DISTRIBUTION AGREEMENT

1.1

Appointment . CTI hereby appoints Distributor to act as a distributor of the Product and Distributor hereby accepts such appointment. During the period of time that this Agreement is in effect, Distributor shall sell the Product to third parties and perform the other obligations set out herein.

1.2

Territory . Subject to the rights of the CTI under this Section 1.2, Distributor shall be a distributor of the Product in all the states of the United States and the District of Columbia (“ Territory ”). The Parties acknowledge and agree that (i) CTI may distribute the Product in the Territory directly to health care providers, including hospitals and physicians, and pharmacies, and notwithstanding the grant of a distributorship to Distributor, such direct distribution by CTI shall not be construed to be a violation of this Agreement, and (ii) CTI may at its option appoint additional distributors of the Product in the Territory.

2.1

Price .

2.1.1

Distributor shall purchase Product from CTI at the prices set forth in Schedule A , as amended in CTI’s sole discretion from time to time. Upon an increase in price, Distributor may, at the Product price in effect prior to the announced price increase, purchase a one-time aggregate quantity of Product that does not exceed [***] of the average monthly purchases made by Distributor since the beginning of the Initial Term. In other words, upon a price increase, Distributor may purchase a one-time aggregate quantity of Product that equals Distributor’s monthly average purchases of the Product since the Effective Date, plus [***], at the Product price in effect prior to the announced price increase.

2.1.2

All prices are exclusive of federal, state and local excise, sales, use and other taxes levied or imposed on the sale, shipment, delivery, ownership, possession or resale of Product or any other activities contemplated under this Agreement. Except for taxes on CTI’s income, Distributor shall be liable for and pay all taxes imposed in connection with the activities contemplated in this Agreement.

2.2

Placing Orders for the Product .

2.2.1

Distributor shall order the Product from CTI, and CTI shall sell the Product to Distributor. CTI shall arrange for shipment of the Product to the Distributor pursuant to Section 2.3 of this Agreement.

2.2.2

With respect to the timing of placing orders for the Product throughout the Initial Term and all renewal terms thereafter, the Parties shall establish a mutually agreeable forecasting procedure; provided, however, that Distributor shall keep a minimum inventory on hand sufficient to satisfy [***] of Product orders based upon current levels of Product distribution. Upon request by Distributor, CTI agrees to review this minimum inventory requirement and discuss possible modifications with Distributor.

2.3

Shipment of the Product to Distributor .

2.3.1

CTI shall ship Product to Distributor F.O.B. shipping points at CTI’s expense. Shipment shall be made by common carrier, overnight courier or any other similar method of shipment in CTI’s sole discretion. Title to Product shall transfer from CTI to Distributor upon delivery by CTI of the Product to the common carrier. Risk of loss of Product shall transfer from CTI to Distributor upon delivery of Product to Distributor’s warehouse or other storage facility.

2.3.2

Upon receipt of shipments of Product at Distributor’s warehouse or other storage facility, Distributor shall unload each shipment of Product immediately.

***

Confidential treatment has been requested as to certain portions of this agreement. Such omitted confidential information has been designated by asterisks and has been filed separately with the Securities and Exchange Commission. ***

2.3.3

Distributor shall carefully examine the Product upon delivery and shall notify CTI of any non-delivery of a portion of a shipment or any defect in any Product that is reasonably discoverable upon visual inspection of the Product without unloading individual shipping units. Distributor shall provide CTI with the notice required pursuant to this Section 2.3.3 (i) by telephone within [***] business days after receipt of such undelivered or damaged Product; and (ii) in writing within [***] business days after such receipt. The written notice of non-delivery or defect shall include a quantification of the undelivered Product or a detailed written description of the nature of the defect, as the case may be.

2.3.4

Upon receipt of notice of non-delivery or defect, CTI, at its option, may (i) for non-delivery, replace such undelivered Product or issue Distributor a credit in the amount of the purchase price for any undelivered Product; or (ii) for defective Product, replace or repair any defective Product or issue Distributor a credit in the amount of the purchase price for any defective Product.

2.3.5

In the absence of written notice for any reason from Distributor to CTI in accordance with the terms of this Section 2.3, a shipment of Product shall be deemed to have been delivered and accepted by Distributor as complete and in satisfactory condition as to defects discoverable upon visual inspection.

2.3.6

Distributor shall, at CTI’s expense, follow CTI’s instructions to return to CTI or CTI’s third party disposal company any Product delivered to Distributor that is not in compliance with CTI’s specifications.

2.4

Storage and Packaging .

2.4.1

Distributor shall store Product at any of its warehouses or storage facilities as it sees fit to meet distribution needs. Distributor shall not manufacture, mix, or process any of the Product. Distributor shall be responsible for inventory control of the Product, subject to CTI’s determination of the appropriate shelf-life of the Product. Distributor shall not commingle the Product with any other item or product in Distributor’s custody or control. For so long as any the Product is in Distributor’s possession, Distributor shall store the Product in accordance with the requirements set forth in the Product package insert and FDA-approved labeling, including any requirements with respect to refrigeration.

2.4.2

Distributor shall not alter Product packaging without CTI’s prior written consent and shall not alter Product labeling except to add a prescription label to Product, as permitted by applicable law. Distributor shall at all times comply with the information and recommendations communicated by CTI in writing with respect to the storage, handling and shipment of the Product.

2.4.3

Distributor shall be responsible for all costs associated with storage, handling and shipment of Product from Distributor’s warehouse or other storage facility.

***

Confidential treatment has been requested as to certain portions of this agreement. Such omitted confidential information has been designated by asterisks and has been filed separately with the Securities and Exchange Commission. ***

2.5

Payment .

2.5.1

All amounts due to CTI under this Agreement are payable by check to CTI in United States funds. CTI shall invoice Distributor for all amounts due hereunder, and payment of the invoice shall be due, net of approved returns, thirty (30) days from the date of the invoice; provided, however, that Distributor will have sixty (60) days to pay the initial invoice for the first delivery of Product.

2.5.2

In the event that Distributor fails to pay such invoice in full within thirty (30) days, Distributor shall pay CTI late payment charges of one percent (1%) (or the maximum amount permissible under applicable law, if lower) on all unpaid amounts calculated from the end of that thirty (30) day period. The Parties agree that should any provision of this Section 2.5.2 violate any law, rule or regulation pertaining to usury or the contracting for or charging of interest, then the excess of interest contracted for or charged or collected over the maximum lawful rate of interest shall be applied as a prepayment of future obligations due by Distributor to CTI.

2.5.3

The Parties agree that any discounts, rebates, incentives, or other reductions in price issued by CTI to Distributor under this Agreement may constitute a discount within the meaning of 42 U.S.C. §1320a-7b and the corresponding regulations. Distributor may have an obligation to disclose and reflect such discount to any state or federal program that provides cost or charge based reimbursement to Distributor for the items to which the discount applies. In order to assist Distributor’s compliance with any such obligations, CTI agrees that it shall fully and accurately report all discounts on the invoices, coupons or statements submitted to Distributor and inform Distributor of its obligations to report such discounts; or where the value of a discount is not known at the time of sale, CTI shall fully and accurately report the existence of the discount program on the invoices, coupons or statements submitted to Distributor, inform Distributor of its obligations to report such discounts, and when the value of the discount becomes known, provide Distributor with documentation of the calculation of the discount identifying the specific goods or services purchased to which the discount will be applied. It will be then Distributor’s sole responsibility to disclose or reflect such discounts to any state or federal program that provides reimbursement to Distributor. CTI shall also provide to Distributor any other information that Distributor may request that is necessary for it to obtain in order to comply with any such obligations, and CTI shall refrain from doing anything that would impede Distributor from meeting its obligations under this Section or applicable laws and regulations.

2.6

Product Delivery Device . Administration of the Product by a patient requires the use of a unique delivery device, which is the specific customized breath actuated delivery device used for administration of the Product that is dispensed pursuant to a physician’s prescription and that meets the requirements set out on the Product’s package insert as approved by the FDA and has been selected by the CTI (the “ Delivery Device ”).

2.6.1

Distributor shall enter into a separate supply agreement with the manufacturer of the Delivery Device, and Distributor shall order Delivery Devices from the manufacturer in such quantities as are necessary to meet the demand for the Delivery Device. Distributor and the Delivery Device manufacturer shall establish a mutually agreeable forecasting procedure as set forth in Section 2.2.3 above. The Parties agree to meet every twelve (12) months to review and discuss external factors that are affecting reimbursement of the Delivery Device.

2.6.2

Distributor acknowledges and agrees that each patient administering the Product requires two Delivery Devices. Distributor shall monitor its distribution of Product and establish a quality assurance program that will ensure each patient who receives the Product, directly or indirectly from Distributor, has at all times two Delivery Devices.

2.6.3

Distributor shall provide technical support for the Delivery Devices on an ongoing basis, to distribute maintenance parts per the Delivery Device manufacturer’s recommended schedule, and to ensure next day delivery of a replacement Delivery Device if a reported malfunction cannot be resolved.

2.6.4

Distributor shall not redistribute any Delivery Devices that have been returned to Distributor. The Delivery Device selected by CTI is approved for use for a thirty-six (36) month period at which time it must be replaced. Distributor shall establish a quality assurance program that will initiate such replacement on a timely basis for any current customers.

2.6.5

In the event that CTI approves the use of an alternative Delivery Device, CTI agrees to underwrite the costs of replacing all of the older Delivery Devices in use by Distributor’s customers with a new Delivery Device. (This does not include unused inventory of Delivery Devices that can be returned to the manufacturer for full credit). Distributor agrees to work in good faith to expeditiously deliver the replacement Delivery Devices and to secure return of the older Delivery Devices. The costs that will be reimbursed by CTI include the cost of acquiring the replacement Delivery Devices and the cost of shipping these Delivery Devices to Distributor’s customers. In addition, if there is an inventory of the older Delivery Devices on hand with Distributor and the Delivery Device manufacturer will not accept return for full credit of these Delivery Devices, CTI will reimburse Distributor for the costs of this existing inventory.

2.7

Wholesale Inquiries .

2.7.1

The Parties acknowledge and agree that they are entering into an arrangement whereby Distributor is providing retail pharmacy distribution services, not wholesale distribution services. As used herein, the Parties do not intend for the term “retail pharmacy” to have any specific legal definition under federal or state law.

2.7.2

In conjunction with the understanding of the Parties set forth in Section 2.7.1, Distributor shall, in a manner to be mutually agreed to by the Parties, forward to the wholesale pharmacy designated by CTI, all inquiries by potential wholesale customers regarding orders for the Product.

2.8

Returns and Recalls .

2.8.1

Returns . CTI will accept returns of Product as set out in the standard operating procedures, a copy of which will be provided to Distributor.

2.8.2

Recalls .

(a)

CTI shall promptly notify Distributor of any recalls of the Product initiated by CTI or required by the FDA. Upon receipt of notice of a recall from CTI, Distributor shall immediately notify the affected customers in accordance with product specific standard operating procedures as mutually agreed upon by Distributor and CTI. CTI shall provide Distributor with the form of letter to be used in connection with notice of any recall which shall contain the appropriate instructions as to whether the customer should return or dispose of the affected Product.

(b)

CTI shall be responsible for the mailing, shipping and reasonable administrative expenses incurred by Distributor in connection with the recall as well as the cost of replacement Product for customers, provided that the reason for the recall does not arise from (i) the gross negligence or intentional misconduct of Distributor or any of its agents or employees, or (ii) failure of Distributor to comply with the terms of this Agreement.

(c)

Distributor shall cooperate in any recalls by providing relevant Product tracking information to CTI.

(d)

Distributor shall maintain for three (3) years after termination or expiration of this Agreement such information as shall be reasonably required by CTI to effect a Product recall after termination or expiration of this Agreement, and shall make such information available to CTI, at CTI’s request, in the event of such a recall.

(e)

Distributor shall cooperate with CTI in investigating any Product failure that resulted in the need for a recall.

3.1

Delivery and Distribution-Related Services .

3.1.1

Reimbursement Assessment . Distributor shall investigate a prospective patient’s ability to pay for the Product and Distributor shall make its own

determinations as to those prospective patients to whom Distributor is willing to sell Product.

3.1.2

Dedicated Toll-Free Number . Distributor shall offer its own toll free phone number, 1-866-4PH-TEAM, where health care professionals in clinics, physician’s offices, infusion centers, or home care can: (i) identify whether prospective patients have insurance benefits for Product; (ii) coordinate timely delivery of Product and supplies; and (iii) arrange to have medication billed directly to a Patient’s (as that term is defined below) third party payor.

3.1.3

Dispensing and Delivery to Patients .

(a)

In-Network Provider .

(i)

If Distributor is an in-network provider for a potential patient’s payor, Distributor shall offer to serve the prospective patient directly through Distributor’s retail pharmacy program. If the prospective patient accepts Distributor’s offer to serve, the prospective patient becomes a Patient (as that term is defined below)). If the prospective patient does not accept Distributor’s offer to serve, such prospective patient shall be transferred to the administrator of CTI’s Call Center and Reimbursement Support Services program in accordance with the procedure set forth below in Section 3.1.3(b).

(ii)

In accordance with a physician’s prescription, Distributor shall dispense and deliver the Product and Delivery Device to patients located in the Territory who are referred to Distributor by their treating physician or provider (hospital, outpatient clinic, infusion center, etc.) or by a managed care entity (“ Patients ”).

(iii)

Distributor shall deliver the Product and Delivery Device via Fed Ex, UPS or other common carrier at its option,standard overnight delivery service (or another mutually agreed to delivery service) to Patients at their home, or to any other location at which the Patient will receive inhalation therapy, such as a hospital, clinic or infusion center, all as designated by such Patient. Distributor shall track each shipment of Product and Delivery Device to Patients and confirm receipt. Distributor shall use its best efforts to dispense Product such that Product having the earliest expiration date is shipped first from available inventory.

(iv)

Distributor shall be responsible for all billing and collection in connection with its sales of Product and the Delivery Device to Patients. Distributor shall obtain a Patient’s authorization for Distributor to directly bill the Patient’s insurance company, government payor or other third party payor and to have such

benefit payments made directly to Distributor. Distributor shall use reasonable efforts to obtain reimbursement clearance, if necessary, for anticipated subsequent orders from a Patient prior to actual receipt of the subsequent order.

(v)

Distributor shall ensure that a licensed pharmacist or nurse, to the extent permitted by law, who is properly trained to answer Product-related questions or requests for emergency supplies of Product, is available by telephone, on a designated toll-free number, (i) from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday, except Distributor holidays (which shall include New Year’s Day, Memorial Day, Independence Day (July 4), Labor Day, Thanksgiving Day, and Christmas Day), for routine calls, and (ii) twenty-four hours (24) per day for emergency calls. Distributor will not handle requests for clinical information outside of the scope of Distributor’s usual pharmacist or nurse counseling, which will be limited to information covered in the package insert. Request for medical information outside of the scope of Distributor’s usual pharmacist or nurse counseling will be transferred to CTI in accordance with standard operating procedures developed by CTI.

(vi)

Distributor shall be solely responsible for all costs associated with distribution and delivery of Products and Delivery Devices to the Patients.

(b)

Out-of-Network Provider .

(i)

If Distributor is not in-network due to either a closed network, lack of network affiliation, or requirements for an in-state provider, and the prospective patient wants to select Distributor, Distributor will explain the requirements for the restrictive distribution system for the Product to the prospective patient’s payor.

(ii)

If that payor refuses to allow Distributor to provide the Product, or if an in-state provider is required by the payor in a state where Distributor does not have a facility, then Distributor shall, within seventy-two (72) hours of receipt of an inquiry from a such a potential patient, refer such potential patient to the administrator of CTI’s Call Center and Reimbursement and Support Services program, as such administrator is identified on Schedule B , as such administrator may be changed from time to time. In the event that Distributor has to refer a potential patient to the administrator of CTI’s Call Center and Reimbursement Support Services program, Distributor shall, within forty-eight (48) hours after referring such patient, advise the health care professional or other individual who

initiated the prescription, that the patient was referred to the administrator.

3.1.4

Retail Pharmacy Services . Distributor’s retail pharmacy services shall include the following:

(a)

Distribution services to Patients:

(i)

Obtaining the prescription.

(ii)

Filling the prescription and labeling medications in compliance with state and federal pharmacy laws and payor requirements.

(iii)

Shipping Product and the Delivery Devices to the administration site, and following up via the Fed Ex, UPS or other common carrier tracking system to confirm receipt.

(iv)

Providing health care professionals with information about procedures for Product administration and Delivery Device operation.

(v)

Providing information about the Product and Delivery Device for the Patients in compliance with federal and state regulatory requirements.

(vi)

Computerized next shipment scheduling capability for follow up doses and Product device maintenance parts per the schedule recommended by the manufacturer.

(vii)

Benefit investigation with primary and secondary insurance, including the collection of medical data for clearance and determination of coverage such as co-pay, co-insurance and allowable.

(viii)

Price negotiation with payor on individual patient basis and as in network provider.

(ix)

Pre-certification and pre-authorization of Patients.

(x)

Recertification and re-authorization of Patients.

(xi)

Billing assistance by contacting physicians in order to complete Distributor’s documentation and Letters of Medical Necessity on behalf of Patients.

(xii)

Financial counseling to Patients specific to reimbursement by third party payors and patient’s financial responsibility.

(xiii)

Distribution – dispensing; clinical counseling and inventory management.

(xiv)

Clinical resource – Patient education and training related to administration of Product in the home; operation of the Delivery Device.

(xv)

Claims reviews/tracking.

(xvi)

Appeals management.

(xvii)

Medical review documentation and process.

(xviii)

Management of preventative maintenance of designated Product delivery device.

(b)

Reimbursement support to Patients shall include:

(i)

Contracting with various third party payor groups (HMO, PPO, PBM, PPM, indemnity) to obtain in-network provider status.

(ii)

Monitoring Patients with closed networks or for whom Distributor is out-of-network and follow-up to attempt to become an in-network provider with these payors.

(iii)

Collaborate with CTI to achieve formulary status for Product and to gain network provider status to Distributor.

(iv)

Assisting Patients with at least two rounds of appeals to such Patients’ payors in the event that the payor denies a claim for reimbursement of the Product and/or the Delivery Device.

(v)

Initiating the collection of data required for Medicare and other government health benefit program documentation as determined to be necessary by CMS or another government agency.

(vi)

Payor policy research/information.

(vii)

Providing reasonable support to CTI’s efforts to add the Product to Medicaid formularies.

(viii)

Providing financial education for uninsured or underinsured related to alternatives for reimbursement.

(ix)

Investigating state (Medicaid) and federal (Medicare) programs for uninsured and underinsured.

(x)

Providing resources to patients for patient initiated patient assistance programs such as A.C.C.E.S.S. and CTI sponsored programs.

3.1.5

Coverage Support . Distributor shall use reasonable efforts to attempt to obtain coverage for all requests for the Product and the Delivery Device. Distributor shall also use reasonable efforts to attempt to obtain favorable reimbursement allowable amounts from payors for the Product and the Delivery Device.

3.1.6

Billing and Collection . Distributor shall be responsible for all billing and collection in connection with its sales of Product to Patients.

3.2

Data and Reports .

3.2.1

CTI has a need for data regarding the use of the Product. To obtain such data, Distributor shall maintain, in a database (the “ Database ”), information for each Patient and each order as set out on Schedule C . Schedule C may be amended only by mutual consent of the Parties. The redacted information contained in the Database is the property of CTI and Distributor jointly and severally, and is subject to the confidentiality provisions set forth in Article 5. Upon the termination or expiration of this Agreement, Distributor shall provide CTI with a copy of the Database (as well as all of the information contained therein), in a format to be mutually agreed upon by the Parties.

3.2.2

As permitted by law, Distributor shall generate from the Database and furnish to CTI the reports set out on Schedule C at a mutually agreed upon frequency. The reports shall identify Patients only by number and not by name, and will otherwise be privacy compliant (with the Health Insurance Portability and Accountability Act of 1996, and the regulations promulgated thereunder) via an encrypted data line maintained at CTI’s cost. The Parties shall agree, as soon as reasonably possible after execution of this Agreement, on the format of the reports, which shall include all of the data elements listed on Schedule C .

3.2.3

As information on use of the Product by Patients is not readily available from other commercial sources, Distributor has agreed to maintain the Database and generate the accompanying data reports as a service to CTI. The Parties acknowledge that the services performed by Distributor pursuant to this Section 3.2 are not regularly performed by a retail pharmacy; therefore, CTI agrees to compensate Distributor for such services, which compensation, as more fully set forth in Schedule D , has been determined to be fair market value.

3.3

Persistence and Compliance . Distributor shall develop a persistence and compliance program for Patients that includes (i) patient monitoring, education and management to assure compliance to the Product’s package insert, and (ii) managing programs resulting in premature discontinuation of the Product. The persistence and compliance program will be co-developed and co-owned by CTI and Distributor and may include compliance risk assessment and additional follow up visits by clinical staff as mutually agreed by CTI

and Distributor. Fees for establishing and operating a persistence and compliance program are set out in Schedule D .

3.4

Fees .

3.4.1

CTI will pay Distributor a one-time start-up fee as stated in Schedule D within two weeks of signing this Agreement in order to cover start-up IT costs, training, travel, and program establishment; provided, however, that Distributor has provided to CTI the substantiation and documentation regarding these services as required pursuant to Section 3.4.2.

3.4.2

For the services provided by Distributor to CTI pursuant to Sections 3.2 (Data and Reports) and 3.3 (Persistence and Compliance), CTI will pay Distributor fees in the amount set out on Schedule D . The Parties acknowledge and agree that the compensation set forth in Schedule D represents the fair market value of the services being provided by Distributor to CTI, has been negotiated in an arm’s-length transaction and has not been determined in a manner which takes into account the volume or value of referrals or business, if any, that may otherwise be generated between the Parties. Distributor shall provide to CTI, in a manner agreed upon by the Parties, suitable substantiation and documentation regarding the nature, scope and valuation of the services provided.

3.4.3

Distributor shall bill CTI monthly for all fees calculated in accordance with Schedule D . All billed amounts are due within thirty (30) days of the date of invoice.

3.4.4

Except for the fees otherwise expressly set forth in Schedule D , Distributor shall be responsible for all costs and expenses associated with fulfilling Distributor’s obligations under this Agreement.

3.4.5

The Parties agree to meet every twelve (12) months and to review the fees paid by CTI for the services set out