Document:

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                                                                   EXHIBIT 10.29
                                                                  EXECUTION COPY

                                SUPPLY AGREEMENT

                                 by and between

                      NASTECH PHARMACEUTICAL COMPANY, INC.,
                             a Delaware corporation,

                                       and

                         QUESTCOR PHARMACEUTICALS, INC.,
                            a California corporation

                            Dated as of June 17, 2003

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                                Table of Contents

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ARTICLE I                  DEFINITIONS......................................................................     2
     SECTION 1.1           Definitions......................................................................     2

ARTICLE II                 PURCHASE AND SALE OF PRODUCTS....................................................     6
     SECTION 2.1           Agreement to Purchase and Sell Products..........................................     6

ARTICLE III                FORECASTS AND VOLUME LIMITATIONS; CERTAIN COVENANTS..............................     6
     SECTION 3.1           Forecasts........................................................................     6
     SECTION 3.2           Firm Orders......................................................................     7
     SECTION 3.3           Delivery Obligations.............................................................     7
     SECTION 3.4           Firm Order Quantities............................................................     7
     SECTION 3.5           Manufacturing Delays.............................................................     7
     SECTION 3.6           Orders...........................................................................     7
     SECTION 3.7           Shelf Life.......................................................................     7
     SECTION 3.8           Quality Assurance; Quality Control...............................................     7
     SECTION 3.9           Buyer's Technical Representative.................................................     8
     SECTION 3.10          Communications Regarding Product.................................................     8
     SECTION 3.11          Product Modification.............................................................     8
     SECTION 3.12          Order Quantities.................................................................     9

ARTICLE IV                 SHIPMENT AND PAYMENT.............................................................     9
     SECTION 4.1           Shipment.........................................................................     9
     SECTION 4.2           Prices...........................................................................     9
     SECTION 4.3           Manner of Payments...............................................................     9
     SECTION 4.4           Taxes............................................................................     9
     SECTION 4.5           Interest on Late Payments........................................................     9
     SECTION 4.6           Disputes as to Payments..........................................................     9
     SECTION 4.7           No Excuse........................................................................    10

ARTICLE V                  ARTWORK AND TRADEMARKS...........................................................    10
     SECTION 5.1           Artwork..........................................................................    10
     SECTION 5.2           Use of Name......................................................................    10

ARTICLE VI                 CONFIDENTIALITY; NON-SOLICITATION................................................    10
     SECTION 6.1           Confidentiality..................................................................    10
     SECTION 6.2           Non-Solicitation.................................................................    11

ARTICLE VII                WARRANTY; LIMITATION OF LIABILITY................................................    11
     SECTION 7.1           Seller's Warranty................................................................    11
     SECTION 7.2           Disclaimer.......................................................................    11
     SECTION 7.3           Defective Products...............................................................    12
     SECTION 7.4           Indemnification..................................................................    12
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                                       i

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                                Table of Contents
                                   (continued)

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     SECTION 7.5           Limitation of Liability..........................................................    13
     SECTION 7.6           Recalls..........................................................................    13
     SECTION 7.7           Insurance........................................................................    13

ARTICLE VIII               TERM; TERMINATION................................................................    14
     SECTION 8.1           Term of Agreement................................................................    14
     SECTION 8.2           Termination by Either Party......................................................    14
     SECTION 8.3           Termination by Seller............................................................    14
     SECTION 8.4           Rights Upon Termination..........................................................    14

ARTICLE IX                 MISCELLANEOUS....................................................................    15
     SECTION 9.1           Assignment.......................................................................    15
     SECTION 9.2           Force Majeure....................................................................    15
     SECTION 9.3           Entire Agreement; Amendments; Modification.......................................    16
     SECTION 9.4           Applicable Law...................................................................    16
     SECTION 9.5           Arbitration......................................................................    16
     SECTION 9.6           Independent Contractor...........................................................    16
     SECTION 9.7           Set-Off..........................................................................    16
     SECTION 9.8           Waivers..........................................................................    17
     SECTION 9.9           Notices..........................................................................    17
     SECTION 9.10          Headings.........................................................................    17
     SECTION 9.11          Severability.....................................................................    17
     SECTION 9.12          Counterparts.....................................................................    18
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Schedule 1        Specifications

Exhibit 3.1       Initial Forecast
Exhibit 3.6       Purchase Orders
Exhibit 3.8       Certificate of Analysis

                                       ii

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         This SUPPLY AGREEMENT is made as of June 17, 2003 (the "Effective
Date"), by and between Nastech Pharmaceutical Company, Inc., a Delaware
corporation ("Seller"), and Questcor Pharmaceuticals, Inc., a California
corporation ("Buyer").

         WHEREAS, Seller is engaged, among other things, in the development,
production, marketing, distribution and sale of an intranasal cyanocobalamin
formulation having the brand name NASCOBAL(R); and

         WHEREAS, Seller and Buyer are executing simultaneously herewith that
certain Asset Purchase Agreement, of even date herewith (the "Asset Purchase
Agreement"), pursuant to which Seller shall sell, transfer, convey, assign and
deliver to Buyer, and Buyer shall purchase and acquire from Seller, all of
Seller's right, title and interest in, to and under certain assets relating to
or respecting the NASCOBAL(R) brand products as therein provided; and

         WHEREAS, Seller continues to have the manufacturing facilities,
capacity, know-how and expertise to produce the NASCOBAL(R) brand products; and

         WHEREAS, subject to the terms, conditions, commitments and undertakings
herein provided, Seller is willing to manufacture and sell such products to
Buyer, and Buyer desires to purchase such products from Seller, in such
quantities as Buyer shall request, subject to the terms and conditions of this
Agreement; and

         WHEREAS, it is a condition of Seller's willingness to consummate the
transactions contemplated by the Asset Purchase Agreement that Buyer undertake
its commitments as herein provided;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:

                                   ARTICLE I
                                   DEFINITIONS

         SECTION 1.1 Definitions. For purposes of this Agreement, the following
terms shall have the meanings specified in this Article I:

         "Act" has the meaning set forth in Section 7.1 of this Agreement.

         "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person. For the purpose of the definition of Affiliate, the term "control"
(including the terms "controlling" and "controlled") means the possession,
direct or indirect, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership or voting
securities, by contract or otherwise.

         "Agreement" means this Supply Agreement, as amended from time to time
in accordance with the provisions hereof.

<PAGE>

         "Annual QA/QC Increase" has the meaning set forth in Section 3.8 of
this Agreement.

         "Annual QA/QC Payment" has the meaning set forth in Section 3.8 of this
Agreement.

         "API" means the active pharmaceutical ingredient contained in the
Product.

         "Asset Purchase Agreement" has the meaning set forth in the recitals to
this Agreement.

         "Artwork" has the meaning set forth in Section 5.1 of this Agreement.

         "Buyer" has the meaning set forth in the preamble of this Agreement.

         "Buyer's Warranty" has the meaning set forth in Section 7.2 of this
Agreement.

         "Calendar Year" means each twelve (12) month period commencing on
January 1 and ending on December 31.

         "cGMP" means all laws, guidelines and regulations applicable to the
manufacture of Product including the current Good Manufacturing Practice
regulations as promulgated under the Act at 21 CFR (Chapters 210, 211, 600 and
610), as the same may be amended or re-enacted from time to time.

         "Confidential Information" means information concerning the business,
methods, products, strategies, operations, prospects, systems, plans, policies,
relationships with customers, suppliers, distributors and other agents, and
other sensitive, non-public information of either Party or its Affiliates. The
term "Confidential Information" shall not include information that (i) is or
becomes generally available to the public other than as a result of a disclosure
by the Party subject to the obligation of confidentiality with respect to such
information (the "Receiving Party"), or the representatives or Affiliates of
such Party, in breach of this Agreement, the Confidentiality Agreement or any
other confidentiality agreement, or any fiduciary duty or other obligation of
secrecy in favor of the other Party and/or its Affiliates; (ii) is or becomes
available to the Receiving Party on a non-confidential basis from a source other
than the other Party or its representatives or Affiliates, provided, that the
Receiving Party believes that such source is not bound by a confidentiality
agreement with, and does not have a fiduciary duty or any other obligation of
secrecy to other Party or another Person with respect to such information; (iii)
was rightfully in the possession of the Receiving Party or any of its Affiliates
prior to receipt from the other Party or its representatives or Affiliates,
other than through prior disclosure by any of them; or (iv) is discovered or
developed by the Receiving Party or any of its Affiliates independently of any
use of the other Party's Confidential Information.

         "Confidentiality Agreement" means that certain Confidentiality
Agreement, dated as of March 14, 2003, between Buyer and Seller.

         "Delivery Range" has the meaning set forth in Section 3.3 of this
Agreement.

         "Effective Date" has the meaning set forth in the preamble of this
Agreement.

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         "FDA" means the United States Food and Drug Administration or any
successor agency or entity thereto.

         "Firm Order" has the meaning set forth in Section 3.2 of this
Agreement.

         "Force Majeure Event" has the meaning set forth in Section 9.2 of this
Agreement.

         "Gel Product" means any product in gel form developed by Seller,
existing as of the date hereof, that contains cyanocobalamin as an active
ingredient formulated for intranasal delivery.

         "Governmental Entity" means a federal, state, provincial, local, county
or municipal government, governmental, regulatory or administrative agency,
department, commission, board, bureau, or other authority or instrumentality,
domestic or foreign, including, without limitation, any body exercising or
entitled to exercise, any administrative, executive, judicial, legislative,
police, regulatory or taxing authority or power of any nature.

         "Indemnified Party" has the meaning set forth in Section 7.4 of this
Agreement.

         "Indemnifying Party" has the meaning set forth in Section 7.4 of this
Agreement.

         "Losses" has the meaning set forth in Section 7.4 of this Agreement.

         "NDA" shall mean (i) with respect to the Gel Product, the New Drug
Application, No. 19-722, relating to the Product in gel form, and approved by
the FDA on November 5, 1996, and (ii) with respect to the Spray Product, that
certain new drug application to be filed by or on behalf of Seller with the FDA
for the spray formulation of the Product used in the Phase III bioequivalency
study completed and reported upon in December 2002.

         "NDC" shall mean a National Drug Code for the Product.

         "Party" or "Parties" means Seller or Buyer or both, as the context
requires.

         "Permitted Purposes" has the meaning set forth in Section 6.1 of this
Agreement.

         "Person" means any individual, partnership, joint venture, corporation,
trust, limited liability company, unincorporated organization, Governmental
Entity any other legal entity.

         "Product" means the Gel Product and, upon approval by the FDA of the
NDA for the Spray Product, the Spray Product.

         "Purchase Order" has the meaning set forth in Section 3.6 of this
Agreement.

         "Purchase Price" means, for the Gel Product or the Spray Product, as
the case may be, [ * ] per Unit of such Product, to be adjusted beginning with
the Calendar Year commencing January 1, 2004 (i) annually, immediately following
release of the Producer Price Index - Pharmaceutical Preparations (code PCU
2834), as published in the U.S. Department of Labor, Bureau of Labor Statistics,
to increase the fixed direct labor costs of [ * ] included in the cost per Unit
of Product by the product of (x) [ * ] and (y) the cumulative percentage
increase in

* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                      - 4 -

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such index between the most recent Calendar Year for which such data is
available and the Calendar Year commencing January 1, 2002 and ending December
31, 2002 (the "Direct Labor Cost Increase"); and (ii) upon receipt of each
Purchase Order, by the amount of any increases in the per Unit cost to Seller of
the raw materials included in the subject Units over the cost of those
applicable to the raw materials included in the Units produced in Seller's last
production run immediately preceding the Effective Date. For the avoidance of
doubt, the Parties agree that in no event shall the Purchase Price be adjusted
to reflect any decreases in either (x) the direct labor costs included in the
cost per Unit of Product or (y) the cost of raw materials included in the
subject Units.

         "Recall" has the meaning set forth in Section 7.6 of this Agreement.

         "Remaining Products" has the meaning set forth in Section 3.5 of this
Agreement.

         "Seller" has the meaning set forth in the preamble of this Agreement.

         "Seller Employee" has the meaning set forth in Section 6.2 of this
Agreement.

         "Seller's Non-Infringement Warranty" has the meaning set forth in
Section 7.1 of this Agreement.

         "Seller's Product Warranty" has the meaning set forth in Section 7.1 of
this Agreement.

         "Specifications" means the specifications and quality assurance and
other testing for the Product attached hereto as Schedule 1.

         "Spray Product" means any product in spray form developed by Seller as
of the date of approval of that certain new drug application to be filed by or
on behalf of Seller with the FDA for the spray formulation of the Product used
in the Phase III bioequivalency study completed and reported upon in December
2002 that contains cyanocobalamin as an active ingredient formulated for
intranasal delivery.

         "Substitute Manufacturer" has the meaning set forth in Section 2.1 of
this Agreement.

         "Term" has the meaning set forth in Section 8.1 of this Agreement.

         "Unit" means, in the case of the Gel Product, one vial of Nascobal
(Cyanocobalamin, NDC 57459-1002-1, or such other NDC established by Buyer for
the Gel Product) Gel in final approved packaging suitable for commercial sale
available as a metered dose in 5 mL glass bottles containing 2.3 mL of gel and,
in the case of the Spray Product, one vial of Nascobal (Cyanocobalamin, NDC
57459-1002-2, or such other NDC established by Buyer for the Spray Product)
Spray in final approved packaging suitable for commercial sale available as a
metered dose in 3 mL glass bottles containing 2.3 mL of spray solution.

         The terms "herein", "hereof", "hereunder" and like terms, unless
otherwise specified, shall be deemed to refer to this Agreement in its entirety
and shall not be limited to any particular section or provision hereof. The term
"including" as used herein shall be deemed to mean "including, but not limited
to." The term "days" shall refer to calendar days unless specified

                                     - 5 -

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otherwise. References herein to "Articles", "Sections" and "Exhibits" shall be
deemed to mean Articles, Sections of and Exhibits to this Agreement unless
otherwise specified. All monetary amounts referenced with a "$" symbol shall
refer to U.S. dollars.

                                   ARTICLE II
                          PURCHASE AND SALE OF PRODUCTS

         SECTION 2.1 Agreement to Purchase and Sell Products. (a) During the
Term, and subject to the terms and conditions of this Agreement, Seller shall
manufacture and sell to Buyer, and Buyer shall purchase from Seller, all of
Buyer's requirements for the Product. Buyer shall not itself manufacture the
Product or otherwise obtain it from any third party, except as provided herein.
If and to the extent (but only to the extent) that (i) Seller is unable or has
indicated that it does not have the capacity during any specified period to
manufacture and deliver the Product in the amount reflected under any Firm
Order, or (ii) Seller shall have terminated this Agreement pursuant to Section
8.3, Buyer shall be permitted to purchase only those quantities of the Product
that Seller is unable to manufacture from Persons other than Seller (a
"Substitute Manufacturer"), or itself to manufacture such quantities of the
Product; provided, however, that in no event shall such Substitute Manufacturer
be any Person who is primarily engaged in the business of researching and
developing or manufacturing intranasally delivered products. Seller shall use
its commercially reasonable efforts to assist and cooperate with Buyer in
qualifying the Substitute Manufacturer as a manufacturer of the Product, subject
to any agreements as are customarily agreed to between similarly situated
parties, including such Substitute Manufacturer's agreement to the benefit of
Seller to maintain the confidentiality of any information received by it in
connection with the manufacture of the Product and the fulfillment of its
obligations as contemplated hereunder and to use such information solely for the
purposes of manufacturing the Product and otherwise fulfilling its obligations
as contemplated hereunder.

         (b) The Product to be sold to Buyer pursuant to this Agreement shall be
manufactured by Seller or an Affiliate of Seller in a cGMP compliant facility
licensed by the FDA for manufacturing the Product and under the requirements
included in the NDA. Seller may subcontract the manufacture of the Product or
the manufacture of any component of the Product to a manufacturer that is not an
Affiliate of Seller with Buyer's prior written consent, which consent shall not
be unreasonably withheld. Seller shall remain responsible for the performance of
all subcontractors, to the extent permitted hereunder, with the terms and
conditions of this Agreement.

                                  ARTICLE III
               FORECASTS AND VOLUME LIMITATIONS; CERTAIN COVENANTS

         SECTION 3.1 Forecasts. Buyer's initial twelve (12) month rolling
forecast of its requirements by month of the Gel Product is set forth in Exhibit
3.1 hereto. Buyer shall on the first day of each calendar month during the Term
beginning the first calendar month following the Effective Date provide a twelve
(12) month rolling forecast (commencing with the immediately following month) of
the quantity of Product which Buyer expects to require from Seller during each
of the next twelve (12) months.

                                     - 6 -

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         SECTION 3.2 Firm Orders. From time to time, Buyer shall submit to
Seller a firm order (the "Firm Order") indicating the quantities of Product
Buyer desires to purchase from Seller pursuant to such Firm Order. Buyer (i)
must deliver each Firm Order to Seller at least ninety (90) days prior to the
first delivery date requested in such Firm Order and (ii) may amend any Firm
Order hereunder by written notice to Seller at any time before the day that is
sixty (60) days prior to such first delivery date requested. Firm Orders may
include the Spray Product only after FDA approval of the Spray Product for
commercial use and sale.

         SECTION 3.3 Delivery Obligations. As to each Firm Order, Seller shall
be obligated to deliver to Buyer Product constituting between ninety percent
(90%) and one hundred and ten percent (110%) of such Firm Order (the "Delivery
Range"), and Buyer agrees that any delivery of Product within the Delivery Range
shall constitute full and complete compliance by Seller of its delivery
obligations under such Firm Order. Buyer further agrees that any Product
produced by Seller pursuant to a Firm Order and subsequently used by Seller for
reasonable and customary pharmacovigilence, quality assurance or quality control
purposes, in connection with Seller's marketed products stability program only,
pursuant to Section 3.8 of this Agreement shall be deemed to have been delivered
by Seller in compliance with its delivery obligations under such Firm Order.
Seller shall notify Buyer from time to time of the amount of Product used by
Seller for such pharmacovigilence, quality assurance or quality control
purposes.

         SECTION 3.4 Firm Order Quantities. Buyer agrees that the amount of all
Firm Orders shall be in lots of [ * ] Units of Spray Product or [ * ] Units of
Gel Product.

         SECTION 3.5 Manufacturing Delays. In the event that Seller encounters
any manufacturing delays of Product with respect to any Firm Order, Seller shall
immediately notify Buyer of such delay, which notice shall set forth in
reasonable detail the nature of such delay, and shall deliver to Buyer in
accordance with the delivery schedule set forth in the Purchase Order any and
all Products produced by Seller for such order that was not affected by such
manufacturing delay. If the Products so delivered by Seller shall be less than
ninety percent (90%) of such Firm Order, Seller shall have a period, not to
exceed thirty (30) days from the date of delivery provided for in the applicable
Firm Order, in which to produce and deliver the remaining Products that were to
have been delivered on such date (the "Remaining Products"). Buyer agrees that
any delivery of the Remaining Products in conformity with the requirements of
this Section 3.5 shall constitute full and complete compliance by Seller of its
delivery obligations under such Firm Order.

         SECTION 3.6 Orders. Firm Orders shall be made through the issuance by
Buyer to Seller of duly executed purchase orders, substantially in the form
attached hereto as Exhibit 3.6 (each, a "Purchase Order").

         SECTION 3.7 Shelf Life. Seller shall use its commercially reasonable
efforts to manufacture the Product such that it has a minimum 21-month shelf
life upon delivery to Buyer.

         SECTION 3.8 Quality Assurance; Quality Control. Seller shall maintain
the existing pharmacovigilence, quality assurance and quality control studies
for the Product, including stability testing, in a manner consistent with past
practice. Seller shall remain responsible for all sampling and testing of the
Product to assure that the Product is in conformity in all respects with

* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

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the Specifications. Prior to each shipment of Product, Seller shall provide
Buyer a certificate of analysis, substantially in the form attached hereto as
Exhibit 3.8, attesting to the quality of each batch contained within the
shipment, including review and approval by the appropriate quality unit of all
batch production and control records. To cover expenses incurred by Seller in
connection with such efforts, Buyer agrees to pay to Seller (i) for each
Calendar Year during the Term of this Agreement, [ * ] (the "Annual QA/QC
Payment"), which payment shall be made no later than the tenth day following the
commencement of each such Calendar Year; (ii) for the period commencing the
Effective Date until December 31, 2003, a pro rata portion of the Annual QA/QC
Payment, based on a calendar year of 365 days, which payment shall be made no
later than the tenth day following the Effective Date; and (iii) for the period
commencing January 1, 2008 through the scheduled expiration of the Agreement, a
pro rata portion of the Annual QA/QC Payment, based on a calendar year of 365
days, which payment shall be made no later than January 10, 2008. The Annual
QA/QC Payment shall be adjusted annually, beginning with the Calendar Year
commencing January 1, 2004, immediately following release of the Producer Price
Index - Pharmaceutical Preparations (code PCU 2834), as published in the U.S.
Department of Labor, Bureau of Labor Statistics, to increase the Annual QA/QC
Payment by the product of (x) [ * ] and (y) the cumulative percentage increase
in such index between the most recent Calendar Year for which such data is
available and the Calendar Year commencing January 1, 2002 and ending December
31, 2002 (the "Annual QA/QC Increase"). Following adjustment of the Annual QA/QC
Payment, Buyer shall promptly pay to Seller the Annual QA/QC Increase.

         SECTION 3.9 Buyer's Technical Representative. During the term of this
Agreement, upon thirty (30) days' prior written notice to Seller, Buyer shall
have the right to have one or more technical representatives present in the area
of where the Product is being manufactured to (i) review the manufacture of the
Product; (ii) review any relevant records in connection with such manufacturing
of the Product and assess its compliance with cGMP and the Specifications; and
(iii) discuss any related issues with Seller's management personnel. Buyer's
technical representatives, when on-site at Seller's facilities, shall comply
with Seller's rules and regulations.

         SECTION 3.10 Communications Regarding Product. Seller agrees to advise
Buyer promptly of any proposed inspection of the Product or manufacturing
process or procedures by any governmental agency or authority and will, to the
extent practicable, permit Buyer to be present during any such inspection.
Seller also agree to provide copies of any other written communication it
receives from any governmental agency or authority relating to the Product, and
to the extent permissible, Seller agrees to give Buyer an opportunity to comment
and contribute to the preparation of any responsive communications.

         SECTION 3.11 Product Modification. Seller shall not make any
modifications to the Product or the manufacturing process for the Product,
including, without limitation, changes to Product specifications, labeling, API,
raw materials, components, suppliers, testing methods and third party testing
laboratories, without the prior written consent of Buyer, which consent shall
not be unreasonably withheld. Notwithstanding the foregoing, Seller shall be
allowed to change the outer carton of the Product from a plastic carton to a
cardboard carton, provided such change meets all applicable regulatory
requirements.

* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                     - 8 -

<PAGE>

         SECTION 3.12 Order Quantities. Buyer agrees to use its good faith
efforts to cooperate with Seller to establish the timing of the delivery of the
Products requested by Buyer pursuant to Purchase Orders. If at any time Buyer
proposes to submit a Purchase Order that would require delivery of greater than
[ * ] Units of Product, in the aggregate, Buyer shall provide to Seller market
data, including wholesaler data, and such other data as Seller may reasonably
request to show that market demand for the Product exceeds [ * ] Units for the
period covered by the Purchase Order.

                                   ARTICLE IV
                              SHIPMENT AND PAYMENT

         SECTION 4.1 Shipment. Seller shall use best efforts to deliver the
Product to Buyer within sixty (60) days of receipt of Buyer's Purchase Order.
The terms of delivery for the Products shall be F.C.A. (Incoterms 2000) Buyer,
to the destination designated by Buyer in its Purchase Order, unless otherwise
agreed by the Parties. Buyer shall reimburse Seller for Seller's out-of-pocket
expenses for freight, handling, insurance, duty, customs, and any other charges
associated with the shipment and importation of the Products. Title and risk of
loss to all Products sold hereunder shall pass to Buyer upon delivery to the
common carrier for delivery.

         SECTION 4.2 Prices. The price for Product purchased and sold pursuant
to this Agreement shall be the Purchase Price.

         SECTION 4.3 Manner of Payments. With respect to each Purchase Order,
Seller shall invoice Buyer upon shipment of the Units under such Purchase Order.
The invoice shall be for the full price of the Units actually produced in
respect of such Purchase Order. Each such invoice shall set forth in reasonable
detail the basis for the calculation of the amounts shown to be owed thereon.
Each such invoice may also set forth the amount of any Direct Labor Cost
Increase owed by Buyer to Seller. Buyer shall pay to Seller each such invoice
within thirty (30) days of receipt of the Product by the Buyer.

         SECTION 4.4 Taxes. Buyer shall be responsible for any and all taxes due
or payable on any sums paid to Seller under this Agreement other than taxes on
Seller's net income.

         SECTION 4.5 Interest on Late Payments. Subject to Section 4.6, if Buyer
fails to make timely payment of any undisputed amounts due under this Agreement,
Buyer shall pay to Seller (or its designee), on demand, interest at the rate of
one percent (1.0%) per month, or if such rate exceeds the maximum permitted by
law, the next highest rate permitted by law. Interest shall be assessed from the
first day after payment of the amount in question first became due, and
thereafter calculated and payable monthly on the last day of each month, not in
advance.

         SECTION 4.6 Disputes as to Payments. To the extent that Buyer disputes
any portion of the payments that Buyer is required to pay under this Agreement,
Buyer shall promptly so notify Seller in writing, which notice shall set forth
in reasonable detail the amounts in dispute and the nature of such dispute. Each
party agrees to use its commercially reasonable efforts to resolve any such
dispute. Buyer shall promptly, but in no event later than five (5) days,
following resolution of such dispute pay to Seller any amounts determined by the
parties to be due Seller.

* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

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<PAGE>

Notwithstanding the foregoing, Buyer shall pay to Seller all amounts then due
Seller which are not in dispute.

         SECTION 4.7 No Excuse. Neither Party shall be excused from or relieved
of its obligations owed to the other Party under this Agreement by commercial or
other impracticability or impossibility, or frustration of essential purpose.

                                    ARTICLE V
                             ARTWORK AND TRADEMARKS

         SECTION 5.1 Artwork. Buyer shall provide approved specifications for
labeling and packaging and approved artwork, trade dress, advertising and
packaging information (collectively "Artwork") to be used by Seller on the
Product supplied hereunder. Artwork shall be considered a part of the
Specifications.

         SECTION 5.2 Use of Name. Buyer may on all packages of the Product and
literature referring to the Product, identify Seller as the supplier of Product
supplied or to be supplied by Seller in a fair manner, reasonably acceptable to
Seller, which acceptance shall not be unreasonably withheld. Buyer may also use
Seller's name in promoting, marketing and selling the Product; provided,
however, that the particular reference to Seller's name in any promotional
material shall be subject to Seller's prior review and written consent, which
consent shall not be unreasonably withheld; and, provided, further, that all
costs associated with such promotional material shall be borne exclusively by
Buyer. All samples of the Product shall be clearly marked "For Sample Use Only."

                                   ARTICLE VI
                        CONFIDENTIALITY; NON-SOLICITATION

         SECTION 6.1 Confidentiality. (a) Each Party acknowledges that
Confidential Information of the other Party and/or its Affiliates from time to
time may be furnished to the other Party and/or its Affiliates in connection
with the exercise by the Parties of their respective rights and the fulfillment
of their respective obligations under this Agreement. Each Party acknowledges
that its access to the Confidential Information of the other Party is being
granted solely for the purpose of exercising its rights and performing its
obligations under this Agreement or the Asset Purchase Agreement (the "Permitted
Purposes") and for no other purposes. Notwithstanding the foregoing, either
Party may disclose the Confidential Information of the other Party upon
reasonable prior written notice to the other Party, to the extent required by
law, regulation, judicial or administrative process, including any reporting
requirements of the Securities and Exchange Commission.

         (b) Each Party agrees that its use of the Confidential Information of
the other Party will be solely for the Permitted Purposes and that such
information will be kept confidential and disclosed to no other Person, except
that the Confidential Information may be disclosed to such representatives and
Affiliates of the first Party who need to know such information in furtherance
of effecting the Permitted Purposes, who have been informed of the confidential
nature of such information and who have been directed, and who shall have
agreed, to treat such information confidentially and to use such information
only for the Permitted Purposes.

                                     - 10 -

<PAGE>

         (c) Each Party shall be entitled to obtain, without posting any bond
and without proof of actual damages, a restraining order, injunction, specific
performance or other form of equitable or extraordinary relief for breach of the
provisions of this Section 6.1 by the other Party, in addition to all other
remedies available at law or in equity. The Parties further agree that no
failure or delay by a Party in exercising any right, power or privilege under
this Section 6.1 will operate as a waiver thereof, nor will any single or
partial exercise preclude any other or further exercise of any right, power or
privilege under this Section 6.1.

         SECTION 6.2 Non-Solicitation. During the period commencing the
Effective Date and continuing for twelve (12) months thereafter, Buyer shall
not, and shall cause its Affiliates not to, directly or indirectly, attempt or
endeavor to solicit or entice away any former, current or future director,
officer, partner, principal, employee, agent, representative or consultant of
Seller or its Affiliates (each, a "Seller Employee") without the prior written
consent of Seller, nor shall Buyer, directly or indirectly, employ or aid or
assist in or procure the employment by any other Person of any Seller Employee
during such period without the prior written consent of Seller. This Section 6.2
shall not prohibit recruiting or general solicitations through the media that is
not directed specifically at the Seller Employees.

                                  ARTICLE VII
                        WARRANTY; LIMITATION OF LIABILITY

         SECTION 7.1 Seller's Warranty. Seller warrants to Buyer that at the
time of shipment to Buyer (a) the Products shall: (i) conform to the
Specifications; (ii) be free from material defects; (iii) be manufactured in
accordance with cGMPs, and all other applicable laws and regulations, including,
but not limited to, all other requirements of the FDA; (iv) have been stored and
distributed in conformity with all applicable cGMP requirements and with the
Specifications, including storage conditions and applicable rules and
regulations relating to the environment and health and safety; and (v) not be
adulterated or misbranded within the meaning of the United States Food, Drug and
Cosmetic Act, as amended, or the regulations issued thereunder (collectively,
the "Act"), or any similar law of any other applicable jurisdiction ((i) through
(v) being referred to collectively as the "Seller's Product Warranty"). Seller
also represents and warrants to Buyer that the Product, as manufactured by
Seller as of the date hereof, shall be manufactured in a manner that does not
infringe any third party's intellectual property rights (the "Seller's
Non-Infringement Warranty").

         SECTION 7.2 Disclaimer. EXCEPT AS SPECIFICALLY PROVIDED IN THIS
AGREEMENT, NO REPRESENTATIONS OR WARRANTIES OF ANY KIND ARE EXPRESSED OR
IMPLIED, IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, WHETHER
WRITTEN OR ORAL, OR ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR
USAGE OF TRADE, IN RESPECT OF THE PRODUCTS OR ANY OTHER SUBJECT MATTER
WHATSOEVER, INCLUDING ANY REPRESENTATIONS OR EXPRESS OR IMPLIED WARRANTIES OF
NONINFRINGEMENT, VALUE, ADEQUACY, FREEDOM FROM FAULT, QUALITY, EFFICIENCY,
SUITABILITY, USEFULNESS, OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

                                     - 11 -

<PAGE>

         SECTION 7.3 Defective Products. (a) Claims by Buyer relating to a
breach of the Seller's Product Warranty must be made prior to the expiration
date of the Product and in no event later than thirty (30) days after the date
of discovery of the alleged breach and must be in writing, specifying in
reasonable detail the nature and basis of the claim and citing relevant control
or lot numbers or other information to enable identification of the Product in
question, including samples of the Product as to which the claim is made. Other
than claims arising as a result of Seller's gross negligence or willful
misconduct, subject to Section 7.4, Seller's sole and exclusive liability to
Buyer for any such claim that is substantiated shall be limited to a refund for
the price of the related Products plus any related reimbursed shipping costs or,
at Buyer's option, replacement thereof with the Product that complies with the
Seller's Product Warranty.

         (b) If Seller does not agree with Buyer's determination that any batch
of the Product fails to comply with the Seller's Product Warranty, Seller may
submit the rejected batch of the Product to a third party testing laboratory
mutually acceptable to Buyer and Seller, which laboratory shall determine
whether such Product complies with the Seller's Product Warranty. The parties
agree that such testing laboratory's determination shall be final and the costs
of such testing will be paid by the non-prevailing party.

         (c) Each Party shall notify the other Party in writing promptly and in
any event within five (5) days of receiving any customer complaints and reported
defects relating to the Product.

         (d) Any notifications to either Party pursuant to this Section 7.3
shall be subject to the confidentiality provisions of Article VI above.

         SECTION 7.4 Indemnification. (a) Subject to Section 7.5, Seller shall
indemnify and hold Buyer and its Affiliates harmless from and against any
losses, costs, damages, fees or expenses (including, without limitation,
reasonable attorney's fees and expenses and reasonable expenses of investigation
in connection with any action, suit or proceeding) (collectively, "Losses")
arising out of any third party claim resulting from Seller's breach of Seller's
Non-Infringement Warranty or Seller's Product Warranty. Buyer shall indemnify
and hold harmless Seller and its Affiliates from and against any Losses arising
out of any third party claim resulting from any claim relating to the Products
other than those for which Seller is obligated to indemnify Buyer pursuant to
this Section 7.4.

         (b) Any Party seeking indemnification pursuant to this Section 7.4 (the
"Indemnified Party") shall promptly notify the other Party (the "Indemnifying
Party") of the claim as to which indemnification is sought, shall afford the
Indemnifying Party, at the Indemnifying Party's sole expense, the opportunity to
defend or settle the claim (in which case the Indemnifying Party shall not be
responsible for the attorneys' fees of the Indemnified Party with respect such
claim) and shall cooperate to the extent reasonably requested by the
Indemnifying Party in the investigation and defense of such claim; provided,
however, that any settlement of any such claim that would adversely affect the
rights of the Indemnified Party shall require the written approval of such
Indemnified Party, which approval shall not be unreasonably withheld; and
provided, further that an Indemnified Party shall not settle any such claim
without the written approval of the Indemnifying Party, which approval shall not
be unreasonably withheld.

                                     - 12 -

<PAGE>

         (c) The foregoing indemnification obligations shall survive any
termination or expiration of this Agreement, in whole or in part.

         SECTION 7.5 Limitation of Liability. (a) Neither Party shall be liable
to the other Party for loss of profits or consequential, indirect, special,
punitive or other similar damages arising out of any breach of this Agreement.

         (b) Except for obligations arising under Section 7.4 or as a result of
a breach by either Party of Section 6.1 hereof, in no event shall either Party
be liable to the other Party for any amounts in excess of the amounts actually
paid to Seller under this Agreement during the preceding twelve (12) month
period or $175,000, whichever is less. Other than claims arising as a result of
gross negligence or willful misconduct, neither Party shall be liable to the
other Party under Section 7.4 of this Agreement for amounts in excess of the
insurance recovery available in respect of the subject third-party claim under
the policy maintained by the indemnifying party in accordance with Section 7.7
of this Agreement.

         SECTION 7.6 Recalls. Buyer shall be the sole Party that may initiate a
recall, field alert, Product withdrawal or field correction (collectively
"Recall"), unless otherwise required by applicable laws. In the event Buyer
believes a Recall is necessary for any Product, Buyer shall notify Seller of
such Recall, and Seller shall provide all necessary cooperation and assistance
to Buyer. Seller shall bear the cost of any Recall if such Recall is a result of
Seller's breach of its obligations under this Agreement, including any of
Seller's Product Warranty or Seller's Non-Infringement Warranty; otherwise,
Buyer shall be responsible for the cost of any Recall.

         SECTION 7.7 Insurance. (a) Buyer represents that it has, and will
maintain in effect during the Term and for two (2) years thereafter commercial
insurance coverage (including products liability insurance) with limits of not
less than $5,000,000 per occurrence, and $5,000,000 in the aggregate. Buyer
shall obtain a vendor's endorsement under such insurance coverage naming Seller
as an additional insured, and shall obtain a waiver of subrogation under such
coverage with respect to Seller. Buyer shall furnish Seller with a
certificate(s) evidencing such insurance, which certificate(s) shall contain a
provision requiring the insurance carrier to give Seller at least thirty (30)
days prior written notice of any cancellation or material change in such
insurance.

         (b) Seller represents that it has, and will maintain in effect during
the Term and for two (2) years thereafter commercial insurance coverage
(including products liability insurance) with limits of not less than $5,000,000
per occurrence, and $5,000,000 in the aggregate. Seller shall obtain a vendor's
endorsement under such insurance coverage naming Buyer as an additional insured,
and shall obtain a waiver of subrogation under such coverage with respect to
Buyer. Seller shall furnish Buyer with a certificate(s) evidencing such
insurance, which certificate(s) shall contain a provision requiring the
insurance carrier to give Buyer at least thirty (30) days prior written notice
of any cancellation or material change in such insurance.

                                     - 13 -

<PAGE>

                                  ARTICLE VIII
                                TERM; TERMINATION

         SECTION 8.1 Term of Agreement. Unless terminated sooner pursuant to the
terms hereof, this Agreement shall commence on the Effective Date and shall
continue in effect until the fifth anniversary of the Effective Date (such
period, as it may be terminated, being referred to as the "Term"). At the end of
the Term, both Parties can agree in writing to renew this Agreement for
additional two-year terms.

         SECTION 8.2 Termination by Either Party. Either Party may terminate
this Agreement as follows:

         (a) in the event of a material breach or default of the other Party of
the terms and conditions of this Agreement; provided, however, that the
non-defaulting Party shall first give to the defaulting Party written notice of
the proposed termination of this Agreement, specifying the grounds therefor.
Upon receipt of such notice, the defaulting Party shall have forty-five (45)
days to respond by curing such material breach or default. If the defaulting
Party fully cures such stated material breach or default within the forty-five
(45) day period, this Agreement shall continue in full force and effect. If the
defaulting Party fails to fully cure such stated material breach or default
within the forty-five (45) day period, the non-defaulting Party may terminate
this Agreement effective upon delivery of a written notice to the defaulting
Party at any time before the breach or default is cured; or

         (b) if the other Party is adjudicated bankrupt, becomes insolvent,
makes a general assignment for the benefit of creditors, or takes the benefit of
any insolvency, reorganization or other relief act, or if a receiver or trustee
be appointed for its property, or if any substantial part of the assets is the
object of attachment, sequestration or other type of comparable proceeding, and
such proceeding is not vacated or terminated within sixty (60) days after its
commencement or institution.

         SECTION 8.3 Termination by Seller. Seller may terminate this Agreement
in the event of a material change in the requirements of the FDA or the Act that
Seller reasonably believes would render Seller unable on a commercially
reasonable basis to manufacture or sell the Product in conformity with the
requirements of either the FDA or the Act.

         SECTION 8.4 Rights Upon Termination. (a) Following the expiration or
termination of this Agreement, all further rights and obligations of the Parties
under this Agreement shall cease; provided, however, that the termination or
expiration of this Agreement shall not affect the rights and obligations of the
Parties arising prior to such termination or expiration; and provided, further
that the Parties shall not be relieved of (i) their respective obligations to
pay monies due or which become due as of or subsequent to the date of expiration
or termination; and (ii) any other respective obligations under any provision of
this Agreement which by its terms survive the date of such expiration or
termination, including, without limitation, the provisions of Sections 6.1, 6.2,
7.4, 7.5, 7.7, 9.4 and 9.9 and this Section 8.4.

         (b) In the event Buyer terminates this Agreement pursuant to Section
8.2 of this Agreement, Seller shall provide Buyer with reasonable access to
Seller's manufacturing process,

                                     - 14 -

<PAGE>

records, approvals and personnel to assist Buyer in arranging an uninterrupted
supply of finished Products or an effective and efficient manufacture site
transfer from Seller to Buyer, and all information obtained by Buyer as a result
of such access shall be protected as "Confidential Information" hereunder.

         (c) Except as otherwise expressly provided in this Section 8.4, no
consideration or indemnity shall be payable to Buyer or Seller either for loss
of profit, goodwill, creation of clientele or other like items, or for
advertising costs, costs of samples or supplies, termination of employees,
employees' salaries and other related items solely by virtue of termination of
this Agreement.

                                   ARTICLE IX
                                  MISCELLANEOUS

         SECTION 9.1 Assignment. This Agreement may not be assigned or otherwise
transferred by any Party without the prior written consent of the other Party,
such consent not to be unreasonably withheld; provided, however, that no such
assignment shall relieve the assigning Party of liability for its obligations
hereunder. Notwithstanding the foregoing sentence, either Party may assign or
otherwise transfer this Agreement to any Affiliate; provided, that this
Agreement shall be retransferred to the transferring Party if such entity ceases
to be an Affiliate of such Party; and provided, that the assigning Party shall
guarantee the performance of such Affiliate; and provided, further, that in no
event shall Buyer assign or transfer this Agreement to any Person a material
portion of whose business is engaged in the research and development or
manufacturing of intranasally delivered products. Notwithstanding the foregoing,
either Party may assign or transfer this Agreement without the other Party's
consent to a third party that acquires all or substantially all of the
transferring Party's assets or business; provided, that in no event shall Buyer
assign or transfer this Agreement to any Person a material portion of whose
business is engaged in the research and development or manufacturing of
intranasally delivered products. The provisions of this Agreement shall be
binding upon, and shall inure to the benefit of, the successors and permitted
assigns of the Parties. Any purported assignment or other transfer not in
compliance with this Section 9.1 shall be null and void.

         SECTION 9.2 Force Majeure. The Parties shall not be liable for the
failure or delay in performing any obligation under this Agreement (other than
the failure to pay any sums due and payable hereunder) if and to the extent such
failure or delay is due to (i) acts of God; (ii) weather, fire or explosion;
(iii) war, acts of terror, invasion, riot or other civil unrest; (iv)
governmental laws, orders, restrictions, actions, embargoes or blockages; (v)
action by the FDA or any other regulatory authority which prohibits the
manufacture, sale or distribution of the Products, except to the extent due to
Seller's breach of its obligations hereunder; (vi) regional, national or foreign
emergency; (vii) injunction, strikes, lockouts, labor trouble or other
industrial disturbances beyond the control of the affected Party; (viii)
shortage of adequate fuel, power, materials, or transportation facilities; or
(ix) any other event which is beyond the reasonable control of the affected
Party (each, a "Force Majeure Event"); provided, however, that the Party
affected shall promptly notify the other Party in writing of the Force Majeure
Event and shall exert its reasonable commercial efforts to eliminate, cure or
overcome any such causes and to resume performance of its obligations as soon as
possible.

                                     - 15 -

<PAGE>

         SECTION 9.3 Entire Agreement; Amendments; Modification. This Agreement
constitutes the entire agreement between the Parties hereto with respect to the
subject matter hereof, and supersedes all previous negotiations, agreements and
commitments with respect thereto, and shall not be released, discharged, amended
or modified in any manner except by instruments signed by duly authorized
representatives of each of the Parties hereto. If any provision of this
Agreement or the application thereof to any Party or circumstance shall be
declared void, illegal or unenforceable, the remainder of this Agreement shall
be valid and enforceable to the extent permitted by applicable law. In such
event, the Parties shall use their best efforts to replace the invalid or
unenforceable provision with a provision that, to the extent permitted by
applicable law, achieves the purposes intended under the invalid or
unenforceable provision.

         SECTION 9.4 Applicable Law. This Agreement, all sales transactions
pursuant hereto, and any claim or controversy relating hereto or thereto, shall
be governed by and interpreted exclusively in accordance with the internal laws
of the State of California without regard to principles of conflicts of laws,
except matters of intellectual property law, which shall be determined in
accordance with the intellectual property laws relevant to the intellectual
property in question. Each of the Parties waives any application of the United
Nations Convention on Contracts for the International Sale of Goods.

         SECTION 9.5 Arbitration. Any dispute, controversy or claim arising out
of or in connection with this Agreement shall be determined and settled by
arbitration in Bothell, Washington, pursuant to the Rules of Arbitration then in
effect of the American Arbitration Association. Any award rendered shall be
final and conclusive upon the parties and a judgment thereon may be entered in a
court having competent jurisdiction. Any arbitration hereunder shall be (i)
submitted to an arbitration tribunal comprised of three (3) independent members
knowledgeable in the pharmaceutical industry, one of whom shall be selected by
the other two arbitrators; (ii) allow for the parties to request discovery
pursuant to the rules then in effect under the Federal Rules of Civil Procedure
for a period not to exceed 90 days; and (iii) require the award to be
accompanied by findings of fact and a statement of reasons for the decision.
Each party shall bear its own costs and expenses, including attorney's fees
incurred in any dispute, which is determined and/or settled by arbitration
pursuant to this Section. Except where clearly prevented by the area in dispute,
both parties agree to continue performing their respective obligations under
this Agreement while the dispute is being resolved. Arbitration shall not
prevent any party from seeking injunctive relief where such remedy is an
appropriate form of remedy under the circumstances.

         SECTION 9.6 Independent Contractor. Nothing contained in this Agreement
shall constitute a Party as a partner, employee or agent of the other Party, nor
shall any Party hold itself out as such. Neither Party shall have the right or
authority to incur, assume or create, in writing or otherwise, any warranty,
liability or other obligation of any kind, express or implied, in the name or on
behalf of the other Party, and each Party is and shall remain an independent
contractor, responsible for its own actions. Except as otherwise explicitly
provided herein, each Party shall be responsible for its own expenses incidental
to its performance of this Agreement.

         SECTION 9.7 Set-Off. The Parties' obligations under this Agreement
shall be unconditional, except as provided in this Agreement, and shall not be
subject to any defense,

                                     - 16 -

<PAGE>

setoff, counterclaim or similar right against the other Party or any of its
Affiliates that could be asserted by the Parties or any of their Affiliates
under any other contract, agreement, arrangement or understanding between the
Parties or otherwise under law.

         SECTION 9.8 Waivers. No claim or right arising out of or relating to a
breach of any provision of this Agreement can be discharged in whole or in part
by a waiver or renunciation of the claim or right unless the waiver or
renunciation is supported by consideration and is in writing signed by the
aggrieved Party. Any failure by any Party to enforce at any time any provision
under this Agreement shall not be considered a waiver of that Party's right
thereafter to enforce each and every provision of this Agreement.

         SECTION 9.9 Notices. All notices and communications required or
permitted to be given under this Agreement shall be in writing and shall be sent
by facsimile transmission, or mailed postage prepaid by first-class certified
mail, or delivered by a nationally recognized express courier service, or
hand-delivered, addressed as follows:

         (a) If to Seller:      Nastech Pharmaceutical Company, Inc.

                                            3450 Monte Villa Parkway
                                            Bothell, Washington 98021
                                            Attention:  Chief Executive Officer
                                            Fax:  (425) 908-3650

         (b) If to Buyer:       Questcor Pharmaceuticals, Inc.

                                            3260 Whipple Road
                                            Union City, California 94587
                                            Attention:  Chief Executive Officer
                                            Fax:  (510) 400-0715

Any party may change the Persons or addresses to which any notices or other
communications to it should be addressed by notifying the other parties as
provided above. Any notice or other communication, if addressed and sent, mailed
or delivered as provided above, shall be deemed given or received three (3) days
after the date of mailing as indicated on the certified mail receipt, or the
next business day if delivered to an express courier service, or on the date of
delivery or transmission if hand-delivered or sent by facsimile transmission.

         SECTION 9.10 Headings. The headings contained herein are included for
convenience of reference only and do not constitute a part of this Agreement.

         SECTION 9.11 Severability. If any provision hereof should be held
invalid, illegal or unenforceable in any respect in any jurisdiction, the
invalid, illegal or unenforceable of one or several provisions of this Agreement
shall not affect the validity of this Agreement as a whole. The Parties shall
make a good faith effort to replace the invalid or unenforceable provision with
a valid one which in its economic effect is most consistent with the invalid or
unenforceable one.

                                      - 17 -

<PAGE>

         SECTION 9.12 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                            [Signature Page Follows]

                                     - 18 -

<PAGE>

         IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their respective duly authorized representatives as of the date
first written above.

                                    NASTECH PHARMACEUTICAL COMPANY, INC.

                                    By:    ________________________________
                                           Name:  Steven C. Quay, M.D., Ph.D.
                                           Title: President and CEO

                                           QUESTCOR PHARMACEUTICALS, INC.

                                    By:    _______________________
                                           Name:
                                           Title:

                                     - 19 -exv10w6

 

EXHIBIT 10.6

AMENDMENT TO OPTION AND LICENSE AGREEMENT

BETWEEN

THE UNIVERSITY OF SOUTHERN CALIFORNIA

AND

BIOKEYS PHARMACEUTICALS, INC.

          THIS AMENDMENT (this “Amendment”) is made this 21st day of April, 2003 by
and between the UNIVERSITY OF SOUTHERN CALIFORNIA, (hereinafter “USC”), a
California nonprofit corporation with its principal place of business at
University Park, Los Angeles, California 90089 and, and BioKeys
Pharmaceuticals, Inc., a Delaware corporation, with its principal place of
business at 9948 Hibert Street, Suite 100, San Diego, California 92131
(hereinafter “BPI”).

          WHEREAS USC and BPI entered into an Option and License Agreement dated
August 17, 2000 (the “Option and License Agreement”), for the purpose of
developing technology for potential commercialization;

          WHEREAS, the parties desire to amend the Option and License Agreement to
restate certain terms.

          NOW THEREFORE, in consideration of the mutual covenants contained herein,
USC and BPI hereby agree as follows:

          1.     To amend the Option and License Agreement such that the text of Section
2 c. shall be deleted and replaced with the following:

          ““FIELD OF USE” shall mean drugs to treat Human Papillomavirus (HPV)
infections, HIV infections, HIV/HPV coinfections and drug delivery for other
human therapeutic uses”.

          2.     To amend the Option and License Agreement such that the text of Section
5 c. shall be deleted and replaced with the following:

          “The Licensee will pay product milestone payments. The milestone payments
on each PRODUCT will be [omitted pursuant to a request for confidential
treatment] Dollars ($[omitted pursuant to a request for confidential
treatment]) commencing when each drug candidate in product development enters
Phase I human clinical trials; [omitted pursuant to a request for confidential
treatment] Dollars ($[omitted pursuant to a request for confidential
treatment]) when each drug candidate in product development reaches Phase II
human clinical trials, [omitted pursuant to a request for confidential
treatment] Dollars ($[omitted pursuant to a request for confidential
treatment]) when each drug candidate in product development reaches Phase III
human clinical trials and [omitted pursuant to a request for confidential
treatment] Dollars ($[omitted pursuant to a request for confidential
treatment]) when each drug candidate in product development has received market
approval from the FDA or other government regulatory

 

 

agency. Milestone payments are to be paid within sixty (60) days of
achievement of each milestone.”

          3.     To amend the Option and License Agreement such that the text of Section
7 a. shall be deleted and replaced with the following:

          “During the course of this Agreement, USC shall file, prosecute and
maintain the PATENTS. Should Licensee require e filing of foreign patents,
Licensee shall inform USC in writing and USC shall take responsibility for
filing, prosecuting and maintaining said foreign patents. USC will inform
outside patent counsel that copies of all correspondence related to the filing,
prosecution and maintenance of the PATENTS will be sent to Licensee at the same
time such correspondence is sent to USC. Licensee shall have the right, at its
sole expense, to confer with outside patent counsel concerning the filing,
prosecution and maintenance of the PATENTS. However, all instructions to
outside patent counsel concerning the filing, prosecution and maintenance of
the PATENTS shall be the sole responsibility of USC.”

          4.     To amend the Option and License Agreement such that the text of Section
7 c. shall be deleted and replaced with the following:

          “On or before April 15, 2002, Licensee shall pay to USC all of the unpaid
reimbursable patent expenses incurred by USC and included in the invoice dated
February 18, 2003 sent to and received by Licensee, in the amount of [omitted
pursuant to a request for confidential treatment] ($[omitted pursuant to a
request for confidential treatment]).”

          5.     All other provisions of the Option and License Agreement are unchanged
and therefore, remain in full force and effect.

          6.     This Amendment may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one and
the same agreement.

          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized representatives.

	 	 	 	 	 
	UNIVERSITY OF SOUTHERN CALIFORNIA	 	
BIOKEYS PHARMACEUTICALS, INC.
	 	 	 	 	 
	By:	/s/ Dennis F. Dougherty	 	
By:	/s/ Nicholas J. Viria
	 	 	 	 	 
	Name:  	Dennis F. Dougherty	 	
Name:  	Nicholas J. Viria
	 	 	 	 	 
	Title:	Sr. V.P., Admin.	 	
Title:	CEO
	 	 	 	 	 
	Date:	5/30/03	 	
Date:	04/21/03

2

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