Document:

EX-10.35

 Exhibit 10.35 
  

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

 API
MANUFACTURING AND SUPPLY AGREEMENT 
 THIS API MANUFACTURING AND SUPPLY
AGREEMENT (the “Agreement”) is entered into as of             , 2015 (the “Effective Date”) by and between Cempra
Pharmaceuticals, Inc., a company organized under the laws of Delaware, USA with a place of business at 6340 Quadrangle Drive, Suite 100, Chapel Hill, NC 27517, USA (“Cempra”), and FUJIFILM FINECHEMICALS
CO., LTD., a company organized under the laws of Japan with a place of business at 2-3, Higashiyawata 5-chome, Hiratsuka, Kanagawa 254-0016, Japan (“FFFC”). Cempra and FFFC may be referred to herein
individually as a “Party”, and collectively as the “Parties”. 
 RECITALS 

A. Cempra and FFFC’s Affiliate, Toyama Chemical Co., Ltd. (“Toyama”), are parties to an Exclusive License and
Development Agreement dated May 8, 2013 (the “Toyama License Agreement”) and a Supply Agreement dated May 8, 2013 (the “Toyama Supply Agreement”), under which Toyama obtained a license from Cempra to
develop and commercialize certain products incorporating the API (as defined below) in Japan and Cempra agreed to supply Toyama with API for development and commercial purposes. 

B. Cempra desires to engage FFFC to manufacture and supply to Cempra quantities of API for use in manufacturing solithromycin-based
drug products. 
 C. FFFC possesses or plans to build the necessary facilities, equipment, manufacturing technology, professional
expertise, personnel, and capacity to manufacture and supply such API, and desires to undertake such API manufacturing and supply for Cempra under the terms of this Agreement. 

D. The Parties intend to conduct certain activities as part of preparing for the commercial manufacture and supply of API, which may
include construction of a manufacturing plant, technology transfer, manufacture of registration lots, process development, process validation, stability studies and other pre-approval activities with respect to the manufacture of API under the terms
of this Agreement. 
 NOW, THEREFORE, the Parties hereby agree as follows: 

 

	1.	DEFINITIONS  

 The following capitalized words and
phrases when used in this Agreement shall have the meaning provided in this Section 1. 
 1.1 “Acceptance
Tests” means the specific tests to be used to determine whether API manufactured by FFFC conforms to the API Specifications, which tests shall be established (and amended from time to time if required) in writing by Cempra in consultation
with FFFC. 

  
  

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 1.2 “Affiliate” means, with respect to a particular Party, any
corporation, organization, or other business entity that, directly or indirectly, controls, is controlled by, or is under common control with such Party. The term “control” (including, with correlative meaning, the terms “controlled
by” and “under common control with”), as used in this Section 1.2, means the possession of the power to direct, or cause the direction of, the management and business of the applicable corporation, organization, or other
business entity, whether through the ownership or control of voting securities (or their voting power) or by contract, or court order, or otherwise. 

1.3 “API” means the active pharmaceutical ingredient known as solithromycin as further described in Exhibit A
of this Agreement (“Solithromycin”). 
 1.4 “API Improvements” means inventions,
discoveries know-how or improvements specifically related to API or API Manufacturing Procedures (including analytical methods, manufacturing processes and packaging) that FFFC invents, develops, creates, discovers, conceives, or reduces to
practice, in connection with or arising from its activities under this Agreement. 
 1.5 “API Manufacturing Procedures”
means the specific methods, techniques, processes and standard operating procedures (including Quality Control Procedures) that are to be used by FFFC (or any of its Affiliates or subcontractors) in manufacturing the API under this Agreement in
accordance with the API Specifications. 
 1.6 “API Specifications” mean the specifications, characteristics, qualities and
labeling and packaging requirements established by Cempra in writing for API, with which API must conform (including release criteria and associated analytical methods), as such may be amended from time to time under the terms of this Agreement. The
API Specifications shall be attached to this Agreement as Exhibit B. 
 1.7 “Applicable Laws” means
collectively all laws, regulations, ordinances, decrees, judicial and administrative orders, policies and other requirements of any applicable Regulatory Authority that cover or apply to the manufacture, supply, or distribution of API for use in
human pharmaceuticals, including the FD&C Act and the regulations administered by the FDA (including 21 C.F.R. Parts 11, 210 and 211), any equivalent laws, rules, and regulations in the Territory, and the following to the extent not in conflict
with any laws or regulations that are issued or enforced by the FDA, MHLW, and other Regulatory Authorities as in effect during the provision of and applicable to API Manufacturing and other services provided by FFFC hereunder: (a) USP/NF/EP
and other applicable compendia standards; (b) guidance documents (including Guidelines, Points to Consider, Inspection Technical Guides, International Conference on Harmonization “Step 4 and 5” documents); and (c) cGMP. 

  
  

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 1.8 “Batch” means the total amount of Intermediate or API manufactured in one
particular production run conducted by FFFC (or any of its Affiliates or subcontractors) for manufacturing API. 
 1.9 “Batch
Record” means, with respect to a particular production run conducted by FFFC for manufacturing one Batch of Intermediate or API, the completed manufacturing records, in the form of an executed Master Batch Record, for such production run
containing all the relevant manufacturing details and information for the run, including quality control information and any deviations, and reviewed and approved by Quality Assurance. 

1.10 “Cempra Licensed Patents” means those Patents in the Territory listed on Exhibit C attached hereto and any
Patents in the Territory claiming priority to such Patents that are Controlled by Cempra. 
 1.11 “Certificate of Analysis”
means a written document, for example in the form set forth in Exhibit D of this Agreement, which confirms that the quantity of the API manufactured and delivered by FFFC has been tested in accordance with the applicable Acceptance
Tests and meets the API Specifications. The Certificate of Analysis will include the results of all Acceptance Tests performed by FFFC or, to the extent permitted by this Agreement, on behalf of FFFC by qualified Third Party subcontractors on the
particular Batch of API. 
 1.12 “Certificate of Compliance” means a document, in a form acceptable to Cempra, from FFFC
that approves the release of API to Cempra and certifies that the manufacturing and supply of the API has been performed in compliance with all Applicable Laws, including cGMP requirements. 

1.13 “CMC” means the Chemistry, Manufacturing and Controls sections of any Regulatory Submission (including an IND,
DMF, NDA, or equivalent of any of the foregoing in the Territory), as defined by Applicable Laws. 
 1.14
‘“Confidential Information” means all information and know-how and any tangible or intangible embodiments thereof provided by or on behalf of one Party (the “Disclosing Party”) to the other Party
(the “Receiving Party”) from time to time either in connection with the discussions and negotiations, whether in written or oral form, pertaining to this Agreement, or in the course of performing under or acting in relation to this
Agreement, which may include data, knowledge, practices, processes, ideas, research plans, formulation or manufacturing processes and techniques, scientific, manufacturing, marketing and business plans, and financial and personnel matters relating
to the Disclosing Party or to its present or future products, sales, suppliers, customers, employees, investors or business; provided, that, information or know-how of a Party will not be deemed Confidential Information of such Party for purposes of
this Agreement if such information or know-how: (a) was already known to the Receiving Party, other than under an obligation of confidentiality or non-use, at the time of disclosure to such Receiving Party, as can be shown by written records;
(b) was generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or was otherwise part of the public domain, at the time of its disclosure to such Receiving Party; (c) became
generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or otherwise became part of the public domain, after its disclosure to such 

  
  

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Receiving Party through no fault of the Receiving Party; (d) was disclosed to such Receiving Party, other than under an obligation of confidentiality or non-use, by a Third Party who had no
obligation to the Disclosing Party not to disclose such information or know-how to others, as can be shown by written records; or (e) was independently discovered or developed by such Receiving Party, as can be shown by its written records,
without the use or benefit of, or reliance on, Confidential Information of the Disclosing Party. Notwithstanding anything to the contrary, (i) all information provided to Cempra, any Affiliate thereof, or any of Cempra’s or its
Affiliates’ licensees by or on behalf of FFFC concerning API and (ii) the terms of this Agreement shall each be deemed the Confidential Information of both Parties. 

1.15 “Control” means, with respect to any intellectual property or right therein, the possession by Cempra of the ability to
enable FFFC to practice under such rights in its manufacture of API hereunder as provided for herein without violating the terms of any arrangement or agreements between Cempra (or any Affiliate thereof) and any Third Party 

1.16 “Cover” means that the use, manufacture, sale, offer for sale, development, commercialization or importation of the
subject matter in question by an unlicensed entity would infringe a Valid Claim of a Patent. 
 1.17 “Current Good Manufacturing
Practices” or “cGMP” means the then-current standards for the manufacture of pharmaceutical products, pursuant to (a) the FD&C Act; (b) relevant United States regulations in Title 21 of the United States Code
of Federal Regulations (including Parts 11, 210, and 211); (c) EC Directive 2003/94 EC of October 8, 2003; (d) the EC Guide to Good Manufacturing Practice for Medicinal Intermediate Products; (e) International Conference on
Harmonization (“ICH”) ICH Q7A Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients; (f) MHLW Ministerial Ordinance No. 179, 2004, MHW Ministerial Ordinance No. 2, 1961, and GMP Guideline for
Drugs and Quasi-Drugs (Drug Products) 2005 and (g) all additional Regulatory Authority documents or regulations that replace, amend, modify, supplant or complement any of the foregoing. 

1.18 “DMF” means a Drug Master File, as provided for in Article 80-6 of Japan’s Pharmaceutical Products and
Medical Equipment Law or similar submission to or file maintained with the MHLW or other Regulatory Authority that may be used to provide confidential detailed information about facilities, processes, or articles used in the manufacturing,
processing, packaging, and storing of one or more human drugs or APIs. 
 1.19 “Drug Product” means a finished dosage form
of human pharmaceutical product containing API as an active pharmaceutical ingredient, alone or in combination with one or more other active pharmaceutical ingredients. 

1.20 “Facility” means the specific premises of FFFC (or its Affiliates or its subcontractors) where the API is
Manufactured, as identified in Exhibit E of this Agreement. 
 1.21 “FDA” means the United States Food
and Drug Administration or any successor thereto. 
 1.22 “FD&C Act” means the United States Food, Drug and
Cosmetic Act (21 U.S.C. 321 et seq.), as amended from time to time. 

  
  

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 1.23 “FFFC Quality System” means the procedures and control documentation
that FFFC has in place at its Facility during the Term that are necessary to evidence compliance with cGMP and all ICH guidelines, as well as any other requirements necessary to Manufacture the API in compliance with all Applicable Laws (including
cGMP requirements) and the API Specifications. 
 1.24 “IND” means an investigational new drug application filed
with the MHLW, in order to commence human clinical testing of a drug. 
 1.25 “Intermediates” means any of the
compounds produced in the intermediate Manufacturing steps beginning with the initial modification of the relevant Raw Material and prior to the completion of final manufacturing steps to produce the API. 

1.26 “Losses” means any and all judgments, liabilities, losses, costs, damages and expenses (including, without
limitation, reasonable attorneys’ fees and legal and court costs) together with any related interest, fines and penalties, resulting from any Claim (as defined below). 

1.27 “Lot” means one (1) discrete quantity of API as that term is defined under Title 21 of the United States
Code of Federal Regulations §210(b)(10), specifically a batch, or a specific identified portion of a batch, having uniform character and quality within specified limits; or, in the case of a drug product produced by continuous process, it
is a specific identified amount produced in a unit of time or quantity in a manner that assures its having uniform character and quality within specified limits. 

1.28 “Manufacture” or “Manufacturing” means the steps and activities conducted to produce the API
from Raw Material and/or Intermediate in accordance with the API Manufacturing Procedures and the Master Batch Records, including obtaining all other needed raw materials and reagents, manufacturing steps and processing, packing, labeling, holding,
testing, and quality control of the API and/or Intermediates, and actions taken to comply with Applicable Laws with respect to such manufacturing activities (e.g., equipment, methods and operations). 

1.29 “Marketing Approval” means an approval by MHLW to commence commercial marketing and distribution of the Drug
Product for human therapeutic, prophylactic, or palliative use, or comparable approvals or registrations in countries or jurisdictions outside the Territory, including amendments and supplements to such approvals. 

1.30 “Master Batch Record” means a controlled document specifying the procedures to Manufacture the API or an
Intermediate as established by the Parties under Section 2.2, including all applicable API Manufacturing Procedures, the in-process testing and release testing which are to be used in the Manufacture by FFFC hereunder of API. 

1.31 “MHLW” means Japanese Ministry of Health, Labor and Welfare, or any successor thereto, including the
Pharmaceuticals and Medical Devices Agency. 
 1.32 “NDA” means a New Drug Application for Marketing Approval filed
in the United States. 

  
  

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 1.33 “Non-Conforming API” means API delivered by FFFC that does not comply with
the API Specifications, that is otherwise defective, or that otherwise does not comply with the warranties set forth in Sections 7.4 and 7.5. 

1.34 “Out of Specification” or “OOS” means failure of API to meet the API Specifications. 

1.35 “Patents” means any granted patents and pending patent applications, together with all additions, divisionals,
continuations, continuations-in-part, substitutions, reissues, re-examinations, extensions, registrations, patent term extensions, revalidations, supplementary protection certificates, and renewals of any of the foregoing, and all foreign
applications and patents corresponding to or claiming priority from any of the foregoing. 
 1.36 “Project Manager”
means the individuals designated by FFFC and Cempra, respectively, to act as managers for the manufacturing project under this Agreement as provided in Section 3.1. 

1.37 “Quality Agreement” means the document mutually agreed upon by the Parties, a copy of which shall be attached
hereto as Exhibit F, which contains the policies, procedures, and standards by which the Parties will coordinate and implement the operational and quality assurance activities needed to efficiently achieve regulatory compliance
objectives, and as such agreement may be amended from time to time by the Parties in writing. 
 1.38 “Product
Failure” means (a) as indicated in writing by Cempra to FFFC, no Drug Product will be marketed or further developed by or on behalf of Cempra, any Affiliate thereof, or any of its or their licensees in the Territory or (b) Drug
Product is taken off the market or no longer able to be marketed in the Territory by or on behalf of Cempra, any Affiliate thereof, or any of its or their licensees in the Territory for the following reasons: (i) any non-approvable or rejection
letter or withdrawal of a Marketing Approval application in the Territory or any order from Regulatory Authority withdrawing Drug Product from the market or otherwise suspending use of Drug Product in the Territory, (ii) any serious safety
problem with respect to the Drug Product, or (iii) any infringement of Patents or infringement or misappropriation of other intellectual property right arising from the manufacture, development, use, or commercialization of Drug Product or
manufacture of API hereunder, which the terminating Party in reasonably determines in good faith cannot be reasonably and promptly resolved after consultation with the other Party regarding whether the infringement or misappropriation could be cured
or remedied via a license or other settlement without material adverse affect on either Party, provided, that in the case of the circumstances described in clauses (i) and (ii), the terminating Party must reasonably determine in good faith that
the Drug Product cannot be approved, commercially sold for human therapeutic use, re-launched, or marketed in the Territory, as applicable, within six (6) months of the occurrence of the circumstances originally constituting such Product
Failure. 
 1.39 “Raw Material” means the chemicals, compounds, water, solvents, reagents and other materials and
supplies, including disposable manufacturing materials and labeling and packaging materials, used in Manufacturing. 

  
  

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 1.40 “Records” means all documents, reports, data, data listings, charts,
process control/monitoring commands and data summaries, logs, notes, standard operating procedures, Master Batch Records, lot Batch Records, analyses, correspondences, notes, memoranda, (including, without limitation, production and quality
assurance and quality control documentation) and other items containing information or data related to Manufacturing API from the Raw Material and/or Intermediate, whether in paper or electronic form, including originals and copies, and including
any other items that would be considered manufacturing “records” under any Applicable Laws. 
 1.41 “Regulatory
Approval” means any and all approvals, licenses, registrations, clearances, or authorizations of any national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity,
that are necessary for the commercial manufacture, distribution, use, and sale of a Licensed Product for human therapeutic, prophylactic, or palliative use in a particular jurisdiction, provided that Regulatory Approvals shall exclude pricing and
reimbursement approvals 
 1.42 “Regulatory Authority” means any multinational, federal, regional, state and/or
local government authority (including public, quasi-public and private bodies contracted, certified or authorized by such governmental bodies) in a country or other jurisdiction with authority to regulate, approve, license, inspect, review or
otherwise control or supervise the manufacture, sale, labeling, use, marketing, distribution, import, export, price or reimbursement for API or final Drug Product, including but not limited to the FDA, MHLW, and their counterparts in the European
Union and other countries outside the Territory. 
 1.43 “Regulatory Submission” means any document, correspondence,
data, article, certifications, or physical samples that are, or that are required to be, delivered or made available for inspection or review by any Regulatory Authority in connection with the activities carried out by either Party relating to this
Agreement, including applications, dossiers or reports supporting the manufacture, use, sale, or marketing of the API or Drug Product for investigational or commercial use, and including but not limited to any INDs, NDAs, applications for Marketing
Authorizations, field reports, annual reports, adverse event and corrective action reports, and export approvals, change being effected reports, communication (e.g., meeting packages, teleconference, written correspondence) with any Regulatory
Authorities and any amendments, supplements, corrections, and updates to any of the foregoing. 
 1.44 “Territory”
means Japan. 
 1.45 “Third Party” means any party other than FFFC, Cempra, or an Affiliate of either of the
foregoing. 
 1.46 “Transfer Price” means the price charged by FFFC for the quantities of API delivered to Cempra to
fill a Purchase Order submitted by Cempra, as provided in Section 4.1. 
 1.47 “Valid Claim” means a
claim of any pending patent application or any issued, unexpired or granted patent that has not been dedicated to the public, disclaimed, abandoned or held invalid or unenforceable by a court or other body of competent jurisdiction from which no
further appeal can be taken, and that has not been explicitly disclaimed, or admitted in writing to be invalid or unenforceable or of a scope not covering a particular product or service through reissue, disclaimer or otherwise. 

  
  

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 1.48 “Waste” means all hazardous waste, as defined by Applicable Laws,
and all non-hazardous waste to the extent, in each case, arising out of Manufacturing and other activities performed by FFFC under this Agreement, including without limitation, rejected or unusable Raw Materials, Intermediates, or API, disposable
manufacturing equipment, and materials (including solvents and other consumables). 
 1.49 Miscellaneous Interpretation Aids. 

(a) Each use in this Agreement of the term “including,” “comprising,” or “containing” (or a variant form
thereof) shall be understood to have an open, non-limiting meaning. Thus, e.g., “including” shall be interpreted as meaning “including without limitation” or “including but not limited to,” regardless of whether the
words “without limitation” or “but not limited to” actually follow the term “including.” Similarly, the terms “such as,” “for example,” and “e.g.” shall be understood as referring to
non-limiting illustrations or examples. 
 (b) “Herein,” “hereby,” “hereunder,” “hereof,” and
other equivalent words shall be understood as referring to this Agreement in its entirety, and not solely to the particular provision or portion of this Agreement in which any such word is used. 

(c) Wherever used herein, any pronoun or pronouns shall be understood to cover all genders. 

(d) All references to days, months, quarters, or years shall be understood to refer, respectively, to calendar days, calendar months,
calendar quarters, or calendar years, unless otherwise indicated. 
 (e) Any reference to a supranational, national, federal, state,
local, or foreign statute or law shall be understood to refer to the applicable version of the law or statute then in force (as it may have been amended or superseded) as well as all rules and regulations promulgated thereunder, unless the context
requires otherwise. 
 (f) All references to “dollars,” “Dollars,” “US$,” or “$” shall mean
United States dollars. 
  

	2.	MANUFACTURE AND SUPPLY OF API 

2.1 Obligation to Supply and Purchase. Pursuant to the terms of this Agreement, FFFC shall supply Cempra with, and Cempra shall
purchase, the API, for use as the active pharmaceutical ingredient in human drug product to be used or sold in the Territory, in such quantities as Cempra may order pursuant to the provisions in of Section 2.6. FFFC shall deliver API in
the quantity specified in each Purchase Order by Cempra as set forth in Section 5.4(b) and on the delivery date as specified by Cempra on such Purchase Order, or store such API as may be requested by Cempra for later delivery in
accordance with Section 5.4(b)(ii). All manufacturing and storage of API under this Agreement shall be performed at the Facility, unless otherwise agreed to in writing by Cempra. 

  
  

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 2.2 Master Batch Records. The API Manufacturing Procedures contained in the Master Batch
Records shall, except to the extent based on or reflecting methods, techniques, processes and standard operating procedures covered by Cempra Licensed Patents or Cempra’s know-how related thereto provided by Cempra to FFFC, be based upon
applicable FFFC technology, and any applicable API Improvements. The Master Batch Records shall contain such items and requirements as typical and customary in the industry for manufacturing processes applicable to similar bulk pharmaceutical
manufacturing, and shall be set forth in a written document. The API will be Manufactured to the then-current API Specifications at the time of manufacturing. If appropriate during the Term (such as, to include new API Improvements that are useful
to Manufacturing the API), the Parties will agree on appropriate amendments or modifications to the API Specifications and/or the Master Batch Record. The details of the procedure for amending the API Specifications and/or the Master Batch Records
shall be as specified in the Quality Agreement. FFFC will, at its cost, provide all documents required under the Quality Agreement or this Agreement to be provided to Cempra, in English. FFFC shall not have any obligations to disclose any
information maintained in the DMF as confidential to Cempra or any Third Parties, provided that, if (i) either Party or any Affiliate is required by Applicable Law or to satisfy any obligation thereunder, (ii) either Party or any Affiliate
thereof is requested by a Regulatory Authority, or (iii) it is reasonably necessary to satisfy any requests of any Regulatory Authority, in the case of (i), (ii) or (iii), to disclose any information maintained in the DMF as confidential,
(X) Cempra and FFFC shall promptly use reasonable efforts to, as quickly as possible, determine the reasonable plan for satisfying such requests by mutual good-faith and reasonable consultation based on the careful study of confidentiality of
such information maintained in the DMF and (Y) FFFC shall in any event be required to disclose such information if and as reasonably necessary to satisfy, or enable Cempra, any Affiliate thereof, or any licensee or sublicensee of either of the
foregoing with respect to Drug Product in the Territory to satisfy, any such requests or requirements. For clarity, in this case, such information maintained in the DMF which is disclosed hereunder shall be used and disclosed only to the extent
necessary for any such requests or requirements, and shall not be used or disclosed to any other party exceeding the scope necessary for any such requests or requirements. 

2.3 Registration Batches. Upon Cempra’s request, FFFC shall prepare registration Batches of API as needed for Cempra (or its
Affiliate or its or its Affiliates’ licensee) to seek Regulatory Approval in the Territory, in accordance with a plan therefor (and related payment provisions) to be reasonably negotiated in good faith and agreed upon in writing by the Parties
(which plan, upon such agreement in writing by the Parties, will be set forth in Exhibit G), and coordinate with Cempra on any request from any Regulatory Authority. Upon successful delivery of the registration Batches in accordance with such
plan (i.e., such Batches meet the API Specifications and are manufactured in a way that they meet the criteria for registration Batches), Cempra shall pay FFFC for the delivery of such Batches in accordance with the payment provisions to be
set forth in Exhibit G. FFFC shall work in good faith to establish, in consultation and cooperation with Cempra, and subject to Cempra’s written agreement, reasonably appropriate success criteria for the registration
Batches for API. If a particular registration Batch supplied by FFFC pursuant to this Section fails to meet such criteria, appropriate representatives from each Party shall meet and discuss and seek to determine the causes of such Batch having
failed to meet such criteria and shall cooperate diligently to try to find a solution to such causes, and FFFC shall use best efforts to rectify any such problems as soon as practicable. FFFC will replace any such failed Batches at its cost
(including paying for needed Raw Materials and the internal costs of 

  
  

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conducting the manufacturing and supply). FFFC shall recommence manufacture and supply of the required registration Batches for API as soon as possible, and shall continue until such time as FFFC
has successfully delivered to Cempra the number of consecutive Batches of API that meet the criteria that shall be set forth in Exhibit G, once agreed upon by the Parties as set forth above. Each such registration Batch supplied by FFFC shall
meet the API Specifications and shall be suitable for use to support registration stability studies. 
 2.4 Manufacturing Process
Validation. Promptly after the Parties have completed the Master Batch Records, and at Cempra’s request, FFFC will commence and conduct certain validation studies (the “Validation Studies”) to validate the API Manufacturing
Procedures pursuant to a mutually agreeable validation plan, in preparation for commercialization, to be reasonably negotiated in good faith and agreed upon in writing by the Parties (which plan, upon such agreement in writing by the Parties, will
be set forth in Exhibit H). The actual detailed protocols for such Validation Studies shall be established by the FFFC, in consultation with, and subject to the written agreement of, Cempra, with FFFC preparing the initial proposed protocols
for review and comment by Cempra and written approval by Cempra. FFFC shall disclose to Cempra in written reports all results of such Validation Studies and all other deliverables as required under the mutually-agreed upon plan for such Validation
Studies. Notwithstanding the foregoing, unless otherwise agreed by FFFC, such protocols for the Validation Studies and such reports shall not contain any information of FFFC included as confidential in the DMF maintained by FFFC under this
Agreement. Cempra shall pay FFFC as provided in the form of Exhibit H to be agreed upon for FFFC’s conduct of the Validation Studies. In the event that the Validation Studies are not successfully completed (i.e., they do not satisfy the
predefined acceptance criteria in the validation protocol and related site SOPs), FFFC shall work cooperatively with Cempra using commercially diligent efforts to determine the cause of the failure, and shall work diligently and, as soon as
possible, implement such changes in the Facility or as otherwise needed to assure that the Validation Studies are successfully completed. Each such validation Batch supplied by FFFC shall meet the API Specifications and shall be suitable for human
clinical trial use and/or commercial use in humans, as applicable. FFFC shall use reasonable efforts to work in good faith with Cempra to obtain appropriate Marketing Approvals as needed. 

2.5 Stability Studies and Report. To the extent requested by Cempra in writing, FFFC shall conduct stability studies on the API
manufactured by FFFC hereunder, in accordance with stability study protocols customary, reasonable, and typical for pharmaceutical manufacturing (e.g., ICH) to be negotiated in good faith and agreed upon by the Parties as soon as reasonably possible
following the Effective Date, and which, upon mutual written agreement thereon by the Parties, shall be set forth on Exhibit I hereto. FFFC shall prepare and deliver to Cempra written reports setting forth the results of the studies, such
reports to be in the form and at the time points described in such agreed protocols. 

  
  

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 2.6 Forecasts; Purchase Orders; Minimum Purchase Requirement.  

(a) No later than the eighth (8th) day of each calendar month following the
Effective Date, Cempra shall provide to FFFC a rolling forecast (each, a “Forecast”) of its anticipated orders for API to be placed during each of the [*] through (and including) the [*] calendar month (or, if earlier, the final
calendar month of the Term) following the calendar month in which such forecast is provided. In each Forecast submitted by Cempra, the forecast for the first [*] months covered by the Forecast shall be binding on the Parties (pursuant to Purchase
Orders placed under subsection (b) below), and the forecast for the last [*] months covered by each Forecast shall be non-binding on both Parties, not subject to any forecasting restrictions, provided that the quantity of API specified for any
month in the nonbinding portion of any revised Forecast shall not (i) exceed [*] percent ([*]%), or be less than [*] percent ([*]%), of the quantity of API provided for such month in the initial Forecast including a forecast quantity of API for
such month nor (ii) exceed [*] percent ([*]%), or be less than [*] percent ([*]%), of that quantity of API provided for such month in the most recent previous Forecast. FFFC shall notify Cempra in writing within three (3) business days of
FFFC’s receipt of any Forecast if the quantities of API indicated in the non-binding portion thereof exceed FFFC’s production capacity therefor. Should Cempra wish to increase order quantities at any time in excess of the volumes permitted
under this Section 2.6(a) or Section 2.6(b), Cempra may contact FFFC to request and FFFC shall use commercially reasonable efforts to supply any such increase in volumes. 

 

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

  
  

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 (b) Cempra shall have the right to place binding written purchase orders (each a
“Purchase Order”) from time to time under and subject to the conditions regarding a Forecast set forth in Section 2.6(a), provided that, with respect to the first [*] Purchase Orders placed hereunder, Cempra may, at its option,
place its Purchase Orders for API no less than [*] months in advance of the desired delivery date(s) (or, as contemplated by Section 5.4(b)(ii), storage date) therefor. Except as described above with respect to the first [*] Purchase Orders
placed hereunder, Cempra shall issue each Purchase Order to FFFC no later than [*] calendar month preceding the date on which Cempra has requested FFFC to first deliver (or make available for storage pursuant to Section 5.4(b)(ii)) API pursuant
to each such Purchase Order. Each Purchase Order shall specify the API to be supplied during the period from the [*] business day of the following calendar month to the end of the [*] calendar month of the period for which the Purchase Order is
placed (corresponding to the binding portion of each Forecast). Such Purchase Order shall specify order quantity(ies), delivery (and/or storage) date(s), and other necessary matters. FFFC shall be obligated to supply to Cempra the amount of API as
Cempra orders hereunder, which shall not be less than [*] ([*]%), nor more than [*] percent ([*]%), of the forecasted quantity for the applicable forecast period in the most recent Forecast, and will use commercially reasonable efforts to supply any
additional quantities ordered by Cempra. Not later than five (5) days after receipt of a binding Purchase Order, FFFC will confirm in writing its receipt of the Purchase Order (“Order Acceptance”), and FFFC shall fulfill each
Purchase Order. If there is any conflict between the Purchase Order or an Order Acceptance and the terms of this Agreement, this Agreement prevails and such conflicting terms are rejected and of no effect, unless the Parties mutually agree otherwise
in writing. From time to time, due to significant unforeseen circumstances, Cempra may deliver to FFFC a Purchase Order for volumes of API in excess of those specified in the binding portion of any Forecast and, upon Cempra’s written request,
FFFC shall use commercially reasonable efforts to provide Cempra with such excess API volumes; provided, however, that if FFFC is required to spend an additional unforeseen material expense, in excess of its typical expenses to supply API hereunder,
in order to provide Cempra with such excess API volumes, (i) FFFC shall notify Cempra as soon as possible of the amount of such additional expense, (ii) Cempra shall have ten (10) business days following such notice within which to
accept such additional expense in writing, and (iii) if Cempra does accept such additional expense in writing within such ten (10) business day period, Cempra shall be obligated to bear such expense upon and FFFC shall be obligated to
supply such excess API volumes triggering such expense. If Cempra rejects such additional expense in writing, or otherwise does not accept such additional expense, within such ten (10) business day period, Cempra shall have no obligation to
bear any such additional expense with respect to any excess API volume and FFFC shall not have any obligation to supply any such excess API volume. 

(c) FFFC, on at least a quarterly basis, shall provide Cempra with a written schedule of all then-outstanding accepted Purchase Orders
for API, including the status of manufacturing work in progress and expected delivery date(s). 
  

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

  
  

12 

 (d) Cempra agrees that, for each of the first [*] Month Periods (as defined below) during
the Term, Cempra shall be obligated to place Purchase Orders for the purchase of not less than [*] kilograms ([*] kg) of API in total per Month Period (i.e., such minimum purchase obligation shall apply during each of the first [*] Month Periods,
and so Cempra’s minimum purchase obligation of this Agreement shall be its purchase of not less than [*] kilograms ([*] kg) of API in total during such first [*] Month Periods), provided that, notwithstanding the foregoing: 

(i) such obligation shall not apply to the Month Period during which this Agreement terminates or expires unless such termination or
expiration occurs on the last day of such Month Period; and 
 (ii) the requirement above shall not apply to a Month Period during
which a Supply Failure occurs or the Month Period following such Supply Failure. 
 For purposes of clarity, the minimum purchase
requirement set forth in this Section 2.6(d) shall, subject to clause (i) and (ii) above, only apply for up to the first (1st) [*] Month Periods as described above, and
Cempra’s breach of such minimum purchase requirement shall be construed as a material breach enabling termination of this Agreement by FFFC as set forth in Section 10.2 (b). “Month Period” means (y) the twelve
(12) consecutive complete calendar month period, following (a) successful completion of the Validation Studies pursuant to Section 2.4 and (b) written notice from FFFC that the Facility is completed and capable of Manufacturing
[*] kg in the course of a twelve (12) consecutive month period, beginning with (and including) the first calendar month during which API is delivered, in accordance with a Purchase Order placed pursuant to Section 2.6(b), for use in the
manufacture of Drug Product for commercial sale for human therapeutic use in Japan following Regulatory Approval of such Drug Product in Japan and (z) each subsequent twelve (12) consecutive calendar month period following the initial
Month Period. Except to the extent otherwise agreed to in a separate written agreement between the Parties that shall not affect the terms of this Agreement, the Parties agree that FFFC shall not deliver any such API, pursuant to any Purchase Order
placed by Cempra, prior to such initial delivery contemplated in clause (y) of the preceding sentence (i.e., prior to the first month of the first Month Period). 

2.7 Use of Affiliates or Subcontractors. FFFC shall have the right to fulfill its supply obligations hereunder through the engagement
of any of its Affiliates or subcontractors, provided that the engagement of any such Affiliates or subcontractor shall be subject to the prior written approval of Cempra (such approval shall not be unreasonably withheld by Cempra). FFFC shall ensure
that any Affiliate or subcontractor performing any obligations of FFFC hereunder agrees to be bound by the terms and conditions of this Agreement pertaining to the manufacture and supply of the API as if it is a party to this Agreement. FFFC shall
remain fully responsible for its obligations under this Agreement, and the acts and omissions of its Affiliates and subcontractors with respect to this Agreement (as if such acts and omissions were those of FFFC hereunder), regardless of whether
such obligations are performed by FFFC itself or through such Affiliate or subcontractor. 
  

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

  
  

13 

 2.8 Raw Materials and Equipment. FFFC shall procure, at its own cost, all Raw Materials
needed for Manufacturing the API ordered under this Agreement, provided that, if and as requested by Cempra, FFFC shall use reasonable efforts to consult in good faith with Cempra regarding the manner in which, and the Third Parties from which, any
critical Raw Materials (e.g., clarithromycin) may be procured. FFFC shall conduct further audits of such Third Party vendors as needed or as reasonably requested by Cempra. FFFC shall be responsible for ensuring that the Raw Materials procured by
FFFC in accordance with this Section 2.8 meet the quality requirements as set forth in the Quality Agreement. FFFC shall be responsible for procuring at its cost all equipment, personnel and other resources needed for Manufacturing
and/or storing, as applicable, API ordered under this Agreement. FFFC shall be responsible for allocating appropriate space in the Facility, and for obtaining, installing and maintaining in such Facility all capital equipment, as needed to
manufacture and/or store, as applicable, the amounts of API as ordered by Cempra in compliance with the terms of this Agreement. FFFC shall allocate sufficient time, effort, equipment and facilities to the program for manufacturing API, and shall
dedicate and use personnel with sufficient skills and experience as are required to accomplish the manufacturing tasks, so as to manufacture and deliver API on a timely basis and in accordance with the terms of this Agreement. FFFC shall conduct its
Manufacturing efforts and perform all of its other obligations under this Agreement in compliance with all Applicable Laws. 
 2.9
Labeling and Packaging. FFFC shall label and package API to be supplied in accordance with the API Manufacturing Procedures, API Specifications (or other labeling and packaging specifications provided by Cempra), the Quality Agreement, and
Applicable Laws, in each case that are applicable to active pharmaceutical ingredients for human use for shipment in bulk to Cempra or to one or more locations (e.g., manufacturing sites, distribution centers) designated by Cempra. 

2.10 Title to API. Title to all API shall remain with FFFC until it is delivered pursuant to Section 5.4 or stored on
behalf of Cempra pursuant to Section 5.4(b)(ii). FFFC shall keep all Raw Material, Intermediates, and API stored in accordance with the API Specifications and Applicable Laws. FFFC shall bear the risk of loss, contamination or damage to
the Raw Material, Intermediates, and API in its possession (including during such time as FFFC may be storing API on behalf of Cempra pursuant to Section 5.4(b)(ii)), until the finished API is actually delivered to Cempra or its designee
pursuant to Section 5.4, and FFFC will pay the actual costs of replacing any Raw Material that is lost or damaged while in FFFC’s possession due storage or handling problems or losses or failures in Manufacturing or storage;
provided, however, that in case that FFFC delivers API pursuant to Section 5.4 and enable Cempra to receive the same but Cempra fails to pickup, the risk of loss, contamination or damage to the Raw Material, Intermediates, and API shall
pass to Cempra at the time of such delivery, except to the extent otherwise set forth in this Agreement, including but not limited to Section 5.4 hereof. 

  
  

14 

 2.11 Limitation on Use; Supply for Outside the Territory. Cempra shall use reasonable
efforts to ensure that API supplied hereunder is only used for the manufacture of Drug Product for use or sale in the Territory (or purposes related thereto). If Cempra desires FFFC to supply Cempra with API for use in manufacturing Drug Product for
use or sale outside the Territory (within FFFC’s reasonable production capacity), the Parties shall, upon written notice from Cempra to FFFC, use reasonable efforts to negotiate in good faith an agreement, or amendment to this Agreement,
providing for such supply on commercially reasonable terms. 
  

	3.	PROJECT MANAGEMENT 

 3.1 Project Managers. Each
Party shall designate a representative (the “Project Manager” of such Party) with proper experience and authority as to technical matters to serve as the primary contact with the other Party regarding the Parties’ manufacturing
and supply relationship for API under this Agreement. Each Project Manager shall be responsible for obtaining cooperation and input from other individuals within such Project Manager’s organization whose expertise and ability may be required
from time to time to maximize the potential for successful relationship under this Agreement. The Project Managers shall develop procedures to optimize communication and collaboration between the Parties. The Project Managers will communicate
regularly during the Term at mutually agreeable times, and, when necessary, hold meetings at mutually agreeable places, to review project management and status. The Project Managers shall use good faith, reasonable efforts to facilitate
communication and collaboration between the Parties, but neither Project Manager shall have the ability or authority to modify the terms of this Agreement, to bind either Party, or to waive any rights or obligations of a Party. 

3.2 Monthly Progress & Budget Reports. Each calendar month (or on such other regular period as agreed by the Parties), FFFC
shall provide Cempra with a status report on completion of outstanding obligations (e.g., production runs, process development, validation, stability data, Regulatory Submissions, and pending corrective actions). The status report shall
indicate FFFC’s progress toward task or delivery milestones relative to planned completion schedules. 
 3.3 Adverse
Issues & Corrective Actions. FFFC shall inform Cempra promptly in writing of any events that might materially affect the ability of FFFC to timely and fully perform and/or deliver API ordered by Cempra under this Agreement, or otherwise
affect the established schedule, including any unexpected adverse final or interim results or data from validation, stability or other studies. The status report also shall fully describe all Out of Specification (“OOS”) and out of
trend events, failure investigations, process deviations, Batch failures and similar matters, as well as the corrective or other actions to be taken by FFFC. FFFC shall conduct periodic review of production records, on at least an annual basis,
including trend analysis of Batch production records and other process data, and prepare a report for submission to Cempra summarizing FFFC’s findings, conclusions and recommendations. FFFC shall be responsible for ensuring that the adverse
issues and corrective actions undertaken with respect thereto by FFFC in accordance with this Section 3.3 meet the quality requirements as set forth in the Quality Agreement. 

  
  

15 

	4.	TRANSFER PRICES, INVOICING & PAYMENT 

4.1 Transfer Prices. The Transfer Price for a particular shipment of API that is manufactured and supplied to Cempra by FFFC under this
Agreement shall be equal to the total number of kilograms in such shipment, multiplied by the per-kilogram Transfer Price as set forth in the transfer price schedule and further otherwise determined as set forth on Exhibit J. Without
any delay after the end of each Month Period, FFFC shall send Cempra a written report stating the Forecast-Based Price for such Month Period (or, if adjusted by mutual agreement of the Parties as contemplated by Exhibit J, the applicable
Forecast-Based Prices for such Month Period and the volumes of API to which such Forecast-Based Prices applied) and the Final Price for such Month Period, and including a detailed calculation thereof. If the total amount that would have been owed or
paid to FFFC for all API delivered during a particular Month Period meeting the API Specifications and accepted by Cempra in accordance with this Agreement (such Month Period’s “Accepted API”) had the Final Price been
applicable thereto exceeds the total amount owed or paid to FFFC for all of such Month Period’s Accepted API based on the applicable Forecast-Based Price(s) therefor, then FFFC shall send Cempra an invoice for the amount of such excess and,
within [*] days following Cempra’s receipt of such invoice, Cempra shall pay FFFC an amount equal to such excess. If the total amount owed or paid to FFFC for all of a particular Month Period’s Accepted API based on the applicable
Forecast-Based Price(s) therefor exceeds the total amount that would have been owed or paid to FFFC for all of such Month Period’s Accepted API had the Final Price been applicable thereto, then FFFC shall pay Cempra an amount, or credit Cempra
an amount against outstanding invoices or future amounts due under this Agreement, as elected in writing by Cempra in its sole discretion (with such payment to be made within [*] days, and such credit to become immediately effective, following such
election by Cempra), equal to, in either case, such excess. 
 4.2 Payments. Subject to any additional payments required of, or
credits granted to Cempra under, Section 4.1, FFFC shall be paid for API meeting the API Specifications delivered and accepted in accordance with this Agreement within [*] days of receipt by Cempra of the applicable invoice setting forth
the total Transfer Price applicable to such delivered API, as provided in Section 4.1. Subject to Section 5.5, payment of all undisputed invoices shall be delivered by wire transfer in US Dollars to the account provided in
Exhibit J. Payment shall be considered received once funds become available to FFFC, or FFFC’s agent, at its bank account. In the case one invoice is in dispute, its payment shall not affect settlement of other outstanding and due
invoices. 
  

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

  
  

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 4.3 Access to Funds Received for Cempra’s Sale of API. Cempra and FFFC
shall use reasonable efforts to work in good faith to establish, on commercially reasonable and customary terms of a separate agreement to be negotiated by the Parties and an internationally-recognized bank reasonably acceptable to both parties, a
bank account in Cempra’s name and owned by Cempra into which Cempra will deposit payments received by Cempra from Toyama or other licensees or distributors of Cempra who commercialize Drug Products in the Territory, if any, for Toyama’s or
such licensee’s or distributor’s purchases of API, acquired by Cempra from FFFC under this Agreement, sold to Toyama or such licensee or distributor by Cempra, and from which FFFC shall be entitled to withdraw the amount due FFFC for such
API under this Agreement, and for which Toyama or such licensee or distributor has already paid Cempra, upon presentment to Cempra and the applicable bank of invoices therefor properly sent in accordance with this Agreement; provided, however, that
Cempra shall use reasonable efforts to maintain and keep up the level of the amount of deposit in such bank account reasonably sufficient for the payments to FFFC of undisputed amounts due under Section 4.2 of this Agreement. 

4.4 No Liens. FFFC shall ensure that all API ordered by Cempra is delivered free of any liens, claims, or encumbrances, with good and
marketable title. 
  

	5.	QUALITY CONTROL, DELIVERY AND ACCEPTANCE 

5.1 Quality Control. FFFC shall maintain and follow a quality control and quality assurance testing program consistent with the API
Specifications, cGMP, the Quality Agreement, and all other requirements of Applicable Laws and consistent with industry standards (the “Quality Control Procedures”), which shall include performing the applicable Acceptance Tests on
each Batch of API. FFFC shall ensure that all API supplied to Cempra hereunder shall be manufactured in accordance with the API Manufacturing Procedures, cGMP, the Quality Agreement, and all other Applicable Laws, and all other applicable
requirements of Regulatory Authorities, (collectively, “Regulatory Standards”) and shall comply with the API Specifications. FFFC shall promptly notify Cempra of any deviation from API Manufacturing Procedures or the Regulatory
Standards that occurs during any Batch process or Manufacturing or any Batch failure, including the details and causes thereof, to meet the quality requirements as set forth in the Quality Agreement. 

5.2 Certificates. FFFC shall provide to Cempra, accompanying each delivery of API: (a) the Batch number and Purchase Order number
of the delivered API, (b) a completed and accurate Certificate of Analysis as to such Batch, and, upon Cempra’s request, copies of the analytical data used to generate such Certificate of Analysis, and (c) copies of all other
documentation required for API release. Cempra or its Affiliate or designee may, but shall not be obligated to, test each amount of API delivered to confirm that it meets the API Specifications, that the assigned expiry/retest aligns with agreed
upon period, and that the API otherwise complies with the terms of this Agreement. 
 5.3 Quality Audits. FFFC shall maintain all
quality control documentation and Acceptance Test results for each Batch of API for a period and in a manner consistent with Regulatory Standards, the Quality Agreement, and pharmaceutical industry standards. Cempra, its Affiliates, and any
designees or licensees of Cempra or any Affiliate thereof may, from time-to-time, and at any time, periodically review, upon reasonable prior notice, such 

  
  

17 

 
documentation and results, and shall have the right, from time-to-time, and at any time, to audit, survey, verify the adherence of FFFC to the Quality Control Procedures and Regulatory Standards.
In addition to the above and to Cempra representatives provided for in Section 8.13, and upon reasonable prior written notice to FFFC, Cempra, its Affiliates, and any designees or licensees of Cempra or any Affiliate thereof shall have
the right, from time-to-time, and at any time, to have its representatives visit the Facility to audit or inspect the aspects of the Facility related to Manufacturing (including testing) of API and to discuss quality issues and any related issues
with FFFC’s manufacturing and management personnel as relating to Manufacture of API. Except to the extent otherwise set forth in this Agreement, such audits or inspections shall not be limited in number or frequency, occur during regular
business hours, and meet the quality requirements as set forth in the Quality Agreement. Audit report responses shall be provided as agreed upon by the Parties, and the Parties shall each use reasonable efforts in good faith to ensure completion of
the action items. Follow up visits may, as reasonably determined by Cempra, be needed to confirm completion of action items and, in such cases, FFFC shall permit such visits and reasonable times upon reasonable notice. For critical observations,
Cempra shall be permitted to assess impact to any product or filing documentation. 
 5.4 Delivery of API. 

(a) Release Testing. FFFC shall be responsible for analyzing each API lot for compliance with the API Specifications and for
conducting all testing required prior to the release of any API for shipment as provided in this Section 5.4. FFFC shall send to Cempra a Certificate of Analysis and a Certificate of Compliance prior to or concurrent with each shipment
of API. FFFC shall retain all Records necessary to fulfill the requirements established by cGMP and all other Applicable Laws. Prior to changing its testing methods, FFFC shall inform Cempra of such changes in writing and obtain Cempra’s
written approval, including as set forth in the Quality Agreement. 
 (b) Shipment, Storage, and Delivery. 

(i) Each amount of API to be delivered to Cempra shall be delivered by FFFC EXW (Incoterms 2010) at the Facility to Cempra’s
designated carrier or shipper for shipping to Cempra’s, its Affiliate’s, or its or its Affiliates’ licensee’s designated manufacturing or storage facility, or to such other location as specified by Cempra. Cempra shall arrange
for such shipping. FFFC shall be responsible for delivering the properly-packaged API to Cempra’s designated carrier or shipper. Deliveries of API under this Agreement (including the date on which API, initially being stored on behalf of Cempra
pursuant to Section 5.4(b)(ii) following manufacture, shall be made available for shipment, as requested by Cempra) shall not vary by more than five (5) calendar days from the specified delivery date set forth in the applicable
Purchase Order (or such later date as may be requested by Cempra for pick-up following storage of API on behalf of Cempra pursuant to subsection (ii) below) (i.e., may be between five (5) calendar days before the specified delivery date
and five (5) calendar days after the specified delivery date). Such variance in actual date of delivery shall not constitute a breach of contract by FFFC. All risks of loss and all normal transport costs that occur after proper delivery by FFFC
to the carrier or shipper shall be borne by Cempra. API shall be shipped in accordance with the shipping conditions and procedures established by this Agreement and written agreement of the Parties. Each lot of API shall be accompanied by all
required shipping documentation including the Certificates of Analysis and Certificate of Compliance. 

  
  

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 (ii) Notwithstanding anything to the contrary, if Cempra notifies FFFC in writing, in
conjunction with, as part of, or following the placement of, a particular Purchase Order that Cempra’s designated carrier will not be picking up all API ordered under such Purchase Order on the initial date on which the relevant API will be
ready for delivery and requests storage thereof by FFFC, FFFC shall, with respect to such portion of any Purchase Order, store such API at the Facility in accordance Applicable Laws, the API Specifications, and cGMP, until such date as Cempra
requests that such API be delivered EXW (Incoterms 2010) at the Facility to Cempra’s designated carrier or shipper for shipping pursuant to Section 5.4(b)(i). The reasonable, documented, direct cost incurred in connection with
FFFC’s storing of such API under this Section 5.4(b)(ii) shall be borne by FFFC for the first month’s storage of each delivery of API following the initial delivery date thereof, and by Cempra for all periods thereafter;
provided, however, that, notwithstanding the foregoing, such reasonable, documented, direct cost incurred in connection with FFFC’s storing of such API for all periods prior to the end of the second (2nd) Month Period shall in any event be borne by FFFC. In the event of such a notice and/or request by Cempra, Cempra shall be required to pay for such API as if it had been so delivered on the
original intended delivery date therefor, and title to such API shall pass to Cempra upon such date, and risk of loss with respect to such API (and the obligation to insure against such loss) shall also pass to Cempra on such date, except to the
extent that such loss of such API occurring during such period when FFFC stores such API at a Facility hereunder results from FFFC’s negligence, intentional misconduct, breach of this Agreement, or failure to comply with Applicable Laws, the
applicable standards (which shall in any event include, but not be limited to, cGMP), or the applicable storage conditions for such API, which risks of loss shall be borne by FFFC. The Parties agree that any API that is stored in accordance with the
foregoing pursuant to Cempra’s request or notice shall be included in determining the applicable Transfer Price. 
 5.5
Acceptance/Rejection. Cempra (or its authorized representative or designee (which may include any of its Affiliates or its or its Affiliates’ licensees)) will inspect all deliveries of API (which, for API stored on Cempra’s behalf
under Section 5.4(b)(ii), shall mean delivery following such storage, not at the time of storage) and Cempra will report to FFFC any Non-Conforming API that is reasonably discoverable by reasonable visible inspection within forty-five
(45) days of receipt by Cempra, its Affiliate, its or its Affiliate’s licensee, or any of the foregoing’s designated manufacturer of Drug Product. If any API is found to be Non-Conforming API, then FFFC shall, at Cempra’s request
and solely at its option (to be exercised by Cempra promptly), either: (a) replace said Non-Conforming API as soon as practically possible at no charge to Cempra and pay all round-trip shipping charges to and from the destination of the
original shipment, (b) refund to Cempra the purchase price paid to FFFC for the Non-Conforming API, or (c) credit Cempra’s account in an amount equal to the purchase price paid for said Non-Conforming API. FFFC shall reimburse Cempra
for the reasonable costs incurred by Cempra in properly disposing of any such Non-Conforming API. Any notice given hereunder shall specify the reason why such API was found to be Non-Conforming API. If Cempra does not report any defect or
non-conformity of any API within forty-five (45) days of receipt by Cempra, then Cempra shall be deemed to have accepted such API, provided that, notwithstanding anything to the contrary, (a) Cempra shall have the right to rely on the data
provided by FFFC in the Certificate of Analysis and the Certificate of Compliance for such inspection, and shall have the right to reject 

  
  

19 

 
such shipment at a later time for any inaccuracy in the Certificate of Analysis or Certificate of Compliance, and (b) if there is any latent defect that is not reasonably discoverable upon
reasonable visual inspection in accordance with customary and reasonable procedures that causes such API to be Non-Confirming API, then Cempra may reject such Non-Conforming API within ten (10) business days of Cempra becoming aware of such
latent defect. 
 5.6 Dispute Regarding Rejection. If the Parties disagree as to whether a particular delivery of API contains
Non-Conforming API, an independent and mutually acceptable independent, neutral Third Party arbitrator will be appointed to (a) review data that are in question and/or (b) to oversee the evaluation and testing of a sample of such
purportedly Non-Conforming API at an independent, neutral referee laboratory. Such referee laboratory will conduct testing in accordance with the methods established for testing as set forth in the API Specifications. The costs of the referee
testing will be charged to the Party whose position in the dispute was not supported by the referee’s findings. FFFC, if at fault, shall be solely responsible for the prompt replacement of all amounts of Non-Conforming API, or at Cempra’s
election, FFFC shall refund the amounts paid or incurred by Cempra on account of the delivery of such Non-Conforming API (if previously paid for). 
  

	6.	SUPPLY ASSURANCES 

 6.1 Production Site
and Commercial Capacity Assurance. All Manufacturing of API (including all testing, filing and packaging activities) shall occur at the Facility, except as otherwise approved by Cempra in writing. No Manufacturing work shall be subcontracted to
or performed by any Affiliate of FFFC or Third Party except with Cempra’s prior written approval (however, such approval shall not be unreasonably withheld by Cempra). If Cempra approves of any subcontracted Manufacturing or Manufacturing by an
Affiliate of FFFC, FFFC shall be and remain fully responsible for the work of the subcontractor or Affiliate as if it was performed by FFFC directly. 

6.2 Change Control. Without Cempra’s prior written consent, FFFC shall make no change to any part of the API manufacturing
process, including: (i) the API Manufacturing Procedures; (ii) any validated analytical methods used to test critical Raw Materials, Intermediates, or the API; (iii) any Regulatory Submission (including but not limited to any DMF)
made by FFFC for the API product; (iv) the Master Batch Records; and (v) Batch records or other process documentation. In the event a change is requested and approved by Cempra in writing, FFFC will continue to Manufacture the API in
accordance with the previously-applicable process changes pending the completion of process changes that require such changes. The implementation of changes shall be subject to Cempra’s prior written authorization. Where changes are implemented
that reduce costs in the manufacturing process, the Parties will reduce the Transfer Price in an amount proportional to Cempra’s contributions to such changes. The API Specifications shall not be modified or revised except by the procedures are
set forth below. 
 (a) Notice. A Party proposing a change to the API Specifications or the API Manufacturing Procedures shall
provide reasonable advance written notice to the other Party, including as necessary to enable, in the case of Cempra in furtherance of its obligations under the any supply agreement between Cempra and any purchaser from Cempra (including Toyama)
regarding Drug Products, Cempra to notify such purchaser thereof and, thereby, enable such 

  
  

20 

 
purchaser to notify and, if necessary, obtain approval of the relevant Regulatory Authority(ies) in the Territory. If the proposed change is required by a Regulatory Authority, then such notice
shall include complete and full disclosure of the Regulatory Authority’s request and relevant correspondence, if any. Cempra, its Affiliates, its or their licensees, and any designees of any of the foregoing shall have the opportunity to
directly participate in any dialogue FFFC has with the Regulatory Authority regarding the proposed change. If and as requested in writing by Cempra, FFFC will participate in any dialogue Cempra, any Affiliate thereof, or any licensee of Cempra or
any Affiliate thereof has with the Regulatory Authority regarding the proposed change. If the change is proposed by Cempra or is required by a Regulatory Authority, then within thirty (30) days of such notice, FFFC shall notify Cempra in
writing whether and the extent to which FFFC’s direct cost of Manufacturing and, therefore the Transfer Price, will increase or decrease if the proposed revision is implemented. Any proposed increase or decrease in FFFC’s Transfer Prices
shall be supported by documentation, in a form and content satisfactory to, and subject to verification by, Cempra. If Cempra rejects any proposed price increase, the Parties agree to negotiate in good faith a mutually acceptable increase or
decrease to the Transfer Prices based on the proposed change and its impact on Manufacturing Costs. If Cempra adopts the proposed API Specifications or API Manufacturing Procedures revision, the Transfer Prices for the API will be adjusted as per
such agreement, upon the implementation of such revisions or as otherwise agreed by the Parties. Notwithstanding anything to the contrary, any changes API Specifications mandated by a Regulatory Authority shall be implemented (and Exhibit B
correspondingly amended) by FFFC as soon as reasonably possible upon, and in accordance with, Cempra’s written request, subject only to Cempra’s written agreement to any price increases demanded by FFFC in amounts equal to the extent of
any increase in FFFC’s Manufacturing Costs directly caused by such changes to API Specifications. 
 (b) Feasibility
Determination. If Cempra, in consultation with FFFC, determines that FFFC cannot implement the proposed revision to the API Specifications or API Manufacturing Procedures in a cost-effective manner, it may withdraw the proposed revision. If the
revision is required by a Regulatory Authority, however, then the Parties shall discuss in good faith to implement such revisions in a cost-effective manner upon mutual agreement of the Parties with respect thereto. 

(c) Implementation Plan. Before implementing any agreed revision to the API Specifications or API Manufacturing Procedures, the
Project Managers shall, if needed, develop and agree on a reasonable and appropriate implementation plan, which sets forth the specific procedures to be used in preparing for and implementing such change to the API Specifications and/or API
Manufacturing Procedures. 
 (d) Regulatory Submissions. Cempra (or its Affiliate or its or its Affiliate’s licensee)
will, except to the extent FFFC has filed and is maintaining a DMF in the Territory with respect to the API Manufactured by or on behalf of it hereunder, be responsible for any Regulatory Submission with the MHLW and other Regulatory Authorities in
the Territory pertaining to the changes to the API Specifications and/or API Manufacturing Procedures. The Parties shall advise each other of the MHLW’s or other Regulatory Authorities’ approval and the effective date of any such changes
to such API Specifications and/or API Manufacturing Procedures. FFFC’s responsibility shall be limited to the documents it prepares in connection with any Regulatory Submissions, and FFFC shall provide Cempra with all documentations to support
such Regulatory 

  
  

21 

 
Submissions at the request of Cempra, including without limitation the right for Cempra, its Affiliates, or its or their licensees or other designees to reference FFFC’s DMF or the like
pertaining to the API. 
 6.3 Supply Failure and Right of Reference. 

(a) Supply Failure. A “Supply Failure” shall be deemed to have taken place if (i) FFFC fails to supply (by
making available to Cempra or storing at Cempra’s request, pursuant to Section 5.4(b)(ii)) at least[*] percent ([*]%) of the quantity of API ordered in any Purchase Order under this Agreement by the date(s) specified by such
Purchase Order or (ii) FFFC fails to supply (by making available to Cempra or storing at Cempra’s request, pursuant to Section 5.4(b)(ii)), in the aggregate, [*] percent ([*]%) of the total quantity of API ordered by Cempra in
any three (3) consecutive Purchase Orders. In the event of a Supply Failure, Cempra shall be entitled to, if and as elected by Cempra, (i) provide FFFC with a revised Forecast for the purchase of API which shall replace the then-existing
Forecast (including any binding portion thereof) or (ii) terminate this Agreement under Section 10.2(d). 
 (b)
Right of Reference. FFFC hereby grants Cempra and its Affiliates a sublicensable right of reference, transferable in accordance with Section 15.6, to the DMF owned or maintained by or on behalf of FFFC for the API and the
information contained therein only for the purposes of Cempra’s, Cempra’s Affiliates’, and Cempra’s and its Affiliates’ licensees’ Regulatory Submissions or other development, manufacture or commercialization of Drug
Product. 
 6.4 Exclusivity. During the Term and until the later of (a) five (5) years after termination or expiration of
this Agreement or (b) the date on which there are no remaining Valid Claims in the Patents set forth on Exhibit K or any other Patent claiming priority thereto in the Territory, FFFC will not manufacture, supply, sell or otherwise
transfer API or any other form of Solithromycin to any Third Party or Affiliate of FFFC for any purpose or enable (by technology transfer, grant of rights, or otherwise) any Affiliate of FFFC or Third Party to manufacture (or assist in the
manufacture by any of the foregoing of) API or any other form of Solithromycin, provided that these contractual limitations shall not apply following any termination of this Agreement by FFFC pursuant to Section 10.2(b) or 10.2(c)
or by FFFC or Cempra pursuant to Section 10.2(e) as a result of a Product Failure directly and primarily resulting from Cempra’s gross negligence or intentional misconduct. Cempra shall have the right to at all times maintain and/or
utilize one or more alternative or additional manufacturer(s) for the API or itself manufacture API. 
  

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

  
  

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	7.	REPRESENTATIONS, WARRANTIES, AND COVENANTS. 

7.1 Legal Authority; No Conflict. Each Party represents and warrants to the other Party that: (a) it has the legal power, authority
and right to enter into this Agreement and to perform all of its respective obligations; (b) it is in good standing under the law of the jurisdiction in which it is incorporated or in which it is engaged in business activities; (c) it has
no knowledge of any legal or other restriction, limitation, adverse financial or other conditions affecting its ability to fully perform under this Agreement; (d) that it shall not commit any act or fail to take any action that, in any
significant way, would be in conflict with its material obligations under this Agreement; and (e) that it shall comply in all material respects with Applicable Laws, and in particular those related to API Manufacturing, and with all
requirements under this Agreement. The execution and delivery of this Agreement and the performance of such Party’s obligations hereunder (i) do not conflict with or violate any requirement of applicable laws or regulations and
(ii) do not conflict with, or constitute a default or require any consent under, any contractual obligation of such Party. 
 7.2
Non-Infringement; Cempra Licensed Patents. FFFC represents and warrants to Cempra that, to FFFC’s best knowledge as of the Effective Date and thereafter during the Term, based on reasonable due diligence and investigation through the use of
patent counsel, there are no Patents owned or controlled by Third Parties Covering the Manufacture of the API in accordance with the API Manufacturing Procedures or provision of any other services to be provided by FFFC under this Agreement, other
than any Cempra Licensed Patents that may Cover the Manufacture of API or provision of other services under this Agreement. FFFC hereby agrees and covenants that neither it, any of its Affiliates, nor any of its or its Affiliates contractors will,
in the course of Manufacturing API or performing any other activities under this Agreement, (i) practice any rights, or otherwise engage in any activity, perform or use any process, method, or procedure, or use any material that is, Covered by
any Patents owned or controlled by any Third Party in Manufacturing API or otherwise performing its obligations under this Agreement, other than the Cempra Licensed Patents or Patents to which FFFC has directly obtained, independently of Cempra,
sufficient rights to enable FFFC, its Affiliates, and its and its Affiliates’ contractors to Manufacture API and perform its obligations hereunder without infringing such Patents or causing Cempra, its Affiliates, or its or its Affiliates’
licensees to infringe such Patents or (ii) engage in any other misappropriation or violation of any Third Party’s intellectual property rights (including but not limited to trade secrets). FFFC acknowledges that Cempra and/or its
Affiliates may have certain royalty, payment, and/or other obligations to Third Parties with respect to the Cempra Licensed Patents, and FFFC agrees that, for each amount of API supplied hereunder, it shall, prior to or simultaneously with its
invoice for such API, confirm to Cempra in writing that the manufacturing methods, processes, and synthetic pathways followed or performed in the manufacture of such API were those specified by Cempra therefor or, solely to the extent not
constituting or requiring the practice of, any Third Party’s intellectual property or rights thereto, those improved by FFFC and protected as confidential in the DMF, and FFFC further agrees and covenants that it will only utilize the methods,
processes, and synthetic pathways specified by Cempra for the manufacture of API or, solely to the extent not constituting or requiring the practice of any Third Party’s intellectual property or rights thereto, those improved by FFFC and
protected as confidential in the DMF in performing FFFC’s obligations hereunder. 

  
  

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 7.3 Ability and Capacity. FFFC represents and warrants that: (a) it has all permits,
approvals, personnel, professional experience, equipment, facilities, funds, and capacity to fully perform it obligations under this Agreement; and (b) that it will not use in any manner, employ, engage or utilize the services of any person who
has been or is threatened with debarment under the United States’ Generic Drug Enforcement Act of 1992 or any equivalent law, rule, or regulation outside of the United States, or subject to any other comparable administrative, institutional or
other sanction for misconduct. 
 7.4 Warranty of Title. FFFC represents and warrants that all API, when title therefor is to be
transferred to Cempra pursuant to Section 5.4, shall be free and clear of any and all encumbrances, liens, or other claims, and FFFC can and does grant good and marketable title thereto. 

7.5 API Warranty. FFFC represents and warrants that all API, when delivered to Cempra under this Agreement, (a) will be
manufactured, tested, packaged, handled, and stored in strict accordance with the API Manufacturing Procedures, the Quality Agreement, cGMP and all other Applicable Laws; (b) will meet the API Specifications; (c) will not be adulterated or
misbranded within the meaning of the FD&C Act or any similar laws, regulations, or guidelines, or any applicable directives of applicable Regulatory Authorities; and (d) will not be articles that, under the provisions of the FD&C Act or
any similar laws, regulations, or guidelines, or any applicable directives of applicable Regulatory Authorities, may not be introduced into interstate commerce. In the case of breach of the foregoing warranty, FFFC shall promptly replace the
Non-Conforming API at no additional cost to Cempra, or refund the purchase price therefor, at Cempra’s election, and provided that the foregoing shall not limit FFFC’s recall obligations under Section 9 and indemnification
obligation under Section 12.1. 
 7.6 Compliance with Laws. Each Party covenants that it will comply with all Applicable
Laws in its performance of this Agreement. Each Party certifies that it shall cooperate with the other Party as required to comply with Applicable Laws, including providing assistance with any disclosures required by Applicable Laws. Manufacturer
represents and warrants that, as of the Effective Date, neither it, any Affiliate thereof, nor any facility of Manufacturer or any Affiliate thereof is the subject of any inquiries, notifications, inspection activity, suspensions, or holds by any
Regulatory Authority with respect to the manufacture of any active pharmaceutical ingredients or finished pharmaceutical products (including but not limited to, any FDA Form 483 Establishment Inspection Reports, warning letters, or similar items).

 7.7 Disclaimer. EXCEPT AS EXPLICITLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR GRANTS ANY
WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND, EXCEPT TO THE EXTENT SET FORTH IN THIS AGREEMENT, EACH PARTY SPECIFICALLY DISCLAIMS ANY AND ALL WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR
IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE. 

  
  

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	8.	PROCESS QUALITY AND REGULATORY MANAGEMENT 

8.1 Compliance with API Specifications and Other Requirements. FFFC shall Manufacture all API, and carry out all other obligations under
this Agreement, in compliance with the API Specifications, the Quality Agreement, cGMP and all other Applicable Laws, and the other requirements under this Agreement. 

8.2 Licenses and Permits. FFFC shall obtain and maintain at its expense all permits, licenses and approvals (including facilities
licenses) needed for FFFC to be able to manufacture and supply API in compliance with cGMP and Applicable Law (the “Facilities Licenses”), in a timely manner such that FFFC is able to meet its Manufacturing and supply obligations
under this Agreement. FFFC shall keep Cempra regularly and fully informed about status of all such Facilities Licenses and shall provide Cempra copies thereof upon request. FFFC shall ensure that the Facility complies with cGMP and all other
Applicable Laws with regards to its Manufacturing and supply of API. FFFC shall use best efforts to resolve as soon as possible any issues that arise in its seeking or maintaining Facilities Licenses, including completely addressing and rectifying
any deviations or other issues raised in any regulatory compliance action or any similar warning or objection by any Regulatory Authority. 

8.3 Quality Agreement. The parties shall use reasonable efforts to work in good faith to negotiate and execute a customary form of
quality agreement that is consistent with Applicable Law and industry standards (a “Quality Agreement”) as soon as reasonably possible following the Effective Date, but in any event no later than within six months of signing this
Agreement; upon execution of the Quality Agreement, a copy thereof will be attached as Exhibit F of this Agreement. Such agreement may be amended by mutual agreement from time to time by the Parties. To the extent that the terms or
conditions of the Quality Agreement, or any procedure, specification or requirement referenced by it, conflicts or is materially inconsistent with the terms of this Agreement, the terms of this Agreement shall prevail. 

8.4 Information for Regulatory Applications. FFFC shall prepare and maintain a DMF in the Territory for the API manufactured hereunder,
and update such DMF as required by Applicable Law, with such DMF to contain reasonably appropriate information concerning Master Batch Records (and API Manufacturing Procedures) as necessary and appropriate for all Regulatory Submissions in the
Territory and for the development, manufacture, commercialization, and use of Drug Product in the Territory. Except as may be agreed in writing by the Parties in any agreement for the supply of Drug Product for use or sale outside the Territory
pursuant to any agreement negotiated in accordance with Section 2.11, FFFC shall not file any DMF for the API or any other form of Solithromycin outside of the Territory, nor enable or permit any Affiliate of FFFC or any Third Party to
file a DMF concerning the API or any other form of Solithromycin or reference any such DMF filed or maintained by or on behalf of FFFC (provided that the foregoing shall not limit Cempra’s rights, including its rights to sublicense, under
Section 6.3(b)), and FFFC shall ensure that no Affiliate of FFFC files any DMF for API or any other form of Solithromycin except to the extent otherwise agreed to in writing by Cempra. Upon Cempra’s written request, FFFC shall
provide to Cempra, in English, the complete Master Batch Records, Batch Records, and any other API production records, and specific API Manufacturing Procedures and updates, and copies of the relevant documents containing any other FFFC technology
used in manufacturing API, to the extent such technology and API Manufacturing Procedures are not 

  
  

25 

 
maintained as confidential in the DMF maintained by FFFC. Cempra has the right to review and copy the executed, completed Batch Records for each Batch, as needed for Cempra, its Affiliates, and
its or its Affiliate’s licensees to prepare the CMC sections for any particular Regulatory Submissions that Cempra (or its Affiliate or its or its Affiliate’s licensee) intends to file or for any other appropriate regulatory purpose
relating to API or any Drug Product to the extent such technology and API Manufacturing Procedures are not maintained as confidential in the DMF maintained by FFFC. FFFC shall prepare and maintain the Batch Records for each Batch of API manufactured
hereunder, and shall provide Cempra, its Affiliates, and its and its Affiliates’ licensees access to such Batch Records for review and inspection, and shall provide copies thereof to Cempra upon request to the extent such technology and API
Manufacturing Procedures are not maintained as confidential in the DMF maintained by FFFC. 
 8.5 Regulatory Submissions. Cempra, its
Affiliates, and its or its Affiliates’ licensees shall have the exclusive right to prepare and submit any and all Regulatory Submissions, other than the DMF to be filed by FFFC in the Territory as contemplated hereby, regarding API or Drug
Products, and including filing any amendments or supplements thereto and pursuing such applications and filings to approval or registration. All Regulatory Submissions related to the API and/or the Drug Product, other than the DMF to be filed by
FFFC in the Territory as contemplated hereby, shall be made, owned, and controlled by Cempra (or its Affiliates or its or its Affiliates’ licensees, as applicable) in its (or their) sole discretion. To the extent required or appropriate under
Applicable Laws, any such Regulatory Submissions regarding API and/or Drug Product shall list FFFC as the manufacturer of any API supplied under this Agreement. FFFC shall have no rights in or to any such Regulatory Submissions. FFFC, in
consultation with Cempra, shall prepare at its expense the description of the Manufacturing operations and related information (e.g., methods validation package, stability, representative data and Batch records) as required for inclusion in
the Regulatory Submissions to the FDA, MHLW, and other Regulatory Authorities, which will contain all of the information relating to API Manufacturing Procedures as required in such Regulatory Submissions. FFFC will assist Cempra in the preparation
of annual updates and other required or requested Regulatory Submissions, and in promptly responding to any questions from Regulatory Authorities. If and as requested by Cempra, FFFC shall provide qualified technical representatives to attend
meetings and/or teleconferences with the FDA, MHLW, and other Regulatory Authorities as needed. 
 8.6 Regulatory Assistance. Without
limiting Section 8.5, with respect to any application or filings reasonably needed by Cempra (or its Affiliate or its or its Affiliate’s licensee) to obtain or maintain Regulatory Approvals for any Drug Product, and any
record-keeping, audits, inspections and audits required by Regulatory Authorities relating to the manufacture and/or supply of all API by FFFC hereunder, FFFC shall reasonably cooperate with and assist Cempra in all such matters, including providing
any additional information in FFFC’s control needed for such applications, filings or activities and any additional support relating to API as reasonably requested by Cempra, and Cempra shall reimburse FFFC for any actual out-of-pocket costs of
providing such information and assistance, in amounts to be agreed prior to the services. 
 8.7 FFFC Pre-Review of Regulatory
Submission. FFFC accepts responsibility for the accuracy, integrity and completeness of all documentation prepared by or on behalf of FFFC that is filed with Regulatory Authorities, including but not limited to the DMF to be filed by FFFC as
contemplated by this Agreement (collectively, the “FFFC Regulatory Documents”). 

  
  

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 8.8 OOS and Other Events. FFFC shall immediately inform Cempra in writing of all OOS and
out-of-trend events (provided such trend constitutes a deviation) within two (2) business days, failure investigations, process deviations, Batch failures and similar matters (including any unexpected adverse final or interim results or data
from stability or other studies) and provide Cempra with the applicable investigation report and corrective action plans prior to release of the in-process or finished Lots that are subject to the OOS event. All OOS and other investigations, and all
corrective actions, shall be performed in accordance with Regulatory Standards and a written procedure acceptable to the Parties. 
 8.9
Pre-Approval Inspections and Other Inspections. FFFC shall use its best efforts to successfully pass MHLW inspections, and all other regulatory inspections by the Regulatory Authorities and audits performed by or on behalf of Cempra, its
Affiliates, or its or its Affiliates’ licensees, without material objection. Should FFFC fail MHLW inspection or review of Regulatory Submissions results in materially adverse actions by any Regulatory Authority (e.g., delay of Marketing
Approval or requirement for corrective actions), in any event due to FFFC’s negligence, inadequate planning or implementation or failure to comply with Applicable Laws or other requirements under this Agreement, it shall immediately rectify
such inadequacies and perform best efforts to prepare the Regulatory Submissions related to API Manufacturing and other services of FFFC provided hereunder. Except as specifically provided otherwise in this Agreement, FFFC shall bear the expense of
establishing and maintaining its compliance with Applicable Laws and other requirements in their Agreement, including implementation of any corrective or other actions needed to bring about such compliance. FFFC shall allow Cempra’s quality
assurance team (or that of its Affiliates or its or its Affiliates’ licensees) to conduct mock preapproval inspections upon their reasonable request. 

8.10 Records. FFFC shall prepare and maintain all Records relating to its activities under this Agreement, including all Batch Records.
Records shall be prepared and maintained in compliance with cGMP and all other Applicable Laws and other requirements under this Agreement. All Records shall be complete, accurate, legible, valid, verifiable and contemporaneous with the events or
activities described. All Records shall be available for Cempra’s, its Affiliates’, and its and its Affiliates’ licensees’ inspection and audit upon advance notice during business hours, and Cempra, its Affiliates, and its and
its Affiliates’ licensees shall have the right to request and obtain copies thereof, which are accompanied by a written statement of an appropriate representative of FFFC certifying the authenticity and accuracy of such copies, during the Term
and until the latest of (i) thirteen (13) years from the time of manufacture and release of the API to which the applicable Records relate, (ii) three (3) years from expiration of the Drug Product manufactured using such API, or
(iii) such later date as may be required by Applicable Law, to the extent, in each case, such Records do not contain any information maintained as confidential in the DMF maintained by FFFC. Notwithstanding the foregoing, Cempra and/or its
representative (including that of any Cempra Affiliate or licensee of Cempra or any Affiliate thereof) may at any time have access to the Records during business hours to the extent such the Records do not contain any information maintained as
confidential in the DMF maintained by FFFC and the right to make copies thereof, in connection with investigation of any complaint or injury related to the API or the Drug Product or any dispute between the Parties. FFFC shall not destroy, alter
(except for corrections as and in the manner permitted by Applicable Laws), remove or dispose of any Records without Cempra’s prior written consent and in which case Cempra may take possession and custody of such Records to the extent not
containing information not disclosed or required to be disclosed to Cempra (which may include information maintained as confidential from Cempra in the DMF). 

  
  

27 

 8.11 Retention Samples, Analytical Verification, and Qualification. FFFC shall collect and
retain samples as required by the API Specifications and Applicable Laws. In addition, as directed by Cempra, FFFC also shall retain sufficient quantities of samples of API (including production samples taken during the Manufacturing process) to
twice replicate the quality control and release testing applicable to the sample. These additional samples shall be maintained by FFFC for the longest of (i) eight (8) years from the date of manufacture and release of the corresponding
API, (ii) three (3) years from expiration of the Drug Product manufactured using such API, or (iii) such longer period as may be required under Applicable law and, upon request, furnished to Cempra at any testing facility designated
by Cempra. There shall be no charge for preparing these additional samples, other than any reasonable, documented costs incurred with special packing requirements or courier services. FFFC shall notify Cempra before disposing of any such samples,
and upon Cempra’s request shall ship the requested samples to Cempra or any designee thereof at Cempra’s cost (which shall be reasonable and documented). 

8.12 Notice of Adverse Discovery. At any time following the Manufacture of a Lot of API, FFFC shall notify Cempra immediately in
writing in the event FFFC discovers or has reason to believe that there may be defects or deviations of any kind whatsoever in such API, including any non-conformance with API Specifications, Applicable Law, or any requirements applicable to its
Manufacture or any breach of the warranty in Section 7.5 as to such API. 
 8.13 Inspection of Facility by Cempra. Cempra
(or its Affiliate or any licensee of Cempra or any Affiliate thereof) shall have the right, and FFFC shall permit Cempra (or its Affiliate or any licensee of Cempra or any Affiliate thereof), from time-to-time, and at any time, to audit or inspect
the portions of the Facility where API is Manufactured or stored and to review all Records and other documents relating to Manufacturing of API as is reasonably necessary for the purpose of assessing FFFC’s compliance with the Manufacturing
SOPs, cGMP, the API Specifications, the Regulatory Standards, applicable chemical manufacturing controls, and this Agreement to the extent such Records do not contain any information maintained as confidential in the DMF maintained by FFFC. Such
audits or inspections shall not be limited in number or frequency, but in principle once or twice a year, and any such audit or inspection and document review shall be conducted upon reasonable prior written notice by Cempra prior to the proposed
audit or inspection (except in the event of a reasonable, urgent concern by Cempra regarding the quality of API, in which case Cempra may conduct the audit or inspection as soon as possible), at a time and date determined by Cempra, taking into
account FFFC’s reasonable scheduling concerns. In addition, such audits or inspections shall be implemented during business hours of such Facility. Furthermore, Cempra shall have the right, from time-to-time, and at any time, to have an
employee, agent, or representative of it, any Affiliate of Cempra, or any licensee of Cempra or any Affiliate thereof present at the Facility during the preparation for or conduct of any manufacturing or production run for Manufacture of a Batch of
API, and such employee or agent shall be free to inspect and oversee all aspects of such preparation or production run and to comment to FFFC thereupon. 

  
  

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 8.14 Regulatory Inspections. 

(a) Inspection by Regulatory Authorities. Upon the request of any Regulatory Authority having jurisdiction over the
manufacture of API hereunder or Drug Product to be manufactured using such API, such Regulatory Authority shall have access to observe and inspect FFFC’s facilities and procedures used for all activities related to the manufacture and storage
of the API including but not necessarily limited to the manufacture, testing and release, and/or warehousing of all API (and all Intermediates and Raw Material) and to audit such facilities for compliance with cGMP and/or other applicable Regulatory
Standards. FFFC specifically agrees to cooperate with any inspection by a Regulatory Authority, whether prior to or after Regulatory Approval of a Drug Product, and to promptly provide Cempra a copy of any inspection or audit report resulting from
any such inspection. If FFFC is purchasing Raw Materials from a Third Party manufacturer for use in manufacturing API, FFFC shall use commercially reasonable diligent efforts to ensure that such manufacturer’s facilities and procedures are
subject to the provisions of this Section 8.14(a), or substantially similar contractual obligations, as to the manufacture of such Raw Materials, and to ensure that Cempra is provided copies of any inspection or audit report of such
Third Party relating to such Raw Materials. For any Third Party manufacturers of Raw Materials selected by Cempra, FFFC will perform a reasonable and customary use test in accordance with relevant SOP or protocol with respect to any Raw Materials
obtained from such Third Party. 
 (b) Notification of Inspections. FFFC agrees to notify Cempra in writing as soon as
possible of any written or oral inquiries, notifications or inspection activity by any Regulatory Authority in regard to the API to be supplied to Cempra hereunder or to any Manufacturing activity related thereto. Cempra shall have the right to
attend (or have any Affiliate thereof or licensee of Cempra or any Affiliate thereof attend) any such inspection that relates directly to Manufacturing (including testing) of API. FFFC shall provide a reasonable description of any such governmental
or regulatory inquiries, notifications or inspections promptly, but in no event later than one (1) business day after such notification, inquiry or inspection. FFFC shall furnish to Cempra (i) as soon as possible and not to exceed within
three (3) business days after receipt, any report or correspondence issued by any Regulatory Authority in connection with such notification, inquiry or inspection, including any List of Inspectional Observations, applicable portions of any
Warning Letters, or any equivalent or similar form, letter, or notice in another country or jurisdiction which pertain to the API or any facility involved with the manufacture, handling, or storage thereof, and (ii) not later than ten
(10) business days prior to the time it provides to any Regulatory Authority, copies of proposed responses or explanations relating to items set forth above (each, a “Proposed Response”), in each case redacted of trade secrets
or other confidential or proprietary information of FFFC that are unrelated to the obligations under this Agreement or are unrelated to API or its manufacture. FFFC shall discuss with Cempra and consider in good faith any comments provided by Cempra
on the Proposed Response. After the filing of a response with the Regulatory Authority, FFFC shall notify Cempra promptly in writing of any further contacts with such Regulatory Authority relating to the subject matter of the response until
resolution and provide the final outcome (e.g. establishment inspection report (EIR)). 
 (c) Remedial Actions. FFFC
shall notify Cempra immediately in writing in the event any action is taken or threatened by a Regulatory Authority relating to the manufacture, 

  
  

29 

 
handling, or storage of API by FFFC, or relating to the FFFC Facility in which such manufacture, handling, or storage occurs, or which may impair the ability of FFFC to manufacture or store API
(including without limitation any impairment to FFFC’s ability to manufacture or store API conforming to the applicable API Specifications) in accordance with this Agreement. In any event, FFFC shall use best efforts to address and resolve as
soon as possible any issues, concerns or warnings from any Regulatory Authority that might affect FFFC’s ability to manufacture, supply, and store API in accordance with this Agreement. To the extent FFFC must implement a plan of remediation or
for other modifications or changes to its FFFC Facility or its manufacturing processes in order to address and resolve any such issues, concerns or warnings from any Regulatory Authority, FFFC shall prepare such plan as soon as possible, shall
provide a draft of the plan to Cempra for review and comment, and shall implement all reasonable comments of Cempra as soon as possible, and shall implement and complete all aspects of the agreed plan as soon as possible. 

(d) Damages for Regulatory Failures. If FFFC fails to deliver on a timely basis API ordered by Cempra under this Agreement due
to either: (i) failure of FFFC to obtain or maintain all needed Facilities Licenses or (ii) a determination by the MHLW or any other Regulatory Authority that the API is “misbranded or adulterated” within the meaning of the
FD&C Act (or equivalent determination under any Applicable Law in the Territory) due to any manufacturing problem or issue at the Facility, or any other similar disability or determination raised, imposed, or made by a Regulatory Authority, each
arising from any reason, act, or omission attributable to FFFC, its Affiliates, or its subcontractors, then FFFC shall indemnify and hold Cempra harmless from any and all losses resulting from lost sales caused directly by such failure to deliver
within the limitation set forth in Section 12.4. 
 8.15 Other Conditions of Audits and Inspections. There shall be no
charge for any inspections or audits as described in Sections 8.13 or 8.14 above, and FFFC shall cooperate with both, including providing of reasonable space for review and copying of Records and assistance of key personnel.
Cempra representatives, when on FFFC’s premises, shall at all times comply with FFFC’s internal policies to the extent reasonable and provided in advance to Cempra. It is agreed that, except to the extent audits and observation are
implemented by Cempra unreasonably and excessively frequently or unreasonably and excessively rigidly or for an unreasonably long period and such implementation by Cempra directly results in any prevention or inhibition of FFFC’s performance of
its obligations under this Agreement, the audits and observation by Cempra representatives shall not in any way serve as a limitation on any of FFFC’s obligations or liabilities under this Agreement; although Cempra reserves the right to audit
the Facility annually or more frequently if reasonable under the circumstances and will provide FFFC with the results of any quality audit performed by Cempra. 
  

	9.	RECALLS AND RECALL COSTS 

9.1 Responsibility for Recalls. If a Recall (as defined in Section 9.5 below) of any Drug Product distributed by Cempra or
its Affiliate or any licensee of either of the foregoing is required or recommended by a Regulatory Authority or other governmental agency or authority of competent jurisdiction, or if a Recall is otherwise deemed advisable by Cempra (or its
Affiliate or its or its Affiliate’s licensee), Cempra, its Affiliate, or its or its Affiliate’s licensee, as applicable shall, as between the Parties, be responsible for and determine, in their sole discretion, such Recall,

  
  

30 

 
its planning, and its execution, provided that FFFC shall cooperate with Cempra, its Affiliates, and its or its Affiliates’ licensees, as applicable, with respect to any such Recall, as
reasonably requested thereby, and further provided that, to the extent permitted and reasonably possible in light of any applicable terms of Cempra’s agreements with its licensees or distributors in the Territory (including but not limited to
Toyama) without breach of such agreements, Cempra shall use reasonable efforts to consult with FFFC regarding any potential Recall prior to the initiation thereof. The costs of any Recall shall, as between the Parties, be borne by the Party or
Parties whose actions or omissions caused the Recall to be necessary or deemed advisable, as provided in Section 9.4. 
 9.2
Communication. Each Party shall keep the other fully and promptly informed of any notification, event or other information, whether received directly or indirectly, which might affect the marketability, safety or effectiveness of Drug Products
sold or distributed by Cempra, its Affiliate, or its or its Affiliate’s licensee or might result in a Recall or Seizure (as defined in Section 9.5 below) of Drug Products by the FDA, MHLW, or other Regulatory Authority. 

9.3 Replacement; Refund. In the event of any Recall or Seizure of Drug Product arising out of or resulting from FFFC’s supplying
defective API or other breach of this Agreement by FFFC, FFFC shall, if and as elected by Cempra, and in addition to any other obligations of FFFC under the terms of this Agreement available to Cempra for any breach of this Agreement by FFFC,
either: 
 (a) promptly supply replacement API that meets the API Specifications and otherwise conforms to the warranty in
Section 7.5, without charge to Cempra, in an amount sufficient to replace the amount of API needed to manufacture the Drug Product that is Recalled or Seized (including that amount of API incorporated into any Drug Products that are
Recalled or Seized), or 
 (b) refund to Cempra, or give credit to Cempra against outstanding receivables due from Cempra against the
price of API to be delivered to Cempra in the future, in amounts equal to the price paid by Cempra to FFFC for the API needed to manufacture the amounts of Drug Product so Recalled or Seized (including that API incorporated in the Drug Product so
Recalled or Seized) plus the reasonable, documented transportation costs incurred by Cempra and not recovered by Cempra in respect of such Recalled or Seized Drug Product. 

9.4 Responsibility for Recall Costs. To the extent any Recall or Seizure of API or any Drug Product results from FFFC manufacturing
defects in any API supplied by FFFC (for example, due to FFFC’s failure to manufacture a API included in such Drug Product in accordance with the API Specifications or cGMP), or otherwise arises out of, or is connected with any inaccuracy in,
breach of, or non-fulfillment of, any representation, warranty, covenant or other obligation of FFFC under this Agreement, or any negligence, recklessness, willful misconduct, or failure to conform with the explicit quality standards or quality
obligations imposed on FFFC in the Quality Agreement on the part of FFFC, its Affiliates, or its or its Affiliates’ directors, officers, employees, vendors or agents, then FFFC shall pay all the reasonable, documented, direct costs of such
Recall or Seizure, including such costs incurred by Cempra, any Affiliate thereof, or any licensee of Cempra or any Affiliate with respect to the reasonable conduct of any such Recall or Seizure, including but not limited to shipping costs,
repurchases, notification letters, direct 

  
  

31 

 
shipping expenses, and the costs of disposal and/or destruction of the Recalled items, and other direct costs and expenses directly related to such Recall or Seizure (such as costs of
administering any Recall), provided that if such Recall or Seizure results from negligence, intentional misconduct, or failure of both Parties, Cempra and FFFC shall bear such costs and expenses pro rata in accordance with their share of fault,
which shall be discussed in mutual good-faith and reasonable consultations between the Parties (for purpose of clarification, API, supplied by FFFC under this Agreement, that (x) was not manufactured, stored, or released by or on behalf of FFFC
in accordance with the API Specifications or cGMP or (y) did not conform with the explicit quality standards or quality obligations imposed on FFFC in the Quality Agreement with respect to such API, shall, solely for purposes of this proviso,
constitute such negligence, intentional misconduct, or failure on the part of FFFC). Notwithstanding the foregoing, FFFC shall have no obligation to pay costs of a Recall or Seizure of any Drug Product to the extent such Recall or Seizure is:
(a) due to defects in the Drug Product other than those arising out of (x) manufacturing defects in the API as supplied by FFFC or (y) any inaccuracy in, breach of, or non-fulfillment of, any representation, warranty, covenant or
other obligation of FFFC under this Agreement, or any negligence, recklessness, willful misconduct, or failure to conform with the explicit quality standards or quality obligations imposed on FFFC in the Quality Agreement on the part of FFFC, its
Affiliates, or its or its Affiliates’ directors, officers, employees, vendors or agents, (b) due to defects in the Drug Product caused by improper actions (such as incorrect storage) occurring after the API is delivered by FFFC to
Cempra’s carrier, (c) due to packaging or labeling defects for which Cempra or any Third Party has responsibility, or (d) due to and caused by any other breach by Cempra of its duties under this Agreement. For the avoidance of doubt
and subject to the general limitations of liability under this Agreement, and without limitation of the foregoing, FFFC shall be solely responsible for the costs and expenses of a Recall or Seizure that is directly caused by a FFFC manufacturing
defect in API supplied to Cempra. 
 9.5 Definition of Recall and Seizure. For purposes of this Section 9,
“Recall” shall mean any action by Cempra and/or its Affiliates or licensees to recover title or possession or halt distribution, prescription or consumption of Drug Products sold or shipped to Third Parties by Cempra or its
Affiliate or licensee, including any market withdrawal. The term “Recall” also applies to Drug Product which would have been subject to recall or withdrawal if it had been sold or shipped. “Seizure” shall mean any
action by the MHLW or other Regulatory Authority or governmental agency or authority of competent jurisdiction to detain or destroy API or Final Products or prevent the distribution, prescription, consumption or release of any API or Final Products.

  

	10.	TERM AND TERMINATION 

10.1 Term. Unless earlier terminated as provided for in Section 10.2 or Section 15.4(b), the initial term of
this Agreement shall commence on the Effective Date and shall remain in full force and effect for a period of ten (10) years from the Effective Date (the “Initial Term”). The term shall be automatically renewed thereafter for
one year periods (each, a “Renewal Term” and together with the Initial Term, the “Term”) unless either Party gives the other Party prior written notice of non-renewal at least [*] months prior to the end of the
then-current Term. 
  

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

  
  

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 10.2 Termination. 

(a) Mutual Consent. The Parties may at any time terminate this Agreement by mutual written agreement. 

(b) Material Breaches. 

(i) A Party shall have the right to terminate this Agreement on written notice to the other Party if the other Party commits a material
breach of its obligations under this Agreement and fails to remedy such breach within [*] days after notice of such breach. After the end of the applicable cure period, if the breach has not been cured, the Party having the right to termination may
terminate in whole or in part immediately upon notifying the breaching Party in writing. Any termination of this Agreement shall not release the breaching Party from its obligations or otherwise affect or limit the Parties’ rights and remedies.
For clarity, Cempra’s breach of its minimum purchase obligations under Section 2.6(d) of this Agreement shall be construed as a material breach of Cempra enabling termination as set forth in this Section 10.2 (b)(i). 

(ii) Each Party shall notify the other Party in writing as soon as reasonably possible of any claim, threatened claim, or allegation
made against it or any Affiliate thereof concerning any alleged, potential, or actual infringement, violation, or misappropriation of any Third Party’s intellectual property rights (including but not limited to Patents) in the Manufacture of
API or performance of FFFC’s other obligations under this Agreement. Upon such notice, the Parties shall enter into good faith discussions concerning such claimed, alleged, possible, or actual infringement, violation, or misappropriation and
potential appropriate or necessary measures that may enable FFFC to continue to perform this Agreement without infringing, violating, or misappropriating any Third Party’s intellectual property rights (including but not limited to Patents). If
FFFC fails to propose a reasonable, feasible and practical solution embodying appropriate and necessary measures enabling such non-infringing, non-violating, and non-misappropriating continued performance by FFFC that (i) would not require any
additional cost or expenditure by Cempra or otherwise adversely affect Cempra’s, its Affiliates’, or any of its or its Affiliates’ licensees’, sublicensees’, or distributors’ development, manufacture, or
commercialization of API or Drug Product and (ii) is reasonably approved in writing by Cempra in its sole discretion within [*] days after one Party provides such notice to the other Party of the applicable claim, threatened claim, or
allegation, then Cempra shall have the right to terminate this Agreement on written notice to FFFC. 
 (c) Bankruptcy. A Party
shall have the right to terminate this Agreement effective upon written notice to the other Party in the event that: (a) such other Party files a petition in bankruptcy or makes a general assignment for the benefit of creditors, or is adjudged
bankrupt, and such other Party (i) fails to assume this Agreement in any such bankruptcy proceeding within [*] days after filing or (ii) assumes and assigns this Agreement to a Third Party; (b) such other Party goes into or is placed
in a process of complete liquidation; or (c) a trustee or receiver is appointed for any substantial portion of such Party’s business and such trustee or receiver is not discharged within [*] days after appointment. 

 

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

  
  

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 (d) Supply Failure. This Agreement may be terminated by Cempra by written notice to
FFFC at any time following the occurrence of a Supply Failure. 
 (e) Product Failure. This Agreement may be terminated
immediately by either Party on [*] days written notice to the other Party in the event of a Product Failure. 
 (f) Purchase
Quantity Cause. This Agreement may be terminated by FFFC by written notice to Cempra at any time following the end of a complete Month Period during which the total quantity of API ordered by Cempra for delivery during such Month Period is less
than a thousand (1,000) kg. 
 (g) Validation or Process Issues. This Agreement may be terminated by Cempra on written notice
to FFFC if there are manufacturing process issues that make it commercially impracticable to manufacture API at the Facility, such as, without limitation of any other circumstances enabling termination under this Section 10.2(g), that
FFFC is unable to complete successfully the Validation Studies on a timely basis, or the registration or engineering Batches fail and cannot be completed to Cempra’s reasonable satisfaction. 

10.3 Effect of Termination. 

(a) Remaining Portion of Forecast. Upon any termination of this Agreement, Cempra shall be obligated to purchase, and FFFC shall
be obligated to deliver, API in accordance with any binding portion of the then current Forecast for which Purchase Orders have not been submitted, but Cempra shall not be obligated to submit any Purchase Orders or purchase any API in accordance
with any non-binding portion of the then current Forecast for which Purchase Orders have not been submitted, except to the extent, with respect to all of the foregoing, explicitly provided for below. 

(b) Elective Purchase of Inventories. In the event of this Agreement’s termination, Cempra shall be entitled, if and as
elected by Cempra, to (i) purchase, at the lowest price indicated in Exhibit J, all remaining API in FFFC’s inventory that it would not otherwise be obligated to purchase under this Agreement and/or (ii) purchase, at
FFFC’s reasonable, documented, direct purchase or production cost, as applicable, its Raw Materials or Intermediates (valued on a pro-rata basis to manufacturing cycle-time) reasonably purchased or produced for Manufacturing that, with the
exercise of reasonable efforts by FFFC, are not reasonably able to be returned for credit or used for producing products for FFFC’s other customers, plus reasonable, documented shipping costs. In no event shall Cempra be charged an amount for
Raw Materials or Intermediates that exceeds the purchase price set forth hereunder for the corresponding amounts of API specified by Cempra’s relevant Purchase Orders in effect at the date this Agreement is terminated (the “Termination
Date”). 
  

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

  
  

34 

 (c) Effects of Termination by Cempra for Product Failure or by FFFC for Cempra’s
Breach or Bankruptcy. If this Agreement is terminated by Cempra under Section 10.2(e) or by FFFC under Section 10.2(b) or 10.2(c), then, except to the extent otherwise agreed to in writing by the Parties,
(i) all amounts of completed API existing as of the date the termination notice is provided Manufactured under Purchase Orders previously accepted by FFFC shall be delivered and paid for by Cempra in accordance with the terms of this Agreement,
(ii) all other Manufacturing work under this Agreement shall immediately cease and all other pending Purchase Orders shall be automatically cancelled, and (iii) Cempra shall, within thirty (30) days of an invoice from FFFC, reimburse
FFFC for FFFC’s reasonable, documented direct cost of all unused Intermediates and all unused Raw Materials reasonably procured by FFFC prior to such notice of termination as necessary to manufacture API in satisfaction of the binding and
non-binding portion of the most recent Forecast provided by Cempra, except to the extent (a) such Product Failure results from FFFC’s, its Affiliates’, or its or its Affiliates’ contractors’ negligence, intentional
misconduct, breach of this Agreement, or failure to comply with Applicable Law or (b) such Intermediates or Raw Materials can, with the exercise of reasonable efforts, be used by FFFC in any other portions of its business. If and as requested
by Cempra, any unused Intermediates or Raw Materials for which Cempra reimburses FFFC’s cost shall be promptly delivered (and all right, title, and interest therein assigned) to Cempra or its designee, at Cempra’s expense for such
delivery. 

  
  

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 (d) Additional Effect of Termination by FFFC for Cempra’s Breach. If
this Agreement is terminated by FFFC under Section 10.2(b) and, prior to such termination, (i) FFFC has constructed a facility located at 1-34, Iwasawa, Kamikitaba, Hirono-machi, Futaba-gun, Fukushima 979-0401, Japan for the primary
purpose of manufacturing API for Cempra hereunder and (ii) such facility is completed and fully operational and qualified for the manufacture of API for delivery hereunder, then, except to the extent otherwise agreed to in writing by the
Parties, Cempra shall, within ninety (90) days of such termination and FFFC’s provision of a report accurately detailing and certifying to the facts, circumstances, and accounting supporting Cempra’s obligation hereunder (and the
amount thereof), pay FFFC an amount equal to (a) the “Remaining Book Value” set forth on Exhibit L (which is denominated in millions of US dollars) less (b) the product of the number of kilograms of API ordered by
Cempra under this Agreement prior to such termination times US$[*], provided that (x) if the amount described in clause (b) exceeds the amount described in clause (a), Cempra shall have no payment obligation under this
Section 10.3(d), (y) if the total direct costs incurred by FFFC in the construction of the facility referenced above, net of any tax credits, tax refunds, government subsidies, or similar financial, monetary, or in-kind benefits
provided by any governmental agency or authority (the “Construction Costs”), do not equal or exceed US$17,500,000, then the “Remaining Book Value” shall be reduced by a pro rata amount, based on the ratios of the various amounts
set forth in Exhibit L, based on the ratio of such lesser cost to $17,500,000, and (z) no amount shall be payable hereunder if the Agreement terminates following December 31, 2025; provided, however, that if FFFC manufactures
any product or performs any activities (other than the manufacture of API for Cempra under this Agreement) in, by, or using such facility prior to such termination and makes any profit thereby, the total amount of such profits shall be subtracted
from the total payment amount due from Cempra to FFFC under this Section 10.3(d). As two examples of the payment requirements of this Section 10.3(d) (and in these examples, the total amount of such profits shall be assumed
as zero (0)), (I) if the requirements for payment set forth in the first sentence of this Section 10.3(d) are satisfied, the Construction Costs equal US$17,500,000, this Agreement is terminated in 2018, and Cempra has ordered [*] kg
of API hereunder prior to such termination, Cempra shall owe FFFC US$13,430,000 under this Section 10.3(d) and (II) if the requirements for payment set forth in the first sentence of this Section 10.3(d) are satisfied, the
Construction Costs equal US$8,750,000, this Agreement is terminated in 2018, and Cempra has ordered [*] kg of API hereunder prior to such termination, Cempra shall owe FFFC US$6,215,000 under this Section 10.3(d). 

 

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

  
  

36 

 (e) Effects of Termination by FFFC for Product Failure or by Cempra for FFFC-Caused
Product Failure, FFFC’s Breach, Supply Failure, or Validation or Process Issues. If this Agreement is terminated (x) by Cempra under Section 10.2(b), 10.2(c), 10.2(d), 10.2(g), or 15.4(b), (y) by Cempra under
Section 10.2(e) for a Product Failure resulting, in whole or in material part from FFFC’s, its Affiliates’, or its or its Affiliates’ contractors’ negligence, intentional misconduct, breach of this Agreement, or failure
to comply with Applicable Law, or (z) by FFFC under Section 10.2(e), then, except to the extent otherwise agreed to in writing by the Parties or elected by Cempra under Section 10.3(b), Cempra shall not have any
obligations to purchase any API in accordance with any binding or non-binding portion of the then current Forecast for which Purchase Orders have not been submitted or to purchase, or reimburse FFFC’s costs for, any API, Intermediates, or Raw
Materials remaining in FFFC’s possession or control as of such termination, except, in the event of a termination by Cempra under Section 10.2(e), to the extent the applicable Product Failure did not result from FFFC’s,
its Affiliates’, or its or its Affiliates’ contractors’ negligence, intentional misconduct, breach of this Agreement, or failure to comply with Applicable Law. 

(f) Return of Materials. Upon termination of this Agreement, FFFC shall immediately return to Cempra copies of all documentation
and information and materials relating to API Manufacturing (including copies of development reports and Master Batch Records to the extent not containing any information maintained as confidential in the DMF maintained by FFFC), the Product, and
the Specifications. Any original documents provided by or on behalf of Cempra to FFFC during the Term shall be returned to Cempra, along with any copies thereof, provided that FFFC may keep one archival copy if required by a Regulatory Authority.
Documents and materials shall be packaged and shipped in the manner reasonably requested by Cempra as needed to preserve their integrity and acceptability to Regulatory Authorities. 

(g) Survival. Termination of this Agreement shall not operate to release any Party from any obligation or liability incurred
under the terms of this Agreement before or upon termination hereof, nor shall it relieve the Parties of their obligations with respect to API supplied by FFFC under this Agreement. In addition Articles 1, 4, 5, 7, 9, 11, 12, 13, 14, and
15 and Sections 2.2, 2.7, 2.10, 3.3, 6.3(b) (for Drug Product manufactured with API supplied under this Agreement), 8.1, 8.4, 8.5, 8.6, 8.7, 8.8, 8.9, 8.10, 8.11, 8.12, 8.13, 8.14, 8.15, and 10.3 shall survive the
expiration or termination of this Agreement on account of any cause. 
  

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

  
  

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	11.	CONFIDENTIALITY & INTELLECTUAL PROPERTY 

11.1 Treatment of Confidential Information. The Parties acknowledge and agree that during the Term, either Party may disclose to the
other Party its Confidential Information as needed for the conduct of this Agreement and that all “Confidential Information” (as defined in the Confidentiality Agreement) disclosed by either Party pursuant to the Non-Disclosure Agreement
between Cempra and FFFC dated October 1, 2013, as amended (the “Confidentiality Agreement”) shall be deemed to be such Party’s Confidential Information hereunder. With respect to all such Confidential Information of a
Disclosing Party, the Receiving Party agrees that (except as otherwise provided in Section 11.2 below) during the Term and for a period of [*] years after this Agreement expires or terminates, such Receiving Party shall (a) maintain
in confidence such Confidential Information; (b) not disclose such Confidential Information to any Third Party without prior written consent of the Disclosing Party, except for, in the case of each Party, disclosures permitted of such Party
under Section 11.2; and (c) not use such Confidential Information for any purpose other than the performance of or exercise of rights under this Agreement, or, in the case of Cempra as the Receiving Party, to the extent necessary or
useful in developing, manufacturing, or commercializing Drug Products. 
  

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

  
  

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 11.2 Authorized Disclosures. If a Receiving Party is required to disclose specific
Confidential Information of the Disclosing Party to comply with Applicable Law, or order of a government authority or court of competent jurisdiction, such Receiving Party may disclose such Confidential Information only to the person(s) or
entity(ies) required to receive such disclosure; provided, however, that the Receiving Party required to disclose such Confidential Information shall (a) to the extent reasonably practicable and permitted by such Applicable Law or order, first
have given reasonable advance notice to such Disclosing Party to enable it to seek any available exemptions from or limitations on such disclosure requirement, and shall reasonably cooperate in such efforts by the Disclosing Party as reasonably
requested thereby, (b) furnish only the portion of such Confidential Information which is legally required to be disclosed, (c) use reasonable efforts to secure confidential protection of such Confidential Information, and
(d) continue to perform its obligations of confidentiality set out herein. Further, Cempra (or its Affiliate or its or its Affiliate’s licensee) shall be entitled to disclose Confidential Information of FFFC to the extent not containing
any information maintained as confidential in the DMF maintained by FFFC (other than such information maintained as confidential in the DMF that is subject to disclosure pursuant to Section 2.2 (if any)) to: (i) Regulatory Authorities to
the extent such disclosure is reasonably necessary or useful in Regulatory Submissions required for the development, manufacture, and/or commercialization of Drug Products; (ii) licensees, contractors, employees, and consultants who need to
know such information for the development, manufacture and/or commercialization of Drug Products, (iii) potential or actual bankers, underwriters, lawyers, accountants, agents or other Third Parties in connection with due diligence or similar
investigations, and (iv) potential or actual investors, licensees, acquirers, merger or acquisition targets, or other strategic partners; provided that any such Third Party is bound by obligations of confidentiality and non-use materially as
protective as those set forth herein. Also, FFFC shall be entitled to disclose Confidential Information of Cempra under obligations of confidentiality and non-use materially as protective as those set forth herein to FFFC’s Affiliate or
subcontractors set forth in Section 2.7 who have been approved by Cempra in writing and need to know such information for the performance of supply obligation in this Agreement; provided that any such Affiliate or Third Party is bound by
obligations of confidentiality and non-use materially as protective as those set forth herein. In the case of each foregoing disclosure, the Party making such disclosure shall obtain reasonably appropriate confidential treatment of any such
disclosure on its own responsibility, and shall not disclose Confidential Information of the other Party other than is reasonably necessary. Notwithstanding anything to the contrary, FFFC shall not disclose any of Cempra’s Confidential
Information concerning any API Manufacturing Procedures to Toyama, any Affiliate thereof, or any other Affiliate of FFFC except to the extent approved in advance and in writing by Cempra (such approval not to be unreasonably withheld). 

11.3 Disclosure of Agreement. Except as otherwise provided below, neither Cempra nor FFFC shall release any information to any other
person regarding the terms of this Agreement without the prior written consent of the other Party, which consent shall not be withheld unreasonably. The foregoing consent requirement includes, but is not limited to, press releases, educational and
scientific conferences, promotional materials and discussions with the media. However, each Party shall be entitled to disclose the terms of this Agreement and specific information and terms relating to this Agreement to the extent such disclosure
is required by applicable law or regulation or securities exchange rules or regulations, provided that, to the extent reasonably practicable, such Party shall notify the other Party of this requirement before releasing the information. The notice to
the other Party shall include the text of the information proposed for 

  
  

39 

 
release, and the basis for the required disclosure. The other Party shall, to the extent reasonably practicable, be provided a reasonable opportunity to confer with the notifying Party regarding
the necessity for the disclosure and the text of the information proposed for release. A Party shall further be entitled to disclose this Agreement in securities filings with the U.S. Securities and Exchange Commission (the “SEC”)
or equivalent foreign agency to the extent required by Applicable Law. In such event, the Party seeking such disclosure shall prepare a proposed redacted version of this Agreement to request confidential treatment for this Agreement, and the other
Party shall, to the extent reasonably practicable, be provided a reasonable opportunity (not in any event to be required to exceed two (2) business days after receipt of such proposed redactions) to promptly provide its comments. In addition,
FFFC and Cempra shall each have the right to disclose the terms of this Agreement in confidence to persons engaged or proposing engagement in fiduciary relationships, such as banks extending credit with the Party, investors, and legal counsel, and
potential investors, merger targets or acquirors and their legal counsel and professional advisors, if such persons are subject to reasonable confidentiality and non-use obligations. Further, FFFC shall have the right to disclose the terms of this
Agreement in confidence to directors, officers, employees and agents of FUJIFILM Corporation and FUJIFILM Holdings Corporation, both parent companies of FFFC, who need to know such information for the conduct of this Agreement if they are
subject to reasonable confidentiality and non-use obligations. 

  
  

40 

 11.4 No Implied Licenses. Only licenses explicitly granted pursuant to the express terms
of this Agreement or any separate agreement executed by the Parties shall be of any legal force and effect. No other license or any other proprietary rights shall be created by implication or estoppel, in the patents, know-how, trade-secrets,
copyrights, trade and other marks, or other intellectual property rights, owned or licensed to the respective Parties. No other licenses are granted by Cempra to FFFC under this Agreement. 

11.5 Trade Names and Trademarks. Cempra hereby acknowledges that except as otherwise set forth in this Agreement, it does not have, and
shall not acquire by virtue of this Agreement, any rights to or under any goodwill, trademark or trade name of FFFC, nor in any of FFFC’s trademark or trade names appearing on the label or packaging materials of API. FFFC hereby acknowledges
that it does not have, and shall not acquire by virtue of this Agreement, any rights to or under any goodwill, trademark or trade name of Cempra, any Affiliate thereof, or any licensee of Cempra or any Affiliate thereof, nor in any of Cempra’s,
its Affiliates’, or its or their licensees’ trademarks or trade names appearing on the label or packaging materials of API or Drug Product. 
  

	12.	INDEMNIFICATION; LIMITATION OF LIABILITY 

12.1 FFFC’s Obligation to Indemnify. FFFC shall indemnify, defend and hold Cempra, its Affiliates, and its and their respective
directors, officers, employees and agents (the “Cempra Indemnitees”) harmless against any and all Losses incurred by any of them as a result of any Third Party claim, demand, suit, action or proceeding (“Claims”)
resulting from, arising out of, or connected with: (a) liability or personal injury claims arising directly from the manufacture of the API supplied hereunder or Drug Products incorporating the API supplied hereunder to the extent, in either
case, caused only by or resulting only from the breach of any of FFFC’s obligations under this Agreement; (b) a breach of any of FFFC’s warranties or other obligations under this Agreement; (c) the clean-up, remediation and
restoration arising out of or related to FFFC’s storage, handling, transportation, incineration or disposal of any Waste that may be generated by Manufacturing; (d) the alleged or actual infringement or misappropriation of a Third
Party’s intellectual property rights (including but not limited to Patents) in the Manufacture of API or performance of FFFC’s other obligations under this Agreement; or (e) any negligence, intentional misconduct, or failure to comply
with Applicable Law on the part of FFFC, its Affiliates, its or their contractors, or any employees, agents, or representatives of any of the foregoing with respect to this Agreement or the subject matter thereof. FFFC’s obligations set forth
in this Section 12.1 shall not include Losses on any Claims to the extent that such Losses or Claims arise from the (x) alleged or actual infringement or misappropriation of a Third Party’s intellectual property rights
(including but not limited to Patents) to the extent solely and directly (i) resulting from FFFC’s following any of Cempra’s clear technical instructions for the Manufacture of API hereunder or (ii) based on FFFC’s practice,
in the Manufacture of API for Cempra hereunder, of the technology Covered by and described in the claims of the Cempra Licensed Patents (and not any technology not Covered or described in such claims); (y) breach by any Cempra Indemnitee of its
obligations under this Agreement or (z) any negligence, intentional misconduct, or failure to comply with Applicable Law on the part of any Cempra Indemnitee. 

  
  

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 12.2 Cempra’s Obligation to Indemnify. Cempra shall indemnify, defend and hold
harmless FFFC, its Affiliates, and its and their directors, officers, employees and agents (“FFFC Indemnitees”) against any and all Losses incurred by any of them as a result of any Third Party Claim resulting from, arising out of,
or connected with: (a) product liability claims arising from Cempra’s, its Affiliates’, or its or their licensees’ testing, manufacturing, sale or use of Drug Product; (b) a breach of any of Cempra’s warranties or other
obligations under this Agreement; (c) any negligence, intentional misconduct, or failure to comply with Applicable Law on the part of Cempra with respect to this Agreement or the subject matter thereof; or (d) alleged or actual
infringement or misappropriation of a Third Party’s intellectual property rights (including but not limited to Patents) to the extent solely and directly (i) resulting from FFFC’s following any of Cempra’s clear technical
instructions for the Manufacture of API hereunder or (ii) based on FFFC’s practice, in the Manufacture of API for Cempra hereunder, of the technology Covered by and described in the claims of Cempra Licensed Patents (and not any technology
not Covered or described in such claims). Cempra obligations set forth in this Section 12.2 shall not include Losses on any Claims to the extent such Losses or Claims arise from the any of the circumstances described in clauses (a), (b),
(c), (d), or (e) of the first sentence of Section 12.1. 
 12.3 Indemnification Procedures. Each Party’s
agreement to indemnify, defend, and hold harmless under Section 12.1 or 12.2, as applicable, is conditioned upon the indemnified party (a) providing written notice to the indemnifying Party of any claim, demand or action
arising out of the allegedly or actually indemnified matter as soon as reasonably possible, and in any event no later than within [*] days after the indemnified Party has actual knowledge of such claim, demand or action, (b) permitting the
indemnifying Party to assume control over the investigation of, preparation and defense against, and settlement or voluntary disposition of any such claim, demand or action, (c) assisting the indemnifying Party, as reasonably requested by the
indemnifying Party and at the indemnifying Party’s reasonable expense, in the investigation, preparation, defense, and settlement or voluntary disposition of any such claim, demand or action, (d) not compromising, settling, or entering
into any voluntary disposition of any such claim, demand or action without the indemnifying Party’s prior written consent, which consent shall not be unreasonably withheld, and (e) furnishing promptly to the indemnifying Party copies of
all notices and documents (including court papers) received by any indemnified party in connection with the Claim for which indemnification is being sought; provided, however, that, if the party entitled to indemnification hereunder fails to comply
with any of the foregoing conditions, the indemnifying Party will only be relieved of its indemnification obligation under this Agreement to the extent materially prejudiced by such failure. In no event may the indemnifying Party compromise, settle,
or enter into any voluntary disposition of any claim, demand or action subject to indemnification under this Section 12 in any manner that admits material fault or wrongdoing on the part of the indemnified party or incurs non-indemnified
liability on the part of the indemnified party without the prior written consent of the indemnified party, and in no event may the indemnifying Party settle, compromise, or agree to any voluntary disposition of any matter subject to indemnification
hereunder in any manner which may materially and adversely affect Cempra’s (or its Affiliates’ or its or its Affiliates’ licensees) ability to develop, manufacture, or commercialize API or Drug Products without Cempra’s prior
written consent. 
  

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

  
  

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 12.4 Limitation of Liability. IN NO EVENT SHALL EITHER PARTY OR ANY AFFILIATE THEREOF BE
LIABLE TO THE OTHER PARTY OR ANY AFFILIATE THEREOF FOR ANY CONSEQUENTIAL, INCIDENTAL, LIQUIDATED, SPECIAL OR INDIRECT DAMAGES OR LOSSES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, REGARDLESS OF ANY FAILURE OF ESSENTIAL PURPOSE OF ANY REMEDY
AVAILABLE UNDER THIS AGREEMENT; PROVIDED THAT, NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE FOREGOING SHALL NOT BE CONSTRUED TO LIMIT THE INDEMNITY OBLIGATIONS SET FORTH IN SECTIONS 12.1 AND 12.2 ABOVE, EITHER PARTY’S LIABILITY FOR PATENT
INFRINGEMENT OR BREACH OF ARTICLE 11, OR FFFC’S LIABILITY FOR ANY BREACH OF SECTION 6.4 OR 7.2. 
 Further, the total aggregate
liability of a Party to the other Party with respect to all claims under this Agreement shall be limited to the greater of (i) an amount equal to the total Transfer Price paid by Cempra to FFFC for the API hereunder in the twelve (12) months
preceding the first such claim or (ii) US$10,000,000; provided that, notwithstanding anything to the contrary, the foregoing shall not (x) be applicable to any claim under this Agreement resulting from FFFC’s gross negligence or
intentional misconduct or (y) be construed to limit FFFC’s indemnity obligations set forth in Sections 12.1 and 12.2 above, either Party’s liability for patent infringement or breach of Article 11, or FFFC’s
liability for any breach of Section 6.4 or 7.2, except, with respect to clause (y), with respect to such obligations under clause (b) of Section 12.1 of this Agreement with respect to claims made by, or losses of, Third
Parties with respect to any breach of contract or similar arrangement, any failure to perform under or comply with any contractual provision or similar obligation, or similar occurrence or on the basis of any similar theory or cause of action. 

 

	13.	INSURANCE 

 13.1 Coverage. During the period
starting from the date prior to validation campaign and ending at the date [*] years after the term of this Agreement, if issued on a claims made basis, FFFC shall maintain Commercial General Liability Insurance (including products liability
insurance) providing not less than $[*] per occurrence and $[*] in the aggregate. All coverage shall be underwritten by reputable underwriters. Promptly after the Effective Date, FFFC shall add Cempra as an additional insured under FFFC’s
policy. FFFC shall provide Cempra with a certificate of insurance upon request. FFFC shall provide Cempra with at least thirty (30) days prior written notice of any material change, cancellation or expiration of the above-required insurance.

 13.2 Review. On an annual basis, FFFC shall provide Cempra with a current certificate of coverage demonstrating that the coverage
specified in Section 13.1 is in force and shall immediately notify Cempra of any actual or threatened reduction, termination, non-renewal or materially adverse change in terms of coverage. FFFC shall provide Cempra with thirty
(30) days’ written notice of any cancellation or material change in the coverage specified in Section 13.1. FFFC represents and warrants that it has obtained and shall maintain all coverage, including its preparation of any
applications and endorsements in compliance with its obligations under the terms of coverage of such polices and shall otherwise comply with all requirements under such policies. Failure to maintain the insurance coverage as set forth in this
Section 13 shall be deemed a material breach of this Agreement. 
  

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

  
  

43 

	14.	DISPUTE RESOLUTION 

 14.1 Internal Mediation of
Dispute. In the event of any controversy or claim arising out of or relating to any provision of this Agreement or otherwise between the Parties or their Affiliates, the Parties shall try to settle the differences amicably through the Chief
Executive Officers of each Party (or, if none, highest ranking executive officer of a Party) for a period of [*] days. The designees shall be individuals who possess the authority to settle the dispute but who do not have direct responsibility for
administration of this Agreement. Any disputes not resolved by the Parties’ executive officers as set forth above within [*] days shall, upon written notice from either party to the other Party as set forth below, be finally and exclusively
resolved by confidential binding arbitration as provided in Section 14.2. 
 14.2 Arbitration. If the Chief Executive
Officers (or, if none, highest-ranking executive officers) are unable to resolve the dispute in accordance with Section 14.1, either Party will have the right to have the dispute resolved by binding arbitration, initiated by either Party
on [*] Business Days notice to the other party following expiration of the [*] day period referenced above (such notice, the “Initiation Notice”), under the Rules of Arbitration of the International Chamber of Commerce
(“ICC”) then pertaining, except where those rules conflict with this provision, in which case this provision controls, applying the laws of the State of New York, without regard to its conflicts of law provisions, before three
(3) independent, neutral arbitrators experienced in the pharmaceutical industry and manufacturing relationships in such industry. Cempra and FFFC shall each be entitled to select one (1) such arbitrator, with the two (2) such
arbitrators so selected selecting the third (3rd) such arbitrator. In the event either Party fails to select its arbitrator in accordance with the foregoing within [*] Business Days of the
Initiation Notice, the arbitrator selected by the other Party within such [*] Business Day period shall be entitled to select such arbitrator, and, to the extent all three such arbitrators are not selected within [*] Calendar Days of the Initiation
Notice, such arbitrators shall be appointed by the International Court of Arbitration of the ICC. Prior to the commencement of hearings, each of the arbitrators appointed must provide an oath of undertaking of impartiality. The decision of the
arbitrators will be final and binding on the Patties, and judgment upon the award or determination rendered by the arbitrators may be entered and enforced in any court of competent jurisdiction. The arbitration shall be conducted in English, and the
place of arbitration shall be New York, New York, USA. Each Party shall bear its own expenses and an equal share of the reasonable, documented expenses of the arbitration panel and any fees required by ICC to submit such matter to arbitration,
unless the panel determines that any such fees or expenses are to be paid by the non-prevailing Party, and the Parties hereby agree that the panel shall be entitled and empowered to make such a determination. 

14.3 Injunctions. Notwithstanding anything to the contrary in this Agreement, either Party will have the right to seek injunctive or
equitable relief in any court of competent jurisdiction as may be available to such Party under the laws and rules applicable in such jurisdiction with respect to any matters arising out of this Agreement. A Party seeking and/or obtaining
injunctions shall not be required to prove the amount, irreparability, immediacy or likelihood of damages, nor shall it be required to post any bond (the posting of which is irrevocably waived). 

 

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

  
  

44 

 14.4 Choice of Law. This Agreement shall be construed and the rights of the Parties shall
be determined in accordance with the laws of the State of New York, USA, without regard to its conflict of law provisions; provided, however, that patents and other intellectual property rights shall be construed and determined in accordance
with the laws of the country under which such rights are granted. In no event shall the provisions of this Agreement be governed by the United Nations Convention on Contracts for the International Sale of Goods. 

 

	15.	GENERAL PROVISIONS 

 15.1 Integration &
Severability. This Agreement, including its Exhibits, the Quality Agreement, and the Confidentiality Agreement, is the full and final negotiated agreement between the Parties regarding its subject matter. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of which together shall constitute a single agreement. In the event that any provision of this Agreement is judicially determined to be unenforceable, in part or in whole,
the remaining provisions or portions of this Agreement shall be valid and binding to the fullest extent possible, and the Parties shall endeavor to negotiate modified or additional terms, as feasible, in a timely manner so as to fully effectuate the
original intent of the Parties to the extent possible. 
 15.2 Waivers & Amendment. Any failure by a Party to enforce any
right which it may have hereunder in any instance shall not be deemed to waive any right which it or the other Party may have with respect to any provision of this Agreement, including the provision which such Party has failed to enforce. A waiver
of a breach shall not act as a waiver or release of any other breach, regardless if prior, contemporaneous or subsequent, known or unknown or of the same or different nature, cause, effect or provision of this Agreement. No provision of this
Agreement shall be waived, amended, supplemented or otherwise modified except in a writing signed by a duly authorized officer of each Party. 

15.3 Legal Relationship. The Parties acknowledge, agree, and declare that the relationship hereby established between them is solely
that of provider and recipient of manufacturing services and that each Party hereto is an independent contractor with respect to the other, and not as a joint venturer, partner, distributor or any other type of relationship, and shall not be
construed as an authorization of either Party to act as an agent of the other. Each may enter into similar or dissimilar arrangements with others and engage in activities for its own account, subject to their compliance with confidentiality and
other provisions of this Agreement. The Parties agree that they have performed and shall at all times perform this Agreement in good faith. 

15.4 Force Majeure. 

(a) Occurrences. Neither Party shall be responsible to the other Party for any failure, delay or interruption in the performance
of any of its obligations under this Agreement if such failure, delay or interruption is caused by a matter reasonably outside of the control of the Party, which may include, but shall not be limited to, fire, flood, typhoon, earthquake, epidemic,
riot, terrorist act, insurrection, war, failure or delay of normal sources of supply of materials, failure or delay of public utilities or carriers (“Force Majeure”), provided that the Party affected has used its best efforts
to avoid the effects of such occurrence and to perform its obligations notwithstanding such occurrence, and such occurrence is not due to any fault or neglect of such 

  
  

45 

 
Party. If a Party believes that the performance of any of its obligations under this Agreement will be delayed or interrupted as a result of any Force Majeure event, then it shall promptly notify
the other Party of the delay or interruption and the cause, shall use best efforts to perform its obligations notwithstanding the Force Majeure event, and shall provide the other Party with a good faith estimate of when performance of its
obligations will resume. When the Party affected by a Force Majeure event is able to recommence the performance of obligations delayed or interrupted as a result of the Force Majeure event, it shall notify the other Party and, except as otherwise
provided in this Agreement, it shall promptly resume performing its obligations. 
 (b) Production Assurance. For clarity,
FFFC shall not be entitled to invoke the provisions of this Section 15.4 as an excuse for default or delay in performance of its obligations under this Agreement based upon its need to do work for others or on its own behalf resulting in
constraints upon the availability of its manufacturing and packaging capacity, unless such constraints resulted from an event of Force Majeure as defined herein. In such an event, FFFC shall equitably allocate its available resources among its
various customers, including Cempra. Additionally, in the event FFFC cannot provide Cempra with API for more than [*] days due to a Force Majeure event, FFFC will notify Cempra and Cempra shall be entitled, at its option, to terminate or suspend
this Agreement in whole or in part upon written notice to FFFC. For clarification, during suspension of this Agreement as permitted in this Section 15.4(b), or if this Agreement is terminated pursuant to this Section 15.4(b),
Cempra may utilize one or more other sources for all of Cempra’s API requirements and shall not be obligated to purchase API that was ordered for delivery from FFFC during such time. Furthermore, a suspension of this Agreement shall only be
lifted, and the obligations of the parties resumed, after FFFC has demonstrated to the reasonable satisfaction of Cempra that FFFC has resolved the Force Majeure and can meet its obligations hereunder in full. 

15.5 Notice; Use of English. Any notice required or permitted to be given under this Agreement shall be in writing and shall be given
in person, delivered by recognized overnight delivery service, sent by mail (certified or registered or air mail for addresses outside of the continental United States), or by telefax (or other similar means of electronic communication), the receipt
of which is confirmed by confirming telefax, and addressed as indicated in Exhibit E, or such other person and/or address as may have been furnished in writing to the notifying Party of the change to such Exhibit. Except as otherwise
provided herein, any notice shall be deemed delivered upon the earlier of: (a) actual receipt; (b) three (3) business days after delivery to such recognized overnight delivery service; (c) five (5) business days after
deposit in the mail (ten (10) days for international mail); or (d) the date of receipt of the confirming telefax. All notices and other correspondence between the Parties shall be in English and English translations of all documents
originally prepared, provided, or obtained in Japanese or any other non-English language shall be provided to Cempra simultaneously with the non-English originals thereof at FFFC’s expense. 

 

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

  
  

46 

 15.6 Assignment. Neither Party may assign this Agreement, or any of its rights or
obligations hereunder, without the other Party’s prior written consent, which consent shall not be unreasonably withheld or delayed; provided that, notwithstanding the foregoing, Cempra shall be entitled, without FFFC’s prior
written consent, to assign or transfer this Agreement and Cempra’s rights and obligations hereunder: (i) in connection with the transfer or sale of all or substantially all of Cempra’s or any of its Affiliates’ assets or business
(or that portion thereof related to the subject matter of this Agreement), (ii) in the event of Cempra’s or any of its Affiliates’ merger, consolidation, reorganization, change of control or similar transaction, or (iii) to an
Affiliate of Cempra. Any purported assignment by a Party of this Agreement, or any of such Party’s rights or obligations hereunder, in violation of this Section 15.6 shall be null and void ab initio. 

15.7 Interpretation. All references to Sections shall refer to the Sections contained in this Agreement. All references to Exhibits
shall, except as otherwise explicitly provided, refer to the Exhibits of this Agreement, which are appended to and made part of this Agreement. The captions of the Sections of this Agreement are for general information and reference only and shall
not affect the interpretation of this Agreement. Where applicable in this Agreement, the singular includes the plural and vice versa. The term “including” shall be interpreted to mean “including without limitation”. English shall
be the official language of this Agreement and all communications between the Parties hereto shall be conducted in that language. Both Parties acknowledge that they were represented by competent legal counsel and advisors, and fully negotiated the
contract and each of its terms, and that ambiguities, if any, in this Agreement shall not be construed against any Party, irrespective of which Party may be deemed to have authored the ambiguous provision. 

«Signatures on Next Page» 

  
  

47 

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

									
	Cempra Pharmaceuticals, Inc.	 		 	FUJIFILM Finechemicals Co., Ltd.
					
	By:	 	 /s/ Prabhavathi Fernandes
	 		 	By:	 	 /s/ Masatoshi Kato

	Name:	 	Prabhavathi Fernandes	 		 	Name:	 	Masatoshi Kato
	Title:	 	President and CEO	 		 	Title:	 	President and CEO
					
	Date:	 	December 16, 2015	 		 	Date:	 	January 18, 2016

  
  

API MANUFACTURING AND SUPPLY AGREEMENT 

SIGNATURE PAGE 

 
 CONFIDENTIAL 

 Exhibit A 

Solithromycin 
  

 
 Chemical Formula: C43H65FN6O10 

Exact Mass: 844.47 
 Molecular
Weight: 845.02 
 CAS# 760981-83-7 

  
  

CONFIDENTIAL 

 Exhibit B 

[API Specifications*] 
  

							
	 Test
	  	 Method
	  	 Oral Grade

Acceptance Criteria

(Specification FP/IH/304995/4)
	  	 Parenteral Grade

Acceptance Criteria

(Specification FP/IH/304994/2)

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

  
  

CONFIDENTIAL 

							
	 Test
	  	 Method
	  	 Oral Grade

Acceptance Criteria

(Specification FP/IH/304995/4)
	  	 Parenteral Grade

Acceptance Criteria

(Specification FP/IH/304994/2)

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

  
  

CONFIDENTIAL 

 Additional Non Release Tests for Drug Substance 

 

							
	 Test
	  	 Method
Description
	  	 Oral Grade Acceptance Criteria
	  	 Parenteral Grade Acceptance Criteria

	 [*]
	  	[*]	  	[*]	  	[*]
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	 [*]
	  	[*]	  	[*]	  	[*]

 N/A = Not applicable 
  

	*	These are the current specifications as of Oct 2015. They are subject to revision. The current specifications in effect at the time of release should be used. 

 

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

  
  

CONFIDENTIAL 

 EXHIBIT C 

CEMPRA LICENSED PATENTS 

 

									
	 Title
	  	Country	  	 Application

Serial No.
	  	 Filing Date
	  	Patent No.
	Copper-Catalysed Ligation of Azides and Acetylenes	  	USA	  	60/385,041	  	30 May 2002	  	n/a
					
	Copper-Catalysed Ligation of Azides and Acetylenes	  	PCT	  	PCT/US03/17311	  	30 May 2003	  	n/a
					
	Copper-Catalysed Ligation of Azides and Acetylenes	  	Japan	  	2004-509665	  	30 May 2003	  	4638225
					
	Process for the Preparation of Macrolide Antibacterial Agents	  	USA	  	60/982,446	  	25 Oct 2007	  	n/a
					
	Process for the Preparation of Macrolide Antibacterial Agents	  	PCT	  	PCT/US2008/080936	  	23 Oct 2008	  	n/a
					
	Process for the Preparation of Macrolide Antibacterial Agents	  	Japan	  	2010-531238	  	23 Oct 2008	  	5698979
					
	Process for the Preparation of Macrolide Antibacterial Agents	  	Japan	  	2014-227753	  	23 Oct 2008	  	
					
	Morphological Forms of CEM-101, and Uses Therefor	  	USA	  	61/316,063	  	22 Mar 2010	  	n/a
					
	Crystalline Forms of a Macrolide, and Uses Therefor	  	PCT	  	PCT/US2011/029424	  	22 Mar 2011	  	n/a
					
	Crystalline Forms of a Macrolide, and Uses Therefor	  	Japan	  	2013-501396	  	22 Mar 2011	  	5711352
					
	Crystalline Forms of a Macrolide, and Uses Therefor	  	Japan	  	2014-231987	  	22 Mar 2011	  	
					
	Process For Preparing Triazole-Containing Ketolide Antibiotics	  	USA	  	61/346,664	  	20 May 2010	  	n/a
					
	Processes for Preparing Macrolides and Ketolides and Intermediates Therefor	  	PCT	  	PCT/US2011/037330	  	20 May 2011	  	n/a
					
	Processes for Preparing Macrolides and Ketolides and Intermediates Therefor	  	Japan	  	2013-511385	  	20 May 2011	  	
					
	Hydrogen Bond Forming Fluoro Ketolides for Treating Diseases	  	USA	  	61/381,794	  	10 Sep 2010	  	n/a
					
	Hydrogen Bond Forming Fluoro Ketolides for Treating Diseases	  	PCT	  	PCT/US2011/051064	  	9 Sep 2011	  	n/a

  
  

CONFIDENTIAL 

									
	 Title
	  	Country	  	 Application

Serial No.
	  	 Filing Date
	  	Patent No.
	Hydrogen Bond Forming Fluoro Ketolides for Treating Diseases	  	JP	  	2013-528344	  	9 Sep 2011	  	
					
	Convergent Process for the Preparation of Macrolide Antibacterial Agents	  	USA	  	61/786,914	  	15-Mar-2013	  	n/a
					
	Convergent Process for the Preparation of Macrolide Antibacterial Agents	  	PCT	  	PCT/US2014/29932	  	15-Mar-2014	  	n/a
					
	Stabilized Forms and Compositions of 4-ABA	  	USA	  	62/084,876	  	Nov 26, 2014	  	n/a
					
	Stabilized Forms and Compositions of 4-ABA	  	USA	  	62/112,672	  	06-Feb-2015	  	n/a
					
	Process for Preparing Fluorinated Ketolide Antibiotics	  	USA	  	62/129,305	  	06-Mar-2015	  	n/a

  
  

CONFIDENTIAL 

 EXHIBIT D 

Form of Certificate of Analysis 
  

 

  
  

CONFIDENTIAL 

 

 

  
  

CONFIDENTIAL 

 EXHIBIT E 

FFFC Facilities, Notices, Project Managers and Other Key Personnel 

Facility:      [*] 
 Address:
    [* ] 
 TEL: [*]     FAX: [*] 

Notices: 
  

					
	To Cempra:	 		 	To FFFC:

 Project Managers: 
  

					
	For Cempra:	 		 	For FFFC:
			
	[*]	 		 	[*]
			
	Executive Vice President, Business Development	 		 	General Manager, Marketing Department
			
	E-mail    [*]	 		 	E-mail    [*]
			
	TEL: [*]    FAX: [*]	 		 	TEL: [*]    FAX:    [*]

  

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

  
  

CONFIDENTIAL 

 Other Key Personnel: 
  

			
	For Cempra:	  	For FFFC:
		
	[*]	  	[*]
		
	Senior Vice President, Chemistry	  	General Manager,
		  	Production Engineering & Development Dept.
		
	E-mail    [*]	  	E-mail    [*]
		
	TEL:  [*]    FAX:  [*]	  	TEL:  [*]    FAX:  [*]
		
	[*]	  	[*]
		
	Vice President, Supply Chain	  	Manager,
		  	Organic Synthesis Research Laboratories
		
	E-mail    [*]	  	E-mail    [*]
		
	TEL:  [*]    FAX:  [*]	  	TEL:  [*]    FAX:  [*]
		
	[*]	  	[*]
		
	Director, Chemistry	  	 General Manager,
 HIRONO Factory Quality
Assurance Department

		
	E-mail    [*]	  	E-mail    [*]
		
	TEL:  [*]    FAX:  [*]	  	TEL:  [*]    FAX:  [*]
		
	[*]	  	
		
	Associate Director, Analytical Chemistry	  	
		
	E-mail    [*]	  	
		
	TEL:  [*]    FAX:  [*]	  	

  

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

  
  

CONFIDENTIAL 

 EXHIBIT F 

Copy of Quality Agreement 
 To be attached
once agreed upon by the Parties. 

  
  

CONFIDENTIAL 

 EXHIBIT G 

Work Plan for Registration Batches Manufacturing 

To be attached once agreed upon by the Parties. 

  
  

CONFIDENTIAL 

 EXHIBIT H 

Work Plan for Validation Campaign 
 To be
attached once agreed upon by the Parties. 

  
  

CONFIDENTIAL 

 EXHIBIT I 

Stability Study Protocols 
 To be attached
once agreed upon by the Parties. 

  
  

CONFIDENTIAL 

 EXHIBIT J 

Transfer Price 
  

			
	 Transfer Price per kg
*1
	  	
Quantities of API Ordered for Delivery

Per Month Period *2

	No more than US$[*]	  	Equal or more than [*] kg
		
	No more than US$[*]	  	Equal or more than [*] kg and less than [*] kg
		
	No more than US$[*]	  	Equal or more than [*] kg and less than [*] kg
		
	No more than US$[*]	  	Equal or more than [*] kg and less than [*] kg
		
	No more than US$[*]	  	Equal or more than [*] kg and less than [*] kg
		
	Subject to the reasonable quotation made by FFFC, and accepted in writing by Cempra, separately on an as-needed basis	  	Less than [*] kg

  

	* 1	Each price does not include Japanese consumption tax imposed on the sale of API to Cempra under this Agreement. 

	* 2	If the Agreement terminates or expires on any day other than the last day of a Month Period, the Transfer Price for API ordered for delivery during that portion of the Term following the end of the last complete Month
Period ending prior to such expiration or termination (such portion of the Term, the “Final Period”) shall, notwithstanding anything to the contrary, be calculated by dividing the quantity of API ordered for delivery during such Final
Period by the number of the days of such Final Period and multiplying the number of such calculation’s result by 365, with the result of such calculation being used as the “Quantities of API Ordered for Delivery Per Month Period” in
the table above to calculate the Transfer Price of API ordered for delivery during such Final Period. 

 Provided, however, that: 

 

	 	•	 	If the above Transfer Price becomes apparently unreasonable because of significant change of the economic environment applicable to the manufacture of API by FFFC, and either Party requests to the other Party the
revision of such Transfer Price, the Parties shall use reasonable efforts to negotiate about a new Transfer Price applicable to the next Month Period or thereafter in good faith, provided that (i) the above-referenced obligation shall not
require either party to agree to any new Transfer Price and (ii) the Transfer Price shall not be changed unless and until written agreement is reached by both Parties. 

 

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

  
  

CONFIDENTIAL 

	 	•	 	If any change of API Manufacture Procedures, quality requirements, API Specifications, or other related matters of API requested pursuant to Cempra’s (or its Affiliate’s or its or its Affiliate’s
licensee’s) instruction or direction following the Effective Date increases, by an amount greater than [*] percent ([*]%) of FFFC’s prior manufacturing cost (as calculated for the certain pricing tier set forth in the table above that will
be applicable based on the quantities of API which are forecasted and/or scheduled to be ordered for delivery during the Month Period to which such increase applies and as compared to the previously-effective costs for such quantities of API during
the prior Month Period), the manufacturing cost born by FFFC, FFFC shall notify Cempra promptly in writing of any such increase in FFFC’s direct cost of manufacturing API hereunder (including the amount of such increase) and, if Cempra elects
in writing to proceed with such change following receipt of such notice, the Transfer Price shall be revised by mutual reasonable good-faith consultation between the Parties based on the new quotation issued by FFFC, provided that (i) any such
increase in Transfer Price shall not exceed the increase in direct cost to FFFC of any such change and (ii) FFFC shall not proceed with any such change unless directed to do so by Cempra following Cempra’s receipt of notice of the relevant
proposed change in Transfer Price. For clarity, in the absence of any agreement between the Parties regarding any increase in Transfer Price as a result of any requested changes of Cempra under this paragraph, FFFC shall not be required to
manufacture any API pursuant to any such change in API Manufacture Procedures, quality requirements, API Specifications, or other related matters of API, and Cempra shall not be required to bear any increase in Transfer Price resulting therefrom.

 The Transfer Price in the table above to be applied pursuant to this Exhibit J for purposes of Sections 1.46, 4, 5.4, and 6.2 shall
initially be (i) for the [*] [*] Month Periods, US$[*] per kilogram of API and, for all Month Periods other than the [*] [*] Month Periods, (ii) calculated based on the amounts of API forecasted for order and delivery during a particular
Month Period based on the initial Forecast covering all twelve (12) months of such Month Period (such initial Forecast, the “Initial Forecast”, such initial price under the preceding clause (i) or clause (ii), the
“Forecast-Based Price”) and then, following the end of such Month Period, recalculated based on the actual amounts of API actually ordered for delivery during such Month Period pursuant to Purchase Orders placed by Cempra (such
recalculated price, the “Final Price”). If the amount of API forecasted for order and delivery during a particular Month Period, as reflected by any Forecasts, following the Initial Forecast, covering any portion of such Month
Period, are materially inconsistent with the corresponding amount forecasted in the Initial Forecast (or any other previous Forecast following the Initial Forecast), the Parties shall, upon written notice from either Party to the other Party, use
reasonable efforts to work together in good faith to mutually agree on a revised Forecast-Based Price for the remaining portion of such Month Period intended to minimize the difference between the total Forecast-Based Prices paid or due for API
delivered in such Month Period and the total Final Price applicable to API delivered in such Month Period. 

  
  

CONFIDENTIAL 

 Wire Instructions 
  

					
		  		 	FFFC Account Number [*]
			
	Bank Name:	  	[*]	 	
	Branch Name:	  	[*]	 	
			
	Account Name:	  	[*]	 	
	Account #:	  	[*]	 	[*]

  

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

  
  

CONFIDENTIAL 

 EXHIBIT K 

Cempra API Patents 
  

									
	 Title
	  	Country	  	Application
Serial No.	  	Filing Date	  	Patent No.
	 Process for the Preparation of Macrolide Antibacterial Agents
	  	Japan	  	2010-531238	  	23 Oct 2008	  	5698979
					
	 Process for the Preparation of Macrolide Antibacterial Agents
	  	Japan	  	2014-227753	  	23 Oct 2008	  	
					
	 Crystalline Forms of a Macrolide, and Uses Therefor
	  	Japan	  	2013-501396	  	22 Mar 2011	  	5711352
					
	 Crystalline Forms of a Macrolide, and Uses Therefor
	  	Japan	  	2014-231987	  	22 Mar 2011	  	
					
	 Processes for Preparing Macrolides and Ketolides and Intermediates Therefor
	  	Japan	  	2013-511385	  	20 May 2011	  	
					
	 Convergent Process for the Preparation of Macrolide Antibacterial Agents
	  	PCT	  	PCT/US2014/29932	  	15-Mar-2014	  	n/a
					
	 Process for Preparing Fluorinated Ketolide Antibiotics
	  	USA	  	62/129,305	  	06-Mar-2015	  	n/a

  
  

CONFIDENTIAL 

 EXHIBIT L 

Depreciation Schedule 
 [million
dollar]         
  

																					
	 Year
	  	 	  	2017	 	2018	 	2019	 	2020	 	2021	 	2022	 	2023	 	2024	 	2025
	 Construction investment
	  		  	17.50	 		 		 		 		 		 		 		 	
	 Depreciation cost
	  	 Machine ([*] Years)

Building ([*] Years)
	  	[*]
 [*]
	 	[*]
 [*]
	 	[*]
 [*]
	 	[*]
 [*]
	 	[*]
 [*]
	 	[*]
 [*]
	 	[*]
 [*]
	 	[*]
 [*]
	 	[*]
 [*]

	 Remaining book value
	  		  	16.18	 	14.43	 	12.67	 	10.91	 	9.15	 	7.39	 	5.63	 	3.88	 	3.33

 FFFC would require that Cempra have obligation of compensation until 2025 for FFC’s investment, depreciation cost. 

 

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

  
  

CONFIDENTIALEX-10.1

 Exhibit 10.1 

FORM OF 
 TAX MATTERS
AGREEMENT 
 between 

EMERSON ELECTRIC CO., 

on behalf of itself 
 and the
members 
 of the Distributing Group, 

and 
 Vertiv Co., 

on behalf of itself 
 and the
members 
 of the Controlled Group 

Dated as of [            ], 2016 

 TAX MATTERS AGREEMENT 

This TAX MATTERS AGREEMENT (the “Agreement”) is entered into as of
[            ], 2016 between Emerson Electric Co. (“Distributing”), a Missouri corporation, on behalf of itself and the members of the Distributing Group, as defined below,
and Vertiv Co. (“Controlled,” and together with Distributing, the “Parties”), a Delaware corporation, on behalf of itself and the members of the Controlled Group, as defined below. 

WITNESSETH: 
 WHEREAS, pursuant
to the tax laws of various jurisdictions, certain members of the Controlled Group presently file certain tax returns on an affiliated, consolidated, combined, unitary, fiscal unity or other group basis (including as permitted by Section 1501 of
the Internal Revenue Code of 1986, as amended (the “Code”)) with certain members of the Distributing Group; 
 WHEREAS,
Distributing and Controlled have entered into a Separation and Distribution Agreement, dated as of [            ], 2016 (the “Distribution Agreement”), providing for the
distribution by Distributing to its shareholders of all of the common stock of Controlled that is held by Distributing (the “Distribution”) and certain other matters; 

WHEREAS, Distributing and Controlled desire to set forth their agreement on the rights and obligations of Distributing, Controlled and the
members of the Distributing Group and the Controlled Group, respectively, with respect to (A) the handling and allocation of federal, state, local and foreign taxes incurred in taxable periods beginning prior to the Distribution Date, as
defined below, (B) taxes resulting from the Distribution and transactions effected in connection with the Distribution and (C) various other tax matters; 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties agree as follows: 

SECTION 1. Definitions. 

(a) As used in this Agreement: 

“Active Trade or Business” shall mean, (i) with respect to Controlled, the active conduct (as defined in
Section 355(b)(2) of the Code and the regulations thereunder) of the NP Business, or (ii) with respect to any other Separation Transaction intended to qualify as tax-free pursuant to Section 355 of the Code or analogous provisions of
state or local law, the active conduct (as defined in Section 355(b)(2) of the Code and the regulations thereunder or the analogous provisions of state or local law) by the relevant member of the Controlled Group of the NP Business relating to
such Controlled Group member, as conducted immediately prior to such Separation Transaction. 

  
 2 

 “Adjustment Request” means any formal or informal claim or request filed with
any Taxing Authority, or with any administrative agency or court, for the adjustment, refund, or credit of Taxes, including (a) any amended Return claiming adjustment to the Taxes as reported on a Return, (b) any claim for equitable
recoupment or other offset, and (c) any claim for Refund of Taxes previously paid. 
 “Affiliate” shall mean, when
used with respect to a specified Person, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person. For the purpose of this definition,
“control,” when used with respect to any specified Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of
voting securities or other interests, by contract or otherwise. It is expressly agreed that, from and after the Distribution Date, no member of the Distributing Group shall be deemed to be an Affiliate of any member of the Controlled Group, and no
member of the Controlled Group shall be deemed to be an Affiliate of any member of the Distributing Group. 
 “After-Tax
Amount” shall mean an additional amount equal to the hypothetical incremental Tax liability resulting from the receipt or accrual of any payment (including a payment of the After-Tax Amount), using the maximum statutory rate (or rates, in
the case of an item that affects more than one Tax) applicable to the recipient of such payment for the relevant Taxable period, reflecting, for example, the effect of the deductions available for interest paid or accrued and for Taxes, such as
state and local income Taxes. For the avoidance of doubt, the After-Tax Amount shall include any amount for or on account of any Tax that is required to be withheld or deducted from any payment. 

“Agreement” shall have the meaning ascribed thereto in the preamble hereto. 

“Applicable Law” means, with respect to any Person, any federal, state, local or foreign law (statutory, common or
otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling, directive, guidance, instruction, direction, permission, waiver, notice, condition, limitation, restriction or prohibition
or other similar requirement enacted, adopted, promulgated, imposed, issued or applied by a Governmental Authority that is binding upon or applicable to such Person, its properties or assets or its business or operations, as amended unless expressly
specified otherwise. 
 “ASCO Power Charitable Contribution” shall mean the charitable donation of certain real property
(the “Donation Property”) by ASCO Power Technologies, L.P., a Delaware limited partnership (“ASCO Power”) to Emerson Charitable Trust, a Missouri trust (the “Trust”), to be effected pursuant to the
Agreement for Conveyance of Real Property entered into on October 23, 2015 by and between ASCO Power and the Trust. 

“Business Day” shall mean a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are
authorized or required by Applicable Law to close. 

  
 3 

 “Canadian Reorganization” shall mean the divisive reorganization of Emerson
Electric Canada Limited under paragraph 55(3)(b) of the ITA, and related transactions, undertaken in connection with the Restructuring. 

“Canadian Ruling” shall mean the advance income tax ruling in respect of the Canadian Reorganization issued to Distributing
or the relevant member of the Distributing Group by the Canada Revenue Agency prior to the Distribution Date, and includes all supplemental rulings, requests for rulings, information and legal submissions and exhibits to the foregoing. 

“Canadian TC” shall mean the transferee corporation (as defined in the definition of “distribution” in subsection
55(1) of the ITA) incorporated under the laws of British Columbia as part of the Canadian Reorganization. 
 “Closing of the Books
Method” shall mean the apportionment of items between portions of a Taxable period based on a closing of the books and records on the close of the Distribution Date (in the event that the Distribution Date is not the last day of the Taxable
period, as if the Distribution Date were the last day of the Taxable period), subject to adjustment for items accrued on the Distribution Date that are properly allocable to the Taxable period following the Distribution, as determined by
Distributing in accordance with Applicable Law; provided that any items not susceptible to such apportionment shall be apportioned on the basis of elapsed days during the relevant portion of the Taxable period. 

“Code” shall have the meaning ascribed thereto in the recitals hereto. 

“Combined Group” shall mean any group that filed or was required to file (or will file or be required to file) a Return on a
consolidated, combined or unitary basis that includes at least one member of the Distributing Group and at least one member of the Controlled Group. 

“Combined Return” shall mean a Return filed in respect of federal, state, local or foreign Income Taxes for a Combined Group.

 “Company” shall mean Distributing or Controlled (or the appropriate member of each of their respective Groups), as
appropriate. 
 “Compensatory Equity Interests” shall mean any options, stock appreciation rights, restricted stock, stock
units or other rights with respect to Distributing Stock or Controlled Stock that are granted on or prior to the Distribution Date by any member of the Distributing Group or any member of the Controlled Group in connection with employee, independent
contractor or director compensation or other employee benefits (including, for the avoidance of doubt, options, stock appreciation rights, restricted stock, stock units or other rights issued in respect of any of the foregoing by reason of the
Distribution or any subsequent transaction). 
 “Controlled” shall have the meaning ascribed thereto in the recitals
hereto. 
 “Controlled Business” shall mean the NP Business. 

  
 4 

 “Controlled Carried Item” shall mean any Tax Attribute of the Controlled Group
that may or must be carried from one Taxable Period to another prior Taxable Period, or carried from one Taxable Period to another subsequent Taxable Period, under the Code or other Applicable Law. 

“Controlled Group” shall mean Controlled and each of its direct and indirect Subsidiaries immediately after the Distribution,
including any predecessors thereto (other than those entities comprising the Distributing Group). For the avoidance of doubt, any reference herein to the “members” of the Controlled Group shall include Controlled. 

“Controlled Separate Return” shall mean a Separate Return of or including any member of the Controlled Group. 

“Distributing” shall have the meaning ascribed thereto in the recitals hereto. 

“Distributing Business” shall mean the Emerson Business, as defined in the Distribution Agreement. 

“Distributing Group” shall mean Distributing and each of its direct and indirect Subsidiaries immediately after the
Distribution, including any predecessors thereto (other than those entities comprising the Controlled Group). For the avoidance of doubt, any reference herein to the “members” of the Distributing Group shall include Distributing. 

“Distributing Separate Return” shall mean a Separate Return of or including any member of the Distributing Group. 

“Distribution” shall have the meaning ascribed thereto in the recitals hereto. 

“Distribution Agreement” shall have the meaning ascribed thereto in the recitals hereto. 

“Distribution Date” shall mean the date on which the Distribution occurs. 

“Emerson Contribution” shall have the meaning ascribed thereto in the Distribution Agreement. 

“Equity Interests” shall mean any stock or other securities treated as equity for tax purposes, options, warrants, rights,
convertible debt, or any other instrument or security that affords any Person the right, whether conditional or otherwise, to acquire stock or to be paid an amount determined by reference to the value of stock. 

“Final Determination” shall mean (i) with respect to U.S. federal Income Taxes, (A) a “determination” as
defined in Section 1313(a) of the Code (including, for the avoidance of doubt, an executed IRS Form 906) or (B) the execution of an IRS Form 870-AD (or any successor form thereto), as a final resolution of Tax liability for any Taxable
period, except that a Form 870-AD (or successor form thereto) that reserves the right of the taxpayer to file a claim for Refund or the right of the IRS to assert a further deficiency shall not constitute a Final Determination with

  
 5 

 
respect to the item or items so reserved; (ii) with respect to Taxes other than U.S. federal Income Taxes, any final determination of liability in respect of a Tax that, under Applicable
Law, is not subject to further appeal, review or modification through proceedings or otherwise; (iii) with respect to any Tax, any final disposition by reason of the expiration of the applicable statute of limitations; or (iv) with respect
to any Tax, the payment of such Tax by any member of the Distributing Group or any member of the Controlled Group, whichever is responsible for payment of such Tax under Applicable Law, with respect to any item disallowed or adjusted by a Taxing
Authority, provided, in the case of this clause (iv), that the provisions of Section 15 hereof have been complied with, or, if such section is inapplicable, that the Company responsible under this Agreement for such Tax is notified by the
Company paying such Tax that it has determined that no action should be taken to recoup such disallowed item, and the other Company agrees with such determination. 

“Foreign TC” shall mean the transferee corporation (as defined in the definition of “distribution” in subsection
55(1) of the ITA) incorporated under the laws of England and Wales as part of the Canadian Reorganization. 
 “Gain Recognition
Agreement” shall mean a gain recognition agreement as described in Treasury Regulations Section 1.367(a)-8 or any successor provision thereto. 

“Group” shall mean the Controlled Group or the Distributing Group, as appropriate. 

“Income Tax” shall mean any U.S. federal, state, local or foreign Tax that is, in whole or in part, based on or measured by
net income or gains. 
 “IRS” shall mean the United States Internal Revenue Service. 

“ITA” shall mean the Income Tax Act (Canada), R.S.C. 1985, 5th Supplement, as amended. 

“Joint Return” shall mean any (i) Combined Return or (ii) Return that includes Tax Items attributable to both the
Distributing Business and the Controlled Business. 
 “Non-Income Tax” shall mean any Tax that is not an Income Tax. 

“NP Business” shall have the meaning ascribed thereto in the Distribution Agreement. 

“Parties” shall have the meaning set forth in the preamble hereto. 

“Person” shall have the meaning ascribed to it in Section 7701(a)(1) of the Code. 

“Post-Distribution Period” shall mean any Taxable period (or portion thereof) beginning after the Distribution Date. 

“Pre-Distribution Period” shall mean any Taxable period (or portion thereof) ending on or before the Distribution Date. 

  
 6 

 “Proposed Acquisition Transaction” shall have the meaning ascribed thereto in
Section 9(b)(vii) of this Agreement. 
 “Restructuring” shall have the meaning ascribed thereto in the Distribution
Agreement. 
 “Return” shall mean any Tax return, statement, report, form, election, claim or surrender (including
estimated Tax returns and reports, extension requests and forms, and information returns and reports) filed or required to be filed with any Taxing Authority. 

“Separate Return” shall mean any Return required to be filed by a member of the Distributing Group or a member of the
Controlled Group that is not a Joint Return. 
 “Separation Transactions” shall mean the Emerson Contribution, Distribution
and all other transactions contemplated by the Restructuring. 
 “Separation Taxes” shall mean any Taxes (including, for
the avoidance of doubt, Income Taxes and Transfer Taxes) imposed on any member of the Distributing Group or Controlled Group arising from, or attributable to, any transfer of assets or liabilities in connection with the Separation Transactions that
are incurred on or prior to the Distribution, but that are not and do not give rise to Tax-Related Losses. 
 “Straddle
Period” shall mean any Tax period that begins on or before and ends after the Distribution Date. 
 “Subsidiary”
of any Person shall mean any corporation, partnership or other entity directly or indirectly owned more than 50 percent (by vote or value) by such Person. 

“Tax” (and the correlative meaning, “Taxes,” “Taxing” and “Taxable”) shall
mean (i) any tax imposed under Subtitle A of the Code, or any net income, gross income, gross receipts, alternative or add-on minimum, sales, use, business and occupation, value-added, trade, goods and services, ad valorem, franchise, profits,
license, business royalty, withholding, payroll, employment, capital, excise, transfer, recording, severance, stamp, occupation, premium, property, asset, real estate acquisition, environmental, custom duty, or other tax, governmental fee or other
like assessment or charge of any kind whatsoever, together with any interest and any penalty, addition to tax or additional amount imposed by a Taxing Authority; or (ii) any liability of any member of the Distributing Group or any member of the
Controlled Group for the payment of any amounts described in clause (i) as a result of any express or implied obligation to indemnify any other Person. 

“Tax Advisor” shall mean, with respect to U.S. Tax matters, a U.S. Tax counsel or accounting firm of recognized national
standing, and, with respect to non-U.S. Tax matters, a local Tax counsel or accounting firm of recognized national standing in the relevant jurisdiction. 

“Tax Attribute” shall mean a net operating loss, net capital loss, unused investment credit, unused foreign tax credit,
excess charitable contribution, general business credit, the alternative minimum tax credit, or any other Tax item that could reduce a Tax liability. 

  
 7 

 “Tax Benefit” shall mean any refund, credit, offset or other reduction in
otherwise required Tax payments. 
 “Tax-Free Status” shall mean (i) the qualification of the Emerson Contribution and
Distribution as (A) a reorganization described in Sections 355(a) and 368(a)(1)(D) of the Code, (B) a transaction in which the stock distributed thereby is “qualified property” for purposes of Sections 355(d), 355(e) and 361(c)
of the Code and (C) a transaction in which Distributing, Controlled, and the shareholders of Distributing recognize no income or gain for U.S. federal income tax purposes pursuant to Sections 355, 361 and 1032 of the Code (except with respect
to fractional shares), and (ii) the qualification of any other Separation Transaction to be free from Tax, whether U.S. federal, state or local or foreign Tax, but only to the extent such transaction was intended by the parties to be free from
such Tax, including as described in the Tax Opinions/Canadian Ruling. Such term does not include, in the case of Distributing or Controlled, any intercompany items or excess loss accounts taken into account pursuant to the Treasury Regulations
promulgated under Section 1502 of the Code. 
 “Tax Item” shall mean any item of income, gain, loss, deduction, credit
recapture of credit or any other item that increases or decreases Taxes paid or payable. 
 “Tax Opinions” shall mean
(i) the legal opinion delivered to Distributing by Davis Polk & Wardwell LLP with respect to certain U.S. federal Income Tax consequences of the Emerson Contribution, SpinCo Cash Payment and Distribution and (ii) any other
written opinions, memoranda or similar written correspondence on the U.S. federal, state, local and non-U.S. tax consequences of certain aspects of the Separation Transactions provided by any Tax Advisor to any member of the Distributing Group,
including the documents listed on Exhibit [A] hereto. 
 “Tax Opinions/Canadian Ruling” shall mean the Tax Opinions and/or
the Canadian Ruling deliverable to any member of the Distributing Group in connection with the Separation Transactions. 
 “Tax
Proceeding” shall mean any Tax audit, dispute, proceeding, investigation or review (whether administrative, judicial, contractual, formal or informal). 

“Tax-Related Losses” means (i) all Taxes (including interest and penalties thereon) imposed pursuant to any settlement,
determination, judgment or otherwise; (ii) all accounting, legal and other professional fees, and court costs incurred in connection with such Taxes, as well as any other out-of-pocket costs incurred in connection with such Taxes and
(iii) all damages, costs, and expenses associated with stockholder litigation or controversies and any amount paid by any member of the Distributing Group or any member of the Controlled Group in respect of the liability of shareholders,
whether paid to shareholders or to the IRS or any other Taxing Authority, in each case, resulting from the failure of the Tax-Free Status or from the failure of a Separation Transaction to have the tax treatment described in the Tax
Opinions/Canadian Ruling. 

  
 8 

 “Taxing Authority” shall mean any Governmental Authority (domestic or foreign),
including, without limitation, any state, local, municipality, political subdivision or governmental agency, responsible for the imposition of any Tax. 

“Transaction Tax Proceeding” means a Tax Proceeding with the purpose or effect of determining or redetermining the Tax
liability in respect of any Separation Transaction that could give rise to Tax-Related Losses. 
 “Transfer Taxes” means
all U.S. federal, state, local or foreign sales, business, value-added, consumption, use, privilege, transfer, documentary, stamp, duties, recording and similar Taxes and fees (including any penalties, interest or additions thereto) imposed upon any
member of the Distributing Group or any member of the Controlled Group in connection with the Separation Transactions. 
 (b) All
capitalized terms used but not defined herein shall have the same meanings as in the Distribution Agreement. Any term used in this Agreement which is not defined in this Agreement or the Distribution Agreement shall, to the extent the context
requires, have the meaning assigned to it in the Code or the applicable Treasury Regulations thereunder (as interpreted in administrative pronouncements and judicial decisions) or in comparable provisions of Applicable Law. 

SECTION 2. Sole Tax Sharing Agreement. Any and all existing Tax sharing agreements or arrangements, written or unwritten,
between any member of the Distributing Group, on the one hand, and any member of the Controlled Group, on the other hand, if not previously terminated, shall be terminated as of the Distribution Date without any further action by the parties
thereto. Following the Distribution, (i) neither the members of the Controlled Group nor the members of the Distributing Group shall have any further rights or liabilities under any such Tax sharing agreements or arrangements terminated as of
the Distribution Date, and (ii) this Agreement and the Transfer Agreements (to the extent such Transfer Agreements reflect an agreement between the Parties as to Tax sharing) shall be the sole arrangements between the members of the Controlled
Group, on the one hand, and the members of the Distributing Group, on the other hand, with respect to the sharing of Taxes. For the avoidance of doubt, no Transfer Agreement, including any provisions therein relating to Taxes, shall be considered a
Tax sharing agreement or arrangement for purposes of this Section 2. 
 SECTION 3. Allocation of Taxes. 

(a) Income Taxes. Except as provided in Section 3(c), all Income Taxes shall be allocated as follows: 

(i) Allocation of Income Taxes Reflected on Joint Returns. Distributing shall be allocated all Income Taxes reported, or
required to be reported, on any Joint Return that any member of the Distributing Group or Controlled Group files or is required to file under the Code or Applicable Law; provided, however, that to the extent that any such Joint Return
includes any Tax Item attributable to (A) any member of the Controlled Group or (B) the Controlled Business, in each case, for any Post-Distribution Period, Controlled shall be allocated all Income Taxes (as determined by Distributing
based on the Closing of the Books Method) attributable to such Tax Items. 

  
 9 

 (ii) Allocation of Income Taxes Reflected on Separate Returns.
Distributing shall be allocated all Income Taxes that are attributable to members of the Distributing Group and reported, or required to be reported, on a Distributing Separate Return. Controlled shall be allocated all Income Taxes that are
attributable to members of the Controlled Group and reported, or required to be reported, on a Controlled Separate Return. 
 (b)
Non-Income Taxes. 
 (i) Except as provided in Section 3(c) and in any of the Transfer Agreements, Distributing
shall be allocated all Non-Income Taxes that are attributable to the Distributing Business and Controlled shall be allocated all Non-Income Taxes attributable to the Controlled Business, in each case, as determined under Section 3(b)(ii). 

(ii) Determination of Tax Attributable to Distributing Business and Controlled Business. For purposes of this
Section 3(b), the amount of Taxes attributable to either the Distributing Business or the Controlled Business shall be determined by Distributing in a manner consistent with the past Return filing practices of the Distributing Group with
respect to the relevant Return (including any past accounting methods, elections and conventions). In determining the amount of Taxes attributable to either the Distributing Business or Controlled Business for any Pre-Distribution Tax Period, the
Parties shall include the results from operations arising from the Distributing Business and the Controlled Business (or assets relating thereto) during such Tax Period based on whether such operations (or assets) were operated or owned by a member
of the Distributing Group or Controlled Group; provided, however, that to the extent any liability for Taxes relating to the results from operations arising from the Controlled Business (or asset relating thereto) for a Pre-Distribution
Period has not been paid on or before the Distribution Date or included as a specific liability or reserve in the U.S. GAAP financial accounts of the Distributing Group for the period that includes the Distribution Date, then any liability for such
Taxes shall be allocated to Controlled. To the extent any further determination or clarification is required to allocate any Tax or Tax Item between the Distributing Business and the Controlled Business, the allocation of such Tax or Tax Item shall
be performed based on any reasonable methodology as determined by Distributing in good faith. 
 (c) Special Allocation Rules.
Notwithstanding any other provision in this Section 3, the following Taxes shall be allocated as follows: 
 (i)
Separation Taxes. Separation Taxes shall be allocated as provided by Applicable Law or as otherwise provided in any specific agreements, including this Agreement and the Transfer Agreements, governing the Separation Transactions. 

  
 10 

 (ii) Tax-Related Losses. Any liability for Tax-Related Losses resulting
from a breach by any member of the Controlled Group of any representation or covenant made by the members of the Controlled Group under this Agreement shall be allocated in a manner consistent with Section 11(a)(ii). 

(iii) Taxes Relating to Compensatory Equity Interests. Any Tax liability (including, for the avoidance of doubt, the
satisfaction of any withholding Tax obligation) relating to the issuance, exercise, vesting or settlement of any Compensatory Equity Interest shall be allocated in a manner consistent with Section 7. 

(iv) Taxes Covered by Transfer Agreements. Any liability or other matter relating to Taxes that is specifically
addressed (including by way of assumption or allocation) in any Transfer Agreement shall be allocated or governed as provided in such Transfer Agreement. 

SECTION 4. Preparation and Filing of Returns. 

(a) Responsibility for Preparing Returns 

(i) Distributing Prepared Returns. Distributing shall prepare, or cause to be prepared, all (i) Joint Returns and
(ii) Distributing Separate Returns. If a member of the Controlled Group is responsible for the filing of any such Return under Applicable Law, Distributing shall, subject to the procedures set forth in Section 4(b), deliver such prepared
Return to Controlled reasonably in advance of the applicable filing deadline. 
 (ii) Controlled Prepared Returns.
Controlled shall prepare, or cause to be prepared, any Controlled Separate Returns. 
 (iii) Transfer Tax Returns. The
Company required under Applicable Law to file any Returns in respect of Transfer Taxes shall prepare and file (or cause to be prepared and filed) such Returns. If required by Applicable Law, Distributing and Controlled shall, and shall cause their
respective Affiliates to, cooperate in preparing and filing, and join in the execution of, any such Returns. 
 (b) Cooperation 

(i) Determination of Responsible Party. Distributing, in consultation with Controlled, shall determine which of them or
their respective Affiliates is required to file any Joint Return or Separate Return under Applicable Law. 
 (ii)
Provision of Information. Each Party (A) shall provide to the other Party (in the format reasonably determined by the other Party) all information and assistance requested by the other Party as reasonably necessary to prepare any Return
described in Section 4(a) on a timely basis consistent with the current practices of the Distributing Group in preparing Returns and (B) in so providing such information and assistance, shall use any systems and third party service
providers as are consistent with the current practices of the Distributing Group in preparing Returns. 

  
 11 

 (iii) Right to Review. The Party responsible for preparing (or causing to
be prepared) any material Return under this Section 4 shall make such Return and related workpapers available for review by the other Party, if requested, to the extent (A) such Return relates to Taxes for which the requesting Party would
reasonably be expected to be liable, (B) such Return relates to such Taxes described in clause (A) and the requesting Party would reasonably be expected to be liable in whole or in part for any additional Taxes owing as a result of
adjustments to the amount of such Taxes reported on such Return, (C) such Return relates to Taxes for which the requesting Party would reasonably be expected to have a claim for Tax Benefits under this Agreement, or (D) the requesting
Party reasonably determines that it must inspect such Return to confirm compliance with the terms of this Agreement. The Party responsible for preparing (or causing to be prepared) the relevant Return shall (x) use its reasonable best efforts
to make such portion of such Return available for review as required under this paragraph sufficiently in advance of the due date for filing of such Return to provide the requesting Party with a meaningful opportunity to analyze and comment on such
Return and (y) use reasonable efforts to have such Return modified before filing, taking into account the Person responsible for payment of the Tax (if any) reported on such Return and whether the amount of Tax liability allocable to the
requesting Party with respect to such Return is material. The Parties shall attempt in good faith to resolve any issues arising out of the review of such Return. 

(iv) Material Returns. For purposes of Section 4(b)(iii), a Return is “material” if it could reasonably
be expected to reflect (A) Tax liability equal to or in excess of $1 million, (B) a credit or credits equal to or in excess of $1 million or (C) a loss or losses equal to or in excess of $3 million, in each case with respect to the
requesting Party. 
 (c) Tax Reporting and Accounting Practices 

(i) General Rule. Except as provided in this Section 4(c)(i), Distributing shall prepare (or caused to be prepared)
any Return for which it is responsible under this Section 4 in accordance with past practices, accounting methods, elections or conventions (“Past Practices”) used by Distributing with respect to such Return, and to the extent
any items, methods or positions are not covered by Past Practices, in accordance with reasonable Tax accounting practices selected by Distributing. With respect to any Return that Controlled has the obligation and right to prepare, or cause to be
prepared, under this Section 4, for any Pre-Distribution Period or any Straddle Period, except as provided in Section 4(c)(ii), such Return shall be prepared in accordance with Past Practices used by Distributing with respect to such
Return, and to the extent any items, methods or positions are not covered by Past Practices, in accordance with reasonable Tax accounting practices selected by Controlled. 

  
 12 

 (ii) Consistency with Tax Opinions/Canadian Ruling. The Tax treatment of
the Separation Transactions reported on any Tax Return shall be consistent with the intended treatment thereof including as reflected in the Tax Opinions/Canadian Ruling, taking into account the jurisdiction in which such Tax Returns are filed,
unless, and only to the extent, an alternative position is required pursuant to a Final Determination. 
 (iii) Controlled
Separate Returns. With respect to any Separate Return for which Controlled is responsible pursuant to this Agreement, Controlled and the other members of the Controlled Group shall allocate Tax Items to such Separate Return in a manner that is
consistent with the allocation performed for the related Joint Return for which Distributing is responsible. 
 (iv)
Combined Returns. For the avoidance of doubt, Distributing shall be entitled, in its sole discretion, to elect to file any Combined Return if the filing of such Combined Return is elective under Applicable Law. Each member of any such
Combined Group shall execute and file such consents, elections and other documents as may be required, appropriate or otherwise requested by Distributing in connection with the filing of such Combined Returns. To the extent that any member of the
Controlled Group is included in any Combined Return for a Taxable period that includes the Distribution Date, Distributing shall include in such Combined Return the results of such member of the Controlled Group on the basis of the Closing of the
Books Method to the extent permitted by Applicable Law. 
 (d) Filing of Returns and Payment of Taxes.  

(i) Each Party shall execute and timely file (or cause to be executed and timely filed) each Return that it is responsible for
filing under Applicable Law. Distributing shall pay (or cause to be paid) to the proper Taxing Authority the Tax shown as due on any Return which a member of the Distributing Group is responsible for filing under this Section 4, and Controlled shall
pay (or cause to be paid) to the proper Taxing Authority the Tax shown as due on any Return which a member of the Controlled Group is responsible for filing under this Section 4. 

(ii) If any member of the Distributing Group is required to make a payment to a Taxing Authority for Taxes allocated to
Controlled under Section 3, Controlled shall indemnify Distributing for the amount of such Taxes in accordance with Section 11 and Section 12. If any member of the Controlled Group is required to make a payment to a Taxing Authority for Taxes
allocated to Distributing under Section 3, Distributing shall indemnify Controlled for the amount of such Taxes in accordance with Section 11 and Section 12. 

(iii) Adjustment Requests. Any Adjustment Request with respect to any member of the Controlled Group may be made (or
caused to be made) only by the Company (or its Subsidiaries) responsible for preparing the original Return with respect to such member under this Agreement. Controlled (or its Subsidiaries) shall not, without

  
 13 

 
the prior written consent of Distributing (which consent shall not be unreasonably withheld or delayed), file, or cause to be filed, any such Adjustment Request to the extent that such filing, if
accepted, is likely to increase the Taxes allocated to, or the Tax indemnity obligations under this Agreement of, Distributing for any Tax Period (or portion thereof) by more than a de minimis amount; provided, however, that such
consent need not be obtained if Controlled agrees to indemnify Distributing for the incremental Taxes allocated to, or the incremental Tax indemnity obligation resulting under this Agreement to, Distributing as a result of the filing of such
Adjustment Request. 
 (e) Disclosure to Taxing Authorities. The Parties agree that no member of the Controlled Group shall
voluntarily provide documents or information to any Taxing Authority in respect of the Separation Transactions without the prior written consent of Distributing. 

SECTION 5. Apportionment of Earnings and Profits and Tax Attributes. 

(a) Tax Attributes arising in a Taxable period that ends on the Distribution Date or includes a Pre-Distribution Period will be allocated to
(and the benefits and burdens of such Tax Attribute will inure to) the members of the Distributing Group and the members of the Controlled Group in accordance with Distributing’s historical practice (including historical methodologies for
making corporate allocations), the Code, Treasury Regulations, and any applicable state, local and foreign law, as determined by Distributing in its sole discretion. 

(b) Distributing shall in good faith advise Controlled after the close of the relevant Taxable period in which the Distribution occurs in
writing of the portion, if any, of any earnings and profits, Tax Attributes, overall foreign loss or other consolidated, combined or unitary attribute which Distributing determines shall be allocated or apportioned to the members of the Controlled
Group under Applicable Law. All members of the Controlled Group shall prepare all Returns in accordance with such written notice. In the event of an adjustment to the earnings and profits, any Tax Attributes, overall foreign loss or other
consolidated, combined or unitary attribute determined by Distributing, Distributing shall promptly notify Controlled in writing of such adjustment. For the avoidance of doubt, Distributing shall not be liable to any member of the Controlled Group
for any failure of any determination under this Section 5(b) to be accurate under Applicable Law, provided such determination was made in good faith. 

(c) Except as otherwise provided herein, to the extent that the amount of any Tax Attribute is later reduced or increased by a Taxing
Authority or as a result of a Tax Proceeding, such reduction or increase shall be allocated to the Company to which such Tax Attribute was allocated pursuant to this Section 5, as determined by Distributing in its sole discretion. 

SECTION 6. Utilization of Tax Attributes. 

(a) Distributing Discretion. Controlled hereby agrees that Distributing shall be entitled to determine in its sole discretion whether to
(x) file or to cause to be filed any Adjustment Request with respect to any Joint Return in order to claim in any Pre-Distribution Period any Controlled Carried Item, (y) make or cause to be made any available elections to waive the right
to claim in any Pre-Distribution Period, with respect to any Joint Return, any Controlled Carried 

  
 14 

 
Item, and (z) make or cause to be made any affirmative election to claim in any Pre-Distribution Period any Controlled Carried Item. Subject to Section 6(b), Controlled shall submit a
written request to Distributing in order to seek Distributing’s consent with respect to any of the actions described in this Section 6(a). 

(b) Controlled Carrybacks to Joint Returns. 

(i) Each member of the Controlled Group shall elect, to the extent permitted by Applicable Law, to forgo the right to carry
back any Controlled Carried Item from a Post-Distribution Period to a Pre-Distribution Period with respect to a Joint Return. Such elections shall include, but not be limited to, the election described in Treasury Regulation
Section 1.1502-21(b)(3)(ii)(B), and any analogous election under state, local, or foreign Income Tax laws, to waive the carryback of any Tax Attribute. 

(ii) If a member of the Controlled Group determines that it is required by Applicable Law to carry back any Controlled Carried
Item to a Pre-Distribution Period with respect to a Joint Return, it shall notify Distributing in writing of such determination at least 90 days prior to the due date for filing the Return on which such carryback will be reflected. Such notification
shall include a description in reasonable detail of the basis for any expected Tax Benefit and the amount thereof, and a certification by an appropriate officer of Controlled setting forth Controlled’s belief (together with supporting analysis)
that the Tax treatment of such Controlled Carried Item is more likely than not correct. If Distributing disagrees with such determination, the parties shall resolve their disagreement pursuant to the procedures set forth in Section 23. 

(iii) If, notwithstanding the provisions of Section (b)(i), a Controlled Carried Item is carried back to a Joint Return,
Distributing shall promptly remit to Controlled any Tax Benefit (including interest received from the relevant Tax Authority, but net of any Taxes imposed with respect to such Tax Benefit and any other reasonable costs) that the Distributing Group
actually realizes with respect to any such carryback. If Distributing pays any amount to Controlled under this Section 6(b)(iii) and, as a result of a subsequent Final Determination, the Tax Benefit that gave rise to such payment is
subsequently disallowed, Distributing shall notify Controlled of the amount to be repaid to Distributing, and Controlled shall then repay such amount to Distributing, together with any interest, fines, additions to Tax, penalties or any additional
amounts imposed by a Taxing Authority relating thereto. 
 (iv) For purposes of this Section 6, a Tax Benefit shall be
deemed to have been realized at the time any actual refund of Taxes is received or, where a Tax Benefit is received in the form of a deduction from, or credit or other offset against other or future Tax liabilities, at the time of filing the Return
(including a Return for estimated Taxes) on which such Tax Benefit is applied in reduction of Taxes that would otherwise be payable. 
 (c)
Carrybacks, Carryforwards to Separate Returns. If a portion or all of any Tax Attribute is allocated to a member of a Combined Group pursuant to Section 5, and is carried back or forward to a Separate Return, any Tax Benefits arising from
such carryback or carryforward shall be retained by such member, subject to future audit adjustments. 

  
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 SECTION 7. Certain Equity-Based Awards. 

(a) Deductions; Payment for Tax Benefits. To the extent permitted by Applicable Law, income Tax deductions with respect to the issuance,
exercise, vesting or settlement after the Distribution Date of any Compensatory Equity Interests shall be claimed (A) in the case of an active officer or employee, solely by the Group that employs such Person at the time of such issuance,
exercise, vesting, or settlement, as applicable; (B) in the case of a former officer or employee, solely by the Group that was the last to employ such Person; and (C) in the case of a director or former director (who is not an officer or
employee or former officer or employee of a member of either Group), (x) solely by the Distributing Group if such person was, at any time before or after the Distribution, a director of any member of the Distributing Group, and (y) in any
other case, solely by the Controlled Group (the Party whose Group is described in (A), (B), or (C), the “Employing Party”). If, in accordance with this Section 7(a), the Controlled Group is or will be entitled to claim any Tax
deduction with respect to the issuance, exercise, vesting or settlement after the Distribution Date of any Compensatory Equity Interests or performance shares with respect to Distributing stock, Controlled shall remit to Distributing on or prior to
March 31, 2017 an amount in cash equal to the product of (i) the aggregate amount of any such deductions and (ii) 38%. 
 (b)
Withholding and Reporting. For any Taxable period (or portion thereof), the Employing Party shall (A) satisfy, or shall cause to be satisfied, all applicable withholding and reporting responsibilities (including all income, payroll, or
other Tax reporting related to income to any current or former employees) with respect to the issuance, exercise, vesting or settlement of such Compensatory Equity Interests; provided that, (x) in the event such Compensatory Equity Interests
are settled by the corporation that is the issuer or obligor under the Compensatory Equity Interest (the “Issuing Corporation”) and the Issuing Corporation is not a member of the same Group as the Employing Party, the Issuing
Corporation shall promptly remit to the Employing Party an amount of cash equal to the amount required to be withheld in respect of any withholding Taxes (excluding, for the avoidance of doubt, the employer’s share of any employment Tax under
Applicable Law), and (y) the Employing Party shall not be liable for failure to remit to the applicable Taxing Authority any amount required to have been withheld from the recipient of the Compensatory Equity Interest in connection with such
issuance, exercise, vesting or settlement, except that the Employing Party shall be so liable to the extent that the Issuing Corporation shall have remitted such amount to the Employing Party. Distributing shall promptly notify Controlled, and
Controlled shall promptly notify Distributing, regarding the exercise of any option or the issuance, vesting, exercise or settlement of any other Compensatory Equity Interest to the extent that, as a result of such issuance, exercise, vesting or
settlement, any member of the other Group may be entitled to a deduction or required to pay any Tax, or such information that otherwise may be relevant to the preparation of any Return or payment of any Tax by such member of the other Group. 

  
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 (c) Distributing Employees. For purposes of this Section 7, if a Person is an officer or
employee of any member of the Distributing Group at any time during a Taxable period, then such officer or employee will exclusively be considered to be employed by such member of the Distributing Group for all of such Taxable period. 

SECTION 8. Tax Benefits. 

(a) Distributing shall be entitled to any Tax Benefits (including, in the case of any refund received, any interest thereon actually received
from the applicable Taxing Authority) received by any member of the Distributing Group or any member of the Controlled Group, other than any Tax Benefits (or any amounts in respect of Tax Benefits) to which Controlled is entitled pursuant to Section
8(b). Controlled shall not be entitled to any Tax Benefits received by any member of the Distributing Group or the Controlled Group, except as set forth in Section 8(b). 

(b) Controlled shall be entitled to: 

(i) retain any Tax Benefits (including, in the case of any refund received, any interest thereon actually received from the
applicable Taxing Authority) received from an applicable Taxing Authority after the Distribution Date in respect of Tax for which a member of the Controlled Group is liable under this Agreement; 

(ii) any payment in respect of Tax Benefits to which Controlled is entitled under Section 6; and 

(iii) the Tax Benefit of any deductions to which Controlled is entitled under Section 7. 

(c) To the extent permitted by Applicable Law, a Company receiving a Tax Benefit to which another Company is entitled hereunder (a
“Tax Benefit Recipient”) shall pay over the amount of such Tax Benefit (including interest received from the relevant Tax Authority, but net of any Taxes imposed with respect to such Tax Benefit and any other reasonable costs)
within five (5) Business Days of receipt thereof; provided, however, that the other Company, upon the request of such Tax Benefit Recipient, shall repay the amount paid to the other Company (plus any penalties, interest or other charges imposed
by the relevant Tax Authority) in the event, as a result of a subsequent Final Determination, a Tax Benefit that gave rise to such payment is subsequently disallowed. 

(d) Where a Tax Benefit is received in the form of a deduction from, or credit or other offset applied against, other or future Tax
liabilities, reimbursement with respect to such Tax Benefit shall be due within five (5) Business Days from the due date for payment of the Tax from or against which such Tax Benefit has been deducted, credited or otherwise offset. 

(e) Within 90 days after the ASCO Power Charitable Contribution, Controlled shall remit to Distributing an amount in cash equal to the product
of (i) the amount of the Tax deduction Controlled reasonably expects to claim in respect of the ASCO Power Charitable Contribution, which shall be consistent with the fair market valuation of the Donation Property conducted by a qualified
appraiser, and (ii) 38%. 

  
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 SECTION 9. Certain Representations and Covenants. 

(a) Controlled Representations. Controlled and each other member of the Controlled Group represents that as of the date hereof, and
covenants that as of the Distribution Date, there is no plan or intention to: 
 (i) liquidate Controlled or to merge or
consolidate any member of the Controlled Group with any other Person subsequent to the Distribution; 
 (ii) sell or
otherwise dispose of any material asset of any member of the Controlled Group subsequent to the Distribution (including, for the avoidance of doubt, any shares of Foreign TC or Canadian TC or any property deriving more than 10% of its value from
such shares), except in the ordinary course of business; 
 (iii) undertake any significant acquisition in Foreign TC or
Canadian TC (whether directly or indirectly) which could reasonably be expected to result in the shares of Controlled deriving more than 10% of their fair market value from the shares of Foreign TC or Canadian TC; 

(iv) cause [Great River Holding LLC] to be treated as a corporation for U.S. federal income tax purposes following the Emerson
Contribution; 
 (v) repurchase stock of Controlled other than in a manner that satisfies the requirements of IRS Revenue
Procedure 96-30 (as in effect prior to the amendment of such Revenue Procedure by IRS Revenue Procedure 2003-48) and consistent with any representations made to any Tax Advisor or Taxing Authority in connection with the Tax Opinions/Canadian Ruling;

 (vi) enter into any negotiations, agreements, or arrangements with respect to transactions or events (including stock
issuances, pursuant to the exercise of options or otherwise, option grants, the adoption of, or authorization of shares under, a stock option plan, capital contributions, or acquisitions, but not including the Distribution) that could reasonably be
expected to cause the Distribution to be treated as part of a plan pursuant to which one or more Persons acquire directly or indirectly Controlled stock representing a 50% or greater interest within the meaning of Section 355(d)(4) of the Code
or that could reasonably be expected to result in an acquisition of control of Controlled, Foreign TC or Canadian TC for purposes of the ITA; 

(vii) take or fail to take any action in a manner that management of Controlled knows, or should know, is reasonably likely to
contravene any agreement with a Taxing Authority entered into prior to the Distribution Date to which any member of the Controlled Group or the Distributing Group is a party, including the agreements set forth in Exhibit [B]; or 

  
 18 

 (viii) take or fail to take any action in a manner that is inconsistent with the
information and representations furnished to any Tax Advisor or Taxing Authority in connection with the Tax Opinions/Canadian Ruling, regardless of whether such information and representations were included in the Tax Opinions/Canadian Ruling. 

(b) Controlled Covenants. Controlled and each other member of the Controlled Group covenants to Distributing that: 

(i) during the two-year period following the Distribution Date (the “Restricted Period”), Controlled will
(A) maintain its status as a company engaged in the Active Trade or Business for purposes of Section 355(b)(2) of the Code, (B) not engage in any transaction that would result in it ceasing to be a company engaged in the Active Trade
or Business for purposes of Section 355(b)(2) of the Code, (C) cause each other member of the Controlled Group whose Active Trade or Business is relied upon for purposes of qualifying any Separation Transaction as tax-free pursuant to
Section 355 of the Code or other Applicable Law to maintain its status as a company engaged in such Active Trade or Business for purposes of Section 355(b)(2) of the Code and any such other Applicable Law, (D) not engage in any
transaction or permit any other member of the Controlled Group to engage in any transaction that would result in a member of the Controlled Group described in clause (C) hereof ceasing to be a company engaged in the relevant Active Trade or
Business for purposes of Section 355(b)(2) of the Code or such other Applicable Law, taking into account Section 355(b)(3) of the Code for purposes of clauses (A) through (D) hereof, and (E) not dispose of or permit any
other member of the Controlled Group to dispose of, directly or indirectly, any interest in a member of the Controlled Group described in clause (C) hereof or permit any such member of the Controlled Group to make or revoke any election under
Treasury Regulations Section 301.7701-3; 
 (ii) during the Restricted Period, Controlled will not sell or transfer (or
cause or permit to be transferred), other than sales or transfers in the ordinary course of business, (A) all or substantially all of the assets that were transferred to Controlled as part of the Emerson Contribution, (B) more than 25% of
the aggregate book value of the total assets of the Controlled Group (as of the Distribution Date); or (C) more than 25% of the aggregate book value of the assets of any member of the Controlled Group whose Active Trade or Business is relied
upon for purposes of qualifying any Separation Transaction as tax-free pursuant to Section 355 of the Code; 
 (iii)
during the Restricted Period, Controlled will not repurchase stock of Controlled in a manner contrary to the requirements of IRS Revenue Procedure 96-30 (as in effect prior to the amendment of such Revenue Procedure by IRS Revenue Procedure 2003-48)
or inconsistent with any representations made to any Tax Advisor in connection with the Tax Opinions/Canadian Ruling; 

  
 19 

 (iv) during the Restricted Period, Controlled will not cause [Great River Holding
LLC] to be treated as a corporation for U.S. federal income tax purposes at any time on or prior to the Distribution Date; 

(v) during the Restricted Period, no member of the Controlled Group will, or will agree to, sell or otherwise issue to any
Person, or redeem or otherwise acquire from any Person, any Equity Interests of Controlled or any other member of the Controlled Group; provided, however, that Controlled may (x) repurchase stock of Controlled to the extent not
inconsistent with Section 9(b)(iii) hereof and (y) issue such Equity Interests to the extent such issuances satisfy Safe Harbor VIII (relating to acquisitions in connection with a person’s performance of services) or Safe Harbor IX
(relating to acquisitions by a retirement plan of an employer) of Treasury Regulations Section 1.355-7(d); 
 (vi)
during the Restricted Period, no member of the Controlled Group will (A) solicit any Person to make a tender offer for, or otherwise acquire or sell, the Equity Interests of Controlled, (B) participate in or support any unsolicited tender
offer for, or other acquisition, issuance or disposition of, the Equity Interests of Controlled or (C) approve or otherwise permit any proposed business combination or any transaction which, in the case of clauses (A) or (B), individually or in
the aggregate, together with any transaction occurring within the four-year period beginning on the date which is two years before the Distribution Date and any other transaction which is part of a plan or series of related transactions (within the
meaning of Section 355(e) of the Code) that includes the Distribution, could result in one or more Persons acquiring (except for acquisitions that otherwise satisfy Safe Harbor VIII (relating to acquisitions in connection with a person’s
performance of services) or Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulations Section 1.355–7(d)) directly or indirectly stock representing a 40% or greater interest, by vote or value, in
Controlled (or any successor thereto) (any such transaction, a “Proposed Acquisition Transaction”); 
 (vii)
during the Restricted Period, if any member of the Controlled Group proposes to enter into any transaction or series of transactions that is not a Proposed Acquisition Transaction but would be a Proposed Acquisition Transaction if the percentage
reflected in the definition of Proposed Acquisition Transaction were 25% instead of 40% (a “Section 9(b)(vi) Acquisition Transaction”) or, to the extent Controlled has the right to prohibit any Section 9(b)(ix) Acquisition
Transaction, proposes to permit any Section 9(b)(ix) Acquisition Transaction to occur, in each case, Controlled shall provide Distributing, no later than 10 Business Days following the signing of any written agreement with respect to the Section
9(b)(ix) Acquisition Transaction, with a written description of such transaction (including the type and amount of Equity Interests of the Controlled to be issued in such transaction) and a certificate of the board of directors of Controlled to the
effect that the Section 9(b)(ix) Acquisition Transaction is not a Proposed Acquisition Transaction; 
 (viii) during the
Restricted Period, no member of the Controlled Group will amend its certificate of incorporation (or other organizational documents), or take any 

  
 20 

 
other action, whether through a stockholder vote or otherwise, affecting the voting rights of the Equity Interests of Controlled (including, without limitation, through the conversion of one
class of Equity Interests of Controlled into another class of Equity Interests of Controlled); 
 (ix) during the Restricted
Period, Controlled will not directly or indirectly solicit or initiate any transaction which, if completed, (x) would result in (A) an acquisition of control of Controlled, Foreign TC or Canadian TC for purposes of the ITA or (B) a
disposition of shares of Foreign TC or Canadian TC, or of property which could reasonably be expected to derive more than 10% of its fair market value from such shares, by a particular vendor to a person not related to that vendor for purposes of
paragraph 55(3.1)(b) of the ITA, or (y) could reasonably be expected to result in the shares of Controlled deriving more than 10% of their fair market value from the shares of Foreign TC or Canadian TC; 

(x) Controlled will file, and will cause any applicable member of the Controlled Group to file, any Gain Recognition Agreement
necessary or reasonably requested and determined by Distributing to be necessary so as to (A) allow for or preserve the tax-free or tax-deferred nature, in whole or part, of any Separation Transaction, or (B) avoid Distributing or any
member of the Distributing Group recognizing gain under any Gain Recognition Agreement, and to the extent allowed or required by Treasury Regulations Section 1.367(a)-8, any such Gain Recognition Agreement shall provide that any gain recognized
thereunder shall be included in taxable income in the Taxable year during which the gain recognition event occurs; 
 (xi)
Controlled will not (A) take any action (including, but not limited to, the sale or disposition of any stock, securities, or other assets), (B) permit any member of the Controlled Group to take any such action, (C) fail to take any
action, or (D) permit any member of the Controlled Group to fail to take any action, in each case that would cause Distributing or any member of the Distributing Group to recognize gain under any Gain Recognition Agreement; 

(xii) Controlled shall neither cause nor permit any foreign Subsidiary of Controlled to (A) through September 30,
2016, enter into any transaction or take any action that would be considered under the Code to constitute the payment of, or otherwise be treated as giving rise to, a dividend for U.S. federal income tax purposes (including, without limitation,
pursuant to Sections 302, 304, 964(e) or 1248 of the Code) or (B) change its Taxable year under the Code or under any foreign Tax laws for a Taxable year that commenced on or before September 30, 2016, in each case. without obtaining the
prior written consent of Distributing; 
 (xiii) during the Restricted Period, Controlled will not take or fail to take, or
permit any other member of the Controlled Group to take or fail to take, any action which would cause Avocent Corporation to cease to be (A) wholly and directly owned by Liebert Corporation and (B) treated as a corporation for U.S. federal
income tax purposes; and 

  
 21 

 (xiv) on or after the Distribution Date, Controlled will not, nor will it permit
any other member of the Controlled Group to, make or change any accounting method, amend any Return or take any Tax position on any Return, take any other action or enter into any transaction that results in any increased Tax liability or reduction
of any Tax asset of any member of the Distributing Group in respect of any Pre-Distribution Period; 
 (xv) Controlled will
not, nor will it permit any other member of the Controlled Group to, take or fail to take any action in a manner that management of Controlled knows, or should know, is reasonably likely to contravene any agreement with a Taxing Authority entered
into prior to the Distribution Date to which any member of the Controlled Group or the Distributing Group is a party, including the agreements set forth on Exhibit [B]; 

(xvi) Controlled will not, nor will it permit any other member of the Controlled Group to, take or fail to take any action in a
manner that is inconsistent with the information and representations furnished to any Tax Advisor or Taxing Authority in connection with the Tax Opinions/Canadian Ruling, regardless of whether such information and representations were included in
the Tax Opinions/Canadian Ruling; and 
 (xvii) Controlled will not take or fail to take, or permit any other member of the
Controlled Group to take or fail to take, any action which prevents or could reasonably be expected to result in tax treatment that is inconsistent with the Tax-Free Status or the intended tax treatment of any Separation Transaction described in the
Tax Opinions/Canadian Ruling; 
 (xviii) Controlled will not take or fail to take, or permit any other member of the
Controlled Group to take or fail to take, any action which could cause the Canadian Reorganization to be taxed in a manner inconsistent with that provided for in the Canadian Ruling without obtaining an advance income tax ruling from the Canada
Revenue Agency or an opinion from a nationally recognized law or accounting firm that such action, omission or transaction will not have such effect; and 

(xix) Except as required by Applicable Law, Controlled will not, nor will it permit any other member of the Controlled Group
to, interact with or provide information to the relevant Taxing Authority in respect of any Transaction Tax Proceeding. 

(xx) Controlled shall file, or shall cause to be filed, a new domestic use agreement (as defined in Treasury Regulations
Section 1.1503(d)-6(f)(2)(iii)) with respect to each dual consolidated loss set forth in Exhibit [C], so as to render the exception set forth in Treasury Regulations Section 1.1503(d)-6(f)(2) available with respect to any “triggering
event” arising by reason of the transactions contemplated by the Distribution Agreement or any of the Ancillary Agreements. 

  
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 (c) Controlled Covenants Exception. Notwithstanding the provisions of Section 9(b),
Controlled and the other members of Controlled Group may take any action that would reasonably be expected to be inconsistent with the covenants contained in Section 9(b), if: (i) Controlled notifies Distributing of its proposal to take such
action and obtains Distributing’s prior written consent to the taking of such action, provided that the Controlled Group shall not be relieved of any liability under Section 11(a) of this Agreement by reason of having received
Distributing’s consent to such action; (ii) Controlled notifies Distributing of its proposal to take such action and Controlled and Distributing obtain a ruling from the IRS or applicable Taxing Authority to the effect that such actions
will not affect the Tax-Free Status, provided that (x) the decision whether to seek any such ruling will be made by Distributing in its sole discretion, (y) Controlled must agree in writing to bear any expenses associated with
obtaining such a ruling and (z) the Controlled Group shall not be relieved of any liability under Section 11(a) of this Agreement by reason of seeking or having obtained such a ruling; or (iii) Controlled notifies Distributing of its
proposal to take such action and obtains an unqualified opinion (x) from a Tax Advisor acceptable to Distributing in its sole discretion, (y) on which Distributing may rely and (z) to the effect that such action will not affect the
Tax-Free Status or result in the failure of a Separation Transaction to have the tax treatment described in the Tax Opinions/Canadian Ruling, provided that, with respect to each of (i), (ii) and (iii), the Controlled Group shall not be
relieved of any liability under Section 11(a) of this Agreement by reason of having obtained any such consent, ruling or opinion. 

SECTION 10. Protective Section 336(e) Elections. Pursuant to Treasury Regulations Sections 1.336-2(h)(1)(i) and
1.336-2(j), Distributing and Controlled agree that Distributing shall make a timely protective election under Section 336(e) of the Code and the Treasury Regulations issued thereunder for each member of the Controlled Group that is a domestic
corporation for U.S. federal income Tax purposes, other than the corporations listed on Exhibit [D] hereto, with respect to the Distribution (a “Section 336(e) Election”). It is intended that a Section 336(e) Election will have
no effect unless the Distribution is a “qualified stock disposition,” as defined in Treasury Regulations Section 1.336-1(b)(6), by reason of the application of Treasury Regulations Section 1.336-1(b)(5)(i)(B) or Treasury
Regulations Section 1.336-1(b)(5)(ii). 
 SECTION 11. Indemnities. 

(a) Controlled Indemnity. Controlled and each other member of the Controlled Group shall jointly and severally indemnify Distributing
and the other members of the Distributing Group against, and hold them harmless, without duplication, from: 
 (i) any Tax
liability allocated to Controlled pursuant to Section 3 of this Agreement; 
 (ii) any Tax-Related Losses resulting from a
breach by Controlled or any other member of the Controlled Group of any representation or covenant made by the members of the Controlled Group herein (including, for the avoidance of doubt, any Tax-Related Losses resulting from any action for which
the conditions set forth in Section 9(c) are satisfied); and 

  
 23 

 (iii) any Tax liability of Distributing that is attributable to any action of
Controlled or any other member of the Controlled Group (including, for the avoidance of doubt, any action for which the conditions set forth in Section 9(c) are satisfied), other than any action required by the Distribution Agreement or contemplated
by the Restructuring, without regard to whether Distributing has consented to such action; and 
 (iv) all liabilities,
costs, expenses (including, without limitation, reasonable expenses of investigation and attorneys’ fees and expenses), losses, damages, assessments, settlements or judgments arising out of or incident to the imposition, assessment or assertion
of any Tax liability or damage described in (i), (ii) or (iii), including those incurred in the contest in good faith in appropriate proceedings relating to the imposition, assessment or assertion of any such Tax, liability or damage. 

(b) Distributing Indemnity. Except in the case of any liabilities described in Section 11(a), Distributing and each other member of the
Distributing Group will jointly and severally indemnify Controlled and the other members of the Controlled Group against, and hold them harmless, without duplication, from: 

(i) any Tax liability allocated to Distributing pursuant to Section 3; 

(ii) any Taxes imposed on any member of the Controlled Group under Treasury Regulations Section 1.1502-6 (or similar
provision of state, local or foreign law) solely as a result of any such member being or having been a member of a Combined Group; and 

(iii) all liabilities, costs, expenses (including, without limitation, reasonable expenses of investigation and attorneys’
fees and expenses), losses, damages, assessments, settlements or judgments arising out of or incident to the imposition, assessment or assertion of any Tax liability or damage described in (i) or (ii), including those incurred in the contest in
good faith in appropriate proceedings relating to the imposition, assessment or assertion of any such Tax, liability or damage. 
 (c)
Discharge of Indemnity. Controlled, Distributing and the members of their respective Groups shall discharge their obligations under Sections 11(a) and 11(b) hereof, respectively, by paying the relevant amount in accordance with Section 12,
within ten (10) Business Days of demand therefor. Any such demand shall include a statement showing the amount due under Section 11(a) or 11(b), as the case may be. Notwithstanding the foregoing, if any member of the Controlled Group or any
member of the Distributing Group disputes in good faith the fact or the amount of its obligation under Section 11(a) or Section 11(b), then no payment of the amount in dispute shall be required until any such good faith dispute is resolved in
accordance with Section 23 hereof; provided, however, that any amount not paid within ten (10) Business Days of demand therefor shall bear interest as provided in Section 12. 

(d) Tax Benefits. If an indemnification obligation of any member of the Distributing Group or any member of the Controlled Group, as
the case may be, under this Section 11 arises in respect of an adjustment that makes allowable to a member of the Controlled Group or a 

  
 24 

 
member of the Distributing Group, respectively, any Tax Benefit which would not, but for such adjustment, be allowable, then any such indemnification obligation shall be an amount equal to
(x) the amount otherwise due but for this Section 11(d), minus (y) the present value (as determined in good faith by Distributing based on reasonable projections, following consultation with Controlled) of the product of the Tax Benefit
multiplied by (A) the maximum applicable federal, foreign, state or local, as the case may be, corporate Tax rate in effect at the time such Tax Benefit becomes allowable to the applicable member of the Controlled Group or the applicable member
of the Distributing Group (as the case may be) or (B) in the case of a credit, 100 percent. The present value of such product shall be determined by discounting such product from the time the Tax Benefit becomes allowable at the rate equal to
the “prime” rate as published in the Wall Street Journal, Eastern Edition on the date of such determination. 

SECTION 12. Payments. 

(a) Timing; After-Tax Amounts. All payments to be made under this Agreement (excluding, for the avoidance of doubt, any payments to a
Taxing Authority described herein) shall be made in immediately available funds. Except as otherwise provided, all such payments will be due five (5) Business Days after the receipt of notice of such payment or, where no notice is required,
five (5) Business Days after the fixing of liability or the resolution of a dispute (the “Due Date”). Payments shall be deemed made when received. Any payment that is not made on or before the Due Date shall bear interest at
the rate equal to the “prime” rate as published on such Due Date in the Wall Street Journal, Eastern Edition, for the period from and including the date immediately following the Due Date through and including the date of payment.
If, pursuant to a Final Determination, or as agreed by Distributing and Controlled acting in good faith, any amount paid pursuant to this Agreement (including pursuant to this sentence) by any member of the Distributing Group or any member of the
Controlled Group, as the case may be (the “Paying Company”), results in any increased Tax liability or reduction of any Tax asset of any member of the Controlled Group or any member of the Distributing Group, respectively (the
“Affected Company”), then the Paying Company shall indemnify the Affected Company and hold it harmless from any interest or penalty attributable to such increased Tax liability or the reduction of such Tax asset and shall pay to the
Affected Company, in addition to amounts otherwise owed, the After-Tax Amount. With respect to any payment required to be made under this Agreement, Distributing has the right to designate, by written notice to Controlled, which member of the
Distributing Group will make or receive such payment. 
 (b) Netting of Payments. If, on the Due Date for any payment under this
Agreement, each of Distributing (or any other member of the Distributing Group) and Controlled (or any other member of the Controlled Group) owes an amount to the other Company pursuant to this Agreement or any other agreement between Distributing
and Controlled (including, without limitation, the Distribution Agreement and any other Ancillary Agreement), to the extent such netting does not violate any Applicable Law or regulations, the Companies shall satisfy their respective obligations to
each other by netting the aggregate amounts due to one Company (and its Affiliates) against the aggregate amounts due to the other Company (and its Affiliates), with the Company, if any, owing (together with its Affiliates) the greater aggregate
amount paying the other Company the difference between the amounts owed. Such net payment shall be made pursuant to Section 12(a). 

  
 25 

 (c) Treatment of Payments. To the extent permitted by Applicable Law, any payment made to
one Company by another Company pursuant to this Agreement, the Distribution Agreement or any other Ancillary Agreement that relates to Taxable periods (or portions thereof) ending on or before the Distribution Date shall be treated by the Parties
hereto for all Tax purposes as a distribution by Controlled to Distributing, or capital contribution by Distributing to Controlled, as the case may be. In the event that a Taxing Authority asserts that a Company’s treatment of a payment
described in this Section 12(c) should be other than as required herein, such Company shall use its reasonable best efforts to contest such assertion in a manner consistent with Section 15 of this Agreement. Notwithstanding the foregoing, any
payment that constitutes consideration under a Transfer Agreement or that otherwise constitutes consideration under any other Ancillary Agreement shall be treated as provided in such agreement. 

SECTION 13. Guarantees. Distributing or Controlled, as the case may be, shall guarantee or otherwise perform the
obligations of each other member of the Distributing Group or the Controlled Group, respectively, under this Agreement. 

SECTION 14. Communication and Cooperation. 

(a) Consult and Cooperate. Controlled and Distributing shall consult and cooperate (and shall cause each other member of their
respective Groups to consult and cooperate) fully at such time and to the extent reasonably requested by the other Party in connection with all matters subject to this Agreement. Such cooperation shall include, without limitation, 

(i) the retention, and provision on reasonable request, of any and all information including all books, records, documentation
or other information pertaining to Tax matters relating to the Distributing Group and the Controlled Group, any necessary explanations of information, and access to personnel, until the later of (A) five (5) years after the date of the
Distribution and (B) one (1) year after the expiration of the applicable statute of limitation (giving effect to any extension, waiver, or mitigation thereof); 

(ii) the execution and filing of any document that may be necessary (including to give effect to Section 15) or helpful in
connection with any required Return or in connection with any audit, proceeding, suit, action, investigation or review; and 

(iii) the use of the parties’ commercially reasonable efforts to obtain any documentation from a governmental authority or
a third party that may be necessary or helpful in connection with the foregoing. 
 (b) Provide Information. Except as set forth in
Section 15, Distributing and Controlled shall keep each other reasonably informed with respect to any material development relating to the matters subject to this Agreement. 

  
 26 

 (c) Tax Attribute Matters. Distributing and Controlled shall promptly advise each other
with respect to any proposed Tax adjustments that are the subject of an audit or investigation, or are the subject of any proceeding or litigation, and that may affect any Tax liability or any Tax Attribute of any member of the Distributing Group or
any member of the Controlled Group (including, but not limited to, basis in an asset or the amount of earnings and profits). 
 (d)
Confidentiality and Privileged Information. Any information or documents provided under this Section 14 shall be kept confidential by the Party receiving the information or documents, except as may otherwise be necessary in connection with
the filing of required Returns or in connection with any audit, proceeding, suit or action. Notwithstanding any other provision of this Agreement or any other agreement, (i) no member of the Distributing Group shall be required to provide any
member of the Controlled Group or any other Person access to or copies of any information or procedures other than information or procedures that relate solely to Controlled, the business or assets of any member of the Controlled Group or matters
for which Controlled has an obligation to indemnify under this Agreement, and (ii) in no event shall any member of the Distributing Group be required to provide any member of the Controlled Group or any other Person access to or copies of any
information if such action could reasonably be expected to result in the waiver of any privilege. Notwithstanding the foregoing, in the event that Distributing determines that the provision of any information to any member of the Controlled Group
could be commercially detrimental, violate any law or agreement to which Distributing is bound or waive any privilege, Distributing shall not be required to comply with the foregoing terms of this Section 14(d) except to the extent that it is able,
using commercially reasonable efforts, to do so while avoiding such harm or consequence. 
 SECTION 15. Audits and
Contest. 
 (a) Notice. Each of Distributing or Controlled shall promptly notify the other in writing upon the receipt of any
notice of a Tax Proceeding from the relevant Taxing Authority or upon becoming aware of an actual or potential Tax Proceeding by a Taxing Authority that may affect the liability of any member of the Controlled Group or the Distributing Group,
respectively, for Taxes under Applicable Law or this Agreement; provided, that a Party’s right to indemnification under this Agreement shall not be limited in any way by a failure to so notify, except to the extent that the indemnifying Party
is prejudiced by such failure. 
 (b) Distributing Control. Notwithstanding anything in this Agreement to the contrary, Distributing
shall have the right to control all matters relating to any Joint Return or any Tax matters of a Combined Group or any member of a Combined Group (as such). Distributing shall have absolute discretion with respect to any decisions to be made, or the
nature of any action to be taken, with respect to any Tax matter described in the preceding sentence; provided, however, that to the extent that any Tax Proceeding relating to such a Tax matter is reasonably likely to give rise to an
indemnity obligation of Controlled under Section 11 hereof, (i) Distributing shall keep Controlled informed of all material developments and events relating to any such Tax Proceeding described in this proviso and (ii) at its own cost and
expense, Controlled shall have the right to participate in (but not to control) the defense of any such Tax Proceeding. 

  
 27 

 (c) Controlled Assumption of Control; Non-Transaction Tax Proceeding. If Distributing
determines that the resolution of any matter pursuant to a Tax Proceeding (other than a Transaction Tax Proceeding) is reasonably likely to have an adverse effect on the Controlled Group with respect to any Post-Distribution Period, Distributing, in
its sole discretion, may permit Controlled to elect to assume control over disposition of such matter at Controlled’s sole cost and expense; provided, however, that if Controlled so elects, it will (i) be responsible for the payment
of any liability arising from the disposition of such matter notwithstanding any other provision of this Agreement to the contrary and (ii) indemnify the Distributing Group for any increase in a liability and any reduction of a Tax asset of the
Distributing Group arising from such matter. 
 (d) Controlled Participation; Transaction Tax Proceeding. Distributing shall have the
right to control any Transaction Tax Proceeding, provided that Distributing shall keep Controlled fully informed of all material developments and shall permit Controlled a reasonable opportunity to participate in the defense of the matter.

 SECTION 16. Notices. Any notice, demand, claim, or other communication under this Agreement shall be in writing and
shall be deemed to have been given upon the delivery or mailing, thereof, as the case may be, if delivered personally or sent by certified mail, return receipt requested, postage prepaid, to the Parties at the following addresses (or at such other
address as a Party may specify by notice to the other): 
 If to Distributing or the Distributing Group, to: 

 

			
	Emerson Electric Co.
	800 West Florissant Avenue
	P.O. Box 4100	  	
	St. Louis, MO 63136
		
	Attention:	  	
		  	
	Facsimile No.:	  	
		  	
	E-mail:	  	
		  	

  
 28 

			
	with a copy to:	  	
	
	Davis Polk & Wardwell LLP
	450 Lexington Avenue
	New York, New York 10017
		
	Attention:	  	
		  	
	Facsimile No.:	  	
	E-mail:	  	
		  	

 If to Controlled or the Controlled Group, to: 

 

			
	Vertiv Co.	  	
	[1050 Dearborn Drive
	Columbus, OH 43085 ]
		
	Attention:	  	
	Facsimile No.:	  	
	E-mail:	  	

 SECTION 17. Costs and Expenses. Except as expressly set forth in this Agreement, each Party
shall bear its own costs and expenses incurred pursuant to this Agreement. For purposes of this Agreement, costs and expenses shall include, but not be limited to, reasonable attorneys’ fees, accountant fees and other related professional fees
and disbursements. 
 SECTION 18. Effectiveness; Termination and Survival. This Agreement shall become effective upon the
consummation of the Distribution. All rights and obligations arising hereunder shall survive until they are fully effectuated or performed; provided, further, that notwithstanding anything in this Agreement to the contrary, this Agreement
shall remain in effect and its provisions shall survive for one year after the full period of all applicable statutes of limitation (giving effect to any extension, waiver or mitigation thereof) and, with respect to any claim hereunder initiated
prior to the end of such period, until such claim has been satisfied or otherwise resolved. 
 SECTION 19. Specific
Performance. Each Party hereto acknowledges that the remedies at law of the other Party for a breach or threatened breach of this Agreement would be inadequate and, in recognition of this fact, each Party to this Agreement, without posting any
bond, and in addition to all other remedies that may be available, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy
that may then be available. 
 SECTION 20. Section Headings. The headings contained in this Agreement are inserted for
convenience only and shall not constitute a part hereof or in any way affect the meaning or interpretation of this Agreement. 

  
 29 

 SECTION 21. Entire Agreement; Amendments and Waivers. 

(a) Entire Agreement. This Agreement contains the entire understanding of the Parties hereto with respect to the subject matter
contained herein. No alteration, amendment, modification, or waiver of any of the terms of this Agreement shall be valid unless made by an instrument signed by an authorized officer of each of Distributing and Controlled, or in the case of a waiver,
by the Party against whom the waiver is to be effective. 
 (b) Amendments and Waivers. No failure or delay by any Party (or the
applicable member of such Party’s Group) in exercising any right, power or privilege hereunder shall operate as a waiver hereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of
any right, power or privilege. This Agreement shall not be waived, amended or otherwise modified except in writing, duly executed by each of the Parties hereto. 

SECTION 22. Governing Law and Interpretation. This Agreement shall be construed and enforced in accordance with the laws of
the State of New York, without giving effect to laws and principles relating to conflicts of law. 
 SECTION 23. Conflict of
Terms. Except as expressly provided herein, if the terms of this Agreement conflict with the terms of any of the Transfer Agreements or any other Ancillary Agreements, then the terms of this Agreement shall control. 

SECTION 24. Dispute Resolution. In the event of any dispute relating to this Agreement, including but not limited to
whether a Tax liability is a liability of the Distributing Group or the Controlled Group, the Parties shall work together in good faith to resolve such dispute within 30 Business Days. If the Parties are unable to resolve within 30 Business Days any
such dispute (other than a dispute related to or arising out of the covenants set forth in Section 9), such dispute shall be resolved by an accounting firm selected by Distributing in good faith consultation with Controlled and whose fees and costs
shall be shared equally by Distributing and Controlled. 
 SECTION 25. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. 

SECTION 26. Assignments; Third Party Beneficiaries. Except as provided below, this Agreement shall be binding upon and
shall inure only to the benefit of the Parties hereto (and the members of their respective Groups) and their respective successors and assigns, by merger, acquisition of assets or otherwise (including but not limited to any successor of a Company
succeeding to the Tax Attributes of such Company under Applicable Law). This Agreement is not intended to benefit any Person other than the Parties hereto (and the members of their respective Groups) and such successors and assigns, and no such
other Person shall be a third party beneficiary hereof. 

  
 30 

 SECTION 27. Authorization, Etc. Each of Distributing and Controlled hereby
represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, on its own behalf and on behalf of each member of its Group, that this Agreement has been duly authorized by all necessary corporate action
on the part of such Party and each member of its Group, that this Agreement constitutes a legal, valid and binding obligation of each such Party and each member of its Group, and that the execution, delivery and performance of this Agreement by such
Party and each member of its Group does not contravene or conflict with any provision or law or of its charter or bylaws or any agreement, instrument or order binding on such Party or member of its Group. 

  
 31 

 IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the day and year
first written above. 
  

			
	 Distributing on its own behalf and on

behalf of the members of the

Distributing Group.

		
	By:	 	  

	Name:	 	
	Title:	 	
	
	 Controlled on its own behalf and on

behalf of the members of the

Controlled Group.

		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	

  
 32

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