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prtk-ex1011_173.htm

EXHIBIT 10.11

 

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LICENSE AND COLLABORATION AGREEMENT

This License and Collaboration Agreement (this “Agreement”) is made as of April 21, 2017 (the “Effective Date”), by and between Paratek Bermuda Ltd. a corporation organized and existing under the laws of Bermuda, located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda, (“Paratek”), and Zai Lab (Shanghai) Co., Ltd., an exempted company organized and existing under the laws of P.R. of China, located at 1043 Halei Road, Building 8, Suite 502, Zhangjiang Hi-tech Park, Shanghai, PRC 201203 (“Zai”).  Paratek and Zai are referred to in this Agreement individually as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS, Paratek is a pharmaceutical company specializing in anti-infective drug development, and Paratek and its Affiliates own or control rights to the Compound and Licensed Product (as defined herein);

WHEREAS, Zai is a pharmaceutical company having experience in the development, manufacture and commercialization of pharmaceutical products in the Territory;

WHEREAS, Zai is prepared to develop and commercialize the Licensed Product in the Territory, providing it receives supporting materials such as clinical trial data, regulatory submissions, and starting materials that may allow for earlier market entry and market exclusivity of the Licensed Product compared to competitors;

WHEREAS, Paratek wishes to have Licensed Product developed and commercialized in the Territory, and is prepared to provide supporting materials such as clinical trial data, regulatory submissions, and starting materials to Zai, which may allow for earlier market entry and market exclusivity for the Licensed Product compared to competitors.

WHEREAS, Paratek wishes to grant to Zai, and Zai wishes to be granted, an exclusive license under Paratek’s rights to Develop, Manufacture and Commercialize (each as defined herein) the Licensed Product in the Field in the Territory (each as defined herein) in accordance with the terms and conditions set forth below.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

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ARTICLE 1
Definitions

Unless specifically set forth to the contrary herein, the following terms, whether used in the singular or plural, will have the respective meanings set forth below:

1.1.“Activity Target” will have the meaning set forth in Section 5.3.

1.2.“Activity Target Deadline” will have the meaning set forth in Section 5.3.

1.3.“Adverse Event” means any unwanted or harmful medical occurrence in a patient or subject who is administered a Licensed Product, whether or not considered related to such Licensed Product, including any undesirable sign (including abnormal laboratory findings of clinical concern), symptom or disease temporally associated with the use of such Licensed Product.

1.4.“Affiliate” means, with respect to a Party, any entity that directly or indirectly controls, is controlled by or is under common control with such Party.  As used in this Section 1.4, “Control” (and, with correlative meanings, the terms “controlled by” and “under common control with”) means, in the case of a corporation, the ownership of 50% or more of the outstanding voting securities thereof or, in the case of any other type of entity, an interest that results in the ability to direct or cause the direction of the management and policies of such party or the power to appoint 50% or more of the members of the governing body of the party or, where ownership of 50% or more of such securities or interest is prohibited by law, ownership of the maximum amount legally permitted.

1.5.“Agreement” will have the meaning set forth in the introduction to this agreement.

1.6.“Alliance Manager” will have the meaning set forth in Section 3.1.

1.7.“Anti-Corruption Laws” will have the meaning set forth in Section 11.6(a)(i).

1.8.“Applicable Laws” means all statutes, ordinances, regulations, rules or orders of any kind whatsoever of any Governmental Authority that may be in effect from time to time and applicable to the activities contemplated by this Agreement.

1.9.“Biodefense” means a use related to the defense from Biothreat Agents.

1.10.“Biothreat Agent” means (a) pathogens that cause a high rate of illness in people exposed, result in a high rate of mortality, have a short incubation period, and have a limited number of persons with immunity, or (b) a bacterium, virus, protozoan, parasite, or fungus that can be used as a weapon in biological warfare.

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1.11.“Business Day” means a day other than Saturday, Sunday or any day on which banks located in the United States or the PRC are authorized or obligated to close.  Whenever this Agreement refers to a number of days, such number will refer to calendar days unless Business Days are specified.

1.12.“Calendar Quarter” means the respective periods of three consecutive calendar months ending on March 31, June 30, September 30 and December 31.

1.13.“Calendar Year” means each 12 month period commencing on January 1.

1.14.“CFDA” means the China Food and Drug Administration, and local counterparts thereto, and any successor agency(ies) or authority thereto having substantially the same function.

1.15.“cGMP” means all applicable current Good Manufacturing Practices including, as applicable, (a) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Parts 4, 210, 211, 601, 610 and 820, (b) European Directive 2003/94/EC and Eudralex 4, (c) the principles detailed in the ICH Q7 guidelines, and (d) the equivalent Applicable Laws in any relevant country or region, each as may be amended and applicable from time to time.

1.16.“Clinical Trial” means any clinical testing of Licensed Product in human subjects.

1.17.“Clinical Trial Material” means Licensed Product and placebo for administration to humans in a Clinical Trial.

1.18.“CMC” means data, information, or procedures (as applicable) relating to the composition, Manufacture, or control of the Compound or Licensed Product, which may be requested or required by a Regulatory Authority for Regulatory Approval, including but not limited to data, information, and procedures relating to structure, Manufacturing process, validation, characterization, container closure systems, stability, quality, and purity.

1.19.“Combination Product” mean (a) any single product comprising both (i) a Compound and (ii) one or more other therapies or pharmaceutically active compounds or substances and do not require the use of any Paratek Technology; (b) any sale of a Licensed Product with another therapy(ies) or product(s) for a single invoice price; or (c) any sale of a Licensed Product as part of a bundle with other therapy(ies), product(s) or service(s) (i.e., where a Licensed Product and such other therapy(ies), product(s) or service(s) are sold for a single invoice price or where a discount, rebate or other amount that reduces the price of a Licensed Product is provided in exchange for (or otherwise conditioned upon) the purchase of such other therapy(ies), product(s) or services), to the extent not described in clause (a) or (b).  The Compound portion of any Combination Product shall be deemed the “Licensed Component” and the other portion of such Combination Product the “Other Component”, and each Combination Product shall be deemed a Licensed Product hereunder.

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1.20.“Commercialization” or “Commercialize” means all activities directed to marketing, distribution, detailing or selling of pharmaceutical products (including manufacturing, importing and exporting activities in connection therewith).

1.21.“Commercialization Plan” means the written plan for the Commercialization of the Licensed Product.

1.22.“Commercially Reasonable Efforts” means the use of diligent, good faith efforts and resources, in an active and ongoing program, as normally used by a similarly situated company for a product discovered or identified internally that is important to such company’s overall strategy or objectives, which product is at a similar stage in its development or product life and is of similar market potential and intellectual property protection, [* * *]; and in no event will such efforts and resources be less than the applicable Party would apply to achieve its own high priority goals.  Commercially Reasonable Efforts requires that a Party, at a minimum, assign responsibility for such obligations to qualified employees, set annual goals and objectives for carrying out such obligations, and allocate adequate resources designed to meet such goals and objectives, in each case, in order to develop the Licensed Product as an active and ongoing program, and obtain Regulatory Approval for the Licensed Product in the Territory in an expeditious manner.  Additionally, Commercially Reasonable Efforts requires [* * *] such efforts and resources as described above [* * *] for the Licensed Product, which includes [* * *] for the Licensed Product [* * *].

1.23.“Compound” means (i) omadacycline having the chemical structure set forth in Schedule 1.23, (ii) a prodrug or metabolite of the compound specified in (i), and (iii) any salt or polymorph of the compound specified in (i).

1.24.“Confidential Information” means all confidential information of the Disclosing Party or its Affiliates, regardless of its form or medium as provided to the Receiving Party or its Affiliates in connection with this Agreement; provided that, Confidential Information will not include any information that the Receiving Party can show by competent evidence: (a) is already known to the Receiving Party at the time it is disclosed to the Receiving Party by the Disclosing Party without an obligation of confidentiality and not through a prior disclosure by the Disclosing Party, (b) is or becomes generally known to the public through no act or omission of the Receiving Party in violation of the terms of this Agreement, (c) has been lawfully received by the Receiving Party from a Third Party without restriction on its disclosure and without, to the knowledge of the Receiving Party, a breach by such Third Party of an obligation of confidentiality to the Disclosing Party, or (d) has been independently developed by the Receiving Party without use of or reference to the Confidential Information of the Disclosing Party.  The terms of this Agreement shall be the Confidential Information of both Parties.

1.25.“Continuing Technology Transfer” will have the meaning set forth in Section 4.1.

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1.26.“Control” or “Controlled” means, with respect to any Know-How, Patents or other intellectual property rights, that a party has the legal authority or right (whether by ownership, license or otherwise) to grant a license, sublicense, access or right to use (as applicable) under such Know-How, Patents, or other intellectual property rights, on the terms and conditions set forth herein, in each case without breaching the terms of any agreement with a Third Party.

1.27.“Develop” or “Development” or “Developing” means research, discovery, and preclinical and clinical drug or biological development activities, including test method development and stability testing, toxicology, formulation, quality assurance/quality control development, statistical analysis, preclinical and clinical studies and regulatory affairs, approval and registration.

1.28.“Development Plan” will have the meaning set forth in Section 5.2.

1.29.“Disclosing Party” will have the meaning set forth in Section 10.1(a).

1.30.“Dispute” will have the meaning set forth in Section 15.1.

1.31.“Effective Date” will have the meaning set forth in the introduction in this Agreement.

1.32.“Executive Officers” will have the meaning set forth in Section 3.2(f).

1.33.“Exploit” or “Exploitation” or “Exploiting” means to use, Develop and Commercialize, including to have Developed and have Commercialized, and to Manufacture and to have Manufactured to support the foregoing.

1.34.“Field” means, except for Biodefense, all human therapeutic and preventative uses.

1.35.“First Commercial Sale” means, with respect to any Licensed Product, the first arm’s length sale of such Licensed Product to a Third Party in a region of the Territory by Zai, its Affiliate(s) or Sublicensee(s) for use or consumption in such region following Regulatory Approval.  Sales prior to receipt of marketing and pricing approvals, such as so-called “treatment IND sales,” “named patient sales” and “compassionate use sales” and any sales to any government, foreign or domestic, including purchases for immediate sale and/or stockpiling purposes, are not a First Commercial Sale in that region.

1.36.“FTE” means the equivalent of the work of a full-time individual for a 12 month period.

1.37.“FTE Rate” means a rate of [* * *] per FTE per year, to be pro-rated on a hourly basis of [* * *] per FTE per hour, assuming [* * *] hours per year for an FTE.

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1.38.“GAAP” means United States generally accepted accounting principles, consistently applied.

1.39.“GCP” means all applicable Good Clinical Practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses and reporting of clinical trials, including, as applicable (a) as set forth in the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use Harmonized Tripartite Guideline for Good Clinical Practice (CPMP/ICH/135/95) and any other guidelines for good clinical practice for trials on medicinal products in the Territory, (b) the Declaration of Helsinki (2004) as last amended at the 52nd World Medical Association in October 2000 and any further amendments or clarifications thereto, (c) U.S. Code of Federal Regulations Title 21, Parts 50 (Protection of Human Subjects), 56 (Institutional Review Boards) and 312 (Investigational New Drug Application), as may be amended from time to time, and (d) the equivalent Applicable Laws in the region in the Territory, each as may be amended and applicable from time to time and in each case, that provide for, among other things, assurance that the clinical data and reported results are credible and accurate and protect the rights, integrity, and confidentiality of trial subjects.

1.40.“GLP” means all applicable Good Laboratory Practice standards, including, as applicable, as set forth in the then current good laboratory practice standards promulgated or endorsed by the U.S. Food and Drug Administration as defined in 21 C.F.R. Part 58, or the equivalent Applicable Laws in the region in the Territory, each as may be amended and applicable from time to time.

1.41.“Governmental Authority” means any court, commission, authority, department, ministry, official or other instrumentality of, or being vested with public authority under any law of, any country, region, state or local authority or any political subdivision thereof, or any association of countries.

1.42.“GSP” means all applicable Good Supply Practice standards, including, as applicable, as set forth in the then current good supply practice standards promulgated or endorsed by the CFDA as defined in Good Supply Practice for Pharmaceutical Products or the equivalent Applicable Laws in the region in the Territory, each as may be amended and applicable from time to time.

1.43.“[* * *]” will have the meaning set forth in Section [* * *].

1.44.“Imported Product Agreement” will have the meaning set forth in Section 7.1.

1.45.“IND” means an investigational new drug application or equivalent application filed with the applicable Regulatory Authority, which application is required to commence Clinical Trials in the applicable country.

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1.46.“Indemnifying Party” will have the meaning set forth in Section 12.3.

1.47.“Indemnitee” will have the meaning set forth in Section 12.3.

1.48.“Initial Development Plan” will have the meaning set forth in Section 5.2.

1.49.“Initial Technology Transfer” will have the meaning set forth in Section 4.1.

1.50.“Invention” will mean any process, method, composition of matter, article of manufacture, discovery or finding, patentable or otherwise, that is invented as a result of a Party exercising its rights or carrying out its obligations under this Agreement, including all rights, title and interest in and to the intellectual property rights therein.

1.51.“IP Transfer Agreement” means the Intellectual Property Transfer Agreement between Paratek Pharmaceuticals, Inc. and Paratek Bermuda Ltd. dated June 6, 2016, as amended by the First Amendment dated February 27, 2017 and as may be further amended from time to time.

1.52.“Joint Development Committee” or “JDC” will have the meaning set forth in Section 3.3(b)(i).

1.53.“Joint Inventions” will have the meaning set forth in Section 13.1(b).

1.54.“Joint Patents” will have the meaning set forth in Section 13.1(b).

1.55.“Joint Steering Committee” or “JSC” will have the meaning set forth in Section 3.2(a).

1.56.“Know-How” means any proprietary scientific or technical information, results and data of any type whatsoever, in any tangible or intangible form whatsoever, including databases, safety information, practices, methods, techniques, specifications, formulations, formulae, knowledge, know-how, skill, experience, test data including pharmacological, medicinal chemistry, biological, chemical, biochemical, toxicological and clinical test data, analytical and quality control data, stability data, studies and procedures, and manufacturing process and development information, results and data.

1.57.“Licensed Product” means any pharmaceutical product containing the Compound, either alone or in combination with other active ingredients.

1.58.“Losses” will have the meaning set forth in Section 12.1.

1.59.“Manufacture” or “Manufacturing” or “Manufactured” means all operations involved in the manufacturing, filling and finishing, quality control testing (including in-process, release and stability testing, if applicable), storage, releasing and packaging.

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1.60.“Material Sublicense” means a sublicense granted, or desired to be granted, by Zai to (a) [* * *], but not [* * *], or (b) [* * *], and/or [* * *].

1.61.“Material Sublicensee” means a Third Party, or Affiliates granted, or for which Zai desires to grant, a Material Sublicense.

1.62.“Materials” means reference and starting materials including the active pharmaceutical ingredient (API) or other materials as may be defined by the Parties.

1.63.“Milestone Event” will have the meaning set forth in Section 9.3.

1.64.“Milestone Payment” will have the meaning set forth in Section 9.3.

1.65.“Net Sales” means the gross price billed or invoiced on sales of the Licensed Product by Zai, its Affiliates, or Sublicensees for sale of the Licensed Product to a Third Party in the Territory, less:

(a)freight expense (actual), including insurance, to the extent it is not charged to or reimbursed by the customer, [* * *];

(b)cash, trade or quantity discounts actually granted and deducted solely on account of sales of the Licensed Product;

(c)rebates actually paid to individual or group purchasers of the Licensed Product that are solely on account of the purchase of such Licensed Product;

(d)credits issued for the Licensed Product recalled or not accepted by customers or other refunds, allowances and chargebacks related to the Licensed Product;

(e)Taxes (including, but not limited to sales, value added, consumption and similar taxes; but excluding income taxes) actually incurred, paid or collected and remitted to the relevant tax authority for the sale of the Licensed Product; and

(f)other similar or customary deductions taken in the ordinary course of business or in accordance with GAAP;

Each of the amounts set forth above will be determined from the books and records of Zai, its Affiliate or Sublicensee, maintained in accordance with GAAP or in the case of Sublicensees, such similar accounting principles, consistently applied.

The transfer of a Licensed Product to an Affiliate, Sublicensee, or other Third Party (w) in connection with the research, development or testing of a Licensed Product (including, without limitation, the conduct of clinical studies), (x) for purposes of distribution as promotional samples, (y) for indigent or similar public support or compassionate use programs, or (z) by and between Zai and its Affiliates or Sublicensees will not, in any case, be considered a Net Sale of a Licensed Product under this Agreement.

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Net Sales will also include and be deemed to have been made with respect to any Licensed Products used by Zai or any Affiliate, for its own commercial purposes, or transferred to any Third Party for less than the transferee is then charging in normal arms-length sales transactions; and Net Sales in all such cases will be deemed to have been made at the prices therefor at which such Licensed Products are then being sold to the customers of such user or transferor (or of Zai, if an Affiliate is a user but not a seller) in arms-length sales transactions.  For clarity, in the event the Product is sold in an arms-length transaction to a governmental agency, a group purchase entity and/or any other entity having the bargaining power to negotiate the purchase price below normal retail price in transactions of lesser volume, Net Sales shall be calculated based on the actual price negotiated and agreed to for such agency and/or entity and not be based on the price charged in other arms-length sales transactions.

If Zai or any of its Affiliates, or Sublicensees, sells a Licensed Product as a Licensed Component of a Combination Product in the Territory in any Calendar Quarter, then Net Sales will be calculated by multiplying the Net Sales of the Combination Product during such Calendar Quarter by the fraction A/(A+B), where A is the average Net Sales per unit sold of the Licensed Component when sold separately in the Territory during such Calendar Year (calculated by determining the Net Sales of the Licensed Component during such Calendar Quarter in accordance with the definition of Net Sales set forth herein and dividing such Net Sales by the number of units of the Licensed Component during such Calendar Quarter) and B is the average Net Sales per unit sold of the Other Component(s) included in the Combination Product when sold separately during such Calendar Quarter (calculated by determining the Net Sales of such Other Component(s) sold during such Calendar Quarter by applying the definition of Net Sales set forth herein as if it applied to sales of such Other Component(s) and dividing such Net Sales by the number of units of such Other Component(s) sold during such Calendar Quarter).

For purposes of calculating the average Net Sales per unit sold of a Licensed Component and Other Component(s) of a Combination Product, any of the deductions described herein that apply to such Combination Product will be allocated among sales of the Licensed Component and sales of the Other Component(s) included in such Combination Product as follows: (1) deductions that are attributable solely to the Licensed Component or one of the Other Component(s) will be allocated solely to Net Sales of the Licensed Component or such Other Component, as applicable, and (2) all other deductions will be allocated among sales of the Licensed Component and sales of the Other Component(s) in proportion to Zai’s and Paratek’s mutual agreement of the fair market value of the Licensed Component and the Other Component(s).

In the event that no separate sales of the Licensed Component or any Other Component(s) included in a Combination Product are made by Zai or its Affiliates, or Sublicensees, during a Calendar Quarter in which such Combination Product is sold, the average Net Sales per unit sold in the above described equation will be replaced with Zai’s and Paratek’s mutual agreement of the fair market value of the Licensed Component and each of the Other Component(s) included in such Combination Product.

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1.66.“Paratek” will have the meaning set forth in the introduction of this Agreement.

1.67.“Paratek Indemnitee(s)” will have the meaning set forth in Section 12.1.

1.68.“Paratek Know-How” means any and all Know-How Controlled by Paratek, as of the Effective Date or during the Term, that is reasonably necessary or useful in connection with the Exploitation of the Licensed Product in the Field in the Territory.

1.69.“Paratek Patents” means Patents in the Territory Controlled by Paratek as of the Effective Date or during the Term that contain one or more claims that cover the composition of matter or formulation of, or salt of or polymorph forms of, or the method of making or method of using, a Licensed Product, including all Patents which contain a Valid Claim that the Exploitation of a Licensed Product would infringe if unlicensed.  The Paratek Patents as of the Effective Date are listed in Schedule 1.69, which shall be updated by the Parties from time to time during the Term.

1.70.“Paratek Prosecution Patents” will have the meaning set forth in Section 13.3(a).

1.71.“Paratek Technology” means the Paratek Know-How, Paratek Patents, Paratek’s interest in Joint Inventions, and Paratek’s interest in Joint Patents.

1.72.“Party” or “Parties” will have the meaning set forth in the introduction to this Agreement.

1.73.“Patent Prosecution” means the responsibility and authority for (a) preparing, filing and prosecuting applications (of all types) for any Patent, (b) managing any interference, opposition, re-issue, reexamination, invalidation proceedings, revocation, nullification, or cancellation proceeding relating to the foregoing, (c) deciding to abandon Patent(s), (d) listing in regulatory publications (as applicable), (e) patent term extension, and (f) settling any interference, opposition, revocation, nullification or cancellation proceeding.

1.74.“Patents” means all national, regional and international patents and patent applications, including divisions, continuations, continuations-in-part, additions, re-issues, renewals, extensions, substitutions, re-examinations or restorations, registrations and revalidations, and supplementary protection certificates and equivalents to any of the foregoing.

1.75.“Phase III Clinical Study” means any pivotal Clinical Trial(s), which Clinical Trial(s) is(are) designed to (a) establish that the Licensed Product is safe and efficacious for its intended use; (b) define warnings, precautions and adverse reactions that are associated with the Licensed Product in the dosage range to be prescribed; (c) be a pivotal study for submission of an Regulatory Approval Application to obtain regulatory approval for such Licensed Product in any region or regulatory jurisdiction, as defined in 21 C.F.R. § 312.21(c), as may be amended from time to time, or any analogous clinical trial described or defined in Applicable Laws.

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1.76.“PRC” means the People’s Republic of China, which for the purposes of this Agreement will exclude Hong Kong, Macau, and Taiwan.

1.77.“Prime Rate” means for any day a per annum rate of interest equal to the “prime rate,” as published in the “Money Rates” column of The Wall Street Journal, from time to time, or if for any reason such rate is no longer available, a rate equivalent to the base rate on corporate loans posted by at least 70% of the ten largest U.S. banks.

1.78.“Product Infringement” will have the meaning set forth in Section 13.5(a).

1.79.“Product Marks” will have the meaning set forth in Section 8.4.

1.80.“Product Specifications” means the acceptance criteria agreed by the Parties, including numerical limits, ranges or other criteria for the Licensed Product.

1.81.“Public Official” will have the meaning set forth in Section 11.6(d).

1.82.“Receiving Party” will have the meaning set forth in Section 10.1(a).

1.83.“Regulatory Approval” means, with respect to a Licensed Product in a region in the Territory, all approvals from the necessary Governmental Authority or Regulatory Authority to manufacture, import, market and sell such Licensed Product in such region in the Territory (excluding pricing and reimbursement approvals).

1.84.“Regulatory Approval Application” means a New Drug Approval Application or Biologics License Application (each, as defined in the U.S. Federal Food, Drug and Cosmetic Act (21 U.S.C. §301 et seq.), as amended from time to time) in the U.S., or any corresponding application for approval to market and/or sell a product in any country, region or jurisdiction in the Territory outside the U.S.

1.85.“Regulatory Authority” means any applicable Government Authority responsible for granting Regulatory Approvals for Licensed Products, including the CFDA, and any corresponding national or regional regulatory authorities.

1.86.“Regulatory Submissions” means any filing, application, or submission with any Regulatory Authority, including authorizations, approvals or clearances arising from the foregoing, including Regulatory Approvals, and all correspondence or communication with or from the relevant Regulatory Authority, as well as minutes of any material meetings, telephone conferences or discussions with the relevant Regulatory Authority, in each case, with respect to a Licensed Product.

1.87.“Remedial Action” will have the meaning set forth in Section 6.8.

1.88.“Retained Rights” will have the meaning set forth in Section 2.3.

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1.89.“ROFN Compound” will have the meaning set forth in Section 2.2.

1.90.“ROFN Negotiation Period” will have the meaning set forth in Section 2.2.

1.91.“ROFN Notice Period” will have the meaning set forth in Section 2.2.

1.92.“ROFN Trigger Notice” will have the meaning set forth in Section 2.2.

1.93.“Royalty Payment” will have the meaning set forth in Section 9.4(a).

1.94.“Royalty Term” will have the meaning set forth in Section 9.4(c).

1.95.“Safety Agreement” will have the meaning set forth in Section 6.4(a).

1.96.“Sole Inventions” will have the meaning set forth in Section 13.1(b).

1.97.“Subcommittee” will have the meaning set forth in Section 3.2(b).

1.98.“Sublicensee” means a Third Party, or Zai’s Affiliates granted a sublicense by Zai under the license granted in Section 2.1.  For the avoidance of doubt, a Material Sublicensee is a type of Sublicensee.

1.99.“Tax” or “Taxes” means any present or future taxes, levies, imposts, duties, charges, assessments or fees of any nature (including any interest thereon).  For the avoidance of doubt, Taxes includes VAT.

1.100.“Technology Transfer” will have the meaning set forth in Section 4.1.

1.101.“Technology Transfer Plan” will have the meaning set forth in Section 4.1.

1.102.“Term” will have the meaning set forth in Section 14.1.

1.103.“Territory” means the PRC, Hong Kong, Macau, and Taiwan (which for purposes of this Agreement will each be deemed a region).

1.104.“Third Party” means an entity other than (a) Zai and its Affiliates or (b) Paratek and its Affiliates.

1.105.“Tufts Agreement” means the Tufts University License Agreement executed between Paratek Pharmaceuticals, Inc. and Tufts University dated February 1, 1997, as amended from time to time.

1.106.“U.S. Dollars” or “$” means United States dollars, the lawful currency of the United States.

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1.107.“Upfront Payment” will have the meaning set forth in Section 9.2.

1.108.“Valid Claim” means (a) a claim of an issued and unexpired Patent included within the Paratek Patents with regard to the Licensed Product in the Territory that has not been permanently revoked or held unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, which decision is not appealable or is not appealed within the time allowed for appeal, and has not been abandoned, disclaimed or admitted to be invalid or unenforceable through reissue, disclaimer or otherwise or (b) a bona fide claim of a pending patent application included within the Paratek Patents in the Territory that has not been (i) cancelled, withdrawn or abandoned without being refiled in another application in the applicable jurisdiction or (ii) finally rejected by an administrative agency action from which no appeal can be taken or that has not been appealed within the time allowed for appeal.

1.109.“VAT” means value-added taxes or other similar taxes.

1.110.“Zai” will have the meaning set forth in the introduction of this Agreement.

1.111.“Zai Indemnitee(s)” will have the meaning set forth in Section 12.2.

1.112.“Zai Know-How” means any and all Know-How, to the extent controlled by Zai as of the Effective Date or during the Term, that is reasonably necessary or useful in connection with the Exploitation of a Licensed Product in the Field in the Territory.

1.113.“Zai Patent” means Patents in the Territory controlled by Zai as of the Effective Date or during the Term that contain one or more claims that cover the composition of matter or formulation of, or salt of or polymorph forms of, or the method of making or method of using, a Licensed Product.

1.114.“Zai Prosecution Patents” will have the meaning set forth in Section 13.3(b).

1.115.“Zai Technology” means Zai Know-How and Zai Patents.

ARTICLE 2
Licenses; Non-Compete

2.1.Exclusive License.  Subject to the terms and conditions of this Agreement, Paratek hereby grants to Zai, during the Term, an exclusive (subject to the Retained Rights and Section 2.5(c)), royalty-bearing license under the Paratek Technology to Exploit the Licensed Product in the Field in the Territory, including the right to grant sublicenses (subject to Section 2.4).  For the avoidance of doubt, the license granted pursuant to this Section 2.1 will extend only to the Paratek Technology Controlled by Paratek during the Term, and to the extent any Paratek Technology is no longer Controlled by Paratek, such Paratek Technology will no longer be licensed to Zai.  For clarity, Zai has the right pursuant to this Section 2.1 and subject to 

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Section 3.2(f) to Exploit the Licensed Product in the form of a Combination Product.  For further clarity, Paratek will not grant a license after the Effective Date and during the Term that will diminish the Paratek Technology Controlled by Paratek that is exclusively licensed to Zai.

2.2.Right of First Negotiation.  During the Term, if Paratek decides to seek a partner to Develop (with the right to Commercialize or the right to obtain or negotiate Commercialization rights) any derivative or modification of omadacycline (a “ROFN Compound”) in the Territory, then Paratek will provide Zai with written notice of its decision to do so (the “ROFN Trigger Notice”).  After Zai’s receipt of the ROFN Trigger Notice, Zai will have [* * *] days (the “ROFN Notice Period”) to provide written notice to Paratek of its desire to negotiate with Paratek regarding the partnership for such ROFN Compound.  If Zai provides such written notice during the ROFN Notice Period, the Parties will negotiate exclusively for a period of [* * *] days following Paratek’s receipt of such notice from Zai (the “ROFN Negotiation Period”) regarding the terms of a definitive agreement.  With respect to a ROFN Compound, if (a) Zai does not deliver written notice of its desire to negotiate with Paratek during the ROFN Notice Period or (b) the Parties are unable to reach terms of a definitive agreement during the ROFN Negotiation Period, then in either case (a) or (b), Paratek will have no further obligation to Zai with respect to such ROFN Compound in the Territory.  For the avoidance of doubt, a ROFN Compound is a derivative or modification to omadacycline itself, and not other tetracyclines or derivatives or modifications to other tetracyclines.

2.3.Paratek Retained Rights.  Notwithstanding anything to the contrary in this Agreement, Paratek hereby expressly retains, on behalf of itself (and its Affiliates, licensees, and sublicensees) the non-exclusive rights under the Paratek Technology to Manufacture the Compound and Licensed Product in the Territory in compliance with Applicable Laws and to support the Development and Commercialization of the Compound and Licensed Product outside of the Territory (the “Retained Rights”).  Zai acknowledges and agrees that the Retained Rights includes the right for Paratek to grant licenses under the Retained Rights to its Affiliates and Third Parties in the Field in the Territory, provided that Paratek shall not, and shall obligate its Affiliates, licensees, and sublicensees to not, sell or offer for sale in the Territory any Licensed Product manufactured under the Retained Rights.  In addition, Paratek shall obligate, and obligate that its Affiliates, licensees, and sublicensees obligate, any contract manufacturing organization in the Territory to comply with all Applicable Laws, including GMP, and ensure that any such contract manufacturing organization is not, and has not been, debarred or disqualified by any Regulatory Authority.  For the avoidance of doubt, the Retained Rights exclude the right under the Paratek Technology to Develop or Commercialize the Compound or Licensed Product in the Territory, and Paratek will not undertake such Development or Commercialization without Zai’s express prior written consent.  Zai hereby grants to Paratek a non-exclusive, royalty-free, fully paid-up, sublicensable license under the Zai Technology, solely to exercise the rights set forth in the Retained Rights.

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2.4.Right to Sublicense.

(a)General.  Zai will have the right to grant sublicenses under the license granted in Section 2.1 to Sublicensees, solely for such Sublicensees to perform Zai’s obligations under this Agreement; provided that if such sublicense is (i) a sublicense of [* * *] under this Agreement, [* * *] such sublicense [* * *], and (ii) a Material Sublicense, then the additional provisions of Section 2.4(b) will also apply.  Zai will be liable for Sublicensee conduct that is prohibited under this Agreement, and Sublicensee conduct that would have constituted a breach of this Agreement will be deemed a breach of this Agreement as if it had been engaged in by Zai.

(b)Material Sublicenses.  [* * *] Material Sublicenses to a Material Sublicensee [* * *].  Notwithstanding the foregoing, the Parties agree that the Material Sublicensees set forth in Schedule 2.4(b) [* * *].

(c)Restrictions.  Zai will not grant a sublicense to any Sublicensee that has been debarred or disqualified by a Regulatory Authority.  Zai will ensure that, prior to engaging any Sublicensee that such Sublicensee is subject to written agreements containing the following terms and conditions: (i) requiring each such Sublicensee to protect and keep confidential any Confidential Information of the Parties, including in accordance with ARTICLE 10; (ii) providing that Paratek will have the right to audit (either by itself or through Zai or Zai’s designee) the books and records of each such Sublicensee in accordance with this Agreement (including pursuant to Sections 8.6, 9.6(d), and 11.6(a)(iv)); (iii) that does not impose any payment obligations or liability on Paratek; and (iv) that is otherwise consistent with the terms of this Agreement.  Zai will provide a copy of the complete executed agreement with each Sublicensee to Paratek, [* * *].  Zai will remain directly responsible for all of its obligations under this Agreement that have been delegated or sublicensed to any Sublicensee.

2.5.Tufts Agreement.

(a)Zai will, and will cause its Affiliates and Sublicensees to, be bound by and comply with all obligations that the Tufts Agreement states would apply to sublicenses or sublicensees of the Tufts Agreement, [* * *].  Zai’s obligations in relation to the Tufts Agreement and the Sections of the Tufts Agreement stated above will be owed by Zai to Paratek and Tufts University and enforceable by both Paratek and Tufts University.  Zai expressly permits Paratek to disclose to Tufts University (i) complete copies of agreements Zai enters into with Sublicensees and amendments thereto and (ii) any other information under this Agreement as needed to comply with the provisions of the Tufts Agreement.

(b)During the Term, Paratek will promptly furnish Zai with a copy of (i) the Tufts Agreement (with certain terms that do not apply to Zai redacted) and any relevant ancillary agreements, exhibits, schedules, or other documents which set forth and are sufficient to fully describe all the terms and conditions with which Zai must comply in relation to the Tufts Agreement, (ii) all amendments of the Tufts Agreement, and (iii) all correspondence (or in the 

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case of oral discussions, a summary of such discussions) with or from and reports received from or provided to licensors under the Tufts Agreement to the extent material to Zai or the rights granted or to be granted to Zai under this Agreement.  In addition, during the Term, Paratek will provide copies of all notices received by Paratek relating to any alleged breach or default by Paratek under the Tufts Agreement within five Business Days after Paratek’s receipt thereof.  Paratek will be solely responsible for all payment obligations set forth in the Tufts Agreement.

(c)Zai acknowledges and agrees that (i) Tufts University has the right to convert the License (as defined in the Tufts Agreement) from an exclusive license to a non-exclusive license and (ii) if Tufts University converts the License from an exclusive license to a non-exclusive license pursuant to Article VI of the Tufts Agreement, any rights with respect to the License sublicensed by Paratek to Zai (including any such rights sublicensed under Section 2.1) will become non-exclusive.  For clarity, in such event the foregoing shall only affect Paratek Technology Controlled by Paratek pursuant to the Tufts Agreement, and the license granted by Paratek to Zai with respect to all other Paratek Technology shall in such an event remain exclusive.

2.6.No Implied Licenses; Negative Covenant.  Except as set forth herein, neither Party will acquire any license or other intellectual property interest, by implication or otherwise, under any trademarks, patents or patent applications of the other Party.  Each Party will not, and will not permit any of its Affiliates or sublicensees to, practice any Patent or Know-How licensed to it by the other Party outside the scope of the license granted to it under this Agreement.

2.7.Non-Compete.  During the Term, Zai will not, and will cause its Affiliates and Sublicensees to not, engage in (independently or for or with any Third Party) any Commercialization in the Territory of (a) [* * *] or (b) [* * *].  Notwithstanding the foregoing clause (a), if [* * *], and [* * *], then the restriction set forth in clause (a) above shall not apply with respect to [* * *].

ARTICLE 3
GOVERNANCE

3.1.Alliance Managers.  Within 30 days following the Effective Date, each Party will appoint (and notify the other Party of the identity of) a representative having the appropriate qualifications (including a general understanding of pharmaceutical Development, Manufacturing, and Commercialization issues) to act as its alliance manager under this Agreement (“Alliance Manager”).  The Alliance Managers will serve as the primary contact points between the Parties regarding the activities contemplated by this Agreement.  The Alliance Managers will facilitate the flow of information and otherwise promote communication, coordination and collaboration between the Parties, providing single point communication for seeking consensus both internally within each Party’s respective organization, including facilitating review of external corporate communications, and raising cross-Party and/or cross-functional disputes in a timely manner.  Each Party may replace its Alliance Manager by written notice to the other Party.

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3.2.Joint Steering Committee.

(a)Formation.  Within 30 days after the Effective Date, the Parties will establish a joint steering committee (the “Joint Steering Committee” or the “JSC”) to oversee the Development, Manufacture, and Commercialization of the Licensed Products in the Field in the Territory under this Agreement.  Each Party will appoint three representatives to the JSC, each of whom will be an officer or employee of the applicable Party having sufficient seniority within such Party to make decisions arising within the scope of the JSC’s responsibilities.  Each Party may replace its JSC representatives upon written notice to the other Party.  Each Party will appoint one of its JSC representatives to act as a co-chairperson of the JSC.

(b)Role.  The JSC will (i) provide a forum for the discussion of the Parties’ activities under this Agreement; (ii) review, discuss and approve the overall strategy for the Development, Manufacture, and Commercialization of the Licensed Product in the Field in the Territory; (iii) review, discuss and approve the Development Plan and amendments thereto; (iv) review and discuss the Commercialization Plan and amendments thereto; (v) review, discuss and approve the Product Specifications; (vi) review and discuss Manufacturing activities, and approve such Manufacturing activities that could affect Paratek’s global clinical and/or regulatory program outside the Territory and outside the Field; (vii) establish joint subcommittees (each, a “Subcommittee”) as necessary or advisable to further the purpose of this Agreement; and (viii) perform such other functions as expressly set forth in this Agreement or allocated to it by the Parties’ written agreement.

(c)Limitation of Authority.  The JSC will only have the powers expressly assigned to it in this ARTICLE 3 and elsewhere in this Agreement and will not have the authority to: (i) modify or amend the terms and conditions of this Agreement; (ii) waive either Party’s compliance with the terms and conditions of this Agreement; or (iii) determine any such issue in a manner that would conflict with the express terms and conditions of this Agreement.

(d)Meetings.  The JSC will hold meetings at such times as it elects to do so, but in no event will such meetings be held less frequently than once every Calendar Quarter until the earlier of (i) three years after the Effective Date, or (ii) Zai’s submission of a Regulatory Submission for Regulatory Approval for the Licensed Product in the Territory.  Thereafter, the JSC will hold meeting no less frequently than once every six months.  Each Party may call additional ad hoc JSC meetings as the needs arise with reasonable advance notice to the other Party.  Meetings of the JSC may be held in person, by audio or video teleconference; provided that at least one meeting per Calendar Year of the JSC will be held in person.  In-person JSC meetings will be held at locations selected alternately by the Parties.  The co-chairpersons of the JSC will jointly prepare the agenda and minutes for each JSC meeting.  Each Party will be responsible for all of its own expenses of participating in the JSC meetings.  No action taken at any JSC meeting will be effective unless at least one representative of each Party is participating in such JSC meeting.

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(e)Non-Member Attendance.  Each Party may from time to time invite a reasonable number of participants, in addition to its representatives, to attend the JSC meetings in a non‐voting capacity; provided that if either Party intends to have any Third Party (including any consultant) attend such a meeting, such Party will provide prior written notice to the other Party.  Such Party will also ensure that such Third Party is bound by confidentiality and non-use obligations consistent with the terms of this Agreement.

(f)Decision-Making.  All decisions of the JSC will be made by unanimous vote, with each Party’s representatives having one vote.  If after reasonable discussion and good faith consideration of each Party’s view on a particular matter before the JSC, the JSC cannot reach a decision as to such matter within 30 days after such matter was brought to the JSC for resolution, such matter will be referred to the President of Paratek and the Chief Executive Officer of Zai (the “Executive Officers”) for resolution.  If the Executive Officers cannot resolve such matter within 10 Business Days after such matter has been referred to them, then the Parties will be deemed to be deadlocked and [* * *] final decision making authority over [* * *]; provided that [* * *] final decision making authority over [* * *]; provided further that [* * *] such final decision making authority in a manner that [* * *].  If [* * *] that [* * *] did not have a good faith basis to conclude that such matter [* * *], then [* * *] may submit the matter to arbitration pursuant to Section 15.4; provided that the expedited procedure rules of the [* * *] will apply.  For clarity, [* * *] would have the right to [* * *] with respect to the [* * *].

(g)Exchange of Information.  The Parties will cooperate to exchange information with respect to Development activities conducted by Paratek outside the Territory that could affect Zai’s activities in the Territory, and Development activities conducted by Zai that could affect Paratek’s global clinical and regulatory program outside the Territory and outside the Field (such as new indications, dosing, and formulations).

3.3.Subcommittees.

(a)General.  Pursuant to Section 3.2(b), the JSC will have the authority to establish Subcommittees.  Each Subcommittee (including the Joint Development Committee) will be composed of an equal number of representatives from each Party.  Each Party may replace its Subcommittee representatives upon written notice to the other Party.  All decisions of a Subcommittee will be made by unanimous vote, with each Party’s representatives having one vote.  In the event the Parties are unable to reach a unanimous vote with respect to a matter, such matter will be referred to the JSC for resolution.

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(b)Joint Development Committee.

(i)General.  Within 30 days of the Effective Date, the Parties will establish a joint development committee (the “Joint Development Committee” or the “JDC”) to oversee (1) the day-to-day Development of the Licensed Product and the execution of the Development Plans, and (2) the progress of the Regulatory Approvals and Regulatory Submissions for the Licensed Product.  Each Party will appoint three representatives to the JDC, each of whom will be an officer or employee of the applicable Party having sufficient knowledge regarding Development and Commercialization of the Licensed Product.

(ii)Meetings.  While the Parties are developing and conducting Clinical Trials for Licensed Product in the Territory, the JDC will meet at least once per Calendar Quarter.  The Parties will endeavor to schedule meetings of the JDC at least two months in advance.

ARTICLE 4
Technology Transfers

4.1.Technology Transfer.  Within 30 days of the Effective Date, the Parties will coordinate and agree to a technology transfer plan for Paratek to provide and transfer to Zai the Paratek Know-How that exists on the Effective Date and was not previously provided to Zai, and a timeline for such technology transfer, which may be updated or amended by the JSC from time to time as needed (such schedule and timeline, the “Technology Transfer Plan”).  Paratek will transfer the Paratek Know-How to Zai in accordance with the Technology Transfer Plan, and Zai will cooperate to facilitate the receipt of such transfer of Paratek Know-How (the “Initial Technology Transfer”).  Thereafter, upon Zai’s reasonable request, Paratek will provide Zai with reasonable assistance in the Development and Manufacture of the Licensed Products in the Field in the Territory (the “Continuing Technology Transfer,” and together with the Initial Technology Transfer, the “Technology Transfer”).  The Continuing Technology Transfer will include the transfer of additional Paratek Know-How to Zai and reasonable access to Paratek personnel involved in the research and Development of the Compound and Licensed Products, either in-person at Paratek’s facility or by teleconference, but will not include an obligation for Paratek personnel to travel.

4.2.Transfer of Materials.  Paratek will provide a one-time transfer of reasonable quantities of Materials for Zai to conduct its Development activities under this Agreement; provided that the Parties discuss in good faith and enter into a separate materials transfer agreement containing reasonable and customary terms for such transfer of Materials. Zai will [* * *] provide assistance to Zai for the transfer of Materials pursuant this Section 4.2.

4.3.Technology Transfer Costs.  [* * *]

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ARTICLE 5
Development Program

5.1.Diligence and Responsibilities.

(a)Zai will be responsible for, and use Commercially Reasonable Efforts to Develop the Licensed Product in the Field in the Territory in accordance with the Development Plan, at its sole cost and expense.

(b)Zai will use Commercially Reasonable Efforts to conduct its tasks pursuant to the Development Plan and to attempt to achieve the objectives of the Development Plan.  Zai will perform such obligations under the Development Plan in a professional manner, and in compliance in all material respects with the Development Plan and the requirements of Applicable Law, GCP and cGMP.  Changes in the scope or direction of the Development work under this Agreement that would require a material deviation from the Development Plan must be approved by the JSC as set forth in Section 3.2(b).

5.2.Development Plan.  The Parties will undertake the Development of the Licensed Product in a collaborative and efficient manner in accordance with this ARTICLE 5.  The Development of the Licensed Product in the Territory under this Agreement will be governed by a written development plan (the “Development Plan”), as such Development Plan may be revised from time to time in accordance with this Section 5.2.  The Development Plan will contain in reasonable detail the major Development activities and the timelines for achieving such activities.  As of the Effective Date, the Parties have agreed to the initial Development Plan, which is attached hereto as Schedule 5.2 (the “Initial Development Plan”).  From time to time, but at least every 12 months, Zai will propose updates or amendments, if any, to the Development Plan in consultation with Paratek and submit such proposed updated or amended plan to the JSC for review, discussion, and approval.  In accordance with Section 3.2(b), the JSC will review and approve any updates or amendments to the Development Plan.

5.3.Activity Target.  Prior to [* * *], Zai will file an IND with the CFDA for the Licensed Product (the “Activity Target,” and the date, the “Activity Target Deadline”); provided that (a) if Zai is unable to achieve the Activity Target by the Activity Target Deadline and demonstrates to Paratek that Zai utilized Commercially Reasonable Efforts in Zai’s attempt to satisfy the obligations of this Section 5.3, or (b) if Zai is unable to achieve the Activity Target by the Activity Target Deadline as a direct result of Paratek [* * *], the Activity Target Deadline will be extended [* * *].  For the avoidance of doubt, with respect to subsection (a) the Activity Target Deadline is [* * *], and with respect to subsection (b), the Activity Target Deadline is [* * *].  [* * *]

5.4.Development Reports.  The status, progress and results of Zai’s Development activities under this Agreement will be discussed at meetings of the JSC.  At least five Business Days before each regularly scheduled JSC meeting, Zai will provide the JSC with a written 

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report detailing its Development activities and the results thereof, covering subject matter at a level of detail reasonably required by Paratek and sufficient to enable Paratek to determine Zai’s compliance with its diligence obligations pursuant to Section 5.1.  In addition, Zai will make available to Paratek such additional information about its Development activities as may be reasonably requested by Paratek from time to time.  All updates and reports generated pursuant to this Section 5.4 shall be the Confidential Information of Zai.

5.5.Records.  Zai will maintain appropriate records in either tangible or electronic form of (a) all significant Development, Manufacturing, and Commercialization events and activities conducted by it or on its behalf related to a Licensed Product; and (b) all significant information generated by it or on its behalf in connection with Development, Manufacturing, or Commercialization of a Licensed Product under this Agreement, in each case in accordance with Zai’s usual documentation and cGMP record retention practices.  Such records will be in sufficient detail to properly reflect, in a good scientific manner, all significant work done and the results of studies and trials undertaken and, further, will be at a level of detail appropriate for patent and regulatory purposes.  Zai will document all non-clinical studies and Clinical Trials in formal written study reports according to Applicable Laws and national and international guidelines.  Upon Paratek’s request, Zai will, and will cause its Affiliates and Sublicensees, to provide to Paratek copies of such records (including access to relevant databases, if any) of Development, Manufacturing, and Commercialization activities to the extent necessary or useful for the Development, Manufacturing, and Commercialization of the Compound or Licensed Product outside the Territory, including for regulatory and patent purposes.  All such records, reports, information and data provided will be subject to the confidentiality provisions of ARTICLE 10.

ARTICLE 6
Regulatory

6.1.Zai’s Responsibilities.  Zai will be responsible for all regulatory activities leading up to and including the obtaining of the Regulatory Approvals for a Licensed Product from the Regulatory Authority on a region-by-region basis, at its sole cost and expense.  Zai or its designee will own and hold all Regulatory Approvals for a Licensed Product in the Territory.  Zai will keep Paratek informed of regulatory developments related to the Licensed Products in the Territory and will promptly notify Paratek in writing of any decision by any Regulatory Authority in the Territory regarding the Licensed Product.  Zai will notify Paratek of any Regulatory Submissions submitted to or received from any Regulatory Authority in the Territory and will provide Paratek with copies thereof within five days after submission or receipt.  If any material Regulatory Submission is not in the English language, Zai will also provide Paratek with a summary thereof in English as soon as practicable.

6.2.Paratek’s Responsibilities.  [* * *]  Paratek will reasonably cooperate with Zai in obtaining any Regulatory Approvals for a Licensed Product in the Territory by providing, to the extent reasonably required by and reasonably useful to Zai, access to regulatory approvals, 

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Regulatory Submissions, clinical data, and other data, information, and documentation for the Licensed Product outside of the Territory.  In addition, upon Zai’s reasonable request, Paratek will, and will cause its Affiliates and sublicensees (to the extent permitted in such sublicensees’ agreement with Paratek), to provide to Zai copies of such records of Development, Manufacturing, and Commercialization activities to the extent necessary or reasonably useful to obtain Regulatory Approval of the Licensed Product in the Territory.  [* * *] provide assistance to Zai for such cooperation.

6.3.Right of Reference.  Each Party hereby grants to the other Party the right of reference to all Regulatory Submissions pertaining to the Licensed Product in the Field submitted by or on behalf of such Party.  Zai may use such right of reference to Paratek’s Regulatory Submissions in the Field solely for the purpose of seeking, obtaining and maintaining Regulatory Approval of the Licensed Products in Field in the Territory.  Paratek may use the right of reference to Zai’s Regulatory Submissions in the Field solely for the purpose of seeking, obtaining and maintaining regulatory approval of the Licensed Products outside the Territory.

6.4.Adverse Events Reporting.

(a)Promptly following the Effective Date, but in no event later than 60 days thereafter, Zai and Paratek will develop and agree to the worldwide safety and pharmacovigilance procedures for the Parties with respect to the Licensed Products, such as safety data sharing and exchange, Adverse Events reporting and prescription events monitoring in a written agreement (the “Safety Agreement”).  Such agreement will describe the coordination of collection, investigation, reporting, and exchange of information concerning Adverse Events or any other safety problem of any significance, and product quality and product complaints involving Adverse Events, sufficient to permit each Party, its Affiliates, licensees or sublicensees to comply with its legal obligations.  The Safety Agreement will be promptly updated if required by changes in legal requirements.  Each Party hereby agrees to comply with its respective obligations under the Safety Agreement and to cause its Affiliates, licensees and sublicensees to comply with such obligations.  To the extent there is any disagreement between this Section 6.4, Section 6.5, or any related definitions and the Safety Agreement, the Safety Agreement shall control with respect to safety matters and this Agreement shall control with respect to all other matters.

(b)Zai will maintain an Adverse Event database for the Licensed Products in the Territory, at its sole cost and expense, and will be responsible for reporting quality complaints, Adverse Events and safety data related to the Licensed Products to the applicable Regulatory Authorities in the Territory, as well as responding to safety issues and to all requests of Regulatory Authorities related to the Licensed Products in the Territory.  Zai will provide to Paratek access to, and the information contained in, Zai’s Adverse Event database for the Territory, and Paratek will maintain a global Adverse Event database at its sole cost and expense.

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(c)Zai will be responsible for complying with all Applicable Law governing Adverse Events in the Territory that occur after the Effective Date.  Zai will notify Paratek on a timely basis of any Adverse Events occurring at or reported by any Clinical Trial location at which Zai is responsible for performing Clinical Trials.  Zai will submit copies of reports of Adverse Events to Paratek simultaneously with submission to the applicable Regulatory Authorities.  Each Party will notify the other in a timely manner and in any event within 24 hours of receiving any serious Adverse Event reports from Clinical Trials that each Party is monitoring, notice from a Regulatory Authority, independent review committee, data safety monitoring board or another similar clinical trial or post-marketing monitoring body alleging significant concern regarding a patient safety issue or other material information relevant to the safety or efficacy of Licensed Product.

6.5.Safety and Regulatory Audits.  Upon reasonable notification, and no more frequently than [* * *] (provided that the foregoing frequency limit shall not apply if Paratek has cause), Paratek will be entitled to conduct an audit of safety and regulatory systems, procedures and practices of Zai, including on-site evaluations to the extent permitting such on-site evaluations is in the control of Zai.  Further details including notification, timing, response and scope of such audits will be included in the Safety Agreement.

6.6.No Harmful Actions.  If Paratek believes that Zai is taking or intends to take any action with respect to the Licensed Product that could have a material adverse impact upon the regulatory status of the Licensed Product outside the Territory, Paratek will have the right to bring the matter to the attention of the JSC and the Parties will discuss in good faith to resolve such concern.  Without limiting the foregoing, unless the Parties otherwise agree: (a) Zai will not communicate with any Regulatory Authority having jurisdiction outside the Territory, unless so ordered by such Regulatory Authority, in which case Zai will immediately notify Paratek of such order; and (b) Zai will not submit any Regulatory Submissions or seek regulatory approvals for the Licensed Product outside the Territory.  To the extent practicable, Paratek will provide Zai with any information that reasonably could affect the Development or Commercialization of the Licensed Product in the Territory, prior to making such information public.

6.7.Notification of Threatened Action.  Each Party will immediately notify the other Party of any information it receives regarding any threatened or pending action, inspection or communication by any Regulatory Authority, which may affect the safety or efficacy claims of any Licensed Product or the continued marketing of any Licensed Product.  Upon receipt of such information, the Parties will consult with each other in an effort to arrive at a mutually acceptable procedure for taking appropriate action.

6.8.Remedial Actions.  Each Party will notify the other immediately, and promptly confirm such notice in writing, if it obtains information indicating that any Licensed Product may be subject to any recall, corrective action or other regulatory action by any Governmental Authority or Regulatory Authority (a “Remedial Action”).  The Parties will assist each other in gathering and evaluating such information as is necessary to determine the necessity of 

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conducting a Remedial Action.  Zai will have sole discretion with respect to any matters relating to any Remedial Action in the Territory, including the decision to commence such Remedial Action and the control over such Remedial Action.  The cost and expenses of any Remedial Action in the Territory will be borne solely by Zai.  Zai will, and will ensure that its Affiliates and Sublicensees will, maintain adequate records to permit the Parties to trace the manufacture, distribution and use of the Licensed Product in the Territory.

ARTICLE 7
MANUFACTURING

7.1.Manufacture and Supply.  Zai will be responsible for, and use Commercially Reasonable Efforts to Manufacture, or have Manufactured (pursuant to Section 2.4), Licensed Products, sufficient and solely to meet the Development and Commercialization requirements of a Licensed Product in the Territory, at its sole cost and expense.  Zai will undertake such Manufacturing activities of the Licensed Products in accordance with the Product Specifications.  If [* * *], Paratek will permit Paratek’s suppliers to provide such supply to Zai and shall reasonably assist Zai to obtain a supply of Licensed Products for the Development and Commercialization activities contemplated hereunder by introducing Zai to suppliers that Paratek utilizes at that time.  Zai will ensure that any arrangement between Zai and such suppliers (a) will not alter or affect Paratek’s supply related to the Licensed Product, and (b) Paratek will not have any liability or obligation related to such arrangements.  If Zai is required by the CFDA to Commercialize the Licensed Product as an imported product, the Parties will negotiate in good faith the terms of an agreement to address this event (an “Imported Product Agreement”), and such agreement will include, but not be limited to, provisions whereby Zai will indemnify Paratek for any liability (including product liability) related to Paratek’s involvement in the Development, Manufacture or Commercialization of the Licensed Product as an imported product, and Zai will maintain appropriate minimum liability insurance (to be determined in the Imported Product Agreement) levels.  For the avoidance of doubt, (y) Paratek will be adequately protected from any liability based on Zai’s activities in the Territory including Zai’s sourcing of the Compound or Licensed Product, and (z) absent the Parties agreement to terms pursuant to an Imported Product Agreement, Paratek will not have any obligation to (i) accommodate the supply (directly or indirectly) of the Compound or Licensed Product to Zai, or (ii) be an applicant on a regulatory application or holder of a regulatory approval related to Zai’s Exploitation of the Licensed Product as an imported product.

7.2.Transfer of Manufacturing Know-How.  As part of the Initial Technology Transfer, in accordance with the Technology Transfer Plan, Paratek will make available to Zai the Paratek Know-How that constitutes the then-current process used by Paratek or its Third Party manufacturer in the manufacture of Licensed Products.  In addition, as per the Continuing Technology Transfer, Paratek will provide reasonable technical assistance regarding such manufacturing related Paratek Know-How as requested by Zai in accordance with Section 4.1.  Zai will be responsible for the costs and expenses incurred by Paratek in performing such part of 

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the Technology Transfer in accordance with Section 4.3.  After the completion of such part of the Initial Technology Transfer, each Party will promptly notify the other Party of any changes in its manufacturing process for the Licensed Products and upon such other Party’s request, will provide reasonable assistance to enable such other Party to implement such changes, with each Party bearing its own costs.

7.3.Agreement with Contract Manufacturer.  To the extent that Zai enters into an agreement with any contract manufacturing organization to manufacture Licensed Product for and on behalf of Zai, such agreement shall set forth the respective responsibilities of the parties with regards to quality assurance for the Licensed Product, and Zai shall obligate such contract manufacturing organization in the Territory to comply with all Applicable Laws, including GMP, and ensure that any such contract manufacturing organization is not, and has not been, debarred or disqualified by any Regulatory Authority.

ARTICLE 8
Commercialization

8.1.Commercialization Diligence.  Zai will be responsible for, and use Commercially Reasonable Efforts to Commercialize the Licensed Products in the Field in the Territory in accordance with the Commercialization Plan, at its sole cost and expense.  Upon Zai’s reasonable request, Paratek will reasonably assist Zai in such Commercialization of the Licensed Product.

8.2.Commercialization Plan.  The Commercialization Plan will contain in reasonable detail the major Commercialization activities and the timelines for achieving such activities.  Zai will deliver an initial Commercialization Plan to the JSC for review and discussion no later than 12 months prior to the anticipated date of the first filing of the first Regulatory Approval for a Licensed Product in the Territory.  Thereafter, from time to time, but at least every 12 months, Zai will propose updates or amendments to the Commercialization Plan in consultation with Paratek to reflect changes in such plans, including those in response to changes in the marketplace, relative success of the Licensed Product, and other relevant factors influencing such plan and activities, and submit such proposed updated or amended plan to the JSC for review, discussion, and approval.  In accordance with Section 3.2(b), the JSC will review and discuss any updates or amendments to the Commercialization Plan.

8.3.Commercialization Reports.  Zai will update the JSC at each regularly scheduled JSC meeting regarding Zai’s Commercialization activities with respect to the Licensed Products in the Territory.  Each such update will be in a form to be agreed by the JSC and will summarize Zai’s, its Affiliates’ and Sublicensees’ significant Commercialization activities with respect to the Licensed Products in the Territory, covering subject matter at a level of detail reasonably required by Paratek and sufficient to enable Paratek to determine Zai’s compliance with its diligence obligations pursuant to Section 8.1.  In addition, Zai will make available to Paratek such additional information about its Commercialization activities as may be reasonably 

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requested by Paratek from time to time.  For clarity, Zai will not be required to include information in its updates and reports under this Section 8.3 that it does not otherwise create for its own internal purposes.  All updates and reports generated pursuant to this Section 8.3 shall be the Confidential Information of Zai.

8.4.Product Trademarks.  Zai will have the right to brand the Licensed Products in the Territory using trademarks, logos, and trade names it determines appropriate for the Licensed Products, which may vary by region or within a region (the “Product Marks”).  Zai will own all rights in the Product Marks in the Territory and will register and maintain the Product Marks in the Territory that it determines reasonably necessary, at Zai’s cost and expense.  Upon Zai’s request, Paratek will reasonably assist Zai in the selection and design of the Product Marks.  Zai will also have the right (pursuant to this Section 8.4) to use certain trademarks in the Territory as set forth in Schedule 8.4 (the “Paratek Product Marks”).  If Zai elects to use the Paratek Product Marks in connection with the Commercialization of the Licensed Products in the Territory, Paratek will and hereby does grant to Zai, during the Term and subject to the terms and conditions of this Agreement, a royalty-free, exclusive license under Paratek’s rights to use such Paratek Product Marks in connection with the Commercialization of the Licensed Products in the Field in the Territory in compliance with Applicable Laws.  Zai will comply with Paratek’s brand usage guidelines provided to Zai in its use of the Paratek Product Marks.  For the avoidance of doubt, Paratek (a) has sole discretion regarding prosecution and maintenance of the Paratek Product Marks, provided that, after Zai has initiated launch efforts to Commercialize the Product under any particular Paratek Product Mark, Paratek shall notify Zai in writing of any decision to modify and/or discontinue the application or registration of such Paratek Product Mark in the Territory, and shall not carry out such modification or discontinuation without Zai’s prior written consent (not to be unreasonably withheld), further provided that Paratek shall not be required to obtain Zai’s consent if such modification and/or discontinuation is required by the applicable Regulatory Authority in the Territory or is necessary to avoid any potential infringement of the rights of any Third Party, and (b) has no obligation to ensure that, and provides no guarantee that, any applications included in the Paratek Products Marks issues to a registered trademark in the Territory.

8.5.Commercialization Assistance.  Zai will reimburse Paratek’s actual internal expenses and costs at the FTE Rate for FTEs engaged to, and out-of-pocket expenses and costs incurred by Paratek to, provide assistance to Zai Commercialization activities, including assistance pursuant to Sections 8.1 and 8.4.

8.6.Compliance.  Zai will (a) comply, and will cause its Affiliates and Sublicensees to comply, with all Applicable Laws and all applicable cGMP, GCP, GLP and GSP (or similar standards) in their conduct of the Development, Manufacturing, and Commercialization activities under this Agreement and (b) ensure that its Affiliates and Sublicensees do not transfer or divert the Compound or Licensed Product to an entity other than Zai, or an entity approved by Zai, in each case in a manner that would cause the sale of such Compound or Licensed Product in the 

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chain of distribution (from Zai or its Affiliates or Sublicensees to the end user) to be excluded (except as an exception provided in the Net Sales definition) in the calculation of Net Sales, provided that for each unit of the Compound and/or Licensed Product, the inclusion of such sales in the calculation of Net Sales shall occur only once.  Upon reasonable notification, but no more than [* * *] (provided that the foregoing frequency limit shall not apply if Paratek has cause), Paratek will have the right to conduct audits of Zai, and Zai will procure such right for Paratek to audit Zai’s Affiliates and Sublicensees (either directly or through Zai and its designee), to ensure (y) compliance with applicable cGMP, GCP, GLP, and GSP standards, including on-site evaluations (to the extent permitting such evaluations is under the control of the audited Party), and (z) compliance with Section 8.6(b).

ARTICLE 9
Payments and Milestones

9.1.Tufts Agreement and IP Transfer Agreement Payments.  

(a)Paratek will be responsible, at its costs, for all payments, royalties or milestones under the Tufts Agreement.  

(b)Paratek will be responsible, at its costs, for all payments under the IP Transfer Agreement.

9.2.Upfront Payment.  In partial consideration of the rights granted by Paratek to Zai hereunder, Zai will pay to Paratek US$7,500,000 (the “Upfront Payment”) within [* * *] days of the Effective Date.

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9.3.Milestones Payments to Paratek.

(a)In partial consideration of the rights granted herein, Zai will pay to Paratek the following milestone payments (each such payment, a “Milestone Payment”) within [* * *] days of the achievement of the corresponding milestone events set forth below (each such event, a “Milestone Event”), or in the case of Net Sales Milestone Events, within [* * *] days after the end of the Calendar Quarter in which the Net Sales Milestone Event occurs.

		
	
Milestone Event
	
Milestone Payment

	
First regulatory approval for a Licensed Product in the U.S. for the CABP indication
	
US$5,000,000

	
[* * *]
	
US$[* * *]

	
[* * *]
	
US$[* * *]

	
First time that Net Sales of Licensed Products in a Calendar Year exceeds US$[* * *]
	
US$[* * *]

	
First time that Net Sales of Licensed Products in a Calendar Year exceeds US$[* * *]
	
US$[* * *]

	
First time that Net Sales of Licensed Products in a Calendar Year exceeds US$[* * *]
	
US$[* * *]

 

(b)For the avoidance of doubt (i) each Milestone Payment will be payable on the first occurrence of the corresponding Milestone Event, and (ii) none of the Milestone Payments will be payable more than once.

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9.4.Royalties.

(a)Royalty Payment.  During the Royalty Term, Zai will pay to Paratek tiered royalties based on annual Net Sales of Licensed Product in the Territory in a Calendar Year (a “Royalty Payment”).  The royalty rates will be as set forth below (subject to Section 9.4(d)):

		
	
Tier
	
Royalty %

	
≥ US$[* * *] and ≤ US$[* * *]
	
[* * *]%

	
> US$[* * *] and ≤ US$[* * *]
	
[* * *]%

	
> US$[* * *] and ≤ US$[* * *]
	
[* * *]%

	
> US$[* * *]
	
[* * *]%

 

(b)Example.  By way of example, if the Net Sales in a Calendar Year of Licensed Product within the Territory equals $[* * *], the royalty amount owed by Zai to Paratek would be US$[* * *].

(c)Royalty Term.  The Royalty Payments payable under this Section 9.4 will be payable on a region-by-region basis from the First Commercial Sale of the Licensed Product in such region until the later of: (i) the abandonment, expiry or final determination of invalidity of the last Valid Claim within the Paratek Patents that covers the Exploitation of the Licensed Products in the region in the Territory in the manner that Zai or its Affiliates or Sublicensees Exploit the Licensed Product or intend for the Licensed Product to be Exploited; or (ii) the close of business of the day that is exactly 11 years after the date of the First Commercial Sale of such Licensed Product in such region (the “Royalty Term”).

(d)Royalty Rate Reduction for Generic Product Market Effect.  If there is no longer a Valid Claim within the Paratek Patents covering a Licensed Product in a region in the Territory, then Zai may reduce the Royalty Payments for Net Sales in such region by (i) [* * *]% in any Calendar Quarter that Zai can demonstrate that one or more generic equivalent products are on the market in such region and sales of such generic equivalent product(s) in the region constitute [* * *]% or more of the total sales of such generic equivalent product(s) and Licensed Product in such region or (ii) [* * *]% in any Calendar Quarter that Zai can demonstrate that one or more generic equivalent products are on the market in such region and sales of such generic equivalent product(s) in the region constitute [* * *]% or more of the total sales of such generic equivalent product(s) and Licensed Product in such region.

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(e)Royalty Estimates and Royalty Reports.  Following the First Commercial Sale of any Licensed Product for which royalties are due pursuant to this Section 9.4, and continuing for so long as royalties are due hereunder: 

(i)Zai will, within [* * *] days after the end of each Calendar Quarter, provide Paratek a good faith estimate of the royalties due for such Calendar Quarter; and 

(ii)Zai will, within [* * *] days after the end of each Calendar Quarter, provide a royalty report showing, on a region-by-region basis:

(1)the Net Sales of each Licensed Product sold by Zai, its Affiliates and Sublicensees during such Calendar Quarter reporting period;

(2)the Royalty Payments in United States dollars which will have accrued hereunder with respect to such Net Sales, with supporting calculations showing the applicable royalty rate applied;

(3)the rate of exchange with supporting calculations, determined in accordance with Section 9.5(b), used by Zai in determining the amount of United States dollars payable hereunder.

(f)Royalty Payment. Zai will pay to Paratek the royalties for each Calendar Quarter within [* * *] days after the end of such Calendar Quarter.  If no royalty is due for any Calendar Quarter following commencement of the reporting obligation, Zai will so report.

9.5.Payment.

(a)Mode of Payment.  All payments to be made under this Agreement will be made in U.S. Dollars and will be paid by electronic transfer in immediately available funds to such bank account in the United States as is designated in writing by a Party.  All payments will be free and clear of any transfer fees or charges.

(b)Currency Exchange Rate.  All payments under this Agreement will be payable in U.S. Dollars.  All expense amounts will be calculated in the foreign currency for the country or region in which expenses are incurred, and will then be converted into U.S. Dollars by applying the rate of exchange used by a Party for its own financial reporting purposes in connection with its other products or accounts, consistently applied, which will be consistent with US GAAP. The rate of exchange to be used in computing the amount of currency equivalent in U.S. Dollars for calculating Net Sales in a Calendar Quarter (for purposes of both the royalty calculation and whether a Net Sales milestone has been achieved) shall be made at the exchange rate as published by the Wall Street Journal on the last Business Day of such Calendar Quarter, or such other source as the Parties may agree in writing.

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9.6.Audits.

(a)Zai will keep, and will require its Affiliates and Sublicensees to keep (all in accordance with US GAAP, consistently applied), for a period not less than [* * *] complete and accurate records in sufficient detail to properly reflect Net Sales and to enable any Milestone Payment payable hereunder to be determined.

(b)Upon the written request of Paratek, Zai will permit, and will cause its Affiliates and Sublicensees to permit, an independent certified public accounting firm of nationally recognized standing selected by Paratek and reasonably acceptable to Zai, at Paratek’s expense, to have access during normal business hours to such records of Zai and/or its Affiliates as may be reasonably necessary to verify the accuracy of the payments hereunder for any Calendar Year ending not more than [* * *] prior to the date of such request.  These rights with respect to any Calendar Year will terminate [* * *] after the end of any such Calendar Year and shall be limited to (i) [* * *] and (ii) [* * *] with respect to records covering any specific period of time (provided that the foregoing frequency limits ((i) and (ii)) shall not apply if Paratek has cause).  Paratek will provide Zai with a copy of the accounting firm’s written report within [* * *] days of completion of such report.  If such accounting firm correctly concludes that an underpayment was made, then Zai will pay the amount due within [* * *] days of the date Paratek delivers to Zai such accounting firm’s written report so correctly concluding.  Paratek will bear the full cost of such audit unless such audit correctly discloses that the additional payment payable by Zai for the audited period is more than [* * *]% of the amount otherwise paid for that audited period, in which case Zai will pay the reasonable fees and expenses charged by the accounting firm.

(c)Paratek will treat all financial information, subject to review under this Section 9.6 in accordance with the confidentiality provisions of ARTICLE 10, and, prior to commencing such audit, will cause its accounting firm to enter into a confidentiality agreement with Zai obligating it to treat all such financial information in confidence pursuant to such confidentiality provisions.  Such accounting firm shall not disclose Zai’s Confidential Information to Paratek, except to the extent such disclosure is necessary to verify the accuracy of the financial reports furnished by Zai or the amount of payments to or by Zai under this Agreement.

(d)Zai will include in each relevant sublicense granted by it a provision requiring any Sublicensee to maintain records of sales of Licensed Products made pursuant to such sublicense, and to grant access to such records by an accounting firm to the same extent and under the same obligations as required of Zai under this Agreement.  Paratek will advise Zai in advance of each audit of any such Sublicensee with respect to Licensed Product sales either by Paratek or its designated auditor under the terms of such Sublicensee agreement.  Paratek will provide Zai with a summary of the results received from the audit and, if Zai so requests, a copy of the audit report.  Paratek will pay the full costs charged by the accounting firm, unless the audit discloses that the additional payments payable to Paratek for the audited period is more than [* * *]% from the amounts otherwise paid for that audited period, in which case Zai will pay the reasonable fees and expenses charged by the accounting firm.

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9.7.Interest.  Each Party will pay interest on any amounts overdue under this Agreement at a per annum rate of [* * *] point above the Prime Rate assessed from the day payment was initially due; provided, however, that in no case will such interest rate exceed the highest rate permitted by Applicable Law.  The payment of such interest will not foreclose a Party from exercising any other rights it may have because any payment is overdue.

9.8.Taxes.

(a)[* * *] any VAT required to be deducted or withheld by Zai under Applicable Law on payments payable by Zai under this Agreement, and will [* * *] the deduction or withholding for VAT.  If Zai is required to deduct or withhold Taxes (including VAT) on any payments payable by Zai under this Agreement, Zai will (i) pay such Tax on behalf of Paratek to the appropriate Governmental Authority, (ii) furnish Paratek with proof of payment of such Tax, and (iii) [* * *] required to be deducted or withheld [* * *] as set forth in the Agreement.  For example, if Paratek is due US[* * *] under this Agreement, and Zai is required by Applicable Law to withhold [* * *], [* * *] and [* * *].

(b)Zai and Paratek will cooperate with respect to all documentation required by any taxing authority or reasonably requested by Zai to secure a reduction in the rate of applicable Taxes.

ARTICLE 10
Confidentiality; Publication

10.1.Nondisclosure Obligation.

(a)For the Term of this Agreement and [* * *] thereafter, the Party receiving the Confidential Information of the other Party (such receiving Party, the “Receiving Party”) will keep confidential and not publish, make available or otherwise disclose any Confidential Information to any Third Party, without the express prior written consent of the Party that disclosed such Confidential Information (the “Disclosing Party”); provided however, the Receiving Party may disclose the Confidential Information to those of its Affiliates, officers, directors, employees, agents, consultants and/or independent contractors (including sublicensees) of such Receiving Party who need to know the Confidential Information in connection with this Agreement and are bound by confidentiality obligations with respect to such Confidential Information.  The Receiving Party will exercise at a minimum the same degree of care it would exercise to protect its own confidential information (and in no event less than a reasonable standard of care) to keep confidential the Confidential Information.  The Receiving Party will use the Confidential Information solely in connection with the purposes of this Agreement.

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(b)It will not be considered a breach of this Agreement if the Receiving Party discloses Confidential Information in order to comply with a lawfully issued court or governmental order or with a requirement of Applicable Law or the rules of any internationally recognized stock exchange; provided that: (i) the Receiving Party gives prompt written notice of such disclosure requirement to the Disclosing Party and cooperates with the Disclosing Party’s efforts to oppose such disclosure or obtain a protective order for such Confidential Information, and (ii) if such disclosure requirement is not quashed or a protective order is not obtained, the Receiving Party will only disclose those portions of the Confidential Information that it is legally required to disclose and will make a reasonable effort to obtain confidential treatment for the disclosed Confidential Information.  To the extent there is any conflict between this ARTICLE 10 and any other agreement related to Confidential Information entered into between the Parties, the terms of this ARTICLE 10 will control to the extent of such conflict.

10.2.Scientific Publication.  The JDC will discuss the publication strategy for the publication of scientific papers, abstracts, meeting presentations and other disclosure of the results of the studies carried out under this Agreement, taking into consideration the Parties’ interest in publishing the results of the Development work in order to obtain recognition within the scientific community and to advance the state of scientific knowledge, and the need to protect Confidential Information, intellectual property rights and other business interests of the Parties.  Zai will provide Paratek with the opportunity to review and comment on any proposed publication that pertains to the Compound or Licensed Products at least [* * *] days prior to its intended submission for publication.  Paratek will provide Zai with its comments, if any, within [* * *] days after the receipt of such proposed publication.  Zai will consider in good faith the comments provided by Paratek and will comply with Paratek’s request to: (a) remove any and all Confidential Information of Paratek from such proposed publication; and (b) delay the submission for a period up to [* * *] days as may be reasonably necessary to seek patent protection for the information disclosed in the proposed publication.  Zai agrees to acknowledge the contribution of Paratek and Paratek’s employees in all publication as scientifically appropriate.

10.3.Publicity; Use of Names.

(a)Each of the Parties agrees not to disclose to any Third Party the terms and conditions of this Agreement without the prior approval of the other Party, except to (i) advisors (including consultants, financial advisors, attorneys and accountants), (ii) bona fide potential and existing investors and acquirers on a need to know basis, in each case under circumstances that reasonably protect the confidentiality thereof, (iii) to the extent necessary to comply with the terms of agreements with Third Parties, or (iv) to the extent required by Applicable Laws, including securities laws and regulations.  Notwithstanding the foregoing, the Parties must agree upon the initial press release(s) to announce the execution of this Agreement; thereafter, Paratek and Zai may each disclose to Third Parties the information contained in such press release(s) without the need for further approval by the other.

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(b)The Parties acknowledge the importance of supporting each other’s efforts to publicly disclose results and significant developments regarding a Licensed Product for use in the Field in the Territory and other activities in connection with this Agreement, beyond what may be strictly required by Applicable Laws and the rules of a recognized stock exchange, and Zai may make such disclosures from time to time with respect to the Licensed Product with the approval of Paratek, which approval will not be unreasonably withheld, conditioned or delayed.  Such disclosures may include achievement of significant events in the Development (including regulatory process) or Commercialization of a Licensed Product for use in the Field in the Territory.  Unless otherwise requested by the applicable Party, each Party will indicate that Paratek is the licensor of a Licensed Product, Paratek Patents, and Paratek Know-How, as applicable, in each public disclosure issued by such Party regarding a Licensed Product.  When Zai elects to make any public disclosure under this Section 10.3(b), it will give Paratek reasonable notice to review and comment on such statement, it being understood that (i) if Paratek does not notify Zai in writing within [* * *] days or such shorter period if required by Applicable Laws of any reasonable objections, as contemplated in this Section 10.3(b), such disclosure will be deemed approved, and (ii) if Paratek does notify Zai in writing within the time period set forth in clause (i) above, and reasonably determines that such public disclosure would entail the public disclosure of Paratek’s Confidential Information or of patentable inventions upon which patent applications should be filed prior to such public disclosure, such public disclosure will be delayed for such period as may be reasonably necessary for deleting any such Confidential Information of Paratek, or the drafting and filing of a patent application covering such inventions, provided such additional period will not exceed [* * *] days from the proposed date of the public disclosure, and, in any event, Paratek will work diligently and reasonably to agree on the text of any proposed disclosure in an expeditious manner.  The principles to be observed in such disclosures will be accuracy, compliance with Applicable Laws and regulatory guidance documents, and reasonable sensitivity to potential negative reactions of applicable Regulatory Authorities.

(c)The Parties acknowledge the need to keep investors and others informed regarding such Party’s business under this Agreement, including as required by the rules of a recognized stock exchange.  To the extent a Party is publicly listed or becomes publicly listed, and subject to Sections 10.3(a) and 10.3(b), such Party may issue press releases or make disclosures to the SEC or other applicable agency as it determines, based on advice of counsel, as reasonably necessary to comply with laws or regulations or for appropriate market disclosure; provided that each Party shall provide the other Party with advance notice of legally required disclosures to the extent practicable.  The Parties will consult with each other on the provisions of this Agreement to be redacted in any filings made by a Party with the SEC or as otherwise required by Applicable Laws; provided that each Party shall have the right to make any such filing as it reasonably determines necessary under Applicable Laws.

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ARTICLE 11
Representations, Warranties, and Covenants

11.1.Representations, Warranties, and Covenants of Each Party.  Each Party represents and warrants, and covenants to the other Party as of the Effective Date that:

(a)it is a company or corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it is incorporated, and has full corporate power and authority and the legal right to own and operate its property and assets and to carry on its business as it is now being conducted and as contemplated in this Agreement, including, without limitation, the right to grant the licenses granted by it hereunder; and

(b)(i) it has the corporate power and authority and the legal right to enter into this Agreement and perform its obligations hereunder; (ii) it has taken all necessary corporate action on its part required to authorize the execution and delivery of the Agreement and the performance of its obligations hereunder; and (iii) the Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, and binding obligation of such Party that is enforceable against it in accordance with its terms;

(c)it is not a party to any agreement that would prevent it from granting the rights granted to the other Party under this Agreement or performing its obligations under the Agreement;

(d)in the course of performing its obligations or exercising its rights under this Agreement, it will comply with all Applicable Laws, including as applicable, cGMP, GCP, GLP, and GSP standards, and will not employ or engage any party who has been debarred by any Regulatory Authority, or, to such Party’s knowledge, is the subject of debarment proceedings by a Regulatory Authority.

11.2.Additional Representations and Warranties of Paratek.  Paratek represents and warrants to Zai that as of the Effective Date:

(a)it has the right under the Paratek Technology to grant the licenses to Zai as purported to be granted pursuant to this Agreement;

(b)to Paratek’s actual knowledge, the Manufacture, use or sale of the Licensed Product in the Territory for the purposes set forth in the Development Plan will not infringe any issued claim of an issued Patent of any Third Party (except Patents for which Paratek has a license);

(c)Schedule 1.69 lists all Patents in the Territory Controlled by Paratek that cover the composition of matter or formulation of, or salt of or polymorph forms of, or the method of making or method of using, a Licensed Product;

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(d)it has not granted any liens or security interests on the Paratek Technology;

(e)Paratek has not as of the Effective Date, and will not during the Term, grant any right to any Third Party under the Paratek Technology that would conflict with the rights granted to Zai hereunder;

(f)Paratek and its Affiliates is not, and has not been, debarred or disqualified by any Regulatory Authority;

(g)no claim or action has been brought against Paratek or, to Paratek’s knowledge, threatened in writing to Paratek, by any Third Party alleging that the Paratek Patents are invalid or unenforceable, and no interference, opposition, cancellation or other protest proceeding has been filed against a Paratek Patent owned by Paratek; and

(h)Paratek has made available to Zai, via the virtual data room, copies of all patient safety and efficacy data tables, in all material respects, that are in Paratek’s possession as of the Effective Date, in connection with the global Phase III Clinical Study conducted by Paratek for acute bacterial skin and skin structure infections (ABSSSI) and community-acquired bacterial pneumonia (CABP).

11.3.Covenants of Paratek.

(a)Paratek will not modify, amend, or terminate the Tufts Agreement in a manner that is materially adverse to Zai without Zai’s prior written consent.

(b)Paratek will not modify, amend, or terminate, or cause to modify, amend or terminate, the IP Transfer Agreement in a manner that is materially adverse to Zai without Zai’s prior written consent.

11.4.Representations, Warranties, and Covenants of Zai.  Zai represents, warrants, and covenants to Paratek that as of the Effective Date:

(a)there are no legal claims, judgments or settlements against or owed by Zai, or pending or, to Zai’s actual knowledge, threatened, legal claims or litigation, in each case, relating to antitrust, anti-competition, anti-bribery or corruption violations;

(b)Zai and its Affiliates is not, and has not been, debarred or disqualified by any Regulatory Authority;

(c)Zai has sufficient financial wherewithal to (i) perform all of its obligations pursuant to this Agreement, and (ii) meet all of its obligations that come due in the ordinary course of business;

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(d)Zai has, or will obtain, sufficient technical, clinical, and regulatory expertise to perform all of its obligations pursuant to this Agreement, including its obligations relating to Development, Manufacturing, Commercialization, and obtaining Regulatory Approvals; and

(e)Zai will, and will cause its Affiliates and Sublicensees to, be bound by and comply with all obligations that the Tufts Agreement states would apply to sublicenses or sublicensees of the Tufts Agreement.

11.5.NO OTHER REPRESENTATIONS OR WARRANTIES.  EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, ARE MADE OR GIVEN BY OR ON BEHALF OF A PARTY.  ALL SUCH REPRESENTATIONS AND WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED.

11.6.Compliance with Anti-Corruption Laws.

(a)Notwithstanding anything to the contrary in the Agreement, Zai hereby agrees that:

(i)it will not, in the performance of this Agreement, perform any actions that are prohibited by local and other anti-corruption laws (including the provisions of the U.S. Foreign Corrupt Practices Act, collectively “Anti-Corruption Laws”) that may be applicable to one or both Parties to the Agreement;

(ii)it will not, in the performance of this Agreement, directly or indirectly, make any payment, or offer or transfer anything of value, or agree or promise to make any payment or offer or transfer anything of value, to a government official or government employee, to any political party or any candidate for political office or to any other Third Party with the purpose of influencing decisions related to either Party and/or its business in a manner that would violate Anti-Corruption Laws;

(iii)it will, on an annual basis upon request by the other Party, verify in writing that to the best of such Party’s knowledge, there have been no violations of Anti-Corruption Laws by such Party or persons employed by or subcontractors used by such Party in the performance of the Agreement, or will provide details of any exception to the foregoing; and

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(iv)it will maintain records (financial and otherwise) and supporting documentation related to the subject matter of the Agreement in order to document or verify compliance with the provisions of this Section 11.6, and upon request of the other Party, up to once per year and upon reasonable advance notice, will provide a Third Party auditor mutually acceptable to the Parties with access to such records for purposes of verifying compliance with the provisions of this Section 11.6.  Acceptance of a proposed Third Party auditor may not be unreasonably withheld by either Party.  It is expressly agreed that the costs related to the Third Party auditor will be fully paid by the Party requesting the audit, and that any auditing activities may not unduly interfere with the normal business operations of Party subject to such auditing activities.  The audited Party may require the Third Party auditor to enter into a reasonable confidentiality agreement in connection with such an audit.

(b)To its knowledge as of the Effective Date, neither Zai nor any of its subsidiaries nor any of their Affiliates, directors, officers, employees, distributors, agents, representatives, sales intermediaries or other Third Parties acting on behalf of Zai or any of its subsidiaries or any of their Affiliates:

(i)has taken any action in violation of any applicable anticorruption law, including the U.S. Foreign Corrupt Practices Act (15 U.S.C. § 78 dd-1 et seq.); or

(ii)has corruptly, offered, paid, given, promised to pay or give, or authorized the payment or gift of anything of value, directly or indirectly, to any Public Official (as defined in Section 11.6(d) below), for the purposes of:

(iii)influencing any act or decision of any Public Official in his official capacity;

(iv)inducing such Public Official to do or omit to do any act in violation of his lawful duty;

(v)securing any improper advantage; or

(vi)inducing such Public Official to use his or her influence with a government, governmental entity, or commercial enterprise owned or controlled by any government (including state-owned or controlled veterinary or medical facilities) in obtaining or retaining any business whatsoever.

(c)As of the Effective Date, none of the officers, directors,  employees, of Zai or of any of its Affiliates or agents acting on behalf of Zai or any of its Affiliates, in each case that are employed or reside outside the United States, are themselves Public Officials.

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(d)For purposes of this Section 11.6, “Public Official” means (i) any officer, employee or representative of any regional, federal, state, provincial, county or municipal government or government department, agency or other division; (ii) any officer, employee or representative of any commercial enterprise that is owned or controlled by a government, including any state-owned or controlled veterinary or medical facility; (iii) any officer, employee or representative of any public international organization, such as the African Union, the International Monetary Fund, the United Nations or the World Bank; and (iv) any person acting in an official capacity for any government or government entity, enterprise or organization identified above.

ARTICLE 12
Indemnification

12.1.By Zai.  Zai will indemnify and hold harmless Paratek, its Affiliates, and their directors, officers, employees and agents (individually and collectively, the “Paratek Indemnitee(s)”) from and against all losses, liabilities, damages and expenses (including reasonable attorneys’ fees and costs) incurred in connection with any claims, demands, actions or other proceedings by any Third Party (individually and collectively, “Losses”) first arising after the Effective Date to the extent arising from (a) Manufacturing, Development, and Commercialization activities, including the promotion of a Licensed Product and product liability claims relating to the Licensed Product, by Zai or any of its Affiliates or Sublicensees, (b) the [* * *], illegal conduct or willful misconduct of Zai, or (c) Zai’s breach of any of its representations or warranties made in or pursuant to this Agreement or any covenants or obligations set forth in or entered into pursuant to this Agreement, in each case of clauses (a) through (c) above except to the extent such Losses arise out of an Paratek Indemnitee’s gross negligence, illegal conduct or willful misconduct, or breach of this Agreement.

12.2.By Paratek.  Paratek will indemnify and hold harmless Zai, its Affiliates, and their directors, officers, employees and agents (individually and collectively, the “Zai Indemnitee(s)”) from and against all Losses to the extent arising from (a) to the extent any of the following occur, Manufacturing, Development and Commercialization activities in the Territory, including the promotion of a Licensed Product and product liability claims relating to the Licensed Product in the Territory, by Paratek or any of its Affiliates or licensees (other than Zai), (b) the [* * *], illegal conduct or willful misconduct of Paratek, or (c) Paratek’s breach of any of its representations or warranties made in or pursuant to this Agreement or any covenants or obligations set forth in or entered into pursuant to this Agreement, in each case of clauses (a) through (c) above, except to the extent such Losses arise out of any of a Zai Indemnitee’s gross negligence, illegal conduct or willful misconduct, or breach of this Agreement.

12.3.Defined Indemnification Terms.  Either of the Zai Indemnitee or the Paratek Indemnitee will be an “Indemnitee” for the purpose of this ARTICLE 12, and the Party that is obligated to indemnify the Indemnitee under Section 12.1 or Section 12.2 will be the “Indemnifying Party.”

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12.4.Defense.  If any such claims or actions are made, the Indemnitee will be defended at the Indemnifying Party’s sole expense by counsel selected by the Indemnifying Party and reasonably acceptable to the Indemnitee, provided that the Indemnitee may, at its own expense, also be represented by counsel of its own choosing.  The Indemnifying Party will have the sole right to control the defense of any such claim or action, subject to the terms of this ARTICLE 12.

12.5.Settlement.  The Indemnifying Party may settle any such claim, demand, action or other proceeding or otherwise consent to an adverse judgment (a) with prior written notice to the Indemnitee but without the consent of the Indemnitee where the only liability to the Indemnitee is the payment of money and the Indemnifying Party makes such payment, or (b) in all other cases, only with the prior written consent of the Indemnitee, such consent not to be unreasonably withheld or delayed.

12.6.Notice.  The Indemnitee will notify the Indemnifying Party promptly of any claim, demand, action or other proceeding under Sections 12.1 or 12.2 and will reasonably cooperate with all reasonable requests of the Indemnifying Party with respect thereto.

12.7.Permission by Indemnifying Party.  The Indemnitee may not settle any such claim, demand, action or other proceeding or otherwise consent to an adverse judgment in any such action or other proceeding or make any admission as to liability or fault without the express written permission of the Indemnifying Party.

12.8.LIMITATION OF LIABILITY.  SUBJECT TO AND WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF EACH PARTY WITH RESPECT TO THIRD PARTY CLAIMS UNDER SECTIONS 12.1 OR 12.2 OR LIABILITY AS A RESULT OF A BREACH OF ARTICLE 10, NO PARTY OR ANY OF ITS AFFILIATES WILL BE LIABLE TO THE OTHER PARTY UNDER ANY CONTRACT, WARRANTY, NEGLIGENCE, TORT, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, MULTIPLIED OR CONSEQUENTIAL DAMAGES OR FOR LOST PROFITS (EVEN IF DEEMED DIRECT DAMAGES) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.

ARTICLE 13
Intellectual Property

13.1.Ownership of Intellectual Property.

(a)As between the Parties, (i) Paratek will remain the sole and exclusive owner of all Paratek Technology, and (ii) Zai will remain the sole and exclusive owner of all Zai Technology.

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(b)Ownership of all Inventions will be assigned based on inventorship, as determined in accordance with the rules of inventorship under United States patent laws.  Each Party will own all Inventions, that are made solely by its and its Affiliates’ employees, agents, and independent contractors, that are made during the performance of activities under this Agreement (“Sole Inventions”).  The Parties will jointly own all Inventions that are made jointly by the employees, agents, and independent contractors of one Party and its Affiliates together with the employees, agents, and independent contractors of the other Party and its Affiliates (“Joint Inventions”).  Patents covering the Joint Inventions will be referred to as “Joint Patents.” Each Party will own an undivided half interest in the Joint Inventions, without a duty of accounting or an obligation to seek consent from the other Party for the exploitation or license of the Joint Inventions (subject to the licenses granted to the other Party under this Agreement).  Zai hereby grants to Paratek a non-exclusive, royalty-free, fully paid-up, sublicensable license under Zai’s Sole Inventions, solely for Paratek to Develop, Manufacture, or Commercialize products outside of the Territory and Manufacture products in the Territory.

13.2.Disclosure of Inventions.  Each Party will promptly disclose to the other Party all Inventions, including all invention disclosure or other similar documents submitted to such party by its or its Affiliates’ employees, agents, or independent contractors relating to such Inventions, and will also promptly respond to reasonable requests from the other Party for additional information relating to such Inventions.

13.3.Patent Prosecution.

(a)Paratek Responsibilities.  Subject to Section 13.5(b), Paratek will have sole decision making authority, at its sole cost and expense, over Patent Prosecution and maintenance of applications and registrations covering (i) Paratek Know-How, Paratek Patents, and Paratek’s Sole Inventions (such applications and registrations, the “Paratek Prosecution Patents”) and (ii) Joint Inventions that are specific to the Licensed Products.  Paratek will keep Zai reasonably informed of the status of all actions taken, and will consider in good faith Zai’s recommendations with respect to the Paratek Prosecution Patents in the Territory and Joint Inventions that are specific to the Licensed Products worldwide.

(b)Zai Responsibilities.  Zai will have sole decision making authority, at its sole cost and expense, over the Patent Prosecution and maintenance of patent applications and registrations covering (i) Zai Technology and (ii) Zai’s Sole Inventions (such applications and registrations, the “Zai Prosecution Patents”).  Zai will keep Paratek reasonably informed of the status of all actions taken, and will consider in good faith Paratek’s recommendations with respect to the Zai Prosecution Patents and Joint Inventions prosecuted by Zai.

(c)The Parties will discuss the appropriate allocation of responsibility with respect to Joint Inventions that are not specific to the Licensed Products.

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(d)Abandonment.

(i)Paratek Responsibilities.  Paratek will notify Zai of any decision to cease Patent Prosecution or maintenance of any Paratek Prosecution Patents owned by Paratek in the Territory, or Joint Patents prosecuted by Paratek, and will provide such notice at least 60 days prior to any filing or payment due date, or any other due date that requires action, in connection with such Paratek Prosecution Patent in the Territory or such Joint Patent.  In such event, Paratek will permit Zai, at its sole cost and expense, to continue Patent Prosecution or maintenance of such Paratek Prosecution Patent in the Territory or such Joint Patent.  If Zai decides to take over Patent Prosecution or maintenance of such Paratek Prosecution Patent or such Joint Patent, then Paratek will promptly deliver to Zai copies of all necessary files related to such Paratek Prosecution Patent or such Joint Patent and will take all actions and execute all documents reasonably necessary for Zai to assume such responsibility.  For the avoidance of doubt, Zai’s maintenance or Patent Prosecution of such Paratek Prosecution Patent or such Joint Patent will not change the Parties’ respective ownership rights with respect to such Paratek Prosecution Patent or such Joint Patent.

(ii)Zai Responsibilities.  Zai will notify Paratek of any decision to cease Patent Prosecution or maintenance of any Zai Prosecution Patents or Joint Patents prosecuted by Zai (if any), and will provide such notice at least 60 days prior to any filing or payment due date, or any other due date that requires action, in connection with such Zai Prosecution Patent (to the extent relating to the Licensed Product) or such Joint Patent.  In such event, Zai will permit Paratek, at its sole cost and expense, to continue Patent Prosecution or maintenance of such Zai Prosecution Patent or such Joint Patent.  If Paratek decides to take over Patent Prosecution or maintenance for a Zai Prosecution Patent or a Joint Patent, then Zai will promptly deliver to Paratek copies of all necessary files related to such Zai Prosecution Patent or such Joint Patent and will take all actions and execute all documents reasonably necessary for Paratek to assume such responsibility.  For the avoidance of doubt, Paratek’s maintenance or Patent Prosecution of such Zai Prosecution Patent or such Joint Patent will not change the Parties’ respective ownership rights with respect to such Zai Prosecution Patent or such Joint Patent.

13.4.Patent and Trademark Prosecution Cooperation.  With respect to all Patent Prosecution or trademark prosecution each Party will:

(a)execute any instruments to document their respective ownership consistent with this Agreement as reasonably requested by the other Party;

(b)make its employees, agents and consultants reasonably available to the other Party (or to the other Party’s authorized attorneys, agents or representatives), to the extent reasonably necessary to enable the appropriate Party hereunder to undertake its Patent Prosecution responsibilities;

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(c)cooperate, if necessary, with the other Party in gaining Patent term extensions; and

(d)act in good faith to coordinate its efforts under this Agreement with the other Party to minimize or avoid interference with the Patent Prosecution of the other Party’s Patents to a Licensed Product or trademarks.

13.5.Enforcement.

(a)Each Party will notify the other within 30 Business Days of becoming aware of any alleged or threatened infringement by a Third Party of any of the Paratek Patents, Zai Patents, or Joint Patents which infringement adversely affects or is expected to adversely affect any Licensed Product, and any related declaratory judgment, opposition, or similar action alleging the invalidity, unenforceability or non-infringement of any of the Paratek Patents, Zai Patents, or Joint Patents (collectively “Product Infringement”).

(b)Zai will have the first right to bring and control any legal action in connection with such Product Infringement in the Territory at its own expense as it reasonably determines appropriate.  If Zai decides not to bring such legal action, it will so inform Paratek promptly and Paratek will have the right to bring and control any legal action in connection with such Product Infringement in the Territory at its own expense as it reasonably determines appropriate.

(c)Paratek will have the exclusive right to bring and control any legal action in connection with Product Infringement outside the Territory at its own expense as it reasonably determines appropriate.

(d)Each Party will have the first right in its territory to enforce the Joint Patents for any infringement that is not a Product Infringement at its own expense as it reasonably determines appropriate.  If such Party decides not to bring such legal action, it will so inform the other Party promptly and the other Party will have the right to bring and control any legal action in connection with such infringement at its own expense as it reasonably determines appropriate.

(e)At the request of the Party bringing an action related to Product Infringement, the other Party will provide reasonable assistance in connection therewith, including by executing reasonably appropriate documents, cooperating in discovery and joining as a party to the action if required by Applicable Law to pursue such action, at each such Party’s sole cost and expense.  In connection with an action related to Product Infringement, the Party bringing the action will not enter into any settlement admitting the invalidity or non-infringement of, or otherwise impairing the other Party’s rights in the Paratek Patents, Zai Patents or Joint Patents (as applicable) without the prior written consent of the other Party.

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(f)Any recoveries resulting from enforcement action relating to a claim of Product Infringement in the Territory will be first applied against payment of each Party’s costs and expenses in connection therewith.  Any such recoveries in excess of such costs and expenses will be split as follows: [* * *]

13.6.Defense.

(a)Each Party will notify the other in writing of any allegations it receives from a Third Party that the Exploitation of any Licensed Product or any embodiment of any technology or intellectual property licensed by a Party under this Agreement infringes the intellectual property rights of such Third Party.  Such notice will be provided promptly, but in no event after more than 15 days following receipt of such allegations.  Such written notice will include a copy of any summons or complaint (or the equivalent thereof) received regarding the foregoing.  Each Party will assert and not waive the joint defense privilege with respect to all communications between the Parties.

(b)In such event, the Parties will agree how best to mitigate or control the defense of any such legal proceeding, agree whether to enter into a joint defense agreement to, among other reasons, preserve the confidentiality of communications or cooperation between the Parties in relation to such defense, and determine which Party is best suited to assume the primary responsibility for the conduct of the defense of any such claim at their expense.  The other Party will have the right, but not the obligation, to participate and be separately represented in any such suit at its sole option and at its own expense.  Each Party will reasonably cooperate with the Party conducting the defense of the claim.  If a Party or any of its Affiliates have been individually named as a defendant in a legal proceeding relating to the alleged infringement of a Third Party’s Patents or other intellectual property right as a result of the Exploitation of a Licensed Product, then that Party will conduct the defense and the other Party will be allowed to join in such action, at its own expense.

(c)The Parties will keep each other informed of the status of and of their respective activities regarding any infringement litigation initiated by a Third Party concerning a Party’s Exploitation of a Licensed Product or settlement thereof; provided, however, that no settlement or consent judgment or other voluntary final disposition of a suit under this Section 13.6 may be undertaken by a Party without the consent of the other Party which consent will not be unreasonably withheld or delayed.

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ARTICLE 14
Terms and Termination

14.1.Term.  This Agreement will be effective as of the Effective Date, and will continue, on a region-by-region basis, in effect until the expiration of and payment by Zai of all Zai’s payment obligations set forth in Section 9.4(c) applicable to such region (the “Term”).  On a region-by-region basis, upon the natural expiration of this Agreement as contemplated in this Section 14.1, the licenses granted by Paratek to Zai under this Agreement in such region will become a fully paid-up, non-exclusive, perpetual, and irrevocable license.

14.2.Termination for Convenience.  At any time prior to [* * *], Zai will have the right to terminate this Agreement in its entirety for any or no reason upon [* * *] written notice to Paratek.  Following [* * *], Zai will have the right to terminate this Agreement in its entirety for any or no reason upon [* * *] written notice to Paratek.  Zai shall terminate this Agreement if it determines that it will permanently discontinue all Development and Commercialization activities with respect to the Licensed Product under this Agreement.

14.3.Termination for Material Breach.

(a)This Agreement may be terminated in its entirety at any time during the Term upon written notice by either Party if the other Party materially breaches a material term of the Agreement and, if such breach is curable, such breach has not been cured within [* * *] ([* * *] if such breach is a material breach of any obligation under the Tufts Agreement) after notice requesting cure of such breach; provided that the applicable material breach cure period will not apply to [* * *], and [* * *] will have the right to terminate this Agreement, with immediate effect, upon written notice [* * *].

(b)For the avoidance of doubt, the Parties agree that [* * *] will be deemed material terms of the Agreement.

14.4.Termination for Patent Challenge.  Except to the extent the following is unenforceable under the laws of a particular jurisdiction, Paratek may terminate this Agreement in its entirety, immediately if Zai or its Affiliates or Sublicensees, individually or in association with any other person or entity, commences a legal action challenging the validity, enforceability or scope of any Patents owned or Controlled by Paratek anywhere in the world Notwithstanding the foregoing, if Zai promptly terminates the sublicense agreement of any Sublicensee that commences a legal action challenging the validity, enforceability or scope of any Patents owned or Controlled by Paratek anywhere in the world, Paratek shall not have the right to terminate this Agreement under this Section 14.4.

14.5.Termination for Insolvency.  Each Party will have the right to terminate this Agreement upon delivery of written notice to the other Party in the event that (a) such other Party files in any court or agency pursuant to any statute or regulation of any jurisdiction a 

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petition in bankruptcy or insolvency or for reorganization or similar arrangement for the benefit of creditors or for the appointment of a receiver or trustee of such other Party or its assets, (b) such other Party is served with an involuntary petition against it in any insolvency proceeding and such involuntary petition has not been stayed or dismissed within [* * *] of its filing, or (c) such other Party makes an assignment of substantially all of its assets for the benefit of its creditors.

14.6.Election to Terminate.  If either Party has the right to terminate under Sections 14.2 through 14.5, it may at its sole option, elect either to (a) terminate this Agreement and pursue any legal or equitable remedy available to it or (b) maintain this Agreement in effect and pursue any legal or equitable remedy available to it.

14.7.Effect of Termination.

(a)Upon the termination of this Agreement for any reason, all rights and licenses (including the rights and licenses with respect to the Licensed Product) granted to a Party herein will immediately terminate, and all sublicenses of such rights and licenses will also terminate; provided that the licenses granted by Zai to Paratek pursuant to Sections 2.3 and 13.1(b) will become perpetual and irrevocable to Develop, Manufacture and Commercialize Licensed Products worldwide.  Termination of this Agreement for any reason will not release either Party of any obligation or liability which, at the time of such termination, has already accrued to the other Party or which is attributable to a period prior to such termination.  Notwithstanding anything herein to the contrary, termination of this Agreement by a Party will be without prejudice to other remedies such Party may have at law or equity.

(b)Upon termination of this Agreement for any reason (other than termination by Zai pursuant to Section 14.3), the following additional provisions will apply:

(i)Reversion of Rights to Paratek.  Any rights and licenses with respect to the Licensed Product granted to Zai under this Agreement will immediately terminate, and all such rights will revert back to Paratek.

(ii)Regulatory Materials; Data.  Zai will, and will cause its Affiliates and Sublicensees to, at no cost to Paratek, (1) assign all Regulatory Materials and Regulatory Approvals of Licensed Products to Paratek to the maximum extent permitted by Applicable Law at the time of any such termination, and (2) assign all data generated by or on behalf of Zai while conducting Development, Manufacturing, or Commercialization activities under the Agreement to Paratek, including non-clinical and clinical studies conducted by or on behalf of Zai on Licensed Products and all pharmacovigilance data (including all Adverse Event database information) on Licensed Products. 

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(iii)Trademarks.  Zai will, and will cause its Affiliates and Sublicensees, to promptly transfer and assign to Paratek, at no cost to Paratek, all Product Marks (excluding any such mark that include, in whole or in part, any corporate name or logos of Zai or its Affiliates).

(iv)Transition Assistance.  Zai will, and will cause its Affiliates and Sublicensees, to provide assistance, [* * *], as may be reasonably necessary or useful for Paratek to commence or continue Developing, Manufacturing or Commercializing Licensed Products in the Territory, to the extent Zai is then performing or having performed such activities, including without limitation transferring or amending as appropriate, upon request of Paratek, any agreements or arrangements with Third Party to Develop, Manufacture, and Commercialize the Licensed Products in the Territory.  To the extent that any such contract between Zai and a Third Party is not assignable to Paratek, then Zai will reasonably cooperate with Paratek to arrange to continue to and provide such services from such entity.

(v)Ongoing Clinical Trial.  If at the time of such termination, any Clinical Trials for the Licensed Products are being conducted by or on behalf of Zai, then, at Paratek’s election on a trial-by-trial basis: (1) Zai will, and will cause its Affiliates and Sublicensees to, fully cooperate with Paratek to transfer the conduct of all such Clinical Trials to Paratek and Paratek will assume any and all liability and costs for such Clinical Trials after the effective date of such termination; or (2) Zai will, and will cause its Affiliates and Sublicensees to, [* * *], orderly wind down the conduct of any such Clinical Trial which is not assumed by Paratek under clause (1).

(c)Termination by Zai Due to Material Breach.  Upon termination of this Agreement by Zai pursuant to Section 14.3, [* * *] to the extent [* * *], including [* * *].

(d)Royalty after Termination.  If (i) [* * *] terminates this Agreement pursuant to [* * *] or (ii) this Agreement is terminated [* * *], and if Paratek, itself or through an Affiliate or a Third Party, Commercializes any Licensed Product in the Territory, Paratek shall pay Zai a commercially reasonable royalty on the Net Sales of all such Licensed Products in the Territory at a royalty rate and duration to be determined by the Parties by good faith negotiations.  If the Parties are unable to agree to terms within [* * *] of commencing such negotiations, the disputed terms will be resolved by arbitration as set forth in Section 15.4.

14.8.Survival.  Termination or expiration of this Agreement shall not affect any rights or obligations of the Parties under this Agreement that have accrued prior to the date of termination or expiration.  The following provisions will survive the termination or expiration of this Agreement for any reason: [* * *].

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ARTICLE 15
Dispute Resolution

15.1.General.  The Parties recognize that a dispute may arise relating to this Agreement (a “Dispute”).  Any Dispute, including Disputes that may involve the Affiliates of any Party, will be resolved in accordance with this ARTICLE 15.

15.2.Continuance of Rights and Obligations During Pendency of Dispute Resolution.  If there are any Disputes in connection with this Agreement, including Disputes related to termination of this Agreement under ARTICLE 14, all rights and obligations of the Parties will continue until such time as any Dispute has been resolved in accordance with the provisions of this ARTICLE 15.

15.3.Escalation.  Any claim, Dispute, or controversy as to the breach, enforcement, interpretation or validity of this Agreement will be referred to the Executive Officers set forth in Section 3.2(f) for attempted resolution.  In the event the Executive Officers are unable to resolve such Dispute within 30 days of such Dispute being referred to them, then, upon the written request of either Party to the other Party, the Dispute will be subject to arbitration in accordance with Section 15.4.

15.4.Arbitration.

(a)If the Parties fail to resolve the Dispute through escalation to the Executive Officers under Section 15.3, and a Party desires to pursue resolution of the Dispute, the Dispute will be submitted by either Party for resolution in arbitration under the [* * *].

(b)There will be three arbitrators, the chairperson of whom will be appointed by the two party arbitrators.  If, however, the aggregate award sought by the Parties is less than [* * *] and equitable relief is not sought, a single arbitrator will be chosen in accordance with the [* * *].

(c)The seat of arbitration will be [* * *] and the language of the proceedings will be English.

(d)The Parties agree that any award or decision made by the arbitral tribunal will be final and binding upon them and may be enforced in the same manner as a judgment or order of a court of competent jurisdiction.  The arbitral tribunal will render its final award within nine months from the date on which the Request for Arbitration by one of the Parties wishing to have recourse to arbitration is received by the [* * *].  The arbitral tribunal will determine the dispute by applying the provisions of this Agreement and the governing law set forth in Section 16.5.

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(e)By agreeing to arbitration, the Parties do not intend to deprive any court of its jurisdiction to issue, at the request of a Party, a pre-arbitral injunction, pre-arbitral attachment or other order to avoid irreparable harm, maintain the status quo, preserve the subject matter of the Dispute, or aid the arbitration proceedings and the enforcement of any award.  Without prejudice to such provisional or interim remedies in aid of arbitration as may be available under the jurisdiction of a competent court, the arbitral tribunal will have full authority to grant provisional or interim remedies and to award damages for the failure of any Party to the dispute to respect the arbitral tribunal’s order to that effect.

(f)EACH PARTY HERETO WAIVES: (I) ITS RIGHT TO TRIAL OF ANY ISSUE BY JURY, AND (II) ANY CLAIM FOR ATTORNEY FEES, COSTS AND PREJUDGMENT INTEREST.

(g)Each Party will bear its own attorney’s fees, costs, and disbursements arising out of the arbitration, and will pay an equal share of the fees and costs of the administrator and the arbitrator; provided, however, that the arbitrator will be authorized to determine whether a Party is the prevailing party, and if so, to award to that prevailing party reimbursement for any or all of its reasonable attorneys’ fees, costs and disbursements (including, for example, expert witness fees and expenses, photocopy charges, travel expenses, etc.), and/or the fees and costs of the administrator and the arbitrator.

(h)Notwithstanding anything in this Section 15.4, in the event of a Dispute with respect to the validity, scope, enforceability or ownership of any Patent or other intellectual property rights, and such Dispute is not resolved in accordance with Section 15.3, such Dispute will not be submitted to an arbitration proceeding in accordance with this Section 15.4, unless otherwise agreed by the Parties in writing, and instead, either Party may initiate litigation in a court of competent jurisdiction in any country in which such rights apply.

ARTICLE 16
Miscellaneous

16.1.Force Majeure.  Neither Party will be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in performing any obligation under this Agreement to the extent such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party including embargoes, war, acts of war (whether war be declared or not), insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, fire, floods, or other acts of God or any other deity, or acts, omissions or delays in acting by any Governmental Authority.  The affected Party will notify the other Party of such force majeure circumstances as soon as reasonably practical, and will promptly undertake all reasonable efforts necessary to cure such force majeure circumstances.

16.2.Assignment.  Neither Party may assign this Agreement to a Third Party without the other Party’s prior written consent (such consent not to be unreasonably withheld); except 

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that (a) Paratek may make such an assignment without Zai’s consent to a successor to substantially all of the business of Paratek to which this Agreement relates (whether by merger, sale of stock, sale of assets or other transaction), (b) Zai may make such an assignment without Paratek’s consent to a successor to substantially all of the business of Zai (whether by merger, sale of stock, sale of assets or other transaction), and (c) either Party may assign this Agreement to an Affiliate without the other Party’s consent.  This Agreement will inure to the benefit of and be binding on the Parties’ successors and permitted assigns.  Any assignment or transfer in violation of this Section ‎16.2 will be null and void and wholly invalid, the assignee or transferee in any such assignment or transfer will acquire no rights whatsoever, and the non-assigning non-transferring Party will not recognize, nor will it be required to recognize, such assignment or transfer.

16.3.Severability.  If any one or more of the provisions contained in this Agreement is held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein will not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive rights of the Parties.  The Parties will in such an instance use their best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of this Agreement.

16.4.Notices.  All notices which are required or permitted hereunder will be in writing and sufficient if delivered personally, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent by nationally-recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

If to Paratek:

Paratek Bermuda Ltd.

C/O Paratek Pharmaceuticals, Inc.

Address: 75 Park Plaza, 4th Floor

Boston, MA 02116

[* * *]

with a copy to:

Ropes & Gray, LLP

Address: 36/F, Park Place, Nanjing Road West, Shanghai 200040, China

[* * *]

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If to Zai:

Zai Lab (Shanghai) Co., Ltd.

Address: 1043 Halei Road, Building 8, Suite 502, Pudong, Shanghai, P.R. China, 201203

[* * *]

with a copy to:

Cooley LLP

Address: 3175 Hanover Street
Palo Alto, CA 94304 USA

[* * *]

or to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith.  Any such notice will be deemed to have been given: (a) when delivered if personally delivered or sent by facsimile on a Business Day; (b) on the Business Day after dispatch if sent by nationally-recognized overnight courier; or (c) on the fifth Business Day following the date of mailing if sent by mail.

16.5.Governing Law.  This Agreement will be governed by and construed in accordance with the laws of the State of New York, U.S. without reference to any rules of conflict of laws.

16.6.Entire Agreement; Amendments.  The Agreement contains the entire understanding of the Parties with respect to the subject matter hereof.  All express or implied agreements and understandings, either oral or written, with regard to the subject matter hereof (including the licenses granted hereunder) are superseded by the terms of this Agreement.  Neither Party is relying on any representation, promise, nor warranty not expressly set forth in this Agreement.  This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representatives of both Parties hereto.

16.7.Headings.  The captions to the several Sections hereof are not a part of this Agreement, but are merely for convenience to assist in locating and reading the Sections of this Agreement.

16.8.Independent Contractors.  It is expressly agreed that Paratek and Zai will be independent contractors and that the relationship between the two Parties will not constitute a partnership, joint venture or agency.  Neither Paratek nor Zai will have the authority to make any statements, representations or commitments of any kind, or to take any action, which will be binding on the other Party, without the prior written consent of the other Party.

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16.9.Waiver.  The waiver by either Party of any right hereunder, or the failure of the other Party to perform, or a breach by the other Party, will not be deemed a waiver of any other right hereunder or of any other breach or failure by such other Party whether of a similar nature or otherwise.

16.10.Waiver of Rule of Construction.  Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement.  Accordingly, the rule of construction that any ambiguity in this Agreement will be construed against the drafting Party will not apply.

16.11.Construction.  Except where the context expressly requires otherwise, (a) the use of any gender herein will be deemed to encompass references to either or both genders, and the use of the singular will be deemed to include the plural (and vice versa), (b) the words “include”, “includes” and “including” will be deemed to be followed by the phrase “without limitation”, (c) the word “will” will be construed to have the same meaning and effect as the word “shall”, (d) any definition of or reference to any agreement, instrument or other document herein will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (e) any reference herein to any person will be construed to include the person’s successors and assigns, (f) the words “herein”, “hereof” and “hereunder”, and words of similar import, will be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (g) all references herein to Sections, Schedules, or Exhibits will be construed to refer to Sections, Schedules or Exhibits of this Agreement, and references to this Agreement include all Schedules and Exhibits hereto, (h) the word “notice” means notice in writing (whether or not specifically stated) and will include notices, consents, approvals and other written communications contemplated under this Agreement, (i) provisions that require that a Party, the Parties or any committee hereunder “agree”, “consent” or “approve” or the like will require that such agreement, consent or approval be specific and in writing, whether by written agreement, letter, approved minutes or otherwise (but excluding e-mail and instant messaging), (j) references to any specific law, rule or regulation, or Section, section or other division thereof, will be deemed to include the then-current amendments thereto or any replacement or successor law, rule or regulation thereof, and (k) the term “or” will be interpreted in the inclusive sense commonly associated with the term “and/or” where applicable.

16.12.Counterparts.  This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.  Each Party will be entitled to rely on the delivery of executed facsimile copies of counterpart execution pages of this Agreement and such facsimile copies will be legally effective to create a valid and binding agreement among the Parties.

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16.13.Language.  This Agreement is in the English language only, which language will be controlling in all respects, and all versions hereof in any other language will be for accommodation only and will not be binding upon the Parties.  All communications and notices to be made or given pursuant to this Agreement, and any dispute proceeding related to or arising hereunder, will be in the English language.  If there is a discrepancy between any translation of this Agreement and this Agreement, this Agreement will prevail.

{Signature Page Follows}

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IN WITNESS WHEREOF, the Parties intending to be bound have caused this License and Collaboration Agreement to be executed by their duly authorized representatives as of the Effective Date.

	
Paratek Bermuda Ltd.
	
 
	
Zai Lab (Shanghai) Co., Ltd.

	
 
	
 
	
 

	
By:
	
/s/ William M. Haskel
	
 
	
By:
	
/s/ Samantha Du

	
 
	
 
	
 

	
Name:
	
William M. Haskel
	
 
	
Name:
	
Samantha Du

	
 
	
 
	
 

	
Title:
	
Director
	
 
	
Title:
	
CEO

	
 
	
 
	
 

	
Date:
	
April 21, 2017
	
 
	
Date:
	
April 21, 2017

 

 

 

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Schedule 1.23
Chemical Structure of the Compound

Omadacycline (OMC, PTK-796)

(4S,4aS,5aR,12aS)-4,7-bis(dimethylamino)-3,10,12,12a-tetrahydroxy-9-((neopentylamino)methyl)-1,11-dioxo-1,4,4a,5,5a,6,11,12a-octahydrotetracene-2-carboxamide

 

 

 

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Schedule 1.69

Paratek Patents as of the Effective Date

 

	
Country
	
M&E Ref.
	
Paratek Ref.
	
Type
	
Application No.

Publication No.
	
Title
	
Filing Date
	
Patent No.
	
Issue Date
	
Expiration 

Date
	
Status

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

 

 

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Schedule 2.4(b)

 

Material Sublicensees [* * *]

 

[* * *]

 

 

 

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Schedule 5.2

Initial Development Plan

 

[* * *]

 

 

 

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Schedule 8.4

Paratek Product Marks

 

	
Cntry
	
Trademark
	
Status
	
App. No.
	
Reg. No.

	
[* * *]
	
[* * *]
	
[* * *]
	
[* * *]
	
[* * *]prtk-ex1012_379.htm

EXHIBIT 10.12

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Master Manufacturing Services Agreement 

EXECUTION VERSION

CONFIDENTIAL

Master Manufacturing Services Agreement

July 28, 2017

PARATEK PHARMACEUTICALS, INC.

 

 

 

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Master Manufacturing Services Agreement 

 

Table of Contents

 

	
ARTICLE 1 Structure of Agreement and Interpretation
	
 
	
1

	
 
	
 
	
 

	
1.1
	
 
	
Master Agreement.
	
 
	
1

	
1.2
	
 
	
Product Agreements.
	
 
	
2

	
1.3
	
 
	
Definitions.
	
 
	
2

	
1.4
	
 
	
Currency.
	
 
	
7

	
1.5
	
 
	
Sections and Headings.
	
 
	
7

	
1.6
	
 
	
Singular Terms.
	
 
	
8

	
1.7
	
 
	
Appendix 1, Schedules and Exhibits.
	
 
	
8

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 2 PATHEON'S MANUFACTURING services
	
 
	
9

	
 
	
 
	
 

	
2.1
	
 
	
Manufacturing Services.
	
 
	
9

	
2.2
	
 
	
Active Material Yield.
	
 
	
11

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 3 CLIENT'S OBLIGATIONS
	
 
	
12

	
 
	
 
	
 

	
3.1
	
 
	
Payment.
	
 
	
12

	
3.2
	
 
	
Active Materials and Qualification of Additional Sources of Supply.
	
 
	
12

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 4 [* * *] COMPONENT COSTS
	
 
	
13

	
 
	
 
	
 

	
4.1
	
 
	
First Year Pricing.
	
 
	
13

	
4.2
	
 
	
Price Adjustments – Subsequent Years’ Pricing.
	
 
	
13

	
4.3
	
 
	
[* * *]
	
 
	
14

	
4.4
	
 
	
Price Adjustments – Current Year Pricing.
	
 
	
14

	
4.5
	
 
	
[* * *]
	
 
	
14

	
4.6
	
 
	
Multi-Country Packaging Requirements.
	
 
	
14

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 5 ORDERS, SHIPMENT, INVOICING, PAYMENT
	
 
	
14

	
 
	
 
	
 

	
5.1
	
 
	
Orders and Forecasts.
	
 
	
14

	
5.2
	
 
	
Reliance by Patheon.
	
 
	
15

	
5.3
	
 
	
[* * *].
	
 
	
16

	
5.4
	
 
	
Delivery and Shipping.
	
 
	
16

	
5.5
	
 
	
Invoices and Payment.
	
 
	
16

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 6 PRODUCT CLAIMS AND RECALLS
	
 
	
16

	
 
	
 
	
 

	
6.1
	
 
	
Product Claims.
	
 
	
16

	
6.2
	
 
	
Product Recalls and Returns.
	
 
	
17

	
6.3
	
 
	
Patheon’s Responsibility for Defective and Recalled Products.
	
 
	
17

	
6.4
	
 
	
Disposition of Defective or Recalled Products.
	
 
	
18

	
6.5
	
 
	
Healthcare Provider or Patient Questions and Complaints.
	
 
	
18

	
6.6
	
 
	
[* * *].
	
 
	
18

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 7 CO-OPERATION
	
 
	
18

	
 
	
 
	
 

	
7.1
	
 
	
Quarterly Review.
	
 
	
18

	
7.2
	
 
	
Governmental Agencies.
	
 
	
19

	
7.3
	
 
	
Records and Accounting by Patheon.
	
 
	
19

- i -

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Master Manufacturing Services Agreement 

 

	
7.4
	
 
	
Inspection.
	
 
	
19

	
7.5
	
 
	
Access.
	
 
	
19

	
7.6
	
 
	
Notification of Regulatory Inspections.
	
 
	
19

	
7.7
	
 
	
Reports.
	
 
	
20

	
7.8
	
 
	
Regulatory Filings.
	
 
	
20

	
7.9
	
 
	
Technology Transfer.
	
 
	
21

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 8 TERM AND TERMINATION
	
 
	
21

	
 
	
 
	
 

	
8.1
	
 
	
Initial Term.
	
 
	
21

	
8.2
	
 
	
Termination for Cause.
	
 
	
21

	
8.3
	
 
	
Obligations on Termination.
	
 
	
22

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 9 REPRESENTATIONS, WARRANTIES AND COVENANTS
	
 
	
23

	
 
	
 
	
 

	
9.1
	
 
	
Authority.
	
 
	
23

	
9.2
	
 
	
Client Warranties.
	
 
	
23

	
9.3
	
 
	
Patheon Warranties.
	
 
	
24

	
9.4
	
 
	
Permits.
	
 
	
24

	
9.5
	
 
	
No Warranty.
	
 
	
25

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 10 REMEDIES AND INDEMNITIES
	
 
	
25

	
 
	
 
	
 

	
10.1
	
 
	
Consequential and Other Damages.
	
 
	
25

	
10.2
	
 
	
Limitation of Liability.
	
 
	
25

	
10.3
	
 
	
Patheon Indemnity.
	
 
	
25

	
10.4
	
 
	
Client Indemnity.
	
 
	
26

	
10.5
	
 
	
Reasonable Allocation of Risk.
	
 
	
26

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 11 CONFIDENTIALITY
	
 
	
26

	
 
	
 
	
 

	
11.1
	
 
	
Confidential Information.
	
 
	
26

	
11.2
	
 
	
Use of Confidential Information.
	
 
	
27

	
11.3
	
 
	
Exclusions.
	
 
	
27

	
11.4
	
 
	
Photographs and Recordings.
	
 
	
28

	
11.5
	
 
	
Permitted Disclosure.
	
 
	
28

	
11.6
	
 
	
Marking.
	
 
	
28

	
11.7
	
 
	
Return of Confidential Information.
	
 
	
28

	
11.8
	
 
	
Remedies.
	
 
	
28

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 12 DISPUTE RESOLUTION
	
 
	
29

	
 
	
 
	
 

	
12.1
	
 
	
Commercial Disputes.
	
 
	
29

	
12.2
	
 
	
Technical Dispute Resolution.
	
 
	
29

	
 
	
 
	
 
	
 
	
 

	
ARTICLE 13 MISCELLANEOUS
	
 
	
29

	
 
	
 
	
 

	
13.1
	
 
	
Inventions.
	
 
	
29

	
13.2
	
 
	
Intellectual Property.
	
 
	
30

	
13.3
	
 
	
[* * *].
	
 
	
30

	
13.4
	
 
	
Insurance.
	
 
	
30

	
13.5
	
 
	
Independent Contractors.
	
 
	
31

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Master Manufacturing Services Agreement 

 

	
13.6
	
 
	
No Waiver.
	
 
	
31

	
13.7
	
 
	
Assignment and Subcontracting.
	
 
	
31

	
13.8
	
 
	
Force Majeure.
	
 
	
31

	
13.9
	
 
	
Additional Product.
	
 
	
32

	
13.10
	
 
	
Notices.
	
 
	
32

	
13.11
	
 
	
Severability.
	
 
	
32

	
13.12
	
 
	
Entire Agreement.
	
 
	
32

	
13.13
	
 
	
Other Terms.
	
 
	
33

	
13.14
	
 
	
No Third Party Benefit or Right.
	
 
	
33

	
13.15
	
 
	
Execution in Counterparts.
	
 
	
33

	
13.16
	
 
	
Use of Client Name.
	
 
	
33

	
13.17
	
 
	
Taxes.
	
 
	
33

	
13.18
	
 
	
Governing Law.
	
 
	
33

	
13.19
	
 
	
Further Assurances..
	
 
	
34

	
13.20
	
 
	
Supply and Quality Committee
	
 
	
34

 

 

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Master Manufacturing Services Agreement 

 

MASTER MANUFACTURING SERVICES AGREEMENT

THIS MASTER MANUFACTURING SERVICES AGREEMENT (the “Agreement”) is made as of July 28, 2017 (the “Effective Date”)

B E T W E E N:

PATHEON UK LIMITED, 
a corporation existing under the laws of England whose registered office is at Kingfisher Drive, Covingham, Swindon, SN3 5BZ, United Kingdom

(“Patheon”),

- and -

PARATEK PHARMACEUTICALS, INC.,
a corporation existing under the laws of Delaware  

of 4th Floor, 75 Park Plaza,

Boston, MA 02116, USA

(“Client”, along with Patheon, the “Parties” and each, a “Party”).

THIS AGREEMENT WITNESSES THAT in consideration of the rights conferred and the obligations assumed herein, and for other good and valuable consideration (the receipt and sufficiency of which are acknowledged by each Party), and intending to be legally bound the Parties agree as follows:

ARTICLE 1 

Structure of Agreement and Interpretation

1.1Master Agreement.

This Agreement establishes the general terms and conditions under which Patheon or, subject to the terms of this Agreement, any Affiliate of Patheon as of the Effective Date may perform Manufacturing Services for Client or any Affiliate of Client, at the manufacturing site where Patheon or the relevant Affiliate of Patheon resides. This “master” form of agreement is intended to allow the Parties, or any of their Affiliates, to contract for the manufacture of multiple Products through Patheon’s global network of manufacturing sites through the issuance of site specific Product Agreements without having to re-negotiate the basic terms and conditions contained herein.  [* * *]  The Parties agree that a separate technology transfer agreement shall be agreed prior to such move within the Manufacturing Site, setting out the terms of the technology transfer.   Product manufactured by Patheon in the PDS Area prior to the Effective Date may be released for commercial use on or after the Effective Date, and the terms of this Agreement (and not any prior agreement entered into between the Parties) shall apply to the release of the Product for commercial use and generally thereafter (including, without limitation, recall, insurance and liability and indemnities).

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Master Manufacturing Services Agreement 

 

1.2Product Agreements.

This Agreement is structured so that a Product Agreement may be entered into by the Parties for the manufacture of a particular Product or multiple Products at a Patheon manufacturing site. Each Product Agreement will be governed by the terms and conditions of this Agreement unless the Parties to the Product Agreement expressly modify the terms and conditions of this Agreement in the Product Agreement.  Unless otherwise agreed by the Parties, each Product Agreement will be in the general form and contain the information set forth in Appendix 1 hereto.       

1.3Definitions.

The following terms will, unless the context otherwise requires, have the respective meanings set out below and grammatical variations of these terms will have corresponding meanings:

“Active Materials”, “Active Pharmaceutical Ingredients” or “API” means the materials listed in a Product Agreement on Schedule D;

[* * *];

[* * *];

[* * *];

“Affiliate” means:

	
 
	
(a)
	
a business entity which owns, directly or indirectly, a controlling interest in a Party to this Agreement, by stock ownership or otherwise; or

	
 
	
(b)
	
a business entity which is controlled by a Party to this Agreement, either directly or indirectly, by stock ownership or otherwise; or

	
 
	
(c)
	
a business entity, the controlling interest of which is directly or indirectly common to the majority ownership of a Party to this Agreement;

For this definition, “control” means the ownership of shares carrying at least a majority of the votes for the election of the directors of a corporation;

“Annual Product Review Report” means the annual product review report prepared by Patheon or an Affiliate of Patheon as described in Title 21 of the United States Code of Federal Regulations, Section 211.180(e); 

“Annual Report” means the annual report to the FDA which is required to be prepared and filed by Client regarding the Product as described in Title 21 of the United States Code of Federal Regulations, Section 314.81(b)(2);

[* * *];

“Applicable Laws” means [* * *]

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Master Manufacturing Services Agreement 

 

“Authority” means any governmental or regulatory authority, department, body or agency or any court, tribunal, bureau, commission or other similar body, whether federal, state, provincial, county or municipal;

“Bill Back Items” means the expenses for all third party supplier fees for the purchase or use of columns, standards, tooling, non-standard pallets, PAPR or PPE suits (where applicable) and other project-specific items necessary for Patheon to perform the Manufacturing Services, and which are not included as Components;

“Breach Notice” has the meaning specified in Section 8.2(a);

“Business Day” means a day other than a Saturday, Sunday or a day that is a statutory holiday in (a) Boston, Massachusetts, (b) United Kingdom or (c) the jurisdiction where the relevant Manufacturing Site is located;

“Calendar Quarter” means, with respect to any given calendar year, the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 or December 31; provided, however, that (a) the first Calendar Quarter of the Term shall extend from the Effective Date to the end of the first complete Calendar Quarter thereafter and (b) the last Calendar Quarter of the Term shall end upon the effective date of expiration or termination of this Agreement;

[* * *];

“Capital Equipment Agreement” means a separate agreement that the Parties may enter into that will address responsibility for the purchase of capital equipment and facility modifications that may be required to perform the Manufacturing Services under a particular Product Agreement;

“cGMPs” means, as applicable, current good manufacturing practices as described in:

	
 
	
(a)
	
Parts 210 and 211 of Title 21 of the United States' Code of Federal Regulations; 

	
 
	
(b)
	
EC Directive 2003/94/EC; and

	
 
	
(c)
	
Division 2 of Part C of the Food and Drug Regulations (Canada);

together with the latest Health Canada, FDA and EMA guidance documents pertaining to manufacturing and quality control practice, all as updated, amended and revised from time to time;

“Client Intellectual Property” means Intellectual Property [* * *];

“Client Property” has the meaning specified in Section 8.3(a)(vi); 

“Client Representatives” has the meaning specified in Section 10.3(a);

“Client-Supplied Components” means those Components to be supplied by Client or that have been supplied by Client;

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Master Manufacturing Services Agreement 

 

“Components” means, collectively, all packaging components, raw materials, ingredients, and other materials (including labels, product inserts and other labelling for the Products) required to manufacture the Products in accordance with the Specifications, other than the Active Materials;

“Confidential Information” has the meaning specified in Section 11.1;

[* * *];  

“CTD” has the meaning specified in Section 7.8(c);

“Deficiencies” have the meaning specified in Section 7.8(d);

“Deficiency Notice” has the meaning specified in Section 6.1(a);

“Delivery Date” means the date scheduled for shipment of Product under a Firm Order as set forth in Section 5.1(d);

“Disclosing Party” has the meaning specified in Section 11.1;

“EMA” means the European Medicines Agency; 

“FDA” means the United States Food and Drug Administration; 

“Firm Orders” have the meaning specified in Section 5.1(c);

“Force Majeure Event” has the meaning specified in Section 13.8;

“Gross Negligence” means [* * *];

;

“GST” has the meaning specified in Section 13.17(a)(iii);

“Health Canada” means the section of the Canadian Government known as Health Canada and includes, among other departments, the Therapeutic Products Directorate and the Health Products and Food Branch Inspectorate;

[* * *];

“Initial Product Term” has the meaning specified in Section 8.1;

“Initial Term” has the meaning specified in Section 8.1;

“Intellectual Property” includes, without limitation, rights in patents, patent applications, formulae, trademarks, trademark applications, trade-names, Inventions, copyrights, industrial designs, trade secrets, and know how; 

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Master Manufacturing Services Agreement 

 

“Invention” means information about any innovation, improvement, development, discovery, computer program, device, trade secret, method, know-how, process, technique or the like, whether or not written or otherwise fixed in any form or medium, regardless of the media on which it is contained and whether or not patentable or copyrightable; 

“Inventory” means all inventories of Components and work-in-process produced or held by Patheon for the manufacture of the Products but, for greater certainty, does not include the Active Materials;

“Laws” means all laws, statutes, ordinances, regulations, rules, by-laws, judgments, decrees or orders of any Authority;

“Long Term Forecast” has the meaning specified in Section 5.1(a); 

“Manufacturing Services” means the manufacturing, quality control, quality assurance, stability testing, packaging, and related services, as set forth in this Agreement, required to manufacture Product or Products using the Active Materials, Components, and Bill Back Items;

“Manufacturing Site” means the facility owned and operated by Patheon or an Affiliate of Patheon where the Manufacturing Services will be performed as identified in a Product Agreement; 

“Materials” means all Components and Bill Back Items required to manufacture the Products in accordance with the Specifications, other than the Active Materials;

[* * *];

[* * *];

“Obsolete Stock” has the meaning specified in Section 5.2(b); 

“PAI” has the meaning specified in Section 7.5;

[* * *]; 

“Patheon Intellectual Property” means Intellectual Property [* * *];

“Patheon Representatives” has the meaning specified in Section 10.4(a);

“Price” means the fees to be charged by Patheon for performing the Manufacturing Services, and includes the cost of Components (other than Client-Supplied Components), certain cost items as set forth in a Product Agreement on Schedule B, and annual stability testing fees as set forth in a Product Agreement on Schedule C;

“Product(s)” means the product(s) listed in a Product Agreement on Schedule A;

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Master Manufacturing Services Agreement 

 

“Product Agreement” means the agreement between Patheon and Client issued under this Agreement in the form set forth in Appendix 1 (including Schedules A to D) under which Patheon will perform Manufacturing Services at a particular Manufacturing Site;

“Product Claims” have the meaning specified in Section 6.3(c);  

“Quality Agreement” means the agreement between the Parties entering into a Product Agreement, or between the applicable Affiliate of Patheon and Client if the Manufacturing Services are subcontracted to such Affiliate by Patheon, that sets out the quality assurance standards and the Specifications for the Manufacturing Services to be performed by Patheon for Client;

“Recall” has the meaning specified in Section 6.2(a);

“Recipient” has the meaning specified in Section 11.1;

“Regulatory Approval” has the meaning specified in Section 7.8(a);

“Regulatory Authority” means the FDA, EMA, and Health Canada and any other foreign regulatory agencies competent to grant marketing approvals for pharmaceutical products including the Products in the Territory;

“Remediation Period” has the meaning specified in Section 8.2(a);

“Representatives” means a Party’s directors, officers, employees, advisers, agents, consultants, subcontractors, service partners, professional advisors, or representatives;

[* * *];

[* * *];

“Specifications” means the file, for each Product, which is given by Client to Patheon in accordance with the procedures listed in a Product Agreement on Schedule A and which contains documents relating to each Product, including, without limitation:

	
 
	
(a)
	
specifications for Active Materials and Components;

	
 
	
(b)
	
manufacturing specifications, directions, and processes;

	
 
	
(c)
	
storage requirements; 

	
 
	
(d)
	
all environmental, health and safety information for each Product including material safety data sheets; and

	
 
	
(e)
	
the finished Product specifications, packaging specifications and shipping requirements for each Product; 

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Master Manufacturing Services Agreement 

 

all as updated, amended and revised from time to time by Client in accordance with the terms of this Agreement;

“Supply and Quality Committee” has the meaning specified in Section 13.20;

[* * *];

[* * *];

[* * *];

“Technical Dispute” has the meaning specified in Section 12.2;

“Term” has the meaning specified in Section 8.1;

“Territory” means the geographic area described in a Product Agreement where Products manufactured by Patheon will be distributed by Client, as may be mutually extended by the Parties in writing from time to time (subject to agreement between the Parties on any revised costs of Manufacturing Services relating to provision of Manufacturing Services for the additional Territory or Territories); 

“Third Party Rights” means the Intellectual Property of any third party; 

“VAT” has the meaning specified in Section 13.17(d); 

“Year” means in the first year of this Agreement or in the first year of a Product Agreement, the period from the Effective Date up to and including December 31 of the same calendar year, and thereafter will mean a calendar year;

[* * *]; and

[* * *].

1.4Currency.  

Unless otherwise agreed in a Product Agreement, all monetary amounts expressed in this Agreement are in [* * *].

1.5Sections and Headings.  

The division of this Agreement into Articles, Sections, Subsections, an Appendix, Schedules and Exhibits and the insertion of headings are for convenience of reference only and will not affect the interpretation of this Agreement.  Unless otherwise indicated, any reference in this Agreement to a Section, Appendix, Schedule or Exhibit refers to the specified Section, Appendix, Schedule or Exhibit to this Agreement.  In this Agreement, the terms "this Agreement", "hereof", "herein", "hereunder" and similar expressions refer to this Agreement as a whole and not to any particular part, Section, Appendix, Schedule or Exhibit of this Agreement.

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Master Manufacturing Services Agreement 

 

1.6Singular Terms.

Except as otherwise expressly stated or unless the context otherwise requires, all references to the singular will include the plural and vice versa.

1.7Appendix 1, Schedules and Exhibits.

Appendix 1 (including the Schedules thereto) and the following Exhibits are attached to, incorporated in, and form part of this Agreement:

	
 
	
Appendix 1
	
-Form of Product Agreement (Including Schedules A to D) 

	
 
	
Exhibit A
	
-Technical Dispute Resolution

	
 
	
Exhibit B
	
-Quarterly Active Materials Inventory Report

	
 
	
Exhibit C
	
- [* * *]

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Master Manufacturing Services Agreement 

 

ARTICLE 2 

PATHEON'S MANUFACTURING services

2.1Manufacturing Services.

Patheon will perform the Manufacturing Services for the Territory for the Price specified in a Product Agreement in Schedules B and C to manufacture Products for Client.  Schedule B to a Product Agreement sets forth a list of cost items that are included in the Price for Products; all cost items that are not included in the Price are subject to additional fees to be paid by Client.  The fees set out in Schedules B and C to a Product Agreement may be amended as set forth in ARTICLE 4. Patheon may change the Manufacturing Site for the Products only with the prior written consent of Client, this consent not to be unreasonably withheld. In performing the Manufacturing Services, Patheon and Client agree that:

	
 
	
(a)
	
Conversion of Active Materials and Components.  Patheon will convert Active Materials and Components into Product.

	
 
	
(b)
	
Quality Control and Quality Assurance.  Patheon will perform the quality control and quality assurance testing specified in the Quality Agreement.  Batch review and release to Client will be the responsibility of Patheon’s quality assurance group.  Patheon will perform its batch review and release responsibilities in accordance with Patheon’s standard operating procedures.  Each time Patheon ships Products to Client, it will give Client a certificate of analysis and certificate of compliance including a statement that the batch has been manufactured and tested in accordance with Specifications and cGMPs.  Client will have sole responsibility for the release of Products to the market.  The form and style of batch documents, including, but not limited to, batch production records, lot packaging records, equipment set up control, operating parameters, and data printouts, raw material data, and laboratory notebooks are the exclusive property of Patheon.  Specific Product related information contained in those batch documents is Client property. 

	
 
	
(c)
	
Components.  Patheon will purchase all Components (with the exception of Client-Supplied Components) and will test all Components (including Client-Supplied Components) at Patheon's expense and as required by the Specifications.  Agreed Component Specifications shall be established in writing.  Patheon shall only perform I.D. testing unless otherwise agreed in writing.

	
 
	
(d)
	
Stability Testing.  Patheon will conduct stability testing on the Products in accordance with the protocols set out in the Specifications for the separate fees and during the time periods set out in Schedule C to a Product Agreement.  Patheon will not make any changes to these testing protocols without prior written approval from Client.  If a confirmed stability test failure occurs, Patheon will notify Client within one Business Day, after which Patheon and Client will jointly determine the proceedings and methods to be undertaken to investigate the cause of the failure[* * *].  Patheon will give Client all stability test data and results at Client’s request.  

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Master Manufacturing Services Agreement 

 

	
 
	
(e)
	
Packaging and Artwork.  Patheon will package the Products in accordance with the Specifications.  Client will be responsible for the cost of artwork development.  Patheon will determine and imprint the batch numbers and expiration dates for each Product shipped.  The batch numbers and expiration dates will be affixed on the Products and on the shipping carton of each Product as outlined in the Specifications and as required by cGMPs.  Patheon will ensure that the final package for each Product complies with the agreed Specification.   Client may, in its sole discretion, make changes to labels, product inserts, and other packaging for the Products.  Those changes will be submitted by Client to all applicable Regulatory Authorities and other third parties responsible for the approval of the Products.  Client will be responsible for the cost of labelling obsolescence when changes occur, as contemplated in Section 4.5.  Patheon's name will not appear on the label or anywhere else on the Products unless: (i) required by any Applicable Laws; or (ii) Patheon consents in writing to the use of its name. At least [* * *] prior to the Delivery Date of Product for which new or modified artwork is required, Client will provide at no cost to Patheon, final camera ready artwork for all packaging Components to be used in the manufacture of the Product that meet the Specifications.  For the avoidance of doubt, the Parties acknowledge and agree that, as between the Parties, Client will be responsible for complying with any and all regulatory requirements for the labeling of the Product.

	
 
	
(f)
	
Active Materials and Client-Supplied Components.  At least [* * *] before the scheduled production date (such date to be communicated to Client by Patheon), Client will deliver the Active Materials and any Client-Supplied Components to [* * *], at no cost to Patheon, with any VAT paid by Client, in sufficient quantity to enable Patheon to manufacture the desired quantities of Product and to ship Product on the Delivery Date.  If the Active Materials and/or Client-Supplied Components are not received [* * *] before the scheduled production date, Patheon may delay the shipment of Product by the same number of days as the delay in receipt of the Active Materials and/or Client-Supplied Components.  But if Patheon is unable, despite using commercially reasonable efforts, to manufacture Product to meet this new shipment date due to prior third party production commitments, Patheon may delay the shipment until a later date as agreed to by the Parties.  All shipments of Active Material will be accompanied by certificate(s) of analysis from the Active Material manufacturer and Client, confirming the identity and purity of the Active Materials and its compliance with the Active Material Specifications. For Active Materials or Client-Supplied Components which may be subject to import or export, Client agrees that its vendors and carriers will comply with applicable requirements of the U.S. Customs and Border Protection Service and the Customs Trade Partnership Against Terrorism.  On the date of shipment, the API or Client-Supplied Components will conform to their specifications that Client has given to Patheon and the API and Client-Supplied Components will be adequately contained, packaged, and labeled and will conform to the affirmations of fact on the container. 

	
 
	
(g)
	
Bill Back Items.  The Bill Back Items will be mutually agreed by the Parties and will be charged to Client at [* * *].

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Master Manufacturing Services Agreement 

 

	
 
	
(h)
	
Validation Activities (if applicable).  Upon Client’s request, Patheon may assist in the development and approval of the validation protocols for analytical methods and manufacturing procedures (including packaging procedures) for the Products.  The fees for this service are not included in the Price and will be set out separately in Schedule C to a Product Agreement. 

	
 
	
(i)
	
Additional Services.  If Client requests services other than those expressly set forth herein or in any Product Agreement (such as qualification of a new packaging configuration or shipping studies, or validation of alternative batch sizes), Patheon will provide a good faith and reasonable written quote (based on Patheon’s then-current commercial rates for such services) of the fee for the additional services and Client will advise Patheon whether it wishes to have the additional services performed by Patheon. The scope of work and fees will be set forth in a separate agreement signed by the Parties.  The terms and conditions of this Agreement will apply to these services.

2.2Active Material Yield.  

	
 
	
(a)
	
Reporting.  Patheon will give Client a quarterly inventory report of the Active Materials held by Patheon using the inventory report form set out in Exhibit B, which will contain the following information for the Calendar Quarter:

Quantity Received:  The total quantity of Active Materials that complies with the Specifications and is received at the Manufacturing Site during the applicable period. 

Quantity Dispensed:  The total quantity of Active Materials dispensed at the Manufacturing Site during the applicable period.  The Quantity Dispensed is calculated by adding the Quantity Received to the inventory of Active Materials that complies with the Specifications held at the beginning of the applicable period, less the inventory of Active Materials that complies with the Specifications held at the end of the period.  The Quantity Dispensed will only include Active Materials received and dispensed in commercial manufacturing of Products, including Active Materials lost in the warehouse prior to and during dispensing, and will not include any (i) Active Materials that must be retained by Patheon as samples, (ii) Active Materials contained in Product that must be retained as samples, (iii) Active Materials used in testing (if applicable), and (iv) Active Materials received or dispensed in technical transfer activities or development activities during the applicable period, including without limitation, any regulatory, stability, validation or test batches manufactured during the applicable period.

Quantity Converted:  The total amount of Active Materials contained in the Products manufactured with the Quantity Dispensed (including any additional Products produced in accordance with Section 6.3(a) or 6.3(b)), delivered by Patheon, and not rejected, recalled or returned in accordance with Section 6.1 or 6.2 because of Patheon’s failure to perform the Manufacturing Services in accordance with Specifications, cGMPs, and Applicable Laws.  

[* * *]

	
 
	
(b)
	
[* * *]

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Master Manufacturing Services Agreement 

 

	
 
	
(c)
	
[* * *]

	
 
	
(d)
	
[* * *]

	
 
	
(e)
	
[* * *]

	
 
	
(f)
	
[* * *]

ARTICLE 3 

CLIENT'S OBLIGATIONS

3.1Payment.

Client will pay Patheon for performing the Manufacturing Services according to the Prices specified in Schedules B and C in a Product Agreement. These Prices may be subject to adjustment under other parts of this Agreement. Client will also pay Patheon for any Bill Back Items agreed upon by the Parties pursuant to Section 2.1(g).

3.2Active Materials and Qualification of Additional Sources of Supply.

	
 
	
(a)
	
Client will at its sole cost and expense deliver the Active Materials to Patheon in accordance with Section 2.1(f). If applicable, Patheon and Client will reasonably cooperate to permit the import of the Active Materials to the Manufacturing Site. Client’s obligation will include obtaining the proper release of the Active Materials from the applicable Customs Agency and Regulatory Authority. Client or Client’s designated broker will be the “Importer of Record” for Active Materials imported to the Manufacturing Site. The Active Materials will be held by Patheon on behalf of Client as set forth in this Agreement.  Title to the Active Materials will at all times remain the property of Client.  Any Active Materials received by Patheon will only be used by Patheon to perform the Manufacturing Services for Client. [* * *]

	
 
	
(b)
	
If Client asks Patheon to qualify an additional source for the Active Material or any Component, Patheon shall agree, pending an agreed-upon scope of work as discussed below, to evaluate the Active Material or Component to be supplied by the additional source to determine if it is suitable for use in the Product. The Parties will agree on the scope of work to be performed by Patheon at Client’s cost. For an Active Material, this work at a minimum will include: (i) laboratory testing to confirm the Active Material meets existing Specifications; (ii) manufacture of an experimental batch of Product that will be placed on three months accelerated stability; and (iii) manufacture of three full-scale validation batches that will be placed on concurrent stability (one batch may be the registration batch if manufactured at full scale). 

	
 
	
(c)
	
Patheon will promptly advise Client if it encounters supply problems, including delays and/or delivery of non-conforming Active Material or Components from a Client designated additional source. Patheon and Client will cooperate to reduce or eliminate any supply problems from these additional sources of supply. [* * *]

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Master Manufacturing Services Agreement 

 

ARTICLE 4 

[CONVERSION fees AND] COMPONENT COSTS

4.1First Year Pricing.

The Price for the first Year will be listed in Schedules B and C in a Product Agreement and will be subject to the adjustments set forth in Sections 4.2 and 4.4. [* * *]

4.2Price Adjustments – Subsequent Years’ Pricing.

After the first Year of the Product Agreement, Patheon may adjust the Price effective January 1 of each Year as follows:

	
 
	
(a)
	
[* * *]

	
 
	
(b)
	
[* * *]

	
 
	
(c)
	
[* * *]

	
 
	
(d)
	
Tier Pricing (if applicable). The pricing in Schedule B of a Product Agreement is set forth in Annual Volume tiers based upon Client’s volume forecasts under Section 5.1.  Client will be invoiced during the Year for the unit price set forth in the Annual Volume tier based on the 18-month forecast provided in September of the previous Year.  Within 30 days after the end of each Year or of the termination of the Agreement, Patheon will send Client a reconciliation of the actual volume of Product ordered by Client during the Year with the pricing tiers.  If Client has overpaid during the Year, Patheon will issue a credit to Client for the amount of the overpayment within 60 days after the end of the Year or will issue payment to Client for the overpayment within 60 days after the termination of the Agreement.  If Client has underpaid during the Year, Patheon will issue an invoice to Client under Section 5.5 for the amount of the underpayment within 60 days after the end of the Year or termination of the Agreement.  If Client disagrees with the reconciliation, the Parties will work in good faith to resolve the disagreement amicably. If the Parties are unable to resolve the disagreement within 30 days, the matter will be handled under Section 12.1.  For avoidance of doubt, this Section 4.2(d) will not be applicable to Client’s Injectable Omadacycline Product.

	
 
	
(e)
	
[* * *]

	
 
	
(f)
	
For a Price adjustment under this Section 4.2 Patheon will deliver to Client a revised Schedule B to the Product Agreement and budgetary pricing information, adjusted Component costs or other documents reasonably sufficient to demonstrate that a Price adjustment is justified.  [* * *]

	
 
	
(g)
	
[* * *]  

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4.3[* * *]

4.4Price Adjustments – Current Year Pricing.

During any Year, the Prices set out in Schedule B of a Product Agreement will be adjusted as follows:

	
 
	
(a)
	
[* * *]

	
 
	
(b)
	
For a Price adjustment under this Section 4.4, Patheon will deliver to Client a revised Schedule B to the Product Agreement and budgetary pricing information, adjusted Component costs or other documents reasonably sufficient to demonstrate that a Price adjustment is justified.  [* * *]

4.5[* * *]

4.6Multi-Country Packaging Requirements.  

If Client decides to have Patheon perform Manufacturing Services for the Product for countries outside the Territory, then Client will inform Patheon of the packaging requirements for each new country and Patheon will prepare a quotation for consideration by Client of any additional costs for Components (other than Client-Supplied Components) and the change-over fees for the Product destined for each new country.  The agreed additional packaging requirements and related packaging costs and change over fees will be set out in a written amendment to the Product Agreement.

ARTICLE 5 

ORDERS, SHIPMENT, INVOICING, PAYMENT

5.1Orders and Forecasts.  

	
 
	
(a)
	
Long Term Forecast.  When each Product Agreement is executed, Client will give Patheon a non-binding [* * *] forecast of Client’s volume requirements for the Product for each Year during the term of the Product Agreement (the “Long Term Forecast”).  The Long Term Forecast will thereafter be updated every [* * *] during the Initial Product Term.  If Patheon is unable to accommodate any portion of the Long Term Forecast, it will notify Client and the Parties will agree on any revisions to the forecast.

	
 
	
(b)
	
Rolling [* * *] Forecast.  When each Product Agreement is executed, Client will give Patheon a non-binding [* * *] forecast of the volume of Product that Client expects to order in the first [* * *] of commercial manufacture of the Product.  This forecast will then be updated by Client on or before [* * *] on a rolling forward basis. Client will update the forecast forthwith if it determines that the volumes estimated in the most recent forecast have changed by more than [* * *]. The most recent [* * *] forecast will prevail.  These forecasts should be reasonably consistent with the Long Term Forecast.  

	
 
	
(c)
	
Firm Orders.  On a rolling basis during the term of the Product Agreement, Client will issue an updated [* * *] on or before [* * *]. This forecast will start on the first day of the next 

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month. Unless otherwise agreed in the Product Agreement, the first [* * *] of this updated forecast will be considered binding firm orders.  For the avoidance of doubt, Patheon shall maintain capacity sufficient for Patheon to manufacture and supply the Product in accordance with the first [* * *] of the then-current rolling [* * *] forecast.  Concurrent with the [* * *] forecast, Client will issue a new firm written order in the form of a purchase order (“Firm Order”) by Client to purchase and, when accepted by Patheon, for Patheon to manufacture and deliver the agreed quantity of the Products. The Delivery Date will not be less than [* * *] following the date that such purchase order is received. Firm Orders submitted to Patheon will specify Client's purchase order number, quantities by Product type, monthly delivery schedule, and any other elements necessary to ensure the timely manufacture and shipment of the Products.  The quantities of Products ordered in those written orders will be firm and binding on Client and may not be reduced by Client.  Expedited Firm Orders will be subject to additional fees.  

	
 
	
(d)
	
Acceptance of Firm Order. Patheon will accept Firm Orders by sending an acknowledgement to Client within [* * *] of its receipt of the Firm Order.  The acknowledgement will include, subject to confirmation from Client, the Delivery Date for the Product ordered or delivery month for any Firm Orders that do not relate to the first [* * *] of the [* * *] forecast. The Delivery Date may be amended by agreement of the Parties or as set forth in Section 2.1(f).  If Patheon fails to acknowledge receipt of a Firm Order within the [* * *] period, the Firm Order will be deemed to have been accepted by Patheon.  Patheon shall notify Client as soon as is reasonably practicable (and in any event not later than [* * *] from the date Patheon becomes aware) of any event which materially impacts Patheon’s ability to supply Product in accordance with a Firm Order and Patheon will consider in good faith any reasonable suggestion of Client to mitigate the delay.

	
 
	
(e)
	
Cancellation of a Firm Order.  If Client cancels a Firm Order, [* * *].

	
 
	
(f)
	
[* * *]

	
 
	
(g)
	
Controlled Substance Quota Requirements (if applicable).  Client will give Patheon the information set forth below for obtaining any required DEA or equivalent agency quotas needed to perform the Manufacturing Services.  Patheon will be responsible for routine management of DEA quota information in accordance with DEA regulations. Patheon and Client will cooperate to communicate the information and to assist each other in DEA information requirements related to the Product as follows: [* * *].

5.2Reliance by Patheon.

	
 
	
(a)
	
Client understands and acknowledges that Patheon will rely on the Firm Orders and rolling forecasts submitted under Section 5.1(c) in ordering the Components (other than Client-Supplied Components) required to meet the Firm Orders.  In addition, Client understands that to ensure an orderly supply of the Components, Patheon may want to purchase the Components in sufficient volumes to meet the production requirements for Products during part or all of the forecasted periods referred to in Section 5.1(c) or to meet the production requirements of any longer period agreed to by Patheon and Client.  Accordingly, Client authorizes Patheon to purchase Components to satisfy the Manufacturing Services requirements for Products for the first [six months] contemplated in the most recent forecast given by Client under Section 5.1(c).  Patheon may make other purchases of 

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Components to meet Manufacturing Services requirements for longer periods if agreed to in writing by the Parties.  Client will give Patheon written authorization to order Components for any launch quantities of Product requested by Client which will be considered a Firm Order when accepted by Patheon.  

	
 
	
(b)
	
[* * *]

	
 
	
(c)
	
[* * *]

5.3[* * *]

5.4Delivery and Shipping.

Delivery of Products will be made [* * *] unless otherwise agreed in a Product Agreement.   Subject to Section 8.3(a)(vi), risk of loss or of damage to Products will [* * *].  Products will be transported in accordance with the Specifications. 

5.5Invoices and Payment.

Invoices will be sent by email to the email address given by Client to Patheon in writing.  Invoices will be issued when the Product is released by Patheon.  Patheon will also submit to Client, with each shipment of Products, a duplicate copy of the invoice covering the shipment.  Patheon will also give Client an invoice covering any Inventory or Components which are to be purchased by Client under Section 5.2 of this Agreement.  Each invoice will, to the extent applicable, identify Client’s Manufacturing Services purchase order number, Product numbers, names and quantities, unit price, freight charges, and the total amount to be paid by Client.  Client will pay all invoices within [* * *]; provided that if any portion of an invoice is disputed, Client will pay Patheon for the undisputed amount and the Parties will use good faith efforts to reconcile the disputed amount as soon as practicable.  Interest on undisputed past due amounts will accrue at [* * *]. 

ARTICLE 6 

PRODUCT CLAIMS AND RECALLS

6.1Product Claims.

	
 
	
(a)
	
Product Claims.  Client has the right to reject any portion of any shipment of Product that was not manufactured in accordance with the Specifications, cGMPs, or Applicable Laws, without invalidating any remainder of the shipment.  Client will inspect the Product manufactured by Patheon upon receipt and will give Patheon written notice (a “Deficiency Notice”) of all claims for Product that was not manufactured in accordance with the Specifications, cGMPs, or Applicable Laws, within [* * *].  If Client fails to give Patheon the Deficiency Notice within the applicable [* * *] period, then the delivery will be deemed to have been accepted by Client on the [* * *].  Patheon will have no liability for any deficiency for which it has not received notice within the applicable [* * *] period.

	
 
	
(b)
	
Determination of Deficiency.  Upon receipt of a Deficiency Notice, Patheon will have [* * *] to advise Client by notice in writing that it disagrees with the contents of the Deficiency 

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Notice.  If Client and Patheon fail to agree within [* * *] after Patheon's notice to Client as to whether any Product identified in the Deficiency Notice was not manufactured in accordance with the Specifications, cGMPs, or Applicable Laws, the Parties will proceed as follows: [* * *].

	
 
	
(c)
	
Shortages and Price Disputes.  Claims for shortages in the amount of Product shipped by Patheon or a Price dispute will be initially dealt with [* * *]. 

	
 
	
(d)
	
Product Rejection for Finished Product Specification Failure. Internal process specifications will be defined and agreed upon.  If after a full investigation as set forth in Section 6.1(b), it is determined that Patheon manufactured Product in accordance with Specifications, Applicable Law and cGMPs (including the agreed upon process specifications, the batch production record, and Patheon’s standard operating procedures for manufacturing), and a batch or portion of batch of Product does not meet a finished Product Specification, [* * *].

6.2Product Recalls and Returns.

	
 
	
(a)
	
Records and Notice.  Patheon and Client will each maintain records necessary to permit a Recall of any Product delivered to Client or customers of Client.  Each Party will promptly notify the other by telephone (to be confirmed in writing) of any information which might affect the marketability, safety or effectiveness of the Product or which might result in the Recall or seizure of the Product.  Upon receiving this notice or upon this discovery, each Party will stop making any further shipments of any Product in its possession or control until a decision has been made whether a Recall or some other corrective action is necessary.  The decision to initiate a Recall or to take some other corrective action, if any, will be made and implemented by Client in its sole discretion.  “Recall” will mean any action (i) by Client to recover title to or possession of quantities of the Product sold or shipped to third parties (including, without limitation, the voluntary withdrawal of Product from the market); (ii) by any Regulatory Authorities to detain or destroy any of the Product; or (iii) by either Party to refrain from selling or shipping quantities of the Product to third parties which would be subject to an action described in clause (i) or (ii) of this sentence if sold or shipped.  

	
 
	
(b)
	
Recalls.  If (i) any Regulatory Authority issues a directive, order or, following the issuance of a safety warning or alert about a Product, a written request that any Product be Recalled, (ii) a court of competent jurisdiction orders a Recall, or (iii) Client determines that any Product should be Recalled or that a "Dear Doctor" letter is required relating the restrictions on the use of any Product, Patheon will co-operate as reasonably required by Client, having regard to all cGMPs and Applicable Laws.

	
 
	
(c)
	
Product Returns.  Client will have the responsibility for handling customer returns of the Product.  Patheon will give Client any assistance that Client may reasonably require to handle the returns.

6.3Patheon’s Responsibility for Defective and Recalled Products.

	
 
	
(a)
	
Defective Product.  If Client rejects Product under Section 6.1 and the deficiency is determined to have arisen from [* * *].

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(b)
	
Recalled Product.  If a Recall or return results from, or arises out of, [* * *].  

	
 
	
(c)
	
[* * *] 

	
 
	
(d)
	
[* * *]

6.4Disposition of Defective or Recalled Products.

Client will not dispose of any damaged, defective, returned, or Recalled Products for which it intends to assert a claim against Patheon without Patheon’s prior written authorization to do so.  Alternatively, Patheon may instruct Client to return the Products to Patheon. [* * *]

6.5Healthcare Provider or Patient Questions and Complaints.

Client will have the sole responsibility for responding to questions and complaints from its customers.  Questions or complaints received by Patheon from Client's customers, healthcare providers or patients will be promptly referred to Client.  Patheon will co-operate as reasonably required to allow Client to determine the cause of and resolve any questions and complaints.  This assistance will include follow-up investigations, including testing.  In addition, Patheon will give Client all agreed upon information that will enable Client to respond properly to questions or complaints about the Product as set forth in the Quality Agreement.  [* * *]

6.6[* * *]

ARTICLE 7 

CO-OPERATION

7.1Quarterly Review.

Each Party will forthwith upon execution of this Agreement appoint one of its employees to be a relationship manager responsible for liaison between the Parties, which employee may be a member of the Supply and Quality Committee.  The relationship managers will meet not less than once per Calendar Quarter, including at Supply and Quality Committee meetings, to review the current status of the business relationship and manage any issues that have arisen.

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7.2Governmental Agencies.

Subject to Section 7.8, each Party may communicate with any governmental agency, including but not limited to governmental agencies responsible for granting Regulatory Approval for the Products, regarding the Products if, in the opinion of that Party's counsel, the communication is necessary to comply with the terms of this Agreement or the requirements of any law, governmental order or regulation.  Unless, in the reasonable opinion of its counsel, there is a prohibition under one or more Applicable Laws against doing so, either Party will, where relevant, permit the other Party to accompany and take part in any communications with the agency, and to receive copies of all communications from the agency.  Subject to Section 7.5, Patheon will lead all communications relating to the Manufacturing Site and Client will lead all Product-specific communications.  Each Party will keep the other informed as appropriate. 

7.3Records and Accounting by Patheon.

Patheon will keep records of the manufacture, testing, and shipping of the Products, and retain samples of the Products as are necessary to comply with manufacturing regulatory requirements applicable to Patheon, as well as to assist with resolving Product complaints and other similar investigations.  Unless otherwise agreed to in the Quality Agreement, copies of the records and samples will be retained for [* * *], or longer if required by law or regulation, following which time Client will be contacted concerning the delivery and destruction of the documents and/or samples of Products.  [* * *]  Client is responsible for retaining samples of the Products necessary to comply with the legal/regulatory requirements applicable to Client.

7.4Inspection.

Client may inspect Patheon reports and records relating to this Agreement, the Product Agreement or the Quality Agreement during normal business hours and with reasonable advance notice, but a Patheon representative must be present during the inspection.

7.5Access.

Patheon will give Client reasonable access at agreed times to the areas of the Manufacturing Site in which the Products are manufactured, stored, handled, or shipped to permit Client to verify that the Manufacturing Services are being performed in accordance with the Specifications, cGMPs, and Applicable Laws.  [* * *]  The right of access set forth in Section 7.4 and this Section 7.5 will not include a right to access or inspect Patheon’s financial records.  [* * *]

7.6Notification of Regulatory Inspections.

Each Party will notify the other within [* * *] of any inspections by any governmental agency at the Manufacturing Site specifically involving the Products.  Patheon will also notify Client of receipt of any form 483s or warning letters or any other significant regulatory action which Patheon’s quality assurance group determines in good faith could impact the regulatory status or supply of the Products. 

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7.7Reports.

Upon request, Patheon will supply on an annual basis a copy of the Annual Product Review Report which includes all Product data in its control, including release test results, complaint test results, and all investigations (in manufacturing, testing, and storage), that Client reasonably requires in order to complete any filing under any applicable regulatory regime, including any Annual Report that Client is required to file with the FDA.  Any additional data or report requested by Client beyond the scope of cGMPs and customary FDA requirements, including Continuous Process Verification data, will be subject to an additional reasonable fee to be agreed upon in good faith between Patheon and Client.

7.8Regulatory Filings.

	
 
	
(a)
	
Regulatory Authority.  Client will have the sole responsibility at Client’s expense for filing all documents with all Regulatory Authorities and taking any other actions that may be required for the receipt and/or maintenance of Regulatory Authority approval for the commercial manufacture, distribution and sale of the Products (“Regulatory Approval”) [* * *].  Patheon will assist Client, to the extent consistent with Patheon’s obligations under this agreement so as to obtain Regulatory Authority approval for the commercial manufacture, distribution and sale of all Products as quickly as reasonably possible. 

	
 
	
(b)
	
Verification of Data.  Prior to filing any documents with any Regulatory Authority that incorporate data generated by Patheon, Client will give Patheon a copy of the documents incorporating this data to give Patheon the opportunity to verify the accuracy and regulatory validity of those documents as they relate to Patheon generated data.  The Parties agree that Patheon shall have [* * *].  Any review by Patheon under this Section 7.8(b) shall be at no cost to Client.

	
 
	
(c)
	
Verification of CTD.  Prior to filing with any Regulatory Authority any documentation which is or is equivalent to the Quality Module (Drug Product Section) of the Common Technical Document (all such documentation herein referred to as “CTD”) related to any Marketing Authorization, such as a US New Drug Application, US Abbreviated New Drug Application, US Biologics License Application, or EU Marketing Authorization Application, Client will give Patheon a copy of the CTD in order for Patheon to verify that the CTD accurately describes the validation or scale-up work that Patheon has performed and the manufacturing processes that Patheon will perform under this Agreement.  The Parties agree that Patheon shall have [* * *]. Client will give Patheon copies of all relevant filings at the time of submission which contain CTD information regarding the Product.  Any review by Patheon under this Section 7.8(c) shall be at no cost to Client.  

	
 
	
(d)
	
Deficiencies.  If, in Patheon’s sole discretion, acting reasonably, Patheon determines that any of the information given by Client under clauses (b) and (c) above is inaccurate or deficient in any manner whatsoever (the "Deficiencies"), Patheon will notify Client in writing of the Deficiencies.  The Parties will work together in good faith to have any Deficiencies resolved prior to the date of filing of the relevant application and in any event before any PAI or before the Product is placed on the market if a PAI is not performed.

	
 
	
(e)
	
Client Responsibility.  In reviewing the documents referred to in clause (b) above, Patheon’s role will be limited to verifying the accuracy of the description of the work undertaken or to be undertaken by Patheon.  Subject to the foregoing, Patheon will not 

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assume any responsibility for the accuracy of any application for receipt of an approval by a Regulatory Authority.  Client is solely responsible for the preparation and filing of the application for approval by the Regulatory Authority and any relevant costs will be borne by Client.

	
 
	
(f)
	
Inspection by Regulatory Authorities.  If Client does not give Patheon the documents requested under subsections (b) and (c) above within the time specified and if Patheon reasonably believes that Patheon’s standing with a Regulatory Authority may be jeopardized,  Patheon may, in its sole discretion, delay or postpone any inspection by the Regulatory Authority until Patheon has reviewed the requested documents; provided that such review shall take no longer than [* * *]; and until any deficiencies in the documentation relating to Patheon’s work are remedied. Any review by Patheon under this Section 7.8(f) shall be at no cost to Client.

	
 
	
(g)
	
Pharmacovigilance.  Client will be responsible, at its expense, for all pharmacovigilance obligations for the Products pursuant to Applicable Laws.  Unless required by Applicable Law, neither Party will be obliged to exchange with the other Party any information or data which it compiles pursuant to pharmacovigilance obligations or activities.

	
 
	
(h)
	
No Patheon Responsibility.  Subject to Section 7.8(e), Patheon will not assume any responsibility for the accuracy of any application for Regulatory Approval.  [* * *]

7.9Technology Transfer. 

Patheon shall provide reasonable support and documentation to Client to enable Client to perform a technology transfer of the Product manufacturing process to a third party manufacturer who is to be a secondary source of supply.  [* * *]

ARTICLE 8 

TERM AND TERMINATION

8.1Initial Term.

This Agreement will become effective as of the Effective Date and will continue for [* * *] from the Effective Date (the "Initial Term"), unless terminated earlier by one of the Parties in accordance herewith.  This Agreement will automatically renew after the Initial Term for successive terms of [* * *] each if there is a Product Agreement in effect, unless either Party gives written notice to the other Party of its intention to terminate this Agreement at least [* * *] prior to the end of the then-current term, including the Initial Term (the Initial Term and any such renewal terms, collectively, the “Term”). In any event, the legal terms and conditions of this Agreement will continue to govern any Product Agreement in effect as provided in Section 1.2. Each Product Agreement will have an initial term from the Effective Date of the Product Agreement until [* * *] (each, an “Initial Product Term”). Product Agreements will automatically renew after the Initial Product Term for successive terms of [* * *] each unless either Party gives written notice to the other Party of its intention to terminate the Product Agreement at least [* * *] prior to the end of the then-current term, including the Initial Product Term.

8.2Termination for Cause.

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(a)
	
Either Party at its sole option may terminate this Agreement or a Product Agreement upon written notice where the other Party has failed to remedy a material breach of any of its representations, warranties, or other obligations under this Agreement or the Product Agreement within [* * *] following receipt of a written notice (the "Remediation Period") of the breach from the aggrieved Party that expressly states that it is a notice under this Section 8.2(a) (a "Breach Notice"), [* * *].  The termination of a Product Agreement under this Section 8.2(a) will not affect this Agreement or any other Product Agreements where there has been no material breach of the other Product Agreements.  Any termination under this Section 8.2(a) shall be subject to the provisions of Section 8.3(a)(v).

	
 
	
(b)
	
Either Party at its sole option may immediately terminate this Agreement or a Product Agreement upon written notice, but without prior advance notice, to the other Party if: (i) the other Party is declared insolvent or bankrupt by a court of competent jurisdiction; (ii) a voluntary petition of bankruptcy is filed in any court of competent jurisdiction by the other Party; or (iii) this Agreement or a Product Agreement is assigned by the other Party for the benefit of creditors.

	
 
	
(c)
	
Client may terminate a Product Agreement upon [* * *] prior written notice if any Authority takes any action, or raises any objection, that prevents Client from importing, exporting, purchasing, or selling the Product.  [* * *]

	
 
	
(d)
	
Client may terminate a Product Agreement upon [* * *] prior written notice if it intends to no longer order Manufacturing Services for a Product due to the Product's discontinuance in the market other than as set forth in Section 8.2(c).

	
 
	
(e)
	
[* * *] 

8.3Obligations on Termination.

	
 
	
(a)
	
If a Product Agreement is completed, expires, or is terminated in whole or in part for any reason, then:

	
 
	
(i)
	
[* * *]

	
 
	
(ii)
	
[* * *]  

	
 
	
(iii)
	
[* * *] 

	
 
	
(iv)
	
Patheon shall provide reasonable support and documentation to Client to enable Client to perform a technology transfer of the Product manufacturing process to a third party manufacturer. [* * *] 

	
 
	
(v)
	
In the event that a technology transfer to a third party manufacturer is required on Client’s proper notice of termination of this Agreement, this Agreement shall be extended for a reasonable period to cover the technology transfer and to give the third party manufacturer sufficient time to manufacture Product of sufficient quantity and quality to replace Patheon’s supply.  For the avoidance of doubt, all the terms of this Agreement shall continue to apply during this period and all activities must be completed promptly by Client and its third party manufacturer.  Client must give 

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Patheon accurate monthly written updates on the duration of the extension, which cannot exceed [* * *]; and 

	
 
	
(vi)
	
Client will make commercially reasonable efforts, at its own expense, to remove from Patheon site(s), within [* * *], all unused Active Material and Client-Supplied Components, all applicable Inventory and Materials (whether current or obsolete), supplies, undelivered Product, chattels, equipment or other moveable property owned by Client, related to the Agreement and located at a Patheon site or that is otherwise under Patheon’s care and control (“Client Property”).  [* * *]

	
 
	
(b)
	
Any completion, termination or expiration of this Agreement or a Product Agreement will not affect any outstanding obligations or payments due prior to the completion, termination or expiration, nor will it prejudice any other remedies that the Parties may have under this Agreement or a Product Agreement or any related Capital Equipment Agreement.  For greater certainty, completion, termination or expiration of this Agreement or of a Product Agreement for any reason will not affect the obligations and responsibilities of the Parties under Sections 1.3 (Definitions) through 1.6 (Singular Terms) (solely to the extent necessary to give meaning to the other surviving sections), Section 5.5 (Invoices and Payment), ARTICLE 6 (Product Claims and Recalls), Section 7.3 (Records and Accounting by Patheon), Section 7.4 (Inspection), this Section 8.3 (Obligations on Termination), ARTICLE 10 (Remedies and Indemnities), ARTICLE 11 (Confidentiality), ARTICLE 12 (Dispute Resolution) and ARTICLE 13 (Miscellaneous), all of which survive any completion, termination or expiration.

ARTICLE 9 

REPRESENTATIONS, WARRANTIES AND COVENANTS

9.1Authority.

Each Party covenants, represents and warrants that, as of the Effective Date it has the full right and authority to enter into this Agreement and that it is not aware of any impediment that would inhibit its ability to perform its obligations hereunder.

9.2Client Warranties.

Client covenants, represents and warrants, that:

	
 
	
(a)
	
[* * *]

	
 
	
(b)
	
[* * *]

	
 
	
(c)
	
[* * *]

	
 
	
(d)
	
the Specifications for all Products conform to all applicable cGMPs and Applicable Laws; and 

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(e)
	
Client will comply with all Applicable Law relating to its activities contemplated under this Agreement including, without limitation, the sale and distribution of Products for human consumption in any jurisdiction where the Products are marketed.

9.3Patheon Warranties.

Patheon covenants, represents, and warrants that:

	
 
	
(a)
	
it will perform the Manufacturing Services in accordance with the Specifications, cGMPs, the Quality Agreement and Applicable Laws; 

	
 
	
(b)
	
each Product at the time of delivery to Client shall (i) conform with Specifications, cGMPs and Applicable Laws, (ii) not be adulterated or misbranded within the meaning of the FD&C Act; 

	
 
	
(c)
	
it will allocate reasonably adequate resources to execute its obligations under this Agreement or any Product Agreement on the basis of Client’s reasonable forecasts; 

	
 
	
(d)
	
any Patheon Intellectual Property used by Patheon to perform the Manufacturing Services (i) is Patheon’s or its Affiliate's unencumbered property, (ii) may be lawfully used by Patheon, and (iii) does not infringe and will not infringe any Third Party Rights;

	
 
	
(e)
	
[* * *]

	
 
	
(f)
	
it will not in the performance of its obligations under this Agreement use the services of any person it knows is debarred or suspended under 21 U.S.C. §335(a) or (b); 

	
 
	
(g)
	
it does not currently have, and it will not hire, as an officer or an employee any person whom it knows has been convicted of a felony under the laws of the United States for conduct relating to the regulation of any drug product under the United States Federal Food, Drug, and Cosmetic Act; and

	
 
	
(h)
	
[* * *]

9.4Permits.

	
 
	
(a)
	
Except as set forth in Section 9.4(b), Client will be solely responsible for obtaining or maintaining, on a timely basis, any permits or other Regulatory Approvals for the Products or the Specifications, including, without limitation, all marketing and post-marketing approvals.

	
 
	
(b)
	
Patheon will maintain at all relevant times all governmental permits, licenses, approval, and authorities required to enable it to lawfully and properly perform the Manufacturing Services, including any permits or approvals required to conduct such Manufacturing Services at the Manufacturing Site.

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9.5No Warranty.

PATHEON MAKES NO WARRANTY OR CONDITION OF ANY KIND, EITHER EXPRESSED OR IMPLIED, BY FACT OR LAW, OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT.  PATHEON MAKES NO WARRANTY OR CONDITION OF FITNESS FOR A PARTICULAR PURPOSE NOR ANY WARRANTY OR CONDITION OF MERCHANTABILITY FOR THE PRODUCTS.

ARTICLE 10 

REMEDIES AND INDEMNITIES

10.1Consequential and Other Damages.

[* * *] neither Party will be liable to the other for (i) any (direct or indirect) loss of profits, of anticipated savings, of business, or goodwill or (ii) any costs or expenditures incurred to evaluate the viability of entering into this Agreement or to prepare for performance under this Agreement or (iii) for any other liability, damage, costs, penalty, or expense of any kind incurred by the other Party of an indirect or consequential nature, regardless of any notice of the possibility of these damages, in each case whether in contract, tort, negligence, breach of statutory duty, or otherwise.

10.2Limitation of Liability.

	
 
	
(a)
	
[* * *]

	
 
	
(b)
	
[* * *]

	
 
	
(c)
	
[* * *]

	
 
	
(d)
	
[* * *]

10.3Patheon Indemnity.

	
 
	
(a)
	
Patheon agrees to defend and indemnify Client, its Affiliates and their respective directors, officers, employees and agents (“Client Representatives”) against all losses, damages, costs, claims, demands, judgments and liability (including attorneys’ fees and expenses reasonably incurred) to, from and in favour of third parties (other than Affiliates) for (a) any claim of personal injury or property damage to the extent that the injury or damage is the result of [* * *]; (b) infringement by Patheon of any third party Intellectual Property rights arising from the use by Patheon of Patheon Intellectual Property in the performance of the Manufacturing Services except to the extent that Client has an obligation to indemnify any Patheon Representative for such losses, damages, costs, claims, demands, judgments or liability pursuant to Section 10.4. 

	
 
	
(b)
	
If a claim occurs, Client will: (a) promptly notify Patheon of the claim; (b) use commercially reasonable efforts to mitigate the effects of the claim; (c) reasonably cooperate with Patheon in the defense of the claim; and (d) permit Patheon to control the defense and settlement of the claim, all at Patheon's cost and expense. But Patheon shall not be 

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permitted to settle the claim in a manner that imposes any financial liability or other obligation on the part of Client or requires an admission of liability, wrongdoing or fault or a waiver of rights, on the part of Client, without Client’s prior written consent.

10.4Client Indemnity.

	
 
	
(a)
	
Client agrees to defend and indemnify Patheon, its Affiliates and their respective directors, officers, employees and agents (“Patheon Representatives”), against all losses, damages, costs, claims, demands, judgments and liability (including attorneys’ fees and expenses reasonably incurred) to, from and in favour of third parties (other than Affiliates) for (i) any assertion that the Client Intellectual Property [* * *] infringes or misappropriates any Intellectual Property right of a third party or (ii) any personal injury or property damage based on the commercial use, sale or distribution of the Product except to the extent that either (1) Patheon has an obligation to indemnify any Client Representative for such losses, damages, costs, claims, demands, judgments or liability pursuant to Section 10.3 or (2) any losses, damages, costs, claims, demands, judgments or liability are caused by the failure of Patheon to submit complete or accurate information to Client regarding any Client Intellectual Property assigned to Client.

	
 
	
(b)
	
If a claim occurs, Patheon will: (a) promptly notify Client of the claim; (b) use commercially reasonable efforts to mitigate the effects of the claim; (c) reasonably cooperate with Client in the defense of the claim; and (d) permit Client to control the defense and settlement of the claim, all at Client's cost and expense. But Client shall not be permitted to settle the claim in a manner that imposes any financial liability or other obligation on the part of Patheon or requires an admission of liability, wrongdoing or fault or a waiver of rights, on the part of Patheon, without Patheon’s prior written consent.

10.5Reasonable Allocation of Risk.

This Agreement (including, without limitation, this ARTICLE 10) is reasonable and creates a reasonable allocation of risk for the relative profits the Parties each expect to derive from the Products.  Patheon assumes only a limited degree of risk arising from the manufacture, distribution, and use of the Products because Client has developed and holds the marketing approval for the Products, Client requires Patheon to manufacture and label the Products strictly in accordance with the Specifications, and Client, not Patheon, is best positioned to inform and advise potential users about the circumstances and manner of use of the Products.  

ARTICLE 11 

CONFIDENTIALITY

11.1Confidential Information.

“Confidential Information” means any information disclosed by the Disclosing Party to the Recipient (whether disclosed in oral, written, electronic or visual form) that is non-public, confidential or proprietary including, without limitation, information relating to the Disclosing Party’s patent and trademark applications, process designs, process models, drawings, plans, designs, data, databases and extracts therefrom, formulae, methods, know-how and other Intellectual Property, its clients or client 

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confidential information, finances, marketing, products and processes and all price quotations, manufacturing or professional services proposals, information relating to composition, proprietary technology, and all other information relating to manufacturing capabilities and operations.  In addition, all analyses, compilations, studies, reports or other documents prepared by any Party's Representatives containing the Confidential Information will be considered Confidential Information. Samples or materials provided hereunder as well as any and all information derived from the approved analysis of the samples or materials will also constitute Confidential Information.   For the purposes of this ARTICLE 11, a Party or its Representative receiving Confidential Information under this Agreement is a “Recipient”, and a Party or its Representative disclosing Confidential Information under this Agreement is the “Disclosing Party”.

11.2Use of Confidential Information. 

The Recipient will use the Confidential Information solely for the purpose of meeting its obligations under this Agreement.  The Recipient will keep the Confidential Information strictly confidential and will not disclose the Confidential Information in any manner whatsoever, in whole or in part, other than to those of its Representatives who (i) have a need to know the Confidential Information for the purpose of this Agreement; (ii) have been advised of the confidential nature of the Confidential Information and (iii) have obligations of confidentiality and non-use to the Recipient no less restrictive than those of this Agreement.  Recipient will protect the Confidential Information disclosed to it by using reasonable precautions to prevent the unauthorized disclosure, dissemination or use of the Confidential Information, which precautions will in no event be less than those exercised by Recipient with respect to its own confidential or proprietary Confidential Information of a similar nature.

11.3Exclusions.

The obligations of confidentiality will not apply to the extent that the information:

	
 
	
(a)
	
is or becomes publicly known through no breach of this Agreement or fault of the Recipient or its Representatives;

	
 
	
(b)
	
is in the Recipient's possession at the time of disclosure by the Disclosing Party other than as a result of the Recipient's breach of any legal obligation;

	
 
	
(c)
	
is or becomes known to the Recipient on a non-confidential basis through disclosure by sources, other than the Disclosing Party, having the legal right to disclose the Confidential Information, provided that the other source is not known by the Recipient to be bound by any obligations (contractual, legal, fiduciary, or otherwise) of confidentiality to the Disclosing Party with respect to the Confidential Information;

	
 
	
(d)
	
is independently developed by the Recipient without use of or reference to the Disclosing Party's Confidential Information as evidenced by Recipient’s written records; or

	
 
	
(e)
	
is expressly authorized for release by the written authorization of the Disclosing Party.

Any combination of information which comprises part of the Confidential Information are not exempt from the obligations of confidentiality merely because individual parts of that Confidential Information were publicly known, in the Recipient’s possession, or received by the Recipient, unless the combination itself was publicly known, in the Recipient’s possession, or received by the Recipient.

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11.4Photographs and Recordings.

Neither Party will take any photographs or videos of the other Party’s facilities, equipment or processes, nor use any other audio or visual recording equipment (such as camera phones) while at the other Party’s facilities, without that Party’s express written consent.

11.5Permitted Disclosure.

Notwithstanding any other provision of this Agreement, the Recipient may disclose Confidential Information of the Disclosing Party to the extent required, as advised by counsel, in response to a valid order of a court or other governmental body or as required by law, regulation or stock exchange rule. But the Recipient will advise the Disclosing Party in advance of the disclosure to the extent practicable and permissible by the order, law, regulation or stock exchange rule and any other Applicable Laws, will reasonably cooperate with the Disclosing Party, if required, in seeking an appropriate protective order or other remedy, and will otherwise continue to perform its obligations of confidentiality set out herein.  If any public disclosure is required by law, the Parties will consult concerning the form of announcement prior to the public disclosure being made.

11.6Marking.

The Disclosing Party will use reasonable efforts to summarize in writing the content of any oral disclosure or other non-tangible disclosure of Confidential Information within [* * *] of the disclosure, but failure to provide this summary will not affect the nature of the Confidential Information disclosed if the Confidential Information was identified as confidential or proprietary when disclosed orally or in any other non-tangible form. 

11.7Return of Confidential Information.

Upon the written request of the Disclosing Party, the Recipient will promptly return the Confidential Information to the Disclosing Party or, if the Disclosing Party directs, destroy all Confidential Information disclosed in or reduced to tangible form including any copies thereof and any summaries, compilations, analyses or other notes derived from the Confidential Information except for one copy which may be maintained by the Recipient for its records.  The retained copy will remain subject to all confidentiality provisions contained in this Agreement.

11.8Remedies.

The Parties acknowledge that monetary damages may not be sufficient to remedy a breach by either Party of this ARTICLE 11 and agree that the non-breaching Party will be entitled to seek specific performance, injunctive and/or other equitable relief to prevent breaches of this ARTICLE 11 and to specifically enforce the provisions hereof in addition to any other remedies available at law or in equity. These remedies will not be the exclusive remedies for breach of this ARTICLE 11 but will be in addition to any and all other remedies available at law or in equity.

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ARTICLE 12 

DISPUTE RESOLUTION

12.1Commercial Disputes.

If any dispute arises out of this Agreement or any Product Agreement (other than a dispute under Section 6.1(b) or a Technical Dispute, as defined herein), the Parties will first try in good faith to resolve it in meetings of the Supply and Quality Committee.  If the Supply and Quality Committee fails to resolve the matter within [* * *], the dispute will immediately be referred to the Chief Operating Officer (or another officer as he/she may designate) of each Party who will meet and discuss as necessary to try to resolve the dispute amicably.  Should the Parties fail to reach a resolution under this Section 12.1, the dispute will be referred to arbitration in accordance with Section 13.18. 

12.2Technical Dispute Resolution.

If a dispute arises (other than disputes under Section 12.1) between the Parties that is exclusively related to technical aspects of the manufacturing, packaging, labelling, quality control testing, handling, storage, or other activities under this Agreement (a “Technical Dispute”), the Parties will make all reasonable efforts to resolve the dispute by good faith negotiations in the Supply and Quality Committee.  In that regard, the Supply and Quality Committee will, as soon as possible and in any event no later than [* * *] after a written request from either Party to the other, meet in good faith to resolve any Technical Dispute.  If, despite this meeting, the Parties are unable to resolve a Technical Dispute within a reasonable time, and in any event within [* * *] of the written request, the Technical Dispute will, at the request of either Party, be referred for determination to an expert in accordance with Exhibit A.  If the Parties cannot agree using good faith efforts that a dispute is a Technical Dispute, Section 12.1 will prevail.  For greater certainty, the Parties agree that the release of the Products for sale or distribution under the applicable marketing approval for the Products will not by itself indicate compliance by Patheon with its obligations for the Manufacturing Services and further that nothing in this Agreement (including Exhibit A) will remove or limit the authority of the relevant qualified person (as specified by the Quality Agreement) to determine whether the Products are to be released for sale or distribution.

ARTICLE 13 

MISCELLANEOUS

13.1Inventions.

	
 
	
(a)
	
For the term of this Agreement, Client hereby grants to Patheon a non-exclusive, paid-up, royalty-free, non-transferable license of Client Intellectual Property solely to perform the Manufacturing Services as set forth under this Agreement, the Product Agreement and the Quality Agreement.

	
 
	
(b)
	
All Client Intellectual Property will be the exclusive property of Client.  If, at any time before or during the Term, Patheon owns (solely or jointly) any Client Intellectual Property, Patheon agrees to assign and does hereby assign all right, title and interest in and to such Client Intellectual Property to Client.  Patheon shall, and shall cause its Affiliates to, execute and deliver all requested assignments and other documents, and take such other 

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actions as Client may reasonably request at Client’s cost, in order to perfect and enforce Client’s rights in the Client Intellectual Property.  Patheon shall, at Client’s cost and expense, provide all relevant information in its and its Affiliates’ possession and other reasonable assistance to Client so that Client can conduct a timely and accurate analysis of the likelihood that any Client Intellectual Property to be assigned or assigned to Client by Patheon infringes the intellectual property rights of a Third Party.

	
 
	
(c)
	
All Patheon Intellectual Property will be the exclusive property of Patheon. Patheon hereby grants to Client a perpetual, irrevocable, non-exclusive, paid-up, royalty-free license to use the Patheon Intellectual Property used by Patheon to perform the Manufacturing Services to enable Client itself to manufacture the Product(s). If, at any time before or during the Term, Client owns (solely or jointly) any Patheon Intellectual Property, Client agrees to assign and does hereby assign all right, title and interest in and to such Patheon Intellectual Property to Patheon.  Client shall, and shall cause its Affiliates to, execute and deliver all requested assignments and other documents, and take such other actions as Patheon may reasonably request at Patheon’s cost, in order to perfect and enforce Patheon’s rights in the Patheon Intellectual Property.  [* * *]

	
 
	
(d)
	
Each Party will be solely responsible for the costs of filing, prosecution, and maintenance of patents and patent applications on its own Inventions.

	
 
	
(e)
	
Either Party will give the other Party written notice, as promptly as practicable, of all Inventions arising under this Agreement.  On request, either Party shall provide all reasonably necessary documentation and support (subject to the other Party reimbursing its time and expenses in doing so) to transfer any Intellectual Property belonging to the Party that has ownership of it (in accordance with this Section 13.1) to enable the other Party to register any Inventions. On request from Client, Patheon shall supply with a written summary of all Inventions arising during the performance of the Manufacturing Services which constitute Client Intellectual Property. 

13.2Intellectual Property.

Neither Party has, nor will it acquire, any interest in any of the other Party’s Intellectual Property unless otherwise expressly agreed to in writing.  Neither Party will use any Intellectual Property of the other Party, except as specifically authorized by the other Party or as required for the performance of its obligations under this Agreement.

13.3 [* * *]

13.4Insurance.

Each Party will maintain commercial general liability insurance, including blanket contractual liability insurance covering the obligations of that Party under this Agreement through the term of this Agreement and for a period of [* * *] thereafter.  Patheon’s insurance policy will have policy limits of not less than [* * *].  If requested Patheon will give Client a certificate of insurance evidencing the above and showing the name of the issuing company, the policy number, the effective date, the expiration date, and the limits of liability.  Such insurance certificate will further provide for a minimum of [* * *] written notice to the insured of a cancellation of, or material change in, the insurance.  

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13.5Independent Contractors.

The Parties are independent contractors and this Agreement and any Product Agreement will not be construed to create between Patheon and Client any other relationship such as, by way of example only, that of employer-employee, principal agent, joint-venturer, co-partners, or any similar relationship, the existence of which is expressly denied by the Parties.

13.6No Waiver.

Neither Party's failure to require the other Party to comply with any provision of this Agreement or any Product Agreement will be deemed a waiver of the provision or any other provision of this Agreement or any Product Agreement, with the exception of Sections 6.1 and 8.2 of this Agreement.

13.7Assignment and Subcontracting.

	
 
	
(a)
	
Patheon may not assign this Agreement or any Product Agreement or any of its associated rights or obligations without the written consent of Client, this consent not to be unreasonably withheld.  But Patheon may arrange for Affiliates or subcontractors to perform Manufacturing Services, including specific testing services, under any Product Agreement with the consent of Client; provided, however, that Patheon will remain solely liable to Client for its obligations under this Agreement, and for the obligations of it or the applicable Affiliate of Patheon under the Quality Agreement, if the Manufacturing Services are subcontracted.  Nothing in this Agreement shall prevent Patheon subcontracting work to the Patheon Affiliate responsible for the Manufacturing Site specified as performing the Manufacturing Services in the Product Agreement.

	
 
	
(b)
	
Subject to Section 8.2(e), Client may assign this Agreement or any Product Agreement or any of its associated rights or obligations without approval from Patheon.  But Client will give Patheon prior written notice of any assignment, any assignee will covenant in writing with Patheon to be bound by the terms of this Agreement or the Product Agreement, and Client will remain liable hereunder.  [* * *]

	
 
	
(c)
	
Notwithstanding the foregoing provisions of this Section 13.7, either Party may assign this Agreement or any Product Agreement to (i) any of its Affiliates or (ii) a successor to or purchaser of all or substantially all of its business, but the assignee must execute an agreement with the non-assigning Party whereby it agrees to be bound hereunder. 

13.8Force Majeure.

Neither Party will be liable for the failure to perform its obligations under this Agreement or any Product Agreement if the failure is caused by an event beyond that Party's reasonable control and without that Party’s fault or negligence (a "Force Majeure Event").  A Party claiming a right to excused performance under this Section 13.8 will immediately notify the other Party in writing of the extent of its inability to perform, which notice will specify the event beyond its reasonable control that prevents the performance.  Neither Party will be entitled to rely on a Force Majeure Event to relieve it from an obligation to pay money (including any interest for delayed payment) which would otherwise be due and payable under this Agreement or any Product Agreement.

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13.9Additional Product.

Additional Products may be added to, or existing Products deleted from, any Product Agreement by amendments to the Product Agreement including Schedules A, B, C, and D as applicable.

13.10Notices.

Unless otherwise agreed in a Product Agreement, any notice, approval, instruction or other written communication required or permitted hereunder will be sufficient if made or given to the other Party by personal delivery or confirmed receipt email or by sending the same by first class mail, postage prepaid to the respective addresses or electronic mail addresses set forth below: 

If to Client:

Paratek Pharmaceuticals, Inc.

75 Park Plaza, 4th Floor

Boston, MA 02116

USA

Attention: General Counsel

[* * *]

Email addresses (any notice to be sent to both): [* * *]

If to Patheon:

Patheon UK Limited

Kingfisher Drive

Covingham

Swindon SN3 5BZ

United Kingdom

Attention: [* * *]

or to any other addresses or electronic mail addresses given to the other Party in accordance with the terms of this Section 13.10.  Notices or written communications made or given by personal delivery, or electronic mail will be deemed to have been sufficiently made or given when sent (receipt acknowledged), or if mailed, five days after being deposited in the United States, Canada, or European Union mail, postage prepaid or upon receipt, whichever is sooner.

13.11Severability.

If any provision of this Agreement or any Product Agreement is determined by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, that determination will not impair or affect the validity, legality, or enforceability of the remaining provisions, because each provision is separate, severable, and distinct.

13.12Entire Agreement.

This Agreement, together with the applicable Product Agreement and the Quality Agreement, constitutes the full, complete, final and integrated agreement between the Parties relating to the subject matter hereof and supersedes all previous written or oral negotiations, commitments, agreements, transactions, or understandings concerning the subject matter hereof.  Any modification, 

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amendment, or supplement to this Agreement or any Product Agreement must be in writing and signed by authorized representatives of both Parties.  In case of conflict, the prevailing order of documents will be this Agreement, the Product Agreement, and the Quality Agreement.  

13.13Other Terms.

No terms, provisions or conditions of any purchase order or other business form or written authorization used by Client or Patheon will have any effect on the rights, duties, or obligations of the Parties under or otherwise modify this Agreement or any Product Agreement, regardless of any failure of Client or Patheon to object to the terms, provisions, or conditions unless the document specifically refers to this Agreement or the applicable Product Agreement and is signed by both Parties.

13.14No Third Party Benefit or Right.

For greater certainty, nothing in this Agreement or any Product Agreement will confer or be construed as conferring on any third party any benefit or the right to enforce any express or implied term of this Agreement or any Product Agreement.

13.15Execution in Counterparts.

This Agreement and any Product Agreement may be executed in two or more counterparts, by original, facsimile or “pdf” signature, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

13.16Use of Client Name.

Patheon will not make any use of Client’s name, trademarks or logo or any variations thereof, alone or with any other word or words (including in customer lists or related marketing and promotion material), without the prior written consent of Client, which consent will not be unreasonably withheld.  

13.17Taxes.

[* * *]

13.18Governing Law.

This Agreement and any Product Agreement, unless otherwise agreed by the Parties in the Product Agreement and then only for the purposes of that Product Agreement, will be construed and enforced in accordance with the laws of [* * *], without regard to the conflict of laws principles thereof.  All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with said Rules.  The seat of the arbitration shall be [* * *].  The UN Convention on Contracts for the International Sale of Goods will not apply to this Agreement. 

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13.19Further Assurances.

Each Party shall duly execute and deliver or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement. 

13.20Supply and Quality Committee

	
 
	
(a)
	
Composition. Patheon and Client will designate a Supply and Quality Committee with an equal number of representatives from each Party to serve as a coordinating body for all activities under this Agreement, including each Product Agreement and the Quality Agreement. The Supply and Quality Committee shall be comprised of an equal number of representatives of each Party.  Each Party shall appoint its respective representatives to the Supply and Quality Committee within [* * *] days of agreement between the Parties on the establishment of the Supply and Quality Committee, and each Party, from time to time, may substitute [* * *] or more of its representatives, in its sole discretion, effective upon notice to the other Party of such change.  All Supply and Quality Committee representatives shall have appropriate expertise, seniority, decision-making authority and relevant expertise in matters related to the manufacturing and supply of the Product.  

	
 
	
(b)
	
Meetings.  The Supply and Quality Committee shall meet as necessary to carry out its duties under this Section 13.20, [* * *].  The Supply and Quality Committee shall meet in-person at Client or Patheon, or, alternatively, by means of teleconference, videoconference or other similar communications equipment.

	
 
	
(c)
	
Supply and Quality Committee Responsibilities.  The Supply and Quality Committee shall provide a forum for the discussion, coordination and review of all activities under this Agreement (including under any Product Agreement and the Quality Agreement), and shall in particular have responsibility for the following: (a) reviewing key metrics for the Product’s production and quality, and reviewing and monitoring any required remediation with respect to production and quality for the Product; (b) reviewing Patheon’s capacity and short-term and long-term planning for clinical and commercial supply of the Product, including anticipating any capacity shortfalls;  and (c) establishing resource priorities and resolving resource conflicts.

	
 
	
(d)
	
Decision-Making. All of each Party’s representatives on the Supply and Quality Committee shall collectively have [* * *] with respect to decisions before the Supply and Quality Committee.  All decisions of the Supply and Quality Committee must be made by unanimous consent, which shall be documented in written minutes of the Supply and Quality Committee and signed by a representative of each Party.

[Signature page to follow]

 

 

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IN WITNESS WHEREOF, the duly authorized representatives of the Parties have executed this Agreement as of the Effective Date.

 

	
 
	
PATHEON UK LIMITED 

	
 
	
 
	
 
	
 

	
 
	
By:
	
 
	
/s/ Andrew Robinson

	
 
	
 
	
 
	
 

	
 
	
Name:
	
 
	
Andrew Robinson

	
 
	
 
	
 
	
 

	
 
	
Title:
	
 
	
Director

	
 
	
 
	
 
	
 

	
 
	
Date:
	
 
	
7/28/17

	
 
	
 
	
 
	
 

	
 
	
PARATEK PHARMACEUTICALS INC.

	
 
	
 
	
 
	
 

	
 
	
By:
	
 
	
/s/ William M. Haskel

	
 
	
 
	
 
	
 

	
 
	
Name:
	
 
	
William M. Haskel

	
 
	
 
	
 
	
 

	
 
	
Title:
	
 
	
SVP, General Counsel and Corporate Secretary

	
 
	
 
	
 
	
 

	
 
	
Date:
	
 
	
7/28/17

 

 

 

[Signature page to Master Manufacturing Services Agreement]

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APPENDIX 1

FORM OF PRODUCT AGREEMENT

(Includes Schedules A to D)

PRODUCT AGREEMENT

This Product Agreement (this “Product Agreement”) is issued under the Master Manufacturing Services Agreement dated July 28, 2017 between Patheon UK Limited and Paratek Pharmaceuticals Inc. (the “Master Agreement”), and is entered into [insert effective date] (the “Effective Date”), between Patheon UK Limited, a corporation existing under the laws of England [or applicable founding jurisdiction for Patheon Affiliate], having a principal place of business at Kingfisher Drive, Covingham, Swindon, SN3 5BZ, England (“Patheon”) and Paratek Pharmaceuticals Inc. a corporation existing under the laws of Delaware, of 4th Floor, 75 Park Plaza, Boston, MA 02116, USA (“Client”).

The terms and conditions of the Master Agreement are incorporated herein except to the extent this Product Agreement expressly references the specific provision in the Master Agreement to be modified by this Product Agreement.  All capitalized terms that are used but not defined in this Product Agreement will have the respective meanings given to them in the Master Agreement.

The Schedules to this Product Agreement are incorporated into and will be construed in accordance with the terms of this Product Agreement.

	
 
	
1.
	
Product List and Specifications (See Schedule A attached hereto)

	
 
	
2.
	
[* * *] Price (See Schedule B attached hereto)

	
 
	
3.
	
Annual Stability Testing and Validation Activities (if applicable) (See Schedule C attached hereto) 

	
 
	
4.
	
Active Materials[* * *] (See Schedule D attached hereto)

	
 
	
5.
	
[* * *]

	
 
	
6.
	
Territory: (insert the description of the Territory here)

	
 
	
7.
	
Manufacturing Site: (insert address of Patheon Manufacturing Site where the Manufacturing Services will be performed)

	
 
	
8.
	
[* * *]

	
 
	
9.
	
Currency: (if applicable under Section 1.4 of the Master Agreement) [* * *]

	
 
	
10.
	
Initial Product Term: (per Section 8.1 of the Master Agreement) from the Effective Date until [* * *]

	
 
	
11.
	
Notices: (if applicable under Section 13.10 of the Master Agreement)

 

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12.
	
Other Modifications to the Master Agreement: (if applicable under Section 1.2 of the Master Agreement)

	
 
	
13.
	
[* * *]

 

 

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IN WITNESS WHEREOF, the duly authorized representatives of the Parties have executed this Product Agreement as of the Effective Date set forth above.

 

	
 
	
PATHEON UK LIMITED 

	
 
	
 
	
 
	
 

	
 
	
By:
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
Name:
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
Title:
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
Date:
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
PARATEK PHARMACEUTICALS INC.

	
 
	
 
	
 
	
 

	
 
	
By:
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
Name:
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
Title:
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
Date:
	
 
	
 

 

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Master Manufacturing Services Agreement 

 

SCHEDULE A

PRODUCT LIST AND SPECIFICATIONS

Product List

[insert product list]

Specifications

Prior to the start of commercial manufacturing of Product under this Agreement, Client will give Patheon the originally executed copies of the Specifications as approved by the applicable Regulatory Authority, which shall be appropriately referred to in the Quality Agreement.  If the Specifications received are subsequently amended, then Client will give Patheon the revised and originally executed copies of the revised Specifications.  Upon acceptance of the revised Specifications, Patheon will give Client a signed and dated receipt indicating Patheon’s acceptance of the revised Specifications.

 

 

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Master Manufacturing Services Agreement 

 

SCHEDULE B

[* * *] PRICE

[Insert Price Table]

 

Manufacturing Assumptions:

Packaging Assumptions:

Testing Assumptions:

The following cost items are included in the Price for the Products: 

[* * *]

The following cost items are not included in the Price for the Products: 

[* * *]

 

 

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Master Manufacturing Services Agreement 

 

SCHEDULE C

ANNUAL STABILITY TESTING [and VALIDATION ACTIVITIES (if applicable)] 

Patheon and Client will agree in writing on any stability testing to be performed by Patheon on the Products.  This agreement will specify the commercial and Product stability protocols applicable to the stability testing and the fees payable by Client for this testing including the Price for the Product withdrawn for the stability testing.

[NTD: Schedule C should clearly indicate when and/or under what conditions Patheon’s responsibility to perform stability testing will end]

 

 

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Master Manufacturing Services Agreement 

 

SCHEDULE D

ACTIVE MATERIALS

 

	
Active Materials
	
Supplier

	
•
	
•

	
•
	
•

 

[* * *]

 

[End of Product Agreement] 

 

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Master Manufacturing Services Agreement 

 

EXHIBIT A

TECHNICAL DISPUTE RESOLUTION

Technical Disputes which cannot be resolved by negotiation as provided in Section 12.2 will be resolved in the following manner:

1.Appointment of Expert. Within [* * *] after a Party requests under Section 12.2 that an expert be appointed to resolve a Technical Dispute, the Parties will jointly appoint a mutually acceptable expert with experience and expertise in the subject matter of the dispute.  If the Parties are unable to so agree within the [* * *] period, or if there is a disclosure of a conflict by an expert under Paragraph 2 hereof which results in the Parties not confirming the appointment of the expert, then an expert (willing to act in that capacity hereunder) will be appointed by an experienced arbitrator on the roster of the American Arbitration Association.

2.Conflicts of Interest.  Any person appointed as an expert will be entitled to act and continue to act as an expert even if at the time of his appointment or at any time before he gives his determination, he has or may have some interest or duty which conflicts or may conflict with his appointment if before accepting the appointment (or as soon as practicable after he becomes aware of the conflict or potential conflict) he fully discloses the interest or duty and the Parties will, after the disclosure, have confirmed his appointment.

3.[* * *]

4.Procedure.  Where an expert is appointed:

	
 
	
(a)
	
Timing.  The expert will be so appointed on condition that (i) he promptly fixes a reasonable time and place for receiving representations, submissions or information from the Parties and that he issues the authorizations to the Parties and any relevant third party for the proper conduct of his determination and any hearing and (ii) he renders his decision (with full reasons) within [* * *] (or another date as the Parties and the expert may agree) after receipt of all information requested by him under Paragraph 4(b) hereof.

	
 
	
(b)
	
Disclosure of Evidence.  The Parties undertake one to the other to give to any expert all the evidence and information within their respective possession or control as the expert may reasonably consider necessary for determining the matter before him which they will disclose promptly and in any event within [* * *] of a written request from the relevant expert to do so.  All disclosures to such expert shall be subject to confidentiality obligations at least as strict as those in the Master Agreement.

	
 
	
(c)
	
Advisors.  Each Party may appoint any counsel, consultants and advisors as it feels appropriate to assist the expert in his determination and so as to present their respective cases so that at all times the Parties will co-operate and seek to narrow and limit the issues to be determined.

	
 
	
(d)
	
Appointment of New Expert.  If within the time specified in Paragraph 4(a) above the expert will not have rendered a decision in accordance with his appointment, a new expert may (at the request of either Party) be appointed and the appointment of the existing expert will thereupon cease for the purposes of determining the matter at issue 

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Master Manufacturing Services Agreement 

 

	
 
		
between the Parties except if the existing expert renders his decision with full reasons prior to the appointment of the new expert, then this decision will have effect and the proposed appointment of the new expert will be withdrawn.

	
 
	
(e)
	
Final and Binding.  The determination of the expert will, except for fraud or manifest error, be final and binding upon the Parties.

	
 
	
(f)
	
Costs.  Each Party will bear its own costs for any matter referred to an expert hereunder and, in the absence of express provision in the Agreement to the contrary, the costs and expenses of the expert will be shared equally by the Parties.

For greater certainty, the release of the Products for sale or distribution under the applicable marketing approval for the Products will not by itself indicate compliance by Patheon with its obligations for the Manufacturing Services and further nothing in this Agreement (including this Exhibit A) will remove or limit the authority of the relevant qualified person (as specified by the Quality Agreement) to determine whether the Products are to be released for sale or distribution.

 

 

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Master Manufacturing Services Agreement 

 

EXHIBIT B

QUARTERLY ACTIVE MATERIALS INVENTORY REPORT

 

	
TO:
	
 
	
Paratek Pharmaceuticals Inc.

	
 
	
 
	
 

	
FROM:
	
 
	
PATHEON UK LIMITED [or applicable Patheon Affiliate]

	
 
	
 
	
 

	
RE:
	
 
	
Active Materials quarterly inventory report under Section 2.2(a) of the Master Manufacturing Services Agreement dated • (the "Agreement")

	
 
	
 
	
 

 

	
Reporting quarter:
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
Active Materials on hand at beginning of quarter:
	
 
	
 
	
kg
	
(A)

	
 
	
 
	
 
	
 
	
 

	
Active Materials on hand at end of quarter:
	
 
	
 
	
kg
	
(B)

	
 
	
 
	
 
	
 
	
 

	
Quantity Received during quarter:
	
 
	
 
	
kg
	
(C)

	
 
	
 
	
 
	
 
	
 

	
Quantity Dispensed1 during quarter:
	
 
	
 
	
kg
	
 

	
(A + C – B)
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
Quantity Converted during quarter:
	
 
	
 
	
kg
	
 

	
(total Active Materials in Products produced

and not rejected, recalled or returned or in work-in-process)
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
Capitalized terms used in this report have the meanings given to the terms in the Agreement.

 

	
PATHEON UK LIMITED
	
 
	
DATE:
	
 
	
 

	
[or applicable Patheon Affiliate]
	
 
	
 
	
 
	
 

 

	
Per:
	
 
	
 
	
 

	
Name:
	
 
	
 
	
 

	
Title:
	
 
	
 
	
 

 

 

 

	
	 

 

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

EXHIBIT C

[* * *]

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

PRODUCT AGREEMENT

This Product Agreement (this “Product Agreement”) is issued under the Master Manufacturing Services Agreement dated July 28, 2017 between Patheon UK Limited and Paratek Pharmaceuticals Inc. (the “Master Agreement”), and is entered into as of July 28, 2017 (the “Effective Date”), between Patheon UK Limited, a corporation existing under the laws of England, having a principal place of business at Kingfisher Drive, Covingham, Swindon, SN3 5BZ, England (“Patheon”) and Paratek Pharmaceuticals Inc. a corporation existing under the laws of Delaware, of 4th Floor, 75 Park Plaza, Boston, MA 02116, USA (“Client”).

The terms and conditions of the Master Agreement are incorporated herein except to the extent this Product Agreement expressly references the specific provision in the Master Agreement to be modified by this Product Agreement.  All capitalized terms that are used but not defined in this Product Agreement will have the respective meanings given to them in the Master Agreement.

The Schedules to this Product Agreement are incorporated into and will be construed in accordance with the terms of this Product Agreement.

	
 
	
14.
	
Product List and Specifications (See Schedule A attached hereto).

	
 
	
15.
	
[* * *] Price (See Schedule B attached hereto).

	
 
	
16.
	
Annual Stability Testing (See Schedule C attached hereto).

	
 
	
17.
	
Active Materials[* * *] (See Schedule D attached hereto).

	
 
	
18.
	
[* * *]

	
 
	
19.
	
Territory: [* * *]

	
 
	
20.
	
Manufacturing Site: [* * *]

	
 
	
21.
	
[* * *]

	
 
	
22.
	
Currency: [* * *]

	
 
	
23.
	
[* * *]

	
 
	
24.
	
Initial Product Term: per Section 8.1 of the Master Agreement, from the Effective Date until [* * *] 

	
 
	
25.
	
Notices: As stated in Section 13.10 of the Master Agreement

	
 
	
26.
	
Other Modifications to the Master Agreement: [* * *]

[Signature page to Product Agreement]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

IN WITNESS WHEREOF, the duly authorized representatives of the Parties have executed this Product Agreement as of the Effective Date set forth above.

 

	
 
	
PATHEON UK LIMITED 

	
 
	
 
	
 
	
 

	
 
	
By:
	
 
	
/s/ Andrew Robinson

	
 
	
 
	
 
	
 

	
 
	
Name:
	
 
	
Andrew Robinson

	
 
	
 
	
 
	
 

	
 
	
Title:
	
 
	
Director

	
 
	
 
	
 
	
 

	
 
	
Date:
	
 
	
7/28/17

	
 
	
 
	
 
	
 

	
 
	
PARATEK PHARMACEUTICALS INC.

	
 
	
 
	
 
	
 

	
 
	
By:
	
 
	
/s/ William M. Haskel

	
 
	
 
	
 
	
 

	
 
	
Name:
	
 
	
William M. Haskel

	
 
	
 
	
 
	
 

	
 
	
Title:
	
 
	
SVP, General Counsel and Corporate Secretary

	
 
	
 
	
 
	
 

	
 
	
Date:
	
 
	
7/28/17

 

 

[Signature page to Product Agreement]

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

SCHEDULE A

PRODUCT LIST AND SPECIFICATIONS

Product List

	
Product
	
Vial Size
	
Fill Volume
	
Lyo Cycle Duration
	
Packaging Configuration

	
PTK0796 lyophilized vials
	
[* * *]
	
[* * *]
	
[* * *]
	
[* * *]

 

Specifications

Prior to the start of commercial manufacturing of Product under this Agreement, Client will give Patheon the originally executed copies of the Specifications as approved by the applicable Regulatory Authority, which shall be appropriately referred to in the Quality Agreement.  If the Specifications received are subsequently amended, then Client will give Patheon the revised and originally executed copies of the revised Specifications.  Upon acceptance of the revised Specifications, Patheon will give Client a signed and dated receipt indicating Patheon’s acceptance of the revised Specifications.

 

 

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

SCHEDULE B

[* * *] PRICE

[* * *]

Manufacturing Assumptions:

[* * *]

Packaging Assumptions:

[* * *]

Testing Assumptions:

[* * *]

Cleaning Assumptions:

[* * *]

Supply Chain Assumptions:

[* * *]

The following cost items are included in the Price for the Products: 

[* * *]

The following cost items are not included in the Price for the Products: 

[* * *]

 

 

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

SCHEDULE C

ANNUAL STABILITY TESTING 

Patheon and Client will agree in writing on any stability testing to be performed by Patheon on the Products.  The Quality Agreement will specify the commercial and Product stability protocols applicable to the stability testing and the fees payable by Client for this testing including the Price for the Product withdrawn for the stability testing.

 

 

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH [* * *] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

SCHEDULE D

ACTIVE MATERIALS

 

	
Active Materials
	
Supplier

	
ptk0796
	
 

 

[* * *]

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