Exhibit 10.48
Non-Confidential Exhibit A
MANUFACTURING AND SUPPLY AGREEMENT
     THIS MANUFACTURING AND SUPPLY AGREEMENT (this “Agreement”) is dated as of
December 6, 2007 and is between ANIP ACQUISITION COMPANY, d/b/a ANI
PHARMACEUTICALS, INC. (“ANI”), a Delaware corporation and JDS Pharmaceuticals,
LLC, a New York limited liability company, (“JDS”).
     The parties wish to set forth the terms and conditions under which ANI will
manufacture for and supply to JDS the Products described herein. Accordingly, in
consideration of the mutual promises and undertakings contained herein and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
When used in this Agreement, the following terms shall have the meanings set
forth below:
“Act” shall mean the Federal Food, Drug and Cosmetic Act, as amended, and the
regulations promulgated there under from time to time.
“Affiliate” shall mean any person or legal entity controlling, controlled by or
under common control with the person with respect to whom such status is at
issue and shall include, without limitation, any corporation 50% or more of the
voting power of which (or other comparable ownership interest for an entity
other than a corporation) is owned, directly or indirectly, by a party hereto or
any corporation, person or entity which owns 50% or more of such voting power of
a party hereto.
“Agreement” shall have the meaning given to that term in the introductory
paragraph hereof.
“ANI ’s Shipping Point” shall mean ANI’s facility in Baudette, Minnesota
“cGMP” means the current Good Manufacturing Practice regulations applicable to
the manufacture of the Products hereunder.
“Claims” shall have the meaning given to that term in Section 5.1 hereof.
“Confidential Information” shall have the meaning given to that term in
Section 7.1 hereof.
“Contract Quarter” shall mean (i) the period from the date of this Agreement
through and including September 30, 2007, and (ii) thereafter, each period of
three (3) successive calendar months during each Contract Year.
“Contract Year” shall mean (i) the period from the date of this Agreement
through and including December 31, 2007, and (ii) thereafter, January 1 through
December 31 of each succeeding calendar year, unless terminated before such
later date as provided herein.
“FDA” shall mean the United States Food and Drug Administration and any
successor agency.
“Firm Commitment” shall have the meaning of a no cancellation clause on forecast
product requirements in the Contract Quarter.
“Force Majeure Event” shall have the meaning given to that term in Section 9.1
hereof.
“Form” shall have the meaning given to that term in Section 2.3 hereof.
“Indemnitee” shall have the meaning given to that term in Section 5.3 hereof.

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“Indemnitor” shall have the meaning given to that term in Section 5.3 hereof.
“Labeling” shall mean all unit Products labels, package inserts, carton
imprints, tablet debossing/embossing and/or imprinting and all other markings on
packaging for, or other similar materials related to, the Products that are
defined as labels or labeling under any applicable law or regulation.
“Labeling Specifications” shall mean the labeling and packaging specifications
for the Products attached here to as Exhibit B and made a part hereof, as such
specifications may be amended from time to time by mutual agreement in writing
of the Parties.
“Latent Defects’ shall have the meaning given to that term in Section 2.7 (c)
“Law” means any applicable statute, law, ordinance, rule, regulation, order,
judgment, ruling or decree enacted, adopted, issued or promulgated by any
Regulatory Authority.
“Manufacturing Authorization” means any authorization necessary to manufacture
the Products as granted by the applicable Regulatory Authority.
“Manufacturing Standards” shall mean all U.S. Laws applicable to the manufacture
of the Products.
“Net Sales” shall have the meaning given to that term in Section 2.4(b)
(iii) hereof
“NDC” shall mean the national drug code assigned to each Product by the FDA.
“Nonconformance” shall have the meaning given to that term in Section 2.7(c)
hereof.
“PPI” shall have the meaning given to that term in Section 2.4(b) hereof.
“Products” shall mean the pharmaceutical dosage form consisting of: Lithium
Carbonate as an active ingredient in the presentations specified in Exhibit A
hereto and incorporated herein by reference, including, without limitation, bulk
form, whether to be ultimately sold by JDS under the LITHOBID® (Lithium
Carbonate, USP, Slow-Release Tablets) trademark or in generic form.
“Product Specifications” shall mean the specifications for the Products attached
hereto as Exhibit C, incorporated by reference herein, the Products
specifications and methods set forth as of the date hereof in the manufacturing
and control sections of the new drug application heretofore submitted to and
approved by the FDA for the Products (including any Labeling requirements
specified therein) and any amendments to such specifications that may be
mutually agreed upon by the parties in writing.
“Regulatory Authority” shall mean any U.S. governmental regulatory authority
involved in granting approvals for the manufacture, marketing, sale,
reimbursement and/or pricing of Products in the U.S., including, without
limitation, the FDA and any judicial or administrative decisions relating
thereto.
“Regulatory Change” shall have the meaning given to that term in Section 9.2
hereof.
“Regulatory Standards” shall mean all laws, rules, regulations and Regulatory
Authority advisory opinions or orders applicable to the manufacturing,
marketing, sale, reimbursement and/or pricing of any Products.
“Specifications” shall mean the Products Specifications and the Labeling
Specifications.
“Standard Cost” shall have the meaning given to that term in Section 2.4(b)
hereof.

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ARTICLE II
SUPPLY
2.1 Generally. Subject to the terms and conditions of this Agreement, ANI shall
supply to JDS and JDS shall purchase from ANI the Products in such quantities as
JDS may order hereunder from time to time for its worldwide requirements. Except
for such quantities of the Product as JDS may order in bulk in accordance with
the terms hereof, ANI shall supply the Product in finished, packaged form and
tested in accordance with the Specifications and Manufacturing Standards. ANI
will not implement any change in materials, components, processes or test
methods without consulting with and receiving the prior written approval of JDS.
ANI will utilize its change control processes in this regard. In addition, a
Quality Agreement will be developed for quality governance substantially in the
form attached hereto as Exhibit D.
2.2 Forecasts.
(a) Initial Forecast Within fifteen (15) business days of the signing of this
Agreement, JDS shall submit to ANI a written forecast of its requirements for
the Products for the first Contract Year, the first Contract Quarter of which
shall constitute a Firm Commitment of JDS.
(b) Subsequent Forecasts JDS shall submit to ANI by the first day of each
successive Contract Quarter a 12-month rolling forecast, by Contract Quarter, of
its requirements for the Products, the first quarter of which shall constitute a
Firm Commitment of JDS.
(c) ANI shall base its production planning on the forecasts provided to ANI by
JDS pursuant Sections 2.2(a) and 2.2(b), with the option to manufacture
successive batches to three (3) batches] of JDS’s forecast requirements for the
Contract Quarter. ANI shall have the right at any time, to order materials and
supplies to manufacture one hundred percent (100%) of those amounts of Product
ordered by JDS under Section 2.2(a) and 2.2(b). In addition, to the extent any
materials necessary to the manufacture of the Product require a longer lead
time, ANI shall be entitled to order such materials as it deems appropriate to
fulfill its obligations hereunder and consistent with normal production
practices in the pharmaceutical industry, and considering the term of this
Agreement. If any such materials or any work in process become unusable due to a
change in the Product Specifications or orders lower than forecasts, ANI shall
have the right to invoice JDS for the full cost of unusable materials or work in
process and JDS shall promptly pay such invoice. JDS shall have full rights and
title to such obsolete materials (and work in process). At JDS’s election, such
materials (and work in process) shall be (i) destroyed by ANI, at JDS’s expense
or (ii) transferred by ANI to JDS at JDS’s expense.
2.3 Purchase Orders. Within thirty (30) days of the signing of this Agreement,
JDS shall place its initial purchase order for the first quarter which is the
Firm Commitment period described in Section 2.2(a). JDS shall place orders for
Products only in whole number multiples of specified-size lots. JDS shall place
each subsequent order for Products by delivering to ANI a written purchase order
specifying the quantity and delivery date (which delivery date shall not be less
than ninety (90) days after the date such purchase order is delivered to ANI
unless otherwise agreed). Unless the parties otherwise agree, quantities
specified in purchase orders for each Product for the second and subsequent
Contract Quarters may not be less than 80% nor more than 120% of those set forth
for such quarter in the most recent forecast submitted to ANI hereunder;
provided, however, that ANI will use commercially reasonable

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efforts to fill any orders for quantities in excess of such maximum amount. ANI
shall acknowledge and accept each purchase order received from JDS which
complies with the forecast and order procedures set forth herein, within four
(4) business days after receipt.
2.4 Pricing and Payment.
(a) General Price. The purchase price of Products supplied to JDS hereunder
shall be *** plus any applicable sales or use taxes, duties and other similar
taxes, unless JDS provides ANI with a valid resale certificate or other proof of
exemption.
(b) Price Changes. ***
(c) Other Increases and/or Payments. ***
(d) Invoicing and Payment. ANI shall invoice JDS for each shipment of the
Product simultaneously with ANI’s actual shipment of Products and delivery to
JDS of a certificate of analysis relating to such shipment. Payment shall be due
within thirty (30) days from invoice date. Past due balances shall be subject to
a service charge of 12% per annum, but in no event shall such charge exceed the
maximum rate permitted by law. All payments shall be made in U.S. dollars.
(e) Books and Records. ANI shall maintain accurate books and records of Standard
Cost and other costs for which JDS is responsible pursuant to Section 2.4 which
shall, from the date hereof until twelve (12) months following the expiration
date of the last batch of Product manufactured hereunder, be made available for
inspection and audit by JDS at least once per year solely for the purpose of
verifying price increases pursuant to this Section 2.4 and other costs for which
JDS is responsible. JDS shall be responsible for the costs of any such
inspection and audit, provided that if it is determined that JDS has paid costs
which exceed the costs as to which JDS is responsible pursuant to Section 2.4 by
more than 5%, ANI shall be responsible for the reasonable costs of such audit,
as well as for refunding the amount of the JDS overpayment.
2.5 Delivery.
(a) Generally. All Products sold to JDS hereunder shall be delivered to JDS FOB
ANI’s Shipping Point. All risk of loss shall pass to JDS when ANI so delivers
Products to a carrier for JDS. JDS shall designate a carrier and mode of
shipment on each purchase order submitted to ANI provided, however, that should
JDS fail to designate a carrier on its purchase order, ANI shall use the common
carrier designated by JDS as its default carrier, or if JDS shall fail to
designate a default carrier, ANI may select a common carrier for the account and
risk of JDS.
(b) Deviation from Agreed Delivery Time. ANI shall use commercially reasonable
efforts to fill each purchase order submitted hereunder by the specified
shipment date. Originally agreed times for delivery to JDS’s carrier are not to
be deemed of the essence of an accepted order, and reasonable deviations from
originally agreed times will be accepted by JDS. Deviations of more than ***
shall be deemed unreasonable, unless JDS has on hand an inventory of Products
sufficient to meet JDS’s requirements (based on its forecasts delivered to ANI
under Section 2.2) for *** in which case deviations of more than *** will be
deemed unreasonable.
(c) Delay in Delivery. JDS recognizes the inherent difficulty in producing the
Product and also recognizes that delays in shipment, while non-routine, may
occur from time to time. ANI shall notify JDS promptly of any circumstance that
may cause a delay in making Products available for shipment FOB ANI’s Shipping
Point, stating the estimated period of delay and the reasons

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therefore. ANI shall use commercially reasonable efforts to avoid or minimize
the delay, including, when necessary or at JDS’s request, the expenditure of
premium time and shipping via air or other expedited routing. Any additional
cost caused by such requirements shall be borne by the party causing the delay
to the extent of any culpability. If no culpability can be assigned to either
party, such additional costs for premium time and air shipment requested by JDS
shall be borne solely by JDS. Nothing herein may be construed to prejudice any
of the express rights or remedies provided to either party in this Agreement. In
addition to any such rights JDS may have hereunder, JDS shall have the right to
cancel any order which is not made available for shipment FOB ANI’s Shipping
Point for more than *** after its agreed shipment date for causes other than
Force Majeure Events or Regulatory Changes so long as such delay has arisen
through no fault or negligence of JDS. Notwithstanding the foregoing, ANI shall
not be liable in any way (including, without limitation, for the additional
costs caused by the requirements set forth above in this section) for any delay
excused under Article IX hereof.
(d) Priority of Supply. If for any reason (including without limitation, a back
order situation, a Force Majeure Event or a Regulatory Change) ANI is unable to
supply JDS’s demand for Products and the demands of ANI’s other customers
(including ANI and ANI’s Affiliates), ANI shall give JDS’s demand at least equal
priority to those of ANI’s other customers (including ANI and ANI’s Affiliates).
2.6 Labeling and Packaging.
(a) Generally. JDS shall provide to ANI and shall bear the sole responsibility
for ensuring the accuracy of the information contained in all Labeling
Specifications and for compliance thereof with all Regulatory Standards. ANI
shall be responsible for procuring all Labeling, which shall be created in
accordance with the Labeling Specifications. With respect to all Products to be
supplied in finished, packaged form, ANI shall procure sufficient Labeling to
cover quantities of the Products as to which JDS’s forecasts under Section 2.2
hereof constitute a firm commitment. Acquisition of additional inventory of
Labeling components beyond the three (3) month commitment shall be made only
with advance consultation of JDS.
(b) Changes. Should JDS desire or be required to change any component of
Labeling or to introduce a new packaging component to which Labeling will be
affixed, JDS shall so inform ANI and shall be responsible for updating the
artwork or text, as applicable, and providing it to ANI in camera-ready or
electronic form and in compliance with the Labeling Specifications. ANI shall
make all necessary arrangements for such Labeling to be printed and shall
provide to JDS printer’s proofs of all Labeling for JDS’s review.Within fifteen
(15) business days of its receipt of such proofs, JDS shall either provide to
ANI any necessary corrections thereto or notify ANI of its approval of such
proofs. Upon JDS’s acceptance thereof, ANI shall return all artwork provided by
JDS. ANI shall be entitled to directly charge JDS, amounts to take account of
only those costs incurred in making changes to Labeling and/or packaging as
provided for in this Section 2.6(b). Allowable transition cost charges include,
without limitation, the costs of acquiring new Labeling in a timely manner to
meet JDS’s pending purchase orders and forecast demand and the acquisition and
disposal costs associated with obsolete inventory of Labeling, films, plates and
packaging. ANI will charge JDS direct, out-of-pocket expenses in a one-time
charge after completion of the Labeling transition.
2.7 Stability Testing and Inspection of Products.
(a) Stability Testing. ANI shall provide stability testing for Products
manufactured hereunder, and shall provide all stability results to JDS in a
timely fashion. ANI and JDS shall agree to a work outline to accomplish an
acceptable stability program. ANI shall retain a suitable quantity

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of retained samples until twelve (12) months after the stated expiration date
for the tested Product. ANI shall promptly notify JDS of any costs associated
with the agreed upon stability testing program for the Products beyond those
which ANI customarily and routinely incurs in connection with stability testing
and such additional costs shall be charged to and shall be the sole
responsibility of JDS (through an adjustment to the Standard Cost). ANI will
notify JDS of stability failures within 48 hours of ANI’s s becoming aware of
any such failure.
(b) Certificate of Analysis. ANI will provide JDS with a certificate of analysis
for all batches of Products shipped to JDS which shall include, without
limitation, the expiry date. Such certificate of analysis shall be delivered to
JDS at the time of shipment of the Products. Delivery of any Products by ANI to
JDS shall constitute a certification by ANI that at the time of delivery the
Products conforms to the certificate of analysis provided therewith and the
Product Specifications and was manufactured in accordance with the Manufacturing
Standards. JDS shall store all Products in conditions as specified in the
Product Specifications. All Products delivered to JDS shall have a remaining
expiry period of no more than three months less than the total initial labeled
expiry period. To avoid confusion, and as an example: for Product that has an
initial labeled expiry period of 24 months the Product delivered must have at
least 21 months remaining expiry period upon receipt by JDS.
(c) Nonconformance. Within thirty (30) days after its receipt of each shipment
of Products at the destination specified in the shipping instructions, JDS shall
inspect such shipment for material nonconformance with the applicable purchase
order, the applicable Specifications or the representations and warranties of
ANI set forth herein (“Nonconformance”). If, upon such inspection, JDS discovers
any Nonconformance, JDS may reject the nonconforming portion of such shipment by
giving prompt written notice to ANI Such notice shall include a copy of JDS’s
test results and specify the precise Nonconformance upon which such rejection is
based. Absent such notification, JDS shall be deemed to have accepted the
shipment, except as to latent defects that could not have been detected in such
30-day period (“Latent Defects”). In no event shall ANI be liable for any
Non-conformance arising out of the shipment, storage, use or handling of the
Products following its delivery FOB ANI’s Shipping Point.
(d) Procedure. Upon notifying ANI of any Nonconformance, or upon notifying ANI
of any Latent Defects, JDS shall afford ANI a reasonable opportunity to inspect
the shipment in question and make any appropriate adjustment or replacement. The
parties shall submit any dispute regarding the proper rejection of a shipment to
a mutually selected independent laboratory, the determination of which shall be
binding on the parties and the costs of which shall be borne by the party
against whom such determination is rendered. If such laboratory confirms a
Nonconformance or Latent Defect in the shipment in question (or any part of it)
at the time of delivery to the carrier, or if the parties agree that there is a
shortage or a Nonconformance or Latent Defect, then ANI shall use commercially
reasonable efforts to make up the shortage or replace any nonconforming
Products, as the case may be, with such new Products to be shipped at ANI’s
expense to the same destination as the original shipment. If ANI is unable to
make up the shortage or replace any nonconforming Products, it shall promptly
refund any money paid by JDS with respect to such undelivered or nonconforming
Products and reimburse JDS for the costs of shipping such Products. ANI may, at
its sole option, either direct JDS to return nonconforming Products to ANI or
have it destroyed by JDS, and certify such destruction to ANI, all at ANI’s
expense. ANI’s supply of substitute Products which conform to the applicable
Specifications or, as the case may be, payment of the refund and reimbursement
provided for herein, shall satisfy and discharge all claims or potential claims
which JDS may have against ANI with respect to undelivered or nonconforming
Products in that shipment, provided replacement Products is available to JDS
within thirty (30) days of the identified shortage.

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2.8 Inspection of Facility. JDS or its designees may, at its sole expense,
inspect the facilities being used by ANI to manufacture, package, store or ship
the Products to assure compliance with Manufacturing Standards. Each such
inspection shall be conducted upon reasonable advance notice, at mutually agreed
times during regular business hours and in a manner which minimizes disruption
of ANI’s business operations. JDS may conduct such inspections no more than
twice each Contract Year unless it has a good faith reason to believe such
facility is not materially in compliance with Manufacturing Standards.
2.9 Recalls. If any Regulatory Authority with applicable jurisdiction shall
order, or it shall otherwise become necessary to perform, any corrective action
or market action with respect to any Products manufactured by ANI (including,
without limitation, any recall, field correction, market withdrawal, stock
recovery, customer notice or restriction), JDS shall have the exclusive
responsibility to appropriately manage such action. If such corrective action or
market action is caused by the action of or necessitated by the breach by one of
the parties of any of its warranties, representations, obligations, covenants or
agreements contained herein, or in any Manufacturing Authorization, then such
party shall be liable, and shall reimburse the other party, for all reasonable
costs incurred by the non-breaching party in connection with such action
(including, without limitation, reasonable attorney’s fees and expenses). If
each of the parties is partly responsible for such corrective action or market
action, then each party shall be responsible for its proportionate share of such
costs. If neither party is responsible for such corrective action or market
action, then JDS shall be responsible for such costs. JDS shall also be
exclusively responsible for handling all customer complaints, inquiries and the
like, and ANI shall appropriately cooperate with JDS, including the completion
of an investigation and the preparation and submission of a complaint report to
JDS or its designees.
2.10 Process Improvements and Development Activities. ***
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of ANI. ANI represents and warrants to JDS as
follows:
Conformance of Products. Subject to JDS’s obligations with respect to supplies
of the Labeling Specifications under Section 2.6 hereof, each certification by
ANI pursuant to Section 2.7(b) shall be deemed a representation and warranty
hereunder, any breach of which representation and warranty being subject to the
provisions of Section 5.1, Section 2.7(c) and Section 2.7(d) and the limitations
contained in Section 3.3.
Adulteration; Misbranding. Subject to JDS’s obligations with respect to supplies
of the Labeling Specifications under Section 2.6 hereof, no Products supplied by
ANI to JDS under this Agreement shall, at the time of delivery to the carrier
FOB ANI’s Shipping Point, be adulterated or misbranded within the ANI of the Act
or be an article which may not be introduced into interstate commerce under the
provisions of Section 505 of the Act.
Organization; Standing. ANI is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has all
requisite power and authority to own, lease and operate its properties and to
carry on its business as now being conducted.
Authorization; Binding Effect. The execution and delivery by ANI of this
Agreement, the performance by ANI of its obligations hereunder and the
consummation by ANI of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of ANI This Agreement
has been duly executed and delivered by a duly authorized officer of ANI and
constitutes the valid and legally binding obligation of ANI enforceable against
ANI in accordance with its terms.

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No Conflict; Consents. The execution and delivery of this Agreement by ANI
(a) will not violate or result in the breach of, constitute a default under, or
accelerate the performance required by, any term of any covenant, agreement or
understanding to which ANI or any Affiliate is a party, or any Law to which ANI
or any Affiliate is subject and (b) requires no consents or agreements of any
third party (including governmental bodies) necessary for the performance by ANI
of its obligations under this Agreement, and ANI has, and at all times will
maintain, all necessary Manufacturing Authorizations.
Representations and Warranties of JDS. JDS represents and warrants to ANI as
follows:
(a) Organization; Standing. JDS is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
(b) Authorization; Binding Effect. The execution and delivery by JDS of this
Agreement, the performance by JDS of its obligations hereunder and the
consummation by JDS of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of JDS. This Agreement has been
duly executed and delivered by a duly authorized officer of JDS and constitutes
the valid and legally binding obligation of JDS enforceable against JDS in
accordance with its terms.
(c) NoConflict;Consents. The execution and delivery of this Agreement by JDS (a)
will not violate or result in the breach of, constitute a default under, or
accelerate the performance required by, any term of any covenant, agreement or
understanding to which JDS or any Affiliate is a party, or any Law to which JDS
or any Affiliate is subject and (b) requires no consents or agreements of any
third party (including governmental bodies) necessary for the performance by JDS
of its obligations under this Agreement.
3.2 Limitations.
     (a) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, HE PARTIES
AGREE THAT ANI MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS,
IMPLIED OR OTHERWISE, AND SPECIFICALLY DISCLAIMS AND SHALL NOT BE LIABLE TO JDS
OR OTHERS IN RESPECT OF:
(i) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
WITH RESPECT TO THE PRODUCTS, WHETHER USED ALONE OR IN COMBINATION WITH OTHER
SUBSTANCES OR MATERIALS;
(ii) ANY LIABILITY FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (OTHER THAN
TO THE EXTENT REASONABLY FORESEEABLE IN LIGHT OF THE OBJECTIVES OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT , BUT SUBJECT TO THE FURTHER
LIMITATIONS IN SECTION 3.3(C) BELOW), WHETHER ARISING OUT OF A BREACH OF THE
REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN OR OTHERWISE AND WHETHER IN
CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE; AND
(iii) ANY LIABILITY TO THE EXTENT ARISING AS A RESULT OF PRODUCTS: (I) HAVING
BEEN TAMPERED WITH OTHER THAN BY ANI OR ITS AGENTS, (II) HAVING BEEN SUBJECT TO
MISUSE, NEGLIGENCE OR ACCIDENT OTHER THAN BY ANI OR ITS AGENTS, (III) HAVING
BEEN STORED, HANDLED OR USED OTHER THAN BY ANI OR ITS AGENTS IN A MANNER
CONTRARY TO REGULATORY STANDARDS OR THE INSTRUCTIONS CONTAINED ON LABELING, OR
(IV) HAVING EXCEEDED ITS STATED EXPIRATION.

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     (b) THE MAXIMUM AGGREGATE LIABILITY OF EITHER PARTY UNDER THIS AGREEMENT
SHALL NOT IN ANY EVENT EXCEED ***.
     (c) NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, NONE OF THE
LIMITATIONS ON LIABILITY SET FORTH IN THIS SECTION SHALL APPLY TO ACTS OR
OMISSIONS OF ANI TAKEN OR OMITTED TO BE TAKEN WITH INTENT TO BREACH THE
REPRESENTATIONS, WARRANTIES OR OBLIGATIONS OF ANI UNDER THIS AGREEMENT.
ARTICLE IV
TERM AND TERMINATION
4.1 Term. This Agreement shall become effective as of the date hereof and shall
continue until five (5) years following the Effective Date (the “Initial Term”),
unless terminated earlier by mutual agreement of the parties or by one of the
parties in accordance with this Article 4.1; provided further that JDS shall
have the option, in its sole discretion, to extend the Initial Term of this
Agreement for three (3) successive terms of one (1) year each (each a “Renewal
Term” and collectively with the Initial Term, the “Term”) by providing ANI
written notice of such election not less than six (6) months prior to the
expiration of the Initial Term or then current Renewal Term.
4.2 Term. The term of this agreement shall commence on the date hereof and shall
continue for a period of five years, unless terminated earlier pursuant to
Section 4.2 or Section 4.3 hereof. This Agreement may be renewed for such
additional period and upon such other terms as the parties may mutually agree
4.3 Termination by Mutual Agreement. The parties may terminate this Agreement
any time by mutual written agreement
4.4 Termination upon Material Breach. Subject to the last two sentences of this
Section 4.3, either party may terminate this Agreement upon not less than sixty
(60) days written notice thereof to the other party of the material breach by
the other party of any of its representations, warranties, covenants or
agreements contained in this Agreement (provided, however, that the breaching
party may extend such notice period by up to thirty (30) additional days upon
its written certification that (i) such breach is not reasonably capable of
being cured within such 60-day period and (ii) it has commenced and is
diligently pursuing efforts to cure such breach). Upon the expiration of such
notice period, this Agreement shall terminate without the need for further
action by either party; provided, however, that if the breach upon which such
notice of termination is based shall have been fully cured to the reasonable
satisfaction of the non-breaching party within such notice period, then such
notice of termination shall be deemed rescinded, and this Agreement shall be
deemed reinstated and in full force and effect. Such right of termination shall
be in addition to such other rights and remedies as the terminating party may
have under any Law. The time periods for termination stated above in this
Section 4.3, shall be suspended during the period commencing upon a bona fide
dispute arising between the parties as to whether a material breach has occurred
and ending upon the date such dispute is finally determined. In the event such
final determination provides for the payment of money and such amount is paid in
full by the obligor within ten (10) days of such determination, no termination
right shall arise hereunder with respect to the matter in question.
4.5 Rights and Duties upon Termination.
(a)Supply and Purchase of Products. Unless otherwise mutually agreed by the
parties, ANI shall supply, and JDS shall purchase in accordance with the
provisions hereof, all quantities of Products ordered by JDS hereunder prior to
the date of expiration or termination; provided, however, that ANI shall not be
required to supply volumes of Products which exceed the amounts for which ANI is
responsible under the forecast and firm order procedures herein for the balance
of the Calendar Quarter in which the termination occurs. In addition, JDS shall
remain liable for and shall duly pay all costs incurred prior to the effective
date of expiration or termination which are

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properly chargeable to JDS pursuant to the terms of this Agreement. JDS shall
have the right to use and sell any such Products in the ordinary course
including Products which may contain reference to ANI
(b)Purchase of Additional Materials. Upon the expiration or termination of this
Agreement, JDS shall, if so requested by ANI, purchase (i) all dedicated raw and
packaging materials acquired by ANI hereunder to manufacture the Products, at
ANI’s actual cost thereof, (ii) all work-in-progress of the Products at ANI’s
actual cost thereof, and (iii) all inventory of finished Products then in ANI’s
possession at the then-current purchase price hereunder. In addition, JDS shall
pay ANI the actual out of pocket cost for any non-cancelable commitments made by
ANI for materials hereunder. Notwithstanding anything to the contrary in the
preceding two sentences, the foregoing purchase and payment obligations of JDS
shall be limited solely to materials obtained, Products manufactured and
non-cancelable commitments incurred by ANI for quantities of the Products as to
which JDS’s forecasts under Section 2.2 hereof constitute a firm commitment or
for which purchase orders have been received and which, in the case of Products,
comply with the Product Specifications and all Manufacturing Standards. All
materials purchased by JDS become the property of JDS and ANI will, at the
request of JDS, arrange to ship such materials to locations designated by JDS.
The cost of the freight shall be borne by JDS. The foregoing purchase and
payment obligations shall not apply in the event of a termination by JDS based
on a breach by ANI of its supply obligations.
ARTICLE V
INDEMNIFICATION
5.1 By ANI. Subject to the limitations described in Section 3.3, ANI shall
defend, indemnify and hold harmless JDS and its Affiliates, successors,
permitted assigns and their respective officers, directors, managers, members,
stockholders, partners and employees from and against any and all Claims arising
out of (a) any breach of any representation, warranty or covenant of ANI
hereunder, (b) any negligent storage or handling of the Products by ANI prior to
delivery to JDS FOB ANI’s Shipping Point, (c) any negligent act or omission of
ANI or its employees, agents or other contractors with respect to the Products,
(d) the failure of ANI to comply with any applicable Regulatory Standards with
respect to the manufacture or storage, or (e) all personal injury (including
death) and/or property damage resulting from the manufacture, handling, or
possession of the Products prior to ANI’s delivery of the Products to JDS FOB
ANI’s Shipping Point. For purposes of this Agreement, “Claims” shall mean any
and all liabilities and expenses whatsoever, including, without limitation,
claims, adversary proceedings (whether before a court, Regulatory Authority or
any other tribunal), damages (other than special, incidental, consequential or
punitive damages except to the extent awarded to a third party), judgments,
awards, penalties, settlements, investigations, costs, and attorneys’ fees and
disbursements
5.2 By JDS. Subject to the limitations set forth in Section 3.3., JDS shall
defend, indemnify and hold harmless ANI and its Affiliates, successors,
permitted assigns and their respective officers, directors, stockholders,
partners and employees from and against any and all Claims arising out of
(a) any breach of any representation, warranty or covenant of JDS hereunder,
(b) any negligent act or omission of JDS or its employees, agents or other
contractors with respect to the Products, (c) the failure of JDS to comply with
any applicable Regulatory Standards with respect to the importation, marketing,
distribution or sale of the Products, (d) any Labeling for the Products approved
by JDS, (e) the infringement of any patent, trademark or other intellectual
property rights by the sale or use of the Products, or (f) all personal injury
(including death) and/or property damage resulting from the handling,
possession, marketing, promotion or use of the Products following ANI’s delivery
of the Products to JDS FOB ANI’sShipping Point. Notwithstanding the preceding
sentence, JDS shall not be required to indemnify ANI with respect to any

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Claim arising from ANI’s breach of its representations, warranties or covenants
hereunder or ANI’s willful misconduct with respect to the Products.
5.3 Procedure. Any person or entity intending to claim indemnification hereunder
(an “Indemnitee”) shall notify the party hereunder from whom indemnification is
sought (the “Indemnitor”) in writing within a reasonable time of any third-party
Claim for which indemnification is sought hereunder. The failure to give timely
notice to the Indemnitor shall not release the Indemnitor from any liability to
the Indemnitee to the extent the Indemnitor is not prejudiced thereby. The
Indemnitor shall have the right, by notice to the Indemnitee within fifteen
(15) business days after the Indemnitor’s receipt of notice thereof, to assume
the defense of any such third-party Claim with counsel of the Indemnitor’s
choice and at Indemnitor’s sole expense. If the Indemnitor so assumes such
defense, the Indemnitee may participate therein through counsel of its choice,
but at its sole expense. The party not assuming the defense of the third-party
Claim shall render all reasonable assistance to the party assuming the defense,
and all reasonable out-of-pocket costs of such assistance shall be for the
account of the Indemnitor. No such third-party Claim shall be settled other than
by the party defending it, and then only with the consent of the other party
(which shall not be unreasonably withheld or delayed). The Indemnitee shall,
however, have no obligation to consent to any settlement which imposes on the
Indemnitee any liability or obligation which cannot be assumed and performed in
full by the Indemnitor, and the Indemnitee shall have no right to withhold its
consent to any settlement which involves only the payment of money by the
Indemnitor or its insurer.
ARTICLE VI
ADVERSE EVENT REPORTS
JDS shall be solely responsible for receiving, recording and responding to all
customer inquiries and complaints and all reports of alleged adverse events
relating to the Product, and for reporting all such matters to appropriate
Regulatory Authorities in accordance with applicable law. ANI shall provide JDS
with any technical information relating to formulation, manufacture or stability
of the Product reasonably necessary to enable JDS to perform all such
activities. Should ANI receive any notice or inquiry regarding adverse events,
it shall immediately transmit them to JDS.
ARTICLE VII
CONFIDENTIALITY
7.1 Generally. Each party shall hold all Confidential Information disclosed to
it by the other in the strictest confidence and shall protect all such
Confidential Information with the same degree of care that it exercises with
respect to its own proprietary information. Without the prior written consent of
the disclosing entity, the receiving party shall neither use, disclose, divulge
or otherwise disseminate any Confidential Information to any person or entity
outside of the party, except for the receiving party’s attorney and such other
professionals as the receiving party may retain in order for it to enforce the
provisions of this Agreement. For purposes of this Agreement, “Confidential
Information” shall consist of any information, whether or not reduced to
writing, which either party shall from time to time possess in relation to the
development, formulation, manufacture, testing or packaging of the Products and
which is not generally known to the public or within the pharmaceutical industry
and which one party hereto discloses to the other party.
7.2 Restriction. Neither party shall use the other’s name or disclose the
existence or terms of this Agreement without the written permission of the other
except for references in Products packaging or labeling required by law or
otherwise contemplated herein.7.3 Exceptions. Notwithstanding Section 7.1

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hereof, neither party shall have any obligations with respect to any
Confidential Information which (a) is or becomes within the public domain
through no act of the receiving party in breach of this Agreement, (b) was
lawfully in the possession of the receiving party without any restriction on use
or disclosure prior to its disclosure hereunder, (c) is lawfully received from
another source subsequent to the date of this Agreement without any restriction
on use or disclosure, (d) is deemed in writing by the disclosing entity no
longer to be Confidential Information, or (e) is required to be disclosed by
order of any court of competent jurisdiction or other governmental authority
(provided, however, in such latter case, that the receiving party shall timely
inform the disclosing party of all such legal or governmental proceedings so
that the disclosing party may attempt by appropriate legal means to limit such
disclosure, and the receiving party shall further use its best efforts to limit
the disclosure and maintain confidentiality to the maximum extent possible).
ARTICLE VIII
COOPERATION WITH GOVERNMENTAL REQUIREMENTS
The parties shall cooperate with one another as may be reasonably necessary or
appropriate to satisfy all governmental requirements and obtain all needed
permits, approvals and licenses with respect to the manufacture, storage,
packaging and sale of the Products. Such cooperation shall include, without
limitation, communicating with Regulatory Authorities and making available as
promptly as reasonably practicable all information, documents and other
materials which result from the performance by ANI of its obligations hereunder
which JDS is required to submit. The costs and expenses of such cooperation, if
applicable, shall be subject to the parties’ mutual agreement. JDS shall be
responsible for all regulatory reporting of Products. ANI shall assist JDS by
providing necessary support and information and shall prepare the annual cGMP
Products reviews.
ARTICLE IX
FORCE MAJEURE
9.1 Effects of Force Majeure. Notwithstanding any other provision of this
Agreement to the contrary, neither party shall be held liable or responsible for
failure or delay in fulfilling or performing any of its obligations under this
Agreement to the extent that such failure or delay results from any cause beyond
its reasonable control, including, without limitation, fire, flood, explosion,
war, strike, labor unrest, riot, embargo, inability to obtain necessary raw
materials or supplies, acts or omissions of carriers, or act of God (each, a
“Force Majeure Event”). Subject to Section 9.4, such excuse shall continue as
long as the Force Majeure Event continues, following which such party shall
promptly resume performance hereunder.
9.2 Effects of Regulatory Changes. Notwithstanding any other provision of this
Agreement to the contrary, neither party shall be held responsible or liable for
failure or delay in fulfilling or performing any of its obligations under this
Agreement to the extent that such failure or delay results from good faith
efforts to comply with the enactment or revision of any law, rule, regulation or
regulatory advisory opinion or order applicable to the manufacturing, marketing,
sale, reimbursement and/or pricing of the Products (a “Regulatory Change”). Such
excuse shall continue as long as performance is prevented by the affected
party’s good faith efforts to comply with such Regulatory Change, following
which such party shall promptly resume performance hereunder.
9.3 Notice. The party affected by a Force Majeure Event or a Regulatory Change
shall notify the other party thereof as promptly as practicable after its
occurrence. Such notice shall describe the nature of such Force Majeure Event or
Regulatory Change and the extent and expected duration of the affected party’s
inability fully to perform its obligations hereunder. The affected party shall
use all reasonable efforts to minimize the effects of or end any such event so
as to facilitate the resumption of full performance hereunder and shall notify
the other party when it is again fully able to perform such obligations.

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9.4 Limitation. Notwithstanding anything to the contrary herein, in the event a
Regulatory Change or Force Majeure Event continues for more than 180 days, JDS
shall have the right to terminate this Agreement upon notice and upon JDS’s
request, ANI shall cooperate to assist in the transfer of technology to a new
manufacturer at no additional labor cost to JDS. JDS shall bear the cost and
expense of the foregoing technology transfer in the case of a Regulatory Change,
and the parties shall bear the cost and expense of a technology transfer in such
proportion as is just and equitable in the case of a Force Majeure Event.
ARTICLE X
INDEPENDENT CONTRACTORS
The relationship between ANI and JDS is that of independent contractors, and
nothing herein shall be deemed to constitute the relationship of partners, joint
venturers, nor of principal and agent between ANI and JDS. Neither party shall
have any express or implied right or authority to assume or create any
obligations on behalf of or in the name of the other party or to bind the other
party to any contract, agreement or undertaking with any third party
ARTICLE XI
FURTHER ACTIONS
The parties shall execute such additional documents and perform all such other
and further acts as may be necessary to carry out the purposes and intents of
this Agreement.
ARTICLE XII
DISPUTE RESOLUTION
12.1 Negotiation. Any dispute, controversy or claim arising out of or relating
to this Agreement or the breach, termination, or invalidity hereof shall be
submitted for negotiation and settlement in the first instance to the Senior
Vice President of Sales & Marketing of ANI, or such person’s designee of
equivalent or superior position, and the Senior Vice President Strategic
Alliances, or such person’s designee of equivalent or superior position.
12.2 Arbitration. If the parties are unable to settle a dispute, controversy or
claim hereunder pursuant to Section 12.1, the matter shall be finally resolved
by arbitration in accordance with the rules of American Arbitration Association,
except as modified by this Section 12.2. The number of arbitrators shall be
three (3), one (1) of whom is selected by JDS, one (1) of whom is selected by
ANI and one (1) of whom is selected by ANI and JDS (or by the other two
(2) arbitrators if the parties cannot agree). The arbitration proceeding shall
be conducted in the English language. The arbitration proceeding shall be
brought in State of Delaware, unless the parties agree in writing to conduct the
arbitration in another location. The arbitration decision shall be binding and
not be appealable to any court in any jurisdiction. The prevailing party may
enter such decision in any court having competent jurisdiction. Each party shall
pay its own expenses of arbitration and the expenses of the arbitrators shall be
equally shared except that if, in the opinion of the arbitrators, any claim by a
party hereto or any defense or objection thereto by the other party was
unreasonable, the arbitrators may in their discretion assess as part of the
award any part of the arbitration expenses of the other party (including
reasonable attorneys’ fees) and expenses of the arbitrators against the party
raising such unreasonable claim, defense or objection.

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12.3 Interim Relief. Any party may, without inconsistency with this Agreement,
apply to any court having jurisdiction hereof and seek injunctive relief so as
to maintain the status quo until such time as the arbitration award is rendered
or the controversy is otherwise resolved.
ARTICLE XIII
MISCELLANEOUS
13.1 Notices. All notices, requests, instructions, consents and other
communications to be given pursuant to this Agreement shall be in writing and
shall be deemed received (a) on the same day if delivered in person, by same-day
courier or by telegraph, telex, facsimile, electronic mail or other electronic
transmission, (b) on the next day if delivered by overnight mail or courier, or
(c) on the date indicated on the return receipt, or if there is no such receipt,
on the third calendar day (excluding Sundays) if delivered by certified or
registered mail, postage prepaid, to the party for whom intended to the
following addresses:
     If to JDS:

                  JDS Pharmaceutical, LLC
Bruce C. Friedman
Vice President Technical Operations
405 Lexington Ave
New York, NY 10174

     With a copy to:

                  Noven Pharmaceuticals, Inc.
Mr. Jeff Mihm
Vice President and General
11960 SW 144th Street
Miami,FL 33186

     If to ANI:

                  ANIP Acquisition Company
d/b/a ANI Pharmaceuticals, Inc.
Mr. Thomas L. Anderson
CEO
7131 Ambassador Road; Suite 150
Woodlawn, Maryland 21244

     With a copy to:

                  Sonnenschein Nath & Rosenthal LLP
1221 Avenue of the Americas
25th Floor
New York, NY 10020
Attn: Ms. Jane A. Meyer

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     Each party may by written notice given to the other in accordance with this
Agreement change the address to which notices to such party are to be delivered.
13.2 Entire Agreement. This Agreement and the agreements being executed
contemporaneously herewith contain the entire understanding of the parties with
respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, whether written or oral, between them with
respect to the subject matter hereof and thereof. Each party has executed this
Agreement without reliance upon any promise, representation or warranty other
than those expressly set forth herein and in such other agreements.
13.3 Amendment. No amendment of this Agreement shall be effective unless
embodied in a written instrument executed by both of the parties.
13.4 Waiver of Breach. The failure of either party at any time to enforce any of
the provisions of this Agreement shall not be deemed or construed to be a waiver
of any such provision, nor in any way to affect the validity of this Agreement
or any provisions hereof or the right of any party hereto to thereafter enforce
each and every provision of this Agreement. No waiver of any breach of any of
the provisions of this Agreement shall be effective unless set forth in a
written instrument executed by the party against whom or which enforcement of
such waiver is sought; and no waiver of any such breach shall be construed or
deemed to be a waiver of any other or subsequent breach.
13.5 Assignability. This Agreement may not be assigned by either party to any
third party without the prior written consent of the other party: except that
(i) either party may assign this Agreement, without the prior written consent of
the other party, to any of its Affiliates, to any purchaser of all or
substantially all of its assets or to any successor corporation resulting from
any merger or consolidation with or into such corporation and (ii) ANI may
assign this Agreement, without the prior written consent of JDS, to any
purchaser of the Facility. In the event of any such assignment, the assignee
shall expressly assume in writing the performance of all the terms and
conditions of this Agreement and all of the obligations to be performed by the
assignor. Any assignment not in accordance with this Agreement shall be void.
13.6 Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of Delaware without regard to its
conflicts of laws principles. The parties consent to the personal jurisdiction
and venue of the United States Federal Courts and further consent that any
process, notice of motion or other application to either such court or a judge
thereof may be served by registered or certified mail or by personal service,
provided that a reasonable time for appearance is allowed.
13.7 Severability. All of the provisions of this Agreement are intended to be
distinct and severable. If any provision of this Agreement is or is declared to
be invalid or unenforceable in any jurisdiction, it shall be ineffective in such
jurisdiction only to the extent of such invalidity or unenforceability. Such
invalidity or unenforceability shall not affect either the balance of such
provision, to the extent it is not invalid or unenforceable, or the remaining
provisions hereof, nor render invalid or unenforceable such provision in any
other jurisdiction.
13.8 Publicity. Neither party shall issue any press release or make any similar
public announcement concerning the transactions contemplated in this Agreement,
except as may be required by law (including federal securities law) or judicial
order, without the prior written consent of the other party. Neither party shall
issue any press release or make any similar announcement which includes the name
of the other party or its affiliates or otherwise uses the name of the other
party in any public statement or publicly released document except as required
by law (including federal securities law) or with the prior written consent of
the other party.

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13.9 Survival. The provisions of Section 2.5 (Delivery), Section 2.7 (Inspection
of Products), Section 2.9 (Recalls), Section 3 (Representation and Warranties),
Section 4.4 (Rights and Duties Upon Termination), Article V (Indemnification),
Article VII (Confidentiality), Section 13.6 (Governing Law; Jurisdiction),
Section 13.8 (Publicity) and this Section 13.9 (Survival) shall survive the
termination or expiration of this Agreement for any reason.
13.10 Headings. The headings of sections and subsections have been included for
convenience only and shall not be considered in interpreting this Agreement.
13.11 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, and all of which together shall
constitute one and the same Agreement. This Agreement may be executed and
delivered via electronic facsimile transmission with the same force and effect
as if it were executed and delivered by the parties simultaneously in the
presence of one another.
13.12 Execution. At the time of execution of this Agreement, the parties shall
cause their authorized officers to execute two original copies of this
Agreement, one copy of which shall be maintained by each party at that party’s
offices. Each party represents that the person who executes this Agreement is
authorized and empowered to obligate and bind his party under this Agreement.
13.13 Facsimile Signatures. Any counterpart of this Agreement may be signed and
transmitted by facsimile with the same force and effect as if such counterpart
was an ink-signed original.
[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the date first written above.

          ANIP ACQUISITION COMPANY
ANI PHARMACEUTICALS, INC.
    By:   /s/ Jane Williams       Name:   Jane Williams       Title:   Sr. Vice
President, Sales and Marketing      Date:   December 6, 2007     

          JDS PHARMACEUTICALS, LLC

    By:   /s/ Richard P. Gilbert       Name:   Richard P. Gilbert      Title:  
Vice President, Operations      Date:   January 2, 2008     

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