Exhibit 10.1

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.

MANUFACTURING AND SUPPLY AGREEMENT

THIS MANUFACTURING AND SUPPLY AGREEMENT (the “Agreement”) is made effective as
of the 18th day of May 2012 (the “Effective Date”) by and between Santarus,
Inc., a Delaware corporation, having offices at 3721 Valley Centre Drive, Suite
400, San Diego, California 92130, U.S.A. (“Santarus”) and COSMO Technologies
Ltd, a company organised and existing under the laws of Ireland with principal
offices and plant located at 42-43 Amiens Street, Dublin 1 Ireland (“Supplier”).
Supplier and Santarus are sometimes referred to herein individually as a “Party”
and collectively as the “Parties.”

RECITALS

WHEREAS, Santarus is a specialty biopharmaceutical company focused on acquiring,
developing and commercializing products;

WHEREAS, Supplier is a provider of drug development and commercial manufacturing
services to pharmaceutical companies;

WHEREAS, Santarus and Supplier have entered into that certain License Agreement,
dated December 10, 2008 (the “License Agreement”), granting Santarus exclusive
rights to commercialize Finished Commercial Product (as defined below) in the
Territory and reserving for Supplier the exclusive right to supply Santarus’
requirements in the Territory; and

WHEREAS, in accordance with the terms of the License Agreement, Santarus wishes
to purchase Finished Bulk Product from Supplier, and Supplier is willing to
manufacture and supply such products to Santarus, on the terms set out in this
Agreement.

NOW THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements set forth below, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

1.1 “Affiliate” means any individual, corporation, association, or other
business entity, which directly or indirectly controls, is controlled by, or is
under common control with the Party in question. As used in this definition of
“Affiliate,” the term “control” shall mean, as to an entity, (a) direct or
indirect ownership of fifty percent (50%) or more of the voting interests or
other ownership interests in the entity in question; (b) direct or indirect
ownership of fifty percent (50%) or more of the interest in the income of the
entity in question; or (c) possession, directly or indirectly, of the power to
direct or cause the direction of management or policies of the entity in
question (whether through ownership of securities or other ownership interests,
by contract or otherwise).

1.2 “API” means the active pharmaceutical ingredient known as budesonide, as
specified by Chemical Abstract No. 51333-22-3, manufactured by a Third Party
manufacturer and provided to Supplier and/or Manufacturer for use in
manufacturing the Finished Bulk Product.

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1.3 “Applicable Laws” mean all laws, statutes, ordinances, codes, rules,
regulations, guidelines, and procedures enacted or made by a Government
Authority, including, without limitation, the FDA, that are in force during the
Term, and in each case to the extent applicable to the subject matter of, or the
performance by the Parties of their respective obligations under, this
Agreement. For purposes of this Agreement, “Applicable Laws” shall include,
without limitation, the FFDCA, the regulations promulgated thereunder
(including, without limitation, those regulations currently contained in Title
21 of the Code of Federal Regulations), and other rules and regulations
promulgated under the FFDCA relating to the manufacture of pharmaceutical
products; equivalent laws, regulations and standards promulgated by a Government
Authority that may assert jurisdiction over the Finished Bulk Product, the
Finished Commercial Product or any Facility; cGMP; and the FDA’s regulations for
drug establishment registration.

1.4 “Business Day” means any day other than a Saturday, Sunday or statutory
holiday in San Diego, California or Lainate, Milan, Italy.

1.5 “Certificates of Compliance” means (a) the certificate of analysis
confirming the identity, strength, quality and purity of each batch of Finished
Bulk Product to which it pertains (together with any certificate of analysis
pertaining to the API), (b) the certificate of compliance confirming that each
batch of Finished Bulk Product was manufactured, tested, stored and supplied by
Supplier and/or Manufacturer in compliance with this Agreement, including
without limitation the Specifications, cGMP and Applicable Laws, and (c) such
other certificates and confirmations as may be described in the Quality
Agreement, each such certificate signed by an authorized signatory of Supplier
and/or Manufacturer.

1.6 “cGMP” means current good manufacturing practices as described in Parts 210
and 211 of Title 21 of the United States Code of Federal Regulations and the
requirements imposed thereunder by the FDA, together with the latest FDA
guidance and like documents pertaining to manufacturing and quality control
practice, all as updated, amended and revised from time to time.

1.7 “Deficiency Notice” has the meaning set forth in Section 3.5.1.

1.8 “Effective Date” has the meaning specified on the first page of this
Agreement.

1.9 “Facility” means Manufacturer’s facilities located at via C.Colombo, 1 20020
Lainate, Milan, Italy, and any other facilities (including facilities utilized
by subcontractors as permitted hereunder) that are used in connection with the
activities performed by Supplier, Manufacturer, or its Affiliates or back-up
suppliers hereunder.

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

1.11 “FFDCA” means the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 321 et
seq., as amended.

 

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1.12 “Finished Bulk Product” means budesonide MMX 9 mg tablets manufactured in
bulk in accordance with the Specifications.

1.13 “Finished Commercial Product” means the Finished Bulk Product in final
packaged form for commercial distribution as trade or sample product.

1.14 “Firm Purchase Order” has the meaning set forth in Section 2.3.3.

1.15 “Forecast” has the meaning set forth in Section 2.3.2.

1.16 “Government Authority” means any supra-national, national, regional, state,
provincial or local government, court, governmental agency, authority, board,
bureau, instrumentality or regulatory body having jurisdiction over the Finished
Bulk Product, the Finished Commercial Product or any Facility.

1.17 “IND” means any investigational new drug application filed with the FDA and
related to development activities associated with the Finished Commercial
Product.

1.18 “Joint Inventions” means inventions conceived of, discovered, developed, or
reduced to practice during the Term jointly by employees, agents or contractors
of Supplier and/or Manufacturer, on the one hand, and Santarus, on the other
hand, that relate to Finished Bulk Product or Finished Commercial Product

1.19 “Joint Patent Rights” means those Patent Rights that relate to or cover
Joint Inventions.

1.20 “Manufacturer” means the Cosmo S.p.A., an Affiliate of Supplier, whose
Facility is in Lainate, Via Cristoforo Colombo 1, Italy and any permitted
back-up supplier in accordance with Section 2.12.

1.21 “NDA” means the New Drug Application filed with the FDA for marketing
approval for the Finished Commercial Product.

1.22 “Net Sales” shall have the meaning assigned to such term in the License
Agreement.

1.23 “Patent Rights” means (a) patents and patent applications, including
divisionals, continuations, continuations-in-part, and any foreign counterparts
thereof, (b) those patents or patent applications claiming priority to or
through any patent or patent application described in (a), (c) all patents
issuing from patent applications included in (a) and (b); and (d) all reissues,
reexaminations, renewals, and extensions of any patents included in (a) through
(c).

1.24 “Patents” shall have the meaning ascribed to it in the License Agreement.

1.25 “Quality Agreement” means that certain Quality Agreement to be entered into
by and between Santarus and Manufacturer within [***] days following the date of
this Agreement, and as amended thereafter from time to time.

 

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1.26 “Raw Materials” has the meaning set forth in Section 7.1.

1.27 “Regulatory Approval” means, with respect to a particular jurisdiction,
(a) any approvals, licenses, registrations, or authorizations necessary for the
manufacture (where relevant), marketing and sale of the Finished Bulk Product or
Finished Commercial Product in such nation or jurisdiction.

1.28 “Responsible Executive” means the President or the Chief Executive Officer
of a Party, or his or her designated representative.

1.29 “Santarus Inventions” means inventions conceived of, discovered, developed,
or reduced to practice during the Term solely by employees, agents or
contractors of Santarus that relate solely to Finished Bulk Product or Finished
Commercial Product

1.30 “Santarus Patent Rights” means Patent Rights that claim or cover Santarus
Inventions.

1.31 “Specifications” means the specifications for the Finished Bulk Product
together with applicable manufacturing protocols, testing methodologies and all
applicable requirements set forth in regulatory filings made with, and as
applicable approved by, the FDA (including INDs and NDAs) for the Finished Bulk
Product, as may be set forth in the Quality Agreement or otherwise communicated
in writing by Santarus to Supplier and/or Manufacturer.

1.32 “Supplier Inventions” means inventions conceived of, discovered, developed,
or reduced to practice during the Term solely by employees, agents or
contractors of Supplier or Manufacturer that relate to Finished Bulk Product or
Finished Commercial Product.

1.33 “Supplier Manufacturing Responsibilities” has the meaning specified in
Section 3.1 of this Agreement.

1.34 “Supplier Patent Rights” means Patent Rights that claim or cover Supplier
Inventions.

1.35 “Term” has the meaning set forth in Section 11.1.

1.36 “Territory” means the United States of America and all of its territories
and possessions, including Puerto Rico.

1.37 “Third Party” means any individual or entity other than Supplier,
Manufacturer or Santarus or their respective Affiliates.

1.38 “Unit” means one (1) tablet of the Finished Bulk Product.

ARTICLE 2

SUPPLY, STORAGE, AND DELIVERY OF FINISHED BULK PRODUCT

2.1 Supply of Finished Bulk Product. During the Term, Supplier, through its
Affiliate, Manufacturer, shall manufacture and supply, in accordance with the
provisions of this

 

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Agreement, the Specifications, cGMP and Applicable Laws, all quantities of the
Finished Bulk Product ordered by Santarus pursuant to this Agreement. Supplier
shall be responsible for and shall guaranty the performance of Manufacturer
hereunder, and Supplier and Manufacturer shall be jointly and severally liable
for any breaches of representations, warranties or covenants hereunder.

2.2 Exclusivity. During the Term, Santarus shall purchase its requirements of
Finished Bulk Product exclusively from Supplier and Manufacturer, and Supplier
and Manufacturer shall manufacture and supply Finished Bulk Product for
commercialization in the Territory exclusively to Santarus.

2.3 Commercial Supply.

2.3.1 Supply Obligations. Supplier shall have Manufacturer manufacture and
supply to Santarus, and Santarus agrees to purchase from Supplier, such
quantities of Finished Bulk Product specified by Santarus in accordance with
this Agreement at the Price (as defined in Article 6 below).

2.3.2 Forecasts.

(i) Santarus shall use commercially reasonable efforts to determine its
estimated requirements for Finished Bulk Product from Supplier and shall deliver
to Supplier a written, non-binding, rolling eighteen (18) month forecast, by
month, of such estimated requirements (the “Forecast”). Santarus shall, in
accordance with the terms of this Agreement, update and revise the Forecast on a
monthly basis. Santarus shall provide each updated Forecast not less than [***]
days prior to the beginning of the next month. The first three (3) months of the
Forecast shall be binding on Santarus and cannot be amended by greater than
[***] as compared to the prior Forecast without the prior written consent of
Supplier. Supplier shall use the Forecast for planning purposes and make
available the production capacity and associated testing and release capacity
required to manufacture and supply the forecasted quantities of Finished Bulk
Product. Notwithstanding the foregoing, the Parties shall reasonably cooperate
during the [***] period prior to and following initial launch of the Finished
Commercial Product to provide additional flexibility for increases or decreases
in Firm Purchase Orders.

2.3.3 Firm Purchase Orders. Santarus shall submit to Supplier a firm, written
purchase order (the “Firm Purchase Order”) for the purchase of Finished Bulk
Product at least [***] days prior to the specified delivery date, which order
shall be consistent with the binding portion of the Forecast, unless otherwise
agreed by the Parties. Santarus shall submit Firm Purchase Orders on a monthly
basis. Each Firm Purchase Order shall specify the quantities of Finished Bulk
Product ordered, the requested delivery date or dates, the delivery address(es)
and any applicable shipping information. Supplier shall cause Manufacturer to
manufacture and supply the Finished Bulk Product in the quantities and by the
delivery dates set forth in the applicable Firm Purchase Order.

2.3.4 Firm Purchase Order Amendments. Santarus may amend a Firm Purchase Order
by submitting an amended Firm Purchase Order, as follows: (i) at least [***]
days before the originally scheduled delivery date specified in the Firm
Purchase Order, Santarus may amend

 

 

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the Firm Purchase Order to delay the delivery date to a date within [***] days
of the originally scheduled delivery date; or (ii) at least [***] days before
the originally scheduled delivery date specified in the Firm Purchase Order,
Santarus may increase or decrease the quantity of Finished Bulk Product ordered
and/or accelerate or delay the delivery date to a date within [***] days of the
originally scheduled delivery date, subject to all commercially reasonable
efforts of Supplier and Manufacturer to meet these amended Firm Purchase Orders.

2.4 Shipping and Delivery of Finished Bulk Product. All deliveries of Finished
Bulk Product shall be made to Santarus EXW Manufacturer’s Facility (Incoterms
2010). Supplier shall introduce to Santarus an Italian specialized organization
who will, as agent for Santarus, (i) arrange for shipping and insurance so that
the Finished Bulk Product will be delivered to the delivery address on the
delivery date set forth in the applicable Firm Purchase Order, at Santarus’
expense, and (ii) obtain any necessary import licenses, certificates of origin
or other requisite documents, and pay all applicable customs, duties and taxes
in respect of the importation of the Finished Bulk Products into the Territory
and their sale in the Territory. Santarus may select the freight carrier used by
Supplier or Manufacturer to ship Finished Bulk Product and may monitor
Supplier’s and Manufacturer’s shipping and freight practices as they pertain to
this Agreement. Finished Bulk Product shall be transported in accordance with
the Specifications, cGMP and Applicable Laws. Supplier shall notify Santarus in
writing at the time of shipment as to the quantity of Finished Bulk Product
shipped, the identity of the carrier and the anticipated delivery date. If any
order is delayed and is not likely to be delivered on time, Supplier shall
immediately notify Santarus and Santarus may direct Supplier to ship such order
by expedited means of transportation as designated by Santarus. To the extent
that any such delay is due to any action or failure to act of Supplier or
Manufacturer or otherwise due to matters within Supplier’s or Manufacturer’s
control, Supplier shall bear the expense of any difference in cost for the
expedited means of transportation.

2.5 Title and Risk of Loss. Supplier shall make the Finished Bulk Product
available to the carrier selected by Santarus at Manufacturer’s Facility unless
otherwise mutually agreed in writing. Such title as Supplier or Manufacturer has
in Finished Bulk Product and risk of loss or of damage to Finished Bulk Product
shall remain with Supplier or Manufacturer until Finished Bulk Product are
loaded onto the carrier’s vehicle by Supplier or Manufacturer for shipment at
Supplier’s or Manufacturer’s shipping point at which time title and risk of loss
or damage shall transfer to Santarus. Except as expressly provided otherwise in
this Agreement, Santarus shall be responsible for all charges associated with
shipping of Finished Bulk Product.

2.6 Invoices. Supplier shall invoice Santarus on the date of shipment of the
Finished Bulk Product for the Base Supply Price, in accordance with the
provisions of Article 6 hereof.

2.7 Documentation and Customs. Upon completion of manufacturing and testing of
Finished Bulk Product pursuant to each Firm Purchase Order, Supplier shall
deliver or have Manufacturer deliver to Santarus by electronic means all
requested quality documentation for such Finished Bulk Product manufactured
pursuant to such Firm Purchase Order as specified in the Quality Agreement,
including without limitation, the Certificates of Compliance in respect of such
Firm Purchase Order and, if requested by Santarus, completed batch production
records (collectively, the “Pre-shipping Documentation”). Supplier acknowledges
and agrees that Santarus shall be responsible, at all times, for the final
release of the Finished Bulk Product and

 

 

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accordingly, neither Supplier nor Manufacturer shall ship any Finished Bulk
Product until Santarus has notified Supplier or Manufacturer in writing that it
has completed its final release. Concurrent with the shipment of each Firm
Purchase Order of Finished Bulk Product, the Agent/Carrier shall deliver to
Santarus the customs documentation corresponding to such shipment and such other
documentation and information as may be necessary or desirable for complying
with import, export, and customs laws, regulations and like requirements, as
applicable. All Finished Bulk Product, including its packaging, shall meet all
applicable export and customs laws, regulations and like requirements of the
country where Manufacturer has its seat and, in respect of the United States,
shall be in accordance with the instructions of Santarus in respect of all
applicable import and customs laws, regulations and like requirements for the
United States.

2.8 Late Delivery/Shortages and Overages. If a shipment of Finished Bulk Product
ordered by Santarus under this Agreement has not been delivered at the shipping
point within [***] Business Days after the scheduled delivery date (any delivery
that is more than [***] Business Days after the scheduled delivery date stated
on the corresponding Firm Purchase Order is hereinafter referred to as a “Late
Shipment”), or if the shipment received by Santarus contains less than [***] of
the quantity specified in the corresponding Firm Purchase Order (a “Short
Shipment”), Santarus shall notify Supplier promptly upon such discovery and, in
any event, not later than [***] days after receipt of, or failure to receive,
such ordered Finished Bulk Product. Supplier shall, and shall cause Manufacturer
to, use its best efforts to deliver the quantity of Finished Bulk Product it had
failed to ship in the case of a Late Shipment or the quantity by which the
shipment is short of the quantity ordered in the case of a Short Shipment, as
soon as possible after notification of such shortage, by expedited means of
transportation at Supplier’s expense in respect of any difference in cost for
such expedited means of transportation relative to regular delivery costs. If
any shipment contains more than the quantity ordered, Santarus may elect either
to: (a) return to Supplier, at Supplier’s expense, the excess of the quantity
ordered, or (b) accept any excess quantity ordered and reserve the right to
deduct such excess from future orders. Santarus shall have no obligation to
receive any quantity of Finished Bulk Product in excess of that ordered. In the
event of a Raw Material shortage or shortage due to manufacturing outages or
shortfalls, Supplier will, and will cause Manufacturer to, provide equitable
share of such Raw Material to Santarus as a percentage of firm orders received.

2.9 Key Performance Indicators.

2.9.1 For each quarterly period during the Term, Supplier shall cause
Manufacturer to meet or exceed the written key performance indicators
established in good faith by Supplier and Santarus for such quarterly period
(collectively, as established with respect to the applicable quarterly period,
the “KPIs”). The KPIs shall be mutually agreed to from time to time by the
Parties and the Parties shall review such KPIs at each quarterly review meeting
contemplated by Section 2.11 with the intention of amending, if necessary, the
KPIs in respect of the forthcoming quarterly period.

 

 

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2.9.2 In the event that Supplier or Manufacturer fails to meet one or more of
the KPIs at any time during the term of this Agreement, then Supplier and
Santarus shall work diligently to address such failure including, without
limitation, the following:

(i) Manufacturer’s Qualified Person and the Senior Director of Contract
Manufacturing of Santarus (or such other individual designated by Santarus)
shall discuss within [***] days of the determination of the failure in order to
establish a procedure to address the problem (the “Remediation Plan”). If such
discussion does not occur within such [***] days or if there is no agreement as
to the Remediation Plan (a “Stage 1 Failure”), then clause (ii) shall apply;

(ii) Manufacturer’s Qualified Person and Santarus’ Senior Vice President,
Product Development and Manufacturing will discuss within [***] days of the
Stage 1 Failure in order to establish a Remediation Plan. If such discussion
does not occur within such [***] days or if there is no agreement as to the
Remediation Plan (a “Stage 2 Failure”), then clause (iii) shall apply; and

(iii) Supplier’s Responsible Executive and Santarus’ Responsible Executive shall
discuss within [***] days of the Stage 2 Failure in order to establish a
Remediation Plan.

If the Remediation Plan is either not mutually agreed upon or is not implemented
satisfactorily, then the Parties may pursue additional dispute resolution and
recourse in accordance with Article 13. The Parties may mutually agree to extend
any of the time periods referenced in this Section 2.9.

2.9.3 Notwithstanding anything to the contrary in this Section 2.9, Supplier
shall not be responsible for the failure to achieve the KPIs to the extent
caused by any of the following events:

(i) Santarus’ failure to deliver Forecasts in accordance with Section 2.3.2;

(ii) Santarus’ failure to timely deliver amended Specifications in the event
that the Specifications are amended pursuant to Section 3.6.1 or 3.6.2;

(iii) Santarus’ failure to deliver the Firm Purchase Orders in accordance with
Sections 2.3.3 and 2.3.4; or

(iv) Santarus’ failure to timely complete the final release of the Finished Bulk
Product in the absence of any production or quality issues.

2.10 Storage of Finished Bulk Product. Until Finished Bulk Product is shipped,
Supplier shall have Manufacturer store all Finished Bulk Product identifiably
distinct from any other raw material and finished or filled product stocks and
shall comply with all storage requirements set forth in the Specifications.
Supplier shall assume responsibility for any loss or damage to such Finished
Bulk Product while stored by Supplier or Manufacturer.

2.11 Cooperation and Quarterly Review. Each Party shall forthwith upon execution
of this Agreement designate those of its employees to be part of the team
responsible for

 

 

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managing the relationship between the Parties (the “Relationship Team”). The
Relationship Team from each Party shall meet in person or by telephone or video
conference not less than quarterly to review the current status of the
manufacturing relationship (including performance against the KPIs as well as
any additional manufacturing performance indicators established by the Parties)
and address any issues that have arisen.

2.12 Protection in the event of failure to supply. Supplier and Manufacturer
shall consult with and keep Santarus reasonably informed concerning any
potential inability to supply and related remediation and back-up supply
activities. Supplier shall store in a location different from that of
Manufacturer and compliant with all storage requirements set forth in the
Specifications a quantity of Finished Bulk Products capable to cover not less
than [***] months of supply requirements according to the most recent Forecast.
All expenses related to such storage, including transportation to and from the
Facility, shall be borne by Supplier. In the event of a failure to supply whose
effects may extend over a [***] months or greater time frame in the reasonable
judgment of Supplier and Santarus, Supplier shall: a) select a second
manufacturer (“Back-Up Manufacturer”) and ensure that such Back-Up Manufacturer
has all necessary Regulatory Approvals to fulfill the obligations of Supplier
and Manufacturer hereunder; b) transfer to Back-Up Manufacturer all information
and technology required to manufacture Finished Bulk Products; and c) have
Back-Up Manufacturer be ready to manufacture the Finished Bulk Products at the
terms and conditions set forth by this Agreement in such a time frame to avoid
any Finished Bulk Products shortage. All expenses related to the selection of
the Back-Up Manufacturer, the information and technology transfer and the set-up
of supply, and obtaining regulatory approvals therefor, shall be borne by
Supplier. Supplier retains the right to transfer the manufacture of Finished
Bulk Products back to Manufacturer as soon as it is able to resume
manufacturing. Should Supplier or any of its Affiliates set-up a back-up
facility for the purpose of manufacturing Finished Bulk Products, Supplier shall
be entitled to transfer to such back-up facility a reasonable part of the supply
at its own cost and expenses, subject to obtaining all necessary Regulatory
Approvals therefor. Santarus shall provide reasonable assistance to Supplier in
connection with ensuring that appropriate Regulatory Approvals for the
activities hereunder are obtained and maintained.

ARTICLE 3

STANDARDS OF MANUFACTURE

3.1 Finished Bulk Product. Supplier hereby covenants on behalf of itself and
Manufacturer that all Finished Bulk Product manufactured and supplied to
Santarus under this Agreement: (a) shall have been manufactured, packaged,
tested and stored in compliance with the Specifications, cGMP, Applicable Laws
and the terms and conditions of this Agreement and the Quality Agreement;
(b) shall not be adulterated, or misbranded within the meaning of the FFDCA or
other Applicable Laws as of the time that the Finished Bulk Product is delivered
to the carrier at Supplier’s or Manufacturer’s shipping point; and (c) shall be
shipped not more than [***] months from the start of its manufacture, as defined
as issuance of API into the process. The foregoing obligations are referred to
in this Agreement as the “Supplier Manufacturing Responsibilities.”

3.2 Manufacturing Facility. Supplier will have Manufacturer manufacture Finished
Bulk Product at the Facility. Supplier shall not, either itself or through
Manufacturer or any

 

 

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other Affiliate, manufacture any Finished Bulk Product in any other facility
without first obtaining all necessary or appropriate Regulatory Approvals and
Santarus’ prior written consent, such consent not to be unreasonably withheld.

3.3 Testing and Release by Supplier. Prior to shipping (or temporarily storing,
if requested by Santarus) any order, Supplier shall have Manufacturer test each
batch of Finished Bulk Product manufactured under this Agreement, and Raw
Materials used for such batch, for conformity with the Specifications (“Supplier
Release Testing”). Supplier shall have Manufacturer conduct all such Supplier
Release Testing in accordance with the procedures and using the analytical
testing methodologies set forth in the Specifications and the Quality Agreement.
Santarus shall be responsible, at all times, for the final release of the
Finished Bulk Product, and neither Supplier nor Manufacturer shall ship any
Finished Bulk Product until Santarus has completed its release. Supplier shall
have Manufacturer retain sufficient quantities of all shipped Finished Bulk
Product and Raw Materials to perform at least full duplicate quality control
testing. Retained repository samples of all shipped Finished Bulk Product and
Raw Materials shall be maintained in a suitable storage facility until [***]
after expiry of the Finished Bulk Product lot in which the material was used or
such longer period as may be required by Applicable Laws. If materials are used
in several lots of Finished Bulk Product, retained repository samples shall be
maintained as set forth above until [***] after expiry of the last Finished Bulk
Product lot in which such material was incorporated, or such longer period as
may be required by Applicable Laws. All such samples shall be available for
inspection and testing by Santarus at reasonable intervals upon reasonable
notice.

3.4 Stability Studies. As part of its manufacturing obligations, Supplier shall
have Manufacturer conduct stability studies on each of the Finished Commercial
Products according to the Specifications therefore, at Supplier’s expense and at
no additional charge to Santarus, as required by the FDA or Government
Authorities as advised by Santarus or as requested by Santarus, and in any case
on at least one batch of Finished Commercial Product from the Facility at least
[***] per [***] or more frequently as may be specified in the Quality Agreement.
Supplier shall provide to Santarus a report of all results and data obtained
from such stability studies annually or more frequently as may be specified in
the Quality Agreement.

3.5 Acceptance Procedures.

3.5.1 Finished Bulk Product Claims. Santarus has the right to reject any portion
of any shipment of Finished Bulk Product that deviates from the Supplier
Manufacturing Responsibilities, without invalidating any remainder of such
shipment. Santarus or its agent shall visually inspect the Finished Bulk Product
manufactured by Supplier and Manufacturer upon receipt thereof and shall give
Supplier written notice (a “Deficiency Notice”) of all claims for Finished Bulk
Product that deviate from the Supplier Manufacturing Responsibilities within
[***] days after Santarus’ receipt thereof (or, in the case of any defects not
reasonably susceptible to discovery upon receipt by visual inspection of the
Finished Bulk Product, including those requiring laboratory analysis, within
[***] days after discovery thereof by Santarus). Should Santarus fail to provide
Supplier with the Deficiency Notice within the applicable [***]–day period, then
the delivery shall be deemed to have been accepted by Santarus on the [***] day
after delivery or discovery, as applicable.

 

 

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3.5.2 Determination of Deficiency. Upon receipt of a Deficiency Notice, Supplier
shall have [***] days to advise Santarus by notice in writing that it disagrees
with the contents of such Deficiency Notice. If Santarus and Supplier fail to
agree within [***] days after Santarus’ receipt of Supplier’s notice as to
whether any Finished Bulk Product identified in the Deficiency Notice deviates
from the Supplier Manufacturing Responsibilities, then the Parties shall
mutually select an independent laboratory to evaluate if the Finished Bulk
Product deviates from the Supplier Manufacturing Responsibilities. No product
testing outside of the approved methods and procedures identified in the Quality
Agreement or product NDA shall be performed by the Supplier, Manufacturer or any
Third Party test laboratory without concurrence by both Parties. Such evaluation
shall be binding on the Parties, and if such evaluation certifies that any
Finished Bulk Product deviates from the Supplier Manufacturing Responsibilities,
Santarus may reject such Finished Bulk Product in the manner contemplated in
this Section 3.5. If such evaluation does not so certify in respect of any such
Finished Bulk Product, then Santarus shall be deemed to have accepted delivery
of such Finished Bulk Product on the [***] day after delivery (or, in the case
of any defects not reasonably susceptible to discovery upon receipt by visual
inspection of the Finished Bulk Product, including those requiring laboratory
analysis, on the [***] day after discovery thereof by Santarus). The expenses of
such testing shall be borne by Supplier if the non-conformity with the Supplier
Manufacturing Responsibilities is confirmed, and otherwise by Santarus. The
Parties mutually agree that they shall resolve all determinations of
deficiencies as quickly as possible, and in any event, within [***] days of a
Deficiency Notice.

3.5.3 Supplier Responsibility. In the event Santarus rejects Finished Bulk
Product in accordance with this Section 3.5 and the rejected Finished Bulk
Product is determined not to conform to the Supplier Manufacturing
Responsibilities, Supplier shall promptly, at Santarus’ election, either:
(i) refund the invoice price for such defective Finished Bulk Product;
(ii) offset such amount against other amounts due to Supplier hereunder; or
(iii) replace such Finished Bulk Product with conforming Finished Bulk Product
as soon as reasonably possible without Santarus being liable for payment
therefor. Nothing in this Section 3.5.3 shall be construed to limit the rights
and remedies available to Santarus at law or in equity.

3.6 Specification Amendments.

3.6.1 Cooperation. The Parties shall cooperate with each other to amend or
supplement the Specifications to the extent necessary to comply with changes in
cGMP, Applicable Laws or other requirements of Government Authorities. If an
amendment to the Specifications requires FDA approval and/or the approval of
another Government Authority, neither Supplier nor Manufacturer shall implement
such change unless and until the necessary approval has been obtained by
Santarus in writing. In no event shall Supplier implement or have Manufacturer
implement any other modification or addition to the Specifications, including
without limitation, changes in Raw Materials, equipment or methods of production
or testing for the Finished Bulk Product, without the prior written consent of
Santarus, which consent may be withheld in Santarus’ sole and absolute
discretion.

3.6.2 Santarus’ Request for Change. Santarus shall have the right to amend the
Specifications from time to time.

 

 

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3.6.3 Supplier’s Request for Change. If Supplier wishes to make any change to
the Specifications, Supplier shall notify Santarus, and such notice shall
describe the proposed change and the impact of such change on the manufacturing
process, including details of any changes in manufacturing costs. Santarus may
accept or reject, in its sole and absolute discretion, any such change proposed
by Supplier.

3.6.4 Cost. For clarity, Supplier shall bear all manufacturing and supply
related costs associated with amending, supplementing, or changing the
Specifications.

3.7 Records. Supplier shall have Manufacturer maintain all records necessary to
comply with cGMP and Applicable Laws relating to the manufacture, packaging,
testing, storage and shipment of Finished Bulk Product. All such records shall
be maintained for such period as may be required by Applicable Laws; provided,
however, that all records relating to the manufacture, stability and quality
control of each batch of Finished Bulk Product shall be retained until the
Parties agree in writing to dispose of such records.

3.8 Audit. Upon reasonable prior notice and at reasonable intervals no more than
once per year, Supplier shall allow Santarus and its representatives to inspect
Supplier’s and Manufacturer’s books and records relating to the manufacture of
the Finished Bulk Product and permit Santarus to access any Facility for the
purposes of (a) making quality assurance audits of the facilities and of the
procedures and processes used by Supplier or Manufacturer in manufacturing,
packaging, testing, storing and shipping Finished Bulk Product, and
(b) confirming Supplier’s and Manufacturer’s compliance with this Agreement,
provided that a Supplier representative is present during any such inspection.
Santarus, or its representative(s), shall conduct such audit during normal
business hours at a time on which the Parties have mutually agreed, and in such
a manner that does not unreasonably interfere with Supplier’s or Manufacturer’s
normal business activities.

ARTICLE 4

REGULATORY MATTERS AND QUALITY CONTROL

4.1 Compliance by Supplier. Supplier shall remain in compliance, and shall have
Manufacturer remain in compliance, with all Applicable Laws, including cGMP, at
all times during the Term and, without limiting the generality of the foregoing,
maintain a quality control program consistent with cGMP as required by the FDA
and any other applicable Government Authorities.

4.2 Santarus’ Regulatory Responsibility. Santarus shall be responsible for
obtaining and maintaining the NDA for the Finished Commercial Product. Supplier
will, or will cause Manufacturer to, supply to Santarus from time to time, all
such data relating to the Finished Bulk Product and/or Finished Commercial
Product, including release test results, complaint test results, all
investigations (in manufacturing, testing and storage), and the like, that
Santarus reasonably requires in order to complete any regulatory filing or
approval, including any annual product review report that Santarus is required
to file with the FDA and as provided in the Quality Agreement. At Santarus’
request Supplier or Manufacturer will prepare annual product review reports (as
further specified in the Quality Agreement) on behalf of Santarus and in
accordance with Santarus’ instructions.

 

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4.3 Manufacturing Process. If any process event or deviation occurs during the
manufacturing of any Finished Bulk Product, which event is likely to affect the
safety, efficacy or regulatory status of the Finished Bulk Product or Finished
Commercial Product, then Supplier shall promptly notify Santarus in writing no
later than [***] hours after first discovery by Supplier or Manufacturer.
Supplier shall also report or have Manufacturer report to Santarus in writing
any other atypical process event or deviation that even though, it may not be
perceived to affect the safety, efficacy or regulatory status of the Finished
Bulk Product or Finished Commercial Product, Santarus can assess the potential
affect it may have on the cGMP compliance or releasability of the product,
Further, Supplier shall, or shall cause Manufacturer to, fully and appropriately
investigate and report to Santarus on all complaints and notices of quality
issues concerning the Finished Bulk Product or Finished Commercial Product from
the FDA or any other Government Authority of which Santarus shall have given
Supplier notice. Santarus and Supplier shall consult with each other as to the
disposition of all affected batches of such Finished Bulk Product or Finished
Commercial Product. No API or Finished Bulk Product may be reprocessed without
the prior written consent of Santarus.

4.4 Communications. Each Party may communicate with the FDA or any other
Government Authority regarding the Finished Bulk Product if such communication
is necessary to comply with the terms of this Agreement or the requirements of
any Applicable Law, governmental order or regulation; provided, however, in the
event such requirement applies to Supplier or Manufacturer, Supplier shall
notify Santarus in writing of the requirement and pending communication and,
unless there is a legal prohibition against doing so, Supplier shall permit
Santarus to accompany Supplier and Manufacturer and take part in any
communications with the FDA or any other Government Authority, and to receive
copies of all such communications to and from the FDA or any other Government
Authority.

4.5 Government Inspection.

4.5.1 Supplier shall make or have Manufacturer make its internal practices,
books and records relating to its manufacture of the Finished Bulk Product
available and allow or have Manufacturer allow access to all facilities used for
manufacturing the Finished Bulk Product to the FDA and any other Government
Authority having jurisdiction over the manufacture of the Finished Bulk Product
or Finished Commercial Product for the purposes of determining Supplier’s and
Manufacturer’s compliance with cGMP and Applicable Laws.

4.5.2 Supplier agrees to advise or have Manufacturer advise Santarus by
telephone and/or facsimile and/or e-mail immediately of any proposed or
announced visit or inspection, and as soon as possible but in any case within
[***] hours after any unannounced visit or inspection, by the FDA or any other
Government Authority relating to the Finished Bulk Product. Supplier shall
provide Santarus with a reasonable description in writing of each such visit or
inspection promptly (but in no event later than [***] days) thereafter, and with
copies of any letters, reports or other documents (including form 483’s) issued
by any such authorities that relate to the Finished Bulk Product. Santarus may
review Supplier’s and Manufacturer’s responses to any such reports and
communications prior to Supplier or Manufacturer submitting any response to the
FDA, or any Government Authority, and Santarus’ comments and suggestions shall,
in Supplier’s reasonable discretion, be incorporated into such response. In no
event shall Supplier or Manufacturer commit to any changes to the manufacturing
process, equipment, tests and/or specifications concerning the Finished Bulk
Product, without Santarus’ prior approval.

 

 

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4.5.3 If the FDA or any other Government Authority conducts an inspection of the
Facility in circumstances that are not related to the manufacturing of the
Finished Product (as contemplated by subsection 4.5.2 above) and issues a 483
observation, inspection report or other formal or informal document in respect
of such inspection which questions Supplier’s or Manufacturer’s compliance with
cGMP standards relating to operations at the Facility which otherwise could have
an adverse impact on the Finished Bulk Product or Finished Commercial Product
then Supplier shall notify Santarus promptly (but in no event later than [***]
days) after Supplier or Manufacturer first receives a written copy of such
observation, report or document.

4.5.4 Supplier and Manufacturer shall keep Santarus informed of (i) the
remediation plan Supplier or Manufacturer adopts to alleviate any concerns
raised by the FDA or any other Government Authority contemplated by Sections
4.5.2 or 4.5.3, (ii) progress in implementing the remediation plan and (iii) the
formal responses of the FDA or other Government Authority to such remediation
plan and its implementation.

4.6 Environmental and Other Laws and Regulations. In carrying out its
obligations under this Agreement, Supplier shall comply and have Manufacturer
comply with all applicable environmental and health and safety laws (current or
as amended or added), and shall be solely responsible for determining how to
comply with same in carrying out these obligations.

4.7 Facility Permits and Licenses. Supplier shall obtain and maintain and shall
have Manufacturer obtain and maintain all necessary licenses, permits and
governmental approvals (except for product-related Regulatory Approvals such as
NDA’s) required to perform its manufacturing and supply services hereunder,
including licensure and permitting of its manufacturing facilities by the FDA
and other Government Authorities.

4.8 End-User Inquiries and Complaints. Subject to Supplier’s and Manufacturer’s
obligation to report certain information on a more expedited basis in respect of
Adverse Experiences as described in Section 5.1 below, Supplier shall notify and
refer to Santarus, within [***] Business Days after receipt, all communications
from end-users of the Finished Commercial Product, including without limitation,
inquiries regarding the Finished Commercial Product and its uses, and
complaints, comments and suggestions regarding the Finished Commercial Product
and its effects on users. Santarus shall have the sole right to respond to all
such communications and Supplier and Manufacturer shall provide to Santarus
reasonable cooperation and assistance in effecting such responses.

4.9 Quality Agreement. The Parties shall enter into the Quality Agreement within
[***] days following the execution of this Agreement.

ARTICLE 5

ADVERSE EVENTS; RECALL

5.1 Adverse Experience Reporting. Supplier shall notify or shall have
Manufacturer notify Santarus promptly and not later than [***] hours after
Supplier or Manufacturer first becomes aware of (a) any information concerning
any potentially serious or

 

 

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unexpected side effect, injury, toxicity or sensitivity reaction or any
unexpected incidence or other adverse experience (an “Adverse Experience”) and
the severity thereof associated with the use of the Finished Commercial Product,
whether or not determined to be attributable to the Finished Bulk Product; or
(b) any information regarding any pending or threatened action which may affect
the safety or efficacy claims of the Finished Commercial Product or the
continued marketing of the Finished Commercial Product in any nation or
jurisdiction. Further and without limiting the foregoing, Supplier shall have
Manufacturer notify Santarus by telephone and facsimile within [***] hours after
Supplier or Manufacturer first becomes aware of any serious Adverse Experience
that gives cause for concern or is unexpected or that is fatal, life-threatening
(as it occurred), permanently disabling, requires (or prolongs) inpatient
hospitalization, represents a significant hazard, or is a cancer or a congenital
anomaly or represents an overdose, or any other circumstance that might
necessitate a recall, expedited notification of FDA or any other relevant
Government Authorities or a significant change in the label of the Finished
Commercial Product, including, without limitation, information concerning any
incident that causes Finished Commercial Product or its labeling to be mistaken
for or, applied to, another product, information concerning any bacteriological
contamination, or any significant chemical, physical, or other change or
deterioration in the Finished Bulk Product, or any failure of one or more
batches of Finished Bulk Product shipped to Santarus to meet Specifications or
to conform with Applicable Laws, and any deviation from the specified
environmental conditions for shipping or storage of the Finished Bulk Product.
To the extent that Santarus becomes aware of any Adverse Experience that appears
to be related to the manufacture of Finished Bulk Product, Santarus shall notify
Supplier promptly and not later than [***] hours after Santarus becomes aware of
such Adverse Experience. In connection with any such Adverse Experience, each
Party shall make such reports as are necessary to comply with Applicable Laws,
at its sole expense. Further, in the event a Party (or its Affiliates) receives
a communication or directive from a Government Authority commencing or
threatening seizure of Finished Commercial Product, or other removal from the
market of Finished Commercial Product, such Party shall transmit such
information to the other Party within twenty-four (24) hours of receipt.

5.2 Notification and Recall. The handling of recalls and withdrawals of Finished
Commercial Product shall be within the sole discretion of Santarus (as the NDA
holder), unless otherwise required by Applicable Laws. If any Government
Authority issues or requests a recall or takes similar action in connection with
Finished Commercial Product, or if Santarus determines that an event, incident
or circumstance has occurred which may reasonably result in the need for a
recall or market withdrawal (collectively, “Recalls”), Santarus shall, within
[***] hours, advise Supplier thereof by telephone or facsimile or e-mail, after
which the Parties shall promptly discuss and work together to effect an
appropriate course of action. If Supplier or Manufacturer anticipates that a
Recall may be necessary, Supplier shall notify and consult with Santarus as soon
as it has notice of the reasons for the Recall, such notification to be given
within [***] hours. Notification to FDA (or such other Government Authority) and
conducting such Recall shall be the responsibility of Santarus. Supplier and
Manufacturer shall cooperate fully with Santarus in the event of any such Recall
of any affected Finished Commercial Product.

5.3 Recall Expense. Supplier shall bear the full and reasonable expenses of both
Parties and Manufacturer incurred in any Recall to the extent resulting from a
failure of Supplier, Manufacturer or their respective suppliers or
subcontractors to manufacture the Finished Bulk Product or the Raw Materials
(including the API) in accordance with the Supplier Manufacturing

 

 

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Responsibilities, and in all other circumstances Santarus shall bear the full
and reasonable expenses of both Parties incurred in any Recall; provided,
however, that neither Supplier nor Manufacturer shall incur any material
expenditures without the prior written consent of Santarus. Such expenses of
Recall shall include, without limitation, the expenses of notification and
destruction or return of the recalled Finished Commercial Product, distribution
of replacement product and all sums paid by Third Parties for the recalled
Finished Commercial Product. Without limiting the foregoing, to the extent any
Recall is caused by Supplier or Manufacturer breach of any representation,
warranty or covenant of this Agreement, Supplier and Manufacturer shall be
liable for and shall indemnify Santarus against all reasonable costs incurred by
Santarus in implementing such Recall, and further, at Santarus’ election,
Supplier and Manufacturer shall reimburse Santarus for its packaging costs
incurred with regard to the Finished Commercial Product and either (i) replace
the volume of recalled Finished Bulk Product as soon as reasonable practicable,
but in no event later than [***] days after the date of the Recall, or
(ii) reimburse Santarus in an amount equal to the amount paid by Santarus for
the recalled Finished Bulk Product, together with all out-of-pocket expenses
related thereto. Nothing in this Section 5.3 shall be construed to limit the
rights and remedies available to Santarus at law or in equity.

ARTICLE 6

COMPENSATION; PAYMENT

6.1 Price of Finished Bulk Product. Santarus shall pay the Base Supply Price and
the Additional Supply Price (each as defined below, and collectively referred to
herein as the “Price”) for the Finished Bulk Product, which Price shall
constitute payment in full for such Finished Bulk Product and shall include the
cost of all Raw Materials.

6.1.1 Base Supply Price. Santarus shall pay Supplier a base supply price equal
to [***] per Unit (the “Base Supply Price”) within [***] days following receipt
of the invoices issued pursuant to Section 2.6.

6.1.2 Additional Supply Price. Santarus shall pay Supplier an additional supply
price (the “Additional Supply Price”) equal to (a) ten percent (10%) of Net
Sales in the Territory during each quarterly period during the Term, less
(b) the Base Supply Price times the number of Units sold during the same
quarterly period. The Additional Supply Price shall be payable in accordance
with the terms of Section 4 of the License Agreement.

6.2 Pre-Launch Shipments. To assist Santarus with preparing for initial
commercial launch of the Finished Commercial Product, Supplier agrees to cause
Manufacturer to ship to Santarus [***] lots (approximately [***] Units) of
Finished Bulk Product for delivery in [***] (the “Pre-Launch Materials”).
Notwithstanding Section 6.1 above, Santarus shall not be obligated to pay the
Price for such Pre-Launch Materials [***]. [***] it shall pay the Price for such
Pre-Launch Materials in accordance with Article 6 hereof. [***] Santarus shall
be entitled to return the Pre-Launch Materials to Supplier (with Supplier taking
title to such Pre-Launch Materials at the time the materials are loaded onto the
carrier’s vehicle by Santarus (or its designee) for shipment at Santarus’ (or
its designee’s) shipping point, and Santarus shall be responsible for only the
shipping charges associated therewith).

 

 

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6.3 Invoicing. Supplier shall send all invoices by email or facsimile to the
email address or facsimile number of the accounts payable personnel designated
by Santarus from time to time. Supplier’s invoice shall reference the Firm
Purchase Order number, product item code, quantity ordered, quantity shipped,
requested delivery date, lot release date and be sent to the “Bill to” address
of Santarus specified on the Firm Purchase Order, and Supplier’s packing list
must reference the Firm Purchase Order number and be sent to the applicable
“Ship to” address on the Firm Purchase Order.

6.4 Form of Payment. Each Party shall make all payments due the other Party
under this Agreement in U.S. Dollars by wire transfer of immediately available
funds to such account notified by the receiving Party from time to time to the
other Party in writing.

6.5 Taxes. Santarus shall withhold from any payment to Supplier under this
Agreement any taxes required to be withheld by Santarus under Applicable Laws.
Upon request, Santarus shall provide Supplier with authority for the withholding
obligation, documentation of such withholding and payment in a manner that is
satisfactory for purposes of such taxing authority. Any withholdings paid when
due hereunder shall be for the account of Supplier. The Parties acknowledge that
Supplier will not be assessing value added tax (or VAT) on Santarus invoices.

6.6 Disputed Invoices. In the event that Santarus disputes any amounts under any
invoice for Finished Bulk Product supplied by Supplier, such dispute shall be
resolved in accordance with Section 3.5 (with respect to non-conformance of
Finished Bulk Product) or otherwise under Article 13. Pending resolution of such
dispute, Santarus shall be obligated to pay any amounts under such invoice that
are not in dispute. Upon resolution of any such dispute in favor of Supplier,
Santarus shall pay all remaining amounts owing under such invoice within the
later of [***] Business Days after such resolution or [***] days after the date
of receipt of such invoice.

6.7 Packaging Start-Up and Ongoing Costs. Supplier shall reimburse Santarus
within [***] days following receipt of invoice for all fees and expenses charged
by Santarus’ third party packager and incurred by Santarus in connection with
the set-up, initiation and validation of the packaging process for, as well as
ongoing packaging of, the Finished Commercial Product, which includes but is not
limited to equipment tooling, change parts, packaging materials and labels,
qualification, validation, and associated third party fees. Santarus will keep
Supplier reasonably informed, upon request, concerning its packaging activities.
Notwithstanding the generality of the foregoing, Supplier agrees to cause
Manufacturer to ship [***] Units to Santarus (or its designee), free of charge
and for delivery in [***], for use in packaging qualification activities.

 

 

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ARTICLE 7

RAW MATERIALS

7.1 Purchase of Finished Bulk Product Raw Materials. Supplier shall, or shall
cause Manufacturer to, purchase, at its cost and expense, all raw materials and
other ingredients, including API, excipients and components for the manufacture
and shipment of the Finished Bulk Product (collectively, “Raw Materials”).

7.2 Storage of API and Raw Materials. Supplier shall have Manufacturer receive
and store the API and Raw Materials at Supplier’s storage facility at the
Facility with due care and attention to the requirements set forth in the
Quality Agreement and in accordance with cGMP and Applicable Laws so as to
protect such materials from loss or damage. Supplier will, or will cause
Manufacturer to, track API usage with inventory levels being visible to
Santarus.

ARTICLE 8

CONFIDENTIALITY

8.1 Confidentiality; Exceptions. The Parties agree that, for the Term and for
[***] years thereafter (other than for trade secrets, for which the
confidentiality obligations set forth herein shall last as long as trade secret
law shall allow), all non-public, proprietary or “confidential” disclosures,
know-how, data, and technical, financial and other information of any nature
whatsoever (collectively, “Confidential Information”), disclosed or submitted,
either orally or in writing (including, without limitation, by electronic means)
or through observation, by one Party (the “Disclosing Party”) to the other Party
(the “Receiving Party”) hereunder, including, without limitation, the terms of
this Agreement, shall be received and maintained by the Receiving Party in
strict confidence, shall not be used for any purpose other than the purposes
expressly contemplated by this Agreement, and shall not be disclosed to any
Third Party (including, without limitation, in connection with any publications,
presentations or other disclosures). Notwithstanding the foregoing, Santarus may
disclose on a need-to-know basis the existence of this Agreement and the terms
hereof to any bona fide potential acquirers, corporate partners, investors or
financial advisors. The Receiving Party will promptly notify the Disclosing
Party upon discovery of any unauthorized use or disclosure of the Disclosing
Party’s Confidential Information. Confidential Information belongs to and shall
remain the property of the Disclosing Party.

8.2 Exceptions. The provisions of this Article 8 shall not apply to any
information of the Disclosing Party which can be shown by competent evidence by
the Receiving Party:

8.2.1 To have been known to or in the possession of the Receiving Party prior to
the date of its actual receipt from the Disclosing Party;

8.2.2 To be or to have become readily available to the public other than through
any act or omission of any Party in breach of any confidentiality obligations
owed to the Disclosing Party;

8.2.3 To have been disclosed to the Receiving Party, other than under an
obligation of confidentiality, by a Third Party which had no obligation to the
Disclosing Party not to disclose such information to others; or

 

 

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8.2.4 To have been subsequently independently developed by the Receiving Party
without use of or reference or access to the Disclosing Party’s Confidential
Information.

8.3 Authorized Disclosure. The Receiving Party may disclose the Disclosing
Party’s Confidential Information hereunder solely to the extent (a) approved by
the Disclosing Party; or (b) the Receiving Party is legally required to disclose
such Confidential Information, provided, however, that prior to any such
required disclosure, the Receiving Party will, except where impracticable, give
reasonable advance notice to the Disclosing Party of such disclosure (so that
the Disclosing Party may seek a protective order and or other appropriate remedy
or waive compliance with the confidentiality provisions of this Article) and
will use its reasonable efforts to secure confidential treatment of such
Confidential Information required to be disclosed.

8.4 Return of Confidential Information. The Receiving Party shall keep the
Disclosing Party’s Confidential Information in appropriately secure locations.
Upon the expiration or termination of this Agreement, the Receiving Party shall
destroy or return to the Disclosing Party, at the Disclosing Party’s written
request, all Confidential Information belonging to the Disclosing Party
possessed by the Receiving Party, or its officers, directors, employees, agents
and consultants; provided however that a Receiving Party may retain one (1) copy
of the Disclosing Party’s Confidential Information in an appropriately secure
location, which by Applicable Laws it must retain, for so long as such
Applicable Laws require such retention but thereafter shall dispose of such
retained Confidential Information in accordance with Applicable Laws or this
Section 8.4.

8.5 Equitable Relief. The Receiving Party agrees that, due to the unique nature
of the Confidential Information, the unauthorized disclosure or use of the
Confidential Information of the Disclosing Party may cause irreparable harm and
significant injury to the Disclosing Party, the extent of which may be difficult
to ascertain and for which there may be no adequate remedy at law. Accordingly,
the Receiving Party agrees that the Disclosing Party, in addition to any other
available remedies, shall have the right to seek an immediate injunction and
other equitable relief enjoining any breach or threatened breach of this
Agreement. The Receiving Party shall notify the Disclosing Party in writing
immediately upon the Receiving Party’s becoming aware of any such breach or
threatened breach.

ARTICLE 9

INTELLECTUAL PROPERTY MATTERS

9.1 Ownership of Patent Rights. Supplier shall solely own Supplier Patent
Rights. Santarus shall solely own Santarus Patent Rights. Supplier and Santarus
shall jointly own Joint Patent Rights.

9.2 Rights of Santarus under Supplier Patent Rights and Joint Patent Rights.
Supplier Patent Rights shall be deemed Patents under the License Agreement.
Joint Patent Rights shall be deemed Patents under the License Agreement with
respect to Supplier’s interest in such Joint Patent Rights; provided, however,
that such Joint Patent Rights shall be deemed not to contain a Valid Claim for
the purposes of Section 1.22 of the License Agreement.

 

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9.3 Santarus Patent Rights. Santarus shall have the sole right, but shall not be
obligated to, file, prosecute, maintain, and enforce Santarus Patent Rights at
its sole discretion and expense. Santarus Patent Rights shall be deemed not to
contain a Valid Claim for the purposes of Section 1.22 of the License Agreement.

ARTICLE 10

REPRESENTATIONS, WARRANTIES AND COVENANTS

10.1 Representations and Warranties of the Parties. Each Party represents,
warrants and covenants to the other Party that:

10.1.1 such Party is duly organized and validly existing and in good standing
under the laws of the jurisdiction of its formation;

10.1.2 such Party has the full corporate power and is duly authorized to enter
into, execute and deliver this Agreement, and to carry out and otherwise perform
its obligations thereunder;

10.1.3 this Agreement has been duly executed and delivered by, and is a legal
and valid obligation binding upon such Party and the entry into, the execution
and delivery of, and the carrying out and other performance of its obligations
under this Agreement by such Party (a) does not conflict with, or contravene or
constitute any default under, any agreement, instrument or understanding, oral
or written, to which it is a party, including, without limitation, its
certificate of incorporation or by-laws, and (b) does not violate Applicable Law
or any judgment, injunction, order or decree of any Government Authority having
jurisdiction over it; and

10.1.4 in connection with its performance under this Agreement, it shall comply
with Applicable Laws.

10.2 Additional Representations, Warranties and Covenants of Supplier. In
addition to representations and warranties set forth elsewhere in this
Agreement, Supplier (on behalf of itself and Manufacturer) further represents,
warrants to, and covenants with, Santarus that:

10.2.1 The Finished Bulk Product shall be manufactured and supplied in
accordance with the Supplier Manufacturing Responsibilities.

10.2.2 At all times during the Term, all parts of the Facility that are
associated with the testing and storage of the API and Raw Materials and the
manufacturing, packaging, testing and storage of the Finished Bulk Product shall
remain in compliance with all Applicable Laws, and all other parts of the
Facility shall remain, in all material respects, in compliance with all
Applicable Laws.

10.2.3 Supplier shall have Manufacturer obtain and maintain all necessary
licenses, permits or approvals required by Applicable Laws in connection with
the manufacture, packaging, testing and storage of the Finished Bulk Product,
including, without limitation, permits related to manufacturing facilities.

 

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10.2.4 Manufacturer’s manufacturing facilities are cGMP compliant, licensed and
in good standing with the FDA and any other applicable Government Authority.

10.2.5 Supplier has disclosed to Santarus any and all form 483’s, warning
letters or similar notices relating to Manufacturer’s Facility and import alerts
for any other products manufactured in such Facility issued during the last five
(5) years.

10.2.6 Title to all the Finished Bulk Product sold hereunder shall pass to
Santarus free and clear of any security interest, lien or other encumbrance.

10.2.7 Throughout the Term, Supplier shall have Manufacturer maintain,
sufficient facilities, resources, and a work force suitably qualified and
trained to meet its obligations to supply the Finished Bulk Product to Santarus
pursuant to this Agreement.

10.2.8 None of Supplier, Manufacturer its Affiliates, or any Third Party under
its direction or control is: (a) currently excluded from a federal or state
health care program under Sections 1128 or 1156 of the Social Security Act, 42
U.S.C. §§ 1320a-7, 1320c-5 as may be amended or supplemented; (b) otherwise
currently excluded from contracting with the federal government or (c) otherwise
currently excluded, suspended, or debarred from any federal or state program.
Supplier shall immediately notify Santarus if, at any time during the Term,
Supplier, Manufacturer, its Affiliates, or any Third Party under its direction
or control is convicted of an offense that would subject it or Santarus to
exclusion, suspension, or debarment from any federal or state program in the
Territory.

10.2.9 The manufacture of the Finished Bulk Product in accordance with this
Agreement does not infringe any Third Party rights (including, without
limitation, any intellectual property rights).

10.2.10 Neither Supplier nor Manufacturer is aware of any pending or threatened
claims against Supplier or Manufacturer asserting that any of the activities of
Supplier or Manufacturer relating to the manufacture, import, use, or sale of
pharmaceutical products, or the conduct of the activities contemplated herein by
Santarus, infringe, misappropriate, or violate the rights of any Third Party.

10.3 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PARTIES
MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EITHER EXPRESS OR
IMPLIED, WRITTEN OR ORAL, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF
MERCHANTABILITY, WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, OR WARRANTY OF
NON-INFRINGEMENT.

ARTICLE 11

TERM AND TERMINATION

11.1 Term. This Agreement shall commence as of the Effective Date and shall
continue in full force for so long as the License Agreement is in effect, unless
otherwise mutually agreed by the Parties or unless otherwise earlier terminated
as set forth herein (the “Term”).

 

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11.2 Termination for Cause. In the event that either Party has failed to remedy
a material breach of any of its representations, warranties or other obligations
under this Agreement within sixty (60) days (the “Remediation Period”) following
receipt of a written notice thereof (the “Breach Notice”) from the other party
that expressly states that it is a notice under this Section 11.2, the
non-breaching party may terminate this Agreement upon sixty (60) days’ written
notice to the other party (the “Termination Notice”). For the avoidance of
doubt, a material breach of the Quality Agreement shall be deemed to be a breach
of this Agreement for the purpose of determining the rights of the Parties to
terminate this Agreement.

11.3 Termination for Bankruptcy. Either Party may terminate this Agreement
immediately if the other Party becomes insolvent, makes a general assignment for
the benefit of creditors, suffers or permits the appointment of a receiver for
its business or assets, avails itself of or becomes subject to any petition or
proceeding under any statute of any state or country relating to insolvency or
the protection of the rights of creditors.

11.4 Regulatory Proceedings. Santarus may terminate this Agreement for one or
more of the Finished Bulk Products effective immediately upon written notice to
Supplier should the FDA or a Foreign Regulatory Authority having jurisdiction
impose on the Facility an import ban in respect of the Finished Commercial
Product or withdraw any license required by Supplier or Manufacturer to
manufacture the Finished Bulk Product at the Facility or take other action that
is reasonably likely to have a material adverse impact on Supplier’s or
Manufacturer’s ability to perform hereunder.

11.5 Government Action. Santarus may terminate this Agreement for one or more of
the Finished Bulk Products upon thirty (30) days’ written notice to Supplier in
the event that any governmental agency (including without limitation, the FDA or
a Foreign Regulatory Authority) takes any action, or raises any objection, that
prevents Santarus from importing, exporting, purchasing, or selling the Finished
Bulk Product and/or Finished Commercial Product or otherwise makes such activity
unlawful.

11.6 Termination for Discontinuation. Santarus may terminate this Agreement for
one or more of the Finished Bulk Products if at any time it decides to no longer
market the Finished Commercial Product by giving Supplier six (6) months advance
written notice of termination.

11.7 Effect of Termination. Except as otherwise provided in this Section 11.7 or
elsewhere in this Agreement, in the event this Agreement is terminated for any
reason, (a) subject to Section 11.8, all rights and obligations of the Parties
under this Agreement shall terminate; (b) Santarus shall surrender to Supplier,
or, at Supplier’s sole option and expense, Santarus shall destroy and provide
Supplier with a certificate signed by a Responsible Executive of Santarus
attesting to the destruction of, all copies of any Confidential Information of
Supplier in its possession (excluding all of the foregoing assigned to Santarus
under Article 9 above); (c) Supplier shall surrender to Santarus, or, at
Santarus’ sole option and expense, Supplier shall destroy and provide Santarus
with a certificate signed by a Responsible Executive of Supplier attesting to
the destruction of, all copies of any Confidential Information provided by
Santarus hereunder (except to the extent required to be maintained by Supplier
pursuant to Applicable Laws or this Agreement); and (d) Santarus shall pay for
any of the applicable Finished Bulk

 

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Product manufactured at any time before the date of termination pursuant to any
Firm Purchase Order delivered to Supplier prior to such termination. Supplier
shall cooperate with Santarus and assist in the transfer to Santarus of all
legal and technical documents concerning Raw Materials and Finished Bulk
Products, including master batch records, validation reports, stability reports
and relevant manufacturer authorizations, existing retention samples and all
such other documents and materials as may be reasonably necessary or useful for
Santarus to source the applicable Finished Bulk Products from other qualified
Third Parties.

11.8 Accrued Rights. Termination, relinquishment, or expiration of this
Agreement for any reason shall be without prejudice to any right which shall
have accrued to the benefit of either Party prior to such termination,
relinquishment, or expiration. Such termination, relinquishment or expiration
shall not relieve either Party from obligations which are expressly indicated to
survive termination or expiration of this Agreement. The provisions of this
Article 11 shall not limit or restrict the rights of any Party to seek remedies
or take measures that may be otherwise available to it at law or equity in
connection with the enforcement and performance of obligations under this
Agreement. Any provision of this Agreement intended by their specific terms or
by necessary implication to survive the expiration or termination of this
Agreement, including without limitation, Articles 8, 9 and 11-14, shall so
survive.

ARTICLE 12

INDEMNIFICATION; INSURANCE; LIMITATION OF LIABILITY

12.1 Indemnification by Santarus. Santarus hereby agrees to defend, at its
expense, indemnify, and hold harmless Supplier, its directors, officers,
employees, agents, and Affiliates, against all Third Party claims, demands,
damages, liabilities, losses, costs and expenses, including, without limitation,
attorney’s fees (collectively, “Claims”) resulting from or arising out of:
(a) the negligence or willful misconduct of Santarus, its Affiliates, or their
directors, officers, agents, employees or consultants in the performance of
their obligations under this Agreement; (b) a breach by Santarus of any
provision of this Agreement or the Quality Agreement; or (c) a breach by
Santarus of any of its representations or warranties set forth in this Agreement
or the Quality Agreement; provided, however, that Santarus shall not be
obligated to indemnify Supplier under this Section 12.1 to the extent that such
Claim results from or arises out of any act or omission for which Supplier is
obligated to indemnify Santarus pursuant to Section 12.2 below.

12.2 Indemnification by Supplier. Supplier hereby agrees to defend, at its
expense, indemnify, and hold harmless Santarus, its directors, officers,
employees, agents, and Affiliates against all Third Party Claims resulting from
or arising out of (a) the failure to manufacture, package and test the Finished
Bulk Product in accordance with the Supplier Manufacturing Responsibilities;
(b) the failure to store the Finished Bulk Product or Raw Materials in
accordance with the Specifications, cGMP and Applicable Laws; (c) the negligence
or willful misconduct of Supplier, Manufacturer, its Affiliates, or their
directors, officers, agents, employees or consultants in the performance of
their obligations under this Agreement, (d) a breach by Supplier of any
provision of this Agreement or the Quality Agreement; or (e) a breach of any of
Supplier’s representations, warranties, or covenants set forth in this Agreement
or the Quality Agreement; provided, however, that Supplier shall not be
obligated to indemnify Santarus under this Section 12.2 to the extent that such
Claim results from or arises out of any act or omission for which Santarus is
obligated to indemnify Supplier pursuant to Section 12.1 above.

 

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12.3 Indemnification Procedure. Each indemnified Party (the “Indemnitee”) agrees
to give the indemnifying Party (the “Indemnitor”) prompt written notice of any
Claims or discovery of fact upon which the Indemnitee intends to base a request
for indemnification. Notwithstanding the foregoing, the failure to give timely
notice to the Indemnitor shall not release the Indemnitor from any liability to
the Indemnitee to the extent the Indemnitor is not materially prejudiced
thereby.

12.3.1 The Indemnitee shall furnish promptly to the Indemnitor copies of all
papers and official documents in the Indemnitee’s possession or control which
relate to any Claims; provided, however, that if the Indemnitee defends or
participates in the defense of any Claims, then the Indemnitor shall also
provide such papers and documents to the Indemnitee. The Indemnitee shall
reasonably cooperate with the Indemnitor in defending against any Claims.

12.3.2 The Indemnitor shall have the right, by prompt written notice to the
Indemnitee, to assume direction and control of the defense of any Claim, with
counsel reasonably satisfactory to the Indemnitee and at the sole cost of the
Indemnitor, so long as (a) the Indemnitor shall promptly notify the Indemnitee
in writing (but in no event more than [***] days after the Indemnitor’s receipt
of notice of the Claim) that the Indemnitor intends to indemnify the Indemnitee
pursuant to this Article absent the development of facts that give the
Indemnitor the right to claim indemnification from the Indemnitee, and (b) the
Indemnitor diligently pursues the defense of the Claim.

12.3.3 If the Indemnitor assumes the defense of the Claim as provided in this
Section 12.3, the Indemnitee may participate in such defense with the
Indemnitee’s own counsel who shall be retained, at the Indemnitee’s sole cost
and expense; provided, however, that neither the Indemnitee nor the Indemnitor
shall consent to the entry of any judgment or enter into any settlement with
respect to the Claim without the prior written consent of the other Party, which
consent shall not be unreasonably withheld or delayed. If the Indemnitee
withholds consent in respect of a judgment or settlement involving only the
payment of money by the Indemnitor and which would not involve any stipulation
or admission of liability or result in the Indemnitee becoming subject to
injunctive relief or other relief, the Indemnitor shall have the right, upon
written notice to the Indemnitee within [***] days after receipt of the
Indemnitee’s written denial of consent, to pay to the Indemnitee, or to a trust
for its or the applicable Third Party’s benefit, such amount established by such
judgment or settlement in addition to all interest, costs or other charges
relating thereto, together with all attorneys’ fees and expenses incurred to
such date for which the Indemnitor is obligated under this Agreement, if any, at
which time the Indemnitor’s rights and obligations with respect to such Claim
shall cease.

12.3.4 The Indemnitor shall not be liable for any settlement or other
disposition of a Claim by the Indemnitee which is reached without the written
consent of the Indemnitor.

12.4 No Consequential Damages. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE
RESPONSIBLE OR LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, SPECIAL, EXEMPLARY, PUNITIVE

 

 

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OR OTHER LIKE DAMAGES, OR FOR ANY LOSS OF PROFITS, LOSS OF REVENUE, LOSS
RESULTING FROM INTERRUPTION OF BUSINESS OR LOSS OF USE OR DATA, EVEN IF SUCH
PARTY, OR ANY OF ITS DIRECTORS, OFFICERS, EMPLOYEES, OR AGENTS HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL
PURPOSE OF ANY LIMITED REMEDY OF ANY KIND, UNDER ANY CONTRACT, NEGLIGENCE,
STRICT LIABILITY OR OTHER THEORY, ARISING OUT OF OR RELATING IN ANY WAY TO THIS
AGREEMENT OR ITS IMPLEMENTATION. FOR THE AVOIDANCE OF DOUBT, NOTHING IN THIS
SECTION 12.4 SHALL BE INTERPRETED TO LIMIT THE INDEMNIFICATION OBLIGATION OF
EITHER PARTY IN CONNECTION WITH A PRODUCT LIABILITY CLAIM WITH RESPECT TO THE
CHARACTERIZATION OF DAMAGES OR LOSSES CLAIMED BY A THIRD PARTY AS BEING
INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY, PUNITIVE OR OTHER LIKE
DAMAGES OR LOSSES.

12.5 Insurance. Each of Supplier and Manufacturer, on the one hand, and
Santarus, on the other hand, shall maintain commercial general liability through
the term of this Agreement and for a period of [***] years thereafter, which
insurance shall afford limits of not less than (i) [***] USD ($[***]) for each
occurrence, and (ii) [***] USD ($[***]) annual aggregate. In addition, Santarus
shall maintain, and Supplier shall have Manufacturer maintain, product liability
insurance through the term of this Agreement and for a period of five (5) years
thereafter, which insurance shall afford limits of not less than (i) [***] USD
($[***]) for each occurrence, and (ii) [***] USD ($[***]) annual aggregate.
Supplier shall cause Manufacturer to name Santarus as an additional insurer
under Manufacturer’s product liability policy. In addition, from time to time
during the term of this Agreement, each Party shall (and Supplier shall cause
Manufacturer to) increase their levels of insurance coverage if reasonably
deemed prudent by such party in light of the overall activities under this
Agreement. If requested each Party will provide the other with a certificate of
insurance evidencing the above and showing the name of the issuing company, the
policy number, the effective date, the expiration date and the limits of
liability. Each Party shall (and Supplier shall cause Manufacturer to) provide
for a minimum of [***] days’ written notice to the insured of a cancellation of,
or material change in, the insurance. If a Party (including, in the case of
Supplier, Manufacturer) is unable to maintain the insurance policies required
under this Agreement through no fault on the part of such Party, then such Party
shall forthwith notify the other Party in writing and the Parties shall in good
faith negotiate appropriate amendments to the insurance provision of this
Agreement in order to provide adequate assurances.

ARTICLE 13

GOVERNING LAW; DISPUTE RESOLUTION

13.1 Governing Law. This agreement is governed by Italian law without regard to
the conflicts of laws and provisions thereof and without regard to the United
Nations convention on contracts for the sale of foods.

13.2 Dispute Resolution/Injunctive Relief. Notwithstanding anything to the
contrary contained in this Agreement, the Parties specifically agree to the
following dispute resolution procedure.

 

 

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13.2.1 Negotiation Between Responsible Executives. In the event of any dispute
between the Parties arising out of or related to this Agreement, the Parties
shall refer such dispute to the Responsible Executive of Santarus and the
Responsible Executive of Supplier for attempted resolution by good faith
executive negotiations within [***] days after such referral is made. In the
event such officers are unable to resolve such dispute within such [***] day
period, then the Parties will subject themselves to the arbitration procedures
set forth below before seeking any other means of resolving the dispute.

13.3 Arbitration. In the event of any dispute arising out of or in connection
with this Agreement, the Parties agree that such dispute shall be finally
settled under the Rules of Arbitration of the International Chamber of Commerce
– ICC by a panel of three arbitrators appointed in accordance with the said
Rules of Arbitration. The arbitrators shall apply Italian Law. The seat of
arbitration shall be Paris (France) and the language of the arbitration
proceeding shall be English.

13.3.1 Continuation of Performance. Except where such area of performance is the
subject of dispute, each Party shall continue to perform its respective
obligations under this Agreement while any dispute is being resolved in
accordance with this Section 13.3 unless and until such obligations are
terminated or expire in accordance with the provisions of this Agreement.

ARTICLE 14

MISCELLANEOUS

14.1 Assignment. Supplier may not assign this Agreement or any of its rights or
obligations hereunder) without the written consent of Santarus, such consent not
to be unreasonably withheld. Santarus may not assign this Agreement or any of
its rights or obligations hereunder without the written consent of Supplier,
such consent not to be unreasonably withheld. Notwithstanding the foregoing
provisions of this Section 14.1, Santarus may assign this Agreement to any of
its Affiliates or to a successor to or purchaser of all or substantially all of
its assets relating to this Agreement.

14.2 Force Majeure. With respect to this Agreement, neither Party shall lose any
rights hereunder or be liable to the other Party for damages or losses on
account of failure of performance by the defaulting Party if the failure is
occasioned by war, fire, explosion, flood, strike, lockout, terrorist attacks,
embargo, act of God, or any other similar cause to the extent beyond the
reasonable control of the defaulting Party, provided that the Party claiming
force majeure shall promptly notify the other Party in writing setting forth the
nature of such force majeure, shall use its best efforts to eliminate, remedy or
overcome such force majeure and shall resume performance of its obligations
hereunder as soon as reasonably practicable after such force majeure ceases.
Notwithstanding the previous sentence, if any force majeure continues for more
than ninety (90) days, the other Party may terminate this Agreement.

14.3 Further Actions. Each Party agrees to execute, acknowledge and deliver such
further instruments, and to do all such other acts, as may be necessary or
appropriate in order to carry out the purpose and intent of this Agreement.

 

 

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14.4 Notices. All notices required or permitted to be given under this Agreement
shall be in writing and shall be deemed given if delivered personally or by
facsimile transmission receipt verified, mailed by registered or certified mail
return receipt requested, postage prepaid, or sent by express courier service,
to the Parties at the following addresses, or at such other address for a Party
as shall be specified by like notice, provided that notices of a change of
address shall be effective only upon receipt thereof.

If to Supplier:

Cosmo Technologies Ltd

42-43 Amiens Street

Dublin 1

Ireland

Attn: Giuseppe Cipriano, Director

With a copy to:

Cosmo S.p.A.

via C. Colombo, 1

20020 Lainate (MI)

Italy

Attn: Davide Malavasi, Qualified Person

If to Santarus:

Santarus, Inc.

3721 Valley Centre Drive, Suite 400

San Diego CA 92130

Phone: 858-314-5700

Fax: 858-314-5701

Attn: Sr. Vice President, Manufacturing and Product Development

With a copy to:

Santarus, Inc.

3721 Valley Centre Drive, Suite 400

San Diego CA 92130

Phone: 858-314-5700

Fax: 858-314-5702

Attn: Legal Affairs

Unless an earlier date can be proven by competent evidence, the date of receipt
of any notice given under this Agreement, including, without limitation, any
invoice provided by Supplier to Santarus, shall be deemed to be the date given
if delivered personally or by facsimile transmission receipt verified, seven
(7) days after the date mailed, if mailed by registered or certified mail return
receipt requested, postage prepaid, and two (2) days after the date sent if sent
by express courier service.

 

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14.5 Waiver. No failure of either Party to exercise and no delay in exercising
any right, power or remedy in connection with this Agreement (each a “Right”)
will operate as a waiver thereof, nor will any single or partial exercise of any
Right preclude any other or further exercise of such Right or the exercise of
any other Right. No waiver shall be effective unless made in writing and signed
by the waiving Party.

14.6 Disclaimer of Agency. The relationship between Supplier and Santarus
established by this Agreement is that of independent contractors, and nothing
contained in herein shall be construed to (i) give either Party the power to
direct or control the day-to-day activities of the other, (ii) constitute the
Parties as the legal representative or agent of the other Party or as partners,
joint venturers, co-owners or otherwise as participants in a joint or common
undertaking, or (iii) allow either Party to create or assume any liability or
obligation of any kind, express or implied, against or in the name of or on
behalf of the other Party for any purpose whatsoever, except as expressly set
forth in this Agreement.

14.7 Severability. If any term, covenant or condition of this Agreement or the
application thereof to any Party or circumstance shall, to any extent, be held
to be invalid or unenforceable by a court or administrative agency of competent
jurisdiction, then the remainder of this Agreement, or the application of such
term, covenant or condition to Parties or circumstances, other than those as to
which it is held invalid or unenforceable, shall not be affected thereby and
each term, covenant or condition shall be valid and be enforced to the fullest
extent permitted by law.

14.8 Entire Agreement. This Agreement, including all schedules and exhibits
attached hereto, and the Quality Agreement, which are hereby incorporated herein
by reference, set forth all covenants, promises, agreements, warranties,
representations, conditions and understandings between the Parties hereto with
respect to the manufacture and supply of commercial quantities of Finished Bulk
Product and supersedes and terminates all prior and contemporaneous agreements
and understandings between the Parties with respect to such subject matter.
Notwithstanding the generality of the foregoing, this Agreement is intended to
supersede and replace Article 5 of the License Agreement.

14.9 Modification. No subsequent alteration, amendment, change or addition to
this Agreement shall be binding upon the Parties hereto unless reduced to
writing and signed by the respective authorized officers of the Parties. In the
event of a conflict between the terms of any Firm Purchase Order, order
acknowledgement, packaging slip or other documentation, and the terms of this
Agreement, the terms of this Agreement shall control, unless such documentation
specifically states that it overrides conflicting terms of this Agreement and is
signed by each of the Parties.

14.10 Construction. This Agreement shall be deemed to have been drafted by all
Parties and, in the event of a dispute, no Party hereto shall be entitled to
claim that any provision should be construed against any other Party by reason
of the fact that it was drafted by one particular Party. The headings used in
this Agreement are for convenience of reference only and are not a part of the
text hereof.

 

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14.11 Counterparts. This Agreement may be executed in counterparts, by manual or
facsimile signatures, each of which shall be deemed an original, but all of
which together 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.

 

Cosmo Technologies Ltd     Santarus, Inc. By:  

/s/ Giuseppe Cipriano

    By:  

/s/ Gerald T. Proehl

Name:  

Giuseppe Cipriano

    Name:  

Gerald T. Proehl

Title:  

Director

    Title:  

President & CEO

 

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