Document:

KALA_Ex10_12

		
			Exhibit 10.12
		

		
			 
		

		
			11/6/17
		

		
			 
		

		
			
		

		
			 
		

		
			100 Beaver Street, Suite 201, Waltham, MA 02453  Voice 781 996 5252  Fax 781 642 0399  www.kalarx.com
		

		
			 
		

		
			November 6, 2017
		

		
			 
		

		
			Mr. Todd Bazemore
		

		
			 
		

		
			Dear Todd: 
		

		
			 
		

		
			On behalf of Kala Pharmaceuticals, Inc., a Delaware corporation (the “Company”), I am pleased to offer you the position of Chief Operating Officer, pursuant to the terms of this letter. 
		

		
			 
		

		
			1.             Position. You will be employed to serve as the Company’s Chief Operating Officer. You shall report to the Company’s Chief Executive Officer, or if there is no Chief Executive Officer, to the senior executive of the Company, or to such member or members of the Board of Directors of the Company (the “Board”) as the Board shall determine from time to time. You are expected to devote your full business time to the performance of your duties and responsibilities for the Company and to materially abide by all Company policies and procedures as in effect from time to time. You are expected to perform the duties of your position, together with such other duties as may reasonably be assigned to you from time to time, consistent with your position as Chief Operating Officer. Moreover, during your employment with the Company, you are expected to conduct your business activities at all times in accordance with the highest legal, ethical and professional standards. 
		

		
			 
		

		
			2.             Base Salary. You will be paid on a bi-weekly basis at an annual base rate of $405,000 subject to tax and other withholdings as required by law, with salary to be paid in accordance with Company’s standard payroll practices. Your base salary will be reviewed annually by the Compensation Committee of the Board.
		

		
			 
		

		
			
		

		
			

		 

 

		

		
			3.             Cash Bonus. You will also be eligible to earn in each calendar year of your employment a performance-based cash bonus with a target of 40% of your annual base salary. Payment of this performance-based bonus shall be based on written Company and personal objectives and criteria established by the Board. The performance-based bonus, if any, will be determined by the Board in its discretion, and will be paid annually after the first of the year (but in no event later than March 15), subject to you being employed by the Company on the preceding December 31st, except as otherwise provided in Section 7. Any bonus for the first fiscal year in which your employment begins shall be prorated, based on the number of days you are employed by the Company during that fiscal year. You will also be paid a sign on bonus of $170,000, less all applicable taxes and withholdings, at the time the Company pays annual bonuses, (but in no event later than March 15, 2018) subject to you being employed by the Company on December 31st, 2017, except as otherwise provided in Section 7.
		

		
			 
		

		
			4.             Benefits. You may participate in any and all benefit programs that the Company establishes and makes available to its employees from time to time, provided you are eligible under (and subject to all provisions of) the plan documents governing those programs. The benefit programs made available by the Company, and the rules, terms and conditions for participation in such programs, may be changed by the Company at any time without advance notice. Additionally, the Company will reimburse you for all actual, necessary and reasonable expenses you incur in the course of the Company’s business, subject to the Company’s expense policy as in effect from time to time and the terms of Exhibit A,  attached hereto.
		

		
			 
		

		
			5.             Vacation. You are eligible for a maximum of four weeks of vacation per calendar year commencing on your date of employment. The number of vacation days for which you are eligible shall accrue at the rate of 1.67 days per month that you are employed during such calendar year. Any unused
		

		
			
		

		
			

		 

		

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			vacation will be treated upon termination of your employment in accordance with the Company’s annual vacation accrual policy.
		

		
			 
		

		
			6.             Equity Compensation.
		

		
			 
		

		
			(a)           If you decide to join the Company, it will be recommended to the Compensation Committee that, at a Compensation Committee meeting no later than the first meeting of the Compensation Committee following your first date of employment, the Compensation Committee approve the grant to you of an option to purchase 172,000 shares of the Company’s Common Stock at a price per share equal to the fair market value per share of the Common Stock on the date of grant, as determined by the Compensation Committee. Twenty-five (25%) of the shares subject to the option shall vest twelve (12) months after your first date of employment subject to your continuing employment with the Company, and, except as provided in Section 6(b) and 6(c), no shares shall vest before such date. The remaining shares shall vest monthly over the following thirty-six (36) months in equal monthly amounts subject to your continuing employment with the Company. This option grant shall be subject to the terms and conditions of the Company’s equity incentive plan, and your actual stock option agreement, including vesting requirements. No right to any stock is earned or accrued until such time that vesting occurs, nor does the grant confer any right to continue vesting or employment.
		

		
			 
		

		
			(b)           Subject to Section 6(c) and 7(c) hereof, if the Company terminates your employment without Cause (as defined below) or you voluntarily terminate your employment for Good Reason (as defined below), then the options and any other equity awards granted to you by the Company, at any time, that vest based solely on your continued service with the Company, will immediately vest as to the portion of the applicable award that would have vested if your employment with the Company had continued for twelve (12) months following such termination and any performance-based grants with the
		

		
			
		

		
			

		 

		

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			performance period ending within one year after the termination shall be treated as having satisfied any service requirement with respect thereto and shall vest subject to, and only to the extent of, the satisfaction of the applicable performance goals at the end of the applicable performance period. The period for exercising any options so accelerated shall be as set forth in the applicable stock option plan, certificate or agreement.
		

		
			 
		

		
			(c)           Subject to Section 7(c) hereof, if the Company, or its successor, terminates your employment without Cause or you voluntarily terminate your employment for Good Reason in Contemplation of a Change of Control (defined below), or within twelve (12) months following a Change of Control (as defined below), then one hundred percent (100%) of the options and any other equity awards granted to you by the Company, at any time, that vest based solely on your continued service with the Company and that are not then vested, and which have not been exercised, cancelled or forfeited, shall become vested and, if applicable, exercisable in full as of the date of such termination or, if later, the Change of Control and any performance-based grants with the performance period ending within one year after the termination shall be treated as having satisfied any service requirement with respect thereto and shall vest subject to, and only to the extent of, the satisfaction of the applicable performance goals at the end of the applicable performance period. The period for exercising any options so accelerated shall be as set forth in the applicable stock option plan, certificate or agreement.
		

		
			 
		

		
			(d)           For purposes of this letter agreement, a “Change of Control” shall mean: (i) a merger or consolidation in which (A) the Company is a constituent party or (B) a subsidiary of the Company is a constituent party, and the Company issues shares of its capital stock pursuant to such merger or consolidation, except in the case of either clause (A) or (B) any such merger or consolidation involving the Company or a subsidiary of the Company in which the beneficial owners of the shares of capital stock of the Company outstanding immediately prior to such merger or consolidation continue
		

		
			
		

		
			

		 

		

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			beneficially to own, immediately following such merger or consolidation, at least a majority by voting power of the capital stock of (x) the surviving or resulting corporation or (y) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation; (ii) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or a Company subsidiary of all or substantially all the assets of the Company and the Company subsidiaries taken as a whole (except in connection with a merger or consolidation not constituting a Change of Control under clause (i) or where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned Company subsidiary); or (iii) the sale or transfer, in a single transaction or series of related transactions, by the stockholders of the Company of more than 50% by voting power of the then-outstanding capital stock of the Company to any person or entity or group of affiliated persons or entities.
		

		
			 
		

		
			(e)           For purposes of this letter agreement, “Contemplation of a Change of Control”  means a termination without Cause or for Good Reason that is in connection with and reasonably related to, and occurs within 120 days prior to, a Change of Control.
		

		
			 
		

		
			(f)            For purposes of this letter agreement, “Good Reason” shall mean: (1) a material reduction in annual base salary, other than such a reduction that is proportionate to a reduction in salary of all executives of the Company generally; (2) a material breach by the Company of this letter agreement; (3) the relocation of your place of employment more than fifty (50) miles from your then current location without your express written consent; or (4) a material reduction in your job duties, authority, responsibilities, or reporting lines, so as to constitute a de facto demotion; provided that none of the foregoing shall qualify as Good Reason unless, within ninety (90) days of the occurrence of the event you claim so qualifies, you shall have provided the Board with written notice specifying in detail the basis for
		

		
			
		

		
			

		 

		

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			such claim and a reasonable opportunity to cure the claimed Good Reason and the Company fails to cure such Good Reason within thirty (30) days of its receipt of your notice; provided further that no termination for Good Reason shall so qualify unless you shall terminate your employment at the Company no more than thirty (30) days following the expiration of the Company’s cure period.
		

		
			 
		

		
			7.             Severance.
		

		
			 
		

		
			(a)           In the event that your employment is terminated by you for Good Reason or by the Company without Cause, you will receive severance of (i) twelve (12) months of your annual base salary then in effect, (ii) any bonus earned for the year prior to the year of termination that has not yet been paid, (iii) a pro-rated portion of any bonus attributable to the year of termination payable at the time that active employees receive their bonus payments for that year but in any event by March 15 of the year following the year of your termination, based on the Company’s performance against previously established milestones, and (iv) payment for the cost of up to twelve (12) months of COBRA premiums for continued health benefit coverage. Except as specifically described above, all payments will be made in a lump sum on the Payment Date (as defined below). The payments and benefits provided for in this Section 7(a) shall be subject to Exhibit A attached hereto.
		

		
			 
		

		
			(b)           For purposes of this letter agreement, “Cause”  shall mean: (a) commission of, or indictment or conviction of, any felony or any other crime involving dishonesty; (b) participation in any fraud, deliberate and substantial misconduct, breach of duty of loyalty or breach of fiduciary duty, in each case, against the Company; (c) intentional and substantial damage to any property of the Company; (d) serious misconduct by you that in the good faith and reasonable judgment of the Board demonstrates gross unfitness to serve as Chief Operating Officer of the Company; (e) willful persistent unsatisfactory job performance that remains uncured for at least sixty (60) days following written notice detailing the
		

		
			
		

		
			

		 

		

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			same from the Company; (f) your failure to secure and maintain work visas or other documentation sufficient to allow your service to the Company in the manner contemplated herein; or (g) your material breach of any material provision of this letter agreement or the Non-Competition, Non-Solicitation, Confidentiality and Assignment of Inventions Agreement or any similar agreement to which you are a party, in either case, which breach (if capable of cure) remains uncured for a period of thirty (30) days after written notice to you from the Company. Termination of your employment for Cause will result in no severance pay.
		

		
			 
		

		
			(c)           As a condition precedent to the receipt of any severance payments or the accelerated vesting of any equity awards pursuant to this letter agreement or pursuant to any equity award agreement, you will be required to execute a separation agreement and general release of claims in favor of the Company, substantially similar to the form attached hereto as Exhibit B, and any revocation period applicable to such release must expire, within sixty (60) days following your date of termination (the date on which the revocation period expires, the “Payment Date”). Notwithstanding the foregoing, if the 60th day following your date of termination occurs in the calendar year following the year in which your termination occurs, then the Payment Date shall be no earlier than January 1 of such subsequent calendar year.
		

		
			 
		

		
			8.             At-Will Employment. This letter agreement shall not be construed as an agreement, either expressed or implied, to employ you for any stated term, and shall in no way alter the Company’s policy of employment at-will, under which both you and the Company remain free to terminate the employment relationship, with or without cause, at any time, with or without notice. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time (provided that any such changes shall be without prejudice to your rights explicitly set forth in this letter agreement), the “at-will” nature of your employment may only be changed
		

		
			
		

		
			

		 

		

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			by a written agreement approved by the Board and signed by you and the Company, which expressly states the intention to modify the at-will nature of your employment.
		

		
			 
		

		
			9.             Arbitration and Equitable Relief. Should a dispute arise in connection with this letter agreement or your employment with the Company, the parties will first submit the dispute to non-binding mediation. The Company will pay for the mediation and select the mediator. Should the dispute remain unresolved after one day of mediation, the Company and you agree that said dispute or controversy arising out of, in relation to, or in connection with this letter agreement or your employment with the Company, or the making, interpretation, construction, performance or breach of this letter agreement shall be finally settled by binding arbitration in Massachusetts under the then current expedited rules of the American Arbitration Association by one (1) arbitrator mutually selected by the parties or in the event the parties cannot mutually agree, then appointed in accordance with such rules. The arbitrator may grant injunctive or other relief in such dispute or controversy, including awarding reasonable attorneys’ fees, filing fees and other costs to the prevailing party in the event of frivolous or unfounded claim(s) brought by the non-prevailing party. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court of competent jurisdiction. The parties agree that, any provision of applicable law notwithstanding, they will not request and the arbitrator shall have no authority to award, punitive or exemplary damages against any party. Notwithstanding anything in this Section 9 to the contrary, claims may be made in any Massachusetts court of competent jurisdiction by you or the Company for equitable relief to prevent a breach or threatened breach of any confidentiality or non-competition obligations of the other party
		

		
			 
		

		
			10.           Indemnification. You shall be entitled to corporate indemnification and insurance coverages, including survival of such protections following termination of your employment, to the same extent provided to other senior officers and directors of the Company.
		

		
			
		

		
			

		 

		

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			11.           Non-Competition, Non-Solicitation, Confidentiality and Assignment of Inventions Agreement. As a condition of your employment, you are required to sign and comply with the Non-Competition, Non-Solicitation, Confidentiality and Assignment of Inventions Agreement in the form attached as Exhibit C.
		

		
			 
		

		
			12.           Section 280G
		

		
			 
		

		
			(a)           If any payment or benefit (including payments and benefits pursuant to this Agreement) that you would receive in connection with an Acquisition from the Company or otherwise (“Transaction Payment”) would (a) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this Section 12, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Company shall cause to be determined, before any amounts of the Transaction Payment are paid to you, which of the following two alternative forms of payment would result in your receipt, on an after-tax basis, of the greater amount of the Transaction Payment notwithstanding that all or some portion of the Transaction Payment may be subject to the Excise Tax: (1) payment in full of the entire amount of the Transaction Payment (a “Full Payment”), or (2) payment of only a part of the Transaction Payment so that you receive the largest payment possible without the imposition of the Excise Tax (a “Reduced Payment”). “Acquisition” shall mean a change in the ownership or control of the Company or a change in the ownership of a substantial portion of the assets of the Company, in each case as determined under Section 280G and the Treasury Regulations thereunder.
		

		
			 
		

		
			(b)           For purposes of determining whether to make a Full Payment or a Reduced Payment, the Company shall cause to be taken into account all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and
		

		
			
		

		
			

		 

		

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			local taxes). If a Reduced Payment is made, (x) you shall have no rights to any additional payments and/or benefits constituting the Transaction Payment, and (y) reduction in payments and/or benefits shall occur in the manner that results in the greatest economic benefit to you as determined in this paragraph. If more than one method of reduction will result in the same economic benefit, the portions of the Payment shall be reduced pro rata.
		

		
			 
		

		
			(c)           The independent registered public accounting firm or law firm engaged by the Company as of the day prior to the effective date of the Acquisition shall make all determinations required to be made under this Section 12. If the independent registered public accounting firm or law firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Acquisition, the Company shall appoint a nationally recognized independent registered public accounting firm or law firm that is reasonably acceptable to you (and such acceptance shall not be unreasonably withheld) to make the determinations required hereunder. The Company shall bear all reasonable expenses with respect to the determinations by such independent registered public accounting firm or law firm required to be made hereunder. The independent registered public accounting firm or law firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Company and you within fifteen (15) calendar days after the date on which your right to a Transaction Payment is triggered or such other time as reasonably requested by the Company or you. If the independent registered public accounting firm determines that no Excise Tax is payable with respect to the Transaction Payment, either before or after the application of the Reduced Amount, it shall furnish the Company and you with detailed supporting calculations of its determinations that no Excise Tax will be imposed with respect to such Transaction Payment. Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and you.
		

		
			
		

		
			

		 

		

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			13.           Miscellaneous.
		

		
			 
		

		
			(a)           You represent that you are not bound by any employment contract, restrictive covenant or other restriction preventing (or that purports to prevent) you from being employed by or carrying out your responsibilities for the Company, or which is in any way inconsistent with the terms of this letter agreement.
		

		
			 
		

		
			(b)           The Company reserves the right to conduct background investigations and/or reference checks on all of its potential employees. Your job offer, therefore, is contingent upon a clearance of such a background investigation and/or reference check, if any. You are required to execute authorizations for the Company to obtain consumer reports and/or investigative consumer reports and use them in conducting background checks as a condition to your employment. The Company may obtain background reports from time to time during your employment with the Company, as necessary.
		

		
			 
		

		
			(c)           For purposes of federal immigration law, you will be required to provide the Company with documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated.
		

		
			 
		

		
			(d)           You represent that you have disclosed to the Company any and all agreements relating to your prior employment that may affect your eligibility to be employed by the Company or limit the manner in which you may be employed. It is the Company’s understanding that any such agreements do not prevent you from performing the duties of your position, and you represent that such is the case. You agree not to bring any third party confidential information to the Company, including that of your former employer, and covenant that in performing your duties for the Company you will not in any way utilize any such information.
		

		
			
		

		
			

		 

		

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			(e)           As an employee of the Company, you are required to comply with all Company policies and procedures. Material violations of the Company’s policies may lead to immediate termination of your employment but shall not change the definition of Cause. Further, the Company’s premises, including all workspaces, furniture, documents, and other tangible materials, and all information technology resources of the Company (including computers, data and other electronic files, and all internet and email) are subject to oversight and inspection by the Company at any time. Company employees should have no expectation of privacy with regard to any Company premises, materials, resources, or information.
		

		
			 
		

		
			(f)            Attorney’s Fees. The Company agrees that it will reimburse you up to a maximum amount of $5,000 for the legal fees incurred by you in connection with the review and negotiation of this letter agreement. The payment will be made directly to the law firm retained by you, subject to receipt of an invoice, with such invoice to be provided within sixty (60) days following the date hereof and such reimbursement to be made within thirty (30) days following receipt of the invoice.
		

		
			 
		

		
			(g)           Notices. Any notices from one party to the other will be in writing and will be given by addressing the same to the other at the address set forth in this letter agreement. Notices to the Company will be marked “Board of Directors”. Notice will be deemed to have been duly given when (a) deposited in the United States mail with proper postage for first class registered or certified mail, return receipt requested, (b) sent by any reputable commercial courier or (c) delivered personally.
		

		
			 
		

		
			(h)           Assignment. All of the terms and provisions of this letter agreement shall be binding on and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives successor and assigns of the parties hereto (including, in the case of
		

		
			
		

		
			

		 

		

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			the Company, any acquirer), except that your duties and responsibilities under this letter agreement are of a personal nature and shall not be assignable or delegable in whole or in part by you.
		

		
			 
		

		
			(i)            No Mitigation/No Offset. You shall have no obligation to seek other employment to mitigate any severance or other payments due hereunder. Any amounts earned by you from other employment shall not offset amounts due hereunder.
		

		
			 
		

		
			(j)            Modification; Amendment. This letter agreement may not be modified or amended except by a written agreement signed by you and an authorized representative of the Company.
		

		
			 
		

		
			(k)           Entire Agreement. This letter agreement contains and constitutes the entire understanding and agreement between the parties hereto with respect to the terms of your employment with the Company and supersedes any and all prior or contemporaneous agreements, discussions and understandings, whether written or oral, relating to the subject matter of this letter agreement or your employment with the Company.
		

		
			 
		

		
			(l)            Governing Law. This letter agreement will be governed by, and construed and enforced in accordance with, the laws of the Commonwealth of Massachusetts applicable to contracts made and to be performed therein, without giving effect to the principles thereof relating to the conflict of laws
		

		
			 
		

		
			(m)          Counterparts. This letter agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
		

		
			
		

		
			

		 

		

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			If you agree with the provisions of this offer, please sign the enclosed duplicate of this letter agreement in the space provided below and return it along with your signed Non-Competition, Non-Solicitation, Confidentiality and Assignment of Inventions Agreement to Mary Reumuth via email at mary.reumuth@kalarx.com or fax (781) 642-0399 by 5pm on 11/7/2017 with originals to follow. If you do not accept this offer by 11/7/2017, this offer will be deemed withdrawn.
		

		
			 
		

		
			[Signature page follows.]
		

		
			 
		

		
			 
		

		
			

		 

		

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						Very truly yours,

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						KALA PHARMACEUTICALS, INC.

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Mark Iwicki

				
	
					
						 

					
					
						Name:

					
					
						Mark Iwicki

				
	
					
						 

					
					
						Title:

					
					
						Chief Executive Officer and Chairman of the Board of Directors

				

		
			 
		

		
			The foregoing correctly sets forth the terms under which I will be employed by the Company, effective as of 11/20/17. I am not relying on any representations other than those set form above:
		

		
			 
		

			
					
						By:

					
					
						/s/ Todd Bazemore

					
					
						 

					
					
						November 6, 2017

				
	
					
						Name:

					
					
						Todd Bazemore

					
					
						 

					
					
						Date

				

		
			 
		

		
			Enclosures (4)
		

		
			Duplicate Original Letter Agreement
		

		
			Exhibit A: Payments Subject to Section 409A
		

		
			Exhibit B: Form of Separation and Release Agreement
		

		
			Exhibit C: Non-Competition, Non-Solicitation, Confidentiality and Assignment of Inventions Agreement
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

		
			EXHIBIT A
		

		
			 
		

		
			Payments Subject to Section 409A
		

		
			 
		

		
			1.             Subject to this Exhibit A, any severance payments that may be due under the letter agreement shall begin only upon the date of the your “separation from service” (determined as set forth below) which occurs on or after the termination of your employment. The following rules shall apply with respect to distribution of the severance payments, if any, to be provided to you under the letter agreement, as applicable:
		

		
			 
		

		
			(a)           It is intended that each installment of the severance payments under the letter agreement provided under shall be treated as a separate “payment” for purposes of Section 409A. Neither the Company nor you shall have the right to accelerate or defer the delivery of any such payments except to the extent specifically permitted or required by Section 409A.
		

		
			 
		

		
			(b)           If, as of the date of your “separation from service” from the Company, you are not a “specified employee” (within the meaning of Section 409A), then each installment of the severance payments shall be made on the dates and terms set forth in the letter agreement.
		

		
			 
		

		
			(c)           If, as of the date of your “separation from service” from the Company, you are a “specified employee” (within the meaning of Section 409A), then:
		

		
			 
		

		
			(i)            Each installment of the severance payments due under the letter agreement that, in accordance with the dates and terms set forth herein, will in all circumstances, regardless of when your separation from service occurs, be paid within the short-term deferral period (as defined under Section 409A) shall be treated as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissible under Section 409A and shall be paid on the dates and terms set forth in the letter agreement; and
		

		
			 
		

		
			(ii)           Each installment of the severance payments due under the letter agreement that is not described in this Exhibit A, Section 1(c)(i) and that would, absent this subsection, be paid within the six-
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

		
			month period following your “separation from service” from the Company shall not be paid until the date that is six months and one day after such separation from service (or, if earlier, your death), with any such installments that are required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day following your separation from service and any subsequent installments, if any, being paid in accordance with the dates and terms set forth herein; provided, however, that the preceding provisions of this sentence shall not apply to any installment of payments if and to the maximum extent that that such installment is deemed to be paid under a separation pay plan that does not provide for a deferral of compensation by reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an involuntary separation from service). Any installments that qualify for the exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of your second taxable year following the taxable year in which the separation from service occurs.
		

		
			 
		

		
			2.             The determination of whether and when your separation from service from the Company has occurred shall be made and in a manner consistent with, and based on the presumptions set forth in, Treasury Regulation Section 1.409A-1(h). Solely for purposes of this Exhibit A, Section 2, “Company” shall include all persons with whom the Company would be considered a single employer under Section 414(b) and 414(c) of the Code.
		

		
			 
		

		
			3.             All reimbursements and in-kind benefits provided under this letter agreement shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A, including, where applicable, the requirements that (i) any reimbursement is for expenses incurred during your lifetime (or during a shorter period of time specified in this letter agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

		
			before the last day of the calendar year following the year in which the expense is incurred and (iv) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit.
		

		
			 
		

		
			4.             The Company makes no representation or warranty and shall have no liability to you or to any other person if any of the provisions of the letter agreement (including this Exhibit) are determined to constitute deferred compensation subject to Section 409A but that do not satisfy an exemption from, or the conditions of, that section.
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

		
			Exhibit B
		

		
			 
		

		
			Form of Separation and Release Agreement
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			 

		

 

		

			 

		

		

		
			 
		

		
			[KALA LETTERHEAD](1)
		

		
			 
		

		
			BY [METHOD OF DELIVERY]
		

		
			 
		

		
			[INSERT DATE]
		

		
			 
		

		
			[INSERT EMPLOYEE NAME]
[INSERT EMPLOYEE ADDRESS]
		

		
			 
		

		
			Dear [INSERT EMPLOYEE NAME]:
		

		
			 
		

		
			The purpose of this letter agreement is to confirm the terms regarding your separation of employment from Kala Pharmaceuticals, Inc. (the “Company”), effective [INSERT SEPARATION DATE]. The Company will provide you with the severance benefits described in Section 2 below if you sign and return this letter agreement (the “Agreement”) to the Company by [Insert Return Date — At least 21 days after agreement is received by the employee (but no earlier than the Separation Date)] and it becomes binding between you and the Company. By signing and returning this Agreement and not revoking your acceptance, you will be entering into a binding agreement with the Company and will be agreeing to the terms and conditions set forth in the numbered paragraphs below, including the release of claims set forth in Section 3. Therefore, you are advised to consult with an attorney before signing this Agreement and you have been given at least twenty-one (21) days to do so. If you sign this Agreement, you may change your mind and revoke your agreement during the seven (7) day period after you have signed it by notifying me in writing. If you do not so revoke, this Agreement will become a binding agreement between you and the Company upon the expiration of the seven (7) day period.
		

		
			 
		

		
			If you choose not to sign and return this Agreement by [Insert Return Date - Same as Above] or if you timely revoke your acceptance in writing, you shall not receive any severance benefits from the Company. You will, however, receive payment on your Separation Date, as defined below, for your final wages and any unused vacation time accrued through the Separation Date. You may also, if eligible, elect to continue receiving group medical insurance pursuant to the federal “COBRA” law, 29 U.S.C. § 1161 et seq. Please consult the COBRA
		

		
			 
		

		

		
			(1) Please note that the form and/or substance of this agreement may be adjusted to reflect the timing of termination, address changes of law, and or other facts and circumstances.
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

			 

		

		

		
			materials to be provided by the Company under separate cover for details regarding these benefits. Further, pursuant to the Company’s 2009 Employee, Director and Consultant Equity Incentive Plan (as amended to date, the “2009 Plan”), you will have up to 90 days after the Separation Date to exercise any vested stock options you may have (as provided for by the 2009 Plan) subject to the terms of the letter agreement between you and the Company dated        (the “2017 Letter Agreement”). All unvested stock options will be cancelled on the Separation Date except as otherwise provided in the grants or the employment agreement.
		

		
			 
		

		
			The following numbered paragraphs set forth the terms and conditions that will apply if you timely sign and return this Agreement.
		

		
			 
		

		
			1.             Separation Date. Your effective date of separation from the Company is [INSERT SEPARATION DATE](2) (the “Separation Date”). As of the Separation Date, all salary payments from the Company will cease and any benefits you had as of the Separation Date under Company-provided benefit plans, programs, or practices will terminate, except as required by federal or state law.
		

		
			 
		

		
			2.             Description of Severance Benefits. If you timely sign and return this Agreement and do not revoke your acceptance, the Company will provide the following severance benefits set forth in the 2017 Letter Agreement as amended from time to time, between you and the Company (the “Severance Benefits”). You will not be eligible for, nor shall you have a right to receive, any payments or benefits from the Company following the Separation Date other than as described in this Section 2 and the 2017 Letter Agreement.
		

		
			 
		

		
			3.             Representation on Action. You represent that you have not filed or reported any complaints, claims or actions against any of the Released Parties with any state, federal or local agency or court.
		

		
			 
		

		

		
			(2) Please note that, if the Separation Date is after the date of this Agreement, the Agreement will need to be modified, as certain return dates will change.
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

			 

		

		

		
			4.             Release. In consideration of the Severance Benefits, which you acknowledge you would not otherwise be entitled to receive, you hereby fully, forever, irrevocably and unconditionally release, remise and discharge the Company, its affiliates, subsidiaries, parent companies, predecessors, and successors, and all of their respective past and present officers, directors, stockholders, partners, members, employees, agents, representatives, plan administrators, attorneys, insurers and fiduciaries (each in their individual and corporate capacities but in their individual capacities only for matters related to the Company and/or to your employment and/or separation from the Company) (collectively, the “Released Parties”) from any and all claims, charges, complaints, demands, actions, causes of action, suits, rights, debts, sums of money, costs, accounts, reckonings, covenants, contracts, agreements, promises, doings, omissions, damages, executions, obligations, liabilities, and expenses (including attorneys’ fees and costs), of every kind and nature that you ever had or now have against any or all of the Released Parties, including, but not limited to, any and all claims arising out of or relating to your periods of employment with and/or separations from the Company, including, but not limited to, all claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Americans With Disabilities Act of 1990, the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., 42 U.S.C. § 12101 et seq., the Genetic Information Nondiscrimination Act of 2008, 42 U.S.C. § 2000ff et seq., the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., the Worker Adjustment and Retraining Notification Act (“WARN”), 29 U.S.C. § 2101 et seq., the Rehabilitation Act of 1973, 29 U.S.C. § 701 et seq., Executive Order 11246, Executive Order 11141, the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., and the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., all as amended; all claims arising out of the Massachusetts Fair Employment Practices Act., M.G.L. c. 151B, § 1 et seq., the Massachusetts Wage Act, Mass. Gen. Laws ch. 149, § 148 et seq. (Massachusetts law regarding payment of wages and overtime), the Massachusetts Civil Rights Act, M.G.L. c. 12, §§ 11H and 11I, the Massachusetts Equal Rights Act, M.G.L. c. 93, § 102 et seq. and M.G.L. c. 214, § 1C, the Massachusetts Small Necessities Leave Act, M.G.L. c. 149, § 52D, the Massachusetts Equal Pay Law, M.G.L. c. 149, § 105A et seq., the Massachusetts Maternity Leave Act, M.G.L. c. 149, § 105D, and the
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

			 

		

		

		
			Massachusetts Privacy Act, M.G.L. c. 214, § 1B, all as amended; all claims arising out of the California Fair Employment and Housing Act, Cal. Gov’t. Code § 12900 et seq., the California Equal Pay Act, Cal. Lab. Code § 1197.5 et seq., the California Family Rights Act, Cal. Gov’t. Code § 12945.1 et seq. and § 19702.3, Cal. Lab. Code § 233 (California’s kin care law), Cal. Code Regs. tit. 2, §§ 7291.2—7291.16 (California’s pregnancy leave law), California Unruh Civil Rights Act, Cal. Civ. Code § 51 et seq., and Cal. Lab. Code §§ 98.6 and 1102.5 (California whistleblower protection laws), all as amended; all common law claims including, but not limited to, actions in defamation, intentional infliction of emotional distress, misrepresentation, fraud, wrongful discharge, and breach of contract; all federal and state whistleblower claims to the extent permitted by law; all claims to any non-vested ownership interest in the Company, contractual or otherwise, and any claim or damage arising out of your periods of employment with and/or separation from the Company (including a claim for retaliation) under any common law theory or any federal, state or local statute or ordinance not expressly referenced above; provided, however, that nothing in this Agreement prevents you from filing a charge with, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission or a state fair employment practices agency (except that you acknowledge that you may not recover any monetary benefits in connection with any such claim, charge or proceeding and you further waive any rights or claims to any payment, benefit, attorneys’ fees or other remedial relief in connection with any such claim, charge or proceeding); and further provided that this Agreement shall not release any rights you may have to indemnification, advancement of legal fees and directors and officers liability insurance coverage (recognizing, however, that such indemnification, advancement and/or coverage is not guaranteed by this Agreement and that this Agreement creates no rights for you to receive such indemnification, advancement or coverage) or any rights to vested equity or vested benefits.
		

		
			 
		

		
			5.             Post-Separation Obligations. You acknowledge and reaffirm your obligation to keep confidential and not to disclose any and all non-public information concerning the Company that you acquired
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

			 

		

		

		
			during the course of your periods of employment with the Company, including, but not limited to, any non-public information concerning the Company’s business affairs, business prospects, and financial condition. You further acknowledge and reaffirm your obligations under the Non-Competition, Non-Solicitation, Confidentiality and Assignment of Inventions Agreement you previously executed for the benefit of the Company, which remains in full force and effect.
		

		
			 
		

		
			6.             Non-Disparagement. You understand and agree that, in exchange for the consideration set forth in this Agreement, you shall not make any false, disparaging or derogatory statements to any person or entity, including, without limitation, any media outlet, industry group, financial institution or current or former employee, consultant, client or customer of the Company, regarding the Company or any of its directors, officers, employees, agents or representatives or about the Company’s business affairs or financial condition. Additionally, the Company will instruct its officers and directors not to make any false, disparaging or derogatory statement about you to any third party. Nothing herein shall be construed as preventing any of you, the Company, or the Company’s officers and directors from making truthful disclosures to any governmental entity or in any litigation or arbitration or rebutting false or misleading statements made by others.
		

		
			 
		

		
			7.             Cooperation. To the extent permitted by law, you agree to cooperate fully with the Company in the defense or prosecution of any claims or actions which already have been brought, are currently pending, or which may be brought in the future against or on behalf of the Company, whether before a state or federal court, any state or federal government agency, or a mediator or arbitrator related to your period of employment with the Company or to matters about which you gained knowledge during your period of employment with the Company (other than matters adverse to you). Your reasonable cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare its claims or defenses, to prepare for trial or discovery or an administrative hearing or a mediation or arbitration and to act as a witness when requested by the Company at reasonable times designated by the Company, which shall be set to reasonably recognize your
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

			 

		

		

		
			other commitments and limit your travel. You agree that you will, to the extent permitted by law, notify the Company promptly in the event that you are served with a subpoena or in the event that you are asked to provide a third party with information concerning any actual or potential complaint or claim against the Company, in each case with respect to matters related to your period of employment with the Company or matters about which you gained knowledge during your period of employment with the Company. The Company will promptly reimburse you for your reasonable out-of-pocket expenses in connection with cooperation requested by the Company pursuant hereto.
		

		
			 
		

		
			8.             Scope of Disclosure Restrictions — Nothing in this Agreement or elsewhere prohibits you from communicating with government agencies about possible violations of federal, state, or local laws or otherwise providing information to government agencies or participating in government agency investigations or proceedings. You are not required to notify the Company of any such communications; provided, however, that nothing herein authorizes the disclosure of information you obtained through a communication that was subject to the attorney-client privilege. Further, notwithstanding your confidentiality and nondisclosure obligations, you are hereby advised as follows pursuant to the Defend Trade Secrets Act: “An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.”
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

			 

		

		

		
			9.             Return of Company Property. You represent and confirm that you have returned to the Company all Company-owned property in your possession, custody or control, including, without limitation, all keys, files, documents and records (and copies thereof), equipment (including, but not limited to, computer hardware, software and printers, wireless handheld devices, cellular phones, pagers, etc.), Company identification and Company vehicles, and that you have left intact all electronic Company documents, including, without limitation, those that you developed or helped to develop during your employment. You further confirm that you have cancelled all accounts for your benefit, if any, in the Company’s name, including, without limitation, credit cards, telephone charge cards, cellular phone and/or pager accounts, and computer accounts. The Company confirms that you may retain your address book to the extent it only contains contact information and the Company shall cooperate with you to transfer your cell phone number to you.
		

		
			 
		

		
			10.           Business Expenses and Final Compensation. You acknowledge that you have submitted to the Company documentation for all business expenses incurred in conjunction with the performance of your employment and that no other reimbursements are owed to you. You further acknowledge that you have received payment in full for all services rendered in conjunction with your periods of employment by the Company, including, without limitation, payment for all wages, bonuses, equity, commissions, and accrued, unused vacation time, and that no other compensation is owed to you except as provided herein.
		

		
			 
		

		
			11.           Amendment and Waiver. This Agreement shall be binding upon the parties and may not be modified in any manner, except by an instrument in writing of concurrent or subsequent date signed by duly authorized representatives of the parties hereto. This Agreement is binding upon and shall inure to the benefit of the parties and their respective agents, assigns, heirs, executors, successors and administrators. No delay or omission by the Company in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Company on any one occasion shall be effective only in that instance and shall not be construed as a bar to or waiver of any right on any other occasion.
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

			 

		

		

		
			12.           Validity. Should any provision of this Agreement be declared or be determined by any court of competent jurisdiction to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby and said illegal or invalid part, term or provision shall be deemed not to be a part of this Agreement.
		

		
			 
		

		
			13.           Confidentiality. To the extent permitted by law, you understand and agree that as a condition of the Severance Benefits herein described, the terms and contents of this Agreement, and the contents of the negotiations and discussions resulting in this Agreement, shall be maintained as confidential by you and your agents and representatives and shall not be disclosed except to the extent required by federal or state law or as otherwise agreed to in writing by the Company, provided, however, that nothing herein shall prevent you from making truthful disclosures to any governmental entity or in any litigation or arbitration.
		

		
			 
		

		
			14.           Tax Provision. In connection with the Severance Benefits to be provided to you pursuant to this Agreement, the Company shall withhold and remit to the tax authorities the amounts required under applicable law, and you shall be responsible for all applicable taxes with respect to such Severance Benefits under applicable law. You acknowledge that you are not relying upon advice or representation of the Company with respect to the tax treatment of any of the Severance Benefits.
		

		
			 
		

		
			15.           Nature of Agreement. You understand and agree that this Agreement is a severance agreement and does not constitute an admission of liability or wrongdoing on the part of the Company.
		

		
			 
		

		
			16.           Acknowledgments. You acknowledge that you have been given at least twenty-one (21) days to consider this Agreement, and that the Company is hereby advising you to consult with an attorney of your own choosing prior to signing this Agreement. You understand that you may revoke this Agreement for a period of seven (7) days after you sign this Agreement by notifying me in writing, and the Agreement shall not be effective or enforceable until the expiration of this seven (7) day revocation period. You understand and agree that by
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

			 

		

		

		
			entering into this Agreement, you are waiving any and all rights or claims you might have under the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act, and that you have received consideration beyond that to which you were previously entitled.
		

		
			 
		

		
			17.           Voluntary Assent. You affirm that no other promises or agreements of any kind have been made to or with you by any person or entity whatsoever to cause you to sign this Agreement, and that you fully understand the meaning and intent of this Agreement. You state and represent that you have had an opportunity to fully discuss and review the terms of this Agreement with an attorney. You further state and represent that you have carefully read this Agreement, understand the contents herein, freely and voluntarily assent to all of the terms and conditions hereof, and sign your name of your own free act.
		

		
			 
		

		
			18.           Arbitration and Equitable Relief. Should a dispute arise in connection with, relating to, or concerning this Agreement, the parties obligations thereunder, your employment with or your separation from employment with the Company, the parties will first submit the dispute to non-binding mediation. The Company will pay for the mediation and select the mediator. Should the dispute remain unresolved after one day of mediation, the Company and you agree that said dispute or controversy arising out of, in relation to, or in connection with this Agreement or your employment with the Company, or the making, interpretation, construction, performance or breach of this Agreement shall be finally settled by binding arbitration in Massachusetts under the then current expedited rules of the American Arbitration Association by one (1) arbitrator mutually selected by the parties or in the event the parties cannot mutually agree, then appointed in accordance with such rules. The arbitrator may grant injunctive or other relief in such dispute or controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration. Judgment may be entered on the arbitrator’s decision in any court of competent jurisdiction. The parties agree that, any provision of applicable law notwithstanding, they will not request and the arbitrator shall have no authority to award, punitive or exemplary damages against any party. Notwithstanding anything in this Section 18 to the
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

			 

		

		

		
			contrary, claims may be made in any Massachusetts court of competent jurisdiction by you or the Company for equitable relief to prevent a breach or threatened breach of any provision of this Agreement. Both you and the Company expressly waive any right that any party either has or may have to a jury trial of any dispute arising out of or in any way related to your employment with or termination from the Company.
		

		
			 
		

		
			19.           Applicable Law. This Agreement will be governed by, and construed and enforced in accordance with, the laws of the Commonwealth of Massachusetts applicable to contracts made and to be performed therein, without giving effect to the principles thereof relating to the conflict of laws.
		

		
			 
		

		
			20.           Entire Agreement. This Agreement contains and constitutes the entire understanding and agreement between the parties hereto with respect to your Severance Benefits and the settlement of claims against the Company and cancels all previous oral and written negotiations, agreements, and commitments in connection therewith. Nothing in this Section 20, however, shall modify, cancel or supersede your obligations set forth in Section 5 above.
		

		
			 
		

		
			[Signature page follows.]
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			 

		

 

		

			 

		

		

		
			 
		

		
			If you have any questions about the matters covered in this Agreement, please call [INSERT NAME AND TELEPHONE NUMBER].
		

		
			 
		

			
					
						 

					
					
						Very truly yours,

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						Kala Pharmaceuticals, Inc.

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						 

					
					
						[INSERT NAME]

				
	
					
						 

					
					
						 

					
					
						[INSERT TITLE]

				

		
			 
		

		
			I hereby agree to the terms and conditions set forth above. I have been given at least twenty-one (21) days to consider this Agreement, and I have chosen to execute this on the date below. I intend that this Agreement will become a binding agreement between me and the Company if I do not revoke my acceptance in seven (7) days.
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						[INSERT EMPLOYEE NAME]

					
					
						 

					
					
						Date

				

		
			 
		

		
			To be returned in a timely manner as set forth on the first page of this Agreement.
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

			 

		

		

		
			Exhibit C
		

		
			 
		

		
			Form of Non-Competition, Non-Solicitation, Confidentiality and Assignment of Inventions Agreement
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

			 

		

		

		
			NON-COMPETITION, NON-SOLICITATION, CONFIDENTIALITY AND
ASSIGNMENT OF INVENTIONS AGREEMENT
		

		
			 
		

		

		
			 
		

		
			KALA PHARMACEUTICALS, INC.
		

		
			 
		

		
			November 21, 2017
		

		
			 
		

		
			Todd Bazemore
		

		
			 
		

		
			Dear Todd: This letter is to confirm our understanding with respect to (i) your agreement not to compete with Kala Pharmaceuticals, Inc. or any present or future parent, subsidiary or affiliate thereof (collectively, the “Company”), (ii) your agreement not to solicit certain employees, consultants, customers and business partners of the Company, (iii) your agreement to protect and preserve information and property which is confidential and proprietary to the Company and (iv) your agreement with respect to the ownership of inventions, ideas, copyrights, patents, trademarks or other intellectual property which may be used in the business of the Company (the terms and conditions agreed to in this letter are hereinafter referred to as the “Agreement”).
		

		
			 
		

		
			In consideration of and as a condition of the compensation and other benefits of my employment by the Company, and for other good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, we have agreed as follows:
		

		
			 
		

		
			1.             Prohibited Competition.
		

		
			 
		

		
			(a)           Certain Acknowledgements and Agreements.
		

		
			 
		

		
			(i)            We have discussed, and you recognize and acknowledge, the competitive and proprietary aspects of the business of the Company.
		

		
			 
		

		
			(ii)           You further recognize and acknowledge the competitive and proprietary nature of the Company’s business operations. You acknowledge and agree that a business will be deemed competitive with the Company if it engages in a line of business in which it performs or plans to perform any of the services, or researches, produces, develops, manufactures, licenses, distributes or sells any products or services, provided or offered by the Company, or if it performs any other services and/or engages in the production, research, development, manufacture, license, distribution or sale of any service or product similar to the Company’s services or products, which services or products were performed, produced, researched, developed, manufactured, licensed, distributed, sold or provided, or planned to be performed, produced, researched, developed,
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

			 

		

		

		
			manufactured, licensed, distributed, sold or provided, by the Company during your employment by the Company, or which services or products were designed to perform the same function or achieve the same results as any of the foregoing, whether or not similar, in the Company’s Field of Interest.
		

		
			 
		

		
			(iii)          You understand and acknowledge that the term “Company’s Field of Interest” means the actual or planned research, production, development, manufacture, licensing, distribution, sale or use of microparticle and nanoparticle technologies for delivering pharmaceutical agents, including, without limitation, microparticles and nanoparticles for use in delivering therapeutic or prophylactic agents to or through mucus, mucin, or mucosal barriers or tissues in humans. You acknowledge and agree that the actual or planned business of the Company may change over the course of your employment and that, notwithstanding the foregoing, the term “Company’s Field of Interest” shall include any and all services, products or technologies performed, produced, researched, developed, manufactured, licensed, distributed, sold or provided, or planned to be performed, produced, researched, developed, manufactured, licensed, distributed, sold or provided, by the Company at any time during your employment.
		

		
			 
		

		
			(iv)          You further acknowledge that, during the course of your performing services for the Company, the Company will furnish, disclose or make available to you Confidential Information (as defined below) related to the Company’s business and that the Company may provide you with unique and specialized training. You also acknowledge that such Confidential Information and such training have been developed and will be developed by the Company through the expenditure by the Company of substantial time, effort and money and that all such Confidential Information and training could be used by you to compete with the Company. You also acknowledge that if you become employed or affiliated with any competitor of the Company in violation of your obligations in this Agreement, it is inevitable that you would disclose the Confidential Information to such competitor and would use such Confidential Information, knowingly or unknowingly, on behalf of such competitor. Further, in the course of your employment, you will be introduced to customers and others with important relationships to the Company. You acknowledge that any and all “goodwill” created through such introductions belongs exclusively to the Company, including, without limitation, any goodwill created as a result of direct or indirect contacts or relationships between you and any customers of the Company.
		

		
			 
		

		
			(v)           For purposes of this Agreement, “Confidential Information” means confidential, secret and proprietary information and know-how of the Company, whether in written, oral, electronic or other form, including but not limited to, information and facts concerning business plans, customers, future customers, suppliers, licensors, licensees, partners, investors, affiliates or others, training methods and materials, financial information, sales prospects, client lists, inventions, or any other scientific, technical or trade secrets of the Company or of any third party provided to you or the Company under a condition of confidentiality, provided that Confidential Information will not include
		

		
			
		

		
			

		 

		

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			information that is in the public domain other than through any fault or act by you. The term “trade secrets,” as used in this Agreement, will be given its broadest possible interpretation under the law of the Commonwealth of Massachusetts and will include, without limitation, anything tangible or intangible or electronically kept or stored, which constitutes, represents, evidences or records, any secret scientific, technical, merchandising, production or management information, or any design, process, procedure, formula, invention, improvement or other confidential or proprietary information or documents.
		

		
			 
		

		
			(b)           Non-Competition. During the period in which you perform services for or at the request of the Company and for a period of one (1) year following the termination of your performance of services for or at the request of the Company for any reason or for no reason you will not, without the prior written consent of the Company:
		

		
			 
		

		
			(i)            For yourself or on behalf of any other, directly or indirectly, either as principal, agent, stockholder, employee, consultant, representative, owner, officer, director, investor, lender or in any other capacity, own, manage, operate or control , or be concerned, connected or employed by, or otherwise associate in any manner with, engage in or have a financial interest in, any business or enterprise in the Company’s Field of Interest anywhere in the world, except that nothing contained herein shall preclude you from purchasing stock in any such business or enterprise if such stock is publicly traded, and provided that your holdings do not exceed one percent (1%) percent of the issued and outstanding capital stock of such business or enterprise; or
		

		
			 
		

		
			(ii)           Either individually or on behalf of or through any third party, directly or indirectly, solicit, divert or appropriate or attempt to solicit, divert or appropriate any actual or prospective clients, customers, accounts or business partners of the Company which were contacted, solicited or served by the Company during your employment with the Company; or
		

		
			 
		

		
			(iii)          Either individually or on behalf of or through any third party, directly or indirectly, interfere with, or attempt to interfere with, the relations between the Company and any vendor or supplier to the Company.
		

		
			 
		

		
			(c)           Non-Solicitation. During the period in which you perform services for or at the request of the Company and for a period of eighteen (18) months following the termination of your performance of services for or at the request of the Company for any reason or for no reason you will not, without the prior written consent of the Company:
		

		
			 
		

		
			(i)            Either individually or on behalf of or through any third party, directly or indirectly, (A) solicit, entice or persuade or attempt to solicit, entice or persuade any other employees of or consultants to the Company to leave the services of the Company for any reason, or (B) employ or engage, cause to be employed or engaged, or solicit the employment or engagement of any employee of or consultant to the Company while any such person is providing services to the
		

		
			
		

		
			

		 

		

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			Company or within six months after any such person ceases providing services to the Company; or
		

		
			 
		

		
			(ii)           Either individually or on behalf of or through any third party, directly or indirectly, interfere with, or attempt to interfere with, the relations between any other employees of or consultants to the Company and the Company.
		

		
			 
		

		
			(d)           Reasonableness of Restrictions. You further recognize and acknowledge that (i) the types of employment which are prohibited by this Section 1 are narrow and reasonable in relation to the skills which represent your principal salable asset both to the Company and to your other prospective employers and (ii) the specific but broad geographical scope of the provisions of this Section 1 is reasonable, legitimate and fair to you in light of the Company’s need to market its services and sell its products in a large geographic area in order to have a sufficient customer base to make the Company’s business profitable and in light of the limited restrictions on the type of employment prohibited herein compared to the types of employment for which you are qualified to earn your livelihood.
		

		
			 
		

		
			(e)           Survival of Acknowledgements and Agreements; Extension. Your acknowledgements and agreements set forth in this Section 1 will survive the termination of your provision of services to the Company for any reason or for no reason. If you violate any of the provisions set forth in this Section 1, you shall continue to be bound by the restrictions set forth in this Section 1 until a period of one (1) year has expired, in the case of a violation of Section 1(b), or a period of eighteen (18) months, in the case of a violation of Section 1(c), has expired without any violation of such provisions.
		

		
			 
		

		
			2.             Protected Information. You will at all times, both during the period while you are performing services for the Company and after the termination of your provision of services to the Company for any reason or for no reason, and except as permitted by Section 5 below, maintain in confidence, and without the prior written consent of the Company, you will not use, except in the course of performance of your duties for the Company or by court order, disclose or give to others, any Confidential Information. In the event you are questioned by anyone not employed by the Company or by an employee of or a consultant to the Company not authorized to receive Confidential Information, in regard to any Confidential Information, or concerning any fact or circumstance relating thereto, you will promptly notify the Company, except as permitted by Section 5 below. Upon the termination of your provision of services to the Company for any reason or for no reason, or if the Company otherwise requests, (i) you will return to the Company all tangible Confidential Information and copies thereof (regardless how such Confidential Information or copies are maintained) and (ii) you will deliver to the Company any property of the Company which may be in your possession, including products, materials, memoranda, notes, records, reports, or other documents or photocopies of the same. The terms of this Section 2 are in addition to, and not in lieu of, any statutory or other contractual obligation that you may have relating to the protection of the Company’s Confidential Information. The terms of this Section 2 will survive indefinitely any termination of your provision of services to the Company for any reason or for no reason.
		

		
			
		

		
			

		 

		

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			3.             Ownership of Ideas, Copyrights and Patents.
		

		
			 
		

		
			(a)           Property of the Company. All ideas, discoveries, creations, manuscripts and properties, innovations, improvements, enhancements, processes, know-how, inventions, designs, developments, apparatus, techniques, methods, laboratory notebooks, software, works of authorship and formulae which may be used in the business of the Company, whether patentable, copyrightable or not, which you may conceive, reduce to practice or develop during the period while you are performing services for the Company and for one (1) year thereafter, alone or in conjunction with another or others, whether during or out of regular business hours, whether or not on the Company’s premises or with the use of its equipment, and whether at the request or upon the suggestion of the Company or otherwise (all of which are collectively referred to herein as “Inventions”), will be the sole and exclusive property of the Company. You agree not to publish any of the Inventions without the prior written consent of the Company or its designee. Without limiting the foregoing, you also acknowledge that all original works of authorship which are made by you (solely or jointly with others) within the scope of your employment or which relate to the business of the Company or a Company affiliate and which are protectable by copyright are “works made for hire” pursuant to the United States Copyright Act (17 U.S.C. Section 101). You hereby assign to the Company or its designee all of your right, title and interest in and to all Inventions and all related patents, patent applications, copyrights and copyright applications. You further represent that, to the best of your knowledge and belief, none of the Inventions will violate or infringe upon any right, patent, copyright, trademark or right of privacy, or constitute libel or slander against or violate any other rights, of any person, firm or corporation, and that you will use your best efforts to prevent any such violation.
		

		
			 
		

		
			(b)           Cooperation. At any time during or after the period during which you are performing services for the Company, you will fully cooperate with the Company and its attorneys and agents in the preparation and filing of all papers and other documents as may be required to protect the Company’s rights and interests in and to any of such Inventions, such papers and documents to include, without limitation, any copyright applications, patent applications, trademark applications, declarations, oaths, formal assignments, assignments of priority rights, and powers of attorney with respect to any such Inventions, and such full cooperation to include, without limitation, joining in any proceeding to obtain letters patent, copyrights, trademarks or other legal rights, in each case, in the United States and in any and all other countries, provided that the Company will bear the expense of such preparations and filings, and that any copyright, patent or other legal or intellectual property rights so issued to you personally will be assigned by you to the Company or its designee without charge by you. You further agree that if the Company is unable, after reasonable effort, to secure your signature on any such papers or documents, any executive officer of the Company shall be entitled to execute any such papers or documents as your agent and attorney-in-fact, and you hereby irrevocably designate and appoint each executive officer of the Company as your agent and attorney-in-fact to execute any such papers or documents on your behalf, and to take any and all actions as the Company may deem necessary or desirable in order to protect its rights and interests in any Inventions, under the conditions described in this sentence.
		

		
			
		

		
			

		 

		

			5

		

		

			 

		

 

		

			 

		

		

		
			(c)           Licensing and Use of Innovations. With respect to any ideas, discoveries, creations, manuscripts and properties, innovations, improvements, enhancements, processes, know-how, inventions, designs, developments, apparatus, techniques, methods, laboratory notebooks, software, works of authorship and formulae, and works of any similar nature (from any source), which you conceived, reduced to practice or developed prior to performing services for the Company, but which you provide to the Company or incorporate in any Company product or system (all of which are collectively referred to herein as “Innovations”), you hereby grant to the Company a royalty-free, fully paid-up, non-exclusive, perpetual and irrevocable license throughout the world to use, modify, create derivative works from, disclose, publish, translate, reproduce, deliver, perform, dispose of, and to authorize others so to do, all such Innovations. You will not include in any Innovations you deliver to the Company or use on its behalf, without the prior written approval of the Company, any material which is or will be patented, copyrighted or trademarked by you or others unless you provide the Company with the written permission of the holder of any patent, copyright or trademark owner for the Company to use such material in a manner consistent with then-current Company policy.
		

		
			 
		

		
			(d)           Prior Inventions. Listed on Exhibit 3(d) to this Agreement are any and all Innovations in which you claim or intend to claim any right, title and interest, including, without limitation, patent, copyright or trademark interests which, to the best of your knowledge, will be or may be delivered to the Company in the course of your employment or incorporated into any Company product or system. You acknowledge that your obligation to disclose such information is ongoing during the period that you provide services to the Company.
		

		
			 
		

		
			4.             Disclosure to Future Employers. You agree that you will provide, and that the Company, in its discretion, may similarly provide, a copy of the covenants contained in Sections 1, 2 and 3 of this Agreement to any business or enterprise which you may directly or indirectly own, manage, operate, finance, join, control or in which you may participate in the ownership, management, operation, financing, or control, or with which you may be connected as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise.
		

		
			 
		

		
			5.             Scope of Disclosure Restrictions. Nothing in this Agreement prohibits the Employee from communicating with government agencies about possible violations of federal, state, or local laws or otherwise providing information to government agencies, filing a complaint with government agencies, or participating in government agency investigations or proceedings. The Employee is not required to notify the Company of any such communications; provided, however, that nothing herein authorizes the disclosure of information the Employee obtained through a communication that was subject to the attorney-client privilege. Further, notwithstanding the Employee’s confidentiality and nondisclosure obligations, the Employee is hereby advised as follows pursuant to the Defend Trade Secrets Act: “An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of repotting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade
		

		
			
		

		
			

		 

		

			6

		

		

			 

		

 

		

			 

		

		

		
			secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.”
		

		
			 
		

		
			6.             No Conflicting Agreements. You hereby represent and warrant that you have no commitments or obligations inconsistent with this Agreement and you will indemnify and hold the Company harmless against any and all losses, damages, liabilities or expenses arising from any claim based upon circumstances alleged to be inconsistent with such representation and warranty.
		

		
			 
		

		
			7.             Name &  Likeness Rights. You hereby authorize the Company to use, reuse, and to grant others the right to use and reuse, your name, photograph, likeness (including caricature), voice, and biographical information, and any reproduction or simulation thereof, in any form of media or technology now known or hereafter developed (including, but not limited to, film, video and digital or other electronic media), both during and after your employment, for whatever purposes the Company deems necessary.
		

		
			 
		

		
			8.             General.
		

		
			 
		

		
			(a)           Notices. All notices, requests, consents and other communications hereunder will be in writing, will be addressed to the receiving party’s address set forth above or to such other address as a party may designate by notice hereunder, and will be either (i) delivered by hand, (ii) sent by overnight courier, or (iii) sent by registered mail, return receipt requested, postage prepaid. All notices, requests, consents and other communications hereunder will be deemed to have been given either (i) if by hand, at the time of the delivery thereof to the receiving party at the address of such party set forth above, (ii) if sent by overnight courier, on the next business day following the day such notice is delivered to the courier service, or (iii) if sent by registered mail, on the fifth business day following the day such mailing is made.
		

		
			 
		

		
			(b)           Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof. No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement will affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement.
		

		
			 
		

		
			(c)           Modifications and Amendments. The terms and provisions of this Agreement may be modified or amended only by written agreement executed by the parties hereto.
		

		
			 
		

		
			(d)           Waivers and Consents. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent will be deemed to be or will constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each such waiver or consent will be effective only in the specific instance and for the purpose for which it was given, and will not constitute a continuing waiver or consent.
		

		
			
		

		
			

		 

		

			7

		

		

			 

		

 

		

			 

		

		

		
			(e)           Assignment. The Company may assign its rights and obligations hereunder to any person or entity that succeeds to all or substantially all of the Company’s business or assets or any corporation with which, or into which, the Company may be merged. You may not assign your rights and obligations under this Agreement without the prior written consent of the Company, and any such attempted assignment by you without the prior written consent of the Company will be void.
		

		
			 
		

		
			(f)            Benefit. All statements, representations, warranties, covenants and agreements in this Agreement will be binding on the parties hereto and will inure to the benefit of the respective successors and permitted assigns of each party hereto. Nothing in this Agreement will be construed to create any rights or obligations except between the Company and you, and no person or entity other than the Company will be regarded as a third-party beneficiary of this Agreement.
		

		
			 
		

		
			(g)           Governing Law. This Agreement and the rights and obligations of the parties hereunder will be construed in accordance with and governed by the laws of the Commonwealth of Massachusetts, without giving effect to the conflict of law principles thereof.
		

		
			 
		

		
			(h)           Jurisdiction, Venue and Service of Process. Any legal action or proceeding with respect to this Agreement will be brought in the courts of the Commonwealth of Massachusetts or of the United States of America for the District of Massachusetts. By execution and delivery of this Agreement, each of the parties hereto accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of the aforesaid courts.
		

		
			 
		

		
			(i)            WAIVER OF JURY TRIAL. ANY ACTION, DEMAND, CLAIM OR COUNTERCLAIM ARISING UNDER OR RELATING TO THIS AGREEMENT WILL BE RESOLVED BY A JUDGE ALONE AND EACH OF THE COMPANY AND YOU WAIVE ANY RIGHT TO A JURY TRIAL THEREOF.
		

		
			 
		

		
			(j)            Severability. The parties intend this Agreement to be enforced as written. However, (i) if any portion or provision of this Agreement is to any extent declared illegal or unenforceable by a duly authorized court having jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, will not be affected thereby, and each portion and provision of this Agreement will be valid and enforceable to the fullest extent permitted by law and (ii) if any provision, or part thereof, is held to be unenforceable because of the duration of such provision or the geographic area covered thereby, the court making such determination will have the power to reduce the duration and/or geographic area of such provision, and/or to delete specific words and phrases (“blue-penciling”), and in its reduced or blue-penciled form such provision will then be enforceable and will be enforced.
		

		
			 
		

		
			(k)           Headings and Captions. The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and will in no way modify or affect the meaning or construction of any of the terms or provisions hereof.
		

		
			 
		

		
			 
		

		
			

		 

		

			8

		

		

			 

		

 

		

			 

		

		

		
			 
		

		
			(l)            Injunctive Relief. You hereby expressly acknowledge that any breach or threatened breach of any of the terms and/or conditions set forth in Section 1, 2 or 3 of this Agreement will result in substantial, continuing and irreparable injury to the Company. Therefore, in addition to any other remedy that may be available to the Company, the Company will be entitled to injunctive or other equitable relief by a court of appropriate jurisdiction in the event of any breach or threatened breach of the terms of Section 1, 2 or 3 of this Agreement.
		

		
			 
		

		
			(m)          No Waiver of Rights, Powers and Remedies. No failure or delay by a party hereto in exercising any right, power or remedy under this Agreement, and no course of dealing between the parties hereto, will operate as a waiver of any such right, power or remedy of the party. No single or partial exercise of any right, power or remedy under this Agreement by a party hereto, nor any abandonment or discontinuance of steps to enforce any such right, power or remedy, will preclude such party from any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The election of any remedy by a party hereto will not constitute a waiver of the right of such party to pursue other available remedies. No notice to or demand on a party not expressly required under this Agreement will entitle the party receiving such notice or demand to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action in any circumstances without such notice or demand.
		

		
			 
		

		
			(n)           Not Employment Contract. You acknowledge that this Agreement does not constitute a contract of employment, does not imply that the Company will continue your employment for any period of time and does not change the at-will nature of your employment.
		

		
			 
		

		
			(o)           Counterparts. This Agreement may be executed in two or more counterparts, and by different parties hereto on separate counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
		

		
			 
		

		
			(p)           Opportunity to Review. You hereby acknowledge that you have had adequate opportunity to review these terms and conditions and to reflect upon and consider the terms and conditions of this Agreement, and that you have had the opportunity to consult with counsel of your own choosing regarding such terms. You further acknowledge that you fully understand the terms of this Agreement and have voluntarily executed this Agreement.
		

		
			 
		

		
			[Remainder of page intentionally left blank.]
		

		
			 
		

		
			 
		

		
			

		 

		

			9

		

 

		

			 

		

		

		
			If the foregoing accurately sets forth our agreement, please so indicate by signing and returning to us the enclosed copy of this letter.
		

		
			 
		

			
					
						 

					
					
						Very truly yours,

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						KALA PHARMACEUTICALS, INC.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Mary Reumuth

				
	
					
						 

					
					
						Name:

					
					
						Mary Reumuth

				
	
					
						 

					
					
						Title:

					
					
						CFO

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Accepted and Approved:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						/s/ Todd Bazemore

					
					
						 

					
					
						11/21/2017

				
	
					
						Name: Todd Bazemore

					
					
						 

					
					
						Date

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				

		
			 
		

		
			[NON-COMPETITION, NON-SOLICITATION, CONFIDENTIALITY AND
ASSIGNMENT OF INVENTIONS AGREEMENT]
		

		
			 
		

		
			
		

		
			

		 

		

			 

		

 

		

			 

		

		

		
			EXHIBIT 3(d)
		

		
			 
		

		
			PRIOR INVENTIONS
		

		
			 
		

		
			[None.]KALA_Ex10_18

		

			Exhibit 10.18

		

		

			 

		

		

			

		

		
			Confidential Materials omitted and filed separately with the
		

		
			Securities and Exchange Commission. Double asterisks denote omissions.
		

		
			 
		

		
			AMENDED AND RESTATED MASTER SERVICES AGREEMENT
		

		
			 
		

		
			THIS AMENDED AND RESTATED MASTER SERVICES AGREEMENT (hereinafter referred to as “Agreement”) is entered into as of October 4, 2017 (the “Effective Date”), by and between Alliance Contract Pharma, LLC, a Pennsylvania corporation, having its offices at 1510 Delp Drive, Harleysville, PA 19438, (hereinafter referred to as “SUPPLIER”) and Kala Pharmaceuticals, Inc., a Delaware corporation having its offices at 100 Beaver Street, Suite 201, Waltham, MA 02453 (hereinafter referred to as “SPONSOR”).  SPONSOR and SUPPLIER may be individually referred to herein as a “Party” or may be collectively referred to herein as the “Parties.” This Agreement amends and restates, in its entirety, the Master Services Agreement entered into by the parties as of January 28, 2015 and the Amended and Restated Master Service Agreement entered into by the parties as of January 27, 2017 as of the Effective Date.
		

		
			 
		

		
			RECITALS
		

		
			 
		

		
			WHEREAS, SPONSOR desires to appoint SUPPLIER to perform Services (as hereinafter defined) on a non-exclusive basis as more particularly described below, and SUPPLIER desires to perform said Services in accordance with the terms and conditions contained in this Agreement and all referenced documents.
		

		
			 
		

		
			WHEREAS, SUPPLIER and SPONSOR are each duly authorized to execute and deliver this Agreement, and all necessary corporate action and all consents, approvals and other authorizations and all other acts and things necessary to make this Agreement a valid, binding and legal instrument have been done and performed by SUPPLIER and SPONSOR respectively.
		

		
			 
		

		
			NOW, THEREFORE, in consideration of the mutual agreements herein contained, the Parties hereto, intending to be legally bound, hereby agree as follows:
		

		
			 
		

		
			ARTICLE 1 – DEFINITIONS
		

		
			 
		

		
			“Batch” shall mean a defined quantity of Product that has been or is being manufactured in accordance with the Specifications.
		

		
			 
		

		
			“Certificate of Analysis” (abbreviated “COA”) shall mean a document prepared by SUPPLIER containing at a minimum the product name, Lot  number, test parameters, test specifications, test method, and test results for each Lot of Product supplied to SPONSOR.  Each COA shall be signature approved by SUPPLIER.
		

		
			 
		

		
			“Current Good Manufacturing Practices” (abbreviated “GMPs” or “cGMPs”) shall mean the standards established by the United States Food and Drug Administration (the “FDA”) for current Good Manufacturing Practices, as specified in FDA 21 C.F.R. §820 Quality Systems Regulations (or its successor provisions); the standards established in the European Council Directive 2004/27/EC of 31 March 2004 concerning medicinal products for human use, as amended (or its successor provisions); and other sections so designated by the title “Good Manufacturing Practices”;  as applicable to each respective Product to be manufactured and/or supplied by SUPPLIER.
		

		
			 
		

		
			“Equipment” shall mean any equipment, tools, tanks, instruments, patterns, molds, dies, tools, fixtures, and other items to be used by SUPPLIER in connection with this Agreement and which are paid for by SPONSOR or otherwise provided by SPONSOR.
		

		
			 
		

		
			“Facilities” shall mean SUPPLIER’s manufacturing facilities at 1510 Delp Drive, Harleysville, PA 19438.
		

		
			 
		

		
			“Lead Time” shall mean the time period that begins on the day SUPPLIER receives a Purchase Order  for Product from SPONSOR and ends on the day SUPPLIER is required to deliver the Product to SPONSOR.
		

		
			 
		

		
			
		

		
			

		 

		

			Page 1 of 25

		

 

		

			

		

		

		
			“Lot” shall mean a defined quantity of starting material, packaging material or product processed in one process or series of processes so that it could be expected to be homogeneous.
		

		
			 
		

		
			“Product” shall mean the product(s) to be manufactured and supplied by SUPPLIER to SPONSOR under Purchase Order(s) issued under this Agreement and as more specifically detailed in a Project Proposal/SOW attached hereto.
		

		
			 
		

		
			“Purchase Order” shall mean a purchase order issued by SPONSOR to SUPPLIER for the purchase of Product under this Agreement.
		

		
			 
		

		
			“Specifications” shall mean the Product specifications set forth or referenced in the applicable Proposal/SOW.  The Specifications shall also include all necessary test protocols, packaging and labeling specifications, bills of material and other documentation required to describe, control, and assure the quality of the manufacture of the Product, regardless of whether the foregoing is included as a part of applicable Proposal/SOW.
		

		
			 
		

		
			“SPONSOR Materials” shall mean any materials to be supplied by SPONSOR to SUPPLIER in order to manufacture Product.
		

		
			 
		

		
			ARTICLE 2 – SERVICES
		

		
			 
		

		
			A.   Scope of Services:  SUPPLIER shall provide to SPONSOR manufacturing services relating to various cGMP manufacturing, packaging operations, equipment qualification and/or analytical support services as described in one or more Project Proposal/SOW(s) (defined below) (the “Services”).  Each Project Proposal/SOW shall be substantially in the form of the initial Project Proposal/SOW attached hereto as Exhibit A.  It is anticipated that SUPPLIER will conduct more than one project (“Project”) in connection with the Services.  Additional Project Proposals/SOWs will be added to this Agreement as separate exhibits, which shall be incorporated herein by reference, to capture additional activities not captured in the original Project Proposal/SOW.
		

		
			 
		

		
			B.   Project Proposal/SOWs:  Prior to commencing a Project, SUPPLIER shall submit to SPONSOR an individual proposal/statement of work (“Project Proposal/SOW”).  The Project Proposal/SOW shall provide the following information: (i) a description of the Project, (ii) the budget and payment schedule, (iii) the timing or schedule for the Project, and (iv) any other relevant information. Such Project Proposal/SOW must be executed by both SPONSOR and SUPPLIER prior to commencement of any work.  Only a duly signed Project Proposal/SOW can commit SPONSOR to make the payments herein for any Services performed by SUPPLIER.  Work performed without SUPPLIER receiving the aforementioned duly executed documents shall be at its own risk, cost, and expense.
		

		
			 
		

		
			C.   Standard of Performance:  The Services shall be performed to the reasonable satisfaction of SPONSOR and shall be performed in accordance with generally accepted professional standards and the Specifications set forth herein and in the applicable Project Proposal/SOW. SUPPLIER shall ensure that, as applicable, the individuals/team assigned to work on the Services understand SPONSOR’s business; the industry and market within which SPONSOR operates; and basic industry laws, regulations and guidance, including relevant regulations and/or guidance issued by the U.S. Food and Drug Administration (“FDA”), guidance issued by the U.S. Department of Health and Human Services Office of the Inspector General and the PhRMA code. SPONSOR and SUPPLIER shall comply with all applicable cGMPs and all other applicable Federal, state, local laws, standards, requirements, and regulations (and their foreign counterparts) in connection with the performance of the Services. In no event may SUPPLIER change, alter, or otherwise deviate from the Specification set forth in this Agreement unless mutually agreed by the parties in writing.
		

		
			 
		

		
			D.   Agreement/Project Proposal/SOW Conflicts:  In the event that the terms of any Project Proposal/SOW or any other document conflict with the terms of this Agreement, the terms of this Agreement shall take precedence, unless the applicable Project Proposal/SOW expressly refers to the Parties’ intent to alter the terms of this Agreement with respect to such Project Proposal/SOW in which case those specific terms of the applicable Project Proposal/SOW shall take precedence.
		

		
			 
		

		
			
		

		
			

		 

		

			Page 2 of 25

		

 

		

			

		

		

		
			Subject to the foregoing, SUPPLIER shall not proceed with Services that reasonably conflict with the terms of this Agreement and shall promptly notify SPONSOR in writing of any such conflict.
		

		
			 
		

		
			E.    Reviews:  Periodic reviews of SUPPLIER’s performance may be conducted by SPONSOR at SPONSOR’s sole cost and expense provided that SPONSOR provides SUPPLIER with at least [**] business days’ notice prior to such review. SUPPLIER shall reasonably assist in such reviews and shall ensure SPONSOR has adequate access to the Facility in order to conduct such reviews. If any such review reveals any deficiency in SUPPLIER’s performance, SUPPLIER shall promptly correct such deficiencies and notify SPONSOR in writing that such deficiencies have been corrected.
		

		
			 
		

		
			F.    Right to Request Modifications:  SPONSOR may request, during progress of any work hereunder, additions or modifications to any Project Proposal/SOW.  Upon such request by SPONSOR, SUPPLIER shall provide SPONSOR with a revised Project Proposal/SOW setting forth such changes including any changes to costs and/or fees; provided that any increase in costs and/or fees must be proportional to the change in scope required by SPONSOR.  If acceptable to SPONSOR, the Parties shall execute the revised Project Proposal/SOW and SUPPLIER shall proceed accordingly.
		

		
			 
		

		
			G.    SUPPLIER Agents: SUPPLIER shall ensure that all employees and agents of SUPPLIER who are assigned to perform Services under this Agreement are qualified and have sufficient expertise, training, and experience.  SUPPLIER shall ensure that such agents are made aware of and are bound to comply with SUPPLIER’s obligations contained in this Agreement.
		

		
			 
		

		
			H.    Quality Agreement.  SUPPLIER and SPONSOR shall execute a written Quality Agreement between the Parties related to the Services to be performed hereunder (the “Quality Agreement”). Upon execution, the Quality Agreement shall be attached hereto and shall be incorporated herein. The Quality Agreement may be updated from time to time upon the mutual written agreement of the Parties. To the extent that any terms of the Quality Agreement are inconsistent with the terms set forth in this Agreement, the terms of this Agreement shall prevail, except for specific quality-related and quality-assurance (e.g. quality reviews/audits) issues for which the Quality Agreement shall prevail.
		

		
			 
		

		
			I.     Equipment.  Any and all Equipment shall remain SPONSOR’s personal property.  Such Equipment shall be plainly marked or otherwise adequately identified by SUPPLIER as SPONSOR’s property and shall be safely stored. SUPPLIER shall use Equipment only to meet SPONSOR’s Purchase Orders, and shall not use Equipment for any other purpose.  All Equipment, while in SUPPLIER’s custody or control, shall be held at SUPPLIER’s risk, shall be kept insured by SUPPLIER at SUPPLIER’s expense in an amount equal to the replacement cost with loss payable to SPONSOR and shall be subject to removal at SPONSOR’s written request, in which event SUPPLIER shall prepare such Equipment for shipment and redeliver to SPONSOR in the same condition as originally received by SUPPLIER, reasonable wear and tear excepted, all at SPONSOR’s expense.  SUPPLIER agrees to keep the Equipment at all times in good and efficient working order for use in manufacturing the Products. SUPPLIER shall be responsible for routine maintenance of all Equipment at the expense of the SPONSOR, but SPONSOR shall be responsible for the cost of replacement at the end of their normal useful life.
		

		
			 
		

		
			ARTICLE 3 – ACCEPTANCE; DEFECTS; RECORDS
		

		
			 
		

		
			A.   Acceptance. SPONSOR will have [**] days following SPONSOR’s receipt of the Products and all applicable Batch Records and release documentation (“Acceptance Period”) to ensure that the Products meet the Specifications, requirements, and terms of this Agreement and the applicable Proposal/SOW.  If SPONSOR determines that any Products fail to meet the Specifications, requirements, and terms of this Agreement and the applicable Proposal/SOW (“Defective Products”), then SPONSOR may reject the entire Batch of such Defective Products, and SUPPLIER shall promptly, at its own expense and without limiting any remedies otherwise available to SPONSOR, replace the Defective Products with Products conforming to this Agreement. Any replacement Products shall be subject to additional acceptance terms pursuant to this Section.  In the event that replacement Products are required due to Defective Products, SPONSOR shall supply SUPPLIER, at SUPPLIER’s sole cost and expense, sufficient quantities of SPONSOR Materials in order for SUPPLIER to provide replacement Products.  SUPPLIER shall have no obligation under this section to the extent that any Defective Products result due to: (i) defects in the
		

		
			
		

		
			

		 

		

			Page 3 of 25

		

 

		

			

		

		

		
			SPONSOR Materials or (ii) conduct following SPONSOR’s receipt of the Products or (iii) events following shipment of Products by the SUPPLIER.
		

		
			 
		

		
			B.   Batch Records and Data; Release.  Unless otherwise agreed to by the parties in writing during their ordinary course of dealings, after SUPPLIER completes of a Batch, SUPPLIER shall provide SPONSOR with copies of Batch records prepared in accordance with the Specifications; provided, that if testing reveals an out-of-Specification result, SUPPLIER shall provide such Batch records promptly following resolution of the out-of Specification result.  After SUPPLIER completes a Batch, SUPPLIER shall also provide SPONSOR or its designee with a sample of the Product.
		

		
			 
		

		
			C.   Recordkeeping.  SUPPLIER shall maintain materially complete and accurate Batch, laboratory data, reports and other technical records relating to the Services in accordance with SPONSOR’s requirements, cGMPs and applicable law. Such information shall be maintained for a period of at least [**] years from the relevant finished Product expiration date or longer if required under applicable laws or the Quality Agreement.
		

		
			 
		

		
			ARTICLE 4 – FORECASTS, PURCHASE ORDERS AND DELIVERY
		

		
			 
		

		
			A.   Forecasts.  SPONSOR shall provide SUPPLIER, at least [**] days prior to the beginning of each [**], with a [**] month non-binding rolling forecast of the estimated quantities of Product believed to be required by SPONSOR.  Forecasted quantities become a firm binding order [**] days before delivery date set forth in the forecast. SPONSOR shall use commercially reasonable efforts to ensure that its forecasts are accurate. SUPPLIER shall ensure that it is able to supply at least [**]% of the quantity of Products set forth in SPONSOR’s forecasts. In no event will the fees for the Services increase due to ordered quantities of Product exceeding forecasts, provided, however, that SPONSOR shall bear the cost of any unused materials purchased by SUPPLIER in quantities consistent with SPONSOR’s forecast or minimum orders as required by vendors which are communicated to SPONSOR in advance of placing the applicable order.
		

		
			 
		

		
			B.   Purchase Orders.  All Product ordered by SPONSOR shall be in the form of a firm written Purchase Order not less than [**] days prior to expected delivery.  The Lead Time for the Product shall not exceed the number of days set forth in the applicable Proposal/SOW.  Each Purchase Order shall contain at a minimum, the following information:  description of the Product and quantity ordered, price, delivery terms, delivery date, and Purchase Order number for billing purposes.  Each Purchase Order issued pursuant to this Agreement shall be binding, except that delivery dates may be moved ahead or back by mutual written agreement of SUPPLIER and SPONSOR.  To the extent there are any conflicts between the terms of any Purchase Order and the terms of this Agreement, the terms of this Agreement shall prevail and control.  There shall be no minimum purchase requirements except for binding forecasts.  Batches will be invoiced upon the completion of manufacturing and release testing.  As noted in the table below, the cost per batch is based on the following three tier pricing schedule:  (i) upon the completion of manufacturing the first [**] batches in each calendar year (batches [**])  batches will be invoiced at Tier 1 pricing  (ii) upon the completion of manufacturing the [**] batches in each calendar year (batches [**]) batches will be invoiced at Tier 2 pricing (iii)  all remaining batches manufactured from batch [**] on will be invoiced at Tier 3 pricing.
		

		
			 
		

			
					
						Pricing Schedule

					
					
						Total Product Manufactured
in each Calendar Year
(total number of batches)

					
					
						Cost per Batch

				
	
					
						Tier 1

					
					
						[**]

					
					
						[**]

				
	
					
						Tier 2

					
					
						[**]

					
					
						[**]

				
	
					
						Tier 3

					
					
						[**]

					
					
						[**]

				

		
			 
		

		
			C.   Delivery.  Unless expressly provided otherwise in the applicable Purchase Order, shipping terms for the Product shall be EXW Harleysville, PA (Incoterms 2010).  SPONSOR shall coordinate shipments of Product from SUPPLIER. The Product will be packaged and shipped per the Specifications.  In the event that any delivery of the Product is anticipated to be late, SUPPLIER will promptly notify SPONSOR of the circumstances for the delay.  SUPPLIER will make a reasonable effort to minimize the delay.  If as a
		

		
			
		

		
			

		 

		

			Page 4 of 25

		

 

		

			

		

		

		
			result of a SUPPLIER issue, SUPPLIER agrees to assume the burden of bearing additional costs associated with overtime production and premium freight for corrective action as a result of delays caused by SUPPLIER or any personnel or service providers engaged by SUPPLIER. SUPPLIER agrees that all Product shipments to SPONSOR shall be in accordance with SPONSOR’s instructions and all applicable laws and regulations governing the shipment, labeling, and packaging of the Product.
		

		
			 
		

		
			D.    Storage. Product completed by SPONSOR shall be stored by SUPPLIER in the SPONSOR supplied [**]°C chamber (which shall constitute Equipment hereunder) until shipment of the Product.
		

		
			 
		

		
			E.    Financial Statements.  Within [**] days after the end of each fiscal year, SUPPLIER shall deliver to SPONSOR an annual Going Concern Statement issued by SUPPLIER’s external accounting firm. Such Going Concern Statement shall be sufficient for SPONSOR to confirm SUPPLIER’s continued ability to perform its obligations under this Agreement in the following twelve (12) month period and shall be consistent with the standards identified by the Financial Accounting Standards Board.  SPONSOR may use such statement strictly in order to confirm SUPPLIER’s ongoing ability to perform its obligations under this Agreement. SPONSOR shall keep such financial statements confidential, and shall provide such statements only to those of its financial directors, who have a need to know such information in order to confirm SUPPLIER’s continued ability to perform its obligations under this Agreement.
		

		
			 
		

		
			ARTICLE 5 – AGREEMENT TERM
		

		
			 
		

		
			The term of this Agreement shall commence on the Effective Date and shall continue for a period of ten (10) years (“Initial Term”). Thereafter, this Agreement will continue until terminated as provided in this Agreement. The Initial Term and any subsequent continuation of the Agreement are referred to collectively as the “Agreement Term”).  In the event a Project Proposal/SOW is still in effect upon the expiration of this Agreement, such Project Proposal/SOW shall remain in effect and shall continue to be governed by the terms and conditions of this Agreement unless and until such Project Proposal/SOW is completed or otherwise terminated in accordance with this Agreement.
		

		
			 
		

		
			ARTICLE 6 – COMPLIANCE WITH LAWS; QUALITY CONTROL
		

		
			 
		

		
			A.    Compliance with Laws:  SPONSOR and SUPPLIER each agree that they shall comply with all applicable federal, state and local laws and regulations in performance of their respective obligations pursuant to this Agreement, including, without limitation and as applicable, laws and regulations related to promotion of pharmaceutical products, fraud and abuse, insider trading, privacy, discrimination, confidentiality, false claims and prohibition of kickbacks.  Without limiting the generality of the foregoing:
		

		
			 
		

		
			a.    Privacy: SUPPLIER and SPONSOR each agrees, if applicable, to comply with all applicable federal, state and local laws and regulations relating to the privacy of patient health information, including, but not limited to, the Standards for Individually Identifiable Health Information, 42 C.F.R. §§160 and 164 (the “HIPAA Privacy Regulation”) promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996.
		

		
			 
		

		
			b.    Dissemination of Materials: SUPPLIER acknowledges that SPONSOR is subject to legal and regulatory restrictions concerning the dissemination, distribution or use of materials related to pharmaceutical products.  Accordingly, except as required to perform the Services hereunder, SUPPLIER shall not disseminate, distribute or use any materials prepared in the course of performing the Services or otherwise provided to SUPPLIER without the prior express, written permission of SPONSOR.  To the extent that the Services require SUPPLIER to distribute materials, such materials must be approved by SPONSOR for the specific purpose(s) for which SUPPLIER is distributing such materials.
		

		
			 
		

		
			c.    Adverse Event Reporting:  SUPPLIER acknowledges that SPONSOR is required to comply fully and promptly with all regulatory safety reporting requirements regarding its products. In accordance with SPONSOR policies and procedures, SUPPLIER agrees that if in connection with its performance of the Services it receives information relating to adverse events (AE), product complaints (PC), and/or other SPONSOR product-related safety information (e.g.
		

		
			 
		

		
			
		

		
			

		 

		

			Page 5 of 25

		

 

		

			

		

		

		
			special safety topics as communicated to SUPPLIER through separate correspondence), SUPPLIER will promptly notify SPONSOR as follows:  All AE and PC information received by SUPPLIER must be reported by SUPPLIER within [**] by telephone to SPONSOR at [**] and by email to [**] or such other party designated by SUPPLIER. If AE/PC information is received by SUPPLIER on a non-business day or after regular business hours of a business day, then SUPPLIER must transmit the information by the end of the next business day. However, if more than [**] non-business days occur in a row, it is the responsibility of SUPPLIER to transmit the information by the end of day [**]. Notwithstanding the foregoing, the time period, criteria and method for reporting AE/PC information, including any special safety topics, may be modified by SPONSOR in separate correspondence.  SUPPLIER will ensure that the personnel assigned to perform the Services are sufficiently trained to comply with the requirements of this paragraph.  If SPONSOR determines that SUPPLIER personnel require additional training, then SPONSOR will provide training to SUPPLIER personnel to enable SUPPLIER personnel to comply with the requirements of this paragraph.  SUPPLIER agrees to follow the direction given in such training.
		

		
			 
		

		
			d.    Securities: SUPPLIER acknowledges that during the performance of this Agreement it may come into possession of certain material information about SPONSOR or its affiliates that has not yet been disclosed to the public.  SUPPLIER agrees to comply with the rules and regulations of the United States Securities and Exchange Commission ("SEC"), including those relating to insider trading in connection with such material, non-public, information about SPONSOR or its affiliates.  SUPPLIER is hereby notified that it should not trade in SPONSOR securities on its own behalf or on the behalf of others after receiving or becoming aware of any such material, non-public information.
		

		
			 
		

		
			e.    Permits.  SUPPLIER has obtained (or before performing the Services will obtain) all governmental permits (including building/construction permits) and licenses required for it to perform the Services and its other obligations under this Agreement.
		

		
			 
		

		
			f.     Reporting. SUPPLER shall provide SPONSOR with all applicable records and data necessary to prepare Annual Product Review Reports as required by Applicable Laws and GMPs.
		

		
			 
		

		
			B.    Recalls.  SPONSOR shall have the right to reasonably declare any recall of, or field corrective action to, any Product supplied to SPONSOR under this Agreement.  SUPPLIER agrees to cooperate with SPONSOR in connection with any such recall, and shall indemnify SPONSOR for all expenses arising from any such recall to the extent the recall is attributable to a breach of any of SUPPLIER’s warranties under this Agreement or is otherwise attributable to a defect in the Product. SUPPLIER shall also credit SPONSOR’s account for the Product recovered and returned to it as a result of the recall.
		

		
			 
		

		
			C.    Governmental Inquiries. SUPPLIER shall use its best efforts to:
		

		
			 
		

		
			a.    Respond fully and accurately to all inquiries directed to it by the FDA or any government agency with respect to the manufacture, testing, and use of the Product.
		

		
			 
		

		
			b.    Assist SPONSOR in responding to inquiries directed to SPONSOR by the FDA or any government agency with respect to the manufacture, testing, and use of the Product.
		

		
			 
		

		
			c.    Promptly inform SPONSOR of the existence and substance of any inquiry, investigation or inspection initiated by the FDA or any government agency (including Ministry of Health), department or body relating to the Product or its manufacture.  The existence of any such inquiry, investigation or inspection shall not alone constitute a breach of this Agreement or excuse any performance due under this Agreement.  SUPPLIER shall immediately provide SPONSOR with copies of any and all inspection reports, letters, documents or similar instruments submitted or received from the FDA or other government agency related to the Product or its manufacture, testing or use. To the extent permitted by applicable law, SUPPLIER shall permit SPONSOR to review and reasonably approve any response to be
		

		
			 
		

		
			
		

		
			

		 

		

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			made by SUPPLIER in connection with any such inquiry, investigation or inspection.
		

		
			 
		

		
			D.    Inspection of Manufacturing Facilities.
		

		
			 
		

		
			a.     SUPPLIER shall permit SPONSOR and its agents, during business hours and upon notice to SUPPLIER, to inspect the Facilities where the Product is manufactured, handled, stored or tested, as well as all processes relating to the manufacture, handling, storage, or testing of the Product, as well as all manufacturing, handling, storage, and test records regarding the Product.
		

		
			 
		

		
			b.    SUPPLIER shall extend the same inspection privileges set forth above to agents of the FDA or any other government agency, as required, and shall promptly notify SPONSOR of any such inspection.  SUPPLIER shall provide SPONSOR with copies of any and all inspection reports from the FDA or other relevant government agency regarding the manufacture of the Product within [**] working days of receipt of such reports.
		

		
			 
		

		
			c.     SUPPLIER warrants and agrees that it will correct, at its own expense and within a reasonable amount of time from the date of notification, all deficiencies and/or non-conformances found during a SPONSOR, FDA, or other government agency audit; and that it will correct or issue an approved plan, including timetable, to correct all deficiencies and/or non-conformances within no more than [**] days of such notification.
		

		
			 
		

		
			E.    Quality Control Testing.   SUPPLIER shall perform quality control testing in accordance with the Specifications for release of each Lot of Product to SPONSOR.  SUPPLIER shall provide all such testing data to SPONSOR in the form of a COA.  Each COA shall be in accordance with the format approved by SPONSOR, certifying that the Product has met all Specifications.  Any third party or contract laboratory used for the testing of the Product must be approved in writing by SPONSOR prior to its use for that purpose, such approval not to be unreasonably withheld or delayed.
		

		
			 
		

		
			F.     Specifications and Change Control.
		

		
			 
		

		
			a.    The Specifications may not be changed without prior written approval of both parties.
		

		
			 
		

		
			b.    SUPPLIER shall not make any changes to the manufacturing process, Facilities, or equipment used in the manufacture of the Product without SPONSOR’s prior written approval, such approval not to be unreasonably withheld.
		

		
			 
		

		
			c.     SPONSOR shall use commercially reasonable efforts to provide SUPPLIER with sufficient written notice of any instructions or requirements of a government regulatory agency that may require a change of the Specifications.  SUPPLIER shall immediately notify SPONSOR if any such changes in the Specifications shall render SUPPLIER unable to supply the Product in accordance with the term and conditions of this Agreement.
		

		
			 
		

		
			G.    Technical Assistance. SUPPLIER shall provide SPONSOR with certain technical support regarding the Product as reasonably requested by SPONSOR, including, but not limited to, operation of milling and other ancillary equipment, analytical test methods, method development, physical and chemical properties, and use of the Product..
		

		
			 
		

		
			ARTICLE 7 – COMPENSATION
		

		
			 
		

		
			A.    Fees: SPONSOR will pay SUPPLIER, as full and complete compensation for performing the Services pursuant to each Project Proposal/SOW the rates/amounts set forth in the applicable Project Proposal/SOW. The Parties agree that the compensation provided hereunder has been established pursuant to arm’s length negotiations between the Parties and is consistent with the fair market value of the Services provided by SUPPLIER during the term of this Agreement.  Except to the extent that the Services involve promotion of pharmaceutical products, nothing herein shall be construed to require SUPPLIER to purchase, order, recommend, or arrange for, the purchase, order or recommendation of any products manufactured and/or marketed by SPONSOR.
		

		
			 
		

		
			B.    Out-of-Pocket Expenses (“OOPs”): SPONSOR shall reimburse SUPPLIER for all OOPs for activities
		

		
			 
		

		
			
		

		
			

		 

		

			Page 7 of 25

		

 

		

			

		

		

		
			described in an approved Project Proposal/SOW and which are preapproved in writing by SPONSOR on a case by case basis, but in no event shall SPONSOR reimburse SUPPLIER for any OOPs that exceed the estimates provided in such Project Proposal/SOW. Upon SPONSOR’s request all OOP’s for which SUPPLIER seeks reimbursement shall be supported with actual SUPPLIER invoices and/or other reasonable documentation.
		

		
			 
		

		
			C.    Other Expenses/Travel:  Reasonable expenses incurred by SUPPLIER in the course of providing the Services, including but not limited to, round trip economy airfare, auto rental, meals, lodging and long distance telephone charges (collectively, “Travel Expenses”), will be reimbursed to SUPPLIER by SPONSOR in accordance with SPONSOR’s travel and expense policy; provided, however, that all Travel Expenses shall be reimbursed only if plans for same are approved by SPONSOR in advance and in writing.  SUPPLIER shall itemize all Travel Expenses on its invoices specifically describing each charge incurred, and when and why such charges were incurred.  Receipts and bills shall be submitted with the expense report.
		

		
			 
		

		
			D.   Submission of Invoices:  SUPPLIER will submit invoices to SPONSOR in accordance with the payment schedule set forth in the Project Proposal/SOW.  In the event that payment terms are based on hourly fees, SUPPLIER shall submit monthly invoices to SPONSOR which reflect the total number of hours worked for that month, the activities performed for each hour billed, and the individual who performed such activities.  SPONSOR may withhold any invoiced amounts that it reasonably disputes in good faith, in which case SPONSOR will so notify SUPPLIER in writing and the Parties agree to work in good faith to resolve any such disputes.  SPONSOR will pay any undisputed amounts specified in such invoice within [**] days of receipt of same.  SPONSOR will not pay for any services invoiced more than [**] months after such services were performed.  All invoices submitted by SUPPLIER shall reference the appropriate SPONSOR authorized Purchase Order number, and shall be emailed to AP@kalarx.com.
		

		
			 
		

		
			E.    Payment:  SUPPLIER is not entitled to any compensation unless and until the work or work product produced by SUPPLIER meets the Specifications of the applicable Project Proposal/SOW to the reasonable satisfaction of SPONSOR. SUPPLIER is also not entitled to any compensation related to correcting any work or work product that SPONSOR has rejected as not acceptable to SPONSOR in the exercise of its reasonable discretion.
		

		
			 
		

		
			F.    Preparation of Project Proposal/SOWs:  There will be no compensation under this Agreement for (i) preparation of any Project Proposal/SOW or (ii) work done in connection therewith, in the event SUPPLIER prepares a bid or proposal for SPONSOR regardless of whether SUPPLIER’s bid or proposal is accepted by SPONSOR.
		

		
			 
		

		
			G.    No Commission:  SUPPLIER shall bill SPONSOR without commission or markup on purchases of goods or services, Travel Expenses or other OOPs.  SUPPLIER shall not share directly or indirectly in the profits of any third party in connection with SUPPLIER services provided hereunder without the prior written consent of SPONSOR.
		

		
			 
		

		
			H.   SUPPLIER Errors:  Notwithstanding anything herein to the contrary, SUPPLIER shall not invoice SPONSOR for any additional costs incurred as a result of any SUPPLIER error, including any failure by SUPPLIER to properly price the Services or any required reperformance of the Services.
		

		
			 
		

		
			ARTICLE 8 – RIGHT TO AUDIT
		

		
			 
		

		
			Upon reasonable notice in writing and at reasonable times during SUPPLIER’s normal business hours, not more than [**] (or more frequently for cause), SPONSOR shall have the right to audit and examine all contracts, documents, correspondence, books, time sheets, account books and records and other material (except for individual payroll and personnel records and SUPPLIER overhead) that relate to SPONSOR’s account.  A representative duly authorized by SPONSOR may perform this audit.  To the extent SPONSOR utilizes the services of any third party representative (including any certified public accountants) to perform this audit, the selection of such third party representative shall be approved by SUPPLIER, such approval not to be unreasonably withheld by SUPPLIER.  The expense of such audit or examination shall be borne by SPONSOR unless the audit shows that
		

		
			 
		

		
			
		

		
			

		 

		

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			SPONSOR has been overcharged by more than [**] percent ([**]%), in which case SUPPLIER shall pay for the audit.  Any such representative and/or certified public accountants conducting the audit shall be required to sign an appropriate non-disclosure agreement, reasonably acceptable to SUPPLIER, prior to participating in any such audit.  Any such audit shall include the right to inspect SUPPLIER’s timesheet records; provided, however, that such time sheets may be redacted by SUPPLIER to exclude any confidential or proprietary information of SUPPLIER or any of its other clients.  The audit rights provided herein shall survive any termination or expiration of this Agreement.  The provisions of this Article 8 shall survive the expiration or sooner termination of this Agreement.
		

		
			 
		

		
			ARTICLE 9  –NON EXCLUSIVE AGREEMENT
		

		
			 
		

		
			A.   The Parties recognize that this is a non‐exclusive Agreement and during the term hereof, SPONSOR may engage other vendors to perform the Services.
		

		
			 
		

		
			ARTICLE 10 – OWNERSHIP/TRADEMARKS/COPYRIGHTS
		

		
			 
		

		
			A.    Ownership of Services:
		

		
			 
		

		
			a.    SUPPLIER shall retain all right, title and interest in and to any and all materials, work and work product owned or developed by SUPPLIER prior to, or independently from, its engagement hereunder or developed or obtained by SUPPLIER in the general conduct of its business not specifically related to the Services or SPONSOR (”SUPPLIER Property”).  SUPPLIER hereby grants SPONSOR a perpetual, irrevocable, royalty free, worldwide, non-exclusive license, with the right to assign or sublicense, in and to any and all SUPPLIER Property to allow SPONSOR to use the results of the Services to develop, market, promote, make, have made, use, sell, offer for sale and import SPONSOR products or any other purpose consistent with this Agreement.  SPONSOR shall retain all right, title and interest in and to any and all materials, work and work product owned or developed by SPONSOR prior to, or independently from, its engagement hereunder (”SPONSOR Property”).  SPONSOR hereby grants SUPPLIER, during the term of this Agreement, a non-exclusive, non-transferable, limited license to use the SPONSOR Property solely for the benefit of SPONSOR and solely as necessary for performance of the Services.
		

		
			 
		

		
			b.    SUPPLIER represents and warrants that all materials, work and work product provided to SPONSOR or used on behalf of SPONSOR pursuant to this Agreement, including without limitation, all SUPPLIER Property, shall either (i) not infringe the copyright or any other intellectual property right of any third party, or (ii) be licensed at no cost to SPONSOR under a third party release under which SUPPLIER has all rights necessary to provide to SPONSOR such materials, work and work product and permit SPONSOR to use such materials, work and work product as contemplated herein.  SPONSOR shall have the right, in its discretion, to examine copies of releases obtained by SUPPLIER.  SUPPLIER further represents and warrants that SPONSOR shall be free to use such materials, work and work product without interference by, or claims of, third parties subject to any limitations on usage contained in the aforesaid releases, licenses or other documentation and brought to the attention of SPONSOR in writing.
		

		
			 
		

		
			c.    Except for SUPPLIER Property as defined in subsection 7.A.a. above, all materials, work and work product whether created by or on behalf of SUPPLIER, SPONSOR, or any combination thereof hereunder, and all draft versions thereof, whether used or unused, (collectively, “Work Product”) shall be property of SPONSOR and shall be delivered to SPONSOR at any time upon SPONSOR's request, or no later than the termination of this Agreement.  SUPPLIER hereby transfers and assigns to SPONSOR any copyright and all other intellectual property rights in such Work Product, including all of the exclusive rights comprised in such intellectual property rights, whether in patent, copyright, trade secret, know-how, or otherwise.  Subject to the provisions of subsection 7.A.b., SUPPLIER shall ensure that all individuals working on such Work Product have assigned to SUPPLIER their rights to such Work Product.
		

		
			 
		

		
			
		

		
			

		 

		

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			SUPPLIER agrees to execute any documents necessary to assign to SPONSOR SUPPLIER’s full interest (including all intellectual property rights) in the Work Product either solely or jointly with others for SPONSOR pursuant to this Agreement. No restrictions will be placed on SUPPLIER by third parties with respect to any Work Product without the prior written consent of SPONSOR.
		

		
			 
		

		
			d.    Except for SUPPLIER Property as defined in subsection 7.A.a. above, all information, inventions, discoveries, patent rights, trademarks and copyrights which result from any Services performed by or on behalf of SUPPLIER pursuant to this Agreement ("Inventions"), will be the exclusive property of SPONSOR and SPONSOR shall have and retain all right, title and interest in and to such Inventions.   SUPPLIER hereby transfers and assigns to SPONSOR all intellectual property rights in and to such Inventions. SUPPLIER shall promptly disclose in writing to SPONSOR each such Invention and provide to SPONSOR all information known to SUPPLIER reasonably relating to such Invention. Subject to the provisions of subsection 7.A.b., SUPPLIER shall ensure that all individuals contributing to such Inventions have assigned to SUPPLIER their rights to such Inventions.  SUPPLIER agrees to sign all necessary documents or take such other actions as SPONSOR may reasonably request in order to perfect and enforce any and all of its rights in such Inventions.  All costs and expenses for perfecting and enforcing its rights in such Inventions shall be borne by SPONSOR.
		

		
			 
		

		
			e.    SUPPLIER recognizes and agrees that all Work Product and Inventions prepared by or on behalf of SUPPLIER that are subject to copyright protection shall be “works made for hire” for SPONSOR under the terms hereof.  All copyrightable works prepared by or on behalf of SUPPLIER in the course of performing the Services hereunder that may not be interpreted as “works made for hire” shall be subject to SUPPLIER granting to SPONSOR a perpetual, royalty free, irrevocable, worldwide, exclusive license with the right to assign or sublicense, in and to any such works.  SUPPLIER hereby assigns to SPONSOR all rights, title and interest to all Work Product and Inventions together with all of the goodwill associated therewith, subject to any properly disclosed third party rights approved by SPONSOR in writing.  SPONSOR may, in its sole determination, apply for registration, or other protection, of any such Work Product and Inventions worldwide.  SUPPLIER shall cooperate with SPONSOR in regard to obtaining the necessary documents for any Work Product or Inventions protection, including the execution of any required documents.  SPONSOR shall pay any reasonable expenses incurred in connection with such cooperation
		

		
			 
		

		
			B.    The provisions of this Article 10 shall survive the expiration or sooner termination of this Agreement.
		

		
			 
		

		
			ARTICLE 11 – INDEMNIFICATION AND INSURANCE
		

		
			 
		

		
			A.    Indemnification of SPONSOR:  SUPPLIER agrees to defend, indemnify and hold SPONSOR and its affiliates, and its and their directors, officers, employees or agents harmless against all claims from third parties arising from: (i) any actual or alleged breach of any term of this Agreement; (ii) the actual or alleged negligent or willful actions of SUPPLIER or SUPPLIER’s subcontractors; (iii) contractual arrangements entered into by SUPPLIER with third parties; or (iv) any claim that the Services, Products or Work Product infringe on the intellectual property rights of any third party; except in each case to the extent of the negligence or willful misconduct of SPONSOR.
		

		
			 
		

		
			B.    Indemnification of SUPPLIER:  SPONSOR agrees to defend, indemnify and hold SUPPLIER and its affiliates, and its and their directors, officers, employees or agents harmless against all claims from third parties arising from (i) any breach of any term of this Agreement; or (ii) the negligent or willful actions of SPONSOR; except in each case to the extent of the negligence or willful misconduct of SUPPLIER.
		

		
			 
		

		
			C.    Indemnification Procedures:  Each Party shall notify the other in writing promptly upon receiving notification of any such suit or claim (except that failure to timely provide such notice will relieve the indemnifying Party of its obligations only to the extent the indemnifying Party is materially prejudiced as a direct result of such delay); the indemnifying Party shall defend such suit or claim on behalf of
		

		
			 
		

		
			
		

		
			

		 

		

			Page 10 of 25

		

 

		

			

		

		

		
			the indemnified Party; the indemnifying Party shall have sole control over the defense thereof and any related settlement negotiations; and the indemnified Party shall cooperate and, at the indemnifying Party’s request and expense, assist in such defense.  Notwithstanding the foregoing, the indemnified Party may participate at its own expense in the defense and any settlement discussions, and in any event, the indemnifying Party shall not settle any suit or claim without the prior written consent of the indemnified Party (such approval not to be unreasonably withheld).
		

		
			 
		

		
			D.    Survival:  The indemnification provided herein shall survive any termination or expiration of this Agreement.
		

		
			 
		

		
			E.     Insurance:
		

		
			 
		

		
			a.     Prior to commencement of any work under this Agreement, SUPPLIER shall, at its sole expense, maintain the following insurance on its own behalf, with insurance companies having an A. M. Best rating of "A-VII" or better and furnish to SPONSOR, Certificate(s) of Insurance evidencing same and reflecting the effective date of such coverage as follows:
		

		
			 
		

		
			Workers’ Compensation and Employers Liability: in the state in which the work is to be performed and elsewhere as may be required by law and shall include:
		

		
			 
		

		
			Bodily injury by Accident: $[**] each
		

		
			 
		

		
			Commercial General Liability: (including Premises Operations, Products/Completed Operations, Contractual Liability).  The policy must be on an occurrence form and include the following limits:
		

		
			 
		

		
			Each Occurrence: $[**]
		

		
			 
		

		
			General Aggregate: $[**]
		

		
			 
		

		
			Product Completed Operations Aggregate: $[**]
		

		
			 
		

		
			Personal Injury: $[**]
		

		
			 
		

		
			Commercial Umbrella Liability:
		

		
			 
		

		
			Occurrence Limit: $[**]
		

		
			 
		

		
			Aggregate Limit (where applicable); $[**]
		

		
			 
		

		
			Policy to be in excess of the Commercial General Liability,
		

		
			 
		

		
			Commercial Automobile Liability and Employers Liability.
		

		
			 
		

		
			Errors & Omissions Liability Coverage including Medical Malpractice Coverage if engaged in any direct patient care:
		

		
			 
		

		
			Each Claim Limit: $[**]
		

		
			 
		

		
			Aggregate Limit: $[**]
		

		
			 
		

		
			b.     Such insurance shall include coverage for bodily injury arising from the performance of or failure to perform professional services. Throughout the term of this Agreement, the Errors & Omissions Liability insurance's retroactive date will be no later than the Effective Date.  Upon expiration or termination of this Agreement, SUPPLIER will either continue to maintain an active insurance policy, or purchase an extended reporting period coverage for claims first made and reported to the insurance company within [**] months after the termination or expiration of the Agreement.
		

		
			 
		

		
			c.     Such insurance shall include coverage for: (i) personal injuries, unless covered, and not in any way excluded or restricted, by SUPPLIER’s General Liability insurance: invasion of privacy, defamation, infliction of emotional distress and advertising injury.
		

		
			 
		

		
			d.     With the exception of the Workers Compensation/ Employers Liability and Errors and
		

		
			 
		

		
			
		

		
			

		 

		

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			Omissions Liability, SPONSOR and its subsidiaries are to be named as an Additional Insured to the policies.
		

		
			 
		

		
			e.    The insurance requirements above must include a waiver of subrogation in favor of SPONSOR and its subsidiaries (except where not permitted by law).
		

		
			 
		

		
			f.     The amount of insurance required shall not be construed to be a limitation of the liability on the part of the SUPPLIER.
		

		
			 
		

		
			g.    It is agreed that this insurance will not be cancelled, materially changed or non-renewed without at least [**] days advance written notice to SPONSOR.
		

		
			 
		

		
			F.    LIMITATION OF LIABILITY:  EXCEPT FOR A BREACH OF ARTICLE 9, OR ARTICLE 11, OR THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF A PARTY, OR A PARTY’S INDEMNIFICATION OBLIGATIONS HEREUNDER, NO PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY LOST PROFITS, CONSEQUENTIAL DAMAGES (SPECIFICALLY EXCEPTING THOSE CONSEQUENTIAL DAMAGES ARISING FROM EACH PARTY’S OBLIGATION TO INDEMNIFY THE OTHER FOR LIABILITY ARISING OUT OF OR RELATING TO THIRD PARTY CLAIMS IN ACCORDANCE WITH THIS ARTICLE) INCIDENTAL, INDIRECT, SPECIAL, OR OTHER SIMILAR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.  The provisions of this Article 11(F) shall survive the expiration or sooner termination of this Agreement.
		

		
			 
		

		
			ARTICLE 12 – CONFIDENTIAL INFORMATION
		

		
			 
		

		
			A.   Each Party (each a “Receiving Party”) will not, either during or after the term of this Agreement, disclose to any third person or use the results of the Services or any confidential or proprietary information of the other Party (each a “Disclosing Party”) or its affiliates for any purpose other than the performance of the Services, without the prior written authorization of Disclosing Party.
		

		
			 
		

		
			B.   For purposes of this Article 12, "confidential or proprietary information" includes, without limitation, the results of the Services, the existence and terms of this Agreement, technical data, know-how, unpublished findings, compounds, compositions, formulations, biomaterials, products, technologies, processes, patent applications, commercial or financial trade secrets, marketing methods and plans, pricing information, manufacturing information, product pipelines, written documents, depictions, oral statements, artwork, unpublished information relating to the business or financial condition of a Party and its affiliates or collaborators, and any other information, property and materials developed, created or acquired by a Party in connection with this Agreement or its terms and conditions, which has been or will be disclosed by Disclosing Party or its affiliates.  Without limiting the generality of the foregoing, SUPPLIER acknowledges and agrees that the Work Product and all information related to SPONSOR’s mucous penetrating product platform technology shall be considered the confidential or proprietary information of SPONSOR.
		

		
			 
		

		
			C.   These obligations shall not apply to the following:
		

		
			 
		

		
			a.    information which, after disclosure, becomes available to the public by publication or otherwise, other than by breach of this Agreement by the Receiving Party;
		

		
			 
		

		
			b.    information that the Receiving Party can establish by prior written record was already known to it or was in its possession at the time of disclosure and was not acquired, directly or indirectly, from Disclosing Party or its affiliates; or
		

		
			 
		

		
			c.    information that the Receiving Party obtains from a third party; provided however, that such information was not obtained by said third party, directly or indirectly, from Disclosing Party or its affiliates under an obligation of confidentiality;
		

		
			 
		

		
			D.    If Receiving Party is required (by oral questions, interrogatories, requests for information or
		

		
			 
		

		
			
		

		
			

		 

		

			Page 12 of 25

		

 

		

			

		

		

		
			documents, subpoena, civil investigation demand or similar process) to disclose any confidential or proprietary information, Receiving Party may comply with such requirement but will provide prompt notice to Disclosing Party of such requirement in advance of any such disclosure, in order for Disclosing Party to seek a protective order or other remedy prior to such disclosure.
		

		
			 
		

		
			E.   The Receiving Party’s obligations under this Article 12 to preserve the confidentiality of any and all of the confidential or proprietary information disclosed to it by a Disclosing Party shall continue during the term of the Agreement and for a period of [**] years following expiration or termination of this Agreement, or as otherwise required by law; except for any trade secret recognized as such under the Uniform Trade Secret Act for which the Receiving Party’s obligations with respect to use and disclosure shall continue until and unless the applicable confidential or proprietary information falls within an exception set forth in Article 12(C).
		

		
			 
		

		
			F.    SUPPLIER agrees that any breach of this Article 12 will cause SPONSOR substantial and irreparable harm and, therefore, in the event of any such breach, in addition to other remedies that may be available to it, SPONSOR shall have the right to seek specific performance and other injunctive and equitable relief.
		

		
			 
		

		
			G.   SUPPLIER hereby acknowledges and agrees that all of SPONSOR’s confidential information, including Sponsor Materials, disclosed hereunder may be subject to United States export controls, under the export administration regulations, 15 C.F.R. parts 730-774.  SUPPLIER shall strictly comply with all export controls applicable to SPONSOR’s confidential information and Sponsor Materials and SUPPLIER shall not: (a) utilize any of such information or Sponsor Materials for any purpose whatsoever, except as specifically authorized in this Agreement; (b) export, transfer, divert or disclose any of such information or Sponsor Materials; or (c) use, or make any of such information or Sponsor Materials available for use, directly or indirectly, in the design, development, production, stockpiling or use of any chemical or biological weapons.
		

		
			 
		

		
			H.    The provisions of this Article 12 shall survive the expiration or sooner termination of this Agreement.
		

		
			 
		

		
			ARTICLE 13 – TERMINATION
		

		
			 
		

		
			A.    Termination of the Agreement:
		

		
			 
		

		
			a.    This Agreement may be terminated by SPONSOR at any time with or without cause by giving at least ninety (90) days prior written notice to SUPPLIER. SPONSOR remains responsible for payment associated with any firm orders and unused inventory of raw materials for the Products purchased by SUPPLIER, so long as: (i) SUPPLIER purchased such raw materials in quantities consistent with SPONSOR’s most recent firm commitment, and (ii) such materials cannot be readily reused by SUPPLIER for its other clients or customers.
		

		
			 
		

		
			b.    This Agreement may be terminated by either Party, in whole or in part upon default in performance of the other Party, provided that the defaulting Party shall be given not less than [**] days prior written notice of default and the opportunity to cure the default during such period.
		

		
			 
		

		
			c.     Following the Initial Term, this Agreement may be terminated by SUPPLIER upon at least twenty-four (24) months’ prior written notice.
		

		
			 
		

		
			d.    In the event that SUPPLIER terminates this Agreement as permitted hereunder, then notwithstanding such termination, upon the request of SPONSOR, SUPPLIER shall complete any outstanding work under any Project Proposal/SOWs approved by SPONSOR even if such activity extends beyond the termination date.
		

		
			 
		

		
			B.   Termination of Project Proposal/SOWs:  Any Project Proposal/SOW may be terminated by SPONSOR, in whole or in part, with or without cause, upon thirty (30) days written notice to the other Party, or such shorter period of time as the Parties may agree to in any particular Project Proposal/SOW.  Termination of a specific Project Proposal/SOW does not constitute termination of this Agreement or any other Project Proposal/SOW.
		

		
			 
		

		
			C.   Bankruptcy:  If either Party to this Agreement becomes insolvent, or a proceeding in bankruptcy, receivership or similar proceeding is filed involving a Party during the Agreement Term (and such proceeding is not dismissed within ninety 90 days), this Agreement may be immediately terminated by
		

		
			

		 

		

			Page 13 of 25

		

 

		

			

		

		

		
			the other Party. In the event that SUPPLIER becomes insolvent, or a proceeding in bankruptcy, receivership or similar proceeding is filed involving SUPPLIER during the Agreement Term (and such proceeding is not dismissed within ninety 90 days), SUPPLIER shall use its best efforts to ensure SPONSOR’s supply of Products is uninterrupted, such best efforts including, without limitation, providing training and assistance to any successor of SUPPLIER that begins manufacturing Services and otherwise cooperating with SPONSOR in SPONSOR’s efforts to continue the manufacture of the Product as the Facility. In the event that SPONSOR becomes insolvent, or a proceeding in bankruptcy, receivership or similar proceeding is filed involving SPONSOR during the Agreement Term (and such proceeding is not dismissed within ninety 90 days) prepayment of all firm orders may be required prior to production.
		

		
			 
		

		
			D.    Effect of Termination:  Termination or expiration of this Agreement or any Project Proposal/SOW shall not relieve SPONSOR of any amounts owing hereunder for Services actually rendered prior to the effective date of termination or expiration.  Additionally:
		

		
			 
		

		
			a.    Any non-cancellable contract made on SPONSOR’s prior written authorization (it being understood that SUPPLIER shall not enter into non-cancellable contracts on SPONSOR’s behalf without SPONSOR’s prior written authorization), and still to be performed as of the effective date of termination or expiration, shall be paid for by SPONSOR unless mutually agreed in writing to the contrary, and if requested by SPONSOR such contract shall, at SPONSOR’s election, either be carried to completion by SUPPLIER or assigned to SPONSOR (and SPONSOR shall assume all of the rights and obligations under such contract and SUPPLIER shall be relieved of any further responsibility or liability with respect thereto).
		

		
			 
		

		
			b.    Notwithstanding the foregoing, if SPONSOR terminates this Agreement pursuant to Sections 12(A)(b), (C) or otherwise for cause, the provisions of subsection 10.D.a. shall not apply.
		

		
			 
		

		
			c.    SUPPLIER shall promptly cease performing any work not necessary for the orderly close out of the affected Purchase Order(s) or for the fulfillment of regulatory requirements.
		

		
			 
		

		
			d.    Within [**] days following the termination of this Agreement, SUPPLIER shall deliver to SPONSOR all data and materials provided by SPONSOR to SUPPLIER for the manufacturing and supply activities under the impacted Purchase Order(s).
		

		
			 
		

		
			e.    The terms and conditions of Section [3, 6, 8, 10, 11, 12, 13, 14, 16, 17 and 19] shall survive the expiration or termination of this Agreement for any reason.
		

		
			 
		

		
			ARTICLE 14 – REPRESENTATIONS AND WARRANTIES
		

		
			 
		

		
			A.   SUPPLIER’s Representations:  SUPPLIER represents and warrants that: (i) compliance with the terms of this Agreement and performance of the Services do not and will not breach or conflict with any other agreement or arrangement to which SUPPLIER is a party; and (ii) during performance of the Services, SUPPLIER will not disclose to SPONSOR, or induce SPONSOR to use, any confidential or proprietary information of a third party without appropriate consent or license from such third party.
		

		
			 
		

		
			B.    Debarment/Other Sanctions:  SUPPLIER hereby certifies that it has not and will not use in any capacity the services of any individual, corporation, partnership or association which has been debarred under 21 U.S.C. Sec.335a(a) or (b), or listed in the DHHS/OIG List of Excluded Individuals/Entities or the General Services Administration’s Listing of Parties Excluded from Federal Procurement and Non-Procurement Programs.  SUPPLIER further certifies that it has not been debarred under 21 U.S.C. Sec.335a(a) or (b), or listed in the DHHS/OIG List of Excluded Individuals/Entities or the General Services Administration’s Listing of Parties Excluded from Federal Procurement and Non-Procurement Programs.
		

		
			 
		

		
			ARTICLE 15 – SUBCONTRACTORS
		

		
			 
		

		
			A.    SUPPLIER shall not engage any subcontractor to perform any portion of the Services as related
		

		
			 
		

		
			
		

		
			

		 

		

			Page 14 of 25

		

 

		

			

		

		

		
			directly to any SPONSOR Materials hereunder without obtaining SPONSOR’s prior written consent, which shall not be unreasonably withheld, after SUPPLIER provides SPONSOR with the name of the subcontractor, a description of the services to be provided and the cost of such services.  Before allowing any subcontractor or consultant to begin performing Services, SUPPLIER will enter into a binding written agreement with such subcontractor/consultant that protects SPONSOR’s rights and interests to at least the same degree as this Agreement.  Notwithstanding the foregoing, as of the Effective Date, SPONSOR hereby consents to SUPPLIER’s use of the subcontractor(s) set forth in the applicable [SOW/Proposal], subject to the execution by such subcontractor(s), SUPPLIER and SPONSOR of a three (3) way confidentiality agreement in a form reasonably acceptable to SPONSOR. Notwithstanding any of the foregoing, SUPPLIER shall remain solely responsible for activities performed by any subcontractor(s), and the use of a subcontractor shall not relieve SUPPLIER of any obligations hereunder.  SUPPLIER, and not SPONSOR, shall be solely responsible for all financial responsibilities with regard to such subcontractor(s), including withholdings, liabilities and contributions in respect of any such subcontractor(s).
		

		
			 
		

		
			ARTICLE 16 – NOTICES
		

		
			 
		

		
			A.    All notices required or permitted to be given under this Agreement shall be in writing and shall be given by addressing the communication to the address set forth below.  Such notices shall be deemed given on the date of receipt if sent by (i) certified mail, (ii) recognized overnight courier or personal delivery, or (iii) by acknowledgement of receipt if sent by other sources:
		

		
			 
		

			
					
						SUPPLIER:

					
					
						Stephen L. Schweibenz, President

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						Alliance Contract Pharma, LLC

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						1510 Delp Drive

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						Harleysville, PA 19438

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						Email: [**]

				
	
					
						 

					
					
						 

				
	
					
						SPONSOR:

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						Kala Pharmaceuticals, Inc.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						100 Beaver Street, Suite 201

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						Waltham, MA 02453

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(781) 996-5252

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						E-mail: [**]

				
	
					
						 

					
					
						 

				
	
					
						With a copy to:

					
					
						General Counsel

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						Kala Pharmaceuticals, Inc.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						100 Beaver Street, Suite 201

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						Waltham, MA 02453

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						(781) 996-5252

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						Email not permitted; Notice to be sent pursuant to (i) or (ii) above

				

		
			 
		

		
			B.     Any Party may from time to time change the address to which notices to it are to be sent by notifying
		

		
			 
		

		
			
		

		
			

		 

		

			Page 15 of 25

		

 

		

			

		

		

		
			the other Party, in writing, of the change and the new address pursuant to this Article 16.
		

		
			 
		

		
			C.    The provisions of this Article 16 shall survive the expiration or sooner termination of this Agreement.
		

		
			 
		

		
			ARTICLE 17 – DISPUTES; GOVERNING LAW
		

		
			 
		

		
			A.   Disputes:  Initially, the Parties shall attempt to resolve any disputes informally between the persons listed in Article 17 above or their replacements or superiors. The parties agree that any and all disputes, claims or controversies arising out of or relating to this Agreement that are not resolved by their mutual agreement (a) shall be brought by a party in such party’s individual capacity, and not as a plaintiff or class member in any purported class or representative proceeding and (b) shall be submitted to final and binding arbitration before JAMS (formerly Judicial Arbitration and Mediation Services), or its successor, pursuant to the United States Arbitration Act, 9 U.S.C. Sec. 1 et seq. Either party may commence the arbitration process called for in this Section by filing a written demand for arbitration with JAMS, with a copy to the other party. The arbitration will be conducted in accordance with the provisions of JAMS’ Comprehensive Arbitration Rules and Procedures in effect at the time of filing of the demand for arbitration. The parties will cooperate with JAMS and with one another in selecting a single arbitrator from JAMS’ panel of neutrals, and in scheduling the arbitration proceedings, which shall take place in Boston, Massachusetts and in the English language. The parties agree that they will participate in the arbitration in good faith, and that they will share equally in its costs. The provisions of this Section may be enforced by any court of competent jurisdiction, and the party seeking enforcement shall be entitled to an award of all costs, fees and expenses, including attorneys’ fees, to be paid by the party against whom enforcement is ordered.
		

		
			 
		

		
			B.   Governing Law:  This Agreement shall be governed by, and construed in accordance with, the law of the State of Delaware irrespective of its choice of law rules.
		

		
			 
		

		
			C.   The provisions of this Article 17 shall survive the expiration or sooner termination of this Agreement.
		

		
			 
		

		
			ARTICLE 18 - SUPPLIER STAFFING
		

		
			 
		

		
			A.   SUPPLIER acknowledges and agrees that the configuration and competence of SUPPLIER staff assigned to SPONSOR is of critical importance to SPONSOR.  Any SUPPLIER staff assigned to SPONSOR must be trained, and competent, to perform the Services as required hereunder.
		

		
			 
		

		
			ARTICLE 19 – MISCELLANEOUS
		

		
			 
		

		
			A.    Entire Agreement:  This Agreement, together with any exhibits attached hereto, and each fully executed Project Proposal/SOW (as amended hereunder), contains the entire understanding between the Parties with respect to the subject matter hereof and supersedes all prior understandings relating thereto.  No amendment, modification or waiver of this Agreement or any term hereof may be effected except by an instrument in writing duly executed by the Parties.
		

		
			 
		

		
			B.    Independent Contractors: At all times the relationship of the Parties shall be independent contractors with respect to each other.  No Party is responsible for withholding, and shall not withhold, FICA or taxes of any kind from any payments it owes to any other Party.  Further, as independent contractors, neither Party, nor any of its employees are eligible to participate in, nor are they eligible for coverage under, any other Party’s benefit plans, programs, employment policies or procedures, or workmen’s compensation insurance.
		

		
			 
		

		
			C.    Assignment:  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.  This Agreement may only be assigned by a Party upon the prior written consent of the other Party; provided, however, that SPONSOR may assign this Agreement to an affiliate or a subsidiary or a successor to that area of its business to which this Agreement is related, whether by merger, sale of assets, sale of stock, reorganization or otherwise.
		

		
			 
		

		
			D.    Severability:  If any provision of this Agreement shall be invalid or unenforceable in any
		

		
			 
		

		
			
		

		
			

		 

		

			Page 16 of 25

		

 

		

			

		

		

		
			jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this Agreement in any other jurisdiction, and the Parties shall negotiate in good faith to modify such provision so that it is valid and enforceable to the Parties.
		

		
			 
		

		
			E.    Counterparts:  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original document, and all of which, shall be deemed one instrument. Such counterparts may be exchanged by facsimile (provided that each executed counterpart is transmitted in one complete transmission), or in Portable Document Format (PDF).  Where there is an exchange of executed counterparts by facsimile or PDF, each Party shall be bound by the Agreement notwithstanding that original copies of the Agreement may not be exchanged immediately.
		

		
			 
		

		
			F.    Excusable Delay:  If either Party shall be delayed, interrupted or prevented from the performance of any obligation hereunder by reason of an act of God, fire, flood, war (declared or undeclared), public disaster, strike or labor dispute, governmental enactment, rule or regulation, or any other cause beyond such Party’s reasonable control, such Party shall not be liable to the other and the time for performance of such obligation shall be extended for a period equal to the duration of the contingency that occasioned the delay, interruption or prevention.  In relation to any Services, if such interruption lasts more than ten (10) days, SPONSOR, in its sole discretion, may exercise its rights under Article 13 of this Agreement.
		

		
			 
		

		
			G.    Further Action.  Each Party hereto shall take, or cause to be taken, all actions, and do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations (including without limitation those regulations promulgated by the U.S. Internal Revenue Service), and execute and deliver such further documents as may be reasonably requested by the other Party in connection with the operation of this Agreement.
		

		
			 
		

		
			H.    Relationship of the Parties:  SUPPLIER has no authority from and will not authorize or bind SPONSOR to any obligation with any third party.
		

		
			 
		

		
			I.     SPONSOR Materials. SUPPLIER agrees to use reasonable care in handling the equipment, materials and other property of SPONSOR entrusted to SUPPLIER’s care or purchased with SPONSOR funds in performance of this Agreement along with all materials constituting Work Product hereunder (collectively, "SPONSOR Materials").  All SPONSOR Materials shall be and remain SPONSOR's property.  Such SPONSOR Materials shall be plainly marked or otherwise adequately identified by SUPPLIER as Sponsor's property and shall be safely stored separate and apart from SUPPLIER's property.  Unless otherwise agreed to in writing by SPONSOR on a case-by-case basis, SUPPLIER shall use SPONSOR Materials only for the benefit of SPONSOR under this Agreement and shall not use SPONSOR Materials for any other purpose.  All SPONSOR Materials, while in SUPPLIER's custody or control, shall be held at SUPPLIER's risk, shall be kept insured by SUPPLIER at SUPPLIER's expense in an amount equal to the replacement cost with loss payable to SPONSOR and shall be subject to removal at SPONSOR's written request, in which event SUPPLIER shall prepare such SPONSOR Materials for shipment and redeliver to SPONSOR in the same condition as originally received or produced by SUPPLIER, reasonable wear and tear excepted, at SPONSOR's expense (unless otherwise set forth in the applicable Project Proposal/SOW).  SUPPLIER agrees to keep the equipment constituting SPONSOR Materials at all times in good and efficient working order for use in performing the Services.  SUPPLIER shall be responsible for routine maintenance and calibration of all such equipment, but SPONSOR shall be responsible for the cost of calibration, repairing or replacing such equipment, except to the extent such repairs or replacement are required due to SUPPLIER's breach of this Agreement (including this Section) or SUPPLIER's negligence or willful misconduct.  Upon completion of the Services, termination or expiration of this Agreement SUPPLIER will, at SPONSOR’s request, return all SPONSOR Materials.
		

		
			 
		

		
			J.     Reports. SUPPLIER agrees that at SPONSOR’s request, SUPPLIER will submit reports summarizing its work performed pursuant to this Agreement.
		

		
			 
		

		
			
		

		
			

		 

		

			Page 17 of 25

		

 

		

			

		

		

		
			K.    Section Headings:  Article and section headings are intended for the purpose of description only and shall not be used for purposes of interpretation of this Agreement.
		

		
			 
		

		
			L.    Survival:  The provisions of this Article 19 shall survive the expiration or sooner termination of this Agreement.
		

		
			 
		

		
			 
		

		
			 
		

		
			IN WITNESS WHEREOF, the Parties hereto have executed this Agreement effective as of the Effective Date.
		

		
			 
		

			
					
						Kala Pharmaceuticals, Inc.

					
					
						    

					
					
						Alliance Contract Pharma, LLC

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						By:

					
					
						/s/ Vincent R. Kosewski

					
					
						 

					
					
						By:

					
					
						/s/ Stephen Schweibenz

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Name:

					
					
						Vincent R. Kosewski

					
					
						 

					
					
						Name:

					
					
						Stephen Schweibenz

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Title:

					
					
						Sr. VP Mfg & Supply

					
					
						 

					
					
						Title:

					
					
						President

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Date:

					
					
						October 10, 2017

					
					
						 

					
					
						Date:

					
					
						October 4, 2017

				

		
			 
		

		
			
		

		
			

		 

		

			Page 18 of 25

		

 

		

			

		

		

		
			Project Proposal/SOW:
		

		
			 
		

		
			The following two exhibits (Exhibit A  (Revision 03) and Exhibit C (Revision 03)) are attached to this Amended and Restated Master Service Agreement dated October 4, 2017.  Included in each of these exhibits are the following activities supporting the manufacturing and packaging of [**] packaged in [**]:
		

		
			 
		

		
			Exhibit A (Revision 03)
		

		
			 
		

		
			ACP will [**].
		

		
			 
		

		
			Exhibit B (Cancelled)
		

		
			 
		

		
			[**]
		

		
			 
		

		
			Exhibit C (Revision 03)
		

		
			 
		

		
			ACP will [**].
		

		
			 
		

		
			 
		

		
			

		 

		

			Page 19 of 25

		

 

		

			 

		

		

		
			KALA PHARMACEUTICALS, INC.
		

		
			PROJECT PROPOSAL NUMBER: Q100309
		

		
			 
		

		
			STATEMENT OF WORK
		

		
			API AND COMPONENT RELEASE TESTING / [**]
		

		
			ENGINEERING BATCH MANUFACTURING
		

		
			EXHIBIT A (Revision 03) 1
		

		
			 
		

		
			This Project Proposal/SOW is incorporated into the Amended and Restated Master Services Agreement (“Agreement”), dated October 4, 2017 by and between Alliance Contract Pharma, LLC, (“SUPPLIER” or “ACP”) and Kala Pharmaceuticals., Inc. (“SPONSOR” or “Kala”).  This Statement of Work describes Services and deliverables to be performed and provided by SUPPLIER pursuant to the Agreement.  If any item in this Project Proposal/SOW is inconsistent with the Agreement, the terms of this Project Proposal/SOW will control, but only if this Project Proposal/SOW expressly refers to the Parties’ intent to alter the terms of this Agreement with respect to the specific inconsistent item.  All capitalized terms used and not expressly defined in this Project Proposal/SOW will have the meanings given to them in the Agreement.
		

		
			 
		

		
			1  Note:  STATEMENT OF WORK - EXHIBIT A (Revision 03) supersedes the original approved version of EXHIBIT A (dated 27 Jan2017).  Reference payment terms listed on page 13 of 13.
		

		
			 
		

		
			The total cost of the project is $[**]
		

		
			 
		

		
			Confidential Materials omitted and filed separately with the Securities and Exchange Commission. A total of 12 pages were omitted. [**]
		

		
			 
		

		
			IV.        Project Logistics
		

		
			 
		

		
			1.           All shipping charges associated with this project will be at the expense of [**].
		

		
			 
		

		
			2.           Unless expressly set forth in this Project Proposal/SOW or agreed to in writing by Kala on a case-by­ case basis, ACP shall be solely responsible for all costs and expenses in connection with any construction or build-out of ACP’s facilities, including any construction or build-out necessary for ACP to perform the Services hereunder.
		

		
			 
		

		
			3.           All materials being shipped to ACP must be shipped to the following address: Alliance Contract Pharma, LLC, 1510 Delp Drive, Harleysville, PA  19438 (Reference Q100309 -  Exhibit A (Revision 03)).
		

		
			 
		

		
			4.           Unless otherwise agreed in writing signed by ACP and Kala, Services hereunder are expressly limited to the terms and conditions contained in this Project Proposal/SOW and the Agreement.
		

		
			 
		

		
			V.           Schedule of Payments
		

		
			 
		

		
			The total cost for this project is $[**].  If acceptable, please return an approved copy of this proposal along with a purchase order to initiate this project.  The remainder of the cost [**] will be invoiced based on the following payment schedule.
		

		
			 
		

			
					
						Initiation of Project (Payment Already Received)

					
					
						[**]

				

		
			 
		

		
			
		

		

		 

		

			Page 20 of 25

		

 

		

			 

		

	
					
						

					
						 

					
					
						 

				
	
					
						Pass through costs for the Sourcing of Components to be Billed Monthly [**]

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						Pass through costs for API and Excipient Release Testing to be Billed Monthly [**]

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						Release of Materials and Components [**]

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						Completion of Equipment Return and Qualification Activities [**]

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						Completion of R&D Engineering Batch [**][**]

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						Completion of R&D Engineering Batch [**][**]

					
					
						[**]

				
	
					
						

					
					
						 

				
	
					
						As requested by Kala, a change control will be issued to manufacture and perform release testing of additional R&D Engineering Batches. These additional batches will be manufactured and tested as a part of the ongoing [**] batch campaign as outlined in this quotation (additional major cleaning will not be required). This change control will also include, as required, additional costs associated with documentation or testing changes as requested by Kala.

					
					
						[**]

				

		
			 
		

		
			IN WITNESS WHEREOF, the Parties hereto have executed this Project Proposal/SOW effective as of the date last signed by a Party hereto.
		

		
			 
		

			
					
						Kala Pharmaceuticals, Inc.

					
					
						    

					
					
						Alliance Control Pharma, LLC

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						By:

					
					
						/s/ Vincent R. Kosewski

					
					
						 

					
					
						By:

					
					
						/s/ Stephen L. Schweibenz

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Name:

					
					
						Vincent R. Kosewski

					
					
						 

					
					
						Name:

					
					
						Stephen L. Schweibenz

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Title:

					
					
						Sr. VP Mfg & Supply

					
					
						 

					
					
						Title:

					
					
						President

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Date:

					
					
						October 5, 2017

					
					
						 

					
					
						Date:

					
					
						October 4, 2017

				

		
			 
		

		
			 
		

		
			
		

		
			

		 

		

			Page 21 of 25

		

 

		

			 

		

		

		
			KALA PHARMACEUTICALS, INC.
		

		
			PROJECT PROPOSAL NUMBER: Q100309
		

		
			 
		

		
			STATEMENT OF WORK
		

		
			[**] VALIDATION BATCH MANUFACTURING
		

		
			EXHIBIT C (Revision 03)1
		

		
			 
		

		
			This Project Proposal/SOW is incorporated into the Amended and Restated Master Services Agreement (“Agreement”), dated October 4, 2017, by and between Alliance Contract Pharma, LLC, (“SUPPLIER” or “ACP”) and Kala Pharmaceuticals., Inc. (“SPONSOR” or “Kala”).  This Statement of Work describes Services and deliverables to be performed and provided by SUPPLIER pursuant to the Agreement.  If any item in this Project Proposal/SOW is inconsistent with the Agreement, the terms of this Project Proposal/SOW will control, but only if this Project Proposal/SOW expressly refers to the Parties’ intent to alter the terms of this Agreement with respect to the specific inconsistent item.  All capitalized terms used and not expressly defined in this Project Proposal/SOW will have the meanings given to them in the Agreement.
		

		
			 
		

		
			This Project Proposal/SOW previous approved version included a clause stating the proposal was on hold pending the condition of positive completion of clinical trials, as determined by Kala in its sole discretion.  This revision serves as written acknowledgement by both parties to commence activities of this Exhibit C (revision 03).
		

		
			 
		

		
			1  Note:     STATEMENT OF WORK - EXHIBIT C (Revision 03) supersedes the original approved version of EXHIBIT C (dated January 27, 2017).  Reference payment terms listed on page 9 of 9.
		

		
			 
		

		
			The total cost of the project is $[**].
		

		
			 
		

		
			Confidential Materials omitted and filed separately with the Securities and Exchange Commission. A total of 10 pages were omitted. [**]
		

		
			 
		

		
			IV.         Project Logistics
		

		
			 
		

		
			All shipping charges associated with this project will be at the expense of [**].
		

		
			 
		

		
			Unless expressly set forth in this Project Proposal/SOW or agreed to in writing by Kala on a case-by-case basis, ACP shall be solely responsible for all costs and expenses in connection with any construction or build-out of ACP’s facilities, including any construction or build-out necessary for ACP to perform the Services hereunder.
		

		
			 
		

		
			All materials being shipped to ACP must be shipped to the following address: Alliance Contract Pharma, LLC, 1510 Delp Drive, Harleysville, PA 19438 (Reference Q100309).
		

		
			 
		

		
			Unless otherwise agreed in writing signed by ACP and Kala, Services hereunder are expressly limited to the terms and conditions contained in this Project Proposal/SOW and the Agreement.
		

		
			 
		

		
			
		

		
			

		 

		

			Page 22 of 25

		

 

		

			 

		

		

		
			V.           Schedule of Payments
		

		
			 
		

		
			The total cost of this project is $[**].  If acceptable, please return an approved copy of this proposal along with a purchase order number and an initial payment [**] as detailed below to initiate this project.  The remainder of the cost [**] will be invoiced based on the following payment schedule.
		

		
			 
		

			
					
						Approval of Validation Protocols

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						Completion of Manufacturing Validation Batch [**]

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						Completion of Manufacturing Validation Batch [**]

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						Completion of Manufacturing Validation Batch [**]

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						Completion of Validation Reports

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						Pass through costs for Micro Release Testing to be Billed Monthly

					
					
						[**]

				

		
			 
		

		
			IN WITNESS WHEREOF, the Parties hereto have executed this Project Proposal/SOW effective as of the date last signed by a Party hereto.
		

		
			 
		

			
					
						Kala Pharmaceuticals, Inc.

					
					
						    

					
					
						Alliance Contract Pharma, LLC

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						By:

					
					
						/s/ Vincent R. Kosewski

					
					
						 

					
					
						By:

					
					
						/s/ Stephen L. Schweibenz

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Name:

					
					
						Vincent R. Kosewski

					
					
						 

					
					
						Name:

					
					
						Stephen L. Schweibenz

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Title:

					
					
						Sr. VP Mfg & Supply

					
					
						 

					
					
						Title:

					
					
						President

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Date:

					
					
						October 5, 2017

					
					
						 

					
					
						Date:

					
					
						October 4, 2017

				

		
			 
		

		
			
		

		
			

		 

		

			Page 23 of 25

		

 

		

			 

		

		

		
			KALA PHARMACEUTICALS, INC.
		

		
			PROJECT PROPOSAL NUMBER: Q100309
		

		
			 
		

		
			STATEMENT OF WORK
		

		
			 
		

		
			GMP PACKAGING OF [**]
		

		
			[**]
		

		
			 
		

		
			EXHIBIT D (Revision 01)
		

		
			 
		

		
			This Project Proposal/SOW is incorporated into the Amended and Restated Master Services Agreement (“Agreement”), dated October 4, 2017 by and between Alliance Contract Pharma, LLC, (“SUPPLIER” or “ACP”) and Kala Pharmaceuticals., Inc. (“SPONSOR” or “Kala”).  This Statement of Work describes Services and deliverables to be performed and provided by SUPPLIER pursuant to the Agreement.  If any item in this Project Proposal/SOW is inconsistent with the Agreement, the terms of this Project Proposal/SOW will control, but only if this Project Proposal/SOW expressly refers to the Parties’ intent to alter the terms of this Agreement with respect to the specific inconsistent item.  All capitalized terms used and not expressly defined in this Project Proposal/SOW will have the meanings given to them in the Agreement.
		

		
			 
		

		
			Included in Exhibit D is the GMP packaging of the following batches of [**]:
		

		
			 
		

		
			Confidential Materials omitted and filed separately with the Securities and Exchange Commission. A total of 10 pages were omitted. [**]
		

		
			 
		

		
			IV.         Project Logistics
		

		
			 
		

		
			1.     All shipping charges associated with this project will be at the expense of [**].
		

		
			 
		

		
			2.     [**].
		

		
			 
		

		
			3.     Unless expressly set forth in this Project Proposal/SOW or agreed to in writing by Kala on a case-by­case basis, ACP shall be solely responsible for all costs and expenses in connection with any construction or build-out of ACP’s facilities, including any construction or build-out necessary for ACP to perform the Services hereunder.
		

		
			 
		

		
			4.      All materials being shipped to ACP must be shipped to the following address: Alliance Contract Pharma, LLC, 1510 Delp Drive, Harleysville, PA 19438 (Reference 0100309 – Exhibit D (Revision 00)).
		

		
			 
		

		
			5.     Unless otherwise agreed in writing signed by ACP and Kala, Services hereunder are expressly limited to the terms and conditions contained in this Project Proposal/SOW and the Agreement.
		

		
			 
		

		
			V.           Schedule of Payments
		

		
			 
		

		
			The total cost for this project is $[**].  If acceptable, please return an approved copy of this proposal along with a purchase order to initiate this project.  The remainder of the cost [**] will be invoiced based on the following payment schedule.
		

		
			 
		

		
			
		

		

		 

		

			Page 24 of 25

		

 

		

			 

		

	
					
						

					
						Initiation of Project

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						Pass through costs for the Sourcing of Components to be Billed Monthly [**]

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						Pass through costs for Excipient and Component Release Testing to be Billed Monthly [**]

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						Completion of Packaging - Campaign [**]

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						Completion of Packaging - Campaign [**]

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						Completion of Packaging - Campaign [**]

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						Completion of Packaging - Campaign [**] (the first [**] resupply batch)

					
					
						[**]

				
	
					
						 

					
					
						 

				
	
					
						The Cost for Each Additional [**] Resupply Batch ([**]/batch)
(Due upon the completion of packaging)

					
					
						[**]

				

		
			 
		

		
			IN WITNESS WHEREOF, the Parties hereto have executed this Project Proposal/SOW effective as of the date last signed by a Party hereto.
		

		
			 
		

			
					
						Kala Pharmaceuticals, Inc.

					
					
						    

					
					
						Alliance Contract Pharma, LLC

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						By:

					
					
						/s/ Vincent R. Kosewski

					
					
						 

					
					
						By:

					
					
						/s/ Dennis DiBiagio

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Name:

					
					
						Vincent R. Kosewski

					
					
						 

					
					
						Name:

					
					
						Dennis DiBiagio

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Title:

					
					
						Sr. VP Mfg & Supply

					
					
						 

					
					
						Title:

					
					
						VP, Operations

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						Date:

					
					
						Nov. 9, 2017

					
					
						 

					
					
						Date:

					
					
						November 8, 2017

				

		
			 
		

		 

		

			Page 25 of 25

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