exv10w42



 





Exhibit 10.42




The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.




MANUFACTURING AND SUPPLY AGREEMENT




By and Between




GUILFORD PHARMACEUTICALS INC.




and




BAXTER HEALTHCARE CORPORATION




 









 








The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.




TABLE OF CONTENTS




	 	 	 	 	 
	1. DEFINITIONS
	 	 	1	 
	2. ENGAGEMENT
	 	 	5	 
	2.1 Engagement of Baxter
	 	 	5	 
	2.2 Permits, Licenses and Authorizations
	 	 	5	 
	3. SUPPLY, FORECASTS AND ORDERS
	 	 	5	 
	3.1 Forecasts and Orders
	 	 	5	 
	3.2 Satisfaction of Firm Orders
	 	 	6	 
	3.3 Terms
	 	 	6	 
	3.4 Short Supply of Materials and/or Resources
	 	 	6	 
	3.5 Exclusive Manufacture and Supply
	 	 	6	 
	3.6 Cancellation of Firm Orders and Rescheduling
	 	 	7	 
	4. MANUFACTURING FEES & PAYMENTS
	 	 	7	 
	4.1 Manufacturing Fees
	 	 	7	 
	4.2 Application of Prices for each Tier
	 	 	7	 
	4.3 Underlying Assumptions
	 	 	7	 
	4.4 Fee to Re-Package Product
	 	 	8	 
	4.5 User Fees
	 	 	8	 
	4.6 Amount and Timing of Manufacturing Fee Increases
	 	 	8	 
	4.7 Notification, Effective Date and Application of Manufacturing
Fee Increases
	 	 	8	 
	4.8 Payment for Product
	 	 	9	 
	4.9 Payment Penalties Charged to Guilford
	 	 	9	 
	4.10 Payment Penalties Charged to Baxter
	 	 	9	 
	5. PRODUCT DELIVERY, TITLE AND RISK OF LOSS
	 	 	9	 
	5.1 Delivery of Product
	 	 	9	 
	5.2 Shipment of Product
	 	 	9	 
	5.3 Title and Risk of Loss
	 	 	10	 
	6. BULK ACTIVE AND MATERIALS
	 	 	10	 
	6.1 Bulk Active Title, Risk of Loss and Use
	 	 	10	 
	6.2 Certificate of Analysis
	 	 	10	 
	6.3 Inventory Counts
	 	 	10	 
	6.4 Bulk Active Freight Claims
	 	 	10	 
	6.5 Materials – Container
	 	 	11	 
	6.6 Materials – Other than Container
	 	 	11	 
	7. GUILFORD WARRANTY AND LIMITATIONS
	 	 	11	 
	7.1 Guilford Warranties
	 	 	11	 
	7.2 Claims for Failure to Meet Bulk Active Specifications
	 	 	12	 
	7.3 Other Claims
	 	 	12	 
	7.4 Bulk Active not Meeting Warranties
	 	 	13	 
	8. BAXTER WARRANTY AND LIMITATIONS
	 	 	13	 
	8.1 Baxter Warranties
	 	 	13	 
	8.2 Claims for Failure to Meet Product Specifications
	 	 	13	 
	8.3 Other Claims
	 	 	14	 
	8.4 Product Not Meeting Warranties
	 	 	15	 
	9. INDEMNIFICATION
	 	 	15	 
	9.1 Baxter Indemnification
	 	 	15	 
	9.2 Guilford Indemnification
	 	 	16	 
	9.3 No Claim for Losses
	 	 	16	 
	9.4 Prompt Notice
	 	 	16	 







ii









 






The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.




	 	 	 	 	 
	9.5 Refund Due to Injunction
	 	 	17	 
	9.6 Not Binding
	 	 	17	 
	9.7 Additional Remedies
	 	 	17	 
	10. MARKETING
	 	 	17	 
	10.1 Catalog Listings
	 	 	17	 
	10.2 Baxter Promotion
	 	 	17	 
	10.3 Product Sales
	 	 	18	 
	10.4 Guilford Promotional Materials
	 	 	18	 
	10.5 Labeling
	 	 	18	 
	11. INTELLECTUAL PROPERTY
	 	 	18	 
	11.1 Registration of Trademarks
	 	 	18	 
	11.2 Ownership of Trademarks
	 	 	18	 
	11.3 License to Use Trademarks
	 	 	19	 
	11.4 Trademark Marking
	 	 	19	 
	11.5 Quality Control
	 	 	19	 
	11.6 Goodwill of Trademarks
	 	 	19	 
	11.7 Protection of Trademarks
	 	 	19	 
	11.8 License to Patents and Unpatented Technology
	 	 	20	 
	12. GUILFORD LICENSEES AND DISTRIBUTORS
	 	 	20	 
	12.1 Notification
	 	 	20	 
	12.2 Baxter Disapproval Due to Confidentiality Concerns
	 	 	20	 
	12.3 Other Baxter Disapproval
	 	 	20	 
	12.4 No Unreasonable Disapproval
	 	 	21	 
	12.5 Guilford License with Licensees
	 	 	21	 
	12.6 Approval [***] Rights
	 	 	21	 
	12.7 Distributors
	 	 	21	 
	12.8 Guilford Continuing Obligations
	 	 	21	 
	13. BULK ACTIVE LOSSES
	 	 	21	 
	14. ENVIRONMENT
	 	 	21	 
	14.1 Compliance with Laws
	 	 	21	 
	14.2 Indemnification
	 	 	21	 
	15. CONFIDENTIALITY
	 	 	22	 
	15.1 Confidentiality
	 	 	22	 
	15.2 Exceptions
	 	 	22	 
	15.3 Further Exception
	 	 	23	 
	15.4 Export
	 	 	23	 
	15.5 Enforcement
	 	 	23	 
	15.6 Prior Arrangements
	 	 	24	 
	15.7 Return of Confidential Information
	 	 	24	 
	15.8 Survival
	 	 	24	 
	16. TERM AND TERMINATION
	 	 	24	 
	16.1 Condition Precedent
	 	 	24	 
	16.2 Term
	 	 	24	 
	16.3 Termination for Default or Bankruptcy
	 	 	25	 
	16.4 Termination by Either Party Due to Change in Ownership
	 	 	25	 
	16.5 Termination by Guilford if Product Is Withdrawn from the U.S.
Market
	 	 	25	 
	16.6 Termination by Guilford in the Event of Relocation of
Facility
	 	 	26	 
	16.7 Termination by Guilford in the Event of
Cross-Contamination
	 	 	26	 
	16.8 Dispositions of Inventory Upon Termination or Expiration
	 	 	26	 
	16.9 Remaining Obligations
	 	 	27	 
	16.10 Use of Trademarks
	 	 	28	 
	16.11 Alternative Suppliers
	 	 	28	 







iii









 






The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.




	 	 	 	 	 
	17. WASTE/DISPOSAL
	 	 	28	 
	17.1 Baxter Warranty
	 	 	28	 
	17.2 Baxter Indemnification
	 	 	29	 
	17.3 Limitation
	 	 	29	 
	17.4 Guilford Indemnification
	 	 	29	 
	18. INSURANCE
	 	 	29	 
	18.1 Insurance Coverage
	 	 	29	 
	18.2 Evidence of Insurance
	 	 	30	 
	19. REGULATORY MATTERS
	 	 	30	 
	19.1 Maintenance of NDA
	 	 	30	 
	19.2 Communications with the FDA
	 	 	30	 
	20. QUALITY AGREEMENT
	 	 	30	 
	21. CTM SUPPLY AGREEMENT
	 	 	30	 
	22. SAFETY MATTERS, PRODUCT RETURN AND PRODUCT RECALL
	 	 	31	 
	22.1 Safety

	 	 	31	 
	22.2
 Adverse Experience Reporting
	 	 	31	 
	22.3 Product Returns
	 	 	31	 
	22.4 Product Recall 31
	 	 	31	 
	23. MISCELLANEOUS
	 	 	32	 
	23.1 Force Majeure
	 	 	32	 
	23.2 Assignment
	 	 	32	 
	23.3 Severability
	 	 	33	 
	23.4 Notices
	 	 	33	 
	23.5 Applicable Law
	 	 	34	 
	23.6 Alternative Dispute Resolution
	 	 	34	 
	23.7 Entire Agreement
	 	 	34	 
	23.8 Amendment
	 	 	35	 
	23.9 Subcontracting
	 	 	35	 
	23.10 Headings
	 	 	35	 
	23.11 Independent Contractors
	 	 	35	 
	23.12 Waiver
	 	 	35	 
	23.13 Counterparts
	 	 	35	 
	23.14 Successors and Assigns
	 	 	35	 
	23.15 Execution
	 	 	35	 
	23.16 Remedies
	 	 	35	 
	23.17 Review with Counsel
	 	 	35	 
	23.18 Benefit
	 	 	36	 
	23.19 Merck/Baxter Agreement
	 	 	36	 







	 	 	 
	Schedule A:

	 	Product and Bulk Active Specifications
	Schedule B:

	 	Approved Vendors for Excipients
	Schedule C:

	 	Manufacturing Fees
	Schedule D:

	 	Product Definitions
	Schedule E:

	 	Bulk Active Losses
	Schedule F:

	 	Invoicing Requirements
	Schedule G:

	 	Initial Firm Order and Forecast
	Schedule H:

	 	Form of Purchase Order
	Schedule I:

	 	Financing Arrangements







iv









 






The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.




MANUFACTURING AND SUPPLY AGREEMENT




This Manufacturing and Supply Agreement (the “Agreement”), is effective as of
July 1, 2004 (the “Effective Date”), between Baxter Healthcare Corporation, a
Delaware corporation, having its principal office at One Baxter Parkway,
Deerfield, Illinois 60015 U.S.A. (“Baxter”) and Guilford Pharmaceuticals Inc.,
a Delaware corporation, having its principal office at 6611 Tributary Street,
Baltimore, Maryland 21224 U.S.A. (“Guilford”).




WITNESSETH:




WHEREAS, Guilford has acquired from Merck & Co, Inc. (“Merck”) the commercial
and intellectual property rights to the Product (as defined herein) in the
United States and its territories; and




WHEREAS, Guilford desires to engage the facilities and services of Baxter to
Manufacture (as defined herein) the Product for Guilford, and Baxter has
appropriate facilities and the ability to Manufacture Product for Guilford and
is willing to undertake the Manufacturing of Product for Guilford in accordance
with the terms and conditions set forth herein; and




WHEREAS, Guilford will supply Bulk Active (as defined herein) to Baxter and
Baxter will Manufacture the Product for Guilford at the Facility (as defined
herein) on the terms specified herein; and




WHEREAS, Baxter and Guilford will enter into a separate CTM Supply Agreement
(as defined herein) whereby Baxter will Manufacture clinical trial material for
Guilford at the Facility on the terms and conditions specified in the CTM
Supply Agreement and, for terms and conditions not specified in the CTM Supply
Agreement, in accordance with the terms and conditions herein;




NOW, THEREFORE, in consideration of the mutual premises and covenants contained
herein the parties agree as follows:





	1.	 	DEFINITIONS
	 
	 	 	Unless specifically set forth to the contrary herein, the following
capitalized terms, whether used in the singular or plural, shall have the
respective meanings set forth below:






	 	1.1	 	The term “Baxter” as used hereinafter shall mean Baxter and
its Affiliates.
	 
	 	1.2	 	The term “Affiliate” of Guilford or Baxter shall mean any
corporation or business entity which controls, is controlled by or
is under common control with Guilford or Baxter, as the case may be.
A corporation or business entity shall be deemed to control another
corporation or business entity if it owns, directly or indirectly,
fifty percent (50%) or more of the securities or other ownership
interests representing the equity, the voting stock or general
partnership interest of such corporation or business entity.
	 
	 	1.3	 	The term “Act” shall mean the U.S. Federal Food, Drug, and
Cosmetic Act, 21 U.S.C. § 301 et seq., as amended, and
the regulations promulgated thereunder, as amended from time to
time.




 









 











The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.





	 	1.4	 	The term “Applicable Law” shall mean any United States
(including federal, territorial, state, municipal and local)
statute, law, ordinance, rule, regulation, administrative
interpretation, order, writ, injunction, judicial decision, decree
or other requirement of any Governmental Authority.
	 
	 	1.5	 	The term “Bulk Active” shall mean the pharmacologically
active ingredient
N-(Butylsulfonyl)-O-[4-(4-piperindinyl)butyl]-L-
tyrosine monohydrochloride monohydrate, also known as “tirofiban
hydrochloride”, and meeting the specifications specified in Schedule
A.
	 
	 	1.6	 	The term “Bulk Active Specifications” shall mean the
specifications and test methods for Bulk Active, specified in
Schedule A, as they may be modified from time to time by Guilford.
	 
	 	1.7	 	The term “Bulk Production Lot” shall mean the total quantity
of solution which has been mixed in one tank during the process of
Manufacturing Product.
	 
	 	1.8	 	The term “Bulk Production Lot Number” shall mean the unique
number assigned by Baxter to each Bulk Production Lot.
	 
	 	1.9	 	The term “Calendar Month” shall mean each month of the
Calendar Year beginning with the first date of that month and ending
with the last date of that same month.
	 
	 	1.10	 	The term “Calendar Quarter” shall mean each period of three
(3) consecutive Calendar Months ending March 31, June 30, September
30 and December 31, as the case may be.
	 
	 	1.11	 	The term “Calendar Year” shall mean the period of January 1
to December 31.
	 
	 	1.12	 	The term “cGMPs” shall mean the current Good Manufacturing
Practices as specified in the United States Code of Federal
Regulations or in applicable regulations promulgated or issued by
the FDA.
	 
	 	1.13	 	The term “Container” and “Flexible Container” shall mean
Baxter’s container, the description and specifications of which are
set forth in the Quality Agreement and in Baxter’s FDA filings,
which is either a 250-mL or a 100-mL flexible non-PVC container
having a single administration port containing PVC and wrapped in an
overpouch.
	 
	 	1.14	 	The term “Container Drug Master File” or “CDMF” shall mean a
separate filing with the FDA consisting of confidential detailed
information about the facilities, processes and/or materials used in
the manufacturing, processing, testing and/or storing of the
Container. Information contained in a CDMF shall be used to support
filings made to the FDA to obtain and maintain registration of the
Product.
	 
	 	1.15	 	The term “CPI” shall mean the U.S. Consumer Price Index as
published by the U.S. Department of Labor.




2









 












The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.





	 	1.16	 	The term “CTM Supply Agreement” shall mean the Clinical Trial
Material Supply Agreement dated as of the date hereof between Baxter
and Guilford for the Manufacture and supply by Baxter to Guilford of
batches of clinical trial material.
	 
	 	1.17	 	The term “Deliver”, “Delivered”, “Delivering” or “Delivery”
by Baxter shall mean the act of Baxter in making complete
shipment(s) of Product available to Guilford at Baxter’s Facility
for immediate shipment and transportation by Guilford in accordance
with Section 5.2, which Product shall be completely Manufactured,
packaged and ready for administration.
	 
	 	1.18	 	The term “Distributors” shall mean those persons and/or
entities engaged by Guilford and/or Guilford’s Affiliates to
distribute Product in the Territory on behalf of Guilford and its
Affiliates, but shall not include Licensees.
	 
	 	1.19	 	The term “Facility” shall mean that portion of Baxter’s
facilities located at Highway 221 North Marion, North Carolina, used
in the Manufacturing of the Product.
	 
	 	1.20	 	The term “FDA” shall mean the United States Food and Drug
Administration and its successors.
	 
	 	1.21	 	The term “FIFO” shall mean first-in, first-out.
	 
	 	1.22	 	The term “Filling Production Lot” shall mean a quantity of
solution taken from a Bulk Production Lot and filled into
Containers.
	 
	 	1.23	 	The term “Filling Production Lot Number” shall mean (i) with
respect to the first Filling Production Lot filled from a Bulk
Production Lot, the Bulk Lot Production Number for such Bulk Product
Lot, and (ii) with respect to each Filling Production Lot filled
from the same Bulk Production Lot thereafter, a unique number
assigned by Baxter to such Filling Production Lot.
	 
	 	1.24	 	The term “Firm Order” shall mean a binding commitment in
writing and evidenced by a Purchase Order made by Guilford to
purchase Product from Baxter pursuant to Section 3.1.2.
	 
	 	1.25	 	The term “Governmental Authority” shall mean any United
States (including federal, territorial, state, municipal and local)
governmental authority, quasi-governmental authority,
instrumentality, court, government or self-regulatory organization
(including any national or international securities exchange and The
NASDAQ Stock Market), commission, tribunal or organization or any
regulatory, administrative or other agency (including the FDA), or
any political or other subdivision, department or branch of any of
the foregoing.
	 
	 	1.26	 	The term “Licensees” shall mean those persons and/or entities
to which Guilford and/or Guilford’s Affiliates shall, subject to
Section 12, license its rights to market and sell the Product in the
Territory.
	 
	 	1.27	 	The term “Lot Numbers” shall mean, collectively, the Bulk
Production Lot Numbers and the Filling Production Lot Numbers.




3









 











The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.





	 	1.28	 	The terms “Manufacture”, “Manufacturing” and “Manufactured”
shall mean all operations of Baxter and its successors, permitted
assigns and permitted subcontractors in the acquisition of Materials
and the formulation of Product from Bulk Active, and in filling,
labeling, packaging, warehousing and quality control testing of
Product.
	 
	 	1.29	 	The term “Manufacturing Fee” shall mean the fee per unit paid
by Guilford to Baxter for Product Manufactured in accordance with
the terms of this Agreement.
	 
	 	1.30	 	The term “Materials” shall mean all raw materials,
excipients, components, packaging materials (including the
Container), and other items necessary for the Manufacture of Product
as supplied by Baxter other than the Bulk Active, package inserts
and any other items which are supplied by Guilford to Baxter.
	 
	 	1.31	 	The term “Merck/Baxter Agreement” means the Manufacturing and
Supply Agreement dated as of April 15, 1995, as amended, by and
between Merck and Baxter.
	 
	 	1.32	 	The term “NDA” shall mean the New Drug Application relating
to Product filed in accordance with FDA regulations.
	 
	 	1.33	 	The term “Parametric Release” shall mean a review and
comparison of sterilization records to validated parameters to
effect release of a Filling Production Lot of Product in lieu of
routine end product sterility testing.
	 
	 	1.34	 	The term “Product” shall mean AGGRASTAT® Pre-Mixed Injection
in either (i) a 0.05 mg/mL bulk active in 0.9% normal saline and
packaged as a terminally steam sterilized pre-mixed intravenous
(I.V.) solution in Container, in package size and meeting the
Product Specifications specified in Schedule A, which comprise a
12.5 mg dosage, 250 mL diluent volume pharmaceutical form (the “250
mL Product”), or (ii) a 0.05 mg/mL bulk active in 0.9% normal saline
and packaged as a terminally steam sterilized pre-mixed intravenous
(I.V.) solution in Container, in package size and meeting the
Product Specifications specified in Schedule A, which comprise a 5.0
mg dosage, 100 mL diluent volume pharmaceutical form (the “100 mL
Product”).
	 
	 	1.35	 	The term “Product Specifications” shall mean the
specifications and test methods for Product as specified in Schedule
A, as they may be modified from time to time in accordance with the
Quality Agreement.
	 
	 	1.36	 	The term “Quality Agreement” shall mean the Quality Agreement
dated as of the date hereof by and between Baxter and Guilford,
together with the exhibits thereto, that provides the details on the
responsibilities of the technical and quality activities required to
Manufacture the Product.
	 
	 	1.37	 	The term “Related Agreements” shall mean, collectively, the
Quality Agreement and the CTM Supply Agreement.




4









 











The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.





	 	1.38	 	The term “Securities Laws” shall mean the United States
Securities Act of 1933, as amended, the United States Securities
Exchange Act of 1934, as amended, and any other similar law or
regulation of a United States Governmental Authority, or any
successor to any such laws or regulations, together with any rules,
regulations or listing standards or agreements of any national or
international securities exchange or The NASDAQ Stock Market, as
generally applicable.
	 
	 	1.39	 	The term “Territory” shall mean the United States of America
and its territories and possessions, including without limitation
the Commonwealth of Puerto Rico, Guam and the U.S. Virgin Islands.
	 
	 	1.40	 	The term “Trademarks” shall mean, collectively, Baxter’s
United States registered trademarks for the Container and Guilford’s
United States registered trademark for Product.






	2.	 	ENGAGEMENT






	 	2.1	 	Engagement of Baxter. Guilford hereby engages Baxter
to Manufacture the Product at the Facility, subject to the
conditions and terms set forth in this Agreement and the Related
Agreements. Baxter accepts such engagement to Manufacture the
Product and to perform such other acts as are provided in this
Agreement and the Related Agreements.
	 
	 	2.2	 	Permits, Licenses and Authorizations. Except as
otherwise agreed by the parties in writing, Baxter shall be
responsible for obtaining, at its cost, all the necessary
permissions, licenses and approvals for the Manufacture of Product
in the Facility for distribution in the Territory.






	3.	 	SUPPLY, FORECASTS AND ORDERS






	 	3.1	 	Forecasts and Orders. During the term of this
Agreement the forecasting and ordering provisions set forth in this
Section shall apply.






	 	3.1.1	 	Forecasts. In order to assist Baxter in
its production planning, at least [***] before the beginning
of each Calendar Quarter, Guilford shall provide to Baxter a
statement of its estimated purchase requirements (“Estimated
Requirements”) and expected Delivery dates for Product for the
[***] next succeeding such Calendar Quarter. It is understood
that such Estimated Requirements shall not constitute
commitments to purchase Product or Firm Orders.
	 
	 	3.1.2	 	Firm Orders. At least [***] days prior
to the beginning of each Calendar Quarter, Guilford shall
place a Firm Order for its requirements and requested Delivery
dates of Product for such Calendar Quarter. Firm Orders shall
be placed in amounts equal to the
Filling Production Lot sizes, multiplied by whole number
increments of the applicable minimum order quantities as set
forth on Schedule C. Firm Orders for Product in such
Calendar Quarter shall not be for less than seventy percent
(70%) nor more than one hundred thirty percent




5









 











The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.





	 	 	 	(130%) of
Guilford’s Estimated Requirements of Product for such
Calendar Quarter as most recently updated. Notwithstanding
the foregoing, Baxter shall use reasonable efforts to comply
with any subsequent changes in such Firm Orders, but shall
not be held liable for its inability to do so. Guilford
shall limit the number of requested Delivery dates to no
more than two (2) per Calendar Month.
	 
	 	3.1.3	 	Initial Forecast and Firm Order.
Attached hereto as Schedule G is Guilford’s initial Firm Order
for its requirements of Product and requested Delivery dates
for the period beginning on the Effective Date and ending on
December 31, 2004, as well as Guilford’s Estimated
Requirements and estimated Delivery dates for the next
succeeding two (2) Calendar Quarters beginning October 1,
2004. Guilford shall deliver Estimated Requirements and
estimated Delivery dates for the [***] beginning January 1,
2005 on or before [***].






	 	3.2	 	Satisfaction of Firm Orders. Baxter shall confirm the
receipt of each Firm Order within [***] of its receipt thereof.
Subject to Section 23.1, Baxter shall meet Guilford’s requested
Delivery dates. Baxter shall satisfy each Firm Order by Delivering
not less than [***] and not more than [***] of the quantity of
Product ordered by Guilford in each Firm Order to Guilford.
Deliveries of Product shall be made on the date specified in the
Firm Order, but in no event more than [***] in advance of the date
specified in the Firm Order without Guilford’s prior written
approval. Baxter shall notify Guilford at least [***] prior to
actual Delivery of Product if Baxter is not Delivering Product to
Guilford on the requested Delivery date.
	 
	 	3.3	 	Terms. Firm Orders will be made on the form of
purchase order attached hereto as Schedule H or in such other form
as Baxter and Guilford shall agree in writing from time to time (a
“Purchase Order”), provided that the terms and conditions of this
Agreement shall be controlling over any terms and conditions
included in any such Purchase Order used in ordering Product.
	 
	 	3.4	 	Short Supply of Materials and/or Resources. In the
event that the Materials and/or resources required to Manufacture
Product are in short supply, Baxter shall notify Guilford of such
shortage as soon as possible and shall allocate to Guilford a
proportionate share of the available amount of such Materials and/or
resources (as existing as of the time of such shortage and going
forward) required for Manufacture of Product hereunder based upon
Guilford’s projected requirements for Product hereunder, as compared
to the projected requirements of other customers of Baxter who
require use of such Materials or resources, for the ensuing [***]
period.
	 
	 	3.5	 	Exclusive Manufacture and Supply. Except as otherwise
contemplated in this Agreement, during the term and subject to the
provisions of this Agreement and the Related Agreements, Baxter
shall supply Product exclusively to Guilford in the Territory, and
Guilford shall purchase exclusively from Baxter quantities of
Product equal to Guilford’s needs for the Territory.




6









 











The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.





	 	3.6	 	Cancellation of Firm Orders and Rescheduling.
Guilford may cancel a Firm Order or reschedule requested Delivery
dates to a later date by giving Baxter prior written notice to such
effect. Baxter will use reasonable efforts to comply with
Guilford’s requests and to avoid or minimize any costs incurred by
Baxter as a result of such cancellation or change. If, however,
either (i) a cancellation by Guilford of a Firm Order or (ii) a
rescheduling of Delivery dates for a Firm Order that causes a
rescheduling by Baxter of the Product manufacturing date, occurs
less than [***] but more than [***] prior to Baxter’s scheduled
production date for the Firm Order, Guilford will pay Baxter a
cancellation fee or rescheduling fee equal to [***] of the
Manufacturing Fee for such Firm Order, and if any such cancellation
or rescheduling occurs [***] or less prior to Baxter’s scheduled
production date for the Firm Order, Guilford will pay Baxter a
cancellation fee or rescheduling fee equal to [***] of the
Manufacturing Fee for such Firm Order. Notwithstanding the
foregoing, if any such cancellation or rescheduling occurs [***] or
more prior to Baxter’s scheduled production date for the Firm Order,
Guilford shall not have any obligation to pay any cancellation fee,
rescheduling fee or other penalty to Baxter.






	4.	 	MANUFACTURING FEES & PAYMENTS






	 	4.1	 	Manufacturing Fees. The Manufacturing Fees charged by
Baxter to Guilford for Product Manufactured hereunder shall be
determined and paid as set forth in this Section 4 and in Schedule
C. Guilford will purchase a minimum of one hundred thousand
(100,000) units of Product during each Calendar Year of this
Agreement, except the first Calendar Year (the “First Calendar
Year”). During the First Calendar Year, the minimum requirement
shall be 75,000 units and shall be reduced by the number of units
that Guilford purchased from Merck during 2004. The 100,000 units
may be any combination of 100 mL Product and 250 mL Product units
[***]. If Guilford desires to have a different packaging
configuration than shown on Schedule D, then the parties shall
negotiate in good faith applicable Manufacturing Fees for such
configuration.
	 
	 	4.2	 	Application of Prices for each Tier. The
Manufacturing Fees shown in Schedule C correspond to an individual
unit of Product depending on whether it is a 250 mL Product or a 100
mL Product. Firm Orders shall be placed by Guilford in whole
number increments of the Order Quantities set forth in the tables
provided in Schedule C. Baxter shall invoice Guilford at the
Manufacturing Fee corresponding to applicable pricing tier
reflected on Schedule C for each such unit.
	 
	 	4.3	 	Underlying Assumptions. The Manufacturing Fees set
forth herein are based upon the following key assumptions:






	 	(i)	 	The Manufacturing Fees include all labor and
Material costs incurred by Baxter (it being understood that
Baxter shall incur no costs in connection with the Bulk Active
or any other materials, such as package inserts, provided by
Guilford) and excludes all applicable sales and value added
taxes.




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The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.





	 	(ii)	 	In the event either Guilford or Baxter shall
desire to make any change in any label for the Product
(including without limitation the bag label, the intermediate
carton label and the case label) during the term of this
Agreement, the parties shall meet to negotiate the additional
costs to be incurred by Baxter, which costs shall be allocated
between Guilford and Baxter as set forth in this Section
4.3(ii). With respect to label changes by Guilford, including
both discretionary changes and changes required by the FDA or
Applicable Law, Guilford may request, and Baxter shall
implement [***]. If Guilford shall request (or shall be
required by the FDA or Applicable Law to implement) [***], the
parties shall meet to negotiate in good faith the additional
costs to be incurred by Baxter in connection with such
changes, which costs shall be invoiced separately by Baxter to
Guilford, and Guilford will pay such amount to Baxter within
[***] of invoicing by Baxter. With respect to label changes
by Baxter, including both discretionary changes and changes
required by the FDA or Applicable Law, Baxter shall bear the
cost of such changes.
	 
	 	(iii)	 	[***] testing is utilized throughout the
Territory. [***] testing, if required, shall be separately
paid for by Guilford as set forth in the Quality Agreement.






	 	4.4	 	Fee to Re-Package Product. In the event that Guilford
requests Baxter to re-package Product (for example, due to a change
in the package insert), Baxter shall perform such re-packaging and
will invoice Guilford on delivery of the re-packaged Product. The
fee to Guilford will be [***] per unit of re-packaged Product.
	 
	 	4.5	 	User Fees. Baxter will pay all user and/or filing
fees charged by Governmental Authorities in the Territory which
relate to separate Container submissions. Guilford will pay all
user and/or filing fees charged by Governmental Authorities in the
Territory which relate to the NDA and ongoing marketing of the
Product, including, but not limited to, the application fee (other
than in connection with the Container), the drug
product fee, and that portion of the drug establishment fee (DEF)
assessed to Guilford by the FDA.
	 
	 	4.6	 	Amount and Timing of Manufacturing Fee Increases.
Baxter may increase the Manufacturing Fees [***], which shall be
further limited to a maximum increase of [***] for each Calendar
Year. Baxter shall use its commercially reasonable efforts to
minimize increases in its Material costs to Manufacture Product.
	 
	 	4.7	 	Notification, Effective Date and Application of
Manufacturing Fee Increases. Baxter will provide to Guilford
written notification, [***], of any proposed Manufacturing Fee
increase pursuant to Section 4.6, which increase will become
effective the following January 1. Such Manufacturing Fee increase
shall not apply to Product already invoiced to Guilford, but shall
apply to Product which has been released, Delivered and invoiced by
Baxter to Guilford after the January 1 effective date.




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The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.





	 	4.8	 	Payment for Product. Baxter shall invoice Guilford
upon release of Product to Guilford that has been quality control
tested by Baxter in accordance with the Quality Agreement.
Invoicing requirements are specified in Schedule F. Guilford shall
make payment [***] of receipt of said invoice of Product in
accordance with this Section 4.8 or of Delivery of Product by
Baxter, whichever is later. Payment shall be remitted by wire
transfer in U.S. dollars to a bank account designated in writing by
Baxter. [***]
	 
	 	4.9	 	Payment Penalties Charged to Guilford. In addition to
any other remedies available to Baxter under this Agreement, Baxter
may charge Guilford a penalty for amounts not paid within the
required [***] period set forth in Section 4.8. Such penalty shall
be assessed based on the amount not paid when due at the rate of
[***]. Such penalty shall not be assessed if the reason for the
late payment is due to (i) discrepancies between Baxter’s invoice
and the shipping records, (ii) incomplete documentation accompanying
the Product Delivered by Baxter hereunder, or (iii) due to a claim
asserted by Guilford pursuant to Section 8.2 or 8.3. Guilford shall
notify Baxter as soon as practicable after it is aware that any of
these circumstances exist, and the parties will in good faith
attempt to resolve the discrepancy, incompleteness, error and/or
dispute in a timely manner. In the event that such circumstances
exist, then Guilford will have [***] after resolution of the matter
to pay the amount so due before Baxter may assess the aforementioned
penalty.
	 
	 	4.10	 	Payment Penalties Charged to Baxter. In addition to
any other remedies available to Guilford under this Agreement, in
the event that Baxter fails to Deliver on time (i.e., no later than
Guilford’s requested Delivery date as set forth in Section 3.1.2)
the Product subject to a Firm Order, Guilford may (i)
reduce the invoice price relating to such Firm Order, or (ii)
cancel such Firm Order if Baxter fails to Deliver to Guilford
within [***] after Guilford’s requested Delivery date.
	 
	 	 	 	The amount of any such reduction in (i) above shall be equal to:
	 
	 	 	 	[***].
	 
	 	 	 	Notwithstanding the foregoing, if Baxter does not Deliver Product
to Guilford in accordance with the requested Delivery date as
provided for in Section 3 because of Guilford’s breach or
negligence or a force majeure event affecting Baxter as set forth
in Section 23.1, then the number of days by which Delivery by
Baxter is considered late for purposes of enabling Guilford to
reduce the invoice price shall commence upon [***].






	5.	 	PRODUCT DELIVERY, TITLE AND RISK OF LOSS






	 	5.1	 	Delivery of Product. Baxter shall notify Guilford no
less than [***] prior to each Delivery of Product by Baxter
hereunder.
	 
	 	5.2	 	Shipment of Product. Guilford shall arrange for
transportation of the Product Manufactured hereunder from Baxter’s
Facility. Guilford shall assume the freight and insurance costs and
risk of loss for the Product after Baxter






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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.




physically transfers the Product to Guilford’s designated carrier at Baxter’s Facility.
Delivery shall be F.O.B. Baxter’s Facility. Guilford shall be
subject to a penalty if Guilford or Guilford’s designated carrier
does not pick up the Product from Baxter’s Facility within [***]
after Delivery of such Product by Baxter to Guilford hereunder. The
amount of such penalty will be equal to [***] of the invoice price.
Notwithstanding the foregoing, if Guilford does not pick up the
Product due to Baxter’s breach or negligence or a force majeure
event affecting Guilford as set forth in Section 23.1, then the
number of days Guilford is considered late for purposes of enabling
Baxter to charge the penalty set forth in this Section 5.2 shall
commence upon [***] after the date on which such situation shall be
rectified.




	5.3	 	Title and Risk of Loss. Title and risk of loss to
Product sold hereunder shall pass to Guilford upon delivery at the
F.O.B. point specified in Section 5.2.






	6.	 	BULK ACTIVE and MATERIALS






	6.1	 	Bulk Active Title, Risk of Loss and Use. Guilford
shall, at no cost to Baxter, at least [***] prior to the date of
requested Delivery of Product pursuant to a Firm Order, supply to
Baxter sufficient quantities of Bulk Active, and Bulk Active
reference standard material for use in conducting
assays, which will allow Baxter to meet its obligations to
Manufacture Product in accordance with the terms of this Agreement.
Baxter shall not be responsible for delays in Delivering Product
to Guilford caused by delays in receipt of Bulk Active provided by
Guilford. Title to Bulk Active shall remain at all times with
Guilford; however, risk of loss shall pass to Baxter at the time
Bulk Active arrives at the Facility and is accepted by Baxter from
Guilford’s carrier. Baxter shall not use Bulk Active supplied by
Guilford for any purpose other than the Manufacture of Product
exclusively for Guilford hereunder or as otherwise agreed by the
parties in writing.
	 
	6.2	 	Certificate of Analysis. Guilford shall provide
Baxter with a certificate of analysis for each lot of Bulk Active
delivered by Guilford to Baxter using the format set forth in the
Quality Agreement. Guilford shall also provide Baxter with a
certificate of analysis for each lot of Bulk Active reference
standard material delivered to Baxter in the format set forth in the
Quality Agreement.
	 
	6.3	 	Inventory Counts. Physical inventory counts of all
Bulk Active shall be taken by Baxter at the end of each Calendar
Month, reconciled to Baxter’s books and perpetual records, and
promptly reported to Guilford in a form and level of detail
specified in the Quality Agreement. Data trail/accountability
information will be kept by Baxter for all receipts and
disbursements of Bulk Active in accordance with the Quality
Agreement. All inventories of Bulk Active will be subject to audit
by Guilford in accordance with the Quality Agreement.
	 
	6.4	 	Bulk Active Freight Claims. Baxter shall maintain
paperwork on all freight claims arising from Bulk Active that Baxter
claims was delivered to its Facility in a damaged state. Baxter
will assist Guilford in obtaining recovery for such freight claims,
and Guilford shall reimburse Baxter for all reasonable




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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.




direct expenses including, but not necessarily limited to, salaries and
wages of personnel and out-of-pocket costs, which are incurred and
documented by Baxter in connection with such assistance.




	6.5	 	Materials – Container. Baxter shall manufacture the
Container itself and shall be responsible for approving all vendors
of raw materials therefor. The Container shall meet the
requirements of the Container specifications set forth in the
Quality Agreement and shall be manufactured in accordance with cGMPs
and all Applicable Laws, FDA requirements, CDMFs and approved FDA
filings. Changes to the Container specifications shall be made only
in accordance with the Quality Agreement.
	 
	6.6	 	Materials – Other than Container. All Materials
(other than the Container) required for Manufacture of Product
supplied by Baxter shall be purchased by Baxter from vendors
approved by Baxter in accordance with Baxter’s vendor qualification
and approval procedures, copies of which have been provided to
Guilford. Baxter shall provide Guilford with copies of any
amendments or revisions to such procedures during the term of this Agreement.
Notwithstanding the foregoing, excipient vendors shall be approved
in writing by Guilford in advance of use by Baxter for Manufacture
of Product. Excipient vendors currently approved by Guilford are
set forth on Schedule B; additional vendors may be added to
Schedule B from time to time upon prior written agreement of the
parties. Such Materials shall meet the requirements of the Product
Specifications. All Materials supplied to Baxter by Guilford shall
be purchased, inspected and released by Guilford per Guilford’s
Standard Operating Procedures. Materials supplied by Guilford will
be purchased from Guilford approved vendors.






	7.	 	GUILFORD WARRANTY AND LIMITATIONS






	7.1	 	Guilford Warranties. Guilford represents and warrants
that all Bulk Active shall, at the time of delivery to Baxter’s
Facility (i) meet the Bulk Active Specifications; (ii) be
manufactured in accordance with cGMPs; (iii) be manufactured in
accordance with Applicable Laws and FDA requirements in effect on
the day of delivery; and (iv) be fit for the Manufacture of the
Product. Without limiting the warranty in Section 7.1(iii),
Guilford represents and warrants that no Bulk Active shall, at the
time of delivery, be (a) adulterated or misbranded within the
meaning of the Act, or any similar law of any other jurisdiction in
the Territory; or (b) an article which may not, under the provisions
of the Act, or any similar law of any other jurisdiction in the
Territory, be introduced into interstate commerce. Guilford also
represents and warrants that the Bulk Active reference standard
material shall, at the time of delivery to Baxter’s Facility, meet
the assigned purity as set forth in the related certificate of
analysis for such reference standard material. Guilford also
represents and warrants (x) that it has acquired all commercial and
intellectual property rights to the Product for the Territory which
are necessary for Baxter to realize its rights and fulfill its
obligations under this Agreement and the CTM Supply Agreement and to
grant Baxter the licenses set forth in Article 11 below, and (y)
that it has the right to enter into this Agreement and require
Baxter to Manufacture Product in accordance with the terms and




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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.





	 	 	 	conditions set forth herein and in the Quality Agreement. Guilford
also represents and warrants that it has the right to enter into
this Agreement in accordance with the terms and conditions set forth
herein and in the Related Agreements, and that this Agreement and
the Related Agreements will not conflict with, contravene or
constitute a default under any other agreement, contract or other
arrangement by which Guilford is bound, including without limitation
the Merck/Guilford Agreement. NO OTHER EXPRESS OR IMPLIED WARRANTY
EXISTS, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, AND GUILFORD EXPRESSLY DISCLAIMS ANY SUCH
WARRANTIES.






	7.2	 	Claims for Failure to Meet Bulk Active Specifications.
Claims by Baxter on account of quality or concerning any failure of
Bulk Active to meet the warranty specified in Section 7.1(i) shall
be made promptly by Baxter, in writing, but no later than [***] following Baxter’s
receipt of Bulk Active at the Facility. Claims by Baxter on
account of shortage, loss or damage shall be made promptly by
Baxter, in writing, but no later than [***] following Baxter’s
receipt of Bulk Active at the Facility. In connection with such
claim(s), Baxter shall, at Guilford’s request, investigate and
re-test such Bulk Active and shall permit one or more
representatives from Guilford to be present and participate in the
investigation and re-testing by Baxter, which investigation and
re-testing will be done at Baxter’s own cost. If Guilford and
Baxter agree that the Bulk Active did not meet the warranties set
forth in Section 7.1(i) upon delivery to Baxter, then Baxter shall
destroy or return the Bulk Active to Guilford in accordance with
Guilford’s instructions in accordance with the provisions of
Section 7.4. If the Bulk Active is determined upon agreement by
the parties to meet such warranty, then Baxter shall utilize the
Bulk Active to Manufacture Product. If the parties are unable to
agree as to whether such Bulk Active met such warranties, Baxter
shall return the Bulk Active to Guilford and the parties shall
cooperate to have the Bulk Active in dispute analyzed by an
independent testing laboratory of recognized repute agreeable to
both parties. The results of such laboratory testing shall be
final and binding on the parties on the issue of compliance of the
Bulk Active with such warranty. [***].
	 
	7.3	 	Other Claims.  If Baxter claims that any shipment of
Bulk Active did not, at the time of delivery, meet the warranties
specified in Section 7.1(ii) or (iii), Baxter shall promptly (and in
any event within [***]) notify Guilford and either destroy or return
such Bulk Active to Guilford in accordance with Guilford’s
instructions, and if Guilford and Baxter are unable to agree as to
whether or not such Bulk Active met such warranties, the dispute
shall be settled in accordance with the dispute resolution
provisions set forth in Section 23.6. If the Bulk Active is
determined to have met such warranties, then Baxter shall bear the
cost of such dispute resolution proceedings, including Guilford’s
reasonable attorneys’ fees. If the Bulk Active is determined not to
have met any such warranty, then Guilford shall bear the cost of
such proceedings, including Baxter’s reasonable attorneys’ fees, and
shall pay Baxter for any Product Manufactured which incorporates
such Bulk Active at the Manufacturing Fees specified in Section 4.




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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.





	7.4	 	Bulk Active not Meeting Warranties. Any Bulk Active
which fails to meet the warranties under Section 7.1 and which is in
Baxter’s possession or control shall, at Guilford’s option, either
be destroyed by Baxter or returned to Guilford pursuant to
Guilford’s written instructions. Unless otherwise provided in
Sections 7.2 and 7.3, Guilford shall assume the cost of destruction
of such Bulk Active, or the freight and insurance costs and risk of
loss for return of such Bulk Active after Baxter physically
transfers the Bulk Active to Guilford’s designated carrier at
Baxter’s Facility.






	8.	 	BAXTER WARRANTY AND LIMITATIONS






	8.1	 	Baxter Warranties. Baxter represents and warrants
that all Product shall, at the time of Delivery to Guilford (i) meet
the Product Specifications; (ii) be Manufactured in accordance with
cGMPs; and (iii) be Manufactured in accordance with the validated
processes and test methods specified in NDA and other filings with
the FDA maintained in the Territory with respect to Product, and
with all Applicable Laws and regulations and FDA requirements in
effect on the day of Delivery. Without limiting the warranty in
Section 8.1(iii), Baxter guarantees that no Product shall, at the
time of Delivery, be (a) adulterated or misbranded within the
meaning of the Act, or any similar law of any other jurisdiction in
the Territory, or (b) an article which may not, under the provisions
of the Act, or any similar law of any other jurisdiction in the
Territory, be introduced into interstate commerce. Baxter also
represents and warrants that it has the right to enter into this
Agreement and to Manufacture and supply Product to Guilford in
accordance with the terms and conditions set forth herein and in the
Related Agreements, and that this Agreement and the Related
Agreements will not conflict with, contravene or constitute a
default under any other agreement, contract or other arrangement by
which Baxter is bound, including without limitation the Merck/Baxter
Agreement. NO OTHER EXPRESS OR IMPLIED WARRANTY EXISTS, INCLUDING
ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
AND BAXTER EXPRESSLY DISCLAIMS ANY SUCH WARRANTIES.
	 
	8.2	 	Claims for Failure to Meet Product Specifications. If
Guilford claims that any shipment of Product did not, at the time of
Delivery to Guilford, meet the warranty specified in Section 8.1(i),
Guilford shall notify Baxter within [***] from Guilford’s receipt of
Product at the designated location; provided that in the case of
latent defects that are not discoverable upon exercise of reasonable
diligence within such [***] period, Guilford shall notify Baxter as
soon as practicable upon discovery of such defect, however, in no
event after the Product has expired according to its expiry date.
If Guilford and Baxter are unable to agree as to whether such
Product met such warranty, then the parties shall cooperate to have
the Product in dispute analyzed by an independent testing laboratory
of recognized repute selected by Guilford and approved by Baxter,
which approval shall not be unreasonably withheld. The results of
such laboratory testing shall be final and binding on the parties on
the issue of compliance of the Product with such warranty. If the
Product is determined to have met such warranty, then Guilford shall
bear the cost of such laboratory testing. If the Product is
determined not to have met such warranty for reasons




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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.




unrelated to a breach of Guilford’s warranty under Section 7.1, then Baxter shall:




	(i)	 	bear the cost of such laboratory testing;
	 
	(ii)	 	pay Guilford, [***], which price may be adjusted
by Guilford no more than once per Calendar Year by a
percentage up to the percentage increase in the CPI for the
most recently ended Calendar Year over the
prior Calendar Year which shall be further limited to a
maximum of [***] for that Calendar Year;
	 
	(iii)	 	at Guilford’s written election, within [***]
after receipt of such determination, either (a) replace the
rejected Product within [***] of the date of such
determination; or (b) at Baxter’s option either credit
Guilford’s account or refund to Guilford an amount equal to
the Manufacturing Fees paid for such Product, plus any
applicable delivery charge paid by Guilford. In the event
that Guilford does not make such written election within
[***], then the election shall be made at Baxter’s option
after written notification to Guilford;
	 
	(iv)	 	pay to Guilford interest at the rate of [***] on
the amount of payment(s) made by Guilford for such Product, if
any, from the date that such payment was made until, as
applicable, (a) [***] after delivery of the replacement
Product and associated invoice to Guilford, or (b) deduction
of the credit from an amount due by Guilford to Baxter on the
date when due (i.e., the credit must actually be used by
Guilford and not simply be posted by Baxter to Guilford’s
account) or refund to Guilford, as applicable, pursuant to
Section 8.2(iii)(b); and
	 
	(v)	 	cancel any late fees assessed by Baxter to
Guilford for non-payment or late payment of the invoice(s)
relating to such Product which did not meet such warranty.






	8.3	 	Other Claims. If Guilford claims that any shipment of
Product did not, at the time of Delivery to Guilford, meet the
warranties specified in Section 8.1(ii) or (iii), Guilford shall
notify Baxter, and if Guilford and Baxter are unable to agree as to
whether or not such Product met such warranties, the dispute shall
be settled in accordance with the dispute resolution provisions set
forth in Section 23.6. If the Product is determined to have met
such warranties, then Guilford shall bear the cost of such dispute
resolution proceedings, including Baxter’s reasonable attorneys’
fees. If the Product is determined not to have met any such
warranty for reasons unrelated to a breach of Guilford’s warranty
under Section 7.1, then Baxter shall:






	(i)	 	bear the cost of such dispute resolution
proceedings, including Guilford’s reasonable attorneys’ fees;
	 
	(ii)	 	pay Guilford, at the price established in Section
8.2(ii), for the Bulk Active consumed in the Manufacture of
such Product;




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in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.





	(iii)	 	at Guilford’s written election, within [***]
after receipt of such determination, either (a) replace the
rejected Product within [***] of the date of such
determination; or (b) at Baxter’s option either credit
Guilford’s account or refund to Guilford an amount equal to
the Manufacturing Fees paid for such Product, plus any
applicable delivery charge paid by Guilford. In the event
that Guilford does not make such written election within [***], then the election shall be
made at Baxter’s option after written notification to
Guilford;
	 
	(iv)	 	pay to Guilford interest at the rate of [***] on
the amount of payment(s) made by Guilford for such Product, if
any, from the date that such payment was made until, as
applicable, (a) [***] after delivery of the replacement
Product and associated invoice to Guilford, or (b) deduction
of the credit from an amount due by Guilford to Baxter on the
date when due (i.e., the credit must actually be used by
Guilford and not simply be posted by Baxter to Guilford’s
account) or refund to Guilford, as applicable, pursuant to
Section 8.3(iii)(b); and
	 
	(v)	 	cancel any late fees assessed by Baxter to
Guilford for non-payment or late payment of the invoice(s)
relating to such Product which did not meet such warranty.






	8.4	 	Product Not Meeting Warranties. Any Product which
fails to meet the warranties under Section 8.1 and which is in
Guilford’s possession or control shall, at Guilford’s option, either
be returned to Baxter for destruction in accordance with Baxter’s
written shipping instructions, or destroyed by Guilford, in either
case at Baxter’s expense. If returned to Baxter, then risk of loss
for such Product shall pass to Baxter upon shipment from Guilford’s
facility.






	9.	 	INDEMNIFICATION






	9.1	 	Baxter Indemnification. Baxter shall defend,
indemnify and hold harmless Guilford and its Affiliates, and their
respective directors, officers, shareholders, employees and agents,
and each of their successors and permitted assigns (collectively,
the “Guilford Indemnitees”), from and against any and all claims,
actions, causes of action, liabilities, losses, damages, costs or
expenses, and resulting settlements, awards or judgments, including
reasonable attorneys’ fees (collectively, “Damages”), which arise
out of or relate to (i) the failure of Product provided by Baxter
hereunder to meet the warranties set forth in Section 8.1; (ii) a
breach by Baxter of any of its other representations, warranties,
covenants, agreements or obligations under this Agreement or the
Related Agreements; (iii) the negligence or willful misconduct of
Baxter in Manufacturing Product or in the performance or
nonperformance of any obligations under this Agreement or the
Related Agreements; or (iv) any patent, trade name, trademark,
service mark or copyright infringement or misuse, or any claim or
judgment of such infringement or misuse thereof, relating to the
Container or the Manufacture of the Product by Baxter (except to the
extent covered by Guilford’s indemnification obligations pursuant to
Section 9.2), or the use of the Baxter




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in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.




Trademarks, trade names or copyrightable materials in connection with any labeling or
promotional materials for the Product authorized by this Agreement;
provided, that Baxter shall have no obligation to indemnify Guilford
under this Section 9.1 to the extent such Damages arise out of or
relate to any matter for which Guilford is
obligated to indemnify Baxter under this Agreement or the Related
Agreements.




	9.2	 	Guilford Indemnification. Guilford, on its own
behalf, and on behalf of its Affiliates and Licensees, shall defend,
indemnify and hold harmless Baxter and its Affiliates and their
respective directors, officers, shareholders, employees and agents,
and each of their successors and permitted assigns (collectively,
the “Baxter Indemnitees”), from and against any and all Damages
which arise out of or relate to (i) the failure of Bulk Active
provided by Guilford hereunder to meet the warranties set forth in
Section 7.1; (ii) a breach of any of Guilford’s other
representations, warranties, covenants, agreements or obligations
under this Agreement or the Related Agreements; (iii) negligence or
willful misconduct in the performance or nonperformance of
Guilford’s obligations under this Agreement or the Related
Agreements; (iv) personal injury or property damage caused by the
Product (except to the extent covered by Baxter’s indemnification
obligations hereunder, including those set forth in Sections 9.1, 14
and 17, and the Related Agreements); or (v) any patent, trade name,
trademark, service mark or copyright infringement or misuse, or any
claim or judgment of such infringement or misuse thereof, relating
to the Bulk Active supplied by Guilford or to the Product (except to
the extent covered by Baxter’s indemnification obligations
hereunder, including those set forth in Section 9.1) or the use or
printing of any trademarks, trade names or copyrightable materials
of Guilford or its Affiliates, Licensees and Distributors as
authorized by this Agreement; provided, that Guilford shall have no
obligation to indemnify Baxter under this Section 9.2 to the extent
such Damages arise out of or relate to any matter for which Baxter
is obligated to indemnify Guilford under this Agreement or the
Related Agreements.
	 
	9.3	 	No Claim for Losses. In no event shall either party
or their respective Affiliates be liable for any special, indirect,
incidental or consequential damages arising out of this Agreement,
except to the extent any such special, indirect, incidental or
consequential damages shall be payable to a third party.
	 
	9.4	 	Prompt Notice. Each party agrees to give the other
prompt written notice of any claims made for which the other might
be liable under the foregoing indemnifications. The party from whom
indemnification is sought hereunder shall have the right to assume
responsibility for any such claim for indemnification, including the
defense thereof, by providing notice to the indemnified party within
[***] of receipt of such notice and by selecting counsel reasonably
acceptable to the indemnified party within such [***] period. The
indemnified party will cooperate fully with the indemnifying party
in defending or otherwise resolving any claim subject to
indemnification hereunder, and the indemnifying party will have full
control of the defense of any such litigation; however, the
indemnified party, at its expense, shall be entitled to be
represented by its own counsel in any such litigation. The




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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.








	 	 	indemnifying party agrees to bear all other costs and expenses of
litigation, including its own attorneys’ fees, in connection with
such litigation. In the event the indemnifying party refuses or fails to assume defense of any such
claim in accordance with the foregoing, or refuses or fails to
appoint counsel reasonably acceptable to the indemnified party
within the [***] time period set forth above, the indemnified party
may retain reasonable counsel to defend the claim and the
indemnifying party agrees to bear all reasonable costs and expenses
of such litigation, including the indemnified party’s reasonable
attorneys’ fees, in connection with such litigation. 
	 
	9.5	 	Refund Due to Injunction. In the event that the sale
of Product is enjoined due to an alleged or actual infringement of
third party intellectual property rights by either party, then, in
addition to all other rights and obligations of the parties
hereunder (i) if Guilford is obligated under Section 9.2(v) to
indemnify Baxter and Baxter’s Affiliates, Guilford shall pay Baxter
for any affected Product remaining in Baxter’s possession at the
Manufacturing Fees set forth in Section 4.1; and (ii) if Baxter is
obligated under Section 9.1(iv) to indemnify Guilford and Guilford’s
Affiliates, Baxter shall (a) return to Guilford any affected Bulk
Active remaining in Baxter’s possession; and (b) refund to Guilford
the Manufacturing Fees paid by Guilford, calculated on a FIFO basis,
for all affected Product remaining in Guilford’s and its
Affiliates’, Licensees’ and Distributors’ inventory as of the
applicable date of injunction and subsequently returned to Guilford
by its customers pursuant to the injunction after the injunction
date.
	 
	9.6	 	Not Binding. Neither party nor its respective
Affiliates shall be responsible or bound by any settlement made by
the other party without its prior written consent.
	 
	9.7	 	Additional Remedies. The indemnification obligations
of the parties established in this Section 9 shall be in addition
to, and shall be available to the parties irrespective of the
availability of, any other remedies expressly contemplated in this
Agreement, including without limitation those contemplated in
Sections 7, 8, 14, 17 and 22; provided, that no party shall be
entitled to recover multiple damages for the same claim under
multiple sections of this Agreement.






	10.	 	MARKETING






	10.1	 	Catalog Listings. Each party may list Product in its
catalogs as a regularly available item in the Territory. Baxter
shall also be permitted to provide customers with its “sell sheets”
listing the availability of Product. Baxter listings in catalogs
and “sell sheets” will show no prices and Baxter will provide
Guilford with a copy of such listings for prior written approval.
	 
	10.2	 	Baxter Promotion. Baxter shall not promote Product or
its therapeutic qualities. Baxter will use reasonable efforts to
promote acceptance and use of Container in the Territory. Any such
promotion of the Container that is to include reference to the
Product shall be approved in writing in advance by Guilford.




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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.





	10.3	 	Product Sales. Nothing in Section 10.1 or 10.2 shall
be construed to grant Baxter a license to sell Product. Guilford
and its Affiliates, Licensees and Distributors shall be the
exclusive marketers, sellers and distributors of Product in the
Territory.
	 
	10.4	 	Guilford Promotional Materials. Guilford is
responsible for, and is not required or expected to forward to
Baxter for written approval, any promotional materials for Product,
except as to the use of Baxter’s Trademarks as provided in Section
11 and except as to any statements and/or claims made regarding the
Container. Baxter hereby agrees to the use of its Trademarks and
the statements and/or claims regarding the Container made in the
promotional materials that have been approved in writing by Baxter
(the “Approved Materials”). Guilford need not submit individual
promotional materials to Baxter for approval provided that any
statements and/or claims made in such promotional materials using
Baxter’s Trademarks or related to the Container are identical to the
statements and/or claims made in the Approved Materials. If
Guilford desires to make statements and/or claims related to the
Container, or desires to use Baxter’s Trademarks, in either case in
a manner not identical to the Approved Materials, then Guilford
shall submit such statements and/or claims to Baxter in writing, and
if Baxter does not object to such statements and/or claims within
[***] of receipt from Guilford, then Guilford shall have been
authorized to use such Trademarks, statements and/or claims and the
Approved Materials shall be deemed to be amended to include such new
items.
	 
	10.5	 	Labeling. Prescribing information and all labeling
copy, including all changes therein, to accompany the Product in the
Territory on the Product label and in the Product insert shall be
the responsibility of Guilford. Notwithstanding the foregoing,
Guilford will collaborate with Baxter in determining the appropriate
information and statements to be made regarding the description,
characteristics and/or use of the Container and will utilize, to the
greatest extent possible and appropriate for the Product, statements
which are consistent with language used by Baxter for other products
packaged in Baxter’s Container.






	11.	 	INTELLECTUAL PROPERTY






	11.1	 	Registration of Trademarks. Each party or its
Affiliates, as the case may be, will seek to maintain in force
during the term of this Agreement, its Trademark(s), at its own
cost, in the Territory.
	 
	11.2	 	Ownership of Trademarks. Each party warrants that it
or its Affiliate, as the case may be, has full right, title and
interest in and to its Trademark(s) and registrations obtained in
the Territory. Each party retains all right, title and interest in
or to its Trademark(s) and shall not assert any claim to any
goodwill, reputation or ownership of the other party’s Trademark(s).
All uses of Guilford’s Trademark by Baxter shall inure to the benefit of
Guilford, and all uses of Baxter’s Trademarks by Guilford shall
inure to the benefit of Baxter. However, neither party shall be
obligated to compensate the other for




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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.









	 	 	benefits which may inure as the results of the use of such other party’s Trademark(s). 
	 
	11.3	 	License to Use Trademarks. During the term of this
Agreement, on a non-exclusive and royalty-free basis, solely for the
Territory and solely in connection with the rights and
responsibilities of the parties as provided in this Agreement and
the Related Agreements, (a) Guilford hereby grants Baxter a license
to use its Trademark in connection with the Manufacturing of Product
hereunder and in connection with activities permitted pursuant to
Sections 10.1 and 10.2; and (b) Baxter hereby grants Guilford a
license to use its Trademarks in connection with the registration,
promotion, sale and distribution of the Product. Neither party may
sublicense this license to the other party’s Trademark(s), except
that Guilford may sublicense this license to Guilford’s Affiliates,
Licensees and Distributors of Product, without obtaining the prior
written consent of Baxter. Any such sublicense granted shall
incorporate the terms of this Agreement by reference and shall bind
the sublicensee to the provisions of Section 11.
	 
	11.4	 	Trademark Marking. Each party shall approve in
writing the proper manner in which its Trademark(s) must be
displayed by the other party when used in connection with the terms
of this Agreement prior to any use of such Trademark(s), including
appropriate indication of each party’s ownership and registration
status of its Trademark(s).
	 
	11.5	 	Quality Control. Each party shall use the other
party’s Trademark(s) only as specified in Section 11 and in strict
accordance with the approved use under Section 11.4. The quality
control provisions of the Quality Agreement apply to the use of
Trademarks.
	 
	11.6	 	Goodwill of Trademarks. Neither party shall use the
other party’s Trademark(s) in any way which will adversely affect
the goodwill of the other party’s Trademark(s) and shall exercise
the necessary controls to maintain the good reputation and good will
of such Trademark(s). A requesting party may periodically inspect,
sample and review the other party’s actual use of the Trademark(s)
of the requesting party to determine whether the other party is
maintaining the goodwill of such Trademark(s). Such inspections,
sampling and review shall be undertaken by the other party at the
requesting party’s expense and request, but no more than once per
year, to which the other party shall promptly respond and cooperate.
	 
	11.7	 	Protection of Trademarks. Each party will in good
faith protect its Trademark rights against any infringement or claim
that the Trademarks are invalid or infringe the rights of others. Each party will give prompt written
notice to the other party of any infringement or possible
infringement of the other party’s Trademark(s) during the term of
this Agreement. The commencement, strategies, termination and
settlement of any action relating to the validity or infringement
of each party’s Trademark(s) shall be decided by the party owning
such Trademark(s).




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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.





	11.8	 	License to Patents and Unpatented Technology. During
the term of this Agreement, on a non-exclusive and royalty free
basis solely for the Territory and solely to the extent necessary
for Baxter to realize its rights and fulfill its obligations under
this Agreement, Guilford hereby grants to Baxter a license under all
patents, unpatented technology, and other intellectual property
rights owned or controlled by Guilford relating to the Product;
provided that (i) Baxter shall only have the right to such license,
and to use such patents, unpatented technology, and intellectual
property rights, if and to the extent necessary for Baxter to
realize its rights and fulfill its obligations under this Agreement
and the Related Agreements, and that Baxter shall have no right to
use any such patents, unpatented technology or intellectual property
rights in any other manner or for any other purpose, and (ii) Baxter
shall not sublicense the license granted pursuant to this Section
11.8 without Guilford’s prior written consent except in connection
with the assignment of this Agreement to an Affiliate in accordance
with Section 23.2.






	12.	 	GUILFORD LICENSEES AND DISTRIBUTORS






	12.1	 	Notification. If Guilford and/or its Affiliates
desire to license Guilford’s rights to market and sell Product in
the Territory, Guilford shall first notify Baxter in writing of the
identity of the proposed Licensee and the nature of the rights to be
licensed.
	 
	12.2	 	Baxter Disapproval Due to Confidentiality Concerns.
With respect to those proposed Licensees which will need access to
Baxter’s Confidential Information, Baxter shall have the right,
within [***] after written notice given by Guilford pursuant to
Section 12.1, to disapprove any such proposed Licensee; provided
that in order to exercise such right, Baxter must demonstrate to
Guilford’s reasonable satisfaction that such proposed Licensee is
engaged in, or is preparing to engage in, the development or
manufacture of Flexible Containers.
	 
	12.3	 	Other Baxter Disapproval. Baxter shall also have the
right, within thirty (30) calendar days after written notice given
by Guilford pursuant to Section 12.1, to disapprove any such
proposed Licensee if Guilford’s license with such proposed Licensee
would create circumstances under which Baxter, by carrying out its
obligations under this Agreement, would [***] then in existence in
the Territory; provided that Baxter must provide Guilford with
documentary evidence of such [***]. Notwithstanding the foregoing,
Baxter agrees that it will not, after it signs this Agreement, [***],
unless such contract or arrangement would similarly affect Baxter’s
other pharmaceutical company customers for pre-mixed products in
the Territory. In the event that Baxter shall for any reason
become subject to any provision or restriction in any contract or
other arrangement which would interfere with Guilford’s utilization
of third parties as Licensees in the Territory after the date of
this Agreement, this Section 12.3 shall not apply with respect to
such contract or arrangement. Without limiting the generality of
the foregoing, in no event shall Baxter be entitled to enter into
any contract which would interfere with Guilford’s utilization in
the Territory of a previously approved Licensee.




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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.





	12.4	 	No Unreasonable Disapproval. Baxter will not
unreasonably disapprove any proposed Licensee pursuant to Section
12.2 or 12.3.
	 
	12.5	 	Guilford License with Licensees. Guilford shall not
license any responsibilities under this Agreement to any proposed
Licensee disapproved by Baxter pursuant to Section 12.2 or 12.3.
	 
	12.6	 	Approval [***] Rights. If Baxter does not disapprove
a proposed Licensee within the thirty (30) calendar day period set
forth in Section 12.2 or 12.3, then such proposed Licensee shall be
deemed to be approved by Baxter [***]. Guilford shall have the
right to license its rights under this Agreement to any Licensee
approved by Baxter in accordance with this Section 12.
	 
	12.7	 	Distributors. Notwithstanding anything to the
contrary in this Section 12, there shall be no restriction upon, and
Baxter shall not have the right to approve or disapprove, Guilford’s
or its Affiliates’ use of any Distributors; provided that Guilford
shall not license its rights to market and sell Product to such
Distributors except in accordance with this Section 12 and Guilford
shall not disclose Baxter’s Confidential Information to any
Distributor without Baxter’s prior written consent, which consent
shall not be unreasonably withheld or delayed.
	 
	12.8	 	Guilford Continuing Obligations. No license or
contract with a Licensee or Distributor shall relieve Guilford of
its obligations under this Agreement or any other written agreement
entered into by the parties. Furthermore, Guilford shall be
responsible for the performance of any Licensee concerning the
Product in the Territory and shall indemnify Baxter and its
Affiliates with respect thereto as provided in Section 9.2.






	13.	 	BULK ACTIVE LOSSES





	 	 	Baxter shall reimburse Guilford for Bulk Active Losses in connection with
the Manufacture of Product pursuant to the provisions of Schedule E.






	14.	 	ENVIRONMENT






	14.1	 	Compliance with Laws. Baxter represents and warrants
that its operations and activities connected with or relating to the
preparation and Manufacture of the Product will comply with all
Applicable Laws relating to protection of human health and the
environment.
	 
	14.2	 	Indemnification. Baxter agrees to indemnify, defend
and hold harmless the Guilford Indemnitees from and against any and
all Damages arising out of or relating to a breach of the covenant
in Section 14.1, including without limitation (i) any condition in,
on, under or near the Facility, and (ii) any condition caused by
Baxter, its employees or agents arising out of or in any way
connected to any act or omission whatsoever of Baxter and/or its
Affiliates, employees or agents. Such duty of indemnification shall
include, but not be limited to, claims for injury to person(s) or
damage to property, including natural resources, and further
including claims for environmental




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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.




investigation and/or remediation of property at or around the Facility or any off-site location where
material from the Facility may have been transported or otherwise
came to be located. Baxter has the option of selecting the
attorneys for the defense of claims under this provision and shall
be responsible for all costs and expenses of such attorneys.
Guilford may elect to have its own attorneys as additional counsel,
in which case Guilford shall be responsible for its own attorneys’
fees.




	15.	 	CONFIDENTIALITY






	15.1	 	Confidentiality. With respect to the terms of this
Agreement and all information furnished by one party to the other
party pursuant to or under this Agreement or the Confidentiality
Agreement entered into on October 15, 2003, whether or not
identified herein as specifically subject to Section 15,
(collectively, “Confidential Information”), the party receiving such
Confidential Information shall maintain the confidential and
proprietary status of such Confidential Information, keep such
Confidential Information and each part thereof within its possession
or under its control, use all reasonable efforts to prevent the
disclosure of any Confidential Information to any other person or
entity, and use all reasonable efforts to ensure that such
Confidential Information is used only for those purposes
specifically authorized by this Agreement. These mutual obligations
shall not apply to any information to the extent that such
information is:






	(i)	 	developed by a receiving party independently of
the Confidential Information and not in violation of this
Agreement;
	 
	(ii)	 	in the public domain at the time of its receipt
from the disclosing party or thereafter becomes part of the
public domain through no fault of the recipient;
	 
	(iii)	 	received without obligation of confidentiality
from a third party having the right to disclose such
information;
	 
	(iv)	 	released from the restrictions of this Section
15.1 by the express written consent of the disclosing party;
or
	 
	(v)	 	known by the receiving party prior to its receipt
from the disclosing party as evidenced by the receiving
party’s business records.






	15.2	 	Exceptions. Notwithstanding the provisions of Section
15.1, the parties shall have the right to disclose Confidential
Information hereunder to the extent:






	(i)	 	required by Applicable Laws to be disclosed (the
disclosing party shall, however, give the other party
reasonable prior notice thereof and a copy of the disclosure
proposed to be made, and will also reasonably cooperate with
the other party to prevent or to limit such disclosure and
permit the other party to participate in seeking an
appropriate protective order);




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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.





	(ii)	 	required by Securities Laws to be disclosed (the
disclosing party shall, however, consult with the other party
on the provisions of this Agreement to be redacted in any
filings made by the parties with the United States Securities
and Exchange Commission or as otherwise required by Applicable
Law);
	 
	(iii)	 	disclosed to the FDA and/or other governmental
agencies by a party in fulfillment of its obligations under
this Agreement in order to obtain or maintain FDA approval of
the Product, or to obtain or maintain patents (but such
disclosure shall only be made pursuant to the provisions of
this Agreement, as appropriate);
	 
	(iv)	 	necessary to be disclosed to Affiliates,
Licensees, Distributors, agents, consultants, and/or other
third parties, for the research and development, manufacturing
and/or marketing of the Product in the Territory, but only on
the condition that the prior written approval of Baxter has
been obtained for disclosure to Distributors in accordance
with Section 12.7 and such recipients of the Confidential
Information shall, prior to such disclosure, agree in writing
to be bound by the confidentiality and non-use obligations
contained in this Agreement; or
	 
	(v)	 	necessary to effect the licenses granted under
this Agreement, the Related Agreements or any other written
agreement entered into by the parties, but only on the
condition that such recipients of the Confidential Information
shall, prior to such disclosure, agree in writing to be bound
by the confidentiality and non-use obligations contained in
this Agreement and any other written agreement entered into by
the parties.






	15.3	 	Further Exception. Nothing in this Section 15 shall
prohibit a party from disclosing its own Confidential Information to
third parties unless such information also constitutes Confidential
Information of the other party hereunder or otherwise
is contemplated to be kept as confidential in this Agreement or the
Related Agreements.
	 
	15.4	 	Export. A recipient of Confidential Information shall
adhere to the U.S. Export Administration laws and regulations and
shall not export or re-export, to the extent covered by such laws
and regulations, any technical data or information received from the
disclosing party or the direct product of such technical data or
information to any proscribed country listed in the U.S. Export
Administration regulations unless properly authorized by the U.S.
Government.
	 
	15.5	 	Enforcement. Each party specifically recognizes that
any breach by it of this Section 15 may cause irreparable injury to
the other party and that actual damages may be difficult to
ascertain and in any event, may be inadequate. Accordingly (and
without limiting the availability of legal or equitable, including
injunctive, remedies under any other provision of this Agreement)
each party agrees that in the event of any such breach,
notwithstanding the provisions of Section 9 or 23.6 hereof, the
other party shall be entitled to seek,




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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.




by way of private litigation in the first instance, injunctive relief and such other legal and
equitable remedies as may be available. 




	15.6	 	Prior Arrangements. The parties acknowledge that they
have executed earlier agreements regarding confidential information
exchanged pursuant to the Confidentiality Agreement entered into on
October 15, 2003. The parties agree that Section 15 of this
Agreement shall supersede all provisions in such earlier agreements
relating to confidentiality and non-use obligations of the parties
with regard to confidential information disclosed under such earlier
agreements, except that where such agreements contain
confidentiality and non-use obligations which are more restrictive
than those set forth in Section 15 of this Agreement then those more
restrictive provisions shall continue to apply after execution of
this Agreement to confidential information disclosed under such more
restrictive provisions.
	 
	15.7	 	Return of Confidential Information. All Confidential
Information, including copies thereof, shall remain the property of
the disclosing party and, to the extent readily identifiable or
clearly identified, and upon request of the disclosing party, shall
be returned to it upon expiration or termination of this Agreement,
except to the extent retention is necessary to effect the licenses
granted under this Agreement or to comply with Applicable Laws.
	 
	15.8	 	Survival. The obligations of confidentiality and
non-use referred to in Section 15.1 shall survive until five (5)
years after termination or expiration of this Agreement.






	16.	 	TERM AND TERMINATION






	16.1	 	Condition Precedent. Both parties’ rights and
obligations under this Agreement and the Related Agreements, in
particular, those rights and obligations under Section 2 and the CTM
Supply Agreement, will be contingent upon the execution by Merck and
Baxter of an amendment to the Merck/Baxter Agreement (“the
Amendment”), which shall specifically relieve and release Merck from
its obligation to purchase from Baxter, and specifically relieve and
release Baxter from its obligation to manufacture and supply to
Merck, Product for sale in the Territory and otherwise permit Baxter
to perform the services and meet its obligations to Guilford
hereunder; provided that Baxter shall use reasonable commercial
efforts to enter into the Amendment with Merck contemporaneously
with this Agreement or as soon as practicable (and in any event
within five (5) days) after the date hereof. In the event that
Baxter and Merck shall fail to execute the Amendment, either
Guilford or Baxter shall have the right to terminate this Agreement
and the Related Agreements effective immediately upon written notice
to the other, except that Baxter shall have no such right to
terminate this Agreement or the Related Agreements if Baxter shall
have failed to exercise reasonable commercial efforts to enter into
the Amendment as contemplated by the foregoing sentence.
	 
	16.2	 	Term. The initial term of this Agreement shall be
effective as of the Effective Date, and shall continue in effect for
five (5) years. Thereafter, this




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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.




Agreement shall be renewed automatically for consecutive two (2) year periods unless and until
either party shall give written notice of termination at least
twelve (12) months before the end of the initial term or any renewal
thereof.




	16.3	 	Termination for Default or Bankruptcy. This Agreement
may be terminated upon written notice by either party to the other
party at any time during the term of this Agreement:






	(i)	 	if the other party, by act or omission, breaches
or defaults on a material term or condition of this Agreement
and such party fails to cure such breach within thirty (30)
calendar days after written notice by the other party, or if
by its nature such breach cannot be cured within such period
and such party does not take all reasonable steps which can be
taken within such thirty (30) day period to correct or remedy
such breach and thereafter diligently pursues such corrective
measures, which shall be completed not later than ninety (90)
calendar days from the date of such notice, unless the parties
shall agree otherwise in writing; or
	 
	(ii)	 	upon the filing or institution with respect to
the other party of bankruptcy, reorganization, liquidation or
receivership proceedings, or upon an assignment of a
substantial portion of its assets for the benefit of creditors
by the other party; provided, however, in the case of any
involuntary proceeding such right to terminate shall only
become effective if the other party consents to the
involuntary proceeding or such proceeding is not dismissed within ninety (90) calendar
days after the filing thereof.






	16.4	 	Termination by Either Party Due to Change in
Ownership. Each party shall provide written notice to the other
party prior to, or upon first becoming aware of (or, if prior notice
is not practicable or is otherwise prohibited, as soon as
practicable or after such notice is no longer prohibited), a change
of fifty percent (50%) or more of the direct or indirect ownership
of, or a change in control of, the notifying party (a “Change in
Control”). If the party entitled to notice reasonably believes that
such Change in Control will result in material harm to its business
as a result of competition between Guilford (and its Affiliates) and
Baxter (and its Affiliates) as a result of such Change in Control,
then such party shall have the option, within sixty (60) calendar
days of such notice, to terminate this Agreement effective
immediately after notifying the other party in writing.
	 
	16.5	 	Termination by Guilford if Product Is Withdrawn from the
U.S. Market. This Agreement may be terminated or suspended
immediately by Guilford if Product shall be withdrawn from the
market in the U.S. by Guilford due to (a) serious problems relating
to safety or efficacy; or (b) failure to obtain or maintain FDA
approval or any other license, permit or authorization required for
the Manufacture and sale of the Product in the United States. In
case of any termination or suspension of this Agreement under this
Section 16.5, Guilford’s sole liability shall be to pay Baxter for
Product as provided in




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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.




Section 16.8. This Agreement may be reinstated by Guilford for the balance of the existing contract term
if Guilford shall reintroduce Product within ninety (90) calendar
days following suspension of this Agreement under this Section 16.5;
thereafter, this Agreement may be reinstated by Guilford upon
agreement by Baxter, which shall not be unreasonably withheld.




	16.6	 	Termination by Guilford in the Event of Relocation of
Facility. Guilford shall have the right to terminate this
Agreement if the Facility used to Manufacture Product is relocated
in accordance with the procedures set forth in this Section 16.6,
provided, however, that Guilford’s approval of any such relocation
of Facility shall not be unreasonably withheld. Manufacture of
Product may not be relocated without at least two (2) years advance
written notice to Guilford. Guilford must provide Baxter with
written notice of its intent to terminate as set forth herein no
later than one hundred eighty (180) calendar days after receipt of
Baxter’s notice of its intent to relocate Manufacture of Product to
a new facility, which termination shall be effective as of the end
of the two (2) year notice period provided by Baxter. In the event
that Baxter intends to relocate Manufacturing of Product to another
facility, then, in addition to its other obligations set forth
herein, Baxter shall, at its own cost, be obligated to meet
pre-approval inspection and readiness requirements of the FDA,
revalidate equipment and Manufacturing processes, Manufacture new
stability batches, conduct required stability studies,
reimburse Guilford for any associated reasonable documented direct
costs of amending its filings with the FDA, including, but not
necessarily limited to, salaries and wages of personnel and
out-of-pocket costs, and pay for any other reasonable direct costs
associated with the relocation. Baxter will continue to supply
Product from the Facility until the new facility is approved by the
FDA.
	 
	16.7	 	Termination by Guilford in the Event of
Cross-Contamination. If Baxter receives FDA approval to
formulate, fill, label, package, warehouse and/or test any chemical
entity or product in the Facility that Guilford reasonably considers
to present cross-contamination problems for Product Manufactured
hereunder as contemplated in the Quality Agreement and Guilford can
provide reasonable evidence to this effect to Baxter, then Guilford
shall be entitled to terminate this Agreement immediately upon
written notice to Baxter, provided that such written notice is given
no later than thirty (30) calendar days after Baxter advises
Guilford in writing of such FDA approval.
	 
	16.8	 	Dispositions of Inventory Upon Termination or
Expiration.






	16.8.1	 	Certain Terminations by Guilford. In the event of
any termination of this Agreement by Guilford pursuant to
Section 16.3, 16.4, 16.6 or 16.7, then (i) Baxter shall
promptly return any remaining inventory of Bulk Active, and
package inserts and materials relating to the packaging of the
Product which contain Guilford’s or its Affiliates’,
Licensees’ or Distributors’ trademarks or trade names, in
accordance with Guilford’s written instructions, and Baxter
shall pay the freight and insurance costs and shall assume the
risk of loss for return of such items until Baxter physically
transfers the items to Guilford at Guilford’s designated
location; (ii) Guilford shall have the option to




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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.




cancel any outstanding Firm Orders for Product, without penalty to Guilford, or to compel Baxter to Manufacture and Deliver
Product relating to any outstanding Firm Orders in accordance
with the terms of this Agreement; and (iii) Guilford shall
have the option to purchase from Baxter all Product which
meets the warranties and other requirements of this Agreement,
in accordance with the terms of this Agreement.




	16.8.2	 	Certain Terminations by Baxter. In the event of any
termination of this Agreement by Baxter pursuant to Section
16.3 or 16.4, then (i) Baxter shall promptly return any
remaining inventory of Bulk Active, and package inserts and
materials relating to the packaging of the Product which
contain Guilford’s or its Affiliates’, Licensees’, or
Distributors’ trademarks or trade names, in accordance with
Guilford’s written instructions, and Guilford shall pay the
freight and insurance costs and assume the risk of loss for
return of such items after Baxter physically transfers the
items to Guilford’s designated carrier at Baxter’s Facility; (ii) Baxter shall have the
option to cancel any outstanding Firm Orders for Product,
without penalty to Baxter, or to Manufacture and Deliver
Product relating to any outstanding Firm Orders in
accordance with the terms of this Agreement; and (iii)
Guilford shall purchase from Baxter all Product Manufactured
pursuant to Firm Orders which meets the warranties and other
requirements of this Agreement, in accordance with the terms
of this Agreement.
	 
	16.8.3	 	Termination for Any Other Reason or Expiration. In
the event of termination of this Agreement for any reason
other than those contemplated in Sections 16.8.1 and 16.8.2,
or in the event of expiration of this Agreement, then (i)
Baxter shall promptly return any remaining inventory of Bulk
Active, and package inserts and materials relating to the
packaging of the Product which contain Guilford’s or its
Affiliates’, Licensees’, or Distributors’ trademarks or trade
names, in accordance with Guilford’s written instructions, and
the parties shall share equally the freight and insurance
costs and the risk of loss for return of such items after
Baxter physically transfers the items to Guilford’s designated
carrier at Baxter’s Facility; and (ii) the parties shall
cooperate in good faith to either cancel any outstanding Firm
Orders for Product, without penalty to either party, or to
Manufacture and Deliver Product relating to any outstanding
Firm Orders for purchase by Guilford in accordance with the
terms of this Agreement.
	 
	16.8.4	 	Destruction and Bulk Active Loss Calculations. Any
Product which is not purchased by Guilford under the
provisions of Section 16.8.1(iii) shall be destroyed by Baxter
in accordance with Section 17, and such Product shall be
included in Line F of the Bulk Active Usage Variance form(s)
prepared for the relevant Bulk Production Lot pursuant to
Schedule E.






	16.9	 	Remaining Obligations. Expiration or termination of
this Agreement shall not relieve the parties of any of their
respective obligations accruing prior to such




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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.




expiration or termination. The covenants and agreements of the parties that
require by their terms performance or compliance after expiration or
termination of this Agreement shall survive the termination of this
Agreement.




	16.10	 	Use of Trademarks. Except as may be required to
dispose of Product in existence at the time of expiration or
termination of this Agreement, any and all rights of either party to
use the Trademark(s) and trade names of the other party for the
Product shall end upon termination or expiration of this Agreement.
	 
	16.11	 	Alternative Suppliers. At the expiration of the term
of this Agreement, or in the event of early termination of this
Agreement by Guilford pursuant to any of Sections 16.3, 16.4, 16.6,
16.7 or 23.1, at Guilford’s written request [***]. The reasonable
costs for such technology transfer shall be reimbursed by Guilford
if the transfer results from expiration of the Agreement and the costs of
the transfer shall be born by Baxter if the transfer results from a
material breach by Baxter. Upon the earlier of (i) Guilford’s
delivery of notice of termination pursuant to any of Sections 16.3,
16.4, 16.6 or 16.7, (ii) the existence and continuation of a
circumstance contemplated by 23.1 for a period of at least ninety
(90) days, and (iii) one (1) year prior to the expiration of this
Agreement by its terms, Guilford shall be entitled to qualify an
alternative supplier (other than Baxter or its Affiliates) of
Product, and Guilford’s reasonable activities in connection with
such qualification shall not constitute a violation of Section 3.5;
provided that Guilford shall not be otherwise relieved of its
obligations hereunder, including its obligation under Section 15.






	17.	 	WASTE/DISPOSAL






	17.1	 	Baxter Warranty. To the extent of its
responsibilities therefor pursuant to this Agreement, Baxter
warrants that in connection with handling and/or disposing of (i)
any and all Bulk Active, Materials and/or Product, and (ii) those
waste streams derived from or associated with Bulk Active, Materials
and/or Product, or derived from or associated with the preparation
and Manufacturing of the Product, it will comply with all Applicable
Laws governing the transportation, unloading, discharge, generation,
storage, treatment, disposal, and handling of Bulk Active, Materials
and/or Product Manufactured under this Agreement, including, but not
limited to:






	(i)	 	the Toxic Substance Control Act (P.L. 94-469);
	 
	(ii)	 	the Federal Food, Drug and Cosmetic Act, as
amended, 21 U.S. Code, Section 301, et. seq.
	 
	(iii)	 	the Clean Air Act, 42, U.S.C. Section 7401, et.
seq.;
	 
	(iv)	 	the Federal Water Pollution Control Act, 33
U.S.C. Section 1251, et. seq.; and




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The symbol “[***]” denotes that confidential portions of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions
have been submitted separately to the Securities and Exchange Commission.





	(v)	 	the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901, et. seq.






	17.2	 	Baxter Indemnification. Baxter agrees to defend,
indemnify and hold Guilford and its Affiliates harmless from any and
all third party claims, losses, damages, costs and expenses,
including reasonable attorneys’ fees, arising from the
transportation, unloading, discharge, generation, storage,
treatment, disposal and handling of waste Bulk Active, Materials and
Product and of waste streams derived from or associated with the
preparation and Manufacturing of Product hereunder.
	 
	17.3	 	Limitation. The warranty and indemnity set forth in
Sections 17.1 and 17.2 shall not apply with respect to handling or
disposal of Bulk Active, Product, package inserts
and other materials used in Manufacturing of Product to the extent
that Guilford is responsible therefor pursuant to this Agreement or
otherwise, including Baxter returns of Bulk Active to Guilford for
destruction in accordance with the terms of this Agreement.
	 
	17.4	 	Guilford Indemnification. Guilford agrees to defend,
indemnify and hold Baxter and its Affiliates harmless from any and
all third party claims, losses, damages, costs and expenses,
including reasonable attorneys’ fees, arising from the
transportation, unloading, discharge, generation, storage,
treatment, disposal and handling of Bulk Active, Product, package
inserts and other materials used in the Manufacture of Product to
the extent that Guilford is responsible therefor pursuant to this
Agreement or otherwise, including handling and disposal by Guilford
of any and all customer return of Product in accordance with the
terms of this Agreement, except to the extent such claims, losses,
damages, costs and expenses are covered by Baxter’s indemnification
obligations hereunder, including pursuant to Section 17.2.






	18.	 	INSURANCE






	18.1	 	Insurance Coverage. Baxter shall, at its sole cost
and expense, procure and maintain throughout the life of this
Agreement and any extension thereof the following insurance with
carriers satisfactory to Guilford:






	(i)	 	Statutory Workers Compensation insurance as
required by Applicable Law and Employers Liability insurance
in an amount not less than [***] for each accident.
	 
	(ii)	 	Commercial General Liability insurance for bodily
injury or death of persons and/or loss of or damage to
property as follows:






	(a)	 	General Aggregate [***]
	 
	(b)	 	Premises/Operations [***]
	 
	(c)	 	Blanket Contractual Liability [***]
	 
	(d)	 	Completed Products Operations [***]






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The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.





	(e)	 	Personal & Advertising Injury [***]






	(iii)	 	Excess Liability insurance with limits of [***]
per occurrence and in the aggregate.






	18.2	 	Evidence of Insurance. Baxter shall provide Guilford
with written evidence of such insurance naming Guilford as an
additional insured and shall notify Guilford at least [***] prior to
any cancellation, non-renewal or material change in such insurance.
Baxter may elect to self-insure all or part of the limits described
above (including deductibles or retentions); however, such decision
to self-
insure shall not in any way limit Baxter’s liability with respect
to its indemnification obligations under this Agreement and the
Related Agreements.






	19.	 	REGULATORY MATTERS






	19.1	 	Maintenance of NDA. Guilford shall be responsible for
maintaining the NDA and all regulatory filings and submissions
associated with the Product in the Territory. Baxter shall provide
Manufacturing-related Product information to Guilford as may be
reasonably necessary or helpful for Guilford to meet its regulatory
obligations to maintain the NDA and file the required reports
thereunder in the Territory, including providing such information
relating to any changes to the Product Specifications, the
Manufacturing process or otherwise pursuant to the Quality
Agreement. Each party shall cooperate with the other in making and
maintaining all regulatory filings that may be necessary in
connection with the performance of this Agreement and the Related
Agreements.
	 
	19.2	 	Communications with the FDA. Guilford shall have the
responsibility for communications with the FDA relating to the
Product. Baxter shall provide Guilford, in a timely manner, all
information reasonably in its (or its Affiliates’) control
concerning the Product within or outside the Territory reasonably
necessary or helpful to meet Guilford’s regulatory obligations.






	20.	 	QUALITY AGREEMENT
	 
	 	 	Simultaneously with the execution of this Agreement, the parties are
entering into the Quality Agreement. Quality control testing and other
quality related matters shall be governed by, and performed by the
parties in accordance with, the terms and conditions of the Quality
Agreement. The Quality Agreement is intended to supplement this
Agreement, and is hereby incorporated in this Agreement in its entirety,
except that in the event of a conflict between any term, condition or
provision of this Agreement and any term, condition or provision of the
Quality Agreement, the applicable term, condition or provision of this
Agreement shall control unless otherwise agreed in writing by the
parties.
	 
	21.	 	CTM SUPPLY AGREEMENT
	 
	 	 	Simultaneously with the execution of this Agreement, the parties are
entering into the CTM Supply Agreement. Manufacture and supply of
clinical trial material and





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The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.






	 	 	related matters shall be governed by, and
performed by the parties in accordance with, the terms and conditions of
the CTM Supply Agreement. The CTM Supply Agreement is intended to
supplement this Agreement, and is hereby incorporated in this Agreement
in its entirety, except that in the event of a conflict between any term,
condition or provision of this Agreement and any term, condition or
provision of the CTM Supply Agreement, the applicable term, condition or
provision of this Agreement shall control unless otherwise agreed in
writing by the parties.
	 
	22.	 	SAFETY MATTERS, PRODUCT RETURN AND PRODUCT RECALL






	22.1	 	Safety. Baxter shall comply at all times with all
applicable health and safety regulations, policies and procedures
relating to the Manufacture of the Product, including the
transmission by Baxter to its employees of health and safety
information relating to the Product and its manufacture, storage,
disposal and transportation
	 
	22.2	 	Adverse Experience Reporting. The parties shall be
responsible for reporting adverse experiences and complaints with
respect to the Product (including the Bulk Active and the
Materials), and for responding to any such reports and complaints,
in accordance with the terms and conditions of the Quality
Agreement.
	 
	22.3	 	Product Returns. In the event that Baxter (or any of
its Affiliates) shall receive any returned goods of Product from a
third party, Baxter shall notify Guilford of such returned goods
and, at Guilford’s option, either destroy such returned goods or
deliver such return goods to Guilford, in each case at Guilford’s
expense. Guilford shall not have the right to return any Product
received by Guilford as returned goods from third parties to Baxter,
other than in accordance with Section 8.2. The parties shall notify
each other of, and shall respond to, any customer complaints
associated with returned Product in accordance with the terms and
conditions of the Quality Agreement.
	 
	22.4	 	Product Recall. Product recalls shall be conducted in
accordance with the terms of the Quality Agreement. Each party
shall make a permanent, complete and accurate record of all costs
incurred by it in connection with any Product recall, a copy of
which shall be delivered to the other as soon after the completion
of such recall or seizure as practically may be done. If the cause
of or reason for said recall or seizure arises from or is
attributable to Baxter’s negligence or breach of this Agreement,
Baxter shall, in addition to its other obligations hereunder,
reimburse Guilford for (i) all Bulk Active incorporated into the
recalled or withdrawn Product at the price per kilo set forth in
Section 8.2(ii), (ii) the Manufacturing Fees paid by Guilford for
the recalled or withdrawn Product calculated on a FIFO basis, and
(iii) all reasonable direct expenses including, but not necessarily
limited to, salaries and wages of personnel and out-of-pocket costs
which are incurred by Guilford and its Affiliates in connection with
such recall and documented and invoiced by Guilford to Baxter. If
the cause of or reason for said recall or seizure is directly
attributable to Guilford’s negligence or breach of this Agreement,
Guilford shall, in addition to its other obligations hereunder,
reimburse Baxter for all reasonable direct expenses including, but
not necessarily limited to,




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The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.





	 	 	salaries and wages of personnel and
out-of-pocket costs which are incurred and documented by Baxter in
connection with such recall and invoiced by Baxter to Guilford. If
Baxter and Guilford cannot agree which party is at fault, then an
independent technical expert, acceptable to both, will be
designated to make the determination. The so designated technical
expert shall not be an employee, consultant, officer, director or
shareholder of or otherwise associated with either party or an
Affiliate of either party. The technical expert’s determination
shall be, in the absence of fraud or manifest error, binding and
conclusive upon the parties.
	 
	23.	 	MISCELLANEOUS






	23.1	 	Force Majeure. Except as otherwise contemplated in
Section 3.4, Section 16.11 and this Section 23.1, neither party
shall be liable to the other for the failure or delay in performing
any obligation under this Agreement if and to the extent such
failure or delay is due to causes beyond the reasonable control of
the affected party, including (i) acts of God; (ii) weather, fire or
explosion; (iii) war, invasion, riot or other civil unrest; (iv)
governmental laws, orders, restrictions, actions, embargos or
blockades; (v) national or regional emergency; (vi) injunctions,
strikes, lockouts, labor trouble or other industrial disturbances;
(vii) shortage of adequate fuel, power, Materials, Bulk Active or
transportation facilities; or (viii) any other event which is beyond
the reasonable control of the affected party; provided that the
party affected shall promptly notify the other party, in writing, of
the force majeure condition and shall exert reasonable efforts to
eliminate, cure or overcome any such causes, at its own cost, and to
resume performance of its obligations as soon as possible. After
notice has been given by the affected party to the other party of
the force majeure event, the parties will discuss and attempt to
resolve the issues related to the force majeure event on terms and
conditions agreeable to both parties. Notwithstanding the
foregoing, if as the result of a force majeure event Baxter cannot
supply Product to Guilford for a period exceeding one hundred twenty
(120) calendar days, then Guilford shall be entitled to terminate
this Agreement upon written notice to Baxter and such termination
shall be effective immediately.
	 
	23.2	 	Assignment. Neither this Agreement nor the rights and
obligations of the parties hereunder may be assigned, delegated or
otherwise transferred by either party without the prior written
consent of the other party, which shall not be unreasonably withheld
or delayed, except (i) as contemplated in Section 12.6, and (ii)
that either party shall have the right to assign this Agreement, or
delegate its rights and obligations hereunder, in whole or in part,
to any Affiliate of such party; provided, that such assigning party
shall remain primarily responsible for its obligations hereunder.
In addition to the foregoing, and notwithstanding anything to the
contrary therein, Guilford shall have the right to grant a security
interest in, or to collaterally assign, this Agreement to the
extent, but only to the extent, required in connection with the
financing arrangements described in Schedule I hereto, and such
grant or assignment shall include the right of the grantee or
assignee to foreclose upon such security interest or collateral upon
default by Guilford and, in such event, to sell, assign, license or
otherwise dispose of such security interest or




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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.





	 	 	collateral to a third
party;
provided, however, that any such sale, assignment, license or other
disposal shall be subject to the provisions of Section 16.4 to the
extent applicable. Any attempted assignment of this Agreement in
violation of this Section 23.2 shall be void. Notwithstanding the
foregoing, the prohibition on assignment set forth in this Section
23.2 shall not apply to any assignment that constitutes a Change in
Control, which shall be governed by the provisions of Section 16.4.
	 
	23.3	 	Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid,
illegal or unenforceable in any respect in any jurisdiction, such
provisions shall be ineffective to the extent (and only to the
extent) of such invalidity or unenforceability in such jurisdiction
and the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby, unless the absence of the invalidated provision(s)
adversely affects the substantive rights of the parties. The
parties agree to replace any invalid, illegal or unenforceable
provision(s) or parts thereof by new provision(s) which closely
approximate the result intended by the parties.
	 
	23.4	 	Notices. All notices or other communications which
are required or permitted hereunder shall be in English and in
writing and shall be sufficient and deemed given on the same
business day if delivered personally, on the same business day if
sent by facsimile (and promptly confirmed by personal delivery,
registered or certified mail, or overnight courier), on the business
day after dispatch is sent by nationally recognized overnight
courier which provides a delivery receipt, or on the third business
day following the date of mailing if sent by registered or certified
mail, postage prepaid, return receipt requested, addressed as
follows:





	 	 	 	 	 
	

	 	if to Guilford:
	 	Guilford Pharmaceuticals Inc.
	

	 	 	 	6611 Tributary Street
	

	 	 	 	Baltimore, Maryland 21224
	

	 	 	 	Attention: Senior Vice President -

Technical Operations
	

	 	 	 	Fax Number: (410) 631-6899
	 
	 	 	 	 
	

	 	with a copy to:
	 	Guilford Pharmaceuticals Inc.
	

	 	 	 	6611 Tributary Street
	

	 	 	 	Baltimore, Maryland 21224
	

	 	 	 	Attention: General Counsel
	

	 	 	 	Fax Number: (410) 631-5598
	 
	 	 	 	 
	

	 	if to Baxter:
	 	Baxter Healthcare Corporation
	

	 	 	 	Route 120 & Wilson Rd.
	

	 	 	 	Round Lake, IL 60073
	

	 	 	 	Attention: General Manager
	

	 	 	 	Global Drug Delivery
	

	 	 	 	Fax Number: 847-270-3410







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The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.




	 	 	 
	with a copy to:

	 	Baxter Healthcare Corporation
	

	 	Highway 221 North
	

	 	Marion, North Carolina 28752
	

	 	Attention: Plant Manager
	

	 	Fax Number: 704-756-4821








	 	 	or to such other address as the party to whom notice is to be given
may have furnished to the other party in accordance herewith.
	 
	23.5	 	Applicable Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware
without reference to any rules of conflict of laws or renvoi.
	 
	23.6	 	Alternative Dispute Resolution. The parties will
attempt to settle any claim or controversy arising out of this
Agreement through good faith negotiations and in the spirit of
mutual cooperation. If those attempts fail, except as otherwise
contemplated in this Agreement or the Related Agreements (including
without limitation Sections 7.2, 8.2 and 15.5 of this Agreement) and
subject to the provisions of this Section 23.6, such dispute between
the parties will be mediated by a mutually acceptable mediator to be
chosen by the parties within [***] after written notice by the party
demanding mediation. The disputes referred to in Sections 7.2, 8.2
and 15.5 of this Agreement, or elsewhere in this Agreement or the
Related Agreements, shall be settled as specified therein. Neither
party may unreasonably withhold consent of the selection of the
mediator and the parties will share the costs of the mediation
equally. The parties may agree to replace mediation with some other
form of Alternative Dispute Resolution (“ADR”), such as neutral
fact-finding, mini-trial or arbitration. Any dispute which cannot
be resolved by the parties through mediation or another form of ADR
within [***] of the date of the initial written demand for mediation
may then be submitted to the Federal or state courts, as
appropriate, for resolution. The use of any ADR procedures with
respect to unresolved disputes will not be construed under the
doctrine of latches, waiver or estoppel to affect adversely either
party’s right to assert any claim or defense. Notwithstanding the
foregoing, nothing in this Section 23.6 will prevent either party
from resorting to judicial process at any time if (i) good faith
efforts to resolve the dispute under these procedures have been
unsuccessful and such party reasonably believes that good faith
efforts to continue to attempt to resolve the dispute under these
procedures would be unsuccessful (irrespective of whether the [***]
period contemplated herein has expired), or (ii) injunctive relief
from a court is necessary to prevent serious and irreparable injury
to one party or to others.
	 
	23.7	 	Entire Agreement. This Agreement, together with the
Related Agreements, contains the entire understanding of the parties
with respect to the subject matter hereof and cancels all previous
agreements, negotiations, commitments and writing in
respect to the subject matter hereof except for the confidentiality
agreements between the parties to the extent referred to in Section
15.3.





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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.





	23.8	 	Amendment. This Agreement may be amended, or any term
hereof modified, only by a written instrument duly executed by both
parties hereto.
	 
	23.9	 	Subcontracting. Baxter shall not contract with a
third party to undertake any portion of the Manufacture of Product
without Guilford’s prior written consent.
	 
	23.10	 	Headings. The captions to the Sections hereof are
not a part of this Agreement, but are merely guides or labels to
assist in locating and reading the Sections hereof.
	 
	23.11	 	Independent Contractors. It is expressly agreed that
Baxter and Guilford shall be independent contractors and that the
relationship between the two parties shall not constitute a
partnership, joint venture, agency or similar relationship. Neither
Baxter nor Guilford shall have the authority to make any statements,
representations or commitments of any kind, or to take any action,
which shall be binding on the other, without the prior written
consent of the other party to do so.
	 
	23.12	 	Waiver. The waiver by either party hereto of (i) any
right hereunder; (ii) the failure to perform by the other party; or
(iii) a breach by the other party shall not be effective unless set
forth in a writing signed by the party against who such waiver is to
be enforced, and shall not be deemed a waiver of any other right
hereunder or of any other breach or failure by said other party,
whether of a similar nature of otherwise.
	 
	23.13	 	Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original, but which
together shall constitute one and the same instrument. Each party
may execute this Agreement on a facsimile of the Agreement and
facsimile signatures of authorized signatories of either party shall
constitute due execution and delivery of this Agreement.
	 
	23.14	 	Successors and Assigns. The terms and conditions of
this Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors and permitted
assigns.
	 
	23.15	 	Execution. Each party agrees to execute such further
papers, agreements, documents, instruments and the like as may be
necessary or desirable to effect the purpose of this Agreement and
to carry out its provisions.
	 
	23.16	 	Remedies. Except as may be otherwise expressly
provided herein, no remedy referred to in this Agreement is intended
to be exclusive, but each shall be cumulative and in addition to any
other remedy referred to in this Agreement or otherwise available
under law.
	 
	23.17	 	Review with Counsel. Each of the parties agrees that
it has had the opportunity to review this Agreement with its legal
counsel. Accordingly, the rule of construction that any ambiguity
in this Agreement is to be construed against the drafting party
shall not apply.




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omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.





	23.18	 	Benefit. Except as otherwise provided in Section
23.19, nothing in this Agreement or the Related Agreements, express
or implied, is intended to or shall confer on any person other than
the parties hereto, and their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities under or
by reason of this Agreement or the Related Agreements.
	 
	23.19	 	Merck/Baxter Agreement. Guilford (but only as to (ii)
and (iii)) and Baxter (but only as to (i)A and (i)B and (iv)) hereby
acknowledge and agree (and represent, warrant and covenant to Merck
and to each other) that effective as of the Effective Date of this
Agreement (i) (A) Merck and its Affiliates shall be relieved and
released from its obligation to purchase from Baxter, and Baxter
shall be relieved and released from its obligation to manufacture
and supply to Merck and its Affiliates, Product for sale in the
Territory, and (B) with respect to the Territory, both Merck and
Baxter have waived any provisions of exclusivity, noncompetition or
the like in the Merck/Baxter Agreement that would limit Guilford’s
ability to directly contract with Baxter to purchase Product for
sale in the Territory, (ii) pursuant to the letter agreement (the
“Letter Agreement”) dated as of the Effective Date of this
Agreement between Guilford, Merck and Merck, Sharp & Dohme (Ireland)
Limited, an Affiliate of Merck (“MSD Ireland”), Merck and its
Affiliates have been relieved and released from the obligation to
supply to Guilford, and Guilford and its Affiliates have been
relieved and released from the obligation to purchase from Merck,
Product for sale in the Territory (except for the sale and purchase
of certain inventory pursuant to the Letter Agreement), (iii) from
and after the Effective Date, all Product manufactured and supplied
by Baxter to Guilford shall not be labeled using the name “Merck” or
any trademark, trade name or other designation of Merck or its
Affiliates, unless otherwise permitted under the Supply Agreement
dated as of October 28, 2003 by and between Guilford and MSD Ireland
or a certain Transition Services Agreement between Guilford and
Merck, and (iv) this Agreement does not materially adversely affect
Merck or its Affiliates or its or their business or interest with
respect to Baxter and Baxter’s ability to make the Product for Merck
outside the United States in the Territory as set forth in the
Manufacturing and Supply Agreement and the related agreements, as
amended, between Merck and Baxter. Merck and its Affiliates shall
be
deemed a third party beneficiary to the provisions contained in
this Section 23.19.





36









 




The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.



1IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the date first set forth above.




	 	 	 
	Guilford Pharmaceuticals Inc.

	 	Baxter Healthcare Corporation
	 
	 	 
	By: /s/ John P. Brennen

	 	By:/s/ David F. Drohan
	 
	 	 
	Name: John P. Brennen

	 	Name:David F. Drohan
	 
	 	 
	Title: Senior Vice President,

	 	Title: Senior Vice President,
	          Technical Operations

	 	        Medication Delivery
	 
	 	 
	Date: July 1, 2004

	 	Date: July 1, 2004







37









 




The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.




SCHEDULE A

SPECIFICATIONS FOR PRODUCT and BULK ACTIVE




[***]




 









 







The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.




SCHEDULE B

APPROVED VENDORS FOR EXCIPIENTS




[***]




 









 







The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.




SCHEDULE C

MANUFACTURING FEES




250 mL Product Packaging Configuration




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Fee per Unit 1
	 	 	 	 	Minimum	 	Fee per Unit	 	Unit per Box 8
	 	 	Order Quantity	 	Codes per	 	18 Units per	 	Boxes per
	Tier
	 	per Code (units)
	 	Order
	 	Shipper
	 	Shipper

	

	 	 	 	[***]	 	 	 	 







100 mL Product Packaging
Configuration




	 	 	 	 	 
	 	 	 	 	Fee per Unit 1
	 	 	 	 	Unit per Box
	 	 	Order Quantity	 	24 Boxes per
	Tier
	 	per Code (units)
	 	Shipper

	

	 	[***]	 	 







 









 





The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.




SCHEDULE D

PRODUCT DEFINITIONS




100mL Single Port / U.S.




	 	 	 
	Quantity
	 	Description

	24

	 	Filled/printed PL2408 single port IV containers each within a printed foil overpouch
	 
	 	 
	24

	 	Intermediate single unit white paperboard shipping cartons with applied
labels (each containing one foil overpouched container).
	 
	 	 
	1

	 	Labeled Master Shipper carton (each containing 24 intermediate single

unit shipping cartons
	 
	 	 
	35

	 	Master Shippers (840 units) / pallet







250mL Single Port / U.S.




	 	 	 
	Quantity
	 	Description

	8

	 	Filled/printed PL2408 single port IV container each within a sealed
printed foil overpouch.
	 
	 	 
	8

	 	Intermediate Single unit brown shipping cartons (corrugated) with applied
labels (each containing one foil overpouched container).
	 
	 	 
	1

	 	Labeled Master Shipper carton each containing 8 intermediate single unit

preprinted (brown corrugated) shipping cartons
	 
	 	 
	45

	 	Master Shippers (360 units) / pallet







 









 





The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.




SCHEDULE E

BULK ACTIVE LOSSES





	A.	 	General






	1.	 	The term “Bulk Active Loss” shall mean the destruction of
Bulk Active during the process of Manufacture such that the Bulk
Active cannot be used to Manufacture usable Product and must be
discarded.
	 
	2.	 	The term “Unit Yield per Gram” means the number of units of
finished Product yielded from each gram of Bulk Active used in the
Manufacture of such Product.
	 
	3.	 	Bulk Active Losses are an expected outcome of Manufacturing.
Baxter shall use reasonable efforts, at its own cost, to minimize
Bulk Active Losses, and in any event shall at all times Deliver to
Guilford the Minimum Allowable Unit Yield per Gram of Bulk Active
(the “Minimum”), which Minimum shall be determined [***]. Baxter
and Guilford shall collaborate to identify opportunities for
minimizing Bulk Active Losses in the Manufacture of Product.
Guilford may inspect Baxter’s records relating to the calculations
referred to in this Schedule E in accordance with the provisions
specified in the Quality Agreement.






	B.	 	Compensation for Bulk Active Losses. Baxter shall pay Guilford at
the rate $[***] per kilo of Bulk Active consumed in any Manufacture of
Product rendering a Bulk Active Loss (which price shall be subject to
adjustment as set forth in Section 8.2(ii) of this Agreement), for the
amount of Bulk Active utilized which does not meet the Minimum as
established in Section A(3) above and updated annually. 
	 
	C.	 	Reporting. The Unit Yield per Gram will be calculated by Baxter
for each Bulk Production Lot. 
	 
	D.	 	Invoicing. Guilford shall invoice Baxter for the Bulk Active Loss
for each Bulk Production Lot not meeting the Minimum that has been
established in accordance with Section A(3) above.
	 
	E.	 	Payment. Payment of the invoice issued pursuant to Section D
shall be made by Baxter within thirty (30) calendar days after delivery of
the invoice by Guilford.
	 
	F.	 	Other Bulk Active Losses. If the reconciliation of physical
inventory counts to Baxter’s books and perpetual records made pursuant to
Section 6.3 of this Agreement indicates a loss of Bulk Active in addition
to that which is accounted for pursuant to this Schedule E, then Baxter
shall pay Guilford at the rate per kilo set forth in Section 8.2(ii) for
the amount of such lost Bulk Active exceeding [***].




 









 







The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.




BULK ACTIVE LOSS FORM




Lot Number:                    

Code Number:                    

Manufacture Date:                    



	 	 	 	 	 	 	 	 	 
	 	 	 	 	ACCOUNTABILITY:
	 	Actual
	 	 
	A

	 	 	 	Total Bulk Active used in Bulk Production Lot
	 	 	 	Grams
	 
	 	 	 	 	 	 	 	 
	B

	 	 	 	Total volume in Bulk Production Lot
	 	 	 	Liters
	 
	 	 	 	 	 	 	 	 
	 	 	Unit Count Reconciliation:	 	 	 	 
	

	 	 	 	Released Product units
	 	 	 	# of units
	+

	 	 	 	Units required for quality control release testing
	 	 	 	# of units
	+

	 	 	 	Units requested by Guilford
	 	 	 	# of units
	+

	 	 	 	First of Code Batch testing units
	 	 	 	# of units
	+

	 	 	 	Units used in ongoing [***] testing
	 	 	 	# of units
	 
	 	 	 	 	 	 	 	 
	C	 	Total number of units accounted for	 	 	 	# of units
	 
	 	 	 	 	 	 	 	 
	 	 	UNIT YIELD per
GRAM of Bulk Active:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	D	 	Unit Yield per Gram = C/A	 	 	 	Units/Gram
	 
	 	 	 	 	 	 	 	 
	 	 	MINIMUM UNIT YIELD per GRAM of ACTIVE:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Minimum Allowed 250 mL Unit Yield per Gram of Active	 	[***]	 	Units/Gram
	 	 	Minimum Allowed 100 mL Unit Yield per Gram of Active	 	[***]	 	Units/Gram
	 
	 	 	 	 	 	 	 	 
	 	 	Units Short per Gram	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	E	 	Minimum Unit Yield – Actual Unit Yield (D)	 	 	 	Units/Gram
	 
	 	 	 	 	 	 	 	 
	 	 	Units Short	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	F	 	Total Bulk Active used (A) x Units Short per Gram (D)	 	 	 	Units
	 
	 	 	 	 	 	 	 	 
	 	 	Grams of Active Lost	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	G	 	Units Short (F) x grams of Active per bag	 	 	 	Grams
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	Grams of Active per 250 mL Unit
	 	[***]
	 	Grams/Bag
	

	 	 	 	Grams of Active per 100 mL Unit
	 	[***]
	 	Grams/Bag







 









 





The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.




SCHEDULE F

INVOICING REQUIREMENTS




Invoices must contain the following information




	 	 	 
	

	 	Quantity of units shipped
	

	 	Rx Number
	

	 	Bulk Production Lot Number
	

	 	Filling Production Lot Number
	

	 	Date of Manufacture
	

	 	Guilford’s Purchase Order Number
	

	 	Ship to Address
	

	 	Date of Shipment







Invoices are to be sent to:




	 	 	 
	

	 	Guilford Pharmaceuticals Inc
	

	 	Accounts Payable
	

	 	6611 Tributary Street
	

	 	Baltimore, MD 21224







 









 





The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.




SCHEDULE G

INITIAL FIRM ORDER AND FORECAST




Forecast of Product Requirements




	 	 	 	 	 
	 	 	AGGRASTAT 250mL Bag
	 	AGGRASTAT 100mL Bag

	MONTH
	 	 	 	 
	

	 	[***]	 	 







Firm Orders




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Delivery	 	Price per	 	Total	 	 
	Product Name
	 	UOM
	 	Qty
	 	Date
	 	Unit
	 	Amount
	 	PO No

	

	 	 	 	 	 	[***]	 	 	 	 	 	 







 









 





The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.




SCHEDULE H

FORM OF PURCHASE ORDER




[***]




 









 







The symbol “[***]” denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.




SCHEDULE I

FINANCING ARRANGEMENTS




     In order to finance its acquisition of the rights to the Product in the
Territory from Merck, Guilford entered into a revenue interest financing
arrangement with Paul Royalty Fund, L.P. and Paul Royalty Fund II, L.P.
(collectively, “PRF”) pursuant to a revenue interest assignment agreement.
Under Guilford’s arrangement with PRF, and subject to the terms and conditions
thereof, PRF is entitled to receive a certain percentage of Guilford’s annual
net sales of the Product. In order to secure its obligations to PRF, Guilford
granted PRF a security interest in the assets related to the Product.