Document:

EX-10.37  EXCLUSIVE LICENSE AGREEMENT

 

Exhibit 10.37

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

EXCLUSIVE LICENSE AGREEMENT

     This EXCLUSIVE DIFLUPREDNATE LICENSE AGREEMENT (hereinafter called this “Agreement”) is made
and effective as of the 3rd day of April, 2006 by and between:

SENJU Pharmaceutical Co., Ltd., a legal entity duly organized and existing under the laws of Japan,
having its principal office of business at 5-8, Hiranomachi 2-chome, Chuo-ku, Osaka 541-0046, Japan
(hereinafter called “SENJU”);

AND

SIRION Therapeutics, Inc., a legal entity duly organized and existing under the laws of the State
of Florida, U.S.A., having its principal office of business at 3110 Cherry Palm Drive, Suite 340,
Tampa, Florida 33619, U.S.A. (hereinafter called “SIRION”);

WITNESSETH THAT:

WHEREAS, SENJU is the joint owner with Mitsubishi Pharma Corporation, a Japanese corporation having
its principal place of business at 2-6-9, Hiranomachi, Chuo-ku, Osaka 541-0046, Japan (hereafter
referred to as “MITSUBISHI”), of patent rights in certain areas of the world, including the United
States, to topical ophthalmic products containing Difluprednate (hereinafter defined in detail), as
well as compositions containing Difluprednate; and

WHEREAS, SENJU is an exclusive licensee, throughout the world except for Japan, including the
United States, of sub-license granting rights to an ophthalmic product containing Difluprednate for
the treatment of all ophthalmic diseases in humans by way of an agreement (Kaigainiokeru kaihatsu
oyobi Syougyoukanikannsuru Keiyaku-syo) entered into as of February 22, 2005, by and between SENJU
on one hand; and MITSUBISHI on the other hand (said agreement hereafter referred to as
“SENJU-METSUBISI{I License Agreement”); and

WHEREAS, SENJU desires to grant SIRION a license, based on its rights under the SENJU-MITSUBISHI
License Agreement, to develop, use, obtain governmental approval for, manufacture, sell,
distribute, and promote an ophthalmic emulsion and/or suspension containing Difluprednate in the
Territory (hereinafter defined), according to the terms and conditions set forth herein, and SIRION
wishes to receive such license and the obligations therein; and

WHEREAS, SENJU and SIRION understand and acknowledge that the exercise of this Agreement by either
Party may result in the creation of new inventions or discoveries.

NOW THEREFORE, in consideration of the foregoing, the mutual covenants contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, SENJU and SIRION (SENJU and SIRION collectively called “Parties” and/or
individually called “Party”, and all other entities not hereto named will be referred to as
“Third Parties”) hereby agree as follows:

 

 

Article 1— Definitions

The following terms used in this Agreement shall have the meanings set forth in this Article 1,
unless the context clearly requires otherwise, and the singular shall include the plural and vice
versa. All other terms shall be afforded their generally accepted legal definitions.

	1.01	 	“Compound” shall mean a certain chemical substance having the chemical structure of 6á,
9-Difluoro- 11 â, 17, 2 1-trihydroxy-1, 4-pregnadiene-3, 20-dione 21-acetate 17-butyrate. The
Compound as also referred to as “Difluprednate.”
	 
	1.02	 	“Product” shall mean the topical corticosteroid ophthalmic emulsion and/or suspension
containing the Compound as an active ingredient for the treatment of ophthalmic diseases in
humans only. Combination products containing the Compound and other active ingredients,
whether patented or not, are initially excluded from this definition, but may be included only
with the express prior written consent of SENJU, such consent not to be unreasonably withheld.
Furthermore, SENJU has the right to amend Article 10 of this Agreement in exchange for the
grant of permission to allow a patented combination product into this definition, provided
however, that for the term of this Agreement, as defined in Article 3, there shall be a
royalty on sales of combination products identical to those on the Product under Article 10.
After the term of this Agreement ends, the Parties shall negotiate in good faith for the
future terms of such a grant.
	 
	1.03	 	“Effective Date” shall mean the date first above written on which this Agreement was signed
by the Parties and shall become effective.
	 
	1.04	 	“First Commercialization” shall mean the date of the first commercial offer for sale by
SIRION of the Product in commercial quantities to a Third Party in the Territory according to
the terms of this Agreement.
	 
	1.05	 	“Governmental Approval” shall mean any kind of approvals by the United States Food and Drug
Administration (“U.S. FDA”) or equivalent future governmental authority in the Territory,
necessary to commercialize the Product in the Territory, including, without limitation, any
approvals necessary for the development, manufacture, distribution, and sale of the Product in
the Territory.
	 
	1.06	 	“Territory” shall mean the United States of America as well as Puerto Rico, Guam, the U.S.
Virgin Islands, and any other U.S. territories and possessions.
	 
	1.07	 	“Cumulative Net Sales” shall mean the total Net Sales made according to this Agreement, that
start to accumulate from the First Commercialization and may be calculated at any given time
during the term of this Agreement.
	 
	1.08	 	“Net Sales” shall mean the gross invoiced amount charged by SIRION to sell the Product to
Third Parties in the Territory, less (a) all normal and customary deductions of any type or
nature

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	 	 	(such as, e.g., returns, credits, refunds, discounts, allowances, rebates, chargebacks and
adjustments); and (b) freight, shipping, insurance costs, customs, duties, taxes and other
governmental charges and surcharges imposed upon the sale or distribution of the Product.
However, the deductions under this definition may not exceed [* * *] of the gross invoiced
amount. For the purpose of clarification, the gross invoiced amount and deductions thereof
apply to aggregate, rather than individual, sales of the Product, and do not apply to sales
of anything other than the Product, even if sold simultaneously with the Product.
	 
	1.09	 	“Patent Rights” shall mean that granted under U.S. Patents No. 5,556,848, issued September
17, 1996; and No. 6,114,319, issued September 5, 2000; as well as any and all reissues,
re-examinations, and patent term extensions thereof.
	 
	1.10	 	“Semi-Annual Period” shall mean each of the six (6) month periods commencing April 1st and
October 1st and running through, respectively, the following September 30th and March 31st.
	 
	1.11	 	“Technical Information & Know-How” shall mean any and all scientific and clinical data and
knowledge which relate to the Product or the Compound, which are necessary or useful for the
practice of the Patent Rights and the grant of this Agreement, including without limitation,
the development of the Product, obtaining Government Approval, and the manufacture and sale of
the Product in the Territory.
	 
	1.12	 	“Development Activity” shall mean any and all tests, studies and other activities for SIRION
to research and develop the Product, including but not limited to activities to obtain and
maintain the Governmental Approval in the Territory.
	 
	1.13	 	“Financial Year” shall mean the annual twelve-month period that begins on April 1 in a given
year and runs through March 31 of the next year.
	 
	1.14	 	[* * *]
	 
	1.15	 	[* * *]
	 
	1.16	 	“Generic Product” shall mean a substance identical with Product that is legally
commercialized in the Territory after First Commercialization, and that satisfies all of the
following conditions:

	 	(i)	 	contains the Compound as its active pharmaceutical ingredient;
	 
	 	(ii)	 	has the same strength, dosage, and administration as the Product;
	 
	 	(iii)	 	has the same indication as the Product; and
	 
	 	(iv)	 	has the same bioavailability and bioequivalence as the Product;

OR any substance the United States Food and Drug Administration (U.S. FDA) has defined as a drug
product that is the ‘Pharmaceutical Equivalent’ and ‘Bioequivalent’ of the Product, and has
assigned an ‘AB’ or ‘AT’ evaluation code.

Article 2— Grant

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	2.01	 	SENJU hereby grants by way of a license to SIRION, and SIRION hereby accepts, a sole and
exclusive, running royalty-bearing license under the Patent Rights and using the Technical
Information & Know-How to make or have the Product made, develop, manufacture, use, market,
offer to sell, and sell the Product, in the Territory. This license shall not include the
right for SIRION to sell the Product from the Territory to any party outside of the Territory.
The license granted to SIRION herein shall not include the right to grant further licenses or
sub-licenses to any third party without the prior written consent of SENJU, such consent not
to be unreasonably withheld. Nothing in this Agreement shall affect, and SENJU shall retain
the right to grant, other sub-licenses to the Product outside of the Territory.

	2.02	 	SENJU hereby represents that it has the full right and authority to enter into this
Agreement, to grant the licenses provided herein and to perform its obligations hereunder.
SENJU further represents and warrants that neither it, nor any of its affiliates or
subsidiaries, shall assert the rights granted to SIRION under this article in the Territory
for the term of this Agreement. SENJU additionally represents and warrants that as of the
Effective Date it has not licensed the right to import the Product into the Territory from
outside the Territory to a Third Party, nor will it do so itself or by way of a license to a
Third Party for the term of this Agreement.

	2.03	 	SIRION represents and warrants that SIRION will comply, with all applicable governmental laws
and regulations relating to the development, manufacture, marketing, sale, distribution,
promotion to sell of the Product in the Territory.

	2.04	 	Notwithstanding Paragraph 2.01 above, SIRION shall have a right to contract manufacture the
Product in whole or in part to any Third Party but only upon obtaining the prior written
consent of SENJU, which shall not be unreasonably withheld, provided, however, that SIRION
shall promptly notify SENJU in writing of any such contract manufacture that it enters into
and the name of contract manufacturer, and that SIRION shall require the contract manufacturer
to undertake the same obligations undertaken by SIRION under this Agreement that are
applicable to the manufacture of the Product. For the purpose of clarification, this paragraph
shall not affect the rights of either Party under Article 13.

	2.05	 	SENJU further grants to SIRION a right of first refusal for the exclusive use of the
Technical Information & Know-How, as well as any future patents covering the Compound or
Product, or the use thereof, individually in Canada, the United Mexican States, and the
countries or areas of Central America and the continent of South America. Accordingly, in the
event that SENJU receives an offer from a Third Party for the rights mentioned in this
paragraph, it shall immediately notify SIRION of this fact. SIRION will then have [* * *] to
match said Third Party offer. Any rights granted to SIRION by SENJU as a result of this
paragraph would then be reduced to an agreement to be executed in the future according to
those terms. SIRION acknowledges that as of the Effective Date, SENJU has no rights to patents
covering the Compound or Product, or the use thereof, in the areas stated in this paragraph,
nor is it under any obligation to obtain such rights under this Agreement.

	2.06	 	To the extent of its actions that affect the grant to SIRION of this Agreement, SENJU shall
deploy and conduct itself under the SENJU-MITSUBISHI License Agreement in a

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manner that will enable SIRION to exercise its rights under this Agreement. In this regard,
and without limiting the foregoing, SENJU shall (a) comply in all respects with and perform
all of its duties and obligations under the SENJU-MITSUBISHI License Agreement, (b) not take
or fail to take any action under the SENJU-MITSUBISHI License Agreement that could have a
materially adverse effect on S1RION’s rights under this Agreement, (c) enforce the
provisions of the SENJU-MITSUBISHI License Agreement against MITSUBISHI if failure to do so
could have a materially adverse effect on SIRION’s rights under this Agreement, and (d) not
modify, amend or terminate the SENJU-MITSUBISHI License Agreement if to do so would effect
SIRION’s rights under this Agreement without the prior written consent of SIRION, which
consent shall not unreasonably be withheld.

Article 3— Term of Agreement

	3.01	 	This Agreement and the license granted therein shall become effective as of the Effective
Date and shall continue in effect until the later of 1) ten (10) years from the First
Commercialization, or 2) the expiration or invalidation of all of the Patent Rights. At the
expiration of the term of this Agreement as stated in this article, but not its termination
according to Article 18, SIRION shall have a fully paid-up, perpetual right to the Technical
Information & Know-How.

Article 4— Technical Information and Know-How

	4.01	 	Within a reasonable period after the Effective Date, SENJU shall provide SIRION with
documentation of all Technical Information and Know-How, known to and reasonably available to
SENJU at the Effective Date, already translated into the English language. Excluded from the
obligations of this Article will be any material that SENJU is required by contractual
obligation to keep confidential. SIRION will be required to conduct any translations of the
Technical Information and Know-How of this paragraph into a language other than English at its
own expense and risk. Specific items to be transferred include, but are not limited to:
manufacturing processes, non-clinical study data, and clinical study data.
	 
	4.02	 	SENJU represents and warrants that the Technical Information and Know-How provided to SIRION
according to this article shall be reasonably sufficient for SIRION to effectively exercise
the rights granted to it by this Agreement.
	 
	4.03	 	SIRION shall not use any Technical Information and Know-How provided under this Agreement for
any purpose other than the development, and the manufacture or commercialization of the
Product during the term of this Agreement or anytime thereafter.
	 
	4.04	 	SIRION agrees and acknowledges that clinical data and information of the Technical
Information and Know-How may not comply with applicable regulatory requirements, codes and
regulations including Good Laboratory Practice and Good Clinical Practice, and that any
failure to apply and utilize for the Development Activities for obtaining

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Governmental Approval shall not be deemed a breach by SENJU of this Agreement. Accordingly,
if SIRION were to be requested or required to conduct an additional clinical study,
re-clinical study, or re-non-clinical study for the clinical data, non-clinical data, and
information involved in Technical Information and Know-How, SIRION shall conduct them at its
sole cost and risk.

Article 5— Product Development and Governmental Approval

	5.01	 	SIRION represents and promises that it will make a commercially diligent and reasonable
effort to, at its own expense and risk, develop, market, and promote the sale of the Product
in the Territory, including but not limited to, performing all activities and preparation,
filing, and support of the application documents necessary to obtain Governmental Approvals in
the Territory. Specifically, SIRION shall responsible for any and all clinical trials required
to obtain Governmental Approval, including those done on humans, at its sole cost and risk.
	 
	5.02	 	SENJU shall provide SIRION with access to any and all documents in its possession that might
be required by SIRION to obtain Governmental Approval and not otherwise provided by this
Agreement, upon SIRION’s request, and in the English language if possible.
	 
	5.03	 	Occasionally, but at least [* * *], SIRION shall provide SENJU with the written report
concerning the progress of all Development Activities and of obtaining Governmental Approval.
Further, SIRION shall promptly notify SENJU upon obtaining any Governmental Approval in a
country of the Territory.
	 
	5.04	 	Soon after the Effective Date, SIRION shall provide SENJU with a development plan and
schedule of the Product in the Territory (hereafter referred to as “Development Plan and
Schedule”) for SENJU’s review and comment. SENJU shall provide SIRION with SENJU’s comments
and advice, and SIRION shall take SENJU’s comments and advice into consideration for the
Development Plan and Schedule. In the event that SIRION renews or updates the Development Plan
and Schedule, above procedure shall again be applied. SIRION agrees and acknowledges that
SENJU will provide MITSUBISHI with Development Plan and Schedule provided by SIRION subject to
Paragraph 19.03.
	 
	5.05	 	Notwithstanding anything else to the contrary stated herein, in the event that the schedule
of the Development Plan and Schedule is delayed due to SIRION’s complete omission and gross
negligence, SENJU shall have a right to notify SIRION thereof and if SIRION fails to remedy
the situation in all material respects within [* * *] days after receiving SENJU’s notice then
SENJU shall have the option, upon notice to SIRION, to terminate this Agreement.
	 
	5.06	 	Upon the request of SENJU, SIRION shall provide SENJU or MITSUBISHI and their respective
affiliates, subsidiaries, or sub-licensees with any data, information and result (hereinafter
called “Results”) generated from the Development Activities. SIRION agrees and acknowledges
that SENJU and its affiliates, subsidiaries, or sub-licensees shall have

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	 	 	the right to use the Results for the sole purposes of development, manufacture, obtaining
the governmental approval and sale of the Product outside of the Territory without any
compensation to SIRION, and that MITSUBISHI, its affiliates or subsidiaries shall have the
right to use or have its sub-licensees use the Results for the sole purposes of development,
manufacture, obtaining the governmental approval and sale of the product containing the
Compound outside the ophthalmic field throughout the world without any compensation to
SIRION. SIRION shall provide SENJU with the reliability assurance certificates that the
Results would be generated by SIRION in compliance with applicable GLP (Good Laboratory
Practice), GCP (Good Clinical Practice).
	 
	5.07	 	Upon the request of SENJU, SIRION shall provide SENJU or MITSUBISHI and their respective
affiliates, subsidiaries, or sub-licensees with any and all copies of the New Drug Application
Dossier (hereafter referred to as ‘NDA’) submitted to the US FDA for obtaining the
Governmental Approval and copy of certificate of Governmental Approval. SIRION agrees and
acknowledges that SENJU and its affiliates, subsidiaries, or sub-licensees shall have the
right to use, free of charge, such copies of the NBA and copy of certificate of Governmental
Approval for the sole purposes of development, manufacture, obtaining the Governmental
Approval and sale of the Product outside of the Territory without any compensation to SIRION.
SIRION agrees and acknowledges that MITSUBISHI, its affiliates or subsidiaries shall have the
right to use or have its sub-licensees use, free of charge, such copies of the NBA and copy of
certificate of Governmental Approval for the sole purposes of development, manufacture,
obtaining the governmental approval and sale of the product containing the Compound outside
the ophthalmic field throughout the world without any compensation to SIRION.
	 
	5.08	 	If SIRION, in its bona fide business judgment, no longer wishes to develop, obtain
Governmental Approval for, or commercialize the Product according to this Agreement as a
result of a significant and unforeseen problem, it shall notify SENJU of this fact and the
Parties shall discuss a resolution thereof. In such a case, with the express written
permission of SENJU, such permission not to be unreasonably withheld, the terms of this
Agreement may be altered or the entire Agreement terminated according to the terms of
Paragraph 18.04. In the event of a termination of the Agreement under this paragraph, SIRION
shall have [* * *] to pay SENJU any outstanding debts remaining under this Agreement.

Article 6— Marketing

	6.01	 	Within [* * *] of obtaining Governmental Approval, SIRION shall use commercially reasonable
and diligent efforts to launch, promote, and sell the Product in the Territory.
	 
	6.02	 	SIRION shall, in advance of any sales or distribution, furnish SENJU with a copy of the
package inserts included with the Product, and thereafter, any revised version thereof.
	 
	6.03	 	SIRION shall prepare, at its own costs and expenses, appropriate marketing, advertising and
promotional material for the Product. SIRION shall, in advance of any use, furnish SENJU with
those materials for SENJU’s review.

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	6.04	 	Alliance indication to the Product’s bottle, outer package, brochure, insert leaflet,
advertising and/or promotional materials shall be discussed and decided between SENJU and
SIRION; provided that, SIRION may use any alliance indication required by law.
	 
	6.05	 	At least [* * *] before the occurrence of First Commercialization, SIRION shall submit to
SENJU a sales forecast of the Product covering the [* * *] Financial Years after the Financial
Year of the First Commercialization, addressing each subsequent Financial Year separately,
including a forecast of a sales peak of the Product and its timing, for SENJU’s review and
approval. Any sales forecast submitted by SIRION shall be deemed approved by SENJU [* * *]
after its submission, unless SIRION receives from SENJU written objections to such forecast
within such [* * *] period. If SENJU disagrees with SIRION’s sales forecast within the
aforementioned [* * *] period, SENJU and SIRION shall have an independent market research
agent, which is acceptable to both SENJU and SIRION, calculate the sales forecast for such [*
* *] Financial Years after the Financial Year of the First Commercialization. SIRION and SENJU
shall bear equally the cost of such market research agent. SENJU and SIRION agree and
acknowledge that the sales forecast submitted by SIRION or the sales forecast calculated by
such independent market research agent, will be subject to minimum annual sales forecast for
calculation of minimum royalties under Paragraph 11.01.
	 
	6.06	 	Should SIRION’s actual sales amount of the Product be far below the sales forecast adopted by
the Parties under this article due to the occurrence of an unexpected event, or a material
change in the market or the Product’s prospects, SENJU and SIRION will meet to discuss the
modification of such sales forecast. In the event that SIRION and SENJU fail to reach an
agreement for the modification of such sales forecast within [* * *] from the commencement of
the discussion between SENJU and SIRION, the Parties will refer the matter to an independent
market research agent, which is acceptable to both SENJU and SIRION, to recalculate the sales
forecast, in a timely manner, taking into consideration, among other things, the unexpected
event, the material change in the market, the Product’s prospects and other relevant factors.
SIRION and SENJU shall bear equally the cost of such market research agent. SENJU and SIRION
agree and acknowledge that the revised sales forecast agreed to by SIRION and SENJU or the
revised sales forecast calculated by such independent market research agent will supercede any
prior sale forecast and will be the basis for calculation of minimum royalties under Paragraph
11.01 (until another sales forecast is adopted by the Parties pursuant to this paragraph).
Pending the Parties agreement to a revised sales forecast or the submission by the independent
market research agent of its revised sales forecast, SIRION will continue to pay minimum
royalties under Paragraph 11.01 calculated based on the last sales forecast adopted by the
Parties.

Article 7— Governance

	7.01	 	In an effort to facilitate this Agreement, the Parties together shall form a development and
commercialization committee (hereinafter referred to as the ‘Joint Committee’ or “JC”)
comprised of members from each Party, the purpose of which is to oversee and

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achieve the individual Party requirements, including those of Articles 4, 5, and 6, as well
as the ultimate success of the Agreement. With respect to the clinical and regulatory
development of the Product, the JC shall be advisory in nature, but shall not interfere with
the judgment of SIRION as to the best course of action to achieve a regulatory approval and
maximize commercial potential.

	7.02	 	Within ninety (90) days of the Effective Date, the Parties shall form the JC comprised of at
least one (1) and up to three (3) members from each Party, provided that the number from each
Party be equal at all times. The JC committee members shall work in mutual cooperation to
achieve the purpose of the JC. A Party’s members on the JC may be employees or consultants of,
or other individuals that are contractually bound to, such Party, and have agreed to be bound
by the terms of confidentiality and other pertinent provisions of this Agreement. The agenda
of the JC shall include the issues that each Party desires to discuss at the JC, taking into
consideration the requirements of this Agreement and the stated purpose of the JC. Each JC
member shall have expertise in a relevant discipline, such as pre-clinical development,
clinical and/or regulatory affairs, business development, or sales or marketing. Each Party
shall retain the right to change its representatives to the JC from time to time, upon prior
written notice to the other Party, or to appoint one or more temporary substitutes to serve in
the place of an absent members, said substitutes to be bound by the same duties and
obligations of the members. In the event that the JC cannot come to a decision regarding an
issue, then the matter will be referred to one executive representative from each Party who
are not already members of the JC, who will discuss the matter in an effort to resolve the
disagreement. It is noted that the JC does not have the right to amend or waive compliance
with the terms and conditions of the Agreement or approve actions of the Parties inconsistent
with the Agreement.
	 
	7.03	 	The JC shall meet at least once every six (6) months, or more frequently as either Party may
request, at such times and at such locations as shall be mutually agreed by the Parties.
Meetings of the JC may be held in person, by teleconference or by videoconference. The JC
members shall set any other rules and protocols of the JC in good faith.

Article 8— Trademark

	8.01	 	SIRION shall have the right to select the trademark to be used in connection with its
marketing of the Product subject to obtaining prior written approval of SENJU, such approval
not to be unreasonably withheld. In this case, SIRION shall, at its sole cost and risk, and at
its option (after discussion with SENJU), file to obtain the registration of the trademark in
the Territory, and thereafter maintain the trademark. Any trademark submitted by SIRION to
SENJU shall be deemed approved by SENJU [* * *] after its submission, unless SIRION receives
from SENJU written objection within this [* * *] period.

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	8.02	 	In the event that SENJU or its sub-licensees desire to use a trademark made by SIRION under
this article in certain countries or areas outside of the Territory, the Parties shall discuss
and agree upon terms for such use in advance of such use.

Article 9— Availability of the Compound

	9.01	 	SIRION shall procure the Compound necessary for manufacture the Product for Development
Activities and for manufacture of the commercial Product, and shall file the Drug Master File
to the US FDA and maintain it, at its sole cost and responsibility. SENJU shall cooperate with
SIRION in providing the information necessary for manufacturing of the Compound, provided,
however, that the information provided by SENJU will be limited to that within the possession
of SENJU as of the Effective Date. For the purpose of confirmation, this article does not
impose upon SENJU any obligations to provide or obtain any data or information which is not in
possession of SENJU, nor to conduct any test or study specifically for the benefit of SIRION.

Article 10— Payments and Royalties

	10.01	 	In consideration of and in exchange for SENJU’s grant of the exclusive license in the
Territory in accordance with Article 2 above, SIRION shall, during the term of this Agreement,
make payments to SENJU based on the happening of events and/or sales totals, as well as
royalties on sales.

	 	(i)	 	If SIRION [* * *], then it shall be subject to the following payments and
royalties:

	 	(a)	 	Event Payments

	 	 	 
	Milestone Event:	 	Amount of Payment due:
	[* * *]

	 	[* * *]
	 
	 	 
	[* * *]
	 	 

	 	 	 
	Milestone Event:	 	Amount of Payment due:
	[* * *]

	 	[* * *]
	 
	 	 
	[* * *]
	 	 

	 	 	 
	Milestone Event:	 	Amount of Payment due:
	[* * *]

	 	[* * *]

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	 	(b)	 	Sales Payments

	 	 	 
	Milestone Event:	 	Amount of Payment due:
	[* * *]

	 	[* * *]

	 	(c)	 	Royalties
	 
	 	 	 	For [* * *], SIRION shall pay SENJU a royalty of [* * *] of its Net Sales
during each Semi-Annual Period that there are Net Sales under this
Agreement. This royalty rate shall apply even if there are Net Sales for
only part of the Semi-Annual Period or the Agreement is in effect for only
part of a Semi-Annual Period in which Net Sales occur.

	 	(ii)	 	If SIRION [* * *], then it shall be subject to the following payments and
royalties:

	 	(a)	 	Event Payments

	 	 	 
	Milestone Event:	 	Amount of Payment due:
	[* * *]

	 	[* * *]
	 
	 	 
	[* * *]
	 	 

	 	 	 
	Milestone Event:	 	Amount of Payment due:
	[* * *]

	 	[* * *]
	 
	 	 
	[* * *]
	 	 

	 	 	 
	Milestone Event:	 	Amount of Payment due:
	[* * *]

	 	[* * *]

	 	(b)	 	Royalties
	 
	 	 	 	For the term of this Agreement, SIRION shall pay SENJU a royalty of [* * *]
of its Net Sales during each Semi-Annual Period that there are Net Sales
under this Agreement. This royalty rate shall apply even if there are Net
Sales for only part of the Semi-Annual Period or the Agreement is in effect
for only part of a Semi-Annual Period in which Net Sales occur.

	10.02	 	Event and Sales Payments: Unless otherwise provided herein, no event or sales
payments to SENJU under this article shall be refundable in whole or in part, except in the
case of overpayment. Each of the foregoing payments shall be payable one time only, even if
the event occurs on more than one occasion. Each payment shall be due and payable in full by
SIRION within [* * *] of completion of the applicable milestone, even if this Agreement
terminates after such event occurs.
	 
	10.03	 	Royalty Payments:

11

 

	 	(i)	 	The royalty percentages of Sections 10.01(i) and (ii) may be changed after the
introduction of a Generic Product into the Territory. The amount of such change depends
upon the market share of any Generic Products in that Financial Year, according to the
table below.

	 	 	 
	Generic Product(s) Market Share	 	Royalty Rate
	[* * *]

	 	[* * *]

	 	 	 	

From the Financial Year in which the introduction of a Generic Product occurs, the
initial royalty percentage may change according to the above table for each
Financial Year based on the market share of Generic Products for the entire
Financial Year. Royalty payments made after the introduction of a Generic Product
shall still be made on a Semi-Annual basis. However, since the market share cannot
be determined until after a Financial Year, the royalty rate for the first
Semi-Annual Period shall be the same as that of the prior Semi-Annual Period, and
any adjustments for changes in the final royalty percentage shall be made in the
payment for the final Semi-Annual Period of that Financial Year. The royalty rates
of this paragraph may apply immediately if a Generic Product has been introduced in
the Territory when the first Net Sales occur. The market share of Generic Products
shall be determined using IMS produced sales amount data.

	 
	 	(ii)	 	SIRION shall make and keep true and accurate records of its sales of the
Product in the Territory. These records shall be sufficient to prove the accuracy of
SIRION’s calculations of the above royalties payable to SENJU. SIRION shall keep
relevant sales records for [* * *] from the date that SIRION has made a specific
royalty payment. Upon SENJU’s demand, SIRION shall provide SENJU with a copy of such
sales records.
	 
	 	(iii)	 	SENJU shall have the right to inspect, at its own expense, the records
prepared and kept in accordance with the above Paragraph 10.03(ii). This inspection
shall be carried out by a certified public accountant designated by SENJU on a
confidential basis, for the sole purpose of verifying the accuracy of any SIRION
royalty payments for all or any portion of a period not exceeding [* * *] after the
date of that royalty payment. This inspection shall be carried out during usual
business hours at SIRION’s appropriate facility. The fees and expenses of the
accountants performing such inspection shall be borne by SENJU, as the case may be,
unless any amount actually due exceed [* * *] or more of amounts reported, in which
case SIRION shall bear the costs and expenses of such inspection.
	 
	 	(iv)	 	Royalty payments made under this article shall be due in full from SIRION
within [* * *] of the end of the applicable Semi-Annual Period. All royalty payments
shall include an accounting of the actual amount of the Product sold, the Net Sales

12

 

	 	 	 	calculation, Generic Product market share, and the amount of the Product
manufactured during that period of time.
	 
	 	(v)	 	Unless otherwise expressly provided herein, no royalty payment to SENJU under
this Agreement shall be refundable in whole or in part, except for the case of
overpayment.

Article 11— Minimum Royalties

	11.01	 	For a period of [* * *], starting with the Financial Year following the Financial Year in
which the First Commercialization occurs, SIRION shall pay SENJU minimum annual royalties
based on an amount of [* * *] of the sales forecast for that Financial Year submitted under
Paragraph 6.05. Any royalty payments (but not event or sales payments) made according to
Article 10 shall be credited against this minimum annual royalty. Within [* * *] of the end of
any Financial Year to which this article applies, SIRION shall pay SENJU any remaining amount
of the minimum royalties for that Financial Year.

Article 12— Method of Payments

	12.01	 	Any payment from SIRION to SENJU under this Agreement, including those under Article 10,
shall be remitted to the bank account designated by SENJU in United States Dollar currency by
means of a wire transfer, for which SIRION will pay any commission fees and associated costs.
SIRION is responsible for, at its own cost, going through all the formalities required by
making remittance of the payments under this Agreement according to relevant prevailing local
laws.
	 
	12.02	 	SENJU and SIRION shall take any and all necessary steps for the payment to be made under
this Agreement in accordance with the Convention for Avoiding Double Taxation between US and
Japan.

Article 13— Exchange of Information and Reports

	13.01	 	From time to time during the term of this Agreement, the Parties shall exchange clinical and
commercial data and information regarding the Compound or Product, including applicable
Technical Information and Know-How, free of charge, that come to either Party’s attention or
is generated by either Party during the term of this Agreement. SIRION shall not use the
information it receives under this article for any other purpose than the performance of this
Agreement.
	 
	13.02	 	Within a reasonable time following the Effective Date, the Parties shall negotiate in good
faith and execute a mutually acceptable pharmacovigilance agreement, and they shall perform
their respective obligations in accordance with such agreement. SIRION shall be responsible,
at its expense, for all pharmacovigilance in the Territory and for compliance with all
applicable laws, regulations and requirements in connection therewith, and SENJU shall be
responsible, at its expense, for all pharmacovigilance in Japan, such that

13

 

	 	 	it has governmental approval for the Product there, and for compliance with all applicable
laws, regulations and requirements in connection therewith. The Parties acknowledge that the
pharmacovigilance agreement shall also cover the exchange of safety data relating to the
Product.
	 
	13.03	 	SENJU shall have the right to disclose any materials, disclosed by SIRION under this
article, to any Third Party, free of charge to that Third Party, including MITSUBISHI and
SENJU’s existing and future licensees outside the Territory.
	 
	13.04	 	SIRION shall not use any materials provided under this article for any purpose other than
the ophthalmological use of the Compound or of the Product.

Article 14— Maintenance of the Patent Rights

	14.01	 	SENJU shall be responsible for the maintenance of the Patent Rights, including by payment of
any fees required therein, and accordingly represents and warrants that it will do so for the
term of this Agreement. SENJU shall provide yearly updates to SIRION regarding the status of
the Patent Rights included in this Agreement.

Article 15— Patent Litigation

	15.01	 	In the event that SIRION is aware of or suspects that a Third Party is violating the Patent
Rights, it shall immediately notify SENJU of this fact. Thereafter, the litigation or
settlement of such a matter will be SIRION’s responsibility and at its cost, provided that
SENJU shall have the option, but not the obligation, to participate in any litigation or
settlement thereof. If SENJU decides to participate in such litigation or settlement, the
Parties shall cooperate for a mutually beneficial resolution of the matter, including the
distribution of any monetary award. In the event that SENJU declines to participate in such
litigation or settlement, SIRION shall have the right to pursue a remedy for its own benefit
at its sole cost and responsibility, however, SIRION shall obtain the prior written consent of
SENJU before any settlement thereof, such consent not to be unreasonably withheld. SENJU shall
provide reasonable assistance, without any monetary obligation, to SIRION in the enforcement
of any patent rights infringement claims, regardless of whether or not SENJU participates in
such litigation or settlement.
	 
	15.02	 	In the event that SIRION is sued by a Third Party for patent infringement for its exercise
of the rights granted by this Agreement, it shall immediately notify SENJU of this fact.
Thereafter, the defense or settlement of such a matter will be SIRION’s responsibility and at
its cost, provided that SENJU shall have the option, but not the obligation, to participate in
any litigation or settlement thereof. If SENJU participates in such a matter, the Parties
shall cooperate for a mutually beneficial resolution of the matter. In the event that SENJU
declines to participate in such a matter, SIRION shall obtain the prior written consent of
SENJU before any settlement thereof, such consent not to be unreasonably withheld. SENJU shall
provide reasonable assistance, without any monetary obligation for the payment of damages,
losses, settlements or litigation expenses and any other form of running royalty or
compensation to such Third Party, to SIRION in the defense of

14

 

patent infringement claims, regardless of whether or not SENJU participates in such
litigation or settlement.

Article 16— New Inventions or Discoveries

	16.01	 	Any new inventions or discoveries, whether patentable or not, made by the Parties jointly as
a result of the exercise of this Agreement, shall be the joint property of the Parties. SENJU
shall have the exclusive right to use such joint inventions or discoveries outside of the
Territory, free of charge, including by sub-licensing to a Third Party. SIRION shall have the
exclusive right to use such joint inventions or discoveries in the field of ophthalmics inside
of the Territory, free of charge, excluding by way of sub-licensing to a Third Party. However,
MITSUBISHI, its affiliates, sub-licensees, or subsidiaries, shall have an exclusive right to
use, free of charge, any inventions or discoveries outside of the field of ophthalmics made
under this paragraph anywhere in the world. The Parties shall cooperate in any patent
application procedures for inventions or discoveries made under this paragraph.
	 
	16.02	 	Any new inventions or discoveries, whether patentable or not, made solely by SIRION as a
result of the exercise of this Agreement, shall be the joint property of the Parties. However,
SENJU shall have the exclusive right to use any inventions or discoveries made under this
paragraph outside the Territory free of charge, including by sub-licensing to Third Parties.
SIRION shall have the exclusive right to use any inventions or discoveries made under this
paragraph inside of the Territory free of charge, excluding by sub-licensing to Third Parties.
However, MITSUBISHI, its affiliates, sub-licensees, or subsidiaries, shall have an exclusive
right to use, free of charge, any inventions or discoveries outside of the field of
ophthalmics made under this paragraph anywhere in the world. The Parties shall cooperate in
any patent application procedures for inventions or discoveries made under this paragraph.

Article 17— Representations and Warranties

	17.01	 	SENJU SHALL MAKE NO WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCT
MANUFACTURED AND/OR SOLD HEREUNDER INCLUDING WITHOUT LIMITATION ANY WARRANTY OF THE
MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OF THE PRODUCT SOLD BY SIRION.
	 
	17.02	 	SENJU SHALL MAKE NO WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, THE PATENT RIGHTS, TECHNICAL
INFORMATION AND KNOW-HOW AND PRODUCT MANUFACTURED AND/OR SOLD HEREUNDER WILL NOT INFRINGE ANY
THIRD PARTY’S INDUSTRIAL PROPERTY IN THE TERRITORY.

15

 

Article 18— Termination

	18.01	 	Notwithstanding the term of this Agreement, defined in Article 3, either Party may terminate
this Agreement (and all obligations therein) at any time by giving written notice to the other
Party in the event that:

	 	(i)	 	the other Party materially defaults on this Agreement, or is in breach of the
performance of any material obligation imposed on it by this Agreement, and such breach
or default is not remedied in all respects within [* * *] of receipt of a written
demand from the notifying Party to cure the breach or default; OR
	 
	 	(ii)	 	the other Party shall have become insolvent or bankrupt, or shall have made a
general assignment for the benefit of its creditors, or any case or proceeding shall
have been commenced by or against the other Party in bankruptcy or seeking
reorganization, liquidation, dissolution, or any such relief under any bankruptcy,
insolvency, reorganization or other similar act or law, and any such event shall have
continued for [* * *] undismissed or undischarged.

	18.02	 	If this Agreement is terminated at the request of SENJU in accordance with this article
SIRION shall promptly cease its development activities, and/or commercial activities, as the
case may be, concerning the Product, and, at its option, destroy the Product then stocked by
SIRION, or sell the remaining inventory of the Product and settle its obligation, if any, to
pay any royalties or other payments due under this Agreement within [* * *] after the
termination thereof. Additionally, upon SENJU’s request, SIRION shall return to SENJU all the
Technical Information and Know-How provided by SENJU under this Agreement and shall assign to
SENJU, without any compensation, all the rights, titles and interests pertaining to the
Product.
	 
	18.03	 	Expiration or termination of this Agreement shall not affect the rights and obligations of
the Parties which are expressly intended to survive expiration or termination of the
Agreement, including, without limitation, those rights and obligations set forth in this
article.
	 
	18.04	 	In the event of any termination (but not expiration) of this Agreement, at SENJU’s request,
SIRION will arrange for the transfer of any and all of the title and interest in any of the
Governmental Approvals for the Product, including any related documents, free of charge, to
SENJU or any third party that SENJU designates. Additionally, in the event of any termination
of this Agreement, at SENJU’s request, SIRION will return any information and materials
provided to it by SENJU, including the Technical Information and Know How, and provide SENJU,
free of charge, with any information and materials, including raw data, related to the
Product, that it produced as a result of this Agreement. SENJU shall have a right, without
compensation to SIRION, to use or to have any third party use such information, materials, raw
data for any purpose. For the purpose of clarification, in the event that this Agreement
terminates according to this article, then SIRION shall not have the continuing right to the
Technical Information & Know-How that is stated in Article 3.

16

 

Article 19— Confidentiality

	19.01	 	Both Parties hereto undertake to keep confidential all of the information and reports,
materials, data, results of the investigations and other materials regarding the Compound or
the Product which is received from or provided by the other Party under this Agreement,
including Technical Information and Know-How under Article 4, and is marked or otherwise
indicated that the same is confidential in nature (hereinafter collectively called
“Information” in this article), provided, however, that such Information as itemized below
shall be excluded from this confidentiality obligation:

	 	(i)	 	Information which was at the time of disclosure in the public domain;
	 
	 	(ii)	 	Information which after the time of disclosure became a part of the public
domain, through no fault or act of omission by the recipient Party;
	 
	 	(iii)	 	Information which was at the time of disclosure lawfully in the recipient’s
possession on a non-disclosure basis;
	 
	 	(iv)	 	Information received from any Third Party who has no obligation to keep the
Information confidential against any of Parties hereto;
	 
	 	(v)	 	Information which may be disclosed to Third Parties according to the terms of
this Agreement; OR
	 
	 	(vi)	 	Information which both Parties hereto agree in writing to disclose to a Third
Party or to make public;

	 	 	 	provided, further, that the recipient Party shall have competent proof for proving the fact
that the Information in question falls into the category of any of the exceptions herein
above.

	19.02	 	Notwithstanding the provisions of this article, SIRION may disclose the Information
disclosed by SENJU to its directors, officers, employees, consultants or contract workers,
engaging in any activity for the development or commercialization of the Product including
clinical studies and other activities for obtaining the Governmental Approval in the Territory
and contract manufacturer of the Product under Paragraph 2.04, so far as the disclosure is
necessary for their performance of such activity, provided, however, that SIRION shall take
any adequate measure to cause such persons to keep the information disclosed confidential
under the same conditions provided in any provision of this Agreement.
	 
	19.03	 	Notwithstanding the provision of this article, SENJU may, disclose the Information disclosed
by SIRION, to its licensees, officers, employees, consultants or contract workers engaging in
any activity for the commercialization of the Product including clinical studies and other
activities for obtaining and maintaining the Governmental

17

 

Approval outside the Territory, or for obtaining patent rights including any patent
application and prosecution of the patent application, so far as the disclosure is necessary
for their performance of such activity, provided, however, that SENJU shall take any
adequate measure to cause them to keep the Information disclosed confidential under the same
conditions provided in this article of this Agreement. Further, SIRION agrees and
acknowledges that SENJU will disclose to MITSUBISHI any and all part of this Agreement and
the Information disclosed by SIRION subject to the confidential obligations set forth in
SENJU-MITSUBISHI License Agreement.

	19.04	 	Notwithstanding this article, a Party (a “disclosing Party”) may disclose the Information of
the other Party (the “nondisclosing Party”) in response to a valid order of a court or any
governmental agency or regulatory body or as otherwise required by law or regulation or the
requirements of the exchange or listing body on which a disclosing Party’s securities are
listed; provided that, the disclosing Party notifies the non-disclosing Party of such
requirement so that the non-disclosing Party may seek a protective order or other appropriate
remedy; and provided further that, in the event that no such protective order or other remedy
is obtained, then the disclosing Party will furnish only that portion of the nondisclosing
Party’s Information which it is advised by counsel it is legally required to furnish and will
exercise all reasonable efforts to obtain assurance that confidential treatment will be
accorded the Information so furnished.
	 
	19.05	 	The provisions of this article shall survive for [* * *] upon the expiration or early
termination of this Agreement.

Article 20— Publication and Publicity

	20.01	 	SIRION shall not to submit for written or oral publication any manuscript, abstract or the
like which includes data or other information relating to Product or Compound without first
obtaining the prior written approval of SENJU, which shall not be unreasonably withheld.
	 
	20.02	 	Neither Party shall use the name of the other Party (including the name of MITSUBISHI) in
any publicity or advertising without the prior written approval of an authorized
representative of that other party.
	 
	20.03	 	Each Party agrees not to issue any public statement, press release or other disclosure to
Third Party concerning the existence of or terms of this Agreement, without first obtaining
the prior written approval of the other Party and agreement upon the nature and text of such
announcement or disclosure, provided however that neither Party will be prevented from
complying with any duty of disclosure it may have pursuant to law or governmental regulation
or pursuant to the rules of any recognized stock exchange or related body. The Party desiring
to make such public announcement or other disclosure shall inform the other Party of the
proposed announcement or disclosure in reasonably sufficient time prior to public release, and
shall provide the other Party with a written copy thereof, in order to allow such other Party
to comment upon such announcement or disclosure.

18

 

Article 21— Governing Laws and Arbitration

	21.01	 	This Agreement shall be governed by and interpreted in accordance with the Laws of Japan.
	 
	21.02	 	All disputes, controversies or differences which may arise between the Parties hereto or for
the breach thereof shall be referred to and settled by arbitration in accordance with the
Arbitration Rules of the International Chambers of Commerce as currently in force by one or
more arbitrators appointed under such Rules. Such arbitration hereunder shall be conducted in
the English language and shall be held in Japan if the arbitration is requested by SIRION, and
in the United States if the arbitration is requested by SENJU. The determination of the
arbitration shall be final, binding and conclusive upon the Parties hereto. Notwithstanding
anything herein to the contrary, the relevant cure periods for breach under this Agreement
shall toll while either Party pursues resolution to a dispute through arbitration.

Article 22— Assignment or Sale

	22.01	 	This Agreement and the grant therein is personal to SIRION and shall not be assignable,
sub-licensable, transferable, or saleable (including sale of assets of that Party) to any
Third Party, without prior express written consent of SENJU, such consent not to be
unreasonably withheld. Any transfer or change of control by acquisition, merger or otherwise,
or sale of assets by SENJU, shall not change the obligations to or rights granted to SIRION
under this Agreement.

Article 23— Parties in Interest

	23.01	 	Nothing in this Agreement, whether express or implied, is intended to confer any rights or
remedies under or by reason of this Agreement on any persons other than the Parties to it and
their respective successors and assigns, nor is anything in this Agreement intended to relieve
or discharge the obligation or liability of any third persons to any party to this Agreement,
nor shall any provision give any third persons any right of subrogation or action over or
against any party to this Agreement.

Article 24— Independent Contractor Status, No Agency

	24.01	 	SENJU’s and SIRION’s activities hereunder shall be conducted as independent contractors and
no agency relationship shall exist between the parties.

Article 25— Force Majeure

	25.01	 	Neither Party hereto shall be liable for any failure to perform as required through this
Agreement by reason of Force Majeure, to the extent such failure to perform is due to
circumstances reasonably beyond the control of such Party, such as requisition or interference
by any government, state or local authorities, war, strikes, lockout or other

19

 

labor disputes, civil disorders or commotions, act of aggression, acts of God, energy or
other conservation shortages, disease, or occurrences of a similar nature.

	25.02	 	If and when any Party is hindered in its performance of its obligations under this Agreement
by reason of Force Majeure, the performance of those obligations shall be suspended for the
duration of, but not longer than, the continuance of such circumstances.

	25.03	 	Either Party hereto whose performance of obligation has been hindered by reason of Force
Majeure shall inform the other Party immediately, and shall use its reasonable best effort to
overcome the effect of the Force Majeure.

Article 26— Authentic Text

	26.01	 	This text of this Agreement in the English language shall be the authentic text, and any
text in another language, even if such text is made by translation of this text of this
Agreement or prepared by any of the Parties hereto for any purpose, shall have no meaning for
any purpose between the Parties hereto.

Article 27— Entire Agreement

	27.01	 	This Agreement shall constitute the entire agreement between the Parties hereto concerning
the subject matter hereof and shall supersede any other agreements, whether oral or written,
express or implied, and may not be changed or modified or revised except as specifically
agreed upon by the Parties hereto in a written document bearing the respective signatures of
the authorized officers.

Article 28— Separability

	28.01	 	Even in the event that any portion of this Agreement shall be held illegal, void,
ineffective or unenforceable, the remaining portion shall remain in full force and effect.

	28.02	 	If any of the terms or provisions of this Agreement are in conflict with any applicable
statute or rule of law, such terms and provisions shall be deemed inoperative to the extent
that may conflict therewith and shall be deemed to be modified to conform with such statute or
rule of law.

	28.03	 	In the event that the terms and conditions of this Agreement are materially altered as a
result of the provision in Paragraph 28.02, or other sections of this Agreement, the Parties
will re-negotiate the terms and conditions of this Agreement to resolve any inequities.

Article 29— Notice

	29.01	 	Any notice to be given to a Party under or in connection with this Agreement shall be in
writing and shall be (i) personally delivered, (ii) delivered by a nationally recognized
overnight courier, (iii) delivered by certified mail, postage prepaid, return receipt
requested to the Party or (iv) delivered by facsimile transmission to the Party at the

20

 

address or facsimile number set forth below for such Party or such other address or
facsimile number as a Party may from time to time designate by written notice to the other:

	 	 	 
	If to SENJU:

	 	If to SIRION:
	Executive Vice President

	 	Barry Butler
	SENJU Pharmaceutical Co., Ltd.

	 	3110 Cherry Palm Dr., Suite 340
	5-8, Hiranomachi 2-chome

	 	Tampa, FL 33619
	Chuo-ku, Osaka, 541-0046

	 	U.S.A.
	Japan

	 	and,
	Facsimile: +81-6-6226-0406

	 	Reid Haney
	 

	 	Ward Rovell, Professional Association
	 

	 	101 E. Kennedy Boulevard
	 

	 	Suite 4100
	 

	 	Tampa, Florida 33602
	 

	 	U.S.A.
	 

	 	Fax: (813)222-8701

	29.02	 	Any such notice shall be deemed to have been received by the addressee five (5) business
days following the date of dispatch of the notice or other document by post or, where the
notice or other document is sent by overnight courier, by hand or is given by facsimile,
simultaneously with the transmission or delivery. To prove the giving of a notice or other
document it shall be sufficient to show that it was dispatched.

IN WITNESS WHEREOF, SENJU and SIRION have caused this Agreement to be executed in duplicate
counterparts by their duly authorized officers, each fully executed copy hereof to be deemed as
original, as of the date and year first above written.

	 	 	 	 	 	 	 	 	 	 	 
	SENJU;

	 	 	 	 	 	SIRION:	 	 	 	 
	SENJU Pharmaceutical Co. Ltd.	 	 	 	SIRION Therapeutics, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Signature: 

Name:

	 	/s/ Shoji Yoshida
 

     Shoji Yoshida
	 	 
	 	Signature:

Name:
	 	/s/ Barry Butler
 

     Barry Butler
	 	 
	Title:

	 	     President
	 	 	 	Title:
	 	     Chief Executive	 	 

21EX-10.38 SOFTGEL DEVELOPMENT AND SUPPLY AGREEMENT

 

Exhibit 10.38

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

SOFTGEL DEVELOPMENT AND CLINICAL SUPPLY AGREEMENT

     This Softgel Development and Clinical Supply Agreement (“Agreement”) is made as of this 5th
day of October, 2005, by and between Sytera Inc., having its registered office at 505 Coast
Boulevard South, Suite 412, La Jolla, California 92037 (hereinafter “Client”), and Cardinal Health
PTS, LLC, a limited liability company organized under the laws of the State of Delaware, through
its Pharmaceutical Development group with a place of business at 14 Schoolhouse Road, Somerset, New
Jersey 08873 (hereinafter “Cardinal Health”).

RECITALS

     Client is a pharmaceutical company that manufactures, markets, and sells pharmaceutical
products. Cardinal Health provides a complete range of analytical, development and clinical
services to the pharmaceutical industry. Client and Cardinal Health desire to enter into this
Agreement to provide the terms and conditions upon which Client is engaging Cardinal Health to
provide services as defined in one or more Project Plans (as defined below) specifying the details
of the services and the related terms and conditions.

     THEREFORE, in consideration of the mutual covenants, terms and conditions set forth below, the
parties agree as follows:

ARTICLE 1

DEFINITIONS

     The following terms have the following meanings in this Agreement:

     1.1 “Affiliate(s)” means any corporation, firm, partnership or other entity that controls, is
controlled by or is under common control with a party. For purposes of this definition, “control”
shall mean the ownership of at least fifty percent (50%) of the voting share capital of such entity
or any other comparable equity or ownership interest.

     1.2 “API” means the active pharmaceutical ingredient of Client referred to as Fenretinide.

     1.3 “Applicable Laws” means all laws, ordinances, rules and regulations applicable to a
Project or any aspect thereof and the obligations of Cardinal Health or Client, as the context
requires, under this Agreement, including, without limitation, (a) all applicable federal, state
and local laws and regulations; (b) the U.S. Federal Food, Drug and Cosmetic Act, and (c) the Good
Manufacturing Practices (“GMPs”) or Good Laboratory Practices (“GLPs”) promulgated by the
Regulatory Authorities, as amended from time to time, as applicable to such Project.

     1.4 “Batch Cost” means the fee payable by Client for the performance of a batch manufacturing
or packaging Project as provided in Section 3.1.1.

 

 

     1.5 “Cardinal Health Indemnitees” has the meaning set forth in Section 9.2.

     1.6 “Cardinal Health Inventions” has the meaning set forth in Section 7.3.

     1.7 “Change Order” has the meaning set forth in Section 2.2.

     1.8 “Client Indemnitees” has the meaning set forth in Section 9.1.

     1.9 “Client Inventions” has the meaning set forth in Section 7.2.

     1.10 “Client-Supplied Materials” means any API or other materials provided by Client to
Cardinal Health.

     1.11 “Confidential Information” has the meaning set forth in Section 6.2.

     1.12 “Dispute” means any dispute, controversy or disagreement between the parties in
connection with this Agreement.

     1.13 “Facility” means a Cardinal Health facility identified in a Project Plan.

     1.14 “Intellectual Property” means all intellectual property (whether or not registered),
including without limitation, patents, patent applications, know-how, trade secrets, copyrights,
trademarks, designs, concepts, technical information, manuals, standard operating procedures,
instructions or specifications.

     1.15 “Losses” has the meaning set forth in Section 9.1.

     1.16 “Process Invention” has the meaning set forth in Section 7.2.

     1.17 “Product” means the finished product or material that is the subject of the Services to
be provided pursuant to the applicable Project Plan.

     1.18 “Project” means each project described in a Project Plan. For avoidance of doubt, a
collection of activities to be performed by Cardinal Health for which Cardinal Health has provided
Client one estimated cost in the applicable quotation will be considered one Project.

     1.19 “Project Plan” means a separate quotation or project plan agreed to by the parties in
writing, attached hereto, and incorporated by reference into this Agreement, and which defines the
scope of the Services to be performed by Cardinal Health and the responsibilities of the parties
with respect to such Services.

     1.20 “Regulatory Authority” means any governmental regulatory authority involved in regulating
any aspect of the development, manufacture, market approval, sale, distribution, packaging or use
of the Product.

     1.21 “Services” means all work performed by Cardinal Health for Client pursuant to the
applicable Project Plan.

2

 

     1.22 “Softgel Technology” is a proprietary technology for the manufacture of soft capsules
(“softgels”) for the oral administration of pharmaceutical active ingredients having certain
solubility characteristics and includes proprietary know-how including without limitation know-how
relating to (a) the development of fill and shell formulations; (b) the design and use of the
encapsulation process to enhance stability, solubility, bioavailability, and manufacturability of
active ingredient chemical entities in softgels; (c) the selection and preparation of solvents,
vehicles, excipients, surfactants, stabilizers, gelatin, gelatin substitutes, plasticizers and
other components of the liquid fill and the shell; and (d) certain encapsulation, drying and
related manufacturing techniques and machinery for making commercial quantities of softgels. The
Softgel Technology is included in Cardinal Health’s Intellectual Property.

     1.23 “Specifications” means all written specifications for finished product (i.e., after
completion of product development) agreed to by the parties in a Project Plan, and applicable
master batch records, protocols, or standard operating procedures.

     1.24 “Term” has the meaning set forth in Section 12.1.

ARTICLE 2

SCOPE

     2.1 Definition of Scope. Cardinal Health will perform the Services for each Project,
which Client has authorized Cardinal Health in writing to perform, in accordance with the specific
terms set forth in the applicable Project Plan, which shall: (a) clearly define the Project, the
Product, and the responsibilities of the parties with respect to such Project; (b) include, as
appropriate, the scope of work, pricing and payment schedule; and (c) be subject to all of the
terms and conditions of this Agreement, in addition to the specific details set forth in the
applicable Project Plan. Any quotation and/or set of Specifications for a Project shall become part
of the applicable Project Plan upon written approval or acceptance of such quotation and/or set of
Specifications by the parties. The parties acknowledge and agree that Cardinal Health Quotation No.
QTE-SZU-0002.03 entitled “Phase II Clinical Supplies of
Fenretinide 100mg  Softgels (Active and
Placebo)” and dated June 13, 2005, a copy of which is attached hereto and incorporated herein by
reference, constitutes the first Project Plan hereunder. Cardinal Health acknowledges that Client’s
execution of any Project Plan is not an authorization for Cardinal Health to perform all of the
Projects specified therein and that Cardinal Health must obtain Client’s prior written
authorization on a Project-by-Project basis before Cardinal Health begins performing each Project.
To the extent any terms or conditions of any Project Plan conflict with the terms and conditions of
this Agreement, the terms and conditions of this Agreement shall control, except to the extent that
such Project Plan expressly and specifically states an intent to supersede this Agreement on a
specific matter. This Agreement shall supersede the terms of any purchase order, acknowledgement or
delivery document.

     2.2 Amendments to Scope/Change Orders. Any material change in the details of a
Project Plan or the assumptions upon which such Project Plan is based (including, but not limited
to, changes in an agreed starting date for a Project or suspension of a Project by Client) may
require changes in the pricing and/or time lines, and shall require a written amendment to such
Project Plan (a “Change Order”). Each Change Order shall detail the requested changes to the
applicable task, responsibility, duty, pricing, time line or other matter. The Change Order will

3

 

become effective upon the execution of the Change Order by both parties, and Cardinal Health
will be given a reasonable period of time within which to implement the changes. Both parties agree
to act in good faith and promptly when considering a Change Order requested by the other party.
Without limiting the foregoing, Client agrees that it will not unreasonably withhold approval of a
Change Order if the proposed changes in pricing or time lines result from, among other appropriate
reasons, forces outside the reasonable control of Cardinal Health or changes in the assumptions
upon which the initial pricing or time lines were based. Cardinal Health reserves the right to
postpone effecting material changes in the applicable Project’s scope until such time as the
parties agree to and execute the corresponding Change Order.

ARTICLE 3

PRICING AND PAYMENT TERMS

     3.l Price and Price Changes.

          3.1.1 Price. Client shall pay for the Services performed by Cardinal Health as
provided in this Agreement and the applicable Project Plan.

          3.1.2 Price Changes. Cardinal Health may revise the prices provided in the Project
Plan for a Project, with Client’s prior written consent, which consent will not be unreasonably
withheld, to the extent the cost of performing the Services for such Project has increased because:
(a) the parties agreed to revise a technical test protocol, (b) any information relating to such
Project that was provided by Client is inaccurate or incomplete, (c) Client revised Cardinal
Health’s responsibilities, the Specifications, applicable test methods, final review of test
methods, procedures, assumptions, development processes, test methods or analytical requirements,
(d) Client requested an alternate report format, or (e) Client requested revisions to laboratory
reports, (f) Client requested copies of laboratory records (excluding a single copy of batch
records which will be provided for each batch manufactured hereunder). Any revisions in prices
proposed by Cardinal Health must be notified to Client prior to initiating or continuing additional
work on such Project.

          3.1.3 Retesting. All retesting performed at Client’s request, that is not directly
due to a Cardinal Health erroneous action or omission will be billed to the Client. All
investigational studies performed by Cardinal Health that are required by Applicable Laws and
approved by Client or requested by Client and that are not outlined in the applicable Project Plan
will be invoiced for the cost of performance at the current standard hourly rate, plus any
reasonable associated fees.

          3.1.4 Out Of Specification Investigations. Cardinal Health reserves the right to
expend up to 4 hours per occurrence to complete all required investigational work (such as OOS
investigations, trouble shooting chromatographic methods, etc.) without prior approval from the
Client. If the additional work requires going beyond 4 hours, the Client will be contacted prior to
continuation. Cardinal Health will not perform the additional work until it receives Client’s
approval in writing.

          3.1.5 Cancellations. Client may cancel any Project at any time with or without cause,
subject to the payment provisions of this Section 3.1.5. If Client cancels any Project which

4

 

Client has authorized Cardinal Health to initiate, without cause, Client shall pay Cardinal
Health as described in Section 12.4 and in this Section 3.1.5: (a) for batch manufacture or
packaging, Client shall pay a fee in accordance with the following schedule:

	 	 	 	 	 
	Notification prior to Date of Compounding	 	Fee (% of Total Batch Cost)
	[* * *]
	 	 	[* * *]	 

and (b) for any Project that is not batch manufacture or packaging, Client shall pay (i) all costs
for materials purchased and labor for the time spent by Cardinal Health in performing the Services
up to the point of cancellation based on the rates provided in the Project Plan for such cancelled
Project, plus (ii) [* * *]. If a Project that Client has authorized Cardinal Health to initiate is
delayed by more than [* * *] at Client’s request, Cardinal Health, at its option, may consider such
Project cancelled without cause and will charge Client the applicable charges. If Client cancels
any Project which Client has authorized Cardinal Health to initiate, for cause as provided in
Section 12.3(b) of this Agreement. Client shall pay Cardinal Health the amount described in clause
(b)(i), above, and any applicable charges described in Section 12.4, below. The fees payable by
Client to Cardinal Health under this Section 3.1.5 and Section 12.4, below, constitute Client’s
entire obligation and Cardinal Health’s sole and exclusive remedy in the event Client cancels any
Project under this Agreement. Upon such payment being made by Client, the materials referred to in
clause (b)(i) above shall be returned by Cardinal Health to Client, at Client’s expense.

     3.2 Invoicing. Cardinal Health shall invoice Client as follows:

          3.2.1 For lot manufacture and/or packaging, Cardinal Health shall invoice Client upon [* * *].
The invoice must itemize each completed milestone in accordance with the milestones for the
applicable Project as described in the applicable Project Plan.

          3.2.2 For any Project activity that can be completed within [* * *] (other than lot
manufacture and/or packaging), Cardinal Health shall invoice Client upon completion of the
applicable Project.

          3.2.3 For any Project activity that cannot be completed within [* * *] (other than lot
manufacture and/or packaging), Cardinal Health shall invoice Client on a [* * *] basis but no
earlier than [* * *] for the work performed during the
prior [* * *].

     3.3 Payment Terms. [* * *]

     3.4 Advance Payment. If Client has failed to timely pay any fees due on more than [*
* *] occasions in any [* * *] period, Client’s credit shall be deemed impaired, and Cardinal Health
shall have the right to require payment in advance before making any further shipment of the
Product. If Client shall fail, within a reasonable time, to make such payment in advance, Cardinal
Health shall have the right, at its option, to suspend any further deliveries hereunder until such
default is corrected, without thereby releasing Client from its payment obligations accrued under
this Agreement.

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     3.5 Taxes. All taxes, duties and other amounts assessed (excluding tax based on net
income and franchise taxes) on the services, components, API or the Product prior to or upon sale
to Client and on any Client owned tooling and equipment are the responsibility of Client, and
Client shall reimburse Cardinal Health for any such taxes, duties or other expenses paid by
Cardinal Health.

     3.6 Shipments. All product, raw materials and components shipped by Cardinal Health
are shipped F.O.B., Facility. All product, raw materials, and components will be shipped in
accordance with Client’s packing and shipping instructions.

ARTICLE 4

ADDITIONAL TERMS FOR MANUFACTURING AND PACKAGING

     4.1 Applicability of Terms. The terms set forth in this Article shall apply only in
the event that Cardinal Health is providing pre-commercial manufacturing and packaging services
pursuant to this Agreement.

     4.2 Non-Conforming Product. Client shall notify Cardinal Health within [* * *]
following delivery of Product to Client if Client has determined that such Product does not conform
to Specifications and shall provide Cardinal Health a sample of such non conforming Product. If
Cardinal Health agrees that the batch is non-conforming, Cardinal Health shall, at Client’s option,
promptly replace the non-conforming Product at no charge in accordance with this Article, or credit
or refund any payments made by Client for such Product including reimbursing Client for the cost of
the API (subject to the limitations set forth in Article 10, below), if Cardinal Health does not
agree with Client’s determination that such Product fails to meet the Specifications, then after
reasonable efforts to resolve the disagreement, either party may submit a sample of such Product to
a mutually agreed upon independent third party laboratory to determine whether the Product meets
the Specifications. The independent party’s results shall be final and binding. Unless otherwise
agreed to by the parties in writing, the costs associated with such testing and review shall be
borne by the non-prevailing party.

     4.3 Replacement of Non-Conforming Product. THE OBLIGATION OF CARDINAL HEALTH TO
REPLACE NON-CONFORMING PRODUCT IN ACCORDANCE WITH THE SPECIFICATIONS OR REFUND OR CREDIT ANY
PAYMENTS MADE FOR SUCH PRODUCT (INCLUDING REFUNDING THE COST OF THE API) SHALL BE CLIENT’S SOLE AND
EXCLUSIVE REMEDY UNDER THIS AGREEMENT FOR PRODUCT THAT DOES NOT CONFORM AND IS IN LIEU OF ANY OTHER
WARRANTY, EXPRESS OR IMPLIED.

     4.4 Supply of Material for Defective Product. In the event Cardinal Health is
required to replace Product pursuant to Section 4.2, above, Cardinal Health shall supply, at its
sole cost, the manufacturing and/or packaging components necessary, as applicable, to manufacture
and/or package replacement Product, and Client shall supply sufficient quantities of the API for
Cardinal Health to complete such replacement (provided, however, that Cardinal Health will
reimburse Client, within [* * *] after Cardinal Heath receives notice of rejection from Client, the
cost of such API, subject to the limitations of liability described in Article 10, below).

6

 

     4.5 Loss or Destruction of API. Title to the API will remain with Client at all
times. Cardinal Health will use diligent efforts to protect the API in its possession from loss or
damage at all times. Subject to the limitation of liability described in Article 10, below,
Cardinal Health will be responsible for any loss or damage to API in excess of normal manufacturing
and/or packaging losses to the extent such loss or damage is caused by any negligent or intentional
acts or omissions by Cardinal Health or its employees or contractors. Upon receiving the API,
Cardinal Health will review the batch records and release data for the API to confirm that the API
is acceptable. If Cardinal Health fails to reject the API within [* * *] of receiving the API,
Cardinal Health will be deemed to have accepted the API. Cardinal Health will segregate the API
from other products or inventory of third parties maintained on its premises and indicate Client’s
ownership of the API in a prominent manner.

     4.6 Non-Validated Processes. Notwithstanding any other term in this Agreement, Client
is liable to Cardinal Health for all costs incurred and all payments due to Cardinal Health under
this Agreement even if Cardinal Health does not ultimately manufacture a Product meeting the
Specifications applicable to such Product, including without limitation all costs for Product lots
manufactured which do not satisfy Client’s Specifications if the non-compliance to the
Specifications is solely due to Client’s failure to deliver accurate and complete information which
impacts the production process and which failure prevented Cardinal Health from properly
manufacturing the Product.

     4.7 Unlabeled Product. If Cardinal Health is to provide Client with Product that is
not labeled, Client represents and warrants that it will comply with all applicable regulations,
including without limitation 21 CFR § 201.150.

     4.8 Failure to Take Delivery. If Client fails to take delivery on any scheduled
delivery date, Client shall be invoiced on the first day of each month for the stored Product and
reasonable administration and storage costs. For each such batch of undelivered Product, Client
agrees that: (a) Client has made a fixed commitment to purchase such Product; (b) risk of ownership
for such Product passes to Client; (c) such Product shall be on a bill and hold basis for
legitimate business purposes; (d) unless the parties mutually agree to a revised delivery date at
the time of billing, Cardinal Health shall have the right to ship the Product to Client within four
(4) months after billing; and (e) Client will be responsible for any decrease in market value of
such Product that relates to factors and circumstances outside of Cardinal Health’s control. Within
[* * *] following a written request from Cardinal Health, Client shall provide Cardinal Health with
a letter confirming items (a) through (e) of this Section for each Batch of undelivered Product.

ARTICLE 5

REGULATORY

     5.1 Audit. [* * *] during the Term of this Agreement, and subject to Cardinal
Health’s obligations of confidentiality to third parties, Cardinal Health will permit Client to
conduct an audit of those portions of the Facility where Services are being conducted upon
reasonable advance notice during regular business hours. Upon request, Client may conduct
additional audits, provided that Client shall reimburse Cardinal Health for time and expenses
incurred by Cardinal Health in connection with any such additional audit, unless a prior audit has

7

 

revealed that Cardinal Health has failed to perform in accordance with the terms of this
Agreement.

     5.2
Observation. In addition to the right to audit, Client may
have up to three (3) representatives at the Facilities (but only two
(2) at a time in the encapsulation suite) to
observe the Services, provided that Client provides Cardinal Health
at least ten (10) advance
written notice of the attendance of such Client representatives. Such representatives shall comply
with Cardinal Health’s rules and regulations. Client shall indemnify and hold harmless Cardinal
Health for any action or activity of such representatives while on Cardinal Health’s premises.

     5.3 Regulatory Inspections. Each party shall: (a) notify the other party promptly of
any inspection or inquiry by any Regulatory Authority concerning any Project or Product of Client;
and (b) forward to the other party copies of any correspondence from any Regulatory Authority
relating to such a Project or Product, including, but not limited to, Form FD-483 notices, FDA
refusal to file, rejection or warning letters. Where reasonably practicable, each party will be
given the opportunity to have a representative present during an inspection by a Regulatory
Authority. Each party acknowledges that it may not direct the manner in which the other party
fulfills its obligations to permit inspection by a Regulatory Authority.

     5.4 Record Retention. Unless the parties otherwise agree in writing, Cardinal Health
will retain batch, laboratory and other technical records for the
minimum period required by applicable laws, rules, regulations and
guidelines.

     5.5 Quality Agreement. Any quality agreement executed by the parties related to the
Services shall in no way determine liability or financial responsibility of the parties for the
responsibilities set forth therein. In the event of a conflict between the terms of this Agreement
and the quality agreement, this Agreement shall control, unless the quality agreement specifically
states otherwise.

     5.6 Regulatory Compliance. Client shall be solely responsible for all permits and
licenses required by any Regulatory Authority with respect to the Product and the Services under
this Agreement, including any product licenses, applications and amendments in connection there’
provided, however that Cardinal Health will be responsible to maintain all permits and licenses
required by any Regulatory Authority with respect to the Facility. During the Term, Cardinal Health
will assist Client with all regulatory matters relating to Services under this Agreement, at
Client’s request and at Client’s expense. Each party intends and commits to cooperate to satisfy
all Applicable Laws relating to Services under this Agreement.

ARTICLE 6

CONFIDENTIALITY AND NON-USE

     6.1 Mutual Obligation. Cardinal Health and Client agree that they will not disclose
the other party’s Confidential Information (defined below) to any third party without the prior
written consent of the other party except as required by law, regulation or court or administrative
order; provided, however that prior to making any such legally required disclosure, the party
making such disclosure shall give the other party as much prior notice of the requirement for and
contents of such disclosure as is practicable under the circumstances. Notwithstanding the
foregoing, each party may disclose the other party’s Confidential Information to any of its

8

 

Affiliates and employees and contractors of the recipient party and its Affiliates that (a)
need to know such Confidential Information for the purpose of performing under this Agreement, (b)
are advised of the contents of this Article, and (c) agree to be bound by the terms of this
Article.

     6.2 Definition. As used in this Agreement, the term “Confidential information”
includes all such information furnished by Cardinal Health or Client, or any of their respective
representatives or Affiliates, to the other or its representatives or Affiliates, whether furnished
before, on or after the date of this Agreement and furnished in any form, including but not limited
to written, verbal, visual, electronic or in any other media or manner. Confidential Information
includes all proprietary technologies, know-how, trade secrets, discoveries, inventions and any
other Intellectual Property (whether or not patented), analyses, compilations, business or
technical information and other materials prepared by either party, or any of their respective
representatives, containing or based in whole or in part on any such information furnished by the
other party or its representatives. Confidential Information also includes the existence of this
Agreement and its terms, provided that either party may disclose the existence and/or the terms of
this Agreement without the prior written consent of the other party, (i) as required by law; (ii)
to its attorneys, accountants, and other professional advisors under a duty of confidentiality;
(iii) to a third party under a duty of confidentiality in connection with obtaining financing or a
proposed merger or a proposed sale of all or part of such party’s business.

     6.3 Exclusions. Notwithstanding Section 6.2, Confidential Information does not
include information that (a) is or becomes generally available to the public or within the industry
to which such information relates other than as a result of a breach of this Agreement, or (b) is
already known by the receiving party at the time of disclosure as evidenced by the receiving
party’s written records, or (c) becomes available to the receiving party on a non-confidential
basis from a source that is entitled to disclose it on a non-confidential basis, or (d) was or is
independently developed by or for the receiving party without reference to the Confidential
Information, as evidenced by the receiving party’s written records.

     6.4 No Implied License. The receiving party will obtain no right of any kind or
license under any patent application or patent by reason of this Agreement (except as provided in
Article 7, below). All Confidential Information will remain the sole property of the party
disclosing such information or data.

     6.5 Return of Confidential Information. At any time during the term or upon
termination of this Agreement, the receiving party shall, upon request, promptly (but no later than
thirty (30) days after the request) return all Confidential Information of the disclosing party which the
receiving party no longer has the right to use, including any copies thereof, and cease its use or,
at the request of the disclosing party, shall promptly destroy the same and certify such
destruction to the disclosing party (except for a single copy thereof, which may be retained for
the sole purpose of determining the scope of the obligations incurred under this Agreement).

     6.6 Survival. The obligations of this Article 6 will terminate [* * *] years from the
expiration of this Agreement.

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ARTICLE 7

INTELLECTUAL PROPERTY

     7.1 Ownership of Existing Technologies. All rights to and interests in Client’s
Intellectual Property and Client’s Confidential Information shall remain vested solely in Client,
and no right or interest therein is transferred or granted to Cardinal Health under this Agreement
(except that Client hereby grants to Cardinal Health a non-exclusive, non-transferable (except as
permitted under Section 14.7, below), royalty-free license to use Client’s Intellectual Property
and Confidential Information solely as necessary for Cardinal Health to perform its obligations
under this Agreement). All rights to and interests in Cardinal Health’s Intellectual Property and
Cardinal Health’s Confidential Information shall remain vested solely in Cardinal Health, and no
right or interest therein is transferred or granted to Client under this Agreement (except as
expressly provided in Section 7.3, below).

     7.2 Client Inventions. Subject to the limitations of Sections 7.1 and 7.3, Client
shall own all data, work product, results, reports, inventions, developments, technologies,
information, and intellectual property, whether or not patentable, that are generated by Cardinal
Health in connection with the performance of each Project and arise from, are based upon, or relate
to Client’s API or Cardinal Health’s use of Client’s Confidential Information (“Client
Inventions”); provided, however that Client Inventions shall not include any
Process Invention. As used herein, “Process Invention” means any discovery, development, technology
or information, including, without limitation, any manufacturing, packaging or analytical process
or methodology, developed by Cardinal Health, whether or not patentable, that does not relate
exclusively to Client’s API. Cardinal Health hereby irrevocably and unconditionally assigns and
transfers to Client any and all rights and interest Cardinal Health may have in the Client
Inventions, including all intellectual property rights therein. Client will be responsible for
obtaining patent protection on inventions relating to the Client Inventions at its own cost.
Cardinal Health agrees to execute all additional documents necessary to perfect title in any Client
Inventions in Client.

     7.3 Cardinal Health Inventions. Subject to the limitations of Sections 7.1 and 7.2,
Cardinal Health shall own Process Inventions and all inventions, developments, technologies and
information, whether or not patentable, that arise from, are based upon, or relate to the Process
Inventions or Cardinal Health’s Confidential Information or Intellectual Property;
provided, however that no such invention or development shall exclusively relate to
Client’s API, is derived from Client’s Intellectual Property or relates to any Client’s
Confidential Information (“Cardinal Health Inventions”). Cardinal Health will be responsible for
obtaining patent protection on Cardinal Health Inventions at its own cost. Client agrees to execute
all documents necessary to perfect title in any Cardinal Health Inventions in Cardinal Health.
Cardinal Health hereby grants to Client a non-exclusive, worldwide, non-transferable (except as
permitted under Section 14.7, below), fully-paid, royalty free license to use the Process
Inventions solely in connection with the Product that is the subject of the Project in which such
Process Invention was developed solely during the Term.

     7.4 Exclusivity. During the period beginning on the date of this Agreement and
continuing through the earlier of [* * *], Cardinal Health agrees that it will not design, develop,
research, manufacture, or supply, or assist any third party to design, develop, research,

10

 

manufacture, or supply, any product in the oral softgel dosage form which includes Fenretinide
intended for marketing in the United States or the European Union, without Client’s prior written
consent. [* * *]

ARTICLE 8

REPRESENTATIONS AND WARRANTIES

     8.1 Cardinal Health. Cardinal Health represents, warrants, and covenants to Client
that:

          8.1.1 Cardinal Health will perform each Project in a professional manner consistent with
industry standard, and in accordance with this Agreement and the applicable Project Plan and
Specifications;

          8.1.2 Cardinal Health will comply with all Applicable Laws in the course of performing under
this Agreement (including any manufacturing, analyzing, and/or packaging of any Product by Cardinal
Health); and

          8.1.3 Cardinal Health has (or, prior to performing the applicable Services, will have) all
necessary authority, permits, and right to perform the Services that it is agreeing to perform
under this Agreement.

     8.2 Client. Client represents, warrants, and covenants to Cardinal Health that:

          8.2.1 The Client-Supplied Materials will comply with all applicable Specifications and will
have been produced in compliance with Applicable Laws and the applicable Project Plan;

          8.2.2 It has (or, prior to providing any Intellectual Property to Cardinal Health, will have)
all necessary authority and all right, title and interest in and to any Intellectual Property
provided by Client to Cardinal Health which is related to any Product;

          8.2.3 It has (or will have) provided all safe handling instructions, health and environmental
information and material safety data sheets applicable to each Product and any Client-Supplied
Materials in sufficient time prior to delivery to Cardinal Health for review and training by
Cardinal Health, except as disclosed to Cardinal Health in writing by Client;

          8.2.4 All Product delivered to Client by Cardinal Health will be held, used and/or disposed of
by Client in accordance with all Applicable Laws;

          8.2.5 Client will comply with all Applicable Laws applicable to Client’s performance under
this Agreement and its use of any materials or Products provided by Cardinal Health under this
Agreement or any Project Plan; and

          8.2.6 Unless otherwise agreed by the parties in writing with respect to a Project, Client has
(or will have) (a) provided complete and accurate scientific data regarding such Project and
Client’s requirements for such Project, including without limitation test methods and development,
formulation, fill and finish of the Product if applicable, (b) provided Cardinal

11

 

Health with complete and accurate information necessary to develop the scope of work and
estimated or fixed costs for such Project, (c) if applicable, reviewed and approved all in process
and finished Product test results to ensure conformity of such results with the Specifications,
regardless of which party is responsible for finished Product release, and (d) if applicable,
prepared all submissions to Regulatory Authorities.

     8.3 Mutual. Each party hereby represents and warrants to the other party that:

          8.3.1 Existence and Power. Such party (a) is duly organized, validly existing and in
good standing under the laws of the state in which it is organized, (b) has the power and authority
and the legal right to own and operate its property and assets, and to carry on its business as it
is now being conducted, and (c) is in compliance with all requirements of Applicable Laws, except
to the extent that any noncompliance would not materially adversely affect such party ability to
perform its obligations under the Agreement;

          8.3.2 Authorization and Enforcement of Obligations. Such party (a) has the power and
authority and the legal right to enter into this Agreement and to perform its obligations
hereunder, and (b) has taken all necessary action on its part to authorize the execution and
delivery of this Agreement and the performance of its obligations hereunder;

          8.3.3 Execution and Delivery. This Agreement has been duly executed and delivered on
behalf of such party, and constitutes a legal, valid, binding obligation, enforceable against such
party in accordance with its terms;

          8.3.4 No Consents. As of the effective date of this Agreement, all necessary
consents, approvals and authorizations of all Regulatory Authorities and other persons (if any)
required to be obtained by such party in connection with this Agreement have been (or will have
been) obtained (including without limitation consent from National Cancer Institute regarding the
use of batch records related to production of Fenretinide, which consent has been obtained by
Client); and

          8.3.5 No Conflict. The execution and delivery of this Agreement by such party and the
performance by such party of its obligations hereunder (a) do not conflict with or violate any
requirement of Applicable Laws, and (b) do not materially conflict with, or constitute a material
default or require any consent under, any contractual obligation of such party.

     8.4 Warranty Disclaimer. THE REPRESENTATIONS AND WARRANTIES SET FORTH N THIS ARTICLE
8 ARE THE SOLE AND EXCLUSIVE REPRESENTATIONS AND WARRANTIES MADE BY EACH PARTY TO THE OTHER AND
NEITHER PARTY MAKES ANY OTHER REPRESENTATIONS, WARRANTIES OR GUARANTIES OF ANY KIND WHATSOEVER,
INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS
FOR A PARTICULAR PURPOSE.

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ARTICLE 9

INDEMNIFICATION

     9.1 Indemnification by Cardinal Health. Cardinal Health shall indemnify and hold
harmless Client, its Affiliates, and their respective directors, officers, employees and agents
(“Client Indenmitees”) from and against any and all suits, claims, losses, demands, liabilities,
damages, costs and expenses (including reasonable attorneys’ fees) in connection with any suit,
demand or action by any third party (“Losses”) arising out of or resulting from (A) any breach of
its representations, warranties or obligations set forth in this Agreement (including without
limitation those relating to Cardinal Health’s performance in compliance with the Specifications
and with Applicable Laws); (B) any negligence or willful misconduct by Cardinal Health, or its
employees or contractors; (C) any actual or alleged infringement or violation of any patent, trade
secret, copyright or other proprietary rights of a third party based on any process of
manufacturing, analyzing, or packaging of a Product performed by Cardinal Health, or (D) claims of
defective manufacturing by Cardinal Health, except to the extent that any of the foregoing arises
out of or results from any Client Indemnitee’s negligence, willful misconduct o breach of this
Agreement.

     9.2 Indemnification by Client. Client shall indemnify and hold harmless Cardinal
Health, its Affiliates, and their respective directors, officers, employees and agents (“Cardinal
Health Indemnitees”) from and against all Losses arising out of or resulting from (A) any breach of
its representations, warranties or obligations set forth in this Agreement (including without
limitation those relating to compliance with Applicable Laws); (B) any sale, promotion,
distribution, use of or exposure to the Product or any Client-Supplied Materials, including without
limitation product liability (unless based on defective manufacturing by Cardinal Health) or strict
liability claims; (C) the conduct of any clinical trials relating to any material or Product which
is the subject of this Agreement or any Project Plan; (D) any actual or alleged infringement or
violation of any patent, trade secret, copyright, or other proprietary rights of a third party
(unless based on any process of manufacturing, analyzing, or packaging of a Product performed by
Cardinal Health); or (E) any negligence or willful misconduct by Client, or its employees or
contractors, except to the extent that any of the foregoing arises out of or results from any
Cardinal Health Indemnitee’s negligence, willful misconduct or breach of this Agreement.

     9.3 Indemnification Procedures. All indemnification obligations in this Agreement are
conditioned upon the party seeking indemnification: (A) promptly notifying the indemnifying party
of any claim or liability of which the party seeking indemnification becomes aware (including a
copy of any related complaint, summons, notice or other instrument); provided, however, that
failure to provide such notice within a reasonable period of time shall not relieve the
indemnifying party of any of its obligations hereunder except to the extent the indemnifying party
is prejudiced by such failure; (B) cooperating with the indemnifying party in the defense of any
such claim or liability (at the indemnifying party’s expense); and (C) not compromising or settling
any claim or liability without prior written consent of the indemnifying party.

13

 

ARTICLE 10

LIMITATIONS OF LIABILITY

     10.1 CARDINAL HEALTH’S LIABILITY UNDER THIS AGREEMENT FOR ANY AND ALL CLAIMS FOR LOST, DAMAGED
OR DESTROYED API OR OTHER CLIENT- SUPPLIED MATERIALS WHETHER OR NOT SUCH API OR CLIENT-SUPPLIED
MATERIALS ARE INCORPORATED INTO FINISHED PRODUCT SHALL NOT EXCEED (A) FOR ALL SUCH CLAIMS, IN THE
AGGREGATE, RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF CARDINAL HEALTH, [* * *],
AND (B) FOR ALL OTHER CLAIMS, IN THE AGGREGATE, [* * *]. The parties acknowledge and agree that any
claim for lost, damaged, or destroyed API shall be valued at Client’s actual cost, not to exceed [*
* *] per kilogram.

     10.2 CARDINAL HEALTH’S TOTAL LIABILITY UNDER THIS AGREEMENT (EXCEPT FOR LIABILITY DESCRIBED IN
SECTION 10.1, ABOVE), WHETHER IN CONTRACT OR TORT, INCLUDING WITHOUT LIMITATION ANY OF CARDINAL
HEALTH’S INDEMNITY OR OTHER FINANCIAL OBLIGATIONS UNDER ARTICLE 9, SHALL (A) WITH RESPECT TO
ANALYTICAL SERVICES, BE LIMITED TO [* * *], AND (B) WITH RESPECT TO ALL OTHER SERVICES, IN NO EVENT
EXCEED [* * *].

     10.3 NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES ARISING OUT OF PERFORMANCE UNDER THIS AGREEMENT, INCLUDING WITHOUT
LIMITATION, LOSS OF REVENUES, PROFITS OR DATA, WHETHER IN CONTRACT OR TORT, EVEN IF SUCH PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

ARTICLE 11

INSURANCE

     11.1 Cardinal Health. Cardinal Health shall, at its own cost and expense, obtain and
maintain in full force and effect the following insurance during the Term: (A) Commercial General
Liability insurance with per-occurrence and general aggregate limits of not less than [* * *]; (B)
Products and Completed Operations Liability Insurance with per-occurrence and general aggregate
limits of not less than [* * *]; (C) Workers’ Compensation and Employer’s Liability Insurance with
statutory limits for Workers’ Compensation and Employer’s Liability insurance limits of not less
than [* * *]; (D) Professional Services Errors & Omissions Liability Insurance with per claim and
aggregate limits of not less than [* * *] covering sums that Cardinal Health becomes legally
obligated to pay as damages resulting from claims made by Client for errors or omissions committed
in the conduct of the services outlined in the Agreements. In lieu of insurance, Cardinal Health
may self-insure any or a portion of the above required insurance. In the event that any of the
required policies of insurance are written on a claims made basis, then such policies shall be
maintained during the entire Term and for a period of not less than [* * *]. Cardinal Health shall
obtain a waiver from any insurance carrier with whom Cardinal Health carries Workers’ Compensation
insurance releasing its subrogation rights against Client. Client shall be named as an additional
insured under the Commercial General Liability and Products and Completed Operations Liability
insurance policies as respects the manufacturing services outlined in this Agreement. Cardinal
Health shall furnish certificates of insurance for all of the

14

 

above noted policies and required additional insured status to Client as soon as practicable
after the Effective Date of the Agreement and upon renewal of any such policies. Each insurance
policy that is required under this Section shall be obtained from an insurance carrier with an A.M.
Best rating of at least A- VII.

     11.2 Client Insurance. Client shall, at its own cost and expense, obtain and maintain
in full force and effect the following insurance during the Term: (A) Products and Completed
Operations Liability Insurance with per-occurrence and general aggregate limits of not less than [*
* *]; (B) Workers’ Compensation and Employer’s Liability Insurance with statutory limits for
Workers’ Compensation and Employer’s Liability insurance limits of not less than [* * *]; (C) All
Risk Property Insurance, including transit coverage, in an amount equal to full replacement value
covering Client’s property while it is at Cardinal Health’s facility or in transit to or from
Cardinal Health’s facility. In the event that any of the required policies of insurance are written
on a claims made basis, then such policies shall be maintained during the entire Term and for a
period of not less than [* * *]. Client shall obtain a waiver from any insurance carrier with whom
Client carries Workers’ Compensation insurance releasing its subrogation rights against Cardinal
Health. Client shall obtain a waiver from any insurance carrier with whom Client carries Property
Insurance releasing its subrogation rights against Cardinal Health. Cardinal Health and its
Subsidiaries and Parent Corporation shall be named as additional insureds under the Products and
Completed Operations Liability insurance policies as respects the products and completed operations
outlined in this Agreement. Client shall furnish certificates of insurance for all of the above
noted policies and required additional insured status to Cardinal Health as soon as practicable
after the Effective Date of the Agreement and upon renewal of any such policies. Each insurance
policy that is required under this Section shall be obtained from an insurance carrier with an A.M.
Best rating of at least A- VII.

ARTICLE 12

TERM AND TERMINATION

     12.1 Term. The term of this Agreement shall commence as of the date set forth above
and shall continue until [* * *], unless either party earlier terminates this Agreement as set
forth in Section 12.2 or Section 12.3, as applicable (“Term”). The term of this Agreement may be
extended or renewed only upon the written Agreement of the parties.

     12.2 Termination Without Cause. Client may terminate this Agreement, any Project
Plan, or any Project without cause at any time during the Term of the Agreement.

     12.3 Immediate Termination. Either party shall have the right to immediately
terminate this Agreement if (a) the other party files a petition in bankruptcy, or enters into an
agreement with its creditors, or applies for or consents to the appointment of a receiver or
trustee, or makes an assignment for the benefit of creditors, or suffers or permits the entry of
any order adjudicating it to be bankrupt or insolvent and such order is not discharged within [* *
*]; or (b) if the other party materially breaches any of the provisions of this Agreement, and such
breach is not cured within [* * *] after the giving of written notice.

     12.4 Effect of Termination. Expiration or termination of this Agreement shall be
without prejudice to any rights or obligations that accrued to the benefit of either party prior to

15

 

such expiration or termination. In the event that this Agreement, any Project Plan, or any
Project is terminated, Client shall pay Cardinal Health for all Services performed in accordance
with any terminated Project up to the date of termination plus any applicable cancellation fees,
and will reimburse Cardinal Health for all reasonable, pre-approved costs and expenses incurred,
and all non-cancelable commitments made, in the performance of Services pursuant to each such
terminated Project.

ARTICLE 13

NOTICE

     All notices and other communications hereunder shall be in writing and shall be deemed given:
(A) when delivered personally; (B) when delivered by facsimile transmission (receipt verified); (C)
when received or refused, if mailed by registered or certified mail (return receipt requested),
postage prepaid; or (D) when delivered if sent by express courier service, to the parties at the
following addresses (or at such other address for a party as shall be specified by like notice;
provided, that notices of a change of address shall be effective only upon receipt thereof):

	 	 	 	 	 
	 

	 	To Client:
	 	Sytera Inc.
	 

	 	 	 	505 Coast Boulevard South, Suite 412
	 

	 	 	 	La Jolla, California 92037
	 

	 	 	 	Facsimile No. (858) 754-3001.
	 

	 	 	 	Attn: Chief Executive Officer
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Paul Hastings, LLP
	 

	 	 	 	3579 Valley Centre Drive
	 

	 	 	 	San Diego, CA 92130
	 

	 	 	 	Facsimile No. (858) 720-2555
	 

	 	 	 	Attn: Carl Sanchez
	 
	 	 	 	 
	 

	 	To Cardinal Health:
	 	Cardinal Health PTS, LLC
	 

	 	 	 	14 Schoolhouse Road
	 

	 	 	 	Somerset, New Jersey 08873
	 

	 	 	 	Facsimile No. (732) 537-6490
	 

	 	 	 	Attn: President, Oral Technologies
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Cardinal Health, Inc.
	 

	 	 	 	7000 Cardinal Place
	 

	 	 	 	Dublin, Ohio 43017
	 

	 	 	 	Attn: Associate General Counsel,
	 

	 	 	 	Pharmaceutical Technologies and Services
	 

	 	 	 	Facsimile: (614) 757-5051

16

 

ARTICLE 14

MISCELLANEOUS

     14.1 Entire Agreement Amendments. This Agreement and each Project Plan, along with
any attachments and amendments, constitute the entire understanding between the parties and
supersedes any contracts, agreements or understanding (oral or written) of the parties with respect
to the subject matter hereof. No term of this Agreement may be amended except upon written
agreement of both parties, unless otherwise provided in this Agreement.

     14.2 Captions. The captions in this Agreement are for convenience only and are not to
be interpreted or construed as a substantive part of this Agreement

     14.3 Further Assurances. The parties agree to execute, acknowledge and deliver such
further instruments and to take all such other incidental acts as may be reasonably necessary or
appropriate to carry out the purpose and intent of this Agreement.

     14.4 No Waiver. Failure by either party to insist upon strict compliance with any
term of this Agreement in any one or more instances will not be deemed to be a waiver of its rights
to insist upon such strict compliance with respect to any subsequent failure.

     14.5 Severability. If any term of this Agreement is declared invalid or unenforceable
by a court or other body of competent jurisdiction, the remaining terms of this Agreement will
continue in full force and effect.

     14.6 Independent Contractors. The relationship of the parties is that of independent
contractors, and neither party will incur any debts or make any commitments for the other party
except to the extent expressly provided in this Agreement. Nothing in this Agreement is intended to
create or will be construed as creating between the parties the relationship of joint ventures,
co-partners, employer/employee or principal and agent.

     14.7 Successors and Assigns. This Agreement will be binding upon and inure to the
benefit of the parties, their successors and permitted assigns. Neither party may assign this
Agreement, in whole or in part, without the prior written consent of the other party, except that
either party may, without the other party consent, assign this Agreement to an Affiliate or to any
person or. entity who shall become a successor to substantially all of the business or assets of
the assigning company, whether by merger, sale of assets, sale of stock, or otherwise. Any
purported assignment of this Agreement, in whole or in part, in violation of this Section will be
null and void, ab initio.

     14.8 Governing Law. This Agreement shall be governed by and construed under the laws
of the State of Delaware, excluding its conflicts of law provisions. The United Nations Convention
on Contracts for the International Sale of Goods shall not apply to this Agreement. Any legal
action or other legal proceeding relating to this Agreement or the enforcement of any provision of
this Agreement must be brought or otherwise commenced in any state court located in San Diego
County, California or Franklin County, Ohio or any federal court located in the Southern District
of California or the Southern District of Ohio. Each party expressly and irrevocably consents and
submits to the jurisdiction of each such states and federal

17

 

courts (and each appellate court located in State of California or the State of Ohio) in
connection with any such legal proceeding.

     14.9 Dispute Resolution. If any Dispute arises between the parties, such Dispute
shall be presented to the respective presidents or senior executives of Cardinal Health and Client
for their consideration and resolution. If such parties cannot reach a resolution of the Dispute
within twenty (20) days, either party may initiate a legal action as provided in Section 14.8.

     14.10 Prevailing Party. In any dispute resolution proceeding between the parties in
connection with this Agreement, the prevailing party will be entitled to its reasonable attorney’s
fees and costs in such proceeding.

     14.11 Counterparts. This Agreement may be executed in one or more counterparts, each
of which will be deemed an original but all of which together will constitute one and the same
instrument. Any photocopy, facsimile or electronic reproduction of the executed Agreement shall
constitute an original.

     14.12 Publicity. Neither party will make any press release or other public disclosure
regarding this Agreement or the transactions contemplated hereby without the other party’s express
prior written consent, except as required under applicable law or by any governmental agency or
otherwise provided in Article 6, in which case the party required to make the press release or
public disclosure shall use commercially reasonable efforts to obtain the approval of the other
party as to the form, nature and extent of the press release or public disclosure prior to issuing
the press release or making the public disclosure.

     14.13 Setoff. Without limiting Cardinal Health’s rights under law or in equity,
Cardinal Health and its Affiliates, parent or related entities, collectively or individually, may
exercise a right of set-off against any and all amounts due to Cardinal Health from Client. For
purposes of this Section, Cardinal Health, its Affiliates, parent or related entities shall be
deemed to be a single creditor.

     14.14 Survival. The rights and obligations of the parties shall continue under
Articles I (Definitions), 6 (Confidentiality), 7 (Intellectual Property), 9 (Indemnification), 10
(Limitations of Liability), 11 (Insurance) to the extent expressly stated therein, 13 (Notice), and
14 (Miscellaneous) and Sections 5.4 (Record Retention), 8.1, 8.2, and 8.3.4 (certain
representations, warranties, and covenants), and 12.3 (Effect of Termination), notwithstanding
expiration or termination of this Agreement.

     14.15 Force Majeure. Except as to payments required under this Agreement, neither
party shall be liable in damages for, nor shall this Agreement be terminable or cancelable by
reason of, any delay or default in such party ‘s performance hereunder if such default or delay is
caused by events beyond such party’s reasonable control including, but not limited to, acts of God,
regulation or law or other action or failure to act of any government or agency thereof, war or
insurrection, civil commotion, destruction of production facilities or materials by earthquake,
fire, flood or storm, labor disturbances, epidemic, or failure of suppliers, public utilities or
common carriers; provided however, that the party seeking relief hereunder shall immediately notify
the other party of such cause(s) beyond such party’s reasonable control. The party that

18

 

may invoke this section shall use all reasonable endeavors to reinstate its ongoing
obligations to the other. If the cause(s) shall continue unabated for one hundred twenty (120)
days, then the other party shall have the right (exercisable by written notice) to terminate this
Agreement and cancel all outstanding Projects without Client having to pay any cancellation fees.

     IN WITNESS WHEREOF, the parties have caused their duly authorized representative to execute
this Agreement effective as of the date first written above.

	 	 	 	 	 	 	 	 	 	 	 
	CARDINAL HEALTH PTS, LLC	 	 	 	SYTERA INC.
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Thomas Stuart
	 	 	 	By:
	 	/s/ Jay Lichter	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name: Thomas Stuart	 	 	 	Name: Jay Lichter
	Its: President, Oral Technologies	 	 	 	Its: Vice President

19

 

ATTACHMENT TO SOFTGEL DEVELOPMENT AND CLINICAL SUPPLY

AGREEMENT ON FOLLOWING PAGES

 

 

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

Quotation

Phase II Clinical Supplies of Fenretinide

100mg Softgels (Active and Placebo)

QTE-SZU-0002.03

Confidential for Sytera, Inc.

Prepared for Mark Edgar

505 Coast Boulevard South, Suite 412

La Jolla, CA 92037

Phone: 858-248-0218

Cardinal Health Contact: Aris Gennadios, Ph.D.

Phone: 732-537-6366

June 13, 2005

BioPharmaceutical Product Development

Pharmaceutical Product Development

Clinical Packaging Services

Cardinal Health Analytical Chemistry Services Scientific and Regulatory Consulting

Pulmonary and Nasal Product Development

Clinical arid Small Scale Commercial Manufacturing

14 Schoolhouse Road • Somerset, NJ 08873

Direct: (732) 537-6200 • Facsimile: (732) 537-6480 • www.cardinal.com/pts

 

 

					
	QTE-SZU-0002.03
	 	CONFIDENTIAL
	 	PAGE 2
	 	 	 	 	 

Executive Summary

Cardinal Health, Pharmaceutical Development (Cardinal Health) will manufacture [* * *] cGMP
batches for Sytera, Inc. (Sytera) for Phase I clinical and stability studies at Cardinal Health,
Somerset Cardinal Health will manufacture [* * *] placebo
and [* * *] active Fenretinide 100mg
softgel batches with a theoretical batch size of [* * *] softgels per active batch and [* * *]
softgels for placebo batch.

The
estimated cost for Fenretinide 100mg softgels clinical supplies is [* * *] for [* * *]
batches of active and [* * *] matching placebo over a period of approximately [* * *], including
stability studies.

Section 1. Scope of Work

Cardinal
Health has developed and manufactured Fenretinide 100mg softgels in Cardinal
Health, St. Petersburg. Sytera has requested Cardinal Health, Somerset to provide a proposal for
Phase II clinical supplies batch manufacture of Fenretinide 100mg softgels. No development
activities will be performed, and the previously used formulation and processing conditions will be
applied for clinical batch manufacture. Cardinal Health Will perform full release testing and
packaging of the finished clinical products. All clinical batch manufacture activities will be
conducted according to cGMP guidelines.

Section 2. Activities/Specifications

2.1. Project Activities

     2.1.1. Cardinal Health’s Responsibilities

          2.1.1.1. Preliminary Activities

          Cardinal Health will conduct preliminary activities to include the following:

	 	•	 	Provide project management and timelines.
	 
	 	•	 	Identify project team members and outline expectations.
	 
	 	•	 	Review the Material Safety Data Sheets (MSDS) and other safety
information available from Sytera to categorize the safety/handling
precautions for this product.
	 
	 	•	 	If the product is Category 4 or higher, a surcharge will be applied for
development and manufacturing activities.
	 
	 	•	 	Finalize initial protocols
	 
	 	•	 	Identify and receive necessary Reference Standards, API lots, and
excipients for development.

Estimated Cost

	 	 	 
	Estimated Duration (Weeks)
	 	Estimated Cost ($)
	 
	 	 
	[* * *]
	 	[* * *]

14 Schoolhouse Road • Somerset, NJ 08873

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2.1.1.2.
Fenretinide 100mg Prototype Batch Manufacture (Optional)

Cardinal Health will perform activities as outlined below, if required, to determine
feasibility with the new API supply, to provide capsules for analytical development, and to provide
early process development information.

	 	•	 	Order excipients in sufficient quantities.
	 
	 	•	 	Obtain drug substance from Sytera, store under designated conditions,
and release (ID) for use if required. It is assumed that the API will not
require particle size reduction.
	 
	 	•	 	Finalize batch record.
	 
	 	•	 	Select lab scale equipment for manufacture.
	 
	 	•	 	Manufacture enough quantity of Fenretinide 100mg active fill to make
[* * *] softgels per batch.
	 
	 	•	 	Encapsulate softgels with a target yield of [* * *] capsules.
	 
	 	•	 	Perform in-process fill weight and shell weight.
	 
	 	•	 	Dry, wash, and package softgels in HOPE bottles for stability study.
	 
	 	•	 	Properly dispose of all waste material.

Estimated Cost

	 	 	 
	Estimated Duration (Weeks)
	 	Estimated Cost ($)
	 
	 	 
	[* * *]
	 	[* * *]

2.1.1.3.
Fenretinide 100mg Softgel Experimental Batch Manufacture

Cardinal Health will perform activities as outlined below, if required, to determine
the process needed for clinical manufacturing.

	 	•	 	Order excipients in sufficient quantities and sample for release.
	 
	 	•	 	Perform release testing and QAIQC release of all excipients based on
ID test (additional cost if full release tests are required — included in
Analytical Support section)
	 
	 	•	 	Obtain drug substance from Sytera, store under designated
conditions, and release (ID) for use.
	 
	 	•	 	Finalize batch record.
	 
	 	•	 	Select/release/quarantine equipment for manufacture.
	 
	 	•	 	Manufacture enough quantity of Fenretinide 100mg softgels active fill
to provide [* * *] softgels per theoretical batch size.
	 
	 	•	 	Write and execute a protocol for in-process sampling in order to
provide samples with which to monitor the process at the mixing and
encapsulation stages. Analysis not included.
	 
	 	•	 	Encapsulate softgels.
	 
	 	•	 	Perform in-process fill weight and seal thickness.
	 
	 	•	 	Perform an over study to help establish the relationship
between drying and product quality and to justify the upper
specification limit.
	 
	 	•	 	Dry, wash, and bulk package softgels for shipment to Cardinal Health
Packaging Services in Philadelphia, PA for final packaging.

14 Schoolhouse Road • Somerset, NJ 08873

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	 	•	 	Complete QA audit of batch paperwork.
	 
	 	•	 	Provide all batch paperwork and lot release documentation to Sytera.
	 
	 	•	 	Properly dispose of all waste material.

Estimated Cost

	 	 	 
	Estimated Duration (Weeks)
	 	Estimated Cost ($)
	 
	 	 
	[* * *]
	 	[* * *] per batch
	(per campaign)
	 	[* * *] for sampling protocol

2.1.1.4.
Fenretinide 100mg Softgel cGMP Batch Manufacture

Cardinal Health will perform activities as outlined below:

	 	•	 	Order excipients in sufficient quantities and sample for release.
	 
	 	•	 	Perform release testing and QNQC release of all excipients based on
ID test (additional cost if full release tests are required — included in Analytical Support
section).
	 
	 	•	 	Obtain drug substance from Sytera, store under designated
conditions, and release (ID) for use.
	 
	 	•	 	Finalize batch record.
	 
	 	•	 	Select/release/quarantine equipment for manufacture.
	 
	 	•	 	Manufacture enough quantity of Fenretinide 100mg softgels active fill
to provide [* * *] softgels per theoretical batch size.
	 
	 	•	 	Encapsulate softgels.
	 
	 	•	 	Perform in-process fill weight and seal thickness.
	 
	 	•	 	Dry, wash, and bulk package softgels for shipment to Cardinal Health
Packaging Services in Philadelphia, PA for final packaging.
	 
	 	•	 	Complete QA audit of batch paperwork.
	 
	 	•	 	Provide all batch paperwork and lot release documentation to Sytera.
	 
	 	•	 	Properly dispose of all waste material.

Estimated Cost

	 	 	 
	Estimated Duration (Weeks)
	 	Estimated Cost ($)
	 
	 	 
	[* * *]
	 	[* * *]
	(per campaign)
	 	([* * *] per batch1)

2.1.1.5. Placebo cGMP Batch Manufacture

Cardinal Health will perform activities as outlined below:

	 	•	 	Order excipients in sufficient quantities and sample for release.
	 
	 	•	 	Perform release testing and QA/QC release of all excipients based on
ID test (additional cost if full release tests are required — included in Analytical support
section).

 

			
	1	 	If API is Category 4 or higher, a surcharge of [* * *] per batch will be applied.

14 Schoolhouse Road • Somerset, NJ 08873

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	 	•	 	Generate batch record.
	 
	 	•	 	Select/release/quarantine equipment for manufacture.
	 
	 	•	 	Manufacture enough quantity of placebo fill to provide [* * *] softgels.
Encapsulate softgels.
	 
	 	•	 	Perform in-process fill weight and seal thickness.
	 
	 	•	 	Dry, wash, and bulk package softgels for shipment to Cardinal Health
Packaging Services in Philadelphia, PA for final packaging.
	 
	 	•	 	Complete QA audit of batch paperwork.
	 
	 	•	 	Provide all batch paperwork and lot release documentation to Sytera.
	 
	 	•	 	Properly dispose of all waste material.

Estimated Cost

	 	 	 
	Estimated Duration (Weeks)
	 	Estimated Cost ($)
	 
	 	 
	[* * *]
	 	[* * *] per batch

2.1.1.6. Analytical Support

Cardinal Health will perform analytical support work as detailed below.

2.1.1.6.1. Raw Materials and API Release Testing

Cardinal Health will carry out raw materials/API release testing activities
to include the following:

	 	•	 	Review documentation for each raw material and API.
	 
	 	•	 	Write specifications for API,
finished product, and any unique raw materials (estimated cost
assumes specification needed only for API and finished
products).
	 
	 	•	 	Evaluate test methods to ensure
compliance with USP, if applicable.
	 
	 	•	 	Perform identity of API and raw
materials and full raw materials for unique raw materials
	 
	 	•	 	Issue CoA.

Estimated Cost

	 	 	 
	Activity and Estimated Duration (Weeks)
	 	Estimated Cost ($)
	 
	 	 
	Specifications ([* * *])
	 	[* * *] ([* * *] per specification)
	Excipient ID Release ([* * *])
	 	[* * *] (assumes identity for [* * *] excipients)
	Note: $[* * *] per identity test (USP)	 	 
	$[* * *] for full testing (not included)	 	 
	API ID Release ([* * *])
	 	[* * *] (assumes [* * *])

14 Schoolhouse Road • Somerset, NJ 08873

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2.1.1.6.2 Particle Size Method Development

Cardinal Health will carry out activities to develop a method for particle
size, include the following:

	 	•	 	Write protocol for particle size method development.
	 
	 	•	 	Perform activities specified in the protocol.
	 
	 	•	 	Summarize data.
	 
	 	•	 	Issue a draft method to support
API or/and experimental batch.

Estimated Cost

	 	 	 
	Estimated Duration (Weeks)
	 	Estimated Cost ($)
	 
	 	 
	[* * *]
	 	[* * *]

2.1.1.6.3. Assay/Related Substances Method Evaluation

Cardinal Health will carry out assay/related substances method evaluation
activities to include the following:

	 	•	 	Evaluate HPLC reversed-phase
assay methods provided by Sytera.
	 
	 	•	 	Perform force degradation studies
to demonstrate method specificity and that method is stability
indicating.
	 
	 	•	 	Optimize HPLC parameters and
sample process procedures if necessary.
	 
	 	•	 	Document assay/related substances
method.

Estimated Cost

	 	 	 
	Estimated Duration (Weeks)
	 	Estimated Cost ($)
	 
	 	 
	[* * *]
	 	[* * *]

2.1.1.6.4. Assay/Related Substances Method Validation

Cardinal Health will carry out assay/related substances method validation
activities to include the following:

	 	•	 	Write protocol for abbreviated
method validation for HPLC reversed-phase method, including:
accuracy/recovery, precision, specificity, linearity, LOQ, and
LOD
	 
	 	•	 	Perform method validation
activities specified in the protocol.
	 
	 	•	 	Summarize data.

	 
	 	•	 	Issue validation report.

14 Schoolhouse Road • Somerset, NJ 08873

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Estimated Cost

	 	 	 
	Estimated Duration (Weeks)
	 	Estimated Cost ($)
	 
	 	 
	[* * *]
	 	[* * *]

2.1.1.6.5. Dissolution Method Development

Cardinal Health will carry out dissolution method development activities to
include the following:

	 	•	 	Evaluate dissolution media and
parameters.
	 
	 	•	 	Obtain dissolution profiles using
appropriate USP apparatus.
	 
	 	•	 	Evaluate quantitative method for
percent dissolve determination.
	 
	 	•	 	Document dissolution method.

Estimated Cost

	 	 	 
	Estimated Duration (Weeks)
	 	Estimated Cost ($)
	 
	 	 
	[* * *]
	 	[* * *]

21.1.6.6. Dissolution Method Validation

Cardinal Health will carry out dissolution method validation activities to
include the following:

	 	•	 	Write protocol for abbreviated
dissolution method validation,
	 
	 	•	 	Perform method validation
activities specified in the protocol.
	 
	 	•	 	Summarize data.
	 
	 	•	 	Issue validation report.

Estimated Cost

	 	 	 
	Estimated Duration (Weeks)
	 	Estimated Cost ($)
	 
	 	 
	[* * *]
	 	[* * *]

2.1.1.6.7. Cleaning Verification Method Development and Validation

Cardinal Health will carry out cleaning verification method development and
validation activities to include the following:

	 	•	 	Develop cleaning verification method.
	 
	 	•	 	Document cleaning verification method.
	 
	 	•	 	Write protocol for cleaning method validation.

14 Schoolhouse Road • Somerset, NJ 08873

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	 	•	 	Perform method validation activities specified in the
protocol.
	 
	 	•	 	Issue validation report.

Estimated Cost

	 	 	 
	Estimated Duration (Weeks)
	 	Estimated Cost ($)
	 
	 	 
	[* * *]
	 	[* * *]

2.1.1.6.8. Prototype Batch Analyses (Optional)

Cardinal Health will carry out project-related activities for each prototype
batch as follows:

	 	•	 	Perform appropriate in-process
assay testing for in- process samples and release testing for
each batch of active: assay/related substances, disintegration,
content uniformity, moisture, and dissolution profile.
	 
	 	•	 	Report results.

Estimated Cost

	 	 	 
	Activity and Estimated Duration (Weeks)
	 	Estimated Cost ($)
	 
	 	 
	In-process Assay ([* * *])
	 	[* * *]
	Release Test ([* * *])
	 	[* * *]

2.1.1.6.9. Prototype Stability (Optional)

Cardinal Health will carry out project-related activities for each prototype
batch as follows:

	 	•	 	Perform appropriate stability
testing for each batch of active: assay/related substances,
moisture, and dissolution profile.
	 
	 	•	 	Report results.

[* * *] Informal Stability ([* * *] Active [* * *], [* * *] Package Configuration)

[* * *]

14 Schoolhouse Road • Somerset, NJ 08873

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Estimated Cost

	 	 	 
	Estimated Duration (Weeks)
	 	Estimated Cost ($)
	 
	 	 
	[* * *]
	 	[* * *]

2.1.1.610. Experimental Batch Analyses

Cardinal Health will carry out project-related activities for each prototype
batch as follows:

	 	•	 	Perform appropriate in-process
assay testing for in process samples and release testing for
each batch of active: fill weight, assay/related substances,
disintegration, content uniformity, moisture, and dissolution
profile.
	 
	 	•	 	Report results.
	 
	 	•	 	Perform cleaning verification and document results.

Estimated Cost

	 	 	 
	Activity and Estimated Duration (Weeks)
	 	Estimated Cost ($)
	 
	 	 
	In-process Assay ([* * *])
	 	[* * *] per batch
	Release Test ([* * *])
	 	[* * *] per batch
	Cleaning Verification
	 	[* * *] per campaign
	Total ([* * *])
	 	[* * *]

2.1.1.6.11. Experimental Batch Stability

Cardinal Health will carry out project-related activities for each prototype
batch as follows:

	 	•	 	Perform appropriate stability
testing for each batch of active: appearance, assay/related
substances, moisture, and dissolution profile.
	 
	 	•	 	Issue results at each time point.

14 Schoolhouse Road • Somerset, NJ 08873

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[* * *] DP Stability ([* * *] Active [* * *], [* * *] Package Configuration)

[* * *]

Estimated Cost

	 	 	 
	Estimated Duration
	 	Estimated Cost ($)
	 
	 	 
	[* * *]
	 	[* * *]

2.1.1.7. In-Process, Release Testing, and Cleaning Verification of Clinical Supplies

Cardinal
Health will carry out project-related activities for each clinical batch as follows:

	 	•	 	Perform appropriate in-process assay testing for seven
in-process samples and release testing for each batch of active to comply with
USP: appearance, Identification (HPLC and TLC), assay/related
substances, fill weight, disintegration, content uniformity, moisture,
dissolution profile, and microbial limits testing (MLT).
	 
	 	•	 	Perform appropriate testing for placebo: appearance, identity
(HPLC), and disintegration.
	 
	 	•	 	Issue CoA.
	 
	 	•	 	Perform cleaning verification and document results.

14 Schoolhouse Road • Somerset, NJ 08873

Direct: (732) 537-6200 • Facsimile: (732) 537-6480 • www.cardinal.com/pts

 

 

					
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Estimated Cost

	 	 	 
	Activity and Estimated Duration (Weeks)
	 	Estimated Cost ($)
	 
	 	 
	In-process Testing ([* * *])
	 	[* * *] ([* * *] batches)*
	Release Testing ([* * *])
	 	[* * *] ([* * *] batches)*
	Placebo Release ([* * *])
	 	[* * *]
	MLT Validation ([* * *])
	 	[* * *]
	MLT ([* * *])
	 	[* * *] ([* * *] batches)*
	Cleaning Verification ([* * *])
	 	[* * *] ([* * *] campaigns)*

 

			
	*	 	Note that cost is based on total of [* * *] batches manufactured in [* * *] separate campaigns.
Per batch cost is [* * *] of total cost.

2.1.1.8. Stability Studies of Clinical Batches

Cardinal Health will carry out project-related activities to include the following:

	 	•	 	Write stability protocol for [* * *] active batches
(manufactured in separate campaigns) and [* * *] placebo in [* * *] package
configuration to conduct ICH stability study for [* * *].
	 
	 	•	 	Perform the following stability analyses for active:
appearance, assay/related substances, dissolution, and MLT.
	 
	 	•	 	Perform the following for placebo: appearance and assay.
	 
	 	•	 	Pull samples and perform testing at designated time points.
	 
	 	•	 	Issue data at each time point and final report at end of study.

[* * *] DP Stability ([* * *] Active [* * *], [* * *] Placebo, [* * *] Package Configuration)

[* * *]

14 Schoolhouse Road • Somerset, NJ 08873

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Estimated Cost

	 	 	 
	Estimated Duration
	 	Estimated Cost ($)
	 
	 	 
	[* * *]
	 	[* * *]

2.1.2. Sytera Responsibilities

Sytera will sign the protocol and provide a technical contact who will be available
for technical discussions and make decisions that are needed in reference to this
project. Sytera will not use any samples/materials shipped from Cardinal Health for
this project in a manner that is inconsistent with the scope of this project.

2.2. Specifications

2.2.1. Cardinal Health’s Responsibilities

Cardinal Health will propose and document the specifications, as applicable,
in the Protocol(s).

2.2.2. Sytera’s Responsibilities

Sytera will provide all specifications necessary to perform this project.

14 Schoolhouse Road • Somerset, NJ 08873

Direct: (732) 537-6200 • Facsimile: (732) 537-6480 • www.cardinal.com/pts

 

 

					
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Section 3. Cost Proposal

3.1. Project Costs

Total Estimated Project Cost

	 	 	 	 	 	 	 
	Section	 	 	 	Estimated	 	 
	Reference	 	Activity	 	Duration (Weeks)	 	Estimated Cost ($)
	2.1.1.1.

	 	Preliminary Activities
	 	[* * *]
	 	[* * *]
	 
	 	 	 	 	 	 
	2.1.1.2.

	 	Fenretinide 100mg Prototype

Batch Manufacture (Optional)
	 	[* * *]
	 	[* * *]
	 
	 	 	 	 	 	 
	2.1.1.3.

	 	Fenretinide 100mg Softgel

Experimental Batch Manufacture
	 	[* * *]
	 	[* * *]
	 
	 	 	 	 	 	 
	2.1.1.4.

	 	Fenretinide 100 mg Softgel cGMP

Batch Manufacture
	 	[* * *]
	 	[* * *]
	 
	 	 	 	 	 	 
	2.1.1.5.

	 	Placebo cGMP Batch Manufacture
	 	[* * *]
	 	[* * *]
	 
	 	 	 	 	 	 
	2.1.1.6.

	 	Analytical Support
	 	[* * *]
	 	[* * *]
	 
	 	 	 	 	 	 
	2.1.1.7.

	 	In-Process, Release Testing, and
Cleaning Verification of Clinical
Supplies
	 	[* * *]
	 	[* * *]
	 
	 	 	 	 	 	 
	2.1.1.6.

	 	Stability Studies of Clinical Batches
	 	[* * *]
	 	[* * *]
	 
	 	 	 	 	 	 
	 

	 	Total Estimated Project Cost
	 	 	 	[* * *]

3.2. Additional Fees

If copies of raw data are requested in the course of an active project, Sytera will be invoiced at
[* * *]/hour for time required to generate and compile the data packet. If copies of raw data are
requested after a final report has been issued, Sytera will be invoiced at the current laboratory
rate for the hours required to generate and compile the data packet.

3.3. Revisions to Pricing

Cardinal Health reserves the right to revise quoted costs for any project as a result of initial
scope change, revisions in Protocols, modifications of test methods, final review of test methods,
undocumented requirements, retesting or resynthesis, or any unforeseen difficulty in executing the
project. The additional work will be performed based on written agreement from Sytera and will be
documented on a Cardinal Health Quotation Amendment Record (OAR).

All required investigational work (such as OOS investigations, trouble shooting chromatographic
methods, etc.) may be conducted without prior approval from Sytera, for up to [* * *] scientist
hours per occurrence. If the additional work requires going beyond [* * *] hours, Sytera will be
contacted prior to continuation. All investigational retesting performed that is not directly due
to a Cardinal Health error will be invoiced to Sytera.

14 Schoolhouse Road • Somerset, NJ 08873

Direct: (732) 537-6200 • Facsimile: (732) 537-6480 • www.cardinal.com/pts

 

 

					
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Section 4. Invoicing and Payment Terms

4.1. Invoicing

Upon request from Sytera, Cardinal Health will purchase alt samples/materials necessary to perform
the project and will invoice Sytera monthly at cost plus reasonable and customary acquisition and
handling costs.

Non-standard or special instrumentation or equipment required solely for this project will be
invoiced to Sytera following Sytera approval.

4.2. Additional Invoicing Terms

Cardinal Health will issue invoices based on milestones identified in Section 2.1.1. If a draft
report is issued, Sytera will have [* * *] to return comments to Cardinal Health. If no comments
are received, Cardinal Health will finalize the report and issue the invoice. If comments are
received after issuance of the final report, Sytera will be billed at the current standard hourly
rate for the time required to complete changes and reissue the report.

4.3. Payment Terms

Payments toward all invoices are due within [* * *] of receipt of invoice and are non- refundable.
Any applicable wire transfer fees must be included in the payment issued to Cardinal Health, All
shipments are FOB Somerset, New Jersey. Remit all payments to:

Cardinal Health, Pharmaceutical Development, Somerset

P.O. Box 827389

Philadelphia, PA 19182-7389

Section 5. Scheduling/Deliverables

5.1. Scheduling

Cardinal Health must receive a signed Quotation with a Purchase Order number (if applicable), a
signed Protocol, and all raw materials/Intermediates/final product samples in order for this
project to be scheduled. Once scheduled, Sytera will be notified by Cardinal Health of the
anticipated start and completion date of the project activities.

5.2. Deliverables

5.2.1. Reports and Certificates of Analysis

A report and/or Certificate of Analysis will be issued upon completion of each project
phase.

5.2.2. Communication

In order to establish a collaborative relationship between Sytera and Cardinal Health, both
parties will appoint a Project Manager to serve as a point of contact to oversee progress on
this project. Upon initiation of the project, Cardinal Health and Sytera will

14 Schoolhouse Road • Somerset, NJ 08873

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establish a communication plan, if requested, that may include conference calls,
visits, and timelines.

Section 6. Additional Project Terms

6.1. Safety

6.1.1. Cardinal Health’s Responsibilities

Cardinal Health will assess all vendor and Sytera MSDS and all handling data for the
samples/materials associated with this project. If categorized as a CDS and/or Category 3 or
above, the samples/materials wilt require special handling precautions and will be subject
to a Hazardous Material Fee for all handling and testing directly associated with the.
samples/materials. If applicable, this Hazardous Materials Handling Surcharge will be
included in the project cots.

6.1.2. Sytera’s Responsibilities

Sytera will provide MSDS and all sample/material handling data for the samples/materials
associated with this project. If any sample/material has any special handling
considerations, Sytera will notify Cardinal Health prior to the initiation of the project.

6.2. Methods/Documentation

6.2.1. Cardinal Health’s Responsibilities

Cardinal
Health will review all project-related documentation and methods received from Sytera associated with this project.

6.2.2. Sytera’s Responsibilities

Sytera will provide all available project-related documentation and methods to be used for
this project.

6.3. Samples/Materials

6.3.1. Cardinal Health’s Responsibilities

Cardinal Health will, as necessary, log in all samples/materials according to current
Standard Operating Procedures. The sample/material lot numbers will be recorded in the
laboratory notebooks at the time of use.

Upon issuance of the final report or Certificate of Analysis, samples/materials will be
stored in quarantine at Cardinal Health for a period of [* * *]. After the [* * *]
quarantine period, samples/materials will be disposed of at Cardinal Health unless requested
otherwise by Sytera. If additional storage is requested, Cardinal Health will issue a QAR
for the additional cost.

14 Schoolhouse Road • Somerset, NJ 08873

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6.3.2. Sytera’s Responsibilities

If available, Sytera will provide all samples/materials necessary to perform this project
The samples/materials should arrive at Cardinal Health with all proper documentation. If
samples/materials are not available Sytera will request that Cardinal Health purchase all
necessary sample needed to perform this project. If return shipment is requested, Sytera
will notify Cardinal Health prior to the disposition of samples/materials.

6.4. Termination

Either party may terminate the project or any portion thereof at any time by providing [* *
*] written notice. Upon receipt of any such notice of termination, Cardinal Health will
promptly scale down the affected portion of the project and avoid (or minimize, where
non-cancelable) any further related expenses.

In the event of a termination by Sytera, on the effective date of termination, Sytera will
make payment to Cardinal Health in an amount equal to Cardinal Health’s charges for all work
performed prior to such effective date plus an amount equal to any non-cancelable
commitments made by Cardinal Health prior to notice of termination, as well as any
applicable cancellation fees pursuant to 6.5.

6.5. Cancellation

If this project is cancelled by Sytera for purposes within their control, Cardinal Health
will invoice Sytera the cost of any sample/materials, work performed before cancellation,
reference materials, equipment, and supplies purchased by Cardinal Health specifically for
this project. In addition, Cardinal Health reserves the right to invoice project
cancellation fees according to the following schedule: [* * *]; [* * *]; and [* * *].

For pilot plant manufacture, Cardinal Health reserves the right to invoice project
cancellation fees according to the following [* * *] schedule: [* * *], [* * *], [* * *],
and [* * *].

6.6. Project Notes

Sytera communication is encouraged. To foster project planning, reviews/updates, and
coordination meetings, Cardinal Health will provide four person-hours a month of
communication free of charge. Additional communication hours beyond this amount will be
invoiced at the standard hourly rate.

Sytera shall pay for all product batches, including batches that do not conform to
applicable specifications, unless all methods and processes associated with the manufacture,
testing, and storage of that product have been fully validated in accordance with generally
accepted standards of the pharmaceutical industry.

The summary of costs detailed above does not include any extra reformulation activities, any
post submission activities, and/or any activities required for commercial batch manufacture.

14 Schoolhouse Road • Somerset, NJ 08873

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Additionally, it does not include any post approval tasks such as annual stability
testing or storage. If requested by Sytera, these costs will be quoted separately.

Section 7. Version History

Revisions

	 	 	 
	Version	 	Revisions
	00
	 	New Issue
	 
	 	 
	01
	 	Eliminated 150mg capsules.
	 
	 	 
	02
	 	Revised Section 2.1.1.6. to include
stability studies on [* * *] batches.
	 
	 	 
	 
	 	1. Added optional minicap batch.
	 
	 	 
	 
	 	2. Added experimental batch.
	 
	 	 
	03
	 	3. Added particle size method development.
	 
	 	 
	 
	 	4. Added informal stability on experimental batch.
	 
	 	 
	 
	 	5. Total number of active batches reduced from [* * *] to [* * *].
	 
	 	 
	 
	 	6. All costs adjusted to reflect above changes.

Section 8. Terms and Conditions

This Quotation shall be governed by the terms and conditions of the Softgel Development and
Clinical Supply Agreement dated October 5, 2005 between Sytera Inc. and Cardinal Health
PTS, LLC.

14 Schoolhouse Road • Somerset, NJ 08873

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Section 9. Project Approval and Authorization

By signing below, Sytera agrees to the project details as set forth in this Quotation.

	 	 	 	 	 	 	 	 	 
	Sytera Inc.	 	 	 	Cardinal Health PTS, LLC	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/ Jay Lichter

	 	 	 	/s/ Eugene McNally	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Signature

	 	 	 	Signature	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Jay Lichter

	 	 	 	Eugene McNally Ph.D.	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Printed Name
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Vice President

	 	 	 	Vice President, Development Operations	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Title

	 	 	 	Title	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	October 7, 2005

	 	 	 	October 5, 2005	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Date

	 	 	 	Date	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

PO Number

	 	 	 	 	 	 	 	 

Please sign and return a copy of the Quotation Approval Page via fax to

Denise McGraw at (732) 537-6480 or email to denise.mcgraw@cardinal.com.

14 Schoolhouse Road • Somerset, NJ 08873

Direct: (732) 537-6200 • Facsimile: (732) 537-6480 • www.cardinal.com/pts

 

 

Quotation Amendment Record for Phase II Clinical

Supplies of Frenretinide 100mg Softgels (Active and Placebo)

Prepared for Jay Lichter, Ph.D., Sytera, Inc.

	 	 	 	 	 
	Section 1.

	 	Amendment Number
	 	QAR-01
	 
	 	 	 	 
	Section 2.

	 	Product
	 	Fenretinide 100 mg Softgel
	 
	 	 	 	 
	Section 3.

	 	Original Quotation Number
	 	QTE-SZU-0002.03
	 
	 	 	 	 
	Section 4.

	 	Additional Cost
	 	$[* * *]
	 
	 	 	 	 
	Section 5.

	 	Reason(s) for Amendment	 	 

Cardinal Health will place an engineering and design order for 16 Oblong die tooling for the
laboratory encapsulation machine in order to produce the prototype
batch of Fenretinide 100mg
softgels (optional section 2.1.12 of the parent quotation).

	 	 	 	 	 
	Section 6.

	 	Comments
	 	 

This Quotation Amendment Record is subject to the terms end conditions of the Softgel Development
and Clinical Supply Agreement by and between Sytera, Inc. and Cardinal Health PTS, LLC, effective
October 5, 2005.

All terms and conditions detailed in the original quotation remain n effect for this QAR.

	 	 	 	 	 
	Section 7.

	 	Approvals
	 	 

	 	 	 	 	 	 	 
	Sytera, Inc.

	 	 	 	Cardinal Health PTS, LLC	 	 
	/s/
Jay Lichter
	 	 	 	/s/ Stephen Tindal	 	 
	 

	 	 	 	 	 	 
	Signature

	 	 	 	Signature	 	 
	Jay
Lichter
	 	 	 	Stephen Tindal	 	 
	 

	 	 	 	 	 	 
	Printed Name

	 	 	 	Printed Name	 	 
	VP,
Seretary
	 	 	 	Project Director	 	 
	 

	 	 	 	 	 	 
	Title

	 	 	 	Title	 	 
	October
21, 2005
	 	 	 	October 20, 2005	 	 
	 

	 	 	 	 	 	 
	Date

	 	 	 	Date	 	 
	 
	 

	 	 	 	 	 	 
	PO Number
	 	 	 	 	 	 

	 	 	 
	 

	 	Contract Management: Denise McGraw
	 
	 	 
	CardinalHealth

	 	Business Development: Suzanne Dorsey
	 
	 	 
	 

	 	Program Management: Amy Casiere
	 
	 	 
	 

	 	Date: October 20, 2005

14 Schoolhouse Road • Somerset, NJ 08873

Direct: (732) 537-6200 • Facsimile: (732) 537-6480 • www.cardinal.com/pts

 

 

Quotation Amendment Record for Phase II Clinical Supplies of

Fenretinide 100mg Softgels. (Active and Placebo)

Prepared for. Jay Lichter, Ph.D., Sytera Inc.

	 	 	 	 	 
	Section 1.

	 	Amendment Number
	 	QAR-02 Version 2
	 
	 	 	 	 
	Section 2.

	 	Product
	 	Fenretinide 100 mg Softgel
	 
	 	 	 	 
	Section 3.

	 	Original Quotation Number
	 	QTE-SZU-0002.03
	 
	 	 	 	 
	Section 4.

	 	Additional Cost
	 	$[* * *]
	 
	 	 	 	 
	Section 5.

	 	Reason(s) for Amendment	 	 

Cardinal
Health PTS, LLC will manufacture for Sytera Inc., [* * *]
cGMP [* * *] of Fenretinide 100mg Softgels (targeted batch size of [* * *] softgels) for use in clinical studies in the US
and/or Europe. The manufacture of this cGMP [* * *] replaces the manufacture of the experimental [*
* *] (targeted batch size of [* * *] softgels) per
Section 2.1.1.3 (“Fenretinide 100mg Softgel
Experimental Batch Manufacture”) of the original quotation.

The following costs will apply to the manufacture of [* * *] cGMP [* * *]:

[* *
*] cGMP [* * *] ([* * *] softgels) of
Fenretinide 100mg — $[* * *]***

Sampling Protocol for cGMP [* * *] — $[* * *]

USP/EP Raw Material Release Testing for Tween 80 and Corn Oil — $[* * *]

USP/EP Material Release Testing for Shell Excipients — $[* * *]

ID Release Testing of API — $[* * *]

In Process Testing — $[* * *]

Routine Cleaning Verification — $[* * *]

Release Testing — $[* * *]

USP Microbial Limits Testing Validation (one-time fee) — $[* * *]

USP Microbial Limits Testing Validation (one-time fee) — $[* * *]

USP Microbial Limits Testing — $[* * *]

EP Microbial Limits Testing — $[* * *]

Total Cost: $[* * *]

 

			
	***Note:	 	In the original quotation the cost for the manufacture of the experimental [* *
*] was $[* * *].

14 Schoolhouse Road • Somerset, NJ 08873

Direct: (732) 537-6200 • Facsimile: (732) 537-6480 • www.cardinal.com/pts

 

 

			
	QTE-SZU-0002.03 QAR.-02 Version 2
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Section 6. Comments

This Quotation Amendment Record is subject to the terms and conditions of the Softgel

Development and Clinical Supply Agreement. by and between Sytera Inc. and Cardinal Health PTS, LLC,
effective October 5, 2005.

All terms and conditions detailed in the original quotation remain in effect for this AR.

Section 7. Approvals

	 	 	 	 	 	 	 	 	 
	Sytera, Inc.	 	 	 	Cardinal Health PTS, LLC	 	 	 	 
	/s/
Jay Lichter
	 	 	 	/s/ Stephen Tindal	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Signature

	 	 	 	Signature	 	 	 	 
	Jay
Lichter
	 	 	 	Stephen Tindal	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Printed Name

	 	 	 	Printed Name	 	 	 	 
	VP &
Secretary
	 	 	 	Project Director	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Title

	 	 	 	Title	 	 	 	 
	March
28, 2006
	 	 	 	November 14, 2005	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Date

	 	 	 	Date	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

PO Number

	 	 	 	 	 	 	 	 

	 	 	 
	 

	 	Contract Management: Denise McGraw
	 
	 	 
	CardinalHealth

	 	Business Development: Suzanne Dorsey
	 
	 	 
	 

	 	Program Management: Amy Casiere
	 
	 	 
	 

	 	Date: November 14, 2005

14 Schoolhouse Road • Somerset, NJ 08873

Direct: (732) 537-6200 • Facsimile: (732) 537-6480 • www.cardinal.com/pts

 

 

Quotation Amendment Record for Phase II Clinical Supplies

of Fenretinide 100mg Softgels (Active and Placebo)

Prepared for Jay Lichter, Ph.D., Sytera Inc.

	 	 	 	 	 
	Section 1.

	 	Amendment Number
	 	QAR-03
	 
	 	 	 	 
	Section 2.

	 	Product
	 	Fenretinide 100 mg Softgel
	 
	 	 	 	 
	Section 3.

	 	Original Quotation Number
	 	QTE-SZU-0002.03
	 
	 	 	 	 
	Section 4.

	 	Additional Cost
	 	$ [* * *]
	 
	 	 	 	 
	Section 5.

	 	Reason(s) for Amendment	 	 

Cardinal Health, at the request of Sytera, will perform non-GMP particle size analysis of
Fenretinide API ( [* * *] lots) as well as particle size analysis of Fenretinide softgel
batches (suspension fill and finished product samples to be analyzed for each of [* * *]
batches) to be manufactured at Cardinal Health. The analyses will be conducted using the
particle size method that was previously developed as per section 2.1.1.6.2 of the original
agreement.

Cost per analysis: $ [* * *] set-up plus $ [* * *] per sample (n= [* *
*] )

Estimated Total Costs

Analysis of [* * *] Lots of API: $ [* * *]

Analysis of In-process samples and finished product: $ [* * *] per batch

Total: $ [* * *]

Section 6. Comments

This
Quotation Amendment Record is subject to the terms and conditions of the Softgel Development and Clinical Supply Agreement, by and between Sytera Inc. and Cardinal Health PTS, LLC,
effective October 5, 2005.

14 Schoolhouse Road • Somerset, NJ 08873

Direct: (732) 537-6200 • Facsimile: (732) 537-6480 • www.cardinal.com/pts

 

 

			
	QTE-SYR-0002.03 QAR-03
	 	Page 2
	 	 	 

Section 7. Approvals

	 	 	 	 	 	 	 	 	 
	Sytera Inc.	 	 	 	Cardinal Health PTS, LLC	 	 	 	 
	/s/
Jay Lichter
	 	 	 	/s/ David Gilliland	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Signature

	 	 	 	Signature	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Jay
Lichter

	 	 	 	David Gilliland, Ph.D.	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Printed Name

	 	 	 	Printed Name	 	 	 	 
	VP
	 	 	 	Director, Contract Management	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Title

	 	 	 	Title	 	 	 	 
	April
26, 2006
	 	 	 	April 26, 2006	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Date

	 	 	 	Date	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

PO Number

	 	 	 	 	 	 	 	 

	 	 	 	 	 
	 

	 	Contract Management:
	 	Denise McGraw
	 
	 	 	 	 
	 

	 	Business Development:
	 	Suzanne Dorsey
	 
	 	 	 	 
	 

	 	Program Management:
	 	Amy Casiere
	 
	 	 	 	 
	 

	 	Date:
	 	26 April 2006

CardinalHealth

14 Schoolhouse Road • Somerset, NJ 08873

Direct: (732) 537-6200 • Facsimile: (732) 537-6480 • www.cardinal.com/pts

 

 

Quotation Amendment Record for Phase II Clinical Supplies

of Fenretinide 100mg Softgels (Active and Placebo)

Prepared for David Cobb, Sirion Therapeutics, Inc.

	 	 	 	 	 
	Section 1.

	 	Amendment Number
	 	QAR-04
	 
	 	 	 	 
	Section 2.

	 	Product
	 	Fenretinide 100 mg Softgel
	 
	 	 	 	 
	Section 3.

	 	Original Quotation Number
	 	QTE-SZU-0002.03
	 
	 	 	 	 
	Section 4.

	 	Additional Cost
	 	$ [* * *]
	 
	 	 	 	 
	Section 5.

	 	Reason(s) for Amendment	 	 

Sirion Therapeutics. Inc. has requested Cardinal Health, Somerset, NJ to perform in-line printing
on [* * *] of [* * *] of the [* * *] cGMP Fenretinide Softgel batches
(outlined in section 2.1,1 4 Fenretinide 100mg Softgel cGMP Batch Manufacture). The
softgels will be printed with black ink, utilizing a non-specific logo of test lines. The sublot of
printed softgels will be fully tested, released and shipped for packaging for eventual return to
the Cardinal Health, Somerset, NJ facility for initiation and maintenance of cGMP stability
studies.

The additional activities and costs are as follows:

Manufacture
of cGMP Sublot of Printed Fenretinide 100mg Softgels — $[* * *]

Preparation of New Finished Product Specification — $[* * *]

Release Testing of Printed Softgels $[* * *]

Microbial Limits Validation (USP/EP) for Printed Softgels — $[* * *]

Microbial Limits Testing (USP/EP) for Printed Softgels $[* * *]

	 	 	 	 	 
	Section 6.

	 	Comments
	 	 

This
Quotation Amendment Record is subject to the terms and conditions of
the Softgel Development and Clinical Supply Agreement, by and between Sirion Therapeutics Inc. and Cardinal Health PTS, LLC, effective October 5, 2005.

 

 

			
	QTE-SYR 83 QAR-8
	 	Page 2
	 	 	 

Section 7. Approvals

	 	 	 	 	 	 	 
	Sirion Therapeutics, Inc.

	 	 	 	Cardinal Health PTS, LLC	 	 
	/s/
William Stringer
	 	 	 	/s/ David Gilliland	 	 
	 

	 	 	 	 	 	 
	Signature

	 	 	 	Signature	 	 
	 
	 	 	 	 	 	 
	William
Stringer

	 	 	 	David Gilliland, Ph.D.	 	 
	 

	 	 	 	 	 	 
	Printed Name

	 	 	 	Printed Name	 	 
	VP
Manufacturing & Compliance
	 	 	 	Associate Director, PPD	 	 
	 

	 	 	 	 	 	 
	Title

	 	 	 	Title	 	 
	August
11, 2006
	 	 	 	July 25, 2006	 	 
	 

	 	 	 	 	 	 
	Date

	 	 	 	Date	 	 
	 
	 	 	 	 	 	 
	 

PO Number

	 	 	 	 	 	 

	 	 	 	 	 
	 

	 	Contract Management:
	 	Denise McGraw
	 
	 	 	 	 
	 

	 	Business Development:
	 	Suzanne Dorsey
	 
	 	 	 	 
	 

	 	Program Management:
	 	Amy Casiere
	 
	 	 	 	 
	 

	 	Date:
	 	25 July 2006

CardinalHealth

14 Schoolhouse Road • Somerset, NJ 08873

Direct: (732) 537-6200 • Facsimile: (732) 537-6480 • www.cardinal.com/pts

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