Exhibit 10.27

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

SUPPLY AGREEMENT

THIS SUPPLY AGREEMENT (this “Agreement”) is made this 13th day of June, 2011
(the “Effective Date”) between:

CYDEX PHARMACEUTICALS, INC., a Delaware corporation with offices at 10513 W.
84th Terrace, Lenexa, Kansas 66214 (“CyDex”); and

MERCK SHARP & DOHME CORPORATION, a New Jersey corporation with offices at One
Merck Drive, Whitehouse Station, NJ 08889-0100 (“Company”).

RECITALS

WHEREAS, CyDex is engaged in the business of developing and commercializing
novel drug delivery technologies designed to enhance the solubility and
effectiveness of existing and development-stage drugs;

WHEREAS, CyDex is the exclusive worldwide licensee of Captisol (defined below),
a [***] which is protected by certain patents and designed to enhance the
solubility and stability of drugs;

WHEREAS, Company desires to obtain a comprehensive license to use Captisol in
connection with its development and commercialization of the Compound (defined
below) and CyDex is willing to grant such license to Company under the terms and
conditions set forth herein; and

WHEREAS, CyDex desires to sell Captisol to Company, and Company desires to
purchase Captisol from CyDex for use in the Licensed Product (defined below), in
accordance with the terms and conditions contained herein;

NOW, THEREFORE, in consideration of the following mutual promises and other good
and valuable consideration, the receipt and sufficiency of which is
acknowledged, the parties, intending to be legally bound, agree as follows:

 

1. DEFINITIONS.

For the purposes of this Agreement, the following terms shall have the meanings
as defined below:

“Affiliate” means any entity directly or indirectly controlling, controlled by
or under common control with a party, control being the direct or indirect
ownership of at [***] of the stock or other equity interest entitled to vote
upon election of directors or persons performing similar functions.

 

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“cGMPs” means current good manufacturing practices for the methods to be used
in, and the facilities and controls to be used for, the manufacture, processing,
packing and holding of pharmaceutical excipients, all as set forth from time to
time by the U.S. Pharmacopoeia General Chapter <1078> Good Manufacturing
Practices For Bulk Pharmaceutical Excipients and International Pharmaceutical
Excipients Council’s IPEC/PQG GMP Guide For Pharmaceutical Excipients, and any
successors thereto.

“Captisol” means a [***] as specified in Exhibit B hereto.

“Captisol Data Package” means (a) all toxicology/safety and other relevant
scientific safety data owned, licensed or developed by CyDex and its Affiliates;
and (b) all toxicology/safety and other relevant scientific data owned, licensed
or developed by the licensees or sublicensees of CyDex or its Affiliates or
other third parties (to the extent permitted in the applicable license or other
agreements between CyDex and/or its Affiliates and such licensees, sublicensees
or other third parties), in each case on Captisol alone (and not in conjunction
with a product formulation).

“Captisol Improvement” means any technology or improvement related to Captisol,
whether or not patentable, that is developed during the Term by Company or its
Affiliates or Sublicensees, solely or jointly with a third party through use of
Captisol supplied hereunder. Captisol Improvement shall not include any Captisol
Information. For the avoidance of doubt, Captisol Improvement shall not include
any technology or improvement related to Captisol, whether or not patentable,
that was developed before the Term by CyDex or its Affiliates, solely or jointly
with Company, its Affiliates or a third party.

“Captisol Information” means any information solely related to Captisol that is
developed during the Term by Company or its Affiliates or Sublicensees, solely
or jointly with a third party, that would enhance a drug master file for
Captisol if incorporated therein.

“Captisol Patents” means the patents and patent applications (until such time as
such applications or any of them are denied, abandoned or issued into patents),
and any foreign cognates, divisional, continuation, continuation-in-part,
reissue, re-examination, extension, renewal, substitution, patent of addition,
provisional applications, confirmation patent, registration patent, pipeline
protection or supplementary protection certificate related thereto, that include
at least one claim relating to the composition, use in the relevant Product or
manufacture of a cyclodextrin, which at any time during the Term are owned by
CyDex or under which CyDex is licensed with the right to sublicense, excluding,
however, the Restricted Patent Rights.

“Claim” has the meaning specified in Section 10.1.

“Clinical Grade Captisol” means [***]. For clarity, Clinical Grade Captisol
shall meet the specifications set forth in Exhibit B.

“Commercial Grade Captisol” means [***]. For clarity, Commercial Grade Captisol
shall meet the specifications set forth in Exhibit B.

 

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“Commercial Launch Date” means, in any particular country, the first sale by
Company, its Affiliates or Sublicensees of the Licensed Product.

“Compound” means that certain pharmaceutical compound known as [***].

“Confidential Information” has the meaning specified in Section 8.1.

“Detailed Forecast” has the meaning specified in Section 3.2(b).

“Disclosing Party” has the meaning specified in Section 8.1 hereof.

“DMF” means a Drug Master File for Captisol, as filed as of the Effective Date,
or as hereafter updated from time to time during the Term, by CyDex with the
FDA.

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

“Generic Competition” has the meaning specified in Section 4.1(c)(ii) hereof.

“IND” means an Investigational New Drug application, as defined in the United
States Federal Food, Drug and Cosmetic Act and the regulations promulgated
thereunder, or similar application filed with an equivalent regulatory body in
another country.

“Indemnitee” has the meaning specified in Section 10.4.

“Indemnitor” has the meaning specified in Section 10.4.

“LCUA” means that certain Limited Clinical Use Agreement between CyDex and
Schering Corporation effective April 17, 2008, as amended.

“Laws” means all applicable federal, state, local or foreign statute or law and
shall be deemed also to include all rules and regulations promulgated thereunder
by any regulatory authorities in the Territory, unless context requires
otherwise. With respect to cGMPs, Laws shall also include guidance documents
formally promulgated by the governmental agency with jurisdiction over the
manufacture of Captisol. Any reference to a particular law or regulation will be
interpreted to include any revision of or successor to such statute, law, rule
or regulation regardless of how it is numbered or classified.

“Licensed Product” means a human drug product which is formulated as a
combination of the active pharmaceutical ingredient [***] and Captisol. For
clarity, the Licensed Product shall not include any product which is a
combination product incorporating the Compound with any other active
pharmaceutical ingredient.

“Losses” has the meaning set forth in Section 10.1.

“Marketing Approval” means final approval of an NDA by the FDA for the United
States, or final approval of a comparable document filed with an equivalent
health regulatory authority in any other country or in the European Union (using
the centralized process or mutual recognition), including all required
marketing, pricing or reimbursement approvals.

 

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“NDA” means a New Drug Application, as defined in the United States Federal
Food, Drug and Cosmetic Act and the regulations promulgated thereunder, or
similar application filed with an equivalent regulatory body in another country.

“Notice of Default” has the meaning specified in Section 13.2.

“Notice of Termination” has the meaning specified in Section 13.2.

[***]

“Purchase Volume Limitations” has the meaning specified in Section 3.2(c).

“Receiving Party” has the meaning specified in Section 8.1.

“Restricted Patent Rights” shall mean the [***], as set forth in Exhibit D.

“Q1”, “Q2, “Q3”, and “Q4” have the meanings specified in Section 3.2(b).

“Research Grade Captisol” means [***], but which meets CyDex’s specifications
for Research Grade Captisol.

“SEC” has the meaning specified in Section 8.3.

“Specifications” means the specifications for Captisol set forth in Exhibit B
hereto, as such may be amended from time to time pursuant to Section 3.4.

“Study” has the meaning specified in Section 6.3.

“Sublicensees” means parties to whom Company and/or its Affiliates has
sublicensed rights granted to Company and/or its Affiliates under this
Agreement, as permitted under this Agreement.

“Term” has the meaning specified in Section 13.1.

“Testing Methods” has the meaning specified in Section 3.5(a).

“Third-Party Manufacturer” has the meaning specified in Section 3.6.

“Territory” means the entire world, excluding, however, any country during such
time that a Restricted Patent Right is valid and enforceable in such country, as
follows: [***].

“Volume Threshold” has the meaning specified in Section 3.1.

 

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2. GRANT OF RIGHTS.

2.1 License Grants from CyDex to Company.

(a) Licenses. Subject to the terms and conditions of this Agreement, during the
Term, CyDex hereby grants to Company and its Affiliates:

 

  (i) an exclusive license in the Territory, even with respect to CyDex, under
the Captisol Patents, with right to sublicense (subject to Sections 2.3 and
2.4), to make, use, sell, offer to sell, promote, market, distribute, package,
import, export, develop, test, study and otherwise commercially exploit any
Licensed Product and otherwise engage in activities relating to the regulatory
approval of any Licensed Product; and

 

  (ii) a non-exclusive, worldwide license under CyDex’s right in and to:

 

  (A) all Captisol related toxicology/safety and other relevant scientific
safety data owned, licensed or developed by CyDex and its Affiliates;

 

  (B) all Captisol related toxicology/safety and other relevant scientific data
owned, licensed or developed by the licensees or sublicensees of CyDex or its
Affiliates or other third parties (to the extent permitted in the applicable
license or other agreements between CyDex and/or its Affiliates and such
licensees, sublicensees or other third parties); and

 

  (C) any drug master file related to Captisol;

to engage in any activity related to regulatory approval of any Licensed
Product. CyDex shall deliver to Company, or provide Company access to, the
information and files described in (A), (B) and (C) above at Company’s request,
which Company may use within the scope of the license.

(b) Scope of Licenses. For the avoidance of doubt, Company shall have no license
to the Captisol Patents outside of the Territory and, except for activities
deemed non-infringing of patents under national law, Company hereby agrees not
to otherwise make, use, sell, offer to sell, promote, market, distribute,
package, import, export, develop, test, study and otherwise commercially exploit
any Licensed Product or Captisol in [***]. Without limiting the generality of
the foregoing, CyDex grants no rights to Company to manufacture, import (except
in association with supply of Captisol under this Agreement), sell or offer for
sale bulk Captisol. CyDex represents and warrants to Company that the licenses
granted under Section 2.1 confer the only rights enforceable by CyDex that are
required by CyDex for Company to exploit Captisol purchased under this Agreement
within the Territory. Such licenses pursuant to this Section 2.1 shall be
nontransferable (except with respect to the sublicense provisions of Sections
2.3 and 2.4 and the assignment provision in Section 14.15); Company may not
sublicense any rights hereunder except as expressly set forth in Sections 2.3
and 2.4 below. To the extent that any patent rights are licensed to CyDex or its
Affiliates by a third party on a non-exclusive basis, any exclusive license
granted to Company shall be exclusive as to CyDex and non-exclusive as to any
third party. Other than for investigations relating to quality issues, Company
shall not

 

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analyze Captisol in an attempt to reverse engineer, deconstruct or in any way
determine the structure or composition of Captisol supplied under this
Agreement, nor shall the Company develop, test, study or research Captisol
supplied under this Agreement other than in combination with the active
pharmaceutical ingredient [***] for the purpose of making, using, selling,
offering to sell, promoting, marketing, distributing, packaging, importing,
exporting, and otherwise commercially exploiting any Licensed Product. CyDex
shall not be liable to Company for violation of Company’s exclusive rights
hereunder by parties which are not Affiliates of CyDex except where CyDex or any
Affiliate has granted any license or supplied any material in conflict with
Company’s exclusive rights and/or CyDex’s obligations of exclusivity hereunder.
Company acknowledges and agrees that (i) CyDex shall not be required to obtain
patent rights in the Territory within the scope of the Captisol Patents,
(ii) subject to Section 2.5(a) hereof, CyDex shall not be restricted in making
sales of Captisol or licensing rights to other parties to the extent that such
sales and licenses do not conflict with the exclusive license grants and supply
exclusivity obligations hereunder.

2.2 Grant of Licenses and Option from Company to CyDex. Company hereby grants to
CyDex:

 

  (i) License for Captisol Information. A nonexclusive, transferable, perpetual,
worldwide and royalty-free license, with the right to grant sublicenses (through
multiple tiers of sublicensees), under Company’s and its Affiliates’ and
Sublicensees’ rights in and to Captisol Information, to use Captisol Information
for the sole purpose of incorporation of Captisol Information into any drug
master file for Captisol;

 

  (ii) Option to Negotiate. An option, exercisable by written notice to Company
within [***] after notice of the development of any Captisol Improvement is
provided by Company to CyDex pursuant to this Section 2.2, to negotiate with
Company for a period of [***] after Company’s receipt of the option exercise
notice, for a nonexclusive, transferable, perpetual, worldwide and royalty-free
license, with the right to grant sublicenses (through multiple tiers of
sublicensees), under Company’s and its Affiliates’ and Sublicensees’ rights in
and to such Captisol Improvement, to develop, make, have made, use, market,
distribute, import, sell and offer for sale Captisol and products formulated
with Captisol other than products comprising Company proprietary materials (for
clarity, Company is under no obligation to grant any license to CyDex under this
Section 2.2(ii)); and

Company shall provide prompt notice (within [***]) of the development of any
Captisol Information or Captisol Improvement. Information relating to Captisol
Improvements shall be deemed Confidential Information of Company.

2.3 Sublicensing. Company shall have the right to grant sublicenses to its
Affiliates and licensees of the Licensed Product (such non-Affiliate
sublicensees which hold a Marketing Approval for the Licensed Product are
collectively referred to herein as “Sublicensees”) under the licenses granted to
Company pursuant to Section 2.1; provided that Sublicensees shall first enter
into an agreement reasonably satisfactory to CyDex (such agreement naming CyDex
as an intended third-party beneficiary) with Company pursuant to which such
Sublicensee shall acknowledge and agree to observe and be bound by the
applicable restrictions set forth in this

 

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Agreement. Other than as specifically provided in and this Section 2.3 and
Section 2.4, Company shall not have the right to grant sublicenses to any third
party under the licenses granted pursuant to Section 2.1, provided, however,
that Company may grant to any party in the Licensed Product supply chain
(beginning from Company’s receipt of Captisol to the end user of the Licensed
Product) a sublicense under the licenses granted pursuant to Section 2.1 to use,
sell, offer to sell, promote, market, distribute, package, import or export any
Licensed Product.

2.4 Contracting. Company and its Affiliates may manufacture the Licensed Product
(but not the bulk Captisol), or contract the manufacture of the Licensed Product
(but not the manufacture of bulk Captisol) with non-Affiliate third party
manufacturers upon notification to CyDex in writing of Company’s or any of its
Affiliate’s intent to do so (such notice to include the identity and location of
the proposed third party manufacturers). To the extent Company or its Affiliates
engage a third party manufacturer for the Licensed Product, Company or any of
its Affiliates shall be permitted under this Agreement to grant any such third
party manufacturer a sublicense under the licenses granted to Company pursuant
to Section 2.1 solely for such purposes; provided that any such third party
manufacturer shall enter into an agreement reasonably satisfactory to CyDex
(such agreement naming CyDex as an intended third-party beneficiary) with
Company pursuant to which such third party manufacturer shall acknowledge and
agree to observe and be bound by the applicable restrictions set forth in this
Agreement for the production of Licensed Product.

2.5 Exclusivity.

(a) CyDex Commitment. During the Term, CyDex agrees (i) to supply all of
Company’s and its Affiliates’ requirements of Captisol for the Licensed Product
on the terms set forth herein, and (ii) that neither CyDex nor its Affiliates
shall sell or otherwise transfer, nor facilitate the sale or other transfer of,
any [***] to [***] for [***], provided, however, that CyDex may sell [***].

(b) Company Commitment. During the Term, Company agrees that Company and its
Affiliates shall not, directly or indirectly, [***].

 

3. MANUFACTURE AND SUPPLY OF CAPTISOL.

3.1 Purchase of Captisol.

(a) Purchase and Supply of Requirements. Company agrees that, during the Term,
Company and its Affiliates and Sublicensees shall purchase one hundred percent
(100%) of Company’s and its Affiliates’ and Sublicensees’ requirements for
Captisol for use in the formulation of Licensed Product for commercial sale
exclusively from CyDex. This Agreement does not grant Company, its Affiliates or
Sublicensees the right under the rights licensed hereunder, to manufacture (or
have manufactured on their behalf) Captisol. CyDex agrees that CyDex shall
produce (or have produced for it) and sell to Company one hundred percent
(100%) of Company’s and its Affiliates’ and Sublicensees’ requirements for
Captisol for use in the formulation of Licensed Product for commercial sale,
during the Term and subject to the provisions of this Agreement and provided
that, and notwithstanding anything to the contrary in this Agreement, in no
event shall CyDex be obligated to supply to Company or its Affiliates or
Sublicensees more than an aggregate quantity of [***] of Captisol per year (the
“Volume

 

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Threshold”). Purchases of Captisol may include Research Grade Captisol, Clinical
Grade Captisol and/or Commercial Grade Captisol. Company may place orders for
Captisol on behalf of its Affiliates and Sublicensees; provided, however that:
(a) Company shall instruct CyDex as to the location for the shipment thereof;
(b) Company shall guarantee payment to CyDex of all amounts payable with respect
thereto; and (c) if Company requests that CyDex deliver such orders to Company
for re-delivery thereof by Company to its Affiliates or Sublicensees, Company
shall comply with all applicable laws, rules and regulations applicable to the
transportation of Captisol from Company to its Affiliates and Sublicensees.

(b) [***]. Except for the obligations associated with the Detailed Forecasts
that may be issued at Company’s sole discretion, the parties acknowledge and
agree that Company and its Affiliates are [***].

3.2 Supply Terms.

(a) Long-term Forecast. No later than [***] prior to the anticipated Commercial
Launch Date by Company or its Affiliates or Sublicensees of a Licensed Product
in any particular country, Company shall provide CyDex with a forecast setting
forth Company’s estimate of the required quantities of Captisol for each of the
following [***]. Such long-term forecast shall thereafter be updated by Company
at least once every [***]. It is understood and agreed that such long term
forecasts shall not constitute commitments to take delivery of Captisol.

(b) Binding Detailed Forecast. At least [***] prior to the first purchase order
submitted by Company for Captisol for formulation of a Licensed Product intended
for commercial sale, Company shall deliver to CyDex a detailed rolling forecast
setting forth Company’s requirements and anticipated delivery schedules for
Captisol for each [***] during the [***] period commencing on the first day of
the [***] during which the first requested delivery date of Captisol is
specified in such purchase order (the “Detailed Forecast”). For purposes of this
Agreement, a [***] means the [***]. The Detailed Forecast shall thereafter be
updated by Company quarterly on a rolling basis, no later than the last day of
each [***], so that each [***] CyDex shall have been provided with a rolling
Detailed Forecast for each [***] during the [***] period commencing on the first
day of the next [***] following the date on which such Detailed Forecast is
submitted. The Detailed Forecast shall be firm and binding on Company, subject
to permissible variances set forth in Section 3.2(c) below. If Company fails to
provide any updated Detailed Forecast in accordance with this Section 3.2(b),
the Detailed Forecast last provided by Company shall be deemed to be Company’s
binding Detailed Forecast for the next succeeding [***].

(c) Detailed Forecast Variances.

(i) For the First Year. During the first [***] in which Company orders Captisol
for use in Licensed Products intended for commercial sale, each Detailed
Forecast may modify the amount of Captisol estimated in the previous Detailed
Forecast in accordance with the following limitations (the “Purchase Volume
Limitations”):

(A) for the [***] covered by such updated Detailed Forecast, and regardless of
the quantity of Captisol forecasted in the Detailed Forecast, no change

 

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in excess of a [***] volume increase or decrease may be made to the forecast
provided for the [***] in the immediately preceding Detailed Forecast without
the prior express written consent of CyDex;

(B) for the [***] covered by such updated Detailed Forecast, and regardless of
the quantity of Captisol forecasted in the Detailed Forecast, no change in
excess of a [***] volume increase or decrease may be made to the forecast
provided for the [***] in the immediately preceding Detailed Forecast without
the prior express written consent of CyDex; and

(C) for the [***] covered by such updated Detailed Forecast, and regardless of
the quantity of Captisol forecasted in the Detailed Forecast, no change in
excess of a [***] volume increase or decrease may be made to the forecast
provided for the [***] in the immediately preceding Detailed Forecast without
the prior express written consent of CyDex.

(ii) For Subsequent Years. After the first [***] in which Company orders
Captisol for use in a Licensed Product intended for commercial sale, the
Purchase Volume Limitations shall be determined in accordance with the
following:

(A) for the [***] covered by such updated Detailed Forecast, and regardless of
the quantity of Captisol forecasted in the Detailed Forecast, no change in
excess of a [***] volume increase or decrease may be made to the forecast
provided for the [***] in the immediately preceding Detailed Forecast without
the prior express written consent of CyDex;

(B) for the [***] covered by such updated Detailed Forecast:

 

  (1) if the quantity of Captisol forecasted in the [***] of the immediately
preceding Detailed Forecast is less than [***], then no change in excess of a
[***] volume increase or decrease may be made to the forecast provided for the
[***] of the in the immediately preceding Detailed Forecast without the prior
express written consent of CyDex; and

 

  (2) if the quantity of Captisol forecasted in the [***] of the immediately
preceding Detailed Forecast is equal to or greater than [***], then no change in
excess of a [***] volume increase or decrease may be made to the forecast
provided for the [***] in the immediately preceding Detailed Forecast without
the prior express written consent of CyDex.

(C) for the [***] covered by such updated Detailed Forecast:

 

  (1) if the quantity of Captisol forecasted in the [***] of the immediately
preceding Detailed Forecast is less than [***] , then no change in excess of a
[***] volume increase or decrease may be made to the forecast provided for the
[***] in the immediately preceding Detailed Forecast without the prior express
written consent of CyDex; and

 

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  (2) if the quantity of Captisol forecasted in the [***] of the immediately
preceding Detailed Forecast is equal to or greater than [***], then no change in
excess of a [***] volume increase or decrease may be made to the forecast
provided for the [***] in the immediately preceding Detailed Forecast without
the prior express written consent of CyDex.

In each case where CyDex’s consent is required for a change, CyDex’s consent may
be conditioned on such payment or other terms as CyDex may require.

(d) Purchase Orders. Together with each Detailed Forecast provided under
Section 3.2(b), Company shall issue a purchase order to CyDex for Commercial
Grade Captisol to be delivered to Company during the next [***] following the
date on which such Detailed Forecast is submitted (for [***] delivery to Company
consistent with the Detailed Forecast). Notwithstanding any other provision of
the Agreement, CyDex shall not be required to deliver Captisol on a date less
than [***] from the date that the relevant purchase order is submitted. Each
purchase order, for all grades of Captisol, shall specify: (i) the grade of
Captisol ordered (i.e., Commercial Grade Captisol, Clinical Grade Captisol or
Research Grade Captisol); (ii) quantities of Captisol to be delivered;
(iii) delivery dates; and (iv) shipping instructions. CyDex shall use all
commercially reasonable efforts to accommodate the quantities and delivery dates
requested in the purchase order; provided, however, that (i) the purchase order
is received by CyDex at least [***] prior to the requested delivery date for
Captisol, and (ii) the quantities are within the Purchase Volume Limitations. No
purchase order shall be binding upon CyDex until accepted by CyDex in writing;
provided that CyDex shall accept or reject Company’s purchase order in writing
within [***] after CyDex’s actual receipt of each purchase order. A failure to
reject Company’s purchase order within such [***] of actual receipt of the
purchase order will be deemed an acceptance by CyDex of the purchase order.
Acceptance of the purchase order shall obligate CyDex to comply with the
delivery specifications set forth therein, including Captisol quantities,
delivery locations and delivery dates. If CyDex rejects a purchase order issued
by Company or its Affiliates that (i) is received by CyDex at least [***] prior
to the requested delivery date, and (ii) requests quantities of Captisol within
the Purchase Volume Limitations, then Company shall bear no responsibility nor
liability for any resulting failure to meet Company’s obligations associated
with the Detailed Forecasts. If any purchase order or other document submitted
by Company hereunder or any other document passing between the parties contains
terms or conditions in addition to or inconsistent with the terms of this
Agreement, the terms of this Agreement shall control and prevail and such
additional or inconsistent terms are hereby expressly rejected.

3.3 Delivery. CyDex shall deliver to Company or Company’s designee each order of
Captisol, packed for shipment in accordance with CyDex’s customary practices and
the Specifications, FCA (Incoterms 2000) CyDex’s production point or storage
facilities. Title and risk of loss and/or damage to Captisol shall pass to
Company upon delivery of Captisol to Company or Company’s designee at CyDex’s
production point or storage facilities. CyDex will use commercially reasonable
efforts to include, in the next shipment of Captisol to Company, any quantities
ordered pursuant to an accepted purchase order but not delivered at Company’s
discretion.

3.4 Modified Specifications. CyDex shall have the right to change the
Specifications from time to time during the Term. In such event, CyDex shall
provide to Company at least

 

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[***] written notice of such change, which shall include information detailing
the purpose for and elements of such change. Company shall cooperate with CyDex
to have such change approved by all regulatory agencies having jurisdiction in
the Territory at CyDex’s expense. In addition, if any regulatory agency having
jurisdiction requires CyDex to implement any changes to the Specifications,
CyDex shall use all reasonable efforts to make such changes. If any change in
the Specifications required by a regulatory agency necessitates changes to the
terms of this Agreement, the parties shall negotiate such changes in good faith.
All direct costs associated with a Specification change shall be borne by CyDex,
provided, however, if a regulatory agency requires a change to the
Specifications where such change is specific to Captisol as implemented in the
Licensed Product, then Company shall be responsible for the costs incurred to
generate such unique, modified Specifications. At Company’s request, and if the
change in Specification is discretionary for CyDex and not required by a
regulatory agency, CyDex shall continue to supply Captisol meeting the
pre-change Specification for up to [***] after Company’s receipt of written
notice of such change.

3.5 Change Control Notifications. CyDex shall comply with the notification
obligations set forth in the External Supplier Process Change Agreement Form and
associated instructions attached hereto as Exhibit E.

3.6 Quality Control; Acceptance and Rejection.

(a) Quality Control. CyDex shall conduct or have conducted quality control
testing of Captisol prior to shipment in accordance with the Specifications and
other CyDex-approved quality control testing procedures (the “Testing Methods”).
CyDex shall retain or have retained accurate and complete records pertaining to
such testing, as well as samples (at least twice the quantity required to
perform the full suite of Testing Methods) from each lot of Captisol shipped to
Company, for at least through the expiration date of such Captisol [***] or
longer if required by Law. Each shipment of Captisol hereunder shall be
accompanied by a certificate of analysis for each lot of Captisol therein.

(b) Acceptance Testing. Company shall have a period of [***] from the date of
receipt to test or cause to be tested Captisol supplied under this Agreement
(“Acceptance Testing Period”). The Acceptance Testing Period may be extended for
an additional [***], for a total of [***] from the date of Company’s receipt of
the Captisol, so long as Company does not subject such Captisol to improper
storage conditions that cause material degradation of the Captisol. Company or
its designee shall have the right to reject any shipment of Captisol that does
not conform with the Specifications at the time of delivery pursuant to
Section 3.3 hereof when tested in accordance with the Testing Methods. All
shipments of Captisol shall be deemed accepted by Company unless CyDex receives
written notice of rejection from Company within such Acceptance Testing Period
describing the reasons for the rejection. Once a delivery of Captisol is
accepted or deemed accepted hereunder, Company shall have no recourse against
CyDex in the event Captisol is subsequently deemed unsuitable for use for any
reason, except (i) as provided in Section 10 below, or (ii) in the case of
Captisol that is not fit for use in humans after the Acceptance Testing Period
due to a latent defect in such Captisol caused by CyDex, its employees or
agents.

(c) Confirmation. After its receipt of a notice of rejection from Company
pursuant to Section 3.6(b) above, CyDex shall notify Company as soon as
reasonably practical

 

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(but no later than [***] after receipt of Company’s rejection notice) whether it
accepts Company’s basis for rejection and CyDex may perform its own testing at
its own cost to evaluate whether such rejection was necessary or justified. If
the parties are unable to agree as to whether a shipment of Captisol supplied by
CyDex or its Third-Party Manufacturer hereunder meets the Specifications, such
question shall be submitted to an independent quality control laboratory
mutually agreed upon by the parties. The findings of such independent laboratory
shall be binding upon the parties. The cost of the independent quality control
laboratory shall be borne by the party whose results are shown by such
laboratory to have been incorrect.

(d) Return or Destruction of Rejected Shipments. Company may not return or
destroy any batch of Captisol until it receives written notification from CyDex
that CyDex does not dispute that the batch fails to meet the Specifications.
CyDex will indicate in its notice either that Company is authorized to destroy
the rejected batch of Captisol or that CyDex requires return of the rejected
Captisol. Upon written authorization from CyDex to do so, Company shall promptly
destroy the rejected batch of Captisol and provide CyDex with written
certification of such destruction. Upon receipt of CyDex’s request for return,
Company shall promptly return the rejected batch of Captisol to CyDex. In each
case, CyDex will reimburse Company for the documented, reasonable costs
associated with the destruction or return of the rejected Captisol.

(e) Refund or Replacement. Company shall not be required to pay any invoice with
respect to any shipment of Captisol properly rejected pursuant to this
Section 3.5. Notwithstanding the foregoing, Company shall be obligated to pay in
full for any rejected shipment of Captisol that is subsequently determined to
meet the Specifications in all material respects, irrespective of whether
Company has already paid CyDex for a replacement shipment. CyDex shall, upon
acceptance of Company’s basis of rejection or other confirmation that such
shipment failed to meet the Specifications, at Company’s sole discretion and
direction either: (i) issue a refund or credit equal to the purchase price paid,
taxes paid and shipping costs with respect to such rejected shipment within
[***] of Company’s request; or (ii) replace such rejected shipment at no
additional cost (beyond the total cost, including delivery, for the rejected
shipment paid or owed by Company to CyDex) to Company, with such replacement to
be shipped to Company in accordance with Company’s instructions and schedule
(or, if CyDex in good faith cannot meet Company’s schedule, as soon as
reasonably practical). Company acknowledges and agrees that, except for the
warranty provisions set forth in Section 9.2 below and the indemnification
obligations set forth in Section 10 below, Company’s rights to a refund or
credit for or to receive replacement of properly rejected shipments of Captisol
hereunder shall be Company’s sole and exclusive remedy, and CyDex’s sole
obligation, with respect to non-conforming Captisol delivered hereunder which
has not been used in the manufacture of the Licensed Product.

(f) Exceptions. Company’s rights of rejection, return, refund and replacement
set forth in this Section 3.6 shall not apply to any Captisol that is
non-conforming due to damage caused by (i) Company, its Affiliates or
Sublicensees or their respective employees or agents, including but not limited
to, misuse, neglect, improper storage, transportation or use beyond any dating
provided or (ii) events subsequent to delivery of such Captisol to the carrier
at the point of origin, including but not limited to any damage caused

 

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thereafter by accident, fire or other hazard; and CyDex shall have no liability
or responsibility to Company with respect thereto.

3.7 Facilities and Inspections. Without limiting CyDex’s responsibility under
this Agreement, CyDex shall have the right at any time to satisfy its supply
obligations to Company hereunder either in whole or in part through arrangements
with third parties engaged to perform services or supply facilities or goods in
connection with the manufacture or testing of Captisol (each, a “Third-Party
Manufacturer”). CyDex shall give Company prior written notice of any such
arrangement. The parties hereby agree that [***] is a Third-Party Manufacturer
as of the Effective Date of this Agreement. CyDex shall permit no more than
[***] of Company’s authorized representatives, during normal working hours and
upon reasonable prior notice to CyDex but in no event less than [***] prior
notice, to inspect that portion of all CyDex facilities utilized for the
manufacture, preparation, processing, storage or quality control of Captisol or
such facilities of any Third-Party Manufacturer, no more frequently than [***]
per calendar year. If such inspection is of the facilities of a Third-Party
Manufacturer, Company shall pay [***]. Company’s authorized representatives
shall be accompanied by CyDex personnel at all times, shall be qualified to
conduct such manufacturing audits, shall comply with all applicable rules and
regulations relating to facility security, health and safety, and shall execute
a written confidentiality agreement with terms at least as restrictive as those
set forth in Section 8 hereof. In no event shall any such manufacturing audit
exceed [***] in duration. Company shall ensure that its authorized
representatives conduct each manufacturing audit in such a manner as to not
interfere with the normal and ordinary operations of CyDex or its Third-Party
Manufacturer. Except as expressly set forth in this Section 3.6, neither Company
nor its Affiliates, Sublicensees or their respective employees or
representatives shall have access to CyDex’s facilities or the facilities of any
Third-Party Manufacturer.

3.8 Inability to Supply.

(a) Notice. CyDex shall notify Company if CyDex is unable to supply the quantity
of (i) Commercial Grade Captisol ordered by Company in accordance with the
Purchase Volume Limitations set forth in Section 3.2(c) or (ii) Research Grade
Captisol or Clinical Grade Captisol ordered by Company as set forth in
Section 3.2(d) above: (1) within [***] after CyDex’s receipt of a purchase order
from Company as provided in Section 3.2(d); or (2) immediately upon becoming
aware of an event of force majeure or any other event that would render CyDex
unable to supply to Company the quantity of Captisol that CyDex is required to
supply hereunder.

(b) Allocation. If CyDex is unable to supply to Company the quantity of Captisol
that CyDex is required to supply hereunder, CyDex (i) shall allocate its
available Captisol among Company and any other purchasers of Captisol with which
CyDex then has an on-going contractual relationship, in proportion to the
quantity of Captisol for which each of them has orders pending at such time and
(ii) shall use commercially reasonable efforts to alleviate supply delays. The
supply allocation provided in this Section 3.8(b) and the alternative supplier
provisions of Sections 3.8(c) and (d) below shall be CyDex’s sole obligation and
Company’s sole and exclusive remedy for any supply shortage.

(c) Supply Shortfall and Risk Management. If CyDex believes that it will be
unable to supply to Company with the quantity of Captisol respectively specified
below,

 

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properly forecasted and ordered by Company (and provided such order was within
the Purchase Volume Limitations) in accordance with this Agreement, for the
continuous period respectively specified below (a “Supply Shortfall”):

 

Period of Time

   Quantity that can be
Supplied by CyDex  

[***]

     [***]   

[***]

     [***]   

[***]

     [***]   

[***]

     [***]   

then CyDex shall immediately provide written notice to Company of the Supply
Shortfall. In the event of a Supply Shortfall:

 

  (i) [***]

 

  (ii) [***]

 

  (iii) [***]

CyDex will use commercially reasonable efforts to develop, update and implement
a full risk mitigation plan, including full disaster recovery plan. This plan
will be made available to Company, conditional upon subcontractor permitting
Company access to risk mitigation plans.

(d) Direct Supply from Third Party Manufacturer. In the event that the supply
shortfall is caused by the bankruptcy or other financial distress experienced by
CyDex, the parties agree that Company may purchase its requirements of Captisol
for the Licensed Product directly from The Hovione Group or other Third Party
Manufacturer until the expiration of the Term for use in accordance with the
terms of this Agreement.

 

4. COMPENSATION.

4.1 Payments and Royalties for Licenses.

(a) [***]

[***]

 

[***]

     [***]   

[***]

     [***]   

[***]

     [***]   

[***]

     [***]   

[***]

     [***]   

[***]

[***]

 

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4.2 Pricing for Captisol.

(a) Pricing. The purchase prices for Captisol are as specified in Exhibit C
attached hereto. CyDex reserves the right to increase the purchase prices set
forth in Exhibit C on [***], and every [***] hereafter during the Term, by
written notice to Company, by a percentage equal to the [***]. The minimum order
for Commercial Grade Captisol shall be in [***] increments. Notwithstanding the
foregoing, if Company fails to order for any [***] a quantity of Commercial
Grade Captisol to be delivered during such [***] that is equal to or greater
than the quantity of Commercial Grade Captisol Company is obligated to purchase
pursuant to the applicable Detailed Forecast (the difference between the
quantity of Commercial Grade Captisol Company is obligated to purchase in [***]
pursuant to the applicable Detailed Forecast and the amount of Commercial Grade
Captisol that Company actually orders in [***], the “Shortfall”), then provided
that CyDex has used commercially reasonable efforts to mitigate, Company agrees
to reimburse CyDex for the cost of any raw materials and supplies acquired or
used in anticipation of supplying Company with such Shortfall to the extent that
such raw materials and supplies cannot be redeployed to other projects and any
resulting Commercial Grade Captisol cannot be resold to other customers.

(b) Invoicing; Payment. CyDex shall invoice Company upon shipment of each order
of Captisol. All invoices shall be sent to the address specified in the
applicable purchase order, and each invoice shall state the purchase price for
Captisol in such shipment, plus any insurance, taxes, shipping costs or other
costs incidental to such purchase or shipment initially paid by CyDex but to be
borne by Company hereunder; provided, however, that if such insurance, taxes,
shipping costs or other costs incidental to such purchase or shipment initially
paid by CyDex but to be borne by Company are not known at the time CyDex
invoices Company for the purchase price for the Captisol ordered by Company,
CyDex may invoice such costs at a later date. Payment of such invoices shall be
made within [***] after the date of Company’s receipt of an undisputed invoice
at the address specified in the applicable purchase order, except in the event
of a good faith rejection of a delivery under Article 3.5 above, in which case
payment shall be made within [***] after such order is confirmed to be in
compliance with the Specifications in accordance with Section 3.5(c) above.

4.3 Currency. All amounts due hereunder are stated in, and shall be paid in,
U.S. dollars.

4.4 Taxes. All amounts due hereunder exclude all applicable sales, use, and
other taxes, and Company will be responsible for payment of all such taxes
(other than taxes based on CyDex’s income), arising from the payment of amounts
due hereunder.

4.5 Late Payments. Unpaid balances shall accrue interest, from due date until
paid, at a rate equal to the lesser of (i) [***], or (ii) the maximum rate
permitted under applicable law. If any amount properly invoiced and due
hereunder and not subject to a reasonable, good-faith dispute by Company remains
outstanding for more than [***] days after its due date, CyDex may, in addition
to any other rights or remedies it may have, refuse to ship Captisol hereunder
except upon payment by Company in advance.

 

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5. REPORTS.

Annually, by December 1st of each calendar year during the Term, Company shall
provide CyDex with written reports that: (i) describe in reasonable detail
Company’s progress made toward achievement of the milestones specified in
Section 4.1(b) above during such calendar year; (ii) summarize Company’s
communications and meetings involving the FDA related to Captisol during such
calendar year; (iii) summarize Company’s anticipated preclinical and clinical
use of Captisol for the next calendar year; and (iv) set forth such other
information regarding Captisol as mutually agreed upon by the parties.

 

6. DEVELOPMENT AND COMMERCIALIZATION BY COMPANY.

6.1 Costs and Expenses. Company shall be solely responsible for all costs and
expenses related to its development and commercialization of the Licensed
Product, including without limitation costs and expenses associated with all
preclinical activities and clinical trials, and all regulatory filings and
proceedings relating to the Licensed Product.

6.2 [Reserved]

6.3 Right of Reference. Company shall have the right to reference the DMF solely
in connection Company’s regulatory filings submitted in connection with
obtaining Marketing Approval for the Licensed Product.

6.4 Access to Company’s Data. CyDex shall have the right to reference and
utilize all toxicology/safety and other relevant scientific data developed on
Captisol alone (and not in conjunction with a product formulation) by Company,
its Sublicensees or Affiliates in connection with CyDex’s development and
commercialization of Captisol or compounds, at no cost to CyDex. Upon request by
CyDex, Company shall either provide CyDex with a copy of all such data or shall
make such data accessible to CyDex at such times and locations mutually agreed
upon by the parties.

 

7. REGULATORY MATTERS.

7.1 Captisol Information Submitted for Regulatory Review. Except as otherwise
set forth herein, Company shall be solely responsible for all communications
with regulatory agencies in connection with the Licensed Product.
Notwithstanding the foregoing, CyDex agrees to provide proprietary technical
information relating to Captisol directly to global health authorities as
reasonably requested by Company during development and/or new product
registration. Company shall provide CyDex with copies of the portions of all
regulatory submissions containing Captisol data alone (and not in conjunction
with any product formulation) [***] prior to submission and shall allow CyDex to
review and comment upon said submissions. If CyDex reasonably determines that
any such submission would materially adversely affect another product utilizing
Captisol, CyDex shall notify Company within [***] of receipt of such submission,
and the parties shall discuss and resolve the matter in good faith. Company
shall inform CyDex of meetings with the FDA (or other regulatory agencies in the
Territory) regarding the Licensed Product [***] prior to such event and shall
allow CyDex to participate in any FDA (or other regulatory agency) review that
might reasonably include inquiries regarding Captisol. If Company submits
written responses to the FDA that include data

 

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on Captisol alone, CyDex shall be permitted to review such written materials
prior to submission. If CyDex reasonably objects to the contents of such written
responses relating to Captisol, the parties agree to cooperate in working toward
a reasonable and mutually agreeable response.

7.2 Material Safety. CyDex shall provide Company, in writing, promptly as it
becomes available, with (a) relevant information currently known to it regarding
handling precautions, toxicity and hazards with respect to Captisol, and (b) the
then-current material safety data sheet for Captisol. Notwithstanding the
foregoing or anything in this Agreement to the contrary, Company is solely
responsible for (i) use of all documentation provided by CyDex, including
without limitation, use in any regulatory submission to the FDA or any other
regulatory agency in the Territory (for clarity, CyDex is responsible for the
accuracy of the information contained in such documentation), (ii) document
control and retention, and (iii) determining the suitability of any
documentation provided by CyDex hereunder for use in any regulatory submission.

7.3 Adverse Event Reporting. Company shall adhere, and shall require that its
Affiliates, Sublicensees, co-marketers and distributors adhere, to all
requirements of applicable law and regulations that relate to the reporting and
investigation of any adverse event, including without limitation an unfavorable
and unintended diagnosis, symptom, sign (including an abnormal laboratory
finding), syndrome or disease, whether or not considered Captisol or Licensed
Product-related, which occurs or worsens following administration of Captisol or
Licensed Product. Company and/or its Affiliates or Sublicensees shall provide
CyDex with copies of all reports of any such adverse event which is serious (any
such adverse event involving Captisol or the Licensed Product that results in
death, is life-threatening, requires or prolongs inpatient hospitalization,
results in disability, congenital anomaly or is medically important (i.e., may
require other medical or surgical intervention to prevent other serious criteria
from occurring)) which Company and/or its Affiliates or Sublicensees has reason
to believe are associated with Captisol within [***] days promptly following
(i) Company’s submission of any such report to any regulatory agency, or
(ii) receipt from Company’s Sublicensee, co-marketer or distributor of any such
report to any regulatory agency. Company shall also advise CyDex regarding any
proposed labeling or registration dossier changes affecting Captisol. Reports
from Company shall be delivered to the attention of Vice President, Chief
Operating Officer, CyDex, with a copy to Vice President, Assistant Secretary,
CyDex, at the addresses set forth in Section 14.6. By no later than [***]
following the Effective Date and not later than the initiation of any clinical
studies involving the Licensed Product, the parties shall enter into a formal
safety agreement for the mutual exchange of adverse event reports and safety
information associated with Captisol. Details of the operating procedure
respecting such adverse event reports and safety information exchange shall be
the subject of a mutually-agreed pharmacovigilance agreement between the
parties. Company shall be solely responsible for reporting to the regulatory
agencies and health authorities, adverse events relating to the Licensed Product
and for maintaining the global safety database of such adverse events. The
parties shall mutually cooperate with regard to investigation of any such
serious adverse event believed to be associated with Captisol supplied under
this Agreement, whether experienced by Company, CyDex or any other Affiliate,
Sublicensee, co-marketer or distributor of CyDex or Company.

 

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7.4 Product Recalls. In the event that a Licensed Product is recalled or
withdrawn, CyDex shall fully cooperate with Company in connection with such
recall or withdrawal. If such recall is caused by a breach of any warranty or
other obligation of CyDex under this Agreement, CyDex will reimburse Company for
[***]. CyDex agrees to abide by all decisions of Company to recall or withdraw
Licensed Product.

 

8. CONFIDENTIALITY.

8.1 Definition. Company and CyDex each recognizes that during the Term, it may
be necessary for a party (the “Disclosing Party”) to provide Confidential
Information (as defined herein) to the other party (the “Receiving Party”) that
is highly valuable, the disclosure of which would be highly prejudicial to such
party. The disclosure and use of Confidential Information will be governed by
the provisions of this Section 8. Neither Company nor CyDex shall use the
other’s Confidential Information except as expressly permitted in this
Agreement. For purposes of this Agreement, “Confidential Information” means all
scientific, clinical, regulatory, marketing, business, operational, financial or
commercial information disclosed by the Disclosing Party to the Receiving Party,
including but not limited to product specifications, data, know-how,
formulations, product concepts, sample materials, business and technical
information, financial data, batch records, trade secrets, processes,
techniques, algorithms, programs, designs, drawings, and any other information
related to a party’s present or future products, sales, suppliers, customers,
employees, investors or business. Without limiting the generality of the
foregoing, CyDex’s Confidential Information includes all materials provided as
part of the Captisol Data Package; nevertheless, Company’s and/or its Affiliates
disclosure and use of the Captisol Data Package in connection with any activity
related to regulatory approval of any Licensed Product shall not constitute a
breach of any non-disclosure and/or limited use obligations owed by Company
and/or its Affiliates to CyDex or [***].

8.2 Obligation. CyDex and Company agree that they will disclose the other’s
Confidential Information to its own officers, employees, consultants, Affiliates
and agents only if and to the extent necessary to carry out their respective
responsibilities under this Agreement or in accordance with the exercise of
their rights under this Agreement, and such disclosure shall be limited to the
maximum extent possible consistent with such responsibilities and rights.
Neither party shall disclose Confidential Information of the other to any third
party without the other’s prior written consent, and any such disclosure to a
third party shall be pursuant to the terms of a non-disclosure agreement no less
restrictive than this Section 8. Each party shall take such action to preserve
the confidentiality of each other’s Confidential Information as it would
customarily take to preserve the confidentiality of its own Confidential
Information (but in no event less than a reasonable standard of care). Each
party, upon the other’s request, will return all the Confidential Information
disclosed to the other party pursuant to this Agreement, including all copies
and extracts of documents, within sixty (60) days of the request, except that
the receiving party may retain (i) one (1) copy for archival purposes and
(ii) such electronic copies that exist as part of the party’s computer systems,
network storage systems and electronic backup systems.

8.3 Exceptions. The use and non-disclosure obligations set forth in this
Section 8 shall not apply to any Confidential Information, or portion thereof,
that the Receiving Party can demonstrate by appropriate documentation:

 

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(i) at the time of disclosure is in the public domain;

(ii) after disclosure, becomes part of the public domain, by publication or
otherwise, through no fault of the Receiving Party;

(iii) at the time of disclosure is already in the Receiving Party’s possession,
and such prior possession can be properly demonstrated by the Receiving Party,
with the exception of Confidential Information exchanged between parties prior
to the execution of this Agreement which is subject to an ongoing obligation of
confidentiality;

(iv) is made available to the Receiving Party by an independent third party,
provided, however, that to the Receiving Party’s knowledge, such information was
not obtained by said third party, directly or indirectly, from the Disclosing
Party hereunder; or

(v) is developed by or on behalf of the Receiving Party or its Affiliates
without the aid, application or use of the Disclosing Party’s Confidential
Information.

In addition, the Receiving Party may disclose information that is required to be
disclosed by law, by a valid order of a court or by order or regulation of a
governmental agency including but not limited to, regulations of the United
States Securities and Exchange Commission (the “SEC”), or in the course of
litigation, provided that in all cases the Receiving Party shall give the other
party prompt notice of the pending disclosure and shall assist the Disclosing
Party (at Disclosing Party’s request and expense) in obtaining, a protective
order preventing or limiting the disclosure and/or requiring that the
Confidential Information so disclosed be used only for the purposes for which
the law or regulation required, or for which the order was issued.

8.4 Injunction. Each party agrees that should it breach or threaten to breach
any provisions of this Section 8, the Disclosing Party may suffer irreparable
damages and its remedy at law may be inadequate. Upon any breach or threatened
breach by the Receiving Party of this Section 8, the Disclosing Party shall be
entitled to seek injunctive relief in addition to any other remedy which it may
have.

 

9. REPRESENTATIONS AND WARRANTIES.

9.1 Mutual Representations and Warranties. Each party represents and warrants to
the other as follows:

(i) it is a corporation duly organized and validly existing under the laws of
the state or country of its incorporation;

(ii) it has the power and authority to enter into this Agreement and to perform
its obligations hereunder;

(iii) this Agreement has been duly authorized, executed and delivered by such
party and constitutes a legal, valid and binding obligation of such party
enforceable against such party in accordance with its terms except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, moratorium, fraudulent transfer, or other similar
laws affecting the rights and remedies of creditors generally and by general
principles of

 

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equity as applied by courts of competent jurisdiction or dispute resolution
authorities authorized by the parties;

(iv) the execution, delivery and performance of this Agreement by such party do
not conflict with any agreement, instrument or understanding, oral or written,
to which such party is a party or by which such party may be bound, nor violate
any law or regulation of any court, governmental body or administrative or other
agency having authority over such party;

(v) all consents, approvals and authorizations from all governmental authorities
or other third parties required to be obtained by such party in connection with
the execution and delivery of this Agreement have been obtained;

(vi) no person or entity has or will have, as a result of the transactions
contemplated by this Agreement, any right, interest or valid claim against or
upon such party for any commission, fee or other compensation as a finder or
broker because of any act by such party or its agents, or, with respect to
Company, because of any act by its Affiliates or Sublicensees; and

(vii) it has not entered into any agreement with any third party that is in
conflict with the rights granted to the other party pursuant to this Agreement.

9.2 Limited Warranty. CyDex warrants solely to Company and its Affiliates that
all Captisol sold to Company shall:

(i) conform to the respective Specifications (as applicable for Research Grade
Captisol, Clinical Grade Captisol or Commercial Grade Captisol) in all material
respects at the time of delivery;

(ii) have been manufactured, stored, packaged and (to the extent CyDex is
responsible for shipping) shipped in accordance with cGMPs (Research Grade
Captisol excluded) and all other Laws in the country of manufacture and CyDex’s
site of delivery;

(iii) be delivered to Company (or Company’s designated carrier if Company is
responsible for shipping) with good and marketable title, free and clear of any
liability, pledge, lien, restriction, claim, charge, security interest or other
encumbrance; and

(iv) have not less than [***] of remaining shelf life (until re-testing is
required) on the date of delivery.

CyDex’s sole obligation, and Company’s sole and exclusive remedy, for any breach
of such warranty shall be as set forth in Sections 3.5(e) (Refund or
Replacement) and 10.1 (Indemnification by CyDex) hereof.

9.3 Disclaimer. THE WARRANTIES SET FORTH IN THIS SECTION 9 ABOVE ARE PROVIDED IN
LIEU OF, AND EACH PARTY HEREBY DISCLAIMS, ALL OTHER WARRANTIES, EXPRESS AND
IMPLIED, RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT, CAPTISOL, THE
CAPTISOL PATENTS OR THE CAPTISOL DATA PACKAGE, INCLUDING BUT NOT LIMITED TO THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
CYDEX’S WARRANTIES UNDER THIS

 

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AGREEMENT ARE SOLELY FOR THE BENEFIT OF COMPANY AND ITS AFFILIATES AND MAY BE
ASSERTED ONLY BY COMPANY AND/OR ITS AFFILIATES AND NOT BY ANY SUBLICENSEE OR ANY
CUSTOMER OF COMPANY. COMPANY, ITS AFFILIATES AND SUBLICENSEES SHALL BE SOLELY
RESPONSIBLE TO ITS CUSTOMERS FOR ALL REPRESENTATIONS AND WARRANTIES THAT
COMPANY, ITS AFFILIATES OR SUBLICENSEES MAKE TO ANY CUSTOMER OF COMPANY, ITS
AFFILIATES OR SUBLICENSEES. NOTHING IN THIS SECTION 9.3 SHALL BE DEEMED TO LIMIT
OR OTHERWISE ALTER CYDEX’S OBLIGATIONS UNDER ARTICLE 10 (INDEMNIFICATION AND
INSURANCE).

 

10. INDEMNIFICATION AND INSURANCE.

10.1 By CyDex. CyDex shall defend, indemnify and hold Company and its Affiliates
and Sublicensees, and each of their respective directors, officers and
employees, harmless from and against any and all losses, damages, liabilities,
costs and expenses (including the reasonable costs and expenses of attorneys and
other professionals) (collectively “Losses”) incurred by Company as a result of
any claim, demand, action or other proceeding (each, a “Claim”) by a third
party, to the extent such Losses arise out of (i) CyDex’s breach of this
Agreement, including without limitation any of its representations and
warranties set forth in Sections 9.1 and 9.2, (ii) any infringement or alleged
infringement of the intellectual property rights of a third party by Captisol
alone, but not where the combination of Captisol and any other material is a
required element of the alleged or actual infringement, or (iii) CyDex’s or
CyDex’s employees’, officers’, directors’ and agents’ negligence or willful
misconduct in connection with performance under this Agreement. Notwithstanding
the foregoing, CyDex shall have no obligation under this Section 10.1 to the
extent that a third party Claim arises from (i) Company’s breach of this
Agreement, including without limitation any of its representations and
warranties set forth in Section 9.1, or (ii) Company’s or Company’s employees’,
officers’, directors’ and agents’ negligence or willful misconduct in connection
with performance under this Agreement.

10.2 By Company. Company shall defend, indemnify and hold CyDex and its
Affiliates, and each of their respective directors, officers and employees,
harmless from and against any and all Losses incurred by CyDex as a result of
any Claim by a third party, to the extent such Losses arise out of: (a) the use
or sale of the Licensed Product by Company, its Affiliates, Sublicensees,
distributors, agents or other parties; (b) the manufacture, use, handling,
promotion, marketing, distribution, importation, sale or offering for sale of
Licensed Products; (c) interactions and communications with governmental
authorities, physicians or other third parties; (d) Company’s breach of this
Agreement, including without limitation any of its representations and
warranties set forth in Section 9.1, or (e) Company’s or Company’s employees’,
officers’, directors’ and agents’ negligence or willful misconduct in connection
with performance under this Agreement. Notwithstanding the foregoing, Company
shall have no obligation under this Section 10.2 to the extent that a third
party Claim arises from (i) CyDex’s breach of this Agreement, including without
limitation any of its representations and warranties set forth in Sections 9.1
and 9.2, (ii) any infringement or alleged infringement of the intellectual
property rights of a third party by Captisol where a combination of Captisol
with a material other than Captisol is a required element of the infringement or
alleged infringement, or (iii) CyDex’s or CyDex’s employees’, officers’,
directors’ and agents’ negligence or willful misconduct in connection with
performance under this Agreement.

 

    LICENSE AND SUPPLY AGREEMENT   PAGE 21

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10.3 Expenses. As the parties intend complete indemnification, all costs and
expenses of enforcing any provision of this Section 10 shall also be reimbursed
by the Indemnitor.

10.4 Procedure. The party intending to claim indemnification under this
Section 10 (an “Indemnitee”) shall promptly notify the other party (the
“Indemnitor”) of any Claim in respect of which the Indemnitee intends to claim
such indemnification, and the Indemnitor shall assume the defense thereof
whether or not such Claim is rightfully brought; provided, however, that an
Indemnitee shall have the right to retain its own counsel, with the fees and
expenses to be paid by the Indemnitee, unless Indemnitor does not assume the
defense, in which case the reasonable fees and expenses of counsel retained by
the Indemnitee shall be paid by the Indemnitor. The Indemnitee, and its
employees and agents, shall cooperate fully with the Indemnitor and its legal
representatives in the investigations of any Claim. The Indemnitor shall not be
liable for the indemnification of any Claim settled or compromised by the
Indemnitee without the written consent of the Indemnitor.

10.5 Insurance. Each party agrees to maintain, during the Term and for [***]
thereafter, through policies of insurance or programs of self-insurance,
commercial general liability insurance, products liability and products
completed operations coverages, with a minimum limitation of [***] per
occurrence and [***] annual aggregate upon execution of this Agreement. Each
party shall deliver to the other party, prior to the execution of this Agreement
and prior to commencing work hereunder, an insurer or insurer’s agent signed
certificates of insurance, as evidence that policies providing such coverage and
limits of insurance are in full force and effect and with insurers, having an AM
Best (A-) or higher rating, or similar metric as deemed reasonably acceptable to
the other party, or evidence of such self insurance. Thereafter, the
certificates of insurance (if applicable) shall be provided annually. These
certificates (if applicable) shall provide that not less than [***] advance
notice will be given in writing to the other party of any cancellation,
termination, or material alteration of said insurance policies to the extent
that such provisions are reasonably available. Each party shall name the other
party as an additional insured under its policies of commercial general
liability insurance. All deductibles or self-insured retentions are the
responsibility of CyDex or Company, as applicable, under the foregoing policies
maintained by CyDex or Company, as applicable.

 

11. LIMITATION OF LIABILITY.

EXCEPT FOR DAMAGES FOR WHICH A PARTY IS RESPONSIBLE PURSUANT TO ITS
CONFIDENTIALITY OBLIGATIONS SET FORTH IN SECTION 8 AND INDEMNIFICATION
OBLIGATIONS SET FORTH IN SECTION 10 ABOVE, THE PARTIES SPECIFICALLY DISCLAIM ALL
LIABILITY FOR AND SHALL IN NO EVENT BE LIABLE FOR ANY INCIDENTAL, SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGES, EXPENSES, LOST PROFITS, LOST SAVINGS,
INTERRUPTIONS OF BUSINESS OR OTHER DAMAGES OF ANY KIND OR CHARACTER WHATSOEVER
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR RESULTING FROM THE MANUFACTURE,
HANDLING, MARKETING, SALE, DISTRIBUTION OR USE OF LICENSED PRODUCT OR USE OF THE
CAPTISOL PATENTS AND CAPTISOL DATA PACKAGE, REGARDLESS OF THE FORM OF ACTION,
WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, EVEN IF A PARTY WERE
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT WITH RESPECT TO PAYMENTS DUE
TO CYDEX PURSUANT TO SECTION 4 OF THIS AGREEMENT AND THE INDEMNIFICATION
SPECIFICALLY PROVIDED IN SECTION 10 ABOVE, IN NO EVENT SHALL EITHER PARTY’S
TOTAL AGGREGATE LIABILITY FOR ALL CLAIMS ARISING OUT OF OR RELATED TO THIS
AGREEMENT EXCEED THE AMOUNTS PAID BY COMPANY TO CYDEX PURSUANT TO SECTION 4 OF

 

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THIS AGREEMENT DURING THE [***] PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING
RISE TO LIABILITY. NO ACTION, REGARDLESS OF FORM, ARISING OUT OF OR RELATED TO
THIS AGREEMENT MAY BE BROUGHT BY EITHER PARTY MORE THAN [***] AFTER SUCH PARTY
HAS KNOWLEDGE OF THE OCCURRENCE THAT GAVE RISE TO THE CAUSE OF SUCH ACTION.

 

12. MANAGEMENT OF CAPTISOL PATENTS.

12.1 Prosecution and Maintenance. CyDex shall maintain, at its sole cost and
expense and using reasonable discretion, the Captisol Patents set forth on
Exhibit A. CyDex shall have the sole right to control the prosecution and
maintenance of patent applications and the selection of countries where patent
applications are filed related to the Captisol Patents.

12.2 Infringement by Third Parties. If Company becomes aware that a third party
may be infringing a Licensed Patent, it will promptly notify CyDex. CyDex shall
take whatever, if any, action it deems appropriate, in its sole discretion,
against the alleged infringer. If CyDex elects to take action, Company shall, at
CyDex’s request and expense, cooperate and shall cause its employees to
cooperate with CyDex in taking any such action, including but not limited to,
cooperating with the prosecution of any infringement suit by CyDex. Company
shall not take any such action against the alleged infringer without the written
consent of CyDex.

 

13. TERM AND TERMINATION.

13.1 Term. The term of the Agreement (the “Term”) shall commence upon the
Effective Date and shall continue in effect thereafter until December 31, 2015,
unless extended or earlier terminated by (i) one of the parties as expressly
provided herein, or (ii) written agreement of the parties. The Term may be
extended one time, at Company’s sole discretion, for an additional period of
five (5) years, expiring on December 31, 2020, by Company providing written
notice to CyDex on or before December 31, 2014.

13.2 Termination by CyDex. If Company should violate or fail to perform any
material term or covenant of this Agreement, then CyDex may give written notice
of such default (a “Notice of Default”) to Company. If Company should fail to
cure such default within ninety (90) days of the date of such notice is received
by Company or prior to the natural expiration date of this Agreement, whichever
is shorter in duration, CyDex shall have the right to terminate this Agreement
by a second written notice (a “Notice of Termination”) to Company. If Notice of
Termination is sent to Company, this Agreement shall automatically terminate on
the date such notice is received by Company. In addition, CyDex may terminate
this Agreement immediately upon written notice to Company in the event Company
makes an assignment for the benefit of creditors or has a petition in bankruptcy
filed for or against it that is not dismissed within ninety (90) days of such
filing.

 

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13.3 Termination by Company. Company shall have the right at any time to
terminate this Agreement in whole by giving CyDex at least [***] prior written
notice.

13.4 Effect of Termination. Following the termination or expiration of this
Agreement for any reason:

(a) All rights granted to Company herein shall immediately terminate. For
clarity, the termination of rights means that, except to as provided otherwise
in separate agreements, (i) Company and its Affiliates shall not have the right
to operate within the scope of any valid and enforceable claim contained in an
issued patent within the Captisol Patents or the Restricted Patent Rights in any
jurisdiction where such valid and enforceable claim exists; (ii) and Company and
its Affiliates shall cease use of non-public Captisol-related toxicology/safety
and other relevant non-public scientific safety data provided by CyDex to
Company under this Agreement. Company acknowledges that reformulation of and new
regulatory approvals for the Product may be required as a result of this
provision.

(b) Each party shall promptly return all relevant records and materials in its
possession or control containing the other party’s Confidential Information with
respect to which the former party does not retain rights hereunder; provided,
however, that each party may retain one archival copy of such records and
materials solely to be able to monitor its obligations that survive under this
Agreement.

13.5 Survival. Notwithstanding any other provisions of this Agreement, any
liability or obligation of either party to the other for acts or omissions prior
to the termination or expiration of this Agreement shall survive the termination
or expiration of this Agreement. Such termination or expiration shall not
relieve either party from obligations that are expressly indicated to survive
termination or expiration of this Agreement, nor shall any termination or
expiration of this Agreement relieve Company of its obligation to pay CyDex sums
due in respect of Captisol ordered by Company and shipped prior to termination
or expiration of this Agreement, and subsequently received by Company in good
condition meeting all specifications applicable at the time of order.
Sections 2.2 (Grant of Licenses and Option from Company to CyDex), 3.6 (Quality
Control; Acceptance and Rejection), 4.1 (Payments and Royalties for Licenses),
4.3 (Currency), 4.4 (Taxes), 4.5 (Late Payments), 7.3 (Adverse Event Reporting),
7.4 (Product Recalls), 8 (Confidentiality), 9.3 (Disclaimer), 10
(Indemnification and Insurance), 11 (Limitation of Liability), 13.4 (Effect of
Termination), 13.5 (Survival), and 14 (General Provisions) shall survive
termination or expiration of this Agreement.

 

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14. GENERAL PROVISIONS.

14.1 Relationship of Parties. Each of the parties hereto is an independent
contractor and nothing in this Agreement is intended or shall be deemed to
constitute a partnership, agency, employer-employee or joint venture
relationship between the parties. No party shall incur any debts or make any
commitments for the other.

14.2 Compliance with Law. Company agrees that use of the Captisol Patents and
Captisol Data Package by Company and its Affiliates and Sublicensees, and the
manufacture, handling, marketing, sale, distribution and use of Licensed
Product, will comply with all Laws.

14.3 Arbitration.

(a) Procedure. Any controversy or claim arising out of or relating to this
Agreement shall be exclusively and finally resolved by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect, in Chicago, Illinois. The arbitration shall be
conducted by an arbitrator(s) reasonably knowledgeable about the pharmaceutical
industry and acceptable to CyDex and Company. If CyDex and Company cannot agree
on a single arbitrator within [***] after a written demand for arbitration has
been made, CyDex shall appoint an arbitrator, Company shall appoint an
arbitrator, the two (2) arbitrators shall appoint a third arbitrator, and the
three (3) arbitrators shall hear and decide the issue in controversy. If either
party fails to appoint an arbitrator within [***] after service of the demand
for arbitration, then the arbitrator appointed by the other party shall
arbitrate any controversy in accordance with this Section 14.3(a). Except as to
the selection of arbitrators, the arbitration proceedings shall be conducted
promptly and in accordance with the Commercial Arbitration Rules of the American
Arbitration Association in effect at the time the arbitration demand is made.
The costs and fees of any arbitration shall be paid by [***]. For purposes of
this Agreement, “costs and fees” shall mean all reasonable pre-award expenses of
the arbitration, including the fees of the arbitrator(s), administrative fees,
travel expenses, out-of-pocket expenses such as copying and telephone, witness
fees, and attorney’s fees.

(b) Confidentiality of Proceedings. All arbitration proceedings hereunder shall
be confidential and the arbitrator(s) shall issue appropriate protective orders
to safeguard each party’s Confidential Information. Except as required by law,
neither a party nor an arbitrator may disclose the existence, content, or
results of any arbitration hereunder without the prior written consent of both
parties.

(c) Interim Equitable Relief. Either party may apply to the arbitrator(s)
seeking injunctive relief until the arbitration award is rendered or the
controversy is otherwise resolved. Either party may, without waiving any right
or remedy under this Agreement, seek from any court having jurisdiction any
interim or provisional relief (including but not limited to interim injunctive
relief) that is necessary to protect the rights or property of that party,
pending the establishment of an arbitration tribunal or pending the arbitration
tribunal’s determination of the merits of the controversy. Neither party shall
commence any court proceeding or action against the other to resolve any dispute
arising out of relating to this Agreement, or the breach thereof, except (i) to
enforce an arbitral award rendered pursuant to this Section 14.3, or (ii) under
the circumstances set forth in this Section 14.4(c).

 

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(d) Binding Effect. The provisions of this Section 14.3 shall survive any
expiration or termination of this Agreement, and shall be severable and binding
on the parties hereto, notwithstanding that any other provision of this
Agreement may be held or declared to be invalid, illegal or unenforceable.

14.4 Costs and Expenses. Except as otherwise expressly provided in this
Agreement, each party shall bear all costs and expenses associated with the
performance of such party’s obligations under this Agreement.

14.5 Force Majeure. Neither party shall be liable for failure to perform, or
delay in the performance of, its obligations under this Agreement (other than
payment obligations) when such failure or delay is caused by an event of force
majeure. For purposes of this Agreement, an event of force majeure means any
event or circumstance beyond the reasonable control of the affected party,
including but not limited to, war, insurrection, riot, fire, flood or other
unusual weather condition, explosion, act of God, peril of the sea, strike,
lockout or other industrial disturbance, sabotage, accident, embargo, breakage
of machinery or apparatus, injunction, act of governmental authority, compliance
with governmental order on national defense requirements, or inability to obtain
fuel, power, raw materials, labor or transportation facilities. If, due to any
event of force majeure, either party shall be unable to fulfill its obligations
under this Agreement (other than payment obligations), the affected party shall
immediately notify the other party of such inability and of the period during
which such inability is expected to continue.

14.6 Notices. Any notice, request, or communication under this Agreement shall
be effective only if it is in writing and personally delivered; sent by
certified mail, postage pre-paid; facsimile with receipt confirmed; or by
nationally recognized overnight courier with signature required, addressed to
the parties at the addresses stated below or such other persons and/or addresses
as shall be furnished in writing by any party in accordance with this
Section 14.6. Unless otherwise provided, all notices shall be sent:

 

If to CyDex, to:       CyDex Pharmaceuticals, Inc.    10513 W. 84th Terrace   
Lenexa, KS 66214    Attention: General Manager    Fax: (913) 685-8856 with a
copy to:       Ligand Pharmaceuticals Incorporated    11085 North Torrey Pines
Road, Suite 300    La Jolla, CA 92037    Attn: General Counsel    Fax : (858)
550-7272

 

    LICENSE AND SUPPLY AGREEMENT   PAGE 26

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If to Company, to:       Schering-Plough Brinny Company    Brinny    Innishannon
   County Cork    Ireland    Attention: Plant Manager with a copy to:      
Merck Sharp & Dohme Corporation    One Merck Drive    Whitehouse Station, NJ
08889-0100    Attention: VP & Assistant General Counsel, MMD    Fax:    (908)
423-4892

If sent by facsimile transmission, [***] shall be deemed to be the date on which
such notice, request or communication was given. If sent by overnight courier,
[***] after the date of deposit with such courier shall be deemed to be the date
on which such notice, request or communication was given. If sent by certified
mail, the [***] after the date of mailing shall be deemed the date on which such
notice, request or communication was given.

14.7 Use of Name. Neither party shall have any right, express or implied, to use
in any manner the name or other designation of the other party or any other
trade name or trademark of the other party for any purpose, except (i) as may be
required by applicable law or regulation, or (ii) as approved in writing by the
other party.

14.8 Public Announcements. Upon execution of this Agreement, CyDex or its
Affiliate Ligand Pharmaceuticals Incorporated (Ligand) shall have the right to
issue a press release so long as such press release has been reviewed and
approved in writing by Company prior to issuance (such approval not to be
unreasonably withheld) and file a Form 8-K with the SEC summarizing the
Agreement. Thereafter, except for such disclosure as is deemed necessary, in the
reasonable judgment of a party, to comply with applicable laws or regulations,
securities filings or the rules of the NYSE or NASDAQ, no announcement, news
release, public statement, publication, or presentation relating to the
existence of this Agreement, or the terms hereof, will be made without the other
party’s prior written approval; such prior written approval not to be
unreasonably withheld. In the event of a required public announcement, the party
making such announcement shall provide the other party with a copy of the
proposed text prior to such announcement sufficiently in advance of the
scheduled release of such announcement to afford such other party a reasonable
opportunity to review and comment upon the proposed text and the timing of such
disclosure. In the event that Ligand files a copy of the Agreement with the SEC,
CyDex shall afford Company a reasonable opportunity to review and comment upon
the proposed redactions, if any.

 

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14.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without giving effect to any
conflicts of law principles that require the application of the law of a
different state).

14.10 Entire Agreement; Amendment. This Agreement and all Exhibits attached
hereto or thereto contain the entire agreement of the parties relating to the
subject matter hereof and supersede any and all prior agreements, written or
oral, between CyDex and Company relating to the subject matter of this
Agreement. This Agreement may not be amended unless agreed to in writing by both
parties.

14.11 Binding Effect. This Agreement shall be binding upon, and the rights and
obligations hereof shall apply to the CyDex and Company and any successor(s) and
permitted assigns. The name of a party appearing herein shall be deemed to
include the names of such party’s successors and permitted assigns to the extent
necessary to carry out the intent of this Agreement.

14.12 Waiver. The rights of either party under this Agreement may be exercised
from time to time, singularly or in combination, and the exercise of one or more
such rights shall not be deemed to be a waiver of any one or more of the others.
No waiver of any breach of a term, provision or condition of this Agreement
shall be deemed to have been made by either party unless such waiver is
addressed in writing and signed by an authorized representative of that party.
The failure of either party to insist upon the strict performance of any of the
terms, provisions or conditions of this Agreement, or to exercise any option
contained in this Agreement, shall not be construed as a waiver or
relinquishment for the future of any such term, provision, condition or option
or the waiver or relinquishment of any other term, provision, condition or
option.

14.13 Severability. If a final judicial determination is made that any provision
of this Agreement is unenforceable, this Agreement shall be rendered void only
to the extent that such judicial determination finds such provisions
unenforceable, and such unenforceable provisions shall be automatically
reconstituted and become a part of this Agreement, effective as of the date
first written above, to the maximum extent they are lawfully enforceable.

14.14 Assignment. Neither party may assign its rights or delegate its
obligations under this Agreement, in whole or in part, by operation of law or
otherwise, to any third party without the prior written consent of the other
party, which consent shall not be unreasonably withheld. Notwithstanding the
foregoing, either party may assign its rights and delegate its obligations under
this Agreement to an Affiliate or to a third party successor, whether by way of
merger, sale of all or substantially all of its assets of the business to which
this Agreement pertains, sale of stock or otherwise, without the other party’s
prior written consent. As a condition to any permitted assignment hereunder, the
assignor hereby guarantees the performance of any assignee to the terms and
obligations of this Agreement. Any assignment not in accordance with this
Section 14.14 shall be void.

14.15 Third Party Beneficiaries. Except for the rights of Indemnitees pursuant
to Section 10 hereof, and subject to Section 8.5 hereof, the terms and
provisions of this Agreement are intended solely for the benefit of each party
hereto and their respective Affiliates, successors or permitted assigns and it
is not the intention of the parties to confer third-party beneficiary

 

    LICENSE AND SUPPLY AGREEMENT   PAGE 28

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rights upon any other person, including without limitation Sublicensees. The
enforcement of any obligation of CyDex under this Agreement shall only be
pursued by Company, its Affiliates or such Indemnitees, and not Sublicensees.

14.16 Headings. The descriptive headings of this Agreement are for convenience
only, and shall be of no force or effect in construing or interpreting any of
the provisions of this Agreement.

14.17 Counterparts. This Agreement may be executed in two counterparts, each of
which shall constitute an original document, but both of which shall constitute
one and the same instrument.

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

 

CYDEX PHARMACEUTICALS, INC. By:  

/s/ Matt Foehr

Name:  

Matt Foehr

Title:  

Executive Vice President, Chief Operating Officer

MERCK SHARP & DOHME CORPORATION By:  

/s/ J.P. Hanthold

Name:  

J.P. Hanthold

Title:  

Director of Global Procurement

 

    LICENSE AND SUPPLY AGREEMENT   PAGE 30

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EXHIBIT A

CAPTISOL PATENTS

 

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

[***]

 

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

* * * * *

 

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EXHIBIT B

SPECIFICATIONS

[***]

[***]

* * * * *

 

    LICENSE AND SUPPLY AGREEMENT   EXHIBIT B-1

 

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[***]

* * * * *

 

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EXHIBIT C

PURCHASE PRICE FOR CAPTISOL

 

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EXHIBIT D

RESTRICTED PATENT RIGHTS

 

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EXHIBIT E

EXTERNAL SUPPLIER PROCESS CHANGE AGREEMENT FORM

Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc. (“Merck”), is
committed to achieving the highest standards of quality and is dedicated to
continuous improvement in compliance and quality through our business processes
and practices with our suppliers. That said, suppliers are responsible for
manufacturing their products in conformance with all laws and regulations that
pertain to their specific operations. Suppliers are also responsible for
assuring that they have qualified personnel with adequate training to control
their own manufacturing processes and ensure consistent quality. Such controls
extend to your firm properly evaluating any change in the materials; equipment
or processes to ensure your products conform to original specifications.

Sometimes, a change in materials, equipment or process by a supplier may have an
unintended impact on the product produced by the supplier and subsequently have
an unintended impact on a product being produced by the customer. Merck requires
notification of certain changes in materials, equipment or process so as to be
able to evaluate whether such change may have an unintended impact on our use of
your product. Our requiring this information does not alter your own
responsibility in evaluating any and all changes undertaken by your firm.

This agreement will be relevant for any and all products Merck or any of its
affiliates, including without limitation Schering Corporation, receives from any
of your approved facilities.

Examples of changes that require prior notification and approval by Merck are
described in the attached agreement. In the event of uncertainty as to whether
or not notification is required, please contact your local Merck procurement
office.

 

Does Require Notification

   Does Not Require Notification [***]    [***] [***]    [***] [***]    [***]
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CyDex agrees to notify local Merck Procurement contact using the External
Supplier Process Change Notification Form (next page), or other written
notification containing equivalent information, prior to implementing changes in
accordance with this Exhibit.

 

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External Supplier Change Notification Form

 

1. GENERAL INFORMATION:

Company:

  

 

         Product Supplied   

 

Address

  

 

         Date:   

 

  

 

         Phone:   

 

  

 

         Fax:   

 

2. Target Date for Full Scale Implementation

3.         Will Sample Be Available?    ¨    Yes       ¨   

No                    If Yes, Date sample available

                                         

4. CHANGE DESCRIPTION: (Attach more info as required)

Current:       Proposed:      

5. TECHNICAL INFO – Describe relevant technical information. (Attach more info
as required)

6. SUMMARY CHECKLIST: Impact to supplier

 

¨    Yes    ¨    No    Cleaning Validation Impact? (if yes, technical info must
describe cleaning validation plan)             ¨    Yes    ¨    No    Equipment
Qualification Impact? (if yes, technical info must describe equipment validation
plan)             ¨    Yes    ¨    No    Process Validation Impact? (if yes,
technical info must describe process validation plan)             ¨    Yes    ¨
   No    Labeling or Artwork Impact? (if yes, technical info must describe
labeling/artwork impact)             ¨    Yes    ¨    No    Packaging or
Shipping Impact? (if yes, technical info must describe packaging/shipping
impact)             ¨    Yes    ¨    No    Regulatory Impact? (if yes, technical
info must describe regulatory impact)             ¨    Yes    ¨    No    Change
in Quality? (E.g. chemical composition, impurity profile, shelf life)?         
  

 

Supplier Signature:   

 

   Title:   

 

   Date:   

 

Printed Name                                         

¨                     ¨

 

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