API AND EXCIPIENT SUPPLY TERMS AND CONDITIONS

These API and Excipient Supply Terms and Conditions (“Terms”) govern all purchases made by Covetrus North America, LLC (“Company”) of API and Excipients from the provider specified in the PO (the “Provider”) to which they are attached. In the event that Provider and Company have entered into a definitive agreement dealing with the subject matter hereof, that definitive agreement will control all Pos issued thereunder.

1. DEFINITIONS. In addition to the terms defined in other Sections of these Terms, the following capitalized terms have the meanings set forth below:

(a) “Active Pharmaceutical Ingredient” or “API” means any substance or mixture of substances intended to be used in the compounding of a drug preparation, thereby becoming the active ingredient in that preparation and furnishing pharmacological activity or other direct effect in the diagnosis, cure, mitigation, treatment, or prevention of disease in humans and animals or affecting the structure and function of the body

(b) “Adulterated” has the meaning set forth in the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 351, as the same may be amended or interpreted from time to time.

(c) “Affiliate” means any legal entity that directly or indirectly owns, is owned by, or is commonly owned with a party. “Own” means having more than 50% ownership or the right to direct the management of the entity.

(d) “Certificate of Analysis” means a document issued by Provider’s quality assurance department that confirms a regulated product meets its product specification and is based on the results of specified testing.

(e) “CGMP” means Current Good Manufacturing Practices, as described in 21 CFR Part 210 and/or 211, as the same may be amended or interpreted from time to time.

(f) “Claim(s)” means any and all (1) third-party claims, actions, demands, lawsuits, or proceedings and (2) damages, costs (including reasonable fees of attorneys and other professionals), or liabilities of any kind (including any fine, penalty, judgement, or order issued by a governmental, regulatory, or judicial body), in each case arising out of or relating to that third-party claim, action, demand, lawsuit, or proceeding.

(g) “Excipient” means any inactive substance formulated alongside the active ingredient of a medication, included for the purpose of long-term stabilization, bulking up solid formulations that contain potent active ingredients in small amounts, or to confer a therapeutic enhancement on the active ingredient in the final dosage form, such as facilitating drug absorption, reducing viscosity, or enhancing solubility.

(h) “FDA” means the United States Food and Drug Administration, or any successor agency.

(i) “Law” means all applicable laws, rules, statutes, ordinance, regulation, constitution, treaty, common law, judgement, decree, or other requirements of any government authority (federal, state, local, or international) having jurisdiction.

(j) “PO” means any written or electronic purchase order created by Company.

(k) “Product” means the API or Excipient, as applicable, more fully described in the PO that will be delivered to Company pursuant to these Terms.

(l) “Product Specifications” means a list of tests, references to analytical procedures, and appropriate acceptance criteria which are numerical limits, ranges, or other criteria for the tests described to establish the criteria to which API, a drug substance, drug product or materials at other stages of its manufacture or compounding should conform to be considered acceptable for its intended use.

(m) “Quality Addendum” means the Quality Addendum set forth in Schedule 1 of these Terms.

(n) “Raw Material” means any substance, ingredient, or component used by Provider in the manufacture or compounding of the API or Excipient, whether or not such substance, ingredient, or component is present in the final API or Excipient.

(o) “USP” means United States Pharmacopeia, which is a part of the USP/NF compendia, which is an authoritative standard for the quality of substances, preparation, and articles used in medicine and pharmacy and recognized by the United States FDA.

2. ORDERS. All orders shall be placed via PO and each PO shall specify the quantities, delivery dates, and shipping instructions with regard to the Products specified within the PO. Company is not obligated to buy any specific quantity of the product under these Terms and shall be obligated to purchase only those quantities covered by a written PO.

3. TERM AND TERMINATION.

(a) Term .These Terms are effective upon issuance of a PO referencing them and expire one (1) year after final delivery under such PO, unless earlier terminated (the “Term”).

(b) Termination Without Cause. Company may terminate these Terms, without cause, upon no less than ninety (90) days written notice.

(c) Termination for Cause. Either party may terminate these Terms with cause effectively immediately by giving written notice to the other party if: (i) the other party commits a material breach of these Terms which breach is irremediable or, if such breach is remediable, fails to remedy that breach within a period of ninety (90) days after being notified in writing to do so; (ii) the other party should file a petition of any type as to its bankruptcy, be declared bankrupt, become insolvent, make an assignment for the benefit of its creditors, go into liquidation or receivership, cease to function as a going concern, cease to conduct its operations in the normal course of business or otherwise lose legal control of its business, or should the other party or a substantial part of its business come into the control of one or more third parties other than those in control as of the date of these Terms; or (iii) the other party suspends or ceases, or threatens to suspend or cease, carrying on all or a substantial part of its business.

(d) Effect of Termination. In the event of termination or expiration of these Terms unrelated to Provider’s breach, Company shall purchase Product for which it has placed a PO.

(e) Survival. The provisions of these Terms which by their terms require performance after the termination or expiration of these Terms or have application to events that may occur after the termination or expirations of these Terms, will survive such termination or expiration, including but not limited to, all obligations of confidentiality, all indemnification obligations, any representations and warranties made by a part, any quality requirements, and any limitations on liability.

4. TOOLING AND EQUIPMENT. All inventions, materials, tools, tooling, inventory, know-how, manufacturing process technology, trademarks, information, data, writings and other properties used by Provider in the performance of its obligations hereunder and owned by or licensed to Provider, in each case excluding the Product, shall remain the property of Provider and Company shall acquire no right, title or interest in such property as a result of Provider’s performance hereunder.

5. PAYMEMT. Provider will pay all amounts due and payable net 60 days, a 2% discount on the invoiced amount: or net 90 days with no discount from Company’s receipt of Provider’s invoice. All payments to Provider under these Terms shall be made, at Provider’s option, by credit card, Automated Clearing House (ACH), or electronic wire transfer to an account designated by Provider in writing. Company may dispute any invoice amount (each, a “Disputed Amount”) by providing written notice (email accepted) to Provider. Company will make commercially reasonable efforts to notify Provider in writing of any Disputed Amount within 30 days of receiving the invoice. Company’s failure to provide notice of a Disputed Amount does not waive any of its claims or rights. Company will pay Provider within 60 days from the date of dispute resolution. Any amounts to be paid by Company hereunder do not include taxes. Company is not liable for any taxes Provider is legally obligated to pay, including net income or gross receipts taxes, franchise taxes, and property taxes. Company will pay Provider sales, use, or value added taxes required by Law that Provider must collect from Company.

6. DELIVERY REQUIREMENTS.

(a) The Product shall be delivered to the facility of Company’s choosing as specified in the PO. Delivery and risk of loss terms shall be delivered duty paid Covetrus’ warehouse (INCOTERMS 2010). Each shipment shall be clearly marked with the identity of the Product, the quantity of Product, Provider lot number, container number, designation as a full or partial container, and such other terms as Company shall reasonably require from time to time. Invoices, packing slips, and other documentation sent with all Product delivered by Provider must reference the applicable PO and all applicable information specified by Company in writing. Product should be packed and shipped by Provider in accordance with the Product Specifications, and if applicable under CGMP conditions, to reasonably help ensure that no material damage to the Product shall result from any cause, including, without limitation, weather or transportation. In an effort to minimize contamination, Provider shall deliver the Product to Company in containers which shall be used only for the delivery of the Product to Company. Provider shall ensure that at the time of delivery, Products have the maximum shelf life, provided, however, in no event shall any Products delivered hereunder have a shelf life less than eighteen (18) months.

(b) A Certificate of Analysis will accompany delivery of each lot of Product and will list each item by component code number and revision level, Company’s purchase order number, size and description, lot or batch number, date of manufacture, site or plant of manufacture, and the specifics of the analysis.

(c) Provider will deliver the Product within the time and in the quantity specified in the applicable PO. Should Provider, at any time during the course of these Terms, have reason to believe that it will be unable to meet the delivery date in the purchase order, Provider will notify Company within three (3) business days after Provider formed the reasonable belief that a delay will occur, which notice shall include the reasons for the delay.

(d) Within thirty (30) days after receipt of Product from Provider, Company may test and otherwise examine said Product to determine conformance to the Product Specifications and other warranties set forth herein. In the event that any shipment of the Product shall fail to so conform, Company may reject the nonconforming portion of the shipment within such thirty (30) day period by giving written notice thereof to Provider, which notice shall specify the alleged nonconformity. Company shall be deemed to have accepted a shipment if it is not rejected within such thirty (30) day period. If Company rejects any Product, then Company shall send such Product back to Provider and Provider shall at Company’s option, either (i) ship replacement conforming Product within fifteen (15) days or (ii) credit Company’s account for the price invoiced for such nonconforming Product and if payment thereof has previously been made by Company, Provider shall, at Company’s option, promptly pay Company the amount of such credit or offset the amount thereof against other amounts then due Provider hereunder, if any. In the event that the parties do not agree on the existence of a nonconformity (or with respect to whether Product meets the Product Specification or other warranty requirements), then the parties agree that the Product in question shall be submitted for testing to an independent testing laboratory acceptable to both parties. The determination of such independent laboratory as to whether the Product conforms to the Product Specifications and other warranties set forth herein will be binding on both parties. The cost related to such testing will be paid by the party who was in error with respect to whether the Product were nonconforming or as to the cause of the nonconformity.

(e) Company may return any unsold Products within ninety (90) days before Product’s expiration date (if any) and within ninety (90) days after Product’s expiration date (if any) and Provider shall promptly provide to Company a full refund for the cost of such returned Product at the price paid by Company for such Product.

7. ADDITIONAL REQUIREMENTS.

(a) Provider shall perform the testing on the Product when and in the manner required by the Product Specifications and shall maintain inspection records of Product delivered to Company. The only exception to testing requirements is where both parties have mutually agreed to this in writing.

(b) Provider shall manufacture all Product in accordance with CGMP requirements and the Product Specifications. Provider shall label and package Product in accordance with Law and the Product Specifications, as applicable.

(c) Provider shall maintain complete chain of custody documentation for all Products from manufacture through delivery. Total traceability of Raw Material and components used by Provider in the manufacture of the Product through Provider’s manufacturing process, including, but not limited to, the ability to retrieve the supplier name, the lot number of any Raw Material, manufacturing batch records of Raw Material or other components, quality control reports, and Certificate of Analysis, shall be available upon request by Company for each production lot or batch of Product.

(d) For any Products requiring controlled temperatures, Provider shall use validated shipping containers and methods. Provider shall provide temperature monitoring data for each shipment upon Company’s request. Any deviation from the required temperature range may result in rejection of the shipment at Company’s sole discretion.

(e) Provider shall implement appropriate physical and cybersecurity and physical measures, including the use of tamper-evident packaging for all shipments, to prevent Product from becoming Adulterated, contaminated, counterfeiting. or diversion of Products provided hereunder. In addition to the foregoing, Provider shall maintain procedures to identify, investigate, and report any suspected diversion of Products.

(f) If requested by Company, in Company’s reasonable discretion, all Provider’s production and control records applicable to the Product, including those for packaging and labeling, may be reviewed and approved by an authorized employee of Company to determine compliance with all Product Specifications prior to the delivery of the Product. Such review shall be upon reasonable advance notice to Provider and during Provider’s regular business hours.

8. REPRESENTATIONS AND WARRANTIES. Provider represents, warrants, and covenants that:

(a) All Product delivered under these Terms shall: (i) conform to the Product Specification; (ii) conform with the requirements set forth in the Quality Addendum; and (iii) comply with all Laws including those promulgated by the FDA, CGMP requirements, and USP standards;

(b) Product delivered to Company pursuant to these Terms (i) shall not be Adulterated; (ii) misbranded within the meaning of the FDA, or within the meaning of any applicable state or municipal law; and (iii) will not be an article which may not, under the provisions of Sections 404 and 505 of FDA regulations be introduced into interstate commerce;

(d) The Products do not infringe or misappropriate the intellectual property rights of any third party.

9. CONFIDENTIAL INFORMATION.

(a) In the performance of these Terms, either party (a “Disclosing Party”) may disclose to the other (“Receiving Party”) or a Receiving Party may have access to or become aware of, certain Confidential Information of the Disclosing Party. For the purposes of these Terms, (i) “Confidential Information” of a Disclosing Party, means any and all Trade Secrets and any other non-public, proprietary, or confidential information of such party; and (ii) “Trade Secrets” means any and all business or technical information, including but not limited to a formula, pattern, program, device, compilation of information, method, technique, or process that: (x) derives independent actual or potential commercial value from not being generally known or readily ascertainable through independent development or reverse engineering by persons who can obtain economic value from its disclosure or use; and (y) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

(b) Each party acknowledges and agrees that the Disclosing Party’s Confidential Information shall remain the sole and exclusive property of the Disclosing Party. The disclosure of the Confidential Information by a Disclosing party does not confer any license, interest, or rights of any kind in or to the Confidential Information, except as provided under these Terms. The Receiving Party may use the Confidential Information of the Disclosing Party solely for performing the obligations under these Terms. Receiving Party shall require any recipient of Disclosing Party’s Confidential Information to abide by the restrictions of these Terms concerning the Confidential Information before disclosing such Confidential Information to the recipient. Receiving Party shall be responsible for any failure of Receiving Party (or any of its recipients of the Disclosing Party’s Confidential Information) to treat the Confidential Information confidentially, in accordance with the terms hereof, and/or to use it only in connection with performing its duties under these Terms. Subject to the terms set forth herein, Receiving Party shall protect the Disclosing Party’s Confidential Information with the same degree of protection and care it uses to protect its own Confidential Information, but in no event less than reasonable care. Receiving Party shall not (and will cause any recipient of Disclosing Party’s Confidential Information to not) reverse engineer, disassemble, decompile or reproduce, or otherwise attempt to derive the composition or underlying information, structure source code or Trade Secret provided to it, or to any other individual or entity at Receiving Party’s request, under these Terms, or use it to prepare or procure any products or services competitive with any products or services offered by the Disclosing Party.

(c) Nothing in this Section shall prohibit or limit Receiving Party’s use of information if Receiving Party establishes that (i) at the time of disclosure hereunder such information was generally available to the public; (ii) after disclosure hereunder the information becomes generally available to the public, except through breach of these Terms by Receiving Party; (iii) the information was in the Receiving Party’s possession prior to the Effective Date and was not acquired directly or indirectly from the Disclosing Party; or (iv) the information becomes available from a third party which is not legally prohibited from disclosing such information, provided such information was not acquired directly or indirectly from the Disclosing Party.

(d) At any time upon the request of Disclosing Party, (1) its Confidential Information, including any copies thereof, shall be returned to the Disclosing Party, and (2) all other embodiments of its Confidential Information in the possession of or previously provided to the Receiving Party (including all copies and/or any other form or reproduction and/or description thereof made by the Receiving Party) shall be returned to the Disclosing Party or destroyed (at the Disclosing Party’s option).

10. INDEMNIFICATION.

(a) Provider will defend, indemnify, and hold Company, its Affiliates, and their respective successors, directors, officers, employees. Agents, and customers harmless from and against all Claims to the extent such Claims arise out of or relate to: (i) any Product misappropriating or infringing a third party’s intellectual property; (ii) a product liability claim relating to any Product; (iii) breach by Provider of these Terms or the Quality Addendum (iv) any negligent or willful action or omission of Provider or any of its agents, employees, representatives, successors or assigns in connection with the manufacture, development, sale, storage or dispensing of the Products; (v) action for the recall or seizure of the Products; (vi) Provider’s violation of Law.

(b) Company will: (i) provide Provider with reasonably prompt written notice of Claims; (ii) permit the Provider through mutually acceptable counsel to answer and defend Claims; and (iii) provide Provider with reasonable information and assistance to help the indemnifying party defend Claims at the Provider’s expense. Company may employ separate counsel and participate in the defense of a Claim at its own expense. Provider will not stipulate, admit, or acknowledge fault or liability by Company without its prior written consent. Provider will not settle any Claim or publicize any settlement without Company’s prior written consent.

11. LIMITATION OF LIABILITY. AS PERMITTED BY LAW AND OTHER THAN IT APPLIES TO THE EXCLUDED CLAIMS (AS HEREINAFTER DEFINED), NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL, SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES (INCLUDING DAMAGES FOR LOSS OF DATA, REVENUE, OR PROFITS), WHETHER FORESEEABLE OR UNFORESEEABLE, ARISING OUT OF THESE TERMS REGARDLESS OF WHETHER THE LIABILITY IS BASED ON BREACH OF CONTRACT, TORT, STRICT LIABILITY, BREACH OF WARRANTIES, OR OTHERWISE, AND EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF THOSE DAMAGES. ADDITIONALLY, COMPANY’S LIABILITY TO PROVIDER SHALL NOT EXCEED THE ACTUAL FEES PAID BY COMPANY TO PROVIDER IN THE 12-MONTH PERIOD PRIOR TO THE DATE THE CLAIM AROSE. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE FOREGOING LIMITATIONS ON LIABILITY SHALL NOT APPLY TO LIABILITY ARISING FROM A PARTY’S (I) DUTY TO INDEMNIFY THE OTHER UNDER THESE TERMS; (II) BREACH OF THE QUALITY ADDENDUM; (III) BREACH OF SECTION 10 (CONFIDENTIALITY) (III) WILLFUL MISCONDUCT OR FRAUD, OR (IV) VIOLATION OF LAW (COLLECTIVELY. THE “EXCLUDED CLAIMS”).

12. INSURANCE. Provider must maintain during the Term (and if any policy is on a claims-made and reported form, for three years thereafter): (i) comprehensive “occurrence” general liability insurance, including “occurrence” product liability, contractual liability insurance and advertising injury coverage, with minimum limits of liability of $3,000,000 or local equivalent; and (ii) in the case of information technology or software services Products, technology errors and omissions insurance, with minimum limits of $3,000,000 or local equivalent per claim and annual aggregate, covering all acts, errors, omissions, negligence, infringement of Intellectual Property (except patent and trade secret) and network security and privacy risks (including coverage for unauthorized access, unauthorized use, failure of security including tampering with or introduction of malicious code into firmware, data, software systems or networks, breach of privacy perils, wrongful disclosure or theft of Confidential Information and affirmative breach remediation expense and regulatory action coverages). Upon request by Company, Provider will deliver to Company a certificate naming “Covetrus, Inc. and its subsidiaries and Affiliates” as an additional insured. That product liability insurance must insure against all Products and Private Label Products and must include worldwide territory and jurisdiction and coverage for Product Recall Costs. Insurance coverage must be procured from an insurance company bearing an AM Best Rating of no less than B+ or an S&P Rating of no less than BBB or local equivalent where applicable. Provider must give Company at least 30 days’ written notice of cancellation or expiration of that insurance.

13. MISCELLANEOUS

(a) Relationship. Each party is acting under these Terms as an independent contractor. These Terms does not make either party the employee, partner, agent, or legal representative of the other party for any purpose whatsoever. Neither party is granted any right or authority to assume or to create any obligation, liability, or responsibility, express or implied, on behalf of or in the name of the other party. Each party assumes responsibility for the actions of its agents and employees under these Terms and shall be solely responsible for their supervision, daily direction and control, wage rates, paying or withholding any federal, state, or local income tax or payroll taxes (including Social Security tax of any kind), disability benefits, and the manner and means through which the duties and obligations of that party under these Terms shall be accomplished.

(b) Governing Law and Jurisdiction. These Terms will be governed by and construed in accordance with the laws of the State of Delaware as applicable to contracts made and to be performed in that state, without regard to conflicts of laws principles and without reference to conflict of laws principles and excluding the 1980 United Nations Convention on Contracts for the International Sale of Goods. The parties irrevocably submit to the jurisdiction and venue of the federal courts sitting in the state and federal courts in the State of Delaware, for the purpose of any suit, action or proceeding arising out of these Terms. The parties hereby irrevocably waive any and all defenses to the jurisdiction and venue of the aforesaid courts, including without limitation a motion to dismiss venue and the defense of an inconvenient forum to the maintenance of any such suit, action or proceeding.

(c) No waiver; Severability. A party’s delay or failure to exercise any right or remedy is not a waiver of that or any other right or remedy. If a court of competent jurisdiction determines that any Agreement provision is illegal, invalid, or unenforceable, the remaining provisions will remain in full force and effect.

(d) Assignment. Neither party may assign these Terms, or any rights or obligations hereunder without the express written consent of the other party; provided, however, that Company may assign all of its rights and obligations to an Affiliate or to a third-party who has acquired all or substantially all of the business or assets of such party through a sale, merger, consolidations, reorganization, or similar transaction without such consent. Any attempted assignment in violation of this Section shall be void. These Terms shall inure to the benefit of and be binding upon the parties, their successors, and permitted assigns.

(e) Subcontracting. Provider shall not subcontract any aspect of these Terms without Company’s prior written approval. Provider shall remain responsible for the quality, compliance, and regulatory aspects of all aspects of these Terms.

(f) Force Majeure. Except for Provider’s business continuity (i.e., disaster recovery) obligations under these Terms, neither party is liable for failing to perform its obligations under these Terms due to acts of God, natural disasters, war, civil disturbance, or government action where the cause is beyond the party’s reasonable control (“Force Majeure Event”). A Force Majeure Event does not include difficulty in obtaining labor, materials, or transport, or a strike, lock-out, trade dispute, or labor disturbance where Provider is a direct party. The party affected by a Force Majeure Event will provide written notice to the other party within a commercially reasonable time and use best efforts to resume performance as soon as reasonably possible. In the event Provider is affected by a Force Majeure Event for thirty (30) days or more, Company may terminate these Terms.

(g) Notice. All notices or communications given or required under these Terms shall be in writing and shall be effective upon the earlier of: (i) actual receipt; or (ii) the next business day following deposit with a nationally recognized overnight courier service with any delivery fees pre-paid and addressed to the party at the address set forth on the PO (or at such other address as may have been designated by written notice). Notice to Company shall be sent to Covetrus North America, LLC, 400 Metro Place North, Dublin OH 43017 with a copy to Covetrus, Inc., 12 Mountfort Street, Portland Maine 04101.

(g) Entire Agreement, Amendment. Unless the parties have entered into a definitive agreement relating to subject matter hereof, these Terms, together with all exhibits, schedules, and attachments hereto, supersedes all prior and contemporaneous communications, whether written or oral, regarding the subject matter covered in these Terms. Company reserves the right, in its sole and absolute discretion, to modify, amend, or replace these Terms at any time. The most current version will be posted at https://covetrus.com/legal/ or such other URL as Company may designate in writing. No other notice or consent is required.

Schedule 1
Quality Addendum

This Quality Addendum (the “Quality Addendum”) forms part of API and Excipient Supply Terms and Conditions and, to the extent applicable to the Products, supplements the API and Excipient Supply Terms and Conditions.

1. DEFINITIONS. Terms not defined in these Terms shall have the meaning ascribed to them in the Supply Agreement. In addition to the terms defined in other Sections of these Terms, the following capitalized terms have the meanings set forth below

1.1 “Adverse Event” means any response to a drug that is noxious or unintended and that occurs in a patient at doses for prophylaxis (action taken to prevent disease), diagnosis, or therapy, including: (i) new, rare, or previously poorly documented reactions; (ii) associated with newly marketed medications; (iii) serious, according to the FDA, a serious adverse event is one in which the patient outcome is death, life-threatening, disability or permanent damage, hospitalization (initial or prolonged), a congenital anomaly or birth defect, or necessitates medical or surgical intervention to prevent permanent impairment or damage; (iv) unusual increases in numbers or severity of reactions; and/or (v) allergic reactions and idiosyncratic (peculiar) reactions are also considered ADE’s, if they are deemed to be serious, life-threatening, or fatal, as described above.

1.2 “Complaint” means any written, electronic, or oral communication that alleges deficiencies related to the identity, quality, durability, safety, effectiveness or performance of the Product after its release for distribution.

1.3 “Deviation” means a departure from, or nonconformance with, the Specifications, Packaging Specifications or documented procedures, manufacturing instructions or processes, related to a specific event, as well as any Suspect Product.

1.4 “Drug Master File” means a submission to the Food and Drug Administration (FDA) that may be used to provide confidential detailed information about facilities, processes, or articles used in the manufacturing, processing, packaging, and storing of one or more human drugs

1.5 “Drug Supply Chain Security Act” means the Drug Supply Chain Security Act (Title II of the Drug Quality and Security Act), as amended, and all regulations promulgated thereunder

1.6 “FD&C Act” means the United States Federal Food, Drug and Cosmetic Act, as amended from time to time, and the rules, regulations and guidelines promulgated thereunder.

1.7 “Governmental Authority” means in the Territory, any federal, state, county, local, municipal or other entity, department, commission, bureau, agency, political subdivision, instrumentality, branch, department, authority, board, court, arbitral or other tribunal, official or officer, exercising executive, judicial, legislative, police, regulatory, administrative or taxing authority or functions of any nature pertaining to government.

1.8 “Investigation” means a systematic inquiry or examination performed to identify the most likely cause of a Complaint, Deviation, Recall, Seizure or Corrective and Preventive Action to provide information to support disposition of products and materials impacted thereby, and to determine the impact on associated Products, Raw Material, methods, equipment, processes or systems.

1.9 “Packaging” means final, finished packaging for the Product, including all labels, labeling, inserts, containers (including cartons, shipping cases and other like matter) used with or accompanying the Product.

1.10 “Packaging Specifications” means those Packaging, technical and/or other specifications for the Product, as applicable, used by Company or Company’s Affiliates in the manufacture and supply of the Product in the Territory, including those filed with the FDA.

1.11 “QSR” means any and all quality systems regulations promulgated by the FDA in the form of laws, regulations or guidance documents, including, but not limited to 21 C.F.R. Part 820 (Quality Systems Regulations), as amended or updated from time to time.

1.12 “Suspect Product” means a Product for which there is reason to believe that such Product (1) is potentially counterfeit, diverted, or stolen; (2) is potentially Adulterated; (3) is potentially the subject of a fraudulent transaction; or (4) appears otherwise unfit for distribution such that the product would be reasonably likely to result in serious adverse health consequences or death to animals. There must be well defined process for possible quarantine, investigation and possible rejection and/or recall.

1.13 “T3 Data” means the transaction information, transaction history, and transaction statements required to be provided in accordance with the DSCSA.

2. PROVIDER OBLIGATIONS. This Quality Addendum sets forth quality control and assurance obligations applicable to Provider, who is responsible for the manufacture and supply of the Product.

3. TERM. This Quality Addendum is effective as of the Effective Date and will continue for as long as Product is being supplied by Provider pursuant to the Supply Agreement; provided however, that the obligations set forth in this Quality Addendum shall survive any expiration or termination of the Supply Agreement for no less than (3) years after the expiration date included in the labeling (or end of shelf life if no expiration date) for the last Products supplied under the Supply Agreement.

4. CHANGE CONTROL

4.1 Change Control. Provider will maintain a system (consistent with customary industry practice) to control and implement changes to Specifications, Raw Material, manufacturing procedures, Packaging Specifications, testing and qualification procedures, distribution procedures and documentation related thereto, in accordance with Law. To the extent applicable to the Products, Provider will notify Company at least ninety (90) days in advance and in writing of any changes, and the potential impact on the Products of any such changes, in (i) Raw Material (including any active raw material specified in the Supply Agreement), (ii) Specifications or Packaging Specifications, (iii) the manufacturing procedures (including its Third Party contractor(s), contract manufacturing company(ies), location(s), facilities or equipment used to manufacture, package or distribute any Products), (iv) methods of testing, (v) storage or Packaging of any Products, and (vi) distribution of any packaged Products. Company will have the right to review and approve or reject in writing any such changes at least sixty (60) days before implementation and will have the right to require validation of any such changes, including stability studies. Company will have the right to deny the use of any Raw Material that is derived from an unapproved source.

4.2 Change Required by Governmental Authority. In the event that any Governmental Authority requires any change described in Section 7.1, to the Products (a “Mandated Change”), Provider will promptly (and within one Business Day of its receipt of notice of such Mandated Change) deliver written notice thereof to Company. Such Mandated Change will be subject to review and written approval or rejection by Company. Within ten (10) Business Days after its receipt of such notice, Company will notify Provider if Company determines that it cannot agree to such Mandated Change. If Company cannot agree to such Mandated Change within the time period prescribed by the Governmental Authority for making such Mandated Change, Provider and Company shall use reasonable efforts to negotiate an amendment to the Supply Agreement and, if applicable, this Quality Addendum altering the terms thereof or hereof or adding such other terms as may be just and equitable in respect of such Mandated Change. If such amendment is agreed to, Provider will provide to Company any necessary revised documents for its review and approval. Company shall be entitled to make the final decision with respect to any Mandated Change or change that may impact its regulatory status or the safety or efficacy of the Product and shall be entitled to cancel all purchase orders outstanding under the Supply Agreement for the affected Product or Products if it does not agree to such change or Mandated Change.

4.3 Regulatory Impact. Provider will inform Company of any change by Provider requiring a submission to, and/or approval by, a Governmental Authority. Company shall determine whether changes to the Products will require or impact any of the regulatory filings of Company and will apply for approval for any required manufacturing amendment, change or addition to the Products and receive such approval before such amendment, change or addition is implemented. Upon request, Provider will assist in the preparation and review of pertinent sections of new or supplemental regulatory applications before filing. Company will provide to Provider copies of sections of product registration/regulatory submissions that are relevant to the manufacture of the Products. Company is responsible for all communications with or notifications to any Governmental Authority related to any such changes, as well as for the approval, maintenance, and updating of any marketing authorization in a timely manner.

5. QUALITY ASSURANCE

5.1 Provider represents, warrants and covenants that: (i) all manufacturing facilities used for API production are registered with the FDA and maintain current Good Manufacturing Practice compliance under 21 CFR Parts 210 and 211; (ii) Provider maintains all required FDA registrations, including Drug Master Files (DMFs) for all Products supplied hereunder; (iii) Provider maintains a comprehensive quality management system including change control, deviation management, and CAPA (Corrective and Preventive Action) procedures; and (iv) Provider shall promptly notify Companys of any FDA or other regulatory inspections. Provider shall provide notification within twenty-four (24) hours of any FDA Form 483 observations, warning letters, or other significant regulatory actions. Provider shall provide Company with copies of all inspection reports, responses, and related correspondence with regulatory agencies within five (5) business days of receipt.

5.2 Provider shall perform all required CGMP testing on all Product lots, including but not limited to: (i) identity testing; (ii) assay and related substances; (iii) residual solvents; (iv) heavy metals and elemental impurities; (v) microbiological testing; and (vi) where applicable, particle size distribution.

5.3 Provider shall comply with all applicable requirements of the Drug Supply Chain Security Act, including, but not limited to: (i) providing all T3 Data in a secure, electronic, and interoperable manner; (ii) maintaining systems to enable product tracing throughout the supply chain; (iii) implementing systems for product verification and investigation of suspect products, and responding to verification requests from Company within one (1) business day; and (iv) implementing product serialization as required by all current and future applicable Federal and State regulations.

6. INQUIRIES, ADVERSE EVENTS AND COMPLAINTS

6.1 Regulatory Responsibility. The parties agree that Provider is responsible for and has final decision-making authority over the collection and reporting of Adverse Events and for all Complaints. The parties shall promptly, and within twenty-four (24) hours, notify each other of any non-routine communication it or any of its Affiliates receives from any Governmental Authority relating to the post-market vigilance of the Products.

6.2 Investigations. Provider will perform an Investigation for any Deviation occurring during the manufacturing, Packaging and/or testing of the Products. All such Investigations will be completed and any Deviations resolved before Product is released to Company. Company will have the right to review and approve or reject in writing any Deviation and require validation and stability data with respect to any such Deviation.

6.3 Complaints. Provider shall be responsible for registering, evaluating, investigating, and closing complaints on Products. Provider will conduct an Investigation of Complaints, by analyzing the Products and Raw Material to determine the root cause, if any, of any alleged Deviation, manufacturing defect or failure. Such Investigations will normally include, among other things, the review of manufacturing and Packaging records, maintenance logs, validations, calibrations and stability data. Such Investigations will evaluate (i) any nonconformances or Deviations and/or exceptions associated with any Lot that such Complaint is referencing for potential causes thereof, and (ii) any recently implemented change controls to determine if a cause and effect relationship exists and/or whether such change controls may cause a problem sufficient to result in such Complaint. Provider will work diligently and shall use commercially reasonable efforts to provide written Investigation reports to Company within twenty (20) days from the date of Company’s notification to Provider of a Complaint (or such time that shall be agreed upon in writing between Provider and Company) and ten (10) days in the case of a response required to the FDA or other Governmental Authority. In the event that Company determines that any additional physical or other evaluation should be conducted by Provider in relation to a Complaint, Company will so advise Provider, and Provider will conduct the necessary evaluations and advise Company of the results thereof within the time frames described above. Nothing contained in this Quality Addendum will be construed as restricting the right or duty of either Party to make a required report or submission to the FDA or other Governmental Authority or to take any other action that it deems to be appropriate or required by Law.

7. RECALLS, SEIZURES AND OTHER CORRECTIVE ACTIONS

7.1 Communication and Notices. Company and Provider each agrees to (a) share with the other, within three (3) days (or such shorter period as may otherwise be set forth in this Quality Addendum), any information that might lead to a Recall, Seizure or Corrective and Preventive Action related to the Products, and (b) forward to the other Party a copy of any communication associated with the Products that it plans to issue before such communication is issued or sent to any Governmental Authority; provided that (i) any Recall decision with respect to Products shall be made in accordance with this Section below, and (ii) if Company decides to conduct a Recall of Product, Company will have responsibility for notifying the FDA, sub-distributors and customers of such Recall and of Recall-related activities.

7.2 Recalls, Seizures and Corrective and Preventive Actions.

(a) Definitions. For purposes of this Quality Addendum (i) “Recall” will mean any removal or correction of a Product within the meaning of 21 C.F.R., Part 7, Subpart C, Section 7.46 (Firm-Initiated Recalls), and will include any decision by Company not to sell or ship Products which would have been subject to Recall if sold or shipped, in each case taken in the good faith belief that such action was appropriate under the circumstances, (ii) “Seizure” will mean any action by any Governmental Authority to detain or destroy Products and (iii) “Corrective and Preventive Actions” will mean any action by Provider as defined in 21 C.F.R. Section 820.100, as the same may be amended or interpreted from time to time.

(b) Responsibility for Recall or Response to Seizure. If any Product is found to be Adulterated or otherwise in violation of Law, Company will consult with Provider to determine whether to conduct a Recall of Product. Company will reasonably cooperate with Provider, at Provider’s expense, in conducting and communicating to any users any Recall or responding to any Seizure to the extent either event involves Products and will comply with all of Provider’s reasonable requests relating to the conduct of such Recall or the response to such Seizure.

(c) Recall and Seizure Records. Provider will maintain complete and accurate records of any manufacturing, packaging, or testing associated with a Recall or Seizure for such periods as may be required by Law, but in the case of any Recall, no event less than three (3) years after the Recall is completed.

(d) Responsibility for Corrective and Preventive Action. Provider will be responsible for (i) the Investigation of the cause of nonconformances relating to the Products and Provider’s processes and its quality system, (ii) identifying the action necessary to correct and prevent recurrence of nonconforming product and other quality problems, (iii) verifying or validating such action to ensure that such action is effective and does not adversely affect the Product, (iv) implementing and recording changes in methods and procedures needed to correct and prevent identified quality problems, (v) ensuring information related to quality problems or nonconforming product is promptly disseminated to Company, (vi) submitting relevant information on identified quality problems, as well as Corrective and Preventive Actions, for Company review and (vii) documenting all related activities and their results.

7.3 Post-Recall, Seizure or Corrective and Preventive Action. Following any Recall, Seizure or Corrective and Preventive Action, Provider will review all of its procedures as impacted by the identified root cause in the associated Investigation, and will revise such procedures, as necessary, to correct the cause of such Recall, Seizure or Corrective and Preventive Action. Provider will provide Company with such information regarding such review and revisions as Company may request.

7.4 Liability for Recalls. Provider will be responsible for any liability or obligation arising from any Recall in respect of Products relating to (i) Products that did not meet the Specifications or Packaging Specifications, (ii) contracted services agreed upon between the parties, or (iii) any negligent acts or omissions, fraud or willful misconduct by Provider.

8. AUDITS

8.1 Site Visits. Company will have the right, at reasonable intervals, as circumstances require, and on reasonable prior notice and during normal business hours, to inspect those, parts of Provider’s facilities utilized in the manufacture and supply of the Products and books and records related thereto. Such inspections may include a review of quality system procedures and documentation, production processes, Purchasing Controls and Raw Material used in manufacturing, as well as all Lot Documents as set forth in Section 6.2, and Investigation processes. The frequency and extent of inspections will be determined by the mutual agreement of Company and Provider; provided, however, that Company shall have the right to conduct such audits at least once per calendar year and as necessary upon the occurrence of Complaints or other emergency situations, and Provider agrees not to withhold permission for such an audit.

8.2 Audit Report. Company will provide Provider with a written report of Company’s observations during any audit conducted pursuant to the Supply Agreement that requires remedial action by Provider. Provider will respond to the observation report in writing within thirty (30) days for critical findings, forty-five (45) days for major findings, and sixty (60) days for minor findings, after Provider’s receipt thereof, and will implement solutions as promptly as possible thereafter. Closure of observations must have verifiable documentation.

8.3 Unannounced Audits. Provider shall allow unannounced audits by any Government Authority. Provider shall notify Company in writing immediately but not more than one (1) business day from the commencement of a Notified Body audit in which Company Product(s) is included in the audit scope. Provider agrees that Company and/or its authorized representatives shall have the right to be present during any such audits. During such audits, Provider shall provide reasonable access to its controlled documentation related to the Products and Raw Material and shall reasonably cooperate with such Notified Body(ies) and its authorized representatives. Provider agrees to use reasonable efforts to include similar provisions in its agreements with vendors that provide services or supply Raw Material to be used in the Products.

9. REGULATORY VISITS; REGULATORY COMMUNICATION

9.1 Regulatory Visits. Provider will, within twenty-four (24) hours of its receipt of notice thereof, notify Company of any FDA or other Governmental Authority inspection or action regarding the Products at the Provider facility used in manufacturing the Product, which could potentially impact the Product. Provider will keep Company informed of any issue related to the Product raised by FDA or the applicable Governmental Authority. Promptly upon receipt by Provider, but no later than one working day thereafter, Provider will provide Company with copies of each FDA Form 483 inspection report and/or legal action relating to production of the Product or the facilities used in manufacturing, Packaging and related testing of the Product, as well as Provider’s proposed response to such reports or actions as it pertains to Company Product. Company shall have the right to review and comment on any such proposed response that could affect the manufacture and supply of the Product and may have a representative at Provider’s facility during such inspection at its own cost. Provider will promptly remedy any regulatory deficiencies for which it is responsible at its own cost.

9.2 Communications with FDA and other Governmental Authorities. Except to the extent otherwise set forth in this Quality Addendum or the Supply Agreement, Company will have the sole responsibility for correspondence and other communications with, and response to inquiries or requests from the FDA and any other Governmental Authority involving the Product.

10. VALIDATION, REGULATORY COMPLIANCE, DATA INTEGRITY, RETENTION

10.1 Provider will validate all processes, custom test methods, equipment, specialized utilities requiring validation, and computer software programs utilized in the manufacture and supply of Product for commercial sale in conformance with all Law related to the manufacture of the Products. Provider will be responsible for and will ensure that all validated systems are maintained according to FDA regulations and that all required periodic revalidations are performed according to FDA regulations. Provider will provide to Company a copy of all current Product validation documentation upon Company’s request.

10.2 Company and Provider will comply with the latest version of all applicable laws, regulations, and standards including, but not limited to, QSR requirements, FDA regulations, and FD&C regulations. Provider will provide evidence of compliance including, but not limited to, certifications, audit reports, and other such documentation of compliance.

10.3 These Terms and the activities performed in support of these Terms must comply with the any and Law.

10.4 Provider will have and maintain in place corporate policies and/or procedures governing data integrity, which at a minimum will require that (i) all data generated from any testing conducted by Provider of Product, Raw Material, Packaging, work in process, stability samples, or elements of an experimental program are to be reported accurately and will not be altered in any manner; and (ii) Provider will not knowingly and/or deliberately alter or adjust any test procedure or test equipment, including data acquisition computer systems, to provide results that do not accurately measure the sample or process being tested.

10.5 Provider shall have an appropriate retention program for documents that provide Specifications and procedures for materials and operations used in processing the product. Provider shall retain all records and documents consistent with the retention periods set forth by Law, but in no event less than there (3) years.