Exhibit 10.2

***Text Omitted and Filed Separately with the Securities and Exchange
Commission.

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

CO-PROMOTION AGREEMENT

THIS CO-PROMOTION AGREEMENT (“Agreement”) is entered into effective on and as of
June 14, 2012 (“Effective Date”) by and between Horizon Pharma USA, Inc.
(“Horizon”) and Mallinckrodt LLC (“Mallinckrodt”). Each of Horizon and
Mallinckrodt are sometimes referred to herein, individually, as a “Party” and,
collectively, as the “Parties”.

WHEREAS, Horizon is the owner of a branded pharmaceutical dosage product that is
a proprietary single-tablet combination of the non-steroidal anti-inflammatory
drug ibuprofen and the histamine H2-receptor antagonist famotidine, indicated
for relief of the signs and symptoms of rheumatoid arthritis and osteoarthritis
and to decrease the risk of developing upper gastrointestinal ulcers, which in
the clinical trials was defined as a gastric and/or duodenal ulcer, in patients
who are taking ibuprofen for those indications, and marketed under the name
DUEXIS® in the United States (“Product”), and

WHEREAS, the Parties have determined that it is in their mutual interest to
enter into a relationship whereby Mallinckrodt’s sales force will promote the
Product on the terms and conditions set forth herein,

NOW THEREFORE, in consideration of the foregoing premises and the comments set
forth herein below, the Parties, intending to be legally bound, hereby agree as
follows:

ARTICLE I

DEFINITIONS

As used in this Agreement, the following terms shall have the following
meanings:

 

1.1 “Act” means the United States Food, Drug and Cosmetic Act, 21 U.S.C 301, et
seq., as it has been or may be amended or supplemented from time-to-time, and
all rules and regulations promulgated or issued under or in connection
therewith.

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1.2 “Adverse Drug Experience” means, with respect to the use of the Product, an
unexpected side effect, injury, toxicity, sensitivity reaction, or unexpected
incidence or severity of side effects, or any unfavorable and unintended sign,
symptom or disease temporarily associated with the use of medical treatment,
regardless of whether it is considered to be related to such treatment; it also
includes failure of a drug product to exhibit expected pharmacological action or
any adverse event occurring from abuse or overdose of the drug product, whether
accidental or intentional. A “Serious Adverse Drug Experience” means, with
respect to the Product, an Adverse Drug Experience that results in death, a life
threatening adverse drug experience, in-patient hospitalization or prolongation
of existing hospitalization, a persistent or significant disability or
incapacity, or a congenital anomaly or birth defect, or any other event that may
require surgical or other medical intervention to prevent any of the foregoing
listed outcomes.

 

1.3 “Affiliate” means, with respect to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with the former Person, where “control” (and the correlative terms “controlling”
and “controlled by”) mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through direct or indirect beneficial ownership of more than fifty
percent (50%) (or such lesser percentage which is the maximum allowed to be
owned by a foreign corporation in a particular jurisdiction) of the voting
securities of such Person, by contract or otherwise.

 

1.4 “Agreement” has the meaning set forth in the preamble hereof.

 

1.5 “Agreement Quarter” means any consecutive three (3) calendar month period
elapsing during the Term hereof coincident with calendar quarters, except that
(i) the first such Agreement Quarter shall commence on the Effective Date hereof
and end on September 30, 2012 and (ii) the last Agreement Quarter may be shorter
than a full three (3) calendar month period if this Agreement expires or is
terminated effective on a date that occurs before what would otherwise be the
last day of such Agreement Quarter.

 

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1.6 “Agreement Year” means each consecutive four (4) Agreement Quarters elapsing
during the Term hereof, except that the final Agreement Year may be shorter than
a four (4) Agreement Quarter period if this Agreement expires or is terminated
effective on a date that occurs before what would otherwise be the last day of
the fourth Agreement Quarter of such Agreement Year.

 

1.7 “Alliance Manager” has the meaning set forth in Section 3.4 below.

 

1.8 “Auditor” has the meaning set forth in Section 7.3(b) below.

 

1.9 “cGMP” means current Good Manufacturing Practice as that term is defined
from time-to-time by the FDA and/or any other relevant Government Authority
having jurisdiction over the manufacture or sale of Product in the Territory, as
reflected by any applicable law, rules, regulations or guidelines promulgated
and/or administered by the FDA and/or any other relevant Government Authority in
the Territory.

 

1.10 “Change of Control” shall, with respect to either Party, be deemed to occur
when:

(i) any “person” or “group” (as such terms as defined below in this
Section 1.10) is or becomes the “beneficial owner” (as defined below in this
Section 1.10), directly or indirectly, of shares of capital stock or other
interests of such Party then outstanding and normally entitled (without regard
to the occurrence of any contingency) to vote in the election of the directors,
managers, or similar supervisory positions of such Party representing more than
fifty percent (50%) of the total voting power of all outstanding classes of
voting stock or equity of such Party,

(ii) such Party consummates a merger, consolidation or similar transaction with
another Person (whether or not such Party is the surviving entity) and as a
result of such merger, consolidation or similar transaction the Persons that
beneficially owned, directly or indirectly, the shares of voting stock or equity
of such Party immediately prior to such transaction do not beneficially own,
directly or indirectly, shares of voting stock

 

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or equity of the surviving Person representing at least a majority of the total
voting power of all outstanding classes of voting stock or equity of the
surviving Person,

(iii) such Party sells or transfers to any Third Party, in one or more related
transactions, properties or assets representing all or substantially all of such
Party’s assets, or

(iv) the holders of capital stock or equity of such Party approve a plan or
proposal for the liquidation or dissolution of such Party.

For the purpose of this Section 1.10, (A) “person” and “group” have the meanings
given such terms under Section 13(d) and 14(d) of the United States Securities
Exchange Act of 1934 and the term “group” includes any group acting for the
purpose of acquiring, holding or disposing of securities within the meaning of
Rule 13d-5(b)(1) under the United States Securities Exchange Act of 1934, (B) a
“beneficial owner” shall be determined in accordance with Rule 13d-3 under the
United States Securities Exchange Act of 1934, and (C) the term “beneficially
owned” and “beneficially own” shall have the meaning correlative to that of
“beneficial owner.”

 

1.11 “Compliance Materials” means, as to either Party, such Party’s internal
compliance policies and procedures as recorded in such Party’s books and
records.

 

1.12 “Confidentiality Agreement” means that certain Confidentiality Agreement
between Horizon and Mallinckrodt dated […***…].

 

1.13 “Co-promotion Fee” means the fee paid by Horizon hereunder to Mallinckrodt,
as more fully described in Section 7.1 below.

 

1.14 “Detail” or “Detailing” means an in-person, face-to-face sales presentation
of the Product made by a Sales Representative of Mallinckrodt to a healthcare
professional who is permitted by applicable law to write a prescription for such
Product.

 

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1.15 “Direct Cost” shall mean either or both of Direct Cost for Promotional
Materials or Direct Cost for Samples, as the context shall reasonably require.

 

1.16 “Direct Cost for Promotional Materials” has the meaning set forth in
Section 4.7(a) below.

 

1.17 “Direct Cost for Samples” has the meaning set forth in Section 6.3 below.

 

1.18 “Disclosing Party” has the meaning set forth in Section 1.53 below.

 

1.19 “Effective Date” has the meaning set forth in the preamble hereof.

 

1.20 “Enforcement Action” has the meaning set forth in Section 10.2(b) below.

 

1.21 “Exclusive Target” means and refers to any prescribing healthcare
professional listed on the Mallinckrodt Call List and designated as an Exclusive
Target.

 

1.22 “FDA” means the United States Food and Drug Administration or any successor
agency performing comparable regulatory functions in the Territory.

 

1.23 “Generic Drug Act” means the Generic Drug Enforcement Act of 1992, 21
U.S.C. §335a, as it has been or may be amended or supplemented from
time-to-time.

 

1.24 “Governmental Authority” means any court, agency, authority, department,
regulatory body or other instrumentality of any federal, state or local
government which has competent and binding authority to regulate, enforce or
otherwise control the activities of the Parties as contemplated herein.

 

1.25 “Horizon” has the meaning set forth in the preamble hereto.

 

1.26 “Indemnitee” has the meaning set forth in Section 12.3 below.

 

1.27 “Indemnitor” has the meaning set forth in Section 12.3 below.

 

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1.28 “JAMS” has the meaning set forth in Section 13.6(b) below.

 

1.29 “Joint Management Committee” or “JMC” has the meaning set forth in
Section 3.1 below.

 

1.30 “Legal Requirements” means, as they are now in effect or as they may
hereafter be amended or supplemented, any or all of the following as they may be
applicable in any particular circumstances: (i) the PhRMA Code, (ii) the OIG
Guidelines, (iii) the Act, (iv) the Generic Drug Act, (v) PDMA, (vi) OPDP’s
applicable promotional guidelines, (vii) all applicable regulations, guidelines
and directives of the FDA, including those concerning the marketing and
advertising of prescription drug products, (viii) the Federal Health Care
Programs Anti-Kickback Law, 42 U.S.C. §1320a-7b(b), (ix) the statutes,
regulations and directives of Medicare, Medicaid and all other government funded
or sponsored healthcare programs in the Territory, (x) the Health Insurance
Portability and Accountability Act of 1996, as amended by the Health Information
Technology for Economic and Clinical Health Act of 2009 (“HITECH”), (xi) the
False Claims Act, 31 U.S.C. §3729 et seq., (xii) comparable state laws and
implementing regulations for referenced laws, and (xiii) all other federal,
state and local laws, rules and regulations that are in effect in the Territory
and are applicable in any manner to the performance by either or both of the
Parties of their obligations or the exercise of their rights under this
Agreement, all as have been or may be amended or supplemented from time-to-time.

 

1.31 “Loss” has the meaning set forth in Section 12.1 below.

 

1.32 “Mallinckrodt” has the meaning set forth in the preamble hereto.

 

1.33 “Mallinckrodt Call List” means that list of healthcare professionals with
the legal right to prescribe pharmaceutical dosage products in the Territory,
which list has been agreed upon by the Parties and exchanged […***…] and
[…***…].

 

1.34 “Mallinckrodt Forecast” has the meaning set forth in Section 6.3 below.

 

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1.35 “Measurement Period” means, with respect to any Supply Failure (as defined
herein) any consecutive […***…] calendar month period elapsing during the Term.

 

1.36 “[…***…] Report” has the meaning set forth in Section 7.1(a) below.

 

1.37 “NSAID Product” has the meaning set forth in Section 6.5(a) below.

 

1.38 “OIG Guidelines” means the Office of Inspector General Compliance Program
Guidance for Pharmaceutical Manufacturers, dated April 2003, as it has or may be
amended as supplemented from time-to-time.

 

1.39 “OPDP” means the FDA’s Office of Prescription Drug Promotion (formerly the
Division of Drug Marketing, Advertising and Communications or DDMAC) or any
successor Governmental Authority performing comparable functions.

 

1.40 “Paragraph IV Notice” has the meaning set forth in Section 9.2(v) below.

 

1.41 “Party” and “Parties” has the meaning set forth in the preamble hereto.

 

1.42 “Payment Report” has the meaning set forth in Section 7.1(b) below.

 

1.43 “PDMA” means the federal Prescription Drug Marketing Act, as it has been or
may be revised or supplemented from time-to-time.

 

1.44 “Person” means any natural person, corporation, firm, business trust, joint
venture, association, organization, company, partnership, or other business
entity, or any government or agency or political subdivision thereof.

 

1.45 “PhRMA Code” means the PhRMA Code on Interactions with Healthcare
Professionals, as it has been or may be revised or supplemented from
time-to-time.

 

1.46 “PIR” has the meaning set forth in Section 5.5(a) below.

 

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1.47 “PPACA” has the meaning set forth in Section 6.3 below.

 

1.48 “Product” has the meaning set forth in the preamble hereto.

 

1.49 “Product Complaint” means any written, electronic or verbal communication
from any customer, user, prescriber or other Third Party that alleges
deficiencies concerning the identity, quality, durability, appearance,
reliability, effectiveness, performance or any side effects of or concerning the
Product.

 

1.50 “Promote”, “Promotional”, “Promotion”, “Promoting”, and any variation
thereof, shall mean and refer to those activities undertaken by a pharmaceutical
company (in this Agreement, either Horizon and/or Mallinckrodt, as the context
may require) to encourage appropriate use of the Product, including detailing,
sampling, advertising, the provision of discounts and all other lawful and
appropriate forms of advertising and promotion.

 

1.51 “Promotion Commencement Date” has the meaning set forth in Section 4.2(a)
below.

 

1.52 “Promotional Materials” means those informational, advertising, marketing,
educational and training materials developed and used by Horizon which are
necessary and/or useful in connection with the Promotion of the Product,
including (without limitation) Detailing aids, leave behind educational items,
journal advertising, educational programs, appropriate reprints, monographs,
patient support kits, exhibit materials, direct mail, training courses and
formulary binders.

 

1.53

“Proprietary and Confidential Information” means any proprietary and
confidential information communicated by or on behalf of one Party or any of its
Affiliates (the “Disclosing Party”) to the other Party or any of its Affiliates
(the “Recipient Party”) in connection or relating to this Agreement (including
discussions and negotiations relating hereto), whether communicated prior to,
on, or following the Effective Date, including financial, marketing, business,
technical and scientific information or data, information related to
compensation of sales representatives, information contained within any
commercial plan, budget or financial statements, and the information exchanged
pursuant to this Agreement, in any case whether communicated in writing, orally,
electronically or

 

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  by means of inspection. For the avoidance of doubt, the commercial data and
information generated by each Party in connection with its activities under this
Agreement are the Proprietary and Confidential Information of that Party (except
that all commercial data and information specific to the Product shall be the
Proprietary and Confidential Information of Horizon), the terms of this
Agreement are the Proprietary and Confidential Information of both Parties, and
Compliance Materials provided by the Disclosing Party to the Recipient Party are
the Proprietary and Confidential Information of the Disclosing Party.
Notwithstanding the immediately foregoing, Proprietary and Confidential
Information shall not include information that the Recipient Party, having the
burden of proof, can show through written documentation:

(i) at the time of disclosure, is publicly known,

(ii) after the time of disclosure, becomes part of the public domain, except by
breach of any agreement between the Disclosing Party and the Recipient Party
(including this Agreement),

(iii) is or was in the possession of the Recipient Party at the time of
disclosure by the Disclosing Party and was not acquired directly or indirectly
from the Disclosing Party or from any Third Party under an agreement of
confidentiality to the Disclosing Party, and

(v) is or was developed by the Recipient Party without use of or reference to
the Disclosing Party’s Proprietary and Confidential Information.

 

1.54 “Quarterly Minimum Prescription Levels” has the meaning set forth in
Section 4.4(a) below.

 

1.55 “Recipient Party” has the meaning set forth in Section 1.53 above.

 

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1.56 “Regulatory Approval” means any and all consents or other authorizations
and approvals required from a Governmental Authority to allow the Product
lawfully to be marketed and sold in the Territory.

 

1.57 “Relevant Records” has the meaning set forth in Section 7.3(a) below.

 

1.58 “Residual Fee” has the meaning set forth in Section 7.2(a) below.

 

1.59 “Residual Fee Measurement Period” has the meaning set forth in
Section 7.2(a) below.

 

1.60 “Sales Representatives” means the sales representatives of Mallinckrodt who
will be performing the Promotional activities contemplated to be performed by
Mallinckrodt with respect to the Product in accordance herewith, and may also
mean and refer to any personnel of a Third Party that are used to supplement
Mallinckrodt’s Promotional efforts hereunder, if and as permitted in accordance
herewith.

 

1.61 SEC Reports” means the annual, quarterly and current reports filed by
Horizon with the U.S. Securities and Exchange Commission.

 

1.62 “Source” means Source Healthcare Analytics, LLC (formerly known as Wolters
Kluwer).

 

1.63 “Supply Failure” has the meaning set forth in Section 4.3(e) below.

 

1.64 “Target Commencement Date” has the meaning set forth in Section 4.2(a)
below.

 

1.65 “Term” has the meaning set forth in Section 8.1 below.

 

1.66 “Territory” means the United States of America, excluding any territories
or possessions and excluding Puerto Rico.

 

1.67 “Third Party” means any Person other than Horizon or Mallinckrodt or their
respective Affiliates.

 

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1.68 “Third Party Infringement Claim” has the meaning set forth in
Section 10.2(a) below.

 

1.69 “Trademark” means, with respect to either Party and as the context may
require, any trademark, trade dress, service mark, trade name, brand name,
corporate name, logo, business symbol, or any other identifying word, slogan,
symbol or design, or any combination thereof, whether registered or
unregistered.

ARTICLE II

GRANT OF CO-PROMOTION RIGHTS

2.1 Grant of Co-promotion Rights.

During the Term, and subject to and in accordance with the terms and conditions
hereof, Horizon hereby grants to Mallinckrodt and Mallinckrodt hereby accepts a
non-exclusive right to Promote the Product under the Horizon Trademarks to the
Exclusive Targets in the Territory. For clarity, except as and to the extent set
forth in Section 6.6, Horizon shall continue to have the right to, and to grant
to one or more Third Parties the right to, Promote, sell and market the Product
throughout the Territory.

2.2 Subcontracting of Performance.

Neither Party may subcontract or delegate the performance of its obligations
hereunder without the advance written consent of the other Party, except (i) in
connection with an assignment of its rights and obligations hereunder to the
extent permitted pursuant to Section 13.1 below, (ii) that either Party may
perform any or all of its obligations and may exercise any of its rights
hereunder through any of its Affiliates, as long as the other Party is notified
in writing of the details of such performance and exercise, it being understood
the Party delegating such performance and exercise shall remain fully
responsible for the performance of its obligations under this Agreement, and
(iii) that Horizon may subcontract with, delegate to and/or rely upon the
services of one or more Third Parties for performance of its obligations with
respect to the manufacture, production or supply of its Product, Product samples
and

 

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Promotional Materials. Mallinckrodt may propose to subcontract with one or more
Third Parties to supplement its Promotion efforts for the Product by notifying
Horizon in writing of the proposed subcontracting arrangement and, subject to
Horizon’s prior written consent, Mallinckrodt may proceed with the
subcontracting arrangement with such Third Party on the terms proposed to
Horizon, it being understood Mallinckrodt shall remain fully responsible for the
performance of its obligations under this Agreement, including any performance
by such Third Party subcontractor; provided that, Horizon’s consent shall not be
required for any subcontracting arrangement put in place by Mallinckrodt with
any Third Party if and to the extent any such subcontracting arrangement
involves Promotion of the Product by the employees or agents of such Third Party
with respect to less than […***…] percent ([…***…]%) of the Exclusive Targets on
the Mallinckrodt Call List.

2.3 Retention of Rights.

Horizon retains all proprietary interests in the Product and Mallinckrodt shall
not have nor represent that it has any control or proprietary interest in the
Product, except for any rights explicitly granted hereunder. Except as expressly
set forth herein, nothing in this Agreement shall be deemed to grant to
Mallinckrodt, by implication, a license or other right in any patent, Trademark
or similar property of Horizon or its Affiliates.

ARTICLE III

CO-PROMOTION COORDINATION

3.1 Establishment of Joint Management Committee.

Except for any specific agreement by the Parties to the contrary as set forth
herein, the activities and resources of each Party shall be controlled and
managed by such Party, acting independently and in its individual capacity.
Subject to the immediately preceding sentence, as soon as possible after the
Effective Date but no later than […***…] days thereafter, the Parties will
establish a “Joint Management Committee” or “JMC” which shall have the purpose
of

 

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coordinating, monitoring, reviewing and discussing the strategic and operational
elements of the Promotional activities of the Parties.

3.2 Role and Authority of the JMC.

The JMC’s role shall be:

(i) to facilitate the exchange of any information and data (including
Proprietary and Confidential Information) between the Parties as required to
allow each Party efficiently to perform its obligations and exercise its rights
hereunder and to establish appropriate procedures, restrictions and safeguards
relative to the exchange of any information and data,

(ii) to review and discuss any marketing plans and Promotional strategies
established by Horizon for the Product to ensure consistent messaging and
positioning of the Product by Mallinckrodt and to facilitate a consistent
approach to pharmacovigilance and regulatory activities,

(iii) to review, discuss and approve any changes to be made to the Mallinckrodt
Call List, which changes shall be made no more frequently than […***…] per
[…***…] unless otherwise agreed by the Parties,

(iv) to serve as a forum for the Parties to discuss opportunities and challenges
encountered by Mallinckrodt in the Promotion of the Product and to ensure that
Horizon’s marketing plans, Promotional strategy, messaging and positioning for
its Product are made known to Mallinckrodt hereunder,

(v) to serve as a forum for the Parties to discuss the possible resolution of
disputes that may arise between them relative to the administration and the
intent of this Agreement (but not to displace the dispute resolution procedures
set forth elsewhere herein, including those set forth in Section 13.6 below),

 

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(vi) to establish such subcommittees or working groups as the Parties may agree
are necessary to achieve the objectives and intent of this Agreement, and

(vii) to perform such other functions as may be agreed upon by the Parties in
writing.

Notwithstanding the preceding portions of this Section 3.2, except for the
authority granted to the JMC in clause (iii) of the immediately preceding
sentence and except as may otherwise be specifically and unambiguously provided
herein, it is agreed by the Parties that the JMC shall not have the power or
authority to amend, modify or waive any of the terms or conditions of this
Agreement. For purposes of clarity, Horizon will have sole responsibility for
establishing the overall marketing and Promotional strategy, messaging and
positioning for its Product.

3.3 JMC Membership and Procedures.

(a) Subject to Section 3.2, the JMC shall make diligent efforts to operate by
unanimous consensus between the representatives of Horizon, on the one hand, and
the representatives of Mallinckrodt, on the other hand. For the avoidance of
doubt, each Party shall […***…], regardless of the number of representatives of
that Party present or voting. No decision of the JMC shall be valid unless each
Party is represented by at least one (1) member at the meeting at which the
decision is made. The Parties shall cause their respective representatives on
the JMC to use their good faith efforts to resolve all matters appropriately
presented to them in an expeditious manner.

(b) The JMC will be comprised of […***…] members, […***…] selected by each
Party. Each Party has, prior to the Effective Date, provided to the other Party
its initial appointments to the JMC. A Party may change any of its
representatives to the JMC at any time by […***…]. The total number of members
on the JMC may be changed by[…***…] from time-to-time, provided that, each Party
has the right, in its sole discretion, to appoint an equal number of members to
the JMC. The members appointed to the JMC by each Party shall be employees of
such Party and shall have the requisite experience and seniority to discuss
issues on behalf of such Party or to make decisions with respect to issues

 

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falling within the jurisdiction of the JMC; provided that, either Party may
appoint non-employee representatives or consultants to serve as members of the
JMC with the prior written consent of the other Party, such consent not to be
unreasonably withheld.

(c) The chair of the JMC will be an employee of Horizon. The chair of the JMC
shall have the authority and responsibility to call meetings of the JMC, to
propose agendas for (and any other member of the JMC may add items to such
agendas) and preside over such meetings, and to appoint a secretary to record
minutes for such meetings. Minutes of any meetings of the JMC will not be
considered final until representatives of both Parties have reviewed them and
confirmed the accuracy of such minutes in writing. […***…].

(d) Meetings of the JMC may be called by the chair of the JMC from time-to-time
and, upon no less than […***…] days’ notice, shall otherwise be called when
requested by a Party; provided that, the JMC shall meet at lease […***…] during
every […***…], and otherwise as required to discuss disputes or other issues
judged to be of relative importance by one or both Parties. Meetings may be held
in person or by video or telephone conference. Unless otherwise agreed, the
location of in-person meetings shall alternate between the corporate offices of
the Parties. The format of the meetings and all other procedural matters shall
be decided by the JMC. Each Party shall bear its own travel and related costs
incurred in connection with participation in the JMC.

(e) Communications among members of the JMC in connection with the conduct of
the day-to-day business of the JMC shall not be subject to the notice provisions
set forth in Section 13.4, but shall be governed by procedures agreed upon
unanimously by the members of the JMC.

(f) For the avoidance of doubt, disputes between the Parties with respect to
performance under or interpretation of this Agreement shall be decided pursuant
to the provisions set forth in Section 13.6 below, or with respect to certain
matters herein, in accordance with specific dispute resolution procedures
expressly established herein for the

 

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resolution of disputes concerning such matters, and not by the JMC in the first
instance unless the Parties specifically and unambiguously agree in writing to
the contrary.

3.4 Alliance Manger.

Each Party shall, as soon as possible after the Effective Date, appoint a single
individual to coordinate all daily, ordinary course of business interactions
between the Parties that may be necessary to administer this Agreement
effectively and carry out the intent and objectives of the Parties (for each
Party, an “Alliance Manager”). Each Alliance Manager shall be experienced in
project management, be knowledgeable about the marketing and sale of branded
pharmaceutical dosage products in general and may also serve as one of his/her
Party’s representatives on the JMC. Each Party may change its Alliance Manager
effective upon written notice to the other Party.

ARTICLE IV

PRODUCT PROMOTION

4.1 Promotional Efforts Generally.

Mallinckrodt shall, during the Term and from and after the Promotion
Commencement Date as set forth below in Section 4.2, use commercially reasonable
efforts to Promote the Product within the Territory in a manner consistent with
the marketing and Promotional strategies and Product positioning established by
Horizon for its Product as communicated through meetings of the JMC and contacts
between representatives of the Parties, including their Alliance Managers.
Mallinckrodt shall focus its efforts on Detailing the Product to the Exclusive
Targets on the Mallinckrodt Call List. Mallinckrodt shall cause its Sales
Representatives and its employees and agents (including those of its Affiliates)
to comply with the terms and conditions of this Agreement and all applicable
Legal Requirements in connection with any Promotional activities performed by or
on behalf of Mallinckrodt. Mallinckrodt understands and agrees that it will be
responsible for the acts or omissions to act by any of its Sales Representatives
and its employees and agents (including those of its Affiliates) in connection
with performance under

 

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this Agreement. Furthermore, Mallinckrodt agrees that it will be responsible for
all of its own costs and expenses related to the performance of its Detailing
and Promotional activities hereunder, including (without limitation) costs and
expenses associated with any meals, meetings and conferences, except as may
otherwise be specifically set forth herein.

4.2 Promotion Commencement.

(a) Mallinckrodt shall use commercially reasonable efforts to commence
Promotional activities with respect to the Product on a date that is no later
than […***…] days after the Effective Date and, in any event, shall be required
to commence Promotion of the Product on or before September 30, 2012. For
purposes hereof, the actual date upon which Mallinckrodt begins Promotion of the
Product shall be known as the “Promotion Commencement Date” and the date on
which Mallinckrodt is required to commence Promotion of the Product shall be
known as the “Target Commencement Date.”

(b) Notwithstanding any other provision hereof, in the event Mallinckrodt has
failed to commence significant Promotional activity with respect to the Product
on or before the Target Commencement Date, as set forth immediately above in
Section 4(a), then Horizon shall have the right, effective immediately upon
notice to Mallinckrodt, to terminate this Agreement in its entirety, subject to
the consequences of such termination as set forth in Section 8.3 below.

4.3 Supply Failures.

If, during any Measurement Period occurring during the Term, in at least […***…]
months of such Measurement Period or in any […***…] months occurring during any
such Measurement Period, there is an occurrence of insufficient volume (as
determined by standards to be developed by the Parties within […***…] days after
the Effective Date) of Product in the retail distribution channel or in any
significant portion of the retail distribution channel to meet orders for
Product, as determined from a review of all relevant information, including
information contained in Horizon’s warehouse inventory reports and in relevant
EDI-852 forms (any such occurrence with respect to the Product during any
particular

 

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Measurement Period, a “Supply Failure”), then Mallinckrodt shall have the right,
within […***…] days after the end of any such Measurement Period in which a
Supply Failure occurs, to terminate this Agreement in its entirety effective
upon […***…] days written notice to Horizon, subject to the consequences of such
termination as set forth in Section 8.3 below.

4.4 Prescription Volume.

(a) Mallinckrodt shall be required to achieve a certain minimum level of filled
prescriptions attributable to Exclusive Targets during each Agreement Quarter
elapsing during the Term hereof, except for the first Agreement Quarter (i.e.,
the period from the Effective Date through September 30, 2012) and the last
Agreement Quarter if such Agreement Quarter is less than three (3) full months
(“Quarterly Minimum Prescription Levels”). Specifically, Mallinckrodt shall meet
the Quarterly Minimum Prescription Levels for each applicable Agreement Quarter
with respect to the Product as set forth on Exhibit A attached hereto. The
Parties will determine, with respect to a particular relevant Agreement Quarter,
whether or not the Quarterly Minimum Prescription Level has been met using data
provided to Horizon by Source, it being understood that Horizon shall disclose
to Mallinckrodt only such data as is necessary to determine whether or not the
Quarterly Minimum Prescription Level has been met, all Source data provided by
Horizon to Mallinckrodt shall be Proprietary and Confidential Information of
Horizon, and Mallinckrodt shall enter into a Third Party Data Use Agreement with
Source and Horizon in the form attached hereto as Exhibit B (with modifications
as agreed by Source, Horizon and Mallinckrodt) with respect to such data. No
assessment will be made by either Party as to whether or not the Quarterly
Minimum Prescription Level for any given Agreement Quarter has been achieved
until […***…] days have elapsed after both Parties have had access to the Source
data and any other data reasonably available to the Parties that is necessary to
determine whether or not the Quarterly Minimum Prescription Level has been
achieved for such Agreement Quarter so that data can be fully correlated with
the Exclusive Targets. If the relevant Source data shows that, during the period
of time commencing on October 1, 2012 and ending on September 30, 2013, the
Quarterly Minimum Prescription Level has not been achieved with respect to any
two (2) consecutive Agreement Quarters, then Horizon shall have the right, upon
[…***…] days advance notice to Mallinckrodt, to terminate this

 

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Agreement in its entirety, subject to the consequences of such termination as
set forth in Section 8.3 below. If the relevant Source data shows that, during
the period of time commencing on October 1, 2013 and ending on September 30,
2014, the Quarterly Minimum Prescription Level has not been achieved with
respect to any two (2) consecutive Agreement Quarters, then either Party shall
have the right, upon […***…] days advance notice to the other Party, to
terminate this Agreement in its entirety, subject to the consequences of such
termination as set forth in Section 8.3 below.

(b) In the event that, during the first full calendar month after the expiration
of one (1) year from and after the Promotion Commencement Date, the monthly
prescription volume for the Product in the United States (as determined from
applicable Source data) is not equal to or greater than […***…] prescriptions,
Mallinckrodt shall have the right to terminate this Agreement in its entirety
effective upon […***…] days advance written notice to Horizon unless, within the
first […***…] days of such notice period, the Parties are able to renegotiate
this Agreement on mutually acceptable terms, which renegotiation both Parties
will attempt in good faith. If, despite their exercise of good faith efforts,
the Parties are unable, within such […***…] day period, to enter into a mutually
acceptable agreement, this Agreement shall terminate effective on and as of the
end of the […***…] day notice period, subject to the consequences of such
termination as set forth in Section 8.3 below.

4.5 Representations to Customers.

Mallinckrodt shall, in connection with its Promotion of the Product, refrain
from making (i) any false or misleading representations to healthcare providers,
customers or others regarding Horizon or the Product, (ii) any representations,
warranties, or guarantees with respect to the specifications, features, or
capabilities of the Product other than those expressly set forth in the
Promotional Materials being used by Mallinckrodt to Promote such Product and the
applicable then-current FDA approved labeling and package insert or (iii) any
representations, warranties or guarantees that are not consistent with any
applicable Legal Requirements. Most importantly, Mallinckrodt agrees only to
promote and to cause its Sales Representatives only to Promote the Product for
its approved FDA indications and subject to any restrictions or limitation in
its FDA-

 

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approved package insert, and not to suggest, imply or otherwise indicate that
the use of such Product for any off-label indication or any use inconsistent
with its FDA-approved package insert is permitted.

4.6 Staffing and Training.

(a) Mallinckrodt shall be solely responsible for all costs and expenses incurred
to compensate its Sales Representatives, including, without limitation, the
payment of all salary and benefits, including any incentive compensation or
bonus payments, and the withholding of all taxes associated with any
compensation paid to any Sales Representatives.

(b) From time-to-time, Mallinckrodt shall, in consultation with Horizon,
establish training objectives and training plans for its Sales Representatives
with respect to the Product. In that regard, Horizon shall supply to
Mallinckrodt training materials and training assistance with respect to the
Product […***…], in an amount, in a manner and at times to be determined by the
Alliance Managers or other appropriate representatives of the Parties; but, at a
minimum, Horizon shall provide to all of Mallinckrodt’s Sales Representatives,
[…***…] and before the Promotion Commencement Date, at least […***…] of
[…***…]training in a format and at a location to be reasonably agreed upon.
Further, Horizon agrees during the Term to amend or supplement training
materials and provide additional training assistance with respect to the
Product, […***…], when and as required, to reflect changes in Legal Requirements
or any changed circumstances with respect to the Product, and Mallinckrodt will
disseminate such training materials to its Sales Representatives. Training
materials provided shall address all matters relating to the Product required to
ensure full compliance by Mallinckrodt Sales Representatives with applicable
Legal Requirements (it being understood that Mallinckrodt remains solely
responsible for any and all training of Sales Representatives with respect to
applicable Legal Requirements other than those Legal Requirements relating to
the Product) and to ensure Mallinckrodt Sales Representatives have full Product
knowledge concerning disease states, appropriate indications and competitive
product knowledge required effectively to Promote the Product. Mallinckrodt
shall provide to its Sales Representatives such

 

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reinforcements and refresher training with respect to the Product as and when it
may be reasonably required, with the prompt assistance of Horizon.

(c) Mallinckrodt shall ensure that only those Sales Representatives who have
reviewed the training materials, completed training with respect to the Product
and demonstrate an adequate knowledge of the Product shall be allowed to Promote
the Product hereunder.

(d) During the Term hereof and for a period of one (1) year thereafter, neither
Party shall actively recruit or solicit for employment any then-current member
of the sales force of the other Party or any other staff member of the other
Party who is engaged or had been engaged in the Promotion or Detailing of the
Product. For the avoidance of doubt, nothing in this Agreement shall limit a
Party from engaging in general recruitment through advertisements or recruiting
through “head-hunters” so long as the staff members of the other Party are not
specifically targeted in such recruitment effort.

4.7 Promotional Materials.

(a) At least […***…] days prior to the Target Commencement Date hereunder and
thereafter as reasonably required by Mallinckrodt, Horizon shall provide […***…]
to Mallinckrodt such amounts of all then-available Promotional Materials as
Mallinckrodt shall request, and Mallinckrodt shall within […***…] days of
receipt of any invoice (subject to the right to dispute any incorrect amount
reflected in such invoice) reimburse Horizon for […***…], excluding in the case
of Promotional Materials costs of […***…] and of […***…] herein below. All
Promotional Materials shall prominently display the Trademark(s) of Horizon and
shall only display any one or more of the Trademarks of Mallinckrodt hereunder
upon the advance written consent of Mallinckrodt. The Parties agree that Horizon
will only be obligated to provide Mallinckrodt Promotional Materials that
Horizon has created for its own use, as available from time to time, and will
not have any obligation to change the Promotional Materials for Mallinckrodt’s
use or create any customized materials for Mallinckrodt.

 

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(b) All Promotional Materials provided to Mallinckrodt shall have been reviewed
and approved by the promotional and review committee (or any bodies exercising
similar functions) of Horizon. Mallinckrodt shall review any Promotional
Materials prior to use and within a reasonable period of time (not to exceed
[…***…] days) from the date such Promotional Materials are first provided by
Horizon, and Mallinckrodt shall not be required to use any Promotional Materials
that are not reviewed by and acceptable to Mallinckrodt’s promotional review
committee or any group or individuals with appropriate expertise within
Mallinckrodt delegated to review such materials, although the obligation of
Mallinckrodt to review the Promotional Materials shall be limited to a review of
Legal Requirements and shall not involve a review of the factual or scientific
basis underlying any claims set forth in any such Promotional Materials. In the
event that, as a result of such review by Mallinckrodt hereunder (including any
materials introduced after the Promotion Commencement Date), Mallinckrodt
reasonably believes that changes to any such Promotional Materials are necessary
or advisable to meet Legal Requirements or any regulatory requirements, such
proposed changes shall be advanced for determination in accordance with
procedures to be established by the Parties, with a view to limiting both
Parties’ internal personnel resources and external costs associated with the
review of Promotional Materials in any case while ensuring that all such
Promotional Materials meet all applicable Legal Requirements and applicable
regulatory standards.

(c) Mallinckrodt shall not be required to use any portion of the Promotional
Materials provided by Horizon that (i) have not been approved by both its own
and Horizon’s promotional and review committee (or similar body) or (ii) are not
in compliance with applicable Legal Requirements and regulatory standards.
Mallinckrodt shall only use Promotional Materials in the form so approved and in
a manner consistent with the training provided pursuant to Section 4.5 and
Mallinckrodt shall not unilaterally change, modify or supplement such
Promotional Materials in any way following such approval and training (including
by underlining or otherwise highlighting any text or graphics or adding any
notes thereto). Notwithstanding anything in this Agreement to the contrary,
Mallinckrodt shall not be required to take any action if Mallinckrodt reasonably
determines that such action would violate applicable Legal

 

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Requirements or applicable regulatory standards, including any such action
involving the use or dissemination of any Promotional Materials or training
materials.

(d) Horizon shall at all times use commercially reasonable efforts to ensure
sufficient quantities of Promotional Materials are available for use by
Mallinckrodt in performing its obligations hereunder. In the event that, after
the Promotion Commencement Date, changes in Legal Requirements or any other
circumstance makes the revision or supplementing of Promotional Materials
necessary or advisable, Horizon agrees to perform such revision or
supplementation to the Promotional Materials as soon as reasonably possible and
to make such revisions and supplements available to Mallinckrodt for review and
approval in accordance herewith and consequent use as soon as that can
reasonably be done. In no event shall Horizon be required to make any change,
revision or supplementation to the Promotional Materials that Horizon reasonably
believes is not necessary or advisable or would violate applicable Legal
Requirements or applicable regulatory standards.

(e) Horizon shall own all copyrights and other intellectual property rights in
and to all Promotional Materials (other than any licensed Third Party
copyrights), whether or not created before or during the Term of this Agreement.

4.8 License to Use Horizon Trademarks for Promotional Activities.

(a) Horizon Trademarks must appear on all Promotional Materials that make
reference to the Product, to the extent such Promotional Materials would
typically contain any Trademark, as defined hereunder. In no event shall
Mallinckrodt have any right to use any Trademark other than a Horizon Trademark
in connection with the Product or the Promotion thereof, absent the prior
written consent of Horizon. Horizon hereby grants to Mallinckrodt (and to the
extent provided in Section 2.2(ii), Affiliates of Mallinckrodt performing
Promotional activities) a non-exclusive, royalty-free right and license to use,
in the Territory, the Horizon Trademarks and to use, reproduce and distribute
Promotional Materials and any other Product-related materials made available by
Horizon to Mallinckrodt, in each case solely for the Promotion of the Product in
accordance with the terms and conditions of this Agreement, which license shall
not be sublicensable, assignable, or transferable (except to the extent
permitted

 

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pursuant to Section 13.1 below), except that Mallinckrodt may grant a limited
non-exclusive sublicense under such license, limited in the same manner as such
license to Mallinckrodt, to any Third Party providing Sales Representatives to
the extent permitted in accordance with the terms of Section 2.2 above. Such
license (and any sublicense thereunder granted to any Third Party) shall expire
immediately upon the expiration or termination in its entirety of this Agreement
for any reason. Mallinckrodt recognizes Horizon’s rights in and to the Horizon
Trademarks, its Promotional Materials and other Product-related materials, and
shall not at any time, during or after the Term, intentionally do or knowingly
suffer to be done any act or thing which would impair the rights of Horizon in
or to the Horizon Trademarks or any such materials. Mallinckrodt acknowledges
and agrees that it and its Affiliates and permitted Third Party subcontractors
shall not acquire and shall not claim any title to the Horizon Trademarks or any
such materials adverse to Horizon by virtue of the rights granted under this
Agreement or through use of the Horizon Trademarks or any such materials
hereunder, it being the intention of the Parties that all goodwill and improved
reputation generated by Mallinckrodt or any of its Affiliates and permitted
Third Party subcontractors and its and their use of the Horizon Trademarks shall
inure to the benefit of Horizon.

(b) Mallinckrodt (and any of its Affiliates and permitted Third Party
subcontractors), with respect to its use of the Horizon Trademarks, will
maintain quality standards for all of its uses of the Horizon Trademarks in
connection with the Promotion of the Product that are consistent with quality
standards that are (i) used by Horizon in connection with its pharmaceutical
products, (ii) communicated by Horizon to Mallinckrodt and (iii) reasonable.
Subject to the foregoing and to the other provisions of this Agreement,
Mallinckrodt acknowledges and agrees that Horizon has the right, at any time, to
modify or supplement such quality standards and that Mallinckrodt, as the
licensee hereunder, must implement such new standards or changes following
receipt of notice of such additions or changes; provided that, […***…]
associated with such modifications and supplements and that such modifications
and supplements are reasonable.

 

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ARTICLE V

COMPLIANCE AND REGULATORY AFFAIRS

5.1 Regulatory Approvals.

Horizon shall use commercially reasonable efforts during the Term to maintain
and continue all Regulatory Approvals for the Product.

5.2 Compliance with Regulatory Requirements.

Unless otherwise required by applicable Legal Requirements or expressly provided
by this Agreement, Horizon will retain exclusive authority over and
responsibility for complying with all regulatory requirements and maintaining
all contacts with Governmental Authorities with respect to the Product,
including the maintenance and updating of the Regulatory Approval, the reporting
of any Adverse Drug Experiences to the FDA, the compliance of Promotional
Materials with Legal Requirements, and the filing of Promotional Materials with
OPDP and the FDA; provided that the foregoing does not limit any obligation of
Mallinckrodt under this Agreement or under applicable Legal Requirements.

5.3 Compliance Materials.

(a) Each Party has, prior to the Effective Date, provided to the other Party
access to its Compliance Materials, and shall from time-to-time thereafter
promptly provide updates to such Compliance Materials if and as they are amended
or supplemented. Each Party shall ensure that relevant portions of its
Compliance Materials comply at all times with all applicable Legal Requirements.

(b) In performing its duties hereunder, each Party shall, and shall cause its
Affiliates, and its and their employees, agents, representatives (including, in
the case of Mallinckrodt, Sales Representatives) and contractors to comply with
applicable Legal Requirements and with Horizon’s Compliance Materials as
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this Agreement. Without limiting the foregoing, Mallinckrodt shall ensure that
none of it or its Affiliates, and its and their employees, agents,
representatives (including Sales Representatives), and contractors shall offer,
pay, solicit or receive any remuneration to or from any healthcare provider (as
that term is defined in the PhRMA Code) in order to induce or reward referrals
of or purchase of a Product in violation of applicable Legal Requirements,
including any anti-kickback laws. In particular, Mallinckrodt shall train its
Sales Representatives on all applicable Legal Requirements and requirements of
Horizon’s Compliance Materials as applicable to Promotional activities
contemplated by this Agreement prior to any such Sales Representatives engaging
in Promotion of the Product hereunder. Mallinckrodt and its Sales
Representatives will not make any payments or transfers of value to any
healthcare provider or to any employee, agent, or immediate family member of a
healthcare provider other than providing Promotional Materials and/or Product
samples as provided for herein, and if Mallinckrodt or any of its Sales
Representatives makes such a payment or transfer of value, Mallinckrodt shall
(i) maintain documentation of such payment or transfer of value and
(ii) immediately notify and provide a copy of such documentation to Horizon.

(c) Notwithstanding any other term or condition of this Agreement, neither Party
shall be required to participate in, fund or support any sales or marketing
activities that, in such Party’s judgment, would conflict with or be
inconsistent with such Party’s own Compliance Materials. Notwithstanding
anything herein to the contrary, Mallinckrodt shall not be obligated to use
Promotional Materials that, in its judgment, conflict with or are inconsistent
with its own Compliance Materials.

5.4 Communications with Regulatory Authorities.

Except to the extent set forth in this Section 5.4, all communications with
Government Authorities concerning the Product shall be the sole responsibility
of Horizon. Mallinckrodt shall not, without the consent of Horizon, correspond
or communicate with the FDA or with any other Governmental Authority, whether
within the Territory or otherwise, concerning the Product, or otherwise take any
action concerning any Regulatory Approval under which the Product is sold;
provided that, Mallinckrodt shall have the right to do so (i) if it believes in
good faith that it is necessary to do so to comply with the terms of this
Agreement or any Legal

 

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Requirement, or (ii) at the request of a Governmental Authority (provided that,
where practicable, it shall have requested that such Governmental Authority
communicate with Horizon instead), and in either such case ((i) or (ii)), to the
extent not prohibited by Legal Requirements and not prohibited by the
Governmental Authority, Mallinckrodt shall give Horizon notice […***…] of such
communication and, to the extent practicable, shall permit Horizon to take part
in any such communications and receive copies of all such communications.
Mallinckrodt shall, within […***…] days after receipt of any communication from
the FDA or from any other Governmental Authority relating to the Product, to the
extent not prohibited by Legal Requirements and not so prohibited by the FDA or
the applicable Governmental Authority, forward a copy of the same to Horizon and
reasonably respond to all inquiries by Horizon relating thereto. Mallinckrodt
shall comply with any and all reasonable direction of Horizon concerning any
meeting or written or oral communication with the FDA or any other Governmental
Authority relating to the Product, unless otherwise required by Legal
Requirements or otherwise requested by the FDA or the other Governmental
Authority.

5.5 Medical Inquiries.

(a) Horizon shall be solely responsible for all medical affairs activities
relating to the Product including medical information support and medical
communications and publishing activities, which activities shall be performed by
or on behalf of Horizon […***…]. The Parties acknowledge that Mallinckrodt may
receive requests for medical information concerning the Product from members of
the medical profession and consumers. Horizon shall have the exclusive right to
respond to questions and requests for information about the Product that are
received from such Persons that either (i) warrant a response beyond the
understanding of the Sales Representatives or (ii) are beyond the scope of the
FDA-approved Product labeling and package inserts (each such request, a “PIR”).
If PIRs are received by Mallinckrodt hereunder, the request will be referred to
Horizon’s medical information department or an appointed Third Party vendor to
which Horizon has instructed Mallinckrodt in writing to refer PIRs, within
[…***…] days after PIRs are received by a Sales Representative or other employee
or contractor of Mallinckrodt.

 

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(b) Within […***…] days after the Effective Date hereof, the Parties will enter
into a mutually agreeable safety data exchange agreement, that is consistent in
all respect with the terms hereof. In the event of any conflict or inconsistency
between the terms of this Agreement and such safety data exchange agreement,
this Agreement shall prevail in every case.

5.6 Product Complaints

Mallinckrodt shall refer any Product Complaints which it receives to Horizon
within […***…] days of its receipt thereof. Mallinckrodt shall not take any
other action in respect of any such Product Complaint without the consent of
Horizon unless otherwise required by applicable Legal Requirements, and in such
case will immediately notify Horizon of the nature of any such action taken, if
legally possible under the circumstances. At Horizon’s request, Mallinckrodt
will reasonably cooperate with Horizon to resolve any Product Complaints and
[…***…]. All Product Complaints shall be directed to the attention of those
individuals and at the locations and numbers specified in any pharmacovigilance
agreement to be entered into between the parties in accordance with
Section 5.7(d) below. Horizon shall provide Mallinckrodt with a summary of all
Product Complaints received, directly or indirectly, by Horizon no less than
[…***…] per […***…].

5.7 Adverse Drug Experience Reports.

(a) Mallinckrodt shall notify Horizon: (i) of all Serious Adverse Drug
Experiences within twenty four (24) hours of the time such Serious Adverse Drug
Experiences become known to Mallinckrodt (including its Sales Representatives or
other employees) and (ii) of all Adverse Drug Experiences that are not Serious
Adverse Drug Experiences within […***…] days of the time such Adverse Drug
Experiences become known to Mallinckrodt (including its Sales Representatives or
other employees).

(b) Except as may otherwise be required by Legal Requirements, (i) Mallinckrodt
shall not disclose any information concerning any Adverse Drug Experience or
Serious Adverse Drug Experience to any Person or Governmental Authority without
the prior written consent of

 

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Horizon, and (ii) Horizon shall determine, in its sole discretion, whether any
Product Complaint, Adverse Drug Experience or Serious Adverse Drug Experience
must be reported to the FDA or any other Governmental Authority.

(c) All follow-up investigations concerning any Adverse Drug Experience and/or
Serious Adverse Drug Experience shall be conducted by Horizon or its appointed
Third Party vendor to which Horizon has delegated such authority. At Horizon’s
request, Mallinckrodt shall provide all reasonable cooperation with any such
follow-up investigation, and Horizon shall reimburse Mallinckrodt for its
reasonable, out-of-pocket expenses for such cooperation.

(d) Within […***…] days after the Effective Date, the Parties will enter into a
separate and more detailed pharmacovigilance agreement, consistent with the
terms of this Agreement (which the Parties may agree to combine with the safety
data exchange agreement contemplated by Section 5.5(b) into one agreement). In
the event of any conflict or inconsistency between the terms of this Agreement
and such pharmacovigilance agreement, this Agreement shall prevail in every
case. Horizon shall maintain, at its sole expense, the global safety database
relating to the Product, and shall be responsible for complying with all
reporting and other applicable Legal Requirements related thereto.

5.8 Recalls or Other Corrective Action.

Horizon shall have sole responsibility for and shall make all decisions with
respect to any recall (including recall of packaging and Promotional Materials),
market withdrawals or any other corrective action related to the Product.
Horizon shall promptly consult with Mallinckrodt with respect to any such
actions proposed to be taken by Horizon in the Territory (and in all events
reasonably in advance of the taking of such actions), including all such actions
that are reasonably likely to result in a […***…] on the Promotion of the
Product in the Territory. At Horizon’s request, Mallinckrodt shall provide
reasonable assistance to Horizon in conducting such recall, market withdrawal,
or other corrective action (including retrieving Product samples distributed by
Mallinckrodt’s Sales Representatives to healthcare providers), and […***…].

 

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ARTICLE VI

SALE, SUPPLY AND PRICING OF PRODUCTS AND OTHER COVENANTS

6.1 Manufacturing Obligations.

In accordance with the provisions of this Agreement and all applicable Legal
Requirements, Horizon shall, at its cost and expense, use […***…] efforts to
perform or cause to be performed all manufacture, labeling, packaging,
warehousing, distribution and return, order entry, invoicing payment processing,
customer services and all other activities required to supply and distribute the
Product in the Territory as necessary or appropriate to enable Mallinckrodt to
perform its obligations and to secure its rights under or as contemplated by
this Agreement. Horizon shall use […***…] efforts to ensure timely supply of the
Product to customers and Product samples ordered by Mallinckrodt in accordance
with Section 6.3. In the event that, for any period of time during the Term,
there is a shortage of or a failure to supply Product in a quantity sufficient
timely to meet existing or forecasted orders for the Product, Horizon shall
(i) immediately notify Mallinckrodt in writing of the nature of any such event,
its expected duration, and the percentage of normal trade demand for the Product
affected by any such event and (ii) shall use […***…] efforts to rectify any
such failure to supply or shortage as soon as possible.

6.2 Product Sales and Pricing.

Horizon or its Affiliates shall book all sales of the Product in the Territory
and shall be responsible for entering into any contracts and other arrangements
with any Person regarding the sale of the Product. Horizon shall have the
exclusive right to establish the pricing of the Product and approve the form,
content and terms and conditions of contracts and other arrangements, including
any discount, allowance, rebate, chargeback, or other term granted therein.

 

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6.3 Product Samples.

Horizon shall provide or cause to be provided to Mallinckrodt, as ordered by
Mallinckrodt hereunder, samples of the Product that are not for sale and are
distributed with no fee, to be distributed by Mallinckrodt solely in connection
with the performance of Details to healthcare providers in accordance with this
Agreement. Mallinckrodt shall place written purchase orders for samples of the
Product with Horizon at least […***…] days in advance of the required date of
delivery. Samples of the Product shall be provided […***…] by Horizon to
Mallinckrodt at […***…] for the manufacture, packaging, labeling and shipping of
such samples […***…] herein below. At least […***…] days before the beginning of
each […***…] hereunder (or within […***…] days after the Effective Date with
respect to the first […***…]), Mallinckrodt shall provide Horizon, […***…], with
a […***…] month […***…] forecast of Mallinckrodt’s anticipated need for samples
of the Product during the next […***…] Agreement Quarters (“Mallinckrodt
Forecast”), which Mallinckrodt Forecast shall […***…] but shall set forth in
good faith and based on all known factors Mallinckrodt’s best estimate of its
Product sample needs during the forecasted period. Unless Horizon consents,
Mallinckrodt shall not order for delivery in any Agreement Quarter a quantity of
samples in excess of the estimate for such Agreement Quarter as set forth in the
most recent Mallinckrodt Forecast. Within […***…] days after an order for
Product samples is received by Horizon, Horizon shall be deemed to have accepted
such sample order, provided that such sample order complies with the ordering
requirements of this Section 6.3. Horizon shall deliver all samples of Product
ordered by Mallinckrodt to Mallinckrodt by the required delivery date specified
in each sample order. Mallinckrodt shall be responsible for distributing the
samples of Product to its Sales Representatives in a timely manner. Horizon
shall invoice Mallinckrodt, at the time of shipment, for each shipment of
samples at the applicable price consistent with this Section 6.3(a) and payment
by Mallinckrodt to Horizon shall be due to Horizon within […***…] days after the
invoice date. Upon its receipt of samples, Mallinckrodt shall be solely
responsible for accountability and compliance under the PDMA with respect to its
Sales Representatives, and under other applicable Legal Requirements relating to
the distribution of such samples by its Sales Representatives. Mallinckrodt will
track all

 

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Product samples supplied to Mallinckrodt in a manner sufficient to allow Horizon
to comply with Sections 6002 and 6004 of the Patient Protection and Affordable
Care Act (“PPACA”) and their implementing regulations that have been issued
prior to the Effective Date and that are issued after the Effective Date.
Mallinckrodt shall also be responsible for securing the return and appropriate
disposal of and reconciling existing sample inventories from discontinued
Mallinckrodt Sales Representatives and from all Mallinckrodt Sales
Representatives upon the expiration or termination of this Agreement in its
entirety. Each Party shall be responsible for reporting directly to the FDA any
known thefts or significant losses of Product samples in their possession, as
the same is required by the then applicable FDA regulations, and Mallinckrodt
shall promptly provide to Horizon a complete copy of any such report concerning
Product.

6.4 […***…] on Purchase of Promotional Materials and Samples.

[…***…], Mallinckrodt shall not be required, with respect to the […***…], (i) to
[…***…] and (ii) to […***…], unless and to the extent the […***…] and billed to
Mallinckrodt for […***…], with respect to both (i) and (ii) considered in the
aggregate, is […***…]; i.e., the […***…] of […***…] and […***…] purchased by
Mallinckrodt in each of the […***…] will be […***…].

6.5 Restriction on Commercialization.

(a) For the duration of the Term and for a period of one hundred eighty
(180) days after the expiration or termination hereof, Mallinckrodt and its
Affiliates shall not, directly or indirectly, commercialize or have
commercialized in the Territory any oral solid NSAID prescription dosage
pharmaceutical product containing a gastro-protective agent and with an
indication only for the treatment of the signs and symptoms of rheumatoid
arthritis and

 

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osteoarthritis (“NSAID Product”), provided that the foregoing covenant is
subject to the exceptions and limitations set forth in Section 6.5(b),
immediately below.

(b) Notwithstanding the covenant set forth above in Section 6.5(a), neither
Mallinckrodt nor any Affiliate of Mallinckrodt shall be prohibited from:

(i) acquiring any securities required to be registered under the Securities
Exchange Act of 1934, as amended, of any Person to the extent such acquisitions
do not result in Mallinckrodt or any Affiliate owning in the aggregate more than
[…***…] percent ([…***…]%) of all issued and outstanding capital stock of such
Person, or

(ii) acquiring (through merger, stock purchase, purchase of assets or otherwise)
ownership of, or any equity interest in, any Person if the combined annual
revenues of such Person and its subsidiaries derived from the sale of any one or
more NSAID Products do not exceed […***…] percent ([…***…]%) of the combined
total annual revenues of such Person and its subsidiaries for the most recent
full fiscal year then ended, or

(iii) engaging in the marketing and sale of any pharmaceutical product other
than an NSAID Product, as defined herein, or

(iv) engaging in any type of pharmaceutical drug product development activities
or in the manufacture of any pharmaceutical drug product, whether or not it is
an NSAID Product, as defined herein.

6.6 Restriction on Grant of Co-Promotion Rights for Exclusive Targets to Third
Parties.

Neither Horizon nor any of its Affiliates will, during the Term hereof, grant to
any Third Party any right to co-promote the Product to Exclusive Targets in the
Territory; provided that the Parties acknowledge and agree that Horizon has
entered into an agreement with a Third Party prior to the Effective Date for
such Third Party to provide promotional services to Horizon with respect to the
Product, and performance of such services (including such Third Party’s
promotion

 

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of the Product to Exclusive Targets in the Territory) shall not be restricted by
this Agreement or be considered a breach of this Agreement by Horizon; provided
that, it is further understood that such existing agreement of Horizon with such
Third Party shall have no effect on the Mallinckrodt Call List or Mallinckrodt’s
rights hereunder to be paid for prescriptions filled with respect to Exclusive
Targets as contemplated pursuant to Section 7.1(a) below. In the event that
either Horizon or its Affiliates are, at any time during the Term, in breach of
the covenant set forth in the immediately preceding sentence, Mallinckrodt shall
have the right, effective immediately upon notice to Horizon, to terminate this
Agreement in its entirety, subject to the consequences of such termination as
set forth in Section 8.3.

ARTICLE VII

COMPENSATION FOR CO-PROMOTION

7.1 Co-promotion Fee.

(a) In consideration of the performance by Mallinckrodt of its obligations
hereunder and in addition to any consideration to which Mallinckrodt is entitled
under Section 7.2 below, Horizon shall pay to Mallinckrodt a Co-promotion Fee in
an amount payable for any given Agreement Quarter equal to […***…] for each
[…***…] Exclusive Targets and […***…] during such Agreement Quarter (regardless
of whether or not such Exclusive Targets have been Detailed by Mallinckrodt or
by Horizon (or anyone else on Horizon’s behalf), or by both, as such amount may
be adjusted pursuant to Section 7.1(c) below; provided that, each […***…] will
be calculated at an assumed […***…] of […***…] for the purpose of calculating
the Co-promotion Fee hereunder (for example, a […***…] and another one for
[…***…] would not count as […***…] but as […***…]). The number of […***…] for
any given Agreement Quarter shall be determined from (i) available data
generated by […***…] for any such Agreement Quarter and (ii) from a written
report to be delivered by Horizon to Mallinckrodt, within […***…] days after the
end of each […***…] during the Term, setting forth a calculation of the […***…]
during the […***…] for which the report is submitted, indicating the respective

 

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number of […***…] with respect to Exclusive Targets during such […***…],
accompanied by such supporting documentation as may be necessary to support the
calculation (for any given […***…], a “[…***…] Report”).

(b) The Co-promotion Fee for any given Agreement Quarter shall be paid by
Horizon to Mallinckrodt within […***…] days after the end of the Agreement
Quarter to which such payment is applicable, in United States dollars, and to an
account and in a manner reasonably agreed upon by the Parties. Payment of the
Co-promotion Fee for a given Agreement Quarter shall be accompanied by a written
statement from Horizon, setting forth the calculation of the Co-promotion Fee
payable to Mallinckrodt for such Agreement Quarter, consistent with the
applicable provisions of Section 7.1(a) and all relevant terms defined in
Article 1 above and such other information and supporting documentation as may
be required to support the calculation and agreed upon in writing by the Parties
(for any given Agreement Quarter, a “Payment Report”).

(c) In the event that, at any time during the Term and each time it occurs,
Horizon makes a price increase or decrease with respect to the Product, it shall
notify Mallinckrodt in writing of the amount thereof and its effective date and,
from and after the effective date of any such changed price for the Product, the
[…***…] shall be […***…] from the then current amount by […***…]. Further, if
any increase or decrease in the price of the Product becomes effective on a
[…***…] of any Agreement Quarter, the amount of the […***…] with respect to such
Agreement Quarter shall be […***…] accordingly.

7.2 Residual Fee.

(a) In addition to the Co-promotion Fees payable to Mallinckrodt in accordance
with Section 7.1 set forth immediately above, subject to the provisions of this
Section 7.2 and subject to the provisions of Section 8.3 below, Horizon shall
pay to Mallinckrodt a fee (“Residual Fee”) in an amount equal to (i) […***…]
Percent ([…***…]%) of the Co-promotion Fees that were payable to Mallinckrodt
with respect to the last […***…] elapsing prior to the

 

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expiration or termination of this Agreement (including the […***…] in which such
expiration or termination occurred) or (ii) if any expiration of termination
hereof does not coincide with the end of any full […***…], then in an amount
equal to the sum of (x) […***…] Percent ([…***…]%) of the Co-promotion Fees that
were payable to Mallinckrodt for the last […***…] prior to termination or
expiration immediately prior to, and not including, the […***…] in which such
expiration or termination occurred and (y) […***…] Percent ([…***…]%) of the
amount of any Co-promotion Fee that was payable to Mallinckrodt for the […***…]
in which any termination or expiration occurs, such amount multiplied by a
fraction, the numerator of which is the number of […***…] that would have been
in such […***…] absent termination or expiration and the denominator which is
the number of […***…] that elapsed in such […***…] prior to and including the
effective date of termination or expiration. The period for measurement of any
Residual Fee as set forth in clause (i) or clause (ii) of the immediately
preceding sentence, or as it may be altered under the circumstances described in
Section 7.2(c) below, shall be referred to herein as the “Residual Measurement
Period.”

(b) In the event this Agreement is terminated in its entirety prior to the
elapse of […***…], the Residual Fee payable to Mallinckrodt hereunder shall be
calculated with reference to the number of […***…] that have occurred from the
Effective Date through the effective date of termination hereof and with
reference to the Co-promotion Fees payable to Mallinckrodt during that shortened
period of time, which shortened period of time shall, if it occurs because of
the timing of any early termination hereof, be considered an appropriate
Residual Measurement Period for calculation of any Residual Fee due Mallinckrodt
hereunder.

(c) Notwithstanding any of the preceding provisions of this Section 7.2 or any
other provisions of this Agreement to the contrary, should it be determined that
Mallinckrodt has taken any actions that are in violation of the covenant set
forth in Section 6.5 or if this Agreement is terminated by Horizon (i) pursuant
to Section 4.2(b) or 8.2(h) or (ii) pursuant to Section 4.4(a) with respect to
failure to achieve the Quarterly Minimum Prescription Level for any two
(2) consecutive Agreement Quarters during the period of time commencing on
October 1, 2012 and ending on September 30, 2013, then Horizon shall not be
liable to pay to Mallinckrodt the

 

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Residual Fee that would otherwise be payable to Mallinckrodt in accordance with
this Section 7.2.

(d) The Residual Fee shall be paid by Horizon to Mallinckrodt […***…].

7.3 Maintenance of Records and Audit Rights.

(a) Horizon shall maintain, for a period of […***…] years after the calendar
year to which they pertain and for such additional period as specified by any
applicable Legal Requirements, such books and records of Horizon (or anyone
functioning on Horizon’s behalf) that relate in any manner to (i) Horizon’s
payment and calculation hereunder of any Co-promotion Fees and Residual Fee to
Mallinckrodt hereunder, including (without limitation) all books and records
related to the […***…] with respect to Exclusive Targets for all applicable
periods and all supporting documents with respect to any Payment Report and
[…***…] Report and, (ii) the amounts invoiced by Horizon to Mallinckrodt for
Product samples and Promotional Materials and all records demonstrating the
Direct Cost to Horizon for the same, all items referred to in clauses (i) and
(ii) of this sentence, Horizon’s “Relevant Records”. Horizon shall ensure that
its Relevant Records (including those in the possession of any Third Party
acting on behalf of Horizon, to the extent it is possible with exercise of
commercially reasonable efforts by Horizon) are complete and accurate,
reflecting fairly the transactions they record and are maintained in accordance
with Horizon’s accounting practices, consistently applied.

(b) Mallinckrodt shall have the right, upon reasonable prior written notice, no
more than […***…] in any calendar year, during Horizon’s regular business hours
and through the use of an independent accounting firm or other appropriate Third
Party expert (“Auditor”) acceptable to Horizon (which acceptance shall not
unreasonably be withheld or delayed), to review, examine and audit the Relevant
Records of Horizon (including those in possession of any Third Party

 

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acting on behalf of Horizon to the extent, through the exercise of commercially
reasonable efforts by Horizon, such records can be made available for audit,
review or examination) pertaining to no more than the […***…] years immediately
preceding the date of such notice for the sole purposes of (i) verifying the
accuracy of calculation and payment by Horizon of any Co-promotion Fees (in
particular, as reflected on any Payment Report) or the Residual Fee that may be
due to Mallinckrodt hereunder with respect to such period and (ii) verifying the
accuracy of Direct Costs invoiced by Horizon to Mallinckrodt for Product samples
and Promotional Materials during such period. Mallinckrodt shall not audit any
one period of time with respect to any subject of audit on more than one
occasion. Mallinckrodt shall pay the fees and expenses of the Auditor associated
with any review, examination or audit, except that Horizon shall pay any such
fees and expenses allocable to a particular subject being audited for any
particular period if, with respect thereto, the audit discloses, and it is
finally determined in accordance herewith that, an amount due or charged to
Mallinckrodt is more than […***…] percent ([…***…]%) in error and in Horizon’s
favor. In the event the Auditor concludes, with respect to any given period of
time, that additional payments were owed to Mallinckrodt or excess charges were
invoiced to Mallinckrodt, the Auditor shall deliver to both Parties a written
report setting forth its conclusions in detail and accompanied by all necessary
supporting documentation. In the event that, within […***…] days after its
receipt of any Auditor’s report, Horizon fails to object to the conclusions and
details set forth in such report by delivering a written notice to Mallinckrodt
of its specific objections to such report, the conclusions set forth in the
Auditor’s report shall be deemed final and binding on both Parties and
determinative of their obligations hereunder, and if any additional payment or
refunds are required to be made to Mallinckrodt such amounts shall be paid by
Horizon no later than […***…] days after the receipt by Horizon of the Auditor’s
report, […***…], as appropriate, or if any overpayment was made to Mallinckrodt
or additional charges should have been invoiced to Mallinckrodt, Mallinckrodt
shall pay Horizon the amount of such overpayment or undercharges no later than
[…***…] days after the receipt by Horizon of the Auditor’s report. If, on the
other hand, Horizon, within […***…] days of its receipt of any Auditor’s report,
gives written notice to Mallinckrodt and in detail of its good faith dispute
concerning one

 

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or more of the conclusions set forth in the Auditor’s report, then Horizon may
withhold payment or refund to Mallinckrodt of any amounts with respect to which
it has timely objected in good faith, but shall promptly pay or refund any
amounts to which it has not so objected and therefore are not in dispute. If
Horizon has timely provided notice to Mallinckrodt of dispute as to one or more
items in the Auditor’s report, the Parties shall thereafter, for a period of no
more than […***…] days after Mallinckrodt’s receipt of any written objections
from Horizon, and in good faith, attempt to resolve any such disputes and, if
they are unable to do so with respect to any one or more matters in dispute,
then the matter(s) will be referred for final resolution to Third Party
accounting firms and/or other experts (as appropriate to the dispute) selected
by mutual agreement of the Parties, the written decision of which firms or
experts will be final and binding upon the Parties and the fees and expenses of
which firms or experts shall be paid as shall be reasonably directed in the
final written decision submitted by such firms and experts.

ARTICLE VIII

TERM AND TERMINATION

8.1 Term.

The term of this Agreement shall commence on the Effective Date and shall end on
and as of the close of business on December 31, 2014, unless extended or unless
earlier terminated as otherwise set forth herein (“Term”). The Term shall be
automatically renewed for additional and successive six (6) calendar month
periods (i.e., for additional periods spanning two (2) consecutive Agreement
Quarters), unless either Party provides to the other Party, at least […***…]
days prior to the end of the initial Term or any renewal Term, as applicable,
written notice of its intention that this Agreement not be renewed for any
additional period of time.

8.2 Rights of Termination.

(a) Mallinckrodt shall have the right to terminate this Agreement in its
entirety, pursuant and subject to the applicable provisions of Section 4.3,
4.4(b) or 6.6 above.

 

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(b) Horizon shall have the right to terminate this Agreement in its entirety,
pursuant and subject to the applicable provisions of Section 4.2(b) or 4.4(a)
above.

(c) Either Party shall have the right to terminate this Agreement in its
entirety, pursuant and subject to the applicable provisions of Section 4.4(a)
above or Section 13.3 below.

(d) Either Party shall have the right to terminate this Agreement in its
entirety effective immediately upon written notice to the other Party (setting
forth with particularity the reasons for termination) in the event any
Governmental Authority takes any action or makes any objection, order, demand or
directive that prevents either or both of the terminating Party or the other
Party from performing its or their obligations hereunder in all material
respects, or that makes or might make performance hereunder by either Party in
violation of Legal Requirements, or that raises a reasonable apprehension in the
terminating Party that continued performance of any one or more of its
obligations hereunder might subject such Party to any penalty, claim,
investigation or other action by any Governmental Authority or any Person acting
on behalf of any Governmental Authority.

(e) Either Party shall have the right to terminate this Agreement in its
entirety effective immediately upon written notice to the other Party (setting
forth with particularity the reasons for termination) if a Third Party either
(i) asserts in writing that the using, making, having made, selling, marketing
or offering for sale of the Product infringes an issued United States patent
owned or controlled by such Third Party and such other Party’s counsel has not,
within […***…] days after receipt by either Party of any such assertion by the
Third Party, provided in writing an unqualified opinion that the assertions of
infringement are without merit or (ii) files a lawsuit or other action alleging
that the using, making, having made, selling, marketing or offering for sale of
the Product infringes an issued United States patent owned or controlled by such
Third Party.

(f) Either Party shall have the right to terminate this Agreement in its
entirety effective upon […***…] days prior written notice to the other Party in
the event either the other Party or the terminating Party has been subject to a
Change of Control; provided that, neither Party shall have the right to
terminate this Agreement as a consequence of the public spin-off of

 

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Mallinckrodt and its Affiliates from Covidien plc, as publicly announced by
Covidien plc (Mallinckrodt’s ultimate parent entity) in December 2011.

(g) Mallinckrodt shall have the right to terminate this Agreement in its
entirety effective upon […***…] days prior written notice to Horizon from and
after the date on which any Third Party commercially launches in the Territory a
generic product that is AB-rated to the Product.

(h) In addition to any other rights of termination that are specifically
enumerated or referenced in this Section 8.2, this Agreement may be terminated
in its entirety by either Party effective upon notice (i) by reason of a
material breach of this Agreement (other than as provided in clauses (ii) or
(iii) below) if the breaching Party fails to remedy such breach within […***…]
days after written notice thereof by the non-breaching Party, (ii) if the
breaching Party fails to make any payments of any kind as and when due hereunder
and such failure is not remedied within […***…] days after written notice
thereof by the nonbreaching party (unless and to the extent there exists a good
faith dispute as to the amount of any such payment due), or (iii) upon the
bankruptcy, insolvency, dissolution or winding up of the other Party, except, in
the case of a petition relative to any of the immediately foregoing filed
involuntarily against a Party if such petition is dismissed within […***…] days
of the date of its filing. Notwithstanding Section 8.2(h)(i) and (ii), a Party
shall not be deemed to be in breach hereof if any acts or omissions to act that
would otherwise constitute a breach hereunder are the subject of a good faith
dispute that is subject to resolution in accordance with internal procedures
established herein unless and until such internal procedures have been fully
exhausted.

8.3 Consequences of Termination or Expiration.

(a) In the event this Agreement is terminated in its entirety by either Party or
by the mutual written agreement of both Parties or this Agreement expires, at
least the following shall be the consequences of any such termination or
expiration:

 

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(i) Mallinckrodt shall end, and shall take all necessary steps to ensure that
its Affiliates and all Third Parties acting hereunder on its behalf end, all
Promotional activities hereunder with respect to the Product on and as of the
effective date of termination or expiration or on such earlier date as the
Parties shall agree, and control of all Promotional activities with respect to
the Products will revert exclusively to Horizon,

(ii) Mallinckrodt shall return, and shall take all necessary steps to ensure
that its Affiliates and all Third Parties acting hereunder on its behalf return,
to Horizon or its designee all undistributed Product samples and undistributed
Promotional Materials, and each Party shall return to the other Party copies of
all Compliance Materials of the other Party and all embodiments of any
Proprietary and Confidential Information of the other Party,

(iii) the JMC shall cease operation and be disbanded on and as of the effective
date of any termination or expiration,

(iv) Horizon shall purchase from Mallinckrodt all of its undistributed and
returned inventory of Product samples and Promotional Materials relative to the
Product, at Mallinckrodt’s actual cost of acquisition hereunder for such
inventories from Horizon, taking into account the effect of the provisions of
Section 6.4 hereof,

(v) Mallinckrodt shall, subject to and in accordance with the applicable
provisions of Section 7.2, remain eligible to receive payment from Horizon of
the Residual Fee after any expiration or termination of this Agreement, except
in the case of termination of this Agreement by Horizon pursuant to
Section 4.2(b), the penultimate sentence of Section 4.4(a) or Section 8.2(h), or
if it is determined that Mallinckrodt has taken any actions that are in
violation of the covenant set forth in Section 6.5, and

(vi) no termination or expiration of this Agreement shall affect any
obligations, including (but not limited to) any obligations of payment, by one
Party to the other Party that have accrued prior to the effective date of
termination or expiration or

 

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that may accrue through the exercise by Mallinckrodt of its rights under
Section 7.3(b) at any time after such effective date of termination or
expiration.

(b) In addition to the consequences of termination enumerated above in
Section 8.3(a), as they may be applicable, the Parties will, in good faith and
in the event of any termination of this Agreement, take such additional actions
as may be necessary to conclude any relevant business and matters hereunder in a
manner that is consistent with the intent and business objectives of both
Parties as reflected by the terms and conditions hereof.

(c) In the event of any termination of this Agreement and except as may
otherwise specifically be provided herein, no termination fee, liquidated
damages or penalty of any kind shall be owed by either Party to the other Party
solely by virtue of the exercise of any right of termination.

(d) Upon expiration or termination of this Agreement, all rights and obligations
of the Parties under this Agreement shall terminate, except that the following
provisions shall survive the termination or expiration hereof: Sections 2.3,
4.6(d) (for a period of one (1) year after the date of such expiration or
termination), 4.7(e), 6.5 (for a period of one hundred eighty (180) days
following expiration or termination), 7.1 (until all payment obligations
thereunder have been settled), 7.2 (until all payment obligations thereunder
have been settled), 7.3 (for the period after the date of such expiration or
termination specified therein), 8.3 and 9.4 and Articles I (for interpretational
purposes), XI (for the period after the date of such expiration or termination
specified therein), XII and XIII. Neither expiration nor termination of this
Agreement shall relieve either party of any obligation accruing prior to such
expiration or termination.

ARTICLE IX

REPRESENTATIONS AND WARRANTIES

9.1 Representations and Warranties of Mallinckrodt.

Mallinckrodt hereby represents and warrants to Horizon as of the Effective Date,
and covenants to Horizon, as follows:

 

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(i) Organization. Mallinckrodt is a limited liability company duly organized,
validly existing and in good standing under the laws of the state of Delaware,
and has all necessary corporate power and corporate authority to own its
properties and to conduct its business as currently conducted.

(ii) Authorization. The execution, delivery and performance of this Agreement
are within the corporate power of Mallinckrodt and have been duly authorized by
all necessary corporate action, and this Agreement has been duly authorized,
executed and delivered by Mallinckrodt.

(iii) No Conflict. Where it would have any adverse effect on the consummation of
the transactions contemplated herein or on the performance by Mallinckrodt of
its obligations hereunder, the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby do not (w) conflict with or
result in a breach of any provision of Mallinckrodt’s organizational documents,
(x) result in a material breach of any material agreement to which Mallinckrodt
is party, (y) require Mallinckrodt to obtain any material approval or consent
from any Governmental Authority or Third Party other than those consents and
approvals which have been obtained prior to the date hereof or (z) violate any
Legal Requirement applicable to Mallinckrodt.

(iv) Enforceability. This Agreement constitutes the valid and binding obligation
of Mallinckrodt, enforceable against Mallinckrodt in accordance with its terms,
subject to bankruptcy, reorganization, insolvency and other similar laws
affecting the enforcement of creditors’ rights in general and to general
principles of equity (regardless of whether considered in a proceeding in equity
or an action at law).

(v) Litigation. There is no litigation, arbitration proceeding, governmental
investigation, action or claims of any kind pending or, to the knowledge of
Mallinckrodt, threatened, by or against Mallinckrodt or any of its Affiliates
that would reasonably be expected materially to affect Mallinckrodt’s ability to
perform its obligations hereunder.

 

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(vi) Generic Drug Act. Pursuant to the Generic Drug Act,

(x) none of Mallinckrodt, its Affiliates, or, to the knowledge of Mallinckrodt,
any Person under its direction or control is currently debarred by the FDA under
the Generic Drug Act,

(y) none of Mallinckrodt, its Affiliates, or, to the knowledge of Mallinckrodt,
any Person under its direction or control is currently using or will use in any
capacity any Person that is debarred by FDA under the Generic Drug Act, and

(z) there have been no convictions of Mallinckrodt, its Affiliates, or to the
knowledge of Mallinckrodt, any Person under its direction or control for any of
the types of crimes set forth in the Generic Drug Act within the five (5) years
prior to the Effective Date.

(vii) Legal Requirements. None of Mallinckrodt, it Affiliates, or, to the
knowledge of Mallinckrodt, any Person under its direction or control is
currently or has been excluded from a federal or state health care program under
Section 1128 or 1156 of the Social Security Act, 42 U.S.C. §§ 1320a-7, 1320c-5
as amended or supplemented. None of Mallinckrodt, its Affiliates, or, to the
knowledge of Mallinckrodt, any Person under its direction or control is
otherwise currently excluded or has otherwise been excluded from contracting
with the federal government. None of Mallinckrodt, its Affiliates, or, to the
knowledge of Mallinckrodt, any Person under its direction or control is
otherwise currently or has otherwise been excluded, suspended, or debarred from
any federal or state program. Mallinckrodt shall immediately notify Horizon if,
at any time during the Term, (x) Mallinckrodt or its Affiliates is convicted of
an offense that would subject Mallinckrodt to exclusion, suspension or debarment
from any federal or state program, or (y) Mallinckrodt becomes aware that any
Person under the direction or control of Mallinckrodt or its Affiliates is
convicted of an offense that would subject Mallinckrodt to exclusion, suspension
or debarment from any federal or state program, or

 

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(z) Mallinckrodt is, or is notified by any relevant Governmental Authority that
it will be, excluded, suspended or debarred from any federal or state program.
The occurrence of any of (x), (y), or (z) shall constitute a material breach of
this Agreement.

9.2 Representations and Warranties of Horizon.

Horizon hereby represents and warrants to Mallinckrodt as of the Effective Date,
and covenants to Mallinckrodt, as follows:

(i) Organization. Horizon is a corporation duly organized, validly existing and
in good standing under the laws of the state of Delaware, and has all necessary
corporate power and corporate authority to own its properties and to conduct its
business, as currently conducted.

(ii) Authorization. The execution, delivery and performance of this Agreement
are within the corporate power of Horizon and have been duly authorized by all
necessary corporate action, and this Agreement has been duly authorized,
executed and delivered by Horizon.

(iii) No Conflict. Where it would have any adverse effect on the consummation of
the transaction contemplated herein or on the performance by Horizon of its
obligations hereunder, the execution of this Agreement and the consummation of
the transactions contemplated hereby do not (A) conflict with or result in a
breach of any provision of Horizon’s organizational documents, (B) result in a
material breach of any material agreement to which Horizon is party, (C) require
Horizon to obtain any material approval or consent from any Governmental
Authority or Third Party other than those consents which have been obtain prior
to the date hereof or (D) violate any Legal Requirements applicable to Horizon.

(iv) Enforceability. This Agreement constitutes the valid and binding obligation
of Horizon, enforceable against Horizon in accordance with its terms, subject to
bankruptcy reorganization, insolvency, and other similar laws affecting the

 

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enforcement of creditors’ rights in general and to general principles of equity
(regardless of whether considered in a proceeding in equity or an action at
law).

(v) Intellectual Property. To the knowledge of Horizon, the manufacture of the
Product and the Promotion, offer for sale and sale of the Product in the
Territory in accordance with this Agreement does not and will not infringe any
issued patents, trademarks or other intellectual property rights of any Third
Party in the Territory. Horizon has not received any actual or threatened claim
or demand from any Third Party alleging that any infringement, violation or
misappropriation of such Third Party’s intellectual property rights has occurred
as a result of or in connection with the manufacture, use, offer for sale, sale
or importation of the Product in the Territory. Except with respect to the
matters described in the SEC Reports, (A) Horizon is not aware of any actual,
alleged or threatened infringement, violation or misappropriation by a Third
Party of any Horizon intellectual property rights covering the Product or its
manufacture, use, offer for sale or sale, and (B) Horizon has not received any
actual or threatened claim or demand from any Third Party alleging invalidity or
unenforceability of any patents or patent applications owned or otherwise
controlled by Horizon covering the Product or its manufacture, use or sale,
including any Paragraph IV notice received from a Third Party pursuant to the
Act (§ 505(j)(2)(B)), as amended by the Hatch-Waxman Amendments and the Medicare
Modernization Act, and FDA’s implementing regulations (21 C.F.R. § 314.95),
wherein an Abbreviated New Drug Application sponsor whose application contains a
Paragraph IV certification must send notice of such certification to the NDA
holder and patent owner (each, a “Paragraph IV Notice”).

(vi) Litigation. Except with respect to the matters described in the SEC
Reports, there is no litigation, arbitration proceeding, governmental
investigation, action or claims of any kind pending or, to the knowledge of
Horizon, threatened, by or against Horizon or any of its Affiliates that would
reasonably be expected materially to affect Horizon’s ability to perform its
obligations hereunder or Mallinckrodt’s performance of its obligations to
Promote the Product hereunder.

(vii) Generic Drug Act. Pursuant to the Generic Drug Act,

 

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(A) none of Horizon, its Affiliates, or, to the knowledge of Horizon, any Person
under its direction or control is currently debarred by the FDA under the
Generic Drug Act,

(B) none of Horizon, its Affiliates, or, to the knowledge of Horizon, any Person
under its direction or control is currently using or will use in any capacity in
connection with the Product any Person that is debarred by FDA under the Generic
Drug Act, and

(C) there have been no convictions of Horizon, its Affiliates, or, to the
knowledge of Horizon, any Person under its direction or control for any of the
types of crimes set forth in the Generic Drug Act within the five (5) years
prior to the Effective Date.

(viii) Legal Requirement. None of Horizon, its Affiliates, or, to the knowledge
of Horizon, any Person under its direction or control is currently excluded or
has been from a federal or state health care program under Sections 1128 or 1156
of the Social Security Act, 42 U.S.C. §§ 1320a-7, 1320c-5 as amended or
supplemented. None of Horizon, its Affiliates, or, to the knowledge of Horizon,
any Person under its direction or control is otherwise currently excluded or has
otherwise been excluded from contracting with the federal government. None of
Horizon, its Affiliates, or, to the knowledge of Horizon, any Person under its
direction or control is otherwise currently or has otherwise been excluded,
suspended or debarred from any federal or state program. Horizon shall
immediately notify Mallinckrodt if, at any time during the Term, (x) Horizon or
its Affiliates is convicted of an offense that would subject Horizon to
exclusion, suspension, or debarment from any federal or state program, or
(y) Horizon becomes aware that any Person under the direction or control of
Horizon or its Affiliates is convicted of an offense that would subject Horizon
to exclusion, suspension, or debarment from any federal or state program or
(z) Horizon is, or is notified by any relevant Government Authority that it will
be, excluded, suspended or debarred from any federal or state program.

 

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(ix) No Other Co-Promotion Rights. Except as referenced in Section 6.6 herein
above and for subcontractors performing marketing or promotional activities on
behalf of Horizon that are not in person and face-to-face, none of Horizon or
its Affiliates has, on and as of the Effective Date hereof, entered into nor is
there currently in effect any binding agreement or other arrangement between
Horizon or its Affiliates and any Third Party granting to such Third Party any
right to market or promote the Product to the Exclusive Targets in the
Territory.

(x) No Line Extensions. Horizon is not currently in the process of developing
nor does it have any present intention of developing or commercializing any
additional strength(s) or other line extension(s) of Product.

9.3 Product Sample Warranty.

Horizon warrants to Mallinckrodt that, at the time of delivery of all Product
samples to Mallinckrodt hereunder, (u) such Product samples will be in
conformity with the applicable specifications therefor and the Regulatory
Approval for the Product, (v) such Product samples will have been manufactured
in material compliance with cGMP and in compliance with all other applicable
Legal Requirements, (w) such Product samples will have been manufactured in
facilities that are in material compliance with all applicable Legal
Requirements at the time of such manufacture, (x) such Product samples will not
be adulterated or misbranded under the Act, (y) such Product samples may be
introduced into interstate commerce pursuant to the Act and (z) the expiration
date of such Product samples shall be no earlier than […***…] months after the
date of delivery thereof.

9.4 Horizon Disclaimer.

EXCEPT AS EXPRESSLY PROVIDED HEREIN, HORIZON DISCLAIMS ALL WARRANTIES, EXPRESS
OR IMPLIED, WITH REGARD TO THE PRODUCT OR OTHERWISE, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, ANY

 

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WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, AND ANY WARRANTY OF
NON-INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.

ARTICLE X

INTELLECTUAL PROPERTY MATTERS

10.1 Intellectual Property Prosecution and Maintenance.

Horizon shall, at its own expense, use commercially reasonable efforts to
prosecute and maintain, in the Territory, all Horizon intellectual property
owned by Horizon that is related to the Product or its manufacture, use,
marketing, offer for sale or sale in the Territory (including any patents, the
Horizon Trademarks and any copyrights associated with the Promotional
Materials). Horizon shall keep Mallinckrodt informed regarding material events
with respect to the ongoing prosecution and maintenance of Horizon patents, to
the extent they relate to the Product or its manufacture, use, marketing, offer
for sale or sale in the Territory.

10.2 Infringement.

(a) If either Party shall learn of a claim or assertion that the manufacture,
use, marketing, offer for sale or sale of the Product in the Territory infringes
or otherwise violates the intellectual property rights of any Third Party
(“Third Party Infringement Claim”), then the Party becoming so informed shall
promptly, but in all events within […***…] days thereof, notify the other Party
to this Agreement of the Third Party Infringement Claim. It shall be the sole
responsibility of Horizon to determine the nature of and direct any defense
against any such Third Party Infringement Claim with respect to the Product, at
Horizon’s sole cost and expense and at its election and discretion. In the event
any Third Party Infringement Claim is filed against Horizon with respect to the
Product, Mallinckrodt shall cooperate with Horizon in the defense of such action
at the reasonable cost and expense of Horizon if requested by Horizon.

(b) In the event of any infringement of Horizon’s patent or other intellectual
property rights related to the Product or the manufacture, use, marketing, offer
for sale or sale of such

 

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Product in the Territory, which infringement involves a product that could or
does compete with the Product and/or could adversely affect either or both of
the Parties’ interests under this Agreement with respect to the Product
(including a Paragraph IV Notice received as a result of an Abbreviated New Drug
Application filed by a Third Party for a generic version of the Product),
Horizon shall, in its sole discretion, determine whether or not and in what
manner to take appropriate legal action to redress such infringement (an
“Enforcement Action”). In the event any such Enforcement Action is initiated,
Horizon shall use commercially reasonable efforts to prosecute such matter and
Horizon shall keep Mallinckrodt promptly informed regarding such Enforcement
Action. At Horizon’s reasonable request, Mallinckrodt shall cooperate fully with
Horizon with respect to any such Enforcement Action, and Horizon shall reimburse
Mallinckrodt for its reasonable out-of-pocket costs and expenses incurred in
providing such cooperation. Any recovery received as a result of any Enforcement
Action shall belong to Horizon.

ARTICLE XI

CONFIDENTIALITY

11.1 Protection of Proprietary and Confidential Information.

(a) Except as may otherwise be provided in this Article XI, during the Term of
this Agreement and for a period of […***…] years thereafter (or longer as
required with respect to any Third Party information), each Recipient Party
receiving Proprietary and Confidential Information shall maintain in confidence
and use only for purposes specifically authorized under this Agreement all
Proprietary and Confidential Information of the Disclosing Party. In protecting
the Proprietary and Confidential Information of the Disclosing Party, the
Recipient Party shall use the same degree of care as it employs in protecting in
its own similar information, but in any event no less than a reasonable degree
of care.

(b) To the extent it is reasonably necessary or appropriate to fulfill its
obligations or exercise its rights under this Agreement, a Recipient Party may
disclose Proprietary and Confidential Information it is otherwise obligated
under this Section 11.1 not to disclose to its

 

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Affiliates, consultants, agents and representatives, only on a need-to-know
basis and only on condition that such Persons agree to keep the Proprietary and
Confidential Information confidential for the same time periods and to the same
extent as such Recipient Party and further agree to use such Proprietary and
Confidential Information only for purposes relevant to the performance by a
Recipient Party of its obligations under this Agreement. A Recipient Party shall
be fully responsible for any improper disclosure or use of Proprietary and
Confidential Information by its Affiliates, consultants, agents and
representatives.

(c) If a Recipient Party is required under applicable Legal Requirements to
disclose any Proprietary and Confidential Information of the Disclosing Party to
any Governmental Authority in connection with bona fide legal process, then the
Recipient Party may do so only if (i) it limits disclosure of the Proprietary
and Confidential Information only to that information required to be disclosed,
and (ii) it gives the Disclosing Party, if practicable and legal under the
circumstances, prompt written notice of any instance of such a requirement in
reasonable time for the Disclosing Party to attempt to object to or to limit
such disclosure, with the cooperation of the Recipient Party and at the
Disclosing Party’s cost and expense.

(d) The Parties have agreed upon the form and content of a press release(s) to
be issued promptly following the execution of this Agreement. Any publicity,
news release, public comment or other announcement, whether to the press, to
stockholders or otherwise relating to this Agreement, including activities
conducted hereunder, shall first be reviewed and approved by both Parties,
except no approval shall be required for such publicity, news release, public
comment or other public announcement which, in accordance with the advice of
legal counsel to the Party making such disclosure, is required by applicable
law, rule or regulation or for appropriate market disclosure. For clarity, any
Party making any announcement which is required by applicable law, rule or
regulation or for appropriate market disclosure will, unless prohibited by law,
give the other Party an opportunity to review the form and content of such
announcement and comment before it is made. The Parties shall work together to
coordinate filings with governmental agencies, including the United States
Securities and Exchange Commission, as to the contents and existence of this
Agreement in such manner as the Parties shall reasonably deem necessary or
appropriate, and each Party shall provide the other Party a

 

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reasonable opportunity to comment on any proposed filings, including redactions
proposed thereto.

(e) Except as and if compelled by applicable law, rule or regulation or as
provided in Section 11.(d) or this Section 11.1(e), each Party agrees not to
disclose any terms or conditions of this Agreement to any Third Party without
the prior consent of the other Party. Each Party may disclose the terms or
conditions of this Agreement to Third Parties in connection with due diligence
or similar investigations of such Party by such Third Parties, and disclosure to
potential Third Party investors in confidential financing documents, provided,
in each case, that any such Third Party shall be subject, in writing, to
obligations of confidentiality and non-use with respect to the information
disclosed to it at least as restrictive with respect to such information as the
provisions of this Agreement.

(f) The Parties hereto agree that remedies at law may be inadequate to protect a
party against any breach by the other Party (or any other Person acting in
concert with such other Party or on its behalf) of any of the provisions of this
Section 11.1. Accordingly, each Party shall be entitled to seek the granting of
injunctive relief or other equitable relief (or any similar remedy) from a court
of competent jurisdiction against any action that constitutes any breach of this
Section 11.1, in addition to any monetary damages or other similar relief to
which a party may be entitled, without the necessity of posting a bond or any
other form of financial assurance.

(g) In the event of any conflict or inconsistency between the provisions of this
Section 11.1 and this Agreement in general, on the one hand, and the terms and
conditions of the Confidentiality Agreement, on the other hand, this Agreement
shall prevail in every case.

ARTICLE XII

INDEMNIFICATION AND LIABILITY

12.1 Indemnification by Mallinckrodt.

Subject to the applicable provisions of this Article XII, Mallinckrodt, at its
own expense, hereby agrees to defend, indemnify and hold Horizon and its
Affiliates and their respective

 

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directors, officers, employees and agents harmless from and against any and all
claims, actions, causes of action, losses, damages, injuries, liabilities, costs
and expenses, including reasonable attorneys’ and experts’ fees and expenses
(“Loss”) incurred by any such Person entitled to indemnification under this
Section 12.1, directly or indirectly, arising out of or resulting from:

(i) any breach or violation of any of the representations, warranties and/or
covenants of Mallinckrodt set forth herein,

(ii) any actual or asserted violation by Mallinckrodt and/or its Affiliates of
any Legal Requirements, including any violation of any Legal Requirements by any
Sales Representatives or Third Parties acting by on behalf of Mallinckrodt
and/or its Affiliates in connection herewith,

(iii) any actions or omissions to act by any Sales Representative of
Mallinckrodt and/or its Affiliates related to the Promotion of the Product
(including, without limitation, any Promotion of the Product for any “off-label”
indications or claims or any other false or misleading representations to
healthcare providers or others regarding the Product or Horizon), and

(iv) any negligent or wrongful act or omission to act by Mallinckrodt or its
Affiliates, or anyone acting on behalf of any of them, in connection with
performance hereunder;

except for any Loss for which Horizon has the obligation to defend, indemnify
and hold harmless pursuant to Section 12.2 below.

 

12.2 Indemnification by Horizon.

Subject to the applicable provisions of this Article XII, Horizon, at its own
expense, hereby agrees to defend, indemnify and hold Mallinckrodt and its
Affiliates and their respective directors, officers, employees and agents
harmless from and against any and all Loss incurred by

 

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any such Person entitled to indemnification under this Section 12.2, directly or
indirectly, arising out of or resulting from:

(i) any breach or violation of any of the representations, warranties and/or
covenants of Horizon set forth herein,

(ii) any actual or asserted violation by Horizon and/or its Affiliates of any
Legal Requirements, including any violation of any Legal Requirements by any
sales representatives or Third Parties acting by on behalf of Horizon and/or its
Affiliates in connection with Horizon’s Promotion, manufacture, marketing, offer
for sale or sale of the Product,

(iii) any actions or omissions to act by any sales representative of Horizon
and/or its Affiliates related to the Promotion of the Product (including,
without limitation, any Promotion of the Product for any “off-label” indications
or claims or any other false or misleading representations to healthcare
providers or others regarding the Product),

(iv) any claim, lawsuit or other action made by any Third Party alleging that
(A) the manufacture, use, offer for sale, sale or marketing of the Product by
Horizon and/or (B) Mallinckrodt’s use of the Promotional Materials in the form
provided by Horizon to promote the Product in compliance with the terms of this
Agreement infringes or misappropriates any patent, trademark or other
intellectual property rights of a Third Party (except with respect to clause
(B), to the extent that Horizon directs Mallinckrodt to stop use of such
Promotional Materials and Mallinckrodt does not do so),

(v) any claim, lawsuit or other action made by any Third Party alleging that the
use of the Product has caused any Adverse Drug Experience, Serious Adverse Drug
Experience or any other personal injury or death, or that the labeling of the
Product fails properly or fully to warn users or prescribers of the Product of
the risks associated with its use, or any other claim with respect to the
Product that is in the nature of product liability,

(vi) any claim, lawsuit or other action alleging that any Promotional Materials
provided by Horizon and used in accordance with this Agreement make false,
unlawful or

 

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unsupported claims about the Product or otherwise violate any applicable Legal
Requirements, and

(vii) any negligent or wrongful act or omission to act by Horizon or its
Affiliates, or anyone act on behalf of any of them, in connection with
performance hereunder,

except for any Loss for which Mallinckrodt has the obligation to defend,
indemnify and hold harmless pursuant to Section 12.1 above.

12.3 Indemnification Procedures.

Unless and to the extent otherwise specifically provided herein, a Party or any
other Person entitled to indemnification under this Article XII (the
“Indemnitee”) that intends to claim indemnification under this Article XII with
respect to any Third Party claim, lawsuit or action shall promptly notify the
indemnifying Party (the “Indemnitor”) of any Loss arising out of any Third Party
claim, lawsuit or action in respect of which the Indemnitee intends to claim
such indemnification, and the Indemnitor shall have the sole right and
responsibility to assume the defense thereof with counsel of its own choosing;
provided, however, that an Indemnitee shall have the right to participate in the
defense and to retain its own counsel, at its own expense. An Indemnitee shall
not be entitled to indemnification under this Article XII if any settlement or
compromise of a Third Party claim, lawsuit or action is effected by the
Indemnitee without the consent of the Indemnitor, which consent shall not be
unreasonably withheld or delayed. An Indemnitee shall not be entitled to
indemnification with respect to any Third Party claim, lawsuit or action seeking
only monetary changes in an amount in excess of the amount which such Third
Party has unequivocally and in writing agreed with the Indemnitor it is willing
to accept in settlement or compromise of any such Third Party claim. An
Indemnitor (i) shall not enter into any settlement or compromise of any Third
Party claim, lawsuit or action or consent to the entry of any judgment or other
order with respect thereto unless it contains, as a part thereof, an
unconditional release of the Indemnitee for liability for all Loss that may
arise from such claim and (ii) shall not enter into any settlement or compromise
of any Third Party claim, lawsuit or action or consent to the entry of any
judgment or other order with respect thereto which contains any injunctive or
other non-monetary relief that might in any way interfere with the future

 

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conduct of business by the Indemnitee. The failure by the Indemnitee to deliver
notice to the Indemnitor within a reasonable time after the commencement of any
such Third Party claim, lawsuit or action, if materially prejudicial to the
Indemnitor’s ability to defend, shall relieve such Indemnitor of any liability
to the Indemnitee under this Article XII. An Indemnitee, its Affiliates, and its
and their employees, agents and representatives, shall cooperate fully with the
Indemnitor and its legal representatives in the investigation of any action,
claim or liability covered by this indemnification.

12.4 Consequential Damages.

NEITHER MALLINCKRODT NOR HORIZON, NOR THEIR RESPECTIVE AFFILIATES, NOR THE
DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS OF ANY OF THE FOREGOING, SHALL BE
LIABLE FOR ANY SPECIAL, INCIDENTIAL, CONSEQUENTIAL, INDIRECT OR PUNITIVE DAMAGES
OF ANY KIND THAT MAY ARISE UNDER OR BE RELATED TO THIS AGREEMENT, WHETHER OR NOT
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND WHETHER OR NOT SUCH DAMAGES MAY
HAVE BEEN REASONABLY FORESEEABLE; PROVIDED THAT, THE FOREGOING LIMITATION SHALL
NOT BE APPLICABLE TO ANY DAMAGES FOR BREACH OF ARTICLE XI OR LOSS ARISING DUE TO
FRAUD OR WILLFUL MISCONDUCT OR TO THE OBLIGATIONS FOR INDEMNIFICATION UNDER
SECTION 12.1 OR 12.2 WITH RESPECT TO THIRD PARTY CLAIMS, LAWSUITS OR ACTIONS.

ARTICLE XIII

MISCELLANEOUS

13.1 Assignment.

This Agreement, and a Party’s right and obligations hereunder, may not be
assigned or otherwise transferred by either Party without the prior written
consent of the other Party, except that either Party may, without such prior
written consent, assign or otherwise transfer this Agreement (i) in connection
with a corporate reorganization to any Affiliate, provided that the

 

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assigning Party shall remain liable and responsible to the non-assigning Party
for the performance and observance of all such duties and obligations by such
Affiliate, or (ii) to an unrelated Third Party in connection with a merger,
consolidation or sale of substantially all of a Party’s business or assets to
which this Agreement relates to such unrelated Third Party. Any purported
assignment in violation of the preceding sentence shall be void. This
Section 13.1 shall have no effect on the right of either Party to terminate this
Agreement pursuant to Section 8.2(f) above.

13.2 Severability.

Should one or more provisions of this Agreement be or become invalid or
unenforceable, the Parties hereto shall substitute, by mutual consent, valid and
enforceable provisions for such invalid or unenforceable provisions which new
provisions, in their economic and other effects, are sufficiently similar to the
invalid or unenforceable provisions that it can be reasonably assumed that the
Parties would have originally entered into this Agreement with such new
provisions. In case such new provisions cannot be agreed upon, the invalidity or
unenforceability of one or several provisions of this Agreement shall not affect
the validity of this Agreement as a whole or the validity of any portions
hereof, unless the invalid or unenforceable provisions are of such essential
importance to this Agreement that it is to be reasonably assumed that one or
both of the Parties would not originally have entered into this Agreement
without such invalid or unenforceable provisions.

13.3 Force Majeure.

Neither Party shall be held liable or responsible to the other Party nor be
deemed to have defaulted under or breached this Agreement for failure or delay
in fulfilling or performing any term of this Agreement, except for the timely
payment hereunder of any money due by one Party to the other, when such failure
or delay is caused by or results from causes beyond the reasonable control of
the affected Party (an “event of force majeure”), including but not limited to
fire, floods, embargoes, war, acts of war (whether war is declared or not),
insurrections, riots, civil commotions, the existence or administration of any
laws, rules or regulations, strikes, lockouts or other labor disturbances, acts
of God or acts, omissions or delays in acting by any Governmental Authority or
the other Party; provided, however, that the Party so affected shall use
reasonable

 

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commercial efforts to avoid or remove such causes of nonperformance, and shall
continue performance hereunder with reasonable dispatch whenever such causes are
removed. Each Party shall provide the other party with prompt written notice of
any delay or failure to perform that occurs by reason of an event of force
majeure. If an event of force majeure causes a failure or delay in performance
hereunder by a Party for more than one hundred twenty (120) consecutive days,
which failure or delay has a material adverse effect on the other Party’s
performance and/or the realization of its benefits hereunder, such other Party,
at its option, may terminate this Agreement effective upon written notice to the
Party experiencing an event of force majeure, subject to the consequences of
such termination as set forth in Section 8.3 above.

13.4 Notices.

Any consent, notice or report required or permitted to be given or made under
this Agreement by one of the Parties hereto to the other, except for any notices
required in connection with any pharmacovigilance or safety data exchange
agreement between the Parties, shall be in writing, delivered personally, or by
electronic transmission if receipt is confirmed electronically, or by courier,
or by certified mail (postage prepaid) addressed to such other Party at its
address indicated below, or to such other address as the addressee shall have
last furnished in writing to the addressor, and shall be effective in all cases
upon receipt by the addressee.

 

If to Horizon:   

Horizon Pharma USA, Inc.

520 Lake Cook Road, Suite 520

Deerfield, IL 60015

Attn: Timothy P. Walbert, Chairman, Chief Executive Officer and President

Telephone: (847) 772-0050

E-mail: twalbert@horizonpharma.com

with a copy to:   

Cooley LLP

4401 Eastgate Mall

San Diego, CA 92121

Attn: L. Kay Chandler

Telephone: (858) 550-6014

E-mail: kchandler@cooley.com

 

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If to Mallinckrodt:   

Mallinckrodt LLC

675 McDonnell Boulevard

Hazelwood, Missouri 63042

Attn: Jamie Harrell, VP & General Manager

    Specialty Pharmaceuticals – Brands

Telephone: (314) 654-3290

E-mail: jamie.harrell@covidien.com

with a copy to:   

Mallinckrodt LLC

675 McDonnell Boulevard

Hazelwood, Missouri 63042

Attn:  C. Stephen Kriegh,

            Vice President, Legal

Telephone:(314) 654-6040

E-mail: stephen.kriegh@covidien.com

13.5 Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of
the State of New York, without giving effect to its conflict of laws provisions
that might apply the law of another jurisdiction (except for the conflict of
laws provisions contained in Section 5-1401 and 5-1402 of the New York General
Obligations Law).

13.6 Dispute Resolution.

(a) The Parties hereby agree that they will attempt in good faith to resolve any
controversy or claim arising out of or relating to this Agreement promptly by
negotiations and, where specifically provided for, in accordance with any
specific provisions for dispute resolution set forth elsewhere in this Agreement
with respect to any particular matter or Article or Section hereof. If a
controversy or claim should arise hereunder, and if a dispute resolution
provision is not otherwise provided herein for settlement of such controversy or
claim, the representatives of the Parties will confer at least once and will
attempt to resolve the matter. Except as specifically provided elsewhere in this
Agreement, if the matter has not been resolved within […***…] days

 

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of their first meeting, the representatives shall refer the matter to
appropriate members of their senior management. If the matter has not been
resolved within […***…] days by members of the Parties’ senior management, any
controversy or claim arising out of or relating to this Agreement may be settled
as set forth in Section 13.6(b) set forth immediately below, if both Parties
agree in writing.

(b) If and as the Parties agree to submit any dispute to arbitration, any such
dispute arising between the Parties hereunder shall be settled by binding
arbitration in accordance with the Judicial Arbitration and Mediation Services
(“JAMS”) Comprehensive Arbitration Rules and Procedures, as such rules may be
modified by this Section 13.6(b) or by written agreement of the Parties. The
Parties shall mutually select a single independent, conflict-free arbitrator,
who shall have sufficient background and experience to resolve the matter(s) in
dispute. If the Parties are unable to reach agreement on the selection of the
arbitrator within […***…] days after submission of a dispute to arbitration,
then either or both Parties shall immediately request JAMS to select an
arbitrator with the requisite background, experience and expertise.
Notwithstanding the applicable JAMS rules, (i) the arbitrator shall resolve the
dispute as expeditiously as reasonably possible, and in any event no later than
[…***…] days following referral of the dispute to the arbitrator and (ii) the
arbitrator shall resolve the dispute in a manner that is fair and reasonable to
the Parties in light of the totality of the circumstances and the terms of this
Agreement. The place of arbitration shall be Chicago, Illinois, and all
proceedings and communications shall be in English. Either Party may apply to
the arbitrator for interim injunctive relief or may seek from any court having
jurisdiction any injunctive or provisional relief necessary to protect the
rights or property of that Party pending resolution of the matter pursuant to
this Section 13.6(b). The Parties shall have the right to be represented by
counsel. Any judgment or award rendered by the arbitrator shall be final and
binding on the Parties, and shall be governed by the terms and conditions
hereof, including the limitation on damages set forth in Section 12.4 above. The
Parties agree that such a judgment or award may be enforced in any court of
competent jurisdiction. The statute of limitations of the State of New York
applicable to the commencement of a lawsuit shall apply to the commencement of
arbitration under this Section 13.6(b). Each Party shall bear its own costs and
expenses and attorneys’ fees, and, unless otherwise agreed by the Parties or
determined by the arbitrator, the Party that does not prevail in the arbitration
proceeding shall pay the arbitrator’s fees and any administrative fees

 

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of arbitration. All proceedings and decisions of the arbitrator(s) shall be
deemed Proprietary and Confidential Information of each of the Parties, and
shall be subject to Article XI above.

(c) For the avoidance of doubt, any dispute arising hereunder for which there is
a specific dispute resolution procedure provided herein shall be settled only by
application of such procedure and not by resort to the dispute resolution
mechanics set forth in this Section 13.6.

(d) Any dispute which cannot be resolved by the Parties in accordance with
Section 13.6(a) above and the Parties do not agree will be submitted to
arbitration to be settled in accordance with the requirements of Section 13.6(b)
above, may be settled through litigation brought by one or both of the Parties
in a court of appropriate jurisdiction and venue, or by any other means agreed
upon by the Parties.

13.7 Entire Agreement and Amendment.

This Agreement, together with the exhibits attached hereto, contains the entire
understanding of the parties with respect to the subject matter hereof. All
express or implied agreements and understandings, either oral or written,
heretofore made are expressly merged in and made a part of this Agreement. This
Agreement may be amended, or any term hereof modified or supplemented, only by a
written instrument duly executed by authorized representatives of both Parties
hereto, and shall not be deemed to be amended by any course of dealing or usage
that arises between the Parties.

13.8 Headings.

The captions to the several articles, sections and clauses hereof are not a part
of this Agreement, but are merely guides or labels to assist in locating and
reading the several articles and sections hereof.

 

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13.9 Waiver.

The waiver by a Party hereto of any right hereunder or the failure of a Party to
object on any occasion to a breach or failure of performance by the other Party
shall not be deemed a waiver of a Party’s other rights hereunder or its right,
on any subsequent occasion, to object to a breach by the other Party of any
terms hereof or to insist upon the performance by the other party of its
obligations hereunder.

13.10 Counterparts.

This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument. An executed signature page of this Agreement delivered by
facsimile transmission or by electronic mail in “portable document format”
(“.pdf”) shall be as effective as an original executed signature page.

13.11 Construction.

The Parties acknowledge and agree that: (i) each Party and its representatives
have reviewed and negotiated the terms and provisions of this Agreement and have
contributed to its revisions, and (ii) the terms and provisions of this
Agreement will be construed fairly as to each Party hereto and not in favor of
or against either Party regardless of which Party was generally responsible for
the preparation or drafting of this Agreement. Unless the context of this
Agreement otherwise requires: (v) words of any gender include the other gender,
(w) words using the singular or plural number also include the plural or
singular number, respectively, (x) the terms “hereof,” “herein,” “hereby,” and
derivative or similar words refer to this entire Agreement, (y) the terms
“Article,” “Section,” “Exhibit,” or “clause” refer to the specified Article,
Section, Exhibit, or clause of this Agreement, and (z) the term “including” or
“includes” means “including without limitation” or “includes without
limitation.” Whenever this Agreement refers to a number of days, such number
shall refer to calendar days unless business days are specified.

 

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13.12 Relationship Between Parties.

The Parties hereto are acting and performing as independent contractors, and
nothing in this Agreement creates the relationship of partnership, joint
venture, sales agency or principal and agent. Neither Party is the agent of the
other, and neither Party may hold itself out as such to any other Person. All
financial obligations associated with each Party’s business will be the sole
responsibility of such Party except and as expressly otherwise stated.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.

MALLINCKRODT LLC

 

By:  

/s/ Mark C. Trudeau

  [Illegible Signature]   Mark C. Trudeau President, Pharmaceuticals  

HORIZON PHARMA USA, INC.

 

By:  

/s/ Timothy P. Walbert

  Timothy P. Walbert   Chairman, Chief Executive Officer and President

 

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EXHIBIT A

Quarterly Minimum Prescription Levels

 

    Q4
2012     Q1
2013     Q2
2013     Q3
2013     Q4
2013     Q1
2014     Q2
2014     Q3
2014     Q4
2014  

Quarterly Minimum

Prescriptions (factored)

    […***…]        […***…]        […***…]        […***…]        […***…]       
[…***…]        […***…]        […***…]        […***…]   

All references to quarters in the above table are to Agreement Quarters, as
defined in Section 1.5. Prescriptions will be calculated based on the
requirements of Section 7.1(a).

 

      *** Confidential Treatment Requested

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EXHIBIT B

THIRD PARTY DATA USE AGREEMENT

This Third Party Data Use Agreement (“Agreement”) is by and among Source
Healthcare Analytics, LLC, a Delaware corporation with its principal place of
business at 2394 East Camelback Road, Phoenix, Arizona 85016 (“SHA”), Insert
Client Name , with its principal place of business at Insert Client Address
(“Client”), and Insert Third Party Name with its principal place of business at
Insert Third Party Address (“Contractor”). This Agreement shall only become
effective as of the date last signed by all parties (“Effective Date”).

Scope of this Agreement. SHA provides certain data to Client pursuant to an
agreement which, among other things, prohibits the disclosure of such data to
third parties without entry into a Third Party Data Use Agreement (“License
Agreement”). Client has requested SHA’s permission to disclose such data to
Contractor for the purpose described below. By the signature below of an
authorized representative of SHA, this Agreement constitutes SHA’s prior written
permission to Client to disclose such data to Contractor subject to the terms
and conditions contained in this Agreement.

DESCRIPTION OF LICENSE AGREEMENT

As used in this Agreement, “License Agreement” refers to the following agreement
between SHA and Client:

Dated:

DESCRIPTION OF DATA AND USE

As used in this Agreement, “Data” refers to the following SHA data provided to
Client pursuant to the License Agreement:

Contractor may only use the data for the following permitted use and only on
behalf of Client pursuant to Section 1 and Section 2 of the Terms and Conditions
on page 2 (“Permitted Use”):

DESCRIPTION OF CONTRACTOR’S LOCATION WHERE DATA WILL RESIDE (if different from
above)

Address, City, State, Zip:

SHA, Client and Contractor acknowledge their receipt and acceptance of the terms
and conditions of this Agreement by the signature below of their respective
authorized representatives.

 

CONTRACTOR:       CLIENT: By:  

 

      By:   

 

Printed Name:  

 

     Printed Name:   

 

Title:  

 

      Title:   

 

Date:  

 

      Date:   

 

SOURCE HEALTHCARE ANALYTICS, LLC:          By:  

 

        

Printed Name:  

 

        

Title:  

 

         Date:  

 

        

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THIRD PARTY DATA USE AGREEMENT

Terms and Conditions

 

1. Contractor’s Use of Data.

(a) Subject to the terms and conditions of this Agreement, Contractor agrees to
use the Data only for the Permitted Use set forth in this Agreement. Under no
circumstances shall Contractor use any of the Data, or any information derived
therefrom, for Contractor’s own direct benefit or for the direct benefit of any
other person or entity other than Client. SHA shall have no obligation to
support Contractor’s use of the Data. If upon the request of Contractor, SHA in
its sole discretion elects to support Contractor’s use of the Data, SHA may
charge Contractor its then standard rates for such support.

(b) Under no circumstances may Contractor resell, sublicense or otherwise
distribute, disclose or permit access by any third party to any of the Data. The
Data shall be delivered by SHA to Contractor, or by Client to Contractor, as
applicable, only in de-identified format in compliance with the Health Insurance
Portability and Accountability Act of 1996 and its implementing regulations
(“HIPAA”). Contractor represents and warrants that it shall not attempt,
directly or indirectly, to re-identify any Data to identify a patient, pharmacy
or a hospital provider. SHA may suspend delivery of any Data immediately upon
notice from Contractor or Client, or in the event that SHA has good faith reason
to reasonably believe, that identifiable data would be or is included in any
Data. Contractor shall ensure that the Data will not be used by or on behalf of
Contractor in any way to exhibit, reference, access or generate any patient,
pharmacy or hospital level data. Contractor represents and warrants that it will
not attempt to link, on an individual basis, any other information to the Data;
and it maintains, and will continue to maintain, appropriate access controls to
physically, technically, and administratively separate any such information from
the Data, and from any products produced using all or any part of the Data.

 

2. Confidentiality. Contractor shall use its commercially reasonable efforts to
ensure any employee of Contractor receiving any Data is apprised of and
appreciates the confidential and proprietary nature of the Data, and shall
require each such employee to refrain from disclosing or discussing the Data
with anyone other than the employees of Contractor, Client or SHA. Contractor’s
employees shall only receive those portions of the Data necessary to fulfill
Contractor’s obligations to Client as described herein. All copies of any of the
Data, including any data derived therefrom, shall include SHA’s confidentiality
notice and any other copyright notice or other proprietary notice, if any,
appearing on the copy of the Data provided by SHA. In addition, any documents or
materials prepared by Contractor or Contractor’s employees, agents or
representatives which contain information derived from any of the Data, shall be
conspicuously marked with confidential and/or proprietary notices substantially
similar to those notices contained in the original deliverable received from
SHA. No part of the Data shall be: (a) published by Contractor, (b) quoted, made
or reproduced by Contractor for advertising, promotional or public relations
purposes, (c) reproduced or placed in any data retrieval systems by Contractor,
except as expressly provided herein; or (d) used in any legal proceedings,
except where the production of any such Data or information is compelled under
process or request by a court or administrative agency of competent
jurisdiction, in which event Contractor shall promptly give notice of such
process, adhere to SHA’s policies governing the use of SHA data in litigation,
and cooperate with SHA in obtaining a protective order or other mechanism for
the protection of any such Data.

 

3. Term and Termination. The term of this Agreement shall begin on the Effective
Date and shall terminate at the earlier of: (a) the termination of the License
Agreement, however occurring; (b) the termination of Contractor’s services to
Client relating to the use of the Data; or (c) thirty (30) days after written
notice by Client or SHA to the other two parties indicating Client’s or SHA’s
intention to terminate this Agreement. Prior to termination, Contractor shall
destroy or return to Client all Data in Contractor’s control or possession, and
an authorized representative of Contractor shall certify in writing to SHA, with
a copy to Client, that Contractor has destroyed or returned to Client all Data
in its possession or control.

 

4. No Warranty. ANY DATA PROVIDED TO Contractor IN CONNECTION WITH THIS
AGREEMENT IS PROVIDED TO Contractor “AS-IS” AND SHA MAKES NO REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, TO Contractor IN CONNECTION WITH THE DATA,
INCLUDING THE IMPLIED WARRANTIES OR MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.

 

5. Limitation of Liability. Contractor acknowledges and agrees that SHA shall
have no liability to Contractor under this Agreement, including but not limited
to, any liability arising from the inaccuracy or incompleteness of the Data. In
no event shall SHA be liable to Contractor under this Agreement for any
incidental or consequential damages, including but not limited to, lost
business, lost profits or third party claims, whether foreseeable or not, even
if SHA has been advised of the possibility of such damages. The parties
acknowledge and agree that a breach by Contractor of the provisions of this
Agreement above will cause SHA and/or its affiliates irreparable injury and
damage which may not be compensable by money damages, and, therefore, Contractor
agrees that SHA and/or its affiliates shall be entitled to injunctive or other
relief against Contractor to prevent such a breach by Contractor and to secure
enforcement of the terms of this Agreement, in addition to any other remedies
which may be available. Without limiting the availability to SHA of any other
rights or remedies, if Contractor breaches any of the terms of this Agreement,
SHA reserve the right to immediately terminate this Agreement upon notice to
Client and Contractor.

 

6. Inspection Rights. SHA may upon reasonable notice to Contractor send a
representative to Contractor’s place of business to verify compliance with the
terms of this Agreement; provided, that SHA shall keep any information learned
by SHA in the course of such inspection confidential and shall not use such
information for any purpose except to confirm compliance with this Agreement and
not disclose such information to any third party. Such verification shall be
performed during the normal business hours of Contractor upon no less than five
business’ days prior written notice to Client and Contractor.

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7. Indemnification. Contractor agrees to indemnify SHA and hold SHA harmless for
any and all third party claims, damages, costs, demands, or other liabilities
(each, a “Claim”) arising from or relating to any breach of this Agreement by
Contractor, including reasonable attorney’s fees. SHA shall promptly notify
Client and Contractor of each such Claim at the time each Claim becomes known to
SHA.

 

8. Notices. All notices, demands or other communications required hereunder
shall be given or made in writing and shall be delivered personally or sent
prepaid (i) by certified or registered first class mail with return receipt
requested or (ii) by a nationally-recognized common carrier’s overnight courier
service, addressed to the receiving party at the address first written above or
such other address as the receiving party may advise in writing to use
hereunder.

 

9. Miscellaneous. This Agreement sets forth the entire agreement between the
parties and supersedes prior proposals, agreements and representations related
to the subject matter of this Agreement, whether written or oral, except for the
License Agreement. No modifications, amendments or waiver of any of the
provisions of this Agreement shall be binding upon the parties unless made in
writing and duly executed by authorized representatives of Contractor, Client
and SHA. Contractor may not assign, transfer or sublicense any portion of this
Agreement or the Data provided hereunder without the express written consent of
Client and SHA. Any attempt to assign, transfer or sublicense by Contractor in
violation of this Section 9 shall be void. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same document. The headings of the
paragraphs hereof are used for convenience only and shall not affect the meaning
or interpretation of the content thereof. This Agreement and the relationship of
the parties in connection with the subject matter of this Agreement shall be
governed by and determined in accordance with the laws of the State of New York,
excluding its conflicts of laws principles. THE PARTIES WAIVE TRIAL BY JURY IN
CONNECTION WITH ANY CLAIM, ACTION OR SUIT ASSERTED, BROUGHT OR ARISING UNDER
THIS AGREEMENT. The failure to enforce at any time the provisions of this
Agreement or to require at any time performance by the other parties of any of
the provisions hereof shall in no way be construed to be a waiver of such
provisions or to affect either the validity of this Agreement (or any part
hereof), or the right of any of the parties thereafter to enforce each and every
provision in accordance with the terms of this Agreement. If any provision of
this Agreement is held to be invalid or unenforceable by any judgment of a
tribunal of competent jurisdiction, the remainder of this Agreement shall not be
affected by such judgment, and the Agreement shall be carried out as nearly as
possible according to its original terms and intent. However, if the original
intent of the parties cannot be preserved, this Agreement shall terminate upon
the effective date of such judgment.