Document:

Exhibit 10.11

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

	
  Confidential
  treatment has been requested for portions of this exhibit. The copy filed
  herewith omits the information subject to the confidentiality request. Omissions
  are designated as [*]. A complete version of this exhibit has been filed
  separately with the Securities and Exchange Commission.

  

 

Execution
Copy

SUPPLY AGREEMENT

This Agreement is entered
into on this 20 day of March, 2007 (the “Effective Date”), by and between MonoSolRx LLC, a Delaware limited liability
company with its corporate headquarters at 30 Technology Drive, Warren,
New Jersey (“Supplier”) and L. Perrigo Company, a Michigan corporation,
having an address of 515 Eastern Ave., Allegan, Michigan (“Perrigo”), each
a “Party” and collectively “the Parties.”

WHEREAS, Supplier has
experience developing and manufacturing a Product as that term is used herein;

WHEREAS, Perrigo desires
to have its requirements for said Product in the Territory, as that term is
used herein, fulfilled by Supplier; and

WHEREAS, Supplier desires
to supply Perrigo with said Product in said Territory;

NOW, THEREFORE, in
consideration of the mutual promises contained in this Agreement and for other
good and valuable consideration, the adequacy and sufficiency of which are
hereby acknowledged, the Parties, intending to be legally bound, hereby agree
as follows.

ARTICLE 1
- DEFINITIONS

“Acceptable Service Level”
means Supplier supplying to Perrigo during each rolling period of ninety (90)
consecutive days that quantity of Product that conforms to the requirements of
this Agreement which represents at least 95% of Perrigo’s ordered quantities of
the Product that are required to be delivered to Perrigo during that 90 day
period by the delivery terms of this Agreement.

“Act” means the Federal
Food, Drug and Cosmetic Act, as amended, and the regulations promulgated under
such Act.

“Affiliate” means any
corporation, firm, partnership or other entity, which directly or indirectly
owns, is owned by or is under common ownership with the party in question to
the extent of at least fifty (50) percent of the stock of such entity having
the power to vote for the election of directors, such to be deemed an Affiliate
only as long as such ownership of voting stock continues.

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

“Agent-in-Charge”
means an individual appointed by a Party to be responsible for directly
interacting with individuals conducting an audit and facilitating those
individuals in the performance of the audit as necessary.

“API” means
Diphenhydramine HCI.

“GMP” means all laws,
guidelines and regulations applicable to the manufacture of the Product
including the current Good Manufacturing Practices as specified in the United
States Code of Federal Regulations, as the same may be amended from time to
time.

“COA”
means Certificate of Analysis by Supplier in
letter form or on its letterhead (a)  stating Supplier’s name, the Product
description as listed on Perrigo’s purchase order, the Supplier product code,
the Perrigo product code as listed on Perrigo’s purchase order, the Product
batch/lot number, date of manufacture, date of release, expiration date,
quantity of shipment, each assay/test and method number, the Specification
limits of each assay/test, the physical, chemical, biological or other test
results and % label claim for each API, the correct units of measure to be
reported with all assorted values, and the Specifications of or relating to the
Product, (b) certifying that the Product meets the Specifications, the
Product has been manufactured in accordance with GMP, the Specifications and
such other agreed upon requirements of the Parties for the manufacture and
packaging of the Product, and the materials used in the manufacture of the
Product meet the appropriate requirements of the United States Pharmacopoeia
and National Formulary, including any supplements thereto, and
(c) containing such other information as Perrigo may request from time to
time.

“Certificate
of Compliance” means a document or a statement in the COA that each lot
received by Perrigo complies with manufacturing requirements for the
appropriate regulatory authority (e.g., U.S. GMP).

“Confidential
Information” means all information, data, know-how and all other business,
technical and financial data disclosed hereunder by one party or any of its
Affiliates to the other party or any of its Affiliates, except any portion
thereof which:

(a)                                 At the time of disclosure is in the
public knowledge;

(b)                                 After disclosure, becomes part of the
public knowledge by publication or otherwise, except by breach of this
Agreement by the recipient;

(c)                                  The recipient can demonstrate by its
written records was in the recipient’s possession at the time of such
disclosure, and which was not acquired, directly or indirectly, from the
disclosing party, or its affiliates;

(d)                                 Is lawfully disclosed to the recipient on
a non-confidential basis by a third party who is not obligated to the
disclosing party or any other third party to retain such Confidential
Information in confidence;

(e)                                  Is required to be disclosed by legal
process; provided, in each case the party so disclosing information timely
informs the other party and uses its best efforts to 

 

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CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

limit the disclosure and maintain confidentiality to the extent
possible and permits the other party to attempt by appropriate legal means to
limit such disclosure.

Supplier’s
Confidential Information includes, without limiting the generality of the
foregoing, but subject to the exclusions set forth in (a) through
(e) above, all material or information relating to Supplier’s research,
development, trade secrets or business operations and affairs that Supplier
treats as confidential and all Intellectual Property Rights owned by Supplier.

Written
Confidential Information shall be identified by the disclosing party as being
confidential by stamping the cover pages of such information “Confidential.”  Confidential Information disclosed orally,
visually and/or in another tangible form shall be identified by the disclosing
party to the receiving party as confidential at the time of such disclosure and
confirmed to the receiving party within thirty (30) days after such disclosure
in a writing marked “Confidential.”

“FDA” means the United
States Food and Drug Administration and any successor agency having
substantially the same function.

“Intellectual Property
Rights” means all patents, copyrights, trade secrets and other intellectual
property rights, including applications therefor, now or hereafter protectable
by law in any jurisdiction in the world.

“Invention” means any new
or improved apparatus, process, composition, formula, information, product,
invention, discovery, idea, suggestion, material, data, equipment, design,
drawing, prototype, report, computer software, documentation or other
intellectual property or know-how invented, discovered, produced, conceived, or
reduced to practice by Supplier, or as a result of the performance of the
development and manufacture of the Product.

“Product” shall mean a
grape-flavored film product that contains Diphenhydramine HCl 12.5 mg
individually pouched meeting the Specifications set forth in Exhibit 1.

“Significant Deviation” means any out-of-Specification Product
and/or any manufacturing (including but not limited to a defect or latent
defect), packaging, labeling or testing deviation that may affect the quality,
safety or efficacy of the Product, including but not limited to any
reprocessing.

“Specifications” means
the written specifications for the Product as set forth in Exhibit 1.  The specifications may be amended from time
to time upon the mutual agreement of the Parties in writing.  Perrigo shall not unreasonably withhold
acceptance of amendments to the Specifications which the Parties agree are
necessary to comply with FDA requirements or any other applicable rules or
regulations.

“Territory” means the
United States, Canada, and Mexico.

“Supplier Intellectual
Property” means any Intellectual Property Rights owned by Supplier.

“Third Party Facility”
means a facility that is not owned by Supplier.

 

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CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

ARTICLE 2-
DEVELOPMENT

2.1          Milestone Events: 
Supplier shall use commercially reasonably efforts and due diligence to
develop the Product and to undertake and successfully complete within the time
periods below the following tasks in connection with the development of the
Product in accordance with the following milestone events:

(a)           Milestone 1:  Preformulation and Development.  Supplier shall undertake preformulation and
formulation development tasks as set forth in Exhibit 2.  The total time for completion of the tasks
for Milestone 1 to the mutual satisfaction of the Parties shall be about
12 to 14 weeks with an anticipated completion date of March 23, 2007.

(b)           Milestone 2:  Manufacture of Pilot Stability Batch at
One-Tenth Scale.  Supplier shall
undertake tasks for the manufacture of a pilot stability batch as set forth in Exhibit 2.  The total time for completion of the tasks
for Milestone 2 to the mutual satisfaction of the Parties shall be about 6
to 8 weeks with an anticipated completion date of April 6, 2007.

(c)           Milestone 3:  Scale-up and Manufacture of Three
Validation/Launch Batches at Commercial Scale.  Supplier shall undertake the tasks for the
manufacture of three validation/launch batches at commercial scale.  The total time for completion of the tasks
for Milestone 3 to the mutual satisfaction of the Parties shall be about
12 to 16 weeks with an anticipated date of completion and shipment of the three
validation/launch batches to Perrigo date of not later than August 15, 2007.

Supplier shall keep
Perrigo promptly and regularly informed of the progress of Supplier’s
development work under this Agreement.

2.2          Assumptions.

(a)           Supplier shall develop a pilot
stability batch meeting the Specifications set forth in Exhibit 1
hereto on a laboratory scale.  The pilot
stability batch size will be at a minimum of one-tenth the scale of the Product
to be supplied to Perrigo in accordance with the terms of this Agreement and
shall have a commercial shelf-life based on a three-month accelerated
stability.

(b)           All tasks are not cumulative.  In some instances, parallel tasks may occur.

(c)           All protocols for the development of
the pilot stability batch shall be written by Supplier and shall be subject to
reasonable review and acceptance by Perrigo. 
Perrigo agrees not to unreasonably withhold acceptance of the
protocols.  If such acceptance is
unreasonably withheld, Supplier may terminate this Agreement.

2.3          Expenses.

(a)           Perrigo shall bear the expenses
associated with Supplier generating two-year stability data in accordance with
the guidelines of the International Conference on Harmonization
of Technical Requirements for Registration of Pharmaceuticals for Human Use 

 

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CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

(ICH).  Attached to this Agreement as Exhibit 3
is Supplier’s good faith estimate of the total amount of these expenses.

(b)           Supplier shall bear all expenses
associated with obtaining raw materials including active pharmaceutical
ingredients for use in the development of the pilot stability batch and the
validation/launch batches and all expenses associated with obtaining packaging
materials.  The Parties understand and
agree that Supplier shall not be responsible for the cost of developing the
validation/commercial launch batches provided that such batches comply with the
warranties and other requirements of this Agreement with respect to Product
supplied to Perrigo.  Except as set forth
above, Supplier shall be responsible for all third party charges and all labor
and material costs incurred in developing the Product.

2.4          Sale and Purchase of
Validation/Commercial Launch Batches.  Supplier
shall sell the validation/commercial launch batches to Perrigo and Perrigo
shall purchase the validation/commercial launch batches provided that such
batches comply with the warranties and other requirements of this Agreement
with respect to Product supplied to Perrigo. 
The price for the validation/commercial launch batches shall be [*].  Supplier shall
validate commercial batches of approximately [*],
and shall not pouch more strips than are required by validation requirements
and Perrigo’s initial needs.  Supplier
will charge Perrigo no more than $[*] for strips
manufactured in connection with validation which are not pouched.

2.5          Development Payments. 
Perrigo shall make payments to Supplier in accordance with the following
schedule:

(a)           Upon Supplier’s successful completion
to mutual satisfaction of the Parties of the preformulation and formulation
tasks for Milestone 1 as set forth in Exhibit 2, Supplier will
invoice Perrigo the sum of $[*].

(b)           Upon Supplier’s successful completion
to the mutual satisfaction of the Parties of the tasks for the manufacture of a
pilot stability batch at one-tenth scale for Milestone 2 as set forth in Exhibit 2,
Supplier will invoice Perrigo the sum of $[*].

(c)           Upon Supplier’s successful completion
to the mutual satisfaction of the Parties of the tasks for the scale-up and
manufacture of three validation/launch batches at commercial scale as set forth
in Exhibit 2, Supplier will invoice Perrigo the sum of $[*].

Perrigo will pay such
invoices within forty-five (45) days of their receipt.

ARTICLE 3
- PRODUCT SUPPLY

3.1          Purchase and Sale. 
Pursuant to the terms and conditions of this Agreement, Supplier agrees
to use diligent and commercially reasonable efforts to manufacture and package
sufficient Product to meet Perrigo’s requirements for sale of Product in the
Territory.  Supplier may, with Perrigo’s
prior written consent, subcontract with third parties for the manufacture or
packaging of Product to fulfill its obligations hereunder.  Except as otherwise provided in this
Agreement, Perrigo agrees to source exclusively from Supplier all of Perrigo’s
requirements for Product for sale in the Territory.

 

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CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

3.2          Exclusivity.

(a)           During the term of this Agreement,
Supplier shall not, directly or indirectly, develop or manufacture for, or
sell, supply or distribute to, any person or entity other than Perrigo any film
product in any flavor that contains the API for marketing, sale or distribution
under any store brand, value brand or other brand other than under a national
pharmaceutical company’s over-the-counter brand.

(b)           If Perrigo does not order a total of
at least [*] doses of Product from Supplier
during each calendar year beginning in the second year of this agreement, then,
as the sole consequence, Supplier shall have the right, exercisable by
sixty (60) days’ prior written notice to Perrigo, to terminate
prospectively the exclusivity restrictions of Supplier and Perrigo’s
corresponding exclusivity rights set forth in Section 3.2(a) unless
within thirty (30) days after its receipt of such notice, Perrigo submits
to Supplier an order for Product in an amount of not less than the amount of
such shortfall.  If Supplier should so
terminate such exclusivity rights and restrictions, then this Agreement shall
otherwise remain in full force and effect, including Supplier supplying the
Product to Perrigo in accordance with the provisions of this Agreement, but
Perrigo shall not be required to purchase its requirements of the Product from
Supplier.  Supplier shall not, however,
have the right to terminate such exclusivity rights or restrictions if Perrigo
does not order the requisite quantity of Product as a result of (i) Supplier’s
default in performing or complying with any covenant or obligation required to
be performed or observed by Supplier in this Agreement, (ii) a force
majeure situation described in Article 9, or (iii) the FDA or
any other governmental agency taking any action the result of which is to
prohibit or impose a significant restriction on the nonprescription,
over-the-counter marketing, sale or distribution of the Product in the U.S. or
taking any action that has a similar effect. 
Any Product (or comparable product) that Perrigo orders from another
source pursuant to Section 3.11 or Section 4.3 will be
considered to be ordered from Supplier for purposes of this Section 3.2(b).

3.3          Sale Outside the Territory. 
Under no circumstances shall Perrigo sell, resell, distribute or
otherwise dispose of Product and/or any part thereof, directly or indirectly,
outside the Territory without the prior written consent of Supplier.

3.4          Forecast.  Prior to
July 1 of each year of this Agreement, Perrigo shall submit to Supplier
forecasts of quantities of Product Perrigo intends to have delivered during the
following calendar year (budget-quantities). 
Perrigo shall update the forecast for the following twelve (12) month
period on a monthly basis (capacity-planning-quantities).  The budget- and capacity-planning-quantities
are understood to be non-binding forecasts.

3.5          Order Forms. 
It is understood that the Parties may use their normal commercial forms
in placing and acknowledging orders hereunder. 
Any such forms shall be used for convenience only, and any terms or
provisions which may be contained therein inconsistent with or in addition to
those contained herein, other than the identification of the Product being
ordered, its quantity and its delivery date, shall have no force or effect
whatsoever between the Parties hereto. 
Orders shall be consistent with validated batch quantities.

3.6          Firm Orders. 
Firm orders shall be submitted to Supplier at least three (3) months
prior to Perrigo’s specified delivery date. 
Within ten (10) working days Supplier shall confirm 

 

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CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

receipt of Perrigo’s
order (order confirmation).  If Perrigo
makes any changes to a firm order after it is submitted to Supplier that result
in additional costs reasonably being incurred by Supplier, Supplier will notify
Perrigo of those costs and Perrigo agrees to bear those costs, including
restocking costs resulting from excess material due to such changes, costs
resulting from graphic changes requested by Perrigo, and material waste due to
changes requested by Perrigo.

3.7          Delivery.  Delivery of
Product from Supplier to Perrigo shall take place either FOB Supplier’s
facility in Portage, Indiana or FOB the facility of Supplier’s contract
packager approved by Perrigo, except Supplier or Supplier’s contract packager
approved by Perrigo, as applicable, shall be responsible for loading Product on
Supplier’s receiving carrier.  Supplier
shall ship bulk pouched Product, packaged and labeled per the Specifications,
directly to the address and facility specified on Perrigo’s purchase order form
or as otherwise directed by Perrigo in writing.

3.8          Certificates of Compliance and Analysis. 
Supplier shall separately package and label any production lot, in whole
or in part, supplied to Perrigo. 
Supplier shall separately provide Perrigo with Certificates of Analysis
and Certificates of Compliance, in the English language, related to Product for
each production lot released for delivery. 
The Certificates of Analysis will document that each production lot
received by Perrigo conforms to the Specifications.  The Certificate of Compliance will document
that each lot received by Perrigo complies with GMP.  A copy of each certificate shall be included
with each production lot delivered to Perrigo. 

3.9          Tamper Evident Seals. Supplier will use pallets, containers,
container liners, labels and tamper evident seals that are mutually acceptable
to Supplier and Perrigo.

3.10        Shortages/
Rejected Goods.

(a)           Shortages.  Perrigo shall notify Supplier in writing of
any shortage in quantity of any shipment of Product within forty-five (45)
business days after becoming aware of any such shortage.  In the event of such shortage, Supplier shall
make up the shortage within seven (7) business days if replacement Product
stock is available, or, if no such replacement stock is available, as soon as
reasonably practicable after receiving such notice, at no additional cost to
Perrigo.

(b)           Rejected Product.  If Perrigo has a reasonable belief that any
Product it receives has a Significant Deviation, Perrigo shall promptly notify
Supplier after such discovery, and Supplier shall use best efforts to initiate
a full investigation within ten (10) business days of being informed of the
alleged Significant Deviation by Perrigo and shall complete such investigation
within thirty (30) days.  Supplier shall
promptly report the results of such investigation to Perrigo.  In the event of a dispute regarding whether
any Product meets the Specifications or otherwise has a Significant Deviation,
Perrigo shall submit a sample of such Product to a mutually acceptable
independent laboratory for testing and the test results obtained by such laboratory
shall be final and controlling.  The fees
and expenses of such laboratory testing shall be borne entirely by the Party
against whom such laboratory’s findings are made.  In the event the test results indicate that
Product in question fails to meet the Specifications, or 

 

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CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

otherwise has a
Significant Deviation, Supplier shall replace such Product, at no additional
cost to Perrigo, as soon as reasonably possible, but in no event later than
twenty (20) business days after receipt of such results.  In the event the test results indicate that
Product in question does meet the Specifications and does not have a
Significant Deviation, Perrigo shall pay all additional shipping and
transportation costs for such Product.

(c)           Capacity Allocation.  In the event Supplier, upon receiving a
forecast or a firm order is, or anticipates that it will be, unable to meet
such forecast or firm order, either in whole or in part, then Supplier shall
give Perrigo written notice of such inability or potential inability within
twenty (20) days of receipt of such forecast or firm order.  Supplier and Perrigo shall meet within twenty
(20) days of such written notice to consider alternatives for meeting Perrigo’s
requirements for Product, including, but not limited to, third parties
outsourcing and expanding Supplier’s manufacturing capacity.

3.11        Right
to Obtain Products From Other Sources. 
If at any time or times during the term of this Agreement for any reason
(including an event described in Article 9) either (a) Supplier
notifies Perrigo that Supplier cannot supply all of Perrigo’s requirements of
the Product on the delivery dates required by this Agreement, or (b) during
any period of ninety (90) consecutive days Supplier does not supply Perrigo
with at least 95% of Perrigo’s
ordered quantities of the Product that are in compliance with the
Specifications and other requirements of this Agreement and that are required,
in accordance with the delivery terms specified in this Agreement, to be
delivered to Perrigo during that ninety (90) day period, then Perrigo may, in
addition to its other rights and remedies, obtain all or any part of its
requirements of the Product (or any comparable product) from other sources and
any such purchases from other sources will be excluded from Perrigo’s
requirements under this Agreement.  If Perrigo so obtains the Product or a
comparable product from another source and thereafter (i) Supplier is able
to resume supplying the Product to Perrigo in accordance with the provisions of
this Agreement, and (ii) Supplier notifies Perrigo in writing that
Supplier desires and is able to resume supplying the Product to Perrigo under the
terms of this Agreement and Supplier provides reasonable assurances of its
ability to do so to Perrigo, then Perrigo will resume purchasing the Product
from Supplier and Supplier will resume supplying the Product to Perrigo in
accordance with the provisions of this Agreement as quickly as commercially
possible after Perrigo satisfies any then outstanding agreement or commitment
to purchase the Product or any comparable product from another source.

3.12        As a condition precedent to the sale of
the Product by Perrigo in Canada and/or Mexico, Perrigo shall be responsible
for obtaining any foreign registrations (i.e., regulatory approval) which may
be needed for marketing and/or sale of the Product in Canada and/or Mexico.

ARTICLE 4 - PRICE

4.1          Price.  The initial
price of the Product is set forth in Exhibit 4.  On or about April 1 of each year,
beginning April 1, 2008, the Parties will review the price of the Product,
and the price of the Product will be increased or decreased by mutual agreement
of the Parties effective the following July 1, commencing July 1,
2008 [*]. 
The price of the Product is also subject to the adjustments set forth in
Section 4.2 and Section 4.3, with any price adjustment
under Section 4.2 or Section 4.3 taking priority over
any price adjustment 

 

8

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

under this Section 4.1.  Perrigo shall settle invoices within
forty-five (45) days following the date of invoice.

4.2          [*].

ARTICLE 5 - MANUFACTURING,
SPECIFICATIONS AND INSPECTION

5.1          Good Manufacturing Practices. 
Supplier shall manufacture, or as permitted by this Agreement, have
manufactured, Product to meet GMP, all laws, guidelines and regulations
applicable to the manufacture of Product within the Territory, and the terms
and requirements set forth in this Agreement.

5.2          Specifications. 
Supplier shall manufacture, or as permitted by this Agreement, have
manufactured, all Product it supplies to Perrigo in accordance with the
specifications, GMP and all applicable legal requirements.

5.3          Facilities.  Supplier
shall manufacture and package, or as permitted by this Agreement, have
manufactured or packaged, Product only at facilities that (a) have been
registered for the manufacture or packaging of Product with the FDA and any
other regulatory authority in the Territory, (b) have been approved by
Perrigo, (c) are GMP compliant, and (d) are in good standing with the
FDA.

5.4          Non-conformance. Supplier will notify Perrigo within two
(2) business days of learning and/or receiving notice, whether before or after
delivery of the affected Product to Perrigo, that any Product contains a
Significant Deviation, foreign material, contaminant, defect or latent defect,
Supplier will thoroughly investigate and document all such events.

5.5          Batch Documentation. 
Supplier agrees to prepare and complete all appropriate and required
manufacturing, production and packaging batch documentation for each batch of
Product and to retain such documentation pursuant to an appropriate document
retention schedule that complies with all applicable regulatory
requirements.  Supplier will make any
such documentation available for review and inspection at Supplier’s facilities
by Perrigo and/or regulatory personnel. Representatives of Supplier may be
present during such inspections at the discretion of Supplier.  Perrigo must supply at least two weeks
written notice to Supplier of its intent to inspect unless such inspection is
prompted by a quality problem.  The time
for inspection must be reasonable and mutually acceptable.

5.6          Test Method Validation. 
Supplier agrees to provide Perrigo with the technology and know-how
required to perform and validate all test methods used to characterize and
release Product.  Supplier will also
supply reference standards to Perrigo, as needed, to perform test method
validation and periodic audit testing of Product.

5.7          Direction by Perrigo. 
Perrigo reserves the right to (a) require Supplier to make
adjustments to the composition and/or processes that are required to meet FDA
standards or requirements; (b) review the validation protocols prior to
Supplier’s processing Product; (c) review validation data and reports
prior to delivery of Product to Perrigo; and (d) request 

 

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CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

additional or more
in-depth investigations by Supplier of any Significant Deviation.  Supplier shall provide to Perrigo copies of
all manufacturing batch records, validation protocols, reports, and summaries
of raw data related to validation activities.

5.8          Stability.  Supplier will
conduct and maintain the regulatory stability program that meets Specification
for the shelf-life of the marketed Product (as determined by the expiration
dating of the Product).  Supplier will
provide Perrigo with yearly stability reports and an Annual Product Summary
(summary of lots produced, complaints, out of specification results, etc.).

5.9          Process Validation. 
Supplier will complete validation of its equipment, facilities, cleaning
processes, and manufacturing process as required by the GMP.  Supplier will routinely assemble and retain
validation/qualification documents and prepaid validation summary reports
relevant to the Product and will make them available for inspection by Perrigo
at Supplier’s facilities.

5.10        Inspection; Adjustments. 
Perrigo has the right to inspect the manufacturing and testing sites and
premises of Supplier, which includes (but is not limited to) the right of
Perrigo representatives to enter such sites and premises, the right to inspect
any machines used in the manufacture and testing of Product, and the right to
take reasonable amounts of samples for analysis by Perrigo, regardless of
whether such premises are those of Supplier, its subcontractor or
Affiliate.  This right of inspection can
be exercised at least once a year, subject to a written notice to Supplier, at
least two weeks prior to the inspection unless such inspection is prompted by a
quality problem.  Supplier shall permit
such inspection at reasonable and mutually acceptable times.  Perrigo reserves the right to request Supplier
to make adjustments to Supplier’s systems to meet Perrigo Corporate Policies
and Standards for quality, environmental and safety practices (the “Standards”).  Supplier will use commercially reasonable
efforts to adjust its systems to meet the Standards.  Perrigo will provide Supplier with the
Standards and any updates of the Standards. 
Under the same terms and conditions, Supplier shall have the right to
inspect Perrigo’s warehouses, specifically used for the storage, testing and
packaging of Product.

5.11        Auditing of Suppliers. 
Supplier is responsible for auditing the suppliers of all materials and
excipients used in the manufacture and packaging of Product.  Supplier will use its best efforts to obtain
the authorization from such Supplier suppliers as required in order to enable
Perrigo’s representatives to participate in all audits of Supplier’s
suppliers.  Supplier will provide to
Perrigo, upon Perrigo’s request, the results from any such audit of Supplier’s
suppliers.

5.12        Regulatory Actions. 
Supplier and Perrigo shall promptly inform each other in writing of any
inspection, application for inspection, and other regulatory action, by any
regulatory agency within the Territory, relating to Product or the manufacture
of Product.  Each party will permit the
other’s representatives to be present in the premises during any such inspection.  Inspections will be managed by the premises’
Agent in Charge.  The Agent in Charge
will determine at his/her sole discretion the need for Perrigo and/or Supplier
personnel to directly interact with the inspector(s) and/or be present in the
inspection room.  Each party will provide
the other with the results of all regulatory inspection or audits with fourteen
(14) business days after such party’s receipt of such results.

 

10

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

5.13        Testing.  Supplier, its
Affiliates and/or third-party designates must test and inspect all Product and
appropriately document such efforts.  No
Product shall be shipped by Supplier, its Affiliates or third-party designates
unless the tests of Supplier, its Affiliates or third-party designates,
performed in accordance with procedures set forth in the Specifications, show
that Product meets the standards set forth in the Specifications.

5.14        Required Regulatory Changes. 
Should Supplier learn or receive notice of any changes that are required
by the regulatory authorities within the Territory with respect to the quality
and/or manufacture of Product, it shall promptly notify Perrigo of such
required changes.  Supplier shall
implement such changes within the time frame required by the regulatory
authorities.

5.15        Notice of Changes. 
Supplier must obtain the prior written consent of Perrigo before making
any changes to the Specifications, the method of manufacture of Product, the
facilities at which and/or the equipment in which Product is made, the
materials and/or source of materials used in the manufacture of Product, Drug
Master File, test methods, and/or the validated processes associated with the manufacture
of Product.  Perrigo will not
unreasonably withhold its consent to a change to the Specifications that the
Parties agree is necessary to comply with FDA requirements or any other
applicable rules or regulations.  Any
changes in or to the Specifications, Drug Master File, method of manufacturing,
the facility or location of manufacture, the equipment used to manufacture, the
materials and/or source of materials used in manufacturing, or the process of
testing and/or manufacturing Product shall, in each case, comply with GMP and
all applicable laws, regulations, FDA requirements and the terms and conditions
of this Agreement.  Upon providing
Perrigo with the required written notice of any such change, Supplier shall (a) immediately
provide Perrigo with all relevant information regarding the change, (b) refrain
from proceeding with the change until it receives written consent or approval
from the FDA, if such consent is necessary, (c) be responsible, at its
expense, to ensure that all Product manufactured following the change meets the
Specifications, (d) appropriately document any such change, and (e) amend
any necessary regulatory filings maintained with respect to Product.  Supplier shall continue to supply Perrigo
with Product approved under Supplier’s existing regulatory files for Product
until such time as the proposed change is permitted under the regulatory
filings for Product.

5.16        Storage.  Supplier
shall adhere to any and all applicable regulations and GMP relative to the
storage of Product and any material used to manufacture Product.  In no event shall Supplier manufacture,
process, package, use or store any other product that may present a potential
hazard to Product or the material used to manufacture Product, including but
not limited to highly potent drugs and hormones, biological preparations, and
non-pharmaceutical chemicals, in the same facilities and/or equipment used for
manufacturing Product.  Nor will Supplier
dispose of and/or destroy any waste product, waste material, or labeling
materials in a manner contrary to all applicable regulatory and environmental
laws.

5.17        Samples.  Supplier
shall store and retain sufficient samples of (a) Product that it supplies
to Perrigo, and (b) materials released for and used to manufacture and package
Product (except water, compressed gases and highly volatile compounds) in
conditions and for times consistent with all applicable regulations and GMP and
to permit any and all appropriate or required internal and regulatory checks
and references.

 

11

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

5.18        Storage Conditions. 
Supplier agrees to store Product labeling material under appropriate
controlled and secured conditions.

5.19        Inspection of Materials. 
Supplier agrees to inspect all container materials, upon receipt by
Supplier or its suppliers or agents, for external condition, intact and
authentic seals, and compliance of the type and number of containers and labeling
set forth in the delivery of the documents on a batch-by-batch basis.

5.20        Quality Agreement. 
Attached to this Agreement as Exhibit 5 and made a part of
this Agreement is a separate quality agreement between the Parties (the “Quality
Agreement”) that applies to all Product that Supplier supplies to Perrigo.  Any breach of the provisions of the Quality
Agreement shall constitute a breach of this Agreement.  If there is any conflict, inconsistency or
ambiguity between the provisions of the Quality Agreement and the provisions of
this Agreement, then the provisions of this Agreement will govern.

ARTICLE 6
- PRODUCT RECALLS/INQUIRIES AND COMPLAINTS

6.1          Product Recalls. 
In the event (a) any government authority issues a request,
directive or order that Product be recalled, (b) a court of competent
jurisdiction orders such a recall, or (c) Supplier or Perrigo shall
reasonably determine that Product should be recalled, the Parties shall
immediately notify each other and shall take all appropriate corrective actions,
and shall cooperate in the investigations surrounding the recall.  Perrigo shall be responsible for making the
final decision of whether a recall of any Product is necessary or appropriate
and for conducting any recalls with respect to Product, and Supplier shall not
take any associated corrective action without first conferring with and
obtaining the approval of Perrigo, provided, however, that Supplier shall not
be prohibited by this section from taking any action that Supplier determines,
after conferring with Perrigo, is required by any applicable law, rule or
regulation. Supplier shall be responsible for all expenses of any such recall
to the extent that such recall results from or arises out of the negligence or
willful misconduct of, or any breach of any representation, warranty, covenant
or obligation of or by, Supplier, any Affiliate of Supplier or any third party
subcontractor engaged by Supplier. 
Perrigo shall be responsible for all expenses of any such recall to the
extent the recall does not result from or arise out of the negligence or
willful misconduct of, or any breach of any representation, warranty, covenant
or obligation of or by, Supplier, any Affiliate of Supplier, or any third party
subcontractor engaged by Supplier.  For
purposes of this Agreement, the expenses of a recall shall include the expenses
of notification and destruction or return of the recalled Product and all other
costs incurred in connection with such recall.

6.2          Inquiries and Customer Complaints. 
Except as otherwise required by law or governmental regulation, Perrigo
will be responsible for investigating and responding to all inquiries,
complaints and adverse events regarding Product.  Supplier agrees to provide assistance on the
non-medical evaluation, providing manufacturing or test- results related
information and related assistance as Perrigo may reasonably request.

6.3          Claims; Other Actions. 
As soon as it becomes aware, each Party will give the other prompt
written notice of any defect or alleged defect in a Product, any injury alleged
to have occurred as a result of the use or application of a Product, and any
circumstances that may 

 

12

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

reasonably be
expected to give rise to litigation or recall of a Product or regulatory action
that may affect the sale or manufacture of a Product, specifying, to the extent
the Party has such information, the time, place and circumstances thereof and the
names and addresses of the persons involved. 
Each Party will also furnish promptly to the other copies of all papers
received in respect of any claim, action or suit arising out of such alleged
defect, injury or regulatory action.

ARTICLE 7
- CONFIDENTIALITY

7.1          Term.  Except as otherwise provided in this Article,
during the term of this Agreement, including any renewals thereof, and for a
period of ten (10) years thereafter:

Supplier will retain in
confidence and use only for purposes of this Agreement any Confidential
Information disclosed by Perrigo or on behalf of Perrigo to Supplier under this
Agreement; and

Perrigo will retain in
confidence and use only for purposes of this Agreement any Confidential
Information disclosed by Supplier or on behalf of Supplier to Perrigo under
this Agreement.

7.2          Exceptions. 
To the extent it is reasonably necessary or appropriate to fulfill its
obligations or exercise its rights under this Agreement or any rights which
survive termination or expiration hereof, each party may disclose Confidential
Information to its Affiliates, sublicensees, consultants, outside contractors,
clinical investigators or other third parties on condition that such entities
or persons agree (a) to keep the Confidential Information confidential for
the same time periods and to the same extent as each party is required to keep
the Confidential Information confidential, and (b) to use the Confidential
Information only for such purposes as such party is entitled to use the
Confidential Information.  Each party or
its Affiliates or sublicensees may disclose such Confidential Information to
government or other regulatory authorities to the extent that such disclosure
(i) is reasonably necessary to obtain patents or authorizations to conduct
clinical trials with and to market commercially the Product, provided such
party is otherwise entitled to engage in such activities under this Agreement
or (ii) is otherwise legally required including to comply with securities
laws applicable to a public company.

7.3          Survival.  The Sections
of this Article shall survive the expiration or termination of this Agreement.

ARTICLE 8
— PROPRIETARY RIGHTS

8.1          Preexisting Intellectual Property. 
Notwithstanding anything to the contrary herein, each Party shall be the
sole owner of all Intellectual Property Rights owned by it as of the date of
execution of this Agreement or developed by it during the term independent of
this Agreement.

 

13

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

8.2          Ownership of Intellectual Property Rights. 
Supplier shall own all Intellectual Property Rights in and to any
Inventions associated with the Product, as well as all improvements thereto
developed by Supplier during the term of this Agreement.

ARTICLE 9
- FORCE MAJEURE

To the extent any
situations beyond the reasonable control of a party (including but not limited
to war, fire, strike, governmental actions, etc.) prevent a party from properly
executing its obligations under this Agreement such party shall be excused to
such extent.  However, after such force
majeure situation is resolved, the parties hereto shall resume their shipments
under this Agreement and shall negotiate in good faith how to effect and take
delivery of the shipments not made due to the force majeure situation.  If, after a reasonable period of delay as a
result of force majeure, either party is still unable to perform its
obligations hereunder and the it does not appear that such force majeure
condition is likely to be corrected during the next twelve (12) month period
(and the purpose of this Agreement is thereby frustrated), then either party
shall have the option to terminate the Agreement as though the term had
expired.

ARTICLE 10—
LIMITATION OF LIABILITY

THE
PARTIES ACKNOWLEDGE AND AGREE THAT IN NO EVENT SHALL EITHER PARTY BE LIABLE OR
RESPONSIBLE TO THE OTHER PARTY FOR INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE, OR
CONSEQUENTIAL DAMAGES INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF USE,
OR DAMAGE TO BUSINESS OR GOODWILL IN CONNECTION WITH OR ARISING OUT OF THIS
AGREEMENT, PROVIDED, HOWEVER, THIS ARTICLE 10 SHALL NOT APPLY
(A) TO ANY DAMAGES OWING TO AN UNAFFILIATED THIRD PARTY THAT ARE COVERED
BY A PARTY’S INDEMNIFICATION OBLIGATIONS TO THE OTHER PARTY UNDER THIS
AGREEMENT, OR (B) IN THE CASE OF BAD FAITH OR WILLFUL MISCONDUCT.

ARTICLE 11
- REPRESENTATIONS AND WARRANTIES

11.1        Supplier represents and warrants to
Perrigo that:

(a)           FDA Approval.  The Product is approved by the FDA for the
uses set forth in Product labeling.

(b)           Product.

(i)            All Product will conform to, and be
manufactured by in conformity with, the Specifications, FDA regulations, GMP
and any comparable state agency applicable thereto and will be labeled in
accordance with the applicable regulations.

(ii)           Each Product manufactured by, or on
behalf of, Supplier and sold to Perrigo pursuant to this Agreement will meet
the Specifications for such Product in effect at the time title to such Product
passes from Supplier to Perrigo.

(iii)          Each Product delivered to Perrigo
pursuant to this Agreement will, at the time of such delivery, not be
adulterated within the meaning of the Act or contain a 

 

14

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

Significant
Deviation, defect or latent defect, and will not be an article which may not,
under the provisions of such Act, be introduced into interstate commerce.

(iv)          Each Product delivered to Perrigo
pursuant to this Agreement will have not less than twenty-two (22) months of
remaining expiration dating at the time it is delivered to Perrigo in
accordance with Section 3.7 of this Agreement.

(c)           No Liens.  All Product delivered to Perrigo pursuant to
this Agreement will, at the time of such delivery, be free and clear of all
liens, security interests and other encumbrances.

(d)           No Conflict.  The execution, delivery and performance of
this Agreement by Supplier does not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or by which it may be
bound, and does not violate any law or regulation of any court, governmental
body or administrative or other agency having authority over it; Supplier is
not currently a party to, and during the term of this Agreement will not enter
into, any agreements, oral or written, that are inconsistent with its
obligations under this Agreement.

(e)           Authority.  Supplier is validly existing and in good
standing under the laws of the state of its incorporation and has the corporate
power and authority to enter into this Agreement.  This Agreement has been duly executed and
delivered by Supplier and constitutes the valid and binding obligation of
Supplier, enforceable against it in accordance with its terms except as
enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium and other laws relating to or affecting creditors’
rights generally and by general equitable principles.  The execution, delivery and performance of
this Agreement have been duly authorized by all necessary action on the part of
Supplier, its officers and directors.

(f)            Intellectual Property
Infringement.  Supplier has no
knowledge of the existence of any patent, trademark, or other intellectual
property right owned or controlled by a third party that would prevent in any
material way Supplier from manufacturing and/or Perrigo from marketing,
selling, and distributing Product.

(g)           Manufacturing Capability.  Supplier has the capability to meet Perrigo’s
estimated annual requirements for Product as set forth in Exhibit 4.

11.2        Perrigo
represents and warrants to Supplier that:

(a)           No Conflict.  The execution, delivery and performance of
this Agreement by Perrigo does not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or by which it may be
bound, and does not violate any law or regulation of any court, governmental
body or administrative or other agency having authority over it.  Perrigo is not currently a party to, and
during the term of this Agreement will not enter into, any agreements, oral or
written, that are inconsistent with its obligations under this Agreement.

(b)           Authority.  Perrigo is validly existing and in good
standing under the laws of the state of its incorporation and has the corporate
power and authority to enter into this Agreement.  This Agreement has been duly executed and
delivered by Perrigo and constitutes 

 

15

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

the valid and
binding obligation of Perrigo, enforceable against it in accordance with its
terms except as enforceability may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium and other laws relating to
or affecting creditors’ rights generally and by general equitable
principles.  The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of Perrigo, its officers and directors.

ARTICLE 12
- INDEMNIFICATION

12.1        Indemnification by Supplier. 
Except as otherwise specifically provided herein, Supplier shall
indemnify and hold harmless Perrigo and its officers, directors, agents,
employees, Affiliates, and licensees against all claims, actions, losses,
damages, personal injuries (including death), defects, costs, expenses
(including court costs and legal fees on a full indemnity basis) or other
liabilities (“Liabilities”) arising out of or on account of:

(a)           any negligence or willful misconduct
of Supplier (or any third party subcontractor engaged by Supplier) in the
manufacture, packaging, storage, handling or shipment of any Product; or

(b)           any breach or default by Supplier of
any of its covenants, agreements, representations, or warranties set forth in
this Agreement (including, but not limited to, those set forth in Section 11.1(b));
or

(c)           any claim that the Product, the
marketing, sale, distribution or use of the Product, or any process, procedure,
method of manufacturing, technique or equipment used by Supplier (or any third
party subcontractor engaged by Supplier) infringes any Intellectual Property
Rights of another person or entity; or

(d)           any labeling of any Product to the
extent such labeling is supplied by or at the direction of Supplier.

12.2        Indemnification by Perrigo. 
Except as otherwise specifically provided herein, Perrigo shall
indemnify and hold harmless Supplier from all Liabilities arising out of or on
account of:

(a)           any negligence or willful misconduct
of Perrigo in the storage, distribution, handling or sale of Product;

(b)           any labeling of any Product to the
extent that such labeling has been supplied by or at the direction of Perrigo
and applied in accordance with instructions from Perrigo; or

(c)           any representation or warranty made
by Perrigo to its customers or users with respect to Product in its advertising
and marketing materials.

12.3        Procedures.  In the event
that a third-party claim is made or third-party suit is filed for
which either party intends to seek indemnification from the other party
pursuant to this Section, the party seeking indemnification (the “Indemnitee”)
shall promptly notify the other 

 

16

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

party (the “Indemnitor”)
of said claim or suit.  The Indemnitor
shall have the right to control, through counsel of its choosing, the defense
of such third-party claim or suit, but may compromise or settle the same
only with the consent of the Indemnitee, which consent shall not be
unreasonably withheld.  The Indemnitee
shall cooperate fully with the Indemnitor and its counsel in the defense of any
such claim or suit and shall make available to the Indemnitor any books,
records or other documents necessary or appropriate for such defense.  The Indemnitee shall have the right to
participate at the Indemnitee’s expense in the defense of any such claim or
suit through counsel chosen by the Indemnitee.

12.4        Survival.  The Sections
of this Article shall survive the expiration or termination of this Agreement.

ARTICLE 13
- TERM AND TERMINATION

13.1        Term.  The term of
this Agreement shall be through December 31, 2011, unless earlier
terminated or later extended by agreement of the parties or pursuant to the
terms of this Agreement.

13.2        Termination for Breach. 
If either Party shall breach any material obligation required under this
Agreement, the other Party may give written notice of its intention to
terminate this Agreement, describing in reasonable detail the breach.  If the breaching Party fails to remedy such
material breach within ninety (90) days following such written notice, or if
such breach is not capable of cure within such period, and the breaching Party
fails to commence cure procedures within such period and diligently prosecute
such procedures until the breach is cured, then the non-breaching Party
may, in addition to all other remedies available at law or in equity, terminate
this Agreement immediately upon written notice.

13.3        Termination Upon Bankruptcy. 
Either Party may terminate this Agreement effective upon issuance of
written notice if, at any time, the other Party files a petition in bankruptcy,
or enters into an arrangement with its creditors, or applies for or consents to
the appointment of a receiver or trustee, or makes an assignment for the
benefit of creditors, or suffers or permits the entry of an order adjudicating
it to be bankrupt or insolvent.

13.4        Termination for Failure to Receive Launch
Quantities of Product.  Perrigo may, at its option,
terminate this Agreement by written notice to Supplier if validation scale-up
of the Product is not successfully completed and Perrigo does not receive its
ordered launch quantities of the Product by August 15, 2007.

13.5        Termination for Failure to Obtain or
Maintain Acceptable Service Level.  Perrigo may,
at its option, terminate this Agreement by written notice to Supplier if
Supplier fails to attain or maintain the Acceptable Service Level at any time.

13.6        Termination for Intellectual Property
Rights Infringement Action.  Perrigo may,
at its option, terminate this Agreement by written notice to Supplier if any
lawsuit or other legal action is commenced or threatened in writing against
Perrigo or Supplier alleging the Product, or the marketing, sale, distribution,
or use of the Product, or any process, procedure, method of manufacturing,
technique, or equipment used by Supplier (or any third party subcontractor 

 

17

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

engaged by
Supplier) in the production or packaging of Product infringes any Intellectual
Property Right of another person or entity.

13.7        Performance on Termination. 
Upon termination of this Agreement for any reason:  (a) Products manufactured pursuant to
firm orders shall be delivered on the scheduled delivery dates and Perrigo
shall pay Supplier not later than thirty (30) days thereafter (provided, that
Perrigo makes advance payment prior to shipment in the event of termination due
to payment default by Perrigo); (b) all raw materials, labels and
packaging furnished by Perrigo shall be returned, at Perrigo’s expense in the
event that termination is caused by default or material breach by Perrigo; and (c) all
costs of unused raw materials, labels and packaging incurred by Supplier shall
be paid by Perrigo in the event that termination is caused by default or
material breach by Perrigo.

13.8        Post-Termination. 
Any termination of this Agreement shall not relieve either Party of its
obligations or liability for breaches or defaults of this Agreement incurred
prior to or in connection with such termination.  All rights and obligations of the Parties
arising prior to the termination of this Agreement, and all provisions of this
Agreement either allocating responsibility or liability between the Parties
(including the intellectual property provisions in Article 8,  indemnification obligations in Article 11), and
confidentiality obligations in Article 7) and all rights and
obligations of the Parties which, by their terms, are to be performed or
complied with subsequent to or survive the termination of this Agreement, shall
survive the termination of this Agreement and continue in effect.

ARTICLE 14-
MISCELLANEOUS

14.1        Counterparts. 
This Agreement and any amendment or supplement hereto may be executed in
any number of counterparts and any Party hereto may execute any such
counterpart, each of which when executed and delivered shall be deemed to be an
original and all of which counterparts taken together shall constitute but one
and the same instrument.  The execution
of this Agreement and any such amendment or supplement by any Party hereto will
not become effective until counterparts hereof have been executed by both
Parties hereto.

14.2        Compliance with Laws. 
Each Party shall comply in all material respects with all applicable
laws and regulations including, but not limited to, those concerning drugs or
drug manufacture regulatory requirements, the Products in particular,
protection of the environment and health and safety of its workers.

14.3        Use of Names. 
Except as otherwise required by law or by the terms of this Agreement or
mutually agreed upon by the Parties, neither Party shall make any use of the
name of the other Party in any advertising or promotional material without the
prior written consent of the other Party, which consent shall not be
unreasonably withheld.

14.4        Independent Contractors.  The
relationship between Perrigo and Supplier is that of independent contractors,
and nothing herein shall be deemed to constitute the relationship of partners,
joint venturers, or principal and agent between Perrigo and Supplier. Neither
Party shall have any express or implied right or authority to assume or create
any obligations on behalf of or 

 

18

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

in the name of the
other Party or to bind the other Party to any contract, agreement or
undertaking with any third party.

14.5        Assignment.  This
Agreement may not be assigned or otherwise transferred by either Party without
the prior written consent of the other Party; provided, however, either Party
may, without such consent, assign this Agreement (a) in connection with
the transfer or sale of all or substantially all of the assets of such Party or
the line of business or drug products of which this Agreement forms a part, (b) in
the event of the merger or consolidation of a Party hereto with another
company, or (c) to any Affiliate of the assigning Party. Any purported
assignment in violation of the preceding sentence shall be void.  Any permitted assignee shall assume all
obligations of its assignor under this Agreement.  No assignment shall relieve either Party of
responsibility for the performance of any obligation, which accrued prior to
the effective date of such assignment.

14.6        Continuing Obligations. 
Termination, assignment or expiration of this Agreement shall not
relieve either Party from full performance of any obligations incurred prior
thereto.

14.7        Waiver.  Neither Party’s
waiver of any breach or failure to enforce any of the terms and conditions of
this Agreement, at any time, shall in any way affect, limit or waive such Party’s
right thereafter to enforce and compel strict compliance with every term and
condition of this Agreement.

14.8        Severability. 
Each Party hereby expressly agrees that it has no intention to violate
any public policy, statutory or common laws, rules, regulations, treaty or
decision of any government agency or executive body thereof of any country or
community or association of countries; that if any word, sentence, paragraph,
article or combination thereof in this Agreement is found by a court or
executive body with judicial powers having jurisdiction over this Agreement or
either party hereto, in a final unappealed order, to be in violation of any
such provisions in any country or community or association of countries, such
words, sentences, paragraphs, Articles or combination shall be inoperative in
such country or community or association of countries and the remainder of this
Agreement shall remain binding upon the Parties, so long as enforcement of the
remainder does not violate the Parties’ overall intentions in this transaction.

14.9        Headings.  The headings
in this Agreement are for convenience of reference only and shall not affect
its interpretation.

14.10      Exhibits.  All exhibits
referred to herein form an integral part of this Agreement and are incorporated
into this Agreement by such reference.

14.11      Notices.  All notices
and other communications required or permitted to be given under this Agreement
shall be in writing and shall be delivered personally or sent by (a) registered
or certified mail, return receipt requested, (b) an
internationally-recognized courier service, charges prepaid or (c) facsimile
(with the original promptly sent by any of the foregoing manners), and shall be
deemed to have been given upon receipt.

 

19

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

Any such notices shall be
addressed to the receiving party at such party’s address set forth below, or at
such other address as may from time to time be furnished by similar notice by
either party:

	
  If to Supplier:

  	
   

  	
  A. Mark Schobel

  President, CEO

  30 Technology Drive

  Warren, NJ 07059

  Facsimile No.: (908) 561-1209

  
	
   

  	
   

  	
   

  
	
  If to Perrigo:

  	
   

  	
  L. Perrigo Company

  515 Eastern Avenue

  Allegan, MI 49010

  Attn: Vice President of Procurement

  Facsimile No.: (269) 673-7534

  
	
   

  	
   

  	
   

  
	
  With a copy of legal notices to:

  	
   

  	
  L. Perrigo Company

  Attn:Assistant General Counsel

  515 Eastern Avenue

  Allegan, MI 49010

  Facsimile No.: (269) 673-1386

  

 

14.12      Review by Legal Counsel. 
Each of the Parties agrees that it has had the opportunity to review
this Agreement with its legal counsel. 
Accordingly, the rule of construction that any ambiguity in this Agreement
is to be construed against the drafting party shall not apply.

14.13      Entire Agreement. 
This document constitutes the full understanding of the Parties and a
complete and exclusive statement of the terms of their agreement.  No terms, conditions, understanding, or
agreement purporting to modify or vary the terms of this Agreement shall be
binding unless hereafter made in writing and signed by both Parties.  No modification to this Agreement shall be
effected by the acknowledgment or acceptance of any purchase order or shipping
instruction forms or similar documents containing terms or conditions at
variance with or in addition to those set forth herein.

14.14      Import Compliance. 
The Parties agree to comply with all statutes, rules and requirements
regarding the importing of Product into the United States, including but not
limited to proper declaration of dutiable values.

14.15      Choice of Law. 
The validity, interpretation and performance of this Agreement shall be
governed and construed in accordance with the laws of Michigan without regard
to the conflicts of law provisions thereof. 
The application of the U.N. Convention on Contracts for the
International Sale of Goods (1980) is excluded.

14.16      Debarment.  Supplier
certifies that it is not debarred under subsections 306(a) or 306(b) of the
Federal Food, Drug, and Cosmetic Act, as
amended, and that it has not and will not use in any capacity the services of
any person debarred under such law with respect to services to 

 

20

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

be performed under
this Agreement.  Supplier further
certifies that it will amend this certification as necessary in light of new
information.

14.17      Insurance.  Supplier
shall carry and maintain at its expense during the term of this Agreement
appropriate insurance coverage of the kind acceptable to Perrigo, and with
liability limits to protect itself and Perrigo from and against any and all
claims or liabilities that may arise directly or indirectly as a result of its
performance under this Agreement. 
Supplier shall provide a certificate evidencing adequate insurance
coverage upon Perrigo’s request.

The parties hereto
have each caused this Agreement to be executed by their duly authorized representatives
on the date and year hereinafter set forth.

	
  L. PERRIGO COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/
  Kitty Cairns

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  Kitty
  Cairns

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  VP
  Procurement

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  April
  6, 2007

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MONOSOLRX
  LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/
  A. Mark Schobel

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  A.
  Mark Schobel

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  President/CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  March
  20 , 2007

  	
   

  	
   

  

 

 

21

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

EXHIBIT 1

to

Supply Agreement

between

MonoSolRx LLC

and

L. Perrigo Company

Product
Specifications

[*]

 

 

 

1-1

 

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

EXHIBIT 2

to

Supply Agreement

between

MonoSolRx LLC

and

L. Perrigo Company

Product
Development

[*]

 

 

 

 

2-1

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

EXHIBIT 3

to

Supply Agreement

between

MonoSolRx LLC

and

L. Perrigo Company

Supplier’s Good
Faith Estimate of Total Expenses for Generating Two-Year Stability Data

[*]

 

 

 

 

3-1

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

EXHIBIT 4

to

Supply Agreement

between

MonoSolRx LLC

and

L. Perrigo Company

Initial Price of
the Product and Perrigo’s Estimated Annual Requirements

[*]

 

 

 

 

4-1

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant to 17 C.F.R. §§200.80(b) and 230.406

 

EXHIBIT 5

to

Supply Agreement

between

MonoSolRx LLC

and

L. Perrigo Company

Quality Agreement

                [Before Supplier manufactures
any commercial quantities of the Product for Perrigo, the Parties will, acting
in good faith and in a commercially reasonable manner, jointly prepare and sign
a mutually acceptable quality agreement between the Parties that applies to all
Product that Supplier supplies to Perrigo under this Agreement.]

 

 

 

 

00035 (100) 321121.03

 

5-1EXHIBIT 10.12

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant
to 17 C.F.R. §§200.80(b) and 230.406

 

	
  Confidential
  treatment has been requested for portions of this exhibit. The copy filed
  herewith omits the information subject to the confidentiality request. Omissions
  are designated as [*]. A
  complete version of this exhibit has been filed separately with the
  Securities and Exchange Commission.

  

 

EXECUTION COPY

BENZYDAMINE DEVELOPMENT AGREEMENT

This Development
Agreement is entered into as of 1 April 2006 by and between MonoSolRx, a
Delaware limited liability company with offices at 6560 Mellon Road, Portage
IN, USA (“MSRX”) and Aziende Chimiche Riunite Angelini Francesco A.C.R.A.F. S.p.A.,
a company with only one shareholder under direction and coordination of Finaf
S.p.A., with offices at Viale Amelia 70, I - 000181 Roma, Italy (“Angelini”).

Whereas, MSRX specializes in the development and
manufacture of fast dissolving oral film drug delivery dosage forms (the “MSRX
Delivery System”), and

Whereas, Angelini wishes to explore the
potential development and commercialization of a film containing benzydamine
using the MSRX Delivery System.

The parties, for due
and sufficient consideration the receipt of which is hereby acknowledged, agree
as follows.

1.                                      The Deliverables.  MSRX
will use its best efforts to develop a mint flavored version of its current
Benzydamine film according to the specifications described in Annex 1 (the “Specifications”).  Parties agree that Angelini will review if
the excipients contained in the formulation comply with the excipients
regulations described in Annex 1.  Following
acceptance of the formulation by Angelini, MSRX - on its production equipments
- will make at least 3 (three) batches.  Each
batch will contain 300,000 film strips (the “Deliverables”).  The Deliverables will be delivered to
Angelini within 10 (ten) labour day, from packaging of strips, by and at the
cost of MSRX.  For the production of the
Deliverables, Angelini agrees to supply to MSRX not more than 25 kg of Benzydamine,
free of charge, therefore all the quantities of Benzydamine - ordered by MSRX -
exceeding 25 kg shall be supplied at the price of USD[*]/kg
Ex Works Angelini Manufacturing Site.

2.                                      Experimental Stability.  Angelini
shall conduct experimental stability on the Deliverables according to the
Analytical development and pre-stability program set out in Annex 2 and agrees to
share those results with MSRX under confidentiality.  MSRX shall make personnel available for
consultation regarding analytical testing methods as requested by Angelini, it
being understood that Angelini shall be ultimately responsible for all
analytical testing.  Angelini shall make
such information and methods available to MSRX as MSRX may reasonably request
for use in cleaning validation of its production equipment in connection with
the Benzydamine production.

 

 

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant
to 17 C.F.R. §§200.80(b) and 230.406

 

3.                                      Further Commercialization.  Angelini
may continue with further development and/or commercialization efforts, at its
sole option, in the territories listed in the Annex 3.  In the event that Angelini wishes to continue
such efforts, including the negotiation of commercial supply of product, MSRX
will negotiate a commercial supply agreement on the basis of foil-foil pouched
cassettes [*] for less than $[*]
per item  (subject to certain batch size minimums
etc, exclusive of the cost of the drug to be supplied by Angelini and ex works
Portage)

4.             Development Cost for Deliverables.  MSRX shall invoice Angelini forty thousand
($40,000) US dollars, half upon commencement and half upon delivery to Angelini
of the materials for experimental stability.

5.             Terms.  This agreement shall be governed in
accordance with the laws of the Republic of Italy.

In witness whereof, this
agreement was duly executed.

	
   

  	
  A.C.R.A.F.
  S.p.A

  	
   

  	
   

  	
  MONOSOLRX,
  LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Gianloigi
  Mariafrozza

  	
  By: 

  	
  /s/ Alexander M.
  Schobel

  
	
   

  	
   

  	
  Name: GIANLOIGI
  MARIAFROZZA

  	
   

  	
  Name: Alexander
  M. Schobel 

  
	
   

  	
   

  	
  Title:   MANAGING
  DIRECTOR 

  	
   

  	
  Title:   Pres.
  & CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DATE, 25TH
  MAY 2006

  	
   

  	
   

  
							

 

 

2

CONFIDENTIAL TREATMENT REQUESTED

Pursuant
to 17 C.F.R. §§200.80(b) and 230.406

 

ANNEX I

[*]

 

 

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant
to 17 C.F.R. §§200.80(b) and 230.406

 

 

ANNEX II

Analytical Development
and Pre-Stability Program

[*]

 

 

CONFIDENTIAL TREATMENT REQUESTED

Pursuant
to 17 C.F.R. §§200.80(b) and 230.406

 

ANNEX III

[*]

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