Document:

Pharmaceutical Supply Agreement dated January 24, 2004

 Exhibit 10.18 
  

					
	 	 	*	 	Certain confidential information contained in this document, marked by brackets, has been omitted and filed with the Securities and Exchange Commission pursuant to rule 406 of the Securities
Act of 1933, as amended.

  
 PHARMACEUTICAL
SUPPLY AGREEMENT 
  
 This Agreement is made as of the date it
is signed by both parties (the “Effective Date”), by and between Corus Pharma Inc., a Delaware corporation, with its corporate offices at 2025 1st Avenue, Suite 800, Seattle, Washington 98121, United States of America (“Corus”), and Euticals SpA, doing business at Via Emilia, 99, Frazione San Grato, Lodi (LO) 26900, Italy
(“Euticals”). 
  
 A. Corus desires to develop an
inhalation dosage form finished pharmaceutical product for the treatment of pulmonary disease as more fully described in Exhibit A to this Agreement (the “Final Product”) which contains the active pharmaceutical ingredient
Aztreonam [*]. 
  
 B. Corus requires the assistance of a
pharmaceutical manufacturer to scale-up and optimize the production processes for clinical supplies of Aztreonam as a drug substance intermediate meeting the specifications (the “Technical Specifications”) set forth in Exhibit
A to this Agreement (the “Drug Substance”), including without limitation the acquisition of raw materials, in support of Corus’ current and projected submissions to the US Food and Drug Administration (“FDA”) for
product marketing approval. 
  
 C. Euticals has expertise and
experience with the development and documentation of information and data suitable for submission to the FDA, and currently has the expertise, facilities and other resources to develop and manufacture experimental and clinical batches of drug
substances suitable for use in trials designed to obtain data for submission to the FDA and that are produced by Euticals in conformance with current Good Manufacturing Practices as described in US 21 CFR, as amended from time to time and as
administered by the FDA (“cGMP”), and the International Conference on Harmonization of Technical Specifications for Registration of Pharmaceuticals for Human Use in the most current form from time to time (“ICH”). Euticals
is furthermore already in the process to have its facilities and production processes approved by the FDA for the production and supply of drug substances intended for commercial use. 
  
 THEREFORE, the parties hereby agree as follows: 
  
 1. Supply Commitment. 
  
 1(a) Supply of Requirements. Except as otherwise provided herein, Corus agrees to purchase, and
Euticals agrees to sell, all of Corus’ worldwide requirements for the Drug Substance during the Term of this Agreement (as defined in Section 8(a)), and within stated lead times, in accordance with the Technical Specifications (Exhibit A), all
applicable standards and requirements of law (including without limitation all environmental laws and regulations), cGMP, and ICH. 
  

					
	 	  	 	  	 
			
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 1(b) Qualification of Sources. Regardless of the Risk Mitigation Plan outlined in
Section 4b, and the foregoing agreements. If in the view of the FDA and the Office of Orphan Drug (OOPD), the Risk Mitigation Plan as developed and submitted by Corus and Euticals is deemed inadequate, Corus will continue to work with Euticals Group
to develop alternative plans. The revised plans must be deemed acceptable by the FDA, otherwise Corus at the direction of the US FDA may be required to pursue, develop, and qualify alternative manufacturers of the drug substance. 
  
 2. Project Management. Euticals’ activities associated
with manufacturing and supplying the Drug Substance under this Agreement are sometimes collectively referred to herein as the “Services.” 
  
 2(a) Primary and Secondary Contacts. Each of Corus and Euticals shall appoint two of its employees and/or consultants to serve,
respectively, as the primary and secondary points of contact between the parties with respect to technical, scientific and regulatory matters under or in relation to this Agreement, the Technical Specifications, and the Services (the parties’
“Technical Contacts”). Each of Corus and Euticals shall also appoint two of its employees and/or consultants to serve, respectively, as the primary and secondary points of contact between the parties with respect to business,
financial, and operational matters under or in relation to this Agreement (the parties’ “Business Contacts”). (The parties’ Technical Contacts and Business Contacts are sometimes collectively referred to as the
“Contact Persons.”) Neither party will appoint the same person to serve both as its Technical Contact and as its Business Contact simultaneously. Corus’ initial primary Technical Contact is Peter Carbonaro and its initial
secondary Technical Contact is TBD. Euticals’ initial primary Technical Contact is [*] and its initial secondary Technical Contact is TBD. Corus’ initial primary Business Contact is Iain Duncan and its initial secondary Business
Contact is TBD. Euticals’ initial primary Business Contact is [*] and its initial secondary Business Contact is [*]. 
  
 2(b) Communication Between Technical Contacts. The Technical Contacts will cooperatively determine between them the forms of
communications between themselves that will be most useful from time to time in light of the current situation. Such communications shall include at a minimum bilateral substantive updates as to technical and regulatory progress made and
difficulties encountered or anticipated in the course of the activities contemplated under this Agreement. 
  
 2(c) Communication Between Business Contacts. The Business Contacts will cooperatively determine between them the forms of
communications between themselves, that will be most useful from time to time in light of the ongoing development and transition work. 
  
 3. Standards of Performance. Euticals warrants and agrees that the following shall apply to all Services and goods provided or to be
provided under this Agreement:  
  
 3(a)
Level of Effort; Quality Assurance Plan. Euticals will perform the Services using its continuing reasonable best efforts in compliance with this Agreement and all 

  

					
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applicable laws, the highest industry standards, and the Quality Assurance Plan set forth in Exhibit B (the “Quality Assurance Plan”).

  
 3(b) Personnel Qualifications and
Training. All of Euticals’ personnel involved in the performance of any Services shall be trained and certified direct labor personnel, having the experience and qualifications necessary to perform such Services. 
  
 3(c) Changes. Under no circumstances shall Euticals
make changes in the manufacturing process and/or equipment, acquisition of raw materials listed in the DMF (the “Critical Raw Materials”), or other testing method or specifications, or other change that may impact the quality of the
Drug Substance without giving Corus prior thirty- days notice thereof. Corus may request reasonable changes in the Technical Specifications at any time, provided however, that such changes may require changes to the prices set forth in
Section 6, if and to the extent such changes cannot reasonably be avoided by Euticals. Corus shall be notified of proposed changes by Euticals or its suppliers to the Technical Specifications. 
  
 3(d) Raw Materials; Handling. All chemical
intermediates listed in the DMF and other supplies and raw materials required for the Drug Substance to be manufactured hereunder (the “Raw Materials”) will be acquired by Euticals and supplied by it for use hereunder in accordance
with the applicable Technical Specifications, the Quality Assurance Plan, and Section 4(a). Euticals will receive, quarantine, store, sample, test and release all Raw Materials to be used in the manufacture, packaging, or other processing of the
Drug Substance in accordance with all applicable standards and requirements of law (including without limitation all environmental laws and regulations), cGMP, ICH, the Technical Specifications, the Quality Assurance Plan, and the Master Batch
Record. 
  
 3(e) Facilities and Equipment.
The Services will be performed in a Euticals’ group facility, in an environment meeting the standards set forth in Exhibit B. Euticals will provide, validate, and control all necessary utilities including water and will provide
appropriate chemical and microbiological characterization. 
  
 3(f) Regulatory Registrations and Certifications. Euticals shall exert its continuing reasonable best efforts to secure and to maintain FDA registrations and certifications (the “Facility
Registrations”) throughout the Term. 
  
 3(g) Maintenance. Euticals will service and maintain all facilities and equipment used in or in connection with the Services, including without limitation preventative and remedial maintenance as is consistent with the
manufacturers’ standards, the highest standards of industry practice, cGMP, ICH, the Technical Specifications, and the Quality Assurance Plan. 
  
 3(h) Euticals Release Testing. Euticals will provide final release testing for the Drug Substance in accordance with the Technical
Specifications and the Quality Assurance Plan, consistent with the criteria set forth in Exhibit A (the “Euticals Release Testing”). 
  
 3(i) Master Batch Record. Euticals will prepare a “Master Batch Record” for the Drug Substance in compliance with
cGMP and ICH standards for each stage of production. 
  

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 3(j) Drug Master File. During the term of this Agreement Euticals shall establish,
maintain, and keep current a complete drug master file (“DMF”) with the FDA for the Drug Substance. Corus shall have the right to reference such DMF in any regulatory filings. Euticals agrees and warrants that it will file the DMF
application with the FDA on or before February 28th, 2004. 
  
 3(k) Facility Visits and Consultations. Euticals shall permit Corus’ representatives to visit the Facility and any other Euticals location relevant to the Services during normal working hours and with
reasonable frequency to perform periodic quality assurance audits (not to exceed one per year unless indicated by FDA compliance issues). 
  
 3(l) Inspections and Event Reporting. Euticals shall notify Corus within three business days of becoming aware of any planned or
actual inspections, whether or not pre-announced, by the FDA or any other regulatory agency of the Facility or any other locations in which the Drug Substance is or is to be made, tested or stored by Euticals or otherwise bearing on the Drug
Substance, any relevant records, or any other aspect of the Services as it pertains to Corus. Euticals shall promptly (in no less than five business days) report in writing to Corus regarding the nature and results of any such inspections and shall
immediately deliver to Corus copies of any letters, reports, and other documents received from or sent by Euticals to the FDA or any such agency that relate to such facilities or records or otherwise to the Drug Substance or the Services. Euticals
shall immediately notify Corus of any adverse events encountered in the course of Euticals’ activities under or in support of this Agreement or the Services. 
  
 3(m) No Conflicts. Euticals is capable of entering into and performing fully under this Agreement,
and is entitled to do so without conflict with any law, regulation, agreement or commitment of or binding on Euticals, and all necessary corporate or governmental approvals, registrations, and filings with respect thereto have been duly made and
remain in full force and effect. All Drug Substance shall be sold to Corus hereunder with good and marketable title, free and clear of all liens and encumbrances. 
  
 3(n) Compliance with Law; Third Party Rights. Euticals shall not, in the performance of any Services
or preparing to do so, violate any applicable law or infringe or misappropriate any intellectual properties of any third party, except to the extent due directly to Euticals’ following specific instructions given to it by Corus in writing.
Euticals agrees to notify Corus promptly if Euticals knows or has reason to believe that any such instructions from Corus would, if followed by Euticals, violate any applicable law or infringe or misappropriate any intellectual properties of any
third party. 
  
 4. Capacity, Ordering and
Forecasts. 
  
 4(a) Capacity
Commitment. Euticals agrees to provide at its own cost cGMP/ICH compliant manufacturing capacity sufficient and prepared to fulfill Corus’ worldwide requirements for the Drug Substance, as such requirements are reflected in the [*]
Capacity Plans under Section 4(c) and Corus’ [*] Forecasts under Section 4(d); provided, however, that 

  

					
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Euticals’ maximum quarterly production capacity need not at any time exceed [*]. Euticals shall schedule its production activities and secure
timely availability of all Raw Materials in the required quantities and quality to be able to deliver to Corus all of the foregoing as shown in Corus’ firm orders within the order lead times described below. Specifically, and without
limitation, Euticals shall refrain from using the Facility or making any commitments for the use of the Facility that could bring the FDA registration or certification of the Facility into jeopardy or otherwise conflict with or delay Euticals’
supply of the Drug Substance as agreed herein, whether due to volume or capacity restraints, schedule conflicts, incompatible chemical entities, or otherwise. 
  

4(b) Risk Mitigation Plan. Euticals and Corus shall on or before [*] prepare and provide to Corus a draft of a
comprehensive risk mitigation plan and procedures (the “Risk Mitigation Plan”) to secure supply of the Drug Substance throughout the Term in order to minimize the consequences of a major event in the manufacture of Final Products,
which risk mitigation plan shall contain, among other things, the establishment and qualification of one or more back-up manufacturing facilities, security stocks, procedures for replacement of defective manufacturing equipment and/or general
protection of manufacturing facilities against such major events. Euticals and Corus shall from time to time make revisions and supplements to the Risk Mitigation Plan as reasonably requested by Corus, and Euticals Group shall at all times conform
to the Risk Mitigation Plan as so revised. 
  
 4(c) [*] Capacity Plans. Corus shall provide Euticals [*] forecast for its requirements for batches for commercial purposes (“Commercial Batches”), with the first such forecast to be given by [*], and
subsequent forecasts to be given on each anniversary of the delivery of the first forecast. These plans shall be used by the parties to prepare and mutually adopt, annually, the “[*] Capacity Plan.” If either Corus or
Euticals has reason to believe at any time during the interim between the submission dates for such plans that Euticals’ capacity will not be sufficient to meet Corus’ requirements from the Facility at any time during the three years
covered by the then-current plan, such party shall so notify the other party and either party may require that an interim process be instituted to revise and update the capacity plan sooner than scheduled. 
  
 4(d) [*] Forecasts. By [*] Corus shall provide
Euticals with an initial written forecast of the quantity of kilos of Drug Substance that Corus desires to have delivered to it during the following [*] period (the “[*] Forecasts”), either, as appropriate, for
pre-commercial batches or for Commercial Batches, or both. [*] Corus shall provide a written, updated forecast of the quantity of kilos of Drug Substance that Corus desires to have delivered to it during the following [*]. Each
successive forecast shall update the forecast previously given. 
  
 4(e) Minimum Volume Purchase and Maximum Production Commitments. Corus will give in good faith and to its best knowledge fair estimates for the [*] Forecast, notwithstanding that neither Corus nor
Euticals shall be bound by these estimates. Corus shall be bound to buy at least the [*] of the quantity estimated by it in the [*] Forecast, Euticals shall be ready to produce and provide to Corus up [*] (subject to the maximum
capacity limitation stated in Section 4(a)). Each estimate [*] Forecast shall constitute Corus’ firm order and the binding commitment of both parties as to the quantities to be supplied and purchased for 

  

					
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the stated respective [*], subject only to scheduling under order confirmations pursuant to Section 4(f). 
  
 4(f) Order Scheduling and Lead Times. Each
purchase of Drug Substance will be based on a firm purchase order issued by Corus and confirmed by Euticals within ten working days after receipt. The minimum batch size shall [*]. After receipt of a firm purchase order, Euticals will ship
the ordered quantities within a lead time of [*]. 
  
 4(g) Capacity Rationing. If either Corus or Euticals has reason to believe at any time that Euticals is or is likely to become unable for whatever reason to fill Corus’ orders as agreed under this
Agreement, such party shall promptly so notify the other party. In such event, and without prejudice to any other rights which Corus may have under this Agreement, Euticals shall make its best efforts to allocate its available capacities and
resources such that supplies to Corus under this Agreement will have and maintain a scheduling and resources priority. 
  
 5. Delivery and Acceptance. 
  
 5(a) Delivery. Drug Substance will be packaged for shipment in accordance with the provisions as described in Exhibit C [*].
In Exhibit C Corus shall provide Euticals with detailed shipping instructions, the performance of which shall be adequately documented by Euticals. Euticals shall, as provided in the Quality Assurance Plan, provide Corus with a satisfactory
certificate of analysis for each lot, to be delivered concurrently with each shipment. 
  
 5(b) Shelf Life. Euticals shall exert its continuing reasonable best efforts to schedule manufacturing and deliveries such that all
Drug Substance is delivered to Corus as soon as possible after its manufacture. 
  
 5(c) Conformance with Specifications. Euticals warrants that all Drug Substance delivered hereunder will conform to this Agreement
and the applicable Technical Specifications and Master Batch Record, will not be adulterated, and will be manufactured, tested, stored, packaged, labeled, shipped, and will be documented in accordance with the Quality Assurance Plan and all
applicable laws, cGMP, and ICH. Euticals does not warrant that the Drug Substance will meet any particular need or use. Corus will notify Euticals within thirty (30) days after delivery if any batch does not conform to the Technical Specifications,
together with such detail as is then available to Corus as to the specifics of the non-conformity, or else such Drug Substance will be considered accepted by Corus at the end of such 30-day period. 
  
 5(d) Replacement. If requested by Corus, Euticals
will promptly replace any batch that does not conform to the Technical Specifications or that was not manufactured or documented in accordance with the Quality Assurance Plan, the Master Batch Record, cGMP, ICH or applicable law. Corus shall not be
charged for such replacement or for any remanufacturing, such that Corus shall only pay for a single, conforming batch and not twice in each such situation. If Corus chooses not to have Euticals replace any batch that does not conform to the
Technical Specifications or Master Batch Record, Euticals will credit or refund (at Corus’ election) any amounts already paid by Corus for such batch. 
  

					
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 5(e) Independent Testing. If the parties disagree on whether a batch fails to
conform to the Technical Specifications, an independent laboratory engaged by Corus and reasonably acceptable to Euticals shall retest such batch. The costs of such independent laboratory [*] provided, however, [*]. The independent
laboratory’s decision shall be in writing and shall be binding on both Corus and Euticals. 
  
 6. Prices and Payment. 
  
 6(a) The price for Drug Substance shall determined as provided in Exhibit D and shall be payable within forty-five (45) days of the
invoice date with the appropriate invoice rendered following the delivery of the applicable batch, unless Corus has asked Euticals to keep and store the Drug Substance after the delivery date initially requested by Corus; in such a case Euticals
will invoice Corus at the delivery date initially requested. From time to time, as mutually agreed by both parties, amendments may be made to the invoicing and routing. 
  
 6(b) Sales Taxes. All prices are net sales, use, or other taxes (excluding franchise taxes and taxes
based on Euticals’ income). 
  
 6(c) Late
Payment. Corus will be required to pay a late payment fee of [*] for any payment not made to Euticals within [*], unless the invoice is in dispute. 
  
 7. Confidentiality; Use of Names; Non-Solicitation of Employees.  
  
 7(a) Confidential Information. In the course of the
performance of the parties’ respective obligations hereunder or in preparation for such performance, either prior to or after the date Effective Date, a party (the “Recipient”) may receive or otherwise be exposed to (or may
have received or been exposed to) the Confidential Information either belonging to the other party (the “Discloser”) or entrusted to it by others. “Confidential Information” means any information disclosed in
writing or in any other manner by a party or otherwise made available to the other party concerning the Services, the Drug Substance, the Final Product, all plans and schedules included as Exhibits to this Agreement or any prior agreements relating
to or preparatory to this Agreement or the Services, either party’s performance of this Agreement, or otherwise concerning the business or operations of the Discloser; provided, however, that a party shall not be required hereunder to protect
Confidential Information: (i) that is or becomes generally available to the public other than as a result of disclosure thereof by the Recipient; (ii) that is received lawfully by the Recipient on a non-confidential basis from a third party that is
not itself under any obligation of confidentiality or nondisclosure to the Discloser; (iii) that by written evidence can be shown by the Recipient to have been independently developed by the Recipient; or (iv) that the Recipient establishes by
documentary evidence was in its possession at the time of disclosure by the Discloser or was otherwise not acquired, directly or indirectly, from the other party hereto. 
  
 7(b) Protection. The Recipient shall keep strictly confidential and shall not publish or use for any
purpose, other than as provided for in this Agreement, the Discloser’s Confidential Information and shall not disclose or disseminate all or any part of such Confidential Information in any form (including, without limitation, patent filings of
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under any circumstances to any third party at any time, except for disclosure to those of its investors, potential investors, directors, officers, employees,
accountants, attorneys, advisers and agents whose duties reasonably require them to have access to such Confidential Information, provided that such recipients are advised of the confidential and proprietary nature of the Confidential Information
and are required to and agree to maintain the confidentiality of such Confidential Information to at least the same extent as if they were parties hereto. Upon expiration or termination of this Agreement for any reason, the Recipient agrees to cease
using and to destroy or to return to the Discloser, at the Discloser’s option, all whole and partial copies and derivatives of the Confidential Information, regardless of form, whether in the Recipient’s possession or under the
Recipient’s direct or indirect control. 
  
 7(c) Disclosures Required by Law. If the Recipient believes that Confidential Information will be required to be disclosed pursuant to law or regulation or by order of a court of competent jurisdiction, the Recipient shall promptly
notify the Discloser in order to allow the Discloser to assert whatever exclusions, exemptions or protective measures may be available to it. If the Recipient is required to disclose any Confidential Information, the Recipient may disclose such
Confidential Information as so required without liability hereunder; provided, however, that the Recipient (i) shall give the Discloser written notice of the Confidential Information to be so disclosed as far in advance of its disclosure as is
practicable, (ii) shall furnish only that portion of the Confidential Information which the Recipient is legally required to disclose, and (iii) shall reasonably cooperate with the Discloser (at the Discloser’s expense) to obtain an order
(including but not limited to “confidential treatment” pursuant to U.S. securities laws) or other reliable assurance that confidential treatment will be accorded to the Confidential Information. 
  
 7(d) Use of Names. Neither Corus nor Euticals shall
use the name or marks of the other in any advertising or sales promotion materials or in any publication without prior written consent of such other party. Notwithstanding the foregoing, Corus may without prior written consent identify Euticals as
the source of the Services and the Drug Substance in any regulatory submission associated with the Drug Substance or the Final Product, and either party may refer to the other by name in any reports or documents filed pursuant to any other
requirements of applicable law or governmental regulations. 
  
 7(e) Non-Solicitation of Employees. Each of the parties agrees that during the Term and for one (1) year thereafter, neither party nor any of its affiliates, contractors or agents shall, except
upon the express prior written consent of the other party hereto in each instance, directly or indirectly, neither solicit nor influence in any manner any person who currently is or was employed by the other party or its affiliates during the period
of twelve months preceding the Effective Date, to leave the employment with the other party nor shall employ or seek or attempt to employ in any capacity (whether as a full- or part-time employee) or otherwise use the services as an agent,
consultant, contractor, distributor of any such person. 
  
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 8. Term and Termination. 
  
 8(a) Term. The term of this Agreement (the “Term”) is deemed to have begun on the
(Effective Date) and shall remain in force unless and until terminated as provided below in this Section 8 or terminated by either party at its election by notice to the other given, following the first commercial sale by Corus of the Final Product
containing the Drug Substance; provided, however, that no such elective termination under this Section will be effective prior to the later of (i) the second anniversary of the date such notice is given and (ii) the seventh anniversary of the first
commercial sale by Corus of the Final Product containing the Drug Substance. 
  
 8(b) Termination at Corus’ Election. Corus may at its election terminate the Term, effective ninety (90) days following the delivery to Euticals of written notice of termination, in any of the following
situations: 
  

	 	(i)	Euticals fails to properly address any 483 or FDA warning letter within a timely manner 

  

	 	(ii)	Euticals fails to maintain in full force and effect, without material suspension, any of the Facility Registrations after obtaining the same, or Corus at any time reasonably
believes that Euticals is not exerting its reasonable best efforts to maintain any of the Facility Registrations; 

  

	 	(iii)	effective at any time after 7 years from the Effective Date, Corus will be entitled to the terminate the Term upon nine months prior notice if Corus reasonably demonstrates to
Euticals that alternative sources of supply of Product are potentially available to Corus from a FDA compliant alternative source and at prices less than [*] determined hereunder, and Euticals fails within sixty (60) days to agree to reduce
its price hereunder to be less than or equal to such lower price. 

  
 8(c) Insolvency. Corus may terminate the Term immediately if at any time: (i) Euticals files a voluntary petition in bankruptcy;
(ii) Euticals takes the benefit of any insolvency act; (iii) Euticals is dissolved or adjudicated a bankrupt; (iv) a decree or order by a court having jurisdiction is entered approving a petition seeking reorganization, arrangement, adjustment, or
composition of Euticals under any applicable bankruptcy, insolvency or similar law; or (v) Euticals admits in writing its inability to pay its debts generally as they become due. 
  
 8(d) Termination for Cause. Either party may terminate this Agreement if the other party materially
breaches any of its obligations hereunder and fails to cure such breach within sixty (60) days following receipt of written notice of such failure from the other party. 
  
 8(e) Survival. No expiration or termination of this Agreement shall relieve either party of its
obligations accrued as of the date thereof. In addition, the parties’ covenants, rights and obligations under Sections 3(j), 3(m), 3(n),5(c), 5(d), 5(e), and Sections 7 through 12 shall survive any expiration or termination of this Agreement.

  

					
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 9. Indemnification. 
  
 9(a) Indemnification by Corus. Corus shall defend, indemnify and hold harmless Euticals, its owners,
officers, directors, employees and agents (collectively the “Euticals Indemnitees”) from and against any and all liability, loss, and expense (including reasonable attorneys’ fees) as a result of third party claims or actions
to the extent arising out of the sale or use of the Drug Substance or the Final Product or the handling or further processing of the Drug Substance following delivery by Euticals to Corus hereunder; provided, however, that Corus shall have no
obligation to indemnify the Euticals Indemnitees for any liability, loss, claims, or expense (including attorneys’ fees) to the extent covered by Euticals’ indemnity described below or arising from the negligence or willful misconduct of
any of the Euticals Indemnitees. 
  
 9(b)
Indemnification by Euticals. Euticals shall defend, indemnify and hold harmless Corus, its owners, officers, directors, employees and agents (collectively the “Corus Indemnitees”) from and against any and all liability, loss,
and expense (including reasonable attorneys’ fees) as a result of third party claims or actions to the extent arising out of any errors or defects in Euticals’ manufacturing or other processing or handling of the Drug Substance, any breach
by Euticals of its agreements, representations or warranties in this Agreement, or out of the negligence or willful misconduct of the Euticals Indemnitees; provided, however, that Euticals shall have no obligation to indemnify the Corus Indemnitees
for any liability, loss, claims, or expense (including attorneys’ fees) to the extent arising from the negligence or willful misconduct of any of the Corus Indemnitees. 
  
 9(c) Tender of Defense. The obligation of either party to indemnify the other pursuant to this
section shall be contingent upon timely notification by the indemnitee to the indemnitor of any claims, suits or service of process; the tender by the indemnitee to the indemnitor of full control over the conduct and disposition of any claim, demand
or suit; and reasonable cooperation by the indemnitee in the defense of the claim, demand or suit. No indemnitor will be bound by or liable with respect to any settlement or admission entered or made by any indemnitee without the prior written
consent of the indemnitor. 
  
 9(d) Indemnitee
Counsel. The indemnitee will have the right to retain its own counsel to participate in its defense in any proceeding hereunder. The indemnitee shall pay for its own counsel except to the extent it is determined that (i) one or more legal
defenses may be available to it which are different from or additional to those available to the indemnitor, or (ii) representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between
them. In any such case and to such extent, the indemnitor shall be responsible to pay for the reasonable costs and expenses of the separate counsel retained to participate in the defense of the indemnitee, provided that such expenses are otherwise
among those covered by the indemnitor’s indemnity agreement hereunder. 
  
 10. Dispute Resolution. 
  
 10(a) CEO Review. The parties intend that, to the maximum extent practicable, they shall reach decisions hereunder cooperatively through discussions among the Contact 

  

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Persons and by mutual consent of the parties. In situations in which that does not occur, disputes or differences arising out of or in connection with this
Agreement shall initially be referred for review by the parties’ respective CEOs. Such CEOs shall discuss the proposed dispute or difference, and shall meet with respect thereto if either of them believes a meeting or meetings are likely to be
useful. If the CEOs do not resolve the dispute or difference within thirty (30) business days (or such lesser or longer period as they may agree is a useful period for their discussions), then either of them may institute a formal mediation of such
matter pursuant to Section 10(b). 
  
 10(b)
Mediation. Any dispute or difference between the parties arising out of or in connection with this Agreement that cannot be resolved by the consent of the parties’ CEOs shall be referred to mediation before any party resorts to arbitration
or other dispute resolution procedure. Unless the parties agree otherwise, the mediation will be conducted in accordance with The CPR Mediation Procedure for Business Disputes (Revised 1998) of the CPR Institute for Dispute Resolution by a mediator
who has had both training and experience as a mediator of pharmaceutical industry disputes and other general commercial matters. If the parties cannot agree on a mediator, then the mediator will be selected by the President of the CPR Institute for
Dispute Resolution in accordance with the criteria set forth in the preceding sentence. Within thirty days after the selection of the mediator, the parties and their respective attorneys will meet with the mediator for one mediation session of at
least four hours. If the dispute cannot be settled during such mediation session or during any mutually agreed continuation of such session, any party to this Agreement may give to the mediator and the other party to this Agreement written notice
declaring the mediation process at an end, and such dispute (other than as to a dispute relating to patent validity or as to a matter left to the discretion of a party hereunder) will be resolved by arbitration pursuant to Section 10(c). All
discussions pursuant to this section will be confidential and will be treated as compromise and settlement discussions. Nothing said or disclosed, and no document produced, in the course of such discussions which is not independently discoverable
may be offered or received as evidence or used for impeachment or for any other purpose in any arbitration or litigation. The costs of any mediation pursuant to this section will be shared equally by the parties to this Agreement. The use of
mediation will not be construed under the doctrines of laches, waiver or estoppel to affect adversely the rights of either party, and in particular either party may seek a preliminary injunction or other interim judicial relief at any time if in its
judgment such action is necessary to avoid irreparable damage. 
  
 10(c) Arbitration. Should the parties fail to reach agreement with respect to a dispute or difference (other than as to a dispute relating to patent validity or as to a matter left to the discretion of a party
hereunder), between the parties arising out of or in connection with this Agreement, the dispute or difference will be determined by arbitration in New York City in accordance with the CPR Rules for International Non-Administered Arbitration &
Commentary (Revised 2000) (the “Rules”) of the CPR Institute for Dispute Resolution by a tribunal of three independent and impartial arbitrators, one of which will be appointed by each of Corus and Euticals, and the third of which
shall have had both training and experience as a mediator of pharmaceutical industry licensing and other general commercial matters. If the parties to this Agreement cannot agree on the third arbitrator, then the third arbitrator will be selected by
a neutral organization in accordance with the Rules from a list of candidates meeting the criteria set forth in the preceding sentence. The tribunal may decide any issue as to whether, or as to the 

  

 -11- 

 
extent to which, any dispute is subject to the arbitration and other dispute resolution provisions in this Agreement. Any award ordered by the tribunal must
be consistent with the provisions of this Section 10(c) and the tribunal must render its award in a writing, which writing must include an explanation of the reasons for such award. Any arbitration pursuant to this section will be governed by the
substantive laws of Washington State applicable to contracts made and to be performed in that state, without regard to conflicts of law rules, and by the arbitration law of the Federal Arbitration Act, and judgment upon the award rendered by the
arbitrator may be entered by any court having jurisdiction thereof. The statute of limitations of Washington State applicable to the commencement of a lawsuit will apply to the commencement of an arbitration under this section, except that no
defenses will be available based upon the passage of time during any negotiation required pursuant to this Section 10. All fees, costs and expenses of the arbitrators, and all other costs and expenses of the arbitration, will be shared equally by
the parties to this Agreement unless such parties agree otherwise or unless the tribunal in the award assesses such costs and expenses against one of such parties or allocates such costs and expenses other than equally between such parties. Pending
the award of the arbitration tribunal, the parties shall continue to perform their respective obligations under this Agreement. 
  
 10(d) Preliminary Relief. Notwithstanding the foregoing, either party may, on good cause shown, seek a temporary restraining order
and/or a preliminary injunction from a court of competent jurisdiction, to be effective pending the institution of the arbitration process or the deliberation and award of the arbitration tribunal. 
  
 11. Miscellaneous. 
  
 11(a) Expenses. Except as specifically provided
otherwise herein, each of the parties shall bear its own expenses and those of its personnel under or in connection with such party’s performance of this Agreement. 
  
 11(b) Notices. All notices from one party to the other required or permitted under this Agreement
shall be in writing, shall refer specifically to this Agreement, and shall be delivered in person, or sent by electronic or facsimile transmission for which a confirmation of delivery is obtained, or sent by registered mail or express courier
services providing evidence of delivery, in each case to the recipient party’s respective address set forth on the signature page hereof (or to such updated address as may be specified in writing to the other party from time to time). Such
notices will be deemed effective as of the date so delivered or on the fifth business day following mailing. 
  
 11(c) Assignment. Neither party shall assign its rights or delegate or subcontract any of its responsibilities hereunder without
prior written consent of other, except that Euticals’ consent will not be required for a transfer or transfers by Corus or its transferee of all of its rights and obligations hereunder in conjunction with a merger or other corporate
reorganization or with the transfer of all or substantially all of Corus’ business relating to the Drug Substance and the Final Product. Subject to the foregoing, this Agreement will bind and benefit the parties and their respective successors
and assigns. 
  

 -12- 

 11(d) Independent Contractors. Nothing in this Agreement shall be construed
to create any partnership, employment, agency or other relationship between Euticals and Corus, other than of independent contracting parties. Neither party shall have any right, power, or authority to assume, create or incur an expense, liability,
or obligation, express or implied, on behalf of the other. 
  
 11(e) Waiver. No waiver by either party hereunder shall be enforceable unless in a writing signed by the party to be bound, nor shall any waiver of any provision in one instance constitute a waiver of
any other breach of that or any other provision of this Agreement. 
  
 11(f) Severability. If any provision of this Agreement is determined to be invalid, illegal or unenforceable, such provision shall be enforced to the maximum extent permitted by law and consistent with
the parties’ fundamental intentions hereunder, and the remaining provisions shall not be affected or impaired. 
  
 11(g) Choice of Law. This Agreement shall be governed by the laws of Washington State, including without limitation Article
2 of the UCC as adopted in Washington, and any controlling federal law of the United States, regardless of any choice of law principles to the contrary. The United Nations Convention on the International Sale of Goods is not applicable. 

 
 11(h) Attorneys’ Fees. If either party is in
breach of this Agreement, the non-breaching party shall be entitled to collect from the breaching party, as part of its damages for said breach, reasonable attorneys fees and costs and expenses associated with enforcing any provision hereof.

  
 11(i) Entire Agreement. All exhibits
referenced herein are incorporated in and made a part of this Agreement as if fully set forth herein. This Agreement contains the entire understanding between the parties with respect to its subject matter and supersedes all prior written or oral
communications, negotiations, understandings or agreements of any kind with respect to such subject matter. No amendment or modification of this Agreement shall be effective unless made or agreed to in writing by duly authorized officers of both
parties. 
  
 11(j) Counterparts.
This Agreement may be executed simultaneously in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  

 -13- 

 11(k) Notwithstanding anything in this Agreement or in any other written or oral
understanding or agreement to which the parties hereto are parties or by which they are bound, either party (or its representatives, agents or employees) may consult any tax advisor regarding the tax treatment and tax structure of the transaction
contemplated by this Agreement and may at any time disclose to any person, without limitation of any kind, the tax treatment and tax structure of such transaction and all materials (including opinions or other tax analyses) that are provided
relating to such treatment or structure. The preceding sentence is intended to satisfy the requirements for the transaction contemplated herein to avoid classification as a “confidential transaction” in accordance with U.S. Treasury
Regulations Section 1.6011-4(b)(3) and shall be interpreted consistent with such intent. This authorization is not intended to permit disclosure of any information not related to the tax treatment or tax structure of any transaction contemplated
hereby, including without limitation (except to the extent such information is related to the tax treatment or tax structure of any such transaction): 
  

	 	(i)	the identities of participants or potential participants in any such transaction, 

  

	 	(ii)	the existence or status of any negotiations, 

  

	 	(iii)	protected health information, 

  

	 	(iv)	information in or about patent applications, 

  

	 	(v)	scientific, technical, or medical information, and 

  

	 	(vi)	pricing and financial information. 

  
 [signature pages follows] 
  

 -14- 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the Effective
Date. Each of the persons signing this Agreement affirms that he or she is duly authorized to do so and thereby to bind the indicated entity. 
  

			
	EUTICALS SpA
		
	By	 	 [*]

	 Title
	 	 [*]

	 Date Signed Jan. 23rd, 2004

  

			
	 Address:
	  	Via Emilia, 99
	 	  	Frazione San Grato
	 	  	26900 Lodi (LO), Italy
	 	  	[*]
	 	  	FAX: 39 02 57512662

  

									
	CORUS PHARMA, INC.	 	 	 	 
					
	 By
	 	 /s/ Alan Bruce Montgomery
	 	 	 	 	 	 /s/ Iain Duncan

	 Title
	 	 CEO
	 	 	 	 	 	 VP Operations

	 Date Signed Jan. 23, 2004
	 	 	 	 	 	 Corus Pharma, Inc.

	 	 	 	 	 	 	 	 	 22 Jan, 2004

  

			
	 Address:
	  	2025 First Avenue, Suite 800
	 	  	Seattle, WA 98121 (USA)
	 	  	Attn: Bruce Montgomery, MD
	 	  	FAX: 206-728-5095

  

					
	 	  	-15-	  	 
			
	 	  	 	  	*Confidential Treatment Requested.Master Services Agreement dated April 7, 2003

 Exhibit 10.19 
  

	*	Certain confidential information contained in this document, marked by brackets, has been omitted and filed with the Securities and Exchange Commission pursuant to Rule 406 of
the Securities Act of 1933, as amended. 

  
 MASTER SERVICES AGREEMENT 
  
 This Master Services Agreement (the
“Contract”) is agreed to as of April 7, 2003 by and between Inveresk Research International Limited (hereinafter referred to as “Inveresk”) and Abaris Pharma, Inc., a Delaware corporation (hereinafter referred to as “the
Sponsor”). Sponsor may from time to time issue one or more Project Assignments to Inveresk (“Project Assignment”). Each Project Assignment will include a study protocol (the “Protocol”) applicable thereto. Inveresk will not
begin to render services under the Contract unless and until Sponsor issues a Project Assignment for such services (each set of ordered services being a “Project”). Subject to the terms of this Contract, Inveresk will render the services
set forth in Project Assignment(s) accepted by Inveresk in accordance with the applicable Protocol and by the completion dates set forth therein. 
  

	1.	Confidentiality 

  
 Inveresk shall keep confidential and shall not disclose to any third party at any time without the prior written consent of the Sponsor any information
received in confidence from the Sponsor relating to any Project or any information arising from or generated during the conduct of any Project by Inveresk. 
  
 All results, reports, findings, conclusions, work papers, notebooks, electronic records, biological samples, prototypes, and any other information or
materials in any form or format arising out of performance of a Project Assignment by or for Inveresk (the “Project Results”) will be the sole property of Sponsor and shall become part of the Confidential Information to be protected under
this Contract. 
  
 The name of Inveresk or the names of any of
its staff shall not be used for any advertising, promotional or other public purposes without the prior written consent of Inveresk. The name of Sponsor, its affiliates and the names of any of their staff shall not be used for any advertising,
promotional or other purpose without the prior written consent of Sponsor. 
  

	2.	Quality Assurance 

  
 All work under this Contract and each Project Assignment will be conducted and all data and other results will be documented and reported strictly in
accordance with the applicable Protocol. 
  

 Inveresk warrants that its employees, agents, and approved subcontractors involved in performance of any
Project Assignment shall have the experience and expertise necessary to perform such Project Assignment(s). Inveresk warrants that it has implemented and shall abide by a conflicts of interest disclosure and management policy and program that
complies with, and shall comply with, applicable law and regulations and with all industry standards throughout the period of all Projects. Inveresk represents and warrants that neither it, any approved subcontractor, nor the personnel of it or any
such subcontractors: (i) has or will have contracted for or other studies in which their participation was terminated due to any failure to comply with protocols or applicable law or regulation; (ii) are or ever have been debarred (or to their
knowledge are or ever have been under investigation with regard to potential debarment) by any regulatory body as qualified contractors or supervisors of clinical trials or other studies; (iii) has any significant financial interest in Sponsor or
its affiliates. Inveresk will report to Sponsor if any at any time during the term of this Contract or within 12 months following the completion of any Project any of Inveresk’s warranties under clauses (i), (ii) or (iii) above becomes
inaccurate. 
  
 Inveresk warrants that it shall not, in the
performance of any services hereunder or preparing to do so, violate any applicable law or infringe or misappropriate any intellectual properties of any third party, except to the extent due directly to Inveresk’s following instructions given
to it by Sponsor in a Project Assignment. 
  
 Inveresk shall
conduct all work in or relating to a Project in accordance with all applicable and generally accepted international standards for scientific, preclinical (including animal studies), all as more fully provided in the Project Assignments (the
“Applicable Standards”). Except as may otherwise be provided in a Project Assignment, the Applicable Standards may include procedures and documentation consistent with the current Good Laboratory Practice standards. Inveresk shall at all
times be responsible to remain current and updated as to all changes in the Applicable Standards. 
  
 Inveresk agrees to notify Sponsor promptly if Inveresk knows or has reason to believe that any portion or aspect of any Project (including without
limitation the applicable Protocol) would, if followed by Inveresk, violate any applicable law or infringe or misappropriate any intellectual properties of any third party or be inconsistent with the Applicable Standards. 
  
 Inveresk shall permit Sponsor’s representatives to visit Inveresk
facilities during normal working hours and with reasonable frequency to perform quality assurance audits, observe Project progress, discuss the Project with appropriate officials and other personnel of Inveresk, and to inspect records and data
relevant to the Project. Facility visits shall also be permitted during the data retention period specified in the applicable Project Assignment. 
  

	3.	Health and Safety; Project Materials 

  
 To allow Inveresk to comply with the Health and Safety at Work Act (1974) the Sponsor shall provide Inveresk with all available information regarding
known or potential hazards associated with the use of any substances supplied to Inveresk by the Sponsor. 
  
 Sponsor shall provide sufficient quantities of the materials, formulations and compounds to be tested (the “Project Materials”). Inveresk will
at all times maintain control of the Project Materials in accordance with the Applicable Standards and the Protocol. Inveresk agrees that the Project Materials will be used for research purposes only in connection with the Project at the facility
designated in the Protocol, and only under suitable containment conditions. No Project Material will be sold or otherwise provided to any third party other than solely as is required for the conduct 

  

 2 

 
of the Project under the Protocol and this Contract. The Project Materials will not be used in the treatment or diagnosis of animals except for the purpose
of conducting the Project as described in the Protocol. Inveresk acknowledges that the Project Materials are to be used with caution and prudence since all of the characteristics of the Project Materials are not known. Upon completion or termination
of the Project, all unused Project Material is to be returned to Sponsor in accordance with the Protocol. 
  

	4.	Variations 

  
 It is recognised that during a Project variations from a protocol may become advisable because of results observed, or at the Sponsor’s request. Any
change in the Contract price resulting therefrom will be incorporated in the final account and notified in writing. No such proposed changes, including any associated changes in the price, payment schedules, and projected completion date of the
Project, shall be effective unless accepted in writing in advance by authorized representatives of both Inveresk and Sponsor. Responses to change requests made in writing shall be provided in a timely fashion, but in all cases within fourteen (14)
days of receipt. Amendments to the Protocol should be documented and dated as provided in the Protocol. 
  

	5.	Reports 

  
 Inveresk will provide one or more draft report(s) at intervals, and upon completion of the Project, as more fully described in the applicable Project
Assignment. On receipt of the Sponsor’s approval of such draft(s) (with or without revisions requested by Sponsor) or 16 weeks after dispatch of the draft (or such other period as may be specified for this purpose in the applicable Project
Assignment), whichever is sooner, Inveresk will provide three copies of a Final Report to Sponsor. Additional copies of Reports and Interim Reports not specified in the Protocol will be provided at the Sponsor’s request and expense. Sponsor
shall own all Draft, Interim and Final reports and all copyright rights and rights of confidentiality therein. 
  
 Inveresk shall not publish or otherwise disclose to any third party any Report or data prepared for the Sponsor by Inveresk or otherwise arising from or
related to any Project Assignment without Sponsor’s prior written consent in each instance. 
  
 Inveresk shall immediately notify Sponsor and follow up in writing within 24 hours of becoming aware of any planned or actual inspections involving any
Project by any regulatory authority and shall keep Sponsor informed of the progress of such inspections on all matters raised by any regulatory authorities in respect thereof. 
  
 Inveresk shall notify and provide Sponsor with copies of all correspondence with any regulatory authority (including, but
not limited to FDA form 483s, warning letters, and debarment notifications) that could impact the quality or value to Sponsor of any prior or subsequent Project Results. 
  

	6.	Assignments 

  
 Except for assignments made in connection with corporate reorganizations or with the transfer of all or substantially all of the assets and business of
Sponsor that relate to this Contract, the Sponsor shall not be entitled to assign this Contract in whole or in part without the written consent of Inveresk which consent shall not be unreasonably withheld or delayed. Inveresk shall not be entitled
to assign, delegate or sub-contract this Contract or any Project Assignment in whole or in part without the written consent of Sponsor in each instance, which consent may be withheld in Sponsor’s sole discretion. 
  

 3 

	7.	Payment 

  
 Subject to the terms and conditions of this Contract, all invoices are payable 30 days after presentation. After overdue notice, Inveresk reserves the
right to cease or suspend all work on the Project for which payment remains in arrears. [*]. 
  

	8.	Prices 

  
 Inveresk reserves the right to charge the Sponsor, at the rates specified in Schedule A hereto, for professional advice provided by Inveresk in connection
with the preparation of a draft Protocol where Inveresk is not subsequently commissioned to carry out the Project. 
  
 Sponsor will, as complete compensation to Inveresk, pay Inveresk the fee set forth in each Project Assignment for services rendered pursuant to this
Contract. Payment schedules shall be as set forth in the applicable Project Assignment. 
  
 Other than the Project Materials, Inveresk shall supply without separate charge (except as explicitly provided in a Project Assignment) all facilities, utilities, equipment, supplies, personnel, information, rights,
and other items required for the performance by Inveresk of its services under this Contract and each Project Assignment. 
  
 Inveresk will be reimbursed only for expenses which are expressly provided for in a Project Assignment or which have been approved in advance in writing
by an authorized Sponsor representative, within thirty (30) days of receipt of Inveresk’s invoice, provided Inveresk has furnished such documentation for authorized expenses as Sponsor may reasonably request. 
  
 The Project price excludes the cost of importation of samples or specimens
and freight charges associated with their return shipment. 
  
 Prices are exclusive of VAT, which shall be charged, where appropriate, at the prevailing rate. 
  

	9.	Patents and Inventions 

  
 No right or license to Sponsor’s intellectual property is granted or implied as a result of this Contract or any Project, except to the limited
extent necessary to conduct the applicable Project(s). The transfer of Project Material provided herein does not constitute a public disclosure. 
  
 All ideas, discoveries and inventions whether or not patentable, excepting Methodological Innovations as defined below, conceived, reduced to practice,
made, developed or arising during any Project shall be owned by and the property of the Sponsor (“Project Inventions”). As used herein, “Methodological Innovations” means ideas, discoveries and inventions that are made solely by
Inveresk and that consist solely of new or innovative means of accomplishing Inveresk’s Project tasks and that (i) do not consist of or relate in any way in whole or in part to modifications, improvements, or new uses of any Project Materials
or their application or delivery; (ii) are not in 

  

					
	 *  Confidential Treatment Requested.
	  	 	  	 
			
	 	  	4	  	 

 
whole or in part a direct result of following detailed instructions provided by Sponsor; and (iii) do not in whole or in part represent a reduction to
practice of Sponsor’s prior conceptions. Inveresk hereby assigns, transfers and conveys to Sponsor and shall further assign, transfer and convey to Sponsor any and all right, title and interest to the Project Inventions and Project Results.
Inveresk shall have no obligation to register, secure or otherwise defend such inventions or discoveries on behalf of the Sponsor. However, Inveresk shall reasonably cooperate with the Sponsor, at the Sponsor’s expense, in preparing and filing
patent, copyright and other proprietary right applications, and/or registrations for the Project Inventions and Project Results. Such cooperation shall include, without limitation: (i) requiring relevant employees, agents, subcontractors and
consultants to execute written assignments; and (ii) providing information regarding such inventions, inventorship and all other instruments as may reasonably deem necessary to pursue and maximize the commercial value of such owned inventions.

  
 Inveresk shall at all times obtain and retain in force
agreements in proper form and substance with all persons involved in any Project requiring the assignment to Sponsor of all Project Inventions and requiring that such persons comply with the confidentiality obligations and restrictions reflected in
this Contract. 
  

	10.	Retention of Project Results 

  
 Inveresk will retain and preserve all Project Results in accordance with all Applicable Standards and as set forth in the applicable Protocol. No Project
Results will be destroyed or otherwise disposed of by Inveresk without authorization in writing in advance from Sponsor in each instance. Inveresk shall, upon Sponsor’s request from time to time, promptly deliver any and all Project Results and
any work-in-process to Sponsor. 
  
 Except as may otherwise be
provided in an applicable Protocol, Inveresk shall retain in its archive for a period of five years following the date of the final report all slides, blocks, original data and other materials arising out of the Project. At the end of the five year
period referred to above, Inveresk shall contact the Sponsor for instructions on the transfer, retention or disposal of materials. Reasonable fees for the transfer, continued retention or disposal of the materials will be invoiced to the Sponsor.

  
 Any biological samples taken for analysis in accordance with
the protocol will, where appropriate following analysis, be stored deep frozen after issue of the Final Report for at least the data retention period specified in the applicable Protocol. Samples will then be disposed of free of charge unless prior
written instructions are specified in the applicable Protocol or otherwise have been received from the Sponsor regarding shipment of the samples to the Sponsor or continued storage at Inveresk at the Sponsor’s expense. 
  
 If at the request of the Sponsor any material is disposed of or delivered to
the Sponsor, Inveresk shall be relieved of any further responsibility thereof, including any claims made against Sponsor by third parties. 
  

	11.	Termination 

  
 Either the Sponsor or Inveresk shall be entitled to terminate the Contract at any time by giving not less than ten (10) business days prior notice in
writing to the other. If the Sponsor terminates the Contract (other than by reason of default by Inveresk in its obligations or in the circumstances referred to in Clause 12 of these Conditions) or Inveresk terminates the Contract by reason of

  

 5 

 
default by the Sponsor in its obligations (other than in the circumstances referred to in Clause 12 of these Conditions), Inveresk shall be entitled to
reimbursement for all reasonable costs incurred by it arising out of the termination of any Project then in process (including a fee to cover the loss of and/or disruption to laboratory work caused by the termination). If Inveresk terminates the
Contract (save where it does so by reason of the Sponsor being in default in its obligation or in the circumstances referred to in Clause 12 of these Conditions) or if the Sponsor terminates the Contract by reason of default by Inveresk in its
obligations (other than in the circumstances referred to in Clause 12 of these Conditions), Inveresk shall reimburse to the Sponsor all payments made by the Sponsor to Inveresk in relation to any then-uncompleted Project(s). No termination will
affect any then-accrued right or obligation hereunder, and the provisions of Clauses 1, 2, 3, 5, 9, and 10 through 16 shall in any event survive any termination. 
  

	12.	Force Majeure 

  
 Inveresk shall not be responsible for and shall not incur any liability for delays, loss, damages, costs, claims, loss of profit or consequential loss
caused by or resulting from: 
  

	 	(a)	any prohibition, enactment, embargo or other limitation first imposed by the United Kingdom or any other Government or Local Authority following the date of Inveresk’s
acceptance of the applicable Project Assignment: 

  

	 	(b)	disease or illness affecting either employees of Inveresk, any human volunteers or experimental animals, provided that Inveresk shall have followed the Protocol and all the
Applicable Standards with respect thereto and to the prevention of contamination therefrom: 

  

	 	(c)	war, industrial action or civil commotion: 

  

	 	(d)	destruction or damage to buildings by fire, storm, tempest, vandalism, lightning, explosion or bursting or overflowing of water tanks not owned or controlled by Inveresk:

  

	 	(e)	the failure or withdrawal of public services: 

  

	 	(f)	acts of God, force majeure or any other cause beyond its control. 

  

	13.	Indemnity and Insurance 

  
 Inveresk shall indemnify and hold the Sponsor harmless from and against all third party claims, actions, judgements, damages, penalties, and fines (and
any costs or expenses or reasonable professional fees incurred by the Sponsor in relation thereto) arising out of Inveresk’s or its personnel’s or contractor’s willful, reckless, or negligent acts or omissions or failure to adhere to
the terms of this Contract, Protocol, or failure to comply with applicable laws or regulations. 
  
 The Sponsor shall indemnify and hold Inveresk harmless from and against any and all claims, actions, judgements, damages, losses, penalties, fines and any
costs or expenses or professional fees incurred by Inveresk in relation thereto arising out of any breach of the Contract by the Sponsor or any negligent act or omission of the Sponsor. The Sponsor shall further indemnify and hold Inveresk harmless
from and against any and all claims, arising directly or indirectly out of the Project by third parties and against any costs or expenses or professional fees incurred by Inveresk in relation to such claims. 
  
 Except with respect to the parties’ indemnification and hold harmless
agreements for matters arising out of the indemnifying party’s or its personnel’s or contractor’s willful, reckless, or negligent acts or omissions: (a) any liabilities of Inveresk to the Sponsor, or of Sponsor to Inveresk, howsoever
arising, in respect of the contract and its performance shall be limited to an amount equal to the contract price; and (b) in no event shall either party be liable to the other for any consequential loss, special or exemplary damages. 
  

 6 

 If Party (the “Indemnified Party”) seeks indemnification under this Section, it shall inform
the other Party the “Indemnifying Party”) of a claim as soon as reasonably practicable after it receives notice of the claim, shall permit the Indemnifying Party to assume direction and control of the defense of the claim (including the
right to settle the claim solely for monetary consideration), and, at the Indemnifying Party’s expense, shall cooperate as reasonably requested in the defense of the claim. The Indemnified Party shall have the right to retain its own counsel,
subject to approval by the Indemnifying Party. Such approval may be denied if an actual or potential conflict of interest exits between the counsel retained by Indemnifying Party and any of the proposed counsel for the Indemnified Party. The
Indemnifying Party may not settle such action or claim, or otherwise consent to an adverse judgment in such action or claim, without the express written consent of the Indemnified Party if such settlement or adverse judgement diminishes the right or
interest of the Indemnified Party. 
  
 Without limitation upon
the indemnity or other obligations of either party hereunder, each of Sponsor shall at all times during the term of this Contract obtain and keep in force, with insurers reasonably acceptable to Inveresk, commercial general liability insurance
including coverage for products liability and having policy limits of [*]. In addition, Inveresk shall at all times during the term of this Contract obtain and keep in force, with insurers (a) Employers’ Liability Insurance (b) Public
Liability Insurance (c) Non-negligence Insurance (d) Errors and Omissions Insurance, which shall have policy limits of [*]. Each party shall provide written proof of the existence and terms of such insurance to the other party upon request,
and shall in any event instruct its insurance carriers to notify the other party hereto at least thirty (30) days in advance of any cancellation or expiration of such coverage. 
  

	14.	Proper Law of the Contract 

  
 This Contract and the rights of the Sponsor and Inveresk hereunder shall be determined in all respects according to the law of the country in which the
work is undertaken. 
  

	15.	Arbitration 

  
 In the event of a dispute arising between the parties hereto at any time from any matter relating to the Contract or any Project (other than with respect
to patent infringement or validity), such dispute shall be finally resolved by binding arbitration in accordance with the UNCITRAL Rules as administered by the American Arbitration Association. Unless the parties otherwise agree, the arbitration
will be conducted in Toronto, Ontario, Canada, before a panel of three arbitrators, one of whom shall be selected by Inveresk, one by the Sponsor and the third by the two previously selected arbitrators. Each of the parties agrees that the decisions
of the arbitrators shall be final and binding upon it and shall be enforceable in any court having jurisdiction. The parties’ and the arbitrators’ costs of any arbitration shall be shared equally by Inveresk and the Sponsor unless the
arbitration panel determines that a party has incurred unreasonable expenses due to vexatious or bad faith positions taken by the other party, in which event the arbitration panel may make an award of all or any portion of such expenses so incurred.
Notwithstanding the foregoing, either party may seek a preliminary injunction or other interim judicial relief at any time if in its judgement such action is necessary to avoid irreparable damage. 
  

					
	 *  Confidential Treatment Requested.
	  	 	  	 
			
	 	  	7	  	 

 Approved and accepted by the Parties: 
  

									
	ABARIS PHARMA, INC.	 	 	 	INVERESK RESEARCH INTERNATIONAL LIMITED
			
	/s/ A. Bruce Montgomery	 	 	 	/s/ R. J. Greenough
	 Signature
	 	 	 	 Signature

					
	 Name
	 	 A.B. Montgomery
	 	 	 	 Name
	 	 R.J. Greenough

					
	 Title
	 	 CEO
	 	 	 	 Title
	 	 Director of Toxicology

									
					
	 Date Signed
	 	 4/28/03
	 	 	 	          Date Signed
	 	 24 April 2003

  

 8 

 Schedule A 
  

DRAFT 
  
 Project Assignment 
  
 [*] 
  

					
	 *  Confidential Treatment Requested.
	  	 	  	 
			
	 	  	9

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