Document:

csfl-ex101_6.htm

 

Exhibit 10.1

 

Employment Agreement

 

This Employment Agreement (this “Agreement”) is entered into effective as of this 28th day of April, 2016, by and between CenterState Banks, Inc., a Florida corporation (the “Corporation”), and Jennifer Idell (the “Executive”).

Whereas, the Executive is the Senior Vice President Chief Financial Officer and Corporate Secretary of the Corporation and Executive Vice President and Chief Financial Officer of CenterState Bank of Florida, N.A., a national banking association and wholly-owned subsidiary of the Corporation (the “Bank”), possessing unique skills, knowledge, and experience relating to the Corporation’s business, and the Executive has made and is expected to continue to make major contributions to the profitability, growth, and financial strength to the Corporation and affiliates.

Now Therefore, in consideration of these premises, the mutual covenants contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows.

Article 1
Employment

1.1Employment.  The Corporation hereby employs the Executive to serve as Senior Vice President Chief Financial Officer and Corporate Secretary of the Corporation and Executive Vice President and Chief Financial Officer of the Bank according to the terms and conditions of this Agreement and for the period stated in section 1.2.  The Executive shall serve under the direction of the President, and Chief Executive Officer of the Corporation and the Bank and the Corporation’s and the Bank’s boards of directors and in accordance with the Corporation’s and the Bank’s Bylaws and in accordance with the Corporation’s Articles of Incorporation and the Bank’s Articles of Association, as amended or restated from time to time.  The Executive shall serve the Corporation and the Bank faithfully, diligently, competently, and to the best of the Executive’s ability.  The Executive shall exclusively devote full working time, energy, and attention to the business of the Corporation and the Bank and to the promotion of the Corporation’s and the Bank’s interests throughout the term of this Agreement.  Without the written consent of the Corporation, the Executive shall not render services to or for any person, firm, bank, or other entity or organization in exchange for compensation, regardless of the form in which the compensation is paid and regardless of whether it is paid directly or indirectly to the Executive.  Nothing in this section 1.1 shall prevent the Executive from managing personal investments and affairs, provided that doing so does not interfere with the proper performance of the Executive’s duties and responsibilities under this Agreement.  All prior employment agreements and change in control agreements between the Executive and the Corporation and the Bank are hereby terminated and are of no further force or effect.  

1.2Term.  The initial term of employment shall be a period of three years, commencing on the effective date set forth above.  On the first anniversary of the effective date set forth above and on each anniversary thereafter, the Executive’s employment shall be extended automatically for one additional year unless the Corporation’s board of directors determines that the term shall not be extended.  If the board of directors determines not to extend the term, it shall promptly notify the Executive in writing.  If the board decides not to extend the term of employment, this Agreement shall nevertheless remain in force until the employment term expires.  The board’s decision not to extend the term of employment shall not – by itself – give the Executive any rights under this Agreement to claim an adverse change in position, compensation, or circumstances or otherwise to claim entitlement to severance benefits under Articles 4 or 5 of this Agreement.  References herein to the term of employment mean the initial term, as the same may be extended.

Article 2
Compensation

2.1Base Salary.  In consideration of the Executive’s performance of the obligations under this Agreement, the Corporation shall pay or cause to be paid to the Executive a salary at the annual rate of not less than $280,000, payable in installments in accordance with the Corporation’s regular pay practices.  The Executive’s salary shall be reviewed annually by the Corporation’s board of directors or by the board committee having jurisdiction over executive compensation.  In the discretion of the board or the committee having jurisdiction over executive compensation (x) the Executive’s salary may be increased to account for increases in the cost of living, but cost-of-living increases, if any, shall not occur more frequently than annually, and (y) the Executive’s salary also may be increased beyond the amount necessary to account for cost of living increases.  However, the Executive’s salary shall not be reduced.  The Executive’s salary, as the same may be increased from time to time, is referred to in this Agreement as the “Base Salary.”

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2.2Benefit Plans and Perquisites.  (a)  Benefit plans.  The Executive shall be entitled throughout the term of this Agreement to participate in any and all officer or employee compensation and benefit plans of the Corporation and the Bank in effect from time to time, including without limitation plans providing pension, medical, dental, disability, and group life benefits, including the Corporation’s or the Bank’s 401(k) Plan, and to receive any and all other fringe benefits provided from time to time, provided that the Executive satisfies the eligibility requirements for any such plans or benefits. 

(b)Reimbursement of business expenses.  Subject to guidelines issued from time to time by the Corporation and upon submission of documentation to support expense reimbursement in conformity with applicable requirements of federal income tax laws and regulations, the Executive shall be entitled to reimbursement for all reasonable business expenses incurred performing the obligations under this Agreement, including but not limited to all reasonable business travel and entertainment expenses incurred while acting at the request of or in the service of the Corporation and the Bank; and reasonable expenses for attendance at annual and other periodic meetings of trade associations.

(c)Vacation.  The Executive shall be entitled to paid annual vacation and sick leave in accordance with the policies established from time to time by the Corporation.

Article 3
Employment Termination

3.1Termination Because of Death or Disability.  (a)  Death.  The Executive’s employment shall terminate automatically at the Executive’s death.  If the Executive dies in active service to the Corporation, the Executive’s estate shall receive any sums due to the Executive as Base Salary and reimbursement of expenses through the end of the month in which death occurred, any bonus or Incentive Compensation earned through the date of death, including any unvested amounts awarded for previous years, and for twelve months after the Executive’s death the Corporation shall provide without cost to the Executive’s family continuing health care coverage under COBRA substantially identical to that provided for the Executive before death.

(b)Disability.  By delivery of written notice 30 days in advance to the Executive, the Corporation may terminate the Executive’s employment if the Executive is disabled.  For purposes of this Agreement the Executive shall be considered “disabled” if an independent physician selected by the Corporation and reasonably acceptable to the Executive or the Executive’s legal representative determines that, because of illness or accident, the Executive is unable to perform the Executive’s duties and will be unable to perform the Executive’s duties for a period of 90 consecutive days, and the Insurance Company that is providing the Executive’s disability insurance coverage concurs that the Executive is considered “disabled” pursuant to the terms and conditions of the insurance policy(s) in place contemplated in section 2.2 (a).  The Executive shall not be considered disabled, however, if the Executive returns to work on a full-time basis within 30 days after the Corporation gives notice of termination due to disability.  If the Executive’s employment terminates because of disability, the Executive shall receive the Base Salary earned through the date on which termination became effective, any reimbursement of expenses incurred through the date of termination, any unpaid bonus or Incentive Compensation earned through the date of termination, including any unvested amounts awarded for previous years,  any payments the Executive is eligible to receive under any disability insurance program in which the Executive participates, and such other benefits to which the Executive may be entitled under the Corporation’s and Bank’s benefit plans, policies, and agreements, or the provisions of this Agreement.

3.2Involuntary Termination with Cause.  The Corporation may terminate the Executive’s employment with Cause.  If the Executive’s employment terminates with Cause, the Executive shall receive the Base Salary through the date on which termination becomes effective and reimbursement of expenses to which the Executive is entitled when termination becomes effective.  The Executive shall not be deemed to have been terminated with Cause under this Agreement unless and until there is delivered to the Executive a copy of a resolution adopted at a meeting of the board of directors called and held for the purpose, which resolution shall (x) contain findings that in the board’s good faith opinion the Executive has committed an act constituting Cause, and (y) specify the particulars thereof.  For purposes of this Agreement “Cause” means any of the following –

	
 
	
(a)
	
gross negligence or gross neglect of duties to the Corporation or the Bank,

	
 
	
(b)
	
conviction of a felony or of a gross misdemeanor involving moral turpitude in connection with the Executive’s employment with the Corporation or the Bank, or

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(c)
	
fraud, disloyalty, dishonesty, or willful violation of any law or significant Corporation or Bank policy committed in connection with the Executive’s employment and resulting in a material adverse effect on the Corporation or the Bank. 

3.3Involuntary Termination Without Cause and Voluntary Termination with Good Reason.  With written notice to the Executive 90 days in advance, the Corporation may terminate the Executive’s employment without Cause.  Termination shall take effect at the end of the 90-day period.  With advance written notice to the Corporation as provided in clause (y), the Executive may terminate employment with Good Reason.  If the Executive’s employment terminates involuntarily without Cause or voluntarily but with Good Reason, the Executive shall be entitled to receive the Base Salary earned through the date of termination, any reimbursement of expenses incurred through the date of termination, any unpaid bonus earned through the date of termination, including any unvested amounts awarded for previous years, and such other benefits to which the Executive may be entitled under the Corporation’s and the Bank’s benefit plans, policies, and agreements, or the provisions of this Agreement.  In addition, the Executive shall be entitled to the benefits specified in Article 4 of this Agreement.  For purposes of this Agreement a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if the conditions of the safe-harbor definition of good reason contained in Internal Revenue Code section 409A are satisfied, as the same may be amended from time to time.  References in this Agreement to Internal Revenue Code section 409A include rules, regulations, and guidance of general application issued by the Department of the Treasury under section 409A.  For purposes of clarification and without intending to affect the foregoing reference to section 409A for the definition of Good Reason, as of the Employment Date the safe-harbor definition of separation from service for good reason in Rule 1.409A-1(n)(2)(ii) would provide as follows –

(x)a voluntary termination by the Executive shall be considered a voluntary termination with Good Reason if any of the following occur without the Executive’s advance written consent, and the term Good Reason shall mean the occurrence of any of the following without the Executive’s advance written consent –

	
 
	
1)
	
a diminution of the Executive’s Base Salary,

	
 
	
2)
	
a material diminution of the Executive’s authority, duties, or responsibilities,

	
 
	
3)
	
a material diminution in the authority, duties, or responsibilities of the supervisor to whom the Executive is required to report,

	
 
	
4)
	
a material diminution in the budget (if any) over which the Executive retains authority,

	
 
	
5)
	
a material change in the geographic location at which the Executive must perform services for the Corporation or the Bank, or

	
 
	
6)
	
any other action or inaction that constitutes a material breach by the Corporation of this Agreement.

(y)the Executive must give notice to the Corporation of the existence of one or more of the conditions described in clause (x) within 90 days after the initial existence of the condition, and the Corporation shall have 30 days thereafter to remedy the condition.  In addition, the Executive’s voluntary termination because of the existence of one or more of the conditions described in clause (x) must occur within 24 months after the initial existence of the condition.

3.4Voluntary Termination by the Executive Without Good Reason.  If the Executive terminates employment voluntarily but without Good Reason, the Executive shall receive the Base Salary earned through the date of termination and any reimbursement of expenses incurred through the date of termination.

3.5Termination Generally.  If at employment termination the Executive is serving as a director of the Corporation and/or the Bank, the Executive shall be deemed to have resigned as a director effective immediately after termination, regardless of whether the Executive submits a formal, written resignation as director.  All files, records, documents, manuals, books, forms, reports, memoranda, studies, data, calculations, recordings or correspondence, in whatever form they may exist, and all copies, abstracts and summaries of the foregoing, and all physical items related to the business of the Corporation and the Bank, their affiliates, and their respective directors and officers, whether of a public nature or not, and whether prepared by Executive or not, are and at employment termination shall remain the exclusive property of the Corporation and the Bank, and without the Corporation’s or the Bank’s advance written consent shall not be removed from their premises except as required in the course of providing services under this Agreement, and at termination shall be promptly returned by the Executive to the Corporation and the Bank.

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Article 4
Severance Compensation

4.1Cash Severance after Termination Without Cause or Termination with Good Reason.  If the Executive’s employment terminates involuntarily but without Cause or voluntarily but with Good Reason, on the first day of the seventh month after the month in which the Executive’s employment terminates the Corporation shall pay to the Executive in a single lump sum cash without discount for the time value of money in an amount equal to one times the sum of (x) the Executive’s Base Salary, and (y) the highest annual bonus earned by the Executive during the prior three years (including the full value of the annual award, whether payable in cash or another form, earned under the Annual Incentive Plan or similar plan) immediately preceding the year in which the employment of the Executive terminates.  The Corporation and the Executive acknowledge and agree that the compensation and benefits under this section 4.1 shall not be payable if, on the date of termination, compensation and benefits are payable or shall have been paid to the Executive under Article 5 of this Agreement.

4.2Post-Termination Insurance Coverage.  (a) Subject to section 4.2(b), if the Executive’s employment terminates involuntarily but without Cause or voluntarily but with Good Reason, the Corporation shall continue or cause to be continued at the Corporation’s expense and on behalf of the Executive and the Executive’s dependents and beneficiaries medical and dental insurance coverage as in effect during and in accordance with the same schedule prevailing in the 12 months preceding the date of the Executive’s termination.  The medical and dental insurance benefits provided by this section 4.2(a) shall be reduced if the Executive obtains medical or dental insurance benefits through another entity, or eliminated entirely if the other entity’s insurance benefits are equivalent or superior to the benefits provided under this section 4.2(a).  If the insurance benefits are reduced, they shall be reduced by an amount such that the Executive’s aggregate insurance benefits for the period specified in this section 4.2(a) are equivalent to the benefits to which the Executive would have been entitled had the Executive not obtained medical or dental insurance benefits through another entity.  The medical and dental insurance coverage shall continue until the first to occur of (w) the Executive’s return to employment with the Corporation or another entity providing equivalent or superior insurance benefits, (x) the Executive’s attainment of age 65, (y) the Executive’s death, or (z) the end of the term remaining under this Agreement when the Executive’s employment terminates.  This section 4.2 shall not be interpreted to limit any benefits to which the Executive or the Executive’s dependents or beneficiaries may be entitled under any of the Corporation’s employee benefit plans, agreements, programs, or practices after the Executive’s employment termination, including without limitation retiree medical benefits.

(b)If (x) under the terms of the applicable policy or policies for the insurance benefits specified in section 4.2(a) it is not possible to continue the Executive’s coverage or (y) when employment termination occurs the Executive is a specified employee within the meaning of section 409A of the Internal Revenue Code of 1986, if any of the continued insurance benefits specified in section 4.2(a) would be considered deferred compensation under section 409A, and finally if an exemption from the six-month delay requirement of section 409A(a)(2)(B)(i) is not available for that particular insurance benefit, instead of continued insurance coverage under section 4.2(a) the Corporation shall pay to the Executive in a single lump sum an amount in cash equal to the present value of the Corporation’s projected cost to maintain that particular insurance benefit had the Executive’s employment not terminated, assuming continued coverage for the lesser of the number of months remaining in the term of this Agreement or the number of months until the Executive attains age 65.  The lump-sum payment shall be made 30 days after employment termination or, if section 4.2(b) applies and a six-month delay is required under Internal Revenue Code section 409A, on the first day of the seventh month after the month in which the Executive’s employment terminates.

4.3Release.  The Executive shall be entitled to no compensation or other benefits under this Article 4 unless (x) within 90 days after the Executive’s employment termination the Executive shall have entered into a release in form satisfactory to the Executive, the Corporation and the Bank acknowledging the Corporation’s and the Executive’s remaining obligations and discharging both parties, as well as the Corporation’s and Bank’s officers, directors, and employees for their actions for or on behalf of the Corporation, from any other claims or obligations arising out of the Executive’s employment by the Corporation and the Bank, including the circumstances of the Executive’s employment termination, and (y) within that 90-day period the release shall have become irrevocable, final, and binding on the Executive under all applicable law, with expiration of all applicable revocation periods.  If the final day of the 90-day period for execution and finality of a liability release occurs in the taxable year after the year in which the Executive’s employment termination occurs, the benefits to the Executive under this Article 4 shall be payable in the taxable year in which the 90-day period ends and shall not be paid in the taxable year in which employment termination occurs.  Nothing in this section 4.3 is intended to abrogate the Executive’s review and revocation rights under the Older Workers’ Benefit Protection Act that may be included in any such release, and the 90-day period shall be extended if necessary to permit Executive to exercise such rights.  The non-compete and other 

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covenants contained in Article 7 of this Agreement are not contingent on the Executive entering into a release under this section 4.3 and shall be effective regardless of whether the Executive enters into the release. 

Article 5
Change in Control

5.1Change in Control Benefits.  If (i) a Change in Control occurs after the Employment Date and during the term of this Agreement, and (ii) within 12 months following such Change in Control, either the Corporation terminates the Executive’s employment without Cause or the Executive terminates the Executive’s employment with Good Reason, then the Corporation shall promptly make or cause to be made a lump-sum payment to the Executive in an amount in cash equal to two and one-half (21/2) times the sum of (x) the Executive’s Base Salary, and (y) the highest annual bonus earned by the Executive during the prior three years (including the full value of the annual award, whether payable in cash or another form, earned under the Annual Incentive Plan or similar plan) immediately preceding the year in which the Change in Control occurs (the “Change in Control Payment”).  The Change in Control Payment payable to the Executive hereunder shall not be reduced to account for the time value of money or discounted to present value.  If the Executive receives a Change in Control Payment under this section 5.1 the Executive shall not be entitled to any additional severance benefits under section 4.1 of this Agreement after employment termination.  The Executive shall be entitled to benefits under this section 5.1 on no more than one occasion during the term of this Agreement.

5.2Change in Control Defined.  For purposes of this Agreement “Change in Control” means a change in control as defined in Internal Revenue Code section 409A, as the same may be amended from time to time.  For purposes of clarification and without intending to affect the foregoing reference to section 409A for the definition of Change in Control, as of the Employment Date a Change in Control as defined in Rule 1.409A-3(i)(5) would provide as follows –

(a)Change in ownership: a change in ownership of the Corporation occurs on the date any one person or group accumulates ownership of Corporation stock constituting more than 50% of the total fair market value or total voting power of Corporation stock, or

(b)Change in effective control: (x) any one person or more than one person acting as a group acquires within a 12-month period ownership of Corporation stock possessing 30% or more of the total voting power of Corporation stock, or (y) a majority of the Corporation’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed in advance by a majority of the Corporation’s board of directors, or

(c)Change in ownership of a substantial portion of assets: a change in ownership of a substantial portion of the Corporation’s assets occurs if in a 12-month period any one person or more than one person acting as a group acquires from the Corporation assets having a total gross fair market value equal to or exceeding 40% of the total gross fair market value of all of the Corporation’s assets immediately before the acquisition or acquisitions.  For this purpose, gross fair market value means the value of the Corporation’s assets, or the value of the assets being disposed of, determined without regard to any liabilities associated with the assets.

Article 6
Confidentiality and Creative Work

6.1Non-disclosure.  The Executive covenants and agrees not to reveal to any person, firm, or Corporation any confidential information of any nature concerning the Corporation, the Bank, their respective business, or anything connected therewith.  As used in this Article 6, the term “confidential information” means all of the Corporation’s and the Bank’s and their affiliates’ confidential and proprietary information and trade secrets in existence on the date hereof or existing at any time during the term of this Agreement, including but not limited to –

(a)the whole or any portion or phase of any business plans, financial information, purchasing data, supplier data, accounting data, or other financial information,

(b)the whole or any portion or phase of any research and development information, design procedures, algorithms or processes, or other technical information,

(c)the whole or any portion or phase of any marketing or sales information, sales records, customer lists, customer information, employee lists, employee information, financial products and services, financial products and services pricing, financial information and projections, or other sales information, and

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(d)trade secrets, as defined from time to time by the laws of the State of Florida. 

However, confidential information excludes information that – as of the date hereof or at any time after the date hereof – is published or disseminated without obligation of confidence or that becomes a part of the public domain (x) by or through action of the Corporation, or (y) otherwise than by or at the direction of the Executive.  This section 6.1 does not prohibit disclosure required by an order of a court having jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by the Executive in the ordinary course of business and within the scope of the Executive’s authority.

6.2Return of Materials.  The Executive agrees to deliver or return to the Corporation and the Bank upon termination, upon expiration of this Agreement, or as soon thereafter as possible, all written information and any other similar items furnished by the Corporation and the Bank or prepared by the Executive in connection with the Executive’s services hereunder.  The Executive will retain no copies thereof after termination of this Agreement or termination of the Executive’s employment.

6.3Creative Work.  The Executive agrees that all creative work and work product, including but not limited to all technology, business management tools, processes, software, patents, trademarks, and copyrights developed by the Executive during the term of this Agreement, regardless of when or where such work or work product was produced, constitutes work made for hire, all rights of which are owned by the Corporation and the Bank.  The Executive hereby assigns to the Corporation and the Bank all rights, title, and interest, whether by way of copyrights, trade secret, trademark, patent, or otherwise, in all such work or work product, regardless of whether the same is subject to protection by patent, trademark, or copyright laws.  This section 6.3 shall not be construed to require assignment to the Corporation and the Bank of the Executive’s right, title, and interest in creative work and work product, including but not limited to inventions, patents, trademarks, and copyrights, developed by the Executive entirely on the Executive’s own time and without using the Corporation’s or the Bank’s equipment, supplies, facilities, or trade secrets unless the creative work or work product (x) relates to the Corporation’s or the Bank’s business or actual or demonstrably anticipated research or development or (y) results from any work performed by the Executive for the Corporation or the Bank.  However, to enable the Corporation and the Bank to determine the rights of the Corporation and the Bank and the Executive in any creative work and work product developed by the Executive that the Executive considers nonassignable under this section 6.3, including but not limited to inventions, patents, trademarks, and copyrights, the Executive shall during the term of this Agreement timely report to the Corporation and the Bank all such creative work and work product.

6.4Injunctive Relief.  The Executive hereby acknowledges that the enforcement of this Article 6 is necessary to ensure the preservation, protection, and continuity of the business, trade secrets, and goodwill of the Corporation and the Bank, and that the restrictions set forth in Article 6 are reasonable in terms of time, scope, territory, and in all other respects.  The Executive acknowledges that it is impossible to measure in money the damages that will accrue to the Corporation and the Bank if the Executive fails to observe the obligations imposed by Article 6.  Accordingly, if the Corporation and the Bank institutes an action to enforce the provisions hereof, the Executive hereby waives the claim or defense that an adequate remedy at law is available to the Corporation and the Bank and the Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists.  If there is a breach or threatened breach by the Executive of the provisions of Article 6, the Corporation and the Bank shall be entitled to an injunction without bond to restrain the breach or threatened breach, and the prevailing party in any the proceeding shall be entitled to reimbursement for all costs and expenses, including reasonable attorneys’ fees.  The existence of any claim or cause of action by the Executive against the Corporation or the Bank shall not constitute and shall not be asserted as a defense by the Executive to enforcement of Article 6.

6.5Affiliates’ Confidential Information is Covered.  For purposes of this Agreement the term “affiliate” includes the Corporation and any entity that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with the Corporation or the Bank.

6.6Survival of Obligations.  The Executive’s obligations under Article 6 shall survive employment termination regardless of the manner in which termination occurs and shall be binding upon the Executive’s heirs, executors, and administrators.

Article 7
Competition After Employment Termination

7.1Restrictions on the Executive’s Post-Employment Activities.  The restrictions in this Article 7 have been negotiated, presented to and accepted by the Executive contemporaneous with the offer and acceptance by the Executive of 

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this Agreement.  The Corporation’s decision to enter into this Agreement is conditioned upon the Executive’s agreement to be bound by the restrictions contained in this Article 7.  This Article 7 shall be void if a Change in Control occurs before the Executive’s employment termination.  For purposes of this Article 7 the term “Corporation” includes not only the Corporation but also the Bank. 

(a)Promise of no solicitation.  The Executive promises and agrees that during the Restricted Period (as defined below) the Executive shall:

1.not directly or indirectly solicit or attempt to solicit any Customer (as defined below) to accept or purchase Financial Products or Services (as defined below) of the same nature, kind, or variety as provided to the Customer by the Corporation during the two years immediately before the Executive’s employment termination with the Corporation,

2.not directly or indirectly influence or attempt to influence any Customer, joint venturer, or other business partner of the Corporation to alter that person or entity’s business relationship with the Corporation in any respect, and

3.not accept the Financial Products or Services business of any Customer or provide Financial Products or Services to any Customer on behalf of anyone other than the Corporation.

(b)Promise of no competition.  Except where the employment of the Executive is terminated pursuant to section 3.3 of this Agreement, the Executive promises and agrees that during the Restricted Period the Executive shall not become employed by or serve as a director, partner, consultant, agent, or owner of 5% or more of the outstanding stock of or contractor to any entity providing Financial Products or Services that is located in or conducts business in the Restricted Territory.

(c)Promise of no raiding/hiring.  The Executive promises and agrees that during the Restricted Period the Executive shall not solicit or attempt to solicit and shall not encourage or induce in any way any employee, joint venturer, or business partner of the Corporation to terminate an employment or contractual relationship with the Corporation.  The Executive agrees that the Executive shall not hire any person employed by Corporation during the two-year period before the Executive’s employment termination with the Corporation or any person employed by the Corporation during the Restricted Period.

(d)Promise of no disparagement.  The Executive promises and agrees that during the Restricted Period the Executive shall not cause statements to be made (whether written or oral) that reflect negatively on the business reputation of the Corporation.  The Corporation likewise promises and agrees that during the Restricted Period the Corporation shall not cause statements to be made (whether written or oral) that reflect negatively on the reputation of the Executive.  Nothing herein is intended to restrict the Executive or the Corporation from testifying truthfully in response to any lawfully served subpoena or other legal process.

(e)Acknowledgment.  The Executive and the Corporation acknowledge and agree that the provisions of this Article 7 have been negotiated and carefully determined to be reasonable and necessary for the protection of legitimate business interests of the Corporation.  Both parties agree that a violation of Article 7 is likely to cause immediate and irreparable harm that will give rise to the need for court ordered injunctive relief.  In the event of a breach or threatened breach by the Executive of any provision of this Agreement, the Corporation shall be entitled to obtain an injunction without bond restraining the Executive from violating the terms of this Agreement and to institute an action against the Executive to recover damages from the Employee for such breach.  These remedies for default or breach are in addition to any other remedy or form of redress provided under Florida law.  The parties acknowledge that the provisions of this Article 7 survive termination of the employment relationship, but the provisions of this Article 7 shall be null and void if a Change in Control occurs before employment termination.  The parties agree that if any of the provisions of this Article 7 are deemed unenforceable by a court of competent jurisdiction, that such provisions may be stricken as independent clauses by the court in order to enforce the remaining territory restrictions and that the intent of the parties is to afford the broadest restriction on post-employment activities as set forth in this Agreement.  Without limiting the generality of the foregoing, without limiting the remedies available to the Corporation for violation of this Agreement, and without constituting an election of remedies, if the Executive violates any of the terms of Article 7 the Executive shall forfeit on the Executive’s own behalf and that of beneficiary(ies) any rights to and interest in any severance or other benefits under this Agreement or other contract the Executive has with the Corporation or the Corporation.

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(f)Definitions:  1.“Restricted Period” as used herein means the 24-month period immediately after the Executive’s termination and/or separation of employment with the Corporation, regardless of the reason for termination and/or separation.  The Restricted Period shall be extended in an amount equal to any time period during which a violation of Article 7 of this Agreement is proven. 

2.“Restricted Territory” as used herein means Polk County and contiguous counties in Florida.

3.“Customer” as used herein means any individual, joint venturer, entity of any sort, or other business partner of the Corporation, with, for or to whom the Corporation has provided Financial Products or Services during the last two years of the Executive’s employment with the Corporation; or any individual, joint venturer, entity of any sort, or business partner whom the Corporation has identified as a prospective customer of Financial Products or Services within the last two years of the Executive’s employment with the Corporation.

4.“Financial Products or Services” as used herein means any product or service that a financial institution or a financial holding company could offer by engaging in any activity that is financial in nature or incidental to such a financial activity under section 4(k) of the Bank Holding Company Act of 1956 and that is offered by the Corporation or an affiliate on the date of the Executive’s employment termination, including but not limited to banking activities and activities that are closely related and a proper incident to banking, or other products or services of the type of which the Executive was involved during the Executive’s employment with the Corporation.

Article 8
Miscellaneous

8.1Successors and Assigns.  (a)  This Agreement is binding on successors.  This Agreement shall be binding upon the Corporation and any successor to the Corporation, including any persons acquiring directly or indirectly all or substantially all of the business or assets of the Corporation by purchase, merger, consolidation, reorganization, or otherwise.  But this Agreement and the Corporation’s obligations under this Agreement are not otherwise assignable, transferable, or delegable by the Corporation.  By agreement in form and substance satisfactory to the Executive, the Corporation shall require any successor to all or substantially all of the business or assets of the Corporation expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Corporation would be required to perform had no succession occurred.

(b)This Agreement is enforceable by the Executive’s heirs.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, and legatees.

(c)This Agreement is personal in nature and is not assignable.  This Agreement is personal in nature.  Without written consent of the other parties, no party shall assign, transfer, or delegate this Agreement or any rights or obligations under this Agreement except as expressly provided herein.  Without limiting the generality or effect of the foregoing, the Executive’s right to receive payments hereunder is not assignable or transferable, whether by pledge, creation of a security interest, or otherwise, except for a transfer by the Executive’s will or by the laws of descent and distribution.  If the Executive attempts an assignment or transfer that is contrary to this section 8.1, the Corporation shall have no liability to pay any amount to the assignee or transferee.

8.2Governing Law, Jurisdiction and Forum.  This Agreement shall be construed under and governed by the internal laws of the State of Florida, without giving effect to any conflict of laws provision or rule (whether of the State of Florida or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida.  By entering into this Agreement, the Executive acknowledges that the Executive is subject to the jurisdiction of both the federal and state courts in the State of Florida.  Any actions or proceedings instituted under this Agreement shall be brought and tried solely in courts located in Polk County, Florida or in the federal court having jurisdiction in Winter Haven, Florida.  The Executive expressly waives the right to have any such actions or proceedings brought or tried elsewhere.

8.3Entire Agreement.  This Agreement sets forth the entire agreement of the parties concerning the employment of the Executive.  Any oral or written statements, representations, agreements, or understandings made or entered into prior to or contemporaneously with the execution of this Agreement are hereby rescinded, revoked, and rendered null and void.

8

 

 

8.4Notices.  Any notice under this Agreement shall be deemed to have been effectively made or given if in writing and personally delivered, delivered by mail properly addressed in a sealed envelope, postage prepaid by certified or registered mail, delivered by a reputable overnight delivery service, or sent by facsimile.  Unless otherwise changed by notice, notice shall be properly addressed to the Executive if addressed to the most current address of the Executive in the personnel records of the Corporation at the time of the delivery of such notice, and properly addressed to the Corporation if addressed to CenterState Corporations, Inc., 42745 U.S. Highway 27, Davenport, Florida 33837, Attention: President and Chief Executive Officer. 

8.5Severability.  If there is a conflict between any provision of this Agreement and any statute, regulation, or judicial precedent, the latter shall prevail, but the affected provisions of this Agreement shall be curtailed and limited solely to the extent necessary to bring them within the requirements of law.  If any provision of this Agreement is held by a court of competent jurisdiction to be indefinite, invalid, void or voidable, or otherwise unenforceable, the remainder of this Agreement shall continue in full force and effect unless that would clearly be contrary to the intentions of the parties or would result in an injustice.

8.6Captions and Counterparts.  The captions in this Agreement are solely for convenience.  The captions do not define, limit, or describe the scope or intent of this Agreement.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

8.7Amendment and Waiver.  This Agreement may not be amended, released, discharged, abandoned, changed, or modified except by an instrument in writing signed by each of the parties hereto.  The failure of any party hereto to enforce at any time any of the provisions of this Agreement shall not be construed to be a waiver of any such provision or affect the validity of this Agreement or any part thereof or the right of any party thereafter to enforce each and every such provision.  No waiver or any breach of this Agreement shall be held to be a waiver of any other or subsequent breach.

8.8FDIC Part 359 Limitations.  Despite any contrary provision within this Agreement, any payments made to the Executive under this Agreement, or otherwise, shall be subject to compliance with 12 U.S.C. 1828 and FDIC Regulation 12 CFR Part 359, Golden Parachute Indemnification Payments, and any other regulations or guidance promulgated thereunder.

8.9Consultation with Counsel and Interpretation of this Agreement.  The Executive has had the assistance of counsel of the Executive’s choosing in the negotiation of this Agreement or the Executive has chosen not to have the assistance of counsel.  Both parties hereto having participated in the negotiation and drafting of this Agreement, they hereby agree that there shall not be strict interpretation against either party in any review of this Agreement in which interpretation of the Agreement is an issue.

8.10Compliance with Internal Revenue Code Section 409A.  The Corporation and the Executive intend that their exercise of authority or discretion under this Agreement shall comply with section 409A of the Internal Revenue Code of 1986.  If when the Executive’s employment terminates the Executive is a specified employee, as defined in section 409A of the Internal Revenue Code of 1986, and if any payments under this Agreement, including Articles 4 or 5, will result in additional tax or interest to the Executive because of section 409A, then despite any provision of this Agreement to the contrary the Executive shall not be entitled to the payments until the earliest of (x) the date that is at least six months after termination of the Executive’s employment for reasons other than the Executive’s death, (y) the date of the Executive’s death, or (z) any earlier date that does not result in additional tax or interest to the Executive under section 409A.  As promptly as possible after the end of the period during which payments are delayed under this provision, the entire amount of the delayed payments shall be paid to the Executive in a single lump sum.  If any provision of this Agreement does not satisfy the requirements of section 409A, the provision shall be applied in a manner consistent with those requirements despite any contrary provision of this Agreement.  If any provision of this Agreement would subject the Executive to additional tax or interest under section 409A, the Corporation shall reform the provision.  However, the Corporation shall maintain to the maximum extent practicable the original intent of the applicable provision without subjecting the Executive to additional tax or interest, and the Corporation shall not be required to incur any additional compensation expense as a result of the reformed provision.  References in this Agreement to section 409A of the Internal Revenue Code of 1986 include rules, regulations, and guidance of general application issued by the Department of the Treasury under Internal Revenue Code section 409A.

 

 

9

 

 

 

In Witness Whereof, the parties have executed this Employment Agreement as of the date first written above.

	
Executive
	
 
	
CenterState Banks, Inc.

	
/s/ Jennifer Idell                              
	
 
	
 

By:
	
/s/ John C. Corbett

	
Jennifer Idell
	
 
	
 
	
John C. Corbett

	
 
	
 
	
 
	
President and Chief Executive Officer

 

 

 

 

10cemp-ex1036_681.htm

 

Exhibit 10.36

Execution Copy

 

* Portions of this exhibit marked [*] are requested to be treated confidentially.

 

												
	
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
	
1. CONTRACT ID CODE

 
	
PAGE       OF       PAGES

	
1
	
33

	
2. AMENDMENT/MODIFICATION NO.

   0015
	
3. EFFECTIVE DATE

See Block 16C
	
4. REQUISITION/PURCHASE REQ. NO.

OS171155
	
5. PROJECT NO.  (If applicable)

 

	
6. ISSUED BY
	
CODE   
	
 ASPR-BARDA
	
7. ADMINISTERED BY (If other than Item 6)
	
CODE
	
 ASPR-BARDA01

	
ASPR-BARDA

200 Independence Ave., S.W.

Room 640-G

Washington DC 20201

 
	
ASPR-BARDA

330 Independence Ave., SW, Rm G644

Washington DC 20201

	
8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and ZIP Code)

CEMPRA PHARMACEUTICALS, INC. 1425009

CEMPRA PHARMACEUTICALS, INC.

BUILDING 2 QUADRANGLE

6320 QUADRANGLE DRIVE, SUITE 360

CHAPEL HILL NC 27517
	
 
	
T
	
9A. AMENDMENT OF SOLICITATION NO.

 

	
9B. DATED (SEE ITEM 11) 

 

	
T
	
10A. MODIFICATION OF CONTRACT/ORDER NO. 

HHSO100201300009C

	
10B. DATED (SEE ITEM 13) 

05/24/2013

	
CODE      1425009
	
FACILITY CODE

 

11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

	
£
	
The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offers       £ is extended,       £ is not extended. 

Offers must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended, by one of the following methods: (a) By completing items 8 and 15, and returning         copies of the amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted; or (c) By separate letter or telegram which includes a reference to the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment your desire to change an offer already submitted, such change may be made by telegram or letter, provided each telegram or letter makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified.

	
12.
	
ACCOUNTING AND APPROPRIATION DATA (If required)                                Net Increase:                                 $25,521,725.48

2016.1992016.25103

13. THIS ITEM ONLY APPLIES TO MODIFICATION OF CONTRACTS/ORDERS. IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.

 

		
	
CHECK ONE
	
A.  THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN ITEM 10A.

 

	
 

	
 
	
B.  THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation date, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(b).

 

	
 
	
C.  THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:

 

	
X
	
D.  OTHER (Specify type of modification and authority)

Bilateral: Mutual Agreement of the Parties and FAR Clause 52.217-9

 

E. IMPORTANT: Contractor     £ is not,     T is required to sign this document and return    0    copies to the issuing office.

	
14.
	
DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings, including solicitation/contract subject matter where feasible.)

Tax ID Number: 20-3905814 

DUNS Number: 623713034 

See Attached Pages. 

Delivery: 05/23/2018 

Delivery Location Code: HHS 

HHS 

200 Independence Avenue, SW 

Washington DC 20201 US 

Appr. Yr.: 2016 CAN: 1992016 Object Class: 25103 

FOB: Destination 

Continued ...

Except as provided herein, all terms and conditions of the document referenced in Item 9A or 10A, as heretofore changed, remains unchanged and in full force and effect.

 

	
15A. NAME AND TITLE OF SIGNER (Type or print)

  
	
16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print) 

[*]

 

	
15B. CONTRACTOR/OFFEROR

 

(Signature of person authorized to sign)
	
15C. DATE SIGNED
	
16B. UNITED STATES OF AMERICA

 

(Signature of Contracting Officer)

 
	
16C. DATE SIGNED

 

	
NSN 7540-01-152-8070
	
 
	
STANDARD FORM 30  (REV. 10-83)

	
Previous edition unusable
	
 
	
Prescribed by GSA 

	
 
	
 
	
FAR (48 CFR) 53.243

 

 

 

	
CONTINUATION SHEET
	
REFERENCE NO OF DOCUMENT BEING CONTINUED
	
PAGE       OF       

	
HHSO100201300009C/0015
	
2
	
   33

	
NAME OF OFFEROR OR CONTRACTOR

	
CEMPRA PHARMACEUTICALS, INC. 1425009

	
ITEM NO.

(A)
	
SUPPLIES/SERVICES

(B)
	
QUANTITY

(C)
	
UNIT

(D)
	
UNIT PRICE

(E)
	
AMOUNT

(F)

	
4
	
Period of Performance: 05/24/2013 to 05/23/2018 

Change Item 4 to read as follows (amount shown is the obligated amount): 

Phase 2/3 Clinical Evaluation and Phase 1 Suspension Relative Bioavailability Study. 

Reports and Other Data Deliverables.
	
 
	
 
	
 
	
25,521,725.48 

 

 

	
NSN 7540-01-152-8067
	
 
	
OPTIONAL FORM 336  (4-86)

	
 
	
 
	
Sponsored by GSA 

	
 
	
 
	
FAR (48 CFR) 53.110

 

 

 

 

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

A. The purpose of this modification is for the Government to bilaterally modify the Statement of Work requirements for Option 3 CLIN 0004 and exercise Option 3 CLIN 0004 of the contract in accordance with the terms and conditions of both Option 3 CLIN 0004 and the contract. The Government and the Contractor hereby bilaterally modify this contract for the purposes of both adding and exercising the total amount of Option 3 CLIN 0004 as follows: 

Under, ARTICLE B.3. OPTION PRICES, Option 3, CLIN 0004 is hereby modified as follows:

	
 
	
1.
	
Option 3, CLIN 0004, is a cost-sharing CLIN. Monies shall be provided for the total cost of performance from the Department of Health and Human Services, and the Contractor, Cempra Pharmaceuticals, Incorporated. 

	
 
	
2.
	
The Government shall provide monies for Option 3, CLIN 0004 in an amount not to exceed $25,521,725.48. The total amount obligated by the Government for Option 3, CLIN 0004 shall not exceed the Total Estimated Cost of $25,521,725.48 and the Government will not be responsible for any Contractor incurred costs that exceed this amount under Option 3, CLIN 0004 unless a modification to the contract is signed by the Contracting Officer which expressly increases this amount. The Contractor's share for Option 3, CLIN 0004 is estimated at $[*]. 

	
 
	
3.
	
For Option 3, CLIN 0004, the Contractor shall maintain records of all contract costs (including costs claimed by the Contractor as being its share) and such records shall be subject to the Audit and Records-Negotiation and Final Decisions on Audit Findings clauses of the General Clauses. 

	
 
	
4.
	
For Option 3, CLIN 0004, costs contributed by the Contractor shall not be charged to the Government under any other contract, grant, or cooperative agreement (including allocation to other grants, contracts, or cooperative agreements as part of an independent research and development program). The Contractor shall report the organization's share of the costs expended by category, on the Financial Report, as referenced in the CONTRACT FINANCIAL REPORT Article in SECTION G of this contract. 

	
 
	
5.
	
The following clause contained in Article I.1, Section I CONTRACT CLAUSES is applicable ONLY to Option 3, CLIN 0004: 

 

			
	
FAR Clause 

No.

 

52.216-12
	
Date

 

 

Apr 1984
	
Title

 

 

Cost Sharing Contract – no fee (Applicable to Option 3, CLIN 0004 ONLY)

 

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

 

						
	
CLIN
	
Estimated 

Period of Performance
	
Supplies/Services
	
Total 

Estimated

USG Cost
	
Total 

Estimated

Cempra

Cost Sharing

 
	
Total 

Estimated 

Cost

	
0004
	
29 February 2016 

through 23 May 2018.
	
Phase 2/3 Clinical Evaluation and Phase 1 Suspension Relative Bioavailability Study. 

 

Reports and Other Data Deliverables.
	
$25,521,725.48
	
$[*]
	
$[*]

1. This modification also results in an increase in the total amount of the contract From $34,704,809.62 By $25,521,725.48 To $60,226,535.10 as well as the following: 

Total Estimated Cost of the Contract: From $32,499,469.46 By $25,521,725.48 To $58,021,194.94.

No Change to the Total Fixed Fee of the Contract of $2,205,340.16.

Total Estimated Cost Plus Fixed Fee of the Contract: From $34,704,809.62 By $25,521,725.48 To $60,226,535.10.

2. In Block 14 of the SF 26, the following CAN Number is added: Appropriation Year: 2016, Object Class: 25103, CAN# 1992016 $25,521,725.48 

3. In Block 15G of the SF 26, the amount of $34,704,809.62 is hereby changed to $60,226,535.10.

4. The Government and the Contractor bilaterally modify Attachment 1, Statement of Work dated 16 October 2014, under PART III, LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS, SECTION J -LIST OF ATTACHMENTS for the purposes of incorporating additional Regulatory Activities, Formulation Studies, Pre-Clinical Manufacturing, Pilot Scale Manufacturing and Stability Studies and Analytical Methods tasks as well as a Phase 1 Suspension Relative Bioavailability Study under Option 3 CLIN 0004 that are within the general scope of the contract and are required for both the full completion of Option 3 CLIN 0004 and also are required per recent FDA Guidance. As such. Attachment 1, Statement of Work dated 16 October 2014, under PART III, LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS, SECTION J - LIST OF ATTACHMENTS is hereby deleted and replaced with the attached Statement of Work dated 16 January 2015 (27 Pages attached herein). The efforts within Option 3 CLIN 0004 that involve clinical human trials/studies and non-clinical animal studies cannot be performed until the receipt and approval of all required Protocols by BARDA inclusive of all IRB, OHRP approvals and any required Ethics Approvals for any clinical trials/studies and any required approved OLAW Assurances and IIA approvals from OLAW for any non-clinical animal studies. 

 

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

5. Under Section F.2 Deliverables, 3. Contract WBS Milestones & Related Deliverables the following attached Milestone 11 hereby replaces the current Milestone 11 under Option 3, CLIN 0004 and the following attached Milestone 15, Milestone 16 and Milestone 17 are hereby added under Option 3, CLIN 0004, (See Attached Page).

6. Under Article I.1, Section I Contract Clauses of the contract, the asterisk associated with HHSAR 352.231-70 Salary Rate Limitation (Aug 2012) is deleted and replaced with the following:

The provisions set forth by this clause will only apply if and when any funds are obligated from HHS funding appropriated in the 2012, 2013, 2014, 2015 and 2016 Government Fiscal Years.

7. Article B.4. Provisions Applicable to Direct Costs, under b. Travel Costs, under 1., the following paragraph ONLY is hereby deleted and replaced with the following:

If, pursuant to FAR Clause 52.217-9 (Option to Extend the Term of the Contract), the Government exercises an option, travel costs for each CLIN shall not exceed the following schedule:

Option 1 (CLIN 0002) - $[*]

Option 2 (CLIN 0003) - $[*]

Option 3 (CLIN 0004) - $[*] (BARDA Share which excludes Cempra's portion of travel costs of $[*] for this Cost Share CLIN)

Option 4 (CLIN 0005) - $[*]

8. The total amount, scope and period of performance of all other CLIN(s) that are currently being performed under the contract remain unchanged. This modification does not exercise any unexercised Option CLINs under the contract and does not authorize any performance of efforts under any unexercised Option CLINs under the contract. In addition, the total amount, scope and period of performance of all unexercised Option CLINs under the contract remain unchanged.

B. This is a bilateral modification. All other terms and conditions remain unchanged. 

 

 

 

	
3.
	
STATEMENT OF WORK 

	
3.1
	
Preamble

Independently and not as an agent of the Government, the Contractor shall be required to furnish all the necessary services, qualified personnel, material, equipment, and facilities, not otherwise provided by the Government, as needed to perform the Statement of Work submitted in response to Broad Agency Announcement (BAA) BARDA CBRN BAA-12-100-SOL-000011.

The Government reserves the right to modify the milestones, progress, schedule, budget, or product to add or delete products, process, or schedule as need may arise. Because of the nature of this (R&D) contract and complexities inherent in this and prior programs, at designated milestones the Government will evaluate whether work should be redirected, removed, or whether schedule or budget adjustments should be made. In any event, the Government reserves the right to change product, process, schedule, or event to add or delete part or all of these elements as the need arises.

	
3.2
	
Overall Objectives and Scope

The overall objective of this contract is to advance the development of solithromycin (SOLI) as an intravenous (IV) and orally-delivered antibiotic for use in the pediatric population for the treatment of community-acquired bacterial pneumonia (CABP) and for protection against biothreat organisms, including Bacillus anthracis and Francisella tularensis. The scope of work is organized in 5 severable phases (Clinical Line Item Number [CLIN] 1 through 5):

	
1.
	
CLIN 1

The Contractor will carry out the following tasks and subtasks and in accordance with the agreed upon Integrated Master Schedule, which further details the conduct of the specific tasks and subtasks.

	
 
	
1.1
	
Program Management (WBS 1.1)

The Contractor outsources a majority of the work to established practitioners in each discipline, with the Contractor team providing experienced program management, coordination, and oversight. All selected purchased commercial service providers for the BARDA project have proven their ability to deliver quality work cost-effectively and on schedule. The Contractor shall provide for the following program management activities as outlined below:

	
 
	
1.1.1
	
The Contractor will provide overall management, integration and coordination of all contract activities, including a technical and administrative infrastructure to ensure the efficient planning, initiation, implementation, and direction of all contract activities.

	
 
	
1.1.2
	
The Principal Investigator is responsible for overall leadership for project management, communication, tracking, monitoring and reporting on status and progress, and modification to the project requirements and timelines, including projects undertaken by subcontractors. 

	
 
	
1.1.3
	
The Project Manager will oversee the monitoring and tracking day-to-day progress and timelines, coordinating communication and project activities; costs incurred; and program management.

	
 
	
1.1.4
	
The Principal Investigator and the Project Manager will act as the BARDA Liaison with responsibility for effective communication with the Project Officer and Contracting Officer.

	
 
	
1.1.5
	
The Contractor has adequate administrative staff and legal consultants to provide development of compliant subcontracts, consulting, and other legal agreements, and ensure timely acquisition of all proprietary rights, including IP rights, and reporting all inventions made in the performance of the project.

 

			
	
  Cempra Inc.
	
CONFIDENTIAL
	
Page 1 of 22

 

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

	
 
	
1.1.6
	
The Contractor's Project Management Team along with support from the Finance department has responsibility for financial management and reporting on all activities conducted by the Contractor and any subcontractors and service providers. 

	
 
	
1.1.7
	
Contract Review Meetings

	
 
	
1.1.7.1.
	
The Contractor's team will participate in regular face-to-face meetings on a quarterly basis to coordinate and oversee the contract effort as directed by the Contracting and Project Officers. Such meetings may include, but are not limited to, meeting of the Contractor and subcontractors to discuss clinical manufacturing progress, product development, product assay development, scale up manufacturing development, clinical sample assays development, preclinical/clinical study designs and regulatory issues; meetings with individual Contractors and other HHS officials to discuss the technical, regulatory, and ethical aspects of the program; and meeting with technical consultants to discuss technical data provided by the Contractor.

	
 
	
1.1.7.2.
	
The Contractor will participate in teleconferences every 2 weeks between the Contractor and BARDA to review technical progress. The Contractor will include subcontractors and service providers as necessary. If additional teleconferences or face-to-face meetings are requested by BARDA, the Contractor will be available.

	
 
	
1.1.8
	
Integrated Master Schedule (IMS)

	
 
	
1.1.8.1.
	
Within [*] calendar days of the effective date of the contract, the Contractor will submit a first draft of an updated IMS in a format agreed upon by BARDA to the Project Officer and the Contracting Officer for review and comment. The Integrated Master Schedule will be incorporated into the contract, and will be used to monitor performance of the contract. The Contractor will include the key milestones and Go/No Go decision gates. The IMS for the period of performance will be reviewed and accepted by BARDA at the PMBR.

	
 
	
1.1.9
	
Integrated Master Plan (IMP)

	
 
	
1.1.10
	
Work Breakdown Structure: The Contractor will utilize a WBS template agreed upon by BARDA for reporting on the contact. The Contractor will expand and delineate the Contract Work Breakdown Structure (CWBS) to a level agreed upon by BARDA as part of their Integrated Master Plan for contract reporting. The CWBS will be discernible and consistent. At BARDA's request, the Contractor will furnish WBS data at the work package level or at a lower level if there is significant complexity and risk associated with the task.

	
 
	
1.1.11
	
GO/ NO-GO Decision Gates/Contract Milestones: The IMP will outline key milestones with "Go/No Go" decision criteria (entrance and exit criteria for each phase of the project). The project plan should include, but not be limited to, milestones in manufacturing, non-clinical and clinical studies, and regulatory submissions.

	
 
	
1.1.12
	
Earned Value Management System Plan: Subject to the requirements under HHSAR Clause 352.234-4, the Contractor will use principles of Earned Value Management System (EVMS) in the management of this contract. The Contractor will follow the Seven Principles:

	
 
	
I.
	
The Contractor will plan all work scope for the program to completion.

	
 
	
II.
	
The Contractor will break down the program work scope into finite pieces that can be assigned to a responsible person or organization for control of technical, schedule, and cost objectives.

 

			
	
  Cempra Inc.
	
CONFIDENTIAL
	
Page 1 of 22

 

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

	
 
	
III.
	
The Contractor will integrate program work scope, schedule, and cost objectives into a performance measurement baseline plan against which accomplishments may be measured. 

	
 
	
IV.
	
The Contractor will use actual cost incurred and recorded in accomplishing the work performed.

	
 
	
V.
	
The Contractor will objectively assess accomplishments at the work performance level.

	
 
	
VI.
	
The Contractor will analyze significant variances from the plan, forecast impacts, and prepare an estimate at completion based on performance to date and work to be performed.

	
 
	
VII.
	
The Contractor will use earned value information in the company's management processes.

	
 
	
1.1.13
	
We understand that elements of EVMS will be applied to all applicable projects as part of the IMP. In addition, the Contractor will submit a written summary of the management procedures that will be used to establish, maintain and comply with EVMS requirements.

	
 
	
1.1.13.1.
	
Decision Gate Reporting: On completion of a stage of the product development, as defined in the agreed upon IMS and IMP, the Contractor will prepare and submit to the Project Officer and the Contracting Officer a Decision Gate Report that contains (i) sufficient detail, documentation and analysis to support successful completion of the stage according to the predetermined qualitative and quantitative criteria that were established for Go/No Go decision making; and (ii) a description of the next stage of product development to be initiated and a request for approval to proceed to the next stage of product development.

	
 
	
1.1.14
	
Risk Management Plan: The Contractor will develop a risk management plan within [*] days of contract award highlighting potential problems and/or issues that may arise during the life of the contract, their impact on cost, schedule and performance, and appropriate remediation plans. This plan will reference relevant WBS elements where appropriate. Updates to this plan will be included every 3 months (quarterly) in the monthly Project Status Report.

	
 
	
1.1.15
	
Performance Measurement Baseline Review (PMBR): The Contractor will submit a plan for a PMBR to occur within [*] days of contract award. At the PMBR, the Contractor and BARDA will mutually agree upon the budget, schedule and technical plan baselines (Performance Measurement Baseline). These baselines will be the basis for monitoring and reporting progress throughout the life of the contract. The PMBR is conducted to achieve confidence that the baselines accurately capture the entire technical scope of work, are consistent with contract schedule requirements, are reasonably and logically planned, and have adequate resources assigned. The goals of the PMBR are as follows:

	
 
	
I.
	
Jointly assess areas such as the Contractor's planning for complete coverage of the SOW, logical scheduling of the work activities, adequate resources, and identification of inherent risks

	
 
	
II.
	
Confirm the integrity of the Performance Measurement Baseline (PMB)

	
 
	
III.
	
Foster the use of EVM as a means of communication

	
 
	
IV.
	
Provide confidence in the validity of the Contractor's reporting 

	
 
	
V.
	
Identify risks associated with the PMB

 

 

 

			
	
  Cempra Inc.
	
CONFIDENTIAL
	
Page 2 of 22

 

 

	
 
	
VI.
	
Present any revised PMBs for mutual agreement 

	
 
	
VII.
	
Present an IMS: The Contractor will deliver an initial program IMS that rolls up all time-phased WBS elements down to the activity level. This IMS will include the dependencies that exist between tasks. This IMS will be agreed to and finalized at the PMBR.

	
 
	
VIII.
	
Present the Risk Management Plan

	
 
	
1.1.16
	
Deviation Request: During the course of contract performance, in response to a need to change IMS activities as baselined at the PMBR, the Contractor will submit a Deviation Report. This report will be used to request a change in the agreed-upon IMS and timelines, if necessary. This report will include: (i) discussion of the justification/rationale for the proposed change; (ii) options for addressing the needed changes from the agreed upon timelines, including a cost- benefit analysis of each option; and (iii) recommendations for the preferred option that includes a full analysis and discussion of the effect of the change on the entire product development program, timelines, and budget. 

	
 
	
1.1.17
	
Monthly and Annual Reports: The Contractor will deliver Project Status Reports on a monthly basis. The reports will address the items below cross referenced to the WBS, SOW, IMS, and EVMS:

	
 
	
I.
	
Executive summary highlighting the progress, issues, and relevant activities in manufacturing, non-clinical, clinical, and regulatory;

	
 
	
II.
	
Progress in meeting contract milestones, detailing the planned progress and actual progress during the reporting period, explaining any differences between the two and corrective steps;

	
 
	
III.
	
Updated IMS;

	
 
	
IV.
	
Updated EVMS;

	
 
	
V.
	
Updated Risk Management Plan (Every 3 months);

	
 
	
VI.
	
Three month rolling forecast of planned activities;

	
 
	
VII.
	
Progress of regulatory submissions;

	
 
	
VIII.
	
Estimated and actual expenses;

	
 
	
1.1.18
	
Data Management: The Contractor will develop and implement data management and quality control systems/procedures, including transmission, storage, confidentiality, and retrieval of all contract data;

	
 
	
1.1.18.1.
	
Provide for the statistical design and analysis of data resulting from the research;

	
 
	
1.1.18.2.
	
Provide raw data or specific analyses of data generated with contract funding to the Project Officer, upon request.

	
 
	
1.2
	
Non-Clinical Development (WBS 1.2)

	
 
	
1.2.1
	
PK/PD (WBS 1.2.1 - reserved)

	
 
	
1.2.2
	
Safety (WBS 1.2.2)

	
 
	
1.2.2.1.
	
Segment 3 toxicology (WBS 1.2.2.1): A Segment 3 toxicology study will be conducted to evaluate effects of SOLI on gestation, parturition, and lactation.

 

			
	
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CONFIDENTIAL
	
Page 3 of 22

 

 

	
 
	
1.2.2.2.
	
Juvenile toxicology (WBS 1.2.2.2): This study is designed to characterize postnatal developmental toxicities that would not be detected in routine perinatal/postnatal toxicity study designs. NOTE: Segment II toxicology generally provides sufficient data to proceed with pediatric studies for antibiotics in the macrolide class. Therefore, although the Contractor has budgeted for juvenile toxicology in the Cost Proposal, the Contractor does not propose to do this study unless specifically requested by the FDA.  

	
 
	
1.3
	
Non-Clinical Biodefense (WBS 1.3)

	
 
	
1.3.1
	
Agent Characterization (WBS 1.3.1 - reserved)

	
 
	
1.3.2
	
Model Development (WBS 1.3.2)

	
 
	
1.3.2.1.
	
Determination of Protein Binding in Monkey Plasma (WBS 1.3.2.1): When modeling IV doses in monkeys that equate to the human therapeutic oral dose  (for CABP), the degree of protein binding of SOLI in monkey plasma must be taken into consideration.

	
 
	
1.3.2.2.
	
Reverse PK/PD Modeling for Non-Human Primate (NHP) Dose (WBS 1.3.2.1): IV dosing of monkeys is necessary to overcome the first pass metabolism that SOLI undergoes after oral administration in monkeys, which is unlike that seen in human oral studies. The pharmacokinetic (PK) data from a previously completed 28-day IV toxicology/toxicokinetic study in non-infected cynomolgus monkeys administered various SOLI dosing regimens will be used to develop a structural population PK model describing the disposition of SOLI. Using this population PK model, SOLI dosing regimens will be identified which provide concentration-time profiles similar to those for dosing regimens being developed for treatment of patients with community-acquired bacterial pneumonia (CABP).

	
 
	
1.3.2.3.
	
Pilot NHP efficacy study in cynomolgus macaques for treatment of inhalational anthrax (WBS 1.3.2.2): In this non-GLP study, an established monkey model will be used to determine the effective dose & duration of SOLI necessary for treatment of inhalational anthrax.

	
 
	
1.3.2.4.
	
Pilot NHP efficacy study in cynomolgus macaques for treatment of pneumonic tularemia (WBS 1.3.2.3): In this non-GLP study, an established monkey model will be used to determine the effective dose & duration of SOLI necessary for treatment of inhalational tularemia.

	
 
	
1.3.2.5.
	
PK/PD Confirmation Modeling and Determination of Dose for Pivotal Efficacy Studies (WBS 1.3.2.1): Using the data from the pilot treatment efficacy studies in NHPs, population PK and PK/PD analyses will be conducted. The population PK model based on data from non-infected cynomolgus monkeys will be refined as necessary to describe the data from cynomolgus monkeys infected with biothreat agents including B. anthmcis or F. tularensis. This refined population PK model will be used to predict exposures for the humanized SOLI dosing regimens studied. PK-PD analyses for efficacy will then be conducted and PK-PD relationships based on these analyses will be used to guide selection of SOLI dosing regimens for further evaluation in pivotal studies.

	
 
	
1.3.3
	
Efficacy and Safety (WBS 1.3.3)

	
 
	
1.3.3.1.
	
RESERVED. 

	
 
	
1.3.3.2.
	
RESERVED. 

 

 

 

			
	
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1.4
	
Clinical Studies (WBS 1.4)  

	
 
	
1.4.1
	
Phase 1 (WBS 1.4.1)

	
 
	
1.4.1.1.
	
Pediatric Dose Determination (WBS 1.4.1.1 and WBS 1.4.1.2): Compartmental PK/PD modeling and simulation of doses that takes into account body weight, height and the volume of distribution differences in pediatrics will be conducted. In addition, pediatric dose-determination studies will be performed to determine dose adjustments from the adult dose that are related to differences in CYP-based metabolism and drug elimination pathways in young children. Population variability in the pediatric age groups as well as the potential for drug-drug interactions will be taken into consideration.

	
 
	
1.4.1.2.
	
Phase 1a Adolescents PK and Safety Study (WBS 1.4.1.1): The doses determined by the modeling experiments will be tested to determine safety and PK of SOLI in adolescents. Since Phase 1 studies in pediatrics are performed as an add-on to standard therapy in patients, a multiple day dosing strategy is proposed as it can be beneficial to current therapy, while a single dose will have limited added benefit. The Phase la safety and PK study will be performed with oral capsules in an open-label study in adolescents (12-17 years) receiving concomitant antibiotic treatment. Each cohort will contain 8-16 subjects. SOLI bioanalytical method development and validation in small volumes of human plasma and using dried blood spots (DBS) will be performed to support analysis of SOLI plasma levels in pediatric populations. Validation of DBS analysis will be performed if feasible and only if sufficient volume is available in blood draws.

	
 
	
1.4.1.3.
	
Phase 1 Suspension Bioavailability Study (WBS 1.4.1.3): The relative bioavailability of the SOLI suspension formulation (relative to capsules) will be determined in healthy adult volunteers in an open-label, randomized, cross-over study.

	
 
	
1.4.1.4.
	
Phase lb Pediatric PK and Safety Study site startup activities, including protocol development, site selection and startup activities, and shipment of drug and PK kits (WBS 1.4.1.2): The Phase lb safety and PK study will be designed for administration of oral capsules, suspension, and IV solution in children <12 years, and administration of IV solution-only in adolescents (12-17 years) receiving concomitant antibiotic treatment.

	
 
	
1.4.2
	
Phase 2/3 (WBS 1.4.2 - reserved) 

	
 
	
1.5
	
Regulatory (WBS 1.5)

	
 
	
1.5.1
	
IND (WBS 1.5.1)

	
 
	
1.5.1.1.
	
Pediatric Study Plan: The Contractor will submit a pediatric plan to the FDA within [*] days after the EOP2 meeting for the adult CABP and gonorrhea (GC) indications. The Contractor will submit an Agreed Initial PSP within [*] days of a meeting with FDA or receipt of written comments from FDA on the PSP.

	
 
	
1.5.1.2.
	
Meeting with FDA regarding Pediatric Development: When the Contractor submits the Pediatric Study Plan to FDA, a request will be made to hold a meeting with FDA to discuss the proposed pediatric studies.

	
 
	
1.5.1.3.
	
The Contractor will submit the Phase 1a protocol (Adolescent PK study) to FDA for review and comment.

 

 

 

			
	
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1.5.1.4.
	
The Contractor will submit a new IND for SOLI Powder for Oral Suspension (POS) including full CMC information on the suspension formulation, an updated Investigator Brochure and the final protocol for the Phase 1 suspension bioavailability study. The new IND will cross-reference data in the oral capsule and IV INDs. The Contractor will provide BARDA with all data submitted with the new IND. 

	
 
	
1.5.2
	
NDA Activities (WBS 1.5.2)

	
 
	
1.5.2.1.
	
The Contractor will submit a CMC Amendment for newly manufactured capsules (to be used in the Phase la/lb Pediatric PK and Safety Studies).

	
 
	
1.5.2.2.
	
The Contractor will submit a CMC Amendment for the new IV formulation containing tri-amino acid buffer (to be used in the Nonclinical Biodefense animal studies and Phase lb Pediatric PK and Safety Studies).

	
 
	
1.5.2.3.
	
After completion of each study, the Contractor will update relevant IND modules/summaries and submit all data and reports to the IND.

	
 
	
1.5.2.4.
	
RESERVED. 

	
 
	
1.5.2.5.
	
RESERVED. 

	
 
	
1.5.2.6.
	
The Contractor will submit the Phase 1a Adolescent PK Study protocol to the SOLI capsule IND prior to enrollment of the first patient.

	
 
	
1.5.2.7.
	
The Contractor will submit a Phase lb Pediatric Study protocol including PK/PD modeling of IV and capsules to FDA for review. Prior to enrollment of the first patient, the Contractor will submit the Phase lb protocol to the IND. If necessary, after determination of the relative bioavailability of the suspension formulation, and prior to enrollment of suspension cohorts, the Contractor will submit a Phase 1 b Study protocol amendment.

	
 
	
1.6
	
CMC (WBS 1.6)

	
 
	
1.6.1
	
Chemistry (Formulation Studies) (WBS 1.6.1)

	
 
	
1.6.1.1.
	
Obtain API: Drug substance will be sourced from the Contractor's current API supplier.

	
 
	
1.6.1.2.
	
Preformulation Studies: Preformulation studies will include pH solubility profiling, pH stability profiling, taste threshold evaluation and stress testing of SOLI. Part of the formulation development will be a study to assess excipients compatibility with SOLI. Commonly used pharmaceutical excipients suitable for a POS dosage formulation of SOLI, such as diluents, sugars, sugar alcohols, hydroxypropyl cellulose, viscosity improvers (xanthan gum, etc.) and preservatives (potassium sorbate, etc.) will be evaluated for compatibility with SOLI. Mixtures of SOLI and the excipients will be prepared and exposed to several stress conditions and placed on short term stability. Samples will be pulled after storage and stability will be assessed. To support the taste masking efforts the solubility of SOLI in the preferred suspending vehicles including water will be evaluated. SOLI In this study the water can be buffered to a pH in the range of 6 - 8, because SOLI solubility is low in this pH range.

 

 

 

 

			
	
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1.6.1.3.
	
Formulation development and stability studies: The target POS will be formulated to consist of approximately [*]% SOLI as powder and to deliver approximately [*]mg/mL of SOLI as suspension upon reconstitution. Considerations for development of the POS formulation are: taste of suspension, suspendability, uniformity of dosage form (POS blend uniformity/sample from reconstituted suspension), powder flow, particle size, bulk density and moisture content. During trial formulations, the main considerations are: taste of suspension, suspendability, uniformity of dosage form and moisture content. Stability studies on prototype POS formulations in bottle packaging will be conducted. Stability studies on prototype reconstituted suspension will also be conducted. The need for an antioxidant in the formulation will be evaluated as part of the development. 

	
 
	
1.6.1.4.
	
Taste-masking formulation development: For initial approach, organoleptic method will be tried, which includes non-reducing sugars, sugar alcohols, other sweetener and other excipients to mask the bitter taste of the API. Initial taste masking development work may include a wet granulation technique using non- reducing sugars (e.g. powdered sucrose) and/or sugar alcohols as diluents and binders (e.g. hydroxypropyl cellulose). This approach will also establish a suspendability upon reconstitution, content uniformity, and flowability of the powder. If it is difficult to improve taste by organoleptic method, a POS formulation would be developed by physical taste masking method or combination of organoleptic method and physical method. Taste-masking sensory panels will evaluate the taste of the reconstituted suspension from the POS, and provide feedback to the formulation team. Studies will also include the selection of the appropriate container size for the POS and evaluation of the ability of the dose measurement device (syringe or dose cup to deliver the required dose). Compatibility of the container closure with the POS and compatibility of the dosing device (syringe or Dosing cup) with the reconstituted POS will also be evaluated.

	
 
	
1.6.2
	
Pre-Clinical Manufacturing (WBS 1.6.2)

	
 
	
1.6.2.1.
	
POS Feasibility Lots: The formulation and process variables that are critical to meet the target product profile will be reconfirmed and used to guide the manufacture of clinical trial material (CTM) for Phase 1. A stability study will be conducted on the drug product from the feasibility lot.

	
 
	
1.6.3
	
Pilot Scale Manufacturing (WBS 1.6.3)

	
 
	
1.6.3.1.
	
Contractor will manufacture, package, label and release Capsule and IV drug product for shipment to Phase 1 clinical sites. Executed batch records will be sent to BARDA.

	
 
	
1.6.3.2.
	
Contractor will manufacture, package, label and release applicable IV drug product supplies for the NHP pilot studies.

	
 
	
1.6.3.3.
	
Phase 1 clinical trial material (CTM) lots of POS: Current plans are to manufacture CTM for Phase 1 studies. Excipients complying with the standard of USP/NF/EP and excipients that have already been used in commercially available drug products in US/EU will be used. A stability study will be performed at Toyama Chemical according to the ICH guidelines. Clinical (primary) packaging is planned. The POS for clinical studies will be packaged in wide-mouthed HDPE bottles with each bottle containing a 5 day course of therapy for Phase lb. The higher strength formulation will be packaged and shipped first to support the Bioavailability study. The bottles will be labeled based on English text provided by Cempra. Supplies should be shipped in time to start clinical trials in the US. A full Certificate of Analysis for the CTM batch will be provided.

 

 

 

 

			
	
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1.6.4
	
Commercial (WBS 1.6.4 - reserved) 

	
 
	
1.6.5
	
Controls/Analytical Validation (WBS 1.6.5)

	
 
	
1.6.5.1.
	
Analytical methods will be set with the same conditions and concentration of sample/standard solution as those of the current SOLI 200 mg capsule drug product. Appropriate diluents will be selected to extract SOLI from the powder for oral suspension drug product. For method validation. Specificity, Linearity, Detection Limit, Quantitation Limit, Accuracy and Repeatability will be performed before the pediatric pharmacokinetic (PK) studies (early clinical stage) and Intermediate Precision and Robustness will be performed before completion of registration batches. The analytical methods required include:

	
 
	
·
	
Appearance and Identification by HPLC

	
 
	
·
	
Product Assay and Related Substances Assay

	
 
	
·
	
Dissolution

	
 
	
·
	
Moisture Content

	
 
	
·
	
Microbial Limit Testing (MLT)

	
 
	
·
	
Preservative Assay (as appropriate)

	
 
	
·
	
Anti-oxidant Assay (as appropriate)

 

 

 

			
	
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2.
	
CLIN 2 

	
 
	
2.1
	
Program Management (WBS 2.1)

The Contractor outsources a majority of the work to established practitioners in each discipline, with the Contractor team providing experienced program management, coordination, and oversight. All selected purchased commercial service providers for the BARDA project have proven their ability to deliver quality work cost-effectively and on schedule. The Contractor shall provide for the following program management activities as outlined below:

	
 
	
2.1.1
	
The Contractor will provide overall management, integration and coordination of all contract activities, including a technical and administrative infrastructure to ensure the efficient planning, initiation, implementation, and direction of all contract activities.

	
 
	
2.1.2
	
The Principal Investigator is responsible for overall leadership for project management, communication, tracking, monitoring and reporting on status and progress, and modification to the project requirements and timelines, including projects undertaken by subcontractors.

	
 
	
2.1.3
	
The Project Manager will oversee the monitoring and tracking day-to-day progress and timelines, coordinating communication and project activities; costs incurred; and program management.

	
 
	
2.1.4
	
The Principal Investigator and the Project Manager will act as the BARDA Liaison with responsibility for effective communication with the Project Officer and Contracting Officer.

	
 
	
2.1.5
	
The Contractor has adequate administrative staff and legal consultants to provide development of compliant subcontracts, consulting, and other legal agreements, and ensure timely acquisition of all proprietary rights, including IP rights, and reporting all inventions made in the Performance of the project.

	
 
	
2.1.6
	
The Contractor's Project Management Team along with support from the Finance department has responsibility for financial management and reporting on all activities conducted by the Contractor and any subcontractors and service providers.

	
 
	
2.1.7
	
Contract Review Meetings

	
 
	
2.1.7.1.
	
The Contractor's team will participate in regular face-to-face meetings on a quarterly basis to coordinate and oversee the contract effort as directed by the Contracting and Project Officers. Such meetings may include, but are not limited to, meeting of the Contractor and subcontractors to discuss clinical manufacturing progress, product development, product assay development, scale up manufacturing development, clinical sample assays development, preclinical/clinical study designs and regulatory issues; meetings with individual Contractors and other HHS officials to discuss the technical, regulatory, and ethical aspects of the program; and meeting with technical consultants to discuss technical data provided by the Contractor.

	
 
	
2.1.7.2.
	
The Contractor will participate in teleconferences every 2 weeks between the Contractor and BARDA to review technical progress. The Contractor will include subcontractors and service providers as necessary. If additional teleconferences or face-to-face meetings are requested by BARDA, the Contractor will be available.

	
 
	
2.1.8
	
Integrated Master Schedule (IMS)

	
 
	
2.1.8.1.
	
Within [*] calendar days of the effective date of the contract, the Contractor will submit a first draft of an updated IMS to the Project Officer and the Contracting Officer for review and comment. The Integrated Master Schedule will be used to monitor performance of the contract. 

 

			
	
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The Contractor will include key milestones and Go/No Go decision gates. The IMS for the period of performance will be reviewed and accepted by BARDA at the PMBR. 

	
 
	
2.1.8.2.
	
Changes to the IMS: During the course of contract performance, in response to a need to change IMS activities as baselined at the PMBR, the Contractor will submit a Baseline Change Request. This report will be used to request a change in the agreed-upon IMS and timelines, if necessary.

	
 
	
2.1.9
	
Work Breakdown Structure: The Contractor will utilize a WBS template agreed upon by BARDA for reporting on the contact. The Contractor will expand and delineate the Contract Work Breakdown Structure (CWBS) to a level agreed upon by BARDA.

	
 
	
2.1.10
	
GO/ NO-GO Decision Gates/Contract Milestones: The Go/No Go Milestones will outline key objectives with "Go/No Go" decision criteria (entrance and exit criteria for each phase of the project). The milestones should include, but not be limited to, objectives in manufacturing, non-clinical and clinical studies, and regulatory submissions.

	
 
	
2.1.11
	
Earned Value Management System: Subject to the requirements under HHSAR Clause 352.234-4, the Contractor will use principles of Earned Value Management System (EVMS) in the management of this contract. The Contractor will follow the Seven Principles:

	
 
	
VIII.
	
The Contractor will plan all work scope for the program to completion.

	
 
	
IX.
	
The Contractor will break down the program work scope into finite pieces that can be assigned to a responsible person or organization for control of technical, schedule, and cost objectives.

	
 
	
X.
	
The Contractor will integrate program work scope, schedule, and cost objectives into a performance measurement baseline plan against which accomplishments may be measured.

	
 
	
XI.
	
The Contractor will use actual cost incurred and recorded in accomplishing the work performed. 

	
 
	
XII.
	
The Contractor will objectively assess accomplishments at the work Performance level.

	
 
	
XIII.
	
The Contractor will analyze significant variances from the plan, forecast impacts, and prepare an estimate at completion based on performance to date and work to be performed.

	
 
	
XIV.
	
The Contractor will use earned value information in the company's management processes as it relates to the BARDA contract.

	
 
	
2.1.12
	
Risk Management Plan: The Contractor will develop a risk management plan within [*] days of contract award highlighting potential problems and/or issues that may arise during the life of the contract, their impact on cost, schedule and performance, and appropriate remediation plans. This plan will reference relevant WBS elements where appropriate. Updates to this plan will be made as deemed necessary.

 

			
	
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2.1.13
	
Performance Measurement Baseline Review (PMBR): The Contractor will submit a plan for a PMBR to occur within [*] days of contract award. At the PMBR, the Contractor and BARDA will mutually agree upon the budget, schedule and technical plan baselines (Performance Measurement Baseline). These baselines will be the basis for monitoring and reporting progress throughout the life of the contract. The PMBR is conducted to achieve confidence that the baselines accurately capture the entire technical scope of work, are consistent with contract schedule requirements, are reasonably and logically planned, and have adequate resources assigned. The goals of the PMBR are as follows: 

	
 
	
IX.
	
Jointly assess areas such as the Contractor's planning for complete coverage of the SOW, logical scheduling of the work activities, adequate resources, and identification of inherent risks

	
 
	
X.
	
Confirm the integrity of the Performance Measurement Baseline (PMB)

	
 
	
XI.
	
Foster the use of EVM as a means of communication

	
 
	
XII.
	
Provide confidence in the validity of the Contractor's reporting

	
 
	
XIII.
	
Identify risks associated with the PMB

	
 
	
XIV.
	
Present any revised PMBs for mutual agreement

	
 
	
XV.
	
Present an IMS: The Contractor will deliver an initial program IMS that rolls up all time-phased WBS elements down to the activity level. This IMS will include the dependencies that exist between tasks. This IMS will be agreed to and finalized at the PMBR.

	
 
	
XVI.
	
Present the Risk Management Plan

	
 
	
2.1.14
	
Monthly and Annual Reports: The Contractor will deliver Project Status Reports on a monthly basis. The reports will address the items below cross referenced to the WBS, SOW, IMS, and EVMS:

	
 
	
IX.
	
Executive summary highlighting the progress, issues, and relevant activities in manufacturing, non-clinical, clinical, and regulatory 

	
 
	
X.
	
Progress in meeting contract milestones, detailing the planned progress and actual progress during the reporting period, explaining any differences between the two and corrective steps

	
 
	
XI.
	
Updated IMS

	
 
	
XII.
	
Updated EVMS

	
 
	
XIII.
	
Two month rolling forecast of planned activities

	
 
	
XIV.
	
Progress of regulatory submissions

	
 
	
XV.
	
Estimated and actual expenses

	
 
	
2.2
	
Non-Clinical Development (WBS 2.2 - reserved)

	
 
	
2.3
	
Non-Clinical Biodefense (WBS 2.3 - reserved)

 

 

 

			
	
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2.4
	
Clinical (WBS 2.4) 

	
 
	
2.4.1
	
Phase 1 (WBS 2.4.1)

	
 
	
2.4.1.1.
	
Phase lb Pediatric PK Study (WBS 2.4.1.1): The Contractor will conduct a multiple dose PK and safety study in pediatrics. This open-label study will be performed with oral capsules, suspension or IV solution in children less than 12 years, and with IV solution-only in adolescents (12-17 years). Each cohort can contain up to 16 subjects. PK and safety data may be published in a peer-reviewed scientific journal. Changes to the clinical design may occur based on the Cempra's assessment with input from BARDA.

	
 
	
2.4.1.2.
	
PK/PD-modeling for pediatric therapeutic dose justification for Phase 2/3 trial (WBS 2.4.1.2): Using PK data from Phase la/b studies, the population PK will be modeled. Pediatric therapeutic doses will be selected based upon the target attainment PK/PD modeling based on plasma and pulmonary levels in adult subjects.

	
 
	
2.4.2
	
Phase 2/3 (WBS 2.4.2)

	
 
	
2.4.2.1.
	
Phase 2/3 pediatric CABP study Startup activities (WBS 2.4.2.1): The Phase 2/3 safety study will be designed for administration of oral capsules, suspension, and IV solution in pediatric CABP patients receiving concomitant antibiotic treatment. The Phase 2/3 study startup activities will include but are not limited to: development of a protocol and SAP, site feasibility/selection and activation activities, development of an Informed Consent Form, Clinical Monitoring Plan, Regulatory Binder, Safety Reporting Plan, Data Management Plan and other study documentation (to include any foreign regulatory submission documents), establishing a DSMC and charter, and shipment of CTM and PK kits. Changes to the clinical design may occur based on Cempra's assessment with input from BARDA. 

	
 
	
2.5
	
Regulatory (WBS 2.5)

	
 
	
2.5.1
	
IND (WBS 2.5.1 - reserved)

	
 
	
2.5.2
	
NDA (WBS 2.5.2)

	
 
	
2.5.2.1.
	
The Contractor will submit IND Amendments for CTM batches (WBS 2.5.2.1)

	
 
	
2.5.2.2.
	
The contractor will submit IMPDs for Pediatric studies (multiple countries)

	
 
	
2.5.2.3.
	
The contractor will submit taste optimization/ DOE work to FDA for POS formulation

	
 
	
2.5.2.4.
	
The Contractor will submit the Pediatric Phase 2/3 protocol and Clinical Study Regulatory Documents to FDA (WBS 2.5.2.2)

	
 
	
2.5.2.5.
	
The Contractor will submit an NDA for IV and oral capsules in adults for CABP and GC indications, including adolescent GC patients. PDUFA fees for these NDAs will be covered by the Contractor (WBS 2.5.2.3).

	
 
	
2.5.2.6.
	
The Contractor will submit the Phase lb CSR to the FDA (WBS 2.5.2.4).

	
 
	
2.5.2.7.
	
The Contractor will submit other BARDA related Regulatory/Ethics Committee amendments and summaries as deemed necessary by Cempra's Regulatory team.

 

			
	
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2.6
	
CMC (WBS 2.6) 

	
 
	
2.6.1
	
Chemistry (Formulation Studies) (WBS 2.6.1)

	
 
	
2.6.1.1.
	
Obtain API: Drug substance will be sourced from the Contractor's current API supplier. The API will be used for: formulation and/or process optimization, clinical supply manufacturing, scale up studies, registration batches and other activities deemed necessary by the Contractor's CMC team

	
 
	
2.6.1.2.
	
Formulation studies will be conducted at a CMO. These include but are not limited to:

	
 
	
2.6.1.2.1
	
Excipient compatibility: Several studies will be performed to evaluate the effect of different excipients on the formulation. The excipients include but are not limited to: sucralose, magna-sweet, sodium chloride, flavor, colorant and citric acid.

	
 
	
2.6.1.2.2
	
Formulation optimization: Several studies to optimize the formulation composition identified from taste evaluation work will be conducted at Catalent. A Design of Experiments (DoE), or similar approach, will be used. Studies will include, but are not limited to:

	
 
	
·
	
Determination of buffer capacity 

	
 
	
·
	
Determine the amount of anti-forming agent required

	
 
	
·
	
The amount of shaking to re-suspend the powder

	
 
	
·
	
The level of preservative in the formulation

	
 
	
·
	
The addition of a colorant to improve aesthetic appeal

	
 
	
·
	
The amount of water required for reconstitution to a target concentration

	
 
	
·
	
A method for reconstitution

	
 
	
2.6.2
	
Pre-Clinical Manufacturing (WBS 2.6.2)

	
 
	
2.6.2.1.
	
POS Process Optimization: After the formulation optimization DoE work is completed, manufacturing process development and optimization to support the manufacture of clinical supplies for the Phase 2/3 studies will be conducted. The key requirements of the process include, but are not limited to, these items listed below:

	
 
	
·
	
The process should consistently yield a homogeneous blend

	
 
	
·
	
The POS blend should flow sufficiently well for machine processing

	
 
	
·
	
The process should be scalable

	
 
	
·
	
The process should be efficient with just enough steps to yield a consistent product

The formulation and process variables that are critical to meet the target product profile will be determined and used to guide the manufacture of clinical trial material (CTM) for Phase 1. A stability study will be conducted on the POS manufactured at target parameters.

	
 
	
2.6.2.2.
	
Process confirmation: At least one process confirmation batch will be manufactured at the 20-50 kg scale. The batch(es) will be packaged and set on stability. The results from the process confirmation batch(es) will guide manufacture of a clinical batch for the phase 2/3 studies.

	
 
	
2.6.3
	
Pilot Scale Manufacturing (WBS 2.6.3)

	
 
	
2.6.3.1.
	
Capsules and IV vials will be acquired and packaged for the pediatric Phase 2/3 study (WBS 2.6.3.2).

	
 
	
2.6.3.2.
	
Phase 2/3 POS CTM (WBS 2.6.3.4): Manufacturing, packaging, quality studies, and stability study will be conducted at a CMO. Phase 2/3 CTM will be manufactured at an appropriate scale 

 

			
	
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and, if possible, will suffice as 1 of the 3 registration batches needed for NDA submission. (Registration batch manufacturing, packaging and testing originally planned for CLIN 2 will now be conducted in a future CLIN). SOLI will be compared to the Standard of Care (SOC) treatment. If necessary, Cempra will have to procure SOC comparator products as well. 

	
 
	
2.6.4
	
Commercial (WBS 2.6.4 - reserved)

	
 
	
2.6.5
	
Controls/Analytical Validation (WBS 2.6.5). 

	
 
	
2.6.5.1.
	
POS Phase 1 CTM Stability Study (WBS 2.6.5.1)

	
 
	
2.6.5.2.
	
Analytical methods to support formulation and process optimization will be adapted from those used in the manufacture of phase 1 clinical supplies. These methods will be further developed and validated to support the phase 2/3 study. The analytical methods required include, but are not limited to:

	
 
	
·
	
Appearance and Identification by HPLC

	
 
	
·
	
Product Assay and Related Substances Assay

	
 
	
·
	
Dissolution

	
 
	
·
	
Moisture Content

	
 
	
·
	
Microbial Limit Testing (MLT)

	
 
	
·
	
Preservative Assay (as appropriate)

	
 
	
·
	
Microbial Effectiveness Test (AET) methods

 

			
	
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3.
	
CLIN 3 

	
 
	
3.1
	
Program Management (WBS 3.1)

	
 
	
3.1.1
	
Program management scope is consistent with that outlined in CLIN 2.

	
 
	
3.2
	
Non-Clinical Development (WBS 3.2 - reserved)

	
 
	
3.3
	
Non-Clinical Biodefense (WBS 3.3)

	
 
	
3.3.1
	
Agent Characterization (WBS 3.3.1 - reserved)

	
 
	
3.3.2
	
Model Development (WBS 3.3.2 - reserved)

	
 
	
3.3.3
	
Efficacy and Safety (WBS 3.3.3)

	
 
	
3.3.3.1.
	
Pivotal NHP Efficacy Study in cynomolgus macaques for treatment of inhalational anthrax (WBS 3.3.3.1): The therapeutic dose selected based on the pilot NHP study and PK/PD modeling will be tested in the pivotal GLP study to determine the efficacy of SOLI in the therapeutic model of inhalational anthrax in cynomolgus monkeys.

	
 
	
3.3.3.2.
	
Pivotal NHP Efficacy Study in cynomolgus macaques for treatment of inhalational tularemia (WBS 3.3.3.2): The dose selected based on the pilot NHP study and PK/PD modeling will be tested in a pivotal GLP study to determine the efficacy of SOLI in the therapeutic model of inhalational tularemia in cynomolgus monkeys.

	
 
	
3.3.3.3.
	
PK/PD Modeling and Translation to Human Dose for Treatment of Inhalational Anthrax and Tularemia (WBS 3.3.3.3): The plasma concentration-time data from the infected cynomolgus monkeys will be evaluated using a similar structural population PK model as that previously developed for the non-infected animals, and individual SOLI exposure measures (AUC) will be generated for each animal. These individual exposure measures will then be utilized in subsequent PK/PD analyses for both animal survival and SOLI microbiologic response. The relationship between the AUC:MIC ratio and the efficacy endpoints, animal survival, and the microbiological response to therapy measured at the end-of- therapy, will be examined. If trends for PK/PD relationships for efficacy are observed, initial graphical analyses of efficacy endpoints will be followed by univariable and multivariable logistic or other nonlinear regression modeling techniques. In addition, a survival analysis (i.e., time-to-event analysis) may be conducted if appropriate. These pharmacokinetic parameters will be used to calculate the therapeutic doses for inhalational anthrax and inhalational tularemia in human adults. Upon completion of pediatric PK studies, the therapeutic doses for children for biodefense indications will be extrapolated from the pediatric PK/PD results. 

	
 
	
3.4
	
Clinical (WBS 3.4)

	
 
	
3.4.1
	
Phase 1 (WBS 3.4.1)

	
 
	
3.4.1.1.
	
Phase 1 Multiple dose PK and Safety study in Human (Adult) Volunteers (WBS 3.4.1.1): The multi-dose study is planned for 21 days, but could be shortened if efficacy is demonstrated with a shorter duration of SOLI treatment in the NHP studies.

	
 
	
3.4.2
	
Phase 2/3 (WBS 3.4.2 - reserved)

 

			
	
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3.5
	
Regulatory (WBS 3.5) 

	
 
	
3.5.1
	
IND (WBS 3.5.1 - reserved)

	
 
	
3.5.2
	
NDA (WBS 3.5.2)

	
 
	
3.5.2.1.
	
After completion of the NHP pilot studies, the Contractor will submit a meeting request to FDA to discuss submission of the supplemental NDA for the Animal Rule indications (WBS 3.5.2.1).

	
 
	
3.5.2.2.
	
The Contractor will submit supplemental NDAs for use of SOLI capsule and IV formulations for the biodefense indications under the Animal Rule (WBS 3.5.2.2).

	
 
	
3.6
	
CMC (WBS 3.6)

	
 
	
3.6.1
	
Chemistry (Formulation Studies) (WBS 3.6.1 - reserved)

	
 
	
3.6.1.1.
	
Obtain API: Drug substance will be sourced from the Cempra's current API supplier. Registration grade API is required for POS registration batches.

	
 
	
3.6.2
	
Pre-Clinical Manufacturing (WBS 3.6.2 - reserved)

	
 
	
3.6.3
	
Pilot Scale Manufacturing (WBS 3.6.3)

	
 
	
3.6.3.1.
	
POS registration batches will be manufactured.

	
 
	
3.6.3.2.
	
IV drug product supplies will be packaged for NHP pivotal studies (WBS 3.6.3.1)

	
 
	
3.6.4
	
Commercial (WBS 3.6.4 - reserved)

	
 
	
3.6.5
	
Controls/Analytical Validation (WBS 3.6.5)

	
 
	
3.6.5.1.
	
POS Phase 2/3 CTM Stability Study (WBS 3.6.5.1) 

	
4.
	
CLIN 4 (GOVERNMENT/CONTRACTOR COST-SHARE)

	
 
	
4.1
	
Program Management (WBS 4.1)

The Contractor outsources a majority of the work to established practitioners in each discipline, with the Contractor team providing experienced program management, coordination, and oversight. All selected purchased commercial service providers for the BARDA project have proven their ability to deliver quality work cost-effectively and on schedule. The Contractor shall provide for the following program management activities as outlined below:

	
 
	
4.1.1
	
The Contractor will provide overall management, integration and coordination of all contract activities, including a technical and administrative infrastructure to ensure the efficient planning, initiation, implementation, and direction of all contract activities.

	
 
	
4.1.2
	
The Principal Investigator is responsible for overall leadership for project management, communication, tracking, monitoring and reporting on status and progress, and modification to the project requirements and timelines, including projects undertaken by subcontractors.

	
 
	
4.1.3
	
The Project Manager will oversee the monitoring and tracking day-to-day progress and timelines, coordinating communication and project activities; costs incurred: and program management.

	
 
	
4.1.4
	
The Principal Investigator and the Project Manager will act as the BARDA Liaison with responsibility for effective communication with the Project Officer and Contracting Officer.

 

 

 

			
	
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[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

	
 
	
4.1.5
	
The Contractor has adequate administrative staff and legal consultants to provide development of compliant subcontracts, consulting, and other legal agreements, and ensure timely acquisition of all proprietary rights, including IP rights, and reporting all inventions made in the performance of the project. 

	
 
	
4.1.6
	
The Contractor's Project Management Team along with support from the Finance department has responsibility for financial management and reporting on all activities conducted by the Contractor and any subcontractors and service providers.

	
 
	
4.1.7
	
Contract Review Meetings

	
 
	
4.1.7.1.
	
The Contractor's team will participate in regular face-to-face meetings on a quarterly basis to coordinate and oversee the contract effort as directed by the Contracting and Project Officers. Such meetings may include, but are not limited to, meeting of the Contractor and subcontractors to discuss clinical manufacturing progress, product development, product assay development, scale up manufacturing development, clinical sample assays development, preclinical/clinical study designs and regulatory issues: meetings with individual Contractors and other HHS officials to discuss the technical, regulatory, and ethical aspects of the program; and meetings with technical consultants to discuss technical data provided by the Contractor.

	
 
	
4.1.7.2.
	
The Contractor will participate in teleconferences every 2 weeks between the Contractor and BARDA to review technical progress. The Contractor will include subcontractors and service providers as necessary. If additional teleconferences or face-to-face meetings are requested by BARDA, the Contractor will be available.

	
 
	
4.1.8
	
Integrated Master Schedule (IMS)

	
 
	
4.1.8.1.
	
Within [*] calendar days of the effective date of the contract, the Contractor will submit a first draft of an updated IMS to the Project Officer and the Contracting Officer for review and comment. The Integrated Master Schedule will be used to monitor Performance of the contract. The Contractor will include key milestones and Go/No Go decision gates. The IMS for the period of performance will be reviewed and accepted by BARDA at the PMBR.

	
 
	
4.1.8.2.
	
Changes to the IMS: During the course of contract performance, in response to a need to change IMS activities as baselined at the PMBR, the Contractor will submit a Baseline Change Request. This report will be used to request a change in the agreed-upon IMS and timelines, if necessary.

	
 
	
4.1.9
	
Work Breakdown Structure: The Contractor will utilize a WBS template agreed upon by BARDA for reporting on the contact. The Contractor will expand and delineate the Contract Work Breakdown Structure (CWBS) to a level agreed upon by BARDA.

	
 
	
4.1.10
	
GO/ NO-GO Decision Gates/Contract Milestones: The Go/No Go Milestones will outline key objectives with ''Go/No Go" decision criteria (entrance and exit criteria for each phase of the project). The milestones should include, but not be limited to, objectives in manufacturing, non-clinical and clinical studies, and regulatory submissions.

 

			
	
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[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

	
 
	
4.1.11
	
Earned Value Management System: Subject to the requirements under HHSAR Clause 352.234-4, the Contractor will use principles of Earned Value Management System (EVMS) in the management of this contract. The Contractor will follow the Seven Principles: 

	
 
	
XV.
	
The Contractor will plan all work scope for the program to completion.

	
 
	
XVI.
	
The Contractor will break down the program work scope into finite pieces that can be assigned to a responsible person or organization for control of technical, schedule, and cost objectives.

	
 
	
XVII.
	
The Contractor will integrate program work scope, schedule, and cost objectives into a performance measurement baseline plan against which accomplishments may be measured.

	
 
	
XVIII.
	
The Contractor will use actual cost incurred and recorded in accomplishing the work performed. 

	
 
	
XIX.
	
The Contractor will objectively assess accomplishments at the work performance level.

	
 
	
XX.
	
The Contractor will analyze significant variances from the plan, forecast impacts, and prepare an estimate at completion based on performance to date and work to be performed.

	
 
	
XXI.
	
The Contractor will use earned value information in the company's management processes as it relates to the BARDA contract.

	
 
	
4.1.12
	
Risk Management Plan: The Contractor will develop a risk management plan within [*] days of contract award highlighting potential problems and/or issues that may arise during the life of the contract, their impact on cost, schedule and performance, and appropriate remediation plans. This plan will reference relevant WBS elements where appropriate. Updates to this plan will be made as deemed necessary.

	
 
	
4.1.13
	
Performance Measurement Baseline Review (PMBR): The Contractor will submit a plan for a PMBR to occur within [*] days of contract award. At the PMBR, the Contractor and BARDA will mutually agree upon the budget, schedule and technical plan baselines (Performance Measurement Baseline). These baselines will be the basis for monitoring and reporting progress throughout the life of the contract. The PMBR is conducted to achieve confidence that the baselines accurately capture the entire technical scope of work, are consistent with contract schedule requirements, are reasonably and logically planned, and have adequate resources assigned. The goals of the PMBR are as follows:

	
 
	
XVII.
	
Jointly assess areas such as the Contractor's planning for complete coverage of the SOW, logical scheduling of the work activities, adequate resources, and identification of inherent risks

	
 
	
XVIII.
	
Confirm the integrity of the Performance Measurement Baseline (PMB)

	
 
	
XIX.
	
Foster the use of EVM as a means of communication

	
 
	
XX.
	
Provide confidence in the validity of the Contractor's reporting

	
 
	
XXI.
	
Identify risks associated with the PMB

	
 
	
XXII.
	
Present any revised PMBs for mutual agreement

 

 

 

			
	
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XXIII.
	
Present an IMS: The Contractor will deliver an initial program IMS that rolls up all time-phased WBS elements down to the activity level. This IMS will include the dependencies that exist between tasks. This IMS will be agreed to and finalized at the PMBR. 

	
 
	
XXIV.
	
Present the Risk Management Plan

	
 
	
4.1.14
	
Monthly and Annual Reports: The Contractor will deliver Project Status Reports on a monthly basis. The reports will address the items below cross referenced to the WBS, SOW. IMS, and EVMS:

	
 
	
XVI.
	
Executive summary highlighting the progress, issues, and relevant activities in manufacturing, non-clinical, clinical, and regulatory 

	
 
	
XVII.
	
Progress in meeting contract milestones, detailing the planned progress and actual progress during the reporting period, explaining any differences between the two and corrective steps

	
 
	
XVIII.
	
Updated IMS

	
 
	
XIX.
	
Updated EVMS

	
 
	
XX.
	
Two month rolling forecast of planned activities 

	
 
	
XXI.
	
Progress of regulatory submissions

	
 
	
XXII.
	
Estimated and actual expenses

	
 
	
4.1.15
	
Quality Assurance (OA) and Quality Control (QC): The Contractor will perform OA activities such as the auditing of vendors and clinical sites to ensure that work is completed in compliance with all regulations. Review of all batch records and study documentation will be performed. Pharmacovigilance activities throughout the Phase 2/3 clinical study will also be conducted.

	
 
	
4.2
	
Non-Clinical Development (WBS 4.2 - reserved)

	
 
	
4.3
	
Non-Clinical Biodefense (WBS 4.3 - reserved)

	
 
	
4.4
	
Clinical Studies (WBS 4.4)

	
 
	
4.4.1
	
Phase 1 (WBS 4.4.1)

	
 
	
4.4.1.1.
	
Phase 1 Suspension Relative Bioavailability Study (WBS 4.4.1.1): The bioavailability of the Phase 2/3 SOLI suspension formulation (relative to Phase 1 suspension formulation) will be determined in healthy adult volunteers in an open- label, randomized, cross-over study.

	
 
	
4.4.2
	
Phase 2/3 (WBS 4.4.2)

	
 
	
4.4.2.1.
	
Phase 2/3 Pediatric CABP Trial (WBS 4.4.2.1): Since CABP infection in children is similar to that documented in adults, results of microbiological efficacy in adults could be extrapolated to children with similar antimicrobial exposure. Therefore, a Phase 2/3 study will be conducted following interim results from the Phase 1 studies. These studies will be conducted after successful completion of adult CABP trials and concurrent to the submission of the NDA for adult CABP. Sparse PK sampling will be collected and used in Pop PK modeling. These outline of this study has been approved in the PSP and the PIP. 

 

 

 

			
	
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[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

	
 
	
4.5
	
Regulatory (WBS 4.5) 

	
 
	
4.5.1
	
IND (WBS 4.5.1 - reserved)

	
 
	
4.5.2
	
NDA Activities (WBS 4.5.2)

	
 
	
4.5.2.1.
	
The Contractor will submit Regulatory/ Ethics Committee/ 1MPD amendments and summaries as deemed necessary by the Contractor's regulatory team (WBS 4.5.2.1).

	
 
	
4.5.2.2.
	
The Contractor will submit any Pediatric Phase 2/3 protocol amendments and clinical study regulatory documents to FDA or international regulatory agencies (WBS 4.5.2.2)

	
 
	
4.5.2.3.
	
The Contractor will update the Pediatric Study Plan (PSP) and Pediatric Investigational Plan (PIP) and communicate with FDA/EMA as deemed necessary by the Contractor's regulatory team (WBS 4.5.2.3).

	
 
	
4.5.2.4.
	
The Contractor will submit to applicable regulatory agencies any Phase 2/3 CTM and POS registration batch documentation, as deemed necessary by the Contractor's regulatory team (WBS 4.5.2.4)

	
 
	
4.5.2.5.
	
The Contractor will submit the Phase 2/3 CSR to the FDA (WBS 4.5.2.5).

	
 
	
4.6
	
CMC (WBS 4.6)

	
 
	
4.6.1
	
Chemistry (Formulation Studies) (WBS 4.6.1)

	
 
	
4.6.1.1.
	
Obtain API: Drug substance will be sourced from Cempra's current API supplier. Registration grade API is required for POS registration batches.

	
 
	
4.6.2
	
Pre-Clinical Manufacturing (WBS 4.6.2)

	
 
	
4.6.2.1.
	
Scale-up and tech transfer batches will be manufactured for each POS formulation ([*] mg/5 mL and [*] mg/5 mL).

	
 
	
4.6.3
	
Pilot Scale Manufacturing (WBS 4.6.3)

	
 
	
4.6.3.1.
	
Capsules. IV vials and Powder for Oral Suspension (POS) will be acquired, packaged, stored and distributed for resupply during the pediatric Phase 2/3 study and for the Phase 1 Relative Bioavailability study. Components for IV kits will be procured. At the completion of the clinical study, all CTM from clinical sites will be dispositioned (WBS 4.6.3.1).

	
 
	
4.6.3.2.
	
POS registration batches will be manufactured to support resupply of POS in the Phase 2/3 study (WBS 4.6.3.2). 

	
 
	
4.6.4
	
Commercial (WBS 4.6.4 - reserved)

	
 
	
4.6.5
	
Controls/ Analytical Validation (WBS 4.6.5)

	
 
	
4.6.5.1.
	
POS Phase 2/3 CTM Registration Batch Stability Study (WBS 4.6.5.1)

 

 

 

			
	
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4.6.5.2.
	
Analytical methods to support formulation of registration grade API will he adapted from those used in the manufacture of Phase 2/3 POS clinical supplies. These methods will include, but are not limited to: 

	
 
	
·
	
Product Assay and Related Substances Assay

	
 
	
·
	
Dissolution

	
 
	
·
	
Quantitative X-ray Powder Diffraction

	
 
	
·
	
Shipping Studies

	
 
	
·
	
Temperature Excursion Studies

	
 
	
·
	
Photostability Studies

	
5.
	
CLIN 5

	
 
	
5.1
	
Program Management (WBS 5.1)

	
 
	
5.1.1
	
Program management scope is consistent with that in CLIN 4.

	
 
	
5.2
	
Non-Clinical Development (WBS 5.2 - reserved)

	
 
	
5.3
	
Non-Clinical Biodefense (WBS 5.3 - reserved)

	
 
	
5.4
	
Clinical (WBS 5.4 - reserved)

	
 
	
5.5
	
Regulatory (WBS 5.5)

	
 
	
5.5.1
	
IND (WBS 5.5.1 - reserved)

	
 
	
5.5.2
	
NDA (WBS 5.5.2)

	
 
	
5.5.2.1.
	
At the completion of the Phase 2/3 pediatric CABP trial, the Contractor will submit an NDA for oral suspension for CABP in adults and pediatric populations to the FDA, including a biodefense indication under the Animal Rule (WBS 5.5.2.1). 

	
 
	
5.5.2.2.
	
The Contractor will submit supplemental NDAs for use of SOLI capsule and IV formulations for the CABP and biodefense indications in pediatric patients (WBS 5.5.2.2).

	
 
	
5.6
	
CMC (WBS 5.6 - reserved)

	
6.
	
OTHER ITEMS

	
 
	
6.1
	
Facilities, Equipment, and Other Resources

The Contractor confirms the subcontractor and all purchased commercial service providers provide equipment, facilities and other resources under Federal and HHS regulations.3

 

 

 

			
	
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CONFIDENTIAL
	
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[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

	
3.
	
Contract WBS Milestones & Related Deliverables 

 

							
	
No.
	
GO/NO-GO Decision Gates
	
GO Criteria
	
NO-GO Criteria
	
Deliverable
	
WBS/ SOW#
	
CLIN #

	
11
	
[*]
	
[*]
	
[*]
	
[*]
	
[*]
	
[*]

	
15
	
[*]
	
[*]
	
[*]
	
[*]
	
[*]
	
[*]

	
16
	
[*]
	
[*]
	
[*]
	
[*]
	
[*]
	
[*]

	
17
	
[*]
	
[*]
	
[*]
	
[*]
	
[*]
	
[*]

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