[Note: Certain portions of this document have been marked “[confidential
treatment requested]” or “[c.i.]” to indicate that confidentiality has been
requested for this confidential information. The portions have been omitted and
filed separately with the Securities and Exchange Commission.]

EXHIBIT 10.1

 

FIRST AMENDMENT

TO

LICENSE, DEVELOPMENT AND MARKETING AGREEMENT

 

This First Amendment to License, Development and Marketing Agreement (this
“Amendment”) dated December 8, 2003 between INSPIRE PHARMACEUTICALS, INC., a
Delaware corporation, having an address of 4222 Emperor Boulevard, Suite 470,
Durham, North Carolina 27703 (“INSPIRE”) and ALLERGAN, INC., a Delaware
corporation, having an address of 2525 Dupont Drive, Irvine, California 92612
and its Affiliates Allergan Sales, LLC. (formerly Allergan Sales, Inc.) and
Allergan Pharmaceuticals Holdings (Ireland) Ltd. (collectively “ALLERGAN,” and
together with INSPIRE, the “Parties”).

 

PRELIMINARY STATEMENTS

 

WHEREAS, INSPIRE and ALLERGAN entered into that certain License, Development and
Marketing Agreement dated as of June 22, 2001 (the “Agreement”); and

 

WHEREAS, in connection with, as a partial consideration for, the execution of
that certain Elestat™ (Epinastine) Co-Promotion Agreement between INSPIRE and
Allergan Sales, LLC (formerly Allergan Sales, Inc.), the Parties wish to amend
the Agreement; and

 

WHEREAS, capitalized terms used in this Amendment and not otherwise defined
shall have the meanings assigned to such terms in the Agreement.

 

NOW, THEREFORE, in consideration of the foregoing, and other good and valuable
consideration, the receipt and sufficiency of which the Parties acknowledge, the
Parties hereby agree as follows:

 

1.    Section 9.7(b) shall be deleted in its entirety and replaced by the
following new Section 9.7(b).

 

Restasis™ Royalties. As further consideration to Inspire for the license and
other rights granted to Allergan under this Agreement, during the term of this
Agreement, Allergan shall pay to Inspire a royalty on Net Sales by Allergan or
its Affiliates of Restasis™ in each country in the Restasis™ Territory, as
follows:

 

  (i) For Sales of Restasis™ in the United States and subject to Section
9.7(b)(iii) below:

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[Note: Certain portions of this document have been marked “[confidential
treatment requested]” or “[c.i.]” to indicate that confidentiality has been
requested for this confidential information. The portions have been omitted and
filed separately with the Securities and Exchange Commission.]

 

  A. For the first (1st) twelve-month period (i.e., months 1 through 12)
following the First Commercial Sales of Restasis™ in the United States, the
royalty shall be [confidential treatment requested] of Net Sales of Restasis™ in
the United States

 

  B. For the second (2nd) twelve-month period (i.e., months 13 through 24)
following the First Commercial Sales of Restasis™ in the United States, the
royalty shall be [confidential treatment requested] of Net Sales of Restasis™ in
the United States.

 

  C. For the third (3rd) twelve-month period (i.e., months 25 through 36)
following the First Commercial Sales of Restasis™ in the United States, the
royalty shall be [confidential treatment requested] of Net Sales of Restasis™ in
the United States.

 

  D. For the fourth (4th) twelve-month period (i.e., months 37 through 48)
following the First Commercial Sales of Restasis™ in the United States, the
royalty shall be [confidential treatment requested] of Net Sales of Restasis™ in
the United States.

 

  E. Commencing on the first day of the forty-ninth (49th) month following the
First Commercial Sale of Restasis™ in the United States and continuing through
the term of this Agreement, the royalty shall be [confidential treatment
requested] of Net Sales of Restasis™ in the United States;

 

(ii) For sales of Restasis™ in all countries in the Restasis™ Territory other
than the United States and subject to Section 9.7(b)(iii) below:

 

  A. For the first (1st) twelve-month period following the First Commercial Sale
of Restasis™ in a particular country, the royalty shall be [confidential
treatment requested] of Net Sales of Restasis™ in that country;

 

  B. Commencing on the first day of the thirteenth (13th ) month following the
First Commercial Sale of Restasis™ in a particular country, through the term of
the Agreement, the royalty shall be [confidential treatment requested] of Net
Sales of Restasis™ in that particular country.

 

(iii) Notwithstanding any other provision of this Agreement, upon Program
Termination as set forth in Section 7.3(d), and in the event of Inspire’s
failure to cure within the time period provided in such Section 7.3(d) its
failure to meet the Restasis™ Obligation, each of the above-referenced royalties
shall be [confidential treatment requested] to the following:

 

Page 2 of 5

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[Note: Certain portions of this document have been marked “[confidential
treatment requested]” or “[c.i.]” to indicate that confidentiality has been
requested for this confidential information. The portions have been omitted and
filed separately with the Securities and Exchange Commission.]

 

  A. The royalty referenced in Section 9.7(b)(i)(B) shall be [confidential
treatment requested].

 

  B. The royalty referenced in Section 9.7(b)(i)(C) shall be [confidential
treatment requested].

 

  C. The royalty referenced in Section 9.7(b)(i)(D) shall be [confidential
treatment requested].

 

  D. The royalty referenced in Section 9.7(b)(i)(E) shall be [confidential
treatment requested].

 

  E. The royalty referenced in Section 9.7(b)(ii)(B) shall be [confidential
treatment requested].

 

2.    Section 7.3(b)(i) shall be deleted in its entirety and replaced by the
following new Section 7.3(b)(i):

 

Upon exercise by Inspire, at [confidential treatment requested] prior to the
date Inspire begins co-promotion activities, of its Inspire Product Option,
Inspire shall be entitled to provide, at its sole expense, [confidential
treatment requested] Inspire Full-Time Sales Representatives and associated
management infrastructure in the United States. In such event, the JCC shall
determine the targets, roles and assignments of Inspire’s and Allergan’s sales
representatives within such selling effort.

 

3.    Section 7.3(c)(i) shall be deleted in its entirety and replaced by the
following new Section 7.3(c)(i):

 

Upon any exercise by Inspire of its Restasis™ Option, Inspire shall be required
to provide, at its sole expense, at [confidential treatment requested] of the
budgeted Allergan sales force but [confidential treatment requested] Inspire
Full-Time Sales Representatives and associated management infrastructure in the
United States. In such event, the JCC shall determine the targets, roles and
assignments of Inspire’s and Allergan’s sales representatives within such
selling effort. Inspire shall provide Allergan with [confidential treatment
requested] notice of its intent to begin co-promoting Restasis™ pursuant to the
Restasis™ Option, shall provide [confidential treatment requested] notice of any
intent to cease co-promoting Restasis™ pursuant to this Section 7.3(c), and, in
any event, if it commences the co-promotion of Restasis™ pursuant to the
Restasis™ Option, Inspire shall not cease co-promoting Restasis™ during any
Restasis™ marketing cycle, as determined by the JCC.

 

Page 3 of 5

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[Note: Certain portions of this document have been marked “[confidential
treatment requested]” or “[c.i.]” to indicate that confidentiality has been
requested for this confidential information. The portions have been omitted and
filed separately with the Securities and Exchange Commission.]

 

4.    Section 7.2 (Allergan Responsibilities; Rights) shall be amended to
include a new subsection (g) as follows:

 

Allergan shall provide to Inspire within twenty (20) days after the close of
each month a written sales report of Restasis and Inspire Product sales for the
preceding month, which report shall be considered Confidential Information of
Allergan subject to restrictions set forth in Section 13 and shall only be used
by Inspire for internal business purposes only provided that Sections 13.3
(Exclusions) and 13.5 (Exceptions) shall not apply to such sales reports and
furthermore, INSPIRE acknowledges that notwithstanding any other provision of
this Agreement, it shall be a material breach of this Agreement if INSPIRE
breaches the terms of this Section 7.2(g), including without limitation,
disclosing said sales report or any portion thereof to investors, analysts or
other Third Party or providing opinions or financial projections to Third
Parties based in whole or in part on said sales reports; except that INSPIRE may
use said sales report to assist it to estimate its quarterly revenue and report
the same as required by law after ALLERGAN’s public release of its corresponding
quarterly earnings statement. In addition, INSPIRE agrees that it will obtain
prior written approval from ALLERGAN before making public any sales data
obtained from ALLERGAN on sales of Restasis™ or the INSPIRE Product, other than
quarterly and annual dry eye sales and forecasts of said sales.

 

5.    Section 10.1 (Payments) shall be amended by replacing “sixty (60)” with
“forty-five (45)” in the last sentence.

 

6.    Amend Section 7.3(d), last line, by correcting the reference to Section
9.6(b)(iii) to Section 9.7(b)(iii).

 

7.    Except as expressly provided in this Amendment, the Agreement shall remain
unmodified and in full force and effect (including, for the avoidance of doubt,
the provisions of Section 9.7(a) regarding the crediting of royalties due
INSPIRE on Net Sales of Restasis™ against the milestone payment due ALLERGAN)
and is hereby ratified and affirmed. The execution, delivery, and effectiveness
of this Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power, or remedy of INSPIRE or ALLERGAN under the
Agreement.

 

Page 4 of 5

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[Note: Certain portions of this document have been marked “[confidential
treatment requested]” or “[c.i.]” to indicate that confidentiality has been
requested for this confidential information. The portions have been omitted and
filed separately with the Securities and Exchange Commission.]

 

IN WITNESS WHEREOF, each of the Parties has caused this Amendment to be executed
by its duly authorized representative as of the day and year first above
written.

 

INSPIRE PHARMACEUTICALS, INC.

  

ALLERGAN, INC.

By:  /s/    Gregory J. Mossinghoff            

By:

   /s/ F. Michael Ball         

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

   

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

Name:     Gregory J. Mossinghoff

Title:        President

       

Name:

Title:

 

F. Michael Ball

Executive Vice President and

President, Pharmaceuticals

    

ALLERGAN SALES, LLC

     

By:

   /s/    F. Michael Ball            

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

         

Name:

Title:

 

F. Michael Ball

President

     ALLERGAN PHARMACEUTICALS
HOLDINGS (IRELAND) LTD.            By:  /s/    Terilea Wielenga               

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

         

Name:

Title:

 

Terilea Wielenga

Director

 

 

Page 5 of 5