**Exhibit 10.71**

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**MANUFACTURING AND SUPPLY AGREEMENT**

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This Manufacturingand Supply Agreement (the "Manufacturing Agreement ") is entered into as of the 23rd day of June, 2011 (the " EffectiveDate "), by and between ThePharmaNetwork, LLC, a New Jersey limited liability company and its wholly owned subsidiary, AscendLaboratories, LLC (together "TPN"), and Elite Pharmaceuticals, Inc. and Elite Laboratories, Inc. (a subsidiary of ElitePharmaceuticals, Inc.), both Delaware corporations ("ELITE").

 

RECITALS

 

WHEREAS, ELITE andTPN (the “Parties”) entered into a Product Collaboration Agreement (“Collaboration Agreement”) on November10, 2006 to collaborate in the development, commercialization, manufacturing and distribution of a generic Methadone Hydrochloride,10 mg tablets pursuant to ANDA #090635 (the “Product”);

 

WHEREAS, by SettlementAgreement, made as of March 11, 2011 (“Settlement Agreement”), the Parties terminated and settled the CollaborationAgreement whereby Elite has agreed to relinquish to TPN all rights and interest in the ANDA in exchange for the payment of certainamount;

 

WHEREAS, ELITE is engagedin the manufacture and commercialization of pharmaceutical products;

 

WHEREAS, ELITE wishesto supply TPN with pharmaceutical products on the terms and conditions set forth in this Manufacturing Agreement;

 

WHEREAS, TPN desiresto have ELITE supply TPN with Product on the terms and conditions set forth in this Manufacturing Agreement; and

 

NOW, THEREFORE, inconsideration of the mutual covenants and agreements set forth in this Manufacturing Agreement, and for other good and valuableconsideration, the receipt of which is hereby acknowledged, the Parties hereto agree as follows:

 

ARTICLE 1

DEFINITIONS

 

Capitalized terms used in this ManufacturingAgreement shall have the meanings ascribed to them in this Article 1 or as otherwise set forth herein. Unless the context indicatesotherwise, the singular shall include the plural and the plural shall include the singular.

 

1.1.          "Act" means the United States Food, Drug and Cosmetic Act, as amended from time to time, and the regulations promulgatedthereunder.

 

1.2.          "Affiliates" means a corporation or any other entity that directly, or indirectly through one or more intermediaries,controls, is controlled by, or is under common control with, the designated party, but only for so long as the relationship exists."Control" shall mean ownership of shares of stock having at least 50% of the voting power entitled to vote for the electionof directors in the case of a corporation. Notwithstanding the foregoing, the owners of preferred stock (or common stock issuedupon conversion thereof) of either party such as financial institutions, venture capital funds and private equity investors shallnot be its "Affiliates" for purposes of this Manufacturing Agreement.

 

1.3.          "ANDA"means Abbreviated New Drug Application No. 0090635 pursuant to Section 505 of the Act (21 U.S.C. Section 355) submitted by TPNto the FDA for approval to market and duly approved by the FDA on November 25, 2009.

 

1.4.          “ELITE”shall mean Elite Pharmaceuticals, Inc., and Elite Laboratories, Inc. (a subsidiary of Elite Pharmaceuticals, Inc.), both Delawarecorporations

 

1.5.          “API” shall mean the active pharmaceutical ingredient of the Product.

 

1.6.           "Batch" means a specificquantity of Product as set forth on Exhibit A that is intended to have uniform character and quality, within specified limits,and is produced according to a single manufacturing order during the same cycle of manufacture.

 

 

 

1.7.         "Certificate of Analysis" means a certificate issued by the manufacturer of a lot or batch of a Product, which certificatecontains such information as provided in the Quality Agreement (as defined below).

 

1.8.          "cGMP"means the current standards for the manufacture of pharmaceuticals, as set forth in the United States Federal Food, Drug and CosmeticAct, as amended, and applicable regulations and guidance promulgated there under, including without limitation the Code of FederalRegulations, as amended from time to time.

 

1.9.           "DEA" means the UnitedStates Drug Enforcement Agency or any successor United States governmental agency performing similar functions with respect tocontrolled substances.

 

1.10         "Facility"means any ELITE manufacturing and packaging facility and Epic Pharm LLC (Laurelton, NY) packaging facility.

 

1.10.         "FDA"means the United States Food and Drug Administration or any successor United States governmental agency performing similar functionswith respect to pharmaceutical products.

 

1.11         “Forecast”shall have the meaning set forth in Section 2.4.

 

1.12         “InitialTerm” shall have the meaning set forth in Section 7.1.

 

1.13.         "Laws"means any present and future national, state, or local law (whether under statute, rule, regulation, or otherwise); requirementsunder permits, orders, decrees, judgments, or directives; and requirements of a Regulatory Agency and any other applicable governmentauthorities, including without limitation Good Manufacturing Practices as promulgated by the United States Food and Drug Administrationand specified in the U.S. Code of Federal Regulations Parts 210 and 211, as amended from time to time. The determination of eitherParty to this Manufacturing Agreement that a Legal Requirement is necessary shall be dispositive for purposes of this ManufacturingAgreement.

 

1.14.         “CollaborationAgreement” means the written agreement entered into by ELITE and TPN as of the 10th day of November, 2006 titled “ProductCollaboration Agreement”.

 

1.15.         “TPN”shall mean ThePharmaNetwork, LLC, a New Jersey limited liability company, and its wholly owned subsidiary, Ascend Laboratories,LLC, a New Jersey limited liability company

 

1.16.         "Product"means the finished pharmaceutical products identified in the attached Exhibit A.

 

1.17.         "ProductSpecifications" means the written specifications for the Product approved by the FDA, and delivered to ELITE thereafter asExhibit B of this Manufacturing Agreement.

 

1.18.         "QualityAgreement" means the agreement to be entered into by the Parties hereto concurrently herewith, setting out the quality assurancestandards to be applicable to the manufacturing services provided by ELITE as set forth in Exhibit C.

 

1.19          “ReleaseCertificate” means a document, also known as a “Certificate of Compliance” or “COC” confirming thatthe Product to which such document refers has been manufactured in accordance with, and in all respects complies with the ANDA,the Product Specifications and cGMP.

 

1.20         “RenewalTerm” shall have the meaning set forth in Section 7.1.

 

1.21         “SettlementAgreement” means the written agreement entered into by ELITE and TPN as of the 11th day of March, 2011 titled “SettlementAgreement.”

 

1.22.         "Shipments"means all shipments made hereunder of Product.

 

1.23.         "Territory"means the United States.

 

1.24.         "UnitedStates" means the United States of America and its states, territories, possessions and protectorates thereof, the Districtof Columbia and the Commonwealth of Puerto Rico.

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**ARTICLE 2**

**SUPPLY OF PRODUCT**

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2.1.           Supply.During the Term of this Manufacturing Agreement as defined below, and subject to the terms and conditions set forth herein, TPNagrees to purchase Product it requires exclusively from ELITE pursuant to this Manufacturing Agreement and ELITE agrees to supplythe Product exclusively to TPN, from the Facility, such Product as is ordered by TPN.

 

 

 

(a)          Productsupplied hereunder shall be supplied as specified in TPN's purchase orders made pursuant to this Article 2 and shall meet the ProductSpecifications.

 

(b)          Eachshipment shall be accompanied by a Certificate of Analysis in English, a Release Certificate and any other documentation requiredby Laws.

 

(c)          Productshall be manufactured in accordance with cGMP and all other applicable Laws and any procedures set forth in the Product Specificationsand Quality Agreement, and such additional procedures as may be agreed upon in writing by the Parties.

 

(d)          Productshall be purchased by TPN under this Manufacturing Agreement at the prices set forth on Exhibit A attached hereto.

 

(e)          NeitherElite nor any of its Affiliates shall supply, solicit, or arrange for, or take orders for the supply of the Product for any person(including any Affiliates) for the purpose of manufacturing, marketing and/or selling the Product for sale in the Territory.

 

(f)           Notwithstandinganything to the contrary contained in this Manufacturing Agreement and subject to the terms of the Settlement Agreement, TPN acknowledgesthat ELITE may develop a generic product containing methadone of any strength (including the filing of an abbreviated new drugapplication relating to such product) and (ii) nothing herein shall be construed to limit or otherwise restrict ELITE from developing,commercializing, manufacturing and distributing any pharmaceutical product similar to, or which may compete with, the Product orthe ANDA.

 

(g)          TPNshall be responsible for the procurement of all API used in connection with the manufacture of the Product; provided, however thatall quality assurance work shall be performed by Elite. Vendor qualification for a new API source shall be at TPN’s cost.

 

2.2.         ProductOrders.

 

(a)          Fromtime to time and subject to the other provisions of this Manufacturing Agreement, TPN shall place orders for Batch quantities ofProduct, specifying delivery dates. Within three (3) days after receipt of TPN’s purchase order, ELITE shall by written notice(which can be by email) confirm to TPN the amount of the Product ordered and the delivery date(s). Acceptance of product ordersshall be contingent upon sufficient quantities of API being available in inventory. Subject to the terms of this ManufacturingAgreement, ELITE shall meet specified delivery dates, provided the delivery dates specified in any such orders shall not be lessthan ninety (90) days from the date of such orders.

 

(b)          ELITEshall use commercially reasonable efforts to accommodate a TPN request for delivery of the Product sooner than as otherwise isrequired under this Manufacturing Agreement; and, if TPN’s business conditions necessitate reduction of Product amount orderedor delay in purchase order delivery dates, then ELITE shall use commercially reasonable efforts to implement such requested changes,provided that, if such changes cause ELITE to incur additional expenses, ELITE shall specify such additional expenses in writingand provide such substantiating documentation reasonably requested by TPN, and ELITE shall make such changes upon TPN’s writtenprior approval of the additional costs. TPN shall pay such additional expenses as and when incurred.

 

2.3.        Acceptance.ELITE shall ensure that the Product ordered by TPN in accordance with this Manufacturing Agreement is shipped in accordance withthe delivery dates specified in TPN's purchase order received by ELITE, and ELITE shall notify TPN promptly of any anticipateddelay

 

2.4.        Forecastsand Production Planning.

 

(a)          Withinfifteen days (15) business days of the Effective Date, TPN will provide ELITE with a written forecast of its requirements for theProduct for the next twelve (12) months (a “Forecast”).

 

(b)          Itis agreed by the Parties that the first three months of the twelve (12) month forecast are binding on TPN (“Firm Period”).It is understood that such Forecasts for the remaining nine (9) months are intended to be good faith estimates only, and shallnot be binding upon TPN subject to Section 7.3(a)(ii).

 

(c)          Ifthis Manufacturing Agreement is renewed under Section 7.1, then during each successive year on or about the fifteenth day afterrenewal, TPN shall provide ELITE with a twelve (12) month forecast of the quantity of Product required by TPN, by month, for thefollowing twelve (12) months each, a Forecast.

 

 

 

(d)          Tothe extent that Product orders specified for shipment in any quarter exceed the most recent TPN Forecast for such quarter by morethan twenty percent (20%) (any excess of twenty percent (20%) or less shall, for this purpose, be deemed not to exceed forecast),ELITE shall use its commercially reasonable efforts to fulfill any such excess contained in TPN's Product orders, but ELITE shallnot be liable to TPN for any inability, despite its reasonable efforts, to fill orders in excess of such forecast.

 

2.5.         Delivery.

 

(a)          AllProducts shall be delivered FOB, Elite’s or Epic Pharma’s loading dock unless otherwise mutually agreed to in writingby the Parties. Risk of loss or of damage to the Product shall remain with ELITE until Product is loaded onto the carrier's vehiclein the United States at which time risk of loss or damage shall transfer to TPN. ELITE shall use a shipper designated by TPN. Productshall be transported in accordance with the Product Specifications and other applicable Laws.

 

(b)          Toaccommodate production variances, a Batch quantity Product order shall be considered filled by Elite if the amount shipped is atleast 90% of the quantity specified for a Batch in Exhibit A.

 

(c)          ELITEshall deliver the Product to TPN with at least eighteen (18) months of remaining shelf life at the shipment date unless TPN requestsfor a delay in shipment set forth in Section 2.2(b).

 

2.7.         Delays.During the Term of this Manufacturing Agreement, if ELITE is not able to timely meet Product orders submitted by TPN pursuant toSection 2.2, ELITE shall promptly notify TPN of the reason for the delay and the date delivery of Product is expected to occurIf shipment is delayed more than 5 business days beyond the date of delivery for reasons other than API supply (including DEA quotaissues), then ELITE shall be responsible for any and all customer bill back penalty actually incurred and documented by TPN tobe paid by ELITE within fifteen (15) days from receipt of such invoice.

 

2.8          Failureto Supply. In the event that at any time ELITE foresees that it will be unable to supply to TPN in whole or in part an orderedor forecasted quantity of the Product by the delivery date for any reason, including Section 9.1 (*Force Majeure*) hereof,ELITE shall notify TPN of such inability as soon as possible, the reasons therefor and the date such inability is expected to end,the quantities of Product available during such period and the proposed amount of resources allocated to TPN in the event suchinability is caused by a shortage resources required for the manufacture of the Product. Once the shortage is resolved, then TPNshall be allocated manufacturing resources based on prorated 12 month average from TPN’s Forecast.

 

2.9         TPNshall be entitled to reject any portion of any shipment of Product that is damaged or deviates materially from the Specifications,the Quality Agreement, cGMP or other Laws without invalidating any remainder of such shipment. TPN shall inspect the Product manufacturedby ELITE upon receipt thereof and shall give ELITE written notice (a “**Deficiency Notice”**) of all claims forProduct that deviate materially from the Specifications, the Quality Agreement, cGMP or other Laws within thirty (30) days afterTPN’ receipt thereof. Should TPN fail to provide ELITE with the Deficiency Notice within the applicable 30-day period, thenthe delivery shall be deemed to have been accepted by TPN on the 30th day after delivery. Notwithstanding the foregoing, if Productis damaged or deviates materially from the Specifications, the Quality Agreement, cGMP or other Laws due to defects not readilydiscoverable using commercially reasonable efforts to discover such defects within thirty (30) days after TPN’ receipt thereof(such defects, “**Latent Defects**”), TPN (or its nominee) shall give ELITE a Deficiency Notice of such Latent Defectwhich shall not be more than fifteen (15) days after TPN’s discovery thereof.

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**ARTICLE 3**

**PRICING AND PAYMENT**

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3.1.         Price.Subject to the remainder of this Article 3, the price to be paid by TPN for Product from ELITE shall be as set forth on ExhibitA.

 

 

 

3.2.         PriceAdjustment. If this Manufacturing Agreement shall be renewed and continue in place more than three (3) years from the EffectiveDate, then ELITE may adjust the Product price for increases in manufacturing costs determined according to GAAP. Any price increaseshall not exceed the increase in the United States Producers' Price Index, Pharmaceuticals Preparations, NAICS 325412, during theperiod since the last increase.

 

3.3.         Invoicingand Payment. Payment terms by TPN for Product supplied by ELITE hereunder meeting Product Specifications shall be net 30 days bycheck or wire transfer, and shall be made without set-off and free and clear of, and without any deduction or withholding for oron account of any taxes, duties, levies, fees or charges, except as otherwise permitted under this Manufacturing Agreement. Anybalances overdue by 60 days shall be charged at the rate of 1% per month. Product shall be invoiced no sooner than the date ofshipment by ELITE. If TPN disputes any invoice, TPN shall notify ELITE that it disputes the accuracy of such invoice specifyingin particularity such inaccuracy. TPN and ELITE shall make good faith efforts to resolve any disputes within fifteen (15) daysthereafter and subject to Section 7.2 a(iii). Any amounts that are disputed shall be due upon the resolution of such dispute.

 

**ARTICLE 4**

**QUALITY AND REGULATORY MATTERS**

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In conjunction with the execution of thisManufacturing Agreement, the Parties shall execute a Quality Agreement in the form of Exhibit C attached hereto.

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**ARTICLE 5**

**WARRANTIES**

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5.1.        Compliancewith cGMP. ELITE warrants that any Product supplied by it hereunder shall be manufactured in accordance with cGMP.

 

5.2.        Conformitywith Specifications. ELITE warrants that, at the time of shipment any Product supplied by it hereunder shall meet the Product Specificationsexcept for any failure to meet Product Specifications arising from the handling, packaging or other act or omission of TPN or subsequententity handling the Product.

 

5.3.        ELITERepresentations. ELITE hereby represents and warrants to TPN that (a) it has obtained all necessary licenses, authorizations andapprovals required by applicable Law, including those required by the FDA, DEA or any other applicable regulatory agency to enterinto this Manufacturing Agreement and perform its obligations hereunder; (b) the execution, delivery and performance of this ManufacturingAgreement by ELITE does not conflict with or constitute a material breach of any order, judgment, agreement, or instrument to whichit is a party; (c) the execution, delivery and performance of this Manufacturing Agreement by ELITE does not require the consentof any person; (d) none of its officers or directors has ever been debarred or convicted of a felony under the laws of the UnitedStates for conduct relating to the development or approval of a drug product or relating to the marketing or sale of a drug product.

 

5.4.        Certificateof Analysis and Release Certificate. ELITE warrants that the Certificate of Analysis, Release Certificate and all other recordsand documents created by ELITE and provided to TPN will be true and correct.

 

5.5.        Nonconformanceand Procedures to Address.

 

(a)          Nonconformance.If TPN discovers any material nonconformance (“Nonconformance”) of Product under this Manufacturing Agreement, TPNshall give prompt written notice to ELITE specifying the Nonconformance.

 

(b)          Procedurefor Nonconformance. Upon notifying ELITE of any Nonconformance of Product TPN shall afford ELITE a reasonable opportunity to inspectthe Product in question and make an appropriate adjustment or replacement. The Parties shall submit any dispute regarding qualityof the Nonconformance of Product to Consumer Product Testing Co., Inc. or Gibraltar Laboratories, Inc., the determination of whichshall be binding on the Parties and the costs of which shall be borne by the Party against whom such determination is rendered.If such laboratory confirms a Nonconformance of the Product in question (or any part of it) at the time of delivery to the carrier,or if the Parties agree that there is a Nonconformance, then, in addition to other remedies that may be available, ELITE shallpromptly refund or provide a credit for any money paid by TPN (including shipping costs) with respect to such Nonconforming Product.ELITE may, at its sole option, either direct TPN to return nonconforming Product to ELITE or have it destroyed by TPN, and certifysuch destruction to ELITE, all at ELITE’s expense.

 

 

 

5.6.       TPNRepresentations. TPN hereby represents and warrants to ELITE that (a) it has obtained all necessary licenses, authorizations andapprovals required by applicable Law, including those required by the FDA, DEA or any other applicable regulatory agency to enterinto this Manufacturing Agreement and perform its obligations hereunder; (b) the execution, delivery and performance of this ManufacturingAgreement by TPN does not conflict with or constitute a material breach of any order, judgment, agreement, or instrument to whichit is a party; (c) the execution, delivery and performance of this Manufacturing Agreement by TPN does not require the consentof any person; (d) none of its officers or directors has ever been debarred or convicted of a felony under the laws of the UnitedStates for conduct relating to the development or approval of a drug product or relating to the marketing or sale of a drug product.

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**ARTICLE 6**

**INDEMNIFICATION AND INSURANCE**

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6.1.        ELITEIndemnity. Subject to Sections 6.2 and 6.4, ELITE shall indemnify and hold harmless TPN and its Affiliates against all third partyclaims, actions, costs, expenses, including court costs and legal fees or other third party liabilities (" Third Party Liabilities") whatsoever in respect of:

 

(a)          ELITE'sand/or its Affiliates', subcontractors' or suppliers' failure to comply with the Product Specifications, cGMP or applicable Laws;

 

(b)          thestorage or handling of the Product after the Effective Date by ELITE or any third party, other than a third party acting on behalfof TPN or its Affiliates;

 

(c)          anymaterial breach of any representation, warranty, covenant or similar promise made under this Manufacturing Agreement or arisingout of this Manufacturing Agreement;

 

(d)          anynegligence or willful misconduct by ELITE and/or any of its employees; and

 

(e)          forany Product that is recalled or withdrawn from the market by reason of ELITE’s material breach of any warranty or other covenantunder this Manufacturing Agreement, TPN will be entitled to reimbursement of any and all documented costs associated with a recallor withdrawal, including the cost of the Product, legal and regulatory consulting fees incurred and reasonable costs associatedwith compliance with the recall or withdrawal (including penalties). If it is determined that the recall or withdrawal should extendto the Product packaged into unit dose or distributed by TPN, then reimbursement to TPN will be extended to include all its expensesof compliance, including manufacturing and packaging costs and materials, return fees, distributor reimbursement, processing expensesuch as customer notification and returns, shipping, disposal and penalty costs associated with the Product of the recalled orwithdrawn lots only.

 

6.2.        TPNIndemnity. Subject to Sections 6.1 and 6.4, TPN shall indemnify and hold harmless ELITE and its Affiliates against all Third PartyLiabilities whatsoever in respect of:

 

(a)          theuse, marketing, storage, distribution, handling or sale of the Product after the Effective Date by TPN or any third party, otherthan a third party acting on behalf of ELITE or its Affiliates;

 

(b)          anyproduct liability in connection with the Product caused by TPN or any third party acting on behalf of TPN or its Affiliates;

 

(c)          anynegligent or wrongful act by TPN and any material breach by TPN of any representation or warranty, covenant or similar promisemade under this Manufacturing Agreement or arising out of this Manufacturing Agreement.

 

 

 

6.3.         Proceduresfor Indemnification. In the event that a Party (the " Indemnified Party ") is seeking indemnification under Sections6.1 or 6.2, the Indemnified Party shall inform the other Party (the " Indemnifying Party ") of a claim as soon as reasonablypracticable after the Indemnified Party receives notice of the claim, shall permit the Indemnifying Party to assume direction andcontrol of the defense of the claim, and shall cooperate as requested by the Indemnifying Party (at the expense of the IndemnifyingParty) in the defense of the claim; provided, however, if the defendants in any such action include both the Indemnified Partyand the Indemnifying Party and the Indemnified Party shall have reasonably concluded that a conflict may arise between the positionsof the Indemnifying Party and the Indemnified Party in conducting the defense of any such action or that there may be legal defensesavailable to it that are different from or additional to those available to the Indemnifying Party, the Indemnified Party shallhave the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such actionor on behalf of the Indemnified Party. No Indemnifying Party shall, without the prior written consent of the Indemnified Party,settle or compromise or consent to the entry of judgment with respect to any pending or threatened action or claim whatsoever,in respect of which indemnification could be sought under Sections 6.1 or 6.2 (whether or not the Indemnified Party is an actualor potential party thereto), unless such settlement, compromise or consent (i) includes an unconditional release of the IndemnifiedParty in form and substance reasonably satisfactory to the Indemnified Party from all liability arising out of such action or claimand (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of the IndemnifiedParty. The Indemnifying Party shall not be liable for settlement of any pending or threatened action or any claim whatsoever thatis effected without its written consent (which consent shall not be unreasonably withheld or delayed).

 

6.4.         Mitigation.In the event of any occurrence which may result in either Party becoming liable under Section 6.1 or Section 6.2, each Party shalluse its best efforts to take such actions as may be reasonably necessary to mitigate the damages payable by the other Party underSection 6.1 or Section 6.2, as the case may be.

 

6.5.         Limitationof Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IN NO EVENT SHALL ANY PARTY, ITS DIRECTORS, OFFICERS,EMPLOYEES, AGENTS OR AFFILIATES BE LIABLE TO THE OTHER PARTIES FOR ANY CLAIMS RELATED TO LOST PROFITS AND GOODWILL, WHETHER BASEDUPON A CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT, OR OTHERWISE, ARISING OUT OF THIS MANUFACTURINGAGREEMENT.

 

6.6.         Insurance.Each Party shall maintain commercial general liability insurance through the term of this Manufacturing Agreement upon launch ofthe Product, which insurance shall afford limits of not less than $5,000,000 for each occurrence and $5,000,000 in the aggregateper annum for personal injury or property damage liability. Furthermore, each Party shall maintain product liability insurance,through the term of this Manufacturing Agreement upon launch of the Product and for a period of three (3) years thereafter, whichinsurance shall afford limits of not less than $5,000,000 per claim and in the aggregate per annum with respect to product andcompleted operations liability. This insurance shall be written to cover claims incurred, discovered, manifested, or made duringor after the expiration of this Manufacturing Agreement. Each Party shall provide the other with a certificate of insurance evidencingthe above and showing the name of the issuing company, the policy number, the effective date, the expiration date and the limitsof liability. The insurance certificate shall further provide for a minimum of thirty (30) days' written notice to the insuredof a cancellation of, or material change in, the insurance. If a Party is unable to maintain the insurance policies required underthis Manufacturing Agreement through no fault on the part of such Party, then such Party shall forthwith notify the other Partyin writing and the Parties shall in good faith negotiate appropriate amendments to the insurance provision of this ManufacturingAgreement in order to provide adequate assurances.

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**ARTICLE 7**

**TERM AND TERMINATION**

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7.1.        Term.The initial term (the “**Initial Term**”) of this Agreement shall commence on the Effective Date and shall continuefor one year from the first delivery date; thereafter, the term of this Agreement shall be extended for successive two (2) yearterms (each a “**Renewal Term**”) upon the mutual written agreement of the Parties entered into at least six (6)months prior to the expiration of the Initial Term or a Renewal Term.

 

 

 

7.2           **Termination.**

 

(a)          EitherParty shall be entitled to terminate this Agreement by notice to the other Party if:

 

(i)          **MaterialBreach.** By either Party, in the event that the other Party commits a material breach of this Agreement and such breach shallnot have been cured within forty-five (45) days after the giving of written notice of such material breach, unless (a) the specificprovision to which such breach relates expressly provides for a different period, or (b) the Parties mutually agree in writingto an extension of such forty-five (45)-day period (the “**Cure Period**”). Unless such breach is cured during theCure Period, such termination shall be effective immediately upon the expiration of the Cure Period without any further actionor notice by the non-breaching Party;

 

(ii)         **Failureto Make Payment.** By ELITE, in the event that TPN breaches any of its obligations to make payment to ELITE under this Agreement,and such breach is not cured within forty-five (45) days of the giving by ELITE of written notice of such breach (the “**PaymentCure Period**”). Unless such breach is cured during the Payment Cure Period, such termination shall be effective immediatelyupon the expiration of the Payment Cure Period without any further action or notice by ELITE. Notwithstanding the foregoing, thePayment Cure Period shall be tolled pending a good faith effort to resolve any bona fide dispute between the Parties as to whethersuch payment is due, subject to the following terms and conditions:

 

(1)         TPN(x) gives written notice to ELITE during the Payment Cure Period of the existence of a bona fide dispute regarding such paymentand (y) pays ELITE the undisputed portion of such amount; and

 

(2)         theParties shall use good faith efforts to resolve such dispute as soon as practicable (such Payment Cure Period to resume runningif such dispute is not resolved prior to the expiration of fifteen (15)-days after the commencement of a bona fide dispute).

 

(iii)        **InsolvencyProceeding.**

 

(1)         Byeither Party on written notice to the other Party, which termination shall have an immediate effect, if such other Party at anytime (w) commences a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itselfor its debts under any bankruptcy, insolvency or other similar Law or seeking the appointment of a trustee, receiver, liquidator,custodian or similar official of it or of any substantial part of its property, (x) consents to any such relief or to the appointmentof or taking possession by any such official in an involuntary case or other proceeding commenced against it, (y) makes a generalassignment for the benefit of creditors or (z) takes any corporate action to authorize any of the foregoing;

 

(2)         Byeither Party on written notice to the other Party, which termination shall have an immediate effect, if such other at any timehas an involuntary case or other proceeding commenced against it seeking liquidation, reorganization or other relief with respectto it or its debts under any bankruptcy, insolvency or other similar Law now or hereafter in effect or seeking the appointmentof a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property and suchinvoluntary case or other proceeding remains undismissed and unstayed for a period of ninety (90) days or an order for relief isentered against such Party under Applicable Laws;

 

 

 

(3)         Byeither Party giving thirty (30) days written notice to the other Party, which termination shall be effective on the expirationof such notice, if either Party at any time is insolvent or is generally unable to pay its debts as they become due. TPN acknowledgesthat it has received a copy of Elite’s current financial statement and agrees that the aforesaid provision providing fortermination by notice to an insolvent Party is without force unless Elite’s financial condition as reflected in its financialstatements is subject to subsequent material negative changes.

 

(b)          Inaddition to the rights of termination provided elsewhere in this Agreement, TPN may terminate this Agreement:

 

(i)          ifany applicable regulatory authority, state or local laws, ordinances guidelines or regulations, present or future, including anyconditions, amendments or variations state that ELITE’s Facility is not suitable or ceases to be suitable for the manufactureof the Product or suspends, terminates or refuses to grant any license, permit, authorization or approval required to manufacturethe Product; or

 

(ii)         ifthe Parties jointly determine that it is not economically feasible to market the Product due to changes in the market for the Product,including technical, commercial, regulatory, environmental, health or safety reason, costs of obtaining the API, the introductionof competitive products and changes in the reimbursement policies of third party payors.

 

(c)          Inthe event that this Manufacturing Agreement is terminated for any reason other than a material breach by TPN or termination underSection 7.1, Elite shall provide TPN with at least six (6) months prior written notice of such termination.

 

7.3         **Consequencesof Termination**

 

(a)          Ontermination or expiry of the Agreement for any reason ELITE shall:

 

(i)          ensurethat any copies of TPN’s confidential information, or any information of a technical nature relating to the Product or itsmanufacture and supplied by TPN to ELITE are promptly returned to TPN or, at TPN’s option, destroyed;

 

(ii)         promptlyinvoice and deliver to TPN an amount equal to the cost of any pharmaceutical or packaging materials (that cannot be otherwise usedby ELITE or deployed to other customers of ELITE) and Product, in ELITE’s possession, provided that, ELITE can prove by documentaryevidence that such pharmaceutical or packaging materials and Product:

 

(1)         werepurchased in reliance on TPN’s’ forecast for the Firm Period; and

 

(2)         arein compliance with all relevant Product Specifications and otherwise fit for commercial use.

 

(b)          Thetermination or expiry of this Agreement shall not release either of the Parties from any liability which at the time of terminationor expiry has already accrued to the other Party, nor affect in any way the survival of any other right, duty or obligation ofthe Parties which is expressly stated elsewhere in this Agreement to survive such termination or expiry.

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**ARTICLE 8**

**CONFIDENTIALITY**

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8.1.        Theinformation exchanged between ELITE and TPN pursuant to this Manufacturing Agreement is expressly subject to the Mutual ConfidentialAgreement entered into by the Parties and dated November 10, 2006 (the “Confidentiality Agreement”) and whose termis hereby made coterminous with this Manufacturing Agreement.

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**ARTICLE9**

**COMPLAINTSAND RECALLS**

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9.1         EachParty shall notify the other Party immediately by telephone and confirm in writing within twenty four (24) hours upon becomingaware of any problem relating to the Product, including where:

 

 

 

 

 

9.2         Ifany of the circumstances described in Section 6.1 arise, and upon written notification from TPN, ELITE shall promptly and at itsown expense conduct all such internal investigations as may be reasonably necessary to determine the validity of such complaintas they relate to manufacture of the Product. ELITE shall provide an initial report of the findings of such investigations in writingto TPN within five (5) days from the first notification acknowledging that time is of the essence in responding to the FDA andDEA within required timeframes. ELITE shall promptly complete a final report upon receipt of all pertinent data. TPN shall be responsibleto respond to the complainant and provide a written copy of such response to ELITE. ELITE shall carry out any corrective actionsthat TPN may reasonably require in order to avoid the repetition of the complaint.

 

9.3         TPNshall be responsible for initiating a Product recall or withdrawal and the recall or withdrawal strategy shall be determined anddeveloped by TPN. In the event that the need for the recall or withdrawal is caused by any failure on the part of ELITE or itsAffiliates to comply with any material obligation under this Manufacturing Agreement or the Quality Agreement, or through the negligenceof ELITE or Affiliates, or the failure of the Product as manufactured hereunder to meet the Product Specifications (Out Of Specificationor “**OOS**”) due to the fault of ELITE, all documented out-of-pocket costs reasonably incurred by TPN in relationto such recall shall be borne by ELITE.

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**ARTICLE 10**

**MISCELLANEOUS**

** **

10.1.        ForceMajeure. If any Party is prevented from complying, either totally or in part, with any of the terms or provisions of this ManufacturingAgreement, by reason of force majeure, including, but not limited to fire, flood, earthquake, explosion, storm, strike, lockoutor other labor trouble, riot, war, rebellion, accidents, acts of God and/or any other cause or externally induced casualty beyondits reasonable control, whether similar to the foregoing matters or not, then, upon written notice by the Party liable to performto the other Party, the requirements of this Manufacturing Agreement or such of its provisions as may be affected, and to the extentso affected, shall be suspended during the period of such disability; provided that the Party asserting force majeure shall bearthe burden of establishing the existence of such force majeure by clear and convincing evidence; and provided further, that theParty prevented from complying shall use its best efforts to remove such disability within thirty (30) days, and shall continueperformance with the utmost dispatch whenever such causes are removed, and shall notify the other Party of the force majeure eventnot more than five (5) working days from the time of the event. When such circumstances arise, the Parties shall discuss what,if any, modification of the terms of this Manufacturing Agreement may be required in order to arrive at an equitable solution.

 

 

 

10.2.        Trademarks.Each Party agrees and acknowledges that it shall not acquire by virtue of this Manufacturing Agreement any interest (other thansuch non-exclusive license as may be necessary for the Party to perform its duties hereunder) in or to any trademarks or tradenames of the other Party; provided, however, that TPN shall have the right to identify ELITE as the manufacturer of the Product.The Product shall bear a label that incorporates the following statement: “Manufactured by Elite Laboratories, Inc., 165Ludlow Avenue, Northvale, NJ 07647”.

 

10.3.        Notices.Except as otherwise specifically provided, any notice or other documents to be given under this Manufacturing Agreement shall bein writing and shall be deemed to have been duly given if sent by registered mail, nationally recognized overnight delivery serviceor facsimile transmission to a Party or delivered in person to a Party at the address or facsimile number set out below for suchParty or such other address as the Party may from time to time designate by written notice to the other:

 

If to ELITE: Elite Pharmaceuticals, Inc.

 

165 Ludlow Avenue

Northvale, NJ 07647

Attention: President

Facsimile: 201-750-2755

 

with a copy to: Ruffa & Ruffa, P.C.

110 East 59th Street

New York, New York 10022

 

Attn: William Ruffa

Facsimile: 877-329-7833

 

If to TPN: ThePharmaNetwork, LLC 180 SummitAvenue, Suite 200Montvale, NJ 07645

Attention: Jonathan B. Rome/President & CEO

Facsimile: 201-476-1987

 

with a copy to:

ThePharmaNetwork, LLC

180 Summit Avenue, Suite 200

Montvale, NJ 07645

Attention: Allen Bagatsing, Esq./Chief Legal Counsel

Facsimile: 201-476-1987

 

Any such notice provided pursuant to thisSection 10.3 shall be deemed to have been received by the addressee five business days following the date of dispatch of the noticeor other document by mail or, where the notice or other document is sent by overnight delivery service, by hand or is given byfacsimile, simultaneously with the transmission or delivery. To prove the giving of a notice or other document it shall be sufficientto show that it was dispatched. Either Party may change its address at which notice is to be received by written notice providedpursuant to this Section 10.3.

 

 

 

10.4.         Waiverand Amendment. A waiver by either Party of any term or condition of this Manufacturing Agreement in any one instance shall notbe deemed or construed to be a waiver of such term or condition for any other time. All rights, remedies, undertakings, obligationsand agreements contained in this Manufacturing Agreement shall be cumulative and none of them shall be a limitation of any otherremedy, right, undertaking, obligation or agreement of either Party. This Manufacturing Agreement may not be amended or modified,except in a writing signed by an officer of each Party hereto.

 

10.5.         Severability.If any one or more of the provisions of this Manufacturing Agreement shall be held to be invalid, illegal or unenforceable in anyrespect, the validity, legality or enforceability of the remaining provisions hereof shall not in any way be affected or impairedthereby. In the event any provisions shall be held invalid, illegal or unenforceable, the Parties shall use their best effortsto substitute a valid, legal and enforceable provision which, insofar as practical, implements the purposes hereof.

 

10.6.         Headings.The headings contained in this Manufacturing Agreement are included herein for reference and convenience and shall not affect themeaning of the provisions of this Manufacturing Agreement.

 

10.7.         Assignmentand Successors. This Manufacturing Agreement may not be assigned by either Party, except by operation of law, to any third partywithout the prior written consent of the other Party, which consent shall not be unreasonably withheld, delayed or conditioned.In the event of any such assignment, the assignee shall expressly assume in writing the performance of all the terms and conditionsof this Manufacturing Agreement and all of the obligations to be performed by the assignor. Any assignment not in accordance withthis Manufacturing Agreement shall be void.

 

10.8.         GoverningLaw; Dispute Resolution; Venue. This Manufacturing Agreement shall be construed, and the rights of the Parties determined, in accordancewith the laws of the State of New Jersey without regard to conflict of law or choice of law rules. Any controversy or claim pursuantto this Manufacturing Agreement or the breach thereof shall be referred for decision forthwith to a senior executive of each Partynot directly involved in the dispute. If no agreement is reached within thirty (30) days of the request by one Party to the otherto refer the same to such senior executive, then such controversy or claim shall be settled by arbitration in accordance with theCommercial Arbitration Rules of the American Arbitration Association; such arbitration to be held in Bergen County, New Jerseyon an expedited basis. Judgment upon the award rendered by the Arbitrator(s) may be entered in any court having jurisdiction thereof.Notwithstanding anything to the contrary contained in this Manufacturing Agreement, each Party shall have the right to institutea legal action in a court of proper jurisdiction located in Hackensack, New Jersey for injunctive relief or a decree of specificperformance in the event such relief is not available in the proceedings described above.

 

10.9.         IndependentParties. This Manufacturing Agreement shall not be deemed to create any partnership, joint venture, amalgamation or agency relationshipbetween the Parties. Each Party shall act hereunder as an independent contractor. Neither Party shall at any time enter into, incur,or hold itself out to third parties as having authority to enter into or incur, on behalf of the other Party, any commitment, expense,or liability whatsoever.

 

10.10.       Survivalof Provisions. All accrued rights and obligations of the Parties, expressly including the provisions of Articles 3.4, 4, 6, 7,8 and 10, shall survive the termination for any reason of this Manufacturing Agreement.

 

10.11.       Publicity.Neither Party shall make any public announcement concerning, or otherwise publicly disclose, any information with respect to thetransactions contemplated by this Manufacturing Agreement or any of the terms and conditions hereof without the prior written consentof the other Party hereto. Notwithstanding the foregoing, either Party may make any public disclosure concerning the transactionscontemplated hereby that in the opinion of such Party's counsel may be required by law or the rules of any stock exchange on whichsuch Party's or its Affiliates' securities trade; provided, however, the Party making such disclosure shall provide the non-disclosingParty with a copy of the intended disclosure reasonably, and to the extent practicable, prior to public dissemination, and theParties hereto shall coordinate with one another regarding the timing, form and content of such disclosure.

 

 

 

10.12.       EntireAgreement. This Manufacturing Agreement, together with the Quality Agreement, constitutes the full, complete, final and integratedagreement between the Parties hereto relating to the subject matter hereof and supersedes all previous written or oral negotiations,commitments, agreements, transactions or understandings with respect to the subject matter hereof. Any modification, amendmentor supplement to this Manufacturing Agreement must be in writing and signed by authorized representatives of both Parties. In caseof a conflict between the agreements, this Manufacturing Agreement shall prevail.

 

10.13.       NoThird Party Beneficiaries. No person or entity not a party to this Manufacturing Agreement, including any employee of any Partyto this Manufacturing Agreement, shall have or acquire any rights by reason of this Manufacturing Agreement, nor shall either Partyhave any obligations or liabilities to such other person or entity by reason of this Manufacturing Agreement.

 

10.14.       RemediesCumulative. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a Party shall be deemed cumulativewith and not exclusive of any other remedy conferred hereby, or by law or equity upon such Party, and the exercise by a Party ofany one remedy shall not preclude the exercise of any other remedy. If any action at law or in equity is necessary to enforce orinterpret the terms of this Manufacturing Agreement, the prevailing Party shall be entitled to reasonable attorney's fees, costsand necessary disbursements in addition to any other relief to which such Party may be entitled.

 

10.15.       FurtherAssurances. Each Party shall execute and deliver such additional instruments and other documents and use commercially reasonableefforts to take or cause to be taken, all actions and to do, or cause to be done, all things necessary under applicable law toconsummate the transactions contemplated hereby.

 

10.16.       Counterparts;Facsimile Signatures. This Manufacturing Agreement may be executed in counterparts, each of which shall be deemed an original,and all of which together shall constitute a single agreement. This Manufacturing Agreement may be executed by facsimile signatures,which signatures shall have the same force and effect as original signatures.

 

10.17.      Drafting.The Parties have participated jointly in the negotiation and drafting of this Manufacturing Agreement. In the event an ambiguityor question of intent or interpretation arises, this Manufacturing Agreement shall be construed as if drafted jointly by the Partiesand no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisionsof this Manufacturing Agreement.

 

[This section is intentionally left blank;signature page follows]

 

 

IN WITNESS WHEREOF,the Parties hereto have caused this Manufacturing Agreement to be executed, as of the date first above written, by their duly authorizedrepresentatives.

 

 

 

 

**EXHIBIT A**

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**Product and Purchase Price and MinimumAnnual Volume Requirements**