UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 10-K/A

Amendment No. 1

 

 

 

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended: December 31, 2016

or

 

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number: 001-36066

 

 

PARATEK PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   33-0960223

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

75 Park Plaza

Boston, MA 02116

(617) 807-6600

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive office)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Name of exchange on which registered

Common Stock, par value $0.001 per share   The NASDAQ Global Market

Securities registered pursuant to Section 12(g) of the Act: None

 

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☐    No  ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.    Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer      Accelerated filer  
Non-accelerated filer   ☐  (Do not check if a smaller reporting company)    Smaller reporting company  
Emerging growth company       

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ☐    No  ☒

The aggregate market value of the common stock of the registrant held by non-affiliates of the registrant on June 30, 2016, the last business day of the registrant’s second fiscal quarter was: $259,770,210.

As of February 28, 2017 there were 24,286,212 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement for the registrant’s 2017 Annual Meeting of Stockholders to be filed pursuant to Regulation 14A within 120 days of the registrant’s year ended December 31, 2016 are incorporated herein by reference into Part III of this Annual Report on Form 10-K.

 

 

 


EXPLANATORY NOTE – EXHIBIT FILING ONLY

Paratek Pharmaceuticals, Inc. (the “Company”) is filing this Amendment No. 1 (this “Amendment”) to its Annual Report on Form 10-K for the year ended December 31, 2016 (the “Form 10-K”), originally filed on March 2, 2017. This Amendment is an exhibit-only filing in response to comments received from the Securities and Exchange Commission regarding a request for confidential treatment of certain portions of Exhibits 10.27, 10.28 and 10.29 originally filed with the Form 10-K. This Amendment is being filed solely to re-file Exhibits 10.27, 10.28 and 10.29 based on Commission comments. In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications by our principal executive officer and principal financial officer are filed as exhibits to this Amendment.

This Amendment is limited in scope to the items identified above and should be read in conjunction with the Form 10-K. This Amendment does not reflect events occurring after the filing of the Form 10-K and no revisions are being made to the Company’s financial statements pursuant to this Amendment. Other than the filing of the information identified above, this Amendment does not modify or update the disclosure in the Form 10-K in any way.


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Boston, State of Massachusetts, on the 5th day of May, 2017.

 

Paratek Pharmaceuticals, Inc.
By:  

/s/    Michael F. Bigham        

 

Michael F. Bigham

Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/    Michael F. Bigham        

  

Chairman of the Board of Directors and Chief Executive Officer

(Principal Executive Officer)

  May 5, 2017
Michael F. Bigham     

/s/    Douglas W. Pagán        

  

Chief Financial Officer

(Principal Financial and Accounting Officer)

  May 5, 2017
Douglas W. Pagán     

*

   President, Chief Operating Officer, Chief Medical Officer and Director   May 5, 2017
Evan Loh, M.D.     

*

   Director   May 5, 2017
Thomas J. Dietz, Ph.D.     

*

   Director   May 5, 2017
Timothy R. Franson, M.D.     

*

   Director   May 5, 2017
Richard J. Lim     

*

   Director   May 5, 2017
Kristine Peterson     

*

   Director   May 5, 2017
Robert S. Radie     

*

   Director   May 5, 2017
Jeffrey Stein, Ph.D.     

 

*By:  

/s/ Douglas W. Pagán

  Douglas W. Pagán
  Attorney-in-fact


EXHIBIT INDEX

 

Exhibit

No.

  

Exhibit Description

10.27*^    Manufacturing and Services Agreement by and between the Company and Almac Pharma Services Limited, dated as of December 30, 2016.
10.28*^    Manufacturing and Services Agreement by and between the Company and CIPAN - Companhia Industrial Produtora de Antibióticos, S.A., dated as of November 2, 2016.
10.29*^    Outsourcing Agreement by and between the Company and CARBOGEN AMCIS AG, dated as of December 30, 2016.
31.1*    Certification of the Company’s Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities and Exchange Act of 1934, as amended, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*    Certification of the Company’s Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities and Exchange Act of 1934, as amended, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*    Certification of the Company’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*    Certification of the Company’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

* Filed herewith.
^ Confidential treatment has been requested as to certain portions, which portions have been omitted and submitted separately to the Securities and Exchange Commission.

EXHIBIT 10.27

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.

Execution Version

MANUFACTURING AND SERVICES AGREEMENT

THIS MANUFACTURING AND SERVICES AGREEMENT (this “ Agreement ”) is made and entered into as of December 30, 2016 (the “ Effective Date ”), by and between Paratek Pharmaceuticals, Inc., a corporation organized and existing under the laws of Delaware, with an address at 75 Park Plaza, 4 th Floor, Boston, Massachusetts 02116, United States (“ Paratek ”), on the one hand, and Almac Pharma Services Limited, a company organized and existing under the laws of Northern Ireland with an address at Almac House, 20 Seagoe Industrial Estate, Craigavon, Northern Ireland, BT63 5QD (“ Almac ”), on the other hand. Paratek and Almac are collectively referred to herein as the “ Parties ”, and each, a “ Party ”.

RECITALS

WHEREAS, Almac is experienced in the manufacture and packaging of finished drug products in the antibiotic field;

WHEREAS, Almac has the capability to manufacture Omadacycline oral solid dosage tablets in bulk form meeting the Specifications (as defined below) (the “ Product ”);

WHEREAS, Paratek intends to develop, market and sell Paratek Products (as defined below), including the Product; and

WHEREAS, Paratek desires to have Almac manufacture the Product for Paratek and Almac desires to do so all on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

 

1. DEFINITIONS

1.1 Definitions . As used in this Agreement, the following capitalized terms have the meanings indicated below:

1.1.1 “ Affiliate ” means, with respect to any Person, any other Person which directly or indirectly controls, is controlled by, or is under common control with that Person at any time during the period for which the determination of affiliation is being made. The term “control” (including, with correlative meaning, the terms “controlling”, “controlled by” and “under common control with”), as used in this Section  1.1.1 with respect to any Person, means the possession, directly or indirectly, of the power to elect a majority of the board of directors (or other governing body) or to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

1.1.2 “ Agreement ” has the meaning set forth in the preamble hereto.


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.

 

1.1.3 “ Almac ” has the meaning set forth in the preamble hereto.

1.1.4 “ Almac Improvement ” means any Invention that [* * *].

1.1.5 “ Almac Representatives ” has the meaning set forth in Section  13.1.2 .

1.1.6 “ Almac Technology ” means (a) all intellectual property and embodiments thereof, including any Inventions, owned by Almac or its Affiliates as of the date hereof that are not Paratek Technology or Joint Technology and (b) the Almac Improvements.

1.1.7 “ Applicable Laws ” has the meaning set forth in Section  8.1 .

1.1.8 “ Backup Supplier ” has the meaning set forth in Section  5.2 .

1.1.9 “ Batch ” means, at any given time, a discrete output or isolation from a set of unit operations described in the then-current batch record instructions for the Product. The batch size for the Product shall be related to the capacity of a given equipment train and is dependent on the maximum utilization of the bottle-neck reactor or vessel. As of the Effective Date, a Batch of the Product is a [* * *] blend, which batch size may be modified from time to time.

1.1.10 “ Business Day ” means a day on which banking institutions in Boston, Massachusetts and Northern Ireland are open for business.

1.1.11 “ 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.

1.1.12 “ Calendar Year ” means each successive period of twelve (12) consecutive months commencing on January 1 and ending on December 31; provided , however , that (a) the first Calendar Year of the Term shall begin on the Effective Date and end on December 31, 2016 and (b) the last Calendar Year of the Term shall end on the effective date of expiration or termination of this Agreement.

1.1.13 “ CDA ” means the Mutual Confidentiality Agreement between Paratek and Almac Group Limited and its Affiliates, dated as of February 25, 2016.

1.1.14 “ Change of Control ” means any transaction or series of transactions wherein (a) the voting securities of Almac outstanding immediately prior thereto cease to represent at least fifty percent (50%) of the combined voting power of the surviving entity immediately after such transaction or transactions; (b) the stockholders or equity holders of Almac approve a plan of complete liquidation of Almac, or an agreement for the sale or disposition by Almac of all or substantially all of Almac’s assets, other than to an Affiliate; (c) a Third Party becomes the beneficial owner of fifty percent (50%) or more of the combined voting power of the outstanding securities of Almac or (d) substantially all of Almac’s business or assets which relate to this Agreement are sold or otherwise transferred to a Third Party.

 

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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.

 

1.1.15 “ Claims ” means any and all claims, demands, suits, Losses (as hereinafter defined), liability, damage, fines, expenses and costs (including without limitation attorney’s fees and expenses and settlement costs) arising from any cause of action brought by any party (including without limitation either Party and/or a Third Party or Third Parties), whether in contract, tort (including, without limitation, negligence), warranty, strict liability, product liability, statutory duty or otherwise.

1.1.16 “ Confidential Information ” means, with respect to any Party, such Party’s technology, data, know-how, or information, whether written or oral, technical or non-technical, including, but not limited to, financial statements, reports, pricing, trade secrets, secret processes, formulae, samples, customer data (including, but not limited to, customer lists), the formulation of pharmaceutical dosage forms and compounds, manufacturing procedures, manufacturing processes, manufacturing equipment, manufacturing batch records, plant layouts, product volumes, quality control procedures, and quality control standards and the like, that is disclosed to the other Party. Confidential Information of Paratek shall include Manufacturing Information, any “Confidential Information” (as defined under the CDA) of Paratek disclosed by Paratek to Almac or any Affiliate of Almac under the CDA and Paratek Technology. Confidential Information of Almac shall include any “Confidential Information” (as defined under the CDA) of Almac disclosed by Almac to Paratek under the CDA.

1.1.17 “ Current Good Manufacturing Practice ” or “ cGMP ” means, at any given time, the current standards for the manufacture of pharmaceuticals, as set forth in the FD&C Act and applicable regulations promulgated thereunder, as amended from time to time, and such standards of good manufacturing practice as are required by the applicable laws and regulations of the United States, the European Union and any other countries agreed by the Parties in writing or pursuant to the Quality Agreement, to the extent such standards are not inconsistent with cGMP under the FD&C Act.

1.1.18 “ Effective Date ” has the meaning set forth in the preamble hereto.

1.1.19 “ Facility ” means Almac’s facility located at Seagoe Industrial Estate, Craigavon, Northern Ireland or any other facility approved in writing by the Parties for the Manufacture of the Product.

1.1.20 “ FDA ” means the United States Food and Drug Administration or any successor entity thereto.

1.1.21 “ FD&C Act ” means the Federal Food, Drug and Cosmetic Act, as the same may be amended or supplemented from time to time.

1.1.22 “ Firm Forecast Period ” has the meaning set forth in Section  2.2 .

1.1.23 “ Force Majeure Event ” has the meaning set forth in Section  16.1 .

1.1.24 “ Indemnified Party ” has the meaning set forth in Section  13.1.3 .

1.1.25 “ Indemnifying Party ” has the meaning set forth in Section  13.1.3 .

1.1.26 “ Initial Term ” means the [* * *] period commencing on the Effective Date.

 

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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.

 

1.1.27 “ Inspection Period ” has the meaning set forth in Section  9.2.1 .

1.1.28 “ Invention ” means any development, information, invention, improvement, know-how, data or intellectual property, whether or not reduced to practice and whether or not patentable.

1.1.29 “ Joint Technology ” has the meaning set forth in Section  11.1.3 .

1.1.30 “ Laboratory ” has the meaning set forth in Section  9.3.1 .

1.1.31 “ Latent Defect ” shall mean any defect in a Product that is not reasonably discoverable through Paratek’s (or Paratek’s designee’s) normal incoming goods inspection verification methods and procedures, such methods and procedures to be in accordance with the Quality Agreement.

1.1.32 “ Losses ” has the meaning set forth in Section  13.1.1 .

1.1.33 “ Manufacture ,” “ Manufactured ” or “ Manufacturing ” means all activities involved in the production of the Product to be supplied to Paratek or its Affiliates hereunder, including the preparation, formulation, finishing, testing, storage and packaging for shipment of the Product and the handling, storage and disposal of any residues or wastes generated thereby.

1.1.34 “ Manufacturing Information ” means all information, instructions and data relating to the Manufacture of the Product provided by Paratek to Almac hereunder, including the Specifications, Methods of Analysis and all formulas and processes.

1.1.35 “ Materials ” means all materials, including all raw materials, and ingredients required for the Manufacture of the Product, the specifications for which are set out in the Specifications.

1.1.36 “ Methods of Analysis ” means the methods of analysis for the Product set forth in the Quality Agreement.

1.1.37 [ * * *]

1.1.38 [ * * *]

1.1.39 [ * * *]

1.1.40 “ Paratek ” has the meaning set forth in the preamble hereto.

1.1.41 “ Paratek Improvement ” means any Invention [* * *].

1.1.42 “ Paratek Licensee ” means any Third Party to whom Paratek grants a license or a right to research, develop, make, have made, use, sell, have sold, import, export or otherwise exploit the Product or a Paratek Product.

 

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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.

 

1.1.43 “ Paratek Materials ” means the Materials of Paratek that are required by Almac for the Manufacture of the Product or the performance of Services for Paratek and are supplied by Paratek to Almac pursuant to this Agreement. A description of all Paratek Materials is set forth on Exhibit B .

1.1.44 “ Paratek Product ” means any pharmaceutical product owned, controlled or sold by Paratek, its Affiliates or Paratek Licensees that incorporates or is derived from the Product.

1.1.45 “ Paratek Representatives ” has the meaning set forth in Section  13.1.1 .

1.1.46 “ Paratek Technology ” means (a) all intellectual property and embodiments thereof, including any Inventions, owned by Paratek as of the Effective Date that are not Joint Technology and (b) the Paratek Improvements.

1.1.47 “ Party ” and “ Parties ” have the meaning set forth in the preamble hereto.

1.1.48 “ Person ” means any natural person, corporation, general partnership, limited partnership, proprietorship, other business organization, trust, union, association or governmental authority.

1.1.49 “ Product ” has the meaning set forth in the recitals hereto.

1.1.50 “ Quality Agreement ” means the written Quality Agreement between the Parties dated as of December 2, 2016.

1.1.51 “ Recall ” means any recall, withdrawal or corrective action (whether voluntary or mandatory) or issue of an “NDA Field Alert” (as defined in 21 CFR 314.81).

1.1.52 “ Regulatory Approval ” means all authorizations by the competent Regulatory Authorities which are required for the manufacture, marketing, promotion, pricing and sale of the Product in a given country or regulatory jurisdiction in the Territory.

1.1.53 “ Regulatory Authority ” means any national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity involved in the granting of Regulatory Approval for the Product in the Territory.

1.1.54 “ Rejection Notice ” has the meaning set forth in Section  9.2.1 .

1.1.55 “ Renewal Term ” means each consecutive [* * *] period commencing on the expiration of the Initial Term or immediately preceding Renewal Term, until this Agreement is terminated pursuant to Article 14 .

1.1.56 “ Rolling Clinical Forecast ” has the meaning set forth in Section  2.2 .

1.1.57 “ Rolling Commercial Forecast ” has the meaning set forth in Section  2.2 .

 

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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.

 

1.1.58 “ Rolling Forecast ” means a Rolling Clinical Forecast or a Rolling Commercial Forecast, as applicable.

1.1.59 “ Scope of Work ” has the meaning set forth in Section  3.1 .

1.1.60 “ Seizure ” means any action by FDA or any other Regulatory Authority to detain or destroy the Product or prevent the release of the Product.

1.1.61 “ Services ” has the meaning set forth in Section  3.1 .

1.1.62 “ Services Agreement ” has the meaning set forth in Section  3.1 .

1.1.63 [* * *]

1.1.64 “ Specifications ” means the specifications for the Product set forth in the Quality Agreement, as such may be amended from time to time in accordance with its terms.

1.1.65 “ Supply Price ” has the meaning set forth in Section  7.1 .

1.1.66 “ Term ” means, in the aggregate, the Initial Term and all Renewal Terms, if any.

1.1.67 “ Territory ” means the United States of America and its territories and possessions and any other countries in the world added to the definition of “Territory” pursuant to Section  2.9 .

1.1.68 “ Third Party ” means any Person other than Paratek, Almac and their respective Affiliates.

1.1.69 [* * *]

1.1.70 [* * *]

1.1.71 [* * *]

1.1.72 Construction of Certain Terms and Phrases . Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the term “or” shall have the inclusive meaning of the term “and/or”; (iv) “including” and its cognates shall have the non-limiting meaning of “including, without limitation”; (v) the term “will” shall have the same meaning and import as the term “shall”; (vi) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement; (vii) the terms “Article” or “Section” refer to the specified Article or Section of this Agreement; and (viii) Article and Section headings shall not affect the meaning or construction of any provision of this Agreement.

 

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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.

 

2. GENERAL; FORECASTS AND ORDERS

2.1 Manufacture . Almac shall Manufacture, package and supply the Product to Paratek or Paratek’s designee in such quantities and at such times as ordered by Paratek, in accordance with the Specifications and otherwise pursuant to the terms of this Agreement in exchange for payment of the applicable Supply Price for such Product. During the Term, Almac shall maintain the resources necessary to Manufacture the Product pursuant to the terms of this Agreement.

2.2 Forecasts . Within [* * *] after the Effective Date, Paratek shall submit to Almac a forecast of clinical supply of the Product that Paratek anticipates ordering from Almac during the [* * *] period (broken down by month and, if applicable, country in the Territory) following the date of such forecast and Paratek shall update such forecast on a rolling [* * *] basis every [* * *] thereafter (each, a “ Rolling Clinical Forecast ”) until Paratek no longer requires any clinical supply of the Product. Beginning [* * *] prior to the anticipated launch of a Paratek Product in the Territory and for the remainder of the Term, Paratek shall submit to Almac a forecast of commercial supply of the Product that Paratek anticipates ordering from Almac during the [* * *] period (broken down by month and, if applicable, country in the Territory) following the date of such forecast and Paratek shall update such forecast on a rolling [* * *] basis every [* * *] thereafter (each, a “ Rolling Commercial Forecast ”), provided that Paratek shall provide an updated Rolling Commercial Forecast within [* * *] after such Paratek Product receives Regulatory Approval by the applicable Regulatory Authority in a country in the Territory. Paratek shall place purchase orders for at least the quantity of the Product specified in the first [* * *] of each such Rolling Clinical Forecast or Rolling Commercial Forecast (such period, the “ Firm Forecast Period ”) and the remaining [* * *] of such forecast shall be a good faith estimate and shall be non-binding, provided that Almac may place orders with its suppliers for raw materials or packaging materials as reasonably necessary in order to Manufacture the quantities of the Product specified in the first [* * *] of each Rolling Clinical Forecast or Rolling Commercial Forecast. In the event that Paratek and Almac agree that Almac or its Affiliate will perform the secondary packaging of the Product, the Parties will discuss, in good faith, amending the Firm Forecast Period for purchase orders of Product to appropriately reflect such additional service to be conducted in an Almac facility in the United States.

2.3 Orders . Paratek may submit purchase orders for the Product to Almac from time to time during the Term and at least [* * *] prior to the requested date of delivery. Each purchase order shall specify (a) the quantity of the Product ordered for delivery; and (b) the delivery date for that order. Almac shall Manufacture and supply the Product in accordance with this Agreement and each applicable purchase order. [* * *] after receiving any purchase order from Paratek, Almac shall be deemed to have accepted such purchase order if such purchase order has not been rejected by Almac in accordance with the terms and conditions of this Agreement. On or prior to such acceptance, Almac shall provide Paratek with a Manufacturing schedule for the Product subject to such purchase order. With respect to any of the [* * *] in the then most recent Firm Forecast Period, Almac may reject, by written notice to Paratek, any portion of any purchase order to the extent that fulfilling the entirety of such purchase order would cause the aggregate number of units of the Product supplied by Almac during such month to exceed [* * *] of the units of such Product forecast for such month in the applicable Rolling Forecast; provided , however , that Almac will use its reasonable efforts to, but shall not be obligated to, supply such Product in excess of such [* * *].

 

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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.

 

2.4 Cancellations . Paratek may cancel any firm purchase order (in whole or in part) at any time prior to the delivery for any quantity of the Product that Almac has not completed Manufacturing pursuant to such purchase order at the time that notice of cancellation is received by Almac. If, at the time of Paratek’s cancellation of a purchase order:

2.4.1 it is more than [* * *] prior to the delivery date of such purchase order, Paratek will reimburse Almac for [* * *];

2.4.2 it is less than [* * *] prior to the delivery date of such purchase order, but Almac has not commenced Manufacture of Products pursuant to such purchase order, Paratek will reimburse Almac for [* * *]; or

2.4.3 it is less than [* * *] prior to the delivery date of such purchase order, and Almac has commenced Manufacture of Products pursuant to such purchase order, Paratek shall reimburse Almac for [* * *].

2.5 Materials . Almac shall be responsible for obtaining the Materials for the Manufacture of Products. The cost of Materials paid by Almac and incurred in accordance with this Agreement shall be included in the prices set out in the Scope of Work to the extent such costs are related to Services and included in the Supply Price to the extent such costs are related to Products; provided , however , that the costs for any Material shall never be double-counted under this Agreement.

2.6 Paratek Materials . Paratek shall use commercially reasonable efforts to deliver the Paratek Materials no less than [* * *] prior to the intended delivery date of the Products incorporating such Paratek Materials; [* * *]. In the event that Paratek is unable to deliver the Paratek Materials [* * *] prior to the intended delivery date, the Parties shall discuss in good faith whether any changes to the delivery date and/or costs of the Services are necessary as a result of such delay. Paratek will deliver the Paratek Materials to Almac [* * *]. Paratek shall be responsible for ensuring that the Paratek Materials have been manufactured in accordance with cGMP and, unless otherwise set forth herein, shall provide the Paratek Materials to Almac free of charge.

2.7 Priority of Supply . Almac and its Affiliates shall maintain capacity in the Facility to fill Paratek’s forecasted orders for the Product in a manner consistent with this Agreement, including purchase orders placed hereunder.

2.8 Equipment and Tools . In no event shall Almac sell, license, transfer or otherwise dispose of any equipment or tools funded by Paratek, including any transfer of such equipment or tools to another facility of Almac or its Affiliates, without Paratek’s prior written consent.

2.9 Territory Expansion . At any time during the Term, Paratek may, by written notice to Almac, request to expand the Territory under this Agreement to include one (1) or more additional countries or territories and Almac’s consent to such expansion shall not be unreasonably withheld, conditioned or delayed. Promptly following such notification, the Supply and Quality Committee shall discuss any requirements to accommodate such expansion of the Territory (including changes to costs) and if the Parties agree on the identity and implementation of such requirements, the Parties shall execute an amendment that (a) amends the definition of “Territory” under Section  1.1.67 to include such

 

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additional countries or territories and (b) modifies the provisions of this Agreement and/or the Quality Agreement, as necessary in order to reflect the regulatory requirements of such additional countries or territories. For clarity, Paratek shall not be obligated to amend the definition of Territory at any point during the Term.

2.10 Supply to Paratek Licensees . In the event Paratek delivers a written request to Almac requesting that Almac engage in negotiations with a Paratek Licensee on the terms of a definitive agreement pursuant to which Almac would Manufacture and supply the Product to such Paratek Licensee or a designee of a Paratek Licensee, Almac shall use commercially reasonable good faith efforts to negotiate and execute such agreement on substantially similar terms to the terms of this Agreement.

 

3. SERVICES

3.1 Scopes of Work . Almac shall perform for Paratek certain services related to the development, technology transfer and Manufacturing (including scale-up and validation) of the Product (the “ Services ”) as set forth in one (1) or more statements of work to be mutually agreed by the Parties and attached as addenda to this Agreement (each, a “ Scope of Work ”). Each Scope of Work shall be automatically incorporated by reference into and governed by the terms and conditions of this Agreement. A Scope of Work shall include the scope of Services to be provided by Almac, any deliverables or milestones in connection with such Services, the fees payable for such Services, the applicable standard of service to be provided and any other relevant terms and conditions not already set forth in this Agreement. In the event of any conflict between this Agreement and any Scope of Work, the terms of this Agreement shall govern unless otherwise mutually agreed by the Parties in writing. The Parties may amend the activities or costs set forth in any Scope of Work by mutual written agreement. [* * *].

3.2 Fees . As part of a Scope of Work, the Parties will negotiate reasonable costs for the Services to be performed by Almac for Paratek under such Scope of Work. Almac shall submit a cost estimate to Paratek for any such Service, and shall not commence any such Service until Paratek provides written notice of its approval of such cost estimate (or the Parties otherwise mutually agree on the costs for such Service). As a general principle, any such cost estimate shall reflect [* * *].

3.3 Payment . Almac shall invoice Paratek for any Services upon completion of such Services. Paratek shall pay Almac for such Services within [* * *] from the date of invoice; provided that, pending resolution regarding any disagreement between the Parties as to the amount of such invoice, Paratek is not obligated for any payment of the disputed amount with respect to such Services. Any invoice submitted to Paratek by Almac shall be sent via e-mail to a Paratek-designated e-mail address (in addition to any other forms of delivery) and the date of any invoice shall be dated within [* * *] of the date of such invoice’s e-mail delivery to Paratek.

 

4. SUPPLY AND QUALITY COMMITTEE

4.1 Composition . The Parties agree that the Supply and Quality Committee shall be set up when the Parties agree in good faith that there is reasonable need to have a Supply and Quality Committee due to the scale or nature of the activities being conducted under this Agreement. The

 

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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 thirty (30) days of agreement between the Parties on the establishment of the Supply and Quality Committee, and each Party, from time to time, may substitute one (1) 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. For clarity, the Parties may, by mutual consent, elect to use the Supply and Quality Committee under the Quality Agreement as the Supply and Quality Committee under this Agreement.

4.2 Meetings . The Supply and Quality Committee shall meet as necessary to carry out its duties under Section  4.3 , but no more often than once per Calendar Quarter, unless otherwise agreed by its members. The Supply and Quality Committee shall meet in-person at Paratek or Almac or, alternatively, by means of teleconference, videoconference or other similar communications equipment.

4.3 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 Scope of Work), 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 Almac’s capacity and short-term and long-term planning for clinical and commercial supply of the Product, including anticipating any capacity shortfalls and discussing the cost allocation of investments required to increase capacity or improve efficiencies; (c) reviewing and discussing draft Scopes of Work; (d) discussing the cost allocation, if any, of extraordinary costs incurred by Almac in connection with the Manufacture of the Product or provision of Services; and (e) establishing resource priorities and resolving resource conflicts.

4.4 Decision-Making . All of each Party’s representatives on the Supply and Quality Committee shall collectively have one (1) vote 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.

 

5. [* * *] ALTERNATIVE SUPPLY

5.1 [* * *]

5.2 Alternative Supply . At any time during the Term, Paratek may elect to qualify one (1) or more alternative manufacturing facilities (whether owned by a Third Party, Paratek or by one of Paratek’s Affiliates) to Manufacture the Product (each, a “ Backup Supplier ”). Paratek shall be responsible for any and all costs associated with qualifying Backup Suppliers. Almac shall use commercially reasonable efforts to cooperate with the qualification of any Backup Supplier, including: (a) providing documentation reasonably required to enable technology transfer of all Almac Technology, Joint Technology and, to the extent in its possession, Paratek Technology, necessary or useful for the Manufacture of the Product; provided that, to the extent that such technology and know-how constitutes Almac Confidential Information it shall be subject to the provisions of Article 15 and

 

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Paratek’s designated alternative supplier shall be required to enter into a confidentiality agreement with Almac containing substantially the same terms as Article 15 . The Parties shall discuss in good faith any requirement for additional consulting services related to the Manufacture, quality control and quality assurance of the Product. Paratek shall reimburse Almac for performing such services described in the preceding sentence at [* * *] within [* * *] of invoice.

 

6. DELIVERY; FAILURE TO SUPPLY

6.1 Delivery . All Product shall be delivered [* * *]. Almac will notify Paratek at least five (5) Business Days prior to any shipment of the Product. Delivery shall be made at such time as the Products are placed at the disposal of Paratek at Almac’s Facility. If requested by Paratek, Almac shall assist Paratek in arranging shipment of the Product to Paratek or Paratek’s designated location in accordance with Paratek’s instructions and at Paratek’s risk and expense. All shipments will be subject to the standard terms and conditions of the selected courier and Almac shall have no liability to Paratek for any loss, damage or delay in a shipment attributable to the selected courier or any Third Party.

6.2 [* * *]

6.3 Delivery Documentation . Delivery of the Products shall be made together with the relevant batch documentation as required for release and in accordance with the Quality Agreement, unless otherwise agreed in writing between the Parties from time to time.

6.4 Manufacturing Date . Almac shall schedule its Manufacturing operations so that, unless otherwise agreed in writing (Paratek’s agreement not to be unreasonably withheld, conditioned or delayed), at least [* * *] of the shelf life of the Products will remain on delivery of the Products.

6.5 Risk of Loss . [* * *]

6.6 Delay in Services Caused by Paratek . If Paratek causes any delay to Almac’s provision of the Services or Manufacture of Product, for reasons within Paratek’s control including but not limited to delay in providing information reasonably requested by Almac pursuant to this Agreement or a delay in the delivery of any Paratek Materials pursuant to this Agreement, [* * *]. [* * *].

6.7 Notice of Failure to Supply . If Almac is unable or anticipates that it will be unable to supply Product meeting Paratek’s forecasted requirements in a timely manner at any time during the Term, Almac shall provide prompt written notice to Paratek. Following such notice, the Parties shall discuss in good faith how to prevent or mitigate such inability to supply, including [* * *]. Almac shall consider in good faith any reasonable suggestions of Paratek to prevent or mitigate such inability to supply, the costs associated with such suggestions to be allocated as mutually agreed by the Parties.

6.8 [* * *]

 

7. PRICE AND PAYMENT

7.1 Supply Price . The price of the Product to be sold to Paratek during the Term shall be as set forth in Exhibit A attached hereto, subject to adjustment as set forth in Section  7.2 (such price for the Product, the “ Supply Price ”).

 

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7.2 Price Adjustments . Beginning prior to the [* * *], the Supply Price for the Product for the next Calendar Year shall be adjusted by mutual agreement of the Parties on a yearly basis at least [* * *] prior to the beginning of such Calendar Year, such adjustment to reflect: [* * *]. Almac will promptly provide to Paratek for Paratek’s review any documentation necessary in order to substantiate any adjustment to the Supply Price for a Product, such materials to be considered Almac’s Confidential Information hereunder.

7.3 Payment . Almac shall invoice Paratek upon delivery of the Products, in accordance with the delivery provisions set forth at Section  6.1 above and shall only charge Paratek for Products that are shipped to Paratek or Paratek’s designee pursuant to this Agreement. Paratek shall pay Almac for all supplied quantities of conforming Products within [* * *] from the date of invoice; provided that, pending resolution regarding any disagreement between the Parties as to conformance of a Product to the requirements of this Agreement or the Quality Agreement, Paratek is not obligated for any payment with respect to any Product Paratek believes to be non-conforming.

7.4 Taxes and Other Charges . All Product prices are stated exclusive of VAT or other similar taxes, Third Party shipping costs and customs duties. Paratek and Almac shall cooperate to eliminate or minimize the amount of any such taxes imposed on the transactions contemplated in this Agreement. Paratek is not responsible for any penalties or interest related to the failure of Almac to collect sales, use, VAT or similar taxes.

 

8. COMPLIANCE, QUALITY AND ENVIRONMENTAL

8.1 Compliance with Law . Almac shall conduct its Manufacturing operations hereunder in a safe and prudent manner, in compliance with cGMP and all other applicable laws and regulations of the United States and European Union (including, but not limited to, those dealing with occupational safety and health, those dealing with public safety and health, those dealing with protecting the environment, and those dealing with disposal of wastes) (“ Applicable Laws ”), and in compliance with all applicable provisions of this Agreement and the Quality Agreement. Almac shall obtain all necessary registrations and permits pertaining to activities contemplated by this Agreement and the Quality Agreement. To the extent necessary for the Regulatory Approval of the Product, Almac shall permit the inspection of the Facility by Regulatory Authorities and shall supply all documentation and information requested by Paratek to obtain or maintain Regulatory Approval of the Product.

8.2 Manufacturing Quality . Almac shall obtain all Materials from Almac’s existing suppliers or such other suppliers as may be approved in accordance with the terms of the Quality Agreement, and shall pay such suppliers on a timely and current basis. All Product shall be Manufactured at the Facility. [* * *].

 

9. QUALITY AUDITS; TESTING AND INSPECTION OF THE PRODUCT

9.1 Inspection and Auditing Rights . Paratek and its representatives shall have the right, at Paratek’s expense, to audit, inspect and observe the Facility, the performance by Almac of its obligations under this Agreement and the Quality Agreement, Almac’s compliance with Applicable Laws in the performance of its obligations under this Agreement and the Quality Agreement, and the handling, Manufacture, testing, inspection, storage, disposal and transportation of the Product by Almac

 

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and its permitted subcontractors, during normal business hours and upon at least [* * *] prior notice unless otherwise set forth in the Quality Agreement. Almac shall make available to Paratek all relevant records and reports during such audit or inspection. Almac agrees to respond to Paratek’s audit findings within [* * *] of receipt of Paratek’s audit report (such response may not be final but shall be responsive to the findings), to take prompt corrective action to remedy any observed violations of the terms of this Agreement, the Quality Agreement or of Applicable Laws and to be responsive to the recommendations contained therein. Such audits may be conducted no more than [* * *] at Paratek’s expense, provided that Paratek may also conduct follow-up audits or inspections at any time or times during a Calendar Year that are directed at [* * *]. The costs associated with any follow-up audit by Paratek shall be discussed in good faith and agreed between the Parties in advance.

9.2 Product Rejection and Inspection .

9.2.1 Paratek shall have a period of [* * *] from the date of delivery of a shipment of the Product, pursuant to Section  6.1 (the “ Inspection Period ”), to inspect, or cause to have inspected by a Third Party designated by Paratek, such shipment of the Product to determine whether such shipment conforms to Specifications [* * *]. [* * *].

9.2.2 [* * *]

9.3 Independent Testing .

9.3.1 [* * *]

9.3.2 [* * *]

9.3.3 [* * *]

9.4 [* * *]

9.5 Samples and Record Retention . Almac shall retain records and retention samples of each Batch of Product for at least [* * *] and shall make the same available to Paratek upon request. After the required holding period, Almac shall provide written notice to Paratek and, at Paratek’s direction, shall either destroy or otherwise disposition such retention samples at Almac’s expense. During and after the Term, Almac shall assist Paratek with respect to any complaint, issue or investigation relating to the Product.

9.6 Government Inspections . Each Party shall promptly notify the other Party if such Party receives notice from a Regulatory Authority regarding a cGMP investigation or other inspection directly related to the Product. If Almac receives advance notice of any such investigation, inspection or visit by any Regulatory Authority to inspect the Facility or review the Manufacture of the Product, Almac shall permit, to the extent permitted by Applicable Law and reasonably practicable, Paratek or its representatives to be present during such visit, at Paratek’s expense. Upon Paratek’s request, Almac shall provide Paratek with a copy of any report issued by such Regulatory Authority following such visit.

 

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9.7 Recalls and Seizure .

9.7.1 Each Party shall keep the other Party promptly and fully informed of any notification or other information whether received directly or indirectly which might result in the Recall or Seizure of Paratek Product(s). If either Party determines that it is necessary to Recall any Paratek Product, it shall immediately notify the other Party and Almac will collaborate with Paratek in connection with any Recall or Seizure. In any such situation, Paratek shall have the right to make all final decisions regarding a Recall or Seizure of Paratek Products.

9.7.2 [* * *]

9.7.3 Paratek shall be liable for the out-of-pocket costs and expenses actually incurred by Almac as a result of any Recall or Seizure to the extent such Recall or Seizure results from [* * *].

 

10. MANUFACTURING CHANGES

10.1 Voluntary Changes .

10.1.1 Paratek may propose any change to the Manufacturing process, the Manufacturing equipment, the packaging of the Product, the Specifications, the Materials, the sources of Materials or the Methods of Analysis by delivering a written notice to Almac of such proposed change. Within thirty (30) Business Days of receiving such notice (or such longer time as agreed between the Parties), Almac shall inform Paratek of any and all reasonable costs associated with implementing such change and if Paratek agrees to reimburse Almac for such costs, Almac shall implement such change as promptly as practicable in consultation in Paratek.

10.1.2 Almac shall not make any changes to the Manufacturing process, the packaging of the Product, the Specifications, the Materials, the sources of Materials or the Methods of Analysis except in accordance with the provisions of the Quality Agreement.

10.2 Required Changes . If FDA or any other Regulatory Authority requests or requires any change in the Manufacturing process, the Manufacturing equipment, the Specifications, the Materials, the source of Materials or Methods of Analysis with respect to the Product, the Parties shall promptly (but in no event more than fifteen (15) Business Days after receipt of the Regulatory Authority’s notice) discuss an implementation plan for such change, including the allocation of any associated reasonable costs for such change. If the Parties, after discussing the proposed change in reasonable good faith negotiations, cannot agree on the plan for implementing such change, the costs (or cost allocation) of implementing such change or Almac is technically or financially incapable of making such change, [* * *]. For clarity, in no event shall Almac be obligated to, with respect to such a change required or requested by a Regulatory Authority, (a) devote resources to implement such change if such change would be financially or operationally infeasible following the Parties’ good faith negotiations or (b) continue Manufacturing any Product if such Manufacturing would not be in compliance with Applicable Laws or cGMP due to such change. Each Party agrees to promptly forward to the other copies of any written communication received by such Party from the FDA or any other Regulatory Authority that may affect the Manufacture or supply of the Product as contemplated herein.

 

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11. INTELLECTUAL PROPERTY

11.1 Ownership .

11.1.1 Paratek shall have sole ownership of all Paratek Technology, including all Paratek Improvements, and shall have the sole right to prosecute, maintain and enforce such Paratek Technology in its sole discretion. If, at any time before or during the Term, Almac owns (solely or jointly) any Paratek Improvements, Almac agrees to assign and does hereby assign all right, title and interest in and to such Paratek Improvements to Paratek. Almac shall, and shall cause its Affiliates to, execute and deliver all requested assignments and other documents, and take such other actions as Paratek may reasonably request, in order to perfect and enforce Paratek’s rights in the Paratek Improvements.

11.1.2 Paratek acknowledges that the Almac Technology, as of the Effective Date, may include certain proprietary inventions, processes, know-how, trade secrets, methods, approaches, analyses, improvements, other intellectual properties and other assets including, but not limited to, clinical trial management analyses, analytical methods, procedures and techniques, computer technical expertise and proprietary software, and technical and conceptual expertise in the area of manufacture, packaging and supplying products, in each case, that have been developed independently by Almac without the benefit of any information provided by Paratek or any access to the Paratek Technology. Almac shall have sole ownership of all Almac Technology, including all Almac Improvements, and shall have the sole right to prosecute, maintain and enforce such Almac Technology in its sole discretion. If, at any time before or during the Term, Paratek owns (solely or jointly) any Almac Improvements, Paratek agrees to assign and does hereby assign all right, title and interest in and to such Almac Improvements to Almac. Paratek shall, and shall cause its Affiliates to, execute and deliver all requested assignments and other documents, and take such other actions as Almac may reasonably request, in order to perfect and enforce Almac’s rights in the Almac Improvements.

11.1.3 Except as expressly set forth in this Section  11.1 , each Party shall own all right, title and interest in and to: (a) any and all Inventions made solely by its or its Affiliates’ employees, staff, agents or independent contractors in connection with their activities under this Agreement; (b) any and all patent rights claiming any Invention described in clause (a) of this Section  11.1.3 ; and (c) any and all know-how embodied by or in any Invention described in clause (a) of this Section  11.1.3 . Except as expressly set forth in this Section  11.1 , the Parties shall jointly own all right, title and interest in and to: (i) any and all Inventions made jointly by the Parties or their respective Affiliates or their or their Affiliates’ employees, staff, agents or independent contractors in connection with their activities under this Agreement; (ii) any and all patent rights claiming any Invention described in clause (i) of this Section  11.1.3 ; and (iii) any and all know-how embodied by or in any Invention described in clause (i) of this Section  11.1.3 (such Inventions, patent rights and know-how described in clauses (i) through (iii), the “ Joint Technology ”). Subject to the license grants set forth in this Agreement, each Party shall be free to exploit, either itself or through the grant of licenses to Third Parties (which Third Party licenses may be further sublicensable), Joint Technology, throughout the world without restriction, without the need to obtain further consent from the other Party, and without any duty to account or payment of any compensation to the other Party. Paratek shall have the sole right to prosecute, maintain and enforce any patent rights within the Joint Technology, in its sole discretion. Inventorship shall be determined in accordance with United States patent laws.

 

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11.2 Licenses .

11.2.1 Subject to the terms and conditions of this Agreement, during the Term, Paratek hereby grants to Almac a non-exclusive, worldwide, non-transferable, non-sublicensable, royalty-free license under the Paratek Technology, including the Paratek Improvements, solely to the extent necessary for Almac to perform its obligations under this Agreement and the Quality Agreement, for the sole purpose of performing such obligations.

11.2.2 [* * *]

11.3 Manufacturing Process Transfer . Paratek shall have the right, on an annual basis during the Term, to conduct an audit of Almac’s Manufacturing process with respect to the Products in order to identify any updates to the technology used in, or any other improvements to, such Manufacturing process. During the Term, upon Paratek’s reasonable request, Almac shall transfer to Paratek all Almac Technology, Paratek Improvements and Joint Technology in Almac’s possession and not previously transferred to Paratek, for the purpose of enabling Paratek to exercise the license set forth in Section  11.2.2 .

11.4 Employee Invention Assignment . Almac acknowledges and agrees that, with respect to any past, current or future employee, staff, contractor, subcontractor or other agent of Almac or its Affiliates who has conducted services or activities related to the development or Manufacture of Products for or to Paratek, Almac has entered into a binding written arrangement(s) with each such person that requires that such person assign to Almac all of its right, title and interest in and to any inventions (including, without limitation, knowhow, improvements, ideas, information, materials and processes) and all intellectual property rights therein that such person, alone or jointly with others, conceives, develops or reduces to practice during their period of employment or work with Almac or its Affiliate.

11.5 [†]

 

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12. REPRESENTATIONS AND WARRANTIES

12.1 Representation and Warranties of Each Party . Each of Paratek and Almac hereby represents, warrants and covenants to the other Party hereto as follows:

12.1.1 it is a corporation or entity duly organized and validly existing under the laws of the state or other jurisdiction of incorporation or formation;

12.1.2 the execution, delivery and performance of this Agreement by such Party have been duly authorized by all requisite corporate action and do not require any shareholder action or approval;

12.1.3 it has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder;

12.1.4 the execution, delivery and performance by such Party of this Agreement and its compliance with the terms and provisions hereof do not and will not conflict with or result in a breach of any of the terms and provisions of or constitute a default under (i) a loan agreement, guaranty, financing agreement, agreement affecting a product or other agreement or instrument binding or affecting it or its property; (ii) the provisions of its charter or operative documents or by laws; or (iii) any order, writ, injunction or decree of any court or governmental authority entered against it or by which any of its property is bound; and

12.1.5 it shall comply with all applicable laws and regulations relating to its activities under this Agreement.

12.2 Representations and Warranties of Almac . Almac hereby further represents and warrants to Paratek as follows:

12.2.1 the Product at the time of delivery to Paratek (i) has been Manufactured, stored, packaged and shipped in accordance with cGMP and Applicable Laws; (ii) conforms to the Specifications, is, to the best of its knowledge, free from defects and is merchantable; (iii) is not adulterated or misbranded within the meaning of the FD&C Act; and (iv) has been stored and handled in accordance with the procedures set forth under this Agreement and the Quality Agreement;

12.2.2 as of immediately prior to the delivery of the Product to Paratek, Almac has good and marketable title to such Product and such Product is free from all liens, charges, encumbrances and security interests; and

12.2.3 Almac does not, at any time from and after the Effective Date, retain or use the services of (a) any person debarred under 21 U.S.C. § 335a or (b) any person who has been convicted of a crime as defined under the FD&C Act, in each case in any capacity associated with or related to the Manufacture or supply of the Product or any service rendered to Paratek under this Agreement or the Quality Agreement.

12.3 Representation by Legal Counsel . Each Party hereto represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has

 

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participated in the drafting hereof. In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption shall exist or be implied against the Party which drafted such terms and provisions.

 

13. INDEMNIFICATION, LIMITATION OF LIABILITY AND INSURANCE

13.1 Indemnification .

13.1.1 Almac shall indemnify and hold harmless Paratek, its directors, officers, employees and agents (collectively, the “ Paratek Representatives ”) from and against all damages, losses, liabilities, expenses, claims, demands, suits, penalties or judgments or administrative or judicial orders (including reasonable attorneys’ fees and expenses reasonably incurred) (collectively, “ Losses ”) that are incurred by the Paratek Representatives to, from or in favor of Third Parties to the extent resulting from or arising out of (i) [* * *]; (ii) the [* * *] actions or omissions of Almac or any Almac Representative; (iii) any breach by Almac of its representations, warranties or covenants in this Agreement; (iv) any assertion that the use of any Almac Technology in the Manufacture of the Product infringes any patent, copyright or trademark or misappropriates any trade secret or other intellectual property of any Third Party, except to the extent that any such allegation relates to the Manufacturing Information or Paratek Materials; or (v) Almac’s failure to comply with any Applicable Law (including environmental laws, regulations and orders and any failure by Almac to obtain and maintain any Regulatory Approvals relating to the Manufacturing of the Product and required to be obtained and maintained by Almac under Applicable Law), except, in each case ((i) through (v)), to the extent Paratek has an obligation to indemnify any Almac Representative pursuant to Section  13.1.2. The provisions of this Section shall survive the termination or expiration of this Agreement.

13.1.2 Paratek shall indemnify and hold harmless Almac, its directors, officers, employees and agents (collectively, the “ Almac Representatives ”) from and against all Losses that are incurred by the Almac Representatives to, from or in favor of Third Parties to the extent resulting from or arising out of (i) the [* * *] actions or omissions of Paratek or Paratek Representatives; (ii) any product liability claim based on the commercial use, sale and distribution of the Product; or (iii) any allegation that the use of the Manufacturing Information or Paratek Materials in accordance with this Agreement infringes any patent, copyright or trademark or misappropriate any trade secret or other intellectual property of any Third Party, except, in each case ((i) through (iii)), to the extent Almac has an obligation to indemnify any Paratek Representative pursuant to Section  13.1.1 . The provisions of this Section shall survive the termination or expiration of this Agreement.

13.1.3 Each Party and its directors, officers, employees or agents (an “ Indemnified Party ”) shall promptly notify the other Party (the “ Indemnifying Party ”), in writing, of any claim asserted or threatened against such Indemnified Party for which such Indemnified Party is entitled to indemnification hereunder from the Indemnifying Party. With respect to any such claim the Indemnified Party shall reasonably cooperate with and provide such reasonable assistance to such Indemnifying Party as such Indemnifying Party may reasonably request, and all reasonable out-of-pocket costs of such assistance shall be paid by the Indemnifying Party. Such reasonable assistance may include providing copies of all relevant correspondence and other materials that the Indemnifying Party may reasonably request. The obligations of an Indemnifying Party under Sections 13.1.1 and 13.1.2 are conditioned upon the delivery of written notice to the Indemnifying Party of any asserted or threatened

 

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claim promptly after the Indemnified Party becomes aware of such claim, provided that the failure of the Indemnified Party to give such notice or any delay thereof shall not affect the Indemnified Party’s right to indemnification hereunder, except to the extent that such failure or delay impairs the Indemnifying Party’s ability to defend or contest any such claim. The Indemnifying Party shall have the right to assume the defense of any suit or claim for which indemnification is sought. If the Indemnifying Party defends the suit or claim, the Indemnified Party may participate in (but not control) the defense thereof at its sole cost and expense. An Indemnifying Party may not settle a suit or claim, without the consent of the Indemnified Party, if such settlement would (a) impose any monetary obligation on the Indemnified Party for which indemnification is not provided hereunder, (b) not include a full release of claims with respect to the Indemnified Party, (c) require the Indemnified Party to submit to an injunction or (d) otherwise limit the Indemnified Party’s rights under this Agreement. Any payment made by an Indemnifying Party to settle any such suit or claim shall be at its (or its insurer’s) own cost and expense.

13.2 Limitations on Liability .

13.2.1 [* * *]

13.2.2 [* * *]

13.2.3 [* * *]

13.2.4 [* * *]

13.2.5 Nothing in this Section  13.2 shall be deemed to exclude or limit the liability of either Party for any form of liability that may not be excluded or limited by law, including liability for fraud.

13.2.6 [* * *]

13.3 Insurance . Almac shall obtain and maintain insurance adequate to cover its obligations under this Agreement, to the extent such obligations are insurable. Without limiting the foregoing, Almac shall obtain and maintain the following kinds of insurance with the minimum limits set forth below.

 

Kind of  Insurance

  

Minimum Limits

 

[* * *]

     [* * *

[* * *]

     [* * *

[* * *]

     [* * *

Upon request, Almac shall furnish insurance documentation as directed by Paratek, satisfactory in form and substance to Paratek, showing the above coverages, and providing for at least ten (10) days’ prior written notice to Paratek by the insurance company of cancellation or modification. Coverage shall be procured with carriers [* * *].

 

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14. TERM AND TERMINATION

14.1 Term . This Agreement shall commence on the Effective Date and continue, unless sooner terminated as set forth below in this Article 14 or in Article 16 , for the duration of the Initial Term. After the Initial Term, this Agreement shall continue for successive Renewal Terms unless either Party shall have given written notice of termination of this Agreement not less than [* * *] prior to the expiration of the Initial Term or the then-current Renewal Term.

14.2 Termination for Material Breach . In the event that either Party breaches any of its material obligations under this Agreement, the other Party may deliver written notice of such breach to the breaching Party. If the breaching Party fails to cure such breach within [* * *] following its receipt of such notice, the non-breaching Party may terminate this Agreement by written notice to the breaching Party.

14.3 Termination for Insolvency . In the event that (i) either Party is declared insolvent or bankrupt by a court of competent jurisdiction; (ii) either Party files a voluntary petition of bankruptcy in any court of competent jurisdiction or (iii) this Agreement is assigned by either Party for the benefit of creditors, then the other Party may terminate this Agreement by delivering written notice of termination, effective immediately. Such termination shall not give rise to the payment of any penalty, damages or indemnity by the terminating Party.

14.4 Termination Due to Material Product Events . In the event that either [* * *] Paratek may terminate this Agreement by [* * *] written notice to Almac.

14.5 Effects of Termination .

14.5.1 Termination of this Agreement for any reason shall be without prejudice to the right of either Party to receive all payments accrued and unpaid at the effective date of such termination or expiration, without prejudice to the remedy of either Party in respect to any previous breach of any of the representations, warranties or covenants herein contained and without prejudice to any other provisions hereof which expressly or necessarily call for performance after such termination.

14.5.2 Upon termination of this Agreement for any reason, (i) at Paratek’s request, Almac shall supply Paratek with its inventory of Materials, finished Product and/or works-in-progress, and Paratek shall pay Almac [* * *]; (ii) all Paratek Materials shall be returned to Paratek; and (iii) at Paratek’s request, Almac shall return to Paratek all retention samples of the Product.

14.5.3 Promptly following either Party’s delivery of a notice of termination to the other Party, upon Paratek’s request, Almac shall cooperate with Paratek to transfer and transition supply of the Product to a Third Party supplier. [* * *]

14.5.4 [* * *]

 

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14.6 Survival . The following provisions shall survive the expiration or termination of this Agreement: Article 1 (Definitions) (solely to the extent necessary to give meaning to other surviving sections), Section  6.1 (Delivery) and Section  6.5 (Risk of Loss) (in each case, solely with respect to Products and Materials remaining at the Facility following the effective date of expiration or termination), Section  7.3 (Payment) and Section  7.4 (Taxes and Other Charges) (in each case, solely with respect to payment obligations accruing prior to expiration or termination), Section  9.5 (Samples and Record Retention), Section  9.7 (Recalls and Seizures), Section  11.1 (Ownership), Section  11.2.2 [* * * ], Section  11.5 [* * *], Section  13.1 (Indemnification), Section  13.2 (Limitations on Liability), Section  13.3 (Insurance) (for [* * *] following expiration or termination of this Agreement), Section  14.5 (Effects of Termination), this Section  14.6 (Survival), Article 15 (Confidentiality), Article 17 (Notices) and Article 18 (General). Without limiting the foregoing, all of Almac’s obligations under this Agreement relating to compliance with cGMP in respect of the Materials, Paratek Products and Products shall continue in force following expiration or termination of this Agreement according to the requirements of cGMP.

 

15. CONFIDENTIALITY

15.1 Nondisclosure Obligation . Each of Almac and Paratek shall use only in accordance with this Agreement and shall not disclose to any Third Party the Confidential Information received by it from the other Party pursuant to this Agreement, without the prior written consent of the other Party. The foregoing obligations shall survive for a period of [* * *] after the termination or expiration of this Agreement. These obligations shall not apply to Confidential Information that:

 

  (i) is known by the receiving Party at the time of its receipt, and not through a prior disclosure by the disclosing Party, as documented by business records;

 

  (ii) is at the time of disclosure or thereafter becomes published or otherwise part of the public domain without breach of this Agreement by the receiving Party;

 

  (iii) is subsequently disclosed to the receiving Party by a Third Party who has the right to make such disclosure;

 

  (iv) is developed by the receiving Party independently of the Confidential Information received from the disclosing Party and such independent development can be documented by the receiving Party; or

 

  (v) is required by law, regulation, rule, act or order of any governmental authority or agency to be disclosed by a Party, provided that notice is promptly delivered to the other Party in order to provide an opportunity to seek a protective order or other similar order with respect to such Confidential Information and thereafter the disclosing Party discloses to the requesting entity only the minimum Confidential Information required to be disclosed in order to comply with the request, whether or not a protective order or other similar order is obtained by the other Party.

 

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15.2 Permitted Disclosures . Each Party may disclose the other Party’s Confidential Information to its employees and Affiliates on a need-to-know basis and to its agents or consultants to the extent required to accomplish the purposes of this Agreement; provided that the recipient Party obtains prior agreement from such agents and consultants to whom disclosure is to be made to hold in confidence and not make use of such Confidential Information for any purpose other than those permitted by this Agreement. Each Party will use at least the same standard of care as it uses to protect proprietary or confidential information of its own to ensure that such employees, agents, consultants, and Affiliates do not disclose or make any unauthorized use of the other Party’s Confidential Information.

15.3 Disclosure of Agreement . Neither Almac nor Paratek shall release to any Third Party or publish in any way any non-public information with respect to the terms of this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed, provided that either Party may disclose the terms of this Agreement

 

  (i) to the extent required to comply with applicable laws, including the rules and regulations promulgated by the United States Securities and Exchange Commission; provided , further , that prior to making any such disclosure, the Party intending to so disclose the terms of this Agreement shall (a) provide the non-disclosing Party with written notice of the proposed disclosure and an opportunity to review and comment on the intended disclosure which is reasonable under the circumstances and (b) shall seek confidential treatment for as much of the disclosure as is reasonable under the circumstances, including seeking confidential treatment of any information as may be requested by the other Party; or

 

  (ii) to one (1) or more Third Parties and/or their advisors in connection with a proposed spin-off, joint venture, divestiture, merger or other similar transaction involving all, or substantially all, of the Products, assets or business of the disclosing Party to which this Agreement relates or to lenders, investment bankers and other financial institutions of its choice solely for purposes of financing the business operations of such Party; provided , further , that either (a) the other Party has consented to such disclosure or (b) such Third Parties have signed confidentiality agreements with respect to such information on terms no less restrictive than those contained in this Article 15 .

15.4 Publicity . All publicity, press releases and other announcements relating to this Agreement or the transactions contemplated hereby shall be reviewed in advance by, and shall be subject to the approval of, both Parties.

 

16. FORCE MAJEURE AND SCIENTIFIC OBSTACLES

16.1 If the production, delivery, acceptance, or use of the Product specified for delivery under this Agreement, or the performance of any other obligation of one of the Parties hereunder is prevented, restricted or interfered with by reason of any cause or event beyond the reasonable control of such Party and without the fault or negligence of such Party (a “ Force Majeure Event ”), the Party so affected,

 

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upon prompt notice to the other Party, shall be excused from performing such obligation during the continuance of such Force Majeure Event. If such Force Majeure Event continues for a period of ninety [* * *] the other Party may terminate this Agreement by notice in writing, provided that such Force Majeure Event is continuing. The affected Party as a result of a Force Majeure Event shall use all reasonable efforts, at its own expense, to eliminate the Force Majeure Event and to resume performance as soon as practicable.

16.2 Without limiting Section  16.1 , if it becomes apparent to either Party at any stage in the provision of the Services that it will not be possible to complete the Services for scientific or technical reasons beyond the reasonable control of either Party and without the fault or negligence of either Party, the Parties shall use good faith efforts to agree on a plan for addressing the identified scientific or technical challenges. If such challenges are not resolved within the [* * *] period following mutual agreement upon such plan, [* * *].

 

17. NOTICES

17.1 Ordinary Notices . Correspondence, reports, documentation, and any other communication in writing between the Parties in the course of ordinary implementation of this Agreement shall be delivered by hand, sent by facsimile, overnight courier or by airmail to the employee or representative of the other Party who is designated by such other Party to receive such written communication at the address or facsimile numbers specified by such employee or representative.

17.2 Extraordinary Notices . Extraordinary notices and communications (including notices of termination, force majeure, material breach, change of address, requests for disclosure of Confidential Information, claims or indemnification) shall be in writing and sent to each Party by prepaid registered or certified airmail, or by facsimile confirmed by prepaid registered or certified airmail letter (and shall be deemed to have been properly served to the addressee upon receipt of such written communication) to the address set forth in Section  17.3 or such other address as notified in writing by such Party to the other Party.

17.3 Addresses .

If to Paratek:

Paratek Pharmaceuticals, Inc.

75 Park Plaza

4th floor

Boston, MA 02111

[* * *]

With a copy to:

Paratek Pharmaceuticals, Inc.

75 Park Plaza

4th floor

Boston, MA 02111

[* * *]

 

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If to Almac:

Almac Pharma Services Limited

Almac House, 20 Seagoe Industrial Estate,

Craigavon, Northern Ireland, BT63 5QD

Attention: Mr Graeme McBurney, President & Managing Director

Facsimile No.: +44 (0) 2838 332299

With a copy to:

Almac Group Limited

Almac House, 20 Seagoe Industrial Estate,

Craigavon, Northern Ireland, BT63 5QD

Attention: General Counsel

Email: commercial.contracts@almacgroup.com

Facsimile No.: +44 (0) 2838 332299

 

18. GENERAL

18.1 Governing Law . This Agreement shall be construed in accordance with and governed by the law of the [* * *], without giving effect to its conflict of laws provisions.

18.2 Escalation of Disputes . In the event of any dispute relating to this Agreement or the Quality Agreement, either Party may refer such dispute to the Supply and Quality Committee for resolution. If the Supply and Quality Committee is unable to resolve such dispute within [* * *] of such referral, either Party may escalate such dispute to each Party’s senior management for resolution. If each Party’s senior management is unable to resolve such dispute within [* * *] of such escalation, either Party may commence arbitration pursuant to Section  18.3 .

18.3 Arbitration . Any dispute relating to this Agreement or the Quality Agreement that cannot be resolved pursuant to Section  18.2 may be referred by either Party to confidential arbitration in accordance with the ICC Rules of Arbitration. The arbitration hearing shall be held as soon as practicable following submission to arbitration. The arbitration hearing shall be held in Wilmington, Delaware. The Parties shall request that the arbitration panel render a formal, binding non-appealable resolution and award on each issue as expeditiously as possible. In any arbitration, the prevailing Party shall be entitled to reimbursement of its reasonable attorneys’ fees and the Parties shall use all reasonable efforts to keep arbitration costs to a minimum. Judgment upon the award may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant Party or its assets.

18.4 Assignment . This Agreement shall be binding upon and inure to the benefit of each Party and their respective heirs, successors and permitted assigns. This Agreement shall not be assignable or transferable by either Party hereto without the prior written consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed), except that Paratek may, with written notice to

 

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Almac, assign this Agreement without Almac’s consent to an Affiliate, a Paratek Licensee or a successor in connection with the merger, consolidation, reorganization or sale of all, or substantially all, of the Products, assets or business to which this Agreement relates. Any permitted assignee of this Agreement shall agree in writing to comply with all obligations of the assigning Party under this Agreement. Almac shall not subcontract any of its work hereunder without Paratek’s prior written consent and any such consent given by Paratek shall not release Almac from its obligations hereunder. For clarity, any Change of Control of Almac shall be deemed an assignment of this Agreement and subject to the provisions of this Section  18.4 , regardless of the structure of such Change of Control.

18.5 Change of Control . During the Term, Almac will notify Paratek in writing if at any time Almac reasonably anticipates that a Change of Control will occur in the next thirty (30) days. [* * *]

18.6 Performance . Each Party agrees to perform its obligations under this Agreement, including under any Scope of Work, in a timely manner. Almac shall allocate adequate resources to execute its obligations under this Agreement, including under each Scope of Work. Almac represents and warrants that all Services shall be performed by qualified personnel in accordance with the highest industry standards.

18.7 Further 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.

18.8 Entire Agreement . This Agreement and all Exhibits attached hereto (as the same may be amended from time to time by the written agreement of the Parties) and the Quality Agreement constitute the entire agreement between the Parties with respect to the subject matter hereof and supersedes all other documents, agreements, verbal consents, arrangements and understandings between the Parties with respect to the subject matter hereof, including that certain Mutual Confidentiality Agreement between Paratek and Almac Group Limited and its Affiliates, dated as of February 25, 2016. This Agreement shall not be amended orally, but only by an agreement in writing, signed by both Parties that states that it is an amendment to this Agreement.

18.9 Severability . If and to the extent that any provision (or any part thereof) of this Agreement is held to be invalid, illegal or unenforceable, in any respect in any jurisdiction, the provision (or the relevant part thereof) shall be considered severed from this Agreement and shall not serve to invalidate the remainder of such provision or any other provisions hereof. The Parties shall make a good faith effort to replace any invalid, illegal or unenforceable provision (or any part thereof) with a valid, legal and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

18.10 Independent Contractor . Almac shall act as an independent contractor and neither Party shall have any authority to represent or bind the other Party in any way.

18.11 No Waiver . Any waiver by one Party of any right of such Party or obligation of the other Party must be in writing and shall not operate as a waiver of any subsequent right or obligation.

 

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18.12 Equitable Relief . Almac acknowledges that any breach or threatened breach by Almac of its obligations under this Agreement (including under any Scope of Work) will cause irreparable harm to Paratek and that money damages would not be adequate to remedy such harm. Therefore, in addition to any other remedies available at law or in equity, Paratek shall be entitled to injunctive relief from a court of competent jurisdiction to prevent any such breach, without proof of damages or posting of a bond.

18.13 Counterparts . This Agreement may be executed in one (1) or more counterparts, each of which shall be deemed an original, and together shall constitute one and the same agreement and shall become effective when one (1) or more counterparts have been signed by each of the Parties and delivered to the other Party, it being understood that both Parties need not sign the same counterpart. This Agreement, following its execution, may be delivered via PDF copies or other form of electronic delivery, which shall constitute delivery of an execution original for all purposes.

[ Signature page follows. ]

 

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

 

PARATEK PHARMACEUTICALS, INC.
By:  

/s/ William M. Haskel

  Name:   William M. Haskel
  Title:   Sr. Vice President
ALMAC PHARMA SERVICES LIMITED
By:  

/s/ Colin Hayburn

  Name:   Colin Hayburn
  Title:   Director

[ Signature page to Manufacturing and Services 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.

 

EXHIBIT A

Supply Price

[ * * * ]

 

A-1


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 B

Paratek Materials

[* * *]

 

B-1

Exhibit 10.28

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.

Confidential

Execution Version

MANUFACTURING AND SERVICES AGREEMENT

THIS MANUFACTURING AND SERVICES AGREEMENT (this “ Agreement ”) is made and entered into as of November 2, 2016 (the “ Effective Date ”), by and between Paratek Pharmaceuticals, Inc., a corporation organized and existing under the laws of Delaware, with an address at 75 Park Plaza, 4 th Floor, Boston, Massachusetts 02116, United States (“ Paratek ”) and CIPAN – Companhia Industrial Produtora de Antibióticos, S.A., a corporation organized and existing under the laws of Portugal with an address at Rua da Estação, n°42, 2600-726 Castanheira do Ribatejo, Portugal (“ CIPAN ” and, collectively with Paratek, the “ Parties ”, and each, a “ Party ”).

RECITALS

WHEREAS, CIPAN is experienced in the manufacture of active pharmaceutical ingredients in the antibiotic field;

WHEREAS, [* * *] to manufacture increased quantities of Minocycline HCI precursor meeting the Specifications (“ Minocycline Starting Material ”) and to manufacture crude Omadacycline meeting the Specifications (“ Crude Omadacycline ” and, collectively with the Minocycline Starting Material, the “ Products ”, and each, a “ Product ”);

WHEREAS, Paratek intends to purify or have purified Crude Omadacycline into Omadacycline and develop, market and sell Paratek Products (as defined below), including pharmaceutical products containing Omadacycline as the active pharmaceutical ingredient; and

WHEREAS, Paratek desires to have CIPAN manufacture the Products for Paratek and CIPAN desires to do so all on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1. DEFINITIONS

1.1 Definitions . As used in this Agreement, the following capitalized terms have the meanings indicated below:

1.1.1 “ Affiliate ” means, with respect to any Person, any other Person which directly or indirectly controls, is controlled by, or is under common control with that Person at any time during the period for which the determination of affiliation is being made. The term “control,” (including, with correlative meaning, the terms “controlling”, “controlled by” and “under common control with”), as used in this Section 1.1.1 with respect to any Person, means the possession, directly or indirectly, of the power to elect a majority of the board of directors (or other governing body) or to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.


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.

 

1.1.2 “ Agreement ” has the meaning set forth in the preamble hereto.

1.1.3 “ Approval Date ” means, with respect to any Batch, the date on which such Batch is approved for release by CIPAN’s quality assurance group in accordance with the Quality Agreement.

1.1.4 “ Approved Supplier ” means any supplier that (a) has been approved with respect to quality standards by either Paratek or CIPAN and, in the event such approval was given by CIPAN, (b) has been agreed to by Paratek by way of Paratek’s approval of the Quality Agreement in which such supplier has been set forth.

1.1.5 “ Batch ” means, with respect to a Product at any given time, a discrete output or isolation from a set of unit operations described in the then-current batch record instructions for such Product. The batch size for each Product shall be related to the capacity of a given equipment train and is dependent on the maximum utilization of the bottle-neck reactor or vessel. As of the Effective Date, a Batch of Minocycline Starting Material is [* * *] and a Batch of Crude Omadacycline is [* * *].

1.1.6 “ Business Day ” means a day on which banking institutions in Boston, Massachusetts and Castanheira do Ribatejo, Portugal are open for business.

1.1.7 “ 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.

1.1.8 “ Calendar Year ” means each successive period of twelve (12) consecutive months commencing on January 1 and ending on December 31; provided , however , that (a) the first Calendar Year of the Term shall begin on the Effective Date and end on December 31, 2016; and (b) the last Calendar Year of the Term shall end on the effective date of expiration or termination of this Agreement.

1.1.9 “ Change of Control ” means any transaction or series of transactions wherein (a) the voting securities of CIPAN outstanding immediately prior thereto cease to represent at least fifty percent (50%) of the combined voting power of the surviving entity immediately after such transaction or transactions; (b) the stockholders or equity holders of CIPAN approve a plan of complete liquidation of CIPAN, or an agreement for the sale or disposition by CIPAN of all or substantially all of CIPAN’s assets, other than to an Affiliate; (c) a Third Party becomes the beneficial owner of fifty percent (50%) or more of the combined voting power of the outstanding securities of CIPAN or (d) substantially all of CIPAN’s business or assets which relate to this Agreement are sold or otherwise transferred to a Third Party.

1.1.10 “ CIPAN ” has the meaning set forth in the preamble hereto.

 

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1.1.11 “ CIPAN Improvement ” means any Invention that [* * *].

1.1.12 “ CIPAN Representatives ” has the meaning set forth in Section 13.1.2 .

1.1.13 “ CIPAN Technology ” means (a) all intellectual property and embodiments thereof, including any Inventions, owned by CIPAN or its Affiliates as of the date hereof that are not Paratek Technology or Joint Technology and (b) the CIPAN Improvements.

1.1.14 “ Confidential Information ” means, with respect to any Party, such Party’s technology, data, know-how, or information whether written or oral, technical or non-technical, including, but not limited to, financial statements, reports, pricing, trade secrets, secret processes, formulae, samples, customer data (including, but not limited to, customer lists), the formulation of pharmaceutical dosage forms and compounds, manufacturing procedures, manufacturing processes, manufacturing equipment, manufacturing batch records, plant layouts, product volumes, quality control procedures, and quality control standards and the like, that is disclosed to the other Party. Confidential Information of Paratek shall include Manufacturing Information and Paratek Technology.

1.1.15 “ Crude Omadacycline ” has the meaning set forth in the recitals hereto.

1.1.16 “ Current Good Manufacturing Practice ” or “ cGMP ” means, at any given time, the current standards for the manufacture of pharmaceuticals, as set forth in the FD&C Act and applicable regulations promulgated thereunder, as amended from time to time, and such standards of good manufacturing practice as are required by the applicable laws and regulations of countries in which Products are intended to be sold, to the extent such standards are not inconsistent with GMP under the FD&C Act.

1.1.17 “ Effective Date ” has the meaning set forth in the preamble hereto.

1.1.18 “ Facility ” means CIPAN’s facility located at Rua da Estação, n°42, Vala do Carregado, 2600-726 Castanheira do Ribatejo, Portugal or any other facility approved in writing by the Parties for the Manufacture of Products.

1.1.19 “ FDA ” means the United States Food and Drug Administration or any successor entity thereto.

1.1.20 “ FD&C Act ” means the Federal Food, Drug and Cosmetic Act, as the same may be amended or supplemented from time to time.

1.1.21 “ Firm Forecast Period ” has the meaning set forth in Section 2.2 .

1.1.22 “ Force Majeure Event ” has the meaning set forth in Article 16 .

1.1.23 “ Indemnified Party ” has the meaning set forth in Section 13.1.3 .

1.1.24 “ Indemnifying Party ” has the meaning set forth in Section 13.1.3 .

1.1.25 “ Initial Term ” means the [* * *] period commencing on the Effective Date.

 

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1.1.26 “ Inspection Period ” has the meaning set forth in Section 9.2.1 .

1.1.27 “ Invention ” means any development, information, invention, improvement, know-how, data or intellectual property, whether or not reduced to practice and whether or not patentable.

1.1.28 “ Joint Technology ” has the meaning set forth in Section 11.1.3 .

1.1.29 “ Laboratory ” has the meaning set forth in Section 9.3.1 .

1.1.30 “ Latent Defect ” shall mean any defect in a Product that is not reasonably discoverable through Paratek’s (or Paratek’s designee’s) normal incoming goods inspection verification methods and procedures, such methods and procedures to be in accordance with the Quality Agreement. By way of example only, the discoloration of a Product over time due to the presence of an excipient that is not compliant with the Specifications would constitute a Latent Defect.

1.1.31 “ Losses ” has the meaning set forth in Section 13.1.1 .

1.1.32 “ Manufacture ,” “ Manufactured ” or “ Manufacturing ” means all activities involved in the production of Products to be supplied to Paratek or its Affiliates hereunder, including the preparation, formulation, finishing, testing, storage and packaging for shipment of Products and the handling, storage and disposal of any residues or wastes generated thereby.

1.1.33 “ Manufacturing Information ” means all information and data relating to the Manufacture of Products provided by Paratek to CIPAN hereunder, including the Specifications, Methods of Analysis and all formulas and processes.

1.1.34 “ Materials ” means all materials, including all raw materials and ingredients required for the Manufacture of Products.

1.1.35 “ Methods of Analysis ” means the methods of analysis for the Products set forth in the Quality Agreement, as such Quality Agreement may be amended from time to time in accordance with its terms.

1.1.36 “ Minocycline Starting Material ” has the meaning set forth in the recitals hereto.

1.1.37 “ Paratek ” has the meaning set forth in the preamble hereto.

1.1.38 “ Paratek Improvement ” means any Invention [* * *].

1.1.39 [* * *]

1.1.40 “ Paratek Licensee ” means any Third Party to whom Paratek grants a license or a right to research, develop, make, have made, use, sell, have sold, import, export or otherwise exploit a Product or Paratek Product.

 

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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.

 

1.1.41 “ Paratek Product ” means any pharmaceutical product owned, controlled or sold by Paratek, its Affiliates or Paratek Licensees that incorporates or is derived from a Product.

1.1.42 “ Paratek Representatives ” has the meaning set forth in Section 13.1.1 .

1.1.43 “ Paratek Technology ” means (a) all intellectual property and embodiments thereof, including any Inventions, owned by Paratek as of the Effective Date that are not Joint Technology and (b) the Paratek Improvements.

1.1.44 “ Party ” and “ Parties ” have the meaning set forth in the preamble hereto.

1.1.45 “ Person ” means any natural person, corporation, general partnership, limited partnership, proprietorship, other business organization, trust, union, association or governmental authority.

1.1.46 “ Product ” and “ Products ” have the meaning set forth in the recitals hereto.

1.1.47 “ Quality Agreement ” has the meaning set forth in Section 8.1 .

1.1.48 “ Recall ” means any recall, withdrawal or corrective action (whether voluntary or mandatory) or issue of an “NDA Field Alert” (as defined in 21 CFR 314.81).

1.1.49 “ Regulatory Approval ” means all authorizations by the competent Regulatory Authorities which are required for the manufacture, marketing, promotion, pricing and sale of a Product in a given country or regulatory jurisdiction in the Territory.

1.1.50 “ Regulatory Authority ” means any national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity involved in the granting of Regulatory Approval for Products in the Territory.

1.1.51 “ Reimbursement Reduction ” has the meaning set forth in Section 7.3.1 .

1.1.52 “ Rejection Notice ” has the meaning set forth in Section 9.2.1 .

1.1.53 “ Renewal Term ” means each consecutive [* * *] period commencing on the expiration of the Initial Term or immediately preceding Renewal Term, until this Agreement is terminated pursuant to Article 14 .

1.1.54 “ Rolling Clinical Forecast ” has the meaning set forth in Section 2.2 .

1.1.55 “ Rolling Commercial Forecast ” has the meaning set forth in Section 2.2 .

1.1.56 “ Rolling Forecast ” means a Rolling Clinical Forecast or a Rolling Commercial Forecast, as applicable.

1.1.57 “ Scope of Work ” has the meaning set forth in Section 3.1 .

 

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1.1.58 “ Seizure ” means any action by FDA or any other Regulatory Authority to detain or destroy Product or prevent the release of Product.

1.1.59 “ Services ” has the meaning set forth in Section 3.1 .

1.1.60 [* * *]

1.1.61 “ Specifications ” means the specifications for the Products set forth in the Quality Agreement, as such Quality Agreement may be amended from time to time in accordance with its terms.

1.1.62 “ Supply Price ” has the meaning set forth in Section 7.1 .

1.1.63 “ Term ” means, in the aggregate, the Initial Term and all Renewal Terms, if any.

1.1.64 “ Territory ” means the United States of America and its territories and possessions and any other countries in the world added to the definition of “Territory” pursuant to Section 2.6 .

1.1.65 “ Third Party ” means any Person other than Paratek, CIPAN and their respective Affiliates.

1.1.66 [* * *]

1.1.67 [* * *]

1.1.68 [* * *]

1.2 Construction of Certain Terms and Phrases . Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the term “or” shall have the inclusive meaning of the term “and/or”; (iv) “including” and its cognates shall have the non-limiting meaning of “including, without limitation”; (v) the term “will” shall have the same meaning and import as the term “shall”; (vi) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement; (vii) the terms “Article” or “Section” refer to the specified Article or Section of this Agreement; and (viii) Article and Section headings shall not affect the meaning or construction of any provision of this Agreement.

 

2. GENERAL; FORECASTS AND ORDERS

2.1 Manufacture . CIPAN shall Manufacture and supply Products to Paratek or Paratek’s designee in such quantities and at such times as ordered by Paratek pursuant to the terms of this Agreement in exchange for payment of the applicable Supply Price for such Products. During the Term, CIPAN shall maintain the resources necessary to Manufacture Products pursuant to the terms of this Agreement and shall provide, at its own expense, all Materials and labor necessary to do so.

2.2 Forecasts . Within [* * *] after the Effective Date, Paratek shall submit to CIPAN a forecast of clinical supply of Products that Paratek anticipates ordering from CIPAN during the [* * *]

 

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period (broken down by Product and by month and, if applicable, country in the Territory) following the date of such forecast and Paratek shall update such forecast on a rolling [* * *] basis every [* * *] thereafter (each, a “ Rolling Clinical Forecast ”) until Paratek no longer requires any clinical supply of Products. Beginning [* * *] prior to the anticipated launch of a Paratek Product in the Territory and for the remainder of the Term, Paratek shall submit to CIPAN a forecast of commercial supply of Products that Paratek anticipates ordering from CIPAN during the [* * *] period (broken down by Product and by month and, if applicable, country in the Territory) following the date of such forecast and Paratek shall update such forecast on a rolling [* * *] basis every [* * *] thereafter (each, a “ Rolling Commercial Forecast ”), provided that Paratek shall provide an updated Rolling Commercial Forecast within [* * *] after such Paratek Product receives Regulatory Approval by the applicable Regulatory Authority in a country in the Territory. Paratek shall place purchase orders for at least the quantity of each Product specified in the first [* * *] of each such Rolling Clinical Forecast or Rolling Commercial Forecast (such period, the “ Firm Forecast Period ”) and the remaining [* * *] of such forecast shall be a good faith estimate. Except as set forth in the immediately preceding sentence, Paratek shall not be required to order any fixed minimum quantity of either Product, notwithstanding any forecast or prior course of dealing.

2.3 Orders . Paratek may submit purchase orders for Products to CIPAN from time to time during the Term and at least [* * *] prior to the requested date of delivery. Each purchase order shall specify (a) the quantity of each Product ordered for delivery; and (b) the delivery date for that order. CIPAN shall Manufacture and supply Products in accordance with this Agreement and each applicable purchase order. Within five (5) Business Days after receiving any purchase order from Paratek, CIPAN shall accept such purchase order in writing provided it has been submitted and is otherwise in accordance with the terms and conditions of this Agreement and shall provide Paratek with a Manufacturing schedule for the Products subject to such purchase order. Notwithstanding the foregoing, with respect to any of the [* * *] in the then most recent Firm Forecast Period, CIPAN may reject, by written notice to Paratek, any portion of any purchase order to the extent that fulfilling the entirety of such purchase order would cause the aggregate number of units of a Product supplied by CIPAN during such month to exceed [* * *] of the units of such Product forecast for such month in the applicable Rolling Forecast; provided , however , that CIPAN will use its reasonable efforts to, but shall not be obligated to, supply such Product in excess of such [* * *] quantity. Paratek may cancel any firm purchase order (in whole or in part) at any time prior to the delivery for any quantity of a Product that CIPAN has not completed Manufacturing pursuant to such purchase order at the time that notice of cancellation is received by CIPAN, provided that, if CIPAN has commenced but not completed the Manufacture of such Product pursuant to such firm purchase order, [* * *].

2.4 Priority of Supply . CIPAN and its Affiliates shall (a) maintain capacity in the Facility to fill Paratek’s forecasted orders for each Product in a manner consistent with this Agreement, including purchase orders placed hereunder and (b) fill Paratek’s purchase orders placed pursuant to this Agreement for each Product prior to filling any orders of any other customer in the event of a labor, materials or capacity shortage.

2.5 [* * *]

2.6 Territory Expansion . At any time during the Term, Paratek may provide written notice to CIPAN of its desire to expand the Territory under this Agreement with respect to one (1) or both

 

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Products to include one (1) or more additional countries or territories. Promptly following such notification, the Supply and Quality Committee shall meet to discuss any expansion of CIPAN’s Manufacturing capabilities that would be necessitated by such expansion in accordance with clause (b) of Section 4.3 and the Parties shall use good faith commercially reasonable efforts to execute an amendment that (a) amends the definition of “Territory” under Section 1.1.64 to include such additional countries or territories and (b) modifies the provisions of this Agreement as necessary in order to reflect the regulatory requirements of such additional countries or territories. For clarity, Paratek shall not be obligated to amend the definition of Territory at any point during the Term.

2.7 Supply to Paratek Licensees . In the event Paratek delivers a written request to CIPAN requesting that CIPAN engage in negotiations with a Paratek Licensee on the terms of a definitive agreement pursuant to which CIPAN would Manufacture and supply one (1) or both Products to such Paratek Licensee or a designee of a Paratek Licensee, CIPAN shall use commercially reasonable good faith efforts to negotiate and execute such agreement on substantially the same terms of this Agreement (including pricing, orders, forecasting, delivery, non-conformance, failure to supply, term and termination).

 

3. SERVICES

3.1 Scopes of Work . CIPAN shall perform for Paratek certain services related to the development, technology transfer and Manufacturing (including scale-up and validation) of the Products (the “ Services ”) as set forth in one (1) or more statements of work to be mutually agreed by the Parties and attached as addenda to this Agreement (each, a “ Scope of Work ”). Each Scope of Work shall be automatically incorporated by reference into and governed by the terms and conditions of this Agreement. A Scope of Work shall include the scope of Services to be provided by CIPAN, any deliverables or milestones in connection with such Services, the fees payable for such Services, the applicable standard of service to be provided and any other relevant terms and conditions not already set forth in this Agreement. In the event of any conflict between this Agreement and any Scope of Work, the terms of this Agreement shall govern unless the Scope of Work explicitly states that its terms and conditions are to supersede this Agreement. The Parties may amend the activities or costs set forth in any Scope of Work by mutual written agreement.

3.2 Fees . As part of a Scope of Work, the Parties will negotiate reasonable costs for the Services to be performed by CIPAN for Paratek under such Scope of Work. CIPAN shall submit a cost estimate to Paratek for any such Service, and shall not commence any such Service until Paratek provides written notice of its approval of such cost estimate (or the Parties otherwise mutually agree on the costs for such Service). As a general principle, any such cost estimate shall reflect [* * *].

 

4. SUPPLY AND QUALITY COMMITTEE

4.1 Composition . The Supply and Quality Committee shall be comprised of an equal number of representatives of each Party. Each Party shall appoint its respective representative to the Supply and Quality Committee within thirty (30) days of the Effective Date, and from time to time, may substitute one (1) 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 Products.

 

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4.2 Meetings . The Supply and Quality Committee shall meet as necessary to carry out its duties under Section 4.3 , but no more often than once per Calendar Quarter, unless otherwise agreed by its members. Unless otherwise agreed by the Parties, each Party will request that one or more of its executive officers attend one meeting of the Supply and Quality Committee each Calendar Year. The Supply and Quality Committee shall meet in-person at Paratek or CIPAN or, alternatively, by means of teleconference, videoconference or other similar communications equipment.

4.3 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 Scope of Work), and shall in particular have responsibility for the following: (a) reviewing key metrics for each Product’s production and quality, and reviewing and monitoring any required remediation with respect to production and quality for each Product; (b) reviewing CIPAN’s capacity and short-term and long-term planning for clinical and commercial supply of each Product, including anticipating any capacity shortfalls and discussing the cost allocation of investments required to increase capacity or improve efficiencies; (c) reviewing and discussing draft Scopes of Work; (d) discussing the cost allocation, if any, of extraordinary costs incurred by CIPAN in connection with the Manufacture of Products or provision of Services; (e) establishing resource priorities and resolving resource conflicts; and (f) establishing and monitoring a process improvement incentive program.

4.4 Decision-Making . All of each Party’s representatives on the Supply and Quality Committee shall collectively have one (1) vote 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.

 

5. [* * *] ALTERNATIVE SUPPLY

5.1 [ * * *]

5.2 Alternative Supply . At any time during the Term, Paratek may elect to qualify one (1) or more alternative manufacturing facilities (whether owned by a Third Party, Paratek or by one of Paratek’s Affiliates) to Manufacture the Products (each, a “ Backup Supplier ”). Paratek shall be responsible for any costs associated with qualifying Backup Suppliers. [* * *] CIPAN shall use commercially reasonable efforts to cooperate with the qualification of any Backup Supplier, including (a) technology transfer of all CIPAN Technology, Joint Technology and, to the extent in its possession, Paratek Technology, necessary or useful for the Manufacture of the Products; provided that, to the extent that such technology and know-how constitutes CIPAN Confidential Information it shall be subject to the provisions of Article 15 and Paratek’s designated Backup Supplier shall be required to enter into a confidentiality agreement with CIPAN containing substantially the same terms as Article 15 and (b) providing Paratek and any Backup Supplier with consulting services related to the Manufacture, quality control and quality assurance of the Products. Paratek shall reimburse CIPAN for performing such services described in the preceding sentence at [* * *] within [* * *] of invoice.

 

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6. DELIVERY; FAILURE TO SUPPLY

6.1 Delivery . All Products shall be delivered [* * *]. CIPAN will notify Paratek at least ten (10) Business Days prior to any shipment of Product. Time is of the essence for all deliveries of Products. CIPAN shall ensure that all Product held in storage is stored in accordance with the Specifications until delivery to Paratek under this Agreement and that all storage areas meet cGMP requirements. CIPAN shall hold title to and bear all risk of loss or damage to Products and Materials prior to such item’s delivery to Paratek or its designee hereunder. In the event of any delay in delivery of Product from the delivery date on the applicable purchase order for such Product, if such delay is: [* * *], unless, in each case ((a) and (b)), such delay is due to a Force Majeure Event causing a worldwide shortage of the applicable Materials, in which case Article 16 shall apply.

6.2 Manufacturing Date . CIPAN shall schedule its Manufacturing operations so that all Products delivered have the maximum shelf life possible and in any event no Minocycline Starting Material delivered hereunder shall have less than [* * *] of shelf life remaining at the time of delivery. If Product is delivered to Paratek or Paratek’s designee whose shelf life does not conform to the requirements set forth in this Section 6.2 , CIPAN shall promptly, at its cost and expense, refund or replace the non-conforming Product upon Paratek’s request.

6.3 Material Failure of Supply . If CIPAN, for any reason, fails to supply at least [* * *] of the units of any Product required to be delivered by CIPAN pursuant to valid purchase orders placed by Paratek during any period of [* * *] or longer beginning on the requested delivery date, in addition to and without limiting any other remedies available to Paratek, Paratek shall be entitled to notify CIPAN of its intent to source from the Backup Supplier all or any of the Products [* * *].

6.4 Notice of Failure to Supply . If CIPAN is unable or anticipates that it will be unable to supply Products meeting Paratek’s forecasted requirements of any Product(s) in a timely manner at any time during the Term, CIPAN shall provide prompt written notice to Paratek. Following such notice, the Parties shall discuss in good faith how to prevent or mitigate such inability to supply, including (i) an expansion of the Facility’s capacity and (ii) the ability of Paratek to seek [* * *] from a Backup Supplier(s). CIPAN shall implement in good faith any reasonable suggestions of Paratek to prevent or mitigate such inability to supply at its own expense unless otherwise mutually agreed upon by the Parties.

 

7. PRICE AND PAYMENT

7.1 Supply Price . The price of Products to be sold to Paratek during the Term shall be based on the annual volume of each Product ordered by Paratek as set forth in Exhibit A attached hereto, subject to adjustment as set forth in Sections 6.1 , 7.2 and 7.3 (such price for a Product, the “ Supply Price ” for such Product). [* * *]

7.2 Price Adjustments .

7.2.1 The Supply Price of Crude Omadacycline may be adjusted by the mutual agreement of the Parties upon the finalization of the final costs of Manufacturing Crude Omadacycline following the completion of Manufacture of the [* * *] registration batch of Crude Omadacycline.

 

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7.2.2 Beginning prior to [* * *], the Supply Price for each Product for the next Calendar Year shall be adjusted by mutual agreement of the Parties on a yearly basis at least [* * *] prior to the beginning of such Calendar Year, such adjustment to reflect: [* * *]. CIPAN will permit Paratek to promptly review such portions of its internal records, books and any other materials that are necessary in order to substantiate CIPAN’s proposed Supply Price for a Product or any adjustment to the Supply Price for a Product, such materials to be considered CIPAN’s Confidential Information hereunder. For clarity, Paratek shall have no right to review CIPAN’s records regarding other activities or products that are not relevant to the proposed Supply Price for a Product or any adjustment thereto as set forth in this Section 7.2.2 .

7.3 [ * * *]

7.4 Payment . CIPAN shall invoice Paratek for Products on or after the Approval Date and shall only charge Paratek for Products that are shipped to Paratek or Paratek’s designee pursuant to this Agreement. Paratek shall pay CIPAN for all supplied quantities of conforming Products within [* * *] from the date of invoice receipt; provided that, pending resolution regarding any disagreement between the Parties as to conformance of a Product to the requirements of this Agreement or the Quality Agreement, Paratek is not obligated for any payment with respect to any Product Paratek believes to be non-conforming. In this Agreement, unless expressly otherwise stated, all references to money or payments means US Dollars and all payments made hereunder shall be made in that currency.

7.5 Taxes and Other Charges . All Product prices are inclusive of taxes, shipping costs to the point of delivery, customs duties and other charges. Paratek and CIPAN shall cooperate to eliminate or minimize the amount of any such taxes imposed on the transactions contemplated in this Agreement. Paratek is not responsible for any penalties or interest related to the failure of CIPAN to collect sales, use, VAT or similar taxes.

 

8. COMPLIANCE, QUALITY AND ENVIRONMENTAL

8.1 Quality Agreement . The Parties shall use good faith reasonable efforts to enter into a commercial pharmaceutical product quality agreement (the “Quality Agreement ”) within sixty (60) days of the Effective Date. Each Party agrees to perform its respective obligations under the Quality Agreement in accordance with such agreement.

8.2 Compliance with Law . CIPAN shall conduct its Manufacturing operations hereunder in a safe and prudent manner, in compliance with all applicable laws and regulations (including, but not limited to, those dealing with occupational safety and health, those dealing with public safety and health, those dealing with protecting the environment, and those dealing with disposal of wastes), and in compliance with all applicable provisions of this Agreement and the Quality Agreement. CIPAN shall obtain all necessary registrations and permits pertaining to activities contemplated by this Agreement and the Quality Agreement. To the extent necessary for the Regulatory Approval of Products, CIPAN shall permit the inspection of the Facility by Regulatory Authorities and shall supply all documentation and information requested by Paratek to obtain or maintain Regulatory Approval of Products.

8.3 Manufacturing Quality . CIPAN shall obtain all Materials from Approved Suppliers and shall pay such suppliers on a timely and current basis. All Products shall be Manufactured at the

 

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Facility. CIPAN shall sample and analyze all Materials upon receipt to ensure that such Materials are free of defects and meet the applicable specifications therefor. CIPAN shall take all necessary steps to prevent contamination and cross contamination of Products. Products shall be unadulterated and free from contamination, diluents and foreign matter in any amount.

 

9. QUALITY AUDITS; TESTING AND INSPECTION OF THE PRODUCTS

9.1 Inspection and Auditing Rights . Paratek and its representatives shall have the right, at Paratek’s expense, to audit, inspect and observe the Facility, the performance by CIPAN of its obligations under this Agreement and the Quality Agreement, CIPAN’s compliance with applicable laws and regulations in the performance of its obligations under this Agreement and the Quality Agreement, and the handling, Manufacture, testing, inspection, storage, disposal and transportation of the Product by CIPAN and its permitted subcontractors, during normal business hours and upon at least [* * *] prior notice, provided that, [* * *] CIPAN shall make available to Paratek all relevant records and reports and Paratek shall have the right to copy all such records and reports. CIPAN agrees to respond to Paratek’s audit findings within [* * *] of receipt of Paratek’s audit report, to take prompt corrective action to remedy any observed violations of the terms of this Agreement, the Quality Agreement or of applicable law or regulations and to be responsive to the recommendations contained therein. Such audits may be conducted no more than [* * *] at [* * *] expense, provided that Paratek may also conduct follow-up audits or inspections at [* * *] expense at any time or times during a Calendar Year that are directed at [* * *].

9.2 Product Rejection and Inspection .

9.2.1 Paratek shall have a period of [* * *] from the date of Paratek’s delivery of Products (the “ Inspection Period ”) to inspect, or cause to have inspected by a Third Party designated by Paratek, any shipment of Products to determine whether such shipment conforms to Specifications or otherwise breaches CIPAN’s warranties set forth in this Agreement. Paratek shall give CIPAN notice of rejection (“ Rejection Notice ”) of any shipment of Products that, in whole or part, failed to meet Specifications or which otherwise breached CIPAN’s warranties set forth in this Agreement, in each case at the time of delivery pursuant to Section 6.1 .

9.2.2 If Paratek determines during the Inspection Period for a Product(s) that such Product(s) did not conform to Specifications or otherwise breached CIPAN’s warranties set forth in this Agreement, in each case at the time of delivery pursuant to Section 6.1 , it shall notify CIPAN prior to [* * *]. Paratek’s failure to timely deliver a Rejection Notice shall be deemed its acceptance of the Product, unless a Latent Defect of such Product exists. Paratek shall accompany any Rejection Notice with reasonable supporting evidence in its possession that shows that the Product delivered to Paratek by CIPAN was not Manufactured in accordance with Specifications or otherwise breaches CIPAN’s warranties set forth in this Agreement, in each case at the time of delivery pursuant to Section 6.1 .

9.3 Independent Testing .

9.3.1 If Paratek delivers a Rejection Notice to CIPAN in respect of all or any part of a shipment of Product(s), then the Parties shall have [* * *] from the date of CIPAN’s receipt of such Rejection Notice to resolve any dispute regarding whether all or any part of such shipment of the

 

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Product(s) was Manufactured in conformance with Specifications and CIPAN’s warranties set forth in this Agreement. Either Party may request, in writing, at any time within such [* * *] period that an independent laboratory (a “ Laboratory ”) be used to determine whether the Product met Specifications at the time of delivery. Such Laboratory must be mutually acceptable to both Parties and shall meet all the requirements of an outside laboratory as specified in the Quality Agreement. The determination of the Laboratory shall be binding upon the Parties.

9.3.2 If the Laboratory determines, or the Parties otherwise agree, that the Product(s) met Specifications at the time of delivery, then Paratek shall (i) pay to CIPAN the Supply Price invoiced for such Product(s) pursuant to Section 7.1 , and (ii) pay to the Laboratory the amount of the fees charged by the Laboratory for such testing, if applicable.

9.3.3 If the Laboratory determines, or the Parties otherwise agree, that the Product(s) did not meet Specifications at the time of delivery, then CIPAN shall (i) reimburse Paratek for any Supply Price previously paid by Paratek for such non-conforming Product(s), (ii) pay to the Laboratory the amount of the fees charged by the Laboratory for such testing, if applicable (iii) dispose of the non-conforming Product, at CIPAN’s expense, in accordance with Paratek’s instructions, and (iv) re-initiate Manufacturing and supply of replacement Product(s) conforming to Specifications as soon as reasonably practicable (but in no event more than [* * *] following the Laboratory’s determination). Paratek shall pay to CIPAN the Supply Price for such replacement Product(s) in accordance with Section 7.1 .

9.4 Latent Defects . As soon as either Party becomes aware of a Latent Defect in any Batch, such Party shall immediately notify the other Party thereof, and, at Paratek’s election, the applicable Batch shall be deemed rejected as of the date of delivery of such notice. In such case, CIPAN shall, without limiting any other remedies available to Paratek, (a) reimburse Paratek for any Supply Price previously paid by Paratek for such non-conforming Batch, (b) dispose of the non-conforming Batch, at CIPAN’s expense, in accordance with Paratek’s instructions, (c) Manufacture and supply of replacement Batch conforming to Specifications as soon as reasonably practicable (but in no event more than [* * *] following the discovery of the Latent Defect) and (d) reimburse Paratek for any reasonable out-of-pocket costs incurred by Paratek relating to the acceptance of returns from Paratek’s customers resulting from such non-conforming Batch. At its election, Paratek may recover undisputed amounts to which it may become entitled under this paragraph by deducting such amounts from amounts then due or that may subsequently become due to CIPAN from Paratek hereunder.

9.5 Samples and Record Retention . CIPAN shall retain records and retention samples of each Batch of Product for at least [* * *] and shall make the same available to Paratek upon request. After the required holding period, CIPAN shall provide written notice to Paratek and, at Paratek’s direction, shall either destroy or otherwise disposition such retention samples at CIPAN’s expense. During and after the term of this Agreement, CIPAN shall assist Paratek with respect to any complaint, issue or investigation relating to Product.

9.6 Government Inspections . Each Party shall promptly notify the other Party if such Party receives notice from a Regulatory Authority regarding a cGMP investigation or other inspection with respect to a Product. If CIPAN receives advance notice of any such investigation, inspection or visit by any Regulatory Authority to inspect the Facility or review the Manufacture of a Product, CIPAN shall permit, to the extent permitted by applicable law, Paratek or its representatives to be present during such visit, at Paratek’s expense. Upon Paratek’s request, CIPAN shall provide Paratek with a copy of any report issued by such Regulatory Authority following such visit.

 

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9.7 Recalls and Seizure .

9.7.1 Each Party shall keep the other Party promptly and fully informed of any notification or other information whether received directly or indirectly which might result in the Recall or Seizure of Paratek Product(s). If either Party determines that it is necessary to Recall any Paratek Product, it shall immediately notify the other Party and CIPAN will collaborate with Paratek in connection with any Recall or Seizure. In any such situation, Paratek shall have the right to make all final decisions regarding a Recall or Seizure of Paratek Products.

9.7.2 CIPAN shall be liable for the out-of-pocket costs and expenses actually incurred by Paratek as a result of any Recall or Seizure (including any Supply Price paid for the Product incorporated in the relevant Paratek Product and any in-process or finished Product that cannot be shipped due to the Recall or Seizure), to the extent such Recall or Seizure results from [* * *].

9.7.3 Paratek shall be liable for the out-of-pocket costs and expenses actually incurred by CIPAN as a result of any Recall or Seizure to the extent such Recall or Seizure results from [* * *].

 

10. MANUFACTURING CHANGES

10.1 Voluntary Changes .

10.1.1 Paratek may propose any change to the Manufacturing process, the Manufacturing equipment, the Specifications, the Materials, the sources of Materials or the Methods of Analysis by delivering a written notice to CIPAN of such proposed change. Within ten (10) Business Days of receiving such notice, CIPAN shall inform Paratek of any and all reasonable costs associated with implementing such change and if Paratek agrees to reimburse CIPAN for such costs, CIPAN shall implement such change as promptly as practicable in consultation in Paratek; provided , however , that, if CIPAN notifies Paratek that it has determined in good faith that such change is not in compliance with applicable laws or regulations (including cGMP), the Parties shall submit such dispute to a Third Party expert for resolution.

10.1.2 CIPAN shall not make any changes to the Manufacturing process, the Manufacturing equipment, the Specifications, the Materials, the sources of Materials or the Methods of Analysis without the prior written consent of Paratek.

10.2 Required Changes . If FDA or any other Regulatory Authority requests or requires any change in the Manufacturing process, the Manufacturing equipment, the Specifications, the Materials, the source of Materials or Methods of Analysis with respect to any Product, the Parties shall promptly (but in no event more than ten (10) Business Days after receipt of the Regulatory Authority’s notice) meet and discuss an implementation plan for such change, including the allocation of any associated reasonable costs for such change. If the Parties, after discussing the proposed change in reasonable good faith negotiations, cannot agree on the plan for implementing such change, the costs (or cost allocation) of implementing such change or CIPAN is technically or financially incapable of making such change,

 

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[* * *]. Each Party agrees to promptly forward to the other copies of any written communication received by such Party from the FDA or any other Regulatory Authority that may affect the Manufacture or supply of any Product as contemplated herein.

 

11. INTELLECTUAL PROPERTY

11.1 Ownership .

11.1.1 Paratek shall have sole ownership of all Paratek Technology, including all Paratek Improvements, and shall have the sole right to prosecute, maintain and enforce such Paratek Technology in its sole discretion. If, at any time before or during the Term, CIPAN owns (solely or jointly) any Paratek Improvements, CIPAN agrees to assign and does hereby assign all right, title and interest in and to such Paratek Improvements to Paratek. CIPAN shall, and shall cause its Affiliates to, execute and deliver all requested assignments and other documents, and take such other actions as Paratek may reasonably request, in order to perfect and enforce Paratek’s rights in the Paratek Improvements.

11.1.2 CIPAN shall have sole ownership of all CIPAN Technology, including all CIPAN Improvements, and shall have the sole right to prosecute, maintain and enforce such CIPAN Technology in its sole discretion. If, at any time before or during the Term, Paratek owns (solely or jointly) any CIPAN Improvements, Paratek agrees to assign and does hereby assign all right, title and interest in and to such CIPAN Improvements to CIPAN. Paratek shall, and shall cause its Affiliates to, execute and deliver all requested assignments and other documents, and take such other actions as CIPAN may reasonably request, in order to perfect and enforce CIPAN’s rights in the CIPAN Improvements.

11.1.3 Except as expressly set forth in this Section 11.1 , each Party shall own all right, title and interest in and to: (a) any and all Inventions made solely by its or its Affiliates’ employees, staff, agents or independent contractors in connection with their activities under this Agreement; (b) any and all patent rights claiming any Invention described in clause (a) of this Section 11.1.3 ; and (c) any and all know-how embodied by or in any Invention described in clause (a) of this Section 11.1.3 . Except as expressly set forth in this Section 11.1 , the Parties shall jointly own all right, title and interest in and to: (i) any and all Inventions made jointly by the Parties or their respective Affiliates or their or their Affiliates’ employees, staff, agents or independent contractors in connection with their activities under this Agreement; (ii) any and all patent rights claiming any Invention described in clause (i) of this Section 11.1.3 ; and (iii) any and all know-how embodied by or in any Invention described in clause (i) of this Section 11.1.3 (such Inventions, patent rights and know-how described in clauses (i) through (iii), the “ Joint Technology ”). Subject to the license grants set forth in this Agreement, each Party shall be free to exploit, either itself or through the grant of licenses to Third Parties (which Third Party licenses may be further sublicensable), Joint Technology, throughout the world without restriction, without the need to obtain further consent from the other Party, and without any duty to account or payment of any compensation to the other Party. Paratek shall have the sole right to prosecute, maintain and enforce any patent rights within the Joint Technology, in its sole discretion, provided that Paratek shall provide CIPAN with a reasonable opportunity to review and comment on any patent filings (such comments to be considered for implementation by Paratek in good faith) with respect to the Joint Technology prior to submission thereof. Inventorship shall be determined in accordance with United States patent laws.

 

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11.2 Licenses .

11.2.1 Subject to the terms and conditions of this Agreement, during the Term, Paratek hereby grants to CIPAN, a non-exclusive, worldwide, non-transferable, non-sublicensable, royalty-free license under the Paratek Technology, including the Paratek Improvements, solely to the extent necessary for CIPAN to perform its obligations under this Agreement and the Quality Agreement, for the sole purpose of performing such obligations.

11.2.2 CIPAN shall, and hereby does, grant to Paratek a non-exclusive, worldwide, perpetual, irrevocable, sublicensable, royalty-free license under the CIPAN Technology, including the CIPAN Improvements, (a) to the extent necessary to effect any transfer of technology pursuant to this Agreement and (b) to conduct Paratek’s business activities with respect to the Products and Paratek Products, including the Manufacture and exploitation of the Products and Paratek Products by Paratek, its Affiliates, Paratek Licensees or Third Parties[* * *].

11.3 Technology Transfer . Promptly following the Effective Date, and thereafter during the Term at least once per Calendar Quarter, or more often upon Paratek’s reasonable request, CIPAN shall transfer to Paratek all CIPAN Technology, Paratek Improvements and Joint Technology in CIPAN’s possession and not previously transferred to Paratek, for the purpose of enabling Paratek to exercise the license set forth in Section 11.2.2 .

11.4 [†]

11.5 Rights in Bankruptcy . All rights and licenses granted under or pursuant to this Agreement by CIPAN are and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, licenses of right to “intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code. CIPAN agrees that Paratek, as licensee of such rights under this Agreement, shall retain and may fully exercise all of their rights and elections under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction. The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against CIPAN under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, Paratek shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property, which, if not already in Paratek’s possession, shall be promptly delivered to it (a) upon any such commencement of a bankruptcy proceeding upon Paratek’s written request therefor, unless CIPAN elects to continue to perform all of its obligations under this Agreement or (b) if not delivered under clause (a) above, following the rejection of this Agreement by or on behalf of CIPAN upon written request therefor by Paratek.

 

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12. REPRESENTATIONS, WARRANTIES AND COVENANTS

12.1 Representation and Warranties of Each Party . Each of Paratek and CIPAN hereby represents, warrants and covenants to the other Party hereto as follows:

12.1.1 it is a corporation or entity duly organized and validly existing under the laws of the state or other jurisdiction of incorporation or formation;

12.1.2 the execution, delivery and performance of this Agreement by such Party has been duly authorized by all requisite corporate action and do not require any shareholder action or approval;

12.1.3 it has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder;

12.1.4 the execution, delivery and performance by such Party of this Agreement and its compliance with the terms and provisions hereof does not and will not conflict with or result in a breach of any of the terms and provisions of or constitute a default under (i) a loan agreement, guaranty, financing agreement, agreement affecting a product or other agreement or instrument binding or affecting it or its property; (ii) the provisions of its charter or operative documents or by laws; or (iii) any order, writ, injunction or decree of any court or governmental authority entered against it or by which any of its property is bound; and

12.1.5 it shall comply with all applicable laws and regulations relating to its activities under this Agreement.

12.2 Representations and Warranties of CIPAN . CIPAN hereby further represents and warrants to Paratek as follows:

12.2.1 each Product at the time of delivery to Paratek (i) have been Manufactured, stored and shipped in accordance with cGMP and all applicable laws, rules, regulations or requirements; (ii) conform to the Specifications, are free from defects and are merchantable; (iii) are not adulterated or misbranded within the meaning of the FD&C Act; and (iv) have been shipped and stored in accordance with the procedures set forth under this Agreement and the Quality Agreement;

12.2.2 as of immediately prior to the delivery of each Product to Paratek, CIPAN has good and marketable title to all Products and Products are free from all liens, charges, encumbrances and security interests; and

12.2.3 CIPAN does not, at any time from and after the Effective Date, retain or use the services of (a) any person debarred under 21 U.S.C. § 335a or (b) any person who has been convicted of a crime as defined under the FD&C Act, in each case in any capacity associated with or related to the Manufacture or supply of Products or any service rendered to Paratek under this Agreement or the Quality Agreement.

12.3 Representation by Legal Counsel . Each Party hereto represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has

 

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participated in the drafting hereof. In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption shall exist or be implied against the Party which drafted such terms and provisions.

12.4 [ * * *]

 

13. INDEMNIFICATION, LIMITATION OF LIABILITY AND INSURANCE

13.1 Indemnification .

13.1.1 CIPAN shall indemnify, defend and hold harmless Paratek, its directors, officers, employees and agents (collectively, the “ Paratek Representatives ”) from and against all damages, losses, liabilities, expenses, claims, demands, suits, penalties or judgments or administrative or judicial orders (including reasonable attorneys’ fees and expenses) (collectively, “ Losses ”) to, from or in favor of Third Parties to the extent resulting from or arising out of (i) the [* * *] actions or omissions of CIPAN or CIPAN Representatives; (ii) any breach by CIPAN of its representations, warranties or covenants in this Agreement; (iii) any Recall or Seizure attributable to CIPAN’s performance or failure to perform pursuant to this Agreement (including amounts Paratek may pay or credit to its customers for Products so Recalled or Seized); (iv) any assertion that the Manufacture of any Product infringe any patent, copyright or trademark or misappropriate any trade secret or other intellectual property of any Third Party, except to the extent that any such allegation relates to the Manufacturing Information; or (v) CIPAN’s failure to comply with any applicable law, regulation or order (including environmental laws, regulations and orders and any failure by CIPAN to obtain and maintain any Regulatory Approvals relating to the Manufacturing of Product and required to be obtained and maintained by CIPAN under applicable law, regulation or order); provided , however , that, in each case, CIPAN shall not be required to indemnify pursuant to this Section 13.1.1 with respect to any Losses to the extent arising from or related to the [* * *] actions or [* * *] omissions of one or more Paratek Representatives or Paratek’s breach of its representations, warranties, covenants or other obligations hereunder. The provisions of this Section shall survive the termination or expiration of this Agreement.

13.1.2 Paratek shall indemnify, defend and hold harmless CIPAN, its directors, officers, employees and agents (collectively, the “ CIPAN Representatives ”) from and against all Losses to, from or in favor of Third Parties to the extent resulting from or arising out of (i) the [* * *] actions or omissions of Paratek or Paratek Representatives; (ii) any breach by Paratek of its representations, warranties or covenants in this Agreement; or (iii) any allegation that the use of the Manufacturing Information in accordance with this Agreement infringes any patent, copyright or trademark or misappropriate any trade secret or other intellectual property of any Third Party; provided , however , that, in each case, Paratek shall not be required to indemnify pursuant to this Section 13.1.2 with respect to any Losses to the extent arising from or related to the [* * *] actions or [* * *] omissions of one or more CIPAN Representatives or CIPAN’s breach of its representations, warranties, covenants or other obligations hereunder. The provisions of this Section shall survive the termination or expiration of this Agreement.

13.1.3 Each Party and its directors, officers, employees or agents (an “ Indemnified Party ”) shall promptly notify the other Party (the “ Indemnifying Party ”), in writing, of any claim asserted or threatened against such Indemnified Party for which such Indemnified Party is entitled to

 

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indemnification hereunder from the Indemnifying Party. With respect to any such claim the Indemnified Party shall reasonably cooperate with and provide such reasonable assistance to such Indemnifying Party as such Indemnifying Party may reasonably request, and all reasonable out-of-pocket costs of such assistance shall be paid by the Indemnifying Party. Such reasonable assistance may include providing copies of all relevant correspondence and other materials that the Indemnifying Party may reasonably request. The obligations of an Indemnifying Party under Sections 13.1.1 and 13.1.2 are conditioned upon the delivery of written notice to the Indemnifying Party of any asserted or threatened claim promptly after the Indemnified Party becomes aware of such claim, provided that the failure of the Indemnified Party to give such notice or any delay thereof shall not affect the Indemnified Party’s right to indemnification hereunder, except to the extent that such failure or delay impairs the Indemnifying Party’s ability to defend or contest any such claim. The Indemnifying Party shall have the right to assume the defense of any suit or claim for which indemnification is sought. If the Indemnifying Party defends the suit or claim, the Indemnified Party may participate in (but not control) the defense thereof at its sole cost and expense. An Indemnifying Party may not settle a suit or claim, without the consent of the Indemnified Party, if such settlement would (a) impose any monetary obligation on the Indemnified Party for which indemnification is not provided hereunder, (b) not include a full release of claims with respect to the Indemnified Party (c) require the Indemnified Party to submit to an injunction or (d) otherwise limit the Indemnified Party’s rights under this Agreement. Any payment made by an Indemnifying Party to settle any such suit or claim shall be at its (or its insurer’s) own cost and expense.

13.2 EXCEPT [* * *], IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR SPECIAL, INDIRECT, PUNITIVE, EXEMPLARY, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS OR REVENUES) ARISING OUT OF, OR AS A RESULT OF, THE SALE, DELIVERY, NONDELIVERY, SERVICING, USE OR LOSS OF USE OF THE PRODUCT, REGARDLESS OF WHETHER SUCH CLAIM IS BASED ON BREACH OF WARRANTY, BREACH OF CONTRACT, NEGLIGENCE, STRICT TORT OR OTHER THEORY.

13.3 Insurance . CIPAN shall obtain and maintain insurance adequate to cover its obligations under this Agreement, to the extent such obligations are insurable. Without limiting the foregoing, CIPAN shall obtain and maintain the following kinds of insurance with the minimum limits set forth below.

 

Kind of Insurance

  

Minimum Limits

 

[* * *]

     [* * *

[* * *]

     [* * * ]

[* * *]

     [* * *

Upon request, CIPAN shall furnish insurance certificates as directed by Paratek, satisfactory in form and substance to Paratek, showing the above coverages, and providing for at least ten (10) days’ prior written notice to Paratek by the insurance company of cancellation or modification. Paratek shall be named as an additional insured on the CIPAN’s policies. Coverage shall be procured with carriers [* * *].

 

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14. TERM AND TERMINATION

14.1 Term . This Agreement shall commence on the Effective Date and continue, with respect to each Product, unless sooner terminated as set forth below in this Article 14 or in Article 16 , for the duration of the Initial Term. After the Initial Term, this Agreement shall continue, with respect to each Product, for successive Renewal Terms unless either Party shall have given written notice of termination of this Agreement in its entirety or with respect to such Product to the other Party not less than [* * *] prior to the expiration of the Initial Term or the then-current Renewal Term.

14.2 Termination for Material Breach . In the event that either Party breaches any of its material obligations under this Agreement, the other Party may deliver written notice of such breach to the breaching Party. If the breaching Party fails to cure such breach within [* * *] following its receipt of such notice, the non-breaching Party may terminate this Agreement either in its entirety or on a Product-by-Product basis with respect to the Product to which such breach relates, by written notice to the breaching Party.

14.3 Termination for Insolvency . In the event that (i) either Party is declared insolvent or bankrupt by a court of competent jurisdiction; (ii) either Party files a voluntary petition of bankruptcy in any court of competent jurisdiction or (iii) this Agreement is assigned by either Party for the benefit of creditors, then the other Party may terminate this Agreement either in its entirety or on a Product-by-Product basis by delivering written notice of termination, effective immediately. Such termination shall not give rise to the payment of any penalty, damages or indemnity by the terminating Party.

14.4 Effects of Termination .

14.4.1 Termination of this Agreement for any reason shall be without prejudice to the right of either Party to receive all payments accrued and unpaid at the effective date of such termination or expiration, without prejudice to the remedy of either Party in respect to any previous breach of any of the representations, warranties or covenants herein contained and without prejudice to any other provisions hereof which expressly or necessarily call for performance after such termination.

14.4.2 Upon termination of this Agreement for any reason, (i) at Paratek’s request, CIPAN shall supply Paratek with its inventory of Materials, finished Products and/or works-in-progress and, for requested items, Paratek shall pay CIPAN [* * *]; (ii) all Paratek Materials and Confidential Information of Paratek shall be returned to Paratek; and (iii) at Paratek’s request, CIPAN shall return to Paratek all retention samples of Product.

14.4.3 Promptly following either Party’s delivery of a notice of termination to the other Party, CIPAN shall cooperate with Paratek to transfer and transition supply of the Products to a Third Party supplier. Upon Paratek’s request, CIPAN shall cooperate with Paratek in the transfer of technology and know-how necessary to Manufacture Products to such Third Party supplier, including providing Paratek and the Third Party supplier with reasonable access to the Facility and consulting services related to Manufacturing of the Product. CIPAN shall conduct such activities at [* * *] expense unless [* * * ] , in which case [* * *].

 

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14.4.4 Notwithstanding anything to the contrary in this Agreement, if this Agreement is terminated by Paratek for any reason, upon Paratek’s request, CIPAN shall continue to Manufacture and supply Products to Paratek pursuant to this Agreement until [* * *]. During such time as CIPAN is continuing to supply Products to Paratek pursuant to this Section 14.4.4 , Paratek shall continue to make payments to CIPAN for such supply in accordance with this Agreement and, for clarity, all terms of the Agreement relevant to CIPAN’s Manufacture and supply of Products shall survive termination and remain in effect.

14.5 Survival . The following provisions shall survive the expiration or termination of this Agreement: Article 1 (Definitions) (solely to the extent necessary to give meaning to other surviving sections), Section 7.4 (Payment) and Section 7.5 (Taxes and Other Charges) (in each case, solely with respect to payment obligations accruing prior to expiration or termination), Section 9.5 (Samples and Record Retention), Section 9.7 (Recalls and Seizure), Section 11.1 (Ownership of Intellectual Property), Section 11.2.2 (License to Paratek), Section 11.4 ([* * *]), Section 11.5 (Rights in Bankruptcy), Section 13.1 (Indemnification), Section 13.2 (Third Party Liability), Section 13.3 (Insurance) (for [* * *] following expiration or termination of this Agreement), Section 14.4 (Effects of Termination), Article 15 (Confidentiality), Article 17 (Notices) and Article 18 (General). Without limiting the foregoing, all of CIPAN’s obligations under this Agreement relating to compliance with cGMP in respect of the Materials and Products shall continue in force following expiration or termination of this Agreement according to the requirements of cGMP.

 

15. CONFIDENTIALITY

15.1 Nondisclosure Obligation . Each of CIPAN and Paratek shall use only in accordance with this Agreement and shall not disclose to any Third Party the Confidential Information received by it from the other Party pursuant to this Agreement, without the prior written consent of the other Party. The foregoing obligations shall survive for a period of [* * *] after the termination or expiration of this Agreement. These obligations shall not apply to Confidential Information that:

 

  (i) is known by the receiving Party at the time of its receipt, and not through a prior disclosure by the disclosing Party, as documented by business records;

 

  (ii) is at the time of disclosure or thereafter becomes published or otherwise part of the public domain without breach of this Agreement by the receiving Party;

 

  (iii) is subsequently disclosed to the receiving Party by a Third Party who has the right to make such disclosure; or

 

  (iv) is developed by the receiving Party independently of the Confidential Information received from the disclosing Party and such independent development can be documented by the receiving Party.

 

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15.2 Permitted Disclosures . Each Party may disclose the other Party’s Confidential Information to its employees and Affiliates on a need-to-know basis and to its agents or consultants to the extent required to accomplish the purposes of this Agreement; provided that the recipient Party obtains prior agreement from such agents and consultants to whom disclosure is to be made to hold in confidence and not make use of such Confidential Information for any purpose other than those permitted by this Agreement. Each Party may also disclose the other Party’s Confidential Information as required by law, regulation, rule, act or order of any governmental authority or agency to be disclosed by a Party; provided that notice is promptly delivered to the other Party in order to provide an opportunity to seek a protective order or other similar order with respect to such Confidential Information and thereafter the disclosing Party discloses to the requesting entity only the minimum Confidential Information required to be disclosed in order to comply with the request, whether or not a protective order or other similar order is obtained by the other Party. Each Party will use at least the same standard of care as it uses to protect proprietary or confidential information of its own to ensure that such employees, agents, consultants, and Affiliates do not disclose or make any unauthorized use of the other Party’s Confidential Information.

15.3 Disclosure of Agreement . Neither CIPAN nor Paratek shall release to any Third Party or publish in any way any non-public information with respect to the terms of this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed, provided that either Party may disclose the terms of this Agreement

 

  (i) to the extent required to comply with applicable laws, including the rules and regulations promulgated by the United States Securities and Exchange Commission; provided , further , that prior to making any such disclosure, the Party intending to so disclose the terms of this Agreement shall (a) provide the non-disclosing Party with written notice of the proposed disclosure and an opportunity to review and comment on the intended disclosure which is reasonable under the circumstances and (b) shall seek confidential treatment for as much of the disclosure as is reasonable under the circumstances, including, seeking confidential treatment of any information as may be requested by the other Party; or

 

  (ii) to one (1) or more Third Parties and/or their advisors in connection with a proposed spin-off, joint venture, divestiture, merger or other similar transaction involving all, or substantially all, of the Products, assets or business of the disclosing Party to which this Agreement relates or to lenders, investment bankers and other financial institutions of its choice solely for purposes of financing the business operations of such Party; provided , further , that either (a) the other Party has consented to such disclosure or (b) such Third Parties have signed confidentiality agreements with respect to such information on terms no less restrictive than those contained in this Article 15.

15.4 Publicity . All publicity, press releases and other announcements relating to this Agreement or the transactions contemplated hereby shall be reviewed in advance by, and shall be subject to the approval of, both Parties.

 

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16. FORCE MAJEURE

If the production, delivery, acceptance, or use of Products specified for delivery under this Agreement, or the performance of any other obligation of one of the Parties hereunder is prevented, restricted or interfered with by reason of any cause or event beyond the reasonable control of such Party and without the fault or negligence of such Party (a “ Force Majeure Event ”), the Party so affected, upon prompt notice to the other Party, shall be excused from performing such obligation during the continuance of such Force Majeure Event. If such Force Majeure Event continues for a period of [* * *] the other Party may terminate this Agreement by notice in writing provided that such Force Majeure Event is continuing. The affected Party as a result of a Force Majeure Event shall use all reasonable efforts, at its own expense, to eliminate the Force Majeure Event and to resume performance as soon as practicable.

 

17. NOTICES

17.1 Ordinary Notices . Correspondence, reports, documentation, and any other communication in writing between the Parties in the course of ordinary implementation of this Agreement shall be delivered by hand, sent by facsimile, overnight courier or by airmail to the employee or representative of the other Party who is designated by such other Party to receive such written communication at the address or facsimile numbers specified by such employee or representative.

17.2 Extraordinary Notices . Extraordinary notices and communications (including notices of termination, force majeure, material breach, change of address, requests for disclosure of Confidential Information, claims or indemnification) shall be in writing and sent to each Party by prepaid registered or certified airmail, or by facsimile confirmed by prepaid registered or certified airmail letter (and shall be deemed to have been properly served to the addressee upon receipt of such written communication) to the address set forth in Section 17.3 or such other address as notified in writing by such Party to the other Party.

17.3 Addresses .

If to Paratek:

Paratek Pharmaceuticals, Inc.

75 Park Plaza, 4th Floor

Boston, MA 02116

Attention: Vice President of Manufacturing

With a copy to:

Paratek Pharmaceuticals, Inc.

75 Park Plaza, 4th Floor

Boston, MA 02116

Attention: General Counsel

 

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If to CIPAN:

CIPAN

Rua da Estação, n°42

2600-726 Castanheira do Ribatejo

Portugal

Attention: Chief Executive Officer

 

18. GENERAL

18.1 Governing Law . This Agreement shall be construed in accordance with and governed by the law of [* * *] without giving effect to its conflict of laws provisions.

18.2 Escalation of Disputes . In the event of any dispute relating to this Agreement or the Quality Agreement, either Party may refer such dispute to the Supply and Quality Committee for resolution. If the Supply and Quality Committee is unable to resolve such dispute within [* * *] of such referral, either Party may escalate such dispute to each Party’s senior management for resolution. If each Party’s senior management is unable to resolve such dispute within [* * *] of such escalation, either Party may commence arbitration pursuant to Section 18.3 .

18.3 Arbitration . Any dispute relating to this Agreement or the Quality Agreement that cannot be resolved pursuant to Section 18.2 may be referred by either Party to confidential arbitration in accordance with the ICC Rules of Arbitration. The arbitration hearing shall be held as soon as practicable following submission to arbitration. The arbitration hearing shall be held in London, England. The Parties shall request that the arbitration panel render a formal, binding non-appealable resolution and award on each issue as expeditiously as possible. In any arbitration, the prevailing Party shall be entitled to reimbursement of its reasonable attorneys’ fees and the Parties shall use all reasonable efforts to keep arbitration costs to a minimum. Judgment upon the award may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant Party or its assets.

18.4 Assignment . This Agreement shall be binding upon and inure to the benefit of each Party and their respective heirs, successors and permitted assigns. This Agreement shall not be assignable or transferable by either Party hereto without the prior written consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed), except that Paratek may assign this Agreement without CIPAN’s consent to an Affiliate, a Paratek Licensee or a successor in connection with the merger, consolidation, reorganization or sale of all, or substantially all, of the Products, assets or business to which this Agreement relates. Any permitted assignee of this Agreement shall agree in writing to comply with all obligations of the assigning Party under this Agreement. CIPAN shall not subcontract any of its work hereunder without Paratek’s prior written consent and any such consent given by Paratek shall not release CIPAN from its obligations hereunder. For clarity, any Change of Control of CIPAN shall be deemed an assignment of this Agreement and subject to the provisions of this Section 18.4 , regardless of the structure of such Change of Control.

18.5 Change of Control . During the Term, CIPAN will notify Paratek in writing if at any time CIPAN reasonably anticipates that a Change of Control will occur in the next thirty (30) days. [* * *]

 

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18.6 Performance . Each Party agrees to perform its obligations under this Agreement, including under any Scope of Work, in a timely manner. CIPAN shall allocate adequate resources to execute its obligations under this Agreement, including under each Scope of Work. CIPAN represents and warrants that all Services shall be performed by qualified personnel in accordance with the highest industry standards.

18.7 Further 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.

18.8 Entire Agreement . This Agreement, all Exhibits attached hereto, and the Quality Agreement (as the same may be amended from time to time by the written agreement of the Parties) constitute the entire agreement between the Parties with respect to the subject matter hereof and supersedes, as of the Effective Date, all other documents, agreements, verbal consents, arrangements and understandings between the Parties with respect to the subject matter hereof, including that certain Non-Disclosure Agreement between the Parties dated as of March 16, 2015, and that certain letter agreement between the Parties dated as of February 18, 2016. This Agreement shall not be amended orally, but only by an agreement in writing, signed by both Parties that states that it is an amendment to this Agreement.

18.9 Severability . If and to the extent that any provision (or any part thereof) of this Agreement is held to be invalid, illegal or unenforceable, in any respect in any jurisdiction, the provision (or the relevant part thereof) shall be considered severed from this Agreement and shall not serve to invalidate the remainder of such provision or any other provisions hereof. The Parties shall make a good faith effort to replace any invalid, illegal or unenforceable provision (or any part thereof) with a valid, legal and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

18.10 Independent Contractor . CIPAN shall act as an independent contractor and neither Party shall have any authority to represent or bind the other Party in any way.

18.11 No Waiver . Any waiver by one Party of any right or such Party or obligation of the other Party must be in writing and shall not operate as a waiver of any subsequent right or obligation.

18.12 Equitable Relief . CIPAN acknowledges that any breach or threatened breach by CIPAN of its obligations under this Agreement (including under any Scope of Work) will cause irreparable harm to Paratek and that money damages would not be adequate to remedy such harm. Therefore, in addition to any other remedies available at law or in equity, Paratek shall be entitled to injunctive relief to prevent any such breach, without proof of damages or posting of a bond.

18.13 Counterparts . This Agreement may be executed in one (1) or more counterparts, each of which shall be deemed an original, and together shall constitute one and the same agreement and shall become effective when one (1) or more counterparts have been signed by each of the Parties and delivered to the other Party, it being understood that both Parties need not sign the same counterpart. This Agreement, following its execution, may be delivered via PDF copies or other form of electronic delivery, which shall constitute delivery of an execution original for all purposes.

 

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[ Signature page follows. ]

 

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

 

PARATEK PHARMACEUTICALS, INC.
By:   /s/ Evan Loh, MD
  Name:   Evan Loh, MD
  Title:   President

 

CIPAN – COMPANHIA INDUSTRIAL PRODUTORA DE ANTIBIÓTICOS, S.A.
By:   /s/ Teresa Alves     /s/ Hector ARA
  Name:   Teresa Alves     Hector ARA
  Title:   CEO     President Board Directors

 

[ Signature page to Manufacturing and Services 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.

 

EXHIBIT A

Prices

[ * * *]

[ * * *]

 

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

 


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. WHERE SIX PAGES OF MATERIAL HAVE BEEN OMITTED, THE REDACTED MATERIAL IS MARKED WITH [ ].

 

EXHIBIT B

[ ]

 

Exhibit 10.29

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.

Execution Version

Outsourcing Agreement

Between

Paratek Pharmaceuticals, Inc.

and

CARBOGEN AMCIS AG

Date

30 December 2016


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.

 

Table of Contents

 

Article 1

 

Interpretation

     7  

1.1

 

Definitions

     7  

1.2

 

Other Definitions

     11  

1.3

 

Currency

     11  

1.4

 

Headings

     11  

1.5

 

Exhibits

     11  

1.6

 

Applicable Law

     12  

Article 2

 

Term

     12  

2.1

 

Term

     12  

2.2

 

Effect of Expiration on Purchase Orders

     12  

Article 3

 

Supply of Product

     12  

3.1

 

Supply of Product

     12  

3.2

 

Manufacturing Services

     13  

3.3

 

Supply of Materials and Customer Material

     13  

3.4

 

Production Capacity

     15  

3.5

 

Processing Changes

     15  

3.6

 

Monitoring of Facilities

     16  

3.7

 

Subcontracting

     16  

3.8

 

[* * *]

     16  

3.9

 

[* * *]

     17  

3.10

 

Territory Expansion

     17  

3.11

 

Supply to Customer Licensees

     17  

3.12

 

Alternative Supply

     17  

Article 4

 

Forecasts

     18  

4.1

 

Short Term Rolling Forecasts

     18  

4.2

 

Long Term Forecasts

     18  

 

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Article 5

 

Testing and Samples

     19  

5.1

 

Release Testing

     19  

5.2

 

Additional Release Testing

     19  

5.3

 

Retention Samples

     19  

5.4

 

Stability Testing

     20  

5.5

 

Reference Standards

     20  

5.6

 

Preparation of Process Qualification

     20  

Article 6

 

Purchase Orders

     20  

6.1

 

Placement of Purchase Orders

     20  

6.2

 

Acceptance of Orders

     20  

6.3

 

Delays

     21  

6.4

 

Cancellation of Purchase Orders

     21  

6.5

 

Material Failure of Supply

     21  

6.6

 

Services

     21  

Article 7

 

Shipment of Product

     22  

7.1

 

Storage of Product

     22  

7.2

 

Release and Shipment of Product

     22  

7.3

 

Documentation

     23  

7.4

 

Steering Committee

     23  

Article 8

 

Acceptance of Shipments

     23  

8.1

 

Acceptance of Shipments

     23  

8.2

 

Dispute of Rejected Product

     24  

8.3

 

Remedies

     24  

Article 9

 

Fees

     25  

9.1

 

Fees

     25  

9.2

 

Adjustments to Fees

     25  

9.3

 

Taxes

     26  

 

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Article 10

 

Invoicing and Payment

     26  

10.1

 

Issuance of Invoices

     26  

10.2

 

Invoice Contents

     26  

10.3

 

Delay of Shipment

     27  

10.4

 

Payment of Invoices

     27  

Article 11

 

Intellectual Property

     27  

11.1

 

Title

     27  

11.2

 

No Grant of Rights

     27  

11.3

 

Grant of License by Customer

     28  

11.4

 

Ownership of Inventions

     28  

11.5

 

Patents to Inventions

     28  

11.6

 

No Use of Trademarks

     28  

11.7

 

[* * *]

     28  

Article 12

 

Confidentiality & Publicity

     29  

12.1

 

Obligation of Confidentiality

     29  

12.2

 

Disclosure with Consent

     29  

12.3

 

Publicity

     29  

12.4

 

Disclosure Required by Law

     30  

12.5

 

Employee Confidentiality and Invention Assignment

     30  

12.6

 

Duration of Obligation

     30  

Article 13

 

Representations, Warranties and Covenants

     31  

13.1

 

Supplier’s Representations, Warranties and Covenants

     31  

13.2

 

Customer’s Representations, Warranties and Covenants

     32  

13.3

 

No Other Warranty

     32  

13.4

 

No Consequential Damages and Limitation of Liability

     33  

Article 14

 

Indemnification

     33  

14.1

 

Indemnification of Supplier

     33  

 

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14.2

 

Indemnification of Customer

     33  

14.3

 

Intellectual Property Indemnity

     34  

14.4

 

Indemnification Procedure

     34  

Article 15

 

Insurance

     35  

15.1

 

Insurance Coverage

     35  

15.2

 

Evidence of Insurance

     35  

Article 16

 

Legal and Regulatory

     35  

16.1

 

Compliance with Laws

     35  

16.2

 

Maintenance of Records

     36  

16.3

 

Notice of Reports

     36  

16.4

 

Drug Master Files

     36  

16.5

 

Compliance with Regulatory Standards

     36  

16.6

 

Inspection

     36  

Article 17

 

Recalls

     37  

17.1

 

Safety

     37  

17.2

 

Recalls

     37  

17.3

 

Supplier’s Liability for Recall

     37  

17.4

 

Customer’s Liability for Recall

     37  

17.5

 

Replacement Shipments

     37  

Article 18

 

Termination

     38  

18.1

 

Termination

     38  

18.2

 

Consequences of Termination

     39  

18.3

 

Return of Samples

     40  

18.4

 

Return of Confidential Information

     40  

18.5

 

Survival

     40  

Article 19

 

Miscellaneous

     41  

19.1

 

Assignment; Inurement

     41  

 

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19.2

 

Change of Control

     41  

19.3

 

Counterparts

     41  

19.4

 

Dispute Resolution

     41  

19.5

 

Force Majeure

     42  

19.6

 

Performance

     42  

19.7

 

Further Assurances

     42  

19.8

 

Independent Contractors

     42  

19.9

 

Injunctions

     43  

19.10

 

Notices

     43  

19.11

 

Entire Agreement

     44  

19.12

 

Severability

     44  

19.13

 

Waiver

     44  

 

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THIS AGREEMENT (this “Agreement”), dated December 30, 2016 (the “Effective Date”), is

BETWEEN:

Paratek Pharmaceuticals, Inc., a company having a place of business at 75 Park Plaza, 4 th Floor, Boston, MA 02116, USA (“Customer”)

AND:

CARBOGEN AMCIS AG, a company having a place of business at Hauptstrasse 171, CH 4416 Bubendorf, Switzerland (“Supplier” and, collectively with Customer, the “Parties”, and each, a “Party).

WHEREAS:

A. Customer is the owner of certain technology and patent rights regarding the Product (as defined herein) having the description set out in Exhibit A (Description of Product) and Exhibit B (Chemical Synthesis);

B. Customer has filed / intends to file for approval with the United States Food and Drug Administration and/or its foreign equivalents, an Investigational New Drug Application (“IND”) and a New Drug Application (“NDA”), and/or the foreign equivalents thereof, for certain formulations containing the Product;

C. Supplier is engaged in the business of performing contracted process development, Manufacturing and supply services of active pharmaceutical ingredients (“APIs”) and intermediates; and

D. Customer desires that Supplier Manufacture the Product in bulk quantities, and Supplier desires to perform such services, each on the terms and conditions set out in this Agreement.

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

Article 1 Interpretation

1.1 Definitions

In this Agreement, in addition to words and phrases defined where they are used, the following words and phrases shall have the following meanings:

a) “Affiliate” of a Party shall mean any entity, directly or indirectly, controlling, controlled by, or under common control with a Party. For purposes of this definition, “controlling” (including, “controlled by” and “under

 

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common control”) shall mean: (a) ownership of at least fifty percent (50%) of the equity capital or other ownership interest in or of an entity; (b) the power to control or otherwise direct the affairs of an entity; (c) in the case of non-stock organizations, the power to control the distribution of profits of an entity; or (d) such other relationship as, in fact, results in actual control over the management, business, and affairs of an entity;

b) “Agreement” means this Supply Agreement for the Product, including all Exhibits attached hereto;

c) “Applicable Law” means any applicable law, statute, rule, regulation, order, judgment or ordinance of any governmental or regulatory authority or agency;

d) “Applicable Regulatory Authority” means FDA, EMEA and/or other equivalent governmental or regulatory authorities or agencies and any successors thereto;

e) “Business Day” means any day on which banking institutions in Boston, Massachusetts and Bubendorf, Switzerland are open for business;

f) “Campaign” means a schedule of one or more discrete batches of Product Manufactured in sequence by Supplier without pausing to change over to manufacture of any other product;

g) “cGMP Requirements” means the current Good Manufacturing Practices standards required under ICH Q7A guideline and/or any similar standards of applicable governmental and/or regulatory authorities as defined in the Quality Agreement;

h) “Change of Control” means any transaction or series of transactions wherein (a) the voting securities of Supplier outstanding immediately prior thereto cease to represent at least fifty percent (50%) of the combined voting power of the surviving entity immediately after such transaction or transactions; (b) the stockholders or equity holders of Supplier approve a plan of complete liquidation of Supplier, or an agreement for the sale or disposition by Supplier of all or substantially all of Supplier’s assets, other than to an Affiliate; (c) a Third Party becomes the beneficial owner of fifty percent (50%) or more of the combined voting power of the outstanding securities of Supplier; or (d) substantially all of Supplier’s business or assets which relate to this Agreement are sold or otherwise transferred to a Third Party;

i) “Chemical Synthesis” means established and reliable execution of chemical reactions in order to produce the “Product” by applying chemical and physical manipulations usually involving one or more reactions;

j) “Confidential Information” means all written information and data provided by the Parties to each other hereunder and identified as being “Confidential” and provided to the recipient, except that the term “Confidential Information” shall not apply to any information or any portion thereof which:

(i) was known to the recipient or any of its Affiliates, as evidenced by its written records, before receipt thereof under this Agreement;

(ii) is disclosed to the recipient or any of its Affiliates, without obligations of confidentiality, during the Term by a Third Party who has the right to make such disclosure;

 

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(iii) is or becomes part of the public domain through no breach of this Agreement by the recipient; or

(iv) the recipient can demonstrate through competent written records is independently developed by or for the recipient or any of its Affiliates by individuals or entities who have not had access to the information disclosed under this Agreement.

The Confidential Information may include, without limitation, data, know-how, formulae, processes, designs, sketches, photographs, plans, drawings, specifications, samples, reports, studies, data, findings, inventions, ideas, production facilities, machines, production capacities, prices, market share, research and development projects, and other market data. For the purposes of this Agreement, Master Batch Record shall be deemed the Confidential Information of Customer and the Product Specifications shall be deemed the Confidential Information of Customer;

k) “Customer Licensee” means any Third Party to whom Customer grants a license or a right to research, develop, make, have made, use, sell, have sold, import, export or otherwise exploit a Product or Customer Product;

l) “Customer Material” means the compound satisfying the Customer Material Specification;

m) “Customer Material Specifications” means the specifications for the Customer Material set forth in the Quality Agreement, as such may be amended from time to time in accordance with its terms;

n) “Customer Product” means any pharmaceutical product owned, controlled or sold by Customer, its Affiliates or Customer Licensees that incorporates or is derived from a Product;

o) “Customer Technology” means:

[* * *];

p) “Drug Master File” or “DMF” means a submission to the Applicable Regulatory Authority that provides detailed information about facilities, processes or articles used in the Manufacture, processing, packaging and storing of a drug or excipient, among others, in order to obtain appropriate Applicable Regulatory Authority approval for the production for that drug;

q) “EMEA” means the European Medicines Agency and any successors thereto;

r) “FDA” means the United States Food and Drug Administration and any successors thereto;

s) “FD&C Act” means the Federal Food, Drug and Cosmetic Act, as the same may be amended or supplemented from time to time;

t) “Fees” means the fees specified in Exhibit C, as may be amended by the Parties in accordance with this Agreement;

 

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u) “Improvements” means, in relation to any Intellectual Property, any and all versions, adaptations, modifications, improvements, enhancements, changes, revisions, translations and derivative works (whether complete or incomplete), of, to, in or based upon such Intellectual Property;

v) “Intellectual Property” means anything that is protected by any Rights in and to any and all patents, trade-marks, copyrights, industrial designs, Confidential Information, know-how and processes, and all other intellectual and industrial property Rights whatsoever and world-wide (whether registered or unregistered and including Rights in any application for any of the foregoing);

w) “Manufacture,” “Manufactured” or “Manufacturing” means all activities involved in the production of Products to be supplied to Customer or its Affiliates hereunder, including the preparation, formulation, finishing, testing, storage and packaging for shipment of Products and the handling, storage and disposal of any residues or wastes generated thereby;

x) “Manufacturing Process” means the activities set out in (a) this Agreement, (b) the Master Batch Record and (c) Supplier’s standard operating procedures for the Manufacturing, characterization and testing, and bulk packaging and storage of the Product;

y) “Master Batch Record” means the complete detailed Manufacturing and control instructions and specifications for the Manufacturing Process for the Product, as defined by the applicable validation protocol and cGMP Requirements, as may be amended from time to time; in accordance with cGMP Requirements, or by mutual agreement of both Customer and Supplier;

z) “Materials” means any and all materials, reagents, chemicals, compounds, physical samples, models, specimens and any other similar physical substances that are used in the Manufacture of the Product except for Customer Materials, including processes and activities leading up to and peripheral to the Manufacture of the Product;

aa) “Product” means the compound product as described in Exhibit A satisfying the Product Specifications;

bb) “Product Specifications” means the specifications for the Product set forth in the Quality Agreement, as such may be amended from time to time in accordance with its terms;

cc) “Quality Agreement” shall mean that certain Quality Agreement Relating to Contract Manufacturing Services by and between Customer and Supplier, dated [* * *];

dd) “Recall” means any action by Supplier, Customer or any of their respective Affiliates, to recover possession of the Product or finished products containing the Product shipped to Third Parties. “Recalled” and “Recalling” shall have comparable meanings;

ee) “Rights” shall mean any and all proprietary, possessory, use and ownership rights, titles and interests (whether beneficial or legal) of all kinds whatsoever, howsoever arising, world-wide and whether partial or whole in nature;

 

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ff) “Seizure” means any action by an Applicable Regulatory Authority in any jurisdiction, to detain or destroy any Product or any intermediate or finished products containing the Product or prevent release of the Product or finished products containing the Product. “Seized” and “Seizing” shall have comparable meanings;

gg) “Services” refers to any activities undertaken by Supplier relating to the Product, as referenced in Section 6.6 (Services);

hh) “Supplier Technology” means, to the extent such is not Customer Technology: [* * *];

ii) “Term” means the Initial Term and the Renewal Term, if applicable;

jj) “Territory” means the United States of America and its territories and possessions and any other countries in the world added to the definition of “Territory” pursuant to Section 3.10;

kk) “Third Party” means any party other than a Party to this Agreement or an Affiliate of a Party to this Agreement; and

ll) “Yield” means, with respect to any batch of Product manufactured by Supplier under this Agreement, a percentage equal to the amount of Customer Material contained in such batch of Product delivered and accepted by Customer under this Agreement divided by the amount of Customer Material used in the Manufacturing Process of such batch of Product.

1.2 Other Definitions

Any words defined elsewhere in this Agreement shall have the particular meaning assigned to the words.

1.3 Currency

In this Agreement, all references to money or payments means U.S. Dollars and all payments made hereunder shall be made in that currency.

1.4 Headings

The headings in this Agreement are solely for convenience of reference and shall not be used for purposes of interpreting or construing the provisions hereof.

1.5 Exhibits

The Exhibits attached hereto shall be deemed to form an integral part of this Agreement. In the event of a conflict between the terms and conditions set out in this Agreement and the terms and conditions set out in any Exhibit hereto, the terms and conditions set out in this Agreement shall govern.

 

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1.6 Applicable Law

This Agreement shall be governed by and construed in accordance with the substantive Laws of the [* * *], excluding any rules of conflicts of laws that would apply the substantive laws of any other jurisdiction.

Article 2 Term

2.1 Term

[* * *]

This Agreement shall commence on the Effective Date and shall be valid until the [* * *] (the “Initial Term”). Both Parties shall use reasonably diligent efforts to come to a subsequent long-term agreement, including good faith negotiations regarding minimum volume-based Product commitments from Customer to Supplier, no later than [* * *] to replace this Agreement and serve as a long-term supply agreement between the Parties. Should the Parties have not agreed to the following agreement by [* * *], this Agreement shall automatically stay in force for a maximum of [* * *] (unless otherwise mutually agreed by the Parties or as otherwise set forth in Section 18.1(a)) or until the Parties have signed the follow-on agreement (the “Renewal Term”).

2.2 Effect of Expiration on Purchase Orders

For the avoidance of doubt, any signed Purchase Order which has not been completed at the date of expiry shall continue in effect unless cancelled in accordance with Section 6.4 or Article 18. For further avoidance of doubt, the terms and conditions of this Agreement shall remain applicable to any such signed Purchase Order which continues in effect.

Article 3 Supply of Product

3.1 Supply of Product

a) During the Term, Supplier shall Manufacture the Product and perform all Services at its facilities located at Bubendorf, Switzerland and at Neuland, Switzerland (such facilities, the “Facilities” and each, a “Facility”). Supplier will supply to Customer or Customer’s designee, the Product, Manufactured in accordance with the accepted Purchase Order placed by Customer, Master Batch Record, the Product Specifications, the Quality Agreement and cGMP Requirements and, subject to Section 3.1(b), in such quantities as ordered by Customer in Purchase Orders submitted pursuant to Section 6.1 and accepted pursuant to Section 6.2.

 

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b) [* * *]

c) [* * *]

d) In the event the Product manufactured and delivered to Customer under a Purchase Order is less than [* * *] of the amount ordered by Customer under such Purchase Order or if Customer otherwise reasonably requests, [* * *].

d) For clarity, nothing in this Section 3.1 limits Supplier’s liability under this Agreement or under law, including liability for negligence, willful misconduct and failure to comply with Product Specifications; [* * *].

3.2 Manufacturing Services

Supplier will make available its labor, equipment and Facilities for the Manufacture and characterization of the Product, including in-process and quality control analyses, release testing, storage and bulk packaging of the Product, and shipping of the Product, in accordance with the terms and conditions of this Agreement.

3.3 Supply of Materials and Customer Material

a) Materials

 

  i. Supplier shall, at its cost, be responsible for the purchase, planning, supply, control, testing, release and compliance of all Materials (other than Customer Materials unless expressly otherwise set forth in this Agreement) required for the Manufacture of the Product and performance of Services under accepted Purchase Orders.

 

  ii. Supplier shall ensure that all Materials (other than Customer Material unless expressly otherwise set forth in this Agreement) used in the Manufacture of the Product and performance of Services shall comply with the specifications mutually agreed by the Parties in writing and applicable requirements of the Quality Agreement.

 

  iii. Supplier shall test and inspect all Materials as set forth in the Quality Agreement and Supplier’s standard incoming inspection and testing procedures, which at a minimum will include appearance and identity testing.

b) Customer Material

 

  i. Customer or its designee (for which Customer is responsible) shall, at its cost, be responsible for the planning, supply, control, testing, release and compliance of all Customer Materials supplied to Supplier that are required for the Manufacture of the Product and performance of Services under accepted Purchase Orders. Customer shall ensure that all Customer Materials meet the Customer Material Specifications.

 

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  ii. Customer or its designee (for which Customer is responsible) shall, at its cost, be responsible for the qualification of suppliers of Customer Materials.

 

  iii. Customer or its designee (for which Customer is responsible) shall ensure that all Customer Materials used in the Manufacture of the Product and performance of Services shall meet applicable requirements set forth in the Quality Agreement.

 

  iv. Supplier shall test and inspect all Customer Materials in accordance with the Quality Agreement and Supplier’s standard incoming inspection and testing procedures. Supplier shall also independently release Customer Materials (but Supplier shall not use any Customer Materials that have not also been released by Customer).

 

  v. Upon receipt of a Purchase Order from Customer, Supplier will inform Customer of the latest delivery date required for Customer Materials [* * *]. Customer will use commercially reasonable efforts to coordinate delivery of Customer Materials by that date according to [* * *].

 

  vi. If Customer is unable to deliver Customer Materials by the date required by Supplier, this will be promptly communicated to Supplier. Supplier will use commercially reasonable efforts to reallocate capacity and accommodate the planned Campaign at a later date. [* * *] Supplier will be released from its obligation under the relevant Purchase Order and any associated penalties regarding delivery date for the corresponding Product. In the event of any such delay in the delivery of Customer Materials to Supplier, the Parties shall negotiate in good faith and agree upon a revised schedule for the supply of Products to Customer or its designee, which revised schedule shall be binding on Supplier in accordance with this Agreement.

 

  vii. In the event that Customer Materials delivered to Supplier are found by Supplier to be non-conforming to the Customer Material Specifications at the time of delivery of such Customer Materials to Supplier and Customer challenges this finding, the Parties shall conduct a joint investigation. If Supplier and Customer are unable to resolve the issue of non-compliance then a sample of the relevant Customer Material will be submitted to an independent laboratory reasonably acceptable to both Parties for testing against the Customer Material Specifications, and determination whether or not the Customer Material did not comply with the Customer Material Specifications at the time of delivery to Supplier. The test results of the independent laboratory testing shall be final and binding upon Customer and Supplier, and the fees and expense of such laboratory testing and the out-of-pocket costs reasonably incurred by the Parties in the joint investigation shall be [* * *] In such event, except as set forth in Section 3.3(b)(vi), Supplier shall be released from its obligation with respect to the relevant Purchase Order and any associated penalties regarding a delayed delivery date for the corresponding Product under such Purchase Order. In the event that Customer delivers any such non-conforming Customer Materials, the Parties shall negotiate in good faith and agree upon a revised schedule for the supply of Products to Customer or its designee, which revised schedule shall be binding on Supplier in accordance with this Agreement.

 

  viii. Customer will provide Supplier with a Certificate of Analysis, a BSE/TSE statement and a Certificate of Compliance, data on the chemical and physical properties, toxicity, and handling, storing, and shipping information for any Customer Materials (MSDS or equivalent) and any other information that is necessary for the safe handling and transportation of Customer Materials. Customer shall update all of such information provided to Supplier after such updated information becomes available or known to Customer.

 

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Following receipt of Customer Materials from Customer and until the delivery of Product containing such Customer Materials, Supplier shall bear the risk of any loss of or damage to such Customer Materials resulting from [* * *]. Supplier shall retain exclusive control over Customer Materials and shall not transfer any portion of them to any Third Party without the prior written consent of Customer. Supplier shall identify Customer Materials at all times as Customer property and shall segregate same from other substances except as needed for the Manufacture of the Product and performance of the Services. Supplier shall not take any action inconsistent with Customer’s ownership interest in Customer Materials, including but not limited to, Supplier shall keep Customer Materials free and clear of any liens, encumbrances, or security interests resulting from the actions or omissions of Supplier or its Affiliates and, in the event of any such liens, encumbrances, or security interests, Supplier shall promptly remove same at its sole expense.

3.4 Production Capacity

Supplier agrees to provide to Customer all such facility and Manufacturing capacity to perform the Manufacturing Process as required to meet the Product requirements as described in the then-current Short Term Rolling Forecast (as defined below). Supplier agrees that it shall provide to Customer at least [* * *] prior written notice of any scheduled shutdown at any Facility that may impact Supplier’s ability to Manufacture and timely deliver the Product to Customer under this Agreement, [* * *].

For the avoidance of doubt, Supplier confirms that it has the capacity to deliver [* * *], or such adjusted amount as mutually agreed by the Parties. Batch size and annual capacity could be adjusted in the future by mutual agreement of the Parties based on results of ongoing scale up work.

3.5 Processing Changes

a) Supplier shall not make any material changes to the Manufacturing Process, starting materials, the Master Batch Record or Product Specifications for the Manufacture of the Product except in accordance with the Quality Agreement. For clarity, formatting changes in the documentation related to the Master Batch Record shall not be deemed a “material” change under this Section 3.5(a).

b) Customer (or Supplier, if changes are necessitated by Applicable Law) may request reasonable changes to the Manufacturing Process, the Master Batch Record, the Product Specifications, storage, testing or analytical methods or any starting materials for the Manufacture of the Product [* * *]. The notice of any

 

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such change by Customer shall comply with the cGMP documentation system and standard operating procedures maintained by Supplier at the Facilities. No material modifications or additions to the machinery, equipment and other fixed assets used by Supplier in the manufacture and supply of the Product to Customer shall be required without the consent of Supplier, which consent may be granted or withheld in Supplier’s sole discretion.

c) In the event of a change to the Manufacturing Process, the Master Batch Record or the Product Specifications, the relevant documents and related Exhibits to this Agreement will be revised accordingly.

d) All operational Master Batch Records and standard operating procedures utilized by Supplier are in the German language. Any requirement by Customer for translation of such records will be billed at cost.

3.6 Monitoring of Facilities

Customer shall have the right to have a representative present at each Facility to observe the performance of the Manufacturing Process by Supplier during normal business hours with at least [* * *] advance notice. Supplier shall have the right to reasonably restrict such observation access to prevent undue interference with Supplier’s business operations or compromise Supplier’s confidentiality obligations to Third Parties; provided, however, Customer’s observation access shall be absolute with regard to the Manufacturing Process for the Product. As such it is Supplier’s obligation to segregate Third Party documents and materials from Customer’s documents and materials and Customer will not be restricted from observing any part of Customer’s Manufacturing Process and related documentation.

3.7 Subcontracting

Supplier shall obtain Customer’s prior written approval, in accordance with the Quality Agreement, to use a subcontractor to perform services under this Agreement, such approval not to be unreasonably withheld, conditioned or delayed. Any and all such contractors shall perform such services in accordance with the terms and conditions of this Agreement, and Supplier shall remain liable for the performance of its obligations under this Agreement. Supplier may use the Third Party suppliers set forth in Schedule 4 of the Quality Agreement for such specific activities set forth opposite their respective name(s) in such Schedule. It is hereby agreed that Customer may authorize the use of additional Third Party suppliers under this Agreement in accordance with the Quality Agreement. Supplier agrees to use the Third Party suppliers identified, as applicable, in Schedule 4 of the Quality Agreement as the exclusive suppliers of starting materials for the Product Manufacturing Process and any deviation from said supply sources requires the prior written approval of Customer, in accordance with the Quality Agreement, such approval not to be unreasonably withheld, conditioned or delayed.

3.8 [* * *]

 

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3.9 [* * *]

3.10 Territory Expansion

At any time during the Term, Customer may provide written notice to Supplier of its intent to expand the Territory under this Agreement to include one or more additional countries or territories. Promptly following such notification, the Steering Committee (as defined below) shall meet to discuss any expansion of Supplier‘s Manufacturing capabilities necessitated by such expansion in accordance with clause (b) of Section 7.4 and the Parties shall execute an amendment that (a) amends the definition of “Territory” under clause jj) of Section 1.1 to include such additional countries or territories and (b) modifies the provisions of this Agreement as necessary in order to reflect the regulatory requirements of such additional countries or territories. For clarity, neither Party shall be obligated to amend the definition of Territory at any point during the Term.

3.11 Supply to Customer Licensees

In the event Customer delivers a written request to Supplier requesting that Supplier engage in negotiations with a Customer Licensee on the terms of a definitive agreement pursuant to which Supplier would Manufacture and supply Product to such Customer Licensee or a designee of a Customer Licensee, Supplier shall use commercially reasonable good faith efforts to negotiate and execute such agreement on substantially the same terms of this Agreement (including pricing, orders, forecasting, delivery, non-conformance, failure to supply, term and termination).

3.12 Alternative Supply

At any time during the Term, Customer may elect to qualify one or more alternative Manufacturing facilities (whether owned by a Third Party, Customer or by one of Customer’s Affiliates) to Manufacture the Products (each, a “Backup Supplier”). Customer shall be responsible for any costs associated with qualifying Backup Suppliers. [* * *]. Supplier shall use commercially reasonable efforts to cooperate with the qualification of any Backup Supplier, including (a) technology transfer of all Supplier Technology necessary or useful for the Manufacture of the Products; provided that, to the extent that such technology and know-how constitutes Confidential Information of Supplier, it shall be subject to the provisions of Article 12 and Customer’s designated alternative supplier shall be required to enter into a confidentiality agreement with Supplier containing substantially the same terms as Article 12 and (b) providing Customer and any Backup Supplier with consulting services related to the Manufacture, quality control and quality assurance of the Products. Any work related to technology transfer or qualification of a second supplier shall be considered as Services under this Agreement as described in Section 6.6. For the avoidance of doubt, Supplier will first prepare a customary Scope of Work describing the Services to be performed and the costs to Customer for the

 

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approval of Customer. No Services shall be commenced by Supplier unless (a) a customary Scope of Work relating to such Services has been agreed, executed and delivered by both Supplier and Customer; and (b) a Purchase Order has been issued by Customer and accepted by Supplier relating to such Services, which Purchase Order references the specific Scope of Work and this Agreement. In case of disagreement on the Scope of Work, the Parties will enter into good faith negotiations to reach a mutually satisfactory resolution.

Article 4 Forecasts

4.1 Short Term Rolling Forecasts

Commencing on the Effective Date, Customer shall provide to Supplier on a calendar quarterly basis on or before the last Business Day of each calendar quarter during the Term, a short term rolling forecast for the [* * *] period commencing on the first day of the following calendar month (each, a “Short Term Rolling Forecast”). Each Short Term Rolling Forecast shall set out Customer’s reasonable and genuine estimate of the quantities of the Product to be ordered by Customer and to be delivered by Supplier under this Agreement for the following [* * *].

(A): In case of an order volume equal or less than [* * *]: The first [* * *] of each short term rolling forecast shall be binding firm purchase orders by Customer (each a “Purchase Order”) and the last [* * *] of each short term rolling forecast shall be non-binding, good faith estimates. Customer shall provide Supplier with one or more Purchase Order(s) for Product consistent with the first [* * *] binding portion of each Short Term Rolling Forecast, at least [* * *] in advance of the scheduled delivery dates provided in such Purchase Order(s).

(B): In case of order volume larger than [* * *]: The first [* * *] of each short term rolling forecast shall be binding firm purchase orders by Customer (each a “Purchase Order”) and the last [* * *] of each short term rolling forecast shall be non-binding, good faith estimates. Customer shall provide Supplier with one or more Purchase Order(s) for Product consistent with the first [* * *] binding portion of each Short Term Rolling Forecast, at least [* * *] in advance of the scheduled delivery dates provided in such Purchase Order(s).

4.2 Long Term Forecasts

Within [* * *] after the Effective Date, Customer shall provide to Supplier a long term forecast of the estimated quantities of the Product required by Customer from Supplier during the following [* * *] (the “Long Term Forecast”). Customer shall during the Term provide to Supplier together with the Short Term Rolling Forecast, on a calendar quarter basis, updates of such Long Term Forecasts for the following [* * *] (or the balance of the Term, if shorter). For the avoidance of doubt, the first [* * *] of each Long Term Forecast shall constitute the Short Term Rolling Forecast of which the first [* * *], or the first [* * *], as the case may be due to the order volume, shall be binding and the remainder of the Short Term Rolling Forecast and Long Term Forecast shall be non-binding.

 

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Article 5 Testing and Samples

5.1 Release Testing

a) Supplier shall perform release testing of all batches of Product prior to delivery to Customer in accordance with the Product Specifications and the Master Batch Record, to determine whether such batches of Product meet the requirements set out in the Product Specifications. Customer shall be responsible for the final release of Product prior to shipping and further processing.

b) Supplier shall ensure that:

(i) its quality assurance department approves each batch of Product for release promptly following successful completion of release testing done by its quality control department (in this section “promptly” means [* * *]); and

(ii) its quality assurance department does not release any batch of Product that does not meet the requirements set out in the Product Specifications without prior written consent of Customer.

c) Supplier shall prepare a Certificate of Analysis and Certificate of Conformance, setting out the results of the release testing and which shall be included with each batch of Product shipped to Customer.

d) Customer shall have the right to oversee the activities set forth in this Section 5.1 in accordance with the Quality Agreement.

5.2 Additional Release Testing

Customer reserves the right to conduct, in its sole discretion and at its expense, additional analytical testing on the Product.

5.3 Retention Samples

Supplier shall retain and store in accordance with cGMP Requirements, Applicable Law and Supplier’s internal quality standard operating procedures, retention samples of each batch of Product Manufactured under this Agreement.

 

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5.4 Stability Testing

If requested by Customer, Supplier shall be responsible for performing annual stability testing of the Product and shall ensure that all such testing is performed in compliance with the applicable ICH regulations (e.g. follow-up stability studies of commercially used products). Costs associated with annual stability testing will be quoted separately from commercial unit pricing under a separate Scope of Work or Purchase Order.

5.5 Reference Standards

If requested by Customer, Supplier shall be responsible for qualification and requalification of reference standards. Costs associated with qualification and requalification of reference standards will be quoted separately from commercial unit pricing under a separate Scope of Work or Purchase Order.

5.6 Preparation of Process Qualification

All costs associated with the preparation of process qualification (as but not limited to analytical method validation, process optimization, PAR studies, preparation of quality risk assessments, preparation of validation protocols and report per stage, preparation of validation master protocol and report, preparation of process performance assessment) will be handled separately from the commercial unit pricing under separate Scopes of Work or Purchase Orders. Until otherwise agreed, all pricing for process qualification services to be similar to current framework between Supplier and Customer.

Article 6 Purchase Orders

6.1 Placement of Purchase Orders

Consistent with the Short Term Rolling Forecast as set forth in Section 4.1, Customer shall place with Supplier Purchase Orders, stating Customer’s required delivery data, anticipated delivery schedule and the anticipated Fees, in accordance with the Fee Schedule set out in Exhibit C, for each delivery of Product to be made under this Agreement. Purchase Orders must have at least [* * *] of lead time before anticipated delivery to allow sufficient time for Supplier’s planning, raw material purchases, production and release. Each Purchase Order shall constitute a firm, binding order, upon Supplier’s acceptance thereof in accordance with Section 6.2.

6.2 Acceptance of Orders

Supplier may reject any Purchase Order placed by Customer that is not placed in accordance with this Agreement by giving written notice (e-mail shall constitute written notice) to Customer within a reasonable time, not to exceed [* * *] after receipt of each Purchase Order, setting out the reason for such rejection. In the event Supplier does not respond within [* * *], such Purchase Order shall be considered accepted by

 

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Supplier. In the event the ordered amount of Product under the Purchase Order differs more than [* * *] from the firm portion of the most recent Short Term Rolling Forecast or more than [* * *] from the firm portion of the most recent Short Term Rolling Forecast, Supplier shall [* * *].

In the event the terms and conditions of this Agreement conflict with the terms and conditions of the Purchase Order, the terms and conditions of this Agreement shall take precedence unless otherwise agreed upon by the Parties.

6.3 Delays

If, after acceptance of a Purchase Order, Supplier is unable for any reason to supply quantities of the Product in accordance with the Purchase Orders placed by Customer under Section 6.1 on the timelines set forth therein, Supplier shall inform Customer within [* * *] of becoming aware of its inability to supply the Product of the expected duration of such inability and shall keep Customer informed on a timely basis of developments during any such period of time. The Parties shall cooperate to expedite the scheduling of the resumption of Manufacture of the Product by Supplier when any such inability has been alleviated. In the event of any delay in delivery of Product from the delivery date on the applicable Purchase Order for such Product, if such delay is: [* * *].

6.4 Cancellation of Purchase Orders

In the event that Customer cancels all or part of a Purchase Order already accepted by Supplier, Supplier will use best efforts to reallocate capacity and mitigate any resultant costs of such cancellation. Except as expressly set forth in Section 3.4, Section 6.2, Section 6.3 and Section 6.5, the following will be charged to Customer:

[* * *]

6.5 Material Failure of Supply

If Supplier, for any reason, fails to supply at least [* * *] of the units of Product ordered by Customer pursuant to valid Purchase Orders during any period of [* * *] or longer beginning on the requested delivery date, in addition to and without limiting any other remedies available to Customer, [* * *].

6.6 Services

From time-to-time during the Term, Customer may request that Supplier perform Services for Customer relating to the Product, for which Customer shall pay reasonable compensation to Supplier. In the event that Supplier is willing to perform any such Services requested by Customer, Supplier will first prepare a scope of work describing the Services to be performed and the costs to Customer for the approval of Customer (each

 

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a “Scope of Work”). No Services shall be commenced by Supplier unless (a) a Scope of Work relating to such Services has been agreed, executed and delivered by both Supplier and Customer; and (b) a Purchase Order has been issued by Customer and accepted by Supplier relating to such Services which Purchase Order references the specific Scope of Work and this Agreement. Customer shall have the right to terminate any Scope of Work and corresponding Purchase Order for Services at any time on reasonable advance written notice to Supplier (without terminating this Agreement), in which case Customer shall be responsible for:

[* * *]

Article 7 Shipment of Product

7.1 Storage of Product

Supplier shall ensure that all Product held in storage is stored in accordance with the Product Specifications until shipped to Customer under this Agreement and that all storage areas meet cGMP Requirements. [* * *]

Should any Product, during storage, change chemical composition, then Supplier and Customer will agree upon a plan for disposition of the Product, including possible disposal, reworking or using the Product “as is.” For clarity, Supplier shall not commence any action set forth in the preceding sentence until such a plan has been agreed by Customer. The cost of reworking the Product shall be borne by [* * *].

The cost of storage, monitoring (including any on-going analytical analysis), and insurance before shipment shall be borne by [* * *].

7.2 Release and Shipment of Product

a) Supplier shall notify Customer by facsimile or electronic transmission of each batch of Product Manufactured by it under this Agreement in accordance with this Article 7 as soon as reasonably possible, and no later than [* * *], after Supplier’s quality assurance department approves the batch for release following successful completion of the release testing procedures.

b) Supplier shall pack and label shipping boxes and ship all orders of Product in a prompt and timely manner and in accordance with international transport guidelines and regulations, the Product Specifications, and Customer’s reasonable written instructions including, as applicable, for such shipment and the terms of this Agreement.

c) Supplier shall not sell or otherwise dispose of any Product except in accordance with the terms and conditions of this Agreement.

d) The Products will be shipped [* * *]. All freight, applicable taxes (excluding any and all income taxes, employment taxes and the like incurred by Supplier), duties, express and delivery charges shall be for

 

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Customer’s account and shall not be subject to discount. Delivery shall be deemed completed and risk of loss or damage of the Products shall pass to Customer upon [* * *]. Title to the Products shall pass to Customer upon [* * *].

7.3 Documentation

Supplier shall include with each shipment of Product shipped to Customer under Section 7.2:

a) commercially appropriate documentation;

b) a Certificate of Analysis and Certificate of Compliance in English for each batch of Product included in the shipment, in the forms set out in Exhibit D; and

c) a copy of any deviation or investigation reports concerning each batch of Product shipped (to be sent separately from shipment as part of the batch record documentation).

7.4 Steering Committee

The Parties agree to form a steering committee (the “Steering Committee”) to oversee their interactions under this Agreement as provided herein. Each Party shall name a mutually agreed upon equal number of representatives to the Steering Committee, which shall meet either in person or remotely (as mutually agreed) at least [* * *], or as otherwise mutually agreed by the Parties. The primary function of the Steering Committee is to ensure the ongoing communication between the Parties and discuss and resolve any issues arising under this Agreement. The Steering Committee 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 Supplier’s capacity and short-term and long-term planning for clinical and commercial supply of the Product, including anticipating any capacity shortfalls and discussing the cost allocation of investments required to increase capacity or improve efficiencies; (c) [* * *]; (d) reviewing and discussing draft Scopes of Work; (e) discussing the cost allocation, if any, of extraordinary costs incurred by Supplier in connection with the Manufacture of Products or provision of Services; and (f) establishing resource priorities and resolving resource conflicts.

Article 8 Acceptance of Shipments

8.1 Acceptance of Shipments

Customer or its designees shall, within a period of [* * *] after the date of physical receipt of any shipment of Product from Supplier, inspect the Product for any shortages or any defects or deviations of the Product

 

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Specifications (hereinafter “Out Of Specification”) that would be apparent from visual inspections of the Product. In the event that Customer is of the opinion that the Product is Out Of Specification at the time of delivery, Customer shall, within [* * *] after the date of physical receipt of Product, provide Supplier with a written notice to reject the Product (a “Notice of Rejection”), which shall include a description of the grounds for rejection and copies of test reports and testing methodology conducted on the Product, if any. However, with respect to any Out Of Specification Product which would not be apparent from a reasonable visual inspection on delivery, including in the case of any hidden defects, such Notice of Rejection shall be provided to Supplier not later than [* * *].

The failure of Customer or its designees to notify Supplier of any Out Of Specification Product in the manner set forth herein above shall constitute confirmation of the acceptance thereof.

8.2 Dispute of Rejected Product

Supplier may, at its option, within [* * *] of receipt of any Notice of Rejection under Section 8.1, challenge the Notice of Rejection by delivering written notice thereof to Customer. In the event that Supplier challenges the Notice of Rejection, Customer and Supplier shall conduct a joint investigation. If Supplier and Customer are unable to resolve the issue of non-compliance then a sample of the Product will be submitted to an independent laboratory reasonably acceptable to both Parties for testing against the Product Specifications, and determination whether or not the non-compliance may be caused by a fault on the part of Supplier. The test results of the independent laboratory testing shall be final and binding upon Customer and Supplier, and the fees and expense of such laboratory testing shall be borne entirely by the Party against whom such laboratory’s findings are made.

8.3 Remedies

a) Except as set forth in this Agreement, in the event of a Product shortage[* * *].

b) In the event that Customer issues a timely Notice of Rejection in respect to any Out Of Specification Product:

[* * *]

The Party in possession of any rejected Product which does not comply with the Product Specifications or cGMP Requirements shall destroy, in accordance with all Applicable Law and in a manner to which Customer has given its prior written approval, all rejected Product in its possession, but only after the Parties have followed the procedures specified under Sections 8.2 and 8.3. No rejected Product shall be sold, reprocessed, salvaged, reclaimed or otherwise reused in any manner by Supplier or Customer without the prior written agreement of the Parties with the exception of use testing and analysis by Supplier and/or Customer in the investigating the cause of Product rejection. Representatives of the Party not performing the destruction shall be permitted to witness the destruction of the rejected Product under this section.

 

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Article 9 Fees

9.1 Fees

a) Customer shall pay to Supplier, in respect of each Purchase Order placed by Customer, the applicable Fees for the supply of the Product in bulk quantities under this Agreement, in accordance with the terms of this Agreement.

b) Except as otherwise expressly provided in this Agreement, the Fees specified in each Purchase Order accepted by Supplier shall be full compensation for all Manufacturing and characterization activities and Materials in respect thereof. Customer shall make all requests for processing changes to be performed under this Agreement in writing under Section 3.5 and Supplier shall provide Customer a cost estimate for such work.

9.2 Adjustments to Fees

During the Term of this Agreement, either Party may request an increase or decrease of the Fees specified in Exhibit C no more than [* * *] and such change in Fees shall take effect on [* * *] for which such Fee change is requested. Such change in Fees may be requested due to any of the following events:

[* * *] or

(iii) any other cost adjustments mutually agreed to by the Parties via the Steering Committee.

Supplier will make available to Customer records that substantiate any adjustment to Fees for a Product proposed by Supplier and Supplier will provide Customer with any Customer records that provide evidence for a decrease in Fees pursuant to clause (i); such records to be considered Supplier‘s Confidential Information hereunder.

The Party proposing an adjustment in the Fees will notify the other Party of the adjustment by delivering to the other Party at least [* * *] prior to the effective date of the Fees adjustment, written notice of the proposed adjustment. Said written notice shall specify the effective date as [* * *] in which the Fee adjustment becomes effective and the amounts for the adjusted Fees. On receipt of such request, the Parties shall seek in good faith to agree to an adjustment of the Fees, based on such reasonable and objective evidence. Each Party shall use its commercially reasonable efforts to mitigate any cost increase. The Fees for any Product ordered by Customer prior to the effective date of the Fees adjustment shall be the Fees existing on the date Customer placed the Purchase Order, as set out in the Purchase Order.

 

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9.3 Taxes

The Fees shall be exclusive of any taxes, customs duties, levies and other charges applicable to the supply of the Product under this Agreement (“Taxes”). Customer shall pay any Taxes and reimburse Supplier for any Taxes for which Customer is responsible but which have been paid by Supplier. Subject to compliance with laws, the Parties shall reasonably cooperate to eliminate or minimize the amount of any such Taxes imposed on the transactions contemplated in this Agreement. For clarity, Customer shall not be liable for any taxes incurred by the Supplier including, without limitation, income taxes, employment taxes, use taxes, and the like incurred by Supplier, or for any penalties or interest related to the failure of Supplier to collect sales, use, VAT or similar taxes.

Article 10 Invoicing and Payment

10.1 Issuance of Invoices

Supplier shall, in accordance with Section 10.2, invoice Customer for each Purchase Order accepted under Section 6.2 as follows:

10.2 Invoice Contents

All invoices issued by Supplier under Section 10.1 shall show:

a) the actual quantity of Product shipped;

b) the lot number of each batch of Product shipped;

c) the Fees for the quantity of Product shipped, based on the Fees for the Product set out in the applicable Purchase Order; and

d) the Purchase Order number placed by Customer for the Product shipped.

If Customer disputes for any reason with the amount of any invoice submitted by Supplier, Customer shall notify Supplier of such dispute within [* * *] after the date of the invoice, and the Parties shall promptly attempt to resolve the dispute. If Customer does not notify Supplier of any such dispute within such [* * *] period, such invoice will be final and binding on Customer and Supplier, subject to the correction of mathematical errors.

 

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10.3 Delay of Shipment

If Customer delays shipment of Product released by Supplier in accordance with Section 7.2, Supplier may issue its invoice under Section 10.1 on or after the release, with reference to the Product released under Section 10.2.

10.4 Payment of Invoices

Each invoice provided by Supplier to Customer under Section 10.1, to the extent accurate, shall be paid by Customer to Supplier within [* * *] after the date of the invoice to the extent that Customer does not reasonably dispute that portion of the invoice in good faith.

All payments will be made in U.S. Dollars by SWIFT bank transfer directly to the Supplier account as specified in the respective Purchase Orders.

Article 11 Intellectual Property

11.1 Title

a) The Parties agree that, as between Customer and Supplier, each Party owns its respective Confidential Information, Customer owns all Rights in and to the Customer Technology, the Product(s) and its Chemical Synthesis and Supplier owns all Rights in and to Supplier Technology.

b) Supplier shall not knowingly use in the Manufacturing Process any Intellectual Property protected by any patent or patent application licensed to Supplier by any Third Party, except with the prior written consent of Customer.

11.2 No Grant of Rights

Except as otherwise provided herein, neither Party hereto shall be deemed by this Agreement to have been granted any Rights of the other Party.

 

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11.3 Grant of License by Customer

During the Term, Customer hereby grants to Supplier a paid-up, royalty-free, non-exclusive license, without the right to sublicense, to Customer’s Confidential Information and the Customer Technology reasonably necessary to Manufacture and supply to Customer the Product hereunder, but only for such purposes. The Parties agree that the license grant contained in this Section 11.3 is personal to Supplier only and shall be exercised by Supplier only, and Supplier agrees to make use of Customer’s Confidential Information and the Customer Technology only in accordance with this license and not to disclose any such Confidential Information or Customer Technology to any Third Party, except that nothing herein shall prevent Supplier from disclosing to its permitted subcontractors under confidentiality obligations at least as strict as those that bind Supplier under this Agreement, as necessary to perform Supplier’s obligations hereunder.

11.4 Ownership of Inventions

With respect to any ideas, innovations, Improvements or inventions (whether patentable or non-patentable) developed by Supplier during the Term of this Agreement and [* * *], the Parties agree that, as between Customer and Supplier, Customer shall own all Rights to such Inventions and may obtain patent, copyright, and other proprietary protection respecting such Inventions. Supplier agrees to promptly disclose any Inventions to Customer. Supplier agrees to assign (and cause its employees or permitted subcontractors to assign), and does hereby assign, any and all rights, title and interests of Supplier in, to or under any Inventions to Customer. [* * *]

11.5 Patents to Inventions

With respect to all Intellectual Property created or developed under this Agreement, [* * *].

11.6 No Use of Trademarks

Nothing contained herein shall give either Party any right to use any trademark of the other Party. All trademarks and service marks adopted by Customer to identify the Product or a Customer Product are and shall remain the property of Customer.

11.7 [†]

 

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Article 12 Confidentiality & Publicity

12.1 Obligation of Confidentiality

It is contemplated that in the course of the performance of this Agreement each Party may, from time to time, disclose Confidential Information to the other. Each Party agrees:

a) to keep and use in strict confidence all Confidential Information of the other Party that each Party acquires, sees, or is informed of, as a direct or indirect consequence of this Agreement and to not, without the prior written consent of the other Party, disclose any such Confidential Information or recollections thereof to any person or entity other than its corporate counsel, employees and contractors who are under an obligation of confidentiality on terms substantially similar to those set out in this Agreement, who have been informed of the confidential nature of the Confidential Information and who reasonably require such information in the performance of their duties under this Agreement;

b) not to use, copy, duplicate, reproduce, translate or adapt, either directly or indirectly, any of the Confidential Information of the other Party or any recollections thereof for any purpose other than the performance of the Services and the Manufacture and characterization of the Product under this Agreement, without the other Party’s prior written approval;

c) that all copies, duplicates, reproductions, translations or adaptations of any Confidential Information of the other Party permitted to be made hereunder shall be clearly labelled as confidential; and

d) to take all reasonable steps to prevent material in its possession that contains or refers to Confidential Information of the other Party from being discovered, used or copied by Third Parties and to use reasonable steps to protect and safeguard all Confidential Information of the other Party in its possession from all loss, theft or destruction.

Upon the termination of this Agreement, each Party shall promptly destroy or return all Confidential Information to the disclosing Party in accordance with Section 18.4.

12.2 Disclosure with Consent

A Party receiving Confidential Information may, with the written consent of the disclosing Party, disclose such Confidential Information to entities or persons other than its corporate counsel, employees and contractors, on such terms and conditions as the disclosing Party may specify.

12.3 Publicity

During the Term, the Parties agree that no press release, public announcement or publication regarding this Agreement or the relationship of the Parties (except to the extent that it may be legally required), shall be made unless mutually agreed to in writing prior to the release or dissemination of any such press release, public announcement or publication.

 

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12.4 Disclosure Required by Law

No provision of this Agreement shall be construed so as to preclude such disclosure of Confidential Information of the other Party as may be inherent in or reasonably necessary to the securing from any governmental agency of any necessary regulatory approval or license. To the extent required by legal process, subpoena, warrant, or court order, either Party may disclose Confidential Information only to the extent required to comply with said legal proceeding, provided that the Party obligated to make such disclosure shall, when lawfully permissible, provide reasonable prior notice the other Party so as to allow the other Party to take steps to oppose or limit the required disclosure.

12.5 Employee Confidentiality and Invention Assignment.

(a) Supplier acknowledges and agrees that, with respect to any past or current employee, staff, contractor, subcontractor or other agent of Supplier or its Affiliates who has conducted services or activities related to the development, manufacture or supply of Products for or to Customer (collectively, the “Supplier Employees”), Supplier or its Affiliate has entered into a binding written arrangement(s) with each such Supplier Employee that requires: (i) that such Supplier Employee will, at a minimum, keep the Confidential Information of Customer confidential and only use such Confidential Information to conduct permitted activities for Customer under Supplier’s employment; and (ii) that such Supplier Employee assign to Supplier all of its right, title and interest in and to any inventions (including, without limitation, know-how, improvements, ideas, information, materials and processes) and all intellectual property rights therein that such Supplier Employee, alone or jointly with others, conceives, develops or reduces to practice during their period of employment or work with Supplier or its Affiliate.

(b) Supplier further covenants and agrees that, (i) with respect to any future Supplier Employee, Supplier or its Affiliate shall enter into a binding written arrangement with such Supplier Employee as set forth in Section 12.5(a) and (ii) with respect to any binding written arrangement referred to in this Section 12.5(b) or Section 12.5(a), Supplier shall enforce, to the fullest extent permitted under Applicable Law, the terms and provisions of such arrangement.

12.6 Duration of Obligation

Unless otherwise agreed by the Parties in writing, the obligations of the Parties relating to Confidential Information set out in this Article 12 shall survive the termination of this Agreement for a period of [* * *].

 

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Article 13 Representations, Warranties and Covenants

13.1 Supplier’s Representations, Warranties and Covenants

Supplier hereby represents, warrants and covenants to Customer as follows:

a) Supplier has been duly organized and is validly subsisting and in good standing in its jurisdiction of organization and has the power to carry on the business as now being conducted by it;

b) the execution, delivery and performance of this Agreement by Supplier have been duly authorized by all requisite corporate action and do not require any shareholder action or approval;

c) Supplier has the right and authority to enter into this Agreement and perform its obligations hereunder, and this Agreement is a legal and valid obligation binding upon Supplier and enforceable in accordance with its terms;

d) Supplier has not made and will not make any commitments to Third Parties inconsistent with or in derogation of Supplier’s obligations under this Agreement and Supplier is to its knowledge not subject to any obligations that would prevent it from entering into or carrying out its obligations under this Agreement, and Supplier’s compliance with the terms and provisions hereof does not and will not conflict with or result in a breach of any of the terms and provisions of or constitute a default under (i) a loan agreement, guaranty, financing agreement, agreement affecting a Product or other agreement or instrument binding or affecting it or its property; (ii) the provisions of its charter or operative documents or by-laws; or (iii) any order, writ, injunction or decree of any court or governmental authority entered against it or by which any of its property is bound;

e) Supplier shall comply with all Applicable Law relating to its activities under this Agreement;

f) all Product delivered to Customer under this Agreement will have been Manufactured, stored and shipped in a competent fashion in accordance with the Master Batch Record, the Product Specifications, this Agreement, the Quality Agreement, Applicable Law and cGMP Requirements by qualified personnel and, to Supplier’s knowledge, will be free from defects;

g) the Facilities, including equipment, systems, utilities and services, complies with cGMP Requirements for the Manufacture of the Product under this Agreement;

h) the Facilities and Supplier’s procedures and processes in the Facilities are in compliance with Applicable Law, including applicable environmental, health and safety requirements, for the Manufacture of the Product under this Agreement;

i) Supplier does not, at any time from and after the Effective Date, retain or use the services of (i) any person debarred under 21 U.S.C. § 335a or (ii) any person who has been convicted of a crime as defined under the FD&C Act, in each case in any capacity associated with or related to the Manufacture or supply of Products or any service rendered to Customer under this Agreement or the Quality Agreement;

j) all Product supplied by Supplier under this Agreement shall be delivered by it free and clear of any security interests, liens, claims, pledges or encumbrances of any kind or nature except for such as are created by Customer; and

k) all records and reports required to be maintained by Supplier under cGMP Requirements shall be accurate and complete in all material respects.

 

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In no event shall Customer seek to recover a refund for, or replacement to, an Out of Specification Product due to Supplier’s breach of Sections 13.1 (f), (g) or (h) except pursuant to Article 8.

13.2 Customer’s Representations, Warranties and Covenants

Customer hereby represents, warrants and covenants to Supplier as follows:

a) Customer has been duly organized and is validly subsisting and in good standing in its jurisdiction of organization and has the power to carry on the business as now being conducted by it;

b) the execution, delivery and performance of this Agreement by Customer have been duly authorized by all requisite corporate action and do not require any shareholder action or approval;

c) Customer has the right and authority to enter into this Agreement and perform its obligations hereunder, and this Agreement is a legal and valid obligation binding upon Customer and enforceable in accordance with its terms;

d) Customer has not made and will not make any commitments to Third Parties inconsistent with or in derogation of Customer’s obligations under this Agreement and Customer is not subject to any obligations that would prevent it from entering into or carrying out its obligations under this Agreement, and Customer’s compliance with the terms and provisions hereof does not and will not conflict with or result in a breach of any of the terms and provisions of or constitute a default under (i) a loan agreement, guaranty, financing agreement, agreement affecting a Product or other agreement or instrument binding or affecting it or its property; (ii) the provisions of its charter or operative documents or by-laws; or (iii) any order, writ, injunction or decree of any court or governmental authority entered against it or by which any of its property is bound;

e) Customer shall comply with all Applicable Law relating to its activities under this Agreement; and

f) to Customer’s knowledge, [* * *].

13.3 No Other Warranty

THE WARRANTIES SET OUT IN SECTIONS 13.1 AND 13.2 ARE THE SOLE WARRANTIES MADE BY EITHER PARTY TO THE OTHER AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HEREBY DISCLAIM ANY AND ALL OTHER WARRANTIES, REPRESENTATIONS OR GUARANTEES OF ANY KIND WHATSOEVER, EITHER EXPRESS OR IMPLIED, REGARDING THE PRODUCT OR ANY OTHER MATERIALS OR SERVICES TO BE SUPPLIED UNDER THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

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13.4 No Consequential Damages and Limitation of Liability

a) [* * *], IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, CONSEQUENTIAL, PUNITIVE, INCIDENTAL OR INDIRECT DAMAGES, OR LOST PROFITS, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY. THIS LIMITATION WILL APPLY EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.

b) EXCEPT AS SET FORTH BELOW IN THIS SECTION 13.4(b), IN NO EVENT WILL SUPPLIER’S LIABILITY, [* * *], BE GREATER THAN, PER CLAIM OR SERIES OF CLAIMS ARISING FROM THE SAME CAUSE OF ACTION, [* * *].

EXCEPT AS SET FORTH BELOW IN THIS SECTION 13.4(b), [* * *], AS APPLICABLE, IN NO EVENT SHALL A PARTY’S LIABILITY, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, BE GREATER THAN, PER CLAIM OR SERIES OF CLAIMS ARISING FROM THE SAME CAUSE OF ACTION, [* * *].

EXCEPT AS SET FORTH BELOW IN THIS SECTION 13.4(b), WITH RESPECT [* * *], IN NO EVENT SHALL A PARTY’S LIABILITY BE GREATER THAN, PER CLAIM OR SERIES OF CLAIMS ARISING FROM THE SAME CAUSE OF ACTION, [* * *].

NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION 13.4(b), WITH RESPECT TO [* * *] IN NO EVENT SHALL SUPPLIER’S LIABILITY, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, BE GREATER THAN, PER CLAIM OR SERIES OF CLAIMS ARISING FROM THE SAME CAUSE OF ACTION, [* * *].

[* * *]

Article 14 Indemnification

14.1 Indemnification of Supplier

Customer shall indemnify, defend and hold harmless Supplier and its officers, directors, agents, servants and employees against any and all actions, claims, demands, proceedings, suits, losses, damages, costs and expenses (including reasonable legal fees) of Third Parties (in this Article 14, “Claims”) (including Claims for personal injury or death) to the extent such Claims result from or arise out of (a) any product liability claim directly related to Customer’s commercial use, sale or distribution of Products or (b) Customer’s [* * *] acts or omissions or [* * *], except, in each case of clause (a) and (b), to the extent Supplier has an obligation to indemnify Customer pursuant to Section 14.2 or 14.3.

14.2 Indemnification of Customer

Supplier shall indemnify, defend and hold harmless Customer and its Affiliates and Customer Licensees, and their respective officers, directors, agents, servants, employees and consultants against any and all Claims (including Claims for personal injury or death) to the extent such Claims result from or arise out of (a) any [* * *] acts or omissions or [* * *] by Supplier or its officers, directors, agents, servants,

 

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employees or contractors (collectively, the “Supplier Representatives”) [* * *] or (b) any [* * *] or omissions or [* * *] by Supplier or the Supplier Representatives, except, in each case of clause (a) and (b), to the extent Customer has an obligation to indemnify Supplier pursuant to Sections 14.1 or 14.3.

14.3 Intellectual Property Indemnity

Customer (an “Indemnifier”) shall indemnify, defend and hold harmless Supplier and the Supplier Representatives (each, an “Indemnified Party”) from any and all Claims of any Third Party that any Intellectual Property (including, without limitation, Customer Materials, Product Information, Product Specifications, Customer Technology or Tufts Technology), provided by Customer to Supplier hereunder, infringes a Third Party’s Intellectual Property Rights or otherwise violates a Third Party’s rights. Supplier (an “Indemnifier”) indemnifies Customer and its Affiliates and Customer Licensees, and their respective officers, directors, agents, servants, employees and consultants (each, an “Indemnified Party”) from any and all Claims of any Third Party that the Intellectual Property (other than the Intellectual Property Customer has provided to Supplier under this Agreement) that Supplier elects to use in conducting the activities set out in this Agreement, infringes such Third Party’s Intellectual Property Rights or otherwise violates a Third Party’s rights.

The Indemnifier’s obligation to indemnify the Indemnified Party shall apply only upon the following terms and conditions:

a) the obligation shall only pertain to the Intellectual Property the Indemnifier, its Affiliates, officers, directors, agents, servants, employees or consultants elect to use in conducting the activities set out in this Agreement, and not to any Improvements or additions made by anyone other than the Indemnifier, whether with or without permission; and

b) [* * *]

14.4 Indemnification Procedure

The indemnities contained in this Article 14 shall be conditional on compliance with the terms and conditions set out in this Section 14.4. The indemnifying Party shall have the option to defend, contest, or otherwise protect against any such Claims at its own cost and expense provided that the party seeking indemnification (the “Indemnitee”) regarding any such Claims gives written notice to the indemnifying Party promptly after receiving notice of said Claims. If the indemnifying Party chooses to defend Claims, the Indemnitee may, but will not be obligated to, participate at its own expense in a defense thereof by counsel of its own choosing, but the indemnifying Party shall be entitled to control the defense unless the Indemnitee has relieved the indemnifying Party from liability with respect to the particular matter. If the indemnifying Party fails to timely defend, contest, or otherwise protect against any such Claims, the Indemnitee may defend, contest, or otherwise protect against the same, and make any reasonable compromise or settlement thereof and recover the entire costs thereof from the indemnifying Party, including reasonable legal fees and costs and disbursements, and all amounts paid as a result of such

 

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Claims or the compromise or settlement thereof; provided, however, that if the indemnifying Party undertakes the timely defense of such matter, the Indemnitee shall not be entitled to recover from the indemnifying Party for its costs incurred in the defense thereof. The Indemnitee shall cooperate and provide such assistance as the indemnifying Party may reasonably request in connection with the defense of the matter subject to indemnification.

Article 15 Insurance

15.1 Insurance Coverage

Customer and Supplier each represent that they are sufficiently insured against any liability arising under this Agreement. Further, Supplier shall at a minimum retain [* * *].

15.2 Evidence of Insurance

Each of Customer and Supplier shall, upon request by the other, provide the other Party with a copy of all insurance policies maintained under this Article 15 relating to the Manufacture of the Product in bulk quantities and the facilities therefor and shall notify the other Party in writing at least 30 days prior to the cancellation of or any material change to such insurance policies. Each Party may request that the other Party procure and maintain such additional insurance coverage relating to the Manufacture of the Product and the facilities therefore as may be reasonably necessary in respect of the Parties’ respective obligations under this Agreement.

Article 16 Legal and Regulatory

16.1 Compliance with Laws

a) Each Party shall, in connection with its obligations, rights and duties under this Agreement and in Manufacturing, handling, storage, loading, shipping, using, commercializing, reselling and distributing the Product:

(i) comply with all Applicable Law or other requirements applicable to such Party’s business; and

(ii) subject to Subsection b) below, obtain and maintain in full force and effect all applicable licenses, permits, certificates, authorizations or approvals from local governmental authorities necessary to conduct its business and the activities contemplated under this Agreement. Such licences or certificates are to be provided to the other Party on request.

b) Customer shall be responsible for obtaining all necessary import and/or export licenses or permits and for the payment of all import and/or export fees, taxes or duties in connection with the purchase and/or delivery of the Product under this Agreement. Supplier shall reasonably cooperate with Customer in connection with obtaining necessary import and/or export licenses or permits.

 

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16.2 Maintenance of Records

Supplier shall maintain adequate books and records and retention samples consistent with cGMP Requirements and any other Applicable Law and requirements of applicable governmental or regulatory authorities, in respect of test records, samples and associated support data for all batches of Product Manufactured by Supplier sufficient to substantiate and verify Supplier’s duties and obligations under this Agreement for [* * *] from the expiration date of the respective Product batch.

16.3 Notice of Reports

Supplier shall provide to Customer within [* * *] of receipt by Supplier copies of all Product-specific portions of any reports of any governmental or regulatory authority including, without limitation, any Facility-specific reports solely to the extent applicable to the Product or Manufacturing Process, FDA Form 483 observations, FDA warning letters or other correspondence from the FDA or equivalent correspondence from another Applicable Regulatory Authority; provided that Supplier may redact any information from such reports subject to confidentiality obligations and not related to the Product.

16.4 Drug Master Files

Supplier will routinely update and keep current all information pertinent to maintain the Drug Master Files relating to the Manufacture of the Product at the production site of Supplier. Supplier will fully support and reasonably assist Customer with its filing of any application with respect to the Product with any Applicable Regulatory Authority at Customer’s expense.

16.5 Compliance with Regulatory Standards

Supplier shall be responsible for Manufacturing the Product in compliance with Applicable Law, cGMP Requirements and the standards of any other applicable governmental or regulatory authority. Each Party will provide reasonable assistance to the other, at no charge, if necessary to respond to audits, inspections, inquiries, or requests of any Applicable Regulatory Authority. Supplier shall advise Customer immediately if Supplier receives notice of an impending inspection related to a Product or if an authorized agent of any Applicable Regulatory Authority or other governmental agency provides advance notice of any investigation, inspection or visit to a Facility. In such event, Supplier shall permit, to the extent permitted by Applicable Law, Customer or its representatives to be present during such visit, at Customer’s expense. Upon Customer’s request, Supplier shall provide Customer with a copy of any report issued by such Regulatory Authority following such visit.

16.6 Inspection

Supplier shall allow monitoring of the Facilities as set forth in Section 3.6 and inspections or audits as provided for in the Quality Agreement. Supplier shall make available to Customer all relevant records and reports and Customer shall have the right to copy all Product related records and reports. The frequency of such audits as well as the response time with respect to audit findings shall be governed by the Quality Agreement.

 

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Article 17 Recalls

17.1 Safety

Supplier shall provide Customer with reasonable co-operation to help Customer investigate adverse events or product complaints involving or related to the Product. The cost and expense of any testing undertaken by Supplier at Customer’s request shall be borne by [* * *].

17.2 Recalls

If either Party has grounds to recommend a Recall or otherwise receives a notification or information which might result in a Recall, the Party recommending such Recall or receiving such notification or information shall immediately notify the other Party in writing. Subject to Applicable Law, Customer and its designees shall have the sole responsibility to implement any Recall of the Product or any intermediate or finished product containing the Product and the sole right to make all final decisions regarding any such Recall. Supplier shall reasonably cooperate with Customer and its designees in implementing any such Recall, at Customer’s expense.

17.3 Supplier’s Liability for Recall

In the event of a Recall or Seizure arising from [* * *], Supplier shall be liable for the expenses and out-of-pocket costs actually incurred by Customer as a result of such Recall or Seizure, and Supplier shall, at the option of Customer:

[* * *].

Such liability shall not limit or otherwise be exclusive of any other provisions of this Agreement.

17.4 Customer’s Liability for Recall

In the event of a Recall or Seizure arising from [* * *] Customer shall [* * *].

Such liability shall not be exclusive of any other provisions of this Agreement.

17.5 Replacement Shipments

In the event of any Recall or Seizure with respect to the Product during the Term of this agreement, Supplier shall, upon the written request of Customer, as soon as reasonably possible, supply replacement Product to Customer in an amount sufficient to replace the amount of Product Recalled or Seized, at the applicable then current Fees for Product under this Agreement. If Customer makes such written request, Customer shall issue a Purchase Order in this regard which Supplier is obliged to accept. Supplier agrees to use commercially reasonable efforts to supply such replacement Product pursuant to the new Purchase Order as soon as possible.

 

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Article 18 Termination

18.1 Termination

This Agreement is effective as of the Effective Date and will expire in accordance with Section 2.1, unless, upon the occurrence of any of the following events, this Agreement is earlier terminated in accordance with this Section 18.1:

a) Customer delivers written notice of termination to Supplier at least [* * *] prior to the expiration date of the Initial Term, which termination shall be effective as of the expiration date of the Initial Term;

b) either Party delivers written notice of termination to the other Party at least [* * *] prior to the expiration date of the Renewal Term, which termination shall be effective as of the expiration date of the Renewal Term;

c) a Party makes a general assignment for the benefit of creditors, a court of competent jurisdiction declares a Party insolvent or bankrupt, or a petition in bankruptcy or under any insolvency law is filed by or against a Party and such petition is not dismissed within [* * *] after it has been filed, and the other Party delivers written notice of termination to such Party, which termination shall be effective immediately upon delivery of such written notice;

d) a Party breaches a material provision of this Agreement, and the other Party delivers written notice of termination to such breaching Party:

(i) if the breach is not cured within [* * *] after written notice thereof to the Party in default; or

(ii) if the breach is of a type that cannot be cured within [* * *], if a cure is not promptly commenced and diligently pursued until complete remediation but in any case after [* * *] unless otherwise agreed in writing between the Parties;

e) any governmental law, regulation or order is adopted and made effective which would make performance of a Party’s obligations under this Agreement impossible or commercially impracticable, and such Party delivers written notice of termination to the other Party, which termination shall be effective immediately upon delivery of such written notice; or

f) a Party has the right to terminate under Section 14.3, which termination shall be effective [* * *] after delivery of written notice to the non-terminating Party.

 

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18.2 Consequences of Termination

On expiration or the effective date of termination of this Agreement, if earlier:

a) both Parties shall be released from all obligations and duties imposed or assumed hereunder, except obligations and liabilities previously accrued and as expressly provided by this Agreement, including, without limitation, those provisions which expressly survive termination or expiration of this Agreement;

b) all Rights granted by Customer to Supplier under Section 11.3 shall immediately revert to Customer, provided that Supplier may continue to use any such Rights in order to fulfil its surviving obligations under Section 18.5, and only for such purpose;

c) Supplier shall provide to Customer, to the extent they exist, copies of:

(i) Supplier’s Manufacturing batch records and analytical reports relating to the Product; and

(ii) any other documents required to be delivered pursuant to this Agreement or otherwise reasonably requested by Customer;

d) Unless this Agreement is terminated by Customer pursuant to Section 18.1(d) above, all Purchase Orders and Scopes of Work shall automatically be deemed terminated by Customer and Supplier shall be compensated for final Product already produced or Services already rendered in accordance with this Agreement and, for Products or Services not yet produced or rendered, as the case may be, Supplier shall be entitled to its fees, expenses and costs as set forth in Sections 6.4 and 6.6. Additionally, Customer shall be entitled to request that (i) all Products and/or works in process for which Customer has compensated Supplier and (ii) all Customer Materials be shipped to Customer in accordance with the provisions of Section 7.2(d). If this Agreement is terminated by Customer pursuant to Section 18.1(d) as a result of Supplier’s breach, then, Customer shall be able to elect whether Purchase Orders or Scopes of Work not yet completed at the date of termination or expiration should continue in force, subject to the terms and conditions herein; and

e) Supplier shall promptly cooperate with Customer to transfer and transition supply of the Products to a Third Party supplier. Upon Customer’s request, Supplier shall cooperate with Customer in the transfer of technology and know-how necessary to Manufacture Products to such Third Party supplier, including providing Customer and the Third Party supplier with reasonable access to the Facilities and consulting services related to Manufacturing of the Product. Supplier shall conduct such activities at Customer’s expense paid in advance.

 

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18.3 Return of Samples

On expiration or earlier termination of this Agreement, unless otherwise instructed by Customer, Supplier shall, within [* * *], return to Customer all samples or other supplies of the Product (for which Supplier has been paid) in its possession or control in any form, with the exception of any samples such as retention samples that Supplier may be required to keep according to Applicable Law. The cost of returning any such supplies shall: [* * *]

18.4 Return of Confidential Information

On expiration or earlier termination of this Agreement, unless otherwise agreed between the Parties, each Party shall:

a) promptly cease all use of the Confidential Information of the other Party and ensure that its corporate counsel, employees and contractors cease all use thereof; and

b) upon written request of the other Party,

(i) return to the other Party all original copies of the Confidential Information of the other Party in its control or possession, subject to the retention of one (1) complete copy for archival purposes and to satisfy any applicable legal requirements; and

(ii) except for back-up copies generated by the recipient Party’s IT system, destroy any and all copies or other reproductions or extracts of the Confidential Information of the other Party and all other documents, computer files, memoranda, notes or other writings prepared based on such Confidential Information subject to clause (i) above.

18.5 Survival

Except as otherwise provided herein or agreed in writing between the Parties, expiration or early termination of this Agreement shall not relieve either Party of its obligations incurred prior to such expiration or early termination, including the obligation to Manufacture and deliver the Product under Purchase Orders placed by Customer and accepted by Supplier prior to the effective date of expiration or earlier termination, and the obligation to pay Fees in respect thereof. In addition, the following provisions shall survive any expiration or early termination of this Agreement in accordance with the terms of such provision; provided that if there is no express expiration or termination of an obligation or a right under a surviving provision, such provision or right shall continue to survive, subject to Applicable Law[* * *]:

Article 1 (Interpretation); Section 2.2 (Effect of Expiration on Purchase Orders); Section 5.3 (Retention Samples); Article 9 (Fees) (solely with respect to amounts owed or paid following termination); Article 11 (Intellectual Property) (other than Section 11.3 (Grant of License by Customer)); Article 12 (Confidentiality & Publicity); Section 13.3 (No other Warranty); Section 13.4 (No Consequential Damages and Limitation of Liability); Article 14 (Indemnification); Article 15 (Insurance); Section 16.2 (Maintenance of Records); Section 16.4 (Drug Master Files); Section 16.6 (Inspection); Sections 17.2

 

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(Recalls), 17.3 (Supplier’s Liability for Recall) and 17.4 (Customer’s Liability for Recall); Sections 18.2 (Consequences of Termination), 18.3 (Return of Samples) and 18.4 (Return of Confidential Information); this Section 18.5 (Survival); and Article 19 (Miscellaneous) (except 19.2 and 19.5).

Further, Article 8 (Acceptance of Shipments) shall survive any expiration or termination of this Agreement solely with respect to shipments of Product shipped prior to the effective date of expiration or termination.

Article 19 Miscellaneous

19.1 Assignment; Inurement

This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their successors and permitted assigns. Supplier shall not assign this Agreement, in whole or in part, to any person without the prior written consent of Customer, except to a Third Party which acquires all, or substantially all, of Supplier’s business or assets, whether through merger or otherwise.

Customer shall be entitled to assign this Agreement, in whole or in part, to any person without the consent of Supplier, provided that (i) such person acquires all, or substantially all, of Customer’s business or assets with respect to the Product, whether through merger or otherwise; (ii) such person is an Affiliate of Customer or a Customer Licensee; or (iii) Customer remains liable for any payments Supplier is or will be entitled to under this Agreement. Customer shall not assign this Agreement, in whole or in part, to any other person without the prior written consent of Supplier, not to be unreasonably withheld, conditioned or delayed.

19.2 Change of Control

During the Term, Supplier will promptly notify Customer in writing if at any time a Change of Control shall occur as to Supplier, such notification to be given no later than fifteen (15) days following such Change of Control. [* * *]

19.3 Counterparts

This Agreement may be executed in any number of counterparts each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same instrument.

19.4 Dispute Resolution

Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be referred first to senior management of the Parties for amicable resolution. In the event that amicable resolution has not been achieved within [* * *], then either Party may seek resolution through

 

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confidential arbitration in accordance with the ICC Rules of Arbitration. The arbitration hearing shall be held as soon as practicable following submission to arbitration. The arbitration hearing shall be held in Delaware. The Parties shall request that the arbitration panel render a formal, binding non-appealable resolution and award on each issue as expeditiously as possible. In any arbitration, the prevailing Party shall be entitled to reimbursement of its reasonable attorneys’ fees and the Parties shall use all reasonable efforts to keep arbitration costs to a minimum. Judgment upon the award may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant Party or its assets.

19.5 Force Majeure

Any delay or inability to perform any of the duties or obligations of either Party caused by an event outside the affected Party’s reasonable control shall not be considered a breach of this Agreement, and unless provided to the contrary herein, the time required for performance shall be extended for a period equal to the period of such delay. Such events shall include, without limitation: acts of God; any governmental act or regulation; insurrections; riots or civil disturbance; acts of war; embargoes; labor disputes at facilities of Material suppliers, including strikes, lockouts, job actions, or boycotts; fires; explosions; terrorist attacks; floods; or other unforeseeable causes beyond the reasonable control and without the fault or negligence of the Party so affected. In order to take the benefit of this section, the Party so affected shall give prompt notice [* * *] to the other Party of such cause, and shall take whatever reasonable steps are necessary to relieve the effect of such cause as rapidly as reasonably possible. If performance is affected for a cumulative period of more than [* * *], the non-affected Party may terminate this Agreement immediately by notice in writing to the affected Party.

19.6 Performance

Each Party agrees to perform its obligations under this Agreement, including under any Scope of Work, in a timely manner. Supplier shall allocate adequate resources to execute its obligations under this Agreement, including under each Scope of Work. Supplier represents and warrants that all Services shall be performed by qualified personnel in accordance with the highest industry standards.

19.7 Further Assurances

The Parties shall both execute and deliver such further instruments and do such further acts as may be required to implement the intent of this Agreement.

19.8 Independent Contractors

Supplier and Customer shall be independent contractors and shall not be deemed to be partners, joint venturers or each other’s agents under this Agreement, and neither Party shall have the right to act on behalf of the other except as is expressly set forth in this Agreement.

 

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19.9 Injunctions

Each Party agrees that the other Party may be irreparably damaged if any provision of this Agreement is not performed in accordance with its terms. Accordingly, notwithstanding Section 19.3, each Party will be entitled to apply for an injunction or injunctions to prevent breaches of any of the provisions of this Agreement by the other Party, without showing or proving any actual or threatened damage, notwithstanding any rule of law or equity to the contrary, and may specifically enforce such provisions by an action instituted in a court having jurisdiction. These specific remedies are in addition to any other remedy to which the Parties may be entitled at law or in equity.

19.10 Notices

Unless otherwise provided herein, any notice required or permitted to be given hereunder or any proposal for any modification of this Agreement (hereinafter collectively referred to as the “Correspondence”) shall be faxed, mailed by overnight mail, certified mail postage prepaid, or delivered by hand to the Party to whom such Correspondence is required or permitted to be given hereunder at the addresses set out below. If delivered by hand, any such Correspondence shall be deemed to have been given when received by the Party to whom such Correspondence is given and if faxed, any such Correspondence shall be deemed to have been given on the first Business Day following facsimile transmission, as evidenced by written and dated receipt of the receiving Party.

If to Supplier:

 

CARBOGEN AMCIS AG

Hauptstrasse 159-173

CH 4416 Bubendorf

Switzerland

Attention: CEO
Telephone: + 41 61 935 5353
Facsimile: + 41 61 935 5300

If to Customer:

 

Paratek Pharmaceuticals, Inc.

75 Park Plaza, 4 th Floor

Boston, MA 02116

USA

Attention: General Counsel
Phone: +1 617 807 6600
Facsimile: +1 617 275 0039

 

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Either Party may change the address to which any Correspondence to it is to be addressed by notification to the other Party as provided herein.

19.11 Entire Agreement

This Agreement, the Quality Agreement and all Exhibits attached hereto (as the same may be amended from time to time by the written agreement of the Parties) constitute the entire agreement between the Parties with respect to the subject matter hereof and supersede all other documents, agreements, verbal consents, arrangements and understandings between the Parties with respect to the subject matter hereof. This Agreement shall not be amended orally, but only by an agreement in writing, signed by both Parties that states that it is an amendment to this Agreement.

19.12 Severability

If any term or provision of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or provision hereof, and this Agreement shall be interpreted and construed as if such term or provision, to the extent the same shall have been held to be invalid, illegal or unenforceable, had never been contained herein.

19.13 Waiver

No waiver or modification of any of the terms of this Agreement shall be valid unless in writing and signed by an authorized representative of the Parties hereto. Failure by either Party to enforce any rights under this Agreement shall not be construed as a waiver of such rights, nor shall a waiver by either Party in one or more instances be construed as constituting a continuing waiver or as a waiver in other instances.

[ Signature page follows. ]

 

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IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be executed by its duly authorized officer as of the dates set forth below.

 

CUSTOMER
by its authorized signatory:

/s/ William M. Haskel

Name:   William M. Haskel
Title:   Sr. Vice President
Date:  

January 9, 2017

CARBOGEN AMCIS AG

 

by its authorized signatory:

/s/ Silke Erbeck

Name:   Silke Erbeck
Title:   Senior Head of Commercial Products
Date:  

10.Jan.2017

/s/ Dr. Stephan Fritschi
Stephan Fritschi
VP Operations
CARBOGEN AMCIS AG
10.Jan.2017

 

[ Signature page to Outsourcing Agreement ]


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Exhibit A – Description of Product

[* * *]


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 B – Chemical Synthesis

[ * * * ]


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 – Fee Schedule

[ * * *]


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. WHERE TWO PAGES OF MATERIAL HAVE BEEN OMITTED, THE REDACTED MATERIAL IS MARKED WITH [†].

 

Exhibit D – Certificate of Analysis and Certificate of Compliance

[†]

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael F. Bigham, certify that:

 

1. I have reviewed this Annual Report on Form 10-K/A of Paratek Pharmaceuticals, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision; to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

/s/ M ICHAEL F. B IGHAM
Michael F. Bigham
Chief Executive Officer
May 5, 2017

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Douglas W. Pagán, certify that:

 

1. I have reviewed this Annual Report on Form 10-K/A of Paratek Pharmaceuticals, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision; to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

/s/ D OUGLAS W. P AGAN
Douglas W. Pagán
Chief Financial Officer
May 5, 2017

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Michael F. Bigham, Chief Executive Officer of Paratek Pharmaceuticals, Inc. (the “Company”), hereby certifies that, to the best of his knowledge:

 

1. The Company’s Annual Report on Form 10-K/A for the year ended December 31, 2016 (the “Annual Report”), to which this Certification is attached as Exhibit 32.1 fully complies with the requirements of Section 13(a) or Section 15(d), of the Exchange Act; and

 

2. The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations the Company.

In Witness Whereof, the undersigned has set his hand hereto as of the 5 th day of May, 2017.

 

/s/ M ICHAEL F. B IGHAM
Michael F. Bigham
Chief Executive Officer

This certification accompanies the Annual Report on Form 10-K/A to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Paratek Pharmaceuticals, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of this Annual Report on Form 10-K/A), irrespective of any general incorporation language contained in such filing.

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Douglas W. Pagán, Chief Financial Officer of Paratek Pharmaceuticals, Inc. (the “Company”), hereby certifies that, to the best of his knowledge:

 

1. The Company’s Annual Report on Form 10-K/A for the year ended December 31, 2016 (the “Annual Report”), to which this Certification is attached as Exhibit 32.2 fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and

 

2. The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

In Witness Whereof, the undersigned has set his hand hereto as of the 5 th day of May, 2017.

 

/s/ D OUGLAS W. P AGAN
Douglas W. Pagán
Chief Financial Officer

This certification accompanies the Annual Report on Form 10-K/A to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Paratek Pharmaceuticals, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of this Annual Report on Form 10-K/A), irrespective of any general incorporation language contained in such filing.