Exhibit 10.49

 

CONFIDENTIAL TREATMENT REQUESTED

 

INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND
NOTED WITH “****”. AN UNREDACTED VERSION OF THIS DOCUMENT HAS ALSO BEEN PROVIDED
TO THE SECURITIES AND EXCHANGE COMMISSION.

 

CONFIDENTIAL

Execution Version

 

MANUFACTURING AND SUPPLY AGREEMENT

 

This Manufacturing and Supply Agreement (this “Agreement”), dated as of
November 12, 2013 (the “Effective Date”), is hereby entered into by and between
Lantheus Medical Imaging, Inc., a corporation organized and existing under the
laws of Delaware with its principal place of business at 331 Treble Cove Road,
North Billerica, MA 01862 (“LMI”), and Pharmalucence, Inc., a corporation
organized and existing under the laws of Delaware with a place of business at 29
Dunham Road, Billerica, MA 01862 (“CMO”).  LMI and CMO are referred to herein
individually as a “Party” and collectively as the “Parties”.

 

RECITALS

 

WHEREAS, CMO is experienced in the manufacture and supply of products;

 

WHEREAS, LMI desires that CMO manufacture the Product(s) (as defined below) for
and supply the Product(s) to LMI on the terms and conditions set forth in this
Agreement; and

 

WHEREAS, CMO is willing to manufacture the Product(s) for and supply the
Product(s) to LMI on the terms and conditions set forth in this Agreement;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the Parties, intending to be legally bound, hereby agree as
follows:

 

1.                                      DEFINITIONS

 

1.1                               Defined terms.  As used herein, the following
terms shall have the following meanings:

 

(a)                                 “Affiliate” means any corporation or other
entity which controls, is controlled by, or is under common control with, a
Party to this Agreement.  A corporation or other entity shall be regarded as in
control of another corporation or entity if it owns or directly or indirectly
controls more than fifty percent (50%) of the voting stock or other ownership
interest of the other corporation or entity, or if it possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of the corporation or other entity or the power to elect or appoint
fifty percent (50%) or more of the members of the governing body of the
corporation or other entity.  For the avoidance of doubt, none of Avista Capital
Partners, its associated companies and

 

--------------------------------------------------------------------------------

 

entities, their respective successors and assigns, or their own direct and
indirect investments (other than Lantheus MI Holdings, Inc. and its direct and
indirect subsidiaries) shall be deemed to be Affiliates of LMI.

 

(b)                                 “API” means, with respect to any Product,
the pharmacologically active drug substance described on the applicable
Proposal, which can be used to manufacture such Product pursuant to Product’s
NDA.

 

(c)                                  “Batch” means a specific quantity of the
applicable Product that is intended to have uniform character and quality,
within specified limits, and is produced according to a single manufacturing
order during the same cycle of manufacture.

 

(d)                                 “cGMPs” means all applicable current good
manufacturing practices, as may be amended or supplemented from time to time,
including the current good manufacturing practices required by the FDA pursuant
to 21 CFR Parts 210 and 211 and ICH Q7, each as amended from time to time.

 

(e)                                  “CMC” means (i) manufacturing process
development for all presentations of Product; (ii) all chemistry, manufacturing
and control procedures necessary for the manufacturing, testing and quality
control release of all presentations of the Product; and (iii) sourcing and
testing of all raw materials and components used in the production of all
presentations of the applicable Product.

 

(f)                                   “Calendar Quarter” means any period of
three consecutive calendar months commencing with the first day of any January,
April, July, or October.

 

(g)                                  “DMF” means a Drug Master File as described
in 21 CFR 14.420.

 

(h)                                 “FDA” means the United States Food and Drug
Administration or any successor entity thereto and similar health regulatory
agencies in other countries in the Territory.

 

(i)                                     “Intellectual Property” means all right,
title and interest in or relating to intellectual property, whether protected,
created or arising under the laws of the United States or any other
jurisdiction, including: (i) all patents and applications therefor, including
all continuations, divisionals, and continuations-in-part thereof and patents
issuing thereon, along with all reissues, reexaminations and extensions thereof;
(ii) all copyrights and all mask work, database and design rights, whether or
not registered or published, all registrations and recordations thereof and all
applications in connection therewith, along with all reversions, extensions and
renewals thereof; (iii) all trade secrets; and (iv) all other intellectual
property rights arising from or relating to Technology.

 

(j)                                    “LMI Materials” means the materials
supplied by LMI to CMO, as identified in the Proposal(s) (including, but not
limited to, the applicable API), which shall be used to manufacture the
applicable Product pursuant to the applicable Product NDA.

 

2

--------------------------------------------------------------------------------

 

(k)                                 “Lot” means, with respect to any Product, a
Batch, or a specific identified portion of a Batch, which consists of at least
the number of vials of such Product set forth on the applicable Proposal.

 

(l)                                     “NDA” means the New Drug Application and
similar regulatory approvals filed with the FDA or other agencies for the
applicable Product, and any amendments or Supplemental New Drug Applications
thereto, or documents incorporated by reference.

 

(m)                             “Product” means the final finished dosage form
presentations of any of the product(s) named and described on any of the
Proposal(s), which is manufactured pursuant to the applicable Product NDA and
suitable for distribution in commerce in the Territory.

 

(n)                                 “Proposals” means proposals and quotations
submitted by CMO to LMI and mutually accepted by both Parties in writing, copies
of which shall be attached hereto and shall be automatically deemed incorporated
herein by reference.  In the event of any conflict between the Proposal(s) and
this Agreement, the terms of this Agreement shall control.

 

(o)                                 “Specifications” means the written
specifications for the applicable Product separately agreed to by the Parties in
writing, as the same may be amended from time-to-time pursuant to the provisions
of Section 2.7, and the quality standards, including tests, analytical
procedures and acceptance criteria, that are established to confirm the quality
of such Product which are mutually agreed to in writing and contained or
referenced in the Master Batch Record for such Product or as otherwise mutually
agreed to in writing by the Parties.

 

(p)                                 “Technology” means, collectively, all
information, designs, formulae, algorithms, procedures, methods, techniques,
ideas, know-how, research and development, technical data, programs,
subroutines, tool design, material specifications, processes, inventions
(whether patentable or unpatentable and whether or not reduced to practice),
apparatus, design, creations, improvements, works of authorship and other
similar materials, and all recordings, graphs, drawings, reports, analyses, and
other writings, and other tangible embodiments of the foregoing, in any form
whether or not specifically listed herein, and all related technology, that are
used in, incorporated in, embodied in, displayed by or relate to, or are used in
connection with the foregoing.

 

(q)                                 “Territory” means all countries or regions
in the world.

 

1.2                               Terms Defined Elsewhere in this Agreement. 
For purposes of this Agreement, the following terms have meanings set forth in
the sections indicated:

 

Term

 

Section

Act

 

5.1

Agreement

 

Preamble

CMO

 

Preamble

Dispute

 

8.1(a)

DMF

 

3.4(b)

 

3

--------------------------------------------------------------------------------

 

Force Majeure Event

 

9.5

Forecast

 

2.2(a)

Improvements

 

6.1(a)

Indemnitee

 

7.3

Indemnitor

 

7.3

Initial Forecast

 

2.2(a)

Information

 

6.2(a)

Liability

 

7.1

LMI

 

Preamble

Manufacturing Defect

 

7.1

Party or Parties

 

Preamble

Pre-existing Intellectual Property

 

6.1(a)

Quality Agreements

 

5.7

Rejection Notice

 

5.6

Senior Executive

 

8.1(a)

Subsequent Forecast

 

2.2(a)

Term

 

3.1

terminal supply

 

3.3(c)

TPM EHS Assessment Program

 

5.8(b)

Transfer Notice

 

2.5

 

1.3                               Interpretation.  References in this Agreement
to the singular include references to the plural and vice versa.  Unless the
context otherwise requires, references in this Agreement to Articles, Sections,
and Exhibits shall be deemed references to Articles and Sections of, and
Exhibits to, this Agreement.  Unless the context otherwise requires, the words
“hereof”, “hereby” and “herein” and words of similar meaning when used in this
Agreement refer to this Agreement (together with any Proposal(s)) in its
entirety and not to any particular Article, Section or provision of this
Agreement.  Any reference to any federal, state or local statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise.

 

2.                                      SERVICES

 

2.1                               Services.

 

(a)                                 Development.  CMO shall perform development
services in support of the manufacture of Product(s) as defined by the
Proposal(s) and for the pricing set forth for such development services in the
Proposal(s).  CMO hereby represents and warrants that it has the experience,
capability and resources, including but not limited to sufficient personnel and
supervisors, to efficiently and expeditiously perform such development services
in a professional, competent and timely manner.  CMO further represents and
warrants that it will at all times devote the necessary personnel and
supervisors to perform such development services and that, in fulfilling its
obligations, CMO shall assign only persons with the appropriate training and
qualifications to perform such services.  LMI and CMO shall use commercially
reasonable efforts to qualify CMO as a

 

4

--------------------------------------------------------------------------------

 

supplier of the Product named and defined in Proposal #1 dated as of the date
hereof under the applicable Product NDA.

 

(b)                                 No Debarment.  CMO represents and warrants
that neither it, nor any of its employees, agents or consultants performing
services under this Agreement, have been debarred, suspended, or otherwise
excluded by the FDA or any other regulatory authority from conducting business
and, to the best of its knowledge after due inquiry, are not under consideration
to be debarred, suspended or otherwise excluded.  CMO agrees to notify LMI as
soon as practicable upon CMO’s learning of the occurrence of any such debarment,
conviction, investigation or inquiry relating to a potential debarment,
suspension or exclusion, of any person performing services pursuant to this
Agreement, agrees that said person shall be immediately prohibited from
performing services under this Agreement and agrees that LMI shall have the
right to terminate this Agreement therefor immediately upon written notice.

 

(c)                                  No Conflict.  CMO warrants and represents
that no trade secrets or other confidential information of any other person,
firm, corporation, institution or other entity will be wrongfully disclosed by
it to LMI or any third party in connection with any of the services called for
hereunder.  CMO further warrants and represents that none of the provisions of
this Agreement, nor the services which will be performed by CMO pursuant to the
work to be performed hereunder, contravenes or is in conflict with any agreement
of CMO or its Affiliates with, or obligation to, any other person, firm,
corporation, institution or other entity including, without limiting the
generality of the foregoing, employment agreements, consulting agreements,
service agreements, disclosure agreements or agreements for assignment of
inventions.  CMO shall not subcontract with any third party or use Affiliates or
agents to perform any of its obligations hereunder without the prior written
consent of LMI (not to be unreasonably withheld, delayed or conditioned).  CMO
shall cause all of its employees and any permitted subcontractor, agent or
Affiliate to be bound by, and to comply with, all confidentiality, quality
assurance, regulatory and other obligations and requirements as set forth in
this Agreement.

 

2.2                               Purchase and Sale.  CMO shall manufacture,
sell and deliver to LMI, and LMI shall purchase from CMO, the Product(s) on the
terms and conditions set forth in this Agreement.  The following provisions
shall apply with respect to the Product(s):

 

(a)                                 Forecasts; Orders.  LMI shall send to CMO a
twelve (12) month forecast (the “Initial Forecast”) for the type and quantities
of Product(s) which LMI expects to have delivered from CMO during such 12-month
period.  LMI shall provide the Initial Forecast for Product(s) to CMO within
**** (****) days after CMO is approved as a supplier of Product(s) under the
NDA.  LMI shall thereafter update such forecast at least one day prior to the
first business day of each calendar quarter thereafter (a “Subsequent Forecast”,
and together with the Initial Forecast, a “Forecast”), providing CMO with a
rolling **** (****) month forecast for Product(s).  Each Forecast shall include
an estimated number of Batches for each month during the ****-month period
covered by such Forecast.  Amounts set forth in a Forecast are estimates, to be
used for planning purposes only, and Forecasts shall not constitute binding
purchase orders, except that the

 

5

--------------------------------------------------------------------------------

 

first **** (****) months of each Forecast shall be binding upon LMI and LMI
shall place purchase orders corresponding to the binding portion of such
Forecast.  CMO will use all commercially reasonable efforts to accommodate any
changes in quantities of Product(s) ordered by LMI.

 

(b)                                 Purchase Orders; Rejection of Orders.  LMI
will provide CMO with a firm purchase order (specifying location(s) of delivery
and requested delivery date(s)) at least **** (****) days prior to the earliest
delivery date specified in such purchase order.  All purchase orders will be
sent by facsimile or electronic mail to the address specified by CMO.  CMO shall
accept each purchase order and confirm the date of manufacturing and shipment
within **** (****) business days of receipt thereof.  Such purchase order shall
be deemed accepted by CMO if CMO does not reject a purchase order within the
**** business-day period.  In addition, CMO will use all commercially reasonable
efforts to ****.

 

(c)                                  Prices.  Pricing for Product(s) supplied by
CMO shall be as set forth in the applicable Proposal.

 

(d)                                 Taxes.  Such prices do not include sales,
use, value added or other excise tax.  LMI will pay (or, if paid by CMO,
reimburse CMO) for all such taxes arising under this Agreement (but not any
taxes based upon CMO’s income).  In lieu thereof, LMI may provide to CMO a tax
or other levy exemption certificate acceptable to the taxing or other levying
authority.

 

(e)                                  Superiority of Agreement.  The terms of
this Agreement and of the Quality Agreements shall prevail over any inconsistent
terms in any Proposal, purchase order, acknowledgment or invoice, and no
additional terms (other than those set forth in this Agreement and the Quality
Agreements or allowed pursuant to the terms of this Section 2.2) in a purchase
order, acknowledgement or invoice shall be binding on either Party.

 

2.3                               Delivery.

 

(a)                                 Schedule; Quantities.  CMO will ship, and
LMI will take delivery, of all Product(s) within **** (****) days of the
applicable delivery date(s) set forth in the applicable accepted purchase order;
provided that LMI and CMO may mutually agree to modify any such delivery
date(s) at any time prior to actual shipment by CMO; and provided further that,
in the event that LMI (or its designee) fails to take delivery of
Product(s) within **** (****) days of the originally specified delivery
date(s) (other than because Product(s) are appropriately rejected pursuant to
Section 5.6), then CMO shall store such Product(s) at a mutually agreed upon
storage facility (such agreement not to be unreasonably withheld, conditioned or
delayed) at LMI’s cost.  In the event that CMO, at any time during the term of
this Agreement, has reason to believe that it will be unable to perform any of
the services under this Agreement or meet the requested delivery
date(s) specified in the purchase orders, CMO shall promptly notify LMI in
writing of such delay(s) within **** (****) business days of such
determination.  To the extent that (i) a Lot is delivered **** (****) or more
days after the specified delivery date which had previously been accepted by CMO
and (ii) such delay is due to CMO’s breach,

 

6

--------------------------------------------------------------------------------

 

negligence or willful misconduct, then LMI shall have the right to purchase such
Lot if it so desires at **** (****%) of the applicable Batch price.

 

(b)                                 Terms of Delivery.  Delivery terms shall be
DDP North Billerica, MA (or any other location designated by LMI in writing), at
which time risk of loss and responsibility for the Product(s) will transfer to
LMI.  DDP has the meaning assigned it in the ICC Incoterms, 2010.  CMO shall
ship the Product(s) using LMI’s designated carrier in accordance with LMI’s
instructions regarding destination, delivery date, temperature control and such
other factors as LMI reasonably believes are relevant for purposes of the
delivery.  CMO shall ship all Product to the locations designated by LMI.

 

2.4                               Payment Terms.  Invoices will reflect actual
quantities and types of Product(s) properly delivered in accordance with the
applicable purchase order.  All undisputed portions of invoices issued by CMO to
LMI shall be paid within **** (****) days after the date of receipt of the
corresponding invoice (or as otherwise agreed to by the Parties in writing if
prompt payment discounts are made available to LMI by CMO).  Such payments shall
be made in U.S. dollars by check or wire transfer or by such other method as CMO
and LMI shall reasonably designate from time to time.  In no event shall LMI be
responsible for any payments related to Product(s) for which CMO was unable to
satisfy its obligations under this Agreement, whether by Force Majeure Event or
otherwise.  Interest shall be payable on all undisputed amounts not paid on the
due date at a rate of ****% for each month the amounts remain unpaid.  If any
amount on an undisputed invoice is not paid when due hereunder, without
prejudice to any other rights or remedies CMO may have, CMO will be entitled to
(i) suspend the manufacturing and delivery of Product(s) until it has received
payment in full for all past due amounts and (ii) recover from LMI the costs and
expenses incurred in connection with collecting the same (including reasonable
and documented costs of investigation and attorneys’ fees).

 

2.5                               Transfer Notice.  LMI shall have the right to
qualify itself, any Affiliate or any third party as a manufacturer of any of the
Product(s), and to seek and obtain regulatory approval(s) of such manufacturing
site or sites.  If LMI requires CMO’s assistance in connection with such
activities, LMI shall notify CMO in writing, specifying the Technology to be
transferred (“Transfer Notice”).  Upon receipt of such Transfer Notice, the
Parties will agree in good faith upon a schedule for commencement and completion
of the transfer.  Any transfer of Technology under this provision will be
pursuant to a protocol established by LMI and shall include the delivery of all
applicable Product-specific documents required to carry out the transfer.  CMO
hereby agrees to perform such transfer in accordance with the protocol and
mutually agreed upon schedule in return for reasonable compensation,
commensurate with level of effort, market comparables and as agreed between the
Parties.

 

2.6                               Inventory; Packaging Information.  CMO shall,
at all times during the Term, maintain inventory levels of components and raw
materials required to manufacture the volume of Product(s) forecasted by LMI for
**** pursuant to Section 2.2(a) of this Agreement.  At CMO’s option, within ****
(****) **** of the end of each calendar year, LMI shall purchase from CMO, at
****, such raw materials and components in good, saleable condition purchased by
CMO in reliance on Forecasts (as set forth above) for the applicable Calendar
Quarters that could not be returned to the original supplier by CMO or used by
CMO in the supply of Product(s) to LMI during such calendar year due to lower
orders of Product(s) than Forecast

 

7

--------------------------------------------------------------------------------

 

through no fault of CMO, unless the Parties reasonably believe that such
materials will be used in ****.  LMI shall provide CMO with all packaging and
labeling information and designs, if applicable, including without limitation,
all art work and usage instructions to be applied to each Product (which are the
property of LMI, only to be used as set forth herein and returned to LMI upon
termination of this Agreement) at least **** (****) days in advance of any
requirement that any Product be delivered in packaged form to enable CMO to
obtain the necessary packaging materials and meet such delivery requirements
(provided, however, CMO shall use all commercially reasonable efforts to
accommodate any changes requested by LMI with less than ****-days advance
notice).  LMI will be fully responsible and liable for the content and format of
all labeling and artwork provided by LMI and used in connection with the supply
of any Product hereunder.  CMO shall be solely responsible for ensuring that the
content and format of all labeling and artwork used in connection with the
supply of the Product(s), as provided by LMI, are accurately and consistently
produced in accordance with the Specifications.  The Parties shall cooperate to
ensure that all packaging and labeling information and materials are compatible
with CMO’s equipment and specifications.

 

2.7                               Changes in Manufacturing Processes.  Any
process changes requested by the CMO after establishment of commercial Product
supply under a Proposal shall be made by CMO at its cost, but in all instances
subject to LMI’s prior written approval and the other procedures and
requirements set forth in the Quality Agreement.  CMO agrees to notify LMI in
advance of any such change or improvement that it desires to implement pursuant
to the Quality Agremeent in order to assess the impact of such change.  Process
changes requested by LMI after establishment of commercial Product supply under
a Proposal shall be subject to CMO fees in accordance with ****.  The Parties
will in all events reasonably cooperate with the other Party in effecting any
process changes or improvements reasonably requested by such Party and, to the
extent such changes constitute Intellectual Property, the Parties shall
reasonably cooperate in connection with the preparation, filing and prosecution
of any patent applications/patents relating thereto, any such changes and any
such patents/applications to constitute Improvements to LMI’s Pre-Existing
Intellectual Property and Technology pursuant to Section 6.

 

2.8                               API and Other LMI Materials.

 

(a)                                 LMI will supply, at its expense, sufficient
quantities of the LMI Materials to CMO’s facility **** to enable CMO to meet its
obligations hereunder.  CMO will provide LMI with an inventory report for the
LMI Materials on a **** basis (or as otherwise agreed to by the Parties).  All
such LMI Materials shall conform to the specifications agreed to by CMO and LMI.

 

(b)                                 Title to the LMI Materials shall remain at
all times with LMI, and CMO shall and hereby does agree to enter into any form
of warehouseman or bailee agreement required by a then-current lender to LMI. 
If any of the LMI Materials are lost or damaged as a result of CMO’s acts or
omissions (including, but not limited to, in-process failures determined to be
the fault of the CMO), at LMI’s option, CMO shall (i) reimburse LMI for ****, or
(ii) allow LMI a purchase price credit equal to ****, which purchase price
credit shall be applied, at LMI’s direction, against future purchase orders of
any product manufactured by CMO for LMI.  Any credits hereunder not settled
within

 

8

--------------------------------------------------------------------------------

 

**** (****)**** of issuance, or within **** (****) days of the effective date of
any termination or expiration of this Agreement, will be refunded to LMI.

 

3.                                      TERM; TERMINATION

 

3.1                               Term; Renewal.  Unless terminated sooner in
accordance with the terms of this Agreement, this Agreement shall commence on
the Effective Date and shall have an initial term of five (5) years.  LMI shall
have the right to extend this Agreement for an additional five (5) year period
upon written notice to CMO; provided that each Party shall have the right to
terminate this Agreement for any or no reason at any time during such additional
five (5) year period by providing the other Party at least thirty (30) months
advance written notice of such termination.  The initial term and any additional
period shall be referred to collectively as the “Term”.

 

3.2                               Termination by Mutual Agreement.  This
Agreement may be terminated by mutual written agreement of CMO and LMI at any
time.

 

3.3                               Termination for Cause.  This Agreement may be
terminated by a Party as follows:

 

(a)                                 If a Party files a petition or similar
action for its protection or is the subject of an involuntary petition or
similar action not dismissed within ninety (90) days, under bankruptcy,
insolvency, reorganization or receivership law, or such Party is placed in
receivership or makes an assignment for benefit of creditors, the other Party
may elect to terminate this Agreement immediately by written notice to the first
Party without prejudice to any right or remedy the other Party may have under
the Agreement, including damages for breach, if any.

 

(b)                                 In the event that a Party materially
defaults under or materially breaches any of the provisions of this Agreement or
the Quality Agreements, the other Party shall have the right to terminate this
Agreement upon sixty (60) days’ prior written notice, unless such material
default or breach is cured during such sixty (60) day period (or in the event
any breach is incapable of being cured in such time period, the other Party
presents a plan to attempt cure of such breach and prevent similar breaches,
which plan is reasonably acceptable to the terminating Party), in which event
this Agreement shall continue in full force and effect.

 

(c)                                  If LMI is the Party with the right to
terminate this Agreement in accordance with Sections 3.3(b) due to the uncured
material breach of CMO, LMI shall have the option to delay the termination and
continue to have CMO supply LMI under this Agreement upon written notice to CMO
detailing the same, until such time as (i) the Technology transfer described in
Section 2.5 is complete and LMI has qualified and obtained regulatory approval
for itself, an Affiliate or a third party as manufacturer of Product(s) or
(ii) CMO delivers a terminal supply of Product(s) (at ****) under
Section 3.4(d) of this Agreement.  For purposes of this Agreement, “terminal
supply” means the amount of Product(s) reasonably requested by LMI so as to
avoid any disruption to LMI’s supply or sale of Product (s), including during
any commercially reasonable

 

9

--------------------------------------------------------------------------------

 

Technology transfer period described in Section 2.5.  CMO shall be responsible
for any costs or expenses reasonably incurred by LMI as a result of CMO’s
breach.

 

3.4                               Effect of Expiration or Termination; Accrued
Rights; Surviving Obligations.  Upon any expiration or termination of this
Agreement:

 

(a)                                 Product on Hand.  CMO shall notify LMI of
the amount and type of Product(s) it has on hand as of the effective date of any
termination or expiration as a result of purchase orders placed by LMI, and LMI
shall purchase such Product(s) at the applicable price as set forth in the
applicable Proposal, but LMI shall not be required to purchase any
Product(s) (i) that fail to meet Specifications, (ii) for which CMO is unable to
provide the certificates of analysis specified in Section 5.4 of this Agreement,
(iii) for which CMO is unable to provide the certificates of manufacturing
compliance specified in Section 5.5, or (iv) that are appropriately rejected by
LMI pursuant to Section 5.6.  In addition LMI shall purchase from CMO, within
**** (****) days of CMO’s request, at ****, unused raw materials or components
(such as vials, stoppers, sealers) purchased by CMO pursuant to the inventory
requirements described in Section 2.6 to the extent such materials or components
are in good, saleable condition and cannot be returned to the original supplier
by CMO (if such return is requested by LMI).

 

(b)                                 Regulatory Information.  On and as of the
effective date of any termination or expiration, or such earlier date as LMI may
reasonably request prior to an upcoming termination or expiration, CMO shall
promptly transfer to LMI or its nominee all information and Technology in CMO’s
possession and used in connection with the manufacture of the Product(s), all
information and Technology relevant to specific methods of applicable Product
manufacture or applicable Product characterization or testing, all information
relevant to obtaining an FDA regulatory approval and any other applicable
regulatory approval of the Product(s), all information contained in CMO’s
regulatory submissions in connection with the development and approval of the
Product (s), and all other information relating to the manufacture of the
Product(s), which is useful to enable LMI or a third party to manufacture and
obtain regulatory approval for the Product(s).  LMI has the right to use such
information in regulatory submissions in order to gain or maintain approval to
sell products containing the Product(s) or to aid in investigations.  CMO will
cooperate with LMI in providing reasonably necessary assistance to LMI in
support of LMI’s efforts to obtain or maintain approval to sell products
containing the Product(s) and to aid in investigations.  LMI and its nominees
may only use any Information of CMO received pursuant to this Section 3.4(b) in
connection with the Product(s).  Upon request by LMI, CMO will prepare and file
a Drug Master File (“DMF”) in CMO’s name for the manufacture of the Product(s). 
In the event that CMO is unable for any reason to supply LMI’s requirements of
Product(s), then LMI may use CMO’s batch records and DMF solely for the purpose
of making or having made Product(s).  In such event, such batch records and DMF
may be disclosed to third parties by LMI, but only subject to written agreements
obligating such third parties to keep such batch records and DMF in confidence
in accordance with the terms of this Agreement.  In such event, CMO will
cooperate with LMI and any such third party to optimize the ability and speed of
LMI and any such third party to successfully manufacture Product(s).

 

10

--------------------------------------------------------------------------------

 

(c)                                  Orders in Progress.  In the event of any
termination or expiration of this Agreement, CMO shall, unless such termination
has occurred because of a material uncured breach or default by LMI under this
Agreement, notwithstanding the effective date of any termination or expiration,
upon written request of LMI, complete any purchase orders for Product(s) that
were placed by LMI and accepted by CMO prior to such date and LMI shall pay CMO
for any Product(s) produced in accordance with such purchase orders at the
applicable price and on the terms set forth in this Agreement.

 

(d)                                 Terminal Supply; Post-Termination or
Expiration Acceptance of Orders.  Unless CMO terminates this Agreement pursuant
to Sections 3.3(b), upon LMI’s request, CMO shall use commercially reasonable
efforts to provide LMI with a terminal supply of Product(s) (at ****) so as to
minimize disruption of LMI’s supply or sale of Product(s).  Any acceptance by
CMO of any purchase order from LMI or the sale of any Product(s) by CMO to LMI
after the delivery of notice of termination or after the expiration or
termination of the Term shall not be construed as a renewal or extension of this
Agreement or as a waiver of termination thereof.

 

(e)                                  Prior Obligations.  Termination or
expiration of this Agreement, in whole or in part, for any reason shall be
without prejudice to any rights which shall have accrued to the benefit of
either Party prior to such termination or expiration, and such termination or
expiration shall not relieve either Party from obligations which are expressly
indicated to survive termination or expiration of the Term.

 

4.                                      REGULATORY ISSUES.

 

4.1                               Regulatory Obligations.  Unless otherwise
noted in the Quality Agreement, all obligations relating to the NDA shall, at
all times during the Term, remain with LMI, including without limitation (a) the
obligation to prepare and make any updates or amendments to the NDA or CMC,
(b) to pay any fees or other costs associated with such filings, or (c) to
collect, investigate and report to the FDA and other appropriate regulatory
authorities any NDA-related adverse experience reports, quality reports, and
complaint reports.  CMO shall provide LMI with access to any such information
reasonably required to enable LMI to comply with its obligations under this
Section 4.1.  CMO shall remain solely responsible, at CMO’s expense (except as
provided in the following sentence), for compliance with (i) cGMPs (including
any comparable requirements imposed by foreign authorities, but limited to those
jurisdictions that are within the Territory as set forth in any amendment to
this Agreement); (ii) obtaining or maintaining establishment registrations and
all other required permits and licenses for all relevant facilities; and
(iii) the preparation and submission of all records and reports required by FDA
and other appropriate regulatory authorities in connection with the manufacture
and sale to LMI of the Product, including, without limitation, updating the DMF
in countries or regions within the Territory and providing LMI with the
necessary DMF Authorization Letters, if applicable.  The allocation of ****
shall be mutually determined by the Parties reasonably and in good faith, taking
into consideration ****.  All information, documents and updates with regard to,
relating to, or otherwise affecting, the Product or the manufacture, testing or
shipping of Product which are required or requested by any governmental agency
shall be provided by CMO to such agency in a timely manner (in each case, after
providing LMI with (x) such information, documents and updates, (y) a reasonable
opportunity to confer and comment on such information, documents

 

11

--------------------------------------------------------------------------------

 

and updates and (z) good faith consideration of any such conference and
comments, in each case, reasonably in advance of submitting such information,
documents and updates to such agency), and CMO shall submit to all inquiries and
inspections by any such agencies (and notify, confer with, and in good fath
consider the comments of, LMI reasonably in advance of (or, if not possible,
immediately following) any such inquiries and inspections).  CMO agrees to
notify LMI of (and provide LMI with copies of any documentation relating to, and
summaries of any unwritten communications relating to) any regulatory, civil or
criminal proceedings, investigations, warnings or other adverse actions relating
to any actual or alleged violations of applicable laws or regulations relating
to, arising out of or, or otherwise in connection with, its manufacture of the
Product.  CMO shall keep records of the manufacture, testing and shipping of the
Product(s), and retain samples of such Product(s) that are necessary to comply
with manufacturing regulatory requirements as well as to assist with resolving
product complaints and other similar investigations.  Copies of such records and
samples shall be made available to LMI upon its request and shall be retained by
CMO and be available to LMI for a period of **** (****) years following the date
of manufacture, or longer if required by law.

 

4.2                               Product Recalls.

 

(a)                                 If either Party reasonably decides such
Party is required to initiate a Product recall, withdrawal or field correction
with respect to, or if there is any governmental seizure of, the Product(s),
then the Parties will initiate and conduct any such recall pursuant to the terms
set forth in the Quality Agreement.

 

(b)                                 To the extent that any such recall,
withdrawal, field correction or seizure occurs due to (i) failure of any
Product(s) produced by CMO hereunder to conform to Specifications (including
being adulterated or misbranded, but excluding the failure of any LMI Materials
to conform to their respective specifications other than due to CMO’s fault) or
any warranty or other requirement set forth in this Agreement (it being
acknowledged and agreed by the Parties that compliance with release
Specifications followed by a legitimate field complaint shall not be deemed to
be a failure to conform to Specifications), (ii) the failure of CMO to comply in
all material respects with any applicable law, rule, regulation, guideline,
standard, court order or decree or (iii) the negligent or intentional wrongful
act or omission of CMO in connection with the production of
Product(s) hereunder, then CMO shall bear the cost and expense of any such
seizure, recall, withdrawal or field correction (including reimbursement for any
purchase price payments made to CMO and related taxes or credits to the extent
related to such recalled Product(s)).  To the extent that any such recall,
withdrawal, field correction or seizure occurs due to any reason other than that
set forth in the immediately preceding sentence, then LMI shall bear the cost
and expense of any such seizure, recall, withdrawal or field correction with
respect to the Product(s) recalled by LMI.  If both CMO and other factors
contribute to the cause of a seizure, recall, withdrawal or field correction,
then the cost and expense thereof will be shared in proportion to CMO’s and such
other factors’ respective contributions to the problem with respect to the
Product(s) recalled by LMI.  For the purposes of this Agreement, the expenses of
any recall, withdrawal, field correction or seizure shall include, without
limitation, the out-of-pocket expenses of notification and destruction or return
of the recalled Product(s) and all other out-of-pocket costs or credits incurred
in connection with such recall.

 

12

--------------------------------------------------------------------------------

 

4.3                               Sharing of Information.  CMO shall promptly
advise LMI of any information of which it obtains knowledge that may affect the
safety, efficacy or labelling of the Product(s) and any actions in response to
such information.

 

4.4.                            Adverse Events and Product Quality Complaints. 
The Parties agree to the following provisions regarding adverse events and
complaints:

 

(a)                                 LMI shall be responsible to report adverse
events involving the products sold by LMI to the FDA and other regulatory
authorities, and (b) respond to quality complaints and medical and technical
inquiries, respecting such LMI products.

 

(b)                                 In the event CMO (i) receives information
regarding any adverse event relating to the products sold by LMI, (ii) receives
any complaints relating to the Products sold by LMI, (iii) receives any medical
or technical inquiry relating to the Products sold by LMI, (iv) discovers or is
notified of any material defect in the Products sold by LMI, it shall
immediately notify LMI, through its agent for global pharmacovigilance, or
(iv) discovers or is notified of any facts, circumstances or occurrences that do
or could adversely affect the Product manufactured on LMI’s behalf, as follows
(or to such other address, contact person, telephone number, facsimile number or
e mail address as may be specified by LMI):

 

Prior to January 1, 2014:

 

Phone

 

Fax

 

Email

 

 

 

 

 

 

 

#-###-###-#### or ###-###-####

 

#-###-###-#### or ###-###-####

 

****

 

 

On and following January 1, 2014:

 

To the address, contact person, telephone number, facsimile number or email
address that LMI will specify pursuant to a separate written notice after the
date of this Agreement.

 

CMO shall also conduct an investigation of such event pursuant to the
requirements set forth in the Quality Agreement.  The Parties shall reasonably
cooperate with and assist each other in connection with any such matter.  In
addition, CMO will ensure that all relevant personnel are sufficiently informed
and trained on the terms and procedures outlined in this Agreement, including
without limitation, the process for the receipt, recordation, exchange,
communication and submission of safety data for the Product(s) and all relevant
regulations and laws thereto.  CMO agrees to document the training activities,
including the training material(s) used, and make these documents reasonably
accessible to LMI upon request.

 

5.                                      WARRANTIES AND QUALITY ASSURANCE

 

5.1                               CMO Warranties.  CMO represents and warrants
that it has the full right and authority to enter into this Agreement, and that
it is not aware of any impediment that would inhibit its ability to perform its
obligations hereunder.  CMO further represents and warrants that

 

13

--------------------------------------------------------------------------------

 

all Product delivered to LMI: (a) will have been manufactured, packaged,
labeled, tested and/or re-tested in compliance with applicable provisions of the
Federal Food, Drug and Cosmetic Act (the “Act”), regulations thereunder, and any
other comparable laws and regulations applicable in the Territory where the
Product(s) are being distributed, relating to development, manufacture and
supply under this Agreement, and in compliance with the specific U.S. or other
applicable regulatory approvals regarding the Product(s); (b) shall conform to
the Specifications; (c) shall comply with the Quality Agreement, the Master
Batch Record and the cGMPs where the Product(s) are being distributed; and
(d) will, at the time of such delivery, not be adulterated within the meaning of
the Act or other applicable law where the Product(s) are being distributed, as
such Act or law is constituted and effective at the time of delivery, and will
not be an article which may not, under the provisions of such Act, be introduced
into interstate commerce.  CMO further represents and warrants that there are no
outstanding regulatory, civil or criminal proceedings, investigations, warnings
or other adverse actions relating to any actual or alleged violations of
applicable laws or regulations relating to, arising out of or, or otherwise in
connection with, its manufacture of the Product.  CMO further represents and
warrants that its facility shall conform to cGMP and other applicable laws of
such jurisdictions in the Territory where Product(s) are being distributed and
regulations and that the services provided by CMO and the use, practice or
exploitation of the Technology or Intellectual Property provided by CMO shall
not infringe, violate or misappropriate the intellectual property rights of any
third party and that CMO holds all patents, trademarks and licenses necessary to
manufacture and supply the Product(s) and that CMO’s performance under this
Agreement will not infringe upon the patent, trademark, licensing or other
rights of anyone.  At the time of delivery, the Product(s) shall have a minimum
shelf life of not less than **** (****) **** less than the maximum shelf life
set forth in the Specifications.

 

5.2                               LMI Warranties.  LMI represents, warrants and
covenants that:

 

(a)  it has the full right and authority to enter into this Agreement, and that
it is not aware of any impediment that would inhibit its ability to perform its
obligations hereunder;

 

(b)  the marketing, distribution and sale of Product(s) shall comply with the
Act and all other applicable laws, rules and regulations; and

 

(c)  all laboratory, scientific, technical and/or other data submitted by LMI to
CMO relating to the Product(s) shall be complete and correct and shall not
contain any material misrepresentation or omission.

 

5.3                               DISCLAIMER OF ALL OTHER WARRANTIES.  THE
WARRANTIES SET FORTH IN THIS AGREEMENT ARE THE PARTIES’ ONLY WARRANTIES WITH
RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT AND ARE MADE EXPRESSLY IN LIEU
OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WHICH ARE HEREBY
DISCLAIMED, INCLUDING ANY IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR
PURPOSE, MERCHANTABILITY, OR ARISING FROM THE COURSE OF PERFORMANCE, COURSE OF
DEALING OR USAGE OF TRADE OR OTHERWISE.

 

14

--------------------------------------------------------------------------------

 

5.4                               Certificates of Analysis.  CMO shall perform,
or cause to be performed, sample tests on each Lot or Batch of
Product(s) supplied pursuant to this Agreement and Quality Agreement before
delivery to LMI (or its designee), and shall produce a test report setting forth
the results of such testing.  Each test report shall set forth, for each Lot or
Batch of Product(s) delivered hereunder, the items tested, specifications and
test results in a certificate of analysis, containing the types of information
reasonably agreed upon by CMO and LMI.  CMO shall send such certificates to LMI
(and its designee, as applicable) concurrent with delivery of each Lot or Batch
of Product.

 

5.5                               Certificates of Manufacturing Compliance.  CMO
shall perform such quality control and quality assurance testing and review as
is specified in the applicable Proposal(s) or otherwise agreed to by the Parties
in writing to ensure that the Product(s) comply with all manufacturing
requirements and specifications.  CMO shall provide or cause to be provided for
each Lot or Batch of Product(s) purchased under this Agreement a certificate of
manufacturing compliance, containing the type of information reasonably agreed
upon by CMO and LMI, per the Quality Agreement which will certify that each Lot
or Batch of Product(s) was manufactured in accordance with the Specifications
and cGMP, including without limitation 21 CFR 210 and 211 and ICH Q7, as the
same may be amended from time to time.  CMO shall send such certificates to LMI
(and its designee, as applicable) concurrent with delivery of each Lot or Batch
of Product(s).  CMO agrees that it shall maintain all of the facilities used for
the manufacture of the Product(s) in material compliance with all applicable
state, local, federal or international laws and regulations and shall permit the
relevant governmental agencies to inspect the manufacturing facilities used for
the manufacture of the Product(s) whenever deemed necessary by such agencies. 
CMO shall advise LMI **** if an authorized agent of the FDA or other
governmental agency visits any of CMO’s facilities where any Product is being
manufactured, or where any component of any Product is manufactured, processed
or controlled, or of any official contact concerning any Product; provided,
however, that LMI shall have the right to be present for all scheduled
inspections relating to the manufacture of any Product.  CMO shall furnish to
LMI the portion of the report by such agency that relates to such visit to the
extent that such report relates to any Product, within (i) **** of CMO’s receipt
of such report if such report relates to urgent matters such as a recall of any
Product, facility shutdown or similar events and (ii) **** after CMO’s receipt
of such report for other matters.  In addition to the observation rights set
forth herein and in the applicable Proposal(s), upon reasonable advance notice
to CMO, CMO shall allow LMI and its consultants (subject to entering into
suitable confidentially agreements reasonably acceptable to CMO) reasonable
access during normal business hours throughout the Term to any of CMO’s
facilities where any Product is being manufactured, or where any component of
any Product is manufactured, processed or controlled to verify compliance with
CMO’s obligations under this Agreement or the Quality Agreement. 
Notwithstanding anything to the contrary hereunder, LMI shall have the right to
postpone all pending and future purchase orders hereunder (and adjust all
Forecasts accordingly), without penalty, in the event of (i) any such notices,
observations or communications; (ii) any regulatory or other concerns under the
applicable laws or regulations; (iii) any material issues with the supply of
Product(s) hereunder (including, but not limited to, atypical manufacturing
deviations of the sort requiring investigation); (iv) any consent decree; or
(v) violations of any of any Product quality provisions of this Agreement or the
Quality Agreement.

 

15

--------------------------------------------------------------------------------

 

5.6                               Acceptance.

 

(a)                                 LMI shall have **** (****) days from the
date of receipt of the shipment of any Product, the corresponding certificate of
analysis and the corresponding certificate of manufacturing compliance to
confirm conformance with the applicable Specifications and to claim any shortage
in quantity of any shipment of any Product.  Any notice of rejection or shortage
of any shipment of any Product must be given in writing (“Rejection Notice”),
must contain a report of the reason for such rejection or shortage and be
received by CMO within said **** (****) day period or such shipment will be
deemed to have been accepted; provided, however that this limitation shall not
apply to hidden or latent defects, it being understood that in that case, LMI
shall have **** (****) days from the date it becomes aware of any hidden or
latent defect to reject any Product in accordance with applicable terms and
conditions hereof.  CMO shall assist in necessary analytical Technology
transfers to accomplish such testing by LMI.

 

(b)                                 Upon receipt of a Rejection Notice, CMO
shall have **** (****) days to notify LMI as to whether it agrees that the
subject Product deviates from the Specifications.  If CMO disagrees with the
contents of such Rejection Notice, it shall so advise LMI by notice in writing
within **** (****) days after receipt of such Rejection Notice.  If LMI and CMO
fail to agree within **** (****) days after CMO’s notice to LMI as to whether
any Product identified in the Rejection Notice deviates from the applicable
Specifications, the parties shall mutually determine an independent laboratory
to evaluate whether such Product deviates from the Specifications. All retesting
shall be performed in accordance with LMI retesting procedures and cGMP.  The
evaluation shall be binding on the parties, and if such evaluation certifies
that any Product deviates from the applicable Specifications, LMI may reject
that Product.  Notwithstanding anything to the contrary, in the event LMI
rejects any Product as provided hereunder, CMO shall ****, if LMI so requests.

 

(c)                                  Subject to the provisions of
Section 5.6(a), LMI has the right to reject and return, at the expense of CMO
and for ****, any portion of any shipment which deviates from the applicable
Specifications, without invalidating the remainder of the purchase order, to the
extent that such deviation arises from CMO’s failure to manufacture the
applicable Product in accordance with the applicable Specifications.  All
reasonable expenses incurred pursuant to this Section 5.6, including those of an
independent laboratory, shall be paid by the Party against whom the dispute is
decided.

 

5.7                               Quality Agreements.  The Parties agree that,
within **** (****) days of the date hereof,they will enter into one or more
separate quality agreements that will cover arrangements for quality control,
testing documentation, quality assurance and other related matters (the “Quality
Agreements”).  The Parties acknowledge that stability testing for any Product
manufactured during the Term will continue after termination or expiration of
the Agreement for the Product(s)’ remaining shelf life, unless LMI decides in
its sole discretion to undertake such stability testing or to assign such
responsibilities to a third party.

 

16

--------------------------------------------------------------------------------

 

5.8                               Health, Safety and Environmental Compliance.

 

(a)                                 Manufacturing operations are to be performed
by CMO using appropriate safety measures and containment techniques as dictated
by applicable law, regulations and industry standards.  CMO shall be solely
responsible for implementing and maintaining health and safety procedures for
the manufacture of Product and performance of services under this agreement and
for the handling of any materials or hazardous waste used in or generated by
such activities.  CMO, in consultation with LMI, shall develop safety and
handling procedures for Product; provided, however, that LMI shall have no
responsibility for CMO’s health and safety program.  The generation, collection,
storage, handling, transportation, movement and release of hazardous materials
and waste generated in connection with the manufacture of any Product and other
services under this Agreement shall be the responsibility of CMO, at CMO’s cost
and expense, unless otherwise agreed to in writing by the Parties for special
situations and conditions.  Without limiting other legally applicable
requirements, CMO shall prepare, execute and maintain, as the generator of
waste, all licenses, registrations, approvals and authorizations, notices,
shipping documents and waste manifests required under applicable law and
regulations.

 

(b)                                 LMI has established a program for systematic
assessment of its supplier’s EHS programs (“TPM EHS Assessment Program”) and CMO
agrees to participate and reasonably cooperate with LMI in effectively
implementing this TPM EHS Assessment Program.

 

(c)                                  CMO will review LMI’s TPM EHS Assessment
Program and cooperate with LMI in developing a reasonable plan for CMO’s
compliance with respect to the Product(s).  Specifically and subject to the
foregoing, CMO agrees to:

 

(i)                                     promptly respond to reasonable requests
from LMI for non-confidential information made as part of LMI’s TPM EHS
Assessment Program; LMI will provide a questionnaire to CMO and CMO is expected
to provide the complete response within **** (****) days;

 

(ii)                                  reasonably cooperate with LMI to clarify
and supplement any information related to its facilities and operations; and

 

(iii)                               provide to LMI, upon request, copies of
CMO’s environmental, health and safety permits required by any governmental
authority which are associated with the Product(s) and all facility operation
related thereto.

 

(d)                                 CMO agrees that LMI or its appointed
agent(s) (subject to entering into suitable confidentiality agreements
reasonably acceptable to CMO, provided such agents(s) are reasonably acceptable
to CMO) shall be entitled to conduct inspections and audits no more than once
per year upon **** notice and mutually convenient times of any areas or
facilities used to produce the Product(s) or required for production of the
Product(s) in order (i) to assist in completion of LMI’s TPM EHS Assessment
Program and (ii) to allow for a loss prevention inspection of the facility by
LMI’s insurance

 

17

--------------------------------------------------------------------------------

 

underwriting company as necessary for LMI to obtain contingent business
interruption insurance; provided that, if LMI discovers any issues during such
audit or inspection requiring remediation, then LMI shall be entitled to reaudit
or reinspect such areas or facilities under this Section 5.9(d) within the later
of **** (****) days or CMO’s written notice to LMI that such remediation has
been completed.

 

(e)                                  CMO shall take reasonable and appropriate
precautions to ensure that its personnel (including its employees, contractors
and agents) are protected from the Product and/or the Product’s manufacturing
process exposures through either engineering infrastructure, personnel
protective equipment or a combination of both.  Upon request, within **** (****)
days, CMO shall provide workplace monitoring data which demonstrates the
effectiveness of controls.

 

5.9                               Facility.  CMO shall perform all services
under this Agreement at the agreed upon facility located at ****.  CMO shall not
change the location of such facility or use any additional facility for the
performance of services under this Agreement without the prior written consent
of LMI, such consent not to be unreasonably withheld, delayed or conditioned. 
CMO will be responsible for all applicable costs and expenses in connection with
any such change of location of the facility or use of any additional facility
for the performance of services under this Agreement (including, but not limited
to, costs for qualification and validation batches).

 

6.                                      INTELLECTUAL PROPERTY; NONDISCLOSURE;
CONFIDENTIALITY

 

6.1                               Intellectual Property.

 

(a)                                 As between the Parties, subject to the
licenses granted under Section 6.1(b) and (c) below, each Party retains all
right, title and interest in and to the Intellectual Property and Technology
that each Party currently owns, licenses and/or uses to the extent related to
the purposes of this Agreement (“Pre-Existing Intellectual Property and
Technology”).  Under no circumstances will the licenses granted in
Section 6.1(b) or (c) below be construed as a sale of any of the Pre-Existing
Intellectual Property and Technology by either Party.  As between the Parties,
each Party shall, subject to the licenses granted in Section 6.1(b) and
(c) below, own all right, title and interest in and to any modifications,
derivative works, enhancements or improvements of or to any of the Pre-Existing
Intellectual Property and Technology related to this Agreement that such Party
creates, develops, discovers, conceives and/or reduces to practice in the course
of performing under this Agreement (“Improvements”); provided, however, CMO
agrees that LMI shall own, and shall and hereby does assign to LMI, all right,
title and interest in and to all **** to the extent ****.  Subject to the
foregoing, the Parties shall jointly own and have the right to use and license
(without accounting to the other) all inventions and developments, whether
modifications, derivative works, enhancements or improvements to any
Intellectual Property and/or Technology related to this Agreement, which are
jointly created or developed during the Term.

 

(b)                                 CMO hereby grants to LMI a **** license,
with right to sublicense, in and to all CMO-owned Pre-Existing Intellectual
Property and Technology and Improvements relating to such Pre-Existing
Intellectual Property and Technology for use in connection

 

18

--------------------------------------------------------------------------------

 

with the Product(s).  This license shall **** of the Agreement and shall be
included within **** in Sections 2.5 and 3.3.

 

(c)                                  LMI hereby grants to CMO a **** license,
with right to sublicense to LMI-approved subcontractors, in and to all LMI-owned
Pre-Existing Intellectual Property and Technology and Improvements relating to
such Pre-Existing Intellectual Property and Technology solely for use in
connection with development and manufacturing of the Product(s) hereunder for
LMI.  This license shall **** of the Agreement.

 

6.2                               Nondisclosure and **** Obligations.

 

(a)                                 Except as otherwise specifically
contemplated by Section 2.5 or as provided in this Section 6, during the Term of
this Agreement and for a period of **** thereafter, both Parties shall maintain
in confidence (i.e., not disclose to any third party) and use only for purposes
specifically authorized under this Agreement Information received from or on
behalf of the other Party, whether such Information is contained in a written or
electronic document, whether it is oral or whether it is disclosed by means of
inspection.  “Information” shall mean any and all non-public, confidential,
trade secret, proprietary information or data, in any form, whether oral,
written, electronic, graphic or tangible, and all copies thereof, relating to
the Product(s) or either Party’s business, including, but not restricted to,
marketing plans and strategies, software codes, software, products, materials,
sales figures, methods, know-how, manufacturing, packaging, distribution,
inventions, research or development plans and the like that will be disclosed by
or on behalf of one Party to the other.

 

(b)                                 For purposes of clarity, CMO acknowledges
and agrees that LMI’s “Information” includes, without limitation, **** developed
by CMO for LMI in connection with the services described herein, and any ****. 
To the extent it is reasonably necessary or appropriate to fulfill its
obligations or exercise its rights under this Agreement, a Party may disclose
Information it is otherwise obligated under this Section not to disclose, to its
Affiliates, employees, officers, directors, lenders, sublicensees, consultants,
outside contractors and clinical investigators (collectively, “Representatives”)
on a need-to-know basis and on condition that such entities or persons are
directed to only use such Information for purposes specifically authorized under
this Agreement and to keep the Information confidential for the same time
periods and to the same extent as such Party is required to keep the Information
confidential; notwithstanding the foregoing the Party so disclosing Information
will be liable to the other Party hereunder for any misuse or improper
disclosure of any such Information by any such firms or individuals.  A Party or
its Representatives may disclose such Information to government or other
regulatory authorities to the extent that such disclosure is reasonably
necessary to obtain patents or authorizations to conduct clinical trials of, and
to commercially market, the Product(s).  The obligation not to disclose
Information shall not apply to any part of such Information that (i) is or
becomes part of the public domain other than by disclosure by the receiving
Party or its Representatives in breach of this Agreement, (ii) can be shown by
written documents to have been disclosed to the receiving Party or its
Representatives by a third party, provided such Information

 

19

--------------------------------------------------------------------------------

 

was not obtained by such third party directly or indirectly from the other Party
or its Representatives subject to confidentiality obligations or duties,
(iii) prior to disclosure under this Agreement can be shown by written documents
to have been already in the possession of the receiving Party or its
Representatives, provided such Information was not obtained directly or
indirectly from the other Party under this Agreement pursuant to a
confidentiality agreement, or (iv) can be shown by written documents to have
been independently developed outside of this Agreement by the receiving Party or
its Affiliates without reference to the Information or breach of any of the
provisions of this Agreement.  The Party asserting the applicability of one of
the exclusions set forth in the immediately preceding sentence shall have the
burden of proving the applicability of any such exclusion in any particular
circumstance.  If a receiving Party is required to disclose Information of the
other Party pursuant to interrogatories, requests for information or documents,
subpoena, civil investigative demand of a court or governmental agency, it shall
use commercially reasonable efforts to do so on a confidential basis (and
provided that the disclosing Party furnishes only that portion of the
Information which is legally required), and, in any event, it shall provide (if
legally permissible) the other Party prompt notice after receipt of any such
official requests to enable the other Party to seek a protective order or
similar relief.

 

(c)                                  CMO understands and acknowledges that
Information, Intellectual Property, and Technology relating to LMI’s products
has been developed or obtained by the investment of significant time, effort and
expense by LMI, and that such Information, Intellectual Property, and Technology
is a valuable, special and unique asset of LMI which provides LMI with a
significant commercial advantage, and needs to be protected from improper use
and disclosure (including, but not limited to, any improper use by CMO and its
Representatives).  CMO further recognizes that **** and, as a result, CMO agrees
not to undertake, in any manner, directly or indirectly for itself, its
Affiliates, or any third party, **** **** during ****.  For purposes of this
Agreement, “****” includes ****.  CMO agrees that there may be no adequate
remedy at law for any such breach and, upon any such breach or any threat
thereof, LMI shall be entitled to appropriate equitable relief, including
injunctive relief, in addition to whatever other remedies it might be entitled. 
Such additional remedies will include, without limitation, LMI’s reasonable
attorney’s fees, court costs and related expenses in connection with the
investigation of such activities and the enforcement of this provision.  In
addition, in order to protect against the disclosure of LMI’s Information, upon
termination or expiration of this Agreement, or as otherwise requested by LMI,
CMO will promptly deliver to LMI or, at the request of LMI, destroy all copies
of the Information in its possession; provided, in each case, that CMO may
retain, in a secure location, a copy of such documents and records for purposes
of defending any legal proceedings or as is required to be maintained in order
to satisfy any law, rule, or regulation to which CMO is subject.

 

6.3                               Terms of this Agreement.

 

(a)                                 LMI and CMO each agree not to disclose,
whether by press release or in any other manner, the existence of this Agreement
or any terms or conditions of this Agreement, to any third party without the
prior written consent of the other Party (which

 

20

--------------------------------------------------------------------------------

 

shall not be unreasonably withheld), except as required by applicable law; it
being understood that LMI will be able to file this Agreement with the U.S.
Securities and Exchange Commission and other government agencies to the extent
it reasonably determines such filing is required under applicable rules and
regulations, provided that LMI shall be required to use reasonable efforts to
seek confidential treatment of pricing and other commercially sensitive
information.  In addition, each Party may disclose the terms and conditions of
this Agreement to a lender or third party to which it is considering
transferring all or substantially all of its interests in the assets to which
this Agreement relates; provided, however, that such third party executes a
confidentiality agreement by which such third party is bound to hold the
disclosed information in confidence.

 

(b)                                 The Parties shall agree in good faith upon
the substance of Information that can be used as a routine reference in the
usual course of business to describe the terms of this transaction and each of
them may disclose such Information, as modified by mutual agreement from time to
time, without the other Party’s consent.

 

6.4                       Injunctive Relief. The Parties hereto understand and
agree that remedies at law may be inadequate to protect against any breach of
any of the provisions of this Section 6 by a Party or its employees, agents,
officers or directors or any other person acting in concert with it or on its
behalf.  Accordingly, each Party shall be entitled to seek injunctive relief or
any other equitable relief appropriate under the circumstances by a court of
competent jurisdiction against or with respect to any action that constitutes
any such breach of this Section 6.

 

7.                                      INDEMNIFICATION; INSURANCE.

 

7.1                       By CMO.  Except to the comparative extent LMI is
responsible to indemnify CMO and/or others under Section 7.2, CMO will indemnify
and hold LMI, its Affiliates, and its and their directors, officers, agents and
employees harmless against any and all liability, damages, losses, costs or
expenses, including without limitation, reasonable fees and disbursement of
attorneys (collectively, “Liability”) resulting from any third party claims made
or suits brought against them to the extent such Liability arises from (i) CMO’s
services in developing the Product(s), (ii) CMO’s manufacturing, supplying,
processing or otherwise manufacturing the Product(s), (iii) CMO’s negligent acts
or omissions or willful misconduct in the manufacture, storage, packaging,
labeling, handling or shipping of the Product(s); (iv) CMO’s breach of any
representation, warranty or covenant, or failure to perform any of its
obligations, hereunder; or (v) personal injuries and/or deaths that are
proximately caused (as defined under Massachusetts law) by a Manufacturing
Defect.  For purposes of this Section 7.1, “Manufacturing Defect” means the
negligence, recklessness (having a baseline not less than negligence), wrongful
intentional acts or negligent omissions, willful misconduct, or strict
liability, of or by CMO, its Affiliates, and its and their directors, officers,
agents and employees resulting from, or arising out of, or in connection with,
the development and manufacture of any Product by CMO or its permitted
subcontractors hereunder.

 

7.2                       By LMI.  Except to the comparative extent CMO is
responsible to indemnify LMI and/or others under Section 7.1, LMI will indemnify
and hold CMO and its directors, officers, agents and employees harmless against
any and all Liability resulting from any third party claims

 

21

--------------------------------------------------------------------------------

 

made or suits brought against them to the extent such Liability arises from
(i) any packaging or labeling of any Product(s) to the extent that such
packaging or labeling has been supplied by or at the direction of LMI and
applied in accordance with instructions from LMI, (ii) LMI’s negligence or
willful misconduct in the storage, handling, shipping, use, marketing,
distribution or sale of the Product(s), or any other product packaged or
included with the Product(s); (iii) a breach of a representation, warranty or
covenant made by LMI; or (iv) personal injuries and/or death resulting from,
arising out of, or in connection with, any distribution or sale of any Product
by LMI, its Affiliates or its distributors, including claims based on
negligence, warranty, strict liability or any other theory of liability or
violation of applicable law.

 

7.3                       Conditions of Indemnification.  A Party or any of its
Affiliates or their respective directors, officers, employees or agents (the
“Indemnitee”) that intends to claim indemnification under this Section 7 shall
promptly notify the other Party (the “Indemnitor”) of any Liability in respect
of which the Indemnitee intends to claim such indemnification reasonably
promptly after the Indemnitee is aware thereof, and the Indemnitor shall have
the right to assume the defense of any related third party action, suit or
proceeding with counsel mutually satisfactory to the Parties; provided, however,
that an Indemnitee shall have the right to retain its own counsel and
participate in the defense thereof at its own cost and expense.  The indemnity
agreement in this Section 7 shall not apply to amounts paid in settlement of any
claim, loss, damage or expense if such settlement is effected without the
consent of the Indemnitor, which consent shall not be withheld or delayed
unreasonably.  The failure of an Indemnitee to deliver notice to the Indemnitor
within a reasonable time after becoming aware of any such matter, if prejudicial
to the Indemnitor’s ability to defend such action, shall relieve the Indemnitor
of any liability to the Indemnitee under this Section 7 to the extent of such
prejudice.  The Indemnitee under this Section 7 and its directors, officers,
employees and agents shall cooperate fully with the Indemnitor and its legal
representatives in the investigation and defense of any matter covered by this
indemnification.

 

7.4                       Insurance.  LMI and CMO will each, at its own cost and
expense, obtain and maintain in full force and effect, during the term of this
Agreement and for a period of one year following the expiration or other
termination of this Agreement, commercial general liability insurance with an
insurance carrier reasonably acceptable to the other Party, with limits of
liability, including excess coverage, of an amount at least equal to the greater
of (i) **** and (ii) **** (**** ) times the amounts paid to CMO hereunder for
the previous calendar year (up to **** in coverage), combined single limit
bodily injury and property damage covering its duties and obligations under the
Agreement.

 

8.                                      ALTERNATIVE DISPUTE RESOLUTION.

 

(a)                                 The Parties will attempt in good faith to
resolve any controversy, claim or dispute (“Dispute”) arising out of or relating
to this Agreement promptly by negotiations.  Any such Dispute which is not
settled by the Parties within thirty (30) days after notice of such Dispute is
given by one Party to the other in writing shall be referred to a senior
executive of LMI and a senior executive of CMO who are authorized to settle such
Disputes on behalf of their respective companies (“Senior Executives”).  If the
Dispute has not been resolved within thirty (30) days after the end of the
thirty (30) day negotiation period referred to above (which period may be
extended by mutual

 

22

--------------------------------------------------------------------------------

 

agreement), subject to any rights to injunctive relief and unless otherwise
specifically provided for herein, any Dispute shall be settled by binding
arbitration as described in subsection (b) below, if the Parties so choose.

 

(b)                                 Any Dispute which is not resolved by the
Parties within the time period described in subsection (a) shall be settled by
final and binding arbitration to be conducted by a single arbitrator in Boston,
Massachusetts, pursuant to the then-existing Commercial Rules of the American
Arbitration Association.  The decision or award of the arbitrator shall be
final, and judgment upon such decision or award may be entered in any competent
court or application may be made to any competent court for judicial acceptance
of such decision or award and an order of enforcement.  The arbitrator shall
allocate the costs of the arbitration to one or both of the Parties as it sees
fit.

 

(c)                                  Nothing contained in this Section or any
other provision of this Agreement shall be construed to limit or preclude a
Party from bringing an action in any court of competent jurisdiction for
injunctive or other provisional relief to compel the other Party to comply with
its obligations hereunder before or during the pendency of mediation or
arbitration proceedings.

 

9.                                      MISCELLANEOUS.

 

9.1                               Relationship of the Parties.  In making and
performing this Agreement, the Parties are acting, and intend to be treated, as
independent entities and nothing contained in this Agreement shall be construed
or implied to create an agency, partnership, joint venture or employer and
employee relationship between LMI and CMO.  Each Party shall retain the
exclusive right of control with respect to its employees and agents, and shall
be responsible for all taxes, withholdings, and other statutory or contractual
obligations of any sort in respect of its employees and agents providing
Product(s) and services hereunder including, but not limited to, workers’
compensation insurance.  Except as otherwise provided herein, neither Party may
make any representation, warranty or commitment, whether express or implied, on
behalf of or incur any charges or expenses for or in the name of the other
Party.  No Party shall be liable for the act of any other Party unless such act
is expressly authorized in writing by both Parties hereto.

 

9.2                               Expenses.  Except as specifically provided
herein, each Party shall each pay its own expenses (including the fees and
expenses of their respective agents, representatives, counsel and accountants)
incidental to the preparation, negotiation and consummation of this Agreement
and the transactions contemplated hereby.

 

9.3                               Survival.  The following provisions shall
survive the termination or expiration of this Agreement (along with any payment
obligations accruing during the Term under any other provision) for any reason
in accordance with their respective terms:

 

Section 1 (Definitions)

Section 2.5 (Transfer Notice)

Section 3.3(c) (Terminal Supply)

Section 3.4 (Effect of Expiration or Termination; Accrued Rights; Surviving
Obligations)

 

23

--------------------------------------------------------------------------------

 

Section 4 (Regulatory Issues)

Section 5 (Warranties and Quality Assurance)

Section 6 (Intellectual Property; Nondisclosure; Confidentiality)

Section 7 (Indemnification)

Section 8 (Alternative Dispute Resolution)

Section 9 (Miscellaneous)

 

9.4                               Notices.  All notices, demands and other
communications to be given or delivered under or by reason of the provisions of
this Agreement shall be deemed to be given upon receipt (or refusal) and shall
be in writing and (a) personally delivered or sent by confirmed telecopy (with
hard copy to follow); (b) sent by reputable overnight express courier (charges
prepaid); or (c) mailed by certified or registered mail, postage prepaid and
return receipt requested.  Unless another address is specified in writing,
notices, demands and communications to LMI and CMO shall be sent to the
addresses indicated below:

 

Notices to LMI:

 

Lantheus Medical Imaging, Inc.
331 Treble Cove Road
North Billerica, Massachusetts 01862
Attn:  Vice President, Manufacturing and Operations

 

with a copy to:

 

Lantheus Medical Imaging, Inc.
331 Treble Cove Road
North Billerica, Massachusetts 01862
Attn:  General Counsel

 

Notices to CMO:

 

Pharmalucence, Inc.

29 Dunham Road

Billerica, MA 01821

Attention:  Chief Operating Officer

E-mail: ****

 

9.5                               Force Majeure.  If the performance of any
obligation under this Agreement by either Party is prevented, restricted,
interfered with or delayed by reason of natural disaster, casualty, acts of God,
riots, acts of terrorism or such other event of similar nature, all of which are
outside the reasonable control of the affected Party (“Force Majeure Event”),
the Party so affected shall, upon giving prompt written notice to the other
Party (including a full description of particulars), be excused from such
performance to the extent of such prevention, restriction, interference or
delay; provided that the affected Party shall use its reasonable commercial
efforts to avoid or remove such causes of non-performance and shall continue
performance whenever such causes are removed.

 

24

--------------------------------------------------------------------------------

 

9.6                               LIMITATIONS ON LIABILITY.  IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY FOR ANY
INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY, OR CONSEQUENTIAL DAMAGES
ARISING FROM THIS AGREEMENT, WHETHER THE BASIS OF THE LIABILITY IS BREACH OF
CONTRACT, TORT, STATUTES, OR ANY OTHER LEGAL THEORY, EXCEPT TO THE EXTENT
NECESSARY TO SATISFY A THIRD PARTY CLAIM UNDER SECTION 7 OF THIS AGREEMENT OR TO
THE EXTENT SUCH LIABILITY ARISES FROM CMO’S WILLFUL MISCONDUCT, FRAUD OR GROSSLY
NEGLIGENT ACTS OR OMISSIONS OR A PARTY’S BREACH OF THE CONFIDENTIALITY AND
NON-USE OBLIGATIONS SET FORTH HEREIN, AND WHETHER SUCH FIRST PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR NOT.

 

9.7                               Successors and Assigns; Assignment.  This
Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors and permitted assigns.  This Agreement or any part
thereof, may not be assigned, in whole or in part, without the prior written
consent of the other Party, which consent may be withheld in the sole discretion
of the other Party; provided, however, that either Party may assign this
Agreement without the consent of the other Party, in whole or in part, (i) to
any Affiliate of such Party, it being agreed that no such assignment to a
Party’s Affiliate shall release the assigning Party from its obligations
hereunder, or (ii) for the benefit of any lenders under any financing
arrangement, or (iii) in connection with the direct or indirect (x) transfer and
sale of all or substantially all of the assets or business of such Party or any
of its Affiliates or (y) the transfer and sale of all or substantially all of
the assets or business of the specific business line, division or unit of such
Party or any of its Affiliates to which this Agreement relates, in the case of
clause (iii), so long as the transferee or assignee agrees in writing to assume
the obligations of the transferor or assignor as if an original party hereto.

 

9.8                               Entire Agreement; Modification.  This
Agreement (together with all Proposals) supersedes all prior agreements and
understandings between the Parties or any of their respective Affiliates
(written or oral) relating to the subject matter hereof, including any term
sheets, and this Agreement (together with all Proposals) is the entire and
complete statement of the terms of the agreement between the Parties with
respect to the subject matter hereof.  This Agreement and any Proposal may be
amended, modified, or supplemented only in a writing signed by LMI and CMO.

 

9.9                               Waivers.  The failure of a Party at any time
or times to require performance of any provision hereof shall in no manner
affect its right at a later time to enforce the same.  No waiver by a Party of
any condition or of any breach of any term, covenant, representation or warranty
contained in this Agreement shall be effective unless in writing, and no waiver
in any one or more instances shall be deemed to be a further or continuing
waiver of any such condition or breach in other instances or a waiver of any
other condition or breach of any other term, covenant, representation or
warranty.

 

9.10                        Section and Other Headings.  The section and other
headings contained in this Agreement are for reference purposes only and shall
not in any way affect the meaning or interpretation of this Agreement.

 

25

--------------------------------------------------------------------------------

 

9.11                        Governing Law.  This Agreement (and all claims,
controversies and causes of actions relating hereto or otherwise arising
hereunder or in connection herewith) shall be exclusively interpreted in
accordance with and governed by the laws of the Commonwealth of Massachusetts,
without regard to the conflicts of law rules thereof.

 

9.12                        Severability.  To the extent that a court of
competent jurisdiction determines that any term or provision of this Agreement
is invalid or unenforceable, the Parties agree that (a) such term or provision
shall be reformed (whether by reducing its scope, duration or area or replacing
any such term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision), and this Agreement shall be enforceable as so
reformed, and (b) any such invalidity or unenforceability shall not invalidate
or render unenforceable any other term or provision of this Agreement.

 

9.13                        No Third Party Beneficiaries.  Neither this
Agreement nor any provision hereof is intended to confer upon any person (other
than the Parties hereto and, in the case of Section 7, the Indemnittees, which
shall be third party beneficiaries thereunder) any rights or remedies hereunder.

 

9.14                        Construction.  The Parties have participated jointly
in the negotiation and drafting of this Agreement.  In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement.

 

9.15                        Counterparts.  This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, and such
counterparts shall together constitute one and the same instrument.  A facsimile
transmission of an executed counterpart signature page shall be deemed an
original.

 

[The remainder of this page is left blank intentionally.]

 

26

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their respective duly authorized representatives as of the date first above
written.

 

 

LANTHEUS MEDICAL IMAGING, INC.

 

 

 

 

 

 

By:

/s/ Jeff Bailey

 

 

Name:

Jeff Bailey

 

 

Title:

Chief Executive Officer

 

 

 

 

 

 

 

PHARMALUCENCE, INC.

 

 

 

 

 

 

 

By:

/s/ Edward J. Connolly

 

 

Name:

Edward J. Connolly

 

 

Title:

COO

 

 

27

--------------------------------------------------------------------------------

 

Proposal #1:
DEFINITY® Vial for (Perflutren Lipid Microsphere) Injectable Suspension

 

November 12, 2013

 

The following proposal (“Proposal #1”), upon execution and delivery, will
constitute a Proposal pursuant to, and as defined in, the Manufacturing and
Supply Agreement (the “Agreement”), dated as of November 12, 2013, by and
between Lantheus Medical Imaging, Inc., and Pharmalucence, Inc.

 

All capitalized terms used but not defined herein shall have the meanings
ascribed to those terms in the Agreement.

 

Proposal #1 shall be attached to the Agreement and shall be automatically deemed
incorporated into the Agreement by reference.

 

In the event of any conflict between this Proposal #1 and the Agreement, the
terms of the Agreement shall control.

 

The pricing indicated below is based upon the testing and manufacturing
requirements set forth in the RFP Proposal, dated September 13, 2013.  Any
changes to the manufacturing or test parameters shall be subject to mutual
agreement and attached as an addendum hereto.  For the avoidance of doubt, this
Proposal #1 reflects the sole pricing terms set forth in the Agreement, and none
of the pricing or other economic terms set forth in the RFP Proposal, dated
September 13, 2013, attached hereto are effective.

 

****

 

CONFIDENTIAL

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Parties have caused this Proposal #1 to be executed by
their respective duly authorized representatives as of the date first above
written.

 

 

LANTHEUS MEDICAL IMAGING, INC.

 

 

 

 

 

 

By:

/s/ Jeff Bailey

 

 

Name:

Jeff Bailey

 

 

Title:

Chief Executive Officer

 

 

 

 

 

PHARMALUCENCE, INC.

 

 

 

 

 

 

By:

/s/ Edward J. Connolly

 

 

Name:

Edward J. Connolly

 

 

Title:

COO

 

 

CONFIDENTIAL

 

--------------------------------------------------------------------------------