Document:

Exhibit

CONFIDENTIAL
EXECUTION VERSION

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

AMENDMENT NO. 7 
TO LICENSE AGREEMENT BETWEEN 
INSMED INCORPORATED AND PARI PHARMA GMBH
This seventh amendment (“Amendment No. 7”) effective 21 July 2017 (“Amendment No. 7 Effective Date”) to the License Agreement dated and effective the 25th of April 2008 between PARI Pharma GmbH, a German corporation with a principal place of business at Moosstrasse 3, D-82319 Starnberg, Germany (“PARI”) and Transave, Inc., a Delaware corporation, as amended by Amendment No. 1 the 24th day of June 2009, Assignment and Amendment No. 2 the 22nd day of December 2010, Amendment No. 3 the 6th day of March 2012, Amendment No. 4 the 21st day of May 2012, Amendment No. 5 the 5th day of October 2015 and Amendment No. 6 the 9th day of October 2015  (collectively, the “Agreement”), is entered into between PARI and Insmed Incorporated (successor in interest to Transave, Inc.), with registered offices at 10 Finderne Avenue, Building 10, Bridgewater, NJ  08807-3365 (“Insmed”).  PARI and Insmed shall be referred to collectively as the “Parties”.
WHEREAS, the Parties now desire to amend the terms and conditions of the Agreement to reflect certain business discussions between the Parties and the current development status of the Drug Product.  
NOW, THEREFORE, in consideration of the recitals set forth above, the mutual covenants, terms and conditions set forth below, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: 

1.Definitions.  Capitalized terms used but not defined in this Amendment No. 7 shall have the meanings ascribed to them in the Agreement.
2.    Section 2.6.  Section 2.6 of the Agreement is hereby amended by deleting “[***]” and replacing it with “as set forth in Section 6.1 below”. 
3.    Section 6.1.  Section 6.1 of the Agreement is hereby deleted in its entirety and replaced with the following:
6.1    Royalties for Drug Products.
(a)    In further consideration of the rights and license granted by PARI under this Agreement, during the Royalty Term, subject to the terms and conditions of this Agreement, Insmed agrees to pay PARI a royalty equal to [***] of the Net Sales of Drug 

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CONFIDENTIAL
EXECUTION VERSION

Product sold by Insmed, its Affiliates or Sublicensees. Such royalties shall be paid in accordance with Section 9.2 below. 
(b)    Within thirty (30) days of releasing top line results (which indicate whether the primary endpoint was met) via a press release for INS-212, the Phase III clinical trial entitled Study to Evaluate Efficacy of LAI When Added to Multi-drug Regimen Compared to Multi-drug Regimen Alone (CONVERT)but in no event later than March 31, 2018 (the “Royalty Buy-Down Exercise Period”), Insmed, in exchange for a [***] payment to PARI (the “Option Payment”), shall have the option, in its sole discretion, to replace the [***] with the following [***] (the “Royalty Buy-Down Option”):

	
		
	[***]
	[***]

	[***]
	[***]

	[***]
	[***]

(c)    Insmed shall exercise the Royalty Buy-Down Option by notifying PARI in writing within the Royalty Buy-Down Exercise Period and, if Insmed exercises the option, the Option Payment shall be due and payable within [***] business days from the exercise of the Royalty Buy-Down Option.  For clarity, the Option Payment shall only be payable if Insmed, in its sole discretion, elects to exercise the option set forth above.

4.    Section 7.2A(a). Section 7.2A(a) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following:
(a)    The Parties agree that Insmed will use Commercially Reasonable Efforts to meet the following milestones with respect to NTM:
	
		
	Milestone Activity
	Milestone Deadline

	Completion of the INS-212 Clinical Study Report (CSR)
	[***]

	Completion of submission to US FDA for the Drug Product in NTM
	[***]

	First Commercial Sale of the Drug Product in US in NTM
	[***]

	Approval of an MAA by the European Medicines Agency for the Drug Product
	[***]

If Insmed fails to meet a milestone within the applicable time period, other than any failure resulting from a breach of this Agreement by PARI, then, subject to the provisions of Section 7.3, PARI shall have the option to render Insmed’s license hereunder non-exclusive solely with respect to NTM and to terminate its obligation not to compete with Insmed in NTM as set forth in Section 4.2 of this Agreement.  Such option must be exercised by sending the Diligence Termination Notice to Insmed, and shall become effective on the [***] day following the date of the Diligence Termination Notice. If such 

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CONFIDENTIAL
EXECUTION VERSION

milestone is still not met within [***] months of the applicable time period, other than any failure resulting from a breach of this Agreement by PARI, then, subject to the provisions of Section 7.3, PARI shall have the option to terminate the license granted to Insmed under this Agreement with respect to NTM only by providing written notice thereof to Insmed.

PARI’s options to render the license granted hereunder non-exclusive, to terminate its obligations to not compete with Insmed or to terminate the license as described in this Section shall only apply to (i) the US in case Insmed fails to meet the milestones for the US, (ii) Europe in case Insmed fails to meet the milestone for the EU; or (iii) the Territory in case both (i) and (ii) above occur.
If the diligence milestone First Commercial Sale of the Drug Product in the US in NTM is not met [***] months after the applicable milestone deadline as set forth in the table above and First Commercial Sale of the Drug Product in the US did not occur or commercial sale has been ceased for another indication in the US, PARI shall be free to terminate the entire License with respect to US.
If the diligence milestone First Commercial Sale of the Drug Product in the EU in NTM is not met [***] months after the applicable milestone deadline as set forth in the table above and First Commercial Sale of the Drug Product did not occur or commercial sale has been ceased for another indication in the EU, PARI shall be free to terminate the entire License with respect to Europe.
In case the preconditions for the termination of the entire license in all regions, the US and Europe as set forth above, are given, PARI shall be free to terminate the entire license with respect to the Territory.”

5.    Section 5.2.  The table in Section 5.2 of the Agreement is hereby deleted it in its entirety and replaced with the following (milestone events and payments one and two have been fulfilled and therefore shown as strikethrough):

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CONFIDENTIAL
EXECUTION VERSION

	
		
	Milestone Event
	Milestone Payment

	1.    Receipt on any positive trial report from the first Phase IIb Trial that are sufficient to support the advancement of Drug Product development with the Device into the first Phase III Trial
	[***] either in cash, Qualified Stock or a combination of cash and Qualified Stock; plus [***] in Qualified Stock

	2.    Initiaton of the first Phase III Trial of Drug Product with the Device
	[***] either in cash, Qualified Stock or a combination of cash and Qualified Stock

	3.    First Acceptance of MAA (or equivalent) submission in the US for such Drug Product with the Device
	[***] (in cash)

	4.    First receipt of Marketing Approval in the United States for both (i) such Drug Product and (ii) the Device
	[***] (in cash)

	5.    First receipt of Marketing Approval in the first of the Major EU Countries for both (i) such Drug Product and (ii) the Device, in the same Major EU Country
	[***] (in cash)

6.    Section 7.2.  The table in Section 7.2(a) is hereby deleted it in its entirety and replaced with the following:
	
		
	Milestone Activity
	Milestone Deadline

	a.    Diligence Milestone 1: initiation of First Phase III Trial for Bronchiectasis 
	[***]

Within [***] days following the final results of the Phase III Trial for Bronchiectasis, the Parties, acting in good faith, will negotiate reasonable additional milestones.

7.    Section 7.2C.  The Agreement is hereby amended by adding a new Section 7.2C:
7.2C    Diligence Obligations.  If Insmed fails to achieve one of the diligence obligations for NTM and one of the diligence obligations for Bronchiectasis as set forth in the tables in Sections 7.2(a) and 7.2A(a), and if such milestones are still not met within [***] months of the applicable time period, other than due to any failure resulting from a breach of this Agreement by PARI, then, subject to the provisions of Section 7.3, PARI shall have the option to terminate this Agreement in its entirety by providing written notice thereof to Insmed, regardless whether or not PARI previously exercised any of its rights to render the license granted to Insmed under this Agreement non-exclusive or to terminate such license, both of the foregoing, with respect to a certain indication.
8.    Section 15.4.  A new introduction to the first sentence of Section 15.4 shall be added as follows:

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CONFIDENTIAL
EXECUTION VERSION

“In addition to PARI’s right to terminate this Agreement as set forth elsewhere in this Agreement,”
Section 15.4(ii) of the Agreement shall hereby be amended by deleting “[***]” and replacing it with “[***]”. 
9.    Miscellaneous.  Upon execution, this Amendment No. 7 shall be made part of the Agreement and shall be incorporated therein by reference.  Except as provided herein, all other terms and conditions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the Parties have executed this Amendment No. 7 as of the Amendment No. 7 Effective Date indicated above. 

INSMED INCORPORATED            PARI PHARMA GMBH

By:                          By:                      
Name: William H. Lewis            Name: Dr. Martin Knoch    
Title: CEO & President            Title: President
Date:                          Date:                      

 *** Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.Exhibit

CONFIDENTIAL
EXECUTION VERSION

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT.  EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH ASTERISKS (***), HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
AMENDMENT NO. 1 
TO COMMERCIALIZATION AGREEMENT BETWEEN 
INSMED INCORPORATED AND PARI PHARMA GMBH
This first amendment (“Amendment No. 1”) effective 21 July 2017 (“Amendment No. 1 Effective Date”) to the Commercialization Agreement dated and effective the 8th of July 2014 (the “Agreement”) between PARI Pharma GmbH, a German corporation with a principal place of business at Moosstrasse 3, D-82319 Starnberg, Germany (“PARI”) and Insmed Incorporated, a Virginia corporation with a principal place of business at 10 Finderne Avenue, Building 10, Bridgewater, NJ  08807-3365 (“Insmed”), is entered into between PARI and Insmed.  PARI and Insmed shall be referred to collectively as the “Parties”. 
WHEREAS, the Parties now desire to amend the terms and conditions of the Agreement to reflect certain business discussions between the Parties.
NOW, THEREFORE, in consideration of the recitals set forth above, the mutual covenants, terms and conditions set forth below, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: 

1.Definitions.  Capitalized terms used but not defined in this Amendment No. 1 shall have the meanings ascribed to them in the Agreement.
2.    Section 1.14 shall be deleted and replaced as follows:
“1.14 “[***]” shall mean a unit of Device which comprises of [***].”
3.    Section 4.3.  Section 4.3(c) of the Agreement is hereby amended by adding the following at the end of such subsection: “If there are material changes in the applicable tax laws during the Term, the parties shall negotiate in good faith to determine whether any amendments are required to the terms of this Agreement”.
4.    Section 6.1.  Section 6.1 of the Agreement is hereby amended by deleting “Within [***] days from the Effective Date” and replacing it with “Prior to the first MAA submission”.
5.    Section 6.2.  Section 6.2 of the Agreement is hereby deleted in its entirety and replaced with the following:
“6.2    Forecasts.  Subject to Section 6.3 with respect to the Initial Purchase Order, no less than [***] months (for the United States) or [***] months (for any major market such as the EU or Japan other than the United States) prior to the earliest anticipated delivery date of the Initial Purchase Order and thereafter on a quarterly basis during the Term, at least [***] days 

 
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CONFIDENTIAL
EXECUTION VERSION

before the end of each calendar quarter, INSMED shall provide PARI with its good faith, reasonable written projections (broken down by Devices, [***] and [***]) of the anticipated total market requirements of PARI Products for each major market (such as the United States, the EU or Japan) in the INSMED Territory (“Forecast”), on a [***] basis during the [***] month period immediately following (i) the calendar quarter in which such projection is issued or (ii) in case of the first Forecast for the First Commercial Sale in each major market (such as the EU or Japan). The forecasted quantities of PARI Products set forth in each Forecast for (i) the first [***] month period in such Forecast are binding and (ii) [***] in such Forecast are non-binding, good faith estimates provided solely to assist PARI in its production planning.   All Forecasts shall be deemed INSMED Confidential Information. PARI shall use commercially reasonable efforts to commence scale-up activities to transition from clinical supply to commercial supply based on INSMED’s Forecasts which shall be reasonably explained by INSMED to PARI.”
6.    Section 6.3. The first sentence of Section 6.3 is hereby deleted and replaced as follows:
“No later than [***] months (for the United States) or [***] months (for each major market such as the EU or Japan other than the United States) prior to the earliest anticipated delivery date of the Initial Purchase Order, INSMED shall provide PARI with a purchase order for a quantity by item number of PARI Products needed for initial supply of INSMED Product and PARI Products in the respective major market (such as the United States, the EU or Japan) (each an “Initial Purchase Order”).  For the Initial Purchase Order for the United States, PARI shall deliver (i) at least [***] of the quantity ordered in the Initial Purchase Order within [***] months of the Initial Purchase Order, (ii) at least [***] of the quantity ordered in the Initial Purchase Order within [***] months, of the Initial Purchase Order and (iii) the remaining [***] shall be delivered within [***] months of the Initial Purchase Order. The Parties agree that the above-mentioned lead times for the Initial Purchase Order are based on an assumed demand of aerosol heads in the Initial Purchase Order for the United States which does not exceed [***] aerosol heads in aggregate. In case the actual amount of aerosol heads in the Initial Purchase Order for the United States exceeds [***] aerosol heads in aggregate the Parties will discuss in good faith an adapted delivery.”  
7.    Section 6.4. Section 6.4 (a) is hereby amended by deleting in the third sentence “that no such Purchase Order shall have a shipment date prior to the [***] day following the date of receipt by PARI of the Initial Purchase Order” and replacing it by “that no such Purchase Order shall have a shipment date prior to the earliest anticipated delivery date of the Initial Purchase Order and further provided that the quantities of PARI Products stipulated in an Purchase Order for delivery in the first [***] months after the First Commercial Sale in a major market (such as the EU or Japan) do not exceed the quantities of PARI Products stipulated in the first Forecast which is provided to PARI at least [***] months for the United States and [***] months for other major markets (such as the EU or Japan) prior to the earliest anticipated delivery date of the Initial Purchase Order” so that such third sentence of Section 6.4 (a) reads:

 
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CONFIDENTIAL
EXECUTION VERSION

“PARI shall ship the quantity of PARI Products specified in each Purchase Order no less than [***] days after the date and confirmation of such Purchase Order by PARI, unless otherwise agreed to by PARI and INSMED; provided, however, that no such Purchase Order shall have a shipment date prior to the earliest anticipated delivery date of the Initial Purchase Order and further provided that the quantities of PARI Products stipulated in a Purchase Order for delivery in the first [***] months after the First Commercial Sale in a major market (such as the EU or Japan) do not exceed the quantities of PARI Products stipulated in the first Forecast which is provided to PARI at least [***] months for the United States and [***] months for other major markets (such as the EU or Japan) prior to the earliest anticipated delivery date of the Initial Purchase Order.” 
8.    Exhibit D.  Exhibit D to the Agreement is hereby amended by deleting it in its entirety and replacing it with Exhibit D attached hereto.
9.    Exhibit E.  Exhibit E to the Agreement is hereby amended by deleting “[***]” and replacing it with “[***]”.
10.    Exhibit I.  Exhibit I to the Agreement is hereby amended by deleting it in its entirety and replacing it with Exhibit I attached hereto. 
11.    Miscellaneous.  Upon execution, this Amendment No. 1 shall be made part of the Agreement and shall be incorporated therein by reference.  Except as provided herein, all other terms and conditions of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the Parties have executed this Amendment No. 1 as of the Amendment No. 1 Effective Date indicated above. 

INSMED INCORPORATED            PARI PHARMA GMBH

By:                          By:                      
Name: William H. Lewis            Name: Dr. Martin Knoch    
Title: CEO & President            Title: President
Date:                          Date:                      

 
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CONFIDENTIAL
EXECUTION VERSION

EXHIBIT D

Representatives of the JSC

Joint Steering Committee

PARI:  [***], [***] and [***]

INSMED: [***], [***] and [***]

 
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CONFIDENTIAL
EXECUTION VERSION

EXHIBIT I
Price
1. United States/Canada Price
	
		
	Description
	Prices for United States and Canada

	for each unit of [***]*
	See table below

	for each unit of [***]
	$[***]

The price for each [***] shall be determined as follows:
	
		
	Number of [***] Purchased in a Calendar Year
	Price/ 
[***]*

	[***]-[***]
	$[***]

	[***]-[***]
	$[***]

	[***] and over
	$[***]

* [***].
2.  EU/ROW Price.  Prices for EU and ROW markets shall be negotiated in good faith and set forth in the applicable Territory-Specific Appendix.

 
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