EXHIBIT 10.2
 
LICENSE AND DISTRIBUTION AGREEMENT
between
CHIESI FARMACEUTICI S.p.A.
and
CORNERSTONE THERAPEUTICS INC.
Dated May 6, 2009
 
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

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TABLE OF CONTENTS

              Page
ARTICLE 1 DEFINITIONS
    2  
 
       
ARTICLE 2 GRANT
    6  
 
       
ARTICLE 3 OBLIGATIONS OF CORNERSTONE
    6  
 
       
ARTICLE 4 MARKETING AUTHORIZATION AND PHARMACOVIGILANCE
    8  
 
       
ARTICLE 5 SUPPLY AND MANUFACTURING
    10  
 
       
ARTICLE 6 FINANCIAL PROVISIONS
    16  
 
       
ARTICLE 7 MARKETING OF THE PRODUCT
    19  
 
       
ARTICLE 8 INTELLECTUAL PROPERTY
    20  
 
       
ARTICLE 9 REPRESENTATIONS, WARRANTIES AND COVENANTS
    23  
 
       
ARTICLE 10 INDEMNIFICATION
    25  
 
       
ARTICLE 11 CONFIDENTIALITY
    26  
 
       
ARTICLE 12 TERM AND TERMINATION
    27  
 
       
ARTICLE 13 GENERAL PROVISIONS
    29  

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LICENSE AND DISTRIBUTION AGREEMENT
     This LICENSE AND DISTRIBUTION AGREEMENT (this “Agreement”) is made as of
this 6th day of May, 2009 (the “Effective Date”) between Chiesi Farmaceutici
S.p.A. a company incorporated under the laws of Italy, with its principal place
of business at Via Palermo 26/A, 43100 Parma, Italy (“Chiesi”) and Cornerstone
Therapeutics Inc. a corporation incorporated under the laws of Delaware, with
its principal place of business at 1255 Crescent Green Drive, Suite 250, Cary,
North Carolina 27518, USA (“Cornerstone”, and together with Chiesi, the
“Parties”, each a “Party”).
WITNESSETH
     WHEREAS, Chiesi has developed the Product (hereinafter defined) and Chiesi
owns or Controls (hereinafter defined) the entire right, title and interest to
the Know-How (hereinafter defined) and the Trademark (hereinafter defined), all
of them relevant to the Product, and the right to their exploitation in the
Territory (hereinafter defined);
     WHEREAS, Chiesi had entered into a License and Supply Agreement dated as of
[***], as amended (the “Former Agreement”) with [***], pursuant to which Chiesi
granted [***] an exclusive license to use and sell the Product under the
Trademark in the Territory;
     WHEREAS, Chiesi and [***] have entered into an Amendment and Settlement
Agreement dated as of [***] (the “[***] Settlement Agreement”), pursuant to
which they have agreed, inter alia, to terminate the Former Agreement as of the
Transfer Date;
     WHEREAS, Cornerstone has experience in the distribution, marketing and
selling of ethical pharmaceutical specialties for respiratory diseases in the
Territory;
     WHEREAS, Chiesi and Cornerstone have entered into a Stock Purchase
Agreement of even date, pursuant to which Chiesi has agreed to purchase an
aggregate of 1,600,000 shares of Cornerstone’s common stock, par value $0.001
per share (the “Stock Purchase Agreement”);
     WHEREAS, Chiesi and Cornerstone have also agreed to enter into this
Agreement, pursuant to which Cornerstone will obtain a license from Chiesi for
the purpose of importing, storing, handling, promoting, distributing, marketing,
offering for sale and selling the Product under the Trademark in the Territory;
and
     WHEREAS, the Parties intend to enter into a separate Technical Agreement
(hereinafter defined) relating to the quality and technical aspects of the
Product and a separate Pharmacovigilance Agreement (hereinafter defined).
     NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and intending to be bound, and it being understood that the
above recitals shall be deemed to be incorporated into and form part of this
Agreement, the Parties hereby agree as follows:
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

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ARTICLE 1
DEFINITIONS
     1.1 “Act” means the US Federal Food, Drug and Cosmetic Act of 1938, the
Public Health Service Act of 1944 and the regulations promulgated under those
Acts, as may be amended from time to time.
     1.2 “Affiliate” shall mean, with respect to any person, any other person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with the person specified. For this
purpose, the term “control” (including the terms “controlling,” “controlled by”
and “under common control with”) means possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities, by contract or
otherwise.
     1.3 “Agency” means any applicable supra-national, federal, national,
regional, state, provincial or local regulatory agencies, departments, bureaus,
commissions, councils or other government entities regulating or otherwise
exercising authority with respect to the manufacture, packaging, labeling,
testing, release, storage, handling, sale, distribution or use of the Product,
including the FDA.
     1.4 “Applicable Laws” means the Act and other laws, rules and regulations,
(including any rules, regulations, guidelines or other requirements of any
Agency) applicable to the manufacture, packaging, labeling, testing, release,
storage, handling, sale, distribution or use of pharmaceutical products, as may
be in effect from time to time in the Territory.
     1.5 “Business Day” shall mean any day other than a Saturday, Sunday or
other day on which commercial banks located in New York City, New York are
required or permitted by law to be closed for the conduct of regular banking
business.
     1.6 “Calendar Month” shall mean a single month starting on the first day of
each month and ending on the last day of that same month. “Calendar Quarter”
shall mean the 3 month period beginning on January 1 and ending on March 31; the
period beginning on April 1 and ending on June 30; the period beginning on July
1 and ending on September 30; or the period beginning on October 1 and ending on
December 31.
     1.7 “Certificate of Analysis” shall mean, for each batch of Product
produced, a document prepared by Chiesi or its contract manufacturer setting
forth the measured and observable characteristics of Product for the batch, and
confirming that such batch meets the Specifications. Each Certificate of
Analysis shall include: (a) a listing of tests performed by or on behalf of
Chiesi or its contract manufacturer, test date(s), and test results, and a
certification of the accuracy of each of the foregoing; and (b) a reference to
or inclusion of the related Certificate of Compliance.
     1.8 “Certificate of Compliance” means a document identified as such, signed
by the senior quality manager, or designee, and provided by Chiesi or its
contract manufacturer to Cornerstone that states, certifies, warrants and
reflects that each batch of Product was produced and tested in compliance with
the Specifications, cGMPs, the master batch record and all other applicable
regulatory documents.

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     1.9 “Claims” shall mean all charges, complaints, actions, suits,
proceedings, hearings, investigations, claims and demands.
     1.10 “Controlled” or “to Control”, in relation to any Intellectual Property
Rights shall mean such Intellectual Property Rights in the possession (whether
by ownership, license or other right, other than pursuant to this Agreement) by
a Party or its Affiliates with the ability to grant to the other Party access
and/or a license (or sublicense) as provided herein under such right without
violating the terms of any agreement or other arrangement with any Third Party
and without requiring any further consent from such Third Party.
     1.11 “Field of Use” shall mean all indications approved under the approved
Marketing Authorization for the Product in the Territory as of the Transfer
Date.
     1.12 “First Commercial Sale” shall mean, with respect to the Product, the
first arm’s-length commercial sale for value to a Third Party after the Transfer
Date. Sales for investigator initiated trials, named patient programs, test
marketing, non-registrational studies or any similar instance where the Product
is supplied at cost or without charge shall not constitute a First Commercial
Sale. For clarity, First Commercial Sale shall not include the distribution of
demonstration or training units that are not able to be operated or intended to
be used as a Product.
     1.13 “Force Majeure” shall mean in relation to either Party any occurrence
beyond the reasonable control of that Party.
     1.14 “Improvement” shall mean any discovery, development, invention,
enhancement or modification, patentable or otherwise, relating to the Product,
including any analytical methodology, ingredients, preparation, presentation,
means of delivery or administration, use or packaging of the Product.
     1.15 “IND(s)” shall mean any investigational new drug application filed
with Regulatory Authorities in the Territory for approval to perform a clinical
trial.
     1.16 “Intellectual Property Rights” shall mean patents, trademarks,
Know-How, service marks, logos, trade names, rights in designs, copyright,
domain names, utility models and other intellectual property rights, whether
registered or unregistered, and including applications for registration, and all
rights or forms of protection having equivalent or similar effect in the
Territory.
     1.17 “Know-How” shall mean all information, procedures, instructions,
techniques, data, technical information, knowledge and experience (including
toxicological, pharmaceutical, clinical, non-clinical, medical data and health
registration data), designs, processing, specifications and technology to the
extent necessary to distribute, sell, or offer for sale the Product in the
Territory, whether in written, electronic or other form, as owned or Controlled
by Chiesi.
     1.18 “Losses” shall mean any and all damages (including all incidental,
consequential, statutory and treble damages), awards, deficiencies, settlement
amounts, defaults, assessments,

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fines, dues, penalties, costs, fees, liabilities, obligations, liens, losses,
and expenses (including court costs, interest and reasonable fees of attorneys,
accountants and other experts).
     1.19 “Marketing Authorization” shall mean all necessary regulatory and
governmental approvals and registrations, including NDA approvals, that are
required by an Agency to market, distribute, promote and sell the Product in the
Territory.
     1.20 “Marketing Authorization Application(s)” shall mean any or all
applications to a Regulatory Authority in the Territory in order to obtain
Marketing Authorization.
     1.21 “NDA” shall mean (a) the single application or set of applications for
approval and/or pre-market approval to make and sell commercially in the United
States a pharmaceutical product filed with the FDA, including all information
included in Drug Master Files (DMFs) related to such application(s), and any
related registrations with or notifications to the FDA, and (b) all supplements
and amendments that may be filed with respect to any of the foregoing.
     1.22 “Net Sales” shall mean gross sales amount of the Product in finished
packaging invoiced or otherwise fiscally charged by Cornerstone to unrelated
Third Parties in the Territory less (i) any trade, quantity or cash discounts in
amounts customary in the trade allowed to customers, (ii) all sales or excise
taxes, duties and similar charges made or incurred by reference to the sale of
the Product by Cornerstone, (iii) chargeback payments, rebates, fees, GPO (group
purchasing organization) administrative fees, and other similar adjustments for
the Product, including those granted on price adjustments, billing errors,
reimbursements or similar payments granted or given to Third Party wholesalers
or other Third Party distributors, buying groups, health insurance carriers or
other institutions, including those paid in connection with such sales to any
governmental entity, (iv) freight, insurance and other transportation charges to
the extent included in the invoice price, and (v) customary allowances or
credits, not exceeding the original billing or invoice amount, granted by
Cornerstone on account of claims, rejected or returned Product.
     1.23 “Net Sales Price” shall mean the Net Sales during the previous
Calendar Month/Quarter in the Territory divided by the total number of units of
Product to which such Net Sales were attributable and calculated separately for
each vial size of the Product.
     1.24 “Product” shall mean the finished, fully packaged, product containing
a porcine lung surfactant in vials of 1.5 and 3.0 ml manufactured under the
Know-How and currently sold under the Trademark pursuant to NDA # 020744.
     1.25 “Regulatory Authorities” shall mean any Agency which has
responsibility in the Territory for granting Marketing Authorization.
     1.26 “Regulatory Requirements” shall mean all applicable standards relating
to drug products, as identified in the Act.
     1.27 “SKU” shall mean a specific packaged presentation of a defined
quantity of a specific dosage strength of the Product, such as a vial of 1.5 or
3.0 ml identified by Chiesi by its Stock Keeping Unit number, to be identified
in the Territory by National Drug Code numbers identifying Cornerstone as the
labeler.

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     1.28 “Specifications” shall mean all finished product specifications and
packaging specifications, pursuant to the Regulatory Requirements and as
approved in the Territory under the Marketing Authorization with which
compliance is required for the fabrication, packaging, labeling, testing,
storage, handling, sale and release of the Product in the Territory, together
with any other specification indicated in the Technical Agreement separately
signed by the Parties.
     1.29 “Territory” shall mean the United States of America and its
territories and possessions.
     1.30 “Third Party” shall mean any entity other than Chiesi, Cornerstone and
their respective Affiliates.
     1.31 “Trademark” shall mean the Curosurf® trademark, USPTO registration
number 1905266, and as set out in Appendix A.
     1.32 Interpretation. Unless the context of this Agreement otherwise
requires, (a) words of one gender include the other gender; (b) words using the
singular or plural number also include the plural or singular number,
respectively; (c) the terms “hereof,” “herein,” “hereby,” and derivative or
similar words refer to this entire Agreement; (d) the terms “Article” and
“Section” refer to the specified Article and Section of this Agreement; (e) all
currencies shall be shown in United States Dollars; and (f) whenever the words
“include”, “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation”, whether or not they are
in fact followed by those words or words of like import. Whenever this Agreement
refers to a number of days, unless otherwise specified, such number shall refer
to calendar days. The English language shall be controlling in all respects in
this Agreement.
     1.33 Additional Definitions. Each of the following definitions is set forth
in the Section of this Agreement indicated below:

          Definition   Section
Agreement
  Preamble
cGMPs
    5.9.1  
Chiesi
  Preamble
Chiesi Intellectual Property
    8.1  
Confidential Information
    11.1  
Cornerstone
  Preamble
[***]
  Recitals
[***] Settlement Agreement
  Recitals
Effective Date
  Preamble
Floor Price
    6.2  
Former Agreement
  Recitals
Loss
    10.1  
Monthly Report
    6.4  
Parties
  Preamble
Pharmacovigilance Agreement
    4.6  
Purchase Order
    5.3.2  

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

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          Definition   Section
Report
    6.4  
Rolling Forecast
    5.3.1  
Supply Price
    6.1  
Stock Purchase Agreement
  Recitals
Technical Agreement
    5.2  
Term
    12.1  
Transfer Date
    4.1  
VAT
    6.3  

ARTICLE 2
GRANT
     2.1 License Grant. Beginning on the Transfer Date, Chiesi hereby grants to
Cornerstone, and Cornerstone hereby accepts from Chiesi, a non-transferable,
exclusive license under the Know-How and the Trademark, for the purposes of
importing, storing, handling, promoting, distributing, marketing, offering for
sale and selling the Product in the Territory for use in the Field of Use.
     2.2 External Opportunities. Cornerstone hereby agrees that, during the term
of this Agreement, and unless expressly agreed upon by the Parties in writing,
Cornerstone shall not, directly or indirectly, import, store, handle, promote,
distribute, market, offer for sale or sell the Product outside the Field of Use
or outside the Territory. Furthermore, all inquiries or orders received or known
to Cornerstone relating to the (i) sale or delivery of the Product outside the
Territory or (ii) use of the Product outside the Field of Use shall be referred
by Cornerstone to Chiesi. It is Cornerstone’s responsibility to document and
communicate the specific details of all business opportunities relating to the
foregoing to Chiesi.
     2.3 Sublicensing; Co-Promotion. Cornerstone shall not have the right to
grant sublicenses without the prior written consent of Chiesi. In addition,
Cornerstone may not enter into any co-promotion agreements concerning the
Product for use in the Field of Use for sale in the Territory without the
express written consent of Chiesi as to the co-promoting Party, such approval
not to be unreasonably held or delayed. Cornerstone shall in any case be
responsible to Chiesi for all acts and omissions of such co-promoting Party, if
any, as they relate to this Agreement.
ARTICLE 3
OBLIGATIONS OF CORNERSTONE
     The following obligations of Cornerstone shall begin upon the Transfer
Date:
     3.1 Own Account. Cornerstone shall place orders for the Product with Chiesi
and shall resell the ordered Product to Cornerstone’s customers solely in the
Field of Use in the Territory. In an effort to ensure supply to the market
within the Territory goes uninterrupted, Chiesi will use commercially reasonable
efforts to ensure adequate supply of Product is available for commercial sales
by Cornerstone based off the initial Rolling Forecast promptly upon Transfer.

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     3.2 Efforts. Cornerstone shall promote, distribute, market, offer for sale
and sale the Product using commercially reasonable efforts to achieve maximum
market impact and concentration throughout the Territory, such efforts to be at
least at the same level of effort, but not the same number of full-time
employees, as with other similar products of similar sales potential which
Cornerstone promotes, distributes, markets or sells. In addition, Cornerstone
shall use commercially reasonable efforts to ensure that the First Commercial
Sale in the Territory occurs promptly after Chiesi makes available commercial
supplies of the Product after the Transfer Date.
     3.3 Information and Reports. Cornerstone shall provide Chiesi with written
and oral reports, market information, competitive activities, sales forecasts,
development of prices and other pertinent customer and industry information as
may be reasonably required from time to time by Chiesi and to keep Chiesi
informed of Cornerstone’s activities and anticipated future orders. In addition,
Cornerstone shall keep Chiesi regularly informed of all other material details
concerning the promotion, distribution, marketing and sale of the Product in the
Territory as Chiesi may reasonably request.
     3.4 Facilities. Cornerstone, or its designees, shall maintain facilities in
the Territory suitable for the conduct of Cornerstone’s business, and in
compliance with the Regulatory Requirements. Cornerstone agrees that Chiesi may
inspect, or have inspected, the facilities of Cornerstone to determine
compliance with the Regulatory Requirements associated with the storage and
distribution of the Product. In addition, Chiesi shall have the right, upon
reasonable notice and during business hours, to inspect or cause to be inspected
at its own expense the facilities of Cornerstone where the Product is stored.
     3.5 Records. Cornerstone and its designees, shall maintain accurate records
pertaining to the sale and distribution of the Product to its customers, for a
period of at least one year after the expiration date of each lot or batch of
such Product, with sufficient detail to enable the recall of such Product from
the market. Cornerstone shall also maintain accurate records of all complaints
it has received regarding the Product, and the results of the investigation
thereof, for a period of at least one year after the expiration date of the lot
or batch of such Product.
     3.6 Training. Cornerstone shall ensure that the Product is stored at a
designated Third Party logistics facility that is compliant with the Regulatory
Requirements, and is shipped to its customers, under the supervision of
personnel having training sufficient to protect the health of the consumer and
purchaser. Cornerstone shall train and maintain an adequate staff of appropriate
personnel, sufficiently knowledgeable about the Product following Chiesi
training guidelines, in order to enable such personnel to effectively
(i) promote the sale of the Product, (ii) respond to customer inquiries and
complaints and (iii) respond to inquiries from regulatory personnel.
     3.7 Compliance with Laws and Instructions. Cornerstone shall hold all
applicable licenses, and shall comply with all related directives, laws, rules
and regulations, in connection with the importation, storage, handling,
promotion, distribution, marketing and sale of the Product in the Territory. In
its promotion, marketing or sale of the Product, Cornerstone agrees to avoid
making any statements, representations, warranties or guarantees concerning the
Product except as expressly authorized pursuant to the Marketing Authorization
for the Product.

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Cornerstone shall, in its importation, storage, handling, distribution,
marketing and sale of the Product, comply with the quality standards of Chiesi
and at all times adhere to a level of quality at least as high as Cornerstone
maintains for similar activities conducted in relation to its other products.
     3.8 Inventory. Cornerstone shall maintain sufficient stocks of Product to
meet all reasonably foreseeable demands for the Product in the Territory without
undue delay, and in no event to maintain less stock than [***]. Cornerstone
shall not be held to the aforementioned standard in the event of inventory
shortfall arising from supply issues from Chiesi.
     3.9 Selling Costs. For the avoidance of doubt, all importing, storing,
handling, promoting, distributing, marketing and selling costs and expenses
relating to the Product within the Territory shall be borne exclusively by
Cornerstone.
     3.10 [***]. Cornerstone hereby commits to [***]. Cornerstone shall be
entitled to have reasonable contact with [***]. Cornerstone shall make requests
for contact with [***]. If Cornerstone chooses [***]. Notwithstanding the
foregoing and subject to relevant law, if Cornerstone is unable, [***]. For the
purposes of this Section 9.2.4, “[***]” shall mean [***]. Such [***] shall be
subject to the provisions of Section 12.5.
ARTICLE 4
MARKETING AUTHORIZATION AND PHARMACOVIGILANCE
     4.1 Transfer of Marketing Authorization. Chiesi shall procure the transfer
of the Marketing Authorization currently held by [***] in the Territory to
Cornerstone using Cornerstone Regulatory Counsel as of [***] (the “Transfer
Date”). All expenses related to Marketing Authorization transfer procedures
shall be borne by Cornerstone.
     4.2 Maintenance. Upon the Transfer Date, Cornerstone shall be fully
responsible for, at its own expense, taking such steps and actions, in
accordance with instructions provided by Chiesi from time to time, as may be
necessary and advisable to maintain the Marketing
 
[***] Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commissions.

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Authorization held by Cornerstone in the Territory, including making all
applications, requests for authorizations and submissions of information related
to the Marketing Authorization Application. Should the Parties mutually desire a
new Marketing Authorization Application, pre-clinical and clinical testing
connected with or related to relevant IND(s) and Marketing Authorization
Application(s) shall be at an equally shared cost between Cornerstone and
Chiesi. However, to the extent that Cornerstone unilaterally desires a new
Marketing Authorization Application, then Cornerstone shall be solely
responsible for all costs and expenses associated with pre-clinical and clinical
testing connected with or related to relevant IND(s) and Marketing Authorization
Application(s).
     4.3 Protocols. Prior to the commencement of any external scientific
investigation, Cornerstone shall provide Chiesi, for Chiesi’s approval, with a
protocol, including the relevant clinical report form, for any study to be
undertaken by Cornerstone with the Product. Chiesi shall have the right to
disagree with or request a modification of such proposed study, should it be
reasonably deemed harmful for the sound international development of the
Product. Chiesi shall reply in writing no later than twenty (20) Business Days
from the receipt of the protocols in question, otherwise the protocols will be
deemed accepted by Chiesi.
     4.4 Reports/Studies.
          4.4.1 Study Reports. Cornerstone undertakes to keep Chiesi duly and
fully informed of the efforts made by Cornerstone pursuant to Section 4.3, by
providing Chiesi upon request, but no less frequent than every six (6) months,
with detailed reports in writing informing Chiesi of the progress made and
results of the studies performed with the Product in the Territory.
          4.4.2 Cornerstone Study Results. Cornerstone shall make available to
Chiesi, as soon as possible, results of all studies made with the Product to the
extent Cornerstone has Control of such results. Chiesi shall be free to use,
directly or indirectly, all such results in and outside the Territory free of
charge.
          4.4.3 Chiesi Study Results. Chiesi shall make available to
Cornerstone, as soon as possible, results of all studies made with the Product
to the extent Chiesi has Control of such results. Cornerstone shall be free to
use, directly or indirectly, all such results in the Territory pursuant and
subject to the terms of this Agreement.
          4.4.4 Regulatory Status. Furthermore, Cornerstone shall keep Chiesi
informed of the status of IND(s), Marketing Authorization Application(s),
Marketing Authorization and other authorizations held or managed by Cornerstone
pursuant to Section 4.2, by providing Chiesi with documents and reports in the
following manner:
               (a) with respect to IND(s) or Marketing Authorization
Application(s) or Marketing Authorization, Cornerstone shall regularly, and in
any case within twenty (20) Business Days, inform Chiesi of any submissions or
grants thereof by sending Chiesi a written report by the most appropriate means
of transmission; and
               (b) with respect to any and all filings, authorizations,
acceptances, permissions, material correspondence or similar relevant documents,
Cornerstone shall provide

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Chiesi with copies, by the most appropriate means of transmission, regularly
upon dispatch or receipt thereof and in any case within forty (40) Business
Days.
     4.5 Meetings. The Parties shall meet at least twice a year in person,
unless otherwise mutually agreed by the Parties, to share, discuss and evaluate
medical, scientific, legal, quality and regulatory information relevant to the
Product.
     4.6 Pharmacovigilance. The Parties agree that, upon execution of this
Agreement, and in no event later than ten (10) weeks after the Effective Date,
they shall enter into a separate pharmacovigilance agreement, containing all
customary terms and conditions, for the exchange of adverse event and safety
information, including pregnancy exposure data concerning the Product (the
“Pharmacovigilance Agreement”). Until the Pharmacovigilance Agreement is
finalized, the Parties shall exchange such data in a manner that enables each
Party to fulfill regulatory requirements within their own territories (and
within any other limits of this Agreement).
ARTICLE 5
SUPPLY AND MANUFACTURING
     5.1 Responsibility for Manufacturing. Except as otherwise provided in this
Agreement, Chiesi shall use commercially reasonable efforts to produce and
supply to Cornerstone its entire requirements of the Product for use in the
Field of Use for sale in the Territory in response to Purchase Orders (as
defined below). Cornerstone will purchase exclusively from Chiesi the Product
for use in the Field of Use for sale in the Territory. During the Term, Chiesi,
and its contract manufacturer, collectively shall hold and maintain all licenses
and permits, for the Term of this Agreement, as are required to fabricate,
package, label, test and store the Products in the Territory, and sell the
Products to Cornerstone.
     5.2 Technical Agreement. Upon execution of this Agreement, the Parties
shall promptly, and in no event later than ten (10) weeks after the Effective
Date, enter into a separate technical agreement, whereby the Parties will define
their respective responsibilities in relation to the cGMPs and quality matters,
technical specifications, release and the supply of the Product (the “Technical
Agreement”). The Technical Agreement shall include examples of the Certificate
of Analysis and Certificate of Compliance.
     5.3 Forecasting and Ordering.
          5.3.1 Rolling Forecasts. Cornerstone shall submit to Chiesi by the
first day of each Calendar Month during the Term, a forecast of Products that
Cornerstone anticipates ordering from Chiesi, including samples, for each of the
following [***] (“Rolling Forecast”). The first [***] months of each Rolling
Forecast shall be considered as binding, the quantities indicated for the months
from the [***] up to the [***] month can be varied by Cornerstone by no more
than +/- [***] percent ([***]%) compared to the previous Rolling Forecast, while
the quantities indicated for the months from the [***] up to the [***] month can
be varied by Cornerstone by no more than +/- [***] percent ([***]%) compared to
the previous Rolling Forecast, while the quantities indicated for the months
after the [***] month can be
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commissions.

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freely varied by Cornerstone compared to the previous Rolling Forecast.
Cornerstone acknowledges that Products are produced in full lot quantities, as
set forth on Appendix B, and all Purchase Orders shall be in full batch
quantities.
          5.3.2 Purchase Orders; Documentation. Cornerstone agrees to place
purchase orders for the Product with Chiesi according to the above binding
portion of the Rolling Forecast at least [***] prior to the start of each
Calendar Month for quantities of the Product to be delivered hereunder (each, a
“Purchase Order”). Each Purchase Order shall be placed by Cornerstone with
Chiesi by e-mail and shall set forth, for each Product, the quantity ordered (in
full batch quantities) and delivery date. Chiesi agrees to confirm such Purchase
Orders within [***] Business Days of receipt, in whole or in part, such
confirmation not to be unreasonably withheld. To the extent that any Purchase
Order is so confirmed by Chiesi, then such Purchase Order shall be filled and
delivered in accordance with its terms and the terms of this Agreement. The
Parties agree to discuss in good faith any Purchase Orders not so confirmed by
Chiesi. If Chiesi notifies Cornerstone that it is unable to fill a Purchase
Order that has previously been so confirmed, Chiesi shall indicate the portion
of such Purchase Order that it cannot supply by the requested delivery date and
specify alternate delivery dates.
          5.3.3 Accommodations. From time to time, due to significant unforeseen
circumstances, Cornerstone may deliver to Chiesi a Purchase Order for Product
volumes in excess of those specified in the above binding portion of the Rolling
Forecast. The Parties agree to discuss in good faith any Purchase Orders
delivered by Cornerstone requesting Product volumes in excess of the Product
volume specified in the above binding portion of the Rolling Forecast. In
determining whether to fill such excess Product Purchase Orders requested by
Cornerstone, Chiesi shall have the right to take into consideration (i) its
current on-hand supply of Product, (ii) its own Product needs, (iii) the needs
of third parties with whom Chiesi has Product supply obligations, (iv) its
existing capacity and (iv) any other factor reasonably relevant to the
feasibility of fulfilling such excess supply request.
          5.3.4 [***]
     5.4 Terms of Orders. The terms of this Agreement are hereby incorporated by
reference into each order of Product submitted by Cornerstone and accepted by
Chiesi. In the event of any conflict between a Rolling Forecast or Purchase
Order or other written instructions and this Agreement, the terms of this
Agreement shall prevail.
     5.5 Packaging. Cornerstone shall be entitled to define its requirements
regarding the inner and outer packaging of the Product as long as technically
feasible as further detailed in the
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commissions.

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Technical Agreement, it being understood that major outer packaging requirements
shall require prior approval by Chiesi. In addition, should Cornerstone wish to
change the artwork of the packaging during the Term, then Chiesi shall implement
such changes as long as technically feasible, and Cornerstone shall reimburse
Chiesi for the related expenses, including expenses for already ordered and paid
relevant materials prior to the above changes that cannot be used for other
purposes. Should Chiesi request changes to the artwork, for technical reasons or
otherwise, then Chiesi shall implement such changes and shall fully bear the
related expenses. Furthermore, in the event that any Regulatory Authorities
impose changes to the artwork, then the Parties shall equally share the related
expenses; provided, however, that Cornerstone shall reimburse Chiesi for the
expenses related to materials already ordered and paid prior to the above
changes and such materials cannot be used for other purposes providing that the
imposed changes by any Regulatory Authority were not as a direct result of an
issue involving Chiesi or their contract manufacturers.
     5.6 Inspection of Facilities. At its discretion, Chiesi shall inspect, or
have inspected, the facilities of any of Chiesi’s contract manufacturers of the
Products to determine compliance of such contract manufacturer with the
Regulatory Requirements associated with the fabrication packaging, labeling,
testing and storage of the Product. Chiesi will pay all fees associated with
such inspection, including inspections under Regulatory Requirements. Subject to
the terms of the Technical Agreement, Chiesi shall share the results of any such
audit with Cornerstone. In addition, Cornerstone shall have the right, upon
reasonable notice, once a year and during business hours, to inspect or cause to
be inspected at its own expense the facilities of Chiesi where the Product is
manufactured; provided, however, Chiesi shall permit Cornerstone or Cornerstone
representatives to conduct additional on-site “for cause” technical and/or cGMP
reviews and/or audits if the issues leading to the need to conduct the “for
cause” review and/or audit cannot be resolved without such an on-site meeting.
     5.7 Records. Chiesi shall, or shall require its contract manufacturer to,
maintain accurate books and records pertaining to the manufacture and release of
the Products, as required by the Regulatory Requirements, including all of the
manufacturing and analytical records, all records of shipments of Products, and
all data relating to Products and complaints Chiesi has received therefor, for
the time periods required by the Regulatory Requirements. Chiesi agrees that, in
response to any complaint, or in the defense by Cornerstone of any litigation,
hearing, regulatory proceeding or investigation relating to Products, Chiesi
shall make available to Cornerstone such Chiesi employees and records reasonably
necessary to permit the effective response to, defense of, or investigation of
such matters, subject to appropriate confidentiality protections.
     5.8 Notification. Chiesi shall provide Cornerstone with written notice as
soon as practicable of all claims and allegations, of which Chiesi becomes
aware, that Chiesi, or its contract manufacturer, is not complying with the
Regulatory Requirements associated with the manufacture or release of Products
in the Territory, or that the Products do not comply with the Specifications
therefor, which claims or allegations Chiesi reasonably believes to warrant
investigation or response.

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     5.9 Supply by Chiesi.
          5.9.1 Supply of Product. Chiesi shall deliver Product to Cornerstone
in such quantities and at such times as ordered by Cornerstone pursuant to
Section 5.3.2. The Products supplied by Chiesi to Cornerstone shall be (a) in
finished pharmaceutical form, (b) conform to relevant Specifications and all
Applicable Laws and regulations, and (c) be packaged in a version suitable for
the market (e.g., English language packaging and labeled in a manner as required
pursuant to the Marketing Authorization). All such Products shall be fabricated,
packaged, labeled, tested and stored in compliance with Chiesi’s quality policy,
which is implemented by the relevant quality management system, such system
being fully in compliance with the applicable regulatory requirements, including
current Good Manufacturing Practices (“cGMPs”) and in accordance with the
Regulatory Requirements and the Specifications as per the terms of the Technical
Agreement.
          5.9.2 Packaging. Chiesi shall be responsible for the packaging of the
Product into final market packaging. The NDC number for each SKU shall include
the Cornerstone labeler code and the Cornerstone corporate logo will be included
on the packaging. Cornerstone acknowledges that Chiesi is the owner of all
rights, title and interest to the copyrights in all packages, labeling and
inserts related to the Product. Cornerstone’s use of the materials owned by
Chiesi shall inure to the benefit of Chiesi for all purposes.
          5.9.3 Delivery Dates. Chiesi shall use commercially reasonable efforts
to meet the delivery dates and order quantities indicated in Cornerstone’s
Purchase Orders. Any shipment delivered that is within plus or minus [***]
percent (+/-[***]%) of the quantity ordered and/or plus or minus [***]
(+/-[***]) Business Days of the delivery date specified on the relevant Purchase
Order will be considered as delivered on time.
          5.9.4 Shelf Life. Subject to Applicable Laws, the remaining shelf life
of the Product supplied by Chiesi to Cornerstone shall be at least equal to
[***] months at the time of receipt by Cornerstone or any of its designees;
provided, however, that, to the extent Chiesi has Product available with a
remaining Shelf Life of longer than [***] months, Chiesi shall exercise
reasonable efforts to supply Cornerstone with such Product. In the event that,
for any reason, the remaining shelf life of Product supplied is less than [***]
months at the time of receipt by Cornerstone or any of its designees, then
Cornerstone may elect, at its discretion, to accept such Product notwithstanding
such fact. Cornerstone shall discuss such situation with Chiesi prior to
accepting or refusing shipment. Notwithstanding the foregoing, the stocks of the
Product repurchased by Chiesi from [***]. In addition, to the extent that [***].
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commissions.

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          5.9.5 Manufacturing Changes. Required and discretionary manufacturing
changes and handling thereof are to be addressed in the Technical Agreement.
     5.10 Shipment; Title; Transport.
          5.10.1 Shipment; Single Order. All Product (including Product for
export) shall be delivered [***] in accordance with Cornerstone’s instructions.
Any shipment of the Product shall be accompanied by the relevant Certificate of
Analysis as well as additional documentation as further specified in the
Technical Agreement or as needed by customs and other Regulatory Authorities in
the Territory relating to import and export. To the extent possible, Product
which is purchased in a single order shall be delivered by Chiesi in a single
shipment unless Cornerstone directs that such Product should be delivered to
more than one location.
          5.10.2 Title; Risk of Loss. Title, possession and risk of loss shall
pass to Cornerstone upon delivery of Product to Cornerstone’s designated
carrier; provided, however, that nothing in this Section shall in any manner
limit Cornerstone’s rights under Section 5.11. If any Product is rejected by
Cornerstone after shipment under this Agreement, and such Product is to be
returned to Chiesi, then title to and risk of loss with respect to such rejected
Products shall pass from Cornerstone to Chiesi when such Products are placed in
the possession of the carrier for return to Chiesi or for shipment on behalf of
Chiesi to a destination designated by Chiesi.
     5.11 Acceptance of Delivery. All Claims for failure of any delivery of
Product to conform to the Specifications or for a short delivery, must be made
by Cornerstone in writing within [***] following receipt of delivery of such
Product, or in the case of latent or inherent defects not detectable by
inspection upon receipt of the Product, within [***] as of the date of
discovery. Cornerstone shall provide Chiesi with details of the allegedly
defective Product, including samples thereof, and shall cooperate in any
investigation Chiesi should wish to carry out. Chiesi shall use its reasonable
endeavors to replace as soon as possible the non-conforming Product or to make
up for any short delivery of Product, it being understood that only if the
non-conformity or short delivery is due to causes under the control or
responsibility of Chiesi, the replacement of the defective Product or
replenishment for the short delivery shall be free of charge to Cornerstone.
Without limiting the foregoing, Cornerstone or its designee receiving
non-conforming Product shall, at Chiesi’s option, either (i) return the affected
Product to Chiesi for rework or reprocessing by Chiesi, all at Chiesi’s expense;
(ii) return the affected Product for destruction by Chiesi at Chiesi’s expense;
or (iii) have the Product disposed of by a Third Party designated by Cornerstone
at Chiesi’s expense and in accordance with Applicable Laws.
     5.12 Limitation. For the avoidance of doubt and without prejudice to the
provisions of Article 10, Chiesi’s responsibility is limited to the shipment of
goods for the above-mentioned replacement or replenishment only, it being
however understood that in case Cornerstone fails to notify Chiesi within the
above deadlines, Cornerstone’s rights under this Section shall be
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commissions.

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forfeited; provided, however, a recall of the Product shall be governed by
Section 5.16 of this Agreement. Failure to make timely claims in the manner
prescribed shall constitute acceptance of the delivery and no further claims
after such [***] period may be made by Cornerstone against Chiesi and no returns
shall be accepted by Chiesi after such date.
     5.13 Independent Testing. If a dispute arises between Cornerstone and
Chiesi concerning the defective quality or short delivery as set out in
Section 5.11 above, and reasons thereof, of the Product, and said dispute is not
resolved within twenty (20) Business Days from the receipt by Chiesi of the
notification mentioned in Section 5.11 above, the Parties shall within thirty
(30) days appoint an independent first class laboratory to undertake the
relevant testing and its findings shall be conclusive and binding upon the
Parties. All costs relating to this process shall be borne solely by the
unsuccessful Party.
     5.14 Meetings. The Parties will, at least once per Calendar Quarter,
discuss in a meeting or via telephone any supply chain or other delivery issues
that have arisen during the preceding Calendar Quarter.
     5.15 Training. Chiesi shall provide technical training and support and
Product information, where and at such times as Chiesi deems appropriate or if
reasonably requested by Cornerstone, to Cornerstone and customers for the mutual
benefit of Chiesi and Cornerstone.
     5.16 Recalls. In the event (i) any Agency issues a directive, order or,
following the issuance of a safety warning or alert with respect to a product, a
written request that any Product be recalled, (ii) a court of competent
jurisdiction orders such a recall, or (iii) Cornerstone determines that any
Product should be recalled or that a “dear doctor” letter is required relating
to the restrictions on the use of the Product, Chiesi will co-operate with those
activities relating to the Product as reasonably required by Cornerstone, having
regard to all Applicable Laws. In the event of a recall of the Product,
Cornerstone will notify Chiesi in accordance with the Pharmacovigilance
Agreement, and Chiesi will cooperate with those recall activities relating to
the Product as reasonably required by Cornerstone.
          5.16.1 Cornerstone or its designated agent shall have the
responsibility for handling customer returns of the Product. Chiesi shall
provide Cornerstone or its designated agent with such assistance as Cornerstone
may reasonably require to handle such Product returns.
          5.16.2 To the extent that a recall or return results from, or arises
out of, a failure by Chiesi (or its contract manufacturer) to manufacture and
supply the Product in accordance with the Specifications, Applicable Laws and/or
cGMP, at Cornerstone’s option, Chiesi shall be responsible for the documented
out-of-pocket expenses of such recall or return and shall either (i) reimburse
Cornerstone for the price that Cornerstone paid to Chiesi for manufacturing the
Product which are the subject of the recall, including the actual costs incurred
in shipping, applicable transit charges, insurance premiums, duties, taxes paid
or any other out-of-pocket charges incurred in connection with delivery of such
Product to Cornerstone or its designee, or (ii) use its commercially reasonable
efforts to replace the recalled or returned Product with new Products at no
charge to Cornerstone. Additionally, Chiesi shall reimburse or credit
Cornerstone for any out-of-pocket costs paid by Cornerstone to Third Parties for
transportation and
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commissions.

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destruction of the affected Product, and pay or provide a credit to Cornerstone
for the actual administrative expenses and all other reasonable costs incurred
by Cornerstone outside of the ordinary course of business in connection with the
disposition of a Product under this Section 5.16.2. For the purpose of clarity,
Cornerstone shall be fully and solely responsible for all costs and expenses
related to any recall initiated for any other reason. The Parties shall use
commercially reasonable efforts to comply with their obligations under this
Section 5.16.2 in a timely manner.
          5.16.3 Cornerstone or its designated agent shall have the full
responsibility for responding to questions and complaints from Cornerstone’s
customers for the Product. Responsibilities and activities relating to
complaints and questions are defined in the Pharmacovigilance Agreement. Unless
it is determined that the cause of any customer complaint resulted from a
failure by Chiesi to provide manufacturing services in accordance with the
Specifications, Applicable Laws or cGMP, all costs incurred in respect of this
Section 5.16.3 shall be borne by Cornerstone.
ARTICLE 6
FINANCIAL PROVISIONS
     6.1 Supply Price. The purchase price (“Supply Price”) for Product purchased
from Chiesi shall be an amount equal to [***] percent ([***]%) of the Net Sales
Price for such Product; provided that in no such event shall the Supply Price be
less than the Floor Price calculated in accordance with Section 6.2.
     6.2 Floor Price. The initial floor price for the Product shall be as set
forth on Appendix B (the “Floor Price”) and shall remain firm and valid until
[***]. Thereafter, Chiesi may adjust the Floor Price [***] in accordance with
the evolution of manufacturing and other relevant costs.
     6.3 Payment Terms. All payments due to Chiesi under this Agreement shall be
made by Cornerstone by wire transfer in USD, within [***] calendar days from the
invoice date, to a bank account as may be designated by Chiesi from time to
time; provided that the payments due under this Agreement are exclusive of Value
Added Tax (“VAT”) and Cornerstone shall pay to Chiesi any VAT which is or may
become properly payable or chargeable in respect of the payments, according to
the payment terms set forth hereunder; provided, that Chiesi shall use
commercially reasonable efforts to procure any available exemption from or
refund of applicable VAT (and, in the event Chiesi or any of its Affiliates
obtains such a refund, it shall promptly remit such refund to Cornerstone).
     6.4 Reports. Within [***] after the end of each Calendar Quarter after the
Transfer Date, Cornerstone shall deliver a report to Chiesi (a “Report”)
specifying, for such Calendar Quarter in the Territory:
          6.4.1 the quantities of each SKU of Product sold by Cornerstone in
that Calendar Quarter;
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commissions.

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          6.4.2 gross sales and the calculation of Net Sales of Product by SKU
in the Territory during such Calendar Quarter;
          6.4.3 all quantities of Product distributed free of charge, together
with any documents evidencing such use;
          6.4.4 the Net Selling Price for each SKU of Product sold in that
Calendar Quarter in the Territory; and
          6.4.5 the total amount payable to Chiesi for all SKUs of the Product
delivered during such Calendar Quarter calculated in accordance with Section 6.1
using the Net Sales Price for each SKU in the Territory for the just-ended
Calendar Quarter.
     6.5 Records.
          6.5.1 Audit. Cornerstone shall keep and maintain true and complete
records setting forth the gross sales of the Product in the Territory, and of
all matters relating to the computation of the Net Sales of the Product in the
Territory, including quantities of Product used as clinical supplies or in
patient assistance programs, volume of Product distributed, or records otherwise
related to Cornerstone’s performance of its obligations under this Agreement,
for a period of [***] following such sales, such records shall be open to
inspection at Cornerstone’s corporate headquarters on thirty (30) days written
notice provided by Chiesi, during the normal office hours of Cornerstone (but
not more frequently than once per year) by a nationally recognized independent
certified public accountant selected by Chiesi and reasonably acceptable to
Cornerstone, and retained solely for the purpose of auditing the same at
Chiesi’s expense; provided, however, that records with respect to any Calendar
Quarter may be audited no more than once in connection with the same audit
and/or subject matter; provided, further that nothing in this Section 6.5.1
shall limit Chiesi’s right to have audited Cornerstone’s records with respect to
any Calendar Quarter in connection with Chiesi’s year-end review. Such audit
shall be conducted exclusively for the purpose of verifying the accuracy of
reports delivered by Cornerstone to Chiesi pursuant to Section 6.4 and the
accuracy of Cornerstone’s determination of the amounts payable or paid by
Cornerstone to Chiesi hereunder. The accountant shall sign a confidentiality
agreement prepared by Cornerstone and shall then have the right to examine the
records kept pursuant to this Section 6.5.1 and report to Chiesi the findings
(but not the underlying data) of such examination of records. The accountant
shall provide a draft copy of the report to Chiesi and Cornerstone for review
and comment, and each of Chiesi and Cornerstone shall have thirty (30) days
after receipt of that report to review and comment on the report which comments
shall be provided to the accountant and to each other. The final report shall be
provided simultaneously to Chiesi and Cornerstone by the independent certified
public accountant within twenty (20) days after the accountant’s receipt and
consideration of such comments. In the event that an audit has been initiated by
Chiesi, the records that have been the subject of the audit shall be kept until
the later of (i) the expiry of any time period set out in Section 6.5.2 for the
payment or credit of any amounts owing or (ii) the resolution of any dispute
arising from the audit. If such examination of records reveals more than a five
percent (5%) underpayment of any amounts payable hereunder as compared to the
amounts actually reported by Cornerstone as payable to Chiesi, as determined by
such examination for the period which is the subject of such examination, the
expenses for said accountant shall be borne by Cornerstone.
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commissions.

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          6.5.2 Adjustments. Cornerstone shall pay to Chiesi within forty-five
(45) days after the delivery of the accountant’s report pursuant to
Section 6.5.1 any amounts determined by the accountant to be payable by
Cornerstone to Chiesi. If the accountant determines that Cornerstone has
overpaid Chiesi, Chiesi shall credit Cornerstone in an amount equal to such
overpayment on the immediately succeeding invoice rendered to Cornerstone;
provided, however, that if this Agreement has terminated or expired, then Chiesi
shall pay to Cornerstone within forty-five (45) days after the delivery of the
accountant’s report pursuant to Section 6.5.1 an amount equal to such
overpayment.
     6.6 Withholding Taxes. (a) Chiesi and Cornerstone agree that all payments
due to Chiesi from Cornerstone hereunder shall be made by Cornerstone free and
clear of, and without deduction for, any Income or Withholding Taxes, except as
otherwise provided in Section 6.3 and this Section 6.6. If the fiscal or taxing
authorities of any relevant jurisdiction assert that Income or Withholding Taxes
are required to be withheld from any payments due to Chiesi or its Affiliates
from Cornerstone or its Affiliates, or the tax laws (including statutes,
regulations, treaties and judicial or official interpretations of any of the
foregoing) in one or more jurisdictions have changed so as to require such
treatment, then (i) the Party made aware of such assertion or change in law
shall inform the other Party within thirty (30) days and shall consult with the
other Party regarding the consequences of such assertion or change and
(ii) until the conclusion of such consultation Cornerstone and its Affiliates
shall be entitled to deduct and withhold the applicable Income or Withholding
Tax from any applicable payments due to Chiesi or its Affiliates and pay such
Income or Withholding Tax over to the applicable fiscal or taxing authority. If,
after consultation with Chiesi, Cornerstone believes that it or any of its
Affiliates is required to withhold Income or Withholding Tax from any payment to
or for the account of Chiesi or its Affiliates, such amount shall be deducted
from the amounts payable to or for the account of Chiesi or its Affiliates and
shall be paid by Cornerstone to the appropriate fiscal or tax authorities,
provided that Cornerstone shall however take all reasonable steps in order to
allow Chiesi to take advantage of the relevant double taxation treaty(ies) for
the purpose of minimizing withholding taxes on such amounts, so long as Chiesi
and its Affiliates promptly provides any forms, certificates or other
documentation or information that Chiesi or its Affiliates are required or
reasonably requested by Cornerstone to provide in connection with such
minimization. Cornerstone shall promptly furnish Chiesi with copies of official
tax receipts or other appropriate evidence to support a claim for tax or other
credit in respect of any sum so withheld, and shall provide such assistance as
Chiesi may reasonably require in obtaining any refund of such amounts to which
Chiesi or its Affiliates may be entitled, to the extent that such assistance
does not cause Cornerstone or its Affiliates to incur any liability in respect
of any of the taxes asserted to be due or other cost or expense. For purposes of
this Agreement, “Income or Withholding Tax” means (i) any tax, levy or charge
imposed by a governmental authority that is computed or determined by reference
to gross or net receipts, revenues, sales, income, earnings, profits or gains of
Chiesi or any of its Affiliates or any office, branch, permanent establishment
or trade or business of Chiesi or any of its Affiliates, (ii) any tax, levy or
charge imposed by a governmental authority as a result of the payment or accrual
of amounts to or for the account of Chiesi or any of its Affiliates in respect
of the grant of rights or sale of Product by Chiesi or any of its Affiliates to
Cornerstone or any of its Affiliates pursuant to this Agreement, and (iii) any
additional amount, penalty, interest or addition to tax imposed with respect to
the foregoing or cost or expense relating to the imposition or contest of the
foregoing.

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     6.7 Third Party Pricing. Nothing contained herein, however, shall be deemed
to limit in any way Cornerstone’s right to determine the prices at which the
Products purchased by Cornerstone may be sold by Cornerstone to any Third Party.
ARTICLE 7
MARKETING OF THE PRODUCT
     7.1 Marketing Plan. No later than [***], before the Transfer Date,
Cornerstone shall provide Chiesi with its proposed marketing plan for the
Product during the first year of this Agreement, and thereafter shall provide
Chiesi with its proposed marketing plan no later than [***] months before the
second and subsequent years, as the case may be. Such proposed marketing plans
shall be duly carried out by Cornerstone, taking into account all comments and
suggestions of Chiesi. Furthermore, within [***] of the end of each Calendar
Quarter, Cornerstone shall send Chiesi a written report detailing advertising
and promotional activities carried out in the said quarter.
     7.2 Chiesi Approval of Marketing Materials. Cornerstone shall submit to
Chiesi for Chiesi’s prior written approval, copies of all marketing and
promotional materials and copies of all other printed materials which
Cornerstone proposes at any time to use in relation to the promotion, marketing,
sale or offer for sale of the Product. If Chiesi fails to respond to a request
to approve any promotional or marketing material within [***] after receipt of
Cornerstone’s submission by Chiesi, such failure shall constitute approval of
the submission.
     7.3 Compliance with Marketing Authorization. All promotional and sales
material, including advertisement, sales and training aids, if locally prepared
and used by Cornerstone with respect to the Product, shall fully comply with
Applicable Laws and with the Marketing Authorization in the Territory. In
addition, Cornerstone will seek final approval from Chiesi in writing (such
approval not to be unreasonably withheld) before printing or distributing such
promotional and sales material. If Chiesi fails to comment on such material
within [***] upon receipt thereof, then such material shall be considered
approved by Chiesi. Furthermore, all promotional and sales material contemplated
by this Section, along with all inner and outer packaging items of the Product,
shall clearly indicate the legend “Under license of CHIESI”.
     7.4 Prevailing Market Conditions. Cornerstone agrees to keep Chiesi
reasonably and promptly informed of all relevant market conditions prevailing
within the Territory, which includes providing Chiesi with information regarding
development of prices, competing products and relevant legal regulations.
     7.5 Chiesi Website. Chiesi shall grant Cornerstone the right to link to the
healthcare provider section of the Curosurf website from the Cornerstone website
and, to the extent applicable, shall grant Cornerstone website access rights
commensurate with those granted to physicians generally.
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commissions.

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     7.6 Commercial Incentives and Minimum Commitments. Set forth on Appendix C
hereto are the agreed upon commercial incentives and minimum commitments
relating to Cornerstone’s performance under this Agreement.
ARTICLE 8
INTELLECTUAL PROPERTY
     8.1 Ownership of Intellectual Property. Chiesi or its Affiliates or
licensors shall remain the owner of the intellectual property relating to the
Products including any and all rights to any scientific, pharmaceutical or
technical information, data, discovery, invention (whether patentable or not),
Know-How, substances, techniques, processes, systems, formulations, designs and
expertise relating to the Product which is not generally known to the public and
any and all rights under any and all patent applications and/or patents, now
existing, currently pending or hereafter filed or acquired or licensed by Chiesi
or any Affiliate of Chiesi relating to the Product, and any foreign counterparts
thereof and all divisionals, continuations, continuations-in-part, any foreign
counterparts thereof and all patents issuing on any of the foregoing, and any
foreign counterparts thereof, together with all registrations, reissues,
re-examinations, supplemental protection certificates, or extensions thereof,
and any foreign counterparts thereof (collectively, the “Chiesi Intellectual
Property”).
     8.2 Improvements. Cornerstone shall promptly notify Chiesi of any
Improvements. Any Improvements, whether patentable or not, shall be the sole
property of Chiesi, regardless of inventorship. Cornerstone shall assign, and
shall ensure that any of its employees, agents and officers who are inventors of
Improvements assign, to Chiesi, and hereby does assign, all rights to such
Improvements at no cost to Chiesi. Cornerstone shall provide Chiesi with
reasonable support in the filing and prosecution of any patent applications for
Improvements and shall provide all information and/or data in Cornerstone’s
possession that is necessary to support any such patent application.
     8.3 Enforcement. Cornerstone shall promptly inform Chiesi in writing of any
actual or alleged unauthorized use of the Chiesi Intellectual Property by a
Third Party of which it becomes aware and provide Chiesi with any available
evidence of such unauthorized use. Chiesi shall have the right, but not the
obligation, to enforce for Chiesi’s own benefit (including by agreement or by
litigation) Chiesi’s rights in the Chiesi Intellectual Property at its own
instigation. Cornerstone shall reasonably cooperate with Chiesi to enforce such
rights.
     8.4 Trademarks.
          8.4.1 Cornerstone shall only market and sell the Product in the
Territory under the Trademark. Subject to the terms of this Agreement, Chiesi
grants to Cornerstone an exclusive license to use the Trademark in connection
with the import, use, sale, offer for sale, marketing and distribution of the
Product in the Territory in the Field of Use.
          8.4.2 Cornerstone acknowledges that Chiesi or its Affiliate or
licensors are the owner of all rights, title and interest to the Trademark and
all associated goodwill and further acknowledges that Chiesi may terminate this
Agreement in accordance with the provisions of Section 12.4, if Cornerstone
takes any action which materially impairs any such right, title or

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interest or challenges the validity, scope or enforceability of the Trademark,
or the substantial and secret nature of the Know-How in the Territory. For the
avoidance of doubt, Chiesi shall not have any rights with respect to
Cornerstone’s logo and any other Cornerstone-owned trade dress the Parties agree
to include on the packages, labeling and inserts related to the Product.
          8.4.3 Cornerstone will not attack, dispute, or contest the validity or
the ownership of the Trademark or any registrations issued or issuing with
respect thereto, both during the Term of this Agreement and thereafter.
Cornerstone’s use of the Trademark shall inure to the benefit of Chiesi, for all
purposes including trademark registrations. In the event Cornerstone acquires
any rights relating to the Trademark for any reason, Cornerstone agrees to
assign, and hereby does assign, at no cost, all such rights, together with any
related goodwill, to Chiesi. Cornerstone shall use its best efforts not to do
any act which would or might endanger, destroy or similarly affect the value of
the goodwill pertaining to the Trademark nor do any act which might support a
petition to cancel any registration relating to the Trademark or cause the
applicable registrar to require a disclaimer of exclusive rights in such
Trademark nor assist any other person or other entity directly or indirectly in
such act. Cornerstone will immediately execute any documents presented to it by
Chiesi to confirm Chiesi’s ownership of all such rights.
          8.4.4 Cornerstone shall ensure that each reference to and use of the
Trademark by Cornerstone is in a manner approved by Chiesi and accompanied by
the acknowledgement as follows: “Curosurf is a registered trademark of Chiesi
Farmaceutici S.p.A.”
          8.4.5 Cornerstone shall comply with all reasonable instructions issued
by Chiesi relating to the form and manner in which the Trademark shall be used
in connection with the marketing of the Product by Cornerstone and to
discontinue, upon notice from Chiesi, any practice relating to the use of the
Trademark which in Chiesi’s reasonable opinion would adversely affect the rights
or interest of Chiesi in such Trademarks. Cornerstone shall not alter the
packaging of the Products or conceal, obscure, remove or otherwise interfere
with the Trademark or other markings including an indication of the source of
origin which may be placed on the Product for Chiesi. Cornerstone shall ensure
that the Product is promoted, distributed, handled, marketed, stored on its (or
its designee’s) premises, and shipped to its customers, in such a manner that
would not depreciate the goodwill associated with the Trademark used in
association with the Product.
          8.4.6 Chiesi will be entitled to conduct all enforcement proceedings
relating to the Trademark and shall at its sole discretion decide what action,
if any, to take in respect of any infringement or alleged infringement of the
Trademark or passing-off or any other claim or counter-claim brought or
threatened in respect of the use or registration of the Trademark. Any such
proceedings shall be conducted at Chiesi’s expense and for its own benefit. At
Chiesi’s written request to Cornerstone and Chiesi’s expense, Cornerstone shall
reasonably cooperate with Chiesi in such efforts. Chiesi shall at its own
discretion decide any settlement for any such proceedings or claims. Cornerstone
shall be notified of such proceedings involving the Trademark regardless of
request for cooperation in such efforts within twenty (20) business days.
          8.4.7 If Chiesi elects not to exercise its right pursuant to
Section 8.4.6, Chiesi shall promptly notify Cornerstone in writing of its
election, and of the circumstance of such infringement. In such event
Cornerstone shall have the right, but not the obligation, to take any

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and all action, at its own cost and expense, to obtain a discontinuance of the
alleged infringement and/or to bring suit against such infringer.
          8.4.8 No settlement or consent judgment or other voluntary final
disposition of a suit under this Article 8 may be entered into by either Party
without the prior written consent of the other Party, such consent not to be
unreasonably withheld. Chiesi shall execute or cause the execution of such legal
papers in connection with the foregoing as may be reasonably requested by
Cornerstone.
          8.4.9 In the event of any claim, threat or suit by a Third Party
against either Cornerstone or Chiesi alleging infringement by the Product of any
patents or other Intellectual Property Rights of such Third Party, the Party
receiving such notice shall promptly notify the other Party in writing of such
fact, and the Parties shall defend in close cooperation with each other against
such claim, threat or suit. Such defense shall be at Chiesi’s cost and expense
unless the alleged infringement relates to Cornerstone’s corporate logo or any
other Cornerstone-owned trade dress the Parties agree to include on the
packages, labeling and inserts related to the Product.
          8.4.10 In the event that a conflict arises between the interests of
Chiesi and Cornerstone in any litigation described in this Article 8, the Party
that is not funding the litigation shall have the right to be represented by
counsel of its own choice and at its sole expense.
          8.4.11 Cornerstone shall not sell, market, distribute or use for any
purpose any Product or marketing, packaging or labeling materials related to the
Product which are damaged, defective or otherwise fail to meet the specification
or quality standards or the trademark usage requirements of this Agreement.
Furthermore, during the Term, and after its termination for any reason
whatsoever, Cornerstone shall not use any trademark or trade name identical with
or confusingly similar to the Trademark and shall not apply, before any
authority of any country, for the registration of any internet domain name (nor
any other creative expression that may be the subject of registration),
containing, in any form or graphic character, the name “Chiesi” and/or the
Trademark used hereunder (and/or any other denomination confusingly similar to
the aforesaid names).
     8.5 No Other Rights. Other than the right to purchase Product from Chiesi
as permitted by this Agreement and the limited license to the Trademark,
Cornerstone shall not acquire any rights to or under any Chiesi Intellectual
Property. Except as set forth herein and therein, Cornerstone shall have no
right to use the trade names, trademarks or other intellectual property of
Chiesi except as provided in writing in advance by Chiesi. Upon termination of
this Agreement, Cornerstone will discontinue all use of the Chiesi name,
Trademark and the Chiesi Intellectual Property and discontinue all
representation that it is or was an authorized representative of Chiesi. This
Section 8.5 shall survive the expiration or termination of this Agreement.

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ARTICLE 9
REPRESENTATIONS, WARRANTIES AND COVENANTS
     9.1 Mutual Representations, Warranties and Covenants. Each Party
represents, warrants and covenants that:
          9.1.1 it is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has the
corporate power and authority to execute, deliver, and perform this Agreement;
          9.1.2 the execution of this Agreement and the performance thereof have
been duly authorized by all necessary corporate action on its part and do not
conflict with the terms or conditions of any agreement to which such Party is
subject;
          9.1.3 when executed and delivered by it, this Agreement will
constitute a legal, valid and binding obligation of it, enforceable against it
in accordance with the provisions of this Agreement; and
          9.1.4 it shall perform its obligations under this Agreement in
compliance with all Applicable Laws.
     9.2 Additional Representations, Warranties and Covenants of Cornerstone.
          9.2.1 Cornerstone represents, warrants and covenants that: (a) it has
duly investigated the Know-How in order to determine its interest in entering
into this Agreement; (b) it shall represent the Product accurately and fairly
and shall refrain from misleading or unethical business practices; (c) it shall
conduct its business in a manner that reflects favorably on the Product and the
good name, goodwill and reputation of Chiesi; (d) it shall avoid deceptive or
unethical practices, including disparagement of the Product and (e) it shall not
make any representations, warranties or guarantees to customers or other Third
Parties or to the trade with respect to the Specifications, features or
capabilities of the Product that are inconsistent with the literature or
documentation provided by Chiesi.
          9.2.2 To its knowledge, Cornerstone (i) is not debarred, (ii) is not
in the process of being debarred, (iii) has not been threatened with debarment
and (iii) does not use the services of any persons who have been, or are in the
process of being, debarred under 21 U.S.C. § 335a(a) of the Act or any
comparable law. Furthermore, neither Cornerstone nor, to its knowledge, 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 Applicable Law as a ground for debarment, denial of
approval or suspension.
          9.2.3 Cornerstone has all Agency consents necessary or desirable in
performance of its obligations hereunder and the commercial sale of the Product
in the Territory.
          9.2.4 Cornerstone will not market the Product outside the Field of Use
or outside the Territory nor will it sell the Product to any Third Party for
sale or distribution outside the Field of Use or outside the Territory.

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          9.2.5 All Product commercialized by Cornerstone, or under its
authority, shall (i) be imported, stored, handled, promoted, distributed,
marketed, offered for sale and sold in compliance with the terms of this
Agreement, the Act and all Applicable Laws; (ii) be in accordance with and
conform to any applicable standards specified by the United States Pharmacopeia
and Pharmacopeia Forum and the European Pharmacopeia and Pharmacopeial Forum and
(iii) from and after the time delivered by Chiesi hereunder, be free from any
material that would cause the Product to be adulterated or misbranded within the
meaning of the Act.
     9.3 Additional Representations, Warranties and Covenants of Chiesi.
          9.3.1 Chiesi represents, warrants and covenants, or shall require that
its contract manufacturers represent, warrant and covenant, that the Products at
the time of manufacture shall be free and clear of any lien or encumbrance.
Chiesi further represents, warrants and covenants that, to its knowledge, the
purchase, sale, use, disposition, and advertisement of any Product or the
Trademark by Cornerstone will not infringe on or violate any patent, design,
copyright, trademark, trade secret, or other right of any Third Party, provided
that said activities are not performed in contravention of this Agreement.
Chiesi has the right to grant the rights to Cornerstone contemplated in this
Agreement in the Territory.
          9.3.2 To its knowledge, Chiesi has not used, in any capacity
associated with or related to the manufacture of the Products, the services of
any persons who have been, or are in the process of being, debarred under 21
U.S.C. § 335a(a) or (b) or any comparable Regulatory Act. Furthermore, neither
Chiesi nor, to its knowledge, 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 Applicable Law as a
ground for debarment, denial of approval or suspension.
          9.3.3 Chiesi has, and its contract manufacturer(s) has, all Agency
consents necessary or desirable in performance of its obligations hereunder and
the manufacture of the Product for commercial sale in the Territory.
          9.3.4 Chiesi and its Affiliates will not market the Product in the
Field of Use in the Territory nor will they sell the Product to any Third Party
for sale or distribution in the Field of Use in the Territory.
          9.3.5 The manufacture, generation, processing, packaging,
distribution, transport, treatment, storage, disposal and other handling of any
Product by Chiesi, its Affiliates or its contract manufacturer(s) until delivery
to a carrier or freight forwarder shall (i) be in accordance with and conform to
the Specifications, cGMPs and Chiesi quality policies and guidelines; (ii) be in
accordance with and conform to any applicable standards specified by the United
States Pharmacopeia and Pharmacopeia Forum and the European Pharmacopeia and
Pharmacopeial Forum, (iii) otherwise conform to any provisions of the Regulatory
Requirements not reflected in cGMPs, and (iv) be free from defects in materials
and workmanship and shall not be adulterated or misbranded within the meaning of
the Act; provided, however, that the

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representations and warranties provided in this Section 9.3.5 do not apply to
any Product to the extent that, after shipment by Chiesi, occurrences affecting
or altering the Product after they are delivered to the carrier, or actions
taken or failed to be taken after the Product was shipped, result in the Product
failing to conform to Specifications.
     9.4 Disclaimer. EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, ALL
WARRANTIES, CONDITIONS, AND REPRESENTATIONS, WHETHER EXPRESS OR IMPLIED, ARISING
BY LAW, CUSTOM, PRIOR ORAL OR WRITTEN STATEMENT BY THE PARTIES, OR OTHERWISE
(INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
TITLE, AND NON-INFRINGEMENT) ARE HEREBY OVERRIDDEN, EXCLUDED AND DISCLAIMED.
ARTICLE 10
INDEMNIFICATION
     10.1 Indemnification by Cornerstone. Cornerstone hereby agrees to defend
Chiesi and its Affiliates and their respective directors, officers, employees,
agents, successors and assigns from and against any and all Claims of a Third
Party and to indemnify and hold Chiesi and its Affiliates and their respective
directors, officers, employees, agents, successors and assigns, harmless from
and against any and all Losses to the extent arising from any such Claims of a
Third Party for (i) death or personal injury to the extent arising from the
importation, storage, handling, promotion, distribution, marketing, sale, use or
consumption of the Product, (ii) Cornerstone’s breach of its representations,
warranties or covenants under this Agreement, the Technical Agreement or
Pharmacovigilance Agreement, or (iii) the negligence or willful misconduct or
wrongdoing of Cornerstone or any person for whose actions or omissions
Cornerstone is legally liable, except, in each case, to the extent that such
Losses arise as a result of an item for which Chiesi is obligated to indemnify
Cornerstone pursuant to Section 10.1.
     10.2 Indemnification by Chiesi. Chiesi hereby agrees to defend Cornerstone
and its Affiliates and their respective directors, officers, employees, agents,
successors and assigns from and against any and all Claims of a Third Party and
to indemnify and hold Cornerstone and its Affiliates and their respective
directors, officers, employees, agents, successors and assigns, harmless from
and against any and all Losses to the extent arising from any such Claims of a
Third Party for (i) Chiesi’s breach of its representations, warranties or
covenants under this Agreement, the Technical Agreement or Pharmacovigilance
Agreement, or (ii) the negligence or willful misconduct or wrongdoing of Chiesi,
its contract manufacturer(s) of the Product, or any person for whose actions or
omissions Chiesi is legally liable, except, in each case, to the extent that
such Losses arises as a result of an item for which Cornerstone is obligated to
indemnify Chiesi pursuant to Section 10.1.
     10.3 Indemnification Procedures. No indemnity may be claimed by or given to
the Party seeking to rely on such indemnity:
          10.3.1 unless the Party claiming indemnity shall have promptly
notified the other Party of the relevant potential Loss upon becoming aware of
such potential Loss except to the extent the failure to provide such notice does
not materially prejudice the Party providing such indemnity’s ability to defend
or contest any suit or claim relating to such potential Loss;

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          10.3.2 where the Party seeking indemnification has made any admission
or offer or any settlement without the prior written consent of the indemnifying
Party, which consent shall not be unreasonably withheld or delayed; and
          10.3.3 unless the Party seeking indemnification has allowed the
indemnifying Party to assume full control of all proceedings in relation to any
such potential Loss within thirty (30) days of having been given notice of such
proceedings; provided, that (i) the Party seeking indemnification shall have the
right to appoint independent counsel at its own cost to participate therein and
(ii) no compromise or settlement may be effected by the indemnifying Party
without the prior written consent of the other Party.
     10.4 Insurance. During the Term and for a period of [***] ([***]) months
thereafter, the Parties shall obtain and/or maintain product liability insurance
in such amounts as are reasonable given (i) their responsibilities and
liabilities under this Agreement and (ii) such amounts as may be reasonable and
customary within the industry in respect of the Product and country the subject
of this Agreement. On request, either Party shall provide the other Party with a
certificate of such insurance policy.
     10.5 Limitation on Liability. NOTWITHSTANDING THE FOREGOING WARRANTIES AND
REPRESENTATIONS AND THE FURTHER OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT,
EXCEPT FOR EACH PARTY’S INDEMNIFICATION OBLIGATIONS PURSUANT TO THIS ARTICLE 10,
AND SUBJECT TO ANY EXPRESS PROVISION TO THE CONTRARY, NEITHER PARTY SHALL BE
LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, SPECIAL, STATUTORY, TREBLE,
CONSEQUENTIAL OR PUNITIVE DAMAGES, INCLUDING ANY CLAIM FOR DAMAGES BASED UPON
LOST PROFITS OR LOST BUSINESS OPPORTUNITY EXCEPT WHERE SUCH DAMAGES ARE THE
RESULT OF EITHER PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
ARTICLE 11
CONFIDENTIALITY
     11.1 Confidential Information. Each Party acknowledges that the other Party
may disclose certain information, data or know-how which the disclosing Party
treats confidentially and identifies as confidential or which the recipient
knows or should have reason to believe is so treated by the disclosing Party
(the “Confidential Information”). If either Party discloses such Confidential
Information to the other, the receiving Party will (a) use at least the same
degree of care to maintain the secrecy of such Confidential Information as the
receiving Party uses to maintain the secrecy of its own confidential
information, but in no event less than a reasonable degree of care and (b) use
the Confidential Information only to accomplish the purposes of this Agreement.
     11.2 Disclosure. The receiving Party will not disclose the Confidential
Information of the disclosing Party to any person except those of the receiving
Party’s employees or agents that require access thereto to accomplish the
purposes of this Agreement and have been made aware of the confidentiality
obligations herein, and, in the case of Chiesi, [***] for the purposes of the
[***] Settlement Agreement. If the receiving Party learns of an actual or
potential unauthorized
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commissions.

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use or disclosure of the disclosing Party’s Confidential Information, the
receiving Party will promptly notify the disclosing Party and, at the disclosing
Party’s request, provide the disclosing Party with reasonable assistance to
recover its Confidential Information and to prevent subsequent unauthorized uses
or disclosures of such Confidential Information. Each Party acknowledges that
(a) the unauthorized use or disclosure of any Confidential Information of the
disclosing Party will cause irreparable damage for which it will not have an
adequate remedy at law and (b) the disclosing Party will be entitled to
injunctive and other equitable relief in such cases.
     11.3 Limitations. Neither Party will have any confidentiality obligation
with respect to the Confidential Information of the disclosing Party that
(a) the receiving Party independently knew or develops without using such
Confidential Information of the disclosing Party, (b) the receiving Party
lawfully obtains from another person under no obligation of confidentiality or
(c) is or becomes publicly available other than as a result of an act or
omission of the receiving Party or any of its employees or agents.
     11.4 Terms of Agreement. Except as set forth below, no announcement or
other disclosure, public or otherwise, concerning the financial or other terms
of this Agreement shall be made, either directly or indirectly, by either Party
to this Agreement, except as may be legally required, without first obtaining
the written approval of the other Party as to the nature and text of such
announcement or disclosure, such approval and agreement not to be unreasonably
withheld. Notwithstanding the above, the Parties shall be free to publicly
disclose information contained in such press release that has been previously
approved for disclosure by the other Party, without further approvals from the
other Party hereunder, to the extent there have been no material additions or
changes thereto.
     11.5 Publication of Data. Any publication of clinical and scientific data
relevant to the Product, generated under the terms of this Agreement, will be
jointly planned and agreed upon in advance.
     11.6 Confidentiality Term. All confidentiality provisions set out herein
shall remain in full force and effect during the Term and for a period of [***]
years from the date of termination hereof.
ARTICLE 12
TERM AND TERMINATION
     12.1 Term. This Agreement shall become effective on the Effective Date and
shall remain in force for ten (10) years starting from the Transfer Date
(“Term”). Thereafter, this Agreement shall automatically renew for successive
one year periods, unless earlier terminated by a Party upon six (6) months prior
written notice.
     12.2 Termination upon Adverse Agency Action. Notwithstanding anything
contained in this Agreement, Cornerstone may terminate this Agreement upon
thirty (30) Business Days prior written notice in the event that any Agency
takes any action, or raises any objection, that permanently prevents Cornerstone
from importing, marketing or selling the Product in the Territory. Cornerstone
shall not thereafter be obliged to purchase any Product
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commissions.

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other than that contained in binding forecasts pursuant to Section 5.3.1 that
have been submitted on or before the date of Cornerstone’s notice.
     12.3 Termination upon Regulatory Authority Action. In the event that a
Regulatory Authority requires Cornerstone to cease selling or distributing the
Product in the Territory, Cornerstone will have the right to terminate the
Agreement upon thirty (30) Business Days’ prior written notice. Cornerstone
shall not thereafter be obliged to purchase any Product other than that
contained in binding forecasts pursuant to Section 5.3.1 that have been
submitted on or before the date of Cornerstone’s notice.
     12.4 Termination upon Default or Breach. In the event that either Party
materially breaches this Agreement, the breaching party shall have the
opportunity to cure such breach within (i) thirty (30) Business Days or (ii) a
reasonably longer period if such breach is not capable of cure within thirty
(30) Business Days, in each case after receipt of written notice of such breach.
If the breach is not cured by the breaching party within the applicable cure
period, the non-breaching party shall be entitled to bring action against the
breaching party to recover damages (other than indirect, inconsequential or
punitive damages) arising from such breach. The non-breaching party shall have
the right to terminate this Agreement upon thirty (30) Business Days written
notice (following the expiration of all cure periods) if it can prove that the
consequences of the breaching party’s breach or default have a material adverse
effect on the economic value of this Agreement to such Party and that, absent
termination, such material adverse effect will be permanent in nature.
     12.5 Termination upon Cancellation of the Equity Transaction. In the event
that the transactions contemplated by the Stock Purchase Agreement do not close
by the earlier of (i) October 31, 2009 or (ii) any mutually agreed upon
extension thereof, Chiesi shall have the right to terminate this Agreement upon
[***] months written notice to Cornerstone. Cornerstone agrees that, upon
termination of this Agreement pursuant to this Section 12.5, Chiesi has the
right to offer employment to the Employees and that Cornerstone will not
interfere with Chiesi’s attempts to hire the Employees nor will it attempt to
retain the Employees for employment in other areas of Cornerstone’s business.
     12.6 Effects of Expiration or Termination. Upon expiry or termination of
this Agreement, for any reason whatsoever:
          12.6.1 Cornerstone shall promptly cease selling the Product (except
Product currently in stock, subject to Section 12.6.5) and using the Know-How
and the Trademark;
          12.6.2 Cornerstone shall promptly relinquish and return free of charge
to Chiesi all pharmacological, toxicological and clinical original data in its
possession and all technical information, and Know-How or material relating to
the Product; provided, however, that Chiesi shall reimburse Cornerstone for
reasonable out-of-pocket costs in connection with such return in the event of
termination of this Agreement by Cornerstone pursuant to Sections 12.2, 12.3 or
12.4;
          12.6.3 Cornerstone shall promptly transfer free of charge to Chiesi,
or to a company designated by Chiesi, any and all IND(s), Marketing
Authorization Application(s) and
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

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Marketing Authorization held by Cornerstone; provided, however, that Chiesi
shall reimburse Cornerstone for reasonable out-of-pocket costs in connection
with such transfer in the event of termination of this Agreement by Cornerstone
pursuant to Sections 12.2, 12.3 or 12.4;
          12.6.4 the liabilities of the Parties hereunder in respect of matters
outstanding at the time of such termination shall not be in any way affected;
          12.6.5 Chiesi shall have the option to repurchase all stocks of the
Product, held by Cornerstone within thirty (30) days of termination, in good and
marketable condition at Supply Price to Cornerstone. If the said option to
repurchase the above stock of the Product is not exercised by Chiesi,
Cornerstone shall be entitled to continue to sell the above stock of the Product
in the Territory during the period of [***] ([***]) months after termination but
not thereafter; and
          12.6.6 Sections 8.4.3, 8.4.11 and 12.4 and Articles 10, 11 and 13
shall survive termination of this Agreement.
     12.7 Accrued Rights. Any termination of this Agreement shall be without
prejudice to the rights and remedies of either Party with respect to any of the
provisions of this Agreement or arising out of breaches prior to such
termination and shall not relieve either of the Parties of any obligations or
liability accrued hereunder prior to such termination including indemnity
obligations and confidentiality obligations, nor rescind or give rise to any
right to rescind anything done or payments made or other consideration given
hereunder prior to the time of such termination and shall not affect in any
manner any vested rights of either Party arising out of this Agreement prior to
such termination or expiration.
ARTICLE 13
GENERAL PROVISIONS
     13.1 No Restriction On Activities. Except as otherwise provided in this
Agreement, nothing provided herein shall in any way limit the Parties from
entering into any other business venture or restrict Chiesi from entering into
similar marketing or sales agreements with other persons or entities for the
sale and distribution of other products or services.
     13.2 Legal Relationship. It is understood and agreed by the Parties that
Cornerstone is an independent contractor and is not the agent of Chiesi for any
purpose whatsoever, and Cornerstone has no right or authority in any way to
obligate, assume or create any liability on the part of Chiesi or to make any
representations or warranties, whether express or implied, on behalf of Chiesi,
except as permitted by this Agreement.
     13.3 Authority. Neither Chiesi nor Cornerstone shall have, or represent
that it has, any authority to enter into or make contracts in the name of, or on
behalf of the other, to pledge the other’s credit, to extend credit to the other
or to bind the other in any way.
     13.4 Additions Or Alterations To Chiesi’s Products. Cornerstone shall not
make any additions, modifications or alterations to any Products without
Chiesi’s prior written consent, which Chiesi may withhold in its absolute
discretion.
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commissions.

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     13.5 Assignment; Binding Effect. Neither this Agreement nor any rights or
obligations hereunder may be assigned or otherwise transferred by either Party
without the prior written consent of the other, except that (i) Chiesi may
assign this Agreement to any entity controlled by, under common control with or
controlling Chiesi and (ii) either party may assign this Agreement to any
successor to such party by means of sale of all or substantially all of the
assets of such party or sale of a majority of its voting stock. Subject to the
foregoing, this Agreement is binding upon, inures to the benefit of and is
enforceable by the Parties to this Agreement and their respective successors and
assigns.
     13.6 No Third-Party Beneficiaries. The terms and provisions of this
Agreement are intended solely for the benefit of each Party hereto and their
respective successors or permitted assigns, and it is not the intention of the
Parties to confer third-party beneficiary rights upon any other person.
     13.7 Governing Law; Jurisdiction. Any and all rights, liabilities and any
disputes relating to this Agreement shall be construed under and governed by the
laws of Italy. In the event of any controversy or claim arising out of or
relating to or in connection with any provision of this Agreement or breach
thereof, the Parties shall try to settle those conflicts amicably between
themselves. Should they fail to agree, the matter in dispute shall be finally
and exclusively referred to the courts in England having jurisdiction.
     13.8 Entire Agreement. This Agreement constitutes the entire Agreement
between the Parties hereto with respect to the subject matter and supersedes all
previous agreements, whether written or oral, with respect to such subject
matter other than the Confidentiality Agreement between the Parties dated
January 6, 2009. No modification or alteration shall be binding unless in
writing and signed by both Parties.
     13.9 Notices. All notices and other communications sent to the applicable
address or facsimile number specified below shall be deemed to have been
delivered at the earlier of (i) the time of actual receipt by the addressee;
(ii) if the notice is sent by facsimile transmission, the time indicated on the
transmitting party’s receipt of confirmation of transmission if that time is
during the addressee’s regular business hours on a Business Day, and otherwise
at 9:00 a.m. on the addressee’s next Business Day after such time; and (iii) if
the notice is sent by a internationally recognized, reputable express courier
service, the time shown on the confirmation of delivery provided by that service
if that time is during the recipient’s regular business hours on a Business Day,
and otherwise at 9:00 a.m. on the recipient’s next Business Day after such time.
     Notices to Chiesi shall be addressed to:
Chiesi Farmaceutici S.p.A.
Via Palermo 26/A
43100 Parma
ITALY

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Phone: +39.0521.2791
Fax: +39.0521.774468
Attention: President
Copy to: Head of Corporate Development and Legal and Corporate Affairs
Director
     Notices to Cornerstone shall be addressed to:
Cornerstone Therapeutics Inc.
1255 Crescent Green Drive
Suite 250
Cary, North Carolina 27518
USA
Phone: 919-678-6611
Fax: 919-678-6599
Attention: President
Copy to: General Counsel
     Either Party may change its address by giving notice to the other Party.
     13.10 Counterparts. This Agreement (and any amendments hereto) may be
executed in several counterparts (including by facsimile) and all when so
executed shall constitute one agreement, binding on all of the Parties hereto,
even though all of the Parties are not signatories to the original or the same
counterpart.
     13.11 Severability. If any provision of this Agreement, or the application
of such provision to any person or circumstance shall be held invalid or in
violation of a mandatory provision of Applicable Laws by a court or governmental
agency of competent jurisdiction over this Agreement, it shall be ineffective
and deemed to have been deleted from this Agreement only to the extent of such
invalidity or violations and the remainder of this Agreement, or the application
of such provision to persons or circumstances other than those as to which it is
held invalid, shall not be affected thereby.
     13.12 Waiver. Subject to Applicable Laws and except as otherwise provided
in this Agreement, any Party to this Agreement may extend the time for
performance of any obligation under this Agreement of any other Party or waive
compliance with any term or condition of this Agreement by any other Party. No
such extension or waiver shall be effective unless set forth in a written
instrument duly executed by the Party granting such extension or waiver. No
delay in asserting or exercising a right under this Agreement shall be deemed a
waiver of that right.
     13.13 Further Assurances. At the request of any of the Parties, the other
Party or Parties shall (and shall use reasonable efforts to procure that any
other necessary Third Parties shall) execute and do all such documents, acts and
things as may reasonably be required subsequent to the signing of this Agreement
for assuring to or vesting in the requesting Party the full benefit of the terms
hereof.
     13.14 Headings. The headings herein are for the convenience of the Parties
only and shall not be used in the interpretation of the provisions hereof.

31

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     13.15 Publicity. Except as required by Applicable Law or stock exchange
rules, the Parties agree to keep this Agreement confidential until and except as
they mutually agree on publicity. Subject to Applicable Law, all publicity
regarding this Agreement shall be jointly planned and coordinated by and between
the Parties.
     13.16 Force Majeure. Failure of either Party to perform its obligations
under this Agreement (excepting the obligation to make payments) shall not
subject such Party to any liability to the other if such failure is caused or
occasioned by any Force Majeure. The Party suffering an event of Force Majeure
shall immediately notify the other Party and the Parties shall cooperate in good
faith in order to minimize the damages for the Parties; provided, however, that
the Party whose performance has not been hindered by the Force Majeure shall
have the right to terminate this Agreement, upon 30 (thirty) calendar days’
prior notice to the other, if an event of Force Majeure continues for more than
[***] ([***]) consecutive months. Termination pursuant to the application of
this Section 13.16 shall not constitute a breach of this Agreement on the part
of either Party.
     13.17 Language. All written communication between the Parties or their
Affiliates relating to this Agreement and its implementation shall be in English
language.
[Signature Page Follows]
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

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     IN WITNESS THEREOF, the Parties hereto have caused this Agreement to be
duly executed in duplicate by their authorized officers as of the Effective
Date.

                      CHIESI FARMACEUTICI S.p.A.           CORNERSTONE
THERAPEUTICS INC.    
 
                   
By:
Name:
  /s/ Paolo Chiesi
 
Dr. Paolo Chiesi           By:
Name:   /s/ Craig A. Collard
 
Craig A. Collard        
Title:
  Vice President       Title:   President and CEO    

 

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Appendix A
to the License and Distribution Agreement made as of this 6th day of May, 2009
between Chiesi FARMACEUTICI S.p.A. and Cornerstone THERAPEUTICS Inc.

      Trademark    
 
   
CUROSURF®
  USPTO Registration Number 1905266

             
Chiesi FARMACEUTICI S.p.A.
          Cornerstone THERAPEUTICS Inc.    
 
           
/s/ Paolo Chiesi
 
(Signature)
      /s/ Craig A. Collard
 
(Signature)        

 

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Appendix B
to the License and Distribution Agreement made as of this 6th day of May, 2009
between Chiesi FARMACEUTICI S.p.A. and Cornerstone THERAPEUTICS Inc.
Floor Price equal to:
1.5 ml = [***]
3.0 ml = [***]
MINIMUM ORDER
500 units or multiples thereof, unless otherwise mutually agreed by the Parties

             
Chiesi FARMACEUTICI S.p.A.
          Cornerstone THERAPEUTICS Inc.    
 
           
/s/ Paolo Chiesi
 
(Signature)
      /s/ Craig A. Collard
 
(Signature)        

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

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

 

Appendix C
to the License and Distribution Agreement made as of this 6th day of May, 2009
between Chiesi FARMACEUTICI S.p.A. and Cornerstone THERAPEUTICS Inc.
Commercial Incentives + Minimum Commitments
During each contract year, on actual unit volumes of Product in excess of total
volumes of Product above the previous year: Supply Price ([***]%) — [***]%

     
Minimum Commitments:
  At least [***] FTEs devoted to the Product per calendar year  
 
  At least [***] per calendar year spent marketing expenses for the Product

             
Chiesi FARMACEUTICI S.p.A.
          Cornerstone THERAPEUTICS Inc.    
 
           
/s/ Paolo Chiesi
 
(Signature)
      /s/ Craig A. Collard
 
(Signature)        

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.