Document:

Document

Exhibit 10.15 
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (I) IS NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.
     CONFIDENTIAL
EXECUTION COPY

COMMERCIAL SUPPLY AGREEMENT

BETWEEN

CMC ICOS BIOLOGICS, INC.

and

MACROGENICS, INC.

244238347 v3
 

Commercial Supply Agreement
244238347 v3
1

                                CONFIDENTIAL

EXECUTION COPY

CONTENTS

CONTENTS    2

1.    DEFINITIONS AND INTERPRETATION    4

2.    MANUFACTURING SUPPLY AND APPLICABLE STANDARDS    14

3.    RAW MATERIALS, CUSTOMER MATERIALS AND EQUIPMENT    15

4.    TIMELINE, SPECIFICATION AND PROJECT MANAGEMENT    16

5.    FORECASTS, ORDERS, MANUFACTURING CAPACITY AND FAILURE TO SUPPLY18

6.    DELIVERY AND EXAMINATION    25

7.    BATCH PRICE, PAYMENT TERMS AND MILESTONE PAYMENTS    28

8.    CUSTOMER AUDITS, REGULATORY INSPECTIONS & MATTERS    30

9.    WARRANTIES    33
10.    CONFIDENTIAL INFORMATION    35
11.    INTELLECTUAL PROPERTY    37
12.    INDEMNITIES AND LIABILITY    39
13.    PRODUCT RECALL    42
14.    TERM AND TERMINATION    43
15.    TECHNOLOGY TRANSFER    46
16.    FORCE MAJEURE    47
17.    APPLICABLE LAW, JURISDICTION AND DISPUTE RESOLUTION    48
18.    MISCELLANEOUS    48
APPENDIX ONE    53
APPENDIX TWO    54

Commercial Supply Agreement
244238347 v3
2

APPENDIX THREE    56
 

Commercial Supply Agreement
244238347 v3
3

THIS COMMERCIAL SUPPLY AGREEMENT is made as of December 11, 2017 (the “Effective Date”).

BETWEEN

(1)    CMC ICOS BIOLOGICS, INC., duly incorporated under the laws of the state of Washington and having its principal place of business at 22021 20th Ave SE, Bothell, Washington, USA (hereinafter referred to as "CMC"); and,

(2)    MACROGENICS, INC., duly incorporated under the laws of the state of Delaware and having its principal place of business at 9704 Medical Center Drive, Rockville, MD 20850 (hereinafter referred to as "Customer").

CMC and Customer may each be referred to herein as a “Party” and collectively as the “Parties.”

RECITALS

(A)    Customer is engaged in the research, development, manufacture and sale of pharmaceuticals and biologics, including the product designated by Customer as margetuximab ("MGAH22");

(B)    CMC and Customer have previously entered into a Master Services Agreement for the development and manufacture (for clinical evaluation) of MGAH22;

(C)    In addition to development and scale-up activities, CMC also provides commercial manufacturing activities for biological products to pharmaceutical and biotechnology companies; and

(D)    Customer wishes to contract with CMC for the provision of the commercial supply of Product (as defined below) as more clearly defined by the Services (as defined below); and

(E)    CMC is willing to provide the Services to the Customer on the terms and conditions set out in this Agreement in exchange for the Batch Price.

NOW THEREFORE, THE PARTIES AGREE as follows:
 

1.    DEFINITIONS AND INTERPRETATION

1.1    For the purposes of this Agreement, the terms defined in this clause shall have the respective meanings set forth below.

Commercial Supply Agreement
244238347 v3
4

						
	"Affiliate"
	any company, partnership or other entity which directly or indirectly through one or more intermediaries controls or is controlled by, or is under common control with a Party. For the purpose of this definition control means the direct or indirect beneficial ownership of more than fifty percent (50%) of the voting share capital in such company, partnership or entity or the legal power to control the general management and policies of such company, partnership or entity;

	"Agreement"
	this Agreement including all Appendices and any amendments to the foregoing made in accordance with this Agreement;

	"Appendix" or "Appendices"
	one or more of the Appendices to this Agreement;

	“Applicable Laws”
	all applicable ordinances, rules, regulations, laws, guidelines, requirements and court orders of any kind whatsoever of any national (e.g., the FDA, EPA, etc,), supra-national (e.g., the European Commission, the Council of the European Union, or the European Medicines Agency), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity of the US or EU applicable to the Services;

	“Authority Submission”
	has the meaning set out in Clause 8.3;

	"Batch"
	BDS that is intended to be of uniform character and quality, within specific limits, and is produced in one cell culture run using the Cell Line at a specified bioreactor scale, and such purification, analytical and further processing steps as described in a Work Statement applicable to the BDS harvested from that run resulting in
one lot of BDS;

 

						
	“Batch Price”
	the price payable for each Batch as initially described in the Appendix Two and as may be amended by agreement between the Parties or by operation of Clause 7;

	“Binding Batch”
	has the meaning set out in Clause 5.8;

	“BLA”	a Biologics License Application and any amendments or supplements thereto filed with the FDA pursuant to 21
C.F.R. Part 601 or any other application required for the purpose of marketing and selling a biological product filed with a Regulatory Authority outside the United States, including with respect to the EU a Marketing Authorization Application;

Commercial Supply Agreement
244238347 v3
5

						
	“Bulk Drug
Substance or BDS”
	means the Product in bulk, as expressed by the Cell Line and harvested and purified in bulk from a cell culture run pursuant to the applicable Process;

	"Business Day"

“Calendar Day” “Calendar Quarter”
	any day which is not a Saturday, a Sunday or a U.S. public holiday;

any day;

a 3-month period beginning on January 1, April 1, July 1, or October 1 of each year;

	“Calendar Year”
	a period of time commencing on January 1 and ending on the following December 31; provided that the first Calendar Year of the Term shall begin on the Effective Date and end on the first December 31 thereafter, and the last Calendar Year during the Term shall end upon the expiration of the Term;

	“Campaign”	a series of Batches manufactured consecutively in accordance with the Process;

	“Cancellation Fee”

"Cell Line"
	has the meaning set out in Clause 5.10;

the mammalian cell line [***] and any progeny clone of the foregoing cell line(s);

	

"Certificate of Analysis"
	

CMC’s standard form certificate of analysis confirming that Product to which the certificate relates meets the

		Specification and such other criteria as identified on the certificate;

	“Certificate of Compliance”
	means a document, signed by an authorized representative of CMC, attesting that a particular Batch was manufactured in accordance with cGMP and other
Applicable Laws;

	"cGMP"
	Current Good Manufacturing Practices as promulgated under each of the following as in effect on the Effective Date and as amended or revised after the Effective Date:
(a) the U.S. Food, Drug & Cosmetics Act (21 U.S.C. § 301 et seq.) and related U.S. regulations, including 21 Code of Federal Regulations (Chapters 210, 211, 600 and 610) and other FDA regulations, policies, or guidelines in effect at a particular time for the manufacture, testing and quality control of investigational drugs; (b) EudraLex Volume 4;
(c) the ICH guide Q7 “ICH Good Manufacturing Practice Guide for Active Pharmaceutical Ingredients;” and (d) any other laws, regulations and statutes set forth by a Government Authority applicable to the manufacture of compounds and products by CMC under this Agreement;

Commercial Supply Agreement
244238347 v3
6

						
	“Change in Control”
	in relation to a body corporate, the occurrence of an event or circumstance where a person who is not presently able to do any of the following things becomes able to do one of the following things (whether directly or indirectly or through one or more intervening persons, companies or trusts):

(a)    control the composition of more than one half of the body's board of directors;

(b)    be in a position to cast, or control the casting of, more than one half of the maximum number of votes that might be cast at a general meeting of the members of the body; or

(c)    hold or have a beneficial interest in more than onehalf of the issued share capital of the body;

	"CMC Facility"
	CMC’s manufacturing facility in Bothell, Washington or another facility agreed on by the Parties in writing;

	“CMC Failure”
	has the meaning set out in Clause 13.3;

 

Commercial Supply Agreement
244238347 v3
7

						
	"CMC Intellectual Property Rights"
	Intellectual Property rights and CMC Know-How owned by CMC and used in the Services;

	"CMC Know-How"
	all information, techniques, trade secrets, data and technical information known to CMC which is not of general public knowledge, other than provided to CMC by Customer, or developed during the Services;

	“Commencement Date”
	in respect of a cGMP Batch the date on which (i) [***], or
(ii) [***]; whichever is the earlier;

	"Commercial Quality Agreement" (QAg)”
	the agreement between the Parties defining the quality responsibilities, including cGMP standards, regarding the performance of the Services;

	“Commercially Reasonable Efforts”
	with respect to CMC, such level of efforts and resources required to carry out an obligation under this Agreement in a sustained manner consistent with the efforts normally used by companies that provide manufacturing and related services in the biopharmaceutical industry, as applicable, of comparable size and resources to CMC, for a similar activity with respect to the scope of Services to be provided under this Agreement;

	“Committee Member”
	has the meaning set out in Clause 4.9;

	"Confidential Information"
	means all information disclosed by, or on behalf of, the Disclosing Party to Recipient Party relating to this Agreement and includes:

(I)    information disclosed in writing, orally or by any other means;

(II)    information disclosed before, after or on the date of this Agreement; and

(iii) information relating to the Disclosing Party’s operations, processes, plans, intentions, production information, know how, data, formulae, expertise, methodology, drawings, specifications,
design rights, trade secrets, market opportunities

 

Commercial Supply Agreement
244238347 v3
8

						
		and business affairs, and any new and novel combinations thereof;

	"Customer Intellectual Property Rights"
	Intellectual Property rights and Customer Know-How owned by Customer or licensed to Customer by a Third Party covering any aspect of the Services, Cell Line, BDS or materials, techniques or processes used in the Services;

	"Customer Know- How"
	all information, techniques, trade secrets, data and technical information known to Customer in connection with the Cell Line, Customer Materials, Process and Product which are (i) not known to CMC prior to being provided to CMC by or on behalf of Customer; or (ii) not of general public knowledge;

	"Customer Materials"
	the Cell Line, vectors, plasmids and all other materials and equipment supplied by Customer, its Affiliate or agent to CMC or made available to CMC by or on behalf of Customer or purchased by CMC on behalf of Customer;

	"Defect"	has the meaning in Clause 6.4;

	"Defect Notice"	has the meaning in Clause 6.4;

	"Deliverables"
	the data, results and materials generated from the performance of the Services including Drug History Record and Product;

	"Delivery" or "Delivered"
	

has the meaning in Clause 6.2;

	“Delivery Date”

“Disputed Deliverable”
	means, as applicable, the date a Batch is to be delivered or is actually Delivered;

has the meaning in Clause 6.9;

	“Drug History Record”
	all lot disposition documentation relevant to a cGMP Batch to be provided to Customer with the Product from that cGMP Batch, including but not limited to manufacturing batch records, Certificates of Compliance and Certificates
of Analysis;

 

Commercial Supply Agreement
244238347 v3
9

						
	"Effective Date"
	the date set forth on page 3 as the effective date of this Agreement;

	“EMA”	European Medicines Agency or any successor agency;

	"Exceptional Batches"
	has the meaning in Clause 5.7;

	“Existing Agreement”

“Facility Modification”

“Facility Modification Notice”

"FDA”
	the Master Services Agreement between the Parties dated June 4, 2014;

has the meaning set out in Clause 4.8;

has the meaning set out in Clause 4.8;

means the United States Food and Drug Administration, or its successor agency;

	“Firm Order”
	has the meaning set out in Clause 5.3.1;

	"Forecast"	has the meaning set out in Clause 5.1;

	“Fundamental Change”
	means a Change of Control, merger, acquisition or change of management of CMC or Affiliates;

	"Group"
	in respect of the relevant Party, its Affiliates and holding companies and the Affiliates of those holding companies;

	"Intellectual Property"
	all intellectual property rights, including, without limitation, patents, supplementary protection certificates, petty patents, utility models, trademarks, database rights, rights in designs, copyrights (whether or not any of these are registered or capable of being registered) and including all applications and the right to apply for registered protection of the foregoing and all inventions, trade secrets, know- how, techniques and confidential information and other proprietary knowledge and information, and all rights and forms of protection of a similar nature or having equivalent or similar effect to any of these which may subsist anywhere in the world, in each case for their full term and
together with any renewals or extensions;

 

Commercial Supply Agreement
244238347 v3
10

						
	"Joint Steering Committee”
	has the meaning set out in Clause 4.9;

	"Minimum Volumes”
	the minimum number of Batches that must be ordered per Calendar Year by Customer as stipulated in Clause 5.3.4;

	"Non-Fault Delays"	has the meaning set out in Clause 4.1;

	“Order”	a Firm Order or a Semi-Firm Order;

	“Other Customers”

"Permitted Recipients"
	has the meaning set out in Clause 5.12;

(a)    the directors, officers, employees, Testing Laboratories or professional advisers who are required, on a strict need to know basis, in the course of their duties to receive and consider the Confidential Information of the other Party for the purpose of enabling the relevant Party to perform its obligations under this this Agreement; and
(b)    in communications with existing or prospective licensees, sublicensees or collaborators, and consultants and advisors of each Party in connection with transactions or prospective transactions or pursuant to the conduct of such Party’s business; provided that in the case of (a) and (b), such Persons are under obligations of confidence no less onerous than those set out in Clause 10 imposed on the recipient Party;

	“Person(s)”	any individual, partnership, joint venture, limited liability company, corporation, firm, trust, association, unincorporated organization, governmental authority or agency, or any other entity not specifically listed herein;

	“PPQ-Batches”
	the process performance qualification batches required for registration of the Product.

	

"Process"
	

the method for manufacture, harvesting and purification of the Product as defined in Customer approved manufacturing batch records;

	"Product"
	Customer’s    biologic    known    as    margetuximab manufactured in Batch form as Bulk Drug Substance;

	"Project Manager”
	has the meaning set out in Clause 4.9;

 

Commercial Supply Agreement
244238347 v3
11

						
	"Project Team"

“Purchase Order”
	has the meaning set out in Clause 4.10;

has the meaning set out in Clause 5.6.1;

	“Quality Release(d)”
	certification by CMC’s Quality Department that a Batch of BDS complies with its Specifications as confirmed by release testing;

	"Raw Materials"
	media, resins, chemicals, solvents, filters, membranes, disposable analytical test kits, disposable bags, and other items consumed for the manufacture of Products in accordance with this Agreement as well as any subcontracted analytical testing performed by Testing Laboratories during the performance of the Services;

	“Recall”	any action to withdraw from supply or distribution or to recover title to or possession of quantities of Product sold or shipped to third parties (including, without limitation, the voluntary withdrawal of Product from the market or correction) or the detention or destruction of any Product by any Regulatory Authorities;

	“Regulatory Approval”
	the approval, license or authorization of the applicable Regulatory Authority necessary for commercialization of the Product, including approval of a Biologics License Application or Market Authorization Application for the
Product;

	“Regulatory Approval Submission”

“Regulatory Obligations"
	the earlier of the first submission of a Biologics License Application or Market Authorization Application for the Product;

those mandatory regulatory requirements applicable in Europe and the United States of America and Canada to the manufacture of cGMP Product for human use;

	“Regulatory Authority”
	the FDA in the United States or any health regulatory authority in another country in Europe and Canada that is a counterpart to the FDA and holds responsibility for allowing development of the Product and/or granting Regulatory Approval for a Product, including the EMA, and any successor(s) thereto;

	“Release For Further Processing”
	has the meaning set out in Clause 6.11;

 

Commercial Supply Agreement
244238347 v3
12

						
	“Representative(s)	has the meaning set out in Clause 4.10;

	"Semi-Firm Order"
	has the meaning set out in Clauses 5.3.2 and 5.3.3;

	"Services"
	manufacturing of the Product by CMC and all activities to be conducted by CMC related to the manufacturing of the Product under this Agreement;

	“Shipping Company”

"Shipping Guidelines"
	a shipping company or other agent designated by Customer to receive a Delivery on behalf of Customer;

the storage and transport guidelines for the Product that are determined by mutual written agreement of the Parties;

	“Slot”
	in respect of CMC’s cGMP manufacturing suite the period of time the suite is reserved in preparation for and the performance of a Batch;

	"Specification"
	the specification for the Product as defined in Appendix 1 or as may otherwise be agreed between the Parties or modified in accordance with Clause 4.5 which includes (i) specifications for BDS and Raw Materials, (ii) manufacturing, testing and packaging instructions and specifications for Product in accordance with the Process,
(iii) storage and shipping requirements, and (iv) any other technical information necessary to manufacture a Batch;

	"Standard Operating Procedures" or "SOPs"
	the standard operating procedures of CMC which define CMC's methods of performing activities applicable to the Services;

	“Storage Cost”
	has the meaning set out in Clause 7.8;

	“Supply Failure”
	has the meaning set out in Clause 5.17;

	“Term”	the Initial Term (as defined in Clause 14.1) and all Additional Terms (as defined in Clause 14.1);

	"Testing Laboratories"
	the Third Parties listed in the Quality Agreement which shall conduct testing or provide other services to support Quality Release;

	“Timelines”
	collectively and individually the dates to manufacture Product and render other Services to Deliver Product according to the Forecast and/or each accepted Commencement Date and Delivery Date;

 
						
	“Third Party(ies)”
	any person, company, organization or entity other than CMC, Customer or their Affiliates;

	“Work Statement”
	the Work Statement #1 effective between the Parties, dated [***], and all amendments thereto and the subsequent agreement between the Parties, effective
[***].

Commercial Supply Agreement
244238347 v3
13

1.2    Additional Definitions. Each of the following definitions is set forth in the clause of this Agreement indicated below:

						
	Definition:	Clause:
	Binding Batches
Reserve Payment Producer Price Index
	5.8

7.1

7.3

1.3    In this Agreement (except where the context otherwise requires):

1.3.1    any reference to a recital, clause or appendix is to the relevant recital, clause or appendix of or to this Agreement and any reference to a sub-clause or paragraph is to the relevant sub-clause or paragraph of the clause or appendix in which it appears;

1.3.2    the table of contents and clause headings are included for convenience only and shall not affect the interpretation of this Agreement;

1.3.3    use of the singular includes the plural and vice versa and use of any gender includes the other genders;

1.3.4    a reference to a "Party" is a reference to a party to this Agreement and a reference to a "Party" includes a reference to that Party's successors in title, permitted assignees and transferees (if any);

1.3.5    a reference to “records”, “data”, “documents” and “information” refers to such items in tangible, and electronic and visual mediums unless specified to the contrary; and
 

1.3.6    any phrase introduced by the terms "including", "include", "in particular" or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms.

1.4    The Appendices form an integral part of this Agreement shall have effect as if set out in full in the body of this Agreement and any reference to this Agreement includes the Appendices.

1.5    Where there is any inconsistency between the Appendices and the main body of this Agreement, the conflicting terms of the main body of this Agreement shall, unless expressly specified to the contrary, prevail.

2.    MANUFACTURING SUPPLY AND APPLICABLE STANDARDS

Commercial Supply Agreement
244238347 v3
14

2.1    During the Term CMC shall use Commercially Reasonable Efforts to manufacture Product:
(a)    according to the Process; (b) that meets Specifications; (c) in compliance with Applicable Laws and Regulatory Obligations; and (d) in accordance with the terms of this Agreement and the Commercial Quality Agreement.

2.2    During the Term, CMC shall use Commercially Reasonable Efforts to manufacture Product in the quantity of Batches that are the subject of each Firm Order and Semi-Firm Order pursuant to the forecast mechanism set out in Clause 5 and in accordance with the terms and requirements set out in this Agreement. Customer shall purchase from CMC and CMC shall supply to Customer the Product in the quantity of Batches in accordance with the terms of this Agreement.

2.3    CMC will comply with quality standards as agreed to in the Commercial Quality Agreement.

2.4    CMC shall maintain a completed Drug History Record and such other records as specified in the Commercial Quality Agreement for the period of time specified in the Commercial Quality Agreement. CMC shall retain and store samples of all Quality Released Product for such period as may be required by Applicable Laws and Regulatory Obligations and the Commercial Quality Agreement, which in the absence of a definitive time period shall be [***] from the date of release or Delivery. If the Parties agree, CMC shall retain such samples for a longer period at the Customer's cost.
 

Third Party Subcontractors
2.5    CMC may subcontract:

2.5.1    to its Affiliates, any part of the Services (provided that the Affiliates may not further subcontract those parts of the Services), with the prior written consent of Customer (such consent not to be unreasonably withheld, delayed or conditioned);

2.5.2    to Testing Laboratories; and;

2.5.3    to any other reputable qualified Third Party, any part(s) of the Services (provided CMC identifies the specific Services to be performed) with the prior written consent of Customer (such consent not to be unreasonably withheld, delayed or conditioned).

CMC shall remain responsible for the Services to be rendered by Third Parties to whom it subcontracts and shall ensure such Third Parties perform such subcontracted Services in compliance with the terms and conditions of this Agreement.

3.    RAW MATERIALS, CUSTOMER MATERIALS, AND EQUIPMENT

3.1    CMC shall be responsible for obtaining Raw Materials required for the manufacture of Product in reasonable quantities consistent with the Forecast and Purchase Orders. 

Commercial Supply Agreement
244238347 v3
15

CMC shall ensure that all Raw Materials (i) conform to their respective Specifications; and (ii) are stored and handled in accordance with cGMP, Applicable Laws and Regulatory Obligations and the Commercial Quality Agreement.

3.2    [***]

3.3    CMC will be responsible for risk of loss of Customer Materials while in CMC’s control.

3.4    All equipment acquired by CMC to perform Services for which the entire purchase cost is paid for or charged to Customer, shall be owned by Customer. Customer shall be responsible for all delivery, installation, maintenance (except as provided in the immediately following sentence) and storage costs associated with such equipment. CMC shall use such equipment solely to render the Services and in accordance with Customer’s instructions CMC shall maintain such equipment and be responsible for any damage to (excluding normal wear and tear), or loss or theft of, the equipment while in its possession and shall insure it accordingly, except to the extent such damage, loss or theft is caused by the negligence or wilful misconduct of Customer. Upon termination or expiration of this
 

Agreement, CMC shall transfer such equipment to Customer at Customer’s cost unless otherwise agreed.

4.    TIMELINE, SPECIFICATION AND PROJECT MANAGEMENT

Timeline
4.1    CMC shall use Commercially Reasonable Efforts to maintain the Timeline. Notwithstanding that obligation, the Parties acknowledge and agree that the Timeline may be varied as agreed by CMC and the Customer in writing in order to accommodate delays or changes caused by or contributed to by (i) actions or omissions of the Customer (or its agents); and/or
(ii) additional activities added to the Services; and/or (iii) Force Majeure Situations or other circumstances beyond CMC's reasonable control ("Non-Fault Delays"). Non-Fault Delays shall exclude delays caused by (i) [***]; (ii) [***]; and/or (iii) [***] (collectively, “Fault-Based Failures”).

4.2    In the event of any Non-Fault Delays, CMC shall update the Timeline as agreed with the Customer and, shall endeavour to keep the revised Timeline as close as possible to the Timeline in its form as it existed immediately prior to the Non-Fault Delays.

4.3    The Timeline may be amended by agreement between CMC and Customer provided that the revised Timeline is set out in writing and agreed by the Project Team.

4.4    Where the Timeline has been amended in accordance with this Clause 4, it shall be automatically binding upon the Parties. CMC shall keep Customer updated as to the current Timeline on a reasonable frequency. Customer may at any time on a 

Commercial Supply Agreement
244238347 v3
16

reasonable basis request an update on the progress of the Services compared to the current Timeline.

Specification, Process & Quantities
4.5    The Specifications shall be amended only as agreed upon in writing by the Parties and signed by an authorized representative of each Party; provided, however, that the Parties agree to cooperate to amend or supplement the Specifications to the extent reasonably necessary to comply with changes in Applicable Laws or as Customer may reasonably request from time to time (provided such request is made in good faith). CMC shall follow the change control procedures set forth in the Commercial Quality Agreement for any proposed changes in the Specifications. For the avoidance of doubt, where the Parties cannot agree to modify, amend or update the Specification, the previous Specification as agreed to by the Parties shall apply.

4.6    For clarity the Parties acknowledge that all quantities of Product derived from a Batch are [***], except to the extent caused by a breach of this Agreement or CMC’s negligence or wilful misconduct.
 

4.7    CMC shall not make any change to the Process, except by prior written approval of Customer for such change. The Parties agree to cooperate to amend or supplement the Process to the extent reasonably necessary to comply with changes in Applicable Laws and/or Regulatory Obligations. CMC shall follow the change control procedures set forth in the Commercial Quality Agreement for any proposed changes in the Process.

4.8    In the event that CMC intends to change or modify the CMC Facility in a manner that is likely to have an impact on the Process or Product or require submissions to or approvals from any Regulatory Authority related to the Process or Product (“Facility Modification”), CMC [***] and shall work with Customer through the JSC to ensure disruptions to the Timeline and Product Delivery are minimized and impact to the validated state of the Product and Process are evaluated and minimized.

Project Manager, Joint Steering Committee and Project Team
4.9    Each Party shall, [***], appoint an individual as a project leader ("Project Manager") who shall be responsible for leading and co-ordinating the day to day operation of the Services. In addition, [***], each Party shall select two of their senior technical staff (each a "Committee Member"), one of whom (for each Party) may be a Project Manager, to form the steering committee who shall have responsibility for providing leadership and strategic oversight of the Services governed by this Agreement ("Joint Steering Committee" or “JSC”).

4.10    Separate from the Joint Steering Committee, the Parties shall each name and notify the other of representatives (“Representatives”) who shall form the project team and will be responsible for the day to day performance of the Services including planning, executing and discussing issues regarding the Forecast, Timeline, the Services and 

Commercial Supply Agreement
244238347 v3
17

communicating between the Parties (“Project Team”). Any disputes or issues that cannot be readily resolved by the Project Team shall be referred to the Joint Steering Committee for resolution.

4.11    Each Party's Project Manager shall, subject to the oversight of the Joint Steering Committee, (i) manage the relationship between the Parties, (ii) oversee the performance of the Services and the activities of the Project Team, (iii) undertake actions delegated to them by the Joint Steering Committee and (iv) be the principal point of contact for the Services. The Project Managers shallmeet upon reasonable request either in person or by telephone or video-conference and each Party shall bear its own costs for attending such meetings.

4.12    The Joint Steering Committee shall be responsible for (i) making decisions regarding issues outside the scope of the Project Team or Project Managers, (ii) reviewing the decisions of the Project Team and/or Project Managers, (iii) providing a forum for the Parties to exchange information and coordinate their respective activities regarding the Services, (iv) providing a forum to discuss any technical difficulties or changes to Services or Batch Price triggered by a change to the Services or in accordance with Clause 7.4 as well as resolving
 

any disputes or disagreements before escalation to the dispute resolution provided for in Clause 17, and (v) ensure that intent of this Agreement is maintained throughout the Term. The Joint Steering Committee shall meet on a reasonably regular basis during the Term.

4.13    At regular intervals the Representatives shall schedule Project Team meetings for the purpose of overcoming any issues with Forecasts, delivery of Product or the performance of all other aspects of the Services and providing an initial forum for discussing and resolving any difficulties or hurdles encountered in the performance of the Services. Such meetings shall be conducted by telephone conference or, if necessary, by face-to-face meetings at an agreed frequency unless particular difficulties arise which dictate the need for more frequent meetings. Each Party shall be responsible for their own costs in attending and conducting the Project Team meetings.

4.14    Any decision by the Project Team, the Project Managers or Joint Steering Committee which has the effect of amending the Services in any way must, before it becomes binding, be recorded in writing and signed by both Parties in accordance with Clause 18.4 and 18.5.

5.    FORECASTS, ORDERS, MANUFACTURING CAPACITY AND FAILURE TO SUPPLY

Forecasts

Commercial Supply Agreement
244238347 v3
18

5.1    Commencing on the Effective Date, and thereafter [***], Customer shall, subject to the provisions of this clause, deliver to CMC a [***] forecast of Customer's requirements for CMC to manufacture Product [***] ("Forecast").

5.2    Each Forecast shall set out the number of Batches of Product to be manufactured for Customer [***] covered by the Forecast together with the requested Commencement Date and Delivery Date for each Batch covered by the Forecast. In preparing a Forecast Customer shall attempt to aggregate the number of Batches required throughout the period covered by the Forecast into contiguous Campaigns.

5.3    In respect of each Forecast:

5.3.1    [***] by the Forecast shall be a definitive and binding order on Customer (a "Firm Order");

5.3.2    [***] by the Forecast shall be [***] binding on Customer (a “Semi-Firm Order”);

5.3.3    [***] by the Forecast shall be [***] binding on Customer (the order referred to in this
Clause 5.3.3, also a "Semi-Firm Order");

5.3.4    (i) [***], the Minimum Volumes shall [***], (ii) [***], the Minimum Volumes shall be [***], and (iii) subject to Clause 5.3.5, during [***], without the prior written consent of CMC, the Minimum Volume shall be [***];

CMC shall reserve the Slots for the Minimum Volumes as described in Clause
5.3.4    and manufacture the Batches ordered for such Minimum Volumes. Customer shall be entitled to reserve additional slots that CMC may have available or [***].
5.3.5     Customer shall have [***] option [***]. Customer may exercise this option [***] (“Option”); provided that [***]. Provided that Customer has [***] in accordance with the preceding sentence, Customer shall have the right to exercise the Option [***]. If Customer exercises the Option, [***].

Customer shall also have the option [***]. The [***] to the Minimum Volume.

5.4    The Forecasts are prepared for and intended to provide CMC with clarity as to the Customer's requirements for Product. Forecasts shall be provided by Customer on [***] as provided above and each subsequent Forecast shall reflect the previous relevant Forecasts provided by Customer such that:

5.4.1    the quantity of Product set out in [***] shall, respectively, in the next Forecast, [***] (other than with CMC's prior written consent);

5.4.2    the quantity of Product set out in [***] shall, respectively, in the next Forecast, [***] in the next Forecast and [***]; and (ii) [***] and may [***];
 

Commercial Supply Agreement
244238347 v3
19

5.4.3    the quantity of Product set out in [***] shall, respectively, in the next Forecast, [***] and may be [***]; and (ii) [***] and may be [***].

5.4.4    Customer shall provide a new projection for the [***] in accordance with the principles set out in Clause 5.3.

5.5    Should Customer [***] Forecast in accordance with the preceding provisions of this Clause 5, a Forecast [***] under this clause by Customer where:

5.5.1    [***]; and

5.5.2    [***]; and

5.5.3    the [***] of the [***] Forecast shall be the [***] of the [***].

Orders

5.6    Orders for Product shall be provided by Customer and accepted by CMC as follows:

5.6.1    Customer shall provide written or electronic purchase orders (each, a “Purchase Order”) for each Firm Order in conformance with the relevant Forecast [***] Forecast submitted by Customer under Clause 5.1.

5.6.2    Each Purchase Order shall include: (a) a Commencement Date [***] for each Batch subject to such Purchase Order; and (b) a [***] subject to such Purchase Order, unless otherwise agreed by CMC.

5.6.3    CMC shall be deemed to accept each Purchase Order and its Commencement Date and Delivery Date, [***], CMC provides written notice to Customer with an alternative Commencement Date [***] Commencement Date and the corresponding
 

Delivery Date shall be [***] as the time difference between the [***]. Upon acceptance of each Purchase Order, CMC shall provide the confirmed Commencement Date of each Batch in the Purchase Order.

5.6.4    No terms contained in any Purchase Order, order acknowledgment or similar document shall be construed to amend or modify the terms of this Agreement and in the event of any conflict, this Agreement shall prevail and control, unless the Parties otherwise expressly agree in writing by making reference to both this Agreement and the alternative terms.

5.7    Notwithstanding the limits on ordering under a Forecast, CMC may, in response to Customer's written request, elect to manufacture additional Batches of Product in a [***] beyond the quantity submitted in a Firm Order for that same [***] ("Exceptional Batches"). CMC's obligation to manufacture Exceptional Batches shall only arise 

Commercial Supply Agreement
244238347 v3
20

upon CMC's written acceptance whereby the Exceptional Batches accepted by CMC shall be deemed part of the Firm Order(s) for the relevant [***].

5.8    All quantities of Batches that are the subject of a Firm Order or a Semi-Firm Order (i.e., the binding portion of a Semi-Firm Order) shall (i) be binding (“Binding Batches”) upon Customer and CMC and (ii) may not be delayed or cancelled by Customer or CMC except as provided for in this Agreement. Partial Batches subject of a Firm or a Semi-Firm Order shall be rounded up to the nearest whole Batch.

5.9    Should Customer fail to order the Minimum Volume in any Calendar Year (as determined based on the Commencement Date of each Batch in any Calendar Year), then Customer shall pay to CMC a sum calculated as [***]. CMC shall be entitled to invoice in December of each Calendar Year, and Customer shall pay such invoice [***] in accordance with the provisions of Clause 7. Notwithstanding the foregoing, in the event that, in accordance with Clause 5.6.3, CMC provides an alternative Commencement Date and Delivery Date that [***], the Batches affected by such change shall [***] Commencement Date and Delivery Date [***].

5.10    Should Customer delay or cancel a Binding Batch in any Calendar Year, then Customer [***] (“Cancellation Fee”); provided that if Customer cancels any Batch(es), for the purpose of determining the Cancellation Fee, [***]. CMC shall be entitled to invoice the cancelled or delayed Batch [***], and Customer shall pay such invoice [***] in accordance with the provisions of Clause 7. For the purposes of determining the Minimum Volume, [***].

5.11    Notwithstanding the provisions of Clause 5.10, [***]. In the event the [***], Customer shall not owe CMC the Cancellation Fee for such cancelled Batch. [***] under Clause 5.9.

5.12    Notwithstanding the provisions of Clause 5.10, CMC shall [***] Clause 5.9.

5.13    In the case of cancelled Batches for which Raw Materials have been purchased by CMC and paid by Customer and which cannot be used to manufacture future Batches subject to the Forecast, Customer shall be entitled to elect to either [***].

5.14    CMC shall use the Forecasts to plan for and, as appropriate, reserve Slots in its cGMP manufacturing suite for those Batches to be manufactured under Firm Orders and Semi- Firm Orders according to the then current Timeline.

5.15    Where a Timeline is amended and such amendment affects the scheduled Slot(s) for those Batches which are the subject of a Firm Order, CMC shall update its manufacturing schedule and reserve a new Slot for each affected Batch which, subject to reserved slots under CMC's existing manufacturing schedule for the entire CMC Facility, shall be reserved as near in time to the existing vacated Slots as CMC’s then current schedule will permit.

Supply Uncertainty and Supply Failure

Commercial Supply Agreement
244238347 v3
21

5.16    Should CMC become aware or conclude that it will be unable to meet the Timeline for manufacture or Delivery of one or more Binding Batch(es) (“Supply Uncertainty”), then CMC shall as soon as reasonably practicable provide notification in writing to Customer of such circumstances, identify the Batches that may be affected bysuch Supply Uncertainty, identify what CMC believes will cause such Supply Uncertainty and explain what efforts CMC is taking to minimize such Supply Uncertainty (a “Supply Uncertainty Notification”). In the event that Customer receives a Supply Uncertainty Notification or a Supply Uncertainty occurs, CMC and Customer [***] in accordance with the current Forecast and any Purchase Orders accepted by CMC for Batches that may be or are affected by such Supply Uncertainty.

5.17    In the event the manufacture of the Product is [***] (“Supply Failure”) or Customer receives a Supply Uncertainty Notification stating that the manufacture of the Product [***], Customer shall be entitled to engage an alternate supplier to manufacture the Batchesand CMC shall support transfer of the Process and test methods to such alternate supplier (including conducting a technology transfer consistent with the transfer of information described in Clause 15);

5.18    If the Supply Failure results primarily from any Fault-Based Failure or other cause within CMC’s reasonable control (including any default or failure with respect to the Facility), the following shall apply until the Supply Failure is resolved:

5.18.1    The Forecast and Customer’s obligations thereunder will be suspended such [***].

5.18.2    CMC will reserve capacity for the [***], CMC and Customer shall agree on allocation of the reserved Minimum Volume capacity across each remaining Calendar Year of the Term.

5.18.3    If Customer engages an alternate supplier, [***], up to the applicable number of Batches included in the Minimum Volume for the relevant Calendar Year.

5.18.4    [***]

5.18.5    [***]
 

5.18.6 At Customer’s sole option, any [***] that cannot be manufactured due to a Supply Failure shall be credited against other payments owed by Customer to CMC under this Agreement.

5.19    If the cause of a Supply Failure results primarily from Customer’s act or omission:

5.19.1    CMC shall use Commercially Reasonable Efforts to adjust the Timeline to allow for time to resolve the cause for the Supply Failure. Until the Supply 

Commercial Supply Agreement
244238347 v3
22

Failure is resolved Customer shall continue to be obligated to pay for Binding Batches.

5.19.2    The Minimum Volume obligation shall be unaffected during the Supply Failure and [***].

5.20    If the cause of a Supply Failure results primarily from a Force Majeure Situation:

5.20.1    CMC and Customer shall work collaboratively through the JSC to discuss and find ways for CMC to promptly minimize such Supply Failure and ensure supply of Product as soon as practicable in accordance with the current Forecast and any Purchase Orders currently in effect for Batches that are affected by such Supply Failure.

5.20.2    CMC shall use Commercially Reasonable Efforts to adjust the Timeline to allow for time to resolve the cause for the Supply Failure. Until the Supply Failure is resolved [***].

5.20.3    The Forecast and Customer’s obligations thereunder will be suspended such [***] until CMC and Customer agree the Supply Failure has been resolved and manufacturing resumes.

5.20.4    [***]

5.20.5    [***]

5.21    If CMC is able to utilize uncommitted capacity of the CMC Facility to remedy any Supply Failure, but at the time when that capacity arises CMC is under an obligation to endeavour to remedy similar deficiencies for any other customer(s) of the CMC Facility, CMC shall liaise with all customers concerned to try to agree on an appropriate arrangement for using that (or that and other) available capacity for all concerned. In the event that no agreement can be reached, then the capacity shall be allocated taking into consideration each
 

customer’s number of batches subject to firm orders, CMC’s manufacturing schedule and availability of raw materials.

6.    DELIVERY AND EXAMINATION

Delivery and Examination
6.1    CMC shall provide Customer with advance written notice of each anticipated Delivery Date and, in any event, [***].
6.2    Except as set out in Clause 6.3 or in the Specifications, the Product that CMC manufactures pursuant to this Agreement shall be released to Customer [***] Customer that the Product is available for collection. The Deliverables will be deemed to have been delivered in accordance with the following: (a) with respect to Product, 

Commercial Supply Agreement
244238347 v3
23

delivery will be deemed to have occurred [***]; and (b) with respect to all other Deliverables, delivery will be deemed to have occurred [***] (“Deliver”, "Delivery" or "Delivered"). Collection may be arranged at any time during normal business hours on Business Days or such other time as may be agreed by the Parties.

6.3    Upon Delivery of the relevant Batch, and no later than [***] after such Delivery, CMC shall provide the [***] shall be delivered by courier with registered delivery or by other electronic means agreed by Customer.

6.4    [***] examine and/or test the Deliverables for any defect or non-conformity, including in the case of Product non-conformity with the Specifications and cGMP standards which Deliverables are specified to meet (a “Defect” or “Defective). Where any alleged Defect is identified, Customer shall notify CMC by written notice (“Defect Notice”) [***]; provided that with respect to any defect in the Deliverables that was not, and could not reasonably be expected to have been found upon Delivery by exercise of ordinary care in inspection and testing, Customer shall provide written notice [***].

6.5    A Defect Notice must identify (i) the Deliverable and, in the case of Product, the Batch from which the Product was derived, (ii) the date(s) of Delivery, (iii) reasonable detail, including, as applicable, test results, of the Defect, (iv) where applicable full disclosure of the methodology of all analytical tests performed on the Deliverables and the results of those tests, (v) confirmation that, after Delivery to Customer, the Deliverables have been stored
 

and transported in accordance with applicable Shipping Guidelines, and (vi) where the Customer asserts that the Defect is due to CMC, the reasons why the Customer makes that assertion. If a Defect in any Deliverable is not notified to CMC in accordance with the provisions and time limits stipulated in Clause 6.4 the Deliverable shall be deemed accepted and free of Defect and Customer shall have no further remedy against CMC in respect of that Deliverable.

6.6    CMC shall store at the CMC Facility any such Deliverable [***] on behalf of Customer. Storage of a Deliverable at CMC’s premises after Delivery shall be at Customer’s sole risk and liability except that CMC shall be responsible for damage to such Deliverables to the extent any damage is caused during such storage solely by an act of CMC's negligence, wilful misconduct and/or illegal conduct. If Deliverables have not been collected by Customer or Customer's Shipping Company [***], CMC shall notify Customer of the outstanding collection. CMC shall be entitled [***] to continue to store it [***], unless the Parties have previously negotiated for longer term storage or Customer informs CMC in writing to dispose of such Deliverables.

Consequences of Defective Product
6.7    Upon receipt of the Defect Notice CMC shall promptly investigate whether or not the Defect is due to CMC’s negligence or failure to comply with its obligations hereunder and shall report to Customer [***].

Commercial Supply Agreement
244238347 v3
24

6.8    If a Defect is primarily due to CMC’s fault, and not as a result of Customer action or inaction or any Third Party (other than an agent of CMC performing Services) then CMC shall replace the Defective Deliverables at no charge to Customer. CMC shall use Commercially Reasonable Efforts, having regard to its other obligations and commercial commitments to third parties and subject to availability of Raw Materials in the timing of such replacement, to replace such Defective Deliverables [***].

6.9    If there is a dispute regarding whether or not a Deliverable is Defective ("Disputed Deliverable"), then (a) analysts from both parties will directly communicate to determine the Parties' respective methods of analysis are the same and are being executed in the same manner, and to attempt to determine whether any non-compliance may have been caused during the shipment of the sample from the CMC Facility, and (b) carefully controlled and split samples as agreed should be sent from one site to another for testing in an attempt to reach agreement (which may involve Customer sending a representative and a sample of the Disputed Deliverable to CMC, and the Parties conducting jointly agreed upon tests on the Customer sample of the Disputed Deliverable and a sample of the Disputed Deliverable retained by CMC). The Parties will use good faith efforts [***] to resolve whether the Disputed Deliverable is Defective due to CMC's failure to manufacture in accordance with this Agreement.
 

6.10    In the event the Parties cannot resolve their dispute in the manner described, a mutually agreed-upon independent laboratory, acting as an expert and not as an arbitrator, shall be asked to test the Disputed Deliverable. The costs of such independent laboratory shall be borne by the Parties equally; provided, however, the Party that is determined to be incorrect in the dispute shall be responsible for all such reasonable costs and shall reimburse the correct Party for its share of such reasonable costs incurred. The decision of such independent laboratory shall be in writing and shall be binding on both CMC and Customer. During the further dispute resolution described above in this section, at Customer’s request, CMC shall use Commercially Reasonable Efforts to supply Customer with replacement Product subject to availability of Raw Materials and capacity in CMC’s Facility, which replacement Product Customer shall purchase on the same terms as Product that is the subject of the independent testing. With respect to all Product that Customer properly rejects, Customer shall destroy all remaining unused Product as soon as possible after CMC’s request and at CMC’s expense. In no event may Customer use any of the rejected Product for any human clinical testing or trials after it becomes aware of the basis for such rejection (and Customer shall indemnify CMC for all liabilities, costs and damages incurred by CMC resulting from Customer’s breach of this limitation on use).

Release For Further Processing
6.11    Subject [***].

Title and Risk

Commercial Supply Agreement
244238347 v3
25

6.12    Subject to Clause 6.6, title and risk in the Deliverables shall pass to Customer on Delivery.

Packaging, Storage and Transport
6.13    Unless otherwise agreed, all Product and Deliverables shall be packaged by CMC in accordance with its applicable packaging SOPs and Applicable Laws. Customer shall inform CMC in advance of any special packaging and labeling requirements and CMC shall accommodate reasonable customer specific packaging requests.

6.14        Customer shall, prior to the collection of the Deliverables, inform CMC of its Shipping Company. Customer shall coordinate with such Shipping Company for the shipment of the Product and CMC shall not be responsible for any shipping costs of the Shipping Company.
 

Upon collection, Customer shall be responsible for ensuring that the Deliverables are stored and transported in accordance with the Shipping Guidelines.

6.15    Except as otherwise agreed by the Parties, CMC shall not be responsible for or have an obligation to clear for export or import any Deliverables that CMC (or its subcontractors) generates or manufactures pursuant to this Agreement.

7.    BATCH PRICE, PAYMENT TERMS AND MILESTONE PAYMENTS

Reserve Payment and Batch Price
7.1    Customer shall pay CMC: (a) [***], and (b) [***] under the Amended Agreement effective between the parties on or about the Effective Date (the foregoing payments [***], “Reserve Payments”). CMC shall invoice Customer for such amounts upon the occurrence of the above-referenced events and Customer shall [***].

7.2    Additional payment for Batches will be due as described in Appendix Two. The Batch Price in Appendix Two is stated in U.S. Dollars and is exclusive of all taxes, duties, or other fees of whatever nature imposed by or under the authority of any state, government or public authority (other than taxes on CMC’s income), or any external costs, Raw Materials or shipping and associated costs that CMC incurs to provide the Services, which Customer agrees to pay in addition to the Batch Price.

7.3    The Batch Price stated in Appendix Two may be adjusted on an annual basis, commencing with the first anniversary of the Effective Date and thereafter on each anniversary of the Effective Date in an amount not to exceed [ * * * ] . For the avoidance of doubt, if the [***]. For example, the Batch Price stated in Appendix Two shall [***], the Batch Price shall be [***]. The [***] Batch Price shall be [***]. The Batch Price [***]. CMC shall give written notice to the Customer of the new Batch Price schedule [***]; provided however that CMC [***].

7.4    If there are any material and unforeseen changes in cGMP or manufacturing regulations promulgated pursuant to enabling legislation under a statute that:

Commercial Supply Agreement
244238347 v3
26

7.4.1    are specific to the Product and not of general requirement for biologics contract manufacturing services; or

7.4.2    which result in the financial returns under this Agreement being substantially affected to CMC's detriment other than by the acts or omissions of CMC, then the Parties shall negotiate in good faith a way to continue the Services while overcoming such financial investment or detriment. For purposes of clarity, CMC [***].

Invoicing & Payment Terms
7.5    All invoices will be in U.S. Dollars and Customer agrees to pay all sums due hereunder in
U.S. Dollars.

7.6    CMC will issue invoices in accordance with the provisions of Appendix Two.

7.7    All invoices shall be paid by wire transfer to the following account:
 ACCOUNT DETAILS:

[***]

Unless expressly stated on an invoice to the contrary, all invoices are issued net and if not disputed in good faith in writing before the due date, will be paid in full without any deductions, deferment or set off by Customer [***]. If Customer disputes an invoice, Customer shall notify CMC in writing of the dispute, which notice must include a description of the dispute; provided that if Customer disputes an invoice and intends to withhold payment of such invoice, Customer shall notify CMC in writing of the dispute prior to the due date of such invoice. The Parties shall use commercially reasonable efforts to resolve the dispute as quickly as possible. If the dispute [***], the CEOs of the parties shall meet and resolve the dispute. Customer shall, subject
 

to the other terms and conditions of this Agreement, pay amounts due that are not in dispute.

7.8    Raw Materials costs for all Services will be invoiced to Customer as set forth in Appendix Two. If Customer requests CMC purchase Raw Materials in excess of what is needed to meet the Forecast (“Excess Raw Materials”), Customer shall pay to CMC, [***].

7.9    All shipping [***]

Late Payments
7.10    If the undisputed portion of an invoice is not settled by Customer in full in accordance with this Agreement and after providing the Customer [***], CMC may, at its discretion:

7.10.1    charge Customer, which Customer will pay, [***] and/or;

Commercial Supply Agreement
244238347 v3
27

7.10.2    [***], suspend the performance of the Services. Where performance is suspended, CMC shall have no liability to Customer for such suspension or delay in the Timeline and the Batch Price for any Batches that are the subject of a Firm Order or a Semi- Firm Order which are delayed as a result of the suspension shall become due and payable by Customer.

Payments due to Customer
7.11    Where any payment, credit or refund is properly due to the Customer under this Agreement, the Customer can elect to:

7.11.1    have that amount refunded to it by CMC [***]; or

7.11.2    have that amount set-off against any further amount payable by the Customer under this Agreement or any future agreement the Parties enter into.

7.12    Where Customer elects to have an amount set-off against any further amount payable by the Customer under this Agreement and, subsequent to that credit, the Customer remains entitled to a payment, credit or refund, CMC shall refund that amount to the Customer [***].

8.    CUSTOMER AUDITS, REGULATORY INSPECTIONS & MATTERS

Audits
8.1    Customer’s audit rights are as set forth in the Commercial Quality Agreement.
 

Regulatory Inspections
8.2    Regulatory inspections are addressed in the Commercial Quality Agreement. CMC shall use Commercially Reasonable Efforts to make available the CMC Facility, subcontractor facilities, records, data, documents, information and/or personnel as are reasonably necessary or useful pursuant to and during regulatory inspections by government authorities as further set forth in the Commercial Quality Agreement. For the purposes of this Clause
8.2    records, data, documents and information refers to copies in tangible, and electronic and visual mediums.

Regulatory Filings and Standards
8.3    During the preparation for filing with any Regulatory Authority of any documentation for the Product which is or is equivalent to the Regulatory Authority’s Chemistry and Manufacturing Controls portion of an approval application, including any BLA (“Authority Submission”), Customer shall provide CMC with [***]. CMC shall provide Customer with its comments [***]. For clarity, CMC’s [***] applies to [***] shall be provided by CMC to the Customer [***].

8.4    For clarity, the Parties agree that in reviewing the documents referred to in Clause 8.3 above, CMC’s role will be limited to [***]. As such, CMC shall not assume responsibility or liability for the accuracy of the filings with Regulatory Authorities other than for 

Commercial Supply Agreement
244238347 v3
28

information provided by CMC in writing and intended for inclusion in regulatory filings. The sole responsibility of the preparation and filing of all regulatory documents with the Regulatory Authorities with respect to the Product shall be borne by Customer.

8.5    Customer shall provide to CMC all documents relating to the Product and services performed hereunder by CMC that are reasonably requested by CMC and required to comply with any Regulatory Authority’s pre-approval inspection of the CMC Facility, including but not limited to, development reports, Chemistry and Manufacturing Controls documentation and stability data, subject to Customer being able to legally provide such documents to CMC.

8.6    [***], Customer shall provide CMC with a copy of the documents incorporating such data so as to permit CMC to verify the accuracy and regulatory validity of such documents as it related to the CMC-generated data.

8.7    CMC will provide Customer with information and data regarding the manufacture of Product to the extent reasonably requested by Customer or necessary for Customer to prepare and
 

defend any inquiries from the FDA or other Regulatory Authorities to satisfy regulatory requirements with respect to Product. Without limiting the foregoing,

8.7.1    CMC shall provide regulatory support to Customer for a Regulatory Authority’s pre-approval inspection of the CMC Facility and during review of any Authority Submission [***].

8.7.2    Customer will inform CMC of requests for information from Regulatory Authorities during review of an Authority Submission for which CMC support is needed. CMC will use diligent efforts to adhere with the turn-around times requested by Customer to support such regulatory responses.

8.8    If CMC is required by the FDA, EMA, or any other Regulatory Authority to modify the CMC Facility or validate or re-validate the Process that will impact the manufacturing of the Product, CMC shall notify Customer and consult with Customer regarding the required activities. Customer shall [***] and not generally for CMC’s manufacturing activities for other customers, provided, however that CMC shall be responsible for the costs of any such validation or re-validation arising primarily from (a) CMC’s breach of this Agreement or CMC’s negligence or wilful misconduct or (b) a modification to the CMC Facility that is generally required for CMC’s manufacturing activities.

Person in Plant

8.8    CMC shall permit [***] with reasonable advance notice [***] to observe manufacturing or packaging pursuant to this Agreement on-site at the CMC Facility during the Term. 

Commercial Supply Agreement
244238347 v3
29

Customer’s representatives shall have access to CMC’s production and quality control and storage areas related to the Product (including when in operation) and to Product related documentation. Customer agrees that Customer’s representatives shall comply with CMC’s reasonable rules, regulations and safety procedures (that are provided to Customer) and cGMP while on CMC’s premises. In addition, CMC shall provide reasonable accommodations for Customer’s representatives, including a desk and access to the internet, phones, copiers, fax machines and other miscellaneous office equipment as requested.

Validation
8.9    The Parties recognize [***].
8.10    Upon successful completion of [***] as specified in the Work Statement.
 

8.11    CMC is responsible to ensure that all equipment, facilities, utilities and computer systems used for the production of the GMP steps of the Product are qualified or validated in accordance with all applicable GMP regulations and guidance documents and are maintained in a validated state

9.    WARRANTIES

Customer Warranties
9.1    Customer warrants and represents to CMC that:

9.1.1    to its knowledge, it has the right to supply and deliver to CMC the Customer Materials (including the Cell Line provided by or on behalf of Customer where applicable) and the Customer Intellectual Property Rights for use in the performance of the Services and the manufacture of Product pursuant to this Agreement;

9.1.2    to its knowledge, the Materials and Safety Data Sheet for the BDS is accurate and the Cell Line provided by or on behalf of Customer and any Customer Materials are free from all contaminants including, without limitation, virus, bacteria or other vectors and if handled and used in accordance with the recommendations and guidelines in the Materials and Safety Data Sheet supplied by Customer will not cause a health hazard or biohazard; and

9.1.3    to its knowledge the use of any of the Cell Line, Customer Materials, Customer Intellectual Property Rights, and the Process and the manufacture of the Product in accordance with this Agreement does not infringe any valid Intellectual Property rights of third parties, except that no warranty is given with respect to any CMC Intellectual Property Rights;

9.1.4    the license of Customer Intellectual Property Rights to CMC for the Services is lawfully granted; and

Commercial Supply Agreement
244238347 v3
30

9.1.5    to its knowledge the Cell Line provided by or on behalf of the Customer and Customer Materials are viable, adequate and suitable for the effective performance of the Services and manufacture of the Product according to the Specification and the information regarding the Cell Line and the Process provided to CMC by or on behalf of the Customer is complete and accurate.

CMC Warranties
9.2    CMC warrants and represents to Customer that:

9.2.1    it has the necessary permits, facilities, Third Party contractors and skilled personnel necessary of a biologics contract manufacturer for the regular provision of manufacturing and development services of biologic material and required for performance of the Services in accordance with this Agreement;
 

9.2.2    all Deliverables shall be Delivered free of encumbrances or liens but for the avoidance of doubt no warranty is given in this Clause 9.2.2 in respect (i) non- infringement of Third Party Intellectual Property Rights, or (ii) freedom to use;

9.2.3    to its knowledge, the CMC Intellectual Property Rights used in the Services and the performance of the Services do not infringe Third Party Intellectual Property rights, except that no warranty is given with respect to the Cell Line, Process, Customer Materials and Customer Intellectual Property Rights;

9.2.4    where the Services are to be performed according to cGMP, CMC shall apply the appropriate cGMP standards to the performance of such Services; and

9.2.5    Services and Manufacture of Product will be performed in accordance with applicable industry standards and all Applicable Laws;

9.2.6    the Product at the time of Delivery shall comply with the Specifications, cGMP and any other criteria specified in the Certificate of Analysis for such Product;

9.2.7    none of CMC or its Affiliates, or any officer of CMC or its Affiliates or any employee, consultant or other contractor engaged by CMC to perform activities under this Agreement, (a) have been debarred, or are subject to a pending debarment, or will use in any capacity in connection with this Agreement any person who has been debarred pursuant to section 306 of the FDCA, 21 U.S.C. § 335a, (c) has been listed by any federal and/or state agencies as excluded, debarred, suspended or otherwise been made ineligible to participate in federal or state healthcare programs or federal procurement or non-procurement programs (as that term is defined in 42 U.S.C. 1320a-7b(f), (c) has been convicted of a criminal offense related to the provision of healthcare items or services, or (d) is subject to any such pending action or is the subject of a conviction or pending action described in such sections. CMC shall notify Customer in writing immediately if CMC, its 

Commercial Supply Agreement
244238347 v3
31

Affiliates or any of their respective officers or any person or entity used by CMC or its Affiliates to perform activities under this Agreement is subject to any of the foregoing, or if any action, suit, claim, investigation, or proceeding relating to the foregoing is pending, or to the best of CMC’s knowledge, is threatened.

Mutual Warranties
9.3    Each Party warrants and represents to the other that:

9.3.1    it has the right and corporate authority to enter into this Agreement and the execution, delivery and performance of this Agreement does not conflict with any agreement, instrument or understanding, oral or written, to which such Party may be bound, nor violate any law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it;
 

9.3.2    it shall obtain and during the Term maintain in force all appropriate permits and regulatory licenses required in connection with such Party’s handling, transport and storage of the Cell Line and Product;

9.3.3    neither Party shall perform any actions that are prohibited by local and other anti- corruption laws (including the U.S. Foreign Corrupt Practices Act, collectively “Anti- Corruption Laws”) that may be applicable to one or both Parties. Without limiting the foregoing, neither Party shall make any payments, or offer or transfer anything of value, to any government official or government employee, to any political party official or candidate for political office or to any other third party related to the transaction in a manner that would violate Anti-Corruption Laws.

Exclusion of other express and implied warranties
9.4    Except as provided in this Agreement, to the maximum extent permitted by the applicable law of this Agreement, except for those express warranties set out above, the Parties neither make nor give any other express or implied (whether by statute, custom or otherwise) warranties in relation to each of their respective obligations, duties or activities owed or performed under this Agreement and hereby exclude any other such express or implied warranty in respect of that subject matter.

10.    CONFIDENTIAL INFORMATION

10.1    In consideration of one Party (the “Disclosing Party”) making available its Confidential Information to the other (the “Recipient Party”), the Recipient Party hereby undertakes that it shall, and shall procure that each of its Permitted Recipients, shall:

10.1.1    treat and safeguard as private and confidential all the Confidential Information of the Disclosing Party;

Commercial Supply Agreement
244238347 v3
32

10.1.2    use the Confidential Information of the Disclosing Party only during the Term for those purposes reasonably necessary to perform its obligations or exercise its rights under this Agreement and without prejudice to the generality of the foregoing, not use any Confidential Information of the Disclosing Party to obtain any commercial advantage over the Disclosing Party;

10.1.3    ensure the proper and secure storage of all Confidential Information of the Disclosing Party applying standards of care reasonably expected and no less stringent than standards applied to protection of Recipient Party's own confidential information; and

10.1.4    not at any time without the Disclosing Party’s prior written consent disclose or reveal, whether directly or indirectly, any of the Confidential Information of the Disclosing Party to any person whatsoever except its Permitted Recipients, and then only on a limited need to know basis, who shall be informed by it of the confidential nature of such Confidential Information and of the confidentiality terms
 

of this Agreement and for whom it hereby accepts full responsibility in the event that any such person shall breach the duty of confidence imposed upon them;

10.2    The obligations in this Agreement regarding Confidential Information do not apply to information:

10.2.1    which, at the time of its disclosure by the Disclosing Party, was wholly available to the public;

10.2.2    which becomes generally available to the public after such disclosure otherwise than by reason of a breach of any of the undertakings in this Agreement, including any breaches of confidence by the Recipient Party or its Permitted Recipients;

10.2.3    which is, at the time of such disclosure and as evidenced by the Recipient Party's written records, lawfully already within its possession; or

10.2.4    was independently discovered or developed by the Recipient Party without the use of or reference to the Disclosing Party’s Confidential Information as evidenced by written records.

10.3    In addition, notwithstanding Clause 10.1, the Recipient Party may disclose Confidential Information to the extent the disclosure is required by Applicable Law or a valid order of a court or other governmental body having jurisdiction; provided, however, that the Recipient Party gives reasonable prior written notice to the 

Commercial Supply Agreement
244238347 v3
33

Disclosing Party of such required disclosure and makes a reasonable effort to assist the Disclosing Party in obtaining, a protective order preventing or limiting the disclosure and/or requiring that the Confidential Information so disclosed be used only for the purposes for which the law or regulation requires, or for which the order was issued. Notwithstanding anything to the contrary herein, Customer may use and disclose Confidential Information of CMC (a) in preparing and submitting BLAs to Regulatory Authorities or marketing Products subject to Section 8.3, or
(b)    in communications with existing or prospective investors, acquirers, merger partners, consultants, advisors, licensees or collaborators under obligations of confidentiality and non-use consistent with this Clause 10.

10.4    Other than the limited and restricted rights of use set out in this Clause 10 nothing in this Agreement intends to or has the effect of granting any right, title, license or interest in or to the Recipient Party or Permitted Recipients in respect of the Disclosing Party's Confidential Information.

10.5    If the Recipient Party or any of its Permitted Recipients is/are compelled to disclose any Confidential Information in the circumstances described in Clause 10.3 of this Agreement or a breach or threatened breach of this Clause 10 occurs or becomes apparent, the Recipient Party shall inform the Disclosing Party in writing of such obligation or fact as soon as possible after it is informed, or becomes aware, of it and if possible, before any Confidential Information is disclosed, so that (if the Disclosing Party in its absolute discretion shall see fit) a protective order or other appropriate remedy may be sought. The Recipient
 

Party agrees to assist and co-operate (and shall procure that each of its Permitted Recipients shall, as appropriate, assist and co-operate) in any action which the Disclosing Party may decide to take.

10.6    Each Party shall be permitted to disclose the terms of this Agreement, in each case under appropriate confidentiality provisions substantially equivalent to those of this Agreement, to any actual or potential acquirers, merger partners, licensees, sublicensees, investors and professional advisors on a need to know basis and to its board of directors in connection with the corporate governance of such Party. Except as otherwise provided for in this Agreement (including this Clause 10.6) or otherwise required by law or administrative authorities, neither Customer nor CMC shall disclose any terms or conditions of the Agreement to any Third Party without the prior written consent of the other Party.

10.7    At the request of the Disclosing Party, the Recipient Party shall promptly destroy (on request) or return to the Disclosing Party any and all Confidential Information (including copies of documents, computer records and records on all other media) then in its possession or under its control except where such Confidential Information is covered under surviving license rights between the Parties. Notwithstanding the foregoing, the Parties may retain copies of any document containing the Disclosing 

Commercial Supply Agreement
244238347 v3
34

Party's Confidential Information solely for the purpose of determining the scope of the obligations under this Agreement or to comply with regulatory obligations. Further, the Recipient Party shall not be required to return or destroy any electronic back-up tapes or other electronic back-up files that have been created solely by their automatic or routine archiving and back-up procedures.

10.8    The Parties acknowledge that they have received Confidential Information under other agreements between each other. The Parties hereby agree that Confidential Information received under those earlier agreements may be used for the purposes of performing the Services under this Agreement or exercising rights under this Agreement.

10.9    The provisions of this Clause 10 shall survive expiration or termination of the Agreement for a period of 10 years.

10.10    For the avoidance of doubt, the provisions of this Clause 10 do not restrict the Customer’s right to disclose or otherwise deal with the Deliverables after such Deliverables have been Delivered to the Customer.

11.    INTELLECTUAL PROPERTY

Pre-Existing Intellectual Property
11.1    Any Intellectual Property owned by a Party or licensed by a Third Party to a Party as of the Effective Date or before the commencement of the Services (“Pre-Existing IPR”) shall remain the sole and absolute property of the Party that owned or was licensed to use such Pre-Existing IPR. Nothing in this Agreement shall act as any assignment or transfer of the Pre-Existing IPR. The Pre-Existing IPR shall not be licensed to the other Party under this Agreement unless an express license is granted hereunder.
 

Customer's grant of Intellectual Property License for the Services
11.2    The Customer hereby grants to CMC for the Term a non-exclusive, royalty-free, non- sublicensable (except to CMC’s Affiliates performing Services in accordance with this Agreement), limited license in respect of Customer Intellectual Property Rights and Customer Agreement IPR solely to the extent the same is required and necessary for the proper performance of the Services. This license:

11.2.1    does not prevent the Customer from granting a license to or making any use of its Pre-Existing IPR; and

11.2.2    terminates automatically upon the expiry or termination of this Agreement, whichever is the earlier.

Intellectual Property created in the course of the Services
11.3    Without affecting Clauses 11.1 and 11.2, all data, results, information, processes, materials, trade secrets, know-how and corresponding Intellectual Property newly generated by CMC exclusively in its performance of the Services and which [***] shall 

Commercial Supply Agreement
244238347 v3
35

be owned by Customer (“Customer Agreement IPR”). CMC shall cooperate with Customer and execute any appropriate documents to fully effect the foregoing.

11.4    All Intellectual Property other than Customer Agreement IPR generated by CMC under the Services shall be owned by CMC (“CMC IPR”).

License to CMC IPR
11.5    CMC hereby grants to Customer a general, royalty free, sub-licensable, worldwide license to use CMC Intellectual Property Rights or CMC IPR to the extent that the same is necessary or useful for the exploitation (including to make, have made, use, sell, offer for sale, distribute or import) of the Product or use of the Cell Line or Process to manufacture Product. Except to Permitted Recipients or as otherwise provided in this Agreement, nothing in the foregoing shall permit Customer to make any disclosure of Confidential Information or CMC's Know-How to a Third Party without the express prior written consent of CMC. This license does not prevent CMC granting a license to or making any use of CMC Intellectual Property Rights or CMC Agreement IPR.

Right to file for protection
11.6    Each Party may file patent protection on any Intellectual Property it owns in accordance with this Clause 11 above and the other Party shall promptly upon request co-operate at the requesting Party’s reasonable expense, with any requests to assist or enable the Party’s protection including but not limited to signing and delivering documents and other information necessary for the valid application and prosecution of any such patent.

 Party’s Names & Press Release
11.7    Except as otherwise provided for in this Agreement or required by Applicable Law, neither Party shall use the name of the other Party or of the other Party’s Affiliates, directors, officers
 

or employees in any advertising, news release, publication or other without the prior consent of the other Party, which shall not be unreasonably withheld or delayed.

12.    INDEMNITIES AND LIABILITY

 CMC’s Indemnity
12.1    Customer shall indemnify, defend and hold harmless CMC and each of its directors, officers, employees and Testing Laboratories (the “CMC Parties”) against any and all losses, demands, liabilities, damages, costs and expenses (including but not limited to, court costs and reasonable documented attorney’s fees and expenses together with any applicable taxes thereon) ("Losses") arising out of any Third Party claim, action of proceeding (“Claims”) that the CMC Parties may or have suffered or incurred directly as a result of the following:

Commercial Supply Agreement
244238347 v3
36

12.1.1    any infringement or alleged infringement (including direct, contributory, inducement and wilful infringement) or breach of any Third Party Intellectual Property rights by CMC’s use of the Cell Line, Process, Customer Intellectual Property Rights, Customer Materials in the performance of the Services or manufacture of Product hereunder;

12.1.2    any claims resulting from the use, handling, distribution, marketing, safety or sale of the Product or BDS, including any derivative, conjugated form or formulation of the same, by or on behalf of Customer;

12.1.3    any use, handling, distribution, marketing, safety or sale by or on behalf of Customer of Product which was the subject of a [***] in accordance with Clause 6.13; or

12.1.4    any acts or omissions of an auditor of Customer while on CMC’s premises.

In addition, Customer agrees to indemnify and hold harmless CMC from and against any Losses arising out of contamination or damage to the CMC Facility to the extent caused by the Customer Materials except to the extent such Losses are caused by the Customer Materials not being handled in accordance with the Materials and Safety Data Sheet. The foregoing indemnities shall not apply to the extent the Losses or Claims arose from CMC's or any of its representatives or contractors (including Testing Laboratories) negligence, gross negligence, breach of this Agreement, or wilful misconduct (other than wilful infringement covered by Section 12.1.1) or are covered by an indemnity under Clause 12.2.

 Customer’s Indemnity
12.2    CMC shall promptly indemnify, defend and hold harmless Customer and each of its directors and officers, employees, agents, contractors or representatives (“Customer Parties”) against any and all Losses arising out of any Claim that the Customer Parties may or have suffered or incurred directly as a result of the following:
 

12.2.1    the negligence or wilful misconduct (other than wilful infringement covered by Section 12.1.1) of CMC or any CMC representative or CMC Parties or a breach of this Agreement by CMC;

12.2.2    a material inaccuracy in a Certificate of Analysis such that certified Product at the time of Delivery does not meet Specification when certified to meet Specification or CMC’s failure to manufacture Product or BDS according to cGMP, the Process or the Specifications; or

12.2.3    the infringement or alleged infringement or breach of any Third Party rights, including Intellectual Property rights, by CMC to the extent such infringement is due to CMC’s use of the CMC Intellectual Property Rights in the performance of the Services, but excluding claims where such use is caused 

Commercial Supply Agreement
244238347 v3
37

by the combination of the CMC Intellectual Property Rights with the Cell Line, Customer Materials, Process or Customer Intellectual Property Rights.

The foregoing indemnities shall not apply to the extent the Losses or Claims arose from the Customer or any of the Customer Parties' negligence, gross negligence, breach of this Agreement or wilful default or are covered by an indemnity under Clause 12.1.

Indemnification Procedure
12.3    The Party (the "Indemnitee”) that intends to claim indemnification under this Clause 12
shall:

12.3.1    promptly, [***], notify the other Party (the "Indemnitor”) in writing in general terms of any Claim, threat or action which has or has the potential to give rise to the Indemnitee seeking to rely on and claim the benefit of the indemnification together with notification of the Indemnitee's intention to rely on such indemnity, provided that, failure to give such notice shall not relieve the Indemnitor of its indemnification obligations except and only to the extent such failure actually and materially prejudices the ability of the Indemnitor to defend against such Claims;

12.3.2    not prejudice any defence to any Claim or attempt to settle or compromise such claim;

12.3.3    shall comply with the procedure in Clause 12.3.1 except that nothing shall prevent it from complying with the procedural requirement of any proceedings which have been commenced;

12.3.4    subject to its other rights and obligations and compliance with the procedures set out in this Clause 12 permit the Indemnitor to have overall control of the conduct of the negotiations and the proceedings including any counterclaim;
 

12.3.5    cooperate as reasonably requested by the Indemnitor, at the Indemnitor's expense, in the conduct of such Claim (and any counterclaim); and

12.3.6    have the right (at the Indemnitor's expense) to instruct independent counsel and participate in all proceedings and negotiations whether named or not as a party in the Claim or proceedings.

12.4    Notwithstanding any other provision in this Clause 12, the Indemnitor shall not settle or consent to an adverse judgement in any such claim, demand, action or other proceeding that adversely affects the rights or interests of any Indemnitee or imposes additional obligations (financial or otherwise) on such Indemnitee, without the prior express written consent of such Indemnitee (such consent to be at the Indemnitee's sole discretion).

Commercial Supply Agreement
244238347 v3
38

12.5    In the event of a claim under Clause 12.1.1 or 12.2.3, the Parties shall promptly and in good faith discuss ways, whether by modifications to the Services or Product, licensing or otherwise, to settle or overcome the Claim. In the event that legal proceedings are commenced by a Third Party, the Parties shall [***]. If the Parties are unable to agree to a solution to avoid the infringement [***], the Parties shall discuss and consider whether to suspend the infringing Services before [***].

12.6    In the event that Customer challenges its obligation to indemnify the CMC Parties for a Claim arising under Clause 12.1.1, Customer agrees to promptly pay CMC for all costs and expenses of the action or proceeding, including reasonable attorneys’ fees and court costs and collection expenses.

Insurance

12.7    Customer shall procure from a reputable insurance carrier commercial general liability insurance including coverage for product liability [***]. Customer will maintain such insurance during the Term of this Agreement [***]. Upon reasonable request, Customer will deliver a certificate of insurance evidencing such coverage and an endorsement of additional insured in favour of CMC.

12.8    CMC shall maintain, at its expense comprehensive general liability insurance and workers compensation insurance, including product liability insurance, [***]. All insurance required under this Agreement shall be maintained during the Term, and CMC shall from time to time provide copies of certificates of such insurance to Customer upon reasonable request. Notwithstanding the preceding sentence, CMC shall be obligated to maintain product liability insurance obtained by it pursuant to this Clause 12.8 during the Term and after expiration or termination of this Agreement [***].

12.9    Each Party will provide the other Party evidence of such coverage upon request. Each Party will provide the other Party [***] to non-renewal, termination or modification of their respective insurance coverage as described above.

Limitation of Liability
12.10    The Parties represent and acknowledge that they have negotiated the terms of this
 Agreement and have reached agreement on the terms based on their own assessment of their own risks, liabilities and rewards in connection with this Agreement and the Product in addition to having had the benefit of professional legal advice and accordingly the Parties agree that without prejudice to the terms of Clauses 16, 12.10 and 12.12 CMC’s aggregate liability to Customer for any loss or damage suffered by the Customer as a result of breach of this Agreement or of any other liability (including but not limited to negligence, misrepresentation or claim under the indemnities) in respect to any claim arising under this Agreement or in connection with the Services shall be limited, in the aggregate, to the [***].

Commercial Supply Agreement
244238347 v3
39

12.11    Without prejudice to Clause 12.12 neither CMC nor Customer shall be liable for any loss or damage howsoever caused (even if foreseeable or in the contemplation of CMC or Customer) in respect of:

12.11.1 [***]; and

12.11.2 [***].

12.12    Nothing in this Agreement shall purport or attempt or serve to exclude or restrict any liability [***].

13.    PRODUCT RECALL

13.1    Subject to Clause 13.3.1, the costs and obligations with respect to any Recall of Product and handling enquiries and contacts from any Regulatory Authority relating to any Recall of Product shall be the responsibility of Customer. Customer shall notify all Regulatory Authorities having jurisdiction over Product (whether or not the issue arose in the jurisdiction controlled by the Regulatory Authority) of any Recall, and shall be responsible for coordinating all necessary activities regarding the action taken. CMC shall, [***], provide all reasonable assistance to Customer in connection with any
 

Recall. The Parties agree to keep each other advised of any Recall, the progress of undertaking any Recall, and to exchange copies of such documentation as may be reasonably required, to assure regulatory compliance with a Recall.

13.2    If either Party has reason to believe that any Product (whether the Product itself or particular Batch(es)) should be Recalled, such Party shall promptly inform the other in writing, to also include the reasons and explanations for the Recall, prior to taking any such action. In addition, Customer shall give CMC prompt written notice of any Recalls that Customer believes were caused by or may have been caused by CMC’s failure to comply with its obligations under this Agreement.

13.3    If any Product is Recalled for safety reasons or due to a mandatory notification from a Regulatory Authority dictating the Recall and, in either case, such reasons are as a result of CMC’s failure to manufacture Product in accordance with the terms of this Agreement or otherwise as a result of CMC’s negligence or wilful misconduct (“CMC Failure”), then CMC shall, subject to Clause 12, reimburse Customer for all reasonable expenses incurred by Customer in undertaking the Recall of those specific Products which are the subject of a CMC Failure. Such payment shall be made [***]. If CMC disputes that the Recall is:

13.3.1    due to safety reasons or mandatory notification from a Regulatory Authority dictating the Recall then the Parties shall mutually select a regulatory expert to evaluate whether the Recall was appropriate to address the safety reason or comply with the Regulatory Authority’s notice (as applicable); and/or

Commercial Supply Agreement
244238347 v3
40

13.3.2    due to CMC’s CMC Failure, then the Parties shall mutually select an independent laboratory to evaluate whether the Product is defective due to CMC’s CMC Failure; and

the evaluation(s) by the regulatory expert and/or independent laboratory shall be binding on the Parties (other than where such decision is a manifest error). If such evaluation substantially supports CMC’s basis(es) for the dispute, then CMC shall not be responsible for any costs of the Recall. Subject to Clauses 9 and 12, any payment by CMC under this Clause 13.3 shall be Customer’s sole remedy for the costs of the Recall.

14.    TERM AND TERMINATION

14.1    This Agreement shall commence on and have effect as of the Effective Date and will, subject to earlier termination in accordance with this Clause 14 or otherwise, continue for an initial term of four (4) years (the “Initial Term”) commencing on the Effective Date. The term of this Agreement may be extended by Customer beyond the then current term for further periods of up to two (2) years duration (“Additional Term”) provided that (i) Customer is not in material breach of this Agreement and (ii) Customer provides CMC with
 

written notice to extend the current Term [***].

14.2    Upon Customer reaching a decision not to extend the Initial Term or extend the Term with an Additional Term (i) [***]; and (ii) Customer shall not be entitled to seek extension of the Term under the provisions of Clause 14.1.

Events of Termination
14.3    Either Party (“Non-Defaulting Party”) may terminate this Agreement before expiry of the Term with immediate effect upon prior written notice to the other Party (“Defaulting Party”) if:

14.3.1    the Defaulting Party fails to pay any undisputed sum payable under this Agreement [***]

14.3.2    the Defaulting Party commits a material breach of its obligations under this Agreement and if the breach is capable of remedy, [***];

14.3.3    the Defaulting Party is (i) generally unable to pay its debts as they become due; or
(ii) has an administrator appointed or administration order made against it or an order for winding-up or dissolution made (otherwise than in the course of a bona fide reorganisation previously approved in writing by the Non-Defaulting Party) [***];

Commercial Supply Agreement
244238347 v3
41

14.3.4    any material permit or regulatory license is permanently revoked preventing the performance of the Services by the Defaulting Party.

14.4    Customer may terminate this Agreement before expiry of the Term with immediate effect upon prior written notice to CMC:

[***].

Effect of Termination
14.5    Upon termination of this Agreement, Customer shall pay to CMC:

14.5.1    Unless such termination was by CMC according to Customer being the Defaulting Party under Clause 14.3:

14.5.1.1    payments due by Customer to CMC in respect of Services performed in accordance with the terms and conditions of this Agreement up to and including the day of such termination, in full for all completed Services and for partially completed Services a sum calculated on a pro-rata basis having regard to the Price for the cancelled Services (fairly determined by the Project Team having regard to man hours, materials, profit element and irreversible commitments incurred by CMC);

14.5.2    If such termination was by CMC according to Customer being the Defaulting Party under Clause 14.3:
14.5.2.1     in respect of Firm Orders and Semi-Firm Orders in existence at the date of termination, a payment calculated as [***];

14.5.2.2    In the event that Customer failed to order the Minimum Volume in the Calendar Year of such termination, then Customer shall pay to CMC [***].

14.5.3    Subject to Section 14.6, CMC shall invoice Customer for all payments due at the time of termination pursuant to Clauses 7.5 and 14 and/or Appendix Two [***] of termination and Customer shall pay all undisputed amounts [***];

14.6    In the event of the expiration or termination of this Agreement for any reason, all amounts for which Customer is entitled to a credit pursuant to this Agreement shall be credited to any amounts due to CMC under Clause 14.5. In the event of the termination of this Agreement by Customer under Clause 14.4.1 or 14.4.2, to the extent paid to CMC, [***] to any undisputed payments due to CMC under Clause 14.5 with [***] and any other amounts for which Customer has paid for Services that were not rendered, returned to Customer [***].
 

Commercial Supply Agreement
244238347 v3
42

14.7    [***] under Clause 14.3 primarily due to CMC being the Defaulting Party or if this Agreement expires, CMC shall [***]. In the event of termination of this Agreement by CMC under Clause
14.3 due to Customer being the Defaulting Party, [***] CMC under Clause 14.5 with the remainder [***].

14.8    In the event of a termination of this Agreement under Clause 14.4.3, Customer [***].

Upon termination of this Agreement for any reason, provided the Customer has paid all undisputed sums outstanding and which are properly due under this Agreement, CMC [***], provide the Customer with all Deliverables then manufactured or generated and all transferable work in progress and all Product then manufactured. CMC shall not be obliged to transfer any materials pursuant to this Clause where the Customer has not paid CMC all undisputed invoiced sums due [***].

Survival
14.9    Termination or expiry of this Agreement for whatever reason shall not affect the accrued rights of either CMC or Customer arising under or out of this Agreement before the effective date of termination. The provisions of this Agreement which are expressed to survive this Agreement including Clauses 1, 2.4, 3.4, 10, 11, 12, 13, 14.5 through 14.8, this Section 14.9, 15, 17 and 18.4 through 18.13 shall survive termination or expiry of this Agreement to the degree necessary to permit their complete fulfilment or discharge.

15.    TECHNOLOGY TRANSFER

15.1    Upon (i) termination or during the notice period regarding termination of this Agreement or the Services other than where termination is for material breach by Customer or (ii) on expiry of this Agreement; Customer may by written notice to CMC seek assistance from CMC with respect to the transfer to another manufacturer of the then-current Process and test methods solely for the purpose of manufacturing and testing the Product ("Technology Transfer"). Following CMC’s receipt of such notice, the Parties will establish, in good faith, a schedule and plan for effecting such transfer and CMC will thereafter co-operate with Customer in implementing such plan as agreed by the Parties. As part of the Technology Transfer, CMC will make available for collection, subject to any Regulatory Obligations, all Customer Materials, Cell Line and one copy of all documentation (to the extent not previously delivered to Customer) generated pursuant to the Services up to the date of
 

termination or expiry including batch records, development and validation reports and production process documentation, test method SOPs and method development and validation reports.

15.2    The obligations on CMC in respect of the Technology Transfer shall only be exercisable by Customer [***]. Customer shall pay, CMC's costs providing the Technology Transfer [***]. The Customer will not, and CMC will not be obliged to, 

Commercial Supply Agreement
244238347 v3
43

transfer any CMC Know-How pursuant to this Technology Transfer until the contract manufacturer to whom the process is transferred enters into a limited royalty-free license and confidentiality agreement reasonably acceptable to and with CMC in order to protect CMC's Know-How and Confidential Information.

16.    FORCE MAJEURE

16.1    Neither Party shall be held liable or responsible to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement or the Services to the extent, and for so long as, such failure or delay is caused by or results from causes beyond the reasonable control of the other Party (“Impeded Party”) including but not limited to fires, earthquakes, floods, embargoes, wars, acts of war (whether war is declared or not), terrorist acts, insurrections, riots, civil commotion, strikes, lockouts or other labour disturbances, other substantial similar acts of nature, omissions or delays in acting by any administrative authority, government agency or other Party (a “Force Majeure Situation”).

(b)   The Impeded Party shall notify the other Party in writing of any Force Majeure Situation which prevents the Impeded Party from complying with an obligation under this Agreement. If a Force Majeure Situation [***], and is adversely affecting the performance of this Agreement, the Party which is not the Impeded Party will have the right, on written notice to the other Party, to immediately terminate this Agreement. In the case of such termination, Customer will not have a right to reimbursement for any sums paid under this Agreement for which Services have been rendered or any claim for damages solely as a result of the termination of this Agreement or non-performance of the Services due to such Force Majeure Situation. Notwithstanding any other provision under this Clause 16.2, in the event this Agreement is terminated under this Clause 16.2, (a) CMC shall refund Customer for any and all amounts for which Customer has paid Services that were not rendered, [***] if the Customer’s termination due to Force Majeure occurs [***] after notice of the Force Majeure Situation; and (b) Customer shall pay to CMC any sums due under this Agreement in respect of Services performed up to and including the date of termination in accordance with Clause 14.5.1.1.
 

This Clause 16.2 shall not apply to excuse either Party’s payment obligations under this Agreement which have accrued prior to termination.

17.    APPLICABLE LAW, JURISDICTION AND DISPUTE RESOLUTION

Applicable Law
17.1    This Agreement shall be interpreted and governed, and all rights and obligations of the Parties shall be determined, in accordance with the laws of [***] (regardless of choice of law provisions). The Parties waive application of the provisions of the 1980 U.N. Convention on Contracts for the International Sale of Goods, as amended.

Commercial Supply Agreement
244238347 v3
44

17.2    Before resorting to litigation, unless emergency relief is required by either Party when either Party shall be free to resort to litigation, the Parties shall use their reasonable efforts to negotiate in good faith and settle amicably any dispute that may arise out of or relate to this Agreement (or its construction, validity or termination) (a "Dispute"). If a Dispute cannot be settled through negotiations by appropriate representatives of each of the Parties, either Party may give to the other a notice in writing (a "Dispute Notice"). [***] shall each refer the Dispute to their respective Chief Executive Officers who shall meet in order to attempt to resolve the dispute. If [***] (i) the Dispute is not settled by agreement in writing between the Parties or (ii) the Parties have failed to discuss the Dispute or use good faith negotiations, the Dispute may be submitted to and finally be settled [***]. Nothing in this MSA shall prohibit (nor force) the Parties to submit to any other dispute resolution forums as they may between themselves subsequently agree to or discuss.

18.    MISCELLANEOUS

Fundamental Change
18.1    The occurrence of a Fundamental Change shall not relieve CMC of its responsibility for performance of its obligations under this Agreement. CMC must promptly:

18.1.1    notify Customer as soon as CMC is aware that a Fundamental Change has occurred or is reasonably likely to occur;

18.1.2    upon request, provide to Customer such further information and written assurances, from CMC and its successors that there will be no adverse consequences to the supply of Product to Customer or the performance of CMC obligations under this Agreement resulting from the occurrence of the Fundamental Change. Without prejudice to the generality of this Clause 18.1.2, Customer may seek written assurances from CMC and its successors relating to CMC’s ongoing corporate and management culture, capacity, capability and financial viability.

18.2    Neither CMC not its successor shall be entitled to terminate this Agreement as a result of a Fundamental Change.
 

18.3    For the avoidance of doubt, a breach of Clause 18.1, shall be deemed to be a material breach of this Agreement.

Binding Agreement
18.4    Each party agrees that this Agreement is legal and valid and the obligations binding upon such party are enforceable by their terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors; and other than as provided for elsewhere in this Agreement in respect of the Timeline, any modification, extension or variation of this Agreement (or any document entered into pursuant to or in connection with this Agreement) shall only be valid if it is in writing and signed by or on 

Commercial Supply Agreement
244238347 v3
45

behalf of each Party to this Agreement. No modification or variation of this Agreement shall be valid if made by e-mail.

Amendment
18.5    Unless expressly so agreed, no modification or variation of this Agreement shall constitute or be construed as a general waiver of any provisions of this Agreement, nor shall it affect any rights, obligations or liabilities under this Agreement which have already accrued up to the date of such modification or waiver, and the rights and obligations of the Parties under this Agreement shall remain in full force and effect, except and only to the extent that they are so modified or varied.

Assignment
18.6    This Agreement may not be assigned by either Party without the prior written consent of the other Party except that a Party may otherwise assign its respective rights and transfer its respective duties to any assignee of all or substantially all of its business (or that portion thereof to which this Agreement relates) or in the event of its merger or consolidation or similar transaction.

18.7    An assignment by either Party will not release that Party of any obligation to the other Party under the terms of this Agreement.

Entire Agreement
18.8    This Agreement, and the documents referred to in it, constitutes the entire Agreement and understanding of the Parties and supersedes any previous agreement between the Parties relating to the subject matter of this Agreement. If any term of this Agreement conflicts with any term of the Commercial Quality Agreement, the conflicting term of this Agreement shall prevail.

Waiver and amendment
18.9    In no event will any delay, failure or omission (in whole or in part) in enforcing, exercising or pursuing any right, power, privilege, claim or remedy conferred by or arising under this Agreement or by law, be deemed to be or construed as a waiver of that or any other right, power, privilege, claim or remedy in respect of the circumstances in question, or operate so as to bar the enforcement of that, or any other right, power, privilege, claim or remedy, in any other instance at any time or times subsequently.

Severability
 

18.10    If any provision of this Agreement shall be found by any court or administrative body of competent jurisdiction to be invalid or unenforceable, such invalidity or unenforceability shall not affect the other provisions of this Agreement which shall remain in full force and effect. The Parties agree, in the circumstances referred to in this clause to attempt to substitute for any invalid or unenforceable provision a valid or enforceable provision which achieves to the greatest extent possible the same effect as would have been 

Commercial Supply Agreement
244238347 v3
46

achieved by the invalid or unenforceable provision. The obligations of the Parties under any invalid or unenforceable provision of this Agreement shall be suspended while an attempt at such substitution is made.

Notices
18.11    Any notice or other communication given or made under this Agreement shall be in writing and in English and signed by or on behalf of the Party giving it and shall be served by (a) hand, (b) delivering it or sending it by prepaid recorded or special delivery post or prepaid international recorded airmail, or (c) facsimile or e-mail transmission provided the recipient provides a confirmation of receipt of such facsimile or e-mail transmission, to the address and for the attention of the relevant Party set out in this Clause 18.11 (or as otherwise notified by that Party hereunder). Any such notice shall be deemed to have been received:

18.11.1    if hand delivered or sent by prepaid recorded or special delivery post or prepaid international recorded airmail, at the time of delivery;

18.11.2    if sent by post (other than by prepaid recorded or special delivery post), [***]; or

18.11.3    if sent by airmail (other than by prepaid international recorded airmail), [***];

Provided that if deemed receipt [***] the notice shall be deemed to have been received [***], and if deemed receipt [***], the notice shall be deemed to have been received [***].
The addresses of the Parties for the purposes of this Clause 18.11 are: CMC ICOS Biologics, Inc.
22021 20th AVENUE SE, BOTHELL, WA, USA 98021

For the attention of: Legal Department

MacroGenics, Inc.
9704 Medical Center Drive Rockville, MD 20850
For the attention of:
 

[***]

With a copy to MacroGenics, Inc.

Commercial Supply Agreement
244238347 v3
47

9704 Medical Center Drive Rockville, MD 20850
For the attention of: General Counsel

or such other address as may be notified in writing from time to time by the relevant Party to the other Party. Any such change to the place of service shall take effect [***].

Counterparts
18.12        This Agreement may be executed in any number of counterparts and by the Parties to it on separate counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. This Agreement is not effective until each Party has executed at least one counterpart.

No partnership or agency
18.13    Nothing in this Agreement is intended to or shall operate to create a partnership or joint venture of any kind between the Parties or to authorise either Party to act as agent for the other, and no Party shall have authority to act in the name or on behalf of or otherwise to bind the other in any way (including but not limited to the making of any representation or warranty, the assumption of any obligation or liability and the exercise of any right or power). Each Party is entering into this Agreement as principal not agent, and may not enforce any of its rights under or in connection with this Agreement for the benefit of any other person.

THIS AGREEMENT has been executed by or on behalf of the Parties as of the Effective Date.

Commercial Supply Agreement
244238347 v3
48

						
	Signed on behalf of
CMC ICOS BIOLOGICS, INC.
By :       /s/ Gustavo Mahler

Name : Gustavo Mahler, Ph.D. Position : CEO & President
	)
)
)
)
)
)
)
)
)

	Signed on behalf of
MACROGENICS, INC.
by:       /s/ Scott Koenig

Name : Scott Koenig, MD, Ph.D. Position : President & CEO
	)
)
)
)
)
)
)
)
)
)
)
)

 

Commercial Supply Agreement
244238347 v3
49

                                        CONFIDENTIAL

APPENDIX ONE

[***]
 

Commercial Supply Agreement
244238347 v3
50

                                        CONFIDENTIAL

APPENDIX TWO

[***]
 

Commercial Supply Agreement
244238347 v3
51

                                        CONFIDENTIAL

APPENDIX THREE

[***]

Commercial Supply Agreement
244238347 v3
52Document

        Exhibit 10.16

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT BOTH (I) IS NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED. SUCH EXCLUDED INFORMATION HAS BEEN MARKED WITH “[***]”.

COMMERCIAL SUPPLY AGREEMENT

This Commercial Supply Agreement (the “Agreement”) is entered into as of September 30, 2020 (“Effective Date”), by and between Incyte Corporation, with an address of 1801 Augustine Cut-off, Wilmington, DE 19803 (“Incyte”), and MacroGenics, Inc., with an address of 9704 Medical Center Drive, Rockville, MD 20850 (“MacroGenics”). Incyte and MacroGenics are sometimes referred to herein individually as a “Party” and collectively as “Parties.”

RECITALS

WHEREAS, MacroGenics discovered and was developing the Licensed Compound (defined below), coded by MacroGenics as “MGA012”, for various human therapeutic uses;

WHEREAS, MacroGenics has granted certain licenses to Incyte, and Incyte has obtained certain licenses from MacroGenics, to develop, manufacture and commercialize the Licensed Compound and products and treatment regimens incorporating the Licensed Compound, pursuant to the Global Collaboration and License Agreement, dated as of October 24, 2017, between the Parties (the “Collaboration Agreement”);

WHEREAS, the Parties entered into a Development Manufacturing & Clinical Supply Agreement dated August 31, 2018 pursuant to which MacroGenics manufactured and/or supplied to Incyte, and Incyte purchased from MacroGenics, the Licensed Compound Bulk Drug Substance and the Licensed Compound Drug Product (the “Clinical Supply Agreement”); and

WHEREAS, pursuant to the Collaboration Agreement, MacroGenics will Manufacture and supply to Incyte and Incyte will purchase from MacroGenics according to the terms of this Agreement, Licensed Compound Drug Substance for use under the Collaboration Agreement by Incyte and Incyte’s and its Affiliates, Collaborators and licensee’s;

WHEREAS, the Parties now also wish to set forth the terms by which MacroGenics will perform certain ongoing Manufacturing Development activities as set forth in an approved development plan as may be updated from time to time (the “CMC Development Plan” as hereafter further defined) and MacroGenics, as further set forth herein, will Manufacture and/or supply to Incyte the Licensed Compound Bulk Drug Substance which Incyte will purchase for Commercialization; and

NOW, THEREFORE, for valuable consideration and the mutual covenants, terms and conditions hereinafter expressed, the sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

1.    DEFINITIONS

The defined terms are used throughout this Agreement:

“Annual Global Commercial Supply Forecast” means the total amount of Licensed Compound Bulk Drug Substance needed to fulfill the annual projected global commercial supply of Licensed Compound Drug Product.

244242908 v3

“Applicable Law” means all applicable statutes, ordinances, regulations, directives, rules, or orders of any kind whatsoever of any Governmental Authority applicable to any activity hereunder, including the EU Data

244242908 v3

Protection Directive and the regulations issued under the U.S. Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), the U.S. Federal Food, Drug, and Cosmetic Act (21 U.S.C. §301 et seq.) (“FFDCA”), the Prescription Drug Marketing Act of 1987 (21 U.S.C. §§331, 333, 353, 381), the Generic Drug Enforcement Act of 1992 (21 U.S.C. §335(a) et seq.), U.S. Patent Act (35 U.S.C. §1 et seq.), the Federal False Claims Act (31 U.S.C. §3729 et seq.), and the Anti-Kickback Statute (42 U.S.C. §1320a-7b et seq.), and the Foreign Corrupt Practices Act of 1977 (15 U.S.C. §§ 78dd-1, et seq.), all as amended from time to time, together with any rules, regulations, and guidance documents, and regulatory standards (including GCP, GLP, and GMP) promulgated relating to any of the foregoing, all as amended from time to time.

“Batch” means a specific quantity of Licensed Compound Bulk Drug Substance that is intended to be of uniform character and quality, within specific limits, and is produced during the same cycle of Manufacture as defined by the applicable Batch Record.

“Batch Failure” means the failure of a Batch to be Delivered because (i) it failed meet its Product Specifications; or (ii) Manufacturing of such Batch was discontinued prior to release testing, or (iii) a deviation from the Manufacturing Process results in rejection of the Batch.

“Batch Record” means the final executed batch production and quality control records, prepared in accordance with GMP, for each Batch of Licensed Compound Bulk Drug Substance, as applicable, Manufactured under this Agreement.

“Certificate of Analysis” means a document certifying that a Batch meets the applicable Product Specifications, as signed and dated by a duly authorized representative of MacroGenics’ quality assurance department.

“CMC Development Plan” means for the purposes of this Agreement, the development plan attached to this Agreement as Exhibit D.

“Commercial Quality Agreement” means the written agreement entered into by the Parties on or within [***] after the Effective Date defining pharmaceutical and certain operational responsibilities of the Parties with respect to the quality that is applicable to the Manufacture and Supply of the Licensed Compound Bulk Drug Substance under GMP.

“Deliver(ed) means to deliver (or have delivered) a Batch EXW (as defined in Incoterms 2020), the MacroGenics Manufacturing Facility according to the date provided in written a notification to Incyte of such delivery. “Delivery” means delivery of a Batch by in such manner.

“Force Majeure” means any event beyond the reasonable control of the affected Party, which may include embargoes; war or acts of war, including terrorism; insurrections, riots, or civil unrest; labor strikes or lockouts; epidemics, fire, floods, earthquakes or other severe acts of nature; widespread unavailability of raw materials or reagents affecting manufacturers generally, actions by a Regulatory Authority affecting the manufacture of Monoclonal Antibodies generally, and the Licensed Compound Bulk Drug Substance specifically, federal, state and local governmental actions and orders that halt, curtail or impede commercial activity and omissions or delays in acting by any Governmental Authority, other than any such Governmental Authority omissions or delays resulting from the negligence or omission by the Party affected by Force Majeure.

“FTE” means [***] of work devoted to or in direct support of specified Manufacturing Development, Manufacturing Related Activities or other specified activities under this Agreement, conducted by one or more qualified employees, contractors, consultants or other personnel of a Party or its Affiliates. For clarity, any individual contributing [***] (or equivalent pro-rata portion thereof for the period beginning on the Effective Date and ending on the last day of the first Calendar Year) will be deemed a fraction of an FTE on a pro- rata basis.

244242908 v3

“FTE Cost” means, with respect to any period and a Party or its Affiliate, the FTE Rate multiplied by the number of FTEs expended by such Party or its Affiliate during such period; provided that a Party will not be charged twice for any FTE Cost if such FTE Cost is already included as a component of the Price for Licensed Compound Bulk Drug Substance under this Agreement.

“FTE Rate” means a rate of [***] (pro-rated for the period beginning on [***] and ending on the [***]); provided, however, that such rate will be [***], by the applicable CPI Adjustment. The FTE Rate is “fully burdened” and covers employee salaries, benefits, travel and other such costs.

“Good Manufacturing Practices” or “GMP” means the then-current good manufacturing practices required by the (i) Commission Directive 2003/94/EC laying down the principles and guidelines of good manufacturing practice for medicine Products for human use as more specifically detailed in EUDRALEX Volume IV Part II and its Annexes, (ii) EU Guidelines on principles of Good Distribution Practices of active substances for medicinal Products for human use, (2015/C95/01) and (iii) 21 C.F.R. Parts 210 and 211, as promulgated by the FDA; (iv) the ICH (International Conference on Harmonization of Technical Requirements for the Registration of Pharmaceuticals for Human Use) guidelines, including without limitation, ICH Q7 "ICH Good Manufacturing Practice Guide for Active Pharmaceutical Ingredients" and (iv) comparable Applicable Law related to the manufacture and testing of pharmaceutical materials in such jurisdictions as the Parties may hereinafter agree.

“Incyte Manufacturing Facility” means Incyte’s GMP Manufacturing plant located at Avenue des Sciences 12, 1400 Yverdon-les-Bains, Switzerland.

“Latent Defect” means a non-obvious defect in a Batch not reasonably susceptible to discovery upon receipt of such Batch.

“Licensed Compound” or “MGA012” means, for purposes of this Agreement and the Commercial Quality Agreement, the specific anti-PD-1 Monoclonal Antibody designated by MacroGenics as “MGA012”, as further described in IND # 130952, and designated by Incyte as “retifanlimab”.

“Licensed Compound API” means the Licensed Compound active pharmaceutical ingredient of a Licensed Product.

“Licensed Compound Bulk Drug Substance” means the Licensed Compound API as produced in bulk, in accordance with this Agreement, as well as the Commercial Quality Agreement and the applicable Quality Assurance Measures.

“Licensed Compound Drug Product” means the Licensed Compound Bulk Drug Substance in its final finished form.

“MacroGenics Manufacturing Facility” means MacroGenics’ GMP Manufacturing plant located at 9704 Medical Center Drive, Rockville, Maryland.

“Manufacture” means any and all activities and processes related to the manufacturing of Licensed Compound Bulk Drug Substance or Licensed Compound Drug Product for, labeling, packaging, in-process and testing of such Licensed Compound Bulk Drug Substance or Licensed Compound Drug Product, release of the Licensed Compound Bulk Drug Substance or Licensed Compound Drug Product, quality assurance activities related to manufacturing and release of Licensed Compound Bulk Drug Substance or Licensed Compound Drug Product. “Manufacture” will exclude Manufacturing Development and Manufacturing Related Activities.

“Manufacturing Development” means any of the following with respect to the Licensed Compound Bulk Drug Substance or Licensed Compound Drug Product, as applicable: manufacturing process development

244242908 v3

and validation, process improvements, formulation development, associated analytical development and validation and the manufacture and testing of stability and consistency lots (including process development, qualification, and test Batches).

“Manufacturing Process” means the manufacturing process for (including any associated Know-How owned or Controlled by MacroGenics or Incyte relating to the then-current process), and necessary or useful for, the Manufacture of the Licensed Compound Bulk Drug Substance and as further Developed under the Collaboration Agreement, the Clinical Supply Agreement and this Agreement.

“Manufacturing Related Activities” means those [***] activities specifically related to [***], including, but not limited to, [***] of which are not otherwise included [***]. “Manufacturing Related Activities” will specifically exclude [***], which is deemed to be a separate and distinct [***] Manufacturing Related Activities.

“Materials” means the starting materials or components, raw materials, ingredients and any other materials used in the Manufacture of the Licensed Compound Bulk Drug Substance.

“Personnel” means any person or entity employed or engaged by MacroGenics, including without limitation, its employees, contractors, consultants or agents who may perform Manufacturing Related Activities, Manufacturing Development or Manufacturing or otherwise have obligations or rights pursuant to this Agreement.

“[***]” means [***].

“Product Specifications” means the written specifications for the Licensed Compound Bulk Drug Substance, as set forth in the Commercial Quality Agreement.

“Price Schedule” means a list that includes [***].

“Project Manager” means the project managers coordinating the activities to perform be performed hereunder and acting as central contact between Incyte and MacroGenics, and who will lead the “Joint Project Team.”

“Regulatory Documentation” means, with respect to any Compound or Product under the Collaboration Agreement, all regulatory filings, applications, notifications, registrations, licenses, regulatory drug lists, advertising and promotion documents, adverse event files, complaint files, Manufacturing records, Regulatory Approvals or other regulatory submissions or supporting documents, including any written correspondence or meeting minutes, made to, made with, or received from an applicable governmental agency or Regulatory Authority relating to such Compound or Product, and all data contained therein.

“[***]” means [***].

“[***]” means [***].

244242908 v3

“Third Party Expenses” means out-of-pocket expenses incurred by a Party or any of its Affiliates for purchases of items or for services performed by a Third Party on behalf of Incyte or MacroGenics in the course of such Party’s performance of this Agreement.

“[***]” means [***].

As used in this Agreement, the following terms will have the meanings ascribed thereto in the respective Sections of this Agreement set forth opposite each such term below. In addition, capitalized terms used but not defined herein will have the meanings set forth in the Collaboration Agreement. In the event of a conflict between a term defined herein and the same term as defined in the Collaboration Agreement, the definition ascribed to such term in this Agreement will control. Capitalized terms not specifically defined in this Agreement or the Collaboration Agreement will have the meaning commonly recognized in the biotechnology industry.

244242908 v3

						
	TERM	SECTION
	Affiliate	Collaboration Agreement
	Agreement	Preamble
	Annual Global Commercial Supply Forecast	4.3.b.i (1)
	Approved CMO	9.1
	Auditee	8.5
	Auditor	8.5
	Batch Price	7.1
	Binding Portion	4.3(e)
	Annual Product Review	8.16
	Business Day	Collaboration Agreement
	Calendar Quarter	Collaboration Agreement
	Calendar Year	Collaboration Agreement
	CMC	8.9
	CMC Development Budget	6.1
	CMC Development Plan	Preamble
	Collaboration Agreement	Preamble
	Collaborator	Collaboration Agreement
	Collaborator Combination Studies	Collaboration Agreement
	Commercially Reasonable Efforts	Collaboration Agreement
	Compound	Collaboration Agreement
	Confidential Information	Collaboration Agreement
	“Control” or “Controlled”	Collaboration Agreement
	Deficiency Notice	5.2
	Development	Collaboration Agreement
	Discretionary Specification Change	8.3(b)
	Effective Date	Preamble
	FDA	Collaboration Agreement
	Finance Subcommittee	2.3
	Funded Collaborator Combination Studies	7.1(a)(i)
	GAAP	Collaboration Agreement
	“Good Clinical Practices” or “GCP”	Collaboration Agreement
	“Good Laboratory Practices” or “GLP”	Collaboration Agreement
	Governmental Authority	Collaboration Agreement
	Incyte	Preamble
	Incyte Combination Studies	Collaboration Agreement
	Incyte Facility	9.1
	IND	Collaboration Agreement
	Information	Collaboration Agreement

244242908 v3

						
	TERM	SECTION
	Insolvency Event	13.2(b)
	JMC	Collaboration Agreement
	JPT	2.1
	Know-How	Collaboration Agreement
	Losses	Collaboration Agreement
	MacroGenics	Preamble
	MacroGenics Draft Production Schedule Update	4.2(a)
	MacroGenics Combination Studies	Collaboration Agreement
	Manufacturing Technology Transfer	9.1
	Manufacturing Transition Plan	9.1
	Monoclonal Antibody	Collaboration Agreement
	Monotherapy Studies	Collaboration Agreement
	Non-Conforming Licensed Compound	5.2
	Notified Law	8.1(c)
	Order	Collaboration Agreement
	Party, Parties	Preamble
	Phase I Study	Collaboration Agreement
	Phase II Study	Collaboration Agreement
	Phase III Study	Collaboration Agreement
	Pipeline Asset	Collaboration Agreement
	Pivotal Study	Collaboration Agreement
	Prior CDA	Collaboration Agreement
	Product	Collaboration Agreement
	Production Schedule	3.1(c)
	Quality Assurance Measures	8.4(b)
	Reconciliation Report	7.1(f)
	Regulatory Approval Application	Collaboration Agreement
	Regulatory Authority	Collaboration Agreement
	Required Specification Change	8.3(a)
	Regulatory Submission	8.9
	Response Notice	5.3
	Rolling Forecast	4.1(a)
	Term	13.1
	Territory	Collaboration Agreement
	Third Party	Collaboration Agreement

2.    GOVERNANCE. 

2.1    The JMC established by the Parties will oversee, coordinate and facilitate the Manufacture of the Licensed Compound Bulk Substance under this Agreement according to the Collaboration Agreement, including with respect to Section 2.3 of the Collaboration Agreement, except as otherwise specifically set forth in this Agreement.

244242908 v3

3.    MANUFACTURE AND SUPPLY

3.1    General Principles.

a.    Subject to the terms and conditions of this Agreement, during the Term,

244242908 v3

i.    MacroGenics agrees to use Commercially Reasonable Efforts to Manufacture each Binding Portion; and

ii.    Incyte agrees to [***] of each Binding Portion.

b.    For clarity, Incyte will be entitled, in its sole discretion, to [***] of Licensed Product for [***]; provided, that, to the extent Incyte releases [***], such Batches will be subject to the terms of the Commercial Quality Agreement. Notwithstanding the preceding, any lots manufactured [***].

c.    The Parties acknowledge and agree that Batches of Licensed Compound Bulk Drug Substance supplied hereunder by MacroGenics shall be Manufactured in accordance with the acceptance criteria [***] in this Agreement, which may be updated as mutually agreed to by the JMC (“Acceptance Criteria”). The Parties agree that for each Batch Manufactured by MacroGenics for [***] Acceptance Criteria, Incyte will pay [***]. If the [***], Incyte will be [***], including instances in which [***]. The Parties also acknowledge and agree that MacroGenics will have [***] Incyte, its Affiliates or to any of their respective Collaborators and/or licensees [***] the Acceptance Criteria, provided that such Batch [***].

[***].

d.    In the event the Manufacturing Process is modified the Parties will mutually agree to updated [***]. Incyte will be solely responsible for, [***], and shall use Commercially Reasonable Efforts to Manufacture [***] of the Licensed Compound Drug Product. including amounts reasonably forecasted by MacroGenics for Commercialization of MacroGenics Combination Regimens.

e.    Each Party will use Commercially Reasonable Efforts to perform certain Manufacturing Related Activities as the Parties will mutually agree to in writing as set forth in this Agreement and the Commercial Quality Agreement, as applicable; provided, however, [***] Manufacturing Related Activities [***] to be used in a [***] of such costs and expenses. For the avoidance of doubt, Manufacturing Related Activities will [***].

3.2    MacroGenics Responsibilities. MacroGenics will use Commercially Reasonable Efforts to ensure that the MacroGenics Manufacturing Facility and equipment at the MacroGenics Manufacturing Facility required for the Manufacture of the Licensed Compound Bulk Drug Substance, are maintained in a state of repair and operating efficiency in accordance with the requirements of GMP and Applicable Law. MacroGenics will obtain, at its expense, any facility or other licenses or permits, and any Governmental Authority approvals necessary for the Manufacture and supply of the Licensed Compound Bulk Drug Substance. Unless otherwise agreed by the Parties, MacroGenics will be responsible for procuring all Materials necessary to meet its supply obligations under this Agreement. A delay in delivery by a vendor of Materials to be supplied by MacroGenics will not be considered a delay by MacroGenics. MacroGenics will notify Incyte of any such delay in the delivery of Materials that will result in MacroGenics’ inability

244242908 v3

to meet its supply obligations hereunder. Notwithstanding the following, [***].

3.3    Incyte Responsibilities. Incyte will provide [***] to MacroGenics in order for MacroGenics to Manufacture Licensed Compound Bulk Drug Substance and Deliver the Batches according [***] set forth in each Binding Portion.

3.4    Subcontracting. MacroGenics may appoint subcontractors to perform its obligations and/or exercise its rights under this Agreement provided that the applicable subcontractor will be required to comply with the applicable terms and conditions of this Agreement. [***] Each Party will be responsible for the compliance of any of its subcontractors with this Agreement. Notwithstanding the foregoing, (i) [***]; and (ii) such appointment will be made in compliance with Section 9.1.

3.5    Operation of Manufacturing Facilities. Subject to MacroGenics’ compliance with its obligations under this Agreement, MacroGenics will have the sole discretion in the operation and use of the MacroGenics Manufacturing Facility to fulfill its respective obligations to supply the Licensed Compound Bulk Drug Substance under this Agreement, including with respect to the following:[***]

3.6    Same Manufacturing Facility. MacroGenics will Manufacture all quantities of Licensed Compound Bulk Drug Substance that are required per the terms of this Agreement from the MacroGenics Manufacturing Facility. For clarity, MacroGenics will [***] Licensed Compound Bulk Drug Substance is Manufactured [***].

3.7    Accommodation. From time to time, [***], Incyte may [***] in a Binding Portion. In response to such purchase orders, MacroGenics, [***] Licensed Compound Bulk Drug Substance volumes. If MacroGenics [***] it will use Commercially Reasonable Efforts to do so.

3.8    Shelf Life Requirements. MacroGenics will use reasonable efforts to supply Batches (i) Manufactured [***]; provided, however, that if the shelf life [***] for the Licensed Compound Drug Substance [***], the Parties [***] for Batches when Delivered.

3.9    Manufacturing Related Activities. MacroGenics will perform Manufacturing Related Activities pursuant to Incyte’s written requests, or as required by the Product Specifications, GMPs or

244242908 v3

b.    Applicable Law relating to the regular course of Manufacturing Batches. Manufacturing Related Activities [***].

4.    FORECASTING; PRODUCTION SCHEDULE; DELIVERY

4.1    Rolling Drug Substance Forecast.

a.    The amounts of Licensed Compound Bulk Drug Substance to be Manufactured by MacroGenics [***] to supply Incyte under this Agreement will be set forth in a [***] rolling forecast (“Rolling Drug Substance Forecast”). [***] Calendar Years of each Rolling Drug Substance Forecast are designated (i) [***] as a “Forecast Year” individually and “Forecast Years” collectively.

i.    Each Rolling Drug Substance Forecast shall include the components listed and defined in Table 4.1.a.i.

									
	Table 4.1.a.i

	Component	[***]	[***]

244242908 v3

									
	Annual Global Commercial Supply Forecast
	[***]	[***]
	[***]	[***]	[***]

ii.    [***] and the Annual Global Commercial Supply [***];

b.    For the [***] and each Calendar Year thereafter, MacroGenics, at its [***], shall [***] Manufacture [***] Annual Global Commercial Supply Forecast. In instances where [***], the number of Batches for [***].

4.2    Initial Rolling Drug Substance Forecast. The initial Rolling Drug Substance Forecast (“Initial Drug Substance Forecast”) is attached to this Agreement as Exhibit B. [***] Drug Substance Rolling Forecast.

4.3    Updated Rolling Drug Substance Forecast [***] Calendar Quarter the Parties will update the current Rolling Drug Substance Forecast to generate a new Rolling Drug Substance Forecast (“Updated Rolling Drug Substance Forecast”).

a.    Subject to Sections 4.1 and 4.2, upon the expiration of the Calendar Year in which it is created, each Updated Rolling Drug Substance Forecast will [***].

b.    Incyte will [***] Updated Rolling Drug Substance Forecast and [***] MacroGenics [***] Incyte will:

i.    Identify for each Calendar Year of such Updated Rolling Drug Substance Forecast:

(1)    The Annual Global Commercial Supply Forecast; provided that the Annual Global Commercial Supply Forecast for [***] Rolling Drug Substance Forecast respectively.

(2)    [***]; and

(3)    Batches requested for [***]; provided that, [***] from [***] Rolling Drug Substance Forecast respectively.

ii.    For each Batch Manufactured [***], the Calendar Quarter during which [***].

c.    MacroGenics will have the following rights in revising each draft of the Updated Rolling Drug Substance Forecast received from Incyte:

i.    [***] Calendar Years, provided that the Parties [***] to address [***] by MacroGenics under this Section 4.3(c)(i) for a Forecast Year will [***] Global Supply Forecast [***] Forecast Year [***] Updated Rolling Drug Substance Forecast;;

ii.    [***] Calendar Years in which in the event the [***] Annual Global Commercial Supply Forecast; provided that [***] of the Annual Global Commercial Supply Forecast. In instances where the [***], the number of Batches for the [***].

iii.    [***] Licensed Compound Bulk Drug Substance and/or Licensed Drug Product as provided under Section 9.1(d).
244242908 v3

iv.    [***] the Calendar Quarter [***] in Section 4.3(b)(ii) to reflect available Manufacturing slots. The [***] Calendar Quarter shall be [***], unless mutually agreed by the Parties.

d.    After reviewing and revising each draft Updated Rolling Drug Substance Forecast received from Incyte, MacroGenics shall forward such Updated Drug Substance Forecast to Incyte. Upon receipt by Incyte, the binding portions of such Updated Rolling Drug Substance Forecast shall become binding on both Parties with respect to the Calendar Years covered by such Updated Drug Substance Forecast (“Binding Portion”).

e.    In the event that an Updated Rolling Drug Substance Forecast is not timely completed, the Binding Portions of the current Rolling Drug Substance Forecast will remain in effect until the earlier of its expiration or such Updated Rolling Drug Substance Forecast is completed. In addition, at MacroGenics’ sole discretion, Year 4 of the Rolling Drug Substance Forecast currently in effect will become binding as Reserved Capacity, with addition of any additional lots as calculated in 4.3(c).

4.4    [***]. During [***] Rolling Drug Substance Forecast [***] Updated Rolling Drug Substance Forecast by the Parties under Section 4.3.e that same Calendar Year, Incyte will be [***] of such Rolling Drug Substance Forecast by [***]; provided that the [***] for [***] such Rolling Drug Substance Forecast cannot be lower than the current binding [***].

4.5    Purchase Orders. For Batches to be supplied per the Binding Portions, Incyte will submit a written purchase order prior [***] Calendar Month (“Purchase Order Month”) [***] in which such Batches will be Delivered. [***] Purchase Order Month, MacroGenics will forward the Delivery dates [***]. Within [***] after [***], Incyte will [***] that [***] that is [***] of the Delivery [***]. Upon receipt of such notification, the date identified by such notification will be binding upon both Parties.

a.    If Incyte fails to submit the purchase order for a single Batch or multiple Batches [***], MacroGenics will have the sole discretion to determine the Delivery date for such Batch(es).

4.6    Purchase by Affiliates. Incyte’s Affiliate, [***] may submit Purchase Orders Purchase Order for Manufacture of a Batch. Upon the mutual written agreement of the Parties, other Affiliates of Incyte may also submit Purchase Orders for a Batch. For Purchase Orders submitted by Affiliates of Incyte:

a.    Each Affiliate submitting a Purchase Order shall be identified in writing to MacroGenics prior to or at the time such Purchase Order is submitted;

b.    Incyte shall be responsible and liable for paying all amounts due to MacroGenics resulting from Purchase Orders submitted by Affiliates of Incyte and none of its Affiliates will have responsibility or liability to MacroGenics for such payments;

c.    Any [***] that result from any Purchase Orders submitted by Affiliates of Incyte [***] shall be deemed under [***] of the Collaboration Agreement to be [***] of the [***] that would have been payable had Incyte submitted such Purchase Orders so that Incyte will pay MacroGenics such additional amounts as necessary to ensure MacroGenics receives the amounts it would have received if [***]; and

d.    All other terms and conditions of this Agreement shall continue to apply to the Parties.

244242908 v3

4.7    Batch Cancellations or Delays in Receipt of Batches. If Incyte wishes to cancel or delay Manufacture of one or more Batches set out in a Binding Portion, Incyte will promptly notify MacroGenics in writing. Notwithstanding anything to the contrary set forth herein, Incyte will be liable for and [***] of the Batch Price of such cancelled or delayed Batch(es) and any non-cancelable Material charges. Notwithstanding the above, MacroGenics will use Commercially Reasonable Efforts to mitigate any costs associated with the cancellation or delay of Manufacture of any Batch (whether in whole or in part) by Incyte. To the extent MacroGenics is able to reallocate such capacity to manufacture of other products, Incyte will have [***] with respect to cancellation compensation. For clarity, Incyte will remain liable for the performance of the Manufacturing Related Activities [***] by MacroGenics.
.

4.8    Delivery. MacroGenics will Deliver each Batch in accordance with the Delivery date specified for such Batch in the applicable purchase order. Incyte will bear the risk of loss or damage to each Batch upon its Delivery. Incyte will arrange to have Batches promptly shipped from the MacroGenics Manufacturing Facility upon their Delivery. If Incyte fails to take Delivery of a Batch within [***] after its Delivery, unless otherwise agreed in writing MacroGenics, may charge a storage fee as outlined in the Price Schedule

244242908 v3

5.    ACCEPTANCE; NON-CONFORMING LICENSED COMPOUND

5.1    Product Warranty. MacroGenics hereby warrants that, at the time and place of Delivery pursuant to Section 4.7, that each Batch, will be transferred to Incyte free and clear of any security interests, liens or encumbrances.

5.2    Inspection and Acceptance. [***] after Delivery of each Batch, Incyte will, in its sole discretion, (a) conduct a visual inspection of such Batch for [***]; and (b) conduct an inspection of [***] pursuant to the terms of the Commercial Quality Agreement (as applicable). Incyte may reject the Batch in the event that it fails to meet the applicable Product Specifications (“Non-Conforming Licensed Compound”) by providing written notice to MacroGenics (a “Deficiency Notice”). Any Deficiency Notice will state in reasonable detail (reasonably sufficient to enable MacroGenics to identify the nature of the problem or to dispute the same) the nature of such alleged defect. If Incyte does not reject such Batch by providing a Deficiency Notice to MacroGenics within [***] of Incyte’s receipt of all documentation per the terms of the Commercial Quality Agreement, Incyte will be deemed to have accepted such Batch. For the avoidance of doubt, Incyte’s Quality Assurance group will release [***] of the commercial supplies of Licensed Compound Bulk Drug Substance and Licensed Compound Drug Product; provided that for any Batches, Incyte’s Quality Assurance group will complete such release [***] of receipt of all documents required pursuant to the terms set out in the Commercial Quality Agreement.

.
5.3    Replacement. Upon receipt of a Deficiency Notice, MacroGenics will have [***] to advise Incyte in writing whether it disagrees in good faith with the contents of such Deficiency Notice (the “Response Notice”). If MacroGenics does not respond [***], the Deficiency Notice will be deemed accepted by MacroGenics. If the Parties [***] after Incyte’s receipt of a Response Notice from MacroGenics whether the Batch at issue is Non-Conforming Licensed Compound, then the Parties will promptly select a mutually acceptable, independent laboratory to evaluate whether the Batch is Non-Conforming Licensed Compound. If the independent laboratory determines that the Batch is Non-Conforming Licensed Compound, and the non-conformance is due solely to MacroGenics’ gross negligence or willful misconduct in the Manufacture of such Batch, MacroGenics will replace, at no additional expense to Incyte, such Non-Conforming Licensed Compound Bulk with a Batch that meets the Product Specifications. If the independent laboratory determines that the Batch is not Non- Conforming Licensed Compound, then Incyte will be deemed to have accepted Delivery of such Batch.

5.4    Batch Failure. Notwithstanding Section 5.3, the allocation of liability for Batch Failures is as follows:

a.    In the case of any Batch Failure resulting from MacroGenics’ gross negligence or willful misconduct, MacroGenics will be [***].

b.    In the case of Batch Failures that occur when MacroGenics [***], Incyte will be [***]. For avoidance of doubt, this includes a [***] resulting from [***].

c.    In the case of all other Batch Failures, the liability will be allocated as follows:

i.    If [***], Incyte will be liable for the [***] and MacroGenics will be responsible [***].    Thereafter, if there are any [***], the Parties will escalate such issue in accordance with Section 14.10.

ii.    [***] Batches are Manufactured per year, Incyte [***] and MacroGenics [***]. Thereafter, if there are any [***], the Parties will escalate such issue in accordance with Section 14.10.
244242908 v3

iii.    If [***] Batches are Manufactured [***], Incyte [***] and MacroGenics [***]. Thereafter, if there are any [***], the Parties will escalate such issue in accordance with Section 14.10.

5.5    During each [***], the Parties will reconcile the costs associated with Batch Failures that occurred during the prior Calendar Year in accordance with Section 5.4. For clarity, the allocation of liability for Batch Failures set forth herein will exclude (i) in the case of Incyte, any Batch Failures resulting from MacroGenics’ gross negligence or willful misconduct; and (ii) in the case of MacroGenics, any Batch Failures that occur when MacroGenics adheres to the Manufacturing Process and/or or Incyte’s instructions.

5.6    Sole Remedy. Notwithstanding anything to the contrary set forth in this Agreement or the Collaboration Agreement, the remedies set forth in Sections 5.3 and 5.4 will be the exclusive remedies of Incyte, its Affiliates and their respective Collaborators and licensees and will constitute fulfillment of all obligations by MacroGenics to Incyte, its Affiliates and their respective Collaborators and licensees (including any liability for direct, indirect, special, incidental or consequential damages or lost profits), whether in warranty, contract, negligence, tort, strict liability, or otherwise with respect to any nonconformities, defect or deficiency of the Batches.

6.    MANUFACTURING DEVELOPMENT ACTIVITIES

6.1    Governance. The Parties hereby agree to maintain the Joint Project Team (“JPT”) established under the Clinical Supply Agreement, consisting of technical representatives from each Party, with its primary purpose being to plan, execute and discuss issues regarding the CMC Development Plan. Any disputes or issues that cannot be readily resolved by the JPT will be referred to the JMC for resolution. Any decision by the JPT which has the effect of amending the CMC Development Plan must be reviewed and approved by the JMC. Each Party will appoint an individual as a Project Manager who will be responsible for leading and coordinating the activities of the JPT and the CMC Development Plan.

6.2    CMC Development Plan. All new Manufacturing Development activities to be conducted by MacroGenics under this Agreement will be set forth in the CMC Development Plan which includes an estimated budget for the costs to be incurred by MacroGenics in performing such Manufacturing Development work (the “CMC Development Budget”), including any Third Party Expenses. Updates to the CMC Development Plan will be mutually approved by the JMC prior to initiation of any activities not already mutually approved by the JMC. MacroGenics will use Commercially Reasonable Efforts to perform the Manufacturing Development activities set forth in the CMC Development Plan. MacroGenics may not exceed the CMC Development Budget [***] without the Parties agreeing to an amendment to the CMC Development Plan in accordance with Section 6.3 below. MacroGenics will not be obligated to perform any Manufacturing Development activities if the Parties cannot agree to an increase in the CMC Development Budget. In addition, MacroGenics will not be obligated to perform any Manufacturing Development activities that are not specifically set forth in the CMC Development Plan

6.3    For purposes of clarification, the CMC Development Plan undertaken by the Parties under the Clinical Supply Agreement shall continue to be conducted under and governed by the Clinical Supply Agreement.

6.4    Amendments to CMC Development Plan. If a Party anticipates or becomes aware of any needed material change needed in the scope or timing of a Manufacturing Development 
244242908 v3

activity in order to accomplish its purpose, such Party will promptly notify the other Party in writing. The JMC will then mutually agree whether the CMC Development Plan is to be modified. If the Parties agree with an identified change in the scope or timing of the CMC Development Plan, the Parties through the JMC will execute a written amendment to the CMC Development Plan showing or indicating the needed changes in the Manufacturing Development activities, their timelines and the CMC Development Budget. If the JMC declines to amend the CMC Development Plan, including, as applicable, the CMC Development Budget, MacroGenics will not be obligated to perform, and Incyte will not be obligated to pay for, any activities that would have been affected by the amendment until such an amendment has been executed by the Parties. Any amendments to the CMC Development Plan, including to the CMC Development Budget, must be approved by the JMC in writing. Both Parties will act in good faith and respond promptly when considering an amendment requested by the other Party.

6.5    Incyte Responsibilities. As set forth in the CMC Development Plan, Incyte will be responsible for
(i) providing information or materials to MacroGenics; and (ii) reviewing and approving any deliverables, documents or other items as promptly as practicable, but [***] applicable item to be reviewed or the request for approval unless otherwise specified by the CMC Development Plan.

6.6    Delays; Cancellation of Work. MacroGenics will not be responsible for any delays caused by failure of Incyte to meet its obligations set forth in Section 6.4, including delays caused by Incyte’s failure to respond to any requests for approvals within the time frame set forth in Section 6.4. Incyte may not cancel any Manufacturing Development activities without the Parties mutually agreeing in writing to an amendment to the CMC Development Plan to cancel or terminate such activities. Upon the Parties’ mutual written agreement to an amendment to cancel or terminate any Manufacturing Development activities, any materials, FTE Costs to the extent such FTEs are unable to be reallocated [***], Third Party Expenses and other items that cannot reasonably be cancelled or used by MacroGenics for other purposes will be invoiced to and paid for by Incyte.

6.7    No Guarantees. The Parties hereby agree that MacroGenics does not provide any guarantees of success with regard to any of the Manufacturing Development activities or deliverables relating thereto, including that the Manufacturing Development activities can be completed as contemplated in the CMC Development Plan after MacroGenics has used Commercially Reasonable Efforts to do so.

6.8    Incyte will use Commercially Reasonable Efforts to plan for making Drug Product presentations required for MacroGenics Combination Regimens (including, but not limited to [***]) commercially available in a timeline consistent with MacroGenics’ anticipated regulatory filings. Such plans shall include, but not be limited to, the following Manufacturing Development activities: [***].

7.    PRICE; PAYMENT; TAXES

7.1    Batch Manufacture. For purchase of each Batch, Incyte will pay a price (“Batch Price”) consisting of [***]. [***] are included in the Price Schedule. The [***] include all corresponding invoices [***] Drug Substance [***]. The [***] includes all charges associated with labor, repairs and maintenance, rent, utilities, depreciation and [***]. The [***] will be invoiced as [***] as set forth in Section in 7.2.a. For sake of clarity, MacroGenics [***]. Both the costs for [***] during Manufacture will be [***]. The Parties will subsequently [***] paid by Incyte with the [***] by MacroGenics for such items. Other than for [***], invoiced costs for [***] will not include [***]. The cost of [***] Manufacture Batches and costs [***] will not be included in [***] and will be invoiced separately.

244242908 v3

a.    Batch Price Adjustments

i.    [***]:

(1)    Each Calendar Year [***] after the [***] for the prior Calendar Year; and

(2)    to reflect changes in the costs to Manufacture Licensed Compound Bulk Drug Substance resulting from Notified Laws, Required Specification Changes and Discretionary Specification Changes or Process Changes due to other reasons or causes.

ii.    [***]:

(1)    [***] of each Calendar Year, MacroGenics will send Incyte a written report setting forth (i) [***]

(2)    [***].

iii.    [***]

(1)    The [***] for a Batch that will be used to Manufacture License Compound Drug Product to supply

244242908 v3

[***].

b.    [***]. [***] will be invoiced upon receipt and separately from the Batch Price and will include [***] reimbursement fee to cover costs associated with [***].

c.    Regulatory Activities. Incyte will pay for activities performed herein at the FTE Rate, plus any Third Party Expenses incurred by MacroGenics to perform regulatory activities and/or address regulatory matters specifically related to each Batch (“Regulatory Activity Costs”). The costs of Manufacturing Related Activities and Manufacturing Development Costs are excluded from Regulatory Activity Costs.

d.    Batch Shipping. The cost of [***]. Should MacroGenics [***] (at MacroGenics’ discretion if requested by Incyte), costs incurred by MacroGenics [***]. Costs incurred by MacroGenics for [***].

e.    Manufacturing Development. Incyte will pay for Manufacturing Development activities performed herein at the FTE Rate, plus any Third Party Expenses incurred by MacroGenics in the performance of such Manufacturing Development activities (“Manufacturing Development Costs”). For clarity, the Manufacturing Development costs will include, but will not be limited to, process optimization, analytical characterization and technical transfer support and will exclude costs incurred to Manufacture Batches.

f.    Manufacturing Related Activities. Incyte will pay for Manufacturing Related Activities performed herein at the FTE rate, plus any Third Party Expenses incurred by MacroGenics in the performance of such Manufacturing Development activities, except as follows:

i.    The costs for MacroGenics to conduct the following Manufacturing Related Activities are included [***]:

(1)    retrieval, storage and analysis of data and maintenance of such data for mutually agreed upon periods in a database containing applicable information;

(2)    reporting to [***], or his/her designee, in accordance with the terms of the Commercial Quality Agreement, any significant atypical results, deviations or adverse trends exhibited during testing;

(3)    Annual Product Review that conforms to MacroGenics standard protocol. At Incyte’s option and cost, Annual Product Reviews can be performed beyond the scope of MacroGenics’ standard protocol at the FTE Rate plus any Third Party Expenses.);

(4)    continued process verification that conforms to MacroGenics’ standard protocol. At Incyte’s option and cost, continued process verification can be performed beyond the scope of MacroGenics’ standard protocol at the FTE Rate plus any Third Party Expenses.

244242908 v3

ii.    Stability pulls will be invoiced [***] included in the Price Schedule.

7.2    Invoicing by MacroGenics

a.    Payment for the Batch Price shall be invoiced according to the following schedule:

i.    During the [***], the [***] during Manufacture will be invoiced;

ii.    [***] will be invoiced [***] to Delivery;

iii.    [***] will be invoiced [***] to Delivery;

iv.    [***] will be invoiced [***]; and

v.    [***] be invoiced [***].

b.    Manufacturing Development, Manufacturing Related Activities, [***].

i.    [***], MacroGenics will submit an invoice that includes the following costs incurred by MacroGenics during the prior Calendar Quarter:

(1)    The total costs (including Third Party Expenses and FTE Costs) incurred by MacroGenics to conduct Manufacturing Development, Manufacturing Related Activities and [***];

(2)    [***] to cover costs associated with [***] for purchased [***].

7.3    Payment.

a.    All invoices issued by a Party to the other Party will be sent by electronic means and be sent in accordance with any written instructions provided the other Party.

b.    Payment of all undisputed amounts due will be due [***] from a Party’s receipt of an invoice consistent with the requirements of subsection (a) above. Each Party will [***] of any disputed invoice, setting out in full the reasons such invoice is disputed.

c.    All payments due to a Party hereunder will be made in U.S. Dollars by wire transfer of immediately available funds into an account designated by such Party. If a Party does not receive payment of any sum due to it on or before the due date, such Party will notify the other Party, and such other Party will have [***] following receipt of such notice to pay any undisputed amount. Thereafter, interest will accrue on the undisputed sum due to the Party seeking payment until the date of payment [***].

244242908 v3

7.4    Financial Audit. Incyte shall have the right to conduct financial audits of MacroGenics’ records to confirm the accuracy of invoices submitted to Incyte for payment of amounts under this Agreement other than those for [***]. The conduct of any such audits by Incyte shall be governed by Section 8.12 of the Collaboration Agreement. Incyte shall not have the right to conduct audits of MacroGenics records to confirm the accuracy of or otherwise assess invoices submitted to Incyte for payment of amounts under this Agreement for [***].

7.5    Taxes. Subject to Section 4.6(c), Section 8.11 of the Collaboration Agreement will govern all tax matters under this Agreement.

8.    QUALITY CONTROL; REGULATORY; COMPLIANCE

8.1    General.

a.    MacroGenics will Manufacture the Batches in accordance with (a) the Product Specifications; (b) the GMPs; (c) Applicable Laws in the United States; and (d) subject to Section 8.1(c), any Notified Law.

b.    In the event that Incyte requests MacroGenics to comply with an Applicable Law in the Territory that is not required in the United States, Europe or such other country(-ies) mutually agreed upon by the Parties as subject to GMP as defined herein, Incyte will identify such Applicable Law to MacroGenics (a “Notified Law”), together with all available information regarding such Notified Law, so that MacroGenics may understand the nature, scope and requirements of such Notified Law. Incyte and MacroGenics will discuss and work together as to how MacroGenics may come into compliance with such Notified Law using Commercially Reasonable Efforts. All costs and expenses necessary to comply with a Notified Law will be paid by Incyte.

c.    If the Parties fail to agree [***] after Incyte’s request to comply with a Notified Law as to how MacroGenics may come into compliance with such Notified Law, then MacroGenics will have the final decision-making authority with respect to the resolution of such disagreement, including the ability to decline implementing such compliance with Notified Law.

8.2    Testing of Batches. Prior to release of a Batch to Incyte, MacroGenics or its permitted subcontractor will test such Batch in accordance with the procedures described in the Product Specifications, and will provide Incyte with the applicable executed master batch record and a copy of applicable deviation or other investigatory report, if any, on or before the Delivery date.

8.3    Certificates. MacroGenics will provide Incyte with a Certificate of Analysis and Certificate of Compliance for each Batch released for Delivery to Incyte hereunder. Such certificates will include the information as specified in the Commercial Quality Agreement. Incyte will be under no obligation to accept any Batch without the accompanying certificate.

8.4    Latent Defects. Incyte will have the right to reject a Batch if [***], it discovers a Latent Defect in such Batch which, through the process of root cause analysis, has been determined to have arisen as a direct result of MacroGenics’ failure to Manufacture such Batch in accordance with the Product Specifications and Incyte provides notice to MacroGenics of such Latent Defect [***].

8.5    Product Specification Changes.

244242908 v3

a.    Required Specification Changes. If a Governmental Authority in the Territory requires a change to the Product Specifications (a “Required Specification Change”), Incyte will promptly notify MacroGenics of such change. MacroGenics will use reasonable efforts to implement such Required Specification Change as promptly as possible within the time frame requested by the Governmental Authority at Incyte’s sole cost and expense.

b.    Discretionary Specification Change. Each Party will be entitled to request a change to the Product Specifications that is not a Required Specification Change (a “Discretionary Specification Change”). The requesting Party will submit a written request to the other Party for any such Discretionary Specification Change. If the Parties agree to make such Discretionary Specification Change, MacroGenics will then determine (a) one-time and/or ongoing costs that would be incurred resulting from such Discretionary Specification Change, (b) any resulting planned changes in timing for the Delivery of the Licensed Compound Bulk Drug Substance and (c) the estimated time of implementing such Discretionary Specification Change. MacroGenics will provide such information to Incyte and set forth the costs and other terms on which MacroGenics would be willing to make the Discretionary Specification Change. Upon written approval by Incyte to such terms, the Parties will cooperate in good faith in implementing such Discretionary Specification Change. All costs and expenses incurred by MacroGenics to implement any such Discretionary Specification Change will be at the sole cost and expense of Incyte, which MacroGenics will invoice as Manufacturing Development activities and to the extent the cost to Manufacture Licensed Compound Bulk Drug Substance changes, reflected in the Batch Price.

8.6    Quality Matters.

a.    Commercial Quality Agreement. Each Party will perform its obligations under the Commercial Quality Agreement to be negotiated in good faith and entered into by and among the Parties on or [***]. In the event of any conflict between this Agreement and the Commercial Quality Agreement, with respect to any quality-related terms and conditions, the Commercial Quality Agreement will control. In the event of a conflict of any other term or conditions, this Agreement will control, unless otherwise agreed to by the Parties in writing.

b.    Quality Assurance. MacroGenics will use Commercially Reasonable Efforts to implement and perform operating procedures and controls for sampling, stability and other testing of the Licensed Compound Bulk Drug Substance and for validation, documentation and release of the Batches and such other quality assurance and quality control procedures as are required by the specifications, GMP and the Commercial Quality Agreement (collectively, “Quality Assurance Measures”), for Commercial supply purposes. . The Quality Assurance Measures shall also govern the manufacturing process used at the [***] to Manufacture Licensed Compound Bulk Drug Substance Manufactured at the [***].

8.7    Audit by Incyte. Upon the reasonable prior written request of Incyte, Incyte will have the right to inspect and audit the MacroGenics Manufacturing Facility and Third Party facilities where the Batches are Manufactured (provided that for such Third Party facilities, to the extent MacroGenics is contractually permitted to grant Incyte such audit right) as set forth in Commercial Quality Agreement, as applicable, and pursuant to such requests to inspect and audit data, records, reports, information, licenses, permits and other documentation relating to the Manufacturing Processes for the purpose of assuring MacroGenics’ compliance with its obligations under this Agreement, including compliance with GMPs, as set forth in the Commercial Quality Agreement, [***], or more frequently for cause (i.e., for cause being defined as any instance or reasonable suspicion of existing or imminent violation of the Applicable Laws in the U.S. as demonstrated by reasonably detailed documentation). To the 
244242908 v3

extent such audit or inspection requires the disclosure of Confidential Information of MacroGenics that specifically references

244242908 v3

products or compounds other than the Licensed Compound or Licensed Product, MacroGenics will have the right to require Incyte to engage a Third Party consultant to conduct such audit or inspection who will be contractually obligated by Incyte not to disclose any Confidential Information of MacroGenics that could reasonably lead to the identification of such product.

8.8    Regulatory Authority Inspections.

a.    MacroGenics will be responsible for inspections of the MacroGenics Manufacturing Facility by Regulatory Authorities, and will, as soon as reasonably possible following receipt of notice of inspection from a Regulatory Authority, notify Incyte if such inspections are directly related to the Manufacture of the Licensed Compound Bulk Drug Substance or if the results of a non-related inspection could materially impair the ability of MacroGenics to perform in accordance with this Agreement. With respect to inspections specifically related to the Manufacture of Licensed Compound Bulk Drug Substance, MacroGenics will (a) provide Incyte with copies of all documents, reports or communications received from or given to any Regulatory Authority associated therewith; (b) subject to confidentiality obligations as requested by MacroGenics, permit Incyte’s representatives to be present on site and participate, as appropriate, based on questions or requests specific to Incyte or Licensed Compound Bulk Drug Substance and as permitted by Regulatory Authorities, in such inspections; and (c) allow Incyte the opportunity and sufficient time [***] to review and provide comments to MacroGenics with respect to matters related to the manufacture of Licensed Compound Bulk Drug Substance and MacroGenics will draft any such correspondence to Regulatory Authorities taking into account Incyte’s reasonable comments.

b.    Incyte will notify MacroGenics of any inspection of the [***] by a Regulatory Authority related to the Licensed Product and provide a written summary of the outcome of such inspection which will detail instances in which the Manufacture of the Licensed Compound Bulk Drug Substance was not compliant with Applicable Law and the basis of such non-compliance.

8.9    Cure of Deficiencies. MacroGenics will be responsible, at its own expense, for promptly correcting any deficiencies solely related to the MacroGenics Manufacturing Facility identified in any audit or inspection conducted by any Regulatory Authority under this Agreement. Incyte will be responsible for any expenses incurred by MacroGenics in correcting any Product specific deficiencies identified in any audit or inspection conducted by any Regulatory Authority subject to this Agreement,

8.10    Interactions with Regulatory Authorities. Except (a) for approvals and licenses required with respect to the MacroGenics Manufacturing Facility, which will be the responsibility of MacroGenics, or (b) as otherwise provided in the Collaboration Agreement, Incyte will be responsible for the preparation and filing of any Regulatory Documentation, if any, and for all contacts and communications with any Regulatory Authorities with respect to matters specifically relating to the Manufacture of Licensed Product; provided that as set forth in the Collaboration Agreement MacroGenics will continue to be responsible for submissions and interactions with Regulatory Authorities with respect to matters specifically relating to MacroGenics Pipeline Assets. MacroGenics will assist Incyte upon request with any interactions with Regulatory Authorities regarding the Manufacturing Related Activities or Manufacture of the Licensed Compound Bulk Drug Substance. Notwithstanding the foregoing, Incyte will identify, reference and include MacroGenics’ subcontractors in Exhibit A in the Regulatory Documentation. MacroGenics will notify Incyte [***] MacroGenics receives any contact or communication from any Regulatory Authority related in any way to the Manufacturing Related Activities or Manufacture of the Licensed Compound Bulk Drug Substance, or which could be reasonably expected to have a materially adverse effect on the Manufacturing Related Activities or Licensed Compound Bulk Drug Substance. MacroGenics 
244242908 v3

will provide Incyte with copies of any such correspondence or other communication [***] of such communication by MacroGenics. MacroGenics will consult with Incyte regarding

244242908 v3

the response to any inquiry or observation from any Regulatory Authority relating to the Manufacturing Related Activities or Manufacture of the Licensed Compound Bulk Drug Substance and, except with respect to matters related to the MacroGenics Manufacturing Facility, will allow Incyte, as appropriate, to participate in any further contacts or communications relating to the Manufacturing Related Activities or Manufacture of the Licensed Compound Bulk Drug Substance. MacroGenics will comply with all reasonable requests and comments by Incyte with respect to all contacts and communications with any Regulatory Authority relating in any way to the Manufacturing Related Activities or Manufacture of the Licensed Compound Bulk Drug Substance. MacroGenics will assist Incyte with drafts of any correspondence or other reports to be submitted to Regulatory Authorities concerning the Manufacturing Related Activities or Manufacture of the Licensed Compound Bulk Drug Substance, for review prior to submission, will consider in good faith Incyte’s comments, and will provide final copies to Incyte promptly after submission.

8.11    Regulatory Submission. [***] for Licensed Compound Bulk Drug Substance, which is, or is the equivalent to, the Chemistry, Manufacturing Controls (“CMC”) portion of an application (“Regulatory Submission”) that incorporates data generated by MacroGenics, Incyte will provide MacroGenics a copy of the Regulatory Submission to permit MacroGenics to verify its accuracy as it relates to MacroGenics-generated data and that it accurately describes the work that MacroGenics performed under this Agreement. A final copy of the Regulatory Submission will be provided by Incyte to MacroGenics upon submission to the Regulatory Authority.

8.12    Licensed Compound Records; Audit Rights. Section 7.4 of the Collaboration Agreement will govern each Party’s record-keeping obligations and audit rights with regard the Licensed Compound.

8.13    Recalls and Voluntary Withdrawals. Section 5.7(a) of the Collaboration Agreement will govern any recalls or voluntary withdrawals of the Licensed Product.

8.14    Product Returns. Incyte will instruct its distributors and customers to direct any returns of Licensed Products to Incyte in accordance with Incyte’s standard return policy. MacroGenics will promptly notify Incyte in writing (including all information MacroGenics has relating thereto) if any distributor, customer or other Third Party returns any Licensed Product to MacroGenics. MacroGenics will, at Incyte’s expense, promptly forward all such Licensed Product to the location specified by Incyte, and shall take no other action regarding such Licensed Product, unless requested, in writing, by Incyte or required by Applicable Law. After a commercially reasonable period of time safeguarding the Licensed Product so held, MacroGenics may destroy the Licensed Product if it has given written notice of its intention to Incyte and Incyte has not directed otherwise [***].

8.15    Retained Samples. MacroGenics will retain samples from each Batch [***] from the date of Delivery to Incyte, or for such longer period required by Applicable Law for recordkeeping, testing and regulatory purposes or specified in the Commercial Quality Agreement for the Licensed Compound Bulk Drug Substance. Prior to the destruction of any samples no longer required to be retained, MacroGenics will obtain written approval from Incyte.

8.16    Annual Product Review. [***] with respect to the Licensed Compound Bulk Drug Substance during the Term [***] thereafter or so long as MacroGenics Manufactures Licensed Compound Bulk Drug Substance for Incyte, whichever is later, MacroGenics will prepare, and provide to Incyte, an annual review for the Products as required by GMPs and Applicable Laws (each, an “ Annual Product Review”), as more particularly set forth in the Commercial Quality Agreement.

244242908 v3

9.    MANUFACTURING TECHNOLOGY TRANSFER

9.1    Manufacturing Technology Transfer. Incyte may request, [***] to MacroGenics that MacroGenics transfer or have transferred the then-current Manufacturing Process to the [***] (the “Manufacturing Technology Transfer”). MacroGenics shall not unreasonably withhold its agreement to such request.

a.    The Manufacturing Technology Transfer will be sufficient to enable Incyte or such designee to perform the Manufacturing Process and Manufacture of Licensed Compound Bulk Drug Substance, as applicable, in accordance with Applicable Law, as more fully described in this Article 9 and will be subject to a written plan approved by the JMC with respect to such Manufacturing Technology Transfer (the "Manufacturing Transition Plan"), with Incyte having final decision-making authority on the Manufacturing Technology Transfer (provided that Incyte may not expand the scope of the Know-How and Information to be transferred pursuant to Section 9.1.b. beyond that which is required hereunder or under the Collaboration Agreement). MacroGenics will have no obligation to perform any activity that is not within the scope of the Manufacturing Transition Plan including with respect to its type, volume, timing and/or completion date that has not been agreed to in writing by MacroGenics. The Parties will use Commercially Reasonable Efforts to effect a Manufacturing Technology Transfer to Incyte pursuant to this Section 9.1. The implementation of the Manufacturing Technology Transfer and Manufacturing Transition Plan will be subject to [***] being in an operational state that is suitable for the Manufacture of the Licensed Compound Bulk Drug Substance.

b.    MacroGenics will provide all reasonable assistance requested by Incyte to enable Incyte to implement the Manufacturing Technology Transfer, including by transferring to Incyte all Know-How and Information necessary for such Manufacturing Technology Transfer. In connection with a Manufacturing Technology Transfer, MacroGenics will cause its appropriate employees and representatives of MacroGenics to meet with employees and/or representatives of Incyte at reasonable times to assist with the implementation and use of such Manufacturing Process and with the training of the personnel of the [***] to the extent reasonably necessary or useful for the use and practice of such Manufacturing Process. Incyte will reimburse MacroGenics' FTE Costs and reimburse all reasonable travel and Third Party Expenses incurred by MacroGenics in order to complete the Manufacturing Technology Transfer, [***] from MacroGenics setting forth such costs. Subsequent to the occurrence of the Manufacturing Technology Transfer, at any time during the Term, upon either Party's reasonable request, the other Party will provide to the requesting Party the updated Manufacturing Process (including associated Know-How) Controlled by such other Party necessary or useful for the Manufacture of the Licensed Compound Bulk Drug Substance at Incyte’s sole cost and expense.

c.    The Manufacturing Technology Transfer will be conducted once. MacroGenics will have no obligation to undertake or assist with any other transfer of the Manufacturing Process whether to the [***].

d.    In the event the Clinical Supply Agreement expires or is terminated before this Agreement, MacroGenics shall have the right to include in the Updated Rolling Drug Substance Forecast amounts of [***] to be used for its Development purposes in each case.

i.    The Manufacture of, conduct of Related Manufacturing Activities for and purchase of such amounts of Licensed Compound Bulk Drug Substance shall be governed by the provisions of this Agreement mutatis mutandis.

244242908 v3

ii.    The Manufacture of, conduct of Related Manufacturing Activities for and purchase of such amounts of Licensed Compound Bulk Drug Product shall be governed by the provisions of the Clinical Supply Agreement mutatis mutandis.

9.2    Modifications to the Manufacturing Process. Any time after the completion of the Manufacturing Technology Transfer during the Term, to the extent that either Party wishes to make any material modifications, improvements or other alterations to the Manufacturing Process (“Process Change(s)”), the Parties shall meet to discuss and agree upon implementation of the same. All costs associated with Process Changes will be at Incyte’s sole cost. Subject to the aforementioned, the Party implementing a Process Change will use Commercially Reasonable Efforts at Incyte’s sole cost and expense to provide access to such Process Change to the other Party, and to reasonably cooperate with the other Party in its efforts to ensure (including through the implementation of subsequent modifications to such Process Change, to the extent required) that the Incyte Manufacturing Facility and the MacroGenics Manufacturing Facilities (as applicable) Manufacture the Licensed Compound Bulk Drug Substance using such Process Change and yield comparable License Compound Bulk Drug Substance as a result. Incyte will be responsible for obtaining any required regulatory approvals resulting from implementation of such modifications.

9.3    Assignability. Incyte will require that all agreements executed between Incyte and any Third Party with respect to such Third Party’s performance under this Agreement will permit the assignment of such agreement, in its entirety in the event of termination of the Collaboration Agreement (other than by Incyte pursuant to Section 12.3 or 12.6 of the Collaboration Agreement), to MacroGenics, without any consent rights by such Third Party (subject to MacroGenics agreeing to such assignment and the assumption of relevant obligations under such agreement).

10.    CONFIDENTIAL INFORMATION; INTELLECTUAL PROPERTY MATTERS

10.1    Confidentiality. Article 11 of the Collaboration Agreement will govern the confidentiality obligations and use restrictions of the Parties with respect to Confidential Information disclosed under this Agreement and the Commercial Quality Agreement.

10.2    Intellectual Property Matters. Article 9 of the Collaboration Agreement will govern all intellectual property matters arising under this Agreement.

11.    REPRESENTATIONS, WARRANTIES AND DISCLAIMERS

11.1    Corporate Action. Each Party represents to the other Party that (a) it is a corporation duly organized and validly existing under the laws of its jurisdiction of organization; (b) the execution and delivery of this Agreement has been authorized by all requisite corporate action; and (c) this Agreement is and will remain a valid and binding obligation of such Party, enforceable in accordance with its terms.

11.2    Absence of Other Contractual Restrictions. Each Party represents and warrants that it is under no contractual or other obligation or restriction that is inconsistent with its execution or performance of this Agreement or the rights granted to such Party under this Agreement. Neither Party will enter into any agreement, either written or oral, that would conflict with its obligations under this Agreement.

244242908 v3

11.3    Qualifications of Manufacturer Personnel. MacroGenics represents and covenants that all Personnel will have the proper skill, training and experience to Manufacture and supply the

244242908 v3

Licensed Compound Drug Bulk Substance, perform the Manufacturing Related Activities and conduct the Manufacturing Development activities.

11.4    No Debarment. Each Party represents and covenants that it has not been debarred, and has not been threatened with debarment, under Section 306(a) or (b) of the U.S. Generic Drug Enforcement Act of 1992, as amended, or under any comparable law of any other jurisdiction in the Territory, and that it will not knowingly use in any capacity under this Agreement any debarred person or entity.

11.5    Compliance. MacroGenics represents and warrants that the Manufacture, generation, processing, packaging, distribution, transport, treatment, storage, disposal and other handling of any Batches and Materials used to Manufacture or for their Manufacture, until Delivery of such Batches to Incyte will: (i) be in accordance with and conform to GMPs; (ii) be in accordance with and conform to any applicable standards specified by the United States Pharmacopeia and Pharmacopeia Forum and the European Pharmacopeia and Pharmacopeial Forum (and their equivalent standards, Applicable Laws in other jurisdictions, where applicable), and (iii) otherwise conform to any provisions of such Applicable Laws not reflected in GMPs; provided that the Manufacturing Process is in accordance and otherwise conforms with (i) through (iii) of this Section 11.5.

11.6    Maintenance of Manufacturing Facility. During the Term, MacroGenics will maintain the MacroGenics Manufacturing Facility in good condition and in accordance with GMP and all other Applicable Laws.

11.7    Security Measures. Except as otherwise provided herein with respect to data or Incyte Confidential Information, MacroGenics will maintain reasonable security policies at the MacroGenics Manufacturing Facility to protect the integrity of the Materials, Products and all other Incyte assets, tangible and intangible.

11.8    Origin of Materials. To the extent it relies upon materials of foreign origin in its performance of the services or supply of the goods or materials hereunder, MacroGenics has accurately identified, to the best of its knowledge, the ultimate source of such services, goods or materials, including, but not limited to, information relating to its downstream MacroGenics’ subcontractors.

11.9    Exclusion of Other Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, MACROGENICS DOES NOT MAKE ANY WARRANTY IN RESPECT OF THE MANUFACTURE AND SUPPLY OF THE LICENSED COMPOUND DRUG BULK SUBSTANCE OR THE PERFORMANCE OF THE MANUFACTURING RELATED ACTIVITIES OR THE MANUFACTURING DEVELOPMENT OR REGULATORY ACTIVITIES CONDUCTED BY MACROGENICS HEREIN, WHETHER EXPRESS OR IMPLIED BY STATUTE, CUSTOM OF THE TRADE OR OTHERWISE, THEIR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE UNDER ANY CONDITIONS, AND ANY SUCH WARRANTIES ARE HEREBY EXPRESSLY EXCLUDED.

12.    INDEMNIFICATION AND LIMITATION OF LIABILITY

12.1    Indemnification and Indemnification Procedures. Sections 14.1, 14.2 and 14.3 of the Collaboration Agreement will govern all indemnification matters and indemnification procedures arising from this Agreement.

12.2    LIMITATION OF LIABILITY

244242908 v3

a.    EXCEPT TO THE EXTENT INCLUDED IN LOSSES RESULTING FROM A THIRD PARTY CLAIM FOR WHICH ONE PARTY IS OBLIGATED TO INDEMNIFY THE OTHER PARTY (OR AN

244242908 v3

INDEMNITEE OF SUCH OTHER PARTY) PURSUANT TO SECTION 12.1 AND ANY BREACH OF ARTICLE 10 (CONFIDENTIAL INFORMATION; INTELLECTUAL PROPERTY MATTERS), IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY (OR THE OTHER PARTY’S AFFILIATES, COLLABORATORS, LICENSEES OR SUBLICENSEES) IN CONNECTION WITH THIS AGREEMENT FOR LOST REVENUE, LOST PROFITS, LOST SAVINGS, LOSS OF USE, DAMAGE TO GOODWILL, OR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE OR INDIRECT DAMAGES UNDER ANY THEORY, INCLUDING CONTRACT, NEGLIGENCE, OR STRICT LIABILITY, EVEN IF THAT PARTY HAS BEEN PLACED ON NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.

b.    MacroGenics’ aggregate liability to Incyte, its Affiliates and their respective Collaborators or licensees for any loss or damage suffered by any of them as a result of breach of this Agreement or any other liability (including negligence, misrepresentation or claims under the indemnities) under this Agreement is limited, in the aggregate, to the payments for the Delivery of Licensed Compound Bulk Drug Substance payable to MacroGenics [***] the occurrence of the event giving rise to the claim.

13.    TERM AND TERMINATION

13.1    Term. The term (“Term”) of this Agreement will expire upon expiration of the Royalty Term unless otherwise terminated in accordance with Section 13.2 below or otherwise extended upon mutual written agreement of the Parties; provided, however, if this Agreement is terminated or expires, but the CMC Development Plan is not terminated or completed, then the terms of this Agreement will continue to apply to the then-current CMC Development Plan until such CMC Development Plan is either terminated or completed. For the avoidance of doubt, if this Agreement is terminated or expires, the terms of this Agreement will continue to apply during wrap up activities related to regulatory, patient safety and quality aspects of Commercialization.

13.2    Termination. This Agreement may be terminated prior to the expiration of the Term under the following conditions:

a.    Either Party may, without prejudice to any other remedies available to it in law or equity, terminate this Agreement in the event that the other Party has materially breached or defaulted in the performance of any of its obligations under this Agreement. The breaching Party will have [***] after written notice thereof was provided to the breaching Party by the non-breaching Party to remedy such default. Any such termination will become effective at the end of such [***] unless the breaching Party has cured any such breach or default prior to the expiration of such period; or

b.    Either Party may terminate this Agreement in its entirety upon providing written notice to the other Party on or after the time that such other Party makes a general assignment for the benefit of creditors, files an insolvency petition in bankruptcy, petitions for or acquiesces in the appointment of any receiver, trustee or similar officer to liquidate or conserve its business or any substantial part of its assets, commences under the laws of any jurisdiction any proceeding involving its insolvency, bankruptcy, reorganization, adjustment of debt, dissolution, liquidation or any other similar proceeding for the release of financially distressed debtors, or becomes a party to any proceeding or action of the type described above (each, an “Insolvency Event”), and such proceeding or action remains un- dismissed or un-stayed for a period [***].

244242908 v3

13.3    Effects of Termination. Upon the expiration or earlier termination of this Agreement (a) Incyte will promptly pay to MacroGenics (i) all amounts outstanding and remaining to be paid for the Licensed Compound Bulk Drug Substance Delivered, (ii) activities performed prior to the date of expiration or termination to conduct Manufacturing Related Activities, Manufacturing Development, Batch shipping and regulatory activities, and (iii) the applicable amounts for all work in process and Licensed Compound Bulk Drug Substance Manufactured, but not then Delivered, by MacroGenics; and (b) any Materials purchased by MacroGenics to Manufacture Licensed Compound Bulk Drug Substance in accordance with the then-current Rolling Forecast that cannot be reasonably used for other purposes, and (c) any cancelled Batches.

13.4    Accrued Obligations. Neither the termination nor expiration of this Agreement will release either of the Parties from any liability which at the time of such termination or expiration has already accrued to such Party, nor affect in any way the survival of any other right, duty or obligation of either of the Parties which is expressly stated elsewhere in this Agreement to survive such termination or such non-renewal.

13.5    Survival. The following provisions will continue in force in accordance with their respective terms notwithstanding the expiration or the termination of this Agreement for any reason: Articles 1, 10 and 12 and Sections 5.2, 5.3, 5.4, 8.10, 8.11, 13.1, 13.3, 13.4, 13.5, 14.5, 14.6, 14.7, 14.8, 14.9, 14.10, 14.11, 14.12.

14.    MISCELLANEOUS

14.1    Assignment. Neither Party may assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the other Party, except that a Party may make such an assignment or transfer without the other Party’s consent to an Affiliate or to any Third Party that acquires all or substantially all of the business or assets of such Party to which this Agreement relates (whether by merger, reorganization, acquisition, sale or otherwise). Any successor or assignee of rights and/or obligations permitted hereunder will, in writing to the other Party, expressly assume performance of such rights and/or obligations. Any permitted assignment will be binding on the successors of the assigning Party. Any assignment or attempted assignment by either Party in violation of the terms of this Section 14.1 will be null, void and of no legal effect.

14.2    Relationship of the Parties. It is expressly agreed that MacroGenics, on the one hand, and Incyte, on the other hand, are independent contractors and that the relationship between the two Parties will not constitute a partnership, joint venture or agency. Neither MacroGenics nor Incyte will have the authority to make any statements, representations or commitments of any kind, or to take any action which will be binding on the other, without the prior written consent of the other Party to do so. All individuals employed by a Party will be employees of that Party and not of the other Party and all costs and obligations incurred by reason of such employment will be for the account and expense of such Party will be null, void and of no legal effect.

14.3    Insurance. Section 14.4 of the Collaboration Agreement will govern the insurance obligations of each Party under this Agreement.

14.4    Force Majeure. Both Parties will be excused from the performance of their obligations under this Agreement to the extent that such performance is prevented by Force Majeure and the nonperforming Party promptly provides notice of such Force Majeure circumstances to the other Party. Such excuse will be continued so long as the condition constituting Force Majeure continues and the nonperforming Party takes reasonable efforts to remove the condition. Notwithstanding the foregoing, a Party will not be excused from making payments owed 
244242908 v3

hereunder because of a Force Majeure affecting such Party. If a Force Majeure persists [***], then the Parties will discuss in good faith the modification of the Parties’ obligations under this Agreement

244242908 v3

in order to mitigate the delays caused by such Force Majeure. In the event a Party is prevented from performing its obligations under this Agreement due to Force Majeure [***] according to this Section 14.4 the other Party will have the right to terminate this Agreement upon [***] notice after the expiration of such period. A termination under this Section 14.4 by either Party will be treated as a termination under Section 13.2(b) above and the corresponding provisions for termination under Section 13.2(b) will apply except to the extent the affected Party is prevented from performing due to the Force Majeure.

14.5    Notices. All notices and other communications given or made pursuant hereto will be in writing and will be deemed to have been duly given on the date delivered, if delivered personally, or on the next Business Day after being sent by reputable overnight courier (with delivery tracking provided, signature required and delivery prepaid), in each case, to the Parties at the following addresses, or on the date sent and confirmed by electronic transmission to the fax number specified below (or at such other address or fax number for a Party as will be specified by notice given in accordance with this Section 14.5):

If to Incyte:

[***]

If to MacroGenics:

[***]

14.6    Collaboration Agreement; Entire Agreement; Amendments.

a.    The Collaboration Agreement shall govern the provisions of this Agreement and the Parties’ rights and obligations hereunder except to the extent a provision of this Agreement amends, modifies or is contrary to a specific provision of the Collaboration Agreement. In particular, the provisions of this Agreement shall take precedent over the provisions of Section 14.5 and Article 7 (Manufacturing) of the Collaboration Agreement. Notwithstanding any other provision of this Agreement, the rights and obligations of the

244242908 v3

Parties to receive and to pay amounts under Article 8 (Consideration) of the Collaboration Agreement shall remain unaffected by this Agreement

b.    Subject to Section 14.6(a), this Agreement, including the Exhibits hereto, sets forth the complete, final and exclusive agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the Parties with respect to the subject matter hereof and with respect to the. Manufacture and supply of Licensed Compound Drug Substance by MacroGenics to Incyte. No subsequent alteration, amendment, change or addition to this Agreement will be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party. In the event of any inconsistency between the body of this Agreement and either any Exhibits to this Agreement or any subsequent agreements ancillary to this Agreement, unless otherwise expressly stated to the contrary in such Exhibit or ancillary agreement, the terms contained in this Agreement will control.

c.    Notwithstanding any other provision in this Agreement, the Clinical Supply Agreement will, until its expiration or termination in accordance with the terms set forth therein, remain in effect and continue to obligate the Parties with respect to

i.    MacroGenics’ right to Manufacture Licensed Compound Bulk Drug Substance and Licensed Compound Drug Product for its own, its Affiliates and their licensees’ Development and Commercialization purposes respectively;

ii.    MacroGenics’ right to purchase Licensed Compound Drug Bulk Drug Substance and Licensed Compound Drug Product from Incyte; and

iii.    the conduct of the CMC Development Plan set forth under the Clinical Supply Agreement as updated by the Parties;

14.7    Waiver and Non-Exclusion of Remedies. Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver will be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition. The waiver by either Party of any right hereunder or of the failure to perform or of a breach by the other Party will not be deemed a waiver of any other right hereunder or of any other breach or failure by such other Party whether of a similar nature or otherwise. The rights and remedies provided herein are cumulative and do not exclude any other right or remedy provided by Applicable Law or otherwise available except as expressly set forth herein.

14.8    Severability. If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is timely taken, the provision will be considered severed from this Agreement and will not serve to invalidate any remaining provisions hereof. The Parties will make good faith efforts to replace any such invalidated or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

14.9    Governing Law/Jurisdiction. This Agreement and all disputes arising out of or related to this Agreement or any breach hereof will be governed by and construed under the laws of the State of New York, without giving effect to any choice of law principles that would require the application of the laws of a different state.

14.10    Dispute Resolution.

244242908 v3

a.    If the Parties fail to resolve any claim, dispute, or controversy of whatever nature arising out of or relating to this Agreement, such claim, dispute or controversy will be resolved  in

244242908 v3

accordance with the dispute resolution provisions set forth in Article 13 of the Collaboration Agreement.

b.    Notwithstanding the above, in the event of a dispute between the Parties with respect to a Batch Failure, the Parties will meet to discuss and agree upon the feasibility of the release of further Batches. Thereafter, if the Parties still disagree as to whether further Batches can be released, the Parties’ most senior quality assurance officer, or their respective designated representatives, will confer to review samples and/or batch records, as appropriate. If the disagreement is not resolved, then samples, batch records and other data relating to the batch in dispute will promptly be submitted for testing and evaluation to an independent Third Party (including a testing laboratory qualified to perform such testing using validated methods) approved in writing by both Parties. The cost of testing and evaluation by the Third Party will be borne (x) by MacroGenics if the Products in question are ultimately found to fail to meet the Product Specification as a result of MacroGenics’ failure to adhere to the applicable Manufacturing Process and/or Incyte’s instructions, or
(y) by Incyte if MacroGenics is found to have adhered to the applicable Manufacturing Process and, if applicable, Incyte’s instructions.

14.11    Counterparts/Signatures. This Agreement may be executed in two (2) or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. This Agreement may be executed by .pdf or other electronically transmitted signatures and such signatures will be deemed to bind each Party as if they were the original signatures.

14.12    Construction. Whenever this Agreement refers to a number of days without using a term otherwise defined herein, such number refers to calendar days. Except where the context otherwise requires, (a) wherever used, the singular will include the plural, the plural will include the singular;
(b) the use of any gender will be applicable to all genders; (c) the terms “including,” “include,” “includes” or “for example” will not limit the generality of any description preceding such term and, as used herein, will have the same meaning as “including, but not limited to,” or “including, without limitation”; (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, refer to this Agreement in its entirety and not to any particular provision hereof; (e) the word “or” has the inclusive meaning that is typically associated with the phrase “and/or”; (f) the word “will” means “will”; (g) if a period of time is specified and dates from a given day or Business Day, or the day or Business Day of an act or event, it is to be calculated exclusive of that day or Business Day; (h) “Dollar”, “USD” or “$” means U.S. Dollars; (i) references to a particular Person include such Person’s successors and assigns to the extent not prohibited by this Agreement; (j) a capitalized term not defined herein but reflecting a different part of speech than a capitalized term which is defined herein will be interpreted in a correlative manner; (k) “written” includes communications sent and received by facsimile or electronic mail; (l) any definition of or reference to any agreement, instrument or other document herein will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein) and (m) references herein to pharmaceutical products, therapies, ingredients, and the like, will include biologics and biopharmaceutical products, therapies, ingredients, and the like, as applicable. The language of this Agreement will be deemed to be the language mutually chosen by the Parties and no rule of strict construction will be applied for or against either Party. Whenever a provision of this Agreement requires an approval or consent by a Party to this Agreement within a specified time period and notification of such approval or consent is not delivered within such time period, then, unless otherwise specified, the Party whose approval or consent is required will be conclusively deemed to have withheld its approval or consent. Each Party represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof.
244242908 v3

IN WITNESS HEREOF, the Parties have read and agree to be bound by the above terms and conditions and have entered into this Agreement effective as of the Effective Date set forth above.

244242908 v3

[***]

						
	Incyte Corporation

By:    /s/ Herve Hoppenot
	MacroGenics, Inc.

By:    /s/ Scott Koenig

	

Printed Name: Herve Hoppenot
	

Printed Name: Scott Koenig, MD, PhD

	

Title:    CEO
	

Title:    CEO

	Date: [***]	Date: [***]

[***]
244242908 v3

EXHIBIT A

[***]
244242908 v3

EXHIBIT B

[***]
244242908 v3

EXHIBIT C

[***]
244242908 v3

EXHIBIT D

[***]
244242908 v3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00322-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00322-of-00352.parquet"}]]