Document:

exv10w4

Exhibit 10.4

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

Execution Copy

Manufacturing Services Agreement

May 26, 2010

 

 

Table of Contents

	 	 	 	 	 

	ARTICLE 1
	 	 	1	 
	 
	 	 	 	 
	INTERPRETATION
	 	 	1	 
	 
	 	 	 	 
	1.1 Definitions
	 	 	1	 
	1.2 Currency
	 	 	4	 
	1.3 Sections and Headings
	 	 	5	 
	1.4 Singular Terms
	 	 	5	 
	1.5 Schedules
	 	 	5	 
	 
	 	 	 	 
	ARTICLE 2
	 	 	6	 
	 
	 	 	 	 
	PATHEON’S MANUFACTURING SERVICES
	 	 	6	 
	 
	 	 	 	 
	2.1 Manufacturing Services
	 	 	6	 
	 
	 	 	 	 
	ARTICLE 3
	 	 	9	 
	 
	 	 	 	 
	CLIENT’S OBLIGATIONS
	 	 	9	 
	 
	 	 	 	 
	3.1 Payment
	 	 	9	 
	 
	 	 	 	 
	ARTICLE 4
	 	 	10	 
	 
	 	 	 	 
	CONVERSION FEES AND COMPONENT COSTS
	 	 	10	 
	 
	 	 	 	 
	4.1 First Year Pricing
	 	 	10	 
	4.2 Price Adjustments — Subsequent Years’ Pricing
	 	 	10	 
	4.3 Price Adjustments — Current Year Pricing
	 	 	11	 
	4.4 Adjustments Due to Technical Changes
	 	 	12	 
	4.5 Multi-Country Packaging Requirements.
	 	 	12	 
	 
	 	 	 	 
	ARTICLE 5
	 	 	13	 
	 
	 	 	 	 
	ORDERS, SHIPMENT, INVOICING, PAYMENT
	 	 	13	 
	 
	 	 	 	 
	5.1 Orders and Forecasts
	 	 	13	 
	5.2 Reliance by Patheon
	 	 	14	 
	5.3 Minimum Orders
	 	 	15	 
	5.4 Shipments
	 	 	15	 
	5.5 On Time Delivery
	 	 	15	 
	5.6 Invoices and Payment
	 	 	16	 
	 
	 	 	 	 
	ARTICLE 6
	 	 	16	 
	 
	 	 	 	 
	PRODUCT CLAIMS AND RECALLS
	 	 	16	 
	 
	 	 	 	 
	6.1 Product Claims
	 	 	16	 
	6.2 Product Recalls and Returns
	 	 	17	 

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	6.3
Patheon’s Responsibility for Defective and Recalled Products
	 	 	17	 
	6.4 Disposition of Defective or Recalled Products
	 	 	18	 
	6.5 Healthcare Provider or Patient Questions and Complaints
	 	 	18	 
	6.6 Sole Remedy
	 	 	18	 
	 
	 	 	 	 
	ARTICLE 7
	 	 	19	 
	 
	 	 	 	 
	CO-OPERATION
	 	 	19	 
	 
	 	 	 	 
	7.1 Quarterly Review
	 	 	19	 
	7.2 Governmental Agencies
	 	 	19	 
	7.3 Records and Accounting by Patheon
	 	 	19	 
	7.4 Inspection
	 	 	19	 
	7.5 Access
	 	 	19	 
	7.6
Notification of Regulatory Inspections
	 	 	20	 
	7.7 Reports
	 	 	20	 
	7.8 FDA Filings
	 	 	20	 
	 
	 	 	 	 
	ARTICLE 8
	 	 	21	 
	 
	 	 	 	 
	TERM AND TERMINATION
	 	 	21	 
	 
	 	 	 	 
	8.1 Initial Term
	 	 	21	 
	8.2 Termination for Cause
	 	 	21	 
	8.3 Product Discontinuation
	 	 	22	 
	8.4 Obligations on Termination
	 	 	22	 
	 
	 	 	 	 
	ARTICLE 9
	 	 	23	 
	 
	 	 	 	 
	REPRESENTATIONS, WARRANTIES AND COVENANTS
	 	 	23	 
	 
	 	 	 	 
	9.1 Authority
	 	 	23	 
	9.2 Client Warranties
	 	 	23	 
	9.3 Patheon Warranties
	 	 	24	 
	9.4 Debarred Persons
	 	 	25	 
	9.5 Permits
	 	 	25	 
	9.6 No Warranty
	 	 	25	 
	 
	 	 	 	 
	ARTICLE 10
	 	 	25	 
	 
	 	 	 	 
	REMEDIES AND INDEMNITIES
	 	 	25	 
	 
	 	 	 	 
	10.1 Consequential Damages
	 	 	25	 
	10.2 Limitation of Liability
	 	 	25	 
	10.3 Patheon
	 	 	26	 
	10.4 Client
	 	 	26	 
	10.5 Reasonable Allocation of Risk
	 	 	26	 

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	ARTICLE 11
	 	 	27	 
	 
	 	 	 	 
	CONFIDENTIALITY
	 	 	27	 
	 
	 	 	 	 
	11.1 Confidentiality
	 	 	27	 
	 
	 	 	 	 
	ARTICLE 12
	 	 	27	 
	 
	 	 	 	 
	DISPUTE RESOLUTION
	 	 	27	 
	 
	 	 	 	 
	12.1 Commercial Disputes
	 	 	27	 
	12.2 Technical Dispute Resolution
	 	 	27	 
	 
	 	 	 	 
	ARTICLE 13
	 	 	28	 
	 
	 	 	 	 
	MISCELLANEOUS
	 	 	28	 
	 
	 	 	 	 
	13.1 Inventions
	 	 	28	 
	13.2 Intellectual Property
	 	 	28	 
	13.3 Insurance
	 	 	28	 
	13.4 Independent Contractors
	 	 	29	 
	13.5 No Waiver
	 	 	29	 
	13.6 Assignment
	 	 	29	 
	13.7 Force Majeure
	 	 	29	 
	13.8 Additional Product
	 	 	30	 
	13.9 Notices
	 	 	30	 
	13.10 Severability
	 	 	31	 
	13.11 Entire Agreement
	 	 	31	 
	13.12 Other Terms
	 	 	31	 
	13.13 No Third Party Benefit or Right
	 	 	32	 
	13.14 Execution in Counterparts
	 	 	32	 
	13.15 Use of Client Name
	 	 	32	 
	13.16 Governing Law
	 	 	32	 

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MANUFACTURING SERVICES AGREEMENT 

          THIS MANUFACTURING SERVICES AGREEMENT (the “Agreement”) is made as of May 26, 2010 (the
“Effective Date”)

B E T W E E N:

PATHEON PHARMACEUTICALS INC.,

a corporation existing under the laws of the State of Delaware

(“ Patheon”),

- and -

WYTHE PHARMACEUTICALS, INC. D/B/A S2 THERAPEUTICS,

a corporation existing under the laws of Tennessee

(“ Client”).

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

ARTICLE 1

INTERPRETATION 

1.1 Definitions.

          The following terms will, unless the context otherwise requires, have the respective meanings
set out below and grammatical variations of these terms will have corresponding meanings:

“Active Materials”, “Active Pharmaceutical Ingredients” or “API” means the materials listed
on Schedule D;

“Active Materials Credit Value” means the value of the Active Materials for certain
purposes of this Agreement, as set forth on Schedule D;

“Affiliate” means:

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

 

 

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

For this definition, “control” means the ownership of shares carrying at least a majority of the
votes for the election of the directors of a corporation.

“Annual Report” means the annual report to the FDA prepared by Client regarding the Product as
described in Title 21 of the United States Code of Federal Regulations, Section 314.81(b)(2);

“Annual Product Review Report” means the annual product review report prepared by Patheon as
described in Title 21 of the United States Code of Federal Regulations, Section 211.180(e);

“Annual Volume” means the minimum volume of Product to be manufactured in any Year of this
Agreement as set forth in Schedule B;

“Applicable Laws” means the federal laws of the United States, and (i) for Patheon, the Laws of
State of Ohio, being the jurisdiction where the Manufacturing Site is located; and (ii) for Client
and the Products, the Laws of all jurisdictions where the Products are manufactured, distributed,
and marketed as these are agreed and understood by the parties in this Agreement;

“Authority” means any governmental or regulatory authority, department, body or agency or any
court, tribunal, bureau, commission or other similar body, whether federal, state, provincial,
county or municipal;

“Bill Back Items” means the expenses for all third party supplier fees for the purchase of columns,
standards, tooling, PAPR or PPE suits (where applicable), RFID tags and supporting equipment, and
other project specific items necessary for Patheon to perform the Manufacturing Services, and which
are not included as Components;

“Business Day” means a day other than a Saturday, Sunday or a day that is a statutory holiday in
the State of Ohio;

“cGMPs” means current good manufacturing practices as described in Parts 210 and 211 of Title 21 of
the United States’ Code of Federal Regulations together with the latest FDA guidance documents
pertaining to manufacturing and quality control practice, all as updated, amended and revised from
time to time;

“Client Intellectual Property” means Intellectual Property owned or licensed by Client before
entering into this Agreement, or generated or derived by Patheon while performing any Manufacturing
Services or otherwise generated or derived by Patheon in its business which Intellectual Property
is specific to, or dependent upon, Client’s Active Material or Product;

“Components” means, collectively, all packaging components, raw materials, and ingredients
(including labels, product inserts and other labelling for the Products), required to manufacture
the Products in accordance with the Specifications, other than the Active Materials;

“Confidentiality Agreement” means the agreement about the non-disclosure of confidential
information between Patheon, VeroScience LLC, Arisaph Pharmaceuticals, Inc., and Client dated
October 19, 2009;

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“Deficiency Notice” has the meaning specified in Section 6.1(a);

“Delivery Date” means the date scheduled for shipment of Product under a Firm Order as set
forth in Section 5.1(d);

“FDA” means the United States Food and Drug Administration;

“Firm Orders” has the meaning specified in Section 5.1(b);

“Intellectual Property” includes, without limitation, rights in patents, patent
applications, formulae, trade-marks, trade-mark applications, trade-names, Inventions,
copyrights, industrial designs, trade secrets, and know how;

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

“Inventory” means all inventories of Components and work-in-process produced or held by
Patheon for the manufacture of the Products but, for greater certainty, does not include
the Active Materials;

“Late Delivery” has the meaning specified in Section 5.5;

“Laws” means all laws, statutes, ordinances, regulations, rules, by-laws, judgments,
decrees or orders of any Authority;

“Manufacturing Services” means the manufacturing, quality control, quality assurance,
stability testing, packaging, and related services, set forth in this Agreement, required
to manufacture Product or Products from Active Materials and Components;

“Manufacturing Site” means the facility owned and operated by Patheon that is located at
2110 East Galbraith Road, Cincinnati, OH 45237-1625;

“Materials” means all Components, Bill Back Items, and other materials used to manufacture
the Product other than Active Materials;

“Maximum Credit Value” means the maximum value of Active Materials that may be credited by
Patheon under this Agreement, as set forth on Schedule D;

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

“Patheon Intellectual Property” means Intellectual Property generated or derived by Patheon
before performing any Manufacturing Services, Intellectual Property developed by Patheon
while performing the Manufacturing Services, or otherwise generated or derived by Patheon
in its business which Intellectual Property is not specific to, or dependent upon, Client’s
Active Material or Product including, without limitation, Inventions and Intellectual
Property which may apply to manufacturing processes or the formulation or development of
drug products, drug product dosage forms or drug delivery systems unrelated to the specific
requirements of the Product(s);

-3-

 

“Price” means the price measured in US Dollars to be charged by Patheon for performing the
Manufacturing Services, and includes the cost of Components, certain cost items as set
forth in Schedule B, and annual stability testing costs as set forth in Schedule C;

“Product(s)” means Cycloset® (bromocriptine mesylate) Tablets approved by FDA under NDA No.
20,866;

“Quality Agreement” means the agreement (the form of which is set forth in Schedule F)
between the parties setting out the quality assurance standards for the Manufacturing
Services to be performed by Patheon for Client;

“Regulatory Authority” means the FDA and any other foreign regulatory agencies competent to
grant marketing approvals for, and otherwise regulate, pharmaceutical products including
the Products in the Territory;

“RFID” means Radio Frequency Identification Devices which (at present or in the future) may
be affixed to Products or Materials to assist in inventory control, tracking, and
identification;

“Specifications” means the file, for each Product, which is given by Client to Patheon in
accordance with the procedures listed in Schedule A and which contains documents relating
to each Product, including, without limitation:

	 	(a)	 	specifications for Active Materials and Components;
	 
	 	(b)	 	manufacturing specifications, directions, and processes;
	 
	 	(c)	 	storage requirements;
	 
	 	(d)	 	all environmental, health and safety information for each the Product including
material safety data sheets; and
	 
	 	(e)	 	the finished Product specifications (“Finished Product Specifications”), packaging
specifications and shipping requirements for each Product;

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

“Technical Dispute” has the meaning specified in Section 12.2;

“Territory” means in the geographic area of the United States;

“Third Party Rights” means the Intellectual Property of any third party;

“Year” means in the first year of this Agreement the period from the Effective Date up to
and including December 31 of the same calendar year, and thereafter will mean a calendar
year.

1.2 Currency.

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

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1.3 Sections and Headings.

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

1.4 Singular Terms.

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

1.5 Schedules.

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

	 	 	 	 	 	 	 

	 

	 	Schedule A
	 	-
	 	Product List and Specifications
	 

	 	Schedule B
	 	-
	 	Minimum Run Quantity, Annual Volume, and Price 
	 

	 	Schedule C
	 	-
	 	
Annual Stability Testing
	 

	 	Schedule D
	 	-
	 	Active Materials, Active Materials Credit Value, and Maximum Credit
Value
	 

	 	Schedule E
	 	-
	 	Technical Dispute Resolution
	 

	 	Schedule F
	 	-
	 	Commercial Quality Agreement
	 

	 	Schedule G
	 	-
	 	(Reserved)
	 

	 	Schedule H
	 	-
	 	Quarterly Active Materials Inventory Report
	 

	 	Schedule I
	 	-
	 	Report of Annual Active Materials Inventory Reconciliation and
Calculation of Actual Annual Yield
	 

	 	Schedule J
	 	-
	 	(Reserved)

-5-

 

ARTICLE 2

PATHEON’S MANUFACTURING SERVICES 

2.1 Manufacturing Services.

          Patheon will perform the Manufacturing Services for the Territory for the fees specified in
Schedules B and C to manufacture Products for Client. Schedule B sets forth a list of cost items
that are included in the Price for Products; all cost items that are not included in this list are
excluded from the Price and are subject to additional fees to be paid by the Client. Patheon may
change the Manufacturing Site for the Products only with the prior written consent of Client, this
consent not to be unreasonably withheld. If Manufacturing Services have not started within [***]
months of the date of execution of this Agreement, Patheon may amend the fees set out in Schedules
B and C. Patheon will manufacture at least [***]% of the Products offered for sale by Client in the
Territory so long as Patheon is in material compliance with its obligations to Client under this
Agreement (including without limitation satisfying all orders placed by Client in accordance with
the provisions of this Agreement), the Quality Agreement and the Capital Expenditure and Equipment
Agreement and is fully in compliance with all Applicable Laws. In performing the Manufacturing
Services, Patheon and Client agree that:

	 	(a)	 	Conversion of Active Materials and Components. Patheon will convert Active
Materials and Components into Products.
	 
	 	(b)	 	Quality Control and Quality Assurance. Patheon will perform the quality
control and quality assurance testing specified in the Quality Agreement. Batch review and
release to Client will be the responsibility of Patheon’s quality assurance group. Patheon
will perform its batch review and release responsibilities in accordance with Patheon’s
standard operating procedures. Each time Patheon ships Products to Client, it will give
Client a certificate of analysis and certificate of compliance including a statement that
the batch has been manufactured and tested in accordance with Specifications, cGMPs, and
Applicable Laws. Client will have sole responsibility for the release of Products to the
market. The form and style of batch documents, including, but not limited to, batch
production records, lot packaging records, equipment set up control, operating parameters,
and data printouts, raw material data, and laboratory notebooks are the exclusive property
of Patheon. Specific Product related information contained in those batch documents is
Client property.
	 
	 	(c)	 	Components. Patheon will purchase and test all Components (with the exception
of those that are supplied by Client) at Patheon’s expense and as required by the
Specifications.
	 
	 	(d)	 	Stability Testing. Patheon will conduct stability testing on the Products in
accordance with the protocols set out in the Specifications, for the separate fees and during the
time periods each set out in Schedule C. Patheon will not make any changes to these testing
protocols without prior written approval from Client. If a confirmed stability test failure
occurs, Patheon will notify Client within [***], after which Patheon and Client will jointly
determine the proceedings and methods to be undertaken to investigate the cause of the failure,
including which party will bear the cost of the investigation. Patheon will not be liable for these
costs unless it has failed to perform the Manufacturing Services in

 

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

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	 	 	 	accordance with the Specifications, cGMPs, and Applicable Laws. Patheon will give
Client all stability test data and results at Client’s request.
	 
	 	(e)	 	Packaging. Patheon will package the Products as set out in the Specifications.
Client will be responsible for the cost of artwork development. Patheon will determine and
imprint the batch numbers and expiration dates for each Product shipped. The batch numbers
and expiration dates will be affixed on the Products and on the shipping carton of each
Product as outlined in the Specifications and as required by cGMPs. Client may, in its sole
discretion, make changes to labels, product inserts, and other packaging for the Products.
Those changes will be submitted by Client to all applicable governmental agencies and other
third parties responsible for the approval of the Products. Client will be responsible for
the cost of labelling obsolescence when changes occur, as contemplated in Section 4.4.
Patheon’s name will not appear on the label or anywhere else on the Products unless: (i)
required by any Laws; or (ii) Patheon consents in writing to the use of its name.
	 
	 	(f)	 	Active Materials and Client Supplied Components Importing. Except for the
manufacturing of commercial launch quantities of Product, Client will deliver the Active
Materials to the Manufacturing Site DDP (Incoterms 2000) at least [***] before the
scheduled production date in quantities sufficient for Patheon to manufacture the desired
quantities of Product and to ship Product on the Delivery Date. In the case of the
manufacturing of commercial launch quantities of Product, the time period will [***] prior
to the scheduled production date. If the Active Materials are not received [***] (as the
case may be) before the scheduled production date, Patheon may delay the shipment of
Product by the same number of days as the delay in receipt of the Active Materials. But if
Patheon is unable to manufacture Product to meet this new shipment date due to prior third
party production commitments, Patheon may delay the shipment until a later date as agreed
to by the parties. All shipments of Active Material will be accompanied by certificate(s)
of analysis from the Active Material manufacturer, confirming the identity and purity of
the Active Materials and its compliance with the Active Material specifications.
	 
	 	(g)	 	Bill Back Items. Bill Back Items will be charged to Client at Patheon’s cost
plus a [***] handling fee.
	 
	 	(h)	 	Product Rejection for Finished Product Specification Failure. Internal process
specifications will be defined and mutually agreed upon, to the extent the same differ from
the Specifications. If Patheon manufactures Product in accordance with the agreed upon
process specifications, the Specifications, cGMPs, Applicable Laws and the terms and
conditions of this Agreement, and a batch or portion of batch of Product does not meet the
Finished Product Specifications, Client will not reject the non-conforming Product solely
on account of such failure to meet the Finished Product Specifications.
	 
	 	(i)	 	Client will have the right, at any time, to contract with, and obtain regulatory
approval, for regulatory qualified back-up vendor. As reasonably requested by Client and at
Client’s cost, Patheon will provide technology transfer and assistance to enable Client’s
back-up Vendor to manufacture the Product for Client.

 

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

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	 	(j)	 	Patheon agrees that, so long as Patheon manufactures [***] of the Products offered for
sale by Client in the Territory, Patheon will not manufacture bromocriptine mesylate
products, regardless of dosage form, for any other third party without the express written
consent of Client.

2.2 Active Material Yield.

	 	(a)	 	Reporting. Patheon will give Client a quarterly inventory report of
the Active Materials held by Patheon using the inventory report form set out in
Schedule H, which will contain the following information for the quarter:
	 
	 	 	 	Quantity Received: The total quantity of Active Materials that complies with the
Specifications and is received at the Manufacturing Site during the applicable
period.
	 
	 	 	 	Quantity Dispensed: The total quantity of Active Materials dispensed at the
Manufacturing Site during the applicable period. The Quantity Dispensed is
calculated by adding the Quantity Received to the inventory of Active Materials
that complies with the Specifications held at the beginning of the applicable
period, less the inventory of Active Materials that complies with the
Specifications held at the end of the period. The Quantity Dispensed will only
include Active Materials received and dispensed in commercial manufacturing of
Products and, for certainty, will not include any (i) Active Materials that must be
retained by Patheon as samples, (ii) Active Materials contained in Product that
must be retained as samples, (iii) Active Materials used in testing (if
applicable), and (iv) Active Materials received or dispensed in technical transfer
activities or development activities during the applicable period, including
without limitation, any regulatory, stability, validation or test batches
manufactured during the applicable period.
	 
	 	 	 	Quantity Converted: The total amount of Active Materials contained in the Products
manufactured with the Quantity Dispensed (including any additional Products
produced in accordance with Section 6.1 or 6.2), delivered by Patheon, and not
rejected, recalled or returned in accordance with Section 6.1 or 6.2 because of
Patheon’s failure to perform the Manufacturing Services in accordance with
Specifications, cGMPs, and Applicable Laws.
	 
	 	 	 	Within [***] after the end of each Year, Patheon will prepare an annual
reconciliation of Active Materials on the reconciliation report form set forth in
Schedule I including the calculation of the “Actual Annual Yield” or “AAY” for the
Product at the Manufacturing Site during the Year. AAY is the percentage of the
Quantity Dispensed that was converted to Products and is calculated as follows:

	 	 	 	 

	Quantity Converted during the Year 
	   x	   100	%
	 
	 	 
	Quantity Dispensed during the Year
	 	 	 

	 	 	 	After Patheon has produced a minimum of [***] commercial production batches of Product and has
produced commercial production batches for at least [***] at the Manufacturing Site (collectively,
the “Target Yield Determination Batches”), the Parties will mutually agree on the target yield for
the Product at the Manufacturing Site (each, a

 

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

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	 	 	 	“Target Yield”); The Target Yield will be revised annually to reflect the actual
manufacturing experience as agreed to by the parties.
	 
	 	(b)	 	Shortfall Calculation. If the Actual Annual Yield falls more than five percent
below the respective Target Yield in a Year, then the shortfall for the Year (the
“Shortfall”) will be calculated as follows:
	 
	 	 	 	Shortfall = [(Target Yield – [***]%) – AAY] * Active Materials Credit Value *
Quantity Dispensed
	 
	 	(c)	 	Credit for Shortfall. If there is a Shortfall for a Product in a
Year, then Patheon will credit Client’s account for the amount of the Shortfall not
later than [***] after the end of the Year.
	 
	 	 	 	Each credit under this Section 2.2(c) will be summarized on the reconciliation
report form set forth in Schedule I. Upon expiration or termination of this
Agreement, any remaining credit owing under this Section 2.2 will be paid to
Client. The Annual Shortfall, if any, will be disclosed by Patheon on the
reconciliation report form.
	 
	 	(d)	 	Maximum Credit. Patheon’s liability for Active Materials calculated in
accordance with this Section 2.2 in a Year will not exceed, in the aggregate, the
Maximum Credit Value set forth in Schedule D.
	 
	 	(e)	 	Material Breach. It will be not be considered a material breach of this
Agreement by Patheon under Section 8.2(a) if the Actual Annual Yield is less than the
Target Yield; provided however that if any year, Patheon’s liability for Active Materials
would exceed the Maximum Credit Value, then Client may terminate this Agreement for
material breach under Section 8.2(a).

ARTICLE 3

CLIENT’S OBLIGATIONS

3.1 Payment.

Client will pay Patheon for performing the Manufacturing Services according to the Prices specified
in Schedules B and C. These prices may be subject to adjustment under other parts of this
Agreement. Client will also pay Patheon for any Bill Back Items.

3.2 Active Materials.

          Client will at its sole cost and expense, deliver the Active Materials to Patheon (in
accordance with Section 2.1(f)) sufficient for Patheon to manufacture the desired quantities of
Product and to ship Product on the Delivery Date. The Active Materials will be held by Patheon on
behalf of Client as set forth in this Agreement. Title to the Active Materials will at all times
remain the property of Client.

 

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

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Patheon shall store and handle the Active Materials in accordance with Specifications provided by
the Client. Patheon will store the Active Materials in accordance with cGMPs and industry standards
in a manner reasonably sufficient to prevent cross-contamination with Patheon’s other assets and
marked with the name of the manufacturer and a unique identification number. Within [***] of
opening the packaged Active Materials, Patheon shall notify Client in writing of any physical
damage, quantity discrepancies, or other defects of which Patheon becomes aware relating to the
Active Materials, and Patheon shall comply with Client’s instructions regarding the disposition of
any such defective Active Materials. Any Active Materials received by Patheon will only be used by
Patheon to perform the Manufacturing Services.

ARTICLE 4

CONVERSION FEES AND COMPONENT COSTS 

4.1 First Year Pricing.

          The tiered Price and annual stability Price for the Products for the first Year are listed in
Schedules B and C and are subject to the adjustments set forth in Sections 4.2 and 4.3.

4.2 Price Adjustments — Subsequent Years’ Pricing.

          After the first Year of the Agreement, Patheon may adjust the Price effective January
1st of each Year as follows:

	 	(a)	 	Manufacturing Costs. Patheon may adjust the Price for inflation, based upon the
preliminary number for any increase in the Producer Price Index pcu325412325412 for
Pharmaceutical Preparation Manufacturing (“PPI”) published by the United States Department
of Labor, Bureau of Labor Statistics in August of the preceding Year compared to the final
number for the same month of the Year prior to that, unless the parties otherwise agree in
writing. Notwithstanding the foregoing, Patheon’s right to adjust the Price pursuant to
this Section 4.2(a) shall apply only to labor and overhead expenses incorporated into the
Price, and no other elements of the Price (including without limitation the cost of
Components, which are addressed exclusively in Section 4.2(b)) may be adjusted pursuant to
this Section 4.2(a). On or about [***] of each Year, Patheon will give Client a statement
setting forth the calculation for the inflation adjustment to be applied in calculating the
Price for the next Year.
	 
	 	(b)	 	Component Costs. If Patheon incurs an increase in Component costs during the
Year, it may increase the Price for the next Year to pass through the additional Component
costs.On or about [***] of each Year, Patheon will give Client information about the
increase in Component costs which will be applied to the calculation of the Price for the
next Year to reasonably demonstrate that the Price increase is justified. Patheon will not
be required to give information to Client that is subject to obligations of confidentiality
between Patheon and its suppliers.
	 
	 	(c)	 	Pricing Basis. Client acknowledges that the Price in any Year is quoted based
upon the Minimum Run Quantity and the price tiers specified in Schedule B. The Price is
subject

 

			
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	 	 	 	to change if the specified Minimum Run Quantity changes or if the minimum Annual
Volume in the lowest tier is not ordered in a Year. For greater certainty, if
Patheon and Client agree that the Minimum Run Quantity will be reduced or the
minimum Annual Volume in the lowest tier will not be ordered in a Year whether as a
result of a decrease in estimated annual volume or otherwise and, as a result of
the reduction, Patheon demonstrates to Client that its costs to perform the
Manufacturing Services or to acquire the Materials for the Product will increase on
a per unit basis (including the amount of the increase), then Patheon may increase
the Price by an amount sufficient to absorb the documented increased costs. On or
about [***] of each Year, Patheon will give Client a statement setting forth the
information to be applied in calculating those cost increases for the next Year.
But Patheon will not be required to give information to Client that is subject to
obligations of confidentiality between Patheon and its suppliers, if, after good
faith efforts, Patheon is unable to obtain permission from suppliers to provide
supporting documents to Client where Client is willing to be bound by the same
obligations as Patheon with respect to confidentiality. The provisions of this
Section 4.2(c) constitute the sole and exclusive remedy of Patheon, and the sole
and exclusive liability of Client, with respect to any failure to meet the Annual
Volume.
	 
	 	(d)	 	Process Improvement Efforts. Patheon continually works to improve its
processes to eliminate waste, improve cost efficiencies, deliver product as promised and
adhere to strict quality standards. Patheon believes in the continuous improvement of its
performance, which led Patheon to create the Patheon Advantage program. Patheon Advantage
incorporates Lean6Sigma to identify opportunities and implement changes to maximize the
efficiency of Patheon’s processes. If any such improvement efforts result in quantifiable
reductions in costs in providing the Services contemplated under this Agreement Patheon
shall promptly notify Client of such reductions, and the Price hereunder shall be reduced
by [***]% of the cost reduction from and after the date of such notice.

             For all Price adjustments under this Section 4.2, Patheon will deliver to Client on or about
[***] of each Year a revised Schedule B to be effective for the next Year. No Price increases will
be made hereunder until [***].

4.3 Price Adjustments — Current Year Pricing.

             During any Year of this Agreement, the Prices set out in Schedule B will be adjusted as
follows:

	 	 	Extraordinary Increases in Component Costs. If, at any time, market conditions result in
Patheon’s cost of Components being materially greater than normal forecasted increases, then
Patheon will be entitled to an adjustment to the Price for any affected Product to compensate it
for the increased Component costs. Changes materially greater than normal forecasted increases
will have occurred if: (i) the cost of a Component increases by [***]% of the cost for that
Component upon which the most recent fee quote was based; or (ii) the aggregate cost for all
Components required to manufacture a Product increases by [***]% of the total Component costs for
the Product upon which the most recent fee quote was based. If Component costs have been previously
adjusted to reflect an increase in the cost of one or more Components, the

 

			
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	 	 	adjustments set out in (i) and (ii) above will operate based on the last cost adjustment
for the Components.
	 
	 	 	For a Price adjustment under this Section 4.3, Patheon will deliver to Client a revised
Schedule B and budgetary pricing information, adjusted Component costs or other documents
reasonably sufficient to demonstrate that a Price adjustment is justified. Patheon will
have no obligation to deliver any supporting documents that are subject to obligations of
confidentiality between Patheon and its suppliers, if, after good faith efforts, Patheon is
unable to obtain permission from suppliers to provide supporting documents to Client where
Client is willing to be bound by the same obligations as Patheon with respect to
confidentiality. The revised Price will be effective for any Product delivered on or after
the first day of the month following Client’s receipt of the revised Schedule B.

4.4 Adjustments Due to Technical Changes.

          Amendments to the Specifications or the Quality Agreement requested by Client will only be
implemented following a technical and cost review by Patheon and are subject to Client and Patheon
reaching agreement on Price changes required because of the amendment. Amendments to the
Specifications, the Quality Agreement, or the Manufacturing Site requested by Patheon will only be
implemented following the written approval of Client, the approval not to be unreasonably withheld.
If Client accepts a proposed Price change, the proposed change in the Specifications will be
implemented, and the Price change will become effective, only for those orders of Products that are
manufactured under the revised Specifications. In addition, Client agrees to purchase, at Patheon’s
cost (including all costs incurred by Patheon for the purchase and handling of the Inventory), all
Inventory used under the “old” Specifications and purchased or maintained by Patheon in order to
fill Firm Orders or under Section 5.2, if the Inventory can no longer be used under the revised
Specifications. Open purchase orders for Components no longer required under any revised
Specifications that were placed by Patheon with suppliers in order to fill Firm Orders or under
Section 5.2 will be cancelled where possible, and if the orders may not be cancelled without
penalty, will be assigned to and satisfied by Client.

4.5 Multi-Country Packaging Requirements.

          If Client decides to have Patheon perform Manufacturing Services for the Product for countries
outside the Territory, then Client will inform Patheon of the packaging requirements for each new
country and Patheon will prepare a quotation for consideration by Client of any additional
Component costs and the change over fees for the Product destined for each new country. The agreed
additional packaging requirements and related packaging costs and change over fees will be set out
in a written amendment to this Agreement.

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ARTICLE 5

ORDERS, SHIPMENT, INVOICING, PAYMENT 

5.1 Orders and Forecasts.

	 	(a)	 	Validation and Initial Launch Batches. To support Client’s commercial launch
requirements, Patheon will complete, release and deliver Product in accordance with Firm
Orders submitted by Client prior to the Effective Date (collectively referred to as the
“First Firm Order”), which First Firm Order includes the three validation batches of
Product produced for Client by Patheon in [***].
	 
	 	(b)	 	Rolling [***] Month Forecast. Prior to the date of this Agreement, Client has
given Patheon a non-binding [***] month forecast of the volume of Product that Client
expects to order on a monthly basis in the first [***] months of commercial manufacture of
the Product. This forecast will be updated by Client on or before the 10th day
of each month on a rolling forward basis. Client will update the forecast forthwith if it
determines that the volumes estimated in the most recent forecast have changed by more than
[***]%. The most recent [***] month forecast will prevail.
	 
	 	(c)	 	Cancellation of First Firm Order. Except with respect to the validation batches
of Product produced for Client in [***], Client may cancel any Batches from the First Firm
Order at no cost if notice of cancellation is received by Patheon [***] days or more before
the scheduled Delivery Date under the First Firm Order. Except with respect to the
validation batches of Product produced for Client in [***], Client may cancel any Batches
from the First Firm Order if notice of cancellation is received by Patheon more than [***]
days but fewer than [***] days before the scheduled Delivery Date under the First Firm
Order, but Client will pay Patheon $[***] for each cancelled batch. The parties agree that
this payment will be considered liquidated damages for Patheon’s loss of manufacturing
capacity due to the Client’s cancellation of manufacturing and will not be considered a
penalty. If the First Firm Order is changed or adjusted as described above then the initial
rolling [***] month forecast will also be adjusted as necessary.
	 
	 	(d)	 	Firm Orders Thereafter. On a rolling basis during the term of this Agreement,
on or before the 10th day of each month, Client will issue an updated [***] month forecast.
The first [***] months of that updated forecast after the current month will be binding and
will be confirmed by a firm written order in the form of a purchase order or otherwise
(“Firm Order”) by Client to purchase and, when accepted by Patheon, for Patheon to
manufacture and deliver the agreed quantity of the Products on the date(s) set forth in the
Firm Order (the “Delivery Date”). Firm Orders will be submitted to Patheon at least [***]
days prior to the Delivery Date and will specify Client’s Manufacturing Services purchase
order number, quantities by Product type, the Delivery Date and schedule, and any other
elements necessary to ensure the timely manufacture and shipment of the Products. The
quantities of Products ordered in a Firm Order will be firm and binding on Client and may
not be reduced by Client. But Client may adjust the Delivery Date by no more than [***]
months not more than [***] times per Year with written notice provided at least [***] days
prior to the scheduled Delivery Date.

 

			
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	 	(e)	 	[***] Year Forecast. On or before the 10th day of June of each
Year, Client will give Patheon a written non-binding [***]-year forecast, broken down by
quarters for the [***] and [***] years of the forecast, of the volume of each Product
Client then anticipates will be required to be manufactured and delivered to Client during
the [***]-year period.
	 
	 	(f)	 	Acceptance of Firm Order. Patheon will acknowledge its receipt of the Firm
Order and the Delivery Date for the Product ordered by sending a confirmation notice to
Client within ten Business Days of its receipt of the Firm Order. The Delivery Date may be
amended by agreement of the Parties or as set forth in Sections 2.1(f) or 5.1(d). Patheon
will accept all Firm Orders submitted by Client up to [***]% of the quantities specified in
the most recent forecast submitted by Client with respect to the applicable period.

5.2 Reliance by Patheon.

     (a) Client understands and acknowledges that Patheon will rely on the Firm Orders and rolling
forecasts submitted under Sections 5.1(a), (b), and (c) in ordering the Components required to meet
the Firm Orders. In addition, Client understands that to ensure an orderly supply of the
Components, Patheon may want to purchase the Components in sufficient volumes to meet the
production requirements for Products during part or all of the forecasted periods referred to in
Section 5.1(a) or to meet the production requirements of any longer period agreed to by Patheon and
Client. Accordingly, Client authorizes Patheon to purchase Components (excluding those Components
to be provided by Client as set forth herein) to satisfy the Manufacturing Services requirements
for Products for the first [***] months contemplated in the most recent forecast given by Client
under Section 5.1(a). Patheon may make other purchases of Components to meet Manufacturing Services
requirements for longer periods if agreed to in writing by the parties. The Client will give
Patheon written authorization to order Components for any launch quantities of Product requested by
Client which will be considered as part of the Firm Order when accepted by Patheon. If Components
ordered by Patheon under Firm Orders or this Section 5.2 are not included in finished Products
manufactured for Client within [***] months after the forecasted month for which the purchases have
been made (or for a longer period as the parties may agree) or if the Components have expired
during the period, then Client will pay to Patheon its costs therefor (including all costs incurred
by Patheon for the purchase and handling of the Components). But if these Components are used in
Products subsequently manufactured for Client or in third party products manufactured by Patheon,
Client will receive credit for any costs of those Components previously paid to Patheon by Client.

     (b) If Client fails to take possession or arrange for the destruction of Components within
[***] months of purchase or, in the case of finished Product, within [***] months of manufacture,
Client will pay Patheon $[***] per pallet, per month thereafter for storing the Components or
finished Product. Storage fees for Components or Product which contain controlled substances or
require refrigeration will be charged at $[***] per pallet per month. Storage fees are subject to
a one pallet minimum charge per month. Patheon may ship finished Product held by it longer than
[***] months to the Client at Client’s expense on [***] days written notice to the Client.

 

			
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5.3 Minimum Orders.

          Client may only order Manufacturing Services for batches of Products in multiples of the
Minimum Run Quantities as set out in Schedule B.

5.4 Shipments.

          Shipments of Products will be made EXW (INCOTERMS 2000) Patheon’s shipping point unless
otherwise mutually agreed. Risk of loss or of damage to Products will remain with Patheon until
Patheon loads the Products onto the carrier’s vehicle for shipment at the shipping point at which
time risk of loss or damage will transfer to Client. Patheon will, in accordance with Client’s
instructions and as agent for Client, (i) arrange for shipping to be paid by Client and (ii) at
Client’s risk and expense, obtain any export licence or other official authorization necessary to
export the Products. Client will arrange for insurance and will select the freight carrier used by
Patheon to ship Products and may monitor Patheon’s shipping and freight practices as they pertain
to this Agreement. Products will be transported in accordance with the Specifications.

5.5 On Time Delivery.

	(a)	 	Without limiting Client’s rights under this Section 5.5, Patheon and the Client understand that
there may be uncertainties and necessary adjustments in production schedules during the Initial
Manufacturing Period. The parties agree that they will work together closely to expedite deliveries
and manage the scheduling of the initial Product launch.
	 
	(b)	 	If, after the delivery and release of the Validation and Initial Launch Batches and the Initial
Manufacturing Period, Patheon is unable to deliver the quantity of Product ordered under a Firm
Order on the Delivery Date due to an act or omission by Patheon (a “Late Delivery”), Client will
receive a credit from Patheon for the Late Delivery that will be applied against the purchase price
under the next Firm Order. The credit will be [***]% of the Price of the quantities of Product not
delivered by Patheon under the Firm Order on the Delivery Date (i.e., Client Credit = [Quantity
Ordered in the Firm Order — Actual Delivery Quantities of Product] * Price * [***] %). Patheon
agrees that it will use all reasonable commercial efforts to meet delivery deadlines.
	 
	(c)	 	A Late Delivery will not be considered a material breach of this Agreement by Patheon for the
purposes of Section 8.2. If Patheon has [***] or more Late Deliveries in any calendar quarter, the
parties will meet as necessary to amicably resolve the reasons for the Late Deliveries. If the
parties are unable to resolve the matter within [***] days after the end of the applicable calendar
quarter or if the Late Deliveries continue in the next calendar quarter, Client may exercise its
right to terminate this Agreement for cause pursuant to Section 8.2(a), without a further
opportunity to cure.
	 
	(d)	 	For clarity, a Late Delivery will not include any delay in shipment of Product caused by events
outside of Patheon’s reasonable control, such as a Force Majeure Event, a delay in delivery of API
or Materials by Client, a delay in Product release approval from Client, inaccurate Client
forecasts, receipt of non-conforming API or Components supplied by Client, or any market driven
delays in deliveries from Client’s approved vendors.

 

			
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5.6 Invoices and Payment.

          Invoices will be sent by fax or email to the fax number or email address given by Client to
Patheon in writing. Invoices will be sent when the Product is manufactured and released by Patheon
to the Client. Patheon will also submit to Client, with each shipment of Products, a duplicate copy
of the invoice covering the shipment. Patheon will also give Client an invoice covering any
Inventory or Components not included in finished Products which are to be purchased by Client under
Section 5.2 of this Agreement. Each invoice will, to the extent applicable, identify Client’s
Manufacturing Services purchase order number, Product numbers, names and quantities, unit price,
freight charges, and the total amount to be paid by Client. Client will pay all invoices within 30
days of the date thereof. Interest on past due accounts will accrue at [***]% per month which is
equal to an annual rate of [***]%. The Late Delivery credits set forth in this Section 5 are only
available to Client if all outstanding undisputed invoices have been paid in full or are within
[***] days outstanding from the invoice date when the Late Delivery arose.

ARTICLE 6

PRODUCT CLAIMS AND RECALLS 

6.1 Product Claims.

     (a) Product Claims. Client has the right to reject any portion of any shipment of
Products that deviates from the Specifications, cGMPs, or Applicable Laws, or is otherwise not
compliant with FDA requirements, without invalidating any remainder of the shipment. Client will
inspect the Products manufactured by Patheon upon receipt and will give Patheon written notice (a
“Deficiency Notice”) of all claims for Products that deviate from the Specifications, cGMPs, or
Applicable Laws within [***] days after Client’s receipt thereof (or, in the case of any defects
not reasonably susceptible to discovery upon receipt of the Product, within [***] days after
discovery by Client, but not after the expiration date of the Product). Should Client fail to give
Patheon the Deficiency Notice within the applicable [***] day period, then the delivery will be
deemed to have been accepted by Client on the [***] day after delivery or discovery, as applicable.
Except as set out in Section 6.3, Patheon will have no liability for any deviations for which it
has not received notice within the applicable [***] day period.

     (b) Determination of Deficiency. Upon receipt of a Deficiency Notice, Patheon will
have ten days to advise Client by notice in writing that it disagrees with the contents of the
Deficiency Notice. If Client and Patheon fail to agree within ten days after Patheon’s notice to
Client as to whether any Products identified in the Deficiency Notice deviate from the
Specifications, cGMPs, or Applicable Laws, then the parties will mutually select an independent
laboratory to evaluate if the Products deviate from the Specifications, cGMPs, or Applicable Laws.
This evaluation will be binding on the parties. If the evaluation certifies that any Products
deviate from the Specifications, cGMPs, or Applicable Laws, Client may reject those Products in the
manner contemplated in this Section 6.1 and Patheon will be responsible for the cost of the
evaluation. If the evaluation does not so certify for any of the Products, then Client will be
deemed to have accepted delivery of the Products on the [***] day after delivery (or, in the case
of any defects not reasonably susceptible to discovery upon receipt of the Product, on the [***]
day after discovery thereof by Client, but not after the expiration date of the Product) and Client
will be responsible for the cost of the evaluation.

 

			
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     (c) Shortages. Claims for shortages in the amount of Products shipped by Patheon
will be dealt with by reasonable agreement of the parties.

6.2 Product Recalls and Returns.

     (a) Records and Notice. Patheon and Client will each maintain records necessary to permit a
Recall of any Products delivered to Client or customers of Client. Each party will promptly notify
the other by telephone (to be confirmed in writing) of any information which might affect the
marketability, safety or effectiveness of the Products or which might result in the Recall or
seizure of the Products. Upon receiving this notice or upon this discovery, each party will stop
making any further shipments of any Products in its possession or control until a decision has been
made whether a Recall or some other corrective action is necessary. The decision to initiate a
Recall or to take some other corrective action, if any, will be made and implemented by Client.
“Recall” will mean any action (i) by Client to recover title to or possession of quantities of the
Products sold or shipped to third parties (including, without limitation, the voluntary withdrawal
of Products from the market); or (ii) by any regulatory authorities to detain or destroy any of the
Products. Recall will also include any action by either Party to refrain from selling or shipping
quantities of the Products to third parties which would have been subject to a Recall if sold or
shipped.

     (b) Recalls. If (i) any governmental or regulatory authority issues a directive,
order or, following the issuance of a safety warning or alert about a Product, a written request
that any Product be Recalled, (ii) a court of competent jurisdiction orders a Recall, or (iii)
Client determines that any Product should be Recalled or that a “Dear Doctor” letter is required
relating the restrictions on the use of any Product, Patheon will co-operate as reasonably required
by Client, having regard to all applicable laws and regulations.

     (c) Product Returns. Client will have the responsibility for handling customer returns
of the Products. Patheon will give Client any assistance that Client may reasonably require to
handle the returns.

6.3 Patheon’s Responsibility for Defective and Recalled Products.

     (a) Defective Product. If Client rejects Products under Section 6.1 and the deviation
is determined to have arisen from Patheon’s failure to provide the Manufacturing Services in
accordance with the Specifications, cGMPs, and Applicable Laws, Patheon will credit Client’s
account for Patheon’s invoice price for the defective Products. If Client previously paid for the
defective Products, Patheon will promptly, at Client’s election, either: (i) refund the invoice
price for the defective Products; (ii) offset the amount paid against other amounts due to Patheon
hereunder; or (iii) replace the Products with conforming Products without Client being liable for
payment therefor under Section 3.1, contingent upon the receipt from Client of all Active Materials
required for the manufacture of the replacement Products. For greater certainty, Patheon’s
responsibility for any loss of Active Materials in defective Product will be captured and
calculated in the Active Materials Yield under Section 2.2, it being understood that in no event
shall the foregoing be construed to limit Patheon’s obligation to refund or offset the invoice
price, if requested by Client.

     (b) Recalled Product. If a Recall or return results from, or arises out of, a failure
by Patheon to perform the Manufacturing Services in accordance with the Specifications, cGMPs, and
Applicable Laws, Patheon will be responsible for the documented out-of-pocket expenses of the
Recall or return and will promptly, at Client’s election, either: (i) refund the invoice price for
the Recalled or returned Products; (ii) offset the amount paid against other amounts due to Patheon
hereunder; or (iii) replace the Recalled or returned Products with new Products, contingent upon
the receipt from Client of all Active Materials

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required for the manufacture of the replacement Products. For greater certainty, Patheon’s
responsibility for any loss of Active Materials in Recalled Product will be captured and calculated
in the Active Materials Yield under Section 2.2. In all other circumstances, Recalls, returns, or
other corrective actions will be made at Client’s cost and expense.

     (c) Except as set forth in Sections 6.3(a) and (b) above and in Section 10.3 below, Patheon
will not be liable to Client nor have any responsibility to Client for any deficiencies in, or
other liabilities associated with, any Product manufactured by it, (collectively, “Product
Claims”). For greater certainty, Patheon will have no obligation for any Product Claims to the
extent the Product Claim (i) is caused by deficiencies in the Specifications, the safety, efficacy,
or marketability of the Products or any distribution thereof, (ii) results from a defect in a
Component that is not reasonably discoverable by Patheon using the test methods set forth in the
Specifications, (iii) results from a defect in the Active Materials or Components supplied by
Client that is not reasonably discoverable by Patheon using the test methods set forth in the
Specifications, (iv) is caused by actions of third parties occurring after the Product is shipped
by Patheon under Section 5.4, (v) is due to packaging design or labelling defects or omissions for
which Patheon has no responsibility, (vi) is due to any unascertainable reason despite Patheon
having performed the Manufacturing Services in accordance with the Specifications, cGMP’s, and
Applicable Laws, or (vii) is due to any other breach by Client of its obligations under this
Agreement.

6.4 Disposition of Defective or Recalled Products.

          Client will not dispose of any damaged, defective, returned, or Recalled Products for which it
intends to assert a claim against Patheon without Patheon’s prior written authorization to do so.
Alternatively, Patheon may instruct Client to return the Products to Patheon. Patheon will bear the
cost of disposition for any damaged, defective, returned or Recalled Products for which it bears
responsibility under Section 6.3. In all other circumstances, Client will bear the cost of
disposition, including all applicable fees for Manufacturing Services, for any damaged, defective,
returned, or Recalled Products.

6.5 Healthcare Provider or Patient Questions and Complaints.

          Client will have the sole responsibility for responding to questions and complaints from its
customers. Questions or complaints received by Patheon from Client’s customers, healthcare
providers or patients will be promptly referred to Client. If the question or complaint received by
Patheon relates to an adverse drug experience (as defined in 21 C.F.R. §314.80(a)), Patheon shall
notify Client immediately within one Business Day. Patheon will co-operate as reasonably required
to allow Client to determine the cause of and resolve any questions and complaints. This assistance
will include follow-up investigations, including testing. In addition, Patheon will give Client
all mutually agreed upon information that will enable Client to respond properly to questions or
complaints about the Products as set forth in the Quality Agreement. Unless it is determined that
the cause of the complaint resulted from a failure by Patheon to perform the Manufacturing Services
in accordance with the Specifications, cGMPs, Applicable Laws, and the terms and conditions of this
Agreement, all costs incurred under this Section 6.5 will be borne by Client.

6.6 Sole Remedy.

          Except for the indemnity set forth in Section 10.3 and subject to the limitations set forth in
Sections 10.1 and 10.2, the remedies described in this Article 6 will be Client’s sole remedy for
any failure by Patheon to provide the Manufacturing Services in accordance with the Specifications,
cGMPs, and Applicable Laws.

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ARTICLE 7

CO-OPERATION 

7.1 Quarterly Review.

          Each party will forthwith upon execution of this Agreement appoint one of its employees to be
a relationship manager responsible for liaison between the parties. The relationship managers will
meet not less than quarterly, either in person or (at the option of Client) by video or conference
call, to review the current status of the business relationship and manage any issues that have
arisen.

7.2 Governmental Agencies.

          Subject to Sections 7.6 and 7.8, each party may communicate with any governmental agency,
including but not limited to governmental agencies responsible for granting regulatory approval for
the Products, regarding the Products if, in the opinion of that party’s counsel, the communication
is necessary to comply with the terms of this Agreement or the requirements of any law,
governmental order or regulation. Subject to Sections 7.6 and 7.8, Patheon will use commercially
reasonable efforts to notify and consult with Client before Patheon communicates with any such
governmental agency, unless legally prohibited from doing so. Unless, in the reasonable opinion of
its counsel, there is a legal prohibition against doing so, a party will permit the other party to
accompany and take part in any meetings or communications with the agency with respect to Product,
and to receive copies of all communications from the agency.

7.3 Records and Accounting by Patheon.

          Patheon will keep records of the manufacture, testing, and shipping of the Products, and
retain samples of the Products as are necessary to comply with Applicable Laws or for longer
periods as agreed upon by the Parties, as well as to assist with resolving Product complaints and
other similar investigations. Copies of the records and samples will be retained for a period of
one year following the date of Product expiry, or longer if required by Applicable Laws or
otherwise agreed upon by the Parties, at which time Client will be contacted concerning the
delivery and destruction of the documents and/or samples of Products. Client is responsible for
retaining samples of the Products necessary to comply with the legal/regulatory requirements
applicable to Client.

          Patheon will provide Client with relevant documentation relating to registration and
validation batches, and any other information related thereto as may be reasonably requested by
Client.

7.4 Inspection.

          Client may inspect Patheon reports and records relating to this Agreement during normal
business hours and with reasonable advance notice, but a Patheon representative must be present
during the inspection.

7.5 Access.

          Patheon will give Client reasonable access at mutually agreeable times to the areas of the
Manufacturing Site in which the Products are manufactured, stored, handled, or shipped to permit
Client to verify that the Manufacturing Services are being performed in accordance with the
Specifications, cGMPs, Applicable Laws and the terms and conditions of this Agreement. But, with
the

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exception of “for-cause” audits, Client will be limited each Year to one cGMP-type audit, lasting
no more than two days, and involving no more than two auditors. Client may request additional
cGMP-type audits, additional audit days, or the participation of additional auditors subject to
payment to Patheon of a fee of $[***] for each additional audit day and $[***] per audit day for
each additional auditor. The right of access set forth in this Section 7.5 will not include a right
to access or inspect Patheon’s financial records.

	7.6	 	Notification of Regulatory Inspections, Product Seizures, and Other Governmental Actions or
Requests.

          Patheon will notify Client as soon as practically possible, but no later than [***] after
receiving any notice of, or the commencement of, any governmental agency inspection specifically
relating to the Product, any seizure of the Product, or any other governmental action or
communication specifically relating to the Product or that could affect Patheon’s ability to
provide Manufacturing Services under this Agreement or Client’s ability to market, distribute or
sell the Product, including but not limited to the receipt of any Establishment Inspection Report
(EIR), Form FDA 483, correspondence relating to follow-up action to an inspection or warning letter
or any other significant regulatory action or communication that could affect the regulatory status
of the Products. Patheon will provide to the Client a complete copy of all relevant written
materials regarding any governmental agency notice, action, or communication specifically relating
to the Product or that could affect Patheon’s ability to perform the Manufacturing Services under
this Agreement or Client’s ability to market, distribute or sell the Product. Some information may
be redacted in cases in which Patheon is required by obligations of confidentiality to third
parties to delete other company or product names or processes. The Client has the right to advise
Patheon and to participate in any Patheon response to a regulatory communication insofar as it
specifically relates to the Product. The Client’s prior consent is required before Patheon responds
to any regulatory communication that is specifically related to the Product or that may impact
Patheon’s ability to perform the Manufacturing Services under this Agreement.

7.7 Reports.

          Patheon will supply on an annual basis all Product data in its control, including release test
results, complaint test results, and all investigations (in manufacturing, testing, and storage),
that Client reasonably requires in order to complete any filing under any applicable regulatory
regime, including any Annual Report that Client is required to file with the FDA. At the Client’s
request, Patheon will provide a copy of the Annual Product Review Report to the Client at no
additional cost. Any additional report requested by Client beyond the scope of cGMPs and customary
FDA requirements will be subject to an additional fee to be agreed upon between Patheon and the
Client.

7.8 FDA Filings.

     (a) Regulatory Authority. Client will have the sole responsibility for filing all
documents with all Regulatory Authorities and taking any other actions that may be required for the
receipt and/or maintenance of Regulatory Authority approval for the commercial manufacture of the
Products. Patheon will assist Client, to the extent consistent with Patheon’s obligations under
this Agreement or as may reasonably be required, to obtain and maintain Regulatory Authority
approval for the commercial manufacture of all Products as quickly as reasonably possible.

     (b) Verification of Data. At least [***] days prior to filing any documents with any
Regulatory Authority that incorporate data generated by Patheon, Client will give Patheon a copy of
the documents incorporating this data to give Patheon the opportunity to verify the accuracy and
regulatory validity of those documents as they relate to Patheon generated data.

 

			
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     (c) Verification of CMC. At least [***] days prior to filing with any Regulatory
Authority any documentation which is or is equivalent to the FDA’s Chemistry and Manufacturing
Controls (“CMC”) related to any Marketing Authorization, such as a New Drug Application or
Abbreviated New Drug Application, Client will give Patheon a copy of the CMC as well as all
supporting documents which have been relied upon to prepare the CMC. This disclosure will permit
Patheon to verify that the CMC accurately describes the work that Patheon has performed and the
manufacturing processes that Patheon will perform under this Agreement. Client will give Patheon
copies of all FDA filings at the time of submission which contain CMC information regarding the
Product.

     (d) Deficiencies. If, in Patheon’s sole discretion, acting reasonably, Patheon
determines that any of the information given by Client under clauses (b) and (c) above is
inaccurate or deficient in any manner whatsoever (the “Deficiencies”), Patheon will notify Client
in writing of the Deficiencies within [***] Business Days of Patheon becoming aware of the
Deficiencies. The parties will work together to have the Deficiencies resolved prior to any
pre-approval inspection.

     (e) Client Responsibility. For clarity, the parties agree that in reviewing the
documents referred to in clause (b) above, Patheon’s role will be limited to verifying the accuracy
of the description of the work undertaken or to be undertaken by Patheon. Subject to the foregoing,
Patheon will not assume any responsibility for the accuracy of any application for receipt of an
approval by a regulatory authority. The Client is solely responsibility for the preparation and
filing of the application for approval by the regulatory authorities and any relevant costs will be
borne by the Client.

     (f) Inspection by Regulatory Authorities. If Client does not give Patheon the
documents requested under clause (b) above within the time specified and if Patheon reasonably
believes that Patheon’s standing with a regulatory authority may be jeopardized, Patheon may, in
its sole discretion, delay or postpone any inspection by the regulatory authority until Patheon has
reviewed the requested documents and is satisfied with their contents.

ARTICLE 8

TERM AND TERMINATION

8.1 Initial Term.

          This Agreement will become effective as of the Effective Date and will continue until December
31, 2016 (the “Initial Term”), unless terminated earlier by one of the parties in accordance
herewith. This Agreement will automatically continue after the Initial Term for successive terms of
two years each unless either party gives written notice to the other party of its intention to
terminate this Agreement at least 18 months prior to the end of the then current term.

8.2 Termination for Cause.

          (a) Either party at its sole option may terminate this Agreement upon written notice where the
other party has failed to remedy a material breach of any of its representations, warranties, or
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obligations under this Agreement within 60 days following receipt of a written notice (the
“Remediation Period”) of the breach that expressly states that it is a notice under this Section
8.2(a) (a “Breach Notice”). The aggrieved party’s right to terminate this Agreement under this
Section 8.2(a) may only be exercised for a period of 60 days following the expiry of the
Remediation Period (where the breach has not been remedied) and if the termination right is not
exercised during this period then the aggrieved party will be deemed to have waived the breach of
the representation, warranty, or obligation described in the Breach Notice.

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

     (c) Client may terminate this Agreement as to any Product upon 30 days’ prior written notice
if any Authority takes any action, or raises any objection, that prevents Client from importing,
exporting, purchasing, or selling the Product. But if this occurs, Client will still fulfill all
of its obligations under Section 8.4 below.

     (d) If Patheon terminates this Agreement under this Section 8.2, Patheon will give Client
reasonably sufficient time to contract with a third party manufacturer and to obtain approval from
the relevant regulatory agency for the third party manufacturer to manufacture the Product.

8.3 Product Discontinuation.

          Client will give at least [***] months’ advance notice if it intends to no longer order
Manufacturing Services for a Product due to this Product’s discontinuance in the market.

8.4 Obligations on Termination.

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

	 	(a)	 	Client will take delivery of and pay for all undelivered Products that are
manufactured and/or packaged under a Firm Order and comply with their Specifications,
at the price in effect at the time the Firm Order was placed;
	 
	 	(b)	 	Client will purchase, at Patheon’s cost (including all costs incurred by
Patheon for the purchase and handling of the Inventory), the Inventory applicable to
the Products which was purchased, produced or maintained by Patheon in contemplation
of filling Firm Orders or in accordance with Section 5.2 prior to notice of
termination being given, provided that such Inventory complies with and is maintained
in accordance with its Specifications;
	 
	 	(c)	 	Client will satisfy the purchase price payable under Patheon’s orders with
suppliers of Components, if the orders were made by Patheon in reliance on Firm Orders
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	 	 	 	accordance with Section 5.2, and the Components comply with and are maintained in
accordance with their specifications;
	 
	 	(d)	 	Patheon will return to Client or Client’s designee, as noted by Client in
writing, all unused Active Materials (with shipping and related expenses, if any, to
be borne by Client); and
	 
	 	(e)	 	Client acknowledges that no competitor of Patheon will be permitted access to
the Manufacturing Site.
	 
	 	(f)	 	Client will make commercially reasonable efforts, at its own expense, to remove
from Patheon site(s), within [***] Business Days, all of Client’s Components, Inventory
and Materials (whether current or obsolete), supplies, undelivered Product, chattels,
equipment or other moveable property owned by Client, related to the Agreement and
located at a Patheon site or that is otherwise under Patheon’s care and control
(“Client Property”). If Client fails to remove the Client Property within [***]
Business Days following the completion, termination, or expiration of the Agreement
Client will pay Patheon $[***] per pallet, per month, one pallet minimum ($[***] per
pallet, per month, one pallet minimum, for any of the Client Property that contains
controlled substances or requires refrigeration) thereafter for storing the Client
Property and will assume any third party storage charges invoiced to Patheon regarding
the Client Property. Patheon will invoice Client for the storage charges as set forth
in Section 5.6 of this Agreement.

Any termination or expiration of this Agreement will not affect any outstanding obligations or
payments due hereunder prior to the termination or expiration, nor will it prejudice any other
remedies that the parties may have under this Agreement. For greater certainty, termination of
this Agreement for any reason will not affect the obligations and responsibilities of the parties
under Articles 10 and 11 and Sections 5.4, 5.6, 8.4, 13.1, 13.2, 13.3, and 13.15, all of which
survive any termination.

ARTICLE 9

REPRESENTATIONS, WARRANTIES AND COVENANTS 

9.1 Authority.

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

9.2 Client Warranties.

          Client covenants, represents, and warrants that:

     (a) Non-Infringement.

	 	(i)	 	Client may lawfully disclose the Specifications to Patheon;

 

			
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	 	(ii)	 	any Client Intellectual Property, (excluding Client Intellectual
Property arising under Section 13.1(b)) used by Patheon in performing the Manufacturing
Services according to the Specifications (A) is Client’s or its Affiliate’s or
licensors’ property, and (B) may be lawfully used as directed by Client;, and (C) does
not infringe and will not infringe any Third party Rights.
	 
	 	(iii)	 	the Client Intellectual Property is sufficient to enable the
performance of the Manufacturing Services by Patheon for any Product under this
Agreement or the use or other disposition of any Product by Patheon as may be
required to perform its obligations under this Agreement and does not infringe and
will not infringe any Third Party Rights;
	 
	 	(iv)	 	To the knowledge of Client there are no actions or other legal
proceedings, concerning the infringement of Third Party Rights related to any of
the Specifications, or any of the Active Materials and the Components, or the
sale, use, or other disposition of any Product made in accordance with the
Specifications;

	 	(b)	 	Quality and Compliance.

	 	(i)	 	the Specifications for all Products conform to all applicable cGMPs and
Applicable Laws;
	 
	 	(ii)	 	the Products, if labelled and manufactured in accordance with the
Specifications and in compliance with applicable cGMPs and Applicable Laws (i) may be
lawfully sold and distributed in every jurisdiction in which Client markets the
Products, and (ii) will be fit for the purpose intended;
	 
	 	(iii)	 	on the date of shipment, the API will conform to the specifications for
the API that Client has given to Patheon and that the API will be adequately contained,
packaged, and labelled and will conform to the affirmations of fact on the container.

9.3 Patheon Warranties.

	 	 	 	Patheon covenants, represents, and warrants that:
	 
	 	(a)	 	it will perform the Manufacturing Services in accordance with the Specifications,
cGMPs, and Applicable Laws;
	 
	 	(b)	 	any Patheon Intellectual Property used by Patheon to perform the Manufacturing Services
(i) is Patheon’s or its Affiliate’s unencumbered property, and (ii) may be lawfully used by
Patheon; and
	 
	 	(c)	 	subject to the warranties of Client in Section 9.2, the performance by Patheon of the
Manufacturing Services does not infringe and will not infringe any Third Party Rights.

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9.4 Debarred Persons.

          Patheon covenants that it will not in the performance of its obligations under this Agreement
use the services of any person debarred or suspended under 21 U.S.C. §335(a) or (b). Patheon
represents that it does not currently have, and covenants that it will not hire, as an officer or
an employee any person who has been debarred or who has engaged in any acts that may result in
debarment under the Federal Food, Drug, and Cosmetic Act (United States).

9.5 Permits.

          Client will be solely responsible for obtaining or maintaining, on a timely basis, any permits
or other regulatory approvals for the Products or the Specifications, including, without
limitation, all marketing and post-marketing approvals.

          Patheon will maintain at all relevant times all governmental permits, licenses, approval, and
authorities required to enable it to lawfully and properly perform the Manufacturing Services.

9.6 No Warranty.

          PATHEON MAKES NO WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, BY FACT OR LAW, OTHER THAN
THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT. PATHEON MAKES NO WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE OR WARRANTY OF MERCHANTABILITY FOR THE PRODUCTS.

ARTICLE 10

REMEDIES
AND INDEMNITIES 

10.1 Consequential Damages.

          Under no circumstances whatsoever will either party be liable to the other in contract, tort,
negligence, breach of statutory duty, or otherwise for (i) any (direct or indirect) loss of
profits, of production, of anticipated savings, of business, or goodwill or (ii) for any other
liability, damage, costs, or expense of any kind incurred by the other party of an indirect or
consequential nature, regardless of any notice of the possibility of these damages, except with
respect to a party’s breach of the Confidentiality Agreement or misappropriation or infringement of
the other party’s Intellectual Property, or claims for which a party is entitled to indemnity
pursuant to this Agreement.

10.2 Limitation of Liability.

     (a) Active Materials. Except as expressly set forth in Section 2.2, under no
circumstances will Patheon be financially responsible to Client for any loss or damage to the
Active Materials. Patheon’s maximum financial responsibility to Client for any loss or damage to
the Active Materials will not exceed the Maximum Credit Value set forth in Schedule D.

     (b) Maximum Liability. Patheon’s maximum liability to Client under this Agreement for
any reason whatsoever, including, without limitation, any liability arising under Article 6 or
resulting from any and all breaches of its representations, warranties, or any other obligations
under this Agreement (but excluding Patheon’s indemnity obligations under Section 10.3 or claims
based on a breach of the

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Confidentiality Agreement or misappropriation or infringement of the Client’s Intellectual
Property) will not exceed the greater of $[***] or [***]% of revenues up to a maximum amount of
$[***] in the aggregate.

10.3 Patheon.

          Patheon agrees to defend, indemnify, and hold Client, its officers, employees, and agents
harmless against any and all losses, damages, costs, claims, demands, judgments and liability to,
from and in favour of third parties (other than Affiliates) resulting from, or relating to any
claim of personal injury or property damage to the extent that the injury or damage is the result
of a failure by Patheon to perform the Manufacturing Services in accordance with the
Specifications, cGMPs, and Applicable Laws except to the extent that the losses, damages, costs,
claims, demands, judgments, and liability are due to the negligence or wrongful act(s) of Client,
its officers, employees, agents, or Affiliates.

          If a claim occurs, Client will: (a) promptly notify Patheon of the claim; (b) use commercially
reasonable efforts to mitigate the effects of the claim; (c) reasonably cooperate with Patheon in
the defense of the claim; and (d) permit Patheon to control the defense and settlement of the
claim, all at Patheon’s cost and expense.

10.4 Client.

          Client agrees to defend, indemnify, and hold Patheon, its officers, employees, and agents
harmless against any and all losses, damages, costs, claims, demands, judgments and liability to,
from and in favour of third parties (other than Affiliates) resulting from, or relating to any
claim of infringement or alleged infringement of any Third Party Rights in the Products, or any
portion thereof, or any claim of personal injury or property damage to the extent that the injury
or damage is the result of a breach of this Agreement by Client, including, without limitation, any
representation or warranty contained herein, except to the extent that the losses, damages, costs,
claims, demands, judgments, and liability are due to the negligence or wrongful act(s) of Patheon,
its officers, employees, or agents.

          If a claim occurs, Patheon will: (a) promptly notify Client of the claim; (b) use commercially
reasonable efforts to mitigate the effects of the claim; (c) reasonably cooperate with Client in
the defense of the claim; and (d) permit Client to control the defense and settlement of the claim,
all at Client’s cost and expense.

10.5 Reasonable Allocation of Risk.

          This Agreement (including, without limitation, this Article 10) is reasonable and creates a
reasonable allocation of risk for the relative profits the parties each expect to derive from the
Products. Patheon assumes only a limited degree of risk arising from the manufacture, distribution,
and use of the Products because Client has developed and holds the marketing approval for the
Products, Client requires Patheon to manufacture and label the Products strictly in accordance with
the Specifications, and Client, not Patheon, is best positioned to inform and advise potential
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ARTICLE 11

CONFIDENTIALITY

11.1 Confidentiality.

          The Confidentiality Agreement will apply to all confidential information disclosed by the
parties under this Agreement. If the Confidentiality Agreement expires or is terminated prior to
the expiration or termination of this Agreement, the terms of the Confidentiality Agreement will
continue to govern the parties’ obligations of confidentiality for any confidential or proprietary
information disclosed by the parties hereunder, for the term of this Agreement, as though the
Confidentiality Agreement remained in full force and effect.

ARTICLE 12

DISPUTE RESOLUTION 

12.1 Commercial Disputes.

          If any dispute arises out of this Agreement (other than a dispute under Section 6.1(b) or a
Technical Dispute, as defined herein), the parties will first try to resolve it amicably. In that
regard, any party may send a notice of dispute to the other, and each party will appoint, within
ten Business Days from receipt of the notice of dispute, a single representative having full power
and authority to solve the dispute. The representatives will meet as necessary in order to resolve
the dispute. If the representatives fail to resolve the matter within one month from their
appointment, or if a party fails to appoint a representative within the ten Business Day period set
forth above, the dispute will immediately be referred to the Chief Operating Officer (or another
officer as he/she may designate) of each party who will meet and discuss as necessary to try to
resolve the dispute amicably. Should the parties fail to reach a resolution under this Section
12.1, the dispute will be referred to arbitration in accordance with Section 13.17.

12.2 Technical Dispute Resolution.

          If a dispute arises (other than disputes under Sections 6.1(b) or 12.1) between the parties
that is exclusively related to technical aspects of the manufacturing, packaging, labelling,
quality control testing, handling, storage, or other activities under this Agreement (a “Technical
Dispute”), the parties will make all reasonable efforts to resolve the dispute by amicable
negotiations. In that regard, senior representatives of each party will, as soon as practicable and
in any event no later than [***] Business Days after a written request from either party to the
other, meet in good faith to resolve any Technical Dispute. If, despite this meeting, the parties
are unable to resolve a Technical Dispute within a reasonable time, and in any event within [***]
Business Days of the written request, the Technical Dispute will, at the request of either party,
be referred for determination to an expert in accordance with Schedule E. If the parties cannot
agree that a dispute is a Technical Dispute, Section 12.1 will prevail. For greater certainty, the
parties agree that the release of the Products for sale or distribution under the applicable
marketing approval for the Products will not by itself indicate compliance by Patheon with its
obligations for the Manufacturing Services and further that nothing in this Agreement (including
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remove or limit the authority of the relevant qualified person (as specified by the Quality
Agreement) to determine whether the Products are to be released for sale or distribution.

ARTICLE 13

MISCELLANEOUS

13.1 Inventions.

     (a) For the term of this Agreement, Client hereby grants to Patheon a non-exclusive, paid-up,
royalty-free, non-transferable license of Client’s Intellectual Property which Patheon must use in
order to perform the Manufacturing Services.

     (b) All Intellectual Property generated or derived by Patheon while performing the
Manufacturing Services, to the extent it is specific to the development, manufacture, use, and sale
of Client’s Product that is the subject of the Manufacturing Services, will be the exclusive
property of Client or its licensors. Patheon hereby assigns to Client all right, title and interest
of Patheon in and to all Client Intellectual Property generated or derived by Patheon while
performing the Manufacturing Services.

     (c) All Patheon Intellectual Property will be the exclusive property of Patheon. Patheon
hereby grants to Client a perpetual, irrevocable, non-exclusive, paid-up, royalty-free,
transferable license to use the Patheon Intellectual Property used by Patheon to perform the
Manufacturing Services to enable Client to manufacture the Product(s).

     (d) Each party will be solely responsible for the costs of filing, prosecution, and
maintenance of patents and patent applications on its own Inventions.

     (e) Either party will give the other party written notice, as promptly as practicable, of all
Inventions which can reasonably be deemed to constitute improvements or other modifications of the
Products or processes or technology owned or otherwise controlled by the party.

13.2 Intellectual Property.

          Subject to Section 13.1, all Client Intellectual Property will be owned by Client and all
Patheon Intellectual Property will be owned by Patheon. Neither party has, nor will it acquire, any
interest in any of the other party’s Intellectual Property unless otherwise expressly agreed to in
writing. Neither party will use any Intellectual Property of the other party, except as
specifically authorized by the other party or as required for the performance of its obligations
under this Agreement.

13.3 Insurance.

          Each party will maintain commercial general liability insurance, including blanket contractual
liability insurance covering the obligations of that party under this Agreement through the term of
this Agreement and for a period of three years thereafter. This insurance will have policy limits
of not less than (i) $5,000,000 for each occurrence for personal injury or property damage liability;
and (ii) $5,000,000 in the aggregate per annum for product and completed operations liability. If
requested each party will give the other a certificate of insurance evidencing the above and
showing the name of the issuing company, the policy number, the effective date, the expiration
date, and the limits of liability. The insurance certificate

 

			

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will further provide for a minimum of [***] days’ written notice to the insured of a cancellation
of, or material change in, the insurance. If a party is unable to maintain the insurance policies
required under this Agreement through no fault of its own, then the party will forthwith notify the
other party in writing and the parties will in good faith negotiate appropriate amendments to the
insurance provision of this Agreement in order to provide adequate assurances.

13.4 Independent Contractors.

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

13.5 No Waiver.

     Either party’s failure to require the other party to comply with any provision of this
Agreement will not be deemed a waiver of the provision or any other provision of this Agreement,
with the exception of Sections 6.1 and 8.2.

13.6 Assignment.

	 	(a)	 	Patheon may not assign this Agreement or any of its rights or obligations hereunder
without the written consent of Client, this consent not to be unreasonably withheld. But
Patheon may arrange for subcontractors to perform specific testing services arising
under this Agreement without the consent of Client.
	 
	 	(b)	 	Client may assign this Agreement or any of its rights or obligations hereunder without
approval from Patheon. But Client will give Patheon prior written notice of any
assignment, any assignee will covenant in writing with Patheon to be bound by the terms of
this Agreement. Any partial assignment will be subject to Patheon’s cost review of the
assigned Products and Patheon may terminate this Agreement or any assigned part thereof, on
12 months’ prior written notice to Client and the assignee if good faith discussions do not
lead to agreement on amended Manufacturing Service fees within a reasonable time.
	 
	 	(c)	 	Despite the foregoing provisions of this Section 13.6, either party may assign this
Agreement to any of its Affiliates or to a successor to or purchaser of all or
substantially all of its business, but the assignee must execute an agreement with the
non-assigning party whereby it agrees to be bound hereunder.

13.7 Force Majeure.

          Neither party will be liable for the failure to perform its obligations under this Agreement
if the failure is caused by an event beyond that party’s reasonable control, including, but not
limited to, strikes or other labor disturbances, lockouts, riots, quarantines, communicable disease
outbreaks, wars, acts of terrorism, fires, floods, storms, interruption of or delay in
transportation, defective equipment, lack of or inability to obtain fuel, power or components, or
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government entity acting within colour of right (a “Force Majeure Event”). A party claiming a
right to excused performance under this Section 13.7 will immediately notify the other party in
writing of the extent of its inability to perform, which notice will specify the event beyond its
reasonable control that prevents the performance. Neither party will be entitled to rely on a Force
Majeure Event to relieve it from an obligation to pay money (including any interest for delayed
payment) which would otherwise be due and payable under this Agreement.

13.8 Additional Product.

          Additional products may be added to this Agreement and the additional products will be
governed by the general conditions hereof with any special terms (including, without limitation,
price) governed by amendments to Schedules A, B, and C as applicable.

13.9 Notices.

          Any notice, approval, instruction or other written communication required or permitted
hereunder will be sufficient if made or given to the other party by personal delivery, by telecopy,
facsimile communication, or confirmed receipt email or by sending the same by first class mail,
postage prepaid to the respective addresses, telecopy or facsimile numbers or electronic mail
addresses set forth below:

If to Client:

Charles B. Sutphin

S2 Therapeutics, Inc.

302 Rosedale Lane

Bristol, TN 37620

Telecopier No.: 276-928-1220

Email address: pat.sutphin@niftus.net

With a copy to:

Hogan Lovells US LLP

Park Place II

7930 Jones Branch Drive, Ninth Floor

McLean, VA 22102

Attention: Cullen Taylor

Telecopier No.: 703-610-6200

E-mail address: cullen.taylor@hoganlovells.com

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If to Patheon:

Patheon Pharmaceuticals Inc.

2110 East Galbraith Road

Cincinnati, OH 45237-1625

Attention: Director of Legal Services

Telecopier No.: 513-948-6927

Email address: [Frank.McCune@patheon.com]

With a copy to:

Patheon Inc.

4721 Emperor Boulevard

Research Triangle Park,

NC 27703

Attention: General Counsel

Telecopier No.: 919-474-2269

Email address: [Doaa.Fathallah@patheon.com]

or to any other addresses, telecopy or facsimile numbers or electronic mail addresses given to the
other party in accordance with the terms of this Section 13.9. Notices or written communications
made or given by personal delivery, telecopy, facsimile, or electronic mail will be deemed to have
been sufficiently made or given when sent (receipt acknowledged), or if mailed, five days after
being deposited in the United States, Canada, or European Union mail, postage prepaid or upon
receipt, whichever is sooner.

13.10 Severability.

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

13.11 Entire Agreement.

          This Agreement, together with the Quality Agreement and the Confidentiality Agreement,
constitutes the full, complete, final and integrated agreement between the parties relating to the
subject matter hereof and supersedes all previous written or oral negotiations, commitments,
agreements, transactions, or understandings concerning the subject matter hereof. Any modification,
amendment, or supplement to this Agreement must be in writing and signed by authorized
representatives of both parties. In case of conflict, the prevailing order of documents will be
this Agreement, the Quality Agreement, and the Confidentiality Agreement.

13.12 Other Terms.

          No terms, provisions or conditions of any purchase order or other business form or written
authorization used by Client or Patheon will have any effect on the rights, duties, or obligations
of the parties under or otherwise modify this Agreement, regardless of any failure of Client or
Patheon to object to the terms, provisions, or conditions unless the document specifically refers
to this Agreement and is signed by both parties.

 - 31 - 

 

13.13 No Third Party Benefit or Right.

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

13.14 Execution in Counterparts.

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

13.15 Use of Client Name.

          Patheon will not make any use of Client’s name, trademarks or logo or any variations thereof,
alone or with any other word or words, without the prior written consent of Client, which consent
will not be unreasonably withheld. Despite this, Client agrees that Patheon may include Client’s
name and logo in customer lists or related marketing and promotional material for the purpose of
identifying users of Patheon’s Manufacturing Services.

13.16 Governing Law.

          This Agreement will be construed and enforced in accordance with the laws of the State of Ohio
and the laws of the United States of America applicable therein and subject to the exclusive
jurisdiction of the courts thereof. The UN Convention on Contracts for the International Sale of
Goods will not apply to this Agreement.

13.17 Arbitration

          Any commercial dispute between the parties as defined in Section 12.1 that is not resolved
under that Section will be settled by arbitration in accordance with the rules for commercial
arbitration of the American Arbitration Association. A list of arbitrators will be presented to the
parties from which one will be chosen using the applicable rules. The hearing shall be conducted at
a site designated by the chosen arbitrator.

     The prevailing party will be awarded all of the filing fees and related administrative costs.
Administrative and other costs of enforcing an arbitration award, including the costs of subpoenas,
depositions, transcripts and the like, witness fees, payment of reasonable attorney’s fees, and
similar costs related to collecting an arbitrator’s award, will be added to, and become a part of,
the amount due pursuant to this Agreement. Any questions involving contract interpretation shall
use the laws of the State of Ohio.

[Signature page to follow]

 - 32 - 

 

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

	 	 	 	 	 
	 	PATHEON PHARMACEUTICALS INC.

 	 
	 	By:  	/s/ Eric W. Evans	 
	 	 	Name:  	Eric W. Evans	 
	 	 	Title:  	CFO	 
	 
	 	WHYTHE PHARMACEUTICALS, INC. D/B/A

S2 THERAPEUTICS

 	 
	 	By:  	/s/ Charles P. Sutphin	 
	 	 	Name:  	Charles P. Sutphin	 
	 	 	Title:  	President
& CEO 	 
	 

 - 33 -exv10w6

Exhibit 10.6

CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

Execution Version

License Agreement

Pharming Group N.V. 

and

Pharming Intellectual Property b.v.

and

Santarus, Inc.

September 10, 2010

 

 

Execution Version

License Agreement

          This License Agreement (the “Agreement”) is made effective as of the 10th
day of September, 2010 (the “Effective Date”) by and between Pharming Group N.V., a Dutch
corporation having its principal place of business at Darwinweg 24, 2333 CR Leiden, The
Netherlands, on behalf of itself and each of its Affiliates, including Pharming Intellectual
Property B.V. and Pharming Technologies B.V. (“Pharming”) and Santarus, Inc., a Delaware
corporation with its principal place of business at 3721 Valley Centre Drive, Suite 400, San Diego,
California 92130 (“Santarus”). Pharming and Santarus are sometimes referred to herein individually
as a “Party” and collectively as the “Parties.”

RECITALS

          A. Pharming discovered and is developing a proprietary compound, Rhucin®, that is
believed to be useful for the treatment and prevention of certain human diseases or conditions.

          B. Santarus desires to develop and commercialize Rhucin® for the treatment or
prevention of human diseases and conditions in the Territory (as defined below).

          C. Pharming and Santarus have entered into a Supply Agreement (as defined below) as of the
Effective Date pursuant to which Santarus will exclusively purchase from Pharming Group N.V. and
Pharming Group N.V. will exclusively (except in case Section 3.3(d) shall apply) supply the
Licensed Product (as defined below) to Santarus for clinical development, marketing, sale and
distribution in the Territory.

          D. Pharming Intellectual Property B.V., Pharming Group N.V. and Santarus have entered into a
deed of usufruct as of the Effective Date related to the Pharming Patents (as defined below), the
Step-In Patents ( as defined below), the Product Trademarks (as defined below) and certain
materials required to manufacture the Licensed Product (the “Deed”).

ARTICLE 1

DEFINITIONS

The following terms shall have the following meanings as used in this Agreement:

          1.1 “ACT Patents” means a Patent which covers the discovery, evaluation, manufacture,
marketing, distribution, use, sale, offer for sale, importation and/or exportation of Licensed
Product, which Patent is Controlled by Pharming or its Affiliates during the Term pursuant to that
certain License Agreement, effective [***] between Advanced Cell Technologies, Inc. (“ACT”) and
Pharming Technologies, B.V., an Affiliate of Pharming (the “ACT Agreement”), which Patents as of
the Effective Date are listed on Exhibit 1.38 attached hereto under the heading “ACT
In-Licensed Patents.”

 

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

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          1.2 “Additional Indication(s)” means a distinct illness, sickness, interruption, cessation or
disorder of a particular bodily function, system, tissue type or organ, or sign or symptom of any
such items or conditions, regardless of the severity, frequency or route of any treatment, dosage
strength or patient class, other than any hereditary angioedema indication or the Transplant
Indication.

          1.3 “Affiliate” means, with respect to any Person, any other Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by or is under common
control with, such first Person. For the purposes of this definition, “control” (including, with
correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as
applied to any Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of that Person, whether through the ownership of
voting securities, by contract or otherwise.

          1.4 “Business Day” means any day other than a day which is a Saturday, a Sunday or any day
banks are authorized or required to be closed in New York, New York or the Netherlands.

          1.5 “C1-1310 Study” means a Phase IIIb randomized, double-blind, placebo-controlled study with
an open-label extension evaluating the efficacy, safety and immunogenicity of recombinant human C1
inhibitor for the treatment of acute attacks of angioedema in patients with HAE.

          1.6 “C1-2201 Study” means a Phase II study of recombinant human C1 inhibitor for the treatment
of early antibody-mediated rejection in renal transplantation.

          1.7 “Calendar Quarter” means each of the consecutive three (3) month periods ending March 31,
June 30, September 30, and December 31; provided, however, that the first (1st) Calendar Quarter
under this Agreement will be the period beginning on the Effective Date and ending on the end of
the Calendar Quarter in which the Effective Date is encompassed and the last Calendar Quarter under
this Agreement will be the period beginning on January 1, April 1, July 1 or October 1, as the case
may be, and ending on the effective date of expiration or termination of the Term.

          1.8 “Calendar Year” means each successive period beginning on January 1 and ending twelve (12)
consecutive calendar months later on December 31; provided, however, that the first Calendar Year
under this Agreement will be the period beginning on the Effective Date and ending on the end of
the Calendar Year in which the Effective Date is encompassed and the last Calendar Year of the Term
will be the period beginning on January 1 and ending on the effective date of expiration or
termination of the Term.

          1.9 “Clinical Development” means all clinical development activities relating to obtaining
Regulatory Approval to market and sell Licensed Product for a particular indication, dose or
formulation (but not including post-Regulatory Approval activities required by the relevant
regulatory authority to support such Regulatory Approval in a country or other post-approval
product support clinical trials undertaken by the Parties, including any Phase IV Trials).

2

 

          1.10 “COGs” means Pharming’s Cost of Goods (as defined below) to manufacture Licensed Product
for Santarus, its Affiliates or permitted Sublicensees. For purposes of this definition, “Cost of
Goods” means such costs as would ordinarily be included as a cost of goods sold under GAAP for a
similar product, including labor and material cost, allocable depreciation and amortization,
product quality assurance/control costs, allocable facilities costs (e.g., sewer, water, property
taxes), insurance, Costs actually paid to contract manufacturers (without mark-up) and other costs
borne by Pharming for transport, customs and duty clearance and storage, in each case of Licensed
Compound and Licensed Product manufactured for sale in the Territory. “Cost of Goods” shall
exclude costs and charges related to or occasioned by (i) unused manufacturing capacity not
reserved for the production of Licensed Product in the Territory; (ii) the manufacture of other
products at Pharming’s facilities; (iii) allocation of general corporate overhead; and (iv) license
fees, royalties or other amounts paid or payable by Pharming pursuant to this Agreement as set
forth in Section 8.1(d).

          1.11 “Commercialization” means all activities undertaken by Santarus, its Affiliates or
permitted Sublicensees relating to the marketing or sale of Licensed Product in the Territory
(including advertising, education, marketing, pricing, reimbursement, distribution and
post-Regulatory Approval activities required by the relevant regulatory authority to support such
Regulatory Approval in a country or other or other post-approval product support clinical trials
undertaken by the Parties, including any Phase IV Trials).

          1.12 “Commercially Reasonable Efforts” means, with respect to the efforts to be expended by a
Party with respect to an objective, the efforts and resources normally used by a similarly situated
pharmaceutical company to accomplish a similar objective under similar circumstances in the
exercise of its reasonable business discretion relating to a prescription pharmaceutical product
owned by it or to which it has exclusive rights, which is of similar market potential at a similar
stage in its development or product life, taking into account issues of patent coverage, safety and
efficacy, product profile, manufacturing and supply, the competitiveness of the marketplace, the
proprietary position of the compound or product, the regulatory structure involved, the
profitability of the applicable products (including pricing and reimbursement status achieved), and
other relevant factors, including technical, legal, scientific, and/or medical factors.

          1.13 “Control” means possession of the ability to grant a license or sublicense as provided
for herein without violating the terms of any agreement or other arrangement with any Third Party.

          1.14 “Costs” means all external out-of-pockets costs associated with the specific activity.

          1.15 “Deed” has the meaning set forth in the Recitals.

          1.16 “Development” means all pre-clinical and clinical development activities, including
Clinical Development (but not including post-Regulatory Approval activities required by the
relevant regulatory authority to support such Regulatory Approval in a country or other or other
post-approval product support clinical trials undertaken by the Parties, including any Phase IV
Trials).

3

 

          1.17 “Drug Approval Application” means a Biologics License Application (or its equivalent,
including if applicable a New Drug Application), as defined in the U.S. Federal Food, Drug, and
Cosmetic Act and the regulations promulgated thereunder, as amended, submitted to the FDA in the
U.S. or a corresponding application which has been submitted to a regulatory authority in any other
jurisdiction in the Territory.

          1.18 “FDA” means the U.S. Food and Drug Administration, or any successor agency thereof.

          1.19 “Field” means any and all human uses; provided, however, an Additional Indication may be
excluded from the Field as set forth in Section 3.3(d).

          1.20 “First Commercial Sale” means the date of the first commercial sale of Licensed Product
in the Territory following receipt of Regulatory Approval to market and sell such Licensed Product
and receipt of required Manufacturing Approvals for such Licensed Product, in accordance with the
terms of this Agreement, by Santarus and/or its Affiliates or Sublicensees to distributors,
wholesalers or other customers. Sales of Licensed Product for compassionate use, clinical trial
purposes or other similar uses will not constitute a “First Commercial Sale.”

          1.21 “GAAP” means United States generally accepted accounting principles, in each case
consistently applied.

          1.22 “GTC Patents” means a Patent which covers the discovery, evaluation, manufacture,
marketing, distribution, use, sale, offer for sale, importation and/or exportation of Licensed
Product, which Patent is Controlled by Pharming or its Affiliates during the Term pursuant to that
certain License Agreement, effective [***] between GTC Biotherapeutics, Inc. (“GTC”) and Pharming
and Pharming Technologies, B.V., an Affiliate of Pharming (the “GTC Agreement”), which Patents as
of the Effective Date are listed on Exhibit 1.38 attached hereto under the heading “GTC
In-Licensed Patents.”

          1.23 “Information” means (i) information, techniques and data, including inventions,
practices, methods, knowledge, know-how, skill, experience, test data including pharmacological,
toxicological and clinical test data, analytical and quality control data or descriptions and (ii)
compounds, compositions of matter, assays and biological materials.

          1.24 “Initial Indication” means the treatment of acute angioedema attacks in patients with
hereditary angioedema.

          1.25 “Joint Inventions” has the meaning set forth in Section 10.1.

          1.26 “Joint Patent” has the meaning set forth in Section 10.3(d).

          1.27 “Launch Supplies” means a quantity of Licensed Product sufficient for the commercial
launch of such Licensed Product in the U.S. for the Initial Indication, as agreed by the Parties in
accordance with the terms of the Supply Agreement.

 

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

4

 

          1.28 “Licensed Compound” means the compound known as recombinant human C1 esterase inhibitor.

          1.29 “Licensed Product” means any product including or incorporating any formulation of
Licensed Compound.

          1.30 “Manufacturing Approvals” has the meaning set forth in Section 1.14 of the Supply
Agreement.

          1.31 “Manufacturing Patent” means a Patent being the foreign counterpart of a Pharming Patent
which covers the development or manufacture of Licensed Product outside the Territory other than a
Step-in Patent.

          1.32 “Net Sales” means the amount invoiced for sales of Licensed Product in final dosage form
by Santarus, its Affiliates or its Sublicensees to a Third Party in the Territory, less (i) all
allowances for discounts, rebates and charge-backs, (ii) credits or allowances actually granted
upon claims, rejections or returns of Licensed Product, (iii) freight, postage, shipping and
insurance charges paid for delivery of Licensed Product, and (iv) taxes, duties or other
governmental charges levied on or measured by the billing amount when included in billing, as
adjusted for rebates and refunds, all as calculated in accordance with Santarus’ standard
accounting principles and GAAP.

          1.33 “Patent” means issued patents and patent applications, including any and all
provisionals, continuations, divisionals, continuation-in-part applications, foreign counterparts,
substitutions, reissues, renewals, re-examinations, supplementary protection certificates, patent
term extensions, adjustments or restoration rights, registrations, confirmations, successor
protective rights or subsequently issued protective rights of similar nature of any of the above.

          1.34 “Person” means any individual, corporation (including any non-profit corporation),
general or limited partnership, limited liability company, joint venture or other entity or any
government or regulatory administrative or political subdivision or agency, department or
instrumentality thereof.

          1.35 “Pharming Intellectual Property” means the Pharming Patents, the GTC Patents, the ACT
Patents, Pharming Know-How and Product Trademarks.

          1.36 “Pharming Invention” has the meaning set forth in Section 10.1.

          1.37 “Pharming Know-How” means Information which (i) either (A) relates to Licensed Product,
(B) is necessary or useful in order to discover, evaluate, make, market, distribute, use, sell,
offer for sale, import or export Licensed Product or (C) Pharming or its Affiliates discloses to
Santarus under this Agreement and (ii) is owned or Controlled by Pharming or its Affiliates during
the Term, including Pharming’s or its Affiliates’ interest in any Joint Inventions.
Notwithstanding anything herein to the contrary, Pharming Know-How shall exclude Pharming Patents,
the GTC Patents and the ACT Patents.

          1.38 “Pharming Patent(s)” means a Patent which covers the discovery,

5

 

evaluation, manufacture, marketing, distribution, use, sale, offer for sale, importation
and/or exportation of Licensed Product, which Patent is owned by Pharming or its Affiliates during
the Term, which Patents as of the Effective Date are listed on Exhibit 1.38 attached hereto
under the heading “Pharming Patents.” Pharming Patents includes Pharming’s interest in any Joint
Patents. For clarity, the Pharming Patents are subject to a right of usufruct as set forth in the
Deed.

          1.39 “Phase I Clinical Trials” means those clinical trials as defined in 21 C.F.R. 312.21(a),
as amended from time to time, or the corresponding regulation in jurisdictions other than the U.S.

          1.40 “Phase II Clinical Trials” means those clinical trials as defined in 21 C.F.R. 312.21(b),
as amended from time to time, or the corresponding regulation in jurisdictions other than the U.S.

          1.41 “Phase III Clinical Trials” means those clinical trials as defined in 21 C.F.R.
312.21(c), as amended from time to time, or the corresponding regulation in jurisdictions other
than the U.S., which may include Phase IIb Clinical Trials.

          1.42 “Phase IV Trial” means any clinical trial in an indication to be conducted after receipt
of Regulatory Approval to market and sell (or as a condition to such receipt), which may include
pre-Regulatory Approval Phase IIIb Clinical Trials other than the C1-1310 Study.

          1.43 “Product Trademarks” means Rhucin® (U.S. Registration No. 3170766, Canada Registration
No. 679674 and Mexico Registration No. 915967) and all related domain names and trademark related
rights in the Territory, as more specifically described on Exhibit 1.43 attached hereto. For
clarity, the Product Trademarks are subject to a right of usufruct as set forth in the Deed.

          1.44 “Regulatory Approval” means any approvals (including pricing and reimbursement approvals,
if appropriate), registrations or authorizations of any federal, state or local regulatory agency,
department, bureau or other governmental entity either within or outside the Territory, necessary
for the Clinical Development and/or Commercialization of Licensed Product in a regulatory
jurisdiction (other than Manufacturing Approvals (as defined in the Supply Agreement)).

          1.45 “Santarus Invention” has the meaning set forth in Section 10.1.

          1.46 “Santarus Know-How” means Information which (i) Santarus discloses to Pharming under this
Agreement and (ii) is owned or Controlled by Santarus or its Affiliates during the Term, including
Santarus’ or its Affiliates’ interest in any Joint Inventions. Notwithstanding anything herein to
the contrary, Santarus Know-How shall exclude Santarus Patents.

          1.47 “Santarus Patent” means a Patent which covers the discovery, evaluation, manufacture,
marketing, distribution, use, sale, offer for sale, importation and/or exportation of Licensed
Product within the Field and in the Territory, which Patent is owned or Controlled by Santarus or
its Affiliates during the Term. Santarus Patents includes Santarus’

6

 

interest in any Joint Patents. As of the Effective Date, there are no Santarus Patents.

          1.48 “Step-In Patent” means the foreign counterpart of a Pharming Patent which covers the
manufacture of Licensed Product outside the Territory in a country where the current or future
Manufacturing Facilities are located. For clarity, the Step-In Patents are subject to a right of
usufruct as set forth in the Deed.

          1.49 “Sublicensee” means a Third Party to which Santarus or its Affiliate sublicenses or
otherwise transfers its right to develop, manufacture and/or Commercialize Licensed Product in a
jurisdiction in the Territory in accordance with the terms of this Agreement; provided, however,
that “Sublicensee” shall exclude specialty distributors utilized by Santarus, its Affiliates or
Sublicensees.

          1.50 “Supply Agreement” means that certain Supply Agreement between the Parties dated as of
the Effective Date, as the same may be amended from time to time.

          1.51 “Supply Price” shall have the meaning set forth in Section 8.1(a).

          1.52 “Term” shall have the meaning set forth in Section 11.1.

          1.53 “Territory” means the U.S., Canada and Mexico, and the territories and possessions of
each of the foregoing countries.

          1.54 “Third Party” means any Person other than Pharming or Santarus or their Affiliates.

          1.55 “Transplant Indication(s)” means the treatment or prevention of renal transplantation
rejection in humans, including acute antibody-mediated rejection or delayed graft function.

          1.56 “Unit” means a vial containing 2100 units of Licensed Compound in the form of lyophilized
powder, as further described in the applicable Specifications (as defined in the Supply Agreement).

          1.57 “Valid Claim” means a claim in any issued patent or pending patent application which (a)
has not been held invalid or unenforceable by a non-appealed or un-appealable decision of a court
or government agency or other appropriate body of competent jurisdiction and has not been admitted
invalid through disclaimer or dedication to the public, and (b) has not expired, been determined to
be unenforceable, been cancelled, withdrawn, abandoned or, with respect to patent applications,
been on file with the applicable patent office for more than five (5) years from the earlier of its
date of filing or earliest claim of priority under 35 U.S.C. §119 or §120 and its successors in the
U.S. and corresponding regulations in any other jurisdiction in the Territory.

          1.58 Clarification. The word “including” or any variation thereof means “including without
limitation” and the word “including” or any variation thereof will not be construed to limit any
general statement which it follows to the specific or similar items or matters immediately
following it.

7

 

ARTICLE 2

STEERING COMMITTEE

          2.1 Formation and Membership. As soon as practicable after the Effective Date, Santarus and
Pharming shall establish a Steering Committee (the “Steering Committee”) comprised of two (2)
representatives designated by Santarus and two (2) representatives designated by Pharming, each of
whom shall have experience and seniority sufficient to enable him or her to make decisions on
behalf of the Party he or she represents. From time to time, the Steering Committee may establish
one or more subcommittees to oversee particular projects or activities related to Licensed Product,
and such subcommittees will be constituted as the Steering Committee agrees.

          2.2 Administrative Matters. The Steering Committee shall be co-chaired by a designated
representative from each of Santarus and Pharming, and one or both of such representatives may call
meetings of the Steering Committee. The co-chairs shall be responsible for leading the meetings.
A Steering Committee member of the Party hosting a meeting of the Steering Committee shall serve as
secretary of that meeting. The secretary of the meeting shall prepare and distribute to all
members of the Steering Committee minutes of the meeting within [***] days following each meeting.
Such minutes shall provide a description in reasonable detail of the discussions at such meeting
and a list of any actions, decisions or determinations approved by the Steering Committee. Minutes
of each Steering Committee meeting shall be effective when approved unanimously by the Steering
Committee, which shall in any event be obtained prior to the next such meeting.

          2.3 Meetings. The Steering Committee shall meet at least four (4) times per year (except that
proportionately fewer meetings shall be held in the year of the Effective Date and additional
meetings may be held upon the reasonable request of either Party). Such meetings shall be held at
such times and places as are mutually agreed upon by the Steering Committee and may be conducted in
person or telephonically, provided, however, that the first meeting of the Steering Committee shall
occur within [***] days of the Effective Date. Each Party shall be responsible for its own
expenses incurred in connection with attendance by its personnel at any meeting of the Steering
Committee. Each Party may invite additional employees and consultants or scientific advisors to
attend the meetings of the Steering Committee in a non-voting capacity, provided that all such
employees, consultants, and scientific advisors shall be obligated to treat all information and
material disclosed at such meetings as confidential and not to use such information and materials
for any purposes other than to perform such Party’s obligations or exercise its rights under this
Agreement.

          2.4 Specific Responsibilities. The Steering Committee shall be responsible for facilitating the
exchange of information regarding Licensed Compound and Licensed Product
by the Parties as necessary to effect the intent of this Agreement. In addition, the Steering Committee shall be
responsible for, among other things:

               (a) Exchanging information between the Parties (including information generated by their
respective Affiliates and Sublicensees) with regard to clinical

 

			
	***	 	Certain information on this page has been omitted and filed separately with the Securities and
Exchange Commission. Confidential treatment has been requested with respect to the omitted
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8

 

development (including Clinical Development hereunder), conduct of the C1-1310 Study,
regulatory submissions and commercialization (including Commercialization hereunder) of Licensed
Product and Licensed Compound on a worldwide basis;

               (b) Monitoring activities related to manufacturing of Licensed Product;

               (c) Approving any Cost-overruns related to the C1-2201 Study, as compared to the budgeted
costs agreed as of the Effective Date;

               (d) Approving the plan(s) for and, if approved, monitoring each Party’s conduct of the C1-1310
Study, Development and Phase IV Trials for Licensed Product, including activities related to the
Initial Indication, the Transplant Indication and Additional Indications pursuant to Section 3.3;

               (e) Reviewing and deciding whether to pursue a Proposal (as defined in Section 3.3(a)) jointly
or permit a Developing Party to pursue a Proposal alone or to prevent either Party from pursuing a
Proposal if such Proposal is reasonably likely to have a material and adverse effect on the
Licensed Product in or outside the Territory (which if such Proposal is pursued thereafter shall be
subject to the monitoring of activities (if pursued alone) and approval and monitoring of
activities (if pursued jointly) pursuant to Section 2.4(d));

               (f) Coordinating the Parties’ trademark and Patent protection for Licensed Product in their
respective territories;

               (g) Approving the plan(s) for and, if approved, monitoring Development undertaken pursuant to
Section 3.4(c) (including the allocation of Costs associated therewith);

               (h) Reviewing and monitoring the global forecasted demand for Licensed Product and, in
connection therewith, approving the Forecasts (as defined in Section 3.1(a) of the Supply
Agreement) for Licensed Product pursuant to procedures to be mutually agreed;

               (i) Coordinating the timing of the transfer of responsibility under and ownership of all
regulatory filings related to the Licensed Product in the Territory from Pharming to Santarus; and

               (j) performing such other functions as mutually agreed by the Parties in furtherance of the
purposes of this Agreement.

          2.5 Decision-Making. Decisions of the Steering Committee under Sections 2.4(c), (d), (e), (g) or
(h) shall be made by unanimous vote. The Parties shall use good faith efforts to reach consensus
on all such decisions. In the event that the members of the Steering Committee cannot reach
unanimous agreement on a particular issue requiring their decision

9

 

within [***] days (or such shorter time as may be reasonably required by the Party whose actions
are subject to that decision) after the meeting at which agreement was requested, then the issue
shall be resolved pursuant to Section 15.2. Notwithstanding the foregoing, in no event shall the
Steering Committee have the right to modify or amend this Agreement, or waive either Party’s
compliance with this Agreement.

ARTICLE 3

DEVELOPMENT

          3.1 Development of Licensed Product for Initial Indication.

               (a) Pharming shall be responsible for conducting and completing any Development conducted and
the C1-1310 Study (including any Regulatory Approvals required to conduct such study) following the
Effective Date for the Initial Indication as well as any Development required by FDA in connection
with obtaining Regulatory Approval to market and sell Licensed Product for the Initial Indication
in the U.S. (other than activities required after Regulatory Approval is granted as set forth in
Section 3.1(h)). Pharming shall pay all costs and expenses associated with such Development and
the Costs incurred in connection with the C1-1310 Study.

               (b) Notwithstanding Section 3.1(a), in the event that (i) an uncured material payment breach
or material default exists (excluding any payments that are not made by Pharming due to the fact
that Pharming contests the correctness of the invoice related to such payment obligation in good
faith) with respect to a portion of the costs or expenses incurred in connection with the
preparation or conduct of the C1-1310 Study and provided that such payment breach of a default will
result in the C1-1310 Study incurring a material delay, (ii) Pharming has not dosed the first
patient in the C1-1310 Study by March 31, 2011 or (iii) Pharming has ceased using reasonable best
efforts to progress the C1-1310 Study, Santarus may step in and make payment of any such costs and
expenses which are late as necessary to continue to progress the C1-1310 Study. If Santarus steps
in and pays for any such costs or expenses in an amount greater than or equal to [***] percent
([***]%) of the total aggregate Costs incurred for the C1-1310 Study, then [***]. If, however,
Santarus steps in and pays for any such costs or expenses in an amount less than [***] percent
([***]%) of the total aggregate Costs incurred for the C1-1310 Study, Santarus may deduct any such
costs or expenses (plus a mark-up of [***] percent ([***]%)) from future Milestone Payments payable
by Santarus to Pharming hereunder.

               (c) The Responsible Regulatory Party (as defined below) for the Initial Indication shall be:
(i) Pharming in the U.S. prior to receipt of Regulatory Approval to market and sell Licensed
Product in the Initial Indication; (ii) Santarus in the U.S. following receipt of Regulatory
Approval to market and sell Licensed Product in the Initial Indication; and (iii) Santarus in each
other country in the Territory from and after the Effective Date. For clarity, as set forth in
Section 2.4, the Steering Committee will coordinate the timing of the transfer of responsibility
under and ownership of all regulatory filings; provided that such regulatory filings for the
Licensed Product in the Initial Indication shall be transferred to Santarus no later than receipt
of Regulatory Approval to market and sell such Licensed Product.

 

			
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               (d) Prior to submission of the Drug Approval Application for the Initial Indication in each
country within the Territory, the Parties will consult on any regulatory correspondence or other
regulatory communication and will support each other in their efforts to timely and/or promptly
respond to questions posed by FDA or other relevant regulatory authorities. The Party responsible
for filing and interacting with the FDA or other relevant regulatory authority in the applicable
country in the Territory (the “Responsible Regulatory Party”) shall provide the other Party with a
reasonable opportunity to review and comment on regulatory authority written correspondence and the
Parties shall mutually consent prior to submission of substantive regulatory responses, such
consent not to be unreasonably withheld. The Responsible Regulatory Party will allow, and the other
Party will make available, one or more representatives of such other Party to attend any meetings
(whether in person or telephonically) with such regulatory authorities as observers or technical
experts as determined by the Steering Committee prior to such meeting.

               (e) Pharming shall be responsible for (i) preparing and filing the Drug Approval Application
for the Initial Indication in the U.S. and the costs and expenses associated with such activities,
and (ii) completing the Regulatory Approval process for the Initial Indication in the U.S.
Pharming shall be responsible for the Costs associated with such activities (except as otherwise
set forth in Section 3.1(g). Santarus shall be responsible for filing such Drug Approval
Application, in Santarus’ name and for seeking the Regulatory Approval for the Initial Indication
in each other country in the Territory and for the Costs associated with such activities. As set
forth in the Supply Agreement, Pharming shall be responsible for obtaining and maintaining all
Manufacturing Approvals and the Costs associated with such activities. During the preparation of
such Drug Approval Application, Pharming will provide Santarus access to all Information reasonably
necessary for Santarus to review such Drug Approval Application. In addition, Pharming shall
provide Santarus with support, access and a reasonable opportunity to review and comment on the
Drug Approval Application. The Parties shall mutually consent prior to submission of the Drug
Approval Application for the Initial Indication to the FDA, such consent not to be unreasonably
withheld.

               (f) During the regulatory review period of the Drug Approval Application for the Initial
Indication in each country within the Territory, each Party will provide the other Party access to
all Information reasonably necessary to timely and/or promptly respond to questions posed by FDA or
other relevant regulatory authorities. The Parties shall provide each other with a reasonable
opportunity to review and comment on regulatory authority written correspondence and the Parties
shall mutually consent prior to submission of substantive regulatory responses, such consent not to
be unreasonably withheld. The Parties will allow, and will make available, one or more
representatives to attend any meetings (whether in person or telephonically) with such regulatory
authorities as observers or technical experts as determined by the Steering Committee prior to such
meeting.

               (g) The Parties will [***] after acceptance for filing of the Drug Approval Application with
respect to any mutually agreed activities of a Third Party regulatory consulting firm or other
Third Party consulting or advocacy Persons in connection with obtaining Regulatory Approval to
market and sell Licensed Product in the Initial Indication in the U.S.

 

			
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               (h) Following receipt of Regulatory Approval to market and sell Licensed Product in the
Initial Indication in a country within the Territory, Santarus shall be solely responsible for
conducting any additional clinical or post-marketing studies or clinical trials or other
post-Regulatory Approval activities required by the relevant regulatory authority to support such
Regulatory Approval in such country, and the Costs associated with such activities, including Phase
IV Trials, and, subject to Section 2.4(d), Santarus shall also have the right to conduct additional
Phase IV Trials at its own cost and expense. For clarity, as set forth in the Supply Agreement,
Pharming shall be responsible for conducting any additional studies required to support all
Manufacturing Approvals and the Costs associated with such activities.

               (i) Each Party shall be responsible for its internal costs and expenses in connection with
performing its obligations under this Section 3.1.

          3.2 Clinical Development of Licensed Product for Transplant Indication(s).

               (a) Within [***]([***]) days of the Effective Date, the Steering Committee shall establish an
initial plan for the Clinical Development of Licensed Product for at least one of the Transplant
Indications in the U.S. Santarus and Pharming shall share responsibility for conducting, and
completing any such Clinical Development and will share equally the Costs associated with such
Clinical Development and other development activities that may be necessary. These Costs shall be
approved in advance by the Steering Committee, except the Costs associated with the C1-2201 Study,
as described below. For clarity, the Parties have agreed to share the Costs for the C1-2201 Study
50/50, which Costs are set forth in reasonable detail on Exhibit 3.2(a) attached hereto.
The timing and amount of Costs associated with the C1-2201 Study and such other information as
reasonably requested shall be provided by the Parties on at least a [***] basis.

               (b) Santarus shall be responsible for preparing and filing the Drug Approval Application for
the Transplant Indication(s) throughout the Territory and for seeking Regulatory Approval to market
and sell Licensed Product in Transplant Indication(s) in the Territory and the Costs associated
with such activities; provided that Pharming shall have a reasonable opportunity to review and
comment on the Drug Approval Application prior to submission. As set forth in the Supply
Agreement, Pharming shall be responsible for obtaining and maintaining all Manufacturing Approvals
and the Costs associated with such activities. The Parties shall mutually consent prior to
submission of the Drug Approval Application for Transplant Indication(s) to the FDA, such consent
not to be unreasonably withheld. Parties will provide each other support and access to all
Information reasonably necessary in the preparation of such Drug Approval Application in and
outside of the Territory.

               (c) Prior to receipt of Regulatory Approval to market and sell Licensed Product in Transplant
Indication(s) in a country within the Territory, Santarus shall provide Pharming with a reasonable
opportunity to review and comment on regulatory authority correspondence, and the Parties shall
mutually consent prior to submission of substantive regulatory responses, such consent not to be
unreasonably withheld. Santarus will allow one or

 

			
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more representatives of Pharming to attend any meetings with such regulatory authorities as
observers or technical experts as determined by the Steering Committee prior to such meeting.

               (d) Following receipt of Regulatory Approval to market and sell Licensed Product in Transplant
Indication(s) in any of the countries of the Territory, Santarus shall be solely responsible for
conducting any additional clinical or post-marketing clinical trials, required by the relevant
regulatory authority to support such Regulatory Approval, and the Costs associated with such
activities, and, subject to Section 2.4(c), Santarus shall also have the right to conduct Phase IV
Trials at its own cost and expense. For clarity, as set forth in the Supply Agreement, Pharming
shall be responsible for conducting any additional studies required to support all Manufacturing
Approvals and the Costs associated with such activities. The Parties will provide each other with
access to such Information generated within their respective territories as is reasonably necessary
in the support of Regulatory Approvals in and outside of the Territory.

               (e) In the event that either Party elects not to fund its portion of the Clinical Development
Costs pursuant to Section 3.2(a), then the other Party shall be entitled to move forward with such
Clinical Development program pursuant to the procedures for Additional Indications set forth in
Section 3.3.

               (f) Each Party shall be responsible for its internal costs and expenses in connection with
performing its obligations under this Section 3.1.

          3.3 Development of Licensed Product for Additional Indications.

               (a) If either Party determines to pursue Development of Licensed Product for an Additional
Indication in the Territory (the “Developing Party”), the Developing Party shall provide to the
Steering Committee, within [***] days of such determination, a sufficiently detailed written
proposal for the Development of such Licensed Product for such Additional Indication, including any
pre-clinical studies, Phase I Clinical Trials, Phase II Clinical Trials and Phase III Clinical
Trials to be conducted and a good-faith estimate of Development Costs and any other Costs
associated with such Additional Indication through Regulatory Approval to market and sell in the
Territory (a “Proposal”). Within [***] days of receipt of a Proposal, the Steering Committee
shall meet to review the Proposal and to permit the other Party an opportunity to ask questions and
request additional information from the Developing Party related to the Proposal, including whether
such Proposal is reasonably likely to have a material and adverse effect on the Licensed Product in
the Territory. The Steering Committee will determine if the Parties have any interest in pursuing
a Proposal jointly or whether the Developing Party will pursue a Proposal alone, subject to the
opt-in rights set forth in this Section 3.3 and subject to the Steering Committee’s determination
that pursuit of such Proposal is not reasonably likely to have a material and adverse effect on the
Licensed Product in or outside the Territory.

               (b) The other Party (the “Opting-In Party”) shall have the right to “opt-in” to the Development of
Licensed Product for the Additional Indication by providing a

 

			
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notice in writing to the Developing Party as follows:

                    (i) within [***] ([***]) [***] of the approval of the Proposal by the Steering Committee, in
which case each Party shall be responsible for [***] ([***]) of [***];

                    (ii) within [***] ([***]) [***] of receipt from [***] of a [***], in which case (A) [***]
shall be responsible for [***] percent ([****]) of any [***]; and (B) [***] shall be responsible
for [***] percent ([****]) of any [***]; or

                    (iii) within [***] ([***]) [***] of receipt from [***] of a [***] in which case the [***]
shall be responsible for [***] percent ([****]) of any [***].

               (c) If [***] in addition to the applicable responsibility [***] set forth in subsection (b)
above:

                    (i) [***] shall have the [***];

                    (ii) a regulatory milestone payment shall be made by [***] in an amount to be determined by
the Parties in good faith based on (A) [***], (B)
[***] and (C) [***]; and

                    (iii) Subject to the rights of [***] as set forth in the [***] shall supply all requirements
of Licensed Product in such Additional Indication in the Territory and the Supply Price payable
[***] shall be paid to [***] as set forth therein.

               (d) [***] declines to opt-in [***] is the Developing Party, [***] shall be free to [***];
provided that [***]; provided further that [***].

               (e) [***] declines to opt-in [***] is the Developing Party:

                    (i) [***] shall be due or payable [***];

                    (ii) the Supply Price payable [***] shall be paid to [***] as set forth therein; and

                    (iii) [***] shall not use and shall have no right to [***], other than [***] or on terms and
conditions mutually agreed by the Parties.

               (f) Notwithstanding Section 3.3(d), in the event that [***] declines to opt-in at each of the
opt-in points set forth in Sections 3.3(b)(i), (ii) and (iii) and [***] is the Developing Party,
and [***], [***] shall give [***]written notice (a “Notice”) for the purpose of allowing [***] to
determine whether it wishes to negotiate with [***] regarding [***]. If [***] desires to negotiate
with [***] under this Section 3.3(f), [***] shall give [***] written notice and the Parties shall
in good faith negotiate the associated terms. If after a period of [***] ([***]) [***] from the
date of [***] the Parties have failed to agree upon the associated terms, [***]

 

			
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shall be free to [***]. [***] shall not convey to any Third Party [***] until [***] has
complied with this Section 3.3 in full.

          3.4 Development, including Clinical Development; General.

               (a) Each of Santarus and Pharming hereby agrees to conduct its Development activities and the
C1-1310 Study described in Sections 3.1, 3.2 and 3.3 above using its Commercially Reasonable
Efforts and in compliance with all applicable regulatory requirements.

               (b) During the Term, Pharming will provide to Santarus all Information in its possession
regarding Licensed Product in the Field, as such Information becomes available, for use in
Development efforts and the conduct of the C1-1310 Study pursuant to this Agreement. Pharming has,
prior to the Effective Date, provided Santarus with: (i) copies of all regulatory filings,
substantive regulatory authority correspondence or interactions and the results of all clinical and
non-clinical testing of Licensed Product under the control of or performed by or on behalf of
Pharming prior to the Effective Date; and (ii) a list of all clinical and non-clinical testing of
Licensed Product being conducted up to the Effective Date.

               (c) Each Party will promptly furnish the other Party with copies of all substantive regulatory
authority correspondence or interactions relating to the Development of, and/or filing of
regulatory approvals for, Licensed Compound and/or Licensed Product in the Field (including all
substantive correspondence with such regulatory authorities, responses from such regulatory
authorities, requests for information from such regulatory authorities, briefing documents and
other materials relating to interactions with such regulatory authorities, and summaries of outputs
resulting from substantive correspondence/ conversations or meetings with such regulatory
authorities).

               (d) Except as set forth in Section 3.3(e)(iii) (as to Pharming when it has declined to
opt-in), each Party shall be permitted to use and reference all Information provided to such Party
pursuant to this Agreement in any Drug Approval Application for Licensed Product in their
respective territories. Notwithstanding the foregoing, each Party agrees that it shall treat all
Information provided by the other Party pursuant to this Section 3.4(e) as Confidential
Information, subject to the terms of Article 9.

               (e) Costs [***] under this Agreement shall be invoiced by the paying Party to the other Party
on a monthly basis within [***] days after each month in which the expenses are paid. Costs paid
in a currency other than in U.S. currency will be billed in U.S. currency based on the closing
exchange rate on the last day of the month in which the costs are paid as published in the Wall
Street Journal (www.wsj.com). The incurring Party shall also submit to the other Party, along
with the monthly invoice, a report of Costs incurred and not yet paid at the end of the month.
Payments shall be made in accordance with Section 8.4.

          3.5 Pharmacovigilance. Upon the transfer to Santarus of the IND for Licensed Product in any
indication or the transfer to Santarus of Regulatory Approval to market and sell the Licensed
Product in any indication, whichever occurs first, Santarus will be

 

			
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responsible for pharmacovigilance reporting in the Territory, and Pharming will provide data
and other Information to assist with Santarus’ pharmacovigilance reporting obligations. Pharming
will be responsible for maintaining the worldwide pharmacovigilance database. Prior to such
transfer of the regulatory filing (e.g., the IND or Regulatory Approval to market and sell the
Licensed Product) to Santarus, the Parties shall enter into a separate pharmacovigilance agreement
to conform with the respective pharmacovigilance reporting obligations of Santarus in the Territory
and Pharming throughout the world.

ARTICLE 4

LICENSING FEE; ADDITIONAL PAYMENTS

          4.1 Licensing Fee. As partial payment for the Patent licenses granted by Pharming pursuant to
Article 5 of this Agreement, Santarus shall pay to Pharming, within three (3) Business Days after
the Effective Date, an amount equal to US$15,000,000 (Fifteen Million U.S. Dollars) as an upfront
fee. Such payment shall be nonrefundable and noncreditable.

          4.2 Milestone Payments. Santarus shall pay to Pharming the following one-time payments,
within [***] days after the first occurrence of each event (each, a “Milestone Payment”):

               (a) US$5,000,000 (Five Million U.S. Dollars) upon receipt of written confirmation from FDA of
FDA’s acceptance for filing of a Drug Approval Application for Licensed Product in the Initial
Indication; and

               (b) US$[***]([***]U.S. Dollars) upon Successful Completion of the [***]; and

               (c) US$[***]([***]U.S. Dollars) upon the earlier of (1) [***] of Licensed Product in the U.S.
in the Initial Indication or (2) [***]([***]) days following the date on which Santarus (or its
Affiliate or Sublicensee) has received [***] (A) [***] in the Initial Indication and (B) [***].

          For purposes of this Section 4.2, “Successful Completion” means [***], which is defined as
[***]. Each Milestone Payment shall be nonrefundable and, except to the extent set forth in this
Agreement or the Supply Agreement, noncreditable. In the event that the Milestone Payment required
under subsection (b) [***], such Milestone Payment under subsection (b) shall be [***].

          4.3 Royalty Payments. Santarus shall pay to Pharming the following one-time royalty payments,
concurrently with the payment of the Supply Price with respect to the applicable Calendar Quarter
after the Calendar Quarter in which the first achievement of each of the following aggregate Net
Sales levels in a Calendar Year with respect to Licensed Product in the Territory by Santarus, its
Affiliates and its Sublicensees occurred:

 

			
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	 	 	AGGREGATE NET SALES LEVELS 	 	PAYMENT
	 
	 	 	 	 
	(i)

	 	Calendar Year Net Sales Exceed
US$[***] ([***] Dollars)
	 	US$[***]([***] Dollars)
	 
	 	 	 	 
	(ii)

	 	Calendar Year Net Sales Exceed
US$500,000,000 (Five Hundred

Million Dollars)
	 	US$[***]([***] [***] Dollars)

Such payments shall be nonrefundable and noncreditable (except to the extent set forth in the
Supply Agreement) and shall not be subject to adjustment in the event that Pharming is no longer
supplying Licensed Product.

ARTICLE 5

LICENSES; EXCLUSIVITY

          5.1 Patent Licenses to Santarus. Pharming hereby grants to Santarus:

               (a) An exclusive (even as to Pharming and its Affiliates, subject to Pharming’s rights as a
Developing Party and its compliance with the obligations as set forth in Section 3.3) license
under:

                    (i) The Pharming Patents to use, import, offer, sell, offer for sale and have sold Licensed
Product (including Licensed Compound) in the Field and in the Territory; Santarus accepts and
acknowledges that Pharming has previously granted to GTC certain non-exclusive rights with respect
to the Pharming Patents listed under PH001 and PH006 on Exhibit 1.38 as set forth in
Section 3.1(a) of the GTC Agreement;

                    (ii) The ACT Patents to use, import, offer, sell, offer
for sale and have sold Licensed Product (including Licensed Compound) in the Field and in the
Territory; and

                    (iii) The GTC Patents to use, import, offer, sell, offer for sale, and have sold Licensed
Product (including Licensed Compound) in the Field and in the Territory; Santarus accepts and
acknowledges that Pharming’s rights under the GTC Patents are non-exclusive, as set forth in
Section 3.2 (a) of the GTC Agreement;

               (b) A non-exclusive license under the Pharming Patents, the Manufacturing Patents (subject to
limitations disclosed by Pharming to Santarus in writing on or prior to the Effective Date and
subject to limitations pursuant to applicable law in the relevant jurisdiction)), the Step-In
Patents, the ACT Patents and the GTC Patents to develop Licensed Product (including Licensed
Compound) in the Field worldwide, solely for use, import, offer or sale in the Territory; and

               (c) A non-exclusive license under the Pharming Patents, the Manufacturing Patents (subject to
limitations disclosed by Pharming to Santarus in writing on or prior to the Effective Date and
subject to limitations pursuant to applicable law in the relevant jurisdiction), the Step-In
Patents, the ACT Patents and the GTC Patents to make and have made

 

			
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Licensed Product (including Licensed Compound) in the Field worldwide, solely for use, import,
offer or sale in the Territory.

          Pharming has provided complete and correct copies of each of the ACT Agreement and the GTC
Agreement to Santarus prior to the Effective Date and there are no other agreements in effect
relating to the ACT Patents or the GTC Patents. As set forth in Section 3.5(f) of the GTC
Agreement, the sublicense granted to Santarus hereunder shall be converted to a direct license with
GTC on substantially the same terms as the GTC Agreement at the option of Santarus.

          5.2 Know-How Licenses to Santarus. Pharming hereby grants to Santarus:

               (a) An exclusive (even as to Pharming and its Affiliates) license under the Pharming
Inventions and the Pharming Know-How within the Territory to use such Inventions and Know-How for
any purpose consistent with the rights and obligations of Santarus contained in this Agreement,
subject to Pharming’s rights as a Developing Party and its compliance with the obligations as set
forth in Section 3.3;

               (b) A non-exclusive license under the Pharming Inventions and the Pharming Know-How to develop
Licensed Product (including Licensed Compound) in the Field worldwide, solely for use, import,
offer or sale in the Territory; and

               (c) A non-exclusive license under the Pharming Inventions and the Pharming Know-How to make
and have made Licensed Product (including Licensed Compound) in the Field worldwide, solely for
use, import, offer or sale in the Territory.

          5.3 Trademark License to Santarus. Pharming hereby grants to Santarus:

               (a) An exclusive (even as to Pharming and its Affiliates) license to use the Product
Trademarks within the Territory for any purpose consistent with the rights and obligations of
Santarus contained in this Agreement; and

               (b) A non-exclusive license to use the Pharming Trademarks to develop, make and have made
Licensed Product (including Licensed Compound) in the Field worldwide, solely for use, import,
offer or sale in the Territory.

          5.4 Sublicensing.

               (a) Santarus may grant sublicenses to the Pharming Patents, the Manufacturing Patents (insofar
as such sublicense is necessary for Santarus to manufacture Licensed Product), the Step-In Patents
(insofar as such sublicense is necessary for Santarus to manufacture Licensed Product), the ACT
Patents, the Pharming Inventions, the Pharming Know-How and the Product Trademarks and, with
respect to the GTC Patents, subject to the limitations set forth in Section 3.5 of the GTC
Agreement, without the consent of Pharming to its Affiliates for any purpose or to Third Parties as
is necessary for Santarus to exercise its rights under this Agreement, the Supply Agreement or the
Deed. Santarus may otherwise grant sublicenses under this Article 5 to Third Parties only with the
prior consent of Pharming, such consent not to be unreasonably withheld.

18

 

               (b) Santarus will provide notice to Pharming in the event Santarus grants a sublicense
pursuant to this Section 5.4 within [***] following the date of such grant.

               (c) Upon termination of this Agreement: (i) sublicenses granted by Santarus to its Affiliates
shall concurrently terminate; and (ii) each sublicense granted to Third Parties shall survive
(unless otherwise provided in the applicable sublicense agreement between Santarus and such Third
Party), provided that the applicable Sublicensee agrees in writing to be bound to Pharming by the
payment and other obligations that the Sublicensee has to Santarus and at a minimum by the payment
and the obligations of Santarus applicable to its territory and/or field pursuant to this
Agreement.

          5.5 Third Party Technology. Pharming represents to Santarus that no Third Party technology or
intellectual property rights are included in the Pharming Intellectual Property as of the Effective
Date, except the ACT Patents and the GTC Patents.

          5.6 Exclusivity. During the Term, neither Santarus nor Pharming, nor any of their Affiliates
or Sublicensees, shall, directly or indirectly through another Person, manufacture, develop,
promote, market or distribute any pharmaceutical products in the Field containing Licensed Compound
(or other forms of C1 esterase inhibitor) in or for use in the Territory, other than Licensed
Product as contemplated by this Agreement (including in the case of Pharming as contemplated under
Section 3.3). For clarity, a transaction permitted pursuant to Section 15.1 shall not result in a
breach of this Section.

ARTICLE 6

COMMERCIALIZATION

          6.1 General. Except as otherwise set forth in Section 3.3(d), Santarus shall have the
exclusive right to Commercialize Licensed Product in the Field and in the Territory, at its cost
and expense. In connection therewith, Santarus will be responsible for appointing its own
employees, agents and representatives, who will be compensated by Santarus.

          6.2 Santarus Efforts. Santarus will use its Commercially Reasonable Efforts to promote, sell
and distribute a Licensed Product in the Field and in the Territory after it obtains Regulatory
Approval therefore to market and sell, consistent with accepted business practices, provided that
all Manufacturing Approvals are in place and continuously effective. Santarus further agrees to
commercially launch a Licensed Product for the Initial Indication in the U.S. within one hundred
twenty (120) days following receipt of all necessary Regulatory Approvals to market and sell such
Licensed Product in the U.S. for the Initial Indication (subject to prior timely receipt of
adequate Launch Supplies from Pharming and provided that all Manufacturing Approvals are in place
and effective).

          6.3 Restrictions on Distributors and Dealers. Except as otherwise set forth in Section
3.3(d), Pharming shall not directly or indirectly, and shall also use Commercially Reasonable
Efforts (or best efforts to the maximum extent permitted under applicable law) to insure that any
of its distributors or dealers (including its Affiliates and non-Affiliates) to whom Pharming sells
or may sell products containing Licensed Compound (including Licensed

 

			
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Product) for resale shall not directly or indirectly, sell Licensed Product or Licensed
Compound to any customer located in the Territory.

          6.4 Pricing. Santarus shall determine, in its sole discretion, the pricing, discounting
policy and other commercial terms relating to Licensed Product in the Field and in the Territory.

ARTICLE 7

MANUFACTURE AND SUPPLY

     As of the Effective Date, the Parties have entered into the Supply Agreement pursuant to
which, among other things, Pharming will supply all of the requirements of Santarus, its Affiliates
and Sublicensees in the Territory of Licensed Product on the terms and subject to the conditions
set forth therein.

ARTICLE 8

SUPPLY PRICE PAYMENTS; PAYMENT PROCEDURES; RECORDS

          8.1 Supply Price.

               (a) As consideration for the licenses and rights granted hereunder and as compensation for the
commercial supply of Licensed Product by Pharming pursuant to the Supply Agreement, Santarus will
pay to Pharming a supply price with respect to sales of Licensed Product in the Territory, as
follows (the “Supply Price”):

                    (i) In the event that the First Commercial Sale in the U.S. for the Initial Indication
occurs on or prior to [***], the Supply Price for the Licensed product in the Initial Indication, a
Transplant Indication or Additional Indication as to which Santarus has opted-in under Section 3.3
shall be as follows:

	 	 	 
	 	 	Supply Price payable as percentage of Net
	Net Sales in a Calendar Year	 	Sales in a Calendar Year
	Less than or equal to US$[***]

	 	[***] percent ([***]%)
	 
	 	 
	Greater than US$[***] but less than or
equal to US$[***]

	 	[***] percent ([***]%)
	 
	 	 
	Greater than US$[***] but less than or
equal to US$[***]

	 	[***] percent ([***]%)
	 
	 	 
	Greater than US$[***] but less than or
equal to US$[***]

	 	[***] percent ([***]%)
	 
	 	 
	Greater than US$[***]

	 	[***] percent ([***]%)

                    (ii) In the event that the First Commercial Sale in the U.S. for the Initial Indication occurs
following [***] but on or prior to [***], the Supply Price for the Licensed Product in the Initial
Indication, a Transplant Indication or Additional Indication as to which Santarus has opted-in
under Section 3.3 shall be as follows:

 

			
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	 	 	Supply Price payable as percentage of Net
	Net Sales in a Calendar Year	 	Sales in a Calendar Year
	Less than or equal to US$[***]

	 	[***] percent ([***]%)
	 
	 	 
	Greater than US$[***] but less than or
equal to US$[***]

	 	[***] percent ([***]%)
	 
	 	 
	Greater than US$[***] but less than or
equal to US$[***]

	 	[***] percent ([***]%)
	 
	 	 
	Greater than US$[***] but less than or
equal to US$[***]

	 	[***] percent ([***]%)
	 
	 	 
	Greater than US$[***]

	 	[***] percent ([***]%)

                    (iii) In the event that the First Commercial Sale in the U.S. for the Initial Indication
occurs following [***], the Supply Price for the Licensed Product in the Initial Indication, a
Transplant Indication or Additional Indication as to which Santarus has opted-in under Section 3.3
shall be as follows:

	 	 	 
	 	 	Supply Price payable as percentage of Net
	Net Sales in a Calendar Year	 	Sales in a Calendar Year
	Less than or equal to US$[***]

	 	[***] percent ([***]%)
	 
	 	 
	Greater than US$[***] but less than or
equal to US$[***]

	 	[***] percent ([***]%)
	 
	 	 
	Greater than US$[***] but less than or
equal to US$[***]

	 	[***] percent ([***]%)
	 
	 	 
	Greater than US$[***] but less than or
equal to US$[***]

	 	[***] percent ([***]%)
	 
	 	 
	Greater than US$[***]

	 	[***] percent ([***]%)

          For clarity, the [***] Supply Prices shall only be paid with respect to the applicable portion
of the Calendar Year Net Sales.

               (b) The Supply Price shall be calculated on a country-by-country basis during the period
commencing upon the date of First Commercial Sale in a country and ending upon the later of
expiration of (A) the last to expire Valid Claim of a Pharming Patent in such country or (B) any
additional data exclusivity period providing marketing exclusivity in the applicable country for
such Licensed Product (the “Supply Price Term”).

               (c) If, (i) at any time during the Term, a Third Party receives regulatory approval for and
commences commercial sale of a Generic Product in a country of the Territory or (ii) after
expiration of the Supply Price Term (the earlier to occur of clauses (i) and (ii), a “Reduction
Event”), and in the event Net Sales of Licensed Product by Santarus, its

 

			
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Affiliates and Sublicensees decline by more than [***] percent ([***]%) in any Calendar Quarter
after a Reduction Event when compared to the Calendar Quarter immediately preceding the
Reduction Event even though Santarus, its Affiliates or Sublicensees, as applicable, are then using
Commercially Reasonable Efforts, then Santarus shall have the right to reduce any payments due
under Section 8.1(a) for all future periods to an amount equal [***]. As used in this Section,
“Generic Product” means a Third Party product which contains Licensed Compound.

               (d) Any royalties due to Third Parties necessary for the manufacture, use, sale, offer for
sale or import of Licensed Product in the Field and in the Territory shall be borne solely by
Pharming, including any such royalties that may become due under the ACT Agreement or the GTC
Agreement.

               (e) In the event that the Supply Price is at or below the Threshold Price per Unit for a
period of [***] months (determined by dividing the applicable Supply Price by the Units sold in the
applicable period), the Parties shall meet and discuss any equitable adjustments in the Supply
Price for future periods. For purposes of this Section 8.1(e), “Threshold Price” means: [***]
Dollars ($[***]).

               (f) In the event that Santarus is supplying all or a part of Licensed Product for Development
or Commercialization (whether as a result of Santarus’ exercise of its rights under the Deed or
otherwise as permitted hereunder or under the Supply Agreement), then, in lieu of the royalty
provided for in Section 8.1(a) (as may be adjusted in accordance with Section 8.1), Santarus shall
pay to Pharming a royalty on Net Sales equal [***]. For the avoidance of doubt, in the event that
Pharming will resume supplying all or a part of Licensed Product for Development or
Commercialization, then for those Licensed Product that are supplied by Pharming the royalty as set
forth in Section 8.1 (a) (as may be adjusted in accordance with Section 8.1) shall be applicable
once more.

          8.2 Sales By Sublicensees. If Santarus grants a sublicense pursuant to Section 5.4 under the
rights granted to it hereunder, then such sublicense shall include an obligation for the
Sublicensee to account for and report its Net Sales of such Licensed Product on the same basis as
if such sales were Net Sales by Santarus, and Santarus shall pay the Supply Price to Pharming on
such sales as if the Net Sales of the Sublicensee were Net Sales of Santarus.

          8.3 Supply Price Reports and Payments. Santarus will deliver a report showing in detail its
calculation of the Net Sales of Licensed Product during a given Calendar Quarter to Pharming and
its calculation of the Supply Price due to Pharming, along with payment thereof in accordance with
Section 8.4. Such report and payment shall be provided to Pharming by Santarus within [***]
([***]) days following the end of each Calendar Quarter and [***]([***]) days following the end of
each Calendar Year for which Supply Price payments are due from Santarus.

          8.4 Manner and Place of Payment. All amounts paid to Pharming or

 

			
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Santarus hereunder shall be paid in U.S. currency. All payments due to Pharming or Santarus
under this Agreement shall be made by wire transfer at a bank and to an account designated by
the Party to whom payment is due, unless otherwise specified in writing by such Party. Unless
otherwise specified in this Agreement, payments due to Pharming or Santarus shall be payable within
[***] days following receipt of the applicable invoice.

          8.5 Record-Keeping.

               (a) During the Term, Santarus shall keep full and accurate books and records setting forth,
for Licensed Product on which Supply Price payments are due, gross sales, all deductions allowed in
arriving at Net Sales and any other information necessary and in sufficient detail to allow the
calculation of Supply Price payments to be made by Santarus, including COGS (if applicable).
During the Term and for a period of at least [***]([***]) years thereafter, Santarus shall permit
Pharming, at Pharming’s expense, by independent certified public accountants designated by Pharming
and reasonably acceptable to Santarus (the “Pharming Designated Auditor”), to examine relevant
books and records at any reasonable time, not more often than [***], within [***]([***]) years of
the payment of such Supply Price to the extent necessary to determine the accuracy of the Net Sales
reported and Supply Price payments made. If such examination results in a determination that Net
Sales or Supply Price payments owed to Pharming by Santarus have been overstated, overpaid amounts
due will be re-paid by Pharming to Santarus promptly and underpaid amounts due will be paid by
Santarus to Pharming promptly. The fees and expenses of such Pharming Designated Auditor will be
paid by Pharming unless Net Sales have been understated, or payments owed to Pharming by Santarus
have been underpaid, by more than [***] percent ([***]%) for the period examined, in which case
Santarus will pay all reasonable costs and expenses of the Pharming Designated Auditor incurred by
Pharming in the course of making such determination. The Pharming Designated Auditor will report
its findings to Santarus and Pharming (provided that Pharming shall only receive the Pharming
Designated Auditor’s conclusions as to whether Santarus is in compliance with its payment
obligations and the amount of any underpayment or overpayment), and such report and the conclusions
contained therein will constitute Santarus Confidential Information.

               (b) During the Term, Pharming shall (and shall cause its contract manufacturers and any other
Third Party suppliers to) keep full and accurate books and records related to the calculation of
COGs including any information necessary and in sufficient detail to allow the calculation of COGs.
During the Term and for a period of at least [***] ([***]) years thereafter, Pharming shall permit
Santarus, at Santarus’ expense, by independent certified public accountants designated by Santarus
and reasonably acceptable to Pharming (the “Santarus Designated Auditor”), to examine relevant
books and records at any reasonable time, not more often than [***], within [***]([***]) years of
the calculation of such COGs. If such examination results in a determination that COGs has been
overstated, overpaid amounts due will be re-paid by Pharming to Santarus promptly and underpaid
amounts due will be paid by Santarus to Pharming promptly. The fees and expenses of such Santarus
Designated Auditor will be paid by Santarus unless COGs has been overstated by more than [***]
percent ([***]%) for the period

 

			
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23

 

examined, in which case Pharming will pay all reasonable costs and expenses of the Santarus
Designated Auditor incurred by Santarus in the course of making such determination. The
Santarus Designated Auditor will report its findings to Santarus and Pharming (provided that
Santarus shall only receive the Santarus Designated Auditor’s conclusions as to whether Pharming is
in compliance on its calculations of COGs and the amount of any underpayment or overpayment), and
such report and the conclusions contained therein will constitute Pharming Confidential
Information.

          8.6 Tax and Withholdings. Any withholding taxes levied by tax authorities in the Territory on
the payments hereunder (other than taxes on Santarus’ sales or income) shall be borne by Pharming
and deducted by Santarus from the sums otherwise payable by it hereunder for payment to the proper
tax authorities on behalf of Pharming. In such event, Santarus shall deliver to Pharming evidence
of the payment of such taxes. Santarus agrees to cooperate with Pharming in the event Pharming
claims exemption from such withholding or seeks deductions under any double taxation or other
similar treaty or agreement from time to time in force.

ARTICLE 9

CONFIDENTIALITY

          9.1 Confidentiality; Exceptions. Except to the extent expressly authorized by this Agreement
or otherwise agreed in writing, the Parties agree that, for the Term and for [***]([***]) years
thereafter, the receiving Party shall keep confidential and shall not publish or otherwise disclose
or use for any purpose other than as provided for in this Agreement any Information and other
information and materials furnished to it by the other Party pursuant to this Agreement, or any
provisions of this Agreement that are the subject of an effective order of the Securities and
Exchange Commission granting confidential treatment pursuant to the Securities Act of 1934, as
amended (collectively, “Confidential Information”), except to the extent that it can be established
by the receiving Party that such Confidential Information:

               (a) was already known to the receiving Party, other than under an obligation of
confidentiality, at the time of disclosure by the other Party;

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

               (c) became generally available to the public or otherwise part of the public domain after its
disclosure and other than through any act or omission of the receiving Party in breach of this
Agreement; or

               (d) was disclosed to the receiving Party, other than under an obligation of confidentiality,
by a Third Party who had no obligation to the disclosing Party not to disclose such information to
others.

          9.2 Authorized Disclosure. Subject to Section 3.4(e), each Party may

 

			
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disclose Confidential Information hereunder to the extent such disclosure is reasonably necessary
in filing or prosecuting Patent applications, prosecuting or defending litigation, complying
with applicable governmental regulations, conducting preclinical or clinical trials or filing or
obtaining Regulatory Approval or Manufacturing Approvals; provided that if a Party is required by
law or regulation to make any such disclosure of the other Party’s Confidential Information it
will, except where impracticable for necessary disclosures (for example in the event of medical
emergency), give reasonable advance notice to the other Party of such disclosure requirement and,
except to the extent inappropriate in the case of patent applications, will use its best efforts to
secure confidential treatment of such Confidential Information required to be disclosed. In
addition, each Party shall be entitled to disclose Confidential Information to any Third Party for
the purpose of carrying out activities authorized under this Agreement, including disclosures to
Sublicensees, provided such Third Parties and Sublicensees are subject to confidentiality
obligations similar to those contained herein. Nothing in this Article 9 shall restrict any Party
from using for any purpose any Information developed by it during the course of the collaboration
hereunder. Pharming acknowledges that Santarus will be required to file a copy of this Agreement
with the U.S. Securities and Exchange Commission, with such redactions as permitted by the U.S.
Securities and Exchange Commission.

          9.3 Survival. This Article 9 shall survive the termination or expiration of this Agreement
for a period of [***] ([***]) years.

          9.4 Termination of Prior Agreements. This Agreement supersedes the Mutual Confidentiality
Agreement between Pharming and Santarus dated July 15, 2009, as well as the additional
confidentiality agreements dated October 19, 2009 between various Santarus employees and
consultants and Pharming (the “Prior Agreements”). All Information exchanged between the Parties
under the Prior Agreements shall be deemed Confidential Information and shall be subject to the
terms of this Article 9, and shall be included within the definitions of Pharming Know-How and
Santarus Know-How.

          9.5 Press Releases. The Parties shall agree on a press release to announce the execution of
this Agreement and the Supply Agreement, together with a corresponding Q&A outline for use in
responding to inquiries about the Agreement and the Supply Agreement. Prior to issuing additional
press releases related to this Agreement, the Supply Agreement or the subject matter of each of the
agreements that contain information not previously disclosed as permitted hereunder, the Party
preparing such release shall provide the other Party with reasonable advance notice and an
opportunity to review and comment on the proposed release.

          9.6 Publications. Except as required by law, each Party agrees that it shall not publish or
present Information relating to Licensed Product in scientific forums without providing to the
other Party the opportunity for prior review of such publication or presentation. The Party
desiring to publish or present such Information (the “Proposing Party”) shall provide to the other
Party the opportunity to review such proposed publication or presentation (including information to
be presented verbally) as early as reasonably practical, but not later than [***] ([***]) days
prior to the anticipated date of submission or disclosure to a Third Party. The Party

 

			
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reviewing such publication or presentation shall respond to the Proposing Party with comments
thereon within [***]([***]) days of receiving such materials from the Proposing Party. The
Proposing Party agrees, upon written request from the other Party, not to submit such abstract or
manuscript for publication or to make such presentation until the other Party consents, which
agreement shall not be unreasonably withheld.

ARTICLE 10

INTELLECTUAL PROPERTY

          10.1 Inventions. With respect to inventions and intellectual property arising during the course
of, or as a result of, each Party’s performance under this Agreement, and without regard to
inventorship, (i) title to all inventions and intellectual property (A) made by Pharming employees
or its agents hereunder or (B) that are derived from the Pharming Patents or Pharming Know-How as
of the Effective Date (each a “Pharming Invention”) shall be solely owned by Pharming, (ii) title
to all inventions and intellectual property made by Santarus employees or its agents hereunder
other than inventions or intellectual property that are derived from the Pharming Intellectual
Property as of the Effective Date (each a “Santarus Invention”)
 shall be solely owned by
Santarus, and (iii) title to all inventions and intellectual property made jointly by Pharming
employees or agents and Santarus employees or agents other than a Pharming Invention shall be
jointly owned (each a “Joint Invention”).

          10.2 Patent Coordination. Without limiting the provisions of this Article 10, the Parties
agree to confer from time to time, as either Party may reasonably request, to discuss appropriate
activities and strategies for protecting and enforcing their respective Patents and other
intellectual property licensed hereunder, as may mutually benefit both Parties.

          10.3 Prosecution of Patents. As between the Parties, Pharming shall remain the sole owner of
the Pharming Patents, the Manufacturing Patents, the Step-In Patents, the ACT Patents and the GTC
Patents.

               (a) Pharming Patents. Pharming shall remain responsible for preparing, filing, prosecuting,
handling any interferences, re-examinations or reissues, and otherwise maintaining the Pharming
Patents, the Manufacturing Patents and the Step-In Patents during the Term. Pharming shall not
abandon any Pharming Patent in any jurisdiction in the Territory, unless agreed otherwise between
the Parties on a case-by-case basis pursuant to Section 10.2, or unless prosecution has been
terminated by a patent granting authority in such jurisdiction. Pharming shall keep Santarus
reasonably and timely informed regarding patent applications within the Pharming Patents related to
Licensed Product or Licensed Compound or their manufacture or use, that are being prosecuted in
countries within the Territory, and Pharming shall provide to Santarus (or its designated counsel)
copies of such patent application files and shall provide to Santarus (or its designated counsel)
all office actions relating to those patent applications, and copies of material correspondence
with the various patent offices in the Territory relating to the Pharming Patents to the extent
they relate to Licensed Product or Licensed Compound. Santarus shall have the right to advise and
comment upon the prosecution

 

			
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of patent applications within the Pharming Patents. Pharming shall, in good faith, consider and
incorporate such advice and comments of Santarus to the extent reasonably acceptable to
Pharming. Upon request of Santarus, the Parties shall discuss in good faith the filing of any
continuation, continuation-in-part, or divisional to any patent or patent application within the
Pharming Patents to be filed in the Territory beyond those Pharming may elect to file, which
continuation, continuation-in-part or divisional relates to Licensed Product, Licensed Compound
and/or their manufacture or use. In the event that Pharming determines not to continue the
prosecution of any Pharming Patents in the Territory, it shall provide notice to Santarus in
sufficient time to permit Santarus to determine whether it wishes to continue such prosecution. If
Santarus desires to continue such prosecution, it shall notify Pharming in writing, and thereafter
assume the prosecution and maintenance of such Pharming Patents. Pharming shall cooperate in such
continued prosecution and Santarus shall bear all costs associated with such continued prosecution.

               (b) ACT Patents. If Pharming receives notice from ACT that it intends to abandon an ACT
Patent in the Territory, Pharming shall provide written notice to Santarus within three (3)
Business Days of its receipt of any such notice. Pharming may not consent to such abandonment of
an ACT Patent by ACT unless Santarus gives its prior written consent, not to be unreasonably
withheld.

               (c) GTC Patents. If Pharming receives notice from GTC that it intends to abandon a GTC
Patent in the Territory, Pharming shall provide written notice to Santarus within three (3)
Business Days of its receipt of any such notice. Pharming and Santarus shall consult on the
advisability or necessity of Pharming assuming the preparation, filing, prosecution and maintenance
of such GTC Patent (as permitted under Section 5.1 of the GTC Agreement). If Santarus requests
that Pharming exercise its rights under Section 5.1 of the GTC Agreement, Pharming shall do so and
thereafter, Section 10.3(a) shall apply with respect to such GTC Patent.

               (d) Joint Patents. The Parties will determine in good faith responsibility for filing,
prosecuting and maintaining any Patent Rights relating to Joint Inventions (each a “Joint Patent”).

          10.4 Enforcement of Patents.

               (a) Each Party shall promptly notify the other in writing of any actual or suspected
infringement of any Pharming Patents, ACT Patents or GTC Patents in the Territory (including via
unauthorized importation into the Territory for sale in the Territory), of any actual or suspected
infringement of any Manufacturing Patents or upon receiving notification that a Pharming Patent,
ACT Patent or GTC Patents is subject to a declaratory judgment action alleging non-infringement,
invalidity or unenforceability, which notification shall specify in reasonable detail the nature of
such actual or suspected infringement or judicial action.

               (b)

                    (i) Unless the Parties otherwise mutually agree, Santarus shall have the initial right, using
counsel of its choice, to enforce the Pharming Patents in the Territory

27

 

or defend any declaratory action with respect thereto, at its expense, (and Pharming shall provide
all reasonable assistance to Santarus for such action, including joining such action if
necessary to maintain such action). However, if, (A) within [***] ([***]) days ([***]([***]) days
with respect to Pharming Patents PH001 and PH006) following a written request by Pharming to do so
and confirmation of facts reasonably supporting existence of such actual or suspected infringement,
Santarus fails to bring an infringement suit or take other commercially reasonable action to
protect the Pharming Patents from such infringement, or to abate such infringement and/or (B)
Santarus elects not to defend, or continue defending, a declaratory judgment action regarding the
Pharming Patents, in each case arising from an infringement or threatened infringement with respect
to Licensed Product, Licensed Compound and/or their manufacture or use in the Territory, then
Pharming shall have the right to institute such suit or take other appropriate action in the name
of either itself or both Parties using counsel of its choice, at its own expense, and with the
right to control the course of such action (and Santarus shall provide all reasonable assistance to
Pharming for such action).

                    (ii) With respect to the Manufacturing Patents and the Step-In Patents, Pharming shall keep
Santarus reasonably informed regarding enforcement or defense of any declaratory action with
respect to such Manufacturing Patents and Step-In Patents and Santarus shall have reasonable
step-in rights with regard to enforcement of the Step-In Patents to the extent that neither
Pharming nor its other sublicensees of such Patents are not diligently pursuing enforcement thereof
but only insofar as Pharming has retained enforcement or defense rights thereto.

                    (iii) With respect to the ACT Patents, Pharming and Santarus shall consult with each other and
determine whether Pharming is to proceed with respect to the enforcement or defense of any
declaratory action with respect to such ACT Patents within [***] ([***]) days of the receipt by
Pharming of any such notice. Pharming shall proceed in such enforcement or defense if Santarus
requests that it do so and thereafter, Sections 7.2 through Section 7.7 of the ACT Agreement shall
apply.

                    (iv) With respect to the GTC Patents, Pharming and Santarus shall consult with each other and
determine whether Pharming is to proceed with respect to the enforcement or defense of any
declaratory action with respect to such GTC Patents within [***] ([***]) days of the receipt by
Pharming of any such notice. Pharming shall proceed in such enforcement or defense if Santarus
requests that it do so and thereafter, Sections 5.3(a) and 5.4(b) of the GTC Agreement shall apply.

               (c) In the event that either Party recovers any amounts from any litigation or settlement
pursuant to Section 10.4(b)(i), (iii) or (iv) or 10.4(e), such amounts shall first be applied to
reimburse the Parties for their respective Costs, or equitable proportions thereof. Any amounts
remaining thereafter shall be distributed [***] percent ([***]%) to the Party initiating and
leading such action and [***] percent ([***]%) to the other Party, or as the Parties may otherwise
agree in writing. Notwithstanding the foregoing, any recoveries with respect to the ACT Patents or
the GTC Patents shall be governed by the applicable provisions in

 

			
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the ACT Agreement or the GTC Agreement, as the case may be.

               (d) In no case may Santarus enter into any settlement or consent judgment or other voluntary
final disposition that: (i) extends, or purports to exercise, Santarus’ rights under the Pharming
Intellectual Property or otherwise under this Agreement beyond the rights granted pursuant to this
Agreement, (ii) makes any admission regarding wrongdoing by Pharming, or the invalidity,
unenforceability or absence of infringement of any Pharming Patents; (iii) subjects Pharming to an
injunction or other equitable relief; or (iv) obligates Pharming to make a monetary payment; in all
cases without the prior written consent of Pharming, which consent shall not be unreasonably
withheld or delayed. Similarly, in no case may Pharming enter into any settlement or consent
judgment or other voluntary final disposition that: (1) limits Santarus’ rights under the Pharming
Intellectual Property otherwise under this Agreement other than as expressly stated herein; (2)
makes any admission regarding wrongdoing on the part of Santarus or a Sublicensee, or the
invalidity, unenforceability or absence of infringement of any Pharming Patents; (3) subjects
Santarus to an injunction or other equitable relief; or (4) obligates Santarus to make a monetary
payment; in all cases without the prior written consent of Santarus, which consent shall not be
unreasonably withheld or delayed.

               (e) Notwithstanding the provisions of Section 10.4(b), in the event of a notice received by
Santarus or Pharming with respect to Licensed Product under Paragraph IV of the Hatch-Waxman Act,
Section 7002 of the Patient Protection and Affordable Care Act or any successor regulations
(“Paragraph IV Notice”), (i) the receiving Party shall promptly provide the other Party with notice
of such Paragraph IV Notice, (ii) Santarus shall have the initial right to institute an action for
infringement in connection with such Paragraph IV Notice, at Santarus’ expense, and shall provide
Pharming with notice of whether it intends to institute such infringement suit within [***]([***])
days of receipt of the Paragraph IV Notice and (ii) if Santarus provides notice to Pharming in such
period that Santarus will not institute an infringement suit or provides no notice in such period,
then Pharming shall have the right to institute an infringement suit in such matter, at Pharming’s
expense. In any such proceeding, the provisions set forth in Sections 10.4(b) and 10.4(c) above
with respect to cooperation and allocation of recoveries shall apply, and the provisions of Section
10.4(d) shall also apply.

               (f) If the manufacture, sale or use of Licensed Product or Licensed Compound in the Field
pursuant to this Agreement results in any claim, suit or proceeding in the Territory alleging
patent infringement against Santarus or Pharming, then Sections 10.4(b) and 10.4(d) shall apply to
any associated litigation and to each Party’s ability to enter into any settlement or consent
judgment or other voluntary final disposition with respect thereto.

          10.5 Product Trademarks. Following the receipt of Regulatory Approval to market and sell
the first Licensed Product in the Territory, Santarus and Pharming shall discuss the transfer of
ownership to Santarus of the Product Trademarks in the Territory (and any associated amendments
to this Agreement to reflect such transfer). Until such transfer, Pharming shall file and
maintain trademark applications for the Product Trademarks in the Territory during the Term, and
will file (in Pharming’s name) new trademark applications in

 

			
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the Territory that incorporate the
Product Trademarks upon the reasonable request of Santarus and at Santarus’ expense. Throughout
the Term, Santarus shall have the right to
Commercialize Licensed Product under the Product Trademark. In addition, the Parties shall
mutually consent to one or more alternative trademarks to be used by Santarus in Commercializing
Licensed Product, such consent not to be unreasonably withheld or delayed.

          10.6 Enforcement of Product Marks. In the event either Party becomes aware of any actual or
threatened infringement or misappropriation of a Product Trademark by a Third Party in the Field
in the Territory, such Party shall promptly notify the other Party, and the Parties shall consult
with each other in good faith to determine jointly the best way to prevent such infringement,
including, without limitation, by instituting legal proceedings against such Third Party.
Santarus shall have the first right, but not obligation, at its own expense, to enforce rights in
the Product Trademarks against any Third Party infringer or alleged infringer. In the event that
Santarus does not elect to undertake such enforcement within [***] ([***]) days following a
written request by Pharming to do so and confirmation of facts reasonably supporting existence of
such actual or threatened infringement or misappropriation, then Pharming shall have the right to
undertake and control such enforcement of the Product Trademark in the Field in the Territory.
If either Party so desires, it may, at its own expense, join an action instituted by the other
Party, and the other Party shall not oppose any such attempt. Any and all amounts recovered with
respect to such an action shall be applied first to reimburse the Parties for their Costs in
prosecuting such infringement or misappropriation, or equitable portions thereof. The remainder
shall be divided between the Parties with [***] percent ([***]%) to the Party paying for such
action and [***] percent ([***]%) to the other Party. The Parties shall keep one another
reasonably informed of the status of, and of their respective activities regarding, any
litigation or settlement thereof concerning Product Trademarks in the Territory. Either Party’s
ability to enter into a settlement or consent judgment or other voluntary final disposition of
such matter shall be limited in the same manner as under Section 10.4(d).

          10.7 Domain Names. Before using a domain name with a country code in the Territory with
respect to Licensed Product in the Field in the Territory, Pharming and Santarus shall agree as
to the general design of the homepage of such domain name (the Parties accepting that the layout
of each homepage may need to vary on a country by country basis to comply with applicable laws),
such agreement not to be unreasonably withheld or delayed. As between the Parties, Santarus shall
own and shall register all domain names with a country code in the Territory that incorporate a
Product Trademark in its own name and at its own cost and shall be responsible for the
maintenance of such domain names at its own cost. For clarity, enforcement procedures are
addressed in Section 10.6.

ARTICLE 11

TERM AND TERMINATION

          11.1 Term. Except as otherwise provided herein, the term of this Agreement (the “Term”)
shall commence on the Effective Date and, unless earlier terminated as provided

 

			
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in this Article 11, shall expire upon the date on which Santarus no longer offers Licensed Product for sale in
the Territory.

          11.2 Termination for Cause. Either Party may terminate this Agreement upon one hundred
twenty (120) days prior written notice upon or following the breach of any material provision of
this Agreement by the other Party if the breaching Party has not cured such breach within the one
hundred twenty (120) day period following written notice of termination by the other Party.

          11.3 Other Termination by Santarus. Santarus may terminate this Agreement in its entirety
at will at any time during the Term, effective upon twelve (12) months’ prior written notice to
Pharming.

          11.4 Termination for Insolvency. Upon the filing or institution of bankruptcy,
reorganization, liquidation or receivership proceedings, or upon an assignment of a substantial
portion of the assets for the benefit of creditors by a Party, or in the event a receiver or
custodian is appointed for such Party’s business, or if a substantial portion of such Party’s
business is subject to attachment or similar process, then the other Party may terminate this
Agreement; provided, however, that in the case of any involuntary bankruptcy proceeding such
right to terminate shall only become effective if the proceeding is not dismissed within sixty
(60) days after the filing thereof. All licenses granted under this Agreement are deemed to be,
for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to “intellectual
property” as defined in Section 101 of such Code.

          11.5 Effect of Termination.

               (a) Upon termination of this Agreement by Pharming pursuant to Section 11.2 or 11.4 or by
Santarus pursuant to Section 11.3, the following provisions shall apply:

                    (i) all rights and licenses granted to Santarus with respect to the Licensed Product shall
terminate, subject to Section 5.4(c);

                    (ii) Santarus shall pay all sums accrued hereunder which are then due (except as expressly
otherwise provided in this Agreement);

                    (iii) Santarus shall promptly assign to Pharming all of its right, title and interest in and
to any regulatory filings in the Territory pertaining to Licensed Product and shall deliver to
Pharming any Santarus Information necessary to obtain the Regulatory Approval of Licensed Product
in the Territory which has not been obtained as of the date of termination;

                    (iv) Santarus shall promptly assign to Pharming all of its right, title and interest in and to
any domain names in the Territory included in the Product Trademarks;

 

			

31

 

                    (v) the Supply Agreement shall terminate; and

                    (vi) Santarus shall return to Pharming, or at Pharming’s request destroy, all Pharming
Information and any other Confidential Information relating to Licensed Compound or Licensed
Product, and Licensed Product supplied by Pharming for clinical development or commercial
distribution;

               (b) Upon termination of this Agreement by Santarus pursuant to Section 11.2 or 11.4, the
following provisions shall apply:

                    (i) all licenses granted to Santarus shall survive, and Santarus shall have the right to
reduce any payments due under Section 8.1(a) for all future periods to an amount equal to “A” (as
defined below) plus either (i) COGs for the applicable period if Pharming is supplying all or a
part of Santarus’, its Affiliates’ and Sublicensees’ requirements of Licensed Product in the
Territory or ii) without adding COGs if Santarus is supplying Licensed Product (whether as a result
of Santarus’ exercise of its rights under the Deed or otherwise as permitted hereunder or under the
Supply Agreement). For this Section 11.5(b), “A” shall mean: the Supply Price minus COGs for the
applicable period MULTIPLIED BY 0.50. Any amounts payable under this Section 11.5(b) are also
subject to the provisions of Sections 8.2 through 8.6;

                    (ii) Pharming shall return to Santarus, or at Santarus’ request destroy, all Santarus
Information and any other Confidential Information relating to Licensed Compound or Licensed
Product in the Field and in the Territory;

                    (iii) The Supply Agreement shall remain in full force and effect according to its terms; and

                    (iv) Upon Santarus’ request, Pharming shall provide such technical assistance as needed by
Santarus to commence manufacture of Licensed Compound and Licensed Product, at Pharming’s sole cost
and expense, as more fully set forth in the Supply Agreement.

          11.6 Termination Not Sole Remedy. Termination is not the sole remedy under this Agreement
and, whether or not termination is effected, all other remedies at equity or law shall remain
available to the Parties except as agreed to otherwise herein.

          11.7 Accrued Rights, Surviving Obligations. Except as otherwise expressly set forth herein,
no additional payment obligations arising under this Agreement shall accrue after the date of
expiration or termination of this Agreement; provided, however, that expiration or termination of
this Agreement shall not affect any rights and remedies of either Party accruing prior to such
expiration or termination. The terms of Article 9 of this Agreement shall survive ten (10) years
after termination or expiration of this Agreement and Sections 3.1 (solely with respect to
allocation and payment of costs, including cost-sharing), 3.2 (solely with respect to allocation
and payment of costs, including cost-sharing), 8.5, 8.6, 10.1, 10.4 (in so far as Santarus still
has a right to use such patents), 10.6 (in so far as Santarus still has a right to use the
Product Trademarks), 11.5, 15.2 through 15.14 and Articles 13 and

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14 (in so far as set forth in
that Section of this Agreement) of this Agreement shall survive any termination or expiration of
this Agreement. In addition, any other provisions which are
required to interpret and enforce the Parties’ rights and obligations under this Agreement
shall also survive any termination or expiration of this Agreement, but only to the extent
required for the full observation and performance of this Agreement, as well as any other
provisions of this Agreement which survive any termination or expiration of this Agreement as
described in Section 11.5.

ARTICLE 12

REPRESENTATIONS AND WARRANTIES

          12.1 Mutual Representations and Warranties. Each Party hereby represents and warrants:

               (a) Such Party is duly organized and validly existing under the laws of the state or country
of its incorporation and has full corporate power and authority to enter into this Agreement and
the Supply Agreement to carry out the provisions hereof and thereof.

               (b) Such Party is duly authorized to execute and deliver this Agreement and the Supply
Agreement and to perform its obligations hereunder and thereunder.

               (c) Each of this Agreement and the Supply Agreement is a legal and valid obligation binding
upon it and enforceable in accordance with its terms. The execution, delivery and performance of
this Agreement and the Supply Agreement by such Party 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 law or regulation of any court, governmental body or administrative or other agency
having jurisdiction over it.

               (d) Such Party will exercise its rights and perform its obligations under this Agreement and
the Supply Agreement in compliance in all material respects with applicable laws, rules and
regulations.

               (e) Such Party is not currently debarred, suspended or otherwise excluded by the FDA or any
other regulatory authority from conducting business and shall not knowingly use in connection with
this Agreement or the Supply Agreement the services of any Person debarred by the FDA.

          12.2 Additional Representations by Pharming. Pharming hereby further represents and
warrants:

               (a)

                    (i) Pharming owns or Controls all rights necessary to grant the rights Pharming purports to
grant to Santarus pursuant to this Agreement, the Supply Agreement and the Deed.

33

 

                    (ii) Pharming owns or Controls all right, title and interest in, to and under the Pharming
Intellectual Property and the Step-In Patents, free and clear of all liens,
security interests, charges, encumbrances or other adverse claims (“Encumbrances”) and has the
right to use the Pharming Intellectual Property without payment to a Third Party, other than an
exclusive license and an existing right of usufruct on the Step-In Patents for the benefit of a
Third Party. The right of usufruct on the Step-In Patents for the manufacture of Licensed Products
provided in the Deed to Santarus is equal in priority (and not subordinate) to such existing right
of usufruct for the benefit of such Third Party. The assignment records in the United States
Patent and Trademark Office accurately reflect that the Patents included in the Pharming
Intellectual Property are free and clear of any Encumbrances.

                    (iii) All maintenance fees and annual payments due for the Pharming Patents, the Step-In
Patents and the Product Trademarks have been paid and, to the knowledge of Pharming, all
maintenance fees and annual payments due for the ACT Patents and the GTC Patents have been paid.

               (b) Pharming has not, and during the Term will not, grant any right to any Third Party with
respect to the Pharming Intellectual Property or the Step-In Patents or otherwise that would
conflict with its obligations hereunder or under the Supply Agreement or the Deed or the rights
granted to Santarus hereunder or thereunder..

               (c) To the knowledge of Pharming, no Third Party has infringed upon the Pharming Intellectual
Property or the Step-In Patents. There is no pending or, to the knowledge of Pharming, threatened
action, suit, proceeding or claim by others challenging Pharming’s or any Affiliate’s rights in or
to, or the validity, ownership or scope of, any Pharming Intellectual Property or the Step-In
Patents, nor, to the knowledge of Pharming, do there exist any facts which would form a reasonable
basis for any such claim.

               (d) To the knowledge of Pharming, neither Pharming nor any Affiliate nor any existing
sublicensee has infringed, is infringing upon, or is otherwise in conflict with the intellectual
property rights of any Third Party. None of Pharming nor any Affiliate nor any existing
sublicensee has received any notice that it has or may have infringed, is infringing upon, or is in
conflict with the intellectual property rights of any Third Party. There is no pending or, to the
knowledge of Pharming, threatened action, suit, proceeding or claim by any Third Party alleging
that Pharming or any Affiliate or any existing sublicensee infringes, is in conflict with or
otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of
others, nor, to the knowledge of Pharming, do there exist any facts which would form a reasonable
basis for any such claim. The development, manufacture and sale of Licensed Product as
contemplated under this Agreement and the Supply Agreement do not and will not infringe the
intellectual property rights of any Third Party,

               (e) None of Pharming or any Affiliate is obligated or under any liability whatsoever to make
any payment by way of royalties, fees or otherwise to any owner or licensee of or other claimant
to, intellectual property rights not owned or controlled by Pharming or such Affiliate in
connection with Licensed Product, Licensed Compound or the manufacture

34

 

and/or use thereof.

               (f) None of the Pharming Intellectual Property is unenforceable or invalid, and Pharming is
unaware of any facts which would form a reasonable basis for any claim that the Patent applications
owned or licensed by Pharming would be unenforceable or invalid if issued as Patents. None of the
Pharming Intellectual Property has been obtained through any fraudulent activity or
misrepresentation. There are no oppositions or interferences concerning the Pharming Intellectual
Property pending before any governmental agency.

               (g) Pharming has taken reasonable security measures to protect the secrecy, confidentiality
and value of all material proprietary technical information developed by and belonging to Pharming
which has not been patented.

               (h) There is no pending or, to the knowledge of Pharming, threatened action, suit, proceeding
or claim by others relating to Licensed Product, Licensed Compound or the manufacture and/or use
thereof or Pharming’s ability to enter into this Agreement, the Supply Agreement or the Deed, nor,
to the knowledge of Pharming, do there exist any facts which would form a reasonable basis for any
such claim.

               (i) The data regarding the efficacy and safety of Licensed Product that is contained in the
regulatory filings submitted to the FDA or foreign regulatory authorities is complete and accurate
in all material respects, does not contain a misstatement of a material fact related to safety and
efficacy nor omit to state any material fact in Pharming’s possession related to safety or
efficacy.

               (j) Pharming has provided to Santarus true and complete copies of all of its agreements, as of
the Effective Date, with Third Parties (redacted for certain commercial details, which Pharming
hereby confirms are not material to the transaction or rights contemplated hereunder or under the
Supply Agreement or the Deed) related to (1) the manufacturing, processing, packaging, testing,
storage and supply of Licensed Product (other than quality agreements), or (2) Pharming
Intellectual Property, all of which agreements are listed on Exhibit 12.2(j) attached
hereto (collectively, the “Third Party Agreements”). Each of the Third Party Agreements is in full
force and effect, and Pharming shall not amend, modify or supplement, or permit the termination or
expiration of, any Third Party Agreement, in a manner which adversely affects the rights granted to
Santarus hereunder without the prior written consent of Santarus, not to be unreasonably withheld.
In addition, Pharming shall not sell, assign, convey, pledge, hypothecate or otherwise transfer any
Third Party Agreement or Pharming’s rights or obligations thereunder, or otherwise make any
commitments or offers in a manner that conflicts with Santarus’ rights hereunder without the prior
written consent of Santarus.

               (k) No royalties shall be payable to any Third Party as a result of Santarus (or any permitted
Sublicensee) exercising the rights granted to it by Pharming hereunder.

               (l) The ACT Patents are all the Patents in the Territory licensed to Pharming by ACT with
claims covering Licensed Compound or Licensed Product; the GTC

35

 

Patents are all the Patents in the Territory licensed to Pharming by GTC with claims covering
Licensed Compound or Licensed Product.

               (m) Pharming has not omitted to furnish Santarus with any information requested by Santarus,
nor intentionally concealed from Santarus, any information in its possession relating to Licensed
Product, Licensed Compound or the manufacture or use thereof, including clinical, regulatory and
safety data.

          12.3 Additional Covenants of Pharming.

               (a) Pharming shall promptly provide to Santarus true and complete copies of all agreements
entered into with Third Parties following the Effective Date related to (1) the manufacturing,
processing, packaging, testing, storage and supply of Licensed Product (other than quality
agreements), or (2) Pharming Intellectual Property. Each such agreement shall be deemed a Third
Party Agreement for all purposes under this Agreement, including the limitations on amendment,
modification, supplement or termination of such agreements as set forth in Section 12.2(j).

               (b) Pharming hereby represents, warrants and covenants that it has no knowledge of any
bankruptcy, insolvency, reorganization or liquidation laws, notices of foreclosure and/or default,
regulations or proceedings that would preclude Santarus from practicing the licenses granted to it
hereunder (or rights of usufruct under the Deed) throughout the Term, and that it shall use its
best efforts to protect Santarus’ interest with respect thereto throughout the Term, including
making all appropriate registrations of any relevant licenses or Deed with all appropriate
authorities.

               (c) Throughout the Term, Pharming shall maintain the Pharming Intellectual Property and the
Step-In Patents free and clear of all Encumbrances which could reasonably be expected to limit the
rights of Santarus hereunder or under the Supply Agreement or the Deed.

          12.4 Mutual Covenants of the Parties. Throughout the Term, Pharming and Santarus will
provide notice to the other Party in the event it reasonably anticipates not making a payment
related to the Licensed Product that has an impact or will cause delays in the Development,
conduct of the C1-1310 Study and/or Commercialization. Following delivery of such notice, the
Parties shall discuss resolution of the situation so as to avoid any adverse impact on the
Development, conduct of the C1-1310 Study and/or Commercialization.

          12.5 Disclaimer of Warranties. EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT OR IN
THE SUPPLY AGREEMENT, PHARMING AND SANTARUS EXPRESSLY DISCLAIM ANY WARRANTIES OR CONDITIONS,
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.

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ARTICLE 13

INDEMNIFICATION

          13.1 Indemnification by Pharming. Pharming hereby agrees to indemnify, hold harmless and
defend Santarus, its Affiliates, and their respective officers, directors, trustees, agents,
employees and Sublicensees (collectively, “Santarus Indemnitees”) against any and all expenses,
costs of defense (including witness fees, damages, judgments, fines and amounts paid in
settlement and reasonable attorneys’ fees) and any amounts any Santarus Indemnitee becomes
legally obligated to pay because of any Third Party claim or claims against it to the extent that
such claim or claims result from (i) Pharming’s negligence, recklessness or willful misconduct,
(ii) Pharming’s breach or alleged breach of any representation or warranty by Pharming or of any
other provision of this Agreement or the Supply Agreement, (iii) the possession, manufacture,
use, handling, storage, sale or other disposition of Licensed Product or of products containing
Licensed Compound by Pharming or Pharming’s Affiliates, its agents or licensees or sublicensees
(other than Santarus) or Third Party Contractors, or (iv) the breach or alleged breach by
Pharming of any provision of any Third Party Agreement, except to the extent such claim or claims
arise from the negligence, recklessness or willful misconduct of Santarus or any breach of any
representation or warranty of Santarus made pursuant to this Agreement or the Supply Agreement.

          13.2 Indemnification by Santarus. Santarus hereby agrees to indemnify, hold harmless and defend
Pharming its Affiliates, and their respective officers, directors, trustees, agents and employees
(collectively, “Pharming Indemnitees”) against any and all expenses, costs of defense (including
witness fees, damages, judgments, fines and amounts paid in settlement and reasonable attorneys’
fees) and any amounts any Pharming Indemnitee becomes legally obligated to pay because of any
Third Party claim or claims against it to the extent that such claim or claims arise out of (i)
Santarus’ negligence, recklessness or willful misconduct, (ii) Santarus’ breach or alleged breach
of any representation or warranty by Santarus or of any other provision of this Agreement or the
Supply Agreement, (iii) the possession, manufacture, use, handling, storage, sale or other
disposition of Licensed Product by Santarus or Santarus’ Affiliates or Sublicensees, except to
the extent such claim or claims arise from the negligence, recklessness or willful misconduct of
Pharming or any breach of any representation or warranty of Pharming made pursuant to this
Agreement or the Supply Agreement; provided that such indemnification obligations shall not apply
to losses resulting from Pharming matters covered under Section 13.1 above.

          13.3 Mechanics. A Person entitled to indemnification pursuant to either Section 13.1 or
Section 13.2 will hereinafter be referred to as an “Indemnitee.” A Party obligated to indemnify
an Indemnitee hereunder will hereinafter be referred to as an “Indemnitor.” In the event an
Indemnitee is seeking indemnification under either Section 13.1 or Section 13.2, the Indemnitee
will inform the Indemnitor of a claim as soon as reasonably practicable after it receives notice
of the claim, it being understood and agreed that the failure by an Indemnitee to give notice of
a Third Party claim as provided in this Section 13.3 will not relieve the Indemnitor of its
indemnification obligation under this Agreement

37

 

except and only to the extent that such Indemnitor is actually prejudiced as a result of
such failure to give notice. The Indemnitee will permit the Indemnitor to assume direction and
control of the defense of the claim (including, subject to this Section 13.3, the right to settle
the claim solely for monetary consideration), and, at the Indemnitor’s expense, will co-operate
as reasonably requested in the defense of the claim. The Indemnitee will have the right to
retain its own counsel at its own expense; provided, that, if the Indemnitor assumes control of
such defense and the Indemnitee reasonably concludes, based on advice from counsel, that the
Indemnitor and the Indemnitee have conflicting interests with respect to such action, suit,
proceeding or claim, the Indemnitor will be responsible for the reasonable fees and expenses of
counsel to the Indemnitee solely in connection therewith. The Indemnitor may not settle such
action or claim, or otherwise consent to an adverse judgment in such action or claim, which would
subject the Indemnitee to an injunction or if such settlement or judgment would materially
diminish or limit or otherwise adversely affect the rights, activities or financial interests of
the Indemnitee, without the express written consent of the Indemnitee.

          13.4 Insurance. Each Party shall maintain comprehensive general liability insurance,
including broad form contractual liability, in an amount of at least Ten Million U.S. Dollars
(US$10,000,000) and product liability coverage, including broad form contractual liability, in an
amount of at least Ten Million U.S. Dollars (US$10,000,000) for bodily injury and property damage
during the Term of this Agreement and thereafter for a period of [***]([***]) years. If any of
the required insurance is provided on a claims-made basis, each Party may purchase tail coverage
so that insurance is in effect from the Effective Date until [***]([***]) years after termination
or expiration of this Agreement. Pharming shall maintain all risk property insurance covering
consigned inventory held at any Manufacturing Facility, Testing and Storage Facility (each as
defined in the Supply Agreement) or distribution warehousing or storage facility contracted by
Santarus. Each Party shall give the other Party at least [***]([***]) days prior written notice
of any cancellation or termination of such insurance. The minimum level of insurance set forth
herein will not be construed to create a limit on a Party’s liability with respect to its
indemnification obligations hereunder. Upon request, each Party will furnish to the other Party
a certificate of insurance evidencing such coverage as of the Effective Date and upon reasonable
request at any time thereafter.

 

			
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Exchange Commission. Confidential treatment has been requested with respect to the omitted
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          13.5 Limitation of Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY, EXCEPT WITH RESPECT
TO THE INDEMNIFICATION OBLIGATIONS UNDER SECTIONS 13.1 AND 13.2, IN NO EVENT WILL EITHER PARTY,
ITS DIRECTORS, TRUSTEES, OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES BE LIABLE TO THE OTHER PARTY
FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT, PUNITIVE, SPECIAL OR EXEMPLARY DAMAGES OR ANY LOST
PROFITS ARISING THEREFROM, WHETHER BASED UPON A CLAIM OUT OF OR RELATED TO THIS AGREEMENT OR THE
SUPPLY AGREEMENT OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT, OR
OTHERWISE, ARISING OUT OF THIS AGREEMENT OR THE SUPPLY AGREEMENT.

ARTICLE 14

ADDITIONAL RIGHTS GRANTED TO SANTARUS

          14.1 Supply Agreement. Pharming hereby acknowledges that certain rights have been granted
to Santarus as set forth in the Supply Agreement in order to provide Santarus with additional
comfort related to continued and timely supply of Licensed Product throughout the Term.

          14.2 Deed. Pharming hereby acknowledges that certain rights of usufruct (as meant in
Section 3:201 and further of the Dutch Civil Code), as the case may be in advance (bij voorbaat)
as set forth in the Deed have been granted to Santarus in order to provide Santarus with
additional comfort related to continued and timely supply of Licensed Product throughout the
Term.

ARTICLE 15

MISCELLANEOUS

          15.1 Assignment.

               (a) Neither this Agreement, the Supply Agreement, nor the Deed nor any interest hereunder or
thereunder may be assigned, sold, transferred or otherwise disposed of by either Party without the
prior written consent of the other Party, provided, however, that either Party may assign this
Agreement, the Supply Agreement, and the Deed or all of its interests hereunder and thereunder to
any Person with which it may merge or consolidate, or to which it may transfer all or substantially
all of its assets, without obtaining the consent of the other Party. For clarity, any permitted
assignment, sale, transfer or other disposition of this Agreement (or all of its interests
thereunder) shall be accompanied by the assignment, sale, transfer or other disposition of the
Supply Agreement and the Deeds (or all of its interests thereunder) to the same Person (or one of
its Affiliates.

               (b) Notwithstanding the foregoing, in the event of assignment, sale, transfer or other
disposition by a Party of this Agreement, the Supply Agreement and the Deed or all of its interests
hereunder and thereunder to a Direct Competitor, the Parties shall take such additional steps as
may be reasonably necessary to protect the Confidential Information of each

39

 

Party. For purposes of this Section 15.1(b), “Direct Competitor” means a Person which is
(i) actively developing and/or commercializing a plasma derived, recombinant or other C-1
esterase inhibitor for use in the Territory or (ii) pursuing development and/or commercialization
of a pharmaceutical product in the Initial Indication a Transplant Indication(s) or Other
Indication(s) for use in the Territory.

               (c) Each of this Agreement, the Supply Agreement and the Deed shall be binding upon and inure
to the benefit of the successors and permitted assigns of the Parties. Any attempted assignment,
sale, transfer or other disposition in violation of Section 15.1(a) will be void.

          15.2 Dispute Resolution.

               (a) The Parties recognize that disputes as to certain matters may from time to time arise
during the Term which relate to either Party’s rights and/or obligations hereunder or thereunder.
It is the objective of the Parties to establish procedures to facilitate the resolution of disputes
arising under this Agreement and the Supply Agreement in an expedient manner by mutual cooperation.
To accomplish this objective, the Parties agree to follow the procedures set forth in this Section
15.2 if and when a dispute arises under this Agreement and the Supply Agreement.

          Unless otherwise specifically recited in this Agreement or the Supply Agreement, disputes
among the Parties will be resolved by reference first to their respective executive officers
designated below or their successors, for attempted resolution by good faith negotiations within
[***] ([***]) days after such notice is received. Said designated officers are as follows:

	 	 	 	 	 

	 

	 	For Santarus:
	 	Chief Executive Officer
	 
	 	 	 	 
	 

	 	For Pharming:
	 	Chief Executive Officer

          In the event the designated executive officers are not able to resolve such dispute, either
Party may at anytime after the [***]([***]) day period seek to resolve the dispute through the
means provided in Section 15.2(b).

               (b) Any claim or controversy arising out of or related to this Agreement or the Supply
Agreement or any breach hereof or thereof that is not resolved by the designated officers as
provided in this Agreement shall be resolved solely and exclusively by final and binding
arbitration held in New York, New York, U.S.A. conducted by JAMS/Endispute, according to the then
existing rules of JAMS/Endispute. The arbitrator(s) selected shall have significant experience in
the biotechnology or pharmaceutical industry, and in conducting such proceeding shall apply the
substantive law of the State of New York as provided in Section 15.5, except that the
interpretation of and enforcement of this Section shall be governed by the Federal Arbitration Act.
Any arbitration proceeding conducted pursuant to this Section 15.2(b) shall take place in the city
of New York, NY, USA. Any award made by such arbitrator(s) shall be final and binding upon the
parties and a judgment of a court having

 

			
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jurisdiction may be entered on such award. Notwithstanding the foregoing, disputes regarding the
validity, scope or enforceability of patents shall be submitted to a court of competent
jurisdiction in the country where such patent has issued.

          15.3 Force Majeure. Neither Party shall lose any rights hereunder or be liable to the other
Party for damages or losses on account of failure of performance by the defaulting Party if the
failure is occasioned by government action, war, fire, explosion, flood, strike, lockout,
earthquake, embargo, act of God, material shortage or failure of any supplier (to the extent such
shortage or failure is attributable to an event of force majeure suffered by such supplier) or
any other similar cause beyond the control of the defaulting Party, provided that the Party
claiming force majeure has exerted all reasonable efforts to avoid or remedy such force majeure.

          15.4 Compliance with Law. Each Party hereto shall comply with all applicable laws, rules,
ordinances, guidelines, consent decrees and regulations of any applicable federal, state or other
governmental authority.

          15.5 Governing Law. This Agreement and the Supply Agreement is deemed to have been entered
into in the State of New York, United States of America, as applied to contracts entered into and
performed entirely in New York by New York residents and its interpretation, construction, and
the remedies for its enforcement or breach are to be applied pursuant to and in accordance with
the laws of the State of New York, without giving effect to the principles of conflicts of law
thereof. In addition, the Supply Agreement shall be construed, governed, interpreted and
applied, without regard to the 1980 United Nations Convention on Contracts for the International
Sale of Goods, which is explicitly declared not be applicable to this Agreement.

          15.6 Entire Agreement. This Agreement, the Supply Agreement, and the Deed, including all
Exhibits attached hereto or thereto, and all documents delivered concurrently herewith, set forth
all the covenants, promises, agreements, warranties, representations, conditions and
understandings between the Parties hereto and supersede and terminate all prior agreements and
understanding between the Parties. No subsequent alteration, amendment, change or addition to
this Agreement or the Supply Agreement shall be binding upon the Parties hereto unless reduced to
writing and signed by the respective authorized officers of the Parties.

          15.7 Relationship of the Parties. Nothing in this Agreement or the Supply Agreement is
intended or shall be deemed to constitute a partnership, agency, employer-employee or joint
venture relationship between the Parties. No Party shall incur any debts or make any commitments
for the other, except to the extent, if at all, specifically provided in this Agreement or the
Supply Agreement.

          15.8 Notices. All notices hereunder shall be in writing and shall be deemed given if
delivered personally or by facsimile transmission (receipt verified), or sent by express
overnight courier service, to the Parties at the following addresses (or at such other address
for

41

 

a Party as shall be specified by like notice; provided, that notices of a change of address
shall be effective only upon receipt thereof). Any such notice shall be deemed to have been
delivered on the date actually received by a Party.

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	 	If to Pharming,
addressed to:
	 	Pharming Group N.V.

Darwinweg 24
2333 CR Leiden

The Netherlands

Attention: Chief Executive Officer

Facsimile: +31 (0) 71 524 7445
	 
	 	 	 	 
	 

	 	With copy to:
	 	Pharming Group N.V.

Darwinweg 24
2333 CR Leiden

The Netherlands

Attention: Legal Department

Facsimile: +31 (0) 71 524 7445
	 
	 	 	 	 
	 

	 	If to Santarus,
addressed to:
	 	Santarus, Inc.

3721 Valley Centre Drive, Suite 400

San Diego, California 92130

U.S.A.

Attention: President and CEO

Facsimile: +1 (858) 314-5701
	 
	 	 	 	 
	 

	 	With copy to:
	 	Santarus, Inc.
3721 Valley Centre Drive, Suite 400

San Diego, California 92130

U.S.A.

Attention: Legal Affairs Department

Facsimile: +1 (858) 314-5702

          15.9 Waiver. Except as specifically provided for in this Agreement or the Supply Agreement,
the waiver from time to time by either of the Parties of any of their rights or their failure to
exercise any remedy shall not operate or be construed as a continuing waiver of same or of any
other of such Party’s rights or remedies provided in this Agreement or the Supply Agreement.

          15.10 Severability. If any term, covenant or condition of this Agreement or the Supply
Agreement or the application thereof to any Party or circumstance shall, to any extent, be held
to be invalid or unenforceable, then (i) the remainder of this Agreement or the Supply Agreement,
or the application of such term, covenant or condition to Parties or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected thereby and each
term, covenant or condition of this Agreement and the Supply Agreement shall be valid and be
enforced to the fullest extent permitted by law; and (ii) the Parties hereto covenant and agree
to renegotiate any such term, covenant or application thereof in good faith in order to provide a
reasonably acceptable alternative to the term, covenant or condition of this Agreement or the
Supply Agreement or the application thereof that is invalid

43

 

or unenforceable, it being the intent of the Parties that the basic purposes of this
Agreement and the Supply Agreement are to be effectuated.

          15.11 Official Language. The official text of this Agreement, the Supply Agreement and any
appendices, exhibits and schedules hereto or thereto, or any notice given or accounts or
statements required by this Agreement or the Supply Agreement shall be in English. In the event
of any dispute concerning the construction or meaning of this Agreement or the Supply Agreement,
reference shall be made only to this Agreement or the Supply Agreement as written in English and
not to any other translation into any other language.

          15.12 Headings. The Section and paragraph headings contained in this Agreement or the
Supply Agreement are for the purposes of convenience only and are not intended to define or limit
the contents of said sections or paragraphs.

          15.13 No Third Party Beneficiaries. Except for rights and obligations specifically referred
to in this Agreement or the Supply Agreement that apply to Indemnitees, Affiliates, Sublicensees
or licensees of the Parties, nothing in this Agreement or the Supply Agreement is intended to
confer on any Person other than Santarus or Pharming any rights or obligations under this
Agreement, and there are no intended Third Party beneficiaries to this Agreement or the Supply
Agreement.

          15.14 Counterparts. This Agreement and the Supply 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.

[Remainder of Page Intentionally Left Blank]

44

 

          IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by their
proper officers as of the Effective Date.

	 	 	 	 	 	 	 	 	 	 	 

	SANTARUS, INC.	 	 	 	PHARMING GROUP N.V.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Gerald T. Proehl
	 	 	 	By:
	 	/s/ Sijmen de Vries	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Gerald T. Proehl
	 	 	 	Name:
	 	Sijmen de Vries	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	President and Chief Executive
Officer
	 	 	 	Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Bruno M.L. Giannetti	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Bruno M.L. Giannetti	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:
	 	Chief Operations Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	PHARMING INTELLECTUAL PROPERTY B.V.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Sijmen de Vries	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Sijmen de Vries	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:
	 	Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Bruno M.L. Giannetti	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Bruno M.L. Giannetti	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Title:
	 	Chief Operations Officer	 	 

45

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