Exhibit 10.50

***     INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
AND EXCHANGE ACT OF 1934, AS AMENDED.

Second Amended and Restated Bulk Material Supply Agreement

Parties

ViroPharma Incorporated, a Delaware corporation, with offices at 730 Stockton
Drive, Exton, PA 19341, USA (“ViroPharma”); and

Xellia Pharmaceuticals Inc., a Delaware corporation, with offices at 34121 N.
Hwy 45, Suite 207, Grayslake, IL 60030, USA, the successor in interest hereunder
to Alpharma Inc. (“Xellia”).

Effective Date of this Second Amended and Restated Bulk Materials Supply
Agreement (this “Agreement”): January 1, 2011 (the “Effective Date”).

Signature Date of this Second Amended and Restated Bulk Materials Supply
Agreement: December 14, 2010.

Expiration Date (subject to termination provisions): The term of this Agreement
shall continue until December 31, 2015 (the “Initial Term”). Following the
Initial Term, this Agreement shall automatically renew for a one (1) year period
unless ViroPharma delivers written notice to Xellia of its intention not to
renew at least *** prior to the end of the Initial Term and, thereafter, this
Agreement shall renew for consecutive periods of one (1) year (each a “Renewal
Term”) unless and until either party submits to the other party written notice
of its intention not to renew at least *** prior to the end of any Renewal Term.

Background

ViroPharma is a corporation that develops and sells pharmaceutical products.

Xellia is experienced in manufacturing certain active pharmaceutical
ingredients.

ViroPharma and Alpharma, Inc., the predecessor-in-interest to Xellia, had
entered into that certain Amendned and Restated Bulk Material Supply Agreement,
effective as of April 5, 2006 (the “Superseded Agreement”) which has governed
purchases of Product by ViroPharma.

ViroPharma and Xellia have come to certain understandings regarding their
on-going supply relationship and wish to memorialize those understandings by
amending and restating the Superseded Agreement and entering into this Second
Amended and Restated Bulk Material Supply Agreement.

The parties agree that the Amended and Restated Quality Agreement, a copy of
which is attached hereto as Exhibit B (the “Quality Agreement”) shall remain in
full force and effect during the Initial Term and each Renewal Term. For the
sake of clarity, the parties agree and acknowledge that Xellia, as
successor-in-interest to Alpharma, is a party to the Quality Agreement and all
references to Alpharma in the Quality Agreement shall be deemed to be references
to Xellia.

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Therefore, ViroPharma and Xellia agree as follows:

Xellia and ViroPharma hereby amend and restate the Superseded Agreement in its
entirety and replace it with this Agreement, effective as of the Effective Date.

XELLIA’S RIGHTS AND OBLIGATIONS

 

1. Xellia’s General Rights and Obligations

Xellia shall supply to ViroPharma certain of ViroPharma’s requirements for
Product, subject to and in accordance with the terms and conditions of this
Agreement, including the Product Specifications (attached as Exhibit C - Product
Specifications).

 

2. Manufacture and Supply of Product

(a) Xellia will manufacture Product at Xellia’s United States Food and Drug
Administration (“FDA”) approved facilities in *** in accordance with cGMP, the
Product Specifications and the Quality Agreement and Applicable Law. ViroPharma
shall be fully responsible for the safety and efficacy, and compliance with all
Applicable Laws, in connection with the use (and the manner and method of use)
of the Products in finished dosage form pharmaceutical products into which the
Products are introduced by ViroPharma, except to the extent that any safety or
efficacy problem is related to the manufacture of the Product.

(b) Xellia will notify ViroPharma of any changes, including but not limited to
any change in the manufacturing process or Product specifications or control
methods which are likely to alter the identity, purity, quality, potency or
stability of the Product and which require a regulatory filing with the FDA.
Xellia will notify ViroPharma not less than ninety (90) days prior to
implementation of any such change so that ViroPharma will have reasonable time
to allow ViroPharma to update applicable regulatory filings and evaluate the
effect on its finished product prior to receiving Product which incorporates the
change. However, Xellia will not notify ViroPharma of any Annual Reportable
Changes before implementation. In the event that ViroPharma does not agree to
accept Products with changes proposed by Xellia pursuant to this subsection (b),
ViroPharma shall promptly notify Xellia in writing of that decision. The parties
shall then attempt in good faith to resolve ViroPharma’s objections over a
thirty (30) day period, failing which resolution ViroPharma shall have the right
to terminate this Agreement with *** written notice provided, however, that
during this *** termination period ViroPharma shall have the right to terminate
this Agreement immediately upon written notice if at any time during the ***
termination period Xellia is unable to continue to supply to ViroPharma Product
manufactured in accordance with the manufacturing process or Product
specifications or control methods, as applicable, which were effective before
the change implemented by Xellia to which ViroPharma did not agree.

 

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3. Xellia’s Invoices

(a) Timing. Xellia will submit invoices for Product upon shipment from the place
of delivery set forth in Section 25.

(b) Invoices. Invoices must state the product name, lot number(s), quantities,
manufacturing site *** and date of shipment for each delivery.

(c) Currency. Invoices will be in United States dollars and payment will be in
United States dollars. If the invoice’s United States dollar amounts are derived
from currency other than United States dollars, Xellia must state the amount of
that currency and use the appropriate exchange rate, as published in the Wall
Street Journal on the date of shipment from the place of delivery set forth in
Section 25, to convert that currency to United States dollars.

 

4. Allocation of Supply

(a) During the term of this Agreement, except as explicitly set forth in this
Agreement, Xellia will (at Xellia’s discretion) supply Product from either the
***, provided, however, that at least *** percent***(***%) of the total
aggregate quantity of Product supplied from Xellia to ViroPharma during each
calendar year shall be ***-Sourced Product, and at least *** percent***(***%) of
the Product shall be ***. The parties acknowledge that the objective of the
minimum supply percentages from each site pursuant to the foregoing is to ensure
continued qualification of Product manufactured at each site as source of
Product. Xellia shall provide to ViroPharma written certification of the actual
supply allocation on a quarterly basis. Further, upon ViroPharma’s request the
parties shall meet by telephone conference and/or in person to discuss the
allocation.

(b) In the event of any occurrence relating to the *** that affects or may
affect Xellia’s ability to deliver Product in compliance with Section 4(a) above
or any other terms of this Agreement, including any event of Force Majeure,
Xellia shall: (A) immediately notify and keep ViroPharma informed of such
occurrence and Xellia’s management of such occurrence; and (B) notwithstanding
Section 4(a) above increase its output of Product from the non-affected plant in
order to ensure continued supply of Product to ViroPharma in compliance with
Xellia’s obligations under this Agreement.

(c) Xellia acknowledges and agrees that if for any reason Xellia’s supply of
Product at any time, including during an event of Force Majeure, is insufficient
to meet its obligation to ViroPharma under this Agreement and to other customers
under other agreements, purchase orders or arrangements relating to the Product
(a “Product Shortfall”) then during such Product Shortfall, Xellia agrees to
allocate the available Product in a manner *** *** than to Xellia’s other
***customers, provided that it is acknowledged that Xellia maintains safety
stock of various products for certain customers and that if any safety stock of
the Product is maintained by Xellia at the time of any Product Shortfall such
safety stock will not be taken into account when determining the allocation of
Product. If Xellia’s inability to supply Product to ViroPharma affects only the
***, it is Xellia’s right and responsibility to supply Product to ViroPharma
from the plant not affected by the inability to supply Product in accordance
with this Section 4(c) notwithstanding the requirement for minimum supply from
each site pursuant to Section 4(a) above.

 

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5. Debarment

Xellia represents and warrants that (i) it is not and will not use and (ii) to
the extent required under Applicable Law its Subcontractors are not and will not
use, in any capacity, the services of any Person debarred under United States
law (and if applicable under the law of the country of manufacture) from
participating in the development, or the application for approval of a drug
product in connection with this Agreement. Xellia will require the same
certification of Subcontractors, if applicable to this Agreement. If at any time
this representation and warranty is no longer accurate, Xellia shall promptly
notify ViroPharma of such fact.

 

6. Recalls

(a) In the event ViroPharma should be required or should voluntarily decide to
initiate a recall, withdrawal, or field correction of any ViroPharma
pharmaceutical containing the Product, Xellia shall reasonably cooperate with
ViroPharma concerning the necessity and nature of such action if it is
associated with the Product.

(b) In the event that Xellia independently believes that a recall, withdrawal,
or field correction of the ViroPharma pharmaceutical containing the Product may
be necessary or appropriate due to reasons associated with the Product, Xellia
shall notify ViroPharma and the parties shall fully cooperate with each other
concerning the necessity and nature of such action.

(c) In the event that any ViroPharma pharmaceutical containing the Product is
recalled as a result of (1) the Product supplied by Xellia not conforming to the
warranties set forth in this Agreement, or (2) the negligent or intentionally
wrongful act of Xellia or its representatives, then Xellia shall bear all of the
out-of-pocket costs and expenses directly related to such recall including,
without limitation, expenses related to communications and meetings with all
required regulatory agencies, expenses of replacement stock, the cost of
notifying customers and costs associated with shipment of recalled ViroPharma
pharmaceuticals containing the Product from customers and shipment of an equal
amount of replacement pharmaceuticals to those customers. In the event that any
ViroPharma pharmaceutical containing the Product is recalled for any other
reason, then ViroPharma shall bear all of the costs and expenses of such recall,
including without limitation expenses related to communications and meetings
with all required regulatory agencies, expenses of replacement stock, the cost
of notifying customers and costs associated with shipment of recalled ViroPharma
pharmaceuticals from customers and shipment of an equal amount of replacement
ViroPharma pharmaceuticals to those customers. In the event that the reason for
any recall of ViroPharma pharmaceutical containing the Product hereunder is in
part the responsibility of Xellia and in part the responsibility of ViroPharma,
then the expenses shall be allocated ***. In the event either party decides to
proceed with a voluntary recall under subsections (a) or (b) above and the other
party disagrees with the propriety of such voluntary recall, the cost sharing
provisions of this subsection (c) shall only apply if a court of competent
jurisdiction holds that such recall was reasonable and proper.

 

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7. Obligations at End of Term

(a) Upon expiration, notice of termination or notice of cancellation of this
Agreement, both parties will reasonably cooperate with each other to wind down
and close this Agreement smoothly. Each party as the Receiving Party (as that
term is defined in Section 20) will also, at its sole expense and unless
required otherwise by Applicable Law: (i) promptly effect the removal of
Confidential Information (as such term is defined in Section 20) from its
systems and files and those of its Subcontractors (ii) deliver to the other
party any of its property in the Receiving Party’s possession or control, and
(iii) promptly deliver to the other party any Records of Confidential
Information in its possession or control.

(b) As an alternative to delivery of property or Records of Confidential
Information, and if permitted by Applicable Law, each party may direct the
Receiving Party to destroy them or deliver them to another destination of the
other party’s choosing. The exercise of this right must be in writing.

 

8. Xellia’s Right to Cease Manufacturing

If Xellia shall decide to discontinue manufacturing the Product, Xellia or its
successor manufacturer may terminate this Agreement upon *** notice.

VIROPHARMA’S RIGHTS AND OBLIGATIONS

 

9. ViroPharma’s General Rights and Obligations

(a) Requirements. ViroPharma will purchase each calendar year no less than ***
percent ***%) of its requirements for Product for the calendar year from Xellia,
except for requirements for markets where Product manufactured by Xellia has not
been approved by the local marketing authority; provided that if Xellia is
unable to meet the purchase orders of ViroPharma with respect to quantity
ordered and time for delivery (assuming that such purchase orders meet the terms
of this Agreement), then ViroPharma may obtain *** from a third person, and such
amount of Product shall be counted toward ViroPharma’s purchase requirements
under this Section 9(a) and Section 14(a) as specified in Clause 13 and 26. It
is acknowledged that this Agreement does not prevent ViroPharma from
establishing and qualifying third party suppliers of Product during the Term of
this Agreement. For the purposes of clarity, the foregoing shall not be
understood to limit ViroPharma’s purchase requirements under Section 9(a) and
14(a) of this Agreement.

(b) Amount of Payment. ViroPharma will pay Xellia the amounts described by and
in accordance with this Agreement.

(c) Payment terms. Payment will be due *** days after ViroPharma’s Accounts
Payable Department receives an invoice that complies with the requirements in
Section 3 of this Agreement, except that ViroPharma may withhold payment of any
amount that it may reasonably dispute in good faith until such dispute is
resolved. Notwithstanding the foregoing provision, in the event of an assignment
of this Agreement by ViroPharma, payment shall be made to Xellia by the assignee
in advance of any shipment of Products until the assignee is able to establish
its creditworthiness to Xellia’s reasonable satisfaction.

 

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10. Changes to Product Specifications

ViroPharma, at its option from time to time, may request a change in the Product
Specifications by notifying Xellia in writing. The parties will work together in
good faith to determine whether to implement the proposed change. As soon as
possible, but in any event within *** days after the change request is received
by Xellia, Xellia will notify ViroPharma of any adjustments in compensation or
delivery timing necessary to accommodate the changed Product Specifications. The
revised Product Specifications will become applicable as of the date mutually
agreed to by ViroPharma and Xellia, and all references thereafter to the
“Product Specifications” will refer to the Product Specifications as modified.
The new Product Specifications will be attached hereto. Notwithstanding the
above provisions, should Xellia and ViroPharma fail to reach agreement on the
implementation of any change in the Product Specifications, Xellia’s obligation
to supply Products pursuant to the then presently effective Product
Specifications shall remain unchanged and ViroPharma shall have the right to
terminate this Agreement upon *** months written notice.

 

11. Intentionally Deleted

 

12. ViroPharma’s Obligations at End of Term

In the event of any termination or cancellation of this Agreement before it
expires, ViroPharma will be obligated to compensate Xellia only for work
correctly performed prior to the termination or cancellation including, without
limitation, the purchase and payment for any Products then subject to a Purchase
Order, as defined below in paragraph 14.

COMMERCIAL SUPPLY

 

13. Forecasting

(a) During the term of this Agreement, not less than *** days prior to the first
day of each calendar quarter, ViroPharma shall provide Xellia with a rolling ***
quarter forecast for its purchases of the Product (the “Forecast”). Each
Forecast shall represent ViroPharma’s best estimate at such time of its Product
requirements from Xellia for such *** month period; provided, however, that the
Forecasts (i) are for the convenience of Xellia only, (ii) shall not constitute
firm purchase or shipping orders, and (iii) shall not be binding upon, or create
any obligation or liability with respect to, ViroPharma. Within *** days of
ViroPharma’s submittal of each Forecast, Xellia will either confirm its
acceptance of the Forecast or submit a revised forecast, indicating delivery
dates acceptable to Xellia. The parties agree that the purpose of this process
is to accommodate both ViroPharma’s Product requirements and Xellia’s
manufacturing processes and business planning, and that they will discuss in
good faith and reach agreement upon, a revised forecast. The first calendar
quarter of such revised forecast, or the first calendar quarter of a Forecast
accepted by Xellia without revision, will be referred to herein as the “Accepted
Forecast”. Once a Forecast is accepted for a given calendar quarter, ViroPharma
may alter its forecasted Product requirements for any calendar quarter (except
the *** quarter for which a binding Purchase Order is required pursuant to
Section 14) in a succeeding Forecast and Xellia may accept such new Forecast or
respond with a proposed revised forecast, which will be discussed and agreed to
between the parties using the process described above (which shall thereupon
become the new “Accepted Forecast”).

 

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(b) In the event that the parties are unable to agree on a revised forecast, and
Xellia in good faith indicates that it cannot meet the relevant Forecast
proposed by ViroPharma, the parties agree to refer the matter to their
respective senior managements. If Xellia is unable to supply ViroPharma’s
requirements for Product for any calendar quarter as set forth in a Forecast,
then notwithstanding the requirements of Section 9(a) above, (a) ViroPharma
shall be permitted to purchase from a third party an amount of Product equal
to*** as reflected in such Forecast less the amount of Product that Xellia
indicates ***, and (b) such amount of Product shall be counted toward
ViroPharma’s purchase requirements under Section 9(a) and Section 14(a) of this
Agreement.

 

14. Orders

(a) During the term of this Agreement not less than *** days prior to the first
day of each calendar month in which a delivery is required, ViroPharma will
provide Xellia with a binding purchase order which cannot be cancelled or
changed without the written consent of Xellia, except as permitted by
Section 26(c) (Late or Non-Delivery) setting forth the quantities of Product
ordered for ***, the delivery dates for such quantities, shipping instructions,
and the locations to which such quantities shall be delivered (the “Purchase
Order”). The quantities indicated in a Purchase Order will be for no less than
***percent***%) on a minimum-take-or-pay basis (the “Minimum Order”), and no
more than ***percent***%) (the “Maximum Order”), of the Accepted Forecast for
that calendar month. For the purpose of clarity, Xellia will accept each
Purchase Order that is submitted in accordance with the terms of this Agreement
provided that quantities of Product set forth in the Purchase Order that exceed
the Maximim Order will only be part of the Purchase Order to the extent provided
in the following sentence. Xellia will use ***, consistent with its commitments
to other customers, to supply Product in excess of the Maximum Order, but shall
not be obligated to do so.

(b) Within *** days after receipt of each Purchase Order, Xellia shall confirm
the delivery dates during such calendar month, such delivery date not to exceed
*** days after the date specified in the Purchase Order. Xellia shall promptly
notify ViroPharma of any delay in delivery dates and plant shutdown schedules;
provided that any such notifications of any delays or shutdowns shall not excuse
Xellia of any of its obligations under this Agreement and ViroPharma’s receipt
of such notifications with or without response thereto shall not, in the absence
of an explicit written waiver, constitute a waiver of any of ViroPharma’s rights
hereunder.

(c) Any terms and conditions contained in a Purchase Order or any confirmation
or other document or instrument that conflict with the terms and conditions of
this Agreement shall have no force or effect.

 

15. Shipping

Shipping instructions and terms shall be as set forth on Exhibit E - Shipping.

 

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16. Records

During the term of this Agreement and for three (3) years after its expiration
or termination, Xellia will maintain production batch records and batch release
documentation for the Product and ViroPharma will maintain such records and
documentation for the products manufactured by ViroPharma that include the
Product.

 

17. Pricing

(a) The purchase price for Product supplied under this Agreement after the
Effective Date through the termination or expiration of this Agreement shall be
***dollars ($*** per KgA, subject to any adjustments required under
Section 17(c) (the “Purchase Price”). For the sake of sake of clarity, the
Purchase Price shall not *** during the term of this Agreement.

(b) The Purchase Price will be Xellia’s total compensation for full performance
of all its obligations under this Agreement (whether performed by Xellia or any
of its Subcontractors), including (but not limited to) all labor, materials,
expenses, overhead, taxes and profit as well as shipping, customs, duties until
the agreed place of delivery, as described in Section 25.

(c) Notwithstanding Section 17(a) above, as from the Effective Date Xellia shall
not invoice ViroPharma for a *** *** for the Product than that paid for the
Product by*** provided that Xellia has ***that such *** ***are purchasing the
***for use in a ***that is the ***with the ***for sale in the ***. If, at any
time after the Effective Date Xellia should sell the Product to *** at a ***that
is *** the ***and provided that Xellia has ***that such *** are purchasing the
***for use in ***that are the ***or ***with the ***for sale in the ***, Xellia
shall promptly notify ViroPharma and ViroPharma shall be entitled to receive
***the ***of such ***for the *** of the *** of this Agreement. Upon the written
request of ViroPharma, Xellia agrees that an officer of Xellia shall certify in
writing to ViroPharma that Xellia is in compliance with this Section 17(c).

 

18. Contacts

ViroPharma Contacts

 

    

Person primarily responsible for
accepting Product (may be changed
anytime by ViroPharma).

  

Person primarily responsible for this
contractual relationship (may be changed
anytime by ViroPharma).

Name    ***    *** Position    Associate Director    Director Mailing Address   

730 Stockton Drive

Exton, PA 19341

  

730 Stockton Drive

Exton, PA 19341

Telephone    ***    *** Facsimile    ***    *** E-mail    ***    ***

 

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Xellia Contacts

 

    

Person primarily responsible for
furnishing Product (may be changed
anytime by Xellia).

  

Person primarily responsible for this
contractual relationship (may be changed
anytime by Xellia).

Name    ***    *** Position    Manager, Global Technical Support, API   
Director of US Sales Mailing Address   

Xellia Pharmaceuticals ApS

Dalslandsgade 11

P.O. Box 1736

2300 Copenhagen S, Denmark

  

Xellia Pharmaceuticals, Inc.

34121 N. Hwy 45, Suite 207

Grayslake, IL 60030

USA

Telephone    ***    *** Facsimile    ***    *** E-mail    ***    ***

INFORMATION AND PROPERTY RIGHTS AND OBLIGATIONS

 

19. Intellectual Property Rights

(a) Xellia reserves all rights (other than the license granted by this
Section 19) to Xellia’s Intellectual Capital, if any, that is incorporated into
the Product. Xellia grants to ViroPharma, its Affiliates, and their respective
successors and permitted assigns a non-exclusive, world-wide, royalty-free
license to such Xellia’s Intellectual Capital sufficient to allow full lawful
use of the Products for the manufacture of ViroPharma’s finished product.

(b) Product supplied by Xellia under the Agreement will be used by ViroPharma
only for the purpose of manufacturing ViroPharma’s finished products VANCOCIN®
or any generic equivalent (the “Finished Dosage Form”) for sale in the United
States, which Finished Dossage Form will be distributed and sold to third
parties, either by ViroPharma itself, its Affiliates or by third party contract
manufacturers and distributors manufacturing and distributing ViroPharma’s
finished products on behalf of ViroPharma. ViroPharma warrants and undertakes
not to use the Product for any other purpose whatsoever and not to resell the
Product to any third party until such time as the Product has been incorporated
in ViroPharma’s Finished Dosage Form.

 

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20. Confidentiality

(a) Because of this Agreement, Xellia may have access to ViroPharma’s
Confidential Information, and ViroPharma may have access to Xellia’s
Confidential Information (for the purposes of this Section 20, ViroPharma’s
Confidential Information and Xellia’s Confidential Information shall
collectively be referred to as “Confidential Information”). Both parties will
hold Confidential Information of the other party (“Disclosing Party”) in strict
confidence and will not use it for purposes other than those set forth in this
Agreement. The party receiving the Confidential Information (the “Receiving
Party”) will reveal Confidential Information only to those Employees and
Employees of Subcontractors who need to know the information to perform under
this Agreement and who have executed a confidentiality and non-use undertaking
agreement consistent with this Section. The Receiving Party will inform its
Employees who have access to Confidential Information of its confidential
nature. The Receiving Party is responsible for any unauthorized use or
disclosure of Confidential Information by its Employees, its Subcontractors, or
its Subcontractors’ Employees.

(b) Confidential Information shall not include any information which the
Receiving Party can show: (a) was in the public domain prior to disclosure to
the Receiving Party, or which thereafter came into the public domain without the
Fault, or without the breach of any confidentiality obligation by the Receiving
Party; or (b) was known by the Receiving Party prior to disclosure as shown by
competent evidence; or (c) was disclosed to the Receiving Party by a third party
not in violation of any obligations of confidentiality to the Disclosing Party;
or (d) is independently developed by employees of the Receiving Party who have
not had access to any Confidential Information of the Disclosing Party; or
(e) is required to be disclosed by Applicable Law, but only if the Receiving
Party gives the Disclosing Party prior written notice in order to allow the
Disclosing Party a reasonable opportunity to prevent disclosure or to seek entry
of a protective order; or (f) was approved for release by written authorization
of the Disclosing Party.

(c) Nothing in this Section gives the Receiving Party any right or license in
any patent, trade secret, copyright, trademark or other Intellectual Property of
the Disclosing Party, other than to use Confidential Information for purposes of
this Agreement.

(d) Upon written instruction from the Disclosing Party, and consistent with
requirements of Applicable Law, the Receiving Party will promptly effect the
removal of all copies and instances of Confidential Information from its systems
and files and those of its Subcontractors and deliver to the Disclosing Party or
otherwise dispose of all Records containing Confidential Information in the
Receiving Party’s possession or control.

(e) The parties’ obligations under this Section shall remain in effect during
the term of this Agreement and shall continue for ten (10) years thereafter.

 

21. Audit Record Creation and Retention

(a) At its own expense, Xellia will create and maintain all Records required by
this Agreement and by Applicable Law that relates to this Agreement and to
Xellia’s performance under this Agreement. Such Records shall also be sufficient
to: (A) demonstrate that any and all amounts invoiced to ViroPharma under this
Agreement are accurate and proper in both kind and amount; (B) demonstrate the
accuracy of any

 

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representations or reports submitted to ViroPharma under this Agreement; and
(C) enable ViroPharma to comply with Applicable Laws and other legal
obligations, to the extent that Xellia has or reasonably should have knowledge
of those Applicable Laws and other legal obligations.

(b) In creating and maintaining Records, each party will employ standards and
practices that are no less rigorous than those employed by prudent, well managed
enterprises within their respective countries of domicile that provide types of
products similar to those Xellia provides under this Agreement, and to those
that ViroPharma manufactures with those Xellia or similar types of products.
Each party will maintain all of the Records listed above for the longest of the
following retention periods that applies: (i) any period prescribed by
Applicable Law or stated expressly in this Agreement in another section,
(ii) for Records related to invoices, for three (3) years after payment of the
invoice by ViroPharma, (iii) for Records related to reports submitted to
ViroPharma, for three (3) years after the report is submitted, and (iv) for all
Records not addressed by one of the above, for three (3) years after the term of
this Agreement.

Access to Records and Facilities

(c) Subject to Section 20 (Confidentiality) and to subsection (d) of this
Section, each party, as the Audited Party, will allow the other party, as the
Auditing Party, to inspect Records the Audited Party is required to create or
maintain under this Agreement for the purposes of evaluating and verifying:
(i) compliance with the requirements of this Agreement, (ii) compliance with
Applicable Law related to this Agreement or to the Audited Party’s performance
under this Agreement, (iii) in the case of Xellia, the accuracy and propriety of
any invoice submitted to ViroPharma, and (iv) the accuracy of any
representations or reports submitted to the Auditing Party.

(d) During the Audited Party’s regular business hours, and upon *** advance
written notice, the Auditing Party may enter and inspect any premises where
Records are maintained or Products are manufactured as the Auditing Party deems
necessary to accomplish the evaluations and verifications described in
subsection (c) of this Section. The Audited Party will cooperate with the
Auditing Party and provide reasonable assistance to the Auditing Party to
facilitate the evaluation and inspection, and the Auditing Party will reasonably
cooperate with the Audited Party to mitigate disruption to the Audited Party’s
operations. In the event that Records are maintained, Products are manufactured,
or the Auditing Party’s Property is kept at premises that the Audited Party does
not control, the Audited Party will secure rights of entry and inspection
sufficient to allow the Auditing Party to exercise its rights under this
Section. The Auditing Party, its Employees or its designees may exercise the
Auditing Party’s rights of entry and inspection under this Section; provided
however that, unless prohibited by Applicable Law, anyone conducting or
participating in such an inspection shall be required to execute a
confidentiality agreement consistent with the confidentiality provisions of this
Agreement. Examples of Persons that the Auditing Party may designate include its
independent auditors and representatives of Government Authorities having
jurisdiction over the Audited Party or its activities related to this Agreement.

 

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(e) Quality Audit Findings. Xellia agrees to cooperate with ViroPharma and to
take such other actions as may be reasonably necessary to carry out the purpose
and intent of this Agreement with respect to manufacturing quality and
capability, including without limitation, developing action plans to address any
technical deficiencies noticed by ViroPharma and agreed to by Xellia in a timely
manner.

(f) For Records generated by Electronic databases, spreadsheets, programs or the
like, the Auditing Party’s rights to access and inspection under this Section
shall extend to the database, spreadsheet or program that generated the Record
as well as the Record itself.

Audit Expenses

(g) The Auditing Party will pay its own expenses for any inspection of the
Records on Audited Party’s premises.

Other provisions

(h) Records required by this Section may also fall within the definition of
legal work product or Xellia’s Intellectual Capital. The property rights to such
Records are established elsewhere in this Agreement, not this Section. The
Records may contain ViroPharma’s Confidential Information, in which case Xellia
must satisfy the obligations under the Confidentiality section, in addition to
the obligations of this Section.

(i) Each party’s obligations to maintain Records under this Section are
extinguished to the extent that such party properly satisfies an obligation
elsewhere in this Agreement to dispose of such Records or to deliver such
Records to the other party or otherwise properly disposes of them in accordance
with other provisions of this Agreement.

 

22. Publicity and Nondisclosure

(a) Neither party will disclose any information about this Agreement, including
its existence, nor will it use the name of the other party, such party’s
employees or any product of such other party in any press release, advertisement
or materials distributed to prospective or existing customers, annual reports or
any other public disclosure, except with such other party’s prior written
consent or as required by Applicable Law. To the extent allowed by Applicable
Law, if either party desires to make a public announcement, such party will
provide copies of any proposed disclosure for prior review and comment by the
other party’s external corporate communications (public relations) department no
less than ten (10) days prior to disclosure. Under no circumstances will either
party use the other party’s logo or represent, directly or indirectly, that any
product provided by such party has been approved, recommended, certified or
endorsed by such other party.

(b) Any consent given by one party under this Section is revocable by written
notice to the other party.

(c) Notwithstanding anything in this Section 22 and Section 20 to the contrary,
ViroPharma may, without the written consent of Xellia, make mandatory filings or
disclosures to the Securities and Exchange Commission required by applicable law
that discuss the subject matter of this Agreement or any exhibit or attachment
hereto (including without limitation, filing this Agreement and any exhibit or
attachment), provided that ViroPharma shall consult with Xellia before making
any such disclosure or filing with reference to Xellia.

 

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REPRESENTATIONS AND WARRANTIES

 

23. Xellia’s Representations and Warranties

Xellia represents and warrants that:

 

(a) Xellia is duly organized and in good standing under the laws of the
jurisdiction of its formation, and any authorization necessary for making and
performing under this Agreement have been given.

 

(b) The making and performance of this Agreement do not conflict with Xellia’s
governing documents or any contractual obligation to another.

 

(c) Xellia’s performance under this Agreement (including the manufacture of
Product and Xellia’s employment practices) complies with all Applicable Law.

 

(d) All Product (whether manufactured at the ***or ***) supplied by Xellia under
this Agreement is or was and shall be manufactured in accordance with the
Product Specifications, cGMP, the Quality Agreement and all other Applicable
Laws.

 

(e) All Product (whether manufactured at the ***or ***) supplied by Xellia under
this Agreement will conform to the Product Specifications.

 

(f) Xellia has obtained all permits, licenses and other authorizations which are
required under Applicable Law to manufacture the Product at the ***and***.
Xellia is in compliance, and during the term of this Agreement will take all
actions necessary to comply, with all terms and conditions of any and all
required permits, licenses and authorizations applicable to the manufacture and
supply of Product. No Product delivered to ViroPharma pursuant to this Agreement
will be manufactured or processed in any equipment that has been used to process
animal or human tissue.

 

(g) All Products are and shall be at the time of delivery free from defects in
material and workmanship.

 

(h) The Products are shall be at the time of delivery free from all liens,
Claims and encumbrances.

 

(i) The manufacture, sale or use of the Products within *** and *** does not
infringe any rights (including trademark rights, copyrights, patents, trade
secrets, or contractual rights) of any other Person, and any use thereof by
ViroPharma or its successors consistent with this Agreement does not infringe
such right; provided that such warranty does not extend to the form or function
of the finished product into which ViroPharma or its successors may incorporate
the Products. This representation and warranty does not apply to infringement
arising solely from ViroPharma’s or its successor’s use of the Product in a
manner that is contrary to Xellia’s recommendations, or in combination with
other materials.

 

(j)

EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH ABOVE IN THIS
SECTION, XELLIA MAKES NO OTHER REPRESENTATION, GUARANTEE OR WARRANTY, EXPRESS OR
IMPLIED, OF ANY KIND OR NATURE AND, IN PARTICULAR AND WITHOUT LIMITATION, XELLIA
EXPRESSLY DISCLAIMS ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF
MERCHANTABILITY OR

 

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FITNESS FOR A PARTICULAR USE OR PURPOSE WITH RESPECT TO THE PRODUCT SUPPLIED
HEREUNDER, WHETHER USED SINGLY OR IN COMBINATION WITH OTHER SUBSTANCES OR IN ANY
PROCESS OR OTHERWISE.

 

24. ViroPharma’s Representations and Warranties

ViroPharma represents and warrants that:

 

(a) It is duly organized and in good standing under the laws of the jurisdiction
of its formation, and any authorizations necessary for making and performing
this Agreement have been given.

 

(b) The making and performance of this Agreement do not conflict with
ViroPharma’s governing documents or and contractual obligation to another.

RISK ALLOCATION

 

25. Delivery and Risk of Loss

All Product (whether manufactured at the ***or ***) will be delivered by Xellia
***. Title and risk of loss shall pass to ViroPharma ***.

 

26. Breach and Remedies

(a) Remedies cumulative. Except to the extent that remedies are expressly
limited in this Agreement, each party is entitled to all the remedies available
to it in law and in equity. The parties do not intend the identification of a
particular remedy to limit a party to that remedy unless the language clearly
states that the remedy is the sole or exclusive remedy.

(b) Termination for material breach or bankruptcy. This Agreement may be
terminated immediately upon written notice by either party hereto, if: (1) the
other party fails to remedy a material breach of this Agreement within ninety
(90) days of written notice of such breach; or (2) the other party shall file a
petition for bankruptcy, shall be adjudicated bankrupt, shall take advantage of
the insolvency laws of any state, territory or country, or shall have a
receiver, trustee, or other court officer appointed for its property.

(c) Late or Non-delivery of Product. In the event that Xellia fails to deliver
Product on or before the delivery date specified in the applicable Purchase
Order, ViroPharma shall notify Xellia of such delay and Xellia shall provide
ViroPharma with the precise date of arrival for the shipment. If ViroPharma
cannot accept the new date specified for delivery by Xellia, or if the shipment
fails to arrive within *** days after the newly specified date to which
ViroPharma has agreed, then ViroPharma may cancel all or a portion of the
affected order without liability to Xellia. The quantities so cancelled will be
credited against ViroPharma’s purchase requirements under Section 9(a) and 14(a)
of this Agreement. In addition, provided that the reason for the delay is caused
by Xellia, Xellia will reimburse ViroPharma for the difference between
ViroPharma’s contract price with Xellia under this Agreement and the actual cost
of any cover product purchased by ViroPharma upon Xellia’s failure to supply
provided that Xellia shall not, in any event, owe ViroPharma a payment under
this subsection (c) which exceeds ***% of the

 

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purchase price of all cancelled orders if such Products had been timely
delivered hereunder. The remedies set forth in this subparagraph 26(c) shall be
ViroPharma’s sole and exclusive remedy in respect of late or non-delivery of
Product except, if applicable, the remedies set forth in Sections 26(b) and (f).

(d) Non-conforming Product. ViroPharma reserves the right to reject Product that
does not conform to the Product Specifications. ViroPharma will provide written
notice that Product has been rejected within *** days of receipt of the Product,
or within *** days of discovery of the non-conformity, should it not be evident
upon reasonable inspection at the time of delivery. Within *** days after
receipt of such rejection, Xellia will have the right to inspect such Product at
ViroPharma’s facility and, whether or not it conducts such an inspection, Xellia
shall determine within *** days after receipt of ViroPharma’s written notice
whether the Product at issue is non-conforming, following which determination:

(1) If Xellia has determined that the rejected Product is non-conforming, it
shall accept return of the Product and, at Xellia’s discretion, either
(1) replace the non-conforming Product with new Product meeting the Product
Specifications as quickly as possible, or (2) refund the purchase price paid by
ViroPharma and ViroPharma’s shipping costs, within *** days after receipt of
ViroPharma’s rejection notice. If Xellia chooses not to so replace the
non-conforming Product, ViroPharma shall have the right to obtain substitute
product from another supplier. If ViroPharma exercises that right, it shall so
notify Xellia and shall provide Xellia with the invoice covering the replacement
product. Provided that the reason that the Product was non-conforming is caused
by Xellia, upon receipt of which invoice, Xellia will reimburse ViroPharma for
the difference between ViroPharma’s contract price with Xellia under this
Agreement and the actual cost of the cover product purchased by ViroPharma to
replace the non-conforming Product provided that Xellia shall not, in any event,
owe ViroPharma a payment under this subsection (d)(1) which exceeds *** percent
(***%) of the contract price under this Agreement for the returned
non-conforming Product. Any non-conforming Product for which Xellia elects to
issue a refund will be credited against all of ViroPharma’s purchase
requirements under Section 9(a) and 14(a) of this Agreement.

(2) If Xellia has determined that the rejected Product conforms to the Product
Specifications and if the parties, after good faith discussion for a period of
*** days between their senior managements, are unable to resolve the issue of
conformity, then the issue shall be referred to an independent third party
expert (“Mediator”) agreeable to both parties for final resolution. If the
parties are unable to agree on a Mediator, then each party shall appoint an
expert, and the two experts shall jointly appoint a Mediator to finally resolve
the issue of conformity. Pending the Mediator’s award, ViroPharma shall have the
rights set forth in the preceding subsection 26(d)(1), subject to reimbursement
of Xellia if the Mediator determines that the rejected Product met Product
Specifications.

(3) Regardless whether or not Xellia agrees that the rejected Product is
non-conforming, if the rejection of the Product results in an urgent need for
replacement Product for ViroPharma, ViroPharma shall be entitled to request that
Xellia supplies an additional quantity of Product substantially identical to the
Product rejected by ViroPharma, such request to include indication of the
desired delivery date. Xellia will use commercially reasonable efforts to supply
such quantity of Product to ViroPharma within the requested delivery date, but
shall not be obligated to do so. The Product shall be supplied in accordance
with the terms and conditions, including pricing and delivery, of this
Agreement.

 

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The remedies set forth in this subparagraph 26(d) shall be ViroPharma’s sole
remedies for Product that ViroPharma has rejected as non-conforming, except, if
applicable, the remedies set forth in Sections 26(b) and (f).

(e) Equitable relief. Both parties acknowledge that, due to the nature of their
respective businesses, monetary damages are inadequate to protect them from any
threatened or actual breach of their respective duty to protect the Receiving
Party’s Confidential Information and that any breach will cause irreparable harm
to the Receiving Party. Accordingly, both parties agree that the Receiving Party
shall be entitled to an injunction restraining any breach or threatened breach
of Section 20 (Confidentiality) above without having to prove the inadequacy of
monetary damages or irreparable harm.

(f) Remedies For Certain Breaches. For the purpose of this Section 26(f), a
“Triggering Event” shall mean if Xellia fails to deliver Product on or before
the delivery date specified in the applicable Purchase Order or Product
delivered to ViroPharma by Xellia fails to meet the quality requirements and any
other requirements set forth in this Agreement, provided that any such failure
is not caused by Force Majeure, and in all instances whether or not the parties
agree that such Triggering Event is a material breach of the Agreement or, with
the passage of time may become a material breach of the Agreement. In the event
that a Triggering Event occurs three (3) or more times in the trailing six
(6) month period, then ViroPharma shall have the right, upon delivery of written
notice to Xellia, to purchase Product from third parties notwithstanding
ViroPharma’s purchase requirements under Section 9(a) and 14(a) of this
Agreement, with all amounts purchased from such third parties credited towards
amounts that ViroPharma is obligated to purchase from Xellia under under
Section 9(a) and 14(a) of this Agreement, until such time that Xellia has
addressed such issues. Xellia will be deemed to have addressed the issues at the
latest at such time that during the trailing six months period no Triggering
Event has occurred.

 

27. Insurance

Each party will maintain all the insurance policies listed in the attached
Exhibit D - Insurance with insurers reasonably acceptable to the other party
with limits no less than those in the Exhibit. The policies (whether based on
occurrence or Claims made) will cover all material occurrences or accidents
arising under this Agreement which are subject to a standard Commercial General
Liability policy. Immediately after this Agreement is fully executed, and on the
annual renewal date of such policies thereafter, each party will furnish the
other party a certificate of insurance evidencing such coverage, and stating
that the insurers reflected in such certificate will (at a minimum) endeavor to
notify the other party at least *** days in advance of cancellation. All
policies will name the other party as an additional insured and will contain a
waiver of subrogation if favor of the other party. The policies will cover
Claims arising from the acts or omissions of the respective insureds and anyone
for whose acts or omissions they

 

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may be liable. In addition to the foregoing requirements, in the event of an
assignment of this Agreement by ViroPharma, the assignee shall provide Xellia,
by the end of each calendar quarter, with an updated certificate of insurance
evidencing all such coverage and information.

 

28. Indemnification

(a) Indemnification by Xellia. Xellia agrees to indemnify, defend and hold
harmless ViroPharma, its distributors, affiliates and their respective officers,
directors, employees, and agents against any and all (i) third-party Claims,
including Claims made against ViroPharma by any of its distributors, and Claims
made by Xellia’s Subcontractors and (ii) Losses incurred by any of them, to the
extent such Claims and Losses arise out of any non-compliance with the Product
Specifications attached as Exhibit C - Product Specifications, or out of any
breach of a representation, obligation, warranty or covenant hereunder by Xellia
or any negligent or intentionally wrongful act or omission by Xellia, in
connection with the manufacture or delivery of the Product.

(b) Indemnification by ViroPharma. ViroPharma agrees to indemnify, defend and
hold harmless Xellia, its affiliates and their respective officers, directors,
employees, and agents against any and all (i) third-party Claims, and
(ii) Losses incurred by any of them to the extent such Claims and Losses arise
out of any breach of any representation, obligation, warranty or covenant
hereunder by ViroPharma, or out of any negligent or intentionally wrongful act
or omission by ViroPharma or, except to the extent covered by Section 28(a)
(Indemnification by Xellia) above, in connection with the production, marketing
or sale of the finished dosage form of the Product.

(c) Third Party Claims. If either party, including its distributors, affiliates
or their respective officers, directors, employees, servants or agents (in each
case an “Indemnitee”), receives any written Claim which such Indemnitee believes
is the subject of indemnity hereunder by the other party hereto (an
“Indemnitor”), the Indemnitee shall promptly give notice thereof to the
Indemnitor, provided that the failure to give timely notice to the Indemnitor as
contemplated hereby shall not release the Indemnitor from any liability to the
Indemnitee unless the Indemnitor demonstrates that the defense of such Claim is
prejudiced by such failure (and, in the event of such late notice, the
Indemnitor is only responsible for costs incurred after the notice is provided
and the Indemnitee is responsible for any increase in costs related to its late
notice). The Indemnitor shall have the right, by prompt notice to the
Indemnitee, to assume the defense of such Claim at its cost, with counsel
reasonably satisfactory to the Indemnitee. If the Indemnitor does not so assume
the defense of such Claim or, having done so, does not diligently pursue such
defense, the Indemnitee may assume the defense, with counsel of its choice, but
at the cost of the Indemnitor. If the Indemnitor so assumes the defense, it
shall have absolute control of the litigation; the Indemnitee may, nevertheless,
participate therein through counsel of its choice and at its cost. The party not
assuming the defense of any such Claim shall render all reasonable assistance to
the party assuming such defense, with all reasonable pre-approved out-of-pocket
costs of such assistance (which shall not include any costs of time spent) for
the account of the Indemnitor. No such Claim shall be settled other than by the
party defending the same, and then only with the consent of the other party,
which consent shall not be unreasonably withheld; provided that the Indemnitee
shall have no obligation to consent to any settlement of any such Claim which
imposes on the Indemnitee any liability or obligation which cannot be assumed or
performed in full by the Indemnitor.

 

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29. Force Majeure

Either party will be excused from performing its obligations, other than its
obligation to pay monies owed, under this Agreement to the extent that its
performance is delayed or prevented by a Force Majeure. To be excused, the party
claiming Force Majeure must promptly notify the other party and exercise due
diligence to avoid, remove or overcome the Force Majeure, except as set forth
below with respect to labor strikes. The following is a non-exclusive list of
examples that may qualify as Force Majeure: fire, explosion, power failure,
labor strikes (whether or not the demands of the employees involved are
reasonable and within such party’s power to concede), acts of God, natural
disasters, war, insurrection, civil strife, government acts and acts of
terrorism. This Agreement may be terminated by the party not asserting Force
Majeure if an event of Force Majeure with respect to the asserting party shall
have continued for *** days or is reasonably expected to continue for more than
*** days.

In the event that Xellia’s performance is excused because of Force Majeure,
ViroPharma shall have the right, upon delivery of written notice to Xellia, to
purchase Product from third parties notwithstanding ViroPharma’s purchase
requirements under Section 9(a) and 14(a) of this Agreement, with all amounts
purchased from such third parties credited towards amounts that ViroPharma is
obligated to purchase from Xellia under Section 9(a) and 14(a) of this
Agreement, until such time that Xellia’s performance is no longer excused
because of Force Majeure.

For the purposes of clarity, if the events and circumstances described in this
Section only affect supply of Product from the ***, Xellia shall as soon as
possible arrange to supply Product to ViroPharma from the non-affected site in
accordance with Section 4(c), and Xellia shall be excused from performing its
obligations to supply Product to ViroPharma due to Force Majeure only for the
period of time reasonably required for Xellia to arrange the supply of the
Product from the non-affected site.

GENERAL TERMS AND CONDITIONS

 

30. Independent Contractor

(a) In performing its obligations under this Agreement, Xellia will be acting
solely as an independent contractor and not in the capacity of an agent,
partner, joint-venturer or in any other such capacity. Neither Xellia nor
ViroPharma will have the authority to bind, commit or incur any liability on
behalf of the other party or to otherwise act in any way as agent or
representative of the other party, except as specifically set forth herein.

(b) Neither Xellia, its Employees, and its Subcontractors nor its
Subcontractors’ Employees will be considered employees of ViroPharma for any
purpose. ViroPharma will not withhold any taxes, pay any Social Security, pay
unemployment compensation, or furnish worker’s compensation for any of them, and
ViroPharma will not provide any employment benefits to any of them.

 

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31. Succession, Assignment and Delegation

(a) This Agreement will be binding upon and inure to the benefit of the parties
to this Agreement and their respective heirs, executors, administrator,
successors and permitted assigns.

(b) Neither party will, in whole or in part, delegate obligations or duties of
performance, or assign rights under this Agreement (other than assignment of
Xellia’s right to receive money) without (1) the other party’s prior written
consent, which consent such other party may withhold or condition in its
absolute discretion (except that in case of assignment of the entire Agreement
in connection with a sale, merger or consolidation involving all or
substantially all of a Party’s business related to the Product, the other Party
will not unreasonably withhold its consent; and (2) the prior written agreement
of the prospective assignee to be bound by the provisions of this Agreement. Any
such attempted delegation or assignment without such written consent or without
the assignee’s agreement will be void. For the avoidance of doubt, a change of
control of either Party shall not be considered attempted delegation or
assignment of the Agreement by that Party.

(c) Should ViroPharma consent to Xellia’s use of a Subcontractor, Xellia will be
fully responsible to ViroPharma for any portion of the performance of this
Agreement by such Subcontractor, to the same extent as if that performance was
rendered directly by Xellia. Without limiting the generality of the foregoing,
and in addition to the other rights and responsibilities set forth in this
Agreement, the Parties acknowledge and agree that Xellia is entitled to use ***,
as a Subcontractor for certain services related to the manufacture at the ***.

 

32. Severability

If a provision of this Agreement is held to be unenforceable, the other
provisions will remain in effect. If possible, the offending provision will be
modified to the slightest degree necessary to make it enforceable, remaining as
close as possible to the parties’ original intent for the provision. If not
possible, the offending provision will be stricken.

 

33. Contract Interpretation

(a) The meaning of a provision of this Agreement will be considered in context
with other provisions of the Agreement.

(b) The following principles apply to the construction of this Agreement unless
the construction is plainly contrary to the intent of the parties:

 

  (i) Where language has a generally prevailing meaning, it is interpreted in
accord with that meaning;

 

  (ii) Technical terms and terms of art are given their technical meaning when
used in a transaction within their technical field;

 

  (iii) Capitalized words and terms are as defined in the attached Exhibit A -
Definitions or in the text of the main section of this Agreement, as the case
may be;

 

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  (iv) Singular words may be treated as plural and plural words may be treated
as singular; and

 

  (v) Masculine gender words may be treated in the feminine and feminine gender
words may be treated as masculine.

(c) In computing any period of time under this Agreement, the day of the act,
event, or default from which the designated period of time begins to run is not
included. The last day of the period so computed is included, unless it is a
Saturday, a Sunday, or a Business Holiday.

 

34. Choice of Law

This Agreement shall be governed by and construed in accordance with the laws of
New York, disregarding its conflict of laws principles which might otherwise
require the application of the laws of another jurisdiction. The parties
expressly exclude the United Nations Convention on Contracts for the
International Sale of Goods from this Agreement.

 

35. Survival

The expiration, termination or cancellation of this Agreement will not
extinguish the rights of either party that accrue prior to expiration,
termination or cancellation or any obligations that extend beyond termination,
expiration or cancellation, either by their inherent nature or by their express
terms.

 

36. Execution in Counterparts

This Agreement may be executed in separate identical copies (counterparts), each
of which is considered an original, but all of which, when taken together, are
one Agreement. Delivery of an executed counterpart by Electronic or facsimile
transmission is as effective as delivery of an original written counterpart.

 

37. No Waiver

(a) No provision of this Agreement is waived unless the waiver is in writing and
signed by an authorized representative of the party granting the waiver.

(b) No delay in exercising any right, power or privilege under this Agreement
will operate to waive completely or partially any present or future exercise of
that right, power or privilege.

 

38. Notice

(a) Unless specifically directed otherwise in the Agreement, whenever written
notice is required by this Agreement, it must be delivered to the attention of
the individual indicated below by:

 

  (i) certified mail, postage pre-paid, return receipt requested;

 

  (ii) hand delivery;

 

  (iii) commercial overnight delivery service such as Federal Express or United
Parcel Service; or

 

  (iv) facsimile.

 

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(b) Either party may change its address for notices by written notice to the
other.

(c) Notice is effective when received. If delivery of any written notice under
this Agreement cannot be made despite the exercise of diligent efforts, the
requirement to give notice is excused.

 

If Xellia gives ViroPharma notice: Deliver notice to:    Send a copy to:

ViroPharma Incorporated

730 Stockton Drive

Exton, PA 19341

  

ViroPharma Incorporated

730 Stockton Drive

Exton, PA 19341

Attention:         Director, Supply Chain    Attention:         General Counsel
Facsimile:         (610) 458-7380    Facsimile:         (610) 458-7380 If
ViroPharma gives Xellia notice: Deliver notices to:    Send a copy to:

Xellia Pharmaceuticals ApS

Dalslandsgade 11

P.O. Box 1736

2300 Copenhagen S, Denmark

  

Xellia Pharmaceuticals, Inc.

34121 N. Hwy 45, Suite 207

Grayslake, IL 60030 USA

USA

Attention:         Legal Department    Attention:         Director of US Sales
Facsimile:         +45 3264 5501    Facsimile:         +1-847-201-8468

 

39. Integrated Agreement and Amendments

 

Integrated Agreement

(a) This Agreement (including any documents referenced by it) is the final,
complete and exclusive expression of all the statements, promised, terms and
conditions within its scope. This Agreement supersedes all prior agreements or
promises, whether written or oral, within its scope, and shall not be modified
except by an Amendment as described below in subsection 39(b). Notwithstanding
the foregoing, this Agreement shall not be understood to supersede, amend or
modify the letter agreement dated as of December 14, 2010 between the parties,
which shall remain in full force and effect. Neither party has

 

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relied upon any representation whatsoever by the other party, other than
representations in this Agreement. No provision set forth in any Purchase Order,
order confirmation form or any other writing pertaining to an order placed under
this Agreement which is inconsistent with or in addition to the provisions of
this Agreement shall be binding on either party except as set forth in an
Amendment.

 

Amendments

(b) No amendment to this Agreement will be binding on either party unless it is
in writing and signed by an authorized representative of each party.

 

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Agreed and accepted:

 

Xellia Pharmaceuticals Inc.    ViroPharma Incorporated Signed: /s/ Carl-Åke
Carlsson                Signed: /s/ Vincent J. Milano             Name: Carl-Åke
Carlsson    Name: Vincent J. Milano Title: Chief Executive Officer    Title:
President and Chief Executive Officer

 

Exhibits:      Exhibit A    Definitions Exhibit B    Quality Agreement Exhibit C
   Product Specifications Exhibit D    Insurance Exhibit E    Shipping

 

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EXHIBIT A: Definitions

An Affiliate of a party means any entity that controls, is controlled by, or is
under common control with that party. One entity is deemed to control the other
if and only if it directly or indirectly (1) owns more than fifty percent
(50%) of the equity in the other; or (ii) controls more than fifty percent
(50%) of the voting rights of the other.

Agreement means the body of this Agreement and any exhibits and amendments to
any of them.

Xellia’s Confidential Information means information that ViroPharma receives
from Xellia in performing under this Agreement that is nonpublic, confidential,
or proprietary in nature to Xellia and includes third party information that
Xellia is obligated to maintain in confidence. The confidential nature of
information is not affected by the manner of its communication to or acquisition
by ViroPharma, whether by oral, visual, written, Electronic or other means.
Xellia’s Confidential Information does not include information that is excluded
from the definition of Confidential Information under the provisions of
Section 20(b) in the main section of this Agreement.

Xellia’s Intellectual Capital means all Intellectual Property owned by Xellia
that was created, developed or reduced to practice prior to Xellia’s performance
under this Agreement.

Xellia’s Property means any Intellectual Property and other personal property,
both tangible and intangible, owned solely or jointly by Xellia, whether such
ownership arises under this Agreement or otherwise.

Amended and Restated Quality Agreement means the document to be attached hereto
as Exhibit B - Quality Agreement.

Applicable Law means any statute, law, treaty, rule, code, ordinance,
regulation, permit, interpretation, certificate or order of a Government
Authority, or any judgment, decision, decree, injunction, writ, order, subpoena,
or like action of any court, arbitrator or other government entity including the
U.S. Federal Food, Drug & Cosmetic Act and the food, drug and environmental laws
in ***, as applicable.

Annual Reportable Changes means minor changes in the drug substance, drug
product, production process, quality controls, equipment, or facilities that
have minimal potential to have an adverse effect on the identity, strength,
quality, purity or potency of the drug product. Annual reportable changes are
submitted in an annual update.

Business Holiday means any day on which a party to this Agreement is not
regularly scheduled to be open for business.

Claim includes claims, demands, lawsuits, administrative proceedings or similar
actions.

The Effective Date is the first day the Agreement is in effect, and is specified
on the first page of this Agreement.

Electronic relates to technology having electrical, digital, magnetic, wireless,
optical, electromagnetic, or similar capabilities.

Employee means an officer, director, employee or temporary contract worker.

 

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The Expiration Date is the day the term of the Agreement expires if it is not
cancelled or terminated sooner.

Fault means any of the following: (1) any breach, whether by act or omission, of
a covenant, representation or warranty under this Agreement; (2) negligence or
gross negligence; and (3) any willful, wanton, or intentional misconduct.

Force Majeure is any cause that is beyond the party’s reasonable control, as
more specifically defined in Section 29.

Government Authority means any state, local or foreign government entity,
authority, agency, instrumentality, court, tribunal, regulatory commission or
other body, whether legislative, judicial, administrative or executive (or a
combination or permutation thereof), and any arbitrator to whom a dispute has
been presented under government rule or by agreement of the parties with an
interest in such dispute.

Indemnitee is a Person with a right to be indemnified.

Indemnitor is a Person with an obligation to indemnify another Person.

Intellectual Property means all inventions, original expressions of ideas
embodied in a tangible form, trademarks, trade secrets, and the like that are
afforded (or may be afforded upon action by a Government Authority, such as the
United States or other country Patent Office or its equivalent agency) property
rights (or quasi-property rights) including patents, copyrights, trademarks,
trade secrets, publicity rights, privacy rights, and moral rights (such as
rights of attribution and integrity).

ViroPharma’s Confidential Information means information that Xellia receives
from ViroPharma in performing this Agreement that is nonpublic, confidential, or
proprietary in nature to ViroPharma and includes third party information that
ViroPharma is obligated to maintain in confidence. The confidential nature of
information is not affected by the manner of its communication to or acquisition
by Xellia, whether by oral, visual, written, Electronic or other means.
ViroPharma’s Information does not include information excluded from the
definition of Confidential Information under the provisions of Section 20(b) in
the main section of this Agreement.

ViroPharma’s Property means any Intellectual Property and other personal
property, both tangible and intangible, owned solely or jointly by ViroPharma,
whether such ownership arises under this Agreement or otherwise.

Loss includes losses, damages, liabilities, costs, or expenses (including
interest, penalties and, subject to the provisions in Section 28
(Indemnification), reasonable attorney fees, accounting fees, and expert witness
fees) recoverable at law or in equity, whether sounding in contract, tort,
strict liability or other theory.

Minimum Yield means the minimum yield, if any, specified in the applicable
Agreement.

Person includes an individual, partnership, corporation and association.

Product means vancomycin HCL.

Product Specifications means the product specifications identified in and
attached to this Agreement as Exhibit C: Product Specifications.

 

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Quality Agreement means the document attached hereto as Exhibit B: Quality
Agreement and which sets out the parties respective responsibilities for Product
quality.

Record means without limitation, all information, data, text, images, sounds
codes, source codes, computer programs, software, data bases or the like, used,
created or obtained in the performance of this Agreement, inscribed in tangible
medium or stored in and Electronic or other medium and that is retrievable in
perceivable form.

Subcontractor means any individual, partnership, corporation, association or
other entity that performs any of the obligations of Xellia under this
Agreement, whether in privity to Xellia or in privity to another Subcontractor.

 

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EXHIBIT B: QUALITY AGREEMENT

See attached.

 

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EXHIBIT C: PRODUCT SPECIFICATIONS

Specification for Vancomycin HCl, USP

 

Tests

  

Method

  

Acceptance Criteria

***    ***    *** ***    ***    *** ***    ***    *** ***    ***    *** ***   
***    *** ***    ***    *** ***    ***    *** ***    ***    *** ***    ***   
***

 

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EXHIBIT D: INSURANCE

 

Policy

  

Limits

General Liability    *** Umbrella liability following from the above policies   
***

 

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EXHIBIT E: SHIPPING

 

  •  

Xellia will book shipments with:

***

or such other carrier as is identified by Xellia.

 

  •  

Shipment Method:

Air or Surface as specified

 

  •  

Shipping conditions: (See Quality Agreement)

 

  •  

Temperature monitoring: (See Quality Agreement)

 

  •  

Ship to address:

Specified on Purchase Order

 

  •  

Shelf Life of API:

Material should have *** or more shelf life prior to shipment.

 

  •  

Shipment Documentation:

Certificate of Analysis for each lot shipped and packing list will accompany
each shipment. The Certificate of Analysis results displayed will be as
requested by ViroPharma.

(See Exhibit B for Quality Agreement)

Upon shipment, Xellia will fax the following documents to ViroPharma

Quality (***)]and Supply Director (***) and CMC Director (***)

Certificate of Analysis for each lot shipped

Commercial Invoice

Packing list

 

  •  

Quality Control Release: (see Appendix for Quality Agreement)

 

  •  

Receipt of Damaged Product:

 

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IAW Section 26 of Agreement

ViroPharma will file claims for lost and damaged product and transportation from
Xellia to OSG Norwich (USA)

 

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