EXCLUSIVE SUPPLY AND DISTRIBUTION AGREEMENT BY AND AMONG 3M COMPANY, THROUGH ITS 3M DRUG DELIVERY SYSTEMS DIVISION, 3M INNOVATIVE PROPERTIES COMPANY AND SEPRACOR INC.

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Exhibit 10.46

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote such omissions.

EXCLUSIVE SUPPLY AND DISTRIBUTION AGREEMENT

BY AND AMONG

3M COMPANY,
THROUGH ITS 3M DRUG DELIVERY SYSTEMS DIVISION, 3M INNOVATIVE
PROPERTIES COMPANY
AND SEPRACOR INC.

TABLE OF CONTENTS

EXCLUSIVE
SUPPLY AND DISTRIBUTION AGREEMENT
LEVALBUTEROL TARTRATE AEROSOL PRODUCT

        THIS AGREEMENT, effective as of November 16, 2004, ("Effective Date") is by and between 3M COMPANY, a Delaware corporation, through its 3M Drug Delivery Systems Division, and 3M Innovative Properties Company, both having offices at 3M Center, St. Paul, Minnesota 55144, (hereinafter "3M" and "3M IPC", respectively), and SEPRACOR Inc., a Delaware corporation, having its principal office at 84 Waterford Drive, Marlborough, MA 01752 (hereinafter called "SEPRACOR") (together "the Parties").

WITNESSETH:

         WHEREAS , 3M has, pursuant to a License and Scale-up Agreement with SEPRACOR dated December 20, 2001 (the "Scale-up Agreement"), developed, in conjunction with SEPRACOR, a press-and-breathe inhaler containing a pressurized aerosol canister with a metered dose valve filled with a formulation of the compound levalbuterol tartrate;

         WHEREAS , SEPRACOR contributed to the scale-up of the inhaler by providing a product, including but not limited to a proprietary formulation;

         WHEREAS , 3M collaborated in the refinement of the manufacturing process for the formulation;

         WHEREAS , by making available to SEPRACOR technology and know-how relating to metered dose inhalers, 3M will enable SEPRACOR to introduce to the pharmaceutical marketplace an aerosol product for inhalation whereby both Parties will maximize the value of the technology;

         WHEREAS , the Scale-up Agreement set forth 3M's right to manufacture and supply SEPRACOR's commercial requirements of press-and-breathe inhalers containing a pressurized aerosol canister with a metered dose valve filled with a formulation of the compound levalbuterol tartrate to SEPRACOR and anticipated that more definitive supply terms would be negotiated and set forth in an exclusive Supply and Distribution Agreement (hereinafter "the Agreement");

         WHEREAS , pursuant to the rights granted 3M in the Scale-Up Agreement, 3M has elected to be the exclusive manufacturer and supplier of all of SEPRACOR's commercial requirements of the Product in the Territory.

        NOW, THEREFORE, in consideration of the foregoing premises which are made a part of this Agreement and mutual promises set forth in this Agreement, the Parties agree as follows.

ARTICLE I. DEFINITIONS

        1.1   The terms defined in Article I. shall have the following meanings (applicable both to the singular and the plural forms):

        "Active Ingredient" shall mean micronized levalbuterol hemitartrate.

        "Affiliate" shall mean any individual who or Entity (as defined below) that, in whatever country organized or resident, directly or indirectly through one or more intermediaries, is controlled by, or is under common control with, or controls, a Party, or any Entity in which any Party or any individual or Entity recited in the preceding Section (1) directly or indirectly through one or more intermediaries collectively has at least a forty percent (40%) ownership or voting rights interest (whether through stock ownership, stock power, voting proxy), or otherwise or has the maximum ownership interest it is permitted to have in the Entity in the country where such Entity exists.

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        "Batch" shall mean a specific quantity of the Product that is intended to have uniform character and quality, within the Specifications, and is produced according to a single manufacturing order during the same manufacturing cycle.

        "Calendar Year" shall mean the twelve-month period beginning January 1 of each year and ending on December 31 of each year. The first Calendar Year shall begin the January 1 following commercial launch.

        "Compound" shall mean the compound known as levalbuterol, including any salt, ester, solvate, clathrate, or polymorph thereof.

        "Entity" shall mean any corporation, firm, partnership, proprietorship or other form of business organization.

        "Food and Drug Administration" or "FDA" shall mean the United States Food and Drug Administration and any successor entity thereto.

        "Full Factory Cost" shall mean 3M's costs for overhead, labor, raw material, and/or component costs directly allocable to the manufacture, labeling and/or packaging of Product and the cost of services supplied to 3M by third parties which are directly allocable to the manufacture, labeling and/or packaging of Product, excluding 3M's gross margin and idle capacity. 3M's Full Factory Costs shall be determined and allocated to the Product in accordance with all applicable generally acceptable cost accounting standards.

        "Lot" shall mean a Batch, or a specified portion of a Batch, of the Product having uniform character and quality within Specifications. If the Product is produced by 3M using a continuous process, "Lot" shall mean the specified identified amount of the Product produced in a unit of time or quantity in a manner that assures its having uniform character and quality within the Specifications.

        "Manufacturing Forecast" shall mean SEPRACOR's estimated worldwide demand for the Product for the [**] months following the date of the forecast. The first such Manufacturing Forecast shall be provided on or about December 31, 2004 and each December 31 thereafter.

        "Marketing Authorization Application" shall mean the New Drug Application (hereinafter "NDA") submitted to, filed with, or approved by the FDA or such other regulatory agency filing in other countries which allows Product to be lawfully sold in the United States or any other country in the Territory.

        "Net Sales Price" shall mean the gross invoiced price received by SEPRACOR, its Affiliates, or Partners for Product from wholesalers, distributors, staff model HMO's, managed healthcare organizations, or similar entities at the same level of distribution pursuant to arms length transactions involving cash or cash equivalents as the sole consideration, which shall not include transfers within or between SEPRACOR, its Affiliates or Partners, less normal and customary trade credits, discounts, transportation, freight and insurance charges, sales taxes and other taxes (except income tax), rebates and chargebacks, credit for rejections or returns of Product, other allowances or discounts actually given with respect to such sales for billing errors, prompt payment discounts, rebates or similar payments relating to price granted or given to wholesalers, other distributors, buying groups, health care insurance carriers, pharmacy benefit managers, retail pharmacies or other entities or institutions; rebates or charges required to be paid in connection with sales of Product to any governmental or regulatory authority including, without limitation, rebates paid by SEPRACOR in accordance with the Prescription Drug Rebate and Improved Access to Medicines requirements of the Omnibus Budget Reconciliation Act of 1990 and comparable federal or state requirements now or hereafter in effect, all as recorded by SEPRACOR in accordance with U.S. generally accepted accounting principles and in a manner consistent with SEPRACOR's revenue recognition policies from the sale of pharmaceutical products generally (cumulatively and individually, "Deductions"), including Deductions paid, credited,

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given, or otherwise attributable to SEPRACOR's customers that are purchasers in the chain of commerce who enter into agreements with SEPRACOR as to price, even though legal title to Product does not pass directly from SEPRACOR to such customer and even though payment for Product is not made by such customer directly to SEPRACOR. Product sold in transactions involving consideration other than or in addition to cash shall be deemed to have been sold at the average price charged by SEPRACOR in an arm's length cash transaction to the applicable class of trade in the relevant annual period (or, if all transactions in the applicable class of trade involve consideration other than or in addition to cash, the average price charged by SEPRACOR in an arm's length cash transaction in the relevant annual period irrespective of class of trade). Sample Product provided free of charge to physicians in the course of promoting Product, shall not be considered in determining Net Sales Price. In the event SEPRACOR invoices multiple products, including Product, on the same invoice then, except as provided for below, only those charges, duties and taxes detailed on the invoice and directly related to the sale of Product shall be deducted from the gross invoiced price received on sales of Product. Charges reflected on any such multiple product invoices that are not directly related to the sale of any of the products on the invoice shall be apportioned among the products, including Product, based on the relative gross amount of sales of the products as detailed on the invoice.

        "Partner" shall mean a third party engaged by SEPRACOR as permitted by Section 2.2 to market, sell, or distribute Product.

        "Product" shall mean a press-and-breathe inhaler containing a pressurized aerosol canister with a metered dose valve as developed under the Scale-up Agreement containing Active Ingredient, oleic acid, ethanol, and 1,1,1,2-tetrafluoroethane as set forth in the Specifications and prepared in accordance with the Specifications.

        "Regulatory Filings" shall mean Marketing Authorization Applications and all other filings relating to Product made with the drug regulatory authorities. "Regulatory Filings" does not include the manufacturing order for Product, data provided by 3M pursuant to paragraph 6.3 of the Scale Up Agreement, manufacturing establishment registrations or associated fees, or any drug master file owned or controlled by 3M.

        "Rolling Estimates" shall mean SEPRACOR's quarterly rolling forecasts of its estimated requirements for the Product for the succeeding [**] months following the quarter during which the Rolling Estimate is delivered by SEPRACOR to 3M.

        "X80 Product" shall mean Product labeled as having 80 actuations nominal per canister, or such other number of actuations as may be approved by FDA in connection with distribution as samples.

        "SEPRACOR Confidential Information" means confidential information disclosed by SEPRACOR to 3M in the course of and pursuant to this Agreement relating to Compound, Active Ingredient, formulation, Product, aerosol inhalation, or aerosol compositions, including, but not limited to: the specifications and chemistry of formulations of the Compound developed by SEPRACOR or its Affiliates; metered dose inhaler devices and their specifications for delivery of Compound; SEPRACOR's clinical and non-clinical development plans; SEPRACOR's clinical data; and forecasts of requirements of Product.

        "SEPRACOR Components" shall mean those components and ingredients, including and limited to Active Ingredient, canisters, actuators, and valves, all which SEPRACOR or its vendors supply to 3M to use in the manufacture of Product, and that each meet the Specifications (as defined below).

        "Specification(s)" shall mean those specifications for Product and SEPRACOR Components as established in writing by SEPRACOR, and subject to approval by 3M, which approval will not unreasonably be withheld or delayed, and as may be amended from time to time in writing by SEPRACOR, subject to approval by 3M, which approval will not unreasonably be withheld or delayed. Initial Specifications, once approved by both parties, will be set forth in Schedule 1. For purposes of

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this paragraph, it shall never be reasonable for 3M to withhold or delay approval of Specifications or changes to Specifications that have been mandated by the FDA and agreed to by SEPRACOR, provided, however, that 3M is otherwise capable of meeting the Specifications and acknowledging that 3M's satisfaction of this obligation may result in the application of paragraph 5.5 below.

        "Term" shall mean the period described in paragraph 4.1.

        "Territory" shall mean the United States and its territories and possessions, including Puerto Rico and any countries added in accordance with the written agreement of the Parties.

        "Test Methods" shall mean those test methods current as of the date this Agreement is executed, and as additionally agreed upon in writing by SEPRACOR and 3M, and as those methods are described in the approved NDA or similar FDA document. All Test Methods and any changes thereto agreed to by the Parties from time to time shall be approved by both Parties and reduced to writing, signed and dated. For purposes of this paragraph, it shall never be reasonable for 3M to withhold or delay approval of Test Methods or changes to Test Methods that have been mandated by the FDA and agreed to by SEPRACOR, provided, however, that 3M is otherwise capable of complying with the Test Methods and acknowledging that 3M's compliance with this obligation may result in the application of paragraph 5.5 below.

        "X200 Product" shall mean Product labeled as having 200 actuations nominal per canister, or such other number of actuations as may be approved by FDA in connection with sale to the trade.

        "3M Confidential Information" means confidential information disclosed by 3M to SEPRACOR in the course of and pursuant to this Agreement relating to aerosol inhalation, or aerosol compositions, including, but not limited to: the specifications and chemistry of aerosol formulations of Compound developed by 3M or its Affiliates; metered dose inhaler devices and their specifications; the methods and techniques used by 3M to manufacture aerosol inhalers and metered dose devices; and confidential information directly or indirectly provided by 3M to assist SEPRACOR to obtain a license or approval permitting the sale of Product, including clinical results for metered dose devices.

        "3M Know-How" means 3M Confidential Information and any other information or data of 3M or 3M IPC useful in developing, optimizing, manufacturing, or gaining regulatory approval of Product, including any toxicological data, provided by 3M.

        "3M Patent Rights" means all patents and patent applications that are owned or controlled by 3M or an Affiliate thereof and that cover manufacture, use, or sale of Product, including but not limited to certain of those patents claiming benefit of priority to, or having a substantially identical disclosure as, [**], U.S. application [**], U.S. application [**] [**], and all applicable continuations, continuations-in-part, divisionals, extensions, supplemental protection certificates, utility models, reissues, and reexaminations thereof.

        "3M Plant" means Northridge, California or any plant where Product is approved for sale in the Territory.

ARTICLE II. OVERVIEW OF EXCLUSIVE SUPPLY

        2.1     Exclusivity/Requirements     

        A.     Exclusivity of Manufacture and Supply in the Territory— 3M shall exclusively manufacture and supply to SEPRACOR, its Affiliates and Partners, and SEPRACOR, its Affiliates and Partners shall exclusively purchase from 3M, one hundred percent (100%) of their requirements for Product in the Territory during the Term. 3M shall not manufacture or supply other than to SEPRACOR, its Affiliates and Partners any Product or any other pressurized metered dose inhaler containing Compound, and SEPRACOR, its Affiliates and Partners shall not purchase any Product or any other pressurized

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metered dose inhaler containing Compound from any party other than 3M for sale in the Territory during the Term of this Agreement. Any SEPRACOR Affiliate or Partner shall be bound by the foregoing requirement during the term of any SEPRACOR Partner agreement.

        B.     License Grant— 3M IPC hereby grants SEPRACOR a royalty-bearing, non-exclusive license under the 3M Patent Rights (as defined in the Scale-Up Agreement) and 3M Know-How to use, sell, offer for sale, and import Product in the Territory manufactured by or for 3M under this Agreement. SEPRACOR shall have the right to submit for listing on the FDA "Orange Book" patents under 3M Patent Rights that cover Product, provided that 3M and 3M IPC shall have no obligation to enforce any such patents and may grant licenses under the 3M Patent Rights at 3M/3M IPC's sole discretion.

        C.     Additions to the Territory —Further, in the event that during the Term SEPRACOR itself or through a third party wishes to market Product outside the Territory, 3M shall have a right to elect to supply SEPRACOR's requirements of such Product and the Parties will negotiate in good faith the terms for supply of Product to such additional countries.

        2.2     SEPRACOR's Appointment of SEPRACOR Affiliates and Partners     

        A.     Terms and Conditions Regarding Appointment of SEPRACOR Affiliates and Partners —SEPRACOR shall have the right to appoint SEPRACOR Affiliates and Partners to distribute, market and/or sell Product in the Territory subject to the terms of paragraph 2.1 and this paragraph 2.2. The Parties agree that the rights and responsibilities conveyed to and imposed upon SEPRACOR in the Agreement are intended to be conveyed to and imposed upon SEPRACOR's Affiliates and Partners, and SEPRACOR shall take such action as may be necessary to ensure that its Affiliates and Partners abide by the terms of this Agreement.

        B.     Termination of Appointment of SEPRACOR Affiliates and Partners —The termination of this Agreement by either Party may, in 3M's sole discretion, result in a termination of that portion of any agreement with any or all SEPRACOR Affiliates and Partners that relates to the commercial supply of Product. SEPRACOR shall have the affirmative obligation to inform any potential SEPRACOR Affiliates and Partners, in writing with a copy to 3M, of the obligations and conditions contained in this paragraph 2.2B.

        C.     Disclosure of Confidential Information —3M shall provide such 3M Confidential Information to SEPRACOR, its Affiliates and Partners as is reasonably necessary for SEPRACOR to store, distribute, market and sell Product. SEPRACOR shall not disclose or use any 3M Confidential Information shared by 3M with SEPRACOR, except as 3M and SEPRACOR mutually agree in writing is necessary for SEPRACOR Affiliates and Partners to store, distribute, market and sell Product and only then subject to appropriate protection for such 3M Confidential Information.

        2.3    Pricing —SEPRACOR shall have sole authority over the pricing of Product to SEPRACOR's Affiliates and Partners or other customers.

ARTICLE III.     DILIGENCE OBLIGATIONS, REGULATORY RESPONSIBILITIES AND RECALLS

        3.1     Regulatory Diligence Obligations     

        SEPRACOR will employ commercially reasonable efforts to file and obtain approval of a Marketing Authorization Application for Product in the United States. Such efforts shall include efforts to proactively pursue approval as well as to respond with reasonable diligence to any requests for information or other assistance from the FDA which are necessary to obtain such approval. To the extent that any information requested by FDA concerning the manufacture of Product post-approval is in the possession of 3M and not SEPRACOR, 3M will respond with reasonable diligence to such requests and provide other assistance as may be needed on a timely basis (consistent with an annual Product review and NDA annual report as is established for the Product, it being understood by the

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Parties that the due dates for any such annual review and/or report are typically based on the FDA approval date for the Product) to assist SEPRACOR in maintaining an FDA-compliant NDA post-approval.

        3.2     Pre-Launch Supplies/Commercial Diligence Obligations —    

        A.     Pre-Launch —SEPRACOR may order Product prior to commercial launch for inventory build-up and/or validation purposes in accordance with the terms of this Agreement. The price for such Product shall be as set forth in paragraph 5.1. Any Product ordered by SEPRACOR prior to the commercial launch of the Product shall be governed by the terms and conditions of this Agreement and shall supercede and take precedence over the terms and conditions of the Scale-Up Agreement. 3M will ship and SEPRACOR shall be invoiced for Product shipped for inventory build-up and/or validation purposes once 3M completes and Sepracor approves the validation study reports which demonstrate conformance to the pre-established Product specifications and other validation acceptance criteria. SEPRACOR shall pay 3M within [**] days of receipt of 3M's invoice. SEPRACOR shall [**]

        B.     Commercial Launch —SEPRACOR will commence commercial sale of the Product in the U.S. within [**] after final approval of the Marketing Authorization Application, provided approval of the Marketing Authorization Application is with substantially the same claims as filed and subject to the timely manufacture and delivery to SEPRACOR of commercial quantities of Product by 3M. Nothing set forth herein shall restrict or prohibit SEPRACOR from selling or distributing Product purchased by SEPRACOR from 3M prior to the commercial launch of the Product pursuant to paragraph 3.2.A of this Agreement.

        C.     Launch and Post Launch —SEPRACOR shall exercise its sole discretion in the type and level of its sales and marketing effort and expenditures to be made in promoting Product, but shall in the launch and subsequent promotion of Product expend a commercially reasonable level of effort and resources comparable to that SEPRACOR would use to launch and promote a SEPRACOR developed product with similar commercial opportunity.

        3.3     Regulatory Responsibilities     

        A.     Maintaining Regulatory Approval —Once approval of the Marketing Authorization Application is obtained from a regulatory authority, SEPRACOR shall have responsibility to maintain such Marketing Authorization Application with the applicable regulatory authority. 3M shall provide assistance as needed and on a timely basis (no less than [**] days prior to completion of each annual Product report and/or NDA annual report filing due date) in support of SEPRACOR's annual Product review and NDA annual report obligations. SEPRACOR shall notify 3M in writing of the due date of each annual Product report and/or NDA annual report once that information becomes known to SEPRACOR. SEPRACOR shall be responsible for all labeling issues with regulatory authorities (such as the FDA) and for all dealings with regulatory authorities on advertising and marketing matters and all clinical studies, including but not limited to Phase IIIB and Phase IV studies. SEPRACOR shall file any and all reports required for Product by regulatory authorities in the Territory.

        B.     Ownership of Regulatory Filings —All Regulatory Filings, including but not limited to approved Marketing Authorization Applications and Investigational New Drug Applications relating to Product shall be owned by SEPRACOR and remain with SEPRACOR. Nothing in this Agreement should be construed as transferring ownership of Regulatory Filings at any time to 3M.

        C.     Adverse Drug Experience Reports —SEPRACOR shall be responsible for filing with the FDA any adverse drug reaction reports ("ADEs") for Product which it receives directly from third parties or from 3M. ADEs shall be categorized and submitted by SEPRACOR in accordance with 21 CFR Part 314 and applicable FDA guidance documents. If 3M receives an adverse drug reaction report that is serious (as defined in 21 CFR 314(a)), it shall be supplied to SEPRACOR within [**] days after

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receipt by 3M. If 3M receives such a report that is non-serious, it shall be supplied to SEPRACOR within [**] (15) days after receipt by 3M.

        3.4.   Product Recall —In the event that an event, incident or circumstance has occurred which may result in the need for a "recall" or "market withdrawal" of Product or any Lot(s) thereof, as such terms are defined in the United States Code of Federal Regulations 21 CFR 7.3 ("Recall"), such Party shall advise and consult with the other Party regarding such event as set forth below.

i)

Procedure —SEPRACOR shall be the Party primarily responsible for administrating any Recall. If SEPRACOR believes 3M is responsible for the Recall of Product, SEPRACOR shall promptly notify 3M in writing to that effect and consult with 3M regarding the strategy for any Recall. Following notification, the Parties' representatives from business, medical, regulatory, quality assurance and legal functions (and any others deemed necessary by a Party) (the "Recall Team") shall discuss whether or not to conduct a Recall and, if so, the breadth, extent and level of customer to which the Recall shall reach, what strategies and notifications should be used, the responsibility for the Recall Expenses, etc. SEPRACOR shall have the final authority to decide whether a Recall of such Product shall be made and to what extent and level it shall be conducted. For all Recalls other than those falling within paragraph 3.4 ii) SEPRACOR shall be responsible for the Recall Expenses. Any disagreement on the amount of and responsibility for Recall Expenses which cannot be resolved by the Parties shall be resolved pursuant to paragraph 14.1. In the event SEPRACOR conducts a recall not mandated by Health Authorities and without 3M approval, 3M will not be responsible for any costs or expenses incurred by SEPRACOR, except if it is determined under paragraph 14.1 that such recall by SEPRACOR was justified.

ii)

Recall Caused by 3M— To the extent that a recall of Product has been determined necessary pursuant to Paragraph 3.4 i) above, is otherwise consistent with the requirements of the relevant regulatory authorities, and is due to 3M's breach of 3M's representations and/or warranties contained in Paragraphs 10.1 and 10.4, 3M shall bear all the out-of-pocket costs and expenses of such Recall, including and limited to, expenses and other costs or obligations to third parties (but not including payments for lost profits or economic loss), the cost and expense of notifying customers and the costs and expenses associated with shipment of such Recalled Product and the cost and expense of replacing and destroying such Product which is removed from the market, if necessary (the "Recall Expenses").

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ARTICLE IV. TERM AND TERMINATION

        4.1    Term of Agreement —The initial term of this Agreement shall commence upon the Effective Date and continue for a period of seven (7) years following the date of FDA marketing approval for the Product (as evidenced by the date of the correspondence from the FDA to SEPRACOR announcing the FDA's approval of the Product); provided that either Party may terminate this Agreement as expressly provided herein ("Term"). The Parties may agree in writing no later than twenty-four (24) months prior to expiration of the Term to extend the term of this Agreement for an additional three (3) years or such other period of time as is agreed to in writing by the Parties.

        In the event that SEPRACOR notifies 3M in writing of its desire to extend the Term of this Agreement in accordance with this paragraph 4.1 and 3M refuses to agree in writing to any such Term extension, then at the sole discretion of SEPRACOR and upon written notice from SEPRACOR to 3M, SEPRACOR and 3M shall comply with section 4.3(B)(ii).

        4.2    Material Default —Upon default by a Party in the performance of any material obligation in this Agreement, the non-defaulting Party may give notice in writing to the Party in default and the defaulting Party shall have [**] days thereafter to cure the default. If the defaulting Party does not cure or institute measures to substantially cure such default within [**] days and diligently complete the cure within an additional [**] days, the non-defaulting Party may terminate this Agreement by providing notice of intent to terminate which shall take effect [**] days following the receipt by the defaulting Party of such notice. In the event SEPRACOR terminates this Agreement pursuant to this paragraph 4.2, then at the sole discretion of SEPRACOR and upon written notice from SEPRACOR to 3M, 3M and SEPRACOR shall comply with section 4.3(B)(ii). Termination under this Article shall not relieve either Party of any obligation existing upon the date of termination or relieve the defaulting Party from liability for breach of this Agreement.

        4.3     Determination of Second Manufacturing Site     

        A.    SEPRACOR may request in writing that 3M establish a second manufacturing site for the Product. 3M has the sole option to decide whether to establish a second manufacturing site for Product in response to the SEPRACOR request. In addition, 3M may, in its sole discretion, establish a second manufacturing site for the Product. In either circumstance, 3M shall pay for and own all required capital equipment and shall pay all costs associated with equipment validation, qualification and commissioning. All costs associated with any Regulatory Filings required to establish the second manufacturing site for the Product, including costs associated with purchasing and testing Product produced at the second manufacturing site, shall be paid by SEPRACOR. SEPRACOR shall be responsible for resubmission of the NDA for the second manufacturing site. In the event a second site is established, the Parties will in good faith negotiate new Minimum Purchase Requirements for the remainder of the Term.

        B.     Exclusive Remedy for Failure to Supply—     

          (i)  Except in the event SEPRACOR fails to comply with its obligations as set forth in paragraphs 6.2 or 6.3, in the event 3M, for any reason, including events of excused performance under paragraph 15.1, has given notice that it will be unable to supply any one of SEPRACOR's confirmed Rolling Estimates for Product that satisfies the warranties contained in Article X, 3M shall promptly notify SEPRACOR and the Parties will determine the period of such inability to supply. If the Parties agree the inability to supply will continue for more than [**] days, SEPRACOR may notify 3M in writing requesting adequate assurances of future performance that 3M will: (i) within [**] days following the notice, be able to supply SEPRACOR with at least [**] percent ([**]%) of SEPRACOR'S binding purchase orders; and (ii) within [**] days following the notice, be back to full production and be able to supply SEPRACOR with [**]% of its binding purchase orders. 3M shall within [**] days respond in writing to SEPRACOR's request for adequate assurances of future performance. If 3M

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cannot provide SEPRACOR with such adequate assurances of future performance or fails to live up to its assurances, then SEPRACOR may seek a secondary supplier, subject to paragraph 4.3B. (ii) below.

         (ii)  3M and SEPRACOR shall cooperate diligently in the transfer of 3M Know-How that is reasonably necessary to permit a third party manufacturer selected by SEPRACOR and subject to approval by 3M, which approval shall not be unreasonably withheld, to manufacture Product. 3M shall use commercially reasonable efforts to continue to supply SEPRACOR's requirements of Product under the terms of this Agreement for a period of up to 24 months after commencement of transfer of 3M Know-How. 3M IPC shall grant SEPRACOR such non exclusive licenses under 3M Patents and 3M Know-How to make, have made for it, use and sell Product for sale in the Territory at a royalty of [**]% of the Net Sales Price on all sales of Product made by such third party manufacturer; provided, however, that (a) the Net Sales of Product supplied by the third party manufacturer shall be [**] the Product from the third party manufacturer [**] for the Product to the third party manufacturer, and (b) such royalty shall be [**] when and in such countries where there are no issued or granted 3M Patent Rights, and (c) SEPRACOR shall indemnify 3M for any liability arising out of use, manufacture, sale, promotion or transfer of Product by SEPRACOR or any third party manufacturer that is manufacturing and supplying Product on behalf of SEPRACOR. The disclosure of 3M Know-How to SEPRACOR or its third party manufacturer shall be subject to undertakings that protect the 3M Know-How from disclosure to others or use by SEPRACOR or its third party manufacturer beyond the scope of the license, including but not limited to use with products other than the Product. 3M agrees to provide 3M employees for consultation in connection with the transfer of 3M Know-How to be provided thereunder for a reasonable period. 3M shall have the right to deny disclosure of 3M Confidential Information or 3M Know-How to a third party manufacturer for reasons relating to the lack of assurance that the undertakings relating to the protection and restricted use of 3M'Confidential Information and 3M Know-How will be complied with, provided that such denial would not be unreasonable in the reasonable judgment of a pharmaceutical manufacturer in the position of 3M.

        In the event it becomes necessary for SEPRACOR to transition manufacturing of the Product to a third party pursuant to this paragraph 4.3(B)(ii), then Sepracor shall exercise commercially reasonable efforts to reach agreement with any such third party manufacturer that reflects, should 3M get back to full production, that [**]% of SEPRACOR's demand for the Product will be transitioned back to 3M within [**] of 3M getting back to full production; provided, however, that SEPRACOR and 3M agree that it may be necessary and it will be considered by the Parties as commercially reasonable for SEPRACOR to agree with any third party manufacturer to a lower transition percentage or a longer time period prior to transition of Product manufacturing responsibilities back to 3M should such lower percentage and/or longer time period be needed by SEPRACOR to secure the necessary commitment from the third party manufacturer to assume manufacturing responsibilities for the Product.

        4.4    Termination with cause —Either 3M or SEPRACOR may elect to terminate this Agreement in its sole discretion, upon written notice to the other Party if there is an assertion by a third party of patent infringement involving Product that threatens to seriously damage either 3M's or SEPRACOR's corporate reputation and/or expose either 3M or SEPRACOR to large potential liability and/or fines. In addition, 3M may elect to terminate this Agreement in its sole discretion, upon written notice to SEPRACOR if the Product develops a clinical profile involving an unusually high number or frequency of serious adverse clinical events that threatens to seriously damage 3M's corporate reputation and/or expose 3M to large potential liability and/or fines.

        4.5     Termination by 3M Pursuant to Paragraphs 4.2 and 4.4     

        A.    In the event 3M terminates under paragraph 4.2, all licenses and rights granted to SEPRACOR under this Agreement or the Scale-Up Agreement shall immediately terminate.

        B.    In the event 3M provides written notice of termination of this Agreement pursuant to paragraph 4.4, 3M and SEPRACOR shall comply with section 4.3(B)(ii), and SEPRACOR shall agree

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to indemnify 3M for any liability arising out of SEPRACOR's or any third party working on behalf of SEPRACOR's use, manufacture, sale, promotion or transfer of Product. SEPRACOR shall reimburse 3M for any additional liability or fines which 3M might be exposed to from the date 3M provided written notice of termination of this Agreement to SEPRACOR until termination.

        4.6    Additional Obligations Upon Termination For any termination of this Agreement where manufacturing responsibilities for the Product will not be transferred from 3M to a third party, except for termination for a material breach by 3M of 3M's warranties under Article X., 3M may elect to fulfill all outstanding firm purchase orders previously accepted by 3M for Product i