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Exhibit 10.40    
    

Confidential
Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions. 

Amended and Restated Manufacturing Services Agreement  

 Among  

 Patheon Inc., Patheon Pharmaceuticals Inc. & MOVA

Pharmaceutical Corporation  

 and  

 Sepracor Inc.  

 November 6, 2007  

 

  Table of Contents  

	ARTICLE 1	 	2
	
INTERPRETATION	
 	
2
	 	
 1.1	
 	

Definitions	
 	

2
	 	1.2	 	Currency	 	4
	 	1.3	 	Sections and Headings	 	4
	 	1.4	 	Singular Terms	 	5
	 	1.5	 	Schedules	 	5
	
ARTICLE 2	
 	
5
	
MANUFACTURING RESPONSIBILITIES AND CONTRACT ADMINISTRATION	
 	
5
	 	
 2.1	
 	

Manufacturing Services	
 	

5
	 	2.2	 	Standard of Performance	 	6
	 	2.3	 	API Yield Incentive	 	6
	 	2.4	 	Agreement Administration	 	7
	
ARTICLE 3	
 	

8
	
SEPRACOR'S OBLIGATION	
 	

8
	 	
 3.1	
 	

Payment	
 	

8
	 	3.2	 	API	 	8
	
ARTICLE 4	
 	
9
	
CONVERSION FEES AND COMPONENT COSTS	
 	
9
	 	
 4.1	
 	

Fees and Component Costs	
 	

9
	 	4.2	 	Adjustments to Current Year's Pricing	 	9
	 	4.3	 	Adjustment to Subsequent Year's Pricing	 	9
	 	4.4	 	Adjustments Due to Technical Changes	 	11
	 	4.5	 	Multi-Country Packaging Requirements	 	11
	 	4.6	 	Cost Improvement Program	 	12
	
ARTICLE 5	
 	
12
	
ORDERS, DELIVERY, INVOICING, PAYMENT, PRODUCT DEFICIENCIES	
 	
12
	 	
 5.1	
 	

Market Outlook	
 	

12
	 	5.2	 	Orders and Forecasts	 	12
	 	5.3	 	Modification or Cancellation of Orders	 	13
	 	5.4	 	Advance Purchase of Components	 	13
	 	5.5	 	Minimum Run Quantities	 	13
	 	5.6	 	Shipments	 	13
	 	5.7	 	Invoices and Payment	 	14
	 	5.8	 	Product Deficiencies	 	14
	
ARTICLE 6	
 	
15
	
CO-OPERATION	
 	
15
	 	
 6.1	
 	

Quarterly Review	
 	

15
	 	6.2	 	Product Recalls and Returns	 	15
	 	6.3	 	Customer Questions and Complaints	 	15

i

 

	 	6.4	 	Governmental Agencies	 	16
	 	6.5	 	Records and Accounting by Patheon	 	16
	 	6.6	 	Inspection	 	16
	 	6.7	 	Access	 	17
	 	6.8	 	Reports	 	17
	 	6.9	 	FDA Filings	 	17
	
ARTICLE 7	
 	
17
	
TERMS AND TERMINATION	
 	
17
	 	
 7.1	
 	

Term	
 	

17
	 	7.2	 	Early Termination	 	18
	 	7.3	 	Obligation on Termination	 	18
	
ARTICLE 8	
 	
19
	
REPRESENTATIONS, WARRANTIES AND COVENANTS	
 	
19
	 	
 8.1	
 	

Authority	
 	

19
	 	8.2	 	Non-Infringement	 	19
	 	8.3	 	Debarred Persons	 	20
	 	8.4	 	Permits	 	20
	 	8.5	 	Compliance with Laws	 	20
	 	8.6	 	Patheon Warranty	 	20
	
ARTICLE 9	
 	
20
	
REMEDIES AND INDEMNITIES	
 	
20
	 	
 9.1	
 	

Consequential Damages	
 	

20
	 	9.2	 	Limitation of Liability	 	20
	 	9.3	 	Patheon Indemnification	 	21
	 	9.4	 	Sepracor Indemnification	 	21
	 	9.5	 	Reasonable Allocation of Risk	 	22
	
ARTICLE 10	
 	
22
	
CONFIDENTIALITY	
 	
22
	 	
 10.1	
 	

Disclosure	
 	

22
	 	10.2	 	Use of Information	 	22
	 	10.3	 	Exceptions	 	22
	 	10.4	 	Presumption of Confidentiality	 	22
	
ARTICLE 11	
 	
22
	
DISPUTE RESOLUTION	
 	
22
	 	
 11.1	
 	

Commercial Disputes	
 	

22
	 	11.2	 	Technical Dispute Resolution	 	23
	
ARTICLE 12	
 	
23
	
MISCELLANEOUS	
 	
23
	 	
 12.1	
 	

Inventions	
 	

23
	 	12.2	 	Patent Matters	 	24
	 	12.3	 	Intellectual Property	 	25
	 	12.4	 	Insurance	 	25

ii

 

	 	12.5	 	Independent Contractors	 	25
	 	12.6	 	No Waiver	 	25
	 	12.7	 	Assignment	 	25
	 	12.8	 	Force Majeure	 	26
	 	12.9	 	Additional Product	 	26
	 	12.10	 	Notices	 	26
	 	12.11	 	Severability	 	27
	 	12.12	 	Entire Agreement	 	27
	 	12.13	 	Original Agreement	 	28
	 	12.14	 	No Third Party Benefit or Right	 	28
	 	12.15	 	Execution of Counterparts	 	28
	 	12.16	 	Governing Law	 	28
	 	12.17	 	Capital Requirements	 	28
	
SCHEDULE A	
 	

29
	
PRODUCT SPECIFICATIONS	
 	

29
	
SCHEDULE B	
 	

30
	
FEES AND MINIMUM RUN QUANTITIES	
 	

30
	
SCHEDULE C	
 	

32
	
API	
 	

32
	 	
 Supplier(s)	
 	

32
	
SCHEDULE D	
 	

33
	
API REIMBURSEMENT VALUE	
 	

33
	
MAXIMUM REIMBURSEMENT VALUE	
 	

33
	
SCHEDULE E	
 	

34
	
BATCH NUMBERING AND EXPIRATION DATES	
 	

34
	
SCHEDULE F 	
 	

35
	
TECHNICAL DISPUTE RESOLUTION	
 	

35
	
SCHEDULE G	
 	

37
	
PATHEON INC. QUALITY AGREEMENT	
 	

37
	
SCHEDULE H	
 	

50
	
PPI QUALITY AGREEMENT	
 	

50
	
SCHEDULE I	
 	

51
	
MOVA QUALITY AGREEMENT	
 	

51
	
SCHEDULE J	
 	

52
	
CAPITAL REQUIREMENTS	
 	

52

iii

 

  AMENDED AND RESTATED MANUFACTURING SERVICES AGREEMENT  

        THIS AGREEMENT made as of the 6th day of November, 2007 

AMONG: 

PATHEON INC., a corporation existing under the laws of Canada
("Patheon Inc."), PATHEON PHARMACEUTICALS INC., a corporation existing under the laws of
Delaware ("PPI"), and MOVA PHARMACEUTICAL CORPORATION, a corporation existing under the laws of the
Commonwealth of Puerto Rico ("MOVA"), 

("Patheon"), 

-and- 

SEPRACOR INC.,

a corporation existing under the laws of the State of Delaware, USA, 

("Sepracor"). 

        WHEREAS
Patheon Inc. and Sepracor entered into a manufacturing services agreement dated March 1, 2004, as amended by amendment no. 1 dated July 18, 2005, and
as further amended by amendment no. 2
dated November 1, 2005, and amendment no. 3 dated May 31, 2006 (collectively, the "Original Agreement"); 

        AND
WHEREAS the parties have decided to further amend the Original Agreement by executing this amendment and restatement of the Original Agreement to, inter
alia, add MOVA and PPI as parties, revise the terms to reflect the current intent of the Parties, and supercede and replace the Original Agreement. 

        THIS
AGREEMENT WITNESSES THAT in consideration of the rights conferred and the obligations assumed herein, and for other good and valuable consideration (the receipt and sufficiency of
which are acknowledged by each party), and intending to be legally bound the parties agree as follows: 

ARTICLE 1  

INTERPRETATION  

1.1   Definitions.  

        The following terms shall, have the respective meanings set out below and grammatical variations of such terms shall have corresponding meanings: 

"API Reimbursement Value" means the value to be attributed to the API for purposes of Section 2.3 of this Agreement, as set out in
Schedule D hereto; 

"Active Pharmaceutical Ingredient" or "API" means the materials listed on Schedule C hereto; 

"Affiliate" means: 

	(a)
	a
business entity which owns, directly or indirectly, a controlling interest in a party to this Agreement, by stock ownership or otherwise; or

	(b)
	a
business entity which is owned by a party to this Agreement, either directly or indirectly, by stock ownership or otherwise; or

	(c)
	a
business entity, the majority ownership of which is directly or indirectly common to the majority ownership of a part to this Agreement; 

"Business Day" means a day other than a Saturday, Sunday or a day that is a statutory holiday in the Province of Ontario, Canada, the State of
Massachusetts, United States, the State of Ohio, United States or the Commonwealth of Puerto Rico; 

2

 

"cGMPs" means current good manufacturing practices as described in: 

        (a)   Division
2 of Part C of the Food and Drug Regulations (Canada); and, 

        (b)   Parts 210
and 211 of Title 21 of the United States' Code of Federal Regulations; 

together
with the latest Health Canada and FDA guidance documents pertaining to manufacturing and quality control practice, all as updated, amended and revised from time to time; 

"Components" means, collectively, all packaging components, raw materials and ingredients (including labels, product inserts and other labelling for the
Products), required to be used in order to produce the Products in accordance with Sepracor's Technical Information, other than the API; 

"Confidential Information" means a party's technology, data, know-how or information whether written or oral, technical or
non-technical, including financial statements, reports, pricing, trade secrets, secret processes, formulas, customer data (including customer lists), and the like, that is disclosed to the
other party; 

"Deficiency Notice" shall have the meaning ascribed thereto in Section 5.7(a); 

"Effective Date" means November 6, 2007; 

"EXW" means ex-works, as that term is defined in INCOTERMS 2000; 

"FDA" means the United States government department known as the Food and Drug Administration; 

"Firm Orders" has the meaning specified in Section 5.2(b); 

"Health Canada" means the section of the Canadian government known as Health Canada and includes, among other departments, the Therapeutic Products
Directorate and the Health Products and Food Branch Inspectorate; 

"Intellectual Property" includes, without limitation, rights in patents, patent applications, formulae, trade-marks, trade-mark
applications, trade-names, trade secrets, Inventions, copyright, industrial designs, know-how and, with respect to Sepracor, Sepracor's Technical Information; 

"Inventions" means information relating to any innovation, improvement, development, discovery, computer program, device, trade secret, method,
know-how, process, technique or the like, whether or not written or otherwise fixed in any form or medium, regardless of the media on which it is contained and whether or not patentable or
copyrightable; 

"Inventory" means all inventories of Components and work-in-process produced or held by Patheon in connection with the
manufacture of the Products but, for greater certainty, does not include the API; 

"Manufacturing Responsibilities" has the meaning specified in Section 2.2; 

"Manufacturing Site" means (i) in respect of Patheon Inc., Patheon's facilities located at 2100 Syntex Court, Mississauga, Ontario,
Canada, (ii) in respect of PPI, PPI's facilities located at 2110 East Galbraith Road, Cincinnati, Ohio 45237-1625, USA, (iii) in respect of MOVA, MOVA's facilities located at
State Road # 670, Km. 2.7, Bo. Coto Norte, Manatí, Puerto Rico 00674, and (iv) any additional facility owned by Patheon Inc. or its Affiliates where Manufacturing Services
are to be performed as agreed to by the parties in writing. 

"Manufacturing Services" means the manufacturing, quality control, quality assurance, packaging and related services, as contemplated in this Agreement,
required to produce Products from API and Components; 

"Minimum Run Quantity" means the minimum number of batches of a Product to be produced during the same cycle of manufacturing as set forth in
Schedule B hereto; 

"Patheon" collectively means Patheon Inc., PPI and MOVA; 

3

 

"Patheon Administrator" means the individual or entity designated by Patheon to act for or on behalf of Patheon for the purpose of interacting with
Sepracor regarding the performance if this Agreement, including but not limited to communicating with Sepracor, accepting orders from Sepracor and resolving issues as needed 

"Products" means the products listed on Schedule A hereto; 

"Sepracor's Technical Information" means the file, for each Product, which is provided by Sepracor to the Patheon Administrator, on behalf of Patheon,
and which contains documents relating to such Product, including, without limitation: 

	(a)
	the
specifications, procedures, requirements, standards and other data set forth in Schedule A;

	(b)
	a
detailed description of each Product; including its physical and chemical characteristics and stability;

	(c)
	manufacturing
and packaging directions;

	(d)
	shipping
and storage requirements;

	(e)
	protocols
for validating processes or equipment to produce Products;

	(f)
	quality
control and quality assurance procedures for sampling, testing, documenting and releasing API, Components and in-process and finished Products; and

	(g)
	all
environmental, health and safety information relating to the Product including material safety data sheets, incident reports, risk analyses, health concerns, and preventative
measures, 

all
as updated, amended and revised from time to time by Sepracor in accordance with the terms of this Agreement; 

"Quality Agreement" means (i) in respect of Patheon, the agreement dated March 12, 2007 between Patheon and Sepracor setting out the
quality assurance standards to be applicable to the Manufacturing Services provided by Patheon, which agreement is attached hereto as Schedule G, (ii) in respect of PPI, the agreement
setting out the quality assurance standards to be applicable to the Manufacturing Services provided by PPI, which agreement will be attached hereto as Schedule H, and (iii) in respect of
MOVA, the agreement setting out the quality assurance standards to be applicable to the Manufacturing Services provided by MOVA, which agreement will be attached hereto as Schedule I (each a
"Quality Agreement" and collectively the "Quality Agreements"); 

"Technical Dispute" has the meaning specified in Section 11.2; 

"Territory" means in the geographic area of the United States of America, its territories and possessions; 

"Third Party Rights" means the Intellectual Property of any third party; and 

"Year" means a calendar year. 

1.2   Currency.  

        Unless otherwise indicated, all monetary amounts are expressed in this Agreement in the lawful currency of the United States of America. 

1.3   Sections and Headings.  

        The division of this Agreement into Articles, sections, subsections and Schedules and the insertion of headings are for convenience of reference only and shall
not affect the interpretation of this Agreement. Unless otherwise indicated, any reference in this Agreement to a Section or Schedule refers to the specified Section or Schedule to this Agreement. In
this Agreement, the terms "this Agreement", "hereof",
"herein", "hereunder" and similar expressions refer to this Agreement and not to any particular part,
Section, Schedule or the provision hereof. 

4

 

1.4   Singular Terms.  

        Except as otherwise expressly provided herein or unless the context otherwise requires, all references to the singular shall include the plural and vice versa. 

1.5   Schedules.  

        The following Schedules are attached to, incorporated in and form part of this Agreement: 

	Schedule A	 	—	 	Product Specifications
	Schedule B	 	—	 	Fees and Minimum Run Quantities
	Schedule C	 	—	 	API
	Schedule D	 	—	 	API Reimbursement Value and Maximum Reimbursement Value
	Schedule E	 	—	 	Batch Numbering and Expiration Dates
	Schedule F	 	—	 	Technical Dispute Resolution
	Schedule G	 	—	 	Patheon Quality Agreement
	Schedule H	 	—	 	PPI Quality Agreement
	Schedule I	 	—	 	MOVA Quality Agreement
	Schedule J	 	—	 	Capital Requirements
	Schedule K	 	—	 	Report of Annual Active Pharmaceutical Ingredient Inventory Reconciliation and Calculation of Actual Annual Yield and Yield Incentive
	Schedule L	 	—	 	Yield Incentive Scheme
	Schedule M	 	—	 	Reimbursement for shipments from Manati, PR

ARTICLE 2  

MANUFACTURING RESPONSIBILITIES AND CONTRACT ADMINISTRATION  

2.1   Manufacturing Services.  

        Patheon shall provide the Manufacturing Services for the fees specified in Schedule B in order to produce Products for Sepracor pursuant to Firm Orders
submitted by Sepracor hereunder. Patheon agrees to manufacture the Products in accordance with the Technical Information, the Specifications, the applicable laws, rules and regulations, and the terms
and conditions of this Agreement and the Quality Agreements, and to sell the Products to Sepracor pursuant to the terms and conditions stated herein 

        In
the event Sepracor wishes to have Patheon manufacture Product for distribution and sale in a jurisdiction outside of the Territory ("New Jurisdiction"), Sepracor shall inform Patheon
of any additional requirements relating to the distribution and sale of the Product in such New Jurisdiction and any increases in costs to provide the Manufacturing Services shall be borne by
Sepracor. Any changes to this Agreement that may be required as a result of the addition of a New Jurisdiction shall be agreed to by the parties in a written amendment to this Agreement. 

        In
providing the Manufacturing Services, Patheon shall perform each of the following services: 

	(a)
	Conversion of API and Components.    Patheon shall convert API and Components into Products.

	(b)
	Quality Control and Quality Assurance.    Patheon shall perform the quality control and quality assurance testing specified
in the Quality Agreements. Each time Patheon ships Products to Sepracor, it shall provide Sepracor with a certificate of analysis that sets out the test results for each batch of Products, and that
certifies that such batch has been evaluated by its Quality Control/Quality Assurance department and that the Products comply with Sepracor's Technical Information. 

5

 

	(c)
	Components.    Patheon shall handle, store, purchase and test all Components (with the exception of those that are supplied
by Sepracor) at Patheon's expense and in accordance with this Agreement and Sepracor's Technical Information.

	(d)
	Packaging.    Patheon shall package the Products with labels, product inserts and other packaging as set out in Sepracor's
Technical Information. In addition, Patheon shall make arrangements for and implement the imprinting of batch numbers and expiration dates for each Product shipped. Such batch numbers and expiration
dates shall be affixed on the Products and on the shipping carton of each Product as outlined in Sepracor's Technical Information and as required by cGMPs. The system used by Patheon for batch
numbering and expiration dates is detailed in Schedule E hereto. Sepracor may, in its sole discretion, make changes to labels, product inserts and other packaging for the Products, which
changes shall be submitted by Sepracor to all applicable governmental agencies and other third parties responsible for the approval of the Products. Patheon names shall not appear on the label or
anywhere else on the Products unless: (i) required by a governmental authority or applicable laws or regulations; or (ii) Patheon expressly consents to such use in writing.

	(e)
	API Importing.    Patheon and Sepracor will cooperate and provide such assistance to each other as may be reasonably
necessary to permit the import of the API into Canada and the Commonwealth of Puerto Rico.

	(f)
	Bulk Product Export.    Patheon shall be responsible for preparation of all documentation required for the movement of
Product between Patheon Manufacturing Sites.

	(g)
	Additional Services.    Any additional services, including, but not limited to validation activities and stability services,
may be performed by Patheon, at Sepracor's request, subject to such terms and fees as may be mutually agreed by the parties in writing. 

2.2   Standard of Performance.  

        Patheon shall provide the Manufacturing Services in accordance with Sepracor's Technical Information and all applicable laws and regulations including but not
limited to, cGMPs and the Manufacturing and Controls (CMC) section of the Product's New Drug Application (and all amendments and supplements thereto). Patheon's responsibilities and obligations with
respect to the provision of the Manufacturing Services as set forth in this Article 2 are hereinafter referred to as the "Manufacturing
Responsibilities". 

2.3   API Yield Incentive.  

	(a)
	After
the Effective Date, the Patheon Administrator shall provide Sepracor with an annual inventory report and reconciliation of the API held by Patheon, which shall contain the
following information for such Year: 

Quantity Received:    The total quantity of API that complies with the Sepracor Technical Information and is received at a Manufacturing Site
during the applicable period. 

Quantity Dispensed:    The total quantity of API dispensed at each Manufacturing Site during the applicable period. The Quantity Dispensed is
calculated by adding the quantity received to the inventory of API that complies with the Sepracor Technical Information and is held at the beginning of the applicable period, less the inventory of
API held at the end of such period. The Quantity Dispensed shall not include any API lost or damaged in the course of technology transfer, or as part of failed regulatory, stability, validation or
test batches manufactured during the applicable period, unless and to the extent that Patheon did not provide the Manufacturing Services in accordance with cGMPs or otherwise failed to perform in
accordance with the requirements of this Agreement. 

6

 

Quantity Converted:    The total amount of API contained in the Products produced with the Quantity Dispensed (including samples and any
additional Products produced in accordance with Section 6.2 or 9.2(b)) delivered by Patheon, and not rejected as deficient Product pursuant to Section 5.8 or 6.2. 

Within
60 days of the end of each Year, the Patheon Administrator shall calculate the "Actual Annual Yield" or
"AAY" for each Product at all Manufacturing Sites during the Year, which AAY is the percentage of the Quantity Dispensed that was converted to Products
and is calculated as follows: 

Quantity
Converted during the Year

Quantity Dispensed during the Year 

"Target Yield" shall mean the average yield, expressed as a percentage, of all batches of the same Product manufactured by Patheon in the previous Year,
provided that in no event shall the Target Yield be below [**]%. For the 12 months ended December 31, 2007, the Target Yield shall be
[**]%. 

"Yield Allowance" shall mean yield allowance factor to be applied in the Yield Allowance Scheme set forth in Schedule L, as mutually agreed to by
the parties each Year during the term of the Agreement with a maximum Yield Allowance of [**]%. 

	(b)
	API Yield Incentive Scheme.    The parties agree to calculate the value of the credit amount which may be owed to either
party under the API Yield Incentive Scheme within 60 days of the end of the Year to which such credit amount (if any) applies. The value of any credit amount determined under the API Yield
Incentive Scheme for any particular Year shall be summarized on the annual reconciliation report prepared in the form annexed hereto as Schedule K, and such credit amount shall be paid by the
owing party to the receiving party within 90 days of the end of the applicable Year.

	(c)
	Maximum Credit    Notwithstanding the foregoing provisions of this Section 2.3, Patheon's liability for API calculated
in accordance with the API Yield Incentive Scheme for any Product in a Year shall not exceed, in the aggregate, the Maximum Reimbursement Value set forth in Schedule D hereto.

	(d)
	No Material Breach.    For greater certainty, it shall not constitute a material breach of this Agreement by Patheon, for the
purposes of Section 7.2(a), if the Actual Annual Yield is less than the Target Yield. 

2.4   Agreement Administration.  

        The Patheon Administrator shall act as administrator of this Agreement on behalf of Patheon in order to simplify the management of the relationship between
Sepracor and Patheon. Such administration includes, without limitation, API yield matters pursuant to Section 2.3, price adjustments pursuant to Article 4, orders and forecasts pursuant
to Section 5.2 and invoicing pursuant to Section 5.6. 

2.5   Other Responsibilities.  

	(a)
	Approvals and Permits.    Patheon shall obtain and maintain all necessary regulatory approvals and permits related to its
manufacturing facilities and manufacturing of products at its facilities in order to perform its Manufacturing Responsibilities pursuant to this Agreement.

	(b)
	Records and Reports.    Patheon shall maintain copies of all records and report to Sepracor and applicable government
agencies as may be required by law and this Agreement.

	(c)
	Samples.    Patheon shall retain samples of each lot of Products tested for at least [**] beyond the
expiration date. For each lot shipped, Patheon shall prepare a Certificate of Analysis 

7

 

setting
forth the items tested, the Technical Information and test results and forward the Certificates of Analysis to Sepracor, or its designee, at the time the Products are shipped. 

	(d)
	Manufacture of Eszopiclone.    During the term of this Agreement, and for a period of [**]
thereafter, Patheon shall not perform commercial manufacturing activities or package, for itself or any third party, any product containing eszopiclone in any form as an active ingredient.

	(e)
	Patheon
agrees to obtain and maintain all necessary accreditations, certifications and licenses necessary to perform the Manufacturing Services in a New Jurisdiction, (including, but
not limited to, Japan, countries comprising the European Union and/or such other countries as may be agreed by the parties) upon Sepracor's reasonable request and all such costs or changes shall be
paid by Sepracor. 

ARTICLE 3  

SEPRACOR'S OBLIGATION  

3.1   Payment.  

        Pursuant to the terms of this Agreement, Sepracor shall pay the Patheon Administrator for the provision of the Manufacturing Services according to the fees
specified in Schedule B hereto (such fees being subject to adjustment in accordance with the terms hereof). 

3.2   API.  

        Sepracor shall, at its sole cost and expense, deliver the API to Patheon in sufficient quantities and at such times to facilitate the provision of the
Manufacturing Services by Patheon, which API shall be held by Patheon on behalf of Sepracor on the terms and subject to the conditions herein contained. Patheon shall keep all API segregated from
other materials within its control so as to maintain the integrity of the API, and shall not permit any API to be used or tested by any party not under its direct supervision and control, except as
directed by Sepracor. Within [**] days of receipt of API shipment, Patheon shall verify the quantity and identity of all API received by Patheon, and shall notify Sepracor of
any discrepancies in the quantity or identity of the API and/or the documents accompanying each shipment. If Patheon fails to notify Sepracor of a discrepancy within such [**]
day period, or if there is damage to the API that Patheon is unable to demonstrate (within the [**] day period) occurred prior to the delivery, or if the damage to the API is a
result of Patheon's negligence or wilful misconduct as demonstrated by Patheon's actions, inaction or failure to handle the API in accordance with the terms of this Agreement, then Patheon shall:
(i) return the API to Sepracor or dispose of the API at Sepracor's direction and (ii) in the case of Patheon's negligence or wilful misconduct, credit Sepracor in an amount equal to
Sepracor's then current API cost for the API that was lost, damaged or destroyed. Subject to the limitations set forth in Section 9.2(c) (Maximum Liability), and notwithstanding anything else
in this Agreement to the
contrary, Patheon shall assume responsibility and liability for and shall indemnify Sepracor against any loss or damage related to the API and/or the Components caused by Patheon's negligence or
wilful misconduct while under Patheon's custody and control. The parties acknowledge and agree that title to the API shall at all times belong to and remain the property of Sepracor. 

        Patheon
agrees that any API received by it shall only be used by it to provide the Manufacturing Services. 

8

 

  ARTICLE 4  

CONVERSION FEES AND COMPONENT COSTS  

4.1   Fees and Component Costs.  

        The fees for the Manufacturing Services (which fees include Component costs) listed in Schedule B are intended by the parties to be fixed for the first
Year of this Agreement, subject to the amendments to such fees provided for this Article 4. 

4.2   Adjustments to Current Year's Pricing.  

	(a)
	During
any Year of this Agreement, if at any time market conditions result in Patheon's cost of Components being materially different than normal forecasted prices, then the Patheon
Administrator or Sepracor may initiate a request for an adjustment to the fee for Manufacturing Services in respect of any affected Product as compensation for such increased or decreased Component
costs. For the purposes of this Section 4.2(a), changes materially different than normal forecasted increases shall be considered to have occurred if (i) the cost of a Component is more
than [**]% higher or lower than the cost for that Component upon which the fee quote was based or (ii) the aggregate cost for all Components required to manufacture a
Product increases or decreases more than [**]% of the total Component costs for such Product upon which the fee quote was based. To the extent that Manufacturing Services fees
have been previously adjusted pursuant to this Section 4.2(a) to reflect an increase or decrease in the cost of one or more Components, the adjustments provided for in (i) and
(ii) above shall operate based on the costs attributed to such Component (or Components) at the time the last of such adjustments were made.

	(b)
	In
connection with a fee adjustment request pursuant to this Section 4.2, the Patheon Administrator shall deliver to Sepracor a revised Schedule B and such budgetary
pricing information, adjusted Component costs or other documentation sufficient to demonstrate that a fee adjustment is justified, provided that the Patheon Administrator shall have no obligation to
provide the specific pricing of any supplier to the extent such pricing is subject to obligations of confidentiality between Patheon and such supplier. Upon delivery of such a request, each of
Sepracor and the Patheon Administrator shall forthwith use all reasonable efforts to agree on a revised fee for the Manufacturing Services in respect of each affected Product. 

4.3   Adjustment to Subsequent Year's Pricing.  

        The fees for the Manufacturing Services provided pursuant to the terms of this Agreement during any Year are outlined in Schedule B, which shall be updated
year to year to reflect the then current year's pricing, and shall also be determined in accordance with the following: 

	(a)
	Manufacturing Costs.    On or before November 1, 2007 and October 15 of each Year thereafter beginning in 2008,
Patheon (or Sepracor in the case of a decrease in Component costs) shall be entitled to request an adjustment to the fees: (i) for Manufacturing Services in respect of the Products to reflect
inflation, which adjustment shall be based on the increase in the U.S. Producer Price Index for Pharmaceutical preparation manufacturing published in August of the then current Year by the US
Department of Labor, Bureau of Labor statistics as Service ID PCU325412325412 compared to the same month of the preceding Year, unless the parties otherwise agree in writing; and (ii) for
Component costs in order to pass on the actual amount of any increase or decrease in such costs. In addition, in the event the Cost Improvement Program outlined in Section 4.6 below is
successful, the parties agree to meet in good faith to effectuate a fee adjustment based on the cost reductions achieved. 

9

 
	(b)
	Pricing Basis.    Sepracor acknowledges that the fee for Manufacturing Services in respect of a Product in any Year is quoted
based upon the Minimum Run Quantity per Product specified in Schedule B and subject to the terms of this Agreement, may be subject to change if the specified Minimum Run Quantity is not met.

	(c)
	Sepracor
shall place purchase orders with Patheon for product to be manufactured beginning in January 2008. Those purchase orders shall conform to the terms of this Agreement and
shall be for quantities of product (trade bottles and sample count blisters) based on a minimum percentage ("%") of net annual sales (for trade) and a minimum percentage (%) of samples distributed to
physicians. The minimum % and the price associated with that % will be as follows: 

Trade—Bottles  

	Description
 
	 	2007
	 	2008
	 	2009
	 	2010
	 	2011

	Sepracor's minimum commitment to order Product from Patheon expressed as a % of Sepracor's total Product tablets sold for that period as set out in Sepracor's audited financial documents for the USA market
only	 	[**]%	 	[**]%	 	[**]%	 	[**]%	 	[**]%
	

Estimated number of Tablets of Product to be manufactured by Patheon (000,000's) based on above % of Sepracor's total Product tablets sold for that period *	
 	

[**]	
 	

[**]	
 	

[**]	
 	

[**]	
 	

[**]
	

Patheon price of Product to Sepracor as a percentage of the 2007 baseline price calculated before annual adjustments for inflation and changes in the cost of components	
 	

[**]%	
 	

[**]%	
 	

[**]%	
 	

[**]%	
 	

[**]%

	*
	This
estimate is provided as of the Effective Date and reflects market conditions and sales history as of such date. 

	Physician Samples—Blisters
 
	 	2007
	 	2008
	 	2009
	 	2010
	 	2011

	Samples = the number of sample tablets, packaged in blisters, distributed to physicians' offices; USA only	 	 	 	 	 	 	 	 	 	 
	
Minimum Commitment (% of samples)	
 	

[**]	
 	

[**]	
 	

[**]	
 	

[**]	
 	

[**]
	
Tablets to be made by Patheon—Millions (estimated)**	
 	

[**]	
 	

[**]	
 	

[**]	
 	

[**]	
 	

[**]
	
Price Relative to 2007 Baseline Price which does not include annual adjustments to PPI and component costs in Years 2008 and beyond	
 	

[**]	
 	

[**]	
 	

[**]	
 	

[**]	
 	

[**]

	**
	This
estimate is provided as of the Effective Date and reflects market conditions and marketing strategy as of such date. 

10

 

        In
connection with a fee adjustment pursuant to clause (a) of this Section 4.3, the Patheon Administrator shall deliver to Sepracor a revised Schedule B and a
statement outlining the percentage increase in the U.S. Producer Price Index for Drugs and Pharmaceuticals upon which such fee adjustment is based. In connection with a fee adjustment request pursuant
to clause (b) of this Section 4.3, the Patheon Administrator shall deliver to Sepracor a revised Schedule B and such budgetary pricing information, adjusted Component costs or
other documentation sufficient to demonstrate that a fee adjustment is justified, provided that the Patheon Administrator shall have no obligation to provide the specific pricing of any supplier to
the extent such pricing is subject to obligations of confidentiality between Patheon and such supplier. Upon delivery of such a request, each of Sepracor and the Patheon Administrator shall forthwith
use all reasonable efforts to agree on a revised fee for the Manufacturing Services in respect of each affected Product. The parties agree that a request for a fee adjustment, as well as the
supporting documentation described above, shall be delivered by Patheon to Sepracor no later than [**] in the current Year for review and that any price adjustments agreed to
by the parties under this Section 4.3 shall become effective as of January 1st in the
following Year for all Product manufactured after such effective date. The parties agree that any Firm Order which is impacted by price adjustments under this Section 4.3 shall be revised
accordingly. For greater certainty, any adjustments agreed to by the parties under this Section 4.3 shall remain unchanged for a period of 12 months, unless additional adjustments are
permitted under this Agreement. 

        Notwithstanding
anything herein to the contrary, the Minimum Run Quantity or the Minimum Commitment outlined above (the "Annual Minimum Requirements") shall not apply in the event that:
(i) Patheon fails to supply and/or deliver conforming Products as required by this Agreement at any time for any reason; or (ii) there is a material change in the current market
conditions resulting from a change in law, a recall, an FDA ruling, generic entry or other event that would significantly impact Sepracor's ability to meet the Minimum Requirement. 

4.4   Adjustments Due to Technical Changes.  

        Amendments to Sepracor's Technical Information or any Quality Agreement requested by Sepracor will only be implemented following a technical and cost review by
Patheon and are subject to Sepracor and the Patheon reaching agreement as to revisions, if any, to the fees specified in Schedule B necessitated by any such amendment. If Sepracor accepts a
proposed fee change, the proposed change in Sepracor's Technical Information shall be implemented, and the fee change shall become effective only with respect to those orders of Products that are
manufactured in accordance with the revised Sepracor's Technical Information. In addition, Sepracor agrees to purchase, at Patheon's actual out-of-pocket cost, all Inventory
utilized under the "old" Sepracor Technical Information and purchased or maintained by Patheon in order to fill Firm Orders or in accordance with Section 5.3, to the extent that such Inventory
can no longer be utilized under the revised Sepracor Technical Information. Open purchase orders for Components no longer required under any revised Sepracor Technical Information that were placed by
Patheon with suppliers in order to fill Firm Orders or in accordance with Section 5.3 shall be cancelled where possible, and where such orders are not subject to cancellation without penalty,
shall be assigned to and satisfied by Sepracor. 

4.5   Multi-Country Packaging Requirements.  

        If and when Sepracor decides that it wishes to have Patheon manufacture the Product for a New Jurisdiction, then Sepracor shall inform the Patheon Administrator
of the packaging needs for each New Jurisdiction and the Patheon Administrator shall prepare a quotation for consideration by Sepracor of the additional Component costs, if any, and the change over
fees for the Product destined for such New Jurisdiction. The agreed additional packaging requirements and related packaging costs and change over fees shall be set out in a written amendment to this
Agreement. 

11

 

4.6   Cost Improvement Program.  

        Patheon and Sepracor agree to work together to develop cost reduction initiatives as part of an overall cost improvement program, provided such program does not
involve additional capital or extraordinary costs unless otherwise agreed to by parties in writing. All net cost savings (net of implementation costs) realized from the cost improvement program shall
be shared equally among the parties, unless otherwise agreed to by the parties in writing. A "cost reduction initiative" for the purpose of this Agreement shall be an initiative that reduces the
internal or out-of-pocket costs incurred by a party in connection with the performance of its obligations under this Agreement. It is further agreed by the parties that
on-going method improvements developed or adopted by either Sepracor or Patheon independently of the other party(ies), shall not be a cost reduction initiative under this
Section 4.6, and there shall be no obligation on such party to share the net cost savings realized from such improvement with the other party(ies) to this Agreement. 

ARTICLE 5  

ORDERS, DELIVERY, INVOICING, PAYMENT, PRODUCT DEFICIENCIES  

5.1   Market Outlook.  

        Sepracor acknowledges that for optimal production planning, Patheon requires an understanding of Sepracor's ordering and forecasting needs for the Products in the
market and agrees, to the extent that such information (including, if any, Sepracor's five-year market outlook studies) exists, to share such information with Patheon, provided that such
information may not be relied upon by Patheon for any purpose and further provided that any information so provided shall be subject to the confidentiality provisions of Article 10. 

5.2   Orders and Forecasts.  

        Sepracor shall provide Patheon with the following: 

	(a)
	concurrent
with the execution of this Agreement, a written non-binding twelve (12) month forecast of the volume of each Product that Sepracor then anticipates will
be required to be produced and delivered to Sepracor during that twelve (12) month period. Such forecast will be updated by Sepracor monthly on a rolling twelve (12) month basis and
updated forthwith upon Sepracor determining that the volumes contemplated in the most recent of such forecasts has changed by more than [**] per cent
([**]%).

	(b)
	on
or before the 20th day of each month, firm written orders ("Firm Orders") for the Products to be produced and
delivered to Sepracor on a date not less than 12 weeks from the date that the Firm Order is submitted. Such Firm Orders submitted to the Patheon Administrator shall specify Sepracor's purchase
order number, quantities by Product type, monthly delivery schedule and any other elements necessary to ensure the timely production and delivery of the Products. The quantities of Products ordered in
such written orders shall be firm and binding on Sepracor and Patheon and shall not be subject to reduction except as provided in section 5.3 below. Within [**] business
days, Patheon will provide formal confirmation of each Firm Order, acknowledging price, quantity and delivery date.

	(c)
	on
or before September 1 in each Year, a written non-binding three-year forecast (broken down by
quarters for the second and third years of the forecast) of the volume of each Product Sepracor then anticipates will be required to be produced and delivered to Sepracor during the
three-year period. 

12

 

5.3   Modification or Cancellation of Orders.  

        In the event that: (i) Patheon is unable to supply and/or deliver conforming Products equal to [**] percent
("[**]%") of Firm Order
quantities of Product in a given calendar quarter; or (ii) there is a material change in the current market conditions resulting from a change in law, a recall, an FDA ruling, generic entry or
other event that would significantly impact Sepracor's ability to purchase the Firm Order quantities of Products in a given calendar quarter; then any then existing Firm Orders and the Annual Minimum
Commitment may be modified by Sepracor as may be reasonably necessary to adequately address the changed circumstances contemplated by this paragraph. The parties shall work together diligently to
reestablish the predictability of the forecasting and ordering process as soon as possible thereafter. 

        In
addition, Sepracor may request a modification of the delivery date or quantity of Product in a Firm Order by submitting a written request to Patheon ("Change Order") at least thirty
(30) business days in advance of the scheduled start of manufacturing. Such Change Order shall be effective and binding against Patheon upon Patheon's receipt and approval, which approval shall
not be unreasonably withheld. Sepracor has the option of canceling any open balance of Product due on any Firm Order that is overdue by more than [**] days from the
acknowledgment date; provided, that such period shall be extended by a period equal to (i) any delays caused directly by Sepracor and (ii) any delays resulting from
good-faith quality investigations (provided, Patheon is diligently pursuing any such quality investigation). 

5.4   Advance Purchase of Components.  

        Sepracor understands that to ensure an orderly supply of such Components and to achieve economies of scale in the costs therefore, it may be desirable for Patheon
to purchase such Components in sufficient volumes to meet the production requirements for Products during part or all of the forecasted periods referred to in Section 5.2(a) or to meet the
production requirements of any longer period agreed to by the Patheon Administrator and Sepracor. Accordingly, Sepracor authorizes Patheon to purchase Components in order to satisfy the production
requirements for Products for the first six (6) months projected in the most recent forecast provided by Sepracor pursuant to Section 5.2(a), and agrees that Patheon may make such other
purchases of Components to meet production requirements during such longer periods as may be agreed to in writing from time to time by Sepracor at the request of the Patheon Administrator. If
Components ordered by Patheon pursuant to Firm Orders or this Section 5.3 are not included in finished Products purchased by Sepracor within six (6) months after the forecasted month in
respect of which such purchases have been made (or such longer period as the parties may agree), Sepracor shall pay Patheon the costs thereof and, in the event such Components are incorporated into
Products subsequently purchased by Sepracor, Sepracor will receive credit for any costs of such Components previously paid to the Patheon Administrator by Sepracor. 

5.5   Minimum Run Quantities.  

        Sepracor may only order Products in multiples of the Minimum Run Quantities set out in Schedule B. 

5.6   Shipments.  

        Shipments of Products to Sepracor shall be made EXW Patheon's shipping point. Such title as Patheon has in Products and risk of loss or of damage to Products
shall remain with Patheon until Products are delivered to the carrier by Patheon for shipment to Sepracor at the EXW point, at which time title and risk of loss or damage shall transfer to Sepracor.
Patheon shall, in accordance with Sepracor's instructions and as agent for Sepracor, (i) arrange for shipping and insurance, to be paid by 

13

 

Sepracor,
and (ii) at Sepracor's risk and expense, obtain any export licence or other official authorization and carry out all customs formalities necessary to export the Products. Sepracor may
select the freight carrier used by Patheon to ship Products and may monitor Patheon's shipping and freight practices as they pertain to this Agreement. Products shall be transported in accordance with
Sepracor's Technical Information. For greater certainty, Patheon shall assume the risk of loss and damage for any bulk Product while in transit between Patheon's Manufacturing Sites. In addition, any
additional shipping costs relative to shipping from Patheon's Toronto, Canada facility that are incurred as a result of Patheon subcontracting the services to any Patheon Affiliates will be borne by
Patheon. 

5.7   Invoices and Payment.  

        Except as otherwise provided in this Agreement, Patheon shall charge Sepracor for the Manufacturing Services only in respect of those Products that are shipped to
Sepracor and shall submit to Sepracor, with each shipment of Products, an invoice covering such shipment. The Patheon Administrator shall also provide Sepracor with an invoice covering any Inventory
or Components that are to be purchased by Sepracor pursuant to the terms of this Agreement. Each such invoice shall, to the extent applicable, identify Sepracor's purchase order number, Product
numbers, names and quantities, unit price and the total amount to be remitted by Sepracor. Except as agreed under section 5.8(a) below, Sepracor shall pay all such invoices within thirty
(30) days of the date thereof. 

5.8   Product Deficiencies.  

        (a)   Inspection.    Sepracor shall inspect the Products manufactured by Patheon upon receipt thereof and, within
[**] days, shall give the Patheon Administrator written notice of all claims for Products that deviate from Sepracor's Technical Information or cGMPs (a
"Deficiency Notice"). In the case of any defects not reasonably susceptible to discovery upon receipt of the Product, Sepracor shall give the Patheon
Administrator a Deficiency Notice within [**] days after discovery thereof by Sepracor, but in no event after the expiration date of the Product. Should Sepracor fail to
provide the Patheon Administrator with written notice of its acceptance or rejection of the delivery within [**] days of receipt of a delivery of Products, then delivery shall
be deemed to have been accepted by Sepracor on the [**] day after delivery. Except as set out in Section 6.2, Patheon shall have no liability for any deviations for
which the Patheon Administrator has not received notice within the applicable [**] day period. Sepracor shall not be obligated to pay for any Product which is the subject of a
Deficiency Notice until the issue has been resolved under Section 5.8(b). 

        (b)   Determination of Deficiency.    Upon receipt of a Deficiency Notice, Patheon shall undertake appropriate
testing of the Products and shall have [**] days to advise Sepracor by notice in writing that it disagrees with the contents of such Deficiency Notice. If Sepracor and the
Patheon Administrator fail to agree within [**] days after the Patheon Administrator's notice to Sepracor as to whether any Products identified in the Deficiency Notice deviate
from Sepracor's Technical Information or cGMPs, then the parties shall mutually select an independent laboratory to evaluate if the Products deviate from Sepracor's Technical Information or cGMPs (the
"Evaluation"). Such Evaluation shall be binding on the parties, and if the Evaluation certifies that any Products deviate from Sepracor's Technical Information or cGMPs, Sepracor may reject those
Products in the manner contemplated by Section 5.8(c) and Patheon shall pay the costs of the Evaluation. If the Evaluation does not so certify in respect of any such Products, then Sepracor
shall be deemed to have accepted delivery of such Products on the [**] day after delivery and Sepracor shall pay the costs of the Evaluation. 

        (c)   Product Rejection.    Subject to the provisions of Sections 5.8(a) and (b), and 9.2(b), Sepracor has the
right to reject and return, at Patheon's expense, any portion of any shipment of Products that deviates from Sepracor's Technical Information or cGMPs without invalidating any remainder of such
shipment. 

14

 
ARTICLE 6  

CO-OPERATION  

6.1   Quarterly Review.  

        Each of Sepracor and the Patheon Administrator shall forthwith upon execution of this Agreement appoint one of its employees to be a relationship manager
responsible for liaison between the parties. The relationship managers shall meet not less than quarterly to review the current status of the business relationship and manage any issues that have
arisen. 

6.2   Product Recalls and Returns.  

        (a)   Product Recalls.    Patheon and Sepracor shall each maintain records as may be necessary to permit a recall or
a field correction of any Products delivered to Sepracor or customers of Sepracor, effected voluntarily or under a threat of, or a directive by, any governmental agency. Each party shall give notice
within one Business Day by telephone (to be confirmed in writing) to the Director of Quality Control/Quality Assurance of the other party upon discovery that any Products should be recalled or
corrected, or may be required to be recalled or corrected, and each party upon receiving any such notice or upon any such discovery, shall cease and desist from further shipments of such Products in
its possession or control until a decision has been made whether a recall or some other corrective action is necessary. The decision to initiate a recall or to take some other corrective action, if
any, shall be made and implemented by Sepracor. Patheon will co-operate as reasonably required by Sepracor, having regard to all applicable laws and regulations. 

        (b)   Product Returns.    Sepracor shall have the responsibility for handling customer returns of the Products. The
Patheon Administrator and Patheon shall provide Sepracor with such assistance as Sepracor may reasonably need to handle such returns. 

        (c)   Patheon Responsibility.    To the extent that a recall or return results from, or arises out of, a failure by
Patheon to perform in accordance with this Agreement or to provide the Manufacturing Services in accordance with the Manufacturing Responsibilities, such recall or return shall be made at Patheon's
cost and expense, and Patheon shall use commercially reasonable efforts to replace the recalled or returned Products with new Products within [**] days from the date that
Sepracor definitively notifies Patheon about the recalled or returned Products, contingent upon the receipt or availability from Sepracor of all API. In the event that Patheon is unable to replace the
recalled Products within this [**]-day period (except where such inability results from a failure to receive the required API), then Patheon shall reimburse
Sepracor for the price that Sepracor paid to Patheon for manufacturing the affected Products. In all other circumstances, recalls, returns or other corrective actions shall be made at Sepracor's cost
and expense. 

6.3   Customer Questions and Complaints.  

        Sepracor shall have the sole responsibility for responding to questions and complaints from Sepracor's customers. Questions or complaints received by Patheon from
Sepracor's customers shall be promptly referred to Sepracor. The Patheon Administrator and Patheon shall co-operate as reasonably required to allow Sepracor to determine the cause of and
resolve any customer questions and complaints. Such co-operation shall include follow-up investigations, including testing. In addition, within [**]
days from the date of request, the Patheon Administrator shall provide Sepracor with all necessary information that will enable Sepracor to respond properly to questions or complaints relating to the
Products. Unless it is determined that the cause of any customer complaint resulted from a failure by Patheon to provide the Manufacturing Services in accordance with the Manufacturing
Responsibilities, all costs incurred in respect of this Section 6.3 shall be borne by Sepracor. 

15

 

6.4   Governmental Agencies.  

        Each party may communicate with any governmental agency, including but not limited to governmental agencies responsible for granting regulatory approval for the
Products, regarding such Products if in the opinion of that party's counsel, such communication is necessary to comply with the terms of this Agreement or the requirements of any law, governmental
order or regulation; provided, however, that unless in the reasonable opinion of its counsel there is a legal prohibition against doing so, such party shall permit the other party to accompany and
take part in any communications with the agency, and to receive copies of all such communications from the agency. In addition, Patheon agrees to update and maintain in good order its Annual
Registration of Drug Establishment and such other registrations, licenses or certifications required by the FDA to permit Patheon to perform its obligations under this Agreement and shall make such
licenses or other documents available to Sepracor or its designees for inspection upon request on reasonable notice, during regular business hours. Patheon will promptly notify Sepracor of any
communications from the FDA or other governmental regulatory authority, which may impact or change the manufacturing of the Products under this Agreement. Patheon shall also maintain one or more
facility master files as required and will provide to Sepracor, on request, a letter authorizing the FDA to access the Patheon drug master file for the Products. 

6.5   Records and Accounting by Patheon.  

        Patheon shall keep records of the manufacture, testing and shipping of the Products, and retain samples of such Products as are necessary to comply with this
Agreement and the manufacturing regulatory requirements applicable to Patheon, as well as to assist with resolving product complaints and other similar investigations. Copies of such records and
samples shall be retained for a period of five (5) years following the date of manufacture, or longer if required by law. Sepracor is responsible for retaining samples of the Products necessary
to comply with the legal/regulatory requirements applicable to Sepracor. Patheon shall also keep and maintain complete and accurate records and books of account in sufficient detail and form so as to
enable Patheon's costs and expenses for Components and Manufacturing Services to be determined, provided that Patheon shall have no obligation to provide the specific pricing of any supplier to the
extent that such pricing is subject to obligations of confidentiality between Patheon and such supplier. In addition to any other reporting requirements under this Agreement or otherwise, Patheon
shall provide a monthly report to Sepracor of all consigned Inventory for all Patheon Manufacturing Sites (the "Inventory Report") as follows: (i) Patheon shall provide the Inventory Report no
later than the [**] after the end of the month; (ii) Patheon shall ensure that all API and Components are listed on the Inventory Report; and (iii) Patheon shall
provide complete data related to the API and Components, including, but not limited to, Part #, Lot #, date received, unit of measure, status, location and quantity on hand. 

6.6   Inspection.  

        Sepracor may inspect the Patheon reports and records relating to this Agreement, including, but not limited to, records related to API received at any Patheon
location, during normal business hours and with reasonable advance notice, provided Patheon's representative is present during any such inspection. In addition the Patheon Administrator shall notify
Sepracor of any inspections by any governmental agency involving the Products and in all cases, shall allow governmental inspectors (such as inspectors from FDA) acting pursuant to statutory authority
to inspect the Manufacturing Sites in connection with the manufacture of the Products and to review required documentation. 

16

 

  6.7   Access.  

        Patheon shall provide Sepracor with reasonable access at mutually agreeable times to any of its facilities in which the Products are manufactured, stored, handled
or shipped in order to permit Sepracor's verification of Patheon' compliance with the terms of this Agreement and with all applicable laws and regulations, and for the purpose of reviewing the
equipment, manufacturing process, testing of the Products and batch, or to conduct an inventory of the API, in whatever form, at all Patheon facilities. For greater certainty, the right of access
provided in this Section 6.7 shall not include a right to access to inspect the financial records of Patheon or the Patheon Administrator. 

6.8   Reports.  

        The Patheon Administrator will supply on an annual basis all product data, including release test results, complaint test results, all investigations (in
manufacturing, testing and storage), and the like, that Sepracor reasonably requires in order to complete any filing under any applicable regulatory requirements. At Sepracor's request and subject to
an additional fee to be agreed by the parties, the Patheon Administrator may prepare annual product review reports on behalf of Sepracor and in accordance with Sepracor's instructions. 

6.9   FDA Filings  

        (a)   FDA Filings.    Sepracor shall have the sole responsibility for filing all documents with the FDA and taking
any other actions that may be required for the receipt of FDA Approval for the commercial manufacture of all of the Products. The Patheon Administrator shall assist Sepracor, to the extent consistent
with Patheon's obligations under this Agreement, to obtain FDA Approval for the commercial manufacture of all Products as quickly as reasonably possible. 

        (b)   Verification of Data.    Sepracor shall make reasonable efforts to provide the Patheon Administrator with a
copy of those documents, or portions of documents, to be filed with the FDA that incorporate data generated by Patheon prior to filing so as to give Patheon the opportunity to verify the accuracy and
regulatory validity of Patheon generated data contained therein and, in any event, shall provide copies of such documents promptly after filing. 

        (c)   Deficiencies.    If in Patheon's sole discretion, acting reasonably, Patheon determines that there are material
inaccuracies or deficiencies in the information provided by Sepracor in accordance with paragraph (b) above (the "Deficiencies"), the Patheon Administrator shall notify Sepracor in writing of
such Deficiencies. 

        (d)   Sepracor Responsibility.    For clarity, the parties agree that in reviewing the documents referred to in
paragraph (b) above, Patheon's role will be limited to verifying the accuracy of the description of the work undertaken or to be undertaken by Patheon. As such, Patheon shall not assume any
responsibility for the accuracy of the New Drug Application ("NDA") or the Abbreviated New Drug Application ("ANDA"), as the case may be. The sole responsibility of the preparation and filing of the
NDA shall be borne by Sepracor. 

ARTICLE 7  

TERMS AND TERMINATION  

7.1   Term.  

        Subject to Section 7.2, this Agreement shall continue until December 31, 2011 (the "Initial Term"), unless terminated earlier by one of the parties
as provided in this Agreement. The Initial Term of this Agreement and each subsequent term may be extended for additional two (2) year terms by mutual 

17

 

agreement
of the Parties provided that the Parties agree to such extension in writing no later than eighteen (18) months prior to the end of the then current term. 

7.2   Early Termination  

        (a)   Either
Party may terminate this Agreement upon written notice to the other party in circumstances where such other party has failed to remedy a material breach of any of
its representations, warranties or other obligations under this Agreement within sixty (60) days following receipt of a written notice (the "Remediation
Period") of said breach that expressly states that it is a notice under this Section 7.2(a) (a "Breach Notice"). The
non-defaulting party's right to terminate this Agreement pursuant to this Section 7.2(a) may only be exercised for a period of sixty (60) days following the expiry of the
Remediation Period (in circumstances where the breach has not been remedied) and if the termination right is not exercised during this period then the non-defaulting party shall be deemed
to have waived the breach of the representation, warranty or obligation described in the Breach Notice. 

        (b)   Either
Party may immediately terminate this Agreement upon written notice, but without the necessity of prior advance notice, to the other party in the event that
(i) any other party to this Agreement is declared insolvent or bankrupt by a court of competent jurisdiction; (ii) a voluntary petition of bankruptcy is filed in any court of competent
jurisdiction by any other party to this Agreement; or (iii) this Agreement is assigned by any other party to this Agreement for the benefit of creditors. 

        (c)   Sepracor
may terminate this Agreement as to any Product upon thirty (30) days' written notice to Patheon in the event that any governmental agency takes any
action, or raises any objection, that prevents Sepracor from importing, exporting, purchasing or selling such Product, or otherwise has a material impact on Sepracor's ability to import, export,
purchase or sell such Product. 

        (d)   Patheon
may terminate this Agreement on six (6) months' prior written notice if Sepracor assigns pursuant to Section 12.7 any of its rights under this
Agreement to an assignee that, in the opinion of Patheon acting reasonably, is (i) not a credit worthy substitute for Sepracor, or (ii) a competitor of Patheon in the contract
manufacturing business provided that such competitive party's business is primarily related to contracting manufacturing. 

        (e)   After
January 1, 2009, either party may terminate this Agreement upon six (6) months' prior written notice in the event of a material change in such
party's business or operations, financial status, or such other change that would significantly impact such party's ability to continue to perform under this Agreement. 

7.3   Obligation on Termination.  

        If this Agreement expires or is terminated in whole or in part for any reason, then: 

	(a)
	Patheon
shall immediately begin, in good faith, to mitigate all termination expenses;

	(b)
	Sepracor
shall take delivery of and pay for all undelivered Products that are manufactured and/or packaged pursuant to a Firm Order, at the price in effect at the time the Firm Order
was placed;

	(c)
	Sepracor
shall purchase, at Patheon's cost, the Inventory applicable to the Products which was purchased, produced or maintained by Patheon in contemplation of filling Firm Orders or
in accordance with Section 5.4 prior to notice of termination being given;

	(d)
	Sepracor
shall satisfy the purchase price payable pursuant to Patheon's orders with suppliers of Components, provided such orders were made by Patheon in reliance on Firm Orders or in
accordance with Section 5.4; and 

18

 
	(e)
	Patheon
shall return to Sepracor all unused API (with shipping and related expenses, if any, to be borne by Sepracor). 

Any
termination or expiration of this Agreement shall not affect any outstanding obligations or payments due hereunder prior to such termination or expiration, nor shall it prejudice any other
remedies that the parties may have under this Agreement. For greater certainty, termination of this Agreement for any reason shall not affect the obligations and responsibilities of the parties
pursuant to Article 9, 10, 11, Sections 12.1, 12.2, 12.3, 12.4 and 12.16 all of which shall survive any termination. 

ARTICLE 8  

REPRESENTATIONS, WARRANTIES AND COVENANTS  

8.1   Authority.  

        Each party represents and warrants that it has the full right and authority to enter into this Agreement, and that it is not aware of any impediment that would
inhibit its ability to perform its obligations hereunder. 

8.2   Non-Infringement.  

	(a)
	Sepracor  

        Sepracor represents and warrants that, to the best of Sepracor's knowledge: 

	(i)
	Sepracor's
Technical Information for each of the Products is its or its Affiliate's property and that Sepracor may lawfully disclose Sepracor's Technical Information to Patheon;

	(ii)
	any
Intellectual Property provided to Patheon by Sepracor for use by Patheon in connection with the provision of the Manufacturing Services according to Sepracor's Technical
Information (i) is Sepracor's or its Affiliate's unencumbered property, (ii) may be lawfully used as directed by Sepracor, and (iii) such use does not infringe and will not
infringe any Third Party Rights;

	(iii)
	the
provision of the Manufacturing Services by Patheon in respect of any Product pursuant to this Agreement or use or other disposition of any Product by Patheon as may be required
to perform its obligations under this Agreement does not and will not infringe any Third Party Rights;

	(iv)
	there
are no actions or other legal proceedings, the subject of which is the infringement of Third Party Rights related to any of Sepracor's Technical Information, or any of the API
and the Components, or the sale, use or other disposition of any Product made in accordance with Sepracor's Technical Information;

	(v)
	Sepracor's
Technical Information for all Products conforms to all applicable cGMPs, laws and regulations; and

	(vi)
	the
Products, if approved for marketing by the applicable drug regulatory authorities and labelled and manufactured in accordance with Sepracor's Technical Information and in
compliance with applicable cGMPs, laws and regulations may be lawfully sold and distributed in every jurisdiction in which Sepracor markets such Products.

	(b)
	Patheon Manufacturing Services  

        Patheon represents and warrants that, to the best of its knowledge, the manufacturing processes used by it, and which are not specified by Sepracor, for
manufacturing Product do not infringe any Third Party Rights, provided, however that Patheon does not warrant against infringement attributable to an element of the Specifications, the API or
Components specified by Sepracor, or an element of the Product specified by Sepracor, or the combination of the API, Components or Product with Patheon' manufacturing process. 

19

 

8.3   Debarred Persons.  

        Patheon covenants that in the performance of its obligations under this Agreement it will not use the services of any person debarred or suspended under 21 U.S.C.
§335(a) or (b). Patheon represents and warrants that it does not currently employ or retain, and covenants that it will not hire, as an officer or an employee, any person who has been
convicted of a felony under the laws of the United States for conduct relating to the regulation of any drug product under the United States Food, Drug and Cosmetic
Act.

8.4   Permits.  

        Sepracor shall be solely responsible for obtaining or maintaining any permits or other regulatory approvals in respect of the Products or Sepracor's Technical
Information, including, without limitation, all marketing and post-marketing approvals. 

8.5   Compliance with Laws.  

        Each party, in connection with its performance under this Agreement, shall comply with all applicable laws, rules, regulations, orders and guidelines. 

8.6   Patheon Warranty.  

        Patheon warrants and represents to Sepracor that the Product: (i) has been manufactured in accordance with GMP and other applicable FDA laws and
regulations, and all other federal, state and local laws, rules and regulations applicable in Canada and the Territory in connection with the Manufacturing Services provided under this Agreement;
(ii) will satisfy Sepracor's Technical Information and be free of defects in material and workmanship provided, however, that Patheon will not be responsible for any failure of the Product to
meet the specifications that is due to the failure of raw material supplied by Sepracor to meet the raw material's applicable specifications; (iii) will not be adulterated or misbranded within
the meaning of the Federal Food, Drug, and Cosmetic Act provided, however, that Patheon will not be responsible for misbranding that is due to any label, instructions or package insert text provided
to Patheon by Sepracor; and (iv) will be conveyed to Sepracor with good title and free of all lawful security interests, liens, or encumbrances. Patheon further warrants that Patheon's
manufacturing and storage facilities shall comply with all applicable laws, rules and regulations. In addition, in the event any Patheon Manufacturing Site is unable to perform under this Agreement
for any reason, Patheon represents and warrants that it will employ all commercially reasonable efforts to make another Patheon Manufacturing Site available to perform the Manufacturing Services as
required by this Agreement. 

ARTICLE 9  

REMEDIES AND INDEMNITIES  

9.1   Consequential Damages  

        No party shall be liable to any other party to this Agreement in contract, tort, negligence, breach of statutory duty or otherwise for any (direct or indirect)
loss of profits, of production, of anticipated savings, of business or goodwill or for any liability, damage, costs or expense of any kind incurred by the other party of an indirect or consequential
nature. 

9.2   Limitation of Liability  

        (a)   API.    Patheon's liability for any loss or damage to the API shall be as set forth in Section 3.2
hereof. 

20

 

        (b)   Products.    Except in circumstances where Patheon has failed to provide the Manufacturing Services in
accordance with the Manufacturing Responsibilities or otherwise failed to perform in accordance with this Agreement, Patheon shall not be liable nor have any responsibility for any deficiencies in, or
other liabilities associated with, any Product manufactured by it, including, without limitation, any deficiencies with respect to Sepracor's Technical Information, the safety, efficacy or
marketability of the Products or any distribution risk. Except as set out in Section 6.2(c), if Patheon has failed to provide the Manufacturing Services in accordance with the Manufacturing
Responsibilities, then Sepracor shall have no obligation to pay for such Products. At Sepracor's option, Patheon shall, at its sole cost and expense, manufacture additional Products to replace such
deficient Products, provided that Sepracor shall supply Patheon with the additional API that is needed to manufacture the Products. Patheon's cost for such API shall be determined in accordance with
Section 2.3. 

        (c)   Maximum Liability.    The maximum liability of Patheon in the aggregate under this Agreement for any reason
whatsoever, including, without limitation, any liability arising under Section 3.2, Article 6 or resulting from a breach of representations, warranties or other obligations under this
Agreement shall not exceed in any Year the lesser of (i) the amount equal to fifty percent (50%) of that Year's revenue paid by Sepracor to Patheon and (ii) $7,500,000; provided,
however, that this limitation shall not apply with respect to third party claims. 

9.3   Patheon Indemnification  

        Subject to Sections 9.1 and 9.2, Patheon agrees to defend, indemnify and hold Sepracor, its officers, employees and agents harmless against any and all
losses, damages, costs, claims, demands, judgments and liability to, from and in favour of third parties (other than Affiliates) resulting from, or relating to any of the following: (i) any
claim of personal injury or property damage to the extent that such injury or damage is the result of a failure by Patheon to provide the Manufacturing Services in accordance with the Manufacturing
Responsibilities or any breach of the Agreement by Patheon including, without limitation, any representation or warranty contained herein, (ii) any claim that the manufacturing processes used
by Patheon, and which are not specified by Sepracor, for manufacturing Product infringe any Third Party Rights, provided, however that Patheon shall not be liable for any claim of infringement
attributable to an element of the Specifications, the API or Components specified by Sepracor, or an element of the Product specified by Sepracor, or the combination of the API, Components or Product
with Patheon's manufacturing process, or (iii) any claim that the Components, other than the Components specified by Sepracor or supplied by Sepracor suppliers, infringe any Third Party Rights,
except to the extent that any such losses, damages, costs, claims, demands, judgments and liability are due to the negligence or wrongful act(s) of Sepracor, its officers, employees or agents or
Affiliates or for which Sepracor is obligated to indemnify Patheon pursuant to Section 9.4. Sepracor shall promptly notify Patheon of any such claim, shall use commercially reasonable efforts
to mitigate the effects of such claim, shall reasonably cooperate with Patheon in the defence of such claim and shall permit Patheon to control the defence and settlement of such claim, all at
Patheon's cost and expense. 

9.4   Sepracor Indemnification  

        Subject to Sections 9.1 and 9.2, Sepracor agrees to defend, indemnify and hold each of Patheon, its officers, employees and agents harmless against any and
all losses, damages, costs, claims, demands, judgments and liability to, from and in favour of third parties (other than Affiliates) resulting from, or relating to any of the following: (i) any
claim of infringement or alleged infringement, of any Third Party Rights in respect of the Products or the API, or (ii) any claim of personal injury or property damage arising from the design,
manufacture, distribution, sale or use of the Products except to the extent that any such losses, damages, costs, claims, demands, judgments and liability are due to the negligence or wrongful act(s)
of Patheon, its officers, employees or agents or for which Patheon is 

21

 

required
to indemnify Sepracor pursuant to Section 9.3. Patheon shall promptly notify Sepracor of any such claims, shall use commercially reasonable efforts to mitigate the effects of such
claim, shall reasonably cooperate with Sepracor in the defence of such claims and shall permit Sepracor to control the defence and settlement of such claims, all at Sepracor's cost and expense. 

9.5   Reasonable Allocation of Risk  

        The parties acknowledge and agree that the provisions of this Agreement (including, without limitation, this Article 9) are reasonable and create a
reasonable allocation of risk having regard to the relative profits the parties respectively expect to derive from the Products, and that Patheon, in their fees for the provision of the Manufacturing
Services, has not accepted a greater degree of the risks arising from the manufacture, distribution and use of the Products, based on the fact that Sepracor has developed and holds the marketing
approval for the Products and requires Patheon to manufacture and label the Products strictly in accordance with Sepracor's Technical Information, and that Sepracor and not Patheon is in a position to
inform and advise potential users of the Products as to the circumstances and manner of use of the Products. 

ARTICLE 10  

CONFIDENTIALITY  

        10.1    Disclosure.    During and in furtherance of this Agreement,
each of the parties hereto may disclose certain of its Confidential Information to the other parties. 

        10.2    Use of Information.    During the Initial Term and any
renewals of this Agreement, and for a period of five (5) years from the termination of this Agreement, each of the parties hereto agrees (i) to use the
Confidential Information only in connection with the terms and purpose of this Agreement; (ii) to treat the Confidential Information as it would its own proprietary information; and
(iii) to take all reasonable precautions to prevent the disclosure of the Confidential Information to any third party, other than an Affiliate, without the prior written consent of the other
parties. 

        10.3    Exceptions.    Each of parties shall be relieved of any and
all of the obligations under Section 10.2 regarding Confidential Information which (i) was known by the recipient prior to receipt hereunder; (ii) at the time of disclosure, was
generally available to the public, or which after disclosure hereunder becomes generally available to the public through no fault attributable to a party hereto; or (iii) is hereafter made
available for use or disclosure from any third party having a right to do so. 

        10.4    Presumption of Confidentiality.    Subject to
Section 10.3, the obligations set forth in this Section 10 shall apply to all information disclosed under this Agreement that is treated by the disclosing party as confidential or
proprietary. 

ARTICLE 11  

DISPUTE RESOLUTION  

11.1     Commercial Disputes.

        In
the event of any dispute arising out of or in connection with this Agreement (other than a dispute determined in accordance with Section 5.8(b) or a Technical Dispute), the
parties shall first try to solve it amicably. In this regard, any party may send a notice of dispute to the other, and each party shall appoint, within [**] Business Days from
receipt of such notice of dispute, a single representative having full power and authority to solve the dispute. The representatives so designated shall meet as necessary in order to solve such
dispute. If these representatives fail to solve the matter within one (1) month from their appointment, or if a party fails to appoint a representative within the [**]
Business Day period set forth above, such dispute shall immediately be referred to the Chief Operating 

22

 

Officer
or Executive Vice President, Operations (or such other officer as they may designate) of each party who will meet and discuss as necessary in order to try to solve the dispute amicably. Should
the parties fail to reach a resolution under this Section 11.1, their dispute will be referred to a court of competent jurisdiction. 

11.2     Technical Dispute Resolution.

        In
the event of a dispute (other than disputes in relation to the matters set out in Sections 5.8(b) and 11.1) between the parties that is exclusively related to technical aspects
of the manufacturing, packaging, labelling, quality control testing, handling, storage or other activities under this Agreement (a "Technical Dispute"),
the parties shall make all reasonable efforts to resolve the dispute by amicable negotiations. In this regard, senior representatives of each party shall, as soon as practicable and in any event no
later than [**] Business Days after a written request from either party to the other, meet in good faith to resolve any Technical Dispute. If, despite such meeting, the parties
are unable to resolve a Technical Dispute within a reasonable time, and in any event within [**] Business Days of such written request, the Technical Dispute shall, at the
request of either party, be referred for determination to an expert in accordance with the provisions of Schedule F. In the event that the parties cannot agree whether a dispute is a Technical
Dispute, Section 11.1 shall prevail. For greater certainty, the parties agree that the release of the Products for sale or distribution pursuant to the applicable marketing approval for such
Products shall not by itself indicate compliance by Patheon with its obligations in respect of the Manufacturing Services and further that nothing in this Agreement (including Schedule F) other
than the Technical Dispute Resolution provisions of this paragraph 11.2 shall remove or limit the authority of the parties' relevant qualified persons for Product Release (as specified by the
Quality Agreement) to determine whether the Products are to be released for sale or distribution. 

ARTICLE 12  

MISCELLANEOUS  

12.1     Inventions.

(a)   Sepracor Inventions  

        Patheon agrees that all inventions, data, works, discoveries, designs, technology and improvements, (whether or not protectable by a patent or a copyright), made,
reduced to practice, created, written, designed or developed, authored or made by Patheon, alone or in combination with others, in the
course of the performance of services under this Agreement, or thereafter if resulting or directly or indirectly derived from Sepracor's proprietary information ("Sepracor Inventions"), shall be the
sole and exclusive property of Sepracor. Sepracor Inventions shall be promptly reported to Sepracor but otherwise maintained in confidence by Patheon. All Sepracor Inventions shall be deemed "works
made for hire" to the extent permitted by the copyright law. 

(i)    Patheon
hereby assigns, and ensures that its employees, agents and consultants, as applicable, shall assign, to Sepracor all Inventions and any and all related patents, copyrights,
trademarks, trade names, and other industrial and intellectual property rights and applications therefor, in the United States and elsewhere, and appoints any officer of Sepracor as its duly
authorized agent to execute, file, prosecute and protect the same before any government agency, court or authority; such appointment only to be exercised after providing to Patheon reasonable notice
and opportunity to execute such documents directly. 

(ii)    Patheon
agrees to cooperate fully with Sepracor and its nominees to obtain patents or register copyrights in any and all countries for these Inventions, and to execute all papers for 

23

 

use
in applying for and obtaining such protection thereon as Sepracor may desire, together with assignments thereof to confirm Sepracor's ownership thereof, all at Sepracor's expense. 

(b)   Patheon Inventions  

        All inventions, data, works, discoveries, designs, technology and improvements, (whether or not protectable by a patent or a copyright) that are conceived, made,
reduced to practice, created, written, designed or developed, authored or made by Patheon, and which are not specific to, or dependant upon, Products or Sepracor Inventions and which have application
to manufacturing processes or formulation development of drug products or drug delivery systems shall be the exclusive property of Patheon (the "Patheon Inventions"). Patheon hereby grants to Sepracor
a non-exclusive, paid-up, royalty-free, transferable license of such Patheon Inventions which Sepracor may use for the manufacture, sale and offer for sale of the
Products; 

        (i)    Sepracor
hereby assigns, and ensures that its employees, agents and consultants, as applicable, shall assign, to Patheon all Patheon Inventions and any and all related
patents, copyrights, trademarks, trade names, and other industrial and intellectual property rights and applications therefor, in the United States and elsewhere, and appoints any officer of Patheon
as its duly authorized agent to execute, file, prosecute and protect the same before any government agency, court or authority; such appointment only to be exercised after providing to Sepracor
reasonable notice and opportunity to execute such documents directly. 

        (ii)   Sepracor
agrees to cooperate fully with Patheon and its nominees to obtain patents or register copyrights in any and all countries for the Patheon Inventions, and to
execute all papers for use in applying for and obtaining such protection thereon as Patheon may desire, together with assignments thereof to confirm Patheon's ownership thereof, all at Patheon's
expense. 

12.2     Patent Matters.

        (a)   Sepracor
will, at Sepracor's expense, have sole responsibility for, in its sole discretion, preparation, filing, prosecution and maintenance of patents and patent
applications relating to Sepracor Inventions as described in Section 12.1(a) above and Patheon agrees to provide reasonable assistance to and cooperate fully with Sepracor or its
representatives to facilitate preparation, filing, prosecution, and maintenance of any such patents or patent applications. 

24

 

  
        (b)   Patheon will, at Patheon's expense, have the sole responsibility for preparation, filing, prosecution, and maintenance of patents and patent applications relating to
subject matter described in Section 12.1(b) above. Patheon agrees that any such preparation, filing, prosecution and maintenance will be conducted diligently and that, for patents pertaining to
Technology licensed to Sepracor hereunder, Sepracor will be kept fully and promptly informed of the progress thereof. In the event Patheon elects to discontinue prosecution or maintenance of any
patent application or patent described in this Section 12, or part thereof, Sepracor may assume the prosecution or maintenance of any such patent application or patent at its own expense, and
Patheon shall assign to Sepracor all right, title and interest in and to any such patent application or patent. 

        (c)   If,
during the term of this Agreement, either Party learns of any infringement or threatened infringement by a third party of the patents comprising Patent Rights, such
Party will promptly notify the other Party and will provide such other Party with any available evidence of such infringement. 

12.3     Intellectual Property.  

        Any intellectual property developed by either Patheon or Sepracor prior to the Effective Date and any rights relating to such intellectual property will remain
the property of the respective party, who shall at all time retain the sole control and use of such intellectual property and the applicable rights. Sepracor, on the one hand, and Patheon and the
Patheon Administrator, on the other hand, hereby acknowledge that neither party has, nor shall it acquire, any interest in any of the other party's Intellectual Property unless otherwise expressly
agreed to in writing. Nothing perlegalrecited herein shall be construed as granting any right or license in any intellectual property owned or licensed to Sepracor, except to the extent necessary for
Patheon to carry out Manufacturing Services for Sepracor hereunder; this limited grant is immediately revocable at Sepracor's sole discretion. 

12.4     Insurance.  

        Each party shall maintain commercial general liability insurance, which insurance shall afford limits of not less than $5,000,000 for each occurrence for personal
injury liability, products liability and property damage liability that may arise from this Agreement or otherwise. If requested each party will provide the other with a certificate of insurance
evidencing the above and showing the name of the issuing
company, the policy number, the effective date, the expiration date and the limits of liability. The insurance certificate shall further provide for a minimum of thirty (30) days' written
notice to the insured of a cancellation of, or material change in, the insurance. 

12.5     Independent Contractors.  

        The parties are independent contractors and this Agreement shall not be construed to create between any Patheon and Sepracor any other relationship such as, by
way of example only, that of employer-employee, principal agent, joint-venturer, co-partners or any similar relationship, the existence of which is expressly denied by the parties hereto. 

12.6     No Waiver.  

        Any party's failure to require another party to comply with any provision of this Agreement shall not be deemed a waiver of such provision of any other provision
of this Agreement. 

12.7     Assignment.  

        (a)   Patheon
may not assign this Agreement or any of its rights or obligations hereunder except with the written consent of Sepracor, such consent not to be unreasonably
withheld. For greater certainty, Patheon may arrange for subcontractors to perform specific services arising under this Agreement provided that Patheon will remain responsible to Sepracor under this
Agreement; 

25

 

        (b)   Subject
to Section 7.2(d), Sepracor may assign this Agreement or any of its rights or obligations hereunder without approval from Patheon; provided, however, that
Sepracor shall give prior written notice of any assignment to Patheon, any assignee shall covenant in writing with Patheon to be bound by the terms of this Agreement and Sepracor shall remain liable
hereunder; 

        (c)   Notwithstanding
the foregoing provisions of this Section 12.7, any party may assign this Agreement to any of its Affiliates or to a successor to or purchaser of
all or substantially all of its business, provided that such assignee executes an agreement with the non-assigning party hereto whereby it agrees to be bound hereunder. 

12.8     Force Majeure.  

        Subject to the terms of this Agreement, no party shall be liable for the failure to perform its obligations under this Agreement if such failure is occasioned by
a cause or contingency beyond such party's reasonable control, including, but not limited to, strikes or other labour disturbances, lockouts, riots, wars, acts of terrorism, fires, floods, storms,
interruption of or delay in transportation, defective equipment (due to manufacturer defect), or compliance with any order or regulation of any government entity acting within colour of right. A party
claiming a right to be excused from performance under this Section 12.8 shall immediately notify the other parties in writing of the extent of its inability to perform, which notice shall
specify the occurrence beyond its reasonable control that prevents such performance, and shall use reasonable efforts to minimize any delays caused by such occurrence, and if warranted to make best
commercial efforts to transfer production to an alternate validated Patheon site. 

12.9     Additional Product.  

        Additional products may be added to this Agreement and such additional products shall be governed by the general conditions hereof with any special terms
(including, without limitation, price) governed by an addendum hereto. 

12.10      Notices.  

        Any notice, approval, instruction or other written communication required or permitted hereunder shall be sufficient if made or given to the other parties by
personal delivery, by telecopier or facsimile 

26

 

communication
or by sending the same by first class mail, postage prepaid to the mailing address, or telecopier or facsimile number set forth below: 

	If to Sepracor:
	

Sepracor Inc.

84 Waterford Drive

Marlborough, Massachusetts 01752

U.S.A.
	

Attention: President

Telecopier No.: 508-357-7889
	

With a copy to:	
 	

General Counsel, Sepracor Inc.

Same address as Sepracor

Telecopier No.: 508-357-7511
	

If to Patheon:
	

c/o Patheon Inc.

Corporate Office

7070 Mississauga Road, Suite 350

Mississauga, Ontario

Canada L5N 7J8.
	

Attention: President

Telecopier No.: (905) 812-6705
	

With a copy to:	
 	

General Counsel, Patheon Inc.

Same address as Patheon

Telecopier No.: (905) 812-6613

or
to such other addresses or telecopier or facsimile numbers provided to the other party in accordance with the terms of this Section 12.10. Notices or written communications made or given by
personal delivery or by telecopier or facsimile shall be deemed to have been sufficiently made or given when sent (receipt acknowledged), or if mailed, five days after being deposited in the United
States or Canadian mail, postage prepaid or upon receipt, whichever is sooner. 

12.11  Severability.  

        If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such determination
shall not impair or affect the validity, legality or enforceability of the remaining provisions hereof, and each provision is hereby declared to be separate, severable and distinct. 

12.12  Entire Agreement.  

        This Agreement, together with the Quality Agreements (incorporated herein by reference), constitutes the full, complete, final and integrated agreement among the
parties hereto relating to the subject matter hereof and supersedes all previous written or oral negotiations, commitments, agreements, transactions or understandings with respect to the subject
matter hereof, including the Original Agreement except as otherwise stated in Section 12.13. Any modification, amendment or supplement to this Agreement must be in writing and signed by
authorized representatives of all parties. In case of conflict, the prevailing order of documents shall be this Agreement and the Quality Agreement. For the avoidance of doubt, this Agreement does not
supersede that certain Master 

27

 

Agreement
for Development and Manufacturing of Non-Commercial Products, executed by the parties and dated February 12, 2007 which remains in full force and effect in accordance with
its terms. 

12.13  Original Agreement.  

        Notwithstanding the provisions of Section 12.12, the Original Agreement shall apply in respect of the obligations of the parties thereto prior to the
Effective Date. 

12.14  No Third Party Benefit or Right.  

        For greater certainty, nothing in this Agreement shall confer or be construed as conferring on any third party any benefit or the right to enforce any express or
implied term of this Agreement. 

12.15  Execution of Counterparts.  

        This Agreement may be executed in counterparts, by original or facsimile signature, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. 

12.16  Governing Law.  

        This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, United States of America and jurisdiction shall be vested in
the United States District Court for the District of Delaware. The parties expressly agree that the UN Convention on Contracts for the International Sale of Goods shall not apply to this Agreement. 

12.17  Capital Requirements.  

        Certain capital requirements and the obligations of the parties in respect thereof are set out in Schedule J. 

        IN
WITNESS WHEREOF, the duly authorized representatives of the parties have executed this Agreement as of the date first written above. 

	PATHEON INC.	 	 	 
	

by	

/s/ Clive V. Bennett
	
 	

 	

 
	

by	

President, Patheon D.S.
	
 	

 	

 
	
PATHEON PHARMACEUTICALS INC.	
 	

MOVA PHARMACEUTICAL CORPORATION
	

by	

/s/ Clive V. Bennett
	
 	

by	

/s/ Nick DiPietro

	

by	

President, Patheon D.S.
	
 	

by	

Director

	
SEPRACOR, INC.	
 	

 	

 
	

by	

/s/ Stephen A. Wald
	
 	

 	

 
	by	Senior Vice President,

Technical Operations
	 	 	 

28

 

  SCHEDULE A  

 PRODUCT SPECIFICATIONS  

        Copies of the finished Product specifications, packaging specifications and shipping requirements for each product are attached hereto, which specifications are
current as of the Effective Date and are subject to change in accordance with the terms of this Agreement. 

Purchase Specifications for Lunesta® (eszopiclone)

1.0 mg, 2.0 mg and 3.0 mg Tablets

(Sepracor Material Ids: 400621, 400650 and 400651 respectively)  

	Attribute
	 	Purchase Specifications

	 	 [**]	 	[**]
	 	 [**]	 	[**]
	 	 [**]	 	[**]
	 	 [**]	 	[**]
	 	 [**]	 	[**]
	 	 	[**]
	 	 [**]	 	[**]
	 	 [**]	 	[**]
	 	 [**]	 	[**]
	 	 [**]	 	[**]
	 	 [**]	 	[**]

Specifications for the API and Excipients  

	Ingredient
	 	Specifications

	 	 [**]	 	Sepracor Specification

(Sepracor Material ID # 400549)
	 	 [**]	 	NF
	 	 [**]	 	USP
	 	 [**]	 	NF
	 	 [**]	 	NF
	 	 [**]	 	NF
	 	 [**]	 	Vendor Specification approved by Sepracor
	 	 [**]	 	Vendor Specification approved by Sepracor
	 	 [**]	 	Vendor Specification approved by Sepracor

29

 
SCHEDULE B  

 FEES AND MINIMUM RUN QUANTITIES  

        Pricing is based on number of batches ordered per purchase order; minimum annual volumes are as indicated. 

2007 Pricing Tables—in USD  

        Pricing is based on number of batches ordered per purchase order; minimum annual volumes are as indicated. 

 Lunesta 1 mg  

	SKU
	 	100's bottle

	 	Annual Qty (units)	 	[**]
	 	Run Qty

([**] kg batches)	 	1	 	2	 	6
	 	Run Qty (units)	 	[**]	 	[**]	 	[**]
	 	Price per unit	 	$[**]	 	$[**]	 	$[**]

 Lunesta 2 mg and 3 mg  

	 	SKU
	 	100's bottle
	 	2x18's blister

	 	Annual Qty (units)	 	[**]	 	[**]
	 	Run Qty

([**] kg

batches—Toronto)	 	1	 	3	 	6	 	1	 	2
	 	Run Qty (units)	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	 	Run Qty

([**] kg

batches—Manati)	 	1	 	3	 	6	 	1	 	2
	 	Run Qty (units)	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	 	Run Qty

([**] kg

batches—Manati)	 	—	 	1	 	2	 	1	 	2
	 	Run Qty (units)	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	 	Price per unit	 	$[**]	 	$[**]	 	$[**]	 	$[**]	 	$[**]

[**]

Assumptions, Terms and Conditions  

	1.
	This
pricing became effective on February 1, 2007.

	2.
	An
actual yield of [**]% is assumed.

	3.
	The
1 mg strength tablet will be made at Patheon's Toronto, Canada facility ("Patheon TRO") using a [**] kg batch size. The 2 mg and 3mg tablets will be made at
TRO (using a [**] kg batch size) or at Manatí (Puerto Rico Operations) using either a [**] kg or a [**] kg batch
size. When the [**] kg batch size is validated (anticipated in [**]), all 2 mg and 3 mg production is expected to be manufactured using this batch size.
TRO will remain as an alternate site of manufacture for this production. 

30

 

	4.
	When
the [**] kg batch size is validated and sample blisters of 2 mg and 3 mg product are ordered, a full lot will be manufactured and must be split between the
blister samples and bottles.

	5.
	The
packaging configurations for each SKU are as per specifications established at Patheon TRO.

	6.
	The
same primary packaging components and formats are assumed for all three strengths.

	7.
	Raw
material and finished product testing are based on established specifications and methods set forth in the Technical Information.

	8.
	Patheon
will be responsible for the shipment of bulk tablets from Patheon TRO or Manatí to Patheon Pharmaceuticals Inc. at 2110 East Galbraith Road, Cincinnati,
Ohio 45237-1625, USA for blister packaging. 

IT IS ASSUMED THAT FINISHED PACKAGES WILL BE SHIPPED FROM THE FINAL PACKAGING SITE TO SEPRACOR'S CURRENT DESIGNATED LOCATION IN THE USA. ANY ADDITIONAL SHIPPING COSTS RELATIVE
TO SHIPPING FROM PATHEON TRO THAT ARE INCURRED AS A RESULT OF PATHEON SUBCONTRACTING THE SERVICES TO ANY PATHEON AFFILIATES WILL BE BORNE BY PATHEON.

31

 
SCHEDULE C  

 API  

	API
	 	Supplier(s)

	Eszoplicone	 	Dow Chemical Co.
	 	 	Sepracor Canada Ltd.

32

 
SCHEDULE D  

API REIMBURSEMENT VALUE

        For
the purposes of the Agreement, the parties agree that the API Reimbursement Value shall be as follows: 

	Product
	 	API
	 	API

Reimbursement Value

	Eszoplicone Tablets	 	Eszopiclone	 	$[**]/Kg

MAXIMUM REIMBURSEMENT VALUE  

        Patheon's aggregate liability for API calculated in accordance with Sections 2.3 of the Agreement in a Year shall not exceed, in the aggregate, the maximum
reimbursement value set forth below: 

	Product
	 	Maximum Reimbursement Value*

	Eszoplicone Tablets	 	$[**]

	*
	the
$[**] limit above will be adjusted to $[**] for the [**]. 

33

 
SCHEDULE E  

 BATCH NUMBERING AND EXPIRATION DATES  

        Each batch of Products manufactured by Patheon will bear lot a unique lot number using the batch numbering system of such Patheon. The number will appear on all
documents relating to the particular batch of Product. 

        Patheon
will calculate the expiration date of the Product for each batch by adding the expiration period of the Product supplied by Sepracor to the date of Manufacture of each batch. 

34

 

  SCHEDULE F

TECHNICAL DISPUTE RESOLUTION

        Technical Disputes which cannot be resolved by negotiation as provided in Section 11.2 shall be resolved in the following matter: 

        1.     Appointment of Expert.    Within [**] Business Days after a party requests pursuant to
Section 11.2 that an expert be appointed to resolve a Technical Dispute, the parties shall jointly appoint a mutually acceptable expert with experience and expertise in the subject matter of
the dispute. If the parties are unable to so agree within such [**] Business Day period, or in the event of disclosure of a conflict by an expert pursuant to paragraph 2
hereof which results in the parties not confirming the appointment of such expert, then an expert (willing to act in that capacity hereunder) shall be appointed by an experienced arbitrator on the
roster of ADR Chambers who shall be a retired judge of the Ontario Superior Court of Justice. 

        2.     Conflicts of Interest.    Any person appointed as an expert shall be entitled to act and continue to act as such
notwithstanding that at the time of his appointment or at any time before he gives his determination, he has or may have some interest or duty which conflicts or may conflict with his appointment
provided that before accepting such appointment (or as soon as practicable after he becomes aware of the conflict or potential conflict) he fully discloses any such interest or duty and the parties
shall after such disclosure have confirmed his appointment. 

        3.     Not Arbitrator.    No expert shall be deemed to be an arbitrator and the provisions of the  Arbitration Act, 1991 (Ontario) or of any other
applicable statute (foreign or domestic) and the law relating to arbitration shall not apply to any such
expert or the expert's determination or the procedure by which the expert reaches his determination to be made pursuant to this Schedule F. 

        4.     Procedure.    Where an expert is appointed: 

	(a)
	Timing.    The expert shall be so appointed on condition that (i) he promptly fixes a reasonable time and place for
receiving representations, submissions or information from the parties and that he issues such authorizations to the parties and any relevant third party for the proper conduct of his determination
and any hearing and (ii) he renders his decision (with full reasons) within [**] Business Days (or such other date as the parties and the expert may agree) after receipt
of all information requested by him pursuant to paragraph 4(b) hereof.

	(b)
	Disclosure of Evidence.    The parties undertake one to the other to provide to any expert all such evidence and information
within their respective possession or control as the expert may reasonably consider necessary for determining the matter before him which they shall disclose promptly and in any event within
[**] Business Days of a written request from the relevant expert to do so.

	(c)
	Advisors.    Each party may appoint such counsel, consultants and advisors as it feels appropriate to assist the expert in
his determination and so as to present their respective cases so that at all times the parties shall co-operate and seek to narrow and limit the issues to be determined.

	(d)
	Appointment of New Expert.    If within the time specified in paragraph 4(a) above the expert shall not have rendered
a decision in accordance with his appointment, a new expert may (at the request of either party) be appointed and appointment of the existing expert shall thereupon cease for the purposes of
determining the matter at issue between the parties save that if the existing expert renders his decision with full reasons prior to the appointment of the new expert, then such a decision shall have
effect and the proposed appointment of the new expert shall be withdrawn. 

35

 

	(e)
	Final and Binding.    The determination of the expert shall, save in the event of fraud or manifest error, be final and
binding upon the parties.

	(f)
	Costs.    Each party shall bear its own costs in connection with any matter referred to an expert hereunder and, in the
absence of express provision in the Agreement to the contrary, the costs and expenses of the expert shall be shared equally by the parties. 

        For
greater certainty, the parties agree that the release of the Products for sale or distribution pursuant to the applicable marketing approval for such Products shall not by itself
indicate compliance by a Patheon with its obligations in respect of the Manufacturing Services and further that nothing in this Agreement (including this Schedule F) shall remove or limit the
authority of the relevant qualified person (as specified by the Quality Agreement) to determine whether the Products are to be released for sale or distribution. 

36

 

 SCHEDULE G  

PATHEON INC. QUALITY AGREEMENT  

QUALITY AGREEMENT

        This
Quality Agreement is made as of the 12th day of March, 2007 

Between:

Sepracor, Inc., a corporation existing under the laws of the State of Delaware, (hereinafter referred to as "Sepracor") 

-and- 

Patheon Inc., a corporation existing under the laws of Canada (hereinafter referred to as "Patheon") 

        WHEREAS
pursuant to a manufacturing services agreement dated March 1, 2004 as amended between the Sepracor and Patheon (the "MSA") Patheon agreed to provide pharmaceutical
manufacturing services in respect of certain Products (as described in Schedule A hereto); 

        AND
WHEREAS pursuant to the MSA, Sepracor will be required to provide certain information to Patheon in order for Patheon to provide the Manufacturing Services ("Sepracor's Technical
Information"); 

        AND
WHEREAS pursuant to the MSA Patheon will be required to operate within Sepracor's Technical Information as provided; 

        AND
WHEREAS the parties desire to allocate responsibility for procedures and Sepracor's Technical Information impacting on the identity, strength, quality and purity of the Products. 

        NOW,
THEREFORE, in consideration of the rights conferred and the obligations assumed under the MSA and herein, and for other good and valuable consideration (the receipt of sufficiency
of which are acknowledged by each party), and intending to be legally bound the parties agree as follows: 

37

 
ARTICLE 1 (RESPONSIBILITIES)  

        Subject to the terms and conditions hereinafter set out and subject to the terms and conditions of the MSA, the parties agree that Sepracor shall be responsible
for all of the items marked with "X" that are in the Sepracor column and that Patheon shall be responsible for all of the items marked with "X" in the Patheon column. If either the Sepracor or Patheon
columns are marked with "(X)", cooperation is required from the designated party. Capitalized terms not otherwise defined herein shall have the meaning specified in the MSA. 

A.) General Items  

	Item
	 	Detail
	 	Sepracor
	 	Patheon

	1	 	Permit on-site audits of all Patheon premises used in the manufacture of Products, procedures and Product-related documentation by Sepracor. This includes one (1) routine audit per year per site and, as necessary any for
cause audits.	 	 	 	X
	2	 	Permit access to all appropriate areas of manufacturing by Sepracor for the purpose of observing/monitoring manufacturing, packaging, and in-process/release testing of the Product.	 	 	 	X
	3	 	Manufacture and package the Product in strict adherence to Sepracor's Technical Information and approved master production records.	 	 	 	X
	4	 	Permit inspections by regulatory authorities as necessary. Notify Sepracor within one (1) Business Day of any regulatory inspection related in whole or in part to the Product. Allow Sepracor to be present on site during
inspection with Regulatory Authorities pertaining to the Product.	 	 	 	X
	5	 	Patheon will provide copies of any FDA warning letters relating to the Product within two (2) business days of receipt. Patheon will provide copies of any FDA Form 483's, EIR's or the like from applicable regulatory
agencies relating to the Product or facilities used to produce, test, or package the Product (redacted as necessary) upon request. Responses related to Sepracor's Product shall be reviewed and approved by Sepracor prior to submission to the
applicable regulatory agency, provided that Patheon reserves the right to respond to such regulatory agencies without prior approval if in the reasonable opinion of its counsel it is required to do so.	 	 	 	X
	6	 	Notify Sepracor within one (1) Business Day of any regulatory authority requests for product samples, batch documentation or other information related to the Product. Provide copies of such documentation to Sepracor
within three (3) Business Days.	 	 	 	X
	7	 	Provide support during regulatory inspections, as necessary.	 	X	 	X
	8	 	Not to subcontract any work hereunder to a third party except in accordance to the provisions of the MSA. For clarity, Patheon shall have the right to subcontract Component testing to other Patheon facilities or to any of
the contract laboratories listed in Schedule C.	 	 	 	X

38

 

	9	 	Provide data to support the completion of an annual product review (excluding stability evaluation) to Sepracor. At Sepracor's request and subject to an additional fee to be agreed by the parties, Patheon may prepare
annual product review reports on behalf of Sepracor and in accordance with Sepracor's instructions.	 	 	 	X
	10	 	Review and approve applicable sections of Annual Product Review.	 	X	 	X
	11	 	Review findings and recommendations from the Annual Product Review.	 	X	 	(X)
	12	 	Notify and obtain approval from Sepracor, prior to implementation, of any proposed changes to the process, Components, supplies, Sepracor's Technical Information, records, and testing which may have impact on the Product
or the Products state of validation.	 	 	 	X
	13	 	Maintain agreements with Components suppliers (for which a party is responsible for purchasing) that insure proper notification and approval of any changes impacting the supplied Components.	 	X	 	X
	14	 	Provide appropriate sections from Sepracor's regulatory filings to Patheon.	 	X	 	 
	15	 	Conduct operations in compliance with all applicable laws and regulations (including cGMP's).	 	X	 	X
	16	 	Investigate and revolve all Product complains including those related to Adverse Events and potential Product failures.	 	X	 	(X)
	17	 	Provide copies of batch production records for any lots associated with Adverse Events or potential Product failures at the request of Sepracor.	 	 	 	X
	18	 	Investigate all manufacturing type Product complaints.	 	 	 	X
	19	 	Prepare and file all field alerts with regulatory authorities and provide copies to Patheon.	 	X	 	 
	20	 	Initiate and control any Product recall. Provide notification and documentation to Patheon prior to regulatory submission.	 	X	 	(X)
	21	 	Liaise with regulatory authorities for approval, maintenance and updating of regulatory applications.	 	X	 	 
	22	 	Prepare IND/NDA annual reports.	 	X	 	 
	23	 	Provide Patheon generated data to support Sepracor submission for the Annual Report	 	X	 	(X)
	24	 	Submit drug listing form 2657 to FDA	 	X	 	 

39

 

B.) Validation and Process Trending Activities  

	Item
	 	Detail
	 	Sepracor
	 	Patheon

	1	 	Establish and maintain a validation program and applicable master validation plans for the Product.	 	 	 	X
	2	 	Qualify (IQ/OQ) facilitates, utilities and process equipment.	 	 	 	X
	3	 	Calibrate instrumentation and qualify computer systems used in the manufacture and testing of the Product.	 	 	 	X
	4	 	Provide access to Sepracor for review of the documentation associated with items 1-3 above. If Patheon conducts qualification of facilities or utilities that directly impacts
the Product, Sepracor must approve the protocol and the report. If Patheon uses the Product in any qualification of process equipment, then Sepracor must approve the protocol and report.	 	(X)	 	X
	5	 	Prepare and approve all performance qualification and process validation protocols and reports, for both manufacturing and packaging operations.	 	 	 	X
	6	 	Review and approve master validation plan, performance qualification and process validation protocols and reports for the Product.	 	X	 	 
	7	 	Maintain an appropriate cleaning and cleaning validation program.	 	 	 	X
	8	 	Provide toxicological information to be used in the development of a cleaning program.	 	X	 	 
	9	 	Provide Quarterly reports for any deviations, reworks and investigations related to the Product.	 	 	 	X

40

 

C.) Active Materials and Excipients  

	Item
	 	Detail
	 	Sepracor
	 	Patheon

	1	 	Provide the master formula.	 	X	 	 
	2	 	Provide approved supplier list from the NDA.	 	X	 	 
	3	 	Qualify and approve Active Materials supplier(s).	 	X	 	 
	4	 	Provide Active Materials specifications.	 	X	 	 
	5	 	Provide test methods for Active Materials.	 	X	 	 
	6	 	Validate testing methods for Active Materials.	 	X	 	 
	7	 	Transfer Active Materials methods to Patheon (may be only ID methods).	 	X	 	 
	8	 	Participate in protocol driven method transfers in order to receive Active Materials methods (if necessary).	 	X	 	X
	9	 	Analyze and release received Active Materials in accordance with Sepracor's Technical Information.	 	 	 	X
	10	 	Maintain retain sample of the Active Materials for one year beyond the expiration of the Product.	 	X	 	X
	11	 	Qualify and approve excipients supplies as per Patheon SOP.	 	 	 	X
	12	 	Provide test methods and method validation (or qualification as appropriate) for excipients for non-compendia methods.	 	X	 	 
	13	 	Provide specifications and test methods for excipients for all compendia methods for Sepracor approval.	 	 	 	X
	14	 	Analyze and release excipients.	 	 	 	X
	15	 	Maintain retain samples of the excipients for one year beyond the expiration of the Product.	 	 	 	X
	16	 	Active Materials shall be consumed on a first in—first our basis unless otherwise authorized by Sepracor.	 	 	 	X

41

 

D.) Packaging  

	Item
	 	Detail
	 	Sepracor
	 	Patheon

	1	 	Prepare, control, issue and executive master packaging records.	 	(X)	 	X
	2	 	Review and approve master packaging records.	 	X	 	X
	3	 	Provide artwork, dimensions, labeling text and other specifications for Sepracor specific packaging components.	 	X	 	 
	4	 	Review and approve labeling.	 	X	 	(X)
	5	 	Provide Sepracor's Technical Information for packaging components.	 	X	 	(X)
	6	 	Qualify and approve packaging component suppliers as per Patheon SOP, if purchased from Patheon's preferred supplier list. Maintain a vendor qualification program consisting of periodic audits and periodic testing of
packaging components.	 	 	 	X
	7	 	Approve any changes to packaging specification prior to implementation.	 	X	 	 
	8	 	Provide specification and test methods for packaging components for Sepracor approval.	 	 	 	X
	9	 	Analyze packaging components (in accordance with vendor qualification program) and release packaging components.	 	 	 	X

42

 

E.) Product Manufacture and In-process testing  

	Item
	 	Detail
	 	Sepracor
	 	Patheon

	1	 	Provide approved expiry period for the Product (strength and package).	 	X	 	 
	2	 	Prepare, and control master production records for the Product.	 	(X)	 	X
	3	 	Approve master production records for the Product.	 	X	 	X
	4	 	Document training of supervisors and operators in the executive of batch production records and applicable SOPs for the Product.	 	 	 	X
	5	 	Issue batch production records as true and accurate reproductions of the master production record in accordance with appropriate lot numbering scheme for the Product.	 	 	 	X
	6	 	Document accurately and completely the manufacture of Product batches concurrently and contiguously at time of execution.	 	 	 	X
	7	 	Document errors and discrepancies as batch production record deviations.	 	 	 	X
	8	 	Document all equipment malfunctions (with respect to equipment used in the manufacture of the Products) with time of occurrence and duration. Document major equipment malfunctions (with respect to equipment used in the
manufacture of the Products) as process deviations—include immediate preventive/corrective action.	 	 	 	X
	9	 	Collect samples and perform in-process testing as defined in the batch production record.	 	 	 	X
	10	 	Document and investigate above alert limits and out-of-specification ("OOS") results obtained from in-process testing.	 	 	 	X
	11	 	Provide notification to Sepracor QC before conducting a retest to any OOS. Confirmation testing can be completed as part of routine lab investigation.	 	 	 	X
	12	 	When Sepracor enables access to Sepracor LIMS, data will be entered as appropriate.	 	 	 	X
	13	 	Notify Sepracor within one (1) Business Day of any confirmed OOS test results or above alert limits for in-process tests.	 	 	 	X
	14	 	If Patheon or Sepracor determines any laboratory results for the Product to be unexpected, conduct an investigation into the unexpected result.	 	X	 	X

43

 

F.) Testing of Finishing Drug Product  

	Item
	 	Detail
	 	Sepracor
	 	Patheon

	

1	
 	

Provide Sepracor's Technical Information.	
 	

X	
 	

 
	2	 	Provide Product test methods.	 	X	 	 
	3	 	Provide updates to methods and Sepracor's Technical Information.	 	X	 	 
	4	 	Validate analytical test methods.	 	X	 	 
	5	 	Receive methods via formal protocol driven transfers.	 	(X)	 	X
	6	 	Implement necessary method improvements as directed by Sepracor.	 	 	 	X
	7	 	Sample batches for finished Product testing.	 	 	 	X
	8	 	Perform finished Product testing and provide reviewed certificate of analysis within 20 calendar days from completion of packaging.	 	 	 	X
	9	 	Perform investigations related to DOS results.	 	 	 	X
	10	 	Notify Sepracor within one (1) Business Days of any confirmed OOS result after preliminary investigation is complete and no apparent root cause is found.	 	 	 	X
	11	 	Generate Certificates of Analysis.	 	 	 	X
	12	 	Maintain retain samples of the finished Product for one year beyond the expiration of the Product.	 	 	 	X
	13	 	Perform annual retain sample inspection as per Patheon SOP.	 	 	 	X
	14	 	When Sepracor enables access to Sepracor LIMS, data will be entered as appropriate.	 	 	 	X
	15	 	If Patheon or Sepracor determines any laboratory result for the Product to be unexpected, conduct an investigation into the unexpected result.	 	X	 	X

44

 

G.) Batch Disposition  

	Item
	 	Detail
	 	Sepracor
	 	Patheon

	

1	
 	

Perform a quality review of batch production records at the manufacturing site.	
 	

 	
 	

X
	2	 	Document errors, deviations, reworks, investigations, in-process testing investigations, adverse observations, etc found during manufacture or review.	 	 	 	X
	3	 	Resolve open deviations and investigations prior to issuance of approved batch record and Certificate of Manufacture.	 	 	 	X
	4	 	Provide Certificate of Manufacture for any batch presented to Sepracor for disposition.	 	 	 	X
	5	 	Provide photocopies or electronic scans, if requested, of full batch records.	 	 	 	X
	6	 	Review and approve Certificates of Analysis	 	X	 	X
	7	 	Review Patheon documentation for batches presented for disposition.	 	X	 	 
	8	 	Conduct supplemental investigations for all batches having deviations, investigations, reworks, low yield, or lab investigations if required.	 	X	 	 
	9	 	Upon satisfactory completion of review and any necessary supplemental investigation(s), disposition (approve or reject) the batch.	 	X	 	 
	10	 	Respond to inquiries/information requests regarding batch production record/certificate of compliance deficiencies within three (3) Business Days.	 	 	 	X
	11	 	Conduct periodic audit of full batch records for those batches having only a Certificate of Manufacture provided to Sepracor.	 	X	 	 
	12	 	Permit periodic on-site review of batch documentation.	 	 	 	X
	13	 	Maintain all batch records for a minimum of one year past Product expiry date and supply photocopies of all such records to Sepracor upon request.	 	 	 	X

45

 

H.) Stability Program  

	Item
	 	Detail
	 	Sepracor
	 	Patheon

	

1	
 	

Prepare and provide stability sampling plan and testing protocol.	
 	

X	
 	

 
	

2	
 	

Provide samples for stability testing as requested.	
 	

 	
 	

X
	

3	
 	

Store stability samples.	
 	

X	
 	

 
	

4	
 	

Perform stability testing.	
 	

X	
 	

 
	

5	
 	

Notify Patheon of stability testing failures.	
 	

X	
 	

 

	
SEPRACOR, INC.	
 	

 
	

Per:	
 	

/s/  BRIAN H. GRAY      
 VP Commercial Quality Operations	
 	

6/5/07
	
PATHEON INC.	
 	

 
	

Per:	
 	

/s/  ANDREW MCNICOLL      
 Andrew McNicoll

Director, Global Quality Compliance	
 	

May 25, 2007

46

 
SCHEDULE A (PRODUCTS)  

	Product(s)
 
	 	Galenic Form
	 	Packaged Form
	 	Dosage (Strength)

	Lunesta	 	Tablet	 	100-ct bottle

90-ct Hospital Unit Dose

Blister package (6 cards of 15

tablets)	 	1 mg

1 mg
	

Lunesta	
 	

Tablet	
 	

100-ct bottle

90-ct Hospital Unit Dose

Blister package (6 cards of 15

tablets)

Physician samples, blister

(2 tablets per blister)	
 	

2mg

 

2mg

2mg
	

Lunesta	
 	

Tablet	
 	

100-ct bottle

90-ct Hospital Unit Dose

Blister package (6 cards of 15

tablets)

Physician samples, blister

(2 tablets per blister)	
 	

3mg

3mg

  

3mg

47

 
SCHEDULE B (QUALITY CONTACTS)  

	ISSUE
 
	 	CLIENT
	 	PATHEON

	Product Release	 	[**]	 	[**]
	

QC Testing/Investigations	
 	

[**]	
 	

[**]
	

QA Investigations	
 	

[**]	
 	

[**]
	

Regulatory Affairs	
 	

[**]	
 	

[**]
	

Validation	
 	

[**]	
 	

[**]
	

Compliance Audits	
 	

[**]	
 	

[**]
	

Product Complaints	
 	

[**]	
 	

[**]
	

Change Management	
 	

[**]	
 	

[**]
	

Technical Agreement Revisions	
 	

[**]	
 	

[**]

Note: Each party will notify the other in the event of a change in contact or designee

48

 
SCHEDULE C (Contract Laboratories)  

[**] 

[**] 

[**] 

[**]

[**]

[**]

49

 

  SCHEDULE H  

 PPI QUALITY AGREEMENT  

        As of the execution date of this Agreement, it is the intent of the parties that the Quality Agreement with PPI will be completed and executed on or before
December 21, 2007. 

50

 
SCHEDULE I  

 MOVA QUALITY AGREEMENT  

        As of the execution date of this Agreement, it is the intent of the parties that the Quality Agreement with MOVA will be completed and executed on or before
December 21, 2007. 

51

 
SCHEDULE J  

 CAPITAL REQUIREMENTS  

        Pursuant to the terms of the Agreement, Patheon has subcontracted certain of the services to its Affiliates, Patheon Pharmaceuticals Inc.
("Patheon Cincinnati") and MOVA Pharmaceutical Corporation ("MOVA"). In order for Patheon to perform the
Manufacturing Services, certain capital expenditures will be necessary in respect of capital equipment required to be acquired and installed at Patheon Cincinnati's facility located at 2110 East
Galbraith Road, Cincinnati, Ohio 45237-1625, USA ("Cincinnati") and at MOVA's facility located at State Road # 670, Km. 2.7, Bo. Coto Norte,
Manatí, Puerto Rico 00674 ("Manatí") and certain modifications in connection with the installation of the equipment will
be required to be made to the facility at Manatí. This schedule sets out the obligations of the parties in respect thereof. 

        The
following capital expenditures will be required: 

Dedicated Capital Requirements  

	 
	 	Total Capital USD

	Manatí:	 	 
	Russell Sieve with Sonicator	 	[**]
	Tablet tooling (6 sets)	 	[**]
	Bottle change parts	 	[**]
	Total	 	[**]

Non-Dedicated Capital Requirements  

	Description
 
	 	Total Capital USD

	Utilities for Cat 3 area	 	 
	New AHU 100A (Caribe AHU)	 	[**]
	Upgrade of Existing 50,000 scfm AHU 100 to comply with 100% fresh air (Install Additional Cooling Coil Capacity and other)	 	[**]
	Install two 50,000 scfm exhaust fans with a Bag Inn / Bag Out Hepa filter housings	 	[**]
	Upgrade Existing Dust Collector (DC-100) for 25,000 scfm	 	[**]
	New Dust Collector 25,000 scfm and Exhaust Fans	 	[**]
	HVAC Controls	 	[**]
	Design	 	[**]
	Metal Duct work for HVAC supply	 	[**]
	Mechanical/Equipment Installation/chilled water/steam	 	[**]
	Demolition (walls, lockers, duct)	 	[**]
	 	Subtotal	 	[**]
	
Facilities for Cat 3 area and Zoning of Manufacturing area	
 	

[**]
	New gown/degown room, airlocks and controls; cat 3	 	[**]
	Temporary facilities modifications	 	[**]
	Vaccum system for contaiment area (Dover-Pac)	 	[**]
	New material airlocks	 	[**]
	Cat 3 modifications in mfg rooms and corridors	 	[**]
	Zoning (Gowning Area-Cabinets S/S)	 	[**]
	Zoning (Material Air Locks)	 	[**]
	Hung Ceiling at Corridors	 	[**]
	Design Change Order	 	[**]
	Mansory	 	[**]

52

 

	Concrete	 	[**]
	Mist Shower	 	[**]
	Electrical	 	[**]
	Doors	 	[**]
	Finish	 	[**]
	Wash system within each room and contaiment tank external	 	[**]
	Housekeeping/debris disposal w/permit (5 month working period)	 	[**]
	 	Subtotal	 	[**]
	
Equipment	
 	

[**]
	Compression machine hopper level sensor	 	[**]
	Separate control for each coating pan	 	[**]
	Dew point sensors for coating pans	 	[**]
	Dehumidification for dew point control	 	[**]
	PK blender loading modifications	 	[**]
	Glove boxes [**]	 	[**]
	Russell sieve with sonicator	 	[**]
	Tablet press tooling [**]	 	[**]
	Packaging change parts—bottles	 	[**]
	 	Subtotal	 	[**]
	
Engineering/Validation/EHS Hours	
 	

[**]
	External Validation	 	[**]
	Internal Validation	 	[**]
	External Engineering	 	[**]
	Internal Engineering	 	[**]
	EHS	 	[**]
	Design Construction Support (1 visit/week)	 	[**]
	 	Subtotal	 	[**]
	
Additional EHS Requirements	
 	

[**]
	Local Construction Permits	 	[**]
	Municipal Taxes	 	[**]
	EHS Pre-Start amd Review	 	[**]
	Portable Gowning	 	[**]
	Upgrade Existing Dust Collector (DC-100) to comply with EHS requirements (Bag inn / Bag out for Cartridge Filters)	 	[**]
	Upgrade Existing Dust Collector (DC-100) to comply with EHS requirements (Bag inn / Bag out Hepa Filter housing at the exhaust)	 	[**]
	 	Subtotal	 	[**]
	 	 	[**]
	 	 	Total	 	[**]
	 	Project Contingency (shipping and installation) [**]%	 	[**]
	 	 	Total Project Cost	 	[**]

	1.
	Sepracor
will be responsible for all of the costs of the capital equipment requirements listed above under the heading "Dedicated Capital Requirements", being the amount of
$[**].

	2.
	MOVA
will be responsible for the majority of the costs of the capital equipment requirements listed above under the heading "Non-Dedicated Capital Requirements", being the
amount of $[**] USD. 

53

 
	3.
	Sepracor
will be responsible for a portion of the costs of the capital equipment requirements listed above under the heading "Non-Dedicated Capital Requirements", being the
amount of $[**]. Patheon will reimburse the Sepracor for such amount at a rate of $[**] per [**] tablets of Product
manufactured, regardless of the origin of manufacture, starting from the point of commercial production at Manati (post-validation) until the capital is repaid. In the event that
commercial production at Manati does not start by [**], Patheon will reimburse Sepracor $[**] every [**] months commencing on
[**] until the capital is repaid.

	4.
	Sepracor
represents and warrants that the funding to be provided by Sepracor does not contravene any agreement to which Sepracor is a party.

	5.
	The
equipment listed above as "Dedicated Capital Requirements" shall be dedicated for use with respect to Sepracor's Products. The equipment listed above as "Non-Dedicated
Capital Requirements" may be used for the manufacture of products for third parties.

	6.
	Title
and risk of loss to the equipment listed above as "Dedicated Capital Requirements" shall reside with Sepracor who shall be the sole legal and beneficial owner thereof. Title and
risk of loss to the equipment and the capital improvements listed above as "Non-Dedicated Capital Requirements" shall reside with MOVA who shall be the sole legal and beneficial owner
thereof and upon receipt of full repayment, Sepracor shall not have any security interest, charge or encumbrance in such equipment and capital improvements and Sepracor shall not register or take any
other action to impose a security interest, charge or encumbrance over such equipment and the capital improvements.

	7.
	Upon
the expiration or termination of the Agreement for any reason prior to completion of the reimbursements contemplated by clause 3 above, (a) MOVA shall have the
option to purchase the equipment listed above as "Dedicated Capital Requirements" installed at Manatí at fair market value, (b) Sepracor shall remove, or arrange to remove, from
Manatí at its expense all equipment listed above as "Dedicated Capital Requirements" installed at Manatí that is not purchased by MOVA and Sepracor shall repair, or
arrange to repair, at its expense any damage to Manatí resulting from such removal, and (c) MOVA shall be entitled to retain all of the equipment and the capital improvements
listed above as "Non-Dedicated Capital Requirements" without any compensation therefore owing to Sepracor.

	8.
	All
monetary amounts are expressed in the lawful currency of the United States of America. 

54

 

  SCHEDULE K  

REPORT OF ANNUAL ACTIVE PHARMACEUTICAL INGREDIENT INVENTORY

RECONCILIATION AND CALCULATION OF ACTUAL ANNUAL YIELD

AND YIELD INCENTIVE.  

	TO:	 	SEPRACOR, INC.
	

FROM:	
 	

PATHEON INC.
	

RE:	
 	

API annual inventory reconciliation report and calculation of Actual Annual Yield pursuant to Section 2.3(a) of the Manufacturing Services Agreement dated September •, 2007 (the "Agreement")

	

Reporting Year ending:	
 	

 
	

API on hand at beginning of Year:	
 	

                  kg    (A)
	

API on hand at end of Year:	
 	

                  kg    (B)
	

Quantity Received during Year:	
 	

                  kg    (C)
	

Quantity Dispensed(1) during Year:

(A + C-B)	
 	

                  kg    (D)
	

Quantity Converted during Year:

(total API in Products produced)	
 	

                  kg    (E)
	

API Reimbursement Value:	
 	

$                  /kg
	

Target Yield:	
 	

                  %
	

Yield Allowance:	
 	

                  %
	

Actual Annual Yield:

((E/D) * 100)	
 	

                  %
	

API Yield Incentive(2):	
 	

$                  credit note to be issued by                  
[insert name of party] in favour of                  [insert name of party].

	(1)
	Excludes
any Active Pharmaceutical Ingredient received or consumed in connection with technical transfer activities or development activities, including, without limitation, any
regulatory, stability, validation or test batches manufactured during the Year.

	(2)
	API
Yield Incentive identifies the value of the credit amount to be issued by either party is calculated based on the API Yield Incentive Scheme agreed to by the parties in
Schedule L of the Agreement. 

55

 

Capitalized
terms used in this report have the meanings given to such terms in the Agreement. 

PATHEON INC.

Per:
                                        

Name:

Title: 

Date:
                                        
-                
 

56

 
SCHEDULE L  

 API YIELD INCENTIVE SCHEME

Period Covered:    January 1, 2007 to December 31, 2007 

Target Yield:    [**]% 

Yield Allowance:    [**]% 

If
the Actual Annual Yield of API used to manufacture bulk Product at all of the Manufacturing Sites is: 

	A.
	Over
[**]% (Target Yield + Yield Allowance), Sepracor will issue a credit amount to the Patheon
Administrator equal to: 

(Actual
Annual Yield-[**]%) × Quantity Dispensed × API
Reimbursement Value. 

	B.
	At
least [**]% (Target Yield-Yield Allowance) to  [**]% (Target Yield + Yield Allowance, no credit amount will be issued.

	C.
	Below
[**]% (Target Yield-Yield Allowance), Patheon will issue a credit amount to Sepracor equal to: 

([**]%-Actual Annual Yield) × Quantity Dispensed × API
Reimbursement Value. 

57

 
SCHEDULE M  

SHIPPING REIMBURSEMENT FROM MANATI, PR CREDIT TABLE  

        For the purposes of the Agreement, the parties agree that the shipping reimbursements shall be as follows for product manufactured and packaged at the
Manatí site: 

	Product
 
	 	Transportation Method
	 	Destination
	 	Shipping Reimbursement Value /unit

	2 mg 100's Bottle	 	Boat	 	Louisville	 	$[**]
	

3 mg 100's Bottle	
 	

Boat	
 	

Louisville	
 	

$[**]

        For
product shipped from Puerto Rico, shipments must comply with all required storage requirements and applicable DEA regulations, including, but not limited to, DEA notifications and
using a dedicated, secured container. 

        All
shipments will be in either 20' or 40' dry containers which will be properly blocked and braced for ocean shipment. The costs to block and brace will be borne by Patheon. If any
shipment will be less than 10 pallets, it must be approved by Sepracor. 

        If
Patheon delivery performance results in late shipments and / or out of stock situations for Sepracor, the cost to ship a sufficient amount to alleviate the out of stock situation will
be borne by Patheon. 

        If
Sepracor chooses to expedite shipping by air for any reason other than late delivery by Patheon, then the reimbursement rate will be based on boat. 

        For
the avoidance of doubt, the shipping reimbursement amounts set forth above shall be applied to each invoice in the form of a deduction. 

58

QuickLinks

Exhibit 10.40QuickLinks
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Exhibit 10.43    
    

Confidential
Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omission. 

SEPRACOR INC.

Att.: Adrian Adams

President & Chief Executive Officer

84 Waterford Drive,

Malborough, MA 01752-7010

USA

S. Mamede do Coronado 31 Dec. 2007 

Ref.: BIA 2-093 (Eslicarbazepine Acetate)  

Dear
Mr. Adams: 

        Please
find enclosed the two (2) originals of the exclusive license agreement between SEPRACOR and BIAL ("Parties") for the license of BIAL's proprietary compound
Eslicarbazepine Acetate in the United States of America and Canada ("License Agreement"). Please have the enclosed documents
signed by SEPRACOR and return both originals to Bial for signature. Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the License Agreement. 

        As
set forth in Section 4.2 of the License Agreement, BIAL or a BIAL Affiliate and SEPRACOR have agreed to negotiate in good faith and enter into an agreement, within one hundred
and eighty (180) days of the Effective Date of the License Agreement, for the supply of the BIA 2-093 Product to SEPRACOR for use, sale and distribution within the Field and
Territory (the "Supply Agreement"). 

        In
keeping with Section 4.2 of the License Agreement, the Parties have already negotiated certain terms of the Supply Agreement and have agreed that the terms and conditions set
forth in this letter will be incorporated in the Supply Agreement. All references to "BIAL" herein shall be read and interpreted as references to "BIAL or a BIAL Affiliate" and all
references to "SEPRACOR" herein shall be read and interpreted as references to "SEPRACOR or a SEPRACOR Affiliate". 

	1.
	Supply of BIA 2-093 Products; Price.    BIAL shall manufacture or have manufactured for SEPRACOR in the Territory
the BIA 2-093 Product, fully packaged and released for immediate commercial sale, including physician samples ("Finished Product"), and BIA 2-093 for clinical use ("Clinical
Product"). Subject to the terms of the Supply Agreement, SEPRACOR agrees to purchase from BIAL all of SEPRACOR's requirements for Finished Products.

	a.
	Clinical Supply:    BIA 2-093, in the various forms that are agreed upon by the Parties, for use in preclinical
and clinical trials (including post-marketing clinical trials) will be supplied by BIAL or a BIAL Affiliate [**].

	b.
	Physician Samples:    Physician samples of the BIA 2-093 Product will be supplied by BIAL or a BIAL Affiliate
[**]. The packaging for physician samples will indicate that they are samples and not for commercial sale and SEPRACOR agrees not to sell such physician samples. Pursuant to
the Supply Agreement, until [**], there shall be no restrictions on the number of physician samples utilized by SEPRACOR;  provided, however, that [**]. Following [**], the amount of physician samples
supplied by BIAL (as
measured by the [**]) will not exceed [**]% of the Net Sales of such BIA 2-093 Product, unless otherwise agreed upon by BIAL.

	c.
	Commercial Supply:    SEPRACOR will not pay a royalty on commercial sales of the BIA 2-093 Products, but will pay
a transfer price (the "Transfer Price" or "TP") on the BIA 2-093 Products in accordance with Section 2 below. 

1

 

	2.
	Price.    Transfer Price for the commercial supply of 400mg, 600mg and 800mg tablets of the BIA 2-093 Product to
SEPRACOR for the United States territory will be calculated at the end of each calendar quarter as [**] percent ([**]%) of the weighted average
Net Selling Price for the 400mg, 600mg and 800mg pills of the BIA 2-093 Product in such territory; provided however that
[**] and will not be [**].

	a.
	The
Transfer Prices set forth in this Section 2 are based on the assumption that [**]. For the avoidance of doubt, the primary packaging of the BIA
2-093 Product is described on Exhibit A attached hereto.

	b.
	SEPRACOR
will provide BIAL by the [**] Business Day of first month following each calendar quarter the weighted average Net Selling Price in US dollars for the
previous quarter sales. The [**] will always apply to the next order of the BIA 2-093 Product.

	c.
	The
supply of BIA 2-093 Product for the Canadian territory will be on terms and conditions substantially similar to the Supply Agreement as mutually agreed upon by the
Parties, and the Parties agree to negotiate in good faith prices, terms and conditions with [**] to the Transfer Prices for the BIA 2-093 Product for the U.S.
territory. It is however clearly understood by both Parties that (i) SEPRACOR shall not be under an obligation to purchase the BIA 2-093 Product for Canada at a Transfer Price which
does not provide [**] for SEPRACOR and (ii) BIAL shall be under no obligation to supply the BIA 2-093 Product to SEPRACOR at a Transfer Price which does not
provide [**] for BIAL.

	3.
	Forecast and Firm Order.    Upon the execution of the Supply Agreement and at the beginning of [**]
thereafter, SEPRACOR shall provide BIAL with a short-term rolling [**] forecast of its estimated [**] purchases of Finished Product (the
"Forecast"). Except as set forth below, each Forecast will be non-binding and will represent only SEPRACOR's good faith estimate of expected orders for the Finished Product. Commencing
[**] prior to the anticipated launch date of the Product, the portions of the Forecast set forth in Sections 3.a, 3.b and 3.c will be firm orders and will represent
SEPRACOR's commitment to BIAL to purchase the amount of Finished Product indicated in such portion of the Forecast:

	a.
	[**] percent
([**]%) of the first [**] of each Forecast;

	b.
	For
the [**] percent ([**]%) of the second [**] of each Forecast, and thereafter
[**] percent ([**]%) of the second [**] of each Forecast;

	c.
	For
the [**] percent ([**]%) of the [**] of each Forecast, and thereafter [**] of
the [**] of each Forecast will be binding. 

Forecasts
and firm orders for Clinical Product will be addressed in the Supply Agreement. 

	4.
	Shipping and Delivery.    All deliveries of Finished Product by BIAL shall be made [**], unless
otherwise agreed to by the Parties. Risk of loss and title shall transfer to SEPRACOR [**]. Product will be appropriately packaged and labeled based upon agreed upon
specifications between the Parties.

	5.
	Acceptance and Rejection.    BIAL will manufacture or have manufactured the BIA 2-093 Product in accordance with
the cGMP, and the requirements of the product specifications and Quality Agreement. BIAL or a Third Party on behalf of BIAL will conduct all quality assurance/control testing on each lot along with
the release to SEPRACOR. BIAL or a Third Party on behalf of BIAL shall provide to Sepracor with each lot of delivered BIA 2-093 Products (i) a Certificate of Analysis (each, a
"COA") certifying that such BIA 2-093 Products conform to the product specifications, cGMP, the Quality Agreement, [**] are referred to herein as, the "Release
Documentation"). SEPRACOR shall be under no obligation to accept any shipment of BIA 2-093 

2

 

Products
for which BIAL has not provided a COA at the time the BIA 2-093 Products were delivered to SEPRACOR. 

SEPRACOR
shall have [**] from delivery of the Finished Product and Release Documentation by BIAL to notify BIAL of its rejection of Finished Product for any Defects (as defined
below). SEPRACOR shall notify BIAL within the earlier of (a) [**] following sale of a Finished Product by or on behalf of SEPRACOR, and
(b) [**] of such Finished Product by BIAL to the carrier, of its rejection of Finished Product for any Latent Defects (as defined below), subject however to, in any
event, such SEPRACOR notification being made (i) within [**] after discovery of the Latent Defects by SEPRACOR, its Affiliates, sublicensee or distributors, and
(ii) in no event after the expiration date of the Finished Product. For purposes of this paragraph, "Defects" shall mean Finished Products that have manufacturing defects, packaging defects
and/or defects in the Release Documentation ("defects", meaning non conformity with the product specifications, cGMP and the Quality Agreement) which would be discoverable upon reasonable physical
inspection and "Latent Defects" shall mean [**]. 

	6.
	Payment.    BIAL shall invoice SEPRACOR upon the later of delivery of each batch of Finished Product to the carrier and
release of such batch by BIAL or a Third Party on behalf of BIAL. Payment terms will be [**] from date of receipt of the invoice (with a paper copy being sent electronically
and by post). Any late payment shall accrue interest in accordance with Section 3.2 of the License Agreement.

	7.
	Conversion Price.    BIAL will be paid a transfer price in [**]. The following currency conversion
mechanism will be applied to the Transfer Price calculated when the exchange rate ("ER") between the [**] and [**] is [**] to
determine the Adjusted Transfer Price ("ATP"): 

ATP =
[**]

If the ER is [**], no adjustment to the TP will be made. In this case, the TP will be equal to [**]% of the net selling price (NSP), provided however
that [**]. 

"ER"
means the exchange rate between the [**] and [**] at the time of invoice of Licensed Product as published in the Wall Street Journal (US Edition). 

Floor
and ceiling exchange rates between the [**] and the [**] will be set at [**] and [**],
respectively. Beyond these limits, the exchange rate will equal the respective floor or ceiling rate. 

The
following table illustrates some examples based on the minimum transfer price of [**]: 

	 	 	 	 	[**]	 	[**]	 	[**]	 	[**]
	 	 	 	 	[**]	 	[**]	 	[**]	 	[**]
	 	 	 	 	[**]	 	[**]	 	[**]	 	[**]
	

	[**]	 	[**]	 	[**]	 	[**]	 	 	 	 
	
	 	 	 	

	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]

	8.
	Term.    The Supply Agreement shall be coterminous with the License Agreement (on a country by country basis). In the event of
expiration or termination of the Supply Agreement, SEPRACOR shall pay BIAL all firm orders, as of the effective date of termination, of Finished Product and Clinical Product. 

3

 

9.     Technology Transfer; Inability to Supply; Force Majeure.  

	(a)
	In
the event of an Inability to Supply (as defined herein), or an event of Force Majeure affecting BIAL or Third Party manufacturers for a period anticipated to exceed
[**], or at such time at which SEPRACOR has reasonable grounds to believe that BIAL will be unwilling or unable to meet its obligations under the Supply Agreement, SEPRACOR may
request that BIAL establish a second source of supply for the Finished Product, either internally or through a Third Party manufacturer. If BIAL chooses to establish a second source of supply for such
Finished Product, BIAL will use Commercially Reasonable Efforts to establish such supplier as soon as reasonable practicable. If BIAL chooses not to establish a second source of supply for such
Finished Product, BIAL shall provide SEPRACOR with such assistance set forth in Section 9(b). In the event of a Force Majeure or an Inability to Supply, the Parties shall cooperate with each
other in taking all actions that the Parties deem reasonably necessary in order to minimize the Force Majeure situation or remedy the Inability to Supply.

	(b)
	Upon
(i) termination of the Supply Agreement by SEPRACOR as a result of BIAL's uncured material breach, or (ii) in the event that BIAL does not agree to
supply Licensed Products other than the BIA 2-093 Products, or (iii) upon an event of Force Majeure affecting BIAL or Third Party manufacturers for a period anticipated to exceed
[**], or (iv) upon BIAL's Inability to Supply, or (v) at such time at which SEPRACOR has reasonable grounds to believe that BIAL will be unwilling
or unable to meet its obligations under the Supply Agreement and, with respect to items (iii), (iv) and (v) only, provided that BIAL has chosen not to establish a second source of
supply for such Finished Product or is not using Commercially Reasonable Efforts to establish such a second source of supply, BIAL shall provide SEPRACOR with such assistance and any BIAL
Know-How Controlled by BIAL, as reasonably necessary for manufacturing, formulating and/or packaging of the BIA 2-093 Product including, without limitation,
[**] to which BIAL has no reasonable objection. In connection with the foregoing, SEPRACOR shall be [**].

	(c)
	In
connection with such technology transfer pursuant to (i) above, SEPRACOR shall have a non-exclusive right and license under the License Agreement and the Supply
Agreement to manufacture or have manufactured the BIA 2-093 Product in or outside of the Territory for sale, promotion and importation in the Field solely in the Territory (the
"Non-Exclusive Manufacturing License"). In connection with a technology transfer pursuant to (ii), SEPRACOR shall have such Non-Exclusive Manufacturing License only upon the
Parties' mutual written agreement on whether (A) BIAL shall supply the BIA 2-093 active pharmaceutical ingredient to SEPRACOR (in which case the technology transfer shall be limited
to the formulation of the BIA 2-093 active pharmaceutical ingredient into finished product), or (B) SEPRACOR shall manufacture the API and finished product. In connection with a
technology transfer pursuant to (iii) and (iv) above, SEPRACOR shall have a Non-Exclusive Manufacturing License solely for the duration of the Force Majeure event or the
duration of the Inability to Supply and until BIAL resumes such supply; provided, however, that if SEPRACOR has entered into an arrangement with a Third
Party to supply the BIA 2-093 Product, BIAL will [**] termination fees associated with the termination of such Third Party arrangement as a result of BIAL resuming
such supply; provided, further, that SEPRACOR will use Commercially Reasonable Efforts to minimize such costs, expenses and termination fees. In
connection with a technology transfer pursuant to (v) above, SEPRACOR shall not have any right or license to manufacture or have manufactured the BIA 2-093 Product until such time
as there is an actual uncured material breach of the Supply Agreement, a Force Majeure event or Inability to Supply, at which time SEPRACOR's rights under this Section 9(c) with respect to such
an event will apply. 

4

 

	(d)
	In
connection with a technology transfer pursuant to (i), BIAL shall be [**] costs and expenses incurred in connection with such technology transfer, including
FTE costs, out-of-pocket expenses and any technology transfer fees payable to any other Third Party (collectively, "Technology Transfer Costs"). In connection with a technology
transfer pursuant to (ii), [**] the Technology Transfer Costs. In connection with a technology transfer pursuant to (iii) and (iv) above,
[**]; provided, however, [**]. In connection with a technology transfer pursuant to (v), SEPRACOR shall
pay to BIAL its Technology Transfer Costs; provided, however, if there is an actual uncured material breach of the Supply Agreement, a Force Majeure
event or Inability to Supply, BIAL will reimburse SEPRACOR for the Technology Transfer Costs if required under this Section 9(d).

	(e)
	In
any of the situations described in items (i), (iii), (iv) and (v) of Section 9(b), a [**] royalty shall be negotiated in good
faith between the Parties and, absent such agreement, determined by one arbitrator in accordance with the provisions of Section 16.1 of the License Agreement. In the situation described in
Section 9(b)(ii), the provisions of Section 4.3 of the License Agreement shall apply.

	(f)
	An
"Inability to Supply" shall mean BIAL's failure for any reason within BIAL's reasonable control, to supply SEPRACOR with
[**] percent ([**]%) of the quantities of the Finished Products ordered by SEPRACOR for [**] orders.

	10.
	Launch Supply.    At or prior to the date which is [**] after the filing of an NDA for the BIA
2-093 Product, BIAL shall have the capability to meet SEPRACOR's forecasted demand for a minimum of [**] following the first commercial sale of such Product.

	11.
	Shelf Life.    BIAL shall use Commercially Reasonable Efforts to: (i) ensure that the shelf life of the BIA
2-093 Product submitted with the NDA for the BIA 2-093 Product shall be no less than [**], and (ii) perform stability studies to increase such
shelf life to up to [**] once real time stability is available.

	12.
	Safety Stock.    The Parties shall each [**] supply of stock of BIA 2-093 Product.

	13.
	Product Image.    Subject to Section 2.a, SEPRACOR shall determine the product image.

	14.
	Other Standard Terms.    The Supply Agreement will also contain other provisions customary for agreements of this nature
addressing the effect of termination, annual and for cause visitation and other audit of manufacturing facilities, representations and warranties, insurance, confidentiality and indemnification, which
will be in terms substantially similar to those contained in the License Agreement. 

        To
confirm that SEPRACOR agrees that the terms set forth above will be incorporated into any Supply Agreement negotiated by the Parties pursuant to Section 4.2 of the License
Agreement, we ask 

5

 

that
SEPRACOR sign, date and return the original of this letter to BIAL along with the two executed originals of the License Agreement. 

	 	 	Sincerely,
	

 	
 	

/s/ Isabel Morgado    /s/ José Redondo
	 	 	
 Isabel Morgado    José Redondo

Members of the Board

BIAL—PORTELA & Ca, S.A.

	 

	Agreed and Accepted:

SEPRACOR INC.	 	 
	By:	 	/s/ Adrian Adams	 	 
	 	 	
	 	 
	Title:	 	President and CEO	 	 
	 	 	
	 	 
	Date:	 	December 31, 2007	 	 
	 	 	
	 	 

6

 
EXHIBIT A
 Primary Packaging BIA 2-093  

[**] 

7

QuickLinks

Exhibit 10.43

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00137-of-00352.parquet"}]]