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     **1.3**“**CAPTISOL Data Package**” means (a) all toxicology/safety and other relevant scientificsafety data owned, licensed or developed by CyDex and its Affiliates; (b) all toxicology/safety andother relevant scientific data owned, licensed or developed by the licensees or sublicensees ofCyDex or its Affiliates or other third parties (to the extent permitted in the applicable licenseor other agreements between CyDex and/or its Affiliates and such licensees, sublicensees or otherthird parties) on CAPTISOL alone (and not in conjunction with a product formulation); and (c) allCMC and manufacturing process data relating to the preparation of CAPTISOL, in each case to theextent necessary or useful for the formulation of the Product.     **1.4**“**CAPTISOL Improvement**” means any technology or improvement specifically related to thephysical properties of CAPTISOL, whether or not patentable, that is developed by Proteolix or itsAffiliates or Sublicensees, solely or jointly with a third party.     **1.5**“**Claim**” has the meaning specified in **Section 10.1**.     **1.6**“**Clinical Grade CAPTISOL**” means CAPTISOL which (a) has been manufactured under conditionsof current good manufacturing practices for bulk excipients as set forth in U.S. Pharmacopoeia<1078> or any successor thereto, (b) is intended for use in humans, and (iii) is intended forclinical trials for the Product.     **1.7**“**Commercial Grade CAPTISOL**” means CAPTISOL which (a) has been manufactured underconditions of current good manufacturing practices for bulk excipients as set forth in U.S.Pharmacopoeia <1078> or any successor thereto, (b) is intended for use in humans, and (iii)is intended for commercial sale of the Product.     **1.8**“**Commercial Launch Date**” means, in any particular country, the first commercial sale ofthe Product by Proteolix, or an Affiliate or Sublicensee of Proteolix to a third party.     **1.9**“**Compound**” means that certain pharmaceutical compound known as PR-171, owned by orlicensed to Proteolix and developed and manufactured by or on behalf of Proteolix.     **1.10**“**Confidential Information**” has the meaning specified in **Section 8.1**.     **1.11**“**Detailed Forecast**” has the meaning specified in **Section 3.2(b)**.     **1.12**“**Disclosing Party**” has the meaning specified in **Section 8.1**hereof.     **1.13**“**DMF**” means a Drug Master File for CAPTISOL, as currently filed, or as hereafter updatedfrom time to time, by CyDex with the FDA.     **1.14**“**FDA**” means the United States Food and Drug Administration, or any successor thereto.     **1.15**“**Field**” means the treatment of any and all diseases and conditions in humans, except:(a) for the treatment or prophylaxis of fungal infections; or (b) as a topical ocular treatment ofdry eye. **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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     **1.16**“**IND**” means an Investigational New Drug application, as defined in the United StatesFederal Food, Drug and Cosmetics Act and the regulations promulgated thereunder, or similarapplication filed with an equivalent regulatory body in another country.     **1.17**“**Indemnitee**” has the meaning specified in **Section 10.3**.     **1.18**“**Indemnitor**” has the meaning specified in **Section 10.3**.     **1.19**“**Initial Detailed Forecast**” has the meaning specified in **Section 3.2(b)**.     **1.20**“**Licensed Patents**” means all patents and patent applications in the Territory which coverCAPTISOL and which now or at any time during the Term are owned by or licensed to CyDex or anyCyDex Affiliate with the right to sublicense, including any and all extensions, renewals,continuations, substitutions, continuations-in-part, divisions, patents-of-addition, reissues,reexaminations and/or supplementary protection certificates to any such patents. Set forth in***Exhibit A***attached hereto is a list of the Licensed Patents as of the Effective Date. Such Exhibitshall be updated by CyDex from time to time.     **1.21**“**Product**” means the Compound combined with or formulated using CAPTISOL in a parenteraldosage form/formulation.     **1.22**“**Losses**” has the meaning set forth in **Section 10.1**.     **1.23**“**Marketing Approval**” means final approval of an NDA by the FDA, or final approval of acomparable document filed with an equivalent health regulatory authority in any other country or inthe European Union (using the centralized process or mutual recognition), including all requiredmarketing, pricing or reimbursement approvals.     **1.24**“**NDA**” means a New Drug Application, as defined in the United States Federal Food, Drugand Cosmetics Act and the regulations promulgated thereunder; or similar application filed with anequivalent regulatory body in another country.     **1.25**“**Net Sales**” means gross amounts invoiced by Proteolix, its Affiliates and Sublicenseesfor sales of the Product in the Field, less the following: (a) normal and customary trade,quantity and/or cash discounts, allowances and rebates actually allowed or given; (b) returns andcredits actually allowed for rejections, defects or recalls of Product, outdated or returnedProduct, or because of rebates or retroactive price reductions; (c) freight, postage, shippinginsurance and other transportation expenses (if separately identified on the invoice); and (d)sales, value-added, excise or use taxes, tariffs, duties and customs fees and other taxes imposedwith respect to specific sales. “Net Sales” shall not include amounts for any Product furnished toa third party for use in clinical trials and Product distributed as promotional and free goods.Furthermore, “Net Sales” shall not include amounts from sales or other dispositions of Productbetween Proteolix and any of its Affiliates or Sublicensees, unless such Affiliate or Sublicenseeis an end-user of such Product.     **1.26**“**Notice of Termination**” has the meaning specified in **Section 13.2**. **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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     **1.27**“**Phase 1 Trial**” means those clinical trials on sufficient numbers of normal volunteersand patients that are designed to establish that a drug is safe for its intended use, and tosupport its continued testing in Phase 2 Trials.     **1.28**“**Phase 2 Trial**” means those trials in sufficient numbers of patients that are designed toestablish the safety and biological activity of a drug for its intended use, and to definewarnings, precautions and adverse reactions that are associated with a drug in the dosage range tobe prescribed.     **1.29**“**Pfizer**” has the meaning specified in **Section 8.5**.     **1.30**“**Purchase Volume Limitations**” has the meaning specified in **Section 3.2(c)**.     **1.31**“**Receiving Party**” has the meaning specified in **Section 8.1**.     **1.32**“**Ql**” has the meaning specified in **Section 3.2(c)**.     **1.33**“**Research Grade CAPTISOL**” means CAPTISOL which has not been manufactured under requiredconditions of current good manufacturing practices and is not suitable for use in humans, but whichmeets the Specifications for Research Grade CAPTISOL.     **1.34**“**Specifications**” means the specifications for CAPTISOL set forth in ***Exhibit B***hereto, assuch may be amended from time to time pursuant to **Section 3.4**.     **1.35**“**Sublicensees**” has the meaning specified in **Section 2.3**.     **1.36**“**Term**” has the meaning specified in **Section 13.1**.     **1.37**“**Testing Methods**” has the meaning specified in **Section 3.5(a)**.     **1.38**“**Third-Party Manufacturer**” has the meaning specified in **Section 3.6**.     **1.39**“**Territory**” means the entire world.**2.****Grant of Rights.**     **2.1 License Grants from CyDex to Proteolix.**          **(a)**Licensed Patents. Subject to the terms and conditions of this Agreement, CyDexhereby grants to Proteolix an exclusive, nontransferable license during the Term under the LicensedPatents, solely to develop, make, have made, use, market, distribute, sell, offer for sale andimport the Product in the Field in the Territory. Notwithstanding the foregoing, to the extentthat any Licensed Patents are licensed to CyDex or its Affiliates by a third party on anon-exclusive basis, the license granted to Proteolix in the foregoing sentence shall be exclusiveas to CyDex and non-exclusive as to any third party. Proteolix may not sublicense the LicensedPatents, except as expressly set forth in **Section 2.3**below. For purposes of clarification, CyDexgrants no rights to Proteolix to manufacture, import, sell or offer to sell bulk CAPTISOL, exceptas otherwise provided in **Section 3.7(c)**. **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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          **(b)**CAPTISOL Data Package. Subject to the terms and conditions of this Agreement,CyDex hereby grants to Proteolix a non-exclusive, nontransferable license during the Term underCyDex’ right in and to the CAPTISOL Data Package, solely to develop, make, have made, use, market,distribute, sell, offer for sale and import the Product in the Field in the Territory. Proteolixmay not sublicense its rights to the CAPTISOL Data Package, except as expressly set forth in**Section 2.3**below.     **2.2 Grant of License from Proteolix to CyDex.**Proteolix hereby grants to CyDex anon-exclusive, transferable, perpetual, royalty-free license, with the right to grant sublicenses,under Proteolix’, its Affiliates’ and Sublicensees’ rights in and to CAPTISOL Improvements todevelop, make, have made, use, market, distribute, sell, offer for sale and import any CAPTISOLImprovement in the Territory. Proteolix shall provide prompt notice of any such CAPTISOLImprovement, and shall notify and consult with CyDex at least **[ ** ]**days prior to the filing ofany patent application with respect to such CAPTISOL Improvement.     **2.3 Sublicensing.**Proteolix shall have the right to grant sublicenses to its Affiliates andlicensees of the Product (collectively “**Sublicensees**”) under the licenses granted to Proteolixpursuant to **Section 2.1**; *provided*that (a) each such Sublicensee has agreed to be bound by allapplicable terms and obligations of the rights and licenses granted by CyDex to Proteolix underthis Agreement (including, without limitation, Proteolix’ confidentiality obligations), (b) theterms and conditions of each such sublicense is consistent with and no less restrictive than theterms and conditions of this Agreement, and (c) Proteolix provides to CyDex a copy of each suchsublicense agreement with respect to the Product, *provided, however*, Proteolix may redact anyproprietary or financial terms from any such copy. If necessary to engage a third partymanufacturer for the Product, Proteolix shall be permitted under this Agreement to treat any suchthird party manufacturer as a Sublicensee, subject to the terms of this **Section 2.3**. In any event,Proteolix shall procure from any third party manufacturer of the Product, such third party’sagreement that all bulk CAPTISOL supplied pursuant to this Agreement shall be used solely for themanufacture of the Product. Other than as specifically provided in and this **Section 2.3**, Proteolixshall not have the right to grant sublicenses to any third party under the licenses grantedpursuant to **Section 2.1**.     **2.4 Reservation of Rights.**This Agreement confers no right, license or interest byimplication, estoppel, or otherwise under any patents, patent applications, know-how or otherintellectual property rights of either party except as expressly set forth in this **Section 2**andelsewhere in this Agreement. Each party hereby expressly retains and reserves all rights andinterests with respect to patents, patent applications, know-how or other intellectual propertyrights not expressly granted to the other party hereunder.**3.****Manufacture and Supply of CAPTISOL.**     **3.1 Purchase of CAPTISOL.**Proteolix agrees that Proteolix and its Affiliates and Sublicenseesshall purchase CAPTISOL for use in Product exclusively from CyDex and that they shall notmanufacture (or have manufactured on their behalf) CAPTISOL for such use without CyDex’ priorwritten consent. CyDex agrees that CyDex shall produce (or have produced for it) and sell toProteolix one hundred percent (100%) of Proteolix’ and its Affiliates’ **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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and Sublicensees’ requirements for CAPTISOL for use in Product, during the Term and subject tothe provisions of this Agreement. Purchases of CAPTISOL may include Research Grade CAPTISOL,Clinical Grade CAPTISOL and/or Commercial Grade CAPTISOL. Proteolix may place orders for CAPTISOLon behalf of its Affiliates and Sublicensees; *provided, however*, that: (a) Proteolix shallinstruct CyDex as to the location for the shipment thereof; (b) Proteolix shall guarantee paymentto CyDex of all amounts payable with respect thereto; and (c) if Proteolix requests that CyDexdeliver such orders to Proteolix for re-delivery thereof by Proteolix to its Affiliates orSublicensees, Proteolix shall comply with all applicable laws, rules and regulations applicable tothe transportation of CAPTISOL from Proteolix to its Affiliates and Sublicensees.     **3.2 Supply Terms.**          **(a) Long-term Forecast.**No later than **[ ** ]**months prior to the anticipated CommercialLaunch Date by Proteolix or its Affiliates or Sublicensees of a Product in any particular country,Proteolix shall provide CyDex with a forecast setting forth Proteolix’ estimate of the requiredquantities of Commercial Grade CAPTISOL for each of the following **[ ** ]**years. Such long-termforecast shall thereafter be updated by Proteolix at least once every **[ ** ]**months.          **(b) Detailed Forecasts.**               **(i) Commercial Forecasts:**At least **[ ** ]**calendar quarters prior to the calendar quarter inwhich Proteolix anticipates the placement of its first order for Commercial Grade CAPTISOL, andthereafter on a calendar quarterly basis until the First Commercial Sale Date, Proteolix shalldeliver to CyDex a detailed rolling forecast setting forth Proteolix’ anticipated requirements andanticipated delivery schedules for Commercial Grade CAPTISOL for the calendar quarter in which theCommercial Launch Date of a Product is anticipated to occur and, in addition, for each fullcalendar quarter during the **[ ** ]**month period following such anticipated Commercial Launch Date(the “**Initial Detailed Forecast**”). No later than the first day of the first full calendar quarterfollowing the Commercial Launch Date, and no later than the first day of each full calendar quarterthereafter, Proteolix shall deliver to CyDex a detailed rolling forecast setting forth Proteolix’anticipated requirements and anticipated delivery schedules for Commercial Grade CAPTISOL for eachof the **[ ** ]**full calendar quarters during the **[ ** ]**month period following the delivery date ofsuch forecast (each, a “**Detailed Forecast**”). Each Detailed Forecast shall be firm and binding onProteolix with respect to Proteolix’ obligation to purchase quantities of Commercial Grade CAPTISOLfor the **[ ** ]**and **[ ** ]**full calendar quarter in such Detailed Forecast, subject to thepermissible variances set forth in **Section 3.****2(c)** below, and estimates of Proteolix’ requirementsfor the **[ ** ]**and **[ ** ]**full calendar quarters in such Detailed Forecast. If Proteolix fails toprovide any updated Detailed Forecast in accordance with this **Section 3.2(b)**, the Detailed Forecastlast provided by Proteolix shall be deemed to be the updated Detailed Forecast, and the next fullcalendar quarter estimate of Proteolix’ requirements for Commercial Grade CAPTISOL set forth insuch Detailed Forecast shall be a firm and binding obligation with respect to Proteolix’ obligationto purchase Commercial Grade for such next full calendar quarter. **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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               **(ii) Clinical Forecasts:**Beginning **[ ** ]**months after the Effective Date, Proteolix shalldeliver to CyDex at least every **[ ** ]**months, a rolling forecast of their estimated requirementsfor Clinical Grade CAPTISOL for so long as Proteolix requires clinical grade material during theTerm. Upon commencement of the Detailed Forecast as specified in **Section 3.****2(b)** above, theClinical Forecast shall be incorporated, as a separate subsection, into such Detailed Forecast.The frequency of the Clinical Forecast shall then be the same as for the Detailed Forecast. TheClinical Forecast shall be for planning purposes only, and thus shall not be binding in any mannerwhatsoever until a PO has been placed by Proteolix for said Clinical Grade CAPTISOL and accepted byCyDex.          **(c) Detailed Forecast Variances.**Each updated Detailed Forecast may modify the amount ofCommercial Grade CAPTISOL estimated in the previous Detailed Forecast in accordance with thefollowing limitations (the “**Purchase Volume Limitations**”):               **(i) **for the first calendar quarter covered by such updated Detailed Forecast (“**Ql**”), no changemay be made without the prior express written consent of CyDex;               **(ii) **for the second calendar quarter covered by such updated Detailed Forecast, no change inexcess of a **[ ** ]**percent **[ ** ]**volume increase or decrease from the prior Detailed Forecast maybe made without the prior express written consent of CyDex;               **(iii) **for the third calendar quarter covered by such updated Detailed Forecast, no change inexcess of a **[ ** ]**percent **[ ** ]**volume increase or decrease from the prior Forecast may be madewithout the prior express written consent of CyDex; and               **(iv) **for the fourth calendar quarter covered by such updated Detailed Forecast, no change inexcess of a **[ ** ]**percent **[ ** ]**volume increase or decrease from the prior Forecast may be madewithout the prior express written consent of CyDex.In each case CyDex’ consent may be conditioned on such payment or other terms as CyDex may require.          **(d) Purchase Orders.**Together with each Detailed Forecast provided under **Section 3.2(b)**above, Proteolix shall place a firm purchase order with CyDex in a form mutually agreed upon by theparties, for Proteolix’ order of Commercial Grade CAPTISOL for Q1 delivery consistent with theDetailed Forecast. Each purchase order, for all grades of CAPTISOL, shall specify: (i) the gradeof CAPTISOL ordered (*i.e.*, Commercial Grade CAPTISOL, Clinical Grade CAPTISOL or Research GradeCAPTISOL); (ii) quantities; (iii) delivery dates; and (iv) reasonable shipping instructions. CyDexshall use commercially reasonable efforts to comply with Proteolix’ requested delivery dates;*provided, however*, that the purchase order is received by CyDex at least **[ ** ]**days prior to thestipulated delivery date. No purchase order shall be binding upon CyDex until accepted by CyDex inwriting; *provided, however*, that CyDex shall accept such orders for Commercial Grade CAPTISOL fromProteolix to the extent that the quantities of CAPTISOL ordered do not exceed the Purchase VolumeLimitations. CyDex shall not be obligated to accept such orders to the extent that the quantitiesof Commercial Grade CAPTISOL ordered exceed the Purchase Volume Limitations, but CyDex shall usegood faith efforts to fill such orders for such excess quantities from available supplies. **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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If CyDex, despite the use of good faith efforts, is unable to supply such quantities thatexceed the Purchase Volume Limitations to Proteolix, such inability to supply shall not be deemedto be a breach of this Agreement by CyDex or a failure by CyDex to supply for any purpose. Orderedquantities of Commercial Grade CAPTISOL shall be specified in multiples of **[ ** ]**kilograms,subject to a minimum order quantity of **[ ** ]**kilograms. CyDex shall use reasonable efforts tonotify Proteolix within **[ ** ]**business days after its receipt of Proteolix’ purchase order of itsability to fill any amounts of such order that are in excess of the Purchase Volume Limitations.If any purchase order or other document submitted by Proteolix hereunder or any other documentpassing between the parties contains terms or conditions in addition to or inconsistent with theterms of this Agreement, the terms of this Agreement shall control and prevail and such additionalor inconsistent terms are hereby expressly rejected.     **3.3 Delivery.**CyDex shall deliver to Proteolix or Proteolix’ designee each order of CAPTISOL,packed for shipment in accordance with CyDex’ customary practices and the Specifications, CIPProteolix designated location (Incoterms 2000). Title and risk of loss and/or damage to CAPTISOLshall pass to Proteolix upon delivery of CAPTISOL to Proteolix or Proteolix’ designee atProteolix’s designed location. CyDex acknowledges the inherent risk that a batch of CAPTISOL maybe lost in production or shipment, and CyDex agrees to maintain an inventory of CAPTISOL sufficientto supply at least **[ ** ]**days worth of Proteolix’ requirements in the event of production ordelivery delays.     **3.4 Modified Specifications.**CyDex shall have the right to change the Specifications fromtime to time during the Term; *provided*that such change has no adverse effect or consequence onProteolix’ development or commercialization of the Product including, for example, an effect orconsequence that requires Proteolix to conduct any clinical study requested by the FDA or otherregulatory agency. Any change in the Specifications that would have an adverse effect orconsequence on Proteolix’ development or commercialization of the Product will require Proteolix’prior written consent. In the event that CyDex desires to change the Specifications, CyDex shallgive Proteolix at least **[ ** ]**days notice. CyDex shall cooperate with Proteolix to have anychange approved by the FDA and other regulatory agencies having jurisdiction. In the event thatthe FDA or another regulatory agency having jurisdiction requires Proteolix to implement anychanges to the Specifications, CyDex shall use all reasonable efforts to make such changes. CyDexshall promptly advise Proteolix as to any lead-time changes or other terms that may result from achange to the Specifications, including but not limited to price adjustments necessary to enableCyDex to recover costs it actually incurred for materials already purchased by CyDex expressly forProteolix, its Affiliates or Sublicensees and rendered unusable by a change in Specificationsrequested by Proteolix or as necessary to comply with government regulatory requirements withrespect to the Product If a regulatory agency requires a change to the Specifications where suchchange is specific to CAPTISOL and not specific to the Product then CyDex shall be responsible forthe costs incurred to generate such unique, modified Specifications.     **3.5 Quality Control; Acceptance and Rejection.**          **(a) Quality Control.**CyDex shall conduct or have conducted quality control testing ofCAPTISOL prior to shipment in accordance with the Specifications and other CyDex- **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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approved quality control testing procedures (the “**Testing Methods**”). CyDex shall retain orhave retained accurate and complete records pertaining to such testing. Each shipment of CAPTISOLhereunder shall be accompanied by a certificate of analysis for each lot of CAPTISOL therein.          **(b) Acceptance Testing.**Proteolix shall have a period of **[ ** ]**days after the date ofreceipt to test or cause to be tested CAPTISOL supplied under this Agreement. Proteolix or itsdesignee shall have the right to reject any shipment of CAPTISOL that does not conform in allmaterial respects with the Specifications at the time of delivery pursuant to **Section 3.3**hereofwhen tested in accordance with the Testing Methods. All shipments of CAPTISOL shall be deemedaccepted by Proteolix unless CyDex receives written notice of rejection from Proteolix within such**[ ** ]**day period, describing the reasons for the rejection in reasonable detail. Once a deliveryof CAPTISOL is accepted or deemed accepted hereunder, Proteolix shall have no recourse againstCyDex in the event CAPTISOL is subsequently deemed unsuitable for use for any reason, except asprovided in **Sections 7.4**and **10**below.          **(c) Confirmation.**CyDex shall notify Proteolix as soon as reasonably practical (but in anyevent within **[ ** ]**days) after its receipt of a notice of rejection from Proteolix pursuant to**Section 3.5(b)**above, whether CyDex accepts Proteolix’ basis for rejection and Proteolix shallcooperate with CyDex in determining whether such rejection was necessary or justified. If theparties are unable to agree as to whether a shipment of CAPTISOL supplied by CyDex or itsThird-Party Manufacturer hereunder meets the Specifications, such question shall be submitted to anindependent quality control laboratory mutually agreed upon by the parties. The findings of suchindependent laboratory shall be binding upon the parties. The cost of the independent qualitycontrol laboratory shall be borne by the party whose results are shown by such laboratory to havebeen incorrect.          **(d) Return or Destruction of Rejected Shipments.**Proteolix may not return or destroy anybatch of CAPTISOL until it receives written notification from CyDex that CyDex does not disputethat the batch fails to meet the Specifications; *provided*that if Proteolix does not receive suchwritten notice within **[ ** ]**days after its delivery of a notice of rejection to CyDex pursuant to**Section 3.5(b)**above, CyDex shall be deemed to agree that such batch fails to meet theSpecifications. CyDex will indicate in its notice either that Proteolix is authorized to destroythe rejected batch of CAPTISOL or that CyDex requires return of the rejected CAPTISOL. Uponwritten authorization from CyDex to do so, Proteolix shall promptly destroy the rejected batch ofCAPTISOL and provide CyDex with written certification of such destruction. Upon receipt of CyDex’request for return, Proteolix shall promptly return the rejected batch of CAPTISOL to CyDex. Ineach case, CyDex will reimburse Proteolix for the documented, reasonable costs associated with thedestruction or return of the rejected CAPTISOL.          **(e) Refund or Replacement.**Proteolix shall not be required to pay any invoice with respect toany shipment of CAPTISOL properly rejected pursuant to this **Section 3.5**. Notwithstanding theforegoing, Proteolix shall be obligated to pay in full for any rejected shipment of CAPTISOL thatis subsequently determined to meet the Specifications in accordance with **Section 3.5(c)**,irrespective of whether Proteolix has already paid CyDex for a replacement shipment. If Proteolixpays in full for a shipment of CAPTISOL and subsequently **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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properly rejects such shipment in accordance with this **Section 3.5**, Proteolix shall beentitled, upon confirmation that such shipment failed to meet the Specifications in all materialrespects, either: (i) to a refund or credit equal to the purchase price paid with respect to suchrejected shipment; or (ii) to require CyDex to replace such rejected shipment at no additional costto Proteolix. Proteolix acknowledges and agrees that, except for the indemnification obligationsset forth in **Section 10**below, Proteolix’ rights to a refund or credit for or to receivereplacement of properly rejected shipments of CAPTISOL hereunder shall be Proteolix’ sole andexclusive remedy, and CyDex’ sole obligation, with respect to non-conforming CAPTISOL deliveredhereunder.          **(f) Exceptions.**Proteolix’ rights of rejection, return, refund and replacement set forth inthis **Section 3.5**shall not apply to any CAPTISOL that is non-conforming due to damage caused byProteolix, its Affiliates or Sublicensees or their respective employees or agents, including butnot limited to, misuse, neglect, improper storage, transportation or use beyond any datingprovided.     **3.6 Facilities and Inspections.**Without limiting CyDex’ responsibility under this Agreement,CyDex shall have the right at any time to satisfy its supply obligations to Proteolix hereundereither in whole or in part through arrangements with third parties engaged to perform services orsupply facilities or goods in connection with the manufacture or testing of CAPTISOL (each, a“**Third-Party Manufacturer**”). CyDex shall give Proteolix prior written notice of any sucharrangement. CyDex shall permit no more than **[ ** ]**of Proteolix’ authorized representatives,during normal working hours and upon reasonable prior notice to CyDex but in no event less than **[** ]**days prior notice, to inspect that portion of all CyDex facilities utilized for themanufacture, preparation, processing, storage or quality control of CAPTISOL or such facilities ofany Third-Party Manufacturer, no more frequently than **[ ** ]**per calendar year. Notwithstandingthe foregoing, CyDex agrees to reasonably cooperate, and shall require any Third-Party Manufacturerto reasonably cooperate, with all regulatory authorities and shall submit to reasonableCAPTISOL-related inspections by such authorities. With respect to inspection of the facilities ofa Third Party Manufacturer by Proteolix, its Affiliates or Sublicensees, Proteolix shall beresponsible for any reasonable fees charged by CyDex’ Third Party Manufacturer in connection withsuch inspections (as of the Effective Date, **[ ** ]**Dollars **[ ** ]**per person per day). Proteolix’authorized representatives shall be accompanied by CyDex personnel at all times, shall be qualifiedto conduct such manufacturing audits, shall comply with all applicable rules and regulationsrelating to facility security, health and safety, and shall execute a written confidentialityagreement with terms at least as restrictive as those set forth in **Section 8**(Confidentiality)hereof. In no event shall any such manufacturing audit exceed **[ ** ]**days in duration. Proteolixshall ensure that its authorized representatives conduct each manufacturing audit in such a manneras to not interfere with the normal and ordinary operation of CyDex or its Third-PartyManufacturer. Except as expressly set forth in this **Section 3.6**, neither Proteolix nor itsAffiliates, sublicensees or their respective employees or representatives shall have access toCyDex’ facilities or the facilities of any Third-Party Manufacturer. **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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     **3.7 Inability to Supply.**          **(a) Notice.**CyDex shall notify Proteolix if CyDex is unable to supply the quantity of (i)Commercial Grade CAPTISOL ordered by Proteolix in accordance with the Purchase Volume Limitationsset forth in **Section 3.2(c)**or (ii) Research Grade CAPTISOL or Clinical Grade CAPTISOL ordered byProteolix as set forth in **Section 3.2(d)**above: (1) within **[ ** ]**days after CyDex’ receipt of apurchase order from Proteolix as provided in **Section 3.2(d)**; or (2) immediately upon becoming awareof an event of *force majeure*or any other event that would render CyDex unable to supply toProteolix the quantity of CAPTISOL that CyDex is required to supply hereunder.          **(b) Allocation.**If CyDex is unable to supply to Proteolix the quantity of CAPTISOL that CyDexis required to supply hereunder, CyDex (i) shall allocate its available CAPTISOL among Proteolixand any other purchasers of CAPTISOL with which CyDex then has an on-going contractualrelationship, in proportion to the quantity of CAPTISOL for which each of them has orders pendingat such time and (ii) shall take all reasonable steps necessary to minimize supply delays.          **(c) Right to Manufacture.**If CyDex is not able to supply CAPTISOL to Proteolix which meetsSpecifications or in the quantity requirements for CAPTISOL ordered in accordance with this **Section3**, Proteolix shall be entitled to manufacture CAPTISOL but only for Proteolix’ clinical use,marketing, sale and distribution of the Product. Notwithstanding the above, Proteolix may exercisesuch right to manufacture CAPTISOL only if (i) CyDex’ inability to supply CAPTISOL could reasonablybe expected to result in a period of time during which no CAPTISOL would be available to Proteolixfor the clinical use, marketing, sale and distribution of the Product, (ii) there is no reason tobelieve that CyDex would be able to re-start manufacture of CAPTISOL more quickly than Proteolix orProteolix’ designee could start manufacture of CAPTISOL, and (iii) CyDex’ inability to supplyCAPTISOL did not result, wholly or in part, from factors within the control of CyDex.**4.****Compensation.**     **4.1 Payments and Royalties for Licenses.**          **(a) One-Time Fee.**Proteolix shall pay to CyDex a **[ ** ]**one-time fee of **[ ** ]**dollars ($**[ **]**) in partial consideration of the rights granted Proteolix under this Agreement, which amountshall be due and payable in full upon the Effective Date.          **(b) Milestone Payments.**Pursuant to **Section 5.2(a)**, written notice of each of the milestoneevents listed below with respect to the Product shall be provided to CyDex, and within **[ ** ]**daysafter such written notice of each of the milestone events, Proteolix shall pay to CyDex theapplicable non-refundable milestone fee listed next to each such event in further consideration ofthe rights granted Proteolix hereunder. The milestone payments are as follows:   **Milestone** **Milestone Payment****[ ** ]** **[ ** ]** **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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   **Milestone** **Milestone Payment****[ ** ]** **[ ** ]****[ ** ]** **[ ** ]****[ ** ]** **[ ** ]****[ ** ]** **[ ** ]****[ ** ]** **[ ** ]**Upon first achievement of **[ ** ]**in annual NetSales of Product **[ ** ]**Upon first achievement of **[ ** ]**in annual NetSales of Product **[ ** ]**Upon first achievement of **[ ** ]**in annual NetSales of Product **[ ** ]**          **(c) Royalties.**               **(i) **In addition to amounts payable pursuant to **Sections 4.****1(a)** and **4.****1(b)** above, Proteolixshall make royalty payments to CyDex on a calendar quarterly basis, in an amount equal to theappropriate royalty rate, according to the following rate schedule, to the applicable Net Salesduring such quarter arising from the sale of the Product in the Territory. All royalties payableto CyDex pursuant to this **Section 4.****1(c)(i)** shall be due and payable within **[ ** ]**days afterreceipt of the Quarterly Report as set forth in **Section 5.2(a)**.   **Aggregate Net Sales in**  **Each Calendar Year** **Royalty Rate**Up to, and including, **[ ** ]** **[ ** ]****[ ** ]**to **[ ** ]** **[ ** ]****[ ** ]**to **[ ** ]** **[ ** ]**Above **[ ** ]** **[ ** ]**For clarity, the royalty rates set forth above in **Section 4.1(c)**shall be applied to the total NetSales of Product falling within the applicable range of aggregate annual Net Sales during thequarter. For example, if at the end of the first quarter of a particular calendar year, aggregateNet Sales of such Product was **[ ** ]**, then sales representing the first **[ ** ]**in such firstquarter would be subject to the **[ ** ]**royalty rate and the remaining **[ ** ]**would be subject tothe **[ ** ]**royalty rate under **Section 4.1(c)**. In subsequent quarters of the same calendar year,all sales of Product would be subject to the **[ ** ]**royalty rate until total aggregate sales ofProduct in such calendar year reached **[ ** ]**, at which point all further sales of Product up to **[** ]**would be subject to the **[ ** ]**royalty rate. For aggregate sales exceeding **[ ** ]**in the samecalendar year, such sales of Product would be subject to the **[ ** ]**royalty rate. **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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               **(ii) **The obligation of Proteolix to pay royalties to CyDex under this **Section 4.****1(c)** shallcommence on the first Commercial Launch Date of the Product in the Field in the Territory andcontinue, on a country-by-country basis, (1) until the expiration of the last to expire patentwithin the Licensed Patents in such country, and (2) after the period described in (1), a period of**[ ** ]**years with royalties to be calculated on aggregate annual Net Sales at a rate equal to **[ **]**percent **[ ** ]**of the royalty rates set forth in **Section 4.****1(c)(i)** above. Thereafter, Proteolixshall have a paid up, royalty-free license with respect to the Product in the Field.     **4.2 Pricing for CAPTISOL.**          **(a) Pricing.**The purchase prices for CAPTISOL are as specified in ***Exhibit C***attached hereto.CyDex reserves the right to increase the purchase prices set forth on ***Exhibit C***on each January 1during the Term, by written notice to Proteolix, by a percentage equal to the aggregate percentageincrease, if any, in the Producer Price Index PCU325412 (Pharmaceutical preparations) as reportedby the Bureau of Labor Statistics, U.S. Department of Labor, for the twelve (12) month periodending October 31 of the prior year. If Proteolix fails to place a firm purchase order for any Q1for a quantity of Commercial Grade CAPTISOL to be delivered during such Q1 equal to or greater thanthe quantity of Commercial Grade CAPTISOL Proteolix is obligated to purchase pursuant to theapplicable Detailed Forecast, allowing for the variances as defined in **Section 3.2(c)**, CyDex mayadjust the purchase price of Commercial Grade CAPTISOL ordered under this Agreement so as to permitCyDex to recover all reasonable costs and expenses incurred by CyDex in reliance upon Proteolix’binding obligation, including but not limited to the costs of the raw materials and supplies ofCAPTISOL acquired or used in contemplation of fulfilling such order.          **(b) Invoicing; Payment.**CyDex shall invoice Proteolix upon shipment of each order ofCAPTISOL. All invoices shall be sent to the address specified in the applicable purchase order, andeach invoice shall state the purchase price for CAPTISOL in such shipment, plus any insurance,taxes, shipping costs or other costs incidental to such purchase or shipment initially paid byCyDex but to be borne by Proteolix hereunder; *provided, however*, that if such insurance, taxes,shipping costs or other costs incidental to such purchase or shipment initially paid by CyDex butto be borne by Proteolix are not known at the time CyDex invoices Proteolix for the purchase pricefor the CAPTISOL ordered by Proteolix, CyDex may invoice such costs at a later date. Payment ofsuch invoices shall be made within **[ ** ]**days after the date of delivery of such invoice pursuantto **Section 14.7**.     **4.3 Currency.**All amounts due hereunder are stated in, and shall be paid in, U.S. dollars.Net Sales based on foreign revenue will be converted to U.S. dollars at the rate of exchangepublished in *The Wall Street Journal*, Eastern U.S. Edition on the last day of each calendarquarter. Proteolix shall provide CyDex, together with each royalty payment owed pursuant to**Section 4.****1(c)** above, a schedule detailing the calculation of Net Sales resulting from theconversion of foreign revenue to U.S. dollars as set forth herein.     **4.4 Taxes.**All amounts due hereunder exclude all applicable sales, use, and other taxes, andProteolix will be responsible for payment of all such taxes (other than taxes based on CyDex’income), fees, duties, and charges, and any related penalties and interest, arising from **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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the payment of amounts due hereunder or the sublicense or license, as the case may be, underthe Licensed Patents hereunder. Proteolix shall make all payments to CyDex hereunder free andclear of, and without reduction for, any withholding taxes; any such taxes imposed on payments ofamounts to CyDex hereunder will be Proteolix’ sole responsibility, and Proteolix will provide CyDexwith official receipts issued by the appropriate taxing authority, or such other evidence as theCyDex may reasonably request, to establish that such taxes have been paid. Proteolix shallindemnify and hold CyDex harmless from any and all such taxes and any actions brought against CyDexby any taxing authority with respect to such taxes.     **4.5 Late Payments.**Unpaid balances shall accrue interest, from due date until paid, at a rateequal to the lesser of (a) the prime rate, as reported in *The Wall Street Journal*, Eastern U.S.Edition, on the date such payment is due, plus an additional **[ ** ]**percent **[ ** ]**or (b) themaximum rate permitted under applicable law. If any amount due hereunder and not subject to areasonable, good-faith dispute by Proteolix remains outstanding for more than **[ ** ]**days after itsdue date, CyDex may, in addition to any other rights or remedies it may have, refuse to shipCAPTISOL hereunder except upon payment by Proteolix in advance.**5.****Records; Reports; Audit.**     **5.1 Records.**During the Term and for a period of **[ ** ]**years thereafter, Proteolix shall,and shall require its Affiliates and Sublicensees to, maintain complete and accurate recordsrelating to (a) subject enrollment in clinical studies for the Product; (b) the achievement of eachof the milestone events set forth in **Section 4.****1(b)** above; and (c) Net Sales of Product.     **5.2 Reports.**          **(a) Quarterly Reports.**Within **[ ** ]**calendar days following the conclusion of each calendarquarter during the Term, Proteolix shall provide CyDex with a written report with respect to suchcalendar quarter that (i) indicates subject enrollment numbers during such calendar quarter withrespect to clinical studies conducted by Proteolix, its Affiliates or Sublicensees for the Product;(ii) sets forth the achievement of each of the milestone events set forth in **Section 4.1(b)**aboveduring such calendar quarter whether achieved by Proteolix, its Affiliates and Sublicensees, and(iii) sets forth in reasonable detail complete and accurate records of Proteolix’, its Affiliates’and Sublicensees’ Net Sales of the Product in the Territory during such calendar quarter.          **(b) Annual Reports.**Annually, by December 1st of each calendar year during theTerm, Proteolix shall provide CyDex with a written report that: (i) sets forth the achievement ofeach of the milestone events set forth in **Section 4.1(b)**above during such calendar year whetherachieved by Proteolix, its Affiliates or Sublicensees; (ii) sets forth Proteolix’ anticipatedrequirements of CAPITSOL for preclinical and clinical use during the next calendar year; (iii) setsforth in reasonable detail complete and accurate records of Proteolix’, its Affiliates’ andSublicensees’ Net Sales of the Product in the Territory during such calendar year.     **5.3 Audit.**During the Term and for a period of **[ ** ]**years thereafter, CyDex shall have theright, during normal business hours and upon reasonable notice but no more often than **[ ** ]**peryear, to inspect and audit Proteolix’, its Affiliates’ and Sublicensees’ records relevant to **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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Net Sales. The costs of such audits shall be borne solely by CyDex; *provided, however*, thatin the event such an audit reveals an underpayment by Proteolix of royalties owed hereunder of morethan **[ ** ]**percent **[ ** ]**, Proteolix shall immediately (i) pay CyDex all amounts by whichProteolix has underpaid CyDex as revealed by the audit, plus interest accrued thereon (from theapplicable original due date) at the rate set forth in **Section 4.5**above and (ii) reimburse CyDexfor the costs of such audit. In the event such an audit reveals an overpayment by Proteolix ofroyalties owed hereunder, CyDex shall immediately credit all amounts by which Proteolix hasoverpaid CyDex as revealed by the audit against any amounts owed by Proteolix to CyDex in the nextpayment period. All information concerning royalty payments and reports, and any informationlearned in the course of any audit or inspection under this **Section 5.3**, shall be deemed to beConfidential Information of Proteolix, subject to the terms and provisions of **Section 8**(Confidentiality) below, except to the extent necessary for CyDex to enforce its rights under thisAgreement.**6.****Development and Commercialization by Proteolix.**     **6.1 Diligence.**Proteolix agrees that, during the Term, it will use, and shall require itsAffiliates and Sublicensees to use, commercially reasonable efforts to conduct clinical developmentof the Product, to obtain Marketing Approval in the United States, Japan and the European Union,and to market, promote, and sell the Product thereafter in each country in which Marketing Approvalis obtained, in an effort to maximize Net Sales and, thus, royalties payable under this Agreement.     **6.2 Costs and Expenses.**Proteolix shall be solely responsible for all costs and expensesrelated to its development and commercialization of the Product, including without limitation costsand expenses associated with all preclinical activities and clinical trials, and all regulatoryfilings and proceedings relating to the Product.     **6.3 Preclinical In Vivo Studies.**If Proteolix wishes to conduct any preclinical in vivo studyutilizing CAPTISOL (administered alone or in conjunction with the Compound) at doses greater thanthose set forth in ***Exhibit D***, Proteolix shall notify CyDex of any such study and of the protocoltherefor in writing at least **[ ** ]**days prior to commencing such study. If CyDex determines inits reasonable good faith determination that such study would materially adversely affect a productutilizing CAPTISOL, CyDex shall notify Proteolix within **[ ** ]**days after receipt of such noticeand protocol from Proteolix, and the parties shall discuss and attempt to resolve the matter ingood faith. If the parties cannot resolve such matter within **[ ** ]**days after CyDex notifiesProteolix of such determination, then the dispute shall be presented to the chief executive officerof each party, or his or her respective designee, for resolution. If the parties’ chief executiveofficers, or their respective designees, cannot resolve the dispute within **[ ** ]**days after beingrequested by a party to resolve such dispute, either party may initiate a short-form arbitrationproceeding pursuant to **Section 14.****4(b)** (Short-Form Arbitration) below. If CyDex determines in itsreasonable good faith determination that such study would not materially adversely affect a productutilizing CAPTISOL, CyDex shall notify Proteolix within **[ ** ]**days following receipt of Proteolix’notice. Proteolix agrees to (a) immediately inform CyDex if any adverse effects are observed andascribed to CAPTISOL in any study conducted **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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under this **Section 6.3**, and (b) provide CyDex with copies of the final and full reports of allstudies conducted under this **Section 6.3**, promptly upon completion thereof.     **6.4 Right of Reference.**Proteolix shall have the right to reference the DMF solely inconnection with Proteolix’ regulatory filings submitted in connection with obtaining MarketingApproval for the Product.     **6.5 Access to Proteolix’ Data.**CyDex shall have the right to reference and utilize alltoxicology/safety and other relevant scientific data developed on CAPTISOL alone (and not inconjunction with a product formulation) by Proteolix, its Sublicensees or Affiliates in connectionwith CyDex’ development and commercialization of CAPTISOL, at no cost to CyDex. Upon request byCyDex, Proteolix shall either provide CyDex with a copy of all such data or shall make such dataaccessible to CyDex at such times and locations mutually agreed upon by the parties.**7.****Regulatory Matters.**     **7.1 CAPTISOL Information Submitted for Regulatory Review.**Except as otherwise set forthherein, Proteolix shall be solely responsible for all communications with regulatory agencies inconnection with the Product. Notwithstanding the foregoing, Proteolix shall provide CyDex withcopies of the portions of all regulatory submissions containing CAPTISOL data alone (and not inconjunction with any product formulation) **[ ** ]**days prior to submission and shall allow CyDex toreview and comment upon said submissions. If CyDex determines in its reasonable good faithdetermination that any such submission would materially adversely affect a product utilizingCAPTISOL, CyDex shall notify Proteolix within **[ ** ]**days after receipt of such submission, and theparties shall discuss and attempt to resolve the matter in good faith. If the parties cannotresolve such matter within **[ ** ]**days after CyDex notifies Proteolix of such a determination, thenthe dispute shall be presented to the chief executive officer of each party, or his or herrespective designee, for resolution. If the parties’ chief executive officers, or their respectivedesignees, cannot resolve the dispute within **[ ** ]**days after being requested by a party toresolve such dispute, either party may initiate a short-form arbitration proceeding pursuant to**Section 14.****4(b)** below. Proteolix shall inform CyDex of meetings with the FDA (or other regulatoryagencies in the Territory) regarding the Product **[ ** ]**days prior to such event and shall allowCyDex to participate in any FDA (or other regulatory agency) review that might reasonably includeinquiries regarding CAPTISOL. If Proteolix submits written responses to the FDA that include dataon CAPTISOL alone, CyDex shall be permitted to review such written materials prior to submission.If CyDex reasonably objects to the contents of such written responses relating to CAPTISOL, theparties agree to cooperate in working toward a reasonable and mutually agreeable response.     **7.2 Material Safety.**CyDex shall provide Proteolix, in writing, from time to time, with (a)relevant information currently known to it regarding handling precautions, toxicity and hazardswith respect to CAPTISOL, and (b) the then-current material safety data sheet for CAPTISOL.Notwithstanding the foregoing or anything in this Agreement to the contrary, Proteolix is solelyresponsible for (i) use of all documentation provided by CyDex, including without limitation, usein any regulatory submission to the FDA or any other regulatory agency **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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in the Territory, (ii) document control and retention, and (iii) determining the suitabilityof any documentation provided by CyDex hereunder for use in any regulatory submission.     **7.3 Adverse Event Reporting.**          **(a)**Proteolix shall adhere, and shall require that its Affiliates, Sublicensees, co-marketersand distributors adhere, to all requirements of applicable law and regulations that relate to thereporting and investigation of any adverse event, including without limitation an unfavorable andunintended confirmed diagnosis, symptom, sign, syndrome or disease, whether or not consideredCAPTISOL or Product-related, which occurs or worsens following administration of CAPTISOL orProduct. Proteolix shall provide CyDex with copies of all reports of any such adverse eventdirectly involving CAPTISOL that results in death, is life-threatening, requires or prolongsinpatient hospitalization, results in disability, congenital anomaly or is medically important(*i.e.*, may require other medical or surgical intervention to prevent other serious criteria fromoccurring) which Proteolix has reason to believe are associated with CAPTISOL within **[ ** ]**business days following Proteolix’ (a) submission of any such report to any regulatory agency, or(b) receipt from its Sublicensee, co-marketer or distributor of any such report to any regulatoryagency, as the case may be. Proteolix shall also advise CyDex regarding any proposed labeling orregistration dossier changes affecting CAPTISOL. Reports from Proteolix shall be delivered to theattention of Vice President, Chief Scientific Officer, CyDex, with a copy to CEO, CyDex, at theaddress set forth in **Section 14.7**(Notices). The parties shall mutually cooperate with regard toinvestigation of any such serious adverse event which is believed to be directly associated withCAPTISOL, whether experienced by Proteolix, CyDex or any other Affiliate, Sublicensee, co-marketeror distributor of CyDex or Proteolix.          **(b)**CyDex shall adhere, and shall require that its Affiliates, Sublicensees, co-marketers anddistributors adhere, to all requirements of applicable law and regulations that relate to thereporting and investigation of any adverse event, including without limitation an unfavorable andunintended confirmed diagnosis, symptom, sign, syndrome or disease, whether or not consideredCAPTISOL-related, which occurs or worsens following administration of CAPTISOL alone or uponadministration of a CAPTISOL-enabled formulated product. CyDex shall provide Proteolix with copiesof all reports, some content of which may be redacted solely to protect the confidentialinformation of third parties, of any such adverse event directly involving CAPTISOL that results indeath, is life-threatening, requires or prolongs inpatient hospitalization, results in disability,congenital anomaly or is medically important (*i.e.*, may require other medical or surgicalintervention to prevent other serious criteria from occurring) which CyDex has reason to believeare associated with CAPTISOL within **[ ** ]**business days following CyDex’ (a) submission of anysuch report to any regulatory agency, or (b) receipt from its Sublicensee, co-marketer ordistributor of any such report to any regulatory agency, as the case may be. Reports from CyDexshall be delivered to the attention of Vice President of Development, Proteolix, with a copy toChief Scientific Officer, Proteolix, at the address set forth in **Section 14.7**(Notices). Theparties shall mutually cooperate with regard to investigation of any such serious adverse eventwhich is believed to be directly associated with CAPTISOL, whether experienced by Proteolix, CyDexor any other Affiliate, Sublicensee, co-marketer or distributor of CyDex or Proteolix. Suchwritten notification to Proteolix as well as assistance **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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with any resulting investigation shall be provided in a manner such that no third partyconfidential information is compromised in doing so by either Proteolix or CyDex.     **7.4 Product Recalls.**If any CAPTISOL should be alleged or proven not to meet theSpecifications, Proteolix shall notify CyDex immediately, and both parties shall cooperate fullyregarding the investigation and disposition of any such matter. If Proteolix should deem itappropriate to recall any Product and such recall is due to the failure of CAPTISOL to conform tothe relevant Specifications at the time of delivery by CyDex, then CyDex agrees, uponsubstantiation thereof, to bear all reasonable direct costs associated with said recall, includingrefund of the purchase price for such CAPTISOL and the actual cost of conducting the recall inaccordance with the recall guidelines of the applicable governmental authority. Proteolix shall inall events be responsible for conducting any such recalls with respect to the Product and shallmaintain records of all sales of Product and customers sufficient to adequately administer any suchrecall, for a period of **[ ** ]**years after expiration or termination of this Agreement.**8.****Confidentiality.**     **8.1 Definition.**Proteolix and CyDex each recognizes that during the Term, it may be necessaryfor a party (the “**Disclosing Party**”) to provide Confidential Information to the other party (the“**Receiving Party**”) that is highly valuable, the disclosure of which would be highly prejudicial tothe Disclosing Party. The disclosure and use of Confidential Information will be governed by theprovisions of this **Section 8**. Neither Proteolix nor CyDex shall use the other’s ConfidentialInformation except as expressly permitted in this Agreement. For purposes of this Agreement,“**Confidential Information**” means all information disclosed by the Disclosing Party to the ReceivingParty and designated in writing by the Disclosing Party as “Confidential” (or equivalent), and allmaterial disclosed orally which is declared to be confidential by the Disclosing Party at the timeof such disclosure and confirmed in a writing marked as “Confidential” (or equivalent) anddelivered to the Receiving Party within thirty (30) days after such disclosure, including but notlimited to product specifications, data, know-how, formulations, product concepts, samplematerials, business and technical information, financial data, batch records, trade secrets,processes, techniques, algorithms, programs, designs, drawings, and any other information relatedto a party’s present or future products, sales, suppliers, customers, employees, investors orbusiness. Without limiting the generality of the foregoing, CyDex’ Confidential Informationincludes all materials provided as part of the CAPTISOL Data Package.     **8.2 Obligation.**The Receiving Party agrees that it will disclose the Disclosing Party’sConfidential Information to its own officers, employees, consultants and agents only if and to theextent necessary to carry out its responsibilities under this Agreement or in accordance with theexercise of its rights under this Agreement, and such disclosure shall be limited to the maximumextent possible consistent with such responsibilities and rights. The Receiving Party shall notdisclose Confidential Information of the Disclosing Party to any third party without suchDisclosing Party’s prior written consent, and any such disclosure to a third party shall bepursuant to the terms of a non-disclosure agreement no less restrictive than this **Section 8**. TheReceiving Party shall take such action to preserve the confidentiality of the Disclosing Party’sConfidential Information as it would customarily take to preserve the confidentiality of its own **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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Confidential Information (but in no event less than a reasonable standard of care). TheReceiving Party, upon the Disclosing Party’s request, will return all of the Disclosing Party’sConfidential Information, including all copies and extracts of documents, within sixty (60) days ofthe request, and in any event, promptly following the expiration or termination of this Agreement;*provided, however*; that each party may retain one archival copy of such Confidential Informationsolely to be able to monitor its obligations that survive under this Agreement.     **8.3 Exceptions.**The use and non-disclosure obligations set forth in this **Section 8**shall notapply to any Confidential Information, or portion thereof, that the Receiving Party candemonstrate:               **(i)**at the time of disclosure is in the public domain;               **(ii)**after disclosure, becomes part of the public domain, by publication or otherwise, throughno fault of the Receiving Party;               **(iii)**is in the Receiving Party’s possession prior to receipt from the Disclosing Party aslong as obtained lawfully;               **(iv)**is made available to the Receiving Party by an independent third party, *provided,however*, that to the Receiving Party’s knowledge, such information was not obtained by said thirdparty, directly or indirectly, from the Disclosing Party hereunder; or               **(v)**is developed by Receiving Party without use of, application of or access to the DisclosingParty’s Confidential Information as evidenced by the Receiving Party’s records.     In addition, the Receiving Party may disclose information that is required to be disclosed bylaw, by a valid order of a court or by order or regulation of a governmental agency including butnot limited to, regulations of the United States Securities and Exchange Commission, or in thecourse of litigation, *provided*that in all cases the Receiving Party shall give the other partyprompt notice of the pending disclosure and makes a reasonable effort to obtain, or to assist theDisclosing Party in obtaining, a protective order preventing or limiting the disclosure and/orrequiring that the Confidential Information so disclosed be used only for the purposes for whichthe law or regulation required, or for which the order was issued.     **8.4 Injunction.**Each party agrees that should it breach or threaten to breach any provisionsof this **Section 8**, the Disclosing Party may suffer irreparable damages and its remedy at law may beinadequate. Upon any breach or threatened breach by the Receiving Party of this **Section 8**, theDisclosing Party shall be entitled to seek injunctive relief in addition to any other remedy whichit may have, without need to post any bond or security.     **8.5 Third Party Information.**Proteolix acknowledges that CyDex’ Confidential Informationincludes information developed by Pfizer, Inc. (“**Pfizer**”) that is confidential to both CyDex andPfizer. In so far as Confidential Information of Pfizer is disclosed, Pfizer is a third- **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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party beneficiary of this **Section 8**of this Agreement and may enforce it or seek remediespursuant to it in accordance with its terms.**9.****Representations and Warranties.**     **9.1 Mutual Representations and Warranties.**Each party represents and warrants to the otherthat:          **(a)**it is a corporation duly organized and validly existing under the laws of the state orcountry of its incorporation;          **(b)**it has the complete and unrestricted power and right to enter into this Agreement and toperform its obligations hereunder;          **(c)**this Agreement has been duly authorized, executed and delivered by such party andconstitutes a legal, valid and binding obligation of such party enforceable against such party inaccordance with its terms except as enforceability may be limited by applicable bankruptcy,insolvency, reorganization, receivership, moratorium, fraudulent transfer, or other similar lawsaffecting the rights and remedies of creditors generally and by general principles of equity;          **(d)**the execution, delivery and performance of this Agreement by such party do not conflictwith any agreement, instrument or understanding, oral or written, to which such party is a party orby which such party may be bound, nor violate any law or regulation of any court, governmental bodyor administrative or other agency having authority over such party;          **(e)**all consents, approvals and authorizations from all governmental authorities or otherthird parties required to be obtained by such party in connection with the execution and deliveryof this Agreement have been obtained;          **(f)**no person or entity has or will have, as a result of the transactions contemplated by thisAgreement, any right, interest or valid claim against or upon such party for any commission, fee orother compensation as a finder or broker because of any act by such party or its agents, or, withrespect to Proteolix, because of any act by its Affiliates or Sublicensees; and          **(g)**it has not entered into any agreement with any third party that is in conflict with therights granted to the other party pursuant to this Agreement.     **9.2 CyDex Representations, Warranties and Covenants.**CyDex represents and warrants toProteolix that:          **(a)**CyDex owns all title in and to the CAPTISOL to be provided to Proteolix under the termsand conditions of this Agreement, and has the right to sell CAPTISOL to Proteolix pursuant to theterms and conditions of this Agreement; **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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          **(b)**As of the Effective Date, there are no actions, suits, investigations, claims orproceedings pending or threatened relating to the Licensed Patents, and that CyDex will notifyProteolix in writing within **[ ** ]**days if any such actions, suits, investigations, claims orproceedings are initiated that could have material negative impact on Proteolix’ development of theProduct;          **(c)**All CAPTISOL supplied to Proteolix under the terms and conditions of this Agreement (asapplicable for Research Grade CAPTISOL, Clinical Grade CAPTISOL or Commercial Grade CAPTISOL, asthe case may be) shall be manufactured in accordance with all laws, rules and regulations relatingto such manufacture, current and future; and          **(d)**CyDex **[ ** ]**.     **9.3 Disclaimer.**The warranties set forth in this **Section 9**above are provided in lieu of,and each party hereby disclaims, all other warranties, express and implied, relating to the subjectmatter of this Agreement, CAPTISOL or the licensed patents, including but not limited to theimplied warranties of merchantability and fitness for a particular purpose, title andnon-infringement of third party rights. CyDex warranties under this Agreement are solely for thebenefit of Proteolix and may be asserted only by Proteolix and not by any affiliate, sublicensee orany customer of Proteolix, its affiliates or sublicensees. Proteolix, its affiliates andsublicensees shall be solely responsible for all representations and warranties that Proteolix, itsaffiliates or sublicensees make to any customer of Proteolix, its affiliates or sublicensees.**10.****Indemnification.**     **10.1****By CyDex.**CyDex shall defend, indemnify and hold Proteolix and its Affiliatesand Sublicensees, and each of their respective directors, officers and employees, harmless from andagainst any and all losses, damages, liabilities, costs and expenses (including the reasonablecosts and expenses of attorneys and other professionals) (collectively “**Losses**”) incurred byProteolix as a result of any claim, demand, action or other proceeding (each, a “**Claim**”) by a thirdparty, to the extent such Losses arise out of: (a) any claim by such third party that the practiceof the compositions or methods claimed in the Licensed Patents or the sale of CAPTISOL as includedas an excipient within the Product infringe upon such third party’s patent rights; (b) injury orother harm arising from the use of CAPTISOL alone, or (c) CyDex’ breach of any of itsrepresentations, warranties and covenants set forth in **Section 9**above; *provided, however*, that theforegoing obligation to indemnify shall not apply to the extent that Proteolix is obligated under**Section 10.2**below to indemnify CyDex with respect to a Claim, and CyDex shall be relieved of itsobligations under clause (a) of this **Section 10.1**for any infringement claim that arises out of:(i) the unauthorized use of the Licensed Patents by Proteolix; or (ii) the manufacture, handling,marketing, sale, distribution or use of Product by Proteolix. If an **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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injunction is issued preventing the practice of the Licensed Patents, CyDex may, at itsoption, terminate this Agreement immediately upon written notice to Proteolix; *provided*that suchtermination shall have no effect on CyDex’ indemnification obligations pursuant to this **Section10.1**incurred prior to the effective date of such termination. This **Section 10**states CyDex’sole obligation and entire liability, and Proteolix’, its affiliates’ and sublicensees’ sole andexclusive remedy, for any claim of infringement of intellectual property rights relayed to theLicensed Patents or Product.     **10.2 By Proteolix.**Proteolix shall defend, indemnify and hold CyDex and its Affiliates, andeach of their respective directors, officers and employees, harmless from and against any and allLosses incurred by CyDex as a result of any Claim by a third party, to the extent such Losses ariseout of: (a) the use or sale of the Product by Proteolix, its Affiliates, Sublicensees,distributors, agents, or other parties (except to the extent such Losses arise from the use ofCAPTISOL); (b) the manufacture, use, handling, promotion, marketing, distribution, sale or use ofProduct (except to the extent such Losses arise from the use of CAPTISOL); (c) interactions andcommunications with governmental authorities, physicians or other third parties; or (d) Proteolix’breach of any of its representations and warranties set forth in **Section 9.1**; *provided, however*,the foregoing obligation to indemnify shall not apply to the extent that CyDex is obligated under**Section 10.1**above to indemnify Proteolix with respect to a Claim.     **10.3 Procedure.**The party intending to claim indemnification under this **Section 10**(an“**Indemnitee**”) shall promptly notify the other party (the “**Indemnitor**”) of any Claim in respect ofwhich the Indemnitee intends to claim such indemnification, and the Indemnitor shall assume thedefense thereof whether or not such Claim is rightfully brought; *provided, however*, that anIndemnitee shall have the right to retain its own counsel, with the fees and expenses to be paid bythe Indemnitee, unless Indemnitor does not assume the defense, in which case the reasonable feesand expenses of counsel retained by the Indemnitee shall be paid by the Indemnitor. TheIndemnitee, and its employees and agents, shall cooperate fully with the Indemnitor and its legalrepresentatives in the investigations of any Claim.**11.****Limitation of Liability.**     Except for damages for which CyDex is responsible pursuant to its indemnificationobligations set forth in **Section 10**above, CyDex specifically disclaims all liability for and shallin no event be liable for any incidental, special, indirect or consequential damages, expenses,lost profits, lost savings, interruptions of business or other damages of any kind or characterwhatsoever arising out of or related to this Agreement or resulting from the manufacture, handling,marketing, sale, distribution or use of the product or use of the licensed patents and CAPTISOLdata package, regardless of the form of action, whether in contract, tort, strict liability orotherwise, even if CyDex was advised of the possibility of such damages. Proteolix shall have noremedy, and CyDex shall have no liability, other than as expressly set forth in this Agreement.Except with respect to the indemnification specifically provided in **Section 10**above, in no eventshall CyDex’ s total aggregate liability for all claims arising out of this Agreement exceed **[ ** ]**the amounts paid by  **[ ** ]** = Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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Proteolix to CyDex pursuant to **Section 4**(Compensation) of this Agreementduring  the **[ ** ]**month period immediately preceding the event giving rise to liability. Noaction, regardless of form, arising out of or relayed to this Agreement may be brought by **[ ** ]**after such party has knowledge of the occurrence that gave rise to the cause of such action.**12.****Management of Licensed Patents.**     **12.1 Prosecution and Maintenance.**CyDex shall maintain, at its sole cost and expense andusing reasonable discretion, the Licensed Patents set forth on ***Exhibit A***. CyDex shall have theright to control the prosecution and maintenance of patent applications and the selection ofcountries where patent applications are filed related to the Licensed Patents.     **12.2 Infringement by Third Parties.**If Proteolix becomes aware that a third party may beinfringing a Licensed Patent, it will promptly notify CyDex in writing, providing all informationavailable to Proteolix regarding the potential infringement. CyDex shall take whatever, if any,action it deems appropriate, in its sole discretion, against the alleged infringer. If CyDexelects to take action, Proteolix shall, at CyDex’ request and expense, cooperate and shall causeits employees to cooperate with CyDex in taking any such action, including but not limited to,cooperating with the prosecution of any infringement suit by CyDex.**13.****Term and Termination.**     **13.1 Term.**The term of this Agreement (the “**Term**”) shall commence on the Effective Date andshall continue in effect thereafter until the expiration of Proteolix’ obligation to pay royaltiesunder **Section 4.1(c)**, unless terminated earlier as set forth herein.     **13.2 Termination for Cause.**If either party should violate or fail to perform any materialterm or material covenant of this Agreement, then the non-breaching party may give written noticeof such default to the breaching party. If the breaching party should fail to cure such defaultwithin thirty (30) days after the date of such notice, the non-breaching party shall have the rightto terminate this Agreement by a second written notice (a “**Notice of Termination**”) to the breachingparty, such termination to be effective as of the date of such notice. Notwithstanding the above,failure to pay milestones or royalties as described in **Section 4**above will result in terminationof this Agreement immediately upon delivery of a Notice of Termination by CyDex to Proteolix. Inaddition, either party may terminate this Agreement immediately upon written notice to the otherparty in the event such other party makes an assignment for the benefit of creditors or has apetition in bankruptcy filed for or against it that is **[ ** ]**.     **13.3 Termination by Proteolix.**Proteolix shall have the right at any time to terminate thisAgreement in whole by giving CyDex at least **[ ** ]**days prior written notice.     **13.4 Effect of Expiration or Termination.**Following the expiration or termination of thisAgreement, except as otherwise provided in **Section 4.****1(c)(ii)**, all rights granted to Proteolixherein shall immediately terminate and, in the event of termination of this Agreement by Proteolixpursuant to **Section 13.2**, all rights granted to CyDex herein shall immediately **[ ** ]** = Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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terminate, and eachparty shall promptly return all relevant records and materials in its possession or control containing the other party’s Confidential Information with respect towhich the former party does not retain rights hereunder; *provided, however*that each party mayretain one archival copy of such records and materials solely to be able to monitor its obligationsthat survive under this Agreement.     **13.5 Survival.**Notwithstanding any other provisions of this Agreement, any liability orobligation of either party to the other for acts or omissions prior to the termination orexpiration of this Agreement shall survive the termination or expiration of this Agreement. Suchtermination or expiration shall not relieve either party from obligations that are expresslyindicated to survive termination or expiration of this Agreement, nor shall any termination orexpiration of this Agreement relieve Proteolix of its obligation to pay CyDex (a) royalties for allProduct sold by Proteolix, its Affiliates or Sublicensees prior to the effective date of suchexpiration or termination, or (b) sums due in respect of CAPTISOL shipped prior to termination orexpiration of this Agreement. **Sections 1**(Definitions); **2.1**(License Grants from CyDex toProteolix); **2.2**(Grant of License from Proteolix to CyDex); **5**(Records; Reports; Audits); **7.4**(Product Recalls); **8**(Confidentiality); **9.4**(Disclaimer); **10**(Indemnification); **11**(Limitation ofLiability); **13.4**(Effect of Termination); **13.5**(Survival); and **14**(General Provisions) shallsurvive termination or expiration of this Agreement; *provided, however*, that **Section 2.2**(Grant ofLicense from Proteolix to CyDex) shall not survive termination of this Agreement by Proteolixpursuant to **Section 13.2**and **Section 2.1**(License Grants from CyDex to Proteolix) shall not survivetermination of this Agreement by CyDex pursuant to **Section 13.2**or by Proteolix pursuant to **Section13.3**. Proteolix’s exercise of the license under **Section 2.1**(if it survives termination) issubject to compliance with Proteolix’s continued compliance with **Section 4**(Compensation).**14.****General Provisions.**     **14.1 Non-Solicitation.**During the Term and for a period of **[ ** ]**year thereafter, neitherparty shall solicit, induce, encourage or attempt to induce or encourage any employee of the otherparty to terminate his or her employment with such other party or to breach any other obligation tosuch other party. This section is not meant to encompass general solicitations such as may befound in newspaper advertisements and the like.     **14.2 Relationship of Parties.**Each of the parties hereto is an independent contractor andnothing in this Agreement is intended or shall be deemed to constitute a partnership, agency,employer-employee or joint venture relationship between the parties. No party shall incur anydebts or make any commitments for the other.     **14.3 Compliance with Law.**          **(a)**Proteolix agrees that use of the Licensed Patents by Proteolix, its Affiliates andSublicensees, and the manufacture, handling, marketing, sale, distribution and use of Product willcomply with all applicable international, federal, state and local laws, rules and regulations,including, but not limited to, import/export restrictions, laws, rules and regulations governinguse and patent, copyright and trade secret protection. **[ ** ]**= Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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          **(b)**CyDex agrees the manufacture and supply of CAPTISOL to Proteolix (as applicable forResearch Grade CAPTISOL, Clinical Grade CAPTISOL or Commercial Grade CAPTISOL, as the case may be)will comply with all applicable international, federal, state and local laws, rules andregulations, including, but not limited to, import/export restrictions, laws, rules and regulationsgoverning use and patent, copyright and trade secret protection.     **14.4 Arbitration.**          **(a) Procedure.**Except as otherwise expressly set forth in **Section 14.4(b)**below, any and alldisputes or controversies arising out of or relating to this Agreement shall be settled and decidedby binding arbitration. The arbitration shall be conducted in New York, New York by an arbitratorreasonably knowledgeable about the pharmaceutical industry and acceptable to CyDex and Proteolix.If CyDex and Proteolix cannot agree on a single arbitrator within ten (10) days after a demand forarbitration has been made, CyDex shall appoint an arbitrator, Proteolix shall appoint anarbitrator, the two (2) arbitrators shall appoint a third arbitrator, and the three (3) arbitratorsshall hear and decide the issue in controversy. If either party fails to appoint an arbitratorwithin twenty (20) days after service of the demand for arbitration, then the arbitrator appointedby the other party shall arbitrate any controversy in accordance with this **Section 14.4(a)**. Exceptas to the selection of arbitrators, the arbitration proceedings shall be conducted promptly and inaccordance with the rules of the American Arbitration Association then in effect. The expenses ofany arbitration, including the reasonable attorney fees of the prevailing party, shall be borne bythe party deemed to be at fault or on a pro-rata basis should the arbitration conclude in a findingof mutual fault.          **(b) Short-Form Arbitration.**Any dispute subject to short-form arbitration as provided in thisAgreement shall be finally settled by binding arbitration conducted, in accordance with the rulesof the American Arbitration Association then in effect, in New York, New York by a singlearbitrator reasonably knowledgeable about the pharmaceutical industry and appointed in accordancewith such rules. Such arbitrator shall make his or her determination on the basis of “baseballarbitration” principles. The foregoing remedy shall be each party’s sole and exclusive remedywith respect to any such dispute. The expenses of any arbitration, including the reasonableattorney fees of the prevailing party, shall be borne by the party deemed to be at fault or on apro-rata basis should the arbitration conclude in a finding of mutual fault. In each case, theparties and arbitrator shall use all diligent efforts to complete such arbitration within thirty(30) days after appointment of the arbitrator.          **(c) Confidentiality of Proceedings.**All arbitration proceedings hereunder shall beconfidential and the arbitrator(s) shall issue appropriate protective orders to safeguard eachparty’s Confidential Information. Except as required by law, no party shall make (or instruct thearbitrator(s) to make) any public announcement with respect to the proceedings or decision of thearbitrator(s) without prior written consent of the other party.          **(d) Exceptions.**Notwithstanding the foregoing, neither party shall be bound to follow thedispute resolution process described in this Section with respect to any dispute: (i) thatprimarily involves or relates to the scope or validity of the Licensed Patents; or (ii) for **[ ** ]** = Certain confidential information contained in this document, marked by brackets, hasbeen omitted and filed separately with the Securities and Exchange Commission pursuant to Rule24b-2 of the Securities Exchange Act of 1934, as amended.
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which interim equitable relief from a court is necessary to prevent serious and irreparable injuryto a party.     **14.5 Costs and Expenses.**Except as otherwise expressly provided in this Agreement, each partyshall bear all costs and expenses associated with the performance of such party’s obligations underthis Agreement.     **14.6 Force Majeure.**Neither party shall be liable for failure to perform, or delay in theperformance of, its obligations under this Agreement (other than payment obligations) when suchfailure or delay is caused by an event of *force majeure*; *provided, however*, that the affected partyresumes performance hereunder as soon as reasonably possible following cessation of such *forcemajeure*event; and *provided further*that no such delay or failure in performance shall continue formore than three (3) months. For purposes of this Agreement, an event of *force majeure*means anyevent or circumstance beyond the reasonable control of the affected party, including but notlimited to, war, insurrection, riot, fire, flood or other unusual weather condition, explosion, actof God, peril of the sea, strike, lockout or other industrial disturbance, sabotage, accident,embargo, injunction, act of governmental authority, compliance with governmental order on nationaldefense requirements, or inability to obtain fuel, power, raw materials, labor, transportationfacilities. If, due to any event of *force majeure*, either party shall be unable to fulfill itsobligations under this Agreement (other than payment obligations), the affected party shallimmediately notify the other party of such inability and of the period during which such inabilityis expected to continue. In the event that a delay or failure in performance by a party under this**Section 14.6**continues longer than three (3) months, the other party may terminate this Agreementin accordance with the terms and conditions of **Section 13.2**.     **14.7 Notices.**Any notice, request, or communication under this Agreement shall be effectiveonly if it is in writing and personally delivered; sent by certified mail, postage pre-paid;facsimile with receipt confirmed; or by nationally recognized overnight courier with signaturerequired, addressed to the parties at the addresses stated below or such other persons and/oraddresses as shall be furnished in writing by any party in accordance with this **Section 14.7**.Unless otherwise provided, all notices shall be sent:     If to CyDex, to:CyDex, Inc.