In this document, “[***]” indicates that confidential materials have been
redacted from this document and filed separately with the Securities and
Exchange Commission.

Exhibit 10.4
BAUSCH & LOMB, INC.
CONTRACT MANUFACTURING SUPPLY AGREEMENT
This CONTRACT MANUFACTURING SUPPLY AGREEMENT, made this 09th day of December,
2014 (“Effective Date”) by and between BAUSCH & LOMB INCORPORATED, a New York
corporation, having its principal office located at 8500 Hidden River Parkway,
Tampa, Florida 33637 (“B&L”), and AERIE PHARMACEUTICALS, Inc. (hereafter
referred to as 'AERIE') having its principal office located at 135 US Highway
206, Suite 15, Bedminster, NJ 07921.
WHEREAS, AERIE desires that B&L be appointed the contract manufacturer for
certain Product(s) as listed in Appendix C;
WHEREAS B&L agrees to manufacture and supply to AERIE certain Products (as
defined herein) under the terms and conditions of this Supply Agreement for and
to AERIE.
NOW, THEREFORE, the parties hereby agree as follows:
DEFINITION OF TERMS
AERIE and B&L, therefore agree the terms defined in this section shall have the
meanings stated as follows:
1.1    “ACT” means the United States Federal Food, Drug and Cosmetic Act, as
amended, and the regulation promulgated thereunder.
1.2    “FDA” means the United States Food and Drug Administration or any
successor entity thereto.
1.3    “cGMP” means current good manufacturing practices, as defined in the ACT.
1.4    “Label” or “Labeling” means all labels and other written, printed or
graphic matter upon any container or packaging utilized with the Product(s) or
any written material accompanying the Product(s).
1.5    “Applicable Laws” means all laws, ordinances, rules and regulations
within the Territory applicable to the manufacturing of AERIE Active
Pharmaceutical Ingredients (APIs) and the obligations of B&L or AERIE, as the
context requires, including, without limitation, (i) all applicable federal,
state, and local laws and regulations of each Territory; (ii) the U.S. Federal
Food, Drug and Cosmetic Act, and (iii) the “cGMPs.” Applicable Laws shall also
include all laws, ordinances, rules, and regulations applicable in Territories
added to this Agreement after the Effective Date of this Agreement, solely to
the extent AERIE or its designee has provided written copies of such laws to B&L
under this Agreement. Copies of all laws shall be in the English language.
1.6    “Regulatory Authority” shall mean the FDA and any other Regulatory
Authority within a Territory involved in regulating any aspect of the
development, manufacture, market approval, sale, distribution, packaging, or use
of the AERIE Product(s).
1.7    “Territories” shall mean the United States of America, Canada and any
other country, which the parties agree in writing to add to this Agreement.
1.8    “Confidential Information” means any information disclosed by either
party to the other party hereunder which involves the trade secrets of the
disclosing party and would reasonably be considered to be confidential. AERIE
Confidential information shall include without limitation: (i) the structures,

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formulations, product composition and processes, Investigators’ Brochure,
protocols, communications with the United States Food and Drug Administration
(FDA) and all information contained in AERIE’s Investigational Exemption for a
New Drug (IND), (ii) all information relating to the Product and API, and all
licenses, technology, processes and business plans relating to the Product and
(iii) all notes, analyses, studies or other documents which contain or are based
on the information or material described in (i) or (ii). Such information will
be considered confidential under this agreement regardless of whether it is
marked or otherwise indicated as confidential. B&L Confidential Information
shall include without limitation: (x) all information owned by B&L and
pertaining to B&L’s manufacture of the Product, including all plans, programs,
processes, equipment, apparatuses, and all licenses and technology owned by B&L
and pertaining to the manufacture of the Product and (y) all notes, analyses,
studies or other documents owned by B&L that contain or are based on the
information or material described in (x), and in all events excluding subject
matter owned by AERIE pursuant to Article 18.
1.9    “Commercial Year” means each consecutive twelve (12) month period
commencing from the date of the first sale of commercial Product.
1.10    Firm Order” shall have the meaning set forth in Section 7.B.
1.11    “Master Batch Record” shall mean the master production and control
records required by the FDA to be kept for the Product pursuant to 21 CFR
§211.186
1.12    “Raw Materials” means bottles, tips, caps, Labeling, chemicals other
than API, and other components needed to manufacture the Product in accordance
with the Specifications.
1.13    Pharmaceutical Price Index” means that particular index within the U.S.
Department of Labor’s Producer Price Index - Commodities, which is categorized
under the Group, “Chemicals and Allied Products,” item “Pharmaceutical
preparations” and having the Series ID of WPU0638.
1.14    Specifications” means the product requirements set forth in the Master
Batch Record for the Product(s), as amended by the parties hereto during the
Term of this Agreement, which may include but not be limited to, the
specifications for Labeling, storage, chemical composition, physical
characteristics, biological characteristics and quality control procedures for
the Product(s).
1.15    “Facility” shall mean B&L facility located in Tampa, Florida.
1.16    The term Product(s) shall mean those Product(s) listed on Appendix C.
2.    Term.
This Agreement shall become effective on the Effective Date and shall remain in
effect until December 31, 2024 (the 'Expiration Date'), unless appropriate
notice to terminate is provided per Section 18. Within one (1) year of the
projected approval date of the NDA for each Product identified on Appendix C,
AERIE shall contact B&L to discuss extending the Expiration Date for up to 2
years following the Expiration Date, or such longer period as the parties may
agree, on terms and conditions mutually agreed to by the parties hereto.
3.    Price.
A.    Prices. The purchase price per unit of Product(s) to be paid by AERIE to
B&L shall be in accordance with the terms of the price schedule set forth in
Appendix A, which is attached hereto and incorporated herein by reference.
Prices for Product(s) sold to AERIE during the Term are F.O.B, B&L, Tampa,
Florida freight collect.

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B.    Price Increase. The purchase price per unit of Product shall remain fixed
until the one (1) year anniversary of AERIE’s receipt of written FDA approval
for the Product(s). Thereafter, but no more than once during any Commercial
Year, B&L may increase the prices for the Product(s), upon sixty (60) days prior
written notice to AERIE, by an amount which is in proportion to, and not to
exceed, the total percentage change in the Pharmaceutical Price Index over the
twelve (12) month period preceding the effective date of such price increase.
All changes in cost must be substantiated [***] but in any event any increase
shall not exceed [***].
C.    Payment. B&L will invoice AERIE for each order of Product(s) at its
principal address upon shipment of the Product(s). Undisputed invoices shall be
due and payable within forty-five (45) days of the date of the invoice. In the
event that any undisputed invoice is not paid forty-five (45) days from the date
of the invoice, AERIE agrees to pay a “late charge” on the unpaid delinquent
balance at an interest rate of [***] per month, but in no event more than the
maximum rate permitted by law.
4.    Product Manufacture and Supply.
A.    Manufacture and Supply B&L agrees to manufacture the Product(s) in
Appendix C at its facility located at 8500 Hidden River Parkway, Tampa, Florida
(or other locations as the parties mutually agree upon), in accordance with
cGMPs, Applicable Laws, and B&L policies and procedures that do not conflict
with any terms or conditions of this Agreement, and to meet the mutually agreed
upon product specifications and test methods, respectively. During the Term of
this Agreement and for a period of five (5) years thereafter, B&L agrees that it
shall not manufacture or supply to any third party any product containing the
AERIE proprietary compounds, specifically AR-13324. With respect to manufacture
of Product(s) under this Agreement, B&L and AERIE will also enter into a
separate Quality Agreement. If the terms of this Agreement and the Quality
Agreement conflict, the terms of this Agreement shall control for the explicit
purposes of Supply of Product(s).
B.    Ingredients, Supplies and Packaging Materials. B&L agrees to supply at its
expense all of the raw materials (excluding the active ingredient, AR-13324
which will be supplied by AERIE), in accordance with the Specifications for the
Product that are necessary to manufacture and supply the Product(s). B&L agrees
to supply at its expense all of the packaging materials necessary to manufacture
and supply the Product(s) as set forth in Appendix C.
C.    Testing and Inspection of Materials. B&L shall analyze and evaluate all
materials to confirm that they satisfy the mutually agreed upon material
specifications. The cost of all such analyses and evaluations shall be borne by
B&L. AERIE shall be liable for all obsolete materials due to forecasting errors,
FDA changes or changes required by the customer.
D.    Testing and Inspection of Product. B&L shall conduct all quality control
and other tests required to ensure that the Product(s) as manufactured meet the
mutually agreed upon product specifications. The cost of all such analyses and
evaluations shall be borne by B&L. During the commercial phase of the project,
B&L shall conduct stability testing on one (1) lot for each fill size of the
Product(s) annually, and shall provide AERIE with on-going stability reports.
The cost of all such analyses and evaluations shall be borne by B&L. B&L will
place each of the Validation Batches into AERIE defined stability studies and
will provide interim stability reports to AERIE, including statistical analyses
where appropriate, as required by cGMP regulations. B&L will perform annual
product reviews of the Product(s) and will promptly provide AERIE with the
information from the annual product reviews as required by the FDA, for AERIE’s
inclusion in annual reports to the FDA. B&L shall provide AERIE, at no
additional cost, with all regulatory support and documentation required by the
FDA to support the NDA for the Product(s).

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E.    B&L Obligation to Supply. B&L shall supply AERIE such quantities of
Product(s) ordered by AERIE pursuant to any Firm Order. Furthermore, B&L agrees
to reserve manufacturing capacity sufficient to supply AERIE with at least such
quantities of Product that AERIE is required to purchase as an Annual Minimum
pursuant to Section 7.A.
5.    Product Changes.
A.    Changes by AERIE. If AERIE at any time requests a change to a Product and
B&L agrees such change is reasonable with regard to the manufacture of a
Product, including without limitation any changes to the raw materials or
packaging materials, provided such change does not impose material adverse
impact on B&L’s manufacture of the Product (i) such change shall be incorporated
into the Product Specifications, (ii) B&L shall adjust the price of the Product
set forth in Appendix C, if necessary, to reflect increased costs of such
change, and (iii) from the date of such adjustment, AERIE shall pay B&L the
costs associated with such change, including, for any additional development
work, a reasonable charge based upon B&L’s then-prevailing research and
development rates, (iv) AERIE shall be liable for all obsolete material
resulting from the implementation of this change up to certain inventory levels
for each raw material and packaging material to be mutually determined by the
parties, provided that AERIE’s liability under this Section shall only apply to
the extent such materials cannot reasonably be allocated to manufacturing other
products.
B.    Changes by B&L. B&L agrees that any changes developed by B&L which may be
incorporated into the manufacture of a Product shall require the written
approval of AERIE prior to such incorporation. At the time of such incorporation
and regulatory approval, if required, such changes shall become part of the
Product Specifications.
C.    Changes by Regulatory Authorities. If B&L is required by a regulatory
authority to perform validation studies for purposes of validating new
manufacturing procedures or new raw material and finished product assay
procedures with respect to a Product in order to continue to engage in the
manufacture of the Product for AERIE (and AERIE, after notice that such
validation studies are required, and upon notice to AERIE of an estimate of all
related validation study expenses, desires B&L to continue manufacturing the
Product), all direct expenses borne by B&L in the conduct of any such validation
study shall be reimbursed to B&L by AERIE as incurred.
D.    Regulatory Responsibility. AERIE will responsible for all regulatory
submissions and correspondence with the FDA related to the Product. B&L will be
responsible for providing AERIE, as needed, with documentation typically
included in the Chemistry, Manufacturing & Controls (CMC) section of regulatory
submissions, for the preparation of regulatory submissions.
6.    Inspections and Manufacturing Compliance
A.    Inspections by AERIE. Representatives from AERIE shall be permitted
access, at reasonable times during B&L’s normal business hours and upon
reasonable advance notice to B&L, to visit, in the company of a B&L
representative, the manufacturing and/or packaging facility or facilities where
AERIE’s Product will be or are being manufactured and/or packaged for the
purposes of auditing B&L’s processes to ensure that AERIE’s Product are being
manufactured, packaged, stored and handled in accordance with the mutually
agreed upon product specifications, cGMP’s and applicable laws, rules and
regulations.
B.    Inspection by Regulatory Agencies. Each party shall promptly notify the
other party upon being contacted by the FDA or other Regulatory Agency for any
purpose or reason directly relating to the manufacture of the Product, including
without limitation, any announced or unannounced FDA or other Regulatory Agency
inspection. At B&L’s request, AERIE will provide B&L with copies of all
correspondence

4

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and documentation provided to the FDA or other Regulatory Agency which relate to
B&L’s scale-up manufacturing activities. At AERIE’s request, B&L will provide
AERIE with copies of all correspondence and documentation provided to the FDA or
other Regulatory Agency which relate to the Product or the manufacture of the
Product. B&L shall permit one or more AERIE representative(s) to be present at
B&L’s facilities during any such inspection directly relating to manufacture of
the Product. Duly authorized representative(s) from the FDA or other Regulatory
Agency or other applicable regulatory agencies shall be permitted access, at
reasonable times during B&L’s normal business hours, to visit, in the company of
a B&L representative, the manufacturing and/or packaging facility or facilities
where the Product will be or is being manufactured and/or packaged for the
purposes of auditing B&L’s processes to ensure that the Product is being
manufactured, packaged, stored and handled in accordance with the
Specifications, Applicable Laws, and B&L policies and procedures to the extent
that such policies and procedures do not conflict with any terms or conditions
of this Agreement or with Applicable Laws.. B&L shall, at its own expense,
promptly respond to all inquiries and questions resulting from such visits and
inspections and, at its own expense, promptly correct any deficiencies reported
as a result of such inspections. B&L shall immediately notify AERIE if an
authorized agent of the FDA or other Regulatory Agency visits B&L’s
manufacturing facility for the purposes of inspecting the manufacturing and
testing of the Products.
7.    Ordering and Rolling Forecasts
A.    Annual Minimum. Beginning on the first day of the first full calendar year
after the commercial launch of the Product, AERIE shall purchase from B&L a
minimum annual amount of Product as set forth in Appendix B attached hereto (the
“Annual Minimum”). If AERIE does not purchase such Annual Minimum during any
calendar year thereafter, AERIE shall pay to B&L [***] of the difference between
(i) the total amount AERIE would have paid to B&L if the Annual Minimum had been
fulfilled and (ii) the total amount actually paid to B&L during the applicable
calendar year. After AERIE’s obligation to purchase the Annual Minimum commences
pursuant to this Section 7 A., the parties shall meet at least once annually to
discuss in good faith reasonable adjustments to the Annual Minimum taking into
consideration the market conditions for the Product. Any such adjustment to the
Annual Minimum shall be mutually agreed upon in writing and shall be subject to
this Agreement.
B.    Monthly Forecast. Beginning not less than one hundred and twenty (120)
days after AERIE submits the NDA for the Product to the FDA, and thereafter on
the first day of each month, AERIE will deliver to B&L a rolling forecast of its
estimated need for Product for the following twelve (12) month period (each, a
“Rolling Forecast”). The quantities of Product to be delivered in the first
[***] days of each Rolling Forecast shall be a binding, firm order for Product
(“Firm Order”) and the remainder of the Rolling Forecast shall be for advisory
purposes only and non-binding.
C.    Purchase Orders. AERIE will initiate an order for Product by sending to
B&L a purchase order for Product at least [***] days prior to the requested
delivery date for the Product covered by the purchase order (“Purchase Order”).
If there is a conflict between the terms of this Agreement and any Purchase
Order, the terms of this Agreement will control. Purchase Orders should be
submitted for ordered quantities of Product in full batch size; provided that
B&L agrees that such batch size shall include, but not be limited to, a [***]
batch size for AR-13324 Ophthalmic Solution, 0.02% and/or a [***] batch size
PG-324 Ophthalmic Solution, 0.02%. AERIE may submit Purchase Orders for Product
in excess of the quantities specified in the rolling forecasts. B&L shall use
its commercially reasonable efforts to accept and fill such orders consistent
with efforts used by B&L to fill excess orders for other customers of contract
manufactured Product. B&L will deliver to AERIE a written order acknowledgment
form within thirty (30) days of B&L’s receipt of each rolling forecast,
confirming the quantities of which B&L shall exercise commercially reasonable
efforts its ability to fill. Only those amounts of such orders in excess of the
quantities of AERIE’s Firm Order, confirmed by B&L in its written order
acknowledgment, shall be binding on B&L.

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D.    Orders Other Than Through Rolling Forecasts. Subject to the provisions of
7.A. above, AERIE may submit additional purchase orders for Product in excess of
the quantities specified in the rolling forecasts. B&L shall use its
commercially reasonable efforts to accept and fill such orders consistent with
efforts used by B&L to fill excess orders for other customers of contract
manufactured product.
E.    Acceptance by Order Acknowledgment. B&L will deliver to AERIE a written
order acknowledgment form within seven (7) business days of B&L’s receipt of a
purchase order, confirming the quantities, price and delivery date of which B&L
shall fill. Only those quantities of AERIE’s firm order confirmed by B&L in its
written order acknowledgment shall be binding on B&L. In the event B&L is unable
to supply Product(s), such volume of product not supplied shall be deducted from
the Minimum Annual Quantity.
F.    Failure to Supply. Notwithstanding any other provision in this Agreement,
if B&L fails to supply to AERIE at least [***] of the quantity of Product
ordered pursuant to a Firm Order during any [***], AERIE’s obligations to meet
the Purchase Requirement and Annual Minimum shall terminate. At any point AERIE
may choose to purchase any quantity of Product from any third party. In no way
do the terms of this agreement limit either AERIE or B&L from any other business
each may choose to pursue subject to the limitations set forth in Section 4A.
8.    Inventory & Delivery.
Unless otherwise agreed in writing by the parties, B&L will ship the Product
F.O.B. B&L’s loading dock at its facility in Tampa, Florida (the “F.O.B.
Point”), to arrive at AERIE’s designated destination point within ninety (90)
days of the date a Purchase Order is received by B&L. At the request and expense
of AERIE, B&L shall ship the Product ordered by AERIE by such carrier or
carriers as AERIE may designate. Such shipping instructions shall be submitted
by AERIE to B&L. Unless otherwise agreed by the parties hereto, all risk of loss
or damage to the Product from any cause whatsoever shall be borne by AERIE after
delivery to AERIE or AERIE’s carrier at the F.O.B. Point. B&L shall not be
obligated to maintain an inventory of the Product(s).
9.    Packaging and Labeling.
During the term of this Agreement, B&L agrees to manufacture, and package the
Product(s) in accordance with mutually agreed upon component specifications, and
approved or mutual agreed upon material suppliers incorporating any necessary
approvals in accordance with Section 10.B, and will take into account cGMPs and
regulatory requirements. Thereafter, upon reasonable written notice, B&L will
make, at AERIE’s expense, any improvements or alterations to packaging or
labeling as requested by AERIE and approved by B&L, and shall implement such
alterations or improvements at the earliest opportunity. Should any components
be rendered obsolete by artwork changes, AERIE shall reimburse B&L at actual
procurement cost and destruction fee for any components affected by such changes
purchased against AERIE’s requirements because of the long lead time to obtain
certain components from suppliers. B&L may have to purchase, or commit to
purchase certain components further in advance than the period of time covered
by the purchase order, and in such case AERIE agrees to reimburse B&L at actual
cost for such components, so long as AERIE has agreed in writing to such
purchases or commitments to purchase in advance.
10.    Warranties; Acceptance and Claims.
A.    Limited Product Warranty. B&L represents and warrants to AERIE that (i) at
the time of delivery, the Product will be manufactured and supplied hereunder to
conform to cGMPs, meet mutually agreed upon product specifications as modified
from time to time, and will meet the requirements of the Act, and other
applicable laws and regulations, (ii) all Product supplied by B&L under this
Agreement shall

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be merchantable, free from defects and shall not be adulterated or misbranded
within the meaning of the ACT, as amended, (iii) B&L shall manufacture the
Product in accordance with the Specifications of this Agreement and the Quality
Agreement and in a facility that complies with all Applicable Laws, and is
covered by all necessary registrations and licenses, and B&L shall maintain all
such registrations and licenses during the Term hereof, (iv) when applicable to
the work performed by B&L, B&L will adhere to Applicable Laws, (v) B&L shall
store all API and Product in a secure facility and in accordance with the
Specifications and all Applicable Laws, and (vi) B&L shall perform all services
to accepted industry standard.. THE FOREGOING WARRANTY IS EXCLUSIVE AND IN LIEU
OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
EXCEPT WHERE B&L COMMITS A WILLFUL, GROSSLY NEGLIGENT OR INTENTIONAL BREACH OF
ANY MATERIAL PROVISION UNDER THIS AGREEMENT, B&L SHALL NOT BE RESPONSIBLE OR
LIABLE UNDER ANY PROVISION OF THIS AGREEMENT OR UNDER ANY CONTRACT, NEGLIGENCE,
STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY RESULTANT INDIRECT,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES INCLUDING, BUT NOT LIMITED TO LOSS OF
REVENUES AND LOSS OF PROFITS FROM B&L’S FAILURE TO PROVIDE THE PRODUCT TO AERIE
OR OTHERWISE.
B.    Notification of Defects. All Products shall be received subject to AERIE’s
inspection and may be rejected if any such Product fails to be in the condition
warranted hereunder. AERIE shall be deemed to have accepted each order of
Product if B&L does not receive written notice to the contrary as set forth in
this Paragraph 10.B. AERIE shall notify B&L in writing within 60 days after
delivery to AERIE or its customers of any non-conforming Product containing
obvious defects discoverable without affecting the integrity of the Product’s
packaging and within 120 days of its discovery of any latent defects, or AERIE’s
rights as to such obvious or latent non-conformance shall be waived by AERIE. At
B&L’s request, AERIE shall promptly supply either some of the Product(s), which
are allegedly defective or some other evidence of deficiency which B&L shall
specify. In the event of any dispute between B&L and AERIE as to whether any of
the Product conform to the warranties hereunder, a sample of the units in
dispute shall be sent by AERIE and B&L to a testing laboratory mutually agreed
to by B&L and AERIE whose findings will be binding on the parties except in
cases of gross and manifest error. The cost of such testing and Product shall be
borne by the party against which the determination was made.
C.    Warranty Limited to AERIE. AERIE shall deliver to its customers its own
warranty concerning the Product. AERIE’s warranty to its customers shall state
conspicuously that the same is the sole and exclusive warranty to customers.
D.    Returns. B&L shall accept for return and replacement any Product
manufactured and supplied to AERIE under this Agreement which at the time of
delivery does not conform with the warranty set forth above and for which proper
notice has been given, provided AERIE notifies B&L in a timely fashion and seeks
a prior shipping authorization from B&L. B&L shall replace, at B&L’s cost, each
nonconforming shipment of Product, or the nonconforming portion thereof, with
conforming Product as soon as reasonably practicable after receipt of notice of
rejection thereof, and in any event shall do so within ninety (90) days after
receipt of notice of rejection thereof. All returns of Product with defects
shall be in the original manufactured condition to the extent possible. B&L will
pay reasonable return freight and shipping charges, AERIE shall assume the risk
of loss in transit associated with such returns.
E.    Indemnification of AERIE. B&L shall indemnify, defend, save and hold AERIE
and each of its Affiliates, officers, directors, employees and agents harmless
from and against any and all liabilities, losses, damages, costs, or expenses,
including without limitation reasonable attorney’s fees and disbursements (Loss
or Losses) resulting from, or arising out of (a) any material breach of any
warranty

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hereunder or material non-fulfillment or non-performance by B&L of any
agreement, covenant or obligation of B&L under this Agreement; (b) any actual or
alleged defect in any Product manufactured and delivered to AERIE hereunder
arising out of B&L’s failure to manufacture Product in accordance with the terms
of this Agreement; (c) FDA enforcement action, inspection or Product recalls or
market withdrawals resulting from B&L’s failure to manufacture the Product in
accordance with the terms or requirements of this Agreement, and (d) any bodily
injury arising out of B&L’s failure to manufacture Product in accordance with
the terms of this Agreement.
F.    Insurance. Each of the parties shall maintain Commercial Liability
Insurance, during the term of this Agreement, including contractual and product
liability, in amounts of not less than $[***] per occurrence and $[***] annual
aggregate naming the other party as an additional insured. The parties shall
exert their best efforts to obtain such insurance on a date of occurrence basis
(not a date of claim basis) and all insurance companies providing such insurance
shall have an A.M. Best rating of A- or better. Upon request, either party shall
submit a certificate of insurance evidencing such insurance to the other party,
and providing that it may not be canceled or reduced in amount without thirty
(30) days’ prior notification to the other party.
G.    Manufacture. For purposes of this Article 10 above, Section 5.E. and
Articles 11, 12 and 18 below, “manufacture” shall include without limitation the
manufacturing process for the product, bulk solution manufacturing, filling,
filtering, inspection, testing, Labeling and packaging of Product.
11.    AERIE’s Warranties and Obligations
A.    Indemnification of B&L. AERIE shall indemnify, defend, save and hold B&L
and each of its Affiliates, officers, directors, employees and agents harmless
from and against Loss or Losses resulting from, or arising out of (a) any
material breach of any warranty hereunder or material non-fulfillment or
non-performance by AERIE of any agreement, covenant or obligation of AERIE under
this Agreement; (b) any bodily injury arising as a result of a negligent act or
omission of AERIE; (c) FDA enforcement action, inspections or Product recalls or
market withdrawals except where arising out of or resulting from B&L’s failure
to manufacture Product in accordance with the terms of this Agreement; (d)
AERIE’s acts relating to the promotion, marketing and/or distribution of
Product, except where arising out of or resulting from B&L’s failure to
manufacture Product in accordance with the terms of this Agreement; (e)any
actual or alleged infringement or violation of any patent, trade secret or
proprietary right governing the Product and (f)any actual or alleged defect in
the Product(s) caused by the intentional or negligent acts or omissions of AERIE
including, without limitation, detects in the specifications, formulations,
packaging, labeling, designs or other instructions regarding the Product(s) as
provided by AERIE to B&L.
B.    Indemnification of AERIE. B&L shall indemnify, defend, save and hold AERIE
and each of its Affiliates, officers, directors, employees and agents harmless
from and against Loss or Losses resulting from, or arising out of (a)any
material breach of any warranty hereunder or material non-fulfillment or
non-performance by B&L of any agreement, covenant or obligation of B&L under
this Agreement; (b) any bodily injury arising, as a result of a negligent act or
omission of B&L; (c) FDA enforcement action, inspections or Product recalls or
market withdrawals except where arising out of or resulting from AERIE’s failure
to distribute Product in accordance with the terms of this Agreement; (d) B&L’s
failure to manufacture Product in accordance with the terms of this Agreement;
(e)any actual or alleged infringement or violation of any patent right governing
the Product and (f)any actual or alleged defect in the Product(s) caused by the
intentional or negligent acts or omissions of B&L including, without limitation,
defects in the specifications, formulations, packaging, labeling, designs or
other instructions regarding the Product(s) as administered by B&L in a form
other than that provided by AERIE.

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C.    Registration. Any FDA or governmental approvals necessary for sale of the
Product(s) shall be the responsibility of AERIE. AERIE shall use its best
efforts to maintain all necessary FDA or governmental approvals for sale of the
Product(s) and that the packaging and labeling of such Product(s) shall comply
with all applicable FDA or governmental and rules and regulations.
12.    Indemnification Procedures
A.    Upon the occurrence of an event, which requires indemnification under this
Agreement, the Indemnified Party shall give prompt written notice to the
Indemnifying Party providing reasonable details of the nature of the event and
basis of the indemnity claim. The Indemnifying Party shall then have the right,
at its expense and with counsel of its choice, to defend, contest, or otherwise
protect against any such Action. The Indemnified Party shall also have the
right, but not the obligation, to participate at its own expense in the defense
thereof with counsel of its choice. The Indemnified Party shall cooperate to the
extent reasonably necessary to assist the Indemnifying Party in defending,
contesting or otherwise protesting against any such Action provided that the
reasonable cost in doing so shall be paid by the Indemnifying Party. If the
Indemnifying Party fails within thirty (30) days after receipt of such notice
(a) to notify the Indemnified Party of its intent to defend, or (b) to defend,
contest, or otherwise protect against such suit, action, investigation, claim or
proceeding, or fails to diligently continue to provide such defense after
undertaking to do so, the Indemnified Party shall have the right, upon ten (10)
days’ prior written notice to the Indemnifying party, to defend, settle and
satisfy any such suit, action, claim, investigation or proceeding and recover
the costs of the same from the Indemnifying Party.
B.    Survival. The indemnification contained herein shall survive any
termination of this Agreement.
13.    Product Recalls
If B&L meets all mutually agreed upon release specifications it will have no
liability for recall expenses. In the event that such recall results from the
breach by B&L of its warranties under this Agreement, defective manufacture by
B&L or other actions of B&L, B&L shall be responsible for the reasonable
expenses of the recall to which B&L will reimburse AERIE either AERIE in cash or
by replacement of product as may be agreed and reasonable related expense and
administrative fees. In the event the recall results from the actions of AERIE
(not including the recall order), AERIE shall be responsible for the expenses of
the recall and any costs associated with the distribution of replacement
Product(s).
14.    Product Complaints
Product Complaints to be received by AERIE and at its own expense, AERIE will
promptly respond to all reasonable inquiries from customers pertaining to
Product Complaints. Notwithstanding the generality of the foregoing, B&L will,
at AERIE’s expense, conduct all appropriate investigations required under FDA
regulations where allegations pertaining to product quality are explicitly or
implicitly raised in a Product Complaint.
15.    Confidentiality.
Except as otherwise expressly permitted herein (including Article 16), each
party hereto agrees to keep all Confidential Information of the other party
furnished under this Agreement confidential within its respective company and
agrees not to disclose same to third parties without the prior written consent
of the other party hereto, except as required by law or to the extent such
information (i) was already in the rightful possession of a party prior to its
receipt from the other party as evidenced by written records, (ii) becomes
generally known to the public through legal means and also otherwise than as a
result of the breach of this Article 15, (iii) is disclosed by a third party
having no obligation to keep such information confidential.

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During the Term, of this Agreement, both AERIE and B&L agree to keep the subject
matter of this Agreement confidential and not disclose it to any third party
except as required by law, in which instance timely notice shall be given to the
party not making the disclosure, or except as necessary under this Agreement or
as mutually agreed to. The receiving party will, upon the written request of the
disclosing party after any expiration or termination of this Agreement, promptly
destroy or return to the disclosing party all Confidential Information
(including notes, writings and other material developed therefrom) and all
copies thereof and retain none for its files, except that each party may retain
one (1) copy for its legal files. The return or retention of such information
will not relieve the receiving party of its continuing obligation of
confidentiality hereunder.
16.    Patents and Trademarks
AERIE further warrants that manufacture or sale of the Product(s) to AERIE will
not infringe any third party’s proprietary rights and that AERIE will indemnify,
defend and hold B&L harmless from any damage from any and all infringement
claims relating to the Product(s) and any trademarks, trade names, proprietary
right, trade name, trademark, service mark or copyright used by AERIE in
connection with the Product(s). B&L, excluding technology, processes and
instructions provided by AERIE, further warrants that it will not infringe any
third party’s patent or proprietary rights in the manufacture of the Products.
B&L acknowledges that AERIE owns or possesses certain AERIE Confidential
Information, inventions, technologies, processes, know-how, trade secrets,
improvements, other intellectual property and other assets relating to the
Product, which have been independently developed or licensed by AERIE
(collectively “AERIE Technology”). AERIE shall own, and B&L hereby assigns and
agrees to assign to AERIE, all inventions, developments, or improvements to the
AERIE Technology, whether or not patentable, that arise from, or are based upon
the Product, its manufacture or AERIE Technology, together with any analytical
methods for testing the Product, modifications to the Product formulation or
Product container, methods of mixing the Product solution and all data (e.g.,
label qualification data) incorporated into FDA filings (collectively, “AERIE
Developments”). AERIE acknowledges that B&L owns or possesses certain B&L
Confidential Information, inventions, technologies, processes, know-how, trade
secrets, improvements, other intellectual property and other assets relating to
B&L’s manufacturing capabilities, which have been independently developed or
licensed by B&L (collectively “B&L Technology”). B&L shall own, and AERIE hereby
assigns and agrees to assign to B&L, all inventions, developments, or
improvements made solely to the B&L Technology.
17.    Public Announcements. Neither AERIE nor B&L shall use the name of the
other firm in any publicity or advertising and may not issue a press release,
public announcement or otherwise publicize or disclose the existence of this
Agreement, any information related to this Agreement or the terms or conditions
hereof, without obtaining the other party’s prior written approval and consent,
except as required by law.
18.    Termination.
A.    For Default. Without prejudice to any other legal or equitable remedy or
remedies either party may have, this Agreement may be canceled by either party
for breach of any material provision of this Agreement, or for a pattern or
practice of repeated non-material breaches of provisions of this Agreement, if
such cause remains after the giving of not less than [***] days prior written
notice ([***] days in the case of B&L’s failure to deliver) to the breaching
party of the existence of such cause to terminate this Agreement. B&L will have
the right to terminate if volumes fall below the minimum annual volumes for two
consecutive years and AERIE will pay for all existing inventory of components to
cover Purchase Orders consistent with the AERIE forecast. However, unless there
is a default by AERIE for lack of payment, AERIE shall have the option of having
B&L produce Product(s) for which B&L has already committed to or procured raw
materials or components.

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B.    For Insolvency. Without prejudice to any legal or equitable remedy or
remedies either party may have, this Agreement may be immediately terminated at
the option of a party, immediately upon written notice, in the event of the
insolvency of the other party, however such insolvency may be evidenced.
C.    For Failure to Meet Timelines. Without prejudice to any legal or equitable
remedy or remedies either party may have, this Agreement may be immediately
terminated at the option of AERIE, immediately upon written notice provided to
B&L to improve within [***] days. In the event B&L does not achieve the mutually
agreed project milestone within [***] days after the deadline specified, or any
mutually agreed upon change, unless such failure is due to an act or omission of
AERIE than AERIE may immediately terminate this Agreement.
D.    Company Strategy and Capacity Changes. This Agreement may be terminated at
the option of B&L, upon [***] months prior written notice to AERIE, based on
changes in B&L strategy or manufacturing capacity constraints; provided, however
that such notice shall not to be given prior to the NDA approval(s) of
Product(s). In the event of such termination by B&L, B&L shall, in cooperation
with AERIE, transfer Product manufacturing technology to a third party contract
manufacturer. All costs and expenses associated with the transfer of Product
manufacturing technology to a third party shall be borne solely by B&L. This
Agreement may be terminated at the option of AERIE, upon [***] months prior
written notice to B&L, based on changes in AERIE’s strategy; provided, however,
that such notice shall not to be given prior to the NDA approval(s) of
Product(s). In the event of a termination by AERIE, AERIE shall, in cooperation
with B&L, transfer Product manufacturing technology to a third party contract
manufacturer. All costs and expenses associated with the transfer of Product
manufacturing technology to a third party shall be borne solely by AERIE.
E.    Effect of Termination. Within [***] days following the effective date of
termination of this Agreement, B&L will provide AERIE with a detailed accounting
of (i) the amount of raw materials, components and printed materials held by B&L
for manufacturing into Product under this Agreement, (ii) the amount of Product
in the process of being manufactured by B&L for AERIE under this Agreement and
(iii) the amount of finished Product then held in inventory by B&L (including
Product which has not been subjected to B&L’s quality assurance testing
procedures) under this Agreement. Unless otherwise mutually agreed by the
parties prior to the effective date of termination or as otherwise set forth in
this Agreement, B&L shall deliver to AERIE or to such other person or place as
AERIE shall direct in writing, at AERIE’S sole cost and expense (except at B&L’s
sole cost and expense, if AERIE terminated the Agreement for cause), all raw
materials and Product described above and AERIE shall pay B&L, within 30 days of
such delivery, the Product Price owing to B&L for finished Product,
Manufacturing Costs for work in process, and B&L’s verifiable out-of-pocket
costs incurred in connection with unused inventories of packaging components and
raw materials. No termination of this Agreement shall have any effect on, or
relieve either party from, the obligation to make any payment or perform any act
arising prior to the effective date of termination. However B&L and AERIE shall
work together in an effort to consume all remaining raw materials, components
and Product(s) in process for Product(s) to be delivered to AERIE. But B&L shall
have no obligation to complete any further processing of Product(s) if AERIE is
in default due to lack of payment. In addition, AERIE shall have no
responsibility for any raw materials or components committed to or procured by
B&L in excess of that required to fill open purchase orders submitted by AERIE.
Upon the expiration of this Agreement or its earlier termination, B&L will
transfer all Product-manufacturing technology and information to AERIE’s
designated manufacturer and provide full cooperation and assistance to assure
smooth transition. AERIE will reimburse B&L for B&L’s reasonable costs and
expenses incurred in providing the foregoing services.
19.    Force Majeure and Allocation.

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The obligations of either party hereunder are contingent upon, and B&L shall not
be liable for, acts of God, war, riots, floods, fires, storms, strikes,
catastrophes or any other acts of force majeure, FDA or governmental
restrictions, prohibitions, regulations, and requisitions, the acts of suppliers
or common carriers, or other interferences beyond the reasonable control of such
party to the extent that the same prevent or delay the performance of the
obligations herein contained, always provided that such party shall use its best
efforts to fulfill the obligations under this Agreement and provide the other
party with prompt notice of the occurrence of any such event of force majeure.
20.    Assignment or Transfer of Rights.
This Agreement will inure to the benefit of and be binding upon each of the
parties hereto and their respective successors and assigns. Neither this
Agreement, nor any of the rights and obligations under this Agreement, may be
assigned, transferred or otherwise disposed of by either party without the prior
written consent of the other party, unless such assignment, transfer or
disposition is to a successor to all or substantially all of the businesses and
assets of such party pertaining to the subject matter hereof. Any assignment
made in contravention of the foregoing shall be void and of no effect.
21.    Notices.
All notices or communications required or permitted hereby shall be sent to the
respective addresses set forth below by overnight delivery, telegram, telex,
telefax, or registered or certified mail, return receipt requested and shall be
effective upon delivery.
As to B&L:                Bausch & Lomb Incorporated
8500 Hidden River Parkway
Tampa, Florida 33637
Attention: Director of Plant Operations

With a copy to:                Valeant Pharmaceuticals North America LLC
400 Somerset Blvd, Bridgewater, NJ 08807
Attn: General Counsel

As to AERIE:                AERIE Pharmaceuticals, Inc.
135 US Highway 206, Suite 15, Bedminster, NJ 07921

With a copy to:                AERIE Pharmaceuticals, Inc.
7020 Kit Creek Road, Suite 720
Morrisville, North Carolina 27709
Attention: Ramesh Krishnamoorthy
Vice-President, Manufacturing

The address to which notice to either party shall be sent may be changed by such
party by written notice to the other party.
22.    Order of Preference.
All sales by B&L to AERIE of Product(s) shall be subject to the provisions of
this Agreement and any provision of any purchase order placed by AERIE or order
acknowledgment sent by B&L which is inconsistent herewith or in addition hereto
shall be null and void unless accepted by the receiving party in writing and
signed by one of its authorized representatives.

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23.    Applicable Law.
This Agreement shall be governed and construed in accordance with the laws of
the State of New Jersey without reference to its choice-of-law rules.
24.    Survival.
Those provisions which, by their meaning and intent, have applicability beyond
the term of this Agreement shall survive the termination of this Agreement.
25.    Entire Agreement.
This is the entire Agreement between the parties hereto regarding the Product(s)
and supersedes any prior agreements made between the parties regarding the
Product(s). No prior statement, representation, promise or agreement, written or
verbal, shall be of any force to vary, expand or diminish the provisions hereof.
The Agreement may be modified or amended only by an instrument in writing,
executed by both parties. No waiver or other failure to exercise any right
under, or default or extension of time for performance under, any provision of
this Agreement will affect the right of any party to exercise any subsequent
right under or otherwise enforce said provision or any other provision hereof or
to exercise any right or remedy in the event of any other default, whether or
not similar. This Agreement may be executed in two counterparts, each of which
shall be deemed an original, and all of which together, shall constitute one and
the same instrument.
26.    Improvement Activities. B&L will cooperate with AERIE in reviewing a
combination of improvement activities that can be measured including cost
improvements, line speed increases and change-over time reductions at B&L’s
plant(s), lead time improvements, and others. Implementation of any such
improvement activities that will impact the approved validated state of the
AERIE process for manufacturing the Product(s) will only be made pursuant to
mutual written agreement of B&L and AERIE. In good faith AERIE and B&L will work
together in reviewing continuous improvement projects pursuant to this Section
26.
27.    Significant Product Volumes Increase. If product volumes increase
significantly and capital investment is required to meet the new demand, B&L and
AERIE will mutually agree in a good faith the capital investment and payment
terms and conditions for new equipment and validation activities.
28.    Service Level & On Time Shipping Criteria.
A.    Customer Service levels must be maintained at a [***] level and on-time
shipment rating must be maintained at [***] level. These metrics will be staged
in over a [***] month period, after initial PO issuance. Both B&L and AERIE will
need to collaborate/agree on Service Level and on-time measurement procedures.
B&L shall not be liable for events of force majeure described in Section 18
above that affect the customer service levels.
B.    If B&L has [***] months below either metric of customer service level or
on-time shipment rating in a fixed [***] month window (and other [***] months
are at minimum or better) that [***] month period is considered acceptable. If
[***] months out of a [***] month window are below either metric but the average
is at or above metric, that period is considered acceptable. If the average is
below metric, then the period is considered unacceptable. If there are [***]
consecutive [***] month periods that are unacceptable, AERIE would then have the
option to move a percentage of all requirements to an alternative manufacturer.
Should a [***] month period (consecutive period) be acceptable, then the
percentage moved (of requirements), at AERIE discretion, would remain with an
alternate manufacturer. Should the [***] month period be unacceptable, AERIE has
the option, at its discretion, to move [***]% of requirements to

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an alternate manufacturer which may result in termination of this contract.
Should the [***] month periods be acceptable, after the [***] unacceptable [***]
month periods, than AERIE would revert to supply of the forecasted requirements
per Section 7B from B&L.
C.    Should B&L perform at the minimum or better, Service Level and on-time
shipment Levels, they will continue to supply AERIE’s forecasted requirements
per Section 7B for items listed in Appendix C.
D.    In addition to the forecasted requirements per Section 7B and specified in
Section 7D, AERIE will provide minimally an updated forecast for a [***] month
period on the anniversary date of the effective date of this agreement until the
NDA is submitted for the Products; following the submission of the NDA for the
Products, AERIE will minimally provide an updated forecast for a [***] month
period every [***] months from the submission date of the NDA until the approval
of the NDA. This information will be used by B&L to assess and comply with the
Service Level and On-time shipping criteria described above in Section 28 A and
B.
E.    B&L upon written request from AERIE will provide annually an estimate of
available capacity to manufacture AERIE’s Products for the following [***]
years. This estimate is non-binding and may be revised following AERIE’s
forecasts. Both B&L and AERIE will make a good faith effort to review and revise
the Service Level and On-time shipping criteria based on this capacity
assessment against the updated forecasted requirements.

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IN WITNESS WHEREOF, the parties have hereunto set forth their signatures as of
the date set forth above.

BAUSCH & LOMB INCORPORATED
 
AERIE PHARMACEUTICALS, INC.
 
 
 
 
 
 
 
 
 
 
By:
/s/ Ivan Cartagena
 
By:
/s/ Tom Mitro
 
 
 
 
 
Title:
Executive Director Plant Operations
 
Title:
President and COO

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APPENDIX A

PRICE SCHEDULE
Product                                        Unit Price

AR-13324 Ophthalmic Solution, 0.02% - NLT 2.5 mL                $[***]

AR-13324 Ophthalmic Solution, 0.02% - 1 mL ('Professional Sample')        $[***]

PG-324 Ophthalmic Solution, 0.02% - NLT 2.5 mL                $[***]

PG-324 Ophthalmic Solution, 0.02% - 1 mL ('Professional Sample')        $[***]

Note: The quoted prices are based upon estimated standards of 2015 and may be
revised on the actual year of commercialization of each Product, based on the
price increase provisions as outlined in Section 3.B. of this document.

Note: The quoted price(s) for PG-324 Ophthalmic Solution, 0.02% are based on the
current costing of the latanoprost sourced by B&L; this may be revised in the
event Aerie would qualify another source of latanoprost with a lower cost.

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APPENDIX B

Annual Minimums
Product: AR-13324 Ophthalmic Solution, 0.02%

Production Year Starting                Annual Minimum (number of units)

2017                            [***]
2018                            [***]
2019                            [***]
2020                            [***]

Note: The annual minimums may be revised following the NDA approval of AR-13324
Ophthalmic Solution, 0.02% product and/or on an annual basis as outlined in
Section 7A.

Product: PG-324 Ophthalmic Solution, 0.02%

Production Year Starting                Annual Minimum (number of units)

2018                            [***]
2019                            [***]
2020                            [***]
2021                            [***]

Note: The annual minimums may be revised following the NDA approval of PG-324
Ophthalmic Solution, 0.02% and/or on an annual basis as outlined in Section 7A.

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APPENDIX C
Product                Batch Size        Units per batch

AR-13324 Ophthalmic Solution, 0.02%        [***] L        approx.. [***] units
of 1 mL fill
size per [***] L batch
approx.. [***] units of NLT 2.5 mL
size per [***] L batch

Note: AR-13324 Ophthalmic Solution, 0.02% (also known as RhopressaTM) will be
manufactured minimally in two different fill sizes, namely No Less Than 2.5 mL
and approximately l mL.

PG-324 Ophthalmic Solution, 0.02%        [***] L        approx.. [***] units of
1 mL fill
size per [***] L batch
approx.. [***] units of NLT 2.5 mL
size per [***] L batch

Note: PG-324 Ophthalmic Solution, 0.02% (also known as RoclatanTM) will be
manufactured minimally in two different fill sizes, namely No Less Than 2.5 mL
and approximately 1 mL.

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