**Exhibit 10.102**Confidential treatment has been requested for portions of this exhibit. The copy filedherewith omits the information subject to the confidentiality request. Omissions are designated as[***]. A complete version of this exhibit has been filed separately with the Securities andExchange Commission.**DISTRIBUTION AGREEMENT**     DISTRIBUTION AGREEMENT, dated as of May 2, 2005, by and between Amphastar Pharmaceuticals,Inc., a Delaware corporation (“Seller”) and Andrx Pharmaceuticals, Inc., a Florida corporation(“Purchaser”).     WHEREAS, Seller desires to appoint Purchaser as Seller’s exclusive distributor of the Productto Purchaser Customers in the Territory and Purchaser desires to accept such appointment, allpursuant to the terms of this Agreement.     NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements hereinafterset forth, the parties hereto agree as follows:**ARTICLE 1****DEFINITIONS**     As used throughout this Agreement and any exhibits, schedules and attachments hereto, each ofthe following terms shall have the respective meaning set forth below:     **1.1 “Act”**means the Federal Food, Drug, and Cosmetic Act, as amended.     **1.2 “Adverse Event”**means any adverse event associated with the use of the Product in humans,whether or not considered drug-related, including an adverse event occurring in the course of theuse of the Product in professional practice, in studies, in investigations or in tests or anadverse event occurring from Product overdose (whether accidental or intentional), from Productabuse, or from Product withdrawal, as well as any toxicity, sensitivity, failure of expectedpharmacological action, or laboratory abnormality that is, or is thought by the reporter thereof tobe, serious or associated with relevant clinical signs or symptoms.     **1.3 “Adverse Resolution”**means any resolution of the Lawsuit, whether by settlement, summaryjudgment or trial court decision in the U.S. District Court, or as a result of any appeal,subsequent review or reconsideration of such summary judgment or trial court decision, thatprevents, enjoins, materially restricts or imposes royalties on sales of or otherwise makescommercially unreasonable the manufacture, use, sale or offer to sell of the Product to PurchaserCustomers in the Territory.     **1.4 “Affiliate”**of a party means any Person directly or indirectly controlled by, controllingor under common control with such party. “Control” means the legal power to direct or
 

 
cause the direction of the general management or policies of a Person through more than fiftypercent (50%) of the ownership of voting securities, by contract or by other means.     **1.5 “ANDA”**means an Abbreviated New Drug Application filed with the FDA and any amendments orsupplements thereto.     **1.6 “Anda”**shall have the meaning given in Section 2.2.     **1.7 “Applicable Laws”**means all applicable laws, rules, and regulations that apply to thedevelopment, manufacture, supply, marketing, sale or distribution of the Product in the Territory,or the performance of either party’s obligations under this Agreement, including the Act, cGMP andother current regulations promulgated by the FDA or any other governmental agency.     **1.8 “At-Risk Launch”**shall have the meaning given in Section 2.3.     **1.9 “At-Risk Launch Notice”**shall have the meaning given in Section 2.3.     **1.10 “Authorized Generic Product”**means a therapeutically equivalent, bioequivalent andlegally substitutable generic version of the brand-name product Lovenox® (including the brand nameproduct sold as a generic) that is sold and distributed in the Territory by any one or more ofAventis Pharma S.A., Aventis Pharmaceuticals, Inc., their respective Affiliates, successors orassigns and/or licensees of any of the foregoing.     **1.11 “Bankruptcy Code”**shall have the meaning given in Section 8.2.     **1.12 “cGMP”**means the current Good Manufacturing Practices regulations of the FDA (as ineffect from time to time) in 21 C.F.R. pts. 210 and 211.     **1.13 “Commercially Reasonable Efforts”**means, with respect to each party, efforts andresources normally used by such party to, in the case of Seller, develop, manufacture, package andsupply or, in the case of Purchaser, market, sell and distribute, a generic pharmaceutical productowned by it or to which it has rights, which is of similar overall market potential at a similarstage in its product lifecycle, taking into account, inter alia, the competitiveness of themarketplace, the proprietary position of the product, the profitability of the product and otherrelevant factors. The parties acknowledge that the level of effort and resources may change atdifferent times during the product life cycle of the Product.     **1.14 “Compensatory Payments”**shall have the meaning given in Section 2.3.     **1.15 “Competitive Product”**means, other than the Product or an Authorized Generic Product, atherapeutically equivalent, bioequivalent and legally substitutable generic version of thebrand-name product Lovenox®, which generic version is in the same dosage and delivery form, has thesame active ingredient and the same strength and is for the same indication as the Product, that issold and distributed in commercial quantities in the Territory by any Person, other than Purchaseror its Affiliates, licensees or assigns.     **1.16 “Confidential Information”**shall have the meaning given in Article 14.     **1.17 “Damages”**shall have the meaning given in Section 17.1.
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     **1.18 “Effective Date”**means the date of this Agreement.     **1.19 “Favorable Resolution”**means a resolution of the Lawsuit, whether by settlement, summaryjudgment, trial court decision in the U.S. District Court, or otherwise, that does not prevent,enjoin, materially restrict or impose royalties on sales of or otherwise make commerciallyunreasonable the manufacture, use, sale or offer to sell of the Product to Purchaser Customers inthe Territory, in each case irrespective of any rights of appeal, subsequent review orreconsideration of the resolution or of the outcome of such appeal, review or reconsideration.     **1.20 “FDA”**means the U.S. Food and Drug Administration, and any successor or replacementagency thereto.     **1.21 “Final Favorable Resolution”**means a Favorable Resolution that is not subject to anyrights of appeal, subsequent review or reconsideration by the applicable governmental authorityhaving competent jurisdiction over the Lawsuit.     **1.22 “First Commercial Sale”**means, as the context requires, the first date on which Purchasersells (i.e., the date of shipment) the Product in commercial quantities to a third party, or thefirst date on which Seller sells (i.e., the date of shipment) the Product in commercial quantitiesto a third party pursuant to a Seller Launch.     **1.23 “Forecast”**shall have the meaning given in Section 5.2.     **1.24 “Force Majeure Event”**shall have the meaning given in Article 12.     **1.25 “GAAP”**means U.S. generally accepted accounting principles.     **1.26 “Gross Profit”**means Net Sales of Purchaser from sales of Product during a calendarquarter less the aggregate Transfer Price paid for such Product. In the event for any calendarquarter the above calculation results in a negative number, “Gross Profit” shall be deemed zero forsuch calendar quarter.     **1.27 “Gross Profit Split”**shall have the meaning given in Section 4.2.     **1.28 “Initial Purchase Order”**shall have the meaning given in Section 5.1.     **1.29 “Label”, “Labeled” or “Labeling”**means all labels and other written, printed or graphicmatter upon (i) any packaging, container or wrapper used with the Product, or (ii) any writtenmaterial accompanying the Product, including package inserts; or, as the context requires, the actof applying and/or using the same.     **1.30 “Labor Costs”**shall have the meaning given in Section 4.1     **1.31 “Lawsuit”**means (i) the lawsuit captioned Aventis Pharma S.A. and AventisPharmaceuticals, Inc. v. Amphastar Pharmaceuticals, Inc. and Teva Pharmaceuticals USA, Inc. underCase No. 03-CV-887 RT (SGLx) in the U.S. District Court in the Central District of CaliforniaEastern Division and (ii) any related or subsequent U.S. trial court action pertaining to the samesubject matter as the lawsuit described in clause (i) above, brought by Aventis Pharma S.A. and
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Aventis Pharmaceuticals, Inc. against Seller prior to Seller delivering a Launch Notice,seeking to obtain a Adverse Resolution.     **1.32 “Launch Notice”**shall have the meaning given in Section 2.3.     **1.33 “Launch Quantities”**shall have the meaning given in Section 5.1.     **1.34 “Maximum Compensatory Payments”**shall have the meaning given in Section 2.3.     **1.35 “Maximum Annual Product Units”**shall have the meaning given in Section 5.6.     **1.36 “Minimum Annual Product Units”**shall have the meaning given in Section 8.4.     **1.37 “Net Sales”**means, with respect to the Product, the gross revenues derived from the saleof the Product by Purchaser or, with respect to the determination of the Compensatory Payments, bySeller, and their respective Affiliates, licensees and assignees to independent third parties,minus normal and customary (i) early pay incentives (i.e., cash discounts), (ii) trade discounts,quantity discounts, trade rebates, chargebacks, governmental rebates, such as Medicaid, retroactiveprice adjustments (i.e., shelf stock adjustments) and cash incentive payments, (i.e., slottingallowances), (iii) Product returns, (iv) freight (inbound and outbound), (v) marketing allowances,(vi) bad debt allowance which shall be deemed to be [***] of Net Sales for the first twelve monthsafter First Commercial Sale and [***] of Net Sales for periods thereafter and (vii) other normaland customary deductions utilized to calculate net sales, in each case to the extent applicable tothe sale of such Product. Marketing allowances shall (i) in the case of sales by Purchaser, bethe actual marketing expenses but not in excess of [***] of the applicable Net Sales and (ii) inthe case of sales by Anda, be deemed to be [***] of the applicable Anda Net Sales of Product. Theelements of Net Sales as described above shall be determined in accordance with GAAP, applied on abasis consistent with the annual audited financial statements of Purchaser’s parent corporation orSeller, as the context requires.     **1.38 “Non-At-Risk Launch”**shall have the meaning given in Section 2.3.     **1.39 “Overdue Interest Amount”**means the prime rate of interest quoted as such in The WallStreet Journal on the first business day of each month during which an amount is overdue under thisAgreement, plus 5%, calculated on an annual basis, not to exceed the maximum rate permitted byApplicable Law.     **1.40 “Packaging”**means all primary and/or bulk (as applicable) containers, Labels, shippingcases or any other like matter used in packaging or accompanying the Product; or as the contextrequires, the act of applying and/or using the same.     **1.41 “Person”**means an individual, corporation, partnership, limited liability company orother entity.     **1.42 “Product”**means Seller’s generic version of the enoxaparin sodium injectable product, in30 mg, 40 mg, 60 mg, 80 mg, 100 mg, 120 mg, and/or 150 mg strengths, to the extent [***]   Confidential Treatment Requested.
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approved under ANDA 76-684, that is therapeutically equivalent and bioequivalent to, andlegally substitutable for, the brand-name product Lovenox®.     **1.43 “Product Liability Claims”**means any claim, action or proceeding based on personalinjury, death or other similar adverse effect to humans caused by (or alleged to be caused by) useof the Product.     **1.44 “Product Warranty”**shall have the meaning given in Section 16.1.     **1.45 “Purchase Orders”**shall have the meaning given in Section 5.3.     **1.46 “Purchaser Customers”**means, in each case to the extent located in the Territory, (a)chain retail pharmacies and stores, (b) independent retail pharmacies, (c) grocery and food stores,(d) mail order pharmacies, (e) certain other types of customers not included within items (a)-(d)that are pre-approved in writing by Seller pursuant to an amendment to this Agreement, and (f) drugwholesalers (solely to the extent allocated for resale to customers included in items (a)—(e)above). Notwithstanding anything herein to the contrary, Seller expressly retains all rights toall current and future customers and markets for the Product, other than the customers expresslyincluded in items (a)-(f) above; and, without limiting the foregoing and by way of clarification,Seller’s retained rights shall expressly include the right to sell Product to drug wholesalers solong as Seller does not supply, sell or distribute Product to drug wholesalers for resale to anycustomer included in items (a)-(e) above.     **1.47 “Purchaser Recall”**shall have the meaning given in Section 11.3.2.     **1.48 “Purchaser Trademarks”**shall have the meaning given in Section 6.3.     **1.49 “Raw Material Costs”**shall have the meaning given in Section 4.1.     **1.50 “Seller Launch”**shall have the meaning given in Section 2.3.     **1.51 “Specifications”**means the specifications for the composition, manufacture, Packagingand/or quality control of the Product as described in the ANDA for the Product, as the same may besupplemented from time to time as expressly provided in this Agreement.     **1.52 “Territory”**means the United States of America and its territories, including theCommonwealth of Puerto Rico.     **1.53 “Third Party Infringement Claim”**shall have the meaning given in Section 17.4.     **1.54 “Transfer Price”**shall have the meaning given in Section 4.1.     **1.55 “Unit Price”**shall have the meaning given in Section 4.1.
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**ARTICLE 2****APPOINTMENT; SUPPLY AND PURCHASE OF PRODUCT****     2.1 Appointment; Agreement to Supply; Development.**          **2.1.1**Subject to the terms and conditions of this Agreement, Seller hereby appoints Purchaseras its exclusive distributor of the Product for sale and distribution to Purchaser Customers in theTerritory, and Purchaser hereby accepts such appointment. Subject to the terms of this Agreement,Seller shall use its Commercially Reasonable Efforts to manufacture and supply to Purchaser itsrequirements of the Product for sale and distribution to Purchaser Customers in the Territory inaccordance with Purchaser’s Purchase Orders as provided herein. Seller shall not, and shall causeits Affiliates not to, manufacture or supply the Product to Purchaser Customers in the Territory.Notwithstanding anything herein to the contrary, the parties acknowledge and agree that Sellerretains all rights to develop, manufacture, supply, sell, distribute, market, promote and otherwisecommercialize, directly or through Seller’s Affiliates or third parties, Product to customers otherthan Purchaser Customers in the Territory; and without limiting the foregoing and by way ofclarification, Seller’s retained rights shall expressly include the right to sell Product to drugwholesalers or any other Persons so long as Seller shall not supply, sell or distribute Product todrug wholesalers or any other Person for resale to any customer included in items (a)-(e) ofSection 1.46.          **2.1.2**Seller hereby represents that it has filed with the FDA ANDA, File No. 76-684, for theProduct. Seller shall, at its expense, use Commercially Reasonable Efforts to prosecute the ANDAand to obtain approval from the FDA of the ANDA. Seller shall promptly upon its receipt of samedeliver to Purchaser written notice certifying that Seller has received final FDA approval of theProduct’s ANDA. The ANDA and all other regulatory approvals related to the manufacture and supplyof the Product shall be in Seller’s name and owned exclusively by Seller. In addition, Sellershall, at its expense, use Commercially Reasonable Efforts to obtain a Favorable Resolution toenable FDA approval of the Product’s ANDA and the launch of the Product in the Territory.Notwithstanding the foregoing, nothing herein shall constitute a guarantee or warranty from Sellerthat the ANDA for the Product will be approved by the FDA, or, if the Product ANDA is approved, anymarket exclusivity will be awarded, or any other regulatory approvals will be obtained by Seller orthat a Favorable Resolution will be obtained. Nothing herein shall limit Purchaser’s right toterminate this Agreement pursuant to its terms.**     2.2 Agreement to Purchase.**          **2.2.1**Subject to the terms of this Agreement, Purchaser shall purchase exclusively from Sellerall of Purchaser’s requirements for the Product for marketing, sale and distribution to PurchaserCustomers in the Territory. Purchaser shall use Commercially Reasonable Efforts to market, selland distribute the Product throughout the Territory to Purchaser Customers. Subject to theforegoing, Purchaser does not make any guaranty or warranty as to any minimum level of GrossProfits or Net Sales. Nothing herein shall limit each party’s right to terminate this Agreementpursuant to its terms, including Section 8.4. Unless otherwise consented to in writing by Seller,Purchaser shall not offer the Product as a loss leader, whether alone or in connection with anyother product or sell the Product in combination or otherwise bundle the Product with otherproducts in any fashion which decreases the revenue that would otherwise be attributable to theProduct had it not been sold as a loss leader or in combination or otherwise bundled. Subject tothe foregoing and Purchaser performing its obligations hereunder (including its obligation to useCommercially Reasonably Efforts to sell and distribute the Product), launch timing, pricing,marketing, sale and distribution and related strategy for the Product for sale and distribution toPurchaser Customers in the Territory shall be the sole responsibility of, and shall be solelycontrolled by, Purchaser.
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          **2.2.2**Purchaser shall, and shall cause its Affiliates to, sell and distribute the Product onlyto Purchaser Customers in the Territory and only in accordance with Applicable Law and theProduct’s ANDA. Purchaser shall reasonably cooperate with Seller in investigating and tracing anysales of the Product outside of the Territory or to any Persons in the Territory other thanPurchaser Customers originating from sales by Purchaser hereunder. Seller shall not, and shallcause its Affiliates not to, sell and distribute the Product to Purchaser Customers in theTerritory (provided that, by way of clarification, Seller may sell Product to drug wholesalers orany other Persons so long as Seller shall not supply, sell or distribute Product to drugwholesalers or any other Persons for resale to any customer included in items (a)-(e) of Section1.46). Seller shall reasonably cooperate with Purchaser in investigating and tracing any sales ofthe Product to any Purchaser Customers originating from sales by Seller hereunder.          **2.2.3**During the term of this Agreement and, if this Agreement is terminated by Purchaserpursuant to Section 8.4, for a period of 12 months after such termination, neither Purchaser norits Affiliates shall sell or distribute in the Territory any product that is or purports to be ageneric equivalent (i.e. bioquivalent and legally substitutable) of the LovenoxÒ brandproduct, other than the Product supplied by Seller hereunder. [***].     **2.3 Commercial Launch of the Product**.          **2.3.1 Notice of Launch.**At any time after Seller receives both (i) a Favorable Resolution(which may, but is not required to be, a Final Favorable Resolution) and (ii) FDA approval of theProduct’s ANDA and confirmation from the FDA that Seller has been awarded 180 days of “first tofile” market exclusivity in accordance with Section 505(j)(5)(B)(iv) of the Act, Seller shall beentitled to deliver to Purchaser a written notice setting forth Seller’s intention to commence thecommercial sale of the Product in the Territory. Such written notice shall be referred to hereinas an “At-Risk Launch Notice,” unless based on a Final Favorable Resolution, in which case suchwritten notice shall be referred to herein as a “Non-At-Risk Launch Notice.” As used herein, a“Launch Notice” may refer generally to an At-Risk Launch Notice and/or a Non-At-Risk Launch Notice.Notwithstanding the foregoing, in the event that Seller receives FDA approval of the Product’sANDA, but Seller is not awarded 180 days “first to file” market exclusivity and/or has not receiveda Favorable Resolution, Seller, at its option, may notify Purchaser of Seller’s desire to commencethe commercial sale of the Product in the Territory. In such event, Seller and Purchaser shallnegotiate in good faith the terms and conditions of any Product launch to Purchaser Customers inthe Territory; provided that, by way of clarification, nothing herein shall prevent (i) Seller fromselling and distributing such Product in the Territory so long as Seller does not sell ordistribute such Product to Purchaser Customers (provided that, by way of clarification, Seller maysell Product to drug wholesalers or any other Persons so long as Seller shall not supply, sell ordistribute Product to drug wholesalers or any other Persons for resale to any customer included initems (a)-(e) of Section 1.46) or (ii) Purchaser from terminating this Agreement pursuant to itsterms.          **2.3.2 At-Risk Launch.**In the event that Purchaser receives an At-Risk Launch Notice,Purchaser shall notify Seller in writing within 10 days of Purchaser’s receipt thereof whether ornot Purchaser agrees to launch the commercial sale of the Product to Purchaser Customers in theTerritory as contemplated herein based on such At-Risk Launch Notice (an “At-Risk Launch”). In theevent that Purchaser notifies Seller that it has determined to engage in an At-Risk Launch, [***]   Confidential Treatment Requested.
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Purchaser shall proceed according to the provisions of Section 2.3.3 below. In the event thatPurchaser notifies Seller that it has determined to not engage in an At-Risk Launch, Seller shallhave 10 days from receipt of Purchaser’s notice to notify Purchaser in writing whether or notSeller has determined to engage in an At-Risk Launch without Purchaser acting as Seller’sdistributor of the Product to the Purchaser Customers in the Territory (a “Seller Launch”). In theevent that Seller notifies Purchaser that it has determined to so engage in a Seller Launch,subject to Sections 2.3.4 and 2.3.5 below, this Agreement (including any rights of Purchaser tosell and distribute the Product in the Territory) shall automatically and immediately terminate asof the date of such Seller’s notice to Purchaser. In the event that Seller notifies Purchaser thatit has determined to not engage in a Seller Launch, this Agreement shall continue in full force andeffect and Seller may at any time thereafter submit a new Launch Notice, at which time the partiesshall, among other things, again proceed in accordance with the provisions of this Section 2.3.          **2.3.3 Obligation to Launch.**In the event that Seller delivers to Purchaser a Non-At-RiskLaunch Notice or Purchaser notifies Seller that Purchaser has determined to engage in an At-RiskLaunch, Purchaser shall (i) pay the milestone payment set forth in Section 3.1(b) below inaccordance with the provisions thereof, and (ii) subject to the terms of this Agreement, Purchasershall use Commercially Reasonable Efforts to commence with Purchaser’s First Commercial Sale assoon as commercially practicable thereafter, but in no event later than 5 business days followingPurchaser’s receipt of Launch Quantities.          **2.3.4 Payment of Compensatory Payments upon a Seller Launch.**Subject to Section 2.3.5 below,in the event that Seller engages in a Seller Launch, Seller shall pay to Purchaser payments (the“Compensatory Payments”), up to the aggregate amount of [***] (the “Maximum CompensatoryPayments”), equal to:               **(a) **during the first six full calendar months following Seller’s First Commercial Salepursuant to the Seller Launch, the greater of (i) [***] of Seller’s Net Sales of Product sold inthe Territory and (ii) [***];               **(b) **during the second six full calendar months following Seller’s First Commercial Salepursuant to the Seller Launch, the greater of (i) [***] of Seller’s Net Sales for Product sold inthe Territory and (ii) [***]; and               **(c) **[***] of Seller’s Net Sales of Product sold in the Territory during each calendar quarterafter the first twelve full calendar months after Seller’s First Commercial Sale pursuant to theSeller Launch.          **2.3.5**The Compensatory Payments shall be paid within 30 days of the end of each calendarquarter following Seller’s First Commercial Sale pursuant to the Seller Launch. Each CompensatoryPayments payment shall include a report setting forth in reasonable detail the amount of and thebasis for such payment, including a calculation of Seller’s Net Sales (including itemizing alldeductions to gross sales) for such quarterly period. With respect to any payment due as a resultof the [***] minimum Compensatory Payments amounts set forth in Sections 2.3.4(a) and (b) above,such payment shall be made within 30 days of the end of the calendar quarter that contains thesixth month of the applicable six month period for which the [***] minimum Compensatory Paymentsamount accrued. Any payments not made within the specified period of time for payment shall incur [***]   Confidential Treatment Requested.
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an interest charge at the rate of the Overdue Interest Amount on such overdue amounts,excluding any amounts that are subject to a bona fide dispute between the parties.          **2.3.6 Subsequent Suspension of a Seller Launch.**In the event that, within 30 days of Seller’sFirst Commercial Sale pursuant to a Seller Launch, Seller either voluntarily or as a result of anorder of the FDA or any court having competent jurisdiction ceases to sell in and withdraws theProduct from the market in the Territory, Seller’s obligation to pay the Compensatory Paymentspursuant to such Seller Launch shall immediately terminate as of the date of such withdrawal andthis Agreement shall be automatically and immediately reinstated and be in full force and effect onand after the date of such withdrawal pursuant to its terms. Without limiting the generality ofthe preceding sentence, in the event that, at any time after such withdrawal of the Product, Sellerdetermines to engage in a new commercial launch of the Product in the Territory, Seller shallprovide to Purchaser a Launch Notice pursuant to Section 2.3.1 above and the remaining provisionsof this Section 2.3 shall again apply to such new Launch Notice. In the event that Seller aftersuch withdrawal of the Product delivers to Purchaser a Non-At-Risk Launch Notice or Purchasernotifies Seller that it will engage in an At-Risk Launch in accordance with Section 2.3.2 abovefollowing receipt of an At-Risk Launch Notice, in addition to the payment of the milestone paymentunder Section 3.1(b) required in connection therewith, Purchaser shall refund to Seller any amountof the Compensatory Payments previously paid to Seller within 10 days of receipt by Purchaser ofsuch Non-At-Risk Launch Notice or receipt by Seller of Purchaser’s notice of intention to engage inan At-Risk Launch. In the event that Purchaser determines to not engage in such subsequent At-RiskLaunch and Seller commences a subsequent Seller Launch, (i) each of the [***] minimum CompensatoryPayments amounts under Sections 2.3.4(a) and (b) shall be reduced to an amount equal to [***]multiplied by a fraction, the numerator of which is the number of months of Product sales under allprevious Seller Launches pursuant to which Seller paid Compensatory Payments and the denominator ofwhich is six and (ii) the Maximum Compensatory Payments shall be reduced by the amount allCompensatory Payments previously paid to Purchaser.**     2.4 Termination of Agreement Relating to Commercial Launch.**          **2.4.1**In addition to Purchaser’s termination rights set forth elsewhere herein, Purchasershall be entitled to terminate this Agreement as set forth in this Section 2.4.1:               **(a) **Purchaser may terminate this Agreement after June 30, 2006, upon 30 days prior writtennotice to Seller, if Seller shall not have obtained a Favorable Resolution on or prior to June 30,2006, so long as such termination notice is received by Seller on or before July 15, 2006.               **(b) **Provided that Purchaser shall not have notified Seller that it will engage in an At-RiskLaunch prior thereto, Purchaser may terminate this Agreement after June 30, 2006, upon 30 daysprior written notice to Seller, if after June 30, 2006 an Adverse Resolution then exists, so longas such termination notice is received by Seller within 15 days after the later of June 30, 2006 orthe date Purchaser is notified of such Adverse Resolution. Seller shall provide written notice toPurchaser within 10 days of any Adverse Resolution. For purposes of clarification, Purchaser’sright to terminate this Agreement under this Section 2.4.1(b) shall not apply after Seller’sdelivery to Purchaser of a Launch Notice, unless such Launch Notice is an At-Risk Launch Notice,and then only in the event that this Agreement remains in effect pursuant to Seller’s determinationto [***]   Confidential Treatment Requested.
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not engage in a Seller Launch under Section 2.3.2 or this Agreement is reinstated following aProduct withdrawal pursuant to Section 2.3.6.               **(c) **Purchaser may terminate this Agreement after June 30, 2007, upon 30 days prior writtennotice to Seller, if Seller shall not have delivered to Purchaser a Launch Notice on or before June30, 2007, so long as such termination notice is received by Seller on or before July 15, 2007.          **2.4.2**Notwithstanding anything herein to the contrary, Purchaser’s sole remedy, whether incontract, tort or otherwise, for any failure by Seller to use Commercially Reasonable Efforts toobtain ANDA approval of the Product or any market exclusivity with respect thereto and/or anyadditional regulatory approvals necessary for the manufacture and supply of the Product and/or toobtain a Favorable Resolution shall be the termination of this Agreement as provided in thisSection 2.4 and the right to any refund of the milestone payment under Section 3.2.          **2.4.3**This Agreement may be terminated by Seller upon 5 days written notice to Purchaser, ifPurchaser shall have not effected Purchaser’s First Commercial Sale within 5 business daysfollowing Purchaser’s receipt of Launch Quantities in accordance with Section 2.3.3.     **2.5 Sales to Wholesalers.**Subject to the terms and conditions of this Agreement, Purchasershall have exclusive rights to sell Product to drug wholesalers or any other Persons for resale anddistribution to the customers in the Territory identified in items (a)-(e) of Section 1.46. Sellerretains all rights to all other current and future customers and markets for the Product, includingthe right to sell Product to drug wholesalers or any other Persons so long as Seller does notsupply, sell or distribute Product to drug wholesalers or any other Persons for resale to anycustomer included in items (a)-(e) of Section 1.46. As permitted by Applicable Law, Purchaser andSeller shall cooperate in creating arrangements with their respective drug wholesalers and othercustomers necessary to implement the foregoing. From time to time upon request, each party shallprovide the other with reasonable access to all information in its possession and control (or whichis reasonably obtainable) to confirm the ultimate customer of the Products sold by it to drugwholesalers or other Persons. To the extent Seller sells any Products to drug wholesalers or otherPersons that are ultimately purchased by any customer included in items (a)-(e) of Section 1.46,Seller shall pay Purchaser its portion of the Gross Profits (i.e., Seller’s Net Sales less theimputed Transfer Price of the Product times Purchaser’s then applicable portion of the Gross ProfitSplit) attributable to such sales by Seller plus the Overdue Interest Amount on the amount due fromthe date of the sale to the date of payment. To the extent Purchaser sells any Product to drugwholesalers or other Persons that are ultimately purchased by any customer not included in items(a)-(e) of Section 1.46, then Purchaser shall pay to Seller all of the Gross Profit attributable tosuch sales by Purchaser plus the Overdue Interest Amount on the amount due from the date of thesale to the date of payment. The above described Gross Profit reimbursement shall be each party’sexclusive remedy for any inadvertent and unintentional breach by the other party of its obligationsunder this Section 2.5. In addition, without limiting either party’s indemnification obligationsunder Article 17, if either party intentionally breaches this Section 2.5, the party in breachshall indemnify the other party pursuant to Article 17 for all Damages caused thereby.     **2.6 Information.**Seller shall provide Purchaser with copies of all material study results andother written communications that Seller submits to the FDA in connection with its attempt toobtain approval of the Product’s ANDA or otherwise relating to the Product as soon as reasonably
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practicable after Seller’s receipt or submission thereof. At Purchaser’s request from time totime during normal business hours and upon reasonable notice, Seller shall also provide Purchaserreasonable access to any other study results and other written communications that Seller submitsto the FDA in connection with its attempt to obtain approval of the Product’s ANDA or otherwiserelating to the Product in Seller’s possession. In addition, Seller shall provide Purchaser withcopies of all material pleadings, motions, briefs and other written communications relating to theLawsuit as soon as reasonably practicable after Seller’s receipt or submission thereof. AtPurchaser’s request from time to time during normal business hours and upon reasonable notice,Seller shall provide Purchaser with reasonable access to any other pleadings, motions, briefs andother written communications relating to the Lawsuit in Seller’s possession. The obligations ofSeller provided above shall be subject to Applicable Law (including compliance with any protectiveorder or other court or governmental agency order or requirement), maintaining applicableprivileges and the terms of any confidentiality obligations of Seller owned to third parties.**ARTICLE 3****MILESTONES AND PAYMENTS**     **3.1 Milestones and Payments.**In consideration of Seller’s grant of the exclusive distributionrights hereunder to Purchaser, Purchaser shall pay Seller the following amounts upon completion ofthe applicable milestone:     Milestone: Amount of Payment Due:(a) The Effective Date of this Agreement $4,500,000      (b) Within 10 days of both (x) either(i) Purchaser’s receipt of aNon-At-Risk Launch Notice under Section2.3.1 above or (ii) Purchaser’s writtennotice to Seller that Purchaser willengage in an At-Risk Launch underSection 2.3.2 above and (y) delivery toPurchaser of the Launch Quantities. $5,500,000      TOTAL: $10,000,000      **3.2 Payment Terms; Refund.**          **3.2.1**Any payments not made within the specified period of time for payment shall incur aninterest charge at the rate of the Overdue Interest Amount on such overdue amounts, excluding anyamounts that are subject to a bonafide dispute between the parties. All paymentsshall be made in U.S. dollars through electronic transfer of funds or other wire transfers.          **3.2.2**Except as expressly set forth in this Section 3.2.2, no milestone payment shall berefundable in whole or in part under any circumstance, including a termination of this Agreementpursuant to Seller engaging in a Seller Launch under Section 2.3.2. The $4,500,000 milestonepayment paid to Seller under Section 3.1(a) above shall be refunded by Seller to Purchaser in theevent this Agreement is terminated pursuant to Section 2.4.1 above; provided, however, in the eventthat this Agreement is terminated pursuant to Section 2.4.1 at any time after Seller shall havepaid Compensatory Payments to Purchaser, the amount of such Compensatory Payments shall be
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deducted from such refund of the milestone payment and any amount of such CompensatoryPayments in excess of the amount of the milestone payment shall be refunded to Seller within 30days of such termination. All such refunds shall be made by Seller within 30 days after theapplicable termination date; provided that, such amount remaining outstanding shall bear simpleinterest at the rate of the Overdue Interest Amount commencing on the date such amount is due andpayable (i.e., 30 days after the applicable termination date) until paid in full; and providedfurther that, if Seller does not have at the time the available funds to repay Purchaser suchamount, such amount shall be repaid no later than one year from the applicable termination date.If payment is not made within 30 days of termination, upon request of Purchaser, Seller shall (assoon as reasonably practicable) provide Purchaser with reasonable security for repayment of anymilestone payments not paid when due, including potentially, assignment of product revenues or alien on other assets.**ARTICLE 4****PRICING**     **4.1 Transfer Price.**          **4.1.1**The transfer price (“Transfer Price”) payable by Purchaser for Product delivered bySeller shall be a payment equal to the product of (a) the number of units of Product delivered bySeller to Purchaser pursuant to the applicable Purchase Order (including the Initial PurchaseOrder), multiplied by (b) [***] unit, regardless of dosage strength (the “Unit Price”).Notwithstanding the foregoing, on and after the [***] of the First Commercial Sale, Seller mayincrease the Unit Price during each twelve month period (which begins on an anniversary of theFirst Commercial Sale), effective upon 30 days prior written notice to Purchaser (or upon the laterresolution of any disputed price increase, except if such dispute is resolved in Seller’s favor inwhich case the Unit Price increase shall be effective 30 days from Seller’s original notice thereofto Purchaser), by (i) the actual per unit increase in Seller’s raw materials costs (the “RawMaterial Costs”) for the Product (including the costs of plunger rods, needle stick preventiondevices, syringes, Packaging and other ingredients and materials used to manufacture and processthe Product) over the 12 month period preceding the date of Seller’s notice of such price increasenot to exceed (subject to Section 4.1.2) [***] of the amount of Seller’s Raw Material Costs as atthe beginning of the 12-month period immediately prior to such price increase and (ii) the actualper unit increase in Seller’s direct labor costs (“Labor Costs”) for the Product over the prior 12month period preceding the date of Seller’s notice of such price increase not to exceed (subject toSection 4.1.2) [***] of the amount of the Seller’s Labor Costs as at the beginning of the 12-monthperiod immediately prior to such price increase. Seller shall provide Purchaser with reasonabledocumentation evidencing the applicable increases in Seller’s Raw Material Costs and Labor Costswith Seller’s notice of the price increase. Purchaser may dispute in good faith any increase tothe Unit Price pursuant to this Section 4.1.1 by written notice to Seller within 10 days ofPurchaser’s receipt of Seller’s notice thereof. If the dispute is not resolved within 30 days ofPurchaser’s dispute notice to Seller, then Purchaser may elect to seek resolution of the disputepursuant to the provisions of Section 4.5 by providing written notice to Seller of such election.If Purchaser does not provide Seller such written notice within 10 days after the aforementioned 30day period, then the dispute shall be deemed resolved in Seller’s favor. [***]   Confidential Treatment Requested.
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          **4.1.2**At the written request of Seller on and after the [***] of the First Commercial Sale,the parties shall discuss increases in the Unit Price in excess of the respective [***] limitationsprovided in Section 4.1.1 to the extent such increases are due to increases in Raw Material Costsand/or Labor Costs attributable to changes required by Applicable Law or governmental authority,including FDA, as provided in Section 6.2.1. Any such request for an increase in the Unit Price inexcess of the respective [***] limitations provided in Section 4.1.1 shall be reasonably consideredin good faith by Purchaser but shall not be implemented without Purchaser’s written consent (whichshall not be unreasonably withheld, delayed or conditioned). In the event Seller’s Raw MaterialCosts and/or Labor Costs increase by [***] or more during any twelve month period as a result ofchanges required by Applicable Law or governmental authority, including FDA, as provided in Section6.2.1 (based on reasonable documentation) and Purchaser does not consent to a correspondingincrease as requested by Seller in the Unit Price in excess of the respective [***] limitations (asthe case may be) provided in Section 4.1.1 within [***] of the date of Seller’s written request forsuch increase, then Seller shall (by written notice within [***] of the date of Seller’s writtenrequest for such increase) have the right to terminate this Agreement upon [***] written notice toPurchaser.     **4.2 Gross Profit Split.**          **4.2.1**Purchaser shall pay to Seller, as additional consideration for Seller’s supply ofProduct hereunder to Purchaser, the following portion of Gross Profit (the “Gross Profit Split”):               **(a) **60% percent of the Gross Profit for so long as there are [***] Competitive Products;               **(b) **55% percent of the Gross Profit for so long as there is (i) [***] Competitive Productbeing sold and distributed to Purchaser Customers in the Territory or (ii) [***] CompetitiveProduct being sold and distributed to customers in the Territory other than Purchaser Customers andas a result of the sale and distribution of such Competitive Product, Purchaser’s Net Sales for thelast completed calendar quarter are more than [***] less than Purchaser’s Net Sales for thecalendar quarter immediately preceding the last completed calendar quarter; and               **(c) **50% percent of the Gross Profit for so long as there are (i) [***] or more CompetitiveProducts being sold and distributed to Purchaser Customers in the Territory or (ii) [***] or moreCompetitive Products being sold and distributed to customers in the Territory other than PurchaserCustomers and as a result of the sale and distribution of such Competitive Products, Purchaser’sNet Sales for the last completed calendar quarter are more than [***] less than Purchaser’s NetSales for the calendar quarter immediately preceding the last completed calendar quarter.          **4.2.2**Seller’s Gross Profit Split shall be calculated and paid to Seller quarterly, within 30days after quarter end. Any adjustment to the Gross Profit Split as required from time to time dueto an increase or decrease in the number of Competitive Products or Purchaser’s Net Sales shall beeffective upon the day of the calendar month in which the change of number of CompetitiveProduct(s) occurred in the case of Section 4.2.1(b)(i) and (c)(i) above and upon the first day ofthe immediately succeeding calendar month after the calendar month in which the change inPurchaser’s Net Sales triggered an adjustment to the Gross Profit Split in the case of Section4.2.1(b)(ii) or (c)(ii) [***]   Confidential Treatment Requested.
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above. Notwithstanding anything herein to the contrary and by way of clarification, anyadjustment to the Gross Profit Split resulting from a change in the number of Competitive Productsor Net Sales shall change only the Gross Profit Split of Product having the same dosage strength asthat of the relevant Competitive Product(s) then being sold and distributed in the Territory. Eachparty shall provide the other party prompt written notice of any adjustment to the Gross ProfitSplit which the notifying party believes is warranted as a result of a change in the number ofCompetitive Products or Purchaser’s Net Sales. With such notice, the notifying party shall providean explanation to the other party as to the reasons why such adjustment is warranted and shallprovide the other party any documentation in notifying party’s possession or control which supportsthe notifying party’s basis for such adjustment.     **4.3 Shipping Terms.**The prices charged by Seller to Purchaser shall be FCA (Incoterms 2000),Seller’s designated manufacturing facility.     **4.4 Payment Terms.**          **4.4.1**The Transfer Price for the Product shall be paid within 30 days of the date of theapplicable invoice for such Product.          **4.4.2**The Gross Profit Split shall be paid within 30 days of the end of each calendar quarter,with a report setting forth in reasonable detail the amount of and the basis for such payment,including a calculation of Purchaser’s Net Sales (including itemizing all deductions to grosssales), Gross Profit and the Gross Profit Split (as applicable on a dosage strength basis) for suchquarterly period [***].          **4.4.3**Any payments not made within the specified period of time for payment shall incur aninterest charge at the rate of the Overdue Interest Amount on such overdue amounts, excluding anyamounts that are subject to a bonafide dispute between the parties. In addition,Seller may withhold shipment of Product to Purchaser if Purchaser has failed to make any paymentrequired under this Agreement (except for any amounts that are subject to a bonafide dispute) after the due date for such payment. All payments shall be made in U.S.dollars through electronic transfer of funds or other wire transfers.     **4.5 Audit Rights.**Purchaser with respect to Section 2.2.3 and this Article 4 and Seller withrespect to Sections 2.3.4 and 4.1 shall keep complete and accurate books and records for purposesof documenting the amount and calculations of, as applicable, Net Sales [***], Gross Profit, GrossProfit Split, the Compensatory Payments and, to the extent it is a basis for an increase in theTransfer Price pursuant to Section 4.1, increases in Raw Material Costs and Labor Costs. Saidbooks of account shall be kept at Purchaser’s or Seller’s principal place of business, asapplicable. Upon reasonable notice, each Purchaser or Seller, as applicable, at its expense, shallhave the right to have an independent public accounting firm (reasonably acceptable to the otherparty) obtain access to the other party’s financial records, during reasonable business hours,solely for the purpose of verifying such party’s payments hereunder; provided, however, that thisright may not be exercised more than once in any calendar year (unless a prior audit by the auditedparty in such calendar year reveals a discrepancy of the greater of 5% of the payment(s) audited or$25,000 in any calendar quarter and then the auditing party may exercise its audit right no morethan twice during such calendar year). The accountants engaged by the auditing party shall reportto the auditing party only information of [***]   Confidential Treatment Requested.
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the audited party related to the accuracy of the audited party’s calculations then beingaudited. The findings of the accountants engaged by the auditing party shall be final and bindingupon the parties hereto, and the payments attributable to any particular period may only be auditedonce for such period. Any underpayment or overpayment of the amount due hereunder due to amiscalculation of such amount shall be paid within 30 days after the delivery of a writtenaccountants’ report to each party. In the event any such audit reveals a shortfall greater than 5%of the payment(s) audited or $25,000 in any calendar quarter, then the reasonable costs of theaccountants engaged by the auditing party to perform such audit shall be reimbursed by the auditedparty. Any underpayment or overpayment amount paid pursuant to this Section 4.5 shall accrueinterest on such amount from the original due date at the Overdue Interest Amount.**ARTICLE 5****LAUNCH QUANTITIES, FORECASTS, ORDERS**     **5.1 Initial Purchase Order; Launch Quantities.**Within 5 days following receipt of aNon-At-Risk Launch Notice by Purchaser or delivery to Seller of Purchaser’s notice that it willengage in an At-Risk Launch, Purchaser shall deliver to Seller an initial binding order (the“Initial Purchase Order”) for the quantity of Product required for Purchaser’s commercial launch ofthe Product consistent with Purchaser’s then current Forecast; provided that, such quantity shallnot exceed (without the prior written consent of Seller, which may be withheld in its solediscretion) [***] units of Product if the First Commercial Sale occurs in calendar year 2005 or[***] of the then existing Maximum Annual Product Units if the First Commercial Sale occurs in anycalendar year after 2005 (the “Launch Quantities”). Subject to the terms of this Agreement, Sellershall use Commercially Reasonable Efforts to supply the Product to Purchaser in the LaunchQuantities by no later than the delivery dates indicated in the Initial Purchase Order, whichdelivery dates shall be no sooner than 90 days after the date of the Initial Purchase Order unlessSeller consents thereto. Seller shall thereafter use Commercially Reasonable Efforts to supply toPurchaser such additional quantities of the Product as ordered by Purchaser hereunder pursuant toSection 5.3.     **5.2 Forecasts.**Beginning at least 6 months prior to the anticipated date of FDA approval ofthe Product’s ANDA and at least 90 days prior to each calendar quarter thereafter, Purchaser shallprovide to Seller a rolling 12-month forecast (each a “Forecast”) of the quantities of the Productto be purchased by Purchaser on a monthly basis. Without limiting the foregoing, in addition tothe above Product quantities, each Forecast delivered by Purchaser prior to its First CommercialSale shall include the Launch Quantities. Forecasts shall be in good faith and non-binding,provided, however, that (a) on and after Purchaser’s delivery of its Initial Purchase Order toSeller, the first three months of each Forecast shall be binding on Purchaser, and shall constitutePurchaser’s firm order for the quantity of Product set forth in such Forecast; and (b) forecastedquantities of the Product for the fourth, fifth and sixth months forecasted thereunder shall notincrease by more than 25% from the quantities forecasted for such months in the preceding Forecastwithout Seller’s prior written consent (not to be unreasonably withheld or delayed).     **5.3 Orders.**Except for the Initial Purchaser Order, Purchaser shall deliver to Sellerpurchase orders (“Purchase Orders”) for the Product no later than 90 days before the date that theProducts for such Purchase Order are required to be delivered to Purchaser and provided such [***]   Confidential Treatment Requested.
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Purchase Orders are for the binding portion (i.e., the first three months) of the then currentForecast in accordance with Section 5.2, Seller shall accept such Purchase Orders. Subject toSection 5.6, Seller shall use Commercially Reasonable Efforts to satisfy Purchase Orders foramounts in excess of those forecasted for the binding portion of the then current Forecast pursuantto Section 5.2; provided that in no event shall Seller be required to add to its existingmanufacturing capacity of its facility(ies) for the Product in order to satisfy Purchaser’sPurchase Orders. Each such Purchase Order shall be firm and shall specify the quantity of theProduct ordered, the date on which such Product shall be delivered and the delivery address.Product shall be ordered by Purchaser in no less than full batch increments.     **5.4 Shipping Reports.**On or promptly after the date of each shipment of Product, Seller shallsubmit to Purchaser, via facsimile, a packing slip containing the ship date, trailer number,contents and quantities of each shipment and invoice for the Transfer Price.     **5.5 Standard Forms; Conflicts.**In ordering and delivering the Product pursuant hereto, Sellerand Purchaser may use their standard forms (including Purchase Orders, invoices, salesacknowledgments, etc.), but nothing in those forms shall be construed to modify, amend orsupplement the terms of this Agreement and, in case of any conflict herewith, the terms of thisAgreement shall control, and any additional or modified terms contained in any such Purchase Orderor other form shall be null and void and shall not be binding upon the receiving party.     **5.6 Capacity Allocation.**          **5.6.1**Notwithstanding anything herein to the contrary or anything to the contrary in anyPurchase Order or Forecast, Seller shall not be obligated to supply Purchaser (regardless ofamounts ordered by Purchaser), more than the then applicable Maximum Annual Product Units during atwelve month period. Without limiting the foregoing, any Purchase Order or Forecast submitted byPurchaser hereunder for more than the then applicable Maximum Annual Product Units shall, to theextent of the excess, be deemed rejected by Seller, unless expressly accepted by Seller in writing.As used herein, the term “Maximum Annual Product Units” shall mean for the period ending twelvefull calendar months from the First Commercial Sale and for each twelve month period thereafter,[***] of the total units of branded and generic Lovenox® product (including the brand name product,the Product, any Authorized Generic Product and any Competitive Product) sold for distribution intothe Territory for the immediately preceding calendar year as reported by IMS Health (or such othernationally recognized data compilation source as mutually agreed); provided that, if the FirstCommercial Sale occurs during calendar year 2005, then the Maximum Annual Product Units for theperiod ending twelve full calendar months from the First Commercial Sale shall be deemed to be[***] of Product. For each twelve month period beginning after the First Commercial Sale (otherthan as provided above if the First Commercial Sale occurs in calendar year 2005), the MaximumAnnual Product Units shall be established as soon as data from IMS Health (or such other nationallyrecognized source as mutually agreed) for the immediately preceding calendar year becomes availableto the parties and once the Maximum Annual Product Units for the then current twelve month periodis established, it shall be effective retroactively to the beginning of and shall be fixed throughsuch twelve month period. Without limiting the foregoing, but by way of example: If the FirstCommercial Sale occurs on September 1, 2005, then the Maximum Annual Product Units for the twelvemonth period ending with August 31, 2006 would be [***] units of [***]   Confidential Treatment Requested.
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Product. As a result, Purchaser would have no right to order or purchase, and Seller wouldhave no obligation to supply, more than [***] units of Product during the twelve month periodending August 31, 2006. Assuming that [***] total units of branded and generic Lovenox® productwere sold for distribution into the Territory for the 2005 calendar year as reported by IMS Health,then the newly established Maximum Annual Product Units for the twelve month period ending August31, 2007 would be [***] units of Product (i.e., [***] units). As a result, Purchaser would have noright to order or purchase, and Seller would have no obligation to supply, more than [***] units ofProduct during the twelve month period ending August 31, 2007. The foregoing process would berepeated once each twelve month period thereafter to establish the Maximum Annual Product Units forthe then current twelve month period. At Purchaser’s request from time to time, the parties shalldiscuss increasing the then existing Maximum Annual Product Units based on then existing marketconditions, Seller’s manufacturing capacity and other relevant factors. Seller shall reasonablyconsider Purchaser’s request and its reasons for an increase in the then existing Maximum AnnualProduct Units; provided that, Seller shall have no obligation to agree to (and may reject inSeller’s sole discretion and without liability) any increase requested by Purchaser in the thenexisting Maximum Annual Product Units.          **5.6.2**In the event that Seller’s inability (including any inability as a result of a ForceMajeure Event) to satisfy any Purchase Order accepted pursuant to Section 5.3, in whole or in part,is due to a shortage of production capacity or raw materials, then, subject to the terms andconditions of this Agreement, including Section 5.6.1 above, Seller shall give priority toPurchaser’s Purchase Orders, and satisfy deliveries of amounts ordered consistent with Section 5.3prior to fulfilling order for Product of any other Person, for up to (i) [***] units of Product tobe delivered to Purchaser pursuant to its Purchase Orders for the period ending six full calendarmonths after the First Commercial Sale and (ii) [***] units of Product to be delivered to Purchaserpursuant to its Purchase Orders during each six month period thereafter and for any Product to bedelivered to Purchaser pursuant to its Purchase Orders during such six month period in excess ofthe foregoing [***] unit amount, [***] of Seller’s units of its finished inventory of Productproduced during the applicable period in excess of [***] units shall be allocated to fulfill anysuch remaining outstanding Purchase Orders.**ARTICLE 6****SPECIFICATIONS**     **6.1 Specifications.**The Specifications for the Product will be as described in the ANDA thatis approved by FDA for the Product. The Specifications for the Product shall not be changed exceptas expressly permitted under this Agreement.     **6.2 Change Management.**          **6.2.1 Required Changes.**With respect to any changes to the Specifications or to any processinvolved in the manufacture, Packaging, Labeling, storage, transportation, delivery or testing ofthe Product that are required by Applicable Laws or by mandate of an applicable governmentauthority (including the FDA), the parties shall reasonably cooperate in making such changespromptly, and Seller shall, subject to Section 4.1 and unless otherwise mutually agreed to in [***]   Confidential Treatment Requested.
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writing by the parties, bear the costs of implementing such changes, including the cost ofscrapping materials (including raw materials, in-process materials, inventory and packagingmaterial) associated with such changes.          **6.2.2 Discretionary Changes.**With respect to changes to the Specifications or to any processinvolved in the manufacture, Packaging, Labeling, storage, transportation, delivery or testing ofthe Product that are not required by Applicable Laws or by mandate of an applicable governmentauthority (including the FDA), the parties shall cooperate in good faith to reach a mutuallyagreeable solution with regard to such changes, but Seller shall not be obligated to make any suchchanges requested by Purchaser except as expressly provided in Section 6.2.3. Seller reserves theright to make such changes unilaterally; provided, however, that Seller will consult withPurchaser prior to making such changes; and provided further that, Seller shall obtain Purchaser’sprior written consent (which will not be unreasonably withheld or delayed) for any changes thatwould materially affect storage or transportation of the Product after delivery to Purchaser. Thecost of making a discretionary change shall be borne solely by the party initiating the change oras otherwise mutually agreed to in writing by the parties. In the event any such changes initiatedby Purchaser increase Seller’s costs of manufacturing and supplying the Product to Purchaser, atSeller’s request, the parties shall discuss and agree in good faith to an equitable adjustment ofthe Unit Price to account for such increase in costs.          **6.2.3 Product Labeling.**The Products supplied to Purchaser will include Purchaser’s NDCnumber and be packaged in labeling and artwork approved by Purchaser to indicate Purchaser as adistributor of the Product. In order for Purchaser to include in the Product Label PurchaserTrademarks or similar changes indicating Purchaser as a distributor of the Product; (a) uponPurchaser’s request, Seller shall provide Purchaser with the Label artwork and text in electronicformat, (b) Purchaser may update such artwork and text to include Purchaser Trademarks and suchother similar changes as desired by Purchaser to indicate Purchaser as a distributor of theProduct, and (c) Purchaser’s costs in connection with the foregoing shall be at its sole expense.Thereafter, Seller shall make all necessary arrangements, at its expense (except as provided inSection 6.2.1 above), to have changed Labels or Labeling printed and shall provide printer’s proofsto Purchaser for Purchaser’s review. Purchaser shall, within two (2) weeks of receipt of saidprinter’s proofs, provide written notice to Seller of Purchaser’s approval of such proofs in theform submitted by Seller (which approval shall not be unreasonably conditioned, withheld ordelayed) or with such corrections thereto (in Purchaser’s reasonable judgment) as included inPurchaser’s notice. Thereafter, Seller shall incorporate in such Labels and Labeling Purchaser’srequested corrections thereto, if any, and shall supply Purchaser with examples of such ProductLabels and Labeling for Purchaser’s regulatory filings; provided, however, that, ifSeller shall not agree with Purchaser’s requested corrections, Purchaser and Seller shall consultin good faith to reach a resolution mutually agreeable to Purchaser and Seller.     **6.3 Trademarks.**All trademarks, tradenames and packaging graphics used by Purchaser inconnection with its sale and distribution of the Product to Purchaser Customers in the Territory(collectively, the “Purchaser Trademarks”) shall be chosen by Purchaser in its sole discretion,subject to the terms and conditions of this Agreement. Purchaser shall be responsible for any andall liabilities which may arise from Purchaser’s use of the Purchaser Trademarks (including anyallegations of intellectual property infringement related thereto and any liabilities related toprescription errors related to such trademark usage). Unless consented to in writing by Seller,
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Purchaser shall not use any trademark, tradename, company name, or copyright of Seller inconnection with the distribution, marketing or sale of the Product.     **6.4 Certificate of Analysis.**Each shipment of the Product to Purchaser shall be accompaniedby a certificate of analysis prepared by an authorized representative of Seller certifying that theProduct in the shipment has been tested in accordance with the ANDA for such Product, meets theSpecifications and was manufactured in material compliance with cGMP (for the avoidance of doubtany non-compliance that would affect Purchaser’s sale or distribution of the Product hereundershall be considered material). Seller shall deliver such certificate of analysis by facsimile orovernight delivery to Purchaser’s distribution facility as designated by Purchaser.     **6.5 Expiry Dating.**Except as otherwise agreed to in writing by Purchaser, all Product shippedto Purchaser, on the date of shipment by Seller, shall have a shelf-life of at least the approveddating of the Product (per the Product’s ANDA) [***].     **6.6 Stability Testing.**Seller shall maintain a stability testing program for the Product andprovide Purchaser with an annual product review thereon. At least one batch per year of Productshall be included in the stability program.     **6.7 Annual Report.**At Seller’s written request, Purchaser will supply distributioninformation and other information reasonably requested by Seller, for the purposes of inclusioninto Seller’s Annual Report to FDA.**ARTICLE 7****TERM**     **7.1 Term.**Subject to Article 8, the term of this Agreement shall commence on theEffective Date and remain in effect for a period of 7 years from the date of Purchaser’s FirstCommercial Sale. Notwithstanding the foregoing, Purchaser shall have the option to renew thisAgreement for an additional term of 3 years from the date of the expiration of the initial term byproviding Seller Purchaser’s irrevocable written notice thereof 12 months prior to the end of theinitial term.**ARTICLE 8****TERMINATION**     **8.1 Breach.**This Agreement may be terminated, prior to the expiration of its term, by eitherparty by giving written notice of its intent to terminate and stating the grounds therefor if theother party shall have materially breached or materially failed in the observance or performance ofany representation, warranty, guarantee, covenant or obligation under this Agreement. The partyreceiving the default notice shall have 30 days from the date of receipt thereof to cure the breachor failure, except in the case of a breach of an obligation to pay money, in which case such cureperiod shall be 10 days; provided, however, that nonpayment in connection with agood faith dispute of the [***]   Confidential Treatment Requested.
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amount in dispute shall not be considered a breach hereof so long as once such dispute isresolved, payment of any amounts owing is made within 5 days of such resolution. If a breach(other than a breach of an obligation to pay money) is not curable within such 30 day period, thenthe non-performing party shall have an additional 30 days within which to cure such breach so longas the non-performing party is diligently working towards a remedy for such breach. In the eventsuch breach or failure is cured in accordance with the provisions of this Section 8.1, the defaultnotice shall become of no effect. In the event such breach or failure is not cured in accordancewith the provisions of this Section 8.1, then this Agreement shall terminate immediately uponwritten notice to the defaulting party.     **8.2 Insolvency, Etc.**This Agreement may be terminated, prior to the expiration of its term,immediately upon written notice by either party: (a) in the event that the other party heretoshall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver,custodian, trustee or liquidator of itself or of all or a substantial part of its property, (ii)make a general assignment for the benefit of its creditors, (iii) commence a voluntary case underthe United States Bankruptcy Code, as now or hereafter in effect (the “Bankruptcy Code”), (iv) filea petition seeking to take advantage of any law relating to bankruptcy, insolvency, reorganization,winding-up, or composition or readjustment of debts, (v) fail to controvert in a timely andappropriate manner, or acquiesce in writing to, any petition filed against it in any involuntarycase under the Bankruptcy Code, or (vi) take any corporate action for the purpose of effecting anyof the foregoing; or (b) if a proceeding or case shall be commenced against the other party heretoin any court of competent jurisdiction, seeking (i) its liquidation, reorganization, dissolution orwinding-up, or the composition or readjustment of its debts, (ii) the appointment of a trustee,receiver, custodian, liquidator or the like of the party or of all or any substantial part of itsassets, or (iii) similar relief under any law relating to bankruptcy, insolvency, reorganizationwinding-up or composition or readjustment of debts, or an order, judgment or decree approving anyof the foregoing shall be entered and continue unstayed for a period of 60 days; or an order forrelief against the other party hereto shall be entered in an involuntary case under the BankruptcyCode.     **8.3 Termination Relating to Commercial Launch; Force Majeure, No Increase in Unit Price.**          **8.3.1**This Agreement shall terminate in accordance with Section 2.3.2.          **8.3.2**Purchaser or Seller, as the case may be, may terminate this Agreement as provided forunder Section 2.4.          **8.3.3**Purchaser or Seller, as the case may be, may terminate this Agreement as provided forunder Article 12.          **8.3.4**Seller may terminate this Agreement as provided in Section 4.1.2.     **8.4 Termination Due to Changed Circumstances.**On and after Purchaser’s First Commercial Sale,Purchaser or Seller may terminate this Agreement upon 90 days prior written notice to the otherparty if Purchaser purchases less than the Minimum Annual Product Units during any rolling twelvemonth period beginning after the First Commercial Sale so long as such termination notice isprovided to the non-terminating party within 90 days of the end of the twelve month period to whichthe termination is based. Notwithstanding the foregoing (unless Purchaser has not ordered at leastthe Minimum Annual Product Units), Seller’s right to terminate this
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Agreement pursuant to this Section 8.4 is conditioned upon Seller fulfilling all ofPurchaser’s Purchase Orders for Product on a timely basis during the twelve month period upon whichSeller’s exercise of its termination rights under this Section 8.4 is based. As used herein, theterm “Minimum Annual Product Units” shall mean [***] units of Product during any twelve monthperiod beginning after the First Commercial Sale there are no Authorized Generic Product orCompetitive Product being sold and distributed in the Territory and [***] units of Product duringany twelve month period beginning after the First Commercial Sale in which there are one or moreAuthorized Generic Products or Competitive Products being sold and distributed in the Territory(which adjustment shall be effective upon the date of market entry of such Authorized GenericProduct or Competitive Product); provided that, in the event of any adjustment to Minimum AnnualProduct Units during any rolling twelve month period, the Minimum Annual Product Units existingimmediately prior to and after such adjustment shall be prorated as of the effective date of suchadjustment for the purpose of calculating the Minimum Annual Product Units for such twelve monthperiod.     **8.5 Termination Due to Third Party Infringement Claim.**On and after Purchaser’s FirstCommercial Sale, Purchaser may terminate this Agreement upon 30 days prior written notice to Sellerin the event a Third Party Infringement Claim (other than with respect to the use of PurchaserTrademark) is made against Purchaser or its Affiliates so long as such termination notice isprovided to Seller within 15 days of Purchaser receiving written notice of such Third PartyInfringement Claim.     **8.6 Supply Obligations Upon Termination.**Upon expiration of this Agreement or any terminationof this Agreement after Purchaser’s First Commercial Sale, Seller shall supply and ship, andPurchaser shall purchase from Seller in accordance with the terms and conditions of this Agreementand shall be entitled to distribute to Purchaser Customers in the Territory, any and all amounts ofProducts ordered by Purchaser pursuant to Section 5.3 hereof prior to the effective date of suchexpiration or termination.     **8.7 Effect of Termination.**Expiration or termination of this Agreement for any reason shallnot release either party hereto from any liability that at such time had already accrued, or thatthereafter accrues from a breach or default, prior to the effective date of such expiration ortermination, nor affect in any way the survival of any other right, duty or obligation of eitherparty hereto which is expressly stated elsewhere in this Agreement to survive such expiration ortermination. In addition, termination or expiration of this Agreement shall in no event releasePurchaser from its payment obligations under Article 4, including Purchaser’s obligation to paySeller the Gross Profit Split with respect to sales of Product whether or not such Product is soldbefore or after the date of such termination or expiration. Except as expressly provided inSection 3.2.2, no payments to Seller made pursuant to Article 3 shall be refundable in whole or inpart, whether upon termination or expiration of this Agreement or otherwise. Except as otherwiseprovided herein, either party may pursue any remedy available in law or in equity with respect toany breach of this Agreement. Sections 2.2.3, 2.3.4 (but only in the event of a terminationpursuant to Section 2.3.2), 2.3.5 (but only in the event of a termination pursuant to Section2.3.2), 2.3.6, 3.2.2, 4.5, 6.7, 8.6, 8.7, Article 13, Article 14, Article 16, Article 17 and, asapplicable, Article 11 and Article 18 hereof shall survive the expiration or termination of thisAgreement in accordance with the respective terms thereof. [***]   Confidential Treatment Requested.
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**ARTICLE 9****WAREHOUSING; SHIPMENT**     **9.1 Delivery.**Seller shall not be responsible for warehousing finished goods for Purchaser.Purchaser is responsible for any delivery charges FCA (Incoterms 2000), Seller’s designatedmanufacturing site. All shipments shall be accompanied by a packing slip that describes thearticles, states the Purchase Order number and shows the shipment’s destination. Seller shall useCommercially Reasonable Efforts to deliver Product in accordance with the delivery schedule setforth in the Initial Purchase Order or the Purchase Orders provided in compliance with Section 5.3hereof.     **9.2 Shipment.**The risk of loss with respect to Product shall be in accordance with FCA(Incoterms 2000), Seller’s designated manufacturing site. Purchaser shall notify Seller within 24hours of discovery of any lost or stolen goods to facilitate Seller’s notification of the FDA.**ARTICLE 10****DEFECTIVE PRODUCT/INSPECTIONS/TESTING**     **10.1 Disposition of Defective Product.**Purchaser shall use Commercially Reasonable Efforts,within 20 days after receipt of any shipment of Product, to notify Seller in writing of theexistence and nature of any non-compliance with the Product Warranty observable from a visualinspection. If such notice is not provided within such 20 day period, then all such Product shallbe deemed to be accepted by Purchaser; provided, however, that, any such acceptance or deemedacceptance shall not adversely affect any applicable Product Warranty or rights to indemnification.If Purchaser notifies Seller of defective Product, then Seller shall have a reasonable opportunityto inspect such defective Product and provide Purchaser with detailed written instructions toreturn or dispose of such defective Product at Seller’s expense. Whether or not Seller agrees withPurchaser’s basis of rejection, Seller shall, at Purchaser’s request, use Commercially ReasonableEfforts to promptly replace the rejected Product. Purchaser shall pay the Transfer Price, and, tothe extent Purchaser’s Net Sales derive from the sale of such Product, the applicable Gross ProfitSplit, for any Product shipped by Seller that replaces Product rejected by Purchaser hereunder. Inaccordance with Section 10.2 below, Purchaser shall not be obligated to pay for any properlyrejected Product and any such payment shall be promptly returned to Purchaser if Seller agrees withPurchaser’s notice of non-compliance with respect to such rejected Product or such rejected Productis deemed by the independent third-party laboratory to be not in compliance with the ProductWarranty. Purchaser shall not destroy, return or otherwise dispose of the rejected Product untilwritten notification is received from Seller.     **10.2 Independent Testing.**If Seller disagrees with Purchaser’s notice of non-compliance as toProduct testing Specifications of the Product to the Product Warranty, the Product shall besubmitted to an independent third-party laboratory, mutually and reasonably acceptable to bothparties, for analytical testing to determine the extent of the Product’s compliance ornon-compliance to the Product Warranty. All costs associated with such third-party laboratorytesting shall be at Purchaser’s expense, and Purchaser shall be required to pay the Transfer Priceand, in the event Purchaser’s Net Sales derive from the sale of such Product, the applicable GrossProfit Split, for all rejected Product (irrespective of whether Seller has replaced such Product),unless Seller agrees with
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Purchaser’s notice of non-compliance or the tested Product is deemed by such third-partylaboratory to be not in compliance with the Product Warranty, in which case all such costsassociated with such third-party laboratory testing, including reimbursement of freight anddisposition costs, shall be promptly reimbursed by Seller to Purchaser and Purchaser shall not beobligated to pay for such rejected Product and any such payment shall be promptly returned toPurchaser.     **10.3 Short-Shipment.**Purchaser shall notify Seller within 30 days of receipt of anyshort-shipment claim with respect to the Product and Seller shall use Commercially ReasonableEfforts to promptly address such claim to Purchaser’s reasonable satisfaction.**ARTICLE 11****REGULATORY MATTERS**     **11.1 Adverse Event Reporting; Product Complaints.**Purchaser shall have the responsibility inthe Territory for complying with all regulatory filings, reporting requirements and other matterswhich relate solely to Purchaser acting as a distributor of the Product to Purchaser Customers inthe Territory and Seller shall cooperate with Purchaser as reasonably necessary to accomplish theforegoing. All other regulatory reporting matters (including investigating, evaluating andreporting Adverse Events and other Product complaints) shall be Seller’s responsibility. In thisregard, Seller shall be responsible for all reporting to regulatory authorities of all AdverseEvents associated with the use of Product. Purchaser shall notify Seller of any report of anAdverse Event concerning the Product within five (5) calendar days of receipt of the report andprovide Seller with information as required by Applicable Laws or as reasonably requested bySeller. Purchaser shall cooperate with Seller as necessary to report such Adverse Event when sorequired under Applicable Laws. Purchaser shall also notify Seller within 10 days of anycomplaints related to the Product of which it becomes aware regarding problems with the Productother than those associated with Adverse Events, and Seller shall meet and confer periodically withPurchaser with respect to Seller’s responses to such complaints and whether any remedial actions byPurchaser are indicated as necessary or appropriate by the pattern of complaints, which actionsshall be at the expense of the party to the extent its improper acts or omissions caused suchcomplaints.     **11.2 FDA Communications.**Purchaser and Seller agree to promptly notify the other party in theevent they receive any communication or notice from the FDA with respect to the Product or aninspection of the facility where the Product is manufactured, Packaged or stored, and each partyshall promptly provide a copy of such communications to the extent applicable to the Product to theother. The parties shall cooperate in good faith in responding to any such FDA inquiry or inmaking any report to the FDA with respect to the Product, but in all cases Seller shall have finalauthority for regulatory decisions concerning the Product and responsibility for all communicationswith the FDA.     **11.3 Recalls**.          **11.3.1**In the event of any recall or seizure of any Product, other than a Purchaser Recall (asdefined below) Seller shall, at the written election of Purchaser and at Seller’s sole cost,either:
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               **(a) **undertake Commercially Reasonable Efforts to replace the amount of Product recalled orseized; or               **(b) **give credit to Purchaser against outstanding receivables due from Purchaser in an amountequal to the amount paid by Purchaser for the Product (including any Gross Profit Split paid toSeller on such Product) so recalled or seized or otherwise owing by Purchaser hereunder;plus reimburse (or, at the written election of Purchaser, credit) Purchaser for the aggregate andreasonable transportation costs, taxes, freight insurance, handling and reasonable and verifiableout-of-pocket costs incurred by Purchaser in respect of such recalled or seized Product.          **11.3.2**In the event of any recall or seizure of any Product occurring primarily as a result ofany breach of this Agreement by, or negligent acts of omissions or intentional misconduct of,Purchaser or its Affiliates (a “Purchaser Recall”), (i) if such Purchaser Recall is classified byFDA as a Class I recall, Seller shall be responsible (as between Purchaser and Seller) for suchrecalled or seized Product and shall bear all costs of such recall or seizure, (ii) if suchPurchaser Recall is classified by FDA as a Class II recall, Seller shall be responsible (as betweenPurchaser and Seller) for such recalled or seized Product and the parties shall share equally allcosts of such recall or seizure and (iii) if such Purchaser Recall is classified by FDA as a ClassIII recall,Purchaser shall be responsible (as between Purchaser and Seller) for suchrecalled or seized Product and shall bear all costs of such recall or seizure, includingreimbursement of Seller of any reasonable and verifiable out-of-pocket costs incurred by Sellerrelated to the recall or seizure of such Product. Purchaser’s costs with respect to any PurchaserRecallas set forth above shall not be deducted in connection with the calculation ofPurchaser’s Net Sales or Gross Profit hereunder.          **11.3.3**For purposes of this Section 11.3, “recall” shall mean (i) any action by Seller,Purchaser, any Affiliate of either to recover title to or possession of any Product sold or shippedand/or (ii) any decision by Purchaser not to sell or ship Product to third parties which would havebeen subject to recall or seizure if it had been sold or shipped, in each case taken in the goodfaith belief that such action was appropriate or required under the circumstances. For purposes ofthis Section 11.3, “seizure” shall mean any action by any government agency to detain or destroyany Product. Notwithstanding anything to the contrary in this Section 11.3, Seller shall havefinal authority with respect to any recall of the Product and neither Purchaser nor its Affiliatesshall initiate any recall of the Product without Seller’s prior written approval (such approval notto be unreasonably conditioned, withheld or delayed).          **11.3.4**Seller and Purchaser shall keep the other fully informed of any notification or otherinformation, whether received directly or indirectly, that might affect the marketability, safetyor effectiveness of the Product, or which might result in liability issues or otherwise necessitateaction on the part of either party, or which might result in recall or seizure of any Product.Purchaser shall maintain records of all sales of Product and customers reasonably sufficient toadequately administer a recall or seizure for the longer of three years after termination orexpiration of this Agreement or the period required by Applicable Law. Seller will be responsiblefor assuring that such recall is closed-out with the FDA, unless the FDA shall otherwise require.
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     **11.4 Inspections**.          **11.4.1**Seller shall use Commercially Reasonable Efforts to maintain and operate themanufacturing facility designated in the ANDA, and to implement such quality control procedures, soas to cause Seller to be able to perform its obligations hereunder. Upon Purchaser’s writtenrequest and at its expense, Seller shall permit quality assurance representatives of Purchaser(reasonably acceptable to Seller) to inspect such manufacturing facility, at all times accompaniedby a representative of Seller, upon reasonable notice, during normal business hours and on aconfidential basis. Such inspection shall be limited to an assessment of such facility’scompliance with cGMP and other quality assurance standards as such relate to the manufacture of theProduct. Seller shall also permit Purchaser reasonable periodic visits to discuss and reviewmanufacturing and supply issues with management of Seller.          **11.4.2**In the event Seller’s manufacturing, Packaging, testing or storage facility producingthe Product hereunder is inspected by representatives of any federal, state, or local agency inconnection with Seller’s manufacture, Packaging, testing or storage of Product, then Seller shallnotify the Purchaser promptly upon learning of such inspection, and shall, within 10 days of suchnotice, supply Purchaser with copies of any correspondence or portions of correspondence whichrelate to the Product in Seller’s possession. If Seller is informed that a representative of anyfederal, state, or local agency will be conducting an audit of Seller’s manufacturing facility andsuch audit specifically relates to the Product, then Seller will, to the extent reasonablypracticable, provide advance notice to Purchaser to permit Purchaser to observe and attend suchaudit. In the event Seller receives any regulatory letter or comments from any federal, state, orlocal agency in connection with its manufacture, Packaging, testing or storage of the Productrequiring a response or action by Seller, including receipt of a Form 483 (InspectionalObservations) or a “Warning Letter,” Seller shall promptly following Seller’s receipt thereof,provide Purchaser with a copy of such communication which relate to the Product. At Seller’srequest, Purchaser will provide Seller with any and all data or information reasonably required toprepare a response to such communication. Seller shall consult Purchaser with respect to anyresponse relating to the Product; provided, however, that, as between Seller and Purchaser, Sellershall make the final determination as to any such response submitted to the regulatory authorities.Seller shall promptly provide Purchaser with a copy of any final response which relate to theProduct after its submission to the regulatory authority.          **11.4.3**Purchaser shall use Commercially Reasonable Efforts to maintain and operate anyfacility of Purchaser at which the Product is stored or distributed in compliance with cGMP andother quality assurance standards as such relate to the Product. Upon Seller’s written request andat its expense, Purchaser shall permit quality assurance representatives of Seller (reasonablyacceptable to Purchaser) to inspect any facility of Purchaser at which the Product is stored ordistributed. Such inspection shall be limited to an assessment of such facility’s compliance withcGMP and other quality assurance standards as such relate to the Product. In the event Purchaseris inspected or receives a regulatory letter or comments from any federal agency in connection withits sale or distribution of the Product, Purchaser shall notify Seller promptly upon learning ofsuch inspection and/or provide Seller copies of such correspondence upon receiving suchdocumentation. Seller shall have the right to, and at Purchaser’s written request shall,participate in that portion of such inspection relating to the Product. Regardless of whetherSeller does participate as described above, Seller and Purchaser shall consult with respect to theresponse relating to the Product. Seller will provide Purchaser at Purchaser’s request with alldata or information reasonably required to prepare a response relating to the Product, andPurchaser will promptly provide Seller with a copy of any final response submitted to theregulatory authority.
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          **11.4.4**Seller will notify Purchaser within one day of any finished Product lot that results ina positive sterility test out of specification (OOS) condition, whether or not that lot wasreleased or distributed, whether or not the positive sterility result was subsequently investigatedand attributed to an assignable cause. In addition, Seller will notify Purchaser within one day ofany stability test for the Product that results in an OOS condition relating to the ProductSpecifications, whether or not the OOS condition was subsequently investigated and attributed to anassignable cause. To the extent it is not reasonably practicable for Seller to provide noticewithin the one day period required by this Section, Seller will not be deemed to be in breach ofthis Agreement if it provides the required notice as soon as it is reasonably practicable. Sellerwill also provide quarterly reports to Purchaser of the number of lots of Product made and thenumber of lot failures during the preceding quarter and shall reasonably respond to any informationrequests relating thereto.     **11.5 Sales and Marketing Activities.**Purchaser shall be responsible for establishing a formalwritten program in compliance with the California Comprehensive Compliance Program pursuant toCalifornia Health and Safety Code Sections 119400 et. seq., on or before July 1, 2005, for allapplicable activities of Purchaser and its Affiliates related to the Product which are subject tothis code section. Upon request of Seller, Purchaser shall provide Seller with reasonable evidenceof its compliance with this Section 11.5.     **11.6 Cooperation**. Seller shall provide reasonable assistance to Purchaser in its preparationand filing with appropriate regulatory agencies (both federal and state agencies related toreimbursement and health care insurance) of filings required for the marketing, and distribution ofthe Product to Purchaser Customers in the Territory by Purchaser. Seller and Purchaser shallcooperate in good faith to develop such necessary regulatory strategies which may be required forpurposes of this Agreement, and to allow the Product to be listed on applicable formularies andother drug listings as reasonably requested by Purchaser, and making any applicable filings orregistrations to allow the Product to be included on such formularies or listings, includingMedicare and Medicaid.**ARTICLE 12****FORCE MAJEURE**     **12.1 Force Majeure.**If either party is prevented from performing any of its obligationshereunder (except for any monetary payments due hereunder) due directly or indirectly to fire;flood; accident; explosion; equipment or machinery breakdown; sabotage; strike; or any labordisturbance; civil commotions; riots’ invasions; wars (present or future); acts, restraints,requisitions, regulations, or directions or orders of any governmental entity; compliance with anyrequest of any governmental entity; compliance with any request for material represented to be forpurposes of (directly or indirectly) producing articles for national defense or national defensefacilities; shortage of labor, fuel, power or raw materials; inability to obtain raw materials orsupplies; failures of normal sources of supplies; inability to obtain or delays of transportationfacilities; any act of God; any act of the other party or other causes (whether similar ordissimilar to the foregoing); in each case so long as such cause is beyond the reasonable controlof such party (a “Force Majeure Event”), such non-performing party shall not be liable for breachof this Agreement with respect to such non-performance if and to the extent any suchnon-performance is due to a Force Majeure Event. Such non-performance will be excused for as longas such event shall be continuing; provided that, the non-performing party gives immediate writtennotice to the other party of the Force Majeure Event.
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Such non-performing party shall exercise all reasonable efforts to eliminate the Force MajeureEvent and to resume performance of its affected obligations as soon as practicable. In the eventthat, as a result of such Force Majeure Event, a party does not perform all of its obligationshereunder for any period aggregating 120 days within any 360-day period, the other party mayterminate this Agreement on 30 days prior written notice to the non-performing party.**ARTICLE 13****INSURANCE**     **13.1 Insurance.**Each party agrees to procure and maintain in full force and effect during theterm of this Agreement and continuing for a period of not less than 36 months following thetermination or expiration hereof, at its sole cost and expense, product liability insurance inamounts of not less than $2,000,000 per incident and $5,000,000 annual aggregate (provided thatwithin 60 days after Purchaser’s payment of the amount to Seller under Section 3.1(b), the annualaggregate shall be increased to $10,000,000) which insurance shall be written on a “claims made”basis policy form with a reputable insurance carrier and name the other party as an additionalinsured. Each party shall, on request, provide to the other party a copy of a certificate ofcoverage or other written evidence reasonably satisfactory to such requesting party of suchinsurance coverage. Either party may substitute a program of self-insurance for all or part of thethird party insurance required hereunder if reasonably satisfactory to the other party.**ARTICLE 14****CONFIDENTIALITY**     **14.1 Confidentiality.**As used herein, “Confidential Information” shall include allconfidential or proprietary information given to one party by the other party, or otherwiseacquired by such party in its performance of this Agreement, relating to such other party or any ofits Affiliates, including information regarding any of the products of such other party or any ofits Affiliates, information regarding its advertising, distribution, marketing or strategic plansor information regarding its costs, productivity or technological advances, specifications, data,know-how, formulations, product concepts, sample materials, manufacturing processes and othermanufacturing information, business and technical information, pricing and other deal terms,whether in written form or disclosed orally, visually and/or in another tangible form. Neitherparty shall use, exploit or disclose to third parties any Confidential Information of the other andeach party shall insure that its and its Affiliates’ employees, officers, representatives andagents shall not use or disclose to third parties any Confidential Information and upon thetermination of this Agreement shall return to the other or destroy all Confidential Information inwritten form. Confidential Information shall not include information that (i) was lawfully alreadyknown to receiving party at the time of its receipt thereof, (ii) is disclosed to receiving partyafter its receipt thereof by a third party who has a right to make such disclosure withoutviolating any obligation of confidentiality, (iii) is or becomes generally available to the publicthrough no fault of receiving party or (iv) is independently developed by the receiving party asdemonstrated by such party pursuant to contemporaneous written records. The obligations ofconfidentiality set out above shall survive termination or expiration of this Agreement for aperiod of 10 years. Notwithstanding the foregoing, in the event that a party is required underApplicable Law, the rules or regulations of any stock
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exchange or listing body upon which the stock of a party or a party’s parent corporation maythen be traded, or by governmental agency or court of competent jurisdiction to disclose theConfidential Information of the other party, such party shall promptly notify the other party inwriting of all details of the required disclosure and permit the other party a reasonableopportunity to intervene to oppose, limit or condition such disclosure prior to making suchdisclosure, and such party shall make any such disclosure ultimately required in the mostrestrictive fashion, in its reasonable judgment, consistent with the applicable requirementrequiring such disclosure.**ARTICLE 15****PUBLIC ANNOUNCEMENTS; ETC.**     **15.1 Public Announcements.**No public announcement, news release, statement, publication, orpresentation relating to the existence of this Agreement, the subject matter hereof, or eitherparty’s performance hereunder will be made without the other party’s prior written approval, whichapproval shall not be unreasonably conditioned, withheld or delayed. Notwithstanding theforegoing, and subject to the provisions of Article 14 with respect to Confidential Information,either party may make any public disclosure relating to the existence of this Agreement, thesubject matter hereof and its terms, or either party’s performance hereunder that is deemednecessary, in the reasonable judgment of a party, to comply with Applicable Laws or with the rulesor regulations of any stock exchange or listing body upon which the securities of a party or aparty’s parent corporation may then or are intended to be traded or of any governmental agency(e.g., the Securities and Exchange Commission) which regulates such securities (including thefiling of a copy of this Agreement with such governmental agency); provided that, the party makingsuch disclosure shall provide the non-disclosing party with a copy of the intended disclosurereasonably, and to the extent practicable, prior to public dissemination.     **15.2 No Use of Other Party’s Name.**Neither party shall use the name of the other party or anyof its Affiliates for advertising, promotional or other purposes without the prior written consentof the other party.**ARTICLE 16****REPRESENTATIONS AND WARRANTIES**     **16.1 Product Warranty**.          **16.1.1**Seller represents and warrants to Purchaser that all Product supplied in connectionwith this Agreement shall: (i) be manufactured, packaged, tested, stored and handled in compliancein all material respects with cGMP and all other Applicable Laws (for the avoidance of doubt anynon-compliance that would affect Purchaser’s sale or distribution of the Product hereunder shall beconsidered material); and (ii) meet the Specifications and the Product’s ANDA and not beadulterated or misbranded within the meaning of the Act (each of clauses (i) and (ii) beingreferred to collectively herein as the “Product Warranty”). The foregoing Product Warranty shallnot apply to the extent that the failure of any such Product to meet the requirements of thisSection 16.1.1 is caused by the negligent acts or omissions or intentional misconduct of Purchaser,its Affiliates, wholesalers or other customers (including modification or misuse or improperstorage or
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transportation of the Product after shipment to Purchaser, whether by Purchaser, itsAffiliates or any other Person).          **16.1.2**EXCEPT AS EXPRESSLY PROVIDED IN SECTION 16.1.1 ABOVE, SELLER MAKES NO REPRESENTATION ORWARRANTY WITH RESPECT TO THE PRODUCT OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY AS TOMERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR ANY WARRANTY THAT THE PRODUCT IS FREE FROMTHE RIGHTFUL CLAIM OF ANY THIRD PARTY, BY WAY OF INFRINGEMENT OR THE LIKE.     **16.2 Warranties with Regard to Status**.          **16.2.1**Purchaser hereby represents and warrants to Seller that neither it nor any of itsAffiliates is prohibited under any Applicable Laws from selling and distributing the Product(assuming that the ANDA for the Product is approved by FDA) within the Territory and that neitherPurchaser nor any of its Affiliates is a person that is listed by a United States federal agency asdebarred, suspended, proposed for debarment or otherwise ineligible for federal programs in theTerritory.          **16.2.2**Seller hereby represents and warrants to Purchaser that neither it nor any of itsAffiliates is prohibited under any Applicable Laws from manufacturing, selling and distributing theProduct (assuming that the ANDA for the Product is approved by FDA) within the Territory and thatneither Seller nor any of its Affiliates is a person that is listed by a United States federalagency as debarred, suspended, proposed for debarment or otherwise ineligible for federal programsin the Territory.     **16.3 Purchaser Warranties.**Purchaser hereby represents warrants and covenants that:               **(a) **Purchaser Trademarks may be lawfully used as directed by Purchaser;               **(b) **the Product Label, if Labeled in accordance with specifications provided by Purchaser,will comply with the ANDA for the Product and Applicable Laws; and,               **(c) **neither Purchaser nor its Affiliates has filed with the FDA an ANDA for a genericequivalent to Lovenox®.     **16.4 Execution and Performance of Agreement.**Each of Seller and Purchaser represents andwarrants to the other that it has full right, power and authority to enter into and perform itsobligations under this Agreement. Each of Seller and Purchaser further represents and warrants tothe other that the performance of its obligations under this Agreement will not result in aviolation or breach of, and will not conflict with or constitute a default under any agreement,contract, commitment or obligation to which such party or any of its Affiliates is a party or bywhich it is otherwise bound or any Applicable Law.     **16.5 LIMITATION ON LIABILITY OF PARTIES.**EXCEPT WITH RESPECT TO (A) A CLAIM FOR BREACH UNDERARTICLE 14 ABOVE, (B) A CLAIM FOR WILLFUL MISCONDUCT OR FRAUD AND (C) AMOUNTS PAYABLE TO A THIRDPARTY THAT ARE SUBJECT TO INDEMNIFICATION PURSUANT TO ARTICLE 17 BELOW, IN NO EVENT SHALL EITHERPARTY BE LIABLE TO THE OTHER PARTY FOR LOSS OF PROFITS OR
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INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES RESULTING FROM THISAGREEMENT.**ARTICLE 17****INDEMNIFICATION**     **17.1 Indemnification by Seller.**Seller shall indemnify, defend and hold harmless Purchaser(and its Affiliates) from and against any and all damages, liabilities, claims, costs, charges,judgments and expenses (including reasonable attorneys’ fees) (collectively “Damages”) that may besustained, suffered or incurred by Purchaser (or its Affiliates) arising from or relating to anyclaim, action or proceeding made or brought by a third party against the Purchaser (or itsAffiliates) to the extent arising from (a) the actual or alleged breach by Seller of any warranty,representation, covenant or agreement made by Seller in this Agreement; (b) negligent acts oromissions or intentional misconduct of Seller or its Affiliates; (c) any Product recall or seizure(other than a Purchaser Recall to the extent provided under Section 11.3.2); or (d) any ProductLiability Claims (other than as provided in Section 17.2(d) below); provided, however, that in eachsuch case above, Seller shall not be liable to Purchaser hereunder to the extent such Damages arisefrom the negligent acts or omissions or intentional misconduct of Purchaser or its Affiliates,wholesalers or other customers (including modification or misuse or improper storage ortransportation of the Product after shipment to Purchaser, whether by Purchaser, its Affiliates orany other Person) or such other actions or inactions for which Purchaser is obligated to indemnifySeller under Section 17.2 below.     **17.2 Indemnification by Purchaser.**Purchaser shall indemnify, defend and hold harmless Seller(and its Affiliates) from and against any and all Damages, that may be sustained, suffered orincurred by Seller (or its Affiliates) arising from or relating to any claim, action or proceedingmade or brought by a third party against the Seller (or its Affiliates) to the extent arising from(a) the actual or alleged breach by Purchaser of any warranty, representation, covenant oragreement made by Purchaser in this Agreement; (b) improper Product marketing, sales ordistribution activities of Purchaser or its Affiliates, including any commercial arrangementsentered into by Purchaser with its customers or other third parties; (c) negligent acts oromissions or intentional misconduct of Purchaser or its Affiliates (including modification ormisuse or improper storage or transportation of the Product by Purchaser, its Affiliates or otherPerson acting on behalf of Purchaser or its Affiliates, excluding wholesalers and customers); (d)any Product Liability Claims to the extent arising from Purchaser’s breach hereof or the negligentacts or omissions or intentional misconduct of Purchaser and its Affiliates (including modificationor misuse or improper storage or transportation of the Product by Purchaser, its Affiliates orother Person acting on behalf of Purchaser or its Affiliates, excluding wholesalers and customers);or (e) any Purchaser Recall (except as otherwise provided in Section 11.3.2); provided, however,that, in each such case above, Purchaser shall not be liable to Seller hereunder to the extent suchDamages arise from the negligent acts or omissions or intentional misconduct of Seller or itsAffiliates or such other actions or inactions for which Seller is obligated to indemnify Purchaserunder Section 17.1 above.     **17.3 Claims.**Each indemnified party agrees to give the indemnifying party prompt writtennotice of any matter upon which such indemnified party intends to base a claim for indemnificationunder this Article 17; provided, however, that failure to give such prompt notification shall notaffect the indemnification provided hereunder except to the extent the
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indemnifying party shall have been actually materially prejudiced as a result of such failure.The indemnified party shall permit, and shall cause its employees and agents to permit, theindemnifying party to defend or settle any such action, claim or liability and agrees to thecomplete control of such defense or settlement by the indemnifying party; provided, however, thatsuch settlement does not impose any obligation or burden on the indemnified party without the priorwritten consent of the indemnified party. No such action, claim or liability shall be settled bythe indemnified party without the prior written consent of the indemnifying party (which consentshall not be unreasonably conditioned, withheld or delayed) and the indemnifying party shall not beresponsible for any fees or other costs incurred other than as provided in this Article 17. Theindemnified party, its employees, agents and affiliates shall cooperate reasonably with theindemnifying party and its legal representatives in the investigation and defense of any action,claim or liability covered by this indemnification at the sole expense of the indemnifying party.The indemnified party shall have the right, but not the obligation, to be represented by counsel ofits own selection and at its own expense.Notwithstanding Sections 17.1 and 17.2 above,and by way of clarification, neither party shall be obligated to indemnify the other partyhereunder for modification or misuse or improper storage or transportation of the Product bywholesalers or the customers of either party.     **17.4 Third Party Infringement Claims.**In the event any claim or action for infringement ofany patent, trademark, or other intellectual property right shall be made or brought by a thirdparty against Seller, Purchaser or any of their respective Affiliates because of, or inanticipation of, the manufacture and supply of Product by Seller to Purchaser hereunder, or themarketing, sale or distribution of such Product to Purchaser Customers in the Territory byPurchaser hereunder (a “Third Party Infringement Claim”), the party first receiving such notice ofthe Third Party Infringement Claim shall promptly notify the other party. With respect to theThird Party Infringement Claim, Seller and Purchaser each hereby agrees that all Damages arisingfrom or related to the Third Party Infringement Claim (including any legal fees and associatedcosts incurred in defending the Third Party Infringement Claim and any fees, royalties or otheramounts paid in settlement or upon judgment) shall be shared as follows:               **(a) **Except as provided in clause (b) below, Seller shall be 100% responsible for all Damagesarising from any Third Party Infringement Claim, including any fees, royalties or other amountsagreed to be paid in settlement or upon judgment of the Lawsuit or otherwise; and               **(b) **Purchaser shall be 100% responsible for all Damages arising from any Third PartyInfringement Claim with respect to the use of Purchaser Trademarks.Each party agrees to indemnify the other party to ensure that Damages arising from any Third PartyInfringement Claim are allocated in accordance with clauses (a) and (b) above. Unless otherwiseagreed to by the parties, Seller shall control the defense any Third Party Infringement Claimdescribed in clause (a) above and Purchaser shall control the defense of any Third PartyInfringement Claim described in clause (b) above. The party controlling the defense of any ThirdParty Infringement Claim shall have the sole right to defend or settle any such Third PartyInfringement Claim; provided, however, that such settlement does not impose any obligation orburden on the other party without the prior written consent of the other party (which consent shallnot be unreasonably withheld). The party controlling the defense of any Third Party InfringementClaim shall keep the other party, at its request, materially informed of the status and progress ofthe defense of the Third Party Infringement Claim. No Third Party Infringement Claim shall besettled by the
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party who is not controlling the defense of such Third Party Infringement Claim without the priorwritten consent of the party controlling such defense. The non-controlling party, its employees,agents and Affiliates shall reasonably cooperate with the party (and its legal representatives)controlling the defense of any Third Party Infringement Claim in the investigation and defense ofsuch Third Party Infringement Claim. Notwithstanding the above, and by way of clarification,neither party shall be obligated to indemnify the other party hereunder for modification or misuseof the Product by the other party or by wholesalers or the customers of either party. Theprovisions of this Section 17.4 shall be notwithstanding any conflicting provisions set forth inthis Agreement, including Sections 17.1, 17.2 and 17.3.     **17.5 No Right of Offset.**Purchaser shall have no right to set off or retain any amountsotherwise payable to Seller under Articles 3 or 4 of this Agreement, including any amounts payableto satisfy any indemnification claims Purchaser may have hereunder.**ARTICLE 18****MISCELLANEOUS**     **18.1 Governing Law.**This Agreement and all acts and transactions pursuant hereto and therights and obligations of the parties hereto shall be governed, construed and interpreted inaccordance with the laws of the State of New York, without reference to rules of conflicts orchoice of laws.     **18.2 Relationship of the Parties.**The relationship of Purchaser and Seller established bythis Agreement is that of independent contractors, and nothing contained herein shall be construedto (i) give either party any right or authority to create or assume any obligation of any kind onbehalf of the other or (ii) constitute the parties as partners, joint venturers, co-owners orotherwise as participants in a joint or common undertaking.     **18.3 Third Party Rights.**Nothing in this Agreement shall be deemed to create any third partybeneficiary rights in or on behalf of any other person.     **18.4 Entire Agreement.**It is the mutual desire and intent of the parties to provide certaintyas to their respective future rights and remedies against each other by defining the extent oftheir mutual undertakings as provided herein. The parties have in this Agreement incorporated allrepresentations, warranties, covenants, commitments and understandings on which they have relied inentering into this Agreement, and, except as provided for herein, neither party makes any covenantor other commitment to the other concerning its future action. Accordingly, this Agreement (i)constitutes the entire agreement and understanding between the parties with respect to the subjectmatter hereof and there are no promises, representations, conditions, provisions or terms relatedthereto other than those set forth in this Agreement and (ii) supersedes all previousunderstandings, agreements and representations between the parties, written or oral. Nomodification, change or amendment to this Agreement shall be effective unless in writing signed byeach of the parties hereto.     **18.5 Interpretation.**Unless the context of this Agreement otherwise requires, (i) words ofany gender include each other gender; (ii) words using the singular or plural number also includethe plural or singular number, respectively; (iii) the terms “hereof,” “herein,” “hereby,” and
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derivative or similar words refer to this entire Agreement; (iv) the terms “Article” and“Section” refer to the specified Article and Section of this Agreement, and (v) the terms“include,” “includes,” or “including” shall be deemed to be followed by the words “withoutlimitation” unless otherwise indicated. Whenever this Agreement refers to a number of days, unlessotherwise specified, such number shall refer to calendar days. The headings in this Agreement arefor reference purposes only and shall not affect in any way the meaning or interpretation of thisAgreement.     **18.6 Notices.**All notices and other communications hereunder shall be in writing. Allnotices hereunder of an indemnity claim, a Force Majeure Event, default or breach hereunder, or, ifapplicable, termination or renewal of the term hereof, or any other notice of any event ordevelopment material to this Agreement taken as a whole, shall be delivered personally, or sent bynational overnight delivery service or postage pre-paid registered or certified U.S. mail, orfacsimile, and shall be deemed given: when delivered, if by personal delivery or overnightdelivery service; five business days after deposit in the U.S. mail, if mailed; or upon receipt ofelectronic confirmation of transmission, if sent by facsimile and followed on the same day bydeposit in the U.S. mail. Notice shall be addressed:
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     If to Seller:                     Amphastar Pharmaceuticals, Inc.