Document:

exv4w17

 

 Exhibit 4.17

LEASE AGREEMENT

BETWEEN

HUDSON-ALPHA INSTITUTE FOR

BIOTECHNOLOGY

AND

                    Eurand Pharmaceuticals, Inc.                    

SUITE NO. ___4100           
          

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE 1
	 	 	1	 
	 
	 	 	 	 
	DEMISE
	 	 	1	 
	 
	 	 	 	 
	Section 1.01 Premises
	 	 	1	 
	Section 1.02 Parking Areas and Common Areas
	 	 	1	 
	Section 1.03 Relocation of Tenant
	 	 	1	 
	 
	 	 	 	 
	ARTICLE 2
	 	 	2	 
	 
	 	 	 	 
	TERM; ACCEPTANCE AND SURRENDER OF PREMISES; HOLDOVER
	 	 	2	 
	 
	 	 	 	 
	Section 2.01 Lease Term
	 	 	2	 
	Section 2.02 Termination Rights
	 	 	2	 
	Section 2.03 Common Design; Tenant Improvements
	 	 	2	 
	Section 2.04 Quiet Enjoyment
	 	 	2	 
	Section 2.05 Surrender of Premises
	 	 	2	 
	Section 2.06 Holdover
	 	 	3	 
	 
	 	 	 	 
	ARTICLE 3
	 	 	3	 
	 
	 	 	 	 
	RENT
	 	 	3	 
	 
	 	 	 	 
	Section 3.01 Rent
	 	 	3	 
	Section 3.02 Payments of Rent
	 	 	4	 
	 
	 	 	 	 
	ARTICLE 4
	 	 	4	 
	 
	 	 	 	 
	USE OF PREMISES; COMPLIANCE WITH LAWS
	 	 	4	 
	 
	 	 	 	 
	Section 4.01 Permitted Use
	 	 	4	 
	Section 4.02 Covenants of Tenant Regarding Use
	 	 	4	 
	Section 4.03 Landlord’s Rights Regarding Use
	 	 	5	 
	Section 4.04 Definition of Common Areas
	 	 	6	 
	Section 4.05 Access to and Inspection of Premises
	 	 	6	 
	 
	 	 	 	 
	ARTICLE 5
	 	 	6	 
	 
	 	 	 	 
	MAINTENANCE AND REPAIRS; ALTERATIONS; SERVICES
	 	 	6	 
	 
	 	 	 	 
	Section 5.01 Repair and Maintenance of the Building
	 	 	6	 
	Section 5.02 Repair and Maintenance of Premises
	 	 	.         7	 
	Section 5.03 Alterations
	 	 	7	 
	Section 5.04 Landlord Services
	 	 	7	 
	Section 5.05 Additional Services
	 	 	9	 
	 
	 	 	 	 
	ARTICLE 6
	 	 	9	 
	 
	 	 	 	 
	MECHANICS’ LIENS
	 	 	9	 
	 
	 	 	 	 
	ARTICLE 7
	 	 	10	 
	 
	 	 	 	 
	PERSONAL PROPERTY AND OTHER TAXES
	 	 	10	 
	 
	 	 	 	 
	ARTICLE 8
	 	 	10	 
	 
	 	 	 	 
	INSURANCE; INDEMNITY
	 	 	10	 
	 
	 	 	 	 
	Section 8.01 Landlord’s Insurance
	 	 	10	 
	Section 8.02 Waiver of Subrogation
	 	 	10	 

i

 

	 	 	 	 	 
	Section 8.03 Tenant’s Insurance
	 	 	10	 
	Section 8.04 Liability of Landlord and Tenant
	 	 	11	 
	 
	 	 	 	 
	ARTICLE 9
	 	 	12	 
	 
	 	 	 	 
	RESTORATION AFTER DAMAGE OR DESTRUCTION
	 	 	12	 
	 
	 	 	 	 
	ARTICLE 10
	 	 	13	 
	 
	 	 	 	 
	CONDEMNATION
	 	 	13	 
	 
	 	 	 	 
	ARTICLE 11
	 	 	13	 
	 
	 	 	 	 
	ASSIGNMENT; SUBLETTING
	 	 	13	 
	 
	 	 	 	 
	ARTICLE 12
	 	 	14	 
	 
	 	 	 	 
	TRANSFERS BY LANDLORD
	 	 	14	 
	 
	 	 	 	 
	Section 12.01 Sale and Conveyance of the Building
	 	 	14	 
	Section 12.02 Subordination
	 	 	14	 
	 
	 	 	 	 
	ARTICLE 13
	 	 	14	 
	 
	 	 	 	 
	LANDLORD’S LIEN; WAIVER OF LIEN
	 	 	14	 
	 
	 	 	 	 
	Section 13.01 Lien
	 	 	14	 
	Section 13.02 Waiver of Lien
	 	 	15	 
	 
	 	 	 	 
	ARTICLE 14
	 	 	15	 
	 
	 	 	 	 
	EVENTS OF DEFAULT; REMEDIES
	 	 	15	 
	 
	 	 	 	 
	Section 14.01 Defaults by Tenant
	 	 	15	 
	Section 14.02 Remedies of Landlord
	 	 	16	 
	Section 14.03 Default by Landlord and Remedies of Tenant
	 	 	17	 
	Section 14.04 Non-Waiver of Defaults
	 	 	17	 
	Section 14.05 Attorneys’ Fees
	 	 	17	 
	 
	 	 	 	 
	ARTICLE 15
	 	 	17	 
	 
	 	 	 	 
	ENVIRONMENTAL REPRESENTATIONS
	 	 	17	 
	 
	 	 	 	 
	COVENANTS AND INDEMNITIES
	 	 	17	 
	 
	 	 	 	 
	Section 15.01 Hazardous Materials
	 	 	17	 
	 
	 	 	 	 
	ARTICLE 16
	 	 	19	 
	 
	 	 	 	 
	NOTICES
	 	 	19	 
	 
	 	 	 	 
	ARTICLE 17
	 	 	20	 
	 
	 	 	 	 
	MISCELLANEOUS PROVISIONS
	 	 	20	 
	 
	 	 	 	 
	Section 17.01 Condition of Premises
	 	 	20	 
	Section 17.02 Insolvency or Bankruptcy
	 	 	20	 
	Section 17.03 Choice of Law
	 	 	20	 
	Section 17.04 Successors and Assigns
	 	 	20	 
	Section 17.05 Name
	 	 	20	 
	Section 17.06 Examination of Lease
	 	 	20	 
	Section 17.07 Time
	 	 	20	 
	Section 17.08 Defined Terms and Headings
	 	 	20	 
	Section 17.09 Prior Agreements; Amendments in Writing
	 	 	20	 

ii

 

	 	 	 	 	 
	Section 17.10 Payment of and Indemnification for Leasing Commissions
	 	 	20	 
	Section 17.11 Severability of Invalid Provisions
	 	 	21	 
	Section 17.12 Services Performed by Landlord
	 	 	21	 
	Section 17.13 Force Majeure
	 	 	21	 
	Section 17.14 Memorandum of Lease
	 	 	21	 
	Section 17.15 Confidentiality
	 	 	21	 
	Section 17.16 Non-Solicitation 
	 	 	21	 
	 
	 	 	 	 
	EXHIBIT A — PREMISES FLOOR PLAN
	 	 	24	 
	 
	 	 	 	 
	EXHIBIT B — BUILDING FF&E
	 	 	25	 
	 
	 	 	 	 
	EXHIBIT C — BUILDING RULES AND REGULATIONS
	 	 	26	 
	 
	 	 	 	 
	EXHIBIT D — PARKING RULES AND REGULATIONS
	 	 	29	 
	 
	 	 	 	 
	EXHIBIT E —  COMMENCEMENT DATE AGREEMENT
	 	 	31	 
	 
	 	 	 	 
	EXHIBIT F — REQUIREMENTS AND SPECIFICATIONS FOR LEASEHOLD
IMPROVEMENTS

	 	 	32	 
	 
	 	 	 	 
	EXHIBIT G — ESTOPPEL CERTIFICATE
	 	 	33	 
	 
	 	 	 	 
	EXHIBIT H — LABORATORY RULES AND REGULATIONS
	 	 	34	 

iii

 

STATE OF ALABAMA

COUNTY OF MADISON

LEASE AGREEMENT

      
    THIS LEASE AGREEMENT (the “Lease”) is made
and entered into on this the 15th day
 of January,
2008, by and between Hudson-Alpha Institute for Biotechnology, an Alabama non-profit corporation
(“Landlord”), and Eurand Pharmaceuticals. Inc a Delaware Corporation (“Tenant”).

ARTICLE 1

DEMISE

     Section 1.01 Premises. Landlord does hereby rent and lease to Tenant, and Tenant hereby rents
and leases from Landlord, the following described space in the building located at 601 Genome Way,
Huntsville, Alabama (the “Building”): approximately 5429 square feet of Usable Area, calculated in
accordance with BOMA Standard Method For Measuring Floor Area in Office Buildings, located on all
or a portion of the 4th floor of the Building, known as Suite # 4100, together with approximately
101 square feet of Usable Area located in the basement of the Building for storage space. Landlord
and Tenant acknowledge and agree that said square footage figures are accurate for all purposes
used herein. The space hereby leased in the Building is hereinafter called the “Premises” and is
outlined on the floor plan drawings attached hereto as Exhibit A and made a part hereof
for all purposes. The Building is located in the biotechnology research and development campus
known as The CRP Biotech Campus (the “Campus”), and this Lease and Tenant’s use and occupancy of
the Premises shall be subject to all of the covenants, rules and restrictions (including without
limitation applicable zoning ordinances) of Cummings Research Park West and The CRP Biotech
Campus.

     Section 1.02 Parking Areas and Common Areas. Tenant shall have the right to use all portions
of the real property adjacent to the Building that are designated from time to time by Landlord as
parking areas (the “Parking Areas”) and the Common Areas (as defined in Section 4.04) on a
nonexclusive basis in common with the other tenants of the Building in accordance with Article
4, and with the Building Rules and Regulations attached hereto as Exhibit C and the
Parking Rules and Regulations attached hereto as Exhibit D.

     Section 1.03 Relocation of Tenant. Landlord shall have the right, at its sole cost and
expense, to relocate Tenant to other premises within the Building of equal or greater kind and
quality as the Premises. In no event shall any relocation accomplished pursuant to this Section
1.03 result in an increase in Rent or other sums payable under this Lease unless Tenant shall
consent to an expansion of the Premises in connection with such relocation. Landlord shall use
reasonable efforts to minimize disruption or inconvenience to Tenant during any relocation.
Landlord’s liability to pay for the cost of any such relocation shall be limited to the direct
costs of the relocation, and not consequential or speculative costs (e.g., loss of profits
incurred by Tenant during relocation).

1

 

ARTICLE 2

TERM; ACCEPTANCE AND SURRENDER OF PREMISES; HOLDOVER

     Section 2.01 Lease Term. The term of this Lease shall begin on the Commencement Date (as
defined below) and terminate sixty (60) months thereafter (the “Lease Term”). The Lease Term shall
commence on the earlier of (a) the first business day following the date which is fifteen (15)
business days after Landlord delivers to Tenant written notice stating that the Premises are ready
to be occupied by Tenant, or (b) the date Tenant commences business operations in the Premises
(such earlier date being referred to herein as the “Commencement Date”). The Commencement Date
shall be confirmed by Tenant pursuant to the Commencement Date Agreement in the form attached
hereto as Exhibit E, which Tenant shall execute within fifteen (15) days following
delivery of possession of the Premises to Tenant as herein provided. Notwithstanding the
foregoing, Tenant’s obligation to pay rent shall not commence until the date that is one hundred
eighty (180) days after the Commencement Date (the “Rent Commencement Date”).

     Section 2.02 Termination Rights.

          A. If Tenant constructs (or causes the construction of) a
building within the Campus,
Tenant may terminate this Lease and the Lease Term prior to
its expiration in order to move out of the
Building and to move immediately into the newly constructed
building when such building is completed
and ready for occupancy by Tenant.

          B. In addition, Tenant shall have the option to terminate this Lease at anytime after
the thirtieth (30th) month of the Lease Term by delivering at least thirty (30) days’ advance
written notice
of such termination to Landlord, provided that on or before the effective date of such
termination, Tenant
shall (i) pay to Landlord all Rent and any other sums due and payable to Landlord accruing
through the
effective date of the termination, and (ii) reimburse Landlord for the full amount of the rent
credit for the
first six months of the Lease Term as provided for in the last sentence of Section 2.01
(a) above,
calculated as the product of the aggregate initial monthly rental for the Premises as set
forth in Section 3.01 times six (6) months.

     Section 2.03 Common Design; Tenant Improvements. Tenant acknowledges that Landlord intends
that the Premises have an appearance and design that is common with the Common Areas and other
tenant spaces of the Building. Accordingly, Landlord’s architect has developed a common look and
feel for all non-laboratory space within the Building, and Landlord will provide integrated office
furniture, fixtures, equipment and color schemes for non-laboratory spaces in the HAIB Building
(including within the Premises). During the Lease Term, Tenant shall have the right to use all
such office furniture, fixtures and equipment located within the Premises, a detailed inventory
and description of which is attached hereto as Exhibit B. as the same may be amended from
time to time (collectively, the “Building FF&E”) for the purpose for which such items are
intended, but the Building FF&E shall remain the sole property of Landlord at all times.

     Section 2.04 Quiet Enjoyment. So long as Tenant is not in default hereunder, Landlord
covenants and agrees that Tenant may peaceably hold and quietly enjoy the Premises subject to and
upon the terms and conditions of this Lease.

     Section 2.05 Surrender of Premises.

          A. Tenant shall surrender and deliver up the Premises (including, without limitation, all
Building FF&E) at the expiration or termination of the Lease Term, in good repair and condition,
reasonable wear and tear thereof excepted.

2

 

          B. “Tenant’s Personal Property” shall mean all equipment, machinery, furniture,
furnishings and other personal property now or hereafter installed or placed in or on the Premises
by and at the sole expense of Tenant that can be removed without damage to the Premises or the
Building. Tenant shall obtain Landlord’s approval of such Tenant’s Personal Property before
installing or placing the same in the Premises. Tenant shall remove all of Tenant’s Personal
Property from the Premises at the expiration or termination of the Lease and shall repair any
damage to the Premises or the Building caused by such removal. All other property located within
the Premises (other than alterations and additions required by Landlord to be removed by Tenant
pursuant to Section 5.03 hereof), including wall-to-wall carpet, paneling or other wall
covering, and any other article attached or affixed to the floor, wall or ceiling of the Premises,
shall become the property of Landlord and shall remain upon and be surrendered with the Premises as
a part thereof at the termination of this Lease by lapse of time or otherwise, Tenant hereby
waiving all rights to any payment or compensation therefor. Any property belonging to Tenant or any
other person that is left in the Premises after the Lease Term shall be deemed to be have been
abandoned: provided, however, that Tenant shall remain liable for the cost of the removal of such
property.

     Section 2.06 Holdover. If Tenant continues to occupy the Premises after the expiration of the
Lease Term, or upon any earlier termination of this Lease. Tenant shall be deemed a tenant from
month-to-month, with rent due and payable for such holdover period at the rate of one hundred
fifty percent (150%) of the monthly rent in effect at the expiration (or earlier termination) of
this Lease. During any such holdover period, all other terms and conditions of this Lease shall
remain in full force and effect and such tenancy from month-to-month shall be cancelable by either
party by giving written notice thereof at least thirty (30) days prior to the effective date of
cancellation.

ARTICLE 3

RENT

     Section 3.01 Rent. For purposes of this Lease, each successive period of twelve (12) months
during the Lease Term commencing on the Commencement Date shall be a “Lease Year”. As
consideration of and for this Lease and the Premises, commencing on the Rent Commencement Date,
Tenant shall pay to Landlord an initial net annual rental equal to the sum of $15.00 per square
foot with respect to___5429___ square feet of Tenant’s Premises located at Suite # 4100, and $5.00 per
square foot with respect to___101___square feet of Tenant’s Premises for storage located in the
basement of the Building as reflected on Exhibit A (collectively, the “Rent”). Rent will
be adjusted on the first day of the third Lease Year and on the first day of each Lease Year
thereafter (each such date an “Adjustment Date”) to reflect the increase, if any, in the
cost of living from the month and year in which the Commencement Date occurs; provided, however,
that Rent for any Lease Year shall not increase by more than 2% over the Rent in effect for the
immediately preceding Lease Year. In no event shall the annual rent due after the Adjustment Date
ever be a sum which is less than the annual rent due before the Adjustment Date. The annual rent
due as a result of an increase in the cost of living shall be calculated in accordance with the
calculation set forth in this Section 3.01. The basis for computing the cost of living shall be
the unadjusted Consumer Price Index for all Urban Consumers, All Items (1982-84 = 100) published
by the Bureau of Labor Statistics of the United States Department of Labor (“Index”). The
Index for the month and year in which the Commencement Date occurs shall be the “Base Index
Number”. The Index for the month immediately preceding the Adjustment Date shall be the “Current
Index Number”. The annual Rent for each Lease Year commencing with the third Lease Year shall be
the greater of (i) the annual Rent then in effect immediately prior to the Adjustment Date, and
(ii) the product obtained from multiplying the amount of annual rent in effect prior to the
applicable Adjustment Date by

3

 

the fraction whose numerator is equal to the Current Index Number and whose denominator is equal to
the Base Index Number.

	 	 	 	 	 
	Adjusted Annual Rent = Annual Rent Prior to Adjustment Date x

	 	Current Index Number
	 	 
	 

	 	 	 	 
	 

	 	Base Index Number	 	 

If the aforesaid Index is not in existence at the time the determination is to be made, the parties
shall use such equivalent price index as is published by a successor government agency in lieu of
the Index; or if no such price index is published, then the parties shall use a mutually acceptable
equivalent price index as is published by a non-governmental agency.

     Section 3.02 Payments of Rent. Rent shall be due and payable in equal monthly installments,
in advance, without notice, demand, setoff or deduction, on the first day of each calendar month
during the Lease Term. Tenant shall pay the Rent to Landlord by delivering or mailing (postage
prepaid) the Rent to Landlord at the following address:

Hudson-Alpha Institute for
Biotechnology 
601 Genome Way

Huntsville, AL 35806

or to such other address or in such other manner as Landlord may, from time to time, specify by
written notice to Tenant (including without limitation via Automated Clearing House (ACH) payment
to a financial institution designated by Landlord). Any payment which is less than the amount of
Rent then due shall constitute a payment made on account thereof, the parties hereby agreeing that
Landlord’s acceptance of such payment shall not alter or impair Landlord’s right to be paid all or
any amounts then or thereafter due and shall not prevent Tenant from being in default or Landlord
from exercising all its remedies hereunder. Rent shall be prorated for any partial month that this
Lease is in effect.

ARTICLE 4

USE OF PREMISES; COMPLIANCE WITH LAWS

     Section 4.01 Permitted Use. Tenant agrees that Landlord is leasing the Premises to Tenant
based on the representation by Tenant that the use of Premises by Tenant shall be in the field of
biotechnology, including research, office, laboratory, sales, service, training and production.
Tenant agrees that it shall only use the Premises in connection with such use in the field of
biotechnology and shall not use the Premises for any non-biotechnology uses.

     Section 4.02 Covenants of Tenant Regarding Use. In connection with its use of the
Premises, Tenant agrees to do the following:

          A. Tenant shall use the Premises and conduct its business thereon
in a safe, careful,
reputable and lawful manner.

          B. Tenant (i) shall not use, or permit any other person to use, the Premises for any
(a) unlawful purpose or act and (b) any use other than the permitted use set forth in
Section 4.01; (ii) shall
comply with and obey all laws, regulations and orders of any governmental authority or agency;
(iii) shall
not commit or permit any waste or damage to the Premises; (iv) shall comply with all
reasonable

4

 

directions of the Landlord, including without limitation, all the Building Rules and Regulations
attached hereto as Exhibit C, all the Parking Rules and Regulations attached hereto as
Exhibit D and all Laboratory Rules and Regulations applicable to all laboratory spaces
within the Building attached here to as Exhibit H, as the same may be modified from time to
time by Landlord on reasonable notice to Tenant; and (v) shall not do or permit anything to be done
in or about the Premises that constitutes a nuisance or in any way obstructs or interferes with the
rights of other tenants or occupants of the Building or their invitees, or injure or annoy such
tenants, occupants or their invitees. Landlord shall not be responsible to Tenant for the
nonperformance by any other tenant or occupant of the Building of any of the Building Rules and
Regulations, but agrees to take reasonable measures to assure such other tenant’s compliance.

          C. Tenant shall, at its sole cost and expense, procure or obtain any and all necessary
permits, licenses, or other authorizations required for lawful and proper use, occupation and
management
of the Premises.

          D. Tenant shall not overload the floors of the Premises beyond
their designed
weight-bearing capacity, which Landlord has determined to be
80 PSI for all corridor floor space and 100
PSI for all office and laboratory floor space, including an
allowance for partition load. Landlord reserves
the right to direct the positioning of all heavy equipment,
furniture and fixtures that Tenant desires to
place in the Premises so as to distribute properly the weight
thereof, and to require the removal of any
equipment or furniture that exceeds the weight limit
specified herein.

          E. Tenant shall not use the Premises, or allow the Premises to be
used, for any
purpose or in any manner that would, in Landlord’s opinion,
invalidate any policy of insurance now or
hereafter carried on the Building and/or the Campus or
increase the rate of premiums payable on any such
insurance policy. Should Tenant fail to comply with this
covenant, Landlord may, at its option, require
Tenant to stop engaging in such activity or to reimburse
Landlord as additional rent for any increase in
premiums charged during the Lease Term on the insurance
carried by Landlord on the Premises and
attributable to the use being made of the Premises by Tenant.

          F. Tenant shall not inscribe, paint, affix or display any signs,
advertisements or
notices on the interior or exterior of the Building or on or
about the Parking Areas and Common Areas or
within the Premises which are visible from outside the
Premises, except for such tenant identification
information as Landlord permits to be included or shown on
the directory board in the main lobby and on
or adjacent to the access door or doors to the Premises, or
such other signs Landlord may consent to in
writing.

     Section 4.03 Landlord’s Rights Regarding Use. In addition to the rights specified elsewhere
in this Lease, Landlord shall have the following rights regarding the use of the Premises, the
Parking Areas or the Common Areas by Tenant, its employees, agents, customers and invitees, each
of which may be exercised without notice or liability to Tenant:

          A. Landlord shall install such signs, advertisements or notices or tenant
identification information on the directory board and tenant access doors, as it shall deem
necessary or
proper.

          B. Landlord shall approve or disapprove, prior to installation, all types of drapes;
shades and other window coverings used in the Premises, and may control all internal lighting
that may
be visible from outside the Premises

5

 

          C. Landlord shall approve or disapprove all sign painting and lettering used on the
Premises and the Building, including the suppliers thereof.

          D. Landlord may control the Parking Areas and the Common Areas
in such manner
as it deems necessary or proper, including by way of
illustration and not limitation: requiring all persons
entering or leaving the Building to identify themselves and
their business in the Building; excluding or
expelling any peddler, solicitor or loud or unruly person
from the Building; and closing or limiting access
to the Building or any part thereof, including entrances,
corridors, doors and elevators, during times of
special events sponsored by Landlord, emergency repairs or
after regular business hours.

          E. Landlord reserves the right, subject to Tenant’s right to
quiet enjoyment of the
Premises, to modify the size, location, arrangement, finish
and other features of the Common Areas and
the Parking Areas of the Building, and to alter, modify, or
add onto the Building (other than the Premises)
and the Parking Areas.

     Section 4.04 Definition of Common Areas. The term “Common Areas”, as used in this Lease,
refers to the areas of the Building and the Campus that are designed for use in common by all
tenants of the Building and their respective employees, agents, customers, invitees and others,
and includes, by way of illustration and not limitation (i) entrances and exits, lobbies, hallways
and stairwells, elevators, restrooms and snack bars or other vending areas located outside the
premises leased to tenants, (ii) sidewalks, driveways, the Parking Areas and landscaped areas,
(iii) temporary guest quarters located outside the premises leased to tenants, (iv) the cafeteria,
the library, the gym/workout area, and (v) other areas as may be designated by Landlord from time
to time as part of the Common Areas of the Building. During the Lease Term, Tenant shall have the
non-exclusive right, in common with others, to the use of the Common Areas, subject to such
nondiscriminatory rules and regulations as may be adopted from time to time by Landlord including
those set forth on Exhibit C and Exhibit D of this Lease.

     Section 4.05 Access to and Inspection of Premises. Landlord, its employees and agents and any
mortgagee of the Building shall have the right to enter any part of the Premises during normal
business hours for the purposes of examining or inspecting the same, showing the same to
prospective purchasers, mortgagees or tenants and making such repairs, alterations or improvements
to the Premises or the Building as Landlord may deem necessary or desirable; provided, however, in
the event of an emergency, as determined in Landlord’s reasonable judgment, no prior notice shall
be required and entry shall not be limited to normal business hours. In addition, during the last
one hundred eighty (180) days of the Lease Term, Landlord, its employees and agents shall have the
right to enter any part of the Premises at reasonable times for the purposes of showing the same
to prospective tenants. If representatives of Tenant shall not be present to open and permit such
entry into the Premises at any time when such entry is necessary or permitted hereunder, Landlord
and its employees and agents may enter the Premises by means of a master or pass key or otherwise.
Landlord shall incur no liability to Tenant for such entry, nor shall such entry constitute an
eviction of Tenant or a termination of this Lease, or entitle Tenant to any abatement of rent
therefor.

ARTICLE 5

MAINTENANCE AND REPAIRS; ALTERATIONS; SERVICES

     Section 5.01 Repair and Maintenance of the Building. Subject to Tenant’s repair and
maintenance obligations pursuant to Section 5.02 below, Landlord shall repair and
maintain in good

6

 

working order and condition (i) the elevators, HVAC, electrical, plumbing, ventilation, sprinkler
and other mechanical systems of the Building, (ii) the structural components of the Building,
including without limitation, the roof, foundation, exterior walls, exterior doors and exterior
windows, and (iii) the Common Areas and Parking Areas of the Building. Except as provided in
Article 8 and Article 9 hereof, there shall be no abatement of rent and no
liability of Landlord by reason of any injury to or interference with Tenant’s business arising
from the making of any repairs, alterations or improvements in or to any portion of the Building or
the Premises or in or to any fixtures, appurtenances and equipment therein or thereon. Nothing
herein shall diminish Tenant’s responsibility to maintain and repair Tenant equipment, including
but not limited to any special fire protection equipment, telecommunications and computer
equipment, kitchen equipment, air conditioning/ventilation equipment serving and specially
installed for the Premises (if any), any laboratory equipment, refrigerators or freezers or other
equipment specially installed for the Tenant. Notwithstanding anything contained in the Section to
the contrary, Landlord shall have no obligation to make any repairs necessitated by the negligence,
willful misconduct, misuse or default of Tenant, its employees, agents, customers and invitees.

     Section 5.02 Repair and Maintenance of Premises. Tenant shall, at its own cost and expense,
keep in good repair all portions of the Premises, including but not limited to windows, glass and
plate glass, doors, interior walls and finish work, floors and floor coverings, Building FF&E, and
supplemental or special heating and air conditioning systems, and shall take good care of the
Premises and its fixtures (including without limitation, Building FF&E) and permit no waste,
except normal wear and tear. Tenant shall maintain and replace, at its cost and expense, all light
bulbs and fixtures in the Premises that are not the Building’s standard light fixtures and bulbs.
Any repairs required under this Section, although paid for by Tenant, will be performed by
Landlord, except with regard to laboratory areas within the Premises, in which case Tenant shall
perform all maintenance and repairs to such areas, including without limitation maintenance and
repairs to fume hoods, freezers, coolers, snorkels, biohazard cabinets and lab benches.

     Section 5.03 Alterations. Tenant may not make any changes, additions, alterations,
improvements or additions to the Premises and Building FF&E or attach or affix any articles
thereto without Landlord’s prior written consent, which consent may be withheld in Landlord’s sole
discretion for any reason or no reason. If Landlord permits any such changes or alterations, they
will be at Tenant’s sole cost and expense and will subject to such requirements and conditions as
Landlord may impose in its sole discretion, including without limitation the following
requirements: (i) that all permitted alterations, improvements and additions to the Premises shall
be performed only by Landlord or by contractors approved by Landlord in accordance with plans and
specifications approved by Landlord; and (ii) that Tenant, upon the expiration of this Lease,
restore the Premises to the same condition as existed on the Commencement Date at Tenant’s
expense.

     Section 5.04 Landlord Services.

          A. Landlord shall use its reasonable best efforts to furnish the
Premises with the following services (the “Landlord Services”):

          (i) Tepid water (at the normal temperature of the supply of water to the Building)
for lavatory and toilet purposes, refrigerated water for drinking purposes, and hot water,
all of such water service to be supplied from the regular supply of water to the Building
through fixtures installed by Landlord either in the Common Areas or the Premises, as
Landlord shall determine;

7

 

          (ii) Landlord shall furnish seasonable air conditioning and heating during normal business
hours as determined by Landlord in its reasonable discretion. Should Tenant desire either heating
or air conditioning at other times, Landlord agrees to provide same, but at Tenant’s expense at
such hourly rates as may be determined from time to time by Landlord, which charge Tenant shall pay
promptly upon being billed therefor;

          (iii) Landlord shall furnish electric current for Building standard tenant lighting and small
business machinery only from electric circuits designated by Landlord for Tenant’s use. Such
circuits will be fed into one or more of the existing electrical panel(s) in the electrical
closets located adjacent to the Premises. Tenant’s usage of said panels on any given floor shall
not exceed Tenant’s pro rate share (based on rentable square footage) of the panels’ capacity.
Tenant will not use any electrical equipment which in Landlord’s opinion will overload the wiring
installations or interfere with the reasonable use thereof by other users in the Building. Tenant
will not, without Landlord’s prior written consent in each instance, connect any items such as
non-Building standard tenant lighting, vending equipment, printing or duplicating machines,
computers (other than desktop word processors and personal computers), auxiliary air conditioners,
laboratory equipment, and other related equipment to the Building’s electrical system, or make any
alteration or addition to the system. If Tenant desires any such items, additional 208/120 volt
electrical power beyond that supplied by Landlord as provided above, electric current in excess of
208/120 volts for purposes other than Building Standard tenant lighting, or other special power
requirements or circuits, then Tenant may request Landlord to provide such supplemental power or
circuits to the Premises, which request Landlord may grant or withhold in its reasonable
discretion. If Landlord furnishes such power or circuits, Tenant shall pay Landlord the cost of
the design, installation and maintenance of the facilities required to provide such additional or
special electric power or circuits and the cost of all electric current so provided at such rates
as may be determined from time to time by Landlord. Landlord may require separate electrical
metering of such supplemental electrical power or circuits to the Premises, and Tenant shall pay,
on demand, the cost of the design, installation and maintenance of such metering facilities. In
the event such additional electrical power is not separately metered, Landlord may utilize agreed
upon estimates to pay for such additional electric power and Tenant agrees to pay for such
additional agreed upon estimates on a monthly basis, in addition to any other rent or charges
hereunder. Tenant shall not have access to any electrical closets in the Building; any electrical
engineering design or contract work shall be performed at Tenant’s expense by Landlord or an
electrical engineer and/or electrical contractor designated by Landlord. All invoices respecting
the design, installation and maintenance of the facilities requested by Tenant shall be paid
within thirty (30) days of Tenant’s receipt thereof. Landlord’s charge to Tenant for the cost of
electric current so provided shall be paid within thirty (30) days of receipt of invoice by
Tenant.

          (iv) Waste disposal, cleaning and janitorial service, including the supplying and installing
of paper towels, toilet tissue and soap in the Common Areas on Monday through Friday of each week
except legal holidays; provided, however, Tenant shall be responsible at its own cost for
hazardous waste disposal, cleaning of laboratory areas within the Premises, and carpet cleaning
other than routine vacuuming;

          (v) Replacement of all lamps, bulbs, starters and ballasts in Building Standard lighting as
required from time to time as a result of normal usage;

8

 

          (vi) Cleaning and maintenance of the Parking Areas and
Common Areas, including the removal of rubbish and
snow;

          (vii) Washing of exterior and interior windows at intervals
reasonably established by Landlord;

          (viii) Exterior lighting and pass-card or other security access to the Building
after standard building hours; and

          (ix) Automatic elevator service.

     Landlord in its sole discretion may, but shall not be obligated to, provide patrol service to
monitor the Parking Areas and Building entrances.

          B. Except as otherwise set forth above, the Landlord Services
shall be provided
during normal business hours as determined by Landlord in its
reasonable discretion. Landlord shall give
Tenant at least seventy-two (72) hours advance notice of any
utilities which will be unavailable within the
knowledge and control of Landlord.

          C. Tenant understands, acknowledges and agrees that any one or
more of the
utilities or other building services identified in this
Section 5.04 may be interrupted by reason of accident,
emergency or other causes beyond Landlord’s control, or may be
discontinued or diminished temporarily
by Landlord or other persons until certain repairs,
alterations or improvements can be made; that Landlord
does not represent or warrant the uninterrupted availability
of such utilities or building services, and that
any such interruption shall not be deemed an eviction or
disturbance of Tenant’s right to possession,
occupancy and use of the Premises or any part thereof, or
render Landlord liable to Tenant for damages
by abatement of rent or otherwise, or relieve Tenant from the
obligation to perform its covenants under
this Lease, including the payment of rent.

     Section 5.05 Additional Services. If Tenant requests any other utilities or building services
in addition to those identified above, or if any of the above utility or building services are
substantially greater in frequency, scope, quality or quantity than those that are normally
required by other tenants in the Building as determined by Landlord, then Landlord may, but shall
not be obligated to, use reasonable efforts to attempt to furnish Tenant with such additional
utilities or building services. In the event Landlord is able to and does furnish such additional
utilities or building services, the costs thereof shall be determined solely by Landlord,
exercising its reasonable business judgment, and shall be borne by Tenant.

ARTICLE 6

MECHANICS’ LIENS

     If any mechanics’ or other lien or order for the payment of money shall be filed against the
Building or the property of which the Building is a part or any building or improvement thereon,
by reason of or arising out of any labor or material furnished or alleged to have been furnished
to or for, or at the request of, Tenant at the Premises, or for or by reason of any change,
alteration, or addition or the cost or expense thereof or any contract relating thereto, Tenant
shall cause the same to be canceled and discharged of record, by bond or otherwise as allowed by
law at the expense of Tenant, within ten (10)

9

 

days after written demand therefor, and shall also defend on behalf of Landlord at Tenant’s sole
cost and expense, any action, suit, or proceeding that may be brought thereon or for the
enforcement of those liens, lien or orders, and Tenant will pay any damages and satisfy and
discharge any judgment entered therein and indemnify and save harmless Landlord from any claim or
damage resulting therefrom. If Tenant fails to have any such lien canceled or discharged, Landlord
may, but shall not be obligated to, pay the claim upon which such lien is based so as to have such
lien released of record; and, if Landlord does so, then Tenant shall pay to Landlord, as additional
rent, upon demand, the amount of such claim, plus all other costs and expenses incurred in
connection therewith. This Section shall survive the expiration or earlier termination of this
Lease.

ARTICLE 7

PERSONAL PROPERTY AND OTHER TAXES

     Tenant shall pay before delinquency any and all taxes, assessments, fees or charges,
including any sales, gross income, rental, business occupation or other taxes, levied or imposed
upon Tenant’s business operations in the Premises and any of Tenant’s Personal Property. In the
event any such taxes, assessments, fees or charges are charged to the account of, or are levied or
imposed upon the property of Landlord, Tenant shall reimburse Landlord for the same as additional
rent.

ARTICLE 8

INSURANCE; INDEMNITY

     Section 8.01 Landlord’s Insurance. Landlord shall maintain liability, fire and extended
coverage insurance in the Building, together with such other types of insurance coverage as are
customarily maintained by owners of comparable first-class office/research and laboratory
buildings in the Huntsville, Alabama metropolitan area, and such other insurance coverage as
Landlord may elect in its sole discretion to carry. Tenant acknowledges that Landlord’s policy of
casualty insurance may include commercially reasonable deductible limits that, notwithstanding the
waiver set forth in Section 8.02 below, shall be considered the sole responsibility of Tenant
hereunder to the extent of Tenant’s fault if Tenant or any person acting at the direction or under
the control of Tenant is the cause of any loss covered by Landlord’s policy of casualty insurance.

     Section 8.02 Waiver of Subrogation. Each party hereby waives any and every right or cause of
action for any and all loss of, or damage to, any of its property (whether or not such loss or
damage is caused by the fault or negligence of the other party or anyone for whom said other party
may be responsible), which loss or damage is actually covered by valid and collectible fire,
extended coverage, “All Risk” or similar policies maintained by such party or required to be
maintained by such party under this Lease, subject to the provisions of Section 8.01 above
and to the extent that such loss or damage is recovered under said policies. Written notice of the
terms of said mutual waivers shall be given to each insurance carrier and said insurance policies
shall be properly endorsed, if necessary, to prevent the invalidation of said insurance coverages
by reason of said waivers.

     Section 8.03 Tenant’s Insurance.

          A. Tenant shall carry and keep in full force and effect from and after the Commencement Date
and at all times during the Lease Term broad-form commercial liability insurance with limits of at
least One Million Dollars ($1,000,000.00) for each occurrence.

10

 

          B. Tenant shall carry an all-risk insurance policy covering all of Tenant’s property located
in the Premises (including without limitation Tenant’s Personal Property) for not less than the
full insurable value and replacement cost thereof without reduction for depreciation. All
proceeds of such insurance shall be used solely to restore, repair or replace Tenant’s property
located in the Premises (including without limitation Tenant’s Personal Property).

          C. Tenant shall obtain such additional amounts of insurance and additional types of coverage
as Landlord may reasonably request from time to time.

          D. All commercial general liability and property damage insurance policies and any other
insurance policies carried by Tenant shall (i) be issued by insurance companies authorized to do
business in the State of Alabama, with a then current Alfred M. Best Company, Inc. (or if it no
longer exists, a comparable rating service) general policy holder’s rating of “A” or better and
financial size category of Class XII or higher and otherwise reasonably satisfactory to Landlord;
(ii) designate, as additional named insureds, Landlord, Landlord’s managing agent, Landlord’s
mortgagee(s) and any other parties designated by Landlord; (iii) be written as a primary policy
coverage and not contributing with or in excess of any coverage that Landlord may carry; (iv)
provide for thirty (30) days’ prior written notice to Landlord of any cancellation or other
expiration of such policy; and (v) contain contractual liability coverage insuring the performance
by Tenant of the indemnity provisions of this Lease. In addition, all property damage insurance
policies shall either permit or contain an express waiver of any right to recovery (by subrogation
or otherwise) by the insurance company against Landlord and Landlord’s mortgagees. Tenant shall
deliver to Landlord either a copy of each such policy of insurance or a certificate evidencing the
coverages required hereunder prior to occupancy. Renewal certificates shall be provided by Tenant
on an annual basis. Neither the issuance of any insurance policy required hereunder nor the
minimum limits specified herein with respect to Tenant’s insurance coverage shall be deemed to
limit or restrict in any way Tenant’s liability under this Lease.

     Section 8.04 Liability of Landlord and Tenant.

          A. Neither Landlord nor any of its agents or employees shall have any liability to Tenant, or
to Tenant’s employees, agents, contractors, subtenants, invitees or customers for any damage,
injury, loss, or claims based on or arising out of any cause whatsoever, including without
limitation, the following: repair to any portion of the Premises, the Building or Building FF&E;
interruption in the use of the Premises or any equipment therein (including without limitation
Building FF&E); any accident or damage resulting from any use or operation Landlord, Tenant, or
any other person or entity of elevators, or the heating, cooling, electrical, sewerage, or
plumbing equipment or apparatus, or the laboratory equipment (including without limitation
autoclaves, fume hoods, freezers and environmental chambers); personal injury (including disease
or illness), death or property damage resulting from the operation by Tenants or its employees,
agents, contractors or invitees of the Premises or the business conducted therein; termination of
the Lease by reason of damage to the Premises or the Building; fire, robbery, theft, vandalism,
mysterious disappearance or any other casualty; actions of any other tenant of the Building or of
any person or entity; failure or inability to furnish any service specified in this Lease; any
leakage in any part of the Premises or the Building, or from drains, pipes, or plumbing fixtures
in the Premises or the Building. Any property placed by Tenant in or about the Premises or the
Building shall be at the sole risk of Tenant, and Landlord shall not in any manner be responsible
therefore. Notwithstanding the foregoing, Landlord shall not be released from liability to Tenant
for and to the extent of any injury caused by Landlord’s wanton or willful misconduct. In no
event, however, shall Landlord have any liability to Tenant on account of any claims for the
interruption of or loss to Tenant’s

11

 

business
or for any indirect damages or consequential losses.

          B. Tenant shall reimburse Landlord for, and shall indemnity, protect, defend and hold
Landlord, its employees, and agents harmless from and against all costs, damages, claims,
liabilities, expenses (including attorneys’ fees, disbursements and actual costs), losses, and
court costs suffered by or claimed against Landlord, directly or indirectly, based on or arising
out of, in whole or in part, (i) the use and occupancy of the Premises or the business conducted
therein, and/or the use of the Building FF&E; (ii) any act or omission of Tenant, its agents,
contractors, employees, subtenants, or invitees; or (iii) any breach of Tenant’s obligations under
this Lease, and not resulting from the gross negligence or willful misconduct of Landlord, its
employees or agents.

          C. Notwithstanding any provision to the contrary contained herein, Tenant shall look solely to
the estate and property of Landlord in and to the Building in the event of any claim against
Landlord arising out of or in connection with this Lease, the relationship of Landlord and Tenant,
or Tenant’s use of the Premises, and Tenant agrees that the liability of Landlord arising out of or
in connection with the Lease, the relationship of Landlord and Tenant, or Tenant’s use of the
Premises, shall be limited to such estate and property of Landlord in and to the Building. No
properties or assets of Landlord other than the estate and property of Landlord in and to the
Building shall be subject to levy, execution or other enforcement procedures for the satisfaction
of any judgment (or other judicial process) or for the satisfaction of any other remedy of Tenant
arising out of or in connection with this Lease, the relationship of Landlord and Tenant, or
Tenant’s use of the Premises.

ARTICLE 9

RESTORATION AFTER DAMAGE OR DESTRUCTION

     If the Premises or any part thereof shall be damaged by fire or other casualty, Tenant shall
give prompt written notice thereof to Landlord. In case the Building shall be so damaged by fire
or other casualty that substantial alteration or reconstruction of the Building shall, in
Landlord’s sole opinion, be required (whether or not the Premises shall have been damaged by such
fire or other casualty) or in the event any mortgagee under a mortgage covering the Building
should require that the insurance proceeds payable as a result of said fire or other casualty be
used to retire the mortgage debt, Landlord may, at its option, terminate this Lease and the Lease
Term and estate hereby granted by notifying Tenant in writing of such termination within sixty
(60) days after the date of such damage, in which event the rent hereunder shall be abated as of
the date of such damage. If Landlord does not thus elect to terminate this Lease, Landlord shall
within sixty (60) days after the date of such damage commence to repair and restore the Building
and shall proceed with reasonable diligence to restore the Building (except that Landlord shall
not be responsible for delays outside its control) to substantially the same condition in which it
existed immediately prior to the happening of the casualty, except that Landlord shall not be
required to rebuild, repair or replace any part of Tenant’s furniture or furnishings or of
fixtures and equipment removable by Tenant under the provisions of this Lease. Landlord shall not
be liable for any inconvenience or annoyance to Tenant or injury to the business of Tenant
resulting in any way from such damage or the disregard of the repair thereof, unless resulting
from Landlord’s gross negligence or willful misconduct, except that, Landlord shall allow Tenant a
diminution of rent (in proportion to the diminution in the usable area of the Premises) during the
time and to the extent the Premises are unfit for occupancy. Landlord may relocate Tenant in
accordance with Section 1.03 either permanently or temporarily in order to accommodate
restoration work performed by Landlord. In the event Landlord fails to complete the restoration
within one hundred eighty (180) days from the date of the casualty or such longer period as is
reasonably necessary for Landlord to complete the repair using reasonable diligence, Tenant may,
at its

12

 

option, terminate this Lease by giving Landlord written notice of such termination, whereupon this
Lease shall terminate. If the Premises or any other portion of the Building be damaged by fire or
other casualty resulting from the fault or negligence of Tenant or any of Tenant’s agents,
employees or invitees. Tenant shall not have the termination right set forth in the preceding
sentience, the rent hereunder shall not be diminished during the repair of such damage.

ARTICLE 10

CONDEMNATION

     If the whole or any part of the Premises shall be taken for public or quasi-public use by a
governmental or other authority having the power of eminent domain or shall be conveyed to such
authority in lieu of such taking, and if such taking or conveyance shall cause the remaining part
of the Premises to be untenantable and inadequate for use by Tenant for the purpose for which they
were leased, then Tenant may, at its option, terminate this Lease; provided, however, that such
termination shall be ineffective if Landlord elects to relocate Tenant in accordance with
Section 1.03 hereof, and notice of such election is delivered to Tenant within thirty (30)
days’ after Landlord’s receipt of Tenant’s termination notice. If a part of the Premises shall be
taken or conveyed but the remaining part is tenantable and adequate for Tenant’s use, then,
subject to Landlord’s relocation right set forth in Section 1.03, this Lease shall be
terminated as to the part taken or conveyed as of the date Tenant surrenders possession. In such
event, Landlord shall make such repairs, alterations and improvements as may be necessary to
render the part not taken or conveyed tenantable; and the rent shall be reduced in proportion to
the part of the Premises so taken or conveyed. Landlord may relocate Tenant in accordance with
Section 1.03 either permanently or temporarily in order to accommodate restoration work
performed by Landlord. All compensation awarded for such taking or conveyance shall be the
property of Landlord without any deduction therefrom for any present or future estate of Tenant,
and Tenant hereby assigns to Landlord all its right, title and interest in and to any such award.

ARTICLE 11

ASSIGNMENT; SUBLETTING

     Tenant may not assign this Lease or sublet the Premises or any part thereof without the prior
written consent of Landlord, which consent may be granted or withheld in Landlord’s sole
discretion; and any attempted assignment or subletting without such consent shall be invalid. Any
sale, transfer or conveyance of a majority ownership interest in Tenant shall be deemed an
assignment of this Lease for which Landlord’s prior written consent shall be required pursuant to
this Article 11. At least thirty (30) days prior to the proposed effective date of such assignment
or sublease, Tenant shall provide Landlord a signed original of the assignment or sublease
document. Tenant shall also provide, at Landlord’s request, any information on the proposed
assignee or subtenant that Landlord may require to make a determination of the quality of such
proposed assignee or subtenant. In the event of a permitted assignment or subletting, Tenant shall
nevertheless at all times remain fully responsible and liable for the payment of rent and the
performance and observance of all of Tenant’s other obligations under the terms, conditions and
covenants of this Lease except as may be otherwise provided for herein. No assignment or
subletting of the Premises or any part thereof shall be binding upon Landlord unless such assignee
or subtenant shall deliver to Landlord an instrument (in recordable form, if requested) containing
an agreement of assumption of all of Tenant’s obligations under this Lease. Upon the occurrence of
an Event of Default hereunder, if all or any part of the Premises are then assigned or sublet,
Landlord, in addition to any other remedies provided by this Lease or by law, may, at its option,
collect directly from the assignee or

13

 

subtenant all rent becoming due to Landlord by reason of the assignment or subletting. Any
collection by Landlord from the assignee or subtenant shall not be construed to constitute a
waiver or release of Tenant from the further performance of its obligations under this Lease or
the making of a new lease with such assignee or subtenant.

ARTICLE 12

TRANSFERS BY LANDLORD

     Section 12.01 Sale and Conveyance of the Building. Landlord shall have the right to sell and
convey the Campus and the Building at any time during the Lease Term, subject only to the rights of
Tenant hereunder; and such sale and conveyance shall operate to release Landlord from liability
hereunder after the date of such conveyance.

     Section 12.02
Subordination. Landlord shall have the right to subordinate this Lease to any
mortgage presently existing or hereafter placed upon the Building and/or the Campus by so
declaring in such mortgage, and the recording of any such mortgage shall make it prior and
superior to this Lease regardless of the date of execution or recording of either document;
provided that, following Tenant’s request, Landlord shall cause the holder of such mortgage or
trustee to execute and deliver to Tenant for its execution a subordination, nondisturbance and
attornment agreement which provides, among other things, that so long as no default has occurred
and is continuing beyond the period of time allowed for the remedy thereof under the terms of this
Lease, the holder of the mortgage shall not disturb Tenant’s leasehold interest or possession of
the Premises in accordance with the terms hereof. Within ten (10) days of Landlord’s delivery
thereof to Tenant, Tenant shall execute and deliver to Landlord, without cost, the subordination,
nondisturbance and attornment agreement in such form as reasonably may be deemed necessary or
desirable by Landlord or its mortgagee to confirm the subordination of this Lease. Within ten (10)
days of Landlord’s written request therefor, Tenant also shall deliver to Landlord an Estoppel
Certificate in the form attached hereto as Exhibit G. Tenant shall, in the event any
proceedings are brought for the foreclosure of any such mortgage, attorn to the purchaser upon any
such foreclosure and recognize such purchaser as the landlord under this Lease. Landlord shall not
be required to provide an estoppel certificate to Tenant.

ARTICLE 13

LANDLORD’S LIEN; WAIVER OF LIEN

     Section 13.01 Lien. To secure the payment of all Rent due and to become due hereunder, and
the faithful performance of all of the other covenants of this Lease required by Tenant to be
performed, Tenant hereby grants to Landlord an express contractual lien on, and security interest
in and to, all property, chattels or merchandise owned by Tenant which may be placed in the Lease
Premises (except such part of such property as may be exchanged, replaced or sold from time to
time in the ordinary course of Tenant’s operations), and all proceeds therefrom, and also upon all
proceeds of any insurance which may accrue to Tenant by reason of damage to or destruction of any
such property. All exemption laws are hereby waived by Tenant. Upon the occurrence of an Event of
Default by Tenant, Landlord may, in addition to any other remedies provided herein, enter upon the
Premises and take possession of any and all such goods, wares, equipment, fixtures, furniture,
improvements and other personal property owned by Tenant and situated on the Premises, without
liability for trespass or conversion and sell the same at public or private sale, with or without
having such property at the sale, after giving Tenant reasonable notice of the time and place of
any public sale or of the time after which any private sale is to be made, at

14

 

which sale Landlord or its assigns may purchase the same unless otherwise prohibited by law. Unless
otherwise provided by law, and without intending to exclude any other manner given or otherwise
required by law, the Tenant shall pay any deficiency forthwith. Upon request by Landlord, Tenant
agrees to execute and deliver to Landlord a financing statement in form sufficient to perfect the
security interest of Landlord in the aforementioned property and proceeds thereof under the
provisions of the Uniform Commercial Code in force in the State of Alabama.

     Section 13.02 Waiver of Lien. Notwithstanding the foregoing, in the event the holder of a
security interest or other similar interest or lender to Tenant, or other security holder so
requests, Landlord shall execute a waiver of any statutory and the contractual landlord’s lien set
forth above in Section 13.01 as to any personal property owned or purchased by Tenant or
Tenant’s permitted assignees or subtenants and not permanently affixed to the Premises. In the
event Tenant or Tenant’s permitted assignees or subtenants shall
enter into a bona fide lease
agreement with any lessor whereby such lessor shall lease to Tenant or Tenant’s permitted
assignees or subtenants any tangible personal property to be placed upon or used upon the
Premises, or Tenant or Tenant’s permitted assignees or subtenants finances any equipment before or
after placement on the Premises, and if such lessor or financing institution requests, Landlord
shall execute a waiver of its statutory and contractual landlord’s lien with respect to each such
tangible personal property, furniture, fixtures, or equipment, such waiver to provide that with
respect to any such tangible personal property for which a waiver is issued, the party removing
such tangible personal property (if removable) must repair and restore the Building or other
improvements to its original state.

ARTICLE 14

EVENTS OF DEFAULT; REMEDIES

     Section 14.01 Defaults by Tenant. The occurrence of any one or more of the following events
shall be an “Event of Default” under and breach of this Lease by Tenant:

          A. Tenant shall fail to pay any monthly installment of Rent within ten (10) days of when due;
or Tenant shall fail to pay any other amounts due Landlord from Tenant as additional rent or
otherwise within ten (10) days after Landlord’s delivery of written notice to Tenant that such
payment is due or past due.

          B. Tenant shall fail to perform or observe any term, condition, covenant or obligation
required to be performed or observed by it under this Lease (other than those referenced in
subsection 14.01 (A) hereof) for a period of thirty (30) days after notice thereof from
Landlord.

          C. Tenant shall vacate, abandon or fail to occupy the Premises or any substantial portion
thereof for a period of not less than thirty (30) consecutive days following the Commencement Date.

          D. Tenant shall interfere with any other tenant’s use of such tenant’s leased premises or the
Common Areas of the Building.

          E. A trustee or receiver shall be appointed to take possession of substantially all of
Tenant’s assets in, on or about the Premises or of Tenant’s interest in this Lease (and Tenant does
not regain possession within sixty (60) days after such appointment); Tenant shall make an
assignment for the benefit of creditors; or substantially all of Tenant’s assets in, on or about
the Premises or Tenant’s interest

15

 

in this Lease shall be attached or levied under execution (and Tenant does not discharge the same
within sixty (60) days thereafter).

          F. A petition in bankruptcy, insolvency, or for reorganization or arrangement shall be filed
by or against Tenant pursuant to any federal or state statute (and, with respect to any such
petition filed against it, Tenant fails to secure a stay or discharge thereof within sixty (60)
days after the filing of the same).

     Section 14.02 Remedies of Landlord. Upon the occurrence of any Event of Default set forth in
Section 14.01, Landlord shall have the following rights and remedies, in addition to those
allowed by law, any one or more of which may be exercised at Landlord’s option without further
notice to or demand upon Tenant:

          A. Landlord may re-enter the Premises and cure any Event of Default of Tenant, in which event
Tenant shall reimburse Landlord as additional rent for any costs and expenses that Landlord may
incur to cure such default; and Landlord shall not be liable to Tenant for any loss or damage that
Tenant may sustain by reason of Landlord’s action unless caused by reckless or willful misconduct
on the part of Landlord.

          B. Landlord may
terminate this Lease as of the date of such Event of Default, in which event:
(i) neither Tenant nor any person claiming under or through Tenant shall thereafter be entitled to
possession of the Premises, and Tenant shall immediately thereafter surrender the Premises to
Landlord; (ii) Landlord may re-enter the Premises and dispossess Tenant or any other occupants of
the Premises by force, summary proceedings, ejectment or otherwise, and may remove their effects,
without prejudice to any other remedy that Landlord may have for possession or arrearages in rent
or other sums due hereunder; and (iii) notwithstanding the termination of this Lease, Landlord may
declare all rent that would have been due under this Lease for the balance of the term to be
immediately due and payable, whereupon Tenant shall be obligated to pay the same to Landlord,
together with all loss or damage that Landlord may sustain by reason of such termination, it being
expressly understood and agreed that the liabilities and remedies specified in this Subsection
(B)(1) of Section 14.02 shall survive the termination of this Lease and that all amounts referred
to herein shall not be discounted to present value.

          C. Landlord may, without terminating this Lease, re-enter the Premises and re-let all or any
part of the Premises for a term different from that which otherwise would have constituted the
balance of the Lease Term and for rent and on terms and conditions different from those contained
herein, whereupon Tenant shall be obligated to pay to Landlord as liquidated damages the difference
between the rent provided for herein and that provided for in any lease covering a subsequent
re-letting of the Premises, for the period that otherwise would have constituted the balance of the
Lease Term, together with all of Landlord’s reasonable costs and expenses for preparing the
Premises for re-letting, including all repairs, tenant finish improvements, brokers’ and attorneys’
fees, and all loss or damage that Landlord may sustain by reason of such re-entry and re-letting.
Landlord shall use reasonable efforts to mitigate its damages by reletting the Premises on
commercially reasonable terms; provided, however, that such shall not require Landlord to relet the
Premises on the same terms and conditions as set forth herein.

          D. Landlord may sue for injunctive relief or to recover damages for any loss resulting from
the breach.

          E. In the event that Tenant fails to pay within ten (10) days of the date due and payable any
monthly rental installment of Rent, Tenant shall pay to Landlord, to the fullest extent

16

 

permitted by applicable law, a late charge of four percent (4%) of the amount due and unpaid in
order to compensate Landlord for the costs and expenses of administering, handling and processing
late payments.

          F. In the event Tenant fails to pay within thirty (30) days after the same is due and payable
any monthly rental installment of Rent, or any other sum or charge required to be paid by Tenant to
Landlord as additional rent, such unpaid amount shall bear interest from the due date thereof to
the date of payment at the annual percentage rate of interest (the “Delinquency Interest
Rate”) equal to three percentage points (3%) in excess of
the “Prime Rate” from time to time
published in the Money Rates section of The Wall Street Journal, which rate as published on the
last publication day in any month shall be deemed to be the appropriate reference rate for the
entire next succeeding calendar month; provided, however, that in no event shall the Delinquency
Interest Rate exceed the maximum contract rate of interest from time
to time allowed to be charged
under applicable law. Should The Wall Street Journal cease the publication of its Prime Rate, the
Landlord shall have the right to designate a comparable reference rate.

     Section 14.03 Default by Landlord and Remedies of Tenant. It shall be a default under and
breach of this Lease by Landlord if it shall fail to perform or observe any term, condition,
covenant or obligation required to be performed or observed by it under this Lease for a period of
thirty (30) days after notice thereof from Tenant; provided, however, that if the term, condition,
covenant or obligation to be performed by Landlord is of such nature that the same cannot
reasonably be performed within such thirty (30) day period, such default shall be deemed to have
been cured if Landlord commences such performance within said thirty (30) day period and
thereafter diligently undertakes to complete the same. So long as the Premises remain suitable for
Tenant’s proposed use, Tenant shall not be entitled to terminate this Lease as a result of any
such default.

     Section 14.04 Non-Waiver of Defaults. The failure or delay by either party hereto to exercise
or enforce at any time any of the rights or remedies or other provisions of this Lease shall not
be construed to be a waiver thereof, nor affect the validity of any part of this Lease or the
right of either party thereafter to exercise or enforce each and every such right or remedy or
other provision. No waiver of any default and/or breach of this Lease shall be deemed to be a
waiver of any other default and/or breach. The receipt by Landlord of less than the full rent due
shall not be construed to be other than a payment on account of rent then due, nor shall any
statement on Tenant’s check or any letter accompanying Tenant’s check be deemed an accord and
satisfaction, and Landlord may accept such payment without prejudice to Landlord’s right to
recover the balance of the rent due or to pursue any other remedies provided in this Lease. No act
or omission by Landlord or its employees or agents during the Lease Term shall be deemed an
acceptance of a surrender of the Premises, and no agreement to accept such a surrender shall be
valid unless in writing and signed by Landlord.

     Section 14.05 Attorneys’ Fees. In the event Tenant defaults in the performance or observance
of any of the terms, conditions, covenants or obligations contained in this Lease and the Landlord
employs attorneys to enforce all or any part of this Lease, collect any rent due or to become due
or recover possession of the Premises, Tenant agrees to reimburse the Landlord for the attorneys’
fees incurred thereby once a default is determined to have occurred, whether by judgment or
otherwise.

ARTICLE 15

ENVIRONMENTAL REPRESENTATIONS,

COVENANTS AND INDEMNITIES

     Section 15.01 Hazardous Materials.

17

 

          A. Tenant shall comply with all rules, laws, orders, ordinances, directions,
regulations and requirements pertaining to air and water quality, Hazardous Materials (as
hereinafter defined), waste disposal, air emissions and other environmental matters.

          B. Any Hazardous Materials brought upon, kept or used in or about the Premises by Tenant, its
agents, employees, contractors or invitees shall be used, kept and stored in a manner that complies
with all laws regulating such Hazardous Materials (including without limitation the maintenance of
an MSDS log). No Hazardous Materials shall be brought upon, kept or used in or about the Premises
unless such Hazardous Materials are necessary or useful to Tenant’s business as specified in
Section 4.01.

          C. Tenant shall indemnify, defend and hold Landlord harmless from any and all claims,
judgments, damages, penalties, fines, costs, liabilities or losses (including, without limitation,
diminution in value of the Campus, the Building or the Premises, damages for the loss or
restriction on use of rentable or usable space, damages arising from any adverse impact on
marketing of space in the Building, and sums paid in settlement of claims, attorneys’ fees,
consultant fees and expert fees) that arise during or after the Lease Term in connection with
contamination of the Campus, the Building or the Premises by Hazardous Materials as a result of
Tenant’s use or activities, or the activities of Tenant’s invitees, employees, agents or
contractors. This indemnification of Landlord by Tenant includes, without limitation, costs
incurred in connection with any investigation of site conditions or any clean-up, remedial,
removal or restoration work required by any federal, state or local governmental agency or
political subdivision. Without limiting the foregoing, if the presence of any Hazardous Material
on or about Campus, the Building or the Premises caused or permitted by Tenant, its invitees,
employees, agents, contractors or invitees results in any contamination of the Campus, the Building
or the Premises, Tenant shall promptly take all actions at its sole expense as are necessary to
return the Campus, the Building or the Premises to the condition existing prior to the presence of
any such Hazardous Materials; provided that Landlord’s approval of such actions shall first be
obtained, which approval shall not be unreasonably withheld. The foregoing indemnity and
covenants shall survive the expiration or earlier termination of this Lease.

          D.
As used herein, the term “Hazardous Materials” means any hazardous or toxic
substances, materials or wastes, including, but not limited, to those substances, materials or
wastes listed in the United States Department of Transportation Hazardous Materials Table (49 CFR
172.101) or designated by the United States Environmental Protection Agency as hazardous substances
(40 CFR Part 302) or hazardous waste (40 CFR Part 261), petroleum products, asbestos and such other
substances, materials and wastes that are or become regulated under any applicable state, federal
or local law, rule, regulation or ordinance.

          E. Any toxins, viruses, bacteria, re-agents, select agents, pathogens and similar biological
agents that are infectious, dangerous or hazardous to human health, animal health or plant health
(particularly agricultural interests) or that are regulated by the State of Alabama, or the United
States, including without limitation the Department of Health and Human Services, the Centers for
Disease Control and Prevention, the Food and Drug Administration or the Department of Defense,
(collectively, “Biologicals”) may not be brought upon, kept, stored, used, generated, cultured,
cultivated, propagated or grown in or about the Premises, the Building or the Campus by Tenant, its
agents, employees, contractors or invitees without the prior written consent of Landlord, which may
be withheld or conditioned in Landlord’s sole and absolute discretion. All such permitted
Biologicals shall be used, kept, stored, generated, cultured, cultivated, propagated or grown in a
manner that complies with all laws, rules and regulations regulating such items. Tenant shall
comply with all rules, laws, orders, ordinances,

18

 

directions,
regulations and requirements pertaining to such Biologicals, including without
limitation, the Department of Health and Human Services Select Agent Program. Without limiting the
foregoing, Tenant shall comply at all times with the Laboratory Rules and Regulations applicable to
all laboratory spaces within the Building, which are attached here to
as Exhibit H, as the
same may be modified from time to time by Landlord on reasonable notice to Tenant.

          F. Tenant shall indemnify, defend and hold Landlord harmless from any and all claims,
judgments, damages, penalties, fines, costs, liabilities or losses (including, without limitation,
diminution in value of the Campus, the Building or the Premises, damages for the loss or
restriction on use of rentable or usable space, damages arising from any adverse impact on
marketing of space in the Building and the Campus, and sums paid in settlement of claims,
attorneys’ fees, consultant fees and expert fees) that arise during or after the Lease Term in
connection with the release of any such Biologicals and/or contamination of the Campus, the
Building the Premises or any other property, including the property of third parties by Biologicals
as a result of Tenant’s use or activities, or the activities of Tenant’s invitees, employees,
agents or contractors. This indemnification of Landlord by Tenant includes, without limitation,
costs incurred in connection with any investigation of site conditions or any clean-up, remedial,
quarantine, removal or restoration work required by any federal, state or local governmental agency,
political subdivision or court of law. Without limiting the foregoing, if the presence of any
Biologicals on or about Campus, the Building or the Premises caused or permitted by Tenant, its
invitees, employees, agents, contractors or invitees results in any contamination of the Campus,
the Building or the Premises, Tenant shall promptly take all actions at its sole expense as are
necessary to return the Campus, the Building or the Premises to the condition existing prior to the
presence of any such Biologicals; provided that Landlord’s approval of such actions shall first be
obtained, which approval shall not be unreasonably withheld. The foregoing indemnity and covenants
shall survive the expiration or earlier termination of this Lease.

ARTICLE 16

NOTICES

     All notices to the parties shall be addressed to them at the respective addresses set forth
below, or to such other address, of which either of them, as the case may be, shall notify the
other in the manner stated in this Article for giving notice. The notice shall be effective (a) on
the third (3rd) day after mailing, if sent by certified mail, return receipt requested, first
class postage prepaid; (b) upon delivery (or refusal of delivery or return as unfound), if sent by
hand delivery or by overnight courier; or (c) upon sending with written confirmation of sending,
if sent by facsimile; in all events addressed as follows (or as a party may give notice of in
accordance with this Article):

	 	 	 	 	 
	 

	 	if to Landlord:
	 	Hudson-Alpha Institute for Biotechnology
	 

	 	 	 	601 Genome Way
	 

	 	 	 	Huntsville, Alabama 35806
	 

	 	 	 	Attention: James R. Hudson, Jr., President
	 

	 	 	 	Facsimile: (256)                                        
	 
	 	 	 	 
	 

	 	if to Tenant:
	 	Eurand Pharmaceuticals, Inc
	 

	 	 	 	601 Genome Way, Suite 4100
	 

	 	 	 	Huntsville, Alabama 35806
	 

	 	 	 	Attention: Mike Walters

19

 

	 	 	 	 	 
	 

	 	 	 	Facsimile: (      )                                        

ARTICLE 17

MISCELLANEOUS PROVISIONS

     Section 17.01 Condition of Premises. Tenant acknowledges that neither Landlord nor any agent
of Landlord has made any representation or warranty with respect to the Premises, the Building,
the Building FF&E or any Building services for the conduct of Tenant’s business except as provided
in this Lease.

     Section 17.02 Insolvency or Bankruptcy. In no event shall this Lease be assigned or
assignable by operation of law, and in no event shall this Lease be an asset of Tenant in any
receivership, bankruptcy, insolvency or reorganization proceeding.

     Section 17.03 Choice of Law. This Lease shall be governed by and construed pursuant to the
laws of the State of Alabama.

     Section 17.04 Successors and Assigns. Except as otherwise provided in this Lease, all of the
covenants, conditions and provisions of this Lease shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, personal representatives, and permitted
successors and assigns.

     Section 17.05 Name. Tenant shall not, without the written consent of Landlord, use the name
of the Building or the Campus for any purpose other than as the address of the business to be
conducted by Tenant in the Premises, and in no event shall Tenant acquire any rights in or to such
names.

     Section 17.06 Examination of Lease. Submission of this instrument for examination or
signature to Tenant does not constitute a reservation of or option for lease, and it is not
effective as a lease or otherwise until execution by and delivery to both Landlord and Tenant.

     Section 17.07 Time. Time is of the essence of this Lease and each and all of its
provisions.

     Section 17.08 Defined Terms and Headings. The words “Landlord” and “Tenant” as used herein
shall include the plural as well as the singular. If more than one person is named as Tenant, the
obligations of such persons are joint and several. The headings and titles to the articles and
sections of this Lease are not a part of this Lease and shall have no effect upon the construction
or interpretation of any part hereof.

     Section 17.09 Prior Agreements; Amendments in Writing. This Lease, all of the exhibits
attached hereto, contain all of the agreements of the parties hereto with respect to any matter
covered or mentioned in this Lease, and no prior agreement, understanding or representation
pertaining to any such matter shall be effective for any purpose. No provision of this Lease may
be amended or agreed to except by an agreement in writing signed by the parties hereto or their
respective successors in interest.

     Section 17.10 Payment of and Indemnification for Leasing Commissions. Tenant hereby
acknowledges, represents and warrants to Landlord that Tenant has not engaged a broker in
connection with the negotiation and execution of this Lease, and that no broker or person is
entitled to any leasing commission or compensation as a result of the negotiation or execution of
this Lease. Tenant hereby indemnifies and holds Landlord harmless from any and all liability for
the breach of any such

20

 

representation and warranty on its part and shall pay any compensation to any other broker or
person who may be deemed or held to be entitled thereto.

     Section 17.11 Severability of Invalid Provisions. If any provision of this Lease shall be
held to be invalid, void or unenforceable, the remaining provisions hereof shall not be affected
or impaired, and such remaining provisions shall remain in full force and effect.

     Section 17.12 Services Performed by Landlord. Any services that Landlord is required to
furnish pursuant to the provisions of this Lease may, at Landlord’s option, be furnished from time
to time, in whole or in part, by employees of Landlord, by the managing agent of the Building, or
by one or more third persons; and Landlord further reserves the right to require Tenant to enter
into agreements with such third persons in form and content approved by Landlord for the
furnishing of such services; provided, however, that in no event shall Landlord be relieved of its
obligation to furnish such services as provided for in this Lease.

     Section 17.13 Force Majeure. Landlord shall be excused for the period of any delay in the
performance of any obligation hereunder when such delay is occasioned by causes beyond its
control, including, but not limited to, war, invasion acts of terrorism or other hostility; work
stoppages, boycotts, slowdowns or strikes; shortages of materials, equipment, labor or energy;
man-made or natural casualties; natural disasters, including, but not limited to excessive heat,
excessive cold, excessive rain, snow, hail, wind, ice, tornadoes, tropical storms, hurricanes and
remnants thereof, floods, earthquakes, volcanoes, sinkholes or other acts of God; acts or
omissions of governmental or political bodies; or civil disturbances or riots.

     Section 17.14 Memorandum of Lease. Neither this Lease nor a memorandum thereof shall be
recorded in the Office of the Judge of Probate of Madison County, Alabama.

     Section 17.15 Confidentiality. Tenant shall at all times maintain the confidentiality of the
terms and conditions of this Lease and will direct its officers, employees, agents and
representatives to do the same. Tenant shall not communicate or disclose, whether directly or
indirectly, the terms and conditions of this Lease to any third party (i) other than Tenant’s
lender(s), outside legal counsel, accountants and such other professionals whose knowledge of this
Lease is required in connection with the services to be rendered to Tenant by such professionals,
and (ii) except where such disclosure is required by law.

     Section 17.16 Non-Solicitation. As consideration for Landlord’s leasing the Premises to
Tenant and placing Tenant in a position where Tenant will establish personal relationships with
Landlord’s employees, Tenant covenants and agrees with Landlord that, during the term of the Lease
and for a period of one (1) year immediately following the effective date of the termination or
expiration of the Lease, Tenant shall not directly or indirectly for Tenant or on behalf of
Tenant, or through any other person, persons, firm, partnership, limited liability partnership,
limited partnership, limited liability limited partnership, limited liability company, sole
proprietorship, corporation, company or any other entity, attempt to solicit or hire any of
Landlord’s employees for any purpose whatsoever, without the written consent of Landlord, which
consent may be withheld in Landlord’s sole discretion.

     IN WITNESS WHEREOF, Landlord and Tenant have caused these presents to be executed as of the
date first above written on separate signature pages attached hereto.

21

 

HUDSON-ALPHA LEASE AGREEMENT

(Landlord’s signature page)

	 	 	 	 	 	 	 	 	 
	 	 	LANDLORD:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Hudson-Alpha Institute for Biotechnology	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James R. Hudson, Jr.
 

	 	 
	 

	 	Name:
	 	James R. Hudson, Jr.	 	 
	 

	 	Title:
	 	President	 	 
	 
	 	 	 	 	 	 	 	 
	STATE OF ALABAMA

	 	)	 	 	 	 	 	 
	 

	 	:	 	 	 	 	 	 
	MADISON COUNTY

	 	)	 	 	 	 	 	 

          I,
the undersigned, a notary public in and for said county in said state, hereby certify that,
James R. Hudson, Jr. whose name as President of Hudson-Alpha Institute for Biotechnology, an
Alabama nonprofit corporation, is signed to the foregoing instrument, and who is known to me,
acknowledged before me on this day that, being informed of the contents of said instrument, he, as such officer
and with full authority, executed the same voluntarily for and as the act of said corporation.

          Given under my hand and official seal this 30th day of January, 2008.

	 	 	 	 	 	 	 
	 

	 	 	 	/s/ Robert Laye Buck
 

Notary Public
	 	 
	 
	 	 	 	 	 	 
	[NOTARIAL SEAL]

	 	 	 	My commission expires: September 25, 2011	 	 

22

 

HUDSON-ALPHA LEASE AGREEMENT

(Tenant’s signature page)

	 	 	 	 	 	 	 
	 	 	TENANT	 	 
	 
	 	 	 	 	 	 
	 	 	[ILLEGIBLE]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Michael J. Walter 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Michael J. Walter 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	EVP [ILLEGIBLE]	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	STATE OF ALABAMA
	 	 	)	 	 	 	 	 
	 
	 	 	:	 	 	 	 	 
	MADISON COUNTY
	 	 	)	 	 	 	 	 

          I, the undersigned, a notary public in and for said county in said state, hereby certify that
Michael J. Walter, whose name as Executive VP of Eurand Pharmaceuticals, Inc. a Delaware Corporation,
is signed to the foregoing instrument, and who is known to me, acknowledged before me on this day
that, being informed of the contents of said instrument, s/he, as such officer and with full
authority, executed the same voluntarily for and as the act of said Eurand Pharmaceuticals, Inc.

Given under my hand and official seal this 16th day of January,  2008.

	 	 	 	 	 
	 

	 	/s/ [ILLEGIBLE]
 

Notary Public
	 	 
	 
	 	 	 	 
	[NOTARIAL SEAL]

	 	My commission expires: 1-8-2011	 	 
	 
	 
	 	NOTARY PUBLIC STATE OF ALABAMA AT LARGE 

MY COMMISSION EXPIRES: Jan 8, 2011 

BONDED THRU NOTARY PUBLIC UNDERWRITERS	 

23

 

HUDSON-ALPHA LEASE AGREEMENT

EXHIBIT A — Premises Floor Plan

24

 

HUDSON-ALPHA LEASE AGREEMENT

EXHIBIT B — Building FF&E 

[TO BE ATTACHED PRIOR TO OCCUPANCY]

25

 

HUDSON-ALPHA LEASE AGREEMENT

EXHIBIT C — Building Rules and Regulations

     1. Sidewalks and public portions of the Building, such as entrances, passages, courts,
elevators, vestibules, stairways, corridors or halls, shall not be obstructed or encumbered by
Tenant or used for any purpose other than ingress and egress to and from the Premises.

     2. No curtains, blinds, shades, louvered openings or screens shall be attached to or hung in,
or used in connection with, any window or door of the Premises, without the prior written consent
of Landlord. The sashes, sash doors, skylights, windows, heating, ventilating and air conditioning
vents and doors that reflect or admit light and air into the halls, passageways or other public
places in the Building shall not be covered or obstructed by Tenant, nor shall any bottles, parcels
or other articles be placed on the window sills.

     3. No sign, advertisement, notice or other lettering shall be exhibited, inscribed, painted or
affixed by Tenant on any part of the outside of the Premises or Building or on corridor walls, nor
on any part of the inside of the Premises or Building that are visible from the outside of the
Premises or Building, as the case may be. Signs on entrance door or doors shall conform to
Building standard signs. Signs on doors shall, at Tenant’s expense, be inscribed, painted or
affixed by sign markers approved and provided by Landlord. Landlord may, if Tenant violates this
provision, remove same without any liability, and any expense incurred in such removal shall be
payable by Tenant.

     4. Water closets and other plumbing fixtures shall not be used for any purpose other than for
which they were constructed. No sweepings, rubbish, rags, feminine hygiene products or other
substances shall be thrown therein. All damages resulting from any misuse of the fixtures by,
through or under Tenant shall be borne by Tenant.

     5. Tenant shall not mark, paint, drill into or in any way deface the Premises or Building. No
boring, cutting or stringing of wires or laying of linoleum or other similar floor coverings shall
be permitted, except with the prior written consent of the Landlord and as the Landlord may direct.

     6. No bicycles, vehicles or animals (except seeing eye dogs) shall be brought into or kept in
or about the Premises. No cooking shall be done or permitted by Tenant on the Premises except in
conformity with law and then only in the utility kitchen, if any, as set forth in Tenant’s layout,
which is to be used by Tenant’s employees and guests for heating beverages and light snacks. Tenant
shall not cause or permit any unusual or objectionable odors to be produced upon or permeate from
the Premises.

     7. Tenant shall not make, or permit to be made, any disturbing noises or disturb or interfere
with occupants of the Building or neighboring buildings or premises or those having business with
them.

     8. Neither Tenant, nor any of Tenant’s agents, employees, contractors, licensees or invitees,
shall at any time put up or operate fans or electrical heaters or bring or keep upon the Premises
flammable, combustible or explosive fluid, or chemical substance, except in connection with
the permitted use of the Premises, in which case all such fluids, chemicals, and substances shall
be transported, stored, used and disposed of in compliance with all applicable laws and
regulations.

26

 

     9. No additional locks or bolts of any kind shall be placed upon any of the doors or windows
by Tenant, nor shall any changes be made in existing locks or the mechanism thereof, without the
prior written approval of Landlord and unless and until a duplicate key or access card/badge is
delivered to Landlord. Tenant shall, upon termination of its tenancy, restore to Landlord all
keys, access cards/badges of offices, labs, storage or other rooms and toilet rooms, either
furnished to, or otherwise procured by, Tenant. Tenant shall pay to Landlord the cost of any
replacement keys.

     10. All moves in or out of the Premises, or the carrying in or out of any safes, freight,
furniture or bulky matter of any description, must take place during the hours which Landlord
determines for such activity from time to time. Only the Building freight elevator shall be used
for such purposes. Tenant will ensure that movers take necessary measures required by Landlord to
protect the Building (e.g., windows, carpets, walls, doors and elevator cabs) from damage.
Landlord reserves the right to inspect all freight to be brought into the Building and to exclude
from the Building all freight which violates these Rules or the Lease.

     11. Tenant shall not place any furniture, accessories or other materials on any balconies
located within or adjacent to the Premises other than furniture supplied by Landlord specifically
for such purpose without having obtained Landlord’s express written approval thereof in each
instance.

     12. Landlord shall have the right to prohibit advertising by Tenant which in Landlord’s
opinion tends to impair the reputation of the Building or its desirability as a building for
offices. Upon written notice from Landlord, Tenant shall refrain from or discontinue such
advertising.

     13. Landlord reserves the right to exclude from the Building at all times other than business
hours all persons who do not present a pass to the Building signed by Tenant. Tenant shall be
responsible for all persons to whom it issues such a pass and shall be liable to Landlord for all
acts of such persons.

     14. The Premises shall not be used for lodging or sleeping without the express written consent
of Landlord.

     15. Landlord shall respond to Tenant service requests only after application at the
management office for the Building.

     16. Canvassing, soliciting and peddling in the Building are prohibited, and Tenant shall
cooperate to prevent the same.

     17. There shall not be used in any space, or in the public halls of the Building, either by
Tenant or by its jobbers or others, in the delivery or receipt of merchandise, any hand trucks,
except those equipped with rubber tires and side guards. No hand trucks, mail carts or mail bags
shall be used in passenger elevators.

     18. All paneling or other wood products not considered furniture shall be of fire retardant
materials. Before installation of such materials, certification of the materials’ fire retardant
characteristics shall be submitted to Landlord, in a manner satisfactory to Landlord.

     19. Tenant shall not employ any persons other than the janitors retained by Landlord (who will
be provided with pass-keys into the offices, labs, or other rooms as appropriate) for the purpose
of cleaning the Premises. Landlord shall not be responsible to Tenant for any loss of property
from the Premises, or for any damage done to furniture or other effects of Tenant by the janitor or
any of its employees.

27

 

     20. No painting shall be done, nor shall any alterations be made, to any part of the Building
by putting up or changing any partitions, doors or windows, nor shall there be any nailing, boring
or screwing into the woodwork or walls, nor shall any connection be made to the electric wires or
electric fixtures, without the consent in writing on each occasion of Landlord. No sunscreen or
other films shall be applied to the interior surface of any window glass. All glass, locks and
trimmings in or upon the doors and windows of the Building shall be kept whole, and when any part
thereof shall be broken, the same shall be immediately replaced or repaired and put in order at
Tenant’s expense under the direction and to the satisfaction of Landlord, and shall be left whole
and in good repair.

     21. Landlord will post on the Building directories one name only for Tenant at no charge. All
additional names which Tenant shall desire put upon said directories must be first consented to by
Landlord, and if so approved, a charge to Tenant will be made for each additional listing as
prescribed by Landlord to be paid to Landlord by Tenant.

     22. Landlord reserves all vending rights, and in no event shall any vending machines be
visible from the exterior of the Premises. Request for such service shall be made to Landlord.

     23. Parking facilities for the Building, if any, shall be used by vehicles that may occupy a
standard parking area only. The use of such parking facilities shall be limited to normal business
parking and shall not be used for overnight parking.

     24. Each Tenant expressly understands and agrees that Landlord expressly reserves the right to
grant or deny access (to the Building or any portion thereof, including without limitation, any
Tenant’s Premises) to any telecommunications, cable, wireless, internet or other service provider
whatsoever, and that no Tenant shall have the right to demand or require Landlord to grant such
access to any such telecommunications service provider.

     25. Smoking shall not be permitted anywhere in the Building or on the Campus.

     26. Landlord reserves the right to install a security access system and/or security camera(s)
around the Building and Tenant agrees to comply with all reasonable rules and regulations of
Landlord regarding such systems and shall not interfere with the operation of the same.

     27. Landlord reserves the right to modify or delete any of the foregoing Rules and to make
such other and reasonable rules and regulations as in its judgment may from time to time be needed
for the safety, care and cleanliness of the Premises and the Building, and for the preservation of
good order therein. Landlord shall not be responsible to any tenant for the non-observance, or
violation, of any of these Rules by other tenants.

28

 

HUDSON-ALPHA LEASE AGREEMENT

EXHIBIT D — Parking Rules and Regulations

     The following rules, regulations and rights (these “Rules,” collectively) apply to the use of
all Parking Areas:

     1. Tenant and its employees, agents, contractors, and invitees may park their motor vehicles
in those portions of the Parking Areas designated by Landlord from time to time as unreserved
tenant parking areas (the “Unreserved Parking Areas”).

     2. Only Tenant and its employees, agents, invitees, and visitors of Tenant who are physically
handicapped and who exhibit proper handicapped car tags may park their motor vehicles in those
portions of the Parking Areas designated by Landlord from time to time as handicapped parking areas
(the “Handicapped Parking Areas”).

     3. Parking in the Unreserved Parking Areas, the Visitor Parking Areas, and the Handicapped
Parking Areas shall be on a non-exclusive, “as-available” basis.

     4. No representation or warranty is made by Landlord as to the number or location of parking
spaces comprising the Parking Areas, or any portion thereof.

     5. Motor vehicles shall only be parked in striped parking spaces located within the Parking
Areas and no motor vehicles shall be parked in any other location within the Property and/or the
Campus.

     6. Not more than one motor vehicle may be parked on each parking space and no motor vehicle
may be parked on more than one parking space.

     7. Parking Areas shall not be used for any purpose other than the parking of permitted motor
vehicles thereon. No commercial activity shall be conducted from the Parking Areas. The foregoing
rule shall not restrict the Landlord’s right to use the Parking Areas for any purpose and for
special events sponsored or hosted by Landlord from time to time.

     8. No RV’s, boats or trailers shall be parked in the Parking Areas. No repairs (other than
emergency repairs) or washing of motor vehicles shall be permitted in the Parking Areas.

     9. Tenant, its employees, agents, guests, visitors, and invitees assume full responsibility
and Landlord shall have no liability for (a) all loss, damage, injury, or death caused to the
person or property of third parties by reason of their use of the Parking Areas; and (b) protecting
their motor vehicles against theft, vandalism, and damage and for protecting their person against
injury and assault by reason of their use of the Parking Areas.

     10. Tenant shall indemnify Landlord against all loss, damage, cost, and expense (including
attorney’s fees) sustained by Landlord by reason of the use of the Parking Areas by Tenant, its
employees, agents, guests, visitors, and invitees, or by violation of the Rules by any of said
persons, other than damage caused by the negligence of Landlord, or its Agent.

     11. Tenant expressly agrees that Landlord shall have the right to tow motor vehicles of
Tenant

29

 

and its employees, agents, guests, and visitors which are parked in violation of these Rules, and
all costs associated therewith shall be borne by Tenant.

     12. A violation of these Rules shall entitle Landlord to revoke the parking privileges of the
offending party, in addition to other rights and remedies available to Landlord.

     Landlord reserves the right from time to time without notice to Tenant to (a) change the
location or configuration of the Parking Areas, or any portion thereof; (b) change the number of
parking spaces located within the Parking Areas, or any portion thereof; (c) install systems to
control and monitor parking in the Parking Areas, or any portions thereof, including without
limitation, a parking gate and identification card system; (d) utilize parking guards or
attendants to supervise and control parking within the Parking Areas and to enforce these Rules;
(e) have full access to the Parking Areas (including the right to close or alter the means of
access to the Parking Areas, or portions thereof) to make repairs and alterations thereto, to
prevent a taking by adverse possession or prescription or to comply with applicable legal and
governmental requirements; (f) modify these Rules by posting notices thereof in the Common Areas or
by other means deemed appropriate by Landlord; (g) tow motor vehicles parked in violation of these
Rules; and (h) enforce these Rules by appropriate legal action.

30

 

HUDSON-ALPHA LEASE AGREEMENT

EXHIBIT E — Commencement Date Agreement

     Agreement made this 16th day of January, 2008, between Hudson-Alpha Institute
for Biotechnology (hereinafter referred to as “Landlord”), and Eurand (hereinafter
referred to as “Tenant”).

     WHEREAS, Landlord and Tenant entered into a lease dated ____, 2008 (hereinafter referred to as
the “Lease”) for 5429 square feet of Usable Area on the 4th floor of the
building located at 601 Genomeway;

     NOW, THEREFORE, pursuant to the provisions of Section 2.04 of the Lease, Landlord and Tenant
mutually agree to as follows:

	1.	 	The Commencement Date of the Lease Term is February 1, 2008. The Rent Commencement
date of the Lease is August 1, 2008. The Expiration Date of the Lease Term is
February 1, 2013.

	2.	 	Tenant is in possession of, and has accepted, the Premises demised by the
Lease, and acknowledges that all the work to be performed by Landlord in the Premises as
required by the terms of the Lease has been satisfactorily completed [, excepting punchlist
items]. Tenant further certifies that all conditions of the Lease required of Landlord as
of this date have been fulfilled and there are no defenses or off-sets against the enforcement
of the Lease by Landlord.

     IN WITNESS, WHEREOF, the parties hereto have signed and sealed this Agreement, the
16th day of January, 2008.

	 	 	 	 	 
	LANDLORD:	 	 
	 
	 	 	 	 
	Hudson-Alpha Institute for Biotechnology	 	 
	 
	 	 	 	 
	By:

	 	/s/ James R. Hudson Jr.	 	 
	 

	 	 	 	 
	Name:

	 	James R. Hudson Jr.	 	 
	Title:

	 	President	 	 
	 
	 	 	 	 
	TENANT	 	 
	 
	 	 	 	 
	/s/ [ILLEGIBLE]	 	 
	 
	 	 	 	 
	By:

	 	/s/ Michael J. Walters	 	 
	 

	 	 	 	 
	Title:

	 	EVP [ILLEGIBLE]	 	 
	 

	 	 	 	 

31

 

HUDSON-ALPHA LEASE AGREEMENT

EXHIBIT F — Requirements and Specifications for Leasehold Improvements

[NONE]

32

 

HUDSON-ALPHA LEASE AGREEMENT

EXHIBIT G — Estoppel Certificate

	 	 	 
	PREMISES:

	 	Suite ___,                                        Building

                                                             

Huntsville, Alabama___
	 
	 	 
	LEASE DATED:

	 	                    , 200___
	 
	 	 
	LANDLORD:

	 	Hudson-Alpha Institute for Biotechnology
	 
	 	 
	TENANT:

	 	                                                            

     The undersigned, the tenant under the above lease, certifies to, the mortgagee or purchaser of
the above premises, that said lease is presently in full force and effect and unmodified except as
indicated at the end of this certificate; that the term thereof has commenced and full rental is
now accruing thereunder; that the undersigned has accepted possession of said premises and that any
improvements required by the terms of said lease to be made by the Landlord have been completed to
the satisfaction of the undersigned; that no rent under said lease has been paid more than thirty
(30) days in advance of its due date; that the undersigned, as of this date, has no charge, lien or
claim of offset under said lease or otherwise against rents or other charges due or to become due
thereunder; and that there are no presently existing defaults on the part of the Landlord under the
lease (except as indicated at the end of this certificate, if any).

     Dated                                         , 200___.

	 	 	 	 	 
	[INSERT MODIFICATIONS:	 	 
	 
	 	 	 	 
	 
	 
	 	 	 	 
	 
	 

	 	 	 	]
	 	 	 

	 	 	 	 	 
	 	 	TENANT:
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	 
	 

	 	 	 	 
	 

	 	Title:
	 	 
	 

	 	 	 	 

33

 

HUDSON-ALPHA LEASE AGREEMENT

EXHIBIT H — Laboratory Rules and Regulations

TO BE DETERMINED

34exv4w18

 

Exhibit 4.18

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.

 

DEVELOPMENT

AND

LICENSE AGREEMENT

between

Eurand, Inc.

And

SmithKline Beecham Corporation d/b/a GlaxoSmithKline

For a

***

 

CONFIDENTIAL

 

 

DEVELOPMENT AND LICENSE AGREEMENT

PREAMBLE

     THIS DEVELOPMENT AND LICENSE AGREEMENT dated as of the 21st day of April 2006, (the
“Effective Date”) is by and between Eurand, Inc., a Nevada corporation with its principal
offices at 845 Center Drive, Vandalia, Ohio 45377 (“Eurand”) and SmithKline Beecham
Corporation d/b/a GlaxoSmithKline, a Pennsylvania corporation with its principal offices at One
Franklin Plaza, 200 North 16th Street, Philadelphia, Pennsylvania 19102 (“GSK”).
Eurand and GSK are sometimes collectively referred to herein as the “Parties” and
separately as a “Party”.

     A. Eurand is the owner or licensee of the Eurand Intellectual Property Rights (as hereinafter
defined), and has the right to grant certain licenses or sublicenses thereunder.

     B. GSK desires that Eurand undertake a project to develop Product (as hereinafter defined)
that is covered under the Eurand Intellectual Property Rights.

     C. GSK also desires to obtain an *** license from Eurand under the Eurand Intellectual
Property Rights to use, package, sell, offer for sale and import Product in the Field (as
hereinafter defined) in the Territory (as hereinafter defined) on the terms and conditions set
forth in this Agreement (as hereinafter defined).

     D. Eurand is willing to undertake such a development project relating to Product and to grant
such a license on the terms and conditions set forth in this Agreement.

     E. Eurand and GSK will enter into supply agreements pursuant to which Eurand will manufacture
and supply GSK’s total clinical and commercial requirements for bulk tablets of Product.

     NOW, THEREFORE, in consideration of the agreements and covenants hereinafter set forth and
intending to be legally bound hereby, Eurand and GSK hereto covenant and agree as follows:

1 DEFINITIONS: The following capitalized terms shall have the following meanings when used in this
Agreement and all terms defined in the singular will have the same meanings when used in the plural
(and vice versa), unless otherwise specified. Further, the word “including” or any
variation thereof means “including without limitation” and the word “including” or any
variation thereof will not be construed to limit any general statement which it follows to the
specific or similar items or matters immediately following it.

     1.1 “AAA” will have the meaning set forth in Section 14.14.1.

     1.2 “Abandoned Eurand Patent Rights” will have the meaning set forth in Section 9.4.2.

     1.3 “Abandoned GSK Invention Patent Rights” will have the meaning set forth in Section
9.4.1.

     1.4 “Act” means the United States Food, Drug and Cosmetic Act, as amended, and the
regulations promulgated thereunder from time to time.

     1.5 “Action” will have the meaning set forth in Section 9.7.2.

1

 

     1.6 An “Affiliate” of an Entity means any other Entity, directly or indirectly
controlling, controlled by or under common control with such Entity and, for purposes of this
Section 1.6 only, “control” means (i) direct or indirect beneficial ownership of fifty percent
(50%) or more (or such lesser percentage which is the maximum allowed to be owned by a foreign
corporation in a particular jurisdiction) of the voting stock or shares entitled to vote on or
direct the affairs of such Entity, or (ii) the possession, directly or indirectly, of the right or
power to direct or cause the direction of the policies or management of such Entity, whether by
ownership of stock, by contract or otherwise.

     1.7 “Agreement” means this Development and License Agreement, together with all
exhibits annexed hereto.

     1.8 “Applicable Laws” means the applicable provisions of any and all national,
supranational, regional, state and local laws, treaties, statutes, rules, regulations,
administrative codes, ordinances, judgments, decrees, directives, injunctions, orders, permits
(including the Regulatory Approvals) of or from any court, arbitrator or governmental agency or
authority having jurisdiction over or related to the subject item.

     1.9 “Business Day” means any day other than a day which is a Saturday, a Sunday or any
day banks are authorized or required to be closed in Ohio, Pennsylvania, Italy or the United
Kingdom.

     1.10 “Calendar Quarter” means each of the consecutive three (3) month periods ending
March 31, June 30, September 30, and December 31; provided, however, that the first
(1st) Calendar Quarter under this Agreement will be the period beginning on the
Effective Date and ending on the end of the Calendar Quarter in which the Effective Date is
encompassed.

     1.11 “Calendar Year” means, for the first Calendar Year, the period beginning on the
Effective Date and ending December 31, 2006, and for each Calendar Year thereafter, each successive
period beginning on January 1 and ending twelve (12) consecutive calendar months later on December
31; provided, however, that the last Calendar Year of the Term will be the period beginning on
January 1 and ending on the effective date of expiration or termination of the Term.

     1.12 “cGMP” or “GMP” means current Good Manufacturing Practices as determined
at any given time by the FDA, based on the authority and regulations set forth in Parts 210 and 211
of the United States Code of Federal Regulations and based on all applicable FDA rules,
regulations, guides and guidances, as amended from time to time and in effect during the Term.

     1.13 “Clinical Studies” means any testing, use or administration of the Product in
humans in preparation for obtaining Regulatory Approvals to commercialize Product in the Field in
the Territory, including, but not limited to, bioequivalence studies, pharmacokinetic studies,
organoleptic evaluation studies, and/or clinical efficacy studies.

     1.14 “Clinical Supply Agreement” will have the meaning set forth in Section 6.2.

     1.15 “Commercially Reasonable” or “Commercially Reasonable Efforts” means
efforts and resources normally used by a Party to accomplish a similar objective for a
pharmaceutical product owned by it or to which it has rights, which is of similar market potential at a
similar stage in its development or product life, taking into account issues of patent coverage,
safety and efficacy, product profile, the competitiveness of the marketplace, the proprietary
position of the compound or

2

 

product, the regulatory structure involved, the profitability of the
applicable product, and other relevant factors.

     1.16 “Commercial Supply Agreement” will have the meaning set forth in Section 6.3.

     1.17 “Competing Business Entity” will have the meaning set forth in Section 10.6.3.

     1.18 “Competitive Product” means any *** (i.e., *** any s***, *** or *** component to
the drug ***) orally disintegrating, dispersing or dissolving dosage labeled as containing any
amount of the Compound, whether or not as the sole active pharmaceutical ingredient, other than
Product. For the avoidance of doubt, the term “Competitive Product” will in no event include, or
be deemed to include, any ***, *** or *** pharmaceutical formulation or composition containing ***.

     1.19 “Compound” means ***, the compound that is known by the generic name ***, and its
*** and ***.

     1.20 “Confidential Information” means any and all information disclosed to or obtained
by Recipient pursuant to or in connection with the negotiation, execution, delivery and performance
of this Agreement or the consummation of the transactions contemplated hereby and any and all
information regarding, related to, or associated with any or all elements of this Agreement,
including the development, manufacture and/or commercialization of Product in the Field in and
outside of the Territory or any aspect thereof, or each Party’s operations that is disclosed by the
Disclosing Party to the Recipient; provided, however, that Confidential Information will not
include information which: (i) at the time of disclosure is in the public domain; (ii) after
disclosure becomes part of the public domain, except through breach of this Agreement; (iii) the
Recipient can demonstrate by reasonable proof was in its possession prior to the time of disclosure
by the Disclosing Party hereunder, and was not acquired directly or indirectly from the Disclosing
Party; (iv) the Recipient can demonstrate by reasonable proof was developed by or on behalf of
Recipient independent of and without reference to the Disclosing Party’s Confidential Information;
or (v) becomes available to Recipient from a Third Party who did not acquire such information
directly or indirectly from the Disclosing Party and who is not otherwise prohibited from
disclosing such information.

     1.21 “Confidentiality Agreements” will have the meaning set forth in Section 13.1.9.

     1.22 “Control” means, with respect to the subject item, the ability and authority of a
Party or its Affiliate, whether arising by ownership, possession or pursuant to a license or
sublicense, to grant licenses or sublicenses to the other Party under or to the subject item as
specified in this Agreement, without breaching the terms of any agreement with any Third Party
and/or its Affiliates.

     1.23 “CTM” (i.e., “clinical trial material”) means presentations of Product
manufactured by Eurand pursuant to the Clinical Supply Agreement for use by or on behalf of GSK in
Clinical Studies.

     1.24 “CTM Specifications” means with respect to any CTM, all specifications for
materials, approved suppliers, formula, manufacturing, analytical and testing procedures, release
and other processes relating to the manufacture of the CTM, which have been mutually agreed by the
Parties and made part of the Clinical Supply Agreement.

     1.25 “Cure Period” will have the meaning set forth in Section 11.2.2.

3

 

     1.26 “Data” means all data and information generated by or on behalf of either Party
during the performance of their respective activities under the Program, including any data
generated by or on behalf of GSK during the conduct of any Clinical Studies.

     1.27 “Disclosing Party” will have the meaning set forth in Section 13.1.1.

     1.28 “DMF” means the Drug Master File developed and filed with Regulatory Authorities
by Eurand which relates to and describes the composition and manufacture of the Product.

     1.29 “Drug Substance” means Compound which is manufactured by or on behalf of GSK and
which is used by Eurand in the manufacture of Product, including CTM.

     1.30 “Drug Substance Specifications” means the GSK provided United States
specifications for the Drug Substance.

     1.31 “Effective Date” will have the meaning set forth in the Preamble.

     1.32 “Entity” means any individual, partnership, association, joint venture, limited
liability company, corporation or other business entity, or any government or regulatory,
administrative or political subdivision or agency, department or instrumentality thereof.

     1.33 “Eurand” will have the meaning set forth in the Preamble.

     1.34 “Eurand Auditor” will have the meaning set forth in Section 8.4.3(i).

     1.35 “Eurand Data” means Data relating solely to (i) the ODT Technology and (ii) the
DMF as it relates solely to the ODT Technology.

     1.36 “Eurand Development Activities” means those activities to be carried out by
Eurand in connection with the Program, which activities are conducted in accordance with the
Proposal and the terms of this Agreement, and as directed by the Steering Committee.

     1.37 “Eurand Intellectual Property Rights” means Intellectual Property Rights
Controlled by Eurand *** on the Effective Date and at any time during the Term relating to the ODT
Technology, including, without limitation, the Eurand Patent Rights, Eurand Know-How, and Eurand
Trademarks relating to the ODT Technology, but excluding any GSK Intellectual Property Rights.

     1.38 “Eurand Inventions” will have the meaning set forth in Section 9.3.4.

     1.39 “Eurand Know-How” means any and all Know-How that is Controlled by Eurand *** on
the Effective Date or at any time during the Term (including, without limitation, any Know-
How to which Eurand *** under the ***), which is used in the making, having made, use, sale,
offering for sale and/or import of the Formulation and/or Product, but excluding any GSK Know-How.

     1.40 “Eurand Patent Rights” means any and all Patent Rights Controlled by Eurand ***
(including, without limitation, any Patent Rights to which Eurand and/or its Affiliate obtained
rights under the ***), which include one or more claims that, but for this Agreement, would be
infringed by the making, having made, use, sale, offering for sale or import of the Formulation
and/or Product, *** patent applications filed by or on behalf of Eurand *** pursuant to Section ***
or *** by *** to

4

 

Section ***, but *** the ***. A list of the Patent Rights included within the
Eurand Patent Rights as of the Effective Date is attached hereto as Exhibit A, and *** such
Exhibit ***, or *** after ***.

     1.41 “Eurand Publication” will have the meaning set forth in Section 13.3.1.

     1.42 “Eurand Trademarks” means all Trademarks Controlled by Eurand *** on the
Effective Date or at any time during the Term, which are used in connection with the ODT
Technology. A list of the Eurand Trademarks as of the Effective Date is attached hereto as
Exhibit B, and *** such Exhibit ***, or *** after ***.

     1.43 “Existing Eurand Patent Rights” will have the meaning set forth in Section 9.1.

     1.44 “FDA” means the United States Food and Drug Administration or any successor
agency thereto.

     1.45 “Field” means the treatment, palliation and/or treatment of all human disease.

     1.46 “First Commercial Sale” means the date of the first commercial sale of Product in
the Field in the Territory by GSK and/or its Affiliates or sublicensees to distributors,
wholesalers or other customers in a quantity sufficient for the distribution of such Product to
pharmacies or other commercial distribution channels for sale in the Field in the Territory. Sales
of Product for compassionate use, named patient use, clinical trial purposes or other similar uses,
including, without limitation, for any Clinical Studies, will not constitute a First Commercial
Sale.

     1.47 “Force Majeure Event” means any cause or causes which wholly or partially prevent
or delay the performance of obligations arising under this Agreement and which are not reasonably
within the control of the non-performing Party and cannot be prevented by the non-performing Party
through the use of Commercially Reasonable Efforts, including fire, floods, epidemics, explosions,
embargoes, war, acts of war (whether war is declared or not), insurrections, riots, civil
commotions, *** or other ***, acts of God or ***or *** in *** by any governmental authority
(including any ***).

     1.48 “Formulation” means the formulation developed pursuant to the Program which (i)
identifies and selects the ingredients (including the Drug Substance) for inclusion in the Product,
(ii) sets forth the quantities of such ingredients, and (iii) ***and ***for ***and ***such *** with
the ODT Technology to form the ***.

     1.49 “GSK” will have the meaning set forth in the Preamble.

     1.50 “GSK Auditor” shall have the meaning set forth in Section 8.4.3(ii).

     1.51 “GSK Data” means any and all Data other than Eurand Data.

     1.52 “GSK Development Activities” will have the meaning set forth in Section 3.2.

     1.53 “Generic Equivalent” means on a product by product basis, any (i) FDA approved
prescription generic *** product for human use that is supplied or manufactured by or for *** or
any *** (or any of their respective Affiliates) under *** for sale in the Territory as a generic
equivalent to any strength (including, without limitation, the ***mg, ***mg, ***mg, or ***mg
strengths) of *** approved under ***, and (ii) FDA approved prescription generic *** *** product
for human use that

5

 

is supplied or manufactured by or for *** or any *** *** (or any of their
respective Affiliates) under *** for sale in the Territory as a generic equivalent to any strength
(including, without limitation, the ***mg or ***mg strengths) of *** approved under ***.

     1.54 “GSK Intellectual Property Rights” means Intellectual Property Rights Controlled
by GSK and/or its Affiliates or a Third Party on behalf of GSK or its Affiliates on the Effective
Date or at any time during the Term, including the GSK Patent Rights, GSK Know-How, GSK Trademarks
and GSK Program Rights, but excluding the Eurand Intellectual Property Rights.

     1.55 “GSK Inventions” will have the meaning set forth in Section 9.3.3.

     1.56 “GSK Invention Patent Rights” will have the meaning set forth in Section 9.3.3.
GSK will provide Eurand with a list of any GSK Invention Patent Rights, which GSK will update at
*** during the Term or *** after ***.

     1.57 “GSK Know-How” means any and all Know-How that is Controlled by GSK or its
Affiliates or a Third Party on behalf of GSK or its Affiliates on the Effective Date or at any time
during the Term which is directly related to or used in the making, having made, use, sale,
offering for sale and import of the Compound, Drug Substance, the Formulation and/or the Product,
including the GSK Data and Know-How included in the GSK Program Rights, but excluding any Eurand
Know-How.

     1.58 “GSK Patent Rights” means any and all Patents Rights Controlled by GSK and/or its
Affiliates as of the Effective Date or during the Term, which include one or more claims that, but
for this Agreement, would be infringed by the making, having made, use, sale, offering for sale and
import of the Compound, Drug Substance, the Formulation and/or Product, including any GSK Invention
Patent Rights filed by or on behalf of GSK or its Affiliates pursuant to Section *** or assumed by
GSK under Section *** but excluding the Eurand Patent Rights. A list of the Patent Rights included
within the GSK Patent Rights as of the Effective Date is attached hereto as Exhibit C.

     1.59 “GSK Program Rights” means any and all Intellectual Property Rights and ***
developed or generated by or on behalf of either Party after the Effective Date and in the
performance of its respective obligations under the Program and this Agreement, including (i)
Intellectual Property Rights relating to the ***, and/or ***, (ii) the GSK Data, and (iii) the GSK
Invention Patent Rights and the *** under Section ***, but in each case specifically excluding the
ODT Technology.

     1.60 “GSK Publication” will have the meaning set forth in Section 13.3.2.

     1.61 “GSK Trademarks” will have the meaning set forth in Section 4.3.

     1.62 “Intellectual Property Rights” means Patent Rights, Know How, Trademarks and any
and all other forms of intellectual property rights whatsoever.

     1.63 “Inventions” will have the meaning set forth in Section 9.3.2.

     1.64 “Know-How” means trade secrets and inventions (patentable or otherwise), and
proprietary data, formulations, methods, technology and information directly related to or used in
the subject item but which are not disclosed in any published Patent Rights claiming the subject
item,

6

 

including ideas, designs, processes, techniques, innovations, discoveries, improvements,
and/or analytical methodology used in development, testing, analysis, manufacture and/or medical,
clinical, toxicological testing as well as other scientific data.

     1.65 “***” means ***. For the avoidance of doubt, *** is not an Affiliate of Eurand.

     1.66 “*** Agreement” means the *** Agreement dated as of December 19, 2002, by and
between *** and Eurand Pharmaceuticals Limited, an Affiliate of Eurand.

     1.67 “*** Patent” means U.S. Patent *** and any reissues, reexaminations or extensions
thereof.

     1.68 “*** Patent Expiration Date” means ***, or if GSK or its Affiliates ***, then
***. For the purposes of this definition, the term “***” means the *** to GSK (or its
Affiliate) by the FDA for *** related to Product as applied to *** and ***.

     1.69 “Materials Safety Data Sheet” means a document which sets forth the handling and
use standards for hazardous materials.

     1.70 “Merger” or “Merging” will have the meaning set forth in Section 10.6.2.

     1.71 “Milestone Events” will have the meaning set forth in Section 8.2.

     1.72 “Milestone Payments” will have the meaning set forth in Section 8.2.

     1.73 “NDA” means a New Drug Application or a Supplemental New Drug Application, as
applicable, which is filed with the FDA in accordance with the Act in order to gain the FDA’s
approval to market a pharmaceutical product in the Territory for the indications set forth in the
New Drug Application or Supplemental New Drug Application, as applicable.

     1.74 “NDA No. ***” means NDA No. ***, including all amendments and supplements
thereto.

     1.75 “NDA No. ***” means NDA No. ***, including all amendments and supplements
thereto.

     1.76 “New Country License Agreement” will have the meaning set forth in Section 9.5.4.

     1.77 “Net Sales” means the gross invoiced sales of Product in the Field in the
Territory by GSK, its Affiliates or any of its sublicensees to Third Parties on an arms-length
basis less any of the following charges or expenses that are incurred in connection with such gross
sales:

          1.77.1 *** relating to Product, including *** and ***

          1.77.2 and *** paid by ***, its Affiliates or sublicensees in relation to Product and any
other equivalent governmental charges imposed upon the ***, *** or *** of Product;

          1.77.3 government-mandated and other rebates (such as those in respect of any state or federal
Medicare, Medicaid or similar programs);

7

 

          1.77.4 customary trade, quantity and cash discounts allowed on Product;

          1.77.5 *** or *** to *** on account of *** Product;

          1.77.6 customary Product rebates and Product charge backs *** to ***; and

          1.77.7 the lesser of (i) *** percent (2%) of the *** amount billed or invoiced on sales of
Product or (ii) the actual amount of any write-offs for bad debt relating to such sales of Product.

In the event that non-monetary consideration is received for any Product, Net Sales will be
calculated based on the average price charged for such Product during the preceding Calendar
Quarter, or in the absence of such sales, the fair market value of the Product, as determined by
the Parties in good faith.

Net Sales will be calculated in accordance with the *** consistently applied. The Parties
acknowledge and agree that this *** will be *** appropriate to reflect changes to *** brought about
by *** or *** of ***, *** or *** or changes in Applicable Laws.

     1.78 “Non-Participating Party” will have the meaning set forth in Section 9.7.2.

     1.79 “Non-Competing Business Entity” will have the meaning set forth in Section
10.6.3.

     1.80 “ODT Technology” means the proprietary oral dissolve drug delivery and related
technology Controlled by Eurand and/or its Affiliates as of the Effective Date or during the Term,
including, without limitation, the Microcaps® taste masking microencapsulation technology and the
AdvaTab® oral disintegrating tablet technology and, in each case, any manufacturing processes
relating thereto.

     1.81 “Participating Party” will have the meaning set forth in Section 9.7.2.

     1.82 “Party” or “Parties” will have the meaning set forth in the Preamble.

     1.83 “Patent Rights” means patents and patent applications including continuations,
continuations-in-part, divisions, patents of addition, patents issuing from reissue,
re-examination, renewal or extension proceedings, utility models, all Supplemental Protection
Certificates and any foreign counterparts thereof, including PCTs.

     1.84 “Potential Contaminants” will have the meaning set forth in Section 3.3.2(vii).

     1.85 “Pre-Registration Activities” means those activities that are necessary
prerequisites to the preparation and filing of the NDA with the FDA, which activities include: (i)
filing the DMF, (ii) conducting stability studies on Product, and (iii) conducting the Clinical
Studies deemed necessary by GSK for filing of the NDA for Product.

     1.86 “Product” means an *** (i.e., *** or ***) pharmaceutical composition containing
the Compound, as the *** and *** or ***, which is developed by or on behalf of the Parties pursuant
to this Agreement, and which uses the Formulation and incorporates the ODT Technology.

     1.87 “Product Specifications” means, with respect to any Product, all specifications
for materials, approved suppliers, formula, manufacturing, analytical and testing procedures,
release,

8

 

packaging, labeling, artwork and other processes relating to the manufacture of Product
other than CTM, which have been mutually agreed by the Parties and made part of the Commercial
Supply Agreement.

     1.88 “Program” means the development work conducted by the Parties under this
Agreement as specified in the Proposal and such other work relating to the Formulation and/or
Product as mutually agreed upon by the Parties from time to time during the Term.

     1.89 “Program Initiation Date” will have the meaning set forth in Section 3.1.

     1.90 “Proposal” will have the meaning set forth in Section 3.1.

     1.91 “Recipient” will have the meaning set forth in Section 13.1.1.

     1.92 “Regulatory Approval” means an approval, license, registration, and/or
authorization necessary for the development, manufacture and/or commercialization of a prescription
pharmaceutical or other product in any country, including the NDA.

     1.93 “Regulatory Authority” means any or all national, supranational, regional, state,
or local regulatory agency, department, bureau, commission, council, or other government entity
involved in the granting of Regulatory Approval for a prescription pharmaceutical or other product
in any country.

     1.94 “Right of Negotiation” will have the meaning set forth in Section ***.

     1.95 “Right of Negotiation Notice” will have the meaning set forth in Section ***.

     1.96 “Right of Negotiation Period” will have the meaning set forth in Section ***.

     1.97 “Royalties” will have the meaning set forth in Section 8.3.1.

     1.98 “Steering Committee” will have the meaning set forth in Section 5.1.

     1.99 “Term” will have the meaning set forth in Section 11.1.

     1.100 “Territory” means the fifty (50) states of the United States of America, the
District of Columbia, and all of its territories and possessions (including Puerto Rico).

     1.101 “Third Party” means any Entity other than Eurand GSK or their respective
Affiliates.

     1.102 “Third Party Infringement” will have the meaning set forth in Section 9.7.1.

     1.103 “Third Party Payments” will have the meaning set forth in Section 8.3.5.

     1.104 “Trademarks” means trademarks, trade names, brand names, copyrights, logo types,
symbols, service marks, designs, domain names and URLs, including, without limitation,
registrations and applications for registrations thereof and all renewals, modifications and
extensions thereof.

9

 

2 LICENSES:

     2.1 Eurand’s License Grants to GSK. Subject to the terms and conditions of this
Agreement, Eurand hereby grants to GSK the following:

          2.1.1 an *** license (or sublicense as the case may be with respect to Know-How and Patent
Rights arising ***), with the *** to *** *** as provided in Section ***, under the Eurand
Intellectual Property Rights (excluding the Eurand Trademarks) to use, sell, offer for sale,
package, and import Product in the Field in the Territory;

          2.1.2 a *** license (or sublicense as the case may with respect to Know-How and Patent Rights
arising ***), with the *** to *** *** as provided in Section *** under the Eurand Intellectual
Property Rights (excluding the Eurand Trademarks) in the Field *** Product solely to the extent
that GSK is permitted to make or have made Product under the Clinical Supply Agreement and
Commercial Supply Agreement; and

          2.1.3 a *** license (or sublicense as the case may be with respect to Know-How and Patent
Rights arising ***), with the *** to *** *** as provided in Section ***, under the Eurand
Intellectual Property Rights (excluding the Eurand Trademarks) to package Product in any country
*** of the *** and to use Product for the purpose of conducting Clinical Studies in any country ***
of the ***.

     2.2 GSK’s License Grants to Eurand. Subject to the terms and conditions of this
Agreement, GSK hereby grants to Eurand the following:

          2.2.1 a *** license, with the *** to *** *** as provided in Section ***, under the GSK
Intellectual Property Rights (excluding the ***) to use Drug Substance for the *** of conducting
the Eurand Development Activities as provided herein;

          2.2.2 a ***, royalty-free license, with the *** to *** *** as provided in Section ***, under
the GSK Intellectual Property Rights (excluding the GSK Trademarks) to make Product *** as set
forth under the Clinical Supply Agreement and Commercial Supply Agreement.

     2.3 ***.

          2.3.1 Subject to the terms and conditions of this Agreement, Eurand hereby grants to GSK:

               (i) an *** right, with ***, to use the Eurand Trademarks in connection with the using,
selling, offering for sale and importing of Product in the Field in the Territory;

               (ii) a *** right to use the Eurand Trademarks in connection with the making and having made of
Product solely to the extent that GSK is permitted to make or have made Product under the Clinical
Supply Agreement and Commercial Supply Agreement; and

               (iii) a *** right to use the Eurand Trademarks in connection with the packaging of Product ***
of the *** and the use of Product for the purpose of conducting Clinical Studies in *** outside of
the ***.

10

 

          2.3.2 Except where prohibited by Applicable Laws, GSK will refer to the Eurand Trademarks on
the final packaging for, and internal leaflets used with, Product and on promotional materials used
in connection with Product. Prior to printing any materials containing the Eurand Trademark, GSK
will use Commercially Reasonable Efforts to send to Eurand, *** than *** (***) Business Days prior
to their distribution, a sample of such materials (in final or substantially final form) for
Eurand’s prior review and approval *** with respect to GSK’s use of the Eurand Trademark, which
approval will not be unreasonably withheld or delayed. In the event that Eurand does not provide
any comment to GSK during such *** (***) Business Day period, Eurand will be deemed to have
consented to GSK’s use of the Eurand Trademarks on such materials. GSK may *** any *** to *** an
*** other than *** to the Eurand Trademark, *** the *** from Eurand. GSK covenants that its use of
the Eurand Trademark will be in accordance with the terms of this Agreement and that all rights to
and ownership of the Eurand Trademark will remain with Eurand. GSK may use the Eurand Trademark
solely with respect to CTM and Product manufactured under the Clinical Supply Agreement and
Commercial Supply Agreement, respectively, and no other product. For the avoidance of doubt, CTM
and Product manufactured under an agreement with a Third Party manufacturer is deemed to be
manufactured under the Clinical Supply Agreement or Commercial Supply Agreement, respectively,
provided that the manufacturer is authorized under those agreements.

     2.4 Right to ***.

          2.4.1 Except as set forth in Section 10.6 with respect to any Competing Business Entity, GSK
will have the *** any or all of its rights under the Eurand Intellectual Property Rights as
provided in Section 2.1 and under the Eurand Trademarks as provided in Section 2.3 to its
Affiliates *** the *** of ***. Except as set forth in Section 10.6 with respect to any Competing
Business Entity, Eurand will have the right to sublicense any or all of its rights under the GSK
Intellectual Property Rights as provided in Section 2.2 to its Affiliates *** the *** of GSK.

          2.4.2 GSK will have the *** its rights under the Eurand Intellectual Property Rights as
provided in Section 2.1.2 to Third Parties to make and have made Product *** the *** of Eurand, and
solely in connection with any ***, GSK will have the right to *** under the Eurand Trademarks as
provided in Section 2.3 to Third Parties solely to make and have made Product *** the *** of
Eurand. Notwithstanding the foregoing GSK will only be permitted to *** under this Section 2.4.2
to the extent that the manufacture of CTM or Product by Third Parties is permitted under the
Clinical Supply Agreement or the Commercial Supply Agreement, respectively.

          2.4.3 GSK will have the right to *** under the Eurand Intellectual Property Rights as provided
in Section 2.1 to any Third Parties who GSK may engage to provide services to or on behalf of GSK
relating to this Agreement or to perform any GSK Development Activities under this Agreement
(including a Clinical Research Organization (CRO), Third Party packagers and Third Party
distributors), in *** case *** the *** of ***, and solely in connection with any ***, GSK will
have the *** its rights under the Eurand Trademarks as provided in Section 2.3 to Third Parties ***
the *** of ***.

          2.4.4 For all instances other than as provided in Sections 2.4.1, 2.4.2 and 2.4.3, GSK will
have the right to *** under the Eurand Intellectual Property Rights as provided in Section 2.1 and
under the Eurand Trademarks as provided in Section 2.3 to any Third Party upon the *** of Eurand,
*** will *** or ***. Eurand will have the right to *** under the GSK Intellectual Property Rights
as provided in Section 2.2 to any Third Party upon the *** of GSK.

11

 

          2.4.5 The Parties acknowledge and agree that any *** with a *** will provide that the *** is
bound by all the terms and obligations of this Agreement. In addition, each Party will guarantee
the performance of its ***.

     2.5 Affiliates. Notwithstanding anything in this Agreement to the contrary, either
Party may contract or agree with one or more of its Affiliates to have such Affiliate perform any
of such Party’s obligations herein. In no event will such use of an Affiliate be deemed to relieve
a Party of its liabilities or obligations to the other Party under this Agreement; provided, that
performance of an obligation hereunder by an Affiliate of a Party will be attributed to such Party.
Each Party expressly acknowledges and agrees that it will remain fully and unconditionally
obligated and responsible for the full and complete performance of all of its obligations under the
terms and conditions of this Agreement, whether or not such performance is carried out by such
Party or any of its Affiliates.

     2.6 *** Agreement.

          2.6.1 Eurand will ***, and will cause its Affiliates ***: (i) on its or their own or in
agreement with ***, *** the *** Agreement or *** or *** the *** Agreement in any way that *** and
*** GSK’s rights under the Eurand Intellectual Property Rights or in this Agreement *** the *** of
GSK; or, (ii) send written notice to *** of *** or *** by *** of the *** Agreement without
providing at least *** (***) calendar days’ *** to GSK.

          2.6.2 Within *** (***) Business Days of receiving written notice of a monetary breach or
non-monetary material breach from *** pursuant to Section 10.2 of the *** Agreement, Eurand will,
subject to its obligations to protect the confidential information of *** or Eurand’s Third Party
licensees, *** GSK concerning the nature of any problem or occurrence that is related to *** of
such *** from *** and shall *** GSK of the *** it *** to *** to *** any problems and *** that
Eurand’s rights to the *** Agreement, and GSK’s rights under the Know-How and Patent Rights arising
under the *** Agreement pursuant to this Agreement, remain in effect and undiminished. Eurand will
use Commercially Reasonable Efforts to *** from *** to *** to GSK any *** pertinent to any such ***
received from *** and pertinent to the nature of the problem.

          2.6.3 Eurand will, within *** (***) Business Days, *** GSK in the event that Eurand and/or any
of its Affiliates becomes aware that *** will, *** or ***, *** its reserved rights pursuant to
Section *** under the *** Agreement with respect to *** in the Territory.

     2.7 Reservation of Rights. No right or license under any Intellectual Property Rights
Controlled by either Party is granted or implied except as expressly granted in this Agreement.
Except for the rights specifically granted in this Agreement, each Party expressly reserves all
rights Controlled by it or its Affiliates to all its products and intellectual property, and
reserves the right to utilize or allow its Affiliates or Third Parties to utilize such products and Intellectual Property
Rights in any manner not inconsistent with the terms of this Agreement.

3 PROGRAM:

          3.1 Eurand Development Activities.

12

 

Eurand will be solely responsible for, using Commercially Reasonable Efforts, conducting the Eurand
Development Activities in accordance with the terms and conditions of this Agreement and as
directed by the Steering Committee, which Eurand Development Activities are initially set forth in
Exhibit D, attached hereto and incorporated herein (the “Proposal”). Eurand will
initiate the Eurand Development Activities on the *** (***) Business Day after the Effective Date
(the “Program Initiation Date”). Further, Eurand will assign professionally qualified
personnel to perform the Eurand Development Activities and Eurand will, and will cause its
Affiliates and personnel to, perform the Eurand Development Activities in compliance with the
requirements of Applicable Laws, including cGMPs when appropriate.

     3.2 GSK Development Activities. GSK, at its sole discretion and expense, will be
solely responsible for, using Commercially Reasonable Efforts, conducting all aspects of the
development of the Program other than the Eurand Development Activities (the “GSK Development
Activities”), including, without limitation, determining the clinical, regulatory and ***
strategy (in accordance with the terms of the Clinical Supply Agreement and Commercial Supply
Agreement) for the Product, the conduct of *** and *** Clinical Studies, and liaising and managing
*** interactions with Regulatory Authorities, with the exception of the filing and maintenance of
the DMF.

     3.3 Supply of Drug Substance for use in Eurand Development Activities. The Parties
acknowledge and agree that in order for Eurand to commence performing the Eurand Development
Activities upon the *** Business Day after the Effective Date, GSK has provided Eurand with ***
(***) *** of Drug Substance prior to the Effective Date at no cost. In addition to Drug Substance
transferred by GSK to Eurand prior to the Effective Date, GSK may transfer additional reasonable
quantities of Drug Substance to Eurand at no cost except as set forth in Section 3.3.2(iv), which
Eurand may reasonably request in connection with conducting the Eurand Development Activities and
which request will be agreed to by GSK provided that it is consistent with the Proposal or in
accordance with Section 3.5.

          3.3.1 Prior to receipt by Eurand of Drug Substance before the Effective Date, GSK shall have
provided Eurand with available information pertaining to procedures and warnings for the safe
handling and use of the Drug Substance through the issuance to Eurand of Material Safety Data
Sheets for the Drug Substance, and GSK shall provide Eurand with such additional available
information pertinent to procedures and warnings for the safe handling and use of the Drug
Substance and update the same during the course of the Program. Further, GSK shall have delivered
to Eurand with such shipment of Drug Substance prior to the Effective Date a certificate of
analysis stating that the Drug Substance meets the Drug Substance Specifications and has been
manufactured in accordance with cGMP. Prior to receipt by Eurand of any additional quantities of
Drug Substance after the Effective Date pursuant to this Section 3.3, GSK shall provide Eurand with
available information pertaining to procedures and warnings for the safe handling and use of the
Drug Substance through the issuance to Eurand of Material Safety Data Sheets for the Drug
Substance, and GSK shall provide Eurand with such additional available information pertinent to procedures
and warnings for the safe handling and use of the Drug Substance and update the same during the
course of the Program. All Drug Substance provided after the Effective Date as provided in this
Section 3.3 shall meet the Drug Substance Specifications. Further, GSK shall deliver to Eurand
with each such shipment of Drug Substance after the Effective Date a certificate of analysis
stating that the Drug Substance meets the Drug Substance Specifications and has been manufactured
in accordance with cGMP.

13

 

          3.3.2 Eurand agrees to use Drug Substance supplied to it by GSK pursuant to this Section 3.3,
whether supplied prior to or after the Effective Date, in accordance with the following terms:

               (i) Upon receipt, Eurand will sample and analyze each shipment of Drug Substance to determine
if such shipment meets the Drug Substance Specifications. Eurand shall notify GSK within *** (***)
Business Days after delivery of such shipment of Drug Substance if there are shortages, if the
shipment of Drug Substance does not meet the Drug Substance Specifications or if the shipment of
Drug Substance is considered to be adulterated or misbranded within the meaning of the Act. Unless
Eurand advises GSK that a shipment is unsatisfactory within such *** (***) Business Day period,
such shipment shall be deemed to have been accepted by Eurand.

               (ii) Eurand will ensure that all quantities of Drug Substance received from GSK pursuant to
this Section 3.3, whether received prior to or after the Effective Date, are used for the sole
purpose of completing the Eurand Development Activities under this Agreement and as specified in
the Proposal.

               (iii) Eurand will not make Drug Substance available to any Entity not under the direct
supervision of Eurand without the prior written consent of GSK.

               (iv) Eurand will use Commercially Reasonable Efforts to ensure its use of the Drug Substance
provided to it by GSK pursuant to this Section 3.3, whether provided prior to or after the
Effective Date, minimizes or eliminates any loss or waste of such Drug Substance. Eurand *** and
*** that the Drug Substance is available from GSK in *** and *** or *** of the Drug Substance (but
excluding process-related yield losses normally encountered in developing a product) may result in
*** Eurand for *** of *** *** of Drug Substance pursuant to this Section 3.3.

               (v) All Drug Substance provided to Eurand by GSK pursuant to this Section 3.3, whether
provided prior to or after the Effective Date, will remain the property of GSK; *** of *** and ***
to the Drug Substance shall *** with *** while the Drug Substance is under *** care and control.

               (vi) Eurand will ensure that all Drug Substance received from GSK pursuant to this Section
3.3, whether received prior to or after the Effective Date, is stored in accordance with cGMP and
Applicable Laws, and is kept *** other materials belonging to *** or ***.

               (vii) Eurand will not store or process any Drug Substance in the same building in which Eurand
manufactures, stores or processes cytotoxics, penicillin, 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. Eurand will
*** GSK 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 Eurand stores the Drug Substance. Eurand will notify GSK by not later than the
earlier to occur of (A) *** (***) calendar days prior to such event or (B) ***, if Eurand intends
to change the nature or use of any portion of the Eurand facility or any module to include the use
of any

14

 

of the Potential Contaminants. Eurand will not make such changes if the change could
reasonably be expected to result in a material adverse effect on Eurand’s ability to fully perform
its obligations under this Agreement and Eurand has not demonstrated to GSK’s reasonable
satisfaction that such Potential Contaminants shall be completely segregated from the Drug
Substance at all times in the Eurand facility.

               (viii) Upon termination of this Agreement for any reason or upon GSK’s request, Eurand will at
GSK’s sole option and expense either (A) certify destruction of all Drug Substance provided to it
by GSK pursuant to this Section 3.3, whether provided prior to or after the Effective Date, and
account for any used Drug Substance or (B) return the remaining Drug Substance provided to it by
GSK pursuant to this Section 3.3, whether provided prior to or after the Effective Date, and
account for any used Drug Substance.

     3.4 Each Party will use Commercially Reasonable Efforts to cooperate with the other Party in
carrying out the Program. Each Party will make available such of its scientific, engineering,
manufacturing and other personnel necessary to perform its respective responsibilities under the
Program in accordance with the terms of this Agreement. The Parties shall use prudence and
reasonable care in the use, handling, storage, transportation, disposition and containment of the
Drug Substance and any Product resulting from the Program. The Parties agree that the Drug
Substance and Product will be used in compliance with all Applicable Laws, including without
limitation those governing disposal of hazardous materials.

     3.5 Program Changes. The Parties acknowledge that the nature of the development
process is such that modifications to the Program (including modifications relating to the
acquisition of additional equipment and materials) may be desirable or reasonably necessary at
certain times for regulatory, legal, commercial or other reasons. Accordingly, in the event that
either Party believes that a change to the Program is required, that Party will immediately notify
the Steering Committee in writing of the exact nature of any desired change and the specific
reasons therefor. The Steering Committee will then meet promptly to discuss the changes that may be
needed. If the Steering Committee agrees that changes in the Program are required, the Parties
will amend the Proposal to reflect the necessary changes, and also set out any cost increases or
additional time that is required to fulfill the Program. All cost increases relating to any
changes in the Program will be borne wholly by GSK *** such changes to the Program were *** due to
*** or ***, in which case the cost increases relating to the changes in the Program *** or *** to
an *** or *** will be *** or ***, as applicable.

4 COMMERCIALIZATION:

     4.1 GSK will have *** control, authority and responsibility for the commercialization of
Product in the Field in the Territory. GSK will exercise its Commercially Reasonable Efforts in
commercializing Product in the Territory *** it has obtained all required Regulatory Approvals.
GSK will have *** decision-making authority, ***, relating to *** aspects of the marketing and
commercialization of Product in the Field in the Territory, including *** and *** for Product,
Product *** and ***, Product *** and *** with *** regarding the commercialization of Product in the
Field.

15

 

     4.2 GSK will *** of Product in the Field in the Territory and will *** and *** the Product in
the Field in the Territory; provided, however, that GSK will be *** to *** Product in the Field ***
if such Product has been *** by or on behalf of *** outside of the Territory or manufactured by or
on behalf of *** outside of the Territory to the extent permitted under the Clinical Supply
Agreement or the Commercial Supply Agreement.

     4.3 Subject to Applicable Law and Section 2.3.2, GSK will, in its sole discretion, *** all
Trademarks used in connection with Product in the Field (the “GSK Trademarks”). For the
avoidance of doubt, the term “GSK Trademarks” means all Trademarks Controlled by GSK and/or its
Affiliates or a Third Party on behalf of GSK or its Affiliates on the Effective Date or at any time
during the Term; provided, however, that the term “GSK Trademarks” will in no way be deemed to
include the Eurand Trademarks.

     4.4 Except if GSK terminates this Agreement pursuant to Sections *** or ***, GSK agrees that
it will not, and it will prevent its Affiliates and contractually mandate that its sublicensees
will refrain from, making, using, selling, offering for sale or importing Product upon the
termination *** of this Agreement.

5 STEERING COMMITTEE:

     5.1 Within *** (***) Business Days after the Effective Date, the Parties will form a committee
(the “Steering Committee”), which will oversee each Party’s conduct of its respective
obligations under the Program and to serve as a forum for the Parties to discuss any issues that
may arise under this Agreement during the Term.

     5.2 Each Party will designate at least *** (***) representatives for membership on the
Steering Committee. Each Party may change *** or *** of its representatives to the Steering
Committee at *** time. In addition, each Party may from time to time and in its sole discretion
include non-voting ad-hoc representatives to participate in Steering Committee meetings to address
specific issues. A *** member will chair the Steering Committee. Each Party will have one (1)
vote on each matter brought before the Steering Committee.

     5.3 The first meeting of the Steering Committee will be face to face at a location agreed to
by the Parties and will occur within *** (***) Business Days after the Effective Date. Thereafter,
the meetings will be held at least once every *** or more or less frequently as the Steering
Committee members may agree. The location of such meetings will alternate between sites *** and
***, unless otherwise agreed upon by the Parties. Steering Committee meetings need not necessarily
be face to face but, upon the agreement of the Parties, can be via other methods of
communication such as teleconferences and/or videoconferences. Each Party will bear all expenses
it incurs in regard to participating in all Steering Committee meetings, including, without
limitation, traveling and living expenses.

     5.4 Minutes of the Steering Committee will be prepared by the chair or his/her designee.
Draft minutes shall be sent to all members of the Steering Committee within *** (***) Business Days
after each meeting. The draft minutes shall be edited by the chair based on comments from the
members of the Steering Committee and shall be distributed to the members prior to the next meeting

16

 

of the Steering Committee. All records of the Steering Committee shall at all times be available
to both Parties.

     5.5 The Steering Committee may delegate its responsibilities to any one or more subcommittees,
each of which shall have an equal number of members from GSK and Eurand. Any disputes between the
members of any subcommittees will be submitted to the Steering Committee for resolution in
accordance with Section 5.6.

     5.6 Resolution of Disputes. All decisions of the Steering Committee will be by
unanimous vote, which decisions will be final and binding on the Parties. Should the members of
the Steering Committee become deadlocked on an issue after good faith but unsuccessful effort to
break such deadlock, the issue will be resolved in accordance with the following procedures:

          5.6.1 the disputed matter will be presented to the President of Eurand or to his/her
respective designee and as to the senior executives of GSK as follows: (i) to the Chairman of
Research and Development of GSK, or to his/her respective designee for disputes relating to
development issues, (ii) to the President of U.S. Pharmaceuticals of GSK, or to his/her respective
designee for disputes relating to commercial issues; and (iii) to either of the foregoing senior
executives of GSK, as determined by GSK, for all other disputes.

          5.6.2 such executives shall meet or discuss in a telephone or video conference each Party’s
view and explain the basis for such disagreement; and

          5.6.3 if such executives cannot promptly resolve such disagreement under Section 5.6.1(i),
(ii)or (iii), as applicable, within *** (***) calendar days after such issue has been referred to
them, then *** will in good faith and using Commercially Reasonable business judgment make the ***
decision regarding the matter *** such decision would have a *** and *** impact on ***, in which
case *** may refer the decision to the dispute resolution process set forth in Section 14.14. For
the avoidance of doubt, if such executives are unable to resolve a dispute regarding whether a
Milestone Event has been achieved as set forth in Section 8.2, *** will *** to make the *** and ***
decision regarding such matter, but rather such matter will be resolved through the dispute
resolution process set forth in Section 14.14.

     5.7 The Steering Committee will have only such powers as are specifically delegated to it in
this Agreement, and will have no power to amend this Agreement or waive a Party’s rights or
obligations under this Agreement.

6 SUPPLY OF CLINICAL AND COMMERCIAL MATERIAL:

     6.1 Generally. Notwithstanding anything set forth in Section 2, the Parties
acknowledge and agree that GSK hereby engages Eurand to exclusively (even as to GSK except as set
forth in the Clinical Supply Agreement and Commercial Supply Agreement): (i) manufacture CTM which
GSK will use in Clinical Studies, and (ii) manufacture bulk tablet forms of Product which GSK will
commercialize and sell in the Territory. The terms pursuant to which Eurand will supply such CTM
and Product are set forth in Sections 6.2 and 6.3, respectively.

17

 

     6.2 Clinical Supply Agreement. Within *** (***) calendar days after the Effective
Date, the Parties will execute a supply agreement (the “Clinical Supply Agreement”) and
quality agreement, which will set forth the terms and conditions pursuant to which Eurand will
supply CTM to GSK. Such Clinical Supply Agreement will include the terms set forth on Exhibit
E, attached hereto and incorporated herein. If the Parties *** within *** (***) calendar days
***, the Parties *** that the *** by GSK for use in Clinical Studies until a Clinical Supply
Agreement is executed, and the terms and conditions of *** are *** any *** of *** contained in this
Agreement.

     6.3 Commercial Supply Agreement. Prior to NDA Acceptance (as such term is defined in
8.2.1(vi), the Parties will execute a supply agreement (the “Commercial Supply Agreement”)
and quality agreement, which will set forth the terms and conditions pursuant to which Eurand will
supply Product to GSK for sale in the Territory. Such Commercial Supply Agreement will include the
terms set forth on Exhibit F, attached hereto and incorporated herein. If the Parties ***
*** to ***, the Parties acknowledge and agree that the *** Product *** and the *** of this
Agreement shall ***are *** any *** of *** contained in this Agreement.

     6.4 For the avoidance of doubt, GSK will be responsible for conducting, or arranging for the
conducting of, commercial packaging, commercial stability testing and commercial labeling of all
Product.

7 REGULATORY:

     7.1 Regulatory Affairs.

          7.1.1 During the Program, to the extent required by the FDA or any other Regulatory Authority
to conduct Clinical Studies in humans or in order for GSK to receive Regulatory Approvals for
Product, Eurand shall prepare a DMF and submit the DMF to the FDA; provided, however, that *** will
have the right, and will be provided a *** of time, to *** and *** on the DMF prior to each such
submission by ***, which *** of *** will be *** by *** for *** in each DMF submission. *** shall
*** *** of the *** date for the DMF at least *** (***) Business Days *** to *** such ***, and
notify *** *** regarding *** with respect to the filing or maintenance of the DMF. Further, ***
will allow *** to *** all *** and *** regarding each DMF submission and permit *** to *** on ***,
which *** will be considered in good faith by *** for *** in any *** to *** regarding *** DMF
submission. During the Term and for *** (***) *** after the expiration thereof, *** will provide
*** with ***, *** to the DMF, copies of which will be *** by *** to a *** by ***, so that *** may
*** and *** the DMF as appropriate to prepare the CMC portion of the NDA for the Product and to
prepare any other applications to obtain Regulatory Approvals for the Product during the Term. ***
will *** in the DMF as Eurand’s Confidential
Information and to the extent possible, *** will limit the review of the DMF to certain named
individuals at ***.

          7.1.2 The Parties will use Commercially Reasonable Efforts to complete, and to cooperate with
the other Party in its completion of, the Pre-Registration Activities. Any disagreement as to
whether the Pre-Registration Activities are completed shall be resolved in accordance with Section
5.6.

18

 

          7.1.3 GSK will use Commercially Reasonable Efforts to prepare and submit all necessary
applications to obtain Regulatory Approvals to use, market and sell the Product in the Territory as
provided in this Agreement. Eurand shall have the right to review and comment upon the portions of
proposed protocols and investigator brochures and informed consent forms as far as they relate to
the ODT Technology or Eurand’s Confidential Information, and GSK will *** in good faith, but will
in *** way be *** to *** in such *** and ***, any *** by ***. With the exception of the DMF as set
forth in Section 7.1.1, and except to the extent that Eurand is exclusively using, marketing or
selling Product in a country as set forth in Section 9.5, it is understood that GSK will prepare
and make all other necessary filings for Regulatory Approvals with the appropriate Regulatory
Authorities which are required to secure approval to use, market and sell the Product in the Field
as provided in this Agreement. Eurand agrees, upon request from GSK, to promptly provide GSK with
such information as *** may reasonably require to complete any and all such filings and submissions
for Regulatory Approvals, unless such information is contained in the DMF in which case the
information will be filed with the DMF. *** will, on a *** and as *** by *** from time to time
during the Term, *** co-operate with *** by *** and *** as *** to ***, and *** with, Regulatory
Authorities relating to filings for Regulatory Approvals made by *** relating to the Product. GSK
shall own all Regulatory Approvals for Product.

          7.1.4 GSK shall notify Eurand of the submission date of each application for Regulatory
Approvals for the Product in the Territory at least *** (***) Business Days prior to such
submission, and notify Eurand of the effective dates of any such Regulatory Approvals or NDA
Acceptance not later than *** (***) Business Days *** each such date. During the Term, GSK shall
provide Eurand with a report on the status of progress of all filings for Regulatory Approval in
the Territory every *** (***) *** following completion of the Pre-Registration Activities until
such filings are approved by the appropriate Regulatory Authorities and thereafter, on the status
of its progress toward making the First Commercial Sale of Product in the Territory. GSK shall
notify Eurand of the date of First Commercial Sale within *** (***) Business Days *** its
occurrence.

          7.1.5 Eurand shall use Commercially Reasonable Efforts to give GSK *** of any impending
governmental or other Third Party audit of Eurand as it relates to the manufacture or testing of
the Product or CTM supplied to GSK pursuant to the Commercial Supply Agreement and the Clinical
Supply Agreement, respectively, and shall provide GSK with *** to it relating to such audit. In
the event that any such audit involves an inspection of a Eurand facility, then Eurand shall use
Commercially Reasonable Efforts to *** GSK of any such inspection and provide GSK the *** of such
inspection as it relates solely to the Product or CTM, provided that GSK acknowledges that Eurand
does not control the timing of such inspections and, as such, cannot guarantee timing that will
permit GSK’s attendance. GSK acknowledges that should representatives of GSK be present during an
audit, their function is restricted to that of being an observer and that Eurand is solely
responsible for the manner and conduct of any and all audits. Eurand shall also use Commercially
Reasonable Efforts to provide GSK with a reasonable opportunity to ***, ***, any *** prepared in
response to such governmental or other Third Party audit and shall *** with the *** of such audit
following its conclusion; however, Eurand shall have sole discretion in responding to any such audit.
Eurand agrees that GSK shall have the right *** during the Term to carry out an audit of Eurand for
conformance with cGMPs, but not more than once per Calendar Year, unless an audit results in
adverse findings in which case GSK shall be entitled to *** Eurand with respect to such adverse
findings pursuant to this Section 7.1.5 without reference to the once per Calendar Year limitation.
GSK must provide advanced written notice at least *** (***) Business Days prior to such audits and
audits may only be scheduled with the consent and approval of Eurand, ***.

19

 

          7.1.6 Eurand shall *** GSK with *** notification of its receipt of any of the following
related to the manufacture or testing of the Product: a copy of any *** of observations (Form FDA
483), warning letter, information letter, regulatory letter or the like issued by the FDA as well
as *** GSK an opportunity to *** to *** to the issuing agency. However, Eurand shall have sole
discretion regarding the resolution of any matter pertaining to such notifications.

8 COMPENSATION:

     8.1 Development Fees.

          8.1.1 Eurand shall invoice GSK at the end of each month for its personnel costs and expenses
incurred in Eurand’s performance of the Eurand Development Activities. Each invoice shall be
accompanied by a *** accounting of the ***, and *** and *** incurred, by Eurand in performing the
Eurand Development Activities. Eurand shall also invoice GSK for all out-of-pocket expenses ***
incurred by Eurand which are *** associated with Eurand’s performance of the Eurand Development
Activities in accordance with the Proposal and this Agreement, provided, *** such costs and
expenses are ***. Such invoices shall be sent to:

*** Project Leader

Greenford Road

Greenford

Middlesex, England

UB6 OHE

With a copy to:

Alliance Director for ***

New Frontiers Science Park

Third Avenue

Harlow

Essex, England

CM19 SAW

          8.1.2 Eurand’s monthly invoices as provided above shall reflect an hourly rate of *** U.S.
Dollars and *** Cents (U.S. $***) per ***; such rate may be adjusted by *** than the *** change for
the *** (***) months in the *** as published by the *** of *** of *** of *** each *** (***) month
period after the Effective Date by Eurand to reflect *** and *** changes to its billing rates.
Eurand’s personnel time for performing the Eurand Development Activities shall *** the *** set
forth in Exhibit D by *** (***) for *** stage of Eurand Development Activities under the
Proposal, *** such Eurand Development Activities are changed as set forth in Section 3.5, or as
otherwise agreed to *** and *** by ***.

          8.1.3 Additional Expenses. In addition to the cost estimates set forth in Exhibit D
hereto, GSK shall be responsible for the following additional, costs and/or expenses:

20

 

               (i) the cost of any additional Eurand Development Activities performed by Eurand as a result
of changes made to the Program, subject to Section 3.5;

               (ii) the cost of any external contract research, which is *** to by *** in*** to such costs
***; and

               (iii) the cost of any Program specific ***, which is agreed to by GSK in *** to such costs
***, and which *** and *** will be the *** of ***.

All such permitted additional costs and expenses will be invoiced by Eurand on a monthly basis in
accordance with Sections 8.1.1 and 8.1.2 above.

          8.1.4 Payments. Subject to Section 8.4, GSK shall make payments to Eurand for all uncontested
amounts due under this Section 8.1 within *** (***) Business Days of *** of an invoice from Eurand
as provided in this Section 8.1. In the event GSK fails to pay any uncontested amounts set forth
in any invoice as provided in this Section 8.1.4, Eurand may at its discretion impose a late
payment fee on GSK equivalent to *** (***) of the outstanding uncontested amount due per month. In
the event of a late payment by Eurand to GSK of any overpayment received by Eurand under this
Section 8.1, as provided in Section 8.4.3(ii), *** may at its discretion impose a late payment fee
on Eurand equivalent to *** (***) of the overdue payment from the date such payment was due to the
date such payment is received by GSK.

     8.2 Milestone Payments. In consideration for Eurand’s performance of the Eurand
Development Activities, subject to Sections 8.2.1 and 8.2.2, GSK will make the following *** (the
“Milestone Payments”) to Eurand in the *** amounts and in the manner set forth below, which
Milestone Payments will not exceed Forty Two Million U.S. Dollars (U.S. $42,000,000), upon
achieving the Milestone Payment events set forth below (the “Milestone Events”):

	 	 	 	 	 
	Milestone Event	 	Milestone Payment
	(i)

	 	***
	 	U.S. ***
	(ii)

	 	***
	 	U.S. ***
	(iii)

	 	***
	 	U.S. ***
	(iv)

	 	***
	 	U.S. ***
	(v)

	 	***
	 	U.S. ***
	(vi)

	 	***
	 	U.S. ***
	(vii)

	 	***
	 	U.S. ***
	(viii)

	 	***
	 	U.S. ***
	(ix)

	 	Net Sales Equal to U.S. ***
	 	U.S. ***
	(x)

	 	Net Sales Equal to U.S. ***
	 	U.S. ***
	(xi)

	 	Net Sales Equal to U.S. ***
	 	U.S. ***

21

 

          8.2.1 Milestone Payment Definitions.

               (i) The phrase “***”, as used in Section 8.2(ii) above and Section 9.6 below, means that
Eurand has delivered to GSK *** (*** *** of Product within *** (***) *** after the Program
Initiation Date as follows:

               ***: using *** approach (*** flavor);

               ***: using *** approach (*** flavor);

               ***: using *** approach (*** flavor);

               ***: using *** approach (*** flavor); and

               ***: using *** approach (*** flavor);

or such other smaller combination of the same *** (***) *** listed above as determined by the
Steering Committee. GSK may in no event request *** of Product from Eurand pursuant to this
Section 8.2.1(i). In the event that the Steering Committee requires a material change to the
requirements for any of the *** described in this Section 8.2.1(i), then the Steering Committee
shall agree on an appropriate time extension for Successful Completion of Stage I.

               (ii) The phrase “***”, as used in Section 8.2(iii) above and Section 9.6 below, means that
Eurand has delivered to GSK, *** after the Program Initiation Date and in accordance with the terms
and conditions of the Clinical Supply Agreement, *** of *** for use by or on behalf of GSK in ***
study relating to Product as follows:

               ***: using *** approach (*** flavor);

               ***: using *** approach (*** flavor);

               ***: using *** approach (*** flavor); and

               ***: using *** approach (*** flavor);

or such other smaller combination of *** as determined by the Steering Committee. In the event
that the Steering Committee requires a material change to the requirements for any of the ***
described in this Section 8.2.1(ii), then the Steering Committee shall agree on an appropriate time
extension for Successful Completion of Stage II.

               (iii) The phrase “***”, as used in Section 8.2(iv) above, means the date on which *** in
accordance with the Applicable Laws.

               (iv) The phrase “***”, as used in Section 8.2(v) above, means the date on which the *** is ***
in a *** or *** of GSK to determine whether CTM supplied by Eurand to GSK (pursuant to the ***
Agreement) is *** tablets, provided, however, that such date is *** calendar days after the ***.

22

 

               (v) The phrase “***”, as used in Section 8.2(vi) above, means the date on which *** that the
*** of a ***, which *** and its *** to ***, demonstrates that CTM provided by Eurand to GSK
pursuant to the Clinical Supply Agreement is ***.

               (vi) The phrase “***”, as used in Section 8.2(vii) above, means the date on which *** of ***
for *** of a *** by or on behalf of GSK for the *** of *** to *** in the *** in the ***, which date
must be *** to ***.

               (vii) The phrase “***” as used in Section 8.2(viii) above, means the date on which *** that it
*** the *** *** or *** of GSK to *** in the *** in the ***, which date must be *** to ***.

               (viii) The phrase “Net Sales Equal to U.S. ***”, as used in Section 8.2(ix) above, means the
first time Net Sales reach *** U.S. Dollars (U.S. ***) in any *** during the Term.

               (ix) The phrase “Net Sales Equal to U.S. ***”, as used in Section 8.2(x) above, means the
first time Net Sales reach *** U.S. Dollars (U.S. ***) in any *** during the Term.

               (x) The phrase “Net Sales Equal to U.S. ***”, as used in Section 8.2(xi) above, means the
first time Net Sales reach *** U.S. Dollars (U.S. ***) in any *** during the Term.

          8.2.2 Milestone Payment Provisions.

               (i) Each Milestone Payment will be made only one time and only for the first time that the
corresponding Milestone Event is achieved, regardless of how many times such Milestone Event is
achieved, and no Milestone Payments will be owed for a Milestone Event which is not achieved;
provided however, that in the event that GSK achieves the First Commercial Sale of Product in the
Territory, the Milestone Payments set forth in Sections 8.2(ii)-(viii) which have not been paid by
GSK will be deemed to have been achieved as of the date of such First Commercial Sale and will be
payable as provided herein.

               (ii) Subject to Section 8.4, GSK will remit payment to Eurand of each Milestone Payment within
*** (***) Business Days after *** of an *** from Eurand following the earlier of (i) ***, or (ii)
***, of the *** of the ***.

     8.3 Royalties.

          8.3.1 Full Royalty. In consideration for the licenses and sublicenses granted to GSK by
Eurand in this Agreement, and subject to Sections 8.3.2, 8.3.3, 8.3.4, 8.3.5, 8.4, 10.4.3 and
10.6.3, GSK will pay to Eurand a percentage of Net Sales in each Calendar Year (the
“Royalties”), as follows:

	 	 	 
	 	 	Incremental Royalty Rate
	Aggregate Net Sales in the Territory	 	on Aggregate Net Sales in the
	in a Calendar Year	 	Territory in a Calendar Year
	 	 	 
	(i)   *** to U.S. ***
	 	***%
	 	 	 
	(ii)   U.S. *** to U.S. ***
	 	***%

23

 

	 	 	 
	 	 	Incremental Royalty Rate
	Aggregate Net Sales in the Territory	 	on Aggregate Net Sales in the
	in a Calendar Year	 	Territory in a Calendar Year
	 	 	 
	(iii)  U.S. *** to U.S. ***
	 	***%
	 	 	 
	(iv)  U.S. *** and above
	 	***%

          8.3.2 *** Royalty.

               (i) In the event that Competitive Products are marketed by a Third Party(ies) in the
Territory, GSK shall promptly notify Eurand of such event providing information regarding the
Competitive Product(s) and Third Party(ies). In the event that such Competitive Products in the
*** market share equal to *** (***) or *** in the *** of *** for Product (*** on the *** as the ***
using reference data published by ***, or *** source, provided that such other source is agreed
upon by the Steering Committee), then *** in the *** and *** (subject to Section 8.3.3), the
Royalties set forth in *** will be ***.

               (ii) In the event that *** are *** by a *** in the *** which, in the ***, achieve *** to ***
*** or *** in *** of *** for Product (*** on the *** as the *** using reference data published by
***, or *** source, provided that such other source is agreed upon by the Steering Committee), then
*** in the *** and *** (subject to Section ***), the Royalties set forth in Sections 8.3.1(ii),
8.3.1(iii) and 8.3.1(iv) will be ***.

               (iii) GSK shall provide the Steering Committee with such reference data described in Section
8.3.2(i) and 8.3.2(ii) detailing the prescriptions for Product and Competitive Products for such
Calendar Quarters for which GSK seeks a royalty rate *** in the corresponding following Calendar
Quarters.

          8.3.3 Commencement and Expiration of Royalty Obligations. GSK’s obligation to pay the
Royalties as provided in Section 8.3.1 and 8.3.2 will commence upon the First Commercial Sale in
the Territory and *** on the date that is *** (***) years from the date of the First Commercial
Sale in the Territory. During the period that is equal to or more than *** (***) *** from the date
of the First Commercial Sale in the Territory but in *** than *** (***) *** the First Commercial
Sale in the Territory, the Royalties set forth in Sections 8.3.1 and 8.3.2, as applicable, will be
*** to the *** of (i) ***, or (ii) the royalty rate owed by Eurand to *** under the *** Agreement
on sales of Product in the Territory *** percent (***%).

          8.3.4 *** to ***. For the avoidance of doubt, the Parties acknowledge and agree that the
Royalties payable by GSK to Eurand on Net Sales as provided in this Section 8.3 are *** of any ***
or *** by Eurand to *** under the *** Agreement on sales of Product in the Territory, and that GSK
will *** consideration to Eurand and/or *** on Net Sales in the Territory in any period during the
Term or thereafter.

          8.3.5 ***. Although as of the Effective Date, they have no actual knowledge of such a
requirement, the Parties acknowledge that, during the Term, one (1) or more royalty-bearing
licenses may be required from one (1) or more Third Parties in order for GSK and its Affiliates to
use, sell, offer for sale and import Product in the Field without infringing the Intellectual
Property Rights of one or more Third Parties. Subject first to Eurand’s rights and obligations
under Section 9.6.1, GSK will have the right but not the obligation, to use Commercially Reasonable
Efforts to *** and *** such Third Party licenses. If Eurand is *** to effect any of the ***
described in ***, and as

24

 

a result of GSK subsequently *** and ***, it is necessary for GSK to *** and/or ***
(collectively, the “***”) *** in order for *** Sections 2.1 and 2.3 *** such Third Party’s
rights, GSK will be *** Third Party Payments *** pursuant to this Section 8.3 during the Term;
provided, however, that GSK *** Royalties owed to Eurand ***; and provided, further that any ***
that *** be *** against Royalties in any *** may be *** to *** Royalties in ***, subject to this
Section 8.3.5. Specifically, GSK shall be *** to *** such ***: (i) only against Royalties *** by
Eurand after GSK pays such ***, and (ii) only with *** to *** for *** that are *** to practice the
***. For the avoidance of doubt, Eurand will have no obligation to make any payments to either GSK
or to such Third Party under this Section 8.3.5 in order for GSK to practice its rights under the
Eurand Intellectual Property Rights.

          8.3.6 Royalty Payment Terms.

               (i) Notwithstanding anything in this Agreement to the contrary, the Parties acknowledge and
agree that Royalties will only be payable on Net Sales occurring *** and *** the First Commercial
Sale by GSK, its Affiliates and their respective sublicensees to a Third Party.

               (ii) No later than *** (***) *** the *** of each ***, GSK shall use Commercially Reasonable
Efforts to report to Eurand the Net Sales in the Territory for the *** month.

               (iii) Subject to Section 8.4, within *** (***) *** the *** of each ***, GSK will report the
Net Sales in the *** and the Royalty owed on such Net Sales and will pay to Eurand all Royalties
due and payable on Net Sales in the ***, or portion thereof if applicable.

               (iv) Any and all Royalty payments made by GSK to Eurand pursuant to this Agreement will be
accompanied by a written statement setting forth the calculation of Royalties due.

               (v) In the event of a late payment of Royalties, GSK will pay to Eurand interest calculated on
a *** on the *** payment from the *** such payment was *** to the date such payment is received by
Eurand at a rate of *** percent (***%) per ***. In the event of a late payment of any overpaid
Royalties by Eurand to GSK as provided in Section 8.4.3(i), Eurand *** to GSK *** on a *** basis on
the *** from the *** such *** was *** to the *** such *** is *** by GSK at a rate of *** percent
(***%) ***.

     8.4 General Payment Terms. Notwithstanding anything to the contrary in this Section
8, all payments made by GSK to Eurand under this Agreement will be subject to the following:

          8.4.1 All payments made under this Agreement will be made in U.S. dollars. All payments will
be made by wire transfer in immediately available funds to one or more bank accounts to be
designated in writing by Eurand.

          8.4.2 If taxes, assessments, fees or other charges are required to be withheld from payments
to Eurand, GSK will make such payments to the applicable taxing authority as required to fulfill
such requirement and pay to Eurand the net amount of the Milestone Payments, Royalties or other
payments due. Receipts, if available, for all such withholdings will be provided to Eurand.

25

 

GSK will assist Eurand in claiming exemption from such deductions or withholdings under any
applicable double taxation or similar agreement or treaty.

          8.4.3 Audit Rights.

               (i) After the *** (***) anniversary of the date of First Commercial Sale and upon the
provision of not less than *** (***) calendar days’ prior written notice, Eurand will have the
right, during normal business hours not more than *** in each Calendar Year during the Term and for
*** (***) Calendar Year thereafter, using an independent public accountant designated by Eurand and
*** (the “Eurand Auditor”), to inspect GSK’s books of account, records, documents and
instruments for up to the previous *** (*** Calendar Years during the Term (or such lesser period
if Product has been commercialized for less than *** (***) Calendar Years), to ascertain the
accuracy of GSK’s Net Sales and the Royalty payments made by GSK to Eurand pursuant to this
Agreement. If such examination by the Eurand Auditor results in a determination that GSK’s Net
Sales or Royalty payments owed to Eurand by GSK have been understated, unpaid amounts due will be
paid by GSK to Eurand within *** (***) calendar *** after such Eurand Auditor notifies the Parties
of such discrepancy. If such examination results in a determination that GSK’s Net Sales or
Royalty payments owed to Eurand by GSK have been overstated, overpaid amounts due will be re-paid
by Eurand to GSK within *** (***) calendar *** after such Eurand Auditor notifies the Parties of
such discrepancy. The expense of such audit shall be Eurand’s unless the audit shall demonstrate
an underpayment of Royalties greater than *** percent (***%) between Royalties reported and paid
and those which were actually due, in which event the reasonable expenses of Eurand Auditor shall
be borne by GSK. The Eurand Auditor will report to the Parties *** its conclusions as to whether
GSK is in compliance with its Royalty obligations and the amount of any underpayment or
overpayment, and such report and the conclusions contained therein will constitute *** Confidential
Information.

               (ii) After the *** (***) anniversary of the *** and upon the provision of not less than ***
(***) calendar days’ prior written notice, GSK will have the right, during normal business hours
not more than *** in each Calendar Year during the Term and for *** (***) Calendar Year thereafter,
using an independent public accountant designated by GSK and reasonably acceptable to Eurand (the
“GSK Auditor”), to inspect Eurand’s books of account, records, documents and instruments
for up to the previous *** (***) Calendar Years during the Term (or such ***), to ascertain the
accuracy of the invoices provided by Eurand pursuant to Section *** and of the *** and *** and ***
incurred by Eurand in performing the Eurand Development Activities pursuant to this Agreement. If
such examination by the GSK Auditor results in a determination that amounts invoiced by Eurand
pursuant to Section *** have been overstated, such amounts overpaid by GSK will be *** by Eurand to
GSK within *** (***) calendar *** such GSK Auditor *** the Parties of such discrepancy. If such
examination results in a determination that amounts invoiced by Eurand have been understated, any
underpaid amounts due will be re-paid by GSK to Eurand within *** (***) calendar *** such GSK
Auditor notifies the Parties of such discrepancy. The expense of such audit shall be GSK’s unless
the audit shall demonstrate an overpayment by GSK of any amounts pursuant to Section 8.1 greater
than *** percent (***%) of what was actually owed to Eurand, in which event the reasonable expenses
of GSK Auditor shall be borne by Eurand. The GSK Auditor will report to the Parties *** its
conclusions as to whether Eurand has accurately invoiced GSK for amounts due pursuant to Section
8.1 and the conclusions contained therein will constitute Eurand Confidential Information.

26

 

9 INTELLECTUAL PROPERTY:

     9.1 Responsibility for Eurand Patent Rights Existing as of ***. Eurand will have ***
responsibility for and control over, subject to Sections *** and *** of the *** Agreement, and will
use its Commercially Reasonable Efforts with regard to, the preparation, filing, prosecution and
maintenance of the Eurand Patent Rights existing as of *** (the “***”) and Eurand will bear
all the costs and expenses associated therewith. Notwithstanding the foregoing, GSK will have the
right to *** within the ***, *** and *** which relate *** to the Program and/or GSK’s
commercialization of Product in the Field in the Territory (but only to the extent that Eurand
(***) conducts the applications and filings; provided, however, that Eurand will *** GSK with
copies of any applications or filings made by *** with respect to any ***), and *** to Eurand ***
and ***, which *** Eurand will consider in good faith. GSK will provide any such patent
consultation to Eurand at no cost to Eurand. Notwithstanding the foregoing, Eurand shall not be
required to make any disclosure that would violate its confidentiality obligations to *** under the
*** Agreement, although Eurand will use Commercially Reasonable Efforts to *** to *** to GSK.

     9.2 Responsibility for GSK Patent Rights Existing as of ***. GSK will have ***
responsibility for and ***, and will use its Commercially Reasonable Efforts with regard to, the
preparation, filing, prosecution and maintenance of the GSK Patent Rights existing as of *** and
GSK will bear all the costs and expenses associated therewith.

     9.3 Ownership of Inventions.

          9.3.1 At all times during the Term and thereafter, GSK will own the GSK Program Rights.
Eurand will at all times during the Term and thereafter own any and all inventions relating *** to
the ODT Technology.

          9.3.2 Each Party will promptly disclose to the Steering Committee any inventions or
improvements made or conceived by such Party, its Affiliates or any person or Entity under such
Party’s or its Affiliate’s supervision, either alone or jointly in the course of or as a result of
the activities under the Program (the “Inventions”); provided, however for the avoidance of
doubt, the term “Inventions” will not include or be deemed to include *** or *** or *** or its
Affiliates relating to *** and/or *** for Product. The Steering Committee will determine the
strategy for protecting all such Inventions, including, without limitation, the filing of patent
applications on any Inventions, in a manner consistent with this Section 9.3 and in accordance with
Section 5.6; provided, however, the Steering Committee shall not prevent Eurand from filing patent
applications that do not disclose or claim any GSK Inventions or prevent GSK from filing any
application that does not disclose or claim any Eurand Inventions.

          9.3.3 GSK will *** own Inventions which relate to the *** and/or ***, but excluding Inventions
relating *** to the ODT Technology (collectively, the “GSK Inventions”), irrespective of
whether the inventor is an employee of Eurand or its Affiliates or GSK or whether there are joint
inventors, some of whom are employees of Eurand (or its Affiliates) and some of whom are employees
of GSK. As determined by the Steering Committee, GSK will have the right, at its sole expense
using in-house or outside legal counsel selected ***, to prepare, file, prosecute, maintain and
extend any and all Patent Rights inside and/or outside of the Territory on GSK Inventions (the
“GSK Invention Patent Rights”). Notwithstanding the foregoing, Eurand will have the right
to review all pending patent applications included within the GSK Invention Patent Rights,
significant filings and other significant proceedings ***, and make recommendations to GSK

27

 

concerning them and their conduct, which recommendations GSK will consider in good faith.
Eurand will provide any such patent consultation to GSK at *** to GSK. Further, Eurand will, and
will cause its Affiliates and its and their respective employees to, *** GSK in preparing patent
applications on GSK Inventions to the extent such are related to the *** *** and will provide GSK
with *** of *** to the GSK Inventions. Any GSK Invention Patent Rights, except as set forth in
Section ***, will be deemed to be included within the GSK Patent Rights and any Know-How related to
such GSK Inventions will be deemed to be included within GSK Know-How.

          9.3.4 Eurand will solely own Inventions which relate *** (the “Eurand Inventions”),
irrespective of whether the inventor is an employee of GSK or its Affiliates or Eurand or whether
there are joint inventors, some of whom are employees of GSK (or its Affiliates) and some of whom
are employees of Eurand. As determined by the Steering Committee Eurand will have the right at ***
expense using in-house or outside legal counsel selected at Eurand’s sole discretion to prepare,
file, prosecute, maintain and extend any and all Patent Rights inside and/or outside of the
Territory on Eurand Inventions. GSK will, and will cause its Affiliates and its and their
respective employees to, cooperate with Eurand in preparing patent applications on Eurand
Inventions and to provide Eurand with appropriate assignment of Intellectual Property Rights to the
Eurand Inventions. Any patent applications and patents filed by or on behalf of Eurand on Eurand
Inventions, except as set forth in Section 9.4.2, will be deemed to be included within the Eurand
Patent Rights and any Know-How related to such Eurand Inventions will be deemed to be included
within Eurand Know-How.

          9.3.5 GSK will exclusively own the GSK Data and such GSK Data will be deemed to be GSK
Know-How and GSK Confidential Information, and will constitute part of the GSK Program Rights.
Eurand will exclusively own the Eurand Data and such Eurand Data will be deemed to be Eurand
Know-How and Eurand Confidential Information, and will constitute part of the Eurand Intellectual
Property Rights.

          9.3.6 Any information contained in a patent filing by a Party under this Agreement will be
subject to the confidentiality provisions of Section 13, unless and until such patent filing is
published by an applicable Patent Office, and the Confidential Information of a Party may not be
used by the other Party in a patent filing without the express written consent of such first Party.

     9.4 Abandoned Patent Rights.

          9.4.1 Should GSK elect to abandon any Patent Right contained in the GSK Invention Patent
Rights relating to the Formulation and/or Product, including, without limitation, any Patent Rights
on any GSK Invention relating to the Formulation and/or Product (the “Abandoned GSK Invention
Patent Rights”), it will (i) provide Eurand with written notice as soon as reasonably possible
after making such election but in any event no later than *** (***) calendar days after making such
election but in any event before a possible loss of rights, and Eurand will have the right to file,
prosecute and maintain any Abandoned Invention GSK Patent Rights in its sole discretion, at its
sole expense and in Eurand’s name, and such Abandoned Invention GSK Patent Rights will be deemed to
be included in the Eurand Patent Rights. For the avoidance of doubt, the Abandoned Invention GSK
Patent Rights will not include any Patent Rights contained in the GSK Invention Patent Rights that
may be abandoned by GSK which relate to the *** and/or ***.

28

 

          9.4.2 Should Eurand elect to abandon any Patent Right contained in the *** including, without
limitation, any Patent Rights on any Eurand Invention (the “Abandoned Eurand Patent
Rights”), it will (i) provide GSK with *** as soon as reasonably possible after making such
election but in any event no later than *** (***) calendar days after making such election but in
any event before a possible loss of rights, and GSK will have the right to file, prosecute and
maintain any Abandoned Eurand Patent Rights ***, at its *** expense and in Eurand’s name, GSK’s
name or the name of both GSK and Eurand, as determined by *** in its *** discretion, and such
Abandoned Eurand Patent Rights will be deemed to be included in the *** Patent Rights.

     9.5 Commercialization of Product and Competitive Product:

          9.5.1 Eurand acknowledges and agrees that during the Term: (i) ***, and will ***, *** pursuant
to this ***, the Clinical Supply Agreement and Commercial Supply Agreement *** for *** and/or ***
in the Field in any country in the world or assist any Third Party in ***, *** for *** and/or ***
in the Field in any country in the world; and (ii) Eurand will ***, and will cause its Affiliates
***, except as set forth in this Section 9.5 and in Section 10.6, *** for *** and/or *** in any
country in the world. If, after the date of the First Commercial Sale of Product in the Territory
provided that the date of the First Commercial Sale is after the *** *** or if the First Commercial
Sale has not occurred then the date that is *** (***) months after the ***, ***, Eurand, on its own
or through any of its Affiliates or any Third Party, desires to commercialize Product and/or
Competitive Product in the Field ***, Eurand will *** notice to GSK and thereby grant to GSK an ***
right to negotiate with Eurand for an *** license under the Eurand Intellectual Property Rights to
*** for *** and *** such *** and/or *** in the *** (each such notice referred to as a
“***”). GSK shall have *** (***) Right of Negotiation with respect to each ***.

          9.5.2 GSK must exercise a Right of Negotiation by providing written notice to Eurand (each
such notice referred to as a “Right of Negotiation Notice”) within *** (***) calendar days
after receiving written notice from Eurand as provided in Section 9.5.1 of such Right of
Negotiation.

          9.5.3 If GSK does not submit a Right of Negotiation Notice to Eurand as provided in Section
9.5.2 *** to the expiration of the *** (***) calendar day period referenced in Section 9.5.2, the
corresponding Right of Negotiation will immediately terminate *** that is *** the *** of such ***
(***) calendar day period and Eurand will have no further obligation to GSK with respect to such
Right of Negotiation for Product and/or Competitive Product (as applicable) in such country except
as provided below in Section 9.5.6.

          9.5.4 If GSK exercises a Right of Negotiation by providing a Right of Negotiation Notice as
provided in Section 9.5.2, the Parties will in good faith negotiate during the Right of Negotiation
Period a license and supply agreement pursuant to which GSK would obtain an *** license under the
Eurand Intellectual Property Rights to *** for *** and *** and/or *** in the Field in such ***, and
Eurand will supply GSK’s total requirements for clinical and commercial supply of bulk tablets of
Product in such *** (the “***”). The “Right of Negotiation Period” will be the
period that commences on the date on which GSK provides Eurand with a Right of Negotiation Notice
as provided in Section 9.5.2 (for the purposes of this Section 9.5.4 only, the “commencement date”)
and *** on the day *** following the *** (***) day after the ***. Each such Right of Negotiation
Period may be *** upon the *** of the *** prior to the *** thereof as provided in Section 9.5.5 or
earlier terminated by the termination of this Agreement. Notwithstanding the foregoing, *** will
have the

29

 

right, at *** and for *** during a Right of Negotiation Period, to terminate in writing such
Right of Negotiation Period which would terminate the corresponding Right of Negotiation.

          9.5.5 In the event the Parties have not executed the *** during the Right of Negotiation
Period, after starting to negotiate the terms and conditions thereof in good faith: (i) then at ***
request, the Parties will extend such Right of Negotiation Period for *** of *** (***) Business
Days; or (ii) if not extended by *** as provided in (i), such Right of Negotiation Period will
expire as provided in Section 9.5.4 and *** will have no further obligation to *** with respect to
such Right of Negotiation or Product and/or Competitive Product (as applicable) in such *** except
as provided in Section 9.5.6; provided, however, that in the making, having made, use, sale,
offering for sale and import of Product and/or Competitive Product in such country, *** covenants
and agrees it will ***, and will cause its Affiliates and any Third Party *** to, *** and *** the
*** of *** in the *** or *** and ***, *** (only pursuant to the Clinical Supply Agreement and the
Commercial Supply Agreement*** and *** in the ***.

          9.5.6 In the event that the Parties do not enter into a *** as provided in this Section 9.5,
then subject to Section 11.3.5(v) GSK will enter into a license agreement which will include the
following:

               (i) GSK will grant to Eurand an *** license with the right to grant sublicenses, under the GSK
Program Rights to make, have made, use, sell, offer for sale and import Product (if applicable) in
the Field in such country, *** to *** *** and *** as provided in Section *** and *** (if any) to
*** and *** in such *** to the extent *** under the Clinical Supply Agreement and the Commercial
Supply Agreement.

               (ii) GSK will grant to Eurand a *** license with the right to grant sublicenses, under the GSK
Program Rights to make, have made, use, sell, offer for sale and import Competitive Product (if
applicable) in the Field in such ***, *** and *** as provided in Section *** and *** (if any) ***
and *** in such *** to the extent *** under the Clinical Supply Agreement and the Commercial Supply
Agreement.

               (iii) In consideration for such license, but subject to Section 11.3.5(iii) Eurand will pay to
GSK *** on *** of *** and/or *** by Eurand, its Affiliates or sublicensees in such *** for a period
of *** after the *** of such *** and/or ***, at a *** to *** of *** of *** or *** (as applicable).
For the purposes of the license, “***” of *** and/or Competitive Product by Eurand, its Affiliates
and sublicensees will be calculated similarly to Net Sales under this Agreement. Further such
royalty will be payable by Eurand to GSK in the same manner in which Royalties are payable by GSK
to Eurand pursuant to Sections 8.3.6.

     9.6 Infringement. Eurand agrees that it will *** GSK with *** within *** (***)
Business *** the following: the *** (as defined in Section 8.2.***), the *** (as defined in Section
8.2.***), and thereafter whenever the *** is ***, in each case so that GSK may monitor the freedom
to use *** as contemplated under this Agreement ***. In the event that a claim of infringement of
a Third Party’s Intellectual Property Rights is made or brought against either Party or grounds for
a claim of infringement of a Third Party’s Intellectual Property Rights becomes known to either
Party, as a result of the activities under the Program or otherwise under the Agreement, the Party
receiving such claim or becoming aware of grounds for such claim shall promptly inform the other
Party, and the Parties shall consult with each other in order to develop a strategy for addressing
the alleged

30

 

infringement. Each Party shall reasonably cooperate with the other in any investigations
undertaken to determine any potential infringement.

          9.6.1 To the extent the alleged infringement relates primarily to the use of the Eurand
Intellectual Property Rights, Eurand shall take one or more of the following actions at ***
(simultaneously or sequentially):

               (i) ***, or

               (ii) ***, or

               (iii) *** and/or ***.

          9.6.2 If Eurand is unable to effect any of the actions described in Section 9.6.1, after
explaining to the Steering Committee in reasonable detail what actions Eurand has taken, then GSK
may exercise its rights under Section 8.3.5 with respect to alleged infringement related *** to the
use of the ***.

          9.6.3 In the event that the alleged infringement relates to the use of the *** but also
relates to an aspect of the Product other than ***, Eurand and GSK will work in good faith to
jointly address the alleged infringement. To the extent the alleged infringement does not relate to
the use of the ***, GSK may, at its *** discretion, cost and expense, defend the claim or obtain a
license to use the technology upon which the Third Party Claim is based, but, in any case, GSK
shall indemnify and hold harmless Eurand with respect to any such alleged infringement claim under
this Section 9.6.3 pursuant to Section 12.2.

     9.7 Third Party Infringement of Patents

          9.7.1 Each Party shall promptly report in writing to the other Party during the Term any (i)
known infringement or suspected infringement of any Patent Rights included in the *** or the ***,
(ii) unauthorized use or misappropriation of Confidential Information, Eurand Intellectual Property
Rights or GSK Program Rights by a Third Party, or (iii) known infringement or suspected
infringement relating to either the Formulation or Product (in each case, “Third Party
Infringement”) of which it becomes aware (including infringement under 35 U.S.C. Section
271(e)(2)), and which relate to a Product or a Competitive Product, and shall provide the other
Party with all available evidence indicative of said infringement, suspected infringement or
unauthorized use or misappropriation.

          9.7.2 In the event of a report of a Third Party Infringement under Section 9.7.1, Eurand and
GSK shall consult with each other in order to develop a strategy for addressing the Third Party
Infringement. In the event that the Parties agree to take legal action to stop the Third Party
Infringement (the “Action”), they shall agree upon legal counsel and unless they agree upon
a different formula for sharing the expenses (including attorney and expert fees) of such action
and for sharing any award or settlement, they shall share them equally. In the event that a Party
(the “Nonparticipating Party”) does not desire to participate in the Action, the other
Party shall be free (at its sole discretion) to bring the action (the “Participating
Party”) based on the Participating Party’s own Intellectual Property Rights in its own name, at
its own expense and retain any award or

31

 

settlement in its entirety. The Participating Party may, only with the written consent of the
Nonparticipating Party, bring an Action based on the Nonparticipating Party’s Intellectual Property
Rights (i.e., the Eurand Intellectual Property Rights if Eurand is the Nonparticipating Party and
the GSK Program Rights if GSK is the Nonparticipating Party), in its Participating Party’s own
name, and own expense, and retain any award or settlement in its entirety. The Nonparticipating
Party will in *** and ***, or *** to the *** Party if the *** Party ***, *** Party to legal or
regulatory harm. *** obligation to participate except to the extent that such ***, and shall ***
in connection therewith at *** charge to the other Party *** for *** of ***. If either Party
desires to retain counsel independently, at its own expense, the Party may do so, but it shall not
relieve the Party of its obligations under this section.

10 REPRESENTATIONS AND WARRANTIES:

     10.1 Mutual Representations and Warranties. Eurand and GSK each hereby represent and
warrant to the other as follows, as of the Effective Date:

          10.1.1 It is a corporation duly organized, validly existing and is in good standing under the
laws of its jurisdiction of formation, and has all requisite power and authority, corporate or
otherwise, to execute, deliver and perform this Agreement, the Clinical Supply Agreement (and
related quality agreement) and the Commercial Supply Agreement (and related quality agreement);

          10.1.2 The execution, delivery and performance of this Agreement have been duly authorized by
all necessary corporate action and do not and will not (i) require any consent or approval of its
stockholders, (ii) violate any provision of any Applicable Law or any provision of its certificate
of incorporation, by-laws or other founding document, or (iii) result in a breach of or constitute
a default under any material agreement, mortgage, lease, license, permit or other instrument or
obligation to which it is a party or by which it or its properties may be bound or affected;

          10.1.3 It is not currently debarred, suspended or otherwise excluded by any government agency
from receiving government contracts that would adversely affect its ability to perform its
obligations hereunder;

          10.1.4 It is not under any obligation to any Entity, contractual or otherwise, that is
conflicting or inconsistent in any respect with the terms of this Agreement or that would impede
the diligent and complete fulfillment of its obligations hereunder; and

          10.1.5 This Agreement is a legal, valid and binding obligation enforceable against it in
accordance with its terms and conditions, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws, from time to time in
effect, affecting creditor’s rights generally.

     10.2 Eurand Representations and Warranties. Eurand represents and warrants to GSK
that as of the Effective Date:

          10.2.1 It owns the entire right, title and interest in and to, or otherwise has the right to
grant the license or sublicense rights outlined in Section 2 under the Eurand Intellectual Property

32

 

Rights, all of which are, to Eurand’s actual knowledge, free and clear of any liens,
mortgages, security interests, charges, encumbrances or otherwise;

          10.2.2 It has not, up through and including the Effective Date, knowingly withheld any
material information in Eurand’s possession from GSK in response to GSK’s reasonable inquiries in
connection with GSK’s due diligence relating to the ODT Technology, this Agreement and the
underlying transaction, and to *** of its knowledge, the information related to the ODT Technology
that Eurand has provided to GSK prior to the *** is up-to-date and accurate in all material
respects;

          10.2.3 Except as set forth on Exhibit G, to the best of its knowledge, the Patent Rights
included in the Eurand Patent Rights are valid and enforceable and there are *** or threatened
claims or legal actions asserting that the Patent Rights included in the Eurand Patent Rights are
invalid or unenforceable;

          10.2.4 To *** of its knowledge, except with respect to ***, the ODT Technology will not
constitute an infringement of any patents, trade secrets, or other industrial or Intellectual
Property Rights of any Third Party;

          10.2.5 To *** of its knowledge, the Eurand Trademarks are valid and enforceable and that there
are no pending or threatened claims or legal actions asserting that such Eurand Trademarks are
invalid or unenforceable in the Territory; and

          10.2.6 Eurand has provided GSK with a redacted copy of the *** Agreement, including, without
limitation, any and all amendments made thereto as of the Effective Date. To *** of Eurand’s
knowledge, the *** Agreement remains in full force and effect and Eurand is in compliance in all
*** respects with the terms of the *** Agreement.

     10.3 GSK’s Representations and Warranties. GSK represents and warrants to Eurand that
as of the Effective Date:

          10.3.1 It owns the entire right, title and interest in and to, or otherwise has the right to
grant the license or sublicense rights outlined in Section 2 under the GSK Intellectual Property
Rights, all of which are, to GSK’s actual knowledge, free and clear of any liens, mortgages,
security interests, charges, encumbrances or otherwise; and

          10.3.2 To *** of GSK’s ***, the Drug Substance will not constitute and infringement of any
patents, trade secrets, or other industrial or Intellectual Property Rights of any Third Party.

     10.4 Covenants of Eurand and GSK.

          10.4.1 Eurand covenants to GSK that Eurand will not at any time during the Term, *** of *** or
the *** with ***, or otherwise in any manner that could *** to have a *** on GSK’s rights under the
*** to *** and *** (only to the extent provided in the Clinical Supply Agreement or Commercial
Supply Agreement), *** and *** Product in the Field.

          10.4.2 Eurand covenants to GSK that Eurand will *** take or omit to take any actions that
would constitute a material breach of the *** Agreement, which breach would be *** to

33

 

have a *** effect on GSK’s rights under the Eurand Intellectual Property Rights as set forth
in Section 2.1.

          10.4.3 Eurand covenants to GSK that, at all times during the Term, Eurand *** and take ***
available to it to *** and *** the *** and any of its rights thereunder, the loss or restriction of
which would in *** or *** with the exercise of any of GSK’s rights under this Agreement.
Notwithstanding any other provision hereof, in the event Eurand is in *** of the *** or becomes
aware of any set of facts or circumstances that make a *** of the *** *** or ***, and such ***
presents a *** of *** with, *** of or *** the exercise or scope of any of GSK’s rights under this
Agreement (or under any agreement entered into in connection herewith, including the Clinical
Supply Agreement and Commercial Supply Agreement), Eurand shall, *** GSK’s ***, use its ***rts to
*** GSK, on or *** or ***, to *** with respect to the Product that are ***. Further, *** and ***
will *** without the application of any *** as set forth in Section *** and GSK will, as of the ***
of the *** of this Agreement, have an *** license, with the right to ***, under the *** to *** and
*** and/or *** in the Field.

          10.4.4 Eurand covenants to GSK that Eurand will only use Drug Substance in its performance of
the Eurand Development Activities, and manufacture of CTM and Product for GSK pursuant to the
Clinical Supply Agreement and Commercial Supply Agreement, respectively.

          10.4.5 Eurand covenants to GSK that *** and for *** Eurand will ***, and will cause its
Affiliates *** during the Term and for *** ***, use any *** or *** in the making, have made, use,
sale, offering for *** and/or import of, or directly or indirectly assist any Third Party *** and
for *** in using any *** or *** in the making, having made, use, sale, offering for sale and/or
import of, any product other than as set forth in this Agreement, including *** for any *** which
has any *** or *** component to the drug release and which contains *** of the ***, whether or ***.

          10.4.6 GSK covenants to Eurand that GSK will not and will cause its Affiliates not to analyze
any of the prototypes of the Formulation or CTM provided hereunder to determine their composition
or the manner in which they have been manufactured unless and until required under the Program.

     10.5 Compliance with Laws. Each Party covenants and agrees that it will comply, and
will cause its respective Affiliates to and contractually mandate that its sublicensees will
comply, with all Applicable Laws in the performance of its respective obligations under this
Agreement.

     10.6 Non-Competition.

          10.6.1 Eurand represents and warrants to GSK that Eurand will not, and will cause its
Affiliates not to, make, have made, use, sell, offer for sale and/or import, or directly or
indirectly assist any Third Party in making, having made, using, offering for sale and/or importing
a Competitive Product in the Field in the Territory during the Term. GSK represents and warrants
to Eurand that GSK will not, and will cause its Affiliates not to, make, have made, use, sell,
offer for sale and/or import, or directly or indirectly assist any Third Party in the making,
having made, use, sale, offering for sale and/or import of, a Competitive Product in the Field in
the Territory during the Term.

34

 

          10.6.2 Notwithstanding anything contained in this Section 10.6 to the contrary, nothing herein
will, expressly or impliedly, preclude or restrict either Party (or its respective Affiliates) in
any way from (i) acquiring a majority of the voting stock, or all or substantially all of the
assets of, a Competing Business Entity or a Non-Competing Business Entity (as both such terms are
defined in Section 10.6.3 below); (ii) being acquired by a Competing Business Entity or a
Non-Competing Business Entity; or (iii) merging, amalgamating, taking over, or consolidating (or
engaging in any similar transaction) with a Competing Business Entity or Non-Competing Business
Entity (hereinafter, the actions referred to in (i), (ii) and (iii) of this Section 10.6.2 are
collectively referred to as “Merger” or “Merging” as of the date that any such
action becomes effectively complete).

          10.6.3 The term “Competing Business Entity” as used in Section 10.6.2 means an Entity
that markets a Competitive Product in the Field in the Territory during the Term. A
“Non-Competing Business Entity” means any other Entity other than a Competing Business
Entity. In the event that a Party or any of its Affiliates *** with a *** during the Term (the
“*** Party”), such *** Party will *** the other Party *** Business Days after the date of
the *** of the *** or *** of such ***, as to whether such *** will *** or *** the *** of the *** by
the ***. If the Merging Party notifies the other Party that it plans to so ***, then the other
Party may *** this Agreement for *** of Section 10.6.1 any *** than *** after the ***. The *** or
*** of any such *** by the *** or *** during such *** *** the *** is *** and *** be *** for ***
other Party ***: (i) *** or *** *** is *** to *** itself of the *** as promptly as *** such ***
period, and (ii) the *** continues to comply with the terms of this Agreement in all respects;
provided, however, that during the period in which *** is *** a *** in the *** pursuant to this
Section 10.6.3, *** will have ***, and *** will have *** to *** on *** during such period. If the
*** notifies the other Party that the *** does *** to ***, then the other Party may *** this
Agreement upon prior written notice to *** that in the event ***, then *** as of the *** of the ***
of this Agreement *** will have an *** license, with the right to ***, under the *** to *** for ***
and *** in the ***, except with respect to any countries in which *** has obtained an *** license
under the *** pursuant to Section *** to make, *** and ***.

     10.7 Limitation of Warranty. EXCEPT AS EXPRESSLY STATED IN THIS SECTION 10 NEITHER
PARTY MAKES ANY OTHER REPRESENTATION OR WARRANTY, AND EACH PARTY EXPRESSLY DISCLAIMS ALL IMPLIED
WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NON-INFRINGEMENT, WITH RESPECT TO ANY PRODUCT, MATERIALS, INFORMATION, SERVICES OR LICENSES
PROVIDED TO THE OTHER PARTY PURSUANT TO THIS AGREEMENT.

11 TERM AND TERMINATION

     11.1 Term. The term of this Agreement (the “Term”) will commence on the
Effective Date, and unless sooner terminated as provided in this Sections 10.4.3, 10.6.3, or 11,
will expire on the date GSK’s obligations to pay Royalties as provided in Section ***. *** of this
Agreement, *** and ***, and *** or *** to ***.

     11.2 Termination.

35

 

          11.2.1 By GSK. GSK may terminate this Agreement *** with *** (***) calendar days’ *** notice
to Eurand if such termination is prior to the *** and ***, in each case if based upon a *** or ***
or ***.

          11.2.2 By Either Party for Material Breach. Either Party may terminate this Agreement in its
entirety upon written notice to the other Party in the event that the other Party is in material
default or breach of any of its material obligations hereunder, and fails to remedy any such
default or breach within *** (***) calendar days without (i) providing a written explanation
reasonably satisfactory to the non-defaulting Party that a default has not occurred or (ii)
commencing to cure the default within *** (***) days of such notice and thereafter curing such
default within *** (***) days of such notice; or in the case of failure to pay any uncontested
amounts due hereunder, *** (***) calendar days (in each case, the “Cure Period”) after
notice thereof by the non-defaulting/non-breaching Party. If such default or breach is not
corrected within the applicable Cure Period, the non-defaulting/non-breaching Party will have the
right to immediately terminate this Agreement by giving written notice to the Party in default or
breach. However, in the event that the Party in default provides a written explanation to the
non-defaulting Party and there is a dispute regarding whether the explanation is reasonably
satisfactory, the dispute shall be resolved in accordance with Section 14.14 and the Cure Period
shall be extended during the pendency of the resolution of the dispute.

          11.2.3 By Mutual Consent. The Parties may terminate this Agreement in its entirety at any
time and for any reason during the Term upon their mutual written agreement.

          11.2.4 By Either Party for Bankruptcy. Either Party may terminate this Agreement in its
entirety at any time during the Term by giving written notice to the other Party if the other Party
files in any court or agency pursuant to any statute or regulation of any state or country, a
petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the
appointment of a receiver or trustee of the Party or of its assets, or if the other Party is served
with an involuntary petition against it, filed in any insolvency proceeding, and such petition will
not be dismissed with sixty (60) calendar days after the filing thereof, or if the other Party
makes a general assignment for the benefit of creditors. Notwithstanding the bankruptcy of Eurand,
or the impairment of performance by Eurand of its obligations under this Agreement as a result of
bankruptcy or insolvency of *** will be entitled to retain all rights and licenses granted to ***
under this Agreement. All rights and licenses granted under or pursuant to this Agreement by ***
are, and will otherwise be deemed to be, for purposes of Article 365(n) of the Bankruptcy Code,
licenses of rights to “intellectual property” as defined under Article 101(52) of the Bankruptcy
Code. The Parties agree that ***, as a licensee of such rights under this Agreement, will retain
and may fully exercise all of its rights and elections under the Bankruptcy Code. The Parties
further agree that, in the event of the commencement of a bankruptcy proceeding by or against
Eurand under the Bankruptcy Code, *** of (or ***o, as appropriate) *** and *** of such *** and
same, ***, will be *** (i) upon any such *** of a *** GSK, unless *** to *** to *** all of its ***
under this Agreement, or (ii) if not delivered under (i) above, upon the rejection of this
Agreement by or on behalf of Eurand upon written request therefor by GSK.

          11.2.5 Eurand may terminate this Agreement in the event that: (i) GSK, *** to ***, ***
conducting any GSK Development Activities for ***, or (ii) GSK fails to make *** in the Territory
within *** of the ***, or (iii) GSK discontinues selling the Product in the Territory, *** case
***, such *** is *** to *** or ***, or *** of this Agreement or the *** Agreement or *** is

36

 

using *** to address. The provisions of this paragraph shall operate independently of the
cure provisions in Section 11.2.2.

     11.3 Effects of Termination.

          11.3.1 Upon termination of this Agreement, Eurand will have the right to retain any sums
already paid by GSK hereunder.

          11.3.2 The expiration or termination of this Agreement for any reason shall not relieve the
Parties of any obligation (including any payments) that accrued prior to such expiration or
termination. Further, neither Party will be precluded from pursuing all rights and remedies that
it may have hereunder at law or in equity with respect to any breach of this Agreement nor
prejudice either Party’s right to obtain performance of any obligation.

          11.3.3 Upon termination of this Agreement by GSK pursuant to Section 11.2.2, GSK will *** have
an ***, with *** to ***, under the *** to *** and ***.

          11.3.4 If *** has *** at the time of termination of this ***, and such sales will be subject
to the Royalty provisions contained herein.

          11.3.5 Post-Termination Rights of Eurand Under the *** Program Rights.

               (i) *** to *** and *** to the ***.

                    (A) If this Agreement is terminated *** and *** by the Parties pursuant to Section *** or by
*** pursuant to Section ***, then (1) GSK will grant to Eurand a worldwide, non-exclusive license,
with the right to grant sublicenses, under the GSK Program Rights to make, have made and use
Product in the Field for the *** of *** Product in the ***, and (2) after the *** Patent Expiration
Date, GSK will grant to Eurand a worldwide, non-exclusive license, with the right to grant
sublicenses, under the GSK Program Rights to make, have made, use, sell, offer for sale and import
Product in the Field, provided, that Eurand pays a ***. Such *** will be *** by *** to *** in the
same manner in which *** are *** by GSK to Eurand pursuant to Sections 8.3.6.

                    (B) If this Agreement is terminated *** and *** Sections ***, *** or ***, then (1) upon the
effective date of the termination of this Agreement, Eurand will have a worldwide, non-exclusive
license, with the right to grant sublicenses, under the GSK Program Rights to make, have made and
use Product in the Field for the *** purpose of ***, and (2) after the *** Patent Expiration Date,
Eurand will have a worldwide, non-exclusive license, with the right to grant sublicenses, under the
GSK Program Rights to make, have made, use, sell, offer for sale and import Product in the Field.
The license rights of Eurand under the *** pursuant to this Section 11.3.5(i)(B) will be royalty
free.

               (ii) *** to *** and *** the ***.

                    (A) If this Agreement is terminated *** to the *** and *** by the Parties pursuant to Section
*** or by *** pursuant to Section ***, then GSK will grant to Eurand a worldwide, *** license,
with the right to grant sublicenses, under the GSK Program Rights to make, have made, use, sell,
offer for sale, import and seek Regulatory Approvals for the Product in the Field, provided that
***. Such *** will be payable by ***

37

 

                    (B) If this Agreement is terminated *** to *** and *** by *** pursuant to Section *** or ***,
then upon the effective date of the termination of this Agreement, Eurand will have a worldwide,
non-exclusive license, with the right to grant sublicenses, under the GSK Program Rights to make,
have made, use, sell, offer for sale, import and seek Regulatory Approvals for the Product in the
Field. The license rights of Eurand under the GSK Program Rights pursuant to this Section
11.3.5(ii)(B) will be ***.

               (iii) *** and *** to the ***.

                    (A) If this Agreement is terminated *** and *** by *** pursuant to Sections *** or ***, then
(1) upon the effective date of the termination of this Agreement***5, Eurand will have a worldwide,
*** license, with the right to grant sublicenses, under the GSK Program Rights to make, have made
and use Product in the Field for the *** purpose of *** and (2) ***, Eurand will have a worldwide,
non-exclusive license, with the right to grant sublicenses, under the GSK Program Rights to make,
have made, use, sell, offer for sale, import, and seek Regulatory Approval for the Product in the
Field. The license granted by GSK to Eurand under this Section 11.3.5(iii)(A) will be royalty
free.

                    (B) If this Agreement is terminated *** pursuant to Section ***, by *** pursuant to Section
*** or by *** pursuant to Section ***, then (1) ***, *** grant to Eurand a worldwide, *** license,
with the right to grant sublicenses, under the GSK Program Rights to make, have made and use
Product in the Field for the sole purpose of seeking Regulatory Approvals for the Product in the
Field, and (2) ***, GSK will grant to Eurand a worldwide, non-exclusive license, with the right to
grant sublicenses, under the GSK Program Rights to make, have made, use, sell, offer for sale,
import, and seek Regulatory Approval for the Product in the Field, ***. ***

               (iv) *** the *** and *** the ***.

                    (A) If this Agreement is terminated *** pursuant to Sections *** or ***, then upon the
effective date of the termination of this Agreement, Eurand will have a worldwide, *** license,
with the right to grant sublicenses, under the GSK Program Rights to make, have made, use, sell,
offer for sale, import and seek Regulatory Approvals for the Product in the Field. The license
granted by GSK to Eurand under this Section 11.3.5(iii)(B) will be royalty free.

                    (B) If this Agreement is terminated *** pursuant to Section ***, by *** pursuant to Section
*** or by *** pursuant to Section ***, then GSK will grant to Eurand a worldwide, non-exclusive
license, with the right to grant sublicenses, under the GSK Program Rights to make, have made, use,
sell, offer for sale, import, and seek Regulatory Approval for the Product in the Field, ***. ***

               (v) For Cause by GSK. If this Agreement is terminated before or after the First Commercial
Sale pursuant to Section *** or by *** to *** or *** and as to those countries in which Eurand is
already commercializing Product pursuant to Section 9.5, such licenses (and any sublicenses granted
by Eurand) under the GSK Program Rights in such countries will terminate as of the effective date
of the termination of this Agreement.

               (vi) Notwithstanding anything to the contrary in this Section 11.3.5 or in this Agreement, the
Parties acknowledge and agree that the term “GSK Program Rights “ included in this Section 11.3.5
will ***, the *** *** and any *** Intellectual Property Rights *** and/or ***

38

 

Product. Further, the Parties acknowledge and agree that the licenses and rights that may be
granted to Eurand pursuant to this Section 11.3.5 will *** or *** or under the ***, *** and/or any
*** relating to the *** Product.

     11.4 Survival. The following provisions will survive any expiration or termination of
this Agreement:

          11.4.1 Sections *** and ***, all with regard to *** Product pursuant to Section ***;

          11.4.2 Sections *** (solely with respect to payments which have accrued prior to the
expiration or termination of this Agreement), 8.3.6 (solely with respect to payments which have
accrued prior to the expiration or termination of this Agreement*** (last sentence only), *** (last
sentence only), *** and ***; and

          11.4.3 Section 1 for the sole purposes of interpreting the obligations and liabilities between
the Parties surviving termination of this Agreement;

which will survive termination or expiration of this Agreement for the time period specified in
such Sections or if no such time period is specified, indefinitely.

12 INDEMNIFICATION AND INSURANCE: SUBLICENSEES

     12.1 Indemnification of GSK. Eurand shall indemnify and hold GSK harmless from and
against all damages, losses, expenses, claims (including wrongful death), demands, suits,
penalties, judgments or administrative and judicial orders and liabilities (including, but not
limited to, reasonable counsel fees and expenses) incurred, assessed or sustained by GSK, its
Affiliates, or any of their respective officers, directors, and employees resulting from or arising
out of a claim or proceeding brought by a Third Party with respect to or involving or arising out
of (i) Eurand’s negligence or willful misconduct, (ii) Eurand’s breach of any representation,
warranty, obligation or *** of this Agreement; (iii) *** or *** of Eurand’s *** of any *** or ***
of this Agreement; (iv) *** of any *** of *** of a *** as set forth in Section ***; and/or (v) ***
in any *** as set forth in Section *** provided that *** is a *** in such ***; except however in
each of (i) through (v) to the extent such claim arises from an event for which GSK has an
obligation to indemnify Eurand under Section 12.2 or pursuant to the Clinical Supply Agreement
Commercial Supply Agreement.

     12.2 Indemnification of Eurand. GSK shall indemnify and hold Eurand and its
Affiliates harmless from and against all damages, losses, expenses, claims (including wrongful
death and product liability), demands, suits, penalties, judgments or administrative and judicial
orders and liabilities (including, but not limited to, reasonable counsel fees and expenses)
incurred, assessed or sustained by Eurand, its Affiliates, or any of their respective officers,
directors, and employees resulting from or arising out of a claim or proceeding brought by a Third
Party with respect to or involving or arising out of (i) GSK’s negligence or willful misconduct;
(ii) GSK’s breach of any representation, warranty, obligation or covenant of this Agreement; (iii)
Eurand’s use of the Drug Substance in conducting the Eurand Development Activities to the extent
the claim arises from or relates to GSK’s failure to provide up to date information procedures and
warnings regarding the safe handling and use of the Drug Substance; (iv) the sale, packaging,
labeling, advertising, distribution, design, consumption or use of any CTM or Product; (v)
resulting from or arising out of GSK’s *** of

39

 

any *** or *** of this Agreement; (vi) GSK’s defense of any claim of infringement of a Third
Party’s Intellectual Property Rights as set forth in Section ***; and/or (vii) GSK’s participation
in any Action as set forth in Section 9.7.2 provided that Eurand is a Nonparticipating Party in
such Action; except however in each *** to the extent such claim arises from an event for which
Eurand has an obligation to indemnify GSK under Section 12.1 or pursuant to the Clinical Supply
Agreement or Commercial Supply Agreement.

     12.3 Notice and Legal Defense. Promptly after receipt by a Party seeking
indemnification under Section 12.1 or 12.2 (the “Indemnified Party”) of any claim, suit or
proceeding brought by a Third Party or notice of the commencement of any action, administrative or
legal proceeding, or investigation as to which the indemnity provided for in Section 12.1 and 12.2
hereof may apply, the Party seeking indemnification shall notify the indemnifying Party of such
fact (i) within *** (***) calendar days after receipt of services of process of the commencement
of a suit or (ii) for non-litigated matters, within *** (***) calendar days after receipt of notice
thereof; provided, however, that in each case, the failure to give such notice will not relieve the
Indemnifying Party of its obligation to provide indemnification hereunder except if, and to the
extent that, such failure materially and adversely affects the ability of the Indemnifying Party to
defend the applicable claim, suit or proceeding. The Indemnified Party will permit the
Indemnifying Party to assume sole control over the defense of any such claim, suit or proceeding at
the Indemnifying Party’s own cost and expense; and, ***, the Indemnified Party will co-operate as
reasonably requested in the defense of the claim, suit or proceeding. The Indemnified Party will
have the right to retain its own counsel at its own expense, provided, however, that if the
Indemnified Party reasonably concludes, based on advice from counsel, that the Indemnifying Party
and the Indemnified Party have material conflicting interests with respect to such claim, suit or
proceeding, the Indemnifying Party will be responsible for the reasonable fees and expenses of
counsel to the Indemnified Party solely in connection therewith. The Indemnifying Party may not
settle such action or claim, or otherwise consent to an adverse judgment in such action or claim,
which would subject the Indemnified Party to an injunction or if such settlement or judgment would
materially diminish or limit or otherwise adversely affect the rights, activities or financial
interests of the Indemnified Party, without the express written consent of the Indemnified Party.

     12.4 Consequential Damages IN NO EVENT, SHALL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING OUT OF, OR
AS THE RESULT OF, THE SALE, DELIVERY, NON-DELIVERY, SERVICING, USE OR LOSS OF USE OF ANY CTM OR
PRODUCT, REGARDLESS OF WHETHER SUCH CLAIM IS BASED UPON BREACH OF WARRANTY, BREACH OF CONTRACT,
NEGLIGENCE, STRICT LIABILITY OR ANY OTHER LEGAL THEORY.

     12.5 Insurance *** will, at its sole cost and expense, carry *** insurance,
including *** and *** insurance, which coverage shall have limits of liability which are
commercially reasonable but ***. Such coverage shall be maintained during the Term and for ***
following the expiration or earlier termination of this Agreement or if such coverage is ***, for
*** (***) years *** of this Agreement. *** agrees that during the Term and for *** (***) years
following the expiration or earlier termination of this Agreement, it will *** for the same amounts
and types of coverage set forth above.

40

 

13 CONFIDENTIALITY:

     13.1 Confidential Information. Eurand and GSK each hereby recognize and acknowledge
that the other Party’s Confidential Information constitutes valuable and confidential information.
Subject to other express provisions of this Agreement, Eurand and GSK each agree that during the
Term, and for a period of *** (***) years after the effective date of the expiration or earlier
termination of this Agreement for any reason:

          13.1.1 The Parties will not disclose, directly or indirectly, in any manner whatsoever to any
Third Parties any Confidential Information received from the other Party (the “Disclosing
Party”) without ***, and the other Party (“Recipient”) will keep confidential, all of
the Disclosing Party’s Confidential Information that is disclosed to Recipient. Recipient agrees
to use the same level of care in safeguarding the Disclosing Party’s Confidential Information that
Recipient uses with its own confidential information of a similar nature, but in no event less than
reasonable care. Recipient will restrict disclosure of the Disclosing Party’s Confidential
Information solely to those of its (or its Affiliate’s) employees or representatives having a need
to know such Confidential Information in order to exercise a right granted or fulfill an obligation
under, this Agreement.

          13.1.2 Both Parties shall ensure that each of their respective employees and representatives
who will have access to the Confidential Information of the Disclosing Party are bound by an
obligation to maintain such Confidential Information in accordance with the confidentiality
obligations set forth in this Section 13.

          13.1.3 Recipient will not use the Disclosing Party’s Confidential Information in any manner
whatsoever other than solely in connection with the performance of its obligations, or exercise of
its rights, under this Agreement.

          13.1.4 Except as permitted by this Section 13, or as otherwise required by Applicable Law, and
subject to the *** Agreement, Eurand and GSK each agree not to disclose any terms or conditions of
this Agreement or the existence of this Agreement to any Third Party without the *** of the other
Party, *** each Party *** to *** the *** of this *** to its *** and *** or ***, to *** and ***, and
to such Party’s consultants and advisors, and to its permitted licensees and sublicensees on the
condition that such Entities agree to keep such Confidential Information in accordance with the
obligations set forth in this Section 13.

          13.1.5 In the event Recipient is requested pursuant to, or required by, Applicable Law to
disclose any of the Disclosing Party’s Confidential Information, it will notify the Disclosing
Party promptly so that the Disclosing Party may seek a protective order or other appropriate remedy
or, in the Disclosing Party’s sole discretion, waive compliance with the confidentiality provisions
of this Agreement. ***, in connection with any *** to be *** for the ***rpose. In the event that
no such protective order or other remedy is obtained, or that the Disclosing Party waives
compliance with the confidentiality provisions of this Agreement, Recipient will, without liability
hereunder, furnish only that portion of the Confidential Information which Recipient is advised by
its counsel is legally required, and Recipient will exercise reasonable efforts to obtain reliable
assurances that confidential treatment will be accorded the Disclosing Party’s Confidential
Information.

          13.1.6 Upon the effective date of the termination of this Agreement for any reason, either
Party may request in writing, and the other Party will either: (i) promptly destroy all copies of
the requesting Party’s Confidential Information in the possession of the other Party and confirm
such

41

 

destruction in writing to the requesting Party; or (ii) promptly deliver to the requesting
Party, at the other Party’s expense, all copies of such Confidential Information in the possession
of the other Party, provided, however, the other Party will be permitted to retain one (1) copy of
the requesting Party’s Confidential Information for the sole purpose of determining any continuing
obligations hereunder. Additionally, upon termination of this Agreement for any reason, both
Parties will immediately cease all use of the other Party’s Confidential Information including, to
the extent reasonably possible, removing all references to such Confidential Information ***: (a)
*** and ***. For the avoidance of doubt, each Party will be permitted to use the other Party’s
Confidential Information after the expiration of this Agreement and will not be obligated to return
such Confidential Information of the other Party in accordance with this Section 13.1.6. All
Confidential Information will continue to be subject to the terms of this Agreement for the period
set forth in Section 13.1.

          13.1.7 Each Party represents and warrants to the other Party that it has all right, title and
ownership interest in and to its Confidential Information and/or it has the right to disclose its
Confidential Information to the other Party. Each Party may seek to enforce all rights and legal
remedies available under this Section 13 or by law, including injunctive relief, specific
performance and other equitable remedies in the event of a breach of the provisions of this Section
13 by the other Party.

          13.1.8 Notwithstanding the provisions of this Section 13, the Parties agree that nothing
contained in this Section 13 will prevent GSK, in any way whatsoever from disclosing any Eurand
Confidential Information, without obtaining Eurand’s prior consent, to any Affiliate of GSK or to
any Third Party for the purposes of engaging in the development (including the Clinical Studies and
filing of Regulatory Approvals for Product) and commercialization of Product in the Field in the
Territory, provided such Affiliate or Third Party is under an obligation of confidentiality at
least as restrictive as the obligations contained in Section 13 herein with respect to the
Confidential Information.

          13.1.9 The confidentiality obligations set forth in this Section 13 will supersede the
Confidential Disclosure Agreements dated as of October 10, 2005 and November 30, 2005, between the
Parties (“Confidentiality Agreements”), and will govern any and all information disclosed
by either Party to the other pursuant thereto, and will be retroactively effective to the date of
the Confidentiality Agreement.

     13.2 Publicity. Any announcements or publicity regarding the existence of this
Agreement or any terms or subject matter of this Agreement by either Eurand and/or GSK will be
agreed to by Eurand and GSK in writing in advance of any such announcement or publicity. The Party
preparing any such announcement, publicity or press release will provide the other Party with a
draft thereof reasonably in advance of disclosure so as to permit the other Party to review and
comment on such announcement, publicity or press release, unless Applicable Law otherwise requires
immediate public disclosure. The foregoing notwithstanding, the Parties will agree on a press
release to announce the execution of this Agreement, together with a corresponding question/answer
outline for use in responding to inquiries about this Agreement. Thereafter, Eurand and GSK may
each disclose to Third Parties the information contained in such press release and question/answer
outline without the need for further approval by the other Party. Each Party agrees that it will
co-operate fully with the other with respect to all disclosures regarding this Agreement to the
Securities Exchange Commission and any other governmental or regulatory agencies, including

42

 

requests for confidential treatment of proprietary information of either Party included in any
such disclosure. Further, *** and *** that it will *** to disclose the *** and/or ***, as it
relates solely to this Agreement, in any announcement, publicity or press release prior to ***
unless agreed to by ***.

     13.3 Publication.

          13.3.1 Eurand will not submit for written, electronic or oral publication any document,
manuscript, abstract or the like (a “Eurand Publication”) which includes any GSK Data or
any other information regarding, related to, Product in the Field without first providing GSK with
a copy of such Eurand Publication for GSK’s review. GSK will review and provide its comments and
changes, if any, to such Eurand Publication which is an abstract, within fifteen (15) Business Days
after receipt of the Eurand Publication from Eurand and to such Eurand Publication which is a
manuscript or any other document, within thirty (30) Business Days after receipt of the Eurand
Publication from Eurand, or in each of foregoing cases, such longer period of time as agreed to by
the Parties in order to afford GSK a reasonable opportunity to protect its rights under any GSK
Intellectual Property Rights. Eurand will incorporate any comments and changes received from GSK
as provided herein with respect to such Eurand Publication. Any GSK contributions will be
acknowledged in any such Eurand Publication.

          13.3.2 GSK will not submit for written, electronic or oral publication any document,
manuscript, abstract or the like (a “GSK Publication”) which includes any Eurand Data or
any other information regarding, related to, Product in the Field without first providing Eurand
with a copy of such GSK Publication for Eurand’s review. Eurand will review and provide its
comments and changes, if any, to such GSK Publication which is an abstract, within fifteen (15)
Business Days after receipt of the GSK Publication from GSK and to such GSK Publication which is a
manuscript or any other document, within thirty (30) Business Days after receipt of the GSK
Publication from GSK, or in each of the foregoing cases, such longer period of time as agreed to by
the Parties in order to afford Eurand a reasonable opportunity to protect its rights under any
Eurand Intellectual Property Rights. GSK will consider in good faith any comments and changes
received from GSK as provided herein with respect to such GSK Publication. Any Eurand
contributions will be acknowledged in any such GSK Publication.

     13.4 Clinical Trial Registries. The Parties acknowledge and agree that
notwithstanding anything to the contrary contained in this Section 13, GSK may publish the
protocols, results and/or summaries of any clinical trials relating to Compound and/or Product,
including without limitation the Data, on a clinical trial register maintained by GSK or its
Affiliate and the protocols of clinical trials relating to Compound and/or Product on
www.ClinicalTrials.gov (and/or in each case publish the results, summaries and/or protocols of
clinical trials on such other websites and/or repositories as required by Applicable Law or such
GSK’s or its Affiliate’s standard operating procedures), and that each such publication will not be
a breach of the confidentiality obligations provided in this Section 13.

14 MISCELLANEOUS:

     14.1 Assignment Neither this Agreement nor any interest herein may be assigned, in
whole or in part, by either Party hereto without the prior written consent of the other Party
hereto, provided that either Party shall have the right to assign all or part of its rights,
interest and obligations

43

 

to an Affiliate, a successor to a controlling or majority share of such Party, or to a
successor to substantially all the assets of the business to which this Agreement relates. Subject
to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties
hereto and their respective permitted successors and assigns. Eurand acknowledges and agrees that
*** under this Agreement as provided in this Section 14.1 ***, and ***.

     14.2 Safety Data Exchange Agreement. The procedures for sharing and reporting of
Adverse Events and Serious Adverse Events encountered by each Party relating to or associated in
any way with the development, use, manufacture and/or commercialization of Compound, Drug Substance
and/or Product as contemplated under this Agreement, which procedures will be no less stringent
that those set forth in the applicable guidelines of the ICH and will be sufficient to allow each
Party to satisfy both expedited and periodic regulatory reporting requirements, will be as set
forth in a Safety Data Exchange Agreement to be finalized and exchanged by the Parties within
ninety (90) days after the Effective Date, or such other date as agreed upon by the Steering
Committee. For the purposes of this Agreement, the terms “Adverse Event” and “Serious Adverse
Event” will have the meanings ascribed to them in the Safety Data Exchange Agreement. For the
purposes of this Section 14.2, “ICH” means the International Committee on Harmonization developed
through a collaboration between the FDA and regulatory agencies in the European Union and Japan to
harmonize regulatory requirements to produce marketing applications acceptable to the countries of
the European Union, Japan and the United States.

     14.3 No Implied Waiver. Failure by either Party hereto on one or more occasions to
avail itself of a right conferred by this Agreement shall in no event be construed as a waiver of
such Party’s right to enforce said right in the future.

     14.4 Choice of Law. This Agreement and all rights and obligations hereunder,
including matters of construction, validity and performance, shall be exclusively governed by and
construed in accordance with the laws of the state of New York, without regard to the choice-of-law
provisions thereof. The Parties hereby consent to service of process by mailing or delivering such
service to the Party at its respective principal business address. The Parties hereby submit to
the jurisdiction of the *** for the resolution of any disputes through any judicial mechanism.

     14.5 No Third Party Beneficiaries. No Third Party, including any employee of any
Party to this Agreement, will have or acquire any rights by reason of this Agreement.

     14.6 Notices. Any notice and other communication required or permitted to be given
hereunder shall be in writing and shall be deemed given when delivered personally, telecopied or
received by registered mail, return receipt requested, to the Parties at the following addresses:

If to Eurand, to:

Eurand, Inc.

845 Center Drive

Vandalia, OH 45377

Attention: Office of Business Development

Facsimile: (937) 898-1093

If to GSK, to:

44

 

GlaxoSmithKline R&D Limited

Greenford Road

Greenford, Middlesex

UB6 0HE

UK

Attention: Vice President, Worldwide Business Development Transactions

Facsimile: +44 208 966 5371

with a copy to:

Smith Kline Beecham Corporation d/b/a GlaxoSmithKline

2301 Renaissance Boulevard

King of Prussia, PA 19406-2772

Attention: Vice President and Associate General Counsel, R&D Legal Operations,

Business Development Transactions Team

Facsimile: 610-787-7084

or at such other addresses as the Parties may designate by notice sent in accordance with this
Section 14.6.

     14.7 Execution of Additional Documents. Each Party hereto agrees to execute such
further documents or agreements, and do all such other commercially reasonable acts, as may be
reasonably necessary or desirable to effect the purpose of this Agreement and carry out its
provisions.

     14.8 Severability. If any provision of this Agreement is or becomes invalid or is
ruled invalid by any court of competent jurisdiction or is deemed unenforceable, such provision
shall be considered severed from this Agreement, and it is the intention of the Parties that the
remainder of the Agreement will not be affected. The Parties shall make a good faith effort to
replace any invalid or unenforceable provision with a valid and enforceable one such that the
objectives contemplated by the Parties when entering this Agreement may be realized.

     14.9 Captions/Headings. The article and section captions or headings in this
Agreement have been inserted as a matter of convenience and are not part of this Agreement.

     14.10 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original of this Agreement and all of which together shall
constitute one and the same instrument.

     14.11 Independent Relationship. Nothing herein contained shall be deemed to create an
employment, agency, joint venture or partnership relationship between the Parties hereto or any of
their agents or employees, or any other legal arrangement that would impose liability upon one
Party for the act or failure to act of the other Party. Neither Party shall have any power to
enter into any contracts or commitments or to incur any liabilities in the name of, or on behalf
of, the other or to bind the other Party in any respect whatsoever. All activities undertaken by
Eurand hereunder shall be that of an independent contractor.

45

 

     14.12 Entire Agreement. This Agreement, together with the Safety Data Exchange
Agreement, Clinical Supply Agreement (and related quality agreement) and Commercial Supply
Agreement (and related quality agreement), contains the entire agreement between the Parties
related to subject matter hereof, and this Agreement cannot be amended, varied or abridged in any
manner except by amendment in writing duly signed by the Parties. This Agreement takes the place
of any existing agreement, arrangements or discussions between the Parties relating to the subject
matter hereof, whether oral or written, including, without limitation, the Confidentiality
Agreements.

     14.13 Force Majeure. Neither Eurand nor GSK will be liable for failure of or delay in
performing obligations set forth in this Agreement (other than the payment of amounts owed), and
neither will be deemed in breach of its obligations, if such failure or delay is due to a Force
Majeure Event. When a Force Majeure Event arises, the Parties will discuss what, if any,
modification of the terms of this Agreement may be required in order to arrive at an equitable
solution.

     14.14 Resolution of Disputes.

          14.14.1 If the dispute cannot be resolved *** as set forth in Section 5.6, then either Party
may submit the matter to arbitration conducted in New York, New York in accordance with ***. The
award of such arbitration shall be final, binding and non-appealable, except to the extent provided
for in the rules of the ***. The arbitrator(s) will have the discretion to impose the cost of the
arbitration upon the losing Party or divide it between the Parties upon any terms which he/they
deem appropriate; provided, however, that each Party shall bear its own legal fees and costs. A
judgment upon an award rendered by the arbitrator(s) may be entered in any court of competent
jurisdiction, or application may be made to such court for confirmation of such award or a judicial
acceptance of such award, and for an order of enforcement or other legal remedy.

          14.14.2 If the total aggregate amount at issue in a dispute to be arbitrated is ***, the
number of arbitrators shall be ***. The arbitrator shall be selected by the ***. If the total
aggregate amount at issue in a dispute to be arbitrated is ***, the number of arbitrators shall be
***. Each Party shall select *** arbitrator from among a list of qualified arbitrators compiled by
the ***. The *** arbitrators so selected shall select a *** qualified arbitrator, who shall *** of
the tribunal. If the *** arbitrators selected by the Parties fail to agree on the third arbitrator
within *** (***) calendar days of the selection of the *** arbitrator, the *** qualified arbitrator
shall be *** in *** with the rules of the ***. In addition to the qualification criteria for
arbitrators established by the rules of the ***, each arbitrator shall meet the following
additional criteria: (i) the arbitrator shall be experienced in resolving the type of dispute(s)
at issue; and (ii) the arbitrator shall have technical or intellectual property related background
and/or knowledge if relevant to the dispute.

          14.14.3 Notwithstanding the foregoing, either Party may, without waiving any remedy under this
Agreement, seek, from any court having jurisdiction, any interim relief or provisional relief
(including, without limitation, injunctive relief) that is necessary to protect the rights or
property of that Party pending the establishment of the arbitral tribunal set forth in this Section
14.14.

[The remainder of this page is intentionally left blank.]

46

 

     IN WITNESS WHEREOF, the Parties have caused this Development and License Agreement to be
executed by their duly authorized representatives as of the Effective Date.

	 	 	 	 	 	 	 	 	 	 	 
	EURAND, INC.	 	 	 	SMITH KLINE BEECHAM CORPORATION D/B/A GLAXOSMITHKLINE	 	 
	 
	By:

	 	/s/ John Fraher
 

Name: John Fraher 

Title: President,
Eurand North America
	 	 
	 	By:
	 	/s/   Donal F. Parman
 

Name: Donald F. Parman 

Title: Vice President & Secretary
	 	 

47

 

EXHIBIT A

EURAND PATENT RIGHTS

***

 

 

EXHIBIT B

EURAND TRADEMARKS — United States

***

2

 

EXHIBIT C

GSK PATENT RIGHTS

***

3

 

EXHIBIT D

PROPOSAL

Product Development Proposal

***

Formulation Development and Clinical Trial Materials

***

4

 

EXHIBIT E

KEY TERMS FOR CLINICAL SUPPLY AGREEMENT

***

 

 

EXHIBIT F

KEY TERMS FOR COMMERCIAL SUPPLY AGREEMENT

***

2

 

EXHIBIT G

***

3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]