Exhibit 10.39

Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in
places marked “[* * *]” and has been filed separately with the Securities and
Exchange Commission pursuant to a Confidential Treatment Application filed with
the Commission.

EXECUTION COPY

 

FIRST AMENDMENT TO THE DEVELOPMENT AND MARKETING AGREEMENT

This First Amendment (“Amendment”) to the Development and Marketing Agreement
(“Agreement”) dated February 22, 2006, by and between Spectrum Pharmaceuticals,
Inc. (“Spectrum”) and Par Pharmaceutical, Inc. (“Par”) is entered into and is
effective as of November 10, 2006 (“First Amendment Effective Date”),
hereinafter referred to as “Party” and, collectively, as “Parties.” Capitalized
terms used but not defined herein shall have the meanings given them in the
Agreement.

WHEREAS, on November 10, 2006, the Parties each hereby give their consent to
Spectrum entering into, and Spectrum is entering into a Settlement Agreement,
dated November 10, 2006 (the “Settlement Agreement”), with Glaxo Group Limited
(“GSK”) to settle the Sumatriptan Litigation. Pursuant to the Settlement
Agreement, Spectrum received the right to sell Spectrum Generic Sumatriptan
Products and GSK Supplied Products (both as defined in the Settlement Agreement
and the Supply and Distribution Agreement) in accordance with the terms of the
Settlement Agreement;

WHEREAS, pursuant to the Settlement Agreement, Spectrum and Par hereby consent
to, and GSK and Glaxo Wellcome Manufacturing PTE Limited and Par are entering
into a Supply and Distribution Agreement, dated November 10, 2006 (the “Supply
and Distribution Agreement”)(the Settlement Agreement and the Supply and
Distribution Agreement are collectively referred to herein as the “GSK
Agreements”) pursuant to which GSK agrees to supply the GSK Supplied Products to
Par for distribution. Par agrees to purchase and distribute GSK Supplied
Products on behalf of Spectrum in order to fulfill its obligations under the
Agreement;

WHEREAS, the Parties wish the Agreement to apply only to GSK Supplied Products
and the Spectrum Generic Sumatriptan Products, as defined in the GSK Agreements
(collectively, the “GSK Sumatriptan Products”); and

WHEREAS, the Parties wish to amend certain terms of the Agreement to reflect the
Settlement Agreement and Supply and Distribution Agreement and the elimination
from the Agreement of all Products except the GSK Sumatriptan Products, among
other changes, as set forth below.

NOW, THEREFORE, in consideration of the mutual covenants, promises and
agreements set forth herein, the Parties hereby agree as follows:

 

  1.

In the event that GSK and Spectrum modify the terms of the Settlement Agreement
or the Supply and Distribution Agreement in accordance with Sections 4 & 5 of
the Settlement Agreement, then Par and Spectrum shall

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Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in
places marked “[* * *]” and has been filed separately with the Securities and
Exchange Commission pursuant to a Confidential Treatment Application filed with
the Commission.

EXECUTION COPY

 

 

consider whether any corresponding modifications ought to be made to the
Agreement, as modified by this First Amendment, and, if so, they shall negotiate
such modifications in good faith. The Parties acknowledge that, due to reasons
stated in the Settlement Agreement both the Settlement Agreement and the Supply
and Distribution Agreement may be terminated.

 

  2. Spectrum hereby assigns and Par hereby assumes the commercial and marketing
obligations of Spectrum under the Settlement Agreement. Any material breach of
the Supply and Distribution Agreement or the Settlement Agreement by Par shall
be considered a material breach of the Agreement, subject to cure under the
Agreement. To the extent there is any conflict between Par’s obligations under
the Agreement and the Supply and Distribution Agreement and the Settlement
Agreement solely with regard to the GSK Sumatriptan Products, the terms of the
Supply and Distribution Agreement and the Settlement Agreement, respectively,
shall apply. Additionally, while Spectrum will remain free to cure any breach
under the Supply and Distribution Agreement pursuant to Section 7.2(c) thereof,
Spectrum agrees that it will not step in and assume all of Par’s rights and
obligations thereunder, without first giving Par a full and fair opportunity to
cure thereunder.

 

  3. As long as the Settlement Agreement and the Supply and Distribution
Agreement are effective, then Spectrum shall not be responsible for any
development obligations under Section 2 or any regulatory obligations under
Section 3 for any of the GSK Supplied Products. Spectrum’s obligations, however,
with respect to the [* * *] Products set forth on Schedule 1.33 shall continue.
In the event that, the Supply and Distribution Agreement terminates or expires
then (1) Spectrum’s obligations under the Agreement with respect to the [* * *]
Product set forth on Schedule 1.33 shall promptly resume and (2) with respect to
[* * *] and the [* * *] presentations of injectable sumatriptan products, the
Parties shall discuss in good faith whether and how best to proceed, if at all.

 

  4. Within thirty (30) days of the First Amendment Effective Date, Par shall
make a non-refundable, non-creditable payment to Spectrum of five million
dollars ($5,000,000) in consideration for Spectrum receiving tentative approval,
amending the Agreement and entering into this Amendment. Par acknowledges that
Spectrum has no future obligations or performance contingencies associated with
this payment.

 

  5.

Section 1.10 shall be amended to read

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Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in
places marked “[* * *]” and has been filed separately with the Securities and
Exchange Commission pursuant to a Confidential Treatment Application filed with
the Commission.

EXECUTION COPY

 

 

“Competing Product” means any Drug Product that is an injectable [* * *] form of
sumatriptan, excluding the Products under this Agreement as made and sold per
the terms of this Agreement and the GSK Supplied Products under the terms of the
GSK Agreements.

 

  6. Section 1.16 shall be deleted in its entirety.

 

  7. Section 1.18 shall be deleted in its entirety.

 

  8. Section 1.19 shall be deleted in its entirety.

 

  9. Section 1.20 shall be deleted in its entirety.

 

  10. Section 1.22 shall be deleted in its entirety.

 

  11. Section 1.33 of the Agreement shall be amended in its entirety to read:

“‘Products’ means GSK Sumatriptan Products and the products listed on Schedule
1.33, except for the injectable [* * *] presentation listed on Schedule 1.33
unless the Settlement Agreement and the Supply and Distribution Agreement are
terminated in which case the injectable [* * *] presentation will be included.’”

 

  12. In Section 1.36, “and NDAs” shall be added after “ANDAs”.

 

  13. Section 1.37 shall be deleted in its entirety. Any reference in the
Agreement to “Sumatriptan Products” shall be replaced with “Products.”

 

  14. Section 1.38 shall be deleted in its entirety and replaced by the
following:

“Territory” shall mean the United States of America (including the Commonwealth
of Puerto Rico) its possessions and territories and U.S. military or U.S.
government installations that are under the purview of the FDA.

 

  15. Add a new Section 1.42:

“Product Claims” shall have the meaning given such term in the Supply and
Distribution Agreement.

 

  16. Section 2.4 shall be deleted in its entirety.

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Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in
places marked “[* * *]” and has been filed separately with the Securities and
Exchange Commission pursuant to a Confidential Treatment Application filed with
the Commission.

EXECUTION COPY

 

  17. Section 4.2.7 shall be deleted in its entirety.

 

  18. Section 4.2.8 shall be deleted in its entirety.

 

  19. Section 5.1 shall be deleted in its entirety and replaced by the
following:

License Grant. Spectrum hereby grants to Par an exclusive (even as to Spectrum)
royalty free (other than as set forth in Article 7), irrevocable (subject to
Article 14) license to market, promote, distribute, sell and have sold the
Products in the Territory. To the extent permitted by the Supply and
Distribution Agreement, the foregoing license shall include the right for Par to
grant sublicenses and appoint sub-contractors to market, distribute and sell the
Products within the Territory on Par’s behalf.

 

  20. Section 5.2.2 shall be deleted in its entirety.

 

  21. In Section 5.2.3 the following shall be added to the end of the last
sentence: “and in accordance with Section 4.2(e) of the Supply and Distribution
Agreement.”

 

  22. In Section 5.3 the following shall be added to the end of the last
sentence:

Notwithstanding the foregoing, where applicable, the Commercial Launch of the
Product, and Par’s obligations in regard to such Commercial Launch, shall be
subject to the applicable provisions set forth in the Supply and Distribution
Agreement and the Settlement Agreement.

 

  23. In Section 5.6 the following shall be added to the end of the last
sentence:

Notwithstanding the foregoing, recalls of the Product, and Par’s obligations in
regard to such Recalls, shall be subject to Section 5.8(b) of the Supply and
Distribution Agreement, as applicable. Without limiting the foregoing, Par shall
promptly notify Spectrum of any Recalls which it may be necessary to conduct and
consult with Spectrum as to how best to proceed.

 

  24. In Section 6.1, the reference to “contractual restrictions regarding
Competing Product competitive activities,” shall not apply to the GSK
Agreements.

 

  25. Section 6.4 shall be deleted and replaced in its entirety by the
following:

Par shall permit Spectrum’s quality assurance representatives to inspect the
manufacturing, distribution and storage facilities and all books and records of

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Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in
places marked “[* * *]” and has been filed separately with the Securities and
Exchange Commission pursuant to a Confidential Treatment Application filed with
the Commission.

EXECUTION COPY

 

Par relating to the production of the Product at all times upon thirty (30) days
prior written notice, during normal business hours and on a confidential basis;
provided, however, that such inspections shall be limited to twice annually in
the absence of a breach of this Agreement by Par. The foregoing obligation shall
not apply with regard to GSK or GSK Supplied Products. Par will use commercially
reasonable efforts to include Spectrum in any inspections of GSK facilities in
connection with GSK Supplied Product, and if Par is unable to do so will provide
a written report regarding the same to Spectrum.

 

  26. In Section 6.6.1.3, the following text shall be added: “or applicable NDA”
after “the applicable ANDA”. Additionally, the representations in Section 6.6.1
shall not apply with respect to GSK Supplied Product.

 

  27. Section 7.1.1 shall be deleted in its entirety.

 

  28. Section 7.2 of the Agreement shall be deleted in its entirety.

 

  29. Section 7.4 of the Agreement shall be deleted in its entirety.

 

  30. Section 8.1 of the Agreement shall be revised to read:

Any intellectual property rights (including patents, patent applications,
know-how, trade secrets, copyrights, trade dress, housemarks and trademarks)
owned by either Party or its Affiliates prior to the Effective Date shall remain
solely owned by such Party (or its Affiliates, as applicable). Each of the
Parties shall not during the Term, or at any time thereafter, represent or
assert that it is the owner of any such intellectual property rights of the
other Party (or its Affiliates), whether or not such rights are registered. The
Parties do not contemplate that any development activities will be performed
under this Agreement, but in the event that any such activities should be
conducted under this Agreement the intellectual property laws of the United
States and the State of New York will govern the allocation of intellectual
property rights among the Parties in any developments resulting from such
activities.

 

  31. A new Section 10.5 shall be added as follows:

“Notwithstanding the foregoing, Par shall have the right to disclose
Confidential Information of Spectrum that it acquires under this Agreement to
GSK, but only to the extent necessary for Par to comply with its obligations
under the Supply and Distribution Agreement and only after receipt of prior
written consent from Spectrum.”

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Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in
places marked “[* * *]” and has been filed separately with the Securities and
Exchange Commission pursuant to a Confidential Treatment Application filed with
the Commission.

EXECUTION COPY

 

  32. In Section 11.1.5 the following text shall be added:

“, except as may be set forth in the Settlement Agreement or Supply and
Distribution Agreement” after “to any royalties or fees”.

 

  33. Section 12.1 shall be amended as follows:

First, move “, (i)” after “arising out of.”

Second, after “obligation of Par under this Agreement” add “or under the Supply
and Distribution Agreement”

Third, strike “or” before “(iii).”

Fourth, add at the end of the paragraph: “or (iv) any Product Claims (as defined
in the Supply and Distribution Agreement).”

 

  34. The Agreement is hereby amended to add a new Section 12.6 which shall read
as follows:

12.6 “Indemnification Obligation for GSK Supplied Product.” With respect to any
Product Claims or claims for indemnification by GSK under the Supply and
Distribution Agreement, the obligation in respect of such claims shall [* * *].

 

  35. The last sentence of Section 14.4 shall be deleted .

 

  36. Section 14.5 shall be deleted in its entirety.

 

  37. Section 14.6 shall be deleted in its entirety.

 

  38. Section 14.8 shall be deleted in its entirety.

 

  39. Section 16.4 of the Agreement shall be amended by adding the following
sentence to the end of the paragraph:

“Notwithstanding the foregoing, Spectrum may assign, sell, transfer or otherwise
convey its right to receive its share of the Net Profit under Section 7.1 of
this Agreement to a Third Party.”

 

  40. In Section 16.13 the following text shall be added:

“, and the Settlement Agreement and the Supply and Distribution Agreement,”
after “Confidentiality Agreement”.

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Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in
places marked “[* * *]” and has been filed separately with the Securities and
Exchange Commission pursuant to a Confidential Treatment Application filed with
the Commission.

EXECUTION COPY

 

  41. A new Section 16.16 shall be added:

[***]. In the event that there is a [***], Spectrum may [***], all [***] from
the date [***] accordance with an [***] mutually agreed to by and among [***]
shall also include [***].

 

  42. Schedule 1.18 shall be deleted in its entirety.

 

  43. Schedule 1.19 shall be deleted in its entirety.

 

  44. Schedule 1.20 shall be deleted in its entirety.

 

  45. Add Schedule 1.33 as attached.

 

  46. Schedule 1.37 shall be deleted in its entirety.

 

  47. Schedule 7.21 shall be deleted in its entirety.

 

  48. Schedule 11.1.5 shall be deleted in its entirety.

 

  49. Any references in the Agreement to the above deleted Schedules shall be
deleted.

 

  50. A new Section 7.6 shall be added to read as follows:

GSK Agreement: In the event that Par recovers any damages, including [* * *],
under the Supply and Distribution Agreement Par shall pay Spectrum [* * *]
percent ([* * *]%) of such damages within [* * *] ([* * *]) days after
recovering them.

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Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in
places marked “[* * *]” and has been filed separately with the Securities and
Exchange Commission pursuant to a Confidential Treatment Application filed with
the Commission.

EXECUTION COPY

 

All amounts paid to GSK under the GSK agreements shall be included in the
calculation of Net Profits.

51. Consistent with the representations, warranties and covenants made in this
Amendment, the Settlement Agreement, the Supply & Distribution Agreement and the
Stipulation of Dismissal, as of the Execution Date, Spectrum and each of its
respective predecessors, successors, parents, subsidiaries, Affiliates,
divisions, general partners, limited partners, and assigns (collectively, the
“Spectrum Releasees”), fully, finally and forever release, relinquish, acquit,
and discharge Par and each of its respective predecessors, successors, parents,
subsidiaries, Affiliates, divisions, general partners, limited partners, and
assigns, (collectively, the “Par Releasees”) of and from, and covenant not to
sue, not to assign to any other entity a right to sue, and not to authorize any
other entity to sue, any Par Releasee for, any and all claims, counterclaims,
defenses, demands, causes of action, suits, damages, debts, liabilities,
obligations, rights, and set-offs of any and all kind or description whatsoever,
including costs, expenses, and attorneys’ fees (collectively, “Losses”), known
or unknown, suspected or unsuspected, asserted or unasserted, in law or equity,
on which no judgment has yet been rendered, from the beginning of the world to
the Execution Date that could have been, are or could be asserted in connection
with the obligations of the parties under the Agreement through the date of this
Amendment, and in connection with the entering into of the GSK Agreements by
either Party or that arise out of any claim, counterclaim, affirmative defense,
act, transaction, series of transactions, fact, omission, or matter that could
have been, is or was the subject matter of the District Court Case
(collectively, “Acts”). Consistent with the representations, warranties and
covenants made in this Amendment, the Settlement Agreement, the Supply &
Distribution Agreement and the Stipulation of Dismissal, as of the Execution
Date, Par and each of the other Par Releasees, fully, finally and forever
release, relinquish, acquit, and discharge the Spectrum Releasees of and from,
and covenant not to sue, not to assign to any other entity a right to sue, and
not to authorize any other entity to sue, any Spectrum Releasee for, any and all
Losses, known or unknown, suspected or unsuspected, asserted or unasserted, in
law or equity, on which no judgment has yet been rendered, from the beginning of
the world to the Execution Date that could have been, are or were asserted in
the District Court Case, or that arise out of any Acts.

Except as provided herein, all other terms and conditions of the Agreement shall
remain in full force and effect.

[Signature page to follow]

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Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in
places marked “[* * *]” and has been filed separately with the Securities and
Exchange Commission pursuant to a Confidential Treatment Application filed with
the Commission.

EXECUTION COPY

 

[Signature Page to First Amendment to Development and Marketing Agreement]

IN WITNESS WHEREOF, the Parties hereto have executed this First Amendment to the
Development and Marketing Agreement to be effective as of the First Amendment
Effective Date.

SPECTRUM PHARMACEUTICALS, INC.

 

By:  

/s/ Rajesh C. Shrotriya, M.D.

Name:  

Rajesh C. Shrotriya, M.D.

Title:  

Chairman, CEO and President

PAR PHARMACEUTICAL, INC.

 

By:  

/s/ Patrick G. LePorre

Name:  

Patrick G. LePorre

Title:  

President and CEO

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Pursuant to 17 CFR 240.24b-2, confidential information has been omitted in
places marked “[* * *]” and has been filed separately with the Securities and
Exchange Commission pursuant to a Confidential Treatment Application filed with
the Commission.

EXECUTION COPY

 

Schedule 1.33

 

NDA
No.

  

Reference Listed Drug

  

Dosage Form;

Route

  

Strength

  

Package Form

[* * *]

   [* * *]    [* * *]    [* * *]    [* * *]