Exhibit 10.3

Confidential

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

MANUFACTURING AND SUPPLY AGREEMENT

dated as of March 4, 2013

by and between

Laboratorios Grifols, S.A.

and

Cadence Pharmaceuticals, Inc.

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TABLE OF CONTENTS

 

SECTION    TITLE    PAGE NO. Article I    Definitions    1 Article II   
Purchase and Sale of Products    5 2.1    General    5 2.2    Quarterly
Forecasts    6 2.3    Annual Supply and Purchase Commitments    6 2.4   
Purchase Orders    7 2.5    Accommodations    7 2.6    Notice of Anticipated
Non-Performance    7 2.7    Standard Forms; Conflicts    7 Article III   
Purchase Price; Shipment; Payments    7 3.1    Purchase Price    7 3.2   
Invoices    8 3.3    Payments    8 3.4    Payment Denominations    8 3.5   
Shipment; Title; Transport    8 3.6    Taxes    9 Article IV    Manufacture of
Product    9 4.1    Standards    9 4.2    Specification Changes    9 4.3   
Materials    10 4.4    Quality Agreement    10 Article V    Quality Control;
Testing; Quality Assurance    11 5.1    Technology Transfer    11 5.2    Testing
   11 5.3    In-Process and Finished Product Testing    11 5.4    Quality
Assurance    11 5.5    Deviations and Investigations    11 5.6    Batch
Disposition; Inspection; Returns    11 5.7    Product Recalls    12 5.8   
Product Complaints    12 5.9    Adverse Events    13 5.10    Retained Samples   
13 Article VI    Regulatory Matters    13 6.1    Manufacturing Consents    13
6.2    Product Consents    13 6.3    Drug Application Documentation    13 6.4   
Regulatory Changes    13 6.5    Regulatory Inspections    14 6.6    Debarment   
14 6.7    Product Release to the Market    14 Article VII    Intellectual
Property    14 7.1    Grant of Licenses; Ownership of Inventions    14
Article VIII    Information; Access; Audit Rights    15 8.1    Provision of
Information    15 8.2    Audit and Inspection Rights    15 8.3    Documentation
   15 Article IX    Representations and Warranties    15 9.1    Representations
and Warranties of Grifols    15

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9.2    Representations and Warranties of Cadence    17 Article X    Liability
and Indemnification    17 10.1    Indemnity by Grifols    17 10.2    Indemnity
by Cadence    18 10.3    Procedures    18 Article XI    Insurance    19 11.1   
Insurance Requirements    19 Article XII    Confidentiality    19 12.1   
Definition of Grifols “Confidential Information”    19 12.2    Definition of
Cadence “Confidential Information”    19 12.3    Treatment of Confidential
Information    19 12.4    Non-Disclosure    19 12.5    Permitted Exceptions   
20 12.6    Use by the Receiving Party    20 12.7    Excluded Information    20
12.8    Notification of Mandatory Disclosure    20 12.9    Publicity    21 12.10
   Return of Confidential Information    21 Article XIII    Term; Termination;
Remedies    21 13.1    Term    21 13.2    Termination    21 13.3    Remedies   
22 Article XIV    Miscellaneous    22 14.1    Notices    22 14.2    Independent
Contractors    23 14.3    Entire Understanding    23 14.4    Transferability;
Binding Effect    23 14.5    Dispute Resolution    24 14.6    Amendment    24
14.7    Severability    24 14.8    Waiver    24 14.9    Survival    24 14.10   
Headings; Exhibits; Schedules; Counterparts    25 14.11    Governing Law    25
14.12    Enforceability    25 14.13    Force Majeure    25 14.14    Overdue
Amounts    25 14.15    Limitation of Liability    25 EXHIBITS TO AGREEMENT:
Exhibit A    Specifications    Exhibit B    Purchase Price    Exhibit C   
Service Fees    Exhibit D    Insurance Requirements    Exhibit E    Technology
Transfer Costs   

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Confidential

 

MANUFACTURING AND SUPPLY AGREEMENT

THIS MANUFACTURING AND SUPPLY AGREEMENT (the “Agreement”) dated as of the 4th
day of March, 2013 (the “Effective Date”), is made by and between Laboratorios
Grifols, S.A. (“Grifols”), a corporation organized under the laws of Spain,
having its principal office at Calle Can Guasch, no. 2, Parets del Valles,
Barcelona, Spain, and Cadence Pharmaceuticals, Inc., a corporation organized
under the laws of the State of Delaware, U.S.A., having its principal office at
12481 High Bluff Drive, Suite 200, San Diego, California, 92130 (“Cadence”).

RECITALS

WHEREAS, Cadence is a biopharmaceutical company focused on acquiring,
in-licensing, developing and commercializing proprietary products principally
for use in the hospital setting;

WHEREAS, Grifols is a company engaged in the production of pharmaceutical,
diagnostic and hospital products;

WHEREAS, Cadence holds certain license rights in intellectual property relating
to the Product (as defined below) for the Territory (as defined below) pursuant
to the IV APAP Agreement dated February, 2006, between BMS (as defined below)
and Cadence, as amended (the “IV APAP Agreement”), which sublicenses to Cadence
certain intellectual property rights with respect to the United States and
Canada under the License Agreement dated December 23, 2002, between SCR
Pharmatop (as defined below) and BMS (the “Pharmatop License Agreement”) and
licenses to Cadence certain rights to use patents and know-how of BMS in the
same jurisdictions;

WHEREAS, Cadence desires to purchase, and Grifols desires to manufacture and
supply to Cadence, certain quantities of the Product for sale in the Territory;
and

WHEREAS, Grifols has expertise in manufacturing the Product by virtue of a
separate supply agreement between BMS and Grifols;

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

ARTICLE I

DEFINITIONS

“Adverse Event” shall have the meaning provided in Section 5.9.

“Affiliate” shall mean any person or entity that, directly or indirectly,
through one or more intermediaries, Owns, is Owned by or is under common
Ownership with, a Party, where “Own,” “Owned” or “Ownership” refers to
(i) direct or indirect possession of at least fifty percent (50%) of the
outstanding voting securities of a corporation or a comparable ownership in any
other type of entity; or (ii) the actual ability of an entity, person or group
to control and direct the management of the person or entity, whether by
contract or otherwise.

 

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“Annual Production Capacity Requirement” shall have the meaning provided in
Section 2.3(b) of this Agreement.

“Applicable Laws” shall mean any and all applicable local, municipal,
provincial, federal and international laws, statutes, ordinances, rules,
regulations or operating procedures now or hereafter enacted or promulgated by
any Governmental Body, including the Regulatory Acts.

“Bristol Myers Squibb Company” or “BMS” is a corporation organized under the
laws of the State of Delaware, U.S.A., having its head office’s address at 345
Park Avenue, New York, New York 10154, U.S.A.

“Business Day” shall mean a day which is not a Saturday, a Sunday, or a state or
national holiday, as applicable, in the United States or with respect to matters
herein pertaining to the Facility, at Facility’s (as defined below) location.

“Cadence Indemnitee” shall have the meaning provided in Section 10.1 of this
Agreement.

“Cadence Confidential Information” shall have the meaning provided in
Section 12.2 of this Agreement.

“Cadence Intellectual Property” shall mean any and all Intellectual Property (as
defined below) relating to the Product that (i) was owned by, or licensed to,
Cadence prior to the Effective Date, and (ii) is developed, acquired by, or
licensed to, Cadence after the Effective Date.

“Cadence Licensors” shall mean BMS and SCR Pharmatop.

“Confidential Information” shall have the meaning provided in Section 12.3 of
this Agreement.

“Consent” shall mean any material consent, authorization, permit, certificate,
license or approval of, exemption by, or filing or registration with, any
Governmental Body (as defined below) or other person.

“Contract Year” shall mean the twelve-month period beginning on the first day of
the month following the date on which a Drug Application (as defined below) for
the Product is approved by the FDA (as defined below), and each successive
twelve (12) month period thereafter during the Term.

“Current Good Manufacturing Practices” or “cGMPs” shall mean all applicable
standards relating to manufacturing practices at the Facility for finished
pharmaceutical products to be sold in the Territory (i) promulgated by any
Governmental Body having jurisdiction over the manufacture of the Products at
such Facility, in the form of laws or regulations or (ii) promulgated by any
Governmental Body having jurisdiction over the manufacture of the Products at
such Facility, in the form of guidance documents (including but not limited to
advisory opinions, compliance policy guides and guidelines), which guidance
documents are broadly implemented within the pharmaceutical manufacturing
industry for such Products. For the avoidance of doubt, cGMPs shall include,
without limitation, current good manufacturing practices as described in Parts
210 and 211 of Title 21 of the United States’ Code of Federal Regulations, as
updated, amended and revised from time to time.

“Days” (whether or not the word is capitalized) shall mean, except where
specified otherwise, calendar days.

 

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“Delivery Date” shall mean the date which Product is picked up from the Facility
by Cadence’s designated freight provider.

“Drug Application” shall mean any new drug application or an abbreviated new
drug application, including any amendments or supplements thereto, filed by
Cadence with the FDA pursuant to the FDCA (as defined below), or any comparable
filing with any Drug Regulatory Authority in Canada, and includes any Common
Technical Document for the Registration of Pharmaceuticals for Human Use filed
with the FDA or any other Drug Regulatory Authority (as defined below) in the
Territory.

“Drug Regulatory Authority” shall mean any Governmental Body or instrumentality
with responsibility for granting any licenses, approvals, authorizations or
granting pricing and/or reimbursement approvals necessary for the marketing and
sale of pharmaceutical products in any regulatory jurisdiction including,
without limitation, the FDA (as defined below).

“Facility” shall mean Grifols’ manufacturing and testing facilities located at
Passeig Fluvial, 24, Parets del Valles, Barcelona, Spain and at c/Logística, 2,
Parets del Vallès, Barcelona, Spain.

“FDA” shall mean the United States Food and Drug Administration, and any
successor agency of the United States government.

“FDCA” shall mean the United States Federal Food, Drug & Cosmetics Act, 21
U.S.C. 321 et seq., any amendments or supplements thereto, or any regulations
promulgated or adopted thereunder.

“Firm Orders” shall have the meaning provided in Section 2.2 of this Agreement.

“GAAP” means generally accepted accounting principles, as consistently applied
in the Territory.

“Governmental Body” shall mean any nation or government, any state, province, or
other political subdivision thereof or any entity with legal authority to
exercise executive, legislative, judicial, regulatory or administrative
functions.

“Grifols Confidential Information” shall have the meaning provided in
Section 12.1 of this Agreement.

“Grifols Indemnitee” shall have the meaning provided in Section 10.2 of this
Agreement.

“Grifols Intellectual Property” shall mean any and all Intellectual Property
relating to the manufacture of pharmaceutical products generally that (i) was
owned by, or licensed to, Grifols prior to the Effective Date, or (ii) is
developed or acquired by Grifols without reference to, or use of, any Cadence
Intellectual Property or Cadence Confidential Information, after the Effective
Date.

“Health Canada” shall mean Health Canada, and any successor agency of the
Canadian government.

“Indemnified Party” shall have the meaning provided in Section 10.3 of this
Agreement.

“Indemnifying Party” shall have the meaning provided in Section 10.3 of this
Agreement.

 

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“Intellectual Property” shall mean (i) trademarks, trademark registrations,
trademark applications, service marks, service mark registrations, service mark
applications, business marks, brand names, trade names, trade dress, names,
logos and slogans and all goodwill associated therewith; (ii) patents, patent
rights, provisional patent applications, patent applications, designs,
registered designs, registered design applications, industrial designs,
industrial design applications and industrial design registrations, including
any and all divisions, continuations, continuations-in-part, extensions,
substitutions, renewals, registrations, revalidations, reexaminations, reissues
or additions, including supplementary certificates of protection, of or to any
of the foregoing items; (iii) copyrights, copyright registrations, copyright
applications, original works of authorship fixed in any tangible medium of
expression, including literary works (including all forms and types of computer
software, including all source code, object code, firmware, development tools,
files, records and data, and all documentation related to any of the foregoing),
musical, dramatic, pictorial, graphic and sculptured works; (iv) trade secrets,
technology, discoveries and improvements, know-how, proprietary rights,
formulae, confidential and proprietary information, technical information,
techniques, inventions, designs, drawings, procedures, processes, models,
formulations, manuals and systems, whether or not patentable or copyrightable,
including all biological, chemical, biochemical, toxicological, pharmacological
and metabolic material and information and data relating thereto and
formulation, clinical, analytical and stability information and data which have
actual or potential commercial value and are not available in the public domain;
and (v) all other intellectual property or proprietary rights, in each case
whether or not subject to statutory registration or protection.

“Invention(s)” shall have the meaning provided in Section 7.1(c) of this
Agreement.

“IV APAP Agreement” shall have the meaning provided in the Preamble of this
Agreement.

“Laboratory” shall have the meaning provided in Section 5.6 of this Agreement.

“Losses” shall mean, collectively, any and all claims, liabilities, damages,
reduction in value, costs, expenses, including reasonable fees and disbursements
of counsel and any consultants or experts and expenses of investigation,
obligations, liens, assessments, court costs, arbitration or mediation fees,
judgments, fines and penalties imposed upon or incurred by an Indemnified Party.

“Materials” shall mean (i) all raw materials, components, work-in-process and
other ingredients required to manufacture the Product, including, without
limitation, the active pharmaceutical ingredient, paracetamol (acetaminophen),
and (ii) all packaging materials used in the manufacture, storage and shipment
of the Product.

“Materials Certification” shall have the meaning provided in Section 4.4(b) of
this Agreement.

“Party” shall mean either Cadence or Grifols as the context dictates, and
“Parties” shall mean both Cadence and Grifols.

“PDUFA Fees” shall have the meaning provided in Section 3.6(c) of this
Agreement.

“Person” shall mean any individual or corporation, company, partnership, trust,
incorporated or unincorporated association, joint venture or other entity of any
kind.

“Pharmatop License Agreement” shall have the meaning provided in the Preamble to
this Agreement.

“Purchase Order” shall have the meaning provided in Section 2.4 of this
Agreement.

 

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“Purchase Price” shall have the meaning provided in Section 3.1 of this
Agreement.

“Product” shall mean a sterile, non-pyrogenic formulation of paracetamol
(acetaminophen) intended for intravenous infusion, with a concentration of 10
mg/ml in 100 ml, packaged in flexible bags, as more particularly set forth in
the Specifications (as defined below).

“Quality Agreement” shall have the meaning provided in Section 4.5 of this
Agreement.

“Quarter” shall mean the consecutive three-month periods commencing on each
January 1, April 1, July 1 and October 1, of each calendar year during the Term
(as defined below).

“Quarterly Forecast” shall have the meaning provided in Section 2.2 of this
Agreement.

“Regulatory Acts” shall mean, as applicable, the FDCA, the rules and regulations
thereunder, and any Applicable Laws and regulations governing the approval,
manufacture, sale or licensing of pharmaceutical products or ingredients for
inclusion therein of any other jurisdiction for which Grifols is then producing
products.

“Reservation Fee” shall have the meaning provided in section 2.3(c) of this
Agreement.

“SCR Pharmatop” is a civil law partnership organized under the laws of France,
having its head office’s address at 10, Square St. Florentin, 78150 Le Chesnay,
France, recorded with the Register of Commerce and Companies of Versailles under
No. 407552702.

“Specifications” shall mean the compilation of all specifications for Materials,
formula, manufacturing, analytical and testing procedures, release, packaging,
labeling, artwork and other processes relating to the manufacture of the
Product. The preliminary Specifications for the Product are set forth on
Exhibit A, and may be amended from time to time in accordance with Section 4.2
hereof.

“Term” shall have the meaning provided in Section 13.1 of this Agreement.

“Territory” shall mean means the United States (including Puerto Rico and all
U.S. possessions and territories) and Canada.

“Third Party” shall mean any person or entity other than the Parties or their
respective Affiliates.

“Third Party Claim” shall have the meaning provided in Section 10.3 of this
Agreement

“Units” shall mean individual dosage units of the Product.

ARTICLE II

PURCHASE AND SALE OF PRODUCTS

2.1 General. Subject to the terms and conditions of this Agreement, during the
Term, Grifols agrees to manufacture and sell to Cadence, and Cadence agrees to
purchase from Grifols, the Product. The Product shall be manufactured by Grifols
at the Facility solely for sale to Cadence, Cadence’s Affiliates and
sublicensees. Grifols will not otherwise produce or sell the Product, except as
expressly agreed to in writing by Cadence, or to BMS and BMS’ Affiliates.
Nothing herein shall limit or otherwise restrict Cadence’s right to purchase the
Product during the Term of this Agreement from one or more alternate suppliers
in addition to Grifols.

 

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2.2 Quarterly Forecasts. During the Term of this Agreement, Cadence shall
provide to Grifols a projection (each, a “Quarterly Forecast”) of the
anticipated quantities of the Product to be ordered by Cadence pursuant to
Section 2.4 below during the next twelve (12) months (or such shorter period as
remains under the Term of this Agreement). Cadence shall forecast in amounts
comprising full batch quantities. Each Quarterly Forecast shall be made by
Cadence in good faith, taking into account reasonable projections of demand for
Products, and allowing for reasonable safety stock. Each Quarterly Forecast,
once delivered in accordance herewith, shall constitute a binding commitment
(each, a “Firm Order”) to purchase the quantities of the Product specified for
the first Quarter of such Quarterly Forecast period. Except for the Firm Order
portion thereof, each Quarterly Forecast shall otherwise constitute a
non-binding estimate of Cadence’s then-current intention to purchase the Product
quantities specified for the remainder of such Quarterly Forecast period.
Cadence shall provide the first Quarterly Forecast to Grifols within ninety
(90) days following the submission of a Drug Application for the Product
manufactured at the Facility, and subsequent Quarterly Forecasts shall be
provided on or before the first day of each Quarter thereafter.

2.3 Annual Supply and Purchase Commitments.

(a) Supply Commitment. During the Term, Grifols shall be obligated to maintain
the capability to provide to Cadence the greater of: (i) [***] during each
Contract Year; (ii) [***]; or (iii) [***]. For the avoidance of doubt, Cadence
hereby acknowledges and agrees that the [***]*** mentioned in Section 2.3 (iii),
above, [***].

(b) Annual Production Capacity Requirement. Cadence shall provide Grifols with
Cadence’s annual production capacity requirement for the Product for each
Contract Year during the Term (the “Annual Production Capacity Requirement”).
Unless otherwise agreed between the Parties, the Annual Production Capacity
Requirement for each Contract Year shall be at least [***]. The Annual
Production Capacity Requirement for the first Contract Year will be provided to
Grifols within [***] days following the submission to the FDA of the first Drug
Application for the Product manufactured at the Facility, and subsequent Annual
Production Capacity Requirements shall be provided [***] prior to the beginning
of each remaining Contract Year during the Term. Subject to Section 2.3(c),
below, Cadence shall not be required to purchase from Grifols the Annual
Production Capacity Requirement for any Contract Year.

(c) Capacity Reservation Fee. In the event that, by the end of each Contract
Year, Cadence has not purchased a quantity of Product equal to the Annual
Production Capacity Requirement for such Contract Year, subject to the
provisions of Section 2.3(c)(iv) of this Agreement, Cadence shall pay Grifols a
capacity reservation fee (the “Reservation Fee”). The Reservation Fee for each
Contract Year shall be calculated as follows:

[***]

(iv) The Reservation Fee shall be in lieu of any minimum purchase commitment by
Cadence under this Agreement. Further, and irrespective of anything in this
Agreement to the contrary:

(A) Cadence shall not be required to pay a Reservation Fee for any Contract Year
for which Grifols has not demonstrated, to Cadence’s reasonable satisfaction,
the ability to timely provide the full amount of the Annual Production Capacity
Requirement for such Contract Year for any reason whatsoever including, without
limitation, due to a Force Majeure event; and

 

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(B) Cadence shall not be required to pay Grifols the Reservation Fee if this
Agreement is terminated by Cadence pursuant to Sections 13.2(a), 13(b) or 13(c)
of this Agreement, or by Grifols in breach hereof.

2.4 Purchase Orders. From time to time during the Term (typically, on a monthly
basis), Cadence shall deliver purchase orders (each, a “Purchase Order”) to
Grifols for Product to be purchased pursuant to this Agreement. Each Purchase
Order shall specify the quantity of the Product ordered, the destination for
delivery of the Product, the required Delivery Date for the Product and the
desired method of shipping. The Purchase Orders may be delivered electronically
or by other means to such location as Grifols shall designate. Except with the
prior written consent of Grifols, Cadence shall deliver each Purchase Order to
Grifols not less than [***] days prior to the Delivery Date specified in the
Purchase Order, and the minimum size of any order placed by Cadence shall be a
full batches (i.e., [***]), with larger orders being in whole number multiples
of a batch. All Purchase Orders shall be subject to Grifols’ written acceptance,
which shall be provided to Cadence within [***]*** of Grifols’ receipt of the
Purchase Order. Grifols shall supply the Product in response to each Purchase
Order placed in accordance with the terms of this Agreement by Cadence,
provided, that each such Purchase Order shall be deemed to have been fully
satisfied if the quantity of each of the Products supplied is not more than
[***]% and not less than [***]% of the quantity of each of the Products ordered.
The maximum delivery lead time for all Product purchased by Cadence shall be
[***] days after Grifols’ receipt of each Purchase Order.

2.5 Accommodations. From time to time, due to significant unforeseen
circumstances, Cadence may deliver to Grifols a Purchase Order for Product
quantities in excess of those specified in the Firm Order portion of a Quarterly
Forecast. Upon Cadence’s written request, Grifols shall use its commercially
reasonable efforts to provide Cadence with such excess Product quantities.

2.6 Notice of Anticipated Non-Performance. If at any time Grifols determines
with reasonable certainty that it may not be able to satisfy fully the timing
and/or amount of Cadence’s Purchase Orders or the Firm Orders of the Quarterly
Forecasts, Grifols shall promptly provide Cadence with written notice thereof.

2.7 Standard Forms; Conflicts. In ordering and delivering the Products pursuant
hereto, Cadence and Grifols may use their standard forms (including, but not
limited to, Purchase Orders and invoices), but nothing in those forms shall be
construed to modify, amend or supplement the terms of this Agreement and, in
case of any conflict herewith, the terms of this Agreement shall control, and
any additional or modified terms contained in any such Purchase Order or other
form shall be null and void and shall not be binding upon the receiving Party.

ARTICLE III

PURCHASE PRICE; SHIPMENT; PAYMENTS

3.1 Purchase Price. During the Term, Cadence shall pay Grifols for the Product
in accordance with the applicable purchase price set forth in Exhibit B (the
“Purchase Price”), subject to the price adjustments permitted in accordance with
Exhibit B. The Purchase Price shall include [***]. Grifols shall obtain all
Materials only from suppliers listed in Cadence’s approved Drug Application for
the Product, or approved by Cadence’s authorized Quality Assurance
representative in writing, and shall perform all testing of Materials required
by such Drug Application or the Quality Agreement. Prior to the initial shipment
of Product to Cadence, Cadence shall provide Grifols with a list of
documentation required to be provided by Grifols with each shipment of the
Product.

 

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3.2 Invoices. Invoices for the Products shall be submitted by Grifols to Cadence
at the address specified in Section 14.1 (or at such other address as Cadence
shall direct from time to time in accordance with Section 14.1). Each invoice
shall, at a minimum, identify all applicable Purchase Order numbers and provide
the description, quantity, lot or batch number, and the Purchase Price for the
Products covered thereby. Each invoice shall also separately itemize applicable
sales, use, transfer, excise, value-added and similar taxes due with respect to
the invoiced Products. Invoices shall be issued no earlier than the date Product
is picked up from the Facility by Cadence’s designated carrier.

3.3 Payment. Payments for Products invoiced under Section 3.2 above shall be due
net [***]*** days from the date of Grifols’ valid invoice. All payments shall be
submitted by Cadence to Grifols at the address specified in Section 14.1 (or at
such other address as Grifols shall direct from time to time in accordance with
Section 14.1).

3.4 Payment Denominations. Payments made under this Agreement shall be made in
Euros. All payments shall be made by wire transfer to such U.S. or non-U.S. bank
account(s) as Grifols shall designate.

3.5 Shipment; Title; Transport.

(a) General. The Product shall be shipped EXW (as defined in INCOTERMS, 2010)
Parets del Vallès, Barcelona, Spain, with title and risk of loss determined in
accordance with Section 3.5(b) of this Agreement below. Shipping, insurance, and
related charges consistent with this Section 3.5(a) will be included as separate
line items in each invoice for the Product provided to Cadence. Grifols shall be
responsible for contacting the freight provider designated by Cadence and
coordinating with such freight provider the delivery of the Product on or before
the Delivery Date and to the destination designated by Cadence. Grifols shall be
responsible for loading the Product to be shipped with the designated freight
provider and for customs export clearance. All Product, when delivered to the
freight provider, shall be warranted as to comply with the Specifications.

(b) Title/Risk of Loss. Title to and risk of loss with respect to any Products
shall pass from Grifols to Cadence when such Products are picked up by the
freight provider specified by Cadence at the Facility. All Products delivered to
Cadence shall be free and clear of any liens and encumbrances.

(c) Shelf Life. All Products sold to Cadence hereunder shall, as of the Delivery
Date for each such Product, have a shelf-life [***].

 

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3.6 Taxes.

(a) Cadence shall pay and otherwise be responsible for all applicable sales,
Product, services, and transfer taxes in connection with any payment made by
Cadence pursuant to this Agreement.

(a) Any income or other tax that one Party hereunder is required to withhold and
pay on behalf of the other Party hereunder with respect to amounts payable under
this Agreement shall be deducted from and offset against said amounts prior to
payment to the other Party; provided, however, that in regard to any tax so
deducted, the Party making the withholding shall give or cause to be given to
the other Party such assistance as may reasonably be necessary to enable that
other Party to claim exemption therefrom or credit therefore, and in each case
shall furnish the Party on whose behalf amounts were withheld, proper evidence
of the taxes paid on its behalf. Each Party shall comply with reasonable
requests of the other Party to take any proper actions that may minimize any
withholding obligation.

(b) PDUFA Fees: If applicable, Grifols shall comply with the Prescription Drug
User Fee Act and shall reasonably cooperate with Cadence and reasonably assist
Cadence in complying with same. Without limiting the generality of the
foregoing, Grifols shall be responsible for the payment of any fees required
under such act to be paid by Grifols, including without limitation with respect
to (a) facilities to produce a finished dosage form of a human drug,
(b) ownership, submission use or reference to a drug master file, and (c) to the
extent resulting from changes to the manufacture or supply of the Product, prior
approval supplements (the “PDUFA Fees”). Notwithstanding the foregoing, Cadence
shall reimburse Grifols for that portion of any payments of PDUFA Fees made by
Grifols that are directly related to the manufacture of the Product, but shall
not be required to reimburse Grifols for (a) any PDUFA Fees related to changes
to the manufacture or supply of Product proposed by Grifols, or (b) any PDUFA
Fees, or portions thereof, related to the manufacture of products other than the
Product.

ARTICLE IV

MANUFACTURE OF PRODUCT

4.1 Standards. Grifols shall procure all Materials, manufacture, test, package,
store, label, release and deliver the Product in accordance with the
Specifications, together with, as applicable, and in all material respects, the
cGMPs, Applicable Laws and the Quality Agreement. Grifols shall at all times
during the Term maintain the Facility in compliance with all Applicable Laws,
rules and regulations, including but not limited to the cGMPs, and any
environmental and health and safety laws. Grifols shall be responsible for all
costs and expenses related to maintaining the Facility in compliance with such
Applicable Laws.

4.2 Specification Changes.

(a) General. Cadence or Grifols may request a Specification change for the
purpose of maintaining high standards for the Product, or for the purpose of
complying with the Applicable Laws, in which event the Parties shall discuss in
good faith the implementation of any such requested changes; provided, however,
that no Specification change shall be made without the prior written consent of
Cadence’s authorized quality assurance representative.

(b) Procedure. If a Party feels that a Specification change is required, that
Party shall provide a written notice of the required change to the other Party,
which notice shall contain reasonably adequate details regarding the reasons for
such change and the nature and extent of the requested change. Both Parties
shall in good faith consider the merits of the requested change before deciding
to pursue or not pursue the requested change. Once Cadence decides to implement
a Specification change, both Parties will cooperate in effecting the
Specification change on a timely basis in accordance with the procedures for
such changes set forth in the Quality Agreement.

 

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(c) Payment. If any Specification change can reasonably be demonstrated to
materially increase or decrease Grifols’ cost of producing any of the Products,
then upon the mutual agreement of the Parties, the Purchase Price for the
Product shall be increased or decreased by the amount of the demonstrated
increase or decrease, as the case may be, in Grifols’ cost of production.

(d) Labeling and Packaging. From time to time Cadence may require labeling or
packaging changes that will affect the Products. These changes may either be
initiated by Cadence, pursuant to this Section 4.2, or may be a requirement
resulting from cGMP changes. Notwithstanding anything herein to the contrary,
the prior, written approval of Cadence’s authorized quality representative shall
be required for the form and content of all such labeling or packaging changes
prior to their implementation and use in connection with the Products, and
thereafter Grifols shall be responsible for ensuring that all such changes are
accurately reflected and/or incorporated in the labeling and packaging for the
Products, in accordance with the procedures for such changes set forth in the
Quality Agreement. The costs associated to any labeling and/or packaging change,
as set forth in Exhibit C, shall be borne by Cadence, unless such changes are
requested by Grifols.

4.3 Validations and Stability Studies. Grifols shall perform all validations and
stability studies required by the Specifications, cGMPs, Applicable Laws, and
the Quality Agreement in connection with the regular course of manufacturing the
Products for commercial supply, subject to the prior written approval of
Cadence’s authorized quality assurance representative of all such studies,
including the protocols and methodology therefor. Cadence shall pay Grifols
reasonable fees for performing such studies in accordance with the schedule set
forth in Exhibit C to this Agreement (the “Service Fees”).

4.4 Materials.

(a) Finished Products Supply. During the Term, Grifols shall obtain such
Materials, at such times, and in such amounts, as shall be necessary in order
for Grifols to timely produce and deliver to Cadence in accordance herewith the
quantities of the Products required by Cadence as reflected in the then current
Quarterly Forecast including, without limitation, the active pharmaceutical
ingredient (paracetamol, or acetaminophen). Grifols shall obtain the Materials
for the Products produced under this Agreement only from suppliers named in the
approved Drug Application or Specifications for the Product, where applicable,
and all Materials shall comply with the applicable Specifications. Grifols shall
perform all testing of Materials required by the applicable Materials
Specifications.

(b) Materials Certifications. Grifols shall prepare or cause to be prepared by
its suppliers, as the case may be, all certifications as to any Materials
required by the Specifications, cGMPs, Regulatory Acts, Applicable Laws or the
Quality Agreement (each, a “Materials Certification”).

(c) Production Schedule. During the Term, Grifols shall manufacture the Products
at such times, and in such amounts, as shall be necessary in order for Grifols
to timely deliver to Cadence in accordance the Firm Order portion of each
Quarterly Forecast.

4.5 Quality Agreement.

The Parties shall work together in good faith to develop and execute a mutually
acceptable Quality Agreement for the Products within six (6) months following
the Effective Date (the “Quality Agreement”). The terms contained in the Quality
Agreement are intended to complement the terms of this Agreement, and they shall
be interpreted as complementary to the extent possible. In the event of a
conflict between the terms of the Quality Agreement and the terms of this
Agreement, the terms of this Agreement shall control; provided, however, the
inclusion of a particular term or level of detail in the Quality Agreement where
such term or level of detail is absent from this Agreement shall not be deemed
to constitute a conflict between the two agreements. Only where competing terms
in the two agreements conflict in terms of the principal focus of an express
prescription or prohibition in the agreements shall a conflict between the two
agreements be deemed to exist.

 

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ARTICLE V

QUALITY CONTROL, TESTING AND QUALITY ASSURANCE

5.1 Technology Transfer. Cadence shall assist Grifols with the transfer of the
relevant manufacturing and analytical technology required to manufacture the
Product at the Facility, to the extent such transfer is consistent with
Cadence’s legal obligations to any Third Parties. All costs related to the
technology transfer shall be borne by Cadence in accordance with Exhibit E.

5.2 Testing. All Product testing required to be performed by Grifols hereunder
shall be performed in accordance with the Specifications and the Quality
Agreement. Grifols shall perform all quality control testing and evaluation of
Materials, and Grifols shall promptly notify Cadence in writing of all formal
Quality Assurance investigations undertaken with respect to the Product or any
Materials used or intended to be used to manufacture the Product.

5.3 In-Process and Finished Product Testing. Grifols will perform in-process and
finished Product testing, including sterility, using the approved Specifications
and validated or otherwise qualified methods of analysis as provided in the
approved Drug Application and the Quality Agreement.

5.4 Quality Assurance. Grifols is responsible for establishing and maintaining
Product specific manufacturing and testing documentation and standard operating
procedures.

5.5 Deviations and Investigations. Any deviations from the process during
manufacture, including but not limited to, batch record execution, environmental
monitoring excursions or aseptic processing procedures shall be documented. Any
such deviation which may impact the safety, identity, strength, purity, or
quality of the Products shall be promptly reported to Cadence and fully
investigated as provided in the Quality Agreement.

5.6 Batch Disposition; Inspection; Returns. Cadence may, at its expense, inspect
and test each shipment of the Product within [***]*** after receipt at Cadence’s
designated destination in the Territory. Cadence shall have the right to reject
any shipment, if Cadence determines that (i) the Product does not conform to the
Specifications or the Applicable Laws, or (ii) the related Manufacturing Batch
Record does not demonstrate Product compliance with the cGMPs. Prior to any such
return, Cadence shall request a return authorization from Grifols, which
authorization shall not be unreasonably withheld or delayed, and the return of
such Product shall be made in accordance with such authorization. Any Product
that Cadence has not rejected within such [***] day-period shall be deemed
accepted; provided, however, that if the discovery of any non-conformity of the
Product could not reasonably have been discovered until after such [***]
day-period, Cadence may reject the shipment, provided that such rejection occurs
reasonably promptly following Cadence’s discovery of such non-conformity. In the
event that any Product is rejected by Cadence in accordance herewith:

(a) if Cadence has not paid for the rejected Product, Cadence shall not be
required to pay Grifols for such Product; or

 

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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(b) if Cadence has paid Grifols for the rejected Product, at Cadence’s election,
Grifols shall either promptly refund the applicable Purchase Price to Cadence or
use commercially reasonable efforts to promptly replace the rejected Product.

(c) Grifols shall be responsible for all expenses relating to the destruction or
return of Products to the destination designated by Grifols.

If Grifols and Cadence do not agree on the return of Product, then either Party
may refer the matter for final analysis to a specialized laboratory of
recognized reputation acceptable to both Parties for the purpose of determining
the results (the “Laboratory”). The determination of the Laboratory with respect
to all or part of any Product shall be final and binding upon the Parties. The
fees and expenses of the Laboratory making such determination shall be borne by
Cadence if the Product is determined to be conforming, and Grifols if the
Product is determined to be non-conforming, to the Specifications, Applicable
Laws and/or Product warranty. For the avoidance of doubt, Product accepted by
Grifols as not meeting the applicable Specifications, Applicable Laws and
Product warranty, or which are determined by the Laboratory not to meet such
Specifications, Applicable Laws and Product warranty, shall be destroyed by
Cadence, at Grifols’ expenses.

5.7 Product Recalls. If a Product recall results from: (i) the failure of any
Product, packaging or labeling supplied hereunder to conform to the
Specifications or to comply with the Applicable Laws, cGMP, the terms of this
Agreement or the Quality Agreement, at the time such Product was delivered to
the carrier, for any reason other than due to mishandling of such Product that
occurred after delivery by Grifols to Cadence’s designated carrier; (ii) any
claim of failure by Grifols to comply in any material respects with Applicable
Laws that apply to Grifols in relation to Grifols’ activities under this
Agreement; or (iii) any negligent, grossly negligent or willful act or omission
by Grifols, including without limitation the negligent or grossly negligent
manufacture of the Product by Grifols; then Grifols shall: (x) credit to Cadence
an amount equal to the total purchase price paid by Cadence to Grifols for the
Product so recalled, including all shipping costs, taxes, fees and duties;
(y) reimburse Cadence for the reasonable expenses of conducting its recall
action (e.g. advertising, mailing, Product shipment, administration, Product
destruction, etc.); and (z) indemnify and hold harmless Cadence and each other
Cadence Indemnitee from and against any and all Losses suffered by such Cadence
Indemnitee arising from or related to such recall.

(a) If a Product recall results from: (i) a defect in the Product that is solely
due to mishandling of such Product after delivery by Grifols to Cadence’s
designated carrier; (ii) the inadequate or misleading nature of any text
specified by Cadence that appears on the packaging or labeling of the Product;
or (iii) any negligent, grossly negligent or willful act or omission by Cadence;
then Cadence shall indemnify, defend and hold harmless Grifols and each other
Grifols Indemnitee from and against any and all Losses suffered by such Grifols
Indemnitee arising from or related to such recall.

(b) The rights and remedies available to each Party under this Section 5.7 are
not exclusive and shall be in addition to all other right and remedies available
to such Party at law and in equity.

5.8 Product Complaints. It is expected that all Product complaints will be
received by Cadence. However, if Grifols receives any Product complaints,
Grifols shall promptly notify Cadence of any and all complaints of which Grifols
becomes aware relating to any Product, and shall forward to Cadence’s designated
quality representative a copy of any such written complaint, or a written
summary of any such oral complaint, received by Grifols. Cadence shall promptly
inform Grifols of any and all complaints that Cadence receives which implicate
Grifols’ manufacturing or other processes at the Facility. Notification shall be
given by email, with a facsimile confirmation immediately following. Grifols
shall thoroughly and promptly investigate all complaints relating to the Product
and provide Cadence’s designated quality representative with all relevant
information, data and conclusions regarding such investigation.

 

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5.9 Adverse Events. For the purposes of this Agreement, “Adverse Event” shall
mean any adverse event associated with the use of any Product in humans, whether
or not considered drug-related, that is, or is thought by the reporter to be,
serious or associated with relevant clinical signs or symptoms. Cadence shall be
responsible for complying with all pharmacovigilance obligations related to the
Product in the Territory, including the maintenance of a safety database, and
for the collection, evaluation and reporting of safety data regarding the
Product for the Territory as required under Applicable Law. However, if Grifols
receives any Adverse Event notifications, Grifols shall notify Cadence promptly
following Grifols’ receipt of written information of an Adverse Event and shall
disclose to Cadence any and all information it has regarding that Adverse Event.
To the extent an Adverse Event of which Cadence becomes aware implicates
Grifols’ manufacturing or other processes at the Facility, Cadence shall inform
Grifols of such Adverse Event and shall disclose to Grifols any information it
has regarding that Adverse Event.

5.10 Retained Samples. Grifols shall retain samples from each batch of Products
for the period specified by Cadence’s authorized quality assurance
representative, or such longer period required by the Applicable Laws for record
keeping, testing and regulatory purposes. The costs associated with retained
samples shall be borne by Cadence in accordance with Exhibit C.

ARTICLE VI

REGULATORY MATTERS

6.1 Manufacturing Consents. Grifols currently holds, and at all times during the
Term shall hold, all Consents required by Grifols for the performance of its
obligations under this Agreement.

6.2 Product Consents. Cadence shall, at its expense, obtain and maintain any
Consents which may from time to time be required by any Governmental Body with
respect to ownership of the Drug Applications, or with respect to the marketing,
distribution, clinical investigation, import or export of the Products. Cadence
shall be responsible for responding to all requests for information related to
such Consents made by, and making all legally required filings relating to such
Consents with, any Governmental Body having jurisdiction to make such requests
or require such filings. In the event any Consent held by Cadence relating
directly to any of the Products is hereafter suspended or revoked, Cadence shall
promptly notify Grifols of the event and shall promptly inform Grifols of the
impact on Cadence’s purchases of the affected Product and Cadence’s general
intentions with respect to the affected Product.

6.3 Drug Application Documentation. Cadence shall be responsible for submitting
a Drug Application to the FDA and to Health Canada, with respect to the addition
of the Facility as a source for the Product. Grifols shall provide all
documents, information, data and technical assistance required by Cadence to
complete and obtain approval for such Drug Applications.

6.4 Regulatory Changes. The Parties shall promptly notify each other of any
material revisions or amendment of or additions to cGMPs and confer with each
other with respect to the best means to comply with such requirements.

 

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6.5 Regulatory Inspections. If either Party is notified that any Product or
Facility will be subject to an inspection by any Governmental Body, such Party
shall promptly notify the other Party of its receipt of such notification, and
both Parties shall thereafter cooperate fully with any such inspection to the
extent required by Applicable Laws.

6.6 Debarment. In the event that during the Term of this Agreement Grifols
becomes debarred under the provisions of the Generic Drug Enforcement Act of
1992, 21 U.S.C. § 335(a) and (b), or receives notice of an action or threat of
an action with respect to its debarment, Grifols shall immediately notify
Cadence thereof.

6.7 Product Release to the Market. Following its acceptance of the Product and
all documentation required to be provided by Grifols under the Quality Agreement
(including, without limitation, a certificate of compliance from Grifols),
Cadence or its designee shall be responsible for releasing batches of the
Product for commercial sale in the Territory.

ARTICLE VI

IINTELLECTUAL PROPERTY

7.1 Grant of Licenses; Ownership of Inventions.

(a) From Cadence to Grifols. Subject to the terms and conditions of this
Agreement, Cadence hereby grants to Grifols a non-exclusive, royalty-free
license, with no right to sublicense, to make the Product during the Term, under
the Cadence Intellectual Property, solely to the extent necessary for Grifols to
perform Grifols’ obligations to manufacture the Product for Cadence, Cadence’s
Affiliates and sublicensees, under this Agreement. Such license shall be subject
and subordinate to the IV APAP Agreement and the Pharmatop License Agreement.
BMS shall be an express third party beneficiary of Grifols’ obligations under
the license granted herein that relate to compliance with the terms and
conditions of the IV APAP Agreement, with the express right to enforce the same
directly against Grifols. The license granted herein shall terminate immediately
upon the first to terminate of this Agreement, the IV APAP Agreement, or the
Pharmatop License Agreement.

(b) From Grifols to Cadence. Subject to the terms and conditions of this
Agreement, Grifols hereby grants to Cadence a nonexclusive, royalty-free
license, with a right to sublicense to Cadence’s Affiliates and sublicensees, to
make, have made, use, sell, offer for sell and import the Product under Grifols
Intellectual Property, to the extent that such Grifols Intellectual Property is
used in the manufacture of the Product under this Agreement. The license granted
herein shall terminate immediately upon the termination of this Agreement.
Notwithstanding the foregoing, the Grifols License shall survive if this
Agreement is terminated by Cadence pursuant to Sections 13.2 (b) or 13.2(c) of
this Agreement.

(c) Ownership of Inventions. Cadence shall be the sole owner of any proprietary
technology, know-how or other proprietary rights developed by Grifols in the
course of its activities under this Agreement, whether developed solely by
Grifols or jointly between Grifols and Cadence (“Inventions”), and Cadence shall
be entitled to apply for patent protection for such Inventions at Cadence’s
expense and risk. Grifols shall fully cooperate with Cadence in completing any
patent applications relating to Inventions, and executing and delivering any
instrument required to assign, convey or transfer to Cadence such interests in
the Inventions. All employees, consultants, subcontractors and agents performing
services for Grifols under this Agreement shall have assigned in writing to
Grifols all of their right, title and interest in, to and under any and all such
Inventions so as to effectuate the provisions of this Section 7.1(c), and
Grifols shall be responsible for any compensation required to be paid to such
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(d) No right or license under any Cadence Intellectual Property or Grifols
Intellectual Property or any Product Trademark or other mark is granted or shall
be granted by implication as a result of the respective rights of the Parties
under this Agreement. All such rights or licenses are or shall be granted only
as expressly provided in this Agreement

ARTICLE VIII

INFORMATION; ACCESS; AUDIT RIGHTS

8.1 Provision of Information. From time to time during the Term, Grifols shall
provide Cadence with such information as Cadence shall reasonably request,
including copies (in electronic or hard-copy form, as requested by Cadence) of
all data and reports, relative to Grifols’ purchase of the Materials and the
manufacture and supply of the Product pursuant to this Agreement, including but
not limited to (a) all Product data in its control, including testing and
release results, Product complaint test results and all investigations, and
(b) Product inventory reports detailing (i) Grifols’ raw materials inventory,
(ii) work-in-progress, and (iii) scrapped goods.

8.2 Audit and Inspection Rights. Subject to the confidentially obligations of
Article XII, Cadence and the Cadence Licensors shall have the right to audit and
inspect the Facility including, without limitation, all inventory of Products
and Materials located at the Facility. Such audits or inspections shall occur
during business hours and shall be scheduled by Cadence, at least, ten
(10) Business Days in advance of Cadence’s written notice thereof; provided,
however, that in the event of an Adverse Event or Product complaint that
implicates Grifols’ manufacturing or other processes at the applicable Facility
or any proposed or actual inspection by the FDA or other Governmental Body, at a
Facility, Cadence shall have the right during normal business hours upon prior
oral or written notice to Grifols of five (5) Business Days to conduct an audit
or inspection hereunder of the Facility. Cadence’s audit and inspection rights
under this Section 8.2 shall not extend to any portions of any Facility,
documents, records or other information that do not relate to the Products or
Materials. Grifols may redact confidential information relating to Third Parties
and their products or materials from any documents deliverable to Cadence in
connection with Cadence’s exercise of its audit and inspection rights hereunder.

8.3 Documentation. Each Party shall maintain, in accordance with and for the
period required under cGMPs, all other Applicable Laws, rules and regulations,
and the Quality Agreement, complete and adequate records pertaining to the
methods and facilities used for the manufacture, processing, testing, packing,
labeling, holding and distribution of the Products.

ARTICLE IX

REPRESENTATIONS AND WARRANTIES

9.1 Representations and Warranties of Grifols. Grifols represents and warrants
to Cadence that:

(a) Organization and Authority. Grifols is a duly organized, validly existing
and in good standing under the laws of Spain. Grifols has full corporate power
and authority to execute and deliver this Agreement and effect the transactions
contemplated hereby and has duly authorized the execution, delivery and
performance of this Agreement and the transactions or documents contemplated
hereby by all necessary corporate action. Grifols has all corporate power and
authority necessary to own its assets and carry on its business as it is now
conducted. Grifols is duly licensed or qualified to do business and is in good
standing in Spain and each other jurisdiction in which its operations or
ownership of assets in connection with this Agreement requires such licensing or
qualification, except where the failure to obtain such license or qualification
would not have a material impact on Grifols’ operations or business. This
Agreement is the valid and legally binding obligation of Grifols, enforceable
against it in accordance with its terms, subject to applicable bankruptcy
moratorium, reorganization, insolvency and similar laws of general application
relating to or affecting the rights and remedies of creditors generally and to
general equitable principles (regardless of whether in equity or at law).

 

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(b) Consents; No Violations. The execution, delivery and performance by Grifols
of this Agreement and the consummation by Grifols of the transactions
contemplated hereby will not require any notice to, filing with, or the consent,
approval or authorization of, any Person or Government Body, except as has
already been obtained by Grifols. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
(i) violate or result in a breach or result in the acceleration or termination
of, or the creation in any Third Party of the right to accelerate, terminate,
modify or cancel, any material indenture, contract, lease, sublease, loan
agreement, note or other obligation or liability to which Grifols is a party or
by which Grifols is bound or to which any of the Grifols Intellectual Property
is subject, (ii) conflict with, violate or result in a breach of any provision
of the organizational documents of Grifols, or (iii) conflict with or violate,
in any material respect, any Applicable Law.

(c) Litigation. There are no lawsuits, claims or any civil, administrative or
criminal actions, suits, or proceedings or governmental investigations existing,
pending, or to the knowledge of Grifols, threatened, with respect to the Grifols
Intellectual Property or with respect to this Agreement or the transactions
contemplated hereby. To Grifols’ knowledge, Grifols is not subject to any decree
or order of any Government Body that would impair or delay its ability to
perform its obligations under this Agreement.

(d) Debarment. Neither Grifols nor any of its officers, employees, or
consultants has been convicted of an offense under (i) either a federal or state
law that is cited in 21 U.S.C. § 335(a) as a ground for debarment, denial of
approval, or suspension, or (ii) any other law cited in any comparable
Regulatory Act as a ground for debarment, denial of approval or suspension.

(e) Regulatory Consents. Grifols has all material government approvals, permits
and licenses necessary for the performance of its obligations hereunder. All
such approvals, permits and licenses are in full force and effect.

(f) Compliance. Grifols shall, in connection with its performance under this
Agreement, comply with all Applicable Laws, including, without limitation, the
United States Foreign Corrupt Practices Act. Further, the manufacture,
generation, processing, distribution, transport, treatment, storage, disposal
and other handling of any Materials or Products by Grifols until delivery to a
carrier or freight forwarder shall be in accordance with and conform to the
Specifications, and, as applicable, in all materials respects, cGMPs and all
Applicable Laws.

(g) Intellectual Property. Grifols acknowledges and agrees that (i) it has been
informed that the Product is to be made subject to the IV APAP Agreement,
(ii) it will only use the Cadence Intellectual Property for the benefit of
Cadence and its Affiliates, and (iii) it will not manufacture the Product for
marketing, sale or distribution in the Territory by any Third Party. Further,
Grifols agrees that it shall not take any act or step impairing Cadence’s
Intellectual Property, or do anything that may otherwise adversely affect the
Cadence Intellectual Property.

(h) Warranty Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, GRIFOLS
MAKES NO WARRANTIES IN THIS AGREEMENT OR THE QUALITY AGREEMENT, EXPRESS OR
IMPLIED, WITH RESPECT TO THE PRODUCTS, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF NON-INFRINGEMENT, WARRANTY OF MERCHANTABILITY OR WARRANTY OF FITNESS
FOR A PARTICULAR PURPOSE.

 

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9.2 Representations and Warranties of Cadence. Cadence represents and warrants
to Grifols that:

(a) Organization and Authority. Cadence is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Cadence
has full corporate power and authority to execute and deliver this Agreement and
effect the transactions contemplated hereby and has duly authorized the
execution, delivery and performance of this Agreement and the transactions or
documents contemplated hereby by all necessary corporate action. Cadence has all
corporate power and authority necessary to own its assets and carry on its
business as it is now conducted. Cadence is duly licensed or qualified to do
business and is in good standing in each other jurisdiction in which its
operations or ownership of assets in connection with this Agreement requires
such licensing or qualification. This Agreement is the valid and legally binding
obligation of Cadence, enforceable against it in accordance with their terms,
subject to applicable bankruptcy moratorium, reorganization, insolvency and
similar laws of general application relating to or affecting the rights and
remedies of creditors generally and to general equitable principles (regardless
of whether in equity or at law).

(b) Consents; No Violations. The execution, delivery and performance by Cadence
of this Agreement and the consummation by Cadence of the transactions
contemplated hereby will not require any notice to, filing with, or the consent,
approval or authorization of, any Person or Government Body, except as has
already been obtained by Cadence. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
(i) violate or result in a breach or result in the acceleration or termination
of, or the creation in any Third Party of the right to accelerate, terminate,
modify or cancel, any indenture, contract, lease, sublease, loan agreement, note
or other obligation or liability to which Cadence is a party or by which Cadence
is bound or to which any of the Cadence Intellectual Property is subject,
(ii) conflict with, violate or result in a breach of any provision of the
organizational documents of Cadence, or (iii) conflict with or violate any
Applicable Laws.

(c) Litigation. There are no lawsuits, claims or any civil, administrative or
criminal actions, suits, or proceedings or governmental investigations existing,
pending, or to the knowledge of Cadence, threatened, with respect to the Cadence
Intellectual Property or with respect to this Agreement or the transactions
contemplated hereby. Cadence is not subject to any decree or order of any
Government Body that would impair or delay its ability to perform its
obligations under this Agreement.

(d) Regulatory Consents. Cadence has all government approvals, permits and
licenses necessary for the performance of its obligations hereunder. All such
approvals, permits and licenses are in full force and effect.

(e) Compliance. Cadence shall, in connection with its performance under this
Agreement, comply with all Applicable Laws, including, without limitation, the
United States Foreign Corrupt Practices Act.

ARTICLE X

LIABILITY AND INDEMNIFICATION

10.1 Indemnity by Grifols. Grifols shall indemnify, defend and hold Cadence and
its Affiliates, and each of their respective directors, officers, employees and
agents (each, a “Cadence Indemnitee”) harmless from and against all Losses
suffered by the Cadence Indemnitees or sublicensees to the extent such Losses
arise from, are based upon, or are caused by: (a) any breach or nonperformance
of any of Grifols’ covenants, obligations, representations or warranties under
this Agreement; (b) Grifols’ failure to obtain, maintain or comply in any
respect with any of its Consents which are required to perform any of its
obligations hereunder or under the Regulatory Acts or other Applicable Laws;
(c) any violation of Applicable Laws by Grifols in the performance of its
obligations hereunder; or (d) any actual or alleged infringement or
misappropriation of any Intellectual Property rights of any Third Party relating
to the manufacturing processes or equipment used by Grifols to manufacture the
Product. The foregoing indemnification obligations shall not apply to the extent
any particular Loss is a direct result of (i) the negligence, gross negligence
or intentional misconduct of a Cadence Indemnitee or sublicensee; or (ii) any
matter for which Cadence is obligated to indemnify Grifols pursuant to
Section 10.2 of this Agreement.

 

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10.2 Indemnity by Cadence. Cadence shall indemnify, defend and hold Grifols and
each Grifols Affiliate and their respective directors, officers, employees and
agents (each a “Grifols Indemnitee”) harmless from and against all Losses
suffered by the Grifols Indemnitees to the extent that such Losses arise from,
are based upon, or are caused by: (a) Cadence’s failure to obtain, maintain or
comply in any respect with any of its Consents that are required to perform any
of its obligations hereunder, or under the Regulatory Acts or other Applicable
Laws; (b) any breach or non-performance of any of Cadence’s covenants,
obligations, representations or warranties under this Agreement; (c) any product
liability claims arising from Product or its use, or allegedly caused by the
Product; or (d) any actual or alleged infringement or misappropriation of any
Intellectual Property rights of any Third Party concerning the Product. The
foregoing indemnification obligations shall not apply in each case to the extent
any particular Loss is a direct result of (i) the negligence, gross negligence
or intentional misconduct of a Grifols Indemnitee or (ii) any matter for which
Grifols is obligated to indemnify Cadence pursuant to Section 10.1 of this
Agreement.

10.3 Procedures. Any indemnification of Grifols, Grifols Affiliates, Cadence, or
Cadence Affiliates hereunder shall include and extend to the benefit of their
respective shareholders, directors, officers and employees. Any person that may
be entitled to indemnification under this Agreement (an “Indemnified Party”)
shall give written notice to the Person obligated to indemnify it (an
“Indemnifying Party”) with reasonable promptness upon becoming aware of any
facts upon which a claim for indemnification will be based; the notice shall set
forth such information with respect thereto as is then reasonably available to
the Indemnified Party. The Indemnifying Party shall have the right to undertake
the defense of any claim, demand, suit, action or proceeding by any Third Party
(a “Third Party Claim”) with counsel reasonably satisfactory to the Indemnified
Party and the Indemnified Party shall cooperate in such defense and make
available all records, materials and witnesses reasonably requested by the
Indemnifying Party in connection therewith at the Indemnifying Party’s expense.
If the Indemnifying Party shall have assumed the defense of the Third-Party
Claim with counsel reasonably satisfactory to the Indemnified Party, the
Indemnifying Party shall not be liable to the Indemnified Party for any legal or
other expenses (other than for reasonable costs of investigation) subsequently
incurred by the Indemnified Party in connection with the defense thereof. The
Indemnifying Party shall not be liable for any Third-Party Claim settled without
its consent, which consent shall not be unreasonably withheld or delayed. The
Indemnifying Party shall obtain the written consent of the Indemnified Party
prior to ceasing to defend, settling or otherwise disposing of any Third-Party
Claim if as a result thereof the Indemnified Party would become subject to
injunctive or other equitable relief or if the Indemnified Party may reasonably
object to such disposition of such Third-Party Claim based on a continuing
adverse effect on the Indemnified Party.

 

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ARTICLE XI

INSURANCE

11.1 Insurance Requirements. Each Party shall at all times maintain in full
force and effect, with financially sound and reputable carriers reasonably
satisfactory to the other Party, insurance policies in such amounts and with
such scope of coverage as are set forth on Exhibit D. Each Party shall provide
the other Party with evidence of such insurance from time to time upon the other
Party’s request. Neither Party shall terminate such insurance or otherwise allow
such insurance to lapse without providing the other Party with at least [***]***
prior written notice of such termination or expiration.

ARTICLE XII

CONFIDENTIALITY

12.1 Definition of “Grifols Confidential Information”. As used herein, the term
“Grifols Confidential Information” shall mean all confidential business and
technical communications, documents and other information, whether in written,
oral or other form, of Grifols or a Grifols Affiliate (whether relating to
Grifols, a Grifols Affiliate or any Third Party to which Grifols has an
obligation of confidentiality) that are disclosed or furnished to Cadence or a
Cadence Affiliate by Grifols or a Grifols Affiliate, or of which Cadence or a
Cadence Affiliate otherwise learn in connection with the negotiation or
performance of this Agreement.

12.2 Definition of “Cadence Confidential Information”. As used herein, the term
“Cadence Confidential Information” shall mean all confidential business and
technical communications, documents or other information, whether in written,
oral or other form, of Cadence, BMS, SCR Pharmatop or a Cadence Affiliate
(whether relating to Cadence, BMS, SCR Pharmatop, a Cadence Affiliate, or any
Third Party to which Cadence has an obligation of confidentiality) that are
disclosed or furnished to Grifols or a Grifols Affiliate by Cadence or a Cadence
Affiliate, or of which Grifols or a Grifols Affiliate otherwise learn in
connection with the negotiation or performance of this Agreement.

12.3 Treatment of Confidential Information. Both during the Term of this
Agreement and thereafter, Cadence shall treat all Grifols Confidential
Information and Grifols shall treat all Cadence Confidential Information in
accordance with the requirements of this Article XII. For convenience, Grifols
Confidential Information and Cadence Confidential Information are both referred
to herein as “Confidential Information” for purposes of establishing the
obligations of each Party with regard to the other Party’s Confidential
Information.

12.4 Nondisclosure. Confidential Information of the other Party shall be kept
strictly confidential by the receiving Party and, except as expressly permitted
herein, shall not be disclosed to any Third Party by the receiving Party in any
manner whatsoever including without limitation, any Affiliate, in whole or in
part, without first obtaining the other Party’s prior written consent to such
disclosure. The standard of care required of each Party in protecting the
confidentiality of the other Party’s Confidential Information shall be, at
least, the same standard of care that the receiving Party uses in protecting its
own confidential and trade secret information, but in no event shall either
Party use less than a reasonable standard of care. Confidential Information may
be used by the receiving Party only for the purpose of performing under this
Agreement.

 

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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12.5 Permitted Exceptions. Each Party may disclose the other Party’s
Confidential Information (i) to its employees or outside advisors and financing
sources in connection with this Agreement who reasonably need to know such
information for the purpose of advising or assisting it in connection with this
Agreement (each, a “Representative”), and (ii) to any Parties required under
operation of law. Prior to disclosing any Confidential Information to any
Representative pursuant to this Section 12.5, the receiving Party will inform
such Representative of the proprietary nature of the Confidential Information
and will require such Representative to agree in writing (except in the case of
outside legal advisors or auditors engaged to prepare a Party’s financial
statements, who may orally agree) to be bound by the requirements of this
Article XII and not to use or disclose the Confidential Information except as
permitted herein, or are bound by confidentiality obligations no less
restrictive than those set forth in this Article XII.

12.6 Use By the Receiving Party. Confidential Information of the other Party
shall not be utilized by a receiving Party except as expressly permitted herein,
without first obtaining the other Party’s prior written consent to such
utilization and without first entering into a separate agreement duly executed
by authorized representatives of the Parties hereto.

12.7 Excluded Information. Notwithstanding any provision herein to the contrary,
the requirements of this Article XII shall not apply to any information of
either Party which:

(a) at the time of disclosure hereunder is generally available to the public;

(b) after disclosure hereunder becomes generally available to the public, except
through breach of this Article XII by the receiving Party or its
Representatives;

(c) was not acquired directly or indirectly from the disclosing Party or its
Affiliates and which the receiving Party lawfully had in its possession prior to
disclosure by the disclosing Party;

(d) is independently developed by employees or agents of the receiving Party
without the use of the Confidential Information of the disclosing Party; or

(e) becomes available to the receiving Party from a Third Party that is not
legally prohibited from disclosing such Confidential Information, provided, to
the knowledge of the receiving Party, such information was not acquired directly
or indirectly from the disclosing Party or its Affiliates.

12.8 Notification of Mandatory Disclosure.

(a) Procedures. In the event that either Party is required by Applicable Law or
regulation or by judicial or administrative process to disclose any part of the
other Party’s Confidential Information, such Party shall (i) promptly notify the
other Party of each such requirement and identify the documents so required
thereby, so that the other Party may seek an appropriate protective order or
other remedy and/or waive compliance by the first Party with the provisions of
this Article XII, (ii) consult with the other Party on the advisability of
taking legally available steps to resist or narrow the scope of such
requirement, (iii) assist the other Party, at its expense, in seeking a
protective order or equivalent, and (iv) comply with any applicable protective
order or equivalent.

(b) Limitations. If, in the absence of such a protective order or such a waiver
by the other Party of the provisions of this Article XII, the first Party is
nonetheless required by mandatory Applicable Law to disclose any part of the
other Party’s Confidential Information, the first Party may disclose such of the
other Party’s Confidential Information without liability under this Agreement,
except that the first Party shall furnish only that portion of the other Party’s
Confidential Information which is legally required.

 

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12.9 Publicity. Neither Party shall issue any press release or otherwise make
any public statement, advertisement or disclosure with respect to this Agreement
without the prior written consent of the other Party, such consent not to be
unreasonably withheld; provided, however, that either Party shall be entitled to
make a public announcement of this Agreement after giving prior written notice
to the other Party hereto, if, in the opinion of the disclosing Party’s legal
counsel, such announcement is required by Applicable Laws.

12.10 Return of Confidential Information. At any time upon the request of the
other Party, to the extent such Confidential Information is not reasonably
necessary to enable a Party to perform its obligations under this Agreement, the
receiving Party shall promptly return to the other Party or destroy the other
Party’s Confidential Information, and shall destroy all copies thereof, together
with all notes, drawings, abstracts and other information relating to the other
Party’s Confidential Information prepared by the receiving Party or any of its
Representatives, regardless of the medium in which such information is stored;
provided, however, that the receiving Party may maintain a single archival copy
of the other Party’s Confidential Information in its files for purposes of
establishing the extent of disclosures by the other Party under this Agreement.
At either Party’s written request, such Party’s Confidential Information that is
otherwise required to be returned to it shall be destroyed by the receiving
Party and such destruction shall be certified in writing by an authorized
officer of the receiving Party. The return and/or destruction of such
Confidential Information as provided above shall not relieve the receiving Party
of its other obligations under this Article XII.

ARTICLE XIII

TERM; TERMINATION; REMEDIES

13.1 Term. This term of this Agreement shall commence on the Effective Date and
continue until the sixth anniversary of the date on which the first Drug
Application for the Product is approved by the FDA, unless earlier terminated in
accordance with the terms of Section 13.2 of this Agreement. The period,
commencing on the Effective Date and continuing through the date on which this
Agreement is terminated in accordance herewith, is herein referred to as the
“Term”.

13.2 Termination.

(a) Termination of the IV APAP Agreement. Cadence may terminate this Agreement
effective immediately upon any termination or expiration of the IV APAP
Agreement or the Pharmatop License Agreement.

(b) Material Breach. Either Party may terminate this Agreement effective upon
sixty (60) days prior written notice (or thirty (30) days prior written notice
in the case of a payment default) to the other Party, if the other Party commits
a material breach of this Agreement and fails to cure such breach by the end of
such sixty (60) day period (or thirty (30) day period in the case of a payment
default).

(c) Bankruptcy. Either Party may terminate this Agreement effective upon written
notice to the other Party, if the other Party becomes insolvent or admits in
writing its inability to pay its debts as they become due, files a petition for
bankruptcy, makes an assignment for the benefit of its creditors or has a
receiver, trustee or other court officer appointed for its properties or assets.

 

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(d) Discontinuance of Products. Cadence may terminate this Agreement at any time
in its sole discretion upon sixty (60) days prior written notice to Grifols in
the event that Cadence elects to discontinue distribution of all or
substantially all of the Products.

(e) Post-Termination Obligations; Closing Inventory. In the event this Agreement
is terminated for any reason, or otherwise expires at the conclusion of its
Term, Grifols shall promptly cease production of the Product and shall make no
further expenditures either for Materials or relative to the production of the
Product. Within thirty (30) days following the effective date of the termination
or expiration hereof, Grifols shall then provide Cadence with a closing
inventory of the Product in its possession, including a Materials inventory, a
work-in-process inventory, and a finished goods inventory. Cadence shall have
thirty (30) days following its receipt of the closing inventory to either accept
or reject the closing inventory as presented. If Cadence rejects the closing
inventory as presented and the Parties are unable to amicably resolve their
differences regarding the closing inventory, then the Parties shall agree upon
and engage an independent Third Party to prepare a substitute closing inventory.
Once the closing inventory (or the substitute closing inventory, as the case may
be) has been finalized in accordance herewith, Cadence shall, within thirty
(30) days thereof, pay Grifols a final inventory settlement payment in an amount
equal to the Purchase Price for all Product manufactured pursuant to a Firm
Order from Cadence, and Grifol’s cost for all unused Materials purchased by
Grifols to manufacture Product for the six-month period immediately following
the termination date, provided that the total quantity of such Materials is
consistent with the last forecast provided by Cadence, and provided further,
that orders for such Materials cannot be canceled or used by Grifols to
manufacture other pharmaceutical products. Notwithstanding anything in this
Agreement to the contrary, under no circumstances shall Cadence be obligated to
purchase any Product or Materials that fail to fully comply with all applicable
Specifications and Applicable Laws.

(f) Remedies; Injunctive Relief. Except as expressly set forth in this
Agreement, none of the remedies set forth in this Agreement are intended to be
exclusive, and each Party shall have available to it all remedies available
under law or in equity. In the event that either Cadence or Grifols breaches or
threatens to breach any provision of Article VII or Article XII of this
Agreement, the Parties agree that irreparable harm to the other Party should be
presumed and the damage to such Party would probably be very difficult to
ascertain and would be inadequate. Accordingly, in the event of such
circumstances, each of Cadence and Grifols agree that, in addition to any other
right and remedies available at law or in equity, the other Party shall have the
right to seek injunctive relief from any court of competent jurisdiction.

ARTICLE XIV

MISCELLANEOUS

14.1 Notices. In addition to the other specific procedures for notification
required herein, all notices, demands, requests and other communications made
hereunder shall be in writing and shall be given either by personal delivery, by
nationally recognized overnight courier (with charges prepaid), by electronic
transmission (provided such transmission shall include information from which it
can be determined that it was authorized by a Party hereto and the receipt of
such transmission is confirmed by telephone) or by facsimile transmission (with
telephone confirmation), and shall be deemed to have been given or made: (i) if
personally delivered, on the day of such delivery; (ii) if sent by overnight
courier, on the day following the date deposited with such overnight courier
service; (iii) if by electronic transmission, on the date transmitted on such
electronic medium; or (iv) if by facsimile transmission, on the date transmitted
to receiving facsimile machine and confirmed by telephone, in each case pending
the designation of another address, addressed as follows:

 

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If to Grifols:

Laboratorios Grifols, S.A.

Polígono Industrial Sector Z

C/ Logística, 2

08150 – Parets del Vallès – SPAIN

Attention: President

Tel. [***]***

Fax: [***]

With a copy (which shall not constitute notice) to:

Grifols International, S.A.

Avda. Generalitat, 152-158

Polígono Can San Joan

08174 – Sant Cugat del Vallès- SPAIN

Attention: Marketing Manager IV Therapy

Tel. [***]

Fax: [***]

If to Cadence:

Cadence Pharmaceuticals, Inc.

12481 High Bluff Drive, Suite 200

San Diego, CA 92130

Attention: Chief Commercial Officer

Facsimile: [***]

With a copy (which shall not constitute notice) to:

Cadence Pharmaceuticals, Inc.

12481 High Bluff Drive, Suite 200

San Diego, CA 92130

Attention: General Counsel

Facsimile: [***]

14.2 Independent Contractors. In the exercise of its obligations and in respect
of its rights and entitlements hereunder or in respect hereof, Cadence and
Grifols are and shall in all respects be treated as independent contractors with
respect to each other. Neither Party shall be deemed to be a co-venturer or
partner of the other. Neither Party is an employee or a legal representative of
the other Party for any purpose. Neither Party shall have the authority to enter
into any contracts in the name of or on behalf of the other Party.

14.3 Entire Understanding. This Agreement, including the Exhibits hereto, and
any other document identified herein, represents the entire understanding and
agreement between the Parties hereto with respect to the subject matter hereof,
and supersedes all prior and contemporaneous agreements and understandings
between the Parties with respect to such subject matter, which are hereby
expressly terminated.

14.4 Transferability; Binding Effect. Neither this Agreement, nor any of the
rights or obligations of a Party may be directly or indirectly assigned, sold,
delegated or otherwise disposed of without the prior written consent of the
other Party, which consent may not be unreasonably withheld; provided, however,
that either Party may assign this Agreement to an Affiliate or to a successor by
merger, acquisition, or sale of all or substantially all of such Party’s
business assets in the field to which this Agreement relates, without the other
Party’s consent.

 

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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14.5 Dispute Resolution. If the Parties fail to resolve any claim, dispute, or
controversy of whatever nature arising out of or relating to this Agreement,
including any question regarding its existence, validity, breach or termination
(a “Claim”), either Party may refer the dispute, by notice to the other Party,
to their respective officers designated below or such other officers as the
Parties may designate in writing from time to time, for attempted resolution by
good faith negotiations within thirty (30) days after that notice is received.
The designated officers are as follows:

 

For Grifols:

  

President

For Cadence:

  

Chief Commercial Officer

If such dispute is not solved by the end of the thirty (30) day period, the
dispute shall be settled by arbitration at the London Court of International
Arbitration in accordance with the UNCITRAL Arbitration Rules (“UNCITRAL Rules”)
then in effect, which rules are deemed to be incorporated by reference into this
Section 14.4, subject to the following:

(a) the arbitration tribunal shall consist of three arbitrators to be appointed
according to the UNCITRAL Rules;

(b) the language of the arbitration shall be English; and

(c) the decision of the arbitrators shall be final, binding, and conclusive upon
the Parties.

14.6 Amendment. Notwithstanding anything herein to the contrary, any amendment,
modification or supplement of or to any provision of this Agreement, including
the Exhibits and Schedules hereto, shall be effective only by written agreement
of the Parties.

14.7 Severability. If and to the extent that any court of competent jurisdiction
holds any provision (or any part thereof) of this Agreement to be invalid or
unenforceable, such holding shall in no way affect the validity or
enforceability of the remainder of this Agreement, and the invalid or
unenforceable provision shall be fully severed from this Agreement and there
shall automatically be added in lieu thereof a provision as similar in terms and
intent to such severed provision as may be legal, valid and enforceable.

14.8 Waiver. Any failure of Cadence or Grifols to comply with any obligation,
covenant, agreement or condition herein contained may be expressly waived, in
writing only, by the other Party hereto and such waiver shall be effective only
in the specific instance and for the specific purpose for which made or given.

14.9 Survival. Articles 10, 11, 12, and 14, and Sections 5.6 – 5.10, 7.1(b),
7.1(c), 8.3, 13.2(e), 13.2(f), and any other provision which by its terms
specifically shall so state, together with any obligation to make accrued but
unpaid payments due hereunder, shall survive the termination or expiration of
this Agreement.

 

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14.10 Headings; Exhibits and Schedules; Counterparts.

(a) Headings. The headings of the Sections of this Agreement are for reference
purposes only, are not part of this Agreement and shall not in any way affect
the meaning or interpretation of this Agreement.

(b) Exhibits and Schedules. All Exhibits and Schedules delivered pursuant to
this Agreement shall be deemed part of this Agreement and incorporated herein by
reference, as if fully set forth herein. All provisions contained in any Exhibit
or Schedule delivered by or on behalf of the Parties hereto, or in connection
with the transactions contemplated hereby, are an integral part of this
Agreement.

(c) Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.

14.11 Governing Law. This Agreement shall, for all purposes, be governed by,
construed and enforced in accordance with the laws of England and Wales, without
giving effect to any conflict of law rules. Neither the UNCITRAL Convention for
the International Sale of Goods, nor any other unified laws relating to the
conclusion and implementation of contracts for the international sale of goods,
shall apply.

14.12 Enforceability. Anything in this Agreement to the contrary
notwithstanding, this Agreement shall not have any force or effect unless and
until the Purchase Agreement shall have been validly executed and delivered by
all of the Parties thereto and have taken effect.

14.13 Force Majeure. Neither Party shall be liable for any failure to deliver or
receive or any delay in delivery or receipt when such failure or delay shall be
caused (directly or indirectly) by any contingency beyond such Party’s
reasonable control, including act of God (including fire, flood, earthquake or
other natural disaster); accident; explosion; equipment or machinery breakdown;
sabotage; strike, or any labor disturbance (regardless of the reasonableness of
the demands of labor); civil commotions; riots; invasions; terrorist acts, wars
(present or future); acts, restraints, requisitions, regulations, or directions
of any Governmental Body; voluntary or mandatory compliance with any request of
any Governmental Body; or voluntary or mandatory compliance with any request for
material represented to be for purposes of (directly or indirectly) producing
articles for national defense or national defense facilities.

14.14 Overdue Amounts. Any payments not made within the specified period of time
for payment hereunder shall incur an interest charge at the rate of one percent
(1%) per month, excluding any amounts that are subject to a bona fide dispute
between the Parties.

14.15 Limitation of Liability. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY,
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY, WHETHER FOR BREACH
OF CONTRACT, IN TORT, NEGLIGENCE, BREACH OF WARRANTY, STRICT LIABILITY, OR UNDER
ANY OTHER LEGAL THEORY, FOR ANY CONSEQUENTIAL OR PUNITIVE DAMAGES.

[Signature page follows]

 

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IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be
duly executed as of the date first written above.

 

Laboratorios Grifols, S.A.

By:

 

/s/ José Antonio García García

Name:

 

José Antonio García García

Title:

 

President

 

Cadence Pharmaceuticals, Inc.

By:

 

/s/ Theodore R. Schroeder

Name:

 

Theodore R. Schroeder

Title:

 

President and Chief Executive Officer

[Signature page to Manufacturing and Supply Agreement]

 

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EXHIBIT A

Specifications

Confidential/Trade Secret/Proprietary Information of

Cadence Pharmaceuticals, Inc.

Acetaminophen Injection, 10 mg/ml [***] (OFIRMEV®)

[***]    [***]    [***]    [***]

[***]

   [***]***    [***]    [***]

[***]

   [***]    [***]    [***]

[***]

   [***]    [***]    [***]

[***]

   [***]    [***]    [***]

[***]

   [***]    [***]    [***]

[***]

   [***]    [***]    [***]

[***]

   [***]    [***]    [***]

[***]

   [***]    [***]    [***]

[***]

   [***]    [***]    [***]

[***]

   [***]    [***]    [***]

[***]

   [***]    [***]    [***]

[***]

   [***]    [***]    [***]

[***]

   [***]    [***]    [***]

[***]

   [***]    [***]    [***]

[***]

   [***]    [***]    [***]

[***]

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

 

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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EXHIBIT B

Purchase Price

 

   

Table B

        

Purchase Price

(Euros;

        per Unit based on 50 Units        

per case)

   Quantity Purchased  

 

 

[***]

   [***]    

[***]***

   [***]  

 

1.

The Purchase Price set forth in Table B, above, shall be fixed for the first
Contract Year. Thereafter, no more frequently than [***], Grifols may adjust the
Purchase Price by delivering to Cadence not later than [***] days prior to the
beginning of each Contract Year, a revised Exhibit B, containing a proposal for
a revised Purchase Price in accordance with subsection (2) of this Exhibit B.
Grifols shall simultaneously provide to Cadence such information and
documentation as are reasonably sufficient to substantiate the proposed Purchase
Price adjustment. Upon the approval of same by both parties, any such adjusted
Purchase Price shall be effective for Product manufactured in the upcoming
Contract Year only.

 

2.

Adjustments to the Purchase Price may only be made as a result of: (a) [***] and
(b) [***].

 

3.

In the event that extraordinary circumstances outside of Grifols’ control result
in an increase in Materials costs incurred by Grifols, and as a result Grifols
wishes to propose an increase in the Purchase Price beyond the limits set forth
in paragraph (2) of this Exhibit B, the Parties may agree to negotiate in good
faith a temporary additional adjustment to the Purchase Price.

 

4.

Notwithstanding anything in this Exhibit B to the contrary, under no
circumstances shall adjustments to the Purchase Price be effective unless
mutually agreed upon by both Parties in writing.

 

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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EXHIBIT C

Additional Fees

 

Technology Services

 

[***]

     [ ***] 

[***]

     [ ***] 

[***]

     [ ***] 

[***]

     [ ***] 

[***]

     [ ***] 

Labeling / Packaging Changes*

 

[***]

     [ ***] 

[***]***

     [ ***] 

[***]

     [ ***] 

[***]

     [ ***] 

[***]

     [ ***] 

[***]

     [ ***] 

[***]

  

 

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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EXHIBIT D

Insurance Requirements

Comprehensive or Commercial General Liability in an amount not less than
(a) [***]***, and (b) [***].

 

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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EXHIBIT E

Technology Transfer Costs

Acetaminophen 10 mg/ml injection Cadence in 100 ml flexible bag [***] for US
market.

 

Item No.

   Description                         

[***]

   [***]               

[***]

   [***]***               

[***]

   [***]               

[***]

   [***]               

[***]

   [***]               

[***]

   [***]               

[***]

   [***]               

[***]

   [***]               

[***]

   [***]               

[***]

   [***]               

[***]

   [***]               

[***]

   [***]               

[***]

   [***]               

TOTAL                                                                 
                                                  [***]

General remarks:

This quotation applies to [***].

[***]

 

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

 

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PROJECT TIMELINE

 

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

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*** Certain information on this page has been omitted and filed separately with
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omitted portions.