OF THE PRODUCT INTELLECTUAL PROPERTY AND SHALL BE LICENSED TO THE PURCHASER
PURSUANT HERETO, AND THE COMPANY SHALL NOTIFY THE PURCHASER OF SUCH IMPROVEMENTS
AND DELIVER SUCH IMPROVEMENTS AND ALL RECORDS, DATA, INFORMATION AND KNOW-HOW
RELATED THERETO TO THE PURCHASER, IN EACH SUCH CASE PROMPTLY AFTER THE CREATION
OR DEVELOPMENT OF SUCH IMPROVEMENTS AND NO LATER THAN THIRTY (30) DAYS AFTER THE
CREATION OR DEVELOPMENT OF SUCH IMPROVEMENTS.
SECTION 2.8
MANUFACTURING.
PURCHASER MAY, IN ITS SOLE DISCRETION,
MANUFACTURE THE PRODUCTS ITSELF, BY ENGAGING A THIRD PARTY SELECTED IN ITS SOLE
DISCRETION OR BY ENGAGING THE SERVICES OF THE COMPANY TO PERFORM SUCH
MANUFACTURING SERVICES.
IN THE EVENT THAT PURCHASER ELECTS TO ENGAGE THE
SERVICES OF THE COMPANY TO MANUFACTURE THE PRODUCTS, THE COMPANY WILL PERFORM
SUCH MANUFACTURING SERVICES AT A COST NO GREATER THAN THE COMPANY'S ACTUAL FULLY
BURDENED MANUFACTURING COST, AND, IF PURCHASER SO ELECTS, IN ACCORDANCE WITH A
WRITTEN AGREEMENT CONTAINING CUSTOMARY TERMS AND WARRANTIES, SUCH WRITTEN
AGREEMENT TO BE IN A FORM SUBSTANTIALLY SIMILAR TO THE FORM OF AGREEMENT
ATTACHED AS EXHIBIT D HERETO.
SECTION 2.9
CONVERSION OF NOTE.
ON THE EFFECTIVE DATE, THE
PURCHASER SHALL CONVERT THAT CERTAIN SENIOR CONVERTIBLE NOTE OF THE COMPANY
DATED AS OF [NOVEMBER] [
], 2008 IN THE AGGREGATE PRINCIPAL AMOUNT OF
$15,000,000 INTO THE RIGHT TO ENTER INTO THIS AGREEMENT PURSUANT TO THE TERMS OF
SUCH SENIOR CONVERTIBLE NOTE.
SECTION 2.10
TRADEMARK LICENSE.
ON THE EFFECTIVE DATE, THE PARTIES
SHALL EXECUTE THE TRADEMARK LICENSE ATTACHED HERETO AS EXHIBIT E.
SECTION 2.11
ADDITIONAL ASSIGNMENTS.
ON THE EFFECTIVE DATE, THE
PARTIES SHALL EXECUTE THE ASSIGNMENT AGREEMENT ATTACHED HERETO AS EXHIBIT F.
SECTION 2.12
REGULATORY MILESTONE LICENSE PAYMENT.
UPON THE COMPANY'S
NOTICE TO THE PURCHASER OF THE COMPANY'S RECEIPT FROM THE FDA OF FINAL APPROVAL
OF THE FIRST NDA FOR THE PRODUCT, THE PURCHASER SHALL PAY WITHIN THIRTY (30)
DAYS OF SUCH FINAL APPROVAL TO THE COMPANY AN ADDITIONAL ONE-TIME PAYMENT OF
FORTY MILLION U.S. DOLLARS ($40,000,000) (THE "REGULATORY MILESTONE PAYMENT").
SECTION 2.13
ROYALTIES.
IN ADDITION TO THE REGULATORY MILESTONE
PAYMENT, THE PURCHASER SHALL PAY TO THE COMPANY A ROYALTY OF * PERCENT (*%) OF
NET SALES OF THE PRODUCTS IN THE TERRITORY (THE "ROYALTY").
THE PURCHASER SHALL
PAY SUCH ROYALTY ON A COUNTRY-BY-COUNTRY BASIS FOR THE NET SALES OF THE PRODUCTS
IN THE TERRITORY IN THE APPLICABLE COUNTRY DURING EACH CALENDAR QUARTER, WITHIN
FORTY-FIVE (45) DAYS AFTER THE END OF THE APPLICABLE CALENDAR QUARTER.
THE
PURCHASER SHALL PAY THE ROYALTY APPLICABLE TO EACH COUNTRY IN US DOLLARS.
AT
THE TIME OF SUCH
*CONFIDENTIAL TREATMENT REQUESTED
6
PAYMENT, THE PURCHASER SHALL ALSO PROVIDE TO THE COMPANY A WRITTEN STATEMENT OF
NET SALES SHOWING IN REASONABLY SPECIFIC DETAIL, ON A COUNTRY-BY-COUNTRY BASIS,
(A) THE CALCULATION OF NET SALES; (B) ROYALTIES PAYABLE IN US DOLLARS, WHICH
SHALL HAVE ACCRUED HEREUNDER BASED UPON NET SALES; (C) WITHHOLDING TAXES, IF
ANY, REQUIRED BY LAW TO BE DEDUCTED WITH RESPECT TO SUCH SALES; (D) THE DATES OF
THE FIRST COMMERCIAL SALES OF THE PRODUCT IN ANY