exv10w2



 




Exhibit 10.2


OEM AGREEMENT




This OEM Agreement, (“Agreement”) is made and entered into as of September 22,
2004 (“Effective Date”), by and between Akorn-Strides, LLC, a Delaware limited
liability company having a principal place of business at 2500 Millbrook Drive,
Buffalo Grove, Illinois 60089-4694, United States of America (“A-S”), and
Strides Arcolab Limited, a company organized under the laws of India having a
principal place of business at Strides House, Bilekahalli, Bannerghatta Road,
Bangalore 560 076, India (“Strides”), (each a “Party” and collectively the
“Parties”).




RECITALS




     A. A-S is a new entity formed by Strides and Akorn, Inc., a Louisiana
corporation (“Akorn”), to engage in the development and marketing of generic
drug products;



     B. A-S desires to have Strides assist it in the preparation of ANDAs for
the sale of certain Products by A-S and to manufacture such Products for sale
to A-S exclusively in the Exclusive Market (as those terms are defined below),
and Strides desires to assist A-S in the preparation of ANDAs for the sale of
certain Products by A-S and to manufacture such Products for sale to A-S
exclusively in the United States, pursuant to the terms and conditions of this
Agreement.



NOW, THEREFORE, in consideration of the mutual promises, covenants and
obligations contained herein, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:




ARTICLE 1



DEFINITIONS




          1.1 Act. The term “Act” means the United States Federal Food, Drug, and
Cosmetic Act.



          1.2 Affiliate. The term “Affiliate” means with respect to any Party, any
party controlling, controlled by or under common control with any such Party.
For purposes hereof, “control” and its derivatives means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Party, whether through the ownership of voting
securities or voting interests, by contract or otherwise.



          1.3 Akorn. The term “Akorn” has the meaning ascribed to it in Recital A.



          1.4 ANDA. The term “ANDA” means an abbreviated new drug application filed
with the FDA to provide for the review and ultimate approval of a generic drug
product.



          1.5 ANDA Materials. The term “ANDA Materials” means ANDAs prepared
pursuant to ARTICLE 2 below, and all content thereof, and supporting
documentation and official correspondence related thereto.



 









 





          1.6 ANDA Product. The term “ANDA Product” means a generic drug active
pharmaceutical ingredient in finished dosage form, (injectable, lyophilized,
powder fill, soft gel capsule or tablet), approved by the FDA for sale in the
United States pursuant to an ANDA, but excluding specifically Patent
Challenging Products.



          1.7 ANDA Schedule. The term “ANDA Schedule” has the meaning ascribed to
it in Section 2.1, as may be amended by mutual agreement of the Parties from
time to time.



          1.8 Antidumping Laws. The term “Antidumping Laws” means the United States
antidumping laws set forth in Title VII of the Tariff Act of 1930, as amended
(19 U.S.C. 1673 et seq.).



          1.9 Approved Facility. The term “Approved Facility” means the Strides
facility that is approved in writing by A-S for the manufacturing of Products
under this Agreement.



          1.10 A-S Indemnitees. The term “A-S Indemnitees” has the meaning ascribed
to it in Section 8.1.1.



          1.11 A-S Materials. The term “A-S Materials” means any Property (i) owned
or possessed by A-S as of the Effective Date; (ii) later made, acquired or
developed by A-S during the term of this Agreement; or (iii) that are derived
from materials provided by A-S to Strides, including, but not limited to, any
of the above A-S Materials, A-S Confidential Information and any other
materials provided to Strides in connection with this Agreement.



          1.12 Certificate of Analysis. The term “Certificate of Analysis” means a
certificate of analysis conforming in content and method with the requirements
of the Act.



          1.13 cGMP. The term “cGMP” means current Good Manufacturing Practices as
established by the FDA as the same may be amended from time to time.



          1.14 Components. The term “Components” means raw materials, such as media
and columns, approved in advance by A-S for use in manufacturing of Products
by Strides.



          1.15 Confidential Information. The term “Confidential Information” means
all confidential information of a Party relating to any designs, know-how,
inventions, technical data, ideas, uses, processes, methods, formulae, research
and development activities, work in process, or any scientific, engineering,
manufacturing, marketing, business or financial information relating to the
disclosing Party, its present or future products, sales, suppliers, customers,
employees, investors or business, whether in oral, written, graphic or
electronic form disclosed by the Parties prior to or during this Agreement
(which is marked confidential or acknowledged as being confidential prior to
disclosure). If the Confidential Information is disclosed orally or visually,
it shall be identified as such at the time of disclosure and confirmed in
writing by the disclosing party within thirty (30) days of disclosure.
Confidential Information shall also include any other information in oral,
written, graphic or electronic form which, given the circumstances surrounding
such disclosure, would be considered confidential. This Agreement shall be
deemed Confidential Information.



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          1.16 Cost of Production. The term “Cost of Production” means the cost of
producing a Product, which is the sum of (i) material, fabrication, and other
processing costs; (ii) selling, general, and administrative expenses; and (iii)
the cost of containers and other packing expenses.



          1.17 Derived. The term “Derived” or “derived” means obtained, developed,
created, synthesized, designed, derived or resulting from, based upon or
otherwise generated (whether directly or indirectly, or in whole or in part).



          1.18 Epidemic Failure. The term “Epidemic Failure” means Product
deficiencies resulting from defects in material, workmanship and/or
manufacturing process that are in excess of one percent (1%) of the total
number of Products shipped during any rolling six (6) month period.



          1.19 Exclusive Market. The term “Exclusive Market” means the sale of
Products to United States hospitals, medical clinics, physician groups and
other wholesale drug markets in the United States.



          1.20 FDA. The term “FDA” means the United States Food and Drug
Administration.



          1.21 Forecast. The term “Forecast” is defined in Section 4.2.1.



          1.22 Grandfathered Product. The term “Grandfathered Product” refers to a
generic drug active pharmaceutical ingredient in finished dosage form,
(injectable, lyophilized, powder fill, soft gel capsule or tablet), (i) that
has not had any changes in formulation, dosage form, potency, route of
administration, indication or intended patient population since 1938 and that
thereby does not qualify as a “new drug” under Section 321 of the Act; or (ii)
that has not had any changes in formulation, dosage form, potency, route of
administration, indication or intended patient population since 1962, and that,
prior to 1962, was (X) used or sold commercially in the United States, (Y) not
a new drug as defined by the Act at that time, and (Z) not covered by an
effective application.



          1.23 Insignia. The term “Insignia” means trademarks, trade names, logos,
symbols, badges, labels, decorative designs, packaging designs or similar trade
dress.



          1.24 Intellectual Property Rights. The term “Intellectual Property
Rights” means all United States and worldwide trademarks, service marks, trade
dress, logos, copyrights, rights of authorship, inventions, patents, rights of
inventorship, moral rights, rights of publicity and privacy, trade secrets,
rights under unfair competition and unfair trade practices laws, and all other
intellectual and industrial property rights related thereto.



          1.25 Letter of Credit. The term “Letter of Credit” means an irrevocable
letter of credit in the amount of One Million Two Hundred Fifty Thousand United
States Dollars (US $1,250,000), issued by Strides’ Indian bank, acceptable to
A-S acting reasonably, and confirmed by a United States Bank selected by A-S,
as more fully set forth in Section 3.8.



          1.26 Net Price. The term “Net Price” means the price for Products as
calculated pursuant to Section 4.3.



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          1.27 Non-Exclusive Market. The term “Non-Exclusive Market” means the sale
of Products in United States retail markets direct to consumer or physician and
specifically excluding the Exclusive Market.



          1.28 Normal Value. The term “Normal Value” means, (i) if an adequate
volume of the Product is sold in the country in which the Approved Facility is
located for home consumption, the home market prices; (ii) if home market sales
of the Product do not exist or are too few to provide an adequate comparison,
the price at which the Product is sold for exportation to third countries; or
(iii) if neither home market sales nor third country sales form an adequate
basis of comparison, then normal value is based on the constructed value of the
Products as calculated pursuant to the Antidumping Laws.



          1.29 Patent Challenging Product. The term “Patent Challenging Product”
means a generic drug active pharmaceutical ingredient in finished dosage form,
(injectable, lyophilized, powder fill, soft gel capsule or tablet), approved by
the FDA for sale in the United States pursuant to an ANDA, (i) that specified
brand-name patents that were successfully challenged, or not defended by the
applicable brand-name manufacturer; and (ii) that successfully demonstrated
bioequivalence to the FDA.



          1.30 Products. The term “Products” means those ANDA Products,
Grandfathered Products and Patent Challenging Products set forth on Exhibit A,
attached hereto and incorporated herein, as may be amended by mutual agreement
of the Parties from time to time, to be (i) subject (with the exception for
Grandfathered Products) to an ANDA on behalf of A-S; and (ii) to be
manufactured by Strides pursuant to this Agreement.



          1.31 Product Data. The term “Product Data” means documentation, records,
raw data, specimens, labeling, certificates, specifications, formulae,
procedures, and other work product generated during this Agreement (including
without limitation data relating to the process development, manufacture or
testing of the Products). Notwithstanding anything to the contrary in this
Agreement, all Product Data, but specifically except for ANDA Materials, shall
be deemed Confidential Information of Strides. ANDA Materials shall be deemed
Confidential Information of A-S.



          1.32 Property. The term “Property” means intellectual property or other
property, designs, know-how, inventions, technical data, ideas, uses,
processes, methods, formulae, research and development activities, or any
scientific, engineering, manufacturing, marketing, business or financial
information.



          1.33 Purchase Order. The term “Purchase Order” means an order for
Products which shall specify at least the following: (i) Product quantity;
(ii) delivery date; and (iii) other order terms and conditions as determined by
A-S. Purchase Orders may additionally identify drop shipment destination, and
other matters specific to each separate sale by A-S to a customer.



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          1.34 Registrations. The term “Registrations” means all registrations,
permits, licenses, authorizations, approvals, presentations, notifications or
filings (together with all applications therefor), which are filed with or
granted by the FDA in the United States and with the governing health authority
of any other country, and which are required to develop, make, use, sell,
import or export the Products.



          1.35 Registration Payment. The term “Registration Payment” has the
meaning ascribed to it in Section 2.3.1.



          1.36 Registration Threshold. The term “Registration Threshold” means
collectively: (i) the Approved Facility has received a Satisfactory cGMP
Inspection, which remains current; and (ii) twelve (12) ANDAs for Products
hereunder are submitted to the FDA.



          1.37 Registration Costs. The term “Registration Costs” means all costs
associated with the preparation of the ANDAs set forth in the ANDA Schedule, as
may be amended by mutual agreement of the Parties from time to time.



          1.38 Specifications. The term “Specifications” means the specifications
for each Product as set forth in the applicable ANDA, or in the case of
Grandfathered Products, in the specifications applicable to the original FDA
approved finished dosage form.



          1.39 Strides Capital Contribution Agreements. The term “Strides Capital
Contribution Agreements” means the contribution agreements with respect to the
advances made by A-S to Strides pursuant to Section 3.1B(i)(b) and, to the
extent applicable, Section 3.1B(i)(c) of the Limited Liability Company
Agreement for Akorn-Strides, LLC, of even date between Strides and Akorn.



          1.40 Strides Indemnitees. The term “Strides Indemnitees” has the meaning
ascribed to it in Section 8.2.



          1.41 Strides Materials. The term “Strides Materials” means any Property
(i) owned or possessed by Strides as of the date hereof; or (ii) later made,
acquired or developed by Strides during the term of this Agreement, including
any Property that relates to the ANDA approval process, but, excluding
specifically, (Y) ANDAs prepared pursuant to ARTICLE 2 below, and all content
thereof, and supporting documentation and official correspondence related
thereto; and (Z) any Property derived from materials provided by A-S to
Strides, including, but not limited to, A-S Materials, A-S Confidential
Information and any other materials provided to Strides in connection with this
Agreement.



          1.42 Satisfactory cGMP Inspection. The term “Satisfactory cGMP
Inspection” means a cMGP inspection conducted by the FDA with respect to the
Approved Facility during which (1) no objectionable conditions or practices
were found; or (2) objectionable conditions were found, but corrective action
is left to Strides to take voluntarily and the objectionable conditions do not
justify further administrative or regulatory actions.



          1.43 Term. The term “Term” is defined in Section 9.1.



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          1.44 Territory. The term “Territory” means the territory and possessions
of the United States of America.



          1.45 Threshold Period. The term “Threshold Period” means has the meaning
ascribed to it in Section 3.8.1.



ARTICLE 2



ANDA PROCESS




          2.1 Application Schedule. The Parties will mutually develop a schedule for
the preparation, filing and prosecution ANDAs for the Products, as applicable
pursuant to this Agreement, containing for each Product, timelines, milestones,
and corresponding estimated Registration Costs, which, when mutually accepted
by both Parties in writing, will be attached to this Agreement as Exhibit B as
provided below (“ANDA Schedule”). Notwithstanding anything else to the
contrary, Strides shall use its best efforts to achieve the Registration
Threshold within twelve (12) months from the Effective Date.



          2.2 Changes in ANDA Schedule. A-S shall have the right to make any
changes or modifications to a ANDA Schedule by submitting a change request in
writing. Strides shall promptly implement all such changes or modifications
after they are received from A-S.



          2.3 Funding of Registration Costs.



               2.3.1 Provided that Strides delivers to A-S the Letter of Credit, A-S
shall pay Strides the amount of Two Million Five Hundred Thousand United States
Dollars ($2,500,000) as a payment for Registration Costs (“Registration
Payment”). Strides shall apply and allocate the Registration Payment to the
Registration Costs budgeted in the ANDA Schedule. Upon exhaustion of the
Registration Payment, A-S shall provide Strides with the unpaid remaining
Registration Costs corresponding to the timeline and budgeted amounts set forth
in the ANDA Schedule.



               2.3.2 A-S may, in it sole discretion, and solely to the extent that
additional capital contributions for such purpose are made to A-S by its
members pursuant to Section 5.3A of the Limited Liability Company Agreement for
Akorn-Strides, LLC, of even date between Strides and Akorn, pay Strides an
additional amount of up to Two Million Five Hundred Thousand United States
Dollars ($2,500,000) as a further payment for additional Registration Costs.
Any such further amounts paid under this Section 2.3.2 shall also be deemed
part of the Registration Payment.



          2.4 Product Registrations. A-S shall have the exclusive right to file,
prosecute, seek and obtain all applicable Registrations for Products in the
Territory. Strides shall prepare all information required to allow A-S to
file, prosecute, seek and obtain all applicable Registrations for each Product
in the Territory, including, but not limited to an ANDA, in A-S’ name, within
the time frame mutually agreed by A-S and Strides. Strides shall provide all
required information and documentation, including, but not limited to, a
Chemistry Manufacturing Controls (CMC) section in a format acceptable to the
FDA, and otherwise cooperate as requested by A-S in support of any regulatory
application related to a Product, as part of Strides’ obligations pursuant to
the receipt of Registration Costs paid by A-S. Any such application



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related to the Product shall be the sole and exclusive property of A-S. If
requested by A-S and at the sole cost and expense of A-S, Strides shall file
any required amendments to such application to allow manufacturing of the
Product in its facility. Any such applicable Registration related to the
Product in the Territory shall be the sole and exclusive property of A-S. A-S
shall file any required amendments to such application to allow manufacturing
of the Product in the Approved Facility. Each Party shall reasonably cooperate
with the other Party (including without limitation, providing all reasonably
necessary information in its possession, taking all reasonably necessary
actions and executing all reasonably necessary instruments) in connection with
the preparation, filing, prosecution, seeking and obtaining the Registrations.




          2.5 Representatives. Upon execution of this Agreement, Strides and A-S
shall each select one (1) program manager who will be responsible for directing
and overseeing all activities regarding this Agreement and for transmitting and
receiving all communications regarding this Agreement on behalf of its
respective company. Each Party may change its designated program manager at
any time effective upon providing written notice to the other Party.



ARTICLE 3



COVENANTS




          3.1 Strides’ Manufacture.



               3.1.1 Strides shall not commence manufacturing of any Products hereunder
until (i) the Approved Facility shall have received a Satisfactory cGMP
Inspection; and (ii) the Product, except for Grandfathered Products, has been
approved by the FDA for sale in the United States pursuant to an ANDA.



               3.1.2 Strides shall manufacture and sell to A-S the Products ordered by
A-S or its Affiliates under Purchase Orders. No independent contractors shall
be used by Strides to manufacture the Products without A-S’ approval. Strides
shall manufacture all Products under this Agreement in conformity with the
applicable Specifications. Strides will only purchase Components and other raw
materials through vendors approved by the FDA pursuant to the cGMP approval for
the applicable Product.



               3.1.3 Strides’ manufacture shall conform to the requirements of all (i)
applicable laws, regulations and ordinances of any government, agency or public
authority having jurisdiction over the manufacture and delivery of Products in
the country where the Approved Facility is located; (ii) applicable United
States federal and state laws and regulations including, but not limited to,
the Fair Labor Standards Act of 1938 and all applicable Department of Labor
regulations, local and municipal ordinances and the regulations of any agency
or public authority having jurisdiction over the manufacture and delivery of
Products; and (iii) in accordance with cGMP and all applicable laws and
regulations in the United States.



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          3.2 Exclusive Supply. Subject to the terms and conditions of this
Agreement, Strides shall manufacture and supply A-S with the Products during
the term of this Agreement. Strides shall not sell Products to any other party
in the Territory that Strides knows or has reason to know is intending to sell,
market or distribute such Products in the Exclusive Market. Any supply
agreement with such other parties in the Territory shall prohibit any sales of
the Products in the Exclusive Market. Strides shall be permitted to sell
Products to any other party in the Territory provided that Strides knows that
such party is intending to sell, market or distribute such Products in the
Non-Exclusive Market only.



          3.3 Notifications.



               3.3.1 Each Party shall promptly advise the other of any safety or toxicity
problem of which either Party becomes aware regarding any Product.



               3.3.2 Strides will, within three (3) business days following notification
to Strides, inform A-S in the event of any FDA or other regulatory inspection
relating to any Product and will immediately notify A-S in writing of any
adverse event relating to a Product.



          3.4 Custody of A-S Materials. In connection with this Agreement, the
Parties agree that Strides will have custody over certain A-S Materials. It is
understood that such A-S Materials is held in trust by Strides for A-S, and
that all such materials will be clearly labeled as belonging to A-S, and that
Strides shall bear the risk of loss for any A-S Materials during the time that
such A-S Materials is in the possession of Strides.



          3.5 Recalls. Each Party promptly shall notify the other if any Product or
device manufactured from Product, is alleged or proven to be the subject of a
recall, market withdrawal or correction. A-S shall be responsible for
coordinating any recall, market withdrawal or field correction of Product, at
the sole cost of Strides. A-S shall provide Strides with a copy of all
documents relating to such recall, market withdrawal or field correction at
Strides’ sole cost and expense. Strides shall cooperate with A-S (including
providing A-S with all data, information and documents requested by A-S) in
connection with such recall, market withdrawal or field correction, at Strides’
sole cost and expense. Strides will bear all reasonable costs associated with
(A) such recall, market withdrawal or field correction (including, but not
limited to costs associated with receiving and administering the recalled
Product and notification of the recall to those persons whom A-S deems
appropriate); and (B) replacement of such recalled Product.



          3.6 Right Of Access/ Inspections. Strides acknowledges that it is
essential for A-S to have periodic access to each Approved Facility for the
purpose of conducting inspections and/or audits under this Agreement,
including, without limitation, audits of Strides’ compliance with cGMPs and
with environmental and other laws. Strides shall make available to A-S all
Product Data, equipment, and facilities relating to this Agreement upon A-S’
request with five (5) days advance notice for inspection by A-S, its
representatives, including authorized third party consultants, or the FDA, at
any time commencing on the Effective Date and expiring on the later of (a) six
months after manufacture of the last Product, or (b) as long as a Product is in
use or undergoing clinical trials, provided that A-S notifies Strides on a
yearly basis that a Product is still undergoing clinical trials. A-S shall
have the right to access the Approved Facility, and all applicable records
related thereto, to oversee production of a Product, to discuss and inspect its



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manufacturing processes, and to test the Products and review Strides’
records, provided that the Approved Facility or other client projects are not
unreasonably disrupted during the inspection. If A-S observes or discovers
variances from established standards and methods of production of Products, A-S
shall give written notice thereof to Strides, and upon receipt of any such
notice, Strides promptly shall take all appropriate remedial or corrective
action and give written notice to A-S describing in reasonable detail such
actions taken. If Strides disagrees with any such advice and direction, the
parties shall discuss in good faith an appropriate resolution. Notwithstanding
anything else to the contrary, any such inspections/audits and any testing done
by A-S during them, will not relieve Strides of liability for Products later
found to be defective or for Strides’ failure to meet its obligations under
this Agreement.




          3.7 Interference with Employees. Neither Party shall during the Term and
for a period of twelve (12) months thereafter, directly or indirectly (i)
induce or attempt to induce any employee of the other Party to quit employment
with such other Party; (ii) otherwise interfere with or disrupt the
relationships between the other Party and its employees; (iii) solicit any
employee of the other Party. Notwithstanding the previous sentence, a general
solicitation not specifically targeted at the other Party’s employees shall not
be a breach of the this Section 3.7.



          3.8 Letter of Credit.



               3.8.1 The Letter of Credit shall be opened within five (5) days from the
Effective Date and shall have an initial term of one year and six months. All
bank charges in respect of the Letter of Credit are for the account of Strides.
The Letter of Credit shall provide for payment of the entire Letter of Credit
amount, or One Million Two Hundred Fifty Thousand United States Dollars (US
$1,250,000), to A-S in the event that Strides fails to achieve the
Registration Threshold prior to the lapse of the period beginning with the
Effective Date and ending on the one year anniversary thereof (“Threshold
Period”), and fails to cure such failure within ninety (90) days thereafter.



               3.8.2 Should Strides fail to achieve the Registration Threshold prior to
the lapse of the Threshold Period then A-S may, in its sole discretion, without
notice to Strides, elect to (i) receive payment of the entire Letter of Credit
amount should Strides’ failure to achieve the Registration Threshold not be
cured within ninety (90) days following the lapse of the Threshold Period, or
(ii) negotiate an extension of the Threshold Period with Strides, pursuant to
Section 3.8.3 below, provided that, should the Parties fail to agree in writing
on the terms of such an extension, A-S shall receive payment of the entire
Letter of Credit amount should Strides’ failure to achieve the Registration
Threshold not be cured within ninety (90) days following the lapse of the
Threshold Period.



               3.8.3 Should A-S, in its sole discretion, elect to negotiate an extension
of the Threshold Period, as provided above, then the Parties shall negotiate in
good faith the terms of such an extension, provided that, the term of the
Letter of Credit shall be extended to extend at least six (6) months following
the lapse of the new Threshold Period or a new acceptable Letter of Credit
shall be issued with a term to extend at least six (6) months following the
lapse of the new Threshold Period. The extended Letter of Credit, or
replacement Letter of Credit, as the case may be, shall provide for payment of
the entire Letter of Credit amount, or One Million Two Hundred Fifty Thousand
United States Dollars (US $1,250,000), to A-S in the event that



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Strides fails to achieve the Registration Threshold prior to the lapse of
the new Threshold Period, as extended hereby, and fails to cure such failure
within ninety (90) days thereafter. All provisions of this Section 3.8 shall
continue apply in the same manner to the extent that the Threshold Period is
extended hereby.




               3.8.4 The receipt by A-S of funds pursuant to the Letter of Credit shall
not act as a waiver of A-S’ other legal and equitable remedies against Strides
or other third parties, and A-S hereby reserves all rights to such other legal
and equitable remedies.



               3.8.5 Upon Strides’ achieving the Registration Threshold within the
Threshold Period, as such period may be extended pursuant to this Section 3.8,
or within the ninety (90) day cure period provided above, A-S shall return the
Letter of Credit to Strides and Strides shall be permitted to terminate the
Letter of Credit.



ARTICLE 4



PURCHASE OF PRODUCTS




          4.1 Purchase Order.



               4.1.1 This Agreement applies to all Purchase Orders that A-S, and/or any
of its current or future Affiliates, may place with Strides for the purchase of
Products. In this ARTICLE 4 and throughout this Agreement where A-S’ rights
with respect to Products are reference, “A-S” will include A-S’ Affiliates,
other than Strides or Strides’ other Affiliates. The terms and conditions of
this Agreement including those presented in all exhibits hereto shall apply to
any Purchase Order, regardless of whether this Agreement or its terms and
conditions are expressly referenced in that Purchase Order. No inconsistent or
additional term or condition in any Purchase Order or any acknowledgment or
sale document from Strides shall be applicable to orders for Products placed by
A-S during the Term, unless expressly agreed to by the Parties in writing.



               4.1.2 Strides shall acknowledge all Purchase Orders in writing to A-S.



               4.1.3 Strides shall be deemed to have accepted any Purchase Order: (a)
issued pursuant to this Agreement that does not exceed the current Forecast for
the then-current month; or (b) for which Strides does not notify A-S in writing
within one (1) business day after its receipt that Strides cannot meet the
Purchase Order’s terms.



          4.2 Forecasts.



               4.2.1 Each month during the Term, A-S will provide Strides with a twelve
(12) month rolling forecast (“Forecast”) estimating its monthly requirements
for purchases of Products for the subsequent twelve (12) calendar month period.



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               4.2.2 The Forecast is submitted solely to assist Strides in ensuring that
it has adequate Components, capacity and supplies to meet Purchase Orders that
may be issued pursuant to the Forecast. Notwithstanding anything else to the
contrary, A-S will not be obligated to purchase any amounts of Products set
forth in each Forecast. A-S shall use commercially reasonable efforts to issue
a new twelve (12) month Forecast by the first business day of each calendar
month.



               4.2.3 Unless Strides notifies A-S in writing within five (5) calendar days
after receipt of a Forecast that it will not be able to supply the amount of
Products specified in the Forecast, Strides shall be obligated to provide the
quantity of Products consistent with the Forecast upon receipt of A-S’ Purchase
Orders, and will be deemed to have warranted that it has the manufacturing
capacity to supply the Products in accordance with the Forecast. Strides will
at all times maintain a two-month inventory of Components based on A-S’
Forecasts.



          4.3 Pricing. A-S’s purchase price for a Product shall be calculated in
advance prior to A-S placing the first Purchase Orders therefor, pursuant to
this Section 4.3 (“Net Price”). The Net Price for a Product, in each case,
shall be calculated by the Parties as that dollar amount that is the greater of
(i) the Product’s Cost of Production; or (ii) the Product’s Normal Value; or
(iii) a price that would permit A-S to achieve gross margins in its resale and
distribution of the Products, as calculated using United States GAAP and as
measured against the average wholesale pricing of bioequivalent products in the
Territory as the baseline in each case, in the following ranges: (X) ANDA
Products 45-50% gross margin; (Y) Grandfathered Products 30-35% gross margin;
and (Z) Patent Challenging Products 55-60% gross margin. Notwithstanding
anything to the contrary in the prior sentence, the price as calculated under
clause (iii) therein, to the extent it is applicable, shall be adjusted in each
case so that it is not less than the Product’s material, fabrication, and other
processing costs plus twenty percent (20%). The Parties will mutually agree to
the dollar amount of the Net Price for each Product according to this Section
4.3 and such Net Price will remain effective until and unless revised as
necessary to continue to meet the above Net Price calculation test.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY, A-S IS FREE TO ESTABLISH ITS OWN
PRICING FOR SALE OF THE PRODUCTS IN THE TERRITORY.



          4.4 Stamp Duty. All duties and charges, including stamp duty or state
government levy, in the country in which the Approved Facility is located and
in the Territory, in respect of or under the Agreement, including any duties,
taxes, VATs or similar charges arising with respect to the manufacture, sale,
shipment and delivery of Products by Strides to A-S, shall be borne and paid by
Strides.



          4.5 Cancellation Of Purchase Orders. All A-S Purchase Orders are firm
orders and once accepted by Strides may not be cancelled by A-S without
Strides’ approval. Any cancellation of accepted Purchase Orders may include
Strides’ reasonable cancellation charges which shall be communicated to A-S in
advance of canceling the Purchase Order and must be approved by A-S. A-S
retains the right to rescind any request to cancel an accepted Purchase if it
does not accept Strides’ cancellation charges.



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          4.6 Rescheduling. A-S may reschedule delivery under a Purchase Order from
its originally scheduled ship date provided that it so informs Strides on or
before the scheduled shipment date stated in the applicable Purchase Order
without any rescheduling or any other charges. Notwithstanding the previous
sentence, A-S shall remain obligated to pay for such rescheduled shipment as if
it had shipped on the originally scheduled shipment date. Any rescheduling
shall not exceed sixty (60) calendar days from the originally scheduled
shipment date without Strides’ prior written approval.



          4.7 Packing and Cartage. All Products ordered by A-S shall be packed for
shipment and storage in accordance with applicable requirements of the Act and
A-S’ instructions. No charge will be allowed for packing, boxing, or cartage,
unless agreed upon at the time of purchase and set forth in the Purchase Order.
Damage to any Products due to packing or cartage will be charged to Strides.
A-S’ order number, part number and quantity shipped shall be marked or tagged
on each package and bill of lading.



          4.8 Shipment.



               4.8.1 Strides shall ship the Products to A-S or drop ship the Products to
A-S’ customers, as set forth in the respective Purchase Orders. Strides shall
deliver Products into the possession of a common carrier designated by A-S.
All Products shall be shipped and delivered CIP A-S’ delivery point (2000
Incoterms). Title to and risk of loss shall pass pursuant to CIP A-S’ delivery
point (2000 Incoterms).



               4.8.2 Upon learning of any potential delivery delays, Strides shall notify
A-S as to the cause of such delays and the actions taken by Strides to resolve
such delays. If Strides fails to make deliveries at the specified time and
such failure is caused by Strides, Strides shall, at no additional cost to A-S,
employ accelerated measures such as material expediting fees, premium
transportation costs, or labor overtime required to meet the specified delivery
schedule or minimize the lateness of deliveries.



          4.9 Payment.



               4.9.1 All A-S Purchase Orders accepted by Strides and Strides’ invoice
therefor shall be paid as follows: (i) (Y) Until all of Strides’ obligations
under the Strides Capital Contribution Agreements are fully satisfied, thirty
five percent (35%) of the amount due by A-S shall be applied as a payment
against Strides’ obligations under the Strides Capital Contribution Agreements
on the date of Strides’ acceptance of the Purchase Order, pursuant to the terms
of the Strides Capital Contribution Agreements; or (Z) Upon satisfaction of
Strides’ obligations under the Strides Capital Contribution Agreements, thirty
five percent (35%) of the amount due by A-S shall be due and payable within
thirty (30) calendar days of Strides’ acceptance of the applicable Purchase
Order; and (ii) the remaining sixty five percent (65%) shall be due and payable
within sixty (60) calendar days after the shipment date for the applicable
Products. A-S shall accept all A-S invoices, not subject to a good faith
dispute, on presentment by Strides.



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               4.9.2 The price for any Products includes the cost of Strides’ usual
packing of good quality so as to sustain (without damages) normal international
air and/or vessel transportation to the Territory and domestic air and/or motor
freight transportation in the Territory to the point of delivery.



ARTICLE 5



DELIVERY AND ACCEPTANCE




          5.1 Deliveries. Failure to deliver Products of the quality and quantity
and by the scheduled shipment date stated in the applicable Purchase Order
shall, at the option of A-S, relieve it of any obligation to accept and pay for
such Products as well as any undelivered shipments if there be any. Any
failure by A-S to exercise its option with respect to any shipment of Products
shall not be deemed to constitute a waiver with respect to subsequent
shipments.



          5.2 Acceptance of Product. Strides will provide A-S with a Certificate of
Analysis required for A-S to determine if a Product meets its applicable
Specifications. A-S will examine such information for compliance with the
Specifications. A-S may reject a Product lot if the lot does not meet
Specifications. A-S shall notify Strides in writing of particular
deficiencies, including any defects in the Products or of any failure of the
Products to comply with their respective Specifications, during the inspection
period which period shall be sixty (60) calendar days immediately following
receipt of the shipment from Strides. Failure to give notice of or
particularize the defects or non-compliance within the sixty (60) calendar day
inspection period shall constitute A-S’ acceptance of such Products. In the
event that A-S rejects a Product lot, then, to the extent that payment therefor
has not been made by A-S, all applicable invoices shall be cancelled by Strides
and no further payment with respect to such shipment shall be due from A-S, and
to the extent payment has already been made, A-S shall be entitled to the
remedies provided under Section 7.2 below.



ARTICLE 6



INTELLECTUAL PROPERTY




          6.1 A-S’ Property Rights.



               6.1.1 A-S shall solely own and have exclusive worldwide right, title and
interest in and to A-S Materials, to all modifications, enhancements and
derivative works thereof, and to all Intellectual Property Rights related
thereto. Strides acknowledges and agrees that title to the A-S Materials shall
always remain with A-S, and that Strides shall not acquire any interest
therein. Strides shall not challenge, contest or otherwise impair A-S’s
ownership of the A-S Materials or the validity or enforceability of A-S’s
Intellectual Property Rights related thereto.



               6.1.2 A-S may disclose, from time to time during the term of this
Agreement, A-S Materials to Strides pursuant to the terms of this Agreement.
All United States rights to ANDA Materials, whether developed solely by A-S or
resulting from the Parties’ joint cooperation, and all modifications,
enhancements and derivative works of the A-S Materials, whether developed
solely by A-S or resulting from the parties’ discussions or joint activities,
belong solely to A-S, and A-S shall retain all Intellectual Property Rights
thereto. As additional consideration for the favorable provisions of this
Agreement, Strides shall assign and hereby



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assigns and conveys to A-S from the moment of creation all of Strides’
United States right, title and interest in and to such ANDA Materials and all
worldwide right, title and interest in and to such modifications, enhancements
and derivative works of the A-S Materials, to all enhancements, improvements
and derivatives thereof, and to all Intellectual Property Rights therein.




          6.2 Strides’ Property Rights. Strides shall solely own and have exclusive
worldwide right, title and interest in and to the Strides Materials, to all
modifications, enhancements and derivative works thereof, (except for United
States rights to ANDA Materials), and to all Intellectual Property Rights
related thereto. A-S acknowledges and agrees that title to the Strides
Materials shall always remain with Strides, and that A-S shall not acquire any
interest therein. A-S shall not challenge, contest or otherwise impair
Strides’ ownership of the Strides Materials or the validity or enforceability
of Strides’ Intellectual Property Rights related thereto.



          6.3 Insignia.



               6.3.1 The Parties do hereby agree that certain Insignia of each of them
will be affixed to the Products and related sales brochures, marketing
materials, and packaging as will be mutually agreed upon in writing by the
Parties. All uses of the Parties’ Insignia shall only be pursuant to this
Section 6.3.3, the uses as attached and incorporated to this Agreement per
Exhibit C, attached hereto and fully incorporated herein, and any further
written agreement of the Parties with respect to each specific use.



               6.3.2 Effective only upon the written agreement of the Parties with
respect to the specific use and all particulars regarding such use with the
Products, A-S grants to Strides during the Term a non-exclusive,
non-transferable, non-assignable, indivisible, revocable and terminable
license, without the right to sublicense, to use the A-S Insignia as set forth
in the applicable written agreement between the Parties, but only to the extent
necessary to label and brand the Products and related sales brochures,
marketing materials, and packaging as mutually agreed upon by the Parties in
such written agreement, and for no other purposes. Such A-S Insignia will not
be affixed, used, or otherwise displayed on the Products or in connection
therewith without the prior written approval of A-S.



               6.3.3 Effective only upon the written agreement of the Parties with
respect to the specific use and all particulars regarding such use with the
Products, Strides grants to A-S during the Term a non-exclusive,
non-transferable, non-assignable, indivisible, revocable and terminable
license, without the right to sublicense, to use the Strides Insignia as set
forth in the applicable written agreement between the Parties, but only to the
extent necessary to label and brand the Products and related sales brochures,
marketing materials, and packaging as mutually agreed upon by the Parties in
such written agreement, and for no other purposes. Such Strides Insignia will
not be affixed, used, or otherwise displayed on the Products or in connection
therewith without the prior written approval of Strides.



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               6.3.4 Notwithstanding any of the provisions of this Agreement, the Parties
shall not at any time do anything or act in any way that would or might
adversely affect the value or validity of any Insignia or other intellectual
property belonging to the respective Party. Each Party shall immediately
notify the other in writing upon becoming aware of any intellectual property
infringement or imitation of any intellectual property of A-S or Strides or of
any facts that either Party believes might constitute infringement or
imitation. All uses of a Party’s Insignia shall inure exclusively to such
Party’s sole benefit.



          6.4 Confidentiality. Each Party (i) shall keep the other Party’s
Confidential Information confidential and shall not directly or indirectly,
use, divulge, publish or otherwise disclose or allow to be disclosed any aspect
of such other Party’s Confidential Information, except with the other Party’s
prior written consent and as specifically permitted by this Agreement; and (ii)
shall refrain from any action or conduct which might reasonably or foreseeably
be expected to compromise the confidentiality or proprietary nature of
Confidential Information. Upon request, each of the Parties shall immediately
return to the other the originals and all copies of any Confidential
Information of the other Party. The obligations and restrictions set forth in
this Section 6.4 shall not apply to any Confidential Information that falls
within any of the following exceptions, provided the receiving party produces
credible written evidence to establish that such information:



               6.4.1 is or becomes part of the public domain without breach of this
Agreement by a receiving Party;



               6.4.2 is independently developed by or for a receiving Party completely
apart from the disclosures hereunder;



               6.4.3 is received from a third party who lawfully acquires such
information without restriction, and without breach of this Agreement by a
receiving Party;



               6.4.4 was in a receiving Party’s possession prior to the disclosure by the
other Party; and/or



               6.4.5 is released pursuant to a binding court order or government
regulation, provided that the receiving Party delivers a copy of such order or
action to the other Party and cooperates with the other Party if it elects to
contest such disclosure.



          If a receiving Party wishes to rely on any of the exceptions contained
above, then such receiving Party must demonstrate to the other Party’s
satisfaction the facts underlying why the exception applies within thirty (30)
calendar days of the occurrence of the facts establishing such exception.



ARTICLE 7



WARRANTIES




          7.1 Strides Representations and Warranties. Strides represents, warrants
and covenants: (i) that it has the full power, right and authority to execute
and deliver this Agreement and that it shall use commercially reasonable best
efforts to perform its obligations hereunder; (ii) that it will assign to its
performance of this Agreement professional personnel, qualified to



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perform the process procedures consistent with the technical requirements
of this Agreement; (iii) that none of the Strides personnel to be assigned to
this Agreement have or shall have been subject to debarment under the United
States Generic Drug Enforcement Act or any other penalty or sanction by the
FDA; (iv) that it will manufacture the Products in conformity with cGMP, all
applicable FDA regulatory requirements, the procedures and parameters set forth
in this Agreement and generally accepted professional standards; and (v) that
all Product Data will be prepared in accordance with cGMP and all applicable
FDA regulatory requirements.




          7.2 Product Warranties. Strides represents, warrants and covenants: (i)
that the Products shall be free from defects in workmanship and materials; (ii)
that the Products shall meet their applicable Specifications; and (iii) that,
upon delivery of a Product and during such time as such Product was under
Strides’ control, the Product will be in conformity with the Act and shall not
be adulterated, misbranded, misused, contaminated, tampered with or otherwise
altered, mishandled, or subjected to negligence. Strides additionally warrants
that the Products supplied hereunder shall only be built using Components
purchased from vendors approved by the FDA pursuant to cGMP. In the event of a
breach under this Section 7.2, A-S may, at its sole option, (a) replace the
Products, at Strides’ cost, (b) require that the Products be replaced by
Strides, at Strides’ cost, and Strides shall replace such Products, or (c) A-S
may return all of the Products to Strides for a full refund or full credit to
the applicable open invoice, and Strides shall immediately pay A-S a full
refund or credit the applicable open invoice, as the case may be, for such
returned Products. Strides shall maintain a sufficient inventory of Components
to fulfill its warranty obligations hereunder, as well as for other foreseeable
purposes.



          7.3 Epidemic Failure Warranty. Notwithstanding anything else to the
contrary herein, if a Product demonstrates an Epidemic Failure at any time
during the Term, Strides will, in addition to the remedies provided under
Section 7.2, reimburse A-S for direct and incidental and consequential costs,
as defined in Section 2715 of the California Commercial Code, associated with
the Epidemic Failure, including without limitation labor costs associated with
implementation of a recovery plan under this Section. A-S will notify Strides
whenever an Epidemic Failure is identified or suspected and work with Strides
to develop a recovery plan, which may include a preventative action plan if
appropriate under the circumstances. The recovery plan actually implemented by
A-S is in A-S’ sole discretion; provided, however that (i) A-S and Strides will
work together to minimize costs associated with A-S’ recovery plan as much as
possible without compromising A-S’ ability to aggressively respond to its
customer’s needs; and (ii) Strides will reimburse A-S for costs incurred by A-S
in implementing that portion of the recovery plan associated with the Epidemic
Failure.



          7.4 Infringement Warranty. Strides warrants that (a) None of the Products
nor any of their elements, nor the use thereof, nor any of Strides
manufacturing processes or methods employed or to be employed at the Approved
Facility violate or will violate or infringe upon the Intellectual Property
Rights of any third party; and (b) there is neither pending nor threatened any
claim, litigation or proceeding in any way contesting Strides’ rights to
manufacture or supply any of the Products or attacking the validity or
enforcement of any Strides Intellectual Property Rights related to its
manufacturing processes or methods employed or to be employed at the Approved
Facility.



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ARTICLE 8



INDEMNIFICATION




          8.1 Strides Indemnification Obligations.



               8.1.1 Strides shall indemnify, defend and hold harmless A-S, and its
Affiliates, and their respective officers, directors, shareholders, employees,
agents and representatives (collectively “A-S Indemnitees”) against all
damages, claims, liabilities, losses and other expenses, including without
limitation reasonable attorneys’ fees and costs, whether or not a lawsuit or
other proceeding is filed, that arise out of or relate to (i) any dispute or
claim that the Strides Materials incorporated or to be incorporated in the
Products, the Products, or any Strides manufacturing processes or methods
employed or to be employed at the Approved Facility, infringe or violate any
third party’s Intellectual Property Rights; (ii) product liability claims,
injury to or death of persons or damage to property that may have been caused,
or that may be alleged to have been caused, directly or indirectly, by Strides,
the Strides Materials incorporated or to be incorporated in the Products, the
Products, or any Strides manufacturing processes or methods employed or to be
employed at the Approved Facility, Strides’ employees or agents, or Strides’
affiliates, subcontractors, their employees or agents; (iii) any defect in the
Products, their manufacture, or other failure of the Products to comply with
their respective Specifications, including, but not limited to, any costs
associated with Product recalls; (iv) any negligent act or omission of Strides,
its agents, or subcontractors; (v) a breach of any warranty provided by Strides
under this Agreement; or (vi) Strides’ failure to fully conform to all laws,
ordinances, rules and regulations which affect the Products, their use, or any
part thereof. In the event Strides fails to promptly indemnify and defend such
claims and/or pay A-S’ expenses, as provided above, A-S shall have the right to
defend itself and shall have the right to withhold any further payments due to
Strides under this Agreement, and in that case, Strides shall reimburse A-S
Indemnitees for all of their reasonable attorneys’ fees, costs and damages
incurred in settling or defending such claims within thirty (30) calendar days
of each of A-S’ written requests, provided that any settlement shall only be
with Strides’ prior written approval.



          8.2 A-S’ Indemnification Obligations. A-S shall indemnify, defend and
hold harmless Strides, and its affiliates, and their respective officers,
directors, shareholders, employees, agents and representatives (collectively
“Strides Indemnitees”) against all damages, claims, liabilities, losses and
other expenses, including without limitation reasonable attorneys’ fees and
costs, whether or not a lawsuit or other proceeding is filed, that arise out of
or relate to any negligent act or omission of A-S, its agents, or Affiliates.
In the event A-S fails to promptly indemnify and defend such claims and/or pay
Strides’ expenses, as provided above, Strides shall have the right to defend
itself, and in that case, A-S shall reimburse Strides Indemnitees for all of
their reasonable attorneys’ fees, costs and damages incurred in settling or
defending such claims within thirty (30) calendar days of each of Strides’
written requests, provided that any settlement shall only be with A-S’ prior
written approval.



          8.3 Contrary Intention. The foregoing indemnities shall be payment
obligations and not merely reimbursement obligations, it being understood that
Strides and A-S have a “contrary intention” with respect to the provisions of
paragraph 2 of Section 2778 of the California Civil Code.



17









 





          8.4 Insurance.



               8.4.1 Each Party shall obtain, at its expense, property, commercial and
liability insurance covering its obligations hereunder, in each case in amounts
appropriate to the conduct of its business, as determined in its sole and
exclusive judgment. The policies of insurance obtained by the Parties
hereunder must state that the insurer shall notify the other Party at least
thirty (30) days prior to termination, cancellation of, or any material change
in, the coverage provided. Each Party shall make available to the other Party
at such other Party’s request certificates of insurance evidencing satisfaction
of its obligations under this Section 8.4.



               8.4.2 Notwithstanding anything to the contrary in Section 8.4.1, A-S shall
obtain at its sole cost product liability insurance with a United States
insurance company with a Best’s rating of A+ to cover the sale and use of
Products in the United States. A-S’ policy of product liability and the
coverage that it provides shall not affect Strides’ indemnification obligations
hereinabove or any applicable insurer’s rights of subrogation against Strides
for an indemnifiable loss. Notwithstanding anything herein contained to the
contrary, A-S reserves all rights of subrogation or recovery against Strides
for any insurance deductible and for any damage or loss to its property that is
indemnifiable by Strides under Section 8.1, regardless of whether such losses
are covered by the product liability insurance obtained or which should be or
have been obtained pursuant to this Agreement.



          8.5 Limitation of Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY
HEREIN, (I) EXCEPT FOR INDEMNIFICATION OBLIGATIONS PURSUANT TO SECTIONS 8.1 AND
8.2 ABOVE, OR (II) STRIDES’ OBLIGATION TO REIMBURSE A-S FOR ALL INCIDENTAL AND
CONSEQUENTIAL COSTS, AS DEFINED IN SECTION 2715 OF THE CALIFORNIA COMMERCIAL
CODE, IN THE CASE OF AN EPIDEMIC FAILURE, NEITHER PARTY SHALL BE LIABLE FOR ANY
INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES, WHETHER
FORESEEABLE OR NOT, THAT ARE IN ANY WAY RELATED TO THIS AGREEMENT. A-S AND
STRIDES FURTHER AGREE THAT EACH AND EVERY PROVISION OF THIS AGREEMENT THAT
PROVIDES FOR A LIMITATION OF LIABILITY, DISCLAIMER OF WARRANTIES OR EXCLUSION
OF DAMAGES IS EXPRESSLY INTENDED TO BE SEVERABLE AND INDEPENDENT OF ANY OTHER
PROVISION SINCE THOSE PROVISIONS REPRESENT SEPARATE ELEMENTS OF RISK ALLOCATION
BETWEEN THE PARTIES AND SHALL BE SEPARATELY ENFORCED.



ARTICLE 9



TERM AND TERMINATION




          9.1 Term. This Agreement shall commence on the Effective Date and shall
continue for a period of ten (10) years, unless earlier terminated under
Section 9.3 (the “Term”). The Term shall also include any renewal term
pursuant to Section 9.2 below.



          9.2 Renewal Term. The Parties may renew this Agreement for successive
five (5) year terms upon their mutual written agreement prior to the lapse of
the initial ten (10) year term, and thereafter, prior to the lapse of the
then-current five (5) year renewal term, by giving the other Party a six (6)
month prior written notice in each such case.



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          9.3 Termination Procedures. This Agreement will terminate in the event of
any of the following:



               9.3.1 On the sixtieth (60th) calendar day after either Party gives written
notice to the other of a material breach by the other of any term or condition
of this Agreement, unless the breach is cured before the sixtieth (60th)
calendar day; or



               9.3.2 Immediately upon the written agreement of both Parties to terminate
this Agreement; or



               9.3.3 Immediately upon the termination of the Limited Liability Company
Agreement for Akorn-Strides, LLC, of even date between Strides and Akorn.



          9.4 Effect of Termination.



               9.4.1 In the event of termination (a) all licenses to Insignia shall
automatically terminate; (b) Strides shall return to A-S all copies of the
Confidential Information previously disclosed by A-S, including without
limitation all A-S Materials and neither Strides nor its Affiliates shall
thereafter retain copies, transcriptions or summaries of any portion of the
foregoing; (c) the Strides Capital Contribution Agreements shall be accelerated
and all principal and accrued interest thereunder shall be immediately due, as
more fully set forth in the Strides Capital Contribution Agreements; (d) any
unused amounts under the Registration Payment (as determined according to the
timeline and budgeted amounts set forth in the ANDA Schedule, and including all
work-in-process and unrecoverable costs towards unmet milestones on the ANDA
Schedule) shall immediately be due and payable to A-S and Strides shall
immediately pay A-S such amount; and (e) all Parties shall remain liable for
each of their respective obligations hereunder that accrued prior to the date
of termination.



               9.4.2 All rights and remedies conferred herein shall be cumulative and in
addition to all of the rights and remedies available to each Party at law,
equity or otherwise.



               9.4.3 Sections 2.4, 3.5, 3.6, 3.7, 4.3, 4.4, 4.9, 6.1, 6.2, 6.4 and 9.4
and all Sections under ARTICLE 1, ARTICLE 7, ARTICLE 8 and ARTICLE 10 shall
survive the termination or expiration of this Agreement.



ARTICLE 10



GENERAL TERMS




          10.1 Relationship of Parties. The relationship between Strides and A-S,
with respect to this Agreement, is only that of independent contractors
notwithstanding any activities set forth in this Agreement or in the Limited
Liability Company Agreement for Akorn-Strides, LLC, of even date between
Strides and Akorn. With respect to this Agreement, no Party is the agent or
legal representative of any other Party, and no Party has the right or
authority to bind any other Party in any way. This Agreement creates no
relationship as partners or a joint venture, and creates no pooling
arrangement.



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          10.2 Governing Law and Venue. This Agreement is governed by and shall be
construed in accordance with the law of the State of New York, excluding any
conflict-of-laws rule or principle that might refer the governance or the
construction of this Agreement to the law of another jurisdiction. Each Party
hereby consents to the exclusive jurisdiction of the state and federal courts
sitting in New York in any action on a claim arising out of, under or in
connection with this Agreement or the transactions contemplated by this
Agreement, provided such claim is not required to be arbitrated pursuant to
Section 10.3. Each Party further agrees that personal jurisdiction over it may
be effected by service of process by registered or certified mail addressed as
provided in Section 10.9 of this Agreement, and that when so made shall be as
if served upon it personally within the State of New York.



          10.3 Mediation and Arbitration. The Parties shall, before the
commencement of arbitration proceedings, attempt in good faith to settle their
dispute by mediation.



               10.3.1 Arbitration. Except as otherwise provided in this Agreement, any
dispute, controversy or claim arising out of or relating to this Agreement, or
any breach thereof, including without limitation any claim that this Agreement,
or any part hereof, is invalid, illegal or otherwise voidable or void, shall be
submitted, at the request of any Party, to binding arbitration by a
JAMS\ENDISPUTE (“JAMS”) arbitrator, or such other arbitrator as may be agreed
upon by the Parties. Hearings on such arbitration shall be conducted in New
York, New York. A single arbitrator shall arbitrate any such controversy. The
arbitrator shall hear and determine the controversy in accordance with
applicable law and the intention of the Parties as expressed in this Agreement,
upon the evidence produced at an arbitration hearing scheduled at the request
of either Party. Such pre-arbitration discovery shall be permitted to the
fullest extent permitted by New York law applicable to arbitration proceedings,
including, without limitation, the provisions of the New York Code of Civil
Procedure. The arbitrator shall decide all discovery disputes. Judgment on
the award of the arbitrator may be entered in any court having jurisdiction
thereof.



               10.3.2 Provisional Remedy. Each of the Parties reserves the right to file
with a court of competent jurisdiction an application for temporary or
preliminary injunctive relief, writ of attachment, writ of possession,
temporary protective order and/or appointment of a receiver on the grounds that
the arbitration award to which the applicant may be entitled may be rendered
ineffectual in the absence of such relief.



               10.3.3 Consolidation. Any arbitration hereunder may be consolidated by
JAMS with the arbitration of any other dispute arising out of or relating to
the same subject matter when the arbitrator determines that there is a common
issue of law or fact creating the possibility of conflicting rulings by more
than one arbitrator. Any disputes over which arbitrator or panel of
arbitrators shall hear any consolidated matter shall be resolved by JAMS.



               10.3.4 Power And Authority Of Arbitrator. The arbitrator shall not have
any power to alter, amend, modify or change any of the terms of this Agreement
nor to grant any remedy which is either prohibited by the terms of this
Agreement, or not available in a court of law.



20









 





               10.3.5 Governing Law. All questions in respect of procedure to be
followed in conducting the arbitration as well as the enforceability of this
Agreement to arbitrate which may be resolved by state law shall be resolved
according to the laws of the State of New York.



               10.3.6 Costs. The costs of the arbitration, including any JAMS
administration fee, the arbitrator’s fee, and costs for the use of facilities
during the hearings, shall be borne equally by the Parties to the arbitration.
Attorneys’ fees may be awarded to the prevailing or most prevailing Party at
the discretion of the arbitrator.



          10.4 Assignment. A-S acknowledges that the favorable terms of this
Agreement were granted to Strides only because of Strides’ experience, and that
the substitution of any party by Strides would destroy the intent of the
Parties. Accordingly, Strides shall have no right to assign, delegate,
transfer or otherwise encumber this Agreement or any portion thereof without
A-S’ prior written consent.



          10.5 Counterparts. This Agreement may be executed in several counterparts
that together shall be originals and constitute one and the same instrument.



          10.6 Waiver. The failure of any Party to enforce any of its rights
hereunder or at law shall not be deemed a waiver or a continuing waiver of any
of its rights or remedies against another Party, unless such waiver is in
writing and signed by the Party to be charged.



          10.7 Severability. If any provision of this Agreement, or part thereof,
is declared by a court of competent jurisdiction to be invalid, void or
unenforceable, each and every other provision, or part thereof, shall
nevertheless continue in full force and effect.



          10.8 Attorneys’ Fees. In the event that any dispute between the Parties
should result in litigation or arbitration, the prevailing Party in such
dispute shall be entitled to recover from the other Party all reasonable fees,
costs and expenses of enforcing any right of the prevailing Party, including
without limitation, reasonable attorneys’ fees and expenses, all of which shall
be deemed to have accrued upon the commencement of such action and shall be
paid whether or not such action is prosecuted to judgment. Any judgment or
order entered in such action shall contain a specific provision providing for
the recovery of attorney fees and costs incurred in enforcing such judgment and
an award of prejudgment interest from the date of the breach at the maximum
rate of interest allowed by law. For the purposes of this Section: (a)
attorney fees shall include, without limitation, fees incurred in the
following: (1) postjudgment motions; (2) contempt proceedings; (3) garnishment,
levy, and debtor and third party examinations; (4) discovery; and (5)
bankruptcy litigation; and (b) prevailing Party shall mean the party who is
determined in the proceeding to have prevailed or who prevails by dismissal,
default or otherwise.



          10.9 Notice. Any notice, demand, consent, election, offer, approval,
request, or other communication given under this Agreement shall be in writing
and shall be served personally or delivered by first class, registered or
certified, return receipt requested U.S. mail, postage prepaid. Notices may
also be given by transmittal over electronic transmitting devices such as
Telex, facsimile or telecopy machine, if the Party to whom the notice is being
sent has such a device in its office, provided a complete copy of any notice so
transmitted shall also be mailed in



21









 





the same manner as required for a mailed notice. Notices shall be deemed
received at the earlier of actual receipt or three (3) days following deposit
in U.S. mail, postage prepaid. Notices shall be directed to Parties at their
addresses as specified on page 1 of this Agreement, provided a Party may change
such Party’s address for notice by giving written notice to the other Party in
accordance with this Section 10.9.




          10.10 Further Assurances. The Parties agree to execute such additional
documents and perform such acts as are reasonably necessary to effectuate the
intent of this Agreement.



          10.11 Entire Agreement. This Agreement constitutes the entire agreement
between the Parties regarding the subject matter hereof, and supersedes all
prior or contemporaneous understandings or agreements regarding the subject
matter hereof, whether oral or written. This Agreement shall be modified or
amended only by a writing signed by both A-S and Strides.



          10.12 Authority. The parties executing this Agreement on behalf of A-S
and Strides represent and warrant that they have the authority from their
respective governing bodies to enter into this Agreement and to bind their
respective companies to all the terms and conditions of this Agreement.



          10.13 Captions. The captions of the Articles and Sections in this
Agreement are for convenience only and shall not be used to interpret the
provisions of this Agreement.



          10.14 Force Majeure. Except for Strides’ obligation to meet the
Registration Threshold before the lapse of the applicable Threshold Period,
neither Party shall be liable for delays in its performance caused by events
beyond its control, such as fires, floods, labor shortages, strikes, epidemics,
computer virus, earthquakes, riots, acts of terror, acts of God, storms, acts
of civil or military authority or similar occurrences, provided the affected
Party gives the other Party written notice of such event within three (3)
business days of its occurrence. Such notice shall state the estimated
duration of such event and the cause thereof and the affected Party shall use
commercially reasonable efforts to work around such event beyond its control.



          10.15 Export. A-S shall not directly or indirectly export or re-export
any of the Products outside of the United States without first notifying
Strides and complying with Strides’ export control procedures. A-S shall
additionally comply with all United States export control laws and regulations
if any Product is exported or re-exported. A-S shall also be responsible for
obtaining all export licenses or other approvals required to export or
re-export the Products outside the United States.



IN WITNESS WHEREOF, and intending to be legally bound, the Parties have
executed this Agreement to be effective as of the Effective Date.




	 	 	 	 	 	 	 	 	 
	Akorn-Strides, LLC	 	 	 	Strides Arcolab Limited
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Arthur S. Przybyl


	 	 	 	By:
	 	/s/ Arun Kumar



	Name:  Arthur S. Przybyl

	 	 	 	Name:  Arun Kumar

	Its:

	 	Manager


	 	 	 	Its:
	 	CEO









22









 






* Confidential Treatment Requested Under

17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2



EXHIBIT A



PRODUCTS




[...*...]










	* CONFIDENTIAL TREATMENT REQUESTED
– This Exhibit A, consisting of 9 pages,
has been omitted and filed separately with the Securities & Exchange
Commission.




 









 










* Confidential Treatment Requested Under

17 C.F.R. §§ 200.80(b)(4), 200.83 and 240.24b-2



EXHIBIT B



ANDA SCHEDULE




[...*...]










	* CONFIDENTIAL TREATMENT REQUESTED – This Exhibit B, consisting of 2 pages,
has been omitted and filed separately with the Securities & Exchange
Commission.




 









 










EXHIBIT C



INSIGNIA




[Subject to the mutual agreement of the Parties]