Document:

EX-10.43  ENCOMPASS PHARMACEUTICAL SERVICES, INC.

 

Exhibit 10.43

PROPOSAL NUMBER: 2006-115

Cyclosporin Method Validation and Analytical Testing

PORTIONS OF THIS EXHIBIT MARKED “[* * *]” HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, AND THE OMITTED PORTIONS HAVE BEEN FILED SEPARATELY IN PAPER FORM WITH THE SECURITIES AND
EXCHANGE COMMISSION.

PROPOSAL FOR:

Cyclosporin Method Validation and Analytical Testing

for Sirion Therapeutics

SUBMITTED TO:

Bill Stringer

Manufacturing and Compliance

Sirion Therapeutics

August 3, 2006

FROM:

ENCOMPASS PHARMACEUTICAL SERVICES, INC.

1

 

PROPOSAL NUMBER: 2006-115

Cyclosporin Method Validation and Analytical Testing

August 3, 2006

	 	 	 
	Attention:

	 	Bill Stringer
	 

	 	Vice President
	 

	 	Manufacturing and Compliance
	 

	 	Sirion Therapeutics

Subject: Cyclosporin Method Validation and Analytical Testing

This proposal will include the following sections:

	 	 	 	 	 
	 

	 	- Section I
	 	(Company Information)
	 
	 	 	 	 
	 

	 	- Section II
	 	(Project Overview and Scope)
	 
	 	 	 	 
	 

	 	- Section III
	 	(Responsibilities, Standard Terms and Conditions, Cost Proposal,
Statement of Commitment, Proposal Acceptance Sheet)
	 
	 	 	 	 
	 

	 	- Section IV
	 	(Attachments)

Encompass Pharmaceutical Services, Inc., hereafter referred to as Encompass, is pleased to present
to Sirion Therapeutics in Tampa, Florida, the estimated prices for the execution of Cyclosporin
Method Validation and Analytical Testing. We have had extensive experience in these types of
projects, especially with Ophthalmics, and working in a global environment. We are confident that
the expertise of Encompass professionals will exceed your expectations for the project completion
and we look forward to developing a strong working relationship with Sirion Therapeutics.

If you have any questions or need additional information, do not hesitate to contact me at:

(770) 248-4501

Sincerely,

/s/ T. Rowe

T.Rowe

President

2

 

PROPOSAL NUMBER: 2006-115

Cyclosporin Method Validation and Analytical Testing

	 	 	 	 	 
	TABLE OF CONTENTS	 	 	 	 
	 
	 	 	 	 
	Introduction
	 	 	4	 
	 
	 	 	 	 
	Corporate Information
	 	 	4	 
	 
	 	 	 	 
	Business Justification
	 	 	4	 
	 
	 	 	 	 
	Section 1
	 	 	5	 
	 
	 	 	 	 
	1.1 Project Overview
	 	 	5	 
	 
	 	 	 	 
	1.2 Project Scope
	 	 	5	 
	 
	 	 	 	 
	Section 2
	 	 	6	 
	 
	 	 	 	 
	2.1 Responsibilities
	 	 	6	 
	 
	 	 	 	 
	2.2 Standard Terms and Conditions
	 	 	7	 
	 
	 	 	 	 
	2.3 Cost Proposal
	 	 	8	 
	 
	 	 	 	 
	2.4 Invoicing and Payments
	 	 	9	 
	 
	 	 	 	 
	2.5 Statement of Commitment
	 	 	10	 
	 
	 	 	 	 
	2.6 Proposal Acceptance Sheet
	 	 	11	 
	 
	 	 	 	 
	Section 3
	 	 	12	 
	 
	 	 	 	 
	Attachments
	 	 	 	 
	 
	 	 	 	 
	1. Cost assessment
	 	 	 	 

3

 

PROPOSAL NUMBER: 2006-115

Cyclosporin Method Validation and Analytical Testing

COMPANY INFORMATION

     Encompass Pharmaceutical Services, Inc.

Corporate Information:

Encompass Pharmaceutical Services Inc is a Georgia based service company with a focus on providing
commercialization support to the Pharmaceutical Industry. Currently the Organization consists of
two major segments, the analytical services division and the quality and validation services
division. Encompass Pharmaceutical Services, Inc. is mostly comprised of former employees of the
Ophthalmics division of Novartis Pharmaceuticals, although the individual expertise ranges across
many formulation types.

Our analytical personnel are experienced in the testing of liquid dosage forms as well other dosage
forms including solids, powders, lyophilized products, etc. Our Validation and Quality Services
division strengths are in the area of sterile liquid and Freeze dried products. In addition,
Encompass personnel have significant experience in the management of both quality improvement and
development projects.

Notable is our strength and experience with method and product transfers on a global project level.
Encompass is comprised of a team of former Novartis personnel who were responsible for global
method and transfer activities

As an organization of personnel whose former responsibilities included the quality oversight of
contract manufacturing, we recognize the importance of building trust with our customers by
insuring the integrity in all of our interactions and in supplying a service whose quality provides
significant benefit to our customers.

Business Justification:

The expertise of Encompass is a perfect fit for the Cyclosporin Project. With competitive prices,
Encompass provides much more than an analytical lab whenever necessary. This expertise will help to
ensure the successful launch of the product.

4

 

PROPOSAL NUMBER: 2006-115

Cyclosporin Method Validation and Analytical Testing

     SECTION 1

PROJECT OVERVIEW AND SCOPE

1.1 Project Overview

The overall scope of this project is to complete the Cyclosporin Method Validations and other
Analytical Testing as described in the cost assessment in Attachment 1.

1.2 Project Scope:

Encompass will provide the testing and evaluation services described in the cost assessment
included in Attachment 1. This document lists the activities required for performing the necessary
analytical activities.

5

 

PROPOSAL NUMBER: 2006-115

Cyclosporin Method Validation and Analytical Testing

     SECTION 2

2.1 RESPONSIBILITIES

	 	1.1.1	 	Encompass Pharmaceutical Services, Inc
	 
	 	1.1.1.1	 	Upon acceptance of this proposal and contract, Encompass agrees to provide the
following:

	 	—	 	Develop protocols for the execution of the method validations,
extraction/migration study, and dosing study
	 
	 	—	 	Execution of the signed protocols
	 
	 	—	 	 Writing and approving the final reports
	 
	 	—	 	Qualification of Equipment will be complete prior to being used
in the performance of the testing activities
	 
	 	—	 	Personnel will be adequately trained and qualified to perform
the testing.
	 
	 	—	 	Encompass will be in compliance with all applicable laws and
regulations including cGMPs.
	 
	 	—	 	Data will be retained by Encompass and a copy of the final
results of each test interval provided to Sirion Therapeutics at its
completion.
	 
	 	—	 	Personnel will manage all information received from Sirion
Therapeutics or its affiliates under strict confidentiality in accordance with
the Confidential Disclosure Agreement by and between the parties.
	 
	 	—	 	Updates on the project’s execution will be provided to Sirion
Therapeutics or its designee on a regular scheduled basis, as agreed upon.

	 	1.1.2	 	Sirion Therapeutics (Sirion)
	 
	 	1.1.2.1	 	Upon acceptance of this proposal and contract, Sirion Therapeutics agrees to provide
the following:

	 	—	 	Timely supply of the samples, raw. materials, and reference
standards required for the performance of the activities defined by this
proposal.
	 
	 	—	 	Any information, documentation, and specifications available,
as deemed necessary in order to facilitate the execution of the scope of work.
	 
	 	—	 	Timely Review and approve all protocols and Reports generated
by Encompass in the execution of this agreement.
	 
	 	—	 	Training on any Sirion Therapeutics applicable contractor
procedures in order to facilitate the execution of the scope of work.

6

 

PROPOSAL NUMBER: 2006-115

Cyclosporin Method Validation and Analytical Testing

2.2 STANDARD TERMS AND CONDITIONS

Approval of this document, associated protocols, or an approved purchase Order number document will
serve as acceptance to initiate the project. Any out-of-scope change order requires the written
approval of an authorized representative of both parties.

Encompass will not be held liable for any claims related to the products or activities of Sirion
Therapeutics as a result of their performance of the testing as defined by this agreement and the
protocols signed by Sirion Therapeutics , unless such claim is a result of the gross negligence,
willful misconduct or lack of adherence to cGMP’s of Encompass. If the testing performed hereunder
has been demonstrated to be not in accordance with the testing procedures and protocols developed
pursuant to this agreement, Encompass’s only liability to Sirion Therapeutics is to repeat testing
as required.

Sirion Therapeutics will indemnify and hold harmless Encompass for all claims arising out of the
sale or distribution of any Sirion Therapeutics products covered by this agreement.

Encompass will manage and monitor activities to assure timely completion of project, however, any
delay or failure of Encompass during the execution of the project caused by change of scope, lack
of support from Sirion Therapeutics, delays from Sirion Therapeutics due to a submission of
required documentation, reviews or approval of documentation, changes in priorities, acts of God,
strike, fire, storm, flood, windstorm, hurricane, war, or any other cause or causes beyond the
reasonable control of Encompass, shall be excused. If necessary and appropriate, the time for
performing the required activities shall be extended or re-negotiated for a period of time
reasonably necessary to overcome the effect of such delays and applicable costs should be assigned
to project budget.

In the event that Sirion Therapeutics decides to cancel this contract for convenience before the
negotiated activities are completed, Sirion Therapeutics agrees to pay a cancellation fee of [* *
*] of the total contract amount yet to be completed, as well as expenses incurred through the
cancellation date specific to the activities being performed.

7

 

PROPOSAL NUMBER: 2006-115

Cyclosporin Method Validation and Analytical Testing

2.3 COST PROPOSAL

Project Cost

A detailed breakdown of the costs to perform the analytical activities is presented in Attachment
1.

Sirion Therapeutics will pay Encompass on a [* * *] basis as each test interval is completed.
Encompass will use commercially reasonable efforts to complete the Services and Deliverables within
the estimated timelines

The total estimate for these activities is [* * *] for the activities set forth in the attachment.

This estimate does not cover methods development. If further development of any of the methods is
required, once mutually agreed upon by Sirion Therapeutics and Encompass, a rate of [* * *] will be
billed to cover these costs. The estimate also does not cover laboratory investigations where the
conclusion is a root cause assignable to the product, its manufacture, componentry, etc. In this
case, Sirion Therapeutics will be billed for the activities associated with the investigation.

In most cases, supplies, such as columns and reagents required to perform the activities associated
with this proposal are included in the cost assessment provided to Sirion Therapeutics. If any
column or reagent is required that represents more than [* * *] of the total price for that
method’s activity, the difference will be billed to Sirion Therapeutics upon prior notice with
appropriate documentation. These supplies and columns will be returned to Sirion Therapeutics at
the completion of the project, as appropriate.

If Encompass has reason to believe that the expected final price to Sirion Therapeutics will differ
from the Estimated Budget, Encompass shall immediately notify Sirion Therapeutics and provide a
revised Estimated Budget for performing the work. Sirion Therapeutics shall have the option to:

	 	(i)	 	Accept the revised Estimated Budget.
	 
	 	(ii)	 	Revise the Scope of Work so that the Services can be performed
at the current Estimated Budget.
	 
	 	(iii)	 	Terminate this Agreement, without any cancellation fee
provided the change in final price is not due to scope changes or new
requirements imposed by Merial [sic].

8

 

PROPOSAL NUMBER: 2006-115

Cyclosporin Method Validation and Analytical Testing

2.4 INVOICING AND PAYMENTS

[* * *]

Sirion Therapeutics will be
invoiced on a [* * *] basis for analytical services as they are
completed. The details of completed services will be included in each invoices.

If travel is required for
the completion of this project, travel expenses will be pre-approved by
Sirion Therapeutics and charged to Sirion Therapeutics as a pass through as incurred.

Payments will be made in
accordance with invoices presented to Sirion Therapeutics at each invoice
period; Payments are due and payable [* * *] of invoice date. A penalty charge of 1.5%
per month will be applied for any late payments.

Payment shall be made to
the following address:

	 	 	 
	 

	 	ENCOMPASS PHARMACEUTICAL SERVICES, INC.
	 

	 	150 Technology Parkway NW
	 

	 	Norcross, GEORGIA 30092
	 

	 	770-248-4501 / FAX: 770-248-4501
	 
	 	 
	 

	 	Attention: Customer Accounts

9

 

PROPOSAL NUMBER: 2006-115

Cyclosporin Method Validation and Analytical Testing

2.5 STATEMENT OF COMMITMENT

Encompass certifies that our associates are in conformance with the U.S. Code of Federal
Regulations Subpart 211. Our facilities and personnel are qualified to perform the testing services
described and experienced to advise on the subject for which they are retained. Encompass did not
and will not use in any capacity the services of any person debarred under section 306 of the
Federal Food, Drug, and Cosmetic Act as published in the Federal Register.

To indicate your acceptance of the terms and conditions of this proposal, please sign the attached
Proposal Acceptance Sheet and return to my attention Or, if you prefer, please submit a purchase
order for our immediate execution which states that it is subject to Encompass proposal 2006-115
for Sirion Therapeutics.

Encompass is ready to begin work upon your authorization to proceed. Thank you for your interest in
Encompass Pharmaceutical Services and for the opportunity to present this proposal. You can be
assured that Encompass Pharmaceutical Services will give your project the attention, dedication,
and professionalism that it deserves.

10

 

PROPOSAL NUMBER: 2006-115

Cyclosporin Method Validation and Analytical Testing

2.6 PROPOSAL ACCEPTANCE SHEET

PROPOSAL NUMBER: 2006-115

PROPOSAL FOR Cyclosporin Method Validation and Analytical Testing

Proposal Submitted By: ENCOMPASS PHARMACEUTICAL SERVICES, INC.

Name: Thomas Rowe;

Title: President

Date: August 3, 2006

Attention: Bill Stringer

This is to confirm the acceptance of Encompass Pharmaceutical Services, Inc. Proposal No. 2006-115
for the Cyclosporin Method Validation and Analytical Testing

Proposal Accepted By:

	 	 	 	 	 	 	 	 	 
	 	 	Name: William Stringer	 	 	 	/s/ William Stringer
	 

	 	 	 	Print
	 	 	 	Signature
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Print
	 	 	 	Signature
	 
	 	 	 	 	 	 	 	 
	 	 	Title: VP Manufacturing & Compliance	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Date: August 9, 2006	 	 	 	 

Please return one (1) copy of this Proposal Acceptance Sheet to:

	 	 	 
	 

	 	ENCOMPASS PHARMACEUTICAL SERVICES, INC.
	 

	 	150 Technology Parkway NW
	 

	 	Norcross, GEORGIA 30092
	 

	 	770-248-4501 / FAX: 770-248-4501

11

 

PROPOSAL NUMBER: 2006-115

Cyclosporin Method Validation and Analytical Testing

SECTION IV

Attachments

Attachment Detailed cost analysis for Sirion Therapeutics proposal 2006-115

[* * *]

12EX-10.44  ENCOMPASS PHARMACEUTICAL SERVICES, INC.

 

Exhibit 10.44

PROPOSAL NUMBER: 2006-110

Difluprednate Ophthalmic Solution Stability Program

PORTIONS OF THIS EXHIBIT MARKED “[* * *]” HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, AND THE OMITTED PORTIONS HAVE BEEN FILED SEPARATELY IN PAPER FORM WITH THE SECURITIES AND
EXCHANGE COMMISSION.

PROPOSAL FOR:

Stability Program for Difluprednate Ophtahlmic Solution

for Sirion Therapeutics

SUBMITTED TO:

Bill Stringer

Manufacturing and Compliance

Sirion Therapeutics

August 7, 2006

FROM:

ENCOMPASS PHARMACEUTICAL SERVICES, INC.

1

 

PROPOSAL NUMBER: 2006-110

Difluprednate Ophthalmic Solution Stability Program

August 7, 2006

Attention: Bill Stringer

Vice President

Manufacturing and Compliance

Sirion Therapeutics

Subject: Difluprednate Ophthalmic Solution Stability Program

This proposal will include the following sections:

	 	 	 	 	 
	 

	 	— Section I
	 	(Company Information)
	 
	 	 	 	 
	 

	 	— Section II
	 	(Project Overview and Scope)
	 
	 	 	 	 
	 

	 	— Section III
	 	(Responsibilities, Standard Terms and Conditions, Cost Proposal,
Statement of Commitment, Proposal Acceptance Sheet)
	 
	 	 	 	 
	 

	 	— Section IV
	 	(Attachments)

Encompass Pharmaceutical Services, Inc., hereafter referred to as Encompass, is pleased to present
to Sirion Therapeutics in Tampa, Florida, the estimated prices for the execution of the stability
program for Difluprednate Ophtahlmic Solution. We have had extensive experience in these types of
projects especially with Ophthalmics, and working in a global environment. We are confident that
the expertise of Encompass professionals will exceed your expectations for the project completion
and we look forward to developing a strong working relationship with Sirion Therapeutics.

If you have any questions or need additional information, do not hesitate to contact me at:

(770) 248-4501

	 	 	 	 	 
	 

	 	Sincerely,	 	 
	 
	 	 	 	 
	 

	 	/s/ T. Rowe	 	 
	 
	 	 	 	 
	 

	 	T. Rowe President	 	 

2

 

PROPOSAL NUMBER: 2006-110

Difluprednate Ophthalmic Solution Stability Program

TABLE OF CONTENTS

	 	 	 	 	 
	Introduction 
	 	 	4	 
	 
	 	 	 	 
	Corporate Information 
	 	 	4	 
	 
	 	 	 	 
	Business Justification 
	 	 	4	 
	 
	 	 	 	 
	Section 1 
	 	 	5	 
	 
	 	 	 	 
	1.1 Project Overview 
	 	 	5	 
	 
	 	 	 	 
	1.2 Project Scope 
	 	 	5	 
	 
	 	 	 	 
	Section 2 
	 	 	6	 
	 
	 	 	 	 
	2.1 Responsibilities 
	 	 	6	 
	 
	 	 	 	 
	2.2 Standard Terms and Conditions 
	 	 	7	 
	 
	 	 	 	 
	2.3 Cost Proposal 
	 	 	8	 
	 
	 	 	 	 
	2.4 Invoicing and Payments 
	 	 	9	 
	 
	 	 	 	 
	2.5 Statement of Commitment 
	 	 	10	 
	 
	 	 	 	 
	2.6 Proposal Acceptance Sheet 
	 	 	11	 
	 
	 	 	 	 
	Section 3 
	 	 	12	 

Attachments

	 	1.	 	Cost assessment

3

 

PROPOSAL NUMBER: 2006-110

Difluprednate Ophthalmic Solution Stability Program

	 	 	 	 	 	 	 
	 

	 	INTRODUCTION	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	COMPANY INFORMATION
	 	 
	 
	 	 	 	 	 	 
	 

	 	Encompass Pharmaceutical Services, Inc.	 	 	 	 

Corporate Information:

Encompass Pharmaceutical Services Inc is a Georgia based service company with a focus on providing
commercialization support to the Pharmaceutical Industry. Currently the Organization consists of
two major segments, the analytical services division and the quality and validation services
division. Encompass Pharmaceutical Services, Inc. is mostly comprised of former employees of the
Ophthalmics division of Novartis Pharmaceuticals, although the individual expertise ranges across
many formulation types.

Our analytical personnel are experienced in the testing of liquid dosage forms as well other dosage
forms including solids, powders, lyophilized products, etc. Our Validation and Quality Services
division strengths are in the area of sterile liquid and Freeze dried products. In addition,
Encompass personnel have significant experience in the management of both quality improvement and
development projects.

Notable is our strength and experience with method and product transfers on a global project level.
Encompass is comprised of a team of former Novartis personnel who were responsible for global
method and transfer activities

As an organization of personnel whose former responsibilities included the quality oversight of
contract manufacturing, we recognize the importance of building trust with our customers by
insuring the integrity in all of our interactions and in supplying a service whose quality provides
significant benefit to our customers.

Business Justification:

The expertise of Encompass is a perfect fit for the Difluprednate Ophthalmic Solution Project. With
competitive prices, Encompass provides much more than an analytical lab whenever necessary. This
expertise will help to ensure the successful launch of the product.

4

 

PROPOSAL NUMBER: 2006-110

Difluprednate Ophthalmic Solution Stability Program

	 	 	 	 	 	 	 
	 

	 	SECTION 1	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	PROJECT OVERVIEW AND SCOPE
	 	 

	1.1	 	Project Overview
	 
	 	 	The overall scope of this project is to complete the stability program for Difluprednate as
described in the cost assessment in
Attachment 1.
	 
	1.2	 	Project Scope:
	 
	 	 	Encompass will provide the sample storage, testing and evaluation services described in the
cost assessment included in Attachment 1. This document lists the activities required for
performing the necessary analytical activities, including a successful method transfer and
storage parameters and costs.

5

 

PROPOSAL NUMBER: 2006-110

Difluprednate Ophthalmic Solution Stability Program

	 	 	 	 	 
	 

	 	SECTION 2	 	 
	 
	 	 	 	 
	 

	 	 	 	2.1 RESPONSIBILITIES

	2.1.1	 	Encompass Pharmaceutical Services, Inc
	 
	 	 	Upon acceptance of this proposal and contract, Encompass agrees to provide the
following:

	 	—	 	Develop protocol for the execution of the method transfer
	 
	 	—	 	Execution of the signed protocol
	 
	 	—	 	Writing and approving the fmal report for the method transfer
	 
	 	—	 	Storage of stability samples at eth appropriate conditions
	 
	 	—	 	Qualification of Equipment will be complete prior to being used
in the performance of the testing activities
	 
	 	—	 	Personnel will be adequately trained and qualified to perform
the testing.
	 
	 	—	 	Encompass will be in compliance with all applicable laws and
regulations including cGMPs.
	 
	 	—	 	Data will be retained by Encompass and a copy of the final
results of each test interval provided to Sirion Therapeutics at its
completion.
	 
	 	—	 	Personnel will manage all information received from Sirion
Therapeutics or its affiliates under strict confidentiality in accordance with
the Confidential Disclosure Agreement by and between the parties.
	 
	 	—	 	Updates on the project’s execution will be provided to Sirion
Therapeutics or its designee on a regular scheduled basis, as agreed upon.

	2.1.2	 	Sirion Therapeutics (Sirion)
	 
	 	 	Upon acceptance of this proposal and contract, Sirion Therapeutics agrees to provide
the following:

	 	—	 	Timely supply of the samples, raw materials, and reference
standards required for the performance of the activities defined by this
proposal.
	 
	 	—	 	Any information, documentation, and specifications available,
as deemed necessary in order to facilitate the execution of the scope of work.
	 
	 	—	 	Timely Review and approve all protocols and Reports generated
by Encompass in the execution of this agreement.
	 
	 	—	 	Training on any Sirion Therapeutics applicable contractor
procedures in order to facilitate the execution of the scope of work.
	 
	 	—	 	A Horiba LA-950 or equivalent particle analyzer to test
Difluprednate Ophtahlmic Solution

6

 

PROPOSAL NUMBER: 2006-110

Difluprednate Ophthalmic Solution Stability Program

	 	 	 	 	 
	 

	 	 	 	2.2 STANDARD TERMS AND CONDITIONS

	 	 	Approval of this document, associated protocols, or an approved Purchase Order number
document will serve as acceptance to initiate the project. Any out-of-scope change order
requires the written approval of an authorized representative of both parties.
	 
	 	 	Encompass will not be held liable for any claims related to the products or activities of
Sirion Therapeutics as a result of their performance of the testing as defined by this
agreement and the protocols signed by Sirion Therapeutics, unless such claim is a result of
the gross negligence, willful misconduct, or lack of adherence to cGMPs of Encompass. If the
testing performed hereunder has been demonstrated to be not in accordance with the testing
procedures and protocols developed pursuant to this agreement, Encompass’s only liability to
Sirion Therapeutics is to repeat testing as required.
	 
	 	 	Sirion Therapeutics will indemnify and hold harmless Encompass for all claims arising out of
the sale or distribution of any Sirion Therapeutics products covered by this agreement.
	 
	 	 	Encompass will manage and monitor activities to assure timely completion of project,
however, any delay or failure of Encompass during the execution of the project caused by
change of scope, lack of support from Sirion Therapeutics, delays from Sirion Therapeutics
due to a submission of required documentation, reviews or approval of documentation, changes
in priorities, acts of God, strike, fire, storm, flood, windstorm, hurricane, war, or any
other cause or causes beyond the reasonable control of Encompass, shall be excused. If
necessary and appropriate, the time for performing the required activities shall be extended
or re-negotiated for a period of time reasonably necessary to overcome the effect of such
delays and applicable costs should be assigned to project budget.
	 
	 	 	In the event that Sirion Therapeutics decides to cancel this contract for convenience before
the negotiated activities are completed, Sirion. Therapeutics agrees to pay a cancellation
fee of [* * *] of the total contract amount yet to be completed, as well a expenses incurred
through the cancellation date specific to the activities being performed.

7

 

PROPOSAL NUMBER: 2006-110

Difluprednate Ophthalmic Solution Stability Program

	 	 	 	 	 
	 

	 	 	 	2.3 COST PROPOSAL

	 	 	A. detailed breakdown of the costs to perform the support activities is presented in
Attachment 1.
	 
	 	 	Sirion Therapeutics will pay Encompass on a [* * *] basis as each test interval is
completed. Encompass will use commercially reasonable efforts to complete the Services and
Deliverables within the estimated timelines.
	 
	 	 	The total estimate for these activities is [* * *] for the activities set forth in the
attachment. The completion date for the activities through method transfer to the new
manufacturing site is specified in the attached project plan.
	 
	 	 	This estimate does not cover methods development. If further development of any of the
methods is required, once mutually agreed upon by Sirion Therapeutics and Encompass, a rate
of [* * *] will be billed to cover these costs. The estimate also does not cover laboratory
investigations where the conclusion is a root cause assignable to the product, its
manufacture, componentry, etc. In this case, Sirion Therapeutics will be billed for the
activities associated with the investigation.
	 
	 	 	In most cases, supplies, such as columns and reagents required to perform the activities
associated with this proposal are included in the cost assessment provided to Sirion
Therapeutics. If any column or reagent is required that represents more than [* * *] of the
total price for that method’s activity, the difference will be billed to Sirion Therapeutics
upon prior notice with appropriate documentation. These supplies and columns will be
returned to Sirion Therapeutics at the completion of the project, as appropriate.
	 
	 	 	If Encompass has reason to believe that the expected final price to Sirion Therapeutics will
differ from the Estimated Budget, Encompass shall immediately notify Sirion Therapeutics and
provide a revised Estimated Budget for performing the work. Sirion Therapeutics shall have
the option to:

	 	(i)	 	Accept the revised Estimated Budget.
	 
	 	(ii)	 	Revise the Scope of Work so that the Services
can be performed at the current Estimated Budget.
	 
	 	(iii)	 	Terminate this Agreement, without any
cancellation fee provided the change in final price is not due to scope
changes or new requirements imposed by Sirion Therapeutics.

8

 

PROPOSAL NUMBER: 2006-110

Difluprednate Ophthalmic Solution Stability Program

	 	 	 	 	 
	 

	 	 	 	2.4 INVOICING AND PAYMENTS

	 	 	[* * *]
	 
	 	 	Sirion Therapeutics will be invoiced on a [* * *]
basis for services provided based on completion of
each test interval as broken down in the cost proposal (attachment 1). The details of
completed services will be included in each invoice.
	 
	 	 	If travel is required for the completion of this project, travel expenses will be pre-
approved by Sirion Therapeutics and charged to Sirion Therapeutics as a pass through as
incurred.
	 
	 	 	Payments will be made in accordance with invoices presented to Sirion Therapeutics at each
invoice period. Payments are due and payable [* * *] of
invoice date. A penalty charge of 1.5% per month will be applied for
any late payments.
	 
	 	 	Payment shall be made to the following address:

	 	 	 
	 

	 	ENCOMPASS PHARMACEUTICAL SERVICES, INC.
	 

	 	150 Technology Parkway NW
	 

	 	Norcross, GEORGIA 30092
	 

	 	770-248-4501 / FAX: 770-248-4501
	 
	 	 
	 

	 	Attention: Customer Accounts

9

 

PROPOSAL NUMBER: 2006-110

Difluprednate Ophthalmic Solution Stability Program

	 	 	 	 	 
	 

	 	 	 	2.5 STATEMENT OF COMMITMENT

	 	 	Encompass certifies that our associates are in conformance with the U.S. Code of Federal
Regulations Subpart 211. Our facilities and personnel are qualified to perform the testing
services described and experienced to advise on the subject for which they are retained.
Encompass did not and will not use in any capacity the services of any person debarred under
section 306 of the Federal :F00 Drug, and Cosmetic Act as published in the Federal Register.
	 
	 	 	To indicate your acceptance of the terms and conditions of this proposal, please sign the
attached Proposal Acceptance Sheet and return to my attention. Or, if you prefer, please
submit a purchase order for our immediate execution which states that it is subject to
Encompass proposal 2006-110 for Sirion Therapeutics.
	 
	 	 	Encompass is ready to begin work upon your authorization to proceed. Thank you for your
interest in Encompass Pharmaceutical Services and for the opportunity to present this
proposal. You can be assured that Encompass Pharmaceutical Services will give your project
the attention, dedication, and professionalism that it deserves.

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PROPOSAL NUMBER: 2006-110

Difluprednate Ophthalmic Solution Stability Program

	 	 	 	 	 
	 

	 	 	 	2.6 PROPOSAL ACCEPTANCE SHEET

PROPOSAL NUMBER: 2006-110

PROPOSAL FOR Difluprednate Opthalmic Solution Stability Program

Proposal Submitted By: ENCOMPASS PHARMACEUTICAL SERVICES, INC.

Name: Thomas Rowe

Title: President

Date: August 7, 2006

Attention: Bill Stringer

This is to confirm the acceptance of Encompass Pharmaceutical Services, Inc. Proposal No.

2006-110 for the Difluprednate Opthalmic Solution Stability Program

Proposal Accepted By:

	 	 	 	 	 	 	 
	 	 	Name:William Stringer	 	/s/ William Stringer
	 
	 	 	 	 	 	 
	 

	 	 	 	Print
	 	Signature
	 
	 	 	 	 	 	 
	 	 	Title: VP Manufacturing & Compliance	 	 
	 
	 	 	 	 	 	 
	 	 	Date: August 9, 2006	 	 
	 
	 	 	 	 	 	 
	 	 	Name: Barry Butler	 	/s/ Barry Butler
	 
	 	 	 	 	 	 
	 

	 	 	 	Print
	 	Signature
	 
	 	 	 	 	 	 
	 	 	Title: CEO	 	 
	 
	 	 	 	 	 	 
	 	 	Date: August 9, 2006	 	 

Please return one (1) copy of this Proposal Acceptance Sheet to:

	 	 	 
	 

	 	ENCOMPASS PHARMACEUTICAL SERVICES, INC.
	 

	 	150 Technology Parkway NW
	 

	 	Norcross, GEORGIA 30092
	 

	 	770-248-4501 / FAX: 770-248-4501

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PROPOSAL NUMBER: 2006-110

Difluprednate Ophthalmic Solution Stability Program

Difluprednate Stability Cost Assessment (Attachment 1)

[* * *]

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