>

  
    THE
      CONFIDENTIAL PORTIONS OF THIS EXHIBIT, WHICH
      HAVE BEEN REMOVED AND REPLACED WITH AN
      ASTERISK, HAVE BEEN OMITTED AND FILED SEPARATELY
      WITH THE SECURITIES AND EXCHANGE COMMISSION
      PURSUANT TO A REQUEST FOR CONFIDENTIAL
      TREATMENT UNDER RULE 406 PROMULGATED
      UNDER THE SECURITIES ACT OF 1933 AND RULE
      24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934.

     

    

     

    EXCLUSIVE
      MANUFACTURING AND DISTRIBUTION AGREEMENT

     

    This
      Exclusive Distribution Agreement (the "Agreement"), effective June 9, 2004
      (the
      "Effective Date"), is between MINRAD, INC., a Delaware corporation with offices
      at 847 Main Street, Buffalo, New York 14203, USA ("Manufacturer") and RxElite
      Holdings Inc., a Delaware corporation with offices at 1404 N. Main, Suite 200,
      Meridian, Idaho 83642 ("Distributor"). 

     

    Manufacturer
      and Distributor agree as follows: 

     

    1.
      Definitions
      

     

    "Affiliate"
      of a
      party hereto shall mean any person, corporation or other entity, which controls,
      is controlling or is under common control with such party. 

     

    "ANDA"
      shall
      mean abbreviated new drug application. 

     

    "Hospital
      Market"
      shall
      mean those accounts that purchase anesthetic agents for human use. 

     

    "Manufacturer's
      Representative"
      shall
      mean MINRAD Inc., which is a manufacturer's representative of Manufacturer
      with
      respect to the Products. 

     

    "NDC"
      means
      national drug code number. 

     

    "Products"
      shall
      mean the MlNRAD branded products set forth on Attachment
      A
      hereto.


     

    "Purchase
      Commitments"
      shall
      mean those outlined in Attachment
      A-1
      hereto.


     

    "Territory"
      shall
      mean the geographical area set forth in Attachment
      A-2
      hereto.


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.
      Grant
      Exclusive Distributorship 

     

    2.1
      Appointment.
      Subject
      to Distributor's compliance with Section 2.2 hereof, Manufacturer hereby grants
      to Distributor for the Term the exclusive right to purchase the Products from
      Manufacturer for the sole purpose of selling the Products to end-use customers
      in the human market in the Territory, and Distributor accepts such grant,
      subject to the limitations, terms and conditions stated in this Agreement.
      Subject to any increases permitted hereunder, the initial prices for the
      Products shall be as set forth on Attachment
      A-1
      hereto.
      Distributor shall not itself manufacture or have manufactured for it or directly
      or indirectly sell, any products from third parties that are similar to the
      Products. Notwithstanding anything herein to the contrary, Manufacturer and
      Distributor acknowledge Manufacturer's right to sell, from time to time,
      Enflurane to Baxter, who bottles and markets the Products under its own name
      for
      the purpose of selling the Products to end-use customers in the human market
      in
      the Territory (the "Private Label Distributor"). 

     

    2.2
      Initial
      Order.
      Distributor agrees to place an initial non-cancelable stocking order for
      Products as set forth on Attachment
      A-1
      hereto
      at the time of signing (the "Initial Order"). The Sevoflurane component of
      the
      Initial Order is subject to and will be shipped after FDA approval has been
      received and any existing exclusivity granted by the FDA has expired.


     

    2.3
      Purchase
      Commitment.
      Distributor agrees to purchase Products from Manufacturer as set forth in
Attachment
      A-1
      hereto
      during the Term. The purchase commitment for Sevoflurane will commence when
      FDA
      approval to sell Sevoflurane in the Market has been received and any existing
      exclusivity granted by the FDA has expired. The Initial Order will be shipped
      by
      Manufacturer no later than October 2004 and will be considered as part of the
      Distributor's annual commitment for 2005. The terms of this Initial Order only
      will be net *. All subsequent orders will have terms as set forth in section
      4(b) of this Agreement. 

     

    2.4
      Pricing.
      Distributor will have sole control over market pricing and strategy relating
      to
      Products purchased by Distributor. Distributor market and pricing decisions
      with
      respect to sales by Distributor will be independent of the price of each Product
      as listed in Attachment
      A-1
      which
      Product prices are subject to change as set forth in Section 5.2. 

     

    2.5
      Other
      Accounts.
      Manufacturer has established various accounts for the Products in the Territory
      prior to the implementation of this agreement. Upon signature of this agreement,
      Manufacturer will effectively assign over to the Distributor all accounts and
      any purchases of product in the Territory from the signature date forward at
      the
      terms stipulated in this agreement and will decrement the annual purchase
      commitments outlined in Attachment
      A-1
      regardless if the product is Manufacturer labeled or co-labeled and regardless
      of the NDC number on the product. Effective assignment shall mean any means
      necessary for the contract to be fulfilled by Distributor through whatever
      means
      necessary to maintain a legal contract with customer. 

     

    3.
      Term
      and Renewal 

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    3.1
      Term.
      This
      Agreement shall remain in effect for an initial term beginning on the Effective
      Date and ending on December 31, 2007 (the "Initial Term"). After the Initial
      Order, Distributor must purchase a minimum of * of the annual commitment during
      the first month of each calendar quarter beginning January 1, 2005 as specified
      in Attachment
      A-1.
      At the
      end of each calendar year during the Initial Term, Distributor must order
      Product to fulfill each year's annual commitment. Manufacturer will have 60
      days
      to deliver this order. This Agreement is subject to renewal for additional
      periods as set forth in Section 3.2 hereof (each a "Renewal Term" and together
      with the Initial Term, the "Term"). 

     

    3.2
      Renewal.
      After
      the expiration of the Initial Term and each Renewal Term, if any, this Agreement
      may be extended or renewed for successive one (1) year extension periods for
      so
      long as, and provided that, Distributor issues to Manufacturer a non-cancelable
      purchase order for an amount equal to the (highest annual commitment) of the
      Products as set forth on Attachment
      A-1
      hereto.


     

    Manufacturer
      must receive such purchase order from Distributor at least 60 days prior to
      the
      end of the previous term. Other than the initial order, the renewal terms will
      be consistent with section 3.1 and the other parts of this agreement.


     

    3.3
      New
      Products.
      During
      the Term and as long as the Distributor is not in breach of any part of this
      Agreement, Manufacturer will offer Distributor the right of first refusal to
      become its exclusive distributor in the Territory of any human generic
      pharmaceutical products (Manufacturer ANDA) that is a new Product and that
      the
      Manufacturer can legally offer. The offer will be on similar or better terms
      than ones the Manufacturer will offer or is willing to offer to any other third
      party in the human market. Distributor will have 30 days from the date
      Manufacturer provides written notice to exercise such right on the terms and
      conditions set forth in such notice. For the purpose of clarity, and not by
      way
      of limitation, Manufacturer's conscious sedation product is acknowledged by
      the
      parties to be a proprietary product and is specifically excluded from this
      Agreement. 

     

    4.
      Distributor's
      Duties 

     

    Distributor
      shall: 

     

    (a)
      submit its non-cancelable orders for the Products by written purchase order,
      it
      being agreed that the terms and conditions of Distributor's standard purchase
      order form shall not apply to transactions pursuant to this Agreement;


     

    (b)
      pay
      for such orders * net * from date of invoice (excluding only the Initial Order)
      in U.S. dollars and payment shall be made by wire transfer, check or letter
      of
      credit approved by Manufacturer; all prices are quoted FOB Bethlehem,
      Pennsylvania, USA. Past due amounts incur interest at the rate of * of the
      invoice amount per month or the highest rate allowable by law, whichever is
      less; 

     

    (c)
      provide to its customers instructions in the use of the Products and field
      service for such products in accordance with product information provided by
      Manufacturer; 

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    (d)
      purchase the minimum commitment as per Attachment
      A-1.
      and use
      its best efforts to exceed these minimum commitments; 

     

    (e)
      refrain, outside the Territory and in relation to the Products, from seeking
      customers, from establishing any branch and from maintaining any distribution
      depot;

     

    (g)
      not
      give any warranties, above and beyond those in Article 9 hereto, to any end-use
      customers; 

     

    (h)
      provide instruction and assistance on compliance with any regulatory and
      labeling requirements of the Territory; However, Manufacturer remains solely
      responsible for compliance with all regulatory and labeling requirements of
      the
      Territory - in its role as holder of the ANDA. 

     

    (i)
      cooperate to a reasonable degree with Manufacturer to obtain any regulatory
      approval of the Products as required by the Territory; 

     

    (j)
      not
      use sub-distributors or any other agent, other than itself, without the prior
      written consent of the Manufacturer; 

     

    (k)
      have
      a Dedicated Head of Sales for the Hospital Market in place upon signing this
      Agreement; 

     

    (l)
      have
      a minimum of five (5) Hospital Market Field Sales Representatives in place
      within 3 months of signing this Agreement (one in each of the Manufacturer
      defined US Regions). A reasonable number will be added upon the launch of
      Sevoflurane as per mutual agreement between Manufacturer and Distributor;


     

    (m)
      provide monthly unit sales broken down by product, size and by hospital specific
      DEA code to Manufacturer within thirty (30) days of the end of the preceding
      month; 

     

    (n)
      register all products with correct NDC's and provide this information to the
      Manufacturer. 

     

    5.
      Manufacturer's
      Duties 

     

    5.1
      Manufacturer shall: 

     

    (a)
      ship
      promptly Distributor's orders for Products, FOB Bethlehem, Pennsylvania, USA,
      at
      the prices set forth on Attachment
      A-1
      hereto,
      subject to Section 5.2 hereof; 

     

    (b)
      adequately package and label the Products to conform with any regulatory and
      labeling requirements of the Territory. Product will be co-labeled with
      Manufacturer and Distributor information under Distributor's NDC's;


     

    (c)
      have
      5 US regional sales managers in place upon signing this Agreement; 

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    
       

    

    (d)
      have
      a minimum of five (5) Hospital Market Field Sales Representatives in place
      within 3 months of signing this Agreement (one in each of the MINRAD defined
      US
      Regions); 

     

    (e)
      add
      three (3) additional professional people to help expand the product line within
      six (6) months of signing this Agreement. 

     

    5.2
      Manufacturer has the right to change the prices for the Products at any time
      during the Term only to the extent of demonstrated increases in its direct
      costs
      of manufacturing the Products; provided, however, that no such price change
      shall be effective without at least sixty (60) days prior notice by Manufacturer
      to Distributor. The price that Distributor pays Manufacturer for the Products
      shall be its lowest price in the Territory for the Human Market with the
      exclusion of those existing accounts referenced in Section 2.5. 

     

    6.
      Trademarks
      and Trade Names 

     

    6.1
      Trademarks and trade names used by Manufacturer and Manufacturer's
      Representative in connection with the Products shall be used by Distributor
      only
      with reference to such Products and only in the manner approved by Manufacturer.
      Distributor acknowledges that it has and will obtain no proprietary interest
      in
      such trademarks and trade names and agrees not to use the same as part of its
      corporate or business name and to discontinue all use thereof immediately upon
      termination of this Agreement. 

     

    6.2
      All
      and any goodwill associated with the trademarks and trade names used by
      Manufacturer and Manufacturer's Representative in connection with the Products
      shall belong to Manufacturer. Distributor shall not do or omit to do any act
      or
      thing likely to affect adversely the goodwill and reputation associated with
      the
      Products and the said trademarks and trade names. 

     

    7.
      Industrial
      Property Rights; Confidentiality

     

    7.1
      All
      technical and commercial information, data regarding processes and know-how
      furnished by Manufacturer and/or Manufacturer's Representative to Distributor
      shall remain the property of Manufacturer and/or Manufacturer's Representative,
      and Distributor shall not acquire any proprietary rights or other interests
      therein. Subject to the limitations listed below, all such information which
      is
      written or is in machine readable (computer) form and which is marked
      "Confidential" or "Proprietary" shall be regarded as confidential information
      of
      Manufacturer and/or Manufacturer's Representative; and any such information
      disclosed orally and as to which Manufacturer and/or Manufacturer's
      Representative shall notify Distributor in writing that it is confidential
      within thirty (30) days after disclosure to Distributor, shall also be
      considered confidential; and in each case, Distributor shall not disclose such
      information to any third party except to the extent such information


     

    (a)
      is
      freely available to the public at the time it is disclosed or made available
      by
      Manufacturer and/or Manufacturer's Representative or subsequently becomes freely
      available to the public otherwise than by default of Distributor or any third
      party who owes an obligation of confidence to Manufacturer and/or Manufacturer's
      Representative or any company within Manufacturer's and/or Manufacturer's
      Representative's group; or 

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    
       

    

    (b)
      was
      known to Distributor prior to it being disclosed or made available by
      Manufacturer and/or Manufacturer's Representative. 

     

    (c)
      Both
      parties will be bound by the terms of the separate mutually confidential
      agreement signed on May 19, 2004. 

     

    7.2
      If
      during the term of this Agreement, Distributor supplies to Manufacturer and/or
      Manufacturer's Representative any confidential information relating to
      Distributor's business activities, Manufacturer and/or Manufacturer's
      Representative shall be bound by like obligations of confidence to those set
      out
      above in relation to that confidential information. 

     

    8.
      Infringement
      Claims 

     

    Manufacturer
      shall defend at its own expense, any claim by way of suit or proceeding against
      Distributor for the infringement of third party patents or trademarks in respect
      of Products purchased from Manufacturer hereunder, and shall fully indemnify
      Distributor for any direct damages, costs or expenses incurred by Distributor
      in
      respect of any such claim provided that Distributor shall have given
      Manufacturer prompt written notice of any such claim and furnished Manufacturer
      with a copy of each communication relating thereto and give Manufacturer the
      requisite authority to defend or settle such claim. 

     

    9.
      Product
      Warranties 

     

    MANUFACTURER
      WARRANTS THAT THE PRODUCTS WILL CONFORM TO THE MANUFACTURER'S STANDARD WARRANTY,
      IN THE FORM ANNEXED HERETO AS ATTACHMENT B ("WARRANTY"). 

     

    EXCEPT
      FOR THE MANUFACTURER'S WARRANTY, MANUFACTURER MAKES NO REPRESENTATIONS OR
      WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT OR ANY PRODUCTS, INCLUDING, WITHOUT
      LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
      PURPOSE, AND MANUFACTURER WILL NOT BE HELD TO ANY LIABILITY WITH RESPECT TO
      ANY
      CLAIM BY DISTRIBUTOR, ITS AFFILIATES, EMPLOYEES OR AGENTS OR ANY THIRD PARTY
      ON
      ACCOUNT OF OR ARISING FROM ANY OF THE PRODUCTS SOLD HEREUNDER OR THEIR USE,
      INCLUDING, BUT NOT LIMITED TO, ANY LIABILITY FOR ANY INCIDENTAL OR CONSEQUENTIAL
      DAMAGES, LOSS OF PROFITS OR GOODWILL. DISTRIBUTOR HEREBY ACKNOWLEDGES THAT
      THE
      ONLY WARRANTY APPLICABLE TO THE PRODUCTS SHALL BE THE MANUFACTURER'S WARRANTY.
      MANUFACTURER SHALL AT ITS SOLE OPTION, ISSUE A CREDIT FOR OR REPLACE, AT NO
      CHARGE TO DISTRIBUTOR, ALL PRODUCTS RETURNED BY DISTRIBUTOR OR RETURNED BY
      CUSTOMERS TO DISTRIBUTOR WHICH DO NOT CONFORM TO THE MANUFACTURER'S WARRANTY.
      

     

    10.
      Insurance
      

     

    Manufacturer
      warrants the product liability insurance for the Products being sold under
      this
      Agreement. 

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

     

    11.
      Limitation
      of Liability 

     

    In
      no
      event, except as set forth below, shall Manufacturer be liable to Distributor
      or
      any other entity for any special, consequential, incidental, or indirect damages
      relating to or resulting from manufacturer's failure to perform its obligations
      under this Agreement, however caused, on any theory of liability, and
      notwithstanding any failure of essential purpose of any limited remedy.
      Notwithstanding the limitation of liability set forth above, the Distributor
      will not be liable for any fines incurred solely as a result of Manufacturer's
      failure to promptly ship Distributor's orders for Products pursuant to Section
      5.1(a) to this Agreement. 

     

    12.
      Regulatory
      Matters 

     

    12.1
      Product
      Recall.
      In the
      event Distributor or Manufacturer recalls any of the Products rented or
      distributed by Distributor because such Products are believed to violate any
      provision of applicable law, Manufacturer shall bear all reasonable costs and
      expenses of such recall, including, without limitation, expenses or obligations
      to third parties, the cost of notifying customers and cost associated with
      the
      shipment of recalled Product from customers to Distributor to Manufacturer;
      provided, however, that Distributor shall not unilaterally recall any Product
      supplied by Manufacturer without first obtaining the consent of the
      Manufacturer, which shall not be unreasonably withheld. Distributor shall
      maintain complete and accurate records, for such period as may be required
      by
      applicable law, of all the Products sold, or otherwise distributed, by it.
      The
      parties will cooperate fully with each other in effecting any recall of the
      Products, including communications with any purchasers or users. 

     

    12.2
      Customer
      Complaint Reporting.
      Manufacturer shall be responsible for notifying the appropriate federal, state,
      and local governmental authorities (United States or any country in the
      Territory, as the case may be) of any customer complaints or other occurrences
      regarding the Products which are required to be so reported. Distributor shall
      provide Manufacturer promptly with any information it receives regarding such
      occurrences. 

     

    13.
      Termination

     

    13.1
      Either party shall have the right to terminate this Agreement on written notice
      if the other (i) commits or suffers any act of bankruptcy or insolvency or
      (ii)
      within ninety (90) days after written notice of a material breach of this
      Agreement has been given, either fails to cure any such material breach which
      is
      capable of cure within thirty (30) days or has failed to commence a cure of
      any
      such material breach which is not capable of cure within thirty (30) days.
      

     

    13.2
      Manufacturer shall have the right to terminate this Agreement immediately if
      Distributor shall fail to pay any amount owed by Distributor to Manufacturer
      within ten (10) days after receipt of the notice of non-payment from
      Manufacturer. 

     

    13.3
      This
      Agreement will survive a change in control of either party during the Term.
      

     

    14.
      Effects
      of Termination 

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

     

    14.1
      Procedures.
      On the
      termination of this Agreement, for whatever reason, (i) Manufacturer shall
      continue to honor Distributor's orders for Products up to the effective date
      of
      termination, (ii) Distributor shall pay all past due invoices and shall pay
      for
      all undamaged, delivered Products in accordance with the terms and conditions
      of
      this Agreement, (iii) Distributor shall return to Manufacturer all promotional
      and all confidential information or other documents relating to the Products
      and
      (iv) Distributor shall cease to use all trademarks and trade names used by
      Manufacturer and Manufacturer's Representative in connection with the Products.
      

     

    14.2
      No
      Compensation.
      Upon
      termination or expiration without renewal of this Agreement, except tender
      offer, Manufacturer shall not be obligated to pay to Distributor any
      compensation, damages or other amount on account thereof, and Distributor freely
      and fully waives any claim it may have to payment of any such amount whether
      under contract, statute or national policy, including Manufacturer's
      indemnification of Distributor. 

     

    15.
      Nature
      of Relationship

     

    Distributor
      is an independent party and shall in no respect be or be deemed to be an
      employee, partner or co-venturer of Manufacturer or an agent of or subject
      to
      the authority of Manufacturer. Except as specifically authorized in writing,
      Distributor shall not be in any way authorized or empowered to bind
      Manufacturer. 

     

    16.
      Severability
      

     

    If
      any
      provision of this Agreement shall be void or unenforceable by reason of any
      applicable law, it shall be deleted and the remaining provisions hereof shall
      continue in full force and effect and, if necessary, so amended as may be
      necessary to give effect to the spirit of this Agreement so far as possible.
      

     

    17.
      Force
      Majeure 

     

    The
      obligations of each party to perform under this Agreement shall be excused
      during each period of delay caused by matters such as strikes, shortages of
      raw
      material, government orders, acts of terror or acts of God, which are reasonably
      beyond the control of the party whose obligation to perform is effected by
      such
      matters and such excuse from performance shall be coextensive with the cause
      of
      such delay. 

     

    18.
      Miscellaneous
      

     

    18.1
      Notices.
      All notices required or permitted shall be in writing and shall be deemed given
      when received personally or by facsimile (when confirmation copy is sent by
      registered airmail, postage prepaid, or by such other method, including air
      courier) addressed as follows, or to such other person or address as may be
      designated by notice given in accordance with this Section to the other party:
      

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    
      
         

         

      

    

    
      	 	
              If
                to Distributor: 

               

              RxElite
                Holdings Inc. 

              1404
                N. Main, Suite 200 Meridian, Idaho 83642 

              Attn:
                Earl E. Sullivan 

              Fax
                No.: 208-887-1836 

               

              with
                a copy to:

               

              Oles,
                Morrison, Rinker & Baker LLP 

              701
                Pike St., Suite 1700 

              Seattle,
                Washington 98101-3930

               

              Attn:
                Douglas S. Oles

               

              Fax
                No.: 206-682-6234

            	 	
               

              If
                to Manufacturer: 

               

              Minrad
                Inc. 

              847
                Main Street 

              Buffalo,
                New York 14203 

              Attn:
                William H. Burns, Jr. 

              Fax
                No.: 716-855-1078 

               

              with
                a copy to: 

               

              Hodgson
                Russ LLP 

              One
                M&T Plaza, Suite 2000 

              Buffalo,
                New York 14203 

              Attention:
                Robert B. Fleming, Jr. 

              Fax
                No.: 716-849-0349 

               

            


    

     

    18.2
      Entire
      Agreement.
      This
      Agreement is the entire agreement between the parties hereto relating to this
      subject matter, there being no prior written or oral promises or representations
      not incorporated herein. 

     

    18.3
      Applicable
      Law.
      This
      Agreement shall be governed by and construed under the laws of the State of
      New
      York without regard to the principles of conflicts of law. Any claim by
      Distributor against Manufacturer shall be brought within one (1) year after
      Distributor first learns of such claim. Any controversy or claim arising in
      connection with this Agreement shall be finally settled in New York, New York
      under the Rules of the American Arbitration Association by one or more
      arbitrators appointed in accordance with the said Rules and judgment upon the
      award rendered by the arbitrators may be entered in any court having
      jurisdiction thereof. 

     

    18.4
      Amendments.
      No
      amendment or modification of the terms of this Agreement shall be binding on
      either party unless reduced to writing and signed by an authorized officer
      of
      the party to be bound. 

     

    18.5
      Existing
      Obligations.
      Each
      party represents and warrants to the other party that the terms of this
      Agreement do not violate any existing obligations or contracts of such party.
      Each party shall defend, indemnify and hold harmless the other party from and
      against any and all claims, demands, actions or causes of action, which allege
      any such violation. 

     

    18.6
      Assignment.
      This Agreement shall be binding upon and inure to the benefit of the parties
      hereto and their respective successors and assigns, provided, however, that
      neither party shall transfer or assign its interests in this Agreement without
      the prior written consent of the other party. 

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

     

    18.7
      Counterparts.
      For convenience of the parties hereto, this Agreement may be executed in one
      or
      more counterparts, each of which shall be deemed an original for all purposes.
      

     

    18.8
      Board
      Approval-Manufacturer.
      As the
      undersigned President and CEO of Manufacturer requires both the approval and/or
      ratification of this Agreement and the authorization to execute and deliver
      this
      Agreement from Manufacturer's Board of Directors, this Agreement is contingent
      upon and subject to such approval and/or ratification by Manufacturer's Board
      of
      Directors, in its sole discretion, at its next meeting of the Board of
      Directors, which meeting is expected to occur on or about June 9, 2004 and
      which
      approval and/or ratification shall be deemed received unless Manufacturer
      notifies Distributor to the contrary no later than June 16, 2004. 

     

    18.9
      Board
      Approval-Distributor.
      As the
      undersigned President and CEO of Distributor requires both the approval and/or
      ratification of this Agreement and the authorization to execute and deliver
      this
      Agreement from Distributor's Board of Directors, this Agreement is contingent
      upon and subject to such approval and/or ratification by Distributor's Board
      of
      Directors, in its sole discretion, at its next meeting of the Board of Directors
      and which approval and/or ratification shall be deemed received unless
      Distributor notifies Manufacturer to the contrary no later than June 16, 2004.
      

     

    IN
      WITNESS WHEREOF,
      the parties hereto have caused this Agreement to be executed by their authorized
      representatives named below. 

     

    
      	
               

              MINRAD
                INC.

               

            	 	
               

              RXELITE
                HOLDINGS INC.

               

            
	 	 	 	 	 
	
               

              By:

            	
               

              /s/
                William H. Burns, Jr.

            	 	
               

              By:

            	
               

              /s/
                Daniel Chen

            
	 	
              Name:
                William H. Burns, Jr.

            	 	
            	
              Name:
                Daniel Chen

            
	 	
              Title:
                President & CEO

            	 	 	
              Title:
                CEO

            


    

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

     

    ATTACHMENT
      A

     

     

    PRODUCTS

     

    
      	
               

              1.
                

               

            	
               

              Human
                Inhalation Anesthetic agents Terrell Isoflurane USP, Compound 347
                Enflurane USP (Non-Private Label Distributor) and Sevoflurane (when
                and if
                available) 

               

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ATTACHMENT
      A-1

     

    Annual
      Purchase Commitments 

     

    Territory:
      United States Human Market


    
      

        
          	
                   

                	 	
                   

                	 	
                   Initial 

                	
                   

                	
                  Annual
                    

                	
                   

                
	
                   Product 

                	
                   

                	
                   Price
                    Per Bottle 

                	
                   

                	
                   Stocking
                    Order 

                	
                   

                	
                   Commitment* 

                	 
	
                   

                	 	
                   

                	 	
                   

                	 	
                   

                	 
	
                   Compound
                    347TM Enflurane USP  250
                    ml bottle 

                	 	
                  $

                	
                  *

                	 	 	
                  *

                	 	 	
                  *

                	 
	
                   TerrellTM
                    lsoflurane USP  100
                    ml bottle 

                	 	
                  $

                	
                  *

                	 	 	
                  *

                	 	 	
                  [Initial
                    Stock Order Only

                	
                  ]

                
	
                   TerrellTM
                    Isoflurane USP  250
                    ml bottle 

                	 	
                  $

                	
                  *

                	 	 	
                  *

                	 	 	
                  *

                	 
	
                   Sevoflurane
                    250 ml bottle 

                	 	
                  $

                	
                  *

                	 	 	
                  *

                	 	 	
                  *
                    **

                	 


        

      

    

     

    Prices
      are FOB Bethlehem, Pennsylvania, USA. 

     

    Terms:
      *
      net * 

     

    *
      Shipments will be made monthly in lot-size multiples. Purchases will be measured
      in 250ml equivalents but will not be limited to the percentage allocations
      listed above. For example: Distributor purchases 5 -100mL units will equal
      2 -
      250mL unit equivalents and decrement from the total commitment of ml to be
      purchased as outlined in Attachment A-1 

     

    **
      When
      and if available and increasing to * bottles and * bottles in the second and
      third years, respectively, during the Initial Term and * during each Renewal
      Term. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ATTACHMENT
      A-2

     

    TERRITORY:

     

    
      United
        States (being the contiguous 48 states, Alaska and Hawaii)

       

      Human
        Market

       

      (Non-OEM)

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ATTACHMENT
      B

     

    LIMITED
      WARRANTY AND LIMITATION OF LIABILITY

     

    WARRANTY

     

    Manufacturer
      warrants and guarantees that, when delivered to distributor FOB Bethlehem,
      Pennsylvania, the Product shall conform to the Registered Specifications, shall
      not be adulterated or misbranded within the meaning of the Act and shall conform
      to all applicable regulations of the FDA (The "Limited Warranty"). EXCEPT FOR
      THE LIMITED WARRANTY, MANUFACTURER MAKES NO REPRESENTATIONS OR WARRANTIES OF
      ANY
      KIND REGARDING THE PRODUCTS, EXPRESS, IMPLIED OR OTHERWISE, AND SPECIFICALLY
      DISCLAIMS: ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
      PURPOSE. 

     

    THIS
      WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES (EXCEPT OF TITLE), EXPRESSED,
      IMPLIED, OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS
      FOR A PARTICULAR PURPOSE. 

     

    THE
      REMEDIES OF THE USER IN THE WARRANTY SET FORTH ABOVE ARE EXCLUSIVE, AND THE
      TOTAL LIABILITY OF MINRAD AND/OR ANY MINRAD DISTRIBUTOR WITH RESPECT TO PRODUCT
      SOLD TO THE USER, IN CONNECTION WITH THE PERFORMANCE THEREOF, OR ARISING OUT
      OF
      THE SALE, DELIVERY, INSTALLATION OR REPAIR OF ANY MINRAD PRODUCT WHETHER BASED
      ON CONTRACT, WARRANTY, NEGLIGENCE, INDEMNITY, STRICT LIABILITY, OR OTHERWISE,
      SHALL NOT EXCEED THE PURCHASE PRICE OF THE DRTSÔ PLATFORM UPON WHICH SUCH
      LIABILITY IS PLACED. 

     

     

    MINRAD
      AND ITS DISTRIBUTORS SHALL IN NO EVENT BE LIABLE TO THE USER, OR TO ANY
      SUCCESSOR IN INTEREST OR ANY BENEFICIARY OR ASSIGNEE THEREOF, ON ACCOUNT OF
      ANY
      MINRAD PRODUCT FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL OR PUNITIVE
      DAMAGES ARISING OUT OF THE SALE, DELIVERY, INSTALLATION OR REPAIR OF SUCH
      PRODUCT, OR ANY DEFECTS IN, OR FAILURE OF, OR MALFUNCTION OF THE PRODUCT
      INCLUDING, BUT NOT LIMITED TO, DAMAGES BASED UPON LOSS OF USE, LOST PROFITS
      OR
      REVENUE, INTEREST, LOST GOODWILL, INCREASED EXPENSES AND/OR CLAIMS OF CUSTOMERS
      OF THE USER, WHETHER OR NOT SUCH LOSS OR DAMAGE IS BASED ON CONTRACT, WARRANTY,
      NEGLIGENCE, INDEMNITY, STRICT LIABILITY OR OTHERWISE. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ADDENDUM
      TO DISTRIBUTION AGREEMENT

     

    THIS
      ADDENDUM TO DISTRIBUTION AGREEMENT (this "Addendum") is made as of March 28,2005
      (the "Addendum Effective Date"), by and between MINRAD INC., with offices at
      847
      Main Street, Buffalo, New York 14203 ("Manufacturer") and RxElite
      Holdings Inc.,
      a
      Delaware corporation with offices at 1404 N. Main, Suite 200, Meridian, Idaho
      83642 ("Distributor"). 

     

    WHEREAS,
      Manufacturer and Distributor entered into a Distribution Agreement, effective
      June 9, 2004 (the "Agreement"), regarding the distribution by Distributor of
      certain of Manufacturer's products and related accessories; and 

     

    WHEREAS,
      Manufacturer and Distributor desire to amend the Agreement to include certain
      other products and related accessories in addition to those originally covered
      within the scope of the Agreement. 

     

    NOW,
      THEREFORE, Manufacturer and Distributor agree as follows: 

     

    1.
      Section 2.1 is amended by adding the follow sentence: 

     

    Notwithstanding
      anything herein to the contrary, Manufacturer and Distributor also acknowledge
      Manufacturer's right to sell, from time to time, Enflurane to Abbott, who
      bottles and markets the Products under its own name for the purpose of selling
      the Products to end-use customers in the human market in the Territory (the
      "Private Label Distributor"). 

     

    2.
      Section 5.1 (c) is replaced with: 

     

    (c)
      have
      5 US regional sales managers in place by June 30, 2005; 

     

    3.
      Section 5.1 (d) is replaced with: 

     

    (d)
      have
      a minimum of five (5) Hospital Market Field Sales Representatives in place
      by
      June 30, 2005 (one in each of the MINRAD defined US Regions); 

     

    4.
      Attachment A of the Agreement is amended by adding the following products and
      market: 

     

    a.
      Manufacturer hereby grants to Distributor for the Term the non-exclusive right
      to purchase MINRAD AttaneTM
      branded
      product from Manufacturer for the sole purpose of selling the Products to
      end-use customers in the veterinary market in the Territory, and Distributor
      accepts such grant, subject to the limitations, terms and conditions stated
      in
      this Agreement. The Distributor will not sell MINRAD Attane TM
      branded
      product to veterinary distributors. Manufacturer will turn over its existing
      end-user veterinary customers to the Distributor. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    b.
      Manufacturer hereby grants to Distributor for the Term the exclusive right
      to
      purchase Desflurane from Manufacturer for the sole purpose of selling the
      Products to end-use customers in the human market in the Territory, and
      Distributor accepts such grant, subject to the limitations, terms and conditions
      stated in this Agreement. 

     

    2.
      Attachment A-1 of the Agreement is amended by adding the following initial
      order, minimum order, pricing and annual order requirements: 

     

    a.
      Veterinary Products 

    

      
        	
                 Product 

              	 	
                 Price
                  per  bottle 

              	
                 

              	
                 Initial
                  Stocking Order 

              	
                 

              	
                 Minimum
                  Order 

              	 
	
                 AttaneTM
                  Isoflurane USP  100
                  ml bottle  

              	 	
                $

              	
                *

              	 	 	
                *

              	 	 	
                *

              	 
	
                 AttaneTM
                  Isoflurane USP  250
                  ml bottle 

              	 	
                $

              	
                *

              	 	 	
                *

              	 	 	
                *

              	 
	
                 SustaneTM
                  Sevoflurane 250 ml bottle 

              	 	
                $

              	
                *

              	 	 	
                *

              	 	 	
                *
                  *

              	 


      

    

     

    b.
      Desflurane (when available) 

    

      
        	
                 Product 

              	 	
                 Price
                  per  bottle 

              	
                 

              	
                 Initial
                  Stocking Order 

              	
                 

              	
                 Annual
                  Commitment 

              	 
	
                 Desflurane
                  USP 250 ml bottle 

              	 	
                $

              	
                *

              	 	 	
                *

              	 	 	
                *
                  *

              	 


      

    

     

    *
      When
      available - pricing and annual commitments to be re-evaluated when product
      is
      nearing availability. 

     

    4.
      Manufacturer will provide Distributor at no charge "Free Goods", *
      TerrellTM
      100 ml
      bottles and * Compound 347TM
      250 ml
      bottles for sale or distribution in the Territory. These Free Goods are to
      compensate Distributor for any pricing issues in the Territory through the
      life
      of the agreement. 

     

    5.
      Except
      as modified by this Addendum, the Agreement is hereby ratified and will remain
      in full force and effect in accordance with its terms. 

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties have executed this Addendum as of the date first
      above written. 

     

    
      	
              MINRAD
                INC.

            	 	
              RXELITE
                HOLDINGS INC.

            
	 	 	 	 	 
	
               

              By:

            	/s/
              William H. Burns, Jr. 	 	
               

              By:

            	/s/
              Daniel Chen 
	 	
              Name:
                William H. Burns, Jr.

            	 	 	
              Name:
                Daniel Chen

            
	 	
              Title:
                President & CEO

               

            	 	 	
              Title:
                CEO

               

            


    

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    THE
      CONFIDENTIAL PORTIONS OF THIS EXHIBIT, WHICH
      HAVE BEEN REMOVED AND REPLACED WITH AN
“XX”,
      HAVE BEEN OMITTED AND FILED SEPARATELY
      WITH THE SECURITIES AND EXCHANGE COMMISSION
      PURSUANT TO A REQUEST FOR CONFIDENTIAL
      TREATMENT UNDER RULE 406 PROMULGATED
      UNDER THE SECURITIES ACT OF 1933 AND RULE
      24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934.

     

    AMENDMENT
      NO. 2 TO 

     

    EXCLUSIVE
      MANUFACTURING AND DISTRIBUTION AGREEMENT 

     

    RxElite
      Holdings Inc.("Distributor")
      and MINRAD,
      INC.("Manufacturer")
      hereby agree as follows: 

     

    1.
      Reference is made to a certain Exclusive Manufacturing and Distribution
      Agreement, between Distributor and Manufacturer dated on or about June 9, 2004,
      as amended by an Addendum to Distribution Agreement dated on or about March
      28,
      2005 (as amended, the "Distribution
      Agreement").
      Any
      specially capitalized terms used in this Amendment No. 2 shall have the same
      defined meanings as provided for in the Distribution Agreement. 

     

    2.
      Reference is made to two purchase orders by Distributor to purchase Sevoflurane
      in bulk drums, the first of which shall be referred to herein as the
      "Initial
      Sevo Order",
      and
      the second of which as the "Second
      Sevo Order"
      (and
      collectively as the "Orders").
      The
      Orders shall be subject to the Distribution Agreement as hereby further amended.
      The Initial Sevo Order will be delivered in 2 (two) parts; the first part being
      delivered in June 2006 and consisting of the equivalent of XX250ml
      bottles of Sevoflurane and the second part being delivered in September 2006
      and
      consisting of the equivalent of XX250ml
      bottles of Sevoflurane. The Second Sevo Order will be delivered in
      November/December 2006 and will consist of the equivalent of XX
      250ml
      bottles of Sevoflurane. The bottles shall have an expiration dating of 2 (two)
      years when bottled. 

     

    3.
      The
      Distribution Agreement is hereby further amended as follows: 

     

    A.
      Section 2.3 and Section 4(b) of the Distribution Agreement are hereby amended
      to
      provide that (i) for the Initial Sevo Order, the terms of payment are
XX%
      XX
      days,
      net XX
      days;
      and (ii) for the Second Sevo Order and for all product orders under the
      Distribution Agreement after the date hereof, the terms of payment will be
      XX%
      XX
      days,
      net XX
      days.


     

    B.
      For
      clarification, in addition to the RxElite trademark, Distributor will use
      Manufacturer's MINRAD® and SojournTM trademarks in connection with the resale of
      Sevoflurane to the market. This shall be done in a similar manner to the
      Distributor's Isoflurane and Enflurane labels. 

     

    C.
      Section 3.1 of the Distribution Agreement is hereby amended to provide that
      the
      Distributor must purchase a minimum XX%
      of the
      annual minimum commitment.

     

    D.
      Section 4(1) of the Distribution Agreement is hereby amended to read in its
      entirety as follows: 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    "(l)
      Distributor shall have hired a minimum of four (4) Regional sales managers
      within thirty (30) days of signing this agreement. Distributor shall have hired
      a minimum of twenty-four (24) hospital market sales representatives within
      eighty (180) days after US FDA Sevoflurane approval and will use its reasonable
      commercial efforts to do so within 90 days after such approval;" 

     

    E.
      The
      price
      for Sevoflurane provided for in Attachment
      A-I to
      the
      Agreement is changed from $XX
      per
      bottle to $XX
      per
      bottle (the "Base Price") for all orders after and excluding the Initial Sevo
      Order (60,000 bottles), which Base Price shall remain in effect until June
      30,
      2007 (regardless of when the FDA approval for Sevoflurane is received by
      Manufacturer). 

     

    F.
      Section
      5.2 of the Distribution Agreement is amended to provide that for sales of
      Sevoflurane after June 30, 2007, the Base Price will be adjusted, up or down,
      on
      an annual basis (with the contract year, for this purpose running from July
      1 to
      June
      30) to reflect changes in Manufacturer's total costs of producing Sevoflurane
      (using May 31, 2006 as the baseline date for comparing Manufacturer's costs)
      including but not limited to (a) raw materials and other product components
      and
      (b) Manufacturer's standard production costs as already used internally by
      Minrad management; provided, however, that no reduction of the Base Price shall
      be effective until Manufacturer has received the economic benefit from cost
      reductions of $XX
      in total
      costs of producing Sevoflurane (to cover certain cost increases absorbed by
      Manufacturer for Sevoflurane). The Manufacturer shall provide Distributor with
      such information and documentation as it may reasonably request to evidence
      and
      support any changes to the Base Price provided for hereunder including sharing
      the Manufacturer's internal standard production costs used in calculating
      management compensation at the Manufacturer. The parties shall meet (in person
      or by conference call) prior to the beginning of each contract year (starting
      immediately prior to July 1, 2007) to review any changes in costs that may
      trigger a price change contemplated hereunder. 

     

    G.
      The
      parties agree that the Distributor's Annual Commitments to purchase Isoflurane
      and Enflurane for years 2006 and 2007 only that are set forth in Attachment
      A-I to
      the
      Distribution Agreement, are reduced to XX.
      

     

    H.
      Section
      18.6 of the Distribution Agreement is hereby amended to read in its entirety
      as
      follows: 

     

    "18.6
      Assignment;
      Change of Control.
      Neither
      this Agreement, nor any interest therein, nor any of the rights and obligations
      of either party hereunder, may be directly or indirectly assigned, sold,
      delegated, or otherwise disposed of by either party, in whole or in part,
      without the prior written consent of the other party, which will not be
      unreasonably withheld. For the purposes of this Section, in the ease of the
      Distributor, an
      "assignment" shall be deemed to have occurred upon (a) a change of control
      resulting from a single transaction or series of related transactions, or (b)
      a
      restructuring of the Distributor, or transfer or removal of a material amount
      of
      assets from the Distributor, or assumption of debt by the Distributor such
      that
      as a result of such restructuring, transfer, removal or assumption, the
      Distributor possesses a net worth materially less than that of the Distributor
      on the effective date of this Agreement. In addition, for clarification, (a)
      a
      "change of control" will occur if any person, company, or other entity acquire
      beneficial ownership of 80% or more of Distributor's capital stock or the
      executive management of Distributor is materially changed in connection with
      any
      ownership change affecting Distributor; and (b) if a change in control occurs
      in
      which a competitor of Manufacturer (wherever located) acquires an ownership
      or
      management position in Distribution, Manufacturer can withhold its consent
      and
      terminate the New Agreement." A competitor shall be defined as a manufacturer
      or
      distributor of anesthetic products or products that compete with other products
      produced by Manufacturer. 
       

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
    

     

    4.
      Except
      as
      provided for in this Amendment No. 2, the Distribution Agreement shall remain
      in
      full force and effect. 

     

    This
      Amendment No. 2 has been executed below by the duly authorized representatives
      of the Distributor and the Manufacturer. 

     

    
      	 	
              RxELITE
                HOLDINGS INC. 

               

               

            	 	 	MINRAD,
              INC.
	By:	/s/ Jonathan Houssian 	 	 	/s/
              William H.
              Burns, Jr., CEO 
	 	
              
Title:
              President	 	 	
              
William
              H. Burns, Jr., CEO
	 	Date: June
              14, 2006	 	 	Date: June
              14, 2006