notice of Rejection shall be provided to Supplier not later than
[* * *].

The failure of Customer or its designees to notify Supplier of any Out Of
Specification Product in the manner set forth herein above shall constitute
confirmation of the acceptance thereof.

8.2

Dispute of Rejected Product

Supplier may, at its option, within [* * *] of receipt of any Notice of
Rejection under Section 8.1, challenge the Notice of Rejection by delivering
written notice thereof to Customer.  In the event that Supplier challenges the
Notice of Rejection, Customer and Supplier shall conduct a joint investigation.
If Supplier and Customer are unable to resolve the issue of non-compliance then
a sample of the Product will be submitted to an independent laboratory
reasonably acceptable to both Parties for testing against the Product
Specifications, and determination whether or not the non-compliance may be
caused by a fault on the part of Supplier.  The test results of the independent
laboratory testing shall be final and

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binding upon Customer and Supplier, and the fees and expense of such laboratory
testing shall be borne entirely by the Party against whom such laboratory’s
findings are made.  

8.3

Remedies

a)Except as set forth in this Agreement, in the event of a Product shortage[* *
*].

b)In the event that Customer issues a timely Notice of Rejection in respect to
any Out Of Specification Product:

[* * *]  

The Party in possession of any rejected Product which does not comply with the
Product Specifications or cGMP Requirements shall destroy, in accordance with
all Applicable Law and in a manner to which Customer has given its prior written
approval, all rejected Product in its possession, but only after the Parties
have followed the procedures specified under Sections 8.2 and 8.3.  No rejected
Product shall be sold, reprocessed, salvaged, reclaimed or otherwise reused in
any manner by Supplier or Customer without the prior written agreement of the
Parties with the exception of use testing and analysis by Supplier and/or
Customer in the investigating the cause of Product rejection.  Representatives
of the Party not performing the destruction shall be permitted to witness the
destruction of the rejected Product under this section.

Article 9

Fees

9.1

Fees

a)Customer shall pay to Supplier, in respect of each Purchase Order placed by
Customer, the applicable Fees for the supply of the Product in bulk quantities
under this Agreement, in accordance with the terms of this Agreement.  

b)Except as otherwise expressly provided in this Agreement, the Fees specified
in each Purchase Order accepted by Supplier shall be full compensation for all
Manufacturing and characterization activities and Materials in respect
thereof.  Customer shall make all requests for processing changes to be
performed under this Agreement in writing under Section 3.5 and Supplier shall
provide Customer a cost estimate for such work.

9.2

Adjustments to Fees

During the Term of this Agreement, either Party may request an increase or
decrease of the Fees specified in Exhibit C no more than [* * *] and such change
in Fees shall take effect on [* * *] for which such Fee change is requested.
Such change in Fees may be requested due to any of the following events:

[* * *] or

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(iii) any other cost adjustments mutually agreed to by the Parties via the
Steering Committee.

Supplier will make available to Customer records that substantiate any
adjustment to Fees for a Product proposed by Supplier and Supplier will provide
Customer with any Customer records that provide evidence for a decrease in Fees
pursuant to clause (i); such records to be considered Supplier‘s Confidential
Information hereunder.  

The Party proposing an adjustment in the Fees will notify the other Party of the
adjustment by delivering to the other Party at least [* * *] prior to the
effective date of the Fees adjustment, written notice of the proposed
adjustment. Said written notice shall specify the effective date as [* * *] in
which the Fee adjustment becomes effective and the amounts for the adjusted
Fees. On receipt of such request, the Parties shall seek in good faith to agree
to an adjustment of the Fees, based on such reasonable and objective
evidence.  Each Party shall use its commercially reasonable efforts to mitigate
any cost increase. The Fees for any Product ordered by Customer prior to the
effective date of the Fees adjustment shall be the Fees existing on the date
Customer placed the Purchase Order, as set out in the Purchase Order.

9.3

Taxes

The Fees shall be exclusive of any taxes, customs duties, levies and other
charges applicable to the supply of the Product under this Agreement
(“Taxes”).  Customer shall pay any Taxes and reimburse Supplier for any Taxes
for which Customer is responsible but which have been paid by Supplier. Subject
to compliance with laws, the Parties shall reasonably cooperate to eliminate or
minimize the amount of any such Taxes imposed on the transactions contemplated
in this Agreement.  For clarity, Customer shall not be liable for any taxes
incurred by the Supplier including, without limitation, income taxes, employment
taxes, use taxes, and the like incurred by Supplier, or for any penalties or
interest related to the failure of Supplier to collect sales, use, VAT or
similar taxes.

Article 10

Invoicing and Payment

10.1

Issuance of Invoices

Supplier shall, in accordance with Section 10.2, invoice Customer for each
Purchase Order accepted under Section 6.2 as follows:

10.2

Invoice Contents

All invoices issued by Supplier under Section 10.1 shall show:

a)the actual quantity of Product shipped;

b)the lot number of each batch of Product shipped;

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c)the Fees for the quantity of Product shipped, based on the Fees for the
Product set out in the applicable Purchase Order; and

d)the Purchase Order number placed by Customer for the Product shipped.

If Customer disputes for any reason with the amount of any invoice submitted by
Supplier, Customer shall notify Supplier of such dispute within [* * *] after
the date of the invoice, and the Parties shall promptly attempt to resolve the
dispute.  If Customer does not notify Supplier of any such dispute within such
[* * *] period, such invoice will be final and binding on Customer and Supplier,
subject to the correction of mathematical errors.

10.3

Delay of Shipment

If Customer delays shipment of Product released by Supplier in accordance with
Section 7.2, Supplier may issue its invoice under Section 10.1 on or after the
release, with reference to the Product released under Section 10.2.

10.4

Payment of Invoices

Each invoice provided by Supplier to Customer under Section 10.1, to the extent
accurate, shall be paid by Customer to Supplier within [* * *] after the date of
the invoice to the extent that Customer does not reasonably dispute that portion
of the invoice in good faith.

All payments will be made in U.S. Dollars by SWIFT bank transfer directly to the
Supplier account as specified in the respective Purchase Orders.

Article 11

Intellectual Property

11.1

Title

a)The Parties agree that, as between Customer and Supplier, each Party owns its
respective Confidential Information, Customer owns all Rights in and to the
Customer Technology, the Product(s) and its Chemical Synthesis and Supplier owns
all Rights in and to Supplier Technology.  

b)Supplier shall not knowingly use in the Manufacturing Process any Intellectual
Property protected by any patent or patent application licensed to Supplier by
any Third Party, except with the prior written consent of Customer.  

11.2

No Grant of Rights

Except as otherwise provided herein, neither Party hereto shall be deemed by
this Agreement to have been granted any Rights of the other Party.  

 

CONFIDENTIAL

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Exhibit 10.29

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

Execution Version

11.3

Grant of License by Customer

During the Term, Customer hereby grants to Supplier a paid-up, royalty-free,
non-exclusive license, without the right to sublicense, to Customer’s
Confidential Information and the Customer Technology reasonably necessary to
Manufacture and supply to Customer the Product hereunder, but only for such
purposes.  The Parties agree that the license grant contained in this Section
11.3 is personal to Supplier only and shall be exercised by Supplier only, and
Supplier agrees to make use of Customer’s Confidential Information and the
Customer Technology only in accordance with this license and not to disclose any
such Confidential Information or Customer Technology to any Third Party, except
that nothing herein shall prevent Supplier from disclosing to its permitted
subcontractors under confidentiality obligations at least as strict as those
that bind Supplier under this Agreement, as necessary to perform Supplier’s
obligations hereunder.

11.4

Ownership of Inventions

With respect to any ideas, innovations, Improvements or inventions (whether
patentable or non-patentable) developed by Supplier during the Term of this
Agreement and [* * *], the Parties agree that, as between Customer and Supplier,
Customer shall own all Rights to such Inventions and may obtain patent,
copyright, and other proprietary protection respecting such Inventions. Supplier
agrees to promptly disclose any Inventions to Customer. Supplier agrees to
assign (and cause its employees or permitted subcontractors to assign), and does
hereby assign, any and all rights, title and interests of Supplier in, to or
under any Inventions to Customer. [* * *]

11.5

Patents to Inventions

With respect to all Intellectual Property created or developed under this
Agreement, [* * *].  

11.6

No Use of Trademarks

Nothing contained herein shall give either Party any right to use any trademark
of the other Party.  All trademarks and service marks adopted by Customer to
identify the Product or a Customer Product are and shall remain the property of
Customer.

11.7

[†]

 

CONFIDENTIAL

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

Article 12

Confidentiality & Publicity

12.1

Obligation of Confidentiality

It is contemplated that in the course of the performance of this Agreement each
Party may, from time to time, disclose Confidential Information to the other.
Each Party agrees:

a)to keep and use in strict confidence all Confidential Information of the other
Party that each Party acquires, sees, or is informed of, as a direct or indirect
consequence of this Agreement and to not, without the prior written consent of
the other Party, disclose any such Confidential Information or recollections
thereof to any person or entity other than its corporate counsel, employees and
contractors who are under an obligation of confidentiality on terms
substantially similar to those set out in this Agreement, who have been informed
of the confidential nature of the Confidential Information and who reasonably
require such information in the performance of their duties under this
Agreement;

b)not to use, copy, duplicate, reproduce, translate or adapt, either directly or
indirectly, any of the Confidential Information of the other Party or any
recollections thereof for any purpose other than the performance of the Services
and the Manufacture and characterization of the Product under this Agreement,
without the other Party's prior written approval;

c)that all copies, duplicates, reproductions, translations or adaptations of any
Confidential Information of the other Party permitted to be made hereunder shall
be clearly labelled as confidential; and

d)to take all reasonable steps to prevent material in its possession that
contains or refers to Confidential Information of the other Party from being
discovered, used or copied by Third Parties and to use reasonable steps to
protect and safeguard all Confidential Information of the other Party in its
possession from all loss, theft or destruction.

Upon the termination of this Agreement, each Party shall promptly destroy or
return all Confidential Information to the disclosing Party in accordance with
Section 18.4.

12.2

Disclosure with Consent

A Party receiving Confidential Information may, with the written consent of the
disclosing Party, disclose such Confidential Information to entities or persons
other than its corporate counsel, employees and contractors, on such terms and
conditions as the disclosing Party may specify.

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

12.3

Publicity

During the Term, the Parties agree that no press release, public announcement or
publication regarding this Agreement or the relationship of the Parties (except
to the extent that it may be legally required), shall be made unless mutually
agreed to in writing prior to the release or dissemination of any such press
release, public announcement or publication.

12.4

Disclosure Required by Law

No provision of this Agreement shall be construed so as to preclude such
disclosure of Confidential Information of the other Party as may be inherent in
or reasonably necessary to the securing from any governmental agency of any
necessary regulatory approval or license.  To the extent required by legal
process, subpoena, warrant, or court order, either Party may disclose
Confidential Information only to the extent required to comply with said legal
proceeding, provided that the Party obligated to make such disclosure shall,
when lawfully permissible, provide reasonable prior notice the other Party so as
to allow the other Party to take steps to oppose or limit the required
disclosure.

12.5

Employee Confidentiality and Invention Assignment.

(a) Supplier acknowledges and agrees that, with respect to any past or current
employee, staff, contractor, subcontractor or other agent of Supplier or its
Affiliates who has conducted services or activities related to the development,
manufacture or supply of Products for or to Customer (collectively, the
“Supplier Employees”), Supplier or its Affiliate has entered into a binding
written arrangement(s) with each such Supplier Employee that requires: (i) that
such Supplier Employee will, at a minimum, keep the Confidential Information of
Customer confidential and only use such Confidential Information to conduct
permitted activities for Customer under Supplier’s employment; and (ii) that
such Supplier Employee assign to Supplier all of its right, title and interest
in and to any inventions (including, without limitation, know-how, improvements,
ideas, information, materials and processes) and all intellectual property
rights therein that such Supplier Employee, alone or jointly with others,
conceives, develops or reduces to practice during their period of employment or
work with Supplier or its Affiliate.

(b)Supplier further covenants and agrees that, (i) with respect to any future
Supplier Employee, Supplier or its Affiliate shall enter into a binding written
arrangement with such Supplier Employee as set forth in Section 12.5(a) and (ii)
with respect to any binding written arrangement referred to in this Section
12.5(b) or Section 12.5(a), Supplier shall enforce, to the fullest extent
permitted under Applicable Law, the terms and provisions of such arrangement.

12.6

Duration of Obligation

Unless otherwise agreed by the Parties in writing, the obligations of the
Parties relating to Confidential Information set out in this Article 12 shall
survive the termination of this Agreement for a period of [* * *].

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

Article 13

Representations, Warranties and Covenants

13.1

Supplier’s Representations, Warranties and Covenants

Supplier hereby represents, warrants and covenants to Customer as follows:

a)Supplier has been duly organized and is validly subsisting and in good
standing in its jurisdiction of organization and has the power to carry on the
business as now being conducted by it;  

b)the execution, delivery and performance of this Agreement by Supplier have
been duly authorized by all requisite corporate action and do not require any
shareholder action or approval;

c)Supplier has the right and authority to enter into this Agreement and perform
its obligations hereunder, and this Agreement is a legal and valid obligation
binding upon Supplier and enforceable in accordance with its terms;

d)Supplier has not made and will not make any commitments to Third Parties
inconsistent with or in derogation of Supplier's obligations under this
Agreement and Supplier is to its knowledge not subject to any obligations that
would prevent it from entering into or carrying out its obligations under this
Agreement, and Supplier’s compliance with the terms and provisions hereof does
not and will not conflict with or result in a breach of any of the terms and
provisions of or constitute a default under (i) a loan agreement, guaranty,
financing agreement, agreement affecting a Product or other agreement or
instrument binding or affecting it or its property; (ii) the provisions of its
charter or operative documents or by-laws; or (iii) any order, writ, injunction
or decree of any court or governmental authority entered against it or by which
any of its property is bound;

e)Supplier shall comply with all Applicable Law relating to its activities under
this Agreement;

f)all Product delivered to Customer under this Agreement will have been
Manufactured, stored and shipped in a competent fashion in accordance with the
Master Batch Record, the Product Specifications, this Agreement, the Quality
Agreement, Applicable Law and cGMP Requirements by qualified personnel and, to
Supplier’s knowledge, will be free from defects;

g)the Facilities, including equipment, systems, utilities and services, complies
with cGMP Requirements for the Manufacture of the Product under this Agreement;

h)the Facilities and Supplier’s procedures and processes in the Facilities are
in compliance with Applicable Law, including applicable environmental, health
and safety requirements, for the Manufacture of the Product under this
Agreement;

i)Supplier does not, at any time from and after the Effective Date, retain or
use the services of (i) any person debarred under 21 U.S.C. § 335a or (ii) any
person who has been convicted of a crime as defined under the FD&C Act, in each
case in any capacity associated with or related to the Manufacture or supply of
Products or any service rendered to Customer under this Agreement or the Quality
Agreement;

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

j)all Product supplied by Supplier under this Agreement shall be delivered by it
free and clear of any security interests, liens, claims, pledges or encumbrances
of any kind or nature except for such as are created by Customer; and

k)all records and reports required to be maintained by Supplier under cGMP
Requirements shall be accurate and complete in all material respects.

In no event shall Customer seek to recover a refund for, or replacement to, an
Out of Specification Product due to Supplier’s breach of Sections 13.1 (f), (g)
or (h) except pursuant to Article 8.  

13.2

Customer’s Representations, Warranties and Covenants

Customer hereby represents, warrants and covenants to Supplier as follows:

a)Customer has been duly organized and is validly subsisting and in good
standing in its jurisdiction of organization and has the power to carry on the
business as now being conducted by it;

b)the execution, delivery and performance of this Agreement by Customer have
been duly authorized by all requisite corporate action and do not require any
shareholder action or approval;

c)Customer has the right and authority to enter into this Agreement and perform
its obligations hereunder, and this Agreement is a legal and valid obligation
binding upon Customer and enforceable in accordance with its terms;

d)Customer has not made and will not make any commitments to Third Parties
inconsistent with or in derogation of Customer's obligations under this
Agreement and Customer is not subject to any obligations that would prevent it
from entering into or carrying out its obligations under this Agreement, and
Customer’s compliance with the terms and provisions hereof does not and will not
conflict with or result in a breach of any of the terms and provisions of or
constitute a default under (i) a loan agreement, guaranty, financing agreement,
agreement affecting a Product or other agreement or instrument binding or
affecting it or its property; (ii) the provisions of its charter or operative
documents or by-laws; or (iii) any order, writ, injunction or decree of any
court or governmental authority entered against it or by which any of its
property is bound;

e)Customer shall comply with all Applicable Law relating to its activities under
this Agreement; and

f)to Customer’s knowledge, [* * *].

13.3

No Other Warranty

THE WARRANTIES SET OUT IN SECTIONS 13.1 AND 13.2 ARE THE SOLE WARRANTIES MADE BY
EITHER PARTY TO THE OTHER AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
PARTIES HEREBY DISCLAIM ANY AND ALL OTHER WARRANTIES, REPRESENTATIONS OR
GUARANTEES OF ANY KIND WHATSOEVER, EITHER EXPRESS OR IMPLIED, REGARDING THE
PRODUCT OR ANY OTHER MATERIALS OR SERVICES TO BE SUPPLIED UNDER THIS AGREEMENT,
INCLUDING, BUT NOT LIMITED TO ANY EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

13.4

No Consequential Damages and Limitation of Liability

a)[* * *], IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL,
CONSEQUENTIAL, PUNITIVE, INCIDENTAL OR INDIRECT DAMAGES, OR LOST PROFITS,
HOWEVER CAUSED, ON ANY THEORY OF LIABILITY. THIS LIMITATION WILL APPLY EVEN IF
THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.

b)EXCEPT AS SET FORTH BELOW IN THIS SECTION 13.4(b), IN NO EVENT WILL SUPPLIER’S
LIABILITY, [* * *], BE GREATER THAN, PER CLAIM OR SERIES OF CLAIMS ARISING FROM
THE SAME CAUSE OF ACTION, [* * *].

EXCEPT AS SET FORTH BELOW IN THIS SECTION 13.4(b), [* * *], AS APPLICABLE, IN NO
EVENT SHALL A PARTY’S LIABILITY, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY,
BE GREATER THAN, PER CLAIM OR SERIES OF CLAIMS ARISING FROM THE SAME CAUSE OF
ACTION, [* * *].

EXCEPT AS SET FORTH BELOW IN THIS SECTION 13.4(b), WITH RESPECT [* * *], IN NO
EVENT SHALL A PARTY’S LIABIITY BE GREATER THAN, PER CLAIM OR SERIES OF CLAIMS
ARISING FROM THE SAME CAUSE OF ACTION, [* * *].

NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION 13.4(b), WITH RESPECT
TO [* * *] IN NO EVENT SHALL SUPPLIER’S LIABILITY, HOWEVER CAUSED AND ON ANY
THEORY OF LIABILITY, BE GREATER THAN, PER CLAIM OR SERIES OF CLAIMS ARISING FROM
THE SAME CAUSE OF ACTION, [* * *].

[* * *]

Article 14

Indemnification

14.1

Indemnification of Supplier

Customer shall indemnify, defend and hold harmless Supplier and its officers,
directors, agents, servants and employees against any and all actions, claims,
demands, proceedings, suits, losses, damages, costs and expenses (including
reasonable legal fees) of Third Parties (in this Article 14, “Claims”)
(including Claims for personal injury or death) to the extent such Claims result
from or arise out of [* * *], except, in each case of clause (a) and (b), to the
extent Supplier has an obligation to indemnify Customer pursuant to Section 14.2
or 14.3.  

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

14.2

Indemnification of Customer

Supplier shall indemnify, defend  and hold harmless Customer and its Affiliates
and Customer Licensees, and their respective officers, directors, agents,
servants, employees and consultants against any and all Claims (including Claims
for personal injury or death) to the extent such Claims result from or arise out
of [* * *], except, in each case of clause (a) and (b), to the extent Customer
has an obligation to indemnify Supplier pursuant to Sections 14.1 or 14.3.

14.3

[* * *]

14.4

Indemnification Procedure

The indemnities contained in this Article 14 shall be conditional on compliance
with the terms and conditions set out in this Section 14.4.  The indemnifying
Party shall have the option to defend, contest, or otherwise protect against any
such Claims at its own cost and expense provided that the party seeking
indemnification (the “Indemnitee”) regarding any such Claims gives written
notice to the indemnifying Party promptly after receiving notice of said
Claims.  If the indemnifying Party chooses to defend Claims, the Indemnitee may,
but will not be obligated to, participate at its own expense in a defense
thereof by counsel of its own choosing, but the indemnifying Party shall be
entitled to control the defense unless the Indemnitee has relieved the
indemnifying Party from liability with respect to the particular matter. If the
indemnifying Party fails to timely defend, contest, or otherwise protect against
any such Claims, the Indemnitee may defend, contest, or otherwise protect
against the same, and make any reasonable compromise or settlement thereof and
recover the entire costs thereof from the indemnifying Party, including
reasonable legal fees and costs and disbursements, and all amounts paid as a
result of such Claims or the compromise or settlement thereof; provided,
however, that if the indemnifying Party undertakes the timely defense of such
matter, the Indemnitee shall not be entitled to recover from the indemnifying
Party for its costs incurred in the defense thereof. The Indemnitee shall
cooperate and provide such assistance as the indemnifying Party may reasonably
request in connection with the defense of the matter subject to indemnification.

Article 15

Insurance

15.1

Insurance Coverage

Customer and Supplier each represent that they are sufficiently insured against
any liability arising under this Agreement. Further, Supplier shall at a minimum
retain [* * *].

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REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

15.2

Evidence of Insurance

Each of Customer and Supplier shall, upon request by the other, provide the
other Party with a copy of all insurance policies maintained under this Article
15 relating to the Manufacture of the Product in bulk quantities and the
facilities therefor and shall notify the other Party in writing at least 30 days
prior to the cancellation of or any material change to such insurance
policies.  Each Party may request that the other Party procure and maintain such
additional insurance coverage relating to the Manufacture of the Product and the
facilities therefore as may be reasonably necessary in respect of the Parties’
respective obligations under this Agreement.

Article 16

Legal and Regulatory

16.1

Compliance with Laws

a)Each Party shall, in connection with its obligations, rights and duties under
this Agreement and in Manufacturing, handling, storage, loading, shipping,
using, commercializing, reselling and distributing the Product:

(i) comply with all Applicable Law or other requirements applicable to such
Party’s business; and

(ii) subject to Subsection b) below, obtain and maintain in full force and
effect all applicable licenses, permits, certificates, authorizations or
approvals from local governmental authorities necessary to conduct its business
and the activities contemplated under this Agreement. Such licences or
certificates are to be provided to the other Party on request.

b)Customer shall be responsible for obtaining all necessary import and/or export
licenses or permits and for the payment of all import and/or export fees, taxes
or duties in connection with the purchase and/or delivery of the Product under
this Agreement. Supplier shall reasonably cooperate with Customer in connection
with obtaining necessary import and/or export licenses or permits.

16.2

Maintenance of Records

Supplier shall maintain adequate books and records and retention samples
consistent with cGMP Requirements and any other Applicable Law and requirements
of applicable governmental or regulatory authorities, in respect of test
records, samples and associated support data for all batches of Product
Manufactured by Supplier sufficient to substantiate and verify Supplier’s duties
and obligations under this Agreement for [* * *] from the expiration date of the
respective Product batch.  

16.3

Notice of Reports

Supplier shall provide to Customer within [* * *] of receipt by Supplier copies
of all Product-specific portions of any reports of any governmental or
regulatory authority including, without limitation, any Facility-specific
reports solely to the extent applicable to the Product or Manufacturing Process,
FDA Form

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REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

483 observations, FDA warning letters or other correspondence from the FDA or
equivalent correspondence from another Applicable Regulatory Authority; provided
that Supplier may redact any information from such reports subject to
confidentiality obligations and not related to the Product.

16.4

Drug Master Files

Supplier will routinely update and keep current all information pertinent to
maintain the Drug Master Files relating to the Manufacture of the Product at the
production site of Supplier.  Supplier will fully support and reasonably assist
Customer with its filing of any application with respect to the Product with any
Applicable Regulatory Authority at Customer’s expense.  

16.5

Compliance with Regulatory Standards

Supplier shall be responsible for Manufacturing the Product in compliance with
Applicable Law, cGMP Requirements and the standards of any other applicable
governmental or regulatory authority.  Each Party will provide reasonable
assistance to the other, at no charge, if necessary to respond to audits,
inspections, inquiries, or requests of any Applicable Regulatory
Authority.  Supplier shall advise Customer immediately if Supplier receives
notice of an impending inspection related to a Product or if an authorized agent
of any Applicable Regulatory Authority or other governmental agency provides
advance notice of any investigation, inspection or visit to a Facility. In such
event, Supplier shall permit, to the extent permitted by Applicable Law,
Customer or its representatives to be present during such visit, at Customer’s
expense.  Upon Customer’s request, Supplier shall provide Customer with a copy
of any report issued by such Regulatory Authority following such visit.

16.6

Inspection  

Supplier shall allow monitoring of the Facilities as set forth in Section 3.6
and inspections or audits as provided for in the Quality Agreement.  Supplier
shall make available to Customer all relevant records and reports and Customer
shall have the right to copy all Product related records and reports.  The
frequency of such audits as well as the response time with respect to audit
findings shall be governed by the Quality Agreement.

Article 17

Recalls

17.1

Safety

Supplier shall provide Customer with reasonable co-operation to help Customer
investigate adverse events or product complaints involving or related to the
Product.  The cost and expense of any testing undertaken by Supplier at
Customer’s request shall be borne by [* * *].  

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REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

17.2

Recalls

If either Party has grounds to recommend a Recall or otherwise receives a
notification or information which might result in a Recall, the Party
recommending such Recall or receiving such notification or information shall
immediately notify the other Party in writing.  Subject to Applicable Law,
Customer and its designees shall have the sole responsibility to implement any
Recall of the Product or any intermediate or finished product containing the
Product and the sole right to make all final decisions regarding any such
Recall.  Supplier shall reasonably cooperate with Customer and its designees in
implementing any such Recall, at Customer’s expense.

17.3

Supplier’s Liability for Recall

In the event of a Recall or Seizure arising from [* * *], Supplier shall be
liable for the expenses and out-of-pocket costs actually incurred by Customer as
a result of such Recall or Seizure, and Supplier shall, at the option of
Customer:

[* * *].

Such liability shall not limit or otherwise be exclusive of any other provisions
of this Agreement.

17.4

Customer’s Liability for Recall

In the event of a Recall or Seizure arising from [* * *] Customer shall [* * *].

Such liability shall not be exclusive of any other provisions of this Agreement.

17.5

Replacement Shipments

In the event of any Recall or Seizure with respect to the Product during the
Term of this agreement, Supplier shall, upon the written request of Customer, as
soon as reasonably possible, supply replacement Product to Customer in an amount
sufficient to replace the amount of Product Recalled or Seized, at the
applicable then current Fees for Product under this Agreement. If Customer makes
such written request, Customer shall issue a Purchase Order in this regard which
Supplier is obliged to accept.   Supplier agrees to use commercially reasonable
efforts to supply such replacement Product pursuant to the new Purchase Order as
soon as possible.  

Article 18

Termination

18.1

Termination

This Agreement is effective as of the Effective Date and will expire in
accordance with Section 2.1, unless, upon the occurrence of any of the following
events, this Agreement is earlier terminated in accordance with this Section
18.1:

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WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

a)Customer delivers written notice of termination to Supplier at least [* * *]
prior to the expiration date of the Initial Term, which termination shall be
effective as of the expiration date of the Initial Term;

b)either Party delivers written notice of termination to the other Party at
least [* * *] prior to the expiration date of the Renewal Term, which
termination shall be effective as of the expiration date of the Renewal Term;

c)a Party makes a general assignment for the benefit of creditors, a court of
competent jurisdiction declares a Party insolvent or bankrupt, or a petition in
bankruptcy or under any insolvency law is filed by or against a Party and such
petition is not dismissed within [* * *] after it has been filed, and the other
Party delivers written notice of termination to such Party, which termination
shall be effective immediately upon delivery of such written notice;

d)a Party breaches a material provision of this Agreement, and the other Party
delivers written notice of termination to such breaching Party:

(i) if the breach is not cured within [* * *] after written notice thereof to
the Party in default; or

(ii) if the breach is of a type that cannot be cured within [* * *], if a cure
is not promptly commenced and diligently pursued until complete remediation but
in any case after [* * *] unless otherwise agreed in writing between the
Parties;

e)any governmental law, regulation or order is adopted and made effective which
would make performance of a Party’s obligations under this Agreement impossible
or commercially impracticable, and such Party delivers written notice of
termination to the other Party, which termination shall be effective immediately
upon delivery of such written notice; or

f)a Party has the right to terminate under Section 14.3, which termination shall
be effective [* * *] after delivery of written notice to the non-terminating
Party.

18.2

Consequences of Termination

On expiration or the effective date of termination of this Agreement, if
earlier:

a)both Parties shall be released from all obligations and duties imposed or
assumed hereunder, except obligations and liabilities previously accrued and as
expressly provided by this Agreement, including, without limitation, those
provisions which expressly survive termination or expiration of this Agreement;

b)all Rights granted by Customer to Supplier under Section 11.3 shall
immediately revert to Customer, provided that Supplier may continue to use any
such Rights in order to fulfil its surviving obligations under Section 18.5, and
only for such purpose;

c)Supplier shall provide to Customer, to the extent they exist, copies of:

(i) Supplier’s Manufacturing batch records and analytical reports relating to
the Product; and

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

(ii) any other documents required to be delivered pursuant to this Agreement or
otherwise reasonably requested by Customer;

d)Unless this Agreement is terminated by Customer pursuant to Section 18.1(d)
above, all Purchase Orders and Scopes of Work shall automatically be deemed
terminated by Customer and Supplier shall be compensated for final Product
already produced or Services already rendered in accordance with this Agreement
and, for Products or Services not yet produced or rendered, as the case may
be,  Supplier shall be entitled to its fees, expenses and costs as set forth in
Sections 6.4 and 6.6.  Additionally, Customer shall be entitled to request that
(i) all Products and/or works in process for which Customer has compensated
Supplier and (ii) all Customer Materials be shipped to Customer in accordance
with the provisions of Section 7.2(d).  If this Agreement is terminated by
Customer pursuant to Section 18.1(d) as a result of Supplier’s breach, then,
Customer shall be able to elect whether Purchase Orders or Scopes of Work not
yet completed at the date of termination or expiration should continue in force,
subject to the terms and conditions herein; and

e)Supplier shall promptly cooperate with Customer to transfer and transition
supply of the Products to a Third Party supplier.  Upon Customer’s request,
Supplier shall cooperate with Customer in the transfer of technology and
know-how necessary to Manufacture Products to such Third Party supplier,
including providing Customer and the Third Party supplier with reasonable access
to the Facilities and consulting services related to Manufacturing of the
Product.  Supplier shall conduct such activities at Customer’s expense paid in
advance.

18.3

Return of Samples

On expiration or earlier termination of this Agreement, unless otherwise
instructed by Customer, Supplier shall, within [* * *], return to Customer all
samples or other supplies of the Product (for which Supplier has been paid) in
its possession or control in any form, with the exception of any samples such as
retention samples that Supplier may be required to keep according to Applicable
Law. The cost of returning any such supplies shall: [* * *]

18.4

Return of Confidential Information

On expiration or earlier termination of this Agreement, unless otherwise agreed
between the Parties, each Party shall:

a)promptly cease all use of the Confidential Information of the other Party and
ensure that its corporate counsel, employees and contractors cease all use
thereof; and

b)upon written request of the other Party,

(i) return to the other Party all original copies of the Confidential
Information of the other Party in its control or possession, subject to the
retention of one (1) complete copy for archival purposes and to satisfy any
applicable legal requirements; and

CONFIDENTIAL

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(ii) except for back-up copies generated by the recipient Party’s IT system,
destroy any and all copies or other reproductions or extracts of the
Confidential Information of the other Party and all other documents, computer
files, memoranda, notes or other writings prepared based on such Confidential
Information subject to clause (i) above.

18.5

Survival

Except as otherwise provided herein or agreed in writing between the Parties,
expiration or early termination of this Agreement shall not relieve either Party
of its obligations incurred prior to such expiration or early termination,
including the obligation to Manufacture and deliver the Product under Purchase
Orders placed by Customer and accepted by Supplier prior to the effective date
of expiration or earlier termination, and the obligation to pay Fees in respect
thereof.  In addition, the following provisions shall survive any expiration or
early termination of this Agreement in accordance with the terms of such
provision; provided that if there is no express expiration or termination of an
obligation or a right under a surviving provision, such provision or right shall
continue to survive, subject to Applicable Law[* * *]:

Article 1 (Interpretation); Section 2.2 (Effect of Expiration on Purchase
Orders); Section 5.3 (Retention Samples); Article 9 (Fees) (solely with respect
to amounts owed or paid following termination); Article 11 (Intellectual
Property) (other than Section 11.3 (Grant of License by Customer)); Article 12
(Confidentiality & Publicity); Section 13.3 (No other Warranty); Section 13.4
(No Consequential Damages and Limitation of Liability); Article 14
(Indemnification); Article 15 (Insurance); Section 16.2 (Maintenance of
Records); Section 16.4 (Drug Master Files); Section 16.6 (Inspection); Sections
17.2 (Recalls), 17.3 (Supplier’s Liability for Recall) and 17.4 (Customer’s
Liability for Recall); Sections 18.2 (Consequences of Termination), 18.3 (Return
of Samples) and 18.4 (Return of Confidential Information); this Section 18.5
(Survival); and Article 19 (Miscellaneous) (except 19.2 and 19.5).

Further, Article 8 (Acceptance of Shipments) shall survive any expiration or
termination of this Agreement solely with respect to shipments of Product
shipped prior to the effective date of expiration or termination.

Article 19

Miscellaneous

19.1

Assignment; Inurement

This Agreement shall be binding upon and shall inure to the benefit of the
Parties hereto and their successors and permitted assigns.  Supplier shall not
assign this Agreement, in whole or in part, to any person without the prior
written consent of Customer, except to a Third Party which acquires all, or
substantially all, of Supplier’s business or assets, whether through merger or
otherwise.

Customer shall be entitled to assign this Agreement, in whole or in part, to any
person without the consent of Supplier, provided that (i) such person acquires
all, or substantially all, of Customer’s business

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or assets with respect to the Product, whether through merger or otherwise; (ii)
such person is an Affiliate of Customer or a Customer Licensee; or (iii)
Customer remains liable for any payments Supplier is or will be entitled to
under this Agreement.  Customer shall not assign this Agreement, in whole or in
part, to any other person without the prior written consent of Supplier, not to
be unreasonably withheld, conditioned or delayed.

19.2

Change of Control

During the Term, Supplier will promptly notify Customer in writing if at any
time a Change of Control shall occur as to Supplier, such notification to be
given no later than fifteen (15) days following such Change of Control.  [* * *]

19.3

Counterparts

This Agreement may be executed in any number of counterparts each of which shall
be deemed to be an original and all of which taken together shall be deemed to
constitute one and the same instrument.

19.4

Dispute Resolution

Any controversy or claim arising out of or relating to this Agreement, or the
breach thereof, shall be referred first to senior management of the Parties for
amicable resolution.  In the event that amicable resolution has not been
achieved within [* * *], then either Party may seek resolution through
confidential arbitration in accordance with the ICC Rules of Arbitration.  The
arbitration hearing shall be held as soon as practicable following submission to
arbitration.  The arbitration hearing shall be held in Delaware. The Parties
shall request that the arbitration panel render a formal, binding non-appealable
resolution and award on each issue as expeditiously as possible.  In any
arbitration, the prevailing Party shall be entitled to reimbursement of its
reasonable attorneys’ fees and the Parties shall use all reasonable efforts to
keep arbitration costs to a minimum.  Judgment upon the award may be entered by
any court having jurisdiction thereof or having jurisdiction over the relevant
Party or its assets.  

19.5

Force Majeure

Any delay or inability to perform any of the duties or obligations of either
Party caused by an event outside the affected Party’s reasonable control shall
not be considered a breach of this Agreement, and unless provided to the
contrary herein, the time required for performance shall be extended for a
period equal to the period of such delay. Such events shall include, without
limitation: acts of God; any governmental act or regulation; insurrections;
riots or civil disturbance; acts of war; embargoes; labor disputes at facilities
of Material suppliers, including strikes, lockouts, job actions, or boycotts;
fires; explosions; terrorist attacks; floods; or other unforeseeable causes
beyond the reasonable control and without the fault or negligence of the Party
so affected. In order to take the benefit of this section, the Party so affected
shall give prompt notice [* * *] to the other Party of such cause, and shall
take

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whatever reasonable steps are necessary to relieve the effect of such cause as
rapidly as reasonably possible.  If performance is affected for a cumulative
period of more than [* * *], the non-affected Party may terminate this Agreement
immediately by notice in writing to the affected Party.

19.6

Performance

Each Party agrees to perform its obligations under this Agreement, including
under any Scope of Work, in a timely manner.  Supplier shall allocate adequate
resources to execute its obligations under this Agreement, including under each
Scope of Work.  Supplier represents and warrants that all Services shall be
performed by qualified personnel in accordance with the highest industry
standards.

19.7

Further Assurances

The Parties shall both execute and deliver such further instruments and do such
further acts as may be required to implement the intent of this Agreement.

19.8

Independent Contractors

Supplier and Customer shall be independent contractors and shall not be deemed
to be partners, joint venturers or each other’s agents under this Agreement, and
neither Party shall have the right to act on behalf of the other except as is
expressly set forth in this Agreement.

19.9

Injunctions

Each Party agrees that the other Party may be irreparably damaged if any
provision of this Agreement is not performed in accordance with its terms.
Accordingly, notwithstanding Section 19.3, each Party will be entitled to apply
for an injunction or injunctions to prevent breaches of any of the provisions of
this Agreement by the other Party, without showing or proving any actual or
threatened damage, notwithstanding any rule of law or equity to the contrary,
and may specifically enforce such provisions by an action instituted in a court
having jurisdiction. These specific remedies are in addition to any other remedy
to which the Parties may be entitled at law or in equity.

19.10

Notices

Unless otherwise provided herein, any notice required or permitted to be given
hereunder or any proposal for any modification of this Agreement (hereinafter
collectively referred to as the “Correspondence”) shall be faxed, mailed by
overnight mail, certified mail postage prepaid, or delivered by hand to the
Party to whom such Correspondence is required or permitted to be given hereunder
at the addresses set out below.  If delivered by hand, any such Correspondence
shall be deemed to have been given when received by the Party to whom such
Correspondence is given and if faxed, any such Correspondence shall be deemed to
have been given on the first Business Day following facsimile transmission, as
evidenced by written and dated receipt of the receiving Party.

CONFIDENTIAL

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REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

If to Supplier:

CARBOGEN AMCIS AG

Hauptstrasse 159-173

CH 4416 Bubendorf

Switzerland

Attention:  CEO

Telephone:+ 41 61 935 5353

Facsimile:+ 41 61 935 5300

 

If to Customer:

Paratek Pharmaceuticals, Inc.

75 Park Plaza, 4th Floor

Boston, MA 02116

USA

Attention : General Counsel

Phone: +1 617 807 6600

Facsimile: +1 617 275 0039

 

Either Party may change the address to which any Correspondence to it is to be
addressed by notification to the other Party as provided herein.

19.11

Entire Agreement

This Agreement, the Quality Agreement and all Exhibits attached hereto (as the
same may be amended from time to time by the written agreement of the Parties)
constitute the entire agreement between the Parties with respect to the subject
matter hereof and supersede all other documents, agreements, verbal consents,
arrangements and understandings between the Parties with respect to the subject
matter hereof.  This Agreement shall not be amended orally, but only by an
agreement in writing, signed by both Parties that states that it is an amendment
to this Agreement.

19.12

Severability

If any term or provision of this Agreement shall for any reason be held invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other term or provision hereof, and this
Agreement shall be interpreted and construed as if such term or provision, to
the extent the same shall have been held to be invalid, illegal or
unenforceable, had never been contained herein.

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REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
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19.13

Waiver

No waiver or modification of any of the terms of this Agreement shall be valid
unless in writing and signed by an authorized representative of the Parties
hereto. Failure by either Party to enforce any rights under this Agreement shall
not be construed as a waiver of such rights, nor shall a waiver by either Party
in one or more instances be construed as constituting a continuing waiver or as
a waiver in other instances.

[Signature page follows.]

 

 

CONFIDENTIAL

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IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be
executed by its duly authorized officer as of the dates set forth below.

 

CUSTOMER

 

by its authorized signatory:

 

 

 

/s/ William M. Haskel

 

 

 

Name:

 

William M. Haskel

 

 

 

Title:

 

Sr. Vice President

 

 

 

Date:

 

January 9, 2017

 

 

 

CARBOGEN AMCIS AG

 

by its authorized signatory:

 

 

 

/s/ Silke Erbeck

 

Name:

 

Silke Erbeck

 

 

 

Title:

 

Senior Head of Commercial Products

 

 

 

Date:

 

10.Jan.2017

 

 

 

/s/ Dr. Stephan Fritschi

 

Stephan Fritschi

 

VP Operations

 

CARBOGEN AMCIS AG

 

10.Jan.2017

 

 

 

[Signature page to Outsourcing Agreement]

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.  

 

Exhibit A – Description of Product

[* * *]

 

 

 

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. WHERE TWO PAGES OF MATERIAL HAVE
BEEN OMITTED, THE REDACTED MATERIAL IS MARKED WITH [†].  

 

Exhibit B  – Chemical Synthesis

[* * *]

 

 

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. WHERE TWO PAGES OF MATERIAL HAVE
BEEN OMITTED, THE REDACTED MATERIAL IS MARKED WITH [†].  

 

Exhibit C – Fee Schedule

 

[* * *]

 

 

 

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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. WHERE TWO PAGES OF MATERIAL HAVE
BEEN OMITTED, THE REDACTED MATERIAL IS MARKED WITH [†].  

 

Exhibit D – Certificate of Analysis and Certificate of Compliance

[†]