Document:

Exhibit

Exhibit 10.1

TEXT MARKED BY [* * *] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

ZIMETATM (DIPYRONE INJECTION) 
COMMERCIAL MANUFACTURE AND SUPPLY AGREEMENT 

June 21, 2017

	
			
	 
	 
	 

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TABLE OF CONTENTS
Page

		
	ARTICLE 1
	DEFINITIONS AND INTERPRETATION    1

		
	1.1
	Definitions    1

		
	1.2
	Currency    6

		
	1.3
	Sections and Headings    6

		
	1.4
	Singular Terms    6

		
	1.5
	Exhibits    6

		
	ARTICLE 2
	CORDEN’S MANUFACTURING SERVICES    6

		
	2.1
	Manufacturing Services    6

		
	ARTICLE 3
	KINDREDBIO’S OBLIGATIONS    8

		
	3.1
	KindredBio Requirements    8

		
	3.2
	Payment    8

		
	3.3
	Active Material and Qualification of Additional Sources of Supply    8

		
	ARTICLE 4
	PRICE    8

		
	4.1
	First Year price    8

		
	4.2
	Subsequent Year Pricing    9

		
	ARTICLE 5
	PRICE ADJUSTMENTS    9

		
	5.1
	Price Adjustments Due to Technical Changes    9

		
	5.2
	Multi-Country Packaging Requirements    10

		
	ARTICLE 6
	ORDERS, SHIPMENT, INVOICING, PAYMENT    10

		
	6.1
	Forecasts and purchase orders    10

		
	6.2
	Corden Fulfillment of Forecasts    11

	
			
	 
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	6.3
	Supplemental Orders    11

		
	6.4
	Corden Failure to Supply    11

		
	6.5
	Competing Product    11

		
	6.6
	Shipment    11

		
	6.7
	Late Delivery    11

		
	6.8
	Invoices and Payment    12

		
	ARTICLE 7
	PRODUCT CLAIMS AND RECALLS    13

		
	7.1
	Product Claims    13

		
	7.2
	Product Recalls and Returns    14

		
	7.3
	Corden’s Responsibility for Non-Conforming and Recalled Product    14

		
	7.4
	Disposition of Defective or Recalled Product    15

		
	7.5
	Sole Remedy    16

		
	ARTICLE 8
	CO-OPERATION    16

		
	8.1
	Quarterly Review    16

		
	8.2
	Governmental Agencies    16

		
	8.3
	Records and Accounting by Corden    16

		
	8.4
	Inspection of Records    16

		
	8.5
	Access    16

		
	8.6
	Notification of Regulatory Inspections    17

		
	8.7
	Reports    18

		
	8.8
	Regulatory Filings    18

		
	8.9
	QA Agreement    19

	
			
	 
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TABLE OF CONTENTS (cont.)
Page

		
	ARTICLE 9
	TERM AND TERMINATION    19

		
	9.1
	Term    19

		
	9.2
	Termination for Cause    19

		
	9.3
	Product Discontinuation    20

		
	9.4
	Obligations on Termination    20

		
	ARTICLE 10
	REPRESENTATIONS, WARRANTIES AND COVENANTS    21

		
	10.1
	Authority    21

		
	10.2
	KindredBio Warranties    21

		
	10.3
	Corden Warranties    22

		
	10.4
	Debarred Persons    23

		
	10.5
	Permits    23

		
	10.6
	No Warranty    23

		
	ARTICLE 11
	REMEDIES AND INDEMNITIES    23

		
	11.1
	Consequential Damages    23

		
	11.2
	Corden Indemnity    23

		
	11.3
	KindredBio Indemnity    24

		
	ARTICLE 12
	CONFIDENTIALITY    24

		
	12.1
	Confidential Information    24

		
	12.2
	Use of Confidential Information    25

		
	12.3
	Exclusions    25

		
	12.4
	Photographs and Recordings    26

		
	12.5
	Permitted Disclosure    26

	
			
	 
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TABLE OF CONTENTS (cont.)
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	12.6
	Return of Confidential Information    26

		
	12.7
	Remedies    26

		
	ARTICLE 13
	DISPUTE RESOLUTION    26

		
	13.1
	Dispute Resolution    26

		
	ARTICLE 14
	INTELLECTUAL PROPERTY    28

		
	14.1
	Intellectual Property    28

		
	14.2
	Inventions    28

		
	14.3
	Trademark Rights    29

		
	ARTICLE 15
	MISCELLANEOUS    29

		
	15.1
	Insurance    29

		
	15.2
	Independent Contractors    29

		
	15.3
	No Waiver    29

		
	15.4
	Assignment    30

		
	15.5
	Force Majeure    30

		
	15.6
	Notices    30

		
	15.7
	Severability    31

		
	15.8
	Entire Agreement    31

		
	15.9
	Other Terms    31

		
	15.10
	No Third Party Benefit or Right    32

		
	15.11
	Execution in Counterparts    32

		
	15.12
	Use of KindredBio Name    32

		
	15.13
	Governing Law    32

	
			
	 
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THIS ZIMETATM (DIPYRONE INJECTION) COMMERCIAL MANUFACTURE AND SUPPLY AGREEMENT (this “Agreement”) is made as of  June 21, 2017 (the “Effective Date”) between Kindred Biosciences, Inc., a Delaware corporation (“KindredBio”), and Corden Pharma S.p.A, an Italian shared company (“Corden”). 
ARTICLE 1 
DEFINITIONS AND INTERPRETATION
1.1    Definitions.  The following terms used herein will have the respective meanings set out below, and grammatical variations of these terms will have corresponding meanings: 
“Active Material” or “API” means metamizole sodium monohydrate, as specified in accordance with the Specifications, to be purchased by Corden from [* * *], [* * *]  or any other supplier with KindredBio’s prior written approval (“API Supplier”); 
“Affiliate” means, with respect to a Party any company, partnership or other entity which directly or indirectly controls, is controlled by or is under common control with the relevant Party.  “Control” for this purpose means the direct or indirect ownership of more than fifty percent (50%) of the outstanding capital stock or issued share capital of the Party or the legal power to direct or cause the direction of the general management and policies of the Party, whether through the ownership of voting securities, by contract, or otherwise.
“Annual Minimum” has the meaning specified in Section 3.1; 
“Annual Report” means the annual report to the FDA prepared by KindredBio regarding the Product as described in Title 21 of the United States Code of Federal Regulations, Section 314.81(b)(2); 
“Applicable Laws” means the applicable provisions of any and all national, supranational, regional, state, provincial, county and local laws, statutes, treaties, ordinances, regulations, rules, administrative codes, guidance, ordinances, by-laws, judgments, decrees, directives, injunctions, permits (including marketing approvals) or orders of or from any Authority having jurisdiction over or related to the subject item; 
“Authority” means any governmental or regulatory authority, department, body or agency or any court, tribunal, bureau, commission or other similar body, whether national, supranational, regional, state, provincial, county or local; 
“Batch” means a specific quantity of the Product that is intended to have uniform character and quality, within specified limits, and is produced from a single run of the Manufacturing Process; 
“Breach Notice” will have the meaning specified in Section 8.2(a); 
“Business Day” means a day other than a Saturday, Sunday or a day that is a statutory holiday in the jurisdiction where the Manufacturing Site is located or in the State of California; 

	
			
	 
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Exhibit 10.1

“cGMPs” means, as applicable, current good manufacturing practices as described in: 
(a)    Division 2 of Part C of the Food and Drug Regulations (Canada);
(b)    EC Directive 2003/94EC;
(c)    Parts 210 and 211 of Title 21 of the United States’ Code of Federal Regulations; and
(d)    ICH guidelines.
together with the latest Health Canada, EMA and FDA guidance documents pertaining to manufacturing and quality control practice, all as updated, amended and revised from time to time, and any foreign equivalent current good manufacturing practices which may apply to the Manufacturing Site or be applicable to Product which the Parties agree may be sold outside of the Territory, as well as any cGDP requirements (if applicable), where cGDP means, that part of quality assurance which ensures that the quality of products is maintained throughout all stages of the supply chain from the site of manufacturer to the person authorised or entitled to supply such products to the public in accordance with applicable EMA directives and guidance documents; 
“Certificate of Analysis” means, with respect to a Batch, a statement setting forth the measured and observable characteristics of the Product from the Batch, as required by the Specifications, as dated, signed and provided to KindredBio by Corden prior to delivery of the Product; 
“Certificate of Compliance” means a statement signed by Corden that certifies that a Batch was manufactured, tested, packaged and stored in accordance with cGMPs and all other Applicable Laws; 
“Certificate of Manufacture” means a document identified as such and provided by Corden to KindredBio which attests that a specific lot of Products has been produced in accordance with the Specifications.
“Claims” has the meaning specified in Section 10.3; 
“CMC” has the meaning specified in Section 7.8(c); 
“CVM” means the FDA’s Center for Veterinary Medicine.
“Competing Product” means a pharmaceutical drug containing the API for animal health and veterinary applications, including such applications for the equine market, and which is not the Product.
“Components” means, collectively, all packaging components, raw materials, excipients, ingredients, and other materials other than Active Material, including labels, product inserts and 

	
			
	 
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Exhibit 10.1

other labelling for the Product, required to manufacture the Product in accordance with the Specifications; 
“Confidential Information” has the meaning specified in Section 11.1; 
“Corden Indemnitees” has the meaning specified in Section 10.4; 
“Corden Intellectual Property” means Intellectual Property generated or derived by Corden before performing any Manufacturing Services, or developed by Corden while performing the Manufacturing Services or otherwise generated or derived by Corden in its business which Intellectual Property is not KindredBio Intellectual Property; 
“Deficiencies” has the meaning specified in Section 7.8(d); 
“Deficiency Notice” has the meaning specified in Section 6.1(a); 
“Delivery Date” means the date scheduled for Corden to release the Product for shipment to KindredBio as specified in the Product purchase order or as the Parties may otherwise agree; 
“Delivery Documentation” has the meaning specified in Section 2.1(b); 
“Disclosing Party” has the meaning specified in Section 11.1; 
“Deviation” means a departure from an established quality standard, including, but not limited to, that set forth in the QA Agreement, cGMP standard operating procedure, manufacturing work order, packaging order, raw material or product specification, analytical control procedure, equipment maintenance schedule, or any unusual occurrence that could affect the safety, identity, strength, quality or purity of the Product.  Deviations may be either anticipated or unanticipated departures from established quality standards;
“Effective Date” means the date specified in the introduction to this Agreement;
“EMA” means the European Medicines Agency or any successor agency thereto which may regulate pharmaceutical products;
“FCA” has the meaning as set forth in the 2010 edition of the International Commercial Terms published by the International Chamber of Commerce, as amended or modified from time to time (Incoterms 2010); 
“FDA” means the United States Food and Drug Administration or any successor agency thereto which may regulate pharmaceutical products; 
“For-Cause Audit” means an audit performed to investigate a specific quality failure or process deviation and/or to prepare for a regulatory inspection.
“Force Majeure Event” has the meaning specified in Section 14.5;

	
			
	 
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Exhibit 10.1

“Forecast” has the meaning specified in Section 5.1(a).
“Health Canada” means the section of the Canadian Government known as Health Canada and includes, among other departments, the Veterinary Drugs Directorate, the Therapeutic Product Directorate and the Health Products and Food Branch Inspectorate or any successor agency thereto which may regulate pharmaceutical products; 
“Intellectual Property” means any and all rights in patents, patent applications, formulae, trademarks, trademark applications, trade-names, Inventions, copyrights, industrial designs, trade secrets, and know how including all biological, chemical, biochemical, toxicological, pharmacological and metabolic material and information and data relating thereto and formulation, clinical, analytical and stability information and data which have actual or potential commercial value and are not available in the public domain; 
“Invention” means any and all information, results, data, innovation, improvement, development, discovery, computer program, device, trade secret, method, know-how, process, technique or the like, whether or not written or otherwise fixed in any form or medium, regardless of the media on which it is contained and whether or not patentable or copyrightable; 
“Inventory” means all inventories of Finished Product, Components, Active Material, and work-in-process produced or held by Corden for the manufacture of the Product;
“KindredBio Indemnitees” has the meaning specified in Section 10.3; 
“KindredBio Intellectual Property” means Intellectual Property generated or derived by KindredBio or any of its Affiliates before entering into this Agreement or independent of this Agreement, or by Corden or any of its Affiliates while performing services under the MDA (including the Manufacturing Process) or any Manufacturing Services or otherwise generated or derived by Corden or any of its Affiliates, which Intellectual Property is directly related to, specific to, or dependent upon, the Active Material or the Product; 
“KindredBio Property” has the meaning specified in Section 8.4(e); 
“Late Delivery” has the meaning specified in Section 5.5(b); 
“Latent Defect” means a defect in the Product that was not, and could not reasonably be expected to have been, found by exercise of ordinary care by following the Specifications or by visual inspection of the Product at Delivery; 
“Late Product” means the Product ordered under a purchase order that is not delivered on the Delivery Date; 
“Losses” has the meaning specified in Section 10.3; 
“Manufacturing Process” means the process validated under the MDA for the manufacture of the Product and any changes thereto agreed upon by the Parties in writing;

	
			
	 
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Exhibit 10.1

“Manufacturing Services” means the manufacturing, quality control, quality assurance, stability testing, packaging, labelling, storage and related services provided by Corden to manufacture the Product in accordance with the Manufacturing Process using Components and Active Material pursuant to this Agreement; 
“Manufacturing Site” means the facility owned and operated by Corden located at Viale dell’Industria 3, 20867 Caponago (MB) Italy, where the Manufacturing Services will be performed and where all Product shall be released and stored for shipment by KindredBio or KindredBio’s designee; 
“MDA” means the Master Development Agreement effective November 1, 2014 between the Parties;
“Non-Conforming Product” has the meaning specified in Section 6.1(a); 
“Out of Specification” or “OOS” means a confirmed result that falls outside the Specifications. 
“Party” and “Parties” means, respectively, each of Corden and KindredBio and Corden and KindredBio collectively; 
“Product” or “Products” means KindredBio’s proprietary ZimetaTM (Dipyrone Injection); 
“Product Warranties” has the meaning specified in Section 9.3(a); 
“QA Agreement” means the Quality Assurance Agreement between the Parties in the form attached as Exhibit B hereto that sets out the quality assurance standards and responsibilities for the Manufacturing Services to be performed by Corden for KindredBio, as such agreement may be amended from time to time in accordance with its terms;
“Recall” means any action (i) by KindredBio or its Affiliates or licensees to recover title to or possession, or stop distribution, prescription or consumption, of quantities of the Product sold or shipped to Third Parties (including, without limitation, the voluntary withdrawal of the Product from the market) or (ii) by any Regulatory Authorities to detain or destroy any of the Product. Recall will also include any action by KindredBio or its Affiliates or licensees to refrain from selling or shipping quantities of the Product to Third Parties that would have been subject to a Recall if sold or shipped. 
“Recipient” has the meaning specified in Section 11.1; 
“Regulatory Authority” means the FDA, Health Canada, EMA and any other foreign regulatory agencies competent to grant marketing approvals for the Product in the Territory; 
“Remediation Period” has the meaning specified in Section 8.2(a); 

	
			
	 
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Exhibit 10.1

“Specifications” means the requirements for the Product established by KindredBio as set forth on Exhibit A, as updated, amended and revised from time to time by KindredBio in accordance with the terms of this Agreement; 
“Technology Transfer” means the transfer by Corden to KindredBio or any Third Party designated by KindredBio of all information relating to the Manufacturing Process, all documents, manufacturing instructions, specifications, and any other relevant documentation, all relevant manufacturing know-how, licenses and materials (including raw materials specifications) related to the Product that Corden or its Affiliates, as applicable, controls or has the right to license at any time during the Term and that is necessary to enable KindredBio or its designee to manufacture the Product in accordance with the Manufacturing Process and the Specifications and to comply with applicable regulatory requirements (including obtaining any necessary regulatory approvals, conducting any required studies and developing any other regulatory documentation) and all Applicable Laws in connection with the transfer; 
“Term” has the meaning specified in Section 8.1; 
“Territory” means all the jurisdictions following the regulatory requirements of the FDA, Health Canada, the EMA and other Regulatory Authority in any other jurisdiction for which Corden agrees in writing to manufacture Product in accordance with this Agreement; 
“Third Party” means any party other than KindredBio, Corden and their respective Affiliates; 
“Third Party Rights” means any Intellectual Property of any Third Party; and
1.2    Currency.  All monetary amounts expressed in this Agreement are in Euros (€), unless otherwise expressed in United States Dollars (US$). 
1.3    Sections and Headings.  The division of this Agreement into Articles, Sections, Subsections, and Exhibits and the insertion of headings are for convenience of reference only and will not affect the interpretation of this Agreement. Unless otherwise indicated, any reference in this Agreement to a Section, or Exhibit refers to the specified Section, or Exhibit to this Agreement. In this Agreement, the terms “this Agreement,” “hereof,” “herein,” “hereunder” and similar expressions refer to this Agreement as a whole and not to any particular part, Section, or Exhibit of this Agreement. 
1.4    Singular Terms.  Except as otherwise expressly stated or unless the context otherwise requires, all references to the singular will include the plural and vice versa, and all references to “includes” or “including” means “includes without limitation” or “including without limitation.” 
1.5    Exhibits.  The following Exhibits are attached to, incorporated in, and form part of this Agreement: 
Exhibit A:    Product Specifications
Exhibit B:    QA Agreement

	
			
	 
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Exhibit 10.1

ARTICLE 2     
CORDEN’S MANUFACTURING SERVICES
2.1    Manufacturing Services.  Corden will perform the Manufacturing Services and supply to KindredBio the Product for the Territory for the price.  Corden will perform the Manufacturing Services in strict compliance with the Manufacturing Process, Specifications, cGMPs and Applicable Laws.  Corden may not change the Manufacturing Process, the Specifications or the Manufacturing Site (including facility modifications) or any other aspect of the Manufacturing Services except with the prior written consent of KindredBio.  In performing the Manufacturing Services, Corden and KindredBio agree that: 
(a)    Corden will use Active Material and Components on a first-to-expire, first-to-use basis to manufacture the Product in accordance with this Agreement. Corden will not use any Components paid for by KindredBio for any other use or purpose. 
(b)    Corden will perform the quality control and quality assurance testing, Batch review and release to KindredBio in accordance with the QA Agreement.  Corden will perform its Batch review and release responsibilities in accordance with Corden’s standard operating procedures, copies of which have been made available to KindredBio, and will not change Corden’s standard operating procedures related to the Product in any material respect without KindredBio’s prior written approval, which approval shall not unreasonably be withheld.  Each time Corden ships the Product to KindredBio or KindredBio’s designee, it will furnish KindredBio a Certificate of Analysis, Certificate of Compliance, Certificate of Manufacture and list of any Deviations (“Delivery Documentation”).  The Batch documents, including, but not limited to, Batch production records, lot packaging/labeling records, equipment set up control, operating parameters, investigation/non-conformances, and data printouts, raw material data, and laboratory notebooks will be the exclusive property of KindredBio.  Corden will furnish to KindredBio any information reasonably required by KindredBio to perform a Technology Transfer or requested by a Regulatory Authority. Except for Corden Intellectual Property, all information contained in the Batch documents, including, but not limited to all Product-related information, shall be KindredBio Property. 
(c)    Corden will purchase and test all Active Material and Components at Corden’s expense in accordance with the Specifications and the QA Agreement. 
(d)    Corden will conduct stability testing on the Product in accordance with the protocols set out in the QA Agreement and the Specifications.  Corden will not make any changes to these testing protocols without prior written consent of KindredBio.  If a confirmed stability test failure occurs, Corden will notify KindredBio within one (1) Business Day, after which Corden and KindredBio will jointly determine the proceedings and methods to be undertaken to investigate the cause of the failure in accordance with the QA Agreement, including which Party will bear the cost of the investigation. Corden will not be liable for these costs unless it has failed to perform the Manufacturing Services in accordance with the Manufacturing Process, the Specifications, the QA Agreement, cGMPs and Applicable Laws. Corden will give KindredBio all stability test data and results (including a final report) at KindredBio’s request within five (5) Business Days following completion of the testing. 

	
			
	 
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Exhibit 10.1

(e)    Corden will package the Product in accordance with the Specifications.  KindredBio will be responsible for the cost of artwork development, as applicable.  The Batch numbers and expiration dates will be affixed on the Product and on the shipping carton of the Product as outlined in the Specifications and as required by the QA Agreement, cGMPs and Applicable Laws. KindredBio may, in its sole discretion, make changes to labels, product inserts, and other packaging for the Product.  KindredBio will be responsible for the cost of labelling obsolescence, when changes occur, as contemplated in this Agreement. Corden’s name will not appear on the label or anywhere else on the Product unless (i) required by any Applicable Laws or (ii) Corden consents in writing to the use of its name. Corden is authorized to hold packaging and labeling material sufficient to cover the [* * *] of Product volume forecast as provided in Section 6.1 or the minimum order quantity as provided on Attachment A.
(f)    At least ten (10) days before the scheduled production date, Corden will cause to deliver Active Material to the Manufacturing Site, in sufficient quantity to enable Corden to manufacture and ship the Product by the Delivery Date.  All Active Materials will have been tested by Corden in accordance with the QA Agreement.  All shipments of Active Material will be accompanied by a certificate of analysis, confirming the identity and purity of the Active Material. 
(g)    Corden will store at no cost to KindredBio Active Material inventory [* * *] in a controlled and monitored environment and at appropriate conditions in accordance with Specifications, the QA Agreement, cGMPs and Applicable Laws (the "Stocking API"). In the event Corden is required to purchase Active Material inventory in excess of the Stocking API as a result of minimum Active Material purchase requirements, KindredBio shall pay Corden a reasonable storage fee for the excess amount as mutually agreed by the Parties.
ARTICLE 3     
KINDREDBIO’S OBLIGATIONS
3.1    KindredBio Requirements.  Unless otherwise agreed in this Agreement, for so long as Corden remains in material compliance with its obligations under this Agreement, KindredBio will purchase from Corden, and Corden will manufacture, hereunder at least [* * *] of KindredBio’s requirements for the Product in the Territory.   For each year after the anniversary of the Effective Date, if KindredBio does not purchase at least [* * *] units of the Product in any year, prorated for any period of less than a full calendar year (the “Annual Minimum”), Corden may invoice KindredBio for the number of units of the Product equal to the difference between the Annual Minimum and the actual number of units of the Product purchased by KindredBio during such year.  If Corden does not remain in material compliance with its obligations under this Agreement, the Annual Minimum will no longer apply in addition to any other remedies KindredBio may have under this Agreement.  If this Agreement is terminated by KindredBio under any of Section 9.2(a)-(d) or by Corden under Section 9.3(b), the Annual Minimum will not apply to the year in which the Agreement is terminated.
3.2    Payment.  KindredBio will pay Corden for the Product in accordance with this Agreement.

	
			
	 
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Exhibit 10.1

3.3    Active Material and Qualification of Additional Sources of Supply.  Corden will, at its sole cost and expense, deliver or arrange for delivery of Active Material to Manufacturing Site in accordance with Section 2.1(f). Corden will be responsible for obtaining the proper release of Active Material from the applicable customs agency and Regulatory Authority.  Corden or Corden’s designated broker will be the “importer of record” for Active Material imported to the Manufacturing Site. Active Material will be held by Corden on behalf of KindredBio as set forth in this Agreement.  
ARTICLE 4     
PRICE
4.1    First Year Price.  Except as provided in Section 4.3 below, the price for the Product through December 31, 2017 is as set forth in Attachment A.  The price of the Product for subsequent periods shall be that price, as it may be adjusted as provided in Sections 4.2.  For clarity, Corden is responsible for any import duties, value added taxes and related refund processing, and export of the Product, and KindredBio is responsible for shipping and logistics of the Product FCA the jointly agreed Italy airport or Italy seaport as provided in Section 6.6.
4.2    Subsequent Year Pricing.  Except as otherwise stated in Attachment A related to the initial [* * *] Batches of Product manufactured at the [* * *]scale, prior to the beginning of each calendar year commencing with 2018, the Parties shall agree to an annual exchange rate of Euro/US dollar and revised pricing if supported by Corden’s previous year actualized total cost for the Product, with such revised pricing capped and in no event shall [* * *] of the previous year’s price for the Product manufactured at the [* * *] Batch scale under Attachment A, or [* * *] of the [* * *] Batch scale under Attachment A. The price of the Product as set forth in Attachment A, as updated in accordance with this Section 4.2, will be subject to adjustment as of the beginning of such calendar year based upon the average exchange rate Euro/US dollar prevailing in any calendar year (“AER”) varying by more than [* * *] with respect to the initial exchange rate (IER) of 1.0763 USD = 1 Euro.  The adjustment, which will apply retroactively to Product ordered in the relevant semester, will be determined as follows:
(a)    [* * *]
(b)    [* * *]
In either case, the amount of the adjustment will be added or reduced from the first invoice issued by Corden Pharma S.p.A after determining the AER, provided that in no event the price (expressed in Euro), as resulting after computation of the adjustment, will be lower than Corden’s direct cost of materials, labor and general expenses related to the production of Product.  In connection with the computation, Corden will deliver to KindredBio budgetary pricing information, Component costs or other information reasonably requested by KindredBio or otherwise used by Corden to determine its cost of manufacturing the Product.  Details on the computation of adjustment will be included with each invoice.  
4.3    KindredBio API Purchase. 

	
			
	 
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Exhibit 10.1

(a)     As of the Effective Date, [* * *]kilograms of API was purchased from [* * *] for an aggregate purchase price of €[* * *] (the “KindredBio API Cost”) and such API was delivered to Corden (the “KindredBio API”).  Prior to purchasing additional API pursuant to this Agreement, Corden shall use the KindredBio API for manufacture of the Product until its depletion.  Corden shall for each batch of Product using the KindredBio API provide a per vial credit in the amount of €[* * *] for each vial produced until such time KindredBio has received an aggregate credit equal to the KindredBio API Cost.  

ARTICLE 5     
PRICE ADJUSTMENTS
5.1    Price Adjustments Due to Technical Changes.  Changes to the Manufacturing Process, the Specifications, the QA Agreement or the Manufacturing Site requested by Corden will only be implemented following the written approval of KindredBio and will not affect the price unless KindredBio agrees otherwise.  Changes to the Manufacturing Process, the Specifications or the QA Agreement requested by KindredBio will be implemented only following a technical and cost review that Corden will perform at KindredBio’s cost, and are subject to KindredBio and Corden on reaching agreement on any Product price adjustments required because of the changes.  Upon receiving notice of a request by KindredBio for any such changes, Corden will promptly advise KindredBio in writing of any scheduling adjustments, cost increases or decreases or other changes that may result from the requested changes, and (a) will use commercially reasonable efforts to make any requested change that is in response to a regulatory or safety issue pertaining to the Product, and (b) will use commercially reasonable efforts to implement any other change identified in a KindredBio request by the date requested by KindredBio, or as soon thereafter as it is commercially reasonable.  If KindredBio accepts a proposed price change, the related change in the Manufacturing Process, the Specifications or the QA Agreement will be implemented and the price change will become effective.  
5.2    Multi-Country Packaging Requirements.  If KindredBio decides to have Corden perform Manufacturing Services for the Product for jurisdictions outside the Territory, KindredBio will inform Corden of the packaging requirements for each such jurisdiction and Corden will prepare a quotation for consideration by KindredBio of any additional costs for Components and the changeover fees for the Product destined for each such jurisdiction.  Any agreed additional packaging requirements and related packaging costs and change-over fees will be set out in a written amendment to this Agreement. 
ARTICLE 6     
ORDERS, SHIPMENT, INVOICING, PAYMENT
6.1    Forecasts and purchase orders.  
(a)    Forecast.  Concurrently with the execution and delivery of this Agreement, KindredBio has furnished to Corden a written, non-binding forecast (“Forecast”) of the volume of Product that KindredBio anticipates it will require to be manufactured and delivered to 

	
			
	 
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Exhibit 10.1

KindredBio during the twelve (12) month period following the Effective Date.  Thereafter, KindredBio will furnish Corden with a monthly rolling Forecast for the succeeding twelve (12) month period. 
(b)    Acceptance of Purchase Orders.  KindredBio shall place purchase orders binding on KindredBio for the Product it wishes to purchase at [* * *] (or earlier as may be reasonably requested by Corden) prior to the Delivery Date. Purchase orders shall include (i) the quantity of Product and (ii) the Delivery Date.  All Product shall be stored in Corden’s warehouse at the Manufacturing Site pending shipment to KindredBio.  Corden will accept or reject KindredBio’s purchase orders for Product by sending an acknowledgement to KindredBio within five (5) Business Days of its receipt of the purchase order. The acknowledgement will include, subject to confirmation from KindredBio, the Delivery Date for the Product ordered. The Delivery Date may be amended by written agreement of the Parties or as set forth in this Agreement.  If Corden fails to send an acknowledgement to KindredBio within the five (5) Business Day period, then the purchase order will be deemed to have been accepted by Corden.  Corden will accept purchase orders submitted in accordance with this Agreement.  If Corden will not be able to make Product available by the Delivery Date specified in a purchase order, Corden will promptly notify KindredBio and take such actions as requested by KindredBio to make as much of the Product subject to the purchase order available as soon as possible on or after the Delivery Date.  If Corden rejects a purchase order submitted in accordance with this Agreement, without limiting KindredBio’s other rights and remedies hereunder, KindredBio may obtain the ordered Product from another supplier, and such Product will be credited to KindredBio against the Annual Minimum.  If Corden rejects two or more purchase orders in a six (6) month period, the Annual Minimum will no longer apply. 
6.2    Corden Fulfillment of Forecasts.  Subject to the terms of this Agreement, Corden shall manufacture and supply, in each calendar quarter, the Product in quantities sufficient to fulfill all purchase orders placed by KindredBio up to [* * *] of the Forecast for such quarter (“Forecast Cap”). For clarity, in calculating the Forecast Cap, the permissible Forecast Cap shall be rounded up to the nearest whole Batch and be in compliance with the agreed Forecast Cap.  Notwithstanding the forgoing, purchase orders placed before December 31, 2017 shall not be subject to Forecast Cap.
6.3    Supplemental Orders.  KindredBio may submit supplemental purchase orders for additional Product throughout the Term.  Corden will notify KindredBio as soon as practicable, but in no event later than ten (10) Business Days after the date of the purchase order, as to when the supplemental purchase order is to be filled.  Corden will use commercially reasonable efforts to fill supplemental purchase orders within three (3) months of receipt.
6.4    Corden Failure to Supply.  With the exception of Force Majeure and purchase orders placed prior to December 31, 2017, in the event that Corden fails in a calendar quarter to provide KindredBio with at least[* * *]of Product in its purchase orders by the scheduled Delivery Date (“Failure to Supply”), the price of Product that is delivered late will be reduced by [* * *].  Further, the shortfall of such purchase orders will be delivered within ten (10) Business Days.  If 

	
			
	 
	11
	 

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Exhibit 10.1

the Failure Supply is more than sixty (60) days after the Delivery Date, KindredBio may cancel the purchase order and the requirements set forth in Section 4.1 will no longer apply.
6.5    Competing Product.  During the Term of this Agreement, and for an additional period of six (6) months following the expiration or termination of this Agreement, in addition to other limitations with respect to the use of KindredBio’s Intellectual Property, Corden shall not manufacture or supply any Competing Product for itself or for or on behalf of any Third Party.
6.6    Shipment.  KindredBio will be responsible for shipment of the Product, which shipment will be made FCA the jointly agreed Italy airport or Italy seaport (Incoterms 2010).  Risk of loss or of damage to the Product will remain with Corden until the Product is loaded at the agreed upon Italy airport or the Italy seaport and onto the carrier’s vehicle for shipment, at which time risk of loss or damage will transfer to KindredBio. For clarity, Corden or Corden’s designee will obtain any export license or other official authorization necessary to export the Product, and KindredBio (or its designee) shall arrange for insurance and will select the freight carrier used to ship Product to KindredBio or its designee (including KindredBio’s 3PL). 
6.7    Late Delivery.  
(a)    Corden will release the Product ordered under a purchase order on the applicable Delivery Date. The Parties agree that they will work together closely to expedite deliveries of the Product. 
(b)    If Corden is unable to release [* * *] of the quantity of Product ordered under a purchase order within ten (10) days of the Delivery Date and the balance by thirty (30) days of the Delivery Date due to an act or omission by Corden (in either case a “Late Delivery”), KindredBio will receive a credit from Corden for the Late Delivery that will be applied against the purchase price under the next purchase order.  The credit will be [* * *] of the price of the quantity of Product not delivered by Corden under the purchase order (i.e., KindredBio Credit = Quantity purchase ordered in the purchase order – Actual Delivery Quantity of Product x price x [* * *]). Corden will use commercially reasonable efforts to provide the late the Product within ten (10) days.  If Corden makes two or more Late Deliveries for the same the Product in the same calendar quarter, KindredBio will receive an additional credit of [* * *] from Corden for the Late Deliveries that will be applied against the purchase price under the next purchase order. The total credit will be [* * *] of the price of the quantities of the Product not delivered by Corden under the purchase order (i.e., KindredBio Credit = Quantity purchase ordered in the purchase order – Actual Delivery Quantities of the Product x price x [* * *].  Without limiting KindredBio’s other rights or remedies in this Agreement, if Corden makes two or more Late Deliveries within a six (6)-month period, the Parties will meet and agree on and implement a delivery improvement action plan within five (5) Business Days. If, after the delivery improvement plan is in place, two additional Late Deliveries occur within a six (6)-month period, these Late Deliveries may be considered a material breach of this Agreement by Corden under Section 9.2(a) and Corden will not be allowed any further opportunity to remedy the material breach. 

	
			
	 
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Exhibit 10.1

(c)    A Late Delivery will not include any delay in shipment of Product caused by events outside of Corden’s reasonable control, such as a Force Majeure Event or a delay in delivery. 
6.8    Invoices and Payment.  Invoices will be sent by email to ap@kindredbio.com, with a copy to any additional email address given by KindredBio to Corden in writing, and must include the applicable KindredBio PO number. Invoices will be sent when the Product is manufactured and released by Corden to KindredBio. Corden will also submit to KindredBio, with each shipment of the Product, a duplicate copy of the invoice covering the shipment and the associated Delivery Documentation.  Each invoice will, to the extent applicable, identify KindredBio’s Manufacturing Services purchase order number, the Product number, name and quantity, unit price, freight charges, Delivery Documentation and the total amount to be paid by KindredBio. KindredBio will pay each invoice within thirty (30) days of receipt to the email address set forth in this paragraph. If any portion of an invoice is disputed, KindredBio will pay Corden for the undisputed amount and the Parties will use good faith efforts to reconcile the disputed amount as soon as practicable, but in no case more than sixty (60) days. The Late Delivery credits set forth in Section 6.7(b) are only available to KindredBio if all outstanding undisputed invoices have been paid in full or are within thirty (30) days outstanding from the invoice date when the Late Delivery arose. In the case of a Deficiency Notice, payments will be due within thirty (30) days following receipt of a replacement Batch or Batches that are not subject to a Deficiency Notice.  Batches that are determined to have a Latent Defect due to Corden will be either credited against future Batches or refunded at the sole discretion of KindredBio. No payments will be due for Non-Conforming Product, and Corden will use commercially reasonable efforts to replace the Non-Conforming Product within ten (10) days.
ARTICLE 7     
PRODUCT CLAIMS AND RECALLS
7.1    Product Claims.  
(a)    Product Claims.  KindredBio has the right to reject any shipment of the Product or any portion thereof that does not conform to the Product Warranties set forth in Section 10.3(a) (the “Non-Conforming Product”), without invalidating any portion of the shipment of the Product that conforms to the Product Warranties. KindredBio or KindredBio’s designee will inspect the Product manufactured by Corden upon release at the Manufacturing Site or the agreed delivery location specified in Section 6.6 above, and KindredBio will give Corden written notice (a “Deficiency Notice”) of all claims for Non-Conforming Product within forty-five (45) days after KindredBio’s or KindredBio’s designee’s receipt of the Product and the Delivery Documentation thereof (or, in the case of Latent Defect, within ten (10) days after confirmation by KindredBio, its Affiliate or any licensee, distributor or other Third Party, but not after the expiration date of the Product). If KindredBio fails to give Corden the Deficiency Notice within such forty-five (45) day period, then the delivery will be deemed to have been accepted by KindredBio on the forty-fifth (45th) day after delivery or confirmation, as applicable. Except as set out in Section 6.3, Corden will have no liability for any Deviations for which it has not received notice within the applicable forty-five (45) day period, except for a Latent Defect. 

	
			
	 
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Exhibit 10.1

(b)    Determination of Deficiency.  Upon receipt of a Deficiency Notice, Corden will have ten (10) days to advise KindredBio by notice in writing that it disagrees with the substance of the Deficiency Notice. Should Corden fail to provide such notice to KindredBio within the ten (10) day period, then Corden will be deemed to agree with the contents of the Deficiency Notice. If KindredBio and Corden fail to agree within ten (10) days after Corden’s notice to KindredBio as to whether any the Product identified in the Deficiency Notice is Non-Conforming Product, then the Parties will mutually select an independent laboratory or expert to evaluate if the Product is Non-Conforming Product. This evaluation will be binding on the Parties. If the independent laboratory or expert determines that any Product is Non-Conforming Product, KindredBio may reject those the Product in the manner contemplated in this Section 6.1 and Corden will be responsible for the cost of the evaluation. If the independent laboratory determines that the Product conform to the Product Warranties, then KindredBio will be deemed to have accepted delivery of the Product on the forty-fifth (45th) day after release (or, in the case of any defects not reasonably susceptible to discovery upon delivery of the Product, on the tenth (10th) day after confirmation thereof by KindredBio, but not after the expiration date of the Product) and KindredBio will be responsible for the cost of the evaluation. 
(c)    Shortages.  Claims for shortages in the amount of the Product shipped by Corden will be dealt with by reasonable agreement of the Parties.
7.2    Product Recalls and Returns.  
(a)    Records and Notice. Corden and KindredBio will each maintain records necessary to permit a Recall of any the Product delivered to KindredBio or customers of KindredBio. Each Party will promptly notify the other by telephone to the contacts designated in the QA Agreement (to be confirmed in writing) of any information which might affect the marketability, safety or effectiveness of the Product or which might result in the Recall or seizure of the Product within one (1) Business Day. Upon receiving this notice or upon this discovery, each Party will stop making any further shipments of any the Product in either Party’s possession or control until KindredBio has made a decision as to whether a Recall or some other corrective action is necessary. The decision to initiate a Recall or to take some other corrective action, if any, will be made and implemented by KindredBio. 
(b)    Recalls.  If (i) any Regulatory Authority issues a directive, order or, following the issuance of a safety warning or alert about a the Product, a written request that any the Product be Recalled, (ii) a court of competent jurisdiction orders a Recall, or (iii) KindredBio determines that any the Product should be Recalled or that a “Dear Doctor” letter is required relating the restrictions on the use of any the Product, Corden will co-operate as reasonably required by KindredBio, having regard to all Applicable Laws. 
(c)    Product Returns.  KindredBio will have the responsibility for handling customer returns of the Product.  Corden will provide KindredBio any assistance that KindredBio may reasonably require to handle the returns including, if requested by KindredBio, appropriate investigations. 

	
			
	 
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Exhibit 10.1

7.3    Corden’s Responsibility for Non-Conforming and Recalled Product.  
(a)    Non-Conforming Product.  If KindredBio rejects the Product under Section 7.1, KindredBio will not be required to pay for the Product under Sections 3.2 and 6.8 and Corden will promptly, at KindredBio’s election, either: (i) refund the amount paid for the Non-Conforming Product if KindredBio previously paid for the Product; (ii) offset the amount paid for the Non-Conforming Product, if KindredBio previously paid for the Product, against other amounts due to Corden hereunder; or (iii) at Corden’s sole expense, replace the Product with conforming the Product without KindredBio being liable for payment therefor under Sections 3.2 and 6.8. 
(b)    Recalled Product. If a Recall or return of the Product results from, or arises out of, a failure by Corden to perform the Manufacturing Services in accordance with the terms of this Agreement, including the warranties set forth in Sections 10.3 and 10.4 or other negligence or willful misconduct of Corden, Corden will be responsible for the documented costs and out-of-pocket expenses of the Recall or return and will promptly, at the election of KindredBio, either: (i) refund the amount paid for the Recalled or returned the Product and the cost incurred by KindredBio for the KindredBio API used in the Product; (ii) offset the amount paid for the Recalled or returned the Product and the cost incurred by KindredBio for KindredBio API used in the Product, against other amounts due to Corden hereunder; or (iii) replace the Recalled or returned Product with conforming Product, at Corden’s sole expense, as promptly as practical without KindredBio being liable for payment therefor under Section 3.2.  In all other circumstances, Recalls, returns or other corrective actions will be made at KindredBio’s cost and expense. For clarification, any refund of the amount paid by KindredBio for the Recall or return of the Product that is paid by Corden subject to this Section 7.3(b) will not be considered a liability under, and therefore will not be subject to, Section 11.2(a). 
(c)    Product Rejection for Finished Product Specification Failure.  If a Batch or portion of a Batch of the Product does not meet a finished the Product Specification despite Corden’s assertion that it manufactured the Product in accordance with the agreed upon process specifications, the Batch production record, and Corden’s standard operating procedures for manufacturing, the Parties agree that they will mutually select an independent laboratory or expert to evaluate if such laboratory or expert can determine why the Product do not meet the Product Specifications.  The evaluation will be binding on the Parties. If the independent laboratory or expert determines that the Product is Non-Conforming due to an act or omission by Corden or does not otherwise comply with the terms of this Agreement, KindredBio may reject the Product in the manner contemplated by Section 7.1 and Corden will be responsible for the cost of the evaluation.  If the independent laboratory determines that the Corden complied with the Manufacturing Process, the Batch production record, and Corden’s standard operating procedures and that the Product does not meet the Product Specifications, KindredBio will be responsible for the cost of the evaluation and will pay Corden the price of the Non-Conforming Product. 
(d)    Except as set forth in Sections 7.3(a) and (b) above, Corden will not be liable to KindredBio nor have any responsibility to KindredBio for any deficiencies in, or other liabilities 

	
			
	 
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Exhibit 10.1

associated with, any Product manufactured by it (collectively, the “Product Claims”).  For greater clarity, Corden will have no obligation for any Product Claims to the extent the Product Claim (i) is caused by deficiencies in the Specifications, the safety, efficacy, or marketability of the Product manufactured in accordance with this Agreement and conforming to the Specifications or any distribution thereof, (ii) results from a defect in a Component that is not reasonably discoverable by Corden using the methods set forth in the Specifications or as otherwise provided in this Agreement, (iii) results from a defect in the Active Material that is not reasonably discoverable by Corden using the methods set forth in the Specifications or as otherwise provided in this Agreement, (iv) is caused by actions of Third Parties occurring after the Product is shipped by Corden under Section 6.6, (v) is due to packaging design or labelling defects or omissions for which neither Corden nor any of its Affiliates or its or their employees, agents or subcontractors has any responsibility, (vi) is due to any unascertainable reason despite Corden having performed the Manufacturing Services in accordance with the QA Agreement, Specifications, cGMPs, Applicable Laws, and the other terms of this Agreement, as determined by an independent laboratory or expert as set forth in Section 7.3(c) above; or (vii) is due to any breach by KindredBio of its obligations under this Agreement. 
7.4    Disposition of Defective or Recalled Product.  KindredBio will not dispose of any damaged, defective, returned, Non-Conforming or Recalled Product for which it intends to assert a claim against Corden without Corden’s prior written authorization to do so, which will not be unreasonably withheld or delayed. Alternatively, Corden may instruct KindredBio to return the Product to Corden.  Corden will bear the cost of disposition (including any applicable shipping charges, storage fees or the cost of destruction) for any damaged, defective, returned or Recalled Product for which it bears responsibility under Section 7.1 or 7.3. In all other circumstances, KindredBio will bear the cost of disposition, including all applicable fees for Manufacturing Services, for any damaged, defective, returned, or Recalled Product. 
7.5    Sole Remedy.  Except for the indemnity set forth in Section 11.2 and subject to the limitations set forth in Sections 11.1 and 11.2, the remedies described in this Article 7 will be KindredBio’s sole remedy for any failure by Corden to supply the Product that conform to the Product Warranties. 
ARTICLE 8     
CO-OPERATION
8.1    Quarterly Review.  Each Party will forthwith upon execution of this Agreement appoint one of its employees to be a relationship manager responsible for liaison between the Parties. The relationship managers will meet, in person or by conference telephone or other remote means, at least once each quarter to review the current status of the business relationship and manage any issues that have arisen. 
8.2    Governmental Agencies.  Subject to Section 8.8, Corden may communicate with any governmental agency, including but not limited to governmental agencies responsible for granting regulatory approval for the Product, regarding the Product only if, in the opinion of Corden’s counsel, the communication is necessary to comply with the terms of this Agreement or the requirements of any Applicable Law and a representative of KindredBio is present for a 

	
			
	 
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Exhibit 10.1

verbal communication or has reviewed and approved a written communication. Corden will notify KindredBio immediately upon and in any event within one (1) Business Day after receiving any request from a Regulatory Authority for communication related to the Product. 
8.3    Records and Accounting by Corden.  Corden will keep records of the manufacture and testing of the Product (including evidence on the testing of raw materials, Active Material, packaging and labeling materials as required by the QA Agreement), and retain a minimum of three (3) samples per batch of the Product as are necessary to comply with applicable manufacturing regulatory requirements, as well as to assist with resolving any Product complaints and other similar investigations. Copies of the records and samples will be retained for ten (10) years or one (1) year following the date of the Product expiry (whichever is longer), or longer if required by Applicable Law, at which time KindredBio will be contacted concerning the delivery and destruction of the documents and/or samples of the Product at least forty-five (45) days prior to the destruction of the documents or samples. Corden will not store these documents or samples beyond the time period set forth above.  
8.4    Inspection of Records.  KindredBio or its designee may inspect Corden reports and records relating to this Agreement during normal business hours and with reasonable advance notice of at least seven (7) Business Days, but a Corden representative must be present during the inspection. In addition, as more fully set forth in Section 4.2, KindredBio will have the right to allow an independent Third Party auditor to review the information supporting the price adjustments made under Sections 4.2, 4.3 and 5.1. 
8.5    Access.  Corden will give KindredBio reasonable access at agreed times to procedures and documentation relevant to the Product, and to the areas of the Manufacturing Site in which the Product is manufactured, stored, handled or shipped, to permit KindredBio to verify that the Manufacturing Services are being performed in accordance with the Specifications, the QA Agreement, cGMPs, and Applicable Laws.  But, with the exception of “For-Cause” Audits, KindredBio will be limited each year to one cGMPs-type audit, lasting no more than five (5) days, and involving no more than two (2) auditors. KindredBio may request additional cGMP-type audits, additional audit days, or the participation of additional auditors subject to payment to Corden of a fee [* * *]. The right of access set forth in this Section 7.5 will not include a right to access or inspect Corden’s financial records. In addition, upon the request of any Regulatory Authority having jurisdiction over the manufacture of the Product hereunder, the Regulatory Authority will have access to observe, audit and inspect any Manufacturing Site and Corden’s procedures used for the manufacture, release and stability testing or warehousing of the Product and to audit those facilities and procedures for compliance with cGMPs and other Applicable Laws.  Corden specifically agrees to cooperate with any inspection by a Regulatory Authority, whether prior to or after Regulatory Approval of the Product, and to provide KindredBio a copy of any inspection or audit report resulting from the inspection within three (3) Business Days from receiving the report. KindredBio may be present at the Manufacturing Site for consultation during any such inspection. 
(a)    Year End Physical Inventory Inspection Access.  Prior to the end of each calendar year, and in addition to the access rights covered under 8.5 above, upon mutual agreement of the 

	
			
	 
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Exhibit 10.1

specific date between the Parties, representatives of KindredBio (or its designee) and the independent auditors of KindredBio, shall be permitted to perform a physical audit and physical count of the amount of inventory of Kindred API, Product, work in process, and other Components that KindredBio purchased and supplied to Corden, stored at the Manufacturing Site, and if applicable, at any other facilities of Corden, or its Approved Subcontractor where such KindredBio inventory may be stored.  
8.6    Notification of Regulatory Inspections.  Corden will notify KindredBio within one (1) Business Day of any inspection, receipt of notice of any inspection or any request for samples by any governmental agency specifically involving the Product.  Corden will also notify KindredBio within three (3) Business Days of receipt of any form 483’s or warning letters or any other significant regulatory action or finding which could directly or indirectly impact the regulatory status of the Product or Corden’s ability to perform the Manufacturing Services. Within three (3) Business Days of receipt, Corden will provide KindredBio with a reasonable description of the notifications and inspections and all supporting documentation, including, as applicable, all form 483’s and warning letters or similar warning or objection, responses and all other correspondence and discussions of the applicable Regulatory Authority, which should be redacted to protect the confidential information of Third Parties. Corden will discuss with KindredBio and consider in good faith any comments provided by KindredBio on the proposed response. Additionally, Corden will obtain KindredBio’s prior approval of any such responses related to the Product. Corden will use commercially reasonable efforts to address and rectify any issues or problems in its manufacturing facility or procedures and any objections or warnings raised by the Regulatory Authority as soon as practicable and to continue to manufacture and supply to KindredBio, in compliance with all Applicable Laws and the terms of this Agreement, the Product ordered by KindredBio. After the filing of a response with the FDA or other Regulatory Authority, Corden will notify KindredBio of any further contacts with the Regulatory Authority relating to the subject matter of the response. KindredBio may attend any inspection by any governmental agency specifically involving the Product.
8.7    Reports.  Corden will supply on an annual basis all the Product data in its control, including release test results, complaint test results, and all investigations (in manufacturing, testing, and storage), that KindredBio reasonably requires in order to complete any filing under any applicable regulatory regime, including any Annual Report that KindredBio is required to file with the FDA or any other Regulatory Authority or other information related to the performance of the Manufacturing Services mandated by a Regulatory Authority. Corden will promptly provide a copy of the Annual Report to KindredBio at no additional cost. Corden shall also supply to KindredBio on a monthly basis, no later than the fifth (5th) business day of each month, all inventory reports of work-in-process and finished goods inventories.  Any additional report requested by KindredBio beyond the scope of cGMPs and customary FDA or other Regulatory Authority requirements may be subject to an additional fee to be agreed upon between Corden and KindredBio. 
8.8    Regulatory Filings.  

	
			
	 
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Exhibit 10.1

(a)    Regulatory Authority.  KindredBio will have the sole right and responsibility for filing all documents with all Regulatory Authorities and taking any other actions that may be required for the receipt or maintenance of Regulatory Authority approval for the manufacture, import, export, distribution, marketing, sale, pricing or reimbursement of the Product. Corden will assist KindredBio, to the extent consistent with Corden’s obligations under this Agreement, to obtain Regulatory Authority approval for the commercial manufacture of the Product as quickly as reasonably possible. KindredBio will provide copies of relevant sections of regulatory filings to Corden that are necessary for Corden to ensure compliance of the manufacturing processes to those submitted to Regulatory Authorities. 
(b)    Verification of Data.  Prior to filing any documents with any Regulatory Authority that incorporate data generated by Corden, KindredBio will give Corden a copy of the documents incorporating this data to give Corden the opportunity to verify the accuracy and regulatory validity of those documents as they relate to Corden generated data. Corden requires fourteen (14) days to perform this review but the Parties may agree to a shorter time for the review as needed, including as mandated by a Regulatory Authority. These documents will be Confidential Information of KindredBio. 
(c)    Verification of CMC.  Prior to filing with any Regulatory Authority any documentation which is or is equivalent to the FDA’s CVM’s Chemistry and Manufacturing Controls (all such documentation herein referred to as “CMC”) related to any Marketing Authorization, such as an Animal New Drug Application, KindredBio will give Corden a copy of the CMC as well as all supporting documents which have been relied upon to prepare the CMC that directly relate to the Manufacturing Services provided by Corden. This disclosure will permit Corden to verify that the CMC accurately describes the work that Corden has performed and the manufacturing processes that Corden will perform under this Agreement. Corden requires 14 days to perform this review but the Parties may agree to a shorter time for the review as needed. KindredBio will give Corden copies of all Regulatory Authority filings at the time of submission to the extent containing CMC information that directly relate to the Manufacturing Services provided by Corden and may redact this information to protect the Confidential Information of any Third Party. 
(d)    Deficiencies.  If, in Corden’s sole discretion, acting reasonably, Corden determines that any of the information given by KindredBio under clauses (b) and (c) above is inaccurate or deficient in any material respect (the “Deficiencies”), Corden will notify KindredBio in writing of the Deficiencies as promptly as practical and in any case within the time frame set forth in clause (b) or (c), as applicable. The Parties will work together to have the Deficiencies resolved prior to any pre-approval inspection. 
(e)    KindredBio Responsibility.  For clarity, the Parties agree that in reviewing the documents referred to in clause (b) above, Corden’s role will be limited to verifying the accuracy of the description of the work undertaken or to be undertaken by Corden. Subject to the foregoing, Corden will not assume any responsibility for the accuracy of any application for receipt of an approval by a Regulatory Authority. The KindredBio is solely responsible for the 

	
			
	 
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Exhibit 10.1

preparation and filing of the application for approval by the Regulatory Authority and any relevant costs will be borne by KindredBio. 
(f)    Inspection by Regulatory Authorities.  If KindredBio does not give Corden the documents requested under clause (b) above within the time specified and if Corden reasonably believes that Corden’s standing with a Regulatory Authority may be jeopardized, Corden may, in its sole discretion, delay or postpone any inspection by the Regulatory Authority until Corden has reviewed the requested documents that directly relate to the Manufacturing Services provided by Corden and is satisfied with their contents. 
8.9    QA Agreement.  For clarification, if there is any conflict between the terms and conditions of this Agreement, including this Article 8, and the terms and conditions of the QA Agreement, the terms and conditions of the QA Agreement will control with regard to topics directly related to quality and compliance only. 
ARTICLE 9     
TERM AND TERMINATION
9.1    Term; Renewal.  The term of this Agreement will commence on the Effective Date and, unless terminated earlier in accordance with this Agreement, will continue for a period of three (3) years.  This Agreement shall automatically extend for one additional period of two (2) years at the end of the initial term, provided that neither party is in material breach of this Agreement and unless either party gives written notice to the other party of its intention not to renew at least six (6) months prior to the end of the Initial Term.  The initial term, as it may be extended as provided above, is any extension period referred to as the “Term.”
9.2    Termination for Cause.  
(a)    Either Party at its sole option may terminate this Agreement upon written notice where the other Party has failed to remedy a material breach of any of its representations, warranties, or other obligations under this Agreement within sixty (60) days following receipt of a written notice (the “Remediation Period”) of the breach that expressly states that it is a notice under this Section 9.2(a) (a “Breach Notice”). The aggrieved Party’s right to terminate this Agreement under this Section 9.2(a) may only be exercised for a period of sixty (60) days following the expiration of the Remediation Period (where the breach has not been remedied) and if the termination right is not exercised during this period then the aggrieved Party will be deemed to have waived the breach of the representation, warranty, or obligation described in the Breach Notice. 
(b)    Either Party at its sole option may immediately terminate this Agreement upon written notice to the other Party if: (i) the other Party is declared insolvent or bankrupt by a court of competent jurisdiction; (ii) a voluntary petition of bankruptcy is filed in any court of competent jurisdiction by the other Party; or (iii) this Agreement is assigned by the other Party for the benefit of creditors. 

	
			
	 
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Exhibit 10.1

(c)    KindredBio may terminate this Agreement upon at least thirty (30) days’ prior written notice, if any Authority takes any action, or raises any objection, that prevents KindredBio from importing, exporting, purchasing, or selling the Product, or KindredBio (or its Affiliate or licensee) determines that for safety or efficacy reasons KindredBio is not going to continue to develop or commercialize the Product. 
(d)    KindredBio may terminate this Agreement at any time upon written notice to Corden, without limiting KindredBio’s other rights or remedies under this Agreement, if any Authority takes any enforcement action regarding the Manufacturing Site that relates to the Product or could reasonably be expected to adversely affect the ability of Corden to supply the Product hereunder.
9.3    Product Discontinuation; Other Termination.  
(a)    Except for terminations under the other termination provisions of this Agreement (including Sections 9.2, 9.4 and 15.5), KindredBio will give Corden at least six (6) months’ advance notice if it intends to no longer order the Product for any reason.  
(b)    Corden will give KindredBio at least twenty-four (24) months’ advance notice if it intends to terminate this Agreement for any reason.  
9.4    Obligations on Termination.  If this Agreement is terminated for any reason: 
(a)    Upon receipt of notice of termination of this Agreement for any reason, Corden will provide assistance to KindredBio in a Technology Transfer.  KindredBio will be responsible for all costs associated with the Technology Transfer, except in the event of a termination of this Agreement by KindredBio under any of Sections 9.2(a)-(d), in which event Corden shall be responsible for such costs.  In all circumstances, Corden will use commercially reasonable efforts to meet the timeline requested by KindredBio.
(b)    KindredBio will take delivery of and pay for all unused Active Material (which payment shall be offset by that portion of any VAT tax which Corden has received, requested to receive, or otherwise eligible for a VAT tax refund) and undelivered Product that has been manufactured under a KindredBio purchase order and in compliance with the terms of this Agreement, at the price in effect at the time the purchase order was placed; and
(c)    KindredBio will use commercially reasonable efforts, at its own expense, to remove from each Manufacturing Site, within ninety (90) days, all unused Active Material, undelivered Product or other property owned by KindredBio related to this Agreement and located at a Manufacturing Site or that is otherwise under Corden’s care and control (“KindredBio Property”).  If KindredBio fails to remove KindredBio Property within ninety (90) days following the completion, termination, or expiration of the Product Agreement, KindredBio will pay Corden any third-party storage charges invoiced to Corden regarding KindredBio Property. Corden will invoice KindredBio for the storage charges as similarly set forth in Section 2.1(g) of this Agreement. 

	
			
	 
	21
	 

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Exhibit 10.1

Any termination or expiration of this Agreement will not affect any outstanding obligations or payments due prior to the termination or expiration, nor will it prejudice any other remedies that the Parties may have under this Agreement.  For greater certainty, expiration or termination of this Agreement for any reason will not affect the obligations and responsibilities of the Parties under Articles 11, 12, 13 14, and 15, and Sections 6.5, 6.6, 6.8, 8.3, 8.4, 9.4, and 10.3  all of which survive any termination.
ARTICLE 10     
REPRESENTATIONS, WARRANTIES AND COVENANTS
10.1    Authority.  Each Party covenants, represents, and warrants to the other Party as of the Effective Date that: (a) it has the full right and authority to enter into this Agreement and that it is not aware of any impediment that would inhibit its ability to perform its obligations hereunder and has taken all necessary action on its part to authorize the performance of the obligations; (b) the execution and delivery of this Agreement and the performance of the Party’s obligations hereunder (i) do not conflict with or violate any requirement of Applicable Laws and (ii) do not conflict with, or constitute a default or require any consent under, any contractual obligation of the Party; (c) it is duly organized, validly existing and in good standing under the laws of the state or country in which it is organized; and (d) this Agreement has been duly executed and delivered on behalf of the Party, and constitutes a legal, valid, binding obligation of the Party, enforceable against the Party in accordance with its terms. 
10.2    KindredBio Warranties.  KindredBio covenants, represents, and warrants that:
(a)    Non-Infringement. 
(i)    the Specifications are its or its Affiliate’s property and KindredBio may lawfully disclose the Specifications to Corden; 
(ii)    any KindredBio Intellectual Property provided by KindredBio for use by Corden in performing the Manufacturing Services according to the Specifications and the other terms of this Agreement (i) is owned or controlled by KindredBio or its Affiliate, (ii) may be lawfully used by Corden as directed by KindredBio, and (iii) when used by Corden according to the Specifications and the other terms of this Agreement does not infringe any Third Party Rights known to KindredBio; and
(iii)    as of the Effective Date, there are no actions or other legal proceedings to which KindredBio is a party or of which KindredBio is aware, concerning the infringement of Third Party Rights related to any of the Specifications, or the sale, use, or other disposition of the Product made in accordance with the Specifications; and
(b)    Quality and Compliance.  
(i)    the Specifications conform to cGMPs and Applicable Laws.

	
			
	 
	22
	 

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Exhibit 10.1

10.3    Corden Warranties.  Corden covenants, represents, and warrants that: 
(a)    (1) the Product delivered hereunder will: (i) conform to the applicable Specifications; (ii) be free and clear of any and all encumbrances, liens, or other third-party claims; (iii) have been manufactured, packaged, labelled and delivered in compliance with the QA Agreement, cGMPs and Applicable Laws and in accordance with Manufacturing Process; (iv) not be adulterated or misbranded within the meaning of the United States Food, Drug and Cosmetic Act, as amended, and any regulations promulgated thereunder or comparable provisions under the laws and regulations of any other applicable jurisdiction (collectively, the “Act”); and (v) not be articles that, under the provisions of the Act, may not be introduced into commerce; and (2) the Manufacturing Process and the Manufacturing Services will not infringe any Third Party Rights (collectively, the “Product Warranties”); 
(b)    it will perform the Manufacturing Services in accordance with the QA Agreement, Specifications, cGMPs, and Applicable Laws; 
(c)    KindredBio will be entitled to rely upon the Delivery Documentation, Batch documents and other information provided by Corden to base its decision for the release of the Product to the market.  
(d)    the Product will at all times be free and clear of any and all encumbrances, liens, or other third party claims; 
(e)    any Corden Intellectual Property used by Corden to perform the Manufacturing Services (i) is Corden’s or its Affiliate’s unencumbered property, (ii) may be lawfully used by Corden, and (iii) does not infringe and will not infringe any Third Party Rights. 
(f)    Corden will not pledge or otherwise transfer, without KindredBio’s prior written consent or any work-in-process or finished goods inventory of Products, other than to KindredBio or KindredBio’s designee as expressly provided in this Agreement;
(g)    Corden will maintain reasonable security policies at the Facility to protect the integrity of the Products and all other KindredBio assets, tangible and intangible, at the Facility; and
(h)    during the Term, Corden will maintain a temperature-controlled, humidity-controlled manufacturing suite at the Facility for manufacture of the Product in accordance with the applicable Specifications, master batch records and procedures for the Product, and will maintain the Facility, all personal property, equipment, machinery, systems, intangibles, Intellectual Property and contract rights in use at the Facility during the Term in the ordinary course of business, and free of material defects, except for defects attributable to wear and tear consistent with the age and usage of these assets, and except for defects that do not and will not, in the aggregate, materially impair the ability to use the assets to manufacture, process, store, dispose or otherwise handle any API or Products.

	
			
	 
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Exhibit 10.1

10.4    Debarred Persons.  Corden covenants that it will not in the performance of its obligations under this Agreement use the services of any person debarred or suspended under 21 U.S.C. §335(a) or (b) or comparable provisions under the laws and regulations of any other applicable jurisdiction. Corden represents that it does not currently have, and covenants that it will not hire, as an officer or an employee any person who has been convicted of a felony under the laws of the United States or Canada for conduct relating to the regulation of any drug product under the Act. If Corden or any officer, employee or agent of Corden: (a) becomes debarred; or (b) receives notice of action or threat of action with respect to its debarment, during the term of this Agreement, Corden agrees to notify KindredBio immediately. If Corden or any of its officers, employees or agents becomes debarred as set forth in clause (a) above or receives notice of action or threat of action as set forth in clause (b) above, KindredBio will have the right to terminate this Agreement upon written notice to Corden. 
10.5    Permits.  KindredBio will be solely responsible for obtaining or maintaining, on a timely basis, any permits or other regulatory approvals for the Product or the Specifications, including, without limitation, all marketing and post-marketing approvals.  Corden, at its expense, will maintain at all relevant times all governmental permits, licenses, approval, and authorities required to enable it to lawfully and properly perform the Manufacturing Services in accordance with this Agreement.
10.6    No Warranty.  NEITHER PARTY MAKES ANY WARRANTY OR REPRESENTATION OF ANY KIND, EITHER EXPRESSED OR IMPLIED, BY FACT OR LAW, OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT. WITHOUT LIMITING THE FOREGOING, NEITHER PARTY MAKES ANY WARRANTY OR REPRESENTATION OF FITNESS FOR A PARTICULAR PURPOSE NOR ANY WARRANTY OR REPRESENTATION OF MERCHANTABILITY FOR THE PRODUCTS. 
ARTICLE 11     
REMEDIES AND INDEMNITIES
11.1    Consequential Damages.  Except for liability for breach by either Party of its obligations of Confidentiality under Article 12, under no circumstances whatsoever will either Party be liable to the other in contract, tort, negligence, breach of statutory duty, or otherwise for (i) any (direct or indirect) loss of profits, of production, of anticipated savings, of business, or goodwill or (ii) for any other liability, damage, costs, or expense of any kind incurred by the other Party of an indirect or consequential nature, regardless of any notice of the possibility of these damages. This Section 11.1, however, will not be deemed to limit either Party’s indemnification obligations under this Article 11 with respect to Third Party claims.
11.2    Corden Indemnity.  
(a)    Corden agrees to defend and indemnify KindredBio, its Affiliates and licensees, and their respective directors, officers, employees, and agents (“KindredBio Indemnitees”) against all losses, damages, costs, judgments, liability, fees and expenses (including reasonable attorneys’ fees) (collectively, “Losses”) incurred by any KindredBio Indemnitee due to any suit, claim, demand, judgment or action brought by any Third Parties (other than Affiliates) (each, a 

	
			
	 
	24
	 

-  .

Exhibit 10.1

“Claim”), including, without limitation any Claim of personal injury or property damage, to the extent that the injury or damage is the result of (a) a failure by Corden or any of its Affiliates to perform the Manufacturing Services in accordance with the Specifications, cGMPs, and Applicable Laws, (b) Corden’s breach of any of its obligations, representations or warranties under this Agreement, or (c) the negligence or willful misconduct of any Corden Indemnitee except to the extent that the losses, damages, costs, claims, demands, judgments, and liability are due to the negligence or willful misconduct of any KindredBio Indemnitee. 
(b)    If a Claim occurs, KindredBio will: (a) promptly notify Corden of the Claim; (b) use commercially reasonable efforts to mitigate the effects of the Claim; (c) reasonably cooperate with Corden in the defense of the claim; and (d) permit Corden to control the defense and settlement of the claim, all at Corden’s cost and expense. Notwithstanding the foregoing, Corden will not compromise or settle any Claim for which a KindredBio Indemnitee is requesting indemnification for any damages other than monetary damages without KindredBio’s prior written consent, which will not be unreasonably withheld. 
11.3    KindredBio Indemnity.  
(a)    KindredBio agrees to defend and indemnify Corden and its Affiliates and their respective directors, officers, employees, and agents (“Corden Indemnitees”) against all Losses, incurred by any Corden Indemnitee due to any Claim of infringement or alleged infringement of any Third Party Rights in the Product, or any Claim of personal injury or property damage, in each case, to the extent that the Losses are the result of a breach of this Agreement by KindredBio, including, without limitation, any representation or warranty contained herein, or the negligence or willful misconduct of any KindredBio Indemnitee, except to the extent that the Losses are due to the negligence or willful misconduct of any Corden Indemnitee. 
(b)    If a Claim occurs, Corden will: (a) promptly notify KindredBio of the Claim; (b) use commercially reasonable efforts to mitigate the effects of the Claim; (c) reasonably cooperate with KindredBio in the defense of the Claim; and (d) permit KindredBio to control the defense and settlement of the Claim, all at KindredBio’s cost and expense. Notwithstanding the foregoing, KindredBio will not compromise or settle any Claim for which a Corden Indemnitee is requesting indemnification for any damages other than monetary damages without Corden’s prior written consent, which will not be unreasonably withheld. 
ARTICLE 12     
CONFIDENTIALITY
12.1    Confidential Information.  “Confidential Information” means any information disclosed by the Disclosing Party to the Recipient (whether disclosed in oral, written, electronic or visual form) that is non-public, confidential or proprietary including, without limitation, information relating to the Disclosing Party’s patent and trademark applications, process designs, process models, drawings, plans, designs, data, databases and extracts therefrom, formulae, methods, know-how and other intellectual property, its clients or client confidential information, finances, marketing, products and processes and all price quotations, manufacturing or professional services proposals, information relating to composition, proprietary technology, and all other 

	
			
	 
	25
	 

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Exhibit 10.1

information relating to manufacturing capabilities and operations. In addition, all analyses, compilations, studies, reports or other documents prepared by any Party’s Representatives containing the Confidential Information will be considered Confidential Information. Samples or materials provided hereunder as well as any and all information derived from the approved analysis of the samples or materials will also constitute Confidential Information. For the purposes of this Article 12, a Party or its Representative receiving Confidential Information under this Agreement is a “Recipient,” and a Party or its Representative disclosing Confidential Information under this Agreement is the “Disclosing Party.” 
12.2    Use of Confidential Information.  The Recipient will use the Confidential Information solely for the purpose of meeting its obligations under this Agreement. The Recipient will keep the Confidential Information strictly confidential and will not disclose the Confidential Information in any manner whatsoever, in whole or in part, other than to those of its Representatives who (i) have a need to know the Confidential Information for the purpose of this Agreement; (ii) have been advised of the confidential nature of the Confidential Information and (iii) have obligations of confidentiality and non-use to the Recipient no less restrictive than those of this Agreement. Additionally, KindredBio will have the right to disclose Confidential Information to sublicensees or other strategic partners or in connection with financings or similar transactions provided that the parties to whom KindredBio discloses this information are bound by obligations of confidentiality and non-use no less restrictive than those of this Agreement. Recipient will protect the Confidential Information disclosed to it by using all reasonable precautions to prevent the unauthorized disclosure, dissemination or use of the Confidential Information, which precautions will in no event be less than those exercised by Recipient with respect to its own confidential or proprietary Confidential Information of a similar nature. The obligations of confidentiality and non-use set forth in this Article 12 will remain in effect for a period of seven years following the termination of this Agreement. 
12.3    Exclusions.  The obligations of confidentiality will not apply to the extent that the information: 
(a)    is or becomes publicly known through no breach of this Agreement or fault of the Recipient or its Representatives; 
(b)    is in the Recipient’s possession at the time of disclosure by the Disclosing Party other than as a result of the Recipient’s breach of any legal obligation; 
(c)    is or becomes known to the Recipient on a non-confidential basis through disclosure by sources, other than the Disclosing Party, having the legal right to disclose the Confidential Information, provided that the other source is not known by the Recipient to be bound by any obligations (contractual, legal, fiduciary, or otherwise) of confidentiality to the Disclosing Party with respect to the Confidential Information; 
(d)    is independently developed by the Recipient without use of or reference to the Disclosing Party’s Confidential Information as evidenced by Recipient’s written records; or 

	
			
	 
	26
	 

-  .

Exhibit 10.1

(e)    is expressly authorized for release by the written authorization of the Disclosing Party. 
Any combination of information which comprises part of the Confidential Information are not exempt from the obligations of confidentiality merely because individual parts of that Confidential Information were publicly known, in the Recipient’s possession, or received by the Recipient, unless the combination itself was publicly known, in the Recipient’s possession, or received by the Recipient. 
12.4    Photographs and Recordings.  Neither Party will take any photographs or videos of the other Party’s facilities, equipment or processes, nor use any other audio or visual recording equipment (such as camera phones) while at the other Party’s facilities, without that Party’s express written consent. 
12.5    Permitted Disclosure.  Notwithstanding any other provision of this Agreement, the Recipient may disclose Confidential Information of the Disclosing Party to the extent required, as advised by counsel, in response to a valid order of a court or other governmental body or as required by law, regulation or stock exchange rule. But the Recipient will advise the Disclosing Party in advance of the disclosure to the extent practicable and permissible by the order, law, regulation or stock exchange rule and any other applicable law, will reasonably cooperate with the Disclosing Party, if required, in seeking an appropriate protective order or other remedy, and will otherwise continue to abide by its obligations of confidentiality set out herein.  If any public disclosure is required by law, the Parties will consult concerning the form of announcement prior to the public disclosure being made. 
12.6    Return of Confidential Information.  Upon the written request of the Disclosing Party, the Recipient will promptly return the Confidential Information to the Disclosing Party or, if the Disclosing Party directs, destroy all Confidential Information disclosed in or reduced to tangible form including any copies thereof and any summaries, compilations, analyses or other notes derived from the Confidential Information except for one copy which may be maintained by the Recipient for its records. The retained copy will remain subject to all confidentiality provisions contained in this Agreement. 
12.7    Remedies.  The Parties acknowledge that monetary damages may not be sufficient to remedy a breach by either Party of this Agreement and agree that the non-breaching Party will be entitled to seek specific performance, injunctive or other equitable relief to prevent breaches of this Agreement and to specifically enforce the provisions hereof in addition to any other remedies available at law or in equity. These remedies will not be the exclusive remedies for breach of this Agreement but will be in addition to any and all other remedies available at law or in equity. 
ARTICLE 13     
DISPUTE RESOLUTION
13.1    Dispute Resolution.  

	
			
	 
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Exhibit 10.1

(a)    The Parties will attempt to settle any claim or controversy arising out of this Agreement or the subject matter hereof through consultation and negotiation in good faith in a spirit of mutual cooperation.  Such matters will be initially addressed by the project managers, who shall use reasonable efforts to attempt to resolve the dispute through good faith negotiations by telephone or in person as may be agreed. If they fail to resolve the dispute within thirty (30) days after either Party notifies the other of the dispute, then the matter will be escalated to the respective Chief Executive Officers of the Parties, or their designees.  The respective Chief Executive Officers or their designees will use reasonable efforts to attempt to resolve the dispute through good faith negotiations by telephone or in person as may be agreed. If they fail to resolve the dispute within thirty (30) days after it is referred to them and do not mutually agree to extend the time for negotiation, then the dispute will be submitted to arbitration in accordance with the procedure set forth in Section 13.1(b).
(b)    Except with respect to actions by either Party seeking equitable or declaratory relief, any claim or controversy arising in whole or in part under or in connection with this Agreement or the subject matter hereof that is not resolved pursuant to Section 13.1(a) will be referred to and finally resolved by arbitration in accordance with the Rules of the International Chamber of Commerce (the “Rules”) as such Rules may be modified by this Agreement, by one arbitrator, who will be agreed upon by the Parties. If the Parties are unable to agree upon a single arbitrator within thirty (30) days following the date arbitration is demanded, three (3) arbitrators will be used, one selected by each Party within ten (10) days after the conclusion of the 30-day period and a third selected by the first two within ten (10) days thereafter. The arbitrator(s) will resolve any discovery disputes. Either Party may commence arbitration proceedings by notice to the other Party. Unless otherwise agreed by the Parties, all such arbitration proceedings will be held in New York, New York, provided that proceedings may be conducted by telephone conference call with the consent of the Parties and the arbitrator(s). The arbitrator(s) will apply the laws of California, without regard to conflict of law principles.  The arbitrator(s) will only have the authority to award actual money damages (with interest on unpaid amounts from the date due) and, except with respect to claims for indemnification under Article 11 with respect to third party claims or a breach or non-performance of any provision of this Agreement relating to Confidential Information, the arbitrator(s) will not have the authority to award indirect, incidental, consequential, exemplary, special or punitive damages, and the Parties expressly waive any claimed right to such damages. The arbitrator(s) also shall be authorized to grant any temporary, preliminary or permanent equitable remedy or relief the arbitrators deem just and equitable and within the scope of this Agreement, including an injunction or order for specific performance. The award of the arbitrator(s) shall be the sole and exclusive remedy of the Parties. Judgment on the award rendered by the arbitrator(s) may be enforced in any court having competent jurisdiction thereof, subject only to revocation on grounds of fraud or clear bias on the part of the arbitrator(s). The arbitration will be of each Party's individual claims only, and no claim of any other Party will be subject to arbitration in such proceeding. The Parties will share the costs and expenses of the arbitration, but not the costs and expenses of the Parties, equally. If a Party fails to proceed with arbitration, unsuccessfully challenges the arbitration award, or fails to comply with the arbitration award, the other Party is entitled to costs, including reasonable attorneys' fees, for having to compel arbitration or defend or enforce the award. Except as otherwise required by law, the Parties and the arbitrator(s) will maintain as confidential all 

	
			
	 
	28
	 

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Exhibit 10.1

information or documents obtained during the arbitration process, including the resolution of the dispute. Judgment on the award granted in any arbitration hereunder may be entered in any court having jurisdiction over the award or any of the Parties or any of their respective assets. The Parties knowingly and voluntarily waive their rights to have their dispute tried and adjudicated by a judge and jury except as expressly provided herein.
(c)    Nothing in this Section 13.1 will prevent a Party from resorting to judicial proceedings if: (i) interim relief from a court is necessary to prevent serious and irreparable injury to such Party; or (ii) litigation is required to be filed prior to the running of the applicable statute of limitations. The use of any alternative dispute resolution procedure will not be construed under the doctrine of latches, waiver or estoppel to affect adversely the rights of either Party.
ARTICLE 14     
INTELLECTUAL PROPERTY
14.1    Intellectual Property.  All KindredBio Intellectual Property will be owned by KindredBio and all Corden Intellectual Property will be owned by Corden. Neither Party has, nor will it acquire, any interest in any of the other Party’s Intellectual Property unless otherwise expressly agreed to in writing or expressly set forth in this Agreement. Neither Party will use any Intellectual Property of the other Party, except as specifically authorized by the other Party or as required for the performance of its obligations under this Agreement. 
14.2    Inventions.  
(a)    During the Term, KindredBio hereby grants to Corden a non-exclusive, paid-up, royalty-free, non-transferable license under KindredBio’s Intellectual Property solely to the extent necessary for Corden to perform the Manufacturing Services in accordance with this Agreement, and not for any other purpose. 
(b)    All Inventions generated or derived by Corden while performing the Manufacturing Services, to the extent relating specifically to the development, manufacture, use or sale of the Product that is the subject of the Manufacturing Services, and all KindredBio Intellectual Property, will be the exclusive property of KindredBio. Corden hereby assigns, and agrees to assign, all of its right, title and interest in and to all such Inventions and KindredBio Intellectual Property to KindredBio and agrees to take all further acts reasonably required to evidence and perfect such assignment to KindredBio, at KindredBio’s expense. Corden will notify KindredBio in writing, as promptly as practicable, of all Inventions and KindredBio Intellectual Property made, created, discovered, generated or derived by Corden in the course of performing the Manufacturing Services. Corden may retain one copy of records relating to KindredBio Intellectual Property to the extent required under Applicable Laws. 
(c)    All Corden Intellectual Property will be the exclusive property of Corden. Corden hereby grants to KindredBio a perpetual, irrevocable, non-exclusive, paid-up, royalty-free, transferable license, with the right to sublicense through multiple tiers, to use the Corden 

	
			
	 
	29
	 

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Exhibit 10.1

Intellectual Property used by Corden to perform the Manufacturing Services to enable KindredBio to sell, develop, manufacture or have manufactured the Product. 
(d)    Each Party will be solely responsible for the costs of filing, prosecution, and maintenance of patents and patent applications on its own Inventions. 
(e)    KindredBio will have the right at any time to transfer the Manufacturing Process to itself or any Third Party.  Corden shall provide reasonably necessary documents to complete such Technology Transfer, and KindredBio shall reimburse Corden for it reasonable costs and expenses incurred in completing such Technology Transfer.  In the event and to the extent that any Corden Confidential Information or Corden Intellectual Property is incorporated into the Product or the Manufacturing Process and to the extent that any such Corden Confidential Information or Corden Intellectual Property is necessary to make or have made the Product in accordance with the Manufacturing Process then it shall automatically and without further action by either Party become subject to paragraph (c) of this Section 14.1 on a fully-paid up and royalty-free basis.
14.3    Trademark Rights.  Corden acknowledges and recognizes the great value of the publicity and goodwill associated with the KindredBio trademarks as well as other trade names owned by KindredBio that KindredBio may use in connection with the Product from time to time (collectively, the “Marks”), and acknowledges that all this goodwill belongs exclusively to KindredBio.  Corden will cooperate reasonably and in good faith with KindredBio for the purpose of securing and preserving KindredBio’s rights in and to the Marks. Except as otherwise expressly provided in this Agreement, nothing in this Agreement will be construed as an assignment or grant to Corden of any right, title or interest in or to the Marks. Corden will not register or attempt to register any of the Marks, alone or in combination with other elements, as a trademark, service mark, corporate name, trade name or other designation of origin. KindredBio’s failure to register or election not to register any of the Marks will not be deemed an abandonment or waiver of these rights.
ARTICLE 15     
MISCELLANEOUS
15.1    Insurance.  Each Party will maintain commercial general liability insurance, including blanket contractual liability insurance covering the obligations of that Party under this Agreement through the term of this Agreement and for a period of three (3) years thereafter.  This insurance will have policy limits of not less than [* * *] in the aggregate per annum for product and completed operations liability.  Such coverage can be in a comprehensive general liability policy that also covers product liability or through separate policies. The required limits can be satisfied by an excess policy if needed. All such insurance shall be effective as of the Effective Date of this Agreement. Each Party shall provide the respective other Party with a certificate of such insurance upon request.
15.2    Independent Contractors.  The Parties are independent contractors and this Agreement and any the Product Agreement will not be construed to create between Corden and KindredBio any other relationship such as, by way of example only, that of employer-employee, principal 

	
			
	 
	30
	 

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Exhibit 10.1

agent, joint-venturer, co-partners, or any similar relationship, the existence of which is expressly denied by the Parties. 
15.3    No Waiver.  Either Party’s failure to require the other Party to comply with any provision of this Agreement will not be deemed a waiver of the provision or any other provision of this Agreement. 
15.4    Assignment.  
(a)    Corden may not assign this Agreement or any of its associated rights or obligations, or subcontract any of its rights or obligations, hereunder without the written consent of KindredBio.  
(b)    KindredBio may assign this Agreement or any of its associated rights or obligations without approval from Corden. KindredBio will give Corden prior written notice of any assignment, any assignee will covenant in writing with Corden to be bound by the terms of this Agreement and KindredBio will remain liable hereunder. 
(c)    Notwithstanding the foregoing provisions of this Section 15.4, either Party may assign this Agreement to any of its Affiliates or to a successor to or purchaser of all or substantially all of its business to which this Agreement relates, but as a condition to such assignment the assignee must execute and deliver a written agreement to the non-assigning Party whereby the assignee agrees to be bound hereunder. 
15.5    Force Majeure.  Neither Party will be liable for the failure to perform its obligations under this Agreement if the failure is caused by an event beyond that Party’s reasonable control, including, but not limited to, strikes or other labor disturbances, lockouts, riots, quarantines, communicable disease outbreaks, wars, acts of terrorism, fires, floods, storms, interruption of or delay in transportation, lack of or inability to obtain fuel, power or compliance with any order or regulation of any government entity acting within colour of right (a “Force Majeure Event”). A Party claiming a right to excused performance under this Section 15.5 will immediately notify the other Party in writing of the extent of its inability to perform, which notice will specify the event beyond its reasonable control that prevents the performance. Neither Party will be entitled to rely on a Force Majeure Event to relieve it from an obligation to pay money (including any interest for delayed payment) which would otherwise be due and payable under this Agreement.  If the performance of any obligation under this Agreement is delayed due to a Force Majeure Event for a continuous period of more than sixty (60) days, the other Party may terminate this Agreement without penalty upon written notice to the other Party under such event.  The Annual Minimum and Annual Minimum Volume will be suspended for the period of a Force Majeure Event but will be re-instated if the Force Majeure Event is cured. If this Agreement is terminated due to a Force Majeure Event lasting longer than sixty (60) days as set forth above, KindredBio may request Corden to reasonably assist in a Technology Transfer to a third-party supplier designated by KindredBio.  If so requested, Corden will promptly initiate and complete the Technology Transfer at Corden’s cost. 

	
			
	 
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Exhibit 10.1

15.6    Notices.  Unless otherwise agreed in the Product Agreement, any notice, approval, instruction or other written communication required or permitted hereunder will be sufficient if made or given to the other Party by personal delivery, by telecopy, facsimile communication, or confirmed receipt email or by sending the same by first class mail, postage prepaid to the respective addresses, telecopy or facsimile numbers or electronic mail addresses set forth below: 
If to KindredBio:
1555 Bayshore Highway
Suite 200
Burlingame, California 94010, U.S.A.
Attention: Denise Bevers, Chief Operating Officer
Facsimile No.: 1-888-567-0837
E-mail address: denise.bevers@kindredbio.com 

With a copy to:
Attention: KindredBio Legal Department
E-mail address: documents@kindredbio.com; donald.campodonico@kindredbio.com

If to Corden:
Corden Pharma S.p.A 
Viale dell’Industria 3
20867 Caponago (MB), Italy
Attention:                           , Managing Director
	
		
	Facsimile No.: +39 029545 2300
E-mail address: 

With copy to
Attention : Fabio Stevanon, SupplyChain & Business Development Director
Facsimile: +39 0295452300
E-mail address: Fabio.stevanon@cordenpharma.com

	 

or to any other addresses, telecopy or facsimile numbers or electronic mail addresses given to the other Party in accordance with the terms of this Section 15.6.  Notices or written communications made or given by personal delivery, telecopy, facsimile, or electronic mail will be deemed to have been sufficiently made or given when sent (receipt acknowledged), or if mailed, five (5) days after being deposited in the United States, Canada, or European Union mail, postage prepaid or upon receipt, whichever is sooner, or one Business Day after being sent by overnight courier. 
15.7    Severability.  If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, that determination will not impair or affect the validity, legality, or enforceability of the remaining provisions, because each provision is separate, severable, and distinct. 

	
			
	 
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Exhibit 10.1

15.8    Entire Agreement.  This Agreement, and all Exhibits hereto, together with the QA Agreement, constitutes the full, complete, final and integrated agreement between the Parties relating to the subject matter hereof and supersedes all previous written or oral negotiations, commitments, agreements, transactions, or understandings concerning the subject matter hereof. Any modification, amendment, or supplement to this Agreement must be in writing and signed by authorized representatives of the Parties.  
15.9    Other Terms.  No terms, provisions or conditions of any purchase order or other business form or written authorization used by KindredBio or Corden will have any effect on the rights, duties, or obligations of the Parties under or otherwise modify this Agreement, regardless of any failure of KindredBio or Corden to object to the terms, provisions, or conditions unless the document specifically refers to this Agreement and is signed by the Parties. 
15.10    No Third Party Benefit or Right.  For greater clarity, except as provided in Article 10, nothing in this Agreement will confer or be construed as conferring on any third party any benefit or the right to enforce any express or implied term of this Agreement. 
15.11    Execution in Counterparts.  This Agreement may be executed in counterparts, by original, electronic or facsimile signature (including a PDF copy by email), each of which will be deemed an original, but all of which together will constitute one and the same instrument. 
15.12    Use of KindredBio Name.  Corden will not make any use of KindredBio’s name, trademarks or logo or any variations thereof, alone or with any other word or words, without the prior written consent of KindredBio, which consent will not be unreasonably withheld.  Despite this, KindredBio agrees that Corden may include KindredBio’s name and logo in customer lists or related marketing and promotional material for the purpose of identifying users of Corden’s Manufacturing Services.
15.13    Governing Law.  This Agreement will be construed and enforced in accordance with the laws of California, without regard to conflict of law principles.  The Parties hereby submit to the personal jurisdiction of the U.S. Federal Courts in California.  The UN Convention on Contracts for the International Sale of Goods will not apply to this Agreement or the QA Agreement.
[Signature Page Follows]

	
			
	 
	33
	 

-  .

Exhibit 10.1

IN WITNESS WHEREOF, the duly authorized representatives of the Parties have executed this Agreement as of the date first written above. 
	
		
	 
	Kindred Biosciences, Inc.

	 
	 

	 
	By:   /s/ Denise Bevers

	 
	

Name:   Denise Bevers

	

ATTEST:
	Title:   Chief Operating Officer

	/s/ Donald Campodonico

	 

	Name:   Donald Campodonico
	 

	Title:   Staff Attorney
	

Corden Pharma S.p.A

	 
	 

	 
	By:   /s/ Brian McGlynn

	 
	Name:   Brian McGlynn

	

ATTEST:
	Title:   Managing Director

	/s/ Fabio Stevanon
	 

	Name:   Fabio Stevanon
	 

	Title:   Business Development & Supply Chain Director
	 

	
			
	 
	34
	 

-  .

Exhibit 10.1

ATTACHMENT A
PRODUCT Pricing / Batch size options

	
				
	Product
	Price*
	Batch size (L)
	MOQ

	 
	 
	 
	 

	Zimeta Sterile Injection,[* * *]
	[* * *]€ 
	[* * *]
	[* * *]

	Zimeta Sterile Injection, [* * *]
	[* * *]€
	[* * *]
	[* * *]

	Zimeta Sterile Injection, [* * *]
	[* * *]€
	[* * *]
	[* * *]

[* * *]

	
			
	 
	35
	 

-  .Exhibit

Exhibit 10.2

PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (“Agreement”) is made and entered into by and between Strategic Veterinary Pharmaceuticals, Inc., a Kansas corporation ("Seller") and Kindred Biosciences, Inc., a Delaware corporation (“Buyer”), as of the latest date of execution set forth on the signature page below (the “Effective Date”).
Article I 
PROPERTY
Seller hereby agrees to sell and convey to Buyer, and Buyer hereby agrees to purchase from Seller, subject to the terms and conditions set forth herein, the following:
1.01    Land.  That certain parcel of improved real property commonly known as 1411 Oak St., Elwood, Kansas, consisting of approximately 8 acres of land, and more particularly described on Exhibit A hereto (the “Land”).
1.02    Appurtenances.  All rights, privileges and easements appurtenant of Seller to and for the benefit of the Land, including, without limitation, all minerals, oil, gas and other hydrocarbon substances on and/or under the Land as well as all development rights, air rights, water, water rights and water stock relating to the Land and any other easements, rights‐of‐way or appurtenances relating to or used in connection with the ownership of the Land (collectively, the “Appurtenances”);
1.03    Improvements.  All of Seller’s right, title and interest in and to all buildings, structures, and physical improvements located, constructed, or installed on the Land, and all improvements, fixtures, and equipment affixed to such buildings, structures, and improvements (collectively, the “Improvements”).
1.04    Personal Property.  All personal property owned by Seller located on or in or used in connection with the Land, Improvements and Appurtenances listed on Exhibit C attached hereto, which includes the pelletizing line, the full USP purified water system, the full USP WFI water system with hot loop, a complete clean room (class 100 fill suite, no filling equipment), full plant support HVAC chilling and heating, oil free air, two complete compounding areas for liquids and creams, and complete BFS Sterile fill line with terminal water cascade autoclave from the BFS sterile fill line, and other furniture, fixtures, and equipment listed on Exhibit C hereto (collectively, the “Personal Property”), but excluding the BFS sterile fill line.
1.05    Intangible Property.  Any intangible personal property now or hereafter owned by Seller and used in the ownership, use or operation of the Land, Appurtenances, Improvements and Personal Property, including but not limited to, contract and lease rights, and including, to the extent available to Seller, the quality system documents, including validation (IQ, OQ, PQ) documents, SOPs, and other documents related to the installation, qualification, maintenance, and operation of the facility and equipment, and Seller’s list of employees and their contact 

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Exhibit 10.2

information, to the extent in Seller’s possession or control (collectively, the “Intangible Property”).
The items described in Sections 1.01, 1.02, 1.03, 1.04 and 1.05 above are hereinafter referred to collectively as the “Property”.
ARTICLE II     
PURCHASE PRICE; TERMS OF PAYMENT
2.01    Purchase Price.  The purchase price for the Property (the “Purchase Price”) shall be the sum of Three Million, Seven Hundred Fifty Thousand Dollars ($3,750,000).  The Purchase Price shall be payable by Buyer to Seller as follows:
(a)    Within five (5) business days after the Effective Date, Buyer shall deliver to the Escrow Holder (as defined below) the sum of Two Hundred Fifty Thousand Dollars ($250,000) in the form of immediately available funds (the “Deposit”).  The Deposit shall be invested in an account of Buyer’s or Escrow Holder’s choice.  If Buyer has not terminated this Agreement by the last day of the Contingency Removal Date (as defined below), the Deposit will become non-refundable on the first business day following the Contingency Removal Date, subject only to the provisions of Section 6.01.  Upon the close of Escrow, Buyer will receive a credit against the Purchase Price equal to the Deposit and any interest accrued thereon.  
(b)    The failure of Buyer to notify Seller and Escrow Holder that it waives or removes all of Buyer’s contingencies in writing by the Contingency Removal Date will automatically terminate this Agreement, and the Deposit and all accrued interest will be immediately released from Escrow to Buyer.  
(c)    If Buyer has delivered notice of its intent to proceed to the close of Escrow on or before the Contingency Removal Date, and Buyer thereafter defaults by failing to proceed to closing, and Seller is in compliance with the terms of this Agreement, the Deposit shall be subject to the Liquidated Damages provision (Section 7.01) of this Agreement.
(d)    The balance of the Purchase Price shall be paid by Buyer to Seller by wire transfer on the Closing Date (as defined below).  There is no financing contingency.
ARTICLE III     
DUE DILIGENCE ITEMS AND INSPECTIONS
3.01    Due Diligence Items.  Seller shall deliver to Buyer all pertinent information and documents relating to the Property in Seller’s possession or control, including, but not limited to, the following items, all in complete and unredacted form, within three (3) business days after the Effective Date, each to the extent available: 
(a)    Copies of all contracts entered into by Seller, including but not limited to, unrecorded easements and CC&Rs, leases, service contracts, rent roll, operating statements, management agreements, and tax statements, if available.

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Exhibit 10.2

(b)    For all Improvements on the Land, final City or County approved and “as-built” plans and specifications, including soils reports and structural, mechanical, and electrical calculations, blueprints of the buildings, including location of HVAC, electrical, etc., if available.
(c)    Copies of all reports and studies relating to environmental, soils, geological, civil, storm drainage and ground water conditions or the presence or use of any toxic or Hazardous Materials, as defined below, on the Property, including waste management inspections and reports by governmental officials or third parties, if available.
(d)    Copies of all Use Permits, Building Permits, Certificates of Occupancy and other similar kinds of governmental approvals, plans, licenses, or permits, to the extent available, a list of which is attached hereto as Exhibit B.
(e)    Copies of all warranties, if available.
(f)    Copies of ALTA surveys or similar land survey document, if available.
(g)    Copies of fire department inspection reports, to the extent available.
(h)    A schedule listing all Personal Property to be included in the transaction, which is attached hereto as Exhibit C.
(i)    Base building and “as built” construction documents of the Improvements, including any site plans, schematic design documents, design documents, elevations, concept studies and master plans, if available. 
(j)    All quality system documentation for the Improvements and the Personal Property.  For each piece of equipment, provide the IQ/OQ/PQ protocol and report, performance deviations reports and CAPAs and PM and calibration records and other material reports and information, if available.
(k)    A list of former employees of Seller who have experience in operating the plant, including their contact information, which is attached hereto as Exhibit H.
(l)    Information on any litigation involving the Property (or the Seller, if related to the Property or equipment).
(m)    Most recent engineering reports on the physical condition of the Property and its plumbing, mechanical, electrical and heating, ventilation and air-conditioning systems, including a schedule of projected capital improvements or replacements and deferred maintenance on the Improvements and equipment, and known defects in the Improvements and equipment, if available.
(n)    Copies of all reports (if any) required under federal or state law of hazardous waste activities including the generation, transport, plans, treatment, storage or disposal of hazardous waste. 

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Exhibit 10.2

(o)    Copies of any inspection reports by any federal, state or local environmental or health and safety agency, including, without limitation, FDA, MHRA and other regulatory inspections, if available. 
(p)    A copy of any O&M (Operations and Maintenance Plan) prepared for dealing with asbestos in the buildings, if available.
For purposes of this Agreement, the “Data Room” means the electronic documentation site used by Seller to provide information concerning the Property to Buyer and its employees, consultants, and representatives. Buyer and its employees, consultants, and representatives shall have full access to the Data Room and shall receive daily written notification each time any document is modified or an additional document is added to the Data Room.  Seller shall provide all due diligence items and requests in electronic copy via the Data Room and provide Buyer in writing an index of documents contained in the Data Room.  Notwithstanding the foregoing, for those items that cannot by commercially reasonable means be scanned and uploaded electronically, Seller shall notify Buyer in writing for each such respective item and provide a detailed description and location of such items with sufficient specificity that would allow Buyer to immediately locate the item on site without additional sorting of material or records.

3.02    Inspections.  Buyer shall have until 5:00 p.m. West Coast Time on the thirtieth (30th) day following the Effective Date, provided that if such date falls on a weekend or State or Federal holiday, the first business day thereafter (the “Contingency Removal Date”) to have the Property inspected or tested by such qualified individuals, consultants, agents, or engineers (collectively with Buyer and Buyer's employees, the “Buyer Parties”) as Buyer shall elect in Buyer’s absolute and sole discretion, at Buyer’s sole cost and expense.  Buyer shall have the right to provide the Buyer Parties with all materials and information needed to allow them to provide their due diligence services as efficiently as possible.
Seller, with not less than 48 hours prior notice, which may be given by email, will provide Buyer and its consultants access to the Property during regular business hours through the Contingency Removal Date so that Buyer and its consultants may conduct any investigations and testing of the physical and environmental condition of the Land and Improvements as Buyer deems reasonably necessary.  Buyer has the right to conduct reasonably necessary asbestos, soil, groundwater, geotechnical, and other invasive testing, and will indemnify Seller against any damage to the Property and agrees to dispose of any Hazardous Materials obtained during its physical inspection and testing of the Property.  Seller (and its agents or consultants) shall have the right to accompany the Buyer Parties during any testing or inspection of the Property.
All due diligence shall be undertaken in accordance with good and proper techniques, using personnel and equipment qualified to perform the work being undertaken, and shall be undertaken in compliance with all applicable statutes, codes, ordinances and regulations.  All required permits will be properly obtained.  All holes, borings, trenches, or other invasive work performed at the Property by the Buyer Parties will be properly filled in or returned to the condition existing prior to entry by the Buyer Parties, and any unsafe conditions at the Property 

4

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Exhibit 10.2

caused by the Buyer Parties shall be repaired and that portion of the Property shall be returned to substantially the condition existing prior to entry by the Buyer Parties.
With respect to invasive testing, Seller shall have the right to reasonably disapprove any testing plan within two business days of receipt of Buyer's notice of intent to undertake invasive testing.
Buyer shall promptly pay for all tests, inspections, analyses, reports, and other work done or material furnished by or on behalf of Buyer in or about the Property and will not permit or suffer any lien to attach to the Property and shall have no authority or power, express or implied, to create or cause any lien, charge or encumbrance of any kind against the Property.
3.03    Disposal of Hazardous Materials.  Buyer agrees that any and all Hazardous Materials samples or borings derived from the Property by or on behalf of Buyer in connection with the performance of such tests and studies and any Hazardous Materials that have become exacerbated in connection with the performance of tests or studies by or on behalf of Buyer shall be disposed of by Buyer’s consultants, at Buyer’s sole cost and expense.  Except as provided to the contrary above, Buyer shall have no responsibility for the removal, transport or disposal of any Hazardous Materials on the Property.
3.04    Agency Inquiry.  Seller hereby grants permission to Buyer to make inquiries of governmental agencies relating to the condition of the Property, land use approvals and entitlements and the existence of any Hazardous Materials on the Property without liability to Seller for any enforcement or other action resulting from such inquiry, provided that unless and until Buyer acquires title to the Property, Seller shall be responsible for any reporting requirements set forth in any federal, state or local law relating to any Hazardous Materials discovered by Buyer’s consultant.
3.05    Title Review.  Buyer shall obtain a preliminary title report with underlying documents with respect to Seller’s interest in the Land (the “Preliminary Report”), prepared and issued by First American Title Company, located at 3723 Beck Rd., St. Joseph, MO 64506 (the “Title Company” or “Escrow Holder”), attention to Patti Eiman, Area Manager (816-901-1513; peiman@firstam.com).
Buyer shall notify Seller in writing not more than twenty (20) days following the receipt of the Preliminary Report of any defects, exceptions, liens, encroachments or encumbrances shown in the Preliminary Report or in a survey of which Buyer disapproves.  Whether or not Buyer objects to the same, Seller agrees to remove from the title record all mechanics liens and financing liens and all other monetary liens (other than taxes not yet due and payable) at or before the Closing.  If Buyer disapproves of any exceptions or defects shown on the Preliminary Report or a survey, Seller shall have five (5) days after receipt of Buyer’s objections to give Buyer notice either that Seller will use its best efforts to remove any objectionable exceptions from title or that Seller elects not to cause such exceptions to be removed.  If Seller fails to give timely notice, Seller shall be deemed to have elected not to cause the exceptions to be removed.  If Seller gives Buyer notice that it will attempt to cure but is unable to do so by the Closing Date, 

5

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Exhibit 10.2

then Buyer shall have the right to either terminate this Agreement and obtain a full refund of the Deposit or to proceed to Closing.
The term “Permitted Exceptions” to the Land shall include (a) all non-monetary liens and encumbrances that Buyer does not disapprove in accordance with Section 3.05; and (b) all liens or encumbrances which Buyer causes or authorizes against the Land.
3.06    Survey.  In addition to any survey that Seller may deliver to Buyer, Buyer may obtain, at Buyer’s sole cost and expense, an ALTA survey of the Land, prepared by a licensed surveyor or civil engineer of Buyer’s choice (the “Survey”).
3.07    Termination.  Buyer shall have the right, exercisable in its sole and absolute discretion on or before the Contingency Removal Date, for any reason or no reason, to terminate this Agreement and not to proceed to the close of Escrow.  This Agreement shall be deemed terminated if Buyer does not deliver notice of its intent to proceed to the close of Escrow on or before the Contingency Removal Date, and Escrow Holder shall return the Deposit to Buyer, together with any interest earned thereon, whereupon the parties hereto shall be released and relieved of any and all liability and/or obligation under this Agreement, other than each party’s respective indemnity obligations.  
ARTICLE IV     
TRANSFER OF TITLE
4.01    Title to the Land.  Title to the Land, Appurtenances and Improvements, subject to the Permitted Exceptions, shall be transferred by Seller to Buyer on the Closing Date by a warranty deed in the form set forth in Exhibit D (the “Deed”).
4.02    Title to Personal Property and Intangible Property.  At the Closing, Seller shall transfer title to the Personal Property by a bill of sale substantially in the form attached hereto as Exhibit E (the “Bill of Sale”), such title to be free of any security interests, leases, liens, claims, encumbrances or interests and shall deliver to Buyer an assignment of the Intangible Property substantially in the form of the assignment attached hereto as Exhibit F (the “Assignment”).
4.03    Delivery of Possession.  At the Closing, Seller shall deliver exclusive possession of the Property to Buyer, subject only to the Permitted Exceptions.
4.04    As-Is Purchase.  Buyer acknowledges and agrees that Seller is selling and Buyer is purchasing the Property on an "AS IS" basis, and that except for the representations, warranties, and covenants set forth in this Agreement, and the due diligence documents and other materials provided to Buyer in connection with this Agreement, Buyer is relying on its own investigation of the Property.
ARTICLE V     
ESCROW

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Exhibit 10.2

5.01    Escrow.  Buyer and Seller shall deliver a fully executed copy of this Agreement to Escrow Holder within two (2) business days after the Effective Date, and said delivery shall constitute the opening of Escrow (the “Escrow”).  Any escrow instructions which shall be executed by the parties hereto shall implement the performance of this Agreement and shall be deemed to incorporate the provisions hereof, whether or not specifically stated therein.  At least three (3) business days prior to the Closing Date, as hereinafter defined, Buyer and Seller shall each deposit the following documents, and within the time required by Escrow Holder, Buyer shall wire transfer the funds into Escrow, as further described below:
(a)    Seller shall execute and deposit (i) the duly executed and acknowledged Deed, and (ii) Seller’s Non‐Foreign Affidavit in the form attached hereto as Exhibit G (the “Non‐Foreign Certificate”).
(b)    Buyer shall deposit (i) the balance of the Purchase Price, and (ii) sufficient additional funds to pay Buyer’s share of all Escrow costs and closing expenses.
(c)    Buyer and Seller shall jointly execute and deposit (i) counterpart originals of the Bill of Sale and Assignment, and (ii) any other documents necessary to facilitate the close of Escrow.
5.02    Close of Escrow.   The transaction shall be closed by means of an escrow closing (the “Closing”), with the concurrent recording of the documents of title and the delivery of the Title Policy and the payment of the Purchase Price to Seller.  The Closing shall take place within fifteen (15) days (provided, however, that if the 15th day is not a business day, then the next business day following the 15th day) after the Contingency Removal Date (the “Closing Date”), but not later than 60 days following the Opening of Escrow, or on such other date as may be mutually agreed upon by both Seller and Buyer.  The Deposit and any other sums in Escrow as of said date shall be applied to the Purchase Price.  Expenses of the Escrow and other items shall be charged or credited, as the case may be, to Seller and Buyer, as provided in Section 10.01.
ARTICLE VI     
CONDITIONS OF THE ESCROW; FAILURE OF CONDITIONS
6.01    Buyer’s Conditions to the Close of Escrow.  Without affecting Buyer’s right to terminate this Agreement in its sole discretion, the obligation of Buyer to purchase the Property and the close of Escrow are conditioned on satisfaction or written waiver by Buyer of each of the following conditions, which conditions are solely for Buyer’s benefit and except as otherwise specifically set forth in this Agreement, may be waived in writing by Buyer prior to the Closing Date:
(a)    The conveyance to Buyer on the Closing Date of title to the Land as evidenced by the issuance by the Title Company of, or the irrevocable commitment of the Title Company to issue, a CLTA (or, if elected and paid for by Buyer, an ALTA) Owner's Policy of Title Insurance (“Title Policy”) in the full amount of the Purchase Price, subject only to the Permitted Exceptions, and may contain such endorsements as Buyer may in its discretion and expense request.

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Exhibit 10.2

(b)    Evidence satisfactory to Buyer, in its sole and absolute discretion, that all Personal Property is being delivered free and clear of all security interests, leases, liens, claims, encumbrances, and interests.
(c)    The delivery of exclusive possession of the Property to Buyer, free and clear of all materials, debris, excess manufacturing components, stability samples in the chamber, and other furniture, fixtures and equipment in the Improvements that are not listed on Exhibit C as Personal Property being purchased hereunder.  Disposal of all such materials shall be in compliance with all applicable laws.
(d)    The recordation of the Deed and delivery to Buyer on the Closing Date of the other documents and instruments specified in this Agreement or required by Escrow Holder.
(e)    All of Seller’s representations and warranties contained herein, or made in writing by Seller pursuant to this Agreement, shall have been true and correct when made and unless otherwise disclosed to Buyer in writing by Seller prior to the Closing Date, shall be true and correct as of the Closing Date, and Seller shall have complied with all of Seller’s covenants and agreements contained in this Agreement.
(f)    If the Property is subject to any declaration of covenants, conditions and restrictions, reciprocal access easements or similar agreements (collectively, “CC&Rs”), Buyer shall have received at least five (5) days prior to the Closing, an estoppel certificate from the declarant, property owner’s association or other party to the CC&Rs reasonably satisfactory to Buyer as to such matters as Buyer shall have specified by written notice to Seller on or before the Contingency Removal Date.
6.02    Failure of Buyer’s Conditions.  Unless Buyer gives written notice to Seller and Escrow Holder that the conditions specified in Section 6.01 immediately above and all other conditions considered by Buyer have been satisfied or waived by Buyer prior to the Contingency Removal Date, the Escrow shall be terminated and all funds and documents deposited with the Escrow Holder shall be immediately returned to the party having deposited the same.  In the event of any such termination, Buyer and Seller shall be immediately released from all obligations hereunder (except for any obligation to indemnify and defend a party as set forth herein, which obligations shall survive the Closing).
ARTICLE VII     
DEFAULT
7.01    LIQUIDATED DAMAGES FOR BUYER’S DEFAULT.  THE PARTIES HAVE DETERMINED AND AGREED THAT THE ACTUAL AMOUNT OF DAMAGES THAT WOULD BE SUFFERED BY SELLER AS A RESULT OF BUYER’S DEFAULT THAT RESULTS IN A FAILURE TO CLOSE UNDER THIS AGREEMENT IS DIFFICULT OR IMPRACTICABLE TO DETERMINE AS OF THE EFFECTIVE DATE OF THIS AGREEMENT AND THAT IN SUCH EVENT THE AMOUNT OF THE DEPOSIT IN ESCROW AT THE TIME OF THE DEFAULT, EXCLUSIVE OF ANY INTEREST ACCRUED THEREON, SHALL BE DELIVERED OR CAUSED TO BE DELIVERED BY 

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Exhibit 10.2

BUYER OR ESCROW HOLDER TO SELLER AS LIQUIDATED DAMAGES, WHICH LIQUIDATED DAMAGES SHALL CONSTITUTE SELLER’S SOLE AND EXCLUSIVE REMEDY (WHETHER AT LAW OR IN EQUITY, INCLUDING ANY REMEDY FOR SPECIFIC PERFORMANCE) AGAINST BUYER ON ACCOUNT OF BUYER’S DEFAULT THAT RESULTS IN A FAILURE TO CLOSE UNDER THIS AGREEMENT AND SELLER SHALL BE RELEASED FROM ITS OBLIGATION TO CONVEY THE PROPERTY TO BUYER.  SELLER HEREWITH WAIVES ALL OTHER CLAIMS OR CAUSES OF ACTION AGAINST BUYER OR BUYER’S AGENTS AND EMPLOYEES, INCLUDING ANY CLAIMS ARISING BY STATUTE OR COMMON LAW, WHETHER SUCH CLAIMS BE CHARACTERIZED AS CONTRACT OR TORT CLAIMS.  NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS SECTION 7.01, SELLER MAY ADDITIONALLY PURSUE ALL OF ITS RIGHTS AND REMEDIES FOR BUYER’S BREACH UNDER SECTIONS  8.04, 11.01, AND 11.06 HEREUNDER.
	
			
	Initials:
	 
	 

	 
	Buyer
	Seller

	 
	 
	 

7.02    Seller’s Breach.  If Seller breaches or is in default of any of its obligations under this Agreement, Buyer may pursue all its remedies in law and equity, including, without limitation, its right to damages and to specific performance of this Agreement.
ARTICLE VIII     
REPRESENTATIONS AND WARRANTIES
8.01    Representations and Warranties of Seller.  As an inducement to Buyer to enter into this Agreement and to consummate the transactions contemplated hereby and to the extent not otherwise disclosed to Buyer in writing, Seller hereby represents and warrants to Buyer, both as of the Effective Date and, unless notified as set forth below, again as of the Closing Date as follows:
(a)    Use and Operation.  The Property has been used for manufacturing of veterinary pharmaceuticals from at least 1982 through the date on which Seller ceased operations at the Property.  This process involved the use and disposal of numerous hazardous wastes, including chlorinated solvents.  The Property is not in violation of any applicable Hazardous Materials Laws (as defined below), zoning and land use laws, and other applicable local, state and federal laws, ordinances, regulations and requirements, including any laws related to access by the disabled.  As of the last date on which Seller operated a business on the Property, Seller had all required permits, licenses, and other governmental authorizations required for the operation of its business, which were valid and in full force.
(b)    Land‐Use Regulation.  No condemnation, environmental, zoning or other land‐use regulation proceedings, have been instituted or, to Seller’s knowledge, planned to be instituted by any person, entity or jurisdiction, and Seller has not received notice of any special assessment proceedings affecting the Property.

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Exhibit 10.2

(c)    Hazardous Materials.  There has been no storage, use, generation, handling or disposal of any Hazardous Materials in, on, or about the Property, except in compliance with Hazardous Materials Laws.  
As used herein, “Hazardous Materials” means any material, substance or waste designated as hazardous, toxic, radioactive, injurious or potentially injurious to human health or the environment, or as a pollutant or contaminant, or words of similar import, under any Hazardous Materials Law (as defined below).  As used herein, “Hazardous Materials Law” means any federal, state or local law, statute, regulation or ordinance now or hereafter in force, as amended from time to time, pertaining to materials, substances or wastes which are injurious or potentially injurious to human health or the environment or the release, disposal or transportation of which is otherwise regulated by any agency of the federal, state or any local government with jurisdiction over the Property or any such material, substance or waste removed therefrom, or in any way pertaining to pollution or contamination of the air, soil, surface water or groundwater.
(d)    Reports, Intangible Property and Other Documents.  That all permits, licenses, approvals, contracts, warranties and guarantees, maintenance and service contracts, and all other books, records, documents and other items relating to or affecting the Property and delivered to Buyer pursuant to this Agreement are and as of the Closing Date will be complete, true and correct copies, and that there are no documents, whether or not described in Paragraph 3.01 above, that are material to the Property or the operation of Seller's business at the Property (i) that are available to Seller that have not been delivered to Buyer or (ii) that Seller is aware of and have not been described to Buyer.
(e)    Contracts and Other Agreements.  That (i) Seller has not entered into and there are no service contracts or other agreements of any kind or nature whatsoever affecting the Property other than those delivered to Buyer, and (ii) there is no obligation of Seller under the terms of any contract, lease or other instrument relating to or affecting the Property to assume any obligation thereof.
(f)    Agreements Affecting the Property.  That there are no easements, encumbrances, leases or other agreements affecting the Property except as shown in the Preliminary Report.
(g)    Personal Property.  That all of the Personal Property is in the same condition as it was as of the Contingency Removal Date.
(h)    Litigation.  That there is no litigation pending or threatened against Seller or the Property (or any portion thereof), or any basis therefor, that arises out of the use, operation or ownership of the Property, or any portion thereof.
(i)    Bankruptcy, Insolvency, Etc.  That Seller is not the subject of any case, action or proceeding, whether contemplated, threatened or actual, under any bankruptcy, insolvency or similar laws affecting creditor’s rights generally (whether state or federal).
(j)    Authority.  Seller is duly organized, validly existing and in good standing under the laws of the State of Kansas; this Agreement and all documents executed by Seller which are 

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Exhibit 10.2

to be delivered to Buyer on the Closing Date are, and as of the Closing Date will be, duly authorized, executed, and delivered by Seller.  Neither Seller nor any person, group, entity or nation that Seller is acting, directly or indirectly for, or on behalf of, is named by any Executive Order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism) or the United States Treasury Department as a terrorist, “Specially Designated National and Blocked Person,” or is otherwise a banned or blocked person, group, entity, or nation pursuant to any Law that is enforced or administered by the Office of Foreign Assets Control, such as the Liberation Tigers of Tamil Elam, Hezbollah and Al Qaeda, and Seller is not engaging in the transactions contemplated by this Agreement, directly or indirectly, on behalf of, or instigating or facilitating such transaction, directly or indirectly, on behalf of, any such person, group, entity or nation.  
If at any time after the Effective Date and prior to the Closing Date Seller learns of any matter that would change any of Seller’s representations and warranties contained in this Agreement, Seller shall notify Buyer in writing and (1) if the change is due to circumstances outside of Seller’s control, Buyer shall have ten days after receipt of such notice to elect to terminate this Agreement, or (2) if the change is due to circumstances within Seller’s control, Seller shall have ten days after receipt of such notice to cure any default of Seller in causing such changed circumstance, and if Seller does not cure such changed circumstance that is within Seller’s control, the change shall constitute a default of Seller hereunder, and Section 7.02 shall govern.
8.02    Representations and Warranties of Buyer.  Buyer represents and warrants to Seller as follows:  Buyer is duly organized, validly existing and in good standing under the laws of the State of Delaware; this Agreement and all documents executed by Buyer which are to be delivered to Seller on the Closing Date are, and as of the Closing Date will be, duly authorized, executed, and delivered by Buyer.  Neither Buyer nor any person, group, entity or nation that Buyer is acting, directly or indirectly for, or on behalf of, is named by any Executive Order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism) or the United States Treasury Department as a terrorist, “Specially Designated National and Blocked Person,” or is otherwise a banned or blocked person, group, entity, or nation pursuant to any Law that is enforced or administered by the Office of Foreign Assets Control, such as the Liberation Tigers of Tamil Elam, Hezbollah and Al Qaeda, and Buyer is not engaging in the transactions contemplated by this Agreement, directly or indirectly, on behalf of, or instigating or facilitating such transaction, directly or indirectly, on behalf of, any such person, group, entity or nation.  
8.03    Seller’s Indemnity.  Seller agrees to indemnify, defend, protect and hold harmless Buyer and its officers, directors, shareholders, partners, mortgagees, employees and agents, as applicable, from and against any and all loss, cost, liability, obligation, damage, claim and/or expense including, without limitation, attorneys’ and paralegals’ fees and costs and court costs incurred by Buyer in connection with or arising from any breach by Seller of any of the representations and warranties made by Seller as provided in this Agreement or in any other instrument delivered pursuant to this Agreement.

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Exhibit 10.2

8.04    Buyer’s Indemnity.  Buyer hereby agrees to indemnify, defend, protect and hold harmless Seller and its officers, directors, shareholders, partners, mortgagees, employees and agents, as applicable, from and against any and all loss, cost, liability, obligation, damage, claim and/or expense including, without limitation, attorneys’ and paralegals’ fees and costs and court costs, incurred by Seller in connection with or arising from any breach by Buyer of any of the representations and warranties made by Buyer as provided in this Agreement or in any other instrument delivered pursuant to this Agreement.
8.05    Survival.  The representations and warranties set forth in this Agreement and Article VIII or in any other instrument delivered pursuant to this Agreement shall survive the recordation of the Deed for a period of twenty-four (24) months after the Closing Date.  The indemnities set forth in this Agreement shall survive the Close of Escrow and shall not be merged into the Deed.
ARTICLE IX     
ADDITIONAL COVENANTS OF SELLER AND BUYER
9.01    Maintenance of the Property.  At all times until the Closing Date, Seller shall maintain the Property in its current condition and repair, and will neither create nor permit the creation of any title exceptions, such as easements or liens, or encumber the Property.  Any damage to the Property resulting from Seller's removal of any furnishings, fixtures, or equipment not being sold to Buyer hereunder shall be repaired by Seller prior to the Closing Date.
9.02    New and Amended Agreements.  From and after the Effective Date, Seller may not enter into any new lease, contract or agreement relating to the Property, or amend any existing lease, contract or agreement relating to the Property, without the prior written consent of Buyer, which consent may be withheld by Buyer in its sole discretion.
9.03    Payment of Bills.  Seller agrees to pay in full any and all of its bills relating to the Property (and which relate to work which had been ordered by Seller or actually performed on the Property prior to the Closing Date) that are outstanding as of the Closing Date.
9.04    Exclusivity.  During the period from the Effective Date through the Closing Date or earlier termination of this Agreement, in consideration of the time and effort and costs incurred by Buyer in inspecting the Property, and for the sum of Ten Dollars, receipt of which is hereby acknowledged, Seller shall not seek, accept, respond to, or negotiate any other offers for the Property from any person or entity other than Buyer.  Seller’s breach of its obligations under this Section 9.04 shall cause damages to Buyer, who is incurring costs and foregoing other opportunities in order to proceed with a possible purchase of the Property.
9.05    Seller Assistance.  Seller shall cause Steve Michaels, a principal and officer of Seller who is benefiting from the sale of the Property to Buyer, and by his signature below Steve Michaels agrees, that he shall, prior to the Contingency Removal Date, negotiate in good faith a consulting agreement with Buyer, in which he will agree to provide assistance in re-commissioning the plant, for a period of six (6) months following the Closing Date at times mutually agreeable to the parties.  Consulting services to be provided include, among other 

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Exhibit 10.2

things, assisting Buyer in contacting prior employees of Seller and providing information and assistance in making the plant operational, at an hourly rate of $90 per hour, not to exceed $90,000 for a 6 month period.  Steve Michaels will also assist in coordinating between Ken McConnell and other former employees identified by Buyer for providing consulting services to Buyer.
ARTICLE X     
PRORATIONS AND EXPENSES
10.01    Prorations and Costs.  Seller will pay at Closing any documentary stamp or transfer taxes payable to the city, county or state that the Property is located in, and title insurance for CLTA coverage, Buyer will pay for the difference between CLTA and ALTA coverage, if requested by Buyer, and for all title endorsements requested by Buyer.  All other closing costs will be split equally by the parties.  Each of the parties will pay its own legal and due diligence costs.  All taxes, income and expenses of the Property will be prorated and adjusted as of the Closing Date.  All other costs and charges of the Escrow for the sale not otherwise provided for in this Agreement shall be allocated in accordance with the closing customs for the city and county in which the Property is located.
10.02    Preliminary Closing Statement.  Escrow Holder shall prepare a preliminary Closing Statement, to be reviewed and approved by Buyer and Seller.
10.03    Post-Closing Reconciliation.  If any of the aforesaid prorations cannot be calculated accurately on the Closing Date, then they shall be calculated as soon after the Closing Date as feasible.  Buyer or Seller owing any such other party a sum of money based on such subsequent proration(s) shall promptly pay said sum to the other party.
ARTICLE XI     
MISCELLANEOUS
11.01    No Brokerage Commission.  Buyer represents to Seller and Seller represents to Buyer that such party has not engaged a broker, agent, or finder in connection with this transaction.  If any broker, salesman or other person makes a claim for a commission or finder’s fee based upon any agreements with Buyer or Seller for the transactions contemplated by this Agreement, the party claimed to be the party who engaged the broker shall indemnify and hold harmless the other party from said claim and all liabilities, costs and expenses related thereto, including reasonable attorney’s fees which may be incurred in connection with such claim.
11.02    Notices.  Any and all notices or other communications required or permitted to be given under this Agreement, or by law, shall be in writing and addressed to all of the following addresses and either (i) personally delivered by messenger, (ii) sent by Federal Express or other nationally recognized overnight courier service that provides receipted delivery service, delivery charges prepaid, return receipt requested, or (iii) sent by E-Mail if it is addressed to all of the parties identified below, in which event notice shall be deemed delivered upon the sender’s receipt of confirmation of transmission of said notice.  Except as to E-Mail notice, notice shall be deemed to have been given upon the date of delivery (or the date of refusal to accept delivery, as 

13

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Exhibit 10.2

the case may be) or at such other address as either party may from time to time specify in writing to the other in the manner aforesaid. 
	
		
	If to Buyer:
	Donald L.J. Campodonico, J.D.
Staff Attorney
1555 Bayshore Highway, #200
Burlingame, CA 94010

Telephone:  650-692-2977
Email:  donald.campodonico@kindredbio.com

	With a copy to:
	TroyGould
1801 Century Park East, 16th Floor
Los Angeles, CA 90067
Attn:  Sandra Slon

Telephone:  310-789-1392
Email:  sslon@troygould.com

	 
	 

	If to Seller:
	Steve Michaels
Chairman
Strategic Veterinary Pharmaceuticals, Inc.
100 North West Airport Rd.
St. Joseph, Missouri 64503

Telephone:  816-364-3995, ext. 2111
Email: smichaels@bsmlogisticsinc.com

	With copies to:
	 

	If to Escrow Holder:
	First American Title Company
3723 Beck Rd.
St. Joseph, MO 64506
Attn:  Patti Eiman, Area Manager

Telephone:  816-901-1513
Email:  peiman@firstam.com

Notice shall be deemed to have been given upon the date of delivery (or the date of refusal to accept delivery, as the case may be) or at such other address as either party may from time to time specify in writing to the other in the manner aforesaid.
11.03    Time.  Time is of the essence of every provision herein contained.
11.04    Incorporation by Reference.  All of the Exhibits attached hereto or referred to herein and all documents in the nature of such Exhibits, when executed and/or so attached are by this reference incorporated herein and made a part of this Agreement.
11.05    Further Assurances.  In a timely fashion, at no cost, each party shall execute and deliver such further instruments, documents or assurances, and take such further action, as shall 

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Exhibit 10.2

be required to carry out the purposes and intent of this Agreement, including, without limitation, signing any assignment, transfer document, evidence of termination of contract or license or permit, or correspondence required for the issuance of a new permit or license to Buyer.
11.06    Attorneys’ Fees.  If either party hereto fails to perform any of its obligations under this Agreement or if any dispute arises between the parties hereto concerning the meaning or interpretation of any provision of this Agreement, then party not prevailing in such dispute shall pay any and all costs and expenses incurred by the other party on account of such default and/or in enforcing or establishing its rights hereunder, including, without limitation, court costs and actual attorneys’ fees and disbursements.  Any such attorneys’ fees and other expenses incurred by either party in enforcing a judgment in its favor under this Agreement shall be recoverable separately from and in addition to any other amount included in such judgment, and such attorneys’ fees obligation is intended to be severable from the other provisions of this Agreement and to survive and not be merged into any such judgment.
11.07    Construction.  The parties acknowledge that each party has reviewed this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments or exhibits thereto.
11.08    No Merger.  The provisions of this Agreement shall not merge with the delivery of the Deed but shall, except as otherwise expressly provided in this Agreement, survive the close of the Escrow.
11.09    Governing Law.  This Agreement shall be construed and interpreted in accordance with and shall be governed and enforced in all respects according to the laws of the State of Kansas.
11.10    Entire Agreement.  This Agreement and the Exhibits which are attached hereto or contemplated to be attached hereto and by this reference incorporated herein and all documents specifically contemplated by this Agreement when executed, contain the entire understanding of the parties and supersede any and all other written or oral understanding.
11.11    Required Disclosure.  Buyer and Seller acknowledge and agree that disclosure of this Agreement may be made pursuant to valid law.
11.12    Tax‐Deferred Exchange.
(i)    If this transaction is consummated as an exchange by Seller, Buyer agrees, upon request by Seller, to execute and deliver to Seller such further documents and instruments in writing which may be prepared by Seller and be reasonably required to accomplish an Internal Revenue Code of 1986, as amended, Section 1031 tax‐deferred exchange.
(ii)    Buyer shall not be liable for the payment of Seller’s income taxes or for the tax consequences, if any, to Seller as a result of the exchange of the Property for Exchange Property.  Under no circumstances shall Buyer be required to (a) receive title to, or any interest in, the 

15

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Exhibit 10.2

property to be exchanged (the “Exchange Property”), (b) execute any note or deed of trust or assume any liability with respect to the Exchange Property, or (c) make any warranty in regard to the Exchange Property.  Seller hereby agrees to indemnify Buyer against and releasing Buyer from any and all claims, demands, causes of action, and obligations of whatsoever nature, known or unknown, fixed or contingent, with respect to the Exchange Property or the proposed exchange.
(iii)    If an exchange is not concluded, and Buyer is not in default, Seller will sell and Buyer will purchase the Property on the Closing Date in accord with all provisions of this Agreement.
11.13    Risk of Loss.
(i)    If any of the Property is damaged or destroyed prior to the Closing, or (b) condemnation proceedings are commenced against any of the Property, then, notwithstanding anything to the contrary set forth in this Section 11.13, Buyer shall have the right, at its election, either to terminate this Agreement or to not terminate this Agreement and purchase the Property.  Buyer shall have thirty (30) days after Seller notifies Buyer that an event described in clause (a) or (b) has occurred to make such election by delivery to Seller of an election notice (the “Election Notice”).  Buyer’s failure to deliver the Election Notice within such thirty (30) day period shall be deemed an election to not terminate this Agreement.  If this Agreement is terminated by delivery of notice of termination to Seller, then the Deposit shall be returned to Buyer, and Buyer and Seller shall each be released from all obligations hereunder.
(ii)    If any of the Property is damaged or destroyed or there is a condemnation of any portion of the Property prior to the Closing Date and this Agreement is not terminated as provided above, then Seller shall give Buyer a credit against the Purchase Price due hereunder equal to the amount of any insurance proceeds or condemnation awards collected by Seller as a result of any such damage or destruction or condemnation, plus the amount of any insurance deductible, less any sums expended by Seller toward the restoration or repair of the Property as a result of such casualty or condemnation.  If the proceeds or awards have not been collected as of the Closing, then such proceeds or awards shall be assigned to Buyer at Closing, and Buyer shall receive a credit from Seller at Closing equal to the amount of the deductible under any policy of insurance pursuant to which such assigned proceeds will be paid; provided that if Seller shall have expended in good faith any sums before the Closing to repair or restore the Property, the amount expended by Seller shall first be deducted from any credit due Buyer for the deductible under any insurance policy, and if the amount expended by Seller in good faith exceeds the total amount of such deductible(s), Seller shall reserve from the assignment of insurance proceeds to Buyer, the amount of such excess.
11.14    Counterparts and Signatures.  This Agreement may be executed in more than one counterpart, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.  In addition to delivery of signed original counterpart signature pages, any party may deliver its signed counterpart signature page by email transmission of a scanned PDF image or by facsimile transmission, and transmission of a signed counterpart signature page in 

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Exhibit 10.2

such manner by a party shall conclusively evidence delivery of such party’s executed counterpart signature page, whether or not an original is subsequently delivered by such party.  
IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement the day and year set forth below.
	
		
	BUYER:
	KINDRED BIOSCIENCES, INC., a Delaware 
corporation 

By:    /s/ Richard Chin
Name:    Richard Chin
Title:    CEO
Dated:   6/21/2017

	SELLER:
	STRATEGIC VETERINARY PHARMACEUTICALS, INC., a 
Kansas corporation

By:  /s/ Stephen T. Michaels
Name:   Stephen T. Michaels

Title: Chairman of the Board

Dated:June 21, 2017

Solely for purposes of agreeing to Paragraph 9.05 above:

/s/ Steve Michaels
Steve Michaels, individually

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Exhibit 10.2

LIST OF EXHIBITS
	
		
	Exhibit
	Description

	A
	Legal Description of Land

	B
	List of Permits and Licenses

	C
	Personal Property

	D
	Warranty Deed

	E
	Bill of Sale

	F
	Assignment

	G
	FIRPTA

	H
	Employee List

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Exhibit 10.2

EXHIBIT A
Legal Description of Land
Begin at a point that is 526, I feet North and 20 feet East (N 89 degrees 31 minutes East) of the
Southwest Corner of the North Half of the Northwest Quarter of Section 31, Township 3 South,
Range 23 East of the 6th P.M., thence East (North 89 degrees 31 minutes 30 seconds East) 265
feet; thence North 164.4 feet to the Southeast Corner of a tract described in a conveyance
recorded in Book 159 at page 214 in the Office of the Register of Deeds of Doniphan County,
Kansas; thence West (South 89 degrees 31 minutes 30 seconds West), 265 feet; thence South
164.4 feet to the point of beginning, and subject to an easement in favor of The Gas Service
Company, recorded in Book 157 at page 46, in the Office of the Register of Deeds of Doniphan
County, Kansas. (Tract J)

and also,

A tract of land in the North Half of the Northwest Quarter of Section 31 , Township 3 South,
Range 23 East of the 6th P,M., described as follows: Beginning at a point that is 33 feet North
and 285 feet East (North 89 degrees 31 minutes 30 seconds East) of the Southwest Comer of the
North Half of the Northwest Quarter, aforesaid (said point being the Southwest comer of a tract
described in a conveyance recorded in Book 155 at page 593 in the Office of the Register of
Deeds of Doniphan County, Kansas, and said point also being on the North right of way line of
Oak Street: thence North 357.67 feet; thence West (South 89 degrees 31 minutes 30 seconds
West), 265 feet; thence south 35 feet; thence East (North 89 degrees 31 minutes 30 seconds East)
75.33 feet; thence South 25 feet to the exterior Northwest Comer of the existing Medico
Industries Building; thence East following the exterior of the North wall of said building 102,67
feet to the Northeast Comer thereof; thence south following the exterior of the East wall of said
building, 202,67 feet to the Southeast Comer thereof; thence continuing south 95 feet to a point
on the original right of , way line oT Oak Street; thence East (North 89 degrees 31 minutes 30
seconds East) 87 feet to the point of beginning, containing 1,87 acres, (Tract II)

and also,

Begin at a point that is 33 feet North and 20 feet East (North 89 degrees 31 minutes East of the
Southwest Corner of the North Half of the Northwest Quarter of Section 3 J, Township 3 South,
Range 23 East of the 6th P,M,; thence East (North 89 degrees 3) minutes 30 seconds East) 265
feet along the North right of way line of Oak Street as extended to the Southwest corner of a tract
described in a conyeyance recorded in Book 155 at page 593 in the records in the Office of the
Register of Deeds of Doniphan County, Kansas; thence North 493 .1 feet, thence West (South 89
degrees 31 minutes 30 seconds West) 265 feet, thence South 493, I feet to the point of beginning,
EXCEPTING Special Warranty Deed filed in Book 166 at page 192 in the records in the Office
of the Register of Deeds aforesaid, to wit:

A tract of land in the North One half of the Northwest Quarter of Section 3 1, Township 3 South,
Range 23 East of the 6th P,M, Described as fo llows : Beginning at a point that is 33 feet North
and 285 feet East (North 89 degrees 31 minutes 30 seconds East) of the Southwest Corner of the
North Half, Northwest Quarter aforesaid (said point being the Southwest comer of a tract
described in a conveyance recordcd in Book 155 at page 593 in the Office of the Register of
Deeds of Doniphan County, Kansas, and said point also being on the North right of way line of

–1
 
-  .

Exhibit 10.2

Oak Street) thence Nort,h 357.67 feet; thence West (South 89 degrees 31 minutes 30 seconds
West), 265 feet; thence South, 35 feet; thence East (North 89 degrees 31 minutes 30 seconds
East), 75.33 feet; thence South, 25 feet to the exterior Northwest comer of the existing Medico
Industries Building; thence East following the exterior of the North wall of said building 102.67
feet to the Northeast Corner thereof, thence South following the exterior of the East wall of said
building, 202.67 feet to the Southeast corner thereof, thence continuing South, 95 feet to a point
on the North right of way line of Oak Street, thence East (North 89 degrees 31 minutes 30
seconds East, 87 feet to the point of beginning, containing 1.87 acres. (Tract Ill)
Parcel No, 022-089-31-0-20-01-005.00-0 (R281 0)

and also, (Book 166 Page 369)

A tract of land in the South Half of the Northwest Quarter of Section 31, Township 3 South,
Range 23 East, Doniphan County, Kansas, described as follows: Beginning at a point 17 feet
South and 20 feet East (North 89 degrees 31 minutes 30 seconds East) of the Northwest Corner
of said South Half, said point being on the South right of way linc of Oak Street; thence East
(North 89 degrees 31 minutes 30 seconds East) parallcl to the North line of said South Half, 410
feet along the South right of way line of Oak Street; thence South, parallel to the West line of
said South Half, 425 feet; thence West (South 89 degrees 31 minutes 30 seconds West), parallel
to the North line of said South Half, 410 feet; thence North parallel to the West line of said South
Half, 425 feet to the point of beginning. (Tract IV)
Parcel No. 022-089-31-0-20-06-002.00-0 (R2867)

–2
 
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Exhibit 10.2

EXHIBIT B

List of Permits and Licenses

Listed below are the licenses and permits in Seller's name.  Seller advises that they are likely not transferable, except for the FEIN#- FDA Establishment Identification Number, which number will stay with the facility.

Kansas Board of Pharmacy Manufacturers Certificate.
Kansas Alcoholic Beveridge Control Division – Non-Beveridge user license.
KDHE – wastewater discharge permit.
FEIN# - FDA Establishment Identification Number
Storm Water Permit that was last filed November 2016 and is good through November 2017.  
According to K.A.R. 28-16-56(d) this permit is transferrable with the joint approval of the old and new owner, and Seller agrees to approve the transfer to Buyer.  

B–1
 
-  .

Exhibit 10.2

EXHIBIT C
Personal Property

Furniture, fixtures, and equipment currently located in the Improvements or on the Land, as listed below:

The pelletizing line, the full USP purified water system, the full USP WFI water system with hot loop, a complete clean room (class 100 fill suite, no filling equipment), full plant support HVAC chilling and heating, oil free air, two complete compounding areas for liquids and creams, and complete BFS Sterile fill line with terminal water cascade autoclave from the BFS sterile fill line (collectively, the “Personal Property”), but excluding the BFS sterile fill line.

To also include the Boiler for the WFI system if Seller is able to buy it back from the auction purchaser.

All office equipment, such as: desks, chairs, tables, filing cabinets, bookshelves, conference room furniture, telephones, teleconference equipment, projectors and display equipment, monitors, printers, and general office supplies.

Prior to the Contingency Removal Date, Buyer and Seller shall together go through the facility and tag all furniture, fixtures, and equipment to identify whether each piece is to be removed or to remain as part of the Personal Property being acquired by Buyer.

C–1
 
-  .

Exhibit 10.2

EXHIBIT D
Warranty Deed
[TO BE IN SUBSTANTIALLY THE FOLLOWING FORM, SUBJECT TO APPROVAL BY TITLE OFFICER]
RECORDING REQUESTED BY:
AND WHEN RECORDED MAIL TO 
AND MAIL TAX BILLS TO:
    
KINDRED BIOSCIENCES, INC.
1555 Bayshore Highway, #200
Burlingame, CA  94010
Attn:  Donald L.J. Campodonico

KANSAS SPECIAL WARRANTY DEED
THIS DEED, made and entered into this ____ day of _________, 2017, by and between STRATEGIC VETERINARY PHARMACEUTICALS, INC., a Kansas corporation, having an address of 100 NW Airport Road, St. Joseph, MO 64503 (the “Grantor”) and KINDRED BIOSCIENCES, INC., a Delaware corporation, having an address of 1555 Bayshore Highway, #200, Burlingame, CA  94010.
WITNESSETH, that the Grantor, for and in consideration of the sum of One Dollar ($1.00), and other good and valuable consideration, paid by the Grantee, the receipt of which is hereby acknowledged, does by these presents SELL AND CONVEY unto the Grantee, all of the Grantor’s interest in the following described lot, tract, or parcel of land, lying, being and situate in the County of Doniphan and State of Kansas, to-wit:
See Exhibit A, attached hereto and incorporated by reference.
Subject to: (i) taxes due but not yet payable for the calendar year 2017 and thereafter and special real estate taxes becoming a lien after the date hereof; and (ii) general and special assessments, any and all recorded easements, reservations, restrictions, encroachments and encumbrances, matters which would be shown by an accurate survey, underground and overhead cables, lines and utility services, and all existing zoning ordinances, laws, codes, statutes and subdivision regulations and other governmental laws, rules, codes, statutes and regulations limiting or restricting the use to which the property may be put.
TO HAVE AND TO HOLD the same, together with all rights and appurtenances to the same belonging, unto the Grantee, and to its successors and assigns forever. The said Grantor hereby covenanting that Grantor and its successors and assigns, shall and will WARRANT AND DEFEND the title to the premises unto the said Grantee, and to its successors and assigns forever, against the lawful claims of all persons claiming by, through or under Grantor but none other, excepting, 

D–1
 
-  .

Exhibit 10.2

however: (i) taxes not yet due and payable for the calendar year 2017 and thereafter and the special taxes becoming a lien after the date of this deed; and (ii) general and special assessments, any and all recorded easements, reservations, restrictions, encroachments and encumbrances, matters which would be shown by an accurate survey, underground and overhead cables, lines and utility services, and all existing zoning ordinances, laws, codes, statutes and subdivision regulations and other governmental laws, rules, codes, statutes and regulations limiting or restricting the use to which the property may be put.
IN WITNESS WHEREOF, the said Grantor has executed these presents the day and year first above written.
STRATEGIC VETERINARY PHARMACEUTICALS, INC.
a Kansas corporation

By:    ________________________    
Name:    ________________________
Title:    ________________________

By:  __________________________        
Name:    ________________________
Title:    ________________________

STATE OF MISSOURI    )
) ss.
COUNTY OF ____________)

BE IT REMEMBERED, that on this ______ day of _______________, 2017, before me the undersigned, a Notary Public in and for said County and State aforesaid, came ______________, the ____________________ of STRATEGIC VETERINARY PHARMACEUTICALS, INC. a Kansas corporation, and ___________, the _________________ of said corporation, who are personally known to me to be such officers, and who are personally known to me to be the same persons who executed, as such officers, the within instrument on behalf of said corporation, and such persons duly acknowledged the execution of the same to be the act and deed of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, the day and year last above written.
Notary Public

My commission expires:

D–2
 
-  .

Exhibit 10.2

Attach Exhibit A (legal description)

D–3
 
-  .

Exhibit 10.2

EXHIBIT E
BILL OF SALE

THIS IS A BILL OF SALE from Strategic Veterinary Pharmaceuticals, Inc., a Kansas corporation (“Seller”) to Kindred Biosciences, Inc., a Delaware corporation (“Buyer”).  The effective date of this Bill of Sale for purposes of transferring title to the assets subject to this Bill of Sale (the "Effective Date") shall be the Closing Date as defined in that certain Purchase Agreement (the “Purchase Agreement”) by and between Seller and Buyer for the property located at 1141 Oak St., Elwood, Kansas (the “Property”).
In consideration of the payment of Ten Dollars ($10.00) paid by Buyer to Seller, receipt of which is hereby acknowledged, Seller, by these presents, does hereby forever grant, bargain, sell, assign, convey, transfer, set-over, and deliver to Buyer and its successors and assigns, effective as of the Effective Date, Seller's ownership of all of the personal property, furniture, fixtures, and equipment current located at the Property, as further described in Schedule A attached hereto (the “Assets”).
The Assets being transferred hereunder are sold "AS IS", and "WITH ALL FAULTS", WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, except that Seller represents and warrants that the Assets are in the same condition that they were as of the Contingency Removal Date, as defined in the Purchase Agreement, and except for the warranties set forth in the following paragraph of this Bill of Sale. 
The Assets are sold with the representation and warranty that the Assets include all of the property that was located at the Property as of the date of execution of the Purchase Agreement and that Seller has not removed or exchanged any of the property that was located in the Property as of such date.  Seller holds good and marketable title to the Assets, free and clear of any liens, claims, charges, or encumbrances, and free of any unpaid fees or charges.  Seller further represents and warrants that Seller has not assigned or transferred or agreed to assign or transfer any of its right, title, or interest in or to the Assets or any portion thereof.  If there is an alleged breach of any representation and warranty of title set forth herein, Seller shall, at Seller’s sole cost and expense, and by using counsel retained and paid by Seller and reasonably approved by Buyer, defend Buyer's right of ownership of the Assets.

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Exhibit 10.2

At any time, and from time to time, at the reasonable request of Buyer, Seller shall execute and deliver to Buyer any new, additional, or confirmatory instrument, and any other document necessary to vest in Buyer, all right, title and interest in and to the Assets conveyed hereby.
IN WITNESS WHEREOF, Seller has executed this Bill of Sale as of _______________, 2017.
“SELLER”
STRATEGIC VETERINARY
PHARMACEUTICALS, INC., a Kansas corporation

By:_____________________________
Name:___________________________

Title:____________________________

Date:____________________________

[ATTACH SCHEDULE A to this Bill of Sale, which will be Exhibit C to the Agreement] 

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Exhibit 10.2

EXHIBIT F
ASSIGNMENT OF INTANGIBLE PROPERTY
This Assignment of Intangible Property (“Assignment”) is made by Strategic Veterinary Pharmaceuticals, Inc., a Kansas corporation (“Assignor”) to Kindred Biosciences, Inc., a Delaware corporation (“Assignee”).  The effective date of this Assignment for purposes of transferring ownership of the intangible property subject to this Assignment (the "Effective Date") shall be the Closing Date as defined in that certain Purchase Agreement (the “Purchase Agreement”) by and between Assignor (as Seller) and Assignee (as Buyer) for the property located at 1411 Oak St., Elwood, Kansas (the “Property”).
A.    Pursuant to the Purchase Agreement, Assignor will sell to Assignee the Land, Appurtenances, Improvements, Personal Property, and Intangible Property, each as described in the Purchase Agreement (collectively, the “Property”) on the Effective Date.  Unless otherwise defined herein, each capitalized word used in this Assignment (including Exhibit "A" hereto) shall have the meaning ascribed to such word in the Purchase Agreement.
B.    Assignor is the owner of certain intangible personal property, including, without limitation, warranties, a list of employees, and quality system documents related to the Property, each as more particularly described on Exhibit “A” attached hereto and made a part hereof (collectively, the “Intangible Property”).
D.    Assignor desires to assign to Assignee, as of the Effective Date, all of its right, title, and interest to the Intangible Property, and Assignee desires to receive from Assignor such assignment from and after the Effective Date.
NOW THEREFORE, in consideration of the promises and conditions contained herein, the parties agree as follows:
1.    Assignment.  Assignor hereby sells, assigns, conveys, transfers, and delivers, effective as of the Effective Date, to Assignee all of its right, title and interest to the Intangible Property.
2.    Assumption.  To the extent there are continuing obligations to be performed by Assignor in connection with the Intangible Property, Assignee hereby assumes, effective as of the Effective Date, all of the obligations of Assignor related to the Intangible Property that accrue or are to be performed from and after the Effective Date and agrees to be bound by and perform all of the covenants, duties and obligations that accrue or are to be performed by the Assignor from and after the Effective Date.  Notwithstanding the foregoing, Assignee shall have no obligation, liability or responsibility for any liability, cost, expense or obligation of Assignor in connection with the Intangible Property which accrue or are to be performed prior to the Effective Date.
3.    Indemnification by Assignor.  Assignor hereby indemnifies, defends and holds Assignee and its officers, directors, shareholders, attorneys, and constituent parent, subsidiary and affiliate corporations and each of their managers, members, partners, officers, agents and 

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Exhibit 10.2

employees, and each of their successors and assigns wholly free and harmless from and against any and all liability, loss, cost, damage or expense (collectively, “Claims”) which Assignee or such indemnitees may incur or which may be asserted against Assignee or such indemnitees by reason of the failure of Assignor to fulfill, perform, discharge, or observe its obligations with respect to the Intangible Property, to the extent such Claims accrue prior to the Effective Date.
4.    Indemnification by Assignee.  Assignee hereby indemnifies, defends and holds Assignor and its officers, directors, shareholders, attorneys, and constituent parent, subsidiary and affiliate corporations and each of their partners, managers, members, officers, agents and employees, and each of their successors and assigns wholly free and harmless from and against any and all Claims which Assignor or such indemnitees may incur or which may be asserted against Assignor or such indemnitees by reason of the failure of Assignee to fulfill, perform, discharge, or observe its obligations with respect to the Intangible Property to the extent such Claims accrue on or after the Effective Date.
5.    Successors and Assigns.  This Assignment shall be binding on and inure to the benefit of the parties hereto, their heirs, executors, administrators, successors in interest and assigns.
6.    Attorneys’ Fees.  If any dispute should arise between the parties hereto regarding the terms or subject matter of this Assignment or the enforcement or breach of such terms, then the party prevailing in such dispute, whether by out-of-court settlement or final judicial determination, shall be entitled to recover from the non-prevailing party all costs and expenses of such dispute incurred by such prevailing party, including, without limitation, reasonable attorneys’ fees.
7.    Counterparts/Signatures.  This Assignment may be executed in counterparts, each of which shall be deemed an original, and both of which together shall constitute one and the same instrument.  Signatures by electronic mail or facsimile shall be binding on the parties.
8.    Further Assurances.  Assignor hereby covenants that it will, at any time and from time to time following a written request thereof, execute and deliver to Assignee and its successors and assigns, any additional or confirmatory instruments and take such further acts as Assignee may reasonably request to evidence fully the assignment contained herein.
9.    Failure of Closing.  The terms of this Assignment are conditioned on the closing of the sale of the Property by Assignor to Assignee, and will not become effective until the Effective Date. 
10.    Disclaimer.  Except as set forth herein or in the Agreement, the Intangible Property is conveyed by Assignor and accepted by Assignee AS IS, WHERE IS, AND WITHOUT ANY REPRESENTATIONS OR WARRANTIES OF ANY NATURE, EXPRESS OR IMPLIED.

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Exhibit 10.2

IN WITNESS WHEREOF, the undersigned have executed this Assignment on the date set forth below.
ASSIGNOR:    
Strategic Veterinary Pharmaceuticals, Inc.

By:_______________________________

Name:_____________________________

Title:______________________________

Date:______________________________

ASSIGNEE:     
Kindred Biosciences, Inc.

By:  ______________________________

Name:_____________________________

Title:______________________________

Date:______________________________

[Attach Exhibit A to this Assignment, which will be Exhibit B to the Agreement]

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Exhibit 10.2

EXHIBIT G
Certificate of Transferor Other 
Than an Individual
Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person.  To inform Kindred Biosciences, Inc., a Delaware corporation (“Transferee”), the transferee of certain real property which property is located in Elwood, Kansas, commonly known as 1411 Oak St., Ellwood, KS, that withholding of tax is not required upon the disposition of such U.S. real property interest by Strategic Veterinary Pharmaceuticals, Inc., a Kansas corporation (“Transferor”), the undersigned hereby certifies the following:
1.Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations);
2.    Transferor is not a disregarded entity as defined in Income Tax Regulations §1.1445‐2(b)(2)(iii);
3.    Transferor’s U.S. employer identification number is __________; and
4.    Transferor’s office address is ________________________________________.
Transferor understands that this certification may be disclosed to the Internal Revenue Service by Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.  Under penalty of perjury, I declare that I have examined this certificate and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of Transferor.
Dated as of __________, 20___.
	
		
	TRANSFEROR:
	 
Strategic Veterinary Pharmaceuticals, Inc., a Kansas corporation
By:    
Name:    
Its:    

NOTICE TO TRANSFEREE (BUYER):  YOU ARE REQUIRED BY LAW TO RETAIN THIS CERTIFICATE UNTIL THE END OF THE FIFTH TAX YEAR FOLLOWING THE TAX YEAR IN WHICH THE TRANSFER TAKES PLACE AND MAKE THE CERTIFICATE AVAILABLE TO THE INTERNAL REVENUE SERVICE IF REQUESTED TO DO SO DURING THAT PERIOD.

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Exhibit 10.2

EXHIBIT H
Employee List

-  .

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