ptn_ex102






EXHIBIT 10.2


 



Portions of this Exhibit have been redacted because they are both
(i) not material and (ii) would be competitively harmful if
publicly disclosed. Information that was omitted has been noted in
this document with a placeholder identified by the mark
“[***]”


 


 







COMMERCIAL SUPPLY AGREEMENT

 



(Bremelanotide–Pre-filled syringe in
auto-injector)

 



THIS COMMERCIAL SUPPLY AGREEMENT (“Agreement”) is made as of this
29th day
of September, 2020 (“Effective Date”)

 



BETWEEN

 




(1)

Palatin
Technologies, Inc., a New Jersey corporation, with a place of
business at 4-B Cedar Brook Drive, Cranbury, New Jersey, USA 08512
(“Palatin”);
and





 




(2)

Catalent Belgium
S.A., a Belgian company, with a place of business at Rue Font St.
Landry, 10 Parc Mercator B-1120, Neder over Heembeek, Belgium
(“Catalent”).





 



RECITALS

 




A.

Palatin is a
biopharmaceutical company that develops, tests and commercializes,
directly or through third parties, pharmaceutical
products.





 




B.

Catalent is a
leading provider of advanced technologies, and development,
manufacturing and packaging services for pharmaceutical,
biotechnology and consumer healthcare companies.





 




C.

Palatin desires to
engage Catalent to provide certain services to Palatin in
connection with the processing of Palatin’s Product (as
defined below), and Catalent desires to provide such services, all
pursuant to the terms and conditions set out in this
Agreement.





 


THEREFORE, the parties agree as
follows:

 

1. DEFINITIONS

 


The
following terms have the following meanings in this
Agreement:

 

1.1 “Acknowledgement” has the meaning
set out in Clause 4.3.

 

1.2 “Affiliate” means (a) with respect to Palatin, any
corporation or other business entity that, directly or indirectly,
is controlled by, controls, or is under common control with
Palatin; and (b) with respect to Catalent, Catalent, Inc., Catalent
Pharma Solutions, Inc. and any corporation or other business entity
controlled, directly or indirectly, by Catalent Pharma Solutions,
Inc. For such purposes, “control” means the direct or indirect ownership of
at least fifty percent (50%) of the voting interest in such
corporation or other entity or the power in fact to control the
management directions of such entity.

 

1.3 “Agreement” has the meaning set out
in the introductory paragraph, and includes all its Attachments and
other appendices (all of which are incorporated herein by
reference).

 



 







 





 

1.4 “Annual Product Maintenance Fee”
has the meaning set forth in Clause 7.1C.

 

1.5  “API”
means the compound bremelanotide, as further described in the
Specifications.

 

1.6 “API Inventions” has the meaning
set out in Section 11.

 

1.7 “Applicable Laws” means,
with respect to Palatin, all
laws, statutes, statutory provisions or subordinate legislation,
currently in effect or enacted or promulgated during the Term, and
as amended from time to time, of each jurisdiction in which API or
Product is produced, marketed, distributed, used or sold; and with
respect to Catalent, cGMP and all other laws, statutes, statutory
provisions and subordinate legislation, currently in effect or
enacted or promulgated during the Term, and as amended from time to
time, of the jurisdiction in which Catalent Processes
Product.

 

1.8 “Auto Injector Assembly Line” means
the Processing line expansion for auto injector assembly undertaken
by Catalent pursuant to the Manufacturing Preparation and Services
Agreement.

 

1.9 “Batch” means a defined quantity of
Product that has been or is being Processed in accordance with the
Specifications.

 

1.10 “Catalent
Defective Processing” has the meaning set out in
Clause 5.2.

 

1.11 “Catalent”
has the meaning set out in the introductory paragraph. Catalent
shall have the right to cause any of its Affiliates to perform any
of its obligations hereunder, and Palatin shall accept such
performance as if it were performance by Catalent.; provided, however, that Catalent shall remain
fully liable for the performance by its Affiliate of
Catalent’s obligations under this Agreement to the same
extent as if Catalent had performed or failed to perform its
obligations under this Agreement.

 

1.12 “Catalent
Indemnitees” has the meaning set out in Clause
13.2.

 

1.13 “Catalent
IP” has the meaning set out in Section
11.

 

1.14 “cGMP”
means current Good Manufacturing Practices promulgated by the
Regulatory Authorities in the jurisdictions included in Applicable
Laws. This includes 2003/94/EEC Directive (as supplemented by
Volume 4 of EudraLex published by the European Commission), as
amended, if and as implemented in the relevant constituent country;
and in the United States, this includes 21 C.F.R. Parts 210 and
211, as amended.

 

1.15 “Change
of Control” means, with respect to a party: (a) any
merger, reorganization, consolidation, or other business
combination of such party with a third party that results in the
voting securities of such party outstanding immediately prior
thereto ceasing to represent at least fifty percent (50%) of the
combined voting power of the surviving entity immediately after
such merger, reorganization, consolidation, or other business
combination; (b) a third party becoming the beneficial owner of
fifty percent (50%) or more of the combined voting power of such
party in a single transaction or series of related transactions; or
(c) the sale, transfer, exchange or other disposition to a third
party of all or substantially all of a party’s assets or
business relating to this Agreement (whether alone or in connection
with a sale, transfer, exchange or other disposition of other
assets or businesses of such party).

 

1.16 “Confidential
Information” has the meaning set out in Clause
10.1.

 

1.17 “Contract
Year” means, with respect to the initial Contract
Year, the period beginning on the Effective Date and ending on
August 20, 2021, and, with respect to each successive Contract
Year, each consecutive 12 month period beginning on August 21 and
ending on August 20 of the following calendar year, as
applicable.

 

1.18 “CPR”
has the meaning set out in Clause 18.10.

 



 







 





 

1.19 “Defective
Product” has the meaning set out in Clause
5.2.

 

1.20 “Discloser”
has the meaning set out in Clause 10.1.

 

1.21 “Effective
Date” has the meaning set out in the introductory
paragraph.

 

1.22 “Equipment”
means any equipment to be supplied by Catalent to use in the
Processing, including any equipment procured under the
Manufacturing Preparation and Services Agreement.

 

1.23 “Exception
Notice” has the meaning set out in Clause
5.2.

 

1.24 “Facility”
means Catalent’s facility in Brussels, Belgium or such other
Catalent facility as mutually agreed by the parties.

 

1.25 “FDA”
means the United States Food and Drug Administration or any
successor thereto.

 

1.26 “Firm
Commitment” has the meaning set out in Clause
4.2.

 

1.27 “Invention”
has the meaning set out in Section 11.

 

1.28 “Losses”
has the meaning set out in Clause 13.1.

 

1.29 “Manufacturing
Preparation and Services Agreement” means that certain
manufacturing preparation and services agreement, dated as of June
10, 2016 between Catalent and Palatin.

 

1.30 “Minimum
Requirement” has the meaning set out in Clause
4.1.

 

1.31 “Palatin”
has the meaning set out in the introductory paragraph, or any
successor or permitted assign.

 

1.32 “Palatin
Indemnitees” has the meaning set out in Clause
13.1.

 

1.33 “Palatin
IP” has the meaning set out in Section
11.

 

1.34 “Palatin-supplied
Materials” means any materials to be supplied by or on
behalf of Palatin to Catalent for Processing, as provided in
Attachment C,
including API, Ypsomed auto injector components and parts, and
reference standards.

 

1.35 “Price”
shall have the meaning set forth in Attachment D
hereto.

 

1.36 “Process”
or “Processing”
means the compounding, filling, producing, manufacturing,
assembling and packaging (clinical, secondary or retail packaging)
of Palatin-supplied Materials and Raw Materials into Product by
Catalent, in accordance with the Specifications and under the terms
of this Agreement.

 



 







 





 

1.37 “Processing
Date” means the day on which the first step of
physical Processing is scheduled to occur, as identified in an
Acknowledgement.

 

1.38 “Process
Inventions” has the meaning set out in Section
11.

 

1.39 “Product”
means the pharmaceutical product containing the API, as more
specifically described in the Specifications.

 

1.40 “Product
Maintenance Services” has the meaning set out in
Clause 2.3.

 

1.41 “Purchase
Order” has the meaning set out in Clause
4.3.

 

1.42 “Quality
Agreement” has the meaning set out in Clause
9.6.

 

1.43 “Raw
Materials” means all raw materials, supplies,
components, syringes, and packaging necessary to manufacture and
ship Product in accordance with the Specifications, as provided in
Attachment C, but
excluding Palatin-supplied Materials.

 

1.44 “Recall”
has the meaning set out in Clause 9.5.

 

1.45 “Recipient”
has the meaning set out in Clause 10.1.

 

1.46 “Regulatory
Approval” means any approvals, permits, product and/or
establishment licenses, registrations or authorizations, including
European marketing authorizations and applications and U.S.
Investigational New Drug applications, New Drug Applications and
Abbreviated New Drug Applications, as applicable, of any Regulatory
Authorities that are necessary or advisable in connection with the
development, manufacture, testing, use, storage, exportation,
importation, transport, promotion, marketing, distribution or sale
of API or Product in the Territory.

 

1.47 “Regulatory
Authority” means the regulatory bodies or agencies in
the Territory that are responsible for (A) the regulation
(including pricing) of any aspect of pharmaceutical or medicinal
products intended for human use or (B) health, safety or
environmental matters generally. This includes the European
Medicines Agency; and in the United States, this includes the
United States Food and Drug Administration.

 

1.48 “Representatives”
of an entity means such entity’s duly-authorized officers,
directors, employees, agents, accountants, attorneys or other
professional advisors.

 

1.49 “Review
Period” has the meaning set out in Clause
5.2.

 

1.50 “Required
Disclosure” has the meaning set out in Clause
5.2.

 

1.51 “Rolling
Forecast” has the meaning set out in Clause
4.2.

 

1.52 “Specifications”
means the procedures, requirements, standards, quality control
testing and other data and the scope of services as set out in
Attachment C, as
modified from time to time in accordance with Section
8.

 

1.53 “Supply
Failure” has the meaning set forth in Clause
4.7.

 

1.54 “Term”
has the meaning set out in Clause 16.1.

 



 







 





 

1.55 “Territory”
means the European Union and the United States and its territories
and possessions, those countries that are listed in Attachment E,
and any other country that the parties agree in writing to add to
this definition of Territory in an amendment to this Agreement;
provided, however, that Territory shall not be amended to include
countries that are targeted by the comprehensive sanctions,
restrictions or embargoes administered by the United Nations,
European Union, United Kingdom, or the United States. Catalent
shall not be obliged to Process Products for sale in any of such
countries if it is prevented from doing so, or would be required to
obtain or apply for special permission to do so, due to any
restrictions (such as embargoes) imposed on it by any governmental
authorities, including without limitation, those imposed by the
U.S. Office of Foreign Asset Control.

 

1.56 “Uncured
Supply Failure” has the meaning set out in Clause
4.7.

 

1.57 “Unit
Pricing” has the meaning set out in Clause
7.1B.

 

1.58 “Validation
Services” has the meaning set out in Clause
2.1.

 

1.59 “Vendor”
has the meaning set out in Clause 3.2B.

 

2. VALIDATION,
PROCESSING & RELATED SERVICES

 

2.1 Validation Services. Catalent
shall perform the Product qualification, validation and stability
services set out in Attachment A (the
“Validation
Services”).

 

2.2 Supply and Purchase of Product.
Catalent shall Process Product in accordance with the
Specifications, Applicable Laws and this Agreement. Except as set
forth in Clause 4.7, Palatin and its Affiliates shall purchase
[***]
from Catalent [***] of Palatin’s and its Affiliates’
requirements of Product in the Territory in accordance with this
Agreement.

 

2.3 Product Maintenance Services.
Palatin will receive the product maintenance services set out in
Attachment B (the
“Product Maintenance
Services”).

 

2.4 Other Related
Services.

 

A. Catalent shall
provide any other Product-related services as the parties may agree
in writing (the “Services”). The Services to be
performed by Catalent under this Agreement shall be detailed in
individual statements of work in the form attached hereto as
Attachment F, each
of which, upon acceptance and execution by both parties, will be
binding on both parties and incorporated into the Agreement (each a
“Statement of
Work”). In addition to a description of the Services
to be provided, each Statement of Work shall include a schedule for
completion of the Statement of Work, a fee and payment schedule,
and such other information as is necessary for Catalent to perform
the relevant Services, including any Palatin-supplied Materials
required to complete the Services and the respective
responsibilities of the parties. Catalent shall not initiate work
or incur fees or expenses chargeable to Palatin until a Statement
of Work has been fully executed.

 

B. Either party may
request a written amendment to any Statement of Work prior to the
completion of Services. Any such request shall detail the requested
changes to the applicable task, responsibility, duty, pricing, time
line or other matter and shall be promptly reviewed by the other
party. Such amendment will become effective upon the execution by
both parties. Both parties shall act in good faith and promptly
when considering an amendment requested by the other party. Without
limiting the foregoing, Palatin shall not unreasonably withhold
approval of an amendment if the proposed changes in pricing or time
lines result from, among other appropriate reasons, forces outside
the reasonable control of Catalent or changes in the assumptions
upon which the initial pricing or time lines were based. Catalent
shall not be obligated to perform any modified Services, and shall
not initiate any additional or supplemental Services, until an
amendment has been executed by the parties with respect to such
modified, additional or supplemental Services.

 

C. Each Statement of
Work, together with any associated amendments, shall constitute a
unique agreement and shall stand alone with respect to any other
Statement of Work. Each fully signed Statement of Work, together
with any associated amendments, will be subject to the terms of
this Agreement and will be incorporated herein and form part of
this Agreement.

 



 







 





 

D. Any Statement of
Work hereunder may be terminated in whole or in part [***] by
Palatin. Upon termination of a Statement of Work, neither Catalent
nor Palatin will have any further obligations under such Statement
of Work, except that:

 




(1)

Catalent will
terminate all affected Services in progress in an orderly manner as
soon as practical and in accordance with a schedule agreed to by
Palatin and as permitted by Applicable Laws, unless Palatin
specifies in the notice of termination that Services in progress
should be completed;





 




(2)

Catalent will
deliver or, at Palatin’s option and sole expense, dispose of,
any Palatin-supplied Materials in its possession or control and all
deliverables developed through the date of
termination;





 




(3)

Palatin will pay
Catalent any unpaid amounts due and owing Catalent for (i) all
Services performed up to the date of termination, (ii) all
reimbursable costs and expenses actually incurred as of the date of
termination in accordance with the Statement of Work, and (iii) all
non-cancelable commitments made in the performance of the Services,
in each case including any costs incurred to wind down and cease
any ongoing Services; and





 




(4)

with respect to any
advance payments made by Palatin for the Services in excess of
amounts payable by Palatin pursuant to Section 2.4(D)(3), Catalent
will promptly refund such amounts to Palatin for Services not
rendered.





 


E.           Notwithstanding
the foregoing, nothing in this Agreement will obligate either party
to enter into any Statement of Work under this Agreement. Unless
otherwise expressly agreed in the applicable Statement of Work, in
the event of a conflict between the terms and conditions of the
Agreement and the Statement of Work, the terms of the Agreement
shall take precedence and control.

 

3. MATERIALS,
EQUIPMENT AND AUTO INJECTOR ASSEMBLY LINES

 

3.1 Palatin-supplied
Materials.

 

A. Palatin shall
supply to Catalent for Processing, at [***]cost, all
Palatin-supplied Materials, in quantities sufficient to meet
Palatin’s requirements for Product. Palatin shall deliver DDP
(Incoterms 2010) such items and associated certificates of analysis
to the Facility no later than [***] (but not earlier than [***]
unless otherwise agreed by Catalent) before the Processing Date.
Palatin shall be responsible at its cost for securing necessary
export or import, or similar clearances, permits or certifications
required in respect of such supply. Catalent shall use
Palatin-supplied Materials solely for Processing. To the extent not
previously provided, Palatin shall provide to Catalent, prior to
delivery of any Palatin-supplied Materials, a copy of all
associated material safety data sheets, safe handling instructions,
health and environmental information, and any regulatory
certifications or authorizations that may be required under
Applicable Laws relating to the API and Product, and shall promptly
provide any updates thereto.

 

B. Within [***]
following receipt of Palatin-supplied Materials, Catalent shall
inspect such items to verify their identity. Unless otherwise
expressly required by the Specifications, Catalent shall have no
obligation to test such items to confirm that they meet the
associated specifications or certificate of analysis or otherwise;
but in the event that Catalent detects a nonconformity with
Specifications, Catalent shall give Palatin prompt notice of such
nonconformity. Catalent shall not be liable for any defects in
Palatin-supplied Materials, or in Product as a result of defective
Palatin-supplied Materials unless Catalent failed to properly
perform the foregoing obligations. Catalent shall follow
Palatin’s reasonable written instructions in respect of
return or disposal of defective Palatin-supplied
Materials.

 

C. Palatin shall
retain title to Palatin-supplied Materials at all times, and
Palatin shall bear the risk of loss thereof, except in the event of
losses related to Catalent’s gross negligence or willful
misconduct, in which case Catalent’s liability shall be
limited pursuant to Section 14 below.

 

3.2 Raw Materials.

 

A. Catalent shall
procure Raw Materials only from vendors that are approved in
writing by Palatin or otherwise qualified in accordance with the
provisions of the Quality Agreement. Catalent shall be responsible
for procuring Raw Materials as necessary to meet the Firm
Commitment. Catalent shall not be liable for any delay in delivery
of Product if (i) Catalent is unable to obtain, in a timely manner,
a particular Raw Material necessary for Processing and (ii)
Catalent placed orders for such Raw Materials promptly following
receipt of Palatin’s Firm Commitment. In the event that any
Raw Material becomes subject to purchase lead time beyond the Firm
Commitment time frame, the parties will negotiate in good faith an
appropriate amendment to this Agreement, including Clause
4.2.

 



 







 





 

B. In certain
instances, Palatin may require a specific supplier, manufacturer or
vendor (“Vendor”) to be used for Raw
Material. In such an event, (i) such Vendor will be identified in
the Specifications and (ii) the Raw Materials from such Vendor
shall be deemed Palatin-supplied Materials for purposes of this
Agreement. If the cost of the Raw Material from any such Vendor
(other than a Vendor specified in the Specifications as of the
Effective Date) is greater than Catalent’s costs for the same
raw material of equal quality from other vendors, Catalent shall
add the difference between Catalent’s cost of the Raw
Material and the Vendor’s cost of the Raw Material to the
Unit Pricing. Palatin will be responsible for all reasonable,
out-of-pocket costs incurred by Catalent associated with
qualification of any such Vendor who has not been previously
qualified by Catalent.

 

C. In the event of (i)
a Specification change for any reason, (ii) obsolescence of any Raw
Material or (iii) termination or expiry of this Agreement, Palatin
shall bear the cost of any unused Raw Materials (including
packaging), so long as Catalent (a) purchased such Raw Materials in
quantities consistent with Palatin’s then current Firm
Commitment and any minimum purchase obligations required by the
vendor and (b) used commercially reasonable efforts to mitigate
such costs by using any such unused Raw Materials in the
manufacture of other products.

 

3.3 Artwork and Labeling. Palatin
shall provide, or approve prior to Catalent’s procurement of
applicable Raw Material, all artwork, advertising and labeling
information necessary for Processing, if any. Such artwork,
advertising and labeling information is and shall remain the
exclusive property of Palatin, and Palatin shall be solely
responsible for the content thereof. Such artwork, advertising and
labeling information or any reproduction thereof may not be used by
Catalent, during or after the Term, in any manner other than
performing its obligations hereunder.

 

3.4 [***].

 

3.5 Auto Injector Assembly Line.
With respect to all equipment and components of the Auto Injector
Assembly Line, notwithstanding any amounts that Palatin contributes
to the purchase of equipment and components in connection with the
establishment of such Auto Injector Assembly Line, Catalent shall
solely own all right, title and interest in and to such line, and
all equipment and components relating thereto, and shall bear the
risk of loss thereof. [***] The parties shall work together in good
faith to plan and schedule such Palatin priority access based on a
combination of Palatin’s (i) Rolling Forecasts and Firm
Commitment and (ii) Minimum Requirements for the applicable
Contract Year(s). In the event that during a Contract Year(s),
Catalent uses the Auto Injector Assembly Line for another Catalent
customer in keeping with the priority access requirements set forth
in this Clause 3.5, then [***] .

 

4. MINIMUM
REQUIREMENT, FORECASTS & PURCHASE ORDERS

 

4.1 Minimum Requirement. During
each Contract Year, Palatin (or its Affiliates or licensees) shall
purchase the minimum number of units of Product set out on
Attachment D
(“Minimum
Requirement”). If during any Contract Year Palatin
purchases a number of units of Product that is less than the
Minimum Requirement (the difference, a “Purchase Shortfall”), then within
[***] after the end of such Contract Year, Palatin shall pay
Catalent an amount equal to [***].

 

4.2 Forecast. On or before [***],
and thereafter on a [***], Palatin shall furnish to Catalent a
written [***] rolling forecast of the quantities of Product that
Palatin intends to order from Catalent during such period
(“Rolling
Forecast”); provided that to the extent feasible at
least [***] of the total number of units purchased in the relevant
Contract Year shall be purchased in each of the first and second
six months of such relevant Contract Year. The [***] of such
Rolling Forecast shall constitute a binding commitment to purchase
the quantities of Product specified therein (“Firm Commitment”) and [***] of the
Rolling Forecast shall be non-binding, good faith
estimates.

 

4.3 Purchase Orders.

 

A. Concurrently with
the submission of each Rolling Forecast, Palatin shall submit to
Catalent a binding, non-cancelable purchase order for Product,
specifying the Batch size (to the extent the Specifications permit
Batches of different sizes) and the requested delivery date for
each Batch (“Purchase
Order”); provided, that each Purchase Order
shall be for not less than the Firm Commitment (but only to the
extent the Firm Commitment was not covered in a previous Purchase
Order). Purchase Orders for quantities of Product in excess of the
Firm Commitment shall be submitted by Palatin at least [***] in
advance of the delivery date requested in the Purchase
Order.

 



 







 





 

B. Within [***] after
receipt of a Purchase Order, Catalent shall issue a written
acknowledgement (“Acknowledgement”) that it accepts
or rejects such Purchase Order. Each acceptance Acknowledgement
shall either confirm the delivery date set out in the Purchase
Order or provide a reasonable alternative delivery date (which, in
any event, shall be [***] ), and shall include the Processing Date.
Catalent may reject any Purchase Order in excess of the Firm
Commitment or otherwise not given in accordance with this
Agreement; provided,
however, that Catalent
shall use its commercially reasonable efforts to supply Palatin
with quantities of Product which are up to [***] in excess of the
quantities specified in the Firm Commitment, subject to
Catalent’s other supply commitments and manufacturing,
packaging and equipment capacity. A properly submitted Purchase
Order shall be deemed [***] within [***] after receipt of such
Purchase Order.

 

C. In the event of a
conflict between the terms of any Purchase Order or Acknowledgement
and this Agreement, the terms of this Agreement shall control
unless the terms of the Purchase Order expressly override the terms
set forth herein.

 

4.4 Catalent’s Cancellation of
Purchase Orders. Notwithstanding Clause 4.5, Catalent
reserves the right to cancel all, or any part of, a Purchase Order
upon written notice to Palatin, and Catalent shall have no further
obligations or liability with respect to such Purchase Order, if
Palatin refuses or fails to timely supply conforming
Palatin-supplied Materials in accordance with Clause 3.1 and such
failure is not cured within [***] after the giving of written
notice of such failure. Any such cancellation of Purchase Orders
shall not constitute a breach of this Agreement by Catalent nor
shall it absolve Palatin of its obligation in respect of the
Minimum Requirement.

 

4.5 Palatin’s Modification or
Cancellation of Purchase Orders.

 

A. Palatin may modify
the delivery date or quantity of Product in a Purchase Order only
by submitting a written change order to Catalent at least [***] in
advance of the earliest Processing Date covered by such change
order. To the extent the change order modifies the delivery date or
modifies the quantity of Product in a Purchase Order, such change
order shall be effective and binding against Catalent only upon the
written approval of Catalent, and notwithstanding the foregoing,
Palatin shall remain responsible for the Firm
Commitment.

 

B. Changes to or
postponement of any Batch of Product by Palatin will not reduce or
in any way affect Palatin’s Minimum Requirement obligations
set out in Clause 4.1.

 

4.6 Unplanned Delay or Elimination of
Processing. Catalent shall use commercially reasonable
efforts to meet the Purchase Orders, subject to the terms and
conditions of this Agreement. Catalent shall provide Palatin with
as much advance notice as practicable, and shall provide at least
[***]advance notice where possible, if Catalent determines that any
Processing will be delayed or eliminated for any
reason.

 

4.7 Supply Failure. For purposes of
this Agreement, a “Supply
Failure” shall mean a failure by Catalent to supply
Product meeting the Specifications, subject to Clauses 5.2, 5.3 and
5.4, in the quantities ordered by Palatin (subject to the
limitations and terms set forth in Clauses 4.3 and 4.4) for
[***] , where such failure is [***] . In the event of [***] (such
event, an “Uncured Supply
Failure”), Palatin shall have the right [***] . In the
event of such Uncured Supply Failure, [***] , the parties shall
meet to discuss in good faith how to equitably manage any Minimum
Requirement for the then current Contract Year, [***]
..

 

4.8 Observation of Processing. In
addition to Palatin’s audit right pursuant to Clause 9.4,
Palatin may send [***] Representatives to the Facility to observe
Processing for a maximum of [***] (unless otherwise agreed by
Catalent in writing), upon at least [***] prior notice, at
reasonable times during regular business hours. Such Palatin
Representatives shall abide by all Catalent safety rules and other
applicable policies and procedures, and Palatin shall be
responsible for such compliance. Palatin shall defend, indemnify
and hold harmless Catalent for any action, omission or other
activity of such Palatin Representatives while on Catalent’s
premises. Palatin’s Representatives shall be required to sign
Catalent’s standard visitor confidentiality agreement prior
to being allowed access to the Facility.

 

5. TESTING;
SAMPLES; RELEASE

 



 







 





 

5.1 Batch Records and Data;
Release.

 

A. Subject to Clause
5.1B, unless otherwise agreed to by the parties in writing, within
[***] after Catalent completes Processing of a Batch, Catalent
shall provide Palatin with copies of executed Batch records
prepared in accordance with the Specifications; provided, that if testing reveals an
out-of-Specification result, Catalent shall provide such Batch
records within [***] after resolution of the out-of-Specification
result. After Catalent completes Processing of a Batch, Catalent
shall also provide Palatin or its designee with a certificate of
analysis for such Batch. Issuance of a certificate of
conformance/analysis constitutes release of the Batch by Catalent
to Palatin. Palatin shall be responsible for final release of
Product (including testing), at its cost, to the
market.

 

B. If testing reveals
an out-of-Specification result with respect to a Batch, Catalent
shall report such result to Palatin as soon as practicable, and in
any event within [***] after obtaining such result. Within [***]
after resolution of the out-of-Specification result, Catalent shall
provide Palatin a written report detailing the cause of such
out-of-Specification result and the manner in which it was
resolved. Catalent shall provide Palatin with such further
information as Palatin reasonably requests with respect to such
out-of-Specification result.

 

5.2 Testing; Rejection. Following
Palatin’s receipt of a shipment of a Batch, Palatin or
Palatin’s designee may test samples of such Batch to confirm
that the Specifications have been met. Unless within [***] after
Palatin’s receipt of a Batch (“Review Period”), Palatin or its
designee notifies Catalent in writing (an “Exception Notice”) that such Batch
is not in compliance with Clause 12.1A (“Defective Product”), and provides
a sample of the alleged Defective Product, the Batch shall be
deemed accepted by Palatin and Palatin shall have no right to
reject such Batch. Upon timely receipt of an Exception Notice from
Palatin, Catalent shall in its sole discretion conduct an
appropriate investigation to determine whether or not it agrees
with Palatin that Product is Defective Product and to determine the
cause of any nonconformity. If Catalent agrees that Product is
Defective Product and determines that the cause of nonconformity is
attributable to Catalent’s negligence or willful misconduct
(“Catalent Defective
Processing”), then Clause 5.4 shall
apply.

 

5.3 Discrepant Results. If the
parties disagree as to whether Product is Defective Product and/or
whether the cause of the nonconformity is Catalent Defective
Processing, without regard to whether Catalent conducts an
appropriate investigation as provided in Clause 5.2, and this is
not resolved within [***] of the Exception Notice date, the parties
shall cause a mutually acceptable independent third party to review
records, test data and to perform comparative tests and/or analyses
on samples of the alleged Defective Product and its components,
including Palatin-supplied Materials. The independent party’s
results as to whether or not Product is Defective Product and the
cause of any nonconformity shall be final and binding. Unless
otherwise agreed to by the parties in writing, the costs associated
with such testing and review shall be borne by Catalent if Product
is Defective Product attributable to Catalent Defective Processing,
and by Palatin in all other circumstances. For avoidance of doubt,
where the cause of nonconformity cannot be determined or assigned,
it shall be deemed not Catalent Defective Processing.

 

5.4 Defective Processing. Catalent
shall, [***] either (A) [***] or (B) [***] . This shall be
Palatin’s sole and exclusive remedy under this Agreement for
Defective Product attributable to Catalent Defective Processing,
other than as provided in Clause 4.7, 9.5 and 13.1 of this
Agreement.

 

6. DELIVERY

 

6.1 Delivery. Catalent shall
deliver Product Ex Works (Incoterms 2010) the Facility promptly
following Catalent’s release of Product. Catalent shall
segregate and store all Product until tender of delivery. Title to
Product shall transfer to Palatin upon Catalent’s tender of
delivery. Palatin shall qualify or validate at least three carriers
to ship Product and then designate the priority of such qualified
carriers to Catalent, and Catalent shall not, without
Palatin’s prior written consent, utilize any other carrier
for purposes of delivering Product to Palatin or its designees.
Catalent shall include with each shipment of Product the applicable
Purchase Order number, the Batch number and the quantity of
Product.

 

6.2 Storage Fees. If Catalent
performs in accordance with the Purchase Order, and Palatin fails
to take delivery of any Product on any agreed delivery date,
Catalent shall store such Product and Palatin shall be invoiced on
the first day of each month following such scheduled delivery for
reasonable storage costs. All such storage shall be under
conditions set forth in the Specifications. For each such Batch of
stored Product, risk of loss shall transfer to Palatin upon
placement into storage and Catalent shall have the right to ship
such Product to Palatin within two months after
billing.

 



 







 





 

6.3 Bill and Hold. From time to
time, at Palatin’s request, the agreed delivery date of the
Purchase Order may be extended under a bill and hold arrangement as
more fully set forth below. For each such Batch of stored Product,
Palatin agrees that: (A) Palatin has made a fixed commitment to
purchase the Product, (B) risk of loss for such Product passes to
Palatin upon placement into storage, (C) such Product shall be on a
bill and hold basis for legitimate business purposes, (D) Palatin
shall identify a fixed delivery date for the Product and (E)
Palatin shall agree to be invoiced and to pay such invoice in
accordance with the payment terms set forth in Clause 7.3 of this
Agreement. Upon making a request for a bill and hold arrangement,
Palatin shall provide Catalent with a letter confirming items (A)
through (E) of this Clause 6.3 for each Batch of stored
Product.

 

7. PAYMENTS;
LICENSING; CHANGE OF CONTROL

 




7.1

Fees. In consideration for
Catalent performing services hereunder:





 

A. Palatin shall pay
to Catalent the fees for Validation Services set out on
Attachment A.
Catalent shall submit an invoice to Palatin for such fees upon the
completion of the relevant phase of the Validation
Services.

 

B. Palatin shall pay
Catalent the unit pricing for Product set out on Attachment D
(“Unit
Pricing”). Catalent shall submit an invoice to Palatin
for such fees upon tender of delivery of Product as provided in
Clause 6.1.

 

C. Except as provided
in Clause 3.5, Palatin shall pay Catalent the annual fees for
Product Maintenance Services set out on Attachment D (the
“Annual Product Maintenance
Fee”). Catalent shall submit an invoice to Palatin for
such Annual Product Maintenance Fee payable upon [***] and upon
each anniversary of such date thereafter during the
Term.

 

D. Other Fees. Palatin shall pay
Catalent for all other fees and expenses of Catalent owing in
accordance with the terms of this Agreement, including pursuant to
Clauses 2.4, 4.1, 6.2, 9.2.1 and 16.4. Catalent shall submit an
invoice to Palatin for such fees as and when appropriate. All such
invoices shall contain sufficient detail and appropriate
itemization of fees and expenses (with copies of supporting
documentation for expenses provided upon written request), and
shall reference the applicable Palatin purchase order number.
Catalent shall remit all invoices to the following
address:

 


By
Mail:


Palatin
Technologies, Inc.


4-B
Cedar Brook Drive


Cranbury, New
Jersey 08512 USA


Attn: 
Accounts Payable


 


By electronic
mail:


accountspayable@palatin.com


 

7.2 Unit Pricing Adjustment. From
and after [***] , the Unit Pricing shall be adjusted [***] ,
effective as of [***] . Catalent shall give Palatin written notice
of such adjustment by [***] . The written notice shall specify the
basis for each adjustment in the Price, including increases or
decreases in the cost of Raw Materials, continuous improvement
benefits and any increase or decrease of any other component of
Unit Pricing. The amount of any increase in the cost of components
of Unit Pricing other than Raw Materials shall not exceed [***] .
The cost of Raw Materials shall be passed through to Palatin [***]
.. To manage the cost of Raw Materials, Palatin, at its option, may
negotiate the terms of a supply agreement with any supplier of Raw
Materials, including but not limited to [***] with respect to the
supply of [***] .

 

7.3 Payment Terms. Payment of all
Catalent invoices shall be due [***] after the later of (A) the
date of the invoice and (B) the date of delivery. Palatin shall
make payment in euros. Unless an invoice is disputed by Palatin in
good faith, if any payment is not received by Catalent by its due
date, then Catalent may charge interest on the outstanding sum from
the due date (both before and after any judgment) at [***] per
month until paid in full (or, if less, the maximum amount permitted
by Applicable Laws). Further, if Palatin shall fail to make any
payment when due other than for an invoice disputed by Palatin in
good faith, and shall not have cured such non-payment within [***]
after receiving from Catalent written notice of non-payment, then
Catalent shall have the right, at its option, to suspend any
further performance hereunder until such default is corrected,
without thereby releasing Palatin from its obligations under this
Agreement.

 



 







 





 

7.4 Taxes. All taxes, duties and
other levies assessed (excluding tax based on net income) on or in
connection with Palatin-supplied Materials, services or Product in
connection with provision or sale to Catalent or Palatin, shall be
reimbursed by Palatin to Catalent (and shall be included in
invoices) and all charges are exclusive of any applicable taxes,
duties and levies which shall be added to invoices directed at
Palatin.

 

7.5 Palatin
and Third Party Expenses. Except as may be expressly covered
by Product Maintenance Service fees, Palatin shall be responsible for 100% of its own
and all third-party expenses associated with the development,
Regulatory Approvals and commercialization of Product, including
regulatory filings and post-approval marketing
studies.

 

8. CHANGES
TO SPECIFICATIONS

 


All
Specifications and any changes thereto agreed to by the parties
from time to time shall be in writing, dated and signed by the
parties. Any change to the Process shall be deemed a Specification
change. No change in the Specifications shall be implemented by
Catalent, whether requested by Palatin or requested or required by
any Regulatory Authority, until the parties have agreed in writing
to such change, the implementation date of such change, and any
increase or decrease in costs, expenses or fees directly resulting
from such change (including any change to Unit Pricing). Catalent
shall respond promptly to any request made by Palatin for a change
in the Specifications, and both parties shall use commercially
reasonable, good faith efforts to agree to the terms of such change
in a timely manner. As soon as reasonably practicable after a
request is made for any change in Specifications, Catalent shall
notify Palatin of the costs associated with such change and shall
provide such supporting documentation as Palatin may reasonably
require. Palatin shall pay all direct costs associated with such
agreed upon changes. If there is a conflict between the terms of
this Agreement and the terms of the Specifications, this Agreement
shall control unless the parties mutually agree that the terms of
the Specifications expressly override the terms set forth herein.
Catalent reserves the right to postpone effecting changes to the
Specifications until such time as the parties agree to and execute
the required written amendment.

 

9. RECORDS;
REGULATORY MATTERS

 

9.1 Record Keeping. Catalent shall
maintain materially complete and accurate Batch, laboratory data,
reports and other technical records relating to Processing in
accordance with Catalent standard operating procedures and all
Applicable Laws. Such information shall be maintained for a period
of at least [***] from the relevant finished Product expiry date or
longer if required under Applicable Laws or the Quality
Agreement.

 

9.2 Regulatory Compliance. Catalent
shall obtain and maintain all permits and licences with respect to
general Facility operations required by any Regulatory Authority in
the jurisdiction in which Catalent Processes Product. Palatin shall
obtain and maintain all other Regulatory Approvals and other
authorizations and certificates, including those necessary for
Catalent to commence Processing. During the Term, Catalent will
assist Palatin with all regulatory matters relating to Processing,
at Palatin’s request and sole expense. Catalent reserves the
right to assess Palatin for any regulatory fees that may be
established by any Regulatory Authority subsequent to the Effective
Date of this Agreement, which fees result directly from
Catalent’s formulation, development, manufacturing,
processing, filing, packaging, storing or testing of the Product or
Palatin-supplied Materials. Except as required under Applicable
Laws or by any governmental agency, Palatin shall not identify
Catalent in any regulatory filing or submission without
Catalent’s prior written consent. Such consent shall not be
unreasonably withheld and shall be memorialized in a writing signed
by authorized representatives of both parties. Upon
Catalent’s written request, Palatin shall provide Catalent
with a copy of any Regulatory Approvals required to distribute,
market and sell Product in one or more countries within the
Territory. If Palatin is unable to provide such information,
Catalent shall have no obligation to deliver Product to Palatin,
notwithstanding anything to the contrary in this Agreement. The
parties intend and commit to cooperate to allow each party to
satisfy its obligations under Applicable Laws relating to
Processing under this Agreement.

 

9.2.1 GDUFA Fees. Palatin shall
reimburse Catalent for any fees Catalent may be required to pay
pursuant to the US Generic Drug User Fee Amendments of 2012
("GDUFA Fees"), [***] .
GDUFA Fees are assessed on Catalent when an Abbreviated New Drug
Application ("ANDA")
applicant identifies Catalent in an ANDA application filed with
FDA. GDUFA Fees are assessed by the FDA annually and shall be paid
by Palatin annually, where applicable. Prior to October 1st of each
year, and where applicable, Catalent will invoice Palatin for [***]
the annual GDUFA Fees Catalent incurs for each Catalent
manufacturing or packaging facility identified in any Palatin
ANDA(s) pursuant to FDA regulations (this includes but is not
limited to any Catalent facility which manufactured or packaged
Palatin's registration batches).

 



 







 





 

9.3 Governmental Inspections and
Requests. Catalent shall promptly advise Palatin if an
authorized agent of any Regulatory Authority (A) notifies Catalent
that it intends to or does visit the Facility for the purpose of
reviewing the Processing or (B) takes any regulatory action with
respect to the Product or the Processing. Catalent shall promptly
provide to Palatin a report of the result of any such inspection by
any Regulatory Authority to the extent directly related to the
Processing of the Product and furnish to Palatin a copy of all
written information provided by such Regulatory Authority to the
extent specifically and directly related to the Processing of the
Product, if any, within 10 days of Catalent’s receipt of such
information, in each case redacted as appropriate to protect any
Confidential Information of Catalent and/or confidential
information Catalent’s other customers. Palatin acknowledges
that it may not direct the manner in which Catalent fulfills its
obligations to permit inspection by and to communicate with
Regulatory Authorities. Notwithstanding the foregoing, Catalent
shall not initiate or participate in any communications with any
Regulatory Authority concerning the Product or the Processing
thereof without prior consultation with Palatin, unless Catalent
(i) reasonably believes it is required by Applicable Law to
make the communication under conditions that make such prior
consultation impossible or impractical, in which case Catalent
shall promptly thereafter notify Palatin in writing of the nature
and content of the communication, or (ii) is requested to do so by
Palatin. If any inspection by Regulatory Authorities is related to
the Processing of the Product, Palatin shall reimburse Catalent for
all reasonable and documented costs associated with such inspection
attributable to the Processing of the Product. If deficiencies are
identified in connection with any inspection by Regulatory
Authorities related to or otherwise affecting the Processing of the
Product, Catalent shall use commercially reasonable efforts to
correct all such deficiencies in a timely manner. Catalent shall
advise Palatin periodically of progress being made with respect to
such deficiencies and notify Palatin, in writing, upon completion
of any corrective action taken.

 

9.4 Palatin Facility Audits. During
the Term, Palatin’s Representatives shall be granted access
upon [***] prior notice, at reasonable times during regular
business hours, to (A) the portion of the Facilities where Catalent
performs Processing, (B) relevant personnel involved in Processing
and (C) Processing records described in Clause 9.1, in each case
solely for the purpose of verifying that Catalent is Processing in
accordance with cGMPs, the Specifications and the Product master
Batch records. Palatin may not conduct an audit under this Clause
9.4 more than [***] ; provided, that additional inspections may be
conducted in the event there is a material quality or compliance
issue concerning Product or its Processing. Palatin’s Quality
Assurance Manager will arrange Palatin audits with Catalent Quality
Management. Audits shall be designed to minimize, to the extent
reasonably possible, disruption of operations at the applicable
Facility. Palatin’s Representatives shall be required to sign
Catalent’s standard visitor confidentiality agreement prior
to being allowed access to the Facility. Such Representatives shall
comply with the Facility’s rules and regulations. Palatin
shall defend, indemnify and hold harmless Catalent for any action
or activity of such Representatives while on Catalent’s
premises.

 

9.5 Recall. If Catalent believes a
recall, field alert, Product withdrawal or field correction
(“Recall”) may
be necessary with respect to any Product supplied under this
Agreement, Catalent shall promptly notify Palatin. Catalent will
not act to initiate a Recall without the express prior written
approval of Palatin, unless otherwise required by Applicable Laws.
If Palatin believes a Recall may be necessary with respect to any
Product supplied under this Agreement, Palatin shall promptly
notify Catalent and Catalent shall provide all necessary
cooperation and assistance to Palatin. Palatin shall provide
Catalent with an advance copy of any proposed submission to a
Regulatory Authority in respect of any Recall, and shall consider
in good faith any comments from Catalent. The cost of any Recall
shall be borne by Palatin, and Palatin shall reimburse Catalent for
expenses incurred in connection with any Recall, in each case
unless such Recall is caused solely by Catalent’s breach of
its obligations under this Agreement with respect to Processing,
violation of Applicable Laws or its negligence or willful
misconduct, then such cost shall be borne by Catalent; provided, however, that for purposes hereof, such
Catalent cost shall be limited to reasonable, actual and documented
administrative costs incurred by Palatin (or its Affiliates,
licensees or distributors) for such Recall and, subject to Section
14, replacement of the Product subject to Recall in accordance with
Section 5.

 

9.6 Quality Agreement. Within six
months after the Effective Date, and in any event prior to the
first Processing of Product hereunder, the parties shall negotiate
in good faith and enter into a quality or technical agreement (the
“Quality
Agreement”). The Quality Agreement shall in no way
determine liability or financial responsibility of the parties for
the responsibilities set out therein. In the event of a conflict
between any of the provisions of this Agreement and the Quality
Agreement with respect to quality-related activities, including
compliance with cGMP, the provisions of the Quality Agreement shall
govern. In the event of a conflict between any of the provisions of
this Agreement and the Quality Agreement with respect to any
commercial matters, including allocation of risk, liability and
financial responsibility, the provisions of this Agreement shall
govern.

 

9.7 Quality Assurance/Quality Control
Standards. Upon Palatin’s written request, Catalent
shall deliver to Palatin copies of Catalent’s quality
assurance/quality control investigations, deviations,
out-of-Specification notifications and change controls relevant to
the Processing of Product. Catalent shall notify Palatin of any
material changes made to any of the foregoing or any Specifications
during the Term.

 



 







 





 

10. CONFIDENTIALITY
AND NON-USE

 

10.1 Definition.
As used in this Agreement, the term “Confidential Information” includes
all information furnished by or on behalf of Catalent or Palatin
(the “Discloser”), its Affiliates or any
of its or their respective Representatives, to the other party (the
“Recipient”),
its Affiliates or any of its or their respective Representatives,
whether furnished before, on or after the Effective Date and
furnished in any form, including written, verbal, visual,
electronic or in any other media or manner and information acquired
by observation or otherwise during any site visit at the other
party’s facility. Confidential Information includes all
proprietary technologies, know-how, trade secrets, discoveries,
inventions and any other intellectual property (whether or not
patented), analyses, compilations, business or technical
information and other materials prepared by either party, their
respective Affiliates, or any of its or their respective
Representatives, containing or based in whole or in part on any
information furnished by the Discloser, its Affiliates or any of
its or their respective Representatives. Confidential Information
also includes the existence of this Agreement and its
terms.

 

10.2 Exclusions.
Notwithstanding Clause 10.1, Confidential Information does not
include information that (A) is or becomes generally available to
the public or within the industry to which such information relates
other than as a result of a breach of this Agreement, (B) is
already known by the Recipient at the time of disclosure as
evidenced by the Recipient’s written records, (C) becomes
available to the Recipient on a non-confidential basis from a
source that is entitled to disclose it on a non-confidential basis
or (D) was or is independently developed by or for the Recipient
without reference to the Confidential Information of the Discloser
as evidenced by the Recipient’s written records.

 

10.3 Mutual
Obligation. The Recipient agrees that it will not use the
Discloser’s Confidential Information except in connection
with the performance of its obligations hereunder and will not
disclose, without the prior written consent of the Discloser,
Confidential Information of the Discloser to any third party,
except that the Recipient may disclose the Discloser’s
Confidential Information to any of its Affiliates and its or their
respective Representatives that (A) need to know such Confidential
Information for the purpose of performing under this Agreement, (B)
are advised of the contents of this Clause and (C) are bound to the
Recipient by obligations of confidentiality at least as restrictive
as the terms of this Clause. Each party shall be responsible for
any breach of this Clause by its Affiliates or any of its or their
respective Representatives.

 

10.4 Permitted
Disclosure. The Recipient may disclose the Discloser’s
Confidential Information to the extent required under Applicable
Laws or by the rules of any stock exchange on which the securities
of the Discloser are listed in each case upon the reasonable advice
of Recipient’s legal counsel; provided, that prior to making any such
legally required disclosure, the Recipient shall give the Discloser
as much prior notice of the requirement for and contents of such
disclosure as is practicable under the circumstances and use
reasonable efforts to limit the scope of any such disclosure and to
obtain confidential treatment of all Confidential Information
disclosed pursuant to such requirement. Any such disclosure,
however, shall not relieve the Recipient of its confidentiality
obligations as set forth in this Section 10.

 

10.5 Disclosure
of this Agreement. A public disclosure of this Agreement or
the Manufacturing Preparation and Services Agreement is permitted
if, upon the reasonable advice of legal counsel of the party making
the public disclosure, it is required by law (a "Required Disclosure"), including without
limitation in a filing with the US Securities and Exchange
Commission or the NYSE MKT, provided that the party making the
public disclosure shall provide copies of the Required Disclosure
to the non-disclosing party reasonably in advance of such filing or
other disclosure for the non-disclosing party's review and comment
(but not approval). Each party shall consider in good faith any
comments provided by the other party with respect to the content of
the Required Disclosure, including with respect to the redaction of
this Agreement and any other agreement that is to be filed or
otherwise publicly disclosed in connection with the Required
Disclosure, and shall incorporate such comments or redactions in
the Required Disclosure if doing so does not interfere with the
disclosing party's ability to comply with any requirements under
applicable law or any request or requirement of the US Securities
and Exchange Commission or the NYSE MKT.

 

10.6 No
Implied License. Except as expressly set out in Clause 10.1,
the Recipient will obtain no right of any kind or license under any
Confidential Information of the Discloser, including any patent
application or patent, by reason of this Agreement. All
Confidential Information will remain the sole property of the
Discloser, subject to Section 11.

 

10.7 Return
of Confidential Information. Upon expiry or termination of
this Agreement, the Recipient will (and will cause its Affiliates
and its and their respective Representatives to) cease its use and,
upon written request, within [***] either return or destroy (and
certify as to such destruction) all Confidential Information of the
Discloser, including any copies thereof, except for a single copy
which may be retained for the sole purpose of ascertaining
compliance with its obligations under this Agreement and any copies
remaining on the Recipient’s standard computer back-up
devices.

 

10.8 Survival.
The obligations of confidentiality and non-use contained in this
Section 10 will terminate [***] after the expiry or termination of
this Agreement, except with respect to trade secrets, for which the
obligations of confidentiality and non-use contained in this
Section 10 will continue for so long as such information remains a
trade secret under applicable law.

 



 







 





 

11. INTELLECTUAL
PROPERTY

 


For
purposes hereof, “Palatin
IP” means all intellectual property and embodiments
thereof owned by or licensed to Palatin as of the Effective Date or
developed by Palatin other than in connection with this Agreement;
“Catalent IP”
means all intellectual property and embodiments thereof owned by or
licensed to Catalent as of the Effective Date or developed by
Catalent other than in connection with this Agreement;
“Invention”
means any intellectual property developed by either party or
jointly by the parties in connection with this Agreement; [***] .
The parties shall cooperate to achieve the allocation of rights to
Inventions anticipated herein and each party shall be solely
responsible for costs associated with the protection of its
intellectual property.

 

12. REPRESENTATIONS
AND WARRANTIES

 

12.1 Catalent.
Catalent represents, warrants and undertakes to Palatin
that:

 

A. at the time of
delivery by Catalent as provided in Clause 6.1, all Product shall
have been Processed in accordance with Applicable Laws and in
conformance with the Specifications and the Quality Agreement and
will not be adulterated, misbranded or mislabeled within the
meaning of Applicable Laws; provided, that Catalent shall not be
liable for defects attributable to Palatin-supplied Materials
(including artwork, advertising and labeling);

 

B. Catalent will
comply with all Applicable Laws applicable to Catalent’s
performance under this Agreement and its use of any
Palatin-supplied Materials;

 

C. To Catalent’s
knowledge, there are no patents owned by others, or trade secrets
or other proprietary rights of others, that would be infringed by
the Catalent IP in Catalent’s performance of the
Agreement;

 

D. Catalent and its
employees, affiliates, contractors, and agents have never been (i)
debarred or (ii) convicted of a crime for which a person can be
debarred, under Section 335(a) or 335(b) of the Federal Food, Drug,
and Cosmetic Act; and

 

E. Catalent will not
release any Batch of Product if the required certificates of
conformance indicate that Product does not comply with the
Specifications.

 

12.2 Palatin.
Palatin represents, warrants and undertakes to Catalent
that:

 

A. all
Palatin-supplied Materials shall have been produced in accordance
with Applicable Laws, shall comply with all applicable
specifications, including the Specifications, shall not be
adulterated, misbranded or mislabeled within the meaning of
Applicable Laws, and shall have been provided in accordance with
the terms and conditions of this Agreement;

 

B. the content of all
artwork provided to Catalent shall comply with all Applicable
Laws;

 

C. all Product
delivered to Palatin by Catalent will be held, used and disposed of
by or on behalf of Palatin in accordance with all Applicable Laws,
and Palatin will otherwise comply with all laws, rules, regulations
and guidelines applicable to Palatin’s performance under this
Agreement;

 

D. Palatin will not
release any Batch of Product if the required certificates of
conformance indicate that Product does not comply with the
Specifications and if Palatin does not hold all necessary
Regulatory Approvals to market and sell the Product;

 

E. Palatin has all
necessary authority to use and to permit Catalent to use pursuant
to this Agreement all intellectual property related to Product or
Palatin-supplied Materials (including artwork), and the Processing
of the foregoing, including any copyrights, trademarks, trade
secrets, patents, inventions and developments; to Palatin’s
knowledge, there are no patents owned by others related to the
Palatin IP utilized with the Product that would be infringed or
misused by Palatin’s performance of the Agreement; and, to
Palatin’s knowledge, no trade secrets or other proprietary
rights of others related to the Palatin IP utilized with the
Product would be infringed or misused by Palatin’s
performance of this Agreement; and

 



 







 





 

F. to Palatin’s
knowledge, the work to be performed by Catalent under this
Agreement will not violate or infringe upon any trademark,
tradename, copyright, patent, trade secret, or other intellectual
property or other right held by any person or entity.

 

12.3 Mutual:
No transactions or dealings under this Agreement shall be conducted
with or for an individual or entity that is designated as the
target of any sanctions, restrictions or embargoes administered by
the United Nations, European Union, United Kingdom, or the United
States.

 

12.4 Limitations.
Save as expressly set out in this Agreement, neither party gives
any representation or warranty in respect of the subject matter of
this Agreement, and all representations and warranties that may be
implied (by statute or otherwise) are hereby excluded to the
maximum extent permitted by law.

 

13. INDEMNIFICATION

 

13.1 Indemnification
by Catalent. Catalent shall defend, indemnify and hold
harmless Palatin, its Affiliates, and their respective directors,
officers and employees (“Palatin Indemnitees”) from and
against any and all claims, losses, demands, liabilities, damages,
costs and expenses (including reasonable attorneys’ fees and
reasonable investigative costs) in connection with any claim or
action by any third party (“Losses”) arising out of or
resulting from (A) any breach of its representations, warranties or
obligations set out in this Agreement, (B) any negligence or
willful misconduct by Catalent or (C) any actual or alleged
infringement or violation of any patent, trade secret, copyright,
trademark or other proprietary rights of a third party by the
Catalent IP used in Catalent’s performance of its obligations
under this Agreement, but for the avoidance of doubt not with
respect to any such infringement or violation due to Palatin IP,
API Inventions or Palatin-supplied Materials; in each case except
to the extent that any of the foregoing arises out of or results
from any Palatin Indemnitee’s negligence, willful misconduct
or breach of this Agreement.

 

13.2 Indemnification
by Palatin. Palatin shall defend, indemnify and hold
harmless Catalent, its Affiliates, and their respective directors,
officers and employees (“Catalent Indemnitees”) from and
against any and all Losses arising out of or resulting from (A) any
breach of its representations, warranties or obligations set out in
this Agreement, (B) any manufacture, packaging, sale, promotion,
distribution or use of or exposure to Product or Palatin-supplied
Materials, including product liability or strict liability, (C)
Palatin’s exercise of control over the Processing, to the
extent that Palatin’s instructions or directions violate
Applicable Laws, (D) the conduct of any clinical trials utilizing
Product or API, (E) any actual or alleged infringement or violation
of any third party patent, trade secret, copyright, trademark or
other proprietary rights by intellectual property or other
information provided by Palatin, including Palatin-supplied
Materials, or (F) any negligence or willful misconduct by Palatin;
in each case except to the extent that any of the foregoing arises
out of or results from any Catalent Indemnitee’s negligence,
willful misconduct or breach of this Agreement.

 

13.3 Indemnification
Procedures. All indemnification obligations in this
Agreement are conditioned upon the indemnified party (A) promptly
notifying the indemnifying party of any claim or liability of which
the indemnified party becomes aware (including a copy of any
related complaint, summons, notice or other instrument);
provided, that failure to
provide such notice within a reasonable period of time shall not
relieve the indemnifying party of any of its obligations hereunder
except to the extent the indemnifying party is prejudiced by such
failure, (B) cooperating with the indemnifying party in the defense
of any such claim or liability and any related settlement
negotiations (at the indemnifying party’s expense) and (C)
not compromising or settling any claim or liability without prior
written consent of the indemnifying party.

 

14. LIMITATIONS
OF LIABILITY

 

14.1 TOTAL
LIABILITY. CATALENT’S TOTAL LIABILITY UNDER THIS
AGREEMENT SHALL IN NO EVENT EXCEED [***] .

 

14.2 INDIRECT
DAMAGES. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY
FOR INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL LOSS
OR DAMAGES, OR FOR LOSS OF REVENUES, PROFITS OR DATA, ARISING OUT
OF PERFORMANCE UNDER THIS AGREEMENT, WHETHER IN CONTRACT OR IN TORT
OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.

 



 







 





 

15. INSURANCE

 


Each
party shall, at its own cost and expense, obtain and maintain in
full force and effect during the Term the following in US dollars
or foreign currency equivalent: (A) Commercial General Liability
Insurance with a per-occurrence limit of not less than [***] ; (B)
Products and Completed Operations Liability Insurance with a
per-occurrence limit of not less than [***] ; and (C) All Risk
Property Insurance, including transit coverage, in an amount equal
to the full replacement value of its property while in, or in
transit to, a Catalent facility as required under this Agreement.
Each party may self-insure all or any portion of the required
insurance as long as, together with its Affiliates, its US GAAP or
foreign currency equivalent net worth is greater than [***] or its
annual EBITDA (earnings before interest, taxes, depreciation and
amortization) is greater than [***] . Each required insurance
policy, other than self-insurance, shall be obtained from an
insurance carrier with an A.M. Best rating of at least A- VII. If
any of the required policies of insurance are written on a claims
made basis, such policies shall be maintained throughout the Term
and for a period of at least [***] thereafter. Each party shall
obtain a waiver of subrogation clause from its property insurance
carriers in favor of the other party, and such waivers will operate
the same whether insurance is carried through third parties or
self-insured. Upon the other party’s written request from
time to time, each party shall promptly furnish to the other party
a certificate of insurance or other evidence of the required
insurance.

 

16. TERM
AND TERMINATION

 

16.1 Term.
This Agreement shall commence on the Effective Date and shall
continue until the end of the fifth Contract Year (the
“Initial Term”),
unless earlier terminated in accordance with Clause 16.3 (the
Initial Term as may be extended in accordance with Clause 16.2, the
“Term”).

 

16.2 Renewal.
The Initial Term shall automatically be extended for one 24-month
period unless at least [***] prior to the end of the Initial Term
one party gives the other party written notice of its desire to
terminate as of the end of the Initial Term.

 

16.3 Termination.
This Agreement may be terminated:

 

A. by either party if
steps are taken by or against the other party for the appointment
of a liquidator, an administrator, a receiver, administrative
receiver, manager, interim receiver, trustee, trustee in
bankruptcy, nominee or supervisor or the other party proposes or
enters into an agreement or arrangement with its creditors
generally or makes an assignment for the benefit of its creditors
generally, or otherwise suffers or permits the taking of any steps
for adjudicating it to be bankrupt or insolvent and any such
process, if reasonably shown to be warranted, frivolous or
vexatious, is not withdrawn, dismissed or discharges within [***] ,
or any equivalent or similar action to the above in consequence of
the insolvency of that party is taken in any jurisdiction and is
not withdrawn, dismissed or discharged in the circumstances
described above;

 

B. by either party if
the other party materially breaches any of the provisions of this
Agreement and such breach is not cured within [***] after the
giving of written notice requiring the breach to be remedied;
provided, that in the case
of a failure of Palatin to make payments in accordance with the
terms of this Agreement, Catalent may terminate this Agreement if
such payment breach is not cured within [***] of receipt of notice
of non-payment from Catalent;

 

C. by Palatin pursuant
to Clause 4.7; and

 

D. by Palatin upon
notice and payment of the termination penalty provided in Clause
16.4D.

 

16.4 Effect of Termination. Expiry
or termination of this Agreement shall be without prejudice to any
rights or obligations that accrued to the benefit of either party
prior to such expiry or termination. In the event of a termination
of this Agreement:

A. Catalent shall
promptly return to Palatin, at Palatin’s expense and
direction, all remaining inventory of Product and Palatin-supplied
Materials; provided, that
all outstanding undisputed invoices have been paid in
full;

 

B. Palatin shall pay
Catalent all undisputed invoiced amounts outstanding, plus, upon
receipt of an undisputed invoice(s), amounts for any (i) Product
that has been shipped pursuant to Purchase Orders but not yet
invoiced, (ii) Product Processed pursuant to Purchase Orders that
has been completed but not yet shipped, and (iii) in the event that
this Agreement is terminated for any reason other than by Palatin
pursuant to Clause 16.3A, 16.3B or 16.3C, all Product in process of
being Processed pursuant to Purchase Orders (or, alternatively,
Palatin may instruct Catalent to complete such work in process, and
the resulting completed Product shall be governed by clause (ii));
and

 



 







 





 

C. In the event that
this Agreement is terminated for any reason other than by Palatin
pursuant to Clause 16.3A, 16.3B or 16.3C, Palatin shall pay
Catalent for all out-of-pocket costs and expenses incurred, and all
noncancellable commitments made, in connection with
Catalent’s performance of this Agreement, so long as such
costs, expenses or commitments were made by Catalent consistent
with Palatin’s then current Firm Commitment and any minimum
purchase obligations required by the vendor; provided, however, that notwithstanding
the foregoing, Palatin shall have no obligation to pay Catalent for
costs, expenses or commitments made with respect to Product in
process of being Processed pursuant to Purchase Orders (it being
understood that the amounts payable pursuant to Clause 16.4B(ii)
shall fully compensate Catalent with respect to such Product in
process).

 

D. If this Agreement
is terminated by Palatin pursuant to Clause 16.3D or for any reason
other than pursuant to Clause 16.3B or 16.3C, then Palatin shall
pay Catalent a termination penalty in accordance with the following
schedule:

 


	
 

	


Date of Termination

	


Amount of Termination Penalty


	
 

	

During
Contract Year 1

	

[***]


	
 

	

During
Contract Year 2

	

[***]


	
 

	

During
Contract Year 3

	

[***]






 

16.5 Survival. The rights and
obligations of the parties shall continue under Sections 11
(Intellectual Property), 13 (Indemnification), 14 (Limitations of
Liability), 17 (Notice), 18 (Miscellaneous); under Clauses 10
(Confidentiality and Non-Use) and 15 (Insurance), in each case to
the extent expressly stated therein; and under Clauses 7.3 (Payment
Terms), 7.4 (Taxes), 7.5 (Palatin and Third Party Expenses), 9.1
(Record Keeping), 9.5 (Recall), 12.4 (Limitations on Warranties),
16.4 (Effect of Termination) and 16.5 (Survival), in each case in
accordance with their respective terms if applicable,
notwithstanding expiry or termination of this
Agreement.

 

17. NOTICE

 


All
notices and other communications
hereunder shall be in writing and shall be deemed given: (A) when
delivered personally or by hand; (B) when delivered by facsimile
transmission (receipt verified); (C) when received or refused, if
sent by registered or certified or recorded post (return receipt
requested), postage prepaid; or (D) when delivered by courier
service; in each case, to the parties at the following addresses
(or at such other address for a party as shall be specified by like
notice; provided, that notices of a change of address shall be
effective only upon receipt thereof):


 



To
Palatin: 

Palatin
Technologies, Inc.






4-B
Cedar Brook Drive


Cranbury, New
Jersey 08512 USA


Attn:
Chief Financial Officer


Facsimile: (609)
495-2202


 



With a copy
to: 

Thompson Hine
LLP






335
Madison Avenue, 12th Floor


New
York, New York 10017 USA


Attn:
Faith Charles, Esq.


Facsimile: (212)
344-6101


 



To
Catalent: 

Catalent Belgium
S.A.






Rue
Font St. Landry


10 Parc
Mercator B-1120


Neder
over Heembeek, Belgium


Attn:
General Manager


Facsimile:
32-2-788-39-59


 



With a copy
to: 

Catalent Pharma
Solutions






14
Schoolhouse Road


Somerset, NJ 08873
USA


Attn:
General Counsel (Legal Department)


Facsimile: +1 (732)
537-6491


 



 







 






 

18. MISCELLANEOUS

 

18.1 Entire
Agreement; Amendments. This Agreement, together with the
Quality Agreement and each Purchase Order and Statement of Work,
constitutes the entire understanding between the parties, and
supersedes any contracts, agreements or understandings (oral or
written) of the parties, with respect to the subject matter hereof.
For the avoidance of doubt, this Agreement does not supersede any
existing generally applicable confidentiality agreement between the
parties as it relates to time periods prior to the date hereof or
to business dealings not covered by this Agreement. No term of this
Agreement may be amended except upon written agreement of both
parties, unless otherwise expressly provided in this
Agreement.

 

18.2 Captions;
Certain Conventions. The headings used in this Agreement are
for convenience only and are not to be interpreted or construed as
a substantive part of this Agreement. Unless otherwise expressly
provided herein or the context of this Agreement otherwise
requires, (A) words of any gender include each other gender, (B)
words such as “herein”, “hereof”, and
“hereunder” refer to this Agreement as a whole and not
merely to the particular provision in which such words appear, (C)
words using the singular shall include the plural, and vice versa,
(D) the words “include(s)” and “including”
shall be deemed to be followed by the phrase “but not limited
to”, “without limitation” or words of similar
import, (E) the word “or” shall be deemed to include
the word “and” (e.g., “and/or”) and (F)
references to “Clause” or other subdivision, or to an
Attachment or other appendix, without reference to a document are
to the specified provision or Attachment of this Agreement. This
Agreement shall be construed as if it were drafted jointly by the
parties.

 

18.3 Further
Assurances. The parties agree to execute such further
instruments and to undertake such other acts as may be reasonably
necessary or appropriate to give full effect to the terms of this
Agreement.

 

18.4 No
Waiver. In no event shall any delay, failure or omission (in
whole or in part) in enforcing, exercising or pursuing any right,
power, privilege, claim or remedy conferred by or arising under
this Agreement or by law, be deemed to be or construed as a waiver
of that or any other right, power, privilege, claim or remedy in
respect of the circumstances in question, or operate so as to bar
the enforcement of that, or any other right, power, privilege,
claim or remedy, in any other instance at any time or times
subsequently.

 

18.5 Severability.
If any term of this Agreement is declared invalid or unenforceable
by a court or other body of competent jurisdiction, the remaining
terms of this Agreement will continue in full force and
effect.

 

18.6 Independent
Contractors. The relationship of the parties is that of
independent contractors, and nothing in this Agreement is intended
to create or will be construed as creating between the parties the
relationship of joint venture, co-partners, employer/employee or
principal/agent.

 

18.7 Successors
and Assigns. Neither party may assign this Agreement, in
whole or in part, without the prior written consent of the other
party; provided,
however, that either party
may, without the other party’s consent, assign this Agreement
in its entirety to an Affiliate or to a successor to substantially
all of the business or assets of the assigning party or the
assigning party’s business unit responsible for performance
under this Agreement.

 

18.8 Third
Party Rights. This Agreement shall not confer any rights or
remedies upon any person or entity other than the parties to this
Agreement and their respective successors and permitted assigns,
and a person or entity who is not a party to this Agreement has no
rights to enforce any term of this Agreement.

 

18.9 Governing
Law. This Agreement and the legal relations between the
parties in connection herewith shall be governed by, and construed
in accordance with, the laws of the State of New Jersey, USA,
without regard to the conflict of law principles thereof. The
United Nations Convention on Contracts for the International Sale
of Goods shall not apply to this Agreement.

 

18.10 Alternative
Dispute Resolution. Any dispute that arises between the
parties in connection with this Agreement shall first be presented
to the senior executives of the parties for consideration and
resolution. If such executives cannot reach a resolution of the
dispute within a reasonable time, not to exceed 30 days unless
otherwise agreed by the parties in writing, then such dispute shall
be submitted to arbitration by the International Institute for
Conflict Prevention and Resolution, 575 Lexington Avenue, 21st
Floor, New York, NY  10022 (“CPR”) by one arbitrator mutually
agreed upon by the Parties. If no agreement can be reached within
30 days after names of potential arbitrators have been proposed by
the CPR, then the CPR will choose one arbitrator having reasonable
experience in commercial transactions of the type provided for in
this Agreement. The arbitration shall take place in the English
language in New York City, New York, in accordance with the CPR
administered arbitration rules then in effect, and judgment upon
any award rendered in such arbitration will be binding and may be
entered in any court having jurisdiction thereof. Unless otherwise
agreed to by the parties in writing, the arbitration shall commence
within 60 days of the date on which a written demand for
arbitration is filed. The arbitrator’s decision shall set
forth a reasoned basis for any award of damages or finding of
liability. The arbitrator shall not have power to award damages in
excess of actual compensatory damages and shall not multiply actual
damages or award punitive damages.

 



 







 





 

18.11 Prevailing
Party. In any dispute resolution proceeding between the
parties in connection with this Agreement, the prevailing party
will be entitled to recover its reasonable attorney’s fees
and costs in such proceeding from the other party.

 

18.12 Publicity.
Neither party will make any press release or other public
disclosure regarding this Agreement or the transactions
contemplated hereby without the other party’s express prior
written consent, except as required under Applicable Laws, by any
governmental agency or by the rules of any stock exchange on which
the securities of the disclosing party are listed, in which case
the party required to make the press release or public disclosure
shall use commercially reasonable efforts to obtain the approval of
the other party as to the form, nature and extent of the press
release or public disclosure prior to issuing the press release or
making the public disclosure. Notwithstanding the foregoing, the
parties hereto intend to make a jointly agreed press release with
respect to the Agreement within 60 days after the Effective Date or
at such other time as mutually agreed by the parties.

 

18.13 Right
to Dispose. If Catalent requests in writing from Palatin
direction with respect to disposal of any inventories of Product,
Palatin-supplied Materials, Palatin Equipment, other equipment,
samples or other items belonging to Palatin and is unable to obtain
a response from Palatin within 90 days after making such request,
Catalent shall be entitled in its sole discretion to dispose of all
such items.

 

18.14 Force
Majeure. Except as to payments required under this
Agreement, neither party shall be liable in damages for, nor shall
this Agreement be capable of termination by reason of, any delay in
such party’s performance, or breach of its obligations,
hereunder if such delay or breach is caused by events beyond such
party’s reasonable control, including acts of God, law or
regulation or other action or failure to act of any government or
agency thereof, war or insurrection, civil commotion, destruction
of production facilities or materials by earthquake, fire, flood or
weather, labor disturbances, epidemic or failure of suppliers,
public utilities or common carriers. If the events shall continue
unabated for 90 days, then both parties shall meet to discuss and
negotiate in good faith what modifications to this Agreement should
result from such events.

 

18.15 Counterparts.
This Agreement may be executed in two or more counterparts, each of
which will be deemed an original but all of which together will
constitute one and the same instrument. Delivery of an executed
counterpart of this Agreement by fax or e-mail in an image format
(e.g., .pdf file) shall be as effective as delivery of a manually
executed counterpart of this Agreement.

 



(signature page follows)

 


 




 








 






 


IN WITNESS WHEREOF, the parties have
caused their respective duly authorized representatives to execute
this Agreement effective as of the Effective Date.

 


	

CATALENT BELGIUM S.A.

	

PALATIN TECHNOLOGIES, INC. 



	

 

	

   



	
By:
    /s/ Wim Blendeman

	

By:   

/s/ Stephen T. Wills


	
Name: Wim Blendeman

	
Name: 

Stephen T. Wills


	
Title:
General Manager

	
Title:

CFO




 



 




 








 






 


 



ATTACHMENT A


 



VALIDATION SERVICES


 


 



[To be agreed by the parties within ninety (90) days following the
Effective Date and, when agreed to, to form a part of this
Agreement.



Attachment to reflect standard Catalent quotation format, including
pricing.



If no validation services are desired, state “N/A” on
this page.]



ATTACHMENT B


 



PRODUCT MAINTENANCE SERVICES


 


 


[***]


 


 


 




 








 







ATTACHMENT C


 



SPECIFICATIONS


 


 


[***]


 


 




 








 






 



ATTACHMENT D


 



PRICING, FEES AND MINIMUM REQUIREMENT


 


[***]


 




 








 






 



ATTACHMENT E


 



COUNTRIES INCLUDED IN TERRITORY


 


Canada


 


Kosovo


Former
Yugoslav Republic of Macedonia


 


Turkey


 


 


Albania


Andorra


Bosnia
and Herzegovina


Iceland


Liechtenstein


Monaco


Montenegro


Norway


San
Marino


Serbia


Switzerland


Vatican
City State


 


Armenia


Azerbaijan


Belarus


Georgia


Kazakhstan


Kyrgyzstan


Moldova


Russia


Tajikistan


Ukraine


Uzbekistan


Turkmenistan


Mongolia


Vietnam


 


People’s
Republic of China


Taiwan


Hong
Kong S.A.R.


Macau
S.A.R.


Republic
of Korea


 


 




 








 






 



ATTACHMENT E


 



FORM STATEMENT OF WORK


 


[***]