Document:

Distribution Services Agreement

 Exhibit 10.2 
  
  
 Confidential treatment has been requested for portions of this
exhibit. The copy filed herewith omits the information subject to the confidentiality request. Omissions are designated as **. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. 
  
 Execution Copy 
  
 DISTRIBUTION SERVICES AGREEMENT 
  
 BETWEEN 
  
 SMITHKLINE BEECHAM CORPORATION 
  
 AND 
  
 ADOLOR CORPORATION 
  
 DATED AS OF 
  
 June 29, 2004 

 DISTRIBUTION SERVICES AGREEMENT 
  
 THIS DISTRIBUTION SERVICES AGREEMENT (this “Agreement”) is
made and entered into as of the 29th day of June, 2004 (the “Effective Date”) by and between ADOLOR CORPORATION, a Delaware corporation having its principal office at 700 Pennsylvania Drive, Exton, Pennsylvania 19341
(“Adolor”) and SmithKline Beecham Corporation, a Pennsylvania corporation having its principal office at 200 North 16th Street, Philadelphia, Pennsylvania 19102 d/b/a GlaxoSmithKline (“GSK”). GSK and Adolor are sometimes referred to herein individually as a “Party” and collectively as
“Parties.” 
  
 RECITALS 
  
 WHEREAS, Glaxo Group Limited, and Adolor entered into the Collaboration
Agreement for the Development and Commercialization of Adolor’s compound known as alvimopan; 
  
 WHEREAS, the Collaboration Agreement provides that Glaxo Group Limited will provide certain distribution and commercial services in the Territory with
regard to the Adolor Products; 
  
 WHEREAS, GSK, as an Affiliate
of Glaxo Group Limited, will provide the distribution and commercial services in the Territory with regard to the Adolor Products; 
  
 WHEREAS, the Parties wish to memorialize their agreement with regard to the provisions of such distribution and commercial services for the Adolor
Products in the Territory, it being understood that the Parties intend to enter into a separate agreement with respect to GSK’s provision of the distribution and commercial services in the territories and possessions of the United States.

  
 NOW, THEREFORE, in consideration of the covenants and
agreements contained herein, Adolor and GSK, intending to be legally bound, hereby agree as follows: 
  
 ARTICLE 1 
 DEFINITIONS 
  
 Capitalized terms, whether used in the singular or plural, will have the
meanings ascribed to them in the Collaboration Agreement unless otherwise defined below for purposes of this Agreement. For the convenience of the Parties, cross-references to the location of some terms that are defined in the Collaboration
Agreement that are also used herein have been included below. 
  
 1.1 “Adolor Product(s)” has that meaning ascribed to such term in Section 1.10 of the Collaboration Agreement. 
  
 1.2 “Adolor Product Promotion Term” has that meaning ascribed to such term in Section 1.8 of the Collaboration Agreement. 

 1.3 “Adolor Termination Notice” has that meaning ascribed to such term in Section 9.1
below. 
  
 1.4 “Adverse Drug Experience” has that
meaning ascribed to such term in Section 1.13 of the Collaboration Agreement. 
  
 1.5 “Affiliate” has that meaning ascribed to such term in Section 1.14 of the Collaboration Agreement. 
  
 1.6 “Business Day” means any day upon which banking institutions in Philadelphia, Pennsylvania are open for business. 
  
 1.7 “Calendar Quarter” has that meaning ascribed to such
term in Section 1.21 of the Collaboration Agreement. 
  
 1.8
“Certificate of Compliance” means a certificate certified by Adolor’s head of Quality Assurance or authorized designee in the form attached hereto as Schedule 1.8 and provided by Adolor to GSK for each batch of Product
delivered to GSK. 
  
 1.9 “CFR” means the Code of
Federal Regulations. 
  
 1.10 “cGMP” means
current good manufacturing practices of the United States Food and Drug Administration (or any successor entity thereto), or its foreign equivalent, including those set forth in 21 CFR Parts 210 and 211 and all applicable rules, regulations, guides
and guidances, and their foreign equivalent. 
  
 1.11
“Claims” has that meaning ascribed to such term in Section 1.24 of the Collaboration Agreement. 
  
 1.12 “Collaboration Agreement” means that certain agreement between Adolor and GSK dated April 14, 2002 for the development and
commercialization of Adolor’s compound known as alvimopan, and all amendments thereto. 
  
 1.13 “Confidential Information” has that meaning ascribed to such term in Section 1.30 of the Collaboration Agreement. 
  
 1.14 “Cost of Goods” has that meaning ascribed to that term in Section 1.33 of the Collaboration Agreement.

  
 1.15 “Distribution Services” has the meaning
ascribed to such term in Section 3.2 of this Agreement. 
  
 1.16
“Distribution Services Fee” has that meaning ascribed to such term in Section 1.46 of the Collaboration Agreement. 
  
 1.17 “FDA” means the United States Food and Drug Administration and any successor agency thereto. 
  

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 1.18 “Financial Support Services” has the meaning ascribed to such term in Section 6.1
of this Agreement. 
  
 1.19 “Government Contracting
Services” has the meaning ascribed to such term in Section 4.3 of this Agreement. 
  
 1.20 “Governmental Authority” has that meaning ascribed to such term in Section 1.57 of the Collaboration Agreement. 
  
 1.21 “Government Programs” means any Federal and/or State pharmaceutical rebate and/or pricing programs in
the Territory, including but not limited to: 
  
 1.21.1 The
Medicaid Drug Rebate Program (Public Law 101-508 and Section 1927 of the Social Security Act, 41 U.S.C. § 1396-r-8, as amended (the “Medicaid Statute”); 
  
 1.21.2 The US Public Health Service Pricing program established under 602 of the Veterans Health Care Act, Public Law
102-585 (the “§340B Programs PHS”); 
  
 1.21.3 The Federal Supply Schedule (the “FSS”); 
  
 1.21.4 The Federal Ceiling Price established under Section 602 of the Veterans Health Care Act, Public Law 102-585 (the “FCP”); 
  
 1.21.5 Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. 108-XXX, codified in section 1860D-31
of the Social Security Act referred to as the Medicare Modernization Act; 
  
 1.21.6 State Pharmaceutical Assistance Programs; and 
  
 1.21.7 State Medicaid Agencies Supplemental Rebate Programs. 
  
 1.22 “Government Programs Strategic Plan” has that meaning ascribed to such term in Section 4.1 below. 
  
 1.23 “GSK Quality Assurance Requirements” means the requirements as set forth on Schedule 3.1.1. 
  
 1.24 “Joint U.S. Marketing Team” or “JMT”
has that meaning ascribed to such term in Section 1.81 of the Collaboration Agreement. 
  
 1.25 “Joint Steering Committee” or “JSC” has that meaning ascribed to such term in Section 1.83 of the Collaboration Agreement.  
  
 1.26 “Launch Date” means the date on which Product is first
shipped to GSK by Adolor in commercial quantities for commercial sale to Third Parties in the Territory. 
  
 1.27 “Laws” has that meaning ascribed to such term in Section 1.85 of the Collaboration Agreement, and includes, but is not limited to:
all laws applicable to federal and state healthcare programs including Medicare Prescription Drug Improvement and 
  

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 Modernization Act of 2003 (Pub. L. 108-173), the False Claims Act (31 U.S.C. § 3729 et seq.), the anti-kickback
provisions of the Social Security Law (42 U.S.C. § 1320a-7b(b)) and comparable state laws, and all other federal and state healthcare fraud statutes. 
  
 1.28 “Managed Markets Customers” has that meaning ascribed to such term in Section 5.1 below. 
  
 1.29 “MMC Contracting Guidelines” has that meaning ascribed
to such term in Section 5.2 of this Agreement. 
  
 1.30
“MMC Services” has the meaning ascribed to such term in Section 5.3 of this Agreement. 
  
 1.31 “MMC Strategic Plan” has the meaning ascribed to such term in Section 5.1 below. 
  
 1.32 “NDC” means the “National Drug Code” which is
the eleven digit code registered by Adolor with the FDA. 
  
 1.33
“Net Sales” has that meaning ascribed to such term in Section 1.97 of the Collaboration Agreement. 
  
 1.34 “Person” means any natural person, corporation, firm, business trust, joint venture, association, organization, company,
partnership, limited liability company, or other business entity, or any government or any agency or political subdivision thereof. 
  
 1.35 “Product” means any Adolor Product. 
  
 1.36 “Rebate(s)” means any credit, refund, discount, trade allowance, retroactive price adjustment, chargeback, administrative service
fee or other payment made pursuant to a Government Program or an agreement with a Managed Markets Customer that is associated with sales of the Product. 
  
 1.37 “Services” means the Distribution Services, the Financial Support Services, the Government Contracting Services, the MMC Services
and the Wholesaler Support Services, collectively that are performed by GSK pursuant to this Agreement.  
  
 1.38 “Term” or “Term of this Agreement” means the period commencing on the Effective Date and ending upon the earlier of
(a) termination or expiration of the Adolor Product Promotion Term or (b) the date on which Adolor assumes responsibility for the Services pursuant to Article 9, unless sooner terminated as provided herein. 
  
 1.39 “Territory” means[**] 
  
 1.40 “Third Party” means any Person whom or which is neither
a Party nor an Affiliate of a Party. 
  
 1.41 “Wholesaler
Support Services” has the meaning ascribed to such term in Section 3.3 of this Agreement. 
  

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

  

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 ARTICLE 2 
 APPOINTMENT OF DISTRIBUTOR 
  
 2.1 Appointment of GSK. Subject to the terms and conditions of this Agreement, Adolor hereby appoints GSK to exclusively provide the Services for the Products in the Territory during the Term of this Agreement. 
  
 2.2 Provision of Services. Adolor and GSK agree that GSK will carry
out the Services in accordance with (a) the policies and procedures that GSK uses for its own products of a similar commercial potential, (b) the terms and conditions of this Agreement, (c) any additional plans, policies or procedures set forth in
the U.S. Marketing Plan, and (d) in compliance with applicable Laws.  
  
 2.3 Nature of Relationship. In carrying out the Services, GSK will act on Adolor’s behalf and specify that GSK is acting as such. 
  
 ARTICLE 3 
 CONSIGNMENT, DISTRIBUTION SERVICES AND WHOLESALER SUPPORT 
 SERVICES 
  
 3.1 Consignment Arrangement. 
  
 3.1.1 During the Term, Adolor will ship Product in finished form to GSK to
be held on consignment for Adolor. Subject to Section 3.2.5, Adolor will ship, in sufficient quantities to meet the anticipated orders, the Products to a GSK distribution facility as may be designated by GSK in writing to Adolor from time to time
(the “GSK Facility”). The written designation from GSK will be sent to Adolor with commercially reasonable lead time to allow Adolor to approve any such proposed GSK Facility in accordance with Adolor’s vendor approval system,
such approval not to be unreasonably withheld, and to allow the Parties to update their systems. Adolor will ship the Product to the GSK Facility via a carrier approved in accordance with Adolor’s vendor approval system. For each shipment of
Product delivered by Adolor to GSK, Adolor will provide GSK with a Certificate of Compliance for each such shipment. Adolor acknowledges that GSK is entitled to rely on the Certificate of Compliance as part of criteria to release the Products into
interstate commerce. GSK will promptly visually inspect each shipment of the Products for external damage or loss in transit and notify Adolor in the event such damage or loss has occurred. Within [**] days following receipt of the Products at the
GSK Facility, GSK will notify Adolor whether the shipped Product is in conformity with the GSK Quality Assurance Requirements and, if so, its acceptance, in whole or in part, thereof. GSK will be under no obligation to accept any shipment, in whole
or in part, of Product that does not conform to the GSK Quality Assurance Requirements. GSK shall have the right to revoke acceptance of any shipped Product if it later discovers non-obvious defects not reasonably discoverable at the time of
receipt. 
  

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 3.1.2 Adolor will at all times be the owner of the Products and will retain title and risk of loss to the
Product until such time as GSK ships Product to a Third Party on Adolor’s behalf. 
  
 3.1.3 Adolor and GSK agree to the quality obligations and requirements set forth on Schedule 3.1.1 with respect to the Products. 
  
 3.1.4 From time to time as Adolor may elect during the Term [**], during normal business hours and upon reasonable advance
notice from Adolor (but not less than ten (10) Business Days’ notice), GSK shall permit duly authorized representatives of Adolor to review and inspect, on the premises of GSK, each GSK Facility where such inventory is kept, to ensure
compliance with cGMP, quality control standards and with the applicable terms of this Agreement. In the event of an Adverse Drug Experience, any proposed or actual inspection by a Governmental Authority or other emergency involving the Product,
Adolor shall have the right at any time upon oral or written notice to GSK of one (1) Business Day to conduct an inspection of each GSK Facility and on the premises of GSK, where such inventory is kept, inventory of the Products, storage
documentation and GSK’s quality control records relating to the storage of the Products to ensure compliance with cGMPs, quality control standards, and with applicable terms of this Agreement. GSK shall promptly respond to Adolor’s request
and the Parties shall agree on the time, scope and manner of the inspection. 
  
 3.1.5 Within five (5) days after the end of each month during the Term of this Agreement, GSK will send Adolor the following information in the form regularly produced by GSK for its own products: [**]. Adolor may
elect during the Term (but no more than once each calendar year), during normal business hours and upon reasonable advance notice from Adolor (but not less than ten (10) Business Days’ notice), to perform physical inventory of the Product at
each GSK Facility where Product is stored. GSK shall incorporate the Products into its regular cycle count program and, if applicable, provide Adolor with the results of any Adolor Product cycle counts. 
  
 3.1.6 GSK will be responsible for Products lost or destroyed due to
GSK’s negligence or misconduct after GSK’s receipt of the Products at the GSK Facility. GSK will reimburse Adolor for [**] for such lost or destroyed Products. If GSK is obligated to pay any such amounts to Adolor pursuant to this Section
3.1.6, such amounts will be payable within thirty (30) days following receipt of an invoice from Adolor. 
  
 3.1.7 As to Product so supplied by Adolor, Adolor will be responsible for (i) paying any sales or property taxes that relate to Product, (ii) insuring
against loss of Product or any substantial diminution of its value while in GSK Facilities or during transit to customers, and (iii) freight charges not collected from customers that Adolor may authorize from time to time, for the avoidance of
doubt, all such costs will not form part of the Distribution Services Fee but will be deducted from Net Sales for calculating Adolor Product Marketing Contribution. Adolor may request in writing that (i) GSK arrange to insure Product upon terms
acceptable to Adolor, 
  

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 (ii) pay any taxes on behalf of Adolor and (iii) bill Adolor or provide an offset against moneys otherwise due to Adolor
at its cost for (i) and (ii), and, for the avoidance of doubt, such costs will not be included in the Distribution Services Fee. Adolor will reimburse GSK within thirty (30) days of receipt of GSK’s invoice for such costs. 
  
 3.2 Distribution Services. GSK will distribute Product on
Adolor’s behalf and provide distribution services that include the following activities (the “Distribution Services”): 
  
 3.2.1 Receiving, maintaining and storing Product in the GSK Facility on a consignment basis in accordance with the terms and conditions of this Agreement;

  
 3.2.2 Taking, fulfilling, shipping and invoicing orders
(priced in accordance with Section 7.3) of Product; provided, however, that Adolor, given a demonstrated concern of a customer’s credit worthiness, or non-compliance with contract terms or Laws, may advise GSK and GSK will withhold shipment of
Product to said customer for the period of time the concern is relevant; 
  
 3.2.3 Processing Product returns from customers; 
  
 3.2.4 Adolor will forward orders to GSK as soon as practicable if for any reason Adolor should receive orders for Product in the Territory and notify the customer that it has forwarded such order to GSK; 

 
 3.2.5 In the event of a shortage of Product, the JMT will develop a
Product allocation strategy for customers that will be implemented by GSK; and 
  
 3.2.6 For the avoidance of doubt, GSK will not be obligated to segregate the Products from other GSK products in the GSK warehousing system. 
  
 3.3 Wholesaler Support Services. GSK will perform wholesaler support services for Product on Adolor’s behalf
that include the following activities (the “Wholesaler Support Services”): 
  
 3.3.1 The JMT, as part of the U.S. Marketing Plan, will create a strategic wholesaler plan which shall include contracting guidelines, including approved key terms and conditions by targeted customers and the timing
relative to expected launch of Product for contracting to be completed (the “Strategic Wholesaler Plan”); provided, however, if the contracting guidelines are to include [**] the JMT’s decision to adopt such an arrangement
[**]; 
  
 3.3.2 GSK will enter into new contracts or amend its
existing contracts with wholesalers and distributors to include Products (and identify Adolor as the owner of Products) in accordance with the customer-by-customer contracting guidelines approved by the JMT; provided, however, any such contract will
provide that the Product may be transferred to Adolor pursuant to Section 9.1 unless otherwise explicitly authorized by the JMT. GSK will not enter into new contracts for the Products or amend existing contracts to include the Products that do not
meet the contracting guidelines; 
  

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 3.3.3 GSK will provide Adolor a detailed summary of the key terms and conditions of contracts for the
Products with wholesalers and distributors entered into, amended or terminated by GSK; and 
  
 3.3.4 Notwithstanding the foregoing, if such contractual relationships also include GSK’s own products, GSK may preserve the confidentiality of information related to its products and restrict Adolor’s
access to such information. 
  
 3.4 Samples. The Parties
acknowledge and agree that GSK will not be distributing any Adolor Product samples nor tracking any Adolor Product samples. 
  
 3.5 US Logistics Team.  
  
 3.5.1 Members and Meetings. Within thirty (30) days after the Effective Date, the Parties shall establish a US logistics team to coordinate the
supply chain aspects of this Agreement (the “US Logistics Team”). The US Logistics Team shall be jointly chaired by a representative of Adolor and GSK and shall meet at least once each Calendar Quarter. US Logistics Team
representatives shall include individuals who have supply chain management experience. 
  
 3.5.2 Responsibilities. The Parties will provide oversight, review and recommendations regarding Product supply and distribution matters through the US Logistics Team, as applicable, including: 
  
 (a) Product sales forecast and supplier production plans; 
  
 (b) Product delivery schedule to GSK, including expiration dating available
at time of delivery; 
  
 (c) Optimal inventory levels,
lead-times, space requirements, safety stock targets, pallet and case sizes and configurations; 
  
 (d) Technical and logistics review of packaging and manufacturing changes; 
  
 (e) Delivery issues from GSK to customers, including back-orders, freight, product returns and short-dating; and

  
 (f) Such other responsibilities as may be as may be mutually
agreed upon by the Parties from time to time. 
  
 3.5.3
Decision-Making. If the US Logistics Team cannot reach consensus on matters for which it has responsibility, then the JMT will have the final decision in the matter, however the matter will be resolved by the JMT such that GSK is not required
to treat the Product in any manner that increases its obligations for the Product beyond its standard operating procedures in effect for its own products of similar commercial potential. 
  

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 3.5.4 Expenses. Each Party shall be responsible for all travel and related costs and expenses for
its members and other representatives to attend meetings of, and otherwise participate on, the US Logistics Team. 
  
 ARTICLE 4 
 GOVERNMENT PROGRAMS; GOVERNMENT SUPPORT SERVICES 
  
 4.1 Government Programs Strategic Plan. The Parties will each
undertake certain responsibilities, as set forth in this Article 4, for Product in the Territory in connection with the Government Programs. In that regard, subject to Section 7.3, the JMT, as part of the U.S. Marketing Plan, will develop a
strategic plan related to Government Programs (the “Government Programs Strategic Plan”). The Government Programs Strategic Plan will include a pricing and contracting strategy, the customers by name, the timing relative to expected
launch of Product for contracting to be completed, a reporting and compliance program, as well as responsibilities that will enable the Parties to manage the Government Programs for the Product provided, however, if the contracting guidelines are to
include any [**], the JMT’s decision to adopt such an arrangement [**]. 
  
 4.2 Government Program Agreements. Adolor will be responsible for entering into all Government Program agreements in accordance with the strategies set forth in the Government Programs Strategic Plan.

  
 4.3 Government Contracting Services. GSK will perform
government contracting support services for Product on Adolor’s behalf, which shall include the following activities (the “Government Contracting Services”): 
  
 4.3.1 GSK will provide that level of support set forth in Schedule 5.5.2 (sections 2a and 2c) of the Collaboration Agreement
to assist Adolor with the management of Government Programs. 
  
 4.3.2 GSK will provide to Adolor a written summary describing the applicable portion of GSK’s methodology for calculating and reporting, for Adolor Products, (a) the “Best Price” (as defined under the Social Security Act, 42
U.S.C. §1396r-8(c)(1)(C), (b) the “Average Manufacturer Price” (or “AMP”) (as defined under the Social Security Act, 42 U.S.C. §1396r-8(k)(1), (c) the “Average Sales Price” (or “ASP”)
(in the event, and at such time, an ASP must be reported for Adolor Products, under the Medicare Prescription Drug, Improvement and Modernization Act of 2003), (d) the “Federal Ceiling Price” (or “FCP”) (as defined in the
Veterans Health Care Act) and future reporting requirements (the “Methodology”). Adolor shall confirm to GSK in writing Adolor’s approval of the Methodology for the Adolor Products, which approval will not be unreasonably
withheld. Adolor acknowledges and agrees that GSK may update its Methodology from time to time to comply with any changes, or changes in interpretation, of Law, regulation or Government Program policy. In the event of such a change 
  

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 in the Methodology, GSK will provide Adolor with a copy of the revised Methodology within a reasonable timeframe. Adolor
acknowledges and agrees that GSK will not be obligated to make any changes to the Methodology. In the event Adolor does not approve the Methodology or objects to GSK revisions of the Methodology, Adolor will be entitled to terminate this Agreement
and the provisions of Article 9 will govern the transfer of the Services to Adolor, provided that Adolor shall be entitled to terminate this Agreement immediately and without regard to the timing provisions of Article 9. 
  
 4.3.3 GSK will be responsible for calculating and reporting to the applicable
Government Program the Best Price, AMP, ASP (as may be applicable), FCP and future reporting requirements of the Products, consistent with the Methodology and in accordance with applicable Laws. On a quarterly basis during the Term, GSK shall
provide Adolor with the Best Price, AMP, ASP (as applicable) and FCP submitted by GSK to the respective Government Programs for the Products. 
  
 4.3.4 GSK will be responsible for payment of all chargebacks and Rebates, on Adolor’s behalf, that may be due under the Government Programs, in
accordance with Articles 6 and 7 herein, consistent with the Methodology. 
  
 4.3.5 GSK will provide reasonable assistance to Adolor for completing the necessary applications and forms to obtain state Medicaid reimbursement, participate in state pharmaceutical assistance programs, comply with
the Public Health Service (PHS) Section 340B Program price reporting obligations, and comply with the Veterans Health Administration’s (VHA’s) Federal Supply Schedule program. 
  
 4.3.6 Adolor acknowledges that GSK may preserve the confidentiality of information related to its products and restrict
Adolor’s access to such information. 
  
 ARTICLE 5

 MMC SERVICES 
  
 5.1 Managed Markets Customers. GSK and Adolor will each have certain responsibilities in all dealings related to Product in the Territory with
Managed Markets Customers (as defined below) as more particularly described in the strategic plan related to Managed Markets Customers (the “MMC Strategic Plan”) as developed by the JMT as part of the U.S. Marketing Plan.
“Managed Markets Customers” means health insurers, health maintenance organizations, pharmacy benefit management companies, any other organization, public or private, that pays or insures health or medical expenses on behalf of
beneficiaries or recipients, retail pharmacies, hospitals, hospital group purchasing organizations (GPOs), long term care institutions or pharmacies, nursing homes, and other non-wholesaler purchasers of Product. 
  
 5.2 MMC Strategic Plan. The MMC Strategic Plan will include a business
plan and a strategy for approaching and managing Managed Markets Customer accounts, pricing and terms to be offered, including contracting guidelines that include approved key terms and conditions by targeted customers and the timing relative to
expected launch of Product for contracting to be completed; provided, however, if the contracting guidelines are to include [**] 
  

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 [**], the JMT’s decision to adopt such an arrangement [**] (the “MMC Contracting Guidelines”). GSK
will be responsible for the negotiation and subsequent implementation of all contracts with Managed Markets Customers for Products entered into pursuant to the customer-by-customer MMC Contracting Guidelines approved by the JMT; provided, however,
any such contract will provide that the Product may be transferred to Adolor pursuant to Section 9.1 unless otherwise explicitly authorized by the JMT. 
  
 5.3 Managed Markets Services. GSK will perform services with respect to Managed Markets Customers which will include the following activities (the
“MMC Services”): 
  
 5.3.1 GSK will enter into
new contracts or amend its existing contracts with Managed Markets Customers to include Products in accordance with the approved MMC Contracting Guidelines. GSK will not enter into new contracts with Managed Markets Customers for the Products or
amend existing contracts with Managed Markets Customers to include the Products that do not meet the MMC Contracting Guidelines; 
  
 5.3.2 GSK will provide Adolor with a detailed summary of the key terms and conditions of contracts including full disclosure of all financial obligations
that may accrue to the Product with Managed Markets Customers entered into, amended or terminated by GSK; and 
  
 5.3.3 Notwithstanding the foregoing, if such contractual relationships with Managed Markets Customers also include GSK’s own products, GSK may
preserve the confidentiality of information related to its products and restrict Adolor’s access to such information. 
  
 ARTICLE 6 
 FINANCIAL SERVICES

  
 6.1 Financial Services. GSK will perform financial
support services on Adolor’s behalf, which shall include the following activities (the “Financial Support Services”) in accordance with its operating procedures in place for its own products and consistent with customer
contract terms and conditions unless mutually agreed by the Parties at the JMT: 
  
 6.1.1 performing credit check functions on customer orders on behalf of Adolor and assigning credit limitations to customers; 
  
 6.1.2 collecting payment from customers, maintaining accounts receivable records, posting subsequent cash transactions and pursuing delinquent accounts;

  
 6.1.3 carrying out order pricing (priced in accordance with
Section 7.3) and chargeback processing in accordance with Adolor’s written guidelines presented to the JMT; 
  
 6.1.4 managing contracts, paying for Rebates, discounts, returns, trade and stocking allowances; 
  

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 6.1.5 adjudicating on making payments for and retaining records in respect of claims for Rebates; and

  
 6.1.6 meeting annually, or as events dictate, with Adolor to
review customer payment histories, receivable aging, credit limits, payment terms, and other customer issues. 
  
 ARTICLE 7 
 PAYMENT PROVISIONS AND REPORTING 
  
 7.1 Distribution Services Fee. In consideration for the carrying out
of the activities described in this Agreement, Adolor will pay GSK [**] percent ([**]%) of Net Sales of Product in the Territory as the Distribution Services Fee as provided for in Section 1.7 of the Collaboration Agreement. For the avoidance of
doubt, no payments will be made to GSK under this Agreement and the Distribution Services Fee will be paid to GSK as part of the reconciliation process pursuant to and as part of the Collaboration Agreement. 
  
 7.2 Booking of Sales. Adolor will have the sole right and
responsibility to record and book sales of Products in the Territory, which will be based on the date Product is invoiced by GSK to an independent Third Party on behalf of Adolor consistent with the terms and conditions of the Collaboration
Agreement. 
  
 7.3 Pricing. The pricing strategy for the
Product will be [**]; provided, however, [**], if any, as part of any contracting guidelines adopted by the JMT for the Products for wholesalers and distributors and the MMC Contracting Guidelines. 
  
 7.4 Payment. Within [**] of the end of [**], GSK will provide Adolor
with a report detailing the gross sales and the calculation of Net Sales as recorded by GSK for such period. Within [**] days of the end of [**] (or the next Business Day if the [**] day in not a Business Day), GSK will remit to Adolor by wire
transfer the amount of the Net Sales reported as provided in the preceding sentence excluding any deductions for Rebates that Adolor may be processing and paying on their own behalf. Within [**] days of the expiration of [**], GSK will send to
Adolor a reconciliation report that will specify with regard to calculation of Net Sales: (i) each Third Party or Government Program which a Rebate is paid (including any applicable customer or account number), (ii) the period covered by the
payment, and (iii) the specific amount of the Rebate paid to any such Third Party or Government Program. GSK will make supporting documentation available to Adolor for its review at a GSK facility during normal business hours upon reasonable prior
notice for the purpose of verifying the accuracy of the reconciliation report. GSK and Adolor will meet per GSK’s regular schedule to review and set accrual parameters for the subsequent [**]. 
  
 7.5 Standard Reports. Subject to Sections 3.3.4, 4.3.6 and 5.3.3, GSK
will provide to Adolor at no charge those standard reports that GSK uses in the performance and/or management of the Services, as such may be amended from time to time as set forth on Schedule 7.5. The Parties agree to work together in good
faith to satisfy each Party’s needs with regard to financial audits and compliance. 
  

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 7.6 Customer Payments. As provided in the Collaboration Agreement, Adolor will be entitled to
receive all monies collected for the sale of Product or gross sales and will be ultimately responsible for any Rebates and other expenses contemplated in this Agreement that are not part of the Distribution Services Fee. To effect the foregoing, GSK
will collect gross sales from customers on Adolor’s behalf pursuant to Section 6.1.2 and will remit to Adolor Net Sales as calculated by GSK pursuant to Section 7.4, the difference between gross sales and Net Sales being retained by GSK to pay,
on Adolor’s behalf, any Rebates or other expenses pursuant to the terms of this Agreement. The Parties will, each Calendar Quarter, reconcile Rebate and other payments made by GSK and Adolor pursuant to this Agreement and amounts retained by
GSK such that: (a) Adolor will reimburse GSK for all such amounts not previously retained by GSK as part of the calculation of Net Sales that are paid by GSK on Adolor’s behalf in accordance with this Agreement (it being understood that such
reimbursement will not be a part of GSK’s Distribution Services Fee) and (b) Adolor will recoup from GSK amounts previously retained by GSK that have been paid by Adolor. 
  
 7.7 Financial Records; Audits. GSK will keep, and will cause its Affiliates to keep, such accurate and complete true
books of accounts and other records as are necessary to determine the amounts due to or by Adolor under this Agreement. Such records shall be retained by GSK or any of its Affiliates (in such capacity, the “Recording Party”) in
accordance with GSK’s record retention policy. During normal business hours and with reasonable advance notice to the Recording Party, such records shall be made available for inspection, review and audit, at the request and expense of Adolor,
by an independent certified public accountant, or the local equivalent, appointed by Adolor and reasonably acceptable to the Recording Party (the “Auditor”) for the sole purpose of verifying the accuracy of the Recording
Party’s accounting reports and payments made or to be made pursuant to this Agreement; provided, however that such audits may not be performed by Adolor more than [**] and that Adolor [**]. The Auditor will enter into a written confidentiality
agreement with the Recording Party. The Auditor will not reveal to Adolor the details of its review, except for (i) such information as is required to be disclosed under this Agreement and (ii) such information presented in a summary fashion as is
necessary to report the accountants’ conclusions to Adolor, and all such information shall be deemed Confidential Information of the Recording Party; provided, however, that in any event such information may be presented to Adolor in a summary
fashion as is necessary to report the accountants’ conclusions; provided, further, GSK may preserve the confidentiality of information related to its products and such information will not be provided to Adolor. The Auditor will provide a
detailed account of its findings and methodology to the Recording Party. All costs and expenses incurred in connection with performing any such audit shall be paid by Adolor unless the audit discloses at least a [**] percent ([**]%) shortfall, in
which case the Recording Party will bear the full cost of the audit for such Calendar Year. Adolor will be entitled to recover any shortfall in payments due to it as determined by such audit, plus interest thereon calculated in accordance with
Section 6.12 of the Collaboration Agreement, or alternatively shall have the right to offset and deduct any such shortfall in payments due to it against payments that Adolor is otherwise required to make to the Reporting Party under this Agreement.

  

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

  

 - 13 - 

 7.8 Government Program Records, Audits. GSK will keep data and records in accordance with GSK
standards and practices for retention of records related to reporting to the Government Programs so that the prices reported (i.e., Best Price, AMP, ASP and FCP) to the applicable Government Programs may be reviewed and audited in accordance with
this Section. In the event of an audit, subpoena or civil investigatory demand from a Government Program, or a request from a Government Program for a lower price or for additional rebates or discounts, GSK will cooperate with the Government Program
in conducting such audit and, at the request of Adolor, permit a nationally recognized accounting firm with experience in price reporting requirements of the Government Programs, selected by Adolor (except one to whom GSK has some reasonable
objection) (the “Government Program Auditor”), to have access (upon prior written reasonable notice given to GSK) during ordinary business hours, to such books and records as may be necessary to review and audit any payment or price
report made to the Government Program for Adolor Products or otherwise respond to such Government Program audit. The Government Program Auditor will execute a written confidentiality agreement with GSK and will disclose to Adolor only such
information as is necessary to verify the prices reported and/or payments made or otherwise payable to a Government Program under this Agreement. The Government Program Auditor will send a copy of the report to GSK prior to sending the report to
Adolor and/or the Government Program so that GSK may have reasonable opportunity to review the report for issues of confidentiality and to clarify any questions of the Auditor. The Government Program Auditor’s report sent to GSK will also
include the methodology and calculations the Government Program Auditor used to evaluate the prices reported and/or payments made to the Government Program. GSK reserves the right to dispute the Auditor report, or any portion thereof. Adolor will
pay the cost of any such Government Program audit. 
  
 ARTICLE 8

 ACTIVITIES RELATED TO DISTRIBUTION 
  
 8.1 Responsibilities. Unless otherwise expressly addressed herein, the Parties rights and obligations with respect to the Products will be governed
by the terms and conditions of the Collaboration Agreement and the Pharmacovigilance Agreement, including but not limited to, the Commercialization of the Product, patient safety matters, recalls, refunds, Adverse Drug Experiences, Governmental
Authority inspections, approval of labeling and promotional materials, complaints, destruction of returned Product and public statements.  
  
 8.2 Resale in Same Packaging. GSK will not alter in any manner any Product or its packaging as delivered to it by Adolor hereunder. 
  
 8.3 Compliance with Applicable Law. Each Party will comply with all
applicable Laws, provided, that GSK will be solely responsible for compliance with those applicable Laws pertaining to the Services conducted by it hereunder (including, without limitation, those Laws that apply to documentation and records
retention pertaining to the distribution and use of Product within the Territory). GSK will store and distribute the Product consistent with Product labeling and in compliance with all applicable Laws. Each Party will cooperate with the other to
provide such letters, documentation and other information on a timely basis as the other Party may reasonably require to fulfill its reporting and other obligations under applicable Laws to applicable regulatory authorities. Except for such amounts
as are expressly required to be paid by a Party to the other under this Agreement, each Party will be solely responsible for any costs incurred by it to comply with its obligations under applicable Laws. 
  

 - 14 - 

 ARTICLE 9 
 TRANSFER OF RESPONSIBILITIES TO ADOLOR 
  
 9.1 Assumption of Services by Adolor. At anytime after the [**] of the Launch Date, Adolor may elect in its sole discretion to have GSK transfer to Adolor responsibility for the Services and discharge GSK from
the obligation to perform the Services; provided, however, that the transfer of the Services to Adolor will be subject to GSK’s compliance with obligations contained in agreements concerning the Adolor Products with wholesaler, distributors and
Managed Markets Customers. Adolor will give GSK at least ninety (90) days’ prior written notice (“Adolor Termination Notice”) of Adolor’s wish to have GSK transfer to Adolor the Services. The earliest Adolor may send such
notice to GSK is the date that is [**] after the Launch Date. In order to assume responsibility for the Services, Adolor must assume [**]. For purposes of clarification, Adolor shall have the right to assume the Services pursuant to Section 4.3.2
without regard to the above notice period. 
  
 9.2 GSK’s
Ability to Dispute Adolor’s Assumption of the Services. Before GSK is obligated to transfer such responsibilities to Adolor, GSK will first satisfy itself that Adolor can, and will be able to, comply with, and fulfill, the Services. GSK
will be entitled during the ninety (90) day period of such Adolor Termination Notice to carry out such due diligence and auditing of Adolor as GSK may reasonably deem necessary in order to make such determination. If, after conducting such due
diligence and auditing in good faith, and giving due consideration to Adolor, GSK determines that Adolor cannot, or will not be able to, perform the Services, then GSK may elect to continue to perform the Services and the matter will be referred to
the JMT for discussion and review. If the JMT does not concur with GSK’s determination within fifteen (15) days after the matter has been referred to the JMT, the matter will be referred to the JSC for discussion and review for another fifteen
(15) day period; provided, however, Adolor will have final decision-making authority with respect to whether or not it will assume and perform the Services and may assume such responsibilities regardless of the finding of the JSC subject to and in
accordance with this Article 9. If Adolor assumes responsibility for performance of the Services, Adolor will perform the services in a commercially reasonable manner that is consistent with the performance standards established by the Parties
pursuant hereto. The Parties agree that the provisions of preceding sentence will survive termination or expiration of this Agreement so long as the Collaboration Agreement is in effect. 
  
 9.3 Termination of Payment of Distribution Services Fee to GSK. Once all the Services have been transferred to Adolor
then, in consideration for the performance of the Services, the Distribution Services Fee will no longer be received by GSK and Adolor shall be entitled to receive the Distribution Services Fee in accordance with the provisions of the Collaboration
Agreement. For the avoidance of doubt, no payments will be made to Adolor by GSK for assuming responsibility for the Services and Adolor shall receive the Distribution Services Fee as part of the reconciliation process pursuant to and as part of the
Collaboration Agreement. 
  

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

  

 - 15 - 

 ARTICLE 10 
 REPRESENTATIONS AND WARRANTIES 
  
 10.1 Mutual Representations and Warranties. Adolor and GSK each represents and warrants to the other as of the Effective Date that: 
  
 10.1.1 Such Party (a) is a company duly organized, validly existing, and in good standing under the Laws of its incorporation; (b) is duly qualified as a
corporation and in good standing under the Laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, where the failure to be so qualified would have a material adverse effect on
its financial condition or its ability to perform its obligations hereunder; (c) has the requisite corporate power and authority and the legal right to conduct its business as now conducted and hereafter contemplated to be conducted; (d) has or will
obtain all necessary licenses, permits, consents, or approvals from or by, and has made or will make all necessary notices to, all Governmental Authorities having jurisdiction over such Party, to the extent required for the ownership and operation
of its business, where the failure to obtain such licenses, permits, consents or approvals, or to make such notices, would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder; and (e) is in
compliance with its charter documents; 
  
 10.1.2 The execution,
delivery and performance of this Agreement by such Party and all instruments and documents to be delivered by such Party hereunder (a) are within the corporate power of such Party; (b) have been duly authorized by all necessary or proper corporate
action; (c) do not conflict with any provision of the charter documents of such Party; (d) will not, to the best of such Party’s knowledge, violate any law or regulation or any order or decree of any court of governmental instrumentality; (e)
will not violate or conflict with any terms of any indenture, mortgage, deed of trust, lease, agreement, or other instrument to which such Party is a party, or by which such Party or any of its property is bound, which violation would have a
material adverse effect on its financial condition or on its ability to perform its obligations hereunder; 
  
 10.1.3 This Agreement has been duly executed and delivered by such Party and constitutes a legal, valid and binding obligation of such Party, enforceable
against such Party in accordance with its terms, except as such enforceability may be limited by applicable insolvency and other Laws affecting creditors’ rights generally, or by the availability of equitable remedies; and 
  
 10.1.4 Neither Party has, nor will pay, offer or promise to pay, or authorize
the payment directly or indirectly of any moneys or anything of value to any government official or employee, or any political party or candidate for political office for the purpose of influencing any act or decision of such official or of the
government to obtain or retain business or direct business to any person. 
  
 10.2 Additional Adolor Representations, Warranties and Covenants. Adolor further represents, warrants and covenants to GSK that Adolor will ship or have shipped the Product in accordance with applicable Law and
the specifications for the Product and that each Certificate of Compliance furnished by Adolor to GSK hereunder is complete and correct. 
  

 - 16 - 

 10.3 Additional GSK Covenants. 
  
 10.3.1 GSK further represents, warrants and covenants to Adolor that it will not give or make any, warranties,
representations or statements on behalf of Adolor as to the condition, quality, durability, performance, merchantability or fitness for a particular purpose or any other feature of the Products (whether to wholesalers or otherwise) beyond such
statements approved by the JMT as part of the MMC Contracting Guidelines, other customer contracting guidelines adopted by the JMT, or the Product labeling. 
  
 10.3.2 GSK further represents, warrants and covenants that it will store and ship the Product in accordance with cGMP and applicable Laws. 
  
 10.4 Disclaimer of Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
IN THIS AGREEMENT, EACH PARTY EXPRESSLY DISCLAIMS, WAIVES, RELEASES, AND RENOUNCES ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 
  
 ARTICLE 11 
 INDEMNIFICATION 
  
 11.1 Indemnification by GSK. Subject to the provisions of Section 11.2 below, GSK will defend, indemnify and hold harmless Adolor and its Affiliates and each of their officers, directors, shareholders,
employees, successors and assigns from and against all Claims of Third Parties, and all associated Losses, to the extent arising out of (a) GSK’s negligence or willful misconduct in performing any of its obligations under this Agreement, or (b)
a breach by GSK of any of its representations, warranties, covenants or agreements under this Agreement; provided, however, that in all cases referred to in this Section 11.1, GSK will not be liable to indemnify Adolor for any Losses of Adolor to
the extent that such Losses of Adolor were caused by: (x) the negligence or willful misconduct or wrongdoing of Adolor or (y) any breach by Adolor of its representations, warranties, covenants or agreements hereunder. 
  
 11.2 Indemnification by Adolor. Adolor will defend, indemnify and hold
harmless GSK and its Affiliates and each of their officers, directors, shareholders, employees, successors and assigns from and against all Claims of Third Parties, and all associated Losses, to the extent arising out of (a) Adolor’s negligence
or willful misconduct in performing any of its obligations under this Agreement, or (b) a breach by Adolor of any of its representations, warranties, covenants or agreements under this Agreement; provided, however, that in all cases referred to in
this Section 11.2, Adolor will not be liable to indemnify GSK for any Losses of GSK to the extent that such Losses of GSK were caused by: (x) the negligence or willful misconduct or wrongdoing of GSK or (y) any breach by GSK of its representations,
warranties, covenants or agreements hereunder. 
  
 11.3 Product
Liability Claims. Notwithstanding anything to the contrary contained in this Article 11, the Parties agree that nothing in this Agreement is meant to modify the provisions of Section 14.5 of the Collaboration Agreement and that all Product
Liability Claims will be addressed as provided therein. 
  

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 11.4 Continued Indemnification Under the Collaboration Agreement. In addition to the
indemnification obligations set forth in Section 11.1 and 11.2, each Party will continue to indemnify the other Party in accordance with the terms and conditions of the Collaboration Agreement. 
  
 11.5 Indemnification Procedures. The processes and procedures for
indemnification will be as provided in the Collaboration Agreement. 
  
 11.6 Limitation of Liability. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER OR ANY OF ITS AFFILIATES FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST
PROFITS, BUSINESS OR GOODWILL) SUFFERED OR INCURRED BY SUCH OTHER PARTY OR ITS AFFILIATES IN CONNECTION WITH A BREACH OR ALLEGED BREACH OF THIS AGREEMENT. THE FOREGOING SENTENCE WILL NOT LIMIT THE OBLIGATIONS OF EITHER PARTY TO INDEMNIFY THE OTHER
PARTY FROM AND AGAINST THIRD PARTY CLAIMS UNDER THIS ARTICLE 11 OR AS OTHERWISE SET FORTH IN THE COLLABORATION AGREEMENT. 
  
 ARTICLE 12 
 CONFIDENTIALITY

  
 All information provided by one Party to the other
pursuant to this Agreement, including the terms of this Agreement, will be deemed to be Confidential Information and as such the Parties rights and obligations related thereto will be governed by the provisions of Article 12 of the Collaboration
Agreement. 
  
 ARTICLE 13 
 TERMINATION 
  
 13.1 Term. This Agreement will become effective as of the Effective Date and, unless sooner terminated as provided herein, expire at the end of the
Term. 
  
 13.2 Termination for Breach. Either Party may,
without prejudice to any other remedies available to it at law or in equity, terminate this Agreement in the event that the other Party (as used in this subsection, the “Breaching Party”) will have materially breached or defaulted
in the performance of any of its obligations. The Breaching Party will, if such breach can be cured, have sixty (60) days after written notice thereof was provided to the Breaching Party by the non-breaching Party to remedy such default (or, if such
default cannot be cured within such 60-day period, the Breaching Party must commence and diligently continue actions to cure such default during such 60-day period). Any such termination will become effective at the end of such 60-day period unless
the Breaching Party has cured any such breach or default prior to the expiration of such 60-day period (or, if such default is capable of being cured but cannot be cured within such 60-day period, the Breaching Party has commenced and diligently
continued actions to cure such default provided always that, in such instance, such cure must have occurred within one hundred twenty (120) days after written notice thereof was provided to the Breaching Party by the non-breaching Party to remedy
such default). 
  

 - 18 - 

 13.3 Termination of Collaboration Agreement. In the event that the Collaboration Agreement is
terminated with respect to the Products in the Territory, this Agreement will similarly terminate. 
  
 13.4 Effect of Termination. Upon expiration of this Agreement or upon termination of this Agreement by either Party, GSK will promptly return to
Adolor all quantities of Product in its possession and GSK, will treat all Adolor Confidential Information relating to the Product in its possession or control in accordance with the provisions of Article 12 of the Collaboration Agreement, and
Adolor will have the right to perform or have performed the Services. The Parties will cooperate to create and implement a transition plan that will promptly transition all Services to Adolor with minimal disruption to either Party and the
customers. Except with respect to the performance of the Services by GSK pursuant to Section 5.5.2(b) of the Collaboration Agreement, a termination of this Agreement for any reason is in no way meant to limit, remove or modify any obligation of
either Party under the Collaboration Agreement and the Collaboration Agreement will remain in full force and effect in accordance with its terms. 
  
 13.5 Accrued Rights; Surviving Obligations. Termination, relinquishment or expiration of this Agreement for any reason will be without prejudice to
any rights, which will have accrued to the benefit of either Party prior to such termination, relinquishment or expiration. Such termination, relinquishment or expiration will not relieve either Party from obligations, which are expressly indicated
to survive termination or expiration of this Agreement. All of the Parties’ rights and obligations under Articles 11, 12, 13 and 14 in strict accordance with their respective terms and expressly subject to all time limitations stated therein,
will survive expiration or termination of this Agreement. 
  
 ARTICLE 14 
 MISCELLANEOUS PROVISIONS 
  
 14.1 Assignment. This Agreement may not be assigned by either Party without the prior consent of the other Party;
provided, however that either Party may assign this Agreement, in whole or in part, to any of its Affiliates if such Party guarantees the performance of this Agreement by such Affiliate; and provided further that either Party may assign this
Agreement to a successor to all or substantially all of the assets of such Party whether by merger, sale of stock, sale of assets or other similar transaction. Any assignment made contrary to the terms hereof will be void. This Agreement will be
binding upon, and subject to the terms of the foregoing sentence, inure to the benefit of the Parties hereto, their permitted successors, legal representatives and assigns. 
  
 14.2 Waiver. Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the
benefit thereof, but no such waiver will be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition. No waiver by any Party of any term or condition of this Agreement, in any one
or more instances, will be deemed to be or construed as a waiver of the same or any other term or condition of this Agreement on any future occasion. Except as expressly set forth in this Agreement, all rights and remedies available to a Party,
whether under this Agreement or afforded by law or otherwise, will be cumulative and not in the alternative to any other rights or remedies that may be available to such Party. 
  

 - 19 - 

 14.3 Dispute Resolution. The resolution of all controversies or claims between the Parties arising
out of or relating to this Agreement will be governed by the terms and provisions of Section 18.5 of the Collaboration Agreement. 
  
 14.4 Entirety of Agreement, Amendments. This Agreement and the Collaboration Agreement, as amended (including the exhibits and schedules hereto and
thereto) constitutes the entire agreement between the Parties hereto with respect to the within subject matter and supersedes all previous agreements and understandings between the Parties, whether written or oral. This Agreement may be altered,
amended or changed only by a written agreement making specific reference to this Agreement and signed by duly authorized representatives of Adolor and GSK. For the avoidance of doubt, nothing contained herein is intended to limit or remove
GSK’s obligation to provide distribution and commercial services in the remainder of the United States (as defined in the Collaboration Agreement) outside of the Territory. 
  
 14.5 Governing Law. This Agreement will be governed by and construed in accordance with the principles provided in
Section 18.4 of the Collaboration Agreement. 
  
 14.6
Relationship of the Parties. Each Party will bear its own costs incurred in the performance of its obligations hereunder without charge or expense to the other except as expressly provided in this Agreement. Neither Party will have any
responsibility for the hiring, termination or compensation of the other Party’s employees or for any employee benefits of such employee. No employee or representative of a Party will have any authority to bind or obligate the other Party to
this Agreement for any sum or in any manner whatsoever, or to create or impose any contractual or other liability on the other Party without said Party’s approval. For all purposes, and notwithstanding any other provision of this Agreement to
the contrary, GSK’s legal relationship under this Agreement to Adolor will be that of independent contractor. This Agreement is not a partnership agreement and nothing in this Agreement will be construed to establish a relationship of
co-partners or joint venturers between the Parties. 
  
 14.7
Headings; Schedules; Counterparts. 
  
 14.7.1
Headings. The headings used in this Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof. 
  
 14.7.2 Schedules. All Schedules delivered pursuant to this Agreement will be deemed part of this Agreement and incorporated herein by reference, as
if fully set forth herein. All provisions contained in any Schedule delivered by or on behalf of the Parties hereto, or in connection with the transactions contemplated hereby, are an integral part of this Agreement. 
  
 14.7.3 Counterparts. This Agreement may be executed in any two
counterparts, each of which, when executed, will be deemed to be an original and both of which together will constitute one and the same document. 
  
 14.8 Severability. In the event of the invalidity of any provisions of this Agreement, the Parties agree that such invalidity will not affect the
validity of the remaining provisions of this Agreement. The Parties will replace an invalid provision with valid provisions which most closely approximate the purpose and economic effect of the invalid provision. In the event that the terms and
conditions of this Agreement are materially altered as a result of the preceding 
  

 - 20 - 

 sentences, the Parties will renegotiate the terms and conditions of this Agreement in order to resolve any inequities.
Nothing in this Agreement will be interpreted so as to require either Party to violate any applicable laws, rules or regulations. 
  
 14.9 Cumulative Rights. Except as expressly provided herein, the rights, powers and remedies hereunder will be in addition to, and not in
limitation of, all rights, powers and remedies provided at applicable Law or in equity, or under any other agreement between the Parties, and all of such rights, powers and remedies will be cumulative, and may be exercised successively or
cumulatively. 
  
 14.10 Expenses. Adolor and GSK will each
bear their own direct and indirect expenses incurred in connection with the negotiation and preparation of this Agreement and any related agreements and, except as set forth in this Agreement or any related agreements, the performance of the
obligations contemplated hereby and thereby. 
  
 14.11
Notices. Any notice required or permitted to be given hereunder will be delivered in accordance with the provisions of Section 18.7 of the Collaboration Agreement. 
  
 14.12 Force Majeure. The occurrence of an event which materially interferes with the ability of a Party to perform
its obligations or duties hereunder which is not within the reasonable control of the Party affected or any of its Affiliates, not due to malfeasance by such Party or its Affiliates, and which could not with the exercise of due diligence have been
avoided (each, a “Force Majeure Event”), including, but not limited to, an injunction, order or action by a Governmental Authority, fire, accident, labor difficulty, strike, riot, civil commotion, act of God, inability to obtain raw
materials, delay or errors by shipping companies or change in law, will not excuse such Party from the performance of its obligations or duties under this Agreement, but will merely suspend such performance during the continuation of the Force
Majeure Event. The Party prevented from performing its obligations or duties because of a Force Majeure Event will promptly notify the other Party of the occurrence and particulars of such Force Majeure Event and will provide the other Party, from
time to time, with its best estimate of the duration of such Force Majeure Event and with notice of the termination thereof. The Party so affected will use commercially reasonable efforts to avoid or remove such causes of nonperformance as soon as
is reasonably practicable. Upon termination of the Force Majeure Event, the performance of any suspended obligation or duty will promptly recommence. The Party subject to the Force Majeure Event will not be liable to the other Party for any direct,
indirect, consequential, incidental, special, punitive, exemplary or other damages arising out of or relating to the suspension or termination of any of its obligations or duties under this Agreement by reason of the occurrence of a Force Majeure
Event, provided such Party complies in all material respects with its obligations under this Section 14.12. 
  
 [SIGNATURE PAGE FOLLOWS] 
  

 - 21 - 

 IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed by its duly authorized
representative. 
  

			
	ADOLOR CORPORATION
		
	 By:
	 	 /s/ Bruce A. Peacock

	 Name:
	 	 Bruce A. Peacock

	 Title:
	 	 President and Chief Executive
 Officer

	
	SMITHKLINE BEECHAM CORPORATION
		
	 By:
	 	 /s/ Donald F. Parman

	 Name:
	 	 Donald F. Parman

	 Title:
	 	 Vice President and Secretary

  
 SIGNATURE PAGE TO

 DISTRIBUTION SERVICES AGREEMENT 

 SCHEDULE 1.8 
  
 FORM OF CERTIFICATE OF COMPLIANCE 
  
 (see attached) 

 

 
  
 Certificate of Compliance

  

					
	 Product Description:
	 	  

	 	 
			
	Manufacturer:	 	  

	 	 
			
	Manufacturer Assigned Batch/ Lot No.:	 	  

	 	 
			
	Adolor QA Assigned Product Disposition No.:	 	  

	 	 

  
 Statement of Compliance

  
 The above stated product has been determined by Adolor Quality Assurance to
have been manufactured and tested in compliance with United States current Good Manufacturing Practice, all applicable Laws and licenses, the specifications for the Product and Adolor approved vendor standard operating procedures. This product meets
all requirements for human use and is suitable for release into interstate commerce. 
  
 Quality Assurance Approval: 
  

			
	
	  	

	Signature	  	Date
		
	  

	  	 
	Print Name	  	 

 SCHEDULE 3.1.1 
  
 1. GSK Quality Assurance Requirements. 
  
 (a) All shipments of Product will arrive within a delivery window of up to [**], and [**], of its scheduled delivery or its expected delivery date. Any
delays must be adequately investigated in accordance with paragraph 5 below. 
  
 (b) All shipments of Product must include the appropriate shipping documents, including but not limited to the packing list and bill of ladings. 
  
 (c) Adolor shall provide a Certificate of Compliance delivered no later than [**] from receipt of Product at the GSK
Facility. The Certificate of Compliance must be signed and approved by Adolor’s head of Quality Assurance or authorized designee. 
  
 2. Adolor Product shipped to the GSK Facility(ies) will be received under “quarantine” status until GSK releases the Product for distribution in accordance with
the requirements of paragraph 4 below of this Schedule 3.1.1. 
  
 3. GSK will
maintain the Adolor Product under the required storage conditions as provided for by the current Adolor Product label. Pursuant to GSK’s policies and procedures, in the event of an incident involving Adolor Product that occurs at the GSK
Facility or while the Adolor Product is in the possession of a GSK carrier, GSK will investigate the incident and provide Adolor with a control copy of its completed investigation. GSK may redact any portions of any such investigation that do not
relate to Adolor Products. 
  
 4. In order to meet “release” status of
Adolor Product at the GSK Facility and prior to distribution in accordance with the terms of this Agreement, GSK will, for each shipment of Adolor Product, conduct a visual inspection and confirm compliance with the GSK Quality Assurance
Requirements. 
  
 5. GSK shall notify Adolor in writing in the event there is any
deviation from the acceptance criteria identified in paragraph 4 above for Products based on receipt and inspection at the GSK Facility(ies). GSK shall hold the affected Adolor Product under quarantine status and will consult with Adolor on the
disposition of affected Product shipments or parts thereof. GSK shall not take any action (disposition, destruction or return to Adolor) with respect to such affected Product shipment without the written consent of Adolor. Adolor will promptly
investigate the affected Product shipment and provide GSK with written notification of Adolor’s decision, including a summary of its investigation and conclusion, with respect to any such affected Product shipment. Adolor shall provide a new
Certificate of Compliance for any batch of affected shipped Product, or portion thereof that is to be released. 
  
 6. GSK will maintain all Adolor Product related records including receipt verification, release and distribution information in accordance with GSK’s record
retention policy for records pertaining to its own products in a manner so as to protect and secure the records against damage, destruction, unintended changes, or disposal during the required time of storage. 
  

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

 7. GSK and Adolor’s rights and obligations with respect to Adverse Drug Experiences, complaints and recalls related
to the Product will be governed by the terms and conditions of the Collaboration Agreement and Pharmacovigilance Agreement. 
  
 8. In the event that either Party reasonably suspects a shipment or lot of Product to be misbranded or adulterated in accordance with the U.S. Federal Food, Drug and
Cosmetic Act, either Party may request, and each Party will, as appropriate, quarantine such affected shipments or lots of Products until a corrective action is designated pursuant to the Collaboration Agreement. 

 SCHEDULE 7.5 
  
 Reports 
  
 [**] 
  

	[**]	=Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.API Compound Supply Agreement between the Company and Torcan Chemical Ltd.

 Exhibit 10.3 
  
 Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as **. A complete version of this exhibit has been filed separately with the Securities and Exchange Commission. 
  
 EXECUTION VERSION 
  
 API COMPOUND SUPPLY AGREEMENT 
  
 between 
  
 ADOLOR CORPORATION 
  
 and 
  
 TORCAN CHEMICAL
LTD. 
  
 dated 
  
 July 13, 2004 

 TABLE OF CONTENTS 
  

							
	 	 	 	  	Page
			
	ARTICLE 1	 	        DEFINITIONS	  	1
			
	ARTICLE 2	 	        SUPPLY BY SUPPLIER	  	5
				
	 	 	2.1	 	Commitment to Supply	  	5
				
	 	 	2.2	 	Facilities, Equipment and Materials	  	6
				
	 	 	2.3	 	Responsibility	  	6
			
	ARTICLE 3	 	        STANDARD TERMS OF SUPPLY OF API COMPOUND	  	6
				
	 	 	3.1	 	Regulatory Matters	  	6
				
	 	 	3.2	 	Manufacturing Matters	  	7
				
	 	 	3.3	 	Storage Obligations, Containers and Inventories	  	9
				
	 	 	3.4	 	Materials Suppliers	  	9
				
	 	 	3.5	 	Facility	  	9
				
	 	 	3.6	 	Monitoring and Recordkeeping; Operating Procedures	  	10
				
	 	 	3.7	 	Inspection, Access and Documentation	  	10
				
	 	 	3.8	 	Compliance and Quality	  	11
				
	 	 	3.9	 	Provision of Information	  	11
			
	ARTICLE 4	 	        SUPPLY OF BX7	  	11
				
	 	 	4.1	 	Supply	  	11
				
	 	 	4.2	 	Consignment Stock	  	11
				
	 	 	4.3	 	Use of the BX7	  	11
				
	 	 	4.4	 	Representations and Warranties of Supplier for BX7	  	11
				
	 	 	4.5	 	Inspection	  	12
				
	 	 	4.6	 	Risk of Loss	  	12
				
	 	 	4.7	 	Withdrawals of Stock	  	12
			
	ARTICLE 5	 	        FORECASTING AND ORDERING	  	13
				
	 	 	5.1	 	Forecast	  	13
				
	 	 	5.2	 	Purchase Orders	  	13
				
	 	 	5.3	 	Addressees for Correspondence	  	14
			
	ARTICLE 6	 	        SHIPPING AND DELIVERY; STORAGE	  	14
				
	 	 	6.1	 	Shipping and Delivery Dates	  	14
				
	 	 	6.2	 	Terms of Delivery	  	15

  

 i 

 TABLE OF CONTENTS 
 (continued) 
  

							
	 	  	 	  	 	  	Page
			
	6.3	  	Shipping Costs	  	15
			
	6.4	  	Documentation and Release	  	15
			
	6.5	  	Retention of Samples	  	15
			
	6.6	  	Storage of API Compound	  	15
			
	ARTICLE 7	  	        INSPECTION AND DEFECTIVE API COMPOUND; RECALL	  	16
			
	7.1	  	Inspection by Adolor	  	16
			
	7.2	  	Latent Defects	  	16
				
	 	  	7.3	  	Defective API Compound	  	16
				
	 	  	7.4	  	Remedies	  	17
				
	 	  	7.5	  	API Compound Recall	  	17
				
	 	  	7.6	  	Shortages	  	17
				
	 	  	7.7	  	Reservation of Rights	  	17
			
	ARTICLE 8	  	        FINANCIAL PROVISIONS	  	17
				
	 	  	8.1	  	Supply Price	  	17
				
	 	  	8.2	  	Price Increases and Decreases	  	18
				
	 	  	8.3	  	Process Improvements and Sharing of Cost Efficiencies	  	18
				
	 	  	8.4	  	Manner of Payments	  	18
				
	 	  	8.5	  	Invoices; Timing of Payments	  	18
				
	 	  	8.6	  	Tax Withholding	  	18
			
	ARTICLE 9	  	        CONFIDENTIALITY	  	19
				
	 	  	9.1	  	Confidential Information	  	19
				
	 	  	9.2	  	Public Announcements	  	19
				
	 	  	9.3	  	Assignment of Inventions	  	19
				
	 	  	9.4	  	Confidentiality of this Agreement	  	20
				
	 	  	9.5	  	Survival	  	20
			
	ARTICLE 10	  	        REPRESENTATIONS AND WARRANTIES	  	20
				
	 	  	10.1	  	Representations of Supplier	  	20
				
	 	  	10.2	  	Mutual Representations and Warranties	  	21
				
	 	  	10.3	  	Disclaimer of Warranty	  	21
			
	ARTICLE 11	  	        INDEMNIFICATION AND INSURANCE	  	21

  

 ii 

 TABLE OF CONTENTS 
 (continued) 
  

							
	 	  	 	  	Page
			
	 11.1  
	  	Indemnification by Supplier	  	21
			
	11.2  	  	Indemnification by Adolor	  	22
			
	11.3  	  	Indemnification Procedure	  	22
			
	11.4  	  	Assumption of Defense	  	23
			
	11.5  	  	Insurance	  	23
			
	ARTICLE 12	  	        TERM AND TERMINATION	  	24
				
	 	  	12.1  	  	Term	  	24
				
	 	  	12.2  	  	Termination	  	24
			
	ARTICLE 13	  	        RIGHTS AND DUTIES UPON TERMINATION	  	24
				
	 	  	13.1  	  	Pending Purchase Orders	  	24
				
	 	  	13.2  	  	Outstanding Payment	  	25
				
	 	  	13.3  	  	Return of Materials	  	25
				
	 	  	13.4  	  	Access to Records/Maintenance of Critical Samples and Test Programs	  	25
				
	 	  	13.5  	  	Accrued Rights; Surviving Obligations	  	25
			
	ARTICLE 14	  	        GENERAL PROVISIONS	  	25
				
	 	  	14.1  	  	Relationship of the Parties	  	25
				
	 	  	14.2  	  	Covenant Not to Compete	  	26
				
	 	  	14.3  	  	Force Majeure	  	26
				
	 	  	14.4  	  	Governing Law	  	27
				
	 	  	14.5  	  	Jurisdiction	  	27
				
	 	  	14.6  	  	Assignment	  	27
				
	 	  	14.7  	  	Notices	  	28
				
	 	  	14.8  	  	Severability	  	28
				
	 	  	14.9  	  	Headings	  	28
				
	 	  	14.10	  	Certain Conventions	  	28
				
	 	  	14.11	  	Waiver; Remedies	  	29
				
	 	  	14.12	  	Entire Agreement	  	29
				
	 	  	14.13	  	No License	  	29
				
	 	  	14.14	  	Third Party Beneficiaries	  	29
				
	 	  	14.15	  	Counterparts	  	29

  

 iii 

 SCHEDULES 
  

			
	SCHEDULE 1.44	 	SPECIFICATIONS
	SCHEDULE 2.3	 	CURRENT APPROVED SUBCONTRACTORS
	SCHEDULE 3.2	 	QUALITY AGREEMENT
	SCHEDULE 4.7.4	 	MANUFACTURING LINE LOSSES
	SCHEDULE 5.1	 	FIRST FORECAST
	SCHEDULE 8.1	 	SUPPLY PRICE

  

 iv 

 API COMPOUND SUPPLY AGREEMENT 
  
 This API COMPOUND SUPPLY AGREEMENT (this “Agreement”), made as of the 13th day of July, 2004 (the “Effective Date”), between ADOLOR CORPORATION, a Delaware corporation having a principal place of business at
700 Pennsylvania Drive, Exton, Pennsylvania 19341 (“Adolor”), and Torcan Chemical Ltd., a corporation organized under the laws of the province of Ontario, having a principal place of business at P.O. Box 308, 110 Industrial Parkway
North, Ontario, Canada L4G 3H4 (“Supplier”). Adolor and Supplier may be referred to as a “Party” or, together, the “Parties”. 
  
 RECITALS 
  
 WHEREAS, Supplier has the capability to manufacture the API Compound (as defined below); and 
  
 WHEREAS, the Parties desire that Supplier supply Adolor with the API Compound under this Agreement on the terms and subject
to the conditions set forth below. 
  
 NOW, THEREFORE, in
consideration of the mutual promises, covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree
as follows: 
  
 ARTICLE 1 
 DEFINITIONS 
  
 For purposes of this Agreement, the following initially capitalized terms, whether used in the singular or plural, shall have the following meanings:

  
 1.1 “Act” means the U.S. Federal Food, Drug
and Cosmetic Act as amended from time to time. 
  
 1.2
“Adverse Drug Experience” means any of: an “adverse drug experience,” a “life-threatening adverse drug experience,” a “serious adverse drug experience,” or an “unexpected adverse drug
experience,” as those terms are defined at either 21 C.F.R. § 312.32 or 21 C.F.R. § 314.80. 
  
 1.3 “Affiliate” of a Party means any Person, whether de jure or de facto, which directly or indirectly controls, is controlled by, or is
under common control with such Person for so long as such control exists, where “control” means the decision-making authority as to such Person and, further, where such control shall be presumed to exist where a Person owns more than fifty
percent (50%) of the equity (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) having the power to vote on or direct the affairs of the entity. 
  
 1.4 “API Compound” means bulk quantities of Compound prior
to the commencement of secondary manufacturing resulting in Product. 

 1.5 “Breaching Party” shall have the meaning set forth in Section 12.2.1 
  
 1.6 “Business Day” means any day on which banking
institutions in New York, New York, United States and Ontario, Canada are open for business. 
  
 1.7 “BX7” means the starting material for Compound, having the molecular formula (3R,4R)-3-)3,4-dimethyl-4-piperidinyl)phenol. 
  
 1.8 “Calendar Quarter” means each successive period of three calendar months commencing January 1, April 1,
July 1 and October 1. 
  
 1.9 “Calendar Year”
means, for the first calendar year, the period commencing on the Effective Date and ending on December 31 of the calendar year during which the Effective Date occurs, and each successive period beginning on January 1 and ending twelve (12)
consecutive calendar months later on December 31. 
  
 1.10
“Certificate of Analysis” means a document identified as such and provided by Supplier to Adolor or its designee that sets forth the analytical test results against the Specifications for a specified lot of API Compound shipped to
Adolor or its designee hereunder. 
  
 1.11 “Certificate of
Compliance” means a document identified as such and provided by Supplier to Adolor or its designee that certifies, warrants and reflects that each batch of API Compound was produced and tested in compliance with the Specifications, cGMPs,
the Master Batch Record and all other applicable regulatory documents. 
  
 1.12 “Claims” means all charges, complaints, actions, suits, proceedings, hearings, investigations, claims and demands. 
  
 1.13 “Compound” means the peripheral mu antagonist having molecular formula
[[2(S)-[[4(R)-(3-hydroxyphenyl)-3(R),4-dimethyl-1-piperidinyl]-methyl]-1-oxo-3-phenylpropyl]amino]acetic acid dihydrate, known generically as “alvimopan”, and all pharmaceutically acceptable salts and solvates thereof. 
  
 1.14 “Confidential Information” means all secret,
confidential or proprietary information or data, whether provided in written, oral, graphic, video, computer or other form, provided by one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”)
pursuant to this Agreement or generated pursuant to this Agreement, including but not limited to, information relating to the Disclosing Party’s existing or proposed research, development efforts, patent applications, business or products, the
terms of this Agreement and any other materials that have not been made available by the Disclosing Party to the general public. Notwithstanding the foregoing sentence, Confidential Information shall not include any information or materials that:

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

 2 

 1.14.2 were generally available to the public or otherwise part of the public domain at the time of its
disclosure to the Receiving Party; 
  
 1.14.3 became generally
available to the public or otherwise part of the public domain after its disclosure or development, as the case may be, and other than through any act or omission of a Party in breach of such Party’s confidentiality obligations under this
Agreement; 
  
 1.14.4 were disclosed to a Party, other than under
an obligation of confidentiality, by a Third Party who had no obligation to the Disclosing Party not to disclose such information to others; or 
  
 1.14.5 were independently discovered or developed by or on behalf of the Receiving Party without the use of the Confidential Information belonging to the
other Party and the Receiving Party has documentary evidence to that effect. 
  
 1.15 “Consent” means any consent, authorization, permit, certificate, license or approval of, exemption by, or filing or registration with, any Governmental Authority or other person. 
  
 1.16 “Current Good Manufacturing Practices” or
“cGMPs” means all applicable standards relating to manufacturing practices for fine chemicals, active pharmaceutical ingredients, intermediates, bulk products or finished pharmaceutical products. For purposes of this Agreement,
cGMPs shall mean (i) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Parts 210 and The Rules Governing Medicinal Products in the European Community, Volume IV Good Manufacturing Practice for Medicinal Products as
each may be amended from time to time, (ii) the principles detailed in the ICH Q7A guidelines, (iii) promulgated by any Governmental Authority having jurisdiction over the manufacture of the API Compound, in the form of Laws, or (iv) promulgated by
any Governmental Authority having jurisdiction over the manufacture of the API Compound, in the form of guidance documents (including but not limited to advisory opinions, compliance policy guides and guidelines) which guidance documents are being
implemented within the pharmaceutical manufacturing industry for such API Compound and subject to any arrangements, additions or clarifications agreed to from time to time by the Parties in the Quality Agreement. 
  
 1.17 “Disclosing Party” shall have the meaning set forth in
Section 1.14. 
  
 1.18 “Executed Batch Record”
means the executed and completed Master Batch Record for each batch of API Compound manufactured pursuant to the terms of this Agreement. 
  
 1.19 “Facility” shall mean Supplier’s manufacturing facility located at 110 Industrial Parkway North, Ontario, Canada L4G 3H4.

  
 1.20 “FDA” means the United States Food and
Drug Administration and any successor thereto. 
  
 1.21
“File Retention Samples” shall have the meaning set forth in Section 6.5. 
  
 1.22 “Force Majeure Event” shall have the meaning set forth in Section 14.3. 
  

 3 

 1.23 “Forecast” shall have the meaning set forth in Section 5.1. 
  
 1.24 “Governmental Authority” means any court, tribunal,
arbitrator, agency, legislative body, commission, official or other instrumentality of (a) any government of any Country, (b) a federal, state, province, county, city or other political subdivision thereof or (c) any supranational body, including
without limitation the European Agency for the Evaluation of Medicinal Products. 
  
 1.25 “ICH” means the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use. 
  
 1.26 “Indemnified Party” shall have the meaning set forth in
Section 11.3.1. 
  
 1.27 “Indemnifying Party”
shall have the meaning set forth in Section 11.3.1. 
  
 1.28
“Laws” means all laws, statutes, rules, regulations (including, without limitation, cGMPs, Investigational New Marketing Authorization regulations at 21 C.F.R. § 312, NDA regulations at 21 C.F.R. § 314, relevant provisions
of the Federal Food, Drug and Cosmetic Act, and other laws and regulations enforced by the FDA or other applicable Governmental Authority), ordinances and other pronouncements having the binding effect of law of any Governmental Authority.

  
 1.29 “Litigation Condition” shall have the
meaning set forth in Section 11.3.2. 
  
 1.30
“Losses” means any and all damages (including all incidental, consequential, statutory and treble damages), awards, deficiencies, settlement amounts, defaults, assessments, fines, dues, penalties, costs, fees, liabilities,
obligations, taxes, liens, losses, lost profits and expenses (including without limitation court costs, interest and reasonable fees of attorneys, accountants and other experts) incurred by or awarded to Third Parties and required to be paid to
Third Parties with respect to a Claim by reason of any judgment, order, decree, stipulation or injunction, or any settlement entered into in accordance with the provisions of this Agreement, together with all documented out-of-pocket costs and
expenses incurred in complying with any judgments, orders, decrees, stipulations and injunctions that arise from or relate to a Claim of a Third Party. 
  
 1.31 “Manufacturing Activities” shall mean the manufacturing, processing, testing, packaging, storing and other activities undertaken or
required to be undertaken by Supplier or its suppliers in order to manufacture and supply Adolor with the API Compound. 
  
 1.32 “Manufacturing Line Losses” shall have the meaning set forth in Section 4.7.4. 
  
 1.33 “Marketing Authorization” means, with respect to a
country, the regulatory authorization required to market and sell Product in such country as granted by the relevant Governmental Authority. 
  
 1.34 “Master Batch Record” shall mean the current version of the master batch record approved by the Parties, which may be amended in
writing from time to time by mutual agreement of the Parties. 
  

 4 

 1.35 “Materials” means the raw materials, components and other ingredients required to
manufacture the API Compound, each as specifically identified in a Marketing Authorization. 
  
 1.36 “Materials Certification” shall have the meaning set forth in Section 3.4. 
  
 1.37 “Person” means any natural person, corporation, general partnership, limited partnership, joint venture, proprietorship or other
business organization. 
  
 1.38 “Potential
Contaminants” shall have the meaning set forth in Section 3.5.3. 
  
 1.39 “Product” means a prescription pharmaceutical product that contains Compound as the sole active ingredient. 
  
 1.40 “Purchase Order” shall have the meaning set forth in Section 5.2.1. 
  
 1.41 “Receiving Party” shall have the meaning set forth in
Section 1.14. 
  
 1.42 “Regulatory Standards”
means (i) any and all permits, licenses, filings and certifications required by the FDA or other Governmental Authorities, and compliance with cGMPs, applicable to the API Compound, any Manufacturing Activity or Facility, and (ii) any Laws
(including the Environmental Protection Agency (EPA), the Occupational Safety and Health Administration (OSHA), the Drug Enforcement Administration (DEA)), that apply to the API Compound, any Manufacturing Activity or Facility. 
  
 1.43 “Shipping Costs” shall have the meaning set forth in
Section 6.3. 
  
 1.44 “Specifications” means the
specifications for BX7, BX5, BX4 and Compound, as set forth on Schedule 1.44, as may be amended by the Parties from time to time. 
  
 1.45 “Taxes” shall have the meaning set forth in Section 8.6. 
  
 1.46 “Third Party Claim” shall have the meaning set forth in Section 11.3.1. 
  
 1.47 “Quality Agreement” shall have the meaning set forth in
Section 3.2. 
  
 1.48 “Third Party” means a
Person who is not a Party or an Affiliate of a Party. 
  
 1.49
“Waste” shall mean any “Hazardous Substance” as provided under the Canadian Environmental Protection Act and the Ontario Environmental Protection Act, and/or any other waste material, pollutant and/or contaminant of any
kind including any routine process waste or any by-product arising from manufacture of the API Compound. 
  
 1.50 “Withholding Party” shall have the meaning set forth in Section 8.6. 
  
 ARTICLE 2 
 SUPPLY BY SUPPLIER 
  
 2.1 Commitment to
Supply. Upon the terms and subject to the conditions of this Agreement and pursuant to Purchase Orders delivered from time to time by Adolor to Supplier in 
  

 5 

 accordance with Section 5.2, Supplier shall manufacture, test, package, store, label, release and deliver and supply to
Adolor or its designee the API Compound in accordance with the Specifications, cGMPs, the Master Batch Record and all applicable Laws and the provisions of the Quality Agreement. Supplier agrees that it shall not enter into any agreement with
another Person that shall preclude it from meeting its obligations under this Agreement. 
  
 2.2 Facilities, Equipment and Materials. Supplier agrees to provide, at its own cost and expense, all facilities, equipment, machinery, materials (other than as specifically set forth herein) in accordance with
the Specifications and the Master Batch Records and labor necessary for the performance of the Manufacturing Activities. 
  
 2.3 Responsibility. Unless otherwise specified herein or expressly consented to in writing by Adolor, as between the Parties, Supplier shall be
solely responsible for performance of all activities necessary for Adolor to be supplied with API Compound as contemplated hereunder. Supplier shall not amend or modify the Specifications or the Master Batch Record or any protocols, processes or
procedures used to perform the Manufacturing Activities without the express written approval from Adolor. Unless otherwise expressly consented to in writing in advance by Adolor, Supplier may not sublicense or subcontract the activities to be
performed by Supplier under this Agreement to an Affiliate, Third Party or other designee, except for the subcontractors of Supplier as listed on Schedule 2.3. 
  
 ARTICLE 3 
 STANDARD TERMS OF SUPPLY OF API COMPOUND 
  
 3.1
Regulatory Matters. 
  
 3.1.1 Consents. Supplier
shall obtain all Consents for which it is responsible that are required as of the Effective Date for the manufacture of the API Compound under the terms of this Agreement. At all times, Supplier shall maintain and comply with all the Consents which
may from time to time be required by any Governmental Authority having jurisdiction with respect to its manufacturing operations, the Manufacturing Activities and/or the Facility and otherwise to be obtained by Supplier to permit the performance of
its then current obligations under this Agreement. In the event any Consent held by Supplier relating to the Facility or its ability to manufacture the API Compound in accordance with this Agreement is hereafter suspended or revoked, or Supplier has
material restrictions imposed upon it by any Governmental Authority affecting the API Compound or the Facility, Supplier shall immediately notify Adolor and shall promptly provide a schedule of compliance and such other information related thereto
as is reasonably requested by Adolor. 
  
 3.1.2 Notification of
Adverse Manufacturing Activities. Supplier shall advise Adolor of any information arising out of the Manufacturing Activities that has adverse regulatory compliance and/or reporting consequences concerning the API Compound or the manufacturing
of the API Compound at the Facility. 
  
 3.1.3 Governmental
Authorities. Supplier shall provide to Adolor any information reasonably requested by Adolor, and shall consult with Adolor before providing any information to any Governmental Authority, in connection with manufacture of API Compound.

  

 6 

 Supplier shall immediately advise Adolor of any requests by any Governmental Authority for inspections of the Facility
that impact the manufacturing of the API Compound or with respect to the API Compound. 
  
 3.1.4 Inspection of API Compound Suppliers by Governmental Authorities. In the event Supplier is audited or inspected by a Governmental Authority relating to the Manufacturing Activities or the API Compound,
Supplier shall promptly (but in any event, within one business day) notify Adolor of such audit or inspection as well as of any alleged violations or deficiencies relating to the Facility, process, and/or API Compound, allow Adolor to be present
during such audit or inspection, and shall promptly disclose to Adolor all relevant portions of any notice of observations or potential violations, as well as a copy of Supplier’s response thereto. In addition, Supplier will provide Adolor with
unredacted copies of any FDA 483(s) and Establishment Inspection Reports (or their equivalents) issued as a result of said audit and any follow-up written communications between Supplier and the Governmental Authority. Supplier shall use its
commercially reasonable best efforts to correct all identified deficiencies in a timely manner and advise Adolor periodically of progress being made, as well as when all deficiencies have been corrected. 
  
 3.1.5 Generic Drug Enforcement Act. Supplier has not used and will not
use in the manufacture of API Compound in any capacity the services of any person, including any firm or individual, debarred or subject to debarment under the Generic Drug Enforcement Act of 1992, amending the Act at 21 U.S.C. 335a. Supplier agrees
to notify Adolor immediately in the event any person providing services to Supplier relating to this Agreement is debarred or becomes subject to debarment. 
  
 3.1.6 Adverse Reaction Reporting. To the extent permitted under applicable Laws, including the Health Insurance Portability and Accountability Act
of 1996 and the European Union Privacy Directive, each as amended, Supplier shall promptly notify Adolor of all information reported to Supplier, if any information is so reported, relating to any Adverse Drug Experience, whether expected or
unexpected, relating to the use of the API Compound. 
  
 3.2
Manufacturing Matters. 
  
 3.2.1 Quality Agreement.
Adolor and Supplier shall enter into the Quality Agreement (the “Quality Agreement”) appended to this Agreement as Schedule 3.2. To the extent there are any inconsistencies or conflicts between this Agreement and the Quality
Agreement, the terms and conditions of this Agreement shall control unless otherwise agreed to in writing by the Parties. In the event that the Quality Agreement contains material provisions that substantially differ from applicable comparable
Regulatory Standards, the Regulatory Standards shall control. 
  
 3.2.2 Master Batch Records. Within sixty (60) days after the approval by both Parties of the validation summary report, as evidenced by signature thereof, the Parties shall develop and agree upon the Master Batch Records. 

 
 3.2.3 Specification Changes. Adolor shall be entitled to request
changes to the Specifications from time to time. Supplier shall endeavor to make all revisions to the 
  

 7 

 Specifications requested by Adolor, in accordance with this Section 3.2.3 and all applicable Laws. Adolor retains the
right and responsibility for final written approval of the Specifications prior to implementation by Supplier. 
  
 (a) Required Specification Changes. For changes to the Specifications that are required by a Governmental Authority, the Marketing Authorization
or applicable Laws (collectively “Required Specification Changes”), Adolor and Supplier shall cooperate in making such changes and Supplier shall implement such changes in compliance with such applicable Laws and as promptly as
practicable. 
  
 (b) Discretionary Specification Changes.
For changes to the Specifications that are not Required Specification Changes (collectively “Discretionary Specification Changes”), Adolor shall submit a request to Supplier for any such Discretionary Specification Changes. Upon
receipt of such request from Adolor, Supplier shall determine (a) one-time and/or ongoing costs that would be incurred resulting from the Discretionary Specification Changes, (b) any resulting planned changes in timing for the delivery of the API
Compound and (c) the estimated time of implementing any such Discretionary Specification Changes (the “Cost and Time Statement”). Supplier shall provide the Cost and Time Statement to Adolor setting forth the terms on which Supplier
would be willing to make the Discretionary Specification Changes. Upon Adolor’s written approval of the Cost and Time Statement, the parties shall cooperate in making such Discretionary Specification Changes and Supplier shall implement such
Discretionary Specification Changes. 
  
 (c) Cost and Payment
for Changes to the Specifications. 
  
 (i) For all changes
to the Specifications pursuant to Sections 3.2.3(a) or 3.2.3(b), Adolor shall be responsible for and pay Supplier any and all amounts incurred in implementing a change to the Specifications. Supplier must provide such documentation of its costs and
expenses as may be reasonably requested by Adolor. Supplier agrees to use commercially reasonable efforts to minimize its costs associated with any Specification change. 
  
 (ii) For all changes to the Specifications that are necessitated because a change is required to the Facility generally or
a class of products (and not specific to the API Compound or intermediates, or their manufacture), Supplier shall be responsible for the costs and expenses of such changes. 
  
 3.2.4 Accident Reports. Supplier shall promptly notify Adolor of all material accidents related to the manufacture,
handling, use or storage of API Compound, including: (a) accidents resulting in significant personal injury requiring more than first aid treatment, (b) accidents resulting in chronic illness or loss of consciousness, (c) accidents resulting in
material property damage, (d) accidents resulting in material environmental release and (e) accidents that result in regulatory, safety, health or environmental audits. 
  
 3.2.5 Handling of Materials; Wastes. Supplier shall inform its employees, contractors and other personnel of any
known or reasonably ascertainable chemical hazards associated with the API Compound or any Wastes generated through performance of the 
  

 8 

 Manufacturing Activities, and to provide such persons with reasonable training in the proper methods of handling and
disposing of such items. In addition, Supplier shall handle, accumulate, label, package, ship and dispose of all Wastes generated through performance of the Manufacturing Activities in accordance with all applicable Laws. 
  
 3.2.6 Documentation for Governmental Authority Requirements. Supplier
shall maintain complete and accurate documentation of all validation data, stability testing data, batch records, quality control and laboratory testing and any other data required under cGMPs and other requirements of any relevant Governmental
Authority in connection with the performance of any Manufacturing Activities hereunder. Supplier shall provide Adolor with such documentation promptly upon Adolor’s request. 
  
 3.2.7 Technical Information. Supplier, at its sole cost and expense, shall, upon receiving a written request from
Adolor, supply technical information on the API Compound and methods of manufacture and testing to the extent that such information is necessary both to enable Adolor to fulfill its obligations within this Agreement or in its agreements with its
customers, including compliance with any statutory or regulatory requirements of, or a request by, any Governmental Authority. 
  
 3.3 Storage Obligations, Containers and Inventories. 
  
 3.3.1 Records, Retained Samples and Storage. Supplier shall retain samples and maintain records from each batch of API Compound for a period
required by applicable Laws for record keeping, testing and regulatory purposes or specified in the Quality Agreement. When storing Compound, nonconforming Compound or Wastes, Supplier shall comply with and maintain all storage facilities in
compliance with Specifications and in accordance with cGMPs and applicable Laws. 
  
 3.3.2 Containers and Packaging. Supplier shall supply the API Compound in such containers and packaging and with such container closure systems and labeling as set forth in the Specifications. 
  
 3.4 Materials Suppliers. Notwithstanding anything to the contrary
contained herein, (a) Supplier shall only obtain Materials from such suppliers named in the relevant Marketing Authorization, (b) Supplier will perform periodic audits of its Material suppliers and (c) Supplier shall prepare all certifications as to
any Materials required by cGMPs or Laws, (each, a “Materials Certification”). Such Materials Certifications shall include, without limitation, all required certifications related to Materials derived from animal products.

  
 3.5 Facility. 
  
 3.5.1 Sole Location. The Facility shall be the only location where
Supplier performs the Manufacturing Activities unless otherwise agreed to in writing by Adolor. 
  
 3.5.2 Maintenance of Facility. During the Term of this Agreement, Supplier shall maintain the Facility, all personal property, equipment,
machinery, API Compound, systems, intangibles, intellectual property and contract rights in use at the Facility during the Term in the ordinary course of business, in compliance with cGMPs and applicable Laws and 
  

 9 

 free of material defects, except for defects attributable to wear and tear consistent with the age and usage of such
assets, and except for such defects as do not and will not, in the aggregate, materially impair the ability to use such assets in connection with the manufacture, generation, processing, distribution, transport, treatment, storage, disposal or other
handling of the API Compound. 
  
 3.5.3 Certain
Prohibitions. Supplier shall not manufacture, store or process any API Compound in the same building in which Supplier manufactures, stores or processes genotoxics, penicillins, genetically modified organisms, cephalosporins, sex hormones,
anabolic steroids, and infectious agents (e.g., spore-bearing and live viruses), (collectively, “Potential Contaminants”) unless the Potential Contaminants are stored or manufactured in contained environments and in compliance with
cleaning, validation and changeover standards of all cGMPs and all applicable Laws. Supplier shall promptly notify Adolor if any of the Potential Contaminants are manufactured, processed or stored in any portion of the Facility which may result in
the introduction of Potential Contaminants into the areas of the Facility where Supplier manufactures, processes or stores the API Compound. Supplier shall notify Adolor by not later than the earlier to occur of (i) one hundred and eighty (180) days
prior to such event or (ii) Supplier’s knowledge of such event, if Supplier intend to change the nature or use of any portion of the Facility to include the use of any of the Potential Contaminants. Supplier shall not make such changes if the
change could reasonably be expected to result in a material adverse effect on the ability to fully perform the obligations under this Agreement and Supplier has not demonstrated to Adolor’s reasonable satisfaction that such Potential
Contaminants shall be completely segregated from the API Compound at all times and shall comply with all Regulatory Standards. 
  
 3.6 Monitoring and Recordkeeping; Operating Procedures. Throughout the term of this Agreement, and for so long thereafter as is required by
applicable Laws, Supplier shall monitor and maintain reasonable records respecting its compliance with cGMPs, including through the establishment and implementation of such operating procedures as are reasonably necessary to assure such compliance.
Supplier shall notify Adolor in writing of any significant trend changes in the statistical process control data and/or quality testing results for batches of API Compound manufactured hereunder. 
  
 3.7 Inspection, Access and Documentation. 
  
 3.7.1 Audit Rights. For the purpose of permitting a quality and
compliance audit, including to ascertain compliance with cGMPs, Specifications and applicable Laws and to audit due to an Adverse Drug Experience, emergency or inspection by a Governmental Authority, Supplier shall grant to authorized
representatives of Adolor and Glaxo Group Limited (“GSK”) (or a Third Party hired on behalf of GSK or Adolor who is reasonably acceptable to Supplier), upon reasonable notice and no more than once per calendar year, access to the
Facility. GSK and/or Adolor shall provide Supplier at least ten (10) Business Days notice in writing of the desire to have such access; provided, however, that in the event of an Adverse Drug Experience or any proposed or actual inspection by a
Governmental Authority or other emergency involving the Product, GSK and Adolor shall have the right at any time upon oral or written notice to Supplier of one (1) Business Day to conduct an audit of Supplier’s facility and more frequently than
once per calendar year. Supplier shall promptly respond to GSK’s or Adolor’s request and the Parties shall agree on the time, scope and manner of the audit. 
  

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 3.7.2 cGMP Documentation. Supplier shall maintain, in accordance with and for the period required
under cGMPs and applicable Laws, complete and adequate records pertaining to the methods and facilities used for the manufacture, processing, testing, packing, labeling, holding and distribution of the API Compound. 
  
 3.8 Compliance and Quality. 
  
 3.8.1 Compliance Standards. Supplier is solely responsible for the
safety and health of its employees, consultants and visitors and compliance with all Laws related to health, safety and the environment, including, without limitation, providing its employees, consultants and visitors with all required information
and training concerning any potential hazards involved in the manufacture, packaging, storage and supply of the API Compound and taking any precautionary measures to protect its employees from any such hazards. 
  
 3.8.2 Quality Assurance; Quality Control. Supplier shall implement and
perform the quality assurance testing (including retesting and any validation or stability tests that may be required) set forth on Schedule 1.44 against the Specifications and such other quality assurance and quality control procedures as
required by cGMPs and applicable Laws. 
  
 3.9 Provision of
Information. Supplier shall provide to Adolor copies (in electronic or hard-copy form, as requested by Adolor) of all data generated during the Term as may be reasonably requested from time to time by Adolor. 
  
 ARTICLE 4 
 SUPPLY OF BX7 
  
 4.1 Supply. The Parties may decide that in certain instances, Adolor will provide Supplier with BX7, at no cost to Supplier, in sufficient quantity to enable Supplier to perform the Manufacturing Activities and
supply API Compound to Adolor; provided, however, in the absence of such decision, Supplier shall be responsible for procuring or manufacturing BX7. Adolor represents that all BX7 supplied to Supplier shall meet the Specifications set forth for BX7
in Schedule 1.44. Sections 4.2 through 4.7 shall be applicable solely to quantities of BX7 supplier by Adolor to Supplier. 
  
 4.2 Consignment Stock. All BX7 supplied to Supplier by Adolor is supplied as consignment stock and shall be clearly identified as the property of
Adolor, shall be stored in compliance with cGMPs and maintained in the Facility, and shall at all times be owned by Adolor. 
  
 4.3 Use of the BX7. Supplier shall use the BX7 only to perform the Manufacturing Activities to produce and supply the API Compound to Adolor.

  
 4.4 Representations and Warranties of Supplier for BX7.
Adolor represents, warrants and covenants that the BX7 supplied by it or its designees to Supplier shall be manufactured, packed, labeled, stored and supplied in compliance with all applicable Laws and the relevant 
  

 11 

 Specifications. Supplier represents, warrants and covenants that BX7 will be held at the Facility only, unless otherwise
agreed to by Adolor in writing, and that such Facility, at Supplier’s sole cost and expense, has and will, for such time as such BX7 will be maintained meet the requirements established by applicable Governmental Authorities, and that the BX7
will always be maintained in accordance with cGMPs, the Quality Agreement (including storage conditions specified therein), the Specifications and all applicable Laws (including, without limitation, the receipt and possession of all applicable
permits and authorizations), as well as Adolor’s reasonable prior written instructions. 
  
 4.5 Inspection. At no additional cost to Adolor, Adolor shall be entitled to inspect the BX7 and its related records during normal business hours upon reasonable request and prior written notice and with the
least reasonably possible interference with Supplier’s ordinary course of business. 
  
 4.6 Risk of Loss. The risks of loss, damage or destruction of the BX7 delivered to Supplier shall be borne by Supplier from the date of delivery to the Facility. 
  
 4.7 Withdrawals of Stock. 
  
 4.7.1 Withdrawal. Supplier shall be entitled to withdraw BX7 for the
performance of the Manufacturing Activities according to the terms and conditions of this Agreement and respecting the procedure of first in/first out. 
  
 4.7.2 Statement of Use. Within fifteen (15) days after the end of each quarter during the Term, Supplier shall send Adolor a statement of usage and
inventory showing the following items: (a) the quantities of BX7 supplied by Adolor; (b) the quantities of BX7 in Supplier’s inventory at the beginning of the calendar quarter; (c) the quantities of BX7 withdrawn by Supplier; (d) the quantities
of BX7 used by Supplier in performing the Manufacturing Activities; (e) any quantities of BX7 lost or destroyed while held as consignment stock or following withdrawal from consignment stock; (f) any quantities of BX7 for which Supplier is unable to
account; and (g) the quantities of BX7 in Supplier’s inventory at the end of the calendar quarter. If, based upon its inspections of the BX7 pursuant to Section 4.5, Adolor disputes any of the items on the statement of usage and inventory, the
Parties will promptly meet to attempt to resolve such disagreement. 
  
 4.7.3 Responsibility for BX7 Lost or Destroyed or Used Beyond Allowable Manufacturing Line Losses. In addition to any other remedies available to Adolor at law or in equity, Supplier shall be entirely responsible for BX7 lost or
destroyed for reasons other than nonconformance of BX7 with the Specifications, and for BX7 used in excess of allowable Manufacturing Line Losses (as defined below), and shall compensate Adolor for any such quantities at a rate of $30,000 per
kilogram or the actual cost to replace the BX7, if less multiplied by the allowable Manufacturing Line Losses. If any amounts are owed to Adolor by Supplier pursuant to this Section 4.7.3, such amounts shall be payable within thirty (30) days
following the date of issuance of the statement of usage and inventory pursuant to Section 4.7.2. 
  
 4.7.4 Allowable Manufacturing Line Losses. Supplier agrees in performing the Manufacturing Activities to limit its yield losses to those specified
in Schedule 4.7.4 (the 
  

 12 

 “Manufacturing Line Losses”). Within forty-five (45) days after the end of each Calendar Year, Supplier
shall calculate the actual line losses. To the extent such actual line losses exceed the allowable Manufacturing Line Losses, Supplier shall compensate Adolor for the quantities of BX7 supplied or otherwise purchased by Adolor and used by Supplier
in excess of the allowable Manufacturing Line Losses in accordance with Schedule 4.7.4. 
  
 4.7.5 Late Delivery of BX7. If the Parties decide that Adolor should supply BX7 to Supplier hereunder, Adolor acknowledges that Supplier shall have no liability whatsoever towards Adolor in case of late
delivery of the API Compound due to late delivery of the BX7 by Adolor; provided, however, if Supplier has inventories of BX7 that is has manufactured itself, Supplier shall use such inventory to manufacture API Compound and this Section 4.7.5 shall
not be deemed a reason for late delivery of API Compound. 
  
 ARTICLE 5 
 FORECASTING AND ORDERING 
  
 5.1 Forecast. 
  
 5.1.1 Adolor Providing BX7. If Adolor provides Supplier with BX7 pursuant to Section 4.1, at the beginning of each Calendar Quarter during the term
of this Agreement, Adolor shall provide Supplier with a rolling six (6) Calendar Quarter non-binding, good faith estimate of the quantities of API Compound that Adolor foresees it will order from Supplier during each Calendar Quarter of such six (6)
Calendar Quarter period. 
  
 5.1.2 Supplier Manufacturing
BX7. If Adolor does not provide Supplier with BX7 and Supplier itself procures or manufactures BX7, then, during the term of this Agreement, at the beginning of each Calendar Quarter, Adolor shall provide Supplier with a rolling three (3) year
non-binding, good faith estimate of the quantities of API Compound that Adolor foresees it will order from Supplier during each Calendar Quarter of such three (3) year period. 
  
 5.1.3 Forecasts. Each forecast pursuant to Section 5.1.1 or 5.1.2 shall be referred to as a
“Forecast”. The first such Forecast shall be for the period from the Effective Date through the first Calendar Quarter of Calendar Year 2007 is attached hereto as Schedule 5.1. 
  
 5.2 Purchase Orders. 
  
 5.2.1 Delivery of Purchase Order. 
  
 (a) If Adolor provides Supplier with BX7 pursuant to Section 4.1, Adolor
may, from time to time, place purchase orders with Supplier for quantities of API Compound to be delivered hereunder at least six (6) months prior to the delivery date specified in each respective purchase order. 
  
 (b) If Adolor does not provide Supplier with BX7 and Supplier itself
manufactures or procures BX7, then Adolor may, from time to time, place purchase orders with Supplier for quantities of API Compound to be delivered hereunder at least twelve (12) months prior to the delivery date specified in each respective
purchase order. 
  

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 (c) Each purchase order pursuant to Section 5.2.1(a) or 5.2.1(b) shall be referred to as a
“Purchase Order”. Supplier shall deliver API Compound against each Purchase Order in accordance with Article 5. Adolor shall purchase all such API Compound ordered and delivered by the delivery date specified in a Purchase Order,
provided that such API Compound meets the Specifications. Supplier shall use commercially reasonable efforts to supply any quantity of API Compound ordered in the aggregate that exceeds the quantity in the Forecast. All Purchase Orders shall be for
full batch quantities of API Compound or multiples thereof. 
  
 (d) Adolor shall use commercially reasonable efforts to place a Purchase Order for at least one (1) batch of API Compound each Calendar Year in which Product is being commercialized. 
  
 5.2.2 Acceptance of Purchase Order. Supplier shall acknowledge and
provide Adolor with a written acceptance of each Purchase Order within two (2) Business Days following Supplier’s receipt thereof. Supplier shall be entitled to reject only that portion of any Purchase Order which Supplier will be unable to
fill due to: (i) the occurrence of a Force Majeure Event; (ii) which, when added to other Purchase Orders placed during a given twelve (12)-month period, exceed then current Forecast covering such period by more than twenty percent (20%); or (iii)
which, when added to other Purchase Orders during a Calendar Year, exceed fifty (50) kilograms of API Compound. 
  
 5.2.3 Accommodations. From time to time, due to significant unforeseen circumstances, Adolor may request, in writing, that Supplier deliver API
Compound volumes in excess of those specified in the Purchase Order. Supplier shall use commercially reasonable efforts to provide Adolor with such excess API Compound volumes. 
  
 5.2.4 Terms of Purchase Orders. Other than terms respecting quantity, delivery date(s), shipment method and
destination(s), the terms and conditions of any Purchase Order submitted by Adolor, or written acceptance thereof by Supplier, shall be of no force and effect, whether or not objected to by Supplier, and nothing in any such Purchase Order or written
acceptance shall supersede the terms and conditions of this Agreement or the Quality Agreement. 
  
 5.3 Addressees for Correspondence. All Forecasts, Purchase Orders, written acceptances of Purchase Orders and other notices contemplated under this
Article 5 shall be sent to the attention of such persons as each Party may identify to the other in writing from time to time. 
  
 ARTICLE 6 
 SHIPPING AND DELIVERY;
STORAGE 
  
 6.1 Shipping and Delivery Dates. On each
Purchase Order submitted by Adolor, Adolor shall specify the requested quantity, delivery date(s), shipment method and destination(s) of API Compound being ordered. Supplier shall arrange for the delivery of API Compound to Adolor’s (or its
designee’s) designated facilities as stated on the Purchase Order and in a manner consistent with good commercial practices, and in accordance with any agreed-upon shipping specifications, this Agreement and Adolor’s or its designee’s
reasonable instructions. Supplier shall not ship any API Compound until Supplier receives a written release from Adolor in the form of a Certificate of Compliance. 
  

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 6.2 Terms of Delivery. Once Adolor has released the API Compound in accordance with Section 6.4,
Supplier shall ship API Compound in accordance with Adolor’s instructions by a carrier selected by Adolor FCA (Incoterms 2000) Supplier’s Facility. If Adolor does not timely indicate in writing its selection of a carrier to Supplier,
Supplier shall be entitled to select an appropriate carrier in Adolor’s name and at Adolor’s risk. Supplier shall abide by the export procedures set forth in the Quality Agreement. 
  
 6.3 Shipping Costs. Adolor shall pay all costs, expenses, taxes,
levies, tariffs, brokerage fees, insurance premiums and other costs and charges assessed or levied in connection with the transportation of API Compound from Supplier’s Facility to Adolor pursuant to Section 6.1 (the “Shipping
Costs”). If Supplier pays any of the Shipping Costs on behalf of Adolor, then Supplier shall invoice such Shipping Costs to Adolor and Adolor shall pay such costs. 
  
 6.4 Documentation and Release. Prior to each shipment of API Compound, Supplier shall provide Adolor with a
Certificate of Analysis and a Certificate of Compliance, and, at Adolor’s request, Supplier shall provide Adolor with reasonable access to any applicable supporting data. Prior to release of the API Compound, Supplier shall test the API
Compound in accordance with the testing procedures described in Schedule 1.44 and against the Specifications, and shall provide Adolor with a copy of the applicable Executed Batch Record for each batch shipped and a copy of the applicable
deviation or other investigatory report, if any. Adolor shall review the Certificate of Analysis and the Certificate of Compliance, and indicate to Supplier, within fifteen (15) days after receipt of such certificates, whether to release each batch
of API Compound for shipment. If Adolor does not provide notice to Supplier within such fifteen (15) day period, Supplier shall be entitled to ship the API Compound to the designation indicated pursuant to Section 6.1. With each shipment of API
Compound, Supplier shall provide Adolor with commercially appropriate shipping documentation, including bills of lading, 
  
 6.5 Retention of Samples. Supplier shall properly store and retain appropriate samples (identified by batch number) of API Compound that it
supplies to Adolor in conditions and for times consistent with all applicable Regulatory Standards and to permit appropriate or required internal and regulatory checks and references (collectively, the “File Retention Samples”).
Supplier shall provide Adolor with reasonable access to and portions of the File Retention Samples for testing and other purposes upon Adolor’s request. 
  
 6.6 Storage of API Compound. Notwithstanding anything to the contrary contained herein, Adolor may request that Supplier, rather than ship API
Compound upon completion to a designated location, store the API Compound at the Facility until such time as Adolor requests that the API Compound be shipped to a designated location. In the event that Adolor requests that the API Compound be stored
at the Facility, the provisions of Sections 4.3, 4.4, 4.5 and 4.6 shall be applicable to any such API Compound. 
  

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 ARTICLE 7 
 INSPECTION AND DEFECTIVE API COMPOUND; RECALL 
  
 7.1 Inspection by Adolor. 
  
 7.1.1 Inspection of API Compound. Within thirty (30) days following its receipt of a shipment of API Compound, Adolor or its designee may perform or have performed the quality control procedures described in Schedule 1.44 to
determine if such API Compound conforms to the Specifications. Adolor shall promptly notify Supplier of any damages, shortage and other defects discovered by Adolor following Adolor’s discovery thereof. 
  
 7.1.2 Acceptance of API Compound. If notice is not given by Adolor or
its designee pursuant to Section 7.1.1 within the time period set forth therein, then the shipment shall be deemed accepted by Adolor for purposes of this Article 7 and, except as provided in Section 7.2, may not be rejected pursuant to Section 7.3
or Section 7.4. 
  
 7.2 Latent Defects. In the case of API
Compound with defects not readily discoverable prior to the shipment of any API Compound to Adolor, or thereafter within the time period specified in Section 7.1, each Party shall notify the other Party of any such defects discovered by such Party
promptly following such Party’s discovery thereof. Notwithstanding anything to the contrary contained herein, in the case of latent defects that are not readily ascertainable by inspection or analysis, Adolor shall have ten (10) days from the
earlier of: (a) date of discovery of such latent defect or (b) twenty-four months after receipt of the API Compound by Adolor or its designee to notify Supplier of such latent defect. 
  
 7.3 Defective API Compound. 
  

7.3.1 Rejection by Adolor. In any case where Adolor or its designee expects to reject or otherwise make a claim against Supplier with respect to
damaged, non-conforming or otherwise defective API Compound, Supplier shall be offered a reasonable opportunity to offer proof or evidence as to why such API Compound should not be rejected and to inspect and/or test such API Compound. 

 
 7.3.2 Testing of File Retention Samples. In the event of any
dispute as to whether API Compound may be rightfully rejected by Adolor or its designee for failure to conform to the Specifications or have been manufactured in accordance with cGMPs, such API Compound shall be tested, using the File Retention
Samples, for conformance with the applicable Specifications and cGMPs and acceptance criteria by an independent testing organization mutually acceptable to both Parties, which analysis shall be binding on Supplier and Adolor solely for the purpose
of determining whether such API Compound may be rightfully rejected as non-conforming, damaged or otherwise defective. The fees and expenses charged by such independent testing organization shall be paid by the Party in error. 
  
 7.3.3 Disposal of Rejected API Compound. All or part of any shipment
of API Compound determined to have been rightfully rejected by Adolor or its designee shall be held by Adolor or its designee for a period of thirty (30) days following notice to Supplier for proper disposal by Supplier, at Supplier’s expense.
If Supplier does not provide instructions for disposal of the API Compound within such period, then Adolor or its designee may dispose of 
  

 16 

 such API Compound and Supplier shall either pay or reimburse Adolor or its designee for all costs and expenses incurred
by Adolor or its designee in connection with the disposal of such API Compound. All or part of any batch of API Compound determined to have been rightfully rejected by Adolor prior to its release for shipment shall be properly disposed of by
Supplier, at Supplier’s expense. 
  
 7.4 Remedies. In
the event Adolor or its designee receives API Compound from Supplier that is non-conforming or otherwise defective, Adolor may, in addition to any other rights or remedies it may have under Sections 7.5.2 and 11.1 elect for Supplier to replace such
non-conforming or otherwise defective API Compound with an equal quantity of API Compound that conforms to the Specifications and is not otherwise defective or refund the purchase price for the quantity of such defective API Compound. If Adolor
requests Supplier to replace such non-conforming or otherwise defective API Compound as set forth above, Supplier shall replace such API Compound as soon as is reasonably possible at no additional cost to Adolor, but in no event later than the time
periods set forth in Section 5.2.1 after receipt of notification of nonconformity. 
  
 7.5 API Compound Recall. 
  
 7.5.1 Recall. Adolor, in its sole responsibility and discretion, shall be entitled to make all decisions with respect to any recall, market withdrawals or other corrective action related to the API Compound. 
  
 7.5.2 Costs Associated with API Compound Recall. The out-of-pocket
costs associated with any such recall, including the cost of any BX7 supplied by Adolor, shall be borne by the Parties in proportion to which any such recall is required as a result of Supplier’s (or its suppliers’, permitted
subcontractors’ or Affiliates’) or Adolor’s (or its designees’, subcontractors’ or Affiliates’) breach of their respective obligations or representations or warranties under this Agreement, including the Quality
Agreement. If neither Party is in breach, Adolor shall be responsible for such costs. 
  
 7.6 Shortages. In the event that Supplier is aware or anticipates that it will be unable to meet any Purchase Order, either in whole or in part, for whatever reason, Supplier shall promptly inform Adolor in
writing of such inability. In particular, Supplier shall promptly inform Adolor of any notice, written or oral, received from any materials supplier regarding a possible shortage or inability to supply. 
  
 7.7 Reservation of Rights. Nothing contained in this Article 7 shall
limit any legal, equitable or other rights or remedies that may be available to Adolor on account of any failure of Supplier to supply API Compound hereunder. 
  

ARTICLE 8 
 FINANCIAL PROVISIONS

  
 8.1 Supply Price. During the first full Calendar
Year of this Agreement, Supplier shall supply API Compound to Adolor at the price per unit set forth on Schedule 8.1. 
  

 17 

 8.2 Price Increases and Decreases. After the first full Calendar Year (i.e., after December 31,
2005), the price payable for API Compound shall be adjusted annually by agreement of the Parties, based on changes to Supplier’s costs of manufacture (as set forth in this Section), such costs to be documented in writing and available for
Adolor’s viewing on reasonable request. Changes in Supplier’s costs of manufacture shall be calculated based on labor costs (as indicated by the net change in the Canadian Consumer Price Index over the previous Calendar Year), costs of raw
materials (as indicated by actual invoices from Supplier’s approved raw material suppliers), and the exchange rate increase or decrease between the U.S. dollar and the Canadian dollar over the previous Calendar Year). If, after good faith
negotiations, no agreement can be reached on supply prices for the subsequent Calendar Year, either Party may terminate this Agreement by giving not less than six (6) months’ notice. 
  
 8.3 Process Improvements and Sharing of Cost Efficiencies. The Parties agree to make reasonable efforts to provide
suggestions to the other Party to improve the productivity, efficiency, and quality of the process under which API Compound is manufactured, taking into account the total manufacturing environment including technology, industry standards,
Specifications, raw materials, communication, service, purity, and over-all manufacturing costs as such improvements become known to such Party. Any cost savings as a result of such suggestions and/or market conditions will be shared equitably.

  
 8.4 Manner of Payments. All sums due to either Party
under this Agreement shall be payable in United States Dollars by bank wire transfer in immediately available funds to such bank account(s) as each of Supplier and Adolor shall from time to time designate, unless otherwise agreed by the Parties in
writing. 
  
 8.5 Invoices; Timing of Payments. Supplier
shall invoice Adolor for all API Compound supplied hereunder on the date of shipment, and for all other amounts due to Supplier, if any, hereunder monthly in arrears. Each invoice shall specify the Purchase Order number to which it corresponds.
Unless otherwise specified in this Agreement, all amounts due to Supplier hereunder shall be paid by Adolor within thirty (30) days following the date Adolor or its designee receives delivery of the API Compound under Section 6.2. 
  
 8.6 Tax Withholding. Any taxes, levies or other duties
(“Taxes”) paid or required to be withheld under the appropriate tax Laws by one Party (“Withholding Party”) on account of monies payable to the other Party under this Agreement shall be deducted from the amount of
monies otherwise payable to the other Party under this Agreement. The Withholding Party shall secure and send to the other Party within a reasonable period of time proof of any such Taxes paid or required to be withheld by the Withholding Party for
the benefit of the other Party. The Parties shall cooperate reasonably with each other to ensure that any amounts required to be withheld by either Party are reduced in amount to the fullest extent permitted by applicable Laws. No deduction shall be
made, or a reduced amount shall be deducted, if the other Party furnishes a document from the appropriate tax Governmental Authorities to the Withholding Party certifying that the payments are exempt from Taxes or subject to reduced tax rates,
according to the applicable convention for the avoidance of double taxation. 
  

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 ARTICLE 9 
 CONFIDENTIALITY 
  
 9.1
Confidential Information. Each of Supplier and Adolor shall keep all Confidential Information received from the other Party with the same degree of care it maintains the confidentiality of its own Confidential Information, but in no event
less than a reasonable degree of care. Neither Party shall use such Confidential Information for any purpose other than in performance of this Agreement or disclose the same to any other Person other than to such of its agents who have a need to
know such Confidential Information to implement the terms of this Agreement or enforce its rights under this Agreement. A Receiving Party shall advise any agent who receives such Confidential Information of the confidential nature thereof and of the
obligations contained in this Agreement relating thereto, and the Receiving Party shall ensure that all such agents comply with such obligations as if they had been a party hereto. Upon termination of this Agreement, the Receiving Party shall return
or destroy all documents, tapes or other media containing Confidential Information of the Disclosing Party that remain in the Receiving Party’s or its agents’ possession, except that the Receiving Party may keep one copy of the
Confidential Information in the legal department files of the Receiving Party, solely for archival purposes. Such archival copy shall be deemed to be the property of the Disclosing Party, and shall continue to be subject to the provisions of this
Article 9. Notwithstanding anything to the contrary in this Agreement, the Receiving Party shall have the right to disclose any Confidential Information provided hereunder if, in the reasonable opinion of the Receiving Party’s legal counsel,
such disclosure is necessary to comply with the terms of this Agreement or the requirements of any Law. Where possible, the Receiving Party shall notify the Disclosing Party of the Receiving Party’s intent to make such disclosure of
Confidential Information pursuant to the provision of the preceding sentence sufficiently prior to making such disclosure so as to allow the Disclosing Party adequate time to take whatever action the Disclosing Party may deem to be appropriate to
protect the confidentiality of the information. 
  
 9.2 Public
Announcements. Except as may be required by applicable Laws, neither Party will make any public announcement of any information regarding this Agreement or any agreement related hereto without the prior written approval of the other Party. Once
any written statement is approved for disclosure by the Parties or information is otherwise made public in accordance with the preceding sentence, either Party may make a subsequent public disclosure of the contents of such statement without further
approval of the other Party. 
  
 9.3 Assignment of
Inventions. All data, discoveries, inventions, improvements, new uses, processes, copyrights, trade secrets, techniques, and compounds, whether patentable or not, arising from work performed under this Agreement, or the API Compound
(collectively, the “Inventions”), shall be the sole and exclusive property of Adolor with full right, title, and interest thereto. Throughout the term of this Agreement, Provider shall use the Inventions for the sole purpose of
performing the Manufacturing Activities under this Agreement. Upon expiration or termination of this Agreement, Supplier shall have no right or interest in or to the Inventions. Adolor may, at its sole option, incorporate any Inventions in any
regulatory filings or patent applications based upon the inclusion of such findings therein. Supplier shall promptly disclose to Adolor any and all Inventions. Supplier hereby agrees to unconditionally assign, and hereby does assign, to Adolor any
and all right, title and interest in and to any Inventions. Supplier, its employees, agents, and consultants shall fully cooperate with Adolor in obtaining and maintaining, at Adolor’s sole cost and expense, any applicable protection, including
patent protection, as may be available with respect to such Inventions, and shall execute all documents deemed necessary by Adolor for purposes of procuring and maintaining such protection, and all documents necessary for assigning Inventions to
Adolor. 
  

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 9.4 Confidentiality of this Agreement. The terms of this Agreement shall be Confidential
Information of each Party and, as such, shall be subject to the provisions of this Article 9. 
  
 9.5 Survival. The obligations and prohibitions contained in this Article 9 shall survive the expiration or termination of this Agreement. 
  
 ARTICLE 10 
 REPRESENTATIONS AND WARRANTIES 
  
 10.1
Representations of Supplier. Supplier represents and warrants to Adolor that: 
  
 10.1.1 All AP I Compound shall be packaged in accordance with Adolor’s labeling instructions, shall be free from defects in materials and workmanship and shall not be adulterated or misbranded within the meaning
of the Act, and is not an article which may not, under the Act, be introduced into interstate commerce; 
  
 10.1.2 All AP I Compound shall be manufactured, generated, processed, transported, treated, stored, disposed and handled in accordance with and conform to
the Specifications, cGMPs, the Master Batch Record, all applicable Laws, the Quality Agreement and any further formulating, manufacturing, packaging or other standards agreed in writing by the Parties and in accordance with and conform to any
applicable standards specified by the United States Pharmacopeia and Pharmacopeial Forum and the European Pharmacopeia and Pharmacopeial Forum; 
  
 10.1.3 All AP I Compound so sold and shipped shall be manufactured in accordance with all applicable Laws in effect at the time and place of manufacture
of such API Compound, and all waste, including but not limited to all hazardous waste, generated at the time of manufacture of API Compound shall be disposed of in accordance with all applicable Laws; 
  
 10.1.4 All records as are necessary and appropriate to demonstrate compliance
with applicable Laws shall be maintained by Supplier and such manufacture of API Compound shall be performed in a facility maintaining a current drug establishment registration with the FDA as set forth in 21 C.F.R. § 207; 
  
 10.1.5 Supplier has provided and shall provide to Adolor all pertinent
information in its possession relative to physical, environmental and human health hazards involving the API Compound; 
  
 10.1.6 The ownership and operation of the Facilities shall be in material compliance with cGMPs and all applicable Laws (including the receipt and
possession of all applicable permits and authorizations, including a current drug establishment registration with the FDA as set forth in 21 C.F.R. 207, if applicable), and any further formulating, manufacturing, packaging or other standards agreed
in writing by the Parties, and all Waste generated in connection with the manufacture of the API Compound shall be disposed of in accordance with all applicable Laws; 
  

 20 

 10.1.7 Supplier owns or controls all the intellectual property necessary to manufacture the API Compound
in accordance with the terms of this Agreement, and, to the best of its knowledge, the use of such intellectual property does not infringe the rights of any Third Party; and 
  
 10.1.8 The API Compound delivered to Adolor will be free and clear of all liens and encumbrances. 
  
 10.2 Mutual Representations and Warranties. Adolor and Supplier each
represents and warrants to the other as of the Effective Date that: 
  
 10.2.1 Organization and Authority. It has full corporate right, power and authority to enter into this Agreement and to perform its respective obligations under this Agreement; 
  
 10.2.2 No Conflicts or Violations. The execution and delivery of this
Agreement by such Party and the performance of such Party’s obligations hereunder (a) do not conflict with or violate any requirement of applicable laws or regulations existing as of the Effective Date and applicable to such Party and (b) do
not conflict with, violate, breach or constitute a default under, and are not prohibited or materially restricted by, any contractual obligations of such Party or any of its Affiliates existing as of the Effective Date; and 
  
 10.2.3 Valid Execution. Such Party is duly authorized, by all
requisite corporate action, to execute and deliver this Agreement and the execution, delivery and performance of this Agreement by such Party does not require any shareholder action or approval or the approval or consent of any Third Party, and the
Person executing this Agreement on behalf of such Party is duly authorized to do so by all requisite corporate action. 
  
 10.3 Disclaimer of Warranty. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, EACH PARTY EXPRESSLY DISCLAIMS, WAIVES, RELEASES, AND
RENOUNCES ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 
  
 ARTICLE 11 
 INDEMNIFICATION AND
INSURANCE 
  
 11.1 Indemnification by Supplier.
Supplier hereby agrees to defend Adolor and GSK and their respective Affiliates, directors, officers, employees, agents, successors and assigns from and against any and all Claims of a Third Party and to indemnify and hold Adolor and GSK and their
respective Affiliates, directors, officers, employees, agents, successors and assigns, harmless from and against any and all Losses in each case of a Third Party for: (a) bodily injury, personal injury, death and property damage caused by (i)
defects in the API Compound (including any materials or samples thereof) at the time of dispatch by Supplier or Supplier’s permitted designee or (ii) defective API Compound information (including any materials or samples thereof) submitted by
Supplier to Adolor; (b) the negligence or willful misconduct or 
  

 21 

 wrongdoing of Supplier or any Person for whose actions or omissions Supplier is legally liable; or (c) a breach by
Supplier of its representations, warranties and/or covenants hereunder; provided, however, that in all cases referred to in this Section 11.1, Supplier shall have no liability to Adolor for any Losses of Adolor or GSK to the extent that such Losses
of Adolor or GSK were caused by any item for which Adolor is required to indemnify Supplier pursuant to Section 11.2. [**] 
  
 11.2 Indemnification by Adolor. Adolor hereby agrees to defend Supplier and its Affiliates and their respective directors, officers, employees,
agents, successors and assigns from and against any and all Claims of a Third Party and to indemnify and hold Supplier and its Affiliates and their respective directors, officers, employees, agents, successors and assigns, harmless from and against
any and all Losses in each case of a Third Party for: (a) bodily injury, personal injury, death and property damage caused by (i) defective API Compound information (including any materials or samples thereof) submitted by Adolor to Supplier, or
(ii) use of the Product; (b) the negligence or willful misconduct or wrongdoing of Adolor or any Person for whose actions or omissions Adolor is legally liable; (c) a breach by Adolor of its representations, warranties and/or covenants hereunder; or
(d) infringement of any Third Party intellectual property rights by the use by Supplier of any intellectual property provided by Adolor; provided, however, that in all cases referred to in this Section 11.2, Adolor shall have no liability to
Supplier for any Losses of Supplier to the extent that such Losses of Supplier were caused by any item for which Supplier is required to indemnify Adolor pursuant to Section 11.1. 
  
 11.3 Indemnification Procedure. 
  
 11.3.1 Notice. Each Party will notify promptly the other if it becomes aware of a Claim (actual or potential) by any
Third Party (a “Third Party Claim”) for which indemnification may be sought by that Party and will give such information with respect thereto as the other Party shall reasonably request. If any proceeding (including any governmental
investigation) is instituted involving any Party for which such Party may seek an indemnity under Section 11.1 or 11.2, as the case may be (the “Indemnified Party”), the Indemnified Party shall not make any admission or statement
concerning such Third Party Claim, but shall promptly notify the other Party (the “Indemnifying Party”) orally and in writing and the Indemnifying Party and Indemnified Party shall meet to discuss how to respond to any Third Party
Claims that are the subject matter of such proceeding. The Indemnifying Party shall not be obligated to indemnify the Indemnified Party to the extent any admission or statement made by the Indemnified Party or any failure by such Party to notify the
Indemnifying Party of the claim materially prejudices the defense of such claim. 
  
 11.3.2 Defense of Claim. If the Indemnifying Party elects to defend or, if local procedural rules or laws do not permit the same, elects to control the defense of a Third Party Claim, it shall be entitled to do
so provided it gives notice to the Indemnified Party of its intention to do so within forty-five (45) days after the receipt of the written notice from the 
  

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

  

 22 

 Indemnified Party of the potentially indemnifiable Third Party Claim (the “Litigation Condition”);
provided, that the Indemnifying Party expressly agrees the Indemnifying Party shall be responsible for satisfying and discharging any award made to the Third Party as a result of such proceedings or settlement amount agreed with the Third Party in
respect of the Third Party Claim without prejudice to any provision in this Agreement or right at law which will allow the Indemnifying Party subsequently to recover any amount from the Indemnified Party to the extent the liability under such
settlement or award was attributable to the Indemnified Party. Subject to compliance with the Litigation Condition, the Indemnifying Party shall retain counsel reasonably acceptable to the Indemnified Party (such acceptance not to be unreasonably
withheld, refused, conditioned or delayed) to represent the Indemnified Party and shall pay the fees and expenses of such counsel related to such proceeding. In any such proceeding, the Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of the Indemnified Party. The Indemnified Party shall not settle any claim for which it is seeking indemnification without the prior consent of the Indemnifying Party which
consent shall not be unreasonably withheld, refused, conditioned or delayed. The Indemnified Party shall, if requested by the Indemnifying Party, cooperate in all reasonable respects in the defense of such claim that is being managed and/or
controlled by the Indemnifying Party. The Indemnifying Party shall not, without the written consent of the Indemnified Party (which consent shall not be unreasonably withheld, refused, conditioned or delayed), effect any settlement of any pending or
threatened proceeding in which the Indemnified Party is, or based on the same set of facts could have been, a party and indemnity could have been sought hereunder by the Indemnified Party, unless such settlement includes an unconditional release of
the Indemnified Party from all liability on claims that are the subject matter of such proceeding. If the Litigation Condition is not met, then neither Party shall have the right to control the defense of such Third Party Claim and the Parties shall
cooperate in and be consulted on the material aspects of such defense at the each Party’s own expense; provided that if the Indemnifying Party does not satisfy the Litigation Condition, the Indemnifying Party may at any subsequent time during
the pendency of the relevant Third Party Claim irrevocably elect, if permitted by local procedural rules or laws, to defend and/or to control the defense of the relevant Third Party Claim so long as the Indemnifying Party also agrees to pay the
reasonable fees and costs incurred by the Indemnified Party in relation to the defense of such Third Party Claim from the inception of the Third Party Claim until the date the Indemnifying Party assumes the defense or control thereof. 
  
 11.4 Assumption of Defense. Notwithstanding anything to the contrary
contained herein, an Indemnified Party shall be entitled to assume the defense of any Third Party Claim with respect to the Indemnified Party, upon written notice to the Indemnifying Party pursuant to this Section 11.4, in which case the
Indemnifying Party shall be relieved of liability under Section 11.1 or 11.2, as applicable, solely for such Third Party Claim and related Losses. 
  
 11.5 Insurance. During the term of this Agreement and for a period of five (5) years after its termination, each party shall obtain and/or
maintain, respectively, at its sole cost and expense, liability insurance in amounts, respectively, as are the greater of: (i) required by applicable Laws and (ii) reasonable and customary in the U.S. pharmaceutical industry for companies of
comparable size and activities at the respective place of business of each Party, but in no event less than $10,000,000. Such liability insurance shall insure against all liability, including personal injury, physical injury, or property damage
arising out of the manufacture, sale, distribution, or marketing of the API Compound. Each Party shall provide written proof of the existence of such insurance to the other Party upon request. 
  

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 ARTICLE 12 
 TERM AND TERMINATION 
  
 12.1 Term. Unless terminated sooner as permitted hereunder, this Agreement shall commence on the Effective Date and shall expire on the seventh (7th) anniversary thereof, provided that unless either Party gives written notice at
least twenty-four (24) months prior to the expiration of the initial term or any renewal term, this Agreement shall continue for successive two year terms. 
  
 12.2 Termination. This Agreement may be terminated by Adolor upon six (6) months prior written notice to Supplier. In addition, this Agreement may
be terminated upon the written consent of both Parties, or by either Party upon the happening of one of the following events: 
  
 12.2.1 Termination for Breach. Either Party may, without prejudice to any other remedies available to it at law or in equity, terminate this
Agreement in the event that the other Party (as used in this subsection, the “Breaching Party”) shall have materially breached or defaulted in the performance of any of its obligations. The Breaching Party shall have thirty (30)
days after written notice thereof was provided to the Breaching Party by the non-breaching Party to remedy such default. Any such termination shall become effective at the end of such 30-day period unless the Breaching Party has cured any such
breach or default prior to the expiration of such 30-day period. 
  
 12.2.2 Termination for Force Majeure Event. Notwithstanding anything to the contrary contained in this Agreement, in the event a Force Majeure Event shall have occurred and be continuing for ninety (90) consecutive days, the Party
not suffering such Force Majeure Event shall be entitled to terminate this Agreement effective immediately upon written notice to the Party suffering such Force Majeure Event. 
  
 12.2.3 Termination for Reasons of Insolvency or Termination of Business Activities. Either Party shall be entitled to
terminate this Agreement if the other Party becomes insolvent or is the subject of a petition in bankruptcy whether voluntary or involuntary or of any other proceeding under bankruptcy, insolvency or similar laws, makes an assignment for the benefit
of creditors, is named in such a petition, or its property is subject to a suit for the appointment of a receiver, or is dissolved or liquidated. Such termination right may be exercised without the need for written notice within thirty (30) days
following the date as of which the Party entitled to terminate receives knowledge of such insolvency or termination of business activities by the other Party. 
  

ARTICLE 13 
 RIGHTS AND DUTIES UPON
TERMINATION 
  
 13.1 Pending Purchase Orders. Except in
cases of the termination of this Agreement for a Force Majeure Event or as otherwise expressly set forth in this Agreement, the termination of this Agreement shall not affect Purchase Orders placed by Adolor and accepted by Supplier at the time
notice of termination is given and until the time any such termination becomes effective. 
  

 24 

 Except as expressly set forth in this Agreement, Adolor shall have no liability to Supplier for any costs that Supplier
may have incurred (or to which Supplier may be committed) in connection with materials used by Supplier in the manufacturing or packaging of API Compound prior to the effectiveness of any notice of termination. 
  
 13.2 Outstanding Payment. Payments of amounts owing to either Party
under this Agreement as of its expiration or termination shall be due and payable within the later of: (i) to the extent such amounts can be calculated and a fixed sum determined at the time of expiration or termination of this Agreement, sixty (60)
days after the date of such expiration or termination or (ii) ten (10) days after the date in which such amounts can be calculated and a fixed sum determined. 
  

13.3 Return of Materials. Within thirty (30) days following the of termination of this Agreement, each Party shall destroy or return to the
other Party all tangible items bearing, containing or contained in any of the Confidential Information of the other Party, and shall provide the other Party written certification of such destruction or return. Supplier shall also return to Adolor
all unused quantities of BX7 and any work-in-progress being held by Supplier. Supplier shall transfer to Adolor or its designee Supplier’s existing inventory of materials and work-in-process as well as any inventory of API Compound in
Supplier’s possession or control. 
  
 13.4 Access to
Records/Maintenance of Critical Samples and Test Programs. Upon termination of this Agreement, Supplier shall provide Adolor or its designee access for a period up to one (1) year after the latest expiry date of API Compound batches produced
under the Agreement to records, reports and master files relating to the API Compound, to enable Adolor or its designee (i) to answer complaints, (ii) to answer queries from Governmental Authorities or (iii) to conduct investigations necessary to
ensure the safety, efficacy and compliance of the API Compound. Supplier shall maintain all retention samples and stability programs for a period up to one (1) year after the latest expiry date of API Compound batches produced under this Agreement.

  
 13.5 Accrued Rights; Surviving Obligations.
Termination, relinquishment or expiration of this Agreement for any reason shall be without prejudice to any rights that shall have accrued to the benefit of any Party prior to such termination, relinquishment or expiration. Such termination,
relinquishment or expiration shall not relieve any Party from obligations which are expressly or by implication intended to survive termination, relinquishment or expiration of this Agreement and shall not affect or prejudice any provision of this
Agreement which is expressly or by implication provided to come into effect on, or continue in effect after, such termination, relinquishment or expiration. 
  
 ARTICLE 14 
 GENERAL PROVISIONS

  
 14.1 Relationship of the Parties. Each Party shall
bear its own costs incurred in the performance of its obligations hereunder without charge or expense to the other except as expressly provided in this Agreement. Neither Party shall have any responsibility for the hiring, termination or
compensation of the other Party’s employees or for any employee benefits of such employee. No employee or representative of a Party shall have any authority to bind or obligate 
  

 25 

 the other Party to this Agreement for any sum or in any manner whatsoever, or to create or impose any contractual or
other liability on the other Party without such Party’s approval. For all purposes, and notwithstanding any other provision of this Agreement to the contrary, Supplier’s legal relationship under this Agreement to Adolor shall be that of
independent contractor. This Agreement is not a partnership agreement and nothing in this Agreement shall be construed to establish a relationship of co-partners or joint venturers between the Parties. 
  
 14.2 Covenant Not to Compete. In the event that Adolor agrees to
purchase at least thirty-three and a third percent (33.33%) of Adolor’s API Compound requirements for a given Calendar Year from Supplier, Supplier agrees that for such Calendar Year (whether on its own behalf or with or on behalf of any
Person) it shall not, and shall not permit any of its Affiliates to: 
  
 14.2.1 carry on or be engaged, concerned, interested or in any way assist in the development or manufacture of (i) any prescription or over the counter formulation of the API Compound or Compound, or (ii) any generic or copycat versions of
the API Compound or Compound, including any salts, hydrates, polymorphs or anahydrous form thereof; 
  
 14.2.2 sell, market, distribute or seek customers for or advertise (i) any prescription or over the counter formulation of API Compound or Compound, or
(ii) any generic or copycat versions of the API Compound or Compound, including any salts, hydrates, polymorphs or anahydrous form thereof; 
  
 14.2.3 license, consent to or authorize or purport to license, consent to or authorize the doing or carrying out by any Person of any of the acts or
matters referred to in either of subparagraphs (a) or (b) above; or 
  
 14.2.4 pursue any policy of doing or carrying out or of facilitating or bringing about the doing or carrying out by any Person of any of the acts or matters referred to in any of the subparagraphs (a) through (c) above, for example, by
providing technological assistance, expertise, manufacturing or supplies to any Person. 
  
 Nothing contained in this Section 14.2 is intended to be an implied license to or waiver of any patent or other intellectual property right. 
  
 14.3 Force Majeure. The occurrence of an event which materially interferes with the ability of a Party to perform its
obligations or duties hereunder which is not within the reasonable control of the Party affected or any of its Affiliates, not due to malfeasance by such Party or its Affiliates, and which could not with the exercise of due diligence have been
avoided (each, a “Force Majeure Event”), including an injunction, order or action by a Governmental Authority, fire, accident, labor difficulty, strike, riot, civil commotion, act of God, inability to obtain materials, delay or
errors by shipping companies or change in applicable Laws, shall not excuse such Party from the performance of its obligations or duties under this Agreement, but shall merely suspend such performance during the continuation of the Force Majeure
Event. The Party prevented from performing its obligations or duties because of a Force Majeure Event shall promptly notify the other Party of the occurrence and particulars of such Force Majeure Event and shall provide the other Party, from time to
time, with its best estimate of the duration of such 
  

 26 

 Force Majeure Event and with notice of the termination thereof. The Party so affected shall use commercially reasonable
efforts to avoid or remove such causes of nonperformance as soon as is reasonably practicable. Upon termination of the Force Majeure Event, the performance of any suspended obligation or duty shall promptly recommence. The Party subject to the Force
Majeure Event shall not be liable to the other Party for any direct, indirect, consequential, incidental, special, punitive, exemplary or other damages arising out of or relating to the suspension or termination of any of its obligations or duties
under this Agreement by reason of the occurrence of a Force Majeure Event, provided such Party complies in all material respects with its obligations under this Section 14.3. 
  
 14.4 Governing Law. This Agreement shall be construed, and the respective rights of the Parties determined, according
to the substantive Law of the Commonwealth of Pennsylvania notwithstanding the provisions governing conflict of Laws under such Pennsylvania Law to the contrary, except matters of intellectual property Law which shall be determined in accordance
with the intellectual property Laws relevant to the intellectual property in question. The UNCITRAL Convention for the International Sale of Goods, as well as any other unified Law relating to the conclusion and implementation of contracts for the
international sale of goods, shall not apply. 
  
 14.5
Jurisdiction. Any legal action or proceeding with respect to this Agreement shall be brought in the courts of the Commonwealth of Pennsylvania or of the United States District Court for the Eastern District of Pennsylvania, and, by execution
and delivery of this Agreement, each Party hereby irrevocably accepts the exclusive jurisdiction of the aforesaid courts. Each Party hereby further irrevocably waives any claim that any such court lacks jurisdiction over it or to the laying of
venue, and agrees not to plead or claim, in any legal action or proceeding with respect to this Agreement brought in any of the aforesaid courts, that any such court lacks jurisdiction over it or any such action or proceeding has been brought in an
inconvenient forum. 
  
 14.6 Assignment. This Agreement may
not be assigned by either Party without the prior consent of the other Party; provided, however, that either Party may assign this Agreement, in whole or in part, to any of its Affiliates provided that the assigning Party guarantees the performance
of this Agreement by such Affiliate; and provided further, that either Party may assign this Agreement to a successor to all or substantially all of the assets or line of business to which this Agreement relates whether by merger, sale of stock,
sale of assets or other similar transaction. This Agreement shall be binding upon, and subject to the terms of the foregoing sentence, inure to the benefit of the Parties hereto, their permitted successors, legal representatives and assigns.

  

 27 

 14.7 Notices. All demands, notices, consents, approvals, reports, requests and other
communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally, by facsimile with confirmation of receipt, by mail (first class, postage prepaid), or by overnight delivery using a
globally-recognized carrier, to the Parties at the following addresses: 
  

			
	Adolor:	  	Adolor Corporation
	 	  	700 Pennsylvania Drive
	 	  	Exton, Pennsylvania, United States 19341
	 	  	Facsimile: 484-595-1520
	 	  	Attn: President
		
	With a copy to:	  	Adolor Corporation
	 	  	700 Pennsylvania Drive
	 	  	Exton, Pennsylvania, United States 19341
	 	  	Facsimile: 484-595-1520
	 	  	Attn: General Counsel
		
	and to:	  	Morgan, Lewis & Bockius LLP
	 	  	502 Carnegie Center
	 	  	Princeton, New Jersey, United States 08540
	 	  	Attn: Randall B. Sunberg
	 	  	Facsimile: 609-919-6639
		
	Supplier:	  	Torcan Chemical Ltd.
	 	  	P.O. Box 308
	 	  	Industrial Parkway
	 	  	Aurora, Ontario, Canada L4G 3H4
	 	  	Attn: Veronica Scherrer-Pangka, President
	 	  	Facsimile: 905-727-7545

  
 or to such other
address as the addressee shall have last furnished in writing in accord with this provision to the addressor. All notices shall be deemed effective upon receipt by the addressee. 
  
 14.8 Severability. In the event of the invalidity of any provisions of this Agreement or if this Agreement contains
any gaps, the Parties agree that such invalidity or gap shall not affect the validity of the remaining provisions of this Agreement. The Parties will replace an invalid provision or fill any gap with valid provisions which most closely approximate
the purpose and economic effect of the invalid provision or, in case of a gap, the Parties’ presumed intentions. In the event that the terms and conditions of this Agreement are materially altered as a result of the preceding sentences, the
Parties shall renegotiate the terms and conditions of this Agreement in order to resolve any inequities. Nothing in this Agreement shall be interpreted so as to require either Party to violate any applicable Laws. 
  
 14.9 Headings. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions hereof. 
  
 14.10 Certain Conventions. Unless the context of this Agreement otherwise requires: (i) words of any gender include each other gender, (ii) words such as “herein”, “hereof”, and
“hereunder” refer to this Agreement as a whole and not merely to the particular provision in which such words appear, (iii) words using the singular shall include the plural, and vice versa, and (iv) the words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “but not limited to”, “without limitation”, “inter alia”, “among other things” or words of similar import.

  

 28 

 14.11 Waiver; Remedies. Any term or condition of this Agreement may be waived at any time by the
Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition. No waiver by any Party of any term or condition
of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of this Agreement on any future occasion. Except as expressly set forth in this Agreement, all rights and
remedies available to a Party, whether under this Agreement or afforded by Law or otherwise, will be cumulative and not in the alternative to any other rights or remedies that may be available to such Party. 
  
 14.12 Entire Agreement. This Agreement (including the exhibits and
schedules hereto) constitute the entire agreement between the Parties, and supersede all previous agreements and understandings between the Parties, whether written or oral, with respect to the within subject matter. This Agreement may be altered,
amended or changed only by a writing making specific reference to this Agreement and signed by duly authorized representatives of Adolor and Supplier. 
  
 14.13 No License. Nothing in this Agreement shall be deemed to constitute the grant of any license or other right in either Party, to or in respect
of any API Compound, patent, trademark, Confidential Information, trade secret or other data or any other intellectual property of the other Party, except as expressly set forth herein. 
  
 14.14 Third Party Beneficiaries. None of the provisions of this Agreement shall be for the benefit of or enforceable
by any Third Party, including any creditor of either Party. No such Third Party shall obtain any right under any provision of this Agreement or shall by reasons of any such provision make any Claim in respect of any debt, liability or obligation (or
otherwise) against either Party. 
  
 14.15 Counterparts.
This Agreement may be executed in any two counterparts, each of which, when executed, shall be deemed to be an original and both of which together shall constitute one and the same document; and such counterparts may be delivered to the other Party
by facsimile. 
  
 [Remainder of this page intentionally
blank] 
  

 29 

 IN WITNESS WHEREOF, Adolor and Supplier, by their duly authorized officers, have executed this Agreement
as of the Effective Date. 
  

			
	ADOLOR CORPORATION
		
	 By:
	 	 /s/ Michael R. Dougherty

	 Name:
	 	 Michael R. Dougherty

	 Title:
	 	 Senior Vice President,
 Chief Operating Officer and
 Chief Financial Officer

	
	TORCAN CHEMICAL LTD.
		
	 By:
	 	 /s/ Veronica Scherrer-Pangka

	 Name:
	 	 Veronica Scherrer-Pangka

	 Title:
	 	 President

 SCHEDULE 1.44 
  
 SPECIFICATIONS 
  
 [**] 
  

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 SCHEDULE 2.3 
  
 CURRENT APPROVED SUBCONTRACTORS 
  
 [**] 
  

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 SCHEDULE 3.2 
  
 QUALITY AGREEMENT 
  
 (see attached) 

 SCHEDULE 4.7.4 
  
 MANUFACTURING LINE LOSSES 
  
 [**] 
  

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

 SCHEDULE 5.1 
  
 FIRST FORECAST 
 (Kg’s) 

 
 [**] 
  

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 35 

 SCHEDULE 8.1 
  
 SUPPLY PRICE 
  
 [**] 
  

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