Document:

Exhibit

Exhibit 10.1
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Double asterisks denote omissions.

EXCLUSIVE LICENSE AND SUPPLY AGREEMENT
THIS EXCLUSIVE LICENSE AND SUPPLY AGREEMENT (this “Agreement”) is made and entered into as of May 12, 2015 (the “Effective Date”), by and between Faes Farma, S.A., a corporation (sociedad anónima) organized under the Laws of Spain and having offices located at Avenida Autonomía 10, 48.940 Leioa (Biscay) Spain (“Faes”), and Marathon Pharmaceuticals, LLC, a limited liability company organized under the Laws of the State of Delaware (U.S.A.) and having offices located at 1033 Skokie Boulevard, Suite 600, Northbrook, Illinois 60062 U.S.A. (“Marathon”).  Faes and Marathon are sometimes individually referred to herein as a “Party” and collectively as the “Parties”.
WHEREAS, Faes owns the Faes Product and owns or controls (whether by license or otherwise) the Licensed Assets.
WHEREAS, Marathon is conducting research and development with respect to the Marathon Tablet Product in and for the Territory.
WHEREAS, the Parties desire to enter into this Agreement, pursuant to which, among other things, (i) Faes shall grant to Marathon a license in, to and under the Faes Product and the Licensed Assets to research, Develop, obtain regulatory approval for, market, promote, distribute, sell, use, commercialize and, solely as expressly permitted under this Agreement, manufacture (or have manufactured by an Affiliate, subsidiary or Third Party) the Marathon Suspension Product in and for the Territory, as a complement to the Marathon Tablet Product, (ii) Marathon shall (except as expressly provided for under this Agreement) purchase exclusively from Faes all of its requirements for Marathon Suspension Product for the Territory during the Exclusive Manufacturing Term, and (iii) Marathon shall pay Royalties to Faes during the Royalty Term, on and subject to the terms and conditions set forth herein.
NOW, THEREFORE, for and in consideration of the covenants, conditions and undertakings set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, on and subject to the terms and conditions hereof, the Parties, intending legally to be bound hereby, agree as follows:
Section 1 
Definitions; Interpretation
1.1    Definitions.  Capitalized terms used, but not otherwise defined, in this Agreement have the following meanings:

1
ActiveUS 164142681

“Act” shall mean the United States Federal Food, Drug and Cosmetic Act of 1938, as amended, and all regulations promulgated thereunder.
“Active Pharmaceutical Ingredient” or “API” means, with respect to the Finished Product, the applicable active pharmaceutical ingredients.
“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such Person.  For purposes of this definition, a Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise.
“[**]” has the meaning set forth in Section 6.4.
“[**]” has the meaning set forth in Section 6.4.
“Annual Net Sales” means, with respect to any Royalty Payment Year within the Royalty Term, the aggregate sales revenues of Marathon or its Affiliates, subsidiaries or sublicensees with respect to sales of the Marathon Suspension Product in the Territory to Third Parties (excluding for such purposes any Non-Commercial Marathon Suspension Product) during such Royalty Payment Year, reduced by accruals in accordance with GAAP (to the extent applicable) for customer returns, refunds, discounts, rebates and other credits and allowances made with respect to such sales of the Marathon Suspension Product during or with respect to such Royalty Payment Year (including, but not limited to, prompt pay discounts, product returns, bad debt, Medicaid, chargebacks, fees-for-service and Tricare), which are consistent with standard industry custom and practice.
“API Specifications” means, with respect to the API, the applicable specifications contained in Marathon’s effective FDA-approved IND for investigational product use and in Marathon’s FDA-approved NDA for commercial product use, as in effect from time to time during the Manufacturing Term, which shall consider the API specifications communicated by Faes to Marathon.
“Business Day” means mean any day except a Saturday, Sunday or a day on which a commercial bank in Madrid, Spain, Leioa, Biscay, Spain or Chicago, Illinois, U.S.A. is authorized to close.
“Calendar Quarter” shall mean the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31, with the first Calendar Quarter being the one commencing closest to ten (10) calendar months prior to the then reasonably anticipated FDA Approval date for the Marathon Suspension Product in the Territory.
“Calendar Year” shall mean a period of twelve (12) consecutive calendar months ending on December 31.
“Closing” means the closing of the transactions contemplated by this Agreement.

2
ActiveUS 164142681

“Closing Payment” means the one-time, non-reimbursable and non-creditable payment of €[**] Euros) to be made to Faes by Marathon under Section 4.3 at the Closing.
“Cost of Goods Sold” or “COGS” means, with respect to Finished Product Manufactured and supplied to Marathon by Faes under Section 6, the sum of the Direct Expenses and Manufacturing Overhead incurred by Faes in, and reasonably allocable to, the Manufacture of such Finished Product, where, as used herein:
(a)    “Direct Expenses” means (i) those direct material and labor expenses which are incurred specifically to Manufacture such Finished Product, including costs of raw materials.  Direct labor expenses include salary and fringe benefits (but exclude amounts associated with equity compensation or option plans) for personnel directly involved in the Manufacture of such Finished Product in accordance with specified quality requirements (e.g., cGMP, ISO) such as production, quality control, quality assurance and other personnel who participate directly in the production of such Finished Product and components thereof, and (ii) logistics expenses for supplying such Finished Product to Marathon, including import and export duties, applicable Taxes, reasonable and customary brokerage fees, shipping insurance fees, port fees and storage fees, shipping and handling, quality control and quality assurance.  Direct Expenses shall also include reasonable out-of-pocket payments to Third Parties for direct services performed in the Manufacture of such Finished Product or components thereof; and
(b)    “Manufacturing Overhead” means a reasonable allocation of other Manufacturing expenses associated with the Manufacture of quantities of such Finished Product, including (i) Faes personnel supporting the direct Manufacturing of such Finished Product, including labor and materials for quality control, quality assurance, raw material acquisition and acceptance, document control, calibration/validation of equipment used in the Manufacture of such Finished Product and other similar expenses, (ii) depreciation of or rent/lease expenses for property, plant or equipment used in the Manufacture of such Finished Product, (iii) direct plan management (e.g., supervisors and purchasing), (iv) plant services (e.g., engineering and production planning) associated with the Manufacture of such Finished Product, (v) plant maintenance, (vi) costs of plant fire insurance coverage, and (vii) other direct Manufacturing costs associated with the Manufacture of such Finished Product, in each case to the extent incurred by Faes in connection with the Manufacture of such Finished Product and reasonably allocable to the Manufacture of such Finished Product.
For purposes of this Agreement, Cost of Goods Sold shall be calculated in accordance with IFRS and shall be consistent from year-to-year during the Manufacturing Term.  The methodology to be used in making the allocations of any costs included in Cost of Goods Sold shall upon Marathon’s request be reviewed by the Parties.  As of the Effective Date, the Cost of Goods Sold with respect to a Unit manufactured and commercialized by Faes without complying with applicable U.S. FDA standards is €[**] per Unit.  This Cost of Goods Sold may vary substantially if new investments or new procedures have to be implemented in the production process in order to comply with the applicable U.S. FDA standards or in case of modifications of certain specifications mutually agreed by the Parties.

3
ActiveUS 164142681

“current Good Manufacturing Practice” or “cGMP” means all current good manufacturing practices (cGMP) and all applicable rules and regulations of Governmental Entities, both inside the Territory and in Spain (provided, however, that in the event any of the Manufacturing is performed in a jurisdiction or jurisdictions outside the Territory or Spain, cGMP shall also include all then applicable current good manufacturing practices and applicable rules and regulations of Governmental Entities of such additional jurisdictions), as applied at the Facility site(s) of manufacture and control, as amended from time to time and in effect during the Manufacturing Term.
“Develop”, “Development” and “Developing” means, with respect to the Marathon Suspension Product, drug development activities, including, but not limited to, CMC development, test method development and stability testing, assay development, audit development, toxicology, formulation, quality assurance/quality control development, statistical analysis, clinical studies, packaging development, regulatory affairs and the preparation, filing and prosecution of an NDA in the Territory.
“Exclusive Manufacturing Term” means that portion of the Manufacturing Term ending on the seventh (7th) anniversary of the FDA Approval date.
“Facility” means Faes’ manufacturing facility located in Leioa, Biscay, Spain, together with any other Faes facility in which the Manufacturing of the Finished Product occurs.
“Faes Product” means the deflazacort oral suspension pharmaceutical product as owned and currently supplied by Faes in certain markets in the world.
“FDA” means the U.S. Food and Drug Administration or any successor thereof.
“FDA Approval” means written approval by the FDA of the first Marathon Suspension Product NDA filed by or on behalf of Marathon or its Affiliates, subsidiaries, designees or sublicensees with an approved label indication for the treatment in humans of duchenne muscular dystrophy or another indication.
“Finished Product” means finished, labeled, bottled and packaged (in primary and/or secondary packaging, as mutually agreed upon by the Parties) Marathon Suspension Product for commercial sale Manufactured and supplied to Marathon by Faes under Section 6.
“Force Majeure Event” means, with respect to a Party, any event which is beyond the reasonable control of such Party, including, but not limited to, the following events:  earthquake, storm, flood, fire or other acts of nature, epidemic, war, riot, public disturbance, strike or lockouts, customs closure, failure or default of public utilities or common carriers, government actions, terrorist attack, involuntary destruction of production facilities or the like (including, but not limited to, with respect to Faes, an inability to secure the necessary API, despite Faes’ best efforts to do so, or, with respect to either or both Parties, a change in the FDA’s related requirements).
“GAAP” means United States generally accepted accounting principles, consistently applied.

4
ActiveUS 164142681

“Governmental Entity” means any court, agency, authority, department, legislative or regulatory body or other instrumentality of any government or country or of any national, federal state, provincial, regional, county, city or other political subdivision of any such government or any supranational organization of which any such country is a member or quasi-governmental authority or self-regulatory organization of competent authority, including, but not limited to, the FDA.
“IFRS” means International Financial Reporting Standards, consistently applied.
“IND” means an Investigational New Drug application filed with the FDA or any successor thereof in the Territory.
“IND Materials” means the materials listed in Appendix 1 to this Agreement.
“Initial Manufacturing Term” means the period commencing on the Effective Date and ending on the twentieth (20th) anniversary thereof, subject to earlier termination in accordance with Section 6.12(b).
“Initial Royalty Term” means, with respect to the Marathon Suspension Product, the period commencing on the FDA Approval date and ending on the seventh (7th) anniversary thereof.
“Intellectual Property” means any patents, patent applications, patent disclosures and inventions, trade secrets and other confidential and proprietary information (including, but not limited to, Inventions (whether patentable or unpatentable), and other intellectual property rights (excluding trademarks, service marks and trade names) and all copies and embodiments thereof (in whatever form or medium) and all modifications, improvements, additions, supplements, updates, renewals, continuations, continuations-in-part, reexaminations, reissues and extensions thereof.
“Inventions” means any inventions, developments, discoveries, improvements, works of authorship, or expressions thereof, whether or not subject to patent, copyright, trademark, trade secret protection or other intellectual property right protection (in the United States or elsewhere), and whether or not reduced to practice.
“Know-How” means any and all tangible and intangible information and materials, including research and development data, regulatory submissions and correspondence, manufacturing information and processes, formulations, assays, cell lines, sequences, composition of matter, constructs, discoveries, improvements, modifications, processes, methods, protocols, formulas, utility, data (including physical, chemical, biological, toxicological, pharmacological, preclinical, clinical, and veterinary data), results, inventions, know-how and trade secrets, patentable or otherwise, and all other scientific, marketing, financial and commercial information or data.
“Knowledge” means, with respect to a Party, the actual knowledge of such Party and its directors, managers, officers and employees, after due inquiry.
“Law” means any statute, law, ordinance, regulatory rule, code or order of a Governmental Entity.

5
ActiveUS 164142681

“License Term” means the period commencing on the Effective Date and continuing in perpetuity.
“Licensed Assets” means the Faes Product dossier and all chemistry, manufacturing and controls (“CMC”) data, Intellectual Property, Know-How, Technology and other information owned or controlled (whether by license or otherwise) (a) by Faes as of the Effective Date or (b) is developed by Faes during the Manufacturing Term, which in either case would support an NDA filing in the Territory by Marathon for the Marathon Suspension Product, including, but not limited to, the IND Materials.
“Lien” means any lien, mortgage, security interest, pledge, defect of title and other similar encumbrance.
“Losses” has the meaning set forth in Section 10.10.
“Manufacture” and “Manufacturing” means all activities related to the production, manufacture, processing, filling, finishing, labeling, packaging, shipping and holding of the Finished Product or any intermediate thereof, including process development, process qualification and validation, scale-up, pre-clinical, clinical and commercial manufacture and analytical development, product characterization, stability testing, quality assurance and quality control.
“Manufacturing Term” means the Initial Manufacturing Term, together with any Renewed Manufacturing Terms.
“Marathon Suspension Product” means a deflazacort oral suspension pharmaceutical product Developed by Marathon under this Agreement based upon the Faes Product and utilizing the Licensed Assets and approved by the FDA for the treatment in humans of duchenne muscular dystrophy or another indication pursuant to an NDA filed by Marathon or its Affiliates, subsidiaries, designees or sublicensees.
“Marathon Tablet Product” means a deflazacort tablet pharmaceutical product for the treatment in humans of duchenne muscular dystrophy or another indication.
“Minimum Annual Royalty Payments” has the meaning set forth in Section 7.3(a)(ii).
“NDA” means a New Drug Application, validly issued and approved by the FDA or any successor thereof in the Territory.
“NDA Approval Milestone Payment” means the one-time, non-reimbursable and non- creditable payment of €[**] Euros) to be made to Faes by Marathon under Section 7.2 upon FDA Approval.
“NDA Submission and Acceptance Milestone Payment” means the one-time, non-reimbursable and non-creditable payment of €[**] Euros) to be made to Faes by Marathon under Section 7.1 upon submission to, and acceptance, by the FDA of the first Marathon Suspension Product NDA filed by Marathon or its Affiliates, subsidiaries, designees or sublicensees with a 

6
ActiveUS 164142681

proposed label indication for the treatment in humans of duchenne muscular dystrophy or another indication.
“Non-Commercial Marathon Suspension Product” means any Marathon Suspension Product Manufactured and supplied by Faes to Marathon under Section 6 and used or distributed by Marathon or its Affiliates, subsidiaries or sublicensees under or in connection with sampling programs, compassionate use/patient assistance/indigent care programs or clinical studies, programs or trials (including Marathon’s Expanded Access Program).
“Non-Commercial Marathon Suspension Product Units Prepayment Amount” means the result of the following formula for the relevant period:  [**].
“Non-Commercial Marathon Suspension Product Units Report” means, with respect to the Non-Commercial Marathon Suspension Product during the Royalty Term, a written report or reports showing each of the following with respect to the Non-Commercial Marathon Suspension Product in the Territory:  (a) Volume in Units of Non-Commercial Marathon Suspension Product used or distributed, stating the applicable batch number of such Units; and (b) a description of the non-commercial use of those Units.
“Non-Exclusive Manufacturing Term” means the Manufacturing Term, excluding the Exclusive Manufacturing Term.
“Per Unit Supply Price” means (a) with respect to the Initial Royalty Term, €[**] Euros) per Unit; and (b) with respect to the Subsequent Royalty Term, an amount per Unit equal to Faes’ actual COGS per Unit (not to exceed in any event €[**] Euros) per Unit); provided, however, that (1) in the event that Faes’ actual COGS per Unit during such Subsequent Royalty Term exceed €[**] Euros) per Unit, Faes shall have the right to terminate its obligation to Manufacture and supply Finished Product to Marathon under Section 6 of this Agreement on at least twelve (12) calendar months’ prior written notice of such termination (provided that, as a condition to exercising such termination right, Faes shall [**] in which case, Marathon shall be [**]; and (2) in the event that Faes’ does not terminate its obligation to Manufacture and supply Finished Product to Marathon under Section 6 of this Agreement in accordance with the foregoing clause (1), [**].
“Person” means any individual, corporation, partnership, joint venture, limited liability company, trust or unincorporated organization or government or any agency or political subdivision thereof.
“Pharmacovigilance Agreement” means the mutually acceptable Pharmacovigilance Agreement to be entered into between the Parties.
“[**]” has the meaning set forth in Section 5.3(b).
“Product Specifications” means, with respect to Finished Product to be Manufactured and supplied under this Agreement, the applicable specifications contained in Marathon’s effective FDA-approved IND for investigational product use and in Marathon’s FDA-approved NDA for 

7
ActiveUS 164142681

commercial product use, as in effect from time to time during the Manufacturing Term, which shall consider the product specifications communicated by Faes to Marathon.
“Quality Agreement” means the quality or technical agreement covering the Finished Product to be Manufactured and supplied by Faes to Marathon under Section 6, which shall set out, among other things, the policies, procedures, and standards by which the Parties will coordinate and implement the operational and quality assurance activities and regulatory compliance objectives contemplated under this Agreement with respect to the Finished Product in and for the Territory (including, but not limited to, change control processes, changes to the Specifications and other changes to the API and/or Marathon Suspension Product).
“Regulatory Filings” means, with respect to the Marathon Suspension Product, any submission to the FDA of any appropriate regulatory application, and shall include any IND or NDA.
“Renewed Manufacturing Term” has the meaning set forth in Section 6.12(a).
“Royalties” has the meaning set forth in Section 7.3.
“Royalty Term” means the Initial Royalty Term or the Subsequent Royalty Term, as the case may be.
“Royalty Payment Year” means, with respect to the Marathon Suspension Product, each calendar year (or portion thereof) during the Royalty Term.
“Royalty Payments” has the meaning set forth in Section 7.3.
“Sales & Royalty Report” means, with respect to the Marathon Suspension Product during the Royalty Term, a written report or reports showing each of the following (in US Dollars) with respect to the Marathon Suspension Product in the Territory:  [**].
“[**]” has the meaning set forth in Section 6.4.
“Specifications” means the API Specifications and the Product Specifications.
“Subsequent Royalty Term” means, with respect to the Marathon Suspension Product, the period commencing on the seventh (7th) anniversary of the FDA Approval date and ending on the twentieth anniversary of the Effective Date.
“Taxes” means all taxes of any kind, and all charges, fees, customs, levies, duties, imposts, required deposits or other assessments, including all federal, state, local or foreign net income, capital gains, gross income, gross receipt, property, franchise, sales, VAT, use, excise, withholding, payroll, employment, social security, worker’s compensation, unemployment, occupation, capital stock, ad valorem, value added, transfer, gains, windfall profits, net worth, asset, transaction, and other taxes, and any interest, penalties or additions to tax with respect thereto, imposed upon any Party by any taxing authority or other Governmental Entity under applicable Law.

8
ActiveUS 164142681

“Technology” means any processes, techniques, batch records, specifications, formulations, assays, know-how, trade secrets and proprietary data rights.
“Territory” means the United States of America and its territories, possessions, commonwealths and protectorates.
“Third Party” means a Person who is not a Party or an Affiliate or subsidiary thereof.
“Unit” means one 13 ml bottle of Finished Product.
“Unit Prepayment Amount” means, with respect to any Calendar Quarter, the product of (a) the number of Units sold by Marathon and its Affiliates, subsidiaries and sublicensees to Third Party customers during such Calendar Quarter, times (b) the applicable Per Unit Supply Price for such Units.
1.2    Interpretation.  In this Agreement, unless otherwise specified:
(a)    “includes” and “including” shall mean respectively includes and including without limitation;
(b)    words denoting the singular shall include the plural and vice versa and words denoting any gender shall include all genders;
(c)    the Schedules and other attachments form part of the operative provision of this Agreement and references to this Agreement shall, unless the context otherwise requires, include references to the Schedules and attachments;
(d)    references to Sections are to Sections of this Agreement unless otherwise specified;
(e)    the headings in this Agreement are for information only and shall not be considered in the interpretation of this Agreement;
(f)    any reference to “writing” or “written” includes faxes and any legible reproduction of words delivered in permanent and tangible form;
(g)    the words “hereof’, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement;
(h)    references to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; and
(i)    the Parties agree that the terms and conditions of this Agreement are the result of negotiations between the Parties and that this Agreement shall not be construed in favour of or against any Party by reason of the extent to which any Party participated in its preparation.
Section 2 
Representations and Warranties

9
ActiveUS 164142681

2.1    Representations and Warranties of Marathon.  Marathon represents and warrants to Faes that:
(a)    Marathon is a limited liability company duly formed under the Laws of the State of Delaware (U.S.A.);
(b)    Marathon has all requisite limited liability company power and authority to execute, deliver and perform this Agreement, and, upon the execution and delivery of this Agreement by the Parties hereto, this Agreement will constitute a valid and binding obligation of Marathon, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar Laws affecting the enforcement of creditors’ rights generally and to general principles of equity;
(c)    the execution, delivery and performance of this Agreement by Marathon do not conflict with, or constitute a breach of, any material contract or agreement to which Marathon is a party or by which Marathon is bound;
(d)    there is no litigation, proceeding or claim pending or, to Marathon’s Knowledge, threatened before any Governmental Entity that would prevent the consummation of any of the transactions contemplated by this Agreement, and no consent, authorization or approval of any Third Party (including, but not limited to, a Governmental Entity) is required or necessary in connection with this Agreement or the consummation of the transactions contemplated hereby; and
(e)    there is no broker, finder or financial advisor acting or who has acted on behalf of Marathon or its Affiliates who is entitled to receive any brokerage or finder’s or financial advisory fee in connection with the transactions contemplated by this Agreement.
2.2    Representations and Warranties of Faes.  Faes represents and warrants to Marathon that:
(a)    Faes is a corporation (sociedad anónima) duly organized under the Laws of Spain;
(b)    Faes has all requisite corporate power and authority to execute, deliver and perform this Agreement, and, upon the execution and delivery of this Agreement by the Parties hereto, this Agreement will constitute a valid and binding obligation of Faes, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar Laws affecting the enforcement of creditors’ rights generally and to general principles of equity;
(c)    the execution, delivery and performance of this Agreement by Faes do not conflict with, or constitute a breach of, any material contract or agreement to which Faes is a party or by which Faes is bound;
(d)    there is no litigation, proceeding or claim pending or, to Faes’ Knowledge, threatened before any Governmental Entity (i) relating to the Faes Product or any of the Licensed Assets, or (ii) that would prevent the consummation of any of the transactions contemplated by this Agreement, 

10
ActiveUS 164142681

and no consent, authorization or approval of any Third Party (including, but not limited to, a Governmental Entity) is required or necessary in connection with this Agreement or the consummation of the transactions contemplated hereby;
(e)    Faes has, and at the Closing will have, (i) good and valid title to the Faes Product and the Licensed Assets to be licensed to Marathon by Faes under this Agreement, with the full right, power and authority to grant to Marathon the licenses contemplated by this Agreement, and (ii) a valid, irrevocable and perpetual license and right to hold, use and sublicense to Marathon the Licensed Assets to be sublicensed to Marathon by Faes under this Agreement, in each case free and clear of any and all Liens;
(f)    neither Faes nor its Affiliates have granted to any Third Party any license, sublicense or other right or interest in or with respect to the Faes Product or any of the Licensed Assets in or with respect to the Territory, and no Third Party has a superior right to Faes or its Affiliates in or with respect to the Faes Product or the use of any of the Licensed Assets in or with respect to the Territory;
(g)    to Faes’ Knowledge, no Third Party is engaging in any activity that contravenes, infringes or encroaches upon, misappropriates or otherwise violates any of the Licensed Assets.  None of the Licensed Assets (i) contravenes, infringes or encroaches upon, misappropriates or otherwise violates the intellectual property or other proprietary rights or interests of any Third Party or (ii) is involved in any cancellation, nullification, reissue, interference, re-examination, or opposition proceedings, and no inequitable conduct that would be in violation of 37 C.F.R. § 1.56, or its foreign equivalent, if applicable, has been committed in the prosecution of any of the same; all maintenance fees, annuity fees, renewal fees and similar payment obligations with respect to the Licensed Assets have been timely paid; no litigation, proceeding or claim is pending or, to Faes’ Knowledge, threatened against Faes or its Affiliates (A) based upon, challenging or seeking to deny or restrict the use of any of the Licensed Assets or (B) alleging that the use of any of the Licensed Assets contravenes, infringes or encroaches upon, misappropriates or otherwise violates the intellectual property or other proprietary rights or interests of any Third Party; and
(h)    there is no broker, finder or financial advisor acting or who has acted on behalf of Faes or its Affiliates who is entitled to receive any brokerage or finder’s or financial advisory fee in connection with the transactions contemplated by this Agreement.
Section 3 
License Grant
3.1    License Grants.  During the License Term, Faes hereby grants to Marathon (a) a right and license in, to and under the Faes Product and (b) a right and license or sublicense, as the case may be, in, to and under the Licensed Assets, in each case (i) including the right to grant sublicenses or sub-sublicenses, as the case may be, with respect thereto through multiple tiers to Marathon’s Affiliates or subsidiaries and/or Third Parties (on written notice to Faes), and (ii) to research, Develop, seek and obtain regulatory approval for, market, promote, distribute, offer to 

11
ActiveUS 164142681

sell and/or sell, use, commercialize and, solely as expressly permitted under this Agreement, manufacture (or have manufactured by an Affiliate, subsidiary or Third Party) the Marathon Suspension Product in and for the Territory.  The foregoing rights and licenses shall be exclusive (even as to Faes and its Affiliates) during the Manufacturing Term and non-exclusive thereafter.  If Marathon grants a sublicense or sub-sublicense, as the case may be, with respect to its rights and licenses under this Section 3 to a Third Party, (A) each such sublicense or sub-sublicense shall be in writing, (B) the terms and conditions of such sublicense or sub-sublicense shall be consistent with the terms and conditions of this Agreement and shall not jeopardize, reduce or in any other way limit Faes’ rights under this Agreement and (C) Marathon shall be liable for any such sublicensee’s or sub-sublicensee’s breach of this Agreement or Losses caused to Faes as a result of such sublicenses or sub-sublicenses.
3.2    Right to List or Otherwise Include Licensed Assets in Regulatory Filings.  The rights and licenses granted in this Section 3 include the right for Marathon or its Affiliates, subsidiaries, designees or sublicensees to list or otherwise include, as appropriate, any Licensed Assets in any Regulatory Filings (including the “Orange Book”, if applicable) with respect to the Marathon Suspension Product in the Territory.
3.3    Reservation of Rights by Faes and its Affiliates.
(a)    The Parties acknowledge and agree that, subject to the terms and conditions of this Agreement, Faes and its Affiliates reserve all rights under the Licensed Assets to research, develop and manufacture the Faes Product for any and all purposes both inside the Territory (with Marathon’s prior written consent, not to be unreasonably withheld) or outside the Territory.
(b)    The rights and licenses granted to Marathon under this Agreement shall not include any right to research, develop, seek and obtain regulatory approval for, market, promote, distribute, offer to sell and/or sell, market, use, distribute, commercialize, import, manufacture and/or have manufactured the Faes Product and/or the Marathon Suspension Product outside the Territory, provided, however, that, notwithstanding the foregoing, Marathon may research, develop, import and (to the extent expressly permitted under this Agreement) manufacture and/or have manufactured Marathon Suspension Product outside the Territory solely for purposes of seeking and obtaining FDA Approval for and marketing, promoting, distributing, offering to sell and/or selling, marketing, using, distributing or commercializing the Marathon Suspension Product in the Territory.
(c)    Notwithstanding the rights and licenses granted to Marathon under this Agreement or anything else in this Agreement to the contrary, for the avoidance of doubt, (i) Faes shall retain the right (which shall be exclusive vis-a-vis Marathon and its Affiliates and sublicensees) under the Faes Intellectual Property and Know-How to research, develop, make and have made, use, market, distribute, offer for sale, sell and import the Faes Product outside the Territory for any and all purposes, including seeking to obtain regulatory approval for the Faes Product in all countries outside the Territory; (ii) Faes shall retain the right (which shall be exclusive vis-à-vis Marathon and its Affiliates and sublicensees) to research, develop, make, have made, use, market, offer for sale, sell and import the Faes Product for any and all uses in all countries, territories or jurisdictions 

12
ActiveUS 164142681

other than the Territory; and (iii) Faes shall retain the right (which shall be exclusive vis-à-vis Marathon and its Affiliates and sublicensees) with respect to the Faes Product to obtain, register or file any right and interest outside the Territory in and to all issued patents or pending patent applications or similar rights, including all provisional patent applications, substitutions, continuations, continuations-in-part, divisions and renewals, all letters patent granted thereon, and all patents-of-addition, reissues, re-examinations and extensions or restorations by existing or future extension or restoration mechanisms (including regulatory extensions), and all supplementary protection certificates.
(d)    For purposes of rights and licenses granted to Marathon under this Agreement, for the avoidance of doubt, Faes expressly declares, and Marathon expressly acknowledges, that as of the Effective Date the Licensed Assets do not include any patents or pending patent applications in the Territory with respect to, or that claim, the Faes Product or the Licensed Assets, and Faes shall have no liability or obligation whatsoever with respect to pursuing, obtaining, registering or filing patents and/or patent applications in the Territory with respect to, or that claim, the Faes Product or the Licensed Assets.  This Agreement does not prohibit Marathon, to the extent Marathon deems it appropriate, to pursue, obtain, register or file patents and/or patent applications in the Territory in the name of Marathon or its Affiliates, subsidiaries or sublicensees with respect to the Marathon Suspension Product.
3.4    No Implied License.  Only the rights and licenses expressly granted to Marathon under this Agreement shall be of legal force and effect as between the Parties, and no other right or license shall be created or deemed granted by or under this Agreement, whether by implication, estoppel or otherwise.
Section 4 
Closing
4.1    Closing.  The Closing shall occur in person or by electronic means at Marathon’s offices on May 12, 2015 at 10:00 a.m. Central Standard Time.
4.2    Faes Closing Deliveries.  Within three (3) calendar days after the Effective Date, Faes shall deliver to Marathon all of the IND Materials.  No later than February 15, 2016, Faes shall deliver to Marathon all of the other Licensed Assets.
4.3    Marathon Closing Deliveries.  At the Closing, Marathon shall deliver to Faes the Closing Payment by wire transfer of cash or other immediately available funds to the account designated by Faes by written notice to Marathon at least two (2) Business Days prior to the Closing.
Section 5 
Development
5.1    Development Responsibility and Authority.
(a)    Marathon shall have responsibility and authority (with Faes’ input, advice and assistance) with respect to conducting, in Marathon’s discretion and at Marathon’s expense (except 

13
ActiveUS 164142681

as otherwise set forth in this Agreement), such research and preclinical, clinical, regulatory and other Development of the Marathon Suspension Product for the treatment in humans of duchenne muscular dystrophy or another indication designated by Marathon, in its discretion, in and for the Territory.  Marathon shall attempt to coordinate such Development activity with Marathon’s Development activity with respect to the Marathon Tablet Product, with the goal being to have the NDAs for both the Marathon Suspension Product and the Marathon Tablet Product approved by the FDA at approximately the same time.  Without limiting the generality of the foregoing, Marathon shall have responsibility and authority (in Marathon’s discretion and at Marathon’s expense) for and with respect to (a) determining the regulatory plans, strategies and Regulatory Filings for the Marathon Suspension Product in the Territory, (b) making all Regulatory Filings (either itself or through its Affiliates, subsidiaries, designees or sublicensees) with respect to the Marathon Suspension Product in the Territory in the name of Marathon or its Affiliates, subsidiaries, designees or sublicensees and (c) obtaining, owning and/or maintaining the NDA(s) and other Regulatory Filings with respect to the Marathon Suspension Product in the Territory in the name of Marathon or its Affiliates, subsidiaries, designees or sublicensees.
(b)    If Marathon does not obtain FDA Approval on or prior to December 31, 2019, Marathon may terminate this Agreement in its entirety on thirty (30) calendar days’ written notice to Faes.  In such event, as well as in the event that Faes terminates this Agreement under and in accordance with Section 10.12 due to Marathon’s material and uncured breach of this Agreement, (i) any and all rights granted to Marathon or its Affiliates, subsidiaries or sublicensees under this Agreement (including the rights and licenses granted to Marathon under Section 3 and any sublicenses or sub-sublicenses granted by Marathon or its Affiliates or subsidiaries hereunder) shall terminate on the effective date of such applicable termination, (ii) Marathon and its Affiliates, subsidiaries and sublicensees shall immediately cease using any Faes Technology, Intellectual Property or Know-How included in the Licensed Assets and any Technology, Intellectual Property or Know-How developed by Marathon, its Affiliates, subsidiaries and sub-licensees using any Faes Technology, Intellectual Property or Know-How included in the Licensed Assets, (iii) Faes shall retain, and not return to Marathon, any payments paid to Faes by Marathon, and Marathon shall pay to Faes any payment due under this Agreement prior to the effective date of such applicable termination and (iv) Marathon, its Affiliates, subsidiaries and sub-licensees shall destroy or delete (including from all computers and technological devices, as far as possible, except for back-ups or other security filing systems if such deletion is not possible, but being in this case Marathon obliged not to access), and cause its Affiliates, subsidiaries and sublicensees to destroy or delete (including from all computers and technological devices, as far as possible, except for back-ups or other security filing systems if such deletion is not possible, but being in this case Marathon obliged not to access) all confidentiality and proprietary information included within the Licensed Assets (including Faes’ Technology, Intellectual Property and Know-how), without keeping copies, summaries, excerpts or samples thereof.  In the event of the breach or threatened breach of this Section 5.1(b) by Marathon, Faes shall be entitled to request, before the arbitration court or otherwise, all available legal remedies with respect thereto, including seeking indemnification (the limitations set forth in the first proviso of Section 10.11 not being applicable in this particular case) or seeking specific performance or 

14
ActiveUS 164142681

other equitable remedies in order to cause Marathon to immediate cease such breach(es) or threatened breach(es) or to otherwise comply with this Section 5.1(b).
5.2    Parties’ Collaboration Regarding Manufacturing Research and Development.  Without prejudice to Section 5.1, (a) the Parties shall in good faith work collaboratively with each other with respect to the manufacturing research and development of the Marathon Suspension Product for the Territory as necessary to support Marathon’s filing of the Marathon Suspension Product NDA(s) in the Territory, including, but not limited to, negotiating, mutually agreeing upon and implementing manufacturing research and developments with respect to the Marathon Suspension Product which are convenient, advisable or appropriate in order to make the Marathon Suspension Product more competitive and commercially viable in the Territory (including, but not limited to, addressing child-resistant cap/closure and stability issues with respect to the Territory and, at a later date after filing of the Marathon Suspension Product NDAs in the Territory, addressing product taste issues), with the financial terms of such manufacturing research and development to be part of such negotiations, and (b) Faes shall use reasonable efforts with respect to such manufacturing research and development of the Marathon Suspension Product for the Territory (including the implementation thereof) as necessary to support a Marathon Suspension Product NDA filing in the Territory by Marathon, including, but not limited to, using its best efforts, within Faes’ control, in order to assist Marathon (subject to Section 5.3), wherever reasonably possible, to meet Marathon’s launch timing of the Marathon Suspension Product in the Territory (which is currently foreseen for [**]) so that it is coincident with the timing of Marathon’s launch of the of the Marathon Tablet Product in the Territory.  The direct costs incurred by Faes in connection with such collaboration, research and development shall be borne by Marathon, subject to mutual agreement of the Parties pursuant to the financial terms negotiations provided for above and Section 5.3(a).
5.3    Development Costs and Expenses.  With respect to the foregoing Development activities with respect to the Marathon Suspension Product in and for the Territory, except as otherwise set forth in this Agreement and in any event without duplication:
(a)    Marathon shall fund all Development costs and expenses associated with gaining FDA Approval of the Marathon Suspension Product NDA in the Territory, up to an amount of US$[**] Dollars).  Once this amount has been reached, Marathon shall not be obligated to continue funding the Development for such purposes.  [**].
(b)    Within [**] calendar days after the Effective Date, Faes will [**] and [**] and will [**].
(c)    Marathon shall fund (subject to Marathon’s prior written approval) the CMC development work costs necessary to provide for a compliant NDA dossier for the Marathon Suspension Product for the Territory.

15
ActiveUS 164142681

(d)    Marathon shall pay to Faes a reasonable, mutually agreed upon hourly fee (based upon the hourly rates listed in Appendix 2 to this Agreement) for [**] and [**] with respect to the [**] under this Agreement.  [**] will be [**].
(e)    Faes shall not be obligated to fund any Development costs or expenses associated with gaining FDA Approval of the Marathon Suspension Product in the Territory (including, but not limited to, any costs and expenses associated with complying with a U.S. FDA Pre Approval Inspection of the Facility), unless such costs and expenses are financed by Marathon or are otherwise agreed to by Faes.
(f)    Each of the Parties agree that in performing its obligations under this Agreement (including, but not limited to, this Section 5):  (a) it shall comply with all applicable Laws, including, but not limited to, all applicable regulatory standards, including cGMP; and (b) it will not employ or use any Person that has been debarred by the FDA under Section 306(a) or 306(b) of the Act.
Section 6 
Finished Product Supply
6.1    Supply of Finished Product.  Subject to the terms and conditions of this Agreement, during the Manufacturing Term, Faes shall Manufacture and supply the Finished Product to Marathon, and Marathon shall acquire the Finished Product from Faes, in and for the Territory as follows:
(a)    on an exclusive basis during the Exclusive Manufacturing Term; and
(b)    on a non-exclusive basis during the Non-Exclusive Manufacturing Term.
Faes acknowledges and agrees that the Finished Product Manufactured and supplied to Marathon during the Manufacturing Term shall constitute the only deflazacort oral suspension product manufactured or supplied by Faes or its Affiliates for use in the Territory during the Manufacturing Term.
Marathon acknowledges that (except as expressly provided for under this Agreement) Marathon shall purchase exclusively from Faes all of its requirements for Marathon Suspension Product for the Territory during the Exclusive Manufacturing Term, and that (except as expressly provided for under this Agreement) Marathon shall cause Marathon’s Affiliates, subsidiaries and sub-licensees to purchase exclusively from Faes all of its requirements for Marathon Suspension Product for the Territory during the Exclusive Manufacturing Term.
6.2    Forecasts and Purchase Orders.
(a)    On or before the first [**] calendars days of each Calendar Month during the Manufacturing Term, Marathon shall provide to Faes a written, good faith rolling forecast (each, a “Regular Forecast”) of the quantity of Finished Product that Marathon estimates ordering in or with respect to the coming [**] calendar month period of time under this Agreement.  Only the first [**] calendar months of each Regular Forecast shall be binding with regard to the estimated 

16
ActiveUS 164142681

quantities of Finished Product specified therein; the remaining [**] calendar months of each Regular Forecast shall be non-binding with regard to the estimated quantities of Finished Product specified therein.
However, [**] months before the anticipated first requested delivery date of Finished Product under this Section 6, Marathon shall provide to Faes with a non-binding forecast of the quantity of Finished Product Marathon estimates ordering in or with respect to the coming [**] calendar months commencing with the month of the anticipated first requested delivery date (the “First Forecast”).
(b)    Firm purchase orders (each, a “Purchase Order”) for quantities of Finished Product to be manufactured and supplied by Faes under this Agreement shall be submitted to Faes by Marathon on or before the [**] during the Manufacturing Term.  Such Purchase Orders shall, among other things, specify the desired delivery date of the applicable Finished Product, which specified desired delivery date shall not, in any event, be less than [**] calendar months after Marathon’s delivery of such Purchase Order to Faes.
6.3    Supply, Acceptance, Delivery and Remedies.
(a)    During the Manufacturing Term, Faes shall supply the quantity of Finished Product specified in each Purchase Order on the specified desired delivery date; provided that (i) such Purchase Order has been submitted to Faes at least [**] calendar months prior to the specified desired delivery date in accordance with this Section 6 and (ii) no Force Majeure Event is preventing Faes from timely performing such supply obligation.
(b)    Prior to the shipment of any Finished Product to be Manufactured and supplied by Faes to Marathon under this Agreement, Faes shall deliver to Marathon, for Marathon’s review and approval, the following release documentation with respect to such shipment of Finished Product:  the applicable certificate of analysis, certificate of compliance, executed batch records, test records and other release documents specified in the Quality Agreement (collectively, the “Release Documentation”).  Marathon shall have [**] Business Days after its receipt of such Release Documentation to review such Release Documentation in order to determine, based upon such Release Documentation, whether such Finished Product does or does not conform to the applicable Specifications, cGMPs and Laws, the applicable Purchase Order and this Agreement and to either accept or reject such shipment of Finished Product as conforming or non-conforming by delivering written notice thereof to Faes prior to the end of such [**] Business Day period.  If Marathon either accepts such shipment of Finished Product as conforming, or fails to reject such shipment of Finished Product as non-conforming, in either case in writing in accordance with the preceding sentence, Faes shall be permitted to ship such Finished Product to Marathon, with (i) delivery of such Finished Product to be made CIF sea or CIP air (at Faes’ choice) (Incoterms 2000) from Bilbao, Spain port to Marathon’s specified designation using a freight carrier chosen by Faes and reasonably acceptable to Marathon and (ii) title and risk of loss therein and thereto passing to Marathon upon delivery of such Finished Product to the applicable freight carrier at Bilbao, Spain port.

17
ActiveUS 164142681

(c)    Upon Marathon’s receipt of any such shipment of Finished Product, Marathon shall perform a visual inspection thereof to determine whether such Finished Product does or does not conform to the applicable Specifications, cGMPs and Laws, the applicable Purchase Order and this Agreement.  Marathon shall notify Faes in writing without unreasonable delay if it determines based on such inspection that such shipment of Finished Product is non-conforming in any respect.  Except as to defects that could not reasonably have been discovered by such visual inspection, the Finished Product in such shipment shall be deemed to have been accepted by Marathon if Faes has not received such written notice of non-conformance from Marathon within [**] calendar days after the date of Marathon’s receipt of such shipment.  Marathon shall notify Faes of any latent defects in such shipment of Finished Product that could not reasonably have been discovered by such visual inspection within [**] calendar days after discovery thereof.
(d)    If Faes receives timely notice from Marathon pursuant to this Section 6.3 of the non-conformity of a shipment of Finished Product, and agrees that such shipment is non-conforming (or, in the event that Faes disagrees that such shipment is non-conforming, if an independent laboratory or expert mutually acceptable to the Parties determines that the shipment is non-conforming), Faes shall, at Marathon’s election, [**].
6.4    Failure to Supply Finished Product.  In the event that (A) Faes becomes aware at any time during the Manufacturing Term that it is unable or likely to be unable to fulfill any Marathon Purchase Order in a timely manner (whether as a result of a Force Majeure Event or otherwise), or (B) Faes materially breaches its main obligations under Section 6 of this Agreement, Faes shall immediately notify Marathon thereof (which notification shall include the underlying reason for such supply delay or breach, the proposed remedial measures and the date that such supply delay is expected to end or such material breach is expected to be cured).  In the event that Faes so notifies Marathon of [**] (each, a “Supply Failure”), the Parties shall [**].  In the event that the Parties [**], and with respect to [**] in accordance with Section [**], (a) Marathon shall [**], (b) if [**], (c) Marathon shall [**] and (d) Marathon shall [**].  Faes shall [**], including, but not limited to, [**] with Marathon [**].  Without prejudice of the foregoing, if Faes [**], Faes shall [**].
6.5    Supply Price; Invoicing.
(a)    In consideration for each Unit of Finished Product Manufactured and supplied by Faes to Marathon under this Section 6, Marathon shall pay to Faes the Per Unit Supply Price, which, the Parties expressly acknowledge and agree, with respect to the Initial Royalty Term, constitutes a prepayment, in part, of the Royalty Payments otherwise payable to Faes by Marathon under Section 7.3 with respect to such Initial Royalty Term.
(b)    With respect to each shipment of Finished Product Manufactured and supplied by Faes to Marathon under this Section 6, Faes shall invoice Marathon for an amount equal to the product of (a) the number of Units included in such shipment of Finished Product, times (b) the Per Unit Supply Price, promptly after delivery of such shipment of Finished Product to Marathon.  Marathon shall pay Faes such invoiced amount within [**] calendar days after its receipt of the invoice for such shipment of Finished Product.

18
ActiveUS 164142681

6.6    Finished Product Warranty.  Faes represents, warrants and covenants to Marathon that:  (a) the Finished Product to be Manufactured and supplied by Faes to Marathon under this Section 6 shall conform to the applicable Specifications, cGMPs, Laws and the Quality Agreement; (b) Faes will convey good and valid title to the Finished Product Manufactured and supplied by Faes to Marathon under this Section 6, free and clear from any and all Liens; (c) as of the time of delivery of any such Finished Product to Marathon hereunder, such Finished Product will not be adulterated or misbranded under the Act or other applicable Law; and (d) as of the time of delivery of any such Finished Product to Marathon hereunder, such Finished Product will have a remaining shelf equal to or greater than [**] percent ([**]%) of its then current FDA approved shelf life (and, in no event, less than [**] months of its remaining shelf-life).
6.7    [**].  During the Exclusive Manufacturing Term, Marathon will [**]; provided, however, that (i) those [**] will be [**] under this Agreement, [**] under this Agreement; and (ii) [**] under this Section 6.7 shall be [**].
6.8    API, Components and Raw Materials.  Faes shall be responsible, at its cost, for the procurement, manufacture and qualification of the API and any components or raw materials required for the Manufacture of the Finished Product.
6.9    Manufacturing Records.  Faes shall maintain and/or cause its Third Party suppliers or API, components and raw materials to maintain all records and other materials necessary to comply with applicable cGMPs and all applicable Laws relating to the Manufacture and supply of the Finished Product under this Section 6.  All such materials shall be maintained for such period as may be required by applicable Law; provided, however, that all records relating to the Manufacturing (including stability and quality control) of each batch of Finished Product shall be retained until at least the [**] of the end of its then-current FDA approved shelf-life, unless a longer period is required by applicable Law.  Notwithstanding anything in this Section 6.9 to the contrary, if Faes desires to destroy or discard any such materials, Faes shall notify Marathon (with specificity as to which materials that it desires to destroy or discard) in writing prior to doing so, and Marathon shall have the right to take custody of such materials within [**] Business Days after receipt of such notice.
6.10    Audits and Facility Access.  During the Manufacturing Term, Faes shall allow, during regular business hours and on reasonable prior notice, Marathon’s quality assurance, quality control, compliance and other relevant personnel (including Marathon’s consultants provided they are under the same confidentiality obligations as Marathon regarding Faes confidential information), to audit the Facilities and related documentation and the Manufacture of Finished Product to be Manufactured and supplied under this Section 6 [**] without cause and additional times per Calendar Year as necessary for cause (each, an “Audit”).  The purpose of any such Audit shall solely be to assess compliance with applicable cGMPs and Laws.  Furthermore, Faes will allow inspectors from the FDA and other relevant Governmental Entities in the Territory to perform required inspections of such Facilities and related documentation with respect to the Finished Product or the API.  Faes shall, without delay, inform Marathon of any such proposed or unannounced FDA or other such 

19
ActiveUS 164142681

Governmental Entity inspections of such Facilities.  Faes agrees to permit one or more qualified representative(s) of Marathon to be present on site during any such FDA or other such Governmental Entity inspections pertaining to the Finished Product or the API.  Faes shall, without undue delay, provide a summary report of the results of any such FDA or other such Governmental Entity inspection to Marathon.  Faes shall, without delay, notify Marathon of any FDA or other such Governmental Entity request for samples of the Finished Product or the API, as applicable.
6.11    Quality Agreement and Pharmacovigilance Agreement.
(a)    Within [**] Business Days after the Effective Date, the Parties shall do their best efforts to enter into the Quality Agreement.  Marathon shall use its best efforts to prepare and circulate the first version of this Quality Agreement (in a reasonable and customary format) within [**] Business Days after the Effective Date.
(b)    The Parties agree that Marathon shall have primary responsibility for the monitoring of all clinical experiences and filing of all required reports concerning the Marathon Suspension Product in the Territory throughout its development and commercialization in the Territory.  Faes (either itself or through a clinical research organization with whom it has contracted), its Affiliates or its Third Party partners shall have primary responsibility for the monitoring of all clinical experiences and filing of all required reports concerning the Faes Product in the countries, territories or jurisdictions in which Faes (either directly or indirectly) or its Affiliates or Third Party partners commercialize, or conduct clinical or other activity with respect to, the Faes Product.  The Parties shall cooperate to develop methods and/or procedures for sharing information relating to such clinical experiences in accordance with safety reporting requirements of the respective applicable Governmental Entities and all applicable Laws.  Specific details regarding the management of information adverse events related to the clinical development and use of the Marathon Suspension Product in the Territory will be delineated in the Pharmacovigilance Agreement to be entered into by the Parties within [**] Business Days after the Effective Date, provided, however, that in any event each Party agrees to provide the other Party with such information regarding adverse events with respect to the Marathon Suspension Product or the Faes Product, as the case may be, within such time frames as are required by applicable Laws.
6.12    Manufacturing Term.
(a)    Upon expiry of the Initial Manufacturing Term or a Renewed Manufacturing Term, as the case may be, the Manufacturing Term shall automatically be renewed for a ten (10) calendar year period (each, a “Renewed Manufacturing Term”), unless either Party gives the other Party written notice of non-renewal at least twelve (12) calendar months prior to the expiry of such Initial Manufacturing Term or Renewed Manufacturing Term, as the case may be.
(b)    The Manufacturing Term may be terminated at any time by mutual written agreement of the Parties.
Section 7 
Other Financial Provisions

20
ActiveUS 164142681

7.1    NDA Submission and Acceptance Milestone Payment.  Upon submission to, and acceptance, by the FDA of the first Marathon Suspension Product NDA filed by Marathon or its Affiliates, subsidiaries, designees or sublicensees with a proposed label indication for the treatment in humans of duchenne muscular dystrophy or another indication, Marathon shall pay to Faes the NDA Submission and Acceptance Milestone Payment, due and payable within [**] Business Days thereafter by wire transfer of cash or other immediately available funds to the account designated in writing by Faes.
7.2    NDA Approval Milestone Payment.  Upon FDA Approval, Marathon shall pay to Faes the NDA Approval Milestone Payment, due and payable within [**] Business Days thereafter by wire transfer of cash or other immediately available funds to the account designated in writing by Faes, if (a) [**], Faes shall [**] or (b) Marathon shall [**].  Notwithstanding the foregoing, if Faes [**], Marathon shall [**] in accordance with Section 6.
7.3    Royalty Payments.  In consideration for the rights and licenses granted to Marathon under Section 3 of this Agreement, Marathon shall pay royalties to Faes as set forth in this Section 7.3 (collectively, the “Royalties”), with the amounts payable under this Section 7.3 sometimes being collectively referred to in this Agreement as the “Royalty Payments”):
(a)    Initial Royalty Term.  With respect to the Initial Royalty Term:
(i)    Marathon shall pay to Faes Royalties (which the Parties expressly acknowledge and agree are inclusive of the supply price prepaid to Faes by Marathon under Section 6 with respect to Finished Product Manufactured and supplied by Faes to Marathon thereunder) which shall be calculated as a percentage of - or as a fixed payment with respect to - the Annual Net Sales of the Marathon Suspension Product in the Territory by Marathon and its Affiliates, subsidiaries or sublicensees per Calendar Quarter during the Initial Royalty Term in accordance with the table below (with each Royalty percentage or fixed payment, as the case may be, set forth below applicable only with respect to Annual Net Sales of Marathon Suspension Product within the applicable range set forth below):
	
		
	Annual Net Sales
	Royalty Percentage / Fixed Payment

	[**]
	[**]

	[**]
	[**]

	[**]
	[**]

In making any Royalty Payments with respect to Royalties under this Section 7.3(a), Marathon shall [**].
(ii)    In no event shall the aggregate Royalties (which, for such purposes, shall [**] in making the applicable Royalty Payment in accordance with Section 7.3(a)(i)) payable to Faes by Marathon under this Section 7.3(a) with respect to a first seven (7) Calendar Years ending 

21
ActiveUS 164142681

during the Initial Royalty Term be less than the following (the “Minimum Annual Royalty Payments”):
	
		
	Year Post Launch
	Minimum Annual Royalty Payment

	[**]
	€0.5 million

	[**]
	[**]

	[**]
	€1.5 million

(b)    Subsequent Royalty Term.  With respect to the Subsequent Royalty Term, Marathon shall pay to Faes Royalties equal to [**] percent ([**]%) of the Annual Net Sales of the Marathon Suspension Product in the Territory by Marathon and its Affiliates, subsidiaries, sublicensees or sub-sublicensees per Calendar Quarter.
(c)    Sales & Royalty Reports.  Within [**] calendar days after each Calendar Quarter during the Royalty Term, Marathon shall provide to Faes a Sales & Royalty Report for such Calendar Quarter.
(d)    Non-Commercial Marathon Suspension Product Units Reports.  Within [**] calendar days after each Calendar Quarter during the Royalty Term, Marathon shall provide to Faes a Non-Commercial Marathon Suspension Product Units Report for such Calendar Quarter.
(e)    Royalty Payments.  Royalty Payments payable under this Section 7.3 shall be calculated and paid on a Calendar Quarter basis by wire transfer of cash or other immediately available funds to the account designated in writing by Faes, within [**] calendar days after the end of each Calendar Quarter during the Royalty Term.
7.4    Payment Terms; Currency.  All payments to a Party by the other Party under this Agreement shall be made by wire transfer of cash or other immediately available funds to the credit of such bank account of such Party as may be designated by such Party in this Agreement or on written notice to the other Party from time to time as provided for in this Agreement.  Any payment under this Agreement which falls due on a date which is not a Business Day shall be made on the next succeeding Business Day.  Except as expressly set forth in this Agreement, all payments under this Agreement shall be made in US Dollars.
7.5    Taxes; Withholding.  Each Party shall bear sole responsibility with respect to any Taxes payable with respect to payments or other amounts received by such Party under this Agreement.  To the extent that a Party making payments to the other Party under this Agreement is required under applicable Law to deduct and withhold an amount from such payment(s), such Party shall entitled to do so and such withheld amount(s) shall be treated for all purposes of this Agreement as having been paid, and proof of payment from the applicable taxing authority shall be provided to the Party on whose behalf the applicable Tax was paid.
7.6    Records and Audits.

22
ActiveUS 164142681

(a)    Marathon shall keep complete, true and accurate books and records in accordance with GAAP in relation to this Agreement and the transactions contemplated hereby, including, Annual Net Sales, Royalties and Royalty Payments.  Faes shall keep complete, true and accurate books and records in accordance with IFRS in relation to this Agreement and the transactions contemplated hereby, including COGS.  Each Party will keep such books and records for at least [**] calendar months following the applicable Calendar Quarter to which they pertain.
(b)    Not more often than [**] during the Royalty Term, Faes shall have the right for a period of [**] calendar months following receipt of the applicable Sales & Royalty Report and the Non-Commercial Marathon Suspension Product Units Report to audit, whether by itself or through its Affiliate(s) and/or to appoint an internationally-recognized independent accounting firm approved by Marathon (whether Faes, its Affiliate or an independent accounting firm, the “Auditor”) to audit the relevant books and records of Marathon solely with respect to such Sales & Royalty Report and Non-Commercial Marathon Suspension Product Units Report for purposes of verifying the accuracy thereof and of the Annual Net Sales, Royalties and Royalty Payments set forth therein.  Where the Auditor is not Faes, such Auditor shall execute and deliver to Marathon a confidentiality agreement, in form and substance acceptable to Marathon, have the right to disclose to Faes and/or other Affiliates of Faes its conclusions regarding the applicable Sales & Royalty Report, Non-Commercial Marathon Suspension Product Units Report and the Annual Net Sales, Royalties and Royalty Payments set forth therein.  Faes agrees to hold in confidence all information received and all information learned in the course of any such audit, whether received or learned directly or through an Affiliate or other Auditor), except to the extent that such information is not confidential and/or it is necessary to disclose it to enforce its rights under this Agreement or if disclosure is required by applicable Law.
(c)    [**].
(d)    If there is a dispute between the Parties following any audit performed pursuant to this Section 7.6 which is not resolved by mutual agreement of the Parties, either Party may [**].  In the event an [**], the Parties shall [**]:  (i) the Party [**] of this Section 7.6(d); (ii) within [**] Business Days after the [**], the Parties shall [**]; (iii) the [**]; (iv) the [**]; (v) the [**] of any of the terms and conditions thereof; and (vi) [**].
7.7    Right of Setoff.  The Parties hereby expressly acknowledge and agree that each Party shall have the right to offset against any undisputed payments payable to the other Party under this Agreement any amounts owed by such other Party under this Agreement.
Section 8 
Infringement of Licensed Assets by Third Parties
8.1    Infringement.  Each Party shall promptly notify the other Party of any actual, suspected or threatened infringement, violation or misappropriation of the Licensed Assets within the Territory (“Infringement”) that comes to its attention.

23
ActiveUS 164142681

8.2    Right to Bring Action.  Marathon shall have the sole right (either itself or through its Affiliates, designees or sublicensees) to send notices and bring and conduct actions in relation to any Infringement.  Faes will co-operate fully with Marathon or its Affiliates, designees or sublicensees, as the case may be, in taking all reasonable steps requested thereby in connection with any Infringement action, including joining in legal proceedings.  Marathon shall bear the out- of pocket costs of any such legal proceedings, and shall be entitled to [**] percent ([**]%) of any damages, account of profits and/or awards of costs recovered.
8.3    Exception.  In the event that Marathon does not take reasonable steps to prevent any individual Infringement within [**] days of becoming aware or receiving notice thereof, Faes shall thereafter have the right (but shall not be under any obligation in this regard) to send notices and bring and conduct actions in relation to such Infringement.  Marathon will co-operate fully with Faes in taking all reasonable steps requested by Faes in connection with any such Infringement action, including joining in legal proceedings.  Faes shall bear the costs of any such legal proceedings, and shall be entitled to [**] percent ([**]%) of any damages, account of profits and/or awards of costs recovered.
8.4    Settlements.  The Parties shall reasonably consult with each other with respect to any such Infringement before accepting any settlement thereof or any judicial finding which is reviewable by a higher authority with respect thereto.
Section 9 
Perpetuity
At the expiry of the Royalty Term, the rights and licenses granted to Marathon under Section 3 shall automatically convert into royalty-free, fully paid-up and non-assessable rights and licenses.
Section 10 
Miscellaneous
10.1    Governing Law.  This Agreement shall be governed by, and construed under, the laws of the Kingdom of Spain.
10.2    Assignment.  Neither Party may assign its rights and obligations under this Agreement without the other Party’s prior written consent, except that (a) either Party may assign its rights and obligations under this Agreement or any part hereof to one or more of its Affiliates without the consent of the other Party; and (b) Marathon may assign this entire Agreement without Faes’ prior written consent to a Third Party acquirer, successor or designee (i) to all or substantially all of Marathon’s business or assets or (ii) to all of Marathon’s rights with respect to the Marathon Suspension Product in the Territory, provided, however, that the assigning Party shall remain responsible for the assignee’s full and accurate performance of its pre and post-assignment obligations under this Agreement.  Any attempted assignment in contravention of the foregoing shall be void.

24
ActiveUS 164142681

Further, and without limiting the foregoing.  Marathon and Faes shall be permitted to engage their respective Affiliates and/or subsidiaries to perform services to assist the respective Party in performing its respective obligations under this Agreement, including with respect to the Manufacturing, Development and/or commercialization of the Marathon Suspension Product in and for the Territory, provided that the applicable Party shall remain liable for the full and accurate performance of such respective obligations.
10.3    Force Majeure.  If and to the extent that either Party is prevented or delayed by a Force Majeure Event from performing any of its obligations under this Agreement and promptly so notifies in writing the other Party, specifying the matters constituting such Force Majeure Event, together with such evidence in verification thereof as it can reasonably give and specifying the period for which it is estimated that the prevention or delay will continue, then the Party so affected shall be relieved of liability to the other for failure to perform or for delay in performing such obligations (as the case may be), but shall nevertheless use its commercially reasonable efforts to resume full performance thereof.
10.4    Arbitration.  All disputes arising out of or in connection with this Agreement shall be settled under the Rules of Arbitration of the International Chamber of Commerce (ICC) in force at the time of submitting the request of arbitration, by one arbitrator appointed in accordance with the said rules.  The seat of the arbitration shall be Madrid, Spain.  The language of the arbitration shall be English.
10.5    Notices.  All notices required or permitted hereunder shall be in writing addressed to the Parties at their respective addresses as set forth below, unless another address shall have been designated:
If to Faes, to:
[**]
 
Faes Farma, S.A.
 
Vía de los Poblados 3
 
28033 Madrid, Spain
With a copy to (which shall not constitute notice):
[**]
 
Faes Farma, S.A.

25
ActiveUS 164142681

 
Avenida de Autonomía 10
 
Leioa, Bizkaia, Spain
If to Marathon, to:
Marathon Pharmaceuticals, LLC
 
1033 Skokie Boulevard
 
Suite 600
 
Northbrook, IL 60062
 
Attn:  [**]
will be delivered by hand, by nationally recognized overnight courier, by registered or certified mail, postage prepaid or by facsimile, with confirmation sheet.  Any and all notices to be given hereunder shall be deemed delivered on the first business day following delivery by hand, one (1) business day following delivery to a nationally recognized overnight courier for overnight delivery to the recipient and five (5) Business Days following deposit in registered or certified mail as aforesaid.
10.6    Entire Agreement.  This Agreement, together with that certain Confidentiality Agreement, dated March 25, 2015 (the “CDA”), constitute the entire agreement of the Parties and supersede all prior representations, proposals, discussions, and communications, whether oral or in writing.  This Agreement, together with the CDA, may be modified only through a writing signed by the Parties.
10.7    Severability.  If any provision of this Agreement shall be held invalid or unenforceable, such provision shall be deemed deleted from this Agreement and replaced by a valid and enforceable provision, which so far as possible, achieves the Parties’ intent in agreeing to the original provision.  The remaining provisions of this Agreement shall continue in full force and effect.
10.8    Remedies.  Each Party agrees that his, her or its obligations hereunder are necessary and reasonable in order to protect the other Party and the other Party’s business, and expressly agrees that monetary damages would be inadequate to compensate the other Party for any breach of any covenant or agreement set forth herein.  Accordingly, each Party agrees and acknowledges that any such violation or threatened violation of this Agreement (including, but not limited to, Supply Failures as provided for in Section 6.4) will cause irreparable injury to the other Party, and 

26
ActiveUS 164142681

that, in addition to any other remedies that may be available, in law, in equity, or otherwise, the other Party shall be entitled to seek specific performance for any breach or threatened breach, and to obtain injunctive relief against the threatened breach of this Agreement or continuation of any such breach, without the necessity of proving actual damages.  No remedy provided for in this Agreement shall limit (or be construed as limiting) the aggrieved Party’s right to any other remedies it may have under this Agreement or in Law, including, without limitation, the recovery of damages for breach of this Agreement, provided however that the limitations on claimable damages under this Agreements agreed in Sections 10.10 and 10.11 shall always apply, except as expressly provided in this Agreement.
10.9    No Waiver.  Failure to enforce any provision of this Agreement shall not constitute a waiver of any term or condition hereof.
10.10    Indemnification by Faes.  Faes shall indemnify, defend and hold harmless Marathon and its Affiliates and subsidiaries from and against all losses and liabilities and all damages, expenses, costs, and fees, including reasonable attorneys’ fees (collectively, “Losses”), including, but not limited to, Losses arising from any claim, suit, action or proceeding (each a “Claim”) brought against Marathon or its Affiliates or subsidiaries by a Third Party, to the extent resulting or arising from any breach by Faes of any representation, warranty, covenant or agreement in this Agreement; provided, however, that Faes shall not be liable under any circumstance to Marathon or its Affiliates or subsidiaries or to any other Third Party for any loss of profit (“lucro cesante”), special, consequential, incidental, punitive or indirect Losses arising from or relating to (a) any breach or inaccuracy of Faes’ representations or warranties in this Agreement, (b) any breach by Faes of its obligations, undertakings or covenants under this Agreement and (c) any simple negligence in performing its obligations, undertakings or covenants under this Agreement, regardless of any notice of the possibility of such Losses; provided further, however, that the Parties expressly acknowledge and agree that Losses incurred by Marathon involving the payment of monies to a Third Party as a result of Faes’ breach of any of its representations, warranties, covenants or agreements in this Agreement (including those described in clauses (a) through (c) above)) shall not constitute (or be deemed to constitute) loss of profit (“lucro cesante”), special, consequential, incidental, punitive or indirect Losses for purposes of the exclusion in the preceding proviso.
10.11    Indemnification by Marathon.  Marathon agrees to indemnify, defend and hold harmless Faes and its Affiliates and subsidiaries from and against all Losses, including, but not limited to, Losses arising from any Claim brought against Faes or its Affiliates or subsidiaries by a Third Party, to the extent resulting or arising from any breach by Marathon of any representation, warranty, covenant or agreement in this Agreement; provided, however, that Marathon shall not be liable under any circumstance to Faes or its Affiliates or subsidiaries or to any other Third Party for any loss of profit (“lucro cesante”), special, consequential, incidental, punitive or indirect Losses arising from or relating to (a) any breach or inaccuracy of Marathon’s representations or warranties in this Agreement, (b) any breach by Marathon of its obligations, undertakings or covenants under this Agreement and (c) any simple negligence in performing its obligations, undertakings or covenants under this Agreement, regardless of any notice of the possibility of such Losses; provided 

27
ActiveUS 164142681

further, however, that the Parties expressly acknowledge and agree that Losses incurred by Faes involving the payment of monies to a Third Party as a result of Marathon’s breach of any of its representations, warranties, covenants or agreements in this Agreement (including those described in clauses (a) through (c) above)) shall not constitute (or be deemed to constitute) loss of profit (“lucro cesante”), special, consequential, incidental, punitive or indirect Losses for purposes of the exclusion in the preceding proviso.
10.12    Termination for Breach.  In addition to the termination rights provided for in Section 6.12(b), each Party shall have the right to terminate this Agreement in its entirety immediately upon written notice to the other Party is the other Party materially breaches its material obligations under this Agreement and, after receiving written notice under this Section 10.12 identifying such material breach in reasonable detail, fails to cure such breach within [**] calendar days after its receipt of such notice (or within [**] calendar days after its receipt of such notice in the event such breach is solely based upon the breaching Party’s failure to pay any undisputed amounts due hereunder if such breaching Party fails to cure such breach within such [**] day period); provided, however, that if the Party alleged to in breach disputes such breach in good faith by written notice to the other Party within the applicable cure period (i.e., within the [**]day or, if applicable, [**]day period referred to above), then the Party alleged to be in breach shall not be deemed in breach and the non-breaching Party shall not have the right to terminate this Agreement pursuant to this Section 10.13 unless and until it has been determined in accordance with Section 10.4 that this Agreement was in fact so materially breached and the breaching Party fails to cure such breach within [**] calendar days after such determination.  Any abuse or bad faith use by the breaching Party of the provisions of this Section 10.12 in order to avoid the termination of this Agreement hereunder shall be taken into account when determining the amount of damages to be paid by the breaching Party to the non-breaching Party as a result of such termination of this Agreement.
10.13    Expenses.  Each Party shall bear its own expenses (including, but not limited to, legal, investment banker, accountant, financial advisor fees and expenses) in connection with this Agreement and the transactions contemplated hereby.
Remainder of page intentionally left blank.

28
ActiveUS 164142681

IN WITNESS WHEREOF, the Parties have executed this Agreement individually or through their duly authorized representatives.
FAES FARMA, S.A
By:  /s/ Gonzalo Lopez Casanueva    
Its:  General Manager    
MARATHON PHARMACEUTICALS, LLC
By:  /s/ Patrick J. Morris    
Its:  EVP of Legal Affairs and Mergers & 
Acquisitions and General Counsel    

29
ActiveUS 164142681

Appendix 1 
IND Materials
	
		
	3.2.P.3.1
	Manufacture(s)

	3.2.P.3.2
	Batch Formula

	3.2.P.3.3
	Description of Manufacturing Process and Process Controls

	3.2.P.3.4
	Controls of Critical Steps and Intermediates

	3.2.P.4.1
	Excipient Specifications

	3.2.P.4.2
	Analytical Procedures

	3.2.P.4.5
	Excipients of Human or Animal Origin

	3.2.P.4.6
	Novel Excipients

	3.2.P.5
	Control of Drug Product

	3.2.P.5.1
	Specification(s)

	3.2.P.5.2
	Analytical Procedures

	3.2.P.5.3
	Validation of Analytical Procedures

	3.2.P.5.4
	Batch Analyses

	3.2.P.5.5
	Characterization of Impurities

	3.2.P.6
	Reference Standards or Materials

	3.2.P.7
	Container Closure System

	3.2.P.8.1
	Stability Summary and Conclusion

	3.2.P.8.3
	Stability Data

30
ActiveUS 164142681

Appendix 2 
Faes’ Hourly Rates
	
		
	Faes’ Hourly Rates
	€[**] Euros) Per Hour

31
ActiveUS 164142681

Amendment to Exclusive License and Supply Agreement
THIS AMENDMENT (“Amendment”) to the Exclusive License and Supply Agreement dated as of May 12th, 2015 is entered into as of November 1, 2015 (the “Amendment Effective Date”) by and between Faes Farma, S.A. (“Faes”) and Marathon Pharmaceuticals, LLC (“Marathon”).
WHEREAS, Marathon and Faes are parties to that certain Exclusive License and Supply Agreement dated as of May 12, 2015 (the “Agreement”); and
WHEREAS, Marathon and Faes wish to modify the Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each party hereto to the other, both parties mutually agree as follows:
		
	1.
	Section 6.10 of the Agreement shall be replaced in its entirety by the following:

6.10 Audits and Facility Access.  During the Manufacturing Term, Faes shall allow, during regular business hours and on reasonable prior notice, Marathon’s quality assurance, quality control, compliance and other relevant personnel (including Marathon’s consultants provided they are under the same confidentiality obligations as Marathon regarding Faes confidential information), to audit the Facilities and related documentation and the Manufacture of Finished Product to be Manufactured and supplied under this Section 6 [**] without cause and additional times per Calendar Year as necessary for cause (each, an “Audit”).  The purpose of any such Audit shall solely be to assess compliance with applicable cGMPs and Laws.  Furthermore, Faes will allow inspectors from the FDA and other relevant Governmental Entities in the Territory to perform required inspections of such Facilities and related documentation with respect to the Finished Product.  Faes shall, without delay, inform Marathon of any such proposed or unannounced FDA or other such Governmental Entity inspections of such Facilities.  Faes agrees to permit one or more qualified representative(s) of Marathon to be present on site during any such FDA or other such Governmental Entity inspections pertaining to the Finished Product.  Faes shall, without undue delay, provide a summary report of the results of any such FDA or other such Governmental Entity inspection to Marathon.  Faes shall, without delay, notify Marathon of any FDA or other such Governmental Entity request for samples of the Finished Product or the API, as applicable.
		
	2.
	Except as otherwise modified herein, the Agreement will remain in full force and effect.

		
	3.
	This Amendment shall be governed by and construed by the choice of law from the Agreement.

**    **    **

32
ActiveUS 164142681

ACKNOWLEDGED, ACCEPTED, AND AGREED TO:
	
		
	MARATHON PHARMACEUTICALS, LLC 
By:  /s/ Mr. Patrick J. Morris   
Name:  Mr. Patrick J. Morris
Title:  EVP of Legal Affairs and General 
   Counsel
Date:  November 30, 2015   
	FAES FARMA, S.A.
By:  /s/ Mr. Gonzalo Lopez Casanueva   
Name:  Mr. Gonzalo Lopez Casanueva
Title:  General Manager
Date:  November 20th 2015   

33
ActiveUS 164142681Exhibit

Exhibit 10.2
Confidential Materials omitted and filed separately with the 
Securities and Exchange Commission. Double asterisks denote omissions.

COMMERCIAL MANUFACTURING AGREEMENT
THIS MANUFACTURING AGREEMENT (the “Agreement”) is made and entered into this 18th day of September, 2015 (the “Effective Date”), by and between AAIPharma Services Corp., having a place of business at 2320 Scientific Park Drive, Wilmington, NC 28405 (“AAIPharma”) and Marathon Pharmaceuticals, LLC having a place of business at 1033 Skokie Blvd., Suite 600, Northbrook, IL 60062 USA (“Company”).  AAIPharma and Company, as used herein, may be referred to, collectively, as “Parties” and individually as a “Party”.
Recitals
WHEREAS, subject to the terms and conditions contained in this Agreement, Company desires to engage the services of AAIPharma to Manufacture the Products (each as defined below) for subsequent commercial distribution by Company.
WHEREAS, AAIPharma is willing to undertake such Manufacture for Company according to the terms and conditions provided for in this Agreement.
NOW, THEREFORE, for and in consideration of the foregoing premises and of the mutual covenants of the Parties hereinafter set forth, the Parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
The following words, terms and phrases, when used herein, shall have the following respective meanings:
1.1    “AAIPharma” shall have the meaning set forth in the preamble.
1.2    “AAIPharma Indemnified Parties” shall have the meaning set forth in Section 8.2.
1.3    “Act” shall mean the United States Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.), as amended from time to time, and the regulations promulgated thereunder.
1.4    “API” shall mean the active pharmaceutical ingredient with respect to each Product.
1.5    “Applicable Law(s)” shall have the meaning set forth in Section 3.3.
1.6    “Batch” shall mean a specific quantity of material produced in a contiguous process or series of processes that is expected to be homogeneous within specified limits.  The Batch size for each Product is set forth in Exhibit A attached hereto and incorporated herein by reference.

ActiveUS 164239593v.1

1.7    “cGMP” or “GMP” shall mean the recognized pharmaceutical regulations and requirements of regulatory authorities such as those defined by the U.S. FDA’s regulations at 21CFR Parts 210 and 211, those defined by Eudralex, “The Rules Governing Medicinal Products in the European Union,” and specifically Volume 4, “Guidelines for Good Manufacturing Practices for Medicinal Products for Human and Veterinary Use” and applicable Annexes (Directives 2001/83/EC and amendments including Directives 2003/94/EC dated October 2003 and 2004/27/EC dated March 2004 and/or others that may be appropriate for the particular project) and as may be amended from time to time.
1.8    “Commercialize” or “Commercialization” shall mean, with respect to a Product, the marketing, promotion, sale and distribution of such Product.
1.9    “Company” shall have the meaning set forth in the preamble.
1.10    “Company Indemnified Parties” shall have the meaning set forth in Section 8.1.
1.11    “Firm Commitment” shall have the meaning set forth in Section 4.1.
1.12    “Firm Forecast” shall have the meaning set forth in Section 4.1.
1.13    “Firm Order” shall have the meaning set forth in Section 4.2(b).
1.14    “Indemnification Claim” shall have the meaning set forth in Section 8.3(a).
1.15    “Initial Term” shall have the meaning set forth in Section 9.1.
1.16    “Launch” means, with respect to a Product, the first commercial product shipped from AAIPharma’s site.
1.17    “Long-Term Forecast” shall have the meaning set forth in Section 4.1.
1.18    “Losses” shall have the meaning set forth in Section 8.1.
1.19    “Manufacture”/“Manufacturing” shall mean the manufacture, processing, packaging, labeling (subject to Section 3.7), quality control and testing of the Products performed prior to their delivery by AA1 Pharma in accordance with the terms of this Agreement.
1.20    “Marketing Authorizations” shall mean the United States new drug application or abbreviated new drug application, as applicable, for the Product(s).
1.21    “Master Batch Record” shall mean the batch record as mutually agreed upon by the Parties.
1.22    “Material Change” shall have the meaning set forth in Section 3.3.
1.23    “Minimum Order Requirement” shall have the meaning set forth in Section 4.2(a).
1.24    “Product(s)” shall mean those products described in Exhibit A, as the same may be amended from time to time upon mutual agreement of the Parties; provided, however, that no product 

2
ActiveUS 164239593v.1

shall become a Product until such time as AAIPharma has successfully completed the registration batches for such product to Company’s reasonable satisfaction.
1.25    “Purchase Prices” shall have the meaning set forth in Section 5.1.
1.26    “Quality Agreement” shall have the meaning set forth in Section 6.5.
1.27    “Raw Materials” shall mean any excipient and component materials used to Manufacture the Products, but excluding the API.
1.28    “Raw Material Costs” shall have the meaning set forth in Section 5.2.
1.29    “Recall” shall have the meaning set forth in Section 6.4(b).
1.30    “Release To The Client” shall mean AAIPharma has:  i) manufactured and/or packaged and/or labeled the Product according to the Master Batch Record; ii) fulfilled its testing/analytical obligations as further set forth herein; and iii) all manufacturing and testing services performed by AAIPharma have been reviewed and approved by AAIPharma’s Quality department.
1.31    “Renewal Period” shall have the meaning set forth in Section 9.1.
1.32    “Services” shall mean certain pharmaceutical development services in addition to manufacturing services including, for example, analytical method development and analysis, stability services, clinical packaging, validation services, quality assurance and regulatory consulting provided by AAIPharma.
1.33    “Specifications” shall mean the specifications for the Products agreed upon by the Parties and included in the Master Batch Record, an example of which is set forth in Exhibit B attached hereto and incorporated herein by reference.
1.34    “Term” shall have the meaning set forth in Section 9.1.
1.35    “Territory” shall mean the United States, its territories and possessions.
ARTICLE 2
LICENSE GRANT TO AAIPHARMA TO MANUFACTURE PRODUCT
2.1    Grant.  Company hereby grants to AAIPharma during the Term of this Agreement, on a Product-by-Product basis, a nonexclusive, royalty-free right to Manufacture the Products in the Territory and to use any and all of Company’s licenses, trademarks, regulatory data and/or technical information, know how and Confidential Information of Company related to the Products for the purpose of AAIPharma carrying out its obligations hereunder, subject to the conditions of this Agreement.
2.2    Marketing Authorizations.  Company shall maintain the Marketing Authorizations in full force and effect at all times.  Upon request by Company, AAIPharma shall use commercially reasonable efforts to assist Company in connection therewith; provided that, in exchange, Company will pay AAIPharma its standard fees and expenses therefor.

3
ActiveUS 164239593v.1

ARTICLE 3 
MANUFACTURING
3.1    Engagement.
(a)    During the Term of this Agreement and subject to the terms and conditions set forth herein, Company agrees to exclusively purchase from AAIPharma, and AAIPharma agrees to exclusively manufacture and supply, one hundred percent (100%) of Company’s requirements for each Product for Commercialization in the Territory.  Notwithstanding the foregoing, Company shall be entitled, at its sole cost and expense, to qualify other manufacturer(s) to manufacture Products solely for the purpose of such manufacturer(s) supplying Company with quantities of Product that AAIPharma is unable to supply (i) in breach of this Agreement, or (ii) during events of force majeure.  Following the Initial Term, AAIPharma may notify Company if such exclusivity commitment would prevent AAIPharma from providing services to a third party.  The Parties shall negotiate in good faith mutually acceptable revised terms including but not limited to termination of exclusivity or compensation to AAIPharma for the lost opportunity to provide services to such third party.  If the Parties fail to agree on terms within [**] days of such notification, either Party shall have the right to terminate this Agreement effective eighteen (18) months following the [**] day negotiation period.
(b)    Notwithstanding the foregoing, to the extent Company intends to Commercialize a Product in a jurisdiction outside the Territory, for purposes of such Product only, the term “Territory” shall be expanded to include such jurisdiction provided that AAIPharma agrees in writing and AAIPharma is or becomes compliant with all laws, regulations and other legal and industry requirements applicable to the Manufacture of such Product for subsequent Commercialization of such Product in such jurisdiction.  In the event AAIPharma is unwilling or unable to supply Product to a jurisdiction outside the Territory that Company intends to Commercialize, then Company may qualify other manufacturer(s) to manufacture Product solely for that jurisdiction outside the Territory and Company’s obligation to purchase Product exclusively from AAIPharma shall be waived for that jurisdiction.
3.2    Manufacture of Commercial Drug Product.  Subject to the terms and conditions contained herein, AAIPharma shall Manufacture, hold, handle and prepare for shipment all Product Manufactured pursuant to this Agreement (a) in accordance with this Agreement and the Quality Agreement, and (b) in material compliance with cGMP applicable to the Manufacturing of the Product to be Commercialized in the Territory.
3.3    AAIPharma Changes to Manufacturing Process.  Except as required by applicable federal, state, provincial or local law and/or respective regulations as established by the FDA and/or other regulatory authority (collectively, “Applicable Law(s)”), or cGMP, AAIPharma shall not Materially Change the Manufacturing process of a Product or change the facility where a Product is Manufactured that requires a change to a Marketing Authorization without the prior written consent of Company, which consent shall not be unreasonably withheld or delayed.  AAIPharma shall notify Company of all material changes, including Material Changes required by 

4
ActiveUS 164239593v.1

Applicable Law, as soon as practicable after AAIPharma learns of such change.  A “Material Change” is one that requires a submission to the FDA, EU, or other applicable regulatory authority.
3.4    Company Requested Changes.  Company shall inform AAIPharma in writing of any proposed modifications to the Specifications or the Manufacturing process.  Any proposed change shall require AAIPharma’s prior written consent, which consent shall not be unreasonably withheld or delayed.  AAIPharma shall make changes it agrees to as promptly as practicable; provided, however, that such changes comply with Applicable Law, cGMP and the Marketing Authorizations.
3.5    Costs of Changes.  Unless otherwise agreed by the Parties, any and all direct costs associated with changes requested by AAIPharma and changes required by Applicable Law that apply generally to AAIPharma’s facility where the applicable Manufacturing occurs shall be borne by AAIPharma; provided however, in the event Applicable Law imposes a registration fee (such as GDUFA) or similar fee on AAIPharma’s cGMP facilities, and the fee relates to AAIPharma’s services hereunder, the Parties shall determine in good faith an equitable portion of such fee to be paid by Company.  Unless otherwise agreed by the Parties, any and all direct costs associated with all other changes, including, without limitation, changes requested by Company, changes required by Applicable Laws that apply specifically to a Product, and changes required by a change to a Marketing Authorization, shall be borne by Company (collectively, the “Other Changes”).  If the change is an Other Change, (i) the Purchase Prices shall be adjusted by the change in AAIPharma’s cost of Manufacture of the Product caused by such Other Change, plus an amount necessary to maintain AAIPharma’s profit margin on such, and (ii) Company shall reimburse AAIPharma for costs, expenses or losses associated with write-offs, obsolescence and/or destruction of any work in process or finished inventory resulting from any such Other Change.
3.6    Notification and Approval of Changes.  Company shall have sole responsibility for obtaining any and all necessary regulatory approvals from the relevant regulatory agencies in the Territory for changes to the Specifications and the Marketing Authorizations and for reporting any changes to such Specifications and the Marketing Authorizations to the relevant regulatory agencies in the Territory as appropriate.  Upon request by Company, AAIPharma shall use commercially reasonable efforts to assist Company in obtaining any such approvals; provided that Company will pay AAIPharma its standard fees and expenses therefor.
3.7    Labeling.  Company shall be responsible for the labeling to be used on each Product and the packaging thereof, including any changes to such labels; provided that Company shall ensure that all such labeling complies with Applicable Laws.  AAIPharma shall use the specified labeling (and only such labeling) on the Products, and shall not use such labeling on any other product.  Any Company-directed change to a Product label shall be implemented by AAIPharma as soon as reasonably practicable following AAIPharma’s receipt of written notification of such label changes.  Company shall reimburse AAIPharma for costs incurred in connection with any such label changes, including without limitation, the costs of obsolescence of goods-in-process, packaging materials 

5
ActiveUS 164239593v.1

and supplies and finished goods not suitable for Commercializing in the Territory due to such label changes.
3.8    Finished Product Release.  AAIPharma will provide Company with manufacturing documents as are necessary for Company to release each lot of Product for human use.  Company shall be responsible for the final release of Product for human use.
3.9    Raw Materials and API.  AAIPharma shall purchase at its own expense and for its own account all Raw Materials, packaging components and other items of any nature whatsoever that AAIPharma may use to Manufacture the Products.  Except as otherwise agreed to between the Parties, all right, title and interest in and to these items, and in and to all work-in-process incorporating these items, shall remain the sole property of AAIPharma until Products incorporating such items are delivered for shipment to Company.  However, the total cost of changing the source and/or type of Raw Materials shall be at the sole cost of Company.  Company shall supply to AAIPharma at its own expense and for its own account all API to be used in the Manufacture of Products hereunder, and such API shall remain the sole property of Company.  AAIPharma shall have no liability for lost or damaged API unless caused by its negligence or intentional misconduct.  If such losses, in an annual reconciliation, lead to actual yields below [**] percent ([**]%) of theoretical, AAIPharma shall issue a credit to Company for the lesser of (a) an amount equal to Company’s then current replacement cost of the API, or (b) the amount AAIPharma would have charged Company for the amount of Product the lost quantity of API would have yielded.  As such, if Company desires to insure its API, Company should do so under its own appropriate insurance policy.  Company shall provide AAIPharma with documentation of its API cost at least annually on or before the anniversary of the Effective Date.
ARTICLE 4 
FORECASTS, ORDERS, DELIVERY AND ACCEPTANCE
4.1    Forecasting.  Company shall provide to AAIPharma a written good faith forecast estimating Company’s quarterly requirements (broken out on a month-to-month basis) of each Product for each of the first [**] calendar quarters during the Term at least [**] months prior to Launch of each Product.  In addition, within [**] weeks after the start of each quarter (i.e. [**]) during the Term, Company shall provide AAI Pharma with an updated rolling [**] month forecast estimating Company’s requirements (broken out on a month-to-month basis) of the Product that shall cover the succeeding [**] calendar month period (or the period until the expiration of the Term, if shorter) (each such forecast, a “Long-Term Forecast”).  Except as set forth in Sections 4.2(a) and 4.2(b), the Long-Term Forecast shall not be binding on either Party, but for the first [**] calendar months of a Long-Term Forecast, which shall be a “Firm Commitment” with respect to the Product, and but for the [**] calendar months of a Long-Term Forecast, which shall be a “Firm Forecast” with respect to the Product.

6
ActiveUS 164239593v.1

4.2    Firm Commitments.
(a)    Each Firm Commitment shall be a binding commitment for the quantities of each Product forecast for the first [**] calendar months of the Long-Term Forecast.  The quantity of each Product specified in any Firm Commitment for delivery to, and purchase by, Company in any calendar quarter shall not be less than [**] percent ([**]%) of the quantities forecasted for such quantities when it was the applicable Firm Forecast (the “Minimum Order Requirement”).
(b)    With respect to each Firm Commitment, Company shall submit to AAIPharma binding written purchase orders (a “Firm Order”) no later than [**] days prior to the requested delivery dates confirming the quantity of each Product ordered (which shall be in full Batch quantities), the requested delivery dates, and such other information as AAIPharma may find reasonably necessary to Manufacture the ordered Products.  AAIPharma will confirm the requested delivery dates within [**] business days of receipt of a Firm Order.
(c)    If Company fails to order and purchase the Minimum Order Requirement, then within [**] days following the end of the quarter in which the Minimum Order Requirement was not met, Company shall pay to AAIPharma the difference between:  (i) the Purchase Price for the applicable Minimum Order Requirement, and (ii) the Purchase Price that was paid by Company for the quantity ordered.
Furthermore, Company agrees that purchases may be made by AAIPharma of the Raw Materials, packaging components and other items to satisfy the production requirements for the Long-Term Forecast.  In such circumstances, if such Raw Materials, packaging components and other items are not included in finished Products purchased by Company within [**] months after such purchases have been made (or such longer period as the Parties may have agreed to), Company will pay to AAIPharma its costs thereof and, in the event such Materials are incorporated into Products subsequently purchased by Company, Company will receive credit for any of such costs previously paid to AAIPharma by Company.
(d)    AAIPharma shall Manufacture and prepare for shipment the quantity of a Product specified in the Firm Commitment and related purchase orders.  Notwithstanding the foregoing, with respect to a Product, in no event shall AAIPharma be required in any calendar quarter to deliver more than [**] percent ([**]%) of the quantities in the applicable Firm Forecast, but AAIPharma shall use its commercially reasonable and good faith efforts to deliver quantities in excess of [**]% of the applicable Firm Forecast.  The Firm Commitments shall be made available for shipment in accordance with Section 4.4.
4.3    Changes in Orders.  AAIPharma shall exercise its commercially reasonable efforts to comply with any proposed amendments to accepted Firm Orders that Company may request, but AAIPharma shall not be liable in any way for its inability to do so.  Firm Orders may be amended only by mutual agreement of the Parties and such amendments shall not affect the Minimum Order Requirement.

7
ActiveUS 164239593v.1

4.4    Delivery.  AAIPharma shall use commercially reasonable efforts to make Product available for shipment within [**] business days of the delivery date requested in the applicable Firm Order.  Company shall pay all crating, skidding, rigging, customs, freight, shipping, insurance and common carrier charges on all shipments in connection with Company’s chosen method of shipment of the Product.  All Product(s) shall be shipped EX WORKS (Incoterms 2010) AAIPharma’s manufacturing facility.  Title and risk of loss of Product shall pass to Company at the time the Products are placed on AAIPharma’s loading dock at Company’s disposal, not cleared for export and not loaded on any collecting vehicle.  Company shall be responsible for arranging the shipment of the Product(s) from AAIPharma’s manufacturing facility to its final destination (and storage charges shall be imposed [**] days after notice to Company that Product is available for shipment); provided, however, that Company must provide AAIPharma with reasonable evidence (e.g. a copy of the current DEA registration for the destination, when applicable) that such destination is authorized to handle the Product.  Notwithstanding anything to the contrary in this Agreement, Company acknowledges and agrees that AAIPharma shall have no obligation to release Product for shipment to any destination for which Company has not provided adequate evidence of authorization as required in this Section 4.4.  AAIPharma shall not be liable to Company for Product which is damaged or lost while in possession of a common carrier, and it shall be Company’s responsibility to recover any and all damage directly from such common carrier.
4.5    Inspection, Acceptance and Rejection of Delivered Products.
(a)    Company will have [**] days from receipt by Company to inspect and test Products for noncompliance with the applicable Specifications (the “Inspection Period”).
(b)    Except as provided in Section 4.5(c), Company shall give written notice if it intends to reject a Batch(es) of Product(s) - for not complying with the Specifications - within [**] days after the Inspection Period expires; otherwise such Batch(es) shall be deemed accepted.
(c)    If, after the Inspection Period, Company first discovers that a Batch(es) of Product(s) do not comply with the applicable Specifications, then Company shall so notify AAIPharma if it intends to reject such Batch(es) within [**] days after such discovery; otherwise such Batch(es) shall be deemed accepted.  AAIPharma will only be responsible for Batch(es) of Product(s) rejected after the Inspection Period solely to the extent that AAIPharma is responsible for said non-conformity.
(d)    Notwithstanding anything to the contrary herein, AAIPharma shall not be responsible for damages to Product during shipment, and in no event shall AAIPharma be responsible for noncompliance with Specifications for Product that met Specifications at time of Release To The Client or from non-conformities that result from a deficiency or change in the API utilized in such Batch(es) of Product(s) or a defect in the Specifications for the Products.
(e)    In the event that Company rejects Product(s) as provided in this Agreement, AAIPharma shall use commercially reasonable efforts (but within [**] days after AAIPharma’s receipt of Company’s notice of noncompliance) to replace the defective Product(s) or give notice 

8
ActiveUS 164239593v.1

that it disagrees with the rejection.  If Company and AAIPharma do not agree whether the Product(s) failed to meet applicable Specifications at the time of Release To The Client, such Products shall be submitted for testing to an independent laboratory or other authority of national reputation acceptable to both Parties for the purpose of determining the results.  Any determination by such authority shall be final and binding upon the Parties hereto.  If Company’s rejection is substantiated by the authority, AAIPharma shall pay the expenses associated with such analyses; otherwise Company shall pay such expenses and purchase the Product.
4.6    Non-Conforming Product(s).  Notwithstanding any other provisions of this Agreement, Company agrees, if so requested by AAIPharma, to return to AAIPharma any Product(s) that fail to meet Specifications or otherwise to dispose of such Product(s) as AAIPharma may direct, each at AAIPharma’s expense.
ARTICLE 5 
PRICE, TERMS OF PAYMENT
5.1    Purchase of Product(s).  The initial prices to be paid for the Products by Company to AAIPharma shall be set forth in Exhibit A attached hereto and incorporated herein by reference (the “Purchase Prices”).  The Purchase Prices are in United States dollars, and are exclusive of applicable taxes.  Company shall be responsible for the payment of any and all taxes applicable to the Products and Services described herein.
5.2    Price Change; Notice.  AAIPharma may increase the Purchase Prices during the Term by [**].  Upon request by Company, AAIPharma shall provide reasonable documentation that reflects the increase in cost of Raw Material Costs.  AAIPharma shall provide written notification of any annual increase in the Purchase Prices prior to the January 1st effective date of the increase in Purchase Prices, or as increases in the cost of Raw Materials occur, as applicable.
5.3    Invoices.  AAIPharma shall provide invoices to Company for the Product(s) upon each Release To The Client (e.g. finished bulk, finished packaged, or finished packaged and labeled), and Company shall pay each such invoice, in United States dollars, within [**] days after the date of each invoice regardless of when or whether Company has arranged for shipment of the Product(s) to its final destination.  Company shall make no setoff or deduction of any kind from any payments due to AAIPharma unless Company receives written authorization from AAIPharma authorizing such setoff or deduction.  Undisputed invoice balances not remitted within [**] days of the date of each invoice shall be subject to a [**] percent ([**]%) per month interest charge.  Should any part of the invoice be in dispute, Company shall pay the balance of the undisputed amount according to the terms and conditions described herein while said dispute is being resolved.  Should payment of undisputed amounts not be received within [**] days of invoice date, and after [**] days notice to Company, the payment shall be deemed in default and AAIPharma reserves the right to cease all work and pursue collection activities.  In the event of default in payment, Company shall be responsible for all collection fees and expenses incurred by AAIPharma, including reasonable attorney’s fees.

9
ActiveUS 164239593v.1

ARTICLE 6 
REGULATORY MATTERS; RECORDS
6.1    Annual Review and Stability Testing.  If listed in Exhibit A, AAIPharma will conduct an annual product review for the Products and upon completion of such review will forward a copy to Company.  The Parties agree that AAIPharma’s Manufacturing process and the Purchase Prices do not include stability testing or any other work not specifically set forth herein or in an Exhibit hereto.  Stability testing services and other services shall be provided at the then current AAIPharma rates for such services.
6.2    Access to AAIPharma’s Facilities by Company Representatives for Quality Audit.  During regular business hours and mutually agreed upon times, Company may review the records of AAIPharma and observe the manufacturing processes relating to the Services performed and expenses incurred to assure compliance with all provisions of this Agreement.  Such review must be completed in not more than [**] business days and shall be offered to Company by AAIPharma [**] and may be more pursuant to cause.  Subsequent reviews during the same calendar year or such reviews that cannot be completed in [**] business days will be at Company’s sole cost and expense, at AAIPharma’s then current rates.  Company shall also be provided an invoice for any incidental expenses AAIPharma incurs resulting from such review.  Company’s rights in this Section 6.2 shall be subject to compliance with AAIPharma’s reasonable measures for purposes of confidentiality, safety, and security, and will be further subject to Company’s compliance with AAIPharma’s premises rules that are generally applicable to all persons at AAIPharma’s facilities.  Should Company utilize one or more third party(ies) in exercising its rights in this paragraph, Company certifies that such party(ies) shall be subject to an obligation of confidentiality consistent with the obligations of confidentiality required of Company hereunder and such third party(ies) shall be subject to any and all conditions upon Company’s rights that are set forth in this Section.
6.3    Inspections by Governmental or Regulatory Authority.  AAIPharma shall be responsible for handling and responding to any FDA or other governmental body inspections or inquiries received by Company or AAIPharma regarding the Manufacturing of any Product during the Term.  In cases where AAIPharma is required to provide significant Company or Product specific support to such inspections or inquiries, Company agrees to pay AAIPharma for the time required at the then current AAIPharma regulatory support rate.  Each Party shall promptly notify the other regarding any such inquiries and provide the other Party copies of any pertinent correspondence from such authorities related to the Product or Services covered in this Agreement.  AAIPharma shall provide to Company and any governmental body any information reasonably requested by Company and/or such governmental body concerning any governmental inspection related to any Product (with all information provided to Company being subject to the confidentiality provisions in Section 10.1 herein and with AAIPharma being able to redact any information provided to Company to remove third party confidential information that does not relate to the Products).  AAIPharma agrees to notify Company of any regulatory inspection specific to one or more of the Products and shall allow Company to send a representative to the site being audited, however participation in the audit will be at the sole discretion of AAIPharma.  Company agrees to fully 

10
ActiveUS 164239593v.1

cooperate with and assist as requested by AAIPharma in fulfilling the obligations pursuant to this Section 6.3.
6.4    Complaints, Recalls, and Insurance
(a)    Complaints.  Product complaints received by Company with respect to Product Manufactured by AAIPharma hereunder shall be faxed to AAIPharma within [**] business days after receipt to:
AAIPharma Services Corp. 
Attention:  Corporate Quality 
2320 Scientific Park Drive 
Wilmington, NC 28405 
Facsimile No.:  [**]
As more fully described in the Quality Agreement, AAIPharma shall investigate all complaints directly associated with the Manufacture of Product(s) and shall provide an update every [**] days and a report to Company regarding its investigation and any conclusions.  Company shall investigate all other complaints associated with the Product(s).
(b)    Recall Procedures.  In the event that a recall, withdrawal or field correction of any Product (a “Recall”) is initiated, whether by a statutory or regulatory authority in any jurisdiction or by Company, AAIPharma shall reimburse Company for all costs and expenses incurred in procuring or complying with the requirements of such Recall to the extent that such Recall is initiated as a result of AAIPharma’s breach of this Agreement (which shall include but not be limited to AAIPharma’s noncompliance or nonconformity with the Specifications, GMP, or any Applicable Laws), intentional misconduct, negligence, or defective manufacturing, processing, testing, packing, or storage of Product prior to delivery to Company, and, in addition, AAIPharma shall refund to Company an amount equal to the cost of all API supplied to AAIPharma and incorporated into the recalled Product; but not more than the cost of the Batch(es) or portion of a Batch, prorated.  Company shall be responsible for all other costs and expenses associated with a Recall.  AAIPharma shall reasonably cooperate with Company in connection with any Recall.
(c)    Insurance.  At all times while this Agreement is in effect and for [**] years thereafter, AAIPharma and Company shall each:
		
	i
	maintain general liability insurance (including, without limitation, product liability insurance, liability for property damage, personal injury and contractual liability) with Products/Professional at limits not less than $[**] per occurrence/$[**] aggregate;

		
	ii
	maintain Workers’ Compensation as required by all applicable laws and Employer’s Liability coverage with a limit of not less than $[**]; and

11
ActiveUS 164239593v.1

		
	iii
	provide, within [**] days of the other Party’s request, Certificates of Insurance verifying insurance limits agreed upon as well as a [**] day Notice of Cancellation or Non-Renewal.

AAIPharma and Company shall each obtain all the insurance policies described in clauses 6.4(c)(i) and (ii) from insurers having A.M. Best ratings of A-VII or higher.
Company shall, at its own cost and expense, obtain and maintain in full force and effect during the Term of this Agreement All Risk Property Insurance, including transit coverage, in an amount equal to full replacement value covering Company’s property while it is at AAIPharma’s facilities or in transit to or from AAIPharma’s facilities.  Company shall obtain a waiver from any insurance carrier with whom Company carries All Risk Property Insurance releasing its subrogation rights against AAIPharma.  Company shall not seek reimbursement for any property claim, or portion thereof, that is not fully recovered from Company’s All Risk Property Insurance policy.
6.5    Quality Agreement.  The Parties intend to enter into a quality agreement acceptable to both Parties (the “Quality Agreement”) as soon as practicable after the Effective Date.  The Quality Agreement will detail the quality and regulatory obligations and responsibilities of the Parties with respect to the Products to the extent these obligations and responsibilities are not fully covered in this Agreement; provided, however, that in the event of conflict between the terms of this Agreement and the Quality Agreement, (i) the provisions of the Quality Agreement will prevail with respect to all matters pertaining to, or governed by, GMP and (ii) in all other respects, the provisions of this Agreement will prevail.
ARTICLE 7 
REPRESENTATIONS AND WARRANTIES
7.1    Representations and Warranties of AAIPharma.  AAIPharma hereby represents and warrants as follows:
(a)    As of Release To The Client, all Product(s) delivered to Company during the Term of this Agreement:  (i) shall have been Manufactured by AAIPharma in material compliance with this Agreement, the Quality Agreement, the Marketing Authorizations and cGMP, in each case, as in effect at the time of Manufacture, (ii) assuming compliance by Company with Section 3.7, shall not be adulterated or misbranded within the meaning of the Act, and (iii) shall not have been Manufactured by AAIPharma in violation of any Applicable Law in any material respect.
(b)    Upon delivery, AAIPharma shall convey good title to all Product(s) so delivered to Company.
(c)    The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby are within AAIPharma’s powers and have been duly authorized by all necessary action on the part of AAIPharma.  This Agreement has been duly executed and delivered by AAIPharma and constitutes legal, valid and binding obligations of AAIPharma, enforceable against AAIPharma in accordance with its terms.

12
ActiveUS 164239593v.1

(d)    The execution, delivery and performance by AAIPharma of this Agreement does not and will not (i) contravene or conflict with the organizational documents of AAIPharma Services Corp., (ii) contravene or conflict with or constitute a violation of any Applicable Laws, or (iii) breach or constitute a default under the provisions of any material contract, agreement or instrument to which it is a party or by which it is bound.
(e)    AAIPharma is not debarred and has not and shall not knowingly and intentionally use in any capacity the services of any third person debarred under subsections 306(a) or (b) of the Generic Drug Enforcement Act of 1992.
EXCEPT AS SET FORTH IN THIS SECTION 7.1, AAIPHARMA MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, AND SPECIFICALLY DISCLAIMS ALL SUCH REPRESENTATIONS AND WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, INFRINGEMENT, TITLE OR FITNESS FOR A PARTICULAR PURPOSE OR USE.
7.2    Representations and Warranties of Company.  Company hereby represents and warrants as follows:
(a)    The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby are within Company’s powers and have been duly authorized by all necessary action on the part of Company.  This Agreement has been duly executed and delivered by Company and constitutes legal, valid and binding obligations of Company, enforceable against Company in accordance with its terms.
(b)    The execution, delivery and performance by Company of this Agreement does not and will not (i) contravene or conflict with the organizational documents of Company, (ii) contravene or conflict with or constitute a violation of any Applicable Laws, or (iii) breach or constitute a default under the provisions of any material contract, agreement or instrument to which it is a party or by which it is bound.
(c)    Company shall comply in all material respects with all Applicable Laws relating to its Commercialization of the Product(s).
(d)    To the extent that Company supplies any Raw Materials, or API, or other information to AAIPharma (including packaging and labeling requirements) or engages in manufacturing with respect to any of the Products (either directly or indirectly through a third party), all such Raw Materials, API or other information and formulas will comply with the Specifications and applicable laws, including GMP.
(e)    Company represents that to the best of its knowledge, the manufacture or the sale of the Products does not and will not infringe any third party intellectual property rights or other rights and that it is not aware of any patents existing in the Territory in which Company markets or distributes such Products relating in any manner to the Products or any use, method, activity or 

13
ActiveUS 164239593v.1

application relating thereto which could adversely impact upon or prevent AAIPharma from Manufacturing the Products as contemplated by the terms hereof.
ARTICLE 8 
INDEMNIFICATION
8.1    By AAIPharma.  AAIPharma hereby indemnifies Company and its directors, officers, employees, Affiliates, stockholders, agents, attorneys, representatives, successors and Permitted Assigns (collectively, the “Company Indemnified Parties”) against and agrees to hold each of them harmless from any and all product liability claims associated with the Products, losses, liabilities, obligations, damages, costs and expenses (“Losses”) incurred by any Company Indemnified Party as a result of third party claims, actions or proceedings (collectively, “Third Party Claims”) to the extent based upon, attributable to or resulting from:  (a) any material misrepresentation or material breach of warranty made by AAIPharma in this Agreement, (b) any material breach of any covenant or agreement made or to be performed by AAIPharma pursuant to this Agreement, and (c) the negligence or willful misconduct by an AAIPharma Indemnified Party in connection with this Agreement; except in each case, to the extent such Losses are attributable to Company’s material breach of this Agreement or arising from the negligence or willful misconduct of Company.
8.2    By Company.  Company hereby indemnifies AAIPharma and its directors, officers, employees, Affiliates, stockholders, agents, attorneys, representatives, successors and assigns (collectively, the “AAIPharma Indemnified Parties”) against and agrees to hold each of them harmless from any and all Third Party Claims, including Losses incurred by any AAIPharma Indemnified Party to the extent based upon, attributable to or resulting from the performance of this Agreement and Services hereunder by AAIPharma (including, without limitation, any products liability claims related to Company products) other than for Losses for which AAIPharma is obligated to indemnify the Company Indemnified Parties under Section 8.1 above.
8.3    Indemnification Procedures.
(a)    The indemnified Party shall give the indemnifying Party prompt notice of any such claim or lawsuit (“Indemnification Claim”) (including a copy thereof) served upon it and shall fully cooperate with the indemnifying Party and its legal representatives in the investigation of any matter the subject of indemnification.  The indemnifying Party may enter into a settlement agreement with a claimant but shall not admit liability to a claimant without the prior written permission of the party or parties seeking indemnification, which permission shall not be unreasonably withheld.
(b)    The failure of the indemnified Party to give reasonably prompt notice of any Indemnification Claim shall not release, waive or otherwise affect the indemnifying Party’s obligations with respect thereto except to the extent that the indemnifying Party can demonstrate actual loss and prejudice as a result of such failure.
8.4    Limitation on Liability.  Except as set forth in Section 8.6 (Exceptions), neither Party shall be liable, whether in contract, tort (including negligence) or otherwise, for any punitive, 

14
ActiveUS 164239593v.1

special, indirect, incidental, consequential or exemplary damages (including lost profit or business interruption even if notified in advance of such possibility) arising out of or pertaining to the subject matter of this Agreement.
8.5    Aggregate Cap.  Except as set forth in Section 8.6 (Exceptions), the total aggregate liability of either Party to the other Party arising out of this Agreement shall be limited to the total amounts paid and payable by Company to AAIPharma under this Agreement during the twelve (12) months preceding the event in question.  Such liability cap amount does not alter each Party’s insurance obligations under Section 6.4(c) (Insurance).
8.6    Exceptions.  Sections 8.4 (Limitation on Liability) and 8.5 (Aggregate Cap) shall not apply to the following:  (a) a Party’s obligations to indemnify the other for Claims under Sections 8.1 and 8.2 (Indemnification); or (b) damages due to a Party’s breach of its confidentiality obligations or claims for infringement of proprietary rights.
ARTICLE 9 
TERM AND TERMINATION
9.1    Term of the Agreement.  Unless earlier terminated in accordance with this Article 9, this Agreement shall take effect and commence on the Effective Date and continue in effect, on a Product-by-Product basis, for five (5) years following Launch of a particular Product (the “Initial Term”).  In addition, after the expiration of the Initial Term with respect to a particular Product, this Agreement will automatically renew with respect to such Product for consecutive two (2) year terms (each, a “Renewal Period”) unless either of the Parties terminates this Agreement with respect to such Product at the end of the applicable Initial Term or any applicable Renewal Period by providing the other Party with written notice, in the case of Company, at least twelve (12) months, and in the case of AAIPharma, at least eighteen (18) months, prior to the end of the applicable Initial Term or applicable Renewal Period.  The Initial Term and all Renewal Periods for each Product shall be collectively referred to herein as the “Term” for such Product.
9.2    Termination.  Notwithstanding Section 9.1 herein, this Agreement may be terminated as follows:
(a)    immediately upon the delivery of written notice by one Party, if the other Party materially breaches any of the provisions of this Agreement and such breach is not cured within [**] calendar days after receipt of written notice identifying such breach (or if cure has been commenced during such period, if it is not diligently prosecuted to completion); or
(b)    immediately upon the delivery of written notice by one Party, if the other Party has been unable to perform its obligations hereunder for one hundred twenty (120) calendar days by reason of force majeure (as defined in Section 12.11).
(c)    either Party at its sole option may immediately terminate this Agreement upon written notice, but without prior advance notice, to the other Party in the event that (i) the other Party is declared insolvent or bankrupt by a court of competent jurisdiction; (ii) a voluntary petition of 

15
ActiveUS 164239593v.1

bankruptcy is filed in any court of competent jurisdiction by such other Party; (iii) ceases or threatens to cease to carry on business, or (iv) this Agreement is assigned by such other Party for the benefit of creditors.
(d)    Company may terminate this Agreement as to any Product upon forty-five (45) days’ written notice in the event that any governmental agency takes any action, or raises any objection, that prevents Company from importing, exporting, purchasing or selling such Product.
(e)    Company may at any time unilaterally terminate this Agreement only with respect to an individual Product if:  (i) such individual Product is withdrawn from the market; (ii) Company divests, out-licenses or otherwise disposes of such individual Product to a party other than an Affiliate of Company; provided, however, for greater certainty, that this Subsection 9.2(e) shall not entitle Company to terminate this Agreement in whole or in part in connection with a sale or other disposition of all or substantially of its interest in the Products as a whole or any significant portion thereof; or (iii) such individual Product is found to infringe a third party’s Intellectual Property.
Company shall provide to AAIPharma not less than twelve (12) months’ advance written notice of such partial termination of this Agreement except where it results from either a market withdrawal at the mandate of a competent authority having jurisdiction or an infringement as in Subsection 9.2(e)(iii) above, in which cases the termination can be effective immediately; provided, however, in respect of Subsection 9.2(e)(ii), Company may provide less than the twelve months advance notice if the acquiring party agrees in writing to purchase the particular individual Product from AAIPharma for the balance of the notice period on the same terms and conditions as contained herein.
Any termination pursuant to this Section 9.2 may be effected with respect to this entire Agreement or with respect to any individual Product or Products, at the discretion of the terminating Party, and shall be effected by delivering written notice of such termination to the other Party and shall be effective upon the date of such written notice unless a later date is specified in such written notice.
9.3    Effect of Termination.  Upon termination or expiration of this Agreement, in its entirety or with respect to any particular Product(s):
(a)    Cessation of Activities.  Except as provided in Section 9.3(c), AAIPharma shall stop the Manufacturing of Products; each Party shall return to the other any Confidential Information of such other Party concerning the Product(s) subject to such termination or expiration.
(b)    Payment of Minimum Order Requirement; Company to Take Product.  In the event of termination by AAIPharma pursuant to Section 9.2(a), (b), or (c) above, Company shall pay AAIPharma any balance remaining of the Minimum Order Requirement in the same manner as set forth in Section 4.2(c) in the case of a failure to order and purchase the Minimum Order Requirement in any calendar quarter.  Company shall, at its option and with respect to any Products that are subject to termination, be permitted to take delivery for any Raw Materials, work-in-process (at AAIPharma’s material costs) or finished Product (at prices then in effect under this Agreement).

16
ActiveUS 164239593v.1

(c)    Firm Orders.  If this Agreement is terminated by Company pursuant to Section 9.2(a), at Company’s option, Firm Orders with respect to the Product(s) not yet started shall be cancelled, or, if requested by Company in writing, AAIPharma will, with respect to the Product(s) subject to such termination, complete or cause the completion of the Manufacturing of any work-in-process that is subject to a valid and effective Firm Order on the date on which the termination is effective.  Once such work-in-process is completed, the resulting Product(s) shall be shipped in accordance with Company’s Firm Orders and paid for by Company in accordance with Section 5.3.
9.4    Survival.  The Parties agree that the following provisions shall survive the termination of this Agreement; the definitions of Article 1 to the extent such Definitions pertain to terms in surviving provisions, Sections 4.5, 4.6, 6.4, and Articles 5, 7, 8, 9, 10, 11 and 12.
ARTICLE 10 
CONFIDENTIALITY AND PUBLIC DISCLOSURE
10.1    AAIPharma will hold in strict confidence, and shall not disclose to any third party without Company’s prior written consent, all proprietary or confidential information concerning Product, API and all materials and information provided by Company (collectively, “Company Information”).  AAIPharma further agrees that it shall not use Company Information for any purpose other than the Manufacturing of Products for Company under this Agreement.
10.2    Company will hold in strict confidence, and shall not disclose to any third party without AAIPharma’s prior written consent, all proprietary or confidential information and materials belonging to AAIPharma (“AAIPharma Information”).
10.3    “Confidential Information” shall mean Company Information and AAIPharma Information.  Each Party may disclose Confidential Information only to its directors, officers and employees who have need to know Confidential Information for the purposes of this Agreement, and each Party will be responsible for ensuring that all its directors, officers, and employees to whom Confidential Information is disclosed will also observe such obligations of confidentiality and non-use as provided herein.
10.4    The above confidentiality obligation shall not apply or shall cease to apply to any information which the receiving party can demonstrate by documentary proof:
(a)    is already in the possession of the receiving party at the time it is disclosed by the disclosing party;
(b)    is in the public domain at the time it is disclosed by the disclosing party;
(c)    enters the public domain through sources independent of the receiving party and through no fault of the receiving party;
(d)    is lawfully obtained by the receiving party without any confidentiality restrictions from a third party who has a right to disclose such information to the receiving party;

17
ActiveUS 164239593v.1

(e)    has been at any time developed by the receiving party independently of disclosure from the disclosing party.
10.5    Neither Party (nor any of their respective Affiliates) shall issue any press release or make any public announcement with respect to this Agreement and the transactions contemplated hereby without obtaining the prior written consent of the other Party (such consent not to be unreasonably withheld or delayed), except as may be required by Applicable Law upon the advice of counsel and only if the disclosing Party provides the non-disclosing Party with a reasonable opportunity to first review the release or other public announcement, to the extent practicable.
10.6    These confidentiality obligations shall survive termination or expiration of this Agreement for a period of [**] years.
ARTICLE 11
INTELLECTUAL PROPERTY
11.1    AAIPharma further agrees that all Company Information, know-how, data, discoveries and inventions relating to Product and API which result from the Manufacture of Products shall constitute the sole and exclusive property of Company.  AAIPharma hereby assigns to Company all right, title and interest throughout the world in and to all inventions (whether or not patentable), processes, techniques, improvements, discoveries and developments discovered and reduced to practice by AAIPharma (collectively, “Project IP”) in the course of providing Services which are directly and solely related to the Manufacture of Product hereunder.  AAIPharma will, at the expense and the written request of Company, do all reasonable acts and measures and execute all documents as Company may reasonably request to transfer to and vest in Company the ownership and registration of all intellectual property rights that may exist in such Project IP.
11.2    Company acknowledges that AAIPharma possesses certain inventions, processes, techniques, improvements, know-how, trade secrets, discoveries and other intellectual property and other proprietary assets, including drug delivery technologies (hereinafter, “AAIPharma Proprietary Technology”) which have been independently developed by AAIPharma.  In the event Company chooses to further develop and/or commercialize a technology comprising, in whole or in part, AAIPharma Proprietary Technology, Company will obtain a license from AAIPharma to use such AAIPharma Proprietary Technology.  Such license agreement shall be memorialized in a separate agreement to be negotiated in good faith by the Parties.
11.3    Company acknowledges that AAIPharma is in the business of providing services for a variety of organizations other than Company.  Accordingly, nothing in this Agreement, with the exception of the exclusivity obligations set forth in Article 3.1 herein, shall preclude or limit AAIPharma from providing services or developing materials for itself or other clients, or from utilizing the general knowledge gained during the course of its performance hereunder to perform similar services for other clients, provided that such provision of services or development of materials do not constitute a breach of confidentiality under Article 10 or the exclusivity obligations set forth in Article 3.1 herein.

18
ActiveUS 164239593v.1

ARTICLE 12 
MISCELLANEOUS
12.1    Successors and Assigns.  Neither Party may assign its rights or obligations under this Agreement without the prior written consent of the other Party; provided, however, that either Party may assign this Agreement, in whole or in part, without such consent, to an Affiliate of such Party or to a Third Party that acquires substantially all of the assets of a Party to which this Agreement relates, upon written notice to the other Party of any such assignment and such Party hereby guarantees the performance of any such Affiliate, and, in the case of a Third Party assignment, such Third Party shall assume the obligations of the assigning Party under this Agreement.  No assignment shall relieve any Party of responsibility for the performance of any obligation, which such Party may have or incur hereunder.  This Agreement shall be binding upon and inure to the benefit of each of the Parties and each such Party’s successors and permitted assigns.
12.2    Notices.  Any notice required or permitted under this Agreement shall be in writing, shall specifically refer to this Agreement, and shall be sent by hand, recognized overnight courier, confirmed facsimile transmission, or registered or certified mail service, postage prepaid, return receipt requested, to the following addresses or facsimile numbers of the Parties:
Company:
Marathon Pharmaceuticals, LLC 
1033 Skokie Blvd, Suite 600 
Skokie, IL 60062 USA 
Attn:  General Counsel 
Fax:  [**]
AAIPharma:
AAIPharma Services Corp. 
2320 Scientific Park Drive 
Wilmington, NC 28405 
Attn:  Legal Department 
Fax:  [**]
All notices under this Agreement shall be deemed received (i) upon receipt when sent by hand, (ii) two (2) business days after deposit with a recognized overnight courier, (iii) upon confirmation of delivery when sent by facsimile, and (iv) five (5) business days after deposit in registered or certified mail service.  A Party may change its contact information immediately upon written notice to the other Party in the manner provided in this Section.
12.3    Waiver.  No delay on the part of AAIPharma or Company in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of either Party of any right, power or privilege hereunder operate as a waiver of any other right, power or privilege hereunder, nor shall any single or partial exercise of any right, power or privilege 

19
ActiveUS 164239593v.1

hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.  Any provision of this Agreement may be waived if, and only if, such waiver is in writing and signed by the Party against whom the waiver is to be effective.
12.4    Entire Agreement.  This Agreement and the Quality Agreement constitute the entire agreement between the Parties with respect to the subject matter hereof and supersede all prior agreements, understanding and negotiations, both written and oral, between the Parties with respect to the subject matter of this Agreement.
12.5    Amendment.  This Agreement may be modified or amended only by written agreement of the Parties hereto.
12.6    Counterparts.  This Agreement may be executed by facsimile and in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute a single instrument.  This Agreement may be executed on signature pages exchanged by facsimile, in which event each Party shall promptly deliver to the others such number of original executed copies as the others may reasonably request.
12.7    Governing Law; Jurisdiction.  This Agreement shall be governed and construed in accordance with the laws of the State of Delaware excluding any choice of law rules which may direct the application of the law of another state.
12.8    Severability.  If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of any Party hereto under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom, and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar to the terms to such illegal, invalid or unenforceable provision as may be possible and reasonably acceptable to the Parties herein.
12.9    No Third Party Rights.  Except as otherwise expressly set forth herein, no provision of this Agreement shall be deemed or construed in any way to result in the creation of any rights or obligations in any person not a Party to this Agreement.
12.10    Exhibits.  The Exhibits referenced in this Agreement are an integral part of this Agreement and are incorporated herein by reference.
12.11    Force Majeure.  If either Party is prevented from complying, either totally or in part, with any of the terms or provisions set forth herein by reason of force majeure, including, by way of example and not of limitation, fire, flood, explosion, storm, hurricane, strike, lockout or other labor dispute, riot, war, rebellion, accidents, acts of God, or acts of governmental agencies or instrumentalities, in each case to the extent beyond its control despite its commercially reasonable 

20
ActiveUS 164239593v.1

efforts to avoid, minimize, and resolve such cause as promptly as possible, said Party shall (a) provide written notice of same to the other Party, and (b) subject to the obligations set forth above with respect to said Party’s efforts to remove the disability, its obligations that are prevented from compliance by such force majeure are suspended, without liability, during such period of force majeure.  Said notice shall be provided within ten (10) business days of the occurrence of such event and shall identify the requirements of this Agreement or such of its obligations as may be affected.  The Party so affected shall give to the other Party a good faith estimate of the continuing effect of the force majeure condition and the duration of the affected Party’s nonperformance.
12.12    No Other Relationship.  It is expressly agreed that AAIPharma, on the one hand, and Company, on the other hand, shall be independent contractors and that nothing contained herein shall be deemed to create any joint venture or partnership between the Parties hereto, and, except as is expressly set forth herein, neither Party shall have any right by virtue of this Agreement to bind the other Party in any manner whatsoever.
12.13    Additional Product.  The Parties covenant and agree that additional products may be added to this Agreement and such additional products shall be governed by the general conditions hereof with any special terms (including, without limitation, price) governed by an addendum hereto.
12.14    Dispute Resolution.
(a)    Negotiated Settlement.  In the event of a dispute regarding payment or the performance of Services pursuant to this Agreement (each, a “Dispute”), the Parties shall endeavor to negotiate in good faith an agreeable solution.  If after [**] business days following receipt of a Party’s written notification of a Dispute such Dispute has not been resolved, the Dispute shall be brought to the attention of the senior management of each Party and such senior manager or his/her designee will negotiate in good faith to define and implement a final resolution.  The intent of this Section 12.14 is to encourage the Parties to work together to resolve any Dispute without having to rely on arbitration or any other legal proceeding.  However, nothing in this Section 12.14 shall prevent or inhibit either Party to institute any other action to resolve such Dispute(s).
(b)    Binding Arbitration.  If not resolved in accordance with the preceding paragraph (a) then any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.
[SIGNATURE PAGE FOLLOWS]

21
ActiveUS 164239593v.1

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
Marathon Pharmaceuticals, LLC
By: /s/ Patrick J. Morris    
Printed Name: Patrick J. Morris    
Title: EVP of Legal Affairs and General Counsel    
Date: 10/9/15    
AAIPharma Services Corp.
By: /s/ Syed T. Husain    
Printed Name:  Syed T. Husain
Title:  Chief Commercial Officer
Date: 10/7/15    

22
ActiveUS 164239593v.1

Exhibit A
Product(s), Batch Sizes, and Cost
Deflazacort tablets in the following strengths to be marketed in the Territory.
	
					
	Dosage Strength
	Dosage 
Form
	Lot 
Size
	Bottle 
Count
	Price/ Bottle

	6-mg
	Tablet
	[**]
	100
	$[**]

	18-mg
	Tablet
	[**]
	30
	$[**]

	30-mg
	Tablet
	[**]
	30
	$[**]

	36-mg
	Tablet
	[**]
	30
	$[**]

23
ActiveUS 164239593v.1

Exhibit B
Specifications
[Attached]

24
ActiveUS 164239593v.1

Bulk Product Specification
SUBJECT:  Deflazacort Tablets, 6 mg        BP-3166-00 
CLIENT:  Marathon Pharmaceuticals, LLC        Page 2 of 2

Confidential Materials omitted and filed separately with the Securities and Exchange Commission. A total of 12 pages were omitted. [**]

ActiveUS 164239593v.1

Amendment #1
THIS AMENDMENT #1 (“Amendment”) is entered into as of September 18, 2016 (the “Amendment Effective Date”) by and between Alcami Corporation, formerly known as AAIPharma Services Corp. (“Alcami”) and Marathon Pharmaceuticals, LLC (“Company”).
WHEREAS, Company and Alcami entered into a Commercial Manufacturing Agreement with an effective date of September 18, 2015 (the “Agreement”);
WHEREAS, the Parties have requested modifications to Exhibits A and B of the Agreement; and
WHEREAS, the Parties wishes to implement the requested modifications upon the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each party hereto to the other, both parties mutually agree as follows:
		
	1.
	Capitalized terms not otherwise defined herein will have the meaning given to them in the Agreement.

		
	2.
	Where found in the Agreement, references to AAIPharma Services Corp. and AAIPharma shall be deleted and replaced with Alcami Corporation and Alcami, respectively.

		
	3.
	Exhibit A, Product(s), Batch Sizes, and Cost, shall be deleted in its entirety and replaced with the attached Exhibit A1.

		
	4.
	The specifications in Exhibit B shall be deleted in their entirety and replaced with the attached Exhibit B1.

		
	5.
	[**].

		
	6.
	Notwithstanding, the Parties expressly agree that purchase orders #2348, #2349, #2350, #2351, #2365, and #2366 submitted by Company to Alcami prior to the Amendment Effective Date, shall be prepared and shipped according to the terms outlined in the previously agreed to Exhibit A and Exhibit B respectively.

		
	7.
	[**].

ActiveUS 164239593v.1

Except as otherwise modified herein, the Agreement will remain in full force and effect.
ACKNOWLEDGED, ACCEPTED, AND AGREED TO:
	
		
	Alcami Corporation

By:  /s/ Syed T. Husain   

Name: Syed T. Husain   

Title: Chief Commercial Officer   

Date: 11/30/2016   

	Marathon Pharmaceuticals, LLC

By: /s/ Patrick J. Morris   

Name: Patrick J. Morris   

Title:  EVP of Legal Affairs and General Counsel   

Date: 11/11/16   

ActiveUS 164239593v.1

Exhibit A1
Product(s), Batch Sizes, and Cost
Deflazacort tablets in the following strengths to be marketed in the Territory:
	
					
	Dosage  
Strength
	Dosage Form
	Lot Size (Bottles)
	Bottle Count
	Price/Bottle (USD)

	3 mg
	Tablet
	[**]
	100
	$[**]

	6 mg
	Tablet
	[**]
	100
	$[**]

	18 mg
	Tablet
	[**]
	30
	$[**]

	30 mg
	Tablet
	[**]
	30
	$[**]

	36 mg
	Tablet
	[**]
	30
	$[**]

Secondary Packaging of Pre-Filled Deflazacort Oral Suspension Bottles 
(13ml fill, 22.75 mg/ml)

	
					
	Dosage  
Strength
	Dosage Form
	Lot Size (Bottles)
	Fill Volume
	Price/Bottle (USD)

	22.75 mg/mL
	Oral Suspension
	[**]
	13mL
	$[**]

ActiveUS 164239593v.1

Exhibit B1
Specifications
[Attached]
[Note: not attached by the parties]

ActiveUS 164239593v.1

Amendment #2
THIS AMENDMENT #2 (“Amendment”) is entered into as of January 6, 2017 (the “Amendment Effective Date”) by and between Alcami Corporation, formerly known as AAIPharma Services Corp. (“Alcami”) and Marathon Pharmaceuticals, LLC (“Company”).
WHEREAS, Company and Alcami entered into a Commercial Manufacturing Agreement with an effective date of September 18, 2015 and as amended September 18, 2016 (the “Agreement”);
WHEREAS, the Parties have requested modifications to the Agreement; and
WHEREAS, the Parties wish to implement the requested modifications upon the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is herby acknowledged by each party hereto to the other, both parties mutually agree as follows:
		
	1.
	Capitalized terms not otherwise defined herein will have the meaning given to them in the Agreement.

		
	2.
	Section 1.35, Territory, shall be deleted and replaced with the following:

“1.35    “Territory” shall mean the United States, its territories and possessions[**].”
Except as otherwise modified herein, the Agreement will remain in full force and effect.
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment as of the Amendment Effective Date.
	
		
	Alcami Corporation

By:  /s/ Syed T. Husain   

Name: Syed T. Husain   

Title: Chief Commercial Officer   

Date: 1/11/2017   

	Marathon Pharmaceuticals, LLC

By: /s/ Patrick J. Morris   

Name: Patrick J. Morris   

Title:  EVP of Legal Affairs and General Counsel   

Date: 1/6/17   

ActiveUS 164239593v.1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00273-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00273-of-00352.parquet"}]]