Document:

EXCLUSIVE
      LICENSE AGREEMENT

    

    This
      Exclusive License Agreement (the “Agreement”), dated as of 15th
      day of
      February 2007 (the “Effective Date”), is entered into by and between Pfizer
      Inc., a Delaware corporation and Pfizer Products, Inc., a Connecticut
      corporation (hereinafter collectively defined as “Licensor”), and InSite Vision
      Incorporated, a Delaware corporation (“Licensee”).

     

    WHEREAS,
      Licensee desires to obtain from Licensor, and Licensor wishes to grant to
      Licensee, an exclusive, royalty bearing license under certain patents as more
      particularly set forth below.

     

    THEREFORE,
      Licensor and Licensee agree as follows:

     

    1.    Definitions.

    

    a.  “Affiliate”
      shall mean any person, corporation, or business entity that directly or
      indirectly controls, is controlled by, or is under common control with a Party.
      As used herein, “control” means ownership or other beneficial interest in 50% or
      more of the voting stock or other voting interest of a corporation or other
      business entity, or the ability to direct an entity’s affairs or actions.

    

    b.  “Business
      Day” means a day that is not a Saturday, Sunday or a day on which banking
      institutions in New York, New York, United States of America are authorized
      or
      obligated by law or executive order to close.

    

    c.  “Confidential
      Information” means all trade secrets or other proprietary information, including
      without limitation any proprietary data and materials (whether or not patentable
      or protectable as a trade secret), regarding a party’s technology, products,
      business or objectives or regarding the Licensed Product, including without
      limitation the terms of this Agreement. Notwithstanding the foregoing, there
      shall be excluded from the foregoing definition of Confidential Information
      any
      of the foregoing that:

    

    (i)  was
      known
      by the receiving party or its Affiliates prior to its date of disclosure to
      the
      receiving party as shown by the receiving party’s written records;
      or

    

    (ii)  either
      before or after the date of the disclosure to the receiving party is lawfully
      disclosed to the receiving party or its Affiliates by a Third Party not in
      violation of any obligation to the disclosing party; or

     

     

    
      
        
        

      

      
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    (iii)  either
      before or after the date of the disclosure to the receiving party becomes
      published or generally known to the public through no fault or omission on
      the
      part of the receiving party or its Affiliates; or

    

    (iv)  is
      independently developed by or for the receiving party or its Affiliates without
      reference to or reliance upon the Confidential Information as demonstrated
      by
      contemporaneous written records of the receiving party; or 

    

    (v)  is
      required to be disclosed by the receiving party to comply with applicable laws
      or to comply with governmental regulations or the regulations or requirements
      of
      any internationally-recognized stock exchange including the NASDAQ, provided
      that the party required to make such disclosure provides prior notice of such
      disclosure to the other party (and takes reasonable and lawful actions to avoid
      or minimize the degree of such disclosure).

    

    d.  “First
      Commercial Sale” shall mean the first sale of a Licensed Product to a Third
      Party after the first regulatory approval of a Licensed Product by the U.S.
      Food
      and Drug Administration or foreign counterpart.

    

    e.  “Licensed
      Patents” shall mean United States Patent No. 6,861,411 and [***]
      and
      the
      foreign counterpart patents and patent applications thereof as well as the
      specific patents and patent applications identified in Exhibit A hereto,
      together with any reissues, extensions or supplementary protection certificates,
      including continuations, divisions or continuation in-part
      applications.

    

    f.  “Licensed
      Products” shall mean the ocular anti-infective product candidate known as
      AzaSiteTM
      or
      ISV-401, containing azithromycin as its sole active ingredient, and
      AzaSiteTM
      Plus or
      ISV-502, an ocular anti-infective product candidate containing azithromycin
      and
      dexamethasone as its sole active ingredients or other ophthalmic products agreed
      to by both parties.

    

    g.  “Licensor”
      shall mean Pfizer Inc as holder of the United States Licensed Patent and Pfizer
      Products Inc as holder of the foreign counterpart patents thereto and all
      references to Licensor shall be construed jointly to mean both companies or
      individually to mean either company where the context requires.

    

    h.  “Net
      Sales” shall mean the gross amount of Licensed Products invoiced by Licensee,
      any Sublicensee, or any Affiliate of Licensee or any Sublicensee, less sales
      returns, and allowances actually paid, granted or accrued, including trade,
      quantity and cash discounts, chargebacks, rebates, and customary trade discounts
      actually taken, outbound freight, value added tax, sales or use taxes, and
      custom or excise duties. Net sales shall be determined from the books and
      records or Licensee, Sublicensee or the applicable Affiliate of either Licensee
      or a Sublicensee, as maintained in accordance with U.S. generally accepted
      accounting principles consistently applied.

    
      

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

    

    
 

    
      
        
        

      

      
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    i.  “Sublicensee”
      shall mean any Third Party to whom Licensee or its Affiliates has granted a
      sublicense, or other rights, under the Licensed Patents. 

    

    j.  “Territory”
      shall mean the entire world.

    

    k.  “Third
      Party” shall mean all persons and companies other than Licensor, Licensee, and
      their respective Affiliates. 

    

    2.    License
      Grant; Exclusivity.

    

    a. Licensor
      hereby grants Licensee, and Licensee accepts from Licensor, an exclusive,
      royalty bearing license under the Licensed Patents to make, have made, use,
      sell, offer for sale, import and make regulatory filings with respect to
      Licensed Products in the Territory and export components of Licensed Products
      from any country in the Territory for the purpose of making Licensed Products
      outside that country, but not to the extent that such components are covered
      by
      Pfizer patents other than Licensed Patents, together with the right to grant
      sublicenses subject to Section 2(b). 

    

    b. Licensee
      and its Affiliates shall have the right to grant sublicenses to any of the
      rights granted to Licensee under Section 2(a), subject to Licensee’s prior
      approval in each instance, such approval not to be unreasonably delayed,
      withheld or conditioned. 

    

    c. Licensee
      shall notify Licensor in writing within ten (10) business days of entering
      into
      any agreement with a Sublicensee or any agreement whereby a Third Party acquires
      all or substantially all of the assets of Licensee or the right through
      assignment or sublicense to development or commercialize Licensed Products,
      and
      shall with such notification provide Licensor with full and complete copies
      of
      any such agreement, which agreements Licensor shall maintain confidential
      pursuant to Section 11 of this Agreement. 

    

    3.    Royalties
      and Payments.

    
      

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

    

    
 

    
      
        
        

      

      
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    In
      consideration of the license granted under this Agreement, Licensee shall pay
      Licensor [***]
      of
      Net
      Sales of Licensed Products in each country in the Territory in which a Licensed
      Patent is in force. 

     

    
      	
              4.

            	
              Reports
                and Payments.

            

    

    

    a. Within
      thirty (30) days after the conclusion of each calendar quarter commencing with
      the calendar quarter in which the First Commercial Sale of a Licensed Product
      occurs, Licensee shall submit to Licensor a written report for such quarter
      stating, to the extent applicable:

    

    i. Total
      amounts invoiced for Licensed Products, broken down by Licensed Product, the
      entity rendering such invoice, and the country in the Territory in which such
      sales were made, and showing the details of all deductions taken as part of
      the
      calculation of Net Sales; and

    

    ii. A
      calculation of the amounts due to Licensor.

    

    b. Simultaneously
      with the submission of each such report, Licensee shall make payment to Licensor
      of the amount due. Each payment hereunder shall be made by electronic transfer
      in immediately available funds via either a bank wire transfer, an ACH
      (automated clearing house) mechanism, or any other means of electronic funds
      transfer, at Licensee’s election, to the bank account set out below or to such
      other bank account as Licensor shall designate in a notice at least five (5)
      Business Days before the payment is due.

    

    Bank:  [***]

    Swift
      Code:
      [***]  

    Account
      Name: [***]  

    Account
      #: [***]  

    

    Licensee
      also agrees to use best efforts or cause any Sublicensee or the applicable
      Affiliate of either Licensee or any Sublicensee to use best efforts to provide
      estimated monthly net sales of Licensed Products sufficient for Pfizer to record
      royalties in the period earned in accordance with US GAAP and to meet SEC
      reporting requirements.

    
      

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

    

    
 

    
      
        
        

      

      
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    c. Licensee
      shall maintain at its principal office usual books of account and records
      showing its actions under this Agreement. Upon reasonable notice, and at
      Licensor’s sole cost and expense, such books and records shall be open to
      inspection and copying not more than once per year, during usual business hours,
      by an independent certified public accountant to whom Licensee has no reasonable
      objection, for three years after the calendar quarter to which they pertain,
      for
      purposes of verifying the accuracy of the amounts paid by Licensee under this
      Agreement. The determination of such certified public accountant shall be
      binding on the parties save for instances of manifest error. Any understatement
      of payments due to Licensor shall be made by Licensee within ten (10) business
      days after demand by Licensor. Any overstatement of payment due shall be
      credited against the next payment due to Licensor under Section 4 hereof. In
      the
      event that such review reveals that any payment to Licensor was understated
      by
      more than 5%, Licensee shall also pay, within ten (10) business days after
      demand by Licensor, the reasonable cost of such review. Each agreement with
      a
      Sublicensee shall contain analogous provisions that also allow Licensee to
      conduct audits of the Sublicensee. Upon reasonable request by Licensor, Licensee
      shall permit an independent accounting firm selected by Licensor to conduct
      audits of the Sublicensee on Licensor’s behalf. 

     

    d. All
      payments due under this Agreement shall be made in U.S. dollars. Payments
      arising from transactions conducted in currency other than U.S. dollars shall
      first be determined in such currency and then converted to U.S. dollars using
      the average exchange rates for the month in which the transactions occurred,
      as
      published by the U.S. Federal Reserve in Federal Reserve Statistical Release
      G5
      - Foreign Exchange Rates (http://www.federalreserve.gov/releases/G5).
      If the
      average exchange rate for a currency is not published by the Federal Reserve,
      conversion shall be made based on the average mid closing rate of exchange
      quoted by Bloomberg (or its successor) for the same time period.

    

    e. Any
      payments made under Section 4 of this Agreement are exclusive of any VAT or
      similar tax imposed upon such payments. The parties agree to co-operate with
      one
      another and use reasonable efforts to avoid or reduce withholding tax or similar
      obligations is respect of any royalties, however, in the event any of the
      payments made by Licensee pursuant to Section 4 become subject to
      withholding taxes under the laws of any jurisdiction, Licensee shall deduct
      and
      withhold the amount of such taxes for the account of Licensor to the extent
      required by law, such amounts payable to Licensor shall be reduced by the amount
      of taxes deducted and withheld, and Licensee shall pay the amounts of such
      taxes
      to the proper governmental authority in a timely manner and promptly transmit
      to
      Licensor an official tax certificate or other evidence of such tax obligations
      together with proof of payment from the relevant governmental authority of
      all
      amounts deducted and withheld sufficient to enable Licensor to claim such
      payment of taxes. Licensee will provide Licensor with reasonable assistance
      to
      enable Licensor to recover such taxes as permitted by law.

    
       

    

     

    
      
        
        

      

      
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    f. All
      payments under any provision of this Agreement shall bear interest from the
      date
      due until paid at a rate equal to three percentage points above the prime rate
      of Citibank, N.A. (or its successor) in New York, New York, as announced on
      the
      date such payment was due, compounded monthly. In addition, Licensee shall
      reimburse Licensor for all reasonable costs and expenses, including without
      limitation reasonable attorneys’ fees and legal expenses, incurred in the
      collection of late payments.

    

    5.    Diligence.
      

    

    Licensee
      shall use reasonable commercial efforts, either itself or in collaboration
      with
      a Sublicensee, to seek regulatory approval for and market Licensed Products
      in
      countries in the Territory in which a Licensed Patent is in force.

    

    
      	
              6.

            	
              Representations
                and Warranties; Disclaimer of Warranties; Limitations of
                Liability.
                

            

    

     

    a. Each
      party represents and warrants to the other that, as of the date
      hereof:

     

    (i) it
      is
      duly organized and validly existing under the laws of its state of
      incorporation, and has full corporate power and authority to enter into this
      Agreement and to carry out the provisions hereof;

     

    (ii) it
      is
      duly authorized to execute and deliver this Agreement and to perform its
      obligations hereunder, and the person or persons executing this Agreement on
      its
      behalf has been duly authorized to do so by all requisite corporate action;
      and

     

    (iii) once
      executed by an authorized officer, this Agreement is legally binding upon it
      and
      enforceable in accordance with its terms.

     

    b. Licensee
      represents and warrants as of the date hereof that there are no pending or
      threatened claims, nor has it previously received any claims, alleging that
      use
      of a Licensed Product has resulted in death or bodily harm.

    
       

    

    
 

    
      
        
        

      

      
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    c. Nothing
      in this Agreement shall be construed as a warranty or representation by Licensor
      as to the validity or enforceability of any Licensed Patent or that Licensed
      Products are or shall be free from infringement of domestic or foreign patents
      or other proprietary interests (including copyright) of any Third Party.
      LICENSOR IS LICENSING THE LICENSED PATENTS TO LICENSEE ON AN "AS
      IS"
      BASIS.
      LICENSOR MAKES NO WARRANTIES EITHER EXPRESS OR IMPLIED OF ANY KIND, AND HEREBY
      EXPRESSLY DISCLAIMS ANY WARRANTIES, REPRESENTATIONS OR GUARANTEES OF ANY KIND
      AS
      TO THE LICENSED PATENTS, THE SUBJECT OF ANY LICENSE HEREUNDER AND/OR LICENSED
      PRODUCTS, INCLUDING BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY,
      FITNESS, ADEQUACY OR SUITABILITY FOR A PARTICULAR PURPOSE, USE OR RESULT, AND
      ANY WARRANTIES OF FREEDOM OF INFRINGEMENT OF ANY PATENTS, COPYRIGHTS, TRADE
      SECRETS OR OTHER PROPRIETARY RIGHTS. NEITHER LICENSOR, NOR ANY EMPLOYEE OR
      AGENT
      OF LICENSOR, SHALL HAVE ANY LIABILITY TO LICENSEE, ITS AFFILIATES, OR
      SUBLICENSEES, OR ANY OTHER PERSON ARISING OUT OF THE USE OF LICENSED PATENTS
      OR
      LICENSED PRODUCTS INCLUDING BUT NOT LIMITED TO THE LACK OF MERCHANTABILITY,
      INADEQUACY OR UNSUITABILITY OF THE LICENSED PATENTS OR LICENSED PRODUCTS FOR
      ANY
      PARTICULAR PURPOSE OR TO PRODUCE ANY PARTICULAR RESULT, OR FOR ANY LATENT
      DEFECTS THEREIN.

    

    c. In
      no
      event shall Licensor be liable to Licensee, its Affiliates, or Sublicensees
      for
      any loss or damages, consequential, incidental, indirect or otherwise,
      including, but not limited to time, money, or goodwill, arising from the use,
      operation or application of the Licensed Patents.

    

    7.    
      Prohibition
      Against Use of Licensor’s Name and Trademarks.
      

    

    a. Except
      as
      may be required by law or regulation, or in connection with factual reports
      of
      its license and sublicensing rights hereunder, Licensee shall not use the name,
      insignia, or symbols of Licensor for any purpose whatsoever without Licensor's
      prior written consent.

    

    b. No
      rights
      are granted under this Agreement by Licensor to Licensee to the use of
      Licensor’s registered trademark Zithromax, or any other trademark confusingly
      similar thereto, and all rights to that trademark are expressly reserved by
      Licensor.

    

    8.    Patent
      Prosecution, Maintenance and Infringement.

    
       

    

    
 

    
      
        
        

      

      
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    a. Licensor
      shall have the right to control the prosecution and maintenance of the Licensed
      Patents. Licensor shall provide Licensee with copies of all material
      correspondence and communications filed with or received from a patent office
      in
      connection with prosecution and maintenance of the Licensed Patents, and shall
      receive and consider in good faith suggestions and comments from Licensee on
      prosecution matters. Licensee shall reimburse Licensor for invoiced expenses
      incurred following the Effective Date of this Agreement in filing, prosecuting
      and maintaining Licensed Patents, including attorneys’ fees, the costs of any
      interference proceedings, reexaminations, or any other ex parte or inter partes
      administrative proceeding before patent offices, taxes, annuities, issue fees,
      working fees, maintenance fees and renewal charges, with payment from Licensee
      to Licensor for such reimbursements due ten (10) business days following an
      invoice from Licensor to Licensee for such expenses. The reimbursement
      obligation in the proceeding sentence is limited to a maximum of USD [***]
      in
      the aggregate during the term of this Agreement. If Licensee declines to pay
      Licensor for such amounts for Licensed Patents a particular country, its license
      under the Licensed Patents in such country shall terminate. Any prosecution
      costs as described above in excess of the [***] aggregate limit, shall be the
      Licensor’s obligation without disturbance to the rights granted to the Licensee
      under this Agreement. Licensor shall notify Licensee if it elects to abandon
      the
      prosecution of any patent application or maintenance of any patent within the
      Licensed Patents in any country in the Territory at least 30 days prior to
      the
      date on which such application or patent will lapse or go abandoned. Licensee
      shall then have the option, exercisable upon written notice to Licensor, to
      assume full responsibility, at Licensee’s discretion, cost and expense, for
      prosecution of such application or maintenance of such patent in such country.
      The exercise by the Licensee of this options shall not affect any other
      provision of this Agreement, including the obligation to make payments in
      Section 3, all of which remain in full force and effect.

    

    b. Licensor
      shall have the right, but not the obligation, to enforce the Licensed Patents
      and prosecute infringers at its own expense when in its sole judgment such
      action may be reasonably necessary, proper, and justified.

    

    c. If
      Licensee shall have supplied Licensor with written evidence reasonably
      demonstrating the likely infringement or future infringement of a claim of
      a
      Licensed Patent by a Third Party selling products in competition with Licensee
      or any of its Affiliates or Sublicensees, Licensee may by notice request that
      Licensor take steps to assert the Licensed Patent against such Third Party.
      Unless
      Licensor shall within ninety (90) days of the receipt of such notice either:
      (i)
      cause such infringement to terminate or (ii) initiate legal proceedings against
      the infringer, Licensee may, upon notice to Licensor, initiate legal proceedings
      against the infringer at the sole expense of Licensee, provided however, that
      if
      the evidence that Licensee shall have supplied Licensor relates to the filing
      of
      an Abbreviated New Drug Application (or equivalent regulatory mechanism seeking
      approval for authorization to market a generic equivalent to a Licensed Product,
      an “ANDA”) in any country within the Territory, Licensee may, following
      reasonable notice to Licensor, initiate legal proceedings against the infringer
      at the sole expense of Licensee if delay in initiation of proceedings would
      result in the loss of rights or other material consequences pursuant to 28
      U.S.C. § 355(j)(5)(B)(iii) or other similar statute, rule, or regulation. If
      Licensee requests Licensor to commence or to join in any litigation for legal
      purposes, Licensor agrees to do so at Licensee’s sole cost and
      risk.

    
      

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

    

    
 

    
      
        
        

      

      
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    d. Except
      as
      otherwise agreed to by the parties as part of a cost sharing arrangement, any
      recovery
      realized as a result of assertion of a Licensed Patent against an infringer,
      after reimbursement of any litigation expenses of each party, shall
      be
      treated as though it were Net Sales under this Agreement.

    

    e. In
      the
      event one party shall initiate or carry on legal proceedings to enforce any
      Licensed Patent against an alleged infringer, the other party shall reasonably
      cooperate with and supply all assistance reasonably requested by the party
      initiating or carrying on such proceedings. The party that institutes any
      proceeding to protect or enforce a Licensed Patent shall be responsible for
      the
      reasonable expenses incurred by said other party in providing such assistance
      and cooperation as is requested pursuant to this paragraph. In no event shall
      Licensee or Licensor settle any action or claim hereunder without the
      other’s written
      consent where (i) such settlement would include any admission on the issues
      of
      patent validity, patent infringement or enforceability or any liability on
      the
      part of the other, (ii) such settlement would impose any restrictions on the
      other’s conduct of its activities, or (iii) such settlement would not include an
      unconditional release of the other from all liability of all claim(s) that
      are
      the subject matter of the settled action or claim.

    

    f. For
      the
      avoidance of doubt, (i) nothing in this Agreement shall be deemed to grant
      Licensee the right to control or direct prosecution of, or legal proceedings
      on,
      any patent or patent application owned by Licensor that is not a Licensed
      Patent, or to grant Licensee a license or other rights in or to any such other
      patent or patent application, and (ii) nothing in this Agreement shall be deemed
      to grant Licensor the right to control or direct prosecution of, or legal
      proceedings on, any patent or patent application owned by Licensee or its
      Affiliates, or to grant Licensor a license or other rights in or to any such
      other patent or patent application.

    

    g. Licensee
      and its Affiliates shall not directly or indirectly challenge or induce any
      third party to challenge the validity or enforceability of the Licensed Patents,
      or any patent claim(s) therein, or initiate or participate in any re-examination
      or other proceeding related to the validity, enforceability or patentability
      of
      any claim of the Assigned Patents before any tribunal or patent office. This
      section shall not prohibit Licensee and its Affiliates from responding to a
      subpoena, process, or discovery requests in any litigation or administrative
      proceeding provided that Licensee gives prompt notice to Licensor of the receipt
      of said subpoena, process or discovery requests. Licensee shall procure that
      any
      Sublicensee shall agree to a provision in substantially the same terms as
      contained in this Section.

    
      

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

    

    
 

    
      
        
        

      

      
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    h. Licensee
      agrees within [***]days
      of
      the execution of this Agreement to file [***]
      substantially
      in the form of Exhibit
      B
      to this
      Agreement. Neither Licensor nor Licensee shall seek any award of fees or costs
      in the [***].If
      reasonably necessary or if required by [***],
      the
      parties shall modify the form and content of Exhibit
      B
      to the
      extent necessary to effect properly the [***].

    

    i. Pfizer
      will take all necessary steps to [***].

    

    9.     Indemnity
      and Insurance.

    

    a. Licensee
      shall indemnify and hold Licensor harmless against any and all third-party
      actions, suits, claims, demands, prosecutions, including, without limitation,
      those resulting from a Third Party claim for death or bodily harm arising in
      connection with use of a Licensed Product, and all resulting liabilities, costs,
      expenses, damages, deficiencies, loss or obligations (including reasonable
      attorneys’ fees) based on or arising out of this Agreement, including, without
      limitation, (i) the development, manufacture, packaging, use, or sale of
      Licensed Products, even if the Licensed Products are altered for use for a
      purpose not intended, (ii) the use of Licensed Patents by Licensee, its
      Affiliates, its Sublicensees or its (or their) customers and (iii) any
      representation made or warranty given by Licensee, its Affiliates or
      Sublicensees with respect to Licensed Products or Licensed Patents. Licensee
      shall reimburse Licensor for any out-of-pocket costs incurred by Licensor in
      enforcing this Section 9(a).

    

    b. Licensee
      shall maintain, and shall cause each Sublicensee to maintain during the term
      of
      this Agreement, commercial general liability insurance, including product
      liability insurance, with reputable and financially secure insurance carriers,
      on commercially reasonable and prudent terms and limits.

    

    10.     Patent
      Marking.
      

    
      

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

    

    
 

    
      
        
        

      

      
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    To
      the
      extent required by and in conformance with any applicable laws, Licensee shall
      mark Licensed Products, and shall cause its Sublicensees to mark Licensed
      Products, with the numbers of the applicable Licensed Patents.

     

    11.   Confidentiality
      and Publicity.

    

    a. Confidentiality.
      The
      parties agree that during the term of the licenses granted hereunder, a party
      receiving Confidential Information of the other party will (a) maintain in
      confidence such Confidential Information to the same extent such party maintains
      its own proprietary industrial information of similar kind and value, (b) not
      disclose such Confidential Information to any Third Party without prior consent
      of the other party (other than as may be required by law, regulation, or
      judicial process, in which case all reasonable efforts shall be made to limit
      the extent of disclosure or to make disclosure only under a confidentiality
      order), provided that disclosure to a Sublicensee is permitted where the
      Sublicensee has agreed to confidentiality obligations no less stringent than
      contained in this Agreement and (c) not use such Confidential Information for
      any purpose except those permitted by this Agreement, except that a party may
      disclose this Agreement and its terms (i) as may be necessary to implement
      such
      terms, (ii) as may be required by law, regulation, or judicial process, in
      which
      case the other party will be given ten (10) days’ prior written notice of such
      disclosure and all reasonable efforts shall be made to limit the extent of
      disclosure or to make disclosure only under a confidentiality order), or (iii)
      in connection with due diligence disclosures related to a possible acquisition,
      divestiture, merger, consolidation, substantial asset transfer, formation of
      a
      joint venture, or similar transaction, but only pursuant to a written
      confidentiality agreement with the recipient.

    

    b. Publicity.
      The
      public announcement of the execution of this Agreement is set forth in
Exhibit
      C
      attached
      hereto and may be promptly disseminated following the execution of this
      Agreement by any party. Except for such announcement, no party may make a public
      statement or disclosure (written or oral), including in analyst meetings,
      concerning the terms of this Agreement without the other party’s prior written
      consent, except where such statement is required by applicable law, stock
      exchange rule, or legal proceedings. In the case of any such required public
      statement or disclosure pursuant to the immediately preceding sentence, the
      party required to make such statement or disclosure shall (i) endeavor to obtain
      confidential treatment of economic and trade secret information; (ii) include
      in
      such statement or disclosure only the information that, after consultation
      with
      counsel, such party believes is required by applicable law to be disclosed
      and
      (iii) provide the other party with a copy of such statement sufficiently in
      advance of dissemination so that the other party will have the opportunity
      to
      comment upon the statement, and shall give due consideration to any comments
      of
      the other party in the final statement.

     

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
12.          Export
      Control Laws.

    

    This
      Agreement is made subject to any restrictions concerning the export of products
      or technical information from the United States of America which may be imposed
      from time to time by the government of the United States of America. Licensee
      agrees that it shall not export or re-export, directly or indirectly, Licensed
      Products, any technical information acquired from Licensor, or any products
      using such technical information to any country for which the United States
      government or any agency thereof at the time of export requires an export
      license or other governmental approval, without first obtaining the written
      consent to do so from the Department of Commerce or other agency of the United
      States government when required by an applicable statute or regulation.

     

    

    13.         
      Breach
      and Cure.

    

    Either
      party shall have the right to cure its material breach. The cure shall be
      effected within [***] after notice of any breach given by the non-breaching
      party, or [***] days in the event of a payment obligation.

    

    14.          Term
      of Agreement.

    

    a. This
      Agreement shall be effective as of the date first set forth above and shall
      continue in full force and effect until its expiration or termination in
      accordance with this Section 14. 

    

    b. Unless
      terminated earlier under any provision of this Agreement, the term of the
      licenses granted hereunder shall extend, on a country-by country basis, until
      the date of expiration of the last to expire of the Licensed Patents in such
      country, at which time the licenses granted hereunder for such country shall
      become fully paid-up.

    

    c. This
      Agreement may be terminated by Licensor: (i) upon written notice to Licensee
      for
      its material breach of this Agreement and failure to cure such material breach
      in accordance with Section 13; or (ii) should Licensee, become bankrupt or
      insolvent, file a petition under any bankruptcy or insolvency act or have any
      such petition filed against it; or (iii) should Licensee or any Sublicensee
      challenge the validity or enforceability of the Licensed Patents notwithstanding
      the prohibition against such challenge as provided in Section 8(g).

    
      

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

    

    
 

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    d. This
      Agreement may be terminated by Licensee: (i) upon written notice to Licensor
      for
      its material breach of this Agreement and failure to cure such material breach
      in accordance with Section 13; or (ii) should Licensor become bankrupt or
      insolvent, file a petition under any bankruptcy or insolvency act or have any
      such petition filed against it. 

    

    e. The
      provisions of Sections 4(c) (Audit), 6 (Representations and Warranties),
      9 (Indemnity and Indemnification), 11 (Confidentiality), and, 20 (Governing
      Law and Jurisdiction), as well as any other Sections or defined terms referred
      to in such Sections or necessary to give them effect shall survive termination
      or expiration of this Agreement and remain in force until discharged in full.
      Furthermore, any other provisions required to interpret and enforce the parties’
rights and obligations or to wind up their outstanding obligations under this
      Agreement shall survive to the extent required.

    

    15.   Notices.
      

    

    Any
      notice required or permitted to be given under this Agreement shall be
      sufficient if in writing and shall be considered given: (i) when mailed by
      certified mail (return receipt requested), postage prepaid, (ii) when deposited
      with a reputable overnight courier (e.g., FedEx, DHL, UPS), or (iii) on the
      date
      of actual delivery by hand or overnight delivery, with receipt acknowledged,
      or
      to such other address as a party may specify by notice hereunder.

    

      
        	 	
                if
                  to Licensor, to:

              	 	
                Pfizer
                  Inc. and Pfizer Products Inc.

              
	 	 	 	
                235
                  East 42nd
                  Street

              
	 	 	 	
                New
                  York, New York 10017-5755

              
	 	 	 	
                USA
                  

              
	 	 	 	 
	 	 	 	
                Attn:General
                  Counsel

              
	 	
                 

              	 	 
	 	 	 	 
	 	
                if
                  to Licensee, to:

              	 	
                InSite
                  Vision Incorporated

              
	 	 	 	
                965
                  Atlantic Avenue

              
	 	 	 	
                Alameda,
                  California 94501

              
	 	 	
                 

              	
                Attn:
                  Chief Executive Officer

              

      

       

       

      
        
          	
                  *Indicates
                    that certain information contained herein has been omitted and
                    filed
                    separately with the Securities and Exchange Commission. Confidential
                    treatment has been requested with respect to the omitted
                    portions.

                

        

        
 

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      
        	 	 	 	 
	 	
                copy
                  to:

              	 	
                O’Melveny
                  & Myers LLP

              
	 	 	 	
                2765
                  Sand Hill Road

              
	 	 	 	
                Menlo
                  Park, California 94025

              
	 	 	 	
                Attn:
                  Tim Curry, Esq.

              

      

    

    

    16.   Assignment.
      

    

    a. Neither
      Agreement nor any rights or obligations hereunder may be assigned by Licensee
      without Licensor’s written consent; except only notice (and not consent) shall
      be required for Licensee to assign to (i) an Affiliate provided that Licensee
      shall remain jointly and severally liable with such Affiliate in respect of
      all
      obligations so assigned and such Affiliate has acknowledged in writing that
      it
      shall be bound by this Agreement as if it were a party hereto, (ii) any
      successor in interest by way of merger, acquisition or sale of all or
      substantially all of the assets of Licensee related to the subject matter hereof
      provided that such successor agrees in writing to be bound by the terms of
      this
      Agreement as if it were the Licensee. Any attempt to assign without compliance
      with this provision shall be void.

    

    b. This
      Agreement and any rights or obligations hereunder may be assigned by Licensor
      provided that Licensor provides Licensee with notice of such
      assignment.

    

    17.   Waiver.
      

    

    The
      failure of any party to insist upon strict adherence to any term of this
      Agreement on any occasion shall not be considered a waiver or deprive that
      party
      thereafter of the right to insist upon strict adherence to that term or any
      other term of this Agreement. All waivers must be in writing and signed by
      an
      authorized representative of the party against which such waiver is being
      sought.

     

    

    18.   No
      Agency or Joint Venture.
      

    

    Licensee
      is not an agent, joint venturer, or partner of Licensor, and the parties have
      not created and do not intend to create an agency, joint venture, or partner
      relationship.

     

    19.   Entire
      Agreement; Amendment.
      

    
      
         

      

      

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

    

     

    This
      Agreement sets forth the entire agreement between the parties concerning the
      subject matter hereof and supersedes all previous agreements, written or oral,
      concerning such subject matter including the Confidentiality Agreement between
      the parties and Inspire Pharmaceuticals, Inc. dated January 12, 2007. This
      Agreement may be amended only by written agreement duly executed by the
      parties.

     

    20.   Governing
      Law.
      

     

    This
      Agreement shall be governed by New York law applicable to agreements made and
      to
      be performed exclusively in the State of New York. Any dispute related to or
      arising out of this Agreement or the parties’ relationship hereunder shall be
      heard only in the state or federal courts located in New York County, New York,
      and the parties, their successors and assigns consent and submit to the
      jurisdiction of such courts for such purpose.

     

    
      21.   No
        Third Party Beneficiary.
        

    

     

    None
      of
      the provisions of this Agreement shall be for the benefit of or enforceable
      by
      the Third Party, including any creditor of either party. No such Third Party
      shall obtain any right under any provision of this Agreement or shall by reasons
      of any such provision make any claim in respect of any debt, liability or
      obligation (or otherwise) against either party.

     

    
      22.   Binding
        Effect.

    

     

    This
      Agreement shall be binding upon and inure to the benefit of the parties hereto
      and their respective heirs, successors and permitted assigns.

    
      
         

      

      

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    

    
       

      23.   Counterparts.

    

     

    This
      Agreement may be executed in any two or more counterparts, each of which, when
      executed, shall be deemed to be an original and all of which together shall
      constitute one and the same document.

     

    
      24.         
        Headings.
        

    

     

    Headings
      in this Agreement are included herein for ease of reference only and shall
      have
      no legal effect. 

    

    
      25.         
        Severability.

    

     

    If
      and
solely
      to
      the extent that any provision of this Agreement shall be deemed invalid or
      unenforceable by a court or other governmental entity, such offending provision
      shall be of no effect and shall not affect the validity of the remainder of
      this
      Agreement or any of its provisions; provided, however, the parties shall use
      their respective reasonable efforts to renegotiate the offending provisions
      to
      best accomplish the original intentions of the parties. 

    
      
         

      

      

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

    

    

    IN
      WITNESS THEREOF,
      Licensor and Licensee have caused this Agreement to be executed by their duly
      authorized representatives as of the day and year first written
      above.

    

    

    PFIZER
      INC

    

    

    By:____________________________

    

    

    

    PFIZER
      PRODUCTS INC

    

    By:____________________________

     

    

    

    INSITE
      VISION, INCORPORATED

    

    By:____________________________
      

     

    

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    The
      Licensed Patents

    

    
      	
              Docket
                (PC #) [***] 

              Descriptive
                Title:     compositions
                for treating ocular infections 

              Patent
                Title:     METHOD
                OF TREATING EYE INFECTI ONS WITH AZITHROMYCIN

            

    

    

    
      	
              Country
                   Status    App
                Number   Patent
                       Filing      

              [***]    

               

            

    

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    
 

    EXHIBIT
      B

    

    [***] 

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      C

    

    InSite
      Vision Announces Patent Agreement with Pfizer

    

    

    ALAMEDA,
      Calif. (February X,
      2006)
      --
      (BUSINESS WIRE)--InSite Vision Incorporated (AMEX:ISV) -- an ophthalmic
      therapeutics, diagnostics and drug delivery company, today announced that it
      has
      entered into a worldwide, exclusive royalty bearing licensing agreement with
      Pfizer Inc. (NYSE:PFE) under Pfizer’s Patent family titled “Method of Treating
      Eye Infections with Azithromycin”. Pfizer’s granting of this license will
      enhance the position and marketability of InSite’s AzaSite
      franchise.

    

    S.
      Kumar
      Chandrasekaran, Ph.D., InSite Vision's chief executive officer stated, "The
      execution of the Pfizer license represents a significant milestone in the
      development of InSite Vision's AzaSite franchise. Combined with our existing
      azithromycin and DuraSite drug-delivery patents, this license further broadens
      InSite Vision's global patent portfolio.” 

    

    Under
      the
      terms of the agreement, Pfizer will grant InSite a worldwide, exclusive license,
      including the right to sublicense, to US and all foreign counterparts patents
      on
      the parent case titled “Method of Treating Eye Infections with Azithromycin” and
      patent applications together with any reissues, extensions, or supplementary
      protection certificates of any of the foregoing for use in connection with
      InSite’s AzaSite franchise products.

    

    About
      InSite Vision Incorporated

    

    InSite
      Vision is an ophthalmic company focused on developing therapies that treat
      ocular infections, glaucoma and retinal diseases. InSite Vision’s lead product
      is AzaSite, which targets infections of the eye. AzaSite contains the drug
      azithromycin, a broad-spectrum antibiotic formulated with DuraSite, InSite
      Vision's patented drug-delivery vehicle, which offers the benefit of a
      low-dosing regimen, attractive to both the eye-care patient and physician.
      Pending the approval of its NDA with the FDA, InSite Vision currently expects
      AzaSite to be commercially launched in the United States, while seeking to
      expand this "technology platform" to include additional product candidates
      and
      indications for the worldwide market.

    

    In
      the glaucoma area, InSite Vision continues to focus genomic research on the
      TIGR
      gene, among other genes in its genomic portfolio. A portion of this research
      has
      been incorporated into InSite Vision’s commercially available OcuGene(R)
      glaucoma genetic test for disease management, which is a prognostic tool
      designed to detect a genetic marker (mt-1) in the promoter region of the
      glaucoma-related TIGR gene.

    

    Additional
      information can be found at our website, www.insitevision.com.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    
 

    This
      news release contains, among other things, certain statements of a
      forward-looking nature relating to future events or the future business
      performance of InSite Vision, such as the Company's ability to obtain FDA
      approval of its NDA for AzaSite and the commercialization of the Company’s
      AzaSite product. Such statements entail a number of risks and uncertainties,
      including but not limited to: InSite Vision’s ability to obtain substantial
      additional immediate funding to continue its operations; the results of InSite
      Vision's clinical trials; the ability to obtain FDA approval of its AzaSite
      NDA
      from the FDA for the commercialization of AzaSite and its other product
      candidates; the ability of InSite Vision to enter into a corporate collaboration
      for its AzaSite and other product candidates; the ability to launch AzaSite
      and
      the timing of such a launch; InSite Vision's ability to expand its technology
      platform to include additional indications and patent options; the effects
      of
      its expense control activities on its operations and product development; its
      ability to obtain regulatory approval and market acceptance of its products
      and
      product candidates, including its OcuGene glaucoma genetic test, AzaSite,
      ISV-205 and ISV-014; InSite Vision's ability to maintain and develop additional
      collaborations and commercial agreements with corporate partners, including
      those with respect to AzaSite and ISV-205; its reliance on third parties for
      the
      development, marketing and sale of its products; the initiation and results
      of
      preclinical and clinical studies; its ability to adequately protect its
      intellectual property and to be free to operate with regard to the intellectual
      property of others; determinations
      by the FDA, including those with respect to OcuGene, AzaSite and ISV-205 as
      described in detail in and including the other risks described in InSite
      Vision's filings with the Securities and Exchange Commission, including its
      annual report on Form 10-K and its quarterly reports on Form 10-Q, under the
      caption “Risk Factors” and elsewhere in such reports. Any forward-looking
      statements or projections are based on the limited information currently
      available to InSite Vision, which is subject to change. Although any such
      forward looking statements or projections and the factors influencing them
      will
      likely change, InSite Vision undertakes no obligation to update the information.
      Such information speaks only as of the date of its release. Actual events or
      results could differ materially and one should not assume that the information
      provided in this release is still valid at any later date.

    

    Note
      to Editors: OcuGene(R) is written with a "small cap" G; if doing so is not
      possible, please use an upper case G. InSite Vision Incorporated, InSite Vision,
      DuraSite(R) and OcuGene(R) are trademarks of InSite Vision Incorporated. Other
      trademarks that may be mentioned in this release are the intellectual property
      of their respective owners.

    

    #######

    

    Investor
      Contact:

    Ashton
      Partners

    Barry
      Hutton

    888-857-7839
      

    www.ashtonpartners.com

     

    
      
        
        

      

      
        21EXECUTION
      VERSION

     

    

    
      

      

    

     

    SUPPLY
      AGREEMENT FOR ACTIVE PHARMACEUTICAL INGREDIENT

     

     

    by
      and between

     

     

    INSPIRE
      PHARMACEUTICALS, INC.

     

     

    and

    

     

    INSITE
      VISION INCORPORATED

    

     

    Dated
      as of February 15, 2007

     

    

     

    
      

      

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE
      OF CONTENTS

    Page

      
        	
                ARTICLE
                  1

              	
                DEFINITIONS

              	
                1

              
	 	 	 
	
                ARTICLE
                  2 

              	
                MANUFACTURE
                  AND SUPPLY OF API

              	
                7

              
	 	 	 
	
                ARTICLE
                  3 

              	
                ORDERS
                  AND FORECASTING; EIGHTEEN MONTH SUPPLY;

              	 
	 	
                DELIVERY

              	
                7

              
	 	 	 
	
                ARTICLE
                  4 

              	
                PASSING
                  OF TITLE AND RISK OF LOSS IN API

              	
                11

              
	 	 	 
	
                ARTICLE
                  5

              	
                PRICE
                  OF API

              	
                11

              
	 	 	 
	
                ARTICLE
                  6

              	
                INVOICE
                  AND PAYMENT

              	
                12

              
	 	 	 
	
                ARTICLE
                  7 

              	
                CAPACITY

              	
                13

              
	 	 	 
	
                ARTICLE
                  8 

              	
                COMPLAINTS
                  AND PRODUCT RECALL

              	
                13

              
	 	 	 
	
                ARTICLE
                  9

              	
                REJECTION
                  AND REPLACEMENT OF DEFECTIVE API

              	
                15

              
	 	 	 
	
                ARTICLE
                  10 

              	
                QUALITY
                  ASSURANCE; REGULATORY COMPLIANCE; AUDITS

              	 
	 	
                AND
                  INSPECTION; PRODUCT LICENSE; MANUFACTURING 

              	 
	 	
                LICENSE;
                  DOCUMENTATION AND REPORTS

              	
                16

              
	 	 	 
	
                ARTICLE
                  11 

              	
                CONFIDENTIALITY

              	
                18

              
	 	 	 
	
                ARTICLE
                  12 

              	
                FORCE
                  MAJEURE EVENT

              	
                20

              
	 	 	 
	
                ARTICLE
                  13

              	
                REPRESENTATIONS
                  AND WARRANTIES

              	
                21

              
	 	 	 
	
                ARTICLE
                  14

              	
                LIABILITY
                  AND INDEMNIFICATION

              	
                23

              
	 	 	 
	
                ARTICLE
                  15 

              	
                INSURANCE

              	
                27

              
	 	 	 
	
                ARTICLE
                  16 

              	
                TERM;
                  TERMINATION; REMEDIES

              	
                27

              
	 	 	 
	
                ARTICLE
                  17 

              	
                MISCELLANEOUS

              	
                31

              

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULES

     

    

      
        	
                SCHEDULE
                  1

              	
                SPECIFICATIONS
                  

              
	 	 
	
                SCHEDULE
                  2

              	
                PRICE

              

      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SUPPLY
      AGREEMENT

     

    This
      SUPPLY AGREEMENT (this “Agreement”)
      is
      made and entered into as of the 15th day of February, 2007 (the “Effective
      Date”)
      by and
      between INSPIRE PHARMACEUTICALS, INC., a Delaware corporation having its
      principal office at 4222 Emperor Boulevard, Suite 200, Durham, North Carolina
      27703 (the “Purchaser”),
      and
      InSite Vision Incorporated, a Delaware corporation having its principal office
      at 965 Atlantic Avenue, Alameda, California 94501 (the “Supplier”).
      The
      Purchaser and the Supplier are sometimes referred to herein individually as
      a
“Party”
and
      collectively as “Parties.” 

     

    RECITALS

     

    WHEREAS,
      [***] is engaged in the business of manufacturing and supplying the active
      pharmaceutical ingredient azithromycin [***]; 

     

    WHEREAS,
      the Supplier purchases azithromycin [***] from [***] pursuant to that certain
      Commercial Supply/Purchase Agreement dated April 1, 2005 by and between the
      Supplier and [***] (the “[***]
      Agreement”);
      and

     

    WHEREAS,
      the Purchaser desires to purchase azithromycin [***] manufactured
      by [***] from the Supplier.

     

    NOW,
      THEREFORE, in consideration of the foregoing recitals, mutual covenants,
      agreements, representations and warranties contained herein, the Parties hereby
      agree as follows:

     

    ARTICLE
      1

    DEFINITIONS

     

    In
      this
      Agreement:

     

    1.1  “Affiliate”
means
      a
      corporation or non-corporate business entity that, directly or indirectly,
      controls, is controlled by, or is under common control with the Person
      specified. An entity will be regarded as in control of another entity if: (i)
      it
      owns, directly or indirectly, at least 50% of the voting securities or capital
      stock of such entity, or has other comparable ownership interest with respect
      to
      any entity other than a corporation; or (ii) it possesses, directly or
      indirectly, the power to direct or cause the direction of the management and
      policies of the corporation or non-corporate business entity, as applicable,
      whether through the ownership or control of voting securities, by contract
      or
      otherwise. 

     

    
      	
              *Indicates
                that certain information contained herein has been omitted and filed
                separately with the Securities and Exchange Commission. Confidential
                treatment has been requested with respect to the omitted
                portions.

            

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    1.2  “Agreement”
means
      this Supply
      Agreement together with all of its schedules (the “Schedules”). 

     

    1.3  “API” means
      the
      active pharmaceutical
      ingredient azithromycin
      [***] as
      described in the relevant Specifications for use by the Purchaser and/or
      Purchaser’s Nominated Contract Manufacturer in the manufacture of Product
      pursuant to the License Agreement.

     

    1.4  “Applicable
      Laws”
means
      all Legal
      Requirements applicable to the Manufacture of API, including not only in the
      country of Manufacture but also (i) where API is to be supplied to another
      country, the Legal Requirements in such country applicable to the Manufacture
      and sale of Product in such country and (ii) the Legal Requirement of the
      United States, including the Regulatory Acts, applicable to the Manufacture
      and
      sale of Product in the United States.

     

    1.5  “Business
      Day”
means
      any day, except Saturday and Sunday, on which commercial banking institutions
      in
      New York are open for business. Any reference in this Agreement to “day” whether
      or not capitalized shall refer to a calendar day, not a Business
      Day.

     

    1.6  “Certificate
      of Analysis”
means
      a
      certificate provided by a representative of [***]
      authenticating
      the
      pharmaceutical analysis of each batch of API supplied under this
      Agreement.

     

    1.7  “Commercially
      Reasonable Efforts”
means,
      with respect to the efforts of a particular Party to complete specific tasks
      or
      obligations under this Agreement, the efforts and resources that would be used,
      consistent with prevailing pharmaceutical industry standards, by a company
      of
      similar size and scope to such Party taking into account efficacy, safety and
      other relevant factors. Commercially Reasonable Efforts shall be determined
      on a
      country-by-country basis.
      With
      respect to the efforts of the Supplier to compel [***] to undertake any action
      as required under this Agreement, the Supplier’s rights and obligations under
      the [***] Agreement shall be considered in the determination of what efforts
      constitute Commercially Reasonable Efforts.

     

    1.8  “Confidential
      Information”
of
      a
      Party means all secret, confidential or proprietary information or data, whether
      provided in written, oral, graphic, video, computer or other form, provided
      by
      such Party (the “Disclosing
      Party”)
      to the
      other Party (the “Receiving
      Party”)
      pursuant to this Agreement (including information generated by or on behalf
      of
      such Party pursuant to this Agreement and disclosed to the other Party), which
      may include without limitation information relating to the Disclosing Party’s
      existing or proposed research, development efforts, patent applications,
      business or products and any other materials that have not been made available
      by the Disclosing Party to the general public. The terms of this Agreement
      shall
      also be deemed Confidential Information of each Party, except to the extent
      disclosed pursuant to Section 11.3 herein. Notwithstanding the foregoing
      sentences, the term “Confidential Information” shall not include any information
      or materials that the Receiving Party can demonstrate:

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

     

    (a)  were
      already known
      to
      the Receiving Party (other than under an obligation of confidentiality), at
      the
      time of disclosure by the Disclosing Party to the extent such Receiving Party
      has documentary evidence to that effect;

     

    (b)  were
      generally available to the public or otherwise part of the public domain at
      the
      time of its disclosure to the Receiving Party;

     

    (c)  became
      generally available to the public or otherwise part of the public domain after
      its disclosure or development, as the case may be, and other than through any
      act or omission of the Receiving Party in breach of its confidentiality
      obligations under this Agreement;

     

    (d)  were
      subsequently lawfully disclosed to the Receiving Party by a Third Party who
      had
      no obligation to the Disclosing Party not to disclose such information to
      others;

     

    (e)  were
      independently discovered or developed by or on behalf of the Receiving Party
      without the use of the Confidential Information belonging to the other Party
      and
      the Receiving Party has documentary evidence to that effect; or

     

    (f)  is
      approved for release by the Disclosing Party in writing.

     

    1.9  “Consent”
means
      any consent, authorization, permit, certificate, license or approval of,
      exemption by, or filing with, any Regulator or other Person.

     

    1.10  “Current
      Good Manufacturing Practices”
or
      “cGMPs”
shall
      mean the then-current version of ICH-Q7A Good Manufacturing Practice Guidance
      For Active Pharmaceutical Ingredients and the then-current principles detailed
      in the U.S. Current
      Good Manufacturing
      Practices,
      21 CFR
      Parts 210 and 211.

     

    1.11  “Delivery”
means
      in each case the delivery of API in accordance with the requirements of Section
      4.1. 

     

    1.12  “Disclosing
      Party”
has
      the
      meaning set forth in Section 1.8.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

     

    1.13  “DMF” means
      in
      relation to API the Drug
      Master
      File containing all the information on the production and control of
      API.

     

    1.14  “Effective
      Date” has
      the
meaning
      set
      forth in the first (1st)
      paragraph hereof.

     

    1.15  “Eighteen
      Month Supply” means
      the
      quantity of API forecasted in the applicable Forecast Schedule.

     

    1.16  “FDA”
means
      the United States Food and Drug Administration, or any successor agency
      thereof.

     

    1.17  “Firm
      Order”
or
      “Firm
      Orders” has
      the
      meaning set forth in Section 3.3.

     

    1.18  “Force
      Majeure Event”
has
      the
meaning
      set
      forth in Section 12.1.

     

    1.19  “Forecast
      Schedule” has
      the
      meaning
      set forth in Section 3.2.

     

    1.20  “Good
      Condition” means
      that API supplied is the right product, made in accordance with the registered
      process, has in no way deteriorated or broken down, is not damaged or
      contaminated upon Delivery, is in the right container, is correctly labelled
      and
      properly sealed in its container, accords with the relevant Specifications
      and
      is capable of any agreed standard of performance.

     

    1.21  “Indemnitee”
has
      the
      meaning set forth in Section
      14.3(a).

     

    1.22  “Indemnitor”
has
      the
      meaning set forth in Section 14.3(a).

     

    1.23  “Independent
      Laboratory”
means
      such
      laboratory as shall be mutually agreed in writing between the Parties for the
      purpose of Article 9.

     

    1.24  “Initial
      Term” has
      the
      meaning set forth in Section 16.1.

     

    1.25  “Knowledge”
means,
      with respect to a particular fact or matter, the applicable Party or its
      Affiliate is actually aware of that fact or matter as of the Effective Date
      following a reasonably comprehensive internal investigation among such Party’s
      or Affiliate’s officers and employees who could reasonably be expected to be
      aware of such fact or matter. 

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

    

    1.26  “Legal
      Requirements”
shall
      mean any and all applicable local, municipal, provincial, federal and
      international laws, statutes, ordinances, rules, regulations or operating
      procedures now or hereafter enacted or promulgated by any Regulator, including
      the Regulatory Acts.

     

    1.27  “License
      Agreement”
shall
      mean that certain License Agreement by and between the Purchaser and the
      Supplier dated as of February 15, 2007.

     

    1.28  “Loss”
or
      “Losses” has
      the
      meaning set forth in Section 14.1. 

     

    1.29  “Manufacture”
or
      “Manufacturing”
means
      the planning, purchasing, manufacture, processing, compounding, storage,
      filling, packaging,
      waste
      disposal, labelling, leafleting, testing, quality assurance, sample retention,
      stability testing, release, dispatch and supply of API.

     

    1.30  “Manufacturing
      License” means
      all
      licenses necessary
      for or
      required in connection with the Manufacture of API at the Manufacturing
      Site.

     

    1.31  “Manufacturing
      Site”
means
      the manufacturing facility of [***]
      at
      [***].

     

    1.32  “Material
      Safety Data Sheet”
means
      the material safety data sheet provided by a representative of [***]
      with
      respect to each batch of API supplied under this Agreement.

     

    1.33  “Other
      Purchaser Default” has
      the
meaning
      set
      forth in Section 16.6.

     

    1.34  “Other
      Supplier Default” has
      the
meaning
      set
      forth in Section 16.3.

     

    1.35  “Party” or
      “Parties” has
      the
      meaning set forth
      in the
      first (1st)
      paragraph hereof.

     

    1.36  “Person”
or
      “person”
means
      any individual, firm, corporation, partnership, limited liability company,
      trust, unincorporated organization or other entity or a government agency or
      political subdivision thereto, and shall include any successor (by merger or
      otherwise) of such Person.

     

    1.37   “Price”
means
      the price of API calculated
      pursuant
      to Article 5.

     

    1.38  “Product” means
      the
      finished pharmaceutical products Manufactured by Purchaser pursuant to the
      License Agreement that contain API as an active ingredient. 

     

    1.39  “Purchaser” has
      the
      meaning set forth
      in the
      first (1st)
      paragraph hereof.

     

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

    

    1.40  “Purchaser
      Indemnitee”
has
      the
      meaning set forth in Section 14.1.

     

    1.41  “Purchaser
      Material Default” has
      the
      meaning
      set forth in Section 16.5.

     

    1.42  “Purchaser’s
      Nominated Contract Manufacturer” means
      Cardinal Health PTS, LLC and such other Third Party manufacturer reasonably
      acceptable to Supplier as may be confirmed by the Purchaser to the Supplier
      in
      writing from time to time as being appointed by the Purchaser to manufacture
      Product on behalf of the Purchaser and to whom supplies of API shall be
      Delivered
      for
      this
      purpose pursuant to this Agreement.

     

    1.43  “Receiving
      Party”
has
      the
      meaning set forth in Section 1.8.

     

    1.44  “Regulator”
means
      any relevant nation
      or
      government, any state, province, or other political subdivision thereof or
      any
      entity with legal authority to exercise executive, legislative, judicial,
      regulatory or administrative functions or pertaining to government which
      regulates any aspect of the Manufacture of API or active pharmaceutical
      ingredient in general and/or the sale or marketing of any Product, including
      any
      division of the FDA (as applicable) and any other applicable counterpart agency
      that administers the Regulatory Acts of any jurisdiction.

     

    1.45  “Regulatory
      Acts”
means
      all
      Applicable Laws and regulations that govern the approval, manufacture, sale
      or
      licensing of pharmaceutical products, or ingredients for inclusion therein,
      including, without limitation, the United States Federal Food, Drug and Cosmetic
      Act, as amended and the rules and regulations promulgated
      thereunder.

     

    1.46  “Renewal
      Term” has
      the
      meaning set forth in Section 16.1.

     

    1.47  “[***]” has
      the
      meaning set forth in the first (1st)
      recital
      hereof.

     

    1.48  “[***]
      Agreement”
      has
      the
      meaning set forth in the second (2nd)
      recital
      hereof.

     

    1.49  “[***]
      Confidential Information”
means
      Confidential Information (as defined in the [***] Agreement) of [***] received
      by the Supplier pursuant to the [***] Agreement.

     

    1.50  “Schedules”
has
      the
      meaning set forth in Section 1.2.

     

    1.51  “SEC”
      has the
      meaning set forth in Section 11.2.

     

    1.52  “Seed
      Stock”
has
      the
      meaning set forth in Section 3.1.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

    

    1.53  “Specifications”
means
      the specifications for API as identified in Schedule
      1.
      

     

    1.54  “Supplier” has
      the
      meaning set forth in the first (1st)
      paragraph hereof.

     

    1.55  “Supplier
      Indemnitee” has
      the
      meaning set forth in Section 14.2.

     

    1.56  “Supplier
      Material Default” has
      the
      meaning set forth in Section 16.2.

     

    1.57  “Term” has
      the
      meaning set forth in Section 16.1.

     

    1.58  “Third
      Party(ies)”
means
      any Person other than the Supplier, the Purchaser and their respective
      Affiliates.

     

    1.59  “Third
      Party Claim” means
      any
      Third Party claim, demand, suit, action or proceeding.

     

    ARTICLE
      2

    MANUFACTURE
      AND SUPPLY OF API

     

    2.1  Manufacture
      and Supply.
      In
      accordance with the terms of this Agreement, the Supplier shall sell to the
      Purchaser those requirements for API Manufactured by [***]
      as
      forecasted and ordered from time to time by the Purchaser in accordance with
      Article 3, and shall supply such quantities of API to the Purchaser and/or
      Purchaser’s Nominated Contract Manufacturer (as applicable) for use in the
      Manufacture of Product. 

     

    2.2  Compliance
      with Specifications; Quality Standards.
      All
      API
      supplied hereunder shall comply with the warranty set forth in Section
      13.2(c).

     

    2.3  [***]
      Agreement.
      The
      Supplier shall comply with all material terms and conditions set forth in the
      [***] Agreement.

     

    ARTICLE
      3

    ORDERS
      AND FORECASTING;
      EIGHTEEN MONTH SUPPLY; DELIVERY

     

    3.1  Seed
      Stock.
      The
      Supplier shall Deliver to Purchaser and/or Purchaser’s Nominated Contract
      Manufacturer [***]
      (the
“Seed
      Stock”).
      The
      Seed Stock shall be Delivered as follows: (a) [***]
      in
      the
      aggregate of API on the date hereof; and (b) sufficient quantities of API so
      that the Seed Stock equals [***]
      in
      the
      aggregate of API on [***].
      Title
      and risk of loss for the Seed Stock shall transfer to Purchaser in accordance
      with Section 4.2. Purchaser shall pay for the Seed Stock as follows: (y)
      notwithstanding Section 6.1, [***]upon
      shipment of the Seed Stock in accordance with Section 6.1.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

     

    3.2  Quarterly
      Forecast.
      The
      Purchaser and/or Purchaser’s Nominated Contract Manufacturer (as applicable)
      shall provide the Supplier with a rolling forecast schedule of demand showing
      their estimated requirements for API for the following [***]
      months
      (“Forecast
      Schedule”).
      The
      Forecast Schedule shall be updated [***]
      and
      shall
      contain, in addition to quantity of API required, the requested delivery date.
      The first such Forecast Schedule shall be provided to the Supplier on the date
      hereof and thereafter by the first (1st)
      day of
      each [***].
      All
      forecasts and orders under this Agreement shall be in multiples of the minimum
      order quantity of [***].
      

     

    3.3  Eighteen
      Month Supply.
      The
      Supplier shall build up at the Purchaser’s or Purchaser’s Nominated Contract
      Manufacture’s (as applicable) location the Eighteen Month Supply of API in
      accordance with the following schedule: (a) [***]
      in
      the
      aggregate of API on the date hereof; (b) [***]
      in
      the
      aggregate of API on June 30, 2007; (c) [***]
      in
      the
      aggregate of API on December 31, 2007; and (d) the Eighteen Month Supply
      shall be fully Delivered on June 30, 2008. The Seed Stock shall be part of
      the Eighteen Month Supply and shall be included in determining the quantity
      of
      the Eighteen Month Supply at all times. At all times after June 30, 2008 during
      the term of this Agreement, the Supplier shall ensure that API is Delivered
      to
      Purchaser or Purchaser’s Nominated Contract Manufacturer in amounts sufficient
      to maintain, in the aggregate, the Eighteen Month Supply. Notwithstanding the
      preceding sentence, Purchaser acknowledges and agrees that the Supplier shall
      not be in breach of such obligation to maintain the Eighteen Month Supply if:
      (y) the quantity of API in inventory at the Purchaser’s or Purchaser’s Nominated
      Contract Manufacturer’s (as applicable) location, in the aggregate, falls below
      the Eighteen Month Supply while awaiting Delivery of API from [***]
      on
      orders
      already placed by the Supplier for the benefit of the Purchaser; or (z) the
      amount of API required for the Eighteen Month Supply increases as a result
      of
      the Purchaser’s Forecast Schedule and the Supplier is using its Commercially
      Reasonable Efforts to expedite Delivery of such increased amount in accordance
      with the Supplier’s then-current ordering processes with [***]
      so
      long
      as (i) Delivery occurs no later than seven (7) months from the date of such
      Forecast Schedule and (ii) the Supplier satisfies such increase from the
      Supplier’s own inventory of API by allocating its existing stock among the
      Purchaser and such other Third Parties to whom the Supplier supplies API on
      a
      pro rata basis. If the Supplier allocates API to the Purchaser from the
      Supplier’s own inventory, the Parties will discuss in good faith how such
      allocation will be documented and applied toward the Supplier’s obligations
      under this Section 3.3. The Purchaser shall be responsible for all storage,
      insurance and other costs required to maintain the Eighteen Month Supply;
      provided, however, the Supplier shall reimburse the Purchaser for one-third
      (1/3) of all such reasonable and documented costs within thirty (30) days of
      invoice thereof by the Purchaser.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

    

    3.4  Firm
      Orders.
      Upon
      submittal of each Forecast Schedule, the quantities of API required for the
      Supplier to meet its obligations under Section 3.3 above will be regarded by
      the
      Parties as a binding irrevocable commitment (each a “Firm
      Order”)
      by the
      Purchaser to buy from the Supplier, and by the Supplier to supply (or cause
      to
      be supplied) to the Purchaser and/or Purchaser’s Nominated Contract Manufacturer
      (as appropriate). 

     

    3.5  Confirmation
      of Firm Orders.
      The
      Supplier shall respond to each Firm Order received from the Purchaser within
      thirty (30) days
      of
      receipt. The response shall include confirmation of the delivery dates and
      quantity as set out in the Firm Order. In the event that discussion is required
      regarding the timing of production and Delivery, then the relevant planning
      personnel from both Parties will agree and confirm any amendments to the Firm
      Order within ten (10) days of receipt by the Supplier of the original Firm
      Order. 

     

    3.6  Changes
      to Firm Orders.
      The
      Supplier shall satisfy the Purchaser’s requirements pertaining to each Firm
      Order and, subject to the Supplier’s rights under the [***]
      Agreement,
      shall use Commercially Reasonable Efforts to satisfy any changes in quantity,
      Delivery phasing or dates requested by the Purchaser in respect of such a Firm
      Order. In the event that the Supplier becomes aware that any Firm Order will
      not
      be satisfied, then the Supplier shall inform the Purchaser as soon as reasonably
      practicable and in any event within ten (10) Business Days. This shall be
      without prejudice to the Purchaser’s rights under this Agreement in respect of
      failure to meet Firm Orders.

     

    3.7  Shipment.
      Each
      lot of API shall be shipped in reinforced cardboard boxes bagged in foil
      laminate pouches that meet
      U.S.
      Department of Transportation requirements per 49 CFR 171 and 178, as
      applicable, and each container will be clearly labelled with the weight, name,
      lot number, and expiration date. The
      Purchaser or Purchaser’s Nominated Contract Manufacturer (as appropriate) shall
      be provided with each Delivery the commercial invoice bearing the applicable
      order number relating to such Delivery and any other agreed Delivery
      documentation. At
      the
      Purchaser’s request, the Supplier shall provide the Purchaser with reasonable
      access to any applicable supporting data in the Supplier’s possession, available
      to the Supplier or that the Supplier is able to obtain using Commercially
      Reasonable Efforts.

     

    3.8  Delivery.
      Delivery shall take place within the period from two days prior to two days
      after the delivery date contained in the Firm Order. If API is incorrectly
      delivered according to the Firm Order, the Supplier shall be held responsible
      for any reasonable and documented additional expense incurred in Delivering
      it
      to the correct point specified in the Firm Order.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

    

    3.9  Incomplete
      Delivery.
      The
      Purchaser or, if relevant, Purchaser’s Nominated Contract Manufacturer shall
      notify the Supplier as soon as reasonably practicable if there is an incomplete
      delivery according to the terms of this Agreement. If the Supplier is notified
      by telephone or in person, then such notification shall be confirmed in writing.
      The Supplier shall then be obligated to rectify the incomplete delivery within
      sixty (60) days, running from the first date the Supplier receives such
      notification, provided this shall be without prejudice to any other rights
      or
      obligations under this Agreement. In addition, the Supplier shall rectify the
      incomplete delivery from the Supplier’s own inventory of API by allocating its
      existing stock among the Purchaser and such other Third Parties to whom the
      Supplier supplies API on a pro rata basis. If the Supplier allocates API to
      the
      Purchaser from the Supplier’s own inventory, the Parties will discuss in good
      faith how such allocation will be documented and applied toward the Supplier’s
      obligations under Section 3.3.

     

    3.10  Certificate
      of Analysis; Material Safety Data Sheet.
      At the
      time of Delivery to the Purchaser or Purchaser’s Nominated Contract
      Manufacturer, the Purchaser shall be provided one (1) completed copy of the
      Certificate of Analysis and Material Safety Data Sheet relating to each batch
      of
      API Delivered.

     

    3.11  Discontinuation.
      The
      Supplier shall
      notify the Purchaser in writing no less than twelve (12) months prior to such
      time as [***] may discontinue the manufacture of the API. The Purchaser shall
      have the right to purchase up to 150 additional kilograms of API on or prior
      to
      the effective date of such discontinuance.

     

    3.12  Failure
      to Supply.
      If for
      any reason (including without limitation as a result of negligence, fault or
      omission of the Supplier or a Force Majeure Event) API is not able to be
      supplied to the Purchaser or the Eighteen Month Supply is not maintained at
      the
      amount required under Section 3.3 (or the Supplier anticipates that API
      will not be supplied to the Purchaser in accordance with any order placed in
      accordance with Article 3 or the Eighteen Month Supply will not be maintained
      at
      the amount required under Section 3.3), the Supplier shall, as soon as it
      becomes aware of the fact, give written notice to the Purchaser of the reasons
      for the shortfall. If the Supplier is in breach of its obligations under Section
      3.3 and cannot for any reason whatsoever meet any such shortfall from allocation
      of Supplier’s existing stock, then the Purchaser may, without prejudice to its
      other rights and remedies pursuant to the Agreement or available at law,
select
      and qualify a new supplier to manufacture and supply API to the Purchaser,
      and
      the reasonable and documented costs of such qualification shall be borne by
      the
      Supplier. In the event the Purchaser selects and qualifies a new supplier
      pursuant to the preceding sentence, at the Supplier’s written request: (a) the
      Purchaser and the Supplier shall use Commercially Reasonable Efforts to agree
      to
      a mutually acceptable arrangement where the Purchaser supplies the Supplier
      some
      portion of the API received by the Purchaser from such new supplier; or (b)
      the
      Purchaser will use Commercially Reasonable Efforts to assist the Supplier to
      obtain the right to order API directly from such new supplier.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

    

    3.13  Secondary
      Supplier.
      At any
      time while this Agreement is in effect, the Purchaser may select and qualify
      a
      secondary supplier (at the Purchaser’s sole expense) to manufacture and supply
      API to the Purchaser. 

     

    3.14  Regular
      Meetings.
      In
      order to promote efficient and effective supply chain planning, the appropriate
      personnel from the Parties’ respective manufacturing organizations will meet on
      a regular basis (and in any event no less than once each year) during the term
      of this Agreement to discuss, consider and implement such measures as they
      consider appropriate to manage the demand and supply aspects of this Agreement
      and review performance.

     

    ARTICLE
      4

    PASSING
      OF TITLE AND RISK OF LOSS IN API

     

    4.1  Shipment;
      Transport.
      API
      shall be Delivered to the Purchaser or Purchaser’s Nominated Contract
      Manufacturer (as specified in the Firm Order) FCA (Incoterms 2000 edition,
      published by the International Chamber of Commerce, ICC Publication 560) the
      location specified in the Firm Order, except with regard to title and risk
      of
      loss, which is described below in Section 4.2.

     

    4.2  Title;
      Risk of Loss.
      Title
      and risk of loss in API shall remain with the Supplier until receipt by the
      Purchaser or Purchaser’s Nominated Contract Manufacturer (as the case may be),
      at which point title and risk of loss shall pass to the Purchaser or Purchaser’s
      Nominated Contract Manufacturer (as the case may be).

     

    4.3  No
      Acceptance.
      Neither
      payment by nor passing of title or risk in API to the Purchaser or Purchaser’s
      Nominated Contract Manufacturer (as the case may be) shall be deemed to
      constitute acceptance of API.

     

    ARTICLE
      5

    PRICE
      OF API

     

    5.1  Price.
      The
      Price payable by the Purchaser for API shall be calculated in accordance with
      Schedule
      2.
      The
      Price and any other amounts payable pursuant to this Agreement shall be as
      stated and exclude the cost of Delivery, insurance and packing costs and
      applicable taxes and duties which shall be paid by the Purchaser. 

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

    

     

    5.2  Annual
      Review.
      The
      Supplier will keep accurate books and accounts of record in connection with
      its
      purchase of API from [***] in sufficient detail to permit accurate determination
      of all figures necessary for verification of payment obligations set forth
      in
      this Article 5. The Parties shall meet annually during the term of this
      Agreement (unless otherwise mutually agreed in writing) to review the Price
      payable by the Purchaser. Prior to such meeting, the Supplier shall (subject
      to
      the Supplier’s confidentiality obligations to [***] (which the Supplier shall
      use Commercially Reasonable Efforts to compel [***] to waive)) provide the
      Purchaser with the details of the pricing at which the Supplier purchases API
      from [***]. 

     

    ARTICLE
      6

    INVOICE
      AND PAYMENT

     

    6.1  Invoices.
      Upon
      shipment of API, the Supplier shall invoice the Purchaser for the relevant
      quantity of API contained in such shipment. Each invoice issued by the Supplier
      hereunder shall specify:

     

    (a)  The
      Price
      in respect
      of API shipped;

     

    (b)  The
      quantity of API shipped and the corresponding Firm Order; and

     

    (c)  Any
      other
      amounts reimbursable
      to the
      Supplier pursuant to this Agreement.

     

    6.2  Payment.
      Payment
      to the account identified by the Supplier in writing and shall be made in either
      Euros or United States Dollars in the Purchaser’s discretion. If a conversion in
      currency is required, the amount of payment shall be determined by converting
      the price in Schedule 2
      to
      United States Dollars according to the exchange rate listed in the Wall Street
      Journal on the date of payment. Payments shall be made within thirty (30) days
      from the date of Supplier’s invoice to the account identified by the Supplier in
      writing.

     

    6.3   Taxes.

     

    (a)  The
      Purchaser shall pay and otherwise be responsible for all applicable sales,
      goods
      and services and transfer taxes in connection with any payment made to the
      Supplier pursuant to this Agreement.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (b)  Any
      income or other tax that one Party hereunder is required to withhold and pay
      on
      behalf of the other Party hereunder with respect to amounts payable under this
      Agreement shall be deducted from and offset against said amounts prior to
      payment to the other Party; provided, however, that in regard to any tax so
      deducted, the Party making the withholding shall give or cause to be given
      to
      the other Party such assistance as may reasonably be necessary to enable that
      other Party to claim exemption therefrom or credit therefor, and in each case
      shall furnish the Party on whose behalf amounts were withheld proper evidence
      of
      the taxes paid on its behalf. Each Party shall comply with reasonable requests
      of the other Party to take any proper actions that may minimize any withholding
      obligation.

     

    ARTICLE
      7

    CAPACITY

     

    The
      Supplier shall use Commercially Reasonable Efforts to ensure that sufficient
      manufacturing capacity to meet the Purchaser’s and/or Purchaser’s Nominated
      Contract Manufacturer’s (as the case may be) requirements for API as shown in
      the Forecast Schedule is available at all times
      in
      accordance Section 3.3. The Purchaser and the Supplier
      shall
      regularly review and discuss the Manufacturing capacity available at the
      Manufacturing Site in relation to the Forecast Schedule. In the event of a
      breakdown or fault in production which impacts the manufacturing capacity
      required hereunder or otherwise impacts the Manufacture of API for the
      Purchaser, the Supplier shall notify the Purchaser as soon as reasonably
      practicable and shall use Commercially Reasonable Efforts to ensure a return
      to
      production as soon as possible. 

     

    ARTICLE
      8

    COMPLAINTS
      AND PRODUCT RECALL

     

    8.1  Complaints
      and Product Recall.
      The
      Purchaser shall be solely responsible in accordance with Applicable Laws and
      regulations for the reporting to Regulators in the territories in which the
      Purchaser is permitted to Manufacture and distribute Products pursuant to the
      License Agreement of any complaints and product recalls relating to Product
      which arise for any reason. 

     

    8.2  Manufacturing
      Events.
      The
      Supplier shall use Commercially Reasonable Efforts to advise, and shall use
      Commercially Reasonable Efforts to compel [***]
      to
      advise, the Purchaser of any occurrence or information which arises out of
      the
      Manufacturing activities that has or could reasonably be expected to have
      adverse regulatory compliance and/or reporting consequences concerning API
      and/or Product within forty-eight (48) hours of becoming aware of such
      information, and, subject to the Supplier’s confidentiality obligations to
[***]
      (which
      the Supplier shall use Commercially Reasonable Efforts to compel [***]
      to
      waive), promptly furnish copies of any related information or reports to the
      Purchaser. In addition to the foregoing, the Supplier shall use Commercially
      Reasonable Efforts to notify, and shall use Commercially Reasonable Efforts
      to
      compel [***]
      to
      notify, the Purchaser of any problem related to the Manufacture of API under
      this Agreement within forty-eight (48) hours of becoming aware of such problem,
      including:

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

    

    (a)  where
      any
      API
      or its labelling may have been mistaken for or applied to another product;
      or

     

    (b)  where
      any
      API may be affected by bacteriological or other contamination, significant
      chemical, physical or other change or deterioration or stability failures;
      or

     

    (c)  where
      any
      API is the subject of a complaint by a Third Party or customer in circumstances
      where this may impact API Manufactured for the Purchaser under this Agreement;
      or 

     

    (d)  where
      any
      API may
      not comply with the Specifications therefor.

     

    8.3  Recall
      Strategy.
      If any
      of the circumstances described in Section 8.2 arise, at the Purchaser’s written
      request, the Supplier shall use Commercially Reasonable Efforts to take, and
      shall use Commercially Reasonable Efforts to compel [***]
      to take,
      all such acts as the Purchaser may reasonably direct in writing. If the
      Purchaser or any Regulator deems that a Product recall is required, the recall
      strategy shall be developed in good faith by the Parties and the Supplier shall
      use Commercially Reasonable Efforts to follow, and shall use Commercially
      Reasonable Efforts to compel [***]
      to
      follow, timing requirements. The reasonable and documented costs of any such
      action agreed upon by the Parties as a result of the circumstances described
      in
      Section 8.2, or of any such recall under this Section 8.3, shall be borne by
      the
      Supplier only in the event and to the extent the need for the action is the
      result of a failure on the part of the Supplier to comply with its obligations
      under this Agreement, and if not the result of a failure of the Supplier shall
      be borne by the Purchaser.

     

    8.4  Complaint
      Investigations.
      Upon
      notification from the Purchaser that it has received a complaint in respect
      of
      the Product which the Purchaser reasonably believes is due to API, upon the
      Purchaser’s written request, the Supplier shall use Commercially Reasonable
      Effort to follow, and shall use Commercially Reasonable Efforts to compel
[***]
      to
      conduct, all such necessary internal investigations as may be reasonably
      necessary to determine the validity of such complaint. The findings of any
      such
      investigations shall be reported in writing to the Purchaser within five (5)
      Business Days of completion of the investigation, provided that the Purchaser
      shall be kept informed periodically as the investigation progresses. The
      Purchaser shall thereafter respond to the complainant and provide a written
      copy
      of such response to the Supplier and the Supplier shall thereupon use
      Commercially Reasonable Efforts to carry out, and shall use Commercially
      Reasonable Efforts to compel [***]
      to carry
      out, any actions which the Purchaser may reasonably require in connection
      therewith. The reasonable and documented costs of any such investigation or
      other action which the Purchaser requires to be undertaken pursuant to this
      Section 8.4 shall be borne by the Supplier in the event and to the extent that
      the need for such action is the result of a failure on the part of the Supplier
      to comply with its obligations under this Agreement, and if not the result
      of a
      failure of the Supplier shall be borne by the Purchaser.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

    

     

    ARTICLE
      9

    REJECTION
      AND REPLACEMENT OF DEFECTIVE API

     

    9.1  Testing.
      Upon
      receipt of each Delivery under this Agreement, the Purchaser or Purchaser’s
      Nominated Contract
      Manufacturer (as applicable) shall carry out testing and/or control for such
      Delivery and shall report any adverse findings to the Supplier pursuant to
      Section 9.3. API delivered to the Purchaser or Purchaser’s Nominated Contract
      Manufacturer will be deemed accepted by the relevant recipient if it fails
      to
      carry out such testing obligations pursuant to this Section 9.1 or if no
      notification is made to the Supplier pursuant to Section 9.3 within the time
      period set out in Section 9.2, provided that notwithstanding acceptance of
      API
      pursuant to this Section 9.1 the Supplier shall remain liable to the Purchaser
      under the terms of this Agreement for any defect or failure of API to comply
      with the terms of this Agreement.

     

    9.2  Nonconformance.
      The
      Purchaser or Purchaser’s Nominated Contract Manufacturer (as applicable) shall
      have the right exercisable within thirty (30) days after Delivery to reject
      API
      or any part thereof contained in such Delivery if, having carried out the
      relevant testing as prescribed in Section 9.1, or it becomes aware that any
      such
      API does not conform in quality or quantity or is otherwise defective with
      respect to the Specifications and all other terms of this Agreement or the
      specific Firm Order or if API is not in Good Condition.

     

    9.3  Rejection.
      In
      the
event
      of
any
      rejection of API pursuant to Section 9.2: 

     

    (a)  The
      Purchaser
      shall notify the Supplier in writing;

     

    (b)  The
      payment obligation in relation to any such delivery shall be suspended forthwith
      pending resolution of the dispute in accordance with this Section;

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

    

    (c)  The
      Parties shall immediately use their respective Commercially Reasonable Efforts
      to agree whether or not the delivery in question complies with the
      Specifications; and

     

    (d)  The
      Supplier shall be entitled at all reasonable times to inspect and/or analyze
      the
      delivery in question.

     

    9.4  Independent
      Laboratory.
      The
      Parties shall use all Commercially Reasonable Efforts to resolve any dispute
      that may arise pursuant to this Section but if the Parties fail to agree within
      thirty (30) days of notification to the Supplier pursuant to Section 9.3,
      whether any delivery of API supplied to the Purchaser hereunder is defective
      or
      may be rejected for any other reason set out in Section 9.2, the dispute shall
      be determined by the Independent Laboratory and the decision of the Independent
      Laboratory shall be final and binding on the Parties. The Independent Laboratory
      shall act as an expert and not as an arbitrator and (unless the Independent
      Laboratory otherwise determines) its fees shall be borne by the party against
      whom the Independent Laboratory’s decision is given.

     

    9.5  API
      Agreed or Determined to be Nonconforming.
      If the
      Supplier agrees or the Independent Laboratory finds that any delivery of API
      is
      defective or may otherwise be rejected in accordance with Section 9.2, without
      prejudice to any other rights under this Agreement that the Purchaser may have
      against the Supplier:

     

    (a)  The
      Supplier
      shall promptly collect at its own expense any rejected API from the Purchaser;
      and

     

    (b)  The
      Supplier shall, in addition, promptly reimburse the Purchaser in respect of
      any
      reasonable and documented out-of-pocket costs (including without limitation
      freight, clearance, duty and storage) incurred by the Purchaser in respect
      of
      the defective delivery, and replace the API with new API that strictly complies
      with the Specifications and all other requirements of the
      Agreement.

     

    9.6  API
      Determined to be Conforming.
      If a
      Delivery of API is found by the Independent Laboratory to comply with the
      requirements of Section 9.2, the Purchaser shall pay for such Delivery in
      accordance with the payment provisions contained in this Agreement.

     

    ARTICLE
      10

    QUALITY
      ASSURANCE; REGULATORY COMPLIANCE; AUDITS AND INSPECTION; PRODUCT
      LICENSE;
      MANUFACTURING LICENSE; DOCUMENTATION AND REPORTS

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

    

     

    10.1  Quality
      Assurance.
      The
      Supplier shall use Commercially Reasonable Efforts to provide, and shall use
      Commercially Reasonable Efforts to compel [***]
      to
      provide, to the Purchaser such documentation and information as may be
      reasonably necessary for the Purchaser to evaluate and assess on an ongoing
      basis the quality assurance testing, cGMPs, manufacturing processes, and
      manufacturing controls relating to the API. Without limiting the foregoing,
      the
      Supplier shall use Commercially Reasonable Efforts to compel [***]
      to
      comply with the quality requirements set forth in the [***]
      Agreement and use Commercially Reasonable Efforts to procure the right for
      the
      Purchaser to have the same access and information with respect to such
      requirements as the Supplier has under the [***]
      Agreement.

     

    10.2  Regulatory
      Compliance.
      The
      Supplier shall use Commercially Reasonable Efforts to provide, and shall use
      Commercially Reasonable Efforts to compel [***]
      to
      provide, to the Purchaser such documentation and information as may be
      reasonably necessary for the Purchaser to comply on an ongoing basis with the
      Purchaser’s regulatory obligations with respect to the API and the Product.
      Without limiting the foregoing, the Supplier shall use Commercially Reasonable
      Efforts to compel [***]
      to
      comply with the regulatory compliance requirements set forth in the [***]
      Agreement
      and use Commercially Reasonable Efforts to procure the right for the Purchaser
      to have the same access and information with respect to such requirements as
      the
      Supplier has under the [***]
      Agreement.

     

    10.3  Audits
      and Inspection.
      The
      Supplier shall use Commercially Reasonable Efforts to procure the right for
      the
      Purchaser to have the same audit and inspection rights of [***]
      as the
      Supplier has with respect to [***]
      pursuant
      to the [***]
      Agreement. If the Supplier is unable to procure such rights, the Purchaser
      may
      direct the Supplier to carry out such audits and inspection to which the
      Supplier is entitled under the [***]
      Agreement
      on the Purchaser’s behalf and the Supplier, subject to the Supplier’s
      confidentiality obligations to [***]
      (which
      the Supplier shall use Commercially Reasonable Efforts to compel [***]
      to
      waive), shall report in writing its findings within ten (10) Business Days
      of
      completing the audit or inspection; the Purchaser will
      notify the Supplier in writing of any adverse observations within ninety (90)
      calendar days of the Purchaser’s receipt of the Supplier’s report and the
      Supplier will use Commercially Reasonable Efforts to address with [***] such
      observations to the reasonable satisfaction of the Purchaser, including
      resolving a dispute with [***] by appeal to a Third Party in accordance with
      the
      [***] Agreement.
      

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

    

     

    10.4  Product
      License.
      The
      Purchaser shall be responsible for the registration of the Products with all
      relevant Regulators in the jurisdictions in which the Purchaser may distribute
      Products pursuant to the License Agreement, and the Supplier shall provide
      such
      assistance (at the Purchaser’s expense) as the Purchaser may reasonably request
      in connection therewith insofar as such assistance relates to the Manufacture
      of
      API and/or performance of this Agreement by the Supplier for supply by the
      Supplier to the Purchaser or Purchaser’s Nominated Contact Manufacturer (as
      applicable).

     

    10.5  Manufacturing
      Licenses.
      The
Supplier shall
      use
      Commercially Reasonable Efforts to compel [***] to obtain and maintain in full
      force and effect for the duration of this Agreement the Manufacturing License
      and all necessary permits, licenses, approvals and authorizations required
      under
      Applicable Laws to enable [***] to Manufacture and supply API to the
      Supplier.

     

    10.6  Documentation
      and Reports.
      The
      Supplier shall use Commercially Reasonable Efforts to compel [***]
      to:

     

    (a)  complete
      and
      maintain
      (and ensure that any authorized subcontractors complete
      and maintain) the documentation relating to the Manufacture of each batch of
      API
      in
      accordance with cGMPs and retain such documentation for a minimum period of
      six
      (6) years after release of API; 

     

    (b)  notify
      the
      Supplier, who will then notify Purchaser, of any batch failures, process
      deviations and any out-of-specification results which arise under Manufacture
      of
      Product as provided for in this Agreement; 

     

    (c)  complete
      and maintain
      all
      records and reporting requirements relating to controlled drugs as may
      be
      applicable; and

     

    (d)  complete
      and lodge with the appropriate authorities where required all documentation
      relating
      to the
      export of API where Delivery involves export from the country of
      Manufacture.

     

    ARTICLE
      11

    CONFIDENTIALITY

     

    11.1  Confidentiality.
      The
      Parties agree that during the Term, and for a period of five (5) years after
      this Agreement expires or terminates, a Party receiving Confidential Information
      of the other Party shall (a) maintain in confidence such Confidential
      Information to the same extent such Party maintains its own proprietary
      information of similar kind and value (but at a minimum each Party shall use
      Commercially Reasonable Efforts to maintain Confidential Information in
      confidence); (b) not disclose such Confidential Information to any Third Party
      without prior written consent of the Disclosing Party, except for disclosures
      to
      its sublicensees and commercial partners for Products who agree to be bound
      by
      obligations of non-disclosure and non-use at least as stringent as those
      contained in this Article 11; and (c) not use such Confidential Information
      for any purpose except those purposes permitted by this Agreement.
      Notwithstanding the foregoing, the Purchaser’s confidentiality obligations with
      respect to [***] Confidential Information received by the Purchaser in
      connection with the Parties’ performance of this Agreement shall continue until
      three (3) years after the termination or expiration of the [***] Agreement;
      provided, in no event shall such confidentiality obligations extend past the
      later of (y) five (5) years after this Agreement expires or terminates, or
      (z)
      April 1, 2022.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
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    11.2  Authorized
      Disclosure.
      Notwithstanding any other provision of this Agreement, the Receiving Party
      may
      disclose Confidential Information of the Disclosing Party to a Third Party:
      (a)
      to the extent and to the Persons as required by any Applicable Law, legal
      process or court order, or an applicable disclosure requirement of any
      Regulator, the U.S. Securities and Exchange Commission (“SEC”),
      the
      Nasdaq market or any other securities exchange or market; or (b) to the extent
      necessary to exercise the rights granted to or retained by the Receiving Party
      under this Agreement or otherwise establishing rights or enforcing obligations
      under this Agreement; provided, however, that the Receiving Party shall provide
      prior notice of such intended disclosure to the Disclosing Party if possible
      under the circumstances and shall disclose only such Confidential Information
      of
      the Disclosing Party as is reasonably required to be disclosed. 

     

    11.3  Disclosure
      of Agreement.
      The
      Parties agree that the material terms of this Agreement shall be considered
      Confidential Information of both Parties, subject to the special authorized
      disclosure provisions set forth below in this Section 11.3 (in lieu of the
      authorized disclosure provisions set forth in Section 11.2, to the extent of
      any
      conflict) and without limiting the generality of the definition of Confidential
      Information set forth in Section 1.8. The Parties will mutually agree the text
      of a press release announcing the execution of this Agreement. Thereafter,
      if
      either Party desires to make a public announcement concerning the terms of
      this
      Agreement, such Party shall give reasonable prior advance notice of the proposed
      text of such announcement to the other Party for its prior review and approval,
      such approval not to be unreasonably withheld. A Party shall not be required
      to
      seek the permission of the other Party to repeat or disclose any information
      as
      to the terms of this Agreement that has already been publicly disclosed by
      such
      Party in accordance with the foregoing or by the other Party, or any similar
      or
      comparable information. Either Party may disclose the terms of this Agreement
      to
      such Party’s existing investors, lenders, directors and professional advisors
      and to potential investors, lenders, acquirors or merger partners and their
      professional advisors who are bound by written or professional obligations
      of
      non-disclosure and non-use that are at least as stringent as those contained
      in
      this Article 11 or are customary for such purpose. Each Party acknowledges
      that
      the other Party may be obligated to file a copy of this Agreement with the
      SEC
      with its next quarterly report on Form 10-Q, annual report on Form 10-K or
      current report on Form 8-K or with any registration statement filed with the
      SEC
      pursuant to the Securities Act of 1933, as amended, and each Party shall be
      entitled to make such filings, provided, however, that the filing Party requests
      (to the extent legally permitted) confidential treatment of the terms hereof
      for
      which confidential treatment is customarily sought, to the extent such
      confidential treatment is reasonably available to such Party under the
      circumstances then prevailing. In the event of any such filing, the filing
      Party
      will provide the other Party with a copy of the Agreement marked to show
      provisions for which the filing Party intends to seek confidential treatment
      and
      shall reasonably consider the other Party’s timely comments
      thereon.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

    

     

    11.4  Unauthorized
      Use.
      If
      either Party becomes aware or has Knowledge of any unauthorized use or
      disclosure of the other Party’s Confidential Information, it shall promptly
      notify the other Party of such unauthorized use or disclosure.

     

    11.5  Return
      of Confidential Information.
      Upon
      termination of this Agreement, the Receiving Party shall promptly return all
      of
      the Disclosing Party’s Confidential Information, including all reproductions and
      copies thereof in any medium (except that the Receiving Party may retain one
      copy for its legal files) except as otherwise reasonably necessary to exercise
      the Receiving Party’s surviving rights under this Agreement.

     

    ARTICLE
      12

    FORCE
      MAJEURE EVENT

     

    12.1  General.
      Neither
      Party shall be liable to the other on account of any failure to perform or
      on
      account of any delay in performance of any obligation under this Agreement
      (excluding payment obligations), if and to the extent that such failure or
      delay
      shall be due to a cause beyond the control of the relevant Party and which,
      by
      the exercise of its Commercially Reasonable Efforts of diligence and care,
      such
      Party could not reasonably have been expected to avoid (a “Force
      Majeure Event”).
      For
      the evidence of doubt, any failure to Deliver API pursuant to a Firm Order
      due
      to an order, injunction or any other action by a Regulator shall not constitute
      a Force Majeure Event. The Party experiencing the delay and seeking relief
      under
      this Section 12.1 shall promptly notify the other Party of the delay and use
      Commercially Reasonable Efforts to overcome such delay. The Party affected
      shall
      promptly notify in writing the non-affected Party of the specific causes beyond
      the control of the affected Party and the probable duration of the delay, and
      that Party shall be excused from the performance of such obligation to the
      extent such performance is necessarily prevented, hindered or delayed thereby
      during the continuance of any such happening or event. This Agreement, insofar
      as it relates to such obligation, shall be deemed suspended so long as and
      to
      the extent that such cause delays the performance of any Force Majeure Event
      obligation.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

    

     

    12.2  Termination;
      Transition.
      If as a
      result of the conditions referred to in Section 12.1, the Supplier is
      unable to fully perform its obligations for a period of ninety (90) days, the
      Purchaser shall have the right to terminate this
      Agreement upon thirty (30) days prior notice to the Supplier. In the event
      the
      Purchaser terminates this Agreement as provided in this Section 12.2, the
      Supplier agrees to use Commercially Reasonable Efforts to assist the Purchaser
      to transfer the Manufacture of the Products to any other facility or facilities
      selected by the Purchaser, in its sole discretion.

     

    ARTICLE
      13

    REPRESENTATIONS
      AND WARRANTIES

     

    13.1  Mutual
      Representations and Warranties.
      Each
      Party hereby represents and warrants to the other Party as of the Effective
      Date
      that:

     

    (a)  such
      Party is a corporation
      or entity duly organized, validly existing and in good standing under the laws
      of the jurisdiction of its incorporation and has full corporate power and
      authority to execute and deliver this Agreement and to carry out the provisions
      hereof;

     

    (b)  such
      Party is duly authorized, by all requisite corporate action, to execute and
      deliver this Agreement and to carry out the provisions hereof, and the Person
      executing this Agreement on behalf of such Party is duly authorized to do so
      by
      all requisite corporate action;

     

    (c)  except
      as
      set forth in the License Agreement, no consent, approval, order or authorization
      of, or registration, qualification, designation, declaration or filing with,
      any
      federal, state or local governmental authority is required on the part of such
      Party in connection with the valid execution, delivery and performance of this
      Agreement, except where the failure to obtain any of the foregoing could not,
      individually or in the aggregate, reasonably be expected to materially adversely
      affect such Party’s ability to consummate the transactions contemplated herein
      or perform its obligations hereunder; 

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

    

     

    (d)  this
      Agreement is a legal and valid obligation binding upon such Party and
      enforceable in accordance with its terms, except as such enforceability may
      be
      limited by bankruptcy, insolvency, reorganization, moratorium and similar laws;
      and

     

    (e)  the
      execution, delivery and performance by it of this Agreement and its compliance
      with the terms and provisions of this Agreement does not and will not, except
      as
      set forth in the License Agreement, (i) conflict with or result in a violation
      or breach of any of the terms, conditions or provisions of its certificate
      or
      articles of incorporation or by-laws (or other comparable corporate charter
      documents); (ii) conflict with or result in a violation or breach of any term
      or
      provision of any law or order applicable to it; or (iii) (A) conflict with
      or
      result in a violation or breach of, (B) constitute (with or without notice
      or
      lapse of time or both) a default under, (C) require it to obtain any consent,
      approval or action of, make any filing with or give any notice to any Person
      as
      a result or under the terms of, any contract, instrument or license to which
      it
      is a party or by which any of its assets and properties is bound; except, in
      the
      case of (i), (ii) and (iii) above, which could not, individually or in the
      aggregate, reasonably be expected to materially adversely affect its ability
      to
      consummate the transactions contemplated herein or perform its obligations
      hereunder. 

     

    13.2  Additional
      Supplier Representations and Warranties.
      The
Supplier
      represents and warrants that:

     

    (a)  To
      fulfil
      its obligations under this Agreement, the Supplier has allocated and will
      allocate resources sufficient to perform its obligations under
      this
      Agreement.

     

    (b)  The
      Supplier will convey to Purchaser the same title that the Supplier receives
      from
      [***] to the API supplied hereunder.

     

    (c)  The
      Manufacture, generation, processing, distribution, transport, treatment,
      storage, disposal and other handling of any API until delivery to a carrier
      or
      freight forwarder shall (i) be in accordance with and conform to the
      Specifications and cGMPs, (ii) be in accordance
      with and
      conform to any applicable standards specified by the United States Pharmacopeia
      and Pharmacopeia Forum and the European Pharmacopeia and Pharmacopeial Forum,
      and (iii) otherwise conform to any provisions of the Regulatory Acts or any
      Applicable Laws not reflected in cGMPs. The API will strictly comply with the
      Specifications, shall be free from defects in materials and workmanship and
      shall not be adulterated or misbranded within the meaning of applicable
      Regulatory Acts or the United States Federal Food, Drug, and Cosmetic Act.
      At
      the time of Delivery, the API shall be in Good Condition. THE REPRESENTATIONS
      AND WARRANTIES PROVIDED IN THIS AGREEMENT DO NOT APPLY TO PRODUCTS TO THE EXTENT
      THAT, AFTER SHIPMENT, OCCURRENCES AFFECTING OR ALTERING THE PRODUCTS AFTER
      THEY
      ARE DELIVERED TO THE CARRIER, OR ACTIONS TAKEN OR FAILED TO BE TAKEN AFTER
      THE
      PRODUCTS WERE SHIPPED, THE PRODUCTS FAIL TO CONFORM TO SPECIFICATIONS. EXCEPT
      AS
      EXPRESSLY SET FORTH IN THIS ARTICLE 13, THE SUPPLIER DISCLAIMS ALL OTHER
      WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED
      WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

    

    ARTICLE
      14

    LIABILITY
      AND INDEMNIFICATION

     

    14.1  Indemnity
      by the Supplier.
      Subject
      to Section 14.4 below, the Supplier hereby agrees to indemnify, defend and
      hold harmless the Purchaser and each Purchaser Affiliate who receives a Product
      subject to indemnity hereunder and their respective directors, officers,
      employees and agents (each a “Purchaser
      Indemnitee”)
      from
      and against all losses, damages, costs, penalties, liabilities (including strict
      liabilities), judgements, amounts paid in settlement, fines and expenses
      (including court costs and reasonable fees of attorneys and other professionals)
      (“Losses”)
      arising from a Third Party Claim (a) for bodily injury, death and property
      damage caused by: (i) defects inherent in the API at the time of delivery by
      [***] to Supplier; (ii) defective API information (including any materials
      or
      samples thereof) submitted by [***] to the Supplier; or (iii) the negligence
      or
      wilful misconduct or wrongdoing of the Supplier or (b) arising with respect
      to
      any breach or non-performance of any of the Supplier’s covenants, obligations,
      representations or warranties under this Agreement. The foregoing
      indemnification obligations shall not apply in each case to the extent any
      particular Loss is a direct result of (i) the negligence or intentional
      misconduct of a Purchaser Indemnitee, or (ii) any matter for which the
      Purchaser is obligated to indemnify the Supplier pursuant to Section 14.2
      herein. Nothing in this Section 14.1 or Section 14.2 below shall be
      construed to limit, and these provisions shall be in addition to, any
      indemnification provision, in any other agreement between the
      Parties.

     

    14.2  Indemnity
      by the Purchaser.
      Subject
      to Section 14.4 below, the Purchaser shall indemnify, defend and hold the
      Supplier and Supplier Affiliates and their respective directors, officers,
      employees and agents (each a “Supplier
      Indemnitee”)
      harmless from and against all Losses arising from any Third Party Claim (a)
      for
      bodily injury, death or property damage caused by: (i) the distribution or
      marketing of Products by the Purchaser; or (ii) the negligence or wilful
      misconduct or wrongdoing of the Purchaser, or (b) arising with respect to any
      breach or non-performance of any of the Purchaser’s covenants, obligations,
      representations or warranties under this Agreement. The
      foregoing indemnification obligations shall not apply in each case to the extent
      any particular Loss is a direct result of the negligence or intentional
      misconduct of the Supplier Indemnitee, or (ii) any matter for which the
      Supplier is obligated to indemnify the Purchaser pursuant to Section 14.1
      above. Nothing in this Section 14.2 or Section 14.1 above shall be
      construed to limit, and these provisions shall be in addition to, any
      indemnification provision in and any other agreement between the
      Parties.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

    

     

    14.3     Procedures.
      

     

    (a)  In
      the
      case of a Third Party Claim made by any Person who is not a Party to this
      Agreement (or an Affiliate thereof) as to which a Party
      (the
“Indemnitor”)
      may be
      obligated to provide indemnification pursuant to this Agreement, such Party
      seeking indemnification hereunder (the “Indemnitee”)
      will
      notify the Indemnitor in writing of the Third Party Claim (and specifying in
      reasonable detail the factual basis for the Third Party Claim and, to the extent
      known, the amount of the Third Party Claim) reasonably promptly after becoming
      aware of such Third Party Claim; provided, however, that failure to give such
      notification will not affect the indemnification provided hereunder except
      to
      the extent the Indemnitor shall have been actually prejudiced as a result of
      such failure.

     

    (b)  If
      a
      Third Party Claim is made against the Indemnitee and the Indemnitor acknowledges
      in writing its obligation to indemnify the Indemnitee therefor, the Indemnitor
      will be entitled, within one hundred twenty (120) days after receipt of written
      notice from the Indemnitee of the commencement or assertion of any such Third
      Party Claim, to assume the defense thereof (at the expense of the Indemnitor)
      with counsel selected by the Indemnitor and reasonably satisfactory to the
      Indemnitee, for so long as the Indemnitor is conducting a good faith and
      diligent defense. Should the Indemnitor so elect to assume the defense of a
      Third Party Claim, the Indemnitor will not be liable to the Indemnitee for
      any
      legal or other expenses subsequently incurred by the Indemnitee in connection
      with the defense thereof; provided, however, that if under applicable standards
      of professional conduct a conflict of interest exists between the Indemnitor
      and
      the Indemnitee in respect of such claim, such Indemnitee shall have the right
      to
      employ separate counsel (which shall be reasonably satisfactory to the
      Indemnitor) to represent such Indemnitee with respect to the matters as to
      which
      a conflict of interest exists and in that event the reasonable fees and expenses
      of such separate counsel shall be paid by such Indemnitor; provided, further,
      that the Indemnitor shall only be responsible for the reasonable fees and
      expenses of one separate counsel for such Indemnitee. If the Indemnitor assumes
      the defense of any Third Party Claim, the Indemnitee shall have the right to
      participate in the defense thereof and to employ counsel, at its own expense,
      separate from the counsel employed by the Indemnitor. If the Indemnitor assumes
      the defense of any Third Party Claim, the Indemnitor will promptly supply to
      the
      Indemnitee copies of all correspondence and documents relating to or in
      connection with such Third Party Claim and keep the Indemnitee informed of
      developments relating to or in connection with such Third Party Claim, as may
      be
      reasonably requested by the Indemnitee (including, without limitation, providing
      to the Indemnitee on reasonable request updates and summaries as to the status
      thereof). If the Indemnitor chooses to defend a Third Party Claim, all
      Indemnitees shall reasonably cooperate with the Indemnitor in the defense
      thereof (such cooperation to be at the expense, including reasonable legal
      fees
      and expenses, of the Indemnitor). If the Indemnitor does not elect to assume
      control of the defense of any Third Party Claim within the one hundred twenty
      (120) day period set forth above, or if such good faith and diligent defense
      is
      not being or ceases to be conducted by the Indemnitor, the Indemnitee shall
      have
      the right, at the expense of the Indemnitor, after three (3) Business Days
      notice to the Indemnitor of its intent to do so, to undertake the defense of
      the
      Third Party Claim for the account of the Indemnitor (with counsel selected
      by
      the Indemnitee), and to compromise or settle such Third Party Claim, exercising
      reasonable business judgment; provided, however, that the Indemnitee shall
      not
      compromise or settle such Third Party Claim without the Indemnitor’s prior
      written consent (which consent shall not be unreasonably withheld) if such
      compromise or settlement would result in an admission or liability or loss
      of
      right by the Indemnitor or payment by the Indemnitor. The Indemnitor agrees
      to
      reasonably cooperate with the Indemnitee in such defense, at the Indemnitor’s
      expense, including being joined as a necessary party.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    (c)  If
      the
      Indemnitor acknowledges in writing its obligation to indemnify the Indemnitee
      for a Third Party Claim, the Indemnitee will agree to any settlement, compromise
      or discharge of such Third Party Claim that the Indemnitor may recommend that
      by
      its terms obligates the Indemnitor to pay the full amount of Losses (whether
      through settlement or otherwise) in connection with such Third Party Claim
      and
      unconditionally and irrevocably releases the Indemnitee completely from all
      liability in connection with such Third Party Claim; provided, however, that,
      without the Indemnitee’s prior written consent, the Indemnitor shall not consent
      to any settlement, compromise or discharge (including the consent to entry
      of
      any judgment), and the Indemnitee may refuse in good faith to agree to any
      such
      settlement, compromise or discharge, that provides for injunctive or other
      non-monetary relief affecting the Indemnitee. If the Indemnitor acknowledges
      in
      writing its obligation to indemnify the Indemnitee for a Third Party Claim,
      the
      Indemnitee shall not (unless required by law) admit any liability with respect
      to, or settle, compromise or discharge, such Third Party Claim without the
      Indemnitor’s prior written consent (which consent shall not be unreasonably
      withheld).

     

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

       

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

    

     

    14.4  Limitations.
      Notwithstanding any provision of this Agreement to the contrary, in no event
      shall either Party be liable to the other, or have any obligation to indemnify
      any Purchaser Indemnitee or Supplier Indemnitee, as the case may be, for any
      consequential or indirect damages or Losses including any loss of profits
      suffered by the Purchaser or the Supplier, however caused and on any theory
      of
      liability, regardless of any failure of essential purpose of any remedy
available
      under
      this Agreement. The
      foregoing limitation on liability shall not be applicable to consequential
      or
      indirect damages or Losses, including without limitation, lost profits incurred
      by the Indemnitee as a direct
      result
      of any failure by the Indemnitor to perform its obligations under this Agreement
      that the Indemnitee can demonstrate is due to wilful misconduct or gross
      negligence by the Indemnitor or any of its employees.

     

    ARTICLE
      15

    INSURANCE

     

    Each
      Party shall at all times maintain in full force and effect, with financially
      sound and reputable carriers reasonably satisfactory to the other Party, product
      liability, property, and fidelity insurance in such amounts and with such scope
      of coverage as are adequate to cover such Party’s obligations under this
      Agreement and as are appropriate companies of like size, taking into account
      the
      nature of API to be manufactured hereunder. 

     

    ARTICLE
      16

    TERM;
      TERMINATION; REMEDIES

     

    16.1  General.

     

    (a)  This
      Agreement shall commence on the Effective Date and will continue until December
      31, 2012 (the “Initial
      Term”).
      Unless
      terminated pursuant to Sections 12.2, 16.1(b), 16.1(c), 16.1(d), 16.4 or 16.7,
      this Agreement shall automatically renew for successive terms of three (3)
      years
      (each, a “Renewal
      Term”).
      The
      period from the Effective Date until the termination of the Agreement is the
      “Term”.

     

    (b)  The
      Purchaser may terminate
      this
      Agreement by delivery of a one hundred eighty (180) days advance, written
      notice.

     

    (c)  The
      Supplier may terminate
      this
      Agreement by delivery of a one hundred eighty (180) days advance, written
      notice.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

    

     

    (d)  Either
      Party may terminate this Agreement or any Firm Orders by delivery of written
      notice following expiration or termination of the License Agreement or the
      [***]
      Agreement.

     

    16.2  Manufacturing
      Site.
      The
      Purchaser may terminate this Agreement on thirty (30) days written notice if
      [***]
      changes
      the Manufacturing Site at which API is Manufactured or the process used in
      the
      Manufacture of API. Any such termination pursuant to this Section 16.2 shall
      not
      be deemed to be due to a breach by the Supplier. 

     

    16.3  Supplier
      Material Default.
      “Supplier
      Material Default”
shall
      mean the occurrence of any of the events listed below, regardless of whether
      the
      occurrence is voluntary or involuntary; provided, however, that none of the
      following occurrences shall constitute a “Supplier
      Material Default”
to
      the
      extent such occurrence is a direct result of a breach by the Purchaser of a
      representation, warranty or covenant hereunder, any failure by the Purchaser
      to
      comply with Applicable Laws to the extent they pertain to the Products or the
      Regulatory Acts, a Purchaser
      Material
      Default, the Supplier’s compliance with an order of a Regulator directed to the
      Supplier specifically regarding its compliance with cGMPs, the Regulatory Acts,
      or Applicable Laws, or a Force Majeure Event:

     

    (a)  an
      assignment or attempted assignment of this Agreement or the rights or
      obligations arising hereunder by the Supplier, in violation of this
      Agreement;

     

    (b)  insolvency
      or
      general failure of the Supplier to pay its debts as they become due; entrance
      of
      the Supplier into receivership or any arrangement with creditors generally;
      filing of a voluntary or involuntary petition or other action or proceeding
      for
      bankruptcy or reorganization or dissolution or winding-up of the Supplier;
      a
      general assignment for the benefit of the Supplier’s creditors; or a foreclosure
      or sale of a material part of the Supplier’s assets by or for the benefit of any
      creditor or governmental agency; or

     

    (c)  a
      material breach or failure by the Supplier with respect to any material
      obligation or covenant under this Agreement, including a failure to Deliver
      API
      pursuant to a Firm Order or a failure to maintain the Eighteen Month Supply
      at
      the amount required under Section 3.3, that is not remedied by the Supplier
      within thirty (30) days after receiving notice thereof or, if such breach or
      failure is susceptible of cure but cannot be reasonably cured within thirty
      (30)
      days, unless the Supplier in good faith promptly commences pursuing such cure
      and diligently and continually does so but is delayed in completion by
factors
      beyond
      its control after the use of Commercially Reasonable Efforts (but in no event
      to
      exceed ninety (90) days from the date of the Purchaser’s notice).

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

    

     

    16.4    
      Other
      Supplier Default.
      “Other
      Supplier Default”
shall
      mean the breach or failure by the Supplier with respect to any obligation,
      covenant, representation, warranty or condition under this Agreement that is
      not
      remedied by the Supplier within thirty (30) days after receiving written notice
      thereof from the Purchaser, other than a Supplier Material Default, or if such
      breach or failure is susceptible of cure but cannot be reasonably cured within
      thirty (30) days, unless the Supplier in good faith promptly commences pursuing
      such cure and diligently and continually
      does so
      but in no event to exceed sixty (60) days from the date of the Purchaser’s
      notice. Notwithstanding the foregoing, none of the foregoing occurrences shall
      constitute an Other Supplier Default to the extent such occurrence is a direct
      result of (a) a breach by the Purchaser of a representation, warranty or
      covenant hereunder, (b) any failure by the Purchaser to comply with the
      Applicable Laws or Regulatory Acts or to perform any of its obligations under
      this Agreement, (c) the Supplier’s compliance with the Specifications or an
      order of a Regulator directed to the Supplier specifically regarding its
      compliance with cGMPs, the Regulatory Acts, or Applicable Laws, or (d) a
      Force Majeure Event.

     

    16.5     Effect
      of Supplier Default.

     

    (a)  The
      Supplier Material Default.
      Upon
      the occurrence of a Supplier Material Default, the Purchaser shall have the
      right to (i) terminate this Agreement, in whole or in part, immediately or
      at such other date specified under this Agreement, or (ii) terminate any
      Firm Order issued under this Agreement, in which case the Purchaser shall bear
      no liability with respect to the terminated Firm Order, including, without
      limitation, any expenses
      incurred
      by the Supplier in connection with such terminated Firm Order. In either event,
      the Purchaser shall also be entitled to seek all other remedies available under
      law or in equity.

     

    (b)  Other
      Supplier Default.
      Upon
      the occurrence of an Other Supplier Default, the Purchaser shall
      have no
      right to terminate this Agreement, but the Purchaser shall have the right to
      seek all other remedies available under law.

     

    16.6    
      Purchaser
      Material Default.
      A
“Purchaser
      Material Default”
shall
      occur upon the Purchaser’s failure to pay an amount specified in this Agreement
      due to the Supplier under this Agreement within fifteen (15) Business Days
      after
      receiving written notice thereof from the Supplier (such notice to be
      accompanied by copies of invoices, shipping manifests and other relevant
      documentation supporting the Supplier’s claim for
      payment), other than the portion of any payment hereunder that is the subject
      of
      a pending good faith dispute identified by the Purchaser in a written notice
      delivered to the Supplier following receipt of an invoice and before such
      payment is due to the Supplier.
      

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

    

     

    16.7    
      Other
      Purchaser Default.
      “Other
      Purchaser Default”
shall
      mean the breach or failure by the Purchaser with respect to any obligation,
      covenant, representation, warranty or condition under this Agreement, other
      than
      a Purchaser Material Default, that is not remedied by the Purchaser within
      thirty (30) days after receiving written notice thereof from the Supplier,
      or if
      such breach or failure
      is
      susceptible of cure but cannot be reasonably cured within thirty (30) days,
      unless the Purchaser in good faith promptly commences pursuing such cure and
      diligently and continually does so, but in no event to exceed sixty (60) days
      from the date of the Supplier’s notice.

     

    16.8   
      Effect
      of a Purchaser Default.

     

    (a)  Purchaser
      Material Default.
      Upon
      the occurrence of a Purchaser Material Default, the Supplier shall have the
      right to terminate this Agreement immediately or at such other date specified
      under this Agreement and to seek all other remedies available under law or
      in
      equity.

     

    (b)  Other
      Purchaser Default.
      Upon
      the occurrence of an Other Purchaser Default, the Supplier shall have no right
      to terminate this Agreement, but the Supplier shall have all rights to pursue
      all other remedies available under law.

     

    16.9    Eighteen
      Month Supply.
      If the
      Eighteen Month Supply is not at the time of termination the quantity required
      under Section 3.3, at the Purchaser’s written request, the Supplier shall
      Deliver at the time of termination API that strictly complies with the
      Specifications and all other requirements of this Agreement to the Purchaser
      to
      the extent necessary to satisfy such deficiency in the Eighteen Month
      Supply.

     

    16.10  
      Remedies.
      Except
      as expressly set forth in this Agreement, none of the remedies set forth in
      this
      Agreement are intended to be exclusive, and each Party shall have available
      to
      it all remedies
      available under law or in equity. The Parties specifically acknowledge and
      agree
      that the Purchaser will have available the remedy of specific performance under
      this Agreement upon a Supplier Material Default.

     

    16.11  
      Injunctive
      Relief.
      In the
      event that either the Supplier or the Purchaser breaches or threatens to breach
      any provision of Article 11 of this Agreement, the Parties agree that
      irreparable harm to the other Party should be presumed and the
      damage
      to such Party would probably be very difficult to ascertain and would be
      inadequate. Accordingly, in the event of such circumstances,
      each of
      the Supplier and the Purchaser agree that, in addition to any other right and
      remedies available at law or in equity, the other Party shall have the right
      to
      obtain injunctive relief from any court of competent jurisdiction.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

    

     

    ARTICLE
      17

    MISCELLANEOUS

     

    17.1    
      Standard
      Forms.
      In all
      communications, the Purchaser and the Supplier may employ their standard forms
      (including terms and conditions in purchase orders and purchase order
      acknowledgements), but nothing in those forms shall be construed to modify
      or
      amend the terms
      and
conditions
      of this
      Agreement, and, in the case of any conflict herewith, the terms and conditions
      of this Agreement shall control.

     

    17.2   
      Notices.
      

     

    Notices
      to the Purchaser shall be addressed to:

    

    
      

        
          	 	
                  Inspire
                    Pharmaceuticals, Inc.

                
	 	
                  4222
                    Emperor Boulevard, Suite 200

                
	 	
                  Durham,
                    North Carolina 27703

                
	 	
                  Attention:
                    General Counsel

                
	 	
                  Facsimile
                    No.: 919-941-9797

                
	 	 
	
                  With
                    a copy to

                	
                  Smith,
                    Anderson, Blount, 

                
	 	
                  Dorsett,
                    Mitchell & Jernigan, L.L.P.

                
	 	
                  2500
                    Wachovia Capitol Center

                
	 	
                  Raleigh,
                    North Carolina 27601

                
	 	
                  Attention:
                    Christopher Capel

                
	 	
                  Facsimile
                    No.: 919-821-6800

                
	
                   

                	 
	
                  Notices
                    to the Supplier shall be addressed to:

                
	 
	
                   

                	
                  InSite
                    Vision Incorporated

                
	 	
                  965
                    Atlantic Avenue 

                
	 	
                  Alameda,
                    California 94501

                
	 	
                  Attention:
                    Chief Executive Officer

                
	 	
                  Facsimile
                    No.: 510-865-5700

                
	 	 

        

      

       

       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

    

     

    
      

      
        	
                With
                  a copy to:

              	
                O’Melveny
                  & Myers LLP

              
	
                2765
                  Sand Hill Road

              	 
	
                Menlo
                  Park, California 94025

              	 
	
                Attention:
                  Tim Curry, Esq.

              	 
	
                Facsimile
                  No.: 650-473-2601

              	 

      

    

     

    Either
      Party may change the address to which notices shall be sent by giving notice
      to
      the other Party in the manner herein provided. Any notice required or provided
      for by the terms of this Agreement shall be in writing and shall be (i) sent
      via
      a reputable overnight courier service, or (ii) sent by facsimile transmission,
      in each case properly addressed in accordance with the paragraphs above. The
      effective date of any notice shall be the actual date of receipt by the Party
      receiving the same.

     

    

    17.3    
      Independent
      Contractors.
      The
      relationship between the Parties created by this Agreement is one of independent
      contractors and is not a joint venture, partnership or any similar arrangement.
      Neither Party shall have the power or authority to bind or obligate the other
      except as expressly set forth in this Agreement.

     

    17.4    
      Certain
      Remedies.
      Each
      Party acknowledges and agrees that the other Party may be irreparably damaged
      if
      any of the provisions of this Agreement (other than provisions involving the
      payment of money) are not performed by a Party in accordance with their specific
      terms, and that any breach of, or failure to perform or comply with, this
      Agreement by a Party may not be adequately compensated in all cases by monetary
      damages alone. Accordingly, in addition to any other right or remedy to which
      a
      Party may be entitled at law or in equity, it may be entitled to enforce any
      provision of this Agreement (other than provisions involving the payment of
      money) by a decree of specific performance and to temporary, preliminary and
      permanent injunctive relief to prevent breaches or threatened breaches of any
      of
      the provisions of this Agreement, without posting any bond or other
      undertaking.

     

    17.5    
      Expenses.
      Unless
      otherwise provided herein, all costs and expenses incurred in connection with
      this Agreement and the transactions contemplated hereby shall be paid by the
      Party that shall have incurred the same and the other Party shall have no
      liability relating thereto.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

    

     

    17.6    
      No
      Third Party Beneficiaries.
      No
      person or entity other than the Parties hereto and their respective Affiliates,
      successors and permitted assigns shall be deemed an intended beneficiary
      hereunder or have any right to enforce any obligation of this
      Agreement.

     

    17.7   
      Entire
      Understanding.
      This
      Agreement, together with the Schedules and Exhibits hereto, constitutes and
      contains the complete, final and exclusive understanding and agreement of the
      Parties and cancels and supersedes any and all prior negotiations,
      correspondence, understandings and agreements whether oral or written, between
      the Parties respecting the subject matter hereof and thereof. 

     

    17.8   
      Unintentional
      Omissions.
      The
      Parties acknowledge that they have expended substantial effort in preparing
      this
      Agreement and attempting to describe, in the Schedules hereto, as thoroughly
      and
      precisely as possible, Specifications and other information. However, despite
      these efforts, the Parties acknowledge the possibility of involuntary or
      inadvertent omissions from
      the
      Schedules. The Parties will agree in writing to the changes to be made to the
      Schedules to add these inadvertent or involuntary omissions and any such written
      agreement executed by the Parties shall serve as an amendment to this
      Agreement.

     

    17.9   
      Transferability;
      Binding Effect.
      This
      Agreement may not be assigned or otherwise transferred (in whole or in part,
      whether voluntarily, by operation of law or otherwise) by either Party without
      the prior written consent of the other Party (which consent shall not be
      unreasonably withheld); provided, however, that such consent shall not be
      required in connection with (a) assignment or transfer to an Affiliate of the
      Party; (b) a merger, consolidation or reorganization of the Party, (c) a sale
      or
      transfer of all or substantially all of the voting stock, or all or
      substantially all of the assets, of the Party, or (d) a sale or transfer by
      the
      Party of all or substantially all of the assets of the Party with respect to
      its
      program related to Products. Notwithstanding the foregoing, any such assignment
      or transfer to an Affiliate shall not relieve the assigning Party of its
      responsibilities for performance of its obligations under this Agreement. The
      rights and obligations of the Parties under this Agreement shall be binding
      upon
      and inure to the benefit of the successors and permitted assigns of the Parties.
      Any attempted assignment not in accordance with this Agreement shall be
      void.

     

    17.10  
      Further
      Actions.
      Each
      Party agrees to execute, acknowledge and deliver such further instruments,
      and
      to do all such other acts, as may be necessary or appropriate in order to carry
      out the purposes and intent of this Agreement.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

    

     

    17.11  
      Amendment.
      No
      amendment, modification or supplement of any provision of this Agreement shall
      be valid or effective unless made in writing and signed by a duly authorized
      officer of each Party.

     

    17.12  
      Severability.
      If
      any
      provision hereof should be held invalid, illegal or unenforceable in any respect
      in any jurisdiction, the Parties hereto shall use reasonable efforts to
      substitute, by mutual written consent, valid provisions for such invalid,
      illegal or unenforceable provisions which valid provisions in their economic
      effect are sufficiently similar to the invalid, illegal or unenforceable
      provisions that it can be reasonably assumed that the Parties would have entered
      into this Agreement with such valid provisions. In case such valid provisions
      cannot be agreed upon, the invalid, illegal or unenforceable provisions of
      this
      Agreement shall not affect the validity of this Agreement as a whole, unless
      the
      invalid, illegal or unenforceable provisions are of such essential importance
      to
      this Agreement that it is to be reasonably assumed that the Parties would not
      have entered into this Agreement without the invalid, illegal or unenforceable
      provisions.

     

    17.13  
      Waiver.
      No
      provision of this Agreement shall be waived by any act or omission of a Party
      or
      its agents or employees except by an instrument in writing expressly waiving
      such provision and signed by a duly authorized officer of the waiving
      Party.

     

    17.14  
      Survival.
      Articles 11, 13, 14, 16 and 17 and any other provision which by its terms
      specifically shall so state, together with any obligation to make accrued but
      unpaid payments due hereunder, shall survive the termination or expiration
      of
      this Agreement until the last-to-expire of the longest statute of limitations
      governing any claims relating to the performance of this Agreement.

     

    17.15  
      No
      Strict Construction.
      This
      Agreement has been prepared jointly and shall not be strictly construed against
      either Party.

     

    17.16  
      Descriptive
      Headings; Schedules; Interpretation.

     

    (a)  The
      descriptive headings of this Agreement are for convenience only, and shall
      be of
      no force or effect in construing or interpreting any of the provisions of this
      Agreement.

     

    (b)  All
      Schedules delivered pursuant to this Agreement shall be deemed part of this
      Agreement and incorporated herein by reference, as if fully set forth herein.
      All provisions contained in any Schedule delivered by or on behalf of the
      Parties hereto, or in connection with the transactions contemplated hereby,
      are
      an integral part of this Agreement.

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

    

     

    (c)  Words
      denoting the singular include the plural and vice versa; words denoting one
      gender include all
      genders.

     

    (d)  References
      to the word “including” or “includes” are to be construed as “including without
      limitation” and “includes without limitation”.

     

    17.17  
      Counterparts;
      Facsimile Signatures.
      This
      Agreement may be executed in counterparts and such counterparts taken together
      shall constitute one and the same agreement. This Agreement may be executed
      by
      facsimile signatures, which signatures shall have the same force and effect
      as
      original signatures.

     

    17.18  
      Time
      of the Essence.
      Time
      shall be of the essence in relation to the performance of any and all of each
      Party’s obligations pursuant to this Agreement.

     

    17.19  
      Governing
      Law.
      This
      Agreement shall be governed and construed in accordance with the laws of the
      State of New York, without giving effect to any choice of law provisions
      thereof. Prior to bringing a legal action against the other Party, such dispute
      shall be separately negotiated by the Parties hereto in good faith and all
      reasonable efforts undertaken to settle amicably such matters before resorting
      to further legal recourse, as follows: upon the occurrence of a dispute between
      the Parties, including, without limitation, any breach of this Agreement or
      any
      obligation relating thereto, the matter shall be referred first to the officers
      of the Supplier and the Purchaser having responsibility for the subject matter
      of the dispute, or their designees. The officers, or their designees, as the
      case may be, shall negotiate in good faith to resolve such dispute in a mutually
      satisfactory manner for up to thirty (30) days. If such efforts do not result
      in
      mutually satisfactory resolution of the dispute, the matter shall be referred
      to
      the chief executive officers of the Supplier and the Purchaser, or their
      designees. The chief executive officers, or their designees, as the case may
      be,
      shall negotiate in good faith to resolve such dispute in a mutually satisfactory
      manner for up to thirty (30) additional days, or such longer period of time
      to
      which the chief executive officers may agree. Notwithstanding the foregoing,
      nothing in this Section 17.19 shall prevent a Party from seeking injunctive
      relief pursuant to Section 17.4.

     

    [Signature
      Page Immediately Follows]

     

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

         

      

    

    IN
      WITNESS WHEREOF, duly authorized representatives of the Parties duly executed
      this Agreement as of the Effective Date.

    

     

    
      	 	
              INSPIRE
                PHARMACEUTICALS, INC.

               

              By: __________________________

               

              Name:
                ________________________

               

              Title:
                _________________________

               

            
	 	
              INSITE
                VISION INCORPORATED

               

              By: __________________________

               

              Name:
                ________________________

               

              Title:
                _________________________

                   

            

    

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    Schedule
      1

    

    Specifications

    

     

    
      	
              TEST

            	
              METHOD

            	
              SPECIFICATION

            
	
              1.  [***]

            	
              [***]

            	
              [***]

            
	
              2.  [***]

            	
              [***]

            	
              [***]

            
	
              3.  [***]

            	
              [***]

            	
              [***]

            
	
              4.  [***]

            	
              [***]

            	
              [***]

            
	
              5.  [***]

            	
              [***]

            	
              [***]

            
	
              6.  [***]

            	
              [***]

            	
              [***]

            
	
              7.  [***]

            	
              [***]

            	
              [***]

            
	
              8.  [***]

            	
              [***]

            	
              [***]

            
	
              9.  [***]

            	
              [***]

            	
              [***]

            
	
              10.  [***]

            	
              [***]

            	
              [***]

            

    

     

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          36

          
            

          

        

        
          
          

        

      

    

    Schedule
      2

     

    Price

     

    

     

    The
      price
      shall be the [***] the [***] Agreement (for the calendar year 2007 such cost
      is
      [***] of API) plus [***].

     

     

     

     

     

     

    
       

      
        	
                *Indicates
                  that certain information contained herein has been omitted and
                  filed
                  separately with the Securities and Exchange Commission. Confidential
                  treatment has been requested with respect to the omitted
                  portions.

              

      

       

      
        
          
          

        

        
          37

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