First Amendment to LIcense, Development and Marketing Agreement



 [Note: Certain portions of this document have been marked “[confidential treatment requested]” or
“[c.i.]” to indicate that confidentiality has been requested for this confidential information. The portions have been omitted and filed separately with the Securities and Exchange Commission.] 
 EXHIBIT 10.1 
  
 FIRST AMENDMENT 
 TO 
 LICENSE, DEVELOPMENT AND MARKETING AGREEMENT 
  
 This First Amendment to License, Development and Marketing Agreement (this “Amendment”) dated December 8, 2003 between INSPIRE PHARMACEUTICALS, INC., a Delaware corporation, having an address of 4222 Emperor
Boulevard, Suite 470, Durham, North Carolina 27703 (“INSPIRE”) and ALLERGAN, INC., a Delaware corporation, having an address of 2525 Dupont Drive, Irvine, California 92612 and its Affiliates Allergan Sales, LLC. (formerly Allergan Sales,
Inc.) and Allergan Pharmaceuticals Holdings (Ireland) Ltd. (collectively “ALLERGAN,” and together with INSPIRE, the “Parties”). 
  
 PRELIMINARY STATEMENTS 
  
 WHEREAS, INSPIRE and ALLERGAN entered into that certain License, Development and Marketing Agreement dated as of June 22, 2001 (the “Agreement”); and

  
 WHEREAS, in connection with, as a partial consideration for, the
execution of that certain ElestatTM (Epinastine) Co-Promotion Agreement between
INSPIRE and Allergan Sales, LLC (formerly Allergan Sales, Inc.), the Parties wish to amend the Agreement; and 
  
 WHEREAS, capitalized terms used in this Amendment and not otherwise defined shall have the meanings assigned to such terms in the Agreement. 
  
 NOW, THEREFORE, in consideration of the foregoing, and other good and valuable
consideration, the receipt and sufficiency of which the Parties acknowledge, the Parties hereby agree as follows: 
  
 1.    Section 9.7(b) shall be deleted in its entirety and replaced by the following new Section 9.7(b). 
  
 RestasisTM Royalties. As further consideration to Inspire for the license and other rights granted to Allergan under this Agreement, during the
term of this Agreement, Allergan shall pay to Inspire a royalty on Net Sales by Allergan or its Affiliates of RestasisTM in each country in the RestasisTM
Territory, as follows: 
  

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








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

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

  

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

  

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

  

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

  

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

  

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

  

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


 

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

  

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

  

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

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

  

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

  

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

  

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

  

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

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

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

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 [Note: Certain portions of this document have been marked “[confidential treatment requested]” or
“[c.i.]” to indicate that confidentiality has been requested for this confidential information. The portions have been omitted and filed separately with the Securities and Exchange Commission.] 
  
 4.    Section 7.2 (Allergan Responsibilities; Rights) shall be
amended to include a new subsection (g) as follows: 
  
 Allergan shall
provide to Inspire within twenty (20) days after the close of each month a written sales report of Restasis and Inspire Product sales for the preceding month, which report shall be considered Confidential Information of Allergan subject to
restrictions set forth in Section 13 and shall only be used by Inspire for internal business purposes only provided that Sections 13.3 (Exclusions) and 13.5 (Exceptions) shall not apply to such sales reports and furthermore, INSPIRE acknowledges
that notwithstanding any other provision of this Agreement, it shall be a material breach of this Agreement if INSPIRE breaches the terms of this Section 7.2(g), including without limitation, disclosing said sales report or any portion thereof to
investors, analysts or other Third Party or providing opinions or financial projections to Third Parties based in whole or in part on said sales reports; except that INSPIRE may use said sales report to assist it to estimate its quarterly
revenue and report the same as required by law after ALLERGAN’s public release of its corresponding quarterly earnings statement. In addition, INSPIRE agrees that it will obtain prior written approval from ALLERGAN before making public any
sales data obtained from ALLERGAN on sales of RestasisTM or the INSPIRE Product,
other than quarterly and annual dry eye sales and forecasts of said sales. 
  
 5.    Section 10.1 (Payments) shall be amended by replacing “sixty (60)” with “forty-five (45)” in the last sentence.  
  
 6.    Amend Section 7.3(d), last line, by correcting the reference to Section 9.6(b)(iii) to Section 9.7(b)(iii).

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

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 [Note: Certain portions of this document have been marked “[confidential treatment requested]” or
“[c.i.]” to indicate that confidentiality has been requested for this confidential information. The portions have been omitted and filed separately with the Securities and Exchange Commission.] 
  
 IN WITNESS WHEREOF, each of the Parties has caused this Amendment to be executed by its
duly authorized representative as of the day and year first above written. 
  

	 INSPIRE PHARMACEUTICALS, INC.
	  	 ALLERGAN, INC.

			
	By:  /s/    Gregory J. Mossinghoff         	  	 By:
	  	/s/ F. Michael Ball         
	
	 	 	

	 Name:     Gregory J. Mossinghoff
 Title:        President
	  	 	  	 Name:
 Title:
	 	 F. Michael Ball
 Executive Vice President and
 President, Pharmaceuticals

		
	 	  	 ALLERGAN SALES, LLC

			
	  	  	 By:
	  	/s/    F. Michael Ball      
	 	 	 	

	 	  	 	  	 Name:
 Title:
	 	 F. Michael Ball
 President

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

	 	  	 	  	 Name:
 Title:
	 	 Terilea Wielenga
 Director


  
  

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