**Exhibit 10.1**     **SETTLEMENT AND LICENSE AGREEMENT**     This is an agreement (hereinafter referred to as “Agreement”) dated as of this 21stday of March, 2007 (the “Effective Date”), by and between Adams Respiratory Therapeutics,Inc., Adams Respiratory Operations, Inc. and Adams Respiratory Products, Inc., each suchcorporation organized and existing under the laws of Delaware (together “Adams”), andPharmaceutical Holdings Corp., a corporation organized and existing under the laws of Delaware, andMutual Pharmaceutical Co., Inc. and United Research Laboratories, Inc., each such corporationorganized and existing under the laws of Pennsylvania (together “Mutual”). Adams andMutual are sometimes individually referred to herein as a “Party” and collectively referredto herein as the “Parties”.     WHEREAS, Adams and Mutual are parties to the patent litigations captioned, *Adams RespiratoryOperations, Inc. v. Pharmaceutical Holdings Corp., Mutual Pharmaceutical Co, Inc. and UnitedResearch Laboratories, Inc.*, Civil Action No. 2:06-CV-04418-PD, and *Adams Respiratory Therapeutics,Inc. v. Pharmaceutical Holdings Corp., Mutual Pharmaceutical Co, Inc. and United ResearchLaboratories, Inc.*, Civil Action No. 2:06-CV-05485-PD, both of which are pending before theHonorable Paul S. Diamond in the United States District Court for the Eastern District ofPennsylvania (“District Court”) and to the related antitrust litigation captioned,*Pharmaceutical Holdings Corp., Mutual Pharmaceutical Co., Inc. and United Research Laboratories,Inc. v. Adams Respiratory Operations, Inc.*, Civil Action No. 2:07-CV-00217-PD, also pending beforethe Honorable Paul S. Diamond in the District Court (the “Lawsuits”);     WHEREAS, Adams manufactures, markets and sells the pharmaceutical formulations containing 600and 1200 mg of guaifenesin alone and in combination with other active ingredients under the brandnames Mucinex® (guaifenesin 600 mg ER tablets), Mucinex® DM (guaifenesin 600mg/pseudoephedrine 60 mg ER tablets), Mucinex® D (guaifenesin 600 mg/dextromethorphan 30mg ER tablets) and Humibid® (guaifenesin 1200 mg ER tablets) and plans to manufacture,market and sell future extended-release products containing guaifenesin (collectively “AdamsGuaifenesin Products”);     WHEREAS, Mutual filed Abbreviated New Drug Application No. 78-333 (the “Mutual ANDA”)seeking permission to market a 600 mg version of Mucinex**®** and a 1200 mg version ofHumibid**®**;     WHEREAS,Mutual is in the process of developing versions of Mucinex**®** D andMucinex**®** DM;     WHEREAS, the Mutual ANDA contains Paragraph IV Certifications with respect to versions of theMucinex**®** (guaifenesin 600mg ER tablets) and Humibid**®** (guaifenesin 1200 mg ERtablets) Adams Guaifenesin Products where guaifenesin is the sole active ingredient;
 

 
     WHEREAS, Adams asserts that Mutual’s versions of Mucinex® and Humibid®infringe Adams’ U.S. Patent No. 6,372,252 (the “Adams Patent”);     WHEREAS, with respect to the Adams Patent, Mutual has asserted affirmative defenses andcounterclaims alleging invalidity, unenforceability and/or non-infringement;     WHEREAS, Mutual admits that the Mutual ANDA and the versions of Mucinex®andHumibid® set forth therein infringe claims 24-28, 31-34 and 40 of the Adams Patent andclaims 62-63 from Reexamination 90/007,514 filed April 22, 2005, and that the making, using,selling, offering for sale or importing of the formulation set forth in the Mutual ANDA in versionsof Mucinex® D and Mucinex® DM (such as the Mutual Combination GuaifenesinProducts defined below) and other guaifenesin products would infringe the Adams Patent;     WHEREAS, Mutual admits that the Adams Patent is valid and enforceable;     WHEREAS, Mutual alleged as claims, counterclaims or affirmative defenses in the Lawsuits thatAdams has committed exclusionary, anticompetitive and unlawful acts in violation of the ShermanAct, the Clayton Act and state common law in connection with the Adams Patent and NDA No. 21-282;     WHEREAS, Mutual hereby admits that Adams has not committed any exclusionary, anticompetitiveor unlawful act in violation of the Sherman Act, the Clayton Act and/or any state common law inconnection with the Adams Patent or NDA No. 21-282 or the Lawsuits;     WHEREAS, Mutual asserted that Adams committed tortious interference and common law unfaircompetition;     WHEREAS, Mutual admits that Adams has not committed tortious interference or common law unfaircompetition;     WHEREAS, Mutual agrees to withdraw each of its claims and counterclaims;     WHEREAS, the Parties wish to fully settle the Lawsuits, upon the terms and subject to theconditions set forth in this Agreement;     WHEREAS, this Agreement and the Consent Judgment and Dismissal Without Prejudice (attachedhereto as Appendix B) are the only consideration exchanged by or on behalf of Mutual on the oneside, and Adams on the other side, in reaching the agreement to dismiss the Lawsuits; and Mutualand Adams have each received no consideration from the other Party for their entry into thisAgreement other than that which is described in this Agreement and the Consent Dismissal WithoutPrejudice; and this Agreement constitutes Mutual’s best independentjudgment as to how to most expeditiously and competitively sell guaifenesin products in theUnited States;     WHEREAS, as a result of this Agreement, almost eight (8) years prior to expiration of theAdams Patent, Mutual will have the opportunity to sell a guaifenesin product resulting in
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increased competition for Adams Guaifenesin Products, which competition otherwise might not have existeduntil the expiration of the Adams Patent;     WHEREAS, settlement of the Lawsuits will help both Adams and Mutual avoid the substantialuncertainty and risk involved in prolonged litigation;     WHEREAS, to the extent Mutual seeks approval of formulations subject to this Agreement asLicensed Products, settlement of the Lawsuits will enable Mutual to file future ANDAs seeking finalFDA approval of such Licensed Products prior to the expiration of the Adams Patent without beingsubject to the applicability of an automatic thirty (30)-month stay of FDA approval, which wouldarise by reason of potential patent actions filed by Adams;     WHEREAS, settlement of the Lawsuits will permit both Adams and Mutual to save litigationcosts, as well as to adhere to the judicially recognized mandate that encourages the settlement oflitigation;     WHEREAS, as a result of this Agreement, Mutual’s ability to enter into competition with theAdams Guaifenesin Products is not subject to its ability to obtain approval of the Mutual products;     WHEREAS, settlement of the Lawsuits will permit the management of both Adams and Mutual tofocus their efforts on the conduct of their respective businesses rather than devoting substantialtime and resources to litigation;     WHEREAS, the public will benefit significantly from this final settlement as it will savejudicial resources and create certainty for Adams and Mutual that will encourage the development,investment and marketing of Mucinex®, Humibid® and other pharmaceuticalproducts;     WHEREAS, money saved by settling the Lawsuits can now be invested by Adams and Mutual intoresearch and development, thereby benefiting consumers by identifying new uses for current drugs,as well as furthering the creation of new medications.     NOW THEREFORE, in consideration of the promises, representations, warranties, covenants andagreements contained herein, the receipt and sufficiency of which are hereby acknowledged, theParties hereto, intending to be legally bound hereby agree as follows:     1. The following terms, when used with initial capital letters, shall have the meaning setforth below. a. “Adams Patent” shall mean U.S. Patent No. 6,372,252.  b. “Affiliate” shall mean with respect to a Party, anyperson or entity that controls, is controlled by, or is under common controlwith, such Party. As used in this definition, “control” means (i) inthe case of corporate entities, direct or indirect ownership of at least fiftypercent (50%) of the stock or 
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   shares having the right to vote for the electionof directors, and (ii) in the case of non-corporate entities, the direct orindirect power to manage, direct or cause the direction of the management andpolicies of the non-corporate entity or the power to elect at least fiftypercent (50%) of the members of the governing body of such non-corporateentity.  c. “ANDA” shall mean an Abbreviated New Drug Applicationfiled with the FDA in the Territory as defined in 21 USC § 355(j) and 21 US CFRPart 314.  d. “Bilayered Products” shall mean for purposes of this Agreement:any (i) guaifenesin-containing tablet comprising two portions compressedagainst one another so that the face of each portion is exposed as either thetop or bottom of the tablet, wherein one portion comprises a sustained-releaseformulation of guaifenesin and the other portion comprises an immediate-releaseformulation of guaifenesin; (ii) guaifenesin-containing tablet comprising acore and a coating, wherein the core comprises a sustained-release formulationof guaifenesin in the center of the tablet and the coating comprises animmediate-release formulation of guaifenesin completely covering the core; or(iii) capsule product comprising beads of an immediate-release formulation ofguaifenesin and beads of a sustained-release formulation of guaifenesin. Forthe sake of clarity, this definition shall not include (without limitation):(v) the formulation set forth in the Mutual ANDA; (w) a formulation onlycontaining a sustained-release formulation as set forth in Col. 3, lines 25-43of the Adams Patent; (x) any formulation in which essentially all of theguaifenesin is mixed into a single batch or essentially identical batches ofexcipients; (y) any formulation in which essentially all of the guaifenesin ismixed into one or more batches of excipients comprising a sustained-releasepolymer; or (z) any formulation that does not contain two separate, discreteand internally contiguous regions of guaifenesin.  e. “Business Day” shall mean any day other than aSaturday, Sunday or day on which banks in New York, New York are authorized orobligated by applicable law to close. Any reference in this Agreement to “day”whether or not capitalized shall refer to a calendar day, not a Business Day.  f. “FDA” means the United States Food and DrugAdministration and any successor agency having substantially the samefunctions.  g. “First Commercial Sale” shall mean the first commercialsale in the Territory of an Adams Guaifenesin Product by Mutual, its Affiliateor single Sublicensee to the Retail Trade. First Commercial Sale shall notinclude a sale of an Adams Guaifenesin Product among Mutual, a Mutual Affiliate orMutual’s Sublicensee.  h. “Fully Allocated Cost Basis” shall mean, with respectto a particular Adams Guaifenesin Product in any period, (i) to the extent thatsuch Adams 
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   Guaifenesin Product is manufactured by Adams, the direct costs toAdams of manufacturing the units of finished Adams Guaifenesin Product sold toMutual during such period as calculated in accordance with generally acceptedaccounting principles in the United States consistently applied by Adams,including (v) to the extent not already included in clause (w) below, thedirect acquisition cost of all raw materials and components, including theactive pharmaceutical ingredient used therein, (w) the direct costs, includingdirect labor and materials, of producing, packaging and labeling such AdamsGuaifenesin Product, (x) the direct costs for transportation, insurance and/orstorage consistent with the delivery terms of such Adams Guaifenesin Productand any applicable sales taxes, (y) a reasonable allocation of manufacturingoverhead costs reasonably attributable to such Adams Guaifenesin Product (butexcluding corporate administrative overhead, depreciation and/or costsassociated with excess capacity), and (z) any royalty payments made by Adams toThird Parties as consideration for a license to manufacture such AdamsGuaifenesin Product); and (ii) to the extent that such Adams GuaifenesinProduct is manufactured by a Third Party contract manufacturer, the actualprice paid by Adams to such Third Party for the production, packaging andlabeling of the units of such Adams Guaifenesin Product sold in such period.  i. “Gross Profit” shall mean, with respect to an AdamsGuaifenesin Product in any period, the aggregate Net Sales of such AdamsGuaifenesin Product in such period, *less*the aggregate Fully Allocated CostBasis of such Adams Guaifenesin Product in such period.  j. “IRI Sales” shall mean, with respect to a product inany period, the sales of such product on a pro-rata daily basis in such periodas reported by Information Resources, Inc. (“IRI”), or such other sales datasource as the Parties may agree in writing.  k. “Launch Date” has the meaning given such term inSection 5(b)(i).  l. “License” has the meaning given such term in Section 4.  m. “Licensed Patents” shall mean the (i) the Adams Patentand U.S. Patent Application No. 09/559,542 filed April 28, 2000, and any claimsthat issue from the Reexamination, and (ii) any U.S. reissue, reexamination,continuation, divisional or continuation-in-part thereof.  n. “Licensed Products” shall mean the collective referenceto (i) the Mutual 600 mg Guaifenesin Product, (ii) the Mutual 1200 mgGuaifenesin Product, and (ii) the Mutual Combination Guaifenesin Products,defined herein, as well as (iv) any other product containing guaifenesin thatis made with the formulation set forth in the Mutual ANDA; and a “LicensedProduct” shall mean each of them.
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 o. “Losses” shall mean all pending and potential claims,demands, all manner of actions, causes of action, suits, debts, liabilities,losses, damages, attorneys’ fees, costs, expenses, judgments, settlements,interest, punitive damages and other damages or costs of whatever nature,whether known or unknown, pending or future, certain or contingent.  p. “Marketing License Effective Date” has the meaninggiven such term in Section 5.  q. “Mutual 600 mg Guaifenesin Product” shall mean (i) aformulation as defined in the Mutual ANDA containing a total of 600 mg ofguaifenesin as its sole active ingredient, (ii) any similar formulation thatdoes not require a new bioequivalence clinical study for FDA approval, or (iii)or any formulation for which Mutual provides Adams with a certification letterpursuant to 21 U.S.C. § 355(j)(2)(B) representing that said formulation issubject to this Agreement as a Licensed Product, but excluding in each case anyBilayered Products.  r. “Mutual 1200 mg Guaifenesin Product” shall mean (i) aformulation as defined in the Mutual ANDA containing a total of 1200 mg ofguaifenesin as its sole active ingredient, (ii) any similar formulation thatdoes not require a new bioequivalence clinical study for FDA approval, or (iii)any formulation for which Mutual provides Adams with a certification letterpursuant to 21 U.S.C. § 355(j)(2)(B) representing that said formulation issubject to this Agreement as a Licensed Product, but excluding in each case anyBilayered Products.  s. “Mutual ANDA” shall mean the Abbreviated New DrugApplication No. 78-333.  t. “Mutual Combination Guaifenesin Products” shall meanthe collective reference to: (i) Mutual’s combination formulation containing 60mg or 120 mg of pseudoephedrine and a Mutual 600 mg Guaifenesin Product, (ii)Mutual’s combination formulation containing 30 mg of dextromethorphan and aMutual 600 mg Guaifenesin Product, or (iii) any formulation for which Mutualprovides Adams with a certification letter pursuant to 21 U.S.C. § 355(j)(2)(B)representing that said formulation is subject to this Agreement as a LicensedProduct, but excluding in each case Bilayered Products.  u. “Net Sales” shall mean, with respect to an AdamsGuaifenesin Product in any period, the gross sales revenue for such AdamsGuaifenesin Product actually invoiced by Adams or its Affiliates or by Mutual,its Affiliates or its single Sublicensee, as the case may be, to the RetailTrade in the Territory, less (i) trade, quantity and early pay cash discountsor rebates which are actually deducted, (ii) amounts repaid or credited byreason of returns and rebates, including any statutory or contractual liabilityfor rebates to be paid to or for 
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   the benefit of any government entityincluding, but not limited to, rebates to be paid pursuant to federal, stateand local government rebate legislation and/or programs, (iii) any adjustmentsgranted to customers for repayments, allowances or credits for rejected AdamsGuaifenesin Product, retroactive price adjustements (e.g., floorstockadjustments), reprocurement fees, damaged Adams Guaifenesin Product,promotional allowances, chargebacks, disputed amounts (that are actually notpaid and written off by Adams or Mutual, as the case may be), or othercustomary discounts, deductions and administrative fees, (iv) special handlingfees, transportation and insurance charges to the extent included in theinvoice price, or (v) actual sales, use or excise taxes, tariff or customsduties, and other governmental charges to the extent included in the invoice.  v. “Notice Date” has the meaning given such term inSection 5(b).  w. “Paragraph IV Certification” shall mean a certificationas defined in 21 U.S.C. 355(j)(2)(A)(vii)(IV).  x. “Person” or “Persons” shall mean anyindividual, firm, corporation, partnership, limited liability company, trust,joint venture, governmental authority, or other entity or organization.  y. “Proceeding” shall mean any action, audit, litigation,investigation, suit or other proceeding.  z. “Reexamination” shall mean Reexamination 90/007,514filed April 22, 2005, claims 62-63 of which are attached hereto as Appendix A.  aa. “Related Party” has the meaning given such term inSection 2.  bb. “Retail Trade” shall mean a Third Party that will sella Licensed Product directly to the public (“Retailer”), and anydistributors of such Licensed Product to the retail trade that do not packageor repackage such Licensed Product and that do not sell such Licensed Productto any entity other than a Retailer.  cc. “Sublicensee” shall mean a person or entity to whomMutual grants a single sublicense pursuant to Section 4.  dd. “Supply Agreement” has the meaning given such term inSection 6.  ee. “Territory” shall mean the United States of America andits territories, commonwealths and possessions, including without limitationthe Commonwealth of Puerto Rico and the District of Columbia.
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 ff. “Third Party” shall mean any person or entity otherthan Adams and Mutual or their respective Affiliates.  gg. “Third Party Launch Notice” has the meaning given suchterm in Section 5(b).  hh. “Third Party Formulation” shall mean anextended-release pharmaceutical formulation, other than the Licensed Products,that is bioequivalent to an Adams Guaifenesin Product or bioequivalent to anyother Adams’ product containing guaifenesin.     2. Upon the terms and subject to the conditions of this Agreement, in consideration of themutual execution of this Agreement and the mutual agreement to be legally bound by the termshereof, each Party, on behalf of itself and its Affiliates, directors, officers, employees, agents,representatives, heirs, assigns, predecessors or successors (“Related Parties”), herebyreleases, acquits and forever discharges the other Party and its Related Parties from any and allLosses arising out of, derived from, predicated upon or relating to the infringement of the AdamsPatent or the Reexamination by the Licensed Products, or the actions underlying the Lawsuits;provided, however, that nothing in this Agreement shall prevent or impair the rightof either Party to bring a Proceeding in state or federal courts located in the Eastern District ofPennsylvania for a breach of this Agreement (including, without limitation, any claim forinfringement of any intellectual property based upon activities that are not the subject of thelicense grants hereunder) or any representation, warranty or covenant herein or therein. TheParties agree to the entry of a Consent Dismissal Without Prejudice in the Lawsuits, which providesthat each Party shall bear its own costs of suit and attorneys’ fees. To effectuate thisprovision, promptly following the execution of this Agreement, the Parties shall cause the ConsentDismissal Without Prejudice attached hereto as Appendix B (each Party acknowledging that theapproval of the Court is required in order to make such Consent Dismissal Without Prejudiceeffective) to be filed with the District Court, and shall take all other necessary actions toobtain the settlement and dismissal of the Lawsuits.     3. Each Party acknowledges and agrees that: (a) It may have sustained Losses arising out of, derived from,predicated upon or relating to the infringement of the Adams Patent or theReexamination by the Licensed Products, or the actions underlying the Lawsuits,that are presently unknown and unsuspected, and that such actions might giverise to such Losses in the future. Nevertheless, each Party acknowledges andagrees that this Agreement has been negotiated and agreed upon, notwithstandingthe existence of such possible Losses, all of which have been hereby releasedunder Section 2 hereof.  (b) If any fact relating to this Agreement or the Lawsuits and nowbelieved to be true is found hereafter to be other than, or different from,that which is now believed, each Party expressly assumes the risk of suchdifference in fact and agrees that this Agreement shall be, and will remain,effective 
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   notwithstanding any such difference in fact, subject to each Party’sright to bring a Proceeding for a breach of any representation or warrantyherein.     (c) This Agreement may be pleaded as a full and complete defenseto, and used as a basis for injunction against, any Proceeding that may beinstituted, prosecuted or attempted in breach hereof.     4. (a) Adams hereby grants to Mutual a non-exclusive, royalty-free, perpetual and irrevocablelicense under the Licensed Patents (the “License”) to make, have made, sell or offer forsale to the Retail Trade, use and import each Licensed Product commencing on or after theapplicable Marketing License Effective Date for such Licensed Product (as defined below in Section5). For clarity, the License includes, without limitation, the right of Mutual or one of itsAffiliates to (i) make, use, import and have made reasonable launch quantities of each LicensedProduct up to six (6) months prior to the applicable Marketing License Effective Date, and (ii)sell or offer for sale, but not ship, reasonable launch quantities of each Licensed Product up toone (1) month prior to the applicable Marketing License Effective Date.     (b) The License includes the right to grant sublicenses under the License to (i) any RelatedParty for any purpose, and (ii) a single Third Party solely for the purpose of selling or offeringfor sale to the Retail Trade. If Mutual sublicenses any of its rights under the License withrespect to a Licensed Product to a Third Party, Mutual agrees that it and its Affiliates will notsell or offer for sale such Licensed Product. For clarity, only one of Mutual and its Affiliates,on the one hand, or a single Sublicensee, on the other hand, may sell to the Retail Trade pursuantto this paragraph.     5. As to each Licensed Product, the “Marketing License Effective Date” shall bedefined as follows: (a) *Mutual 600 mg Guaifenesin Product*: Subject to Section 5(b)below, the Marketing License Effective Date for the Mutual 600 mg GuaifenesinProduct shall be the later of (i) July 1, 2012 or (ii) the date Mutual obtainsFDA approval to market such Licensed Product.  (b) *All Licensed Products*: Mutual shall provide Adams noticewithin five (5) business days if it obtains final FDA approval for any LicensedProduct. If Mutual has obtained FDA approval of a Licensed Product and hasnotified Adams of that approval, then Adams shall notify Mutual promptly inwriting if it reasonably believes that a particular Third Party likely willcommence the lawful sale of a Third Party Formulation corresponding to suchLicensed Product in the Territory, and shall include in such notice (a“Third Party Launch Notice”) Adams’ reasonable, good faith estimate ofthe first lawful commercial sale of such Third Party Formulation(“Notice Date”). Mutual shall notify Adams in writing if Mutualreasonably believes that a particular Third Party will commence the lawfulsale of a particular Third Party Formulation, and shall include in suchnotice Mutual’s reasonable, good faith estimate of such commencement date.
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   Mutual shall not have the right to set the Notice Date. If Adams, aftersending a Third Party Launch Notice, subsequently learns of new information,it may amend such Third Party Launch Notice; provided,however, that Adams may not amend a Third Party Launch Notice tochange the Notice Date in such Third Party Launch Notice at any time afterthe date which is ninety (90) days prior to such Notice Date.  (i) If Mutual obtains approval from FDA to market aLicensed Product and receives a corresponding Third Party Launch Notice,then the Marketing License Effective Date for such Licensed Product shallbe the date that is sixty (60) days prior to the Notice Date in such ThirdParty Launch Notice; provided, however, that if a Third Party launches acorresponding Third Party Formulation and it and all other Third Partiesselling a corresponding Third Party Formulation are subsequently enjoinedby a court with appropriate jurisdiction in a final, non-appealablejudgment from selling their respective corresponding Third PartyFormulations in the Territory, then Mutual shall cease selling suchLicensed Product until a Third Party commences or re-commences the lawfulsale of a corresponding Third Party Formulation in the Territory.    If the actual date of first lawful commercial sale of a formulationcorresponding to the Licensed Product in such Third Party Launch Notice(“Launch Date”) by (x) a Third Party or (y) Adams or its Affiliatesunder a private label, a store brand name or a genericized brand name usedfor such corresponding Third Party Formulation, then:(A) if such Launch Date occurs prior to the Notice Date but *after*the MarketingLicense Effective Date, then Adams shall pay Mutual an amount equal to tenpercent (10%) of the aggregate IRI Sales of Adams, its Affiliates and licensees(other than licensees under this Agreement) of the Adams Guaifenesin Productcorresponding to such Licensed Product for each day in which the period betweenthe Marketing License Effective Date and the Launch Date is less than fifty (50)days; provided, however, that if Adams fails to notify Mutual ofa Notice Date or Launch Date that Adams knows or in good faith should know islikely to occur, then Adams shall pay Mutual an amount equal to the Gross Profitfor such Adams Guaifenesin Product in such period; or(B) if such Launch Date occurs prior to the Notice Date but *before*theMarketing License Effective Date or if such Launch Date occurs and Adams has notnotified Mutual of a Notice Date (in which case such Launch Dateshall be deemed the Marketing License Effective Date), Adams shall pay Mutual anamount equal to ten percent (10%) of the aggregate IRI Sales of Adams, itsAffiliates and licensees (other than licensees under this Agreement) of theAdams Guaifenesin Product corresponding to such Licensed Product for each day inwhich Mutual’s launch of its corresponding
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Licensed Product is delayed beyondthe day that is fifty (50) days prior to such Launch Date, said period not toexceed one hundred twenty (120) days in total; provided,however, that if Adams fails to notifies Mutual of a Notice Date orLaunch Date that Adams knows or in good faith should know is likely to occur,then Adams shall pay Mutual an amount equal to Adams’ Gross Profit for suchAdams Guaifenesin Product in such period; or(C) if such Launch Date occurs after the Notice Date, then Mutual shall payAdams an amount equal to ten percent (10%) of the aggregate IRI Sales of Mutual,its Affiliates and its Sublicensee of such Licensed Product during the periodcommencing seventy (70) days after the Marketing License Effective Date throughsuch Launch Date. Mutual’s IRI Sales shall be calculated starting from the dateof the first report by IRI of sales more than $25,000, for a period of the timeequaling the number of days between 70 days after the Marketing LicenseEffective Date and the Launch Date. Mutual agrees to provide all requiredaccount information necessary to track Mutual’s IRI data.Payments from Adams to Mutual under this Section 5(b)(i) shall be due withinsixty (60) days after the end of the applicable payment calculation perioddescribed in clause (A) or (B) above, as applicable, together with a writtenreport containing information in sufficient detail to permit confirmation of theaccuracy of the payment made. Payments from Mutual to Adams described inclause (C) above shall be made quarterly as set forth in Section 6(c).Neither Party shall be entitled to any other money damages resulting from aLaunch Date failing to occur on the Notice Date or failure to provide a NoticeDate, however, this liquidated damages provision shall not affect theavailability of any equitable relief to which either Party might otherwise beentitled.(ii) If Mutual does not obtain approval from FDA to market a Licensed Productprior to the Launch Date of a corresponding Third Party Formulation or AdamsGuaifenesin Product, then the Marketing License Effective Date shall be the dateon which Mutual obtains FDA approval to market such Licensed Productcorresponding to such FDA-approved Third Party Formulation. Mutual, in its solediscretion, may purchase from Adams and Adams shall supply, pursuant to theterms of Section 6 of this Agreement, tablets of the Adams Guaifenesin Productcorresponding to such Third Party Formulation, for sale by Mutual, itsAffiliates or a single independent Sublicensee to the Retail Trade under aprivate label or a brand name other than Adams’ brand names for the AdamsGuaifenesin Product, in the Territorycommencing no earlier than ninety (90) days after the corresponding Launch Date.To the extent that Mutual purchases tablets of Adams Guaifenesin Productpursuant to the Supply Agreement, Adams grants Mutual a non-exclusive, perpetualand irrevocable right to sell and offer for sale to the Retail Trade suchtablets supplied by Adams under the Licensed Patents in the
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Territory and agrees, in a timely manner, to take all steps with respect to the New DrugApplications and/or other marketing authorizations for such Adams GuaifenesinProduct that are necessary in order to manufacture and supply such AdamsGuaifeneisin Product tablets to Mutual hereunder and under the Supply Agreementand to ensure that Mutual and its Affiliates or its single Sublicensee, as thecase may be, is authorized to sell such Adams Guaifenesin Product. Only Mutualand its Affiliates, on the one hand, or a single Sublicensee, on the other hand,may sell to the Retail Trade pursuant to this paragraph.     6. (a) Mutual shall notify Adams in writing of its election to purchase tablets of AdamsGuaifenesin Product pursuant to Section 5(b)(ii), and the Parties shall promptly execute a supplyagreement in the form attached hereto as Appendix C (“Supply Agreement”). The tabletssupplied by Adams shall be white and/or in such other reasonable mono-colored configurationmutually agreeable to the Parties, and shall be manufactured using Adams’ and its Affiliates’bilayered technology.     (b) In consideration for such supply, Mutual shall pay Adams a supply price equal to the sumof the Fully Allocated Cost Basis for such tablets, and a royalty of ten percent (10%) of the NetSales of Mutual, its Affiliates or its Sublicensee of such Adams Guaifenesin Product in theTerritory. Only one royalty shall be due with respect to the same unit of Adams GuaifenesinProduct. No royalties shall be due upon the sale or other transfer among Mutual, its Affiliatesand a single Sublicensee, but in such cases the royalty shall be due and calculated upon such NetSales to the first independent Third Party in the Retail Trade.     (c) Within sixty (60) days after the end of each calendar quarter after the First CommercialSale of an Adams Guaifenesin Product by Mutual, Mutual shall deliver to Adams a written reportcontaining the following information for the prior calendar quarter, in sufficient detail to permitconfirmation of the accuracy of the royalty payment made: (i) the gross sales invoiced for suchAdams Guaifenesin Product by Mutual and its Affiliates or its single Sublicensee, (ii) acalculation of Net Sales of such Adams Guaifenesin Product that is sold by Mutual, its Affiliatesand its single Sublicensee; (iii) the amount of taxes, if any, withheld to comply with applicablelaw; and (iv) a calculation of payments due to Adams with respect to the foregoing. Concurrentwith these reports, Mutual shall remit to Adams any payment due for the applicable calendarquarter. All such reports shall be considered Confidential Information of Mutual and shall bemaintained in confidence by Adams pursuant to Section 20.     (d) If Mutual concludes that tax withholdings under the applicable law are required withrespect to payments to Adams, Mutual shall withhold the required amount and pay it to theappropriate governmental authority.     (e) All dollar ($) amounts specified in this Agreement are United States dollar amounts andall payments to be made under this Agreement shall be made in United States dollars and shall bepaid by bank wire transfer in immediately available funds to such bank account in the United Statesas may be designated in writing by the receiving Party from time to time.
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     (f) Mutual and its single Sublicensee (as applicable) shall keep correct and complete books ofaccounts and other records containing all information and data which may be necessary to ascertainand verify the royalties and other amounts payable by Mutual to Adams under Sections 5(b)(i) and6(b) of this Agreement. Adams shall keep correct and complete books of accounts and other recordscontaining all information and data which may be necessary to ascertain and verify the amountspayable by Adams to Mutual under Section 5(b)(i) of this Agreement. During the term of thisAgreement and for a period of two (2) years following its termination or expiration, each Party(the “Payee”) shall have the right from time to time (at its expense) to have anindependent certified public accountant inspect such books and records of the other Party (the“Payor”), its Affiliates, and its single Sublicensee (if applicable). Such inspection shallbe conducted after reasonable prior notice by the Payee to the Payor during the Payor’s ordinarybusiness hours and shall not be more frequent than once during each calendar year. Any suchindependent certified accountant shall be reasonably acceptable to the Payor, shall execute thePayor’s standard form of confidentiality agreement, and shall be permitted to share with the Payeesolely its findings with respect to the accuracy of the royalties or other amounts reported aspayable under this Agreement. If such accounting determines that the Payor paid the Payee lessthan the amount properly due in respect of any period, then the Payor shall promptly reimburse thePayee such amount and if the amount underpaid exceeds five percent (5%) of the amount actually duethen the Payor shall also reimburse the Payee for the costs of such audit.     (g) The Payor shall pay interest to the Payee on the aggregate amount of any payments that arenot paid on or before the date such payments are due under this Agreement at a rate per annum equalto the lesser of one percent (1%) per month or the highest rate permitted by applicable law,calculated on the number of days such payments are paid after the date such payments are due andcompounded monthly.     7. Mutual hereby admits that the products described in the Mutual ANDA would infringe claims24-28, 31-34 and 40 of the Adams Patent and claims 62-63 (Appendix A) from the Reexamination in theTerritory, and that if Mutual were to make, use, offer for sale, or sell a Licensed Product in theTerritory, such product would infringe said claims of the Adams Patent and the Reexamination,respectively. Notwithstanding the above, nothing in this Agreement shall be construed or cited asan admission of infringement (a) by any product other than a Licensed Product or (b) of any foreignpatent or currently pending patent applications.     8. Mutual hereby admits that the Adams Patent and claims issuing from the Reexamination arevalid and enforceable in the Territory and agrees not to challenge the validity or enforceabilityof the Adams Patent in the Territory on any grounds in the future. Notwithstanding the above,nothing in this Agreement shall (a) be construed or cited as an admission of validity orenforceability of any foreign patent or currently pending patentapplications or (b) prohibit Mutual from asserting that a non-Licensed Product does notinfringe the Adams Patent or claims issuing from the Reexamination on the grounds that suchnon-Licensed Product is identical to prior art not currently known to Mutual and/or its counsel.Prior art currently known to Mutual and/or its counsel includes, but is not limited to, all priorart cited: (i) in the Lawsuit, (ii) in the Adams patent, (iii) in the Reexamination, (iv) in U.S.Patent
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No. 6,955,821 and (v) in any divisional, continuation, or continuation in part of U.S.Application No. 09/559,542 that is currently publicly available, or any other prior art that iscurrently in the possession of Mutual or its counsel.     9. In the event Mutual breaches this Agreement by launching a Licensed Product prior to itsMarketing License Effective Date, Mutual hereby consents to the entry of a preliminary injunctionprohibiting such sales.     10. If Mutual files a new ANDA and provides a certification letter pursuant to 21 U.S.C. §355(j)(2)(B) representing that the new formulation is a Licensed Product, then all references inthis Agreement to the Mutual ANDA shall automatically include such new ANDA. Nevertheless, nothingin this Agreement shall prohibit Adams from commencing a patent infringement suit against Mutualbased upon a new ANDA seeking FDA approval of Bilayered Products.     11. In accordance with 35 U.S.C. § 287, Mutual agrees to affix or provide the proper patentmarkings to all Licensed Products offered for sale or sold under this Agreement.     12. Mutual acknowledges and agrees that, except as otherwise expressly stated in thisAgreement, nothing in this Agreement gives Mutual any rights: (a) with respect to any LicensedProduct outside the Territory; (b) with respect to any product other than a Licensed Product; or(c) to make, use, import, offer for sale, market or sell any generic version of any Adamsguaifenesin product at any time prior to the applicable Marketing License Effective Date.     13. Adams hereby agrees not to interfere with or attempt to influence in any way FDA’s reviewof Mutual’s, Mutual’s Affiliates or its single Sublicensee’s ANDAs for Licensed Products or tocomment on such ANDAs to FDA. To the extent Mutual continues to seek FDA approval of the MutualANDA, Mutual hereby confirms its prior statement to FDA that it intends to submit to FDA’s Officeof Generic Drugs all bioequivalence data that Mutual submitted in NDA 21-950 and all correspondencebetween FDA and Mutual regarding NDA 21-950. If Mutual decides to withdraw its ANDA, Mutual willdo so within five (5) days of making that decision. If Mutual decides to pursue approval of theMutual ANDA or refile the Mutual ANDA, Mutual affirms that it will submit the foregoing biostudiesand correspondence to FDA’s Office of Generic Drugs in sufficient time to allow review of thisinformation prior to approval of the Mutual ANDA.     14. Adams hereby covenants not to sue Mutual for patent infringement for making, using,selling or offering for sale Licensed Products, including without limitation a suit under 35 U.S.C.§ 271(e)(2) in response to the filing of an ANDA by Mutual, except if making, using, selling oroffering for sale Licensed Products is a violation or breach of the Agreement, Adams may initiatesuit against Mutual.     15. Each Party hereto represents and warrants to the other Party that, as of the date hereof:
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 (a) this Agreement is a legal, valid and binding obligation of thewarranting Party, enforceable against such Party in accordance with its terms,except as enforcement may be limited by bankruptcy, insolvency, reorganization,moratorium or similar laws affecting creditors’ rights generally or by generalprinciples of equity;  (b) the warranting Party is not subject to any judgment, order,injunction, decree or award of any court, administrative agency or governmentalbody that would or might interfere with its performance of any of its materialobligations hereunder; and  (c) the warranting Party has full power and authority to enter intoand perform its obligations under this Agreement in accordance with its terms.     16. Adams represents and warrants that, as of the date hereof, it (i) presently owns, licensesor has the legal rights to the Adams Patent and NDA No. 21-282, (ii) has the legal right to grantthe License and other rights granted to Mutual hereunder, (iii) has the right to settle theLawsuits, and (iv) is required to pay a royalty in respect of the manufacture of Adams GuaifenesinProducts of not more than $500,000 dollars annually. Mutual represents and warrants that it hasthe right to settle the Lawsuits. Mutual further represents and warrants that, as of the datehereof, Mutual Pharmaceutical Company, Inc. presently owns and has the legal rights to the MutualANDA.     17. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONSOR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,WARRANTIES OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE.     18. Neither Party hereto may assign any of its rights or obligations under this Agreementwithout the prior written consent of the other Party, except to an Affiliate, or inconnection with a merger, reorganization, change of control or sale of all or substantially all ofthe business of such Party to which this Agreement relates. Any purported assignment in violationof the foregoing shall be null and void *ab initio*and of no force or effect. No assignment of thisAgreement will relieve the assigning Party from any of its obligations hereunder. In the event ofa permitted assignment, this Agreement shall be binding upon and inure solely to the benefit of theParties and their respective successors and permitted assigns.     19. For avoidance of doubt, all rights and licenses granted under or pursuant to any sectionof this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of theU.S. Bankruptcy Code (the “Bankruptcy Code”), licenses of “intellectual property” asdefined under the Bankruptcy Code. The Parties shall retain and may fully exercise all of theirrespective rights and elections under the Bankruptcy Code; provided, however, thatshould Adams become a party to a bankruptcy proceeding and such proceeding is not dismissed withinthirty (30) days then, to the extent permitted by law, this Agreement and the licenses granted byAdams hereunder shall be adopted by any bankruptcy trustee or relevant Third Party charged with thedisposition of same, and shall not be rejected by same, it being the Parties’ intent that, in
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such event, Mutual and its Affiliates and single Sublicensee shall be entitled to retain the rightsgranted to them hereunder by Adams.     20. (a) With respect to the Confidential Information pertaining to thesubject matter of this Agreement that was exchanged between the Parties priorto the Effective Date of the Agreement, the Protective Order entered in theLawsuit shall govern; provided, however, that each Party agrees that withinfive (5) years after the Effective Date, unless subject to litigation, it shallreturn to the other Party all documentation or other tangible evidence orembodiment of Confidential Information belonging to the other Party that it orits outside counsel has retained pursuant to the Protective Order and not touse same, unless otherwise agreed in writing. With respect to ConfidentialInformation exchanged after the Effective Date of the Agreement, each Partyshall keep confidential and not disclose to others or use for any purpose,other than as authorized by this Agreement or the Supply Agreement, all suchConfidential Information that was provided to it by the other Party or itsAffiliates or Sublicensee or their respective employees or representatives. Forpurposes of this Agreement, “Confidential Information” means proprietary orconfidential know-how, trade secrets, formulae, data, inventions, technologyand other information of such Party. To the extent a Party considersinformation “Confidential” under this Agreement, it shall be so identified andmarked, or if provided orally shall be memorialized in writing and identifiedas “Confidential” within thirty (30) days after disclosure. This Section shallnot apply to any Confidential Information that: (i) was already known to therecipient at the time of disclosure, as reasonably documented by writtenrecords; (ii) is or later becomes public knowledge through no fault of therecipient; (iii) is received from a Third Party having the lawful right todisclose the information; or (iv) is independently developed by employees ofthe recipient without access to the disclosing Party’s ConfidentialInformation. A Party may disclose Confidential Information of the other Partyto (x) its Affiliates and Sublicensee, and to its and their directors,employees, consultants and agents, in each case who have a specific need toknow such Confidential Information and who are bound by a like obligation ofconfidentiality and restriction on use, and (y) to the extent such disclosureis required to comply with applicable law or to defend or prosecute litigation;provided, however, that the receiving Party provides priorwritten notice of such disclosure pursuant to clause (y) to the disclosingParty and takes reasonable an lawful actions to avoid or minimize the degree ofsuch disclosure, including upon the disclosingParty’s request, seeking confidential treatment of such ConfidentialInformation. Upon the expiration or termination of this Agreement for anyreason, each Party agrees, except as otherwise provided in this Agreement,to return within thirty (30) days to the other Party all documentation or
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   other tangible evidence or embodiment of Confidential Information belongingto the other Party and not to use same, unless otherwise agreed in writing.     (b) Prior to the execution of this Agreement by both Parties theParties shall agree in writing upon one or more press releases to be issuedseparately by the Parties publicizing the execution of this Agreement, and anyParty holding a press conference regarding this Agreement shall provide a copyof the transcript sufficiently in advance to provide an opportunity for theother Party to provide comments. Each Party agrees that it will not makedisparaging public comments about the other Party in connection with thisAgreement, the Lawsuits or the Mutual ANDA. Mutual affirms that it does notcurrently intend to send out a press release publicizing the execution of thisAgreement. Except as consistent with press releases mutually agreed by theParties, and information disclosed in this Agreement as provided to thepertinent regulatory authorities such as the Securities and ExchangeCommission, no public announcement or other disclosure to Third Partiesconcerning the existence of or terms of this Agreement shall be made, eitherdirectly or indirectly, by either Party, without first obtaining the writtenapproval of the other Party and agreement upon the nature, text and timing ofsuch announcement or disclosure; provided, however, eitherParty shall have the right to make any such public announcement or otherdisclosure required by law after such Party has provided to the other Party acopy of such announcement or disclosure and a reasonable opportunity to commentthereon. Each Party agrees that it shall cooperate fully with the other withrespect to all disclosures regarding this Agreement to the Securities ExchangeCommission and any other governmental or regulatory agencies, includingrequests for confidential treatment of proprietary information of either Partyincluded in any such disclosure.     21. The Parties each covenant that, at their own expense: (a) they shall use their respective reasonable efforts to resolveany and all objections that may be asserted with respect to this Agreementunder any applicable law;  (b) they shall use their respective reasonable efforts to obtainapproval of this Agreement under all applicable laws and shall make allrequired filings with all governmental authorities, including withoutlimitation the reporting of this Agreement to the Federal Trade Commission andthe Department of Justice pursuant to Section 1112 of Title XI of the MedicarePrescription Drug Improvement and Modernization Act of 2003;  (c) they shall use their respective reasonable efforts to complywith and terminate any investigation or inquiry regarding the Agreement by any
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   government authority, including in exchanging information, permittingreasonable access to Adams’ and Mutual’s documents, officials and data inconnection with receiving approvals of this Agreement by all governmentalauthorities;  (d) if any administrative, judicial or legislative action orproceeding is instituted (or threatened to be instituted) challenging thetransaction contemplated by this Agreement as violative of any applicable law,Adams and Mutual will render reasonable assistance to contest and resist anysuch action or proceeding, and to have vacated, lifted, reversed or overturnedany decree, judgment, injunction or other order (whether temporary, preliminaryor permanent) that is in effect and that challenges this Agreement, including,without limitation, by pursuing all reasonable avenues of administrative andjudicial appeal; and  (e) they shall promptly inform each other of any materialcommunication made to, or received by such Party from any governmentalauthority regarding this Agreement.     22. The relationship between the Parties created by this Agreement is one of independentcontractors. Neither Adams nor Mutual shall have the authority to make any statements,representations or commitments of any kind, or to take any action, which shall be binding on theother, without the prior consent of the other Party. All persons employed by a Party shall beemployees of such Party and not of the other Party and all costs and obligations incurred by reasonof any such employment shall be for the account and expense of such Party.     23. Should this Agreement be rendered null and void for any reason, Adams agrees not to useany of the stipulations contained herein or attached hereto in any subsequent litigation.     24. Any representation, warranty, covenant, term or condition of this Agreement which maylegally be waived, may be waived, or the time of performance thereof extended, at any time by theParty hereto entitled to the benefit thereof, and any term, condition or covenant (including,without limitation, the period during which any condition is to be satisfied or any obligationperformed) may be amended by the Parties hereto at any time. Any such waiver, extension oramendment by a Party shall be evidenced by an instrument in writing executed by an officer of suchParty authorized to execute waivers, extensions or amendments. No waiver by any Party, whetherexpress or implied, of its rights under any provision of this Agreement or otherwise shallconstitute a waiver of such Party’s rights under such provisions at any other time or a waiver ofsuch Party’s rights under any other provision of this Agreement. No failure by any Party to takeany action against any breach of this Agreement or default by the other Party shall constitute awaiver of the non-breaching Party’s right to enforce any provision of this Agreementor to take action against such breach or default or any subsequent breach or default by suchother Party.     25. The Parties agree and acknowledge that this Agreement is the product of both Parties andshall not be construed against either of the Parties other than in accordance with its
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terms. The Parties acknowledge that each has been advised by counsel during the course of negotiation of thisAgreement and, therefore, that this Agreement shall be interpreted without regard to anypresumption or rule requiring construction against the Party causing this Agreement to be drafted.     26. The Parties agree that there is no adequate remedy at law for the damage which eitherParty might sustain for breach of this Agreement and, accordingly, each Party shall be entitled, asits option, to specific performance, in addition to any other remedy at law or in equity, toenforce the terms hereof.     27. All notices, requests, consents and other communications required or permitted under thisAgreement shall be in writing and shall be (as elected by the Party giving such notice) handdelivered by messenger or courier service, or mailed by registered or certified mail (postageprepaid), return receipt requested, or delivered by overnight delivery service, addressed to:In the case of Adams:Adams Respiratory Therapeutics, Inc.