Document:

Collaborative Research, Development and License Agreement, dated March 27, 2003

 Exhibit 10.15 
  

			
	 	 	Certain confidential information contained in this document, marked by brackets and asterisks, has been omitted pursuant to a request for confidential treatment pursuant to 17 C.F.R
§§ 200.80(b)(4) and 200.83 and Rule 406 under the Securities Act of 1933, as amended, and has been filed separately with the Securities and Exchange Commission.

  
 COLLABORATIVE
RESEARCH, DEVELOPMENT 
  
 AND LICENSE AGREEMENT

  
 By and Among 
  
 ACADIA PHARMACEUTICALS INC., 
  
 ALLERGAN, INC. 
  
 and 
  
 ALLERGAN SALES, LLC 
  

 TABLE OF CONTENTS 
  

					
	 	 	 	  	PAGE

			
	 1.
	 	 DEFINITIONS
	  	1
			
	 	 	 1.1 “ACADIA Know-How”
	  	1
			
	 	 	 1.2 “ACADIA Patents”
	  	2
			
	 	 	 1.3 “ACADIA Product”
	  	2
			
	 	 	 1.4 “ACADIA Reversion Product”
	  	2
			
	 	 	 1.5 “ACADIA Royalty-Free Product”
	  	2
			
	 	 	 1.6 “ACADIA Technology”
	  	2
			
	 	 	 1.7 “Active Compound”
	  	2
			
	 	 	 1.8 “Affiliate”
	  	2
			
	 	 	 1.9 “Allergan Know-How”
	  	2
			
	 	 	 1.10 “Allergan Patents”
	  	3
			
	 	 	 1.11 “Allergan Product”
	  	3
			
	 	 	 1.12 “Allergan Technology”
	  	3
			
	 	 	 1.13 “Alpha Adrenergic Research Plan”
	  	3
			
	 	 	 1.14 “Alpha Adrenergic Research Program”
	  	3
			
	 	 	 1.15 “Amendment”
	  	3
			
	 	 	 1.16 “Chemical-Genomics Asset List”
	  	3
			
	 	 	 1.17 “Chemical-Genomics Project”
	  	3
			
	 	 	 1.18 “Chemistry”
	  	3
			
	 	 	 1.19 “Collaboration”
	  	4
			
	 	 	 1.20 “Collaboration Know-How”
	  	4
			
	 	 	 1.21 “Collaboration Patents”
	  	4
			
	 	 	 1.22 “Collaboration Target/Chemistry”
	  	4
			
	 	 	 1.23 “Collaboration Technology”
	  	4
			
	 	 	 1.24 “Confidential Information”
	  	4
			
	 	 	 1.25 “Control”
	  	4
			
	 	 	 1.26 “Designated Target”
	  	4
			
	 	 	 1.27 “Designated Target/Chemistry”
	  	4
			
	 	 	 1.28 “Designated Target Project”
	  	4
			
	 	 	 1.29 “Development Candidate”
	  	5

  

 -i- 

 TABLE OF CONTENTS 
 (CONTINUED) 
  

					
	 	 	 	  	PAGE

			
	 	 	 1.30 “Excluded Targets”
	  	5
			
	 	 	 1.31 “Expanded Field”
	  	5
			
	 	 	 1.32 “Field”
	  	5
			
	 	 	 1.33 “First Commercial Sale”
	  	5
			
	 	 	 1.34 “FDA”
	  	5
			
	 	 	 1.35 “FTE”
	  	5
			
	 	 	 1.36 “Good Laboratory Practices” or “GLP”
	  	6
			
	 	 	 1.37 “Good Manufacturing Practices” or “GMP”
	  	6
			
	 	 	 1.38 “IND”
	  	6
			
	 	 	 1.39 “Joint Research Committee” or “JRC”
	  	6
			
	 	 	 1.40 “Licensed Target/Chemistry”
	  	6
			
	 	 	 1.41 “Major Market”
	  	6
			
	 	 	 1.42 “NDA”
	  	6
			
	 2.
	 	 CONDUCT OF COLLABORATION; RESPONSIBILITIES; EXCLUSIVITY
	  	8
			
	 	 	 2.1 Conduct of Collaboration
	  	8
			
	 	 	 2.2 Research Program Responsibilities
	  	8
			
	 	 	 2.3 Exclusivity of the Research Program
	  	9
			
	 3.
	 	 GOVERNANCE
	  	9
			
	 	 	 3.1 Joint Research Committee
	  	9
			
	 	 	 3.2 Joint Research Committee Functions And Powers
	  	9
			
	 	 	 3.3 Information and Reports
	  	10
			
	 	 	 3.4 JRC Dispute Resolution
	  	10
			
	 4.
	 	 TECHNOLOGY TRANSFER
	  	10
			
	 	 	 4.1 Transfer of ACADIA Technology
	  	10
			
	 	 	 4.2 Transfer of Allergan Technology
	  	11
			
	 5.
	 	DESIGNATION OF SELECTED TARGET/CHEMISTRIES, LICENSED TARGET/CHEMISTRIES, AND DESIGNATED TARGET/CHEMISTRIES	  	11
			
	 	 	 5.1 Designation of Selected Target/Chemistries
	  	11
			
	 	 	 5.2 Allergan Option to License Selected Target/Chemistries
	  	12
			
	 	 	 5.3 Designation of Designated Targets
	  	13

  

 -ii- 

 TABLE OF CONTENTS 
 (CONTINUED) 
  

					
	 	  	 	  	PAGE

	 	  	 5.4 Option to License Designated Target/Chemistries
	  	13
			
	 	  	 5.5 Designation of Expanded Field
	  	13
			
	 6.
	  	 PRODUCT DEVELOPMENT, MANUFACTURING AND SUPPLY
	  	14
			
	 	  	 6.1 Research and Development Efforts
	  	14
			
	 	  	 6.2 Development Candidates
	  	14
			
	 	  	 6.3 Manufacture and Supply
	  	14
			
	 7.
	  	 LICENSE GRANTS; DILIGENCE OBLIGATIONS
	  	15
			
	 	  	 7.1 License Grants for Research Program
	  	15
			
	 	  	 7.2 License Grants to Allergan for Development and Commercialization
	  	15
			
	 	  	 7.3 License Grant to ACADIA for Development and Commercialization
	  	15
			
	 	  	 7.4 Sublicensing Rights
	  	16
			
	 	  	 7.5 Diligence Obligations; License for ACADIA Reversion Products
	  	16
			
	 8.
	  	 FEES AND PAYMENTS
	  	16
			
	 	  	 8.1 Access Fee
	  	16
			
	 	  	 8.2 License Fees
	  	17
			
	 	  	 8.3 Expanded Field Fee
	  	17
			
	 	  	 8.4 Research Funding
	  	17
			
	 	  	 8.5 Milestone Payments
	  	18
			
	 	  	 8.6 Royalties
	  	19
			
	 9.
	  	 PAYMENTS; RECORDS; AUDITS
	  	20
			
	 	  	 9.1 Payment; Reports
	  	20
			
	 	  	 9.2 Exchange Rate; Manner and Place of Payment
	  	20
			
	 	  	 9.3 Late Payments
	  	21
			
	 	  	 9.4 Records and Audits
	  	21
			
	 	  	 9.5 Withholding of Taxes
	  	21
			
	 	  	 9.6 Exchange and Royalty Rate Controls
	  	21
			
	 10.
	  	 INTELLECTUAL PROPERTY
	  	21
			
	 	  	 10.1 Ownership of Technology
	  	21
			
	 	  	 10.2 Patent Prosecution
	  	22
			
	 	  	 10.3 Cooperation of the Parties
	  	23

  

 -iii- 

 TABLE OF CONTENTS 
 (CONTINUED) 
  

					
	 	  	 	  	PAGE

	 	  	 10.4 Infringement by Third Parties
	  	23
			
	 	  	 10.5 Infringement of Third Party Rights
	  	24
			
	 	  	 10.6 Trademarks
	  	24
			
	 	  	 10.7 Patent Labeling
	  	24
			
	 11.
	  	 REPRESENTATIONS AND WARRANTIES
	  	24
			
	 	  	 11.1 Representations and Warranties
	  	24
			
	 	  	 11.2 ACADIA Representations and Warranties
	  	25
			
	 	  	 11.3 Allergan Representations and Warranties
	  	26
			
	 	  	 11.4 Disclaimer Concerning Technology
	  	26
			
	 12.
	  	 CONFIDENTIALITY; PUBLICATION
	  	26
			
	 	  	 12.1 Confidentiality
	  	26
			
	 	  	 12.2 Exceptions
	  	26
			
	 	  	 12.3 Terms of Agreement
	  	27
			
	 	  	 12.4 Authorized Disclosure
	  	27
			
	 	  	 12.5 Publications
	  	28
			
	 13.
	  	 TERM AND TERMINATION
	  	28
			
	 	  	 13.1 Term of the Agreement
	  	28
			
	 	  	 13.2 Termination by Mutual Agreement
	  	28
			
	 	  	 13.3 Termination by Allergan
	  	28
			
	 	  	 13.4 Termination for Cause
	  	29
			
	 	  	 13.5 Effect of Termination or Expiration; Surviving Obligations
	  	29
			
	 14.
	  	 INDEMNITY
	  	30
			
	 	  	 14.1 Indemnification
	  	30
			
	 	  	 14.2 Control of Defense
	  	31
			
	 	  	 14.3 Insurance
	  	31
			
	 15.
	  	 GOVERNING LAW; DISPUTE RESOLUTION
	  	31
			
	 	  	 15.1 Governing Law
	  	31
			
	 	  	 15.2 Dispute Resolution
	  	31
			
	 	  	 15.3 Jurisdiction and Venue
	  	32
			
	 16.
	  	 GENERAL PROVISIONS
	  	32

  

 -iv- 

 TABLE OF CONTENTS 
  

					
	 	 	 	  	PAGE

	 	 	 16.1 Notices
	  	32
			
	 	 	 16.2 Force Majeure
	  	33
			
	 	 	 16.3 Entirety of Agreement
	  	33
			
	 	 	 16.4 Non-Waiver
	  	33
			
	 	 	 16.5 Disclaimer of Agency or Partnership
	  	33
			
	 	 	 16.6 Severability
	  	33
			
	 	 	 16.7 Affiliates; Assignment
	  	33
			
	 	 	 16.8 Headings
	  	34
			
	 	 	 16.9 Limitation of Liability
	  	34
			
	 	 	 16.10 Counterparts
	  	34
			
	 	 	 16.11 Bankruptcy
	  	34
			
	 	 	 16.12 Public Disclosure
	  	34
			
	 	 	 16.13 Export
	  	34
			
	 	 	 16.14 Notice of Board Evaluation of Potential Change in Control
	  	35

  
  

 -v- 

 COLLABORATIVE RESEARCH, DEVELOPMENT 
 AND LICENSE AGREEMENT 
  
 THIS COLLABORATIVE RESEARCH, DEVELOPMENT AND LICENSE AGREEMENT (this
“Agreement”), entered into as of March 27, 2003 (the “Effective Date”) by and among ACADIA PHARMACEUTICALS INC., a Delaware corporation
(“ACADIA”), with offices at 3911 Sorrento Valley Blvd., San Diego, California 92121, and Allergan, Inc., a Delaware corporation, and Allergan Sales, LLC, a Delaware limited liability company (collectively
“Allergan”), both having offices at 2525 Dupont Drive, Irvine, California 92612. 
  
 W I T N E S S E T H: 
  
 WHEREAS, ACADIA possesses proprietary chemical-genomics technologies, including Targets (as defined below) and related chemistries, for use in research, discovery and development of
pharmaceutical products; 
  
 WHEREAS, Allergan is engaged in the research, development, marketing, manufacture and sale of pharmaceutical products; 
  
 WHEREAS, ACADIA, Allergan and Vision Pharmaceuticals L.P. are parties to that certain
Collaborative Research, Development and License Agreement, dated as of September 24, 1997, as amended by the Amendment (as defined below) (the “1997 Agreement”); 
  
 WHEREAS, Allergan desires to have broad access to ACADIA’s chemical-genomics
assets and discovery and development capabilities for purposes of discovering and developing compounds primarily for eye care applications; and 
  
 WHEREAS, ACADIA and Allergan desire to enter into a collaborative relationship for research, discovery and
development activities using ACADIA’s proprietary chemical-genomics technologies and development and commercialization of compounds resulting from such activities primarily for eye care applications. 
  
 NOW, THEREFORE, in
consideration of the foregoing and the covenants and premises contained in this Agreement, the parties agree as follows: 
  
 1. DEFINITIONS. As used herein, the following terms shall have the following meanings: 
  
 1.1 “ACADIA Know-How” shall
mean, to the extent useful for the purposes of the Collaboration or any subsequent commercialization of Allergan Products, all tangible or intangible know-how, trade secrets, inventions, (whether or not patentable), data, preclinical results,
physical, chemical or biological material and other information and data pertaining to any of the Collaboration Target/Chemistries, including any assay developed by ACADIA for a Target within the Collaboration Target/Chemistries, or otherwise
necessary or useful for the practice of the ACADIA Patents which are not generally publicly known and are Controlled by 

  

 1. 

 
ACADIA as of the Effective Date or during the Term, including any replication or any part of such information or material, but excluding any ACADIA Patents
or Collaboration Technology. 
  
 1.2
“ACADIA Patents” shall mean, to the extent useful for the purposes of the Collaboration and any subsequent commercialization of Allergan Products, all foreign and domestic: (a) patents existing as of the Effective Date or
issued during the Term; and (b) patents issuing from patent applications that are pending as of the Effective Date or during the Term (including provisionals, divisionals, continuations and continuations-in-part of such applications); and (c)
substitutions, extensions, reissues, renewals and inventors certificates relating to the foregoing patents, in each case, which pertain to any of the Collaboration Target/Chemistries and are Controlled by ACADIA. ACADIA Patents existing as of the
Effective Date will be listed in Exhibit A within ten (10) days of the Effective Date. 
  
 1.3 “ACADIA Product” shall mean an ACADIA Reversion Product or ACADIA Royalty-Free Product, as applicable.

  
 1.4 “ACADIA Reversion
Product” shall mean any product containing, incorporating, discovered or identified, or the utility of which is discovered or identified, using any Licensed Target/Chemistry, which product receives Regulatory Approval for commercial
marketing and sale for use in the Field and is commercialized by ACADIA, its Affiliates or its sublicensees, including all formulations, line extensions and modes of administration thereof. 
  
 1.5 “ACADIA Royalty-Free Product”
shall mean: (a) any product containing, incorporating or discovered or identified, or the utility of which is discovered or identified, using any Licensed Target/Chemistry, which product receives Regulatory Approval for commercial marketing and
sale for use outside the Field and is commercialized outside the Field by ACADIA or its Affiliates or sublicensees, including all formulations, line extensions and modes of administration thereof; and/or (b) any product containing, incorporating or
discovered or identified or the utility of which is discovered or identified using any Target/Chemistry that was previously a Selected Target/Chemistry, which product receives Regulatory Approval for commercial marketing and sale for use in any
field of use and is commercialized in any field of use by ACADIA or its Affiliates or sublicensees, including all formulations, line extensions and modes of administration thereof. 
  
 1.6 “ACADIA Technology” shall mean the ACADIA Patents and the ACADIA
Know-How. 
  
 1.7 “Active
Compound” shall mean a small molecule that specifically inhibits, stimulates or otherwise alters the production or activity of a Target. 
  
 1.8 “Affiliate” shall mean any company or entity controlled by, controlling, or under common control with a
party hereto and shall include any company or entity of which greater than fifty percent (50%) of the voting stock or participating profit interest of which is owned or controlled, directly or indirectly, by a party, and any company or entity which
owns or controls, directly or indirectly, greater than fifty percent (50%) of the voting stock of a party. 
  
 1.9 “Allergan Know-How” shall mean, to the extent useful for the purposes of the Collaboration or any
subsequent commercialization of ACADIA Products, all tangible or 

  

 2. 

 
intangible know-how, trade secrets, inventions (whether or not patentable), data, preclinical results, physical, chemical or biological material and other
information and data pertaining to any of the Collaboration Target/Chemistries or otherwise necessary or useful for the practice of the Allergan Patents, which are not generally publicly known and are Controlled by Allergan during the Term,
including any replication or any part of such information or material, but excluding any Allergan Patents or Collaboration Technology. 
  
 1.10 “Allergan Patents” shall mean, to the extent useful for the purposes of the Collaboration and any
subsequent commercialization of ACADIA Products, all foreign and domestic: (a) patents issued during the Term; and (b) patents issuing from patent applications that are pending during the Term (including provisionals, divisionals, continuations and
continuations-in-part of such applications); and (c) substitutions, extensions, reissues, renewals and inventors certificates relating to the foregoing patents, in each case, which pertain to any of the Collaboration Target/Chemistries and are
Controlled by Allergan. 
  
 1.11
“Allergan Product” shall mean any product containing or incorporating a Chemistry within a Licensed Target/Chemistry or a Designated Target/Chemistry or discovered or identified, or the utility of which is discovered or
identified, using a Licensed Target/Chemistry or Designated Target/Chemistry, which product receives Regulatory Approval for commercial marketing and sale and is commercialized, including all formulations, line extensions and modes of administration
thereof. 
  
 1.12 “Allergan
Technology” shall mean the Allergan Patents and Allergan Know-How. 
  
 1.13 “Alpha Adrenergic Research Plan” shall mean the plan for conducting research with respect to alpha
adrenergic receptors as currently in effect under the 1997 Agreement as may be updated from time to time by the Joint Research Committee pursuant to Section 3.2. 
  
 1.14 “Alpha Adrenergic Research Program” shall mean the collaborative
research program between the parties with respect to alpha adrenergic receptors conducted under the 1997 Agreement during the Research Term pursuant to the Alpha Adrenergic Research Plan. 
  
 1.15 “Amendment” shall mean
the amendment entered into among ACADIA, Allergan and Vision Pharmaceuticals L.P. regarding the Alpha Adrenergic Research Program. 
  
 1.16 “Chemical-Genomics Asset List” shall mean the list of ACADIA’s chemical-genomics assets,
identifying Targets that are not Excluded Targets, assays and Chemistries as provided to Allergan on a bi-monthly basis pursuant to Section 4.1. 
  
 1.17 “Chemical-Genomics Project” shall mean the program of collaborative research with respect to Selected
Target/Chemistries and Licensed Target/Chemistries conducted during the Research Term pursuant to the Research Plan. 
  
 1.18 “Chemistry” shall mean those Active Compounds identified by or on behalf of ACADIA or Allergan with
respect to a specific Target pursuant to or as a result of the Collaboration. 
  

 3. 

 1.19 “Collaboration” shall mean the programs of
collaborative research and development with respect to Collaboration Target/Chemistries under this Agreement. 
  
 1.20 “Collaboration Know-How” shall mean any and all tangible or intangible know-how, trade secrets,
inventions (whether or not patentable), data, preclinical results, physical, chemical or biological material, and other information and data that are (a) useful for purposes of the Collaboration and/or that relates to any Collaboration
Target/Chemistry (including any Target/Chemistry that was formerly a Selected Target/Chemistry), Allergan Product or ACADIA Product and (b) derived from or developed pursuant to activities undertaken by either party, including their consultants or
collaborators, in the conduct of the Collaboration, including, in each case, any replication or any part of such information or material. 
  
 1.21 “Collaboration Patents” shall mean all foreign and domestic patents (including substitutions,
extensions, reissues, renewals and inventors certificates relating thereto) that issue from patent applications, including provisionals, divisionals, continuations and continuations-in-part of such applications, that claim inventions in the
Collaboration Know-How and that are filed by one or both of the parties on behalf of one or both of the parties hereto. 
  
 1.22 “Collaboration Target/Chemistry” shall mean any Selected Target/Chemistry, Licensed Target/Chemistry
and/or Designated Target/Chemistry, as applicable. 
  
 1.23 “Collaboration Technology” shall mean the Collaboration Patents and the Collaboration Know-How. 
  
 1.24 “Confidential Information” shall mean all information disclosed by a party to the other pursuant to
this Agreement including, without limitation, manufacturing, marketing, financial, personnel, scientific and other business information and plans, and the material terms of this Agreement, whether in oral, written, graphic or electronic form.

  
 1.25 “Control”
shall mean possession of the ability to grant a license or sublicense without violating the terms of any agreement or other arrangement with any Third Party. 
  
 1.26 “Designated Target” shall mean any Target that is a specific G-protein
coupled receptor or nuclear receptor, which is selected by Allergan by written notice to ACADIA pursuant to Section 5.3 and, as of the date of such notice is not listed on the Chemical-Genomics Asset List as having a Chemistry identified with
respect to such Target. 
  
 1.27
“Designated Target/Chemistry” shall mean a Designated Target and/or the Chemistry identified with respect to such Designated Target. 
  
 1.28 “Designated Target Project” shall mean the program of collaborative
research with respect to Designated Targets conducted during the Research Term pursuant to the Research Plan. 
  

 4. 

 1.29 “Development Candidate” shall mean any Active
Compound within a Licensed Target/Chemistry for which GLP research or GMP production has been initiated. 
  
 1.30 “Excluded Targets” shall mean Targets which meet any one of the following criteria as of the
applicable time of determination: (a) the Target has been selected by a Third Party, alone or in conjunction with ACADIA, as a licensed Target for research and development pursuant to a written agreement between ACADIA and such Third Party, which
provides for payments to ACADIA and [...***...]; (b) the Target has been selected by ACADIA as a Target for development by ACADIA as part of an ACADIA internal research program so long as [...***...]; (c) the Target has
become the subject of active negotiations between ACADIA and a Third Party with the objective of entering into an agreement as described in clause (a) above or ACADIA is [...***...] to enter into such negotiations with a Third Party; or
(d) the Target was already being considered by ACADIA for an internal ACADIA research program as evidenced by [...***...]. Notwithstanding the foregoing, a Target shall [...***...]  
  
 1.31 “Expanded Field” shall
mean all fields of use. 
  
 1.32
“Field” shall mean (a) with respect to a Selected Target/Chemistry or Licensed Target/Chemistry, all therapeutic, prophylactic and diagnostic uses related to eye care; provided that, if such Selected
Target/Chemistry or Licensed Target/Chemistry is the one (1) Selected Target/Chemistry or Licensed Target/Chemistry designated pursuant to Section 5.5, “Field” shall mean the Expanded Field, and (b) with respect to
all Designated Target/Chemistries, the Expanded Field. 
  
 1.33 “First Commercial Sale” of an Allergan Product or an ACADIA Product shall mean the first sale for use or consumption of such Allergan Product or ACADIA Reversion Product in a
country after Regulatory Approval has been granted by the governing health regulatory authority of such country. Sale to an Affiliate or sublicensee shall not constitute a First Commercial Sale unless the Affiliate or sublicensee is the end user of
the Allergan Product or ACADIA Reversion Product. 
  
 1.34 “FDA” shall mean the United States Food and Drug Administration or any successor agency thereto having the administrative authority to regulate the marketing of human pharmaceutical products or biological
therapeutic products, delivery systems and devices in the United States of America. 
  
 1.35 “FTE” shall mean full-time equivalent scientific personnel. 
  

 ***Certain confidential information on this page has been omitted and filed separately with the
Commission. 
 Confidential treatment has been requested with respect to the omitted portions. 
  
 5. 

 1.36 “Good Laboratory Practices” or “GLP”
shall mean current good laboratory practices under FDA rules and regulations. 
  
 1.37 “Good Manufacturing Practices” or “GMP” shall mean current good manufacturing
practices under FDA rules and regulations. 
  
 1.38 “IND” shall mean an Investigational New Drug Application filed with the FDA, or the equivalent application or filing necessary to commence human clinical trials in another country, as applicable.

  
 1.39 “Joint Research
Committee” or “JRC” shall mean the committee formed pursuant to Section 3.1. 
  
 1.40 “Licensed Target/Chemistry” shall mean any Selected Target/Chemistry as to which Allergan has
exercised its Option pursuant to Section 5.2. 
  
 1.41 “Major Market” shall mean the United States of America, Japan, France, Germany, Italy, Spain or the United Kingdom. 
  
 1.42 “NDA” shall mean a New Drug Application, Product License Application or
equivalent application filed with the FDA, or the equivalent community application filed in the European Union, or the equivalent application filed as a national application in Japan, the United Kingdom, France, Germany, Italy or Spain. 

 
 1.43 “Net Sales” with respect to
any Allergan Product or ACADIA Reversion Product for which royalties are payable hereunder means, with respect to a given period of time, gross sales invoiced by Allergan or ACADIA, as applicable, and its Affiliates and sublicensees during such
period, less the following deductions from such gross amounts which are actually incurred, allowed, accrued or specifically allocated: 
  
 (a) credits or allowances actually granted for damaged products, returns or rejections of product, price adjustments and billing
errors; 
  
 (b) governmental and other
rebates (or equivalents thereof) granted to managed health care organizations, pharmacy benefit managers (or equivalents thereof), federal, state/provincial, local and other governments, their agencies and purchasers and reimbursers or to trade
customers; 
  
 (c) normal and customary
trade, and quantity discounts, allowances and credits actually allowed or paid; 
  
 (d) commissions actually paid to Third Party distributors, brokers or agents (excluding sales personnel, sales representatives and
sales agents that are employees or consultants of Allergan or ACADIA, as applicable, or its Affiliates or sublicensees) in countries outside the United States in which such commissions are paid by deducting such commissions from the gross sales
invoiced for sales to such Third Parties; 
  

 6. 

 (e) transportation costs, including insurance, for outbound freight related to
delivery of the product; 
  
 (f) sales
taxes, VAT taxes and other taxes directly linked to the sales of the product; and 
  
 (g) sales between or among Allergan and its Affiliates and sublicensees or ACADIA and its Affiliates and sublicensees shall be
excluded from the computation of Net Sales, but the subsequent final sales to Third Parties by such Affiliates or sublicensees shall be included with Net Sales; provided however, that if such Affiliates or sublicensees are the end users of
such Allergan Product or ACADIA Reversion Product, the amount billed therefore shall be deemed to be the amount that would be invoiced to a Third Party in an arm’s length transaction for the sale of such products. 
  
 In the event an Allergan Product or ACADIA Reversion Product is sold in
combination with one or more other active ingredients (a “Combination”) then Net Sales shall be calculated by multiplying the Net Sales of that Combination by the fraction A/B, where A is the gross selling price of the
Allergan Product or ACADIA Reversion Product sold separately and B is the gross selling price of the Combination. In the event that no such separate sales are made, Net Sales for royalty determination shall be calculated by multiplying Net Sales of
the Combination by the fraction C/(C+D), where C is the fully allocated cost of the Allergan Product or ACADIA Reversion Product and D is the fully allocated cost of the other products in the Combination. 
  
 1.44 “Option” shall have the
meaning set forth in Section 5.2. 
  
 1.45
“Option Period” shall mean the nine (9) month period of time beginning on: (a) with respect to a Selected Target/Chemistry, the date the Chemistry associated with such Selected Target/Chemistry is delivered to
Allergan for testing; and (b) with respect to such Designated Target/Chemistry, the earlier of (i) the date on which [...***...] with respect to a Designated Target for testing (provided that Allergen makes a good faith effort to
complete such synthesis as soon as is practicable) and (ii) the date three (3) months from the date ACADIA determines the [...***...] of a Chemistry with respect to such Designated Target. 
  
 1.46 “Regulatory Approval” shall
mean any and all approvals (including price and reimbursement approvals), licenses, registrations, or authorizations of the United States or European Union or any country, federal, state or local regulatory agency, department, bureau or other
government entity that is necessary for the manufacture, use, storage, import, transport and/or sale of an Allergan Product or an ACADIA Product in such jurisdiction. 
  
 1.47 “Research Plan” shall mean the plan for conducting the Research Program, as
amended from time to time by the JRC. 
  
 1.48
“Research Program” shall mean, collectively, the Designated Target Project and the Chemical-Genomics Project. 
  

 ***Certain confidential information on this page has been omitted and filed separately with the
Commission. 
 Confidential treatment has been requested with respect to the omitted portions. 
  
 7. 

 1.49 “Research Term” shall mean the three (3) years following the
Effective Date, as may be extended for additional, consecutive one (1) year periods by written agreement of the parties. 
  
 1.50 “Royalty Term” shall mean, in the case of each Allergan Product or ACADIA Reversion Product in any country,
the period of time commencing on the First Commercial Sale and ending upon the later of (a) [...***...] from the date of First Commercial Sale in such country, or (b) the expiration of the last to expire Valid Claim covering such
Allergan Product or ACADIA Reversion Product in such country. 
  
 1.51 “Selected Target/Chemistry” shall mean each of the up to three (3) Target/Chemistries selected from the Chemical-Genomics Asset List at any specific point in time during the Research Term
pursuant to Section 5.1. 
  
 1.52
“Target” shall mean a nucleic acid encoded by a gene locus comprising a nucleotide sequence, including [...***...], and all components related to [...***...], including, without limitation, the
[...***...], such as [...***...]. 
  
 1.53 “Target/Chemistry” shall mean a Target and/or any Chemistry identified with respect to such Target. 
  
 1.54 “Term” shall have the meaning set forth in Section 13.1. 
  
 1.55 “Third Party” shall mean any
entity other than Allergan or ACADIA or an Affiliate of Allergan or ACADIA. 
  
 1.56 “Valid Claim” shall mean a claim of an unexpired patent included within the patent rights licensed hereunder, which has not been held unenforceable, unpatentable or invalid by a decision
of a court or other governmental agency of competent jurisdiction unappealable or unappealed within the time allowed for appeal or which has not been admitted to be invalid or unenforceable through reexamination, reissue, disclaimer, or otherwise.

  

	 	2.	CONDUCT OF COLLABORATION; RESPONSIBILITIES; EXCLUSIVITY. 

  
 2.1 Conduct of Collaboration. During the
Research Term, the parties shall use commercially reasonable efforts to conduct the Research Program in accordance with the Research Plan and the terms of this Agreement. The initial Research Plan for conducting the Research Program will be
completed and approved by the JRC within thirty (30) days of the Effective Date. Any amendments or revisions to the Research Plan shall be in writing and shall require unanimous approval of the JRC. Pursuant to the Research Program, the parties will
collaborate in identifying and testing Collaboration Target/Chemistries for development and commercialization. 
  
 2.2 Research Program Responsibilities. 
  
 (a) ACADIA and Allergan will be responsible for such activities under the Research Plan related to
the Chemical-Genomics Project [...***...] 

  

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 8. 

 
[...***...] as assigned to each such party by the JRC. 
  

(b) ACADIA will be responsible for high-throughput screening of chemical libraries and determination of potency and selectivity
of hits in the Designated Target Project pursuant to the Research Plan, and Allergan will be responsible for all other activities under the Research Plan related to the Designated Target Project. 
  
 (c) Each of ACADIA and Allergan will provide to the
JRC quarterly reports setting forth such party’s results and plans under the Research Program. 
  
 2.3 Exclusivity of the Research Program. During the Research Term, the Research Program shall be ACADIA’s exclusive
means of collaborating and/or conducting research and development on Collaboration Target/Chemistries in the Field. During the Research Term, ACADIA shall be free to conduct research and development activities, on its own or together with
Third Parties, on (a) all Target/Chemistries identified by ACADIA other than Collaboration Target/Chemistries including, without limitation, those former Selected Target/Chemistries which have been replaced by new Selected
Target/Chemistries pursuant to Section 4.1 or which were not designated as Licensed Target/Chemistries by Allergan pursuant to Section 4.2, and (b) all Collaboration Target/Chemistries outside the Field, if applicable. During the Research
Term, the Research Program shall be Allergan’s exclusive means of collaborating and/or conducting research on Licensed Target/Chemistries and Selected Target/Chemistries. 
  

	 	3.	GOVERNANCE. 

  
 3.1 Joint Research Committee. Promptly after the Effective Date, the parties will form a Joint Research Committee
(“JRC”) comprised of three (3) representatives of each of ACADIA and Allergan. One (1) member of the JRC shall be selected to act as the chairperson of the JRC, with each chairperson acting for a term of twelve (12) months.
The chairperson shall be selected alternately by Allergan and ACADIA, and ACADIA shall designate the first chairperson. The JRC shall determine the specific goals for the Collaboration and the Alpha Adrenergic Research Program, shall manage the
ongoing research conducted under the Collaboration and the Alpha Adrenergic Research Program, and shall monitor the progress and results of such work. All decisions of the JRC shall require unanimous approval. The JRC shall meet on a quarterly basis
or at such other frequency as the JRC agrees. The parties shall agree upon the time and place of meetings. Within thirty (30) days after each meeting, the JRC chairperson will provide the parties with a written report describing, in reasonable
detail, the status of the Collaboration and the Alpha Adrenergic Research Program, a summary of the results and progress to date, the issues requiring resolution, and the agreed resolution of previously reported issues. A reasonable number of
additional representatives of a party may attend meetings of the JRC in a non-voting capacity. 
  
 3.2 Joint Research Committee Functions And Powers. The JRC shall encourage and facilitate ongoing cooperation between the
parties, establish, update, review and approve the Research Plan and the Alpha Adrenergic Research Plan and any amendments to such plans, allocate tasks and coordinate activities pursuant to the Research Plan and the Alpha 

  

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 9. 

 
Adrenergic Research Plan, monitor progress of activities under the Research Plan and the Alpha Adrenergic Research Plan and the parties’ diligence in
carrying out their responsibilities thereunder, oversee the conduct of all patent matters, and carry out the other duties and responsibilities described for it in this Agreement. The parties will discuss proposed patent applications for inventions
discovered in the course of the Collaboration and the Alpha Adrenergic Research Program and publication of matters arising under the Collaboration and the Alpha Adrenergic Research Program at JRC meetings. The JRC shall also be responsible for
establishing and approving annual research funding for activities to be performed by the parties pursuant to the Research Plan and the Alpha Adrenergic Research Plan for each year of the Research Term (including any renewal or extension thereof),
subject to the minimum funding levels provided in Section 8.4 and the additional funding required under Section 8.2(a), if applicable. Such funding shall be provided by Allergan to ACADIA based on the number of FTEs required for ACADIA to perform
its activities under the Research Plan and the Alpha Adrenergic Research Plan. The JRC shall also maintain and update a list of the Selected Target/Chemistries, Licensed Target/Chemistries and Designated Target/Chemistries as in effect from time to
time. 
  
 3.3 Information and
Reports. Except as otherwise provided in this Agreement, the parties will make available and disclose to one another all results of the work conducted pursuant to the Research Plan and the Alpha Adrenergic Research Plan prior to and in
preparation for JRC meetings, in the form and format to be designated by the JRC. For purposes of clarification, Allergan will not be obligated to share pursuant to this Section 3 structure activity relationship information or other data which is
not specifically necessary to share in order to achieve the goals of the Research Plan, unless otherwise agreed to by the parties as part of a further collaborative relationship pursuant to Section 5.2(a)(ii). 
  
 3.4 JRC Dispute Resolution. If the JRC is
unable to decide or resolve an issue unanimously, the issue shall be referred to the Chief Scientific Officer of ACADIA and the President, Research and Development of Allergan. Such officers of the parties will meet promptly thereafter and shall
negotiate in good faith to resolve such issue. If they cannot resolve the issue within thirty (30) days of commencing such negotiations then the issue shall be resolved as provided in Section 15.2. 
  

	 	4.	TECHNOLOGY TRANSFER. 

  
 4.1 Transfer of ACADIA Technology. Promptly following the Effective Date and thereafter on a bi-monthly basis during the
Research Term, ACADIA will provide to Allergan the then current Chemical-Genomics Asset List. Commencing promptly after the Effective Date and from time to time thereafter, ACADIA will disclose to Allergan such of the ACADIA Technology and relevant
information with respect to Collaboration Target/Chemistries as is reasonably necessary to enable Allergan to perform its Collaboration activities hereunder in accordance with the Research Plan and otherwise to exercise fully the licenses granted to
Allergan hereunder. During the Term, ACADIA will provide Allergan with reasonable technical assistance relating to the use of such ACADIA Know-How and the practice of such ACADIA Patents solely to the extent permitted under the licenses granted to
Allergan herein. In the event that ACADIA provides any materials to Allergan pursuant to the Research Plan, the parties will 

  

 10. 

 
enter into a Materials Transfer Agreement in the form attached hereto as Exhibit B with respect to such materials. 
  
 4.2 Transfer of Allergan Technology.
Commencing promptly after the Effective Date and from time to time thereafter, Allergan will disclose to ACADIA such of the Allergan Technology as is reasonably necessary to enable ACADIA to perform its Collaboration activities hereunder in
accordance with the Research Plan and otherwise to exercise fully the licenses granted to ACADIA hereunder. During the Term, Allergan will provide ACADIA with reasonable technical assistance relating to the use of such Allergan Know-How and the
practice of such Allergan Patents solely to the extent permitted under the license granted to ACADIA herein. In the event that Allergan provides any materials to ACADIA pursuant to the Research Plan, the parties will enter into a Materials Transfer
Agreement in the form attached hereto as Exhibit B with respect to such materials. 
  

	 	5.	DESIGNATION OF SELECTED TARGET/CHEMISTRIES, LICENSED
TARGET/CHEMISTRIES, AND DESIGNATED TARGET/CHEMISTRIES. 

  
 5.1 Designation of Selected Target/Chemistries. 
  
 (a) Upon the Effective Date, the parties shall agree
in writing to the selection of up to three (3) Target/Chemistries on the Chemical-Genomics Asset List as Selected Target/Chemistries. At any time during the Research Term, Allergan may, by prior written notice to ACADIA and the JRC, propose that one
(1) or more of the Selected Target/Chemistries be replaced with an alternative Target/Chemistry from the Chemical-Genomics Asset List or that a Target/Chemistry from the Chemical-Genomics Asset List be added as a Selected Target/Chemistry;
provided however, that at no time shall there be more than a total of three (3) Selected Target/Chemistries. ACADIA will notify Allergan within ten (10) days after receipt of such proposal if the proposed Selected Target/Chemistry has become
an Excluded Target since Allergan’s receipt of the most current Chemical-Genomics Asset List and is therefore not available for selection, including the reason for such determination. When a Target/Chemistry becomes a Selected Target/Chemistry
in accordance with this Section 5.1, it shall be added to the list of Selected Target/Chemistries maintained by the JRC, and, if applicable, the Selected Target/Chemistry that Allergan has elected to replace with such new Selected Target/Chemistry
shall thereupon cease to be a Selected Target/Chemistry for all purposes under this Agreement and shall be deleted from the list of Selected Target/Chemistries maintained by the JRC. As soon as practicable after designation of a Target/Chemistry as
a Selected Target/Chemistry, ACADIA shall deliver to Allergan the quantity of the Chemistry associated with such Selected Target/Chemistry specified by the JRC. 
  
 (b) In the event that Allergan designates a Selected Target/Chemistry pursuant to this Section 5.1,
conducts tests [...***...] within such Selected Target/Chemistry and determines that the Chemistry included in such Selected Target/Chemistry does not apply [...***...], then Allergan may continue to test such Selected
Target/Chemistry to determine whether to [...***...], replace such Selected Target/Chemistry in accordance with the procedures set forth in Section 5.1(a), or redesignate such [...***...] within such Selected
Target/Chemistry as a Designated Target in accordance with Section 5.3. If Allergan 

  

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redesignates such [...***...] within such Selected Target/Chemistry as a Designated Target, (i) such Target/Chemistry shall cease to be a
Selected Target/Chemistry for all purposes under this Agreement and shall be deleted from the list of Selected Target/Chemistries maintained by the JRC, (ii) all rights to such former Selected Target/Chemistry and to all ACADIA Technology and
ACADIA’s interest in Collaboration Technology with respect to such former Selected Target/Chemistry shall revert to ACADIA, except to the extent of rights granted with respect to such [...***...] within such Selected
Target/Chemistry as a Designated Target in accordance with this Agreement, and (iii) Allergan shall grant ACADIA the license set forth in Section 7.3(b) with respect to such former Selected Target/Chemistry, excluding such [...***...]
within such former Selected Target/Chemistry. 
  
 5.2 Allergan Option to License Selected Target/Chemistries. During the Research Term, Allergan shall have the right to designate up to three (3) Selected Target/Chemistries as Licensed Target/Chemistries as set forth below:

  
 (a) At any time during the Option
Period for a given Selected Target/Chemistry, Allergan shall have the exclusive option to designate such Selected Target/Chemistry as a Licensed Target/Chemistry and obtain a license to such Licensed Target/Chemistry under Section 7.2(a) (the
“Option”) by providing written notice of the exercise of such Option to ACADIA and the JRC. If the Field for such Licensed Target/Chemistry is not the Expanded Field, in such notice, Allergan shall inform ACADIA whether (i)
it elects to have ACADIA conduct research and development with respect to such Licensed Target/Chemistry for a period of only one (1) year in which case ACADIA activities shall be limited to profiling of hits and Active Compounds for which
Allergan will not disclose to ACADIA the structures (not to include synthetic analogs), analytical chemistry, carrying out assays and small scale synthesis, or (ii) it desires to enter into a further collaborative relationship with ACADIA with
regard to such Licensed Target/Chemistry using a research plan to be agreed by the parties. The parties would negotiate in good faith the terms of such further collaborative relationship including, without limitation, mechanics for dividing Active
Compounds within such Licensed Target/Chemistry between Allergan and ACADIA for development in the Field and outside the Field respectively (with Allergan having the first right to select an Active Compound for development, which Allergan selected
Active Compound would not be developed by ACADIA), intellectual property ownership treatment, expanded mutual exchange of information, additional reporting requirements, and milestone and royalty payments to be made by ACADIA to Allergan on Active
Compounds with respect to such Licensed Target/Chemistry developed by ACADIA outside the Field; provided however, that the parties shall conduct research and development activities pursuant to Section 5.2(a)(i) while they negotiate any such
further collaborative relationship. If the Field for such Licensed Target/Chemistry is the Expanded Field, in such notice, Allergan shall inform ACADIA whether it desires to enter into a further collaborative relationship with ACADIA with regard to
such Licensed Target/Chemistry, and the JRC shall determine the terms of the research plan regarding such further collaborative relationship. Upon any exercise by Allergan of the Option with respect to a Selected Target/Chemistry, such Selected
Target/Chemistry shall be deleted from the list of Selected Target/Chemistries maintained by the JRC and added to the list of Licensed Target/Chemistries maintained by the JRC. 
  

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 (b) If Allergan does not exercise its Option with respect to a Selected
Target/Chemistry within the Option Period, then, upon expiration of such Option Period, (i) the Target/Chemistry shall cease to be a Selected Target/Chemistry for all purposes under this Agreement and shall be deleted from the list of Selected
Target/Chemistries maintained by the JRC, (ii) all rights to such former Selected Target/Chemistry and to all ACADIA Technology and ACADIA’s interest in Collaboration Technology with respect to such former Selected Target/Chemistry shall revert
to ACADIA, and (iii) Allergan shall grant ACADIA the license set forth in Section 7.3(b) with respect to such Selected Target/Chemistry. 
  
 5.3 Designation of Designated Targets. At any time during the Research Term, Allergan may propose the designation of up to
[...***...] Designated Targets for development by prior written notice to ACADIA and the JRC; provided however, that Allergan shall not designate [...***...] Designated Targets within [...***...] period
during the Research Term. After receipt of such proposal, ACADIA will promptly notify Allergan if the proposed Selected Target/Chemistry is an Excluded Target. The Designated Target shall be added to the list of Designated Target/Chemistries
maintained by the JRC. ACADIA will enable the Designated Target, if necessary, and conduct high-throughput screening of libraries as determined by the JRC to identify Chemistries with respect to such Designated Target. 
  
 5.4 Option to License Designated
Target/Chemistries.  
  
 (a) At any
time during the Option Period for a given Designated Target/Chemistry, Allergan shall have the exclusive option to obtain a license with respect to the Designated Target/Chemistry under Section 7.2(b) by providing written notice to ACADIA and the
JRC of the exercise of such option. 
  
 (b)
If Allergan does not exercise such option with respect to a Designated Target/Chemistry during the Option Period, then, upon expiration of such Option Period, (i) such Target/Chemistry shall cease to be a Designated Target/Chemistry for all
purposes under this Agreement and shall be deleted from the list of Designated Targets maintained by the JRC and (ii) all rights to the Chemistry identified by ACADIA with respect to such Designated Target/Chemistry and to all ACADIA Technology and
ACADIA’s interest in Collaboration Technology with respect to such Designated Target/Chemistry shall revert to ACADIA. 
  
 (c) All Allergan rights to the Designated Target existing upon the expiration of such Option Period in accordance with Section
5.4(b) shall remain with Allergan. 
  
 5.5 Designation of Expanded Field. Allergan may, at its option, designate one (1) Selected Target/Chemistry as the Selected Target/Chemistry for which the Field shall mean the Expanded Field by written notice to ACADIA and the
JRC, such designation to be made at the time such Selected Target/Chemistry is designated pursuant to Section 5.1. In the event that such Selected Target/Chemistry for which the Field shall mean the Expanded Field ceases to be a Selected
Target/Chemistry as contemplated by Section 5.1, Allergan may, by prior written notice to ACADIA and the JRC, propose that another Target/Chemistry when it is designated as a Selected Target/Chemistry pursuant to Section 5.1, or an existing Selected
Target/Chemistry, be designated as the Selected Target/Chemistry for which the Field shall mean the Expanded Field; 

  

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 13. 

 
provided, however, that Allergan may choose an existing Selected Target/Chemistry only if ACADIA consents to such choice in writing, which consent may
be withheld only if the Target within such Selected Target/Chemistry is an Excluded Target as of the date of such notice; provided further, that such designation may apply to no more than one (1) Selected Target/Chemistry at any one time.
Once Allergan has exercised its Option with respect to a Selected Target/Chemistry for which the Field shall mean the Expanded Field, then the Field for such Licensed Target/Chemistry shall mean the Expanded Field, and Allergan may no longer make
any change in designation pursuant to this Section 5.5. 
  

	 	6.	PRODUCT DEVELOPMENT, MANUFACTURING AND SUPPLY. 

  
 6.1 Research and Development Efforts. Allergan
shall use commercially reasonable efforts to conduct, at its own expense, all preclinical testing and investigations necessary for Allergan to select appropriate Licensed Target/Chemistries and Designated Target/Chemistries for further development
in the Field. Such further development may include, but not be limited to, [...***...] necessary to prepare and file an IND and [...***...] necessary to file a NDA. Allergan will provide a report on a biannual basis to the
JRC summarizing the results of work it performs pursuant to this Section 6.1 in a manner sufficient to inform ACADIA of general research and development progress and compliance with Section 7.5(a). 
  
 6.2 Development Candidates. After the
designation of a Development Candidate, Allergan shall prepare and deliver to ACADIA within a reasonable period, such period not to exceed [...***...] the projected timing of the activities necessary to obtain Regulatory Approval for
such Development Candidate. Thereafter, Allergan shall regularly (on at least a semi-annual basis) provide ACADIA with an update describing of the progress made to date towards obtaining Regulatory Approval of such Development Candidate and the
plans for achieving Regulatory Approval in the future. Allergan shall have the sole responsibility for conducting preclinical and clinical development of such Development Candidate in accordance with a development plan prepared by Allergan in a
manner consistent with its then existing internal criteria. Allergan agrees to use commercially reasonable efforts to fund and perform development of its Development Candidate pursuant to such development plan in Major Markets. For purposes of
clarification, Allergan shall not be required under Section 6.1 or this Section 6.2 to provided detailed data or results to ACADIA. 
  
 6.3 Manufacture and Supply. Allergan shall be responsible for providing, at its sole expense, the supply of all Licensed
Target/Chemistries, Designated Target/Chemistries and Development Candidates necessary for the preclinical and clinical development of Licensed Target/Chemistries, Designated Target/Chemistries and Development Candidates in the Field and all
Allergan Products necessary for commercialization worldwide. 
  

	 	7.	LICENSE GRANTS; DILIGENCE OBLIGATIONS. 

  
 7.1 License Grants for Research Program.
Subject to the terms of this Agreement: 
  

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 (a) with respect to each Selected Target/Chemistry and Designated
Target/Chemistry, during [...***...], ACADIA hereby grants to Allergan an exclusive (except as to ACADIA), royalty-free license, with no right to sublicense, under the ACADIA Technology and ACADIA’s interest in the Collaboration
Technology to make and use such Selected Target/Chemistry or Designated Target/Chemistry solely for internal research purposes pursuant to the Research Program in order to determine whether Allergan will exercise its option with respect to such
Selected Target/Chemistry or Designated Target/Chemistry pursuant to Section 5.2 or 5.4, as applicable; 
  
 (b) during the Research Term, ACADIA grants to Allergan an exclusive (except as to ACADIA), royalty-free license, with no right to
sublicense, under the ACADIA Technology and ACADIA’s interest in the Collaboration Technology solely for internal research purposes to the extent necessary or appropriate to carry out Allergan’s research responsibilities under the Research
Program. Allergan has the right to subcontract with Third Parties for the performance of research and development activities, provided, however, that (i) the contracted Third Party shall enter into a confidentiality agreement with Allergan;
and (ii) Allergan shall supervise such subcontract work; and 
  
 (c) during the Research Term, Allergan grants to ACADIA a non-exclusive, royalty-free license, with no right to sublicense, under the Allergan Technology and Allergan’s interest in the Collaboration
Technology solely for internal research purposes to the extent necessary or appropriate to carry out ACADIA’s research responsibilities under the Research Program. 
  
 7.2 License Grants to Allergan for Development and Commercialization. Subject to the terms of
this Agreement: 
  
 (a) ACADIA hereby
grants to Allergan, effective upon the exercise of the Option pursuant to which a Selected Target/Chemistry becomes a Licensed Target/Chemistry and payment of the license fee under Section 8.2(a)(i), an exclusive, worldwide, royalty bearing license
under the ACADIA Technology and ACADIA’s interest in the Collaboration Technology to make, have made and use such Licensed Target/Chemistry for research and development of such Licensed Target/Chemistry in the Field and to make, have made, use,
sell, offer for sale and import Allegan Products based on such Licensed Target/Chemistry in the Field; and 
  
 (b) ACADIA hereby grants to Allergan, effective upon the exercise of the option with respect to the applicable Designated
Target/Chemistry and payment of the license fee under Section 8.2(b), an exclusive, worldwide, royalty bearing license under the ACADIA Technology and ACADIA’s interest in the Collaboration Technology to make, have made and use such Designated
Target/Chemistry for research and development of such Designated Target/Chemistry in the Field and to make, have made, use, sell, offer for sale and import Allergan Products based on such Designated Target/Chemistry in the Field. 
  
 7.3 License Grant to ACADIA for Development and
Commercialization. 
  
 (a) Effective
upon the grant of a license to a Licensed Target/Chemistry to Allergan under Section 7.2(a), Allergan hereby grants to ACADIA an 

  

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 15. 

 
exclusive, worldwide, royalty-free license under the Allergan Technology and Allergan’s interest in the Collaboration Technology to make, have made and
use such Licensed Target/Chemistry outside the Field and to make, have made, use, sell, offer for sale and import ACADIA Royalty-Free Products based on such Licensed Target/Chemistry outside the Field. 
  
 (b) Effective upon the expiration without exercise of
an Option with respect to a Selected Target/Chemistry pursuant to Section 5.2 or as otherwise provided in Section 5.1(b), Allergan hereby grants to ACADIA an exclusive, worldwide, royalty-free license under the Allergan Technology and
Allergan’s interest in the Collaboration Technology to make, have made and use such Target/Chemistry in all fields of use and to make, have made, use, sell, offer for sale and import ACADIA Royalty-Free Products based on such Target/Chemistry
in all fields of use. 
  
 7.4
Sublicensing Rights. Allergan shall have the right to sublicense, through multiple tiers of sublicense, the rights granted to it pursuant to Section 7.2, and ACADIA shall have the right to sublicense, through multiple ties of sublicense,
the rights granted to it pursuant to Section 7.3 and Section 7.5(b), if applicable. 
  
 7.5 Diligence Obligations; License for ACADIA Reversion Products. 
  
 (a) Diligence Obligations. Each party’s
development and commercialization rights will be subject to development, manufacturing and commercial diligence obligations consistent with such party’s practice for products with similar commercial potential. With regards to Allergan, such
diligence obligations shall include, but not be limited to, [...***...] either itself, or through a Third Party. [...***...] may occur and are consistent with Allergan’s standard practice for products with similar
commercial potential. 
  
 (b) License
for ACADIA Reversion Products. If Allergan fails to fulfill the diligence obligations set forth in Section 7.5(a) with respect to a specific Licensed Target/Chemistry or either (i) Allergan in good faith notifies ACADIA in writing that it
intends to abandon research and development of such Licensed Target/Chemistry or (ii) the minutes of any board or committee meeting of Allergan reflect Allergan’s abandonment of research and development of such Licensed Target/Chemistry, then
(A) all rights granted under the ACADIA Technology and ACADIA’s interest in the Collaboration Technology with respect to such Licensed Target/Chemistry shall revert to ACADIA, and (B) in addition to any license granted Section 7.3(a)
with respect to a Licensed Target/Chemistry, Allergan thereupon grants to ACADIA an exclusive, worldwide, royalty-bearing license, in accordance with Section 8.6(c), under the Allergan Technology and Allergan’s interest in the Collaboration
Technology, as such technologies exist as of such date, to make, have made and use such Licensed Target/Chemistry in the Field and to make, have made, use, sell, offer for sale and import products based on such Licensed Target/Chemistry in the
Field. 
  

	 	8.	FEES AND PAYMENTS. 

  
 8.1 Access Fee. Upon each of the Effective Date and each anniversary thereof during the Research Term, provided that
ACADIA has provided to Allergan the Chemical-Genomics Asset List on a bi-monthly basis during the immediately preceding year in 

  

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 accordance with Section 4.1, Allergan shall pay to ACADIA an annual access fee of
[...***...] in consideration of access to the Chemical-Genomics Asset List and ACADIA Technology related to such Chemical-Genomics Asset List. 
  
 8.2 License Fees. 
  
 (a) Licensed Target/Chemistries. For each Licensed Target/Chemistry for which a license is granted under Section 7.2(a)
Allergan shall pay to ACADIA the following: (i) [...***...] after Allergan’s exercise of its Option with respect to such Licensed Target/Chemistry]; and (ii) research funding for [...***...] ACADIA FTEs to be devoted
solely to the research and development of such Licensed Target/Chemistry [...***...], such funding to be provided at the rate and upon the payment terms set forth in Section 8.4. All research funding pursuant to this Section 8.2, shall
be in addition to the minimum research funding required under Section 8.4; provided however, that Allergan may, in its sole discretion, satisfy the obligation to fund [...***...] FTEs under this Section 8.2 for the first Licensed
Target/Chemistry only by applying [...***...] FTEs from the FTE Pool to research and development of such Licensed Target/Chemistry. 
  
 (b) Designated Target/Chemistries. For each Designated Target/Chemistry for which a license is granted under Section 7.2(b),
Allergan shall pay to ACADIA [...***...] after Allergan’s exercise of its option with respect to such Designated Target/Chemistry. 
  
 8.3 Expanded Field Fee. In consideration of the rights granted to Allergan pursuant to Section 5.5, Allergan shall pay to
ACADIA a fee of [...***...]; provided that ACADIA has provided to Allergan the Chemical-Genomics Asset List on a bi–monthly basis in accordance with Section 4.1 in order to allow Allergan to designate the Expanded Field with
respect to a Selected Target/Chemistry selected from such list. [...***...] 
  
 8.4 Research Funding. 
  
 (a) During the first year of the Research Term, Allergan agrees to pay ACADIA research funding payments [...***...]
during the first year of the Research Term. Thereafter, such rate per ACADIA FTE will be increased each year of the Research Term after the first year by [...***...]. Such funding shall be in such amounts as are set forth in the
Research Plan and the Alpha Adrenergic Research Plan, which shall provide for a total of at least: (i) [...***...] 

  

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[...***...]. The FTE Pool shall be allocated between the Chemical-Genomics Project, the Designated Target Project and the Alpha Adrenergic Research Program
as deemed appropriate by the JRC. 
  
 (b)
It is intended that, as determined by the JRC, Allergan will provide sufficient research funding to ACADIA during the Research Term (and any renewal or extension thereof) to support the number of ACADIA FTEs required to pursue the activities set
forth in the Research Plan and the Alpha Adrenergic Research Plan, as the Research Plan and the Alpha Adrenergic Research Plan are developed and approved by the JRC, in accordance with the research budget developed and approved by the JRC as
described in Section 3.2, and subject to the limitations, including the minimum funding levels, set forth under this Section 8.4. 
  
 (c) All research funding payments under this Section 8.4 and Section 8.2(a) shall be made [...***...]. 
  
 8.5 Milestone Payments. 
  
 (a) Within [...***...] after achievement
by Allergan, its Affiliates, sublicensees, partners, collaborators or other Third Parties designated by Allergan of each of the following milestones with respect to each Licensed Target/Chemistry, Allergan shall pay ACADIA the following
non-refundable milestones (provided, however, that if Allergan abandons development of a Development Candidate with respect to a Licensed Target/Chemistry and replaces it with development of another Development Candidate with respect to such
Licensed Target/Chemistry, no duplicate milestone payments shall be due for the replacement compound if such milestone payment was made with respect to the compound it replaced): 
  

							
	 Milestone Event

	  	Amount of Payment

	 
	  	If the Field does
not encompass the
Expanded Field

	 	 	If the Field
encompasses the
Expanded Field

	 
	 (1)    Designation of a Development Candidate
	  	[...***...	]	 	[...***...	]
	 (2)    First Acceptance of IND for Development Candidate in [...***...]
	  	[...***...	]	 	[...***...	]
	 (3)    Initiation of the first Phase III clinical trial (or equivalent pivotal study) of Development Candidate in
[...***...]
	  	[...***...	]	 	[...***...	]
	 (4)    First filing and acceptance of NDA for Development Candidate in [...***...]
	  	[...***...	]	 	[...***...	]

  

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Commission. 
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 18. 

							
	 (5)    Approval of NDA for Development Candidate in [...***...] ([...***...])
	  	[...***...	]	 	[...***...	]

  
 (b) Within ten (10) days after first approval of an NDA for each Active Compound within each Designated Target/Chemistry in a Major Market by Allergan, its Affiliates, sublicensees, partners, collaborators or other Third Parties
designated by Allergan, Allergan shall pay ACADIA [...***...]. 
  
 8.6 Royalties. 
  
 (a) Royalty Payments on Allergan Products Based on Licensed Target/Chemistries in the Field. Allergan shall pay to ACADIA the following royalties on annual Net Sales of Allergan Products based on Licensed Target/Chemistries:
[...***...] 
  
 (b) Royalty
Payments on Allergan Products Based on Designated Target/Chemistries. Allergan shall pay to ACADIA a royalty of [...***...]. 
  
 (c) Royalty Payments to Allergan. If rights with respect to a Licensed Target/Chemistry in the Field are conveyed to ACADIA
pursuant to Section 7.5(b): (i) in the event ACADIA develops or commercializes in collaboration with a Third Party licensee ACADIA Reversion Products based on such Licensed Target/Chemistry in the Field using Allergan Technology or Allergan’s
interest in the Collaboration Technology licensed to ACADIA pursuant to Section 7.5(b), then ACADIA shall pay to Allergan the following percentage of all royalties, upfront fees and milestones (excluding equity investments) received by ACADIA from
such Third Party licensee with respect to an ACADIA Reversion Product: [...***...]. 
  

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Commission. 
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 19. 

 (d) Royalty Term; Loss of Market Exclusivity. Royalties for sales of each Allergan
Product or ACADIA Reversion Product in a given country shall be paid for a period equal to the Royalty Term for such Allergan Product or ACADIA Reversion Product in such country; [...***...].  
  
 (e) Credit for Third Party Royalties. In the event
that a party obligated to pay royalties under this Agreement must obtain a license to Third Party patents in order to practice any license granted to it under this Agreement with respect to a product, then such party may reduce the royalty otherwise
owing on Net Sales of such product [...***...] of any royalty payments made under such Third Party license; provided, however, that the royalty otherwise payable under the applicable provision of this Agreement during any quarter
shall not be reduced by [...***...]; provided further, that such credit shall not apply to royalty payments made by Allergan pursuant to Section 8.6(b). 
  

	 	9.	PAYMENTS; RECORDS; AUDITS. 

  
 9.1 Payment; Reports. Royalty payments and reports for the sale of Allergan Products and ACADIA
Reversion Products shall be calculated and reported for each calendar quarter. [...***...] Each payment of royalties shall be accompanied by a report of Net Sales of Allergan Products or ACADIA Reversion Products in sufficient detail to
permit confirmation of the accuracy of the royalty payment made, including, without limitation, the number of each Allergan Product or ACADIA Reversion Product sold, the gross sales and Net Sales of each Allergan Product or ACADIA Reversion Product
in U.S. Dollars, the royalties payable, the exchange rates used and any other information necessary to determine the appropriate amount of royalties due. Each party will keep complete and accurate records pertaining to the development of Allergan
Products or ACADIA Reversion Products and the sale or other disposition of Allergan Products or ACADIA Reversion Products in sufficient detail to permit the other party to confirm the accuracy of all payments due hereunder. 
  
 9.2 Exchange Rate; Manner and Place of Payment. All
payments hereunder shall be payable in U.S. dollars. With respect to each quarter, for countries other than the United States, the Net Sales used for computing the royalties payable shall be computed in U.S. Dollars, and any sales denominated in
other than U.S. Dollars shall be translated into U.S. Dollars in accordance with U.S. generally accepted accounting principles consistently applied using the monthly average rates of exchange during the calendar quarter in which Net Sales are made.
The rates of exchange shall be those rates as published by The Wall Street Journal, Western U.S. Edition, during the calendar quarter for which Net Sales are made. All payments owed under this Agreement shall be made by wire transfer to a
bank and account designated in writing by the payee, unless otherwise specified by such payee. 
  

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Commission. 
 Confidential treatment has been requested with respect to the omitted portions. 
  
 20. 

 9.3 Late Payments. In the event that any payment, including royalty, milestone and
research payments, due hereunder is not made when due, the payment shall accrue interest from the date due at the rate of [...***...]; provided, however, that in no event shall such rate exceed the maximum legal annual interest
rate allowed by law. The payment of such interest shall not limit a party from exercising any other rights it may have as a consequence of the lateness of any payment. 
  
 9.4 Records and Audits. On [...***...] prior written notice, each party shall have the
right to have an independent certified public accountant, inspect the books and records of the other party and/or its Affiliates and/or its sublicensees, no more than once per fiscal year during usual business hours for the sole purpose of and only
to the extent necessary to verify the completeness and accuracy of the records and payments made under this Agreement. Such examination with respect to any fiscal year shall not take place later than [...***...] following the end of
such fiscal year. The accountant shall inform the auditing party only if there has been an underpayment or an overpayment, and if so, the amount thereof and whether the books and records have been kept in a manner consistent with good accounting
practices. The expense of any such inspection shall be borne by the auditing party; provided, however, that, if the inspection discloses an underpayment in excess of [...***...] percent [...***...] then the audited
party shall pay the out of pocket costs of such audit. 
  
 9.5 Withholding of Taxes. Any withholding of taxes levied by tax authorities outside the United States on the payments hereunder shall be borne by the party receiving such payment and deducted by the party making such payment from
the sums otherwise payable by it hereunder for payment to the proper tax authorities. The parties agree to cooperate with each other, in the event a party claims exemption from such withholding or seeks deductions under any double taxation or other
similar treaty or agreement from time to time in force, such cooperation to consist of providing receipts of payment of such withheld tax or other documents reasonably available. 
  
 9.6 Exchange and Royalty Rate Controls. If at any time legal restrictions prevent the prompt
remittance of part or all royalties with respect to any country where any Allergan Product or ACADIA Reversion Product is sold, payment shall be made through such lawful means or methods as the party making such payment may determine. When in any
country the law or regulations prohibit both the transmittal and deposit of royalties on sales in such a country, royalty payments shall be suspended for as long as such prohibition is in effect, and as soon as such prohibition ceases to be in
effect, all royalties that would have been obligated to be transmitted or deposited, but for the prohibition, shall forthwith be deposited or transmitted promptly to the extent allowable, as the case may be. If any royalty rate specified in this
Agreement should exceed the permissible rate established in any country, the royalty rate for sales in such country shall be adjusted to the highest legally permissible or government-approved rate. 
  

	 	10.	INTELLECTUAL PROPERTY. 

  
 10.1 Ownership of Technology. Inventorship with respect to inventions made pursuant to work carried out under the Collaboration
shall be determined in accordance with United States rules of inventorship. Except as provided below, each party shall own solely all 

  

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Commission. 
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 21. 

 
inventions made solely by any of its employees or agents in the course of the Collaboration, and the parties shall own jointly all inventions jointly made by
any employee or agent of ACADIA and any employee or agent of Allergan in the course of the Collaboration. 
  
 10.2 Patent Prosecution. It is the intention of the parties to secure broad patent protection for discoveries and inventions made
in the course of the Collaboration. 
  
 (a)
Allergan shall be responsible for the filing, prosecution and maintenance at Allergan’s sole cost of (i) all Allergan Patents, unless such Allergan Patents are then subject to an exclusive license granted to ACADIA under Section 7.5(b), and
(ii) all Collaboration Patents or ACADIA Patents to which Allergan then has an exclusive license under Section 7.2, to the extent the claims in such Collaboration Patents or ACADIA Patents are limited to Licensed Target/Chemistries or Designated
Target/Chemistries in the Field. 
  
 (b)
Except for those patents or patent applications described in Section 10.2(a), ACADIA shall be responsible for the filing, prosecution and maintenance at ACADIA’s sole cost, except as provided in Section 10.2(c), of (i) all ACADIA Patents
and all Collaboration Patents and (ii) all Allergan Patents to which ACADIA then has an exclusive license under Section 7.5(b). 
  
 (c) Allergan shall reimburse ACADIA for [...***...] percent ([...***...]%) of all reasonable out of
pocket legal expenses incurred by ACADIA that are associated with filing, prosecuting and maintaining (i) all Collaboration Patent(s) to which Allergan has [...***...] and (ii) any ACADIA Patents to which Allergan has
[...***...], to the extent that such ACADIA Patents include claims with respect to Licensed Target/Chemistries or Designated Target/Chemistries [...***...]. 
  
 (d) Each party that is responsible for filing, prosecution and maintenance under this Section 10.2 of
patent rights that are owned by, or subject to an exclusive license granted under this Agreement to such party shall (i) consider in good faith the requests and suggestions of such other party with respect to strategies for filing, prosecuting and
maintaining such patent rights that are subject to this Section 10.2, and (ii) keep such other party informed of progress with regard to the filing, prosecution and maintenance of such patent applications and patents that are subject to this Section
10.2. In the event a party is responsible for the filing, prosecution and maintenance of patent applications or patents hereunder that are owned by, or are subject to an exclusive license granted under this Agreement and elects, other than as
provided above, not to do so (other than because such party has determined in good faith not to file a patent application with respect to an invention but to maintain such invention as a trade secret), it shall inform the other party at least sixty
(60) days before any relevant deadline for filing or other action and transmit all information reasonable and appropriate relating to such patent or patent application, and such other party shall have the right to file, prosecute and maintain such
patent applications and patents at its own expense, in which case the party declining to continue to prosecute and maintain such patent applications and patents shall assign to the other party its rights in such patent applications and patents or
terminate the license under such patent applications and patents granted to it by the other party. 
  

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Commission. 
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 22. 

 10.3 Cooperation of the Parties. Each party agrees to cooperate fully in the
preparation, filing, and prosecution of any patent rights under this Agreement. Such cooperation includes, but is not limited to: 
  
 (a) executing all papers and instruments, or requiring its employees or agents to execute such papers and instruments, so as to
effectuate the ownership of patent rights set forth in Section 10.1 above and to enable the owning party to apply for and to prosecute patent applications in any country; and 
  
 (b) promptly informing the other party of any matters coming to such party’s attention that may
affect the preparation, filing or prosecution of any such patent applications. 
  
 10.4 Infringement by Third Parties. 
  
 (a) ACADIA and Allergan shall promptly notify the other in writing of any alleged or threatened infringement of any patent included
in the Allergan Patents, ACADIA Patents or Collaboration Patents of which they become aware. In the event any alleged or threatened infringement of any patent included in the Allergan Patents, ACADIA Patents or Collaboration Patents by a Third Party
cannot be terminated without litigation, the provisions of Section 10.4(b) or (c), as applicable, and Section 10.4(d) shall apply. 
  
 (b) Allergan shall have the first right, but not the obligation, to bring and control any action or proceeding, at its own expense
and by counsel of its own choice, with respect to infringement of a patent (i) included in the Allergan Patents, unless such Allergan Patents are then subject to an exclusive license granted to ACADIA under Section 7.5(b), or (ii) included in the
Collaboration Patents or ACADIA Patents to which Allergan then has an exclusive license under Section 7.2, to the extent the claims in such Collaboration Patents or ACADIA Patents are limited to Licensed Target/Chemistries or Designated
Target/Chemistries in the Field. 
  
 (c)
Except as provided in Section 10.4(b), ACADIA shall have the first right to bring and control any action or proceeding with respect to infringements of a patent (i) included in the ACADIA Patents or the Collaboration Patents or (ii) included in
the Allergan Patents to which ACADIA then has an exclusive license under Section 7.5(b). 
  
 (d) The party not bringing the action shall have the right, at its own expense and by counsel of its own choice, to be represented
in any action involving any patent owned solely by such party or jointly by the parties. If a party fails to bring an action or proceeding with respect to a patent that is owned by, or is subject to an exclusive license granted under this Agreement
to, the other party within: (i) sixty (60) days following the notice of alleged infringement; or (ii) ten (10) days before the time limit, if any, set forth in the appropriate laws and regulations for the filing of such actions, whichever comes
first, such other party shall have the right to bring and control any such action at its own expense and by counsel of its own choice, and the party initially declining to bring such action shall have the right, at its own expense and by counsel of
its own choice, to be represented in any such action. In the event a party brings an infringement action, the other party shall cooperate fully, including if required to 

  

 23. 

 
bring such action, the furnishing of a power of attorney. Neither party shall have the right to settle any patent infringement action under this Section 10.4
in a manner that diminishes the rights or interests of the other party without the consent of such other party. Except as otherwise agreed to by the parties as part of a cost sharing arrangement, any recovery realized as a result of such action,
after reimbursement of any out-of-pocket expenses of Allergan and ACADIA in connection with such action, shall be divided between the parties in accordance with their relative economic interests as directly related to the royalty payments described
in Section 8.6 hereof. 
  
 10.5 Infringement
of Third Party Rights. Each party shall promptly notify the other in writing of any allegation by a Third Party that the activity of either of the parties hereunder infringes or may infringe the intellectual property rights of such Third Party.
Allergan shall have the first right but not the obligation to control any defense of any such claim involving alleged infringement of Third Party rights by Allergan’s activities under this Agreement at its own expense and by counsel of its own
choice, and ACADIA shall have the right but not the obligation, at its own expense, to be represented in any such action by counsel of its own choice. If Allergan fails to proceed in a timely fashion with regard to such defense, ACADIA shall have
the right but not the obligation to control any such defense of such claim at its own expense and by counsel of its own choice, and Allergan shall have the right but not the obligation, at its own expense, to be represented in any such action by
counsel of its own choice. ACADIA shall have the first right but not the obligation to control any defense of any such claim involving alleged infringement of Third Party rights by ACADIA’s activities under this Agreement at its own expense and
by counsel of its own choice, and Allergan shall have the right but not the obligation, at its own expense, to be represented in any such action by counsel of its own choice. If ACADIA fails to proceed in a timely fashion with regard to such
defense, Allergan shall have the right but not the obligation to control any such defense of such claim at its own expense and by counsel of its own choice, and ACADIA shall have the right but not the obligation, at its own expense, to be
represented in any such action by counsel of its own choice. Neither party shall have the right to settle any infringement action under this Section 10.5 in a manner that diminishes the rights or interests of the other party without the consent of
such party. 
  
 10.6 Trademarks. Allergan
and ACADIA shall each obtain, own and enforce its own trademarks with respect to Allergan Products or ACADIA Reversion Products, respectively, that each commercializes hereunder. 
  
 10.7 Patent Labeling. Each party shall mark all products or their containers that are manufactured
used or sold under the terms of this Agreement in accordance with the appropriate patent markings laws. 
  

	 	11.	REPRESENTATIONS AND WARRANTIES. 

  
 11.1 Representations and Warranties. Each party represents to the other that as of the Effective
Date: 
  
 (a) Corporate Power. It is duly
organized and validly existing under the laws of its state of incorporation or formation, and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof; 
  

 24. 

 (b) Due Authorization. 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; 
  
 (c) Binding Agreement. This Agreement is legally binding upon it and enforceable in accordance with
its terms. The execution, delivery and performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law or
regulation of any court, governmental body or administrative or other agency having jurisdiction over it; 
  
 (d) Grant of Rights; Maintenance of Agreements. It has not, and will not during the Term, grant any right to any Third Party which
would conflict with the rights granted to the other party hereunder. It has (or will have at the time performance is due) maintained and will maintain and keep in full force and effect all agreements (including license agreements) and filings
(including patent filings) necessary to perform its obligations in accordance with the terms of this Agreement; and 
  
 (e) Validity. It is aware of no action, suit or inquiry or investigation instituted by or before any court or governmental agency
which questions or threatens the validity of this Agreement or of any Allergan Patents or ACADIA Patents. 
  
 11.2 ACADIA Representations and Warranties. ACADIA represents and warrants that as of the Effective Date: 
  
 (a) it is the sole and exclusive owner of the ACADIA
Patents and ACADIA Know-How and has sufficient rights and power to grant the licenses to Allergan which it purports to grant herein, and no such rights granted to Allergan hereunder are licensed by ACADIA from any Third Party; 
  
 (b) the ACADIA Know-How and the ACADIA Patents are
free of any encumbrances, liens, judgments and/or security interests that would affect the exercise by Allergan of its rights in the Field; [...***...] 
  
 (c) to its actual knowledge, there are no outstanding and unresolved claims or accusations that any
compounds or products manufactured, used or sold by ACADIA and licensed hereunder or any methods or process practiced by ACADIA pursuant to this Agreement infringe or may infringe any Third Party patent(s) or other intellectual property rights; and

  
 (d) all patents and patent
applications included in the ACADIA Patents are valid and in full force and effect, and are not the current subject of any interference or opposition proceeding. 
  

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 25. 

 11.3 Allergan Representations and Warranties. Allergan represents and warrants
that as of the Effective Date: 
  
 (a)
Allergan owns the Allergan Technology and has sufficient rights and power to grant the licenses to ACADIA which it purports to grant herein; and 
  
 (b) to its actual knowledge, there are no outstanding and unresolved claims or accusations that any methods or process practiced by
Allergan as part of the Allergan Technology infringe or may infringe any third party patent(s) or other intellectual property rights. 
  
 11.4 Disclaimer Concerning Technology. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, THE TECHNOLOGY AND INTELLECTUAL PROPERTY RIGHTS
PROVIDED BY EACH PARTY HEREUNDER ARE PROVIDED “AS IS” AND EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES, IN ALL CASES WITH RESPECT THERETO. Without limiting the generality of the foregoing, each party
expressly does not warrant (a) the success of any study or test commenced under the Collaboration or (b) the safety or usefulness for any purpose of the technology it provides hereunder. 
  

	 	12.	CONFIDENTIALITY; PUBLICATION. 

  
 12.1 Confidentiality. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the parties,
the parties agree that, during the Term and for the [...***...] immediately following the Term, each party (the “Receiving Party”) shall keep confidential and shall not publish or otherwise disclose and shall not
use for any purpose (other than as expressly provided for in this Agreement) any Confidential Information furnished to it by, or otherwise belonging to, the other party (the “Disclosing Party”) pursuant to this Agreement.
Each party may use Confidential Information of the other party only to the extent required to accomplish the purposes of this Agreement. The Receiving Party will use at least the same standard of care as it uses to protect proprietary or
confidential information of its own to ensure that its employees, agents, consultants and other representatives do not disclose or make any unauthorized use of such proprietary or confidential information. Each party will promptly notify the other
upon discovery of any unauthorized use or disclosure of the other party’s Confidential Information. 
  
 12.2 Exceptions. The obligations of confidentiality and non-use contained in Section 12.1 will not apply to the extent it can be
established by the Receiving Party by competent proof that such Confidential Information: 
  
 (a) is now, or hereafter becomes, through no act or failure to act on the part of the Receiving Party, generally known or
available; 
  

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 26. 

 (b) is known by the Receiving Party at the time of receiving such information,
other than under confidentiality, as evidenced by its records; 
  
 (c) is hereafter furnished to the Receiving Party by a Third Party, as a matter of right and without restriction on disclosure; 
  
 (d) is independently developed by the Receiving Party without the aid, application or use of
Confidential Information of the Disclosing Party; or 
  
 (e) is the subject of a written permission to disclose provided by the Disclosing Party. 
  
 12.3 Terms of Agreement. The parties agree that this Agreement and the terms hereof will be considered Confidential Information of
both parties. Notwithstanding the foregoing, either party may disclose such terms as are required to be disclosed under strictures of confidentiality to bona fide potential sublicensees or for fund raising or financing efforts to investors and
lenders and potential investors and lenders or as otherwise required pursuant to applicable law. 
  
 12.4 Authorized Disclosure. Each party may disclose Confidential Information belonging to the other party to the extent such
disclosure is reasonably necessary in the following instances: 
  
 (a) filing or prosecuting patents relating to the Collaboration; 
  
 (b) regulatory filings; 
  
 (c) prosecuting or defending litigation; 
  

(d) complying with applicable court orders or governmental regulations; 
  
 (e) conducting pre-clinical or clinical trials of
Active Compounds within Licensed Target/Chemistries or Designated Target/Chemistries; and 
  
 (f) disclosure to Affiliates, sublicensees, employees, consultants, agents or other Third Parties in connection with due diligence
or similar investigations by such Third Parties, in each case who agree to be bound by similar terms of confidentiality and non-use at least equivalent in scope to those set forth in this Section 12. 
  
 Notwithstanding the foregoing, in the event a party is required to make a
disclosure of the other party’s Confidential Information pursuant to this Section 12.4, it will seek to secure confidential treatment of such information at least as diligently as such party would use to protect its own Confidential
Information. The parties will consult with each other on the provisions of this Agreement to be redacted in any filings made by the parties with the Securities and Exchange Commission or as otherwise required by law. 
  

 27. 

 12.5 Publications. Each party to this Agreement recognizes that the publication of
papers regarding results of and other information regarding the Collaboration, including oral presentations and abstracts, may be beneficial to both parties provided such publications are subject to reasonable controls to protect Confidential
Information. Accordingly, each party shall have the right to review and approve any paper proposed for publication by the other party, including oral presentations and abstracts, which utilizes data generated from the Collaboration and/or includes
Confidential Information of the other party. Before any such paper is submitted for publication, the party proposing publication shall deliver a complete copy to the other party at least forty-five (45) days prior to submitting the paper to a
publisher. Such other party shall review any such paper and give its comments to the publishing party within thirty (30) days of its receipt of such paper. With respect to oral presentation materials and abstracts, the reviewing party shall make
reasonable efforts to expedite review of such materials and abstracts, and shall return such items as soon as practicable to the publishing party with appropriate comments, if any, but in no event later than thirty (30) days from the date of receipt
by the reviewing party. The publishing party shall comply with the reviewing party’s request to delete references to Confidential Information of the reviewing party in any such paper and agrees to withhold publication of same for an additional
ninety (90) days in order to permit the parties to obtain patent protection, if either of the parties deems it necessary, in accordance with the terms of this Agreement. 
  

	 	13.	TERM AND TERMINATION. 

  
 13.1 Term of the Agreement. The term of the collaborative activities of the parties pursuant to the Research Plan and the
Additional Research Plan shall commence on the Effective Date and continue until expiration of the Research Term, unless earlier terminated pursuant to Section 13.2, 13.3 or 13.4, or extended by mutual written agreement of the parties. The term of
this Agreement (the “Term”) shall commence on the Effective Date and continue until the later of (a) six (6) months after the expiration of the last Royalty Term for any Allergan Product or ACADIA Reversion Product or (b) the
expiration of the last to expire Valid Claim covering an ACADIA Royalty-Free Product, unless earlier terminated pursuant to Section 13.2, 13.3 or 13.4 or extended by mutual written agreement of the parties. 
  
 13.2 Termination by Mutual Agreement. The parties may
at any time terminate this Agreement by written agreement executed by both Allergan and ACADIA. 
  
 13.3 Termination by Allergan. 
  
 (a) Allergan may terminate this Agreement by giving ninety (90) days prior written notice to ACADIA at any time after completion of
the Research Term. 
  
 (b) At any time
during the Research Term after the second (2nd) anniversary of the Effective Date, Allergan may terminate this Agreement by giving written notice to ACADIA within ninety (90) days after receipt of notice of a Change in Control (as defined in Section
16.14). In the event Allergan terminates this Agreement pursuant to this Section 13.3(b), then notwithstanding any contrary provision of this Agreement, the licenses granted to Allergan pursuant to Sections 7.1(a), 7.1(b) and 7.2 shall continue in
full force and effect and shall be exclusive even as to ACADIA (or the surviving entity following such Change in 

  

 28. 

 
Control), and ACADIA shall, promptly following such election by Allergan, transfer and disclose to Allergan all ACADIA Know-How as is reasonably necessary to
enable Allergan to fully exercise its rights under this Section 13.3(b). In addition, effective upon termination by Allergan of this Agreement pursuant to this Section 13.3(b), ACADIA hereby grants to Allergan, for a period ending on the later of
(x) the end of Research Term or any extension or renewal agreed to by Allergan and ACADIA prior to termination by Allergan or (y) as long as Allergan continues to use commercially reasonable efforts to pursue research, development, marketing and/or
sale of at least one (1) Chemistry within a Collaboration Target/Chemistry in the Field, an exclusive (even as to ACADIA or the surviving entity), worldwide license, with the right to sublicense pursuant to Section 7.4 under the ACADIA Technology
and ACADIA’s interest in the Collaboration Technology to the fullest extent necessary to permit Allergan alone to conduct all activities necessary to pursue its rights under this Agreement (subject to Allergan’s obligations to pay ACADIA
or the surviving entity the milestones set forth in Section 8.5 and the royalties set forth in Sections 8.6(a) and 8.6(b)). Allergan may exercise any Option then in effect under Section 5.2 or any option to license a Designated Target/Chemistry then
in effect under Section 5.4 prior to the effective date of termination under this Section 13.3(b) (but in no event beyond the applicable Option Period), subject to payment of the applicable license fee pursuant to Section 8.2; provided,
however, that the provisions regarding Allergan’s obligation to conduct further work with ACADIA pursuant to Section 5.2 (a)(i) or (ii) and to provide research funding to ACADIA pursuant to Section 8.2(a)(ii) shall not apply. 
  
 13.4 Termination for Cause. Each party shall have the
right to terminate this Agreement upon sixty (60) days’ prior written notice to the other upon the occurrence of any of the following: 
  
 (a) Upon or after the bankruptcy, insolvency, dissolution or winding up of the other party (other than a dissolution or winding up
for the purpose of reconstruction or amalgamation); or 
  
 (b) Upon or after the breach of any material provision of this Agreement by the other party if the breaching party has not cured such breach within the sixty (60) day period following written notice of termination by the
non-breaching party. 
  
 13.5 Effect of
Termination or Expiration; Surviving Obligations. 
  
 (a) Expiration or termination of this Agreement shall not affect any rights or obligations of either party accruing prior to such expiration or termination. Upon expiration or termination of this Agreement, all rights and obligations
of the parties under this Agreement shall terminate, except that the terms of this Section 13.5 (and the provisions referenced herein) and Sections 1, 9.4, 10.1, 10.3, 11.4, 12.1, 12.2, 12.3, 12.4, 14, 15 and 16 of this Agreement shall survive
expiration or termination of this Agreement. Promptly after termination of this Agreement, except as otherwise provided in this Section 13.5, each party shall return or dispose of any technology or know-how and Confidential Information of the other
party in the accordance with the instructions of such other party, including, without limitation, any compounds, assays or other biological or chemical materials. 
  

 29. 

 (b) Upon termination of this Agreement by Allergan for any reason, other than
breach by ACADIA or pursuant to Section 13.3(b), all rights to Licensed Target/Chemistries and Designated Target/Chemistries and to the ACADIA Technology and ACADIA’s interest in the Collaboration Technology granted to Allergan under this
Agreement shall revert to ACADIA, and all licenses granted by Allergan to ACADIA under Section 7.3 and 7.5(b) of this Agreement and the applicable provisions of Sections 6, 7.4, 8, 9, 10, 12 and 13 shall survive termination and remain in full force
and effect for so long as ACADIA is not in breach of its obligations to Allergan under this Agreement. 
  
 (c) Upon termination of this Agreement by Allergan pursuant to Section 13.3(b), the licenses described in Section 13.3(b) and the
provisions of Sections 6, 7.1(a), 7.1(b), 7.2, 7.3, 7.4, 8.5, 8.6(a), 8.6(b), 8.6(d), 8.6(e), 9, 10, 12 and 13 shall survive termination and remain in full force and effect for so long as the parties are not in breach of their remaining respective
obligations under this Agreement. 
  
 (d)
Upon termination of this Agreement by a party for breach by the other party pursuant to Section 13.4(b), all licenses granted to the non-breaching party under Section 7 of this Agreement and the applicable provisions of Sections 6, 7, 8, 9, 10,
12 and 13 shall survive termination and remain in full force and effect for so long as such non-breaching party is not in breach of its obligations to the other party under this Agreement. 
  
 (e) Allergan Fully Paid Up License. Upon expiration
of the last Royalty Term for an Allergan Product, Allergan shall have a fully-paid, royalty free, worldwide, non-exclusive, perpetual license to use the ACADIA Know-How to manufacture, use and sell such Allergan Product; provided however,
that Allergan shall have no right to sublicense outside the Field any such ACADIA Know-How which is Confidential Information. 
  
 (f) ACADIA Fully Paid Up License. Upon expiration of the last Royalty Term for an ACADIA Reversion Product, ACADIA shall have a
fully-paid, royalty-free, worldwide, non-exclusive, perpetual license to use the Allergan Know-How to manufacture, use and sell such ACADIA Reversion Product. Upon expiration of the last Valid Claim covering an ACADIA Royalty-Free Product, ACADIA
shall have a fully-paid, royalty-free, worldwide, non-exclusive, perpetual license to use the Allergan Know-How to manufacture, use and sell such ACADIA Royalty-Free Product; provided however, that ACADIA shall have no right to sublicense in
the Field any such Allergan Know-How with respect to any ACADIA Royalty-Free Product described in Section 1.5(a), which is Confidential Information. 
  

	 	14.	INDEMNITY. 

  
 14.1 Indemnification. 
  
 (a) ACADIA hereby agrees to save, defend and hold Allergan and its Affiliates and their respective directors, officers, employees
and agents harmless from and against any and all claims, suits, actions, demands, liabilities, expenses and/or loss, including reasonable legal expense and attorneys’ fees (collectively, “Claims”), to which any of them
may become subject as a result of any claim, demand, action or other proceeding by any Third Party 

  

 30. 

 
to the extent such Claims arise directly or indirectly out of (a) the development, manufacture, use, handling, storage, sale or other disposition of any
Collaboration Target/Chemistries or ACADIA Product by ACADIA or its Affiliates or sublicensees (other than Allergan), or (b) the gross negligence or willful misconduct of ACADIA or its Affiliates or sublicensees, except, in each case, to the extent
such Claims result from the gross negligence or willful misconduct of Allergan or its Affiliates or sublicensees. 
  
 (b) Allergan hereby agrees to save, defend and hold ACADIA and its Affiliates and their respective directors, officers, employees
and agents harmless from and against any and all Claims, to which any of them may become subject as a result of any claim, demand, action or other proceeding by any Third Party to the extent such Claims arise directly or indirectly out of (a) the
development, manufacture, use, handling, storage, sale or other disposition of any Collaboration Target/Chemistries or Allergan Product by Allergan or its Affiliates or sublicensees (other than ACADIA), or (b) the gross negligence or willful
misconduct of Allergan or its Affiliates or sublicensees, except, in each case, to the extent such Claims result from the gross negligence or willful misconduct of ACADIA or its Affiliates or sublicensees. 
  
 14.2 Control of Defense. Any entity entitled to
indemnification under this Section 14 shall give notice to the indemnifying party of any Claims that may be subject to indemnification, promptly after learning of such Claim, and the indemnifying party shall assume the defense of such Claims with
counsel reasonably satisfactory to the indemnified party. If such defense is assumed by the indemnifying party with counsel so selected, the indemnifying party will not be subject to any liability for any settlement of such Claims made by the
indemnified party without its consent (but such consent will not be unreasonably withheld or delayed), and will not be obligated to pay the fees and expenses of any separate counsel retained by the indemnified party with respect to such Claims.

  
 14.3 Insurance. Allergan, at its own
expense, shall maintain product liability insurance (or self-insure), in amounts consistent with industry standards for other such pharmaceutical companies during the Term and shall name ACADIA as an additional insured with respect to such
insurance. Allergan shall provide a certificate of insurance (or evidence of self-insurance) evidencing such coverage. ACADIA, at its own expense, shall maintain product liability insurance (or self-insure) in amounts consistent with industry
standards for other such biotechnology companies during the Term and shall name Allergan as an additional insured with respect to such insurance. ACADIA shall provide a certificate of insurance (or evidence of self-insurance) evidencing such
coverage. 
  

	 	15.	GOVERNING LAW; DISPUTE RESOLUTION. 

  
 15.1 Governing Law. This Agreement shall be governed by the laws of the State of California as such
laws are applied to contracts entered into or to be performed entirely within such state. 
  
 15.2 Dispute Resolution. Subject to Section 3.4, and except with respect to matters pertaining to injunctive relief, in the event
of any dispute, the parties shall refer such dispute to the Chief Executive Officer of ACADIA and a Senior Executive of Allergan appointed 

  

 31. 

 
by Allergan’s Chief Executive Officer for attempted resolution by good faith negotiations within sixty (60) days after such referral is made. During
such period of good faith negotiations, any applicable time periods under this Agreement shall be tolled. In the event such executives are unable to resolve such dispute within such sixty (60) day period, the parties shall submit their dispute to
binding arbitration before a retired California Superior Court Judge at J.A.M.S./Endispute located in Orange County, California, such arbitration to be conducted pursuant to the J.A.M.S./Endispute procedure rules for commercial disputes then in
effect. The award of the arbitrator shall include an award of reasonable attorneys’ fees and costs to the prevailing party. 
  
 15.3 Jurisdiction and Venue. Except as provided in Section 3.4 or 15.2 above, any claim or controversy arising out of or related to
this Agreement or any breach hereof (including claims for injunctive relief) shall be adjudicated in the state and federal courts in Orange County having jurisdiction over disputes arising in the State of California, and the parties hereby consent
to the jurisdiction and venue of such courts. 
  

	 	16.	General Provisions. 

  
 16.1 Notices. All notices required or permitted to be given under this Agreement shall be in writing and shall be mailed by
registered or certified mail, Federal Express or other nationally recognized overnight delivery service, addressed to the signatory to whom such notice is required or permitted to be given and transmitted by facsimile to the number indicated below.
All notices shall be deemed to have been given when mailed, as evidenced by the postmark at the point of mailing, or faxed. 
  

			
	 All notices to Allergan shall be addressed as follows:
	  	 Allergan, Inc.
 2525 Dupont Drive
 Irvine, CA 92623
 Attn: President, Research and Development
 Fax: (714) 246-6987

		
	 with a copy to:
	  	 Allergan, Inc.
 2525 Dupont Drive
 Irvine, CA 92623
 Attn: Allergan General Counsel
 Fax: (714) 246-4774

		
	 All notices to ACADIA shall be addressed as follows:
	  	 ACADIA Pharmaceuticals Inc.
 3911 Sorrento Valley
Blvd.
 San Diego, CA 92121
 Attn: Vice President, Business
Development
 Fax: (858) 558-2872

		
	 with a copy to:
	  	 Cooley Godward LLP
 4401 Eastgate
Mall
 San Diego, CA 92121

  

 32. 

			
	 	  	 Attn: L. Kay Chandler
 Fax: (858)
550-6420

  
 Any party may, by
written notice to the other, designate a new address or fax number to which notices to the party giving the notice shall thereafter be mailed or faxed. 
  
 16.2 Force Majeure. No party shall be liable for any delay or failure of performance (other than payment obligations) to the extent
such delay or failure is caused by circumstances beyond its reasonable control and that by the exercise of due diligence it is unable to prevent, provided that the party claiming excuse uses its commercially reasonable efforts to overcome the
same. 
  
 16.3 Entirety of Agreement. This
Agreement embodies the entire, final and complete agreement and understanding between the parties and replaces and supersedes all prior discussions and agreements between them with respect to its subject matter, except for the 1997 Agreement, which
shall continue in accordance with its terms, except to the extent specifically modified hereby. No modification or waiver of any terms or conditions hereof shall be effective unless made in writing and signed by a duly authorized officer of each
party. 
  
 16.4 Non-Waiver. The failure of
a party in any one or more instances to insist upon strict performance of any of the terms and conditions of this Agreement shall not constitute a waiver or relinquishment, to any extent, of the right to assert or rely upon any such terms or
conditions on any future occasion. 
  
 16.5
Disclaimer of Agency or Partnership. Neither party is, or will be deemed to be, the legal representative or agent of the other, nor shall either party have the right or authority to assume, create, or incur any third party liability or
obligation of any kind, express or implied, against or in the name of or on behalf of another except as expressly set forth in this Agreement. In addition, neither party shall be deemed to be a member of a partnership with the other party.

  
 16.6 Severability. If a court of
competent jurisdiction declares any provision of this Agreement invalid or unenforceable, or if any government or other agency having jurisdiction over either ACADIA or Allergan deems any provision to be contrary to any laws, then that provision
shall be severed and the remainder of the Agreement shall continue in full force and effect. To the extent possible, the parties shall revise such invalidated provision in a manner that will render such provision valid without impairing the
parties’ original intent. 
  
 16.7
Affiliates; Assignment. Except as otherwise provided herein, neither party may assign its rights or delegate its duties under this Agreement without the prior written consent of the other party, not to be unreasonably withheld. Notwithstanding
the foregoing, each party may assign this Agreement to any of its Affiliates, to a special purpose corporation or similar entity at least fifty percent (50%) of the outstanding shares of any class or series of stock of which is owned by such party
in a manner such that the assignor will remain liable and responsible for the performance and observance of all its duties and obligations hereunder without the consent of the other party. In addition, the consent of the other party will not be
required in connection with a merger involving either party or with respect to an assignment of 

  

 33. 

 
this Agreement in connection with, as the case may be, the acquisition, sale of all or substantially all of the assets of either party, or a change of
control or similar transaction. In the event of such transaction, however, intellectual property rights of the acquiring party to such transaction (if other than one of the parties to this Agreement) will not be included in the technology licensed
hereunder. This Agreement shall be binding upon the successors and permitted assigns of the parties. Any attempted delegation or assignment not in accordance with this Section 16.7 shall be of no force or effect. Notwithstanding the foregoing
provisions of this Section 16.7, or any other provision of this Agreement, ACADIA may not assign or otherwise transfer its rights hereunder, whether by merger, acquisition, sale of assets, operation of law or otherwise, to [...***...].

  
 16.8 Headings. The headings
contained in this Agreement are inserted for reference only and shall not be deemed a part of the text hereof. 
  
 16.9 Limitation of Liability. EXCEPT FOR AMOUNTS PAYABLE UNDER SECTIONS 8 AND 14 AND LIABILITY FOR BREACH OF CONFIDENTIALITY
OR FOR INFRINGEMENT OR MISAPPROPRIATION, NO PARTY SHALL BE LIABLE TO ANOTHER FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES, INCLUDING BUT NOT LIMITED TO LOST PROFITS, ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT,
REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. 
  
 16.10 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which shall constitute together the same document. 
  
 16.11 Bankruptcy. All rights and licenses
granted under this Agreement will be considered for purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to “intellectual property” as defined under Section 101(56) of the Bankruptcy Code. The parties agree that a licensee
of such rights under this Agreement will retain and may fully exercise all of its rights and elections under the Bankruptcy Code. In the event that a licensor seeks or is involuntarily placed under the protection of the Bankruptcy Code, and the
trustee in bankruptcy rejects this Agreement, the licensee hereby elects, pursuant to Section 365(n), to retain all rights granted to it under this Agreement to the extent permitted by law. 
  
 16.12 Public Disclosure. Except for such
disclosure as is deemed necessary, in the reasonable judgment of a party, to comply with applicable laws or regulations, no public announcement, news release, public statement or publication relating to the existence of this Agreement, or the terms
hereof, will be made without the other party’s prior written approval, which approval shall not be unreasonably withheld. The parties agree that they will use reasonable efforts to coordinate the initial announcement or press release relating
to the existence of this Agreement so that such initial announcement or press release is made within forty-five (45) days of the Effective Date. 
  
 16.13 Export. The parties agree not to export, directly or indirectly, any U.S. source technical data acquired from the
other party or any products utilizing such data to 

  

 ***Certain confidential information on this page has been omitted and filed separately with the
Commission. 
 Confidential treatment has been requested with respect to the omitted portions. 
  
 34. 

 
countries outside the United States, which export may be in violation of the United States export laws or regulations. 
  
 16.14 Notice of Board Evaluation of Potential
Change in Control. In the event ACADIA’s Board of Directors decides to formally evaluate a potential Change in Control (as defined below), whether at the initiation of ACADIA’s Board of Directors or in response to a Third Party offer,
ACADIA shall give written notice thereof to Allergan. “Change in Control” shall mean any transaction or series of related transactions in which a Third Party acquires or becomes the beneficial owner of (a) more than fifty percent
(50%) of the outstanding voting securities or voting control of ACADIA or the surviving entity, whether by merger, consolidation, reorganization, tender offer or other means, or (b) all or substantially all the assets of ACADIA. 
  
 [Remainder of this page intentionally left blank.] 
  

 35. 

 IN WITNESS WHEREOF, the parties hereto have duly
executed this COLLABORATIVE RESEARCH, DEVELOPMENT AND LICENSE Agreement. 
  

			
	 ACADIA PHARMACEUTICALS INC.

		
	By	 	 /s/ ULI HACKSELL

	 	 	

		
	 Title
	 	 CEO

  

			
	 ALLERGAN, INC. 

		
	By	 	 /s/ LESTER J. KAPLAN 

	 	 	

		
	 Title
	 	 Corporate V.P.

  

 [SIGNATURE PAGE TO COLLABORATIVE
RESEARCH, DEVELOPMENT 
 AND LICENSE AGREEMENT] 

 EXHIBIT A 
  
 ACADIA PATENTS AS OF THE EFFECTIVE DATE 
  

 A-1 

 ACADIA PHARMACEUTICALS INC. 
 PENDING APPLICATIONS 
  

							
	 [...***...]
	 	 [...***...]
	 	 [...***...]
	 	 [...***...]

  

 ***Certain confidential information on this page has been omitted and filed separately with the
Commission. 
 Confidential treatment has been requested with respect to the omitted portions. 
  
 A-2 

 ACADIA PHARMACEUTICALS INC. 
 ISSUED PATENTS 
  

							
	 [...***...]
	 	 [...***...]
	 	 [...***...]
	 	 [...***...]

  

 ***Certain confidential information on this page has been omitted and filed separately with the
Commission. 
 Confidential treatment has been requested with respect to the omitted portions. 
  
 A-3 

 ACADIA PHARMACEUTICALS INC. 
 ISSUED PATENTS 
  

							
	 [...***...]
	 	 [...***...]
	 	 [...***...]
	 	 [...***...]

  

 ***Certain confidential information on this page has been omitted and filed separately with the
Commission. 
 Confidential treatment has been requested with respect to the omitted portions. 
  
 A-4 

 ACADIA PHARMACEUTICALS INC. 
 ISSUED PATENTS 
  

							
	 [...***...]
	 	 [...***...]
	 	 [...***...]
	 	 [...***...]

  

 ***Certain confidential information on this page has been omitted and filed separately with the
Commission. 
 Confidential treatment has been requested with respect to the omitted portions. 
  
 A-5 

 EXHIBIT B 
  
 FORM OF MATERIALS TRANSFER AGREEMENT 
  

 B-1 

 MATERIALS TRANSFER AGREEMENT 
  
 THIS AGREEMENT is made as of
                    , 200_, by and between ACADIA PHARMACEUTICALS INC., a Delaware
corporation (“ACADIA”) and ALLERGAN, INC., a Delaware corporation (“Allergan”). 
  
 [ACADIA/Allergan] (hereinafter, the “Recipient”) desires to receive the materials described on
Exhibit A attached hereto (the “Materials”) from [Allergan/ACADIA] (hereinafter, the “Provider”) for the purpose of performing certain studies pursuant to the Collaborative Research, Development and
License Agreement by and between ACADIA and Allergan dated             , 2003 (the “Research Agreement”) as described in detail in the Research Plan (as
defined in the Research Agreement) (the “Project”). 
  
 The Recipient and the Provider hereby agree as follows: 
  

	 	1.	Use of Materials. 

  
 The Recipient will utilize its expertise and facilities to undertake the Project and will use the Materials solely for the Project. The Recipient shall
not sell, transfer, disclose or otherwise provide access to the Materials, any method or process relating thereto or any material that could not have been made but for foregoing to any person or entity without the prior written consent of the
Provider, except that the Recipient may allow access to the Materials to its employees or agents or permitted subcontractors for purposes consistent with this Agreement. The Recipient will take reasonable steps to ensure that such employees and
agents or permitted subcontractors will use the materials in a manner that is consistent with the terms of this Agreement. The Recipient will destroy the Materials or otherwise dispose of the Materials as mutually agreed by the Provider and the
Recipient upon expiration or termination of this Agreement. 
  

	 	2.	Precautions. 

  
 The Recipient understands that the Materials may have unpredictable and unknown biological and/or chemical properties, that they are to be used with
caution, and that they are not to be used for testing in or treatment of humans. The Recipient will use the Materials in compliance with all applicable laws and regulation, including but not limited to, any laws or regulations relating to research
testing, production, storage, transportation, export, packaging, labeling or other authorized use of the materials those applicable to research involving recombinant DNA and isotopes. 
  

	 	3.	Intellectual Property. 

  
 In performing the Projects, the Recipient may develop ideas, inventions, techniques and other technology[...***...], and associated
intellectual property (collectively “Inventions”). The parties agree that ownership of all Inventions, including without limitation Inventions relating to the Materials, their preparation or use, shall be governed by the
provisions of the Research Agreement relating to ownership of intellectual property. 
  

 ***Certain confidential information on this page has been omitted and filed separately with the
Commission. 
 Confidential treatment has been requested with respect to the omitted portions. 
  
 B-2 

	 	5.	Confidentiality. 

  
 The parties agree that the terms of the Research Agreement relating to Confidential Information shall apply to all information that one party receives
from the other party pursuant to this Agreement. 
  

	 	6.	No License. 

  
 Nothing in this Agreement shall be construed as conferring on either party any implied license or implied option to license any disclosed Confidential
Information, technology, or any patent or patent application owned by the other party. 
  

	 	7.	Warranty Disclaimer. 

  
 THE MATERIALS ARE SUPPLIED TO THE RECIPIENT WITH NO WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR THAT THEY ARE FREE FROM THE RIGHTFUL CLAIM OR ANY THIRD PARTY BY WAY OF INFRINGEMENT OR THE LIKE. 
  

	 	8.	Term and Termination. 

  
 This Agreement will be effective as of the date first written above and will continue until the Research Agreement terminates. The parties may terminate
this Agreement prior to such time or extend the term of this Agreement by mutual written agreement as provided herein. Either party will have the right to terminate this Agreement on [...***...] written notice for material breach of
this Agreement, which breach is not cured within such [...***...] period. Promptly upon any termination, the Recipient will deliver to the Provider any remaining Materials, and any modifications, replications or derivatives thereof and
copies of all results of the Projects. Section 3, 4, 5, 6, 7 and 8 will survive the termination or expiration of this Agreement. 
  

	 	9.	Entire Agreement, Governing Law. 

  
 This Agreement sets forth complete and final agreements of the parties with respect to the subject matter of this Agreement and supersedes all prior
agreements and understandings, written or oral, between the parties hereto which relate to the subject matter of this Agreement, other than the Research Agreement. This Agreement may be amended only by a writing signed by the parties. This Agreement
shall be governed by the laws of the State of California without regard to choice of law provisions. 
  

 ***Certain confidential information on this page has been omitted and filed separately with the
Commission. 
 Confidential treatment has been requested with respect to the omitted portions. 
  
 B-3 

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

									
	 ALLERGAN, INC. 
	 	 	 	 ACADIA PHARMACEUTICALS INC.

					
	By:	 	 	 	 	 	By:	 	 
	 	 	
	 	 	 	 	 	

	 Title:
	 	 	 	 	 	 Title:
	 	 
	 	 	
	 	 	 	 	 	

  

 B-4Form of Subscription Agreement dtd 4/27/04

 Exhibit 4.1 
  

2,800,000 Shares 
  
 Common Stock and Related Warrants 
  
 Subscription Agreement 
  
 April 27, 2004 
  
 TO EACH OF THE PURCHASERS 
 NAMED ON THE SIGNATURE 
 PAGES HEREOF 
  
 Ladies and Gentlemen: 

 
 Capital Title Group, Inc., a Delaware corporation (the
“Company”), hereby confirms its agreement with each of the purchasers named on the signature pages hereof (each a “Purchaser” and, collectively, the “Purchasers”), as set forth below. 
  
 1. The Securities. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to each Purchaser (a) the number of shares of its Common Stock, par value $0.001 per share (the “Common Stock”), set forth on the signature page of such Purchaser hereto
(collectively, the “Shares”) and (b) a warrant, substantially in the form attached hereto at Exhibit A (the “Warrants”), to acquire one share (the “Warrant Shares”) of Common Stock, for each
five Shares purchased pursuant to this Agreement. 
  
 The Shares
and the Warrants are sometimes herein collectively referred to as the “Securities.” 
  
 The Securities will be offered and sold to the Purchasers without such offers and sales being registered under the Securities Act of 1933, as amended
(together with the rules and regulations of the Securities and Exchange Commission (the “Commission”) promulgated thereunder, the “Securities Act”), in reliance on Section 4(2) of the Securities Act and Rule 506
promulgated thereunder. 
  
 In connection with the sale of the
Securities, the Company has (i) prepared a confidential offering memorandum dated April 9, 2004 (including the documents incorporated by reference therein or attached as exhibits thereto, the “Memorandum”), setting forth or
including a description of the Securities, the terms of the offering of the Securities, a description of the Company and its subsidiaries and any material developments relating to the Company and its subsidiaries occurring after the date of the most
recent historical financial statements included therein; and (ii) made available its reports required to be filed by the Company under the Exchange Act since December 31, 2003 (the foregoing materials and all amendments thereto being collectively
referred to herein as the “SEC Reports”). The SEC Reports, along with the Memorandum, are collectively referred to as the “Disclosure Documents.” All references in this Agreement to financial statements and
schedules and other information which is “contained,” 

  

 
“included” or “stated” in the Disclosure Documents (or other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated by reference in the Disclosure Documents. 
  
 The Purchasers and their permitted transferees of the Securities will be entitled to the benefits of the Registration Rights Agreement to be dated as of
April 27, 2004 among the parties hereto (the “Registration Rights Agreement”) pursuant to which the Company has agreed, among other things, to file a registration statement (the “Registration Statement”) pursuant to
Rule 415 under the Securities Act relating to the resale of the Shares and the Warrant Shares by holders thereof. 
  
 The Registration Rights Agreement, the Engagement Letter dated March 30, 2004 with Ryan Beck & Co., Inc. (“RBC”), and Sanders Morris
Harris Inc. (“SMH” and, with RBC, the “Placement Agents”), this Agreement, and the Warrants are herein collectively referred to as the “Transaction Documents.” 
  
 2. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each Purchaser and the Placement Agents that: 
  
 (a) 
  
 (i) The Disclosure Documents as of their respective dates and (after giving effect to any updated disclosures therein) did not, and as of
the Closing Date as defined in Section 3 below will not, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not
misleading. The Disclosure Documents (other than the Memorandum, which we understand has not been filed with the Commission) and the documents incorporated or deemed to be incorporated by reference therein, at the time they were or hereafter are
filed with the Commission, complied and will comply in all material respects with the requirements of the Securities Act and/or the Exchange Act, as the case may be (together with the rules and regulations of the Commission promulgated thereunder,
the “Securities Acts”), as applicable. 
  
 (ii) The financial statements of the Company included in the Disclosure Documents and the SEC Reports were prepared in accordance with generally accepted accounting principles applied on a consistent basis during the
periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries
as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments. KPMG LLP, which has examined certain of such financial
statements as set forth in their reports included in the Disclosure Documents, is an independent public accounting firm under the Securities Act. 
  

 2 

 (iii) Any statistical and market and industry-related data included in the Disclosure
Documents is based on or derived from sources which the Company believes to be reliable and accurate or represent the Company’s good faith estimates that are made on the basis of data derived from such sources. 
  
 (b) Since January 1, 2004, the Company has filed all SEC
Reports on a timely basis (after giving effect to any valid extensions). All material agreements to which the Company or any Subsidiary is a party or to which the property or assets of the Company or any Subsidiary are subject are filed with or
incorporated into the SEC Reports. 
  
 (c) Each
of the Company and its subsidiaries set forth in Exhibit B hereto (the “Subsidiaries”) has been duly incorporated and each of the Company and the Subsidiaries is validly existing in good standing as a corporation under the
laws of its jurisdiction of incorporation, with the requisite corporate power and authority to own its properties and conduct its business as now conducted as described in the Disclosure Documents and is duly qualified to do business as a foreign
corporation, as the case may be, in good standing in all other jurisdictions where the ownership or leasing of its properties or the conduct of its business requires such qualification, except where the failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the business, financial condition, properties, or results of operations of the Company and the Subsidiaries, taken as a whole (any such event, a “Material Adverse
Effect”); as of the Closing Date, the Company will have the authorized, issued and outstanding capitalization set forth in the Disclosure Documents (subject to the issuance of shares pursuant to options outstanding under the Company’s
stock option plans or outstanding warrants or other rights to acquire shares described in the Disclosure Documents); except as set forth in Exhibit B hereto, the Company does not have any subsidiaries or own directly or indirectly any of the
capital stock or other equity or long-term debt securities of or have any equity interest in any other person; all of the outstanding shares of capital stock of the Company and the Subsidiaries have been duly authorized and validly issued, are fully
paid and nonassessable and were not issued in violation of any preemptive or similar rights and are owned free and clear of all liens, encumbrances, equities, and restrictions on transferability (other than those imposed by the Securities Act and
the state securities or “Blue Sky” laws) or voting; except as set forth in the Disclosure Documents, all of the outstanding shares of capital stock of the Subsidiaries are owned, directly or indirectly, by the Company; except as set forth
in the Disclosure Documents, no options, warrants or other rights to purchase from the Company or any Subsidiary, agreements or other obligations of the Company or any Subsidiary to issue or other rights to convert any obligation into, or exchange
any securities for, shares of capital stock of or ownership interests in the Company or any Subsidiary are outstanding; and except as set forth in the Disclosure Documents, there is no agreement, understanding or arrangement among the Company or any
Subsidiary and each of their respective stockholders or any other person relating to the ownership or disposition of any capital stock of the Company or any capital stock in any Subsidiary or the election of directors of the Company or any
Subsidiary or the governance of the Company’s or any Subsidiary’s affairs, and, if any, such agreements, understandings and arrangements will not be breached or violated as a result of the execution and delivery of, or the consummation of
the transactions contemplated by, the Transaction Documents. 
  

 3 

 (d) The Company has the requisite corporate power and authority to execute, deliver and
perform its obligations under the Transaction Documents. Each of the Transaction Documents has been duly and validly authorized by the Company and, when executed and delivered by the Company, will constitute a valid and legally binding agreement of
the Company, enforceable against the Company in accordance with its terms except as (i) the enforcement thereof may be limited by (A) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors’ rights generally or (B) general principles of equity and the discretion of the court before which any proceeding therefore may be brought (regardless of whether such enforcement is considered in a
proceeding at law or in equity) (collectively, the “Enforceability Exceptions”), and (ii) any rights to indemnity, or contribution under the Registration Rights Agreement may be limited by federal and state securities laws and
public policy considerations. 
  
 (e) The Shares
have been duly authorized and, when issued upon payment thereof in accordance with this Agreement, will have been validly issued, fully paid and nonassessable. The Warrant Shares have been duly authorized and validly reserved for issuance, and when
issued upon exercise of the Warrants in accordance with the terms thereof, will have been validly issued, fully paid and nonassessable. The capital stock of the Company, including the Common Stock, conforms to the description thereof contained in
the Disclosure Documents. There are no preemptive or similar rights with respect to the Common Stock. 
  
 (f) No consent, approval, authorization, license, qualification, exemption or order of any court or governmental agency or body or third
party is required for the performance of the Transaction Documents by the Company or for the consummation by the Company of any of the transactions contemplated thereby, or the use of the proceeds of the issuance and sale of the Securities as
described in the Memorandum, including all filings with the Commission and Nasdaq, and all consents, approvals, authorizations, licenses, or qualifications under Nasdaq rules applicable to listed companies, except for such consents, approvals,
authorizations, licenses, qualifications, exemptions or orders (i) as have been obtained on or prior to the Closing Date, (ii) as are not required to be obtained on or prior to the Closing Date that will be obtained when required, or (iii) the
failure to obtain which would not have a Material Adverse Effect. All consents, approvals, authorizations, licenses, qualifications, exemptions and orders set forth in the Disclosure Documents which are required to be obtained by the Closing Date
will be in full force and effect as of the Closing Date and not the subject of any pending or, to the knowledge of the Company, threatened attack by appeal or direct proceeding or otherwise. 
  
 (g) None of the Company or the Subsidiaries is (i) in
violation of its certificate of incorporation or bylaws, (ii) in breach or violation of any statute, judgment, decree, order, rule or regulation applicable to it or any of its properties or assets, which breach or violation would, individually or in
the aggregate, have a Material Adverse Effect, or (iii) in default (nor has any event occurred which with notice or passage of time, or both, would constitute a default) in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement, permit, certificate or agreement or instrument to which it is a 

  

 4 

 
party or to which it is subject, which default would, individually or in the aggregate, have a Material Adverse Effect. 
  
 (h) The execution, delivery and performance by the Company
of the Transaction Documents and the consummation by the Company of the transactions contemplated thereby and the fulfillment of the terms thereof will not (a) violate, conflict with or constitute or result in a breach of or a default under (or an
event that, with notice or lapse of time, or both, would constitute a breach of or a default under) any of (i) the terms or provisions of any contract, indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement,
permit, certificate or agreement or instrument to which any of the Company or the Subsidiaries is a party or to which any of their respective properties or assets are subject, (ii) the certificate of incorporation or bylaws of any of the Company or
the Subsidiaries or (iii) any statute, judgment, decree, order, rule or regulation of any court or governmental agency or other body, including Nasdaq, applicable to the Company or the Subsidiaries or any of their respective properties or assets or
(b) result in the imposition of any lien upon or with respect to any of the properties or assets now owned or hereafter acquired by the Company or any of the Subsidiaries, which violation, conflict, breach, default or lien would, individually or in
the aggregate, have a Material Adverse Effect. 
  
 (i) Except as described in the Disclosure Documents, there is not pending or, to the knowledge of the Company, threatened any action, suit, proceeding, inquiry or investigation, governmental or otherwise, to which any of the Company or the
Subsidiaries is a party, or to which their respective properties or assets are subject, before or brought by any court, arbitrator or governmental agency or body, that, if determined adversely to the Company or any such Subsidiary, would,
individually or in the aggregate, have a Material Adverse Effect or that seeks to restrain, enjoin, prevent the consummation of or otherwise challenge the issuance or sale of the Securities to be sold hereunder or the application of the proceeds
therefrom or the other transactions described in the Disclosure Documents. 
  
 (j) None of the Company or the Subsidiaries has, or, after giving effect to the issuance and sale of the Securities hereunder, will have, any liability for any prohibited transaction (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”)), accumulated funding deficiency (as defined in Section 302 of
ERISA) or any complete or partial withdrawal from a multiemployer plan (as defined in Section 4001(a)(3) of ERISA), with respect to any plan (as defined in Section 3(3) of ERISA) as to which the Company or any of the Subsidiaries has or could have
any direct or indirect, actual or contingent liability. With respect to such plans, the Company and the Subsidiaries are, and, after giving effect to the issuance and sale of the Securities hereunder, will be, in compliance in all material respects
with all provisions of the Code and ERISA. 
  
 (k) The Company and the Subsidiaries own or possess adequate licenses or other rights to use all patents, trademarks, service marks, trade names, copyrights and know-how that are necessary to conduct their businesses as described in the
Disclosure Documents. None of the Company or the Subsidiaries has received any notice of infringement of or conflict with (or knows of any such infringement of or conflict with) asserted rights of 

  

 5 

 
others with respect to any patents, trademarks, service marks, trade names, copyrights or know-how that, if such assertion of infringement or conflict were
sustained, would, individually or in the aggregate, have a Material Adverse Effect. 
  
 (l) Each of the Company and the Subsidiaries possesses all licenses, permits, certificates, consents, orders, approvals and other
authorizations from, and has made all declarations and filings with, all federal, state, local and other governmental authorities, all self-regulatory organizations and all courts and other tribunals presently required or necessary to own or lease,
as the case may be, and to operate its respective properties and to carry on its respective businesses as now or proposed to be conducted as set forth in the Disclosure Documents (“Permits”), except where the failure to obtain such
Permits would not, individually or in the aggregate, have a Material Adverse Effect; each of the Company and the Subsidiaries has fulfilled and performed all of its obligations with respect to such Permits and no event has occurred which allows, or
after notice or lapse of time would allow, revocation or termination thereof or results in any other material impairment of the rights of the holder of any such Permit; and none of the Company or the Subsidiaries has received any notice of any
proceeding relating to revocation or modification of any such Permit, except as described in the Disclosure Documents and except where such revocation or modification would not, individually or in the aggregate, have a Material Adverse Effect.

  
 (m) Subsequent to the respective dates as of
which information is given in the Disclosure Documents and except as described therein, (i) the Company and the Subsidiaries have not incurred any material liabilities or obligations, direct or contingent, or entered into any material transactions
not in the ordinary course of business, (ii) the Company and the Subsidiaries have not purchased any of their respective outstanding capital stock or ownership interest, or declared, paid or otherwise made any dividend or distribution of any kind on
any of their respective capital stock or otherwise (other than, with respect to any of such Subsidiaries, the purchase of, or a dividend or distribution on, capital stock or ownership interest owned by the Company), (iii) there has not been any
material change in the capital stock, ownership interest or any increase in the long-term indebtedness of the Company or any of the Subsidiaries, (iv) there has not occurred any event or condition, individually or in the aggregate, that has a
Material Adverse Effect and (v) the Company and the Subsidiaries have not sustained any material loss or interference with respect to their respective businesses or properties from fire, flood, hurricane, earthquake, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any legal or governmental proceeding. 
  
 (n) There are no legal or governmental proceedings nor are there any contracts or other documents required by the Securities Act to be
described in a prospectus that are not described in the Disclosure Documents. Except as described in the Disclosure Documents, none of the Company or the Subsidiaries is in default under any of the contracts described in the Disclosure Documents,
has received a notice or claim of any such default or has knowledge of any breach of such contracts by the other party or parties thereto, except such defaults or breaches as would not, individually or in the aggregate, have a Material Adverse
Effect. 
  

 6 

 (o) Except as set forth in the Disclosure Documents, neither the Company nor any
Subsidiary owns any real property, or has any agreements or options to acquire any real property. Each of the Company and the Subsidiaries has good and marketable title to all leasehold estates of real property occupied or leased by it, free and
clear of all liens, charges, encumbrances or restrictions, except as described in the Disclosure Documents or such as would not, individually or in the aggregate, have a Material Adverse Effect. All material leases, contracts and agreements,
including those referred to in the Disclosure Documents, to which the Company or any of the Subsidiaries is a party or by which any of them is bound are valid and enforceable against the Company or any such Subsidiary, are, to the knowledge of the
Company, valid and enforceable against the other party or parties thereto and are in full force and effect. 
  
 (p) Each of the Company and the Subsidiaries has filed all necessary federal, state and foreign income and franchise tax returns, except
where the failure to so file such returns would not, individually or in the aggregate, have a Material Adverse Effect, and has paid all taxes shown as due thereon; and other than tax deficiencies which the Company or any Subsidiary is contesting in
good faith and for which adequate reserves have been provided in accordance with generally accepted accounting principles, there is no tax deficiency that has been asserted against the Company or any Subsidiary that would, individually or in the
aggregate, have a Material Adverse Effect. 
  
 (q) Except as disclosed in the Disclosure Documents and except as would not, individually or in the aggregate, have a Material Adverse Effect, (A) each of the Company and the Subsidiaries is in compliance with all, and is not subject to
liability (including, without limitation, fines or penalties) under any, applicable Environmental Laws, (B) each of the Company and the Subsidiaries has made all filings and provided all notices required under any applicable Environmental Law, and
has all permits, authorizations and approvals required under any applicable Environmental Laws and is in compliance with their requirements, (C) there is no civil, criminal or administrative action, suit, demand, claim, hearing, notice of violation,
investigation, proceeding, notice or demand letter or request for information pending or, to the knowledge of the Company, threatened against the Company or any of the Subsidiaries under any Environmental Law, (D) no lien, charge, encumbrance or
restriction has been recorded under any Environmental Law with respect to any assets, facility or property owned, operated, leased or controlled by the Company or any of the Subsidiaries, (E) neither the Company nor any of the Subsidiaries is
subject to any order, decree or agreement requiring, or otherwise obligated or required to perform any response or corrective action relating to any hazardous material, (F) neither the Company nor any of the Subsidiaries has received notice that it
has been identified as a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”), or any comparable state law, (G) no property or facility of the
Company or any of the Subsidiaries is (i) listed or proposed for listing on the National Priorities List under CERCLA or (ii) listed in the Comprehensive Environmental Response, Compensation and Liability Information System List promulgated pursuant
to CERCLA, or on any comparable list maintained by any state or local governmental authority and (H) there are no past or present actions, events, operations or activities which could reasonably be expected to prevent or interfere with compliance by
the 

  

 7 

 
Company or any Subsidiary with any applicable Environmental Law or to result in liability (including, without limitation, fines or penalties) under any
applicable Environmental Law. 
  
 For purposes of this Agreement,
the following terms shall have the following meanings: “Environmental Law” means any federal, state, local or municipal statute, law, rule, regulation, ordinance, code, policy or rule of common law and any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent decree or judgment binding on any of the Company or the Subsidiaries, relating to pollution or protection of the environment, natural resources or health or safety
including, without limitation, any relating to the release or threatened release of any pollutant, contaminated substance, material, waste, chemical or contaminant subject to regulation thereunder. 
  
 (r) Except as set forth in the Disclosure Documents, there
is no strike, labor dispute, slowdown or work stoppage with the employees of the Company or any of the Subsidiaries which is pending or, to the knowledge of the Company, threatened. 
  
 (s) Each of the Company and the Subsidiaries carries insurance (including self-insurance) in such amounts
and covering such risks as in its reasonable determination is adequate for the conduct of its business and the value of its properties. 
  
 (t) Each of the Company and the Subsidiaries (i) makes and keeps accurate books and records and (ii) maintains internal accounting
controls which provide reasonable assurance that (A) transactions are executed in accordance with management’s authorization, (B) transactions are recorded as necessary to permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted only in accordance with management’s authorization and (D) the reported accountability for its assets is compared with existing assets at reasonable intervals. The Company is
in compliance with the applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations thereunder, except where such noncompliance could not have or reasonably be expected to result in a Material Adverse Effect.
The Company has implemented required procedures under Section 404 of the Sarbanes-Oxley Act of 2002 and expects to be compliant with the provision and applicable rules and regulations in a timely manner. 
  
 (u) None of the Company or the Subsidiaries is, or
immediately after the Closing Date will be, required to register as an “investment company” or a company “controlled by” an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the
“Investment Company Act”). 
  
 (v) None of the Company or the Subsidiaries or any of such entities’ directors, officers, managers, employees, agents or controlling persons has taken, directly or indirectly, any action designed, or that might reasonably be expected,
to cause or result, under the Securities Acts or otherwise, in, or that has constituted, stabilization or manipulation of the price of the Common Stock. 
  
 (w) None of the Company, the Subsidiaries or any of their respective Affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act) directly, or 

  

 8 

 
through any agent, (i) sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of any “security” (as defined in the
Securities Act) which is or could be integrated with the sale of the Securities hereunder in a manner that would require the registration under the Securities Act of the Securities or (ii) engaged in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act) in connection with the offering of the Securities or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act. Assuming the
accuracy of the representations and warranties of the Purchasers in Section 6 hereof, it is not necessary in connection with the offer, sale and delivery of the Securities to the Purchasers in the manner contemplated by this Agreement to register
any of the Securities under the Securities Act. 
  
 (x) The Company is eligible to use Form S-3 for the resale of the Shares and Warrant Shares by Purchasers and the Placement Agents or their transferees. Except as set forth on Schedule 2(x) of this Agreement, no holder of securities
(other than Purchasers or the Placement Agents hereunder following the Closing) of the Company or any Subsidiary will be entitled to have such securities registered under the Shelf Registration Statement. 
  
 (y) [Intentionally deleted.] 
  
 (z) 
  
 (i) The Company has entered into a merger agreement with
Nationwide Appraisal Services Corporation (“Nationwide” or the “Acquisition Target”), dated as of January 26, 2004 for the purchase of Nationwide by the Company, subject to customary approvals and closing
conditions. The Company represents and warrants that the Company has the requisite corporate power and authority to consummate the purchase of the Acquisition Target and, assuming the consummation of the offering of the Shares, to execute, deliver
and perform its obligations under all documents necessary to consummate the purchase of the Acquisition Target, and that such documents have been duly and validly authorized by the Company and constitute a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by the Enforceability Exceptions. 
  
 (ii) The audited financial statements for Nationwide Appraisal Services Corporation (“Nationwide”) included in the Disclosure
Documents present fairly the consolidated financial position, results of operations, cash flows and changes in stockholders’ equity of Nationwide, at the dates and for the periods to which they relate and have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis; the unaudited pro forma combined consolidated financial statements of Capital Title Group and Nationwide included in the Disclosure Documents present fairly the pro forma
combined consolidated financial position, results of operations and cash flows of the entities, at the dates and for the periods to which they relate and have been prepared in accordance with generally accepted accounting principles applied on a

  

 9 

 
consistent basis with the audited consolidated financial statements included therein. 
  
 (aa) Except as described in Schedule 2(aa), no brokerage or finder’s fees or commissions are or
will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no
obligation with respect to any fees or with respect to any claims made by or on behalf of other persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

  
 (bb) Any certificate signed by any officer of
the Company or any Subsidiary and delivered pursuant to this Agreement shall be deemed a representation and warranty by the Company to each Purchaser as to the matters covered thereby. 
  
 3. Purchase, Sale and Delivery of the Shares. On the basis of the representations, warranties, agreements and
covenants herein contained and subject to the terms and conditions herein set forth, the Company agrees to issue and sell to the Purchasers, and each Purchaser acting severally and not jointly agrees to purchase from the Company, the number of
Shares set forth on such Purchaser’s signature page hereto, at $3.60 per share. In connection with the purchase and sale of Shares hereunder, each Purchaser will receive, for no additional consideration, Warrants to purchase shares of Common
Stock in the form attached hereto as Exhibit A. 
  
 One or more certificates in definitive form for the Shares that the Purchasers have agreed to purchase hereunder, and in such denomination or denominations and registered in such name or names as each Purchaser requests upon notice to the
Company at least 48 hours prior to the Closing Date, as well as the Warrants, shall be delivered by or on behalf of the Company, against payment by or on behalf of the Purchasers, of the purchase price therefor by wire transfer of immediately
available funds to the account of the Company previously designated by it in writing. Such delivery of and payment for the Securities shall be made at the Phoenix, Arizona offices of Squire, Sanders & Dempsey L.L.P. on April 27, 2004, or at such
date as the Purchasers and the Company may agree upon, such time and date of delivery against payment being herein referred to as the “Closing Date.” The Company will make such certificate or certificates for the Shares available
for checking and packaging by the Purchasers at the Phoenix, Arizona offices of Squire, Sanders & Dempsey L.L.P. at least 24 hours prior to the Closing Date. 
  
 4. Certain Covenants. The Company covenants and agrees with each Purchaser and the Placement Agents that: 

 
 (a) None of the Company or any of its Affiliates will
sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any “security” (as defined in the Securities Act) which could be integrated with the sale of the Securities in a manner which would require the registration
under the Securities Act of the Securities. 
  

 10 

 (b) The Company will use reasonable efforts to apply the net proceeds from the sale of
the Securities as set forth under “The Offering - Use of Proceeds” in the Memorandum. 
  
 (c) Except in connection with the filing of the Shelf Registration Statement, the Company will not, and will not permit any of the
Subsidiaries to, engage in any form of general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) in connection with the offering of the Securities or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act. 
  
 (d) The Company will not become, at any time prior to the expiration of three years after the Closing Date, an open-end investment company, unit investment trust, closed-end investment company or face-amount
certificate company that is or is required to be registered under Section 8 of the Investment Company Act. 
  
 (e) The Company will use commercially reasonable efforts to consummate the purchase of the Acquisition Target as soon as practicable
following the Closing Date. The Company shall make all SEC filings required as a result of such acquisition, including, but not limited to, a Form 8-K with any required audited, unaudited and pro forma financial statements of the Company and the
Acquisition Target, and disclose in a press release and/or in a filing with the Commission all other material non-public information with respect to the Nationwide acquisition within five business days after the date the Nationwide acquisition is
consummated. The Company covenants, represents and warrants that, as of such disclosures: (i) there shall not be any material information pertaining to the Company that is not in the public domain, and (ii) the pro forma, audited and unaudited, and
other financial information pertaining to Nationwide included in such disclosures shall be substantially the same as included in the Memorandum. 
  
 (f) The Company will use commercially reasonable efforts to do and perform all things required to be done and performed by it under this
Agreement and the other Transaction Documents prior to or after the Closing Date and to satisfy all conditions precedent on its part to the obligations of the Purchasers to purchase and accept delivery of the Securities. 
  
 5. Conditions of the Purchasers’ Obligations. The obligation of
each Purchaser to purchase and pay for the Securities is subject to the following conditions unless waived in writing by the relevant Purchaser: 
  
 (a) The representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects
(other than representations and warranties with a Material Adverse Effect qualifier, which shall be true and correct as written) on and as of the Closing Date; the Company shall have complied in all material respects with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date. 
  
 (b) None of the issuance and sale of the Securities pursuant to this Agreement or any of the transactions contemplated by any of the other
Transaction Documents 

  

 11 

 
shall be enjoined (temporarily or permanently) and no restraining order or other injunctive order shall have been issued in respect thereof; and there shall
not have been any legal action, order, decree or other administrative proceeding instituted or, to the Company’s knowledge, threatened against the Company or against any Purchaser relating to the issuance of the Securities or any
Purchaser’s activities in connection therewith or any other transactions contemplated by this Agreement, the other Transaction Documents or the Disclosure Documents. 
  
 (c) The Purchasers and Placement Agent shall have received certificates, dated the Closing Date and signed
by the chief executive officer and the chief financial officer of the Company, to the effect of paragraphs 6(a) and (b). 
  
 (d) On or before the Closing Date, the Purchasers shall have received the Registration Rights Agreement executed by the Company and such
agreement shall be in full force and effect at all times from and after the Closing Date, subject to the Enforceability Exceptions. 
  
 (e) The Purchasers and Placement Agent shall have received an opinion of Squire Sanders & Dempsey L.L.P., counsel to the Company, with
respect to the authorization of the Shares and the Warrant Shares and other customary matters in substantially the form attached hereto as Exhibit C and subject to customary assumptions, limitations and qualifications for transactions of the
type contemplated by the Transaction Documents. 
  
 6.
Representations and Warranties of the Purchasers. 
  
 (a) Each Purchaser, severally and not jointly and as to itself only, represents and warrants to the Company that the Securities to be acquired by it hereunder (including the Warrant Shares that it may acquire upon
exercise thereof) are being acquired for its own account for investment (and/or on behalf of managed accounts who are purchasing solely for their own accounts for investment) and with no intention of distributing or reselling such Securities or any
part thereof or interest therein in any transaction which would be in violation of the securities laws of the United States of America or any State, without prejudice, however, to a Purchaser’s right, subject to the provisions of this Agreement
and the Registration Rights Agreement, at all times to sell or otherwise dispose of all or any part of such Shares or Warrant Shares under an effective registration statement under the Securities Act and in compliance with applicable state
securities laws or under an exemption from such registration, and subject, nevertheless, to the disposition of a Purchaser’s property being at all times within its control. By executing this Agreement, each Purchaser further represents that
such Purchaser does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to any Person with respect to any of the Securities or the Warrant Shares. 
  
 (b) Each Purchaser understands that the Securities and the
Warrant Shares have not been registered under the Securities Act and may not be offered, resold, pledged or otherwise transferred except (a) pursuant to an exemption from registration under the Securities Act (and, if requested by the Company, based
upon an opinion of counsel acceptable to the Company) or pursuant to an effective registration statement under the Securities Act and 

  

 12 

 
(b) in accordance with all applicable securities laws of the states of the United States and other jurisdictions. 
  
 Each Purchaser agrees to the imprinting, so long as appropriate, of the
following legend on the Shares and the Warrant Shares: 
  
 The shares of common stock evidenced by this certificate have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold, pledged or otherwise transferred (“transferred”) in the absence
of such registration or an applicable exemption therefrom. In the absence of such registration, such shares may not be transferred unless, if the Company requests, the Company has received a written opinion from counsel in form and substance
satisfactory to the Company stating that such transfer is being made in compliance with all applicable federal and state securities laws. 
  
 The legend set forth above may be removed if and when the Shares or the Warrant Shares, as the case may be, are disposed of pursuant to an effective
registration statement under the Securities Act or in the opinion of counsel to the Company experienced in the area of United States Federal securities laws such legends are no longer required under applicable requirements of the Securities Act. The
Shares and the Warrant Shares shall also bear any other legends required by applicable Federal or state securities laws, which legends may be removed when in the opinion of counsel to the Company experienced in the applicable securities laws, the
same are no longer required under the applicable requirements of such securities laws. The Company agrees that it will provide each Purchaser, upon request, with a substitute certificate, not bearing such legend at such time as such legend is no
longer applicable. Each Purchaser agrees that, in connection with any transfer of Shares or the Warrant Shares by it pursuant to an effective registration statement under the Securities Act, such Purchaser will comply with all prospectus delivery
requirements of the Securities Act. The Company makes no representation, warranty or agreement as to the availability of any exemption from registration under the Securities Act with respect to any resale of Shares or the Warrant Shares. 

 
 (c) Each Purchaser is an investor that is an accredited
investor within the meaning of Rule 501(a) of Regulation D under the Securities Act. 
  
 (d) Each Purchaser, severally and not jointly and as to itself only, represents and warrants to the Company that it has such knowledge,
sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, such Purchaser having been represented by counsel, and has so evaluated the
merits and risks of such investment and is able to bear the economic risk of such investment and, at the present time, is able to afford a complete loss of such investment. 
  
 (e) Each Purchaser, severally and not jointly and as to itself only, represents and warrants to the Company
that (i) the purchase of the Securities to be purchased by it has been duly and properly authorized and this Agreement has been duly executed and 

  

 13 

 
delivered by it or on its behalf and constitutes the valid and legally binding obligation of such Purchaser, enforceable against the Purchaser in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights generally and to general principals of equity; (ii) the
purchase of the Securities to be purchased by it does not conflict with or violate its charter, by-laws or any law, regulation or court order applicable to it; and (iii) the purchase of the Securities to be purchased by it does not impose any
penalty or other onerous condition on such Purchaser under or pursuant to any applicable law or governmental regulation. 
  
 (f) Each Purchaser, severally and not jointly and as to itself only, represents and warrants to the Company that neither it nor any of its
directors, officers, employees, agents, or controlling persons has taken, directly or indirectly, any actions designed, or that might reasonably be expected to cause or result, under the Securities Acts or otherwise, in, or that have constituted,
stabilization, or manipulation of the price of the Common Stock. 
  
 (g) Each Purchaser acknowledges receipt of the Disclosure Documents and further acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers
from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and the Company’s financial
condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment in the Securities; and (iii) the opportunity to obtain such additional information which the Company possesses or can
acquire without unreasonable effort or expense that is necessary to verify the accuracy and completeness of the information contained in the Disclosure Documents. 
  
 (h) Each Purchaser understands and acknowledges that (i) the Securities are offered and sold without
registration under the Securities Act in a private placement that is exempt from the registration provisions of the Securities Act and (ii) the availability of such exemption depends in part on, and that the Company, its counsel and the Placement
Agent will rely upon, the accuracy and truthfulness of the foregoing representations and such Purchaser hereby consents to such reliance. 
  
 (i) Each Purchaser understands and acknowledges that the Securities offered by the Company, as described in the Disclosure Documents, are
offered on a “best efforts” basis and that the Company reserves the right to accept purchases of more or less than the number of Securities set forth in the Disclosure Documents; in the event that less than the number of Securities set
forth in the Disclosure Documents are sold by the Company, the Company’s use of proceeds, operations and financial information as set forth in the Disclosure Documents could be adversely affected. 
  
 (j) Each Purchaser, severally and not jointly and as to
itself only, represents and warrants to the Company that the Purchasers are not acting as a group for purposes of Section 13(d) or 16(b) of the Exchange Act. 
  

 14 

 7. Survival Clause. The respective representations, warranties, agreements and covenants of the
Company and the Purchasers set forth in this Agreement and related documents shall remain in full force and effect, regardless of (i) any investigation made by or on behalf of the Company, any of its officers or directors, or any Purchaser and (ii)
delivery of, payment for or disposition of the Securities, and shall be binding upon and shall inure to the benefit of any successors, assigns, heirs or personal representatives of the Company and the Purchasers for the one (1) year period following
the Closing Date. 
  
 8. Termination. 
  
 (a) This Agreement may be terminated in the sole discretion
of the Company by notice to each Purchaser severally and not jointly if at the Closing Date: 
  
 (i) the representations and warranties made by such Purchaser in Section 6 are not true and correct in all material respects; or

  
 (ii) as to the Company, the sale of the
Securities hereunder (i) is prohibited or enjoined by any applicable law or governmental regulation or (ii) subjects the Company to any penalty, or in its reasonable judgment, other onerous condition under or pursuant to any applicable law or
government regulation that would materially reduce the benefits to the Company of the sale of the Securities to such Purchaser, so long as such regulation, law or onerous condition was not in effect in such form at the date of this Agreement.

  
 (b) This Agreement may be terminated in the
sole discretion of any Purchaser by notice to the Company given in the event that the Company shall have failed, refused or been unable to satisfy all conditions on its part to be performed or satisfied hereunder on or prior to the Closing Date or
if after the execution and delivery of this Agreement and prior to the Closing Date: 
  
 (i) a banking moratorium shall have been declared by New York or United States authorities; or 
  
 (ii) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an outbreak or escalation of any other insurrection or armed conflict involving the United States or any other national or international calamity or emergency, or (C) any material
change in the financial markets of the United States that, in the case of (A), (B) or (C) above, in the reasonable judgment of any Purchaser, makes it impracticable or inadvisable to proceed with the delivery of the Securities as contemplated by the
Disclosure Documents, as amended as of the date hereof. 
  
 9.
Notices. All communications hereunder shall be in writing and, (i) if sent to a Purchaser, shall be hand delivered, mailed by first-class mail, couriered by next-day air courier or telecopied and confirmed in writing to their address on their
signature page hereof and (ii) if sent to the Company, shall be hand delivered, mailed by first-class mail, couriered by next-day air courier or telecopied and confirmed in writing to 14648 North Scottsdale Road, Suite 

  

 15 

 
125, Scottsdale, AZ 85254, Attention: Donald R. Head, and with a copy to Squire Sanders & Dempsey, L.L.P., Two Renaissance Square, Suite 2700, 40 North
Central Avenue, Phoenix, AZ 85004-4498, attention: Christopher D. Johnson, and to Ryan Beck & Co., Inc., 650 Madison Avenue, New York, NY 10022, attention Michael J. Kollender, with copy to Greenberg Traurig, L.L.P., 2375 East Camelback Road,
Suite 700, Phoenix, AZ 85016, attention Bruce E. Macdonough. 
  
 All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; five (5) business days after being deposited in the mail, postage prepaid, if mailed; one (1) business day after
being timely delivered to a next-day air courier guaranteeing overnight delivery; and when receipt is acknowledged by the addressee, if telecopied. 
  
 10. Fees and Expenses. The Company shall pay to Snell & Wilmer, L.L.P., as counsel to Hot Creek Capital, L.L.C., (the “Lead
Investor”), up to $25,000 in connection with the preparation of the Transaction Documents, including any out-of-pocket expenses incurred in connection with the preparation of the Transaction Documents, it being understood that Snell &
Wilmer, L.L.P., has only rendered legal advice to the Lead Investor, and not to the Company or any Placement Agent or any other Purchaser in connection with the transactions contemplated hereby, and that each of the Company and each Placement Agent
has relied for such matters on the advice of their own respective counsel. Except as specified in the immediately preceding sentence and in the Registration Rights Agreement, each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of the Transaction Documents. The Company shall pay all stamp and other taxes and
duties levied in connection with the sale of the Securities. 
  
 11. Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other Purchaser under any Transaction Document. The decision of each Purchaser to purchase Securities pursuant to the Transaction Documents has been made by such Purchaser
independently of any other Purchaser. Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser acknowledges that no
other Purchaser has acted as agent for such Purchaser in connection with making its investment hereunder and that no Purchaser will be acting as agent of such Purchaser in connection with monitoring its investment in the Securities or enforcing its
rights under the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it shall
not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. 
  

 16 

 12. Successors. This Agreement shall inure to the benefit of and be binding upon each Purchaser
and the Company and their respective successors and legal representatives, and nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in
respect of this Agreement, or any provisions herein contained; this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of such persons and for the benefit of no other person. No
purchaser of Securities from any Purchaser will be deemed a successor because of such purchase. 
  
 13. No Waiver; Modifications in Writing. No failure or delay on the part of the Company or any Purchaser in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for
herein are cumulative and are not exclusive of any remedies that may be available to the Company or any Purchaser at law or in equity or otherwise. No waiver of or consent to any departure by the Company or any Purchaser from any provision of this
Agreement shall be effective unless signed in writing by the party entitled to the benefit thereof, provided that notice of any such waiver shall be given to each party hereto as set forth below. Except as otherwise provided herein, no amendment,
modification or termination of any provision of this Agreement shall be effective unless signed in writing by or on behalf of each of the Company and the relevant Purchaser. Any amendment, supplement or modification of or to any provision of this
Agreement, any waiver of any provision of this Agreement, and any consent to any departure by the Company or any Purchaser from the terms of any provision of this Agreement shall be effective only in the specific instance and for the specific
purpose for which made or given. Except where notice is specifically required by this Agreement, no notice to or demand on the Company in any case shall entitle the Company to any other or further notice or demand in similar or other circumstances.

  
 14. Entire Agreement. With respect to each Purchaser
and the Company, this Agreement together with any Non-Disclosure Agreement executed by such Purchaser, constitutes the entire Agreement between the Company and such Purchaser and supercedes all prior agreements, understandings and arrangements oral
or written, between the Company and such Purchaser. 
  
 15.
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, or may any provisions hereof be enforced by, any other person.
The Company and each Purchaser acknowledge that the Placement Agents, or their respective affiliates, make no representations, warranties, or covenants with respect the Company or any Purchaser, or any investment in the Shares, the Warrants or the
Warrant Shares by any Purchaser. 
  
 16. APPLICABLE LAW.
THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PROVISIONS RELATING TO 

  

 17 

 
CONFLICTS OF LAW TO THE EXTENT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 
  
 17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  

 18 

 If the foregoing correctly sets forth our understanding, please indicate your acceptance thereof in the
space provided below for that purpose, whereupon this Agreement shall constitute a binding agreement among the Company and the Purchasers. 
  

			
	Very truly yours,
	
	 CAPITAL TITLE GROUP, INC.

		
	By:	 	 
	 	 	

	 Name:
	 	Donald R. Head
	 Title:
	 	 Chairman, President and Chief
 Executive Officer

  

 SUBSCRIPTION AGREEMENT SIGNATURE PAGE 
  

									
	 Accepted and Agreed
	 	 	 	 
			
	 	 	 	 	 Number of Shares Purchased:

	 	 	 	 	 Investment Amount:

					
	By:	 	 	 	 	 	 	 	 
	 	 	
	 	 	 	 	 	 
				
	Date: April 27, 2004	 	 	 	 	 	 

  
 Address: 
  
 Telephone: 
 Facsimile: 
  
 Please register Shares as follows:

  
 Name: 
  
 Tax I.D. Number of Person in whose name 
 the
Shares are to be registered: 
  
 _____________________________ 
  

 Exhibit A 
  
 Form of Warrants 
  
 (attached hereto) 
  

 Exhibit B 
  
 Subsidiaries of Capital Title Group, Inc. 
  

					
	 	  	 Name of Entity

	  	 Jurisdiction of Organization

	 1.
	  	 Capital Title Agency, Inc.
	  	 Arizona

			
	 2.
	  	 New Century Holding Company
	  	 California

			
	 3.
	  	 New Century Title Company
	  	 California

			
	 4.
	  	 NAC1031 Exchange Services
	  	 California

			
	 5.
	  	 CTG Building Co.
	  	 Arizona

			
	 6.
	  	 Capital Information Services, Inc.
	  	 Arizona

			
	 7.
	  	 Nations Holding Group
	  	 California

			
	 8.
	  	 United Title Company
	  	 California

			
	 9.
	  	 First California Title Company
	  	 California

			
	 10.
	  	 United Title Insurance Company
	  	 California

			
	 11.
	  	 Shatto Exchange Services
	  	 California

			
	 12.
	  	 Shatto Information Services, Inc.
	  	 California

			
	 13.
	  	 AdvantageWare, Inc.
	  	 California

			
	 14.
	  	 Land Title of Nevada, Inc.
	  	 Nevada

			
	 15.
	  	 CTG Real Estate Information Service, Inc.
	  	 Colorado

			
	 16.
	  	 CTG Acquisition Corporation
	  	 Pennsylvania

  

 4 

 Exhibit C 
  
 Form of Opinion of Company Counsel 
  
 A. The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the State
of Delaware, and has the corporate power and authority to own its property and to conduct its business as now conducted as described in the Disclosure Documents. 
  
 B. Each of the Company’s subsidiaries set forth in Schedule A hereto (the “Subsidiaries”) is
validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has the corporate power and authority to own its property and to conduct its business as now conducted as described in the Disclosure Documents.

  
 C. The Company has the authorized capitalization set forth in
the Disclosure Documents. All of the outstanding shares of the Company’s capital stock have been duly authorized and, to our knowledge, are validly issued, fully paid and non-assessable. To our knowledge, no holder of securities of the Company
is entitled to have such securities registered under the Shelf Registration Statement except as set forth on Schedule (x) of the Subscription Agreement. 
  
 D. The Shares have been duly authorized and, when issued and delivered to and paid for by the Purchasers in accordance with the terms of the Subscription
Agreement, will be validly issued, fully paid and non-assessable and, will not be issued in violation of any preemptive rights pursuant to law or in the Company’s certificate of incorporation or any agreement or other instrument binding upon
the Company that is listed as an exhibit to the Company’s periodic filings under the Exchange Act. The Warrant Shares have been duly authorized and validly reserved for issuance, and when issued upon exercise of the Warrants in accordance with
the terms thereof, will have been validly issued, fully paid and nonassessable and, will not be issued in violation of any preemptive rights pursuant to law or in the Company’s certificate of incorporation or any agreement or other instrument
binding upon the Company that is listed as an exhibit to the Company’s periodic filings under the Exchange Act. 
  
 E. The Company has the requisite corporate power and authority to execute, deliver and perform its obligations under the Subscription Agreement, the
Registration Rights Agreement, the Warrants and the Engagement Letter (collectively, the “Transaction Documents”), and each such agreement has been duly authorized, executed and delivered by the Company. The Company has the requisite
corporate power and authority to execute, deliver and perform its obligations under all agreements and documents necessary for the acquisition by the Company of the Acquisition Target (as that term is defined in the Subscription Agreement)
(collectively, the “Acquisition Documents”), and each such agreement has been duly authorized, executed and delivered by the Company. 
  
 F. Each of the Transaction Documents constitutes a valid and legally binding obligation of the Company, enforceable against the Company in accordance with
its terms. Each 

  

 5 

 
of the Acquisition Documents constitutes a valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms
subject to (i) the Enforceability Exceptions, and (ii) any rights to indemnity, or contribution under the Registration Rights Agreement as may be limited by federal and state securities laws and public policy considerations. 
  
 G. No consent, approval, authorization, license, qualification, exemption or
order of any court or governmental agency or body, including Nasdaq, is required (or, in the case of the Acquisition Documents, will be required) for the performance of the Transaction Documents by the Company or for the consummation by the Company
of any of the transactions contemplated thereby, except such consents, approvals, authorizations, licenses, qualifications, exemptions or orders as may be required under or by (i) Nasdaq, (ii) the Securities Act and state securities or Blue Sky laws
in connection with registration, pursuant to the Registration Rights Agreement, of the Shares and the Warrant Shares and (iii) state securities or Blue Sky laws in connection with the issuance and sale of the Securities pursuant to the Subscription
Agreement, except for such consents, approvals, authorizations, licenses, qualifications, exemptions or orders (i) as have been obtained on or prior to the Closing Date, (ii) as are not required to be obtained on or prior to the Closing Date that
will be obtained when required, or (iii) the failure to obtain which would not have a Material Adverse Effect. No consent of any third party is required (or, in the case of the Acquisition Documents, will be required) pursuant to the terms of any
Material Agreement for the performance of the Transaction Documents by the Company or for the consummation by the Company of any of the transactions contemplated thereby, except for those (i) as have been obtained on or prior to the Closing Date,
(ii) as are not required to be obtained on or prior to the Closing Date that will be obtained when required, or (iii) the failure to obtain which would not, individually or in the aggregate, have a Material Adverse Effect. 
  
 H. The execution, delivery and performance by the Company of the Transaction
Documents (and, to the extent applicable, the Acquisition Documents) and the consummation by the Company of the transactions contemplated thereby and the issuance of the Shares and the Warrant Shares will not violate, conflict with or constitute or
result in a breach of or a default under (or an event that, with notice or lapse of time, or both, would constitute a breach of or a default under) any of (i) the terms or provisions of any material agreement disclosed in any of the Disclosure
Documents, (ii) the certificate of incorporation or bylaws (or similar organizational document) of the Company or (iii) (assuming compliance with all applicable state securities or Blue Sky laws) any judgment, decree, order of any court or
governmental agency or body, including Nasdaq, having jurisdiction over the Company known to us or any applicable statute, rule or regulation, which violation, conflict, breach or default would, individually or in the aggregate, have a Material
Adverse Effect. 
  
 I. To our knowledge, except as described in
the Disclosure Documents, there is not pending or threatened any action, suit, proceeding, inquiry or investigation, governmental or otherwise, that (i) seeks to restrain, enjoin, prevent the consummation of or otherwise challenge the issuance or
sale of the Securities or the application of the proceeds therefrom by the Company in the manner described in the Memorandum or (ii) if determined adversely to the Company, is reasonably likely to have a Material Adverse Effect. 
  

 6 

 J. The Company is not, and after giving effect to the offering and sale of the Securities and the
application of the proceeds therefrom as described in the Memorandum, will not be required to register as an “investment company” or a company “controlled by” an “investment company” within the meaning of the Investment
Company Act of 1940, as amended. 
  
 K. Based upon the
representations, warranties and agreements of the Company in Section 2 of the Subscription Agreement and of the Purchasers in Section 6 of the Subscription Agreement, it is not necessary in connection with the offer, sale and delivery of the
Securities to the Purchasers under the Subscription Agreement to register the Securities under the Securities Act, it being understood that no opinion is expressed as to any subsequent resale of any of the Securities or shares of Common Stock
issuable upon exercise thereof. 
  
 L. To our knowledge, we have
no reason to believe that any of the Disclosure Documents (other than the financial statements, including supporting schedules, and other financial and statistical data derived therefrom, as to which we express no comment) as of their respective
dates and (after giving effect to any updated disclosures therein) as of the Closing Date contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading. 
  

 7 

 Schedule 2(x) 
  
 Other Registration Rights 
  
 1. The Company has granted Miller Capital Corporation registration rights pursuant to the agreements described below with respect to the following securities: 

 
 a. 89,681 shares of Common Stock issued pursuant to that certain
Acquisition and Consulting Agreement, dated as of January 28, 2002. 
  
 b. 50,000 shares of Common Stock underlying an option to purchase 50,000 shares of Common Stock. This option was issued pursuant to that certain Letter of Agreement, dated June 16, 2002; 
  
 c. 50,000 shares of Common Stock underlying an option to purchase 50,000
shares of Common Stock. This option was issued pursuant to that certain Letter of Agreement, dated May 12, 2000; and 
  
 d. A to-be-determined number of shares of Common Stock pursuant to the Exclusive Acquisition and Management Consulting Agreement dated January 28, 2004.
Pursuant to the Exclusive Acquisition and Management Consulting Agreement, Miller Capital Corporation will receive a fee based upon a formula tied to the total purchase price paid by the Company in connection with the acquisition of the Nationwide
Appraisal Services Corporation. This fee is payable 80% in cash and 20% in stock. 
  
 2. The Company has granted Finwest Group registration rights pursuant to a Registration Rights Agreement dated September 18, 2002, and a Warrant to Purchase Common Stock dated September 18, 2002. 
  

 8 

 Schedule 2(aa) 
  
 Placement Agent and Financial Advisor Compensation 
  

			
		
	 1.
	  	Placement Agency Fee to Ryan Beck & Co. in the amount of $540,000, along with a warrant to purchase 235,180 shares of Common Stock of the Company, as compensation for services rendered as
Placement Agent.
		
	 2.
	  	Placement Agency Fee to Sanders Morris Harris Inc. in the amount of $216,000, along with a warrant to purchase 94,072 shares of Common Stock of the Company, as compensation for services
rendered as Placement Agent.
		
	 3.
	  	Financial Advisory Fee to Miller Capital Corporation in the amount of $225,000, as compensation for services rendered as Financial Advisor.

  

 9

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