exv10w33






			
	EXECUTION COPY
	 	Exhibit 10.33






LICENSE, DEVELOPMENT, SUPPLY AND DISTRIBUTION AGREEMENT




by and among




ALLERGAN SALES, LLC,




ALLERGAN USA, INC.,




ALLERGAN, INC.




and




SPECTRUM PHARMACEUTICALS, INC.




dated October 28, 2008






 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.






 









 








Table of Contents




	 	 	 	 	 	 	 	 	 
	ARTICLE 1 DEFINITIONS; INTERPRETATION	 	 	5	 
	 	 	 	 	 
	 	 	 	 
	 	1.1	 	 	Definitions

	 	 	6	 
	 	1.2	 	 	Interpretation

	 	 	6	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 2 LICENSES; DELIVERY	 	 	6	 
	 	 	 	 	 
	 	 	 	 
	 	2.1	 	 	License to Allergan

	 	 	6	 
	 	2.2	 	 	Degree of Exclusivity

	 	 	7	 
	 	2.3	 	 	Allergan Sublicense Right

	 	 	7	 
	 	2.4	 	 	Spectrum’s Retained Rights

	 	 	7	 
	 	2.5	 	 	Spectrum Additional Limitations

	 	 	8	 
	 	2.6	 	 	Additional Restrictions

	 	 	10	 
	 	2.7	 	 	Diversion

	 	 	12	 
	 	2.8	 	 	Delivery Obligations of Spectrum

	 	 	13	 
	 	2.9	 	 	Delivery Obligations of Allergan

	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 3 DEVELOPMENT; SUPPLY; MARKETING	 	 	13	 
	 	 	 	 	 
	 	 	 	 
	 	3.1	 	 	Development Obligations

	 	 	13	 
	 	3.2	 	 	Joint Development Plans

	 	 	14	 
	 	3.3	 	 	Manufacturing Obligations

	 	 	18	 
	 	3.4	 	 	Commercialization Rights and Obligations

	 	 	22	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 4 COMMITTEES	 	 	24	 
	 	 	 	 	 
	 	 	 	 
	 	4.1	 	 	Generally

	 	 	24	 
	 	4.2	 	 	Governance of Each Committee

	 	 	25	 
	 	4.3	 	 	Joint Development Committee

	 	 	25	 
	 	4.4	 	 	Joint Supply Committee

	 	 	26	 
	 	4.5	 	 	Joint Marketing Committee

	 	 	27	 
	 	4.6	 	 	Escalation Procedure

	 	 	27	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 5 REGULATORY MATTERS	 	 	29	 
	 	 	 	 	 
	 	 	 	 
	 	5.1	 	 	Obligations of the Parties Relating to Regulatory Submissions

	 	 	29	 
	 	5.2	 	 	Information Sharing

	 	 	31	 
	 	5.3	 	 	Remedial Actions

	 	 	31	 
	 	5.4	 	 	Costs Of Remedial Action

	 	 	31	 
	 	5.5	 	 	Pharmacovigilance or Adverse Event Reporting

	 	 	32	 
	 	5.6	 	 	Notification of Complaints

	 	 	32	 
	 	5.7	 	 	Notification of Threatened Action

	 	 	33	 
	 	5.8	 	 	Regulatory Inspections

	 	 	33	 
	 	5.9	 	 	Audits

	 	 	33	 







 









 






	 	 	 	 	 	 	 	 	 
	ARTICLE 6 PAYMENTS AND ROYALTIES	 	 	33	 
	 	 	 	 	 
	 	 	 	 
	 	6.1	 	 	Upfront Payment

	 	 	33	 
	 	6.2	 	 	Development Milestone Payments

	 	 	34	 
	 	6.3	 	 	Sales Milestone Payments

	 	 	35	 
	 	6.4	 	 	Running Royalties

	 	 	36	 
	 	6.5	 	 	Royalty Payment Schedule

	 	 	39	 
	 	6.6	 	 	Development Costs

	 	 	39	 
	 	6.7	 	 	Currency of Payments

	 	 	40	 
	 	6.8	 	 	Budget

	 	 	40	 
	 	6.9	 	 	Books; Records

	 	 	40	 
	 	6.10	 	 	Audits

	 	 	40	 
	 	6.11	 	 	Offset

	 	 	41	 
	 	6.12	 	 	Stacking

	 	 	41	 
	 	6.13	 	 	Withholding Taxes

	 	 	41	 
	 	6.14	 	 	Spectrum’s Obligations

	 	 	42	 
	 	6.15	 	 	Late Payment

	 	 	42	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 7 TRADEMARK ASSIGNMENT	 	 	42	 
	 	 	 	 	 
	 	 	 	 
	 	7.1	 	 	Assignment

	 	 	42	 
	 	7.2	 	 	No Use by Spectrum

	 	 	42	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 8 INTELLECTUAL PROPERTY	 	 	43	 
	 	 	 	 	 
	 	 	 	 
	 	8.1	 	 	Ownership

	 	 	43	 
	 	8.2	 	 	Prosecution

	 	 	43	 
	 	8.3	 	 	Enforcement

	 	 	44	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 9 CONFIDENTIAL INFORMATION	 	 	46	 
	 	 	 	 	 
	 	 	 	 
	 	9.1	 	 	Confidentiality Obligations

	 	 	46	 
	 	9.2	 	 	Disclosure Required by Law

	 	 	47	 
	 	9.3	 	 	Equitable Relief

	 	 	48	 
	 	9.4	 	 	Independent Development; Residuals

	 	 	48	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 10 CERTAIN REMEDIES; NOTICE RIGHT	 	 	48	 
	 	 	 	 	 
	 	 	 	 
	 	10.1	 	 	Development Trigger

	 	 	48	 
	 	10.2	 	 	Change in Control Trigger

	 	 	49	 
	 	10.3	 	 	Co-Promotion Trigger

	 	 	49	 
	 	10.4	 	 	Clarification

	 	 	50	 
	 	10.5	 	 	Notice

	 	 	50	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 11 REPRESENTATIONS, WARRANTIES AND COVENANTS	 	 	50	 






2









 






	 	 	 	 	 	 	 	 	 
	 	11.1	 	 	Both Parties

	 	 	50	 
	 	11.2	 	 	Licensed Intellectual Property: Ownership/Right to License; Non-Infringement;
Validity

	 	 	51	 
	 	11.3	 	 	All Rights Granted

	 	 	52	 
	 	11.4	 	 	No Law Suits

	 	 	52	 
	 	11.5	 	 	Trademarks

	 	 	52	 
	 	11.6	 	 	Confidentiality

	 	 	53	 
	 	11.7	 	 	Regulatory Approvals

	 	 	53	 
	 	11.8	 	 	Professional Standards

	 	 	54	 
	 	11.9	 	 	No Conflict

	 	 	54	 
	 	11.10	 	 	Additional Warranties

	 	 	55	 
	 	11.11	 	 	Licensed Product Warranties

	 	 	55	 
	 	11.12	 	 	Inaccuracies

	 	 	56	 
	 	11.13	 	 	DISCLAIMER OF ALL OTHER WARRANTIES

	 	 	56	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 12 INDEMNIFICATION; LIMITATIONS ON LIABILITY; INSURANCE REQUIREMENTS	 	 	56	 
	 	 	 	 	 
	 	 	 	 
	 	12.1	 	 	Indemnification By Spectrum

	 	 	56	 
	 	12.2	 	 	Indemnification By Allergan

	 	 	57	 
	 	12.3	 	 	Procedure

	 	 	57	 
	 	12.4	 	 	Allocation of Product Liability Risks

	 	 	58	 
	 	12.5	 	 	Infringement Remedies

	 	 	60	 
	 	12.6	 	 	LIMITATIONS ON LIABILITY

	 	 	60	 
	 	12.7	 	 	Insurance

	 	 	60	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 13 TERM AND TERMINATION	 	 	61	 
	 	 	 	 	 
	 	 	 	 
	 	13.1	 	 	Term

	 	 	61	 
	 	13.2	 	 	Termination at Will

	 	 	61	 
	 	13.3	 	 	Material Breach

	 	 	63	 
	 	13.4	 	 	365(n)

	 	 	63	 
	 	13.5	 	 	Effect of Termination

	 	 	63	 
	 	 	 	 	 
	 	 	 	 
	ARTICLE 14 MISCELLANEOUS	 	 	64	 
	 	 	 	 	 
	 	 	 	 
	 	14.1	 	 	Relationship of Parties

	 	 	64	 
	 	14.2	 	 	Force Majeure Event

	 	 	65	 
	 	14.3	 	 	Entire Agreement

	 	 	65	 
	 	14.4	 	 	No Waiver; Amendment

	 	 	65	 
	 	14.5	 	 	Partial Invalidity

	 	 	65	 
	 	14.6	 	 	Assignment

	 	 	66	 
	 	14.7	 	 	Governing Law

	 	 	66	 
	 	14.8	 	 	Remedies

	 	 	66	 






3









 






	 	 	 	 	 	 	 	 	 
	 	14.9	 	 	Further Assurances

	 	 	66	 
	 	14.10	 	 	Counterparts; Facsimile

	 	 	66	 
	 	14.11	 	 	Notices

	 	 	66	 
	 	14.12	 	 	Press Releases and Announcements

	 	 	68	 
	 	14.13	 	 	Use of Subcontractors

	 	 	68	 






List of Schedules




Schedule 1.1 — Definitions




Exhibit A to Schedule 1.1 — Apaziquone




Exhibit B to Schedule 1.1 —  Example of Closed System Packaging




Exhibit C to Schedule 1.1 — TPP




Schedule 3.1(a) — Joint Development Plan




Schedule 3.1(c) — Key Development Personnel




Schedule 3.2 (f)(i) — List of Subcontractors




Schedule 3.2(f)(ii) — Hospitals and Institutions that are clinical trial sites




Schedule 3.3(b) — Spectrum Manufacturing Agreements




Schedule 3.3(d) — Specifications




Schedule 3.4(a) — Co-Promotion Agreement




Section 3.4(b)(i) — Initial Joint Marketing Plan




Schedule 6.4(a) — Example of Royalties




Schedule 7.1 — Trademark Assignment Agreement, including Exhibit A




Schedule 11.2(e) — Disclosures





			 
	Schedule 11.5(c) — Trademark and Domain Name Applications and Registrations for the Acquired
Trademarks








4











 





LICENSE, DEVELOPMENT, SUPPLY AND DISTRIBUTION AGREEMENT




     This LICENSE, DEVELOPMENT, SUPPLY AND DISTRIBUTION AGREEMENT (this “Agreement”), entered into
as of October 28, 2008 (the “Effective Date”), is made by and among Allergan Sales, LLC, a Delaware
corporation with its principal place of business at 2525 Dupont Drive, Irvine, California 92612
(“Allergan Sales”), Allergan USA, Inc., a Delaware corporation with its principal place of business
at 2525 Dupont Drive, Irvine, California 92612 (“Allergan USA”), Allergan, Inc., a Delaware
corporation with its principal place of business at 2525 Dupont Drive, Irvine, California 92612
(“Allergan, Inc.” and, collectively with Allergan Sales and Allergan USA, “Allergan”) and Spectrum
Pharmaceuticals, Inc. (“Spectrum”), a Delaware corporation with its principal place of business at
157 Technology Drive, Irvine, CA 92618. Allergan and Spectrum are collectively referred to herein
as the “Parties” and individually as a “Party”.



RECITALS




     WHEREAS, Spectrum has developed certain intellectual property relating to the use of
Apaziquone for urological treatments and is conducting Phase 3 trials using the immediate
intravesical instillation of Apaziquone for the treatment of bladder cancer;



     WHEREAS, Allergan has substantial expertise in the research, development, manufacture,
distribution, sales and marketing of urologic products, but does not currently market or
manufacture a bladder cancer treatment;



     WHEREAS, the Parties desire to collaborate in conducting development and related activities,
marketing in certain territories, and selling of product(s) containing Apaziquone for certain
indications in those territories all on the terms and conditions set forth herein, but it is not
the intention of the Parties to undertake an employment, joint venture, partnership or other
fiduciary relationship; and



     WHEREAS, Allergan USA will be responsible for the Allergan sales and distribution of the
products described herein and Allergan Sales will be responsible for the Allergan development and
manufacturing obligations described herein.



     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual representations,
warranties, covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto
agree as follows:



ARTICLE 1

DEFINITIONS; INTERPRETATION




     1.1 Definitions. For the purposes of this Agreement, the capitalized terms used in this
Agreement, and not otherwise defined when used, shall have the meanings specified in Schedule






5









 









1.1.




     1.2
Interpretation. This Agreement shall be governed by the following rules of
construction, unless otherwise specified by the Agreement: (a) words of one gender shall be deemed
to include words of other genders; (b) any reference to an Article, Section, Exhibit, clause,
subclause, paragraph, subparagraph, Schedule or Recital is a reference to an Article, Section,
Exhibit, clause, subclause, paragraph, subparagraph, Schedule or Recital of this Agreement; (c) any
reference to any statute shall be construed as including all statutory provisions consolidating,
amending or replacing such statute; (d) the terms “hereof,” “hereby,” “hereto,” “hereunder” and
similar terms shall refer to this Agreement as a whole; (e) the word “including” and words of
similar import mean “including, without limitation” and “including, but not limited to”; (f) the
headings contained herein are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement; (g) this Agreement shall be construed without regard
to any presumption or rule requiring construction or interpretation against the Party drafting or
causing any instrument to be drafted; (h) all references to “dollars” or “$” refer to United States
dollars; and (i) all references to “days” mean calendar days. In the event of any inconsistency
between the terms of the Schedules and the terms of the main body of this Agreement, the terms of
the main body of this Agreement shall prevail, except that in the event of any inconsistency
between the terms of Schedule 1.1 and the terms of the main body of this Agreement, the terms of
Schedule 1.1 shall prevail.



ARTICLE 2

LICENSES; DELIVERY




     2.1 License to Allergan. Subject to the terms and conditions of this Agreement, Spectrum
hereby grants to Allergan and its Affiliates the following rights and licenses:



     (a) an exclusive (even as to Spectrum, but subject to Section 2.2), irrevocable, right and
license, under the Licensed Intellectual Property, with the right to grant sublicenses (subject to
Section 2.3), to make, have made, use, conduct clinical trials for, sell, offer for sale, have
sold, import, export, or otherwise exploit the Licensed Product in the Allergan Territory;
provided, however, that Allergan shall not make, have made, use, conduct clinical
trials for, sell, offer for sale, have sold, import, export, or otherwise exploit the Licensed
Product, under the Licensed Intellectual Property, outside the Field of Use in the Allergan
Territory without Spectrum’s consent;



     (b) a non-exclusive, irrevocable, royalty-free right and license, under the Licensed
Intellectual Property, with the right to grant sublicenses, to manufacture and have manufactured
the Licensed Product in the Spectrum Territory solely for use or sale of such Licensed Product
pursuant to Section 2.1(a); and



     (c) a non-exclusive, irrevocable, royalty-free right and license, with the right to grant
sublicenses, to use, perform, modify, create derivative works of, copy, display, reproduce and
distribute any and all Documents on or relating to the Licensed Product for the purpose of



6









 










exercising the rights granted in Section 2.1(a).




     2.2 Degree of Exclusivity. The license granted in Section 2.1(a) is exclusive. As used
herein, “exclusive” shall mean that Spectrum may not:



     (a) grant any other license to any other licensee of the Licensed Intellectual Property within
the scope of the license granted to Allergan under Section 2.1(a), in whole or in part;



     (b) itself make, have made, use, conduct clinical trials for, sell, offer for sale, have sold,
import, export, or otherwise exploit under the Licensed Intellectual Property within the scope of
the license granted to Allergan under Section 2.1(a); and



     (c) assign, transfer or otherwise dispose of the Licensed Intellectual Property except as part
of an assignment of the entire Agreement pursuant to Section 14.6.



     Notwithstanding the foregoing, Spectrum shall:




     (i) have the right to perform its obligations set forth in this Agreement and the
Co-Promotion Agreement;




     (ii) have the rights set forth in Section 2.5(b); and




     (iii) shall have the right, under the Licensed Intellectual Property, to manufacture
and have manufactured any formulation including Apaziquone in the Allergan Territory solely
for use or sale of such formulation including Apaziquone within the scope of Spectrum’s
retained rights under Sections 2.4(a) and (b).



     2.3 Allergan Sublicense Right. Allergan shall have the unrestricted right to grant
sublicenses under the license in Section 2.1(a) in the Field of Use to its Affiliates without the
prior written consent of Spectrum,
and in the Field of Use to any other Third Parties: (a) with the prior written consent of
Spectrum in the Co-Promotion Region during the term of the Co-Promotion Agreement; and (b) without
the prior written consent of Spectrum in any other country or territory in the Allergan Territory.
Allergan shall have the unrestricted right to subcontract any of its obligations hereunder which do
not require the sublicenses described in Section 2.3(a) above.



     2.4 Spectrum’s Retained Rights.



     (a) Spectrum retains the right under the Licensed Intellectual Property to develop and
commercialize any formulation including Apaziquone in the Spectrum Territory. Provided that
Spectrum is not in material breach of the terms of this Agreement, on written request by Spectrum,
Allergan agrees to negotiate in good faith for a reasonable period the terms of a commercially
reasonable royalty-bearing license under the Allergan Solely Developed Know How and Allergan’s
rights under the Joint Intellectual Property for Spectrum to develop and commercialize any
formulation including Apaziquone in the Spectrum Territory.



7









 











     (b) Spectrum retains the right under the Licensed Intellectual Property to develop and
commercialize any formulation including Apaziquone that is not a Licensed Product in the Allergan
Territory. Provided that Spectrum is not in material breach of the terms of this Agreement, on
written request by Spectrum, Allergan agrees to negotiate in good faith for a reasonable period the
terms of a commercially reasonable royalty-bearing license under the Allergan Solely Developed Know
How and Allergan’s rights under the Joint Intellectual Property for Spectrum to develop and
commercialize any formulation including Apaziquone that is not a Licensed Product in the Allergan
Territory.



     (c) If the Parties cannot agree on the royalty rate and scope of the license grant terms of
such commercially reasonable royalty-bearing licenses (in Section 2.4 (a) or (b), or in Section
2.5(b)(iii)(A) or Section 13.2(c)(i)) within a reasonable period of time, either Party may
initiate, and the Parties shall jointly submit to, binding arbitration in California, and the sole
issues to be submitted to arbitration shall be the royalty rate and scope of the license grant.
Upon conclusion of such arbitration, the Parties agree to effect the arbitrator’s order which shall
be binding.



     2.5 Spectrum Additional Limitations.



     (a) Spectrum will not conduct clinical trials in the Field of Use with any formulation
including Apaziquone in the Allergan Territory, other than for the Licensed Product in the Field of
Use under this Agreement.



     (b) If Spectrum desires to develop or commercialize any Licensed Product for use outside the
Field of Use in the Allergan Territory the following shall apply:




     (i) prior to Spectrum initiating any clinical trial using a Licensed Product for use
outside the Field of Use in the Allergan Territory (such as ****), Spectrum will notify
Allergan in writing (the “Option Notice”) detailing such proposed use and will provide
Allergan with any data (including Spectrum’s then current development plan and budget) then
possessed by Spectrum on such Licensed Product for such use in such indication (such
Licensed Product for such use in such indication is the “Option Product”);




     (ii) Allergan may, at its option, choose to co-develop and co-promote such Option
Product with Spectrum by delivering to Spectrum written notice within ninety (90) days after
receipt of the Option Notice. If Allergan elects to co-develop and/or co-promote such
Option Product with Spectrum, the Parties shall negotiate in good faith a written agreement
(the “Option Product Agreement”) covering the following:




     (A) the terms for development and/or commercialization of such Option Product;




     (B) a committee structure for the oversight of the development, marketing and
commercialization of the Option Product, with similar decision-making rules as those
in effect under this Agreement; and





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




8









 











     (C) cross licenses under the Allergan Solely Developed Know How, Licensed
Intellectual Property and Allergan’s rights in the Joint Intellectual Property to
develop and commercialize such Option Product under similar terms to those set forth
in this Agreement.




     (iii) If Allergan chooses not to co-develop and co-promote such Option Product with
Spectrum (as indicated by Allergan’s delivery of written notice to Spectrum rejecting such
rights, or failure to make an affirmative election within ninety (90) days after receipt of
the Option Notice), or the Parties fail to enter into an Option Product Agreement, then
Spectrum will have the right to pursue the development and commercialization of such Option
Product for the scope described to Allergan in the
Option Notice on its own and at its own expense (by itself or with a Third Party,
subject to Section 2.5(b)(iv)), and the following will apply:




     (A) Allergan agrees to negotiate in good faith for a reasonable period the
terms of a commercially reasonable royalty-bearing license under the Allergan Solely
Developed Know How and Allergan’s rights under the Joint Intellectual Property for
Spectrum to develop and commercialize the Option Product for use outside the Field
of Use in the Allergan Territory (any disagreement shall be subject to binding
arbitration pursuant to the terms of Section 2.4(c));




     (B) Spectrum shall not use any Trademark that is the same as, or similar to (so
as to cause confusion in consumers), the Acquired Trademarks or any other Trademark
used by Allergan or its Affiliates in Spectrum’s development or commercialization of
the Option Product;




     (C) Spectrum will package the Option Product in a manner that will not be
confused with the Licensed Product in the Field of Use, and will label such Option
Product as “not for bladder cancer treatment”; and




     (D) Spectrum will not promote, market, sell or distribute such Option Product
for use in the Field of Use in the Allergan Territory, and will use diligent efforts
to prevent and curb any use of such Option Product in the Field of Use in the
Allergan Territory, including meeting the requirements set forth in Sections 2.7(a)
and (d).




     (iv) If Allergan opts out of developing and/or commercializing an Option Product under
subsection (iii) or the Parties fail to enter into an Option Product Agreement, and Spectrum
or any of its Affiliates desires to commence development or commercialization of such Option
Product with a Third Party (excluding any Affiliate of Spectrum) (“Proposed Transaction”),
then the following shall apply:




     (A) the terms of the Proposed Transaction under which Spectrum (or its
Affiliate) contracts with such Third Party may not be more favorable to such



9









 












Third Party, taken as a whole, than the terms applicable to Allergan last
offered to Spectrum by Allergan; and




     (B) if Spectrum (or its Affiliate) does not execute a definitive agreement for
the Proposed Transaction with a Third Party within nine (9) months following the
date that Allergan opts out under subsection (iii) or the Parties’ terminated
negotiation of an Option Product Agreement, then Spectrum (or its Affiliate) shall
be obligated to comply with this Section 2.5(b) again prior to
entering into a Proposed Transaction with a Third Party (i.e., Spectrum (or its
Affiliate) shall deliver a new Option Notice under Section 2.5(b)(i) and update its
data delivery, and recommence the option process with Allergan).



     For clarity, if Allergan opts out of developing and/or commercializing an Option Product under
subsection (iii) or fails to make an affirmative election within ninety (90) days after the receipt
of an Option Notice, or the Parties fail to enter into an Option Product Agreement, then Spectrum
may then commence a clinical trial of the Option Product for use outside the Field of Use. Spectrum
acknowledges and agrees that neither it nor its Affiliates will use this process to circumvent the
intent of this Section 2.5(b).



     2.6 Additional Restrictions.



     (a) For the period commencing on the Effective Date and ending **** after the First Commercial
Sale of a Licensed Product in the Field of Use in the Allergan Territory, Allergan will not develop
or commercialize any formulation including Apaziquone, except as a Licensed Product in the Field of
Use, without Spectrum’s written consent. It shall not be a breach of this subsection to the extent
that: (A) there is a Change in Control of Allergan and the acquirer of Allergan’s stock or other
securities or all or substantially all of the assets or any integral part of any Allergan, at the
time of acquisition, is developing or commercializing itself or through its Affiliates any
formulation that includes Apaziquone outside the Field of Use; or (B) Allergan directly or
indirectly, including through an Affiliate, acquires or purchases the stock or other securities or
all or substantially all of the assets or any integral part of any Third Party which at the time of
acquisition is developing or commercializing itself or through its Affiliates any formulation that
includes Apaziquone outside the Field of Use.



     (b) Except for Spectrum’s performance obligations hereunder, for the period commencing on the
Effective Date and ending on the earlier of (i) an Allergan Trigger Date (hereinafter defined), or
(ii) **** after the First Commercial Sale of a Licensed Product in the Field of Use in the Allergan
Territory, Spectrum and its Affiliates shall not, by license or otherwise, research, develop, make,
use, market, sell, distribute or otherwise commercialize any Antineoplastic (hereinafter defined)
in the Field of Use in the Allergan Territory. It shall not be a breach of this subsection to the
extent that: (A) there is a Change in Control of Spectrum and the acquirer of Spectrum’s stock or
other securities or all or substantially all of the assets or any integral part of Spectrum, at the
time of acquisition, is developing or commercializing itself or through its Affiliates an
Antineoplastic in the Field of Use in the Allergan Territory; or (B)





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




10









 









Spectrum directly or indirectly, including through an Affiliate, acquires or purchases the stock or
other securities or all or substantially all of the assets or any integral part of any Third Party
which at the time of acquisition is developing or commercializing itself or through its Affiliates
any Antineoplastic in the Field of Use in the Allergan Territory.




     (c) Except for the Licensed Product, for the period commencing on the Effective Date and
ending on the earlier of (i) a Spectrum Trigger Date (hereinafter defined), or (ii) **** after the
First Commercial Sale of a Licensed Product in the Field of Use in the Allergan Territory, Allergan
and its Affiliates shall not, by license or otherwise, research, develop, make, use, market, sell,
distribute or otherwise commercialize any Antineoplastic in the Field of Use in the Allergan
Territory. It shall not be a breach of this subsection to the extent that: (A) there is a Change
in Control of Allergan and the acquirer of Allergan’s stock or other securities or all or
substantially all of the assets or any integral part of Allergan, at the time of acquisition is
developing or commercializing itself or through its Affiliates an Antineoplastic in the Field of
Use in the Allergan Territory; or (B) Allergan directly or indirectly, including through an
Affiliate, acquires or purchases the stock or other securities or all or substantially all of the
assets or any integral part of any Third Party which at the time of acquisition is developing or
commercializing itself or through its Affiliates any Antineoplastic in the Field of Use in the
Allergan Territory.



     (d) If the foregoing restrictions in subsections (b) and (c) are held by a court of competent
jurisdiction to be unenforceable, the restriction shall be automatically converted into a covenant
under which the applicable Party shall have the right of first negotiation to license the rights
covered by the restrictions in subsection (b) and (c) prior to their use or disposal of such rights
by the Party that would otherwise be in breach of subsection (b) or (c), upon commercially
reasonable terms.



     (e) The following terms have the meanings set forth next to them when used in this Section
2.6:




     (i) “Allergan Trigger Date” means the date on which (A) there is a Change in Control of
Allergan and the acquirer of Allergan’s stock or other securities or all or substantially
all of the assets or any integral part of any Allergan, at the time of acquisition is
developing or commercializing itself or through its Affiliates an Antineoplastic (except for
a Licensed Product) in the Field of Use in the Allergan Territory, or (B) Allergan directly
or indirectly, including through an Affiliate, acquires or purchases the stock or other
securities or all or substantially all of the assets or any integral part of any Third Party
which at the time of acquisition is developing or commercializing itself or through its
Affiliates any Antineoplastic (except for a Licensed Product) in the Field of Use in the
Allergan Territory.




     (ii) “Antineoplastic” means a chemotherapeutic agent that causes cell death via redox
cycle or alkylation of DNA.




 




	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




11









 












     (iii) “Spectrum Trigger Date” means the date on which (A) there is a Change in Control
of Spectrum and the acquirer of Spectrum’s stock or other securities or all or substantially
all of the assets or any integral part of Spectrum, at the time of acquisition, is
developing or commercializing itself or through its Affiliates an Antineoplastic in the
Field of Use in the Allergan Territory, or (B) Spectrum directly or indirectly, including
through an Affiliate, acquires or purchases the stock or other securities or all or
substantially all of the assets or any integral part of any Third Party which at the time of
acquisition is developing or commercializing itself or through its Affiliates any
Antineoplastic in the Field of Use in the Allergan Territory.



     2.7 Diversion.



     (a) Except pursuant to Section 2.5(b), Spectrum shall not sell the Licensed Product, including
via the Internet or mail order, to any Third Party, address or Internet Protocol (“IP”) address in
the Allergan Territory. If any of Spectrum’s product is diverted for use in the Field of Use in
the Allergan Territory, the following shall apply: (i) if such product were diverted by an
identifiable customer, distributor, employee, consultant or agent of Spectrum then, upon the
request of Allergan, Spectrum shall not sell such category of product to, or allow the sale of such
category of product by, any such customer, distributor, employee, consultant or agent for the
remaining Term and shall use commercially reasonable efforts to buy back all such product from such
customer, distributor, employee, consultant or agent within ten (10) business days of such request
from Allergan; or (ii) Spectrum shall use commercially reasonable efforts to investigate the
location of such diverted product and buy it back; but, if and to the extent that, Spectrum elects
not to, or is unable to, buy back the applicable diverted product, then Allergan may, in its sole
discretion, buy back the applicable diverted product and Spectrum shall reimburse Allergan for all
reasonable costs incurred by Allergan in connection with the buy-back of any such diverted product.



     (b) Allergan shall not sell Licensed Product, including via the Internet or mail order, to any
Third Party, address or IP address in the Spectrum Territory. If any of Allergan’s Licensed
Product is diverted for sale in the Spectrum Territory, the following shall apply: (i) if such
Licensed Product were diverted by an identifiable customer, distributor, employee, consultant or
agent of Allergan then, upon the request of Spectrum, Allergan shall not sell Licensed Product to,
or allow the sale of Licensed Product by, any such customer, distributor, employee, consultant or
agent for the remaining Term and shall use commercially reasonable efforts to buy back all such
Licensed Product from such customer, distributor, employee, consultant or agent within ten (10)
business days of such request from Spectrum; or (ii) Allergan shall use commercially reasonable
efforts to investigate the location of such diverted Licensed Product and buy it back; but, if and
to the extent that, Allergan elects not to, or is unable to, buy back the applicable diverted
Licensed Product, then Spectrum may, in its sole discretion, buy
back the applicable diverted Licensed Product and Allergan shall reimburse Spectrum for all
reasonable costs incurred by Spectrum in connection with the buy-back of any such diverted Licensed
Product.





12









 










     (c) The Parties acknowledge that, during the term of the Co-Promotion Agreement, the Parties
have different financial arrangements in the Co-Promotion Region than in the Royalty Territory.
During the term of the Co-Promotion Agreement, Allergan shall use substantially similar efforts to
the efforts Allergan uses with other Allergan prescription products to monitor the sales of the
Licensed Product in the Field of Use in the Royalty Territory in order to minimize the quantity of
Licensed Product in the Field of Use that is sold in the Royalty Territory with a view to diversion
for final sale in the Co-Promotion Region. The failure to stop such diversion shall not be deemed
a material breach of this Agreement. During the term of the Co-Promotion Agreement, if there is
any change in government policies in the Allergan Territory that materially affects the ability to
move Licensed Product in the Field of Use from the Royalty Territory into the Co-Promotion Region,
the Parties will meet to discuss in good faith the effect of such changes on diversion.



     (d) If any formulation containing Apaziquone sold by Spectrum, its Affiliates or sublicensees
(the “Spectrum Product”) is used in the Field of Use in the Allergan Territory, Spectrum shall pay
to Allergan royalties on the actual sales of such Spectrum Product resulting in such use at the
rate of ****; provided, however, that, if, in any country in the Allergan
Territory, the use of such Spectrum Product in the Field of Use accounts for **** or more of the
use of any of Allergan’s Licensed Product in the Field of Use in such country, then Spectrum will
pay to Allergan royalties on Spectrum’s Royalty-Bearing Net Sales of all such Spectrum Product sold
in such country (regardless of the indication in which it is used) at the rate of ****.



     2.8 Delivery Obligations of Spectrum. Spectrum shall promptly disclose, in writing, to
Allergan all material Licensed Intellectual Property relevant to the license grants set forth
herein that is developed, conceived or reduced to practice during the Term of this Agreement by
Spectrum and its Affiliates, whether solely or jointly with Allergan, and shall make available to
Allergan all Spectrum employees involved in the development of such Licensed Intellectual Property,
during normal business hours, as may be reasonably requested by Allergan to assist Allergan in
understanding such deliveries.



     2.9 Delivery Obligations of Allergan. Upon agreement to the royalty-bearing licenses
described in Sections 2.4, 2.5 and/or Section 13.2(c)(i), Allergan shall promptly disclose, in
writing, to Spectrum all applicable material Allergan Solely Developed Know How and material Joint
Intellectual Property licensed
to Spectrum, and shall make available to Spectrum all Allergan employees involved in the
development of such material Allergan Solely Developed Know How and material Joint Intellectual
Property, during normal business hours, as may be reasonably requested by Spectrum to assist
Spectrum in understanding such deliveries.



ARTICLE 3

DEVELOPMENT; SUPPLY; MARKETING




     3.1 Development Obligations.



     (a) The Parties shall jointly develop the Licensed Product (which in final form will be





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




13









 









in Closed-System Packaging) for use in the Field of Use in accordance with Articles 3, 4 and 5.
The Parties shall develop the Licensed Product (which in final form will be in Closed-System
Packaging) for use in the Field of Use in the Co-Promotion Region and EU (and elsewhere in the
Allergan Territory where the Parties mutually agree to co-fund the development) pursuant to the
joint development plan that is attached as Schedule 3.1(a) (which is comprised of two documents,
the work plan and budget) (the “JDP”) as may be modified by the Parties from time to time as set
forth herein.




     (b) Obtaining the US Marketing Clearance and EU Marketing Clearance for the Licensed Product
(which in final form will be in Closed-System Packaging) for use in the Field of Use is of the
essence of this Agreement, and Spectrum shall develop the Licensed Product (which in final form
will be in Closed System Packaging) for use in the Field of Use and seek US Marketing Clearance and
EU Marketing Clearance for such Licensed Product pursuant to the terms of the JDP;
provided, however, that Allergan shall cooperate with Spectrum and perform its
obligations pursuant to the terms of the JDP.



     (c) Without limiting Allergan’s rights and remedies hereunder, Spectrum shall devote the
resources necessary to conduct and complete the 611 Study, 612 Study, BCG Refractory Study and, as
applicable, all other clinical trials described in Sections 3.2(b) and (c) using diligent efforts
to meet the timetables set forth in the JDP. Without limiting the foregoing obligation, Spectrum
agrees that, for as long as it has the responsibility to carry out the 611 Study, 612 Study and/or
the BCG Refractory Study under the JDP: (i) it will use commercially reasonable efforts to retain
each of the individuals specified in Schedule 3.1(c) to continue to perform services for Spectrum
for the applicable term set forth in Schedule 3.1(c), as either an employee or independent
contractor (collectively the “Key Development Personnel”); and (ii) it will use commercially
reasonable efforts to replace any Key Development Personnel who leave Spectrum during the
applicable term set forth in Schedule 3.1(c) for any reason, with a person or persons of comparable
skill and experience in the industry for such term. For purposes of clarity,
Spectrum shall be able to cure any material breach of (i) above by complying with (ii) above.
All Key Development Personnel shall allocate their time to performing development services under
this Agreement in accordance with the JDP until the US Marketing Clearance and EU Marketing
Clearance for Licensed Product in the Field of Use is received.



     (d) Spectrum shall, at its sole cost and expense (except as otherwise specified in Section
6.6), reasonably expand its development and clinical trial staff for performance of the services
set forth in this Article 3 as set forth in the JDP.



     3.2 Joint Development Plans.



     (a) Currently Contemplated Clinical Trials.




     (i) As of the Effective Date, the Parties have agreed upon the activities to be
performed by each Party to carry out the 611 Study and 612 Study, and a budget for
Development Costs relating thereto, as set forth in the JDP. The portions of the JDP





14









 









(including the work plan and budget) relating to the 611 Study and 612 Study are final and
are hereinafter referred to as the “611 Study and 612 Study JDP”. Spectrum shall perform
the services necessary to continue to successfully conduct and complete the 611 Study and
the 612 Study in compliance with the terms and conditions set forth in the 611 Study and 612
Study JDP using diligent efforts to meet the timetables set forth in the JDP. Spectrum
shall continue to be named as the sponsor of the 611 Study and 612 Study.





     (ii) As of the Effective Date, the Parties have reached preliminary agreement upon the
activities to be performed by each Party to carry out the BCG Refractory Study, and a budget
for Development Costs relating thereto, as set forth in the JDP. The portions of the JDP
relating to the BCG Refractory Study (including the work plan and budget) are in draft form
and are hereinafter the “BCG Refractory Study JDP”. Such BCG Refractory Study JDP is
subject to finalization pursuant to this Section. The Parties agree that the draft BCG
Refractory Study JDP is subject to regulatory feedback from both the FDA and EMEA and
feedback from Key Opinion Leaders selected by mutual agreement of the Parties. “Key Opinion
Leaders” are specialists in the field recognized as leaders by their peers. The JDC shall
consider the feedback from Key Opinion Leaders when determining whether the protocol for the
BCG Refractory Study JDP
requires modification. The Members (hereinafter defined) of the JDC for both Allergan
and Spectrum will participate in all meetings with the Key Opinion Leaders relating to the
BCG Refractory Study. The Parties may invite additional observers to such meetings, as set
forth in Section 4.2(d). Spectrum shall promptly modify the study protocol (as agreed to by
the Parties) for the BCG Refractory Study based on regulatory feedback from the FDA and EMEA
and shall design and finalize a final protocol and study parameters for the BCG Refractory
Study which meet the needs of the FDA and EMEA and are designed to achieve the TPP for the
Licensed Product in the Field of Use. The Parties acknowledge that they may need to modify
the TPP for the Licensed Product in the Field of Use as is reasonably required to meet FDA
and EMEA approvals. Spectrum shall perform the services necessary to successfully conduct
and complete the BCG Refractory Study in compliance with the terms and conditions set forth
in the BCG Refractory Study JDP using diligent efforts to meet the timetables set forth in
the JDP. Spectrum shall be named as the sponsor of the BCG Refractory Study.



     (b) Additional Clinical Trials for BCG Refractory Indication. If the EMEA requires additional
clinical trials for the Licensed Product for the BCG Refractory Indication (other than
modifications to the protocol for the BCG Refractory Study as described above), the Party who
receives notice from the EMEA shall promptly provide such notice to the other Party. The Parties
acknowledge that the conducting and completion of any such clinical trial(s) is of the essence of
this Agreement. The Parties shall coordinate the clinical trial(s) pursuant to one of the
following subsections:




     (i) if the Parties agree to work on such clinical trial together, the following shall
apply: (A) within thirty (30) days of receipt of such notice, Spectrum shall submit to







15









 











Allergan a proposed development plan (including protocol, timeline and budget); (B) Allergan
and Spectrum shall work together in good faith in a timely manner to modify the development
plan to reflect the Parties’ agreement on the clinical trial (including protocol, timeline
and budget) consistent with the feedback from the EMEA; (C) once approved by the Parties,
the JDP shall be modified to include such development plan, whereupon Spectrum shall be
responsible for conducting the clinical trial, subject to Allergan’s right, in its sole
discretion, to take control of and to conduct the clinical trial by providing written notice
to Spectrum, and each Party shall perform their respective obligations for the clinical
trial under the JDP; (D) Spectrum shall be the sponsor of the clinical trial unless Allergan
exerts its right to take control of and conduct such clinical trial; and (E) the Development
Costs incurred in such clinical trial shall be paid as set forth in Section 6.6, or, at
Spectrum’s request, Allergan shall pay all of the Development Costs for such performance and
shall receive a credit for such payments for Spectrum’s share (of 35%) of such costs from
royalties and milestone payments due hereunder; or




     (ii) if the Parties cannot agree on the development plan as set forth in Section
3.2(b)(i)(B) above, then: (A) Allergan may unilaterally create the development plan for the
clinical trial (including protocol, timeline and budget), consistent with the feedback from
the EMEA; (B) on completion, the JDP shall be modified to include such development plan,
whereupon Spectrum shall be responsible for conducting the clinical trial, subject to
Allergan’s right, in its sole discretion, to take over the control of and to conduct the
clinical trial by providing written notice to Spectrum, and each Party shall perform their
respective obligations for the clinical trial under such JDP; (C) Allergan shall be the
sponsor of the clinical trial; and (D) the Development Costs incurred in such clinical trial
shall be paid as set forth in Section 6.6, or, at Spectrum’s request, Allergan shall pay all
of the Development Costs for such performance and shall receive a credit for such payments
for Spectrum’s share (of 35%) of such costs from royalties and milestone payments due
hereunder.



     (c) Other Clinical Trials. As long as the Co-Promotion Agreement has not been terminated, any
additional clinical trial for the Licensed Product in the Field of Use in the Co-Promotion Region
(including Phase 3b trials and Phase 4 trials that the JMC (defined below) desires to conduct),
other than those set forth above, shall, upon the mutual agreement by the Parties, be documented in
a joint development plan (including protocol, timeline and budget) as a modification to the JDP,
and shall be conducted by the Parties in accordance with the JDP. If Spectrum elects not to
conduct such clinical trials or not to fund such clinical trials upfront, Allergan may still
conduct such clinical trials, and the Development Costs incurred in such clinical trials shall be
split evenly. At Spectrum’s request, Allergan shall pay all of the Development Costs for such
performance and shall receive a credit for such payments for Spectrum’s share of such costs from
royalties and milestone payments due hereunder. Allergan shall be the sponsor of all such clinical
trials that Spectrum elects not to conduct. Any additional clinical trials outside the
Co-Promotion Region shall be conducted and paid for by Allergan.



     (d) Additional Development Activities. Except for the 611 Study, 612 Study and






16









 









BCG Refractory Study, nothing in this Agreement shall prevent Allergan from developing and
performing any clinical trials with respect to the Licensed Product in the Field of Use in the
Allergan Territory unilaterally and at its own expense. If Allergan requests that Spectrum assist
in such trials, and Spectrum agrees to do so and agrees to assist in funding such trials, the
Parties shall amend the JDP to govern such trials and the Development Costs incurred in such
clinical trials shall be paid as set forth in Section 6.6. Spectrum shall not conduct any
development activities with respect to the Licensed Product in the Allergan Territory other than
pursuant to this Article 3 or as permitted in Section 2.5(b).




     (e) Modifications to the JDP. The JDC (defined below) shall have the right to amend the JDP,
except that the following modifications to the JDP must be agreed upon mutually by the
Parties (any modified JDP shall be deemed incorporated herein by reference):




     (i) any change in the JDP that would result in an increase of the total development
budget set forth in the JDP by more than ten percent (10%) as compared to the total
development budget set forth in the JDP as of the Effective Date; provided,
however, that if another BCG Refractory clinical trial is required under Section
3.2(b) or other clinical trials under Section 3.2(c), then the expenditure in connection
therewith shall not be subject to the limitation of this Section 3.2(e) or applied against
the ten percent (10%) allowance under this Section 3.2(e)(i);




     (ii) except for the clinical trials set forth in Section 3.2(a), (b) and (c), any new
clinical trials for the Licensed Product in the Field of Use in the Allergan Territory for
which Allergan wants Spectrum to conduct the clinical trials;




     (iii) any adjustment of the clinical trials specified above that have an adverse impact
on the TPP relating to the Indications;




     (iv) any adjustment of the TPP (except in response to the FDA or EMEA) that would have
a material impact on the clinical trials set forth above. Except as set forth in the
preceding sentence, Spectrum acknowledges that Allergan has final approval rights on the TPP
for the Licensed Product in the Field of Use, including over changes made in response to the
FDA and EMEA;




     (v) any material changes to the percentage of Key Development Personnel time spent on
development hereunder; and




     (vi) any changes to completion dates specified in the JDP.



     (f) Spectrum Subcontract Rights. Except for Clinical Trial Institutions (as defined below),
Spectrum shall not subcontract any of its obligations under Sections 3.1 and 3.2 without the prior
written consent of Allergan, such consent not to be unreasonably withheld, delayed or conditioned.
In negotiating such subcontractor agreements, Spectrum will obtain the right to assign such
subcontractor agreements to Allergan in the event Allergan assumes the responsibility for the
development of the Licensed Product, and such agreements will provide






17









 









Allergan with the same audit and inspection rights as those provided in Section 5.9. The Parties
acknowledge that, as of the Effective Date, Spectrum has engaged for development purposes the
subcontractors listed on Schedule 3.2(f)(i), and Allergan hereby consents to Spectrum’s right to
continue to use such subcontractors. If not already provided in the agreements with such
subcontractors, Spectrum will use commercially reasonable efforts to amend such agreements so that
Spectrum will have the right to assign such agreements to Allergan in the event Allergan assumes
the responsibility for the development of the Licensed Product, and to provide Allergan
with the same audit and inspection rights as those provided in Section 5.9. The subcontractors and
their contracts as of the Effective Date are identified on Schedule 3.2(f)(i), except for the
hospitals or similar institutions operating as a site for clinical trials if they are not providing
broader services such as collecting or managing data from other sites (the “Clinical Trial
Institutions”). All Clinical Trial Institutions, as of the Effective Date, are identified on
Schedule 3.2(f)(ii). Spectrum shall update Schedules 3.2(f)(i) and 3.2(f)(ii) each Fiscal Quarter
with the then-current development subcontractors.




     3.3 Manufacturing Obligations.



     (a) Obligations. The Parties shall perform their respective obligations pertaining to
manufacturing and supply set forth in the joint supply plan (“JSP”); provided,
however, that Allergan shall have the right to take over Spectrum’s role under the JSP at
any time with written notice to Spectrum. The initial JSP (for clinical trials supply and
validation batches) forms part of the JDP attached as Schedule 3.1(a). The Parties acknowledge
that all modifications to the JSP must be agreed upon by the Parties, and that neither Party may
unilaterally modify the JSP. Any modified JSP shall be deemed incorporated herein by reference.
Subject to the terms and conditions of this Agreement, including the JSP, Spectrum agrees to have
manufactured and supplied to Allergan all of Allergan’s requirements for the Licensed Product for
clinical development under the terms of this Agreement. Spectrum agrees to have manufactured and
supplied to Allergan all of Allergan’s requirements for the Licensed Product for commercial use
pursuant to an amended JSP reflecting commercial supply and a mutually agreed upon supply agreement
as contemplated by Section 3.3(d).



     (b) Subcontracting. Spectrum may meet its obligations to supply the Licensed Product to
Allergan hereunder through subcontracts with Third Parties, subject to the following requirements:




     (i) Spectrum may not subcontract the performance of any services or sublicense any
rights set forth in this Section 3.3 to any sublicensee/subcontractor without Allergan’s
prior written permission. Allergan may, in its sole discretion, disapprove of any
sublicensee/subcontractor; provided, however, that, Allergan hereby gives
its written consent to the use of the following manufacturers as subcontractors pursuant to
the terms of the contracts set forth on Schedule 3.3(b) (such contracts, the “Spectrum
Manufacturing Agreements”). Within a reasonable time after the Effective Date, Spectrum
will use commercially reasonable efforts to amend the Spectrum Manufacturing Agreements so
that such agreements are assignable to Allergan (without






18









 











further consent of a Third Party), provide Allergan with the same audit and inspection
rights as those set forth herein, ensure that the quality standards of such agreements are
no less stringent than those determined by the JSC pursuant to Section 3.3(d) below, and
ensure that such sublicensee/subcontractor complies with all applicable regulatory
obligations and applicable Law;




     (ii) Spectrum will supervise each sublicensee/subcontractor’s performance of the
services and compliance with the terms of this Agreement;




     (iii) All fees, costs, and other expenses relating to each sublicensee/subcontractor
shall be deemed Development Costs as set forth in the JDP prior to the First Commercial Sale
of the Licensed Product in the Field of Use, and after the First Commercial Sale of the
Licensed Product in the Field of Use shall be set forth in the supply agreement, and both
shall be calculated without any surcharge for any sublicensee/subcontractor fees;




     (iv) Spectrum must enter into a written agreement with each sublicensee/subcontractor
engaged by Spectrum after the Effective Date obligating such sublicensee/subcontractor to
comply with Spectrum’s obligations under the applicable terms of this Agreement, including
the quality standards determined by the JSC pursuant to Section 3.3(d), and that the
sublicensee/subcontractor will comply with all applicable regulatory obligations. Each such
agreement shall be at least as protective of Allergan’s rights as the terms and conditions
of this Agreement, and subordinate thereto. Spectrum shall require that Allergan be a third
party beneficiary to each such agreement, and that all such agreements be assignable to
Allergan. Spectrum shall provide Allergan with a copy of each executed agreement with each
sublicensee/subcontractor permitted hereunder;




     (v) Spectrum will not retain (even if approved by Allergan) any
sublicensee/subcontractor in any country where doing so would violate any applicable Laws,
including due to embargoes or other restrictions;




     (vi) Spectrum acknowledges and agrees that, except and to the extent that Allergan
assumes Spectrum’s manufacture obligations under Section 3.3(f), Allergan has no obligations
under this Agreement to any such sublicensee/subcontractor and no sublicensee/subcontractor
has any rights or remedies against Allergan hereunder (except where such agreements are
assigned to Allergan hereunder); and




     (vii) Allergan has the right but not the obligation to directly pay the
sublicensee/subcontractor for any manufacturing and supply services it performs on
Spectrum’s behalf and to include the amount of such payment in the calculation of
Development Costs under this Agreement prior to the First Commercial Sale of the Licensed
Product in the Field of Use or as covered in the supply agreement after the First Commercial
Sale of the Licensed Product in the Field of Use.






19









 










     (c) Allergan Cooperation. Allergan acknowledges that Spectrum does not possess manufacturing
facilities and that Spectrum’s ability to perform its obligations under this Section 3.3 depends on
the timely engagement of manufacturing subcontractors which Spectrum is obligated to engage
hereunder. Allergan agrees to cooperate with Spectrum in the establishment of a commercial supply
chain for the Licensed Product in the Field of Use in the Allergan Territory and agrees not to
unreasonably withhold, condition or delay its consent to the selection of subcontractors or the
approval of contracts.



     (d) Specifications; Additional Terms. The current specifications for the drug substance, drug
product and diluent of the Licensed Product (“Specifications”) are attached hereto as Schedule
3.3(d). Subject to Section 4.6(b), Schedule 3.3(d) can only be amended by written agreement of the
Parties. The Parties acknowledge that the Specifications will be updated and finalized by the
Parties as part of the Regulatory Approval in the Co-Promotion Region and the EU. If and to the
extent that Spectrum ships any Licensed Product to Allergan, each shipment shall be in accordance
with Allergan’s written instructions and applicable Laws governing the shipment, labeling and
packaging of such Licensed Product. Prior to the production of Licensed Product under this
Agreement, the Joint Supply Committee shall determine the quality standards applicable to the
manufacture of the Licensed Product. At least two (2) years prior to the Anticipated Approval
Date, the Parties shall negotiate in good faith, and enter into, a separate written supply
agreement which will provide for the manufacture and supply of the Licensed Product in the Field of
Use on terms mutually acceptable to the Parties. The supply agreement between the Parties shall
contain:




     (i) terms consistent with provisions customarily found in agreements for the
manufacture and supply of commercial quantities of products of a similar nature, including
provisions relating to timing and size of production orders, shipping, certificates on
delivery, risk of loss, inspection and acceptance, timing of invoices and payments, failure
to supply, remedies for breach of representations and warranties;




     (ii) the transfer price for all such Licensed Product, which shall be the actual cost
of manufacturing, which shall include the actual charges from Third Parties for testing,
packaging, freight, insurance and exporting the Licensed Product, but excluding any of
Spectrum’s overhead or general and administrative costs;




     (iii) the representations and warranties set forth in Section 11.11 for the commercial
supply of Licensed Product in the Field of Use (unless the Parties mutually agree to modify
such provisions); and




     (iv) the indemnification and disclaimers and limitations on liability as set forth in
Article 12 for the commercial supply of Licensed Product in the Field of Use (unless the
Parties mutually agree to modify such provisions).



     (e) Supply Agreement Mediation. The Parties acknowledge that timely negotiation of a
mutually-agreeable supply agreement will be critical to the ability to launch the Licensed






20









 









Product. If at any time more than ninety (90) days after the commencement of negotiation of such
agreement, either Party believes such negotiations have reached an impasse, such Party may by
written notice to the other Party cause a meeting of the Vice President of Global Technical
Operations of Allergan and the Chief Executive Officer of Spectrum to seek to resolve such impasse.
Such meeting shall be held within twenty (20) days following such written notice. If, following
such meeting of senior executives, either Party believes an impasse still exists, then such Party
may by written notice cause the Parties to engage in a non-binding mediation of their differences
over the proposed agreement. Unless the Parties otherwise agree at the time, such mediation,
including the selection of the mediator, shall be conducted in accordance with the rules of the
American Arbitration Association. The fees and costs of the mediator shall be borne equally by the
Parties, regardless of the outcome of the mediation. If the Parties cannot agree through mediation
to the terms of the supply agreement, then Spectrum will enable Allergan by assigning the Spectrum
Manufacturing Agreements to Allergan in addition to transferring to Allergan the validated process
for manufacturing and the other items set forth in subsection (f) below.




     (f) Right to Terminate. Allergan may terminate Spectrum’s responsibility to have manufactured
and supplied Licensed Product to Allergan for sale in the Allergan Territory under this Agreement
at any time with prior written notice. Such termination shall be effective thirty (30) days after
delivery of the notice, or such later date, at Allergan’s sole discretion, as necessary to complete
transition to another manufacturer or to Allergan. Termination of Spectrum’s manufacture and
supply obligation shall not relieve the Parties of any amounts owing between them. On termination
of Spectrum’s manufacture and supply obligation, Spectrum shall provide to Allergan a copy of all
of the then-current Know How Controlled by Spectrum necessary or useful for the manufacture of the
Licensed Product in the Field of Use, shall make its manufacturing personnel available for
reasonable consultation with Allergan regarding the processes for Licensed Product manufacture, and
shall provide all other technical transfers of all parts of the validated process for the Licensed
Product in the Field of Use, including Documents and other regulatory items. Subject to the terms
of the Spectrum Manufacturing Agreements, Spectrum shall assign to Allergan, and Allergan shall
assume responsibility under, all of Spectrum’s supply subcontracts for the Licensed Product
applicable to the Field of Use. The Parties shall negotiate in good faith the transition of
Spectrum’s sourcing of Licensed Product from such Third Party (for example, bifurcating the supply
agreement). After termination of Spectrum’s manufacturing and supply obligations as set forth
herein, Allergan shall be
responsible for all supply and manufacture of Licensed Product in the Field of Use in the
Allergan Territory, including fulfilling such subcontract agreements from the applicable date of
assignment. After Allergan terminates Spectrum’s manufacturing rights and responsibilities under
this Section 3.3(f), to the extent that such rights and responsibilities are transferred to
Allergan, Spectrum shall have no further performance obligation under this Section 3.3, and
Allergan shall thereafter be responsible for compliance with the product quality representations
set forth in Section 11.11 for Licensed Product manufactured for sale in the Co-Promotion Region,
with any costs of non-compliance with such representations to be borne by Allergan and not included
within allowable expenses.





21









 










     3.4 Commercialization Rights and Obligations.



     (a) Rights. Allergan shall have the sole right to commercialize the Licensed Product in the
Field of Use in the Allergan Territory, except as set forth herein and in the co-promotion
agreement (“Co-Promotion Agreement”) identical to the form attached as Schedule 3.4(a) and entered
into by the Parties on the Effective Date. During the term of the Co-Promotion Agreement, the
commercialization of the Licensed Product in the Field of Use in the Co-Promotion Region shall be
the Parties’ joint right and responsibility and shall be subject to the oversight of the Joint
Marketing Committee (“JMC”) and pursuant to the JMP as described in Section 3.4(b) below.



     (b) Co-Promotion Region; Joint Marketing Plan. The strategy for the commercialization of the
Licensed Product in the Field of Use in the Co-Promotion Region during the term of the Co-Promotion
Agreement shall be described in a comprehensive plan that describes the pre-launch, launch and
subsequent commercialization activities (including advertising, education, planning, marketing,
sales force training and allocation) (the “Joint Marketing Plan” or “JMP”), as follows:




     (i) An initial JMP setting forth the Parties’ agreement on the pre-launch commercial
planning activities and the budgeting relating thereto for the Licensed Product in the Field
of Use in the Co-Promotion Region, is attached to this Agreement as Schedule 3.4(b)(i). At
least twelve (12) months prior to the Anticipated Approval Date, the Parties shall finalize
the portion of the initial JMP setting forth the launch activities for the Licensed Product
in the Field of Use in the Co-Promotion Region and the budget relating thereto, and develop
and finalize a follow-on JMP that governs the post-launch activities for the Licensed
Product in the Field of Use in the Co-Promotion Region, as well as the budget relating
thereto, and such JMP shall be subject to the approval of the JMC.




     (ii) Following the launch of the Licensed Product, on or before November 1 of each
Fiscal Year during the Term of this Agreement, the Parties shall create an updated JMP
detailing activities for the following Fiscal Year. The initial JMP and follow-on JMPs
shall generally conform to the level of detail utilized by Allergan in preparation of its
own product commercialization plans, with the overall objectives of maximizing the economic
value of the Licensed Product in the Field of Use in the Co-Promotion Region and of
providing Spectrum a meaningful role in the commercialization of the Licensed Product in the
Field of Use in the Co-Promotion Region. The JMP shall be deemed Confidential Information
of both Parties, and each Party shall use the JMP for the sole purpose of performing or
monitoring commercialization activities for the Licensed Product in the Field of Use in the
Co-Promotion Region. From time to time as reasonably necessary during the term of
commercialization of the Licensed Product in the Field of Use in the Co-Promotion Region,
the JMC may update the JMP.





22









 











     (iii) During the term of the Co-Promotion Agreement, except as set forth in Section
6.14, all costs and expenses incurred by the Parties and specifically set forth in the JMP
shall be deemed allowable expenses and included in the calculation of product profits and
losses under the Co-Promotion Agreement.




     (iv) Notwithstanding anything to the contrary in this Agreement, or any provision
granting final decision making authority to any Party on a particular matter under this
Agreement, during the pre-launch phase any change in the initial JMP that would result in an
increase of the total pre-launch budget for the Licensed Product in the Field of Use in the
Co-Promotion Region by more than ten percent (10%) as compared to the total pre-launch
budget for the Licensed Product in the Field of Use in the Co-Promotion Region set forth in
the JMP as of the Effective Date, shall in each case be subject to the Parties’ mutual
written agreement.



     (c) Performance Obligation.




     (i) Allergan shall file for Regulatory Approval for the Licensed Product for the
Initial Indication in the Field of Use in the EU within **** of the date on which filings
for Regulatory Approval for the Licensed Product for the Initial Indication in the Field of
Use have been made in the Co-Promotion Region, provided, however, that the
applicable clinical data is timely delivered to Allergan by Spectrum. No such failure is a
material breach of this Agreement. If Allergan fails to do so, then, upon Spectrum’s
written request, Allergan and Spectrum shall meet to discuss future activities relating to
the Licensed Product for the Initial Indication in the Field of Use in the EU.




     (ii) Allergan shall use efforts consistent with the efforts used by Allergan to launch
other Allergan prescription products to launch the Licensed Product in the Field of Use (A)
in the Co-Promotion Region within **** after the date on which Regulatory Approval for the
Licensed Product in the Field of Use has been obtained in the Co-Promotion Region; and (B)
in the EU (an EU launch being defined as a launch in at least two (2) of the major countries
which are members of the EU) within **** after the date on which Regulatory Approval for the
Licensed Product in the Field of Use has been obtained in such countries, provided,
however, that such **** periods of time shall be tolled by any periods of time in
which the Regulatory Approval in the respective territory has been revoked or such launches
are delayed for reasons beyond the reasonable control of Allergan.




     (iii) If Allergan materially breaches Section 3.4(c)(ii), Spectrum may terminate
Allergan’s license to Licensed Product in the affected territory (either the Co-Promotion
Region and/or the EU, as the case may be) with written notice to Allergan within thirty (30)
days of the applicable failure, and in such cases Allergan shall cooperate in the transfer
to Spectrum of the Licensed Product rights in such territory(ies). Such transfer of product
rights shall be effected by means of removing the U.S. and/or the EU (as the case may be)
from the Allergan Territory and adding it to the Spectrum Territory, and





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




23









 











otherwise proceeding with respect to such transferred territory as if there had been a
termination by will by Allergan under Section 13.2.



     (d) Additional Performance Obligations.




     (i) Each Party shall conduct its activities under the JMP and this Agreement in
compliance in all material respects with all applicable Laws (including the Foreign Corrupt
Practices Act of 1977, as amended, and laws applicable to the sale and promotion of
pharmaceutical products) and in accordance with the following provisions:




     (A) as between the Parties, Allergan shall be responsible for receiving and
filling orders, controlling invoicing, collecting payments, returns, charge-backs
and rebates on sales of the Licensed Product in the Field of Use in the Allergan
Territory, and shall have sole control over distribution of the Licensed Product in
the Field of Use in the Allergan Territory, in each case including the Licensed
Product under co-promotion by the Parties in the Field of Use in the Co-Promotion
Region. If Spectrum receives any order for the Licensed Product for the Field of
Use in the Allergan Territory, it shall promptly refer such orders to Allergan. If
Allergan receives any order for the Licensed Product for sale in the Spectrum
Territory, it shall promptly refer such orders to Spectrum; and




     (B) each Party shall regularly update the JMC regarding the progress and
results of all commercialization activities for the Licensed Product in the Field of
Use. Once each Fiscal Year, during the term of the Co-Promotion Agreement, the
Parties shall meet by phone or in person to discuss the commercialization plans and
strategies of both Parties relating to the Licensed Product in the Field of Use in
the Allergan Territory; provided, however, that the Parties shall
not share competitively sensitive information (such as pricing or business plans)
for their own products that are not the Licensed Product in the Field of Use.



ARTICLE 4

COMMITTEES




     4.1 Generally. The Parties shall form three (3) committees, as described in this Article
4, to assist in the overseeing of, and making recommendations and decisions for, the development,
regulatory approvals, supply, marketing and commercialization of the Licensed Product in the Field
of Use in the Allergan Territory. The committees may exist simultaneously, and may be dissolved
over time, as their functions are completed. None of the committees shall have any power to amend
this Agreement or bind or incur liability on behalf of either Party without both Parties’ express
prior written authorization. Each Party shall comply with the decisions of the applicable
committee, to the extent such decisions fall within the applicable committee’s role and their
delineated powers and responsibilities, except in areas where such Party has sole responsibility
for performance as set forth herein.




24











 





     4.2 Governance of Each Committee. Each committee described in this Article 4 shall
be comprised of four (4) voting members (each a “Member”). Each Party shall have the right to
appoint two (2) Members to each committee (each a “Member Designee”). The following shall apply to
each committee and their Members:



     (a) each Party may remove any of its Member Designees for any reason at any time upon written
notice to the other Party, and a replacement may be appointed by such Party to fill such vacancy;



     (b) each committee shall meet at least once each Fiscal Quarter and as otherwise agreed upon
by the Parties;



     (c) the presence of at least one (1) Spectrum Member Designee and one (1) Allergan Member
Designee for that committee shall be required to constitute a quorum at any meeting of such
committee. No business shall be transacted at any meeting of a committee unless a quorum of such
committee’s Members is present at the time when the meeting proceeds to business;



     (d) in addition to Member Designees, each Party shall have the right to invite observers to
each meeting by providing the other Party with advance written notice of such observer(s);
provided, however, that such observer(s) may not attend such meeting if the other
Party reasonably objects to the requesting Party’s observer(s) prior to such meeting. Such
observers shall not have any voting rights and shall be bound by written obligations of
confidentiality and non-use, either by virtue of his/her employment by such Party or by a separate
written agreement;



     (e) meetings of each committee shall alternate between the offices of Spectrum and Allergan in
Irvine, California. At their election, the Parties may conduct any meeting of the committees by
telephone;



     (f) action items and resolutions of the committee meetings shall be kept, reviewed and
approved by the applicable committee Member Designees;



     (g) decisions of each committee shall be made by unanimous agreement of the applicable
committee’s Members, with each Party’s Member Designees having collectively one (1) vote, subject
to Section 4.6; and



     (h) each committee shall continue to exist until the first to occur of: (i) the Parties
mutually agreeing to disband the committee; or (ii) a Party providing to the other Party written
notice of its intention to disband and no longer participate in such committee. Once a Party has
provided the other Party written notice as referred to in subsection (ii) above, such committee
shall have no further obligations under this Agreement and the receiving Party shall have the right
to solely decide, without consultation, any matters previously before such committee, without
affecting either Party’s obligations hereunder.



     4.3 Joint Development Committee. Within ten (10) days of the Effective Date, the



25









 









Parties shall establish a Joint Development Committee (“JDC”). The JDC’s sole role shall be to
assist in the overseeing of and in the making decisions for the development of, clinical trials
for, and preparation and submission of regulatory documentation for obtaining Regulatory Approval
for the Licensed Product in the Field of Use for the Co-Promotion Region, EU and any other
country in the Allergan Territory where each Party contributes to the funding of
development/regulatory matters (“JDC Role”). In performing the JDC Role, the powers and
responsibilities of the JDC are limited to the matters set forth in this Section 4.3. The JDC
shall coordinate with the respective Party to meet its responsibilities hereunder. The JDC shall
be responsible for overseeing and making decisions regarding:




     (a) clinical activities and clinical and registration strategy including clinical trial
designs and registration plans to support the TPP for the Licensed Product in the Field of Use;



     (b) clinical data go/no-go decisions through the development and registration process;



     (c) pre-clinical and clinical development of Licensed Product in the Field of Use; and



     (d) other development of the Licensed Product in the Field of Use.



     4.4 Joint Supply Committee. Within ten (10) days of the Effective Date, the Parties
shall establish a Joint Supply Committee (“JSC”). The JSC’s sole role shall be to assist in the
overseeing of and in the making decisions for the manufacture and supply of Licensed Product in the
Field of Use, and monitoring continuing compliance with all regulatory requirements for the
manufacturing of the Licensed Product after receipt of the Regulatory Approval for the Licensed
Product in the EU and Co-Promotion Region (“JSC Role”). In performing the JSC Role, the powers and
responsibilities of the JSC are limited to the matters set forth in this Section 4.4. The JSC
shall coordinate with the respective Party to meet its responsibilities hereunder. The JSC shall
be responsible for overseeing and making decisions regarding:



     (a) the Chemistry, Manufacturing, and Control (“CMC”) processes required in developing the
Licensed Product in the Field of Use;



     (b) the clinical drug supply to meet requirements of the JDP;



     (c) developing a robust and validated supply process for both drug substance and Licensed
Product in the Field of Use;



     (d) ensuring final drug substance and Licensed Product in the Field of Use meet FDA and EMEA
standards;



     (e) ensuring the required reports, data, and other CMC information included in the US
Marketing Clearances filings and EU Marketing Clearances filings meet standards expected for final
regulatory approval and the timelines set forth in the JSP and the JDP;



     (f) ensuring a validated process for drug substance and drug manufacturing with




26









 









Allergan or
Spectrum’s Third Party commercial supplier(s) and the supply forecast meets the anticipated demand.
The JMP sets forth the pre-launch and pre-market marketing activities, as may be amended pursuant
to the Co-Promotion Agreement; and




     (g) ensuring the final packaging configurations for Licensed Product in the Field of Use for
commercial launch in the Co-Promotion Region and the EU is the Closed-System
Packaging configuration.



     4.5 Joint Marketing Committee. Within ten (10) days of the Effective Date, the
Parties shall form a JMC to assist in recommendations and decision-making for the pre-marketing and
commercialization planning of the Licensed Product in the Field of Use in the Co-Promotion Region.
The JMC’s sole role shall be to assist in the overseeing of and in the making decisions for the
marketing, promotion, calling and detailing of Licensed Product in the Field of Use within the
Co-Promotion Region (“JMC Role”). In performing the JMC Role, the powers and responsibilities of
the JMC are limited to the matters set forth in this Section 4.5. The JMC shall coordinate with
the respective Party to meet its responsibilities hereunder. The JMC shall be dissolved
automatically on termination of the Co-Promotion Agreement. The JMC shall be responsible for
overseeing and making decisions regarding:



     (a) assisting the JDC in the prioritization of Phase IV trials of the Licensed Product in the
Field of Use;



     (b) overseeing marketing activities for the Licensed Product in the Field of Use in the
Co-Promotion Region and making decisions regarding the promotion plan for pre-launch, launch and
post-launch activities in the Co-Promotion Region;



     (c) developing a calling plan, including an allocation of sales force efforts by Spectrum and
Allergan in the Co-Promotion Region and also including the development of primary detail equivalent
targets for each Party;



     (d) reviewing the overall performance and effectiveness of the marketing groups and sales
force and the actual results of the promotion of the Licensed Product in the Field of Use in the
Co-Promotion Region;



     (e) reviewing and making other decisions related to pre-launch, launch and post-launch
marketing activities of the Licensed Product in the Field of Use in the Co-Promotion Region as they
may arise; and



     (f) updating the JMP on a quarterly basis, including updating the JMP with the timeline and
forecast for the Licensed Product in the Field of Use when the primary market information for the
Co-Promotion Region is complete and upon filing for the Initial Indication.



     4.6 Escalation Procedure. In the event that a committee cannot agree on matters
falling within the scope of its JDC Role, JSC Role, or JMC Role, as applicable, and its powers and
responsibilities as set forth in Sections 4.3, 4.4 and 4.5, respectively, (whether due to
failure





27









 









to agree or failure to have a quorum present at a designated meeting time), then
the Chief Executive Officer of Spectrum (or a designee thereof) shall meet with the Executive Vice
President, Research & Development of Allergan (or a designee thereof for research and development
matters) or the Corporate Vice President for Global Strategic Marketing (or a designee thereof for
commercial matters) at an agreed location or by telephone to resolve the disagreement within twenty
(20) days of the meeting at which such disagreement occurred. If such officers of the Parties (or
their designees) are unable to resolve the disagreement within an additional thirty (30) day period
then:




     (a) in the case of a dispute of the JDC, Spectrum shall have final approval rights over the
matter at dispute and shall promptly provide written notice to Allergan of its reasonable final
position regarding the matter at issue; provided, however, that Allergan shall have
final approval rights over the clinical trials, and the portions of the JDP related thereto,
covered by Sections 3.2(b), (c) and (d), and the regulatory filings and negotiations as described
in Sections 5.1(a)(iii) and (v), and the Parties shall mutually agree on the JDP amendments
described in Section 3.2(e). The Parties shall comply with the position taken by the Party with
final approval rights on such issue. Notwithstanding the foregoing, if (i) ****, (ii) the
Co-Promotion Agreement is terminated (other than by Spectrum opting out of it as permitted
therein), or (iii) the Co-Promotion Agreement terminates by reason of Spectrum’s decision to opt
out under such agreement and the 611 Study, 612 Study and BCG Refractory Study have been concluded,
then the Parties shall comply with the position taken by Allergan on such issue (including over the
items in Section 3.2(e)(iii),(iv), and (vi));



     (b) In the case of a dispute of the JSC, Spectrum shall have final approval rights over the
matter at dispute and shall promptly provide written notice to Allergan of its reasonable final
position regarding the matter at issue. The Parties shall comply with the position taken by
Spectrum on such issue. Notwithstanding the foregoing, if ****, or if Allergan terminates its
supply agreement with Spectrum pursuant to Section 3.3(f), the Parties shall comply with the
position taken by Allergan on such issue (including over the items in Section 3.2(e) (iii), (iv),
and (vi)). Notwithstanding Allergan’s final approval rights set forth in the preceding sentence,
Spectrum shall have the final decision making authority as to the manufacturing process for the
Final Licensed Product, the CMC section for the Final Licensed Product, the formulation of the
Final Licensed Product, and the design of the Closed-System Packaging (as long as all such items
are in compliance with the JSP, Specifications, Closed-System Packaging and the TPP for the
Licensed Product in the Field of Use as of the Effective Date);



     (c) in the case of a dispute of the JMC, Allergan shall have final approval rights over the
matter at dispute and shall promptly provide written notice to Spectrum of its reasonable final
position regarding the matter at issue. The Parties shall comply with the position taken by
Allergan on such issue; and



     (d) in the event the provisions of this Article 4 do not provide, and the Parties cannot agree
on, which of the JDC, JSC and JMC has control over an item for resolution, Allergan shall have
final approval over which committee controls or whether such item falls within the scope of





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




28









 









any
committee; provided, however, such authorization does not alter the approval rights
set forth in subsections (a), (b) and (c) or allow Allergan to modify the responsibilities of each
committee as set forth in Sections 4.3, 4.4 and 4.5.




ARTICLE 5

REGULATORY MATTERS




     5.1 Obligations of the Parties Relating to Regulatory Submissions.



     (a) Co-Promotion Region. The following terms shall apply for the period commencing on the
Effective Date and ending on the earlier of (i) the occurrence of a Development Trigger or Change
in Control Trigger that results in Allergan delivering notice
under Section 10.1(c) or 10.2(a), and (ii) termination of this Agreement:




     (i) Spectrum shall own all regulatory filings relating to the Licensed Product in the
Field of Use in the Co-Promotion Region;




     (ii) Spectrum hereby appoints Allergan as its exclusive (even as to Spectrum)
authorized agent for all regulatory activities relating to the Licensed Product in the Field
of Use in the Co-Promotion Region, including filing, obtaining and maintaining Regulatory
Approvals and authorizations, except for Spectrum’s role in preparing regulatory submissions
expressly set forth in this Section 5.1(a). In order to perfect the foregoing appointment,
Spectrum irrevocably appoints Allergan as Spectrum’s attorney in fact for the purpose of
acting as authorized agent, including executing documents. Allergan shall be the sole point
of contact with regulatory agencies in the Co-Promotion Region in all matters relating to
the Licensed Product in the Field of Use both before and after any Licensed Product in the
Field of Use receives Regulatory Approval for sales;




     (iii) Spectrum shall prepare all regulatory submissions relating to the Licensed
Product in the Field of Use in the Co-Promotion Region in the eCTD format. Spectrum shall
provide Allergan with draft copies of all submissions to regulatory agencies for Allergan’s
feedback, including a draft copy of each module of the eCTD form as each module is being
created and the completed modules. In addition, Spectrum shall provide to Allergan copies
of all final submissions to regulatory agencies which relate to the Licensed Product in the
Field of Use in the Co-Promotion Region reasonably in advance of the applicable filing
deadline. If Allergan has not filed such filings with the applicable regulatory agencies by
the applicable filing deadline, then Spectrum may send such final submissions to the
relevant regulatory agency with prior written notice to Allergan;




     (iv) Each Party shall provide the other Party with copies of any correspondence
received from regulatory agencies relating to the Licensed Product in the Field of Use in
the Co-Promotion Region within ten (10) days of receipt, and shall provide the other Party
with written notice of any other contact by regulatory agencies






29









 











relating to the Licensed
Product in the Field of Use in the Co-Promotion Region within ten (10) days of such contact;




     (v) Allergan shall conduct all negotiations with regulatory agencies in the
Co-Promotion Region relating to the Licensed Product in the Field of Use, and shall
determine and have final decision making on all regulatory negotiations in the Co-Promotion
Region relating to the Licensed Product in the Field of Use, provided that Allergan shall
use commercially reasonable efforts to schedule such negotiations or any other meetings or
teleconferences with regulatory agencies to allow Spectrum to participate. Allergan shall
provide copies of all materials relating thereto to Spectrum and shall advise Spectrum of,
and Spectrum may provide input relating to, all planned regulatory activities and exchanges
with regulatory authorities for Licensed Product in the Field of Use within the Co-Promotion
Region. Both Parties shall participate in all planned meetings and conference calls with
regulatory agencies relating to the Licensed Product in the Field of Use in the Co-Promotion
Region. If either Party is unable to
participate in such a meeting or conference call, then the other Party shall provide a
written summary of the discussion within thirty (30) days;




     (vi) The regulatory filing fees in the Co-Promotion Region shall be deemed Development
Costs and shared by the Parties pursuant to Section 6.6; and




     (vii) Allergan shall not be responsible or liable for any Spectrum taxes assessed by a
Government Authority as a result of Allergan’s appointment and actions under Section 5.1.



     (b) Royalty Territory.




     (i) Allergan shall own all regulatory filings relating to the Licensed Product in the
Field of Use in the Royalty Territory;




     (ii) Except to the extent set forth in Section 3.4(c), Allergan shall have the
responsibility but not the obligation, at its sole expense and with the reasonable
assistance of Spectrum, for all regulatory activities relating to the Licensed Product in
the Field of Use within the Royalty Territory, including preparing, obtaining and
maintaining Regulatory Approvals and authorizations. Allergan shall determine, in its sole
discretion, the content of all such submissions and of all correspondence with regulatory
agencies relating to such Licensed Product in the Field of Use; and




     (iii) The regulatory filing fees for the Licensed Product in the Field of Use for the
Royalty Territory shall be borne solely by Allergan.



     (c) NCE Exclusivity. Each Party shall deliver written notice to the other Party of any ANDA
or other foreign equivalent filings it receives for generic equivalents or competitors to the
Licensed Product in the Field of Use in the Allergan Territory within ten (10) days of receipt or
notice of such filings. The Parties shall have the rights to respond to each such ANDA or other





30









 









foreign equivalent filings pursuant to the procedures set forth in Section 8.3(c).




     5.2 Information Sharing. This Section 5.2 shall not apply to any pharmacovigilance
data (which is addressed in Section 5.5). Each Party shall provide the other Party with copies of
all final submissions and correspondence to and from all regulatory agencies relating to the
Licensed Product in the Field of Use within ten (10) days of submission or receipt, as applicable.
Each Party shall permit the other Party to access, and shall provide the other Party with rights to
reference and use in association with the Licensed Product in the Field of Use, all of its, its
Affiliates’, and its or their sublicensees’ regulatory, preclinical and clinical data
documentation, regulatory filings, and Regulatory Approvals with respect to the Licensed Product in
the Field of Use. A Party shall be entitled to provide such data to its Affiliates and
sublicensees pursuant to Section 9.1.



     5.3 Remedial Actions. Each Party will notify the other Party immediately, and
promptly confirm such notice in writing, if it obtains information indicating that any Licensed
Product in the Field of Use may be subject to a Remedial Action. A “Remedial Action” is any
recall, corrective action or other regulatory action taken by virtue of applicable Law. The
Parties will assist each other in gathering and evaluating such information as is required to
determine the
necessity of conducting a Remedial Action with respect to a Licensed Product in the Field of
Use; provided, however, that Allergan shall have sole responsibility for collecting information
from its customers in the Allergan Territory, including customer complaints. Each Party will
maintain adequate records to permit the Parties to trace the manufacture of the Licensed Product in
the Field of Use and the distribution and use of the Licensed Product in the Field of Use. In the
event Allergan determines that any Remedial Action with respect to the Licensed Product in the
Field of Use in the Allergan Territory should be commenced or Remedial Action is required by any
Governmental Authority having jurisdiction over the matter, Allergan will control and coordinate
all efforts necessary to conduct such Remedial Action. In the event that (a) Spectrum determines
that any Remedial Action with respect to the Licensed Product outside the Field of Use in the
Allergan Territory or Licensed Product in the Spectrum Territory should be commenced, or (b)
Remedial Action is required by any Governmental Authority having jurisdiction over the matter,
Spectrum will control and coordinate all efforts necessary to conduct such Remedial Action.



     5.4 Costs Of Remedial Action. The cost and expense of a Remedial Action (including
the Parties’ reasonable costs and expenses in conducting such Remedial Action, but excluding Third
Party Claims, which are addressed in Article 12) shall be allocated as follows:



     (a) if and to the extent that such Remedial Action is due to (i) Allergan’s gross negligence
or willful misconduct, (ii) Allergan’s material breach of this Agreement, or (iii) Allergan’s
material breach of or substantial noncompliance with any Law, but only to the extent such Remedial
Action is due to the foregoing (i) — (iii), such costs and expenses shall be borne and paid by
Allergan;



     (b) if and to the extent that such Remedial Action is due to (i) Spectrum’s gross







31









 









negligence
or willful misconduct, (ii) Spectrum’s material breach of this Agreement, or (iii) Spectrum’s
material breach of or substantial noncompliance with any Law, but only to the extent such Remedial
Action is due to the foregoing (i) — (iii), such costs and expenses shall be borne and paid by
Spectrum; and




     (c) if and to the extent that such Remedial Action is due to reasons other than as set forth
in Sections 5.4(a) and (b), then:




     (i) during any period when Spectrum is responsible for the manufacture and supply of
the Licensed Product in the Field of Use for Allergan and for all lots of Licensed Products
manufactured by Spectrum or its subcontractors for sale by Allergan in the Field of Use in
the Allergan Territory, the costs and expenses incurred by the Parties in connection with a
Remedial Action with respect to the Licensed Product in the Field of Use in the Allergan
Territory shall be borne and paid as follows: Allergan shall pay **** of such costs and
expenses, and Spectrum shall pay **** of such costs and expenses; and




     (ii) except for all lots of Licensed Products manufactured by Spectrum or its
subcontractors, commencing on the date on which Allergan assumes the responsibility for the
manufacture and supply of the Licensed Product for sale in the Field of Use in the Allergan
Territory: (A) during the term of the Co-Promotion Agreement in the Co-
Promotion Region, the costs and expenses incurred by the Parties in connection with a
Remedial Action with respect to Licensed Products in the Field of Use shall be borne and
paid as follows: Allergan shall pay **** of such costs and expenses, and Spectrum shall pay
**** of such costs and expenses; and (B) in the Royalty Territory, and the Co-Promotion
Region after termination of the Co-Promotion Agreement, the costs and expenses incurred by
the Parties in connection with a Remedial Action with respect to the Licensed Product in the
Field of Use shall be borne and paid as follows: Allergan shall pay **** of such costs and
expenses, and Spectrum shall pay **** of such costs and expenses.



     5.5 Pharmacovigilance or Adverse Event Reporting. Within sixty (60) days of the
Effective Date, the Parties shall enter into a pharmacovigilance or adverse event reporting
agreement.



     5.6 Notification of Complaints. Each Party shall (a) notify the other Party
immediately of any information concerning any complaint involving the possible failure of Licensed
Product in the Field of Use to meet any requirement of applicable Law, and any serious or
unexpected side effect, injury, toxicity or sensitivity reaction or any unexpected incidents
associated with the distribution of the Licensed Product in the Field of Use, whether or not
determined to be attributable to the Licensed Product in the Field of Use, and (b) with respect to
adverse events, comply with the provisions of Section 5.5 and the applicable agreements described
therein.





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




32









 










     5.7 Notification of Threatened Action. Each Party shall immediately notify the other
Party of any information it receives regarding any threatened or pending action, inspection or
communication by or from any Party, including, without limitation, a Governmental Authority which
may affect the safety or efficacy claims of the Licensed Product in the Field of Use or the
continued marketing of the Licensed Product relating to the Field of Use. Upon receipt of such
information, the Parties shall consult with each other in an effort to arrive at a mutually
acceptable procedure for taking appropriate action. The Parties shall allocate all costs and
expenses associated with taking such action as is described with regard to Remedial Actions in
Section 5.4.  



     5.8 Regulatory Inspections. Each Party shall use good faith efforts to obtain and
reveal to the other Party, all inspection reports for itself, its Affiliates, or for any of its
vendors, suppliers or other Third Parties by any Government Authority arising from an inspection of
the facilities where a Licensed Product for the Field of Use is manufactured, packaged or stored (a
“Facility Inspection”), and the progress and outcome of any Facility Inspection as it may relate to
the Licensed Product in the Field of Use. Upon receipt of notice of any Facility Inspection, the
receiving Party will promptly notify the other Party thereof and the receiving Party will provide
the other Party with the inspection report and any other relevant information available about the
progress and outcome of such inspection available to the receiving Party.



     5.9 Audits. Each Party and its duly authorized representatives shall have the right
to inspect all facilities utilized by the other Party or its subcontractors (including to the
extent provided in, and subject to, the Spectrum Manufacturing Agreements) in connection with the
development, manufacture, sale, storage or distribution of the Licensed Product for the Field of
Use, upon reasonable prior written notice during normal business hours to ensure compliance
with the terms and conditions of this Agreement, and compliance by both Parties, as applicable,
with industry standards and applicable Law with respect to Licensed Product for the Field of Use it
manufactures for itself. In the event of a disagreement between the Parties as to (a) whether a
material adverse defect exists with respect to a Licensed Product or (b) the outcome of a
particular audit, an independent, mutually agreed upon arbiter shall be selected by the Parties to
resolve the dispute. The cost of such arbiter shall be shared equally by the Parties. All audits
shall be conducted without any undue disruption to the business and operations of the audited
Party. Any Third Parties conducting such audits shall enter into confidentiality agreements with
the audited Party in a form reasonably suitable to the audited Party. Both Parties shall correct,
or cause the correction of, any deficiencies which are discovered by any such audit.



ARTICLE 6

PAYMENTS AND ROYALTIES




     6.1 Upfront Payment. Allergan shall pay to Spectrum the sum of Forty-One Million Five
Hundred Thousand Dollars ($41,500,000) within ten (10) days after the Effective Date (the “Upfront
Payment”), and such payment shall be non-refundable, non-creditable and non-returnable under any
circumstances; provided that the foregoing statement shall not be construed as a limitation to any
remedies available to Allergan for the breach by Spectrum of this








33









 









Agreement or the Co-Promotion
Agreement.




     6.2 Development Milestone Payments.



     (a) Subject to Section 6.2(b), Allergan shall pay to Spectrum additional amounts within thirty
(30) calendar days of the completion of certain development milestones, as set forth below:




     (i) a one time payment of **** upon Allergan’s receipt of written notice from Spectrum
of the completion of enrollment for the 611 Study and 612 Study, but only if such enrollment
is completed on or before ****;




     (ii) a one time payment of **** upon Allergan’s receipt of written notice from Spectrum
of the completion of enrollment for the BCG Refractory Study, but only if such enrollment is
completed on or before ****;




     (iii) a one time payment of **** upon Allergan’s receipt of written notice of
acceptance by the FDA of the first filing of an NDA in the Co-Promotion Region for Licensed
Product for use for the Initial Indication;




     (iv) a one time payment of **** upon Allergan’s receipt of written notice of acceptance
by the EMEA of the first filing of an MAA in the EU for Licensed Product for use for the
Initial Indication;




     (v) a one time payment of **** upon Allergan’s receipt of written notice of the first
approval by the FDA of an NDA in the Co-Promotion Region for Licensed Product for use for
the Initial Indication;




     (vi) a one time payment of **** upon Allergan’s receipt of written notice of the first
approval by the FDA of an sNDA in the Co-Promotion Region for Licensed Product for use for
the BCG Refractory Indication;




     (vii) a one time payment of **** upon Allergan’s receipt of written notice of the first
approval by the EMEA of an MAA for Licensed Product for use for the Initial Indication; and




     (viii) a one time payment of **** upon Allergan’s receipt of written notice of first
approval by the EMEA of an MAA or an equivalent of an sNDA for Licensed Product for use for
the BCG Refractory Indication.



     (b) In the event of a Development Trigger after which Allergan delivers notice to Spectrum
under Section 10.1, the development milestone payments not yet due at the date of delivery of
Allergan’s notice, shall be reduced by ****, provided, however that if such notice
is delivered under Sections 10.1(b) and (c), the development milestone payments not yet due at the
date of delivery of Allergan’s notice, shall instead be reduced by **** (each a “Standard





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




34









 









Development Trigger Reduction”). Further, in the case of a Development Trigger that also
constitutes an uncured material breach hereunder, Allergan shall have the right to seek all
available rights and remedies to it, under law or equity (including injunctive relief against such
breach or to enforce the right granted to Allergan hereunder, except the Standard Development
Trigger Reduction), for such material breach by Spectrum that is not cured as set forth in Section
13.3(a) hereof and the amount of milestone payments not yet paid to Spectrum as of such time under
Section 6.2(a) shall be reduced by **** (the “Material Breach Development Trigger Reduction”). The
Material Breach Development Trigger Reduction shall be a remedy in lieu of, but not in addition to,
the Standard Development Trigger Reduction remedy to Allergan. For clarity, the occurrence of a
Development Trigger alone shall not automatically invoke the Material Breach Development Trigger
Reduction, unless the event giving rise to such Development Trigger itself constitutes an uncured
material breach of Spectrum’s obligation hereunder that is not cured as set forth in Section
13.3(a) hereof. In addition, the express options set forth in this Agreement available to Allergan
in the event of a Development Trigger shall not be construed to limit Allergan’s other rights and
remedies in the event such occurrence of a Development Trigger also constitutes an uncured material
breach under this Agreement by Spectrum.




     6.3 Sales Milestone Payments.



     (a) Milestones. Subject to Sections 6.3(c) and 6.4(e), Allergan shall pay to Spectrum sales
milestone payments within sixty (60) days of the end of the Fiscal Quarter in which the following
milestones have been met:




     (i) a one time payment of **** for the first time in which Royalty-Bearing Net Sales of
all Royalty-Bearing Product sold in the Royalty Territory exceed **** in a given Fiscal
Year;




     (ii) a one time payment of **** for the first time in which Royalty-Bearing Net Sales
of all Royalty-Bearing Product sold in the Royalty Territory exceed **** in a given Fiscal
Year;




     (iii) a one time payment of **** for the first time in which Royalty-Bearing Net Sales
of all Royalty-Bearing Product sold in the Royalty Territory exceed **** in a given Fiscal
Year; and




     (iv) a one time payment of **** for the first time in which Royalty-Bearing Net Sales
of all Royalty-Bearing Product sold in the Royalty Territory exceed **** in a given Fiscal
Year.



     (b) Co-Promotion Region. Subject to Sections 6.3(c), 6.4(e) and 10.2(c), if the Co-Promotion
Agreement is terminated, then for sales of Royalty-Bearing Product sold in the Co-Promotion Region
following such termination of the Co-Promotion Agreement, Allergan shall pay to Spectrum additional
sales milestone payments within sixty (60) days of the end of the





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




35









 









Fiscal Quarter in which the
following milestones have been met:





     (i) a one time payment of **** for the first time in which Royalty-Bearing Net Sales of
all Royalty-Bearing Product sold in the Co-Promotion Region exceed **** in a given Fiscal
Year;




     (ii) a one time payment of **** for the first time in which Royalty-Bearing Net Sales
of all Royalty-Bearing Product sold in the Co-Promotion Region exceed **** in a given Fiscal
Year;




     (iii) a one time payment of **** for the first time in which Royalty-Bearing Net Sales
of all Royalty-Bearing Product sold in the Co-Promotion Region exceed **** in a given Fiscal
Year; and




     (iv) a one time payment of **** for the first time in which Royalty-Bearing Net Sales
of all Royalty-Bearing Product sold in the Co-Promotion Region exceed **** in a given Fiscal
Year.



     (c) Calculation. More than one sales milestone can be earned in any given Fiscal Year, but
each sales milestone can only be earned once.



     6.4 Running Royalties.



     (a) Base Rate for the Royalty Territory. During the Royalty Term, Allergan shall also pay to
Spectrum as earned royalties on sales of Royalty-Bearing Product in the Royalty Territory the
following royalty payments:




     (i) for the first **** of Royalty-Bearing Net Sales earned for Royalty-Bearing Product
sold in the Royalty Territory in a Fiscal Year, Allergan shall pay Spectrum a royalty at the
rate of **** of such Royalty-Bearing Net Sales;




     (ii) for the next **** of Royalty-Bearing Net Sales earned for Royalty-Bearing Product
sold in the Royalty Territory in the same Fiscal Year, Allergan shall pay Spectrum a royalty
at the rate of **** of such Royalty-Bearing Net Sales;




     (iii) for the next **** of Royalty-Bearing Net Sales earned for Royalty-Bearing Product
sold in the Royalty Territory in the same Fiscal Year, Allergan shall pay Spectrum a royalty
at the rate of **** of such Royalty-Bearing Net Sales; and




     (iv) for any additional Royalty-Bearing Net Sales earned for Royalty-Bearing Product
sold in the Royalty Territory in the same Fiscal Year, Allergan shall pay Spectrum a royalty
at the rate of **** of such Royalty-Bearing Net Sales.



     By way of example only, Schedule 6.4(a) provides an example of how the royalties will be
calculated.





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




36









 










     (b) Base Rate for the Co-Promotion Region. If the Co-Promotion Agreement is terminated
(subject to Section 10.2(c)), then for sales of Royalty-Bearing Product sold in the Co-Promotion
Region following such termination of the Co-Promotion Agreement, during the Royalty Term, Allergan
shall also pay to Spectrum as earned royalties on sales of Royalty-Bearing Product in the
Co-Promotion Region at the following royalty payments:




     (i) for the first **** of Royalty-Bearing Net Sales earned for the Royalty-Bearing
Product sold in the Co-Promotion Region in a Fiscal Year, Allergan shall pay Spectrum a
royalty at the rate of **** of such Royalty-Bearing Net Sales;




     (ii) for the next **** of Royalty-Bearing Net Sales earned for the Royalty-Bearing
Product sold in the Co-Promotion Region in the same Fiscal Year, Allergan shall pay Spectrum
a royalty at the rate of **** of such Royalty-Bearing Net Sales;




     (iii) for the next **** of Royalty-Bearing Net Sales earned for the Royalty-Bearing
Product sold in the Co-Promotion Region in the same Fiscal Year, Allergan shall pay Spectrum
a royalty at the rate of **** of such Royalty-Bearing Net Sales; and




     (iv) for any additional Royalty-Bearing Net Sales earned for Royalty-Bearing Product
sold in the Co-Promotion Region in the same Fiscal Year, Allergan shall pay Spectrum a
royalty at the rate of **** of such Royalty-Bearing Net Sales.



     (c) Calculations. Notwithstanding the terms of subsections (a) and (b) above:




     (i) no royalty payments shall be due for Royalty-Bearing Product which are sold and
returned as defective, unusable, rejected by a purchaser or for which neither Allergan nor
any of its Affiliates or its or their Sublicensees receives payment, and to the extent
royalties have already been paid prior to such circumstances being made apparent, Allergan
may credit such amounts previously paid against future royalties due;




     (ii) there shall only be a single payment of royalties at the amounts set forth in this
Section 6.4 to Spectrum payable on any sale of Royalty-Bearing Product, regardless of the
number of patent applications or patents which are involved; and




     (iii) no royalty payments shall be due for Royalty-Bearing Product which are used or
provided to others by Allergan, its Affiliates or its or their Sublicensees solely for
promotion (without consideration), research, conducting clinical trials, demonstration,
evaluation, testing or training purposes.



     (d) No Patent Protection. If any Royalty-Bearing Product is sold in a country in the Allergan
Territory in which (i) there is no Patent Protection, (ii) there is no Regulatory Exclusivity, and
(iii) a Generic Product exists, then the royalty rates set forth in Sections 6.4(a) and (b) for
such Royalty-Bearing Product shall be ****. “Generic Product” means, with respect to a
Royalty-Bearing Product in the Field of Use in a particular country in the Allergan Territory,
another pharmaceutical product that: (x) contains as an active ingredient Apaziquone;





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




37









 









and (y) is
approved for use in such country (pursuant to 21 U.S.C. 355(b)(2), an ANDA, a separate NDA,
compendia listing, other drug approval application or otherwise, including foreign equivalents of
the foregoing, as applicable). “Patent Protection” means, in the country of sale in the Allergan
Territory, that at least one of the claims of an issued and unexpired patent included within the
Licensed Intellectual Property which would be infringed by the sale of the Royalty-Bearing Product
in that country is in effect, and has not been revoked or held unenforceable or invalid by a final
decision of a court or other governmental agency of competent jurisdiction having authority over
said patent and that final decision is not appealed or unappealable (all claims are considered
valid until so adjudicated and during prosecution of a patent application containing such claims)
and is sufficient to prevent a Generic Product from being sold in such country. “Regulatory
Exclusivity” means market exclusivity granted by a Governmental Authority designed to prevent the
entry of Generic Product(s) onto the market in the Field of Use, including new chemical entity
exclusivity, new use or indication exclusivity, new formulation exclusivity, orphan drug
exclusivity, pediatric exclusivity and 180-day generic product exclusivity. The foregoing shall
not apply for sales in the Co-Promotion Region as long as the Co-Promotion Agreement is in effect.




     (e) Royalty Term. Allergan’s royalty obligations under Sections 6.4(a) and (b) shall commence
on the First Commercial Sale of a Royalty-Bearing Product and expire, on a country-by-country
basis, on the date which falls on the later of the following conditions (the “Royalty Term”):




     (i) the expiration or earlier invalidation of all of the: (A) patents in the Licensed
Intellectual Property issued as of the Effective Date claiming the composition of matter of,
the formulation of, or the method of making or using, Royalty-Bearing Product in the Field
of Use in such country; and (B) other patents in the Licensed Intellectual Property issued
after the Effective Date but prior to the **** anniversary of the First Commercial Sale of a
Royalty-Bearing Product in the Field of Use in the Co-Promotion Region which are: (I)
issued prior to entry of a Generic Product in the country; (II) of sufficient breadth to
block the entry of Generic Products in the country; and (III) claim the composition of
matter of, the formulation of, or the method of making or using, Licensed Product in the
Field of Use in such country (except for the Original Patent Rights, such patents covered by
this subsection are “Extension Patents”);




     (ii) the **** anniversary of the First Commercial Sale of such Royalty-Bearing Product
in the Field of Use in the Co-Promotion Region; or




     (iii) the expiration of all Regulatory Exclusivity covering such Royalty-Bearing
Product in the Field of Use in such country.



     After the expiration of the Royalty Term in a particular country, but only if Allergan has
fulfilled its payment obligations under this Article 6 in such country: (x) the licenses set forth
in Section 2.1 in such country shall be deemed fully-paid up, perpetual and royalty-free; (y)
Allergan may use such licenses in such country perpetually without additional royalties and





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




38









 









milestone payments due; and (z) such licenses in such country shall survive expiration or
termination of this Agreement regardless of cause.




     6.5 Royalty Payment Schedule. Within five (5) business days after the end of each
Fiscal Quarter during which a Royalty-Bearing Product in the Field of Use is sold by Allergan, its
Affiliates or its or their Sublicensees in the Royalty Territory, Allergan shall provide to
Spectrum the estimated royalty payment calculation for Spectrum to complete its quarterly
accounting close. Within forty-five (45) days after the end of each Fiscal Quarter during which a
Royalty-Bearing Product in the Field of Use is sold by Allergan, its Affiliates or its or their
Sublicensees in the Royalty Territory, Allergan shall deliver to Spectrum a detailed report, which
shall include at least: (a) the net quantity sold, total sales, total to net deducts, and
Royalty-Bearing Net Sales of Royalty-Bearing Product in the Field of Use for which royalties are
due hereunder that it has sold in the prior Fiscal Quarter; (b) the calculation in U.S. dollars of
royalty payments due hereunder with respect to such sales; and (c) the total due hereunder for such
Fiscal Quarter, including deduction for any offsets. Simultaneously with the delivery of each such
report, Allergan shall pay to Spectrum the amount specified in Section 6.5(c). Notwithstanding the
foregoing, to the extent that Royalty-Bearing Net Sales also include Sublicensee Net Sales of
Royalty-Bearing Product (including under Sections 6.3 and 6.4), Allergan shall have additional time
as reasonably necessary to provide Spectrum with the information relating to such Sublicensee Net
Sales of Royalty-Bearing Product in the foregoing report and payment or to determine whether the
sales milestones have been met and subsequently make payments therefor.



     6.6 Development Costs. Except as set forth in the Co-Promotion Agreement, commencing
with the Fiscal Quarter beginning January 1, 2009, and occurring each Fiscal Quarter thereafter, the Parties
agree to pay the Development Costs for the development and Regulatory Approval of the Licensed
Product in the Field of Use as follows: Allergan shall be responsible for sixty-five percent (65%)
of Development Costs incurred by Spectrum and Allergan in performing their obligations hereunder,
and Spectrum is responsible for thirty-five percent (35%) of the Development Costs incurred by
Spectrum and Allergan in performing their obligations hereunder. Within the first five (5)
business days of each Fiscal Quarter commencing on January 1, 2009, Allergan shall pay Spectrum quarterly in
advance Allergan’s share of the estimated Development Costs which Spectrum is estimated to incur
for such Fiscal Quarter (as set forth in the JDP). On a monthly basis the Parties agree to discuss
the Development Costs incurred in the previous month and review tracking of actual Development
Costs to estimated Development Costs. The Parties shall reconcile their respective applicable
Development Costs, and will deliver to the other Party, by the third business day after the new
Fiscal Quarter, the backup requested by such other Party to complete such other Party’s quarterly
accounting close. The estimate provided by each Party on the third business day shall be
materially correct as regards actual Development Costs incurred. Within thirty (30) days after
the end of each Fiscal Quarter, Allergan will
provide Spectrum with an invoice representing thirty-five percent (35%) of the Development
Costs incurred by Allegan during the previous Fiscal Quarter and Spectrum will process a payment to
Allergan within thirty (30) days following receipt of this invoice. Within thirty (30) days after
the end of each Fiscal Quarter, Spectrum shall perform a true-up to determine its






39









 









actual
Development Costs incurred during the previous Fiscal Quarter. If the true-up reflects actual
Development Costs incurred in excess of advances previously made by Allergan, Spectrum will provide
Allergan with an invoice representing the excess and Allergan will process a payment to Spectrum
within thirty (30) days following receipt of this invoice. If the true-up reflects actual
Development Costs incurred less than advances previously made by Allergan, Spectrum will reduce
their next quarterly advance from Allergan by the amount of the shortfall. Spectrum shall bear all
Development Costs for development of the Licensed Product incurred
prior to January 1, 2009. In the event of
a Development Trigger after which Allergan delivers notice to Spectrum under Section 10.1 for
Allergan to take over development, all of the Development Costs incurred by Allergan in performing
the development and Regulatory Approval services itself shall also be borne by the Parties in the
ratio(s) set forth in this Section 6.6.




     6.7 Currency of Payments. All payments under this Agreement will be made in U.S.
dollars by electronic funds transfer to such bank accounts as each Party may designate from time to
time, or by check. When Royalty-Bearing Product is sold for monies other than U.S. dollars, the
exchange rate shall be determined based on the average daily exchange rate calculated by averaging
the closing daily rate between the country in which the Royalty-Bearing Product was sold and the
U.S., as obtained from Bloomberg or equivalent successor (absent manifest error therein), on a
monthly basis during the Fiscal Quarter that Allergan records the sale for accounting purposes.



     6.8 Budget. Each Party shall spend the amount specified as required to be budgeted by
such Party for performance of their obligations hereunder, as set forth in the applicable JDP, JSP
and JMP. Each Party shall account for FTEs assigned to such Party under the JDP, pre-launch JMP or
JSP at the FTE Rate.



     6.9 Books; Records. During the Term and for three (3) years thereafter, the Parties
shall keep and maintain at their respective regular places of business complete and accurate books,
records and accounts in accordance with the U.S. Generally Accepted Accounting Principles, or other
accounting standards mandated by the U.S. Securities and Exchange Commission, in sufficient detail
to reflect all amounts required to be paid under this Agreement, as well as any other books,
records or accounts required to be maintained in connection with the Licensed Product under any
applicable Law. Prior to destroying any books, records or accounts which are material to the
Parties’ rights and obligations under this Agreement, a Party must seek prior written consent from
the other Party, which consent may not be unreasonably withheld.



     6.10 Audits. During the Term and for three (3) years thereafter, each Party
(including a firm of certified public accountants engaged for such purpose) shall have access to
and the right to examine such relevant records and accounts that the other Party is required to
maintain pursuant to Section 6.9 at such other Party’s premises for the sole purpose of verifying
the payments owing such Party hereunder; provided, however, that any such examination: (a) shall be
at the auditing Party’s expense; (b) shall be during normal business hours upon reasonable
prior written notice which shall in no event be less than five (5) business days; and (c)
shall not





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




40









 









unreasonably interfere with such other Party’s operations and activities. Neither Party
may re-audit the other Party’s records once audited. All information reviewed during any such
examination shall be treated as Confidential Information of the other Party. The audited Party
shall promptly pay the auditing Party any underpayment discovered in the course of such audit,
together with interest at the rate specified in Section 6.15 accrued from the date due until paid.
Notwithstanding subsection (a) above, if the audit uncovers an underpayment that is more than five
percent (5%) of the amount payable for the period subject to such audit, the audited Party shall
reimburse the auditing Party for its out-of-pocket expense of such audit.




     6.11 Offset. Either Party shall be entitled to offset from any payment due to the
other Party under this Agreement any amounts due from the other Party and/or its Affiliates which
such other Party fails to pay, including Indemnifiable Amounts (defined in Section 6.14 below).
In the event of any offset under this Section, the Party making such offset shall provide receipts
of payment of any withheld amounts or other Documents reasonably available to it in support of such
offset.



     6.12 Stacking.



     (a) If, in order to make or have made, use, conduct clinical trials for, sell, offer for sale,
have sold, import, export, or otherwise exploit a Final Licensed Product in the Allergan Territory,
it is necessary for Allergan to take a royalty-bearing license under Intellectual Property Rights
owned by a Third Party (excluding an Affiliate of Allergan), Allergan may deduct such amounts from
amounts due hereunder; provided, however, that Spectrum shall have the first right
to negotiate such Third Party license, provided that, if Spectrum does not obtain such license on a
timely basis in view of the timeline and circumstance of the development and/or commercialization
of the Licensed Product at such time, then Allergan shall have the right, upon ten (10) business
days prior written notice to Spectrum, to obtain such license itself under reasonable terms.



     (b) To the extent that subsection (a) does not apply, if the Parties obtain and/or maintain a
license under Intellectual Property Rights owned by a Third Party (excluding an Affiliate of
Allergan) in order to make, have made, use, conduct clinical trials for, sell, offer for sale, have
sold, import, export, or otherwise exploit the Licensed Product in the Field of Use in the Allergan
Territory, then, except as provided in Section 6.14, payments made to such Third Party in exchange
for the practice of such license by Allergan in the Allergan Territory shall be borne by Allergan,
provided, however, that Allergan may deduct **** of the royalty payments to such
Third Party from its payments due to Spectrum hereunder, including under the Co-Promotion
Agreement, provided that such payments shall not reduce the royalties due to Spectrum under Section
6.4 by more than ****.



     6.13 Withholding Taxes. Notwithstanding anything to the contrary herein, in the event
that withholding taxes apply with respect to any amounts due by Allergan hereunder, Allergan shall
be entitled to withhold from any payment due to Spectrum under this Agreement any taxes that
Allergan is required to pay and such withholding shall decrease by an equivalent amount the





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




41









 









payment
due to Spectrum. Allergan shall provide Spectrum with notification of any anticipated withholding
requirements with as much advance notice as practicable and shall cooperate in
good faith with Spectrum to legally minimize such withholding taxes. Allergan will timely pay
to the proper governmental authority the amount of any taxes withheld and will provide Spectrum
with an official tax certificate or other evidence of tax obligation, together with proof of
payment from the relevant governmental authority sufficient to enable Spectrum to claim such
payment of taxes.




     6.14 Spectrum’s Obligations. Spectrum shall be solely responsible for, and shall pay,
any royalties or other payments due under the ****, the **** or any other license to the Licensed
Intellectual Property existing as of the Effective Date. No royalties and other payments borne
exclusively by Spectrum under this Section 6.14 shall be considered as a cost or expense under any
JDP, JSP or JMP budget. Further, no Indemnifiable Amounts due under this Agreement shall be
considered as a cost or expense, as part of any JDP, JSP or JMP budget. “Indemnifiable Amounts”
as it is used herein means any amount payable to the other Party by way of an indemnification
clause under this Agreement or other indemnification.



     6.15 Late Payment. If a Party does not receive payment of any sum due to it on or
before the due date, simple interest shall thereafter accrue on the sum due to such Party from the
due date until the date of payment at a rate equal to LIBOR, as reported in the Wall Street
Journal, plus one percent (1%) or the maximum rate allowable by applicable law, whichever is less.



ARTICLE 7

TRADEMARK ASSIGNMENT




     7.1 Assignment. Spectrum hereby assigns all right, title, and interest in and to the
Acquired Trademarks, including the accompanying goodwill, pursuant to that certain trademark
assignment agreement between the Parties dated as of the Effective Date identical to the form
attached hereto as Schedule 7.1 (the “Trademark Assignment Agreement”). Allergan may, at its sole
discretion, rebrand and rename the Licensed Product in connection with Allergan’s marketing,
distribution and sale of the Licensed Product. Allergan shall be the sole and exclusive owner of
any such brand or name and all Trademarks therein.



     7.2 No Use by Spectrum. Except as provided in the Co-Promotion Agreement, Spectrum
shall make no use of the Acquired Trademarks, or any Trademark that includes any of the Acquired
Trademarks or is confusingly similar thereto, or any of Allergan’s or its Affiliates’ Trademarks,
on or in connection with any product or service anywhere in the world. Without limiting the
generality of the foregoing, Spectrum shall not use any Trademark that is the same as, or similar
to (so as to cause confusion in consumers), the Acquired Trademarks or any other Trademark used by
Allergan or its Affiliates to market the Licensed Product. The foregoing shall not be construed as
restricting Spectrum from making factual references to the Acquired Trademarks in its regulatory
filings or to satisfy its legal and regulatory obligations. Unless otherwise agreed to by the
Parties, within one hundred twenty (120) days after the Effective





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




42









 









Date, Spectrum shall cease using
the Acquired Trademarks and, thereafter, the JMC will shall have the authority to determine how the
Licensed Product shall be referenced.




ARTICLE 8

INTELLECTUAL PROPERTY




     8.1 Ownership. The Parties agree as follows:



     (a) subject to the licenses granted herein during the Term of this Agreement, Spectrum retains
ownership of all Spectrum Intellectual Property;



     (b) Allergan retains ownership of all Allergan Solely Developed Know How (subject to any
licenses agreed upon pursuant to Sections 2.4, 2.5 and/or 13.2(c)(i)); and



     (c) subject to the licenses granted herein during the Term of this Agreement, the Joint
Intellectual Property shall be owned jointly by the Parties in accordance with joint ownership
interests of co-inventors under United States patent and copyright laws, with each Party owning an
undivided half interest in such Joint Intellectual Property, with the right to exploit and license
such intellectual property without the duty of accounting to the other Party or seeking consent
from the other Party. For the purpose of determining inventorship under this Section 8.1(c),
inventorship shall be determined in accordance with United States patent and copyright laws.



     8.2 Prosecution.



     (a) Notice. Spectrum shall promptly notify Allergan in writing of the issuance of any patent
in the Licensed Intellectual Property.



     (b) Prosecution. Spectrum at its expense shall diligently prosecute and maintain the patents
and patent applications in the Licensed Intellectual Property (including in the Joint Intellectual
Property) using counsel of its choice, which counsel shall also be subject to the reasonable
approval of Allergan. Allergan and Spectrum shall consult in good faith with each other prior to
any filings or other actions before the U.S. Patent and Trademark Office and other offices with
respect to the patents and patent applications in the Licensed Intellectual Property (including the
Joint Intellectual Property), including any continuations, and the Parties shall jointly make all
decisions pertaining thereto. Allergan may request Spectrum to obtain patent protection for
Licensed Intellectual Property (including the Joint Intellectual Property) and, if so requested,
Spectrum shall cooperate and diligently file, prosecute and maintain such rights. Upon request,
Spectrum shall promptly provide Allergan and its counsel with copies of all relevant documentation
so that Allergan may be informed and apprised of the continuing prosecution of the patents and
patent applications in the Licensed Intellectual Property (including the Joint Intellectual
Property). In the event that Spectrum decides not to prosecute, or otherwise to abandon, a patent
or application therefor relating to the Licensed Intellectual Property (including the Joint
Intellectual Property) in a country in which it is required to do so, Spectrum shall send Allergan
written notice of said decision at least ninety (90) days in advance of the action or payment due
date. Allergan shall thereupon have the option to take over the patent or






43









 









application, and
Spectrum shall assign to Allergan all rights in such patent or application in such jurisdiction.
In the event that Allergan takes over the prosecution and maintenance of the applicable patents and
patent applications in the Licensed Intellectual Property (including the Joint Intellectual
Property), Allergan may deduct Spectrum’s share of the Patent Expenses (defined below) from any
amounts due hereunder, provided, however, that if Spectrum assigns such patent or application in
such jurisdiction to Allergan, then Allergan shall bear the Patent Expenses for such patent or
application at its sole expense.




     (c) Patent Expenses. “Patent Expenses” means the reasonable fees and expenses of outside
counsel and payments to Third Parties incurred after the Effective Date in connection with the
preparation, filing, prosecution and maintenance of patent applications and patents included in the
Licensed Intellectual Property (including the Joint Intellectual Property) that cover the Licensed
Product in the Field of Use in the Allergan Territory or its manufacture or use (including the
costs of patent interference and opposition proceedings). Except as set forth in subsection (b),
all Patent Expenses incurred for the protection of market exclusivity in the Allergan Territory
shall be ****. Spectrum shall deliver to Allergan within sixty (60) days of the end of the Fiscal
Quarter in which such Patent Expenses were incurred by Spectrum an accounting of all such Patent
Expenses. Allergan shall reimburse Spectrum for its undisputed share within thirty (30) days of
receipt thereof.



     (d) License Recordals. Should local counsel in a given country recommend that Allergan be
appointed as a licensee of Spectrum for the patents and patent applications in the Licensed
Intellectual Property (including the Joint Intellectual Property) and that such license be recorded
with the appropriate patent office, then Spectrum at its expense (subject to Section 8.2(c) above)
shall prepare and file the necessary documents subject to Allergan’s approval, which shall not be
unreasonably withheld or delayed.



     8.3 Enforcement.



     (a) Notice of Infringement. If either Party learns of the actual, suspected, threatened or
likely infringement or misappropriation of any of the Licensed Intellectual Property (including the
Joint Intellectual Property), then that Party shall give written notice thereof to the other Party
and shall provide the other Party with any evidence of such infringement or misappropriation in its
possession.



     (b) Pre-Issuance. Where the suspected or actual infringement or other suspected or actual
unauthorized use relates to the claims in a patent application in the Licensed Intellectual
Property (including the Joint Intellectual Property) in the Allergan Territory for which no patent
has yet been issued, Spectrum shall promptly give notice to the Third Party infringer of the
publication of the patent application.



     (c) Infringement by Third Parties in the Allergan Territory.





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




44









 











     (i) Allergan may, but shall be under no obligation to, unilaterally take, at its
expense, any court or administrative action to enforce any suspected or actual infringement
or other unauthorized use of the Licensed Intellectual Property (including the Joint
Intellectual Property and including responding to Paragraph IV patent certifications) in the
Allergan Territory. If Allergan takes such enforcement action, Spectrum may elect to join
as a party in that action at Spectrum’s expense, provided that if Allergan does not have
standing without Spectrum joining the action, Spectrum shall join the action at Allergan’s
expense and hereby consents to the exercise of personal jurisdiction by the relevant courts.




     (ii) If Allergan fails to commence enforcement of a court or administrative action
within ninety (90) days following the earlier of: (A) Allergan becoming aware of
such matter at the level of direct reports to the Chief Executive Officer of Allergan;
or (B) written request by Spectrum for Allergan to do so, then Spectrum may, but shall be
under no obligation to, in its own name, and at its own expense, commence any court or
administrative enforcement action Spectrum deems necessary. Notwithstanding the foregoing
sentence, if there is a deadline to take that court or administrative action, then, at least
one (1) week prior to such filing deadline, Allergan shall either commence such enforcement
action or give written notice to Spectrum that it has declined to do so. If Spectrum
commences such enforcement action and Spectrum requests Allergan to join as a party to that
action, Allergan shall join as a party to that action at Spectrum’s expense and hereby
consents to the exercise of personal jurisdiction by the relevant courts.




     (iii) If Allergan commences any such enforcement action, Allergan shall have the
exclusive right to employ counsel of its own selection and to direct and control the
litigation or any settlement thereof; provided, however, that Allergan shall
not, without obtaining Spectrum’s prior written consent, settle any such actions in any way
that would limit Spectrum’s rights in the Licensed Intellectual Property (including the
Joint Intellectual Property). Allergan may reimburse itself for **** of the reasonable
costs and expenses it incurs in enforcing any such action that relates to Licensed Product
in the Allergan Territory by deducting such amounts from the royalties and milestone
payments due to Spectrum hereunder. To the extent Allergan is paid any settlement amount or
awarded damages, costs or expenses, Allergan may first apply such settlement or award to
reimburse itself for all remaining reasonable costs and expenses it incurred in enforcing
the action and Spectrum for all costs and expenses paid or deducted as set forth above (each
Party shall receive such amounts on a pro rated basis). Any amount remaining after this
reimbursement shall result in a payment to ****, calculated by applying the ****. However,
if the Co-Promotion Agreement has not been terminated, for infringement in the Co-Promotion
Region, the Parties shall ****.




     (iv) If Spectrum commences any such enforcement action, Spectrum shall have the
exclusive right to employ counsel of its own selection and to direct and control the
litigation or any settlement thereof; provided, however, that Spectrum shall
not, without obtaining Allergan’s prior written consent, settle any such actions in any way
that





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




45









 











would limit Allergan’s rights hereunder. Spectrum may reimburse itself for **** of the
reasonable costs and expenses it incurs in enforcing any such action that relates to
Licensed Product in the Field of Use in the Allergan Territory by deducting such amounts
from any payment due to Allergan, by including such amount in its calculation of PSMM to be
reimbursed by Allergan, or, after the profit share arrangement has been terminated, by
providing Allergan with an invoice therefor, which Allergan shall pay within thirty (30)
days of its receipt. To the extent Spectrum is paid any settlement amount or awarded
damages, costs or expenses, Spectrum may first apply such settlement or award to reimburse
itself for all remaining reasonable costs and expenses it incurred in enforcing the action
and Allergan for all costs and expenses paid or deducted as set forth above (each Party
shall receive such amounts on a pro rated basis). Any amount remaining after this
reimbursement shall result in a payment to ****, calculated by applying the ****, with the
remainder paid to ****. However, if the Co-Promotion Agreement has not been terminated, for
infringement in the Co-Promotion Region, the Parties shall ****.




     (v) In any suit or dispute involving any Third Party infringer, the Parties shall
cooperate fully, and upon the request of the enforcing Party, the non-enforcing Party shall
make available to the enforcing Party all relevant records, papers, information, samples,
specimens, and the like which may be relevant and in its possession.



ARTICLE 9

CONFIDENTIAL INFORMATION




     9.1 Confidentiality Obligations.



     (a) Both Spectrum and Allergan acknowledge that, in furtherance of this Agreement, including
the Co-Promotion Agreement, they have and will receive from the other Party certain Confidential
Information.



     (b) All proprietary or confidential materials and information, whether oral or in writing,
exchanged by the Parties or their Affiliates in furtherance of this Agreement (including the
Co-Promotion Agreement) shall be considered confidential information of the disclosing Party or its
Affiliates, including testing protocols, research, formulations, business methods and practices,
information about the expertise of employees or consultants, other technical, business, financial,
customer and product development plans, training materials and methods of training the sales force,
identity and location of customers, supplier information, forecasts, strategies and similar
information, prospective customers and suppliers, financial information, inventions, processes,
Know How, methods, products, patent applications, specifications, drawings, sketches, models,
samples, designs, ideas, technical information, and all other confidential business information and
trade secrets (“Confidential Information”). This Agreement shall supersede the Mutual
Confidentiality Agreement between Spectrum and Allergan, effective December 14, 2007, and all
confidential information disclosed by a Party to the other Party thereunder shall be deemed
Confidential Information of the disclosing Party under this





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




46









 









Agreement.




     (c) Notwithstanding the foregoing, “Confidential Information” shall not include any
information which was: (i) in the public domain at the time of disclosure; (ii) in the possession
of the receiving Party at the time of disclosure to it whether prior to or during the Term of this
Agreement, including the Co-Promotion Agreement, and not as a result of disclosure by or on behalf
of the other Party, as evidenced by written records; (iii) received by the receiving Party from a
Third Party who had a lawful right to disclose such information to it; or (iv) independently
developed by the receiving Party without reference to Confidential Information of the other Party
or its Affiliates, as evidenced by the receiving Party.



     (d) Each Party for itself and its Affiliates hereby acknowledges and agrees that all
Confidential Information is proprietary to the disclosing Party or its disclosing Affiliates.



     (e) Each Party for itself and its Affiliates agrees: (i) to use Confidential Information
disclosed by the disclosing Party or its Affiliates only for the purposes described herein,
including the Co-Promotion Agreement; and (ii) to hold in confidence and protect such Confidential
Information from dissemination to, and use by, any Third Party (except for Affiliates of such
Party), except as may be permitted in this Agreement.



     (f) Neither Party shall, and each Party shall cause its Affiliates not to, without the prior
written consent of the disclosing Party, in any manner whatsoever, disclose or communicate any
Confidential Information received from the disclosing Party or its Affiliates to any employee,
officer or director, subcontractor, agents, advisor, and/or consultants of the receiving Party or
its Affiliates or to any other Third Party, except for those who need to know such information
solely for the purpose of this Agreement (including the Co-Promotion Agreement) and who have been
advised of and have agreed to treat such information in accordance with the terms of this Agreement
(including the Co-Promotion Agreement). Each Party is responsible for any breach of this Article 9
by those to whom such Party or its Affiliates disclose the other Party’s or its Affiliates’
Confidential Information.



     9.2 Disclosure Required by Law. Nothing in this Agreement shall be construed as
preventing or in any way inhibiting either Party or its Affiliates from disclosing Confidential
Information of the other Party or its Affiliates or taking any other actions necessary to comply
with applicable Laws (subject to the terms of Section 14.12 for press releases and public
announcements). In the event a Party or its Affiliates shall deem it reasonably necessary to
disclose Confidential Information belonging to the disclosing Party or its Affiliates under this
Section 9.2, such Party or its Affiliates (a) shall to the extent possible give reasonable advance
notice of such disclosure to the disclosing Party or its Affiliates in order that the disclosing
Party or its Affiliates may seek an appropriate protective order, and barring such protective
order, that a copy of such legally compelled disclosure or announcement is delivered to the
disclosing Party or its Affiliates prior to dissemination, and (b) shall consider in good faith the
disclosing Party’s or its Affiliates’ objections to such disclosure, including suggestions to
redact Confidential Information, and take reasonable measures to seek confidential treatment of
such information.






47









 










     9.3 Equitable Relief. Each Party and its Affiliates acknowledges that a breach of
this Article 9 cannot reasonably or adequately be compensated in damages in an action at law and
that such a breach shall cause the other Party irreparable injury and damage. By reason thereof,
each Party and its Affiliates agree that the other Party shall be entitled, in addition to any
other remedies it may have under this Agreement or otherwise, to preliminary and permanent
injunctive and other equitable relief to prevent or curtail any breach of the obligations relating
to Confidential Information set forth herein by the other Party. Each Party and its Affiliates
agree that the existence of any claim, demand, or cause of action of it against the other Party,
whether predicated upon this Agreement, or otherwise, shall not constitute a defense to the
enforcement by the other Party, or its successors or assigns, of the obligations relating to
Confidential Information set forth herein.



     9.4 Independent Development; Residuals. Each Party acknowledges that the other Party
may currently or in the future be developing information internally, or receiving information from
Third Parties, that is similar to the Confidential Information. Accordingly, except as set forth
in Section 2.6, nothing in this Agreement will be construed as a representation or agreement that
the Parties will not develop or have developed for it products, concepts, systems or techniques
that are similar to or compete with the Licensed Product, concepts, systems or techniques
contemplated by or embodied in the Confidential Information, provided that the Parties do not
violate any of their obligations under this Agreement in connection with such development.
Additionally, each Party shall be free to use the Residuals resulting from access to or work with
the other Party’s Confidential Information for any purpose. The term
“Residuals” means information in intangible form, retained in the unaided memory (without the
assistance of notes or other memory aids and without any conscious attempt to memorize or refresh
recollections) of Persons employed or retained by a Party who have had access to or worked with the
Confidential Information, including ideas, concepts, know-how or techniques contained therein. The
Parties shall not have any obligation to limit or restrict the assignment of such Persons or to pay
royalties for any work resulting from the use of Residuals.



ARTICLE 10

CERTAIN REMEDIES; NOTICE RIGHT




     10.1 Development Trigger. In the event of a Development Trigger, in addition to all
other remedies available to Allergan under this Agreement, at law, or in equity, if any, Allergan
at its option, and with written notice to Spectrum (effective upon receipt), may select any or all
of the following options; provided, however, that Allergan may only select the option provided in
Section 10.1(c) if it also selects the option provided in Section 10.1(b):



     (a) take over control of all development activities;



     (b) **** or ****Spectrum’s **** or****associated with the ****and ****Allergan ****the ****and
****;





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




48









 










     (c) require Spectrum to **** Allergan ****all ****and ****is not ****Spectrum ****Allergan
**** relating to the Licensed Product in the Field of Use in the Allergan Territory;



     (d) take over the **** relating to the Licensed Product in the Field of Use in the Allergan
Territory under this Agreement. In such event, Allergan shall be ****; and



     (e) ****, rather than ****, shall have ****and ****as set forth in****Allergan’s ****shall
be****Allergan’s ****shall be **** In addition****shall be ****to allow ****set forth ****as
compared to the ****as of the ****Also, Allergan ****of the ****which ****and ****Spectrum’s ****.



     10.2 Change in Control Trigger. In the event of a Change in Control Trigger,
Allergan at its option, and with written notice to Spectrum (effective upon receipt), may select
any or all of the following options:



     (a) require Spectrum to **** Allergan **** all **** and **** is not **** Spectrum ****
Allergan **** relating to the Licensed Product in the Field of Use in the Allergan Territory;



     (b) take over the **** relating to the Licensed Product in the Field of Use in the Allergan
Territory under this Agreement. In such event, Allergan shall be ****;



     (c) **** with written notice to Spectrum**** written notification to Spectrum) within thirty
(30) days of being notified by Spectrum of such Change in Control pursuant to Section 10.5. In the
event Allergan **** as set forth above, ****In the event **** in lieu of the terms set forth in
****, the Parties ****, pursuant to the ****; and



     (d) ****, rather than ****, shall have **** and **** as set forth in **** Allergan’s ****
shall be **** Allergan’s **** shall be **** In addition**** shall be **** to allow **** set forth
**** as compared to the **** as of the **** Also, Allergan **** of the **** which **** and ****
Spectrum’s ****.



     10.3 Co-Promotion Trigger. In the event that the Co-Promotion Agreement terminates,
the following shall apply:



     (a) if the Co-Promotion Agreement terminates because Spectrum opts out of the Co-Promotion
Agreement (pursuant to the terms thereof), then ****, Allergan may, upon written notice to
Spectrum, require Spectrum to assign to Allergan the ownership of all NDAs, sNDAs, MMAs and other
Regulatory Approvals relating to the Licensed Product in the Field of Use in the Co-Promotion
Region; or



     (b) if the Co-Promotion Agreement terminates for any reason other than as set forth in
subsection (a), then within three (3) months after the date of termination, Allergan may, upon
written notice to Spectrum, require Spectrum to assign to Allergan the ownership of all NDAs,
sNDAs, MMAs and other Regulatory Approvals relating to the Licensed Product in the Field of





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




49









 









Use in
the Co-Promotion Region.




     10.4 Clarification. Notwithstanding Allergan taking over control of development under
Section 10.1 or 10.2, Spectrum shall still remain on the JDC and shall still be responsible for its
payment obligations hereunder. However, to the extent that Allergan assumes development
responsibilities pursuant to Section 10.1 or 10.2 of this Agreement, Spectrum or Spectrum’s
successor in interest, as applicable, shall no longer be obligated to perform the services
associated with such responsibilities.



     10.5 Notice. Spectrum shall provide Allergan with written notice of any bona fide
discussions it has with a Third Party to acquire Spectrum through the consummation of a Change in
Control; provided, however, that Spectrum shall not be obligated to disclose the identity of such
Third Party or terms of the discussions. Spectrum shall provide written notice to Allergan thirty
(30) days in advance of a closing of a transaction that will result in a Change in Control Trigger.



ARTICLE 11

REPRESENTATIONS, WARRANTIES AND COVENANTS




     11.1 Both Parties. Each of the Parties provides the following representations,
warranties and covenants during the Term of this Agreement for this Agreement, including the
Co-Promotion Agreement (collectively, “the Agreement” for the purposes of this Section 11.1):



     (a) Each Party hereby represents, warrants and covenants to the other Party that: (i) it has
all requisite right, power and authority to enter into the Agreement on behalf of itself and its
Affiliates and to perform its respective obligations hereunder and to cause its Affiliates to
perform their respective obligations hereunder; (ii) the execution, delivery and performance by
such Party of the Agreement has been duly authorized and approved by all necessary action by such
Party; and (iii) assuming due authorization, execution and delivery by the other Party, the
Agreement constitutes the legal, valid and binding obligations of such Party, enforceable against
such Party in accordance with its respective terms.



     (b) Each Party represents, warrants and covenants to the other Party that the execution and
delivery of the Agreement and the performance of such Party’s and its Affiliates’ obligations
hereunder: (i) do not conflict with or violate any requirement of applicable Law as of the
Effective Date; (ii) do not, and will not, conflict with or otherwise interfere with in such a
manner as to result in a violation, breach, or default under or require any consent that has not
been obtained under any Contract between such Party or any of its Affiliates and any Third Party;
and (iii) there are no, and shall be no, liens, conveyances, mortgages, assignments, encumbrances,
or other Contracts that would prevent or impair such Party’s or any of its Affiliates’ full and
complete exercise of the terms and conditions of the Agreement.



     (c) Each Party hereby represents, warrants and covenants to the other Party that it and its
Affiliates shall at all times comply with all applicable Laws relating or pertaining to their






50









 









obligations under the Agreement.




     11.2 Licensed Intellectual Property: Ownership/Right to License; Non-Infringement;
Validity. Spectrum represents, warrants and covenants that:



     (a) except to the extent that it would not cause a material adverse consequence, (i) as of the
Effective Date, it is the sole and exclusive owner of all right, title and interest, in, to and
under the Licensed Intellectual Property; (ii) other than Allergan’s interest in Joint Intellectual
Property, it is the sole and exclusive owner of or has the sole and exclusive license to all right,
title and interest, in, to and under the Licensed Intellectual Property incorporated in or used in
manufacturing the Final Licensed Product, and (iii) other than Allergan’s interest in Joint
Intellectual Property, it is the sole and exclusive owner of or has the sole and exclusive license
to all right, title and interest, in, to and under the Extension Patents, in each case free and
clear of any security interests, claims, encumbrances or charges of any kind;



     (b) it has sufficient rights to grant the licenses and rights granted herein, free and clear
of any security interests, claims, encumbrances or charges of any kind;



     (c) it has not assigned and/or granted licenses, nor shall it assign and/or grant licenses, to
the Licensed Intellectual Property to any Third Party that would restrict or impair the rights
granted hereunder, and it has not granted to anyone any rights that cover the Licensed Product in
the Field of Use in the Allergan Territory that remain in effect as of the Effective Date;



     (d) the making or having made, use, marketing, sale, offering for sale, import, export and
other exploitation of Final Licensed Product in the Field of Use in the Allergan Territory does
not, and shall not, infringe upon, misappropriate or otherwise violate any Intellectual Property
Rights of any Third Party;



     (e) ****, as of the Effective Date: (i) the patents in the Original Patent Rights are valid
and enforceable; (ii) to its actual knowledge, there is no reason why the claims that may issue
from the patent applications in the Original Patent Rights would not be valid and enforceable;
(iii) no Third Party has asserted that any Licensed Intellectual Property is invalid or not
enforceable; and (iv) Spectrum has obtained assignment of the Original Patent Rights from
the inventors named therein, and all such assignments of inventorship rights are valid and
enforceable. As of the Effective Date, all applications, registrations, maintenance and renewal
fees in respect of the Original Patent Rights have been paid and all documents and certificates
required to be filed with the relevant agencies for the purpose of maintaining the Original Patent
Rights have been filed. ****, all inventors who should have been listed in the Original Patent
Rights as inventors have been listed in the Original Patent Rights as inventors. As of the
Effective Date, none of the Licensed Intellectual Property was developed with federal or state
funding from any Governmental Authority such that any Governmental Authority has any march in
rights or other rights to use the Licensed Intellectual Property;





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




51









 










     (f) to its actual knowledge, no Third Party has infringed the Licensed Intellectual Property;
and



     (g) it has provided to Allergan the patent searches, and ****.



     11.3 All Rights Granted. Spectrum represents, warrants and covenants that: (a) it
shall not invoke any dominant patent or patent application owned or controlled by, or licensed to,
Spectrum or its Affiliates to in any way restrict the rights and/or licenses granted to Allergan
and its Affiliates under this Agreement (including the Co-Promotion Agreement); (b) the Licensed
Intellectual Property licensed under Section 2.1(a) constitutes all of the Intellectual Property
Rights that are necessary to make, have made, use, market, sell, offer for sale, have sold, import,
export and otherwise exploit the Final Licensed Product in the Field of Use in the Allergan
Territory; and (c) as of the Effective Date, Spectrum has delivered to Allergan copies of all
material Documents relating to the development, manufacture and sale of Licensed Product in the
Field of Use and other material Licensed Intellectual Property, and has made all applicable
Spectrum employees involved in the development of material Licensed Intellectual Property available
to Allergan to assist Allergan in understanding the data delivered to Allergan.



     11.4 No Law Suits. Spectrum represents, warrants and covenants that, as of the
Effective Date, there is no legal, administrative, arbitration, or other proceeding, suit, claim or
action of any nature, judgment, decree, decision, injunction, writ or order pending or, to the
knowledge of Spectrum’s senior management, threatened by, against or involving Spectrum, the
Licensed Intellectual Property, or this Agreement, including the Co-Promotion Agreement, whether at
law or in equity, before or by any Person. Spectrum shall provide notice of any of the foregoing
to the extent they involve the Licensed Product, the Licensed Intellectual Property, or this
Agreement, including the Co-Promotion Agreement. Allergan represents, warrants and covenants that,
as of the Effective Date, there is no legal, administrative, arbitration, or other proceeding,
suit, claim or action of any nature, judgment, decree, decision, injunction, writ or order pending
or, to the knowledge of Allergan’s senior management, threatened by, against or involving this
Agreement, including the Co-Promotion Agreement, whether at law or in equity, before or by any
Person. Allergan shall provide notice of any of the foregoing to the extent they involve this
Agreement, including the Co-Promotion Agreement.



     11.5 Trademarks. Spectrum represents, warrants and covenants that as of Effective
Date:



     (a) it is the sole and exclusive owner of all right, title and interest in the Acquired
Trademarks, free and clear of any security interests, claims, encumbrances or charges of any
kind;



     (b) it has not assigned and/or granted licenses to the Acquired Trademarks to any Third Party
that would restrict or impair the rights granted hereunder;



     (c) Schedule 11.5(c) constitutes a complete and accurate list of all of trademark and





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




52









 









domain
name applications and registrations for the Acquired Trademarks, both active and inactive;




     (d) **** no Third Party has asserted that the Acquired Trademarks are invalid or not
enforceable;



     (e) **** all Acquired Trademarks that are registered trademarks or are the subject of pending
trademark applications are in full force and effect, and all actions required to keep such
registrations or application pending or in effect or to provide full available protection,
including payment of filing and maintenance fees and filing of renewals, statements of use or
affidavits of incontestability, have been taken, and no such applications or registrations are the
subject of any opposition, cancellation, or other proceeding placing in question the validity or
scope of such rights; and



     (f) **** Spectrum has received no notice that the use, presentation or display of the Acquired
Trademarks on or in connection with the Licensed Product infringes or otherwise violates any
Trademark or Intellectual Property Rights of any Third Parties. Spectrum is not aware of any
circumstances likely to give rise to any claim of infringement or other violation of any Third
Party’s Trademark by use of the Acquired Trademarks.



     11.6 Confidentiality. Except to the extent that it would not cause a material adverse
consequence, Spectrum represents, warrants and covenants as of the Effective Date that all Know How
known to Spectrum and relating to the Licensed Product in the Field of Use and all other Licensed
Intellectual Property which has not been patented has been kept confidential, except for public
disclosures customarily made in the industry, and all employees, consultants, agents and
contractors of Spectrum and its Affiliates, or other Third Parties, to whom Spectrum has disclosed
such Know How or other Licensed Intellectual Property have executed, and are subject to,
confidential and proprietary information agreements that protect and limit the use and disclosure
of the Licensed Intellectual Property in a manner comparable to the confidentiality and non-use
provisions contained in Article 9.



     11.7 Regulatory Approvals. Spectrum represents, warrants and covenants as of
subsections (a)-(d) below and Allergan represents, warrants and covenants as of subsection (e)
below that:



     (a) as of the Effective Date, Spectrum has provided Allergan with all applicable details on
the regulatory status of all Licensed Product in the Field of Use in the Allergan Territory, and
Spectrum has provided copies of all clearances and applications therefor;



     (b) Spectrum is the owner of record of the Investigational New Drug Application (filed with
the FDA) for the 611 Study and 612 Study, except to the extent that Allergan takes
ownership pursuant to its rights under this Agreement;



     (c) with respect to all regulatory filings to obtain Regulatory Approvals for the Licensed
Product in the Field of Use: (i) the data and information in the Spectrum Group’s





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




53









 









submissions were,
are and shall be free from fraud or material falsity; (ii) the Regulatory Approvals have not been
and will not be obtained either through bribery or the payment of illegal gratuities by the
Spectrum Group; (iii) the data and information in the Spectrum Group’s submissions are, were and
shall be accurate and reliable for purposes of supporting approval of the submissions; and (iv) the
Regulatory Approvals shall be obtained without illegal or unethical behavior of any kind by the
Spectrum Group; provided that Spectrum shall not be deemed to be in breach of this Section 11.7(c)
if the violation of this Section 11.7(c) results from the action or omission of Allergan, its
Affiliates or sublicensees;




     (d) as of the Effective Date, neither Apaziquone nor any of its corresponding active moieties
(following enzymatic activation), nor any of the salts, esters, isomers, mixtures of isomers,
complexes or derivatives of Apaziquone have been (i) previously approved as an active ingredient
under section 505(b) of the FD&C Act, or (ii) authorized by the EMEA or other regulatory
authorities in the EU; and



     (e) except for information provided by Spectrum, its Affiliates or sublicensees or others in
the Spectrum Group, with respect to all regulatory filings to obtain Regulatory Approvals for the
Licensed Product in the Field of Use: (i) the data and information in the Allergan Group’s
submissions and modifications thereof shall be free from fraud or material falsity; (ii) the
Regulatory Approvals will not be obtained either through bribery or the payment of illegal
gratuities by the Allergan Group; (iii) the data and information in the Allergan Group’s
submissions and modifications thereof shall be accurate and reliable for purposes of supporting
approval of the submissions; and (iv) the Regulatory Approvals shall be obtained without illegal or
unethical behavior of any kind by the Allergan Group; provided that Allergan shall not be deemed to
be in breach of this Section 11.7(e) if the violation of this Section 11.7(e) results from the
action or omission of Spectrum, its Affiliates or sublicensees.



     11.8 Professional Standards. Each Party represents, warrants and covenants that, with
respect to the services provided hereunder to the other Party, it, its Affiliates and their
respective employees, contractors and agents who perform services have the experience, capability
and resources to efficiently and skillfully perform the services, and shall perform, where
applicable, all such services in a professional and workmanlike manner and in accordance with the
generally accepted then-current standards, forms, procedures and techniques established from time
to time by the industry (including eCTD where applicable).



     11.9 No Conflict. Spectrum represents, warrants and covenants that: (a) no Contracts
that it or its Affiliates may have with any Third Party provide such Third Party with any rights of
first offer, rights of first refusal, or any other rights to make, have made, use, conduct clinical
trials for, sell, offer for sale, have sold, import, export, or otherwise exploit the Licensed
Product in the Field of Use in the Allergan Territory or the use of the Licensed Intellectual
Property in connection with the making, developing or commercializing of the Licensed Product in
the Field of Use in the Allergan Territory; and (b) it has received no notice from a Third Party of
any suit, action, proceeding or arbitration pending or threatened against it that the proposed
terms and
conditions of this Agreement, including the Co-Promotion Agreement, and the Parties’






54









 









performance in accordance therewith, do or shall conflict or interfere with in a manner resulting
in a breach or default under, or other violation of, any Contracts that Spectrum or its Affiliates
may have with any Third Party.




     11.10 Additional Warranties. Spectrum represents, warrants and covenants that:



     (a) Apaziquone is a member of the series of compounds known as Indoloquinones licensed to
Spectrum under the ****;



     (b) Spectrum dissolved its subsidiary known as NeoOncoRx, Inc. on January 23, 2003, and as a
result, Spectrum was the sole licensee under the **** and no other Third Party has any claims as a
licensee under the ****;



     (c) prior to the Effective Date, Allergan has been supplied with a true and correct copy of
the **** and ****, together with all amendments, waivers or other changes thereto;



     (d) Spectrum has performed all obligations required to be performed by it in connection with
the **** and ****, Spectrum is not in breach of the **** or **** as of the Effective Date, and
Spectrum is not in receipt of any claim of default, cure notice or show cause notice under the ****
or ****;



     (e) Spectrum has no present expectation or intention of not fully performing any material
obligation pursuant to the **** or ****, and, to the knowledge of Spectrum, there is no current
breach or anticipated breach by any other party to the **** or **** and Spectrum shall fully
perform all material obligations pursuant to the **** and ****;



     (f) the **** and the **** are valid and enforceable in accordance with their terms, are in
full force and effect, and there are no approvals or consents required to make the **** and the
**** effective; and



     (g) as of the Effective Date: (i) Spectrum has provided complete and accurate factual
responses to all material requests for information that were made by the Allergan Group prior to
the Effective Date, and Spectrum has not omitted to supply Allergan with any material information
in its possession concerning the Licensed Intellectual Property or Licensed Product in the Field of
Use in the Allergan Territory or the transactions contemplated by this Agreement that would be
material to Allergan’s decision to enter into this Agreement and undertake the commitments and
obligations set forth in this Agreement; and (ii) the Data (as hereinafter defined) provided in
writing to Allergan or its Affiliates by Spectrum relating to the Licensed Product has been
accurate in all material respects and Spectrum has made no material misrepresentation or material
omission in connection with such Data. “Data” means any and all research data, pharmacology data,
preclinical data, clinical data and/or all other Documents, with respect to the Licensed Product
that have been submitted, or are required to be submitted, to the FDA or EMEA in association with a
Regulatory Approval.



     11.11 Licensed Product Warranties. For Licensed Product supplied to Allergan by





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




55









 









Spectrum or its subcontractor’s prior to agreement on the supply agreement pursuant to Section
3.3(d), Spectrum represents, warrants and covenants that: (i) all Licensed Product are provided
free of defects in materials and workmanship and manufacturing; (ii) all Licensed Product
shall be manufactured in compliance with the applicable Specifications and shall be free and clear
of all liens, security interests and encumbrances; (iii) Spectrum’s and it subcontractor’s
manufacturing facilities will be in compliance, as applicable, with all GMP/QSR Regulations and ISO
13485:1996, EN 46001 requirements; and (iv) if applicable, no Licensed Product, at the time of
delivery to Allergan, shall be adulterated or misbranded or an article which may not be introduced
into interstate commerce within the meaning of the FD&C Act. Allergan represents, warrants and
covenants that after such Licensed Product has been delivered to Allergan by or on behalf of
Spectrum, Allergan shall (either by itself or through its subcontractor), prior to sale of the
Licensed Product, store, handle and transport such Licensed Product under appropriate conditions in
compliance with all applicable Laws.




     11.12 Inaccuracies. Without limiting either Party’s rights and remedies at law, in
equity or under this Agreement, if, at any point in time (not just at the times when the warranties
are deemed granted), either Party becomes aware of any inaccuracies in the foregoing warranties and
representations, such Party shall promptly notify the other Party of such inaccuracies, with a
detailed written explanation.



     11.13 DISCLAIMER OF ALL OTHER WARRANTIES. THE WARRANTIES SET FORTH IN THIS AGREEMENT
AND THE CO-PROMOTION AGREEMENT ARE THE PARTIES’ ONLY WARRANTIES WITH RESPECT HERETO AND ARE MADE
EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WHICH ARE HEREBY DISCLAIMED,
INCLUDING ANY IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, OR
OTHERWISE.



ARTICLE 12

INDEMNIFICATION; LIMITATIONS ON LIABILITY; INSURANCE

REQUIREMENTS




     12.1 Indemnification By Spectrum. Except to the extent of any Losses covered by
Section 12.2, Spectrum agrees to defend, indemnify and hold harmless Allergan, its Affiliates, and
their respective directors, officers, employees, and agents (“Allergan Indemnitees”) from and
against any and all Losses arising out of a Claim by a Third Party (other than an Affiliate of
Allergan arising out of, resulting from or relating to: (a) any breach or alleged breach of a
representation or warranty made by Spectrum in this Agreement, including the Co-Promotion
Agreement; (b) any breach or alleged breach of any covenant of, or obligation required to be
performed by, Spectrum contained in this Agreement, including the Co-Promotion Agreement; (c) any
allegation regarding the negligent or willful act or misconduct of anyone in the Spectrum Group in
connection with this Agreement, including the Co-Promotion Agreement; (d) when Spectrum has the
right to conduct a Remedial Action under this Agreement, any allegation regarding Spectrum’s
handling of such Remedial Action or Spectrum electing not to commence such Remedial Action; (e) any
allegation regarding a Remedial Action relating to Spectrum’s






56









 









products including those which
contain Apaziquone; (f) any allegation that the development, manufacture, marketing, promotion,
use, sale, import, export, distribution or any other exploitation of the Final Licensed Product in
the Field of Use in the Allergan Territory, or the use of Licensed Intellectual Property existing
as of the Effective Date in connection therewith, violates, infringes upon or misappropriates the
Intellectual Property Rights of any Third Party;
(g) any allegation that the use of the Licensed Intellectual Property (other than Allergan’s
contributions to Joint Intellectual Property) as permitted herein misappropriates the Intellectual
Property Rights of any Third Party; (h) any allegation that personal injury or death, or any damage
to any property, was caused or allegedly caused by a manufacturing defect in any Licensed Product
manufactured by Spectrum or for Spectrum by Third Parties; (i) any design defect in the
Closed-System Packaging System that forms part of the Final Licensed Product (but expressly
excluding the formulation of the Licensed Product); or (j) any violation by Spectrum of any
Regulatory Approval involving the Licensed Product.




     12.2 Indemnification By Allergan. Except to the extent of any Losses covered by
Section 12.1, Allergan agrees to defend, indemnify and hold harmless Spectrum, its Affiliates, and
their respective directors, officers, employees, and agents from and against any and all Losses
arising out of a Claim by a Third Party (other than an Affiliate of Spectrum) arising out of,
resulting from or relating to: (a) any breach or alleged breach of a warranty made by Allergan in
this Agreement, including the Co-Promotion Agreement; (b) breach or alleged breach of any covenant
or obligation required to be performed by Allergan contained in this Agreement, including the
Co-Promotion Agreement; (c) the negligent or willful act or misconduct of any of the Allergan Group
in connection with this Agreement, including the Co-Promotion Agreement; (d) when Allergan has the
right to conduct a Remedial Action under this Agreement, any allegation regarding Allergan’s
handling of such Remedial Action or Allergan electing not to commence such Remedial Action; (e) any
allegation that personal injury or death, or any damage to any property, was caused or allegedly
caused by a manufacturing defect in any Licensed Product manufactured by Allergan or directly for
Allergan by Third Parties (after Allergan assumes manufacturing responsibility under this
Agreement; or (f) the violation by Allergan of any Regulatory Approval involving the Licensed
Product.



     12.3 Procedure. A Party entitled to be indemnified under Sections 12.1 or 12.2 (the
“Indemnified Party”) shall promptly notify the other Party liable for such indemnification (the
“Indemnifying Party”) in writing of any Claim which the Indemnified Party has determined has given
or could give rise to a right of indemnification under this Agreement, including the Co-Promotion
Agreement. Failure to promptly notify the Indemnifying Party of any such claim shall not relieve
the Indemnifying Party of any such duty to so indemnify except to the extent that the Indemnifying
Party can demonstrate actual loss and prejudice as a result of such failure. The Indemnifying
Party shall have the right, but not the obligation, to control the defense of the Indemnified Party
against any such Third Party Claim, utilizing counsel chosen in the Indemnifying Party’s sole
discretion; provided, however, that the Indemnified Party may participate in any such defense, at
its own expense, by separate counsel of its choice; provided further, that any such participation
shall not limit the Indemnifying Party’s right to control such defense. Notwithstanding the
foregoing, the Indemnifying Party: (a) shall not be entitled to have





57









 









sole control over any Third
Party Claim that seeks an order, injunction or other equitable relief against any Indemnified
Party; and (b) shall obtain the prior written approval of the Indemnified Party before ceasing to
defend against any Third Party indemnification Claim or entering into any settlement, adjustment or
compromise of such Claim involving injunctive or similar equitable relief being asserted against
any Indemnified Party or any of its Affiliates. The Indemnified Party shall cooperate with the
Indemnifying Party in the provision of any such defense by providing to the Indemnifying Party all
such information, assistance and authority as may reasonably be requested by the Indemnifying
Party.




     12.4 Allocation of Product Liability Risks. The Parties hereby agree that all Losses
arising out of a Claim(s) by a Third Party (other than an Affiliate of either Party) asserted
against a Party, its Affiliates, or their respective directors, officers, employees, and agents
that result from, arise out of or relate to an allegation that personal injury or death, or any
damage to any property, was caused or allegedly caused by any Licensed Product in the Field of Use
in the Allergan Territory used or sold by or on behalf of either Party or their respective
Affiliates or sublicensees, except to the extent such Claim is attributable to a matter covered
under Section 12.1 or 12.2, shall be allocated between the Parties as follows: (a) within the
Co-Promotion Region so long as the Parties continue to share product profit, **** (Spectrum:
Allergan) and (b) in all other cases in the Allergan Territory, **** (Spectrum: Allergan). The
Parties shall indemnify each other so as to allocate the Losses according to the preceding ratios.
Each Party shall promptly notify the other Party in writing of any Claim which could give rise to
the rights set forth in this Section 12.4. Failure to promptly notify the other Party of any such
claim shall not relieve the other Party of any such duty to so indemnify except to the extent that
the other Party can demonstrate actual loss and prejudice as a result of such failure.



     (a) Allergan shall have the first right, but not the obligation, to control the defense of any
such Third Party Claim, utilizing counsel chosen in Allergan’s sole discretion (with the costs and
expenses incurred by Allergan included in the calculation of the Losses subject to the ratio
above); provided, however, that Spectrum may participate in any such defense, at
its own expense (outside the ratios set forth above), by separate counsel of its choice; provided
further, that any such participation shall not limit Allergan’s right to control such defense.
Notwithstanding the foregoing, Allergan shall obtain the prior written approval of Spectrum before:
(i) ceasing to defend against any such Third Party Claim (if Allergan elects to defend an action
and, then, after commencement of the defense decides to no longer defend); and (ii)
entering into any settlement, adjustment or compromise of such claim or demand involving
injunctive or similar equitable relief being asserted against Spectrum or its Affiliates or an
admission of liability by Spectrum or its Affiliates. Spectrum shall cooperate with Allergan in
the provision of any such defense by providing to Allergan all such information, assistance and
authority as may reasonably be requested by Allergan.



     (b) If Allergan does not initiate the defense of such Third Party Claim within sixty (60) days
receiving such Claim, then Spectrum shall have the right to control such defense utilizing counsel
chosen in Spectrum’s sole discretion (with the costs and expenses incurred by Spectrum included in
the calculation of the Losses subject to the ratio above). In such event,





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




58









 









Allergan may participate
in any such defense, at its own expense (outside the ratios set forth above), by separate counsel
of its choice; provided further, that any such participation shall not limit Spectrum’s right to
control such defense. Notwithstanding the foregoing, Spectrum shall obtain the prior written
approval of Allergan before: (i) ceasing to defend against any such Third Party Claim (if Spectrum
elects to defend an action and, then, after commencement of the defense decides to no longer
defend); and (ii) entering into any settlement, adjustment or compromise of such claim or demand
involving injunctive or similar equitable relief being asserted against Allergan or its Affiliates
or an admission of liability by Allergan or its Affiliates. Allergan shall cooperate with Spectrum
in the provision of any such defense by providing to Spectrum all such information, assistance and
authority as may reasonably be requested by Spectrum.





59









 










     12.5 Infringement Remedies. Without limiting Spectrum’s other obligations set forth
herein, in the event that the development, manufacturing, marketing, use, sale, import, export,
distribution or any other exploitation of the Final Licensed Product in the Field of Use in the
Allergan Territory, or the use of Licensed Intellectual Property in connection therewith, is
alleged to violate, infringe upon or misappropriate the Intellectual Property Rights of any Third
Party, Spectrum shall, at its expense, obtain a license from such Third Party and shall have the
first right to negotiate with such Third Party for such license, provided, however, that, if
Spectrum does not obtain such license on a timely basis given the timeline and circumstance of the
development and/or commercialization of the Final Licensed Product at such time, then Allergan
shall have the right to, upon written notice to Spectrum, obtain such license itself under
reasonable terms, and, if Allergan and Spectrum cannot obtain a license, Spectrum shall indemnify
Allergan for any Losses arising in relation thereto.



     12.6 LIMITATIONS ON LIABILITY. EXCEPT FOR BREACH BY EITHER PARTY OF SECTIONS 2.6(a),
(b) OR (c), OR ARTICLE 9, OR SPECTRUM’S REVOCATION OF ALLERGAN’S EXCLUSIVE AGENT STATUS UNDER
SECTION 5.1(a)(ii), IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD
PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY, OR CONSEQUENTIAL DAMAGES ARISING
FROM OR RELATING TO THIS AGREEMENT, INCLUDING THE CO-PROMOTION AGREEMENT, OR FOR ANY AMOUNTS
REPRESENTING LOSS OF PROFITS OR LOSS OF BUSINESS, WHETHER THE BASIS OF THE LIABILITY IS BREACH OF
CONTRACT, TORT, STATUTES, OR ANY OTHER LEGAL THEORY, AND WHETHER SUCH FIRST PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES OR NOT. THE FOREGOING EXCLUSIONS OF DAMAGES ARE NOT INTENDED TO
LIMIT THE INDEMNIFICATION OBLIGATIONS HEREUNDER TO THE EXTENT THAT THE THIRD PARTY (OTHER THAN ANY
AFFILIATE OF THE INDEMNIFIED PARTY) CLAIMS COVERED BY SUCH OBLIGATIONS INCLUDE THE TYPE OF DAMAGES
THAT ARE EXCLUDED HEREUNDER.



     12.7 Insurance.



     (a) At all times during the Term and for **** thereafter, Spectrum shall: (i) except as
provided in subsection (ii), maintain Commercial General Liability (comparable to standard ISO
general liability form) insurance (including bodily injury and property damage coverage and all of
Spectrum’s indemnification obligations hereunder)) including coverages of: (A) products and
completed operations; (B) premises —operations; and (C) broad form contractual liability at limits
not less than **** during the pre-commercialization period, and **** during the commercialization
period (collectively the “Spectrum Insurance Policies”); (ii) obtain and maintain the maximum
available Extended Discovery Period insurance, if Spectrum terminates the Spectrum Insurance
Policies during the Term; (iii) include Allergan as “Additional Insured” under the Spectrum
Insurance Policies; (iv) provide, within thirty (30) days of Allergan’s request, Certificates of
Insurance verifying insurance limits agreed upon as well as a thirty (30) day notice of
cancellation, non-renewal, or material change; (v) maintain all risk Property





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




60









 









insurance at limits
not less than ****; (vi) maintain Automobile Liability insurance with minimum limits of ****,
combined single limits for bodily injury and property damage with coverage extending to all owned,
hired and non-owned vehicles; and (vii) maintain adequate
coverage as respects any clinical trial activity. Spectrum shall obtain all the insurance
policies described in clauses (i) through (vii) from
insurers having A.M. Best’s Ratings of A —
VII or higher.




     (b) At all times during the Term and for **** thereafter, Allergan shall: (i) except as
provided in subsection (ii), maintain Commercial General Liability insurance (including bodily
injury and property damage coverage) including coverages of: (A) products and completed
operations; (B) premises —operations; and (C) broad form contractual liability at limits not less
than **** (collectively the “Allergan Insurance Policies”); (ii) obtain and maintain the maximum
available Extended Discovery Period insurance if Allergan terminates the Allergan Insurance
Policies during the Term; (iii) include Spectrum as “Additional Insured” under the Allergan
Insurance Policies; (iv) provide, within thirty (30) days of Spectrum’s request, Certificates of
Insurance verifying insurance limits agreed upon as well as a thirty (30) day notice of
cancellation, non-renewal or material change; (v) maintain all risk Property insurance at limits
not less than ****; and (vi) maintain Automobile Liability insurance with minimum limits of ****,
combined single limits for bodily injury and property damage with coverage extending to all owned,
hired and non-owned vehicles. Allergan shall obtain all the insurance policies described in
clauses (i) through (vi) from insurers having A.M. Best’s Ratings of A — VII or equivalent.



ARTICLE 13

TERM AND TERMINATION




     13.1 Term. This Agreement shall continue until terminated as set forth herein
(“Term”). If the Co-Promotion Agreement has been terminated (regardless of the cause) then, upon
expiration of the Royalty Term in the last country of the Royalty Territory the following
provisions shall be null and void and without further effect on either Party or its Affiliates:
Articles 3, 4, 10 and 11 and Sections 2.5, 2.6, 2.7, 2.8, 2.9, 5.1(a)(i), (iii), (iv), (v), and
(vi), 5.1(b)(ii) and (iii), 5.1(c), 5.2, 5.3, 5.4, 5.8, 5.9, 6.1 through 6.8 (inclusive), 6.12,
6.14, 6.15, 8.2 (except as it relates to Joint Intellectual Property), 8.3 (except as it relates to
Joint Intellectual Property), 12.1 through 12.5 (inclusive, but only to the extent that the facts
underlying the Claim arose after such expiration) and all the Schedules except for Schedule 1.1 and
Schedule 7.1.



     13.2 Termination at Will. Allergan may terminate this Agreement at will by providing
Spectrum with six (6) month’s prior written notice. Upon such termination, in addition to those
provisions that survive the termination as set forth in Section 13.5 below, the following shall
also apply:



     (a) the licenses granted to Allergan under Article 2 shall terminate after Allergan has
completed the Inventory Sell-Off (as hereinafter defined);





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange
Act of 1934, as amended.




61









 










     (b) the Co-Promotion Agreement shall terminate in its entirety; and



     (c) Allergan shall negotiate in good faith with Spectrum the terms of a commercially
reasonable agreement (which may be royalty bearing or one time payment as negotiated by the
Parties) reflecting Allergan’s economic contribution to the manufacturing, development and
commercialization of the Licensed Product in the Field of Use up to the date of such termination
(considering all Allergan contributions (including both positive as well as negative factors)
including obligations, commitments and payments made hereunder or as a result hereof such as
upfront or milestone payments, whether the trademarks are included for marketed products) with
respect to the Licensed Product in the Field of Use which negotiation shall include, but not be
limited to the following:




     (i) a license under the Allergan Solely Developed Know How and Allergan’s rights under
the Joint Intellectual Property, in each case only if such Intellectual Property Rights have
been incorporated in the Licensed Product in the Field of Use, or the making or using
thereof, as of the effective date of such termination, for Spectrum to develop and
commercialize the Licensed Product in the Field in the Allergan Territory to the extent
mutually agreeable to the Parties;




     (ii) Spectrum’s continued right to use the data and results generated under this
Agreement for its manufacture, development and/or commercialization of the Licensed Product
in the Field of Use anywhere in the world;




     (iii) assignment of regulatory filings and Regulatory Approvals relating to the
Licensed Product in the Field of Use in the Allergan Territory that are in the name of
Allergan, its Affiliates and sublicensees;




     (iv) assignment to Spectrum (to the extent mutually agreed between the Parties) to
contracts entered into by Allergan in connection with the development, manufacturing and/or
commercialization of the Licensed Product in the Field of Use in the Allergan Territory;




     (v) if, at time of such termination, Allergan has terminated Spectrum’s right and has
itself assumed the responsibility to manufacture the Licensed Product pursuant to Section
3.3(f), and Spectrum has assumed all contracts entered into by Allergan in connection with
the development, manufacturing and/or commercialization of the Licensed Product in the Field
of Use in the Allergan Territory, then transfer of manufacturing responsibility to
Spectrum, which shall include providing Spectrum with a copy of all of the then-current
Know-How Controlled by Allergan necessary or useful for the manufacture of the Licensed
Product and assignment to Spectrum of all supply contracts for the Licensed Product or
otherwise to enable Spectrum to procure supply of the Licensed Product in the Field of Use
in the Allergan Territory; and






62









 











     (vi) Spectrum’s purchase from Allergan all of the inventory of the Licensed Product
held by Allergan as of the date of termination at a price equal to one hundred percent
(100%) of Allergan’s actual costs in procuring such Licensed Product, but only to the extent
such costs have not been already paid or reimbursed by Spectrum.



     13.3 Material Breach.



     (a) In the event that Spectrum materially breaches this Agreement, and fails to cure such
breach within sixty (60) days of receipt of written notice thereof specifying the breach in detail
from Allergan, unless such breach cannot be cured within the sixty (60) day period, in which case
Spectrum shall have undertaken good faith efforts to cure such breach within such
sixty (60) day period and diligently prosecuted such cure to prompt completion, then Allergan
shall have the right to seek all available remedies under this Agreement, at law or in equity.
Notwithstanding the foregoing, termination shall only be available as a remedy for such uncured
material breaches by Spectrum if the uncured material breach results in a material adverse impact
on Allergan or its Affiliates such that termination is the only reasonable remedy. This Section
13.3(a) shall not limit Allergan’s right to terminate under Section 13.2.



     (b) In the event that Allergan materially breaches this Agreement, and fails to cure such
breach within sixty (60) days of receipt of written notice thereof specifying the breach in detail
from Spectrum, unless such breach cannot be cured within the sixty (60) day period, in which case
Allergan shall have undertaken good faith efforts to cure such breach within such sixty (60) day
period and diligently prosecuted such cure to prompt completion, then Spectrum shall have the right
to seek all available remedies under this Agreement, at law or in equity except that Spectrum may
not under any circumstance (whether for breach, uncured breach, material breach or uncured material
breach) (i) terminate this Agreement; and/or (ii) seek or enforce injunctive relief which
interferes with the scope or use of the license granted in Section 2.1(a).



     13.4 365(n). THE PARTIES INTEND FOR THIS AGREEMENT AND THE LICENSES GRANTED HEREIN TO
COME WITHIN SECTION 365(n) OF THE U.S. BANKRUPTCY CODE AND, NOTWITHSTANDING THE BANKRUPTCY OR
INSOLVENCY OF SPECTRUM, THIS AGREEMENT AND THE LICENSES GRANTED HEREIN SHALL REMAIN IN FULL FORCE
AND EFFECT SO LONG AS ALLERGAN IS IN MATERIAL COMPLIANCE WITH THE TERMS AND CONDITIONS HEREOF.



     13.5 Effect of Termination. Upon any termination of this Agreement under Section 13.2
or 13.3(a):



     (a) the following provisions shall survive: Articles 1, 9, 12 (to the extent any Loss arises
prior to the effective date of such expiration or termination) and 14, Sections 2.4, 5.1(a)(ii)
(except that if Allergan terminates this Agreement at will, the appointment of Allergan as
Spectrum’s agent shall be deemed terminated on the effective date of termination), 5.5, 5.6, 5.7,
6.9, 6.10, 6.11, 6.13, 6.15, 8.1, 8.2 (as it relates to Joint Intellectual Property only), 8.3 (as
it






63









 









relates to Joint Intellectual Property only), 13.1, 13.2, 13.3 and 13.5 and Schedule 1.1. In
addition, if Allergan terminates this Agreement under Section 13.3(a), or if the licenses become
fully paid up, then Sections 2.1, 2.2, 2.3, 2.5, 2.8 and 2.9 (on a fully paid up basis) shall also
survive any termination of this Agreement;




     (b) unless otherwise agreed in writing by the Parties, Spectrum shall promptly deliver to
Allergan or destroy (at Allergan’s sole discretion) all Confidential Information of Allergan,
subject to Spectrum retaining a copy of such Confidential Information for legal archival purposes
only and/or as may be required by Law;



     (c) if Allergan terminates this Agreement at will under Section 13.2, unless otherwise agreed
in writing by the Parties, Allergan shall promptly deliver to Spectrum or destroy (at Spectrum’s
sole discretion) all Confidential Information of Spectrum, subject to Allergan retaining a copy of
such Confidential Information solely as may be reasonably necessary for
Allergan to perform under subsection (e) below and for legal archival purposes and/or as may
be required by Law;



     (d) the Co-Promotion Agreement shall automatically terminate upon termination of this
Agreement;



     (e) termination of this Agreement shall not release either Party from the obligation to make
payment of all amounts then due and payable; and



     (f) if Allergan terminates this Agreement at will under Section 13.2, Allergan shall be
permitted to sell any inventory of the Licensed Product (to the extent not purchased by Spectrum
under Section 13.2(c)(vi)) in the Field of Use in its (or its Affiliates’ or licensees’) possession
or in production at the time of termination (the “Inventory Sell-Off”) and the licenses shall
continue on a non-exclusive basis until all such units have been sold, provided Allergan continues
to pay the applicable royalty, Spectrum’s share of product profits, and, if applicable, sales
milestones, on resulting applicable Royalty-Bearing Net Sales of Royalty-Bearing Product in the
Royalty-Bearing Territory (and Co-Promotion Region, if applicable under Section 6.4(b)).



ARTICLE 14

MISCELLANEOUS




     14.1 Relationship of Parties. The relationship of the Parties established by this
Agreement is solely that of independent contractors, and nothing shall be deemed to create or imply
any employer/employee, principal/agent, partner/partner or co-venturer relationship, or that the
Parties are participants in a common undertaking. Except as permitted in Section 5.1(a) regarding
Allergan’s role as authorized agent, neither Party shall have the right to direct or control the
activities of the other Party or incur, assume or create any obligation, representation, warranty
or guarantee, express or implied, on behalf of the other Party or bind such other Party to any
obligation for any purpose whatsoever.







64











 





     14.2 Force Majeure Event.



     (a) Neither Allergan nor Spectrum shall be considered in default in performance of their
obligations hereunder to the extent that performance is delayed, hindered or prevented by a Force
Majeure Event, but only to the extent and only for the period that its performance of such
obligations is prevented by the Force Majeure Event. “Force Majeure Event” means any event or
condition, not existing as of the date of this Agreement, not reasonably foreseeable as of such
date and not reasonably within the control of the affected Party, which prevents in whole or in
material part the performance by the affected Party of its obligations hereunder or which renders
the performance of such obligations so difficult or costly as to make such performance commercially
unreasonable, including without limitation riots, civil or military disturbances, war, strikes,
lockouts, labor slowdowns or stoppages, prolonged shortage of energy supplies, epidemics, fire,
flood, hurricane, typhoon, earthquake, lightning, and explosion. The Party claiming relief under
this Section 14.2 shall promptly notify the other Party in writing, but in no event later than ten
(10) calendar days of the occurrence, should any such cause arise and shall promptly take steps to
remedy any delay or failure in performance upon removal of the circumstances causing such delay or
failure. In no event shall any Party be required to prevent or settle any labor disturbance or
dispute. For clarity, the Development Trigger shall not be extended by reason of this Section
14.2.



     (b) During the period that the performance by one of the Parties of its obligations under this
Agreement has been suspended by reason of a Force Majeure Event, the other Party may likewise
suspend the performance of all or part of its obligations hereunder to the extent that such
suspension is commercially reasonable.



     14.3 Entire Agreement. This Agreement, including the Schedules (including the
Co-Promotion Agreement) attached hereto and incorporated as an integral part of this Agreement,
constitutes the entire agreement of the Parties with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings, whether written or oral,
relating to such subject matter in any way.



     14.4 No Waiver; Amendment. No waiver of any term or condition of this Agreement shall
be valid or binding on any Party unless agreed to in writing by the Party to be charged. No course
of dealing between or among any Persons having any interest in this Agreement shall be deemed
effective to modify, amend or discharge any part of this Agreement or any rights or obligations of
any Person under or by reason of this Agreement. The failure of either Party to enforce at any
time any of the provisions of this Agreement, or the failure to require at any time performance by
the other Party of any of the provisions of this Agreement, shall in no way be construed to be a
present or future waiver of such provisions, nor in any way affect the validity of either Party to
enforce each and every such provision thereafter. This Agreement may not be amended or modified
except by the written agreement of the Parties.



     14.5 Partial Invalidity. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable Law, but if any provision




65









 







of this Agreement is held to be invalid by a court of competent jurisdiction, then the
remaining provisions shall remain, nevertheless, in full force and effect. The Parties agree to
renegotiate in good faith, or request the court to rewrite, any term held invalid and to be bound
by the mutually agreed substitute provision in order to give the most approximate effect intended
by the Parties.



     14.6 Assignment. This Agreement shall be binding upon and shall inure to the benefit
of, the Parties and their Affiliates and their respective successors and permitted assigns. Except
as expressly provided in this Agreement, Spectrum and its Affiliates may not assign any rights or
delegate any duties under this Agreement to any Third Party without the prior written consent of
Allergan, which consent shall not be unreasonably withheld, delayed or conditioned; provided,
however, that Spectrum may freely assign all of its rights and obligations hereunder to an
Affiliate of Spectrum if Spectrum guarantees the performance of such Affiliate. Spectrum may also
freely assign all of its rights and obligations hereunder as part of a merger, consolidation or
sale of all or substantially all of the stock or assets of Spectrum, or sale of the business of
Spectrum or the business relating to activities under this Agreement, without Allergan’s consent.
Allergan may freely assign its rights hereunder to an Affiliate of Allergan; provided, however,
that Allergan guarantees the performance of such Affiliate. Allergan may also freely assign all of
its rights and obligations hereunder as part of a merger, consolidation or sale of all or
substantially all of the stock or assets of Allergan, or sale of the business of Allergan or the
business relating to activities under this Agreement, without Spectrum’s consent. All other
assignments of this Agreement by Allergan shall be subject to Spectrum’s prior written consent, not
to be unreasonably withheld, delayed or conditioned. Any attempted assignment without such consent
shall be null and void.



     14.7 Governing Law. This Agreement shall be governed by, and interpreted and
construed in accordance with the laws of the State of New York, without reference to rules of
conflicts or choice of laws, except that the federal law of the United States of America shall
apply to question regarding the validity, infringement or enforceability of United States federal
patent, copyright and trademark rights relating in any way to this Agreement. The Parties agree to
submit to the jurisdiction of the state or federal courts (as applicable) in New York.



     14.8 Remedies. The exercise of any remedies hereunder shall be cumulative and in
addition to and not in limitation of any other remedies available to such Party at law or in
equity.



     14.9 Further Assurances. Each Party agrees to cooperate fully with the other and
execute such instruments, documents and agreements and take such further actions to carry out the
intents and purposes of this Agreement.



     14.10 Counterparts; Facsimile. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which, taken together, shall
constitute one instrument. For purposes hereof, a facsimile copy of this Agreement, including the
signature pages hereto, shall be deemed to be an original.



     14.11 Notices. All notices required to be given under this Agreement shall be in
writing



66









 







and shall be deemed to have been given: (a) when personally delivered or sent by confirmed
telecopy (with hard copy to follow); (b) one (1) business day after sent by reputable overnight
express courier (charges prepaid); or (c) five (5) business days following mailing by certified or
registered mail, postage prepaid and return receipt requested. Unless another address is specified
in writing, such notices to Spectrum and Allergan shall be sent to the addresses indicated below:




	 	If to Allergan:  	 	Allergan Sales, LLC

2525 Dupont Drive

Irvine, CA 92612

Attn: General Counsel

Facsimile No.: (714) 246 6987
	 
	 	 	 	Allergan USA, Inc.

2525 Dupont Drive

Irvine, CA 92612

Attn: General Counsel

Facsimile No.: (714) 246 6987

	 
	 	 	 	Allergan, Inc.

2525 Dupont Drive

Irvine, CA 92612

Attn: General Counsel

Facsimile No.: (714) 246 6987
	 
	 	 	 	and
	 
	 	 	 	Dorsey & Whitney, LLP

38 Technology Drive

Irvine, CA 92618

Attn: David Hayes, Esq.

Facsimile No.: (949) 932-3601
	 
	 	If to Spectrum: 	 	 Spectrum Pharmaceuticals, Inc.

157 Technology Drive

Irvine, CA 92618

Attn: Legal Counsel

Facsimile No.: (949) 788-6706
	 
	 	 	 	with a copy to:
	 
	 	 	 	Cooley Godward Kronish LLP

5 Palo Alto Square

3000 El Camino Real

Palo Alto, CA 94306

Attn: Robert L. Jones, Esq.

Facsimile No.: (650) 849-7400




67









 






     14.12 Press Releases and Announcements. The Parties shall jointly issue a press
release concerning the transactions contemplated by this Agreement, with the prior written consent
of each Party, upon execution of this Agreement. Except as set forth in the preceding sentence,
neither Party may issue any press release or make any public announcement concerning the
transactions contemplated by this Agreement without the prior written consent of the other Party
(except for filings made to the U.S. Securities and Exchange Commission or similar requirements
under applicable Law in which case the Party proposing to make such release or announcement will
allow the other Party a reasonable opportunity to review and comment on such release or
announcement in advance of such issuance and will redact any copies of this Agreement (including
the Co-Promotion Agreement) to the extent reasonably permitted by applicable Law). Notwithstanding
the foregoing, any such release noted in the preceding sentence will be limited in its disclosure,
based on advice of legal counsel, only to information that is required for such disclosing Party to
be in compliance with applicable Law. Neither Party may disclose any information regarding the
prospective or expected or potential sales of Licensed Product without the prior written consent of
the other Party, at its sole discretion. Spectrum may not issue any publications concerning the
Licensed Product in the Field of Use, and, except as provided by Law or in the Co-Promotion
Agreement, Spectrum shall make no use of Allergan’s name or the Allergan Trademarks (as that term
is defined in the Co-Promotion Agreement).



     14.13 Use of Subcontractors. Each Party will remain obligated for the performance of
its obligations under this Agreement notwithstanding its use of subcontractors as permitted herein,
and, as between the Parties, Allergan shall be responsible for its subcontractors and Spectrum
shall be responsible for its subcontractors to the same extent as each Party is responsible
hereunder.



[Signature page to follow]





68









 





     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the Effective
Date.



	 	 	 	 	 
	 	ALLERGAN SALES, LLC

 	 
	 	By:  	/s/ Jeffrey L. Edwards	 
	 	 	Name:  	Jeffrey L. Edwards 	 
	 	 	Title:  	Vice President and

Chief Financial Officer 	 
	 
	 	ALLERGAN USA, INC.

 	 
	 	By:  	/s/ Jeffrey L. Edwards	 
	 	 	Name:  	Jeffrey L. Edwards 	 
	 	 	Title:  	Vice President and

Chief Financial Officer 	 
	 
	 	ALLERGAN, INC.

 	 
	 	By:  	/s/ Jeffrey L. Edwards 	 
	 	 	Name:  	Jeffrey L. Edwards 	 
	 	 	Title:  	Executive Vice President,

Finance and Business Development,

Chief Financial Officer 	 
	 




69









 





	 	 	 	 	 
	 	SPECTRUM PHARMACEUTICALS, INC.

 	 
	 	By:  	/s/ Rajesh C. Shrotriya	 
	 	 	Name:  	Rajesh C. Shrotriya 	 
	 	 	Title:  	Chief Executive Officer and

President 	 
	 




70









 





Schedule 1.1

Definitions




     (a) “611 Study” means the Phase III study as detailed within the current study protocol filed
with the FDA under ****.



     (b) “612 Study” means the Phase III study as detailed within the current study protocol filed
with the FDA under ****.



     (c) “Acquired Trademarks” means the Trademarks listed on Schedule 7.1, Exhibit A.



     (d) “Affiliate” means, with respect to a party, any Person (other than an individual) that
currently or in the future is directly or indirectly controlled by, under common control with, or
that controls such party. For the avoidance of doubt, any such Person shall cease to be an
“Affiliate” of such party under this Agreement when such Person is no longer directly or indirectly
controlled by, under common control with, or controlling such party. For purposes of this
definition, “controls,” “control” and “controlling” mean the direct or indirect ownership or
control (whether through contract or otherwise) of shares entitled to more than fifty percent (50%)
of the vote for the election of directors in the case of corporate entities and in the case of
non-corporate entities, more than fifty percent (50%) of the equity interest with the power to
direct management policies, or the direct or indirect power to direct or cause the direction of the
management or policies of the party.



     (e) “Allergan Group” means Allergan, its Affiliates and/or their respective employees, agents
and Third Party independent contractors.



     (f) “Allergan Solely Developed Know How” means all Know How (and all Intellectual Property
Rights therein) conceived or developed during the Term of this Agreement solely by the Allergan
Group (without the participation of the Spectrum Group or funding by Spectrum or its Affiliates) in
the course of Allergan’s performance of its obligations under the Agreement which relate to, or are
necessary or useful to manufacture, have manufactured, use, sell, offer for sale, have sold,
import, export or otherwise exploit the Licensed Product or manufacture Apaziquone (including
submitting for Regulatory Approval).



     (g) “Allergan Territory” means, collectively, the Royalty Territory and the Co-Promotion
Region.



     (h) “ANDA” means Abbreviated New Drug Application, as defined in the FD&C Act.



     (i) “Anticipated Approval Date” means the then-current date of expected first Regulatory
Approval (as well as any pricing and reimbursement approval, if necessary) for the Licensed Product
in the Field of Use in the Co-Promotion Region as determined by the JMC.




 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.


S1.1-1









 





     (j) “Apaziquone” means the compound having the structure set forth on Exhibit A to this
Schedule 1.1.



     (k) “Asia” means Bangladesh, Bhutan, Brunei, Burma (Myanmar), Cambodia, China, Hong Kong,
India, Indonesia, Japan, North Korea, Laos, Macao, Malaysia, Maldives, Mongolia, Nepal, Pakistan,
Philippines, Qatar, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, and Vietnam, as their
boundaries are defined as of the Effective Date, and including any successors of the foregoing
countries to the extent within the boundaries of the countries set forth above as of the Effective
Date.



     (l) “BCG Refractory” means a case of bladder cancer that ****.



     (m) “BCG Refractory Indication” means the intravesical use of the Licensed Product for the
treatment of BCG Refractory.



     (n) “BCG Refractory Study” means pre-clinical studies and clinical trials designed
specifically to support the application for Regulatory Approval of the Licensed Product for use in
the BCG Refractory Indication.



     (o) “****” means ****.



     (p) “Change in Control” means, with respect to a Party, (i) any sale, assignment or other
transfer of such Party’s voting securities by an equity holder resulting in any Third Party
owning, directly or indirectly, securities which comprise more than fifty percent (50%) of such
Party’s outstanding voting securities, (ii) the sale, assignment or other transfer of all or
substantially all of such Party’s assets (determined on a consolidated basis) to any Third Party,
(iii) the issuance or sale of voting securities, or any merger, consolidation, combination,
reorganization, recapitalization or other transaction or series of related transactions that
results in the ownership by any Third Party prior thereto owning, directly or indirectly,
securities which comprise more than fifty percent (50%) of such Party’s outstanding voting
securities, or (iv) acquisition by a Third Party of the direct or indirect power to cause the
direction of the management or policies of such Party.



     (q) “Change in Control Trigger” means a Change in Control with respect to Spectrum.



     (r) “Claim” means any claim, action, demand, inquiry or investigation.



     (s) “Closed-System Packaging” ****, an example of which is illustrated in Exhibit B to
Schedule 1.1.



     (t) “Confidential Information” has the meaning set forth in Section 9.1.



     (u) “Contract” means any contract, agreement, license, commitment, guarantee, undertaking,
memorandum of understanding, memorandum of agreement and any other




 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.


S1.1-2









 







understanding or arrangement, whether written or oral.



     (v) “Control” or “Controlled” means, with respect to any Know How or Intellectual Property
Rights, that a Party owns or has a license to.



     (w) “Co-Promotion Agreement” has the meaning set forth in Section 3.4(a).



     (x) “Co-Promotion Region” means the United States of America and its territories and
possessions, including Puerto Rico, Guam and the Virgin Islands.



     (y) “Development Costs” means the costs that are included in the JDP (including regulatory
filing fees in the Co-Promotion Region) that are actually incurred by a Party or for its account
and that are specifically attributable to the development of the Licensed Product in the Field of
Use pursuant to such Party’s obligations under the applicable JDP in the Co-Promotion Region,
provided that such costs are less than or equal to the amount specified therefor in the budget
associated with such JDP. Development Costs shall include out-of-pocket costs actually incurred by
each Party, and all internal costs (including FTE expenses calculated using the then-current FTE
Rate) incurred by a Party in connection with the development of the Licensed Product in the Field
of Use, which are specified in the JDP.



     (z) “Development Trigger” means any or all of the following: (i) Spectrum materially breaches
any of its development obligations (and fails to cure after **** written notice thereof from
Allergan); (ii) the screen failure rate for the 611 Study or 612 Study is equal to or greater than
****; (iii) Spectrum fails to achieve the last patient enrolled by at least **** after the final
specified Last Patient Enrollment (“LPE”) date for the 611 Study or 612 Study as set forth in the
611 Study and 612 Study JDP attached to this Agreement as of the Effective Date; (iv) Spectrum
fails to achieve the last patient enrolled by at least **** after the final specified LPE date for
the BCG Refractory Study as set forth in the BCG Refractory Study JDP attached to this Agreement as
of the Effective Date; (v) Spectrum materially breaches Section 3.1(c); or (vi) a Force Majeure
Event has occurred materially affecting Spectrum’s performance obligations pertaining to
development for a period of **** or longer.



     (aa) “Documents” means the original and all non-identical copies or reproductions of any
written, printed, typed or recorded matter, including letters, correspondence, facsimile, emails,
memoranda, instructions, reports, studies, surveys, minutes, pamphlets, notes, records, charts,
writings, drawings, tabulations, and accounting records, as well as all licenses, permits and
certificates from federal, state, local and foreign authorities.



     (bb) “****” means ****.



     (cc) “eCTD” means the electronic common technical document, as specified by the applicable
Governmental Authority.



     (dd) “EMEA” means the European Medicines Agency.




 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.


S1.1-3









 





     (ee) “EU” means the European Union.



     (ff) “EU Marketing Clearance” means Regulatory Approval of a Licensed Product (which in final
form is in Closed-System Packaging) in the Field of Use in the EU, including MAAs.



     (gg) “Extension Patents” has the meaning set forth in Section 6.4(e).



     (hh) “FDA” means the United States Food and Drug Administration, or any of its successor
agencies.



     (ii) “FD&C Act” means the United States Federal Food, Drug and Cosmetics Act, as amended from
time to time, and the regulations promulgated thereunder.



     (jj) “Field of Use” means use for the treatment of bladder cancer, or pre-bladder cancer,
conditions.



     (kk) “Final Licensed Product” means the then-current Licensed Product (in Closed-System
Packaging) in any stages of development during the Term up to and including the Licensed Product
first sold in commercial quantities to the public as an approved product by Allergan in the Field
of Use in the Co-Promotion Region and the EU.



     (ll) “First Commercial Sale” means sale of a Licensed Product in the Field of Use, after
product launch, for value.



     (mm) “Fiscal Quarter” means each calendar quarter within each Fiscal Year.



     (nn) “Fiscal Year” means January 1st through December 31st of any year.



     (oo) “FTE” means the equivalent of one person working full time for one twelve (12)-month
period in a research, development, commercialization, regulatory or other relevant capacity,
approximating **** hours per year. For clarity, a single individual who works more than **** hours
in a single year shall be treated as one FTE regardless of the number of hours worked.



     (pp) “FTE Rate” means an initial annual rate of **** per FTE. The FTE Rate for each FTE shall
include compensation and ****; but shall not include any costs described above specifically and
forming a part of the independent line items of the JDP budget and reimbursed as such. The FTE
Rate shall be adjusted annually to reflect ****.



     (qq) “Generic Product” has the meaning set forth in Section 6.4(d).



     (rr) “GMP/QSR Regulations” shall mean the Good Manufacturing Practices/Quality System
Regulations set forth in 21 C.F.R. Section 820.



     (ss) “Governmental Authority” means any legislative, executive, judicial, regulatory




 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.


S1.1-4









 







or administrative unit of any governmental entity (multinational, foreign, federal, state or
local) or any department, commission, board, agency, bureau, ministry, official, arbitrator
(public) or other similar body exercising executive, legislative, regulatory, administrative or
judicial authority or functions of or pertaining to government, including any authority or other
quasi-governmental entity established by any of the foregoing to perform any such functions.



     (tt) “Indications” means the Initial Indication and the BCG Refractory Indication.



     (uu) “Initial Indication” means the intravesical instillation of a Licensed Product into the
bladder for the treatment of non-muscle invasive bladder cancer, administered immediately ****after
transurethral resection.



     (vv) “Intellectual Property Rights” means any and all intellectual property and industrial
design rights, whether protected, created or arising under the Laws of the United States or any
other foreign jurisdiction, including the following: (i) patents, patent applications (along with
all patents issuing thereon), statutory invention registrations, divisions, continuations,
continuations-in-part, substitute applications of the foregoing and any extensions, reissues,
restorations and reexaminations thereof, and all rights therein provided by international treaties
or conventions; (ii) copyrights, mask work rights, database rights and design rights, whether or
not registered, published or unpublished, and registrations and applications for registration
thereof, and all rights therein whether provided by international treaties or conventions or
otherwise; (iii) trade secrets; and (iv) all other applications and registrations related to any of
the rights set forth in the foregoing clauses (i) — (iii) above. As used in this Agreement, the
term “Intellectual Property Rights” expressly excludes Trademarks.



     (ww) “JDP” is defined in Section 3.1(a).



     (xx) “Joint Intellectual Property” means all Know How, and all Intellectual Property Rights
therein, that is: (i) not Allergan Solely Developed Know How or Spectrum Intellectual Property but
that is conceived or developed jointly by one or more of the Allergan Group and one or more of the
Spectrum Group under or in performance of this Agreement, including the Co-Promotion Agreement, and
during the Term of this Agreement; or (ii) conceived or developed solely by or on behalf of either
Party (without the participation of the other Party, or their Affiliates, or their respective
employees, agents and Third Party independent contractors) but funded, at least in part, by the
other Party under or in performance of this Agreement, including the Co-Promotion Agreement, and
during the Term of this Agreement.



     (yy) “Know How” means, individually and collectively, the data, information, discoveries,
conceptions, ideas, inventions, innovations, improvements, enhancements, modifications,
technological developments, processes, procedures, methods, techniques, systems, designs,
protocols, formulae, formulations, molecules, compounds, compositions, specifications, trade
secrets, know how, show how, test results, studies, analyses, raw material sources, samples,
production technology, results of research and development, programs and information and works of
authorship, and all recordings, graphs, drawings, reports, analyses, and other




 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.


S1.1-5









 







Documents and other information in any form whether or not specifically listed herein and
whether or not patentable, copyrightable, or susceptible to any other form of legal protection.



     (zz) “Law” means any domestic or foreign federal, state, provincial or local statute, law
(including common law), ordinance, regulation, rule, code or governmental order, or any other
requirement or rule of law.



     (aaa) “Licensed Intellectual Property” means the Spectrum Intellectual Property and all of
Spectrum’s and its Affiliates’ rights in the Joint Intellectual Property.



     (bbb) “Licensed Product” means any formulation that includes Apaziquone that is suitable for
use in treating cancer or precancerous conditions via instillation in any body cavity, but
expressly excluding formulations for intravenous use, oral tablets or capsules for systemic use,
topical dermatological application or direct local administration to the brain.



     (ccc) “Losses” means all losses, expenses, damages, liabilities, fines, penalties,
assessments, judgments, settlements, costs and expenses (including reasonable external and internal
attorneys’ fees and court costs).



     (ddd) “MAA” means a Marketing Authorization Application, which is issued by the EMEA.



     (eee) “NDA” means a New Drug Application, as defined in the FD&C Act.



     (fff) “Net Sales” means, with respect to a given period of time, gross amounts invoiced by a
Party or its Affiliates in such period, less the following deductions from such gross amounts which
are actually incurred, allowed, paid, accrued or specifically allocated:




     (i) credits or allowances actually granted for damaged products, returns or rejections
of product, price adjustments and billing errors;




     (ii) governmental and other rebates (or equivalents thereof) granted to managed health
care organizations, pharmacy benefit managers (or equivalents thereof), federal,
state/provincial, local and other governments, their agencies and purchasers and reimbursers
or to trade customers;




     (iii) normal and customary trade, cash and quantity discounts, allowances and credits
actually allowed or paid;




     (iv) distribution services agreement fees allowed or paid to Third Party distributors;




     (v) transportation costs, including insurance, for outbound freight related to delivery
of the product to the extent included in the gross amount invoiced;



S1.1-6









 






     (vi) sales taxes, VAT taxes and other taxes directly linked to the sales of the
Licensed Product to the extent included in the gross amount invoiced; and




     (vii) any other items that reduce gross sales amounts as required by United States
Generally Accepted Accounting Principles applied on a consistent basis.



     Sales between or among a Party or its Affiliates shall be excluded from the computation of Net
Sales, but the subsequent final sales to Third Parties by such Affiliates shall be included in the
computation of Net Sales.



     (ggg) “Original Patent Rights” means the patent rights to any of the subject matter described
in, claimed in or covered by any of the following patents or patent applications: **** and any
continuing applications of the foregoing including divisions, substitutions and
continuation-in-part applications, any patents issuing on said applications or continuing
applications including reissues, re-examinations and extensions, and any corresponding foreign
applications or patents.



     (hhh) “Patent Rights” means: (i) the Original Patent Rights; and (ii) any and all other patent
rights (including covenants not to sue) Controlled solely (as between the Parties) by Spectrum or
its Affiliates whether now or during the Term of this Agreement which relate to, or are necessary
or useful to manufacture, have manufactured, use, sell, offer for sale, have sold, import, export
or otherwise exploit the Licensed Product (including submitting for Regulatory Approval), and any
continuing applications thereof including divisions, substitutions and continuation-in-part
applications, any patents issuing on said applications or continuing applications including
reissues, re-examinations and extensions, and any corresponding foreign applications or patents.



     (iii) “Person” means an individual, partnership, corporation, joint stock company, estate,
trust (including a business trust), limited liability company, unincorporated association, joint
venture or other entity or a Governmental Authority.



     (jjj) “PSMM” is defined in the Co-Promotion Agreement.



     (kkk) “Regulatory Approval” means all registrations, approvals (including labeling, pricing,
or reimbursement approvals), licenses (including product and/or establishment licenses) and
authorizations required for the marketing, importation, exportation, transport, storage,
manufacture, commercial use and sale of a product in a country or jurisdiction.



     (lll) “Royalty-Bearing Net Sales” means (a) a Party’s and its Affiliates’ Net Sales; less (b)
Net Sales invoiced by such Party or any of its Affiliate(s) for sales to its or their
Sublicensee(s); and plus (c) Sublicensee Net Sales reported by any and all of the Sublicensees of
such Party or any of its Affiliate(s) (after such Party makes its adjustments set forth in the
definition of “Net Sales” in subsections (fff) (i) — (vii) inclusive above, if any).



     (mmm) “Royalty-Bearing Product” means a Licensed Product in the Field of Use that is




 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.


S1.1-7









 





developed under this Agreement.




     (nnn) “Royalty Term” has the meaning set forth in Section 6.4(e).



     (ooo) “Royalty Territory” means all countries and territories of the world, except for Asia
and the Co-Promotion Region.



     (ppp) “sNDA” means a Supplemental New Drug Application, as defined in the FD&C Act.



     (qqq) “Spectrum Group” means Spectrum, its Affiliates and/or their respective employees,
agents and Third Party independent contractors.



     (rrr) “Spectrum Intellectual Property” means all of the: (i) Patent Rights; (ii) Know How (and
all Intellectual Property Rights therein) Controlled solely (as between the Parties) by Spectrum or
its Affiliates whether now or during the Term of this Agreement which relate to, or are necessary
or useful to manufacture, have manufactured, use, sell, offer for sale, have sold, import, export
or otherwise exploit the Licensed Product (including submitting for Regulatory Approval); and (iii)
Spectrum Solely Developed Know How (to the extent not already covered in subsections (i) and (ii)).



     (sss) “Spectrum Solely Developed Know How” means all Know How (and all Intellectual Property
Rights therein) conceived or developed during the Term of this Agreement solely by the Spectrum
Group (without the participation of the Allergan Group or funding by Allergan or its Affiliates) in
the course of Spectrum’s performance of its obligations under the Agreement which relate to, or are
necessary or useful to manufacture, have manufactured, use, sell, offer for sale, have sold,
import, export or otherwise exploit the Licensed Product (including submitting for Regulatory
Approval).



     (ttt) “Spectrum Territory” means all countries and territories in Asia.



     (uuu) “Sublicensee” means a Third Party to whom a Party (or its Affiliate(s)) (i) will have
granted a license or sublicense under its rights under this Agreement (which for Allergan is a
sublicense under the Licensed Intellectual Property, and for Spectrum is a license under Spectrum’s
retained rights) to sell, offer for sale, or import Royalty-Bearing Product in one or more
countries, and (ii) will have granted the right to distribute Royalty-Bearing Product wherein such
Third Party pays to such Party (or its Affiliate(s)) granting such license (or sublicense) a
royalty based upon the revenues received by the such Third Party for the sale of Royalty-Bearing
Product; provided, however, “Sublicensee” will not include (A) any Third Party who receives a
license to use a unit of Royalty-Bearing Product arising by operation of law or otherwise, or as a
consequence of the purchase of said unit of Royalty-Bearing Product, or (B) any Third Party where
such Party (or its Affiliate(s)) granting the license (or sublicense) sells Royalty-Bearing Product
under a Trademark license or under a fixed price to such distributor for resale by such distributor
and in each case such Party (or its Affiliate(s)) is not compensated based on the resale price of
such Royalty-Bearing Product by such distributor.



S1.1-8









 





     (vvv) “Sublicensee Net Sales” means, with respect to a given period of time, gross amounts
invoiced by a Sublicensee of a Party or any of its Affiliates in such period, less the following
deductions from such gross amounts which are actually incurred, allowed, paid, accrued or
specifically allocated:




     (i) credits or allowances actually granted for damaged products, returns or rejections
of product, price adjustments and billing errors;




     (ii) governmental and other rebates (or equivalents thereof) granted to managed health
care organizations, pharmacy benefit managers (or equivalents thereof), federal,
state/provincial, local and other governments, their agencies and purchasers and reimbursers
or to trade customers;




     (iii) normal and customary trade, cash and quantity discounts, allowances and credits
actually allowed or paid;




     (iv) distribution services agreement fees allowed or paid to Third Party distributors;




     (v) transportation costs, including insurance, for outbound freight related to delivery
of the product to the extent included in the gross amount invoiced;




     (vi) sales taxes, VAT taxes and other taxes directly linked to the sales of the
Licensed Product to the extent included in the gross amount invoiced; and




     (vii) any other items that reduce gross sales amounts as required by United States
Generally Accepted Accounting Principles applied on a consistent basis.



     (www) “Term” has the meaning set forth in Section 13.1.



     (xxx) “Third Party” means any Person other than Allergan or Spectrum.



     (yyy) “TPP” means targeted product profile, the initial draft of which is attached as Exhibit
C to this Schedule 1.1.



     (zzz) “Trademark Assignment Agreement” has the meaning set forth in Section 7.1.



     (aaaa) “Trademarks” means rights in trademarks, trade names, service marks, service names,
design marks, logos, slogans, trade dress, or similar rights with respect to indicators of origin,
whether registered or unregistered, as well as rights in internet domain names, uniform resource
locators and e-mail addresses.



     (bbbb) “Upfront Payment” has the meaning set forth in Section 6.1.



     (cccc) “US Marketing Clearance” means Regulatory Approval of a Licensed Product (which in
final form is in Closed System Packaging) in the Field of Use in the Co-Promotion



S1.1-9









 







Region, including NDAs and sNDAs.



S1.1-10









 





Exhibit A to Schedule 1.1

Apaziquone





     




A-1











 





Exhibit A to Schedule 1.1 Apaziquone Chemical Structure









     




 









 










Exhibit B to Schedule 1.1

Example of Closed System Packaging



     



B-1




 









 








Exhibit B to Schedule 1.1 Closed System

Illustration of Closed-System Packaging




     ****





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




 









 










Exhibit C to Schedule 1.1

TPP




     



C-1





 









 








Exhibit C to Schedule 1.1 TPP

EOquin® Target Product Profile Document




****






 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.






 









 








Minimum VS. Expected TPP’s




****






 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.






 









 








Schedule 3.1(a)

Joint Development Plan




****






 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





S3.1(a)-1





 









 








Schedule 3.1(c)

Key Development Personnel




	 	 	 
	Key Employee Name	 	Term
	1. ****or his replacement under Section 3.1(c)

	 	Latter of ****
	2. ****or her replacement under Section 3.1(c)

	 	Latter of ****
	3. ****or his replacement under Section 3.1(c)

	 	Latter of ****
	4. ****or his replacement under Section 3.1(c)

	 	Latter of ****
	5. ****or his replacement under Section 3.1(c)

	 	****
	6. ****or his replacement under Section 3.1(c)

	 	****
	7. ****or his replacement under Section 3.1(c)

	 	****
	8. ****or his replacement under Section 3.1(c)

	 	****








 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





S3.1(c)-1





 









 








Schedule 3.2 (f)(i)

List of Subcontractors




****






 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





S3.2(f)(i)-1





 









 








Schedule 3.2(f)(ii)

Hospitals and Institutions that are clinical trial sites




****






 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





S3.2(f)(ii)-1





 









 








Schedule 3.3(b)

Spectrum Manufacturing Agreements




****






 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





S3.3(b)-1





 









 








Schedule 3.3(d)

Specifications




****






 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





S3.3(d)-1





 









 








Schedule 3.4(a)

Co-Promotion Agreement




     




S3.4(a)-1





 











 





EXECUTION COPY




CO-PROMOTION AGREEMENT




     This Co-Promotion Agreement (this “Agreement”) is made and entered into effective as of
October 28, 2008 (the “Effective Date”) by and among Allergan Sales, LLC, a Delaware corporation
with its principal place of business at 2525 Dupont Drive, Irvine, California 92612 (“Allergan
Sales”), Allergan USA, Inc., a Delaware corporation with its principal place of business at 2525
Dupont Drive, Irvine, California 92612 (“Allergan USA”, and, collectively with Allergan Sales,
“Allergan”), and Spectrum Pharmaceuticals, Inc. (“Spectrum”), a Delaware corporation with its
principal place of business at 157 Technology Drive, Irvine, CA 92618. Allergan and Spectrum are
collectively referred to herein as the “Parties” and individually as a “Party”.



RECITALS




     WHEREAS, Allergan, Allergan, Inc. and Spectrum have entered into a License, Development,
Supply and Distribution Agreement dated October 28, 2008 (the “License Agreement”) which includes
agreement to a pre-launch JMP;



     WHEREAS, the License Agreement grants Allergan certain exclusive rights to make, use and sell
the Licensed Product; and



     WHEREAS, the Parties desire for Spectrum and Allergan (via Allergan USA) to co-promote the
Licensed Product in the Field of Use in the Co-Promotion Region pursuant to the terms and
conditions of this Agreement and the License Agreement.



     NOW THEREFORE, in consideration of the foregoing promises and the mutual representations,
warranties, covenants and agreements contained herein and in the License Agreement, and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:



ARTICLE 1

DEFINITIONS




     1.1 Definitions. All capitalized terms not otherwise defined herein shall have the
meaning given to them in the License Agreement; provided, however, that when used in this
Agreement, “Licensed Product” means Royalty-Bearing Product. The following terms shall have the
meanings set forth next to them when used in this Agreement:



          (a) “Call” or “Calling” means an interactive, face-to-face visit by a member of a Party’s
Sales Force to a member of the Target Audience to discuss the patient and physician benefits and
features associated with the Licensed Product’s FDA-approved indicated uses in the Field of Use,
safety, effectiveness, contraindications, side effects, warnings and other relevant characteristics
of the Licensed Product in a fair and balanced manner consistent with the
requirements of the FD&C Act, the PDMA and all other applicable Laws, codes and policies,
using the Labeling and Promotional Materials.




 









 










          (b) “Costs of Goods Sold” means fully-burdened standard costs of supplying Licensed Product in
the Field of Use for the Co-Promotion Region calculated in accordance with Allergan’s accounting
methods consistently applied, which methodology will be calculated in compliance with local
generally accepted accounting principles or International Financial Reporting Standards. Standard
costs include raw materials, active pharmaceutical ingredient, components, labor and overhead
attributed to the production, processing, quality control, labeling, packaging, shipping and
warehousing of the Licensed Product.



          (c) “DDMAC” means the Division of Drug Marketing, Advertising and Communication.



          (d) “Deficiency” means, for any Deficient Quarter, with respect to the applicable Party, the
percentage calculated using the following formula: ((A-B)/A), where A is the number of PDEs (as
defined below) assigned to such Party under the then-current JMP for such Fiscal Quarter, and B is
the number of PDEs actually delivered by the Sales Force of such Party during such Fiscal Quarter.



          (e) “Deficient Quarter” means, with respect to a Party, the Fiscal Quarter during which the
Sales Force of such Party delivered fewer PDEs than the number of PDEs assigned to such Party for
such Fiscal Quarter under the then-current JMP.



          (f) “Gross Margin” means Royalty-Bearing Net Sales of Licensed Product in the Co-Promotion
Region less Costs of Goods Sold.



          (g) “Labeling” means (i) the FDA full prescribing information for the Licensed Product in the
Field of Use, including any required patient information, and (ii) all labels and other written,
printed or graphic matter upon any container, wrapper or any package insert or outsert utilized
with or for the Licensed Product in the Field of Use.



          (h) “PDMA” means the Prescription Drug Marketing Act of 1987, as amended from time to time,
and the regulations promulgated thereunder.



          (i) “Promotional Material(s)” means all training materials and all written, printed, graphic,
electronic, audio or video matter, including journal advertisements, sales visual aids, leave
items, formulary binders, reprints, direct mail, direct-to-consumer advertising, Internet postings,
broadcast advertisements, and sales reminder aids (for example, scratch pads, pens and other such
items), in each case created by Allergan or on its behalf, reviewed by the JMC and used or intended
for use by the Sales Forces in connection with any promotion of the Licensed Product hereunder, but
excluding the Labeling.



          (j) “Promotional, Sales, Marketing, and Medical Affairs Expenses” or “PSMM” means those costs
which are incurred by a Party or for its account which are specifically
identifiable to the promotion, marketing, distribution and customer support, medical affairs
support, Calling and detailing of the Licensed Product in the Field of Use in the Co-Promotion






2









 









Region during the Term and related professional promotion and education expenses (to the extent not
performed by the Sales Forces), including television and electronic advertisements, advertorials
and infomercials, print advertisements, direct mail, exhibitions at seminars and conferences,
promotional samples, sales and promotional literature or other materials and market research, and
Promotional Materials, in each case consistent with the JMP and otherwise with the terms of this
Agreement.




          (k) “Sales Force” means each Party’s respective sales personnel Calling on the Target Audience
with regard to the Licensed Product in the Field of Use in the Co-Promotion Region that are
qualified to do so pursuant to the terms and conditions of this Agreement.



          (l) “Target Audience” means the Persons identified as such in the then-current JMP.



     1.2 Interpretation. This Agreement shall be governed by the following rules of
construction, unless otherwise specified by this Agreement: (a) words of one gender shall be
deemed to include words of other genders; (b) any reference to an Article, Section, Exhibit,
clause, subclause, paragraph, subparagraph, Schedule or Recital is a reference to an Article,
Section, Exhibit, clause, subclause, paragraph, subparagraph, Schedule or Recital of this
Agreement; (c) any reference to any statute shall be construed as including all statutory
provisions consolidating, amending or replacing such statute; (d) the terms “hereof,” “hereby,”
“hereto,” “hereunder” and similar terms shall refer to this Agreement as a whole; (e) the word
“including” and words of similar import means “including, without limitation” and “including, but
not limited to”; (f) the headings contained herein are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement; (g) this Agreement shall be
construed without regard to any presumption or rule requiring construction or interpretation
against the Party drafting or causing any instrument to be drafted; (h) all references to “dollars”
or “$” refer to United States dollars; and (i) all references to “days” refer to calendar days.



ARTICLE 2

OBLIGATIONS




     2.1 Performance. Allergan shall have the sole right and responsibility for fielding
personnel and taking actions related to the development of Promotional Materials, medical affairs,
managed care contracting and all other promotional and marketing matters and distribution of the
Licensed Product in the Field of Use in the Co-Promotion Region during the Term, except as set
forth below:



          (a) each Party shall perform their respective obligations under the JMP;



          (b) each Party shall build and deploy a Sales Force that can adequately deliver the specified
number of primary detail equivalents (“PDE”) as set forth in the then-current JMP. Each Party
shall, throughout the Term, deliver **** of the overall PDEs as set forth in the then-current JMP;
provided, however, that after the annual call plan is established prior to the
beginning of a Fiscal Year, any adjustments in the quarterly PDE goals during such Fiscal Year





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




3









 









cannot be increased by more than **** of the amounts set forth in the annual call plan without the
written consent of both Parties;




          (c) Spectrum may, in its sole discretion, use its own medical affairs field based personnel to
assist its medical affairs support efforts for the Licensed Product in the Field of Use in the
Co-Promotion Region during the Term for on label medical information support only subject to the
conditions in this Section 2.1(c):




     i. Spectrum shall inform Allergan at least two (2) Fiscal Quarters prior to exercising
its right to field its own medical affairs function. The final number of Spectrum field
based personnel and their pro rata allocations per Section 2.1(c)(iii) must be approved by
Allergan, with reasonable consent not being withheld; and




     ii. Spectrum’s field based medical affairs activities must always conform to the
requirements herein, including compliance with Sections 2.2(c), (d), and (e), and to the
standards set by Allergan’s regulatory affairs department; and




     iii. the costs and expenses incurred by Spectrum in connection with such function after
the First Commercial Sale of the Licensed Product in the Field of Use in the Co-Promotion
Region (on a pro rata basis to the extent allocated to the support of the Licensed Product
in the Field of Use in the Co-Promotion Region) shall be included in the PSMM. Prior to the
First Commercial Sale of the Licensed Product in the Field of Use in the Co-Promotion
Region, compensation for such function shall be at Spectrum’s sole expense; and



          (d) Spectrum may, in its sole discretion, maintain a small marketing alliance management
function, equivalent to one (1) FTE, to support its marketing efforts for the Licensed Product in
the Field of Use in the Co-Promotion Region during the Term. Compensation for this function shall
be included in the calculation of the PSMM after the First Commercial Sale of the Licensed Product
in the Field of Use in the Co-Promotion Region. Prior to the First Commercial Sale of the Licensed
Product in the Field of Use in the Co-Promotion Region, compensation for this function shall be at
Spectrum’s sole expense. Spectrum shall not allocate any additional FTEs to such function without
prior approval by the JMC.



     2.2 Promotion of the Licensed Product.



          (a) The Parties acknowledge that their Sales Forces must be trained, qualified and ready to
launch the marketing, promotion, Calling and detailing of the Licensed Product in the Field of Use
in the Co-Promotion Region on the date of launch as specified in the then-current JMP. During the
Term, after US Marketing Clearance has been received for the Initial Indication for the Licensed
Product, and subject to the terms and conditions of this Agreement, the Parties shall deploy their
respective Sales Forces to market, promote, Call and detail the Licensed Product in the Field of
Use in the Co-Promotion Region in accordance with the then-current JMP.





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




4









 










          (b) Allergan shall be solely responsible for preparing all training materials with regard to
the Licensed Product in the Field of Use in the Co-Promotion Region, such training to include a
reasonable proficiency examination, with oversight by the JMC. Both Parties agree to only utilize
sales training materials that have been reviewed by the JMC and approved by Allergan’s regulatory
department. Training shall include a home study period and an initial classroom-setting training
program, which shall include medical and technical information about use of the Licensed Product in
the Field of Use. The JMC shall direct which personnel shall receive training on the use of the
Licensed Product in the Field of Use and which Party shall perform the training. Only personnel
who have passed the proficiency examination with a minimum 85% proficiency are qualified to
promote, market, Call or detail the Licensed Product in the Field of Use in the Co-Promotion
Region.



          (c) The Parties shall in all material respects conform their practices and procedures relating
to the marketing, detailing, Calling and promotion of the Licensed Product in the Field of Use in
the Co-Promotion Region to Allergan’s policies and procedures, as amended by Allergan from time to
time (the “Allergan Policies”), but in no event less than the requirements of all applicable Laws
and guidelines, including the FD&C Act, the PDMA, the requirements of DDMAC, the Federal Health
Care Programs Anti-Kickback Law, 42 U.S.C. 1320a-7b(b), the Pharmaceutical Research and
Manufacturers of America (“PhRMA”) Code of Pharmaceutical Marketing Practices (the “PhRMA Code”)
and the American Medical Association (“AMA”) Guidelines on Gifts to Physicians from Industry (the
“AMA Guidelines”), as the same may be amended from time to time. Each Party shall promptly notify
the other Party of and provide the other Party with a copy of any correspondence or other reports
with respect to the marketing, detailing, Calling and/or promotion of the Licensed Product in the
Field of Use in the Co-Promotion Region submitted to or received from the U.S. Department of
Health and Human Services or its components (including the FDA and the Office of the Inspector
General), PhRMA or the AMA relating to such Laws and guidelines.



          (d) The Parties shall in all material respects conform their practices and procedures relating
to educating the medical community in the Co-Promotion Region with respect to the Licensed Product
in the Field of Use to the Allergan Policies, the Accreditation Council for Continuing Medical
Education (“ACCME”) Standards for Commercial Support of Continuing Medical Education (the “ACCME
Standards”) and any applicable FDA regulations or guidelines, as the same may be amended from time
to time. Each Party shall promptly notify the other Party of and provide the other Party with a
copy of any correspondence or other reports submitted to or received from the ACCME with respect to
the Licensed Product in the Field of Use in the Co-Promotion Region relating to the ACCME Standards
or such FDA regulations or guidelines.



          (e) Allergan shall provide Spectrum, and Spectrum shall provide each member of its Sales Force
(prior to performance of services hereunder), with a copy of the then-current
Allergan code of ethics (such copy to be included along with Spectrum’s standard employee
manual). Spectrum shall ensure that each member of its Sales Force acknowledges receipt of






5









 









and agrees to comply with the then-current Allergan code of ethics in performing services under
this Agreement.




          (f) Allergan and Spectrum shall each provide an electronic call reporting system to each
member of their respective Sales Force. The deployed system shall be in compliance with Allergan’s
Policies and all PDMA regulations and other applicable regulations. The applicable member of each
Sales Force shall produce detailed electronic notes following each Call. Each member of the Sales
Force shall be responsible for Call planning and Call routing, using sales data to plan, monitor
and measure territory performance, as well as reporting to the JMC useful marketing information
obtained in the Co-Promotion Region regarding the Licensed Product in the Field of Use, competitors
and product trends. Within thirty (30) days after the end of each calendar month, each Party will
deliver a report to the other Party summarizing its Sales Force’s activity collected from their
respective electronic call reporting system in the prior calendar month. Specific reportable
information shall be determined by the JMC but shall, at minimum, include: (i) total number of PDEs
reported for each Sales Force personnel, by month, by Fiscal Quarter and Year-To-Date; (ii)
aggregate PDEs by month, by Fiscal Quarter and Year-To-Date to each unique member of the Target
Audience; and (iii) roll-up of each Party’s monthly, Fiscal Quarter and Year-To-Date aggregate PDEs
versus the monthly, by Fiscal Quarter and Year-To-Date goal as specified in the JMP. Such
information shall be reported in a Microsoft Excel format or such other format as reasonably
requested by Allergan.



          (g) For any Deficient Quarter in which Spectrum’s Sales Force delivers fewer than one hundred
percent (100%) of the PDEs assigned to Spectrum under the then-current JMP for such Fiscal Quarter:




     i. if the Deficiency is less than **** for such Deficient Quarter, the Spectrum Sales
Force shall cure the Deficiency by delivering the deficient number of PDEs during the Fiscal
Quarter immediately following the Deficient Quarter in addition to its required PDEs for
such Fiscal Quarter as set forth in the then-current JMP;




     ii. if the Deficiency is equal to or more than **** but less than **** for such
Deficient Quarter, then: (A) the Spectrum Sales Force shall cure the Deficiency by
delivering the deficient number of PDEs during the Fiscal Quarter immediately following the
Deficient Quarter in addition to its required PDEs for such Fiscal Quarter as set forth in
the then-current JMP; and (B) after calculation of the profit or loss for such Deficient
Quarter, as set forth in Section 3.4 and Exhibit A, the Parties will share profit or loss
for such Deficient Quarter as follows: if there is a profit, **** of the profit to Spectrum
and **** to Allergan; if there is a loss, **** of the loss to Allergan and **** to Spectrum;
and




     iii. if the Deficiency is equal to or more than **** for such Deficient Quarter, then:
(A) the Spectrum Sales Force shall cure the Deficiency by delivering the deficient number of
PDEs during the Fiscal Quarter immediately following the Deficient Quarter





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




6









 











in addition to its required PDEs for such Fiscal Quarter as set forth in the then-current
JMP; and (B) after calculation of the profit or loss for such Deficient Quarter, as set
forth in Section 3.4 and Exhibit A, the Parties will share profit or loss for such Deficient
Quarter as follows: if there is a profit, **** of the profit to Spectrum and **** to
Allergan; if there is a loss, **** of the loss to Allergan and **** to Spectrum.



          (h) For any Deficient Quarter in which Allergan’s Sales Force delivers fewer than one hundred
percent (100%) of the PDEs assigned to Allergan under the then-current JMP for such Fiscal Quarter:




     i. if the Deficiency is less than **** for such Deficient Quarter, the Allergan Sales
Force shall cure the Deficiency by delivering the deficient number of PDEs during the Fiscal
Quarter immediately following the Deficient Quarter in addition to its required PDEs for
such Fiscal Quarter as set forth in the then-current JMP;




     ii. if the Deficiency is equal to or more than **** but less than **** for such
Deficient Quarter, then: (A) the Allergan Sales Force shall cure the Deficiency by
delivering the deficient number of PDEs during the Fiscal Quarter immediately following the
Deficient Quarter in addition to its required PDEs for such Fiscal Quarter as set forth in
the then-current JMP; and (B) after calculation of the profit or loss for such Deficient
Quarter, as set forth in Section 3.4 and Exhibit A, the Parties will share profit or loss
for such Deficient Quarter as follows: if there is a profit, **** of the profit to Allergan
and **** to Spectrum; if there is a loss, **** of the loss to Spectrum and **** to Allergan;
and




     iii. if the Deficiency is equal to or more than **** for such Deficient Quarter, then:
(A) the Allergan Sales Force shall cure the Deficiency by delivering the deficient number of
PDEs during the Fiscal Quarter immediately following the Deficient Quarter in addition to
its required PDEs for such Fiscal Quarter as set forth in the then-current JMP; and (B)
after calculation of the profit or loss for such Deficient Quarter, as set forth in Section
3.4 and Exhibit A, the Parties will share profit or loss for such Deficient Quarter as
follows: if there is a profit, **** of the profit to Allergan and **** to Spectrum; if
there is a loss, **** of the loss to Spectrum and **** to Allergan.



          (i) For a Deficient Quarter in which both Parties’ Sales Forces deliver fewer than one hundred
percent (100%) of the PDEs assigned to such Party under the then-current JMP for such Fiscal
Quarter: (A) each Party’s Sales Force shall cure its Deficiency by delivering the deficient number
of PDEs during the Fiscal Quarter immediately following the Deficient Quarter in addition to its
required PDEs for such Fiscal Quarter as set forth in the then-current JMP; and (B) the Party
having the smaller actual Deficiency shall be deemed to have delivered **** of the PDEs assigned to
it under the then-current JMP (for sole purposes of this Section 2.2(i)(B)), and
its Deficiency for the purpose of determining the consequence under Section 2.2(g) or (h)
above shall be reduced to ****, and the Party having the larger actual Deficiency shall, for the
purpose





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




7









 









of determining the consequence under Section 2.2(g) or (h) above, have its Deficiency reduced by
****, and shall be subject to the applicable terms of Section 2.2(g) or (h). For example, for a
Deficient Quarter in which Spectrum’s Deficiency is **** and Allergan’s Deficiency is ****: (i)
Spectrum shall be deemed to not have any Deficiency (for sole purposes of this Section 2.2(i)(B))
in which event none of the provisions under Section 2.2(g) shall apply to such Deficiency; and (ii)
Allergan shall be deemed to have a Deficiency of ****, in which event Section 2.2(h)(i) (instead of
Section 2.2(h)(ii)) shall apply to such Deficiency.




          (j) Deficiencies that are carried forward to the next Fiscal Quarter under Sections 2.2(g),
(h) or (i) shall be included in the calculation of the PDEs assigned in the successive Fiscal
Quarters, until satisfied in full.



          (k) Each Party shall be entitled to audit the records of the other Party (as well as the
records of the other Party’s subcontractors) to verify such other Party’s delivery of PDEs under
this Agreement pursuant to the audit provisions of the License Agreement.



          (l) At each meeting of the JMC, the Parties shall furnish to each other a summary of
information coming to their attention in the Co-Promotion Region concerning introductions and
promotional activities of products competitive with the Licensed Product in the Field of Use, and
of any serious complaints regarding the Licensed Product, it being understood that there is no
obligation on the Parties to solicit such information.



          (m) At Allergan’s reasonable request, Spectrum shall provide Allergan with copies of any
written communications disseminated by Spectrum generally to its Sales Force promoting the Licensed
Product or relating to any marketing strategy for the Licensed Product.



          (n) In connection with the marketing, promotion, Calling and detailing of the Licensed Product
hereunder, neither Party nor any member(s) of their respective Sales Forces shall make any
statement, representation or warranty, oral or written, to Third Parties, concerning the Licensed
Product that is inconsistent with, or contrary to, the Labeling or Promotional Materials or that is
disparaging to the Licensed Product, the other Party, or any of other Party’s Affiliates, officers,
directors or employees.



     2.3 Promotional Materials.



          (a) During the Term, the JMC shall determine which Promotional Materials, including
positioning and key messages, are necessary or appropriate to be distributed in the Co-Promotion
Region under the JMP. Allergan shall create and develop such Promotional Materials, and such
Promotional Materials shall be subject to review by the JMC. The Parties shall establish a
tracking system or utilize Allergan’s tracking system (if appropriate and mutually agreed) for
Promotional Materials to ensure that all such Promotional Materials are accurately tracked and
submitted to the FDA. Allergan will file all Promotional Materials with the FDA if, and as
required, by FDA regulations.





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




8









 










          (b) Spectrum shall not create, develop or distribute any sales, promotional content or other
similar materials (including Labeling) relating to the Licensed Product in the Co-Promotion Region
except as set forth in this Section. All oral communications that Spectrum or its Sales Force has
with Third Parties relating to the Licensed Product shall conform to the pre-approved talking
points (which shall be the same for the Sales Force of both Parties) as agreed to within the JMC
and provided by Allergan in writing. Spectrum shall not be required to distribute any Promotional
Materials prepared after the Effective Date which: (i) do not mention the Licensed Product; (ii)
are inaccurate or misleading; or (iii) were not approved by the JMC and Allergan. Spectrum shall
distribute Promotional Materials of the type identified in this subsection in accordance with the
JMP and with the terms of this Agreement. Print marketing materials produced by Allergan for use
for the Target Audience shall include Spectrum’s name, and shall display the names and logos of
Allergan and Spectrum in equal prominence. Except as specifically permitted by this Section or
under the License Agreement, neither Party shall distribute or have distributed any materials
bearing the name or any Trademarks of the other Party without the prior written approval of the
other.



          (c) Allergan shall own all right, title and interest in and to the Promotional Materials,
including all Intellectual Property Rights and all Trademarks appurtenant thereto but excluding any
rights in or to the Spectrum name (the “Allergan Trademarks”). Allergan hereby grants to Spectrum
the right, during the Term, to use Promotional Materials generated pursuant to the JMP in
connection with its promotion of the Licensed Product and in accordance with this Agreement.
Spectrum shall only be able to use the Allergan Trademarks in connection with the Licensed Product
as required by law. In addition, Spectrum shall be able to use the Allergan Trademarks that are
used in connection with the Licensed Product on its website and in press releases with the prior
written consent of Allergan. All rights of Allergan in and to the Allergan Trademarks not
expressly granted under this Article 2 are reserved by Allergan.



          (d) Spectrum shall promptly notify Allergan of any apparent infringement by a Third Party of
any of the Allergan Trademarks.



          (e) Spectrum acknowledges and agrees that Allergan is the owner of all rights in the Allergan
Trademarks, that all use of the Allergan Trademarks shall inure to the benefit of Allergan, that
Spectrum will not take any action which is inconsistent with Allergan’s ownership of the Allergan
Trademarks, and that upon termination or expiration of this Agreement, all rights in the Allergan
Trademarks shall remain the property of Allergan.



     2.4 Subcontracting. Spectrum may not subcontract its rights hereunder to Third
Parties without the prior written consent of Allergan. Allergan may freely subcontract is rights
hereunder except to the extent restricted under Section 2.3(a) of the License Agreement.



ARTICLE 3

SALES AND EXPENSES







9









 










     3.1 Sales and Distribution. Notwithstanding the JMP or any other provision herein and
in the License Agreement to the contrary, Allergan shall have the sole right and responsibility for
establishing and modifying the terms and conditions with respect to the sale of Licensed Product in
the Field of Use in the Co-Promotion Region, including, without limitation, the price at which the
Licensed Product will be sold, reimbursement, and any discounts attributable to payments on
receivables and the distribution of the Licensed Product. Allergan shall make the actual sale of
all Licensed Product to each customer, and shall book each sale.



     3.2 Budget. Without limiting the obligations set forth in Section 2.1, each Party
shall spend the amounts set forth in the JMP as their spending obligations thereunder.



     3.3 Promotional, Sales, Marketing, and Medical Affairs Expenses. Spectrum and
Allergan shall each be responsible for the expenses it incurs, and the Parties shall share equally
in the PSMM within the Co-Marketing Region on a fifty-fifty basis as part of the profit sharing
discussed in Section 3.4 below and illustrated in Exhibit A. Each Party warrants and represents
that it will maintain accurate and complete records of the PSMM incurred by it hereunder, including
the nature of each such expense. Pursuant to Section 3.2, each Party represents and warrants that
it will only incur and submit to the other Party expenses that are consistent with its commercial
rights in the Co-Promotion Region and as set forth in the then-current JMP. For each Fiscal Year
during the Term, each Party shall issue a report to the other Party at each meeting of the JMC,
setting forth the PSMM incurred by such Party since the immediately preceding meeting of the JMC.
Each Party shall be entitled to audit the source data and documents used to compile the PSMM
reports of the other Party pursuant to the audit provisions of the License Agreement.



     3.4 Profit and Loss. The Parties shall account for the profits and loss arising from
the sale of Licensed Product in the Field of Use in the Co-Promotion Region pursuant to the terms
of Exhibit A. Profit and loss will be shared equally by the Parties on a fifty-fifty basis as
illustrated in Exhibit A subject to adjustments pursuant to Sections 2.2(g), (h), and (i).



ARTICLE 4

OPERATING PROCEDURES




     4.1 Exchange of Information.



          (a) Each Party shall provide the other Party with such information as the other Party may
reasonably request during the Term in order to support the requesting Party’s Sales Force’s
promotion, marketing, Calling and detailing of the Licensed Product in the Field of Use in the
Co-Promotion Region.



          (b) During the Term and subject to the provisions of this Agreement, each Party will provide
the other with all information relevant to the marketing, detailing, Calling and promotion of the
Licensed Product in the Field of Use within the Co-Promotion Region within a






10









 









reasonable time after such information becomes known to the Party; provided,
however, that such information is not received from an independent Third Party under a
secrecy obligation.




          (c) Each Party shall promptly communicate to the other Party all comments, statements,
requests and inquiries of the medical profession or any other Third Parties relating to the
Licensed Product in the Field of Use in the Co-Promotion Region that are out of the ordinary, or
not covered by the Labeling, of which such Party becomes aware. All responses to the medical
profession or such other Third Parties within the Co-Promotion Region shall be handled solely by
Allergan (except to the extent permitted under Section 2.1(c)). Spectrum shall refer all medical
inquiries concerning the Licensed Product in the Field of Use and all quality complaints within the
Co-Promotion Region to the following address/number:



Director, Scientific Information Medical Compliance

Allergan Sales, LLC

2525 Dupont Drive

PO Box 19534

Irvine, CA 92713-4285

714-246-4285




          (d) Spectrum shall assist Allergan with respect to customer communications (as reasonably
requested by Allergan) within the Co-Promotion Region and shall keep Allergan advised of market,
economic, regulatory and other developments of which Spectrum may become aware which may affect the
sale of the Licensed Product in the Field of Use in the Co-Promotion Region.



          (e) Both Parties shall utilize an electronic sales force automation system for data collection
and data management consistent with industry standard practices to produce reports and analyses of
their respective Sales Force’s activities and the Licensed Product’s performance in the Field of
Use in the Co-Promotion Region. Allergan reserves the right to review and approve the Spectrum
sales force automation system utilized in the Co-Promotion Region.



          (f) Spectrum and Allergan shall report to each other all information necessary to permit
Allergan to make timely reports as required by any governmental regulatory agency in the
Co-Promotion Region regarding the Licensed Product in the Field of Use.



ARTICLE 5

REPRESENTATIONS, WARRANTIES AND COVENANTS




     5.1 Spectrum Representations, Warranties, and Covenants. Spectrum represents,
warrants and covenants that:



          (a) Spectrum has the requisite personnel, facilities, equipment, expertise, experience and skill
to perform its obligations hereunder and to render the services contemplated hereby;





11









 










          (b) Spectrum and its Sales Force shall perform the services in a professional, timely,
competent and efficient manner, and it and its Sales Force shall abide by all Laws that apply to
its and their performance; and



          (c) any negligent or wrongful act or omission on the part of Spectrum’s Sales Force (both
individually and as a group) shall be deemed to be negligent or wrongful acts or omissions of
Spectrum. Spectrum shall notify Allergan in writing as promptly as practicable of any alleged
negligent or wrongful acts or omissions on the part of Spectrum’s Sales Force, and of any
allegations of negligent or wrongful acts or omissions made against Allergan’s Sales Force.



     5.2 Allergan Warranties and Covenants. Allergan warrants and covenants that:



          (a) Allergan has the requisite personnel, facilities, equipment, expertise, experience and
skill to perform its obligations hereunder and to render the services contemplated hereby;



          (b) Allergan and its Sales Force shall perform such services in a professional, timely,
competent and efficient manner, and it and its Sales Force shall abide by all Laws that apply to
its and their performance; and



          (c) any negligent or wrongful act or omission on the part of Allergan’s Sales Force (both
individually and as a group) shall be deemed to be negligent or wrongful acts or omissions of
Allergan. Allergan shall notify Spectrum in writing as promptly as practicable of any alleged
negligent or wrongful acts or omissions on the part of Allergan’s Sales Force, and of any
allegations of negligent or wrongful acts or omissions made against Spectrum’s Sales Force.



     5.3 Performance by Affiliates. Spectrum recognizes that Allergan may perform some or
all of its obligations under this Agreement through its Affiliates.



     5.4 DISCLAIMER OF ALL OTHER WARRANTIES. THE WARRANTIES SET FORTH IN THIS AGREEMENT
AND THE LICENSE AGREEMENT ARE THE PARTIES’ ONLY WARRANTIES WITH RESPECT HERETO AND ARE MADE
EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WHICH ARE HEREBY DISCLAIMED,
INCLUDING ANY IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, OR
OTHERWISE.



ARTICLE 6

TERM AND TERMINATION




     6.1 Term. The term of this Agreement shall commence on the Effective Date and
continue until the earlier of (a) termination of the License Agreement or (b) the date on which





12









 









this Agreement is terminated pursuant to the provisions herein (the “Term”).




     6.2 Termination.



          (a) Spectrum may, in its sole discretion, opt out of performing under this Agreement only by
providing written notice of its intent to opt-out of (and terminate) this Agreement delivered on
the first day of any Fiscal Quarter during 2011, or on the first day of the first Fiscal Quarter of
2012. Such termination shall be effective (the “Opt-Out Effective Date”) on the last day of the
Fiscal Quarter in which such notice is delivered. During the period between delivery of
notification and the Opt-Out Effective Date, Spectrum shall continue to be responsible for its
thirty-five percent (35%) share of Development Costs incurred during such period pursuant to the
terms of the License Agreement, and for its fifty-percent (50%) share of pre-market planning
expenses and any other costs related to the planned commercialization of the Licensed Product
pursuant to the terms of the JMP and Exhibit A. On the Opt-Out Effective Date:




     i. Spectrum’s obligation to pay future Development Costs under Section 6.6 of the
License Agreement shall automatically be reduced to **** and Allergan’s obligation to pay
future Development Costs under Section 6.6 of the License Agreement shall be automatically
increased to ****; and




     ii. provided that Spectrum is in compliance with the terms and conditions of this
Agreement as of the Opt-Out Effective Date, Allergan will reimburse Spectrum retroactively,
in the form of a one time payment, an amount equal to **** of the aggregate Development
Costs and pre-launch costs pursuant to the JMP incurred by Spectrum under the License
Agreement and this Agreement (and not, for clarity, Development Costs incurred or paid by
Spectrum prior to January 1, 2009); and




     iii. this Agreement shall be deemed automatically terminated and the sales milestones
and royalties set forth in the License Agreement shall apply as provided therein.



          (b) Without limiting the rights set forth in subsection (c) below, either Party may terminate
this Agreement by giving notice in writing to the other Party in the event the other Party is in
material breach of this Agreement and shall have failed to cure such breach within sixty (60) days
of receipt of written notice thereof specifying the breach in detail from the non-breaching Party.
In addition, each Party shall have the right to seek all available rights and remedies to it, under
law or equity (including injunctive relief) for such uncured material breach by such other Party.



          (c) In addition to the rights set forth in subsection (b) above, Allergan may:




     i. terminate Spectrum’s rights under this Agreement with written notice to Spectrum in
the event of: (A) **** consecutive Deficient Quarters by Spectrum in which





 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




13









 











the Deficiency is greater than **** for each such quarter and Allergan’s Sales Force
delivers a higher percentage of its assigned PDEs in each such quarter than Spectrum
delivers for its assigned PDEs; (B) **** Deficient Quarters by Spectrum in a **** Fiscal
Quarter period and Allergan’s Sales Force delivers a higher percentage of its assigned PDEs
in each such Deficient Quarter than Spectrum delivers for its assigned PDEs; or (C) a
material breach of such a nature, duration or frequency (I) that there occurs a material
failure of consideration under such section that cannot be adequately remedied by money
damages, or (II) that demonstrates that Spectrum is an unreliable co-promotion partner, such
as material repetitive violations (even if cured);




     ii. immediately terminate this Agreement with written notice to Spectrum (with no right
to cure) in the event of a material breach by Spectrum of Sections 2.1(c)(ii), 2.2(c), (d),
or (n), or 2.3(b) which has an adverse effect on Allergan or the Licensed Product.



     6.3 Effect of Termination or Expiration. Termination or expiration of this Agreement
in whole or in part shall not relieve the Parties of any amounts owing between them at the date
termination or expiration. Upon termination or expiration of this Agreement, Spectrum shall, at
its sole expense and within thirty (30) days of such termination or expiration, return to Allergan
all Promotional Materials and any samples of the Licensed Product then in the possession of
Spectrum and any of its Sales Force. The following provisions shall survive any termination or
expiration of this Agreement: Articles 1 and 7 and Sections 2.3(c) and (e), 5.4, 6.2(a)(i), (ii)
and (iii) and 6.3.



ARTICLE 7

GENERAL PROVISIONS




     7.1 Incorporation of Terms from the License Agreement. This Agreement forms an
integral part of the License Agreement, and is incorporated into the License Agreement. As a part
of the License Agreement, this Agreement is subject to all terms and conditions of the License
Agreement. Without limiting the generality of the foregoing, Article 14 (Miscellaneous) of the
License Agreement applies to this Agreement as if stated herein. In the event of any
contradictions or inconsistencies between the terms of this Agreement and those of the License
Agreement, the terms of the License Agreement shall govern.



[Signature page to follow]






 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




14









 










EXECUTION COPY




     IN WITNESS WHEREOF, the Parties, intending to be bound hereby, have executed this Agreement as
of the date first written above.



	 	 	 	 	 
	 	ALLERGAN SALES, LLC

 	 
	 	By:  	
/s/ Jeffrey L. Edwards	 
	 	 	Name:  	Jeffrey L. Edwards 	 
	 	 	Title:  	Vice President and

Chief Financial Officer 	 
	 
	 	ALLERGAN USA, INC.

 	 
	 	By:  	
/s/ Jeffrey L. Edwards	 
	 	 	Name:  	Jeffrey L. Edwards 	 
	 	 	Title:  	Vice President and

Chief Financial Officer 	 
	 
	 	SPECTRUM PHARMACEUTICALS, INC.

 	 
	 	By:  	
/s/ Rajesh C. Shrotriya	 
	 	 	Name:  	Rajesh C. Shrotriya 	 
	 	 	Title:  	Chief Executive Officer and

President 	 
	 






 









 










Exhibit A

Profit Split and PSMM Share Process



Prior to the launch of the Licensed Product in the Field of Use in the Co-Promotion Region, each
Party will share equally in the PSMM incurred by the Parties. During this time, each Party will be
responsible for their share of the PSMM and by the third day of each Fiscal Quarter, each Party
will deliver to the other Party a report itemizing the total PSMM incurred by such Party in the
prior Fiscal Quarter. Each Party shall then deliver a check, within thirty (30) days, to the other
Party reimbursing the other Party for 50% of the PSMM incurred by the other Party in the prior
Fiscal Quarter.



After the launch of the Licensed Product in the Field of Use in the Co-Promotion Region, Spectrum
will deliver to Allergan an invoice by the third day of each Fiscal Quarter itemizing its aggregate
PSMM for the Licensed Product for the prior Fiscal Quarter. Allergan shall then deliver a check,
within thirty (30) days, to Spectrum reimbursing Spectrum for the PSMM incurred by Spectrum in the
prior Fiscal Quarter. Allergan shall aggregate the amounts specified on Spectrum’s invoice with
Allergan’s aggregate PSMM for the Licensed Product for the prior Fiscal Quarter, and will deduct
the total from the Licensed Product’s Gross Margin from the prior Fiscal Quarter to yield a product
profit or loss. Each Party will share equally in this profit or loss, when there is a profit
Allergan will pay Spectrum 50% of the profit and when there is a loss Spectrum will reimburse
Allergan 50% of the loss (except as set forth in Sections 2.2(g), (h), and (i)). Allergan will
complete and distribute the analysis within thirty (30) days after the end of the prior Fiscal
Quarter. The Party responsible to make payment based on such analysis will do so within thirty
(30) days of issuance of such analysis.



Examples (the following table is for illustration purposes only and makes no representation to the
accuracy of the assumptions):




	 	 	 	 	 
	(1)
	 	 	 	 
	Assumptions:
	 	 	 	 
	Total Sales —
	 	$	50M	 
	COGS —
	 	$	7M	 
	Total-to-Net Deductions —
	 	$	8M	 
	PSMM —
	 	$	10M	 
	Allergan —
	 	$	8M	 
	Spectrum Invoice —
	 	$	2M	 
	 
	 	 	 	 
	Example P&L:
	 	 	 	 
	Total Sales —
	 	$	50M	 
	Deductions —
	 	$	8M	 
	Royalty-Bearing Net Sales —
	 	$	42M	 
	COGS —
	 	$	7M	 
	Manufacturing Margin —
	 	$	35	 
	PSMM —
	 	$	10	 
	Operating Margin —
	 	$	25	 
	 
	 	 	 	 
	Licensed Product Profit/(Loss) —
	 	$	25M	 
	 
	 	 	 	 
	$12.5M will be paid by Allergan to Spectrum in
the form of the profit and loss split.
	 	 	 	 
	(2)
	 	 	 	 
	Assumptions:
	 	 	 	 
	Total Sales —
	 	$	8M	 
	COGS —
	 	$	1M	 
	Total-to-Net Deductions —
	 	$	1M	 
	PSMM —
	 	$	8M	 
	Allergan —
	 	$	6M	 
	Spectrum Invoice —
	 	$	2M	 
	 
	 	 	 	 
	Example P&L:
	 	 	 	 
	Total Sales —
	 	$	8M	 
	Deductions —
	 	$	1M	 
	Royalty-Bearing Net Sales —
	 	$	7M	 
	COGS —
	 	$	1M	 
	Manufacturing Margin—
	 	$	6M	 
	PSMM —
	 	$	8M	 
	Operating Margin —
	 	 	($2M	)
	 
	 	 	 	 
	Licensed Product Profit/(Loss) —
	 	 	($2M	)
	 
	 	 	 	 
	$1M will be paid to Allergan by Spectrum in
the form of the profit and loss split
reimbursement.
	 	 	 	 











 











 





Schedule 3.4(b)(i)

Initial Joint Marketing Plan




****





 




	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





S3.4(b)(i)-1





 









 








Schedule 6.4(a)

Example of Royalties




     If, in Fiscal Year One, Allergan earns **** in Royalty-Bearing Net Sales from Royalty-Bearing
Product sales in the Royalty Territory, Spectrum would be due royalties as follows:



     (i) **** x **** = ****.



     So, the total royalties due Spectrum for Fiscal Year One would be ****.



     If, in Fiscal Year Two, Allergan earns **** in Royalty-Bearing Net Sales from Royalty-Bearing
Product sales in the Royalty Territory, Spectrum would be due royalties as follows:



     (i) on the first **** of the ****, Spectrum would be due **** x **** = ****; and



     (ii) on the next **** of the ****, Spectrum would be due **** x **** = ****.



     So, the total royalties due Spectrum for Fiscal Year Two would be **** + **** = ****.



     If, in Fiscal Year Three, Allergan earns **** in Royalty-Bearing Net Sales from
Royalty-Bearing Product sales in the Royalty Territory, Spectrum would be due royalties as follows:



     (i) on the first **** of the ****, Spectrum would be due **** x **** = ****;



     (ii) on the next **** of the ****, Spectrum would be due **** x **** = ****; and



     (iii) on the next **** of the ****, Spectrum would be due **** x **** = ****.



     So, the total royalties due Spectrum for Fiscal Year Three would be **** + **** + **** = ****.




 




	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





S6.4(a)-1




 









 








Schedule 7.1

Trademark Assignment Agreement





 




	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





S7.1-1





 









 








Schedule 11.2(e)

Disclosures




****





 




	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.





S11.2(e)-1





 









 








Schedule 11.5(c)

Trademark and Domain Name Applications and Registrations for the Acquired

Trademarks




See Schedule 7.1 Exhibit A and Exhibit B






 











 





TRADEMARK AND DOMAIN NAME ASSIGNMENT




     This TRADEMARK AND DOMAIN NAME ASSIGNMENT (this “Assignment”) is made and entered into
effective as of October 28, 2008 (the “Effective Date”) by and between Allergan, Inc.
(“Allergan”), a Delaware corporation with its principal place of business at 2525 Dupont Drive,
Irvine, California 92612, and Spectrum Pharmaceuticals, Inc. (“Spectrum”), a Delaware corporation
with its principal place of business at 157 Technology Drive, Irvine, CA 92618.



     Allergan and Spectrum are two of the parties to a License, Development, Supply and
Distribution Agreement entered into on the date hereof (the “License Agreement”). Pursuant to
Section 7.1 of the License Agreement, the parties wish to document the transfer of certain
trademarks and domain names covered by the License Agreement.


1. Assignment. In partial consideration of the fees paid by Allergan under the License Agreement,
receipt of which is hereby acknowledged, Spectrum does hereby sell, convey, assign and transfer to
Allergan, absolutely and not as security, all of Spectrum’s worldwide right, title and interest in
and to the following:




     1.1. All of the trademarks identified on Exhibit A (“Acquired Trademarks”) and all of the
domain names identified on Exhibit B (“Acquired Domain Names”);



     1.2. All goodwill of Spectrum’s business symbolized by the Acquired Trademarks and Acquired
Domain Names; and



     1.3. All claims by Spectrum against any Third Party for past, present or future infringement
of the Acquired Trademarks or Acquired Domain Names and all rights to payment with respect to any
cause of action affecting or relating to such Acquired Trademarks or Acquired Domain Names.


2. Further Assurances for Acquired Trademarks. Spectrum will deliver to Allergan reasonably
promptly after the Effective Date, appropriate trademark assignments for recordation by Allergan
with the appropriate Patent and Trademark Offices duly executed by Spectrum. Spectrum agrees that,
upon reasonable request from time to time, it shall execute and deliver all such additional
documents as may be required, and do all other acts which may be reasonably necessary or
appropriate, in the reasonable opinion of Allergan’s counsel to perfect or record the right or
title of Allergan to the Acquired Trademarks transferred hereby.



3. Further Assurances for Acquired Domain Names. The parties acknowledge that in order to effect
the sale, transfer, assignment and transfer of registration of the Acquired Domain Names from
Spectrum to Allergan, the parties must follow certain procedures stipulated by the registrar of
each such Acquired Domain Name (the “Domain Transfer







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Procedures”). The parties agree to fully cooperate with each other and to promptly take all
necessary actions in order to comply with the Domain Transfer Procedures so as to effect the
transactions contemplated in this Agreement within fifteen days from the Effective Date, including
Spectrum directing the registrar(s) to release and unlock the Acquired Domain Names and, upon
notice from Registrar that such Acquired Domain Names have been unlocked, immediately requesting
that the Acquired Domain Names be transferred to Allergan.




[Remainder of page intentionally left blank.]







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     IN WITNESS WHEREOF, the parties herein have executed this Assignment as of the Effective
Date.



	 	 	 	 	 
	 	ALLERGAN, INC.

 	 
	 	By:  	/s/
Jeffrey L. Edwards	 
	 	 	Name:  	Jeffrey L. Edwards 	 
	 	 	Title:  	Executive Vice President,

Finance and Business Development,

Chief Financial Officer 	 
	 
	 	SPECTRUM PHARMACEUTICALS, INC.

 	 
	 	By:  	/s/
Rajesh C. Shrotriya	 
	 	 	Name:  	Rajesh C. Shrotriya 	 
	 	 	Title:  	Chief Executive Officer and President 	 
	 





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EXHIBIT A TO TRADEMARK AND DOMAIN NAME ASSIGNMENT




Acquired Trademarks




EOQUIN either (a) as a stand-alone mark or (b) as the mark has been used in combination with any other words, stylizations, logos, or designs so as to create a unitary trademark




Applications




	 	 	 	 	 	 	 	 	 	 	 
	Country	 	Mark	 	Application No.	 	Filing Date	 	Status	 
	****
	 	****	 	****	 	****	 	 	****	 






Registrations




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Registration	 	 	 
	Country	 	Mark	 	Registration No.	 	Date	 	Status	 
	****
	 	****	 	****	 	****	 	 	****	 








 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.




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EXHIBIT B TO TRADEMARK AND DOMAIN NAME ASSIGNMENT




Acquired Domain Names




	 	 	 	 	 	 	 
	Domain Name	 	Registrar	 	Registration Date	 	Expiration Date
	****

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








 




			
	****	 	Certain confidential information contained in this document, marked with four asterisks, has
been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.






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