Document:

Exhibit 10.14

 

EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) by and between INCYTE CORPORATION, a Delaware corporation (the “Company”), and                                          (the “Executive”), effective as of the          day of                             , 20        .

 

The Board of Directors of the Company (the “Board”), has determined that it is in the best interests of the Company and its stockholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change in Control (as defined below) of the Company.  The Board believes it is imperative to diminish the inevitable distraction of the Executive by virtue of the personal uncertainties and risks created by a pending or threatened Change in Control and to encourage the Executive’s full attention and dedication to the Company in the event of any threatened or pending Change in Control, and to provide the Executive with compensation and benefits arrangements upon an involuntary termination following a Change in Control which ensure that the compensation and benefits expectations of the Executive will be satisfied and which are competitive with those of other comparable corporations.  Therefore, in order to accomplish these objectives, the Board has caused the Company to enter into this amended and restated Agreement with the Executive, which shall supersede any other agreement (written or oral) previously entered into between the Company and the Executive regarding the subject matter contained herein, including, but not limited to, the employment agreement entered into between the Executive and the Company effective as of                                 , and the amendment thereto effective as of                             .

 

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 

SECTION 1.   DEFINITIONS.

 

(a)           “Annual Base Salary” means the highest rate of annual base salary paid or payable, including any base salary which has been earned but deferred, to the Executive by the Company and its affiliated companies in respect of the 12-month period immediately preceding the month in which the Change in Control occurs.

 

(b)           “Business Unit” means a Subsidiary or a business division of the Company or Subsidiary in which the Executive is primarily employed.

 

(c)           “Cause” means:

 

(i)            The willful and continued failure of the Executive to perform substantially the Executive’s duties with the Company or one of its affiliates (other than any such failure resulting from incapacity due to physical or mental illness or impairment), after a written demand for substantial performance is delivered to the Executive by the Board or the Chief Executive Officer of the Company which specifically identifies the manner in which the Board or Chief Executive Officer believes that the Executive has not substantially performed the Executive’s duties; or

 

(ii)           The willful engaging by the Executive in illegal conduct, gross misconduct or dishonesty which is materially and demonstrably injurious to the Company; or

 

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(iii)          Unauthorized and prejudicial disclosure or misuse of the Company’s secret, confidential or proprietary information, knowledge or data relating to the Company or its affiliates.

 

Notwithstanding the foregoing, “Cause” shall not include any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company to whom the Executive reports or based upon the advice of counsel for the Company.  If the Executive is an executive officer of the Company, appointed by the Board, the cessation of employment of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct described in subparagraph (i), (ii) or (iii) above, and specifying the particulars thereof in detail.

 

(d)           “Change in Control” means the occurrence of any of the following events:

 

(i)            A change in the composition of the Board, as a result of which fewer than one-half of the incumbent directors are directors who either:

 

(A)          Had been directors of the Company 24 months prior to such change; or

 

(B)          Were elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the directors who had been directors of the Company 24 months prior to such change and who were still in office at the time of the election or nomination;

 

(ii)           Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) by the acquisition or aggregation of securities is or becomes the beneficial owner, directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities ordinarily (and apart from rights accruing under special circumstances) having the right to vote at elections of directors (the “Base Capital Stock”); except that any change in the relative beneficial ownership of the Company’s securities by any person resulting solely from a reduction in the aggregate number of outstanding shares of Base Capital Stock, and any decrease thereafter in such person’s ownership of securities, shall be disregarded until such person increases in any manner, directly or indirectly, such person’s beneficial ownership of any securities of the Company;

 

(iii)          The stockholders of the Company approve a plan of complete liquidation or dissolution of the Company;

 

(iv)          There is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company to a Subsidiary or to an entity, the voting securities of which

 

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are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale; or

 

(v)           The sale, transfer or other disposition of a substantial portion of the stock or assets of the Company or a Business Unit or a similar transaction as the Board, in each case, in its sole discretion, may determine to be a Change in Control.

 

The term “Change in Control” shall not include a transaction, the sole purpose of which is to change the state of the Company’s incorporation or the initial public offering of the stock of a Business Unit.

 

(e)           “Code” means the Internal Revenue Code of 1986, as amended.

 

(f)            “Disability” means the absence of the Executive from the Executive’s duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness or impairment which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Executive or the Executive’s legal representative.

 

(g)           “Employment Period” means the 24-month period following the occurrence of a Change in Control.

 

(h)           “Involuntary Termination” means:

 

(i)            The assignment to Executive of any duties substantially inconsistent with Executive’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as in effect immediately prior to a Change in Control or any other action by the Company that results in a substantial diminishment in such position, authority, duties or responsibilities as in effect immediately prior to a Change in Control; or

 

(ii)           (A) Except as required by law, the failure by the Company to continue to provide to Executive benefits substantially equivalent or more beneficial (including in terms of the amount of benefits provided and the level of participation of Executive relative to other participants), in the aggregate, to those enjoyed by Executive under the Company’s employee benefit plans (including, without limitation, any pension, deferred compensation, split-dollar life insurance, supplemental retirement, retirement or savings plan(s) or program(s)) and welfare benefits in which Executive was eligible to participate immediately prior to the Change in Control; or (B) the taking of any action by the Company that would, directly or indirectly, materially reduce or deprive Executive of any other benefit, perquisite or privilege enjoyed by Executive immediately prior to the Change in Control, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and that is remedied by the Company promptly after receipt of notice thereof given by the Executive; or

 

(iii)          The Company’s requiring the Executive to be based at any office or location more than 35 miles from the office or location where the Executive is based immediately prior to the Change in Control; or

 

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(iv)          Any reduction in the Executive’s Base Salary or target bonus opportunity under the Bonus Plan; or

 

(v)           Any termination of the Executive by the Company that is not effected for Cause or Disability; or

 

(vi)          A material breach by the Company of this Agreement.

 

(i)            “Subsidiary” means any other entity, whether incorporated or unincorporated, in which the Company or any one or more of its Subsidiaries directly owns or controls (i) 50% or more of the securities or other ownership interests, including profits, equity or beneficial interests, or (ii) securities or other interests having by their terms ordinary voting power to elect more than 50% of the board of directors or others performing similar function with respect to such other entity that is not a corporation.

 

(j)            “Target Bonus” means the Executive’s target bonus under the Company’s annual bonus program, or any comparable bonus under any predecessor or successor plan (“Bonus Plan”), for the year in which the Change in Control occurs.

 

(k)           “Termination Date” means the date of receipt of any notice of termination delivered by one party to the other under this Agreement, or such later effective date specified in the notice.

 

SECTION 2.   OBLIGATIONS OF THE COMPANY UPON TERMINATION.

 

(a)           Involuntary Termination.  If the Executive’s employment with the Company terminates as a result of an Involuntary Termination during the Employment Period, then the Executive shall be entitled to the following severance benefits:

 

(i)            the amount equal to the product of (x) two and (y) the sum of (1) the Executive’s Annual Base Salary and (2) the Target Bonus or, if greater, the bonus pursuant to the Bonus Plan in the most recently completed fiscal year, payable in a lump sum within 30 days after the Termination Date; and

 

(ii)           the product of (x) the Target Bonus and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Termination Date, and the denominator of which is 365, payable in a lump sum within 30 days after the Termination Date; and

 

(iii)          reimbursement (or direct payment) by the Company of the cost of continued life and disability insurance coverage for the Executive under the Company’s plans or under policies obtained by the Executive, through conversion to individual coverage or otherwise, at the same levels in effect at the Termination Date, for 12 months following the Termination Date; and

 

(iv)          Reimbursement by the Company of a portion of the group health continuation coverage premiums paid by the Executive for coverage for the Executive and/or the Executive’s eligible dependents under Title X of the Consolidated Budget Reconciliation Act of 1985, as amended (“COBRA”), equal to the percentage share of

 

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premiums the Company paid for such coverage prior to the Termination Date, for 12 months following the Executive’s Termination Date (provided that the Executive shall be solely responsible for properly electing to continue such coverage under COBRA);

 

(v)           All options acquired under the Company’s 1991 Stock Plan or any other stock-based incentive plan of the Company which have not vested in accordance with the terms and conditions of the options, shall become 100% vested and all such options shall continue to be exercisable for 12 months following the Termination Date (and the Executive expressly consents to the modification of any existing option agreements consistent with this provision);

 

(vi)          If the Termination Date occurs prior to the date on which the bonuses pursuant to the Bonus Plan are paid for the most recently completed fiscal year, but after the end of such fiscal year, the Executive shall remain eligible for the payment of such a bonus notwithstanding the fact that the Executive is no longer employed on the date of payment.

 

(b)           Other Termination.  If the Executive’s employment with the Company terminates other than as a result of an Involuntary Termination during the Employment Period, then the Executive shall not be entitled to receive severance benefits under this Agreement.

 

(c)           Accrued Wages and Vacation; Other Benefits.  Without regard to the reason for, or the timing of, the Executive’s termination of employment, the Company shall pay the Executive (i) any unpaid wages due for periods prior to the Termination Date; and (ii) all of the Executive’s accrued and unused vacation through the Termination Date.  These payments shall be made promptly upon termination and within the period of time mandated by law.  Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan of or any agreement with the Company or any of its affiliated companies at or subsequent to the Termination Date shall be payable in accordance with such plan or program or agreement except as explicitly modified by this Agreement.

 

SECTION 3.   FULL SETTLEMENT.

 

The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others.  In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment.  The Company agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, the Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in section 7872(f)(2)(A) of the Code.

 

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SECTION 4.   SUCCESSORS.

 

(a)           This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives.

 

(b)           This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

 

(c)           The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company or the relevant Business Unit to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company or such Business Unit would be required to perform it if no such succession had taken place.  As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

 

SECTION 5.   MISCELLANEOUS.

 

(a)           This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without reference to principles of conflict of laws.  The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.  This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

 

(b)           All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Executive:

at the Executive’s current address as shown on the records of the Company.

 

If to the Company:

Incyte Corporation

Experimental Station

Route 141 & Henry Clay Road

Wilmington, DE 19880

Attention:  General Counsel

 

or to such other address as either party shall have furnished to the other in writing in accordance herewith.  Notice and communications shall be effective when actually received by the addressee.

 

(c)           Any termination during the Employment Period by the Company for Cause or by the Executive as a result of an Involuntary Termination shall be communicated by notice of termination to the other party hereto given in accordance with Section 5(b) of this Agreement.  Such notice shall indicate the specific termination provision in this Agreement relied upon, set

 

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forth in reasonable detail the facts and circumstances claimed to provide a basis for termination under the provision so indicated, and specify the Termination Date (which shall be not more than 30 days after the giving of such notice).  The failure by the Executive or the Company to set forth in the notice any fact or circumstance which contributes to a showing of Involuntary Termination or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

 

(d)           The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

 

(e)           The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

 

(f)            The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

 

(g)           The Executive and the Company acknowledge that the employment of the Executive by the Company is “at will” and, prior to the Change in Control, the Executive’s employment and/or this Agreement may be terminated by either the Executive or the Company at any time, in which case the Executive shall have no further rights under this Agreement except as expressly set forth in Section 2 hereof.  This Agreement represents the entire agreement and understanding between the parties with respect to the subject matter hereof, and supersedes any other agreement between the parties with respect thereto (provided that it shall not supersede the Executive’s obligations under the Confidential Information and Invention Assignment Agreement).

 

(h)           This Agreement represents the full and entire agreement between the Executive and the Company regarding the subject matter hereof, and supersedes all prior understandings, agreements and obligations between the Executive and the Company, including, but not limited to, the employment agreement between the Executive and the Company effective                                   , and the amendment thereto, effective as of                                       .

 

SECTION 6.   CODE SECTION 409A COMPLIANCE.

 

(a)           To the fullest extent applicable, amounts and other benefits payable under this Agreement are intended to be exempt from the definition of “nonqualified deferred compensation” under section 409A (“Section 409A”) of the Code, in accordance with one or more of the exemptions available under the final Treasury regulations promulgated under Section 409A and, to the extent that any such amount or benefit is or becomes subject to Section 409A due to a failure to qualify for an exemption from the definition of nonqualified deferred compensation in accordance with such final Treasury regulations, this Agreement is intended to comply with the applicable requirements of Section 409A with respect to such amounts or benefits.  This Agreement shall be interpreted and administered to the extent possible in a manner consistent with the foregoing statement of intent.

 

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(b)           Notwithstanding anything in this Agreement or elsewhere to the contrary, for purposes of determining the payment date of any amounts that are treated as nonqualified deferred compensation under Section 409A that become payable under this Agreement in connection with a termination of employment, the Termination Date shall be the date on which the Executive has incurred a “separation from service” within the meaning of Treasury Regulation section 1.409A-1(h), or in subsequent IRS guidance under Code section 409A.

 

(c)           Notwithstanding anything in this Agreement or elsewhere to the contrary, if the Company reasonably determines that (A) the Executive is a “specified employee” (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the Executive’s Termination Date and (B) commencement of any payments or other benefits payable under this Agreement in connection with the Executive’s separation from service, including without limitation, payment of any of the payments on the scheduled payment dates specified in Section 2, will subject the Executive to an “additional tax” under Section 409A(a)(1)(B) (together with any interest or penalties imposed with respect to, or in connection with, such tax, a “Section 409A Tax”), then the Company shall withhold payment of any such payments or benefits until the first business day of the seventh month following the date of the Executive’s Termination Date or, if earlier, the date of the Executive’s death (the “Delayed Payment Date”).  In the event that this Section 8(c) requires any payments to be withheld, such withheld payments shall be accumulated and paid in a single lump sum, with interest at the applicable federal rate provided in section 7872(f)(2) of the Code, on the Delayed Payment Date.

 

(d)           In each case where this Agreement provides for the payment of an amount that constitutes nonqualified deferred compensation under Section 409A to be made to the Executive within a designated period (e.g., within 30 days after the Termination Date) and such period begins and ends in different calendar years, the exact payment date within such range shall be determined by the Company, in its sole discretion, and the Executive shall have no right to designate the year in which the payment shall be made.

 

(e)           The Company and the Executive may agree to take other actions to avoid the imposition of a Section 409A Tax at such time and in such manner as permitted under Section 409A.

 

IN WITNESS WHEREOF, the Executive and the Company, through its duly authorized Officer, have executed this Agreement to be effective as of the day and year first above written.

 

 

	
 
    	
EXECUTIVE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Its
    	
 
    

 

8Exhibit 10.1

 

Equipment Purchase Agreement

 

This Equipment Purchase Agreement (this “Agreement”) is entered into as of April 23, 2012 by and between Automation Engineering, LLC, located at 1415 Profit Drive, Fort Wayne, IN 46808 (“Seller”), and NuPathe Inc., located at 227 Washington Street, Suite 200, Conshohocken, PA 19428 (“Buyer”).

 

WHEREAS, Buyer is engaged in the development and sale of pharmaceutical products and is in the process of pursuing regulatory approval for its iontophoretic patch to treat migraine (the “NuPathe Patch”);

 

Whereas, Buyer is seeking to purchase equipment suitable for the manufacture of commercial quantities of an electronic card assembly (the “E-card”) to be incorporated into the NuPathe Patch; and

 

WHEREAS, Seller is a designer and manufacturer of commercial equipment and has submitted to Buyer, Quotation 11-8858H (the “Quotation”), which is incorporated herein by reference, for the design and manufacture of an Automated Assembly and Test System (“AATS”) to be used by Buyer to assemble and test commercial supplies of the E-card; and

 

WHEREAS, Buyers wishes to purchase the AATS from Seller on the terms set forth herein;

 

NOW, THEREFORE, for good and valuable consideration, AND INTENDING TO BE LEGALLY BOUND, Buyer and Seller hereby agree as follows:

 

1.                                Equipment Manufacture/Purchase/Delivery

 

1.1.                      Seller agrees to: (a) manufacture the AATS at the location specified above (the “Facility”); (b) perform such other services related to the design, testing, delivery and installation of the AATS as more fully set forth in the Quotation; and (c) provide the documentation set forth in Section 3 of the Quotation (the “Documentation” ) and training set forth in Section 4.3 of the Quotation, all in accordance with applicable federal, state and local laws and regulations, the Specifications (as defined below), and the standards and practices that are generally accepted in the industry and exercised by other persons engaged in performing similar services.  All materials, supplies, parts and components incorporated in the AATS shall be new, unless permitted by the Buyer in writing, suitable for the intended use and in accordance with the Specifications.

 

1.2.                      Following the manufacture and Initial Acceptance of the AATS by Buyer at the Facility in accordance with Section 4.1 below, Seller will deliver the AATS to Buyer at Buyer’s designated delivery location (the “Delivery Location”) in accordance with the Quotation, any project plan agreed to by the parties in writing and any other written delivery instructions provide by Buyer to Seller.  Delivery shall be F.O.B., the Facility in accordance with the Quotation.  Buyer shall be responsible for all costs of freight and insurance.  Title to the AATS and the Documentation shall pass upon Final Acceptance of the AATS at the Delivery Location, pursuant to Section 4.2, below; however, risk of loss shall pass to Buyer upon delivery of the AATS packaged and ready for shipment to a common carrier designated by Buyer from Seller’s

 

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Facility. Time is of the essence with respect to Seller’s performance of its obligations hereunder.

 

1.3.                      Buyer will pay Seller an aggregate of $976,250, for the AATS in accordance with the following payment schedule and as more fully set forth in the System Pricing and Payment Terms set forth in the Quotation:

 

·                  10% down with purchase order

·                  20% due at project initiation

·                  30% due upon design approval

·                  20% due upon Initial Acceptance by NuPathe at Automation Engineering

·                  20% due upon Final Acceptance

 

1.4.                      Seller will submit invoices for payment which will be paid by Buyer within thirty (30) days after receipt.  Seller may charge a late payment fee of 1.5% per month, or the maximum amount permitted by law if less than 1.5% per month, for any payment not received within 30 days from invoice date.

 

2.                                Design and Specifications/Project Timeline

 

2.1                         Buyer and Seller agree to jointly define construction and performance specifications for the manufacture of the AATS which shall: (a) include the principal characteristics and components of the AATS, which at the time of delivery shall be suitable for commercial manufacture of the E-Card; (b) conform to the description of the AATS set forth in the Quotation; and (c) be in accordance with NuPathe Equipment Specification ES-1012 (together, the “Specifications”). Buyer and Seller also agree to jointly develop a detailed project plan, including a fabrication timeline for the AATS (“Project Plan”) in accordance with Section 4.2 of the Quotation.  The Specifications and the Project Plan shall be subject to final approval in writing of both Buyer and Seller on or before the date of the final design review meeting for the AATS and shall be incorporated into this Agreement by this reference.

 

2.2                         No change to the Specifications may be made by Seller without the prior written approval of Buyer. Buyer may propose a change in the Specifications by submitting a written request to Seller. Within five (5) business days after receipt of Buyer’s proposal for a change, Seller shall prepare and submit to Buyer an estimate (the “Estimate”) in such detail as Buyer may reasonably require, which shall contain (a) a description of the change, including any changes to the Specifications, (b) any net increase or decrease in the Pricing System, and (c) the effect of the change on the scheduled delivery date.  Buyer shall accept or reject the Estimate within five (5) business days, and if accepted, the parties will execute an amendment to this Agreement, incorporating those changes.

 

3.                                Warranties/Disclaimer/Limitation of Liability

 

3.1                         Seller hereby warrants to Buyer, its successors and assigns, that upon delivery of the AATS to the Delivery Location and for a period of one (1) year from the date of Final Acceptance, as defined in Section 4.2 below, (the “Warranty Period”), the AATS manufactured and delivered hereunder, including, without limitation, any

 

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parts, components, hardware or software, shall be (a) free from defects in material and workmanship; (b) free from defects in design; (c) suitable for the purposes intended; (d) in compliance with the Specifications; and (e) free from liens or encumbrances on title. Delivery, inspection, testing, acceptance or use of or payment for the AATS shall not affect Seller’s obligation under this warranty. During the Warranty Period, Seller agrees to correct defects in the AATS and repair or replace any part, component, hardware or software not conforming to the foregoing warranty promptly, without expense to Buyer, when notified of such nonconformity by Buyer, within ten (10) days unless replacement part delivery lead times dictate otherwise, following discovery of such nonconformity. In the event that Seller fails to correct defects in the AATS or repair replace non-conforming parts, components, hardware or software within thirty (30) days following such notice, Buyer shall have the right to correct such defects or repair or replace such non-conforming parts, components, hardware or software and charge Seller for the cost incurred by Buyer in doing so.

 

3.2                         EXCEPT AS SET FORTH ABOVE, SELLER MAKES NO OTHER WARRANTY, EXPRESS OR IMPLIED. SELLER MAKES NO WARRANTY WITH RESPECT TO ANY EQUIPMENT OR SYSTEM WHICH HAS BEEN ALTERED OR SUBJECT TO MISUSE, ABUSE, OR USE FOR WHICH IT WAS NOT DESIGNED.

 

3.3                         EXCEPT IN CASES OF INTENTIONAL MISCONDUCT OR GROSS NEGLIGENCE, NEITHER PARTY SHALL BELIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES, WHETER ARISING OUT OF BREACH OF ANY EXPRESS OR IMPLIED WARRANTY, BREACH OF CONTRACT, NEGLIGENCE OR OTHERWISE.

 

4.                          Acceptance

 

4.1                               Initial Acceptance - Initial acceptance testing of the AATS shall take place at the Facility in accordance with initial acceptance criteria outlined in Section 2.6 of the Quotation and/or such additional initial acceptance criteria agreed to by the parties in writing, prior to shipment to the Delivery Location (collectively, “Initial Acceptance Criteria”).  In the event Buyer determines, in its sole discretion, that the Initial Acceptance criteria have been met, to Buyer’s satisfaction, Seller shall ship the AATS to the Delivery Location in accordance with Section 1.2 of this Agreement.

 

4.2                               Final Acceptance - Buyer shall inspect the AATS within thirty (30) days after it is received at the Delivery Location (the “ Final Acceptance Period”) to determine, in Buyer’s sole discretion, whether the AATS conforms to the warranties set forth in Section 3.1 of this Agreement (the “Warranties”).  Unless Buyer notifies Seller during the Final Acceptance Period that the AATS fails to conform to the Warranties in one or more respects, at the end of such Final Acceptance Period Buyer shall be deemed to have finally accepted the AATS (“Final Acceptance”).  If Buyer notifies Seller during the Final Acceptance Period that the AATS fails to conform to the Warranties in one or more respects, in addition to any other rights or remedies Buyer may have, Buyer shall not be required to Finally Accept the AATS until such time that Seller repairs on replaces the AATS, including any parts, components, hardware or software such that the AATS fully conforms to the Warranties

 

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5.                          Confidentiality

 

5.1                               All non-public documentation, technical information, software, business information, or other materials that are disclosed by one party (the “Disclosing Party”) to the other (the “Receiving Party”) in the course of performing this Agreement shall be considered the proprietary information (“Proprietary  Information”) of the Disclosing Party.  The Receiving Party shall: (a) hold the Disclosing Party’s Proprietary Information in strict confidence; (b) use the Disclosing Party’s Proprietary Information solely for the purposes of performing this Agreement; and (c) not disclose the Disclosing Party’s Proprietary Information except to the Receiving Party’s employees, contractors and agents having a need-to-know such information for purposes of performing this Agreement and provided that such employees, contractors and agents are bound by written obligations of confidentiality with respect to such Proprietary Information that are comparable to those set forth herein.

 

5.2                               The restrictions set forth in this Section 5 shall not apply to any information that (i) is independently developed by the Receiving Party without use of the Disclosing Party’s Proprietary Information; (ii) is lawfully received by the Receiving Party free of any obligation to keep it confidential; or (iii) is or becomes generally available to the public other than by breach of this Agreement; nor shall the restrictions set forth in this Section 5, in any way, affect or limit Buyers right to use, repair, modify, reproduce, license, sell or otherwise transfer the AATS after Final Acceptance of and payment for the AATS.  In addition, either party may disclose the other party’s Proprietary Information to the extent required by law or regulation provided that, prior to disclosure, the Receiving Party provides written notice to the Disclosing Party to the extent legally permissible and practicable so that the Disclosing Party may seek a protective order or other limitations on disclosure.

 

6.              Indemnification

 

6.1                               Each party shall indemnify and hold the other party and its affiliates, directors, officers, employees, agents and customers harmless from and against any and all damages, losses, liabilities, costs, expenses and fees (including reasonable attorneys’ fees) arising out of or resulting from any third party claim for personal injury or physical property damage caused by the negligence, or willful misconduct or breach of this Agreement by such party or its employees or agents.

 

6.2                              Seller shall be liable for and shall indemnify, defend and save Buyer harmless from any infringement claim, suit or action, alleging that the manufacture, use or sale of the AATS infringes any patent, trademark, copyright, or other proprietary right; except, however, that when such alleged infringement arises (a) as a necessary consequence of Seller’s compliance with specifications furnished by Buyer which describe that aspect of the AATS on which such alleged infringement is based, or (b) results from modification made by Seller in or to the AATS or from the combination of AATS with other products not sold hereunder, then Buyer shall be liable and shall indemnify, defend and save Seller harmless therefrom.

 

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7.              Termination

 

7.1                               Either party shall have the right at any time to terminate this Agreement for non-performance or material breach of this Agreement by the other party where such breach is not cured within thirty (30) days following receipt of notice from the non-breaching party; provided, however, that no such termination of this Agreement shall relieve a breaching party of any liability or obligation it might otherwise have.

 

7.2                               Buyer may terminate this Agreement at any time and for any reason provided that Seller has received notice of such termination more than thirty (30) days prior to the delivery date set forth in the Quotation.  In the event of any such early termination, Buyer shall pay the actual expenses, including allocated overhead and profit, incurred by Seller up to the date that Seller receives such notice of cancellation which have not been previously paid for.

 

8.              Miscellaneous

 

8.1                               Rule 10b-5 Limitations.  Seller acknowledges that Seller is aware that the United States securities laws prohibit any person who has material non-public information about a company or its securities from purchasing or selling securities of such company, or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities. Seller covenants to refrain from purchasing or selling securities of Buyer and from communicating material non-public information about Buyer or its securities in violation of such securities laws.

 

8.2                               Restrictions on Announcements.  Seller shall not make any announcement, oral presentation or publication relating to the specific details of the AATS (provided that any such general discussion or presentation regarding the AATS does not include or disclose any NuPathe Proprietary Information), this Agreement or the services provide hereunder without Buyer’s prior written consent, except as required by law or by court or administrative order, provided  however, that prior written notice is provided to Buyer and that Buyer has the opportunity to appeal such requirement.  Seller shall not employ or use the name of Buyer in any publication or promotional material or in any form for public distribution, without the prior written consent of Buyer.

 

8.3                               Entire Agreement.  This Agreement, together with the Quotation, the Project Plan and the Specifications, constitutes the entire agreement between the parties with respect to the subject matter hereof, and supersedes any and all prior and contemporaneous communications, representations, agreements or understandings, whether oral or written.  No amendment or modification of this Agreement, the Quotation or the Specifications shall be binding unless in a writing signed by both parties.

 

8.4                               Conflicting Terms and Conditions.  If and to the extent that the terms and conditions of this Agreement are inconsistent with the Quotation, Specifications, or Project Plan, the terms and conditions of this Agreement shall apply. ANY TERMS OR CONDITIONS OF ANY PURCHASE ORDER OR ACKNOWLEDGMENT GIVEN OR RECEIVED BY EITHER PARTY WHICH ARE ADDITIONAL TO

 

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OR INCONSISTENT WITH THIS AGREEMENT SHALL HAVE NO EFFECT AND SUCH TERMS AND CONDITIONS ARE HEREBY EXCLUDED AND REJECTED BY EACH PARTY

 

8.5                               Construction of Agreement.  The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that party’s right to subsequently enforce and compel strict compliance with every provision of this Agreement.  If any provision of this Agreement or the application thereof shall be invalid or unenforceable, the remainder of this Agreement shall be unaffected thereby and each remaining term or provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law.  This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to provisions of conflicts of law.

 

8.6                         Assignment. Neither Seller nor Buyer may assign this Agreement or any rights hereunder or delegate the performance of any duties hereunder without the prior written approval of the other party, which approval shall not be unreasonably delayed or withheld; provided, however, that without such consent, Buyer may assign this Agreement to an affiliate or in connection with the transfer or sale of all or substantially all of its assets, stock or business, or its merger, consolidation or combination with or into another entity.  Subject to the foregoing, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the respective heirs, administrators, successors and permitted assigns of the parties.

 

8.7                         Survival.  Any terms of this Agreement which by their nature extend beyond its performance, expiration or termination (including, without limitation, Sections 3, 5, 8.1, 8.2 and this Section 8.7) shall survive any termination or expiration of this Agreement, however caused.

 

8.8                         Notices.  Any notices given under this Agreement shall be in writing and shall be given by personal delivery, or sent by (a) facsimile transmission (with message confirmed during normal business hours); (b) first class mail, postage prepaid; or (c) Federal Express (or equivalent overnight delivery service), delivery charges prepaid.  All notices shall be given to a party at its respective address set forth above, or at such other address as such party may specify by notice in accordance with this Section 8.8.  A notice shall be deemed given when actually received; provided, that if any facsimile notice is received after 5:00 P.M. local time at the place of receipt, it shall be deemed to have been given as of the next following business day.

 

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8.9                         Signatories.  This Agreement may be executed in counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when joined, shall together constitute one and the same agreement.  Any photocopy, facsimile or electronic copy of this Agreement, or of any counterpart, shall be deemed the equivalent of an original.

 

ACCEPTED AND APPROVED BY AND BETWEEN:

 

	
AUTOMATED ENGINEERING, LLC
    	
 
    	
NUPATHE INC.
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Matthew D. Mummert
    	
 
    	
By:
    	
/s/   Jane H. Hollingsworth
    
	
 
    	
 
    	
 
    
	
Name:   Matthew D. Mummert
    	
 
    	
Name:   Jane H. Hollingsworth
    
	
 
    	
 
    	
 
    
	
Title:   Vice President - Sales
    	
 
    	
Title:   CEO
    
					

 

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