*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL
SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
 TRANSITION AGREEMENT
 Agreement Medicis Pharmaceutical Corporation, Medicis aaiPharma Inc. , AAI Parties Party
 RECITALS:
 Development, Commercialization and License
Agreement DCL
Agreement
 Termination Date
  STATEMENT OF AGREEMENT:
  Return of Work Product; Survival
   Assignment of Agreements
 1




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##### 



Schedule 2 Transferred Contract Transferred Contracts Schedule 2
 Schedule 2 provided however provided however
 Transferred Contracts Indemnification
 AAI Indemnified Parties Claims Section 3.1
 Medicis Indemnified Parties
 2




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##### 



Closing Date Payments to AAI
 Closing Sum
  Expense
Statement
 Objection Notice Accounting Firm
 Section 4.4 Section 4.4 Section 4.4
 3




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Closing and Deliveries
 Closing Closing Closing Date
 Deliveries
  (a)
    
    The Work Product pursuant to Section 1;(b)
    
    The Transferred Contracts pursuant to Section 2;(c)
    
    A quality control agreement, duly executed by AAI; and(d)
    
    Such other agreements, consents, documents, instruments and writings as are
reasonably requested by Medicis or otherwise required to be delivered by AAI at or
prior to the Closing Date pursuant to this Agreement.
  (a)
    
    The payments required to be made by Medicis to AAI pursuant to Sections
4.1 and 4.2;(b)
    
    A quality control agreement, duly executed by Medicis; and(c)
    
    Such other agreements, consents, documents, instruments and writings as are
reasonably requested by AAI or otherwise required to be delivered by Medicis at or
prior to the Closing Date pursuant to this Agreement.
 Transition Services
 Exhibit II Exhibit III Service Estimates Initial
Services
 4




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Exhibit II Exhibit III
  Section 6.1 Section 6.1
 Outside Technology
 Exhibit III Manufacturing Services Services Exhibit III Exhibit III Section 6.2
  5




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FDA ) FDA
Approval Date New Manufacturing Site . New Site Approval Date
 Exhibit III Exhibit III
 Payments for Services provided however
 6




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##### 



Section 7(b)
 AAI Performance Applicable
Laws
 Mutual Representations, Warranties and Covenants
 Act
      7




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AAIS Representations, Warranties and Covenants
  Exhibit III
       ARTICLE 10
  8




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Certain Obligations
 Supply of Active Ingredient
 (a)
    
    AAI shall use the Active Ingredient already provided to it by Medicis to
perform its obligations hereunder. Thereafter, Medicis shall, at its sole cost and
expense, deliver the Active Ingredient to AAI in quantities agreed to between the
Parties. All risk (other than arising from or in connection with AAIs or its
employees, agents or subcontractors negligence or willful or reckless actions or
misconduct), right, title and interest in and to the Active Ingredient shall at all
times belong to and remain in Medicis. AAI shall only use the Active Ingredient
received by it to perform the Services. AAI shall promptly notify Medicis in writing
of any Active Ingredient that does not meet the specifications identified in Attachment
I of Exhibit III, and AAI shall return such Active Ingredient in accordance
with Medicis instructions to either Medicis or its designee at Medicis risk and
expense.
 (b)
    
    AAI shall not be responsible for any loss or damage to the Active Ingredient,
except where such loss or damage occurs as a result of AAIs or its employees, agents
or subcontractors negligence or willful or reckless actions or misconduct. In such
circumstances, AAI shall promptly reimburse Medicis for the Reimbursable Value (as such
term is defined in Exhibit III hereto) therefor. Except as otherwise provided
herein, all other supplies and materials that are required for the Services shall be
obtained by AAI.
 Safety
 Regulatory Approvals
 Regulatory Reporting
 Subcontractors
 9




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(a)
    
    contains obligations of confidentiality on such subcontractor no less
protective of Medicis Confidential Information than the obligations of AAI under this
Agreement, unless otherwise agreed to by Medicis in a signed writing;(b)
    
    requires such subcontractor to enter in to a confidentiality agreement in the
form attached as Exhibit IV hereto;(c)
    
    shall include substantially the same terms as those appearing in Section 9 of
the DCL Agreement Ownership of Work Product to ensure that Medicis obtains the same
rights in the Work Product generated under such subcontractor agreement as those set
forth in this Agreement;(d)
    
    permits Medicis to exercise its inspection and audit rights pursuant to
Section 12 Inspections and Audits hereof; and(e)
    
    without Medicis prior written consent, does not impose any payment obligations
and/or liability on Medicis.
 Storage of Original Records
 Insurance
 Inspections and Audits
  10




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##### 



provided however Section 12.2
  Indemnification
 Indemnification by Medicis Section 13.3
 Indemnification by AAI
 Procedures for Indemnification
 General Indemnified Party
 11




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Indemnifying Party Sections 13.1 13.2 provided however Sections 13.1 13.2 Sections 13.1 13.2
 Defense Assumed provided Sections 13.1 13.2 Sections 13.1 13.2
 Defense Declined Sections 13.1 13.2
 Settlement of Third Party Claims
 Contributory Negligence; Right of Contribution
 12




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##### 



Confidential Information
 Medicis Confidential Information Medicis Confidential Information
 AAI Confidential Information AAI Confidential Information AAI Intellectual
Property
 Sections 14.1 14.2
 13




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##### 



Section 14.2 provided however
 Further Assurances
  Termination
 Term and Termination Exhibits II III Exhibit III Exhibit III Exhibit III Exhibits II III
 (a)
    
    by mutual agreement of the Parties;
 (b)
    
    by either Party by written notice to the other upon the occurrence of either of
the following events:
 (i)
    
    either Party is in material breach of this Agreement and fails
to cure such breach within *** after receipt of written notice from the other
Party identifying the breach;(ii)
    
    either Party enters into bankruptcy, whether voluntary or
involuntary, has a receiver appointed, becomes insolvent, enters into any
arrangement with its creditors, takes or suffers any similar action in
consequence of debt or ceases or threatens to cease to carry on its business as
usual or permits the entry of an order adjudicating it to be bankrupt or
insolvent and such order is not discharged within ***; or(iii)
    
    as permitted by Section 17.5 hereof.
 (c)
    
    Any termination or expiration of this Agreement shall not affect any
outstanding obligations or payments due hereunder prior to such termination or
expiration, nor
 14




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##### 



shall it prejudice any other remedies that the Parties may have under
this Agreement.
 Effect of Termination Exhibit III
 Exhibit III Exhibit III
  (a)
    
    ***(b)
    
    ***(c)
    
    ***
 Miscellaneous
 Notices
  
 15




---



##### 



Relationship Between Parties
 Media Releases provided however provided further however
 16




---



##### 



provided
 Assignments
 Force Majeure Force Majeure
 Controlling Document
 Costs and Attorneys Fees
 17




---



##### 



Parties in Interest
 No Waivers
 Severability
 Counterparts
 Controlling Law
 Entire Understanding
 Jurisdiction and Venue
 Headings and References
 Parties Represented by Counsel
 Survival. Article 4 Exhibit III
 18




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MEDICIS PHARMACEUTICAL CORPORATIONBy:Name:Title:AAIPHARMA INC.By:Name:Title: 19




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Schedule 2
 TRANSFER CONTRACTS
 1. MP-0104-04:
  13 sites
 Study Counter-party
    
    Principal Investigator***
    
    ******
    
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    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ***
 2. MP-010405:
  16 sites
 Study Counter-party
    
    Principal Investigator***
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ***
 1




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3. MP-0104-07:
  28 sites
 Study Counter-party
    
    Principal Investigator***
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ***
 4. MP-0104-09:
  Study Counter-party
    
    Principal Investigator***
    
    ***
 5. MP-0104-10  Study completed, awaiting data report
  Study Counter-party
    
    Principal Investigator***
    
    ******
    
    ******
    
    ***
 2




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6. Other Agreements
 
 
 
 
 
 
 7. MP-0104-01
 14 sites
 Study Counter-party
    
    Principal Investigator***
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ******
    
    ***
 3




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EXHIBIT II
 WORK PLAN




---



##### 



EXHIBIT II-A
WORK PLAN




---



##### 



EXHIBIT II-B
WORK PLAN




---



##### 



EXHIBIT II-C
WORK PLAN




---



##### 



EXHIBIT II-D
WORK PLAN




---



##### 








---



##### 



EXHIBIT II-F
WORK PLAN




---



##### 



EXHIBIT III
 MANUFACTURING TERMS




---



##### 



EXHIBIT III
 [Execution Copy]
 MANUFACTURING TERMS
 1. INTERPRETATION1.1
    
    Definitions. Capitalized terms used herein which are not defined shall have the
meanings given to such terms in the Agreement. In addition, as used herein, the following
capitalized terms shall have the meanings set forth below:
 Active Materials Minocycline
 Agreement
 Alternate Supplier Products
 Closing Date
 Components
 Exhibit III Exhibit III
 Inventory
 Product(s)
 Quality Control Agreement
 Reimbursable Value
 Shortage
 1




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Specifications Attachment A
 Term Section 5.1
 Theoretical Yield Attachment A
 Trademarks ® ®
 1.2
    
    Attachments. The following exhibits are attached to this Exhibit III and are
incorporated in and are deemed to be an integral part hereof:
 Attachment A
    
    -
    
    Product List and specifications for Products and
Active MaterialsAttachment B
    
    -
    
    Price ListAttachment C
    
    -
    
    Stability Testing Procedures/Fee ScheduleAttachment D
    
    -
    
    Lot Numbering and Expiration Dates
 2.
    
    MANUFACTURE AND SUPPLY OF PRODUCTS2.1
    
    Manufacture.
 (a)
    
    From and after the Closing Date and until the later of (i) the date which is
*** after the FDA Approval Date, or (ii) the New Site Approval Date (the Post-Launch
Date), AAI shall manufacture and sell to Medicis, and Medicis shall be required to
purchase from AAI, one hundred percent (100%) of Medicis required commercial supply,
including bulk clinical supply and samples, of the Products.(b)
    
    From and after:
 (i)
    
    the Post-Launch Date and until and including the ***, AAI shall
manufacture and sell to Medicis, and Medicis shall be required to purchase from
AAI, not less than *** of the following: Medicis required commercial supply of
the Products plus Alternate Supplier Products during such time period;(ii)
    
    the *** and until and including ***, AAI shall manufacture and
sell to Medicis, and Medicis shall be required to purchase from AAI, not less
than *** of the following: Medicis required commercial supply of the Products
plus Alternate Supplier Products during such time period;
 2




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##### 



(iii)
    
    the *** and until and including ***, AAI shall manufacture and
sell to Medicis, and Medicis shall be required to purchase from AAI, not less
than *** of the following: Medicis required commercial supply of the Products
plus Alternate Supplier Products during such time period; and(iv)
    
    the *** and until and including ***, AAI shall manufacture and
sell to Medicis, and Medicis shall be required to purchase from AAI, not less
*** of the following: Medicis required commercial supply of the Products plus
Alternate Supplier Products during such time period;]
 provided however Section 2.1(b)
 2.2
    
    Packaging. Medicis shall be solely responsible for the content of all labels,
product inserts and other labelling (Labeling) and shall ensure that all such Labeling
complies in all material respects with applicable law. AAI shall package the Products with
Labeling as specified and approved by Medicis. Medicis may, in its sole discretion, make
changes to Labeling for the Products, which changes shall be submitted by Medicis to all
applicable governmental agencies and other third parties responsible for the approval of the
Products, if required. AAIs name shall not appear on the Labeling or anywhere else on the
Products unless required by a governmental authority or other applicable laws or regulations.2.3
    
    Quality Control and Assurance.
 (a)
    
    AAI shall manufacture and supply the Products in accordance with (i) the
Specifications; (ii) the approved NDA; and (iii) the current Good Manufacturing
Practices for manufacturing finished products specified by the FDA (collectively,
GMPs). AAIs responsibilities and obligations with respect to the manufacture
of Products as set forth in this Section 2.4(a) are hereinafter referred to
as the AAI Manufacturing Requirements.(b)
    
    AAI shall perform such quality control and quality assurance testing as is
reasonably required by the Quality Control Agreement to ensure that the Products
 3




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##### 



comply with all of the AAI Manufacturing Requirements as of the date of shipment to Medicis.
 (c)
    
    If the Products as manufactured by AAI do not satisfy its quality control and
quality assurance testing obligations due to AAIs failure to produce the Products in
accordance with the Quality Control Agreement, AAI shall, at its sole cost and expense,
manufacture additional Products to replace such defective Products. In such
circumstances, Medicis shall have no obligation to purchase or pay for any rejected
Products that are defective, unless and only to the extent that such Product is used by
Medicis for another purpose, in which event Medicis shall only be required to pay for
that portion of the rejected Products which it actually so uses.(d)
    
    The Parties hereto agree that except in the circumstances where AAI has failed
to comply with the AAI Manufacturing Requirements, AAI shall not be liable or have any
responsibility for any deficiencies with respect to the Labeling and procedures
specified by Medicis, sales and marketing of the Products or distribution of the
Products.(e)
    
    AAI shall provide Medicis with a certificate of conformance, a certificate of
analysis, and copies of the batch record, any deviation and investigation reports, and
Labeling prior to shipping Products to Medicis. The certificate of analysis will set
out the actual test results for each lot of Products, and will certify that the
Products shipped to Medicis have been evaluated by AAIs Quality Control/Quality
Assurance department and that the Products comply with the Specifications. Medicis
shall issue a formal QA release prior to the shipment of product by AAI.
 2.4
    
    Delivery. All Product(s) shall be delivered F.O.B. from AAIs manufacturing
facility. Medicis shall be responsible for arranging the shipment of the Product(s) from
AAIs manufacturing facility to its final destination. All shipping costs and taxes
associated with the sale to Medicis of Products hereunder will be for the account and expense
of Medicis.2.5
    
    Rejection of Products.
 (a)
    
    Medicis shall inspect the Products manufactured by AAI within *** after receipt
thereof and shall give AAI written notice (a Deficiency Notice) of all Shortages and
obvious damage to or defects in the delivered Products, prior to the expiry of *** day
period, except that Medicis shall give AAI a Deficiency Notice of any non-obvious
defects, including failure to meet Specifications, within *** following discovery
thereof. Except as set forth in Section 4.2 below, AAI shall
have no liability for any Shortages or defects for which it has not received a
Deficiency Notice within such ***.(b)
    
    A Deficiency Notice pursuant to this Section 2.5 shall describe the
deficiency in such detail as to reasonably inform AAI of its nature and basis.
Thereafter, upon
 4




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##### 



request, Medicis shall provide AAI with all information and
documentation reasonably requested by AAI in order to evaluate the Deficiency Notice.
AAI shall have a period of *** after its receipt of a Deficiency Notice to present in
writing to Medicis any objections AAI may have to the matters set forth therein. If no
objections are raised within such ***, the Deficiency Notice shall be deemed final and
accepted and approved by AAI on such ***. If AAI shall raise any objections, Medicis
and AAI shall attempt to resolve the matters in dispute, and if resolved, the Parties
shall accordingly revise the Deficiency Notice and the Deficiency Notice as so revised
shall become final. If such dispute cannot be resolved by the Parties within *** after
delivery of the Deficiency Notice to AAI, then, upon *** prior written notice to the
other party, the matters in dispute shall be submitted to Boston Analytical, Inc. of
Salem, New Hampshire, unless objected to by either party within the *** notice period,
or such other laboratory as agreed to in writing by the Parties (in either case, the
Laboratory), which Laboratory shall make a final and binding determination as to such
matters. The expenses associated with such dispute determination by the Laboratory
shall be borne by the Party whose position was not substantiated by such firm.
 (c)
    
    To the extent that a deficiency is set forth in a final Deficiency Notice, AAI
shall, as soon as is commercially reasonable but in no event later than *** after the
Deficiency Notice becomes final in accordance with Section 2.6(b) hereof, supply
Medicis with Product conforming to the Specifications in an amount equal to the
deficiency, and reimburse Medicis for all Active Materials consumed in the production
of such Product, at the Reimbursable Value.
 2.6
    
    Manufacturing-Related Services.
 (a)
    
    Upon the written request of Medicis, AAI shall conduct stability testing on the
Products in accordance with the protocols submitted by Medicis and a Service Estimate
to be agreed to between the Parties, the particulars of which will be incorporated into
Attachment C hereto once agreed to and executed by the Parties. AAI shall not
make any changes to the testing procedures without prior written approval from Medicis.
In the event that any lot of Products fails stability testing, AAI and Medicis shall
jointly determine the proceedings and methods to be undertaken to investigate the
causes of such failure, including which Party shall bear the cost of such
investigation. AAI shall not be liable for any costs of such investigation, unless
there has been a breach by AAI of the AAI Manufacturing Requirements. In the event of
a breach by AAI of the AAI Manufacturing Requirements, AAI shall promptly reimburse
Medicis for (a) Medicis actual costs with respect to the Active Materials delivered by
Medicis to AAI in the manufacture of such Products, and (b) the purchase price paid for
any batches of Products which fail stability testing as a result of AAIs breach. AAI
will provide Medicis with any and all data and results relating to the stability testing in
accordance with the Quality Control Agreement. From time to time, AAI may, at the
request of Medicis, also provide Medicis with stability testing services with
respect to products not manufactured by AAI, the cost of such services to be agreed
to between the Parties prior to such services being undertaken. Medicis
 5




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##### 



reserves its right to use an alternative second source of stability testing at any time.
 2.6.2
    
    The pricing contained in Attachment B does not apply to manufacturing-related
services set forth in Service Estimates.
 2.7
    
    Manufacturing Changes. Except with respect to the New Manufacturing Site and as
provided in the Quality Control Agreement, AAI shall not make any change in the manufacturing
site of the Products or make any change to the manufacturing equipment or manufacturing
process of the Products without having such changes approved in writing by Medicis prior to
implementation. Medicis may not unreasonably withhold or delay such approval. Both Parties
will establish a change control procedure.
 3.
    
    ORDERS, DELIVERY, INVOICING AND PAYMENT3.1
    
    Yearly Forecasts. On the Closing Date, Medicis shall provide AAI with a forecast of
the volume of each Product required during the first year of the Agreement. Medicis shall
provide AAI with rolling forecasts of the volume of each Product required during the next ***
months (or such shorter period if expiration of the Term shall be less than *** months from
the date of such forecasts). Such rolling quarterly volume forecasts shall (i) be updated by
Medicis by the 15th day of every month with respect to the next full ***; (ii) with
respect to the first *** months of such forecasts, be a binding commitment that Medicis is
obligated to order and purchase from AAI as forecasted and shall not be subject to reduction
(Binding Order); and (iii) with respect to all periods other than the *** of such forecasts
subject to the Binding Order, be updated as soon as practicable by Medicis upon its
determination that the volumes contemplated in the most recent of such forecasts have changed
by *** or more.3.2
    
    Written Orders. The written Binding Orders submitted by Medicis to AAI pursuant to
Section 3.1(ii) hereof shall specify Medicis purchase order number, quantities by
Product type, monthly pick-up schedule and any other elements reasonably necessary to ensure
the timely production of the Products.3.3
    
    Packaging and Raw Materials. All Components shall be purchased (with the exception
of those which are supplied by Medicis), and tested in accordance with the Quality Control
Agreement, by AAI at AAIs expense to ensure that such Components meet any Specifications.
Amendments to such Specifications requested by Medicis will only be implemented with the
approval of AAI following a technical and cost review, such approval not to be unreasonably
withheld but being subject to Medicis and AAI reaching agreement as to price revisions
necessitated by any such amendment in accordance with Section 3.7 below.3.4
    
    Change in Specifications.
 (a)
    
    If Medicis requests a change in the manufacturing process, Specifications or
Labeling which would result in an increase in AAIs costs for Components, the Parties
shall discuss what impact, if any, such change should have on the price of the
Products. Unless otherwise agreed by the Parties, any and all direct costs
 6




---



##### 



associated with Specification changes, including changes requested by Medicis or required by
applicable law, shall be borne by Medicis. The price change shall become effective
only with respect to those orders of Products which are manufactured in accordance with
the revised Specifications.(b)
    
    Notwithstanding any change in the Specifications implemented in accordance with
the terms of Section 3.4(a) above, Medicis agrees to purchase all Products manufactured
by AAI and ordered by Medicis based upon any old Specifications at the then-current
price for those Products. In addition, Medicis agrees to purchase, at AAIs
out-of-pocket cost, all Inventory, defined as the finished product, raw materials and
components, utilized under the old Specifications and purchased or maintained by AAI
in order to fill firm written orders (including a Binding Order), to the extent that
such Inventory can no longer be utilized under the revised Specifications. Medicis
shall reimburse AAI for any out-of-pocket costs associated with destruction of such
obsolete Inventory or Active Materials. Open purchase orders for Components no longer
required under any revised Specifications which were placed by AAI with suppliers in
order to fill firm written orders (including a Binding Order) shall be cancelled where
possible, and where such orders are not subject to cancellation without penalty, such
orders shall, at AAIs election, either (i) be cancelled, with Medicis paying the
penalty; or (ii) be assigned to and satisfied by Medicis.
 3.5
    
    Invoices and Payment. Except as otherwise provided in this Exhibit III, AAI
shall charge Medicis for only those Products that are released by Medicis in accordance with
the terms hereof, including Section 2.5 hereof. AAI shall submit to Medicis, with each such
shipment of Products, an invoice covering such shipment. AAI shall also provide Medicis with
an invoice covering any Inventory or Components purchased by Medicis from AAI in accordance
with the terms of this Exhibit III. Each such invoice shall, to the extent
applicable, identify the Medicis purchase order number, Product numbers, names and quantities,
unit price, freight charges and the total amount to be remitted by Medicis. Medicis shall pay
all such invoices within *** of the receipt thereof.3.6
    
    Lot Numbering/Expiration Dates. AAI shall make arrangements for and implement the
imprinting of lot numbers and expiration dates for each Product shipped. Such lot numbers and
expiration dates shall be affixed on the Products and on the shipping carton of each product
as is required by GMPs. The system used by AAI for lot numbering and expiration dates is
detailed on Attachment D hereto.3.7
    
    No Guarantee: Except as expressly provided in this Exhibit III, AAI
acknowledges that there are no guaranteed volumes of the Products.4.
    
    CO-OPERATION4.1
    
    Records and Accounting by AAI. AAI shall keep records of the manufacture, testing
and shipping of the Products, and retain samples of such Products that are necessary to comply
with FDA manufacturing requirements and AAI Manufacturing Requirements as well as to assist
with resolving product complaints and other similar investigations.
 7




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##### 



Copies of such records and samples shall be made available to Medicis upon its reasonable request and shall be
retained by AAI and be available to Medicis for a period of *** following the date of
manufacture, or *** past expiry or longer if required by law.4.2
    
    Product Recalls.
 (a)
    
    AAI and Medicis shall each maintain records as may be necessary to permit a
recall or a field correction of any the Products delivered to Medicis or customers of
Medicis, effected voluntarily or under a threat of, or a directive by, any governmental
agency. Each Party shall give immediate notice by telephone (to be confirmed in
writing) to the Director of Quality Control/Quality Assurance of the other Party upon
discovery that any Products should be recalled or corrected, or may be required to be
recalled or corrected, and, each Party upon receiving any such notice or upon any such
discovery, shall evaluate the need to cease and desist from further shipments of such
Products in its possession or control until a decision has been made whether a recall
or some other corrective action is necessary. The decision to initiate a recall or to
take some other corrective action, if any, shall be made and implemented by Medicis.
AAI will co-operate as reasonably required by Medicis, having regard to all applicable
laws and regulations. Each Party shall co-operate with the other in developing any
necessary recall plan, and the manner and extent of such plan shall be subject to prior
consultation, which consultation shall not unreasonably delay such plan.(b)
    
    To the extent that a recall results from, or arises out of, any breach by AAI
of the AAI Manufacturing Requirements then (i) AAI shall reimburse Medicis for Medicis
documented out-of-pocket, direct costs and expenses arising from the recall, and (ii)
AAI shall replace the recalled Products with new Products as soon as commercially
reasonable, contingent upon the receipt or availability from Medicis of all Active
Materials; provided, however, that if AAI shall have all of the
Components and Active Materials necessary to manufacture the Products on its premises,
then AAI shall begin manufacturing to replace the recalled Products with new Products
within *** following the resolution of all issues related to such recall. AAIs cost
for such Active Materials lost as a result of any breach by AAI of the AAI
Manufacturing Requirements shall be limited to the Reimbursable Value thereof. In the
event that (x) AAI is unable to replace the recalled Products within the time period
required by the immediately preceding sentence (except where such inability results
from a failure to receive the required Active Materials, Components or a Force Majeure
event), or (y) such new Products are also recalled or returned due to a breach by AAI
of the AAI Manufacturing Requirements, then AAI shall reimburse Medicis for the
purchase price that Medicis paid AAI for the returned inventory of the affected
Products. Medicis shall be responsible for all costs and expenses associated with a recall or
corrective action that does not result from, or arise out of, a breach by AAI of the
AAI Manufacturing Requirements.
 4.3
    
    Governmental Agencies. Medicis shall have sole responsibility for obtaining any and
all necessary regulatory approvals from the FDA for modifications to the manufacturing
 8




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##### 



process, Specifications and NDA and for reporting any modifications to such manufacturing
process, Specifications or the NDA to the FDA as appropriate.
 4.4
    
    Customer Questions and Complaints. Medicis shall have the sole responsibility for
responding to questions and complaints from Medicis customers. Questions or complaints
received by AAI from Medicis customers shall be promptly referred to Medicis. AAI shall
co-operate as reasonably required to allow Medicis to determine the cause of and resolve any
customer questions and complaints. Such assistance shall include follow-up investigations
including testing. In addition, within ten (10) days from the date of request, AAI shall
provide Medicis with all available information that will assist Medicis in responding to
questions or complaints relating to the Products. All costs incurred in respect of this
Section 4.4 shall be borne by the respective Parties who incurred such costs. Medicis
shall fax product complaints to AAI within *** after Medicis confirms such complaint to:
 
 5.
    
    TERM5.1
    
    Term. The term of the terms and conditions of this Exhibit III shall
commence on the Closing Date and continue for the term described in Section 16.1 of the
Agreement, unless terminated as provided therein or in Section 2.1(b) hereof or extended for
such period of time as the parties hereto shall mutually agree to in writing (the Term).6.
    
    REPRESENTATIONS AND WARRANTIES6.1
    
    Formulas and Trademarks. Medicis represents and warrants that the Specifications for
each of the Products are its property and that Medicis may lawfully disclose the
Specifications to AAI. Medicis further represents and warrants that any trademarks it
authorizes to be utilized by AAI in connection with any of the Products, including the
Trademarks, are its property and may be lawfully used as directed by Medicis. Medicis further
represents and warrants that the Specifications for all Products conform in all material
respects to all applicable laws and regulations, and that the Products if labelled and
formulated in accordance with the Specifications and manufactured in compliance with
applicable GMPs may be lawfully sold and distributed in every jurisdiction in which Medicis
markets such Products and Medicis will sell and distribute in compliance with applicable laws.7.
    
    PRICE7.1
    
    Price. The prices for the Products are shown in Attachment B hereto and
incorporated herein by reference. In addition, Medicis shall be responsible for the payment
of any and all sales and use taxes applicable to the Products and services described herein.
The prices may be adjusted by AAI on the anniversary of the first firm order by Medicis, and
 9




---



##### 



annually thereafter by the total percentage change in the price of the Product as reflected in
the *** over the preceding ***. AAI shall notify Medicis of such increase within *** days of
the price change date.
 8.
    
    MISCELLANEOUS8.1
    
    Permits. AAI shall, at its own expense, obtain and maintain the necessary permits
required for the manufacture and supply of the Products, provided that AAI shall not be
responsible for obtaining or maintaining any other permits or other regulatory approvals in
respect of the Products or the Specifications, which shall be the sole responsibility of
Medicis.8.2
    
    Trademarks. Medicis and AAI hereby acknowledge that neither Party has, nor shall it
acquire, any interest in any of the other Partys copyrighted material, trademarks, trade
names or other intellectual property unless otherwise expressly agreed to in writing. The
Parties agree not to use any trademark or trade name of the other Party, except as
specifically authorized by the other Party.8.3
    
    Reports. AAI will supply on an annual basis, Product data, including release test
results, complaint test results and all investigations (in manufacturing, testing and storage)
directly related to the Product and AAIs ability to produce the Products in accordance with
all applicable laws, and will also prepare and complete the full Annual Product Review, which
Medicis will then review before preparing the Annual Report with the FDA. If Medicis
reasonably finds the Annual Product Review non-conforming, AAI shall prepare an appropriate
revision.8.4
    
    Additional Product. The Parties covenant and agree that additional products may be
added to Attachment A hereto and such additional products shall be governed by the
general conditions hereof with any special terms (including, without limitation, price)
governed by an addendum hereto.
 10




---



##### 



ATTACHMENT A
 PRODUCTS AND SPECIFICATIONS
  1




---



##### 



ATTACHMENT B
  Product
    
    Fill
    
    
    Annual
    
    
    Run
    
    
    Unit PriceDescription
    
    Size
    
    
    Quantity
    
    
    Quantity
    
    
    (USD)
 1




---



##### 



ATTACHMENT C
 STABILITY TESTING PROCEDURES/FEE SCHEDULE
  1




---



##### 



ATTACHMENT D
 LOT NUMBERING AND EXPIRATION DATES




---



##### 



EXHIBIT IV
 FORM OF CONFIDENTIALITY AGREEMENT




---



##### 



Form of Confidentiality Agreement for Subcontractors
 CONFIDENTIALITY AGREEMENT
 
  
    1.
    
    COMPANY shall disclose and/or authorize disclosure through designated representatives to
RECIPIENT all relevant Confidential Information as deemed necessary by COMPANY to facilitate
RECIPIENTS ability to perform its functions and obligations as a subcontractor to
 1




---



##### 



COMPANY. RECIPIENT shall accept and hold such Confidential Information in confidence in
accordance with the provisions hereof.
 2.
    
    Without the prior written consent of COMPANY, RECIPIENT shall neither (i) disclose, directly
or indirectly, to any third party or permit any third party to have access to any of MEDICIS
Confidential Information disclosed to RECIPIENT by COMPANY, nor (ii) use, directly or
indirectly, such Confidential Information for any purpose other than as set forth herein.
However, the aforesaid obligations of confidentiality assumed by RECIPIENT shall not apply to
any Confidential Information that RECIPIENT can clearly demonstrate falls within any of the
following categories:
 (a)
    
    Confidential Information that is now generally known to the public in an
integrated written form or subsequently becomes generally known to the public in an
integrated written form through no fault of RECIPIENT or breach of any other
confidentiality obligation owed to COMPANY or MEDICIS;(b)
    
    Confidential Information that, as of the time of disclosure to RECIPIENT, was
already known to and in the possession of RECIPIENT as evidenced by written records and
not otherwise subject to a confidentiality obligation; or(c)
    
    Confidential Information obtained after the date hereof by RECIPIENT from a
third party lawfully in possession of, and having the right to disclose same.
 3.
    
    For purposes of keeping Confidential Information confidential, the RECIPIENT shall use
efforts at least commensurate with those employed by RECIPIENT for the protection of its own
Confidential Information, but the use of such efforts shall not constitute a defense in the
event that any of the Confidential Information is not kept confidential in accordance with the
terms of this Agreement. The RECIPIENT shall take all reasonable measures including, but not
limited to, court proceedings, at its own expense, to restrain consultants, agents,
associates, employees or former employees from unauthorized use or disclosure of Confidential
Information and RECIPIENT shall be liable to COMPANY and/or MEDICIS for any damages resulting
from the breach by any of RECIPIENTS consultants, agents, associates, employees or former
employees of the terms hereof. RECIPIENT acknowledges that in the event of a breach of this
Agreement, both COMPANY and MEDICIS may suffer irreparable damage that may not be fully
remedied by monetary damages. RECIPIENT therefore agrees that COMPANY, or MEDICIS, or both of
them shall be entitled to seek injunctive relief against any such breach in any court of
competent jurisdiction. COMPANYs and MEDICIS rights under this Section 3 shall not in any
way be construed to limit or restrict their rights to seek other damages or relief available
under this Agreement or applicable law.
 4.
    
    Except as may otherwise be expressly set forth in an agreement between the parties hereto
entered into after the date hereof, neither COMPANY nor RECIPIENT make and shall not be deemed
to make or have made any representation or warranty as to the accuracy or completeness of the
Confidential Information or any part thereof.
 2




---



##### 



5.
    
    Except as provided in Section 1 hereof, no license or other right to use the Confidential
Information is granted hereby.
 6.
    
    The disclosure of Confidential Information by COMPANY to RECIPIENT shall not result in any
obligation on the part of either party to enter into any future agreement relating to the
Confidential Information or to undertake any other obligation not set forth in written
agreement signed by the parties hereto.
 7.
    
    Confidential Information furnished by COMPANY to RECIPIENT under this Agreement shall remain
COMPANYs or MEDICIS property, and any document or recording/reproduction containing such
Confidential Information in written or other form shall be promptly returned to COMPANY or
MEDICIS upon request. Return or destruction of Confidential Information of documents or other
tangible things which embody or record the Confidential Information does not affect the
continuing obligations of the RECIPIENT under this Agreement.
 8.
    
    RECIPIENT acknowledges that any work product (including but not limited to data, reports
including case reports and case report forms, interpretations, opinions and recommendations),
trade secret information, copyrightable work product and any and all other intellectual
property rights developed, derived from or otherwise generated by RECIPIENT, directly or
indirectly, from the Information shall be owned by and belong exclusively to COMPANY. Further,
RECIPIENT agrees to treat such work product or information as Confidential Information subject
to the confidentiality, nonuse and nondisclosure obligations hereunder. RECIPIENT agrees to
promptly and fully disclose such work product or information to COMPANY. RECIPIENT hereby
assigns and agrees to assign to COMPANY the ownership right, title, and interest in such
material, including, without limitation, inventions (whether patentable or unpatentable), and
copyrightable work product and COMPANY shall have the right to obtain and hold in its own
name, without obligation of any kind to RECIPIENT, patents, copyrights, or other protection
which may be available or become available with respect to such items. RECIPIENT further
agrees to give COMPANY and its designees or assignees all assistance reasonably required to
perfect such rights, titles and interests. These obligations shall survive and continue beyond
the termination of this Agreement and shall be binding upon RECIPIENTs assigns, executives,
administrators and other legal representatives.
 9.
    
    With the exception of personal and confidential patient medical records, all case report
forms and other reports and data generated during the course of any study performed by
RECIPIENT as a subcontractor to COMPANY between the parties shall be the sole property of
COMPANY. Such data may be used by COMPANY or MEDICIS for any purpose without further
obligation or liability to the RECIPIENT, unless otherwise agreed to in writing by the
parties.
 10.
    
    RECIPIENT represents and warrants that it is not now nor shall it be a party to any other
agreement or under any obligation to or restriction by any third party which would prevent the
RECIPIENT from entering into this Agreement or which would conflict with any of its
obligations under this Agreement or any of the undertakings set forth herein in any manner.
 3




---



##### 



11.
    
    Neither party hereto shall be entitled to assign its rights hereunder without the express
written consent of the other party, except that COMPANY may assign it rights under this
Agreement to MEDICIS.12.
    
    A waiver by either party of any term or condition of this Agreement in any instance shall not
be deemed or construed to be a waiver of such term or condition for the future, or of any
subsequent breach thereof. All rights, remedies, undertakings, or obligations contained in
this Agreement shall be cumulative and none of them shall be in limitation of any other right,
remedy, undertaking, or obligation of either party.13.
    
    If and to the extent that any court of competent jurisdiction holds any provision or part of
this Agreement to be invalid or unenforceable, the remainder of this Agreement shall be
construed and reformed so as to as to as nearly as possible give effect to the intentions of
the parties in entering in to this Agreement, and to as completely as possible protect the
confidentiality of MEDICIS Confidential Information.14.
    
    In the event that RECIPIENT becomes legally compelled to disclose any of the Confidential
Information, RECIPIENT shall give COMPANY prompt notice so that they may seek a protective
order or other appropriate remedy or waive compliance with the provisions of this Agreement.
In the event that such protective order or other remedy is not obtained, or the COMPANY waives
compliance with the provisions of this Agreement, RECIPIENT shall furnish only that portion of
the Confidential Information which is legally required to be disclosed.15.
    
    Without the prior written consent of COMPANY, RECIPIENT shall not disclose to any person or
entity (a) the terms of its engagement involving COMPANY, MEDICIS and RECIPIENT, (b) that
RECIPIENT has requested or received any Confidential Information, or (c) any of the terms,
conditions or other facts with respect to any work performed by RECIPIENT as a subcontractor
to COMPANY, including the status thereof.16.
    
    This Agreement shall be construed in accordance with and governed by the laws of the State of
Delaware without regard to that States conflict-of-laws rules or principles requiring the
application of the laws of another jurisdiction. MEDICIS is an express third party
beneficiary of this Agreement, with full rights to enforce the provisions hereof as if a party
hereto.17.
    
    This Agreement contains the entire understanding between the parties with respect to the
matters contemplated herein and supersedes all previous written and oral negotiations,
commitments, and understandings. This Agreement cannot be altered or otherwise amended except
pursuant to an instrument in writing signed by each of the parties hereto and making specific
reference to this Agreement.
  4




---



##### 



COMPANY

    RECIPIENTBy:
    
    
    
    By:Name:

    
    
    Name:Title:

    
    
    Title:
 5




---



##### 



AGREEMENT OF QUALITY / TECHNICAL RESPONSIBILITY
    KEY CONTACTS:
   KEY CONTACTS:
 Area of Responsibility
    
    AAI
    
    MedicisQuality Assurance
    
    ***
    
    ***Regulatory Affairs
    
    ***
    
    ***Technical Services
    
    ***
    
    ***Medical Affairs
    
    ***
    
    ***Non-medical 
Product Complaints
    
    ***
    
    TBD
 
 *
    
    Key Quality Assurance contact Page 1 of 13




---



##### 



DEFINITIONS
  TERMS
 1.
    
    The term of this QT Agreement will begin on the Effective Date (see 3. below)
and will expire on the date of expiration or earlier termination of the Manufacturing
Terms.2.
    
    The parties will review this QT Agreement at least annually to verify that
the technical responsibilities allocated in this QT Agreement are current and valid.3.
    
    The Effective Date of this QT Agreement will be the signature date of the
last party to sign this QT Agreement. The QT Agreement shall be fully implemented
within thirty (30) days of the Effective Date.
 CHANGE CONTROL PROCESS
 Either party may propose updates, amendments, modifications, or supplements
(collectively, the Amendments) to this QT Agreement. No Amendment will be valid
or effective unless made in writing and signed by duly authorized officers of both
parties.
 Page 2 of 13




---



##### 



NO.
    
    RESPONSIBILITIES
    
    N/A
    
    Medicis
    
    AAI1
    
    
    COMPLIANCE REQUIREMENTS1.1
    
    
    Perform and maintain all
audit documentation
regarding supplier(s) of
Active Ingredient for the
Products.
    
    ***
    
    ***
    
    ***1.2
    
    
    Perform and maintain all
qualification
documentation regarding
suppliers of Components
for the Products.
    
    ***
    
    ***
    
    ***1.3
    
    
    Manufacture, test and
package Product in strict
adherence to the approved
drug application, cGMPs,
and Specifications.
    
    ***
    
    ***
    
    ***1.4
    
    
    *** shall not to
subcontract any of the
work to a third party
without prior written
agreement of ***, which
prior agreement shall not
be unreasonably withheld
or delayed. *** shall be
responsible for auditing
subcontractors to ensure
cGMP compliance.
    
    ***
    
    ***
    
    ***1.5
    
    
    Provide *** with copies
of all information
supporting annual Product
reports for Products
supplied to Medicis.
    
    ***
    
    ***
    
    ***1.6
    
    
    Provide *** with
copies/correspondence
regarding the approved
drug applications for the
Products.
    
    ***
    
    ***
    
    ***1.7
    
    
    Notify *** and have
written authorization
from *** prior to
implementing any proposed
changes to the
facilities, manufacturing
process, materials,
Specifications, and/or
testing that impact the
approved registration, or
that require
revalidation. Identify
for ***, in writing prior
to delivery, the first
manufactured Batch
incorporating any
approved changes.
    
    ***
    
    ***
    
    ***1.8
    
    
    Provide notification to
the other party of any
organizational and/or
personnel changes to
Quality Assurance,
Technical Services, or
Regulatory Affairs
Contacts.
    
    ***
    
    ***
    
    ***1.9
    
    
    *** will make every
reasonable effort to
provide copies of any
Form 483s, Warning
Letters, Field Alerts or
similar correspondence
from Governmental
Authorities within one
(1) business day of
receipt and subsequent
responses(s) relating to
the Products or processes
used to produce, test, or
package the Products
promptly thereafter. ***
approval is required for
responses related to the
Products.
    
    ***
    
    ***
    
    ***
 Page 3 of 13




---



##### 



NO.
    
    RESPONSIBILITIES
    
    N/A
    
    Medicis
    
    AAI1.10
    
    
    Notify *** within one (1) business day of
any circumstances likely to result in a
recall, Product withdrawal or field
correction, including any confirmed
Product failure.
    
    ***
    
    ***
    
    ***1.11
    
    
    Perform and maintain as current all
appropriate validation, including but not
limited to: process, analytical method,
cleaning, computer, and packaging.
    
    ***
    
    ***
    
    ***1.12
    
    
    Dispose of all production residue,
manufacturing rejects, tailings, other
chemicals, containers and packaging
materials associated with Products
manufactured for Medicis in compliance
with all applicable laws and regulations.
    
    ***
    
    ***
    
    ***1.13
    
    
    *** will notify *** within (2) two
business days, then proceed to promptly
investigate and resolve to the reasonable
satisfaction of *** all
Out-of-Specification results. *** to
review and approve any retesting
scenarios in OOS investigations.
    
    ***
    
    ***
    
    ***1.14
    
    
    Notify *** of any requests for
information, notices of violations or
other communication from a Governmental
Agency related to the Medicis Products or
processes promptly within no more than
two (2) business days after *** receipt
thereof.
    
    ***
    
    ***
    
    ***1.15
    
    
    Notify *** of any incident affecting
compliance to environmental, occupational
health and safety laws related to
handling *** Products or processes within
three (3) business days.
    
    ***
    
    ***
    
    ***2
    
    
    PRODUCTION AND TESTING OF BULK PRODUCT2.1
    
    
    *** to Maintain the Master Formula (or
Product structure). *** to review and
approve.
    
    ***
    
    ***
    
    ***2.2
    
    
    *** will maintain approved Specifications.
    
    ***
    
    ***
    
    ***2.3
    
    
    Provide consistent Batch identification
system for bulk manufacture. Immediately
notify *** of any proposed changes to
identification system prior to
implementation of any such changes.
    
    ***
    
    ***
    
    ***
 Page 4 of 13




---



##### 



NO.
    
    RESPONSIBILITIES
    
    N/A
    
    Medicis
    
    AAI2.4
    
    
    Qualify Active Ingredient suppliers.
    
    ***
    
    ***
    
    ***2.5
    
    
    Maintain Active Ingredient Specification, and ensure
compliance of the Specification with regulatory and
compendial requirements.
    
    ***
    
    ***
    
    ***2.6
    
    
    Procure Active Ingredient (include Certificate of
Analysis, COA, for the Active Ingredient). The Active
Ingredient shall have not less than *** left to
expiration upon receipt at AAI. Any exceptions to the
above must be approved in writing by AAI.
    
    ***
    
    ***
    
    ***2.7
    
    
    Store Active Ingredient.
    
    ***
    
    ***
    
    ***2.8
    
    
    Sample Active Ingredient.
    
    ***
    
    ***
    
    ***2.9
    
    
    Validate and/or transfer test method for Active
Ingredient to AAI. *** to approve the analytical
method.
    
    ***
    
    ***
    
    ***2.10
    
    
    Analyze Active Ingredient (include documentation, COA).
    
    ***
    
    ***
    
    ***2.11
    
    
    Release Active Ingredient.
    
    ***
    
    ***
    
    ***2.12
    
    
    Retain reference samples of Active Ingredient for a
minimum of *** beyond Product expiration date, of the
last lot using each batch of API.
    
    ***
    
    ***
    
    ***2.13
    
    
    Qualify inactive substance suppliers in accordance with
AAI policies. Qualification does not include on-site
audits.
    
    ***
    
    ***
    
    ***2.14
    
    
    Procure inactive substances (include COA).
    
    ***
    
    ***
    
    ***2.15
    
    
    Store inactive substances.
    
    ***
    
    ***
    
    ***2.16
    
    
    Sample inactive substances.
    
    ***
    
    ***
    
    ***2.17
    
    
    Validate and/or transfer test methods for the inactive
substances to ***.
    
    ***
    
    ***
    
    ***2.18
    
    
    Analyze inactive substances (include documentation, COA).
    
    ***
    
    ***
    
    ***2.19
    
    
    Release inactive substances.
    
    ***
    
    ***
    
    ***2.20
    
    
    Perform Process Validation. *** to review and approve.
    
    ***
    
    ***
    
    ***
 Page 5 of 13




---



##### 



NO.
    
    RESPONSIBILITIES
    
    N/A
    
    Medicis
    
    AAI2.21
    
    
    Perform Cleaning Validation. *** to review and approve.
    
    ***
    
    ***
    
    ***2.22
    
    
    Provide Bill of Materials (BOM) for bulk manufacture.
*** to review and approve.
    
    ***
    
    ***
    
    ***2.23
    
    
    Provide Manufacturing Transfer Document for transfer
within ***. *** to review and approve.
    
    ***
    
    ***
    
    ***2.24
    
    
    Prepare Manufacturing Instructions (Production
Operating Instructions). ***to review and approve.
    
    ***
    
    ***
    
    ***2.25
    
    
    ***will maintain Specification for bulk Product and
ensure compliance of the Specification with regulatory
and compendial requirements. ***will maintain
approved Specifications.
    
    ***
    
    ***
    
    ***2.26
    
    
    Produce bulk Product (include Batch documentation).
    
    ***
    
    ***
    
    ***2.27
    
    
    Document, investigate and resolve deviations from
approved manufacturing instructions or Specifications.
***to review and approve all deviations. ***to be
notified within (2) two business days of discovery of a
deviation.
    
    ***
    
    ***
    
    ***2.28
    
    
    Not to reprocess or salvage any partially processed or
fully processed materials without the written consent
of ***unless such activities are expressly allowed in
applicable approved regulatory documents.
    
    ***
    
    ***
    
    ***2.29
    
    
    Develop bulk Product sampling plan. ***to review and
approve.
    
    ***
    
    ***
    
    ***2.30
    
    
    Sample bulk Product.
    
    ***
    
    ***
    
    ***2.31
    
    
    Validate and/or transfer test method for bulk Product
to ***. ***to approve analytical method.
    
    ***
    
    ***
    
    ***2.32
    
    
    Analyze bulk Product.
    
    ***
    
    ***
    
    ***2.33
    
    
    Approve bulk Product for packaging.
    
    ***
    
    ***
    
    ***2.34
    
    
    Produce Certificate of Analysis for bulk Product.
    
    ***
    
    ***
    
    ***
 Page 6 of 13




---



##### 



NO.
    
    RESPONSIBILITIES
    
    N/A
    
    Medicis
    
    AAI2.35
    
    
    Retain reference samples of bulk Product for the period
of time specified in AAIs Standard Operating
Procedures.
    
    ***
    
    ***
    
    ***2.36
    
    
    Perform manufacturing facility, equipment and instrument
qualification, preventive maintenance and calibration.
    
    ***
    
    ***
    
    ***2.37
    
    
    Perform laboratory facility, equipment and instrument
qualification, preventive maintenance and calibration.
    
    ***
    
    ***
    
    ***2.38
    
    
    Perform stability storage and testing of bulk Product.
    
    ***
    
    ***
    
    ***3.
    
    
    INSPECTION, PACKAGING OF FINISHED PRODUCT3.1
    
    
    Maintain finished Product Specification, and ensure
compliance of the Specifications with regulatory and
compendial requirements.
    
    ***
    
    ***
    
    ***3.2
    
    
    Provide Batch identification system for finished Product.
    
    ***
    
    ***
    
    ***3.3
    
    
    Provide artwork and labeling text (blister, carton,
leaflet, label, etc.) to ***.
    
    ***
    
    ***
    
    ***3.4
    
    
    Perform labeling review and approval.
    
    ***
    
    ***
    
    ***3.5
    
    
    ***will provide Specifications for packaging materials,
and ensure compliance of the Specifications with
regulatory and compendial requirements. ***will
maintain approved Specifications.
    
    ***
    
    ***
    
    ***3.6
    
    
    Validate and/or transfer test method(s) for Product
packaging materials to ***. ***to approve analytical
methods.
    
    ***
    
    ***
    
    ***3.7
    
    
    Qualify packaging component and labeling suppliers in
accordance with AAI policies. Qualification does not
include on-site audits.
    
    ***
    
    ***
    
    ***3.8
    
    
    Procure packaging materials.
    
    ***
    
    ***
    
    ***3.9
    
    
    Analyze packaging materials.
    
    ***
    
    ***
    
    ***3.10
    
    
    Release packaging materials.
    
    ***
    
    ***
    
    ***
 Page 7 of 13




---



##### 



NO.
    
    RESPONSIBILITIES
    
    N/A
    
    Medicis
    
    AAI3.11
    
    
    Retain samples of labeling materials for a minimum of
*** past Product expiry date. [NOTE: Other packaging
materials need not be retained separately since they are
part of the finished Product retains].
    
    ***
    
    ***
    
    ***3.12
    
    
    Perform Packaging Validation. ***to review and approve.
    
    ***
    
    ***
    
    ***3.13
    
    
    ***will provide Bill of Materials (BOM) for packaging.
***to review and approve.
    
    ***
    
    ***
    
    ***3.14
    
    
    ***will prepare Packaging Instructions (Production
Operating Instructions for packaging). ***to review
and approve.
    
    ***
    
    ***
    
    ***3.15
    
    
    Perform packaging operations (include documentation).
    
    ***
    
    ***
    
    ***3.16
    
    
    Perform in-process controls during packaging (include
documentation).
    
    ***
    
    ***
    
    ***3.17
    
    
    Develop finished Product sampling plan consistent with
the Manufacturing Terms for retain and stability
samples. Provide finished Product release sampling plan
for ***review and approval.
    
    ***
    
    ***
    
    ***3.18
    
    
    Sample finished Product including retain samples,
stability samples, release samples, and customer
samples.
    
    ***
    
    ***
    
    ***3.19
    
    
    Retain reference samples of finished Product for a
minimum of one *** past Product expiry date.
    
    ***
    
    ***
    
    ***3.20
    
    
    Reconcile packaging materials.
    
    ***
    
    ***
    
    ***3.21
    
    
    Perform manufacturing facility, equipment and instrument
qualification, preventive maintenance and calibration.
    
    ***
    
    ***
    
    ***3.22
    
    
    Perform laboratory facility, equipment and instrument
qualification, preventive maintenance and calibration.
    
    ***
    
    ***
    
    ***3.23
    
    
    Document, investigate and resolve any deviations from
approved packaging instructions or Specifications. ***
to review and approve all deviations. Notify ***within
(2) two business days of discovery of deviations.
    
    ***
    
    ***
    
    ***
 Page 8 of 13




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##### 



NO.
    
    RESPONSIBILITIES
    
    N/A
    
    Medicis
    
    AAI4.
    
    
    TESTING AND RELEASE OF FINISHED PRODUCT4.1
    
    
    Validate and/or transfer test method(s) for finished Product
to ***. ***to review and approve.
    
    ***
    
    ***
    
    ***4.2
    
    
    Perform laboratory equipment and instrument qualification,
preventive maintenance and calibration.
    
    ***
    
    ***
    
    ***4.3
    
    
    Analyze finished Product.
    
    ***
    
    ***
    
    ***4.4
    
    
    ***to approve shipment of finished Product to ***. ***to
release Product for distribution.
    
    ***
    
    ***
    
    ***4.5
    
    
    Review Batch Record including all pertinent documentation
and data. Provide copy to ***for review.
    
    ***
    
    ***
    
    ***4.6
    
    
    Produce Certificate of Analysis for finished Product testing.
    
    ***
    
    ***
    
    ***4.7
    
    
    Perform stability storage and testing as requested by ***in
accordance with the Manufacturing Terms. Notify ***
immediately within (1) one business day, if the Product
fails to meet Specifications during stability testing.
    
    ***
    
    ***
    
    ***4.8
    
    
    Stability Testing Protocol
    
    ***
    
    ***
    
    ***Define protocol requirements.
    
    ***
    
    ***
    
    ***For each packaging configuration, place the *** production
Batches of Product on stability and then at least one Batch
annually.
    
    ***
    
    ***
    
    ***Pull stability samples as per the approved stability
protocol. Provide reviewed/approved test results to Medicis
within *** of completion of testing.
    
    ***
    
    ***
    
    ***Perform stability facility, equipment and instrument
qualification, preventive maintenance and calibration.
    
    ***
    
    ***
    
    ***4.9
    
    
    Establish approved expiration date.
    
    ***
    
    ***
    
    ***
 Page 9 of 13




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##### 



NO.
    
    RESPONSIBILITIES
    
    N/A
    
    Medicis
    
    AAI4.10
    
    
    Adverse Events and Product Complaints*** shall document Product complaints and
adverse event claims. *** shall notify the
others key contact as specified in the
Manufacturing Terms following receipt of any
Adverse Event or Product Complaint.
    
    ***
    
    ***
    
    ******shall promptly investigate any such
complaints. ***shall provide ***with a
summary of its investigation as soon as
practicable, but in no event later than ***.
Complaints designated by ***as high priority
complaints shall be investigated by ***within
***.
    
    ***
    
    ***
    
    ******shall respond to regulatory agencies and
reporters and shall be responsible for all
activities relating to medical surveillance.
    
    ***
    
    ***
    
    ***Complete follow-up corrective action.
    
    ***
    
    ***
    
    ***4.11
    
    
    Visually examine retain reference samples of
finished Product annually. Investigate if
required. Report all results to ***.
    
    ***
    
    ***
    
    ***4.12
    
    
    Perform Annual Product Review. Provide copies
of all information supporting annual Product
reporting to ***.
    
    ***
    
    ***
    
    ***4.13
    
    
    Prepare annual Product report and file with
applicable regulatory agencies.
    
    ***
    
    ***
    
    ***4.14
    
    
    Product Recall
    
    ***
    
    ***
    
    ***Decide to initiate recall.
    
    ***
    
    ***
    
    ***Notify appropriate regulatory agencies.
    
    ***
    
    ***
    
    ***Manage recall.
    
    ***
    
    ***
    
    ***Reconcile returned Product.
    
    ***
    
    ***
    
    ***
 Page 10 of 13




---



##### 



NO.
    
    RESPONSIBILITIES
    
    N/A
    
    Medicis
    
    AAI4.15
    
    
    Responsibility to AuthoritiesLiaison with Regulatory Authorities for
approval, maintenance and updating of drug
application.

    
    ***
    
    ***
    
    ***Liaison with Regulatory Authorities for any
site visits related to the Products produced
for Medicis. ***to notify*** promptly within
no more than one (1) business day after being
contacted regarding such site visits.

    
    ***
    
    ***
    
    ***Maintain safety/hazard and handling data on
Products and Active Ingredient.

    
    ***
    
    ***
    
    ***Maintain safety/hazard and handling data on
Components.

    
    ***
    
    ***
    
    ***4.16
    
    
    Special test requirements (specify):

    
    ***
    
    ***
    
    ***4.17
    
    
    Maintain all Batch Records for a minimum of ***
past Product expiry date and supply copies
(true or electronic) of all such records to
Medicis on request.

    
    ***
    
    ***
    
    ***5
    
    
    STORAGE AND TRANSPORTATION OF BULK PRODUCT,
FINISHED PRODUCT AND WASTE DISPOSAL5.1
    
    
    Store bulk Product up to packaging.

    
    ***
    
    ***
    
    ***5.2
    
    
    Store finished Product after release by Medicis.

    
    ***
    
    ***
    
    ***5.3
    
    
    Store all materials under appropriate
conditions of temperature, humidity, light and
cleanliness and in a manner to avoid
deterioration, theft, interference and Product
contamination.

    
    ***
    
    ***
    
    ***6
    
    
    DOCUMENTATION6.1
    
    

Provide *** with complete copies of Process
Validation reports for the first*** Batches of
each Product.
    
    ***
    
    ***
    
    ***
 Page 11 of 13




---



##### 



NO.
    
    RESPONSIBILITIES
    
    N/A
    
    Medicis
    
    AAI6.2
    
    
    Provide ***with complete copies of Packaging
Validation reports for each Product.
    
    ***
    
    ***
    
    ***6.3
    
    
    Provide the following documentation to ***for each
Batch:
    
    ***
    
    ***
    
    ***Executed Batch record, including copies of labeling
documenting expiration date and lot number
    
    ***
    
    ***
    
    ***Test results for Active Ingredient and Components (upon
request)
    
    ***
    
    ***
    
    ***Manufacturing release summary: Certificate of
Compliance (COC) statement indicating Product
conformance with cGMP, signed by the responsible
Quality individual performing Product approval
    
    ***
    
    ***
    
    ***If Product release testing is performed by ***, testing
release summary, Certificate of Analysis (COA),
including:
    
    ***
    
    ***
    
    ***- Tests performed- Test methods used- Test Specifications- Test results including retest results if required- Date of release- Signature of responsible Quality individual performing testing release
 Page 12 of 13




---



##### 



Medicis
    
    
    
    AAIQuality Assurance Approval:Name: Mark A. Prygocki, Sr.
    
    
    
    Name:(Print/Type)
    
    
    
    (Print/Type)Title: Chief Financial Officer
    
    
    
    Title:Signature:
    
    
    
    Signature:Date:
    
    
    
    Date:
 AAIExecutive Approval:Name:(Print/Type)Title:Signature:Date:
 Page 13 of 13