1.4 “**Affiliate**” means, with respect to any entity, any other entity that directly orindirectly controls, is controlled by, or is under common control with, such entity. An entityshall be regarded as in control of another entity if it owns, or directly or indirectly controls,at least fifty percent (50%) of the voting stock or other ownership interest of the other entity,or if it directly or indirectly possesses the power to direct or cause the direction of themanagement and policies of the other entity by any means whatsoever.          1.5 “**ANDA**” means an Abbreviated New Drug Application and any supplements thereto.          1.6 “**ANDA Product**” means each of the following products (including any future packagingchanges or pack sizes): (a) the **XXXXX**Products; (b) the **XXXXX**Products; (c) the **XXXXX**Products;and (d) the **XXXXX**Products.          1.7 **“Authorized Product”**means any product that is in the same form as a New Product approvedunder a NDA held by Medicis or its sublicensee but is relabeled and marketed as a generic product.          1.8 “**Confidential Information**” means all non-public materials, information and data concerningthe disclosing party and its operations that is disclosed the disclosing party to the receivingparty pursuant to the Confidentiality Agreement, this Agreement, the License Agreement or theDistribution Agreement (as defined in the License Agreement), orally or in written, electronic ortangible form, or otherwise obtained by the receiving party through observation or examination ofthe disclosing party’s operations. Confidential Information includes, but is not limited to,information about the disclosing party’s financial condition and projections; business, marketingor strategic plans; sales information, customer lists; price lists; databases; trade secrets;product prototypes and designs; techniques, formulae, algorithms and other non-public processinformation. Notwithstanding the foregoing, Confidential Information of a party shall not includethat portion of such materials, information and data that, and only to the extent, the recipientcan establish by written documentation: (a) is known to the recipient as evidenced by its writtenrecords before receipt thereof from the disclosing party, (b) is disclosed to the recipient free ofconfidentiality obligations by a Third Party who has the right to make such disclosure withoutobligations of confidentiality, (c) is or becomes part of the public domain through no fault of therecipient, or (d) the recipient can reasonably establish is independently developed by persons onbehalf of recipient without the use of the information disclosed by the disclosing party.          1.9 **“Confidentiality Agreement”**means the letter agreement dated February 24, 2008 from DavidGreenbaum, counsel for Medicis Pharmaceutical Corporation, to Roger Chin, counsel for ImpaxLaboratories, Inc.          1.10 **“Control”**means with respect to any material, information, or intellectual propertyright, that a party (a) owns such material, information, or intellectual property right, or (b) hasa license or right to use such material, information, or intellectual property right, in each casewith the ability to grant to the other party access, a right to use, a license, or a sublicense (asapplicable) to such material, information, or intellectual property right on the terms and
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conditions set forth herein, without violating the terms of any agreement or other arrangementwith any Third Party.          1.11 “**Cost of Sales**” means, on a per ANDA Product basis and for a given calendar quarter, thesum of the Manufacturing Costs, Distribution and Sales Costs, and Third Party IP Costs for suchANDA Product sold during such calendar quarter.          1.12 “**Development Plan**” means the plan for the research and development of the New Product,which plan shall be consistent with Section 2.1, prepared by the parties and periodically updatedupon mutual written agreement of the parties.          1.13 “**Development Program**” means the development program described in Section 2.1.          1.14 “**Diligent Efforts**” means with respect to the research, development or commercializationof a product, as applicable, efforts and resources commonly used in the pharmaceutical industry fora product at a similar stage of research, development or commercialization, and having similarmarket potential. Diligent Efforts shall be determined by taking into account the characteristicsof the product, the technical risk and stage of research, development, or commercialization of theproduct, the cost-effectiveness of efforts or resources applied towards such product, thecompetitiveness of alternative Third Party products that are or are expected to be in the relevantmarketplace, the regulatory and business environment, the likelihood of achieving the goal of suchresearch or of obtaining regulatory approval and product reimbursement (as applicable), theprofitability of the product (without taking into account any payments to be made to other partypursuant to this Agreement) and the relative potential for product liability exposure. DiligentEfforts shall be determined on a product and market basis, and it is anticipated that the level ofefforts and resources will change over time reflecting changes in the status of the product or themarket involved.          1.15 “**Distribution and Sales Costs**” means, on a per ANDA Product basis and for a givencalendar quarter, (a) an amount equal to **XXXXX**% of Net Sales of such ANDA Product during suchquarter, which amount shall serve as an estimate of the costs for the distribution of such ANDAProduct by Impax for use or sale in the Territory, including freight, insurance and other costs ofshipping such ANDA Product, (b) an amount equal to **XXXXX**% of Net Sales of such ANDA Product in theTerritory during such quarter, which amount shall serve as an estimate of the costs of marketing,selling and promoting such ANDA Product, and (c) the actual direct cost incurred with respect to**XXXXX**.          1.16 **“XXXXX NDA”**means the following NDA, which was approved prior to the Effective Date: NDA#**XXXXX**.          1.17 “**XXXXX NDC**” means the following NDCs: **XXXXX**.          1.18 “**XXXXX Products**” means one or more products that are generic equivalents of the productsthat are (a) marketed under the trademark **XXXXX**and (b) approved pursuant the **XXXXX**NDA or asupplement thereto and/or sold under a **XXXXX**NDC, in each case at any strength, dosage or form;provided that with respect to any obligations on Impax
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under Section 5.1.1, “**XXXXX Product**” shall mean only the **XXXXX**strengths and further providedthat Impax’s obligations under Section 5.1.2 and **XXXXX**Product, as defined below.          1.19 “**XXXXX Product**” means the **XXXXX**Product.          1.20 “**Exclusion Lists**” mean: (a) the HHS/OIG List of Excluded Individuals/Entities (availablethrough the Internet at http://www.oig.hhs.gov); and (b) the General ServicesAdministration’s List of Parties Excluded from Federal Programs (available through the Internet athttp://www.epls.gov).          1.21 “**FDA**” means the United States Food and Drug Administration or any successor entitythereto.          1.22 “**FD&C Act**” means the United States Federal Food, Drug and Cosmetic Act, as may be amendedfrom time to time.          1.23 “**Gross Profit**” means, on a per ANDA Product basis and for a given calendar quarter, theremainder, if any, that results from Net Sales of such ANDA Product in the Territory minus the Costof Sales of such ANDA Product. **XXXXX**.          1.24 “**Impax Know-How Rights**” means all trade secret and other know-how rights in and to alldata, information, compositions and other technology (including, but not limited to, formulae,procedures, protocols, techniques and results of experimentation and testing) which are necessaryor useful to make, use, develop or sell the New Product and which Impax Controls as of theEffective Date or during the term of this Agreement; provided, however, that the foregoing shallnot apply to any trade secret or other know-how rights in and to all data, information,compositions or other technology that that (a) is Controlled by an entity that becomes an Affiliateof Impax as a result of such entity’s or its Affiliate’s acquisition of Impax and (b) wasControlled by such entity prior to such acquisition.          1.25 “**Impax IP Rights**” means the Impax Patent Rights and Impax Know-How Rights.          1.26 “**Impax Patent Rights**” means all patents and patent applications (including utility, modeland design patents and certificates of invention) in any country of the world that claim or coverthe New Product or the manufacture or use thereof and that Impax (but not including any entity thatfirst becomes an Affiliate of Impax after the Effective Date) Controls as of the Effective Date orduring the term of this Agreement; provided, however, that the foregoing shall not apply to anypatent or patent application that (a) is Controlled by an entity that becomes an Affiliate of Impaxas a result of such entity’s or its Affiliate’s acquisition of Impax and (b) was Controlled by suchentity prior to such acquisition.          1.27 “**Ineligible Person**” means a person who: (a) is currently excluded, debarred, suspended,or otherwise ineligible to participate in the Federal health care programs or in Federalprocurement or non-procurement programs; or (b) has been convicted of a criminal offense that fallswithin the ambit of 42 U.S.C. § 1320a-7(a), but has not yet been excluded, debarred, suspended, orotherwise declared ineligible.
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          1.28 **“License Agreement”**means the License and Settlement Agreement between Medicis and Impaxdated as of the Effective Date.          1.29 “**Manufacturing Costs**” means (a) the delivered cost to Impax of an ANDA Product for use orsale in the Territory if a Third Party is the manufacturer of such ANDA Product, or (b) where Impaxis itself the manufacturer, the sum of Materials Costs, labor costs, Overhead and Freight And Taxesincurred by Impax to produce such ANDA Product for use or sale in the Territory, including thecosts of rejected or failed batches of such ANDA Product. As used herein, **“Materials Cost”**meansImpax’s procurement costs for (i) raw materials (both active and inactive ingredients), and (ii)packaging, labeling and storing materials, incurred in connection with the manufacture, testing,labeling, purchasing and distribution of such ANDA Product; **“Overhead”**means all indirect costs ofmanufacturing such ANDA Product including, without limitation, insurance, inspection, testing,quality control and quality assurance, depreciation, maintenance and repair costs, all asdetermined in accordance with the U.S. GAAP, and “**Freight And Taxes**” means all insurance, freightand shipping charges, import taxes and duties and similar taxes and duties levied by the UnitedStates or other government entity with jurisdiction, and port and loading charges, all to theextent not already deducted under Distribution and Sales Costs.          1.30 “**NDA**” means a New Drug Application as defined in the FD&C Act or FDA Regulations (21CFR).          1.31 “**Net Sales**” means, with respect to a given ANDA Product or New Product, the aggregategross price of such ANDA Product or New Product received, in the case of an ANDA Product, by Impaxor its sublicensees or, in the case of a New Product, by Medicis or its sublicensees (except withrespect to a sublicensee’s sales of Authorized Products), in each case from unaffiliated retailers,distributors or other customers, less the sum of the following items, all of which must directlyrelate to the sale and distribution of such ANDA Product or New Product and be determined inaccordance with GAAP applied in a manner consistent with past practices of the applicable party:(a) returns, credits, rebates, discounts, allowances, promotional payments, free goods, chargebacksand other price reduction programs customary to the trade or required by law, (b) actual packaging,freight and insurance costs incurred in transporting such New Product in final form to customers(this clause (b) shall not apply to ANDA Products, for which an allowance has already beenincorporated into Distribution and Sales Costs), (c) sales, valued-added and other taxes, (d)customs duties, surcharges and other governmental charges, (e) administrative fees, marketing feesand other similar fees, payments or credits paid to unaffiliated third parties customary to thetrade or required by law, and (f) commercially reasonable write-offs for doubtful accounts. Salesbetween or among a party and its Affiliates shall not be included in Net Sales unless such party orits Affiliates are the end user of such ANDA Product or New Product, as applicable.          1.32 “**New Product**” means (a) a product that (i) contains **XXXXX**and (ii) is to be developed bythe parties under this Agreement with the goal of achieving the Target Product Profile, or (b) anyother product agreed to in writing by the parties to serve as a substitute for the productdescribed in subsection (a) above (in which case the product descried in subsection (a) shall ceaseto be a “New Product”), in each case including any **XXXXX**.
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          1.33 “**New Product Technology**” means all discoveries, inventions, improvements and othertechnology that is developed by Impax, Medicis or both in the conduct of the Development Program.          1.34 “**Non-Specific Technology**” means any of the New Product Technology (including withoutlimitation manufacturing processes) that is not specific to the New Product.          1.35 **“XXXXX NDA”**means the following NDA, which was approved prior to the Effective Date: NDA#**XXXXX**.          1.36 “**XXXXX NDC**” means the following NDCs: **XXXXX**.          1.37 **“XXXXX Products”**means one or more products that are generic equivalents of the productsthat are (a) marketed under the trademark **XXXXX**and (b) approved pursuant the **XXXXX**NDA or asupplement thereto and/or sold under an **XXXXX**NDC, in each case at any strength, dosage or form;provided that with respect to any obligations on Impax under Sections 5.1.1 and 5.1.2 and **XXXXX**strength.          1.38“**Oral Acne Field**” means the treatment or palliationof acne (including acne rosacea) through an oral administration.          1.39 **“Regulatory Approval”**means, with respect to a particular regulatory jurisdiction, theapproval of a NDA or its equivalent in such regulatory jurisdiction by the applicable regulatoryauthority in such regulatory jurisdiction and such other regulatory approvals as are required inorder to market the New Product in such regulatory jurisdiction.          1.40 **“XXXXX NDA”**means the following NDA, which was approved prior to the Effective Date: NDA#**XXXXX**.          1.41 “**XXXXX NDC**” means the following NDCs: **XXXXX**.          1.42 **“XXXXX Products”**means one or more products that are generic equivalents to the productsthat are (a) marketed under the trademark **XXXXX**and (b) approved pursuant the **XXXXX**NDA or asupplement thereto and/or sold under a **XXXXX**NDC, in each case at any strength, dosage or form;provided that with respect to any obligations on Impax under Section 5.1.1 and **XXXXX**strength.          1.43 “**Steering Committee**” means the committee composed of representatives of Impax and Medicisdescribed in Section 2.3 below.          1.44 “**Target Product Profile**” means the product criteria set forth in Exhibit A.          1.45 **“Territory”**means the United States of America including its territories and possessions.          1.46 **“Third Party**” means any person or entity other than Medicis or Impax.
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          1.47 **“Third Party IP Costs”**means, on a per ANDA Product basis and for a given calendarquarter, the royalties and other payments (including upfront fees and milestone payments) paid byImpax to a Third Party in consideration for a license or other rights to intellectual propertynecessary or useful for the manufacture, development, commercialization, use, or sale of such ANDAProduct in the Territory.          1.48 “**Valid Claim**” means a claim in an issued patent, whether such patent issues before, on orafter the Effective Date, in the Impax Patent Rights or any issued patent owned by Medicis pursuantto Section 3.3, in each case that has not: (a) expired or been canceled; (b) been declared invalidby a decision of a court or other appropriate body of competent jurisdiction from which no appealhas been timely taken or may be taken (e.g., as a result of denial of a petition for writ ofcertiorari); (c) been admitted to be invalid or unenforceable through reissue or disclaimer,provided that actions taken during reexamination shall not, prior to the issuance of a finalcertificate of reexamination, be construed as admissions of invalidity or unenforceability of theclaims contained in such patent prior to the initiation of such reexamination; or (d) beenabandoned.     2. DEVELOPMENT PROGRAM; STEERING COMMITTEE.          2.1 Overview. The goal of the Development Program is to develop the New Product.Each party’s obligations under the Development Program shall be as set forth in this Section 2.1 oras agreed in writing by the parties after the Effective Date. Each party shall use commerciallyreasonable efforts to timely conduct its obligations under the Development Programs in accordancewith the Development Plan. Subject to Medicis’ payment of the amount set forth in Section 6.1,each party shall bear its own costs to conduct its obligations under the Development Program.Impax shall use commercially reasonable efforts to use its proprietary technology in existence asof the Effective Date to formulate a product that meets or approaches the Target Product Profileand to perform standard in vitro analytic testing upon such resulting New Product to determinewhether it meets the Target Product Profile criteria. Without limiting the generality of theforegoing, Impax shall perform no more than three (3) in vivopharmacokinetic studies upon such New Product to determine whether itmeets the Target Product Profile criteria. Impax shall also provide a reasonable amount of technicaladvice to Medicis with respect to pre-clinical manufacturing scale up work for the New Product.For clarity, Impax shall not have any obligation to (i) perform morethan three (3) in vivo pharmacokinetic studies in the course ofperforming the Development Program, (ii) perform any manufacturingscale up work for the New Product, (iii) manufacture the NewProduct for clinical (except for the 3 pharmacokinetic studiesdescribed above) or commercial use, (iv) make any filings with the FDA or any other regulatory agency with respect tothe New Product, (v) conduct any clinical trials for the NewProduct (except for the 3 pharmacokinetic studies described above) or (vi) conduct anycommercialization-related activities with respect to the New Product. Impax shall not incorporateany know-how, patented technology or other intellectual property Controlled by Impax into the NewProduct, the New Product Technology or the manufacturing process therefor without notifying Medicisin writing. If Medicis notifies Impax in writing, within thirty (30) days of Impax’s notice, thatMedicis, based on its freedom to operate analysis, has a good faith concern that the use of suchknow-how, technology or intellectual property with respect to the New Product may infringe theintellectual property of a Third Party, then the parties will discuss such matter and, if suchdiscussion does not reasonably resolve Medicis’ concern, then Medicis will notify Impax in writingwithin thirty (30) days of such discussion and Impax, following receipt of such notice, will notincorporate such know-how, technology or intellectual property into the New Product.
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          2.2 Amendment of Development Plan. The Development Plan may be amended from time totime by mutual written agreement of the parties or by the Steering Committee pursuant to Section2.3.1.          2.3 Steering Committee.               2.3.1 Composition of the Steering Committee. The Steering Committee shall foster thecollaborative relationship between the parties and shall in particular monitor the progress of theDevelopment Program and Impax’s progress with respect to the ANDA Products. The Steering Committeeshall be comprised of two (2) named representatives of Impax and two (2) named representatives ofMedicis. Each party shall appoint its respective representatives to the Steering Committee fromtime to time, and may substitute one or more of its representatives, in its sole discretion,effective upon notice to the other party of such change but shall use commercially reasonableefforts to maintain stability of Steering Committee representation. The Steering Committee shallnot have the power to amend the terms of this Agreement but shall have the power to change theDevelopment Plan upon agreement of at least one (1) representative of the Steering Committee fromeach party.               2.3.2 Meetings. The Steering Committee shall meet not less than four (4) times eachcalendar year, on such dates and at such times and places as agreed to by Impax and Medicis,alternating between Scottsdale, Arizona and Hayward, California or such other locations as theparties shall agree, including without limitation via teleconference. At such meetings, theSteering Committee shall discuss the progress of the Development Program and set prioritiestherefor.               2.3.3 Committee Actions. Any approval, determination or other action agreed to by allof the members of the Steering Committee present at the relevant Steering Committee meeting shallbe the approval, determination or other action of the Steering Committee; provided, however, thatat least one (1) representative of each party is present at such meeting, and that such approval,determination or other action is documented in (a) a writing signed by a representative of eachparty at such meeting or (b) the approved minutes for such meeting. The Steering Committee alsomay act by unanimous written consent without a meeting or between meetings.               2.3.4 Steering Committee Minutes and Reports. One representative of each party shallbe designated to take minutes of each Steering Committee meeting. Within fifteen (15) daysfollowing each Steering Committee meeting during the term of the Agreement, the Steering Committeeshall prepare and provide to each party a reasonably detailed written report which shall summarizethe outcome of the meeting.               2.3.5 Term. The term of the Steering Committee shall commence on the Effective Dateand continue until Impax has completed its obligations under the Development Plan.          2.4 Records. Impax shall maintain complete and accurate records of all work itconducts under the Development Program and all results, data and developments made in connectiontherewith. Such records shall be complete and accurate and shall fully and properly
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reflect all work done and results achieved in the performance of the Development Program insufficient detail and in good scientific manner appropriate for patent and regulatory purposes.Medicis shall have the right to review and copy such records (including raw data and scientificnotebooks) at reasonable times to the extent necessary for Medicis to exercise its rights underthis Agreement with respect to New Product Technology and the development and commercialization ofthe New Product.          2.5 Reports. Within thirty (30) days following the end of each calendar quarterduring the term of the Development Program, Impax shall prepare and deliver to Medicis a writtensummary report which shall describe the research performed to date under the Development Programand all results, analysis and conclusions thereof.     3. INTELLECTUAL PROPERTY.          3.1 Research License. During the term of the Development Program, Medicis herebygrants to Impax a fully paid, non-exclusive, non-transferable (except as permitted in Section 11.6)license (without the right to grant sublicenses), under all patents, know-how and otherintellectual property rights Controlled by Medicis, for the sole purpose of conducting theDevelopment Program. Prior to engaging any subcontractors to perform work under the DevelopmentProgram, Impax shall notify Medicis in writing of the names and addresses of the subcontractors sothat Medicis may screen such subcontractors against the Exclusion Lists and any other legalrequirements. If, within fourteen (14) days following submission of the list to Medicis, Medicisdoes not object to the use of such subcontractors on the basis that such subcontractors fail tocomply with the foregoing requirements or the representations under Section 9.2, Impax may proceedwith use of such subcontractors. The foregoing shall not relieve Impax of its requirements underSection 9.2.          3.2 License Grants.               3.2.1 Subject to the terms and conditions of this Agreement, Impax hereby grants to Medicis anexclusive, royalty-bearing, irrevocable, non-transferable (except as permitted in Section 11.6),worldwide license (with the right to grant sublicenses through multiple tiers) under the Impax IPRights, to make, have made, use, offer for sale, sell and import the New Product.               3.2.2 Subject to the terms and conditions of this Agreement, Medicis hereby grants to Impax aperpetual, royalty-free, fully paid, irrevocable, non-transferable (except as permitted in Section11.6), worldwide exclusive license (with the right to grant sublicenses through multiple tiers)under the patent and other intellectual property rights owned by Medicis pursuant to Section 3.3,to make, have made, use, offer for sale and import the Non-SpecificTechnology for all uses outside the Oral Acne Field.          3.3 New Product Technology. Impax shall promptly disclose to Medicis all New ProductTechnology. Medicis shall solely own all right, title and interest in and to the New ProductTechnology and all patent and other intellectual property rights therein. Impax hereby assigns toMedicis all of its right, title and interest in and to the New Product Technology and all patentand other intellectual property rights therein. Impax shall perform, during and after the
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term of this Agreement, all acts that Medicis reasonably deems necessary or desirable topermit and assist Medicis, at Medicis’ expense, in obtaining, perfecting and enforcing the fullbenefits, enjoyment, rights and title throughout the world in the New Product Technology and allpatent and other intellectual property rights therein. If Medicis is unable for any reason, aftercommercially reasonable efforts, to secure Impax’s signature to any document required to file,prosecute, register or memorialize the assignment of any rights to the New Product Technology asprovided under this Agreement, Impax hereby irrevocably designates and appoints Medicis andMedicis’ duly authorized officers and agents as Impax’s agents and attorneys-in-fact to act for andon Impax’s behalf and instead of Impax to take all lawfully permitted acts to further the filing,prosecution, registration, memorialization of assignment, issuance and enforcement of such rights,all with the same legal force and effect as if executed by Impax. The foregoing is deemed a powercoupled with an interest and is irrevocable. Medicis shall have the world-wide right to controlthe drafting, filing, prosecution, maintenance and enforcement of patents covering the New ProductTechnology.          3.4 No Implied Licenses. Except as explicitly set forth in this Agreement, neitherparty grants to the other party any license, express or implied, under its patents or otherintellectual property.     4. DEVELOPMENT AND COMMERCIALIZATION OF NEW PRODUCT          4.1 Marketing of the New Product. Medicis shall have the sole right to make, use,sell, distribute, market, exploit or otherwise commercialize the New Product. Medicis shall useDiligent Efforts to obtain Regulatory Approval for the New Product in the Territory. Medicis’efforts with respect to the commercialization of the New Product shall be in the sole discretion ofMedicis. Impax acknowledges and agrees that it shall have no right under this Agreement to make,have made, use, sell, distribute, market, exploit or otherwise commercialize the New Product exceptin the course of performing its obligations under the Development Program.          4.2 Exclusive Relationship. The parties acknowledge and agree that Impax will obtainaccess to Confidential Information of Medicis with respect to the Original Products and anydevelopment work relating to the New Product, all of which may provide Impax with a competitiveadvantage. Accordingly, during the term of this Agreement and for **XXXXX** thereafter(unless this Agreement is terminated on account of Medicis’ uncured material breach of its paymentobligations under this Agreement), Impax shall not, and nor shall Impax directly or indirectlyencourage or assist any Third Party to, develop and/or commercialize any product that contains**XXXXX**; provided, however, that such restriction shall not apply to **XXXXX**.     5. DEVELOPMENT AND COMMERCIALIZATION OF ANDA PRODUCTS          5.1 Development.               5.1.1 General Obligation. Impax shall use Diligent Efforts to obtain RegulatoryApproval in the Territory for each ANDA Product.
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               5.1.2Specific Obligations. In addition to the obligations set forthin Section 5.1.1, Impax shall have the obligations set forth in thisSection 5.1.2 solely with respect to the **XXXXX** Productand the **XXXXX** Product. Impax shall, to the extent it has notalready done so prior to the Effective Date, conduct an in vivobioequivalence study for each such ANDA Product. If such studydemonstrates bioequivalence, then Impax shall file an ANDA for suchANDA Product. If such study does not demonstrate bioequivalence,Impax shall conduct a second in vivo bioequivalence study for suchANDA Product. If such second study demonstrates bioequivalence, thenImpax shall file an ANDA for such ANDA Product.          5.2Commercialization. Following the FDA’s approval ofImpax’s ANDA for an ANDA Product, Impax shall use DiligentEfforts to commercialize such ANDA Product in the Territory;provided, however, that Impax shall not have any obligation to launchor continue commercialization in the Territory of any ANDA Product atany time when Impax does not have either (a) a license to all patentsand patent applications in the Territory that may claim such ANDAProduct or its manufacture or use, unless Impax is able to obtainsuch license on commercially reasonable terms as determined by Impax,or (b) a final, unappealable resolution in Impax’s favor of allclaims that such ANDA Product or its manufacture or use infringes apatent in the Territory. Impax shall comply with all applicable lawsand regulations in connection with its research, development andcommercialization activities for each ANDA Product in the Territory.          5.3 Reports. Within thirty (30) days following the end of each calendar quarterduring the term of this Agreement, Impax shall prepare and deliver to Medicis a written summaryreport which shall describe its regulatory and commercialization efforts with respect to the ANDAProducts.          5.4 Right of Negotiation. If Impax decides to develop a product that is a genericequivalent of a product that is marketed under the **XXXXX**, **XXXXX**, **XXXXX**or **XXXXX**trademark but isnot an **XXXXX**Product, **XXXXX**Product, **XXXXX**Product or **XXXXX**Product, then Impax shall promptlynotify Medicis in writing. If Medicis is interested in co-developing such product with Impax, thenMedicis shall provide Impax, within thirty (30) days after Impax’s notice, with a written proposalof the terms under which the parties would co-develop such product. Impax shall notify Mediciswithin thirty (30) days of receipt of Medicis’ proposal whether, based on such proposal, it isinterested in engaging in negotiations with Medicis regarding the terms under which the partieswould co-develop such product. Medicis’ right of negotiation pursuant to this Section 5.4 shallexpire with respect to a particular product at the earliest of: (1) thirty (30) days after Impax’sfirst notice pursuant to this Section 5.4, if Medicis has already not provided Impax with theproposal specified above; (2) Medicis’ receipt of notice from Impax that it is not interested inengaging in negotiations with Medicis regarding the terms under which the parties would co-developsuch product; (3) sixty (60) days after Medicis’ receipt of notice from Impax that it is interestedin engaging in negotiations with Medicis regarding the terms under which the parties wouldco-develop such product, if the parties have not entered into a written agreement for suchco-development (such agreement, a “Co-Development Agreement”) and (4) the date of the parties’entry into a Co-Development Agreement.     6. FINANCIAL CONSIDERATIONS.          6.1 Upfront Payment. Within five (5) business days after the Effective Date, Medicisshall pay to Impax a non-creditable, non-refundable payment of Forty Million United States Dollars($40,000,000 USD).          6.2 Milestone Payments. Medicis shall pay to Impax the following non-creditable,non-refundable milestone payments set forth in the following table after the first achievement ofthe corresponding milestone:
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   Milestone Event Milestone Payment(a) **XXXXX** **XXXXX**   (b) **XXXXX** **XXXXX**   (c) **XXXXX** **Five Million United StatesDollars**