Exhibit 10.1


 


Confidential treatment has been requested for portions of this
exhibit.  The copy filed herewith omits
the information subject to the confidentiality request.  Omissions are designated as *.  A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.


 


MASTER
SERVICES AGREEMENT


(CMC
Services)


 


This MASTER SERVICES AGREEMENT (this “Agreement”)
is made as of July 20, 2010 by and between Synergy Pharmaceuticals, Inc.,
a Florida corporation with an address of 420 Lexington Avenue, New York, NY
10170 (“Synergy”), and *, a corporation with offices at * (“Contractor”).  Terms not otherwise defined herein shall have
their respective meanings in Section 1 of this Agreement.


 


R E C I T A L S


 


A.            WHEREAS, Synergy and its Affiliates are in the business of discovering,
developing and commercializing pharmaceutical products;


 


B.            WHEREAS, Contractor is in the
business of providing pharmaceutical development, analytical, and/or
manufacturing services; and


 


C.            WHEREAS, Synergy wishes to
retain Contractor to provide certain services associated with the development,
analysis, and/or manufacturing and/or supply of certain quantities of specific
products for use in IND-enabling studies and/or clinical trials, as more fully
set forth below.


 


NOW,
THEREFORE, in consideration of the premises and of the covenants herein
contained, the parties hereto mutually agree as follows:


 


A G R E E M E N T


 


1.     Definitions.  In
addition to the terms defined elsewhere in this Agreement (including the
Statement(s) of Work), the following terms shall have their respective
meanings set forth below:


 


1.1.         “API”
means the active pharmaceutical ingredient.


 


1.2.         “Agreement”
means this Master Services Agreement for Development and Manufacturing Services.


 


1.3.         “Affiliate”
means any corporation, company, partnership, joint venture and/or firm that
controls, is controlled by or is under common control with a party to this
Agreement. For purposes hereof, “control” means (a) in the case of
corporate entities, direct or indirect ownership of more than fifty percent
(50%) of the stock or shares entitled to vote for the election of directors;
and (b) in the case of non-corporate entities, direct or indirect
ownership of more than fifty percent (50%) of the equity interest with the
power to direct the management and policies of such non-corporate entities.


 


1.4.         “cGMP”
means current Good Manufacturing Practices as promulgated under each of the
following as in effect on the date of this Agreement and as amended or revised
thereafter:


 


1

















 


(a)           the FDA Act, including 21 CFR (parts 11, 210 and 211) and other FDA
regulations, policies and guidelines in effect from time to time governing the
manufacture, testing and quality control of investigational drugs; and


 


(b)           all ICH guidance documents as appropriate, including ICH guidance Q7a, “ICH
Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients,” as
applied to investigational drugs (Section 19) specifically for
manufacturing activities of API.


 


1.5.         “Change
Order” means an agreement signed by both parties that amends a Work Order.  Each Change Order shall refer to the specific
Work Order it amends, and shall be sequentially numbered with respect to
multiple amendments to the same Work Order.


 


1.6.         “CMC”
means chemistry manufacturing and control information required by the FDA for
filing of an IND or NDA.


 


1.7.         “Confidential
Information” means all information, whether in tangible form or not,
(a) provided by either party and/or its Affiliates hereunder to the other,
or (b) generated by Contractor in the
performance of any Project, including but not limited to: any
information about manufacturing, testing/analysis methods or processes; any
Products or products (whether investigational or not), Synergy Materials,
samples, specimens, and other materials or compounds, sub-samples, and
retention samples; analyses and the results of such analyses, information on
research and development compounds, technical know-how; formulas; studies;
regulatory submissions and records; research data and information; financial
information; sales and marketing information (including, without limitation,
service proposals, price quotations and customer lists); inventions; patent
applications and other trade secrets; information relating to potential new
transactions and business between the parties; and all information developed or
prepared by either party pursuant to the terms and conditions of this
Agreement, each in any form (including but not limited to information provided
orally, electronically, or in writing). 
Product Intellectual Property generated by Contractor in the performance of any Project shall be the
Confidential Information of Contractor. 
To avoid misunderstanding, in order to be treated as Confidential
Information hereunder, disclosures initially made in tangible form shall be
marked as “Confidential Information” or similar legend, and disclosures
initially made in non-tangible form shall be identified as confidential
information at the time of initial disclosure and subsequently summarized in a
writing provided to the recipient within thirty (30) days of the initial
disclosure.


 


1.8.         “Debarment Act” means the Generic Drug Enforcement Act of 1992, as
amended, 21 U.S.C. §§ 306.


 


1.9.         “Disputed
Product” shall have the meaning set forth in Section 5.3(b).


 


1.10.       “Effective
Date” means the later of the two dates on the signature page hereto.


 


1.11.       “FDA” means the United States Food and Drug Administration (or its
successor agency) and/or the corresponding governmental or other authority in
another country, as applicable, such as the European Agency for the Evaluation
of Medicinal Products (or “EMEA”) in Europe.


 


1.12.       “FDA Act” means the United
States Federal Food, Drug and Cosmetic Act (21 U.S.C. 301, et. seq.),
and the regulations promulgated thereunder,
as amended from time to time, and any successor statute(s).


 


2

















 


1.13.       “IND”
means an Investigational New Drug Application filed with the FDA to begin
clinical studies of a new drug in humans (pursuant to 21 CFR 312, et. seq., as amended), and/or the
corresponding application with a corresponding regulatory agency in a country
other than the United States, as applicable, and/or any successor application (s).


 


1.14.       “Indemnified
Party” shall have the meaning set forth in Section 13.3.


 


1.15.       “Indemnifying
Party” shall have the meaning set forth in Section 13.3.


 


1.16.       “Synergy
Materials” means any materials (and derivatives thereof), including API,
supplied by Synergy to Contractor, if any, pursuant to a Work Order.


 


1.17.       “Synergy
Representative” shall have the meaning set forth in Section 4.


 


1.18.       “Losses” shall have the
meaning set forth in Section 13.1.


 


1.19.       “Manufacture
and Release Requirements” means those methodologies, analytical tests, process
parameters and cGMP requirements necessary to manufacture and release Product
to Synergy in conformity with the Specifications.  As applicable, all Manufacture and Release
Requirements shall be set forth in the Work Order.


 


1.20.       “Product”
means the product resulting from the Services to be rendered by Contractor
hereunder, as defined in the Work Order, including the product of such Services
that does not meet the Specifications but is accepted by Synergy.


 


1.21.       “Product
Intellectual Property” means all intellectual property (including
non-patentable inventions) generated by Contractor in the performance of the
Services hereunder, or  intellectual
property generated prior to the Effective Date in anticipation of provision of
the Services, and which relates to methods, procedures and processes for the
synthesis and production of any Product and is necessary to manufacture the
Product or which it is necessary or advisable to disclose to any regulatory
authority in connection with (i) any request for an approval from such
regulatory authority or (ii) any regulatory requirement.


 


1.22.       “Project”
means the separate, defined projects described in a Work Order.


 


1.23.       “Project
Manager” shall have the meaning set forth in Section 4.


 


1.24.       “Regulatory
Audit” shall have the meaning set forth in Section 16.1.


 


1.25.       “Services”
means those services, which may include (but not be limited to) formulation
development, intermediary and product manufacture, consulting, chemical
synthesis, chemical process research, analytical methods development, medicinal
chemical synthesis, computational chemistry services, validation or release
testing and other related services, that are requested by Synergy and agreed to
be provided by Contractor as set forth in a Work Order.


 


1.26.       “Specifications”
means the composition, quality, purity, identity and strength of a Product and
any chemistry, manufacturing and controls requirements for the manufacture of
Product: (a) as appended hereto at Schedule 1,; or (b) as approved
and provided by Synergy to Contractor and accepted by Contractor prior to the
commencement of the Services and included in the applicable Work Order, as
applicable.


 


3

















 


1.27.       “Third
Party Rights” means any invention, discovery, technology, know-how and/or other
intellectual property that are incorporated into the Work Product and/or
Product Intellectual Property, but which is not owned or otherwise assignable
by Contractor or its Affiliates.


 


1.28.       “Work
Order” refers to the written statement of work, substantially in the form
attached hereto as Schedule A, that specifies the Services to be provided by
Contractor for Synergy, including, as may be applicable, a description of the
Product, Specifications, quantity of Product, Manufacture and Release
Requirements, estimated duration of the Project(s), milestones and all other
matters pertinent to design, scheduling and completion of the Project, and the
cost and payment terms.


 


1.29.       “Work
Product” means all results of Services, including but not limited to the
Product and other compounds, data, information, documentation (including, but
not limited to, lab notebooks as applicable), reports and any other
deliverables listed in the Work Order.


 


2.     Scope of Services.


 


2.1          Work Order.  Services provided by Contractor shall be
subject to the terms and conditions of this Agreement.  All such Services shall be the subject of a
Work Order, substantially in the form of Exhibit A, setting forth
the following with respect to the applicable Project: (i) description of
Services to be provided, (ii) fee and payment schedule for the Services,
(iii) description of deliverables to be delivered by Contractor (each, a “Deliverable”)
and their intended use, (iv) materials to be provided by each party and
(v) a Project timeline.  After a
work order substantially in the form of Exhibit A is agreed upon
and executed by the parties hereto, the same shall be attached to this
Agreement as an amendment to Exhibit B (each, a “Work Order”)
and the Work Order shall then be a part of this Agreement.  There will be no limit to the number of Work
Orders that may be added to this Agreement. 
Services shall only be commenced after the execution of a Work Order.


 


2.2          Change
Orders.  In the
event that Synergy would like Contractor to materially alter the Services under
a given Work Order or the assumptions underlying the budget, the parties shall
agree upon a written Change Order prior to the provision of said Services.  The Change Order constitutes an amendment to
the applicable Work Order and the services set forth therein shall be deemed to
be Services part of such Work Order.  Any
unauthorized changes in scope made by Contractor shall be the responsibility of
Contractor and Contractor agrees to pay to Synergy any of its losses or added
costs related thereto.  Contractor has no
obligation to perform and Synergy has no obligation to pay for any additional
or modified Services absent written agreement by the parties included in a
Change Order with respect thereto.


 


2.3          Subcontracting.  With Synergy’s prior written
consent, Contractor may subcontract the performance of certain of its
obligations in a Work Order to qualified third parties; provided that (a) Contractor notifies
Synergy of the proposed subcontractor and identifies the specific Services to
be performed by such subcontractor, and (b) such subcontractor performs
such Services in accordance with the terms and conditions of this Agreement
(including, without limitation, Sections 9 and 10 hereof).  Contractor shall remain liable to Synergy for
the performance of any such subcontractor.


 


2.4          Contractor
Employees and Agents.  Contractor shall be solely responsible for
any and all salaries, fees, state and federal taxes, withholding, FICA, worker’s
compensation or other 


 


4

















 


payments due with respect to the compensation paid to
Contractor by Synergy or by Contractor to any employee or agent employed by
Contractor.  Contractor’s employees and
other agents shall have no right to receive from Synergy any employee benefits
(including by not limited to health and accident insurance, sick leave or
vacation) that Synergy provides to its own employees.


 


3.     Materials.


 


3.1.         Supply
of Synergy Materials.  To
the extent required by a Work Order, Synergy shall provide Contractor
with sufficient amounts of any Synergy Materials (either directly or
indirectly, and including API).  Synergy
shall also provide Contractor with such data as is in its possession, with the
right to disclose, and as may be necessary to apprise Contractor, prior to
delivery of any Synergy Materials, of the stability, proper storage and safety
and other characteristics and requirements of such Synergy Materials.  Synergy shall be solely responsible for
providing Contractor with any such Synergy Materials in a manner that
materially complies with all applicable law, including but not limited to
Synergy obtaining any necessary regulatory permits or licenses to ship such
Synergy Materials to Contractor and/or satisfying any necessary regulatory
labeling requirements on such Synergy Materials. Contractor shall use any
such Synergy Materials solely for rendering the Services under the applicable
Work Order, and shall not transfer any Synergy Materials to a third party
except pursuant to Section 2.2.  Any
Synergy Materials remaining upon completion of the Services under a Work Order
shall be, at Synergy’s direction, either returned to Synergy or destroyed.  If Synergy
does not notify Contractor within sixty (60) days after completion of a
Project of its intention hereunder, then Contract shall return the Synergy
Materials at Synergy’s expense.


 


3.2.         Third
Party Materials.  The costs of all third party-suppliers’ fees
and the purchase of Project-specific items (such as raw materials, excipients,
packaging, special equipment, tooling, change parts, laboratory columns and
reagents) necessary for Contractor to perform the Services shall be purchased
by Contractor and charged to Synergy at Contractor’s cost, provided that any
such costs shall be set forth in the applicable Work Order, or as necessary,
agreed to by the parties pursuant to Section 2.1(b), and Contractor shall
only use any such Project-specific items to render the Services.


 


3.3.         Importation
of Materials.  If applicable, Contractor and Synergy will
co-operate and provide such assistance to each other as may be reasonably
necessary to permit the import of the API and other Synergy Materials into the
country where the Services will be performed.


 


4.       Project Manager.  Core Team.  Contractor will assign a project manager (the
“Project Manager”) and other members of the core Project team
(including, as relevant, a project director) (the “Core Team”) for the
duration of each project for which a Work Order has been authorized.  Contractor agrees to provide thirty (30) days
prior written notice to Company, whenever practicable, of any changes to the
Core Team, except as specified below. 
During any Project, Contractor will employ its commercially reasonable
efforts to promote members of the Core Team within the Project.  Contractor will provide Project-specific
training to replacement Core Team members at its own expense.  The Project Manager, or such other Core Team
Member agreed by the parties, shall be the primary contact for Company and
shall timely address all issues and concerns raised by Company, as well as
provide to Company all information requested by Company concerning this
Agreement or the Services.


 


5.     Shipping
and Inspection of Product.


 


5.1.         Shipping.  All Product shipped hereunder
shall comply in all material respects 


 


5

















 


with the applicable Manufacture and Release Requirements
and shall be accompanied by a certificate of analysis and cGMP certificate of
conformance, each  in a form to be agreed
upon by the parties.  Contractor agrees
to work with Synergy to deliver and transfer the Product to such locations and
in such manner as directed by Synergy. 
All Product generated hereunder shall be packaged and shipped to Synergy’s
designated destination and in accordance with Synergy’s written instructions
and in compliance with all applicable shipping regulations.  All risk to the Product shall pass to Synergy
upon delivery to Synergy’s carrier. 
Unless the parties agree in the applicable Work Order or otherwise,
Synergy shall designate a shipping company, coordinate with the shipping
company for the shipment of the Product, and be billed directly by the shipping
company for all related shipping costs.


 


5.2.         Evaluation
Period.  Synergy
shall have one (1) month from the date the Product is delivered to
its designated destination to evaluate the Product and reject the acceptance
thereof; provided that, Synergy
may reject any Product only if (a) Contractor fails to deliver the
certificate of analysis; (b) the Product does not meet the Specifications
in material respect as of (i) the date of delivery to Synergy’s carrier if
Synergy arranges shipment, or (ii) the date of delivery to Synergy if
Contractor arranges shipment ; or (c) the Product was not processed
according to the Manufacture and Release Requirements (including cGMP
requirements).  If Synergy fails to notify
Contractor of its rejection within such one month period, Synergy shall be
deemed to have accepted such Product. 
Notwithstanding the foregoing, such one (1)-month period shall be
extended to a period of three (3) months from delivery in the event a
defect is discovered which comprises a failure of Product to meet applicable
regulatory requirements. The right of rejection set forth in this section 5.2
shall not apply to defects in material that does not meet Specifications but
which Synergy agrees to accept irrespective of such defects.


 


5.3.         Rejection
of Product.


 


(a)           If
Synergy rejects any of the Product pursuant to Section 5.2, Synergy shall
(i) promptly provide to Contractor written notice of rejection that
includes the basis for such rejection and (ii) provide Contractor with the
opportunity to conduct its own tests to confirm such basis of rejection, which
shall be conducted promptly.  Synergy
shall return all remaining unused Product to Contractor; provided that Synergy may retain a sample
of such reject Product that is being used for laboratory testing and to confirm
its rights hereunder, but may not use any such sample for any human clinical
testing or trials.  Contractor shall
replace such rejected Product with conforming Product as soon as commercially
reasonable, but in no event after a period longer than the original lead time
required for shipment of Product as set forth in the applicable Work Order for
such Product.


 


(b)           Notwithstanding
the foregoing, if Synergy rejects the Product pursuant to Section 5.2(b) or
(c) and the Contractor disagrees with the basis for such rejection in
writing to Synergy within three (3) weeks of receipt of Synergy’s
notice  (such Product, the “Disputed
Product”), then the parties shall resolve such disputed rejection as follows:
(i) representatives from both parties shall promptly meet to confirm that
the methods of analysis are the same and are being executed in the same manner;
(ii) each party shall send samples to the other for analysis;
(iii) after such analysis, the parties shall discuss the results and use
good faith efforts for a period of ten (10) business days to reach
agreement regarding such disputed rejection. 
In the event the parties cannot resolve the matter, they shall in good
faith discuss and choose an independent third party laboratory to perform the
same analysis on the Disputed Product. 
The report of such laboratory shall be in writing, addressed to both
parties and shall state whether the Disputed Product 


 


6

















 


met the requirements of Section 5.2(b) and
(c), and shall be binding upon the parties. 
Synergy and Contractor shall be equally obligated to such laboratory for
the costs of such analysis, but upon the issuance to the parties of the report
therefor the prevailing party shall be promptly reimbursed by the other party
for its share of such costs actually paid (if any).


 


(c)           If
Synergy properly rejects any Product pursuant to this Section 5.3 and
Contractor cannot replace such rejected Product with conforming Product within
the time period set forth in Section 5.3(a), then Contractor shall refund
to Synergy all amounts paid for such rejected Product; provided that, Contractor shall not wait
for such time period to expire if it does not have a reasonable belief that it
could not meet such deadline.  Nothing in
this Section 5 shall permit Contractor to terminate or otherwise cancel
its other obligations under the same or other Work Orders or terminate this
Agreement.


 


(d)           Synergy’s
remedies in the event of a failure of Product to meet the Specifications shall
be limited to replacement of the nonconforming Product or the purchase price of
the particular Product at issue. CONTRACTOR SHALL NOT BE LIABLE, AND SYNERGY
WAIVES ALL CLAIMS AGAINST CONTRACTOR, FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES
BASED UPON NEGLIGENCE, BREACH OF WARRANTY, STRICT LIABILITY IN TORT OR ANY
OTHER CAUSE OF ACTION.


 


6.     Compliance with Applicable Law; Recalls.


 


6.1.         In
addition to Contractor’s obligations under Section 2.1, Contractor shall
also perform the Services in accordance with (a) Contractor’s applicable,
standard operating procedures (and shall, upon request, provide access to
Synergy on Contractor’s site to copies of all Contractor’s standard operating
procedures relevant to the Services), and (b) subject to Section 6.2,
applicable federal, state and local laws and regulations (including, but not
limited to, the FDA Act and other applicable rules and regulations of the
FDA and federal, state and local environmental and occupational safety and
health requirements).


 


6.2.         Should
any government regulatory requirement change that is applicable to the
Services, Contractor shall make a reasonable effort to satisfy the new
requirements.  If compliance with such
new regulatory requirements necessitates a change in a Work Order, Contractor
shall submit to Synergy a revised technical and cost proposal prior to making
any changes in such Work Order and shall not proceed until such changes have
been agreed upon pursuant to Section 2.1(b).  In the event Synergy does not approve such
changes, Synergy or Contractor may terminate the applicable Statement(s) of
Work with no further obligation to Contractor, and Contractor shall deliver to
Synergy all Work Product (including Products) generated by the Services until
that point and limit costs incurred, in both cases pursuant to Section 15.


 


6.3.         In the
event of a conflict in applicable government regulations, Contractor shall
notify Synergy, and at Synergy’s request shall contact the relevant
governmental authorities to obtain clarification and guidance regarding
compliance with the regulations in question. 
If there is a choice of regulations that may be validly used, the
parties shall work in good faith to agree on the designation of which
regulations shall be applicable.


 


7

















 


6.4.         Contractor
shall ensure that Projects intended to support INDs or NDAs shall comply with
all appropriate regulatory requirements applicable to such applications; provided that, it is expressly understood that Synergy or
its Affiliate, as applicable, is the Sponsor (as such term is defined in 21 CFR
Part 312.3) of any such IND or NDA, and that Synergy shall remain
responsible for all legal requirements applicable to Synergy of INDs or NDAs,
including but not limited to applicable regulations of the FDA and cGMP
requirements, except to the extent that such obligations may be and are
expressly transferred to Contractor by the specific terms and conditions of a
Work Order.  Contractor agrees to provide
to Synergy, either directly or through filing such material with FDA and
irrevocably and unconditionally providing Synergy with a right of reference to
such filing or filings, such information embodied in Product Intellectual
Property as Synergy may reasonably require for purposes of applying for and
maintaining application for regulatory approval of the Product, including,
without limitation, providing Synergy with all reports, authorizations,
certificates, methodologies, and other documentation in the possession or under
the control of Contractor relating to the synthesis or manufacture of the
Product (or any component thereof).  Such
information, if provided to Synergy, shall be deemed the Confidential Information
of Contractor, in accordance with the provisions of Section 1.7, and shall
be governed by the provisions of Sections 9 and 10.4, provided that it is
expressly understood that Synergy may provide such information to a regulatory
authority as necessary to support any application for authorization to conduct
clinical trials or regulatory approval of a Product or in response to the
requests or requirements of such regulatory authority, except to the extent
Synergy is required or strongly encouraged to maintain such information solely
at its facility by any relevant regulatory authority. Contractor will provide
to Synergy a copy of any correspondence with any regulatory authority related
to the Project, a Product or the Services within a reasonable time, not to
exceed three days from receipt or transmission of such correspondence.


 


6.5.         In the
event that Synergy shall be required or shall voluntarily decide to recall any
Product Manufactured by Supplier pursuant to this Agreement, then Contractor
shall cooperate with Synergy in implementing such recall.


 


7.             Audits; Progress Review; Records.


 


7.1.         As required by an applicable Work Order, Contractor shall provide Synergy
such periodic and final written reports (either in electronic or paper format),
as outlined in the Work Order.


 


7.2.         Synergy reserves the right to visit Contractor’s laboratories and to
inspect Contractor’s records during normal business hours and upon reasonable
notice (a) to confirm Contractor’s performance of this Agreement in
accordance with the terms of this Agreement, and/or (b) in the event
circumstances arise that would adversely affect the quality of Product,
Contractor shall immediately notify Synergy of such circumstances, Contractor
shall allow representatives of Synergy prompt access to  relevant Contractor areas and records.  In addition, during the Term of this
Agreement, Synergy shall have the right (either itself or through an agent)
during normal business hours and upon reasonable prior notice, to audit,
inspect and observe the manufacture, processing, testing, packaging, storage
and transportation of materials related to or used in the manufacture of the
Product(s), and to review all batch manufacturing records, for purposes of
conducting quality control audits required for its internal control or
confirming compliance with legal or other requirements as imposed pursuant to
this Agreement.  A representative of
Contractor may be present during such inspections.  Such representatives of Synergy shall have no
responsibility for or right to supervise Contractor’s employees performing the
manufacture, processing, testing, packaging, storage or transportation
operations or for the 


 


8

















 


operations themselves. 
Synergy shall be responsible for all its expenses related to such audits.
Observations made during any visit permitted by this Section 7.2 shall be
subject to the provisions of Section 9 hereof.


 


7.3.         Contractor shall retain experimental records and laboratory notebooks
relating to each Project, and shall maintain suitable CMC support documentation
to allow Synergy or its Affiliates to file an IND, IND amendment, NDA or
ANDA with the FDA.  All such
documentation and Work Product in Contractor’s possession (not otherwise
returned to Synergy) shall be archived in a secure area reasonably protected
from fire, theft or destruction by Contractor for a period of ten (10) years
following the completion of a given Project or earlier termination
thereof.  Synergy may elect to have the
materials retained in Contractor’s archives for an additional period of time
for a reasonable storage fee.


 


7.4.         With respect to a filing with the FDA, in the event Synergy intends to
(a) include documentation generated by Contractor, at least seven (7) days
prior to such filing, Synergy shall provide Contractor with relevant portions
of such documents for the sole purpose of Contractor’s confirmation of the
accuracy of such Contractor-generated data, or (b) incorporate in a
narrative fashion information about the Services (e.g., a description process manufacturing
in an IND), simultaneously with such filing Synergy shall provide Contractor
with a copy of the relevant portions of such documents.


 


8.             Payment.  All payments by Synergy shall be
made in accordance with the Work Order in U.S. dollars.  Payment will be due net thirty (30) days from
the date of Contractor’s invoice. 
Contractor shall have the right to seek to collect interest on any
payments that are not paid on or before thirty (30) days after the date
such payments are at a rate equal to the lesser of (a) one percent (1.0%)
per month or (b) the maximum rate allowable by applicable law, calculated
on the total number of days payment is delinquent. Upon request of Contractor,
Synergy shall provide adequate proof of financial resources prior to acceptance
of any Work Order by Contractor. Contractor reserves the right, in its sole
discretion, to determine whether to extend credit to Synergy at the time of
placement of each Work Order issued under this Agreement, or at any time during
the term of this Agreement.


 


9.             Confidential Information.


 


9.1.         Each party
hereto shall (a) hold the Confidential
Information of the other party (and/or its Affiliates, as applicable) in strict
confidence and take reasonable precautions to protect such Confidential Information
(including, without limitation, all precautions the receiving party normally
employs with respect to its own confidential information), (b) not divulge
any such Confidential Information to any third party (other than those parties
specifically permitted to receive such Confidential Information pursuant to the
terms of this Agreement), (c) not make any use whatsoever at any time of
such Confidential Information except to carry out its obligations under
this Agreement and the Projects and Work Orders hereunder and to exploit the
rights granted to such party hereunder,
(d) not derive any commercial benefit (whether direct or indirect) from
such Confidential Information (other than pursuant to Services rendered under
this Agreement), and (e) not copy (except as may be necessary to
accomplish the purposes of this Agreement) or reverse engineer any such
Confidential Information.


 


9.2.         Without
granting any right or license, a party’s obligations under this Article 9
shall not apply to Confidential Information that the other party can
demonstrate by reasonable documentary evidence: (a) was in its possession
prior to receipt from the disclosing party (or, in the case of Work Product,
prior to its generation under this Agreement); (b) was in the public
domain at the time of receipt from the disclosing party (or, in the case of
Work Product, prior to


 


9
















 


its
generation under this Agreement); (c) becomes part of the public domain
without breach of such party’s obligations of confidentiality under this
Agreement; or (d) is lawfully received by the receiving party from a third
party, where the third party is wholly independent of the receiving party and
has no obligation of confidentiality to disclosing party with respect to such
information disclosed.  Notwithstanding
the foregoing, (i) Confidential Information shall not fall within an
exception set forth in this Section 9.2 merely because such Information is
embraced by more general information in the public domain or in the possession
of the receiving party, and (ii) the fact that any Work Product may fall
within one or more of the exceptions set forth in this Section 9.2 shall
not relieve Contractor or Synergy of its obligations under Sections 9.1(a) or
(b).


 


9.3.         In the event a
party is required to disclose Confidential Information of the other party
pursuant to an order of a court or administrative agency or other governmental
body with valid jurisdiction, the receiving party may disclose Confidential
Information only after providing the disclosing party with reasonable advance
notice thereof to enable the disclosing party to seek a protective order or otherwise
prevent such disclosure, but nothing herein shall require a party to take or
refrain from taking any action in violation of any such legal process.


 


9.4.         Each party
shall limit the disclosure of Confidential Information to its or its Affiliates’
directors, employees and agents (and in the case of Contractor, to its
permitted subcontractors, if any), in each case with a legitimate “need to know”
and who are bound in writing to observe the obligations of nondisclosure and
non-use under this Agreement.  Information exchanged by and between the
parties and any such directors, employees and/or agents shall be deemed the
Confidential Information of the party on whose behalf such information was
disclosed, and shall be governed by the provisions of Sections 1.8 and
9.  For the avoidance of doubt, any
information of a party not specifically disclosed but of which any director,
employee or agent becomes aware via site visits or otherwise shall be the
Confidential Information of such party.


 


9.5.         Except as otherwise
specified in this Agreement, each party shall upon the request of the other
party, turn over to the disclosing party all Confidential Information of the
disclosing party in the receiving party’s possession or control (including any
copies or extracts thereof) or destroy such records and certify the destruction
thereof, except for any copy legally required to be retained for archive
purposes.


 


9.6.         Each party acknowledges and agrees that due to the unique nature of the
disclosing party’s Confidential Information, there can be no adequate remedy at
law for any breach of its obligations hereunder, that any such breach may allow
the receiving party or third parties to unfairly compete with the disclosing
party, and therefore, that upon any such breach or any threat thereof, the
disclosing party shall be entitled to appropriate equitable relief in addition
to whatever remedies it might have at law. 
The receiving party shall notify the disclosing party in writing immediately
upon the occurrence of any such unauthorized release or other breach of which
it becomes aware.


 


9.7.         The obligations
of each party with respect to Confidential Information disclosed in connection
with any Project shall continue in effect until completion or other termination
of such Project and for ten (10) years thereafter.


 


10.          Ownership, Inventions
and Patents; Assignment; License Grants.


 


10.1.       All
intellectual property (including, without limitation, Confidential Information)
of Synergy in existence as of the Effective Date is and shall remain the
exclusive property of 


 


10

















 


Synergy.  Synergy hereby grants to Contractor, on a
Project by Project basis and for the duration of such Project, a non-exclusive
license (with no right to sublicense) to use such Synergy intellectual property
actually disclosed (or transferred, as applicable) to Contractor solely for the
purpose of, and only to the extent strictly necessary for, Contractor’s
performance of the applicable Services.


 


10.2.       All intellectual
property (including, without limitation, Third Party Rights and Confidential
Information) of Contractor in existence as of the Effective Date is and shall
remain the exclusive property of Contractor. 
Contractor hereby grants to Synergy, on a Project by Project basis, a
fully paid-up, royalty free, irrevocable (subject to the provisions of Section 15.2
(a)), worldwide, non-exclusive license to use such Contractor intellectual
property solely for the purpose of, and only to the extent strictly necessary
for, Synergy’s full use and enjoyment (including the commercialization of
Products) of the Work Product. For the avoidance of doubt, the foregoing
license is not intended to enable Synergy to manufacture, or have manufactured,
the Product using any process developed and owned by Contractor as of the
Effective Date. This license shall not apply to 
any Product Intellectual Property embodied  in such Contractor intellectual property, for
which Section 10.4 shall apply.


 


10.3.       (a) Each
Party shall own such data, information, developments, ideas and inventions as
its employees or contractors may make in the course of performance under this
Agreement. In particular, Contractor shall own all Product Intellectual
Property.


 


(b) Data, information, developments, ideas and
inventions made jointly by the parties (“Joint Developments”) shall be jointly
owned, and each party shall have a permanent, worldwide nonexclusive right to
use and authorize others to use such Joint Developments without any obligation
to obtain the consent of or account to the other Party. In the event of any
patentable Joint Development, the parties shall meet in order to decide (i) whether
they will apply for patent protection, and if they decide to do so, (ii) the
countries in which they will file the related patent application(s). In the
event the Parties decide to file in joint ownership any related patent right,
the administration procedure for any such patent right shall be agreed upon
between the Parties before any commercial exploitation of the same. All
external costs related to the filing, prosecution, maintenance and defense of
any related patent right in the countries agreed upon by the parties shall be
shared as agreed by the parties.


 


10.4.       Contractor
hereby grants to Synergy and its Affiliates a fully paid-up, royalty free,
irrevocable, fully transferable, worldwide, non-exclusive license (with the
right to sublicense) under Product Intellectual Property to the extent
necessary or useful, to use, have used, disclose, modify, reproduce, enhance,
sell, make or have made derivative works thereof, and to develop, make, have
made, use, sell, offer to sell and import Product. The foregoing right includes
the right to disclose Product Intellectual Property comprising Confidential
Information of Contractor under an obligation of confidentiality in connection
with manufacturing, licensing, or regulatory approval matters or in connection
with a potential sale of Synergy’s business. Notwithstanding the foregoing,
Contractor is not required to disclose Product Intellectual Property to Synergy
unless otherwise required to do so under this Agreement. For the avoidance of
doubt, the foregoing license is intended to preclude Contractor from asserting
any right in Product Intellectual Property against Synergy in a manner which
would preclude Synergy from manufacturing Product for itself or having Product
manufactured for it, but is not necessarily intended to enable Synergy to
manufacture Product using the process developed by Contractor.


 


11

















 


10.5.       If requested by a party, the other party shall execute any and all
documents necessary to assign or perfect the first party’s ownership in
inventions or discoveries (as determined under this Section 10) at such first
party’s expense.


 


10.6.       Except as expressly agreed to by the parties
in this Agreement or any Work Order, nothing contained herein, nor the delivery
of any Confidential Information of one party to the other, shall be deemed to
grant any right or license under any patent or patent applications or to any
intellectual property of the first party to the other.


 


11.          Insurance.


 


Contractor agrees, throughout the performance of each
Project and for five (5) years thereafter, to keep in full force and
effect and maintain at its sole cost and expense insurance coverage in types
and amounts commensurate in its industry for the performance of services
substantially similar to the Services by similarly sized service providers and
as otherwise prudent or required by law, which coverage will be placed with a
first class insurer with at least an A+:X rating by AM Best.  Contractor agrees to provide Synergy with
certificates of insurance if requested to do so by Synergy.


 


12.          Representations, Warranties
and Covenants.


 


12.1.       Representations,
Warranties and Covenants.


 


(a)           Contractor hereby represents, warrants and covenants to Synergy that it
has and shall engage competent employees and consultants with the proper skill,
training and background to support its obligation to render the Services
hereunder, and shall provide the facilities, supplies and staff necessary to
complete each Project as specified in the Work Order for such Project, and in
accordance with the other terms of this Agreement.


 


(b)           Contractor and Synergy each represents, warrants and covenants to the
other that it has and shall continue to have written agreements with its
directors, officers, employees, agents, subcontractors and representatives to
effectuate the terms of this Agreement, including without limitation
Sections 9 and 10, and shall enforce such agreements to provide the other
with the benefits thereof.


 


(c)           Contractor warrants and covenants that each Project shall be performed in
all material respects in accordance with the terms of this Agreement and the
applicable Work Order and all Product will conform in all respects to the
Specifications and Manufacture and Release Requirements set forth in the
applicable Work Order at the time of delivery to Synergy’s carrier if Synergy
arranges for shipment, or time of delivery to Synergy if Contractor arranges
shipment; provided that should Synergy agree to accept Product with actual
knowledge that is fails to meet Specifications, the warranty that the Product
meets Specifications will be deemed waived with respect to a defect known to
Synergy at the time of acceptance.


 


(d)           Contractor is under no contractual or other obligation or restriction
that is inconsistent with Contractor’s execution of its obligations under this
Agreement, including the performance of the Services.  During the term of this Agreement, Contractor
will not enter into any agreement, either written or oral, in conflict with its
obligations hereunder.  Contractor shall
provide the Services in a manner that the 


 


12

















 


provision thereof will not conflict with its
responsibilities under any other agreement, arrangement or understanding,
including any employment relationship.


 


(e)           Contractor shall not knowingly use any Third Party Rights in the
rendition of the Services without the prior written consent of Synergy.


 


12.2.       Mutual Representation and Warranties.  Each of Synergy and Contractor hereby
represent and warrant that:


 


(a)           such party is, and at all times during the term of the Agreement shall
remain, a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization; and


 


(b)           the
execution and delivery of this Agreement has been duly authorized by all
requisite corporate action.  This Agreement
is, and shall remain, a valid and binding obligation of such party, enforceable
pursuant to its terms, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors.


 


12.3.       THE WARRANTIES EXPRESSLY MADE IN THIS AGREEMENT ARE THE SOLE WARRANTIES
PROVIDED BY THE PARTIES AND ARE EXPRESSLY IN LIEU OF ALL IMPLIED WARRANTIES, INCLUDING
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  Except as provided elsewhere in this
Agreement, Contractor does not warrant that any Project design(s) and/or
the results of such Project(s) shall necessarily satisfy the requirements
of the FDA at the time of submission.


 


13.          Indemnification.   Notwithstanding any other provisions of this
Agreement;


 


13.1.       Synergy shall indemnify, defend and hold harmless Contractor, its
Affiliates and its and their respective agents, directors and employees, from
and against any and all losses, costs, expenses, liabilities, claims, actions
and damages (including without limitation reasonable attorney’s fees, and
arbitration and/or litigation costs) (“Losses”) actually incurred and resulting
from a claim brought by a third party arising out of or related to: (a) the development, manufacture, use or
commercialization of a Product (or any product derived from a Product) by
Synergy or its Product (or product) licensee; or
(b) any breach of its representations, warranties or obligations in this
Agreement, except in each case to the extent caused by the gross negligence or
willful misconduct of Contractor, its Affiliates and its and their agents or
employees.


 


13.2.       Contractor shall indemnify, defend and hold harmless Synergy, its
Affiliates and its and their respective agents, officers and employees, from
and against any and all Losses actually incurred and resulting from a claim
brought by a third party arising out of or related to: (a) the failure to
implement the Project and any Work Order pursuant to their terms and the other
terms of this Agreement, or (b) any breach of its representations,
warranties or obligations in this Agreement, except in each case to the extent
caused by the gross negligence or willful misconduct of Synergy, its Affiliates
and its and their agents or employees.


 


13.3.       If a party is entitled to indemnification hereunder (the “Indemnified
Party”), it shall promptly notify the other party (the “Indemnifying Party”)
and the Indemnifying Party shall undertake the defense or settlement of any
third party claim or action to which its indemnification may be applicable. If
the Indemnifying Party fails to undertake such defense within a reasonable
time, the Indemnified Party may defend or settle the matter in its sole
discretion and seek the 


 


13

















 


appropriate remedy from the Indemnifying Party. However,
the Indemnifying Party may not settle a claim without the Indemnified Party’s
prior written consent if such settlement would impose on Indemnified Party any
liability or obligation, and such consent shall not be unreasonably withheld or
delayed.


 


14.          Debarment.


 


14.1.       Contractor represents and
warrants that it has not been debarred, and has not been convicted of a crime
which could lead to debarment, under the Debarment Act.  In the event that Contractor or any of its
officers, directors, or employees becomes debarred or receives notice of action
or threat of action with respect to its debarment, Contractor shall notify
Synergy immediately in writing.


 


14.2.       Contractor represents and
warrants that it has not utilized, and shall use its reasonable best efforts
not to utilize, the services of any individual or entity in the performance of
services under this Agreement that has been debarred or that has been convicted
of a crime which could lead to debarment under the Debarment Act.  In the event that Contractor receives notice
of the debarment or threatened debarment of any such individual or entity,
Contractor shall notify Synergy immediately.


 


15.          Term and Termination.


 


15.1.       This Agreement shall be in effect from the Effective Date and for a
period of five years, unless terminated by either party as expressly permitted
in this Agreement; provided that,
in the event either party delivers a termination notice pursuant to this
Section 15, the parties shall fulfill their respective obligations under
any outstanding Work Order(s).


 


15.2.       In addition to the provisions of Section 15.1:


 


(a) either
party may terminate this Agreement or any Work Order in the event of a material
misrepresentation or breach of a material obligation of the other party, if
such misrepresentation or breach remains uncured, or in the case of a breach
that cannot reasonably by cured within such time period, the breaching party
fails to take significant measures to achieve a cure, to the reasonable
satisfaction of the non-defaulting party for thirty (30) days after delivery of
written notice of such breach by the non-defaulting party to the defaulting
party.  In the event Contractor delivers
a termination notice pursuant to this Section 15.2 and does not indicate
in such notice that it shall cease the rendition of the Services to which such
material misrepresentation or breach relates, Contractor shall complete all
existing Projects pursuant to their terms. 
In the event Synergy delivers a termination notice pursuant to this Section 15.2,
Contractor shall promptly comply with the terms
of such notice(s) to terminate work on the Project(s) or Work Orders
(as applicable) and use its best efforts to limit any further cost to Synergy,
and Synergy shall pay Contractor all of its costs incurred or irrevocably
obligated as of the date of termination, in each case pursuant to this
Agreement.


 


(b) Synergy may terminate any Project or Work Order
(or a portion thereof) at any time prior to completion by giving written notice
to Contractor. Synergy may, on termination of all Projects and Work Orders,
terminate this Agreement. Contractor shall promptly comply with the terms of
such notice(s) to terminate work on the Project(s) or Work Order(s) (as
applicable) and use its best efforts to limit any further cost to Synergy, and 


 


14

















 


Synergy shall pay Contractor all of its costs incurred
or irrevocably obligated as of the date of termination and any applicable fees,
in each case pursuant to this Agreement.


 


(c) this Agreement may be terminated in whole or in
part as set forth in Section 2.5.


 


(d) notwithstanding the provisions of Section 15(a),
Contractor may terminate this Agreement 
or suspend further deliveries immediately upon written notice to Synergy
if Synergy fails to make timely payment of amounts due hereunder if such
nonpayment remains uncured for ten (10) days following delivery of written
notice thereof from Contractor to Synergy.


 


15.3.       Except as set forth in Section 15(d),
upon delivery of a notice to terminate the Agreement pursuant to this
Section 15, the Agreement shall terminate contemporaneously with the later
of the termination date set forth in such notice and the completion of any
final Work Order(s).


 


15.4.       Upon termination of the
Agreement or any Work Order by either party, Contractor shall promptly deliver
to Synergy all Product, reports, data, records and other Work Product generated
by Contractor for the Project(s) and Statement(s) of Work and return
all remaining Synergy Materials to Synergy, in each case as applicable.
Notwithstanding the foregoing, Contractor shall not provide batch records or
process information, except as set forth in Section 6 of this agreement.


 


15.5.       The termination of this
Agreement for any reason shall not relieve the parties of any obligation
accruing prior to such termination.  In
no way limiting the generality of the foregoing, Sections 1, 6, 7, 9, 10,
11, 12, 13, 16 and 17 shall
survive the termination of this Agreement.


 


16.          Regulatory Filings and Contacts; Audits.


 


16.1.       Contractor shall give Synergy reasonably prompt
notice in the event of any changes, additions or corrections to any Drug Master
File that it owns, controls or otherwise maintains, in each case as related to
Product.


 


16.2.       Synergy shall be solely responsible for all contacts
and communications with any regulatory authority regarding the provision of
Services hereunder.  Unless required by
applicable law, Contractor shall have no contact or communication with any
regulatory authority regarding the provision of the Services hereunder without
the prior written consent of Synergy, which shall not be unreasonably withheld
or delayed.  Contractor shall: (a) promptly notify Synergy in writing of any  FDA or other governmental inspection or
inquiry concerning any Project or Work Order, including, but not limited to,
inspections of investigational sites or laboratories (a “Regulatory Audit”);
(b) promptly forward to Synergy copies of any correspondence from any
regulatory or governmental agency relating to such Regulatory Audit, including,
but not limited to, FDA Form 483 notices and FDA refusal to file,
rejection or warning letters; and (c) obtain the written consent of
Synergy, which will not unreasonably be withheld or delayed, before referring
to Synergy or any of its affiliates in any Regulatory Audit
correspondence.  Synergy may, in its
reasonable discretion, have a representative present during a Regulatory Audit
inspection.  In the event such a
representative is present, Synergy acknowledges that it may not direct the
manner in which Contractor fulfills its obligations to permit inspection by
governmental entities.


 


16.3.       Should any Regulatory Audit or other inspection or
audit by a regulatory authority require any process changes, Contractor shall
notify Synergy immediately and the 


 


15

















 


parties shall discuss the means for implementing such changes.  For the avoidance of doubt, Contractor may
not implement any such change to a Product-related Process without Synergy’s
prior, written consent (including pursuant to a Change Order).


 


16.4.       Contractor agrees that, during
a Regulatory Audit, it will not disclose information and materials that are not
required to be disclosed to such agency without the prior consent of Synergy,
which shall not unreasonably be withheld or delayed.   For example, such information and materials
that a party conventionally would not be required to disclose include, but are
not limited to, (a) financial and pricing data (including, but not limited
to, the budget and payment sections of a Work Order), (b) sales data
(other than shipment data), and (c) personnel data (other than data as to
qualification of technical and professional persons performing functions
subject to regulatory requirements).


 


16.5.       All information disclosed,
revealed to or ascertained by Synergy or Contractor, as the case may be, in
connection with any such Regulatory Audit or in connection with any
correspondence between Contractor and any regulatory authorities (including the
redacted portions of any FDA Form 483 notices) shall be deemed to
constitute Confidential Information for purposes of this Agreement.


 


17.          Miscellaneous.


 


17.1.       Independent
Contractor.  It is expressly agreed that the
relationship between Synergy and Contractor shall not constitute a partnership,
joint venture or agency.  Neither Synergy
nor Contractor shall have the authority to make any statements, representations
or commitments of any kind, or to take any action, which shall be binding on
the other, without the prior consent of the other party to do so.


 


17.2.       Governing
Law.  This Agreement shall be governed
by the laws of the State of New York, U.S.A. without regard to the conflicts of
law provisions thereof.


 


17.3.       Publicity;
Use of Names. Neither party may publish any articles or make any presentations relating
to the Services provided hereunder or referring to data, information or
materials generated as part of such Services, in whole or in part, without the
prior written consent of the other.  In addition, except as required by law
or the rules of any stock exchange or market on which securities of a
party are listed, neither party
shall use the name of the other party or the names of the employees of the
other party in any advertising or sales promotional material or in any
publication without prior written permission of such party.


 


17.4.       Merger,
Consolidation or Sale of Assets; Assignment.  Neither party may assign any of its rights or
obligations under this Agreement without the prior written consent of the
other, which consent shall not be unreasonably withheld or delayed, provided
that each party may grant sublicenses as provided in this Agreement and assign
its rights and obligations hereunder in connection with a merger, consolidation
or the sale of substantially all of the assets to which this Agreement relates.
Any permitted assignee shall assume all obligations of its assignor under this
Agreement, unless the parties otherwise agree. For purposes of this Agreement,
a merger, consolidation or sale of all or substantially all of a party’s assets
shall not be deemed an assignment; provided that such party’s rights and
obligations under this Agreement shall be assumed by its successor in interest
in any such transaction and shall not be transferred separate from all or
substantially all of its other business assets, including those business assets
that are the subject of this Agreement.


 


16

















 


17.5.       Severability.  If any
provision of this Agreement is held to be illegal, invalid, or unenforceable
under present or future state or federal laws or rules and regulations
promulgated thereunder effective during the term hereof, such provision shall
be fully severable, and this Agreement shall be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part
hereof, and the remaining provisions hereof shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom.


 


17.6.       Notices.   Other
than payments pursuant to Section 8 or standard communications pursuant to
Section 4, any notice to be given to a
party under or in connection with this Agreement shall be in writing and shall
be delivered (a) personally, (b) by a nationally recognized overnight
courier or by certified mail, postage prepaid, return receipt requested, (c) via
facsimile, with receipt confirmed, or (d) if actually received, by U.S.
mail, addressed to such party at its address indicated below, or to such other
address as the addressee shall have last furnished in writing to the addressor
and shall be effective upon receipt by the addressee:


 


	
  If to Contractor:

  	
  If
  to Synergy:

  
	
   

  	
   

  
	
   

  	
  [*]

  	
  Synergy
  Pharmaceuticals Inc.

  
	
   

  	
  [Admin
  office address]

  	
  420
  Lexington Avenue, Suite 1609

  
	
   

  	
   

  	
  New
  York, NY 10170

  
	
   

  	
  Attention:

  	
  Attention:
  Gary S. Jacob, Ph.D.

  
	
   

  	
  Phone:

  	
  Telephone:
  212-297-0010

  
	
   

  	
  Fax:

  	
  FAX:
  212-297-0020

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With
  a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mintz,
  Levin, Cohn, Ferris, Glovsky and Popeo, PC

  
	
   

  	
   

  	
  One
  Financial Center

  
	
   

  	
   

  	
  Boston,
  MA 02111

  
	
   

  	
   

  	
  Attention:
  John A. Dellapa

  
	
   

  	
   

  	
  Telephone:
  (617) 348-1797

  
	
   

  	
   

  	
  Fax:  (617) 522-2241

  
	
   

  	
   

  	
  Email:
  jadellapa@mintz.com

  



 


17.7.       Dispute Resolution.  The parties hereby agree that
they shall attempt in good faith to resolve any controversy or claim arising
out of or relating to this Agreement promptly by negotiations.  If a controversy or claim should arise
hereunder, the matter shall be referred to an individual designated by the
chief executive officer (or the equivalent position) of Synergy and an
individual designated by the chief executive officer (or the equivalent
position) of Contractor.  If the matter
has not been resolved within thirty (30) days of the first meeting of the
representatives of the parties (which period may be extended by mutual
agreement) concerning such matter, subject to rights to injunctive relief and
specific performance, and unless otherwise specifically provided for herein,
any controversy or claim arising out of or relating to this Agreement, or the
breach thereof, may be brought in any court of competent jurisdiction.


 


17.8.       Waiver.  No waiver of any provision of
this Agreement, whether by conduct or otherwise, in any one or more instances
shall be deemed to be or be construed as a further or 


 


17

















 


continuing waiver of any such provision in any
other instance, or of any other provision or condition of this Agreement.


 


17.9.       Entire
Agreement; Modification.  This
Agreement (including the Work Orders) supersedes all prior discussions and
writings and constitutes the entire agreement between the parties with respect
to the subject matter hereof.  No waiver
or modification of this Agreement shall be binding upon either party unless
made in writing and signed by a duly authorized representative of such party
and no failure or delay in enforcing any right shall be deemed a waiver.  In the event of any conflict between this
Agreement and any Work Order, the terms of this Agreement shall control.


 


IN WITNESS WHEREOF, the parties have caused their duly
authorized officers to execute and deliver this Master Services Agreement as of
the Effective Date.


 


	
   Synergy:

  	
  SYNERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Kunwar Shailubhai

  
	
   

  	
  Name:

  	
  Kunwar Shailubhai

  
	
   

  	
  Title: 

  	
  CSO

  
	
   

  	
  Date: 

  	
  July 19, 2010

  
	
   

  	
   

  
	
   

  	
   

  
	
   Contractor:

  	
  *

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ *

  
	
   

  	
  Name:

  	
  *, Ph.D.

  
	
   

  	
  Title: 

  	
  Vice President & General Manager

  
	
   

  	
  Date: 

  	
  July 20, 2010

  



 


18

















 


EXHIBIT A


 


 


FORM OF WORK ORDER


 


Pursuant to Section 2.1 of the Master
Services Agreement dated
                
    , 200    , by and between Synergy
Pharmaceuticals Inc.  and * and in
consideration of the mutual promises contained therein and for other good and
valuable consideration the receipt and adequacy of which each of the parties
does hereby acknowledge, the parties hereby agree to amend Exhibit B by
adding the attached new Work Order entitled
                                                                                                  
                                                                    ,
which is designated Work Order B -     .  This Work Order is effective as of                               ,
200   .


 


Work Order B -
       may contain the following Attachments,
each of which is made a part hereof:


 


Attachment A – Purchase order or Purchase Order
Number


Attachment
B – Description of Services/Specifications/Description of Deliverables and
Intended Use of Deliverables


Attachment
C - Quality Requirements


Attachment D – Budgets, Fees, Pass-through Costs,
and Payment Schedule


Attachment E – Materials Provided by Either Party


Attachment F – Project Schedule


Attachment G – Key Team Members


Attachment H – Reports and Information
Management/Regular Meetings


Attachment I — Special Insurance


 


Note:  A
majority of the attachments may be provided in a project proposal provided to
Synergy by Contractor


 


	
  SYNERGY PHARMACEUTICALS, INC.

  	
   

  	
  *

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  



 


Acknowledged and Agreed:


 


	
   

  	
   

  	
   

  
	
   

  	
  , Project Manager

  	
   

  



 


19