In this task, you're given a passage that represents a legal contract or clause between multiple parties, followed by a question that needs to be answered. Based on the paragraph, you must write the index where the answer starts. If multiple answers seem to exist, write the index of the answer that is the most plausible. If multiple indices must be used to answer the question, the output should be a common separated list of indices.
--------
Question: Exhibit 10.21

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.

Network Management Outsourcing Agreement



Bank of South Pacific Ltd   Network Management Outsourcing Agreement







Datec Contact Details   [*****]   [*****]   [*****]   [*****]   [*****]   [*****]   [*****]   [*****]   [*****]   [*****]     Commercial in Confidence   Page 2   May 2004

Network Management Outsourcing Agreement   ***** CONFIDENTIAL TREATMENT REQUESTED





Bank Of South Pacific Ltd

Document outline prepared by Des Kearse: Datec PNG Ltd May 2004



Document Distribution, Approval and Revision History

Distribution

This document has been distributed to   Name   Title-Company [*****]   [*****]   [*****]   [*****]   [*****]   [*****]   [*****]

Approvals

This document requires the following approvals. Signed approval forms are filed in the Quality section of the Bank of South Pacific Limited and Datec PNG LTD.   Name   Title

Revision History   Date of this revision:   Date of Next revision: (date)   Revision Number   Revision Date   Summary of Changes   Changes marked                     Commercial in Confidence   Page 3   May 2004

Network Management Outsourcing Agreement   ***** CONFIDENTIAL TREATMENT REQUESTED





Abbreviations   Bank South Pacific Limited   BSP

Datec PNG Limited   Datec

Business Continuity Planning   BCP

Hardware, Maintenance, Support Services for designated Equipment   Break Fix

BSP Customer Business Manager   CBM

Disaster Recovery Plan   DRP

Financial Point of Sale   FPOS

Local Area Network   LAN

Managed Third Parties   MTP

Moves, Adds and Changes   MACs

Network Terminal Unit   NTU

Request for Service   RFS

Service Level Agreement   SLA

Single Point of Contact   SPOC

Wide Area Network   WAN   Commercial in Confidence   Page 4   May 2004

Network Management Outsourcing Agreement





Definitions

Agreement means this agreement. The Network Management Outsourcing Agreement.

CPI means an amount determined by reference to All Groups Indexes for Urban Areas being the figure relating to the weighted urban average for PNG contained in the Consumer Price Index published by the Papua New Guinea Bureau of Statistics each quarter in the Papua New Guinea Statistical Bulletin.

Help Desk means a physical location within Datec's head office designated as an immediate contact point to provide service assistance to customers.

Material Breach includes (but is not necessarily limited to) the occurrence of any or more of the following:

  (i) a breach, or series of breaches, of this agreement which causes a substantial disruption to the Services; or

  (ii) an accumulation of breaches which places unreasonable burdens on the BSP Personnel, or

  (iii) Datec commits a breach which at common law would justify termination of this agreement, or

  (iv) Datec commits multiple breaches of this agreement occurring within a 6 month period; or

  (v) Datec fails to comply with the Transition Plan.

Business Hours means Monday to Friday 07.30 hours to 18.00 hours.   Commercial in Confidence   Page 5   May 2004

Network Management Outsourcing Agreement





TABLE OF CONTENTS   OVERVIEW   1.1   Introduction   10 1.2   Document Structure   10 1.3   Agreement Assumptions   10 1.4   Contract Term   10 1.5   Hours of Support   10

The Datec (PNG) LTD Deliverables   2.1   General Statements   11 2.2   Physical Boundaries And Demarcation Points   11 2.3   Network Operations Management   12 2.4   Systems And Technical Support   13 2.5   Network Virus Management   14 2.6   Internet Services   14 2.7   Management Tools   14 2.8   Document Management   15 2.9   Related Software Distribution   15 2.10  Technology (Equipment) Refresh Planning And Implementation Recommendations   16 2.11   Performance Management   16 2.12  Capacity Management   17 2.13  Managed Third Parties (MTP)   18 2.14  Moves, Adds And Changes (MACs)   18 2.15  Help Desk Services   19 2.16  Hardware, Software And Equipment Support   20 2.17  User Logon And Password Administration for Wide Area Network (WAN)   21 2.18  Project Services   21 2.19  Asset Management   22 2.20  Security Services   22 2.21  Business Continuity Planning (BCP) And Disaster Recovery Plan   23 2.22  Change Management   23 2.23  Backup Requirements   24 2.24  Designated Locations   24

Performance Standards   3.1   General Requirements   25 3.2   Measurement And Monitoring Tools   25 3.3   All Data And Supporting Information Confidential   26

Reports   4.1   Reporting   26 4.2   Types Of Reports   26 4.3   Structure Of Reports   27   Commercial in Confidence   Page 6   May 2004

Network Management Outsourcing Agreement





Personnel   5.1   Standards Of Datec Personnel   27 5.2   Replacement At BSP's Request   28 5.3   No Right To Require Termination   28 5.4   Restraints On Engagement Of BSP Personnel   28 5.5   Enforceable Restraint   28 5.6   Employer Obligations   28 5.7   Security And Occupational Health And Safety   29

Audits And Record Keeping   6.1   Record Keeping   29 6.2   Access To The Datec's And Subcontractors Premises And Material   29 6.3   Regular Audits For BSP Reporting   29 6.4   Assistance   29

Subcontractors   7.1   Approval   30 7.2   Terms   30

Pricing   8.1   General Principles   30 8.2   Base Fees   30 8.3   Price Inclusive   30 8.4   Pricing Criteria   31 8.5   Rebates   31

Pricing Adjustments   9.1   CPI Adjustments   31 9.2   Pass - Through Expenses   32 9.3   Service Level Reviews   32

Extraordinary Events   10.1   Extraordinary Events   32

Confidentiality   11.1   Confidentiality   32   Commercial in Confidence   Page 7   May 2004

Network Management Outsourcing Agreement





Returning Material, Data, Hardware, Software And Information   12.1   Datec's Obligations   33 12.2   BSP's Obligations   33

Compliance With Laws   13.1   Compliance   33

Termination   14.1   Termination By BSP for Cause   33 14.2   Termination For Change Of Control   33 14.3   Termination By BSP For Convenience   34 14.4   Termination By Datec For Convenience   34 14.5   Termination Fee   34 14.6   Sole Remedy   34 14.7   Mitigation   34

General Indemnities   15.1   Indemnity By Datec (PNG) LTD   35 15.2   Enforcement Of Indemnities   36

Personal Injury, Property Damage Indemnity   16.1   Datec Indemnifies BSP   36 16.2   BSP Indemnifies Datec   36

Risk Management   17.1   Insurance Coverage   36 17.2   Terms Of Insurance   37

General Conditions   18.1   Assignment By Datec   37 18.2   Assignment By BSP   37 18.3   Governing Law   37

Dispute Resolution   19.1   Notice   37 19.2   Escalation   37 19.3   Expert Determination Or Mediation   38 19.4   Expert Determination Criteria   38 19.5   Selection Of Expert Or Mediator   38 19.6   Procedure   38   Commercial in Confidence   Page 8   May 2004

Network Management Outsourcing Agreement





Disengagement   20.1   Planning   39 20.2   Implementation Of Plan   39

Schedules   A:   Equipment List - Asset Register   42 B:   Service Level Agreement   45 C:   Pricing Schedule   50 D:   Sample Moves, Adds, and Changes Form - (MAC Form)   51 E:   Sample Request for Service Form - (RFS Form)   55   Commercial in Confidence   Page 9   May 2004

Network Management Outsourcing Agreement





OVERVIEW

1.1 Introduction

This Network Management Outsourcing Agreement incorporates the terms and conditions for the provision of Network Outsourcing Services and Deliverables by Datec (PNG) LTD (Datec) to the Bank of South Pacific Limited (BSP).

The parties further agree that they will provide best commercial efforts for the benefit of one another to ensure that neither the BSP nor Datec are disadvantaged throughout the fulfilment of this agreement.

The parties will therefore provide full assistance to each other and agree to work proactively together to:

  •   Improve and enhance the Services for the benefit of the BSP and

  •   Perform their respective obligations for the benefit of the BSP   1.2 Document Structure

This document is structured to capture the key conditions of the agreement in a logical order. It is understood that the agreement may be changed at any time by the mutual consent of both parties using the revision history and approval records contained in the Document Distribution, Approval and Revision History.   1.3 Agreement Assumptions

The following assumptions apply to this agreement:

  •   All tasks and the scope of work are covered by this agreement.

  •   This agreement is for the provision of management services covering the BSP Wide Area Network (WAN) and provided by Datec.

  •   The BSP existing WAN has been upgraded to the standard agreed to by Datec and the BSP as detailed in the Phase 3 Document dated 12th December 2003 entitled Audit Review Recommendation Costs' and the Memorandum of Understanding dated 7th May 2004.

  •   BSP is formally engaging Datec to be the network manager for the provision of service for the day-to-day operations of the wide area network (WAN) service.

  •   BSP will retain ownership of all the assets as listed in the Asset Register and contained in Schedule A.   1.4 Contract Term

The commencement date for this contract will be 16th June 2004.

The initial term of the contracted agreement is 5 years from the commencement date. The BSP then have the option to renew the agreement for another 5 years subject to any restructuring of the agreement as required by the parties.

Either party may advise the other of the impending expiry of the then current term, generally in accordance with section 14 .   1.5 Hours of Support

The normal business hours for services under this agreement will be Monday - Friday 07.30 hours to 1800 hours.

Twenty-Four Hour (24Hour) Help Desk will be provided Monday to Friday outside of normal business hours.   Commercial in Confidence   Page 10   May 2004

Network Management Outsourcing Agreement





The Datec (PNG) LTD Deliverables

2.1 General Statements

Datec will:

  (a) provide operational support services for designated Equipment and Networks;

  (b) perform moves, adds and changes (MACs) for data services;

  (c) provide pricing and perform MACs for data services;

  (d) take over where agreed and/or manage existing third party contracts (MTP'S) as agreed with the BSP;

  (e) act as the local BSP representative in matters directly related to the BSP, in a cooperative manner, with other Managed Third Parties (MTP) and take responsibility for the resolution of WAN related activity by acting as the vendor interface.

  (f) provide hardware maintenance support services for designated Equipment (break Fix) as defined in Schedule A,

Datec will deliver the following project related Services:

  (a) perform Site Surveys, Stage and configure new Equipment, deliver the Equipment, install the Equipment, manage the installation of the Network Services, test, and accept the Network as required.   2.2 Physical Boundaries And Demarcation Points

2.2.1 It is agreed that Datec will have operational responsibility on behalf of the BSP to manage the Wide Area Network (WAN), which is defined as Hosting the HUB and PIX Firewall plus the management of the network to each and including the main branch switch, including all Financial Point of Sale (FPOS) links owned by the BSP.

2.2.2 BSP will have operational responsibility from the main branch switch onwards and any equipment that is connected to this. This is considered to be the Local Area Network (LAN). FPOS links are excluded.   2.2.3 Datec will be responsible for providing BSP with updated site information for existing Sites as necessary to satisfy BSP's business and operational requirements as they may change overtime. Whenever required to install a new Site on the Network, Datec will conduct a physical survey of that Site to determine Site features, implementation readiness, and specific installation needs for required standards. Site Survey information will be recorded in a database in the network management system. Site Survey information will include definitions and clarification of:

  (a) current Network Services;   Commercial in Confidence   Page 11   May 2004

Network Management Outsourcing Agreement





  (b) Telecommunications vendor point of entry;

  (c) boundaries of responsibility;

  (d) power/UPS requirements;

  (e) space requirements;

  (f) Equipment related special requirements;

  (g) cabling and wiring requirements; and

  (h) relevant environmental requirements.   2.2.3 Floor Space

Certain hardware such as the Telikom Lease Line Circuits -NTU's (Network Terminal Units), Pix Firewall and content engine, plus and a number of routers and switches will need to be relocated to the Datec computer room. The computer room and the Datec building have been purposely built with a full disaster recovery management system in place with triple redundancies. The space that this equipment will occupy is based on the industry standards set for such equipment when placed in a computer room environment.   2.3 Network Operations Management

Datec will:

2.3.1 Maintain designated Equipment as listed in Schedule A, and any other equipment that may added from time to time within Papua New Guinea.

(i) BSP will provide Datec with tine required authority to acquire spares parts in order to complete any repairs /replacement that may be required

(ii) Datec will be responsible for the provision of any spare parts required to complete any repairs to the managed Network equipment.   2.3.2 Maintain a Single Point of Contact to interface with and coordinate problem determination and resolution with BSP's appropriate support personnel and third party service providers;   2.3.3 Perform Incident Management to closure. Datec will provide Level 1 support by:

(a) entering problem information into a problem record;

(b) performing incident source identification and severity impact level;

(c) providing feedback to users;

(d) invoking proper incident resolution resources;   Commercial in Confidence   Page 12   May 2004

Network Management Outsourcing Agreement





  (e) dispatching on site service resources, where applicable;

  (f) monitoring resolution status and document actions taken;

  (g) manage escalation or critical situation procedures;

  (h) compiling and maintain the incident resolution system;

  (i) confirming incident resolution with the end user prior to closure;

  (j) maintaining a second and third-level contacts list system including site access requirements for business and after hours site access;   2.3.4 Level 2 support responsibilities include:

  (a) performing problem analysis, trending and reporting;

  (b) accepting problems not completed by Level 1 support personnel;

  (c) investigating severe and recurring problems to determine the root cause, expediting problem resolution and, using historical data, to minimise the recurrence of duplicate or similar incidents;

  (d) working with vendors to resolve problems;

  (e) contacting other support groups and organisations;

  (f) interfacing with other systems, data networks and operating system environment personnel;

  (g) escalating delays in problem resolution; and

  (h) focusing on making fixes available to the first-level support team, to decrease resolution times.

2.3.5 provide problem reports to BSP on a periodic basis, including required information on problems, owner, location, Service Level Agreement (SLA) commitments achieved and status of any problems, including their impact on the required service level.   2.4 Systems And Technical Support

Datec Will:

  (a) be responsible for the installation support, management and control of the BSP WAN environment in Papua New Guinea.

  (b) be responsible for testing, certifying, configuring and deploying upgrades to any installed Software to the latest version available from the Software vendor as agreed with the BSP

  (c) work with BSP Personnel to communicate the effect and impact and compatibility of any changes to the Hardware and Software managed to ensure minimal business impact of such changes;   Commercial in Confidence   Page 13   May 2004

Network Management Outsourcing Agreement





  (d) advise BSP of new technologies that may provide BSP business benefit or improvements in efficiency. The BSP will assess benefits and risks and work with Datec to include on the approved lists as appropriate;

  (e) ensure that Datec staff are trained and skilled on all current and new technologies for the managed Hardware and Software.

  (f) centrally monitor performance of infrastructure components, where possible, to identify performance degradation, capacity and Hardware/Software problems and respond to identified performance tuning, problems and capacity needs;

  (g) tune infrastructure components to ensure optimum operating performance to meet Service Levels.

  (h) provide assistance and support to BSP Personnel as required;



(i) provide in-depth (Level 1 and 2) technical support for operating systems, standard software (for Software problems or questions, defect and non-defect related). It includes problem tracking, problem source identification, problem impact (severity) determination, bypass and recovery support, problem resolution, management reporting and trend analysis and interfacing with other Suppliers on behalf of the BSP;

  (j) provide support, in accordance with the BSP, manufacturers and vendors procedures;

  (k) install, set up and maintain configurations, to deliver the required Services;

  (l) coordinate and recommend system upgrades to BSP, and work with them in recommending proper hardware configurations and upgrades based on performance and capacity planning guidelines;

  (m) schedule and coordinate testing of network systems Software changes with the BSP   2.5 Network Virus Management -WAN

Datec will assist in detecting, fire-walling and blocking propagation of network viruses but are not responsible for virus detection or outbreaks that occur within the banks local area network. Datec will assist the BSP when requested to handle any virus issues that fall out side the scope of this agreement as per the terms of this agreement.   2.6 Internet Services

Datec will provide in accordance with BSP requirements Internet Services and follow on support as currently provided to the BSP under Datec's customer ISP services policy.   2.7 Management Tools

Datec will:

2.7.1 Install, configure and test the selected management tools used to support problem management (e.g. to generate automatic alerts for critical outages)   Commercial in Confidence   Page 14   May 2004

Network Management Outsourcing Agreement





2.7.2 Install, configure and test the selected management tools used to support performance and capacity management (e.g defining alert thresholds and performing notification)   2.8 Document Management

Datec will:

2.8.1 in a mutually agreed format provide documentation, configuration details or other data necessary for the BSP to perform their various business activities and functions;

2.8.2 provide such information that may be necessary to enable the BSP to develop Strategy and Architecture policies and guidelines, undertake benchmarking of Services provided and perform applications development functions.   2.9 Related Software Distribution

Datec will:

2.9.1 upon request from the BSP, distribute and implement software upgrades, software patches to the distributed network equipment as necessary to meet BSP's business requirements

2.9.2 ensure that software distribution windows are managed to ensure that minimal distribution impacts business operations and performance unless otherwise agreed with the BSP

2.9.3 ensure that the software installed are appropriately licensed;

2.9.4 ensure that all software distributions are reconciled to ensure completion;

2.9.5 ensure that all software distributions are virus free;

2.9.6 assist BSP End Users in performing any such upgrades that should be required. Such assistance will be provided via a Help Desk and may result in the dispatch of a support person to the End User location

2.9.7 inform BSP and take corrective action, as appropriate, for failed software distributions and problems resulting from software distribution.

2.9.8 take corrective action to overcome failed or problematic software or data distribution. Datec will fallback to previous (original) release of the affected software.

2.9.9 de-install software, as directed by the BSP, and remove it and any associated documentation to an area designated by the BSP; and

2.9.10provide verification of each completed software distribution, installation or de-installation, and update the asset management and software license management system(s) for that Software Supplier.   Commercial in Confidence   Page 15   May 2004

Network Management Outsourcing Agreement





2.10 Technology (Equipment) Refresh Planning And Implementation

Datec will be responsible for liaison with managed third parties (MTP's) in the procurement and management of installations, and deletion of and Tracking Network Services within the Network under instruction from BSP. Such responsibilities will include:

  (a) Management of the installation of Network Services;

  (b) Procurement of upgrades, changes or deletion of Network Services, as appropriate to accommodate BSP's changing requirements;

  (c) interfacing with the appropriate Network Services providers for problems related to Network Services; and

  (d) tracking relevant Network Service information .

Datec will be responsible for supporting, administering, managing and performing provisioning of Equipment and Equipment Software comprising the Network. Unless specifically exempted, the equipment is to be supplied by Datec and invoiced for payment according to Datec's normal terms of trade.

Datec will:

  (a) install Network Equipment and Equipment Software and monitor the fulfilment of each order for accuracy;

  (b) store, deliver and unpack all items of Equipment and remove and dispose of all packaging;

  (c) configure, install and test all Equipment and Equipment Software and transfer data and Equipment Software configurations as required prior to commissioning in the production environment

  (d) provide connectivity for the Equipment and Equipment Software at, or prior to, the time of installation;

  (e) remove BSP Equipment Software from displaced or retired Equipment to the extent required by BSP's security procedures;

  (f) remove displaced or retired Equipment and Equipment Software; and

  (g) ensure BSP is aware of all needs to promptly disconnect and end Network Services and remove related Equipment no longer needed by BSP upon termination of Services at a Site. Datec agrees to remove the applicable Equipment.   2.11 Performance Management

Datec will:

2.11.1monitor, measure, and report on the performance of the WAN environment;

2.11.2 enhance and continuously improve its performance of the Services;   Commercial in Confidence   Page 16   May 2004

Network Management Outsourcing Agreement





2.11.3 identify and recommend product and enhancement opportunities for improved performance;

2.11.4monitor, measure, analyse and report actual systems performance;

2.11.5 recommend changes to the Applications Software for BSP approval to improve system performance;

2.11.6 investigate and correct reported or observed system performance degradation or malfunctions and record for each the downtime, hardware or Software involved, nature of the problem, causes, nature of the fix and product provider. Such fixes will be completed within agreed service windows;

2.11.7monitor and report on capacity inadequacies;   2.12 Capacity Management

Datec will:

  (a) provide additional capacity as required to meet moves, adds and change (MAC) requests;

  (b) provide capacity to meet project requirements as required in conjunction with the BSP

  (c) monitor WAN infrastructure capacity and plan and implement sufficient infrastructure capacity as agreed with the BSP to meet BSP requirements and applicable Service Levels.

  (d) on an ongoing basis, manage the capacity of the environment to meet its obligations under the Service Levels and respond to BSP's operational requirements as they evolve over time;

  (e) monitor and report on Equipment capacity utilisation as it relates to established capacity thresholds, on a continuing basis and upon request by the BSP

  (f) monitor and measure the physical capacity and performance of the environment and report to the BSP when requested;

  (g) upgrade, remove, or add capacity to the environment as necessary to meet BSP's requirements; and

  (h) participate in joint capacity planning reviews with the BSP

Should it be determined that extra capacity is required this cost will be meet by the BSP working with Datec.   Commercial in Confidence   Page 17   May 2004

Network Management Outsourcing Agreement





2.13 Managed Third Parties (MTP)

In accordance with the Agreement, Datec will co-ordinate Managed Third Parties (MTP) where agreed with the BSP.

Datec will:

  (a) manage Third Parties, including monitoring operational day-to-day Network Service delivery, monitoring performance, escalating events for resolution, and maintaining technical support relationships;

  (b) work with BSP to establish and manage new and existing contractual relationships between BSP and MTP as needed to provide the Services;

  (c) escalate MTP performance failures to MTP management as necessary to achieve timely resolution as per the SLA;

  (d) monitor and Manage the MTP's efforts to remedy a failure;

  (e) communicate to designated personnel the status of MTP's efforts to remedy a failure.   2.14 Moves, Adds And Changes (MACs)

As a component of the base fee Datec will perform any required MACs that fall within the scope of work contained in this agreement.

Datec will also be required to provide MACs to the BSP with pricing and costs for tasks that fall outside the agreement such as project management or the acquisition of new equipment or upgrades but not just restricted to these items.

On approval of any MAC Datec will be required to assist in the supervision, management and implementation of changes related to the Network and the Services as necessary to satisfy BSP's business and operational requirements.

Datec will:

  (a) receive, log and track the completion of service requests and provide related information to the IBM Help Desk and billing system;

  (b) schedule the execution of the MAC;

  (c) for MACs, dispatch and manage the performance of appropriate technicians;

  (d) coordinate and communicate with designated personnel concerning scheduling and requirements, so as to eliminate the business impact on end users;

  (e) provide the necessary technical support to complete the MAC;

  (f) physically move Equipment, as required, and install any necessary in-scope cabling where appropriate;

  (g) notify the BSP contact person of completion of the MAC;   Commercial in Confidence   Page 18   May 2004

Network Management Outsourcing Agreement





  (h) confirm correct implementation of the MAC with the designated personnel and the BSP Help Desk, as appropriate;

  (i) track the completion of the MAC in a management system by updating relevant inventory and configuration information.   2.15 Help Desk Services

Datec will

2.15.1

provide a single-point-of-contact (SPOC) Help Desk. The Help Desk will support and have access to, and maintain, sufficient information that will facilitate knowledge of the BSP's business and technology environment;

2.15.2

provide one primary Help Desk contact phone number and enable contact fax, e-mail and browser for all technology requests. This includes, but is not limited to, communication faults, Hardware and Software failures, and general enquiries by the BSP.

2.15.3   record, analyse and report on a regular basis, as and when required by the BSP, on calls received by the Help Desk, including details of:

  •   call volumes and duration;

  •   problem trends;

  •   call abandon rate and wait times;

  •   Level 1 resolution rate;

  •   problem resolution time;

  •   provide Level 1 support for any end user IT problem;

  •   resolve problems at the first level, to decrease resolution times;

Provide Help Desk support, which includes:

  •   recording all problem calls, inquiries and requests for service;

  •   gathering the end user information;

  •   obtaining resource status;

  •   accessing on-line information;

  •   responding to end user requests with accurate and appropriate information;

  •   handling routine Hardware, Software, and usage problems;   Commercial in Confidence   Page 19   May 2004

Network Management Outsourcing Agreement





  •   transferring calls to the appropriate support group, although coordination and ownership of the problem and escalation management remains with the Level 1 support;

  •   opening the problem record and providing the end users with a unique problem identifier (e.g. number);

  •   informing the end user of the status;

  •   calling the end user for further information;

  •   closing the call, with the end user's agreement and ensuring end user survey is completed;

  •   escalating delays in problem resolution;

  •   notify users of system unavailability (scheduled and non-scheduled);

  •   report all suspected viruses to the BSP in a timely manner; and

  •   assist the BSP in removing viruses   2.16 Hardware, Software And Equipment Support

Datec will:

  (a) process warranty claims, as applicable;

  (b) coordinate and schedule maintenance activities with the BSP and third parties;

  (c) ensure that maintenance personnel follow documented recovery procedures;

  (d) maintain accurate documentation on the current location and status of Hardware and Equipment under repair;

  (e) update the problem management and asset management systems with relevant maintenance information;

  (f) diagnose and resolve complex network, operational and Software problems;

  (g) provide trouble shooting and problem resolution for all managed Hardware, Software, and Equipment;

  (h) provide Software and Equipment support including trouble shooting for problem determination;

  (i) resolve problems with long term fix or if problem cannot be resolved within an acceptable time frame, an alternative solution must be available in order to get the BSP working with the long term fix implemented at a later time;

  (j) identify and resolve user Hardware and Equipment problems including the management and execution of any Service Levels agreed in third party vendor maintenance agreements in place currently or in the future;d   Commercial in Confidence   Page 20   May 2004

Network Management Outsourcing Agreement





  (k) provide end user support and problem resolution for Software;

  (l) coordinate with other parties as necessary to resolve Hardware and Equipment problems;

  (m) order new Hardware and Equipment and schedule installation;

  (n) interface with Hardware and Equipment vendors for planning and problem resolution.   2.17 User Logon And Password Administration for Wide Area Network (WAN)

2.17.1Datec will provide a central point for the generation of new user logons and passwords as agreed with the BSP.

2.17.2Datec will reset passwords and perform logon ID administration in accordance with BSP's security guidelines.

2.17.3User logon and password administration include providing access and administering passwords for firewalls and internet requirements.   2.18 Project Services

Datec will provide project services as agreed with the BSP that fall outside the scope of this document.

2.18.1Datec will execute Projects according to the following guidelines: All new projects, new Requests for Service (RFS), and work considered out- of-scope of day-to-day operations will be treated as competitive

2.18.2BSP will ask Datec for a quote based on a Scope of Work

2.18.3Datec is to provide a relevant quote to the BSP Customer Business Manager (CBM)

2.18.4Quotes will be approved by the BSP CBM, who will then notify Datec.

BSP Customer Business Manager (CBM) contact details:

[*****]

[*****]

[*****]

[*****]

[*****]   Commercial in Confidence   Page 21   May 2004

Network Management Outsourcing Agreement   ***** CONFIDENTIAL TREATMENT REQUESTED





2.19 Asset Management

  2.19.1 Datec will assist the BSP in the ongoing management of an inventory of Equipment, Equipment Software and Network Services comprising the Network. Such inventory will record, Site locations and Equipment configuration (including hardware components and operating system software) as applicable to the Equipment, Equipment Software and Network Services in an agreed format.

  2.19.2 Datec will provide updates to the inventory that result from other processes including performance management, fault management, configuration and capacity planning. Updates from these processes will be tracked through work order activity. Datec will provide BSP with changes to the inventory in an agreed format.

Datec will:

  (a) within 30 days from each Site Acceptance Date, provide the necessary information to populate the inventory management database with information regarding that Site;

  (b) provide updated inventory data on a weekly basis as a result of performance management, fault management, and MAC activity; and

  (c) manage an inventory of spares made available for the purpose of facilitating the maintenance of critical Service components.   2.20 Security Services

As set forth below, Datec will manage physical security for the Network as necessary to satisfy BSP's business and operational requirements. Datec will be responsive to BSP changes in its physical Network security requirements as they may change over time. Datec will comply with relevant BSP information security policies, and government regulations. With respect to this responsibility,

Datec will:

  2.20.1 on an ongoing basis, identify Datec subcontractors and Personnel who are to be granted access to specific operations or BSP facilities related to the Services;

  2.20.2 follow a standard equivalent to the BSP physical security standard for the Network. If Datec security standards provide a greater degree of security, Datec will follow Datec standards for the Network;

  2.20.3 follow all security procedures in effect at the Installation Sites. BSP is responsible for site security at the Sites;   Commercial in Confidence   Page 22   May 2004

Network Management Outsourcing Agreement





  2.20.4 immediately report breaches of security evident during site visits to BSP. Such breaches are to include all unauthorised attempts to use or obtain physical access to BSP Network resources and information;

  2.20.5 for facilities under BSP's control, comply with BSP's physical security standards of which Datec receives reasonable advance written notice.   2.21 Business Continuity Planning (BCP) And Disaster Recovery Plan (DRP)

Datec will adhere to the BSP's DRP policy and procedures and will assist wherever possible to further enhance these within the scope of this agreement.   2.22 Change Management

Change management is both a communications process and a methodology that seeks to introduce change into any environment without adversely impacting service delivery and commitments and will usually be associated with a MAC document.

Datec will perform the change management functions below:

  (a) accept and enter authorised change requests into an information system for the purpose of tracking changes to the environment in accordance with the BSP processes, procedures and methodologies;     (b) for each change affecting the environment the Supplier will:

  (i) assess the necessity and impact of the proposed change on performance, connectivity and overall operation;

  (ii) in conjunction with BSP, develop acceptance test criteria and test the change;

  (iii) work with BSP to resolve acceptance test issues;

  (iv) schedule and manage testing and implementation of the change, including communication to and coordination with other affected functions in accordance with the change management procedures;

  (v) with BSP assistance, verify the successful implementation of the change. Notify the change requestor and customers of the outcomes following the change implementation;

  (vi) ensure diligence is applied in deciding upon time of day and day of week for implementation of change so that provision of service is continued;

  (vii) ensure all potential and/or actual business impacts expected as a consequence of the implementation of change are communicated to and understood by the BSP

  (viii) ensure potential conflicts between changes are identified and resolved in advance of implementation; and   Commercial in Confidence   Page 23   May 2004

Network Management Outsourcing Agreement





  (ix) ensure changes are bundled to ensure Services are not subject to more outages than are sensible or necessary.   2.23 Backup Requirements

Datec Will:

  (a) ensure that network configurations and O/S are fully backed up so that they can be reinstalled without delay in an emergency.

  (b) assist with the installation and decommissioning of equipment and associated hardware and software;

  (c) assist with the facilitation of scheduled hardware maintenance;

  (d) assist with the physical placement and movement of hardware, cables, connectors and installations;

  (e) maintain and distribute configuration diagrams and associated documentation;

  (f) assist with testing the recovery procedures required to re-establish, in the event of a failure, the functionality of systems included in the agreement, in compliance with BSP's requirements;

  (g) prepare, test and document backup and recovery procedures for both Datec and BSP

  (h) maintain the physical environment, and all equipment, in a safe and clean manner and in accordance with equipment vendors specifications.

  (i) manage physical site security in accordance with Datec and BSP security policies;

  (j) implement recovery processes and procedures, as required to ensure timely recovery following any environmental failure;

  (k) ensure regular testing of Datec's environmental components (eg. fire alarms, generators, UPS, etc); and

  (l) keep all equipment in good operating condition in accordance with equipment specifications, and such other performance criteria as contained in this Agreement so as to be able to effectively perform to specification.   2.24 Designated Locations

Datec will manage the BSP WAN operations from its Corporate Head Office located in Waigani Drive, Port Moresby.

In order for this to occur certain routers/switches and associated network equipment will be located at Datec   Commercial in Confidence   Page 24   May 2004

Network Management Outsourcing Agreement





The Current Router and Switch Locations that will be covered by this agreement are:         [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]       [*****]

Performance Standards

3.1 General Requirements

Throughout the term of the agreement Datec will:

  (a) meet or exceed the Service Levels identified within the service level agreement.

  (b) comply with industry standards; and

  (c) Datec will also maintain the BSP quality assurance procedures where applicable and agreed between the parties.   3.2 Measurement And Monitoring Tools

Datec will:

  (a) perform all Service Level reporting, in a manner acceptable to the BSP   Commercial in Confidence   Page 25   May 2004

Network Management Outsourcing Agreement   ***** CONFIDENTIAL TREATMENT REQUESTED





  (b) implement further automated measurement, monitoring tools and procedures as advised by the BSP to measure and report Datec's performance on a monthly basis should the existing tools be inadequate. The acquisition of new tools will be subject to a MAC and approval by the BSP for their acceptance of costs and purchase.   3.3 All Data And Supporting Information Confidential

Detailed supporting information and reports relating to service levels and performance will be confidential between the two parties.

Both parties will treat the terms of this agreement and any supporting documentation, such as emails, facsimiles and the like as confidential and may only disclose it:

  (a) to officers and employees who have signed a confidentiality agreement that imposes on that person confidentiality obligations and who:

  (i) have a need to know (and only to the extent that each has a need to know); and

  (ii) have been directed and have agreed to keep confidential the Confidential Information on terms consistent with this Statement of Work; or

  (b) to the extent, and to the persons, required by law.

Reports

4.1 Reporting

Datec is to provide a range of reports and/or data required to develop such reports in an agreed format to the BSP or its nominee on daily, weekly, monthly and ad hoc basis as requested by BSP.

Datec will undertake the following functions:

  4.1.1 respond to user report enquiries

  4.1.2 follow up errors with areas providing the source data

  4.1.3 manage reporting platform   4.2 Types Of Reports

Datec will make available to the BSP

  4.2.1 the reports identified in this document and the Service Level Agreement   Commercial in Confidence   Page 26   May 2004

Network Management Outsourcing Agreement





  4.2.2 the reports and documents which were provided by the BSP prior to the Commencement Date

  4.2.3 each month such reports as are necessary to ensure and validate the Supplier's performance and commitments made under the Service Level Agreement and

  4.2.4 such other reports as may be specified by the BSP from time to time.   4.3 Structure Of Reports

Datec must structure performance reporting so that it can be readily communicated to the management or end-user, business areas and business system owners in a mutually agreed format.

Personnel

5.1 Standards Of Datec Personnel

Datec will:

  (a) use an adequate number of Personnel to supply the Services outlined in this agreement

  (b) ensure all Personnel who perform Services are properly educated, trained and fully qualified for the Services they perform;

  (c) ensure that all Personnel comply with:

  (i) any protocols, codes of conduct or procedures specified by the BSP and advised by from time to time

  (ii) ensure any obligations under this agreement in respect of Confidential Information, Personal Information, data security and material

  (iii) all Laws; and

  (iv) any policies existing or introduced from time to time, including policies regarding occupational health and safety requirements, building access and physical security;     (d) comply with any authorisation procedures specified in this agreement before:

  (i) assigning any person to supply Services; or

  (ii) permitting that person to enter any premises of Datec or BSP, to handle any material or become aware of any Confidential Information or Personal Information; and

  (iii) ensure that only Datec Personnel who are currently authorised are involved in supplying the Services or given access to any BSP Material, Confidential Information or Personal Information.   Commercial in Confidence   Page 27   May 2004

Network Management Outsourcing Agreement





5.2 Replacement At BSP's Request

BSP may by notice to Datec, require Datec to replace any of the Supplier Personnel for the reasons stated in the notice and:

  i. in the case of breaches of security or confidentiality requirements, Datec must immediately replace that person with another person of suitable ability and qualifications; or



ii. in any other case, after receipt of that notice, Datec will have 48 hours in which to investigate the matters stated in the notice, discuss its findings with the BSP and resolve any problems with the person. If, following that period the BSP requests replacement of the person, Datec must replace that person, within 60 days with another person of suitable ability and qualifications.   5.3 No Right To Require Termination

BSP does not have the right to require Datec to terminate any person's employment or contract with Datec. It is only intended to give the BSP the right to require that Datec discontinue using a particular person in the performance of Services for the BSP.   5.4 Restraints On Engagement Of Datec - BSP Personnel

From the Commencement Date of the agreement both parties must ensure that they do not without mutual written consent solicit, entice or attempt to entice away any employee from either organisation during the Term and for 1 year after the termination date.   5.5 Enforceable Restraint

Clause 5.5 will not in any way restrict either organisation from hiring any person who has responded to any published advertisement of position or who has otherwise approached either organisation for employment unsolicited or its agents or Related Corporations.   5.6 Employer Obligations

Datec must ensure that it, and each of the approved subcontractors and employee's complies with all obligations relating to payment of tax instalment deduction, deductions from prescribed payments, fringe benefits tax, training guarantee levy, superannuation, payroll tax and any other taxes or levies imposed upon an employer which arise in respect of any amounts paid to the Datec under this agreement and that it complies with all requirements imposed on an employer under the relevant legislation to keep records, lodge returns and provide information in relation to such obligations.   Commercial in Confidence   Page 28   May 2004

Network Management Outsourcing Agreement





5.7 Security And Occupational Health And Safety

Datec must at all times comply with and ensure that its personnel and approved subcontractors comply with the laws and regulations on occupational health and safety.

Audits And Record Keeping

6.1 Record Keeping

Datec must keep, and must require subcontractors to keep, adequate accounts, documents and records to the extent required by the BSP as advised and in sufficient detail to enable Datec's compliance with this agreement and the accuracy of its invoices to be determined.   6.2 Access To Datec's And Subcontractors Premises And Material

Datec must give, and must ensure that its Subcontractors give, BSP and their Personnel, (including internal and external auditors and advisers) full access at all reasonable times and on reasonable notice to:

  (a) any premises at which or from which Datec supplies the Services

  (b) the Supplier Personnel; and

  (c) equipment, Software systems, data, accounts, documents and records relating to the Services provided both by Datec and by its Subcontractors, but excluding information relating to the Datec's internal costs and margins for the Services,

in order to enable the BSP to audit Datec's compliance with this agreement and for operational risk reasons.   6.3 Regular Audits For BSP Reporting

The BSP itself may also audit the Supplier's (and its subcontractors) records relevant to the supply of the Services for any reasonable purpose including processes, procedures and performance for operational risk assessment, regulatory requirements and annual reporting.   6.4 Assistance

For the purpose of complying with this clause, Datec must promptly and efficiently give the BSP and their Personnel any assistance they reasonably require, including, if requested, installing and operating audit software. BSP and their Personnel will comply with Datec's reasonable security requirements.   Commercial in Confidence   Page 29   May 2004

Network Management Outsourcing Agreement





Subcontractors

Datec may only subcontract its obligations under this agreement as follows:   7.1 Approval

Datec must obtain the BSP's approval for any subcontracts but may do so without its consent if:

  (a) it is in the ordinary course of business

  (b) Datec supplies BSP with advance notice

  (c) it does not result in a material change in the way Datec conducts its business

  (d) it does not adversely affect the BSP   7.2 Terms

The terms of any subcontract must be consistent with this agreement, unless the BSP agrees otherwise, including:

  i. confidentiality and intellectual property obligations;

  ii. BSP's approval rights (which must apply directly to the subcontractor);

  iii. compliance with BSP's policies and directions;

  iv. indemnities that protect BSP

  v. termination and disengagement rights; and

  vi. key personnel.

Pricing

8.1 General Principles

The BSP will pay Datec a base fee plus any other fees and charges that may be agreed too during the term of the agreement but excluding, travel, freight and tax related matters.

BSP will be responsible for any freight and or related travel costs incurred by Datec in the execution of the services as defined in this agreement. Prior to undertaking or committing to any freight and or related travel costs Datec must first obtain approval from BSP.   8.2 Base Fee

The base fee includes all things necessary to manage the WAN management services as provided for by the terms of this agreement.   8.3 Price Inclusive

The base fee includes all costs, expenses, taxes (except for GST/VAT), duties, levies or imposts relating to the services and Datec's performance of its obligations under this agreement.   Commercial in Confidence   Page 30   May 2004

Network Management Outsourcing Agreement





8.4 Pricing Criteria

Each month Datec will provide the BSP with an invoice including:

  (a) 1/12 of the Base Charge for the service

  (b) pass through expenses for the month

  (c) the annual Base Charge/s once established may still be adjusted from time to time by agreement between the parties.   8.5 Rebates

  1. Should Datec not achieve the agreed Service Levels contained in the Service Level Agreement as detailed in Schedule B, a monthly rebate will be applied as per the Rebate Table in Pricing Schedule C,

  2. Rebates will apply to Severity Levels One (1) and Two (2) during the agreed business hours detailed in Schedule B.

  3. The maximum rebate in any given month will be 50% of the monthly base fee. The rebate calculation will be completed before the 15th Day of the following month for the preceding month together with supporting monthly reports and provided to the BSP.

  4. For the purposes of determining SLA achievement the Time to Respond measurement will be used.

The following definition will apply:

Time to Respond means, the time between the problem being logged and the customer being given a job number and the technician beginning the job As this applies to Severity Levels One (1) and Two (2) this will also include the informing of Datec's senior operational management.

Pricing Adjustments

9.1 CPI Adjustments

No later than 30 days after the end of each contract year the Base Fee must be increased or decreased in accordance with the increase or decrease in the CPI and such increases or decreases will be calculated by using the following formula:

R2 = R1 x New CPI   Old CPI

Where:

R2 = the Base Fee payable for the relevant 12 month period of the Term

R1 = the Base Fee specified the previous year.

New CPI means the last published CPI for a complete quarter ending prior to the date of commencement of the relevant 12-month period of the term.

Old CPI means the last published CPI for a complete quarter ending prior to the date of this agreement.   Commercial in Confidence   Page 31   May 2004

Network Management Outsourcing Agreement





Should the CPI increase exceed more than 10% in any given year the maximum amount applied will be 10% or which ever is lower.   9.2 Pass - Through Expenses

These are expenses to be paid directly by the BSP with no margin or mark up added by Datec. Datec must provide the BSP with all information and material reasonably required to validate a pass through expense.   9.3 Service Level Reviews

The BSP may conduct a service level review at least once per 12-month period or as required with the agreement of Datec.

At least annually the parties will review the Service Levels to determine whether they still reflect the requirements of the BSP. Should the BSP decide that they do not, the BSP may:

  (a) conduct benchmarking on the relevant Services to establish appropriate service levels

  (b) require Datec to propose a means of improving performance.

Extraordinary Events

10.1 Extraordinary Events

The BSP may notify Datec that an Extraordinary Event has occurred or is likely to occur and provide details of such Extraordinary Event.

On receipt of such notice, Datec must promptly determine and report to the BSP the effect on:

  (a) the level of resources required to provide the Services ('Required Resources'); and

  (b) the Fees as a result of the Extraordinary Event.

The parties must use their efforts to agree on the level of required resources and, having agreed, will adjust the agreement accordingly to reflect this change. This will include the adjustment of the base fee and a suitable implementation plan.

Confidentiality

11.1 Confidentiality

All information exchanged between the parties under this agreement or during any negotiations undertaken at any time in respect of this agreement is confidential to those parties and must not be disclosed to any persons except:

  (a) as required by any law of the state of Papua New Guinea

  (b) to legal advisers, auditors, accountants and other consultants of either party requiring information for the purpose of this agreement

  (c) to directors and shareholders of the respective parties

  (d) with the consent of the party that supplied the information   Commercial in Confidence   Page 32   May 2004

Network Management Outsourcing Agreement





  (e) if the information is generally and publicly available other than as a result of the breach of confidence by the person receiving the information.

Returning Material, Data, Hardware, Software And Information

12.1 Datec's Obligations

Upon request from the BSP or at the end of the disengagement period Datec must:

  (a) promptly return all BSP data, physical and written records, hardware, software or any other medium whatsoever

  (b) if requested by the BSP destroy any relevant information and certify in writing that it has done so.   12.2 BSP's Obligations

At the end of the disengagement period the BSP will transfer any material, data, hardware, software and information from Datec to its chosen new location. Datec will assist where possible. The disengagement period will be as determined under Section 14 (Termination) of this agreement.

Compliance With Laws

13.1 Compliance

This agreement will be constructed in accordance with the laws of Papua New Guinea and the parties submit to the non-exclusive jurisdiction of the National Court of Justice of Papua New Guinea.

Termination

14.1 Termination By BSP for Cause

If so advised the BSP may terminate this agreement by giving written notice to Datec if:

  (a) Datec materially breaches the agreement and the breach (Material Breach) cannot be, or is not, rectified within 30 days after a notice from the BSP,

  (b) an Insolvency Event occurs in relation to Datec

  (c) any other event specified in this agreement as giving rise to a right for the BSP to terminate immediately occurs; or

  (d) Datec commits a series of breaches that together constitute a Material Breach.   14.2 Termination For Change Of Control

The BSP may after giving due consideration to all circumstances and not acting unreasonably, terminate this agreement by giving written notice to Datec if there is a change of control or major shareholding of Datec.   Commercial in Confidence   Page 33   May 2004

Network Management Outsourcing Agreement





In the case of the BSP requiring termination under this clause, the BSP will use its best commercial efforts to ensure that it gives due consideration to all the circumstances and does not act unreasonably in demanding such termination.

If the BSP gives such a notice of termination, then:

  (a) if the change of control:

  (i) results in a competitor of the BSP controlling Datec or

  (ii) is reasonably likely in the BSP's opinion, to have a detrimental effect on Datec's ability to provide the Services in accordance with the agreement,

then the BSP will pay Datec according to Section 14 - Termination of this agreement and the Termination Table in Schedule C.   14.3 Termination By BSP For Convenience

The BSP may terminate the whole or any part of this agreement for convenience at any time by giving Datec at least 6 months prior written notice.   14.4 Termination By Datec For Convenience

Datec may terminate the whole or any part of this agreement for convenience at any time by giving the BSP at least 6 months prior written notice.   14.5 Termination Fee

If the BSP terminates under clause 14.3 (Termination by BSP for Convenience) the BSP will pay Datec the Termination Fee calculated in accordance with Attachment C (Pricing).   14.6 Sole Remedy

The amount payable by the BSP under clause 14.3 (Termination Fee) will be Datec's sole remedy for the BSP terminating for convenience.   14.7 Mitigation

Datec must mitigate the cost of termination, including by using its best efforts to:

  i. redeploy personnel used to provide the Services

  ii. terminate contractors in accordance with the terms of their contracts so as to avoid any liability to pay compensation for early termination; and

  iii. redeploy any equipment used to provide the Services that is not acquired by the BSP   Commercial in Confidence   Page 34   May 2004

Network Management Outsourcing Agreement





General Indemnities

15.1 Indemnity By Datec PNG LTD

Datec must indemnify, defend and hold harmless the BSP, their employees, agents, successors and assigns, from any and all Damages arising from, in connection with, or based on allegations of, any of the following:

  (a) Datec's breach of;

  (i) any representation and warranty specified in this agreement or

  (ii) its obligations with respect to BSP Confidential Information

  (b) any claim, demand, proceeding or other action ('Claim') arising out of or related to occurrences Datec is required to insure against     (c) any Claim arising out of or in any way relating to:

  (i) Datec,

  (A) engaging a contractor; or

  (B) employing or terminating the employment of any person,;

  (ii) any fraudulent act or omission, or any fraudulent misrepresentation or deceit by Datec, its Personnel or subcontractors in connection with this agreement; or

  (iii) a decision by the BSP not to approve a subcontractor or to revoke its approval for an Approved Subcontractor under the agreement

  (d) any Claim whether or not the BSP is liable at law for the amount the subject of the Claim, which maybe made against the BSP by, or on behalf of:

  (i) the Tax Office in respect of any payroll tax or penalties that the office may seek to recover from the BSP in respect of any amounts paid to Datec under this agreement

  (ii) any revenue raising authority including the Commissioner of Taxation in respect of any other payment, liability, or penalty that the authority may seek to recover from the BSP in respect of any amounts paid to Datec under this agreement;     (e) any Claim arising from:

  (i) the Acquired Assets or

  (ii) managed Third Party Agreements to which Datec is or becomes a party as a consequence of the operation of this agreement; and   Commercial in Confidence   Page 35   May 2004

Network Management Outsourcing Agreement





  (iii) any Claim arising from any breach by Datec of its obligations under this agreement.   15.2 Enforcement Of Indemnities

It is not necessary for a party to incur expense or make payment before enforcing a right of indemnity conferred by this agreement.

Personal Injury, Property Damage Indemnity

16.1 Datec Indemnifies BSP

Datec indemnifies the BSP against all Damages that the company may sustain or incur (including those sustained or incurred as a result of a claim by a third party against the BSP as a result of:

  (a) any injury to or death of any person arising out of or in any way relating to this agreement; or

  (b) damage to any real or tangible property,

caused by an act or omission of Datec or its personnel   16.2 BSP Indemnifies Datec

The BSP indemnifies Datec against all Damages that Datec may sustain or incur (including those sustained or incurred as a result of a claim by a third party against Datec or any related company as a result of:

  (a) any injury to or death of any person arising out of or in any way relating to this agreement; or

  (b) damage to any real or tangible property,

caused by an act or omission of the BSP or its personnel.

Risk Management

17.1 Insurance Coverage

The BSP will provide full comprehensive replacement insurance cover for all assets contained in the Asset Register (Schedule A).   Commercial in Confidence   Page 36   May 2004

Network Management Outsourcing Agreement





17.2 Terms Of Insurance

The BSP will provide documentary evidence to Datec that such insurance is in place for the term of the agreement.

Datec will not be held liable for service level deficiencies related to insurance issues or an Act of God. Both parties agree to work together to resolve any such issues.

General Conditions

18.1 Assignment By Datec

Datec must not assign this agreement or any right under this agreement unless Datec

  (a) is not in breach of this agreement;

  (b) obtains the prior written consent of the BSP

  (c) ensures that the assignee agrees to be bound by all of the Datec's obligations under this agreement; and

  (d) acknowledges that it remains bound by this agreement   18.2 Assignment By BSP

BSP may:

  (a) assign all or part of this agreement to any person as part of a restructure; and

  (b) assign or novate all or part of the rights and obligations under this agreement to any of the BSP's Related Company's as part of a re- organisation of its business.   18.3 Governing Law

This agreement will be construed in accordance with the laws of Papua New Guinea and the parties submit to the non-exclusive jurisdiction of the National Court of Papua New Guinea.

Dispute Resolution

19.1 Notice

A party claiming that a dispute, difference or question arising out of this agreement (Dispute) has arisen must notify the other party in writing giving details of the dispute.   19.2 Escalation

Senior executive managers of both companies must meet together to negotiate in good faith with a view to resolving the dispute.   Commercial in Confidence   Page 37   May 2004

Network Management Outsourcing Agreement





19.3 Expert Determination Or Mediation

If the parties cannot resolve the Dispute within 30 days after the Notification, the parties must refer the Dispute to:

  (a) Expert determination or

  (b) Mediation

the cost of which will be at either parties own cost   19.4 Expert Determination Criteria

If a Dispute is referred for expert determination the expert must make a determination by reference to what is reasonable in the context of the overall service delivery environment but taking into account best practice standards and relevant benchmarks in Papua New Guinea.

Expert determination must be completed by a mutually acceptable independent expert such as an accountant, computer expert or other person/s as agreed between the parties to assist in the resolution of any such dispute with knowledge of the operating conditions within Papua New Guinea.

But whose decision will not be binding on the parties.

Neither party may terminate this agreement pending the decision of such expert, but either party may approach the court for urgent relief if it is though desirable   19.5 Selection Of Expert Or Mediator

The parties will attempt to agree an appropriate expert or mediator. If they are unable to agree either party may at its own cost, request the president of the Law Society of Papua New Guinea to appoint a suitably qualified person to decide the dispute and determine the cause of action which best meets the objectives of the parties under or in the context of this agreement.

That person will act as an expert and not as an arbitrator and the decision or determination must, so far as practicable, be made within 21 days of the request

The expert may request either of the parties to appear before him or to provide a written explanation as to the reasons for the dispute and as to the party's reasons for following a certain course of action.   19.6 Procedure

Each expert determination and mediation conducted in accordance with this clause will be conducted in accordance with the relevant sections of the this agreement and the appropriate laws of Papua New Guinea.

The parties agree that a determination made by an expert will not be binding on either party. Once a determination has been made, the parties will recommence negotiation to resolve the Dispute and if they fail may initiate court proceedings.   Commercial in Confidence   Page 38   May 2004

Network Management Outsourcing Agreement





Disengagement

20.1 Planning

The purpose of Disengagement is:

  (a) to enable the BSP or its nominee to perform the Disengaged Services from the end of the Disengagement Period; and

  (b) to eliminate or minimise any disruption to the Services (including the Disengaged Services) as a result of the handover of the Disengaged Services to the BSP or its nominee.

Datec must upon request from the BSP work with them to formulate a disengagement plan.

  (a) as part of the Disengagement Plan:

  (i) BSP's right to use any Software continues following Disengagement

  (ii) there is no degradation of service levels or quality of service during Disengagement;

  (iii) there is no interruption to the Services during Disengagement;     (b) the Disengagement Plan:

  (i) specifies the Datec Personnel and other resources that will provide Disengagement Assistance;

  (ii) specifies all things necessary to effect Disengagement as efficiently as possible as at the start of this Agreement to effect the transition to Datec;

  (iii) sets out a timetable and process for effecting Disengagement that will deal with each of the issues in this agreement and will enable the BSP to have completed Disengagement as quickly as possible without disrupting the quality of the Services; and

  (iv) contains all things necessary to ensure that Datec is able to comply with the clauses in this agreement.   20.2 Implementation Of Plan

Datec must ensure that, at all times during the agreement, on 60 days notice it is able to deploy all necessary resources to complete Disengagement in accordance with the agreed Disengagement Plan.

  (a) Datec must ensure there is no degradation of quality of service during Disengagement;

  (b) Datec acknowledges all Service Levels apply during Disengagement but subject to agreement of the viability of the Disengagement Plan   Commercial in Confidence   Page 39   May 2004

Network Management Outsourcing Agreement





  (c) Datec use its best efforts to ensure that the Disengagement Period ends on the intended date of termination for the Disengaged Services,

  (d) the BSP will be permitted (on its own or on behalf of its nominated third party) without interference from Datec (including counter- offers), to make offers to any Datec employees or contractors who were used solely or primarily by Datec to provide the Disengaged Services during the 12 month period prior to the commencement of Disengagement;

  (e) The BSP or its nominee will be permitted to acquire all of Datec's right, title and interest in any Equipment owned or leased by Datec or its Subcontractor that is used in the performance of the Disengaged Services

  (f) If the BSP appoints a third party to assume the BSP role in relation to any or all of the Disengagement, Datec must provide Disengagement assistance to that third party.   Commercial in Confidence   Page 40   May 2004

Network Management Outsourcing Agreement





EXECUTED as an agreement.

SIGNED SEALED AND DELIVERED by BANK SOUTH PACIFIC LIMITED by Garth Mcllwain its duly constituted Attorney in the presence of:

)



BANK OF SOUTH PACIFIC LIMITED by its Attorney who hereby states that at the time of his executing this instrument he has no notice of the revocation of the Power of Attorney Registered No. S.25458

AND I certify that the person executing this instrument is personally known to me   )   Under the authority of which he has executed this instrument   )     )

/s/ Illegible   )     /s/ Illegible Witness   )   Illegible Name (printed)   )

Signed for and on behalf of DATEC (PNG) LIMITED by the authority of the Directors and Management   )

/s/ Illegible   )   Signature of Authorised Officer   )

Financial Controller   )     Illegible Title   )   Name of Authorised Officer (Please Print)

/s/ Illegible    )     Illegible Signature of Witness   )   Name of Witness (Please Print)   Commercial in Confidence   Page 41   May 2004

Network Management Outsourcing Agreement





Schedule A:

Equipment List — Asset Register   Illegible   Illegible   Illegible   Illegible Daru   1721   Catalyst 1912   Fa/1 , E/1 and S/1 Klunga   1721   Catalyst 1912   E/2 Tabubil   1721   Catalyst 2950   E/1 and S/4 Kerema   1721     E/2 POM Admin 1   Cisco 3660   Catalyst 2912   Fa/2, S/10 and ATM/1 POM Admin 2   Cisco 3660   Catalyst 2912   Fa/2 and S/9 POM CC   Cisco 1721   Catalyst 2912   E/1 and S/2 Boroko CC   Cisco 3640   Catalyst 2950   E/2 and S/4 Ori Lavi   Cisco 805     E/1 and S/1 Waigani Drive CC     Catalyst 1912   E/1 and S/2 Security Base   Cisco 805   Catalyst 1912   E/1 and S/1 Gordons CC   Cisco 3662   Catalyst 2950 and Catalyst 1900   Fa/2 and S/12 Stores   Cisco 1605   Catalyst 1912   E/2 and S/1 Bunker nsc_adm1   Cisco 3660   Cataryst 3550   Fa/2, S/27 and ATM/1 Bunker nsc_adm2   Cisco 3660   Catalyst 3550   E/2 and S/8 Bunker NCD   Cisco 3640   Catalyst 3550   E/2 and S/16 Bunker EB   Cisco 3640   Cataryst 3550   E/2 and S/8 User Suppt   Cisco 1601     E/1 and S/1 Dev Suppt   Cisco 1601     E/1 and S/1 Waigani Junction CC     Catalyst 2924   Andersons Harbourside   Cisco 2610   Catalyst 2950   E/1 and S/1 TST 4 Mlle   Cisco 2610     E/1 and S1 Hitron         Commercial in Confidence   Page 42   May 2004

Network Management Outsourcing Agreement





Boroko Foodworld       Rainbow ATM Lobby   Cisco 805     E/1 and S/1 Jacksons   Cisco 805     E/1 and S/1 Alotau   1721   Catalyst 1912   E/1 and S/6 Popondetta   1721   Catalyst 1912   E/2 and S/2 Lae Town   Cisco 3640   Catalyst 2950   E/2 and S/11 Lae Market   1721   Catalyst 2924   E/1 and S/4 Lae CC   Cisco 2611   Catalyst 2950   E/2 and S/6 Lae - Vele Rumana   Cisco 805     E/1 and S/1 Eriku ATM Lobby   1721     E/1 and S/1 Bulolo   1721     E/2 Madang   1721   Catalyst 2924   E/2 and S/4 Madang - Beckslea Plaza   1721     E/2 and S/1 Wewak   Cisco 3640   Catalyst 1912   E/3 and S/4 Wewak ATM Lobby   1721     E/2 and S/1 Maprik   Cisco 806     E/2 Aitape   Cisco 806     E/2 Vanimo   1721   Catalyst 1912   E/2 and S/2 Kainantu   1721   Catalyst 1912   E/1 and S/2 Goroka   Cisco 3640   Catalyst 2950   Fa/1. E/1 and S/6 Bird Of Paradaise   Cisco 805     E/1 and S/1 Kundiawa   1721   Catalyst 1912   E/2 and S/2 Hagen   Cisco 3640   Catalyst 2924   E/2 and S/9 Hagen CC   Cisco 2611   Catalyst 1912   E/2 and S/10 Wabag CC   Cisco 2611   Catalyst 1913   E/2 and S/2 Wabag   Cisco 2611   Catalyst 2924   E/2 and S/2 Mendi   Cisco 2611   Catalyst 1912   E/2 and S/2 Lorengau   1721   Catalyst 1912   E/1 and S/1   Commercial in Confidence   Page 43   May 2004

Network Management Outsourcing Agreement





Kimbe   1721   Catalyst 2950   E/1 and S/4 Bialla   1721     E/2 Kokopo   Cisco 3640   Catalyst 2924   E/5 and S/B Kokopo IRO   Cisco 2611   Catalyst 1912   E/2 and S/6 Rabaul   1721   Catalyst 1912   E/2 and S/1 Kavleng   1721   Catalyst 1912   E/2 and S/2 Namatanai   1721   Catalyst 1912   E/2 Lihir   1721   Catalyst 1912   E/2 and S/3 Buka   1721   catalyst 1912   Fa/2 and S/2   Commercial in Confidence   Page 44   May 2004

Network Management Outsourcing Agreement





Schedule B

Datec Service Levels for BSP Networking Outsourcing Project

Services to be performed are defined in the Network Management Outsourcing Agreement. These include Data services, network services and internet services.

As referenced in Section 8.5 of this agreement, rebates will be applied as detailed in Pricing Schedule C, should Datec not achieve the agreed Service Levels. Rebates will apply to Severity Levels One (1) and Two (2) for all logged jobs during the agreed business hours contained in this agreement.   A. Helpdesk / Service Calls

1(a) During Business Hours (Monday to Friday 7.30 to 18.00)   Severity Level   Time to Respond   Escalation Time   Comments

1   15 minutes   1 hour   2   30 minutes   2 hours   3   1 hour   4 hours   4   8 hours   Next business day     Commercial in Confidence   Page 45   May 2004

Network Management Outsourcing Agreement





After hours assistance Monday through Friday will be available via the Datec Help Desk:

1(b). After Business Hours (Outside Business hours)   Severity Level   Time to Respond   Escalation Time   Comments

1   2 hours   3 hours   2   3 hours   4 hours   3   Next business day   Next business day   4   Next business day   Next business day     1(c). Severity Definitions   Severity Definitions Severity Level

Illegible   Illegible

2 High Impact

Required prompt corrective action. Product of service restricted. Business can operate at reduced capacity. Eg Less than 100 staff impacted, less than 10 branches / ATM's effected by the one event.

Illegible   Illegible   Commercial in Confidence   Page 46   May 2004

Network Management Outsourcing Agreement





1.1.1 B. Reporting   1.1.2   Report

1.1.3   Report Description   1.1.4   Frequency   1.1. 5   Delivery time   1.1.6   Distribution List

1.1.7

Start of Day Network Status Summary Report   1.1.8

Daily

1.1.9

08:00

1.1.10

1.1.11   Open / Closed Incident report   1.1.12  Daily   1.1.13   10:00   1.1.14

1.1.15

Network Utilisation Report

1.1.16

Weekly

1.1.17

17:00 (Friday)   1.1.18

1.1.19

Management Summary report

1.1.20

Monthly

1.1.21

17:00 (3rd Day of the month)   1.1.22

1.1.23

Details

Start of Day Network Status Summary Report

The report is to detail the status of all bank telecommunication circuits. For those circuits that are unavailable or service is impacted details of actions taken is to be included in the report.   Commercial in Confidence   Page 47   May 2004

Network Management Outsourcing Agreement





Open / Closed Incident Report

A summary of all calls logged to the Network Helpdesk, status and action taken.

Network Utilisation Report

The report is to provide graphical details of network utilisation statistics for all facets of the network inclusive of;

Banking Traffic

Internet Traffic

Line / Network availability statistics

Any anomalies are to be noted and appropriate commentary / recommendations made.

Monthly Management Report.

The report is detail in a summarised format Network and Operational performance for the month inclusive of;

Statistics of Incident Reports logged

Graphical presentation of Monthly Network Utilisation

Monthly Line / Network Availability Summary

SLA performance status

Staff Report

Management commentary.   Commercial in Confidence   Page 48   May 2004

Network Management Outsourcing Agreement





2. Managed Third Parties (MTP)

Datec will apply the appropriate severity level and take action as required with managed third party vendors when the resolution requires the involvement of a managed third party.

In the first instance Datec will liase with the managed third party vendor directly keeping records of the action for reporting purposes.

Should there be no successful resolution to this approach within the time durations within this SLA, Datec will escalate the matter directly to the BSP Customer Business Manager (CBM). In any event the CBM will be aware of the request to the MTP due to the daily reporting systems in place.

Once escalated to the BSP CBM, the BSP undertakes to take control of the liaison with the MTP to help Datec resolve the issue.   Commercial in Confidence   Page 49   May 2004

Network Management Outsourcing Agreement





Schedule C

Pricing Schedule   Annual Fees     Annual Base Fee   K3,524,322.00

Monthly Base Fee   K293,693.50   SLA Rebate Table                         % Of SLA Achieved   100%  95%  90%  85%  80%  75%

Monthly Rebate % applied   0%   10%  20%  30%  40%  50%

• Measured Monthly using the actual Response and Escalation times for logged jobs verse the agreed service times contained in the SLA in Schedule B

• Applies to Severity Levels 1 & 2 during normal business hours

• Maximum rebate will be 50% of the monthly base fee   Termination Fee Table

Contract Term Completed   0-Yrl  1-Yr2  2-Yr3  3-Yr4  4-Yr5  5-Yr6

% of Annual Base Fee Payable   50%   40%   30%   20%   10%   0%

Note: The Annual Base Fee will be adjusted in accordance with Section 9.1, CPI Adjustments, of this agreement   Commercial in Confidence   Page 50   May 2004

Network Management Outsourcing Agreement





Schedule D

Change Control Form (For MAC's)

Change Control Form

This form must be created as soon as the owner is aware of the change but at least two weeks prior to the implementation date. This is to notify all involved parties of impending change and to help the scheduling of change into production. For urgent fixes the change process is followed but needs to be processed immediately. Full details may not be available at this point, however the minimum requirements to be completed are:

Scheduled date and time of change: Date Time

Change Control Number: CMS

Equipment affected by the change:

Equipment (Applies to one or more hardware, software changes or configuration changes to one or more networks).   Equipment Details   Domain   Location                                       Commercial in Confidence   Page 51   May 2004

Network Management Outsourcing Agreement





1. Change to be carried out:

2. Reason for Change

3. Is there any impact on other areas?

4. Has agreement been obtained from the business? If so please give details.          Commercial in Confidence   Page 52   May 2004

Network Management Outsourcing Agreement





5. Has Financial Approval been obtained for this change? If so please give details.

6. Have representatives from both the client and the technical staff tested the software or hardware? Please give details.

7. How will the change be carried out?

8. Has any provision been made to back out the installation if necessary? Please give details.          Commercial in Confidence   Page 53   May 2004

Network Management Outsourcing Agreement





9. Have the details and the implications of the change been explained to the client and areas that will be affected? Please give details.

This change control must be reviewed and approved by at least one person from each of the following areas:   Area   Signatory   Signature  Date The Business   Head of Relationship Banking

  Head of Technology

  Others

Datec   Outsourcing

  Delivery Manager



Office Automation Manager       Commercial in Confidence   Page 54   May 2004

Network Management Outsourcing Agreement





Schedule E

REQUEST FOR SERVICE (RFS)

Service Request Form   Commercial in Confidence   Page 55   May 2004

Network Management Outsourcing Agreement





BSP: Service Request Form

Compulsory section or fields are marked with: F

F SR Number:   (Completed by BSP)

-RFS-

  F Date       F Request Type (Cross) F Region (Cross)



¨ POM

¨ Other (Specify)



¨ Project Request

¨ Support Request

¨ Other: Please Specify

F 1.0 Request Details   Service Request Title

Project Name   BSP Project Code

Description

Provide a brief outline of the project scope including high-level business requirements, technical impacts. Where appropriate, provide details of other areas impacted by this project including external parties     Commercial in Confidence   Page 56   May 2004

Network Management Outsourcing Agreement





Background

Provide any relevant information, which assists in defining the business imperatives for the project, (e.g. Business Requirements)     List of Attachments supporting this Service Request   Attachment / Filename (Content)

2.0 Contract Reference

The terms and conditions will be applied as per the Network Management Outsourcing Agreement dated May 2004 between the Bank of South Pacific Limited and Datec PNG LTD.   F 3.0 Requestor Information

Initiator of Request   Name   (   Mobile

  Position   e-mail   Fax Prime Contact

(if different from Requestor)

Name



(



Mobile

  Commercial in Confidence   Page 57   May 2004

Network Management Outsourcing Agreement





  Position   e-mail   Fax

Requesting Business Area

Billing Cost Centre

Project Manager1   Name   (   Mobile   F 4.0 Key Dates (attach Project Plan or relevant documents as appropriate) BSP Phase(s)

Completion Date(s)

/ / / / Datec Phases(s)

Completion Date(s)

/ / / / Priority: (Cross those applicable)   ¨ Regulatory

¨ Normal

  Commercial in Confidence   Page 58   May 2004

Network Management Outsourcing Agreement





  ¨ Compliance   ¨ Fastpath

Implementation Date(s):   User Acceptance Testing

  Production

  Other (specify)   / /   5.0 BSP/Datec Purchase Order Details

F Purchase Order No.2   F BSP/Datec

Is this Request In-Scope or Out-of-Scope of the Services Agreement   Provide details of components if Out of Scope.

  Commercial in Confidence   Page 59   May 2004

Network Management Outsourcing Agreement





F 6.0 BSP Managerial Approval Authorised Approver   Name:

  Title:

  Date:   7.0 BSP Executive Approval Approval      Approval Approved / Not Approved for release to Datec PNG LTD on behalf of the Bank of South Pacific Limited by:     Approved / Not Approved for release to Datec PNG LTD on behalf of the Bank of South Pacific Limited by:

                For and on behalf of the Bank South Pacific Limited     For and on behalf of the Bank South Pacific Limited / /     / / Explanation for Non -approval (if appropriate)       Commercial in Confidence   Page 60   May 2004

Network Management Outsourcing Agreement 
Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?

Answer: 61535


Question: Exhibit 10.5 Confidential Treatment Requested by Achaogen, Inc.   COLLABORATIVE DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

  This Collaborative Development and Commercialization Agreement (Agreement) is entered into as of April 26, 2016 (Effective Date) by and between Microgenics Corporation (hereinafter Microgenics), having its principal place of business at 46500 Kato Road, Fremont, California 94538, and Achaogen Inc. (hereinafter Achaogen), having a place of business at 7000 Shoreline Court, #371, South San Francisco, California 94080. Both Microgenics and Achaogen are referred to herein individually as a Party and collectively as the Parties.   WHEREAS, Achaogen possesses certain intellectual property rights and know-how relating to drug compound Plazomicin;   WHEREAS, Microgenics has certain expertise and know-how relating to the development, manufacture and sale of immunoassays for in vitro diagnostic use;   WHEREAS, the Parties are undertaking, as of the Effective Date, activities under that certain Antibody Development Agreement, dated [***] (the Antibody Development Agreement), for the purpose of identifying and developing antibodies against Plazomicin and this Agreement is the Assay Commercialization Agreement referred to in Section 2.6 of the Antibody Development Agreement; and   WHEREAS, the Parties desire to collaborate on the development and commercialization of a therapeutic drug monitoring assay for the measurement of concentrations of Plazomicin in biological fluids.   NOW THEREFORE, in consideration of the foregoing premises and the covenants and promises contained herein, the Parties intending to be bound, hereby agree as follows:   1. Definitions   For the purposes of this Agreement and the Exhibits hereto, the following words and phrases shall have the following meanings (words defined in the Agreement shall have the meaning ascribed to them in that Section):   1.1 Achaogen Know-How shall mean all proprietary, technical and clinical information, data and know-how relating to Plazomicin and haptens and polyclonal antibodies related directly to Plazomicin, whether or not patentable, which is Controlled as of the Effective Date or acquired during the Term by Achaogen.   1.2 Achaogen Materials shall mean the materials set forth in Exhibit A.   1.3 Achaogen Patents shall mean the Patents and Patent applications set forth in Exhibit B hereto.   1.4 Affiliate shall mean, with respect to a Party, any corporation, or other business entity which directly controls, is controlled by or is under common control with that Party. A person or entity shall be regarded as in control of another entity if it owns, directly or indirectly, fifty percent (50%) or more of the outstanding equity securities of the subject entity which is entitled to vote in the election of directors, or a fifty percent (50%) or greater interest in the net assets or profits of the subject entity if such entity is not a corporation.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.     1.5 Applicable Law shall mean all applicable provisions of all statutes, laws, rules, regulations, administrative codes, ordinances, decrees, orders, decisions, injunctions, awards judgments, permits and licenses of or from governmental authorities, including those relating to or governing the use or regulation of the subject item and the listing standards or agreements of any national or international securities exchange.   1.6 Assay shall mean an antibody-based immunoassay or immunoassays used for the  in vitro measurement of Plazomicin concentration in human blood and other body fluids,  [***], that (a) uses or otherwise would infringe Immunoassay Technologies, (b) is developed by Microgenics and its Affiliates under this Agreement, and (c) [***].   1.7 Commercially Reasonable Efforts shall mean efforts and resources normally utilized by a Party for a product owned by it or to which it has rights, which is of similar market potential at a similar stage in its product life, taking into account the competitiveness of the marketplace, the proprietary position of the product, the regulatory structure involved, the profitability of the applicable products, the relative benefit that accrues to actual and potential patients and other relevant factors; provided, that, in any event, Commercially Reasonable Efforts under this Agreement require that a Party (a) [***], (b) [***], and (c) [***].   1.8 Confidential Information shall mean all proprietary and confidential business, technical, scientific, and/or regulatory information relating to the Assay, Plazomicin, and/or the purpose of, or activities under, this Agreement, that is provided by or on behalf of a Disclosing Party to a Receiving Party hereunder, whether disclosed in writing or orally.   1.9 Control shall mean with respect to any (a) item of information, including know-how, or (b) intellectual property right, the possession (whether by ownership or license) by a Party of the ability to grant to the other Party access and/or a license as provided herein under such item or right without violating the terms of any agreement or other arrangements with any Third Party existing before or after the Effective Date.   1.10 Development and Manufacturing Phase shall mean that phase of the Research Program set forth in the Project Plan relating to the optimization of the Assay and the manufacture and validation of [***] ([***]) production lots of the Assay that meet the Specifications [***].   1.11 Feasibility Study Phase shall mean that phase of the Research Program set forth in the Project Plan comprising all studies conducted by Microgenics to establish the feasibility for developing the Assay by demonstrating (a) [***], (b) [***], (c) [***], (d) [***], (e) [***], and (f) [***].   1.12 First Commercial Sale shall mean (a) with respect to the Assay, the initial sale by or on behalf of Microgenics (or its Affiliates) of the Assay and (b) with respect to Plazomicin, the initial sale by or on behalf of Achaogen (or its Affiliates) of Plazomicin, in each case, to a Third Party in exchange for cash or some equivalent to which value can be assigned; provided, that a sale of the Assay or Plazomicin, as applicable, in connection with [***] of the Assay or Plazomicin, as applicable, or for [***] therefor will not constitute First Commercial Sale.   1.13 Good Clinical Practice or GCP shall mean the then current standard for clinical trials for assays, as set forth in the United States Federal Food, Drug and Cosmetics Act and applicable regulations

Page 2 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   promulgated thereunder, as amended from time to time and such standards of good clinical practice as are required by the European Union and other organizations and governmental agencies in countries where the Assay is intended to be sold, to extent such standards are no less stringent than United States GCP.   1.14 Good Laboratory Practice or GLP shall mean the then current standards for laboratory activities for assays, as set forth in the United States Federal Food, Drug and Cosmetics Act and applicable regulations promulgated thereunder, as amended from time to time and such standards of good laboratory practice as are required by the European Union and other organizations and governmental agencies in countries where the Assay is intended to be sold, to extent such standards are no less stringent than United States GLP.   1.15 Good Manufacturing Practices or GMP shall mean the then current standards for the manufacture of assays, as set forth in the United States Federal Food Drug and Cosmetics Act and applicable regulations promulgated thereunder, as may be amended from time to time and such standards of good manufacturing practice as are required by the European Union and other organizations and governmental agencies in countries where the Assay is intended to be sold, to extent such standards are no less stringent than United States GMP.   1.16 Immunoassay Technologies shall mean technologies, including any patentable or unpatentable intellectual property rights appurtenant thereto, Controlled by Microgenics or its Affiliates suitable for developing and manufacturing assays, calibrators and controls for application on  [***], including  [***] assay technology,  [***] technology,  [***] technology,  [***] immunoassay, the Microgenics Cell Line, and Microgenics [***] Antibodies.   1.17 Microgenics Cell Line shall mean those certain cell lines (a) that were developed under the Antibody Development Agreement, or (b) that produce Microgenics [***] Antibodies and are Controlled by Microgenics and listed in Exhibit C, as such Exhibit may be amended from time to time upon the mutual written agreement of the Parties.   1.18 Microgenics Know-How shall mean all proprietary, technical information, data and know-how relating to the Assay or Immunoassay Technologies and reagents for use therewith which are Controlled as of the Effective Date or acquired or developed during the Term by Microgenics or its Affiliates.   1.19 Microgenics [***] Antibodies shall mean [***] antibodies developed by, or Controlled by, Microgenics or its Affiliates and directed to Plazomicin.   1.20 Patent shall mean any existing or future: (a) national, regional or international patent or patent application in any jurisdiction (including any provisional, divisional, continuation, continuation-in-part, non-provisional, converted provisional, or continued prosecution application, any utility model, petty patent, design patent and/or certificate of invention), (b) any extension, restoration, revalidation, reissue, re-examination and extension (including any supplementary protection certificate and the like) of any of the foregoing patents or patent applications, and (c) any ex-U.S. equivalents corresponding to any of the foregoing.   1.21 Plazomicin shall mean Achaogen's aminoglycoside antibiotic that is in Phase 3 clinical development as of the Effective Date and having the chemical structure shown on Exhibit D, and [***] thereof, regardless of commercial name.

Page 3 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   1.22 Primary Countries shall mean (a) the countries set forth on  Exhibit E  and (b) any other country in the Territory which the Parties mutually agree in writing shall be a Primary Country in accordance with Section 4.2.5, in each case, for which the Parties intend to pursue initial registration, commercialization and launch of the Assay.   1.23 Project Plan shall mean the plan of work to be conducted under the Research Program pursuant to Section 2.1 (Project Plan) hereof as attached as Exhibit F.   1.24 Regulatory  Approval shall mean all authorizations, registrations or clearances with or by the appropriate Regulatory Authorities which are required for the marketing, promotion, pricing and sale of either the Assay or Plazomicin, as applicable, in any country or regulatory jurisdiction in the Territory.   1.25 Regulatory Authority shall mean any national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity involved in the granting of Regulatory Approval, including the United States Food and Drug Administration.   1.26 Research Program shall mean the collaborative program of research relating to the development of the Assay to be carried out by the Parties pursuant to this Agreement.   1.27 Secondary Countries shall mean all countries in the Territory, other than the Primary Countries.   1.28 Shortfall License shall mean a temporary, fully-paid up, royalty-free, worldwide non-exclusive license granted by Microgenics (including on behalf of its Affiliates as appropriate), under Section 4.3.2.3, to (a) the Immunoassay Technologies and (b) all other intellectual property rights (including Patent applications, Patents, trade secrets, copyrights, and trademarks) (i) of Microgenics (or its Affiliates as appropriate) arising out of the performance of this Agreement or the Antibody Development Agreement, or (ii) Controlled by Microgenics (or its Affiliates as appropriate) that are necessary or desirable for or used in the manufacture and commercialization of the Assay, which license would be for the manufacture, use, sale, offer for sale and import of the Assay. Such license shall be fully sub-licensable to any Third Party for purposes of manufacturing and commercializing the Assay (including the components thereof) under Section 4.3.2.3.   1.29 Specifications shall mean the specifications applicable to the Assay, as set forth on Exhibit G.   1.30 Territory shall mean the world.   1.31 Third Party(ies) shall mean any person(s) or entity(ies) other than Achaogen, Microgenics or their respective Affiliates.   1.32 Trademarks shall mean all registered and unregistered trademarks (including all common law rights thereto), service marks, trade names, brand names, logos, taglines, slogans, certification marks, Internet domain names, trade dress, corporate names, business names and other indicia of origin, together with the goodwill associated with any of the foregoing and all applications, registrations, extensions and renewals thereof throughout the world, and all rights therein provided by international treaties and conventions.

Page 4 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   1.33 Transfer License shall mean a royalty-bearing, worldwide exclusive license granted by Microgenics (including on behalf of its Affiliates as appropriate), under Section 9.4.4.1, to (a) the Immunoassay Technologies and (b) all Patent applications, Patents, trade secrets and other know-how, (i) of Microgenics (or its Affiliates as appropriate) arising out of the performance of this Agreement or the Antibody Development Agreement, or (ii) Controlled by Microgenics (or its Affiliates as appropriate) as of the termination date of this Agreement that are necessary for or used in the development, manufacture, and commercialization of the Assay, which license would be solely for the development, manufacture, use, sale, offer for sale and import of the Assay in connection solely with the use of Plazomicin. Such license shall be fully sub-licensable to any Third Party for purposes of manufacturing and commercializing the Assay (including the components thereof) [***].   1.34 Additional Definitions. Each of the following definitions is set forth in the Section of the Agreement indicated below.   Definition Section AAA 13.8.2 Abandoned Commercialization 4.2.7.1 Abandoned Development 4.2.7.1 Achaogen Preamble Achaogen Indemnified Parties 11.2 Achaogen Inventions 8.1 Agreement Preamble Alliance Manager 5.1.1 Antibody Development Agreement Recitals Assay Commercialization Plan 4.2.4 Audit Outcome 4.4.2 Back-up Supplier 4.3.2.2 Binding Forecast 4.2.2 Commercial Leader 5.3.1 Convicted Entity or Convicted Individual 10.4.4 Debarred Entity 10.4.2 Debarred Individual 10.4.1 Development Leader 5.3.1 Disclosing Party 12.1 Dispute 13.8.1 Effective Date Preamble Excluded Entity or Excluded Individual 10.4.3 FDA 10.4.5 FDA Disqualified/Restricted List 10.4.5 Force Majeure Event 13.1 Functional Leaders 5.3.1 Joint Project Team or JPT 5.3.1 JSC 5.2 [***] Products 8.1 Joint Patent 8.2.2 Launch Plan 4.2.4 Losses 11.1

Page 5 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   Definition Section Microgenics Preamble Microgenics Indemnified Parties 11.1 Microgenics Inventions 8.1 Minimum Threshold 4.2.3 Minimum Threshold Period 4.2.3 Party or Parties Preamble Plazomicin Commercialization Plan 4.2.1 Receiving Party 12.1 Regulatory Finding 3.3.1.2 Regulatory Leader 5.3.1 Responsible Party 8.3.1 Review Party 8.3.1 Supply Resumption Date 4.3.2.2 Term 9.1 Third Party Claims 11.1 VAT 7.3.2     2 Research and Development Collaboration   2.1 Project Plan. The Parties shall collaborate on the Research Program in accordance with the Project Plan, as set forth as Exhibit F. As may be necessary or reasonable from time-to-time, the JPT may suggest appropriate revisions to the Project Plan to the JSC for its review in accordance with Section 5.3.2 and, if approved by the JSC in accordance with Section 5.1, the Project Plan may be amended from time to time by the JSC.   2.2 Party Responsibilities.   2.2.1 General. Microgenics and Achaogen shall each perform their respective obligations under the Research Program, using Commercially Reasonable Efforts, in accordance with the Project Plan and in compliance with Applicable Law.   2.2.2 Achaogen. Achaogen shall supply to Microgenics,  [***], (a) Achaogen Materials, including Plazomicin and Plazomicin clinical patient samples, in such quantities as are set forth in Exhibit A or otherwise mutually agreed by the Parties or set forth in the Project Plan; and (b) all necessary and in Achaogen's possession Plazomicin pharmacological and biochemical information, including  [***] etc., to enable the JPT to correctly design the Assay and Microgenics to work with the appropriate Regulatory Authorities to secure Regulatory Approval for the Assay. Microgenics shall not transfer any portion of the Achaogen Materials to any Third Party or use the Achaogen Materials for any purpose other than the purposes of performing its obligations under, and in accordance with, this Agreement and the applicable Project Plan. Microgenics shall hold, store and transport all supplies of the Achaogen Materials in compliance with all Applicable Laws and  [***]. Microgenics shall maintain complete and accurate records relating to the disposition of all Achaogen Materials.   2.2.3 Microgenics. Subject to the provisions of this Agreement (including Article 3 (Regulatory Submissions and Meetings)), Microgenics shall be responsible for the research, development, manufacture and sale of the Assay. Microgenics shall manufacture the Assay according to the Specifications

Page 6 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   attached hereto as  Exhibit G (which may be amended from time to  time by the JSC in accordance with Section  5.1) and in accordance with the timelines set forth in the Project Plan. Without limiting the foregoing, Microgenics shall develop and commercialize the Assay such that it is capable of being run on no less than [***] ([***]) distinct [***] platforms, which [***] platforms shall be mutually agreed upon by the Parties in good faith.   2.3 Information Exchange, Records and Compliance.   2.3.1 Technology Transfer.  Achaogen shall provide Microgenics with all Achaogen Know-How  [***] reasonably necessary for Microgenics to carry out its responsibilities under the Research Program and to obtain Regulatory Approvals for the Assay. Microgenics shall provide Achaogen with all Microgenics Know-How  [***] reasonably necessary for Achaogen to carry out its responsibilities under the Research Program and to conduct clinical trials of Plazomicin. All information exchanged shall be subject to the confidentiality requirements set forth in Article 12 (Confidentiality) hereof.   2.3.2 Record Keeping/Compliance. During the Term and for a period of [***] ([***]) years thereafter (or such longer period of time as required by Applicable Laws), each Party shall maintain records in sufficient detail and in good scientific manner appropriate for obtaining and maintaining Regulatory Approvals. Achaogen shall have the right (either by itself or through a Third Party reasonably acceptable to Microgenics), during normal business hours and upon reasonable notice, to inspect records pertinent to Microgenics' obligations under this Agreement. To the extent such records contain Confidential Information of Microgenics, Achaogen shall maintain such Confidential Information disclosed therein in confidence in accordance with Article 12. Achaogen shall have the right to arrange for its employee(s) and/or consultant(s) involved in the activities contemplated hereunder, during normal business hours and upon reasonable notice, to discuss the development activities and results contemplated under this Agreement in detail with the technical personnel and consultant(s) of Microgenics. Each Party shall comply with all applicable GLP, GCP, GMP, ISO 9001 and ISO 13485:2003 requirements and other Applicable Laws in the conduct of the Research Program and in the activities contemplated under this Agreement, including the development, manufacture and commercialization of the Assay.   2.4 Installation and Training. Upon Achaogen's request, Microgenics shall, [***], install any necessary equipment and train appropriate staff at clinical sites designated by Achaogen for the performance of clinical trials by Achaogen, in connection with obtaining Regulatory Approval for Plazomicin, and in order to enable such sites to use the Assay in connection with such use of Plazomicin and provide training for such sites' personnel on how to operate such equipment. For clarity, [***] shall be [***] responsible for the costs of (a) any clinical trials conducted for purposes of obtaining Regulatory Approval for the Assay (as opposed to Regulatory Approval for Plazomicin) and (b) any activities conducted in a given country in the Territory following the receipt of Regulatory Approval for the Assay for such country (e.g. commercial activities).   2.5 Quality Agreement. No later than  [***]  ([***]) days after the Effective Date (or such later date as may be otherwise agreed upon by the Parties in writing), the Parties shall enter into a quality agreement defining the commitments of both Parties to ensure that the Assay and related services developed and commercialized under this Agreement satisfy the quality and regulatory requirements required by this Agreement.  Microgenics shall manage all Achaogen Materials (including clinical patient samples) according to customer property requirements described in such quality agreement.   2.6 BARDA Requirements. The Parties acknowledge and agree that Achaogen receives funding

Page 7 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   from the United States government through the Biomedical Advanced Research and Development Authority within the office of the Assistance Secretary for Preparedness and Response in the United States Department of Health and Human Services (BARDA) in connection with Achaogen's development of new antibacterial treatment of MDR gram-negative bacterial infection. In connection with the foregoing, the terms and conditions of this Agreement shall be subject in their entirety to the terms and conditions set forth on Appendix A of Exhibit H. In the event of any conflict between the terms and conditions of the main body of this Agreement and Appendix A of Exhibit H, Appendix A of Exhibit H shall control.   3 Regulatory Submissions and Meetings    3.1 Coordination. Achaogen and Microgenics shall [***] coordinate the therapeutic and diagnostic regulatory filings and communications with Regulatory Authorities in the Territory. Achaogen will be responsible for all activities regarding the Regulatory Approval of Plazomicin (and, as between the Parties, Achaogen shall retain ownership of all regulatory filings and Regulatory Approvals for Plazomicin), and, subject to the terms and conditions of this Agreement,  [***] will be responsible for all activities regarding the Regulatory Approval of [***] (and, as between the Parties, [***] shall retain ownership of all regulatory filings and Regulatory Approvals for [***]). For the avoidance of doubt, the Parties acknowledge and agree that, notwithstanding anything herein to the contrary, but subject to Section 3.2 and Section 4.2.7, (a) Achaogen shall have the sole discretion, at any time during the Term, to determine whether to conduct any clinical trial or make any regulatory filing, submission or correspondence with respect to Plazomicin; and (b) [***], subject to Section 4.2.7, at any time during the Term, to conduct any clinical trial (provided, that, in the event of a clinical trial that involves the use or administration of [***], [***]) or make any regulatory filing, submission or correspondence with respect to [***].   3.2 Reporting and Consultation. [***] shall keep [***] regularly informed in connection with the preparation of all regulatory filings, submissions or correspondence related to  [***] and  [***] shall have the right to review and comment on any regulatory filing, submission or correspondence related to [***] (including any [***]), to be submitted to any health authority by [***]. In connection therewith, [***] shall provide to [***] for review the text of any such regulatory filing, submission or correspondence for [***] prior to submission and  [***] shall consider in good faith all comments provided by  [***]; provided that any disputes with respect to comments provided by [***] shall be resolved by the JSC. In addition, [***] shall consult with [***] with respect to all material matters required for regulatory filings, submissions or correspondence, under this Agreement; provided, however, that, subject to Section 3.1,  [***] shall have sole responsibility hereunder for all regulatory filings (including  [***] or their ex-United States equivalent), submissions or correspondence, including preparing and analyzing all  [***] information required pursuant to any and all Applicable Laws, and preparing and analyzing any additional data and information required by any applicable Regulatory Authority (other than any data or information regarding [***]). Upon written request from [***], [***] shall promptly provide to [***] copies of all submitted regulatory filings, submissions, and material correspondence to and from any Regulatory Authorities; provided, that [***] may redact from such copies information that does not relate to the Assay, Plazomicin or this Agreement and the activities hereunder.   3.3 Correspondence from Regulatory Authority.   3.3.1.1 If either Party receives any material communication from the Regulatory Authorities relating to  [***] or has any meetings (telephonic or in person) with any Regulatory Authority for any material reason regarding [***], such Party shall promptly notify the other Party and, upon mutual agreement, decide whether it is necessary for the other Party to be present in any

Page 8 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   discussions with the Regulatory Authorities regarding  [***]; provided,  however, that, notwithstanding the foregoing, Achaogen shall have the right to participate in (a)  [***], (b)  [***], or (c)  [***] pertaining to Achaogen Materials or Achaogen Know-How. For clarity, as between the Parties,  [***] shall be responsible for leading any meetings or other discussions with the  [***].  [***]  shall not make any representations or discuss the uses of  [***] with any Regulatory Authority except to the extent it relates to [***]. Neither Party shall disclose, without the other Party's prior written consent, Confidential Information of such other Party in any regulatory filing, submission or correspondence or at a meeting with any Regulatory Authority, except to the extent required by Applicable Laws or otherwise under the Project Plan.

3.3.1.2 In addition, Microgenics shall notify Achaogen within [***] ([***]) business days of any regulatory finding or violation identified by a Regulatory Authority that may potentially impact the activities contemplated under the Project Plan or the development, manufacture or commercialization of the Assay (a Regulatory Finding). With respect to each Regulatory Finding, if any, Microgenics shall provide (1) (a)  [***], or (b)  [***], or (c)  [***] and (2) Microgenics' [***]; provided, that, in each case of clauses (a), (b), and (c), Microgenics' may redact from such copies or reports information that does not relate to the Assay, Plazomicin or this Agreement and the activities hereunder. Without limiting the next to last sentence of Section 3.5, Microgenics shall notify Achaogen promptly of any notification or information received from a Regulatory Authority, that: (i) would reasonably be expected to impair the integrity or reputation of Plazomicin or the Assay; (ii) raises any material concerns regarding the safety or efficacy of Plazomicin or the Assay; (iii) indicates or suggests a potential material liability of either Party to Third Parties in connection with Plazomicin or the Assay; (iv) is reasonably likely to lead to a recall or market withdrawal with respect to Plazomicin or the Assay; or (v) [***].

3.4 Package Insert Information.  Notwithstanding anything to the contrary contained herein, but subject to any applicable review and comment rights of the other Party, and dispute resolution escalation procedures set forth in Section 13.8, [***] shall have final decision making authority on all package insert language directed  [***], and [***] shall have final decision making authority on all Assay package insert language directed [***].   3.5 Filings.  On a country-by-country basis, a Regulatory Approval from the applicable Regulatory Authority(ies) is required for the Assay prior to launch in such country. Upon Achaogen's request, Microgenics shall reasonably cooperate with Achaogen with respect to any regulatory filings, submissions, or correspondence made by Achaogen related to Plazomicin in any country in the Territory, including promptly providing data, information and advice regarding the Assay, including the manufacture (including any recall information) and use thereof. This Agreement generally assumes that there is a current 510(k) pathway for obtaining Regulatory Approval for the Assay; provided, that, if a PMA pathway is required, the Parties acknowledge and agree that [***] reviewed by the Parties and may need to be adjusted to the extent agreed upon between the Parties and subject to the proviso in the foregoing sentence. For the avoidance of doubt, Achaogen shall have sole right to control any such regulatory filings, submissions, correspondence or other matters related to Plazomicin including any joint submissions or filings, but not [***], and to communicate with Regulatory Authorities related thereto. No later than [***] (or such later date as otherwise agreed to by the Parties), the Parties shall enter into an agreement setting forth the Parties respective responsibilities for adverse event and complaint reporting, the exchange of safety data and, to the extent agreed by the Parties to be appropriate and relevant, recall matters.   3.6 Right of Reference. [***] hereby grants to [***] a non-exclusive, non-transferable (except

Page 9 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   in connection with a permitted assignment, sublicense or subcontract) right of reference (as defined in 21 CFR 314.3(b)) with respect to clinical trial data and results related to [***], solely as necessary for [***] to prepare, submit and maintain regulatory submissions related to  [***] and Regulatory Approvals for  [***].  [***] hereby grants to  [***] a non-exclusive, non-transferable (except in connection with a permitted assignment, sublicense or subcontract) right of reference (as defined in 21 CFR 314.3(b)) with respect to [***] clinical trial data (including  [***]), information (including the  [***], as applicable) and results related to  [***], solely as necessary for [***] to prepare, submit and maintain regulatory submissions related to [***] and Regulatory Approvals for [***].    3.7 [***]. In connection with the  [***] of  [***] in any  [***] in the Territory,  [***] shall  [***] of the  [***] in [***] in [***] with such [***] of [***]. The Parties shall discuss in good faith (via the JPT) and mutually agree as to [***] shall [***] for [***], which discussion and decision shall occur no later than [***] ([***]) year [***]. In the event that the Parties later agree to [***] for [***] in a [***], the Parties (through the JPT and JSC) shall amend the Project Plan to [***], subject to [***], and [***] shall [***].   4 Manufacture and Commercialization of Assay   4.1 Manufacture. Except as provided elsewhere in this Agreement, including Section 4.3 (Supply) and Section 9.4.4 (Effect of Termination), during the Term, Microgenics shall be solely and exclusively responsible for the worldwide manufacture of the Assay in accordance with GMP standards, the Specifications and Applicable Law. For clarity, from and after the expiration or termination of this Agreement, nothing in this Agreement shall restrict Microgenics from developing, manufacturing or commercializing the Assay as and to the same extent as any third party.   4.2 Commercialization. Upon successful completion of the Development and Manufacturing Phase and upon receipt of the applicable Regulatory Approval in a given country in the Territory required in order to sell the Assay in such country, Microgenics shall use Commercially Reasonable Efforts to exclusively commercialize and market the Assay, under the Thermo Scientific tradename and packaging and utilizing Microgenics' and its Affiliate's commercial infrastructure, in each country within the Territory in which Achaogen is commercializing Plazomicin for so long as Achaogen is commercializing Plazomicin in such country. Solely to the extent Achaogen elects to promote an assay which may be capable of measuring Plazomicin in a given Primary Country ([***]) in the Territory, and subject to receipt and conditions of any applicable Regulatory Approvals, Achaogen shall prioritize the promotion of the Assay relative to any other assay which may be capable of measuring Plazomicin, in its marketing and sales efforts in such Primary Country; provided, however, that in the event (a) Microgenics [***] is unable to supply the Assay in quantities sufficient to meet each applicable Binding Forecast, including [***], or (b) [***], Achaogen may prioritize the promotion of assays capable of measuring Plazomicin in the affected country(ies). For clarity, and notwithstanding anything to the contrary in this Agreement, including this Section 4.2, Achaogen expressly reserves and retains the right to, directly or indirectly (including through contractors or collaborators), research, develop, manufacture, use or commercialize assays capable of measuring Plazomicin other than the Assay; provided, that, Achaogen may not, directly or indirectly (including through contractors or collaborators) commercialize any immunoassay [***], other than the Assay in accordance herewith, [***]; provided, further, that the restriction on Achaogen's right to commercialize immunoassays [***], other than the Assay, shall be of no force or effect if Microgenics is unable to supply the Assay for [***] ([***]) days at any time [***] or if the Parties mutually determine that Microgenics will not be able to supply the Assay. Additional commercialization and supply terms may be added to this Agreement in the form of an amendment. Without limiting the foregoing:

Page 10 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   4.2.1 Plazomicin Commercialization Plan. As soon as commercially reasonable, but no later than [***] ([***]) days after the Effective Date of this Agreement, Achaogen shall share its global commercialization plans for Plazomicin with Microgenics (Plazomicin Commercialization Plan). The Plazomicin Commercialization Plan shall include the list of  countries consistent with the Primary Country list for commercialization of Plazomicin, anticipated launch timing, initial volume forecasts and such other information as may be determined by the JPT. Microgenics will develop timelines on a country basis to the extent it receives adequate Plazomicin Commercialization Plan details with respect to a given country. Achaogen agrees to keep such Plazomicin Commercialization Plan updated via regular communication with the JSC. For clarity, (a) the Plazomicin Commercialization Plan shall be Confidential Information of Achaogen hereunder, and (b) Achaogen [***] in preparing and conducting activities under the Plazomicin Commercialization Plan.

4.2.2 Volumes and Pricing.

4.2.2.1 On a regular basis, beginning at least [***] ([***]) months prior to the anticipated date of the First Commercial Sale of Plazomicin in the Territory, Achaogen will share confidential, non-binding (except as described below) good faith volume forecasts in units for the Assay and updates thereof in the Plazomicin Commercialization Plan through the JSC in order for the Parties to develop a  [***] market introduction including achieving Regulatory Approval [***] for the Assay in all relevant countries and regions. Thereafter, and on a  [***] basis, Achaogen shall supply Microgenics with a confidential, good faith rolling  [***]  ([***]) month forecast (in units, broken-down by country (or regions)) as to Achaogen's estimated unit demand for worldwide commercial demand for the Assay (it being agreed and understood that such forecasts shall be Confidential Information of Achaogen hereunder); provided, however, only the first [***] ([***]) months of each [***] ([***]) month forecast shall be binding (a Binding Forecast) and the remaining [***] ([***]) months of such forecast shall be non-binding (for clarity, when each [***] forecast update is provided, [***] of the previous forecast (i.e., [***] of the Binding Forecast previously submitted) shall not be changed as they become [***] of the current forecast and [***] of the current Binding Forecast). For clarity, except as otherwise provided in this Agreement with respect to the Binding Forecast, Achaogen shall have no liability whatsoever with respect to such forecasts, including no liability for any Assay manufactured or materials ordered by or on behalf of Microgenics based on such forecasts. Microgenics shall supply the quantities of the Assay set forth in the applicable Binding Forecasts and shall use Commercially Reasonable Efforts to ensure that [***], in each case, in accordance with Section 4.3; provided, however, [***].

4.2.2.2 The Parties acknowledge and agree that  [***] shall have  [***] with respect to the pricing of the Assay in any country in the Territory; provided, however,  [***] shall  [***] to price the Assay in a given country at an amount no greater than (i) (a) $[***] in the United States or (b) $[***] in any other country, or (ii)  [***] percent ([***]%) of the applicable list price of any other [***] assay marketed in such country; provided, further, that [***] shall [***] to take into account [***]. In the event that (x) [***] to price the Assay at an amount greater than the foregoing subclauses (i) and (ii), then the JSC shall review the available data and discuss the Assay price in accordance with Section 5.2.1(h), and/or (y) the Assay pricing [***], the JSC will review the available data and discuss various alternative solutions.

4.2.3 Minimum Thresholds.  In the event that, during the applicable Minimum Threshold Periods (as defined below), Microgenics does not receive the applicable Minimum Threshold Revenue (as defined below) during a given calendar year, Achaogen agrees to pay  [***] Microgenics for such region during such calendar year (on a prorated basis, as applicable). For purposes of this Section 4.2.3,

Page 11 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   4.2.3.1 The First Minimum Threshold Period shall begin on the  [***]  ([***]) anniversary of the date on which the First Commercial Sale of the Assay in [***] occurred and shall end on the [***] ([***]) anniversary of the date on which the First Commercial Sale of the Assay in [***] occurred. For example, if the First Commercial Sale of the Assay in [***] occurred on [***] then the First Minimum Threshold Period would begin on [***] and would end on [***];

4.2.3.2 The Second Minimum Threshold Period shall begin on the [***] ([***]) anniversary of the earlier of the date on which the First Commercial Sale of the Assay occurred in (i) [***] of the following countries - [***] (each an [***] Country); or (ii) an  [***] Country and  [***]; or (iii)  [***]  ([***]) of the Primary Country list ([***]) (subclause (i), (ii), or (iii), as applicable, the Start Date), and shall end on the earlier of (a) the  [***]  ([***]) anniversary of the Start Date or (b) the date this Agreement expires or terminates;

4.2.3.3 Minimum Threshold Revenue shall mean, with respect to each of the First Minimum Threshold Period and the Second Minimum Threshold Period, USD $[***] of annual gross revenue received by Microgenics from sales of the Assay in the Territory (for clarity, during any overlap between the First Minimum Threshold Period and the Second Minimum Threshold Period, the total Minimum Threshold Revenue would be USD $[***]); provided, however, that the Minimum Threshold Revenue (i) shall be determined by [***] for a given Assay, less [***] directly associated with such sale and Assay and permitted to be taken in accordance with generally accepted accounting principles in the United States, and (ii) that in the event the Minimum Threshold Period begins or ends during a given calendar year, the Minimum Threshold Revenue for such calendar year shall be prorated accordingly.

4.2.4 Market Introduction. The Parties will reasonably agree regarding details related to commercialization of the Assay once the [***] are clarified by Achaogen in the Plazomicin Commercialization Plan. Within [***] ([***]) months of receiving the initial Plazomicin Commercialization Plan, Microgenics will provide Achaogen with (a) a detailed market introduction plan for the Assay (the Launch Plan) and (b) a global commercialization plan for the Assay, in a form to be determined by the JSC (the Assay Commercialization Plan). During the Term, Microgenics shall provide Achaogen [***] with (i) an updated Launch Plan [***], and (ii) an updated Assay Commercialization Plan  [***]. For clarity, (i) the Launch Plan and Assay Commercialization Plan shall be Confidential Information of Microgenics hereunder, and (ii) Microgenics is  [***] in preparing and conducting activities under the Launch Plan and Assay Commercialization Plan.

4.2.5 Geographies. Other than the Primary Countries set forth on Exhibit E, the Parties shall mutually agree upon any Secondary Countries where Achaogen plans to introduce Plazomicin, which such Secondary Countries shall thereafter be deemed to be Primary Countries and included in the Plazomicin Commercialization Plan and the Assay Commercialization Plan, in all cases no later than [***] prior to the anticipated launch of Plazomicin in any such country; provided, however, the parties agree that actual product registration may take longer than [***] ([***]) months.

4.2.6 Selling, Marketing and Customer Support to Clinical Labs.  Microgenics will establish and maintain a commercial infrastructure for the supply of the Assay, as well as adequate product support, customer support and regulatory support in each market where the Assay is introduced, including [***]. For clarity, Achaogen [***] the Assay to physicians and other prescribers and related individuals and organizations; provided, that, for clarity, Microgenics [***] of the Assay to any such physicians or other prescribers or related individuals and organizations.

Page 12 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   4.2.7 Abandoned or Uninitiated Development or Commercialization of Assay.

4.2.7.1 If, during the Term, Achaogen determines in good faith that Microgenics has ceased to develop, commercialize and market the Assay in a specific country within the Territory in which Achaogen has obtained or is in the process of obtaining Regulatory Approval for Plazomicin for a period of at least [***] ([***]) months (Abandoned Commercialization or Abandoned Development, as applicable), then Achaogen may deliver to Microgenics written notice that Achaogen deems Microgenics to have Abandoned Commercialization. If Achaogen delivers such written notice to Microgenics, such notice shall set forth the basis for Achaogen's good faith determination. If Microgenics disagrees with Achaogen's determination that Microgenics has Abandoned Commercialization, then the Parties will meet within  [***] ([***]) business days to discuss such disagreement. If the Parties cannot agree after such discussion, then the terms of Section 13.8 shall apply to resolve such Dispute.

4.2.7.2 If it is finally determined pursuant to the procedures set forth in Section 4.2.7.1 that Microgenics has Abandoned Commercialization, then, within [***] ([***]) business days of such determination, Microgenics will commercialize and market the Assay for  [***] ([***]) months after the written determination is received. After the [***]  ([***]) months period has expired, Microgenics will continue to supply the Assay to Achaogen or its distributor pursuant to the terms of a supply agreement that the Parties will negotiate during the first [***] ([***]) months of the [***] month period described in the prior sentence; provided, that such supply agreement shall include an initial (i.e., for a period of no less than  [***]  ([***]) months) supply price that is no greater than  [***]  ([***]%) of the lowest price at which Microgenics has made the Assay available to its distributors, or any Third Party if there is no distributor, in the affected country.  Microgenics shall  [***] promptly assist Achaogen (and/or its designee) in obtaining all necessary Regulatory Approvals and/or modifying and/or transferring existing Regulatory Approvals to enable Achaogen (and/or its designee) to develop, make, have made, use, market, distribute, import, sell and offer for sale the Assay ([***]) in any applicable country.

4.2.7.3 Solely in the event of Abandoned Development, the Parties acknowledge and agree that this Agreement does not supersede Section 5.3 of the Antibody Development Agreement and that Achaogen reserves all of its rights under Section 5.3 of the Antibody Development Agreement, including in the event of Abandoned Development.

4.3 Supply.   4.3.1 Clinical Supply. Microgenics shall supply to Achaogen the amount of Assay ordered by Achaogen, if any, for use in any clinical trials or other development of Plazomicin in accordance with the delivery and shipment terms set forth in the Project Plan to the extent applicable. Achaogen shall provide to Microgenics confidential, non-binding good faith clinical trial and other development supply forecasts for each [***] ([***]) month period starting on [***] and [***] of each calendar year and shall deliver each forecast in writing at least [***] ([***]) days prior to the commencement of the applicable [***] ([***]) month period. The Parties shall agree on the exact date for the delivery of such Assay. Achaogen shall reimburse Microgenics at (a) a price of USD $[***] per patient result used to make diagnostic decisions for the applicable patient or (b) in the event the Assay is being commercialized at the time of supply, [***]; provided, however, in each case, if Microgenics utilizes any data from any clinical trial or other study conducted by Achaogen with Assay supplied under this Section 4.3.1, Achaogen shall have no obligation to reimburse Microgenics for such Assay.

Page 13 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   4.3.2 Continued Supply.

4.3.2.1 Microgenics shall ensure the continued worldwide supply of the Assay in quantities at least sufficient to meet each applicable Binding Forecast. Without limiting the foregoing, Microgenics agrees to maintain a safety stock of rare reagents sufficient to meet each applicable Binding Forecast for the Assay. Microgenics shall provide Achaogen at least [***] ([***]) months (or [***]) prior written notice of any possible shortfall in meeting each applicable Binding Forecast or other commercial demand for the Assay, and the Parties shall promptly meet and discuss all reasonable commercial resolutions if Microgenics is unable to assure supply as needed to meet each applicable Binding Forecast pursuant to the terms set forth in Section 4.3.2.2.

4.3.2.2 In addition, in order to ensure security of supply of the Assay, within  [***]  o f Microgenics' receipt of the first Regulatory Approval for the Assay in any country in the Territory, Microgenics shall designate [***] (the Back-up Supplier) which such Back-up Supplier shall be and remain qualified as a manufacturer of the Assay for the supply of the Assay for sale in the Territory. Microgenics shall [***] ensure that the Back-up Supplier can supply the Assay for sale in the Territory within [***] days. Microgenics will develop a manufacturing transition plan that will highlight [***] needed to complete the transition to the back-up supplier. This plan will be presented to the JSC prior to first commercial launch of the Assay.

4.3.2.3 If, for any reason, [***], both Microgenics and the Back-up Supplier (as applicable) are unable to supply the Assay in quantities sufficient to meet the quantities of the Assay either (a) as set forth in each applicable Binding Forecast or (b) based on such other measure of commercial demand as agreed to by the Parties in writing, in either case, during any given  [***]  ([***]) month period for a given country in the Territory, then Microgenics hereby grants Achaogen or its designee a Shortfall License, which license shall survive until [***] ([***]) months following the date that either Microgenics or the Back-up Supplier (as applicable) is in a position again to fulfill such demand (as such positioning is demonstrated [***]) (the Supply Resumption Date). The Shortfall License shall expire automatically [***] ([***]) months after the Supply Resumption Date; provided, however, that (a) Achaogen shall be entitled to use, sell, offer for sale, and import any assay that are in inventory prior to the expiration of the Shortfall License (even if such activity occurs after expiration of the Shortfall License). Additionally, [***], Microgenics shall (i) make its personnel available for a reasonable period of time (not to exceed  [***]  ([***]) months) to effect a successful technology transfer with respect to the manufacture and commercialization of such Assay under the terms of this paragraph, (ii) provide Achaogen with copies of the physical embodiment of all processes, protocols, procedures, methods, tests and other intellectual property rights licensed to Achaogen under the Shortfall License, as applicable, related to Assay (including the manufacture thereof), (iii) supply [***] (including [***]) reasonably required to perform [***] as may be required by the applicable Regulatory Authorities, and upon request by Achaogen,  [***], provide Achaogen (and/or its designee) with  [***] related to the Assay, and (iv) promptly assist Achaogen (and/or its designee) in obtaining all necessary Regulatory Approvals and/or modifying and/or transferring existing Regulatory Approvals to enable Achaogen (and/or its designee) to develop, make, have made, use, market, distribute, import, sell and offer for sale the Assay ([***]).

4.4 Audit Rights.   4.4.1 [***] during the Term, commencing on the  [***] ([***]) [***] of the Effective Date, Achaogen shall have the right to inspect and audit  [***] per calendar year (either by itself or through a Third Party reasonably acceptable to Microgenics) the Assay manufacturing process, facilities, procedures,

Page 14 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   and records upon reasonable notice (which shall be no less than [***] ([***]) calendar days prior notice, unless a shorter period is mutually agreed to by the Parties), and during normal business hours. Notwithstanding the foregoing, Achaogen shall have the right to conduct for cause audits (either by itself or through a Third Party reasonably acceptable to Microgenics)  [***] during normal business hours of the [***], including in the event of a failure to supply the Assay as specified under Section 4.3.2. Any information shared with Achaogen or a Third Party under this Section 4.4.1 shall be considered Confidential Information. In connection with any such inspection or audit, Microgenics shall have no obligation to provide Achaogen and/or a Third Party access to Microgenics' Confidential Information related to any product other than the Assay.    4.4.2 Additionally, during the Term, Microgenics shall inform Achaogen within [***] ([***]) business days after receipt of any notice of an audit or inspection by ay Regulatory Authority which directly or indirectly relates to the Assay or the Assay manufacturing or distribution operations and Microgenics shall promptly provide to Achaogen in writing the results of any such audit or inspection within [***] ([***]) business days of receipt, including (a) a copy of any inspection reports, Form 483s, warning letters or similar such reports or warnings (Audit Outcome), to the extent such Audit Outcome solely addresses the Assay, or (b) a summary of such Audit Outcome, including verbatim text copies of portions thereof pertaining to the Assay, to the extent such Audit Outcome addresses the Assay and other matters, or (c) a summary of such Audit Outcome, to the extent that the Assay is not mentioned in such Audit Outcome; provided, that, in each case of clauses (a), (b), and (c), Microgenics' may redact from such copies or reports information that does not relate to the Assay, Plazomicin or this Agreement and the activities hereunder, and a summary of Microgenics proposed strategy for addressing any issues or violations noted during the course of such audit or inspection.   4.5 Labeling.   4.5.1 Assay Labeling. Microgenics shall be responsible for ensuring that all Assay packaging and labeling are in compliance with its Regulatory Approvals and Applicable Law.   4.5.2 Information for Labeling and Promotional Materials for Plazomicin.  At the request of Achaogen, Microgenics shall provide to Achaogen such information related to the Assay which is in Microgenics' possession, for Achaogen's use and reference in the packaging and labeling (including package insert) and promotional materials for Plazomicin.

4.5.3 Changes to Labeling. Achaogen will promptly notify Microgenics of any changes to Plazomicin labeling relevant for the Assay, including  [***].  [***], such changes will be implemented by Achaogen with  [***] in order to allow Microgenics to change any labeling on the Assay as a result of such changes to Plazomicin labeling. Similarly, Microgenics will promptly notify Achaogen of any changes to the Assay labeling, and Microgenics will implement such changes with [***] in order to allow Achaogen to change any labeling on Plazomicin as a result of such changes to the Assay labeling; provided, however, that Microgenics shall not make any such changes directed to Plazomicin (including, [***]) or which would otherwise require a change to the labeling for Plazomicin, without Achaogen's prior written approval.

5 Governance.   5.1 Alliance Managers.   5.1.1 No later than [***] ([***]) days after the Effective Date, each of the Parties shall

Page 15 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   appoint one (1) representative as its alliance manager (Alliance Manager). The Alliance Managers shall have the right to attend all JSC and JPT meetings as non-voting participants and may bring to the attention of the JSC or JPT any matters or issues either of them reasonably believes should be discussed, and shall have such other responsibilities as set forth in Section 5.1.2 or as the Parties may mutually agree. Each Party may replace its Alliance Manager at any time or may designate different Alliance Managers by notice in writing to the other Party.    5.1.2 The Alliance Managers shall have responsibility for creating and maintaining a constructive work environment between the Parties. Without limiting the generality of the foregoing, each Alliance Manager shall:   5.1.2.1 identify and bring disputes and issues, including disputes that cannot be resolved by the JPT, that may result in disputes to the attention of the JSC in a timely manner, and function as the point of first referral in all matters of conflict resolution. In doing so, it is not intended that the Alliance Manager(s) act as a substitute for, or insert any delay in, the formal dispute resolution mechanisms set forth in Section 13.8, but rather that the Alliance Manager(s) shall endeavor to maintain a positive and constructive relationship between the Parties at the working level;   5.1.2.2 provide a single point of communication for seeking consensus both internally within the Parties' respective organizations and between the Parties;

5.1.2.3 plan and coordinate cooperative efforts, internal communications and external communications between the Parties with respect to this Agreement; and

5.1.2.4 take responsibility for ensuring that meetings and the production of meeting agendas and minutes occur as set forth in this Agreement, and that relevant action items resulting from such meetings are appropriately carried out or otherwise addressed.

5.2 Joint Steering Committee. The Parties agree that the Research Program shall be managed by a Joint Steering Committee (JSC) and that the JSC shall otherwise have responsibility for the general oversight of activities hereunder. No later than [***] ([***]) days after the Effective Date, each of the Parties shall appoint two (2) representatives to the JSC. The JSC shall be led by two (2) co-chairs, one (1) appointed by Microgenics and one (1) appointed by Achaogen. The JSC will make decisions by consensus, with Microgenics and Achaogen each having one vote. In the event of an impasse, the matter shall be resolved pursuant to Section 5.2.3 (Decision-Making). A Party may change any of its representatives at any time by giving [***] ([***]) days prior written notice to the other Party.   5.2.1 Responsibilities. In addition to its general responsibility to oversee and coordinate the development of the Assay according to the Project Plan and to assure the regular flow of information between the Parties, the JSC shall:   (a) develop the Project Plan, monitor the progress of the Research Program, and review and approve all proposed changes to the Project Plan;   (b) amend the Specifications for the Assay;   (c) review and approve the [***] in accordance with Section [***] hereof;   (d) oversee the activities of the JPT;   (e) review and approve the most appropriate regulatory pathway for obtaining Regulatory

Page 16 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.     Approval of the Assay;   (f) review and approve the contents of all applications for Regulatory Approval and related and supporting submissions to Regulatory Authorities;   (g) develop and manage clinical samples supply;   (h) discuss pricing policy for the Assay in the Territory, including  [***] and similar matters, to the extent permitted under Applicable Law; provided that, for clarity, [***];   (i) resolve disputes escalated by the Alliance Managers; provided that, if after [***], the JSC is unable to resolve any such dispute, such dispute shall be resolved in accordance with Section 5.2.3.2;   (j) confirm completion of each event described in Section 7.1 if the Joint Project Team has not agreed that a Milestone has been completed; and   (k) manage and coordinate the supply and commercialization of the Assay, including the initial commercial launch of the Assay and monitoring the progress of the Assay Commercialization Plan and Launch Plan.   5.2.2 Meetings. The JSC shall meet at least [***] during the Term at such place and time as is agreed upon by the Parties; provided, however, that in the event of an emergent situation, including a situation in which a decision by the JSC is required, a meeting shall be held within [***] ([***]) days after written request for such meeting by either Party. Meetings of the JSC may be conducted in person, by telephone or videoconference as agreed by the JSC or the Parties. When held in person, the location of the meetings shall alternate between Achaogen's facilities and Microgenics' facilities, unless otherwise mutually agreed by the Parties. The Alliance Managers shall be responsible for planning and scheduling the meetings and preparing the agenda. The Alliance Managers will record the minutes of each meeting (alternating between Achaogen and Microgenics). Minutes of each meeting of the JSC shall be exchanged for review, comment and approval by the members; provided that, if after [***] ([***]) days following the distribution of the minutes, neither Party has raised any objection, the minutes shall be deemed to have been approved by the Parties. Thereafter, the minutes shall be signed by the co-chairs and distributed to each of the Parties. Additionally, upon invitation by the JSC, the Functional Leaders (or other JPT members) may attend JSC meetings as non-voting members, and each JSC member may reasonably invite other guests to the meetings, in order to discuss special technical or commercial topics relevant to the applicable agenda; provided, that any guests are subject to the confidentiality provisions set forth in Article 12 (Confidentiality).   5.2.3 Decision-Making.   5.2.3.1 All decisions of the JSC shall be made in good faith in the interest of furthering the purposes of this Agreement and the JSC members shall use good faith efforts to make decisions unanimously.   5.2.3.2 If the JSC is unable to agree on any matter after good faith attempts to resolve such disagreement [***], then for matters that are [***], the JSC may refer the disagreement to a meeting between a senior executive (other than a JSC member) representing each Party (currently [***] for Achaogen and [***] for Microgenics) which meeting shall take place as soon as practicable, but in no event later than [***] ([***]) days after the date of the relevant referral. If the senior executives for Achaogen and Microgenics cannot resolve such disagreement over such [***] matter in a mutually acceptable manner within  [***]  ([***]) business days after such meeting then the matter shall be decided in accordance with Section 13.8.2. Notwithstanding the foregoing, except as otherwise provided in, and subject to the terms and conditions of, this Agreement: (a) [***], with appropriate consideration of the interests of [***], will have [***] that impact the development,

Page 17 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   manufacture or marketing of [***] and (b) [***], with appropriate consideration of the interests of [***], will have [***] that [***] impact the development, manufacture or marketing of [***]; provided, that, [***] shall not have decision-making authority regarding (i) [***], or (ii) [***], which such decisions shall require the mutual agreement of the Parties, or (iii) [***] (which the Parties acknowledge will be ultimately dictated by [***]), or (iv) [***].    5.2.4 Expenses. Microgenics and Achaogen shall be responsible for all expenses incurred by its JSC members in connection with performing their duties hereunder, including all costs of travel, lodging and meals.   5.2.5 No Authority to Amend. For the avoidance of doubt, the JSC (and any Party exercising decision-making authority under Section 5.2.3.2) shall not have the authority to amend this Agreement, but the JSC shall have authority to amend the Project Plan and the Specifications as expressly set forth herein (and, for clarity, [***] shall not have decision-making authority with respect to any [***]).   5.3 Joint Project Team; Functional Leaders.   5.3.1 Formation. The Parties shall form a joint project team (the Joint Project Team or JPT). The JPT shall be comprised of a total of six (6) project team members from Microgenics and Achaogen, with Microgenics and Achaogen each designating a development leader, a regulatory leader, and a commercial leader (respectively, the Development Leader, the Regulatory Leader and the Commercial Leader, and collectively, the Functional Leaders) who shall be the principal point of contact for each Party for matters relating to its respective function, and shall be responsible for implementing and coordinating, on a day-to-day basis, all activities and facilitating the exchange of information between the Parties regarding the Project Plan for his or her function. Notwithstanding the foregoing, the Regulatory Leaders and Commercial Leaders may be appointed at such time as the Parties deem appropriate to facilitate the development of the Assay and a successful commercial launch of Plazomicin and the Assay.   5.3.2 Responsibilities. The JPT shall have responsibility for coordinating all development, regulatory, commercial and other business and technical activities under this Agreement. In addition to its general responsibility to deliver the development of the Assay according to the Project Plan and to assure the regular flow of information between the Parties, the JPT shall:     (a) recommend changes to the Project Plan, Launch Plan and Assay Commercialization Plan to the JSC,   (b) monitor the activities vs budget to the JSC,   (c) recommend changes to the Specifications for the Assay to the JSC;   (d) communicate progress to the JSC;   (e) plan the regulatory pathway for obtaining Regulatory Approval of the Assay; and   (f) prepare all applications for Regulatory Approval and related and supporting submissions to Regulatory Authorities.   5.3.3 Members. No later than [***] ([***]) days after the Effective Date, each Party shall provide the other with the names of its JPT members and Functional Leaders (other than the Regulatory Leaders and Commercial Leaders). Microgenics and Achaogen may replace its JPT members and Functional Leaders at any time and for any reason upon written notice to the other Party.   5.3.4 Sub-Teams. The JPT and Functional Leaders may delegate tasks and

Page 18 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   responsibilities to sub-managers, working groups and other team members as they deem appropriate to efficiently and effectively perform their respective obligations hereunder.   5.3.5 Meetings. The JPT shall meet as soon as practicable after the Effective Date and thereafter during the performance of the Project Plan, at least [***], and at such additional times as the JPT or the Parties reasonably deem appropriate; provided, that, following the completion of the Project Plan, the JPT shall continue to meet no less frequently than [***]. Meetings of the JPT may be conducted in person, by telephone or videoconference as agreed by the JPT or the Parties. Additionally, the JPT and the Functional Leaders (or their designees) shall maintain close regular communications with each other as to the status of the ongoing and planned activities under the Project Plan, Launch Plan and Assay Commercialization Plan. Each JPT member may reasonably invite other guests to the meetings, in order to discuss special technical or commercial topics relevant to the applicable agenda; provided, that any guests are subject to the confidentiality provisions set forth in Article 12.   5.3.6 No Authority to Amend.  Neither the JPT nor the Functional Leaders (or their designees) shall have authority to amend this Agreement or the Project Plan, but may make recommendations regarding such amendments to the JSC.   5.3.7 Dispute Resolution. The JPT and the Functional Leaders will cooperate with each other and work in good faith to resolve any disagreements between them or their respective teams. Any such disagreements that are not resolved by the JPT shall be raised to the Alliance Managers for internal escalation if needed.   5.3.8 Records. The JPT shall keep accurate and complete records of their activities and meetings and shall, from time to time as requested by the JSC, provide the JSC with appropriate updates and information to keep the JSC apprised of the progress of the Project Plan, Launch Plan and Assay Commercialization Plan. All records of the JPT that are disclosed to the other Party and which relate to the Project Plan shall be available at all times to the JSC and to each Party on a confidential basis solely for use with respect to such Party's activities conducted pursuant to this Agreement.   5.3.9 Expenses. Microgenics and Achaogen shall be responsible for all expenses incurred by its JPT members in connection with performing their duties hereunder, including all costs of travel, lodging and meals.   5.4 Reporting. The Parties shall keep each other promptly informed on an ongoing basis through the Joint Project Team and the JSC on the progress of the Project Plan, the Launch Plan and the Assay Commercialization Plan, including forecasts of expected performance and completion of activities. Without limiting the foregoing, within [***] ([***]) days following [***] of each calendar year during the Term, Microgenics shall provide to Achaogen a written progress report in English, in a form to be agreed upon by the JSC, which shall include any information required under the Project Plan and as otherwise reasonably determined by the JSC relating to the progress of the goals or performance of the development, commercialization and other activities under the Project Plan, the Launch Plan and the Assay Commercialization Plan.   6 Grant of License   6.1 Exclusive License by Achaogen. During the Term, and without limiting Section 4.2, Achaogen hereby grants to Microgenics a royalty-free, exclusive, worldwide license to use the Achaogen

Page 19 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   Know-How, Achaogen Patents, and Achaogen Materials to research, develop, manufacture, use, market and sell the Assay in the Territory. [***].    6.2 License by Microgenics. During the Term, Microgenics hereby grants to Achaogen and its Affiliates a royalty- free, non-exclusive, sub-licenseable, worldwide license, under and with respect to the Immunoassay Technologies, Microgenics Know- How and any Patents or Patent applications Controlled by Microgenics or its Affiliates to the extent reasonably necessary for Achaogen to perform its obligations or exercise its rights under this Agreement or as is otherwise reasonably necessary to make, have made, use, sell, offer for sale, import and otherwise commercialize Plazomicin. For the avoidance of doubt, the foregoing license grant does not provide any license or right for Achaogen to make, have made, use, sell, offer for sale, import or otherwise commercialize the Assay, except in connection with Achaogen's exercise of the Shortfall License or Transfer License.   6.3 [***] Products and Joint Patents. Each Party shall be entitled to grant non-exclusive licenses to any Third Party under its interest in a  [***] Products or Joint Patent  [***]. [***], and if in certain countries the grant of a license, in order to be effective, requires declarations from the other Party, the other Party shall reasonably cooperate and provide the necessary declarations.   6.4 No Implied License. Achaogen retains all rights in and to the Achaogen Patents and Achaogen Know-How. Microgenics retains all rights in and to the Immunoassay Technologies and Microgenics Know-How. Only the licenses and other rights expressly granted by one Party to the other Party under terms of this Agreement are of any legal force or effect. No other licenses or other rights are granted, conveyed or created (whether by implication, estoppel or otherwise).   7 Consideration to Microgenics    7.1 Development Payments.  In consideration of the development efforts of Microgenics under the Research Program, Achaogen shall pay to Microgenics the following one-time payments upon the occurrence of the corresponding events:     (a) USD $[***] upon the successful completion of Phase 0:  [***] as determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for Phase 0;     (b) USD $[***] upon the successful completion of Phase 1:  [***] as determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for Phase 1;     (c) USD $[***] upon the successful completion of Phase 2:  [***] as determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for Phase 2;      (d) USD $[***] upon the successful completion of Phase 3:  [***] as determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for Phase 3;     (e) USD $[***] upon the successful completion of the first milestone of Phase 4:  [***] as determined in accordance with the Project Plan, including delivery by Microgenics of

Page 20 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.     all deliverables required by the Project Plan for the first milestone of Phase 4;     (f) USD $[***] upon the successful completion of the second milestone of Phase 4: [***] as determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for the second milestone of Phase 4;     (g) USD $[***] upon the successful completion of the third milestone of Phase 4:  [***] as determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for the third milestone of Phase 4;     (h) [***],  USD $[***] upon the successful completion of the fourth milestone of Phase 4:  [***]  a s determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for the fourth milestone of Phase 4;     (i) USD $[***] upon the successful completion of the first milestone of Phase 5:  [***] as determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for the first milestone of Phase 5;     (j) USD $[***] upon the successful completion of the second milestone of Phase 5: [***] as determined in accordance with the Project Plan, including delivery by Microgenics of all deliverables required by the Project Plan for the second milestone of Phase 5;     (k) [***]; and     (l) [***] and assuming [***], USD $[***] upon [***]; provided, however, this amount [***].   Thereafter, no additional payments shall be due and payable to Microgenics by Achaogen for any Assay [***].   7.2 Invoices; Mechanism of Payment. Upon the completion of each event as described in Section 7.1, Microgenics will invoice Achaogen within [***] ([***]) business days. Microgenics agrees to submit invoices to Achaogen (on a timely basis) for all payments due hereunder. Invoices shall reference Achaogen's contract number and the purchase order number. The invoices due under this Agreement shall be submitted to:   Achaogen Inc. 7000 Shoreline Court, #371 South San Francisco, CA 94080   Reference: Achaogen Contract No. _____________, Attn.: _______ Email:   All payments due Microgenics under this Agreement shall be made by Achaogen in United States dollars within [***] ([***]) days after receipt of the applicable invoice by ACH transfer to the credit and account of Microgenics at the following account: [***].

Page 21 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   7.3 Taxes.   7.3.1 Withholding. Microgenics shall be liable for all income and other taxes (including interest) imposed upon any payments made by Achaogen to Microgenics under this Agreement. In the event that any Applicable Law requires Achaogen to withhold taxes with respect to any payment to be made by Achaogen pursuant to this Agreement, Achaogen will notify Microgenics of such withholding requirement prior to making the payment to Microgenics and provide such assistance to Microgenics, including the provision of such documentation as may be required by a tax authority, as may be reasonably necessary in Microgenics' efforts to claim an exemption from or reduction of such taxes. Achaogen will, in accordance with such Law withhold taxes from the amount due, remit such taxes to the appropriate tax authority, and furnish Microgenics with proof of payment of such taxes within [***] ([***]) days following the payment. If taxes are paid to a tax authority, Achaogen shall provide reasonable assistance to Microgenics to obtain a refund of taxes withheld, or obtain a credit with respect to taxes paid.   7.3.2 VAT. All payments due to Microgenics from Achaogen pursuant to this Agreement shall be paid exclusive of any value-added tax (VAT) (which, if applicable, shall be [***]). If Microgenics is required to report any such tax, Achaogen shall promptly provide Microgenics with applicable receipts and other documentation necessary or appropriate for such report.   8 Intellectual Property Rights; Ownership   8.1 Ownership of Discoveries and Inventions. Achaogen shall own all discoveries and inventions made by one or both of the Parties as part of the Research Program, whether or not patentable, relating (i) solely to Plazomicin, the Achaogen Patents, the Achaogen Know-How, and Achaogen Materials or (ii) [***] (each of (i) and (ii), Achaogen Inventions). Microgenics shall own all inventions and discoveries made by one or both of the Parties as part of the Research Program, whether or not patentable, relating solely to Microgenics Cell Lines, Microgenics [***] Antibodies, the Assay, Immunoassay Technologies and Microgenics Know-How (Microgenics Inventions). For all other inventions and discoveries, whether or not patentable, made by the Parties as part of the Research Program, whether individually or jointly, inventorship shall be determined pursuant to the inventorship principles arising under the patent laws of the United States of America, [***] ([***] Products). Each Party shall ensure that each of its employees and other representatives performing activities hereunder has agreed to assign to it all discoveries and inventions made by such employee or other representative in the course of his or her employment.   8.2 Patent Procurement.   8.2.1 Achaogen and Microgenics shall each disclose to the other any inventions and discoveries made during the course of the Research Program. Achaogen shall be responsible for the prosecution and maintenance of any Patent applications and Patents claiming or covering any Achaogen Inventions, and Microgenics shall be responsible for the prosecution and maintenance of any Patent applications and Patents claiming or covering any Microgenics Inventions; provided, that  [***] shall not, without first obtaining [***] prior written consent, file any Patent claiming or covering the [***]; provided, further, that, in the event that any such Patent applications covering or claiming any  [***] are filed without first obtaining  [***] prior written consent, then  [***] hereby grants [***] a perpetual, irrevocable, fully paid-up, royalty-free, worldwide, sublicenseable, non-exclusive license under such Patent applications and any Patents issuing therefrom or related thereto for the purpose of developing, manufacturing, using or commercializing [***].

Page 22 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.     8.2.2 With respect to any Patent applications and Patents claiming or covering any [***] Products, the Parties shall meet to determine in what countries, if any, Patent applications claiming such [***] Products should be filed and the appropriate filing Party (a Joint Patent). The Parties shall [***] by the Party filing such patent applications in connection with any Joint Patents. If a Party elects [***] related to any Joint Patent, the other Party shall provide written notice upon the decision to [***] and the Party not giving such notice shall have the right to assume responsibility for any such prosecution or maintenance, [***].   8.3 Prosecution, Review, Cooperation.   8.3.1 The Party responsible for prosecuting and maintaining a given Patent pursuant to Section 8.2.1 or 8.2.2 (i.e., Microgenics with respect to Patents claiming or covering any Microgenics Inventions and the Assay Patent and the Party agreed to by the Parties with respect to Joint Patents) (the Responsible Party) shall keep the other Party (the Review Party) reasonably informed regarding the status of the filing, prosecution and maintenance of each applicable Patents, and shall provide the Review Party with copies of all documentation concerning each applicable Patent, including all correspondence to and from any Governmental Authority relating thereto. Prior to filing an applicable Patent application for, or material prosecution documents or other submissions relating to, an applicable Patent, the Responsible Party shall provide the Review Party with a reasonable opportunity to review and comment on the proposed application, document or submission, and the Responsible Party shall reasonably consider all such comments and incorporate such comments. In the event that the Responsible Party elects to abandon any applicable Patent, the Responsible Party shall notify the Review Party in writing (such notice, an Abandonment Notice) at least  [***]  ([***]) days prior to any filing or payment due date or any other due date that requires action to prevent loss of rights, and in the event that the Review Party provides the Responsible Party with written notice within  [***] ([***]) days of receipt of the applicable Abandonment Notice, the Review Party shall thereafter have the right, [***], to conduct such filing, prosecution and maintenance for the applicable Patent.   8.3.2 Each of the Parties shall execute or have executed by its employees, representatives and agents such documents as may be reasonably necessary to obtain, perfect, or maintain any Patent rights which would be filed pursuant to this Agreement and to cooperate with the other Party, [***], as reasonably necessary with respect to the prosecution of such Patent rights.   8.4 Ownership. The Achaogen Patents, Achaogen Know-How and the Achaogen Materials shall at all times remain the sole property of Achaogen. Microgenics shall not use the Achaogen Know-How or the Achaogen Materials to develop or market, or have developed or marketed, any Assay for any Third Party. The Microgenics Cell Lines, Microgenics  [***] Antibodies, Immunoassay Technologies and Microgenics Know-How shall remain the sole property of Microgenics. Except as may otherwise be expressly permitted pursuant to the terms and conditions of this Agreement, Achaogen shall not use the Microgenics Cell Lines, Microgenics Monoclonal Antibodies, Immunoassay Technologies and Microgenics Know-How to develop, manufacture, or market, or have developed, manufactured, or marketed, the Assay or any additional assay(s) for Plazomicin or any other compound/substance.   8.5 Enforcement. Each Party shall immediately notify the other if it becomes aware of any infringement, anywhere in the world, of any issued Patent within the Joint Patents. The Parties shall mutually determine whether to take action to obtain a discontinuance of infringement or bring suit against a Third Party infringer of any Joint Patents within [***] ([***]) days from the date of notice; provided that neither

Page 23 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   Party shall be obligated to join any such action. In the event that either Party does not want to join as a Party plaintiff, then the Party not seeking to enforce such infringement claims shall have the right to assign the relevant Joint Patents to the other Party; provided that such assignment is solely and sufficient for purposes of commencing and maintaining the action. The Party seeking to enforce such infringement claims [***] of any suit brought by it claiming infringement of any Joint Patent. The Parties will reasonably cooperate, at the expense of the Party seeking to enforce such infringement claim, in any such suit and shall have the right to consult with the other Party and to participate in and be represented by independent counsel in such litigation [***]. Any recoveries obtained by Achaogen or Microgenics, as applicable, as a result of any proceeding against such a Third Party infringer shall be allocated as follows: (a) such recovery shall first be used to reimburse each Party for all reasonable attorney fees and other litigation costs actually incurred in connection with such litigation by that Party, and (b) any remainder shall be shared [***] by the Parties.   8.6 Patent Infringement. Each Party shall immediately notify the other if a claim or other proceeding is brought against either Party alleging infringement of Third Party Patent rights based upon the manufacture, use or sale of the Assay. The Parties shall immediately consult on how to proceed with respect to defending against any such claim of infringement.   8.7 Third Party Licenses. Microgenics shall be solely responsible, at its own expense, for obtaining rights under any Third Party intellectual property necessary for Microgenics to perform its obligations under this Agreement and Achaogen shall be under no obligation to provide support therefor, financial or otherwise.   8.8 Trademarks. As between the Parties, Microgenics shall own all right, title and interest in and to any Trademarks developed by or for Microgenics for use in connection with the Assay. Microgenics hereby grants to Achaogen a royalty-free non- exclusive right to use such Trademarks in connection with advertising, promoting and marketing Plazomicin, subject to Section 12.5 (Non-Use of Names). All use of Microgenics' Trademarks by Achaogen shall inure to the sole benefit of Microgenics. As between the Parties, Achaogen shall own all right, title and interest in and to all Trademarks developed by or for Achaogen for use in connection with Plazomicin.   9 Term and Termination    9.1 Term. This Agreement shall be effective as of the Effective Date and unless terminated earlier by mutual written agreement of the Parties or pursuant to Section 9.2 (Termination At Will) or Section 9.3 (Termination for Cause) below, the term of this Agreement shall continue in effect until Achaogen ceases development and commercialization of Plazomicin (Term).   9.2 Termination At Will. Achaogen may terminate this Agreement in its entirety, for any reason, by providing at least sixty (60) days prior written notice to Microgenics.   9.3 Termination for Cause. This Agreement may be terminated in its entirety by written notice by either Party at any time:   9.3.1 For material breach by the other Party, which breach remains uncured for ninety (90) days from the date written notice of such breach is given to the breaching Party, or, if such breach is not susceptible of cure within such ninety (90) day period and the breaching Party uses diligent good faith efforts to cure such breach, for one hundred eighty (180) days after written notice to the breaching Party if such breach remains uncured; or

Page 24 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.     9.3.2 Upon the filing or institution of bankruptcy, reorganization, liquidation or receivership proceedings, or upon an assignment of a substantial portion of the assets for the benefit of creditors by the other Party, or in the event a receiver or custodian is appointed for such Party's business, or if a substantial portion of such Party's business is subject to attachment or similar process; provided, however, that in the case of any involuntary bankruptcy proceeding such right to terminate shall only become effective if the proceeding is not dismissed within sixty (60) days after the filing thereof.   9.4 Effect of Termination.  Upon termination of this Agreement pursuant to Sections 9.1 (Term), Section 9.2 (Termination At Will) or 9.3 (Termination for Cause):   9.4.1 All rights and licenses granted under Section 6.1 (License by Achaogen) of this Agreement shall terminate and all rights to the Achaogen Patents and Achaogen Know-How shall revert to Achaogen.   9.4.2 All rights and licenses granted under Section 6.2 (License by Microgenics) of this Agreement shall terminate and, subject to Section 9.4.4, all rights to the Immunoassay Technologies and Microgenics Know-How shall revert to Microgenics.   9.4.3 Microgenics shall promptly return or destroy (as directed by Achaogen) to Achaogen all Achaogen Know- How and Achaogen Materials provided to Microgenics hereunder, and, subject to Section 9.4.4, Achaogen shall promptly return to Microgenics all Microgenics Know-How provided to Achaogen hereunder;   9.4.4 Solely in the case of termination of this Agreement by Achaogen under Section 9.3 (Termination for Cause):   9.4.4.1 Microgenics hereby grants Achaogen a Transfer License; provided, that, Achaogen covenants not to use the Transfer License beyond the scope set forth in Section 1.33. In the event that Microgenics reasonably believes that Achaogen has breached the foregoing covenant, Microgenics shall provide written notice thereof, including reasonable supporting evidence, and, in the event that Achaogen agrees with such written notice and does not indicate to Microgenics that it will conform its activities to the scope of the Transfer License within [***] ([***]) business days after receiving the written notice, then the Transfer License shall be void as of the end of [***] period described in this sentence. If Achaogen indicates that it will so conform its activities, then the Transfer License shall remain in full force and effect. In the event that Achaogen disagrees with such written notice and advises Microgenics of such disagreement, the Parties shall submit this matter to the Dispute resolution process in 13.8. For purposes of resolving any disputes regarding the Transfer License, the Parties agree to complete the Dispute resolution process in 13.8 within  [***] from the date of Microgenics' first written notice of the breach of the covenant found in the proviso to the first sentence of this Section 9.4.4.1(i). If after concluding the Dispute resolution process in 13.8 it is determined that the covenant found in the proviso was breached, then the Transfer License shall terminate immediately.  In the event that the Transfer License is granted, Achaogen shall owe no payments to Microgenics for the first [***] ([***]) months that any Assay commercialized under the Transfer License is commercialized and shall pay a [***] percent ([***]%) royalty on its net sales (i.e., gross sales less all deductions, reductions and offsets reasonably taken in accordance with generally accepted accounting principles in the United States) of Assays commercialized under the Transfer License following the end of such [***] ([***]) month

Page 25 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   period.   9.4.4.2 Microgenics shall (a) make its personnel available for a reasonable period of time (not to exceed  [***]  ([***]) months) to effect a successful technology transfer with respect to the manufacture and commercialization of the Assay, (b) provide Achaogen with copies of the physical embodiment of all processes, protocols, procedures, methods, tests and other intellectual property rights licensed to Achaogen under the Transfer License, as applicable, related to the Assay (including the manufacture thereof), (c) supply [***] (including [***]) reasonably required to perform  [***] as may be required by the applicable Regulatory Authorities, and upon request by Achaogen,  [***], provide Achaogen (and/or its designee) with  [***] related to the Assay, and (d) promptly assist Achaogen (and/or its designee) in obtaining all necessary Regulatory Approvals and/or modifying and/or transferring existing Regulatory Approvals to enable Achaogen (and/or its designee) to develop, make, have made, use, market, distribute, import, sell and offer for sale the Assay ([***]).   9.4.4.3 If, at the date of the actual termination of this Agreement, Microgenics is commercializing the Assay, such termination shall be suspended, and Microgenics shall continue to supply the Assay to the market, until [***]; provided that (i) such period shall not extend beyond an additional [***] ([***]) months from the date of the actual termination of this Agreement, (ii) Achaogen, itself or through or in conjunction with a Third Party, may commercialize another assay for use in conjunction with Plazomicin (i.e., Microgenics shall lose its commercial exclusivity), and (iii) Section 4.2.3 shall be of no force or effect during any such suspended termination.   9.4.5 If this Agreement is terminated during the Term at any time by Achaogen under Section 9.2 (Termination At Will) or by Microgenics under Section 9.3 (Termination for Cause), the following terms shall apply: 9.4.5.1 Solely to the extent the expiration or termination of this Agreement occurs prior to the payment of all development payments described in Section 7.1, Achaogen shall pay to Microgenics an amount equal to the first applicable unpaid development payment as described in Section 7.1 (Development Payments) for the period in which the Agreement is terminated or expires (for illustrative purposes only, if Achaogen provides notice of termination under Section 9.1 (Term) prior to the completion of the Phase 3:  [***], then Achaogen shall pay an amount equal to USD $[***]  to Microgenics pursuant to the terms of Section 7.2 (Invoices; Mechanism of Payment)); provided, that, notwithstanding the foregoing, no payment shall be due under this Section 9.4.5.1 in the event that this Agreement is terminated by Achaogen under Section 9.2 (Termination At Will) at any time in connection with the failure to obtain, or maintain, Regulatory Approval for Plazomicin; and   9.4.5.2 for a period of two (2) years after the expiration or termination date of this Agreement pursuant to Section 9.4.5, in the event Achaogen decides to continue to develop and commercialize Plazomicin, Achaogen shall provide written notice thereof to Microgenics and, upon Achaogen's receipt of a written proposal from Microgenics, the Parties shall use good faith efforts to negotiate a definitive agreement for the continued development, manufacture, supply and sale of the Assay by Microgenics on commercially reasonable terms; provided, however, that nothing in this Section 9.4.5.2 shall (a) obligate Achaogen to enter into any new agreement with Microgenics with respect to the development, manufacture, supply or sale of the Assay or (b) prohibit Achaogen from negotiating or entering into an agreement with any Third Party with respect to the development, manufacture, supply or sale of any assay.

Page 26 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.     9.4.6 The termination, expiration or non-renewal of this Agreement shall not relieve either Party from any obligation that accrues pursuant to this Agreement before the effective date of the termination or expiration nor shall it release the Parties from any obligation that may have been incurred as a result of operations conducted under this Agreement.   9.5 Survival. Termination of this Agreement for whatever reason in accordance with the provisions hereof or expiration of this Agreement shall not affect the accrued rights of the Parties, and shall not limit remedies that may be otherwise available in law or equity. Article 1 (Definitions), Section 4.1 (Manufacture), 8 (Intellectual Property Rights; Ownership) (except for Section 8.8 (Trademarks) (unless Achaogen intends to commercialize the Assay upon termination)), 11 (Indemnification), 12 (Confidentiality), and 13 (Miscellaneous) and Section 3.6 (Right of Reference) (but only in the event that Achaogen intends to commercialize the Assay upon termination), 9.4 (Effect of Termination) and 9.5 (Survival) shall survive expiration or termination of this Agreement for any reason. All other rights and obligations will terminate upon expiration of this Agreement.   10 Representations and Warranties   10.1 Representations and Warranties of Each Party. Each of Achaogen and Microgenics hereby represents, warrants and covenants to the other Party hereto as follows:   10.1.1 it is a corporation or other entity duly organized and validly existing under the laws of the state or other jurisdiction of incorporation or formation;   10.1.2 the execution, delivery, and performance of this Agreement by such Party has been duly authorized by all requisite corporate action and does not require any shareholder action or approval;   10.1.3 no consent, approval, order or authorization of, or registration, declaration or filing with, or exemption by, any Third Party or any governmental entity is required by or with respect to such Party in connection with the execution, delivery and performance of this Agreement;   10.1.4 this Agreement constitutes a valid and legally binding obligation of such Party, enforceable against such Party in accordance with its respective terms, except as may be limited by (a) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors' rights generally and (b) the effect of rules of law governing the availability of equitable remedies;   10.1.5 the execution, delivery and performance of this Agreement do not and will not conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation that would result in the creation of any encumbrance upon any of the assets owned by such Party under, any material provision of Applicable Law, of such Party's organizational documents or of any agreement, judgment, injunction, order, decree, or other instrument binding on such Party or any assets owned by such Party; and   10.1.6 it shall comply with all material Applicable Laws relating to its activities under this Agreement.   10.2 Representations and Warranties of Microgenics. In addition to the representations and

Page 27 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   warranties made by Microgenics under Section  10.1 (Representations and Warranties of Each Party) above, Microgenics further represents and warrants to Achaogen that:   10.2.1 it has the capacity and resources (including [***]) to (i) develop, manufacture and supply the Assay in and for the Territory, and (ii) commercialize the Assay in the Primary Countries; 10.2.2 and further covenants that, the Assay shall be developed, manufactured, commercialized, and shall function, in accordance with applicable GMP, Specifications and Applicable Laws;   10.2.3 it has the capacity and resources to develop (including [***]), manufacture and commercialize the Assay in accordance with this Agreement, including in accordance with the Project Plan;   10.2.4 to the best of its knowledge, the development, manufacture, use and sale of the Assay will not infringe any issued Patents in the Territory owned or controlled by any Third Party; and   10.2.5 it owns or controls all rights to the Microgenics Cell Lines, Microgenics  [***] Antibodies, and Immunoassay Technologies.   10.3 Representations and Warranties by Achaogen.  In addition to the representations and warranties made by Achaogen under Section 10.1 (Representations and Warranties of Each Party) above, Achaogen further represents and warrants to Microgenics that:   10.3.1 it owns, controls or has the right and ability to grant Microgenics the licenses under its (and its Affiliates) rights in the Achaogen Patents (as listed in Exhibit B hereto) related to the use of Plazomicin, pursuant to this Agreement; and   10.3.2 it owns, controls or has the right and ability to provide to Microgenics the Achaogen Materials for development, manufacture, marketing, and sale of the Assay pursuant to this Agreement.   10.4 Debarment and Exclusion. Achaogen and Microgenics represent and warrant that neither it, nor any of its employees or agents working on the subject matter of this Agreement, has ever been, is currently, or is the subject of a proceeding that could lead to it becoming, as applicable, a Debarred Entity or Debarred Individual, an Excluded Entity or Excluded Individual or a Convicted Entity or Convicted Individual, nor are they listed on the FDA's Disqualified/Restricted List for clinical investigators. Each Party further covenant, represent and warrant that if, during the Term, it, or any of its employees or agents working on their behalf, becomes or is the subject of a proceeding that could lead to that Party with respect to the subject matter hereof, becoming, as applicable, a Debarred Entity or Debarred Individual, an Excluded Entity or Excluded Individual or a Convicted Entity or Convicted Individual, or added to FDA's Disqualified/Restricted List for clinical investigators, the Party shall immediately notify the other Party. This provision shall survive termination or expiration of this Agreement. For purposes of this provision, the following definitions shall apply:   10.4.1 A Debarred Individual is an individual who has been debarred by the FDA pursuant to 21 U.S.C. §335a (a) or (b) from providing services in any capacity to a person that has an approved or pending drug product application.   10.4.2 A Debarred Entity is a corporation, partnership or association that has been debarred by the FDA pursuant to 21 U.S.C. §335a (a) or (b) from submitting or assisting in the submission of

Page 28 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   any abbreviated drug application, or a subsidiary or Affiliate of a Debarred Entity.   10.4.3 An Excluded Individual or Excluded Entity is (a) an individual or entity, as applicable, who has been excluded, debarred, suspended or is otherwise ineligible to participate in federal health care programs such as Medicare or Medicaid by the Office of the Inspector General (OIG/HHS) of the U.S. Department of Health and Human Services, or (b) is an individual or entity, as applicable, who has been excluded, debarred, suspended or is otherwise ineligible to participate in federal procurement and non- procurement programs, including those produced by the U.S. General Services Administration (GSA).   10.4.4 A Convicted Individual or Convicted Entity is an individual or entity, as applicable, who has been convicted of a criminal offense that falls within the ambit of 42 U.S.C. §1320a - 7(a), but has not yet been excluded, debarred, suspended or otherwise declared ineligible.   10.4.5 FDA's Disqualified/Restricted List is the list of clinical investigators restricted from receiving investigational drugs, biologics or devices if the United State Food and Drug Administration (FDA) has determined that the investigators have repeatedly or deliberately failed to comply with regulatory requirements for studies or have submitted false information to the study sponsor.   10.5 Disclaimer. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, NEITHER MICROGENICS NOR ACHAOGEN MAKES, AND EACH HEREBY EXPRESSLY DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED, WHETHER IN FACT OR IN LAW, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT.   10.6 No Representations Regarding Approval or Commercial Success. Neither Party makes any representations or warranties as to: (a) whether Plazomicin or the Assay will be approved for commercial sale by the applicable Regulatory Authorities; or (b) the commercial potential or success of Plazomicin or the Assay.   11 Indemnification     11.1 Indemnification by Achaogen.  Achaogen shall indemnify, defend and hold harmless Microgenics and its Affiliates and each of its and their respective employees, officers, directors and agents (each a Microgenics Indemnified Party) from and against any and all liabilities, damages, penalties, expenses and/or losses (including reasonable legal expenses and attorneys' fees) (collectively, Losses), resulting from any Third Party suits, claims, actions or demands (collectively, Third Party Claims), to the extent arising out of or relating to: (a) the breach by Achaogen of any representation, warranty or covenant contained in this Agreement; (b) the willful misconduct or negligent acts or omissions of Achaogen, its Affiliates or any of their respective employees, officers, directors or agents; (c) the manufacture, promotion, distribution, use, testing, marketing or sale of pharmaceutical products containing Plazomicin by Achaogen or its Affiliates; or (d) claims of infringement of Third Party Patents based upon the manufacture, use or sale of Plazomicin; except, in each case, to the extent such Losses result from clauses (a), (b), (c) or (d) of Section 11.2 (Indemnification by Microgenics).   11.2 Indemnification by Microgenics.  Microgenics shall indemnify, defend and hold harmless Achaogen and its Affiliates and each of its and their respective employees, officers, directors and agents (each a Achaogen Indemnified Party) from and against any and all Losses, resulting from any Third Party

Page 29 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   Claims, to the extent arising out of or relating to: (a) the breach by Microgenics of any representation, warranty or covenant contained in this Agreement; (b) the willful misconduct or negligent acts of Microgenics, its Affiliates or any of their respective employees, officers, directors, or agents; (c) the manufacture, promotion, distribution, use, testing, marketing or sale of the Assay; or (d) claims of infringement of Third Party Patents based upon the manufacture, use or sale of the Assay; except, in each case, to the extent such Losses result from clauses (a), (b) (c) or (d) of Section 11.1 (Indemnification by Achaogen).   11.3 Conditions to Indemnification The obligations of the indemnified Party under Sections 11.1 (Indemnification by Achaogen) and 11.2 (Indemnification by Microgenics) are conditioned upon the delivery of written notice to the indemnifying Party of any potential liability promptly after the indemnified Party become aware of such potential liability; provided, however, that the failure to give such notice promptly shall not impair a Party's right to indemnification under this Section 11.3 (Conditions to Indemnification) unless the delay in providing such notice has a material adverse effect on the ability of the indemnifying Party to defend against such liability. The indemnifying Party shall have the right to assume the defense of any suit or claim relating to the liability if it has assumed responsibility for the suit or claim in writing; however, if in the reasonable judgment of the indemnified Party, such suit or claim involves an issue or matter which could have a material adverse effect on the business operation or assets of the indemnified Party, the indemnified Party may waive its rights to indemnity under this Agreement and control the defense or settlement thereof, but in no event shall any such waiver be construed as a waiver of any rights such indemnified Party may have against any Third Party at law or in equity. If the indemnifying Party defends the suit or claim, the indemnified Party shall cooperate with the indemnifying Party in such defense and the indemnified Party or Parties may participate in (but not control) the defense thereof at its sole cost and expense.   11.4 Settlements. Neither of the Parties may settle a claim or action related to a Third Party Claim without the consent of the other Party, if such settlement would impose any monetary obligation on the other Party, or would require the other Party to submit to an injunction or otherwise limit the other Party's rights under this Agreement. Any payments made by a Party to settle any such claim or action shall be at its own costs and expense, except in the event such payment was made with the prior written consent of an indemnifying Party, in which case such payment shall be subject to the obligations of the Parties as set forth in Sections 11.1 (Indemnification by Achaogen), 11.2 (Indemnification by Microgenics), and 11.3 (Conditions to Indemnification).   11.5 Limitation of Liability. EXCEPT WITH RESPECT TO DAMAGES THAT ARISE DUE TO A  PARTY'S BREACH OF CONFIDENTIALITY (ARTICLE 12) OR  INDEMNIFICATION  OBLIGATIONS  (ARTICLE 11),  IN  NO  EVENT WILL  EITHER  PARTY  BE  LIABLE  TO  THE  OTHER  FOR  CONSEQUENTIAL, INDIRECT,  SPECIAL,  EXEMPLARY OR  PUNITIVE DAMAGES  FOR ANY  CAUSE OF  ACTION, WHETHER  IN  CONTRACT, TORT  OR OTHERWISE,  INCLUDING LOST REVENUES, PROFITS OR BUSINESS OPPORTUNITIES ARISING OUT OF OR  IN CONNECTION WITH THIS AGREEMENT, WHETHER OR NOT THE OTHER  PARTY WAS  OR  SHOULD HAVE  BEEN  AWARE OF  THE POSSIBILITY OF  THESE DAMAGES. EXCEPT WITH  RESPECT TO  DAMAGES THAT  ARISE  DUE TO  A  PARTY'S BREACH  OF  CONFIDENTIALITY  (ARTICLE 12)  OR  INDEMNIFICATION  OBLIGATIONS  (ARTICLE 11), THE  LIABILITY  OF  EITHER  PARTY  UNDER  THIS AGREEMENT  (WHETHER  BY  REASON  OF  BREACH  OF  CONTRACT,  TORT,  OR  OTHERWISE)  WITH  RESPECT  TO  A  GIVEN  CLAIM  SHALL  NOT  EXCEED  AN AMOUNT EQUAL TO [***].   11.6 Insurance.  Each Party shall maintain, through self-insurance or commercially-placed insurance, adequate commercial general liability and products liability insurance, including contractual liability coverage, necessary to satisfy its obligations hereunder and consistent with pharmaceutical and

Page 30 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   diagnostic industry practices.   12 Confidentiality   12.1 Nondisclosure. During the Term, and for a period of [***] ([***]) years thereafter, all Confidential Information disclosed to a Party hereto or its Affiliates (the Receiving Party) by the other Party or its Affiliates (the Disclosing Party) shall be deemed confidential and shall be treated as such by the Receiving Party (meaning that the Receiving Party shall take the same steps to protect such information as it does to protect its own confidential information, which in any event shall be no less than the reasonable protective measures for the industry) and shall only be used for the purposes of this Agreement. Notwithstanding the foregoing, Confidential Information shall not include information that is:     (a) known by the Receiving Party at the time of its receipt and not through a prior disclosure by the Disclosing Party;     (b) at the time of disclosure or thereafter, becomes published or otherwise part of the public domain through no breach of this Agreement by the Receiving Party;     (c) subsequently disclosed to the Receiving Party by a Third Party having the right to make such a disclosure; or     (d) developed by the Receiving Party, as evidenced by its records, independently of information received by it from the Disclosing Party hereunder.   12.2 Permitted Disclosure.  Information provided under this Agreement may be disclosed to employees, agents or consultants of the Receiving Party, but only to the extent required to accomplish the purposes of this Agreement and only after the Receiving Party obtains the prior agreement of its employees, agents and consultants to whom disclosure is to be made to hold in confidence and not to make use of such information for any purpose other than that permitted by this Agreement. In addition to the foregoing exceptions, either Party may disclose Confidential Information to the extent it is required to be disclosed under Applicable Law, or in connection with any application by the Receiving Party for any Regulatory Approvals; provided, however, that the Receiving Party shall furnish the Disclosing Party with as much prior written notice of such disclosure requirement as reasonably practicable, so as to permit the Disclosing Party, in its sole discretion, and at its sole expense, to take appropriate action, including seeking a protective order, in order to prevent the Disclosing Party's Confidential Information from passing into the public domain or becoming generally available to the public.   12.3 Publicity. The Parties agree to make a joint public release of the having entered into this Agreement upon the successful completion of Phase I as described in Exhibit F. The public release must however not contain any Confidential Information of any kind such as scientific, commercial or financial which both Parties have not agreed to include in writing. No public announcement concerning the existence, terms or subject matter of this Agreement shall be made, either directly or indirectly, by any Party, without first obtaining the prior written approval of the other Party and agreement upon the nature and text of such public announcement which such agreement and approval shall not be unreasonably withheld. Notwithstanding the foregoing, if, in the opinion of legal counsel for the Party desiring to make such public announcement, such disclosure is required under Applicable Law, subject to Section 12.2 (Permitted Disclosure) above, the Party required to make such public announcement shall inform the other Parties of the proposed announcement or disclosure in reasonably sufficient time prior to public release, which shall be not

Page 31 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   less than [***]  ([***]) business days (or such shorter period as may be required under Applicable Law) prior to release of such proposed public announcement, and shall provide the other Parties with a written copy thereof in order to allow such other Parties to comment upon such public announcement. The Receiving Party shall reasonably cooperate with the Disclosing Party (at the Disclosing Party's expense) with respect to all disclosures regarding this Agreement required under Applicable Law, including requests for confidential treatment of proprietary information of the Disclosing Party included in any such disclosure.    12.4 Applicable Law. Nothing in this Agreement shall be construed as preventing or in any way inhibiting any Party from complying with Applicable Law governing activities and obligations undertaken pursuant to this Agreement, in any manner which it reasonably deems appropriate, including, for example, by disclosing to Regulatory Authorities confidential or other information received from the other Parties, subject to Sections 12.2 (Permitted Disclosure) and 12.3 (Publicity).   12.5 Non-Use of Names. Except as otherwise provided in this Agreement, neither Party (or its Affiliates) shall use, either directly or indirectly, the Trademarks of the other Party (or their Affiliates), or the names of any of their officers, employees or board members in any publicity, marketing advertising or other documents (or other disclosures) unless (a) such use is consistent with, and permitted under, the Project Plan or (b) a copy or transcript of the proposed disclosure is submitted to and approved in advance in writing by the other Party (each in its sole discretion), except in the case in which a governmental authority requires the use of the Trademark by a Party in the sale or distribution of the Assay or Plazomicin. Each Party will use good faith efforts to review and approve any proposed disclosure within [***] ([***]) business days of its receipt from the other Party of a copy or transcript of the proposed disclosure. If a Party approves the other Party's usage of its Trademarks (or its Affiliates), or the names of any of their officers, employees or board members in accordance with this Section 12.5 (Non-Use of Names), the other Party shall comply with any usage guidelines or requirements imposed by the approving Party.   12.6 Publications. Publication in a journal, paper, magazine or any other such similar disclosure relating to the development, manufacture or commercialization of the Assay will not take place without the prior written agreement of both Achaogen and Microgenics, which shall not be unreasonably withheld. Any draft article intended to be submitted for publication by Microgenics or Achaogen (or a clinical trial site utilized by Achaogen) hereto shall first be sent to the other Party in order to allow such Party to preserve its intellectual property rights by delaying such publication (but not for more than  [***] ([***]) days) and/or removing its Confidential Information. Achaogen's and/or Microgenics' contribution shall be acknowledged in any publication by co-authorship or acknowledgment, whichever is appropriate. Republication of any article, in whole or in part, which has previously been approved by the Parties shall not require subsequent approval, provided that the content is substantially unchanged. These restrictions are not applicable to Plazomicin; provided, however, that, for clarity, Microgenics shall have no right to publish with respect to Plazomicin.   12.7 Prior CDAs. This Agreement supersedes that certain Confidential Disclosure Agreement between the Parties dated  [***]; provided, however, that all Confidential Information disclosed or received by the Parties thereunder will be deemed Confidential Information hereunder and will be subject to the terms and conditions of this Agreement. For clarity, this Agreement does not supersede the Antibody Development Agreement.   13 Miscellaneous   13.1 Force Majeure. Neither Party shall be liable to the other for delay or failure in the

Page 32 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   performance of the obligations on its part contained in this Agreement if and to the extent that such failure or delay is due to government action, war, terrorism, fire, explosion, flood, strike, lockout, embargo, shortage of materials or utilities, vendor failure to supply, act of God, or any other cause beyond the control and without the fault or negligence of the defaulting Party (a Force Majeure Event), provided that the Party claiming Force Majeure Event has exerted all Commercially Reasonable Efforts to avoid or remedy such force majeure. Such excuse shall continue as long as the condition preventing the performance continues. Upon cessation of such Force Majeure Event, the affected Party shall promptly resume performance hereunder. Each Party agrees to give the other Party prompt written notice of the occurrence of any such Force Majeure Event, the nature thereof, and the extent to which the affected Party will be unable to perform its obligations hereunder. Each Party further agrees to use all Commercially Reasonable Efforts to correct the Force Majeure Event  [***] and to give the other Party prompt written notice when it is again fully able to perform its obligations hereunder.   13.2 Assignment. Neither Party may assign this Agreement to a Third Party unless both Parties have agreed to such assignment in a writing signed by an authorized representative of each Party hereto; provided, however, that upon providing written notice, (i) either Party may, without the other Party's consent, assign this Agreement to an Affiliate or to any Third Party entity that acquires all or substantially all of its assets to which this Agreement relates and (ii) Achaogen may, without Microgenics' consent, assign this Agreement (in whole or in part) to a Third Party licensee of Achaogen's rights with respect to Plazomicin. This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties. Any assignment not in accordance with this Section 13.2 (Assignment) shall be void.   13.3 No Waiver. The failure of either Party to require performance by the other Party of any of that other Party's obligations hereunder shall in no manner affect the right of such Party to enforce the same at a later time. No waiver by any Party hereto of any condition, or the breach of any provision, term, representation or warranty contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach, or of any other condition or of the breach of any other provision, term, representation or warranty hereof.   13.4 Severability.  If a court or other tribunal of competent jurisdiction should hold any term or provision of this Agreement to be excessive, or invalid, void or unenforceable, the offending term or provision shall be deleted, and, if possible, replaced by a term or provision which, so far as practicable, achieves the legitimate aims of the Parties. In the event that such provisions cannot be agreed upon, the invalidity, illegality or unenforceability of one or more provision of this Agreement shall not affect the validity of this Agreement as a whole.   13.5 Relationship Between the Parties. Both Parties are independent contractors under this Agreement. Nothing herein contained shall be deemed to create an employment, agency, joint venture or partnership relationship between the Parties hereto or any of their agents or employees, or any other legal arrangement that would impose liability upon one Party for the act or failure to act of the other Party. Neither Party shall have any express or implied power to enter into any contracts or commitments or to incur any liabilities in the name of, or on behalf of, the other Party, or to bind the other Party in any respect whatsoever.

Page 33 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   13.6 Correspondence and Notices. Correspondence, reports, documentation and any other communication in writing between the Parties in the course of implementation of this Agreement shall be in writing and sent by internationally recognized overnight delivery service that maintains records of delivery, or by facsimile confirmed by prepaid registered or certified air mail letter, and shall be deemed to have been properly served to the addressee upon the date delivered by hand or transmitted by facsimile (with transmission confirmed) or on the second business day (at the place of delivery) after deposit with an internationally recognized overnight delivery service. The proper address for communication and for all payments shall be:   To Microgenics: With a copy to:   Microgenics Corporation Thermo Fisher Scientific Attn: VP & General Manager Attn: SDG General Counsel 46500 Kato Road 81 Wyman Street Fremont, CA 94538 Waltham, MA 02451 Fax: Fax: (781) 622-1283     To Achaogen: With a copy to:     Achaogen Inc.   7000 Shoreline Court, #371   South San Francisco, CA 94080   Fax:     13.7 Choice of Law.  This Agreement is subject to and governed by the laws of the State of Delaware, U.S.A. (without regard to conflict of law principles).   13.8 Dispute Resolution.    13.8.1 Executive Resolution. In the event of a dispute with respect to (a) the validity, interpretation or construction of this Agreement, (b) compliance with this Agreement or (c) a breach of this Agreement (a Dispute), a Party may provide the other Party with written notice of the Dispute, and the Parties agree to exercise reasonable efforts to resolve the Dispute in good faith by promptly engaging in discussions with duly authorized representatives of the Parties. If the Dispute cannot be resolved by such authorized representatives of the Parties within [***] ([***]) business days, the authorized representatives shall refer the Dispute to a meeting between a senior executive representing each Party (currently the [***] for Achaogen, and the [***] for Microgenics), which such senior executives shall participate in at least one in person meeting as soon as practicable, but in no event later than [***] ([***]) days after the date of the relevant referral. If the senior executives for Achaogen and Microgenics cannot resolve such Dispute in a mutually acceptable manner within [***] ([***]) business days after such meeting, then the Dispute shall be resolved exclusively by final and binding arbitration in accordance with Section 13.8.2.    13.8.2 Arbitration. Arbitration will be conducted exclusively in the State of Delaware by arbitration administered by the American Arbitration Association (AAA) under its Commercial Arbitration Rules and Supplementary Procedures for Large Complex Disputes, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. [***]. Notwithstanding anything in this Agreement to the contrary, each Party shall have the right, at its election, to seek injunctive or other equitable relief in any court of competent jurisdiction to enforce or obtain compliance with any provision of

Page 34 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   this Agreement without first submitting such matter to arbitration. All rights and remedies hereunder shall be cumulative, may be exercised singularly or concurrently and, unless otherwise stated herein, shall not be deemed exclusive.    13.9 Entire Agreement; Amendment. Except as otherwise set forth in Section 12.7, this Agreement and the Antibody Development Agreement, including the Exhibits and Schedules hereto and thereto and all the covenants, promises, agreements, warranties, representations, conditions and understandings contained herein and therein sets forth the complete, final and exclusive agreement between the Parties and supersedes and terminates all prior and contemporaneous agreements and understandings between the Parties, whether oral or in writing. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties other than as are set forth in this Agreement and the Antibody Development Agreement. No subsequent alteration, amendment, change, waiver or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party. No understanding, agreement, representation or promise, not explicitly set forth herein, or in the Antibody Development Agreement, has been relied on by either Party in deciding to execute this Agreement. Notwithstanding anything to the contrary contained herein or in the Antibody Development Agreement, nothing in the Antibody Development Agreement shall be deemed to modify or diminish the representations, warranties, covenants and obligations of the Parties under this Agreement and in the event of any conflict between the terms and conditions of this Agreement and the terms and conditions of the Antibody Development Agreement, this Agreement shall govern except with respect to Section 4.2.7.3 of this Agreement which shall be subject to the Antibody Development Agreement.   13.10 Headings. The headings and captions used in this Agreement are solely for the convenience of reference and shall not affect its interpretation.   13.11 Counterpart. This Agreement may be executed in one or more counterparts, each of which shall be an original, and all of which shall constitute together the same document. Each Party acknowledges that an original signature or a copy thereof transmitted by facsimile (or .pdf file) shall constitute an original signature for purposes of this Agreement.   13.12 Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement including any filings with any antitrust agency which may be required.   13.13 Affiliates. Both Parties shall have the right, in their sole discretion, to perform some or all of its obligations and exercise some or all of its rights under this Agreement through its Affiliates.   13.14 Joint Negotiation. This Agreement is the joint product of Microgenics and Achaogen, and each provision hereof has been subject to the mutual consultation, negotiation and agreement of the Parties and their respective legal counsel and advisers and any rule of construction that a document shall be interpreted or construed against the drafting Party shall not be applicable.   13.15 Construction. Except where the context otherwise requires, wherever used, the singular shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders and the word or is used in the inclusive sense (and/or). All references to a business day or business days in this Agreement means any day other than a day which is a Saturday, a Sunday or any day banks are authorized or required to be closed in the United States. The words include, includes and including shall be deemed to be followed by the phrase without limitation. The word will shall be construed to have the same

Page 35 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   meaning and effect as the word shall. The words herein, hereof and hereunder, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof. All currency herein shall refer to United States dollars, unless specifically provided otherwise. All exhibits to this Agreement are hereby made a part of this Agreement.   13.16 Use of Third Parties. All obligations under this Agreement shall be performed by the Party designated to perform such obligations under this Agreement and such obligations may not be performed by a Third Party on such Party's behalf, unless (a) the other Party has consented in writing which shall not be unreasonably be withheld or delayed, (b) the Party engaging such Third Party performs appropriate qualification and oversight of such Third Party in accordance with the Applicable Law, including applicable GMP, GCP, and GLP requirements, and (c) the Party engaging such Third Party ensures that such Third Party complies with the terms and conditions of this Agreement, and provided that such performance of activities by a Third Party is consistent with the rights and obligations of the Parties under this Agreement. Notwithstanding any such consent, each Party shall remain at all times fully liable for its respective responsibilities under this Agreement. Each Party hereby expressly waives any requirement that the other Party exhaust any right, power or remedy, or proceed against such subcontractor for an  obligation or performance hereunder, prior to proceeding directly against the Party engaging such subcontractor.     [Signature Page to Follow]

Page 36 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.     IN WITNESS WHEREOF, duly authorized representatives of the Parties have duly executed this Agreement to be effective as of the Effective Date.       ACHAOGEN INC. MICROGENICS CORPORATION   By: /s/ Blake Wise By: /s/ Marc Tremblay

Name: Blake Wise Name: Marc Tremblay

Title: COO Title: President, Clinical Diagnostics

Date: 4/26/16 Date: 4/26/2016



Signature Page to Collaborative Development and Commercialization Agreement DB2/ 26356633.19

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   Exhibit A Achaogen Materials

Achaogen Materials Estimated Amount Estimated Development PhaseRequired [***]

    (1) [***]

Page 38 of 60 DB2/ 26356633.19

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   Exhibit B Achaogen Patents [***]



Page 39 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. DB2/ 26356633.19





Confidential Treatment Requested by Achaogen, Inc.   Exhibit C Microgenics' Cell Lines   [***]

Clone # Clone ID

[***]     [***]

Clone # Clone ID

[***]   [***]

Clone # Clone ID

[***]

    [***] Rabbit Identity Immunogen [***]   [***]

Page 40 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. DB2/ 26356633.19





Exhibit D Plazomicin Chemical Structure





Page 41 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Confidential Treatment Requested by Achaogen, Inc.   Exhibit E Primary Countries   Achaogen Primary Country List Country Country [***]

Page 42 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. DB2/ 26356633.19





Confidential Treatment Requested by Achaogen, Inc.   Exhibit F Project Plan Timeline and Deliverables     Plazomicin TDM Immunoassay Development Project Plan Timeline and Deliverables   Deliverables Start End Duration (M) Phase 0 [***] [***] [***] [***] [***] [***] Phase 1 [***]  [***] [***] [***] •[***] •[***] Phase 2 [***] [***] [***] [***] [***] [***] Phase 3 [***] [***] [***] [***] [***] [***] [***] [***] Phase 4 [***] [***] [***] [***] Milestone 1: [***] [***] [***] [***] [***] Milestone 2: [***] [***] [***] [***] [***] Milestone 3: [***] [***] [***] [***] Milestone 3A: [***] [***] [***] [***] [***] Milestone 3B: [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] [***] Phase 5 [***] [***] [***] [***] Milestone 1: [***] [***] [***] [***] [***] Milestone 2: [***] [***] [***] [***] [***]

Page 43 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. DB2/ 26356633.19





Confidential Treatment Requested by Achaogen, Inc.   Exhibit G Specifications   [***]   Performance Attributes Desired Value(s) Acceptable Value(s)

[***]

    1 [***]

Page 44 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. DB2/ 26356633.19





Confidential Treatment Requested by Achaogen, Inc.   Exhibit H - BARDA Requirements

1.0 Additional Terms and Conditions for this Agreement as a Federal Subcontract

  1.1 Purpose. This Agreement is a subcontract under the following Achaogen Government Contract(s):

  •  Contract No. HHSO100201000046C (BARDA 0046C Contract) between Achaogen, Inc. and Department of Health and Human Services, Biomedical Advanced Research and Development Authority;

The purpose of this Section 1.0 is to incorporate by reference certain government ( Government) contract clauses (flow downs) associated with the Achaogen Government Contract(s) specified above, that Achaogen, as a prime contractor, must include, and by which Microgenics, as a subcontractor, must abide.

  1.2 Incorporated Government Contract Clauses

  (a) For BARDA Contract. This Agreement incorporates by reference Appendix A, Government Provisions for Commercial Item Subcontracts Under Contract No. HHSO100201000046C (BARDA 0046C Contract). Microgenics agrees to abide by all of the provisions listed in Appendix A hereto as a condition of performance of services pursuant to any duly-executed Exhibit under this Agreement.

  1.3 Changes to Government Contracts Provisions

Microgenics agrees that upon the request of Achaogen it will negotiate in good faith with Achaogen amendments to this Agreement to incorporate additional provisions herein or to change provisions hereof, as Achaogen may reasonably deem necessary in order to comply with the provisions of the applicable Achaogen Government Contract or with the provisions of amendment(s) to such Achaogen Government Contract. If any such amendment to this Agreement causes [***], an equitable adjustment shall be made pursuant to the Changes clause of this Agreement.

  1.4 RESERVED [Not applicable]

  1.5 Government Right to Inspection of Research and Development (Reference: FAR 52.246-9)

  (a) Microgenics recognizes that the Government has the right to inspect and evaluate work performed or being performed under the Achaogen Government Contract, including any such work performed or being performed under this Agreement, to the extent practicable at all reasonable places and times and in a manner that will not unduly delay the work, including the period of performance, and in any event before its termination.

  (b) If the Government performs any inspection or test on Microgenics' premises, Microgenics shall furnish all reasonable facilities and assistance for the safe and convenient performance of these duties.

  1.6 Representations and Certifications

Page 45 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. DB2/ 26356633.19





By executing this Agreement, Microgenics represents and certifies that:

  (a) neither it, nor any of its Principals (as defined hereinafter), is presently debarred, suspended, proposed for debarment or otherwise declared ineligible for participating in any federal or state procurement action by any federal, state, or local government or agency;

  (b) neither it, nor any of its Principals, has within the last three years, been convicted of, or had a civil judgment rendered against it, for any of the following: (i) the commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a federal, state or local government contract or agreement; (ii) a violation of federal or state antitrust statutes relating to the submission of offers; or (iii) the commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, or receiving stolen property;

  (c) it will comply with all applicable Federal laws and regulations regarding ethics in public acquisitions and procurement and performance of contracts;

  (d) RESERVED

  (e) it has not made or solicited and will not make or solicit kickbacks in violation of FAR 52.203-7 or the Anti- Kickback Act of 1986 (41 USC 51-58);

  (f) that (i) no federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress on his or her behalf in connection with the awarding of this Agreement; (ii) if any funds other than federal appropriated funds (including profit or fee received under a covered federal transaction) have been paid, or will be paid, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress on his or her behalf in connection with this Agreement, Microgenics shall complete and submit, with its offer, OMB standard form LLL, Disclosure of Lobbying Activities, to the Contracting Officer; and (iii) it will include the language of this certification in all subcontract awards at any tier and require that all recipients of subcontract awards in excess of $150,000 shall certify and disclose accordingly (the definitions and prohibitions contained in the clause at FAR 52.203- 12, Limitation on Payments to Influence Certain Federal Transactions, included in this Subsection 12.7 (f) and will be included in all such certifications);

  (g) that (i) if Microgenics has participated in a previous contract or subcontract subject to the Equal Opportunity clause (FAR 52.222-26), Microgenics has filed all required compliance reports; and (ii) representations indicating submission of required compliance reports, signed by proposed subcontractors, will be obtained before subcontract awards; and

  (h) that to the best of the Microgenics's knowledge and belief, there are no relevant facts or circumstances which could give rise to an organizational conflict of interest, as defined in FAR Subpart 9.5.

Microgenics agrees to provide immediate written notice to Achaogen if, at any time prior to termination, Microgenics learns that its certification was erroneous when submitted or has become erroneous by reason of changed circumstances. For the purpose of paragraphs (a)

Page 46 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





and (b) above, Principal means an officer; director, owner; partner; or a person having primary management or supervisory responsibilities within a business entity.



2.0 Government Interface

  2.1 Microgenics employees may not communicate with any Government employee, including Achaogen's contracting officer (Contracting Officer), Contracting Officer's representative or their respective support staff, concerning any work performed pursuant to this Agreement or any associated Exhibit or appendix, without advance written consent from Achaogen.

  2.2 Under no circumstances may Microgenics accept Government instruction on behalf of Achaogen. Microgenics is not authorized to make offers, commitments, or otherwise negotiate with the Government on Achaogen's behalf or its own behalf in its capacity as a subcontractor to Achaogen. In case of occurrence of any such events, Microgenics shall:

  (a) suggest to the Government representative that Achaogen be involved in all such discussions, and

  (b) immediately report to Achaogen any attempt by Government personnel to provide such instruction or conduct such negotiations.

  2.3 If Microgenics communicates with the Government regarding a Project, Microgenics's monthly contract management reports shall list all data exchanged and shall summarize each and every significant discussion with Government personnel during the reporting period.

3.0 Disputes

  3.1 Disputes Involving the Prime Contract and/or the Government

  (a) Any dispute arising under or related to this Agreement which relates to a matter for which Achaogen has recourse against the Government under the Achaogen Government Contract (also hereinafter sometimes referred to as the Prime Contract) shall be resolved as follows unless the Parties otherwise agree in writing.

  (b) Microgenics shall give Achaogen a fully supported written request for equitable adjustment or claim concerning any such dispute within [***] years after the basis of the equitable adjustment arises or claim accrues, but in no event later than [***], or Microgenics shall be barred from any remedy for such claim.

  (c) Achaogen shall forward such request for equitable adjustment or claim to the Contracting Officer on Microgenics's behalf for final decision, subject to the limitations and other conditions contained in this provision. Achaogen shall in good faith consult with Microgenics concerning the forwarding of such request for equitable adjustment or claim to the Contracting Officer.

  (d) Any final decision of the Contracting Officer under the Prime Contract as it relates to this Agreement, whether or not it results from a claim under Section 3.1(b) and (c) of this Agreement submitted on Microgenics's behalf under the provision stated above, shall be binding upon Microgenics; provided however, that Achaogen shall notify Microgenics immediately of any such final decision of the Contracting Officer and if: (i) Achaogen elects not to appeal such decision pursuant to the

Page 47 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





  Disputes clause of the Prime Contract; (ii) Achaogen thereafter receives, no less than [***] ([***]) days before the expiration of the period of appeal under the Disputes clause of the Prime Contract, a written request by Microgenics to appeal such decision, and (iii) Achaogen has the right of such appeal under the Prime Contract, then Achaogen shall file an appeal from the final decision on Microgenics's behalf.

  (e) If Achaogen appeals such a decision, whether at its election or at Microgenics's request, any decision upon such appeal by the Board of Contract Appeals, the United States Court of Federal Claims, or any other board or agency having jurisdiction over the appeal shall be binding upon Microgenics insofar as it relates to a claim under this Section 3.1 of this Agreement, provided however, that if Microgenics timely (i.e., no less than [***] ([***]) days before the expiration of the relevant period of appeal) requests Achaogen to bring a further appeal to obtain judicial review of such final decision by a court of competent jurisdiction, Achaogen shall do so, subject to the terms below. A final judgment in any such further appeal, if binding on Achaogen under the Prime Contract, shall in turn be binding on Microgenics insofar as it relates to a claim under this Section 3.1 of this Agreement.

  (f) In any appeal brought by Achaogen on behalf of Microgenics, or at Microgenics's request under the above provisions, [***] shall bear all costs and expenses incurred by Microgenics in prosecuting such appeal, including but not limited to, any legal fees or costs incurred. In any appeal taken or brought by Achaogen, whether at its election or at Microgenics request, Microgenics shall cooperate fully with Achaogen in its prosecution thereof in every reasonable manner and Microgenics shall be afforded reasonable opportunity to participate in the prosecution thereof to the extent Microgenics's interest may be affected. To the extent requested by Achaogen, Microgenics shall prosecute for Achaogen any appeal taken or brought at Microgenics request and, in such event, Achaogen shall assist Microgenics in every reasonable manner.

  (g) If Achaogen is required to certify any claim of Microgenics, Achaogen shall not forward such claim unless it is reasonably satisfied the claim is in good faith, and Achaogen can certify such claim to the Contracting Officer to the extent and manner required by the Contract Disputes Act, as applicable. Microgenics agrees to provide Achaogen with such information as Achaogen reasonably may deem necessary to make this determination, including but not limited to, its own certification in the form prescribed by the Contract Disputes Act or its implementing regulations. Such certification shall be executed by a person duly authorized to bind Microgenics. Microgenics agrees that, with respect to any claim or dispute that arises under or relates to the Prime Contract which, if it were Achaogen's claim, can properly be submitted for a decision of the Contracting Officer under the Disputes clause, its right of claim or appeal is limited to the procedures set forth in this provision.

  (h) Microgenics's failure to comply with the terms of this provision shall entitle Achaogen to terminate any such appeal on Microgenics's behalf. The rights and obligations described herein shall survive completion of and final payment under this Disputes section.

  3.2 Other Disputes Any dispute arising under or related to this Agreement which relates to a matter for which Achaogen has recourse against the Government under the Prime Contract shall be resolved in accordance with Subsection 3.1. In the event of any dispute between the

Page 48 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





  Parties arising out of or in connection with this Agreement that does not relate to a matter for which Sponsor has recourse against the Government under the Prime Contract, such dispute shall be resolved pursuant to Section 13.8 of the Agreement.

  3.3 Choice of Law: This Agreement is subject to and governed by the laws of the State of Delaware, U.S.A. without regard to conflict of law principles, as applicable except that any provision in this Agreement that is (i) incorporated in full text or by reference from the Federal Acquisition Regulation (FAR) or (ii) incorporated in full text or by reference from any agency regulation that implements or supplements the FAR or (iii) substantially based on any such FAR provision or agency regulation, shall be construed and interpreted according to the federal common law of government contracts as enunciated and applied by federal judicial bodies, boards of contract appeals, and quasi- judicial agencies of the federal government.

Page 49 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





APPENDIX A Government Provisions for Commercial Item Subcontracts  Under Contract Number HHSO100201000046C (BARDA Prime Contract)

The following provisions, as they may be amended by the United States Government over time, are incorporated by reference with the same force and effect as if set forth in full text and shall be deemed to apply solely to such portions of work as are funded using Government funds. For the purposes of this Agreement, the term contract shall mean this Agreement; the terms Contractor and Company shall mean Microgenics; the term prime contractor shall mean Achaogen; and the terms Government and Contracting Officer may mean Achaogen or the United States Government as expressly indicated on this document. The dollar amount listed parenthetically in the titles of some referenced clauses in this Appendix A is the applicability threshold for the clause. If the total cumulative amount invoiced by Microgenics for all Government Sponsored Projects performed under the BARDA Prime Contract is expected to exceed this amount, the clause applies.

FEDERAL ACQUISITION REGULATION

Clause Date Title FAR 52.202-1 Jul-04 Definitions (Over $100,000) FAR 52.203-3 Apr-84 Gratuities (Over $100,000) FAR 52.203-5 Apr-84 Covenant Against Contingent Fees (Over $100,000). Substitute Achaogen  for Government or United States in paragraph (a) of this clause, provided however that Achaogen may annul the contract or deduct amounts only to the extent of a Government annulment or deduction due to conduct of Microgenics. FAR 52.203-6 Sep-06 Restrictions on Subcontractor Sales to the Government (Over $100,000) FAR 52.203-7 Jul-95 Anti-Kickback Procedures (Over $100,000) FAR 52.203-8 Jan-97 Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity (Over $100,000). Substitute Achaogen  for Government or United States throughout this clause, provided however that Achaogen may rescind the contract and recover funds only to the extent of a Government rescission or recovery due to conduct of Microgenics. FAR 52.203-10 Jan-97 Price or Fee Adjustment for Illegal or Improper Activity (Over $100,000) Substitute Achaogen  for Government or United States throughout this clause and Achaogen for Contracting Officer throughout this clause, provided however that Achaogen may make a reduction only to the extent that the Government makes a reduction due to conduct of Microgenics. FAR 52.203-12 Sep-07 Limitation on Payments to Influence Certain Federal Transactions (Over $100,000) FAR 52.203-13 Apr-10 Contractor Code of Business Ethics and Conduct (applies if Agreement is over $5,000,000 and has a performance period greater than 120 days). Disclosures made under this clause shall be made directly to the government entities listed in the clause. FAR 52.203-14 Dec-07 Display of Hotline Poster(s). (d) Subcontracts. The Contractor shall include the substance of this clause, including this paragraph (d), in all subcontracts that exceed $5,000,000, except when the subcontract-(1) Is for the acquisition of a commercial item; or (2) Is performed entirely outside the United States.

Page 50 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Clause Date Title FAR 52.209-6 Sep-06 Protecting the Government's Interests When Subcontracting With Contractors Debarred, Suspended, or Proposed for Debarment (Over $30,000) FAR 52.215-2 Mar 09 Audit and Records- Negotiation (Over $100,000) (Only Government receives access and audit rights under this clause) FAR 52.215-21 Oct-97 Requirements for Cost or Pricing Data or Information Other Than Cost or Pricing Data-Modifications. Substitute Achaogen for Contracting Officer throughout this clause, provided however, that Achaogen may seek from Microgenics only such information as the Government has requested, and Microgenics shall deliver any such information directly and only to the Government. FAR 52.215-21 (as modified above) shall apply only with respect to modifications funded by the Government; FAR 52.215-21 shall not apply to modifications that are not funded by the Government. FAR 52.219-8 May-04 Utilization of Small Business Concerns (Over $100,000) FAR 52.222-3 Jun-03 Convict Labor FAR 52.222-21 Feb-99 Prohibition of Segregated Facilities FAR 52.222-26 Mar-07 Equal Opportunity (Over $10,000) FAR 52.222-35 Sept-06 Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (Over $100,000) FAR 52.222-36 Jun-98 Affirmative Action for Workers with Disabilities (Over $10,000) FAR 52.222-37 Sep-06 Employment Reports on Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (Over $100,000) FAR 52.222-39 Dec-04 Notification of Employee Rights Concerning Payment of Union Dues or Fees. Applicable if value of this Agreement equals or exceeds $100,000. FAR 52.222-50 Feb-09 Combating Trafficking in Persons FAR 52.222-54 Jan-09 Employment Eligibility Verification. Applicable to services and construction subcontracts that: (1) exceed $3,000; and (2) include work performed in the United States. This clause does not apply to subcontracts for commercial services that are (a) part of the purchase of a Commercially Available Off the Shelf (COTS) item (or an item that would be a COTS item, but for minor modifications) (b) performed by the COTS provider, and (c) are normally provided for that COTS item. FAR 52.223-6 May-01 Drug-Free Workplace FAR 52.224-1 Apr-84 Privacy Act Notification (If subcontract requires design, development, or operation of a system of records) FAR 52.224-2 Apr-84 Privacy Act (If subcontract requires design, development, or operation of a system of records) FAR 52.225-1 Feb-09 Buy American Act- Supplies FAR 52.225-13 Jun-08 Restrictions on Certain Foreign Purchases FAR 52.227-1 Dec-07 Authorization and Consent, Alternate I (Apr 1984) (Over $100,000) FAR 52.227-2 Dec-07 Notice and Assistance Regarding Patent and Copyright Infringement (Over $100,000). Substitute Achaogen for Contracting Officer throughout this clause. Insert or Achaogen after Government throughout this clause.

Page 51 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Clause Date Title FAR 52.227-11 Dec-07 Patent Rights -Ownership by the Contractor (Only Government receives license; Achaogen receives no license.) (Note: In accordance with FAR 27.303(b)(2), paragraph (e) is modified to include the requirements in FAR 27.303(b)(2)(i) through (iv). The frequency of reporting in (i) is annual. Microgenics shall provide to Achaogen a copy of any notice or election that Microgenics submits to the Contracting Officer pursuant to subparagraph (c)(1), (c)(2) and (e)(3). FAR 52.227-16 Jun-87 Additional Data Requirements. Substitute Achaogen for Contracting Officer throughout this clause, provided however, that Achaogen may order from Microgenics only such data that the Government has ordered and provided further that the following data are hereby specifically identified for purposes of FAR 52.227-16(b), and are not subject to disclosure obligations under FAR 52.227-16, and shall not be disclosed: (i) Immunoassay Technologies (as defined in Section 1.16); (ii) Microgenics Know-How (as defined in Section 1.18) related to Immunoassay Technologies; and (iii) any and all limited rights data (i.e., data that embody trade secrets or are commercial or financial and confidential or privileged, to the extent such data pertain to items, components, or processes developed at private expense, including minor modifications) not already included in (i) or (ii). FAR 52.242-15 Aug-89 Stop Work Order (April 1984) (Achaogen may issue stop work order only to the extent the Government issues a stop work order) Substitute Achaogen for Contracting Officer throughout this clause. FAR 52.244-5 Dec-96 Competition in Subcontracting FAR 52.244-6 Jun-10 Subcontracts for Commercial Items FAR 52.245-1 Aug-10 Government Property Applicable where government property involved in performance of subcontract; Contracting Officer means Achaogen except in the definition of Property Administrator and in paragraph h(1)(iii) and where it is unchanged, and in paragraphs (c) and (h)(4) where it includes Achaogen. Government is unchanged in the phrases Government property and Government furnished property and where elsewhere used except in paragraph (d)(1) where it means Achaogen and except in paragraphs (d)(2) and (g) where the term includes Achaogen.

THE DEPARTMENT OF HEALTH AND HUMAN SERVICES SUPPLEMENTAL REGULATION PROVISIONS

Clause Date Title HHSAR 352.203-70 Jan-06 Anti-lobbying HHSAR 352.223-70 Jan-06 Safety and Health HHSAR 352.224-70 Jan-06 Privacy Act (if subcontract requires design, development, or operation of a system of records) HHSAR 325.242-73 Jan-06 Withholding of Contract Payments HHSAR 352.270-4 Jan-06 Protection of Human Subjects HHSAR 352.270-5 Jan-06 Care of Live Vertebrate Animals HHSAR 352.270-6 Jan-06 Restriction on Use of Human Subjects

Page 52 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





HHSAR 352.227-70 Jan-06 Publications and Publicity

Page 53 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





BARDA REQUIRED PROVISIONS

Prime Contract Provision

Clause

H.2: Human Materials The acquisition and supply of all human specimen material (including fetal material) used under this contract shall be obtained by Company in full compliance with applicable State and Local laws and the provisions of the Uniform Anatomical Gift Act in the United States, and no undue inducements, monetary or otherwise, will be offered to any person to influence their donation of human material.

Company shall provide Achaogen with written documentation that all human materials obtained as a result of research involving human subjects conducted under this contract, by collaborating sites, or by subcontractors identified under this Agreement were obtained with prior approval by the Office for Human Research Protections of an Assurance to comply with the requirements of 45 CFR 46 to protect human research subjects.

Provision by Company to Achaogen of a properly completed Protection of Human Subjects Assurance Identification/IRB Certification/Declaration of Exemption, Form OMB No. 0990-0263 (formerly optional form 310), certifying IRB review and approval of the protocol from which the human materials were obtained constitutes the written documentation required.

H.3: Research Involving Human Fetal Tissue

All research involving human fetal tissue shall be conducted in accordance with the Public Health Service Act, 42 U.S.C. 289g-1 and 289g-2. Implementing regulations and guidance for conducting research on human fetal tissue may be found at 45 C.F.R. 46, Subpart B, and http://grants1.nih.gov/grants/guide/notice-files/not93- 235.html and any subsequent revisions to this NIH Guide to Grants and Contracts (Guide) Notice.

Company shall make available, for audit by Achaogen, the secretary, HHS, the physician statements and informed consents required by 42 U.S.C. 289g-1(b) and (c), or ensure HHS access to those records, if maintained by an entity other than the Contractor.

H.4: Needle Exchange Company shall not use contract funds to carry out any program of distributing sterile needles or syringes for the hypodermic injection of any illegal drug.

H.5: Press Releases Company shall clearly state, when issuing statements, press releases, requests for proposals, bid solicitations and other documents describing projects or programs funded in whole or in part with Federal money: (1) the percentage of the total costs of the program or project which will be financed with Federal money; (2) the dollar amount of Federal funds for the project or program; and (3) the percentage and dollar amount of the total costs of the project or program that will be financed by nongovernmental sources.

H.7: Animal Welfare All research involving live, vertebrate animals shall be conducted in accordance with the Public Health Service Policy on Humane Care and Use of Laboratory Animals. This policy may be accessed at: http://grants1.nih.gov/grants/olaw/references/phspol.htm.

H.8: Protection of Personnel who Work with Nonhuman Primates

All Company personnel who work with nonhuman primates or enter rooms or areas containing nonhuman primates shall comply with the procedures set forth in NIH Policy Manual 3044-2, entitled, Protection of NIH Personnel Who Work with Nonhuman Primates, located at the following URL: http://www1.od.nih.gov/oma/manualchapters/intramural/3044-2/

Page 54 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Prime Contract Provision Clause

H.9: Publications and Publicity

No information related to data obtained under this contract shall be released or publicized without the prior written consent of Achaogen and the Contracting Officer Technical Representative.

In addition to the requirements of HHSAR 352.227-70, Publications and Publicity incorporated by reference in section I of this contract shall acknowledge the support of the Biomedical Advanced Research and Development Authority whenever publicizing the work under this contract in any media by including an acknowledgment substantially as follows:

This project has been funded in whole or in part with Federal funds from the Biomedical Advanced Research and Development Authority, office of the Assistant Secretary for Preparedness and response, Office of the Secretary, Department of Health and Human Services, Under Contract No. HHSO100201000046C. H.10: Reporting Matters Involving Fraud, Waste and Abuse

Anyone who becomes aware of the existence or apparent existence of fraud, waste and abuse in BARDA funded programs is encouraged to report such matters to the HHS Inspector General's Office in writing or on the Inspector General's Hotline. The toll free number is 1-800-HHS-TIPS (1-800-447-8477). All telephone calls will be handled confidentially. The e-mail address is Htips@os.dhhs.gov and the mailing address is: Office of Inspector General Department of Health and Human Services TIPS HOTLINE P.O. Box 23489 Washington, D.C. 20026. H.11 Prohibition on Contractor Involvement with Terrorist Activities

Company acknowledges that U.S. Executive Orders and Laws, including but not limited to E.O. 13224 and P.L. 107-56, prohibit transactions with, and the provision of resources and support to, individuals and organizations associated with terrorism. It is the legal responsibility of Company to ensure compliance with these Executive Orders and Laws. This clause must be included in all subcontracts issued under this contract.

H.15: Privacy Act Applicability

Notification is hereby given that Company and its employees are subject to criminal penalties for violation of the Privacy Act to the same extent as employees of the Government.

H.16: Laboratory license requirement

Company shall comply with all applicable requirements of Section 353 of the Public Health Service Act (Clinical Laboratory Improvement Act as Amended). This requirement shall also be included in any subcontract for services under this contract.

The parties anticipate that no part of the performance of this Agreement will be subject to the Clinical Laboratory Improvement Act As Amended.

H.17: Dissemination of Information

Except for any application to the FDA for approval of a diagnostic, any publication in connection with such FDA filing or approval, and any filing in connection with obtaining patent protection, no information related to data obtained under this contract shall be released or publicized without the prior written consent of the Contracting officer, to be obtained through Achaogen.

H.18: Identification and Disposition of Data

Company will be required to provide certain data generated under this contract to the Department of Health and Human Services (DHHS). DHHS reserves the right to review any other data determined by DHHS to be directly related to and/or generated under this contract. Company shall keep copies of all data required by the Food and Drug Administration (FDA) relevant to this contract for the time period specified by the FDA.

Page 55 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Prime Contract Provision

Clause

H.19: Information on Compliance With Animal Care Requirements

Registration with the U.S. Dept. of Agriculture (USDA) is required to use regulated species of animals for biomedical purposes. USDA is responsible for the enforcement of the Animal Welfare Act (7 U.S.C. 2131 et. seq), http://www.nal.usda.gov/awic/legislat/awa.htm

The Public Health Service (PHS) Policy is administered by the Office of Laboratory Animal Welfare (OLAW) http://grants2.nih.gov/grants/olaw/olaw.htm. An essential requirement of the PHS Policy, http://grants2.nih.gov/grants/olaw/references/phspol.htm is that every institution using live vertebrate animals must obtain an approved assurance from OLAW before they can receive funding from any component of the U.S. Public Health Service.

The PHS Policy requires that Assured institutions base their programs of animal care and use on the Guide for the Care and Use of Laboratory Animals http://www.nap.edu/readingroom/books/labrats/ and that they comply with the regulations (9 C.F.R., subchapter A) http://www.nal.usda.gov/awic/legislat/usdaleg1.htm issued by the U.S. Department of Agriculture (USDA) under the Animal Welfare Act. The Guide may differ from USDA regulations in some respects. Compliance with USDA regulations is an absolute requirement of this Policy.

The Association for Assessment and Accreditation of Laboratory Animal Care International (AAALAC) http://www.aaalac.org is a professional organization that inspects and evaluates programs of animal care institutions at their request. Those that meet the high standards are given accredited status. As of the 2002 revision of the PHS policy, the only accrediting body recognized by PHS is the AAALAC. While AAALAC Accreditation is not required to conduct biomedical research, it is highly desirable. AAALAC uses the Guide as their primary evaluation tool. They also use the Guide for the Care and Use of Agricultural Animals in Agricultural Research and Teaching. It is published by the American Science Societies. http://www.fass.org.

Page 56 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Prime Contract Provision

Clause

H.20: Requirements for Adequate Assurance of Protection of Vertebrate Animal Subjects

The PHYS Policy on Humane Care and Use of Laboratory Animals requires that applicant organizations proposing to use vertebrate animals file a written Animal Welfare Assurance with the Office for Laboratory Animal Welfare (OLAW), establishing appropriate policies and procedures to ensure the humane care and use of live vertebrate animals involved in research activities supported by the PHS. The PHS Policy stipulates that an applicant organization, whether domestic or foreign, bears responsibility for the humane care and use of animals in PHS-supported research activities. Also the PHS policy defines animal as any live, vertebrate animal used, or intended for use, in research, research training, experimentation, biological testing or for related purposes. This policy implements and supplements the U.S. Government Principles for the Utilization and Care of Vertebrate Animals Used in Testing, Research, and Training, and requires that institutions use the Guide for the Care and Use of Laboratory Animals as a basis for developing and implementing an institutional animal care use program. This Policy does not affect applicable State or local laws or regulations that impose more stringent standards for the care and use of laboratory animals. All institutions are required to comply, as applicable, with the Animal Welfare Act, as amended and other Federal statutes and regulations relating to animals. These documents are available from the Office of Laboratory Animal Welfare, National Institutes of Health, Bethesda, MD 20892, (301) 496-7163. http://grants.nih.gov/grants/olaw/olaw.htm.

No PHYS supported work or research involving vertebrate animals will be conducted by an organization, unless that organization is operating in accordance with an approved Animal Welfare Assurance and provides verification that the Institutional Animal Care and Use Committee (IACUC) has reviewed and approved the proposed activity in accordance with the PHS policy. Applications may be referred by the PHS back to the institution for further review in the case of an apparent or potential violations of the PHS policy. No award to an individual will be made unless that individual is affiliated with an assured organization that accepts responsibility for compliance with the PHS Policy. Foreign applicant organizations applying for PHS awards for activities involving vertebrate animals are required to comply with PHS Policy or provide evidence that acceptable standards for the humane care and use of animals will be met. Foreign applicant organizations are not required to submit IACUC approval, but should provide information that is satisfactory to the Government to provide assurances for the humane care of such animals.

H.21: Approval of Required Assurance by OLAW

Under governing regulations, federal funds which are administered by DHHS, Office of Biomedical Advanced Research and Development Authority (BARDA) shall not be expended by the contractor for research involving live vertebrate animals, nor shall live vertebrate animals be involved in research activities by Company under this award unless a satisfactory assurance of compliance with 7 U.S.C. 2316 and 9 CFR Sections 2.25-2.28 is submitted within 30 days of the date of this award and approved by the Office of Laboratory Animal Welfare (OLAW). Each performance site (if any) must also assure compliance, with the following restriction: Only activities which do not directly involve live vertebrate animals (i.e., are clearly severable and independent from those activities) may be conducted by the contractor or individual performance sites pending OLAW approval of their respective assurance of compliance.

Page 57 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Prime Contract Provision

Clause

H.22: Registration with the Select Agent Program for Work involving the possession, use, and/or transfer of select biological agents or toxins

Company shall not conduct work involving select agents or toxins under this contract until it and any associated subcontractor(s) comply with the following:

For prime or subcontract awards to domestic institutions that possess, use, and/or transfer Select Agents under this contract, the institution must comply with the provisions of 42 C.F.R. part 73, 7 C.F.R. part 331, and/or 9 C.F.R. part 121 ( http://www.aphis.usda.gov/programs/ag_selectagent/FinalRule3-18-05.pdf ) as required, before using NIH funds for work involving a Select Agent or Toxin. No government funds can be used for research involving a Select Agent or Toxin at a domestic institution without a valid registration certificate.

For prime or subcontract awards to foreign institutions that possess, use, and/or transfer a Select Agent or Toxin, before using NIH funds for any work directly involving a Select Agent or Toxin, the foreign institution must provide information satisfactory to the government that safety, security, and training standards equivalent to those described in 42 C.F.R. part 73, 7 C.F.R. part 331, and/or 9 C.F.R. part 121 are in place and will be administered on behalf of all Select Agent or Toxin work supported by these funds. The process for making this determination includes inspection of the foreign laboratory facility by a government representative. During this inspection, the foreign institution must provide the following information: concise summaries of safety, security, and training plans; names of individuals at the foreign institution who will have access to the Select Agents and procedures for ensuring that only approved and appropriate individuals, in accordance with institution procedures, will have access to the Select Agents under the contract; and copies of or links to any applicable laws, regulations, policies, and procedures applicable to that institution for the safe and secure possession, use, and/or transfer of select agents. No funds can be used for work involving a Select Agent or Toxin at a foreign institution without written approval from Achaogen.

Listings of HHS select agents and toxins, and overlap select agents or toxins as well as information about the registration process for domestic institutions, are available on the Select Agent Program Web site at http:// www.cdc.gov/od/sap/ and http://www.cdc.gov/od/sap/docs/salist.pdf.

Listings of USDA select agents and toxins as well as information about the registration process for domestic institutions are available on the APHIS/USDA website at: http://www.aphis.usda.gov/programs/ag_selectagent/ index.html and: http://www.aphis.usda.gov/programs/ag_selectagent/ag_bioterr_forms.html

For foreign institutions, see the NIAID Select Agent Award information: http://www.niaid.nih.gov/ncn/clinical/default_biodefense.htm.

H.23: EPA Energy Star Requirements

All microcomputers, including personal computers, monitors, and printers purchased with government funds in the performance of a contract shall be equipped with or meet the energy efficient low-power standby feature as defined by the EPA Energy Star program unless the equipment always satisfies Energy Star efficiency levels.

Page 58 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Prime Contract Provision Clause

H.24: Acknowledgement of Federal Funding

(a)Section 507 of P.L. 104-208 mandates that contractors funded with Federal dollars, in whole or in part, acknowledge Federal funding when issuing statements, press releases, requests for proposals, bid solicitations and other documents. Contractors are required to state (1) the percentage and dollar amounts of the total program or project costs financed with federal money, and (2) the percentage and dollar amount of the total costs financed by nongovernmental sources. This requirement is in addition to the continuing requirement to provide an acknowledgement of support and disclaimer on any publication reporting the results of a contract funded activity. (b)Publication and Publicity. The contractor shall acknowledge the support of the Department of Health and Human Service, Office of the Assistant Secretary for Preparedness and Response, Biomedical Advanced Research and Development Authority whenever publicizing the work under this contract in any media by including an acknowledgment substantially as follows: This project has been funded in whole or in part with Federal funds from the Office of the Assistant Secretary for Preparedness and Response, Biomedical Advanced Research and Development Authority, under Contract no. HHSO100201000046C. (c)Press Releases. Pursuant to Section 508 of Public Law 105-78, the contractor shall clearly state, when issuing statements, press releases, requests for proposals, bid solicitations and other documents describing projects or programs funded in whole or in part with federal money that: (1) the percentage of the total costs of the program or project which will be financed with federal money; (2) the dollar amount of Federal funds for the project or program; and (3) the percentage and dollar amount of the total costs of the project or program that will be financed by nongovernmental sources. H.25: Manufacturing Standards

The Current Good Manufacturing Practice Regulations (cGMP) (21 C.F.R. Parts 210-211) and regulations pertaining to biological products (21 C.F.R. Part 600) will be the standard to be applied for manufacturing, processing, packing, storage, and delivery of this product.

If at any time during the life of the contract, Company fails to comply with cGMP in the manufacturing, processing and packaging of this product and such failure results in a material adverse effect on the safety, purity or potency of this product (a material failure), the Contractor shall have thirty (30) calendar days from the time such material failure is identified to cure such material failure. If the Contractor fails to take such an action within the thirty (30) calendar day period, then the contract may be terminated for default.

H.26: Export Control Notification

Company is responsible for ensuring compliance with all export control laws and regulations that may be applicable to the export of and foreign access to their proposed technologies.

Page 59 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.





Prime Contract Provision Clause

H.27: Institutional responsibility Regarding Conflicting Interests of Investigators

Company shall comply with the requirements of 45 CFR Part 94, Responsible Prospective Contractors, which promotes objectivity in research by establishing standards to ensure that investigators (defined as the principle investigator and any other person who is responsible for design, conduct, or reporting of research funded under BARDA contracts) will not be biased by any conflicting financial interest. For the purposes of this part relating to financial interest, investigator includes the investigator's spouse and dependent children.

Company shall at a minimum:

(a)Maintain a written, enforceable policy on conflict of interest and inform each investigator of the policy, the investigator's reporting responsibilities, and the applicable regulations. The contractor must take reasonable steps to ensure that investigators working as collaborators or subcontractors comply with the regulations. (b)Designate and official to review financial disclosure statements from each investigator participating in BARDA-funded research. Based on established guidelines consistent with the regulations, the designated official must determine whether a conflict of interest exists, and if so, determine what actions should be taken to manage, reduce, or eliminate such a conflict. (c)Require updating of financial disclosure statements during the period of award. (d)Maintain records taken under this provision for three years after final payment. (e)Establish adequate enforcement mechanisms. If a conflict of interest is identified, the Institution shall report to Achaogen the existence of the conflicting interest found. This report shall be made and the conflicting interest managed, reduced, or eliminated, at least on a temporary basis, within thirty (30) days of that identification.



ORDER OF PRECEDENCE

In the event of a conflict between the terms of this Appendix and any term of the Agreement or an Exhibit or other appendix issued there under, the terms of this Appendix shall govern.



Page 60 of 60 [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions. 
Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?

Answer: 116422


Question: Exhibit 10.6

OPERATIONS AND MAINTENANCE AGREEMENT

Between

Piñon Gathering Company, LLC

And

SandRidge Midstream, Inc.













TABLE OF CONTENTS

i

              PAGE ARTICLE I DEFINITIONS     1   ARTICLE II ENGAGEMENT OF OPERATOR     6   2.1 Engagement     6   2.2 Independent Contractor     6   2.3 Owner Cooperation     6   ARTICLE III TERM; RESIGNATION OR REMOVAL OF OPERATOR     7   3.1 Term     7   3.2 Owner Default     7   3.3 Operator Default     7   3.4 Cooperation with Owner or Successor Operator     8   3.5 Effect of Termination     8   3.6 No Breach     8   ARTICLE IV DUTIES AS OPERATOR     9   4.1 Duties as Operator     9   4.1.1 Operation and Maintenance of the Gathering System     9   4.1.2 Purchase of Material and Supplies     9   4.1.3 Personnel     9   4.1.4 Payment of Operating Expenses     9   4.1.5 Proposed Operating Expense Budget     10   4.1.6 Capital Projects     10   4.1.7 Emergencies     11   4.1.8 Reporting By Operator     11   4.1.9 Commercial Activities     12   4.1.10 Regulatory Affairs     12   4.1.11 Devotion of Time     12   4.2 Standard of Care     12   4.3 Limitation of Authority     13   4.3.1 Binding Owner     13   4.3.2 Asset Sales     13   4.3.3 Material Alteration of Owner's Business     13   4.3.4 Debt 13         ARTICLE V COST REIMBURSEMENT     13   5.1 Responsibility for Costs and Expenses     13   5.2 Procedure     13







TABLE OF CONTENTS

ii

              PAGE 5.2.1 Invoicing and Payment     13   5.2.2 Disputes     14   5.3 Setoff     14   ARTICLE VI ACCOUNTING; REPORTS; RECORDS     14   6.1 Accounting Methods     14   6.2 Financial Statements     14   6.3 Accounting and Taxation     15   6.3.1 Maintenance of Accounts     15   6.3.2 Preparation of Tax Returns     15   6.3.3 Owner to Supply Information     16   6.4 Banking     16   6.5 Independent Audits     16   6.6 Credit Inquiries     17   ARTICLE VII FORCE MAJEURE     18   7.1 Procedure     18   7.2 Strikes     18   ARTICLE VIII INSURANCE AND INDEMNIFICATION     18   8.1 Operator Insurance     18   8.2 Contractors     19   8.3 Notice of Claims     20   8.4 Mutual Release and Indemnification     20   8.4.1 Owner's Indemnification     20   8.4.2 Operator's Indemnification     20   ARTICLE IX GENERAL PROVISIONS     21   9.1 Notices     21   9.2 Rights     21   9.3 Applicable Laws     22   9.4 Rules of Construction     22   9.5 Governing Law     22   9.6 Dispute Resolution     22   9.6.1 Negotiation     22   9.6.2 Jurisdiction and Venue     22   9.6.3 Jury Waiver     23   9.6.4 Costs and Expenses     23   9.7 Limitation of Liability     23







TABLE OF CONTENTS

EXHIBITS:

     EXHIBIT A — DUTIES AND RESPONSIBILITIES OF OPERATOR

     EXHIBIT B — FORM OF MONTHLY OPERATING AND FINANCIAL REPORT

iii

              PAGE 9.8 Entirety of Agreement, Amendments     23   9.9 Waivers     24   9.10 Exhibits     24   9.11 Headings     24   9.12 Assignment     24   9.13 Rights and Remedies     24   9.14 Counterparts     24   9.15 No Third Party Beneficiary     24   9.16 Further Assurances     25







OPERATIONS AND MAINTENANCE AGREEMENT

     This OPERATIONS AND MAINTENANCE AGREEMENT dated June 30, 2009 (the Effective Date), is made and entered into by and between  Piñon Gathering Company, LLC, a Delaware limited liability company (Owner), with offices at 333 Clay Street, Suite 4150, Houston, Texas 77002,  and SandRidge Midstream, Inc., a Texas corporation (Operator), with offices at 123 Robert S. Kerr Avenue, Oklahoma City, Oklahoma 73102.

RECITALS

     A. Pursuant to that certain Membership Interest Purchase Agreement between Operator and TCW Pecos Midstream, L.L.C., a Texas limited  liability company (TCW Pecos Midstream) dated as of even date herewith (the Membership Interest Purchase Agreement), TCW Pecos  Midstream has purchased from Operator all issued and outstanding membership interests in Owner, which owns the Gathering System (as  hereinafter defined).

     B. Owner wishes to retain Operator to maintain and operate the Gathering System and advance the commercial interests of Owner through the  negotiation and execution of agreements relative to the commercial offerings provided by Owner, as well as administering the business and  regulatory affairs of Owner relating to the Gathering System, all in accordance with the terms and conditions set forth below.

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, Operator and Owner  hereby agree as follows:

ARTICLE I  DEFINITIONS

     Except as otherwise defined in this Article I, capitalized terms used in this Agreement shall have the meanings assigned to them in the Gathering  Agreement.

     Adjustment Claims shall have the meaning set forth in Section 6.5.

     Affiliate means, with respect to any Person, any other Person that, directly or indirectly, controls, is controlled by, or is under common  control with, such specified Person through one or more intermediaries or otherwise. For the purposes of this definition, control means, where  used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies  of such Person, whether through the ownership of Voting Securities or interests, by contract or otherwise, and the terms controlling and  controlled have correlative meanings.

     Agreement means this Operations and Maintenance Agreement (including all exhibits), as amended from time to time in accordance with the  terms hereof.

     Audit Costs shall have the meaning set forth in Section 6.5.









     Business Day means any calendar day, other than a Saturday or Sunday, on which commercial banks in Dallas, Texas are open for business.

     Calendar Year means the time period from January 1 through December 31 of the same calendar year.

     Capital Project means any capital expenditure to repair, maintain, construct, expand, or modify the Gathering System.

     Capital Project Proposal shall have the meaning set forth in Section 4.1.6.

     Claim means any lawsuit, claim, proceeding, investigation, review, audit or other cause of action of any kind.

     Company Conveyance means that certain Assignment of Membership Interests dated as of June 30, 2009, between Operator and TCW Pecos  Midstream, together with all amendments, modifications or waivers thereto.

     Confidentiality and Disclosure Agreement means that certain Confidentiality and Disclosure Agreement dated as of June 30, 2009, between  SandRidge Energy, Inc., TCW Asset Management Company, and Piñon Gathering Company, LLC, together with all amendments, modifications or  waivers thereto.

     Constituent of Concern means any substance defined as a hazardous substance, hazardous waste, hazardous material, toxic substance, solid  waste, pollutant or contaminant by an Environmental Law.

     Dedicated Gas shall have the meaning ascribed to such term in the Gathering Agreement.

     Effective Date shall have the meaning set forth in the preamble to this Agreement.

     Emergency means a sudden or unexpected event that causes, or risks causing, imminent material damage to the Gathering System, death or  injury to any Person, or material damage to property or the environment.

     Emergency Work shall have the meaning set forth in Section 4.1.7.

     Enterprise Gathering Agreement means that certain Gas Gathering Agreement dated as of June 26, 2009, between Enterprise Products  Operating, LLC and Operator, together with all amendments, modifications or waivers thereto.

     Environmental Law means all applicable Laws and Environmental Permits of any Governmental Authority relating to the environment, natural  resources, or the protection thereof, including, without limitation: (a) all requirements pertaining to liability for reporting, management, licensing,  permitting, investigation, and remediation of emissions, discharges, releases, or threatened releases of a Constituent of Concern; and (b) CERCLA,  the Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq. the Federal Clean Water Act, the Federal

2







Clean Air Act, the Federal Solid Waste Disposal Act (which includes the Resource Conservation and Recovery Act), the Federal Toxic Substances  Control Act, and the Federal Insecticide, Fungicide and Rodenticide Act, the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq., and the Safe  Drinking Water Act, 42 U.S.C. § 300f et seq. and any applicable Law relating to health, safety, the environment, natural resources or the protection  thereof, each as amended from time to time, including any regulations promulgated pursuant thereto, and any state or local counterparts.

     Environmental Permits all permits, licenses, registrations, authorizations, certificates and approvals, and any other similar items, of  Governmental Authorities required by Environmental Laws and necessary for or held in connection with the ownership and/or operation the  Gathering System or any of the transactions contemplated hereby.

     Force Majeure means any cause or causes not reasonably within the control of the Party claiming suspension and which, by the exercise of  reasonable diligence, such Party is unable to prevent or overcome, including, without limitation, acts of God, acts, omissions to act, and/or delays  in action of federal, state, or local government or any agency thereof, strikes, lockouts, work stoppages, or other industrial disturbances, acts of a  public enemy, sabotage, wars, blockades, insurrections, riots, acts of terror, epidemics, landslides, lightning, earthquakes, fires, storms, storm  warnings, floods, washouts, extreme cold or freezing weather, arrests and restraints of governments and people, civil or criminal disturbances,  interruptions by governmental or court orders, present and future valid orders of any regulatory body having jurisdiction, explosions, mechanical  failures, breakage, or accident to equipment installations, machinery, compressors, or lines of pipe, and associated repairs, freezing of wells or lines  of pipe, partial or entire failure of wells, pipes, facilities, or equipment, electric power unavailability or shortages, failure of pipelines or carriers to  transport, partial or entire failure or refusal of operators of upstream or downstream pipelines or facilities to receive gas, governmental regulations,  and inability to obtain or timely obtain, or obtain at a reasonable cost, after exercise of reasonable diligence, pipe, materials, equipment, rights-of- way, servitudes, governmental approvals, or labor, including those necessary for the facilities provided for in this Agreement.

     GAAP means generally accepted accounting principles, consistently applied.

     Gathering Agreement means that certain Gas Gathering Agreement dated as of even date herewith by and between SandRidge Exploration  and Production, LLC, as Shipper, and Owner, as Gatherer, as amended, restated or otherwise modified from time to time.

     Gathering System shall have the meaning ascribed to such term in the Gathering Agreement.

     Governmental Authority means any federal, state, municipal, local or similar governmental authority, regulatory or administrative agency,  court or arbitral body with jurisdiction over the Parties, this Agreement, any of the transactions contemplated hereby or the Gathering System.

     Guaranty Agreements means, collectively, that certain (a) Guaranty Agreement dated as of June 30, 2009, by SandRidge Energy, Inc. in favor  of TCW Pecos Midstream, (b) Guaranty

3







Agreement dated as of June 30, 2009, by SandRidge Energy, Inc. in favor of Owner, (c) Guaranty Agreement dated as of June 30, 2009, by  SandRidge Exploration and Production, LLC in favor of Owner, and (d) Guaranty Agreement dated as of June 30, 2009, by Operator in favor of  Owner, in each case, together with all amendments, modifications or waivers thereto.

     Intercompany Conveyance means that certain Assignment, Bill of Sale and Conveyance dated as of June 30, 2009, between Operator and  Owner, together with all amendments, modifications or waivers thereto.

     Law means any statute, writ, law, common law, rule, regulation, ordinance, order, judgment, injunction, award, determination or decree of a  Governmental Authority, or any requirement under the common law.

     LLC Agreement means that certain Amended and Restated Limited Liability Company Agreement of Piñon Gathering Company, LLC,  together with all amendments, modifications or waivers thereto.

     Liability Claim means a Claim arising out of the administration, operation, or maintenance of the Gathering System, or arising out of or  incidental to the activities carried on or work performed or required by this Agreement.

     Loss means any loss, cost, expense, liability, damage, sanction, judgment, lien, fine, or penalty, including reasonable attorney's and  consultant's fees and expenses, incurred, suffered or paid by, or resulting to, the applicable indemnified Persons on account of (i) injuries  (including death) to any Person or damage to or destruction of any property, sustained or alleged to have been sustained in connection with or  arising out of the matters for which the indemnifying Party has indemnified the applicable indemnified Persons, (ii) any failure of any  representation or warranty made by Operator in this Agreement to be true and correct when made, or (iii) the breach of any covenant or agreement  made or to be performed by the indemnifying Party pursuant to this Agreement.

     Material Overpayment shall have the meaning set forth in Section 6.5.

     Membership Interest Purchase Agreement shall have the meaning set forth in the first recital of this Agreement.

     Operator shall have the meaning set forth in the preamble to this Agreement.

     Operator Change of Control means the occurrence of an event where upon (i) at least seventy-five percent (75%) of the equity interests in  Operator and (ii) at least seventy-five percent (75%) of the monthly volumes of Dedicated Gas projected to be produced during the period  extending from the date of calculation to the estimated date of the Trigger Event shall cease to be owned, directly or indirectly, by the same Person.

     Operator Indemnified Parties means, collectively, Operator, its successors and permitted assigns, and their respective Affiliates,  shareholders, members, partners, officers, directors, employees, and agents.

4







     Operator Parties means, collectively, Operator, Operator's Affiliates, and their respective successors and assigns; Operator Party means  any such Person individually.

     Owner shall have the meaning set forth in the preamble to this Agreement.

     Owner Indemnified Parties means, collectively, Owner, its successors and permitted assigns, and their respective Affiliates, shareholders,  members, partners, officers, directors, employees, and agents.

     Owner Operating Expense Account means the bank account designed by Owner as its operating expense account.

     Owner Revenue Account means the bank account designed by Owner as its revenue account.

     Party means either Owner or Operator, as applicable, and Parties means both Owner and Operator.

     Person means an individual, a corporation, a partnership, a limited partnership, a limited liability company, an association, a joint venture, a  trust, an unincorporated organization, or any other entity or organization, including a government or political subdivision or an agency or  instrumentality thereof.

     Preventing Factors shall have the meaning set forth in Section 6.3.1.

     Proposed Operating Expense Budget means, with respect to each period, the Proposed Operating Expense Budget established pursuant to  the Gathering Agreement for such period.

     Shipper shall have the meaning set forth in the Gathering Agreement.

     Subject Gathering Agreements means, collectively, the Gathering Agreement, the Enterprise Gathering Agreement and any gathering  agreements entered into in accordance with Section 4.1.9.

     Tax or Taxes means any (i) federal, state, provincial, county, local or foreign taxes, charges, fees, levies or other assessments, including all  sales and use, goods and services, ad valorem, transfer, gains, profits, excise, franchise, real and personal property, gross receipt, value added,  capital stock, production, business and occupation, disability, employment, payroll, license, estimated, stamp, custom duties, severance,  unemployment, social security, Medicare, alternative minimum or withholding taxes or charges imposed by any Governmental Authority, and  including any interest and penalties (civil or criminal) on or additions to any such taxes, but expressly excluding any income tax or tax based on  income, such as, without limitation, the franchise tax set forth in V.T.C.A. Tax Code Section 171.0001 et. seq., as the same may be amended or  recodified from time to time, and (ii) liability for items in (i) of any other Person by contract, operation of Law (including Treasury  Regulation 1.1502-6) or otherwise.

5







     Tax Returns means any return, report, election, declaration, statement, notice, information return, schedule, or other document (including any  related or supporting information) filed or required to be filed with any Governmental Authority in connection with the determination, assessment,  collection or administration of any Taxes or any income tax or tax based on income, such as, without limitation, the franchise tax set forth in  V.T.C.A. Tax Code Section 171.0001 et. seq., as the same may be amended or recodified from time to time, or the administration of any laws,  regulations or administrative requirements relating to any Taxes or any amendment thereof.

     Transaction Documents means, collectively, this Agreement, the Gathering Agreement, the Membership Interest Purchase Agreement, the  Intercompany Conveyance, the Company Conveyance, the Guaranty Agreements, the Confidentiality and Disclosure Agreement and the LLC  Agreement.

     Trigger Event shall have the meaning ascribed to such term in the Gathering Agreement.

     Voting Securities means, as it relates to a Person, securities of any class of such Person entitling the holders thereof to vote in the election  of, or to appoint, members of the board of directors or other similar governing body of the Person; provided that if such Person is a limited  partnership, Voting Securities of such Person shall be the general partner interest in such Person.

ARTICLE II  ENGAGEMENT OF OPERATOR

2.1 Engagement.

     Owner hereby appoints and retains Operator to manage, operate, and maintain the Gathering System and to administer the business and  regulatory affairs of Owner relating to the Gathering System in accordance with the terms and conditions set forth herein, and Operator hereby  accepts such appointment.

2.2 Independent Contractor.

     The Parties expressly understand and agree that Operator is acting and shall perform and execute the provisions of this Agreement as an  independent contractor unrelated to Owner or any Owner Affiliate, and the work performed by Operator hereunder shall be subject to Owner's  general right of inspection and approval. Nothing in this Agreement is intended to create a relationship, expressed or implied, of employer- employee or principal-agent between Owner and Operator or between Owner and any individual employed or provided to work hereunder by  Operator.

2.3 Owner Cooperation.

     Owner shall cooperate with Operator and provide Operator with such information as Operator may reasonably request from time to time in  connection with the performance of Operator's duties hereunder.

6







ARTICLE III  TERM; RESIGNATION OR REMOVAL OF OPERATOR

3.1 Term.

     This Agreement shall commence on the Effective Date and, unless terminated earlier pursuant to Section 3.2 or 3.3 of this Agreement, shall  continue until the twentieth (20th) anniversary of the Effective Date; provided, however, (i) Operator shall have the right to terminate this  Agreement at any time upon no less than 120 days prior written notice to Owner, if Operator provides a substitute operator acceptable to Owner,  as determined in its reasonable discretion, who (A) has experience operating similar assets, (B) has the ability to provide at least the same quality  of service as Operator, (C) has the financial ability to perform the obligations hereunder, and (D) is ready, willing and able to execute an operation  and maintenance agreement substantially similar to this Agreement and acceptable to Owner, as determined in its reasonable discretion, and  (ii) Owner shall have the right to terminate this Agreement at any time upon no less than 120 days prior written notice to Operator.

3.2 Owner Default.

     Operator may terminate this Agreement at any time upon the occurrence of any of the following:

If any of the above occurs and Operator elects to terminate this Agreement, then Operator may give a written notice of termination to Owner,  which termination shall be effective on the date specified by Operator in such notice, provided that such termination date shall be within 60 days  of the date such notice is delivered to Owner. Operator's notice of breach to Owner under Section 3.2(b) or (c) shall state with particularity the  breach alleged by Operator. To the extent Owner disputes the basis for Operator's notice of breach, then the matter shall be addressed under  Section 9.6. Nothing in this Section 3.2 shall be construed to limit or preclude any remedy Operator may have at law or in equity with respect to any  material breach by Owner.

3.3 Operator Default.

     Owner may terminate this Agreement at any time upon the occurrence of any of the following:

7

  (a)   the dissolution or bankruptcy of Owner;

  (b)   Owner fails to pay when due any amount due and payable hereunder, including, without limitation, any interest, fees, reimbursements or  indemnifications, and such failure shall continue for a period of 15 days after the due date thereof; or

  (c)   other than as set forth in clause (b) above, Owner breaches or fails to observe or perform any material term, condition, or obligation  contained in this Agreement and fails to correct, or fails to diligently pursue correction of, such breach within 60 days after receipt of  written notice from Operator of any such breach.

  (a)   the dissolution or bankruptcy of Operator;







If any of the above occurs and Owner elects to terminate this Agreement, then Owner may give a written notice of termination to Operator, which  termination shall be effective on the date specified by Owner in the notice, provided that such termination date shall be within 60 days of the date  the notice is delivered to Operator. Owner's notice of breach to Operator under Section 3.3(c) or (d) shall state with particularity the breach alleged  by Owner. To the extent Operator disputes the basis for Owner's notice of breach, then the matter shall be addressed under Section 9.6. Nothing in  this Section 3.3 shall be construed to limit or preclude any remedy Owner may have at law or in equity with respect to any material breach by  Operator.

3.4 Cooperation with Owner or Successor Operator.

     Upon the termination of this Agreement, Operator shall cooperate in the transition of operations to Owner or a successor operator and upon  Owner's request, will promptly deliver all books and records and other property (including, without limitation, intellectual property) of Owner to  Owner or the successor operator, as applicable.

3.5 Effect of Termination.

     Any termination of this Agreement pursuant to this Article III will release Operator from, and Owner agrees to indemnify Operator against any  liability accruing or accrued hereunder after the effective date of termination, except with respect to the obligations and liabilities of Operator that  survive termination. Termination of this Agreement shall not relieve the Parties from any liability or obligation accruing or accrued prior to the date  of such termination or deprive a Party not in breach (other than a breach which occurs because such Party is rightfully withholding performance in  response to a breach by the other Party) of its right to any remedy otherwise available to such Party.

3.6 No Breach.

     No violation of any of the terms or conditions of this Agreement shall be deemed a breach of this Agreement by Owner if and to the extent such  violation or failure results, directly or indirectly, from a breach of the Gathering Agreement by Shipper.

8

  (b)   an Operator Change of Control;

  (c)   Operator fails to pay when due any amount due and payable hereunder, including, without limitation, any interest, fees, reimbursements  or indemnifications, and such failure shall continue for a period of 15 days after the due date thereof; or

  (d)   other than as set forth in clause (c) above, Operator breaches or fails to observe or perform any material term, condition, or obligation  contained in this Agreement and fails to correct, or fails to diligently pursue correction of, such breach within 60 days after receipt of  written notice from Owner of any such breach.







ARTICLE IV  DUTIES AS OPERATOR

4.1 Duties as Operator.

     Operator shall be responsible for (1) administering the regulatory, business, and financial affairs of Owner; (2) maintaining the financial and  product accounting records of Owner; (3) preparing and distributing financial statements; (4) complying with any and all instructions it receives  from Owner with respect to the operation and maintenance of the Gathering System, provided that such instructions are consistent with applicable  Laws; (5) performing the requirements and obligations of Owner set forth in the Subject Gathering Agreements; and (6) taking any actions  necessary to avoid any exercise of remedies by any shipper under any Subject Gathering Agreement.

     4.1.1 Operation and Maintenance of the Gathering System.

     4.1.1.1 Operation of the Gathering System. Operator shall manage and operate the Gathering System, supervise the operation and  maintenance of the Gathering System and the construction and future modifications to the Gathering System, negotiate agreements in  Owner's name with third parties related to the operation of Owner's business (provided that (i) Owner shall have the right to approve or  disapprove any such agreements, and (ii) if approved, except as provided in Section 4.1.2, Owner, and not Operator, shall execute all such  agreements), comply with any instructions it receives from Owner with respect to the operation and maintenance of the Gathering System,  provided that such instructions are consistent with applicable Laws, and perform all other services and functions related thereto, including,  but not limited to, those services and functions listed on Exhibit A, subject to the limits, requirements, and restrictions otherwise set forth in  this Agreement.

     4.1.1.2 Maintenance Authority. Subject to the terms, conditions and limitations set forth in this Agreement, Owner hereby authorizes and  empowers Operator, and Operator agrees, in the name of and on behalf of Owner, to do and perform any and all acts reasonably necessary  for the prudent operation and maintenance of the Gathering System.

     4.1.1.3 Operator Recommendations. In the event that Operator makes a good-faith recommendation in writing regarding an operational  issue to Owner, and Owner does not, for any reason whatsoever, approve such recommendation, then Operator shall not be liable and Owner  hereby releases and shall indemnify, defend and hold Operator harmless from and against any Claim or Loss that arises from, or is  attributable to, the failure to implement such recommendation.

     4.1.1.4 Compliance With Owner Instructions. Notwithstanding anything to the contrary in this Agreement, in the event that Owner  instructs Operator to take any action or refrain from taking any action in connection with the operation or maintenance of the Gathering  System and Operator in good faith

9







disagrees with Owner because, among other reasons, it is not consistent with prudent operating standards, then Operator shall notify Owner  of such disagreement in writing, and Owner hereby releases and shall indemnify, defend and hold Operator harmless from and against any  Claim or Loss that arises from, or is attributable to, Operator's compliance with Owner's instructions.

     4.1.1.5 Environmental Laws. Operator shall comply in all respects with all Environmental Laws and all Environmental Permits.

     4.1.2 Purchase of Services, Materials and Supplies. Except as otherwise provided below and subject to the limitations herein, Operator  shall, on Owner's behalf and as its agent, purchase or cause to be purchased necessary services, materials and supplies and incur such  expenses and enter into such commitments as may be necessary to operate and maintain the Gathering System, including, but not limited to,  (i) contracts for the maintenance, repair and replacement of the Gathering System and, if requested by Owner, constructions of additions to the  Gathering System; and (ii) contracts for power, fuel, other utilities, and communication facilities as may be necessary in connection with proper  operation and maintenance of the Gathering System and for providing adjustments and replacements thereto.

     4.1.3 Personnel. Except as otherwise provided below and subject to the limitations herein, Operator, in its reasonable judgment, shall employ  such personnel, with Operator or an Affiliate as their employer, as it may deem necessary to operate and maintain the Gathering System and to  provide adjustments and replacements thereto and to perform its other obligations hereunder. In addition to Operator's or Operator's Affiliates'  employees who are either full-time or part-time dedicated to operating and maintaining the Gathering System, Operator may: (i) utilize from time  to time its other employees or the employees of Operator's Affiliates in services in connection therewith at a usual and customary rate of  compensation; and/or (ii) engage the services of third-party contractors in the performance of such functions.

     4.1.4 Payment of Operating Expenses. Operator shall promptly pay all costs and expenses incurred in operating and maintaining the  Gathering System as they become due, and Owner shall reimburse Operator for such costs and expenses in accordance with, and to the extent  provided in, Section 5.1.

     4.1.5 Proposed Operating Expense Budget. Operator shall (i) administer and otherwise comply with the budget process set forth in  Section 6.6 of the Gathering Agreement and (ii) operate and maintain the Gathering System in compliance with the Proposed Operating Expense  Budget established for the Gathering System; provided, however, if Owner instructs Operator to perform any services outside of the scope of  the services contemplated in the Proposed Operating Expense Budget, then Owner shall reimburse Operator for the costs and expenses  associated therewith.

     4.1.6 Capital Projects. Operator may propose an unbudgeted Capital Project at any time by giving notice to Owner. The notice (the Capital  Project Proposal) must specifically describe the proposed Capital Project and shall include the following:

10







     (1) a good-faith estimate of the total cost of engineering, construction, operation, and maintenance of the proposed Capital Project, and  preliminary engineering designs and plans, and

     (2) general requirements or provisions for the Capital Project, including construction of the Capital Project and insurance coverage.

Owner shall approve or reject the proposed Capital Project set forth in the applicable Capital Project Proposal within 30 days from the date of  receipt of the same, such approval not to be unreasonably withheld, conditioned or delayed. If Owner approves the applicable Capital Project,  then Operator shall have the right and authority with respect to the approved Capital Project to make expenditures, or enter into contracts to  incur expenditures, without further authorization by Owner, up to the cost approved by Owner with respect to the applicable Capital Project.

     4.1.7 Emergencies. Notwithstanding any provision of this Agreement, in the event of an Emergency, Operator shall proceed with  maintenance or repair work or with any other action when necessary to minimize damage and to end the Emergency (Emergency Work),  without regard to the limits set forth in this Article IV. Operator shall, as soon as reasonably practicable, notify Owner of the existence or  occurrence of the Emergency, setting forth the nature of the emergency, the corrective action taken or proposed to be taken, and the actual or  estimated cost of such corrective action. Emergency Work shall include only such work as is necessary to immediately address the Emergency  and does not include any work necessary to restore the Gathering System or improve the Gathering System in order to permit continued  operations.

     4.1.8 Reporting By Operator. Operator shall (by either (i) submitting written reports or (ii) providing Owner with access to Operator's  internet website containing the relevant information, at Operator's discretion) provide to Owner the following reports, based on the best data  available at the time of preparation and subject to revision based on acquisition of more accurate data:

     (1) a daily report of the prior day's 24 hour volume of natural gas throughput on the Gathering System;

     (2) as soon as available, and in any event within 30 days after the end of each calendar month, a report of environmental, health, or safety  incidents that are material or potentially material, including year-to-date data, for such month;

     (3) as soon as available, and in any event within 30 days after the end of each calendar month, a report concerning any government  agency inspections, inquiries, citations, or other actions for such month;

     (4) as soon as available, and in any event within 30 days after the end of each calendar month, an operational report on major repairs and  other operational details materially affecting the operations of the Gathering System during such month;

11







     (5) promptly after the sending thereof, all notices and information sent to Shipper (as defined in the Gathering Agreement) under the  Gathering Agreement or to any other shipper under any gathering agreement;

     (6) as soon as available, and in any event within 30 days after the end of each calendar month, a monthly operating and financial report  which shall be substantially in the form of Exhibit B and shall include such information as reasonably requested by Owner;

     (7) as soon as available, and in any event within 30 days after the end of each Calendar Year, a certificate from the president or chief  executive officer of Operator stating that no event or condition exists or has occurred that violates, results in a breach of, or constitutes a  default on the part of any Operator Party under, any of the terms, conditions or provisions of any Transaction Document; and

     (8) such other information regarding the Gathering System or the operation and maintenance of the Gathering System as Owner may from  time to time reasonably request.

     4.1.9 Commercial Activities. Operator shall negotiate on behalf of Owner all agreements for gathering services provided by Owner;  provided that (i) Owner shall have the right to approve or disapprove any such agreements, and (ii) if approved, Owner, and not Operator, shall  execute all such agreements. When Operator receives payments or remittances from customers of Owner, Operator shall deposit and promptly  forward all such payments or remittances to Owner. Operator shall make no allowances or adjustments in accounts, unless given specific  advance authorization by Owner.

     4.1.10 Regulatory Affairs. Operator shall be responsible for preparing and submitting all regulatory filings pertaining to the Gathering  System required by any Governmental Authority.

     4.1.11 Devotion of Time. The employees of Operator designated to perform the functions under this Agreement shall devote such time to  Owner's business as necessary to accomplish the responsibilities of Operator as set forth in this Article IV. Owner recognizes that the  employees of Operator shall not be obligated to devote full time to Owner's business and that such employees of Operator may act on behalf of  Operator or its Affiliates in activities not associated with this Agreement.

4.2 Standard of Care.

     Operator shall perform its duties and obligations hereunder and its responsibilities as Operator of the Gathering System, (i) in a good and  workmanlike manner, (ii) in conformity with the good practices in the natural gas gathering industry, (iii) in accordance with all valid and applicable  Laws, including, without limitation, all Environmental Laws and Environmental Permits, (iv) in accordance with the Subject Gathering Agreements,  and (v) in accordance with the Proposed Operating Expense Budget.

12







4.3 Limitation of Authority.

     Notwithstanding anything in this Agreement, Operator shall seek prior approval of Owner prior to taking the following actions:

     4.3.1 Binding Owner. Endorsing the name of Owner on any contract, commercial paper, or instruments of any nature or otherwise creating  any obligation binding upon Owner except as expressly permitted under this Agreement.

     4.3.2 Asset Sales. Acquiring or disposing of any assets of Owner in a single transaction or in a series of related transactions, with a fair  market value exceeding $100,000, provided, however that Operator is expressly permitted to terminate leases or other contracts in respect of  rental equipment regardless of value.

     4.3.3 Material Alteration of Owner's Business. Altering Owner's business in a material manner.

     4.3.4 Debt. Incurring any indebtedness on behalf of Owner, except for trade credit incurred by Operator in the ordinary course of business or  within its expenditure authority set forth in this Agreement.

ARTICLE V  COST REIMBURSEMENT

5.1 Responsibility for Costs and Expenses.

     Owner shall reimburse Operator for all costs and expenses incurred by Operator relating to the operation and maintenance of the Gathering  System incurred in accordance with the terms hereof.

5.2 Procedure.

     5.2.1 Invoicing and Payment. Operator shall invoice Owner, monthly, for all costs and expenses incurred hereunder during the immediately  preceding month and, without duplication, in any prior month. Owner shall pay all such amounts prior to the later of (a) 50 days after the end of  the month in which the expenses were incurred or (b) 10 days after the date of receipt of each invoice. Invoices received after 1:00 pm local time  will be deemed received on the next Business Day. If the day on which any payment is due is not a Business Day, then the relevant payment  shall be due upon the immediately succeeding Business Day. Any amounts which remain due and owing after the due date shall bear interest at  the lower of the prime rate as published in the Money Rates section of The Wall Street Journal plus two percent (2%) per annum and the  maximum lawful rate of interest, compounded daily from the date such payment is due until such payment is made. Notwithstanding anything  herein to the contrary, any indemnification payments required to be made by a Party hereunder shall be made to the indemnified Party upon  receipt by the indemnifying Party of written demand therefor from the indemnified Party.

13







     5.2.2 Disputes. If a good faith dispute arises as to the amount payable under any invoice issued by Operator, Owner shall pay the amount  not in dispute on or before the due date, and if Owner elects to withhold any portion of a payment which otherwise would be due if not for such  dispute, Owner shall provide Operator a written notice of such dispute on or before the date such payment is due setting forth, in reasonable  detail, its reasons for withholding the disputed amount. If it is subsequently determined, whether by mutual agreement of the Parties or  otherwise, that Owner is required to pay all or any portion of the disputed and withheld amounts, then in addition to paying such amounts,  Owner shall pay interest accrued on such amounts (including amounts withheld) at the default interest rate described in Section 5.2.1 from the  original due date until paid in full.

5.3 Setoff.

     5.3.1 All payments required to be made hereunder by Operator shall be (i) absolute and unconditional, (ii) calculated without reference to  any netting, set-off, counterclaim or other right which Operator may have against Owner, including, without limitation, any right to set-off  against any amounts owed by Owner under this Agreement or any other Transaction Document, and (iii) made free and clear of and without  any deduction for or on account of any such netting, set-off or counterclaim.

     5.3.2 Owner is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to net, set-off and apply any  payments owing to Owner against any and all of the obligations of any Operator Party under this Agreement or any other Transaction  Document. Owner agrees to promptly notify Operator after any such netting, set-off or application is made; provided that the failure to give  such notice shall not affect the validity of such netting, set-off or application.

ARTICLE VI  ACCOUNTING; REPORTS; RECORDS

6.1 Accounting Methods.

     Operator shall keep proper and complete records and books of account, which shall fully and accurately reflect all transactions and other  matters relative to Owner's business as are usually entered into records and books of account, and the same shall be supported by purchase  orders, invoices, payrolls or other customary or necessary records pertaining thereto. Owner's financial books and records shall be kept in  accordance with GAAP and shall be maintained on an accrual basis, and Owner shall provide Operator with the applicable income tax provisions.  The costs of any audit of Owner's books or records shall be borne by Owner.

6.2 Financial Statements.

     Operator shall deliver to Owner the financial statements of Owner prepared, in each case, in accordance with GAAP (and subject, where  applicable, to normal year-end adjustments) as follows:

14

  (a)   promptly upon availability, and in any event within 30 days after the end of each







6.3 Accounting and Taxation.

     6.3.1 Maintenance of Accounts. Operator shall perform Owner's Tax and financial accounting with respect to the Gathering System, except to  the extent that Operator is prohibited or prevented from doing so by Law, or by the administrative practice of any taxing office, or by the fact  that to do so requires information that is in the possession of Owner, but not of Operator and that Owner cannot legally furnish to Operator (all  of which are herein called Preventing Factors).

     6.3.2 Preparation of Tax Returns.

     6.3.2.1 Income Tax Returns. Unless otherwise instructed by Owner, Operator shall, on behalf of Owner, (i) provide all the necessary  financial and other data for a tax preparer (appointed by Owner) to prepare all Tax Returns for taxes measured or based on income required to  be filed by Owner in connection with its ownership and operation of the Gathering System no later than 75 days prior to the filing date for the  relevant Tax Return (taking into account all valid extensions approved by Owner prior to filing), (ii) cooperate with Owner and its  accountants in their preparation of such Tax Returns and review all modifications to such Tax Returns indicated by Owner, and (iii) help  facilitate completion of such Tax Returns by no later than 45 days prior to the filing date for the relevant Tax Return.

     6.3.2.2 Other Tax Returns. Unless otherwise instructed by Owner, Operator shall, on behalf of Owner, (i) prepare and file all Tax Returns  and all

15

      month, (i) an unaudited balance sheet as of the end of such month; and (ii) an unaudited statement of income or loss for the interim period  through such month end;

  (b)   promptly upon availability, and in any event within 45 days after the end of each of the first three quarterly periods of each fiscal year,  Owner's balance sheet as of the end of such quarterly period and statements of Owner's earnings and cash flows for the period from the  beginning of the then current fiscal year to the end of such quarterly period; and

  (c)   promptly upon availability and in any event within 90 days after the end of each fiscal year, complete financial statements of Owner,  together with all notes thereto, prepared in reasonable detail in accordance with GAAP, together with an unqualified opinion, based on an  audit using generally accepted auditing standards, by an independent certified public accounting firm selected by Owner, stating that  such financial statements have been so prepared. These financial statements shall contain a balance sheet as of the end of such fiscal  year and statements of earnings, of cash flows, and of changes in Owner's equity for such fiscal year, each setting forth in comparative  form the corresponding figures for the preceding fiscal year. Owner shall engage an auditor for this purpose no later than 45 days after the  end of each fiscal year.







other regulatory or state filings required to be filed by Owner in connection with its ownership and operation of the Gathering System other  than those Tax Returns described in Section 6.3.2.1 no later than the filing date for the relevant Tax Return or other filing (taking into account  all valid extensions approved by Owner prior to filing).

     6.3.3 Owner to Supply Information. Upon the request of Operator, Owner shall (except to the extent it is prohibited by Law from doing so)  promptly (i) furnish Operator with any information needed by Operator in order to carry out its obligations under Section 6.3, (ii) cooperate with  Operator in minimizing Taxes and (iii) execute such agency, power-of-attorney or other similar documents reasonably required by Operator in  order to carry out its duties under this Section 6.3. If, at any time, Operator determines that because of one or more Preventing Factors it cannot  perform its obligations under Section 6.3, then Operator shall notify Owner in writing, specifying the Preventing Factors concerned and the  Taxes and the Governmental Authorities to which such Preventing Factors apply. Any incremental Tax or penalty resulting from Owner's failure  to comply with this Section 6.3.3 shall be the responsibility of Owner.

6.4 Banking.

     6.4.1 Except as provided in Section 6.4.2, all revenues and other funds of Owner shall be deposited in its name in the Owner Revenue  Account. Withdrawals from the Owner Revenue Account will be made only by Owner or Persons designated by Owner from time to time.  Operator shall have view only access to the Owner Revenue Account. Owner will provide the Operator with copies of reconciled bank  statements on a monthly basis, for accounting and audit purposes.

     6.4.2 All Operations Fees (as defined in the Gathering Agreement) shall be deposited in the name of Owner in the Owner Operating Expense  Account. Withdrawals from the Owner Operating Expense Account will be made only by Owner, Operator or other Persons designated by  Owner from time to time.

     6.4.3 Notwithstanding the foregoing, all funds of Owner will be used solely for the business of Owner. All interest and other benefits  pertaining to the Owner Revenue Account and the Owner Operating Expense Account belong to Owner. At no time may Operator commingle  the funds in the Owner Revenue Account, the Owner Operating Expense Account or any other bank account of Owner with Operator's funds  or the funds of any other Person, nor may such funds be subject to liens or Claims of any kind in favor of Operator or its creditors.

6.5 Independent Audits.

     Upon reasonable prior written notice to Operator, Owner shall have the right during normal business hours to audit or examine all books and  records of Operator to the extent they relate to Operator's performance hereunder as well as the relevant books of account of Operator's  contractors, relating to the performance of Operator's obligations under this Agreement. Operator shall cooperate with Owner's auditors by  (i) making the applicable books

16







and records available for inspection by Owner's auditors, and (ii) making such copies of books and records as may be reasonably requested by  such auditors. In no event shall Owner's audits unreasonably interfere with Operator's operations. Owner will be responsible for all costs of any  such audit; provided that if, in any audit, Owner discovers overpayments by Owner of at least $250,000 in the aggregate (Material  Overpayment), Operator will reimburse Owner for such Material Overpayment and all reasonable costs incurred by Owner in connection with  such audit (Audit Costs). Owner shall have up until two years after the close of a Calendar Year in which to make an audit of Operator's records  for such Calendar Year. Except for any bill or statement with respect to which an Adjustment Claim is made within the two-year audit period, the  bills and statements rendered for the Calendar Year prior to such two-year audit period shall be conclusively established as correct. An  Adjustment Claim shall mean a written claim by Owner to Operator requesting a refund or other financial adjustment in respect of any  overpayment by Owner (including in the case of a Material Overpayment, all Audit Costs) and setting forth in reasonable detail the basis for such  claim. Operator shall, within 10 days of receipt of an Adjustment Claim, provide Owner with the requested refund or other financial adjustment;  provided that if Operator shall dispute in good faith some or all of the amounts set forth in such Adjustment Claim, Operator may elect to withhold  any disputed amounts, pending resolution of the dispute. If the Parties shall fail to resolve their dispute with respect to the remaining Adjustment  Claim amount within 15 Business Days, Owner may, at its sole option, refer such dispute for resolution in accordance with the terms of Section 9.6.  Unless otherwise resolved by the Parties, any bill or statement that is the subject of an Adjustment Claim shall be conclusively established as  correct if dispute resolution procedures have not been initiated under Section 9.6 of this Agreement within 180 days of the submission of an  Adjustment Claim. Any and all information pertaining to Operator and its business that is disclosed to Owner or discovered by Owner in  connection with any audit hereunder shall be subject to the Confidentiality and Disclosure Agreement without regard to whether it has been  designated as such and Owner shall be subject to the same restrictions and standard of care set forth therein with respect to Operator's  confidential information.

6.6 Credit Inquiries.

     If a customer, vendor, or other Person requests financial information concerning Owner, Operator may provide such customer, vendor, or  Person a certificate or affidavit, on behalf of Owner, to the effect that Owner owns the Gathering System, free and clear of any mortgage or other  liens or encumbrances except for (1) encumbrances consisting of zoning or planning restrictions, servitudes, permits, and other restrictions or  limitations on the use of immovable property that do not materially detract from the value of, or impair the use of, the Gathering System by Owner  in the operation of its business, (2) liens arising by operation of law in the ordinary course of business and in an aggregate amount that is not  material in relation to the value of the Gathering System, (3) liens for current taxes, assessments, or governmental charges or levies, and (4) such  other liens or encumbrances, if any, of which Operator has actual knowledge at the time.

17







ARTICLE VII  FORCE MAJEURE

7.1 Procedure.

     If either Party is rendered unable, wholly or in part, by Force Majeure to carry out its obligations under this Agreement, other than the  obligation to indemnify and to make payments then or thereafter due hereunder, upon such Party giving notice and full particulars of such Force  Majeure in writing to the other Party as soon as reasonably possible after the occurrence of the cause relied on, then the obligations of the Party  giving such notice, so far as they are affected by such Force Majeure, will be suspended during the continuance of any inability so caused but for  no longer period, and such cause must as far as possible be remedied with all reasonable and diligent dispatch by the Party claiming such in order  to put itself in a position to carry out its obligations under this Agreement. Such notifying Party must also provide notice of the date of termination  of such Force Majeure event. A Force Majeure event affecting the performance by either Party shall not relieve it of liability in the event of its  negligence, where such negligence was a cause of the Force Majeure event, or in the event of its failure to use commercially reasonable efforts to  remedy the situation and remove the cause with all reasonable dispatch.

7.2 Strikes.

     It is understood and agreed that the settlement of strikes or lockouts is entirely within the discretion of the Party directly involved in the strike  or lockout, and that the above requirement that any Force Majeure must be remedied with all reasonable dispatch will not require the settlement of  strikes or lockouts by acceding to the demands of the opposing party when such course is inadvisable in the discretion of the Party having the  difficulty.

ARTICLE VIII  INSURANCE AND INDEMNIFICATION

8.1 Operator Insurance.

     8.1.1 Operator, with respect to Operator's activities provided for under this Agreement, shall maintain the following insurance coverage with  responsible insurance carriers and/or through a program of self-insurance:

18

  (a)   Workers' Compensation. Operator shall maintain statutory worker's compensation insurance, covering all of its and its Affiliates'  employees and statutory employees, in accordance with the benefits afforded by the statutory Worker's Compensation Acts applicable  to the state, territory, or district of hire, supervision, or place of accident. In addition, Operator shall maintain employer's liability  insurance with a limit of not less than one million dollars ($1,000,000) each accident, one million dollars ($1,000,000) disease each  employee, and one million dollars ($1,000,000) disease policy limit. Where not prohibited by law, Operator shall waive its right of  subrogation against Owner.

  (b)   Commercial General Liability Insurance. Operator shall maintain Commercial General Liability Insurance covering its operations under this  Agreement

  including, without limitation, bodily injury, death, property damage, independent contractors, products/completed operations,  contractual, and personal injury liability, with a limit of not less than one million dollars ($1,000,000) per occurrence and two million dollars  ($2,000,000) in the annual aggregate.






     8.1.2 To the extent of the liabilities assumed by Operator in this Agreement, Operator shall name Owner Indemnified Parties as additional  insured on all insurance policies, except Workers' Compensation. The Owner Indemnified Parties' additional insured status will not limit the  application of insurance protection as required by this Agreement which arises out of the Operator's indemnity obligations. These policies shall  provide primary coverage for claims in which Operator has agreed to hold harmless and/or to indemnify the Owner Indemnified Parties. No  other insurance clause may be invoked by any insurer. This coverage shall apply whether or not the indemnification is valid. Operator shall  have its insurer(s) waive its right of subrogation against Owner Indemnified Parties on all insurance carried. Unless expressly stated to the  contrary elsewhere in this Agreement or prohibited by applicable law or legal statute, Operator's indemnification obligations under this  Agreement shall not be limited by amount or in scope to coverage provided by insurance which is required under this Agreement.

     8.1.3 Upon request, Operator agrees to furnish to Owner certificates of insurance or other evidence satisfactory to Owner to demonstrate  that the required insurance has been procured and is in force. The certificate shall accurately reflect the required insurance coverages and shall  provide that in the event of modification, expiration, cancellation or material change in a policy affecting the certificate holder, thirty days prior  written notice shall be given to the certificate holder. Operator waives all rights against Owner for recovery of damages to the extent such  damages are covered by the insurance maintained in accordance with this Section 8.1.

8.2 Contractors.

     Operator shall attempt to obtain reasonable indemnification and insurance protection from contractors performing services for Owner to protect  Owner and Operator. Operator shall require each of its contractors to carry insurance coverage substantially equivalent to the insurance required  of Operator above, and to include provisions for its contractors to name Owner and Operator as additional insureds, with the exception of  Workers' Compensation Insurance, and state that such policies will be primary to and non-contributory with any other insurance maintained by  Operator and Owner. With respect to Workers' Compensation

19


  (c)   Commercial Automobile Insurance. Operator shall maintain Commercial Automobile Insurance coverage, including, without limitation,  bodily injury and property damage for owned, hired, rented, and non-owned automotive equipment with a limit of not less than one million  dollars ($1,000,000) per accident.

  (d)   Umbrella Liability Insurance. Operator shall maintain Umbrella Liability Insurance coverage covering in excess of (a), (b), and (c) above,  excluding Worker's Compensation, in the amount of ten million dollars ($10,000,000).







Insurance, the applicable contractor shall be required to cause its insurers to wave all rights of recovery or subrogation against Owner and  Operator, where not prohibited by law.

8.3 Notice of Claims.

     In the event that Operator receives notice, either in writing or orally, of an asserted or threatened Liability Claim against Operator or Owner,  Operator shall provide Owner within 10 days of receipt of such Liability Claim a copy of any demand letter, petition, or similar documentation of the  Liability Claim.

8.4 Mutual Release and Indemnification.

     8.4.1 Owner's Indemnification. SUBJECT TO THE TERMS OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, SECTION 9.7 OF THIS  AGREEMENT, OWNER SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS THE OPERATOR INDEMNIFIED PARTIES FROM AND AGAINST ALL CLAIMS AND  LOSSES ARISING OUT OF OR RELATING TO (I) ALLEGATIONS OF DEATH OR BODILY INJURY OR DAMAGE TO PROPERTY, TO THE EXTENT ARISING OUT OF OR RESULTING FROM THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF OWNER, ITS AFFILIATES OR ITS OR THEIR RESPECTIVE OFFICERS,  DIRECTORS, EMPLOYEES, OR CONTRACTORS IN CONNECTION WITH THIS AGREEMENT OR THE PERFORMANCE HEREOF; PROVIDED THAT OWNER SHALL  NOT BE REQUIRED TO INDEMNIFY THE OPERATOR INDEMNIFIED PARTIES AGAINST SUCH CLAIMS AND LOSSES TO THE EXTENT SUCH CLAIMS AND  LOSSES ARE ATTRIBUTABLE TO THE ACTS OR OMISSIONS OF ANY OPERATOR INDEMNIFIED PARTIES, (II) ANY BREACH OF THIS AGREEMENT BY OWNER,  AND (III) ANY AGREEMENTS RELATING TO THE GATHERING SYSTEM BETWEEN OWNER AND THIRD PARTIES NOT AFFILIATED WITH THE OPERATOR  PARTIES. THE DUTY TO INDEMNIFY, DEFEND AND HOLD HARMLESS UNDER THIS SECTION 8.4.1 SHALL CONTINUE IN FULL FORCE AND EFFECT,  NOTWITHSTANDING THE EXPIRATION OR EARLY TERMINATION OF THIS AGREEMENT, WITH RESPECT TO ANY CLAIMS OR LOSSES BASED ON FACTS OR  CONDITIONS THAT OCCURRED PRIOR TO SUCH EXPIRATION OR TERMINATION.

     8.4.2 Operator's Indemnification. SUBJECT TO THE TERMS OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, SECTION 9.7 OF THIS  AGREEMENT, OPERATOR SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS THE OWNER INDEMNIFIED PARTIES FROM AND AGAINST ALL CLAIMS AND  LOSSES ARISING OUT OF OR RELATING TO (I) ALLEGATIONS OF DEATH OR BODILY INJURY OR DAMAGE TO PROPERTY, TO THE EXTENT ARISING OUT OF OR RESULTING FROM THE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF OPERATOR, ITS AFFILIATES OR ITS OR THEIR RESPECTIVE  OFFICERS, DIRECTORS, EMPLOYEES, OR CONTRACTORS IN CONNECTION WITH THIS AGREEMENT OR THE PERFORMANCE HEREOF; PROVIDED THAT  OPERATOR SHALL NOT BE REQUIRED TO INDEMNIFY THE OWNER INDEMNIFIED PARTIES AGAINST SUCH CLAIMS OR LOSSES TO THE EXTENT SUCH  CLAIMS OR LOSSES ARE ATTRIBUTABLE TO THE ACTS OR OMISSIONS OF ANY OWNER INDEMNIFIED PARTY, AND (II) ANY BREACH OF THIS AGREEMENT  BY OPERATOR. THE DUTY TO INDEMNIFY, DEFEND AND HOLD HARMLESS UNDER THIS SECTION 8.4.2 SHALL CONTINUE IN FULL FORCE AND EFFECT,  NOTWITHSTANDING THE EXPIRATION OR EARLY TERMINATION OF THIS AGREEMENT, WITH RESPECT TO ANY CLAIMS OR LOSSES BASED ON FACTS OR  CONDITIONS THAT OCCURRED PRIOR TO SUCH EXPIRATION OR TERMINATION.

20







ARTICLE IX  GENERAL PROVISIONS

9.1 Notices.

     Except as specifically provided otherwise herein, any notice, claim, or other communication provided for in this Agreement or any notice that  either Party may desire to give to the other shall be in writing and shall be: (i) sent by facsimile transmission; (ii) delivered by hand; (iii) sent by  United States mail with all postage fully prepaid; or (iv) delivered by courier with charges paid in accordance with the customary arrangements  established by such courier, in each of the foregoing cases addressed to the Party at the following addresses:

or at such other address as either Party may at any time designate by giving written notice to the other Party. Such notices, invoices, allocation  statements, claims, or other communications shall be deemed received as follows: (i) if delivered personally, upon delivery; (ii) if sent by United  States mail, whether by express mail, registered mail, certified mail or regular mail, the notice shall be deemed to have been received on the day  receipt is refused or is confirmed orally or in writing by the receiving Party; (iii) if sent by a courier service, upon delivery; or (iv) if sent by  facsimile, the Business Day following the day on which it was transmitted and confirmed by transmission report or such earlier time as confirmed  orally or in writing by the receiving Party.

9.2 Rights.

     The failure of either Party to exercise any right granted hereunder shall not impair nor be deemed a waiver of that Party's privilege of exercising  that right at any subsequent time or times.

21

              To Owner:   Piñon Gathering Company, LLC          c/o TCW Asset Management Company          333 Clay Street, Suite 4150         Houston, Texas 77002         Attention: Clay Taylor         Fax Number: 713.615.7460               with a copy to:  TCW Asset Management Company          865 South Figueroa Street, Suite 1800         Los Angeles, California 90017         Attention: R. Blair Thomas         Fax Number: 213.244.0604               To Operator:  SandRidge Midstream, Inc.         123 Robert S. Kerr Avenue         Oklahoma City, Oklahoma 73102-6406         Attention: Midstream — Manager of Administration         Fax Number: 405.429.5990







9.3 Applicable Laws.

     This Agreement is subject to all valid present and future laws, regulations, rules, and orders of governmental authorities now or hereafter  having jurisdiction over the Parties, this Agreement, any of the transactions contemplated hereby or the Gathering System.

9.4 Rules of Construction.

     In construing this Agreement, the following principles shall be followed:

     9.4.1 no consideration shall be given to the fact or presumption that one Party had a greater or lesser hand in drafting this Agreement;

     9.4.2 examples shall not be construed to limit, expressly or by implication, the matter they illustrate;

     9.4.3 the word includes and its syntactical variants mean includes, but is not limited to and corresponding syntactical variant  expressions; and

     9.4.4 the plural shall be deemed to include the singular and vice versa, as applicable.

9.5 Governing Law.

     This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Texas, without regard to choice of  law principles that would require the application of the laws of any other jurisdiction.

9.6 Dispute Resolution.

     9.6.1 Negotiation. Prior to submitting any dispute for resolution by a court, a Party shall provide written notice to the other of the occurrence  of such dispute. If the Parties have failed to resolve the dispute within 15 Business Days after such notice was given, the Parties shall seek to  resolve the dispute by negotiation between senior management personnel of each Party. Such personnel shall endeavor to meet and attempt to  amicably resolve the dispute. If the Parties are unable to resolve the dispute for any reason within 30 Business Days after the original notice of  dispute was given, then either Party shall be entitled to pursue any remedies available at law or in equity; provided, however, this Section 9.6.1  shall not limit a Party's right to initiate litigation prior to the expiration of the time periods set forth herein of such limitations would prevent a  Party from filing a lawsuit or claim within the applicable period for filing lawsuits (e.g. statutes of limitation, prescription, etc.).

     9.6.2 Jurisdiction and Venue.

     9.6.2.1 Each Party agrees that the appropriate, exclusive and convenient forum for any disputes between any of the Parties arising out of  this Agreement or the transactions contemplated hereby shall be in any state or federal court in

22







Houston or Dallas, Texas, and each of the Parties irrevocably submits to the jurisdiction of such courts solely in respect of any legal  proceeding arising out of or related to this Agreement or the transactions contemplated hereby. The Parties further agree that the Parties  shall not bring suit with respect to any disputes arising out of this Agreement or the transactions contemplated hereby in any court or  jurisdiction other than the above specified courts.

     9.6.2.2 Each Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection  which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the  transactions contemplated hereby in any court referred to in paragraph (a) above. Each of the Parties hereby irrevocably waives, to the  fullest extent permitted by applicable law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such  court.

     9.6.3 Jury Waiver. THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT THEY MAY  LEGALLY AND EFFECTIVELY DO SO, THE RIGHT TO A JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING  TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     9.6.4 Costs and Expenses. The prevailing Party in any litigation pertaining to any dispute hereunder shall be entitled to recover its  reasonable costs, expenses, and attorney's fees in connection with such litigation.

9.7 Limitation of Liability.

     NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR SPECIAL,  INDIRECT, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES SUFFERED BY SUCH PARTY RESULTING FROM OR ARISING OUT OF THIS  AGREEMENT OR THE BREACH THEREOF OR UNDER ANY OTHER THEORY OF LIABILITY, WHETHER TORT, NEGLIGENCE, STRICT LIABILITY, BREACH  OF CONTRACT, WARRANTY, INDEMNITY, OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, LOSS OF USE, INCREASED COST OF OPERATIONS, LOSS  OF PROFIT OR REVENUE, OR BUSINESS INTERRUPTIONS. IN FURTHERANCE OF THE FOREGOING, EACH PARTY RELEASES THE OTHER PARTY AND  WAIVES ANY RIGHT OF RECOVERY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES SUFFERED BY SUCH PARTY  REGARDLESS OF WHETHER ANY SUCH DAMAGES ARE CAUSED BY THE OTHER PARTY'S NEGLIGENCE (AND REGARDLESS OF WHETHER SUCH  NEGLIGENCE IS SOLE, JOINT, CONCURRENT, ACTIVE, PASSIVE, OR GROSS NEGLIGENCE), FAULT, OR LIABILITY WITHOUT FAULT.

9.8 Entirety of Agreement, Amendments.

     This Agreement, including, without limitation, all exhibits hereto, and the other Transaction Documents integrate the entire understanding  between the Parties with respect to the subject matter covered and supersede all prior understandings, drafts, discussions, or statements,

23







whether oral or in writing, expressed or implied, dealing with the same subject matter. This Agreement may not be amended or modified in any  manner except by a written document signed by the Parties that expressly amends this Agreement.

9.9 Waivers.

     No waiver by either Party of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof  (whether or not similar), nor shall such waiver constitute a continuing waiver unless expressly provided. No waiver shall be effective unless made  in writing and signed by the Party to be charged with such waiver.

9.10 Exhibits.

     Exhibits A and B are made a part of this Agreement and incorporated herein by this reference.

9.11 Headings.

     The headings and captions in this Agreement have been inserted for convenience of reference only and shall not define or limit any of the terms  and provisions hereof.

9.12 Rights and Remedies.

     Except as otherwise provided in this Agreement, each Party reserves to itself all rights, counterclaims, other remedies, and defenses to which  such Party is or may be entitled arising from or out of this Agreement or as otherwise provided by law.

9.13 Assignment.

     Operator shall not make any assignment of all or any part of this Agreement or any of the rights or obligations hereunder unless there first shall  have been obtained the written consent thereto of Owner, which consent shall not be unreasonably withheld, conditioned, or delayed. Owner shall  not make any assignment of all or any part of this Agreement or any of the rights or obligations hereunder except in connection with the sale or  conveyance of all or any part of the Gathering System. This Agreement shall be binding upon and inure to the benefit of the successors and  assigns of the Parties. Any attempted assignment of this Agreement in violation of this Section 9.13 shall be null and void.

9.14 Counterparts.

     This Agreement may be executed in one or more counterparts (including by facsimile), each of which shall be deemed an original, and all of  which shall be deemed one and the same Agreement.

9.15 No Third Party Beneficiary.

     Except for parties indemnified hereunder, this Agreement is for the sole benefit of the Parties and their respective successors and permitted  assigns, and shall not inure to the benefit of

24







any other Person whomsoever or whatsoever, it being the intention of the Parties that no third Person shall be deemed a third-party beneficiary of  this Agreement.

9.16 Further Assurances.

     Each Party shall take such acts and execute and deliver such documents as may be reasonably required to effectuate the purposes of this  Agreement.

     IN WITNESS WHEREOF, authorized representatives of the Parties have executed this Agreement to be effective on the Effective Date.

25

           OPERATOR:    SANDRIDGE MIDSTREAM, INC.



  By:  /s/ Richard J. Gognat       Richard J. Gognat        Senior Vice President        OWNER:    PIÑON GATHERING COMPANY, LLC



  By:  TCW Asset Management Company, its Manager:               By:  /s/ Clayton R. Taylor         Clayton R. Taylor        Vice President            By:  /s/ Kurt A. Talbot         Kurt A. Talbot        Managing Director 
Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?

Answer:
57845