Master Manufacturing Services Agreement July 28, 2017

EXHIBIT 10.12

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Master Manufacturing Services Agreement

EXECUTION VERSION

CONFIDENTIAL

Master Manufacturing Services Agreement

July 28, 2017

PARATEK PHARMACEUTICALS, INC.

 

 

 

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Master Manufacturing Services Agreement

 

Table of Contents

 

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Master Manufacturing Services Agreement

 

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Master Manufacturing Services Agreement

 

 

 

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Master Manufacturing Services Agreement

 

MASTER MANUFACTURING SERVICES AGREEMENT

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

B E T W E E N:

PATHEON UK LIMITED,
a corporation existing under the laws of England whose registered office is at ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇

(“Patheon”),

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

of ▇^▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇,

▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇

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

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

ARTICLE 1

Structure of Agreement and Interpretation

1.1Master Agreement.

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

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Master Manufacturing Services Agreement

 

1.2Product Agreements.

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

1.3Definitions.

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

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

[* * *];

[* * *];

[* * *];

“Affiliate” means:

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

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

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

[* * *];

“Applicable Laws” means [* * *]

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Master Manufacturing Services Agreement

 

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

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

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

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

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

[* * *];

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

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

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

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

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

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

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

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Master Manufacturing Services Agreement

 

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

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

[* * *];  

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

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

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

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

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

“EMA” means the European Medicines Agency;

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

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

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

“Gross Negligence” means [* * *];

;

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

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

[* * *];

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

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

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

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Master Manufacturing Services Agreement

 

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

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

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

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

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

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

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

[* * *];

[* * *];

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

“PAI” has the meaning specified in Section 7.5;

[* * *];

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

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

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

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

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Master Manufacturing Services Agreement

 

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

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

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

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

“Recipient” has the meaning specified in Section 11.1;

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

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

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

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

[* * *];

[* * *];

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

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Master Manufacturing Services Agreement

 

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

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

[* * *];

[* * *];

[* * *];

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

“Term” has the meaning specified in Section 8.1;

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

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

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

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

[* * *]; and

[* * *].

1.4Currency.  

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

1.5Sections and Headings.  

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

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Master Manufacturing Services Agreement

 

1.6Singular Terms.

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

1.7▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇ and Exhibits.

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

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Master Manufacturing Services Agreement

 

ARTICLE 2

PATHEON'S MANUFACTURING services

2.1Manufacturing Services.

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

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Master Manufacturing Services Agreement

 

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Master Manufacturing Services Agreement

 

2.2Active Material Yield.  

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

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

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

[* * *]

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Master Manufacturing Services Agreement

 

ARTICLE 3

CLIENT'S OBLIGATIONS

3.1Payment.

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

3.2Active Materials and Qualification of Additional Sources of Supply.

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Master Manufacturing Services Agreement

 

ARTICLE 4

[CONVERSION fees AND] COMPONENT COSTS

4.1First Year Pricing.

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

4.2Price Adjustments – Subsequent Years’ Pricing.

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

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Master Manufacturing Services Agreement

 

4.3[* * *]

4.4Price Adjustments – Current Year Pricing.

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

4.5[* * *]

4.6Multi-Country Packaging Requirements.  

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

ARTICLE 5

ORDERS, SHIPMENT, INVOICING, PAYMENT

5.1Orders and Forecasts.  

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Master Manufacturing Services Agreement

 

5.2Reliance by Patheon.

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Master Manufacturing Services Agreement

 

5.3[* * *]

5.4Delivery and Shipping.

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

5.5Invoices and Payment.

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

ARTICLE 6

PRODUCT CLAIMS AND RECALLS

6.1Product Claims.

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Master Manufacturing Services Agreement

 

6.2Product Recalls and Returns.

6.3Patheon’s Responsibility for Defective and Recalled Products.

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Master Manufacturing Services Agreement

 

6.4Disposition of Defective or Recalled Products.

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

6.5Healthcare Provider or Patient Questions and Complaints.

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

6.6[* * *]

ARTICLE 7

CO-OPERATION

7.1Quarterly Review.

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

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Master Manufacturing Services Agreement

 

7.2Governmental Agencies.

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

7.3Records and Accounting by Patheon.

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

7.4Inspection.

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

7.5Access.

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

7.6Notification of Regulatory Inspections.

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

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Master Manufacturing Services Agreement

 

7.7Reports.

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

7.8Regulatory Filings.

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Master Manufacturing Services Agreement

 

7.9Technology Transfer.

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

ARTICLE 8

TERM AND TERMINATION

8.1Initial Term.

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

8.2Termination for Cause.

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8.3Obligations on Termination.

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ARTICLE 9

REPRESENTATIONS, WARRANTIES AND COVENANTS

9.1Authority.

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

9.2Client Warranties.

Client covenants, represents and warrants, that:

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9.3Patheon Warranties.

Patheon covenants, represents, and warrants that:

9.4Permits.

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9.5No Warranty.

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

ARTICLE 10

REMEDIES AND INDEMNITIES

10.1Consequential and Other Damages.

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

10.2Limitation of Liability.

10.3Patheon Indemnity.

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10.4Client Indemnity.

10.5Reasonable Allocation of Risk.

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

ARTICLE 11

CONFIDENTIALITY

11.1Confidential Information.

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

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

11.2Use of Confidential Information.

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

11.3Exclusions.

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

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

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11.4Photographs and Recordings.

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

11.5Permitted Disclosure.

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

11.6Marking.

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

11.7Return of Confidential Information.

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

11.8Remedies.

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

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ARTICLE 12

DISPUTE RESOLUTION

12.1Commercial Disputes.

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

12.2Technical Dispute Resolution.

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

ARTICLE 13

MISCELLANEOUS

13.1Inventions.

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13.2Intellectual Property.

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

13.3 [* * *]

13.4Insurance.

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

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13.5Independent Contractors.

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

13.6No Waiver.

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

13.7Assignment and Subcontracting.

13.8Force Majeure.

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

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13.9Additional Product.

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

13.10Notices.

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

If to Client:

Paratek Pharmaceuticals, Inc.

▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇

▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

▇▇▇

Attention: General Counsel

[* * *]

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

If to Patheon:

Patheon UK Limited

▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇

▇▇▇▇▇▇▇▇▇

▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇

▇▇▇▇▇▇ ▇▇▇▇▇▇▇

Attention: [* * *]

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

13.11Severability.

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

13.12Entire Agreement.

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

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

13.13Other Terms.

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

13.14No Third Party Benefit or Right.

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

13.15Execution in Counterparts.

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

13.16Use of Client Name.

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

13.17Taxes.

[* * *]

13.18Governing Law.

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

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13.19Further Assurances.

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

13.20Supply and Quality Committee

[Signature page to follow]

 

 

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

 

 

 

 

[Signature page to Master Manufacturing Services Agreement]

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APPENDIX 1

FORM OF PRODUCT AGREEMENT

(Includes Schedules A to D)

PRODUCT AGREEMENT

This Product Agreement (this “Product Agreement”) is issued under the Master Manufacturing Services Agreement dated July 28, 2017 between Patheon UK Limited and Paratek Pharmaceuticals Inc. (the “Master Agreement”), and is entered into [insert effective date] (the “Effective Date”), between Patheon UK Limited, a corporation existing under the laws of England [or applicable founding jurisdiction for Patheon Affiliate], having a principal place of business at ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ (“Patheon”) and Paratek Pharmaceuticals Inc. a corporation existing under the laws of Delaware, of ▇^▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇ (“Client”).

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

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

 

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

 

 

 

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SCHEDULE A

PRODUCT LIST AND SPECIFICATIONS

Product List

[insert product list]

Specifications

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

 

 

 

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SCHEDULE B

[* * *] PRICE

[Insert Price Table]

 

Manufacturing Assumptions:

Packaging Assumptions:

Testing Assumptions:

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

[* * *]

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

[* * *]

 

 

 

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SCHEDULE C

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

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

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

 

 

 

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SCHEDULE D

ACTIVE MATERIALS

 

 

[* * *]

 

[End of Product Agreement]

 

 

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EXHIBIT A

TECHNICAL DISPUTE RESOLUTION

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

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

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

3.[* * *]

4.Procedure.  Where an expert is appointed:

 

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

 

 

 

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EXHIBIT B

QUARTERLY ACTIVE MATERIALS INVENTORY REPORT

 

 

 

 

 

 

 

 

 

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EXHIBIT C

[* * *]

 

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PRODUCT AGREEMENT

This Product Agreement (this “Product Agreement”) is issued under the Master Manufacturing Services Agreement dated July 28, 2017 between Patheon UK Limited and Paratek Pharmaceuticals Inc. (the “Master Agreement”), and is entered into as of July 28, 2017 (the “Effective Date”), between Patheon UK Limited, a corporation existing under the laws of England, having a principal place of business at ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ (“Patheon”) and Paratek Pharmaceuticals Inc. a corporation existing under the laws of Delaware, of ▇^▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇ (“Client”).

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

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

[Signature page to Product 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.

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

 

 

 

[Signature page to Product 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.

 

SCHEDULE A

PRODUCT LIST AND SPECIFICATIONS

Product List

 

Specifications

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

 

 

 

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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.

 

SCHEDULE B

[* * *] PRICE

[* * *]

Manufacturing Assumptions:

[* * *]

Packaging Assumptions:

[* * *]

Testing Assumptions:

[* * *]

Cleaning Assumptions:

[* * *]

Supply Chain Assumptions:

[* * *]

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

[* * *]

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

[* * *]

 

 

 

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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.

 

SCHEDULE C

ANNUAL STABILITY TESTING

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

 

 

 

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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.

 

SCHEDULE D

ACTIVE MATERIALS

 

 

[* * *]