Distribution Agreement



 






EXHIBIT 10.10.2




REDACTED COPY AS FILED AUGUST 4, 2005




DISTRIBUTION AGREEMENT




     DISTRIBUTION AGREEMENT, dated as of May 2, 2005, by and between Amphastar Pharmaceuticals,
Inc., a Delaware corporation (“Seller”) and Andrx Pharmaceuticals, Inc., a Florida corporation
(“Purchaser”).



     WHEREAS, Seller desires to appoint Purchaser as Seller’s exclusive distributor of the Product
to Purchaser Customers in the Territory and Purchaser desires to accept such appointment, all
pursuant to the terms of this Agreement.



     NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements hereinafter
set forth, the parties hereto agree as follows:



ARTICLE 1




DEFINITIONS




     As used throughout this Agreement and any exhibits, schedules and attachments hereto, each of
the following terms shall have the respective meaning set forth below:



     1.1 “Act” means the Federal Food, Drug, and Cosmetic Act, as amended.



     1.2 “Adverse Event” means any adverse event associated with the use of the Product in humans,
whether or not considered drug-related, including an adverse event occurring in the course of the
use of the Product in professional practice, in studies, in investigations or in tests or an
adverse event occurring from Product overdose (whether accidental or intentional), from Product
abuse, or from Product withdrawal, as well as any toxicity, sensitivity, failure of expected
pharmacological action, or laboratory abnormality that is, or is thought by the reporter thereof to
be, serious or associated with relevant clinical signs or symptoms.



     1.3 “Adverse Resolution” means any resolution of the Lawsuit, whether by settlement, summary
judgment or trial court decision in the U.S. District Court, or as a result of any appeal,
subsequent review or reconsideration of such summary judgment or trial court decision, that
prevents, enjoins, materially restricts or imposes royalties on sales of or otherwise makes
commercially unreasonable the manufacture, use, sale or offer to sell of the Product to Purchaser
Customers in the Territory.



     1.4 “Affiliate” of a party means any Person directly or indirectly controlled by, controlling
or under common control with such party. “Control” means the legal power to direct or cause the
direction of the general management or policies of a Person through more than fifty percent (50%)
of the ownership of voting securities, by contract or by other means.



     1.5 “ANDA” means an Abbreviated New Drug Application filed with the FDA and any amendments or
supplements thereto.



     1.6 “Anda” shall have the meaning given in Section 2.2.





 




		
	*  	filed under application for confidential treatment




 









 










REDACTED COPY AS FILED AUGUST 4, 2005




     1.7 “Applicable Laws” means all applicable laws, rules, and regulations that apply to the
development, manufacture, supply, marketing, sale or distribution of the Product in the Territory,
or the performance of either party’s obligations under this Agreement, including the Act, cGMP and
other current regulations promulgated by the FDA or any other governmental agency.



     1.8 “At-Risk Launch” shall have the meaning given in Section 2.3.



     1.9 “At-Risk Launch Notice” shall have the meaning given in Section 2.3.



     1.10 “Authorized Generic Product” means a therapeutically equivalent, bioequivalent and
legally substitutable generic version of the brand-name product Lovenox® (including the brand name
product sold as a generic) that is sold and distributed in the Territory by any one or more of
Aventis Pharma S.A., Aventis Pharmaceuticals, Inc., their respective Affiliates, successors or
assigns and/or licensees of any of the foregoing.



     1.11 “Bankruptcy Code” shall have the meaning given in Section 8.2.



     1.12 “cGMP” means the current Good Manufacturing Practices regulations of the FDA (as in
effect from time to time) in 21 C.F.R. pts. 210 and 211.



     1.13 “Commercially Reasonable Efforts” means, with respect to each party, efforts and
resources normally used by such party to, in the case of Seller, develop, manufacture, package and
supply or, in the case of Purchaser, market, sell and distribute, a generic pharmaceutical product
owned by it or to which it has rights, which is of similar overall market potential at a similar
stage in its product lifecycle, taking into account, inter alia, the competitiveness of the
marketplace, the proprietary position of the product, the profitability of the product and other
relevant factors. The parties acknowledge that the level of effort and resources may change at
different times during the product life cycle of the Product.



     1.14 “Compensatory Payments” shall have the meaning given in Section 2.3.



     1.15 “Competitive Product” means, other than the Product or an Authorized Generic Product, a
therapeutically equivalent, bioequivalent and legally substitutable generic version of the
brand-name product Lovenox®, which generic version is in the same dosage and delivery form, has the
same active ingredient and the same strength and is for the same indication as the Product, that is
sold and distributed in commercial quantities in the Territory by any Person, other than Purchaser
or its Affiliates, licensees or assigns.



     1.16 “Confidential Information” shall have the meaning given in Article 14.



     1.17 “Damages” shall have the meaning given in Section 17.1.



     1.18 “Effective Date” means the date of this Agreement.



     1.19 “Favorable Resolution” means a resolution of the Lawsuit, whether by settlement, summary
judgment, trial court decision in the U.S. District Court, or otherwise, that does not prevent,
enjoin, materially restrict or impose royalties on sales of or otherwise make commercially
unreasonable the manufacture, use, sale or offer to sell of the Product to Purchaser Customers in
the Territory, in each case irrespective of any rights of appeal, subsequent review or
reconsideration of the resolution or of the outcome of such appeal, review or reconsideration.





 




		
	*  	filed under application for confidential treatment




2









 










REDACTED COPY AS FILED AUGUST 4, 2005




     1.20 “FDA” means the U.S. Food and Drug Administration, and any successor or replacement
agency thereto.



     1.21 “Final Favorable Resolution” means a Favorable Resolution that is not subject to any
rights of appeal, subsequent review or reconsideration by the applicable governmental authority
having competent jurisdiction over the Lawsuit.



     1.22 “First Commercial Sale” means, as the context requires, the first date on which Purchaser
sells (i.e., the date of shipment) the Product in commercial quantities to a third party, or the
first date on which Seller sells (i.e., the date of shipment) the Product in commercial quantities
to a third party pursuant to a Seller Launch.



     1.23 “Forecast” shall have the meaning given in Section 5.2.



     1.24 “Force Majeure Event” shall have the meaning given in Article 12.



     1.25 “GAAP” means U.S. generally accepted accounting principles.



     1.26 “Gross Profit” means Net Sales of Purchaser from sales of Product during a calendar
quarter less the aggregate Transfer Price paid for such Product. In the event for any calendar
quarter the above calculation results in a negative number, “Gross Profit” shall be deemed zero for
such calendar quarter.



     1.27 “Gross Profit Split” shall have the meaning given in Section 4.2.



     1.28 “Initial Purchase Order” shall have the meaning given in Section 5.1.



     1.29 “Label”, “Labeled” or “Labeling” means all labels and other written, printed or graphic
matter upon (i) any packaging, container or wrapper used with the Product, or (ii) any written
material accompanying the Product, including package inserts; or, as the context requires, the act
of applying and/or using the same.



     1.30 “Labor Costs” shall have the meaning given in Section 4.1



     1.31 “Lawsuit” means (i) the lawsuit captioned Aventis Pharma S.A. and Aventis
Pharmaceuticals, Inc. v. Amphastar Pharmaceuticals, Inc. and Teva Pharmaceuticals USA, Inc. under
Case No. 03-CV-887 RT (SGLx) in the U.S. District Court in the Central District of California
Eastern Division and (ii) any related or subsequent U.S. trial court action pertaining to the same
subject matter as the lawsuit described in clause (i) above, brought by Aventis Pharma S.A. and
Aventis Pharmaceuticals, Inc. against Seller prior to Seller delivering a Launch Notice, seeking to
obtain a Adverse Resolution.



     1.32 “Launch Notice” shall have the meaning given in Section 2.3.



     1.33 “Launch Quantities” shall have the meaning given in Section 5.1.



     1.34 “Maximum Compensatory Payments” shall have the meaning given in Section 2.3.



     1.35 “Maximum Annual Product Units” shall have the meaning given in Section 5.6.





 




		
	*  	filed under application for confidential treatment



3









 










REDACTED COPY AS FILED AUGUST 4, 2005




     1.36 “Minimum Annual Product Units” shall have the meaning given in Section 8.4.



     1.37 “Net Sales” means, with respect to the Product, the gross revenues derived from the sale
of the Product by Purchaser or, with respect to the determination of the Compensatory Payments, by
Seller, and their respective Affiliates, licensees and assignees to independent third parties,
minus normal and customary (i) [****], (ii) [****], (iii) [****], (iv) [****], (v) [****], (vi)
[****] and (vii) other normal and customary deductions utilized to calculate net sales, in each
case to the extent applicable to the sale of such Product. Marketing allowances shall (i) in the
case of sales by Purchaser, be the actual marketing expenses but [****] and (ii) [****]. The
elements of Net Sales as described above shall be determined in accordance with GAAP, applied on a
basis consistent with the annual audited financial statements of Purchaser’s parent corporation or
Seller, as the context requires.



     1.38 “Non-At-Risk Launch” shall have the meaning given in Section 2.3.



     1.39 “Overdue Interest Amount” means the prime rate of interest quoted as such in The Wall
Street Journal on the first business day of each month during which an amount is overdue under this
Agreement, plus 5%, calculated on an annual basis, not to exceed the maximum rate permitted by
Applicable Law.



     1.40 “Packaging” means all primary and/or bulk (as applicable) containers, Labels, shipping
cases or any other like matter used in packaging or accompanying the Product; or as the context
requires, the act of applying and/or using the same.



     1.41 “Person” means an individual, corporation, partnership, limited liability company or
other entity.



     1.42 “Product” means Seller’s generic version of the enoxaparin sodium injectable product, in
30 mg, 40 mg, 60 mg, 80 mg, 100 mg, 120 mg, and/or 150 mg strengths, to the extent approved under
ANDA 76-684, that is therapeutically equivalent and bioequivalent to, and legally substitutable
for, the brand-name product Lovenox®.



     1.43 “Product Liability Claims” means any claim, action or proceeding based on personal
injury, death or other similar adverse effect to humans caused by (or alleged to be caused by) use
of the Product.



     1.44 “Product Warranty” shall have the meaning given in Section 16.1.



     1.45 “Purchase Orders” shall have the meaning given in Section 5.3.



     1.46 “Purchaser Customers” means, in each case to the extent located in the Territory, (a)
chain retail pharmacies and stores, (b) independent retail pharmacies, (c) grocery and food stores,
(d) mail order pharmacies, (e) certain other types of customers not included within items (a)-(d)
that are pre-approved in writing by Seller pursuant to an amendment to this Agreement, and (f) drug
wholesalers (solely to the extent allocated for resale to customers included in items (a)–(e)
above). Notwithstanding anything herein to the contrary, Seller expressly retains all rights to
all current and future customers and markets for the Product, other than the customers expressly
included in items (a)-(f) above; and, without limiting the foregoing and by way of clarification,
Seller’s retained rights shall expressly include the right to sell Product to drug wholesalers so
long as Seller does not supply,





 




		
	*  	filed under application for confidential treatment




4









 










REDACTED COPY AS FILED AUGUST 4, 2005



sell or distribute Product to drug wholesalers for resale to any customer included in items
(a)-(e) above.




     1.47 “Purchaser Recall” shall have the meaning given in Section 11.3.2.



     1.48 “Purchaser Trademarks” shall have the meaning given in Section 6.3.



     1.49 “Raw Material Costs” shall have the meaning given in Section 4.1.



     1.50 “Seller Launch” shall have the meaning given in Section 2.3.



     1.51 “Specifications” means the specifications for the composition, manufacture, Packaging
and/or quality control of the Product as described in the ANDA for the Product, as the same may be
supplemented from time to time as expressly provided in this Agreement.



     1.52 “Territory” means the United States of America and its territories, including the
Commonwealth of Puerto Rico.



     1.53 “Third Party Infringement Claim” shall have the meaning given in Section 17.4.



     1.54 “Transfer Price” shall have the meaning given in Section 4.1.



     1.55 “Unit Price” shall have the meaning given in Section 4.1.



ARTICLE 2




APPOINTMENT; SUPPLY AND PURCHASE OF PRODUCT




     2.1 Appointment; Agreement to Supply; Development.



          2.1.1 Subject to the terms and conditions of this Agreement, Seller hereby appoints Purchaser
as its exclusive distributor of the Product for sale and distribution to Purchaser Customers in the
Territory, and Purchaser hereby accepts such appointment. Subject to the terms of this Agreement,
Seller shall use its Commercially Reasonable Efforts to manufacture and supply to Purchaser its
requirements of the Product for sale and distribution to Purchaser Customers in the Territory in
accordance with Purchaser’s Purchase Orders as provided herein. Seller shall not, and shall cause
its Affiliates not to, manufacture or supply the Product to Purchaser Customers in the Territory.
Notwithstanding anything herein to the contrary, the parties acknowledge and agree that Seller
retains all rights to develop, manufacture, supply, sell, distribute, market, promote and otherwise
commercialize, directly or through Seller’s Affiliates or third parties, Product to customers other
than Purchaser Customers in the Territory; and without limiting the foregoing and by way of
clarification, Seller’s retained rights shall expressly include the right to sell Product to drug
wholesalers or any other Persons so long as Seller shall not supply, sell or distribute Product to
drug wholesalers or any other Person for resale to any customer included in items (a)-(e) of
Section 1.46.




          2.1.2 Seller hereby represents that it has filed with the FDA ANDA, File No. 76-684, for the
Product. Seller shall, at its expense, use Commercially Reasonable Efforts to prosecute the ANDA
and to obtain approval from the FDA of the ANDA. Seller shall promptly upon its receipt of same
deliver to Purchaser written notice certifying that Seller has received final FDA






 




		
	*  	filed under application for confidential treatment



5









 










REDACTED COPY AS FILED AUGUST 4, 2005



approval of the Product’s ANDA. The ANDA and all other regulatory approvals related to the
manufacture and supply of the Product shall be in Seller’s name and owned exclusively by Seller.
In addition, Seller shall, at its expense, use Commercially Reasonable Efforts to obtain a
Favorable Resolution to enable FDA approval of the Product’s ANDA and the launch of the Product in
the Territory. Notwithstanding the foregoing, nothing herein shall constitute a guarantee or
warranty from Seller that the ANDA for the Product will be approved by the FDA, or, if the Product
ANDA is approved, any market exclusivity will be awarded, or any other regulatory approvals will be
obtained by Seller or that a Favorable Resolution will be obtained. Nothing herein shall limit
Purchaser’s right to terminate this Agreement pursuant to its terms.




     2.2 Agreement to Purchase.



          2.2.1 Subject to the terms of this Agreement, Purchaser shall purchase exclusively from Seller
all of Purchaser’s requirements for the Product for marketing, sale and distribution to Purchaser
Customers in the Territory. Purchaser shall use Commercially Reasonable Efforts to market, sell
and distribute the Product throughout the Territory to Purchaser Customers. Subject to the
foregoing, Purchaser does not make any guaranty or warranty as to any minimum level of Gross
Profits or Net Sales. Nothing herein shall limit each party’s right to terminate this Agreement
pursuant to its terms, including Section 8.4. Unless otherwise consented to in writing by Seller,
Purchaser shall not offer the Product as a loss leader, whether alone or in connection with any
other product or sell the Product in combination or otherwise bundle the Product with other
products in any fashion which decreases the revenue that would otherwise be attributable to the
Product had it not been sold as a loss leader or in combination or otherwise bundled. Subject to
the foregoing and Purchaser performing its obligations hereunder (including its obligation to use
Commercially Reasonably Efforts to sell and distribute the Product), launch timing, pricing,
marketing, sale and distribution and related strategy for the Product for sale and distribution to
Purchaser Customers in the Territory shall be the sole responsibility of, and shall be solely
controlled by, Purchaser.




          2.2.2 Purchaser shall, and shall cause its Affiliates to, sell and distribute the Product only
to Purchaser Customers in the Territory and only in accordance with Applicable Law and the
Product’s ANDA. Purchaser shall reasonably cooperate with Seller in investigating and tracing any
sales of the Product outside of the Territory or to any Persons in the Territory other than
Purchaser Customers originating from sales by Purchaser hereunder. Seller shall not, and shall
cause its Affiliates not to, sell and distribute the Product to Purchaser Customers in the
Territory (provided that, by way of clarification, Seller may sell Product to drug wholesalers or
any other Persons so long as Seller shall not supply, sell or distribute Product to drug
wholesalers or any other Persons for resale to any customer included in items (a)-(e) of Section
1.46). Seller shall reasonably cooperate with Purchaser in investigating and tracing any sales of
the Product to any Purchaser Customers originating from sales by Seller hereunder.




          2.2.3 During the term of this Agreement and, if this Agreement is terminated by Purchaser
pursuant to Section 8.4, for a period of 12 months after such termination, neither Purchaser nor
its Affiliates shall sell or distribute in the Territory any product that is or purports to be a
generic equivalent (i.e. bioquivalent and legally substitutable) of the LovenoxÒ brand
product, other than the Product supplied by Seller hereunder. [****].




     2.3 Commercial Launch of the Product.





 




		
	*  	filed under application for confidential treatment




6









 










REDACTED COPY AS FILED AUGUST 4, 2005




          2.3.1 Notice of Launch. At any time after Seller receives both (i) a Favorable Resolution
(which may, but is not required to be, a Final Favorable Resolution) and (ii) FDA approval of the
Product’s ANDA and confirmation from the FDA that Seller has been awarded 180 days of “first to
file” market exclusivity in accordance with Section 505(j)(5)(B)(iv) of the Act, Seller shall be
entitled to deliver to Purchaser a written notice setting forth Seller’s intention to commence the
commercial sale of the Product in the Territory. Such written notice shall be referred to herein
as an “At-Risk Launch Notice,” unless based on a Final Favorable Resolution, in which case such
written notice shall be referred to herein as a “Non-At-Risk Launch Notice.” As used herein, a
“Launch Notice” may refer generally to an At-Risk Launch Notice and/or a Non-At-Risk Launch Notice.
Notwithstanding the foregoing, in the event that Seller receives FDA approval of the Product’s
ANDA, but Seller is not awarded 180 days “first to file” market exclusivity and/or has not received
a Favorable Resolution, Seller, at its option, may notify Purchaser of Seller’s desire to commence
the commercial sale of the Product in the Territory. In such event, Seller and Purchaser shall
negotiate in good faith the terms and conditions of any Product launch to Purchaser Customers in
the Territory; provided that, by way of clarification, nothing herein shall prevent (i) Seller from
selling and distributing such Product in the Territory so long as Seller does not sell or
distribute such Product to Purchaser Customers (provided that, by way of clarification, Seller may
sell Product to drug wholesalers or any other Persons so long as Seller shall not supply, sell or
distribute Product to drug wholesalers or any other Persons for resale to any customer included in
items (a)-(e) of Section 1.46) or (ii) Purchaser from terminating this Agreement pursuant to its
terms.




          2.3.2 At-Risk Launch. In the event that Purchaser receives an At-Risk Launch Notice,
Purchaser shall notify Seller in writing within 10 days of Purchaser’s receipt thereof whether or
not Purchaser agrees to launch the commercial sale of the Product to Purchaser Customers in the
Territory as contemplated herein based on such At-Risk Launch Notice (an “At-Risk Launch”). In the
event that Purchaser notifies Seller that it has determined to engage in an At-Risk Launch,
Purchaser shall proceed according to the provisions of Section 2.3.3 below. In the event that
Purchaser notifies Seller that it has determined to not engage in an At-Risk Launch, Seller shall
have 10 days from receipt of Purchaser’s notice to notify Purchaser in writing whether or not
Seller has determined to engage in an At-Risk Launch without Purchaser acting as Seller’s
distributor of the Product to the Purchaser Customers in the Territory (a “Seller Launch”). In the
event that Seller notifies Purchaser that it has determined to so engage in a Seller Launch,
subject to Sections 2.3.4 and 2.3.5 below, this Agreement (including any rights of Purchaser to
sell and distribute the Product in the Territory) shall automatically and immediately terminate as
of the date of such Seller’s notice to Purchaser. In the event that Seller notifies Purchaser that
it has determined to not engage in a Seller Launch, this Agreement shall continue in full force and
effect and Seller may at any time thereafter submit a new Launch Notice, at which time the parties
shall, among other things, again proceed in accordance with the provisions of this Section 2.3.




          2.3.3 Obligation to Launch. In the event that Seller delivers to Purchaser a Non-At-Risk
Launch Notice or Purchaser notifies Seller that Purchaser has determined to engage in an At-Risk
Launch, Purchaser shall (i) pay the milestone payment set forth in Section 3.1(b) below in
accordance with the provisions thereof, and (ii) subject to the terms of this Agreement, Purchaser
shall use Commercially Reasonable Efforts to commence with Purchaser’s First Commercial Sale as
soon as commercially practicable thereafter, but in no event later than 5 business days following
Purchaser’s receipt of Launch Quantities.




          2.3.4 Payment of Compensatory Payments upon a Seller Launch. Subject to Section 2.3.5 below,
in the event that Seller engages in a Seller Launch, Seller shall pay to Purchaser






 




		
	*  	filed under application for confidential treatment



7









 










REDACTED COPY AS FILED AUGUST 4, 2005



payments (the “Compensatory Payments”), up to the aggregate amount of [****] (the “Maximum
Compensatory Payments”), equal to:




               (a) during the first six full calendar months following Seller’s First Commercial Sale
pursuant to the Seller Launch, the greater of (i) [****] of Seller’s Net Sales of Product sold in
the Territory and (ii) [****];



               (b) during the second six full calendar months following Seller’s First Commercial Sale
pursuant to the Seller Launch, the greater of (i) [****] of Seller’s Net Sales for Product sold in
the Territory and (ii) [****]; and



               (c) [****] of Seller’s Net Sales of Product sold in the Territory during each calendar quarter
after the first twelve full calendar months after Seller’s First Commercial Sale pursuant to the
Seller Launch.



          2.3.5 The Compensatory Payments shall be paid within 30 days of the end of each calendar
quarter following Seller’s First Commercial Sale pursuant to the Seller Launch. Each Compensatory
Payments payment shall include a report setting forth in reasonable detail the amount of and the
basis for such payment, including a calculation of Seller’s Net Sales (including itemizing all
deductions to gross sales) for such quarterly period. With respect to any payment due as a result
of the [****] minimum Compensatory Payments amounts set forth in Sections 2.3.4(a) and (b) above,
such payment shall be made within 30 days of the end of the calendar quarter that contains the
sixth month of the applicable six month period for which the [****] minimum Compensatory Payments
amount accrued. Any payments not made within the specified period of time for payment shall incur
an interest charge at the rate of the Overdue Interest Amount on such overdue amounts, excluding
any amounts that are subject to a bona fide dispute between the parties.




          2.3.6 Subsequent Suspension of a Seller Launch. In the event that, within 30 days of Seller’s
First Commercial Sale pursuant to a Seller Launch, Seller either voluntarily or as a result of an
order of the FDA or any court having competent jurisdiction ceases to sell in and withdraws the
Product from the market in the Territory, Seller’s obligation to pay the Compensatory Payments
pursuant to such Seller Launch shall immediately terminate as of the date of such withdrawal and
this Agreement shall be automatically and immediately reinstated and be in full force and effect on
and after the date of such withdrawal pursuant to its terms. Without limiting the generality of
the preceding sentence, in the event that, at any time after such withdrawal of the Product, Seller
determines to engage in a new commercial launch of the Product in the Territory, Seller shall
provide to Purchaser a Launch Notice pursuant to Section 2.3.1 above and the remaining provisions
of this Section 2.3 shall again apply to such new Launch Notice. In the event that Seller after
such withdrawal of the Product delivers to Purchaser a Non-At-Risk Launch Notice or Purchaser
notifies Seller that it will engage in an At-Risk Launch in accordance with Section 2.3.2 above
following receipt of an At-Risk Launch Notice, in addition to the payment of the milestone payment
under Section 3.1(b) required in connection therewith, Purchaser shall refund to Seller any amount
of the Compensatory Payments previously paid to Seller within 10 days of receipt by Purchaser of
such Non-At-Risk Launch Notice or receipt by Seller of Purchaser’s notice of intention to engage in
an At-Risk Launch. In the event that Purchaser determines to not engage in such subsequent At-Risk
Launch and Seller commences a subsequent Seller Launch, (i) each of the [****] minimum Compensatory
Payments amounts under Sections 2.3.4(a) and (b) shall be reduced to an amount equal to [****]
multiplied by a fraction, the numerator of which is the number of months of Product sales under all
previous Seller Launches pursuant to which Seller paid Compensatory





 




		
	*  	filed under application for confidential treatment



8









 










REDACTED COPY AS FILED AUGUST 4, 2005



Payments and the denominator of which is six and (ii) the Maximum Compensatory Payments shall
be reduced by the amount all Compensatory Payments previously paid to Purchaser.




     2.4 Termination of Agreement Relating to Commercial Launch.



          2.4.1 In addition to Purchaser’s termination rights set forth elsewhere herein, Purchaser
shall be entitled to terminate this Agreement as set forth in this Section 2.4.1:




               (a) Purchaser may terminate this Agreement after [****], upon [****] prior written notice to
Seller, if Seller shall not have obtained a Favorable Resolution on or prior to [****], so long as
such termination notice is received by Seller on or before [****].



               (b) Provided that Purchaser shall not have notified Seller that it will engage in an At-Risk
Launch prior thereto, Purchaser may terminate this Agreement after [****], upon [****] prior
written notice to Seller, if after [****] an Adverse Resolution then exists, so long as such
termination notice is received by Seller within [****] after the later of [****] or the date
Purchaser is notified of such Adverse Resolution. Seller shall provide written notice to Purchaser
within [****] of any Adverse Resolution. For purposes of clarification, Purchaser’s right to
terminate this Agreement under this Section 2.4.1(b) shall not apply after Seller’s delivery to
Purchaser of a Launch Notice, unless such Launch Notice is an At-Risk Launch Notice, and then only
in the event that this Agreement remains in effect pursuant to Seller’s determination to not engage
in a Seller Launch under Section 2.3.2 or this Agreement is reinstated following a Product
withdrawal pursuant to Section 2.3.6.



               (c) Purchaser may terminate this Agreement after [****], upon [****] prior written notice to
Seller, if Seller shall not have delivered to Purchaser a Launch Notice on or before [****], so
long as such termination notice is received by Seller on or before [****].



          2.4.2 Notwithstanding anything herein to the contrary, Purchaser’s sole remedy, whether in
contract, tort or otherwise, for any failure by Seller to use Commercially Reasonable Efforts to
obtain ANDA approval of the Product or any market exclusivity with respect thereto and/or any
additional regulatory approvals necessary for the manufacture and supply of the Product and/or to
obtain a Favorable Resolution shall be the termination of this Agreement as provided in this
Section 2.4 and the right to any refund of the milestone payment under Section 3.2.




          2.4.3 This Agreement may be terminated by Seller upon 5 days written notice to Purchaser, if
Purchaser shall have not effected Purchaser’s First Commercial Sale within 5 business days
following Purchaser’s receipt of Launch Quantities in accordance with Section 2.3.3.




     2.5 Sales to Wholesalers. Subject to the terms and conditions of this Agreement, Purchaser
shall have exclusive rights to sell Product to drug wholesalers or any other Persons for resale and
distribution to the customers in the Territory identified in items (a)-(e) of Section 1.46. Seller
retains all rights to all other current and future customers and markets for the Product, including
the right to sell Product to drug wholesalers or any other Persons so long as Seller does not
supply, sell or distribute Product to drug wholesalers or any other Persons for resale to any
customer included in items (a)-(e) of Section 1.46. As permitted by Applicable Law, Purchaser and
Seller shall cooperate in creating arrangements with their respective drug wholesalers and other
customers necessary to implement the foregoing. From time to time upon request, each party shall
provide the other with reasonable access to all information in its possession and control (or which
is reasonably





 




		
	*  	filed under application for confidential treatment






9










 







REDACTED COPY AS FILED AUGUST 4, 2005



obtainable) to confirm the ultimate customer of the Products sold by it to drug wholesalers or
other Persons. To the extent Seller sells any Products to drug wholesalers or other Persons that
are ultimately purchased by any customer included in items (a)-(e) of Section 1.46, Seller shall
pay Purchaser its portion of the Gross Profits (i.e., Seller’s Net Sales less the imputed Transfer
Price of the Product times Purchaser’s then applicable portion of the Gross Profit Split)
attributable to such sales by Seller plus the Overdue Interest Amount on the amount due from the
date of the sale to the date of payment. To the extent Purchaser sells any Product to drug
wholesalers or other Persons that are ultimately purchased by any customer not included in items
(a)-(e) of Section 1.46, then Purchaser shall pay to Seller all of the Gross Profit attributable to
such sales by Purchaser plus the Overdue Interest Amount on the amount due from the date of the
sale to the date of payment. The above described Gross Profit reimbursement shall be each party’s
exclusive remedy for any inadvertent and unintentional breach by the other party of its obligations
under this Section 2.5. In addition, without limiting either party’s indemnification obligations
under Article 17, if either party intentionally breaches this Section 2.5, the party in breach
shall indemnify the other party pursuant to Article 17 for all Damages caused thereby.




     2.6 Information. Seller shall provide Purchaser with copies of all material study results and
other written communications that Seller submits to the FDA in connection with its attempt to
obtain approval of the Product’s ANDA or otherwise relating to the Product as soon as reasonably
practicable after Seller’s receipt or submission thereof. At Purchaser’s request from time to time
during normal business hours and upon reasonable notice, Seller shall also provide Purchaser
reasonable access to any other study results and other written communications that Seller submits
to the FDA in connection with its attempt to obtain approval of the Product’s ANDA or otherwise
relating to the Product in Seller’s possession. In addition, Seller shall provide Purchaser with
copies of all material pleadings, motions, briefs and other written communications relating to the
Lawsuit as soon as reasonably practicable after Seller’s receipt or submission thereof. At
Purchaser’s request from time to time during normal business hours and upon reasonable notice,
Seller shall provide Purchaser with reasonable access to any other pleadings, motions, briefs and
other written communications relating to the Lawsuit in Seller’s possession. The obligations of
Seller provided above shall be subject to Applicable Law (including compliance with any protective
order or other court or governmental agency order or requirement), maintaining applicable
privileges and the terms of any confidentiality obligations of Seller owned to third parties.



ARTICLE 3




MILESTONES AND PAYMENTS




     3.1 Milestones and Payments. In consideration of Seller’s grant of the exclusive distribution
rights hereunder to Purchaser, Purchaser shall pay Seller the following amounts upon completion of
the applicable milestone:



	 	 	 	 	 
	Milestone:	 	Amount of Payment Due:
	(a) The Effective Date of this Agreement
	 	$	4,500,000	 
	 
	 	 	 	 
	(b) Within 10 days of both (x) either (i) Purchaser’s
receipt of a Non-At-Risk Launch Notice under Section
2.3.1 above or (ii) Purchaser’s written
notice to Seller that Purchaser will
engage in an At-Risk Launch under
Section 2.3.2 above and (y) delivery to
Purchaser of the Launch Quantities.
	 	$	5,500,000	 
	 
	 	 	 	 
	TOTAL:
	 	$	10,000,000	 






 




		
	*  	filed under application for confidential treatment




10









 







 REDACTED COPY AS FILED AUGUST 4, 2005



     3.2 Payment Terms; Refund.



          3.2.1 Any payments not made within the specified period of time for payment shall incur an
interest charge at the rate of the Overdue Interest Amount on such overdue amounts, excluding any
amounts that are subject to a bona fide dispute between the parties. All payments
shall be made in U.S. dollars through electronic transfer of funds or other wire transfers.




          3.2.2 Except as expressly set forth in this Section 3.2.2, no milestone payment shall be
refundable in whole or in part under any circumstance, including a termination of this Agreement
pursuant to Seller engaging in a Seller Launch under Section 2.3.2. The $4,500,000 milestone
payment paid to Seller under Section 3.1(a) above shall be refunded by Seller to Purchaser in the
event this Agreement is terminated pursuant to Section 2.4.1 above; provided, however, in the event
that this Agreement is terminated pursuant to Section 2.4.1 at any time after Seller shall have
paid Compensatory Payments to Purchaser, the amount of such Compensatory Payments shall be deducted
from such refund of the milestone payment and any amount of such Compensatory Payments in excess of
the amount of the milestone payment shall be refunded to Seller within 30 days of such termination.
All such refunds shall be made by Seller within 30 days after the applicable termination date;
provided that, such amount remaining outstanding shall bear simple interest at the rate of the
Overdue Interest Amount commencing on the date such amount is due and payable (i.e., 30 days after
the applicable termination date) until paid in full; and provided further that, if Seller does not
have at the time the available funds to repay Purchaser such amount, such amount shall be repaid no
later than one year from the applicable termination date. If payment is not made within 30 days of
termination, upon request of Purchaser, Seller shall (as soon as reasonably practicable) provide
Purchaser with reasonable security for repayment of any milestone payments not paid when due,
including potentially, assignment of product revenues or a lien on other assets.




ARTICLE 4




PRICING




     4.1 Transfer Price.



          4.1.1 The transfer price (“Transfer Price”) payable by Purchaser for Product delivered by
Seller shall be a payment equal to the product of (a) the number of units of Product delivered by
Seller to Purchaser pursuant to the applicable Purchase Order (including the Initial Purchase
Order), multiplied by (b) [****] unit, regardless of dosage strength (the “Unit Price”).
Notwithstanding the foregoing, on and after the [****] of the First Commercial Sale, Seller may
increase the Unit Price during each twelve month period (which begins on an anniversary of the
First Commercial Sale), effective upon 30 days prior written notice to Purchaser (or upon the later
resolution of any disputed price increase, except if such dispute is resolved in Seller’s favor in
which case the Unit Price increase shall be effective 30 days from Seller’s original notice thereof
to Purchaser), by (i) the actual per unit increase in Seller’s raw materials costs (the “Raw
Material Costs”) for the Product (including the costs of plunger rods, needle stick prevention
devices,




 




		
	*  	filed under application for confidential treatment




11









 








REDACTED COPY AS FILED AUGUST 4, 2005



syringes, Packaging and other ingredients and materials used to manufacture and process the
Product) over the 12 month period preceding the date of Seller’s notice of such price increase not
to exceed (subject to Section 4.1.2) [****] of the amount of Seller’s Raw Material Costs as at the
beginning of the 12-month period immediately prior to such price increase and (ii) the actual per
unit increase in Seller’s direct labor costs (“Labor Costs”) for the Product over the prior 12
month period preceding the date of Seller’s notice of such price increase not to exceed (subject to
Section 4.1.2) [****] of the amount of the Seller’s Labor Costs as at the beginning of the 12-month
period immediately prior to such price increase. Seller shall provide Purchaser with reasonable
documentation evidencing the applicable increases in Seller’s Raw Material Costs and Labor Costs
with Seller’s notice of the price increase. Purchaser may dispute in good faith any increase to
the Unit Price pursuant to this Section 4.1.1 by written notice to Seller within 10 days of
Purchaser’s receipt of Seller’s notice thereof. If the dispute is not resolved within 30 days of
Purchaser’s dispute notice to Seller, then Purchaser may elect to seek resolution of the dispute
pursuant to the provisions of Section 4.5 by providing written notice to Seller of such election.
If Purchaser does not provide Seller such written notice within 10 days after the aforementioned 30
day period, then the dispute shall be deemed resolved in Seller’s favor.




          4.1.2 At the written request of Seller on and after the [****] of the First Commercial Sale,
the parties shall discuss increases in the Unit Price in excess of the respective [****]
limitations provided in Section 4.1.1 to the extent such increases are due to increases in Raw
Material Costs and/or Labor Costs attributable to changes required by Applicable Law or
governmental authority, including FDA, as provided in Section 6.2.1. Any such request for an
increase in the Unit Price in excess of the respective [****] limitations provided in Section 4.1.1
shall be reasonably considered in good faith by Purchaser but shall not be implemented without
Purchaser’s written consent (which shall not be unreasonably withheld, delayed or conditioned). In
the event Seller’s Raw Material Costs and/or Labor Costs increase by [****] or more during any
twelve month period as a result of changes required by Applicable Law or governmental authority,
including FDA, as provided in Section 6.2.1 (based on reasonable documentation) and Purchaser does
not consent to a corresponding increase as requested by Seller in the Unit Price in excess of the
respective [****] limitations (as the case may be) provided in Section 4.1.1 within [****] of the
date of Seller’s written request for such increase, then Seller shall (by written notice within
[****] of the date of Seller’s written request for such increase) have the right to terminate this
Agreement upon [****] written notice to Purchaser.




     4.2 Gross Profit Split.



          4.2.1 Purchaser shall pay to Seller, as additional consideration for Seller’s supply of
Product hereunder to Purchaser, the following portion of Gross Profit (the “Gross Profit Split”):




               (a) 60% [****];



               (b) 55% [****]; and



               (c) 50% [****].



          4.2.2 Seller’s Gross Profit Split shall be calculated and paid to Seller quarterly, within 30
days after quarter end. Any adjustment to the Gross Profit Split as required from time to time due
to an increase or decrease in the number of Competitive Products or Purchaser’s Net Sales shall be
effective upon the day of the calendar month in which the change of number of Competitive





 




		
	*  	filed under application for confidential treatment



12









 








REDACTED COPY AS FILED AUGUST 4, 2005



Product(s) occurred in the case of Section 4.2.1(b)(i) and (c)(i) above and upon the first day
of the immediately succeeding calendar month after the calendar month in which the change in
Purchaser’s Net Sales triggered an adjustment to the Gross Profit Split in the case of Section
4.2.1(b)(ii) or (c)(ii) above. Notwithstanding anything herein to the contrary and by way of
clarification, any adjustment to the Gross Profit Split resulting from a change in the number of
Competitive Products or Net Sales shall change only the Gross Profit Split of Product having the
same dosage strength as that of the relevant Competitive Product(s) then being sold and distributed
in the Territory. Each party shall provide the other party prompt written notice of any adjustment
to the Gross Profit Split which the notifying party believes is warranted as a result of a change
in the number of Competitive Products or Purchaser’s Net Sales. With such notice, the notifying
party shall provide an explanation to the other party as to the reasons why such adjustment is
warranted and shall provide the other party any documentation in notifying party’s possession or
control which supports the notifying party’s basis for such adjustment.




     4.3 Shipping Terms. The prices charged by Seller to Purchaser shall be FCA (Incoterms 2000),
Seller’s designated manufacturing facility.



     4.4 Payment Terms.



          4.4.1 The Transfer Price for the Product shall be paid within 30 days of the date of the
applicable invoice for such Product.




          4.4.2 The Gross Profit Split shall be paid within 30 days of the end of each calendar quarter,
with a report setting forth in reasonable detail the amount of and the basis for such payment,
including a calculation of Purchaser’s Net Sales (including itemizing all deductions to gross
sales), Gross Profit and the Gross Profit Split (as applicable on a dosage strength basis) for such
quarterly period [****].




          4.4.3 Any payments not made within the specified period of time for payment shall incur an
interest charge at the rate of the Overdue Interest Amount on such overdue amounts, excluding any
amounts that are subject to a bona fide dispute between the parties. In addition,
Seller may withhold shipment of Product to Purchaser if Purchaser has failed to make any payment
required under this Agreement (except for any amounts that are subject to a bona
fide dispute) after the due date for such payment. All payments shall be made in U.S.
dollars through electronic transfer of funds or other wire transfers.




     4.5 Audit Rights. Purchaser with respect to Section 2.2.3 and this Article 4 and Seller with
respect to Sections 2.3.4 and 4.1 shall keep complete and accurate books and records for purposes
of documenting the amount and calculations of, as applicable, Net Sales ([****]), Gross Profit,
Gross Profit Split, the Compensatory Payments and, to the extent it is a basis for an increase in
the Transfer Price pursuant to Section 4.1, increases in Raw Material Costs and Labor Costs. Said
books of account shall be kept at Purchaser’s or Seller’s principal place of business, as
applicable. Upon reasonable notice, each Purchaser or Seller, as applicable, at its expense, shall
have the right to have an independent public accounting firm (reasonably acceptable to the other
party) obtain access to the other party’s financial records, during reasonable business hours,
solely for the purpose of verifying such party’s payments hereunder; provided, however, that this
right may not be exercised more than once in any calendar year (unless a prior audit by the audited
party in such calendar year reveals a discrepancy of the greater of 5% of the payment(s) audited or
$25,000 in any calendar quarter and then the auditing party may exercise its audit right no more
than twice during such



 




		
	*  	filed under application for confidential treatment



13









 








REDACTED COPY AS FILED AUGUST 4, 2005



calendar year). The accountants engaged by the auditing party shall report to the auditing
party only information of the audited party related to the accuracy of the audited party’s
calculations then being audited. The findings of the accountants engaged by the auditing party
shall be final and binding upon the parties hereto, and the payments attributable to any particular
period may only be audited once for such period. Any underpayment or overpayment of the amount due
hereunder due to a miscalculation of such amount shall be paid within 30 days after the delivery of
a written accountants’ report to each party. In the event any such audit reveals a shortfall
greater than 5% of the payment(s) audited or $25,000 in any calendar quarter, then the reasonable
costs of the accountants engaged by the auditing party to perform such audit shall be reimbursed by
the audited party. Any underpayment or overpayment amount paid pursuant to this Section 4.5 shall
accrue interest on such amount from the original due date at the Overdue Interest Amount.




ARTICLE 5




LAUNCH QUANTITIES, FORECASTS, ORDERS




     5.1 Initial Purchase Order; Launch Quantities. Within 5 days following receipt of a
Non-At-Risk Launch Notice by Purchaser or delivery to Seller of Purchaser’s notice that it will
engage in an At-Risk Launch, Purchaser shall deliver to Seller an initial binding order (the
“Initial Purchase Order”) for the quantity of Product required for Purchaser’s commercial launch of
the Product consistent with Purchaser’s then current Forecast; provided that, such quantity shall
not exceed (without the prior written consent of Seller, which may be withheld in its sole
discretion) [****] units of Product if the First Commercial Sale occurs in calendar year 2005 or
[****] of the then existing Maximum Annual Product Units if the First Commercial Sale occurs in any
calendar year after 2005 (the “Launch Quantities”). Subject to the terms of this Agreement, Seller
shall use Commercially Reasonable Efforts to supply the Product to Purchaser in the Launch
Quantities by no later than the delivery dates indicated in the Initial Purchase Order, which
delivery dates shall be no sooner than 90 days after the date of the Initial Purchase Order unless
Seller consents thereto. Seller shall thereafter use Commercially Reasonable Efforts to supply to
Purchaser such additional quantities of the Product as ordered by Purchaser hereunder pursuant to
Section 5.3.



     5.2 Forecasts. Beginning at least 6 months prior to the anticipated date of FDA approval of
the Product’s ANDA and at least 90 days prior to each calendar quarter thereafter, Purchaser shall
provide to Seller a rolling 12-month forecast (each a “Forecast”) of the quantities of the Product
to be purchased by Purchaser on a monthly basis. Without limiting the foregoing, in addition to
the above Product quantities, each Forecast delivered by Purchaser prior to its First Commercial
Sale shall include the Launch Quantities. Forecasts shall be in good faith and non-binding,
provided, however, that (a) on and after Purchaser’s delivery of its Initial Purchase Order to
Seller, the first three months of each Forecast shall be binding on Purchaser, and shall constitute
Purchaser’s firm order for the quantity of Product set forth in such Forecast; and (b) forecasted
quantities of the Product for the fourth, fifth and sixth months forecasted thereunder shall not
increase by more than 25% from the quantities forecasted for such months in the preceding Forecast
without Seller’s prior written consent (not to be unreasonably withheld or delayed).



     5.3 Orders. Except for the Initial Purchaser Order, Purchaser shall deliver to Seller
purchase orders (“Purchase Orders”) for the Product no later than 90 days before the date that the
Products for such Purchase Order are required to be delivered to Purchaser and provided such
Purchase Orders are for the binding portion (i.e., the first three months) of the then current
Forecast




 




		
	*  	filed under application for confidential treatment




14









 








REDACTED COPY AS FILED AUGUST 4, 2005



in accordance with Section 5.2, Seller shall accept such Purchase Orders. Subject to Section
5.6, Seller shall use Commercially Reasonable Efforts to satisfy Purchase Orders for amounts in
excess of those forecasted for the binding portion of the then current Forecast pursuant to Section
5.2; provided that in no event shall Seller be required to add to its existing manufacturing
capacity of its facility(ies) for the Product in order to satisfy Purchaser’s Purchase Orders.
Each such Purchase Order shall be firm and shall specify the quantity of the Product ordered, the
date on which such Product shall be delivered and the delivery address. Product shall be ordered
by Purchaser in no less than full batch increments.




     5.4 Shipping Reports. On or promptly after the date of each shipment of Product, Seller shall
submit to Purchaser, via facsimile, a packing slip containing the ship date, trailer number,
contents and quantities of each shipment and invoice for the Transfer Price.



     5.5 Standard Forms; Conflicts. In ordering and delivering the Product pursuant hereto, Seller
and Purchaser may use their standard forms (including Purchase Orders, invoices, sales
acknowledgments, etc.), but nothing in those forms shall be construed to modify, amend or
supplement the terms of this Agreement and, in case of any conflict herewith, the terms of this
Agreement shall control, and any additional or modified terms contained in any such Purchase Order
or other form shall be null and void and shall not be binding upon the receiving party.



     5.6 Capacity Allocation.



     5.6.1 Notwithstanding anything herein to the contrary or anything to the contrary in any
Purchase Order or Forecast, Seller shall not be obligated to supply Purchaser (regardless of
amounts ordered by Purchaser), more than the then applicable Maximum Annual Product Units during a
twelve month period. Without limiting the foregoing, any Purchase Order or Forecast submitted by
Purchaser hereunder for more than the then applicable Maximum Annual Product Units shall, to the
extent of the excess, be deemed rejected by Seller, unless expressly accepted by Seller in writing.
As used herein, the term “Maximum Annual Product Units” shall mean for the period ending twelve
full calendar months from the First Commercial Sale and for each twelve month period thereafter,
[****] of the total units of branded and generic Lovenox® product (including the brand name
product, the Product, any Authorized Generic Product and any Competitive Product) sold for
distribution into the Territory for the immediately preceding calendar year as reported by IMS
Health (or such other nationally recognized data compilation source as mutually agreed); provided
that, if the First Commercial Sale occurs during calendar year 2005, then the Maximum Annual
Product Units for the period ending twelve full calendar months from the First Commercial Sale
shall be deemed to be [****] units of Product. For each twelve month period beginning after the
First Commercial Sale (other than as provided above if the First Commercial Sale occurs in calendar
year 2005), the Maximum Annual Product Units shall be established as soon as data from IMS Health
(or such other nationally recognized source as mutually agreed) for the immediately preceding
calendar year becomes available to the parties and once the Maximum Annual Product Units for the
then current twelve month period is established, it shall be effective retroactively to the
beginning of and shall be fixed through such twelve month period. Without limiting the foregoing,
but by way of example: If the First Commercial Sale occurs on September 1, 2005, then the Maximum
Annual Product Units for the twelve month period ending with August 31, 2006 would be [****] units
of Product. As a result, Purchaser would have no right to order or purchase, and Seller would have
no obligation to supply, more than [****] units of Product during the twelve month period ending
August 31, 2006. Assuming that [****] total units of branded and generic Lovenox® product were
sold for distribution into the Territory for the 2005 calendar year as reported by IMS




 




		
	*  	filed under application for confidential treatment




15









 








REDACTED COPY AS FILED AUGUST 4, 2005



Health, then the newly established Maximum Annual Product Units for the twelve month period
ending August 31, 2007 would be [****] units of Product (i.e., [****] units). As a result,
Purchaser would have no right to order or purchase, and Seller would have no obligation to supply,
more than [****] units of Product during the twelve month period ending August 31, 2007. The
foregoing process would be repeated once each twelve month period thereafter to establish the
Maximum Annual Product Units for the then current twelve month period. At Purchaser’s request from
time to time, the parties shall discuss increasing the then existing Maximum Annual Product Units
based on then existing market conditions, Seller’s manufacturing capacity and other relevant
factors. Seller shall reasonably consider Purchaser’s request and its reasons for an increase in
the then existing Maximum Annual Product Units; provided that, Seller shall have no obligation to
agree to (and may reject in Seller’s sole discretion and without liability) any increase requested
by Purchaser in the then existing Maximum Annual Product Units.




     5.6.2 In the event that Seller’s inability (including any inability as a result of a Force
Majeure Event) to satisfy any Purchase Order accepted pursuant to Section 5.3, in whole or in part,
is due to a shortage of production capacity or raw materials, then, subject to the terms and
conditions of this Agreement, including Section 5.6.1 above, Seller shall give priority to
Purchaser’s Purchase Orders, and satisfy deliveries of amounts ordered consistent with Section 5.3
prior to fulfilling order for Product of any other Person, for up to (i) [****] units of Product to
be delivered to Purchaser pursuant to its Purchase Orders for the period ending six full calendar
months after the First Commercial Sale and (ii) [****] units of Product to be delivered to
Purchaser pursuant to its Purchase Orders during each six month period thereafter and for any
Product to be delivered to Purchaser pursuant to its Purchase Orders during such six month period
in excess of the foregoing [****] unit amount, [****] of Seller’s units of its finished inventory
of Product produced during the applicable period in excess of [****] units shall be allocated to
fulfill any such remaining outstanding Purchase Orders.



ARTICLE 6




SPECIFICATIONS




     6.1 Specifications. The Specifications for the Product will be as described in the ANDA that
is approved by FDA for the Product. The Specifications for the Product shall not be changed except
as expressly permitted under this Agreement.



     6.2 Change Management.



          6.2.1 Required Changes. With respect to any changes to the Specifications or to any process
involved in the manufacture, Packaging, Labeling, storage, transportation, delivery or testing of
the Product that are required by Applicable Laws or by mandate of an applicable government
authority (including the FDA), the parties shall reasonably cooperate in making such changes
promptly, and Seller shall, subject to Section 4.1 and unless otherwise mutually agreed to in
writing by the parties, bear the costs of implementing such changes, including the cost of
scrapping materials (including raw materials, in-process materials, inventory and packaging
material) associated with such changes.




          6.2.2 Discretionary Changes. With respect to changes to the Specifications or to any process
involved in the manufacture, Packaging, Labeling, storage, transportation, delivery or





 




		
	*  	filed under application for confidential treatment



16









 








REDACTED COPY AS FILED AUGUST 4, 2005



testing of the Product that are not required by Applicable Laws or by mandate of an applicable
government authority (including the FDA), the parties shall cooperate in good faith to reach a
mutually agreeable solution with regard to such changes, but Seller shall not be obligated to make
any such changes requested by Purchaser except as expressly provided in Section 6.2.3. Seller
reserves the right to make such changes unilaterally; provided, however, that Seller will
consult with Purchaser prior to making such changes; and provided further that, Seller shall obtain
Purchaser’s prior written consent (which will not be unreasonably withheld or delayed) for any
changes that would materially affect storage or transportation of the Product after delivery to
Purchaser. The cost of making a discretionary change shall be borne solely by the party initiating
the change or as otherwise mutually agreed to in writing by the parties. In the event any such
changes initiated by Purchaser increase Seller’s costs of manufacturing and supplying the Product
to Purchaser, at Seller’s request, the parties shall discuss and agree in good faith to an
equitable adjustment of the Unit Price to account for such increase in costs.




          6.2.3 Product Labeling. The Products supplied to Purchaser will include Purchaser’s NDC
number and be packaged in labeling and artwork approved by Purchaser to indicate Purchaser as a
distributor of the Product. In order for Purchaser to include in the Product Label Purchaser
Trademarks or similar changes indicating Purchaser as a distributor of the Product; (a) upon
Purchaser’s request, Seller shall provide Purchaser with the Label artwork and text in electronic
format, (b) Purchaser may update such artwork and text to include Purchaser Trademarks and such
other similar changes as desired by Purchaser to indicate Purchaser as a distributor of the
Product, and (c) Purchaser’s costs in connection with the foregoing shall be at its sole expense.
Thereafter, Seller shall make all necessary arrangements, at its expense (except as provided in
Section 6.2.1 above), to have changed Labels or Labeling printed and shall provide printer’s proofs
to Purchaser for Purchaser’s review. Purchaser shall, within two (2) weeks of receipt of said
printer’s proofs, provide written notice to Seller of Purchaser’s approval of such proofs in the
form submitted by Seller (which approval shall not be unreasonably conditioned, withheld or
delayed) or with such corrections thereto (in Purchaser’s reasonable judgment) as included in
Purchaser’s notice. Thereafter, Seller shall incorporate in such Labels and Labeling Purchaser’s
requested corrections thereto, if any, and shall supply Purchaser with examples of such Product
Labels and Labeling for Purchaser’s regulatory filings; provided, however, that, if
Seller shall not agree with Purchaser’s requested corrections, Purchaser and Seller shall consult
in good faith to reach a resolution mutually agreeable to Purchaser and Seller.




     6.3 Trademarks. All trademarks, tradenames and packaging graphics used by Purchaser in
connection with its sale and distribution of the Product to Purchaser Customers in the Territory
(collectively, the “Purchaser Trademarks”) shall be chosen by Purchaser in its sole discretion,
subject to the terms and conditions of this Agreement. Purchaser shall be responsible for any and
all liabilities which may arise from Purchaser’s use of the Purchaser Trademarks (including any
allegations of intellectual property infringement related thereto and any liabilities related to
prescription errors related to such trademark usage). Unless consented to in writing by Seller,
Purchaser shall not use any trademark, tradename, company name, or copyright of Seller in
connection with the distribution, marketing or sale of the Product.



     6.4 Certificate of Analysis. Each shipment of the Product to Purchaser shall be accompanied
by a certificate of analysis prepared by an authorized representative of Seller certifying that the
Product in the shipment has been tested in accordance with the ANDA for such Product, meets the
Specifications and was manufactured in material compliance with cGMP (for the avoidance of doubt
any non-compliance that would affect Purchaser’s sale or distribution of the




 




		
	*  	filed under application for confidential treatment




17









 








REDACTED COPY AS FILED AUGUST 4, 2005



Product hereunder shall be considered material). Seller shall deliver such certificate of
analysis by facsimile or overnight delivery to Purchaser’s distribution facility as designated by
Purchaser.




     6.5 Expiry Dating. Except as otherwise agreed to in writing by Purchaser, all Product shipped
to Purchaser, on the date of shipment by Seller, shall have a shelf-life of at least the approved
dating of the Product (per the Product’s ANDA) [****].



     6.6 Stability Testing. Seller shall maintain a stability testing program for the Product and
provide Purchaser with an annual product review thereon. At least one batch per year of Product
shall be included in the stability program.



     6.7 Annual Report. At Seller’s written request, Purchaser will supply distribution
information and other information reasonably requested by Seller, for the purposes of inclusion
into Seller’s Annual Report to FDA.



ARTICLE 7




TERM




     7.1 Term. Subject to Article 8, the term of this Agreement shall commence on the
Effective Date and remain in effect for a period of 7 years from the date of Purchaser’s First
Commercial Sale. Notwithstanding the foregoing, Purchaser shall have the option to renew this
Agreement for an additional term of 3 years from the date of the expiration of the initial term by
providing Seller Purchaser’s irrevocable written notice thereof 12 months prior to the end of the
initial term.



ARTICLE 8




TERMINATION




     8.1 Breach. This Agreement may be terminated, prior to the expiration of its term, by either
party by giving written notice of its intent to terminate and stating the grounds therefor if the
other party shall have materially breached or materially failed in the observance or performance of
any representation, warranty, guarantee, covenant or obligation under this Agreement. The party
receiving the default notice shall have 30 days from the date of receipt thereof to cure the breach
or failure, except in the case of a breach of an obligation to pay money, in which case such cure
period shall be 10 days; provided, however, that nonpayment in connection with a
good faith dispute of the amount in dispute shall not be considered a breach hereof so long as once
such dispute is resolved, payment of any amounts owing is made within 5 days of such resolution.
If a breach (other than a breach of an obligation to pay money) is not curable within such 30 day
period, then the non-performing party shall have an additional 30 days within which to cure such
breach so long as the non-performing party is diligently working towards a remedy for such breach.
In the event such breach or failure is cured in accordance with the provisions of this Section 8.1,
the default notice shall become of no effect. In the event such breach or failure is not cured in
accordance with the provisions of this Section 8.1, then this Agreement shall terminate immediately
upon written notice to the defaulting party.



 




		
	*  	filed under application for confidential treatment




18









 








REDACTED COPY AS FILED AUGUST 4, 2005




     8.2 Insolvency, Etc. This Agreement may be terminated, prior to the expiration of its term,
immediately upon written notice by either party: (a) in the event that the other party hereto
shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a substantial part of its property, (ii)
make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under
the United States Bankruptcy Code, as now or hereafter in effect (the “Bankruptcy Code”), (iv) file
a petition seeking to take advantage of any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or readjustment of debts, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed against it in any involuntary
case under the Bankruptcy Code, or (vi) take any corporate action for the purpose of effecting any
of the foregoing; or (b) if a proceeding or case shall be commenced against the other party hereto
in any court of competent jurisdiction, seeking (i) its liquidation, reorganization, dissolution or
winding-up, or the composition or readjustment of its debts, (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like of the party or of all or any substantial part of its
assets, or (iii) similar relief under any law relating to bankruptcy, insolvency, reorganization
winding-up or composition or readjustment of debts, or an order, judgment or decree approving any
of the foregoing shall be entered and continue unstayed for a period of 60 days; or an order for
relief against the other party hereto shall be entered in an involuntary case under the Bankruptcy
Code.



     8.3 Termination Relating to Commercial Launch; Force Majeure, No Increase in Unit Price.



          8.3.1 This Agreement shall terminate in accordance with Section 2.3.2.




          8.3.2 Purchaser or Seller, as the case may be, may terminate this Agreement as provided for
under Section 2.4.




          8.3.3 Purchaser or Seller, as the case may be, may terminate this Agreement as provided for
under Article 12.




          8.3.4 Seller may terminate this Agreement as provided in Section 4.1.2.




     8.4 Termination Due to Changed Circumstances. On and after Purchaser’s First Commercial Sale,
Purchaser or Seller may terminate this Agreement upon 90 days prior written notice to the other
party if Purchaser purchases less than the Minimum Annual Product Units during any rolling twelve
month period beginning after the First Commercial Sale so long as such termination notice is
provided to the non-terminating party within 90 days of the end of the twelve month period to which
the termination is based. Notwithstanding the foregoing (unless Purchaser has not ordered at least
the Minimum Annual Product Units), Seller’s right to terminate this Agreement pursuant to this
Section 8.4 is conditioned upon Seller fulfilling all of Purchaser’s Purchase Orders for Product on
a timely basis during the twelve month period upon which Seller’s exercise of its termination
rights under this Section 8.4 is based. As used herein, the term “Minimum Annual Product Units”
shall mean [****] units of Product during any twelve month period beginning after the First
Commercial Sale there are no Authorized Generic Product or Competitive Product being sold and
distributed in the Territory and [****] units of Product during any twelve month period beginning
after the First Commercial Sale in which there are one or more Authorized Generic Products or
Competitive Products being sold and distributed in the Territory (which adjustment shall be
effective upon the date of market entry of such Authorized Generic Product or Competitive Product);
provided that, in the event of any adjustment to Minimum Annual Product Units during any




 




		
	*  	filed under application for confidential treatment



19









 








REDACTED COPY AS FILED AUGUST 4, 2005



rolling twelve month period, the Minimum Annual Product Units existing immediately prior to
and after such adjustment shall be prorated as of the effective date of such adjustment for the
purpose of calculating the Minimum Annual Product Units for such twelve month period.




     8.5 Termination Due to Third Party Infringement Claim. On and after Purchaser’s First
Commercial Sale, Purchaser may terminate this Agreement upon 30 days prior written notice to Seller
in the event a Third Party Infringement Claim (other than with respect to the use of Purchaser
Trademark) is made against Purchaser or its Affiliates so long as such termination notice is
provided to Seller within 15 days of Purchaser receiving written notice of such Third Party
Infringement Claim.



     8.6 Supply Obligations Upon Termination. Upon expiration of this Agreement or any termination
of this Agreement after Purchaser’s First Commercial Sale, Seller shall supply and ship, and
Purchaser shall purchase from Seller in accordance with the terms and conditions of this Agreement
and shall be entitled to distribute to Purchaser Customers in the Territory, any and all amounts of
Products ordered by Purchaser pursuant to Section 5.3 hereof prior to the effective date of such
expiration or termination.



     8.7 Effect of Termination. Expiration or termination of this Agreement for any reason shall
not release either party hereto from any liability that at such time had already accrued, or that
thereafter accrues from a breach or default, prior to the effective date of such expiration or
termination, nor affect in any way the survival of any other right, duty or obligation of either
party hereto which is expressly stated elsewhere in this Agreement to survive such expiration or
termination. In addition, termination or expiration of this Agreement shall in no event release
Purchaser from its payment obligations under Article 4, including Purchaser’s obligation to pay
Seller the Gross Profit Split with respect to sales of Product whether or not such Product is sold
before or after the date of such termination or expiration. Except as expressly provided in
Section 3.2.2, no payments to Seller made pursuant to Article 3 shall be refundable in whole or in
part, whether upon termination or expiration of this Agreement or otherwise. Except as otherwise
provided herein, either party may pursue any remedy available in law or in equity with respect to
any breach of this Agreement. Sections 2.2.3, 2.3.4 (but only in the event of a termination
pursuant to Section 2.3.2), 2.3.5 (but only in the event of a termination pursuant to Section
2.3.2), 2.3.6, 3.2.2, 4.5, 6.7, 8.6, 8.7, Article 13, Article 14, Article 16, Article 17 and, as
applicable, Article 11 and Article 18 hereof shall survive the expiration or termination of this
Agreement in accordance with the respective terms thereof.



ARTICLE 9




WAREHOUSING; SHIPMENT




     9.1 Delivery. Seller shall not be responsible for warehousing finished goods for Purchaser.
Purchaser is responsible for any delivery charges FCA (Incoterms 2000), Seller’s designated
manufacturing site. All shipments shall be accompanied by a packing slip that describes the
articles, states the Purchase Order number and shows the shipment’s destination. Seller shall use
Commercially Reasonable Efforts to deliver Product in accordance with the delivery schedule set
forth in the Initial Purchase Order or the Purchase Orders provided in compliance with Section 5.3
hereof.




 




		
	*  	filed under application for confidential treatment



20









 








REDACTED COPY AS FILED AUGUST 4, 2005




     9.2 Shipment. The risk of loss with respect to Product shall be in accordance with FCA
(Incoterms 2000), Seller’s designated manufacturing site. Purchaser shall notify Seller within 24
hours of discovery of any lost or stolen goods to facilitate Seller’s notification of the FDA.



ARTICLE 10




DEFECTIVE PRODUCT/INSPECTIONS/TESTING




     10.1 Disposition of Defective Product. Purchaser shall use Commercially Reasonable Efforts,
within 20 days after receipt of any shipment of Product, to notify Seller in writing of the
existence and nature of any non-compliance with the Product Warranty observable from a visual
inspection. If such notice is not provided within such 20 day period, then all such Product shall
be deemed to be accepted by Purchaser; provided, however, that, any such acceptance or deemed
acceptance shall not adversely affect any applicable Product Warranty or rights to indemnification.
If Purchaser notifies Seller of defective Product, then Seller shall have a reasonable opportunity
to inspect such defective Product and provide Purchaser with detailed written instructions to
return or dispose of such defective Product at Seller’s expense. Whether or not Seller agrees with
Purchaser’s basis of rejection, Seller shall, at Purchaser’s request, use Commercially Reasonable
Efforts to promptly replace the rejected Product. Purchaser shall pay the Transfer Price, and, to
the extent Purchaser’s Net Sales derive from the sale of such Product, the applicable Gross Profit
Split, for any Product shipped by Seller that replaces Product rejected by Purchaser hereunder. In
accordance with Section 10.2 below, Purchaser shall not be obligated to pay for any properly
rejected Product and any such payment shall be promptly returned to Purchaser if Seller agrees with
Purchaser’s notice of non-compliance with respect to such rejected Product or such rejected Product
is deemed by the independent third-party laboratory to be not in compliance with the Product
Warranty. Purchaser shall not destroy, return or otherwise dispose of the rejected Product until
written notification is received from Seller.



     10.2 Independent Testing. If Seller disagrees with Purchaser’s notice of non-compliance as to
Product testing Specifications of the Product to the Product Warranty, the Product shall be
submitted to an independent third-party laboratory, mutually and reasonably acceptable to both
parties, for analytical testing to determine the extent of the Product’s compliance or
non-compliance to the Product Warranty. All costs associated with such third-party laboratory
testing shall be at Purchaser’s expense, and Purchaser shall be required to pay the Transfer Price
and, in the event Purchaser’s Net Sales derive from the sale of such Product, the applicable Gross
Profit Split, for all rejected Product (irrespective of whether Seller has replaced such Product),
unless Seller agrees with Purchaser’s notice of non-compliance or the tested Product is deemed by
such third-party laboratory to be not in compliance with the Product Warranty, in which case all
such costs associated with such third-party laboratory testing, including reimbursement of freight
and disposition costs, shall be promptly reimbursed by Seller to Purchaser and Purchaser shall not
be obligated to pay for such rejected Product and any such payment shall be promptly returned to
Purchaser.



     10.3 Short-Shipment. Purchaser shall notify Seller within 30 days of receipt of any
short-shipment claim with respect to the Product and Seller shall use Commercially Reasonable
Efforts to promptly address such claim to Purchaser’s reasonable satisfaction.




 




		
	*  	filed under application for confidential treatment



21









 








REDACTED COPY AS FILED AUGUST 4, 2005




ARTICLE 11




REGULATORY MATTERS




     11.1 Adverse Event Reporting; Product Complaints. Purchaser shall have the responsibility in
the Territory for complying with all regulatory filings, reporting requirements and other matters
which relate solely to Purchaser acting as a distributor of the Product to Purchaser Customers in
the Territory and Seller shall cooperate with Purchaser as reasonably necessary to accomplish the
foregoing. All other regulatory reporting matters (including investigating, evaluating and
reporting Adverse Events and other Product complaints) shall be Seller’s responsibility. In this
regard, Seller shall be responsible for all reporting to regulatory authorities of all Adverse
Events associated with the use of Product. Purchaser shall notify Seller of any report of an
Adverse Event concerning the Product within five (5) calendar days of receipt of the report and
provide Seller with information as required by Applicable Laws or as reasonably requested by
Seller. Purchaser shall cooperate with Seller as necessary to report such Adverse Event when so
required under Applicable Laws. Purchaser shall also notify Seller within 10 days of any
complaints related to the Product of which it becomes aware regarding problems with the Product
other than those associated with Adverse Events, and Seller shall meet and confer periodically with
Purchaser with respect to Seller’s responses to such complaints and whether any remedial actions by
Purchaser are indicated as necessary or appropriate by the pattern of complaints, which actions
shall be at the expense of the party to the extent its improper acts or omissions caused such
complaints.



     11.2 FDA Communications. Purchaser and Seller agree to promptly notify the other party in the
event they receive any communication or notice from the FDA with respect to the Product or an
inspection of the facility where the Product is manufactured, Packaged or stored, and each party
shall promptly provide a copy of such communications to the extent applicable to the Product to the
other. The parties shall cooperate in good faith in responding to any such FDA inquiry or in
making any report to the FDA with respect to the Product, but in all cases Seller shall have final
authority for regulatory decisions concerning the Product and responsibility for all communications
with the FDA.



     11.3 Recalls.



          11.3.1 In the event of any recall or seizure of any Product, other than a Purchaser Recall (as
defined below) Seller shall, at the written election of Purchaser and at Seller’s sole cost,
either:




               (a) undertake Commercially Reasonable Efforts to replace the amount of Product recalled or
seized; or



               (b) give credit to Purchaser against outstanding receivables due from Purchaser in an amount
equal to the amount paid by Purchaser for the Product (including any Gross Profit Split paid to
Seller on such Product) so recalled or seized or otherwise owing by Purchaser hereunder;


plus reimburse (or, at the written election of Purchaser, credit) Purchaser for the aggregate and
reasonable transportation costs, taxes, freight insurance, handling and reasonable and verifiable
out-of-pocket costs incurred by Purchaser in respect of such recalled or seized Product.





 




		
	*  	filed under application for confidential treatment




22









 








REDACTED COPY AS FILED AUGUST 4, 2005




          11.3.2 In the event of any recall or seizure of any Product occurring primarily as a result of
any breach of this Agreement by, or negligent acts of omissions or intentional misconduct of,
Purchaser or its Affiliates (a “Purchaser Recall”), (i) if such Purchaser Recall is classified by
FDA as a Class I recall, Seller shall be responsible (as between Purchaser and Seller) for such
recalled or seized Product and shall bear all costs of such recall or seizure, (ii) if such
Purchaser Recall is classified by FDA as a Class II recall, Seller shall be responsible (as between
Purchaser and Seller) for such recalled or seized Product and the parties shall share equally all
costs of such recall or seizure and (iii) if such Purchaser Recall is classified by FDA as a Class
III recall, Purchaser shall be responsible (as between Purchaser and Seller) for such
recalled or seized Product and shall bear all costs of such recall or seizure, including
reimbursement of Seller of any reasonable and verifiable out-of-pocket costs incurred by Seller
related to the recall or seizure of such Product. Purchaser’s costs with respect to any Purchaser
Recall as set forth above shall not be deducted in connection with the calculation of
Purchaser’s Net Sales or Gross Profit hereunder.




          11.3.3 For purposes of this Section 11.3, “recall” shall mean (i) any action by Seller,
Purchaser, any Affiliate of either to recover title to or possession of any Product sold or shipped
and/or (ii) any decision by Purchaser not to sell or ship Product to third parties which would have
been subject to recall or seizure if it had been sold or shipped, in each case taken in the good
faith belief that such action was appropriate or required under the circumstances. For purposes of
this Section 11.3, “seizure” shall mean any action by any government agency to detain or destroy
any Product. Notwithstanding anything to the contrary in this Section 11.3, Seller shall have
final authority with respect to any recall of the Product and neither Purchaser nor its Affiliates
shall initiate any recall of the Product without Seller’s prior written approval (such approval not
to be unreasonably conditioned, withheld or delayed).




          11.3.4 Seller and Purchaser shall keep the other fully informed of any notification or other
information, whether received directly or indirectly, that might affect the marketability, safety
or effectiveness of the Product, or which might result in liability issues or otherwise necessitate
action on the part of either party, or which might result in recall or seizure of any Product.
Purchaser shall maintain records of all sales of Product and customers reasonably sufficient to
adequately administer a recall or seizure for the longer of three years after termination or
expiration of this Agreement or the period required by Applicable Law. Seller will be responsible
for assuring that such recall is closed-out with the FDA, unless the FDA shall otherwise require.




     11.4 Inspections.



          11.4.1 Seller shall use Commercially Reasonable Efforts to maintain and operate the
manufacturing facility designated in the ANDA, and to implement such quality control procedures, so
as to cause Seller to be able to perform its obligations hereunder. Upon Purchaser’s written
request and at its expense, Seller shall permit quality assurance representatives of Purchaser
(reasonably acceptable to Seller) to inspect such manufacturing facility, at all times accompanied
by a representative of Seller, upon reasonable notice, during normal business hours and on a
confidential basis. Such inspection shall be limited to an assessment of such facility’s
compliance with cGMP and other quality assurance standards as such relate to the manufacture of the
Product. Seller shall also permit Purchaser reasonable periodic visits to discuss and review
manufacturing and supply issues with management of Seller.




          11.4.2 In the event Seller’s manufacturing, Packaging, testing or storage facility producing
the Product hereunder is inspected by representatives of any federal, state, or local agency




 




		
	*  	filed under application for confidential treatment




23









 








REDACTED COPY AS FILED AUGUST 4, 2005



in connection with Seller’s manufacture, Packaging, testing or storage of Product, then Seller
shall notify the Purchaser promptly upon learning of such inspection, and shall, within 10 days of
such notice, supply Purchaser with copies of any correspondence or portions of correspondence which
relate to the Product in Seller’s possession. If Seller is informed that a representative of any
federal, state, or local agency will be conducting an audit of Seller’s manufacturing facility and
such audit specifically relates to the Product, then Seller will, to the extent reasonably
practicable, provide advance notice to Purchaser to permit Purchaser to observe and attend such
audit. In the event Seller receives any regulatory letter or comments from any federal, state, or
local agency in connection with its manufacture, Packaging, testing or storage of the Product
requiring a response or action by Seller, including receipt of a Form 483 (Inspectional
Observations) or a “Warning Letter,” Seller shall promptly following Seller’s receipt thereof,
provide Purchaser with a copy of such communication which relate to the Product. At Seller’s
request, Purchaser will provide Seller with any and all data or information reasonably required to
prepare a response to such communication. Seller shall consult Purchaser with respect to any
response relating to the Product; provided, however, that, as between Seller and Purchaser, Seller
shall make the final determination as to any such response submitted to the regulatory authorities.
Seller shall promptly provide Purchaser with a copy of any final response which relate to the
Product after its submission to the regulatory authority.




          11.4.3 Purchaser shall use Commercially Reasonable Efforts to maintain and operate any
facility of Purchaser at which the Product is stored or distributed in compliance with cGMP and
other quality assurance standards as such relate to the Product. Upon Seller’s written request and
at its expense, Purchaser shall permit quality assurance representatives of Seller (reasonably
acceptable to Purchaser) to inspect any facility of Purchaser at which the Product is stored or
distributed. Such inspection shall be limited to an assessment of such facility’s compliance with
cGMP and other quality assurance standards as such relate to the Product. In the event Purchaser
is inspected or receives a regulatory letter or comments from any federal agency in connection with
its sale or distribution of the Product, Purchaser shall notify Seller promptly upon learning of
such inspection and/or provide Seller copies of such correspondence upon receiving such
documentation. Seller shall have the right to, and at Purchaser’s written request shall,
participate in that portion of such inspection relating to the Product. Regardless of whether
Seller does participate as described above, Seller and Purchaser shall consult with respect to the
response relating to the Product. Seller will provide Purchaser at Purchaser’s request with all
data or information reasonably required to prepare a response relating to the Product, and
Purchaser will promptly provide Seller with a copy of any final response submitted to the
regulatory authority.




          11.4.4 Seller will notify Purchaser within one day of any finished Product lot that results in
a positive sterility test out of specification (OOS) condition, whether or not that lot was
released or distributed, whether or not the positive sterility result was subsequently investigated
and attributed to an assignable cause. In addition, Seller will notify Purchaser within one day of
any stability test for the Product that results in an OOS condition relating to the Product
Specifications, whether or not the OOS condition was subsequently investigated and attributed to an
assignable cause. To the extent it is not reasonably practicable for Seller to provide notice
within the one day period required by this Section, Seller will not be deemed to be in breach of
this Agreement if it provides the required notice as soon as it is reasonably practicable. Seller
will also provide quarterly reports to Purchaser of the number of lots of Product made and the
number of lot failures during the preceding quarter and shall reasonably respond to any information
requests relating thereto.




     11.5 Sales and Marketing Activities. Purchaser shall be responsible for establishing a formal
written program in compliance with the California Comprehensive Compliance Program



 




		
	*  	filed under application for confidential treatment




24









 








REDACTED COPY AS FILED AUGUST 4, 2005



pursuant to California Health and Safety Code Sections 119400 et. seq., on or before July 1,
2005, for all applicable activities of Purchaser and its Affiliates related to the Product which
are subject to this code section. Upon request of Seller, Purchaser shall provide Seller with
reasonable evidence of its compliance with this Section 11.5.




     11.6 Cooperation. Seller shall provide reasonable assistance to Purchaser in its preparation
and filing with appropriate regulatory agencies (both federal and state agencies related to
reimbursement and health care insurance) of filings required for the marketing, and distribution of
the Product to Purchaser Customers in the Territory by Purchaser. Seller and Purchaser shall
cooperate in good faith to develop such necessary regulatory strategies which may be required for
purposes of this Agreement, and to allow the Product to be listed on applicable formularies and
other drug listings as reasonably requested by Purchaser, and making any applicable filings or
registrations to allow the Product to be included on such formularies or listings, including
Medicare and Medicaid.



ARTICLE 12




FORCE MAJEURE




     12.1 Force Majeure. If either party is prevented from performing any of its obligations
hereunder (except for any monetary payments due hereunder) due directly or indirectly to fire;
flood; accident; explosion; equipment or machinery breakdown; sabotage; strike; or any labor
disturbance; civil commotions; riots’ invasions; wars (present or future); acts, restraints,
requisitions, regulations, or directions or orders of any governmental entity; compliance with any
request of any governmental entity; compliance with any request for material represented to be for
purposes of (directly or indirectly) producing articles for national defense or national defense
facilities; shortage of labor, fuel, power or raw materials; inability to obtain raw materials or
supplies; failures of normal sources of supplies; inability to obtain or delays of transportation
facilities; any act of God; any act of the other party or other causes (whether similar or
dissimilar to the foregoing); in each case so long as such cause is beyond the reasonable control
of such party (a “Force Majeure Event”), such non-performing party shall not be liable for breach
of this Agreement with respect to such non-performance if and to the extent any such
non-performance is due to a Force Majeure Event. Such non-performance will be excused for as long
as such event shall be continuing; provided that, the non-performing party gives immediate written
notice to the other party of the Force Majeure Event. Such non-performing party shall exercise all
reasonable efforts to eliminate the Force Majeure Event and to resume performance of its affected
obligations as soon as practicable. In the event that, as a result of such Force Majeure Event, a
party does not perform all of its obligations hereunder for any period aggregating 120 days within
any 360-day period, the other party may terminate this Agreement on 30 days prior written notice to
the non-performing party.



ARTICLE 13




INSURANCE




     13.1 Insurance. Each party agrees to procure and maintain in full force and effect during the
term of this Agreement and continuing for a period of not less than 36 months following the
termination or expiration hereof, at its sole cost and expense, product liability insurance in
amounts of not less than [****] per incident and [****] annual aggregate (provided that within 60
days after




 




		
	*  	filed under application for confidential treatment




25









 








REDACTED COPY AS FILED AUGUST 4, 2005



Purchaser’s payment of the amount to Seller under Section 3.1(b), the annual aggregate shall
be increased to [****]) which insurance shall be written on a “claims made” basis policy form with
a reputable insurance carrier and name the other party as an additional insured. Each party shall,
on request, provide to the other party a copy of a certificate of coverage or other written
evidence reasonably satisfactory to such requesting party of such insurance coverage. Either party
may substitute a program of self-insurance for all or part of the third party insurance required
hereunder if reasonably satisfactory to the other party.




ARTICLE 14




CONFIDENTIALITY




     14.1 Confidentiality. As used herein, “Confidential Information” shall include all
confidential or proprietary information given to one party by the other party, or otherwise
acquired by such party in its performance of this Agreement, relating to such other party or any of
its Affiliates, including information regarding any of the products of such other party or any of
its Affiliates, information regarding its advertising, distribution, marketing or strategic plans
or information regarding its costs, productivity or technological advances, specifications, data,
know-how, formulations, product concepts, sample materials, manufacturing processes and other
manufacturing information, business and technical information, pricing and other deal terms,
whether in written form or disclosed orally, visually and/or in another tangible form. Neither
party shall use, exploit or disclose to third parties any Confidential Information of the other and
each party shall insure that its and its Affiliates’ employees, officers, representatives and
agents shall not use or disclose to third parties any Confidential Information and upon the
termination of this Agreement shall return to the other or destroy all Confidential Information in
written form. Confidential Information shall not include information that (i) was lawfully already
known to receiving party at the time of its receipt thereof, (ii) is disclosed to receiving party
after its receipt thereof by a third party who has a right to make such disclosure without
violating any obligation of confidentiality, (iii) is or becomes generally available to the public
through no fault of receiving party or (iv) is independently developed by the receiving party as
demonstrated by such party pursuant to contemporaneous written records. The obligations of
confidentiality set out above shall survive termination or expiration of this Agreement for a
period of 10 years. Notwithstanding the foregoing, in the event that a party is required under
Applicable Law, the rules or regulations of any stock exchange or listing body upon which the stock
of a party or a party’s parent corporation may then be traded, or by governmental agency or court
of competent jurisdiction to disclose the Confidential Information of the other party, such party
shall promptly notify the other party in writing of all details of the required disclosure and
permit the other party a reasonable opportunity to intervene to oppose, limit or condition such
disclosure prior to making such disclosure, and such party shall make any such disclosure
ultimately required in the most restrictive fashion, in its reasonable judgment, consistent with
the applicable requirement requiring such disclosure.



ARTICLE 15




PUBLIC ANNOUNCEMENTS; ETC.




     15.1 Public Announcements. No public announcement, news release, statement, publication, or
presentation relating to the existence of this Agreement, the subject matter hereof, or




 




		
	*  	filed under application for confidential treatment




26









 








REDACTED COPY AS FILED AUGUST 4, 2005



either party’s performance hereunder will be made without the other party’s prior written
approval, which approval shall not be unreasonably conditioned, withheld or delayed.
Notwithstanding the foregoing, and subject to the provisions of Article 14 with respect to
Confidential Information, either party may make any public disclosure relating to the existence of
this Agreement, the subject matter hereof and its terms, or either party’s performance hereunder
that is deemed necessary, in the reasonable judgment of a party, to comply with Applicable Laws or
with the rules or regulations of any stock exchange or listing body upon which the securities of a
party or a party’s parent corporation may then or are intended to be traded or of any governmental
agency (e.g., the Securities and Exchange Commission) which regulates such securities (including
the filing of a copy of this Agreement with such governmental agency); provided that, the party
making such disclosure shall provide the non-disclosing party with a copy of the intended
disclosure reasonably, and to the extent practicable, prior to public dissemination.




     15.2 No Use of Other Party’s Name. Neither party shall use the name of the other party or any
of its Affiliates for advertising, promotional or other purposes without the prior written consent
of the other party.



ARTICLE 16




REPRESENTATIONS AND WARRANTIES




     16.1 Product Warranty.



          16.1.1 Seller represents and warrants to Purchaser that all Product supplied in connection
with this Agreement shall: (i) be manufactured, packaged, tested, stored and handled in compliance
in all material respects with cGMP and all other Applicable Laws (for the avoidance of doubt any
non-compliance that would affect Purchaser’s sale or distribution of the Product hereunder shall be
considered material); and (ii) meet the Specifications and the Product’s ANDA and not be
adulterated or misbranded within the meaning of the Act (each of clauses (i) and (ii) being
referred to collectively herein as the “Product Warranty”). The foregoing Product Warranty shall
not apply to the extent that the failure of any such Product to meet the requirements of this
Section 16.1.1 is caused by the negligent acts or omissions or intentional misconduct of Purchaser,
its Affiliates, wholesalers or other customers (including modification or misuse or improper
storage or transportation of the Product after shipment to Purchaser, whether by Purchaser, its
Affiliates or any other Person).




          16.1.2 EXCEPT AS EXPRESSLY PROVIDED IN SECTION 16.1.1 ABOVE, SELLER MAKES NO REPRESENTATION OR
WARRANTY WITH RESPECT TO THE PRODUCT OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY AS TO
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR ANY WARRANTY THAT THE PRODUCT IS FREE FROM
THE RIGHTFUL CLAIM OF ANY THIRD PARTY, BY WAY OF INFRINGEMENT OR THE LIKE.




     16.2 Warranties with Regard to Status.



          16.2.1 Purchaser hereby represents and warrants to Seller that neither it nor any of its
Affiliates is prohibited under any Applicable Laws from selling and distributing the Product
(assuming that the ANDA for the Product is approved by FDA) within the Territory and that neither





 




		
	*  	filed under application for confidential treatment




27









 








REDACTED COPY AS FILED AUGUST 4, 2005



Purchaser nor any of its Affiliates is a person that is listed by a United States federal
agency as debarred, suspended, proposed for debarment or otherwise ineligible for federal programs
in the Territory.




          16.2.2 Seller hereby represents and warrants to Purchaser that neither it nor any of its
Affiliates is prohibited under any Applicable Laws from manufacturing, selling and distributing the
Product (assuming that the ANDA for the Product is approved by FDA) within the Territory and that
neither Seller nor any of its Affiliates is a person that is listed by a United States federal
agency as debarred, suspended, proposed for debarment or otherwise ineligible for federal programs
in the Territory.




     16.3 Purchaser Warranties. Purchaser hereby represents warrants and covenants that:



               (a) Purchaser Trademarks may be lawfully used as directed by Purchaser;



               (b) the Product Label, if Labeled in accordance with specifications provided by Purchaser,
will comply with the ANDA for the Product and Applicable Laws; and,



               (c) neither Purchaser nor its Affiliates has filed with the FDA an ANDA for a generic
equivalent to Lovenox®.



     16.4 Execution and Performance of Agreement. Each of Seller and Purchaser represents and
warrants to the other that it has full right, power and authority to enter into and perform its
obligations under this Agreement. Each of Seller and Purchaser further represents and warrants to
the other that the performance of its obligations under this Agreement will not result in a
violation or breach of, and will not conflict with or constitute a default under any agreement,
contract, commitment or obligation to which such party or any of its Affiliates is a party or by
which it is otherwise bound or any Applicable Law.



     16.5 LIMITATION ON LIABILITY OF PARTIES. EXCEPT WITH RESPECT TO (A) A CLAIM FOR BREACH UNDER
ARTICLE 14 ABOVE, (B) A CLAIM FOR WILLFUL MISCONDUCT OR FRAUD AND (C) AMOUNTS PAYABLE TO A THIRD
PARTY THAT ARE SUBJECT TO INDEMNIFICATION PURSUANT TO ARTICLE 17 BELOW, IN NO EVENT SHALL EITHER
PARTY BE LIABLE TO THE OTHER PARTY FOR LOSS OF PROFITS OR INDIRECT, INCIDENTAL, SPECIAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES RESULTING FROM THIS AGREEMENT.



ARTICLE 17




INDEMNIFICATION




     17.1 Indemnification by Seller. Seller shall indemnify, defend and hold harmless Purchaser
(and its Affiliates) from and against any and all damages, liabilities, claims, costs, charges,
judgments and expenses (including reasonable attorneys’ fees) (collectively “Damages”) that may be
sustained, suffered or incurred by Purchaser (or its Affiliates) arising from or relating to any
claim, action or proceeding made or brought by a third party against the Purchaser (or its
Affiliates) to the extent arising from (a) the actual or alleged breach by Seller of any warranty,
representation, covenant or agreement made by Seller in this Agreement; (b) negligent acts or
omissions or




 




		
	*  	filed under application for confidential treatment



28









 








REDACTED COPY AS FILED AUGUST 4, 2005



intentional misconduct of Seller or its Affiliates; (c) any Product recall or seizure (other
than a Purchaser Recall to the extent provided under Section 11.3.2); or (d) any Product Liability
Claims (other than as provided in Section 17.2(d) below); provided, however, that in each such case
above, Seller shall not be liable to Purchaser hereunder to the extent such Damages arise from the
negligent acts or omissions or intentional misconduct of Purchaser or its Affiliates, wholesalers
or other customers (including modification or misuse or improper storage or transportation of the
Product after shipment to Purchaser, whether by Purchaser, its Affiliates or any other Person) or
such other actions or inactions for which Purchaser is obligated to indemnify Seller under Section
17.2 below.




     17.2 Indemnification by Purchaser. Purchaser shall indemnify, defend and hold harmless Seller
(and its Affiliates) from and against any and all Damages, that may be sustained, suffered or
incurred by Seller (or its Affiliates) arising from or relating to any claim, action or proceeding
made or brought by a third party against the Seller (or its Affiliates) to the extent arising from
(a) the actual or alleged breach by Purchaser of any warranty, representation, covenant or
agreement made by Purchaser in this Agreement; (b) improper Product marketing, sales or
distribution activities of Purchaser or its Affiliates, including any commercial arrangements
entered into by Purchaser with its customers or other third parties; (c) negligent acts or
omissions or intentional misconduct of Purchaser or its Affiliates (including modification or
misuse or improper storage or transportation of the Product by Purchaser, its Affiliates or other
Person acting on behalf of Purchaser or its Affiliates, excluding wholesalers and customers); (d)
any Product Liability Claims to the extent arising from Purchaser’s breach hereof or the negligent
acts or omissions or intentional misconduct of Purchaser and its Affiliates (including modification
or misuse or improper storage or transportation of the Product by Purchaser, its Affiliates or
other Person acting on behalf of Purchaser or its Affiliates, excluding wholesalers and customers);
or (e) any Purchaser Recall (except as otherwise provided in Section 11.3.2); provided, however,
that, in each such case above, Purchaser shall not be liable to Seller hereunder to the extent such
Damages arise from the negligent acts or omissions or intentional misconduct of Seller or its
Affiliates or such other actions or inactions for which Seller is obligated to indemnify Purchaser
under Section 17.1 above.



     17.3 Claims. Each indemnified party agrees to give the indemnifying party prompt written
notice of any matter upon which such indemnified party intends to base a claim for indemnification
under this Article 17; provided, however, that failure to give such prompt notification shall not
affect the indemnification provided hereunder except to the extent the indemnifying party shall
have been actually materially prejudiced as a result of such failure. The indemnified party shall
permit, and shall cause its employees and agents to permit, the indemnifying party to defend or
settle any such action, claim or liability and agrees to the complete control of such defense or
settlement by the indemnifying party; provided, however, that such settlement does not impose any
obligation or burden on the indemnified party without the prior written consent of the indemnified
party. No such action, claim or liability shall be settled by the indemnified party without the
prior written consent of the indemnifying party (which consent shall not be unreasonably
conditioned, withheld or delayed) and the indemnifying party shall not be responsible for any fees
or other costs incurred other than as provided in this Article 17. The indemnified party, its
employees, agents and affiliates shall cooperate reasonably with the indemnifying party and its
legal representatives in the investigation and defense of any action, claim or liability covered by
this indemnification at the sole expense of the indemnifying party. The indemnified party shall
have the right, but not the obligation, to be represented by counsel of its own selection and at
its own expense. Notwithstanding Sections 17.1 and 17.2 above, and by way of
clarification, neither party shall be obligated to indemnify the other party hereunder for
modification or misuse or improper storage or transportation of the Product by wholesalers or the
customers of either party.




 




		
	*  	filed under application for confidential treatment




29









 








REDACTED COPY AS FILED AUGUST 4, 2005




     17.4 Third Party Infringement Claims. In the event any claim or action for infringement of
any patent, trademark, or other intellectual property right shall be made or brought by a third
party against Seller, Purchaser or any of their respective Affiliates because of, or in
anticipation of, the manufacture and supply of Product by Seller to Purchaser hereunder, or the
marketing, sale or distribution of such Product to Purchaser Customers in the Territory by
Purchaser hereunder (a “Third Party Infringement Claim”), the party first receiving such notice of
the Third Party Infringement Claim shall promptly notify the other party. With respect to the
Third Party Infringement Claim, Seller and Purchaser each hereby agrees that all Damages arising
from or related to the Third Party Infringement Claim (including any legal fees and associated
costs incurred in defending the Third Party Infringement Claim and any fees, royalties or other
amounts paid in settlement or upon judgment) shall be shared as follows:



               (a) Except as provided in clause (b) below, [****] shall be [****] responsible for [****]
arising from any Third Party Infringement Claim, including any fees, royalties or other amounts
agreed to be paid in settlement or upon judgment of the Lawsuit or otherwise; and



               (b) [****] shall be [****] for [****] arising from any Third Party Infringement Claim with
respect to the use of Purchaser Trademarks.


Each party agrees to indemnify the other party to ensure that Damages arising from any Third Party
Infringement Claim are allocated in accordance with clauses (a) and (b) above. Unless otherwise
agreed to by the parties, Seller shall control the defense any Third Party Infringement Claim
described in clause (a) above and Purchaser shall control the defense of any Third Party
Infringement Claim described in clause (b) above. The party controlling the defense of any Third
Party Infringement Claim shall have the sole right to defend or settle any such Third Party
Infringement Claim; provided, however, that such settlement does not impose any obligation or
burden on the other party without the prior written consent of the other party (which consent shall
not be unreasonably withheld). The party controlling the defense of any Third Party Infringement
Claim shall keep the other party, at its request, materially informed of the status and progress of
the defense of the Third Party Infringement Claim. No Third Party Infringement Claim shall be
settled by the party who is not controlling the defense of such Third Party Infringement Claim
without the prior written consent of the party controlling such defense. The non-controlling
party, its employees, agents and Affiliates shall reasonably cooperate with the party (and its
legal representatives) controlling the defense of any Third Party Infringement Claim in the
investigation and defense of such Third Party Infringement Claim. Notwithstanding the above, and
by way of clarification, neither party shall be obligated to indemnify the other party hereunder
for modification or misuse of the Product by the other party or by wholesalers or the customers of
either party. The provisions of this Section 17.4 shall be notwithstanding any conflicting
provisions set forth in this Agreement, including Sections 17.1, 17.2 and 17.3.




     17.5 No Right of Offset. Purchaser shall have no right to set off or retain any amounts
otherwise payable to Seller under Articles 3 or 4 of this Agreement, including any amounts payable
to satisfy any indemnification claims Purchaser may have hereunder.



ARTICLE 18




MISCELLANEOUS





 




		
	*  	filed under application for confidential treatment




30









 








REDACTED COPY AS FILED AUGUST 4, 2005




     18.1 Governing Law. This Agreement and all acts and transactions pursuant hereto and the
rights and obligations of the parties hereto shall be governed, construed and interpreted in
accordance with the laws of the State of New York, without reference to rules of conflicts or
choice of laws.



     18.2 Relationship of the Parties. The relationship of Purchaser and Seller established by
this Agreement is that of independent contractors, and nothing contained herein shall be construed
to (i) give either party any right or authority to create or assume any obligation of any kind on
behalf of the other or (ii) constitute the parties as partners, joint venturers, co-owners or
otherwise as participants in a joint or common undertaking.



     18.3 Third Party Rights. Nothing in this Agreement shall be deemed to create any third party
beneficiary rights in or on behalf of any other person.



     18.4 Entire Agreement. It is the mutual desire and intent of the parties to provide certainty
as to their respective future rights and remedies against each other by defining the extent of
their mutual undertakings as provided herein. The parties have in this Agreement incorporated all
representations, warranties, covenants, commitments and understandings on which they have relied in
entering into this Agreement, and, except as provided for herein, neither party makes any covenant
or other commitment to the other concerning its future action. Accordingly, this Agreement (i)
constitutes the entire agreement and understanding between the parties with respect to the subject
matter hereof and there are no promises, representations, conditions, provisions or terms related
thereto other than those set forth in this Agreement and (ii) supersedes all previous
understandings, agreements and representations between the parties, written or oral. No
modification, change or amendment to this Agreement shall be effective unless in writing signed by
each of the parties hereto.



     18.5 Interpretation. Unless the context of this Agreement otherwise requires, (i) words of
any gender include each other gender; (ii) words using the singular or plural number also include
the plural or singular number, respectively; (iii) the terms “hereof,” “herein,” “hereby,” and
derivative or similar words refer to this entire Agreement; (iv) the terms “Article” and “Section”
refer to the specified Article and Section of this Agreement, and (v) the terms “include,”
“includes,” or “including” shall be deemed to be followed by the words “without limitation” unless
otherwise indicated. Whenever this Agreement refers to a number of days, unless otherwise
specified, such number shall refer to calendar days. The headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning or interpretation of this
Agreement.



     18.6 Notices. All notices and other communications hereunder shall be in writing. All
notices hereunder of an indemnity claim, a Force Majeure Event, default or breach hereunder, or, if
applicable, termination or renewal of the term hereof, or any other notice of any event or
development material to this Agreement taken as a whole, shall be delivered personally, or sent by
national overnight delivery service or postage pre-paid registered or certified U.S. mail, or
facsimile, and shall be deemed given: when delivered, if by personal delivery or overnight
delivery service; five business days after deposit in the U.S. mail, if mailed; or upon receipt of
electronic confirmation of transmission, if sent by facsimile and followed on the same day by
deposit in the U.S. mail. Notice shall be addressed:




 




		
	*  	filed under application for confidential treatment




31









 








REDACTED COPY AS FILED AUGUST 4, 2005




     If to Seller:


Amphastar Pharmaceuticals, Inc.

11570 Sixth Street

Rancho Cucamonga, California 91730

Attention: Chief Financial Officer

Telephone: (909) 980-9484

Fax: (909) 980-8296



     If to Purchaser:


Andrx Pharmaceuticals, Inc.

8151 Peters Road, Fourth Floor

Plantation, Florida 33324

Attention Lawrence Rosenthal, President

Telephone: (954) 382-7608

Fax: (954) 382-7716



     With a copy (which shall not constitute notice) to:


Andrx Corporation

8151 Peters Road, Fourth Floor

Plantation, Florida 33324

Attention: Scott Lodin, Esq.,

                    Executive Vice President and General Counsel

Telephone: (954) 382-7614

Fax: (954) 382-7744


or to such other place as either party may designate by written notice to the other in accordance
with the terms of this Section 18.6.




     18.7 No Waiver. The failure of either party to enforce at any time for any period any
provision hereof shall not be construed to be a waiver of such provision or of the right of such
party thereafter to enforce each such provision, nor shall any single or partial exercise of any
right or remedy hereunder preclude any other or further exercise thereof or the exercise of any
other right or remedy. Subject to any express provisions to the contrary contained herein, the
remedies provided herein are cumulative and not exclusive of any remedies provided at law.



     18.8 Assignment. This Agreement may not be assigned or delegated by either party without the
prior written consent of the other, except that either party may assign or delegate its rights
and/or obligations hereunder to any of its Affiliates, to a successor to all of its business, or to
a successor to that portion of its business which relates to the Product. Subject to the foregoing
and the other terms of this Agreement, this Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.



     18.9 Severability. In the event that any one or more of the terms or provisions (or any part
thereof) contained in this Agreement or in any other instrument referred to herein, shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect pursuant to a final,
non-appealable decision, then to the maximum extent permitted by law, such invalidity, illegality
or




 




		
	*  	filed under application for confidential treatment




32









 








REDACTED COPY AS FILED AUGUST 4, 2005



unenforceability shall not affect any other term or provision of this Agreement or any other
such instrument. Any term or provision of this Agreement that is so held to be invalid, illegal or
unenforceable in any jurisdiction shall, to the extent the economic benefits conferred by this
Agreement to both parties remain substantially unimpaired, not affect the validity, legality or
enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.




     18.10 Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, and all of which together shall constitute one and the same
instrument.



     18.11 Expenses. Each party shall pay all of its own fees and expenses (including all legal,
accounting and other advisory fees) incurred in connection with the negotiation and execution of
this Agreement and the arrangements contemplated hereby.



[SIGNATURE PAGE FOLLOWS]





 




		
	*  	filed under application for confidential treatment




33









 








REDACTED COPY AS FILED AUGUST 4, 2005




     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized respective representatives as of the day and year first above written.



	 	 	 	 	 
	 	 	AMPHASTAR PHARMACEUTICALS, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ DAVID W. NASSIF
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	Name: David W.
Nassif
	 
	 	 	 	 
	 	 	Title: CFO and Senior Vice President of Global
Licensing
	 
	 	 	 	 
	 	 	ANDRX PHARMACEUTICALS, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ LAWRENCE J. ROSENTHAL
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	Name: Lawrence J. Rosenthal
	 
	 	 	 	 
	 	 	Title: President







34