CONTRACT BETWEEN AUROBINDO PHARMA U.S.A., INC. AND THE CITY OF DURHAM REGARDING INCENTIVES FOR JOB CREATION WITHIN THE CITY LIMITS THIS CONTRACT (“Contract” or “Agreement”) is dated, made, and entered into as of the ____ day of ______________, 2016, by the City of Durham (“City”) and Aurobindo Pharma U.S.A., Inc. (“Company”or “Contractor”), organized and existing under the laws of the State of Delawareand authorized to transact business in the State of North Carolina, and the City of Durham (the “City”), a North Carolina municipal corporation. Background and Purpose. The Companyis apharmaceutical company with U.S. headquarters in New Jerseyand is a market leader in semi-synthetic penicillin and has a presence in therapeutic segments such as neurosciences, cardiovascular, anti-retrovirals, anti-diabetics, gastroenterology, cephalosporins and others. This project includes the creation of200jobs in an existing facility withinthe city limits in Durham, North Carolina. The jobsto be createdby the Company are withinthe category of investment emphasizedin the “Resolution Establishing an Economic Development Financial Assistance and Incentive Policy for Job Creation, Job Retention and Capital Investment” adopted by City Council on April 21, 2014 (“Resolution”). Through adoption of the Resolution, the City finds that the use of City funds to promote job creationwill increase taxable propertyand the business prospects of the City of Durham. The Companyrepresents the incentives proposed by this Agreement constitute a bonafide inducement for the Company to relocate and/or remain in the City of Durham, without which inducements the Company would be less likely to relocate and/or remain in the City. By authorizing the execution of this Contract, the City Council of the City of Durham finds (i) that in order to aid and encourage the creation of jobsin the city, it is necessary and desirable to provide an incentive to the Companyfor creating jobsinside the corporate limits of the City of Durham (as defined by the Durham City/County Planning Department on the date of the Contract), (ii) that the proposed expansion by the Company is a qualified business for job creationas defined by the Resolution and increases the business prospects and supports the taxable property of the City, contributes significantly to economic conditions in Durham, provides workers with continuing employment opportunities, diversifies the local economy, and (iii) that this Contract otherwise complies with the Resolution. THEREFORE, IT IS AGREED AS FOLLOWS: Sec. 1. Definitions. (a) “Capital Investment” –facility construction and improvements, including equipment, machinery, fiber and cable installation,required for the Projectand as defined under Section 3 of the Resolution, including the requirement that all qualifying property improvements be subject to City and County property taxes from the time when the Capital Investment is installed or constructed and continuing until the final incentive payment by the City is made. (b) “Certificate of Compliance” –the official document issued by the local governing authority certifying that a newly constructed or renovated building or structure is in compliance with applicable building codes, regulations and laws, such that said building or structure may be lawfully occupied. (c) “Contract End Date” –the last possible effective day of the life of the Contract, except for termination for other cause. (d) “Effective Date” –thedate this Contract is approved by City Council. (e) “Project” –refers to the activities to be performed by the Company under this Agreement according to Section 2,“Required Capital Investment and Job Creation” as necessary for the Company to be eligiblefor the City incentive payments described under Section 3, “City Incentive Payment Schedule” below. Contract Between AurobindoPharma U.S.A., Inc. and The City of Durham Regarding Incentives for Job CreationWithin the City Limits (f) “Qualified Job” –full-time,permanent positions filled by employees that Company has in its employ as of the date of its physical relocation to the City(if employees are relocated or transferred from outside the City of Durham), plus additional full-time, permanent employment positions that are created after the effective date of this Contract and retained for at least 1-year after creation, which pay a salary equal to or greater than the City’s livable wage rate (pursuant to Section 18-23 of the City Code), and which are evidenced by the Company’s quarterly wage reports of employee wagesfilings with the North Carolina Department of Commerce and documentation as necessary to establish such positions and employment for the applicable duration. Retention of all Qualified Jobs is cumulativeuntil the final City Incentive Payment is made. In other words, the first Qualified Job(s) created must be retained for the full period (more than the 1-year minimum, if necessary) until the finalCity Incentive Payment is madein orderto be counted as a Qualified Job. If the Company is already located in the City of Durham, any Company positions filled by employees already existing in the City of Durham prior to the execution of this Agreement shall not be counted as “Qualified Jobs”. So long as the Company creates and retains a position to the extent required hereunder, the Company may replace the employee filling such position from time to time in Company’s discretion. For all such positions and employment created after the date of Company’s relocation, such jobs shall be posted with the NCWorks Career Center in Durham, but the Company may also post such jobs in other, additional locations or by other methods. Except for the business travel requirements of Company, a Qualified Job under this Contract shall require that the employee holding such job to spend a majority(at least 51 percent)of his or her working time in the ordinary course of employment at the facility located within the city limitsin Durham, North Carolina. Sec. 2. Required Capital Investment and Job Creation. The City agrees to pay Company up to an overalltotal of two hundred thousand dollars ($200,000.00)in incentive payments for creation of 200 Qualified Jobs (“City Incentive Payments”) in accordance with the schedule provided under Section 3 below. Payments are conditioned upon the Company meeting the following requirements: (a) Minimum Capital Investment -the Company shall complete the installation or construction of at least $31,700,000.00in Capital Investment within three (3) years of City Council Approval of this Agreement. Completion of the minimum Capital Investment shall be evidenced by the following: (i) (Certificate of Compliance)-issuance ofa certificate of compliance (sometimes referred to as a Certificate of Occupancy)from the Durham City-County Inspections Department allowing occupancy or use of the facility in which the minimum Capital Investment was made;and (ii) (Accounting) -Company shall provideto the City a full and accurate accountingof Capital Investment expenditureswith such detail as the City may reasonably requireto verify that such expenditures qualify as Capital Investment; and, (iii) (Certification) -If required by the City, Company shall deliverto the City a written certification, in such form as the City reasonably requires, that the Company has satisfied all applicable requirements of this Agreement. (b) Job Creation Requirements –the Company shall create at least 200Qualified Jobs within three (3) years ofthe Effective Date. Company shall create anannual minimum number of Qualified Jobs as specified in Section 3 below to maintain eligibility for each City Incentive Payment. Creation of each Qualified Job is conditioned upon the following: (i) (Workforce Development Plan agreement) -Upon execution of this Agreement, the Companyshall complete, execute,and returnthe document entitled “Workforce Development Plan” (attached hereto as Attachment A) andsubstantiallycomply with its provisions. (ii) (Employment Records) -The number of Qualified Jobs created will be verified by using a listing of Qualified Job positions created. Listing(s)will contain unique position identifiers ,date of hire, date of termination if relevant and date of replacement for terminated positions, wages forthe Qualified Jobs,will be created by the Company, and must be attested toand notarizedby the Company. Verification of wages will be 2 Contract Between AurobindoPharma U.S.A., Inc. and The City of Durham Regarding Incentives for Job CreationWithin the City Limits based upon Company’s quarterly wage reports of employee wages as filed with the NC Department of Commerceand any other documentation or evidence as the City reasonably requiresto verify the creation of a Qualified Job as defined by this Agreement. (iii) (Healthcare Coverage) -For each Qualified Job, Company shall maintain, , minimum healthcare benefits for the employees hired into the QualifiedJob in which Company pays 100% of the premium for the employee and 50% of the premium for eligible dependents. The same healthcare plan options made available to the employees hired for the Qualified Jobs shall be equal to or better than the healthcare benefit options offered to all other Company employees. (c) Assurance by Company of Appropriate Treatment of Contractors and Lower Tier Subcontractors.-- In order to remain eligible for CityIncentivePayment, upon written request by the City deliveredin accordance with the notice provisions of this Agreement, Company shall provide to the City (i) lien waivers demonstrating thatall entities with whom it has contracted to construct all or any portion of the Capital Investment have been paid in full, or(ii) documentation demonstrating that a bona fide dispute over the satisfactory completion of the work to be performed exists and is in the process of being resolved in accordance with applicable law (collectively, the “Required Documentation”). Evidenceof bona fide disputes over the satisfactory completion of any work pursuant to any contract or subcontract shall include, but not be limited to, unsatisfied property or payment liens, pending lawsuits or unresolved contract claims made in writing. If Company fails to provide the Required Documentation following a request from the City, the City shall give the Company thirty (30) days written notice of its intent to suspendtheCityIncentivePayment. If the Company has not provided the Required Documentation at the end of this thirty (30) day period the City may suspend the City Incentive Payment. The City shall have no power to suspend the City Incentive Paymentdue to failures of contractors and subcontractors with whom the Company does not have a direct contractual relationship to comply with the terms of contracts to which the Company is not a party. Sec. 3. City Incentive Payment Schedule. The Company’s entitlement to payment from the City under this Agreement is conditioned upon the Company sending an invoice to the City, which documents the completion ofCapital Investment andcreation ofQualified Jobs pursuant to this Agreement. By complying with the requirements of Section 2 and all other applicable provisions of this Agreement, the Company shall be eligible to receive the City Incentive Payments according to the following payment schedule: CITY INCENTIVE INCENTIVE PAYMENT PAYMENT CONDITIONS** TIMINGOF PAYMENT PAYMENT YEAR AMOUNT Completion of minimum Capital The first business day following Investment of $31,700,000.00 January1stafter the first $200,000.00 YEAR 1 pursuant to Section 2(a)and anniversary datethat Company creationand cumulative retention complied with the payment of at least 200Qualified Jobs. conditionsfor Year 1.* * By way of example, if the Year 1 Payment Conditions are met on March 1, 2017, the Year 1 City Incentive Payment would be made on January2,2019(which is the first business day after January1after the 1st anniversary date of the completion of the Year 1 PaymentConditions). **No later than January 19, 2020, in additionto completion of the minimum Capital Investment,the Company must have achieved thecreation and cumulative retention of at least 200 Qualified Jobs. Sec 4. Job Postingand ReportingRequirements. Company shall comply with the job posting and reporting requirements of the Workforce Development Plan agreement attached hereto as Attachment 3 Contract Between AurobindoPharma U.S.A., Inc. and The City of Durham Regarding Incentives for Job CreationWithin the City Limits A. Sec.5. Contract End Date. Notwithstanding any other termination provision contained in this Contract, the City shall have no obligation to, and shall not, make any payment to the Company pursuant to this Agreement after December 31, 2022, upon which time the Contract shall terminate, if not terminated earlier. Addresses. The payments by the City pursuant to this Agreement shall be mailed to: Company contact Or to such other address as the Company may specify by written notice to the City. When a notice is required or permitted by this Contract, it shall be given by written notice to the City by delivery via first- class U.S. Mail or overnight courier delivery (such as Federal Express or United Parcel Service)or via facsimileto: Mr. Kevin Dick Director -Office of Economic and Workforce Development City of Durham 807E. MainSt., Suite 5-100 Durham, North Carolina 27701 [919-560-4986 Insert Facsimile Number] and to the Company by delivery via first-class U.S. Mail or overnight courier delivery (such as Federal Express or United Parcel Service) or via facsimile to: Company contact [Mailing/Courier address] [Facsimile number] Either party may change the address or facsimile number by delivering written notice of the change to the other party. Sec. 6. Change of Address. Date Notice Deemed Given. Any notice or other communication under this Contract shall be deemed given at the time of actual deliveryor expressly rejected by the recipient, if it is personally delivered or sent by fax. If the notice or other communication is sent by United States mail(postage pre-paid), it shall be deemed given upon the third calendar day following the day on which such notice or other communication is deposited with the United States Postal Service or upon actual delivery, whichever first occurs. Sec. 7. EEO Provisions. During the performance of this Agreement the Companyagrees as follows: (1)The Company shall abide by the terms of the Equal Employment Practices Act, N.C. Gen. Stat section 143- 422, et. seq.; (2) The Companyshall post in conspicuous places, available to employees and applicants for employment, notices setting forth such language as required under the Equal Employment Practices Act; (3) The Companyshall in all solicitations or advertisement for employees placed by or on behalf of the Company, state thatits hiring practices conform with the Equal Employment Practices Act; (4) In the event of the Company's noncompliance with the requirements of this Section 7 of the Agreement, the City may cancel, terminate, or suspend this Contract, in whole or in part. As used in this Section 7, subsection (4), the term “noncompliance” shall be determined by a court of competent jurisdiction before the City may cancel, terminate, or suspend this Contract; (5) Unless exempted by the City Council of the City of Durham, the Companyshall include these EEO provisions in every purchase order for goods to be used in performing this Contract and in every subcontract related to this Contract. Sec. 8. City Policy. THE CITY OPPOSES DISCRIMINATION ON THE BASIS OF RACE AND SEX AND URGES ALL OF ITS CONTRACTORS TO PROVIDE A FAIR OPPORTUNITY FOR MINORITIES AND WOMEN TO PARTICIPATE IN THEIR WORKFORCE AND AS 4 Contract Between AurobindoPharma U.S.A., Inc. and The City of Durham Regarding Incentives for Job CreationWithin the City Limits SUBCONTRACTORS AND VENDORS UNDER CITY CONTRACTS. Sec. 9. Default. Termination. Clawback Provision. (a) If the Company fails to fulfill any of its materialobligations under the Contract,the City may hold the Company in default and terminate this Agreement and make no further payments totheCompany. (b) If, however, any required certification or representation made by the Company isdetermined by the City to be materially false when madeand known to be false by the Company, the City may hold the Company in default and (i) terminate this Agreement and make no further payments to Company and (ii) recover all prior payments related totheallegedfalsified Capital Investment or Qualified Jobs. If, after removing said falsely represented CapitalInvestment or Qualified Jobs from the level of Capital Investment or Qualified Jobs required by the Contract, the Company fails to meet the thresholds required under this Agreement,the Company shall reimburse the City all prior payments made during that relevant period. The determination of the City that the Company has defaulted pursuant to this Section 9(b) may be challenged by the Company in a court of competent jurisdiction consistent with Section 13 below. If the Company does not deliverto the City the certification(s) and information required under Section 2, and does not seek payment under Section 2, the Company shall not be considered in default for failing to deliver the certification. The aforementioned clawback is intended to apply only in the case where the Company has knowingly provided such materially false certification. (c) In the event the Company shall fail to meet the target numbers set forth in this Agreement for the creation, relocation or retention of Qualified Jobs and (i) such failure is due to general economic conditions and (ii) the Company has otherwise previously qualified for certain payments hereunder, the City and the Company agree to enter into good faith negotiations to amend this Contract (with City Council approval, if necessary) in order to preserve the economic benefits and incentives created by this Agreement. Sec. 10. Agreement Subject to Resolution. This Agreement is made pursuant to the Resolution, and is subject to the procedures, limitations, and restrictions set forth therein. Sec. 11. Attachments. The following attachments are made a part of this Contract: Attachment A, “Workforce Development Plan,”containing 4 pages. Attachment B, “Durham-Based Business Plan,” containing 5 pages. In case of conflict between an attachment and the text of this Contract excluding the attachment, the text of this Contract shall control. Sec. 12 Indemnification. (a) To the maximum extent allowed by law, the Companyshall defend, indemnify, and save harmless Indemnitees from and against all Charges that arise in any manner from, in connection with, or out of this Contract as a result of acts or omissions of the Companythat may arise out of this Agreement. In performing its duties under this subsection “a,” the Companyshall at its sole expense defend Indemnitees with legal counsel reasonably acceptable to City. In no event shall the Company’s expenses exceed $64,500. (b) Definitions. As used in subsections “a” above and “c” below --“Charges” means claims, judgments, costs, damages, losses, demands, liabilities, duties, obligations, fines, penalties, royalties, settlements, and expenses (included without limitation within “Charges” are interest and reasonable attorneys' fees assessed as part of any such item). “Indemnitees” means City and its officers, officials, independent contractors, agents, and employees, excluding the Company. (c) Other Provisions Separate. Nothing in this section shall affect any warranties in favor of the City that are otherwise provided in or arise out of this Contract. This section is in addition to and shall be construed separately from any other indemnification provisions that may be in this Contract. (d) Survival. This section shall remain in force despite termination of this Contract (whether by expiration of the term or otherwise) and termination of the services of the Companyunder this Contract for one(1) year following such expiration or termination. (e) Limitations of the Company's Obligation. If this section is in, or is in connection with, a contract relative to the design, planning, construction, alteration, repair or maintenance of a building, structure, highway, road, appurtenance or appliance, including moving, demolition and excavating connected therewith, then subsection “a” above shall not require the Companyto indemnify or hold harmless Indemnitees against liability for damages arising out of bodily injury to persons or damage to 5 Contract Between AurobindoPharma U.S.A., Inc. and The City of Durham Regarding Incentives for Job CreationWithin the City Limits property proximately caused by or resulting from the negligence, in whole or in part, of Indemnitees. Notwithstanding the foregoing, in no event shall Companybe liable to Indemnitees hereunder to the extent of any negligence on the part of any Indemnitees or for any consequential, special or indirect damages. Sec.13. Choice of Law and Forum. This Contract shall be deemed made in Durham County, North Carolina. This Contract shall be governed by and construed in accordance with the law of North Carolina. The exclusive forum and venue for all actions arising out of this Contract shall be the North Carolina General Court of Justice, in Durham County. Such actions shall neither be commenced in nor removed to federal court. This section shall not apply to subsequent actions to enforce a judgment entered in actions heard pursuant to this section. Sec. 14. Waiver. No action or failure to act by the City or the Company shall constitute a waiver of any of their rights or remedies that arise out of this Contract, nor shall such action or failure to act constitute approval of or acquiescence in a breach thereunder, except as may be specifically agreed in writing. Sec. 15 Performance of Government Functions. Nothing contained in this Contract shall be deemed or construed so as to inany way estop, limit, or impair the City from exercising or performing any regulatory, policing, legislative, governmental, or other powers or functions. Sec.16. Severability. If any provision of this Contract shall be unenforceable, the remainder of this Contract shall be enforceableto the extent permitted by law. Sec. 17. Assignment. Successors and Assigns. Without the City's written consent, the Contractor shall not assign (which includes to delegate) any of its rights (including the right to payment) or duties that arise out of this Contract. The City Manager may consent to an assignment without action by the City Council. If this Contract is assigned, then unless the City otherwise agrees in writing, the assignee(s) of the Companyshall be subject to all of the City’s defenses and shall be liable for all of the Company’s duties that arise out of this Contract and all of the City’s claims that arise out of this Contract. Without granting the Companythe right to assign, it is agreed that the duties of the Companythat arise out of this Contract shall be binding upon it and its heirs, personal representatives, successors, and assigns. Sec. 18. Compliance with Law. In performing all of its obligations under the Contract, the Companyshall comply withall applicable laws. Sec.19. No Third Party Rights Created. This Contract is strictly intended for the benefit of the City and the Companyand not any other third party, person or entity. Nor shall any contractual or other rights of any kind arise under law as to any such third parties, persons or entities as to this Contract. Sec. 20. Principles of Interpretation and Definitions. In this Contract, unless the context requires otherwise: (1) The singular includes the plural and the plural the singular. The pronouns “it” and “its” include the masculine and feminine. References to statutes or regulations include all statutory or regulatory provisions consolidating, amending, or replacing the statute or regulation. References to contracts and agreements shall be deemed to include all amendments to them. The words “include,” “including,” etc. mean include, including, etc. without limitation. (2) References to a “Section” or “section” shall mean a section of this Contract. (3) “Contract” and “Agreement,” whether or not capitalized, refer to this instrument. (4) Titles of sections, paragraphs, and articles are for convenience only, and shall not be construed to affect the meaning of this Contract. (5) “Duties” includes obligations. (6) The word “person” includes natural persons, firms, companies, associations, partnerships, trusts, corporations, governmental agencies and units, and other legal entities. (7) The word “shall” is mandatory. (8) The word “day” means calendar day. Sec. 21. Modifications. Entire Contract. A modification of this Contract is not valid unless signed by both parties and otherwise in accordance with requirements of law. Further, a modification is not enforceable against the City unless the City Manager or a deputy or assistant City Manager signs it for the City. This Contract contains the entire Agreement between the parties pertaining to the subject matter of 6 Contract Between AurobindoPharma U.S.A., Inc. and The City of Durham Regarding Incentives for Job CreationWithin the City Limits this Contract. With respect to that subject matter, there are no promises, contracts, conditions, inducements, warranties, or understandings, written or oral, expressed or implied, between the parties, other than as set forth or referenced in this Contract. Sec. 22. City’s Manager’s Authority. To the extent, if any, the City has the power to suspend or terminate this Contract or the Company’s services under this Contract, that power may be exercised by City Manager or a deputy or assistant City Manager without City Council action. Sec. 23. No Joint Venture. Nothing in this Contract shall create a joint venture or partnership between the City and the Company. Sec. 24. E-Verify requirements. (a) If this contract is awarded pursuant to North Carolina General Statutes (NCGS) 143-129 –(i) the contractor represents and covenants that the contractor and its subcontractors comply with the requirements of Article 2 of Chapter 64 of the NCGS; (ii) the words "contractor," "contractor’s subcontractors," and "comply" as used in this subsection (a) shall have the meanings intended by NCGS 143-129(j); and (iii) the City is relying on this subsection (a) in entering into this contract. (b) If this contract is subject to NCGS 143-133.3, the contractor and its subcontractors shall comply with the requirements of Article 2 of Chapter 64 of the NCGS. Sec. 25. Iran Divestment Act Certification. The Contractor certifies that, if it submitted a successful bid for this contract, then as of the date it submitted the bid, the Contractor was not identified on the Iran List. If it did not submit a bid for this contract, the Contractor certifies that as of the date that this contract is entered into, the Contractor is not identified on the Iran List. It is a material breach of contract for the Contractor to be identified on the Iran List during the term of this contract or to utilize on this contract any subcontractor that is identified on the Iran List. In this Iran Divestment Act Certification section -- “Contractor” means the person entering into this contract with the City of Durham; and “Iran List” means the Final Divestment List – Iran, the Parent and Subsidiary Guidance List – Iran, and all other lists issued fromtime to time by the N.C. State Treasurer to comply with G. S. 143C-6A-4 of the N.C. Iran Divestment Act. IN WITNESS WHEREOF, the City and the Company have caused this Contract to be executed under seal themselves or by their respective duly authorized agents or officers. CITY OF DURHAM ATTEST: 7 Contract Between AurobindoPharma U.S.A., Inc. and The City of Durham Regarding Incentives for Job CreationWithin the City Limits ______________________________ By: ________________________________ Preaudit certificate 8 Contract Between AurobindoPharma U.S.A., Inc. and The City of Durham Regarding Incentives for Job CreationWithin the City Limits AUROBINDO PHARMA U.S.A., INC. By: _____________________________(SEAL) Title of officer: _______________________ (Affix corporate seal.) State of ____________________________ ACKNOWLEDGEMENT BY County of ________________________ AUROBINDO PHARMA U.S.A., INC. I, a notary public in and for the aforesaid county and state, certify that _______________________________________________________ personally appeared before me this day and stated that he or she is (strike through the inapplicable:) chairperson/ president/ chief executive officer/ vice-president/ assistant vice-president/ treasurer/ chief financial officer of AUROBINDO PHARMA U.S.A, INC., and that by authority duly given and as the act of the corporation, he or she signed the foregoing Contractwith the City of Durham and the corporate seal was affixed thereto. This the ______ day of ___________________, 20______. My commission expires: ________________________________________ ________________________ Notary Public 9 Contract Between AurobindoPharma U.S.A., Inc. and The City of Durham Regarding Incentives for Job CreationWithin the City Limits Attachment A Workforce Development Plan Project Restorative PLAN OBJECTIVE: The objective of this workforce development plan (“Plan”) is to establish a partnership between the NCWorks Career Center – Durham and Aurobindo Pharma U.S.A., Inc. (hereinafter referred to as “Business”) in which Business will utilize the NCWorks Career Center –Durham as a primary source for recruitment to maximize the placement of Durham residents for as many of the new jobs created by this project as practical. The Business has no obligation to hire referred candidates from the NCWorks Career Center. This Plan refers to new positions created as a result of the project and positions created during construction/renovation/redevelopment for project as applicable. NCWorks Career Center –Durham services are provided to the Business on a prepaid basis by revenue generated through taxes. This workforce development plan is referenced in the contract or agreement titled, ‘CONTRACT BETWEEN AUROBINDO PHARMA U.S.A., INC. AND THE CITY OF DURHAM REGARDING INCENTIVES FOR JOB CREATION WITHIN THE CITY LIMITS’, dated XXXXXX(the “Contract”) Defined terms used but not defined herein shall have the meanings ascribed thereto as provided in the Contract. PLAN EXECUTION: GENERAL TERMS: 1. Business will utilize NCWorks Career Center – Durham as a source for recruiting by notifying the NCWorks Career Center – Durham of specific job opportunities with Business during the life of the project once the need is identified. Business will notify the NCWorks Career Center – Durham of positions through a detailed job description (the NCWorks Career Center – 10